ASX dividend shares could be a great buy for 2026 after multiple rate cuts by the RBA in 2025.
Every 25 basis points (0.25%) rate cut by the RBA significantly reduces the potential interest payments on money in the bank. If we want our cash to generate a good return, it could be useful to consider strategically investing in dividend-paying businesses that could also deliver long-term capital growth.
Here are two of my favourite ASX dividend shares right now:
Future Generation Global Ltd (ASX: FGG)
This business is a listed investment company (LIC). The role of a LIC is usually to invest in other shares/assets for shareholders and try to produce good returns within the portfolio.
LICs can then use the investment returns generated by the portfolio and pay dividends to investors. Companies (as opposed to trusts) have the ability to provide a steadily-rising dividend by tapping into profit reserves of returns generated (from previous years, if needed).
Future Generation Global has a special setup compared to most other LICs because of the in-built philanthropy. It is invested in a portfolio of funds, managed by fund managers who work for free.
Those fund managers work pro bono so Future Generation Global can donate 1% of its net assets each year to youth mental health causes.
Pleasingly, over the prior seven years, the portfolio has returned an average of 10.9% per year. That has allowed it to increase its annual dividend each year between 2019 to 2025.
Its expected dividend yield for 2025, including the franking credits, comes to around 7.5%.
Washington. H. Soul Pattinson and Co. Ltd (ASX: SOL)
WHSP is a favourite among investors who like steady and consistent dividend payments. That’s because it has increased its regular dividend every year this century – more than 25 years in a row of rises.
It has achieved this by holding an impressive, diversified portfolio of assets that can grow by themselves. It recently acquired the former ASX business Brickworks, which gave the ASX dividend share 100% control of Brickworks’ building products segment and its stakes of the industrial properties it owned.
WHSP is also invested across a number of other areas including telecommunications and resources (which includes a stake in TPG Telecom Ltd (ASX: TPG) and New Hope Corporation Ltd (ASX: NHC)). As the years go by, WHSP is building its portfolio with additional investments, giving it more fuel to grow and pay faster-growing dividends.
While long-term gains aren’t a certain thing, I’m optimistic the business can grow over the long-term. Its dividend yield currently comes to approximately 4%, including the franking credits.
