Top 2 High-Yield ASX Stocks for Passive Income [2024] (2026)

In the world of investing, the pursuit of stable and consistent returns is a constant quest. For those seeking a steady income stream, dividend-paying stocks can be a valuable asset. Today, we delve into two ASX shares that stand out for their impressive dividend yields and growth potential: WAM Leaders Ltd (ASX: WLE) and Universal Store Holdings Ltd (ASX: UNI).

WAM Leaders Ltd: A Track Record of Success

WAM Leaders is a listed investment company (LIC) that targets quality larger ASX shares with the potential for compelling returns. Their active portfolio management strategy allows them to buy and sell at opportune prices, resulting in an impressive average annual return of 12% between May 2016 and June 2026. This outperformance of the S&P/ASX 200 Accumulation Index is a testament to their skill.

One of the key strengths of WAM Leaders is its consistent dividend growth. Since starting to pay dividends in FY17, the company has increased its annual dividend per share every year. This dedication to providing shareholders with a steady income stream is commendable. The FY26 annual dividend of 9.6 cents per share translates to a grossed-up dividend yield of 9.8%, including franking credits, which is a significant return for investors.

The company's sizeable profit reserve of approximately 27 cents per share further reinforces its ability to sustain and potentially grow its dividends in the future. With a strong track record and a commitment to dividend growth, WAM Leaders is a solid choice for investors seeking a reliable income source.

Universal Store Holdings Ltd: A Retail Success Story

Universal Store Holdings, a business with a diverse portfolio of quality retail apparel brands, has also demonstrated a strong commitment to dividend growth. The company started paying dividends in FY21 and has consistently increased its payout each year since, showcasing its ability to generate stable and growing passive income for shareholders.

The recent financial performance of Universal Store is particularly impressive. In FY26 to week 43, sales growth was robust, with Universal Store up 11.8%, Perfect Stranger up 39.8%, and CTC up 14.5%. This strong sales performance is a positive sign for the company's future prospects. Analysts predict that this trend will continue, with the business expected to report sales growth of 11.5% and underlying operating profit (EBITA) of 15.4% for FY26. These numbers are a strong indicator of the company's ability to sustain and potentially increase its dividend payments.

The forecasted grossed-up dividend yield of 8.3% in FY27, including franking credits, is an attractive prospect for investors seeking a reliable income stream. Universal Store's commitment to dividend growth, coupled with its strong financial performance, makes it a compelling choice for those seeking a stable and growing dividend-paying stock.

Conclusion: A Balanced Approach

Both WAM Leaders and Universal Store Holdings offer investors the opportunity to generate a steady and growing income stream through their high dividend yields. While these companies are certainly appealing, it's important to remember that a well-rounded investment portfolio should consider a variety of factors beyond just dividend yields. A balanced approach, taking into account risk, growth potential, and market conditions, is essential for long-term success in the investing world.

In conclusion, these two ASX shares provide a compelling case for the power of dividend-paying stocks. With their strong track records, commitment to dividend growth, and impressive financial performance, they are certainly worth considering for investors seeking a reliable and consistent income source.