Diversifying Your Dividend Portfolio: Two ASX Shares to Consider

The Commonwealth Bank of Australia (ASX: CBA) is a popular investment choice in Australia, but diversification is key when it comes to building a strong dividend portfolio. While CBA has delivered solid returns over the past few years, spreading investments across different sectors can help mitigate risks and potentially increase passive income.

Two ASX dividend stocks that could be compelling options for diversification are Medibank Private Ltd (ASX: MPL) and Charter Hall Long WALE REIT (ASX: CLW).

Medibank is the largest private health insurance business in Australia, with its Medibank and ahm brands. The company’s earnings are driven by the number of policyholders it has, and recent results have shown growth in both resident and non-resident policy units. With Australia’s growing and aging population, there are positive tailwinds for Medibank’s future performance. At the current share price, shareholders could receive a grossed-up dividend yield of 6.3% in FY24.

On the other hand, Charter Hall Long WALE REIT is a diversified real estate investment trust with a portfolio occupancy rate of 99.9%. The REIT owns properties across various sectors, including agri-logistics, social infrastructure, office, industrial and logistics, hospitality, service stations, and quality retail. With blue-chip tenants like the Australian government, Telstra, BP, and Endeavour Group, the rental income is expected to be resilient. The REIT has a weighted average lease expiry of more than 10 years, providing income security and rental visibility for the coming years. It is expecting to pay a distribution per unit of 26 cents in FY24, translating into a current distribution yield of 7.5%.

Diversifying a dividend portfolio with stocks like Medibank and Charter Hall Long WALE REIT could provide investors with a more balanced and potentially higher passive income stream compared to relying solely on CBA.