ASX dividend shares can provide excellent passive income for dividend investors, and in my view, there are some wonderful, underrated opportunities out there.

The higher interest rate and elevated inflation environment have led to some exposed businesses seeing their share prices decline. That can be useful for investors because it pushes up the potential passive income.

For example, if a business had a 6% dividend yield and the share price fell 10%, then the yield would become 6.6%, assuming the payout in dollar terms stays the same. Businesses can decide to increase, maintain or decrease their dividend with each earnings result.

With the above in mind, I'm going to talk about two ASX dividend shares that could grow their payouts in the coming years.

Nick Scali Limited (ASX: NCK)

Nick Scali is a relatively large furniture business with three different brands – Nick Scali, Plush, and Fabb Furniture in the UK.

Prior to FY24, which was impacted by the current economic conditions, the business had a very impressive dividend record. It grew its annual payout every year between 2013 and 2023. It's clear the company and the board want to reward shareholders, including management.

The Nick Scali share price is down close to 10% since its all-time high in September 2024, making it a better value to me and providing a stronger dividend yield. In FY24, it paid an annual dividend per share of 68 cents, which currently translates into a grossed-up dividend yield of 6.4%, including franking credits.

A few different drivers could help Nick Scali grow its payout in future years, including more stores in Australia, significant expansion and operational improvement in the UK, growth of online sales, and a recovery of consumer spending.

I think this ASX dividend share can make exceptional buying during a sell-off when the market is worried about retailers, as we saw in 2022 and 2023.

Charter Hall Long WALE REIT (ASX: CLW)

This is a real estate investment trust (REIT) that owns a diversified property portfolio across Australia, including pubs and bottle shops, office buildings with government tenants, telecommunications exchanges, service stations, grocery and distribution centres, food manufacturing, waste and recycling, and more.

At the end of FY24, the business had a weighted average lease expiry (WALE) of more than 10 years, which gives the ASX dividend share and investors a lot of visibility and security over future rental income. Impressively, it has an occupancy rate of 99.9%, ensuring its portfolio is working hard to generate rental profits that can be paid to investors.

As a useful bonus, the business is currently undertaking a security buyback of up to $50 million. The business described this as a capital management initiative that will add to earnings per security (EPS) because there are fewer securities on the market. It also helps support the Charter Hall Long WALE REIT share price.

At 30 June 2024, it had net tangible assets (NTA) per security of $4.66, so the current share price is at a discount of more than 18% to this.

Not only is the valuation good, but it also has a growing rental income. Some of its revenue is linked to inflation, while the rest has fixed annual increases built in, helping support the distribution during this time of significantly higher interest costs. It's expecting to pay a distribution of 25 cents per security in FY25, which translates into a forward distribution yield of 6.5% from the ASX dividend share.