With an average 6% dividend yield, here are 2 ASX dividend shares to consider for a passive income of $600

MotleyFool
02-05

Looking to generate passive income from the share market? One of the best ways to do so is by investing in quality ASX dividend shares that offer attractive dividend yields.

With that in mind, let's take a look at two dividend shares that brokers rate as buys. And with an average yield of 6% across the two, a $10,000 investment split equally across these stocks could generate approximately $600 in annual passive income.

Here's what you need to know about these shares:

Harvey Norman Holdings Limited (ASX: HVN)

The first ASX dividend share for income investors to consider is leading retailer Harvey Norman. It operates a network of company-owned and franchised stores across Australia and internationally, selling household goods, electronics, and furniture.

Bell Potter is feeling optimistic about Harvey Norman's outlook. The broker sees a major opportunity in an artificial intelligence-driven upgrade cycle for consumer electronics. It believes that the retailer is well-placed to benefit from this trend, particularly given its strong supplier relationships and exclusive access to new products.

As for income, Bell Potter is forecasting fully franked dividends of 25.9 cents per share in FY 2025 and then 28.5 cents per share in FY 2026. Based on the current Harvey Norman share price of $5.15, this equates to attractive dividend yields of 5% and 5.5%, respectively.

The broker currently has a buy rating and $5.80 price target on its shares.

HomeCo Daily Needs REIT (ASX: HDN)

Another ASX dividend share for income investors to consider buying is HomeCo Daily Needs REIT. This real estate investment trust (REIT) owns and operates a portfolio of convenience-based retail assets, including neighbourhood shopping centres and large-format retail properties.

Morgans is bullish on HomeCo Daily Needs due to its high occupancy rates and resilient cash flows. The broker also highlights the REIT's strong tenant base, which includes major retailers like Coles, Woolworths, and Wesfarmers. Additionally, HomeCo's properties are strategically located in high-growth metro areas, which could make them attractive long-term assets.

In terms of income potential, the team at Morgans expects HomeCo Daily Needs to pay dividends of 8.5 cents per share in FY 2025 and then 8.7 cents per share in FY 2026. Based on the current HomeCo Daily Needs share price of $1.17, this implies dividend yields of 7.25% and 7.4%, respectively, for investors.

Morgans currently has an add rating and $1.36 price target on its shares.

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