2 top ASX dividend share buys for passive income in January 2026

The Reserve Bank of Australia (RBA) cut the cash rate multiple times last year, making ASX dividend shares a lot more appealing for passive income.

It's certainly possible that the RBA could decide to increase the interest rate 2025, so we'll have to see what happens. The strength of inflation could be key.

I'm going to outline two ASX dividend shares that could be a great option today.

Charter Hall Long WALE REIT (ASX: CLW)

This is a real estate investment trust (REIT) that owns a diversified portfolio of properties across Australia's cities. It has built its asset base to have a long weighted average lease expiry (WALE), hence the name.

At the end of FY25, the business had a WALE of 9.3 years, which is an exceptional level of income visibility and security for investors.

Those properties are from a diverse array of tenant industries including pubs and hotels, government-tenanted buildings, telecommunication exchanges, data centres, service stations, grocery and distribution, food manufacturing and so on.

One of the reasons why I think it's such an effective ASX dividend share pick today is because it has steady rental growth built into its contracts and it's able to provide investors with a high degree of certainty regarding its rental earnings.

For FY26, it has guided that its operating earnings per security (EPS) and distribution per security will both be 25 cents. That translates into a distribution yield of 6.1%, which I think is an attractive level of passive income.

Pinnacle Investment Management Group Ltd (ASX: PNI)

Pinnacle has been one of the most impressive ASX dividend shares considering it operates in a very volatile sector – funds management. It buys stakes in promising funds management businesses (affiliates) and helps them grow.

The company offers its affiliates a number of services such as fund administration, compliance, finance, legal, distribution and client services, seed funds under management (FUM), technology, working capital and more.

Pinnacle is benefiting from the natural investment growth of the affiliates' funds, the net inflows they're seeing and the occasional addition of a new affiliate to the portfolio.  

In the first three months of FY26, Pinnacle saw its FUM rise 10% (compared to June 2025) to $197.4 billion. This growth included total net inflows of $13.3 billion for the quarter.

With most affiliate strategies having outperformed their benchmarks over the prior five years, they have a good track record to attract more FUM for the foreseeable future, which is a good tailwind for earnings.

The ASX dividend share increased its annual dividend every year between FY17 to FY25, aside from FY20 when it maintained the payout. It currently has a grossed-up dividend yield of around 5%, including franking credits. I think that's a great starting point for an ASX dividend share.

The post 2 top ASX dividend share buys for passive income in January 2026 appeared first on The Motley Fool Australia.

Motley Fool contributor Tristan Harrison has positions in Pinnacle Investment Management Group. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Pinnacle Investment Management Group. The Motley Fool Australia has positions in and has recommended Pinnacle Investment Management Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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