I'd buy these ASX dividend shares over CBA shares for income

Commonwealth Bank of Australia (ASX: CBA) shares are not one of my top picks for dividend income. There are quite a few other ASX dividend shares that are more appealing for passive income.

CBA is a great bank in the Australian financial sector, though it faces a lot of competition from the likes of ANZ Group Holdings Ltd (ASX: ANZ), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB) and Macquarie Group Ltd (ASX: MQG), keeping a lid on lending margins.

In the current economic climate, I don't think CBA is likely to deliver a big dividend yield or a lot of growth.

According to the (independent) projection on Commsec, CBA is forecast to grow its annual dividend per share by just 2% to $5.15. At the time of writing, that translates into a grossed-up dividend yield of 4.4%, including franking credits.

I'm going to highlight two ASX dividend shares that could provide a better dividend yield than CBA shares and grow the dividend faster.

WCM Global Growth Ltd (ASX: WQG)

The first business I want to highlight is a listed investment company (LIC). LICs are very useful for passive income because they represent a portfolio of diversified assets and they can turn investment profits into dividend payments.

WCM invests by targeting quality businesses with an improving economic moat. Having competitive advantages is positive to stay ahead of competitors, so having an improving economic moat is a strong sign of improving financials.

There are many ways to judge a company's economic moat, so one of the main elements WCM looks for is a rising return on invested capital (ROIC). That essentially means it's making more profit for how much has been invested in the business.

The LIC also wants its investments to have corporate cultures that support a strengthening economic moat. WCM thinks that corporate culture is a key factor that influences whether an economic moat strengthens or not.

Pleasingly, the WCM Global Growth portfolio has delivered an average net return of 23.6% per year over the three years to 30 September 2026. Of course, past performance is not a reliable indicator of future returns. With good returns, the LIC has increased its annual dividend every year since 2019.

Over the next four quarters to September 2027, the WCM Global Growth board of directors has guided that the ASX dividend share will pay a total of 10.1 cents per share (14.6% higher than FY26), which is a grossed-up dividend yield of 7.7%, including franking credits, at the time of writing.

I think it's a good time to invest with the yield that high, much higher than what's on offer from CBA shares.

Centuria Industrial REIT (ASX: CIP)

The other top ASX dividend share I want to highlight is this real estate investment trust (REIT) which owns a portfolio of industrial properties across Australia's metropolitan areas.

Industrial property is a great place to invest because of the tailwinds the sector is experiencing.

Multiple drivers are increasing the value of the real estate, including e-commerce, data centres, cold storage (for food and medicine) and so on. In the FY26 result, Centuria Industrial REIT reported 5.2% like-for-like net operating income (NOI) growth, which is a solid growth rate considering the headwind of higher interest rates.

The business expects to grow its distribution by 3% in FY27 – faster than CBA – and pay 17.3 cents per unit. That translates into a distribution yield of 6%, which is a lot more than what's potentially on offer for owners of CBA shares.

This looks like a good time to invest because in August, it reported that its June 2026 net tangible assets (NTA) per unit was $4.01. That means it's currently trading at a 28% discount to its latest NTA, which is an appealing valuation and unlocks a larger distribution yield.

The post I'd buy these ASX dividend shares over CBA shares for income appeared first on The Motley Fool Australia.

Motley Fool contributor Tristan Harrison has positions in Wcm Global Growth. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Macquarie 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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