2 ASX dividend shares with BIG dividend yields

These 2 ASX dividend shares have big dividend yields. One of them is Nick Scali.
The post 2 ASX dividend shares with BIG dividend yields appeared first on The Motley Fool Australia. –

There are a group of ASX dividend shares that are currently offering very high dividend yields compared to the overall market.

These are businesses that generally have a high dividend payout ratio and a modest valuation. High valuations push down prospective yields.

In a world where interest rates are exceptionally low, high dividend yields may be attractive.

Nick Scali Limited (ASX: NCK)

Nick Scali is a relatively large furniture business, with a market capitalisation of around $1 billion according to the ASX.

It’s currently rated as a buy by Citi. The broker points out that Nick Scali has a strong balance sheet that can help shareholder returns.

Indeed, the ASX dividend share recently confirmed that it is in non-exclusive discussions with Greenlit Brands about a potential deal to buy the Plush Sofas business.

Nick Scali said it actively considers acquisition opportunities to produce growth from time to time, if it makes strategic sense. It has to have the potential for synergies, have a good financial impact and create long-term for Nick Scali shareholders. If the deal goes ahead, it’ll be funded by cash and debt, but there’s no guarantee the deal would go ahead.

Its total written sales orders for the group continue to remain elevated, with growth of 50% in the third quarter. In April 2021, there was growth of 242% year on year when there were widespread store closures in FY20.

In FY21, Nick Scali is expecting earnings before interest, tax, depreciation and amortisation (EBITDA) to be approximately $120 million. Net profit after tax is expected to be in the range of $78 million to $80 million, an increase of between 85% to 90%.

Citi is expecting the FY22 dividend from Nick Scali to be 48.60 cents, which would translate to a grossed-up dividend yield of 5.6%.

The ASX dividend share has growth plans including expanding the store network, launching in adjacent product categories and improving its online offering.

Centuria Industrial REIT (ASX: CIP)

This is the largest pure play way to get exposure to industrial commercial property, in the form of a real estate investment trust (REIT).

Those properties are located in important metropolitan locations, with quality and diverse tenants.

The fund manager tries to provide capital growth and income for investors.

It recently spent another $86.1 million on three properties, being two distribution centres and a manufacturing property. Those assets come with an initial yield of 5% with a weighted average lease expiry of 5.8 years.

Prior to those acquisitions, in its revaluation update, the ASX dividend share said the pro forma net tangible asset (NTA) was $3.85 per unit. The portfolio had an occupancy rate of almost 99% with a WALE of close to 10 years.

Fund manager Jesse Curtis recently said:

Australia’s industrial real estate market remains a highly sought-after sector attracting investment demand from domestic and international capital. Within the past six months the market has seen elevated transaction volumes with major asset and portfolio sales setting new benchmarks…Strong sector tailwinds continue to provide long-term benefits to industrial real estate with e-commerce and onshoring increasing demand for quality industrial accommodation.

It’s currently rated as a buy by the broker Macquarie Group Ltd (ASX: MQG). The FY22 distribution is expected by the broker to be 18.3 cents per unit, which contributes to a forward distribution yield of 4.85%.

The post 2 ASX dividend shares with BIG dividend yields appeared first on The Motley Fool Australia.

Should you invest $1,000 in Nick Scali right now?

Before you consider Nick Scali, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Nick Scali wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of May 24th 2021

More reading

COVID Delta is raging: 4 ASX shares to buy in turbulent times

Lockdowns hurt, ASX falls, Wesfarmers climbs, and the Aussie set to fall? Scott Phillips on Nine’s Late News

ASX 200 drops, Telstra falls, Altium declines

Why the Nick Scali (ASX:NCK) share price is going gangbusters
3 high-yielding ASX dividend shares

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!