Insights

2 top ASX dividend shares with BIG yields

Adairs and Charter Hall Long WALE REIT are two ASX dividend share ideas with large yields.
The post 2 top ASX dividend shares with BIG yields appeared first on The Motley Fool Australia. –

Some ASX dividend shares offer quite large income yields and have been growing underlying earnings as well.

COVID-19 provided plenty of impacts and volatility during FY21. But there are some businesses that are expected to report large shareholder payouts in FY21 and FY22.

Here are two that may be candidates as dividend ideas:

Charter Hall Long WALE REIT (ASX: CLW)  

This is one of the larger real estate investment trusts (REITs). It has a market capitalisation of around $3 billion according to the ASX.

It is invested across a variety of different property sectors, but the overarching theme is that the ASX dividend share aims to find quality tenants that will sign up to long-term leases.

Charter Hall Long WALE REIT is invested in a number of different sectors including ‘long weighted average lease expiry (WALE) retail’, industrial, office, social infrastructure and agri-logistics.

To be more specific, its portfolio income exposure is split as follows: government (20%), telecommunications (15%), grocery and distribution (14%), fuel and convenience (12%), pubs and bottle shops (10%), food manufacturing (9%), waste and recycling (2%) and ‘other’ (18% – which includes Bunnings).

It also has a number of high-quality tenants like Telstra Corporation Ltd (ASX: TLS), BP, Endeavour Group Ltd (ASX: EDV), Inghams Group Ltd (ASX: ING), Coles Group Ltd (ASX: WES), David Jones and Metcash Limited (ASX: MTS).

The ASX dividend share recently made some more acquisitions, which included spending $135.2 million on a 33.3% tenants in common title interest in the Myer Holdings Ltd (ASX: MYR) Bourke Street Mall property in the Melbourne CBD. Those combined acquisitions had a passing yield of 5.1% and a long WALE of 11.2 years.

With a 100% distribution payout ratio, it’s expecting FY21 operating earnings per share (EPS) of 29.2 cents – that represents a distribution yield of 6%. Operating EPS is then expected to grow by another 4.5% in FY22.

It’s currently rated as a buy by Citi with a price target of $5.30.

Adairs Ltd (ASX: ADH)

Adairs is one of the leading homewares retailers on the ASX.

One of the main ways that it is increasing its market share is by rapid online sales growth.

In the first half of FY21, total sales were up 34.8% to $243 million. Group online sales were $90.2 million, being 37.1% of the total. Adairs online sales increased by 95.2%, whilst Mocka sales (which is completely online) went up 44.4% to $28 million.

The company has been working on its gross profit margin, which saw an increase of 500 basis points in the first six months of FY21, the underlying Adairs gross profit margin improved 690 basis points to 67.8%.

This strong improvement in the margin allowed the company to grow its underlying group earnings before interest and tax (EBIT) by 166% to $60.2 million. Statutory net profit after tax (NPAT) grew 233.4% to $43.9 million and EPS came in at 25.9 cents. This allowed the board to declare an interim dividend of 13 cents per share.

The ASX dividend share has a number of initiatives to grow further. It wants to continue improving the Adairs online offering, improve the Mocka market share in Australia, upsize its stores and finish its new national distribution centre.

According to Commsec, Adairs is valued at 11x FY22’s estimated earnings with a forward grossed-up dividend yield of 9.4%.

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

These Dividend Stocks Could Be Your Next Cash Kings (FREE REPORT)

Motley Fool Australia’s Dividend experts recently released a brand-new FREE report revealing 3 dividend stocks with JUICY franked dividends that could keep paying you meaty dividends for years to come.

Our team of investors think these 3 dividend stocks should be a ‘must consider’ for any savvy dividend investor. But more importantly, could potentially make Australian investors a heap of passive income.

Don’t miss out! Simply click the link below to grab your free copy and discover these 3 high conviction stocks now.

Returns As of 15th February 2021

More reading

What’s happening to the Telstra (ASX:TLS) share price?
Why has the Endeavour share price gone nowhere this month?

Macquarie Telecom (ASX:MAQ) rockets 12% to new all-time high
Here’s why the Woolworths (ASX:WOW) share price is up 10% since May
This ASX telco grew 3 times faster than the Telstra (ASX:TLS) share price

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 recommended ADAIRS FPO. The Motley Fool Australia owns shares of and has recommended ADAIRS FPO, COLESGROUP DEF SET, and Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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
Trade The US Market With ZERO Brokerage* + FREE Access To Trading Ideas & Value Analysis Tools. Click Here!