Pengana is one of three ASX shares with large dividend yields mentioned in this article.
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The three ASX shares in this article have larger-than-average dividend yields.
Dividends are not guaranteed, they are decided by boards of businesses and funded by profits.
These three ASX shares have high dividend yields as a result of a lower price/earnings ratio valuation and/or a higher dividend payout ratio:
Pengana Capital Group Ltd (ASX: PCG)
Pengana is a funds management business that operates a variety of strategies for investors including Australian shares, global shares, private equity and property.
In the six months to 31 December 2020, Pengana’s funds under management (FUM) increased by 15% to $3.586 billion. In the latest monthly update to 31 May 2021, FUM had increased further to $3.790 billion.
Pengana said that the FY21 half-year result saw “strong investment performance, with all strategies outperforming respective benchmarks for the period” and “significant improvement in net flows”.
The ASX share’s board decided to increase the interim dividend by 25% to 5 cents per share. That brought the trailing dividend to 9 cents per share.
At the current Pengana share price of $1.59, that means the trailing grossed-up dividend yield is 8.1%.
Nick Scali Limited (ASX: NCK)
Nick Scali is a large ASX-listed furniture business with showrooms across the country.
It says that its business model generates a leading retail industry operating cashflow margin, achieving average earnings before interest, tax, depreciation and amortisation (EBITDA) to cashflow conversion of over 100% in the past five years.
Nick Scali explains that its cashflow profile allows the company to maintain a high dividend payout ratio which has averaged 80% through time.
The ASX share expecting to grow its net profit after tax in FY21 by between 85% to 90%.
In the FY21 half-year result it grew its interim dividend by 60% to $0.40 per share. That brought the trailing 12-month grossed-up dividend yield to 8.3%.
360 Capital REIT (ASX: TOT)
This is a real estate investment trust (REIT) that looks to invest across an array of different property investment opportunities. Investments this financial year include PMG Funds, Peet Limited (ASX: PPC) and Irongate Group (ASX: IAP).
The business said its longer-term objective is owning direct assets and value-add opportunities on its balance sheet.
The 50% investment into PMG Group, a New Zealand diversified commercial real estate funds management business, is to provide the ASX share with an investment in a growing funds management platform with a long track record and diversification through exposure to the New Zealand real estate market. It provides earnings from fee income from funds management and underwriting activities.
The ASX share forecast a FY21 distribution of 6 cents per security, which currently translates into a distribution yield of 6.1%.
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Returns As of 15th February 2021
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.