Just to be clear from the outset, most of us know that the ASX banks like Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corp (ASX: WBC) have massive dividend yields. As do other ASX blue chips like Wesfarmers Ltd (ASX: WES) and BHP Group Ltd (ASX: BHP).
So today, we’re going to look at two ASX dividend stocks that you might be surprised to learn have yields higher than 5%.
Rural Funds Group (ASX: RFF)
Rural Funds has recently been the victim of a concerted attack from a short seller, who made a number of ‘cooking the books’ allegations against this company. But I think that the EY report that RFF commissioned has cleared the air somewhat for this agricultural property manager and its portfolio of cotton, almond, cattle and vineyard assets represents a strong income opportunity.
Rural Funds specialises in leasing farmland to large clients such as Treasury Wine Estates Ltd (ASX: TWE), utilising long-term lease agreements with inflation-linked rises built in. As such, Rural Funds is able to offer a forward yield of 5.3% on current prices. Food and agriculture is one of the soundest investments you can make, so I think this company is a great long-term income stock to own.
JB Hi-Fi Ltd (ASX: JBH)
JB Hi-Fi has spent most of the year being one of the most heavily shorted stocks on the ASX, possibly due to the perception that this company was about to get steamrolled by online shopping. But JB has proven its critics wrong big time, and its shares have recently reached a new all-time high. Even so, JBH shares are still offering a grossed-up starting yield of 5.97% on today’s prices, which is a pretty nice way of starting out an investment.
Although JB’s core business of DVDs, CDs and Hi-Fi is not a great growth engine, the company expanded into white goods, TVs, computers and all things Apple years ago. This gives me confidence that JB is able to thrive in an online world (after all, who buys a fridge on Amazon?) and is a great buy for income today.
Both of these companies might not be names that roll off the tongue when discussing good dividend shares, but as you can see, both JB Hi-Fi and Rural Funds are offering yields of more than 5%. Both of these companies would make great additions to a blue-chip dominated dividend portfolio.
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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED, Treasury Wine Estates Limited, and Wesfarmers Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.