The Motley Fool

2 ASX dividend shares with yields over 9%

With the Reserve Bank of Australia (RBA) this year slashing interest rates to all-time low of 0.75%, finding quality ASX dividend shares has rarely been more important for a portfolio. After all, it’s pretty hard finding another asset class that can give you an inflation-beating yield on capital these days outside the property market (and we all know how expensive that is right now).

So with that in mind, here are 2 ASX shares that offer not just inflation-beating returns, but dividend yields north of 9% – that’s nearly 9 times what you can expect from a term deposit in our current market!

Westpac Banking Corp (ASX: WBC)

Yes, Westpac isn’t anyone’s favourite investment right now. The allegations that surfaced recently are truly appalling and there’s not much doubt that this bank is facing a monster fine in the not too distant future. Still, with the bank’s recent cut to its shareholder payouts, its dividend looks a little more sustainable at $1.60 per share (on an annualised basis).

Whilst that’s not good news for existing Westpac shareholders, it means that on today’s prices WBC shares are offering a starting yield of 6.58%, or 9.4% grossed-up with Westpac’s full franking. Even if there’s additional cuts to the Westpac dividend going forward, the yield on cost for any Westpac shares bought at today’s prices would (in my opinion) still be substantial. Thus, I think there is a buying opportunity for WBC shares today.

WAM Capital Ltd (ASX: WAM)

WAM Capital is a listed investment company (LIC) specialising in undervalued ASX growth shares in the small- to mid-cap space. I like WAM Capital for its long history of outperformance (WAM shares have returned 16.8% per annum since 1999), which includes a market-leading dividend yield.

Since WAM Capital buys under-priced companies and sells them when a catalyst is realised, it is able to accumulate a profit reserve used to pay its large dividends. This year alone, WAM Capital has returned 15.5 cents per share to its owners, which translates int a 6.92% yield or 9.89% grossed-up. For this reason, I think WAM shares are a great choice for any income-focused investor today.

Foolish takeaway

With these 2 ASX dividend shares, you are being offered grossed-up yields of over 9% on today’s prices, which is hard to ignore in today’s low rate world. If the RBA cuts interest rates further next year, I would be very happy holding these companies in my portfolio!

For some more top dividend shares to check out today, here's our Top 3 Dividend Shares To Buy For 2020

When Edward Vesely -- our resident dividend expert -- has a stock tip, it can pay to listen. With huge winners like Dicker Data (up 147%) and Collins Food (up 105%) under his belt, Edward is building an enviable following amongst investors that are planning for retirement.

In a brand new report, Edward has just revealed what he believes are the 3 best dividend stocks for income-hungry investors to buy now. All 3 stocks are paying growing fully franked dividends giving you the opportunity to combine capital appreciation with attractive dividend yields.

Best of all, Edward’s “Top 3 Dividend Shares To Buy For 2020” report is totally free to all Motley Fool readers.

Click here now to access this free report.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

FREE REPORT: Five Cheap and Good Stocks to Buy now…

Our Motley Fool experts have FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.7% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.