3 ASX shares with dividend yields above 10%

Here are 3 ASX shares with dividend yields above 10% including listed investment company (LIC) WAM Research Limited (ASX:WAX).

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There are a number of ASX shares offering big dividend yields above 10%. Some of them could be good choices for income, whereas others may be yield traps.

Just think about the ASX banks like National Australia Bank Ltd (ASX: NAB), Australia and New Zealand Banking Group (ASX: ANZ) and Westpac Banking Corp (ASX: WBC). All of them have been income disappointments recently.

The coronavirus has really boosted some dividend yields.

Here are three ASX shares with dividend yields above 10%

WAM Research Limited (ASX: WAX)

This is a listed investment company (LIC) which invests in promising small and medium ASX shares. It has been a top performer for shareholders since the GFC, growing its dividend every year in that time.

WAM Research likes to keep an attractive amount of cash on hand for protection and opportunities. At the end of March 2020 it was invested in a number of defensive businesses that could rebound like Bapcor Ltd (ASX: BAP), Brickworks Limited (ASX: BKW), TPG Telecom Ltd (ASX: TPM) and Breville Group Ltd (ASX: BRG).

It currently has an annualised grossed-up dividend yield of 11.8%.

Commonwealth Bank of Australia (ASX: CBA)

CBA was the only major bank not to announce an income cut for shareholders in FY19. That includes ANZ reducing the franking credit percentage.

Using the trailing dividends, it offers a grossed-up dividend yield of 10.3%.

I think CBA will likely be the major ASX bank share to cut its dividend by the smallest percentage because of its quality and reliable balance sheet.

But I do think that a dividend cut is coming, particularly because of directions by APRA and the Reserve Bank of New Zealand (RBNZ).

Naos Emerging Opportunities Company Ltd (ASX: NCC)

This is another LIC, it looks at ASX shares with market capitalisations under $250 million, which means it鈥檚 not competing with many other investors and there鈥檚 plenty of room for growth.

It has maintained its dividend for the last couple of years, but it hasn鈥檛 cut the dividend since it started paying a dividend several years ago. It currently offers a trailing grossed-up dividend yield of 13.4%.

As at 31 March 2020, the LIC still has the profit reserves to be able to keep paying dividends.聽

Some of its holdings include shares like BSA Limited (ASX: BSA) and Experience Co Ltd (ASX: EXP).

Foolish takeaway

I think a dividend cut is quite likely from CBA this year, so its yield could be a trap too. But both Naos and WAM Research could offer continued reliable dividends. Out of the two I鈥檇 go for Naos because it鈥檚 trading at a better price compared to its net tangible assets (NTA).

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*Returns as of January 12th 2022

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bapcor and Brickworks. The Motley Fool Australia owns shares of EXPERNCECO FPO. 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.

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