3 ASX shares with dividend yields above 10%

In difficult investing environments and all time low interest rates, high yield dividend shares can be the answer to generate income.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

In difficult investing environments, high yield dividend shares can be the answer to generate income.

With the interest rates at all time lows, its highly unlikely that decent cash flow can be made from bank investments alone.

Not to mention the fact that the S&P/ASX 200 Index (ASX: XJO) has been rocky lately as it recovers from the coronavirus pandemic.

There's still a lot of uncertainty all round. A good alternative or even just an addition to your current investments could be some high yield dividend shares.

With this in mind, I have found 3 ASX shares that are currently providing dividend yields above 10%. Let's take a look.

Fortescue Metals Group Limited (ASX: FMG)

Fortescue is a global leader in the iron ore industry. The company has been widely recognised for its culture, innovation and development of infrastructure in the mining industry. It's based in Western Australia within the Pilbara region. 

Currently, Fortescue is producing a 12.57% yield for shareholders, making it well and truly a high yield dividend share. The industry average is around 5.2%, so Fortescue outperforms most of its peers. 

Historically speaking, the company has generally increased its dividend yield over time. 

Fortescue has ranged from around 1.5% yield in 2011 right through to 12.57% in 2020, its highest yet. 

The company also offers a dividend reinvestment plan (DRP) to all shareholders with an Australian or New Zealand address.

G8 Education Ltd (ASX: GEM)

G8 is a leading provider of care and education services in Australia. The company states that it helps to shape the minds and lives of tens of thousands of children every day.

It provides childcare services through four core brands:

  • Pelicans Learning for Life
  • Jellybeans Child Care & Kindy
  • Greenwood Early Education Centres
  • The Learning Sanctuary

G8 Education currently offers a 10.97% dividend yield – almost double the industry average of 5.6%.

Similar to Fortescue, G8 has steadily increased its dividend over time. Additionally, it has also produced a dividend for more than 10 years. Again, stability and growth are key.

Navigator Global Investments Ltd (ASX: NGI)

Navigator is the parent of alternative investment manager Lighthouse Investment Partners LLC, known as 'Lighthouse'.

Lighthouse is based in the United States, but it manages hedge fund solutions globally for a variety of different customers.

As of 2020, Lighthouse has an impressive US$11.77 billion AUM (assets under management). It has been operating for more than 20 years and has over more than staff.

Navigator has a policy of paying a dividend of between 70% and 80% of earnings before interest, taxes, depreciation and amortisation (EBITDA) 

The company currently offers a dividend yield of 13.26% against an industry average of just 3.7%. Navigator well and truly outperforms most of its peers in this category.

As with the other companies here, Navigator has offered a dividend for almost 10 years and has steadily increased the yield. All good things for investors.

Foolish takeaway

When looking for dividend shares, it's not only the yield that matters.

History, stability and growth matter as well. It's one thing to pay a big dividend, it's another thing to maintain and grow. You can find shares on the ASX with extremely high dividend yields, but the year before they produced nothing. This is a red flag.

The key is finding the trifecta of high yield, stability and growth. That's what we have here.

Motley Fool contributor glennleese 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.

More on ⏸️ Dividend Shares

falling healthcare asx share price Mesoblast capital raising
⏸️ Dividend Shares

Sonic Healthcare (ASX:SHL) dividend rises 7%, share price falls after FY21 results

Triple digit profit growth and a solid dividend was not enough to impress investors on Monday.

Read more »

A smiling woman with a handful of $100 notes, indicating strong dividend payments
⏸️ Dividend Shares

The Adairs (ASX:ADH) dividend more than doubled in FY21

A record financial result will see a generous dividend paid out to Adairs shareholders.

Read more »

A businessman on a road raises his arms as dollar notes rain down on him.
⏸️ Dividend Shares

The Newcrest (ASX:NCM) dividend boosted 129%

Newcrest marks its sixth successive year of increasing dividend payments to shareholders

Read more »

Happy couple laughing while shopping in supermarket
52-Week Highs

August has been a great month so far for the Woolworths (ASX:WOW) share price

We take a look at how shares in the supermarket giant have been performing ahead of the company's full-year results

Read more »

wine glass full of coins
⏸️ Dividend Shares

The Treasury Wines (ASX:TWE) dividend bumped up by 60%

Here's how Treasury Wines dividends for FY21 have stacked up.

Read more »

Young boy cries and covers eyes with torn money on table
⏸️ Dividend Shares

The Origin (ASX:ORG) dividend has dropped 20%

What's happened to Origin's dividends?

Read more »

two people hold a sheet above their head while making a bed in a room featuring homewares.
Retail Shares

How did the Adairs (ASX:ADH) share price respond last earnings season?

The homewares retailer will be looking for another year like last year when it releases its FY21 earnings tomorrow.

Read more »

Two men excited to win online bet
Share Market News

Why the Tabcorp (ASX:TAH) dividend was boosted by 32%

The strong performance of Tabcorp's business will see a combined FY21 dividend of 14.5 cents.

Read more »