Finding an ASX dividend share with a yield over 5% these days is a tough ask, let alone 9%. The (hopefully temporary) demise of ASX bank shares as hefty dividend payers, together with the coronavirus pandemic, has caused a dearth of dividends on the ASX.
2020 has seen a myriad of former dividend heavyweights slash their payouts, including Transurban Group (ASX: TCL), Sydney Airport Holdings Pty Ltd (ASX: SYD), and Ramsay Health Care Limited (ASX: RHC). The latter sadly broke a 20-year streak of annual dividend increases as well.
So, where to turn for hefty dividends in 2020?
Well, here are 2 ASX shares offering such a yield right now.
2 ASX dividend shares with yields over 9% today
Alumina Limited (ASX: AWC)
Alumina is Australia’s largest aluminium and alumina producer, and has amassed a reputation as a heavy-hitting dividend share in recent years. That’s despite its share price sliding more than 50% over the past 2 years or so.
Alumina’s last 2 dividends (paid in March and September this year) came in at 3.79 cents a share and 5.55 cents a share respectively. That would give Alumina a trailing dividend yield of 6.49% on current prices, or 9.29% grossed-up with Alumina’s full franking credits.
This is a volatile share to own, make no mistake. But I also think it could be extremely attractive for a long-term income play as well. If aluminium/alumina prices increase materially, you can expect a hefty share price appreciation in Alumina shares as a result, along with a potentially massive bump in dividend income (at least in my opinion). And with a starting yield today of more than 9%, it could be a great time to buy in.
WAM Research Limited (ASX: WAX)
WAM Research is another ASX divided share with a yield over 9% to consider today. This company is a Listed Investment Company (LIC), which means it acts more as a fund manager than a traditional company – buying and selling shares on behalf of its owners.
It does this very well, as the company’s performance over the past decade proves. Since 2010, WAM Research has returned an average of 15% per annum in growth and dividends (before fees and taxes).
Yes, dividends form the lion’s share of these returns. Over the past year, WMA Research has paid out 9.8 cents per share in dividends. That gives the LIC a trailing dividend of 6.9% on current prices. However, like Alumina, WAM Research’s dividends also come with full franking credits. That means it’s already-hefty dividend grosses-up to 9.86% with this franking included.
The company looks like it will be able to keep these payouts rolling out as well. As of 30 September, WAM Research has 34.9 cents per share in its profit reserve. That should be enough to cover its current dividend for at least 3 years.
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Returns As of 6th October 2020
Sebastian Bowen owns shares of Ramsay Health Care and WAM Research Limited. The Motley Fool Australia owns shares of Transurban. 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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