Motley Fool Australia

3 little-known ASX dividend shares offering big income

man handing over wad of cash representing ASX retail capital return
Image source: Getty Images

There are some little-known ASX dividend shares that offer investors big income yields.

Here are some of those businesses:

Pacific Current Group Ltd (ASX: PAC)

According to the ASX, Pacific Current has a market capitalisation of $321 million.

Pacific Current is an ASX dividend share that invests in fund managers from around the world. Some examples include GQG, its biggest investment, as well as the most recent investment called Astarte Capital Partners.

The company has been building on its growth from FY20 when underlying earnings per share (EPS) went up 18% to 51 cents and funds under management (FUM) grew 62% to $93 billion.

In the quarter ending 30 September 2020, Pacific Current’s funds under management (FUM) rose another 14% to $106.4 billion, largely driven by the continuing strong performance of fund manager GQG.

In FY20 Pacific Current grew its dividend by 40% to $0.35 per share.

Dean Fremder of Perpetual Limited (ASX: PPT) said when Pacific Current shares were a bit lower: “The stock’s really cheap. It is on nine times earnings. It’s growing earnings at double digits, so more than 10% a year. It’s paying a 6.5% fully franked yield. And most excitingly, we think they can pay out a much larger portion of their earnings as dividends. We see no reason, given the surplus franking credits they have on the balance sheet, they can’t be paying a 10 or 11% fully franked yield in the next 12 months. So, really excited about that one.”

Adairs Ltd (ASX: ADH)

Adairs is one of the country’s largest home furnishings and home decoration products. It operates both the Adairs and Mocka businesses. According to the ASX, Adairs has a market capitalisation of $654 million.

Last month Adairs gave a trading update for the first 23 weeks of FY21 as well as providing guidance for sales and earnings before interest and tax (EBIT) for the half-year result.

The ASX dividend share said that total sales for the 23 weeks were up 23.4%, with Adairs online sales going up 99.7%. Mocka sales were up 45.1%. Online sales represented 39% of total sales, compared to 20% for the same period last year.

In the first half of FY21, Adairs is expecting total sales to be in a range of $235 million to $245 million, up from $179 million in the prior corresponding period.

Adairs currently has a trailing grossed-up dividend yield of 4.2%.

Nick Scali Limited (ASX: NCK)

Nick Scali is another business in the home and furniture space that is seeing elevated demand during these strange times. According to the ASX, Nick Scali has a market capitalisation of $865 million.

In the first half of FY21, Nick Scali is expecting net profit after tax (NPAT) to be $40.5 million, which would be an increase of around 100%, despite COVID-19. Total written sales orders grew by 45% in the first quarter of FY21 and grew 58% in the second quarter.

Nick Scali increased its FY20 final dividend by 12.5% because of the sales orders in the first half of FY21. That brought the Nick Scali full year dividend to 47.5 cents per share.

The ASX dividend share’s sales order book was at an all-time high at 31 December 2020 and this is expected to translate to material revenue and profit growth in the second half of FY21.

At the current Nick Scali share price it has a trailing grossed-up dividend yield of 6.5%.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of February 15th 2021

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. recommends ADAIRS FPO. The Motley Fool Australia has recommended ADAIRS FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Related Articles…

Latest posts by Tristan Harrison (see all)