There were some small ASX shares that released their results at the end of reporting season, revealing some big upcoming dividend payments.
Businesses that are small are sometimes priced at a lower earnings multiple than if they were large, despite being earlier on in their growth journey. A lower earnings multiple/share price boosts the dividend yield for investors.
Here are two small ASX shares that just reported big dividends:
360 Capital REIT (ASX: TOT)
This business is a real estate investment trust (REIT) that’s operated by 360 Capital Group Ltd (ASX: TGP). 360 Capital REIT just reported its FY21 half-year result.
It was previously generating earnings by making real estate loans, but all direct real estate loans ($42.4 million) have now repaid as a result of active management.
360 Capital REIT revealed that it has sold a further six apartments in Gladesville, 19 of 23 apartments have now been sold at an average premium of 21.3% to the purchase price.
The small ASX dividend share has made a number of equity investments into real estate related assets including Peet Limited (ASX: PEET), Irongate Group (ASX: IAP) and PMG in New Zealand. The PMG investment may find New Zealand investments that can be pursued.
As a result of COVID-19, the REIT ceased its lending activities and shifted management’s focus to converting outstanding loan positions and assets to cash. Management decided to be conservative with the cash to preserve capital, which impacted earnings.
It said that its operating earnings per share (EPS) was down 76% to 1.1 cents.
After the end of the reporting period, the majority of the business’ available capital had been deployed into investments that provide recurring income in line with 360 Capital REIT’s strategy and objectives.
The small ASX dividend share has forecast a FY21 distribution guidance of 6 cents per security, which translates to a yield of 6.9% at the current 360 Capital REIT share price.
Pengana Capital Group Ltd (ASX: PCG)
Pengana is a fund manager that just reported its funds under management (FUM) increased by 15% in the six months to 31 December 2020.
It reported that underlying profit before tax grew 17.1% to $9.2 million and normalised EPS grew 13% to 5.96 cents per share.
The small ASX dividend share said that there was a significant improvement in net flows. Pengana also said that there was also strong investment performance, with all strategies outperforming their respective benchmarks for the period.
As part of the result release, management said that it still has significant further capacity in its various international equity strategies and a major growth opportunity in the Pengana Private Equity Trust (ASX: PE1). It also said it has an opportunity to diversify further over time by adding new strategies.
In terms of the dividend, the board of Pengana decided to declare a fully franked interim dividend of 5 cents per share, which was an increase of 25%.
At the current Pengana share price, that means that the grossed-up dividend yield is now 6.8%.
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Returns As of 15th February 2021
Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.