There are some interesting ASX shares out there that currently offer relatively high dividend yields at the current prices.
Income might be harder to come by in the current environment with how low the official interests are right now. Just look at how low the Reserve Bank of Australia (RBA) rate is – it’s almost 0%.
But these two businesses could provide a useful income boost:
Charter Hall Long WALE REIT (ASX: CLW)
This real estate investment trust (REIT) is an ASX share that looks to provide investors with a distribution payout ratio of operating earnings of 100%. That has the effect of producing a higher yield (compared to if the payout ratio was lower).
It’s invested in a number of different commercial real estate sectors including long WALE retail, office, industrials and logistics, social infrastructure and agri-logistics. It has a property portfolio WALE of 13.8 years and an occupancy rate of 97.7%. The overall value of the portfolio is $5.3 billion with a weighted average rent review of 2.3%.
The ASX share recently announced that it has entered into agreements to acquire 50% interests in three modern, long WALE suburban office properties and one modern life sciences property.
Those acquisitions include the Services Australia building in Tuggeranong, ACT, for $153 million, the ATO building in Box Hill, Victoria, for $115 million, the Red Cross building in Alexandria, NSW, for $79.5 million and the ATO building in Albury, NSW, for $42.5 million. These acquisitions come with a WALE of 9.2 years and WARR of 3.6% per annum.
Charter Hall Long WALE REIT upgraded its operating earnings per share (EPS) guidance to 29.2 cents per security, which would be growth of 3.2% over FY20 and would equate to a distribution yield of 6%. Management expect FY22 operating EPS to grow by at least 2.75%.
It’s currently rated as a buy by the brokers at Citi.
Adairs Ltd (ASX: ADH)
Adairs is one of the largest retailers in the country of homewares and furnishings products.
The business is pursuing an array of different growth avenues. It’s looking to grow its online sales to customers by investing in its digital capabilities. This is producing results with Adairs FY21 half-year online sales increasing 95.2% and Mocka online sales rising 44.4% to $28 million. Total online sales were $90.2 million, representing 37.1% of group sales.
Adairs is also focused on margin improvement at all levels of the business. This is helping grow the bottom line significantly. HY21 saw sales rise 34.8%, the gross margin improved 500 basis points, underlying group earning before interest and tax (EBIT) rose 166.2% to $60.2 million and statutory net profit jumped 233.4%.
In the half-year, Adairs generated EPS of 25.9 cents. This allowed it to fund an interim dividend of 13 cents per share to shareholders.
Adairs is looking to open a new national distribution centre and open larger stores to grow margins and profit further.
At the current Adairs share price, it offers a projected grossed-up dividend yield of 7.9% for FY21, according to Commsec.