There are some ASX dividend shares that could be worth owning in July 2021.
These businesses could be ideas for income over the longer-term with the potential for shareholder returns.
Here are two to think about:
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Pacific Current Group Ltd (ASX: PAC)
Pacific Current is a business that invests globally into asset managers around the world. It helps them grow with capital and expertise.
It's currently rated as a buy by the broker Ord Minnett with a price target of $6.70. The broker believes the profitability from management fees will grow in the FY21 second half.
Ord Minnett is expecting Pacific Current to pay a grossed-up dividend yield of 8.6% on FY21 and 9.1% in FY22.
Some of the ASX dividend share's current investments include: GQG, ROC, Carlisle, Proterra, Victory Park and Astarte Capital Partners.
Pacific Current has been reporting total funds under management (FUM) controlled by boutique asset managers increased 8.9% during the quarter to 31 March 2021. Including the new investment in Astarte Capital Partners, total FUM grew 9.3%.
However, FUM growth doesn't directly translate into (the same) management fee or earnings growth because each economic relationship with a fund manager is different, as are the fees charged by the manager.
Pacific Current CEO Paul Greenwood said:
Whilst GQG continued to post large FUM gains, we were again encouraged by the breadth of growth across the portfolio. As we emerge from the pandemic it appears that many of our portfolio companies are very well positioned to grow, and as a result we expect continued capital raising success in 2021 and 2022.
Adairs Ltd (ASX: ADH)
Adairs is a retailer of home furnishings and furniture. It has a national store footprint as well as fast-growing online offering.
In FY22, Adairs is forecast to pay a grossed-up dividend yield of 8.4%.
Adairs is seeing that COVID-19 continues to encourage spending in home improvement and home decoration and the company expects that behaviour to continue whilst COVID-19 uncertainty continues.
In the second half, the ASX dividend share is expecting to open one or two net new stores and upsize three or four existing stores. Larger stores are more profitable with higher profit margins. A typical enlarged store delivers $250,000 to $350,000 more profit per year, representing an increase of around 60%.
Adairs is also investing in its new national distribution centre and digital initiatives. The new distribution centre is expected to save $3.5 million per annum in costs once fully operational.
In the first seven weeks of the second half of FY21, total sales were up 25% and Adairs online sales were up 65.9%.
Adairs says that its digital transformation and omni-channel leadership gives it a larger total addressable market, significant synergies across channels, and it gives customers a "superior and more flexible shopping experience."
To grow digitally, it's investing in acquiring customers, the customer experience, platform and its team. Total online sales are now 37% of total group sales.
