There are a certain number of ASX dividend shares that have a relatively high yield.
These are businesses that have reasonably high dividend payout ratios and have plans to grow profit over the long-term, which may mean the leadership teams are able to increase the dividend in some years.
Here are three with higher expected yields:
Accent Group Ltd (ASX: AX1)
Accent is one of the largest shoe retailers in Australia with a large number of stores such as The Athlete’s Foot, PIVOT and The Trybe.
It has been increasing its margins, store count, efficiencies and online sales. Growth has accelerated during this period of COVID-19.
The FY21 interim result saw earnings before interest, tax, depreciation and amortisation (EBITDA) growth of 29%, earnings before interest and tax (EBIT) growth of 47.3% and net profit after tax (NPAT) growth of 57.3%.
This allowed the board to fund an interim dividend increase of 52.4% to 8 cents per share.
The business is expected to pay a dividend of 12.5 cents per share in FY21 according to Commsec, which would translate to a grossed-up dividend yield of 6.4%.
Nick Scali Limited (ASX: NCK)
Nick Scali is another retailer with a large dividend yield.
It imports quality furniture and sells it to customers looking to improve their homes.
Nick Scali is currently rated as a buy by Citi which has noted that sales continue to be stronger than expected with the order book continuing to see growth.
Indeed, the ASX dividend share recently said that total written sales order growth was 50% in the third quarter of FY21. April 2021 written order sales growth was 242%, cycling against widespread store closures in April 2020. It’s expecting net profit after tax growth in FY21 of between 85% to 90%.
Citi thinks Nick Scali will pay a FY21 dividend of $0.80 per share, translating to a grossed-up dividend yield of around 10%.
Nick Scali plans to offer more products, open more stores and expand its digital offering.
Centuria Industrial REIT (ASX: CIP)
Centuria Industrial is a real estate investment trust (REIT) that is the largest pure play on industrial property in Australia.
On 11 June 2021, it announced that its portfolio had increased to be worth over $3 billion across 66 high-quality industrial properties after an acquiring three properties with a blended initial yield of 5% and an average weighted average lease expiry (WALE) of 5.8 years.
The manager of Centuria Industrial explains that the REIT’s strategy is to secure high-quality industrial assets within key metropolitan locations. Mr Jesse Curtis says that the ASX dividend share has a strong track record of identifying value and providing value-add opportunities through repositioning and active leasing to deliver reliable income returns and capital growth to unitholders.
The broker Macquarie Group Ltd (ASX: MQG) rates the ASX dividend share as a buy, with the potential of further improvements in the valuations of the properties. Macquarie thinks Centuria Industrial will pay a distribution of 4.9% in FY22.