Key points
- JB Hi-Fi and Pacific Current are two ASX dividend shares expected to pay big yields in FY22
- JB Hi-Fi continues to see strong customer demand for its products, supporting profit
- Investment manager Pacific Current is seeing net inflows. It's also adding to its portfolio
There are some ASX dividend shares in Australia that offer both a high yield and have been consistent with their payouts.
Plenty of the ASX's blue chips have cut their dividends in recent years, including Australia and New Zealand Banking Group Ltd (ASX: ANZ), Sydney Airport (ASX: SYD), and Transurban Group (ASX: TCL).
Dividends are certainly not guaranteed. But the below two options have been growing the dividend and could pay a high yield in FY22:
JB Hi-Fi Limited (ASX: JBH)
JB Hi-Fi is one of the biggest retailers in Australia (and New Zealand) with its JB Hi-Fi and The Good Guys businesses.
The retailer is currently rated as a buy by the broker Morgans, with a price target of $54.
JB Hi-Fi recently gave its second quarter sales update which showed that JB Hi-Fi Australia sales were up 1.9% year on year, New Zealand sales were down 3.4%, and The Good Guys sales went up 3.4%.
The ASX dividend share noted that sales momentum was strong throughout the first half of FY22, with continued heightened customer demand for both consumer electronics and home appliance products. Total half-year sales were down 1.6% year on year, but up 21.7% over a two-year period.
JB Hi-Fi noted that net profit is expected to be a bit lower in HY22, with net profit after tax showing a 9.4% drop to $287.9 million. However, net profit was still 68.8% higher over a two-year period thanks to the management of gross profit margins and "disciplined cost control".
Morgans is expecting JB Hi-Fi to pay a FY22 annual dividend per share of $2.17. This translates to a grossed-up dividend yield of 6.2%.
Pacific Current Group Ltd (ASX: PAC)
Pacific describes itself as a multi-boutique asset management outfit that applies its strategic resources, including capital, institutional distribution capabilities, and operational expertise to help its investment partners excel.
At the end of September 2021, Pacific's total funds under management (FUM) controlled by the boutique asset managers it's invested in was $150.1 billion, an increase of 5.5%. Strong inflows at Victory Park, Roc, EAM and GQG Partners Inc (ASX: GQG) helped FUM grow.
Management was pleased with the breadth of that growth and expects it to continue "well into 2022".
The ASX dividend share continues to expand its portfolio. A couple of weeks ago, it bought a 35% stake in Banner Oak Capital Partners, a private equity real estate business that had $5.7 billion of assets on its platform. The initial investment is US$35 million. Pacific will receive 35% of the management company's earnings.
The Oak Capital Partners contribution is expected to add approximately 25% of Pacific Current's FY21 underlying net profit before tax.
It's currently rated as a buy by the broker Ord Minnett, with a price target of $10.30 – that's 40% higher than where it is right now.
Ord Minnett thinks Pacific is going to pay a grossed-up dividend yield of 7.4% in FY22 and 8.3% in FY23.
