I think these 2 high-yield ASX dividend shares are buys in June

Both of these ASX dividend shares have high expected dividend yields.

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Key points

  • I think that both of these ASX dividend shares are going to pay big dividends in FY23
  • Best & Less is a compelling retailer with a low valuation
  • South32 is benefiting from strong commodity prices

I think there are some attractive ASX dividend shares that may be on track to pay high levels of shareholder payouts.

Businesses that have low price-to-earnings (P/E) ratios and also have relatively high payout ratios can translate into high dividend yields. This can really boost investment income for investors.

High dividend yields aren’t everything though. I also want to look for businesses where the earnings look compelling as well. Otherwise, a dividend yield can turn into a dividend trap. If a dividend is cut then the yield is obviously not as attractive anymore.

With that in mind, I think these are two ASX dividend shares with good-looking dividends.

Best & Less Group Holdings Ltd (ASX: BST)

Best & Less is an ASX retail share that has a national network of stores. Its main target customers are mums and families.

I think Best & Less has a promising future. The company is looking to grow in a number of different ways including growing its market share of the baby and kids market. It also wants to improve its apparel offering for women, increase its digital capabilities, and expand the store network.

It’s looking to both upsize existing locations as well as add between 15 and 25 net new stores over the next three years.

In my opinion, this ASX dividend share could see more customers attracted to its value offering if family budgets are getting tighter due to inflation. It recently updated the market to say that it was seeing sales growth in the fourth quarter of FY22.

How big could the dividend be? The broker Macquare has estimated a dividend which equates to a grossed-up dividend yield of 16%. Even if the yield is only 10%, that’s still a very good-looking yield in my opinion.

South32 Ltd (ASX: S32)

South32 is one of the larger ASX mining shares with a market capitalisation of almost $22 billion.

It produces a number of commodities including bauxite, alumina, aluminium, copper, silver, lead, zinc, nickel, metallurgical coal, and manganese.

Commodity prices are very hard to predict. However, an inflationary environment can be helpful for resource shares in my opinion.

This ASX dividend share is making good profit and cash flow right now, which is helping lift dividend payouts.

In the recent FY22 half-year result it increased its ordinary dividend by 521% to 8.7 US cents per share.

With the diversification and strength of South32’s commodities, I think its dividends can continue to be attractive in the medium-term.

The broker Macquarie thinks that South32 could pay a grossed-up dividend yield of 12.2% in FY23.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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