The volatility on the ASX share market is picking up. I like investing at times like this because it means we can pick up ASX dividend shares at cheaper prices and get bigger dividend yields as well.
When a share price drops, the projected dividend yield increases. For example, if a business had a dividend yield of 5% and then the share price drops by 10%, the dividend yield would increase to 5.5%.
That's the sort of thing that is happening to plenty of ASX dividend shares this year. So I think it's worthwhile looking at some names that have been sold off heavily.
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Accent Group Ltd (ASX: AX1)
Accent is one of the largest shoe retailers in Australia. It owns a number of its own businesses and brands, while also being the distributor for others.
Some of the names in the portfolio that it sells include CAT, Dr Martens, Glue Store, Hoka, Hype, Kappa, Merrell, Nude Lucy, Pivot, Skechers, Vans, The Athlete's Foot and Stylerunner.
Everyone needs shoes. So I think this business might be a little more resilient than some investors are thinking, considering the Accent share price has fallen by over 40% this year.
According to CMC Markets, Accent could pay an annual dividend of 9.4 cents per share. This would translate into a grossed-up dividend yield of 9.7%.
Accent is planning to grow its profit in a number of ways. This includes opening more stores, growing online sales, being more efficient and benefitting from operating leverage.
At the current Accent share price, it is valued at 12x FY23's estimated earnings according to CMC Markets.
JB Hi-Fi Limited (ASX: JBH)
JB Hi-Fi is one of the largest retailers in Australia. It has three businesses – JB Hi-Fi Australia, JB Hi-Fi New Zealand, and The Good Guys.
The business has done well during the COVID-19 period. But I think it can continue to do quite well as conditions normalise because people will continue buying things like phones, computers and appliances. They may all be seen as essentials these days.
FY22 saw total sales rise by 3.5% to $9.2 billion and net profit after tax (NPAT) increase 7.7% to $545 million. In July 2022, JB Hi-Fi Australia sales increased 9.7% and The Good Guys sales went up 7.8%.
According to CMC Markets, JB Hi-Fi is projected to pay an annual dividend per share of $2.45. This translates into a forward grossed-up dividend yield of 8.5%. It's valued at 11x FY23's estimated earnings according to CMC Markets.
