Investors can find high levels of dividend income from many different All Ordinaries (ASX: XAO) shares, not just the major ASX bank shares and ASX mining shares.
A high dividend yield can be achieved by a combination of a relatively low price/earnings (P/E) ratio and a relatively high dividend payout ratio.
But, investors shouldn't just chase a dividend yield for the sake of it. I believe there needs to be a reasonable belief that earnings can grow over the longer term.
With the two ASX All Ords retail shares I'm about to outline, FY23 may see a decline, but the FY24 forecast and beyond looks promising. I think the fall in share price accounts for that weaker short-term outlook.
Baby Bunting Group Ltd (ASX: BBN)
Baby Bunting is a leading retailer of baby and toddler products in Australia and New Zealand. But, the Baby Bunting share price is down over 40% in the past year, making it look much cheaper.
Looking at the estimates on Commsec, the Baby Bunting share price is valued at 13 times FY24's estimated earnings with a potential grossed-up dividend yield of around 8%.
FY23 has not started how the business would have liked, with the first quarter gross profit margin down 230 basis points year over year, and underlying net profit being $3 million less than the year before.
But, in the long-term, the ASX All Ords share is planning to open more stores in Australia and New Zealand, expanding its range, operating a marketplace on its website and growing its private label and exclusive product sales.
JB Hi-Fi Limited (ASX: JBH)
JB Hi-Fi is one of Australia's leading retailers with three businesses – JB Hi-Fi Australia, JB Hi-Fi New Zealand and The Good Guys.
Since 30 March 2022, the JB Hi-Fi share price has fallen around 17%.
Using the estimates on Commsec, it's valued at 14 times FY24's estimated earnings with a grossed-up dividend yield of 7%.
The company has started FY23 promisingly. In the first quarter of FY23, JB Hi-Fi Australia's sales growth was 14.6% and The Good Guys' sales growth was 12.3%.
With how integral technology is in people's lives these days, I think the All Ords ASX share's earnings are more defensive than some investors may be giving it credit.
Management believes that the company has four competitive advantages – scale, a low-cost operating model, multichannel capabilities, and people and culture.
Pacific Current Group Ltd (ASX: PAC)
This is an investment business that takes stakes in fund management businesses and helps them grow. Some of its investments include Victory Park, Astarte Capital Partners, GQG Partners Inc (ASX: GQG) and ROC Partners.
According to the estimates on Commsec, Pacific Current is valued at 11 times FY24's estimated earnings, with a possible grossed-up dividend yield of 8.6%.
The All Ords ASX share's current boutique investment managers continue to see new allocations. Pacific Current "expects to make multiple investments, including larger higher-yielding investments as well as earlier stage opportunities."
While falling asset valuations have been a headwind, I think this will turn around at some point to be a tailwind when asset prices stop falling and regain momentum.
