ASX dividend shares can be found across the market capitalisation spectrum. Lesser-known names can still be great options for passive income.
Investors have probably heard of names like BHP Group Ltd (ASX: BHP), Telstra Group Ltd (ASX: TLS) and Commonwealth Bank of Australia (ASX: CBA). They are popular dividend picks for some investors.
But, both a large business and a small one can pay a good dividend yield. So, let's look at these two names with high projected payouts.
Cromwell Property Group (ASX: CMW)
Cromwell describes itself as a real estate investor and fund manager with operations across three continents and a global investor base.
According to estimate data on Commsec, the business is projected to pay a distribution per security of 5.8 cents in both FY23 and FY24. This translates into a forward distribution yield of 8.2%.
While the ASX dividend share has been disrupted by rising interest rates, it has been working on simplifying the business by disposing of non-core assets and focusing on being a global capital-light real estate fund manager as a way to enhance long-term value for security holders.
For example, it recently sold a property in Wollongong for $53 million, a 3.9% premium to the book value after settlement adjustments.
It's going to reduce gearing and continue to "de-risk the business until volatility in the global equity and debt markets begins to ease and attractive opportunities for reinvestment present themselves."
Fletcher Building Limited (ASX: FBU)
This business has multiple segments. It manufactures building products, including insulation and cement. The ASX dividend share also builds homes, buildings and infrastructure.
The Fletcher Building share price has plunged around 30% over the past year. This has pushed up the prospective dividend yield for the business.
According to the estimates on Commsec, it could pay a dividend yield of 8.4% in FY23.
The company recently gave an update which said that in its products and distribution divisions, sales volumes are "broadly in line with expectations", slightly softer in the civil sector and robust in the residential finishing trades and the commercial sector.
Management believes that cost inflation is being managed effectively, and gross margins were slightly ahead of expectations.
Fletcher Building said that the Australian business is continuing to improve despite the first half of weather and transport challenges. It's expecting the earnings before interest and tax (EBIT) margin in Australia to be 5%.
In the ASX dividend share's residential and development division, house prices and margins are in line with expectations at around 10% below the peak in late 2021. House sales remain lower than planned.
Its FY23 EBIT target, excluding significant items, is at least $855 million. It said that the balance sheet continues to be in a strong position.
