The dividend income beasts that I'm going to write about are projected to pay very large dividend yields in the coming years. Both ASX dividend shares have impressive growth records.
Dividends are not guaranteed. A company has some control over payments because they are decided by the board, but the amount of profit it makes is also a major influence.
Let's get into it.
Nick Scali Limited (ASX: NCK)
This is one of Australia's largest specialist furniture retailers – it operates both the Nick Scali and Plush businesses.
The ASX dividend share has grown its annual dividend payment every year since 2013, so it has demonstrated a decade of growing its payout for shareholders.
It's very likely that FY24 is not going to be as good as FY23 or FY22 after all of the interest rate rises – I'd imagine fewer households will be looking to buy furniture at the moment.
Commsec estimates currently suggest a 25% profit fall in FY24. But, I think that this period of economic weakness is a good time to look at a somewhat cyclical business like Nick Scali, with the share price down 32% from February 2023.
After the company and the economy emerge from this challenging period, I think the dividend income beast's earnings and payout will rebound.
Even so, Nick Scali is projected to pay an annual dividend per share of 52 cents in FY24. This is a grossed-up dividend yield of around 9%.
In the long-term, the business could grow through a store rollout, as well as increasing its online sales (which are typically very profitable).
Shaver Shop Group Ltd (ASX: SSG)
Shaver Shop describes itself as an Australian and New Zealand speciality retailer of male and female personal grooming products. It has more than 120 Shaver Shop stores and its own websites in those countries, and a presence on eBay, Amazon, TradeMe and MyDeal.
It's also expanding into other areas like oral care, hair care, massage, air treatment and beauty categories.
The company has pointed out that amid the rising cost of living, it offers budget-conscious DIY alternatives to going to a barber or hairdresser, with products that are "relevant for all demographics".
The dividend income beast has grown its dividend each year since it started paying one in 2017. Shaver Shop's half-year gross profit has grown each year between FY19 to FY23. In the first seven weeks of the second half, the ASX dividend share focused on profitable sales, and gross profit was up year over year.
Shaver Shop said it had an "intention to continue to increase the dividend provided it delivers the best returns for shareholders."
The company has no debt and believes it has significant potential to increase its market share and it can significantly increase its brand awareness in New Zealand.
According to Commsec, it's projected to pay an annual dividend per share of 10.3 cents in FY23 and 10.7 cents per share in FY24. This would translate into grossed-up dividend yields of 14.7% and 15.3% if those end up being the actual payments.
The dividend income alone from this ASX dividend share could deliver market-beating returns.
