Shaver Shop Group Ltd (ASX: SSG) is projected to pay a grossed-up dividend yield of 14%. That's a high-yield ASX share, and it could be very rewarding.
This ASX retail share has a store count of more than 120 across Australia and New Zealand. It aims to sell a "wide range of quality brands, at competitive prices, supported by excellent staff product knowledge". And it aims to "negotiate exclusive products with suppliers".
While its core product range comprises electric shavers, clippers and trimmers, and wet shave items, Shaver Shop also sells oral and hair care, massage, air treatment and beauty categories.
How big is the Shaver Shop dividend going to be?
Firstly, a reminder that dividend payments are not guaranteed, unlike interest paid by a bank term deposit.
Second, the company board declares a dividend influenced by how much profit/cash flow a business is making.
I think Shaver Shop has demonstrated an impressive dividend track record. It has increased its dividend every year since 2017, when it first started paying one.
In FY23, the high-yield ASX dividend share increased its dividend by 2% to 10.2 cents per share. This currently translates into a grossed-up dividend yield of 14.3%.
The current forecast on Commsec is that Shaver Shop will pay a reduced dividend per share of 9.7 cents in FY25. That would be a grossed-up dividend yield of 13.7%.
How could the company's earnings perform?
Shaver Shop recently announced its total sales were down 5.3% in the first four months of FY24. But compared to pre-pandemic trading in FY20, total sales were up 23.8%. It also said its gross profit margin was "broadly consistent" with the prior comparative period.
In the short term, the company is investing more in refitting and relocating stores where it thinks there are attractive commercial returns.
It said while the current retail environment was "uncertain", Shaver Shop remained "extremely well-positioned with a unique, value and service-oriented offering" for its customers.
In terms of the price/earnings (P/E) ratio, the high-yield ASX share is projected to generate 12 cents of earnings per share (EPS). This would represent a fall in profit. But it'd still be a single-digit P/E ratio of under 9, which could be very cheap.
