This high-yield ASX share could pay a dividend yield of almost 14% in FY25!

This stock could continue to be a fountain of cash.

| More on:
Young girl with green hair and big bow dancing with joy

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Dividend Investing

A young woman holding her phone smiles broadly and looks excited, after receiving good news.
Dividend Investing

Analysts say these high-yield ASX dividend stocks are buys

Big yields are expected from these dividend stocks. But how big?

Read more »

A happy construction worker or miner holds a fistfull of Australian money, indicating a dividends windfall
Dividend Investing

Everything you need to know about the Rio Tinto dividend

Shareholders are getting a big dividend.

Read more »

Hand of a woman carrying a bag of money, representing the concept of saving money or earning dividends.
Dividend Investing

Buy these ASX 200 dividend shares for a big income boost

Analysts are saying good things about these income options.

Read more »

A woman in hammock with headphones on enjoying life which symbolises passive income.
How to invest

3 ASX 100 and ASX 200 shares I'd buy now for a $1,820 passive income in 2024!

These three ASX dividend shares offer investors market beating passive income.

Read more »

Man holding out Australian dollar notes, symbolising dividends.
Technology Shares

WiseTech increases dividend for 15th time in a row. Here's what you need to know

WiseTech's latest dividend continues a remarkable trajectory.

Read more »

Man holding out Australian dollar notes, symbolising dividends.
Consumer Staples & Discretionary Shares

Everything you need to know about the Woolworths dividend

Woolworths will pay out its largest interim dividend in three years in 2024.

Read more »

Man with rocket wings which have flames coming out of them.
Earnings Results

4 All Ords ASX dividend shares going gangbusters on results

All Ords investors are sending these ASX dividend shares soaring on the back of their earnings results.

Read more »

Happy dad watching tv with kids, symbolising passive income.
Dividend Investing

How I built $5,000 of passive income starting with $0

My intake of dividends is continuing to grow.

Read more »