ASX investors: 2 high-yield heavyweights I think are worth a sizeable investment

These two stocks are expected to pay big yields.

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ASX investors looking for big dividend yields may like to consider two high-yield stocks I'm about to discuss.

Investors can gain exposure to many different industries on the ASX, including shares in the mining, banking and retail sectors.

I encourage investors to think about ASX property shares, specifically real estate investment trusts (REITs). Commercial property is an appealing sector, in my opinion.

Higher interest rates have pushed down share prices, meaning investors are able to get a higher distribution yield. And I think investors are being compensated for the possibility of the REITs' stated balance sheet asset prices falling from here.

In my eyes, they are high-yield stocks worth looking at.

Charter Hall Long WALE REIT (ASX: CLW)

This business is an Australian REIT. It invests in "high-quality Australasian real estate assets that are predominately leased to corporate and government tenants on long-term leases".

There are a variety of industrial and logistics properties, social infrastructure, pubs and bottle shops, telecommunication exchanges, service stations, food manufacturing, waste and recycling, and so on.

The REIT's major appeal is the incredibly long rental contracts it has signed with blue-chip tenants. The weighted average lease expiry (WALE) at September 2023 was 11 years, with an occupancy rate of 99.9%. Some of the rental increases are linked to inflation, and there are fixed increases for other contracts.

Its main tenants include government entities, Endeavour Group Ltd (ASX: EDV), Telstra Group Ltd (ASX: TLS), BP, Inghams Group Ltd (ASX: ING), Coles Group Ltd (ASX: COL) and Metcash Ltd (ASX: MTS).

I'm sure ASX investors want to know what the distribution yield might be from the high-yield stock. The business has guided the FY24 distribution will be 26 cents per security. This equates to a forward yield of 7.2% at the current Charter Hall Long WALE REIT share price.

Rural Funds Group (ASX: RFF)

Rural Funds is another REIT that owns a portfolio of farmland across Australia. It's invested in cattle, vineyards, almonds, macadamias and 'cropping'.

The business is seeing rental increases, with some contracts benefiting from rises linked to inflation, while other increases have fixed annual increases.

Many of its tenants are large businesses, such as Olam Group, JBS, Select Harvests Limited  (ASX: SHV), Treasury Wine Estates Ltd (ASX: TWE) and Australian Agricultural Company Ltd (ASX: AAC).  

It also owns a large portfolio of water entitlements, which give tenants access to water to use. This can provide Rural Funds with another way for its value to grow in the long term.

At the end of FY23, it had a WALE of 13.9 years. The business is investing in productivity improvement and conversion to higher and better-use opportunities.

The high-yield stock is expected to pay a distribution of 11.73 cents per unit in FY24, which translates into a distribution yield of 5.8%.

Motley Fool contributor Tristan Harrison has positions in Rural Funds Group. 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 positions in and has recommended Coles Group, Rural Funds Group, and Telstra Group. The Motley Fool Australia has recommended Metcash and Treasury Wine Estates. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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