ASX dividend shares with large dividend yields could be really useful for investors looking for passive income.
Dividend payments aren't guaranteed, but a company with a high dividend payout ratio and low valuation can deliver a large yield for investors.
Let's see if the two high-yielders below might be worth considering.
Charter Hall Retail REIT (ASX: CQR)
This real estate investment trust (REIT) is a leading owner of property leased primarily to convenience retailers.
Some of the main tenants (by rental income) that together make up more than half of the ASX dividend share's overall rental income include:
- Woolworths Group Ltd (ASX: WOW), 14.4%
- Coles Group Ltd (ASX: COL), 12.8%
- BP, 12.7%
- Wesfarmers Ltd (ASX: WES) (Kmart, Bunnings, Target, Officeworks etc), 7.5%
- Ampol Ltd (ASX: ALD), 4.7%
- Endeavour Group Ltd (ASX: EDV), 2%
- Aldi, 1.8%
- Reject Shop Ltd (ASX: TRS), 1.6%
Investors may worry about the difficulties physical retailers are facing, but the ASX dividend share has strong tenancy metrics. The FY24 first-half result showed a shopping centre occupancy rate of 98.7% (up from 98.6%) and a portfolio-weighted average lease expiry (WALE) of 7.1 years.
E-commerce may be more popular now than it used to be, but shopping centres are still well-patronised.
This level of tenancy enables the business to earn good rental income and pay a good distribution. The distribution payout ratio range for FY24 is expected to be between 90% to 95%.
In FY25, Charter Hall Retail REIT is predicted to pay a distribution of 26 cents per unit, which translates into a forward distribution yield of 7.7%.
Autosports Group Ltd (ASX: ASG)
Autosports operates one of Australia's largest networks of luxury and prestige car dealerships, including BMW, Audi, Volva, Bentley, Mercedes, Lamborghini, Maserati, Aston Martin, McLaren and Rolls Royce.
It has 54 new car dealerships, three used car outlets, four motorcycle dealerships, and eight specialist prestige vehicle collision repair facilities. In FY23, it sold around 21,000 new cars and 16,000 used cars.
The ASX dividend share saw good numbers in the FY24 first-half result. Revenue rose by 26% to $1.34 billion, earnings before interest, tax, depreciation and amortisation (EBITDA) grew 20.1% to $107.8 million, and the company hiked the interim dividend by 11% to 10 cents per share.
According to management, there is resilient demand for luxury cars, while service and parts should continue "above trend" revenue growth on improved vehicle deliveries.
The business is also open to making more acquisitions to boost its scale.
Commsec predicts Autosports will pay a grossed-up dividend yield of 10.1% in FY25.
