2 ASX dividend shares that could create $1,000 in passive income in 2024

Passive income is flowing strongly.

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The two ASX dividend shares I'm going to tell you about pay high levels of passive income. Due to their rewarding dividend yields, they could produce $1,000 of passive income, or more, over the next year.

When businesses have a relatively low price/earnings (P/E) ratio, where they trade at a low multiple of their earnings, they are more likely to have a good dividend yield.

ASX retail shares usually trade on a lower earnings multiple than some sectors like ASX tech shares or ASX industrial shares. Below are two ASX dividend shares that have a commendable history of dividend payments.

Shaver Shop Group Ltd (ASX: SSG)

As the name suggests, Shaver Shop is a retailer that specialises in male and female personal grooming products, including electric shavers, clippers, trimmers, and wet shave items. It has 123 Shaver Shop stores across Australia and New Zealand. The company also offers oral care, hair care, massage, air treatment, and beauty products.

Impressively, the ASX dividend share has grown its annual payout every financial year since it started paying a dividend in 2017, though that streak is not guaranteed to continue. Using the last two declared dividends, it has a trailing grossed-up dividend yield of 13%.

In the trading update for 1 January 2024 to 22 February 2024, it revealed total sales were up 0.9%, which is beneficial for the profit generation and supporting the dividend.

In a drive to boost in-store and online operational efficiency, as well as improve the customer experience, it has invested in a new software platform, which was planned for the second half of FY24.

There are multiple ways the business can raise profit in the future, including growing its store network, increasing online sales, expanding its range of products and capturing market share. A rising Australian population is another helpful tailwind for the company.

Nick Scali Limited (ASX: NCK)

Nick Scali is a leading furniture retailer through its Nick Scali and Plush brands.

I think this ASX dividend share is a well-run business, with management focused on moves that will generate good profit growth for investors.

The passive income stock grew its annual payout every year between FY13 to FY23, which is an excellent record considering furniture retailing isn't what I'd call an ultra-defensive sector.

Nick Scali's last two dividends amount to 70 cents, which is a grossed-up dividend yield of 7.2%.

The company plans to add another 70 or so stores to its Australia and New Zealand network over the long term. It had 108 stores on 31 December 2023, so there are still a lot of additional stores to go.

The ASX retail share announced it was expanding into the UK by acquiring Fabb Furniture, which has a 21-store network. The company intends to establish the Nick Scali brand in the UK. Management believes there is a "significant opportunity" to drive long-term profitable growth.

Foolish takeaway

Those two companies together have an average grossed-up dividend yield of 10.1%, so an investment of just under $10,000 across the two ASX dividend shares could make an income of $1,000 over the next 12 months.

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 recommended Nick Scali and Shaver Shop Group. 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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