ASX dividend shares can be an attractive source of passive income thanks to their low valuations and good dividend yield.
A company that trades on a low price/earnings (P/E) ratio or at a share price much lower than its net asset value (NAV) can offer a very appealing yield.
We can find attractive ASX dividend shares in several different sectors. Let's examine an ASX tech share and one from the retail sector.
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Shaver Shop Group Ltd (ASX: SSG)
This company operates in Australia and New Zealand, selling male and female personal grooming products, including electric shavers, clippers and trimmers, and wet shave items. The ASX dividend share currently has 123 Shaver Shop stores across the two countries.
The company recently reported its FY24 result, which showed it paid an annual dividend per share of 10.2 cents. This translates into a fully franked dividend yield of 8.3% and a grossed-up dividend yield of 11.8%.
Shaver Shop grew its dividend every year between 2017 and 2023 and then maintained it in FY24. That's a strong record, and I think there's a good chance that the company will at least maintain its dividend again in FY25, with the potential for growth.
The company is opening two new locations in Port Macquarie, NSW and Busselton, WA, in the first half of FY25. It also expects to refit eight to ten stores across FY25 to bring these locations up to the latest brand standards.
The aim is to carefully manage sales and the profit margin percentage to optimise gross profit dollars.
Bailador Technology Investments Ltd (ASX: BTI)
This ASX dividend share describes itself as a growth capital fund focused on the IT sector. It invests in private technology companies at the 'expansion stage'.
In the FY24 result, the company noted its investments had portfolio company revenue growth of 47%, a gross profit margin of around 67% and recurring revenue making up around 91% of the total. That's the type of financial statistics that investments within the portfolio have.
In the last few months, Bailador has revealed three new investments, totaling $42.7 million. Updoc is a digital healthcare platform, Dash is a financial advice and investment management software platform, and Hapana is an end-to-end software platform for gyms and boutique fitness studios.
Bailador is committed to a dividend equating to 4% of pre-tax net tangible assets (NTA) per annum. The Bailador share price is $1.18, compared to an NTA of $1.77 on 31 July 2024. That 4% yield on the pre-tax NTA translates into a fully franked dividend yield of 6% and a grossed-up dividend yield of 8.6%.
This large yield is partly due to the share price trading at a 34% discount to the Bailador NTA. If the underlying value of its investments grows, the dividend could increase, too.
