Shaver Shop Group Ltd (ASX: SSG) is one ASX share that pays a significant dividend yield to shareholders.
There's an interesting question for high-yield ASX dividend shares: How sustainable is a large dividend payout?
The large ASX iron ore shares of Fortescue Ltd (ASX: FMG), Rio Tinto Ltd (ASX: RIO) and BHP Group Ltd (ASX: BHP) may have a reputation for paying large dividend yields, but it's common for those companies to reduce their dividends if the iron ore price declines.
Shaver Shop does not need to deal with ever-changing commodity prices — it sells various hair removal products, including electric shavers, clippers, trimmers, and wet shave items. It also sells other health and beauty products, including oral care, hair care, massage, air treatment, and beauty categories.
Let's look at how big the dividends have been from Shaver Shop recently.
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Large dividends
Shaver Shop started paying a dividend in 2017 and grew the annual dividend per share every year until the 2023 financial year when it sent a payment of 10.2 cents per share to shareholders.
In the 2024 financial year, the ASX share maintained its dividend per share at 10.2 cents per share.
At the current Shaver Shop share price, that translates into a fully franked dividend yield of 7.6% and a grossed-up dividend yield of 10.9%, including franking credits.
The company's large dividend yield alone could be enough to beat the return of the S&P/ASX 200 Index (ASX: XJO) in the next year. The dividend isn't guaranteed to be maintained, but Shaver Shop's leadership has shown that they want to reward shareholders with passive income stability.
Can good profits continue?
The latest update from the ASX share was its annual general meeting (AGM) trading update for FY25 to 31 October 2024 which showed total sales declined 1.3% year over year.
Despite that, the gross profit margins improved, leading to gross profit dollars being flat for the first four months of 2025.
The ASX share's management expects the strategy of securing more exclusive products with innovative premium brands, such as Skull Shaver and the launch of Transform U, to support the gross profit margin expansion at Shaver Shop in the medium term.
Shaver Shop can also look to grow its profit by increasing its store count, which could be very helpful for its scale, better terms with suppliers, and so on.
I believe the ASX share can beat the ASX share market if its net profit can climb in the longer term. This should help maintain and hopefully grow the dividend in future years. It's only trading at 11x FY24's earnings, which I think is cheap.
