Investing in ASX dividend shares comes with a significant focus on the passive income they can generate. So, why not focus on a business with the potential to deliver massive payouts in terms of the dividend yield?
Any business that pays a dividend is capable of paying a pleasing dividend yield. But, not many are likely to deliver a double-digit dividend yield in the next few years.
If an ASX dividend share has a relatively high dividend payout ratio and a relatively low price/earnings (P/E) ratio, then it can provide significant passive income in yield terms.
The business I'll highlight is Shaver Shop Group Ltd (ASX: SSG).
It sells a wide range of male and female personal grooming products across more than 120 stores in Australia and New Zealand. It sells products such as electric shavers, clippers, trimmers, and wet shave items, as well as oral care, hair care, massage, air treatment, and beauty categories.
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The ASX dividend share's impressive payout history
The Shaver Shop has been paying shareholders a dividend for several years. It has increased its dividend every year since 2017, except for the year it maintained the annual dividend in FY24.
Not many businesses have increased their dividend that many times in the last seven years, yet this retailer has.
Most businesses with a high dividend yield haven't delivered that level of consistency for investors. High-yielding ASX mining shares and ASX retail shares tend to be more cyclical in their payouts.
Dividends are not guaranteed, but the business is projected to deliver further dividend growth.
Strong dividend yield
According to the forecast on CMC Markets, the business is projected to pay an annual dividend of 10.5 cents per share in FY26 and then 11.6 cents per share in the 2027 financial year.
At the time of writing, the Shaver Shop share price could pay a grossed-up dividend yield of more than 11%, including franking credits.
That's a huge yield in anyone's book, and it's clear to me the ASX dividend share could continue growing earnings over time because of a couple of key initiatives including exclusive products from shaving brands and the launch of its own private brand, which I'll cover in more detail below.
Profit growth expected
The forecasts on CMC Markets suggest the business could deliver earnings per share (EPS) of 11.7 cents in FY26 and 12.8 cents in FY27.
Shaver Shop claims to offer customers a wide range of quality brands at competitive prices, backed by excellent staff and product knowledge. Its specialist expertise and track record in the personal grooming segment enable it to negotiate exclusive products with suppliers. That gives customers a great reason to shop at the company's stores (or website).
The business also launched its own private brand called Transform-U in October, and it's performing strongly. The idea is to expand its current range (with features and price points), leverage its knowledge of customers, and meet customer demands.
I think this ASX dividend share is underrated for the shareholder returns it could deliver in the next couple of years.
