With proposed changes to Australian tax laws on negative gearing and capital gains, ASX shares with large dividend yields could be much more appealing to investors.
I think there's something very satisfying about seeing cash paid into my bank account regularly by ASX dividend shares. If we choose the right investments, Aussies can enjoy larger dividend payments over time.
Huge dividend yields of more than 10% aren't seen as safe payouts. There's normally a reason the yield is that high – earnings may soon fall and/or the dividend payout ratio is too high.
But there are a couple of names that are providing investors with dividend yields of more than 10%, and those payouts may well be sustainable going forward. I'm a fan of the two names below.
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Shaver Shop Group Ltd (ASX: SSG)
This ASX share describes itself as an Australian and New Zealand specialty retailer of male and female personal grooming products, and aspires to be the market leader in 'all things related to hair removal'.
It currently has 127 stores across Australia and New Zealand, selling a wide range of quality products at competitive prices. Thanks to its position in the market, it has managed to negotiate exclusive products with certain suppliers.
The main product types it sells are electric shavers, clippers, trimmers, and wet shave items. It also sells other items, including oral care, hair care, massage, air treatment, and beauty categories.
The business trades on a low P/E ratio and has a generous dividend payout ratio, leading to an impressive dividend yield. It generated 11.3 cents of earnings per share (EPS) in FY26 and paid an annual dividend per share of 10.3 cents.
Its FY26 payout translates into a grossed-up dividend yield of 11.4%, which is an excellent yield considering the payout has grown or been maintained every year since 2017.
I think the move to grow its own brand, called Transform-U, is smart because it fills gaps in the company's overall product offering, provides compelling customer value, and can lead to a stronger gross profit margin. Transform-U represented 8% of total sales in FY26, up from 3.4% in FY25.
Hearts and Minds Investments Ltd (ASX: HM1)
The other ASX share I want to highlight with a huge dividend yield is Hearts and Minds, a listed investment company (LIC) with a philanthropic cause.
Instead of paying management fees to fund managers, the LIC donates a small portion of its net assets each year to medical research in Australia. I think that's a great initiative.
The portfolio is decided in two different ways. A majority of the portfolio is invested by a group of core portfolio managers on an ongoing basis.
The rest of the portfolio's picks are decided at an annual investment conference. Investment professionals pitch their best pick, and each of those is also part of the portfolio.
Most of the portfolio is normally invested in global shares, which can provide Aussies with useful diversification.
The LIC has grown its half-yearly dividend by 0.5 cents every six months in recent history. Assuming it continues that record, the next two dividends to be paid will amount to 20.5 cents per share, which is a grossed-up dividend yield of 10.4%, including franking credits.
