The ASX dividend share space is full of a lot of interesting potential ideas for passive income, including ones with huge dividend yields.
But, the higher the dividend yield goes, the more careful I am about the choices.
Some dividend yields are just a mirage. A dividend cut may be coming because profit generation has been affected.
So, I'm going to talk about two ASX dividend shares that have incredibly high yields but have also displayed reliability.
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Hearts and Minds Investments Ltd (ASX: HM1)
Listed investment companies (LICs) can be a great option for dividends because they can turn investment returns from a portfolio into dividend payments to shareholders.
Hearts and Minds is a very different type of LIC to most others. All of the investment professionals involved don't charge any management fees.
Each year, Hearts and Minds donates to Australian medical organisations to help fund research, which is a great initiative.
In terms of the investments, there are two ways that picks are chosen for the portfolio. First, a majority of the portfolio is chosen by a permanent group of fund managers.
Second, at an annual investment conference, the stock picks are chosen by a number of investment professionals for a minority of the portfolio.
Overall, it's a portfolio of best ideas from all of these experts. The portfolio is largely an international stock portfolio, which gives Australians a pleasing level of diversification.
In terms of the dividend, the last two payments came to 19.5 cents per share. That's a grossed-up dividend yield of 9.4%, including franking credits, at the time of writing.
It has steadily increased its payout each year since 2023, which is pleasing amid rising interest rates.
Shaver Shop Group Ltd (ASX: SSG)
Shaver Shop is an intriguing ASX dividend share because of its position as an Australian and New Zealand specialty retailer of male and female personal grooming products. It wants to be the market leader in all things related to hair removal.
There are currently 127 Shaver Shop stores across Australia and New Zealand, selling a wide range of quality brands. It has a number of exclusive products with suppliers.
Its longer-term growth over the last several years has enabled the business to pay a steady and regularly growing dividend. Since it started paying a dividend in 2017, it has grown its payout most years (with no cuts), though that's not guaranteed to continue forever.
In FY26, it maintained its annual dividend per share of 10.3 cents following a 3% rise of sales to $225.1 million and operating profit (EBIT) growth of 1.3% to $22.8 million.
At the time of writing, the FY26 payout translates into a grossed-up dividend yield of 11.4% (including franking credits), which is a huge yield, but the company trades on a relatively low price-earnings (P/E) ratio.
If it can expand its store network, sell more exclusive brand products, grow its private brand, and sell more online, the ASX dividend share has a very promising future.
