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3 little-known ASX dividend shares offering big income

The Motley Fool logo The Motley Fool 14/05/2021 Tristan Harrison
a pink teddy bear: A row a pink piggy banks ranging in size from small to big, indicating ASX share price and dividends growth CBA bank dividend increase © Provided by The Motley Fool A row a pink piggy banks ranging in size from small to big, indicating ASX share price and dividends growth CBA bank dividend increase

There are some smaller ASX dividend shares that have pretty big dividend yields.

Smaller businesses are often less covered by analysts and investors which can lead to lower price/earnings ratios and higher dividend ratios.

These ASX dividend shares all have high dividend yields on offer:

Pacific Current Group Ltd (ASX: PAC)

This is a business that makes investments into global investment managers around the world. Each investment and fee structure is different, but Pacific benefits if the funds under management (FUM) grows.

Using the last 12 months of dividends, Pacific has a trailing grossed-up dividend yield of 9.1%. As the FUM grows, the underlying profitability of the Pacific business increases (particularly as it is lowering its costs after the onset of COVID-19).

Pacific continues to invest into new opportunities such as Astarte Capital Partners which may be able to become larger contributors to profit in the coming years.

It’s currently rated as a buy by Ord Minnett with a price target of $6.70. In FY22, it’s expected by the broker to pay a grossed-up dividend yield of 9.6%.

Pengana Capital Group Ltd (ASX: PCG)

Pengana is a fund management business. At the end of March 2021, it had $3.71 billion of FUM (up from $3.63 billion in February 2021).

It earns management fees and performance fees from the FUM that it manages, which turns into profit and dividends for shareholders.

Looking at the last 12 months of dividends, Pengana has a grossed-up dividend yield of 7.4%.

The ASX dividend share’s FY21 half-year FUM increased by 15% and underlying profit before tax increased by 17.1%. The board was happy enough to increase the interim dividend of 25% to 5 cents per share.

Accent Group Ltd (ASX: AX1)

Accent is a business that aims to increase its dividend consistently for investors. Indeed, its dividend has actually been consistently growing over the last few years.

The FY21 half-year result saw the board increase the dividend by 52.4% to 8 cents per share. This was funded by a 56.9% increase of the earnings per share (EPS), with earnings before interest tax (EBIT) going up 47.3% and digital sales jumping 110%.

Accent Group continues to make compelling acquisitions, such as the Glue Store which diversifies the company’s earnings and gives it more avenues to grow.

The ASX dividend share also continues to grow its store network, increase store like for like sales and improve its profit margins. The gross margin increased from 56.7% to 58.1%.

Further growth is expected into FY22. It’s expecting to open at least 90 stores in FY21 and then there should be continued strong store openings into FY22.

In the first eight weeks of the second half of FY21, like for like retail sales were up 10.7% and digital sales were up 65.4%. Online sales continues to track above 20% of total sales.

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Returns As of 15th February 2021

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Motley Fool contributor Tristan Harrison owns shares of PACCURRENT FPO. The Motley Fool Australia has recommended Accent Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post 3 little-known ASX dividend shares offering big income appeared first on The Motley Fool Australia.


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