3 ASX dividend shares with big yields above 9%

High yield ASX dividend shares could be the answer to generate income in this difficult environment.

The Reserve Bank of Australia (RBA) has pushed the official interest down to an extremely low level. How are people supposed to make an income from their assets?

Not only do savings accounts now offer a tiny interest rate, but many income shares have seen their yields compressed in the past few years (and weeks).

The difficulty is that the income is even less certain now with the ongoing global coronavirus pandemic. I think high yield ASX dividend shares could be the answer. 

With that in mind, there are some ASX dividend shares with yields above 9%:

WAM Research Limited (ASX: WAX)

WAM Research is a listed investment company (LIC) which is run by the high performing team at Wilson Asset Management.

This ASX dividend share has a grossed-up dividend yield of 9.7%. It has also grown its dividend every year since the GFC. That’s an attractive combination for income. Of course, the profit reserve could run out if the LIC doesn’t keep generating profits whilst paying these big dividends.

It makes money by identifying the best small and medium businesses on the ASX where there’s a catalyst that could re-rate the share price. It can then fund the dividend from the investment returns.

I also like that the LIC holds a high amount of cash for protection and opportunities during times like this.

Naos Emerging Opportunities Company Ltd (ASX: NCC)

This one is another LIC. It is another high yield ASX dividend share. It currently has a grossed-up dividend yield of 12.8%.

The Naos LIC only invests in businesses with a market capitalisation under $250 million.

Naos does things pretty differently to many other fund managers. It holds a portfolio of only around 10 high-conviction share ideas.

Over time these small cap shares can grow into much bigger businesses and also start paying dividends.

It has grown or maintained its dividend every year since it started paying one in FY13. It’s building its status as a solid ASX dividend share.

Fortescue Metals Group Limited (ASX: FMG)

Fortescue is one of Australia’s largest iron ore miners. When times are good for iron ore it is able to fund very large dividends.

Before the coronavirus pandemic the iron ore price was at a good level. But things are looking pretty tough in Brazil with the spread of COVID-19. That’s where Australia’s main iron ore competition comes from. The iron ore price has risen even more in the past few months.

This should mean that the ASX dividend share is able to continue paying its big dividend as long as China and an upcoming court case don’t derail the rosy picture.

Fortescue currently has a grossed-up dividend yield of 9.8%

Foolish takeaway

Each of these ASX dividend shares have big yields with a high chance of paying a big dividends over the next 12 months. At the current prices I’d probably go for the Naos one because its yield is the biggest and its share price hasn’t grown strongly in the past couple of months.

More reading

• Should the Xero share price have a P/E ratio of 4,000?
• Are our ASX big miners on an earnings upgrade cycle?
• These ASX shares were among the best performers in May, surpassing the ASX 200
• These ASX shares just zoomed to multi-year highs
• Why you might want to own ASX mining shares in 2020

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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