3 high-yield ASX dividend shares you’ve probably never heard of

Some of the smaller ASX dividend shares might be able to pay some of the largest dividend yields.

A business like Commonwealth Bank of Australia (ASX: CBA) is solid, but it gets a lot of fund manager and household attention. It’s also a very large business that is unlikely to deliver a lot of growth and due to many investors focusing on the big bank, it’s not as likely to be cheap as the smaller, undiscovered names.

But it’s worth pointing out that just because something is small doesn’t mean it will do well. However, the lower valuation could make up for that and give investors a bit of a margin of safety.

The three small ASX dividend shares below are ones that are buy-rated and are expected to pay large income yields.

MotorCycle Holdings Ltd (ASX: MTO)

MotorCycle Holdings is a business that sells motorbikes through a large network of locations. It sells a variety of brands like Yamaha, Harley Davidson, Ducati, Honda, and Suzuki.

It recently announced it was acquiring Mojo Group for $60 million, which is one of Australia’s largest importers and wholesalers of motorcycles, genuine spare parts, and accessories.

The small ASX dividend share is still experiencing supply chain challenges, but acquisitions are adding to earnings. It’s investigating expansion into industry segments where it’s unrepresented. Despite positive current trading conditions, it’s preparing for more subdued trading conditions as consumer demand moderates.

It’s rated as a buy by Morgans, with a price target of $3.42. It’s expected to pay a grossed-up dividend yield of 11.8% in FY23.

Lindsay Australia Ltd (ASX: LAU)

The ASX dividend share describes itself as an integrated transport, logistics, and rural supply company. Its focus is on road transport, logistics, and warehousing services as well as specialist services to rural suppliers, with an emphasis on the horticultural industry.

Lindsay is aiming to diversify its revenue sources, which has seen it expand into rail. It has also acquired 27 refrigerated containers in the first quarter of FY23, expanding the fleet to 403 containers. Rail will “continue to deliver revenue growth into FY23”, the company says.

With its road segment, it’s expanding its trailer fleet to increase operational capacity. In the rural division, it is continuing to explore opportunities to expand in “key horticulture regions” either organically with low-cost start-ups or by acquisitions of established businesses.

It will continue to assess acquisition opportunities that could diversify its geographical reach and range of services.

But it expects the high demand for services to persist. In FY23, it’s expecting earnings before interest, tax, depreciation and amortisation (EBITDA) of between $68 million to $71 million.

It’s rated as a buy by the broker Ord Minnett, with a price target of 76 cents. It’s expected to pay a dividend yield of 6.1% in FY23.

COG Financial Services Ltd (ASX: COG)

This business describes itself as Australia’s leading finance broker aggregator and equipment leasing business for small to medium-sized enterprises (SMEs).

In FY23 to date, COG Financial Services has seen underlying net profit (NPATA) rise by 26% year-over-year to 31 October 2022. There has been “strong activity” in all segments and this is expected to continue “given mega trends supporting mining, infrastructure, transport and agriculture”.

The company said its scale means it can now support significant investment in its own software platform, giving it “the advantage of having the best offering in the market”.

This ASX dividend share is rated as a buy by the broker Ord Minnett with a price target of $2.11. The broker likes the growth the business is seeing in multiple areas. COG Financial is projected to pay a grossed-up dividend yield of 8.6% in FY23.

The post 3 high-yield ASX dividend shares you’ve probably never heard of appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Lindsay Australia Limited. The Motley Fool Australia has recommended Lindsay Australia Limited. 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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