ASX dividend shares with large dividend yields can pay huge levels of passive income into our bank accounts.
There’s a lot to like about international share market investments such as iShares S&P 500 AUD ETF (ASX: IVV). However, with a dividend yield of around 1%, it’s not a compelling contender for cash payments.
Thankfully, on the ASX there are a number of impressive candidates with huge dividend yields. Despite higher interest rates this year, the following two stocks are expected to provide reliable payments for FY27.
Universal Store Holdings Ltd (ASX: UNI)
This ASX dividend share owns a portfolio of premium youth fashion brands.
Its businesses are Universal Store, Perfect Stranger and CTC (trading as the THRILLS and Worship brands). At the latest count, the company had 123 physical stores in Australia.
Despite generally tougher retail conditions, the company was able to increase group sales by 12.9% in FY26 thanks to 11.5% growth in sales for Universal Store to $313.3 million and Perfect Stranger sales growth of 40.8% to $35.9 million.
The company added five new Universal Store locations during FY26 to reach 88, as well as seven new Perfect Stranger stores to reach 26. It has aspirations to reach 100 or more Universal Store locations and a goal of 60 Perfect Stranger stores.
Universal Store’s profit margins are increasing, demonstrating operating leverage, enabling its profit lines to grow faster than revenue. The FY26 gross profit margin increased 140 basis points to 62.5%, while the underlying net profit grew 16.3% to $40.5 million.
The ASX dividend share hiked its FY26 payout by 11.7% to 43 cents per share. The projection on Commsec suggests the business could slightly increase its payout to 45 cents per share in FY27.
If that projection becomes reality, it’d be a grossed-up dividend yield of 8%, including franking credits, at the time of writing.
Charter Hall Long WALE REIT (ASX: CLW)
The other ASX dividend share I want to highlight is the real estate investment trust (REIT) Charter Hall Long WALE REIT, which owns a diversified portfolio of commercial properties across Australia.
One of the best things about the business is that it has long rental contracts with the REIT. The business currently has a weighted average lease expiry (WALE) of around nine years, which means it already has significant rental income locked in for the next decade.
Depending on the specific lease agreement, rental income is growing either in line with inflation or by a fixed rate. I think that’s a key factor in helping support the distribution in FY27. In the coming years, I expect passive income growth to return.
The business expects to pay an annual distribution of 25.5 cents per security in FY27, the same as FY26. That equals a distribution yield of 7.8%.
With a portfolio across service stations, hotels, industrial properties, government-related buildings, food manufacturing and so on, I think it has effectively diversified the risks of being too exposed to one sector.
It seems to be trading at a significant discount to its underlying net tangible assets (NTA). Therefore, I think it’s a good time to invest while the market is negative on REITs.
The post Get paid huge amounts of cash to own these ASX dividend shares 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 iShares S&P 500 ETF. The Motley Fool Australia has recommended Universal Store and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.