The ASX is known for its propensity for paying franked dividend shares. But not all dividend payers are created equal.
You would say an average dividend on the ASX would come in at around 4.4% – that's what your typical S&P/ASX 200 (INDEXASX: XJO) index fund offers these days anyway. But there are some ASX shares that offer higher yields than this.
Here are 2 ASX 200 shares that are paying grossed-up yields of over 10%
Westpac Banking Corp (ASX: WBC)
Westpac has been through the wars lately. It delivered a substantial cut to its dividend last year as well as undertaking a capital raising. That's in addition to the record fine Westpac expects to pay this year for allowing criminal activity to take place on its networks.
All of this negativity has pushed WBC shares down, which raises the trailing yield that new shareholders can expect if there are no further cuts to Westpac's payouts. Today, that yield stands at 7.05%, or 10.07% grossed-up.
Of course, the market is probably expecting a further dividend cut this year, which I would say is factored into Westpac's current share price if we look at its historical levels. But if this bank manages to pull a rabbit out of its hat this year and keep its dividends steady, today will probably look like a great deal in hindsight.
Alumina Limited (ASX: AWC)
The first thing you will notice about this stock is its trailing dividend yield of 11.24% (yep, you read that right). If you include the value of Alumina's full franking credits, this yield grosses up to a stupendous 16.06%.
High commodity prices and the company's joint-venture arrangement with the US-based Alcoa have enabled this company to maintain these massive shareholder payments. But it's my guess that these will only last as long as aluminium/alumina prices remain high. Still, if the commodity sector is of interest to you, or you just feel like having a moon-shot at this stock, it might pay off for the crazy-brave investor.
Foolish takeaway
Both of these 2 stocks offer dividend yields north of 10% – but as you would expect from such high payouts, both come with their own set of risks as well. Dividend investing is not without unique risks, so if you're seriously considering investing in Westpac or Alumina, I would strongly suggest doing lots of research and making as informed a decision as possible.
