Smaller ASX dividend shares can offer just as large dividend yields as bigger businesses.
Here are two little-known businesses that have income yields bigger than the market average:
360 Capital REIT (ASX: TOT)
According to the ASX, 360 Capital REIT has a market capitalisation of $121 million.
This is a real estate investment trust (REIT) which invests across the entire real estate industry to take advantage of varying market conditions in order to maximise returns for investors.
It is managed by 360 Capital Group Ltd (ASX: TGP), which is an investment and funds management group, focused on strategic and active investment management of alternative assets.
360 Capital REIT recently changed its strategy to focus on equity investing in real estate assets and businesses and exiting its debt investments.
The ASX dividend share recently completed the sale of its Penrith shopping centre asset, in line with the book value.
A recent investment that the business made was acquiring a 9.18% stake in Irongate Group (ASX: IAP) for approximately $78.6 million. Irongate is an ASX-listed diversified REIT with approximately $1.1 billion of assets on the balance sheet and a third-party funds management platform. It also announced it had agreed terms to become a major equity partner in an unlisted real estate funds management platform with settlement expected this month.
The ASX dividend share explained that based on the recurring nature of the income from these investments, the REIT decided to provide guidance of 6 cents per unit for FY21. At the current 360 Capital REIT share price, it has a FY21 distribution yield of 6.8%.
At the FY20 result, which was released almost six months ago, the business said that it had net tangible assets (NTA) per share of $1.13. The current 360 Capital REIT share price is trading at a 22% discount to its NTA.
Pengana Capital Group Ltd (ASX: PCG)
Pengana is a fund manager that predominately provides investment services to retail investors. According to the ASX, Pengana has a market capitalisation of $181 million.
The last funds under management (FUM) update showed that the FUM had grown to $3.6 billion, up from $3.5 billion in the previous monthly update.
Pengana has a number of different investment strategies for investors to utilise. It has Australian multi-caps, Australian small caps, global multi-caps, global small caps and global private equity.
The ASX dividend share believes that it has a long-term and loyal customer base of financial advisors, retail investors and high net worth individuals with more than 20% in listed vehicles.
Listed investments have a stable pool of funds which allows it to invest for the long-term and provides consistent management fees.
One of the ways that Pengana plans to grow is overseas expansion. It bought two thirds of Lizard Investors in the US, Pengana plans to help it increase its FUM whilst also transforming Lizard into a platform for managing other strategies.
Pengana management think that eventually Lizard can grow to become the same size as the Australian business.
At the current Pengana share price, it has a grossed-up dividend yield of 6.3%.
