It's not only the large ASX blue chips that pay dividends, there are also small ASX dividend shares that have large yields.
Not every business that pays a dividend is worth owning. But smaller businesses may have the potential to deliver longer-term growth.
Pacific Current Group Ltd (ASX: PAC)
This business has a trailing grossed-up dividend yield of 8.5%. Broker Ord Minnett is expecting Pacific Current to pay a grossed-up yield of 9.7% in FY21.
It makes investments into global fund managers based anywhere in the world and helps them grow.
Pacific Current has a number of different funds management investments including GQG, Astarte Capital Partners and Victory Park.
In FY20, the ASX dividend share's earnings were boosted by Pacific's funds under management (FUM) growing to $93 billion. FY20 underlying earnings per share (EPS) went up by 18% to $0.51, with the dividend per share increasing by 40% to $0.35 per share.
In the update for the three months to 31 December 2020, Pacific Current said that its FUM had risen to $112.8 billion, largely thinks to GQG.
Adairs Ltd (ASX: ADH)
Adairs is one of the largest retailers of home furnishings in Australia. Its last 12 months of dividend declarations amounts to a grossed-up dividend yield of 8.3%.
The ASX dividend share just reported its FY21 half-year result which showed strong growth.
Group sales rose 34.8% to $243 million, with Adairs online sales rising 95.2%. Group online sales amounted to $90.2 million, being 37.1% of total sales.
The gross profit margin of the business grew significantly, rising by 690 basis points to 67.8%. This helped underlying earnings before interest and tax (EBIT) jump 166% higher to $60.2 million. Statutory net profit soared 233.4% to $43.9 million.
Growth has continued into the second half of FY21, with total sales up 25% and Adairs online sales rising by 65.9%.
Propel Funeral Partners Ltd (ASX: PFP)
Propel is the second largest funeral operator in the country.
It has a trailing grossed-up dividend yield of 4.8%.
Despite COVID-19, the company was able to deliver growth in FY20 with a 6.5% increase in operating net profit after tax (NPAT) and a 1.6% increase in the average revenue per funeral. The FY20 dividend amounted to 10 cents per share.
In the first quarter of FY21, it delivered 18% growth of operating earnings before interest, tax, depreciation and amortisation (EBITDA) to $10.5 million, the average revenue per funeral grew between 2% to 4% and there was total volume growth year on year.
The ASX dividend share is expecting long-term growth from a rising and ageing population, strong funding and acquisitions.
