There are some ASX dividend shares that have income yields of more than 5%.
Not every business that pays a dividend has large yield.
But some options have impressive yields that can boost investor income quite noticeably:
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Charter Hall Long WALE REIT (ASX: CLW)
This real estate investment trust (REIT) owns a diversified portfolio of property assets across a number of sectors including: office buildings, retail, agri-logistics, telecommunication exchanges, service stations, distribution centres and Bunnings properties.
Whilst the portfolio is diversified, there is one thing that links them altogether – they have long rental agreements, providing income visibility and security for investors.
Its biggest four tenants are: government, Telstra Corporation Ltd (ASX: TLS), BP and Endeavour Group Ltd (ASX: EDV).
As noted by the REIT itself, all of its leases have annual rent increased, providing attractive income growth. Around 39% of leases have income growth linked to CPI inflation, with the remaining 61% have fixed annual increases that average 3.1%, providing in-built growth across the portfolio.
At the AGM it said that the ASX dividend share's portfolio of 550 properties had an occupancy rate of 98.4% with a weighted average lease expiry (WALE) of 12.6 years, with 99% of properties being located in metropolitan locations.
Management said that it has a highly resilient tenant customer base, with 100% of rent received during COVID.
Charter Hall Long WALE REIT recently announced an increase in valuation of $529 million, representing an 8.1% uplift on prior book values to around $7 billion at 31 December 2021. That increased the estimated per forma net tangible assets (NTA) per security to $5.85 – a 14% increase.
It also aims for a 100% payout of rental profit each year.
Citi currently rates it as a buy, with a price target of $5.59. It's expecting the business to pay a distribution yield of 6% in FY22 and 6.2% in FY23.
Metcash Limited (ASX: MTS)
Metcash is a business that generates earnings from its hardware businesses of Mitre 10, Home Timber & Hardware and Total Tools. It also makes money by supplying various supermarket and liquor businesses including Cellarbrations, The Bottle-O, IGA Liquor, Duncans, Thirsty Camel, Big Bargain, IGA and Foodland.
The business is now targeting a dividend payout ratio of around 70% of underlying profit. This led to Metcash increasing its interim dividend by 31% to 10.5 cents per share.
The ASX dividend share continues to see sales growth, as well as working on initiatives to improve margins.
In the first five weeks of the second half of FY22, food sales were up 2.3% year on year, liquor sales were up 7.6% and total hardware sales were up another 20.1%.
It's currently rated as a buy by Credit Suisse, with a price target of $4.55. The broker is expecting Metcash to pay a grossed-up dividend yield of 7% in FY22.
