The ASX share market can be a great place to find investments that can pay attractive passive income as dividends.
Term deposits are paying a much stronger interest rate these days, so I think ASX dividend shares need to pay a very healthy starting dividend yield to be attractive.
But keep in mind that dividends are not guaranteed. Shareholder payments can be cut and projections are just educated guesses.
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Nick Scali Limited (ASX: NCK)
Nick Scali is one of Australia's largest furniture retailers, with a national store network. It also recently acquired competitor Plush. The company has plans to grow profit by increasing its store count and growing online sales.
The ASX retail share trades on a relatively low price/earnings (p/e) ratio, which means that it trades on a low multiple of its earnings compared to other businesses.
According to Commsec, Nick Scali could pay an annual dividend per share of 71.8 cents, which translates into a grossed-up dividend yield of 11%.
However, be aware that the business is expected to reduce its dividend in FY24 as demand for sofas falls. Even so, the projected grossed-up dividend yield is still a massive 8.7%. That's still a lot of passive income.
GQG Partners Inc (ASX: GQG)
GQG Partners is a US-based fund manager. Indeed, it's one of the largest fund managers on the ASX.
Its investment style is resonating with investors as it continues to see inflows of funds, despite all of the market volatility.
The ASX share has committed to pay 90% of its distributable earnings out as a dividend to shareholders. It pays a quarterly dividend, which is useful for cash flow purposes. It's expanding its geographic presence, which is also expanding its potential growth. Canada and Australia are two of these growth markets.
Commsec numbers suggest that GQG is going to pay an annual dividend per share of 11.8 cents in FY23, which equates to a dividend yield of 8.5%.
It could then pay a dividend of 13.5 cents in FY24, which would be a dividend yield of 9.7%.
Centuria Industrial REIT (ASX: CIP)
This is one of the larger real estate investment trusts (REITs) on the ASX. It's a pure play on quality industrial properties in Australia, which are predominately located on the east coast of Australia in metropolitan areas.
It has tried to invest in places where there's high demand for industrial properties, which can lead to good rental growth and longer-term capital growth (excluding the impacts of interest rates).
The ASX share is expected to pay a distribution per security of 16 cents in FY23, which would be a distribution yield of just under 5.3%.
The distribution could then grow slightly in FY24 to 16.1 cents per security, which would be a distribution yield of slightly above 5.3%.
