7% and 6% dividend yields! 2 ASX value shares on my buy list

A number of quality ASX value stocks have faced recent headwinds as cost of living pressures begin to bite.

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There are a number of ASX value shares offering reliable annual passive income alongside potential share price growth.

With ASX value shares often more closely aligned to Australia's overall economic health than growth shares are, some quality companies have faced recent headwinds as cost of living pressures begin to bite.

Below we look at two companies paying fully franked dividends that have come under selling pressure over the past year, potentially offering a good entry point.

Two ASX value shares on my watch list

The first ASX value share on my watch list is Harvey Norman Holdings Ltd (ASX: HVN).

Facing a difficult sales environment for home furnishings and white goods, shares in the S&P/ASX 200 Index (ASX: XJO) retail stock are down 8% over the past year, currently trading for $3.70 apiece.

But with inflation starting to come back down and interest rates likely having reached near their highs for this cycle, the medium to longer-term outlook for the Harvey Norman share price looks good to me.

As do the potential future dividend payouts.

As for the current yield, the ASX value share paid a 13-cent interim dividend on 1 May. The 12-cent final dividend will hit eligible shareholders' bank accounts on 13 November.

That equates to a full-year payout of 25 cents per share for a fully franked 6.8% dividend yield.

Which brings us to the second ASX value share on my watch list for passive income, Westpac Banking Corp (ASX: WBC).

The ASX 200 bank stock has underperformed its rival big banks over the past year amid stiff competition in Australia's lucrative mortgage market. Over the past 12 months, Westpac shares are down 10%, currently trading for $21.51 apiece.

But I believe that trend could reverse over the medium term. In fact, it may already have done, with Westpac shares up 5.1% since Monday's opening bell, outpacing the gains posted by the other big four banks.

On the passive income front, Westpac delivered a 64 cent per share dividend on 20 December and the bank paid a 70 cent per share final dividend on 27 June. That equates to a full-year payout of $1.34 per share.

At the current Westpac shares price, that works out to a fully franked trailing yield of 6.2%.

We'll find out what the FY 2023 final dividend is from this ASX value share on Monday, 6 November, when the bank reports its full financial year results.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Harvey Norman. The Motley Fool Australia has positions in and has recommended Harvey Norman. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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