Quality ASX shares that pay big dividend yields could be exactly what passive income-seeking investors are looking for.
No dividend payments are guaranteed, but some ASX-listed companies have shown a willingness to deliver appealing payouts to investors.
I'm going to talk about two ASX stocks predicted to pay a yield of at least 8% in the future.
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Universal Store Holdings Ltd (ASX: UNI)
This ASX retail company owns a portfolio of "premium" youth fashion brands. It has two main businesses – Universal Store and CTC (which trades as THRILLS and Worship). The ASX share is also rolling out Perfect Stranger as a standalone retail format.
The business currently has a network of 100 stores and aims to open more. It expects to open between one and three new Universal Store locations in the second half of FY24, four to eight new Perfect Stranger locations, and one to two new-format THRILLs stores. This will take the total to 113 stores by 30 June 2024.
The growing store count, particularly with Perfect Stranger, is helping the company grow its sales and profit despite the challenges of the current economic environment. The strong employment rate in Australia is helping support solid retail spending.
The ASX dividend share has grown its annual payout each year since 2021, when it started paying dividends.
According to the forecast on Commsec, Universal Store could pay a grossed-up dividend yield of 8.5% in FY26.
Centuria Office REIT (ASX: COF)
As the name suggests, this is a real estate investment trust (REIT) that owns office buildings around Australia. Thankfully, the properties are not concentrated in the Melbourne or Sydney CBDs, where there appears to be oversupply and concern about vacancy rates amid a shift to people working from home.
The ASX share derives 78% of its rental income from government, multinational businesses and listed entities. Its portfolio occupancy rate on 31 December 2023 was 96.2%, with a 4.4-year weighted average lease expiry (WALE) — an increase from 4.2 years at the end of FY23.
According to Centuria, the outlook may turn around, with "falling productivity, loneliness and erosion of work culture driving return to work mandates as many tenants actively seek to re-engage with their staff in an office environment".
Future office supply is expected to "materially reduce" in the medium term, which could help rental rates and demand.
For FY24, the business expects to pay a distribution yield of 10.2%. In FY26 it's predicted to pay a distribution yield of 10.25%, according to Commsec.
