2 ASX shares with dividend yields above 7%

These ASX shares could pay huge yields in the coming years.

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ASX shares have an excellent ability to pay large dividend yields if they have a generous dividend payout ratio and a valuation that isn't too high.

Term deposits do offer protection, but ASX dividend shares can provide a higher yield and also provide long-term growth of the payouts.

Share prices can go up and down, but if the profit keeps going up over time, then the shareholder returns will hopefully be positive and pleasing.

Having said that, I believe the two ASX shares below look positive for investors with good dividend yields.

Accent Group Ltd (ASX: AX1)

This ASX retail share acts as a local distributor for many global shoe brands, including UGG, Hoka, Herschel, Skechers, Merrell, Dr Martens, CAT, Vans, Sebago, and Saucony.

Accent also has some of its own businesses, including The Athlete's Foot, Stylerunner, Nude Lucy, Lulu and Rose, and more.

After a difficult period over the last couple of years because of a high cost of living, the outlook is promising for recovery and growth.

A trading update at the annual general meeting (AGM) was promising. In the first 20 weeks of FY25, total group owned sales increased 6.8% and like for like sales were up 3.5%. While the gross profit margin fell 70 basis points, the cost of doing business (CODB) to the end of week was "starting to gain traction", with the CODB to sales ratio showing a "small improvement to last year".

A key part of the growth story is an expanding store network. Around 40 new stores were expected to open in the first half of FY25. I think it can add dozens more stores across the different brands in the coming years.

In FY24, the ASX share paid an annual dividend per share of 13 cents. That's a grossed-up dividend yield of 8%, including franking credits. According to Commsec, it's projected to pay an annual dividend per share of 14.7 cents in FY26, which would be a grossed-up dividend yield of 9%, including franking credits.

APA Group (ASX: APA)

APA is one of the most important energy businesses in Australia, in my view. Its huge gas pipeline transports half of the nation's gas usage. It has various other energy assets including electricity transmission, renewable energy generation, and energy storage.

Its growing asset portfolio helps the business produce more cash flow, which is supported by revenue growth, with a large majority of the revenue linked to inflation.

Impressively, APA has grown its distribution every year for the past two decades, making it one of the most resilient ASX dividend shares on the ASX, in my eyes.

The business is expecting to grow its distribution by a further 1.8% in FY25 to 57 cents per security, which translates into a dividend/distribution yield of 8.4%.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Apa Group. The Motley Fool Australia has recommended Accent Group. 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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