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Date : 02/11/2023

Two ASX Retail Stocks With Over 7% Yield

In today’s economic landscape, with inflation showing no signs of slowing and bank deposit rates continually lagging behind loan rates, investors are searching for stable and rewarding passive income sources. The S&P/ASX 200 Index offers many opportunities, particularly within the retail sector. This article delves into two standout retail shares, JB Hi-Fi Ltd and Harvey Norman Holdings Ltd, which provide fully franked dividends and boast inflation-busting yields of over 7%.

JB Hi-Fi Ltd (ASX: JBH)

Founded as a simple Hi-Fi store, JB Hi-Fi Ltd (ASX: JBH) has become one of Australia’s foremost consumer electronics and home appliance retailers. It is arguably the best retail stock on the ASX.

Despite challenging conditions characterized by rising interest rates and persistent inflation, JB Hi-Fi has showcased resilience. Over the past 12 months, its share price has risen by a commendable 7%, settling at $44.36 as of the last trading day.

One of the major attractions for investors is the company’s dividend offerings. In the last year alone, shareholders were treated to an all-time high interim dividend of $1.97 per share, followed by a final dividend of $1.15. This accumulates to a total dividend payout of $3.12 per share annually. For those eyeing dividend yields, this translates to an enticing, fully franked yield of slightly over 7%, a noteworthy return in the current market environment.

asx jbh Shares

Harvey Norman Holdings Ltd (ASX: HVN)

With a legacy spanning decades, Harvey Norman Holdings Ltd (ASX: HVN) has positioned itself as a dominant player in Australia’s home furnishings and white goods market.

However, not all seems rosy for Harvey Norman. The past year has seen the company grapple with challenges, reflected in a 12% decrease in its share price, which closed at $3.55 recently. The financial year 2023 further highlighted these challenges, with revenues declining by 3.8% to touch $9.2 billion and a significant drop in the Net Profit After Tax (NPAT) by 33.5% to reach $540 million.

Yet, there’s a silver lining. Company management remains optimistic, asserting that the firm is “well-placed to benefit from any upturn in trading conditions and any growth that may arise from the home renovation cycle, new home starts, and net migration increases.”

Regarding dividends, Harvey Norman still offers a compelling proposition for dividend hunters. The company declared an interim dividend of 13 cents per share, with a forthcoming final dividend of 12 cents set to be disbursed on 13 November. This culminates in a full-year dividend payout of 25 cents per share. As with JB Hi-Fi, investors can anticipate a fully franked yield slightly surpassing the 7% mark.

asx hvn shares

Conclusion

While both JB Hi-Fi and Harvey Norman present lucrative dividend yields, the former is more stable in share price performance. Conversely, despite its challenges, Harvey Norman remains a stalwart in the retail sector and offers promise for the future. Investors keen on robust passive income streams would consider both options closely, considering the company-specific and broader macroeconomic conditions that could impact future yields.

 

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