On the ASX stock market, we can find businesses with high levels of dividend yieldMaybe 10% or more.
The average return on the ASX share market over the long term has been around 10%. How good would it be to get that level of returns just from cash payments?
Of course, high yields come with their own risks. That yield may be higher because investors are expecting the business’s profits and payouts to decline soon. Or, the yield may actually be higher because dividend payout ratio Unsustainably high.
The following two businesses currently offer yields over 10%.
I don’t know what the size of the payout will be in the coming years, but I expect the dividend yield to remain very high in the near future, keeping in mind that the payout could be reduced somewhat from where it is today.
Let’s learn about those two businesses.
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Centuria Office REIT (ASX:COF)
This business is a Real Estate Investment Trust (REIT) It owns office properties in Australian metropolitan locations.
The share price has declined significantly over the last few years due to the headwinds of working from home and high interest rates.
However, it is still generating considerable rental income and signing new leases. In FY26 Q3 updateIt reported that during the period, lease terms of 5,742 sq m were agreed across 11 transactions, including new leases of 2,263 sq m and renewals of 3,479 sq m, with the majority of these transactions in Brisbane.
On a positive note, the business reported re-leasing spreads of 8.6%, with strong rental growth from the Fortitude Valley and Hamilton assets.
The ASX share portfolio currently has a four-year weighted average lease expiry (WALE) with 90% portfolio occupancy, which I would view as solid figures considering all factors.
Additionally, it also reported that it has refinanced $1 billion of loans in its loan book, resulting in a 30 basis point (0.3%) reduction in loan margins and an increase in the weighted average loan maturity from 2.6 years to 4.3 years.
The business highlights the limited supply of new office space, with a “significant gap between replacement costs and current valuations”.
ASX Shares also noted that “the widening gap between economic rents and prevailing market rents not only prevents viable office development but also provides ample room for current market rents to grow and strengthen future valuations.”
The expected distribution of 10.1 cents per security in fiscal 2026 translates to a dividend yield of about 11%.
WAM Microcap Limited (ASX:WMI)
WAM Microcap is a Listed Investment Company (LIC) Which invests in smaller ASX shares with big growth potential.
Any size business can deliver returns, but the smaller we go the lower market capitalization In the list, the less researched the stocks are and the better they have the potential to deliver strong returns.
Of course past performance is no guarantee of future returns, but WAM Microcap’s portfolio has returned an average of 14.2% before fees, expenses and taxes since its inception in June 2017. Those returns have been big enough to pay very large dividends.
It expects to increase its annual dividend slightly to 10.7 cents per share. This translates into a gross-up dividend yield of 10.75% from the ASX share.
Of the two names I highlighted, I would prefer to buy WAM Microcap because it is growing its payout And It provides diversification. But, REITs may be significantly undervalued at this level.