ASX shares can be a great place to find businesses offering investors compelling dividend yields with yield-boosting franking credits.
While I wouldn't invest in something just because of the yield, I think high-yield businesses can be appealing because of how real cash returns can be distributed to investors each year. I'd only want to invest in businesses I think can deliver growing earnings in the longer term. There's not much point in receiving a large dividend yield if the share price falls by a larger amount.
With that in mind, let's take a look at two businesses sending out significant sums to investors every year.
Adairs is a retailer of furniture and homewares through three different businesses: Adairs, Mocka, and Focus on Furniture.
As a discretionary retailer, the business has been disrupted by the high cost of living in the last two or three years. However, with the Reserve Bank of Australia (RBA) now cutting the official cash rate, I believe the business is primed to deliver earnings growth in the next two to three years.
The business is already seeing encouraging sales growth. In the FY25 half-year result, total sales increased 2.7% to $310.5 million, underlying operating profit grew 6.7% to $33 million, and statutory net profit after tax (NPAT) increased 9.7%. In the first seven weeks of the second half of FY25, group sales were up an impressive 9.2%.
The solid rebound of earnings allowed the ASX share to hike its interim dividend by 30% to 6.5 cents per share. Its last two declared dividends come to a grossed-up dividend yield of 7.1%, including franking credits.
According to Commsec, it's expected to pay a grossed-up dividend yield of 8.7% in FY26, including franking credits.
This is a REIT focused on owning quality office properties around Australia. It's the largest pure-play office REIT on the ASX.
The business has a portfolio occupancy rate of 91.4%, which is stronger than the average national office market occupancy of 84%, allowing it to generate pleasing rental profits for investors. It currently has a weighted average lease expiry (WALE) of 4.2 years, which is a satisfactory level of income visibility, in my opinion.
The REIT said that its portfolio is "well-positioned to service evolving tenant requirements, as tenants gravitate towards sustainable, modern accommodation, especially those with existing fit-outs." It's actively addressing known vacancies and upcoming lease expiries across its portfolio.
The business has guided that it expects to generate funds from operations (FFO) – rental profit – of 11.8 cents per unit. With this, it could pay a distribution per unit of 10.1 cents.
At the current Centuria Office REIT unit price, the stock offers an FY25 dividend yield of 8.3%.
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