The ASX passive income stock Shaver Shop Group Ltd (ASX: SSG) may not be one of the most popular options for dividends. But, in some ways, it's one of the leading options to consider.
Shaver Shop describes itself as an Australian and New Zealand specialty retailer of male and female grooming products. It aspires to be the market leader in 'all things related to hair removal'. It sells items like electric shavers, clippers, trimmers, wet shave items, oral care, hair care, massage, air treatment and beauty categories.
At the end of the FY26 half-year period, it had 126 Shaver Shop stores across Australia and New Zealand, while also having online marketplaces. It sells a wide range of brands, with some exclusive products with suppliers.
Now that you know what it does, let's take a look at why it's so compelling.
Excellent ASX passive income stock credentials
The business has one of the highest dividend yields on the ASX.
Its last two declared half-year dividends come to 10.3 cents per share. At the time of writing, this represents a grossed-up dividend yield of 10.7%, including franking credits. That's huge! It also looks like a 'real' yield to me.
Some businesses have very large dividend yields because the share price has dropped and the market is expecting a decrease of earnings (and the dividend).
Shaver Shop has paid a dividend each year since 2017. It increased its dividend every year in that time aside from FY24 when it maintained the dividend.
I think it's very likely that the business can continue to maintain its dividend at this level and possibly grow it in the longer-term. In the FY26 half-year result it maintained its interim dividend at 4.8 cents share amid 1.5% growth of net profit to $12.2 million.
Its FY25 dividend payout ratio was 89.6% of net profit, which is fairly high but sustainable because it was under 100%. It kept some of the generated profit to improve the business.
Why I think this is a great time to invest
There are a few reasons why this looks like a great time to invest.
First, at the time of writing, the Shaver Shop share price has dropped 11% since the end of February 2026, which has had a big, positive effect on the dividend yield on offer from the ASX passive income stock.
Second, the business is looking to grow its earnings through store growth, expanding its own brand (Transform-U), unlocking more exclusive products and hopefully benefit from increased scale.
Third, it's trading on a very low price/earnings (P/E) ratio. According to the forecast on CMC Markets, the business is projected to generate earnings per share (EPS) of 11.6 cents. That means it's valued at 12x FY26 estimated earnings.
The post With a 10.7% yield, could this be the ASX's best passive income stock? appeared first on The Motley Fool Australia.
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 recommended Shaver Shop 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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