Record low interest rates is making it very hard to make enough money from your investments, but I think there are still ASX dividend opportunities around.
The RBA recently cut the interest rate twice to just 1%, although it did just hold the rate at 1%.
If I were buying shares for income today, these are two that would be at the top of my watchlist:
Vitalharvest Freehold REIT (ASX: VTH)
As the name might suggest, Vitalharvest is a real estate investment trust (REIT). It’s one of the few agricultural REITs on the ASX. The farms it currently owns are predominately citrus fruit and berries, which are all leased to Australian horticultural giant Costa Group Holdings Ltd (ASX: CGC). It has a profit-share agreement with Costa where it receives 25% of the operational profit from those farms.
Vitalharvest has a somewhat different plan to own farms which are exposed to the growing global agricultural demand for nutritious, healthy food.
Over time Vitalharvest wants to diversify its portfolio way of crop type, climatic region, water source and product end markets.
Vitalharvest is slowly growing its base rental by investing in the farms, which should also help the variable rent from Costa.
The FY19 distribution amounts to a trailing yield of 6.7% if it were to be repeated in FY20.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
WHSP is an investment house business which has been operating for over 100 years. WHSP takes long term investment positions in businesses that could be profit growers for years to come. This is how it has ended up being a large stakeholder in TPG Telecom Ltd (ASX: TPM) and Brickworks Limited (ASX: BKW).
I think it’s such a good dividend share because it pays its dividend out from the regular cashflows it receives each year (which ignores share price movements). As WHSP’s investments grow cashflow and dividends, WHSP benefits too.
WHSP has grown its ordinary dividend each year since 2000, which is a consecutive growth record only matched on the ASX by Ramsay Health Care Limited (ASX: RHC).
It has a fully franked dividend yield of 2.75%, which is 3.9% when franking credits are included.
A portfolio which combines solid dividend shares like these and growth shares like the ones in the free report below could be the way to beat the ASX return over the next year or two.
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Disclosure: Jaz owns shares of Vitalharvest Freehold REIT, Costa Group Holdings and Washington H. Soul Pattinson and Co. at the time of writing, but this could change at any time.
