Dividend shares are in high demand right now with Australia’s interest rate at ultra low levels.
How’s anyone supposed to generate income if the interest rate is almost 0%? Cash is decent for capital protection in the short term, but it could be terrible for long term wealth.
ASX dividend shares could be the answer when the share market rebound comes, particularly when you add the juicy franking credits into the equation. So what should you look at? Here’s some ideas:
WHSP (ASX: SOL)
WHSP is an investment conglomerate which has been operating for over 100 years. It’s been through plenty of human disasters already (including wars) and this is another crisis that it seems to be positioned strongly to ride through with its investments in telecommunications, resources, pharmacies and plenty of other defensive (uncorrelated) industries.
Management have already come out and said that WHSP should be able to grow its dividend this year thanks to the cashflows it receives. This will add to the growth record that has been going since 2000.
Right now WHSP has a fully franked dividend yield of 3.4%.
ARB (ASX: ARB)
ARB, the 4WD accessories business, is another with one of the best dividend growth records on the ASX going back many years.
It has been a resilient business for years with the ability to deliver growth year after year. I’m not sure about the 2020 prospects for ARB but over the medium term it should keep stay a solid business with a growing dividend.
Looking at the last 12 months of dividends amounts to a fully franked dividend yield of almost 3%.
Service Stream (ASX: SSM)
Service Stream is a business involved in the design, building and maintenance of important infrastructure, which will continue to be important in the years to come.
It has a solid dividend growth record and this could continue after 2020.
It currently has a fully franked trailing dividend yield of 5%.
But dividend shares aren’t the only ones with solid prospects, these tech shares could be great choices:
Disclosure: at the time of publishing, Jaz owns shares of WHSP, but that could change at any time.