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Forget Telstra, buy these 3 ASX dividend shares instead

Telstra Corporation Ltd (ASX: TLS) isn’t the ASX dividend share it used to be. I think there are at least three others I’d prefer to buy.

Telstra’s earnings keeps falling and the dividend could be in danger of another reduction if things don’t turn around. The current Telstra dividend is around half of what it was only a few years ago.

I believe there are other ASX dividend shares that offer much more reliability:

Brickworks Limited (ASX: BKW)

Brickworks is one of the largest construction product businesses in Australia. Whilst it sells a number of products in different categories, the key market is bricks – it’s the biggest brickmaker in the country. Austral Bricks is one of the main businesses. Thankfully, COVID-19 impacts are lifting in Australia and the building industry is recovering. Things aren’t looking quite as promising in the US in the short term, but the distribution of a vaccine could start the recovery there.

The business doesn’t actually rely on its building products for the dividends. Instead, its cashflow from its joint venture industrial property trust and its large holding of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shares pays for the growing dividend.

Brickworks actually recently revealed that once Amazon and Coles Group Ltd (ASX: COL) are paying tenants in the new distribution warehouses, it should lead to rental profit distributions to Brickworks increases by around a quarter.

Brickworks has a trailing, fully franked dividend yield of 3%.

Magellan Financial Group Ltd (ASX: MFG)

Magellan is one of the biggest fund managers based in Australia with funds under management (FUM) recently passing $100 billion. Higher FUM means more management fees, which should mean higher profit because fund managers are pretty scalable businesses – the same investment team can manage $100 billion almost as easily as $99 billion.

It has been increasing its dividend to shareholders for a number of years. The new investment bank called Barrenjoey could also be a smart expansion move to diversify and grow earnings.

The fund manager currently offers a partially franked dividend yield of 3.6%.

MFF Capital Investments Ltd (ASX: MFF)

MFF Capital is a listed investment company (LIC) that mostly focuses on international shares. Its two biggest positions are Visa and Mastercard, which make up more than a third of the MFF portfolio.

I’m attracted to the fact that MFF goes for businesses with good growth prospects and the LIC also has low, fixed operating costs.

It has almost fully deployed its cash pile now into shares, with Amazon being one of the recent picks.

The board has announced a plan to bring the annual MFF dividend up to 10 cents per share. That equates to a fully franked dividend yield of 3.6%.

There are plenty of other ASX dividend shares also worth looking like APA Group (ASX: APA).

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At the time of publishing, Jaz owns shares of MFF Capital and WHSP.

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