ASX dividend shares are in hot demand right now with interest rates being so low.
It’s tough to make any money from a bank account, so I think businesses that pay dividends are the way to go.
But which ones? COVID-19 caused a lot of businesses to cut their dividends. But a few kept increasing during 2020, like these two:
Brickworks Limited (ASX: BKW)
Brickworks may be one of the most reliable ASX dividend shares around.
This business hasn’t cut its dividend in over 40 years, so that’s a solid record.
Whilst the construction business is quality, it’s the other assets that attract me the most.
One key asset is Brickworks’ 50% stake of an industrial property trust that it owns along with Goodman Group (ASX: GMG) as a joint venture.
Brickworks receives growing rental profit from this property trust thanks to organic rental growth and the completion of more property projects.
Two big projects that are currently being constructed are high-tech warehouses for Amazon and Coles Group Ltd (ASX: COL). Once they’re completed it’s expected to grow the gross assets from $2.1 billion to $3 billion, as well as growing the rental profit distributions by 25% to Brickworks.
The other key asset is its approximate 40% holding of Washington H Soul Pattinson and Co Ltd (ASX: SOL) which has a diversified portfolio of assets which is steadily growing dividends to shareholders like Brickworks.
Brickworks has a fully franked dividend yield of 3.1% at the current share price.
WAM Microcap Limited (ASX: WMI)
WAM Microcap is a listed investment company that hunts for opportunities with market capitalisations under $300 million.
The LIC has a strong investment track record. Since inception in June 2017, the portfolio has produced a gross return of 23.8% per annum. That’s before expenses, fees and taxes.
Small cap ASX fund managers can add a lot of value compared to the index because there can be hidden gems in this area of the market with higher growth potential and lower valuations.
WAM Microcap has been paying steadily rising ordinary dividends as well as regular special dividends thanks to the strong investment performance.
The LIC has a fully franked ordinary dividend yield of 4.1% at the current share price.