If I were looking for income then I’d be willing to buy the ASX dividend shares I’m about to mention.
It’s hard to come by income right now with how stingy banks are being with their interest rates on the saving accounts.
These are two ASX dividend shares I’d definitely think about for my portfolio:
WAM Microcap Limited (ASX: WMI)
WAM Microcap is a listed investment company (LIC) which invests in small cap ASX shares.
There are lots of businesses outside of the ASX 200 which are investable, but not many investors like to look at shares that small. Which leaves many of the opportunities to niche investors like WAM Microcap.
Whilst a LIC like this does come with higher fees than index fund fees, the net performance and dividends can also be better too.
Just looking at the ordinary dividend, WAM Microcap is expecting to pay a dividend of 8 cents per share in FY21, which equates to a dividend yield of 6% including the franking credits.
The ASX dividend share has also been paying special dividends to reward shareholders and keep the size of the LIC at a manageable size for the small cap market.
The gross returns of the WAM Microcap portfolio have been very strong. Excluding fees, expenses and tax, the portfolio has returned an average of 23.8% per year since it started, which is a high level of performance in anyone’s book.
Brickworks Limited (ASX: BKW)
Brickworks is one of the best ASX dividend shares around in my opinion.
If you’re 43 years old or younger, there hasn’t been a dividend cut from Brickworks in your lifetime.
There are positive signs for the company’s building products businesses in Australia as the recession lifts, and as the COVID-19 vaccine is distributed in the US it should to better earnings from its American business.
It’s also looking good for Brickworks’ joint venture (JV) industrial trust as more businesses look for e-commerce and logistics assets to help their capabilities grow. Right now, Coles Group Ltd (ASX: COL) and Amazon are incoming tenants for two large warehouses that the JV is building. Once complete, the JV should increase distributions to Brickworks by at least 25%.
The huge holding of Washington H Soul Pattinson and Co Ltd (ASX: SOL) shares continues to pay more dividends (per share) to Brickworks as WHSP’s own portfolio and cashflow grows. WHSP has actually grown its dividend every year since 2000, which helps Brickworks, and it’s expecting to grow the dividend again in 2021. Growing the dividend is one of WHSP’s aims.
Including the franking credits, Brickworks has a dividend yield of 4.5%.
