ASX dividend shares can be a really good good way to generate income from a portfolio.
It’s pretty difficult to find good sources of income at the moment, with how low interest rates have been pushed.
But I reckon these two ASX dividend shares can help with that:
Brickworks Limited (ASX: BKW)
Brickworks is one of the most accomplished ASX shares for dividends.
It hasn’t cut its dividend for over 40 years. That’s great income stability in my opinion.
That consistency hasn’t been funded by the building products divisions, as good as they are.
The Brickworks dividend has been rock solid all of these years because of its shareholding of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL).
If you haven’t heard of WHSP, it’s a very old investment house that has been going for over a century. It’s also a really good ASX dividend share.
WHSP has a diversified portfolio across many sectors including telecommunications, resources, property, pharmacies, financial services, listed investment companies (LICs), agriculture and swimming schools.
Brickworks also has a 50% stake of a very impressive industrial property trust along with Goodman Group (ASX: GMG). The idea behind that is where Brickworks sells its excess land into the trust, and then the property trust builds high quality industrial assets on the land. The trust is steadily growing its net rental profit, which helps fund higher dividends for the ASX dividend share.
Brickworks currently has a fully franked dividend yield of 2.4%.
Future Generation Investment Company Ltd (ASX: FGX)
Future Generation is a listed investment company (LIC) with a very big difference. There are no management fees or performance fees involved, all of the fund managers that it invests in work pro bono (free). That’s so that the LIC can donate 1% of its net assets each year to youth charities.
Some of the fund managers it’s invested in includes Tribeca, Centennial, Firetrail, Wilson Asset Management, Eley Griffiths, Regal and Paradice. This group of managers are meant to be among the best in Australia.
With the different investment styles, the ASX dividend share’s portfolio has managed to deliver outperformance of the broader ASX with lower volatility. Since inception in September 2014, the Future Generation portfolio has delivered an average return per annum of 10.6%, compared to the S&P/ASX All Ordinaries Accumulation Index average return of 8.5% per year.
It has been slowly but steadily growing its dividend since it listed thanks to the investment returns of the portfolio.
The Future Generation share price of $1.37 is currently at a decent discount to the net tangible assets before tax of $1.43.
It currently has a fully franked yield of 3.8%.
I also have my eyes on some other ASX dividend shares for potential income.
