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2 leading ASX dividend shares to think about next week

ASX dividend shares can be a really useful way of finding investment income.

Bank saving accounts definitely have their place, but they aren’t going to generate much income at the moment.

That’s why I believe these two ASX dividend shares could be good ones to consider:

WAM Leaders Ltd (ASX: WLE)

I think that WAM Leaders Ltd (ASX: WLE) is one of the leading listed investment companies (LICs) that focuses on the large ASX shares.

However, it’s important to note that WAM Leaders is not a passive investment vehicle. It is more active, going in and out of some shares, and changing position sizes of other holdings.

It’s the active portfolio management that has enabled WAM Leaders to outperform the S&P/ASX 200 Accumulation Index by an average of 7.7% per year over the last three years with an average return of 17.6% per year. However, it’s important to note that return is the gross performance before fees, expenses and taxes.

It owns lots of the biggest ASX shares in the top 20 in its portfolio, ones you would expect like Commonwealth Bank of Australia (ASX: CBA). So I’m going to tell you some of the shares in the top 20 you may not have expected like: Ampol Ltd (ASX: ALD), Crown Resorts Ltd (ASX: CWN), Insurance Australia Group Ltd (ASX: IAG), Oil Search Ltd (ASX: OSH), QBE Insurance Group Ltd (ASX: QBE), Ramsay Health Care Limited (ASX: RHC), South32 Ltd (ASX: S32), Scentre Group (ASX: SCG) and Star Entertainment Group Ltd (ASX: SGR).

As for WAM Leaders being an ASX dividend share, I think it has a good track record. It has increased its dividend every year since it started paying one a few years ago after listing, including through COVID.

WAM Leaders currently has a fully franked dividend yield of 5.4%. Including the franking credits within the yield, that’s a total yield of 7.7%.

In terms of the valuation, it is currently trading slightly higher than its August 2021 net tangible assets (NTA) before tax.

Brickworks Limited (ASX: BKW)

I think that Brickworks is one of the best ASX dividend shares around. Not because of the yield, which is okay, but the defensiveness and growth record of that dividend.

Whilst best known for its construction products, it’s the defensive assets that Brickworks owns that interests me the most.

The biggest contributor to the underlying value of the company is its holding of Washington H. Soul Pattinson and Co Ltd (ASX: SOL) shares. When Brickworks released its FY21 result it said that the WHSP shares were worth $3.37 billion.

The investment house owns a strong, diversified portfolio across several different industries including telecommunications, property, resources, healthcare, agriculture, financial services, listed investment companies (LICs), swimming schools, a focused small cap portfolio and a focused large cap portfolio.

WHSP has been growing its dividend for 20 years in a row, providing great income security for Brickworks. I think WHSP is another of the great ASX dividend shares.

The other asset that I’m really interested in is the industrial property trust that Brickworks owns half of.

This trust is a joint venture which is building on excess Brickworks land. In this COVID era, the trust is building distribution centres which are seeing strong rental returns as well as capital growth in this COVID era.

It has a big pipeline of projects for the next few years which can significantly increase the rental profit of the trust, driving the cashflow higher, funding higher dividends.

Between these two assets, Brickworks has a very stable asset base which is providing steadily growing cashflow for Brickworks to pay a growing dividend.

The ASX dividend share hasn’t cut its dividend for four and a half decades. That means reliability and growth in all that time.

Using the FY21 dividend, it has a fully franked dividend yield of 2.5%. Including the franking credits within the yield, it’s 3.6%.

If you're anything like me, you might be thinking now is a good time to have cash 'sitting on the sidelines'.

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At the time of publishing, Jaz owns shares of WHSP.