I am always on the lookout to buy quality ASX dividend shares for my portfolio, at the right price.
One of the great things about dividends is that they take out a lot of the guesswork with shares. Those cash payments just keep rolling in every six months, or even every quarter.
I’m not a big fan of some of the ‘blue chip’ ASX dividend shares like Australia and New Zealand Banking Group Ltd (ASX: ANZ) or Transurban Group (ASX: TCL). I don’t think they have enough growth potential nor were they reliable for consistent dividends in 2020 with COVID.
I believe the below three ASX dividend shares are amazing options and are good value today:
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
WHSP is, in my opinion, the leading dividend stock on the ASX. Having increased its dividend every year since 2000, there is no better candidate for income reliability and growth in Australia.
It’s an investment house. This means it owns a large number of different ASX shares, private businesses and other assets. This combination of things makes it diversified. The portfolio generates solid cashflow each year and gives it a wide array of potential areas to look at for more investment opportunities. A few of its main investments include: Brickworks Limited (ASX: BKW), TPG Telecom Ltd (ASX: TPG), agriculture and resources.
The WHSP share price has dropped around 12% this year, boosting the prospective dividend yield. If the ASX dividend share follows the same pattern as the last several years, and adds another $0.02 to its annual payout, WHSP will offer a dividend yield of 3.3% including the franking credits.
WAM Microcap Limited (ASX: WMI)
WAM Microcap is one of the most exciting listed investment companies (LICs) around in my opinion. As you may have already worked out by the name, the LIC targets the small end of the ASX. There are plenty of relatively undiscovered gems in there that have lots of potential over the next 12 months and beyond.
I’m not going to quote the LIC’s returns since the LIC listed. Past performance is not a reliable predictor of future performance. But, it’s reasonable to say that the returns have been very good. The returns have allowed the ASX dividend share to increase its dividend, pay a good dividend, splash out on special dividends and increase its underlying capital value for shareholders. A diversified small cap portfolio is also an attractive form of diversification.
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I don’t know what the WAM Microcap dividend payout will be in FY22. But if we assume an ordinary dividend of $0.09 per share, that translates into a dividend yield of 6.75% including the franking credits. And that assumes no special dividends this financial year.
Future Generation Investment Company Ltd (ASX: FGX)
Future Generation is another leading LIC. This one is one of the most diversified LICs around in my opinion. Its portfolio is made up of funds of some of Australia’s leading fund managers that invest in ASX shares, such as Bennelong, Paradice and Wilson Asset Management. Each of those funds has a portfolio of shares, so the underlying diversification is strong.
One of the great things about this LIC is that all of those fund managers work for free to enable Future Generation to donate 1% of its net assets each year to youth charities. It’s a wonderful cause.
The Future Generation portfolio has returned an average of 17.5% per annum over the last three years, beating the S&P/ASX All Ordinaries Accumulation Index (ASX: XAO) by an average of 2.7% per annum.
It recently announced its FY21 result for the 12 months to 31 December 2021 and increased the full year dividend to 6 cents per share. That’s a 6.25% dividend yield including the franking credits.