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3 ASX dividend shares I’d buy with $3,000

I think there’s some really great ASX dividend shares available to Aussies to buy.

It’s really tricky to make any decent income at the moment from most types of assets.

But I believe that these businesses are going to be pleasing income options in the years ahead:

WAM Microcap Limited (ASX: WMI)

WAM Microcap is turning out to be one of the leading dividend payers on the ASX in my opinion.

It’s a listed investment company (LIC) which has been generating impressive investment returns in the years since it listed. Past performance is no guarantee of future results, though. The LIC invests in small businesses in the ASX which may have good growth potential.

The great thing about LICs is that they can turn some of the investment profit into dividends and retaining the rest to grow the capital value of WAM Microcap over time.

It recently announced a 25% increase to its dividend. That translates into an annualised dividend yield of 7.3% including franking credits. That’s a solid start for an ASX dividend share in my opinion.

Adairs Ltd (ASX: ADH)

Adairs is a business which has plenty of total return potential in my opinion.

One of the benefits of a cheap earnings valuation is that it boosts the dividend yield. Utilising the estimates on CommSec, Adairs is expected to pay a dividend of $0.27 per share in FY23. That represents a dividend yield of 12.4%, including the franking credits.

Adairs has a number of growth plans.

It just acquired the business Focus on Furniture. This expands Adairs’ exposure to the large furniture market. Focus can grow its national store network and grow online sales.

The ASX dividend share is planning to upsize some of its Adairs stores, which are significantly more profitable than the smaller ones.

Online sales growth is also driving the long-term value of Adairs. It gives customers more flexibility and utilises the new national distribution centre it just opened (which should save millions of dollars in costs, whilst also making the business more efficient).

Online-only furniture business Mocka is growing well. In HY22 its revenue has grown by 22.8%.

CommSec numbers put the Adairs share price at 8x FY23’s estimated earnings.

Pengana Capital Group Ltd (ASX: PCG)

Pengana is a relatively small fund manager.

It offers a number of investment strategies including ASX shares, international shares, property and private equity.

The funds under management (FUM) continues to grow over the longer-term. At 30 June 2021, the FUM was $$3.974 billion. At 31 December 2021 it had $4.170 billion of FUM. It’s seeing a steady flow of inflows as more people want Pengana want to manage some of their money.

One of the benefits of fund managers is that they require very little capital to grow. The investment team can manage another $100 million relatively easily.

Fund managers are scalable too, meaning new FUM can largely add to net profit before tax. This is good for the dividends as well.

I think Pengana is an interesting ASX dividend share which has a trailing dividend yield of 9.1% including franking credits.

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report — or get it emailed to you — for FREE by CLICKING HERE NOW or the button below.

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At the time of publishing, Jaz owns shares of WAM Microcap.
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