I am a big fan of finding ASX dividend shares that can provide good dividend income and achieve long-term capital growth. May 2022 could be an opportune time to buy shares of some of the leading candidates.
In my opinion, these are two of the best long-term options for dividend reliability and growth:
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
This is one of my favourite ASX dividend shares. It’s an investment business that is invested in a number of ASX shares and private businesses.
Some of its most significant holdings include TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), New Hope Corporation Limited (ASX: NHC), Pengana Capital Group Ltd (ASX: PCG), Tuas Ltd (ASX: TUA) and Macquarie Group Ltd (ASX: MQG).
The ASX dividend share’s portfolio generates annual cashflow for the business. With a lot of that, it pays a growing dividend. The annual dividend has been increased every year since 2000. With the cashflow not paid out as a dividend, it can re-invest into more opportunities.
At the last WHSP share price, it has a trailing dividend yield of 3.4%, including the franking credits.
WAM Microcap Limited (ASX: WMI)
WAM Microcap is a listed investment company (LIC) that invests in small cap shares.
I think that small businesses have the potential of delivering good returns, if chosen wisely. Smaller businesses generally have more growth potential and are less well-known to investors, so they could be valued at cheaper earnings multiples.
While past performance is not a reliable indicator of future results, I think that the WAM Microcap investment team has demonstrated good investing skills through economic cycles since it was listed a few years ago. It has been steadily growing its ordinary dividend while also paying increasing special dividends as well (though special dividends are less likely to continue than the normal dividend).
At certain points, during market crashes, I think it can be very fruitful investing to consider a small cap fund like WAM Microcap.
Assuming no special dividends in this financial year, the WAM Microcap dividend yield, including franking credits, is 7.7%.
