This month could be a great month to go hunting for ASX dividend shares. At the start of October, plenty of businesses look cheap.
I think it’s market declines like this that could prove to be a good long-term buying opportunity after so many prices have dropped significantly.
I love finding opportunities that pay good yields. I’ve already covered one ASX dividend share I’m interested in, but here are two more:
Future Generation Investment Company Ltd (ASX: FGX)
This is an (almost) unique listed investment company (LIC) on the ASX because it doesn’t charge any management fees, even though it operates as a ‘fund of funds’ by investing in the funds of a number of Australia’s leading fund managers.
The fund managers work for free, so that Future Generation can donate 1% of its net assets each year to youth-focused charities.
Future Generation’s overall portfolio returns can be used to both pay a growing dividend and retain the rest for future compounding.
In the latest monthly update it revealed that its gross portfolio performance was better than the ASX share market’s return by an average of 2% per year over the prior three years.
The ASX dividend share is expecting to pay a dividend yield of 8% including the franking credits for the 2022 year.
Wesfarmers Ltd (ASX: WES)
This is one of my clear favourite blue chips because of the diversification and quality within the business. It has a diversified portfolio of businesses from Bunnings, Kmart and Officeworks, to Priceline and Clear Skincare Clinics, as well as businesses within sectors like industrial, energy and fertilisers.
The Wesfarmers business looked very different 50 years ago and in 50 years it could be very different again. I like how the portfolio can change and adapt to future-focused areas of the economy, like lithium and healthcare. This flexibility could be a key way the business keeps performing well in the coming decades.
While it’s not likely to be a high-yielding ASX dividend share, I think it has a long history of being a proven dividend payer. Shareholder returns are a key focus for management.
In FY22, it paid an annual dividend of $1.80 per share. That translates into a dividend yield of 6% including the franking credits. I think the payout could be sizably larger in five years compared to FY22.