I’d definitely be looking at buying ASX dividend shares in July before any further interest rate cuts by the RBA.
Every cut may make savings accounts seem less exciting and the yield on offer from ASX dividend shares more attractive.
Which income-paying businesses would I go for? Ones that have good yields, trade at a good price, and can deliver operating profit growth over time. I’m calling these ASX dividend shares as buys.
Charter Hall Long WALE REIT (ASX: CLW)
This business is one of the largest listed owners of commercial properties in Australia. It’s invested across hotels, telecommunication exchanges, service stations, grocery and distribution centres, and so on. Its portfolio is very diversified, in my opinion.
The ASX dividend share provides a pleasing distribution yield by paying out all of its rental profit each year. Its FY25 distribution of $0.25 per share equates to a distribution yield of 6%, which compares well to savings accounts right now, in my opinion.
Rate cuts can help a business like the Charter Hall Long WALE REIT because of the sizeable level of debt on the balance sheet, reducing interest costs. Hopefully, rate cuts could help the value of the properties too.
The REIT sees annual rental increases, with some tenants having fixed annual increases and other increases being linked to inflation. This can help send the rental income and rental profits higher in the coming years.
MFF Capital Investments Ltd (ASX: MFF)
This is one of my favourite listed investment companies (LICs). The purpose of a LIC is to invest in other businesses and assets to help generate investment returns for shareholders.
MFF’s success has been due to its investments in names like Visa, Mastercard, Amazon and Alphabet. These are some of the leading companies in the world, with their market position, profit and the amount of debt they have.
Pleasingly, this ASX dividend share has been growing its dividend each year over the last few years. Payout growth isn’t certain, but conditions look promising. Plus, MFF has built up a large (accounting) profit reserve to pay dividends for years into the future.
The MFF board of directors has indicated that the company plans to pay an annual dividend of $0.16 per share for the 2025 financial year. This means the current dividend yield, when adding in the bonus of franking credits, is 5.1%.
I’m hopeful the MFF dividend can continue growing in the coming years thanks to ongoing investment returns.
