It’s getting really hard to generate a good amount of income at the moment with how low interest rates are. ASX dividend shares could be the answer. I have a suggestion for $1,000 investing if you’re looking for dividends:
Magellan Financial Group Ltd (ASX: MFG)
Magellan is a fund manager that specialises in infrastructure shares and international shares for investors.
Equities strategies
I like the long-term outlook for the core management business. Magellan’s total funds under management (FUM) has risen to approximately $103 billion, which has risen from $97.7 billion a year ago at the end of November 2019.
Magellan’s long-term investment performance alone should be able to keep growing the FUM if you ignore net inflows. Overall, it keeps seeing net inflows into the business as well.
I’m also excited by the prospect of Magellan’s retirement product(s). Australia is a very wealthy country with one of the largest pension pools of money in the world. If Magellan can win more of that superannuation capital then its FUM could keep rising at a solid pace.
New businesses
The funds asset management side of Magellan is really good. But I’m also intrigued and interested in the move by Magellan to invest in operating businesses.
The first one it announced was a new investment bank called Barrenjoey. This business has a number of high quality individuals involved. It’s going to offer a full range of services.
Barrenjoey also has global bank Barclays as a backer as well. I think this business could really shake things up in the domestic investment bank market.
Guzman y Gomez is another of the investments that Magellan has made recently. The Mexican chain of outlets already has international operations and has plans to one day be a major player across the world.
I think these two businesses, and any future investments, could add a lot of value and profit for Magellan over the long-term.
Dividend
Magellan’s ordinary dividend has been steadily growing over the years.
The special dividend can be lumpy because outperformance fees are also irregular, though Magellan does have a pretty consistent record of outperformance even if it’s just by a small amount in one particular year.
At the current Magellan share price it has a trailing partially dividend yield of 4%. In FY20 it grew the overall dividend by 16%.
Magellan isn’t the only income idea out there. There are other quality ASX dividend shares to consider like Brickworks Limited (ASX: BKW).
