There are a number of quality ASX dividend shares that can give reliable income.
Shares can offer a much better level of income than keeping cash in the bank, though they are obviously volatile (to say the least).
But not every business which has a decent yield is guaranteed to be good options for income. Plenty of dividends were cut during 2020. Westpac Banking Corp (ASX: WBC) and Sydney Airport Holdings Pty Ltd (ASX: SYD) were two culprits.
I think these two ASX dividend shares would be good long term options:
Brickworks Limited (ASX: BKW)
Brickworks has been one of the most reliable businesses for income over the last four decades. It hasn’t cut its dividend for over 40 years.
How can a construction company deliver such reliable income returns? Building products go through cycles of demand, there are peaks and troughs.
Don’t get me wrong, Brickworks has a quality group of construction product businesses. Austral Bricks, Austral Masonry, Bristile Roofing and Australia Precast are some of the main names.
The Australian construction industry is seeing a recovery after many COVID-19 impacts.
What keeps the Brickworks dividend going is its major share holding of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shares. Brickworks has owned WHSP shares for decades.
WHSP has a diversified portfolio of different investments including telecommunications, building products, resources, financial services, pharmacies and agriculture.
Brickworks also has a 50% stake of a high quality industrial property trust alongside Goodman Group (ASX: GMG). This trust is currently building two huge warehouses for Amazon and Coles Group Ltd (ASX: COL). When these warehouses are finished it will increase the rental profit of the trust by at least 25%.
The dividends from WHSP and the distributions from the property trust fund the Brickworks dividend, without needing any contribution from the construction side of things.
It currently has a fully franked dividend yield of around 3%.
Magellan Financial Group Ltd (ASX: MFG)
Magellan is a quality ASX blue chip business in my opinion.
The core, key part of the business is funds management for both regular investors (like you and I) as well as for institutions.
Most of the funds that it manages are focused on US shares, so the funds under management (FUM) growth has been hampered by the strengthening Australian dollar in recent months.
The FUM total has still reached $103 billion. It has grown a lot over the past decade and I think the fund manager can continue to attract more funds over the coming years thanks to its solid investment performance. I also believe that the retirement product(s) that Magellan is planning to launch could prove to be very popular.
One of the most positive reasons to believe that Magellan can keep growing dividends is that it’s making investments into operating businesses. So far the main investments have been a new investment bank called Barrenjoey and a growing Mexican restaurant chain called Guzman y Gomez.
In FY20 Magellan grew its total dividend by 16% to 214.9 cents per share. At the current Magellan share price it has a partially franked dividend yield of 4.2%.
