There are some outstanding ASX dividend shares that investors can buy for investment income.
I think that shares are the best way to go for yield.
However, I wouldn’t buy any business just because it pays a dividend or distribution.
I would only go for ones that look good value and have a history of paying reliable and growing dividends.
These are three that I’d love to buy next week:
Washington H. Soul Pattinson and Co Ltd (ASX: SOL)
WHSP may be one of the best ASX dividend shares around. It has grown its dividend every year since 2000. That means it has the best dividend growth streak going on in the ASX.
It has achieved this, and continues the streak, with a diversified portfolio across different sectors including building products, telecommunications, resources, agriculture, swimming schools, financial services and property.
Its latest report, the FY22 half-year result, included an 11.5% increase to the interim dividend to $0.29 per share.
Including franking credits, the WHSP grossed-up dividend yield is 3.4%.
MFF Capital Investments Ltd (ASX: MFF)
This is one of my preferred listed investment companies (LICs).
There’s some excellent advice from the investment duo Warren Buffett and Charlie Munger. One of the ones relevant with MFF is: buy great businesses at fair prices.
MFF Capital Investments is invested in a portfolio of great global blue-chip shares.
Some of its biggest positions include Visa, Mastercard, Amazon, Alphabet, Home Depot, Microsoft and so on.
While none of these names are likely to shoot the lights out in one year, I think that the ASX dividend share’s portfolio can produce solid compound returns over the long-term.
MFF Capital is looking good value, in my opinion. At the current MFF Capital share price of $2.60, the latest weekly net asset value (NAV) of $3.20 implies a 19% discount.
MFF Capital plans to grow its half-year dividend to $0.05, translating into an annualised $0.10 per share, translating into a future dividend yield of 5.5%, including the franking credits.
Brickworks Limited (ASX: BKW)
Brickworks is the other ASX dividend share that I’m really interested in.
One of the main reasons that I like Brickworks is that it usually trades at a nice discount to its underlying net asset value.
A big part of that NAV is WHSP shares. There’s a cross-holding between the two businesses. Brickworks benefits from the diversification, growth and dividends of WHSP.
I don’t mind the building products divisions, but they are not essential to my ASX dividend share thesis for Brickworks.
It’s also the property assets that I really like. This is where Brickworks sells land it doesn’t need any more into a trust that it owns 50% of, with Goodman Group (ASX: GMG) owning the other 50%. Industrial property facilities are built on that land.
In response to consumer trends such as online shopping, industrial real estate valuations are increasing. In the Brickworks half-year report, it revealed a $228 million revaluation profit. It also reported a development profit of $115 million thanks to the completion of the vast new Amazon facility at Oakdale West.
As developments are completed, rental income from the trust grows. More than 180,000 square metres of additional gross lettable area is pre-committed and under construction.
Net trust income for the half was $17 million, up 7% on the prior corresponding period. Brickworks’ share of the property trust’s net assets is now $1.26 billion.
Including the franking credits, Brickworks has a dividend yield of 3.7%
