ASX dividend shares can always be a good investment because of the cash they send to shareholders every year.
I’d like to see a good ASX dividend share increase the payout annually to shareholders, though that’s not always possible. I also want to see a good yield, because I can get a good rate from savings accounts these days. I’d go for the below two ideas.
WCM Global Growth Ltd (ASX: WQG)
This is a listed investment company (LIC) which is run by the fund manager WCM from California.
The investment team try to target global companies that have growing competitive advantages and an improving return on equity (ROE).
High interest rates caused some pain to the valuations of high-quality global shares, but from this lower valuation point I think the portfolio can return to outperformance.
The board of WCM Global Growth is currently increasing the dividend every single quarter. The next four dividends to be declared could amount to a dividend yield of 8% when including the franking credits.
The ASX dividend share’s share price is trading at a 17% discount to the latest weekly NTA before tax – the underlying value of the portfolio.
WAM Microcap Limited (ASX: WMI)
This is another LIC – I think the LIC space is an attractive space to be looking at for dividends at the moment.
The small cap end of the market has been treated more harshly than the larger end in my opinion, so I think it could see a stronger recovery when economic conditions improve.
The WAM Microcap share price has fallen over 30% from October 2021, and the dividend has continued increasing.
It has increased its annual ordinary dividend each year since it started paying a dividend in 2018. Using the annual dividend per share of $0.105 in FY23, it currently has a dividend yield of 10.7% including the franking credits, which is a huge yield.
We can’t expect large capital growth when it’s paying such large dividends, but I think the next five years of returns could be solid for the ASX dividend share.
