I love owning ASX dividend shares because of how easy it is to receive dividends every year. I’ll talk about two I’d buy now for dividends.
Businesses that can provide a mixture of growth and dividends are great because it means we can grow our wealth as well as our dividend cashflow.
Having said that, these are two I think tick the boxes:
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
WHSP may be the best ASX dividend share at balancing dividend growth and capital growth.
While it’s not guaranteed to continue to grow, the WHSP share price has risen by more than 110% in the last decade and it has grown its annual dividend every year since 2000.
It’s an investment business, so it owns stakes in (or owns outright) various businesses and assets. Some of the main industries it has exposure to include resources, telecommunications, property, swimming schools, agriculture, financial services and credit.
The company is steadily investing in new opportunities, increasing its potential for larger dividends and capital growth.
While it’s not the sort of thing that will shoot the lights out, I believe it can keep growing its underlying value over time for a very long time. The business has been listed for over a century and I wouldn’t be surprised if it’s still here in another century.
Hearts and Minds Investments Ltd (ASX: HM1)
This is a listed investment company (LIC) which donates an amount equivalent to 1.5% of net tangible asset value (NTA) per annum to medical research. In other words, it donates 1.5% of the underlying value of the portfolio (and other assets).
There are no management fees or performance fees involved with this LIC. Hearts and Minds is invested in a portfolio of businesses that have been chosen by fund managers who are working for free to enable the donations. Some fund manager picks are chosen at an annual investment conference, while another segment of the portfolio is decided by a small group of permanent “core fund managers”. Many of the fund managers are not accessible to regular household investors, so this is an intriguing vehicle to get that access.
In FY21 the ASX dividend share paid a fully franked dividend of $0.12 per share and the payout grew to $0.14 per share in FY24. The trailing payout is a dividend yield of 8% including the franking credits.
The latest weekly pre-tax NTA showed the Hearts and Minds share price is at a 20% discount to the reported NTA. I like that large discount.
With good underlying diversification, and with current investments like Brookfield, Nvidia, Formula One Group, Microsoft, Mastercard and Guzman y Gomez, I think I could own this investment forever.
