With Australian interest rates so low and the economy looking a bit shaky, I wouldn’t want to bet my portfolio on some of the so-called ASX dividend shares to maintain their dividend payments.
Telstra Corporation Ltd (ASX: TLS) is not the dividend king that it once was. National Australia Bank Ltd (ASX: NAB) may cut its dividend again in six months.
However, I believe the below ASX shares will be very reliable dividend payers over the coming years:
Brickworks Limited (ASX: BKW)
The Brickworks dividend has been maintained or grown every single year since 1976, which is an excellent record. I think the dividend can continue to be solid for a number of reasons.
First, its non-cyclical investments provide a good level of dependable cashflow. Its property trust, which it owns a 50% stake of, provides a pleasing level net income and it’s growing with rent reviews and the addition of new developments. I like that the property trust is focused on industrial properties that benefit from eCommerce – a growing industry.
Its holding of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) has done superbly and provides a dependable dividend to Brickworks every six months.
The Brickworks Australian Building Products segment is suffering from disappointing activity but this will turn around at some point in the future. Meanwhile, the Glen Gery acquisition in the US opens up a large growth avenue for the long-term.
Brickworks currently has a grossed-up dividend yield of 4.9%.
Australian United Investment Company Ltd (ASX: AUI)
AUI is one of the oldest listed investment companies (LICs) on the ASX. It has been operating since 1953 and aims to give shareholders income and capital growth over the longer-term.
Since 1993 it has maintained or grown its dividend every single year, although growth has slowed since the GFC.
With an expense ratio of 0.10% of the AUI portfolio, it’s one of the cheapest ways to be invested broadly into the ASX. It certainly matches some of the best ASX ETFs available right now in terms of costs.
It is invested in all of the leading ASX blue chips including Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group (ASX: ANZ), CSL Limited (ASX: CSL) and Transurban Group (ASX: TCL).
AUI currently has a grossed-up dividend yield of 6%.
I think each of these ASX dividend shares are excellent choices for income over the next decade or two. However, I prefer the idea of owning Brickworks shares because AUI has a sizeable part of its portfolio invested in the major ASX banks, which I’m quite wary of due to falling Australian house prices. I like Brickworks’ diversified earnings and assets.
Another group of reliable ASX dividend shares are these top-notch income stocks, I’d love to buy more of one in-particular for my portfolio.
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Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of and has recommended Telstra Limited, Transurban Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of National Australia Bank Limited. The Motley Fool Australia has recommended Brickworks. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019