Australia Markets open in 6 hrs 44 mins

3 ASX dividend shares to buy for reliable income

Tristan Harrison

A lot of people rely on ASX dividend income to fund their life.

It could be retirees who have worked hard and now want to enjoy the fruits of their labour. It could be someone who was injured and received a large payout. It could be a lucky person who inherited a lot of money. It could a regular person who’s building wealth and wants an income stream.

You won’t get decent income from bank accounts or bonds these days. The best place to find good income is the ASX share market. Here are three dividend ideas:

National Storage REIT (ASX: NSR)

National Storage offers a trailing distribution yield of 5.4%.

It’s Australia and New Zealand’s largest self-storage business, yet management are still focused on expanding its property portfolio with a strong pipeline of opportunities. It’s actively considering around $100 million of acquisition targets.

The self-storage industry is highly fragmented and there is high demand for storage units due to high real estate costs and smaller property sizes.

Magellan Global Trust (ASX: MGG)

Magellan Global is a listed investment trust (LIT) that aims to pay a distribution yield of 4% of its underlying assets.

It invests in the highest-quality international businesses like Alphabet (Google), Facebook, Apple, Starbucks, Visa and HCA Healthcare. The Magellan Financial Group Ltd (ASX: MFG) investment team have a long track record of beating the market after fees.

Many Australian investors could do with getting international share diversification, Magellan Global could be one of the best ways to do that.

InvoCare Limited (ASX: IVC)

InvoCare currently pays a trailing grossed-up dividend yield of 5.6%.

The largest funeral provider in Australia and New Zealand has one of the best dividend records on the ASX. It has increased its dividend each calendar year since 2006.

It’s currently undertaking a large renovation program to improve its locations for families, which should result in InvoCare being able to charge higher prices.

Death volumes are expected to grow by 1.4% per annum between 2016 to 2025 and then increase by 2.2% per annum from 2025 to 2050. Combined with slow-and-steady funeral price increases it could lead to long-term earnings per share (EPS) growth and dividend increases.

Foolish takeaway

Each of these shares offers better income potential than what you can currently get from bank accounts or bonds. At the current prices I’m personally attracted to InvoCare – it’s close to its 52-week low and I think the current issues are only short-term.

5 Companies we like better than InvoCare

When ace stock picker Scott Phillips has a buy recommendation, history suggests it can pay to listen.

Scott recently revealed what he believes are the five best ASX stocks for investors to buy right now… and InvoCare wasn’t one of them! That’s right — he thinks these 5 stocks are even better buys.

See the 5 stocks

More reading

Motley Fool contributor Tristan Harrison owns shares of InvoCare Limited and MAGLOBTRST UNITS. The Motley Fool Australia has recommended InvoCare Limited and National Storage REIT. 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.