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3 dividend shares with yields over 5.25%

Tristan Harrison
dividends income piggy bank

Dividends are one of the most pleasing aspects about investing in shares. It’s so satisfying to do no work for the companies you own, yet receive a dividend every six months (or even every quarter).

Not only that, but the income on offer from many ASX shares is a lot higher than you could possibly get from all the various bank accounts that are out there. Even the best ones only offer an interest rate of around 2.8% to 3%.

So, to solve that income dilemma, here are three excellent income shares on the ASX:

Arena REIT No 1 (ASX: ARF)

Arena is a real estate investment trust (REIT) that invests in ‘specialised’ assets in growing sectors that are supported by favourable demographic and economic trends. This has resulted in a bulk of the assets being childcare centres, but it also owns a few medical buildings as well.

It has generated operating earnings growth in each of the last few years thanks to the regular rent increases that it has achieved with its tenants. This has allowed the distribution to steadily increase as well.

It currently has a distribution yield of 5.6%.

Naos Emerging Opportunities Company Ltd (ASX: NCC)

This is a listed investment company (LIC) that invests at the small end of the share market, it look at shares with market caps under $250 million. I like this strategy because there are few investment managers, analysts or indeed regular investors that hunt in the small cap space.

It has been successful with this strategy, since inception its portfolio has delivered a return per annum of 16.27%, before fees. That’s pretty good over a period of five-ish years.

It currently has a trailing grossed-up dividend yield of 8.8%.

Tassal Group Limited (ASX: TGR)

Tassal is Australia’s largest fish company with its large salmon farms in Australia’s waters and also a large wholesale business.

There is a growing demand for healthier food in Australia and overseas, particularly fish. I expect demand will continue to rise, particularly from Asia, for healthy Australian food. Tassal is steadily growing its operating earnings and its dividend over time.

It currently has a grossed-up dividend yield of 5.3%

Foolish takeaway

All three shares have an attractive dividend yield. However, I would have to pick the Naos LIC out of the three because of its large dividend yield and impressive performance to date.

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Motley Fool contributor Tristan Harrison owns shares of ARENA REIT STAPLED. The Motley Fool Australia has no position in any of the stocks mentioned. 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.