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This is where I would spend $10,000 on ASX shares right now

Sebastian Bowen
ATM with Australian $100 bills

Although the S&P/ASX 200 (INDEXASX: XJO) has had a shaky start to the week so far, we are still at levels pretty close to the ASX’s all-time high.

Markets could very well still push higher from here, but the current levels give me pause and insist upon allocating capital in a very careful manner, in my opinion.

So in that vein, here’s where I would invest a $10,000 lump sum in ASX shares this week.

WAM Research Limited (ASX: WAX)

WAM Research is a listed investment company that specialises in finding undervalued mid-cap ASX growth shares and translating these gains into hefty dividend income. WAM Research actually reported its half-year earnings today and announced a 1% increase to its fully franked dividend, which now stands at 4.9 cents per share. That translates to a forward dividend yield of 6.49% (or 9.27% grossed-up) at the time of writing.

Although WAM Research shares are now trading at around a 20% premium to the underlying net tangible assets (NTA) per share, I still think they offer a compelling buy for dividend income this week.

Brickworks Limited (ASX: BKW)

Brickworks is a company that (you guessed it) makes bricks – as well as tiles and other building products. However, the ‘construction materials’ side of the business isn’t all the company does. Brickworks also owns a share of a property trust in conjunction with Goodman Group (ASX: GMG), which provides the company with a reliable income stream that works well to offset the cyclical nature of the construction market.

The company also has a sizeable stake in investment conglomerate Washington H. Soul Pattinson & Co Ltd (ASX: SOL), which again adds additional ballast to the company’s income. The result is a diversified, steady-as-she-goes kind of company, with a remarkably reliable dividend. Thus, I think Brickworks is a great buy in today’s market.

Telstra Corporation Ltd (ASX: TLS)

Tesltra is another reliable dividend payer that I think is looking cheap today. Telstra shares are (at the time of writing) going for $3.74 – which means that the shares are offering a trailing grossed-up dividend of 6.1% (including the special nbn payments).

Telstra reaffirmed this payout just last week, so I think it’s reasonably likely we will continue to see such a nice yield out of Tesltra shares for a while yet. If you’re looking for a non-cyclical stock to add to your portfolio this week, I think Telstra is also a great candidate. Its 5G plans are also very exciting, and might just lead to a sizeable earnings boost down the track (but we’ll have to wait and see).

The post This is where I would spend $10,000 on ASX shares right now appeared first on Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen owns shares of Telstra Limited and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited and Washington H. Soul Pattinson and Company 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. 2020