4 great income shares every dividend investor should have

Dividends have a uniquely important place in returns for Australian investors. The franking credits that are attached to a dividend when it’s paid materially boost the overall yield and return.

The best dividend stocks to own in my opinion are the ones that have good management and try to increase the dividend for shareholders every year.

Here are four of the best dividend shares on the ASX in my opinion:

Ramsay Health Care Limited (ASX: RHC)

Ramsay has increased its annual dividend every year since 2000.

It has utilised the ageing demographics successfully so far and there could be at least a couple more decades of strong growth ahead.

With the dividend and earnings per share increasing at double digits every year, Ramsay could be a great share to hold for the long-term.

Ramsay is currently trading at 27x FY17’s estimated earnings with a grossed-up dividend yield of 2.51%.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Patts has been increasing its annual ordinary dividend every year since 2000.

Management are highly aligned to shareholders as they themselves own a large amount of the shares. In fact, a good portion of management are from the same few families that have been serving Soul Patts for several generations.

It is often likened to Australia’s version of Berkshire Hathaway for good reason.

Soul Patts is currently trading at 16x FY17’s estimated earnings with a grossed-up dividend yield of 4.15%.

InvoCare Limited (ASX: IVC)

InvoCare has been increasing its annual dividend every year since 2006.

The expected number of deaths is predicted to increase consistently over the coming decades, which could be a long tailwind for the market-leading funeral operator.

InvoCare is currently trading at 28.5x FY17’s estimated earnings with a grossed-up dividend yield of 4.01%.

WAM Capital Limited (ASX: WAM)

WAM Capital has increased its dividend every year since the GFC.

This is the flagship listed investment company run by Geoff Wilson and his high-performing investment team.

Its strategy is perfect for investors seeking income and growth as it pays out most of its investment return each year as a fully franked dividend.

It’s currently trading with a trailing grossed-up dividend yield of 9.04%.

Foolish takeaway

I think all four of these dividend shares would make great additions for investors seeking income.

At the current prices, I think WAM Capital is the clear winner because of the recent drop in share price, but all four should make great long-term investments.

For investors looking for perhaps the best growing dividend stock with a big yield, this business could be the best pick of them all.

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The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Washington H. Soul Pattinson and Company Limited. Motley Fool contributor Tristan Harrison owns shares of InvoCare Limited, Ramsay Health Care Limited, WAM Capital Limited, and Washington H. Soul Pattinson and Company Limited. 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 Bruce Jackson.

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