The Motley Fool

Want solid income? Try these shares

The average portfolio of an investor looking for income will likely consist of Telstra Corporation Ltd (ASX: TLS), Wesfarmers Ltd (ASX: WES), Commonwealth Bank of Australia (ASX: CBA) and perhaps the other big four banks as well.

The problem with this strategy is that there’s very little diversification and not much growth on offer either.

If you still want exposure to all the big blue chips but with a lot more diversification and a bit of growth, then listed investment companies (LICs) could be what you’re after.

Some of the oldest and most reliable LICs own the same large blue chips that I mentioned above.

Whitefield Limited (ASX: WHF), Australian Foundation Investment Co. Ltd. (ASX: AFI) (AFIC), Milton Corporation Limited (ASX: MLT), Argo Investments Limited (ASX: ARG) and Australian United Investment Company Ltd (ASX: AUI) are all options in the large cap space. These LICs all have grossed-up dividend yields of around 6%, which makes them all good options.

There are also other LICs that focus on smaller companies that also generate good dividend income for investors. Grossed-up yields are above 7% with LICs like Clime Capital Limited (ASX: CAM), WAM Capital Limited (ASX: WAM), WAM Research Limited (ASX: WAX) and Hunter Hall Global Value Ltd (ASX: HHV).

All of these LICs have portfolios with at least twenty holdings, which makes them just as safe if not safer than the individual blue chips.

Foolish takeaway

If you’re not going to go for growth shares then I think investing in LICs is the next best thing. Cheap costs, good returns and good income is a combination which is hard to beat.

If you do want to go the growth share route then these hot stocks should beat most of the LICs I mentioned.

Top 3 ASX Blue Chips To Buy In 2017

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for 2017."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

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Motley Fool contributor Tristan Harrison owns shares of WAM Capital Limited and WAM Research Limited. The Motley Fool Australia owns shares of Telstra Limited and Wesfarmers Limited. 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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