Motley Fool Australia

3 dividend shares I want to buy

Jackpot Money Rain

Dividends are one of the best things about owning shares. You get to receive cash for no effort, just watch the income roll in.

Income is a good sign that the business is profitable, that management want to reward shareholders and that they won’t waste capital trying to buy whatever they can at any cost to fund more growth.

Here are three shares I’d like to add to my income portfolio:

Arena REIT No 1 (ASX: ARF)

Arena is one of the biggest REITs that focuses on leasing out childcare properties.

The number of babies being born in Australia continues to boom and this should lead to an increase in attendance at childcare centres. This, combined with Australia’s property boom, should see Arena continue to be a strong income choice.

Arena currently has a distribution yield of 5.48%.

Clime Capital Limited (ASX: CAM)

Clime is one of the smaller listed investment companies (LIC) on the ASX, but it has a big dividend yield.

This LIC looks at all areas of the ASX for investment ideas and also invests a small part of the portfolio overseas. Some of its largest positions include Ramsay Health Care Limited (ASX: RHC), Collins Foods Ltd (ASX: CKF) and Alphabet Inc.

Clime currently has a grossed-up dividend yield of 8.14%.

Australian Foundation Investment Co. Ltd (ASX: AFI) (AFIC)

This LIC is at the other end of the scale, it’s the largest one on the ASX.

I often say that most Australian investors have too much exposure to the large end of the Australian market but I may actually have too little.

Instead of trying to pick my favourite bank I think the best route would be to buy a low-cost LIC that does that investing for me, such as AFIC.

It currently has a grossed-up dividend yield of 5.77%.

Foolish takeaway

None of these shares are likely to be clear market-beaters but I would like all of them to be a small part of my portfolio in time.

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Returns As of 6th October 2020

Motley Fool contributor Tristan Harrison owns shares of Ramsay Health Care 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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