There are a great number of choices on the ASX for shares with dividend yields above 4%. However, the number is much smaller when you start excluding companies for quality and longevity of the dividend.
Here are three of the best choices in my opinion:
WAM Capital Limited (ASX: WAM)
WAM Capital is the flagship listed investment company (LIC) run by Wilson Asset Management. Geoff Wilson and his investment team have proven to be very effective managers.
WAM Capital looks to invest in undervalued growth companies which should beat the market. The LIC does this whilst keeping a healthy amount of the portfolio in cash.
It has increased its dividend every year since the GFC and currently has a grossed-up dividend yield of 9.04%.
Rural Funds Group (ASX: RFF)
Rural Funds is the only real estate investment trust (REIT) on the ASX that purely invests in agricultural property.
I like how diverse its properties are across climates and states. It owns farm types including almonds, macadamias, poultry, cattle, vineyards and cotton. It counts Select Harvests Limited (ASX: SHV) and Treasury Wine Estates Ltd (ASX: TWE) among its quality tenants.
Rural Funds has a large amount of water entitlements for its tenants to use and recently announced it is acquiring another cattle property.
Rural Funds is currently trading with a trailing distribution yield of 4.37%.
Whitefield Limited (ASX: WHF)
Whitefield is one of the oldest LICs on the ASX, dating back to the 1920s.
It invests in the large blue chips on the ASX that we all know like Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Wesfarmers Limited (ASX: WES) and Telstra Corporation Ltd (ASX: TLS).
Whitefield has generated the highest returns out of the LICs that focus on big companies over the last five years. It could continue to outperform, which is why I'm interested in buying some of its shares.
Whitefield is currently trading with a grossed-up dividend yield of 5.21%.
Foolish takeaway
All three shares should be solid choices for income over the next five years. I'm a little bearish about the large end of the Australian share market over the next couple of years, so I'd rather put my capital into Rural Funds and WAM Capital first.
