Dividends are one of the most pleasing aspects about investing in shares. It's so satisfying to do no work for the companies you own, yet receive a dividend every six months.
Not only that, but the income on offer from many ASX shares is a lot higher than you could possibly get from all the various bank accounts that are out there. Even the best ones only offer an interest rate of around 2.8% to 3%.
So, to solve that income dilemma, here are three excellent income shares on the ASX:
WAM Leaders Ltd (ASX: WLE)
WAM Leaders is one of the latest listed investment companies (LICs) launched by Wilson Asset Management. It focuses on the biggest shares on the stock market in the ASX200, it aims to deliver investors capital growth and a solid stream of fully franked dividends.
It has beaten its index benchmark by an average of 2.5% per annum since inception in May 2016. It currently has an expected grossed-up dividend yield of 6.21%.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
Soul Patts is Australia's longest-running investment company, having operated for over a century. It takes large stakes in businesses it believes will create good long-term returns.
It invests in large businesses like TPG Telecom Ltd (ASX: TPM) and Brickworks Limited (ASX: BKW), as well as smaller businesses like National Veterinary Care Ltd (ASX: NVL).
I think it's such a good dividend stock because it has increased its annual ordinary dividend every year since 2000. It currently has a grossed-up dividend yield of 4.22%.
National Storage REIT (ASX: NSR)
National Storage is Australia and New Zealand's largest self-storage provider. Commercial property is a good way to generate decent income and growth because there isn't a huge gaggle of 'property experts' spruiking commercial property as the way to get rich whilst loading up on debt.
Residential property prices are so high, which means someone could have to pay more than $100,000 for an extra room in a house to store items. National Storage's offering is very good value when considered in this way.
The real estate investment trust (REIT) currently has a distribution yield of 5.85%.
Foolish takeaway
I'm a fan of all three businesses, they would fit well into any income investor's portfolio. However, I think businesses that rely on asset prices and debt could face near-term problems with rising interest rates, so I'm avoiding National Storage for now.
WAM Leaders is a good LIC, but I prefer the other WAM LICs because they have a bigger investment universe with small caps included. Therefore, Soul Patts is the only one I'd personally contemplate buying today.
