2 of my favourite income shares to hold for the ultra-long-term

Argo Investments Limited (ASX:ARG) is diversified and offers a 5.6% yield.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Most of us try our hand at picking our own stocks at one point or another. It can be fun and interesting even if we don't beat the market, and incredibly rewarding if we do. In either case, many of us will still have a group of core portfolio holdings that we plan to never sell. This may include a couple of index funds or listed investment companies (LICs).

Here are a few of my favourite LICs that I plan to hold in my core portfolio for the very long term…

Argo Investments Limited (ASX: ARG)

This company has been around since 1946 providing investors with a growing dividend stream as well as capital growth. Argo holds a portfolio of approximately 100 shares in many different sectors, so the LIC has exposure to a wide range of businesses in the economy.

The main priority is providing shareholders a solid and growing income over time, which Argo has successfully delivered. In the last 5 years the dividend has been increased by 3.6% per annum. Currently shares trade on a grossed-up dividend yield of 5.64%.

QV Equities Ltd (ASX: QVE)

QVE has only been listed for a few years so far, but the investment manager – IML – has been managing unlisted funds for 20 years. IML has provided strong returns across all of its funds and reports performance after fees, which is refreshing and increasingly rare for active managers.

QVE's mandate is to invest in a portfolio of 20-50 shares outside the top 20, which means it can provide great diversification for investors who are heavily exposed to the big banks and Telstra Corporation Ltd (ASX:TLS) for example.

The manager has underperformed the benchmark since listing, but I'm confident in IML's investment process and believe it will provide solid returns and a growing income stream over the only time-frame that matters – the long term.

Shares currently trade on a grossed-up dividend yield of around 5%. In addition, when comparing its share price to the underlying portfolio, its trading at a discount to NTA of 5%.

Foolish takeaway

Both of these LICs provide diversified sources of income and are part of my core portfolio. While I do hold individual stocks too, the bulk of my dividend income will be sourced from holdings like this for the very long term. These companies are run by conservative managers and their investment philosophy matches my own – to invest across a wide range of businesses for a growing dividend stream.

Motley Fool contributor Dave Gow owns shares of Argo Investments Limited, QV Equities Limited, and Telstra Limited. The Motley Fool Australia owns shares of and has recommended Telstra 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 Scott Phillips.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »