3 dividend shares for easy income

These 3 dividend shares could create a comfortable income stream.

| More on:
a woman

You鈥檙e reading a free article with opinions that may differ from The Motley Fool鈥檚 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

The income you can get by leaving money in the bank is pretty bad these days. It's crazy to think that with a million dollars in the bank the most you might be able to get is $30,000, with most accounts offering less of a return than that.

So, what should an income-seeking investor do?

I think Australian shares are the answer. Many experts agree that, on the income side of things, Australian share investments are hard to match for the income they can produce.

Here are three ideas to generate good income for your lifestyle:

Rural Funds Group (ASX: RFF)

Rural Funds is currently the only purely agricultural real estate investment trust (REIT) on the ASX. It owns farms in a variety of different food sectors including cattle, vineyards, almonds, macadamias, cotton and poultry.

I think it's a really good income option because it has rent rises built into all of its contracts with indexation linked in some way to either a 2.5% increase or CPI increase each year. That allows management to predict that Rural Funds can increase its distribution each year by 4% over the long-term.

It currently has a distribution yield of 5%.

Magellan Global Trust (ASX: MGG)

This is a listed investment trust (LIT) run by the high-performing Magellan Financial Group Ltd (ASX: MFG). It invests in what it thinks are the highest quality businesses in the world, most of which are listed in the US.

Its largest holdings include Facebook, Alphabet (Google), MasterCard, Visa, Wells Fargo, Lowe's and Apple.

Magellan Global Trust has a target of a 4% yield of its NAV and also looks to provide shareholders with solid capital growth.

NAOS Ex-50 Opportunities Company Ltd (ASX: NAC)

This is a listed investment company (LIC) operated by Naos. It looks to invest in mid-cap shares that are outside of the S&P/ASX 50, which should provide more growth than Australia's biggest blue chips but also be relatively safer than small caps.

Over the past three years its portfolio has returned an average of 15.25% per annum before fees and it has increased its dividend each year since the second half of FY15. The recent changes to its benchmark make it a more compelling choice.

It currently has a projected grossed-up dividend yield for FY18 of 8.1% which will soon be paid quarterly instead of every six months.

Foolish takeaway

All three shares are trading at better value than they were in recent history. At the current prices it's hard to choose a winner, Naos has a much bigger yield but the other two may create stronger total returns over the medium-term.

Motley Fool contributor Tristan Harrison owns shares of MAGLOBTRST UNITS and RURALFUNDS STAPLED. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. 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 鈴革笍 Investing for Income

NAB share price Broken white piggy bank on red background
鈴革笍 Franking Credits

Why changes could be afoot for ASX dividend shares and franking credits

A proposed law could effectively kill off the payment of special dividends.

Read more

Older woman looks concerned as she counts cash notes
鈴革笍 Dividend Yields

The Santos (ASX:STO) share price is now trading on a trailing 2.35% fully-franked dividend yield

The company's falling share price has boosted its dividend yield.

Read more

A boy hold money and dressed in business suit next to money bags on a desk, indicating a dividends windfall
鈴革笍 Dividend Shares

The Accent (ASX:AX1) dividend has lifted by 22%

The company will reward shareholders with an increased dividend...

Read more

An older woman high fives an older man with big smiles after seeing good news on their laptop regarding their ASX tech shares
鈴革笍 Dividend Yields

The Wesfarmers (ASX:WES) share price is trading on a forecast 2.78% fully franked dividend yield

How does the retail conglomerate stack up for its dividends?

Read more

person thinking by holding hand to chin in consideration
鈴革笍 Dividends

What you need to know about the CSL (ASX:CSL) dividend dates in 2021

To be eligible for CSL's upcoming dividend, here's what you need to know...

Read more

Man in hard hat rolling his eyes at a falling ASX share price. builder
Resources Shares

BHP (ASX:BHP) dividend record, shares slide regardless

The company is returning a record amount of capital to investors.

Read more

shocked man looks through one eye
鈴革笍 Dividends

What you need to know about the Magellan (ASX:MFG) dividend

If you want Magellan's latest dividend, here are the details that are of importance...

Read more

a woman sits in the driver's seat of a car with her arm resting on the door with a small smile on her face, looking out of the car.
鈴革笍 Dividend Shares

Carsales (ASX:CAR) share price records a modest rise on dividend slash

Australia's largest online automotive and marine classifieds business notches a conservative share price rise on its latest report.

Read more