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3 LICs with high dividend yields

The amount of interest on offer from savings accounts is pretty dismal these days. Popular blue chip dividend share Telstra Corporation Ltd (ASX: TLS) has shown that not all dividend stocks are created equal – some dividends are not that safe.

That’s why I think many investors focused on income should consider listed investment companies (LICs). The structure allows these companies to pay out capital gains & income received out as a regular dividend.

Here are three LICs with attractive dividend yields:

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

This LIC is run by Naos and aims for businesses that are mid-to-large caps, but outside of the top ASX 50, as the name suggests.

Its portfolio has been successful with this hunting ground, it has delivered average annual returns of 18.1% over the past three years, after expenses but before fees.

The solid returns have allowed the LIC to increase its dividend each year since the second half of FY15. It currently has a grossed-up dividend yield of 7.4%.

WAM Leaders Ltd (ASX: WLE)

WAM Leaders is operated by the high-performing Wilson Asset Management investment team. This particular LIC also focuses on the larger end of the ASX with most of its top holdings being recognisable blue chip names.

Over the past year its portfolio grew by 17.2%, outperforming its benchmark by 1.8%. The other WAM LICs have a good record of regularly increasing the dividend and WAM Leaders could be another pleasing dividend payer.

It currently has a grossed-up dividend yield of 6%.

Whitefield Limited (ASX: WHF)

Whitefield is one of the long-running LICs of the ASX, it’s been going since 1923. Over the past two decades it has grown or maintained its dividend every single year – this is an impressive record.

Its top holdings fairly closely resembles the top of the ASX Index, however there are differences and it has been one of the top-performing large cap focused LICs according to Wilsons.

It currently has a grossed-up dividend yield of 5.4%.

Foolish takeaway

None of the above LICs are among my favourite due to their investment focus, but they are all pretty good options. At the current prices if I had to choose one it would be Naos due to its medium-term performance and the discount to the NTA.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. 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.

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