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2 of the best ASX shares for income investors

There’s nothing quite like getting paid a dividend. You put your capital to work by investing in a company and earn a regular income stream which hopefully grows over time.

When the sharemarket has a wobble, like it is currently, it’s good to remember that company dividends are unlikely to be affected. That’s unless we fall into a recession of course. But by focusing on the more reliable dividends being paid, it makes investing in shares a much smoother ride. This offers a large behavioural advantage during scary times, compared to those investing for capital growth who are focused on the constantly moving share prices.

Here are some great income ideas in the current market environment…

Viva Energy Reit Ltd  (ASX: VVR)

This property trust owns over 400 service stations around the country, almost all are leased to Shell Coles Express. The great thing here is, your income return will not be affected by what happens on the sharemarket.

These petrol stations are still going to be paying rent to Viva Energy REIT. Leases are locked in for an average of 13 years and there are even built-in rent increases of 3% per annum. So you can literally switch off the market and watch the rental income hitting your bank account.

Management has provided guidance for a distribution increase of 3%-3.75% this year. Shares in Viva Energy REIT currently trade on a forecast yield of 6.6%.

Sydney Airport Holdings Pty Ltd  (ASX: SYD)

Population growth and passenger numbers have been climbing, with Sydney Airport being a huge beneficiary. And with Sydney Airport essentially being the gateway to Australia, this trend is ongoing. This business has good pricing power and is an effective monopoly, much like Transurban Group (ASX: TCL).

Visitor numbers continue to grow strongly, especially from Asia, and Sydney Airport continues to add more flights to more locations, opening itself up to a larger number of travellers. It’s also investing to improve the offering and features of the airport, with new shops, amenities, and accommodation.

There’s plenty of ways for Sydney Airport to keep growing its earnings over the next decade, which bodes well for dividends. It currently trades on a forecast distribution yield of 5.9%.

Foolish takeaway

Both businesses offer solid dividend yields in the current environment. And each should deliver reliable earnings growth over the next few years, which underpins those dividends. These are my type of investments for good markets and bad.

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Motley Fool contributor Dave Gow owns shares of Sydney Airport Holdings Limited and Transurban Group. The Motley Fool Australia owns shares of and has recommended Sydney Airport Holdings Limited and Transurban Group. 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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