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3 ASX dividend shares to research this weekend

The three ASX dividend shares I mention in this article could be worth researching this weekend.

A lot of people rely on investment income to fund their life.

It could be retirees who have worked hard and now want to enjoy the fruits of their labour. It could be someone who was injured and received a large payout. It could be a lucky person who inherited a lot of money. It could a regular person who’s building wealth and wants an income stream.

You won’t get decent income from bank accounts or bonds these days. The best place to find good income is the share market. Here are three dividend ideas:

DuluxGroup Limited (ASX: DLX)

DuluxGroup is a home improvement business that sells Dulux, British Paints, Selleys, Cabot’s and Yates, among many others.

The DuluxGroup dividend has been increased every year since 2010, which is a fairly impressive record for an ASX business.

It’s a slow-and-steady grower that has managed to grow its revenue over the years and is now expanding its sales overseas. It just reported that its FY18 profit grew by 5.4% and the dividend grew by 5.7%.

It remains to be seen if a housing downturn will affect things, but management believe it won’t have much of an effect.

It currently has a grossed-up dividend yield of 5.6%.

Challenger Ltd (ASX: CGF)

Challenger currently offers a grossed-up dividend yield of 5.2%. It has increased its dividend every year since the GFC. Even during the GFC it maintained the dividend.

The business aims to pay a dividend that’s 50% of its underlying profit. Challenger may be able to grow its earnings by high-single digits each year for the foreseeable future with the rising number of retirees – the number of over-65s is expected to grow by 70% over the next two decades.

A few helpful government changes could also make annuities more attractive. Means testing, requiring superannuation funds to offer a guaranteed income option and the crimping of negative gearing & franking credits could boost demand for annuities.

Future Generation Investment Company Ltd (ASX: FGX)

Future Generation currently has a grossed-up yield of 5.4%. It’s a listed investment company (LIC) that invests in the funds in some of Australia’s leading fund managers.

One of its key aims is to steadily grow the dividend. It has been successful with this so far – it has grown the dividend each year since 2015.

Another good thing about Future Generation is that it donates 1% of its net tangible assets (NTA) to youth charities, there are no management fees or performance fees.

Foolish takeaway

I like the idea of all three of these shares for income, dividend growth and capital growth. I believe Challenger is a good opportunity to buy today, whilst Future Generation provides good diversification and good philanthropic donations.

Another dividend share that should be on your income watchlist is this top stock which just grew its dividend by 20%.

The best dividend stock to buy this month

You might not know this market leader's name, but it's rapidly expanding into a highly profitable niche market here in Australia. Even better, the shares boast a strong, fully franked dividend that should balloon in the years to come. In other words, we're looking at the holy grail of incredible long-term growth potential AND income you can watch accruing in your account in real time!

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Motley Fool contributor Tristan Harrison owns shares of Challenger Limited and FUTURE GEN FPO. The Motley Fool Australia owns shares of and has recommended Challenger 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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