3 solid ASX dividend shares

It’s getting harder to find good sources of income these days with banks offering a very pitiful interest rate on money in the bank. The best rate you can find these days is between 2.8% to 3%, depending on the bank and its rules. ASX dividend shares could be the answer.

Shares are the only game in town to generate good income, which is why income investors would be well suited to look at some shares on the ASX.

However, just because something has a big yield doesn’t mean it’s necessarily good.

Here are some options I think dividend investors should be interested in:

Rural Funds Group (ASX: RFF)

Rural Funds is Australia’s largest agricultural real estate investment trust (REIT). It is invested across a variety of farm types including cattle, cotton, poultry, vineyards and almonds.

It has high quality tenants like Select Harvests Limited (ASX: SHV) and Treasury Wine Estates Ltd (ASX: RFF).

Rural Funds has rental indexation built into all of its contracts so that the rental income will grow at least by CPI inflation or 2.5% per year. When combined with re-investing around 20% of rental profit each year, you can see why management of Rural Funds predict it can grow the distribution by at least 4% each year.

It currently has a FY19 distribution yield of 4.6%.

WAM Research Limited (ASX: WAX)

WAM Research is one of the best LICs for dividends in my opinion.

I believe that because over the past seven years its portfolio has delivered an average return per annum of 17.9% before fees and expenses. Wilson Asset Management is very good at picking undervalued small and medium growth shares where the investment team see a catalyst for the valuation to improve.

WAM Research has used some of that impressive long-term investment performance to pay out a dividend which has been steadily increasing since the GFC. It currently has a grossed-up dividend yield of 9.7%.

InvoCare Limited (ASX: IVC)

InvoCare is the country’s largest funeral operator with around a third of the market. This idea may be morbid for some, but if you can look past that then you’ll find a share that has very long-term tailwinds.

Death volumes are expected to grow by 1.4% per annum between 2016 to 2025 and then increase by 2.2% per annum from 2025 to 2050. There are few shares out there that you can point to underlying industry growth for the next thirty years.

It has increased its dividend in each calendar year since 2006 and its current grossed-up dividend yield is 5.3%.

Foolish takeaway

I believe all three of these shares have long-term profit growth and dividend growth ahead of them. None are cheap, however WAM Research’s yield is now nearly 10% which is attractive assuming the plan to alter franking credits doesn’t hurt the valuation or attractiveness of the LIC.

Another attractive dividend share is this top defensive stock which just grew its dividend by 20%.

This leading dividend stock just grew its profit by 30%

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!

Simply click here to grab your FREE copy of this up-to-the-minute research report on our #1 dividend share recommendation now.

Motley Fool contributor Tristan Harrison owns shares of InvoCare Limited and RURALFUNDS STAPLED. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED and Treasury Wine Estates Limited. The Motley Fool Australia has recommended InvoCare 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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