Dividends are one of the most pleasing aspects about investing in ASX 200 shares. It's so satisfying to do no work for the companies you own, yet receive a dividend every six months.
Not only that, but the income on offer from many ASX shares is a lot higher than you could possibly get from all the various bank accounts that are out there. Even the best ones only offer an interest rate of around 2.8% to 3%.
So, to solve that income dilemma, here are two good income shares in the ASX 200:
Brickworks Limited (ASX: BKW)
Brickworks is one of Australia's largest construction businesses. It is involved in the manufacture and distribution of clay and concrete products, property development and realisation, and investments. It owns 43% of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL).
Brickworks has grown or maintained its dividend every year since 1976 according to the company. Since listing on the ASX in 1962 it has only reduced the dividend once in 1975.
It's only one of nine companies in the S&P/ASX All Ordinaries Index that have at least maintained its dividend every year since 2000. The dividend was fairly stagnant for a few years after the GFC, but it has been rising nicely again since 2014.
Its just-announced US acquisition could strongly diversify earnings in the years ahead.
Brickworks currently has a grossed-up dividend yield of 5.2%.
Challenger Ltd (ASX: CGF)
Challenger is Australia's largest provider of annuities, indeed estimates put its share of new annuities in the country at above 90%.
It has increased or maintained its dividend every year since 2005 and it has been increasing it each year since the GFC.
I like Challenger as a defensive dividend idea because demand for annuities should continue to grow over the long-term with the growing number of retirees looking for a safe place for their capital. The number of over-65s is projected to grow by 40% over the next 10 years.
It currently has a grossed-up dividend yield of 5.25%.
Foolish takeaway
Both of these businesses have proven to long-term dividend growers and provide reliable income even in troubled times.
At the current prices I am more drawn to Challenger due to its slightly higher yield and long-term underlying profit growth potential.
