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:
Arena REIT No 1 (ASX: ARF)
Arena REIT is one of the ASX's largest real estate investment trusts (REITs) with a specialty in childcare properties. With over 200 early learning properties and a few healthcare buildings it has pretty good geographical diversification with more than 20% of its portfolio in each of Queensland, NSW and Victoria.
Some of its largest tenants by income include Goodstart Early Learning, Primary Health Care Limited (ASX: PRY) and G8 Education Ltd (ASX: GEM).
Two of the best things about Arena is its 100% occupancy rate and its 12.9 years weighted average lease expiry. This gives it excellent see-though for investors. The government support for the childcare sector is also a useful bonus.
It pays a quarterly distribution with a FY19 yield of 5.5%.
WAM Research Limited (ASX: WAX)
WAM Research is one of the best listed investment companies (LICs) on the ASX in my opinion.
It has performed very well by investing in small and medium cap ASX shares. Its portfolio has returned an average of 17.9% per annum over the past seven years before fees and expenses.
WAM Research has increased its dividend every year since the GFC and currently offers a grossed-up dividend yield of 9.8%.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
Soul Patts is one of the oldest businesses on the ASX and I think it's one of the best. It's an investment conglomerate that takes large takes in companies it thinks will generate long-term returns.
It has paid a dividend every year of its existence and has increased its dividend every year since 2000.
The diversified investment portfolio in shares like Brickworks Limited (ASX: BKW) and the long-term focus of management should mean Soul Patts can continue beating the market over the next decade.
It currently offers a trailing grossed-up dividend yield of 3.1%.
Foolish takeaway
WAM Research's trailing yield is the best it has been for a long time, so it could be worth considering add to an income-focused portfolio, but it's still trading at a big premium to its NTA. Soul Patts ticks a lot of investment boxes, so it could be the best one to focus on for long-term reliable dividends, however its yield is lower than its historical average.
