If you rely on dividends to fund your life's expenses, I would want to make sure they are very reliable ASX dividend shares.
That means I would be focusing on ASX shares that have long-term growth potential, seemingly can grow their dividend and have a solid starting dividend yield.
These are three solid dividend shares on the ASX:
Brickworks Limited (ASX: BKW)
Brickworks is a diversified building materials business which is currently facing a rough time due to the difficult Australian construction conditions. I think it looks more attractive with the share price down 12% over the past month.
It's an attractive dividend share because it has maintained or grown its dividend every year for decades, with no decreases. Its Property and Investment assets have helped even out its earnings when construction activity wavers.
It currently has a grossed-up dividend yield of 4.7%, and the dividend could keep growing higher if it manages to do well with its US brick manufacturing expansion plans.
Rural Funds Group (ASX: RFF)
Rural Funds is a farmland real estate investment trust (REIT) that leases out vineyards, almonds, macadamias, cotton, cattle and poultry farms to high-quality tenants.
Farmland has been a useful asset for many centuries and should continue to be useful as long as humans get their nutrition from farmland. Inflation and a growing population should help Rural Funds grow its distribution for many years to come.
Rural Funds aims to increase its distribution by 4% a year, driven by rental increases built into its contracts. It currently has a FY19 distribution yield of 4.7%.
Australian United Investment Company Ltd (ASX: AUI)
This is one of the oldest listed investment companies (LICs) on the ASX, it invests in many of the biggest businesses on the ASX like Commonwealth Bank of Australia (ASX: CBA) and BHP Group Ltd (ASX: BHP). The strength of the Australian economy has helped AUI grow over the past couple of decades.
It has increased or maintained its dividend each year going back to at least FY93, offering reliable income security for shareholders.
AUI has a grossed-up dividend yield of 6.2%, which looks attractive compared to current interest rates.
Foolish takeaway
I expect each of these ASX shares can at least maintain their dividends for many years to come. It would take an Australian GFC for a dividend cut to be on the cards. At the current share prices I think Brickworks looks like the best choice because of the discount to its underlying assets.
