Income and dividend investing is all the rage at the moment. With interest rates at record lows and tipped to get lower still, yield hungry investors have been flooding into income producing assets on the ASX in record numbers. Stocks with big dividends have seen renewed affection over the last few months. But as good as this is now, we have to keep one eye on the horizon.
We are entering an unprecedented bull run in stocks, with no big crashes for over 10 years now – which is well above the historical pattern. It would, therefore, be prudent to think about how your dividend payers are going to perform if a crash does happen in the medium term.
Here are 2 ASX dividend picks that, in my opinion, you can count on for crash-proof income.
Wesfarmers Ltd (ASX: WES)
Wesfarmers is ASX royalty – founded in 1914, this conglomerate owns many businesses across many industries in Australia – including Bunnings, Kmart, Target and Kleenheat Gas. It also owns chemical and fertiliser manufacturing businesses, coal mines and a clothing line. Wesfarmers has been in the news most recently over its failed bid for Lynas Corporation Ltd (ASX: LYC) and before that, its spinoff of Coles Group Ltd (ASX: COL). With such a diversified portfolio of businesses, I am very confident of Wesfarmers' ability to maintain earnings in the event of a crash, Wesfarmers is currently yielding a 5.51% dividend on current prices (not factoring in its special dividend paid in February).
SPDR S&P Global Dividend Fund (ASX: WDIV)
WDIV is an ETF operated by the SPDR group (behind the famous SPY ETF over in the US). WDIV tracks an index comprised of dividend-paying companies from around the world that have maintained or increased their dividend for at least ten years, so it's nice to have that kind of certainty in an income investment. Some of WDIV's top holdings include AT&T, Laurentian Bank of Canada and Philip Morris International. WDIV has a management fee of 0.5% and currently yields 4.89%.
Foolish Takeaway
If you're a dividend investor, it would be prudent (in my opinion) to think about what may lie around the corner in terms of the global economy and make sure that at least a chunk of your portfolio is built around companies that have a solid track record of dividend growth and solid earnings. Both of these picks demonstrate these qualities in my view and would be worth considering for your income portfolio.
