If you’re a dividend investor or someone who just loves a regular pay cheque from your shares, you’ve probably got a nice idea of what the next few months hold in store as earnings season wraps up. Many dividends rose, a few were cut and some remain just so. But seeking high quality companies with strong dividends remains the endgame. So here are 3 ASX dividend shares that I would buy for income today.
Brickworks Ltd (ASX: BKW)
Brickworks (as the name implies) specialises in building materials such as masonry, timber, concrete and… bricks. I like Brickworks as its products are always in demand. Although the construction industry is highly cyclical, building, renovating or repairing buildings is a never-ending game – which ensures a small but strong foundation of demand for Brickworks’ products, no matter the economic climate.
Brickworks also has a 43% interest in Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), which helps smooth out the volatility of its construction arm. ‘Soul Patts’ is also famous for its ever-rising dividend, so this stake helps prop up Brickworks’ dividend in turn, which has increased every year since 2008. Brickworks shares are currently offering a 3.44% yield at current prices.
Woolworths Group Ltd (ASX: WOW)
Woolworths recently reported its earnings for the 2019 financial year, and investors liked what they saw. Earnings grew a healthy 5% and profits an even better 7%, which enabled Woolworths to increase its final dividend to 57 cents per share and its annual dividend to $1.07 per share (a 9.7% rise over FY18’s payout). Groceries and supermarkets is a very defensive business, and so I would be reasonably happy to hold Woolworths shares in tough times for income. Woolworths is currently offering a 2.91% yield on current prices.
NIB Holdings Limited (ASX: NHF)
NIB has an enviable track record for both growth and income, with NHF shares more than doubling in value since 2016. The dividends have been keeping pace as well, rising 56% over the same period. I also think that the private health sector will benefit enormously from our changing demographics. As our population ages, governments will inevitably feel the pressure in the Medicare budget, and will likely continue to subsidise private health to take a larger share of the burden. This gives NIB a nice tailwind to build on long into the future. NHF shares are offering a 3.24% yield on current prices.
If you’re looking for some high quality income shares, I think these three are a great place to start. All have solid dividend track records and future-proof earnings streams that you can have reasonable confidence in. On today’s prices, I would probably go with Brickworks as the cheapest option, but all three should belong on the dividend investor’s watchlist regardless.
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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Brickworks and NIB Holdings 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.