Although everyone loves a good dividend, you do have to invest for a long time or with a considerable amount of money to build up enough passive income to meaningfully top up your pay cheque. Since dividends are typically paid every six months, they aren’t what you would call regular income either, so a healthy starting yield on your dividend shares goes a long way.
Here are three ASX dividend shares I think offer just that.
Australia and New Zealand Banking Group (ASX: ANZ)
Unlike some of the other ASX banks, ANZ bank shares aren’t looking too expensive today, which leads me to think they would make a great income share to pick up. In fact, ANZ shares are going for less than what they were this time last year. Nonetheless, with a starting yield of 5.76% (which rises to 8.23% if you include franking), this stock would definitely be a nice one to top up your income with. I think that any dividend portfolio should have at least some ASX bank exposure, as you can’t really get such a consistently large, fully-franked dividend from any other sector. And on today’s prices, ANZ is a great candidate
Scentre Group (ASX: SCG)
Scentre is a real estate investment trust (REIT) that owns all of the Australian and New Zealand Westfield shopping centres. Scentre has done an admirable job (in my view) of adapting its centres in the age of online shopping, and its focus on ‘experiences’ over traditional shops has been paying off nicely. Scentre is currently offering a 4.74% yield at current prices, and isn’t looking too expensive either, with today’s share price of $4.01 a ways off its 52-week high of $4.19.
I think having some ASX property exposure is a nice way to diversify your income portfolio – and Scentre is a great landlord to be in business with.
NIB Holdings Ltd (ASX: NHF)
NIB shares are only offering a 3.1% starting yield on current prices, but this is partly due to NIB shares appreciating 44% over 2019 so far – it’s hard for a dividend to keep up with this kind of growth. But NIB has proved itself to be a healthy dividend growth stock, which I think will continue as the government encourages more and more people to take on private health insurance to relieve the pressure on Medicare and the public hospital system.
All of these shares would be great choices to top up your regular income with. I don’t think any of them are looking too expensive in today’s market either, so if you’ve got some money you want to put toward some extra income, what are you waiting for?
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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has recommended NIB Holdings Limited and Scentre Group. 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.