The Motley Fool

2 high-yield ASX dividend shares for strong income and high returns

In this era of record-low interest rates, ASX dividend shares are very much in vogue. After all, when the Reserve Bank of Australia (RBA) cut interest rates for the third time this year two weeks ago, it further reduced the interest rates we can expect to see from our bank account and term deposits.

Now, you can barely keep up with inflation by staying in cash – so a dividend paying ASX share is starting to look a lot more appealing than it did even twelve months ago.

So saying this, here are two ASX dividend shares I would consider for strong income and high returns today

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

At first glance, the ‘Soul Patts’ starting yield being offered today doesn’t look that impressive at 2.56%. But if you then consider that this investing conglomerate has increased its payout every year this century so far, and things look a lot rosier!

Soul Patts runs its own portfolio of ASX investments, which today includes large stakes in TPG Telecom Ltd (ASX: TPM), Brickworks Ltd (ASX: BKW) and New Hope Corporation Limited (ASX: NHC).

Using this portfolio of high-quality ASX businesses, Soul Patts is able to consistently deliver returns to its shareholders. This is one company I would hold for a lifetime!

WAM Research Ltd (ASX: WAX)

When it comes to high dividend yields, very few ASX shares can compete with this Listed Investment Company (LIC). WAM Research aims to discover ‘the most exciting undervalued growth opportunities’ on the ASX and has a very successful track record of doing so. Since 2010, WAX shareholders have been the beneficiaries of a 16.7% annual average return, which includes an ever-rising dividend yield – currently at 6.93% (which grosses-up to 9.9% with franking).

Some of WAM Research’s current holdings include Myer Holdings Ltd (ASX: MYR) and Xero Ltd (ASX: XRO).

Such a strong track record of growth and income leads me to pick WAX shares for a dividend buy today.

Foolish Takeaway

I think both of these ASX dividend share picks can offer investors a stellar return compared with cash today. Even if interest rates eventually rise, I think these two businesses are long-term market beaters that would do well in any portfolio.

For more great dividend shares delivering strong cash flow, don't miss this report here - NEW! Top 3 Dividend Bets for 2020

With interest rates likely to stay at rock bottom for months (or YEARS) to come, income-minded investors have nowhere to turn... except dividend shares. That’s why The Motley Fool’s top analysts have just prepared a brand-new report, laying out their top 3 dividend bets for 2019.

Hint: These are 3 shares you’ve probably never come across before.

They’re not the banks. Not Woolies or Wesfarmers or any of the “usual suspects.”

We think these 3 shares offer solid growth prospects over the next 12 months. Each of these three companies boasts fully franked yields and could be a great fit for your diversified portfolio. You’ll discover all three names and codes in "The Motley Fool’s Top 3 Dividend Shares for 2019."

Even better, your copy is free when you click the link below. Fair warning: This report is brand new and may not be available forever. Click the link below to be among the first investors to get access to this timely, important new research!

The names of these top 3 dividend bets are all included. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies move – we may be forced to remove this report.

Click here to claim your free copy right now!

Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia owns shares of and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Brickworks. 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.

NEW. Five Cheap and Good Stocks to Buy in 2019…

Our Motley Fool experts have just released a brand new FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.8% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.

CLICK HERE FOR YOUR FREE REPORT!