I think that ASX dividend shares are even more important these days. Record low interest rates have driven yields down considerably.
But, we need to be careful with our dividend picks. We've already see a dividend cut from National Australia Bank Ltd (ASX: NAB) and another from Westpac Banking Corp (ASX: WBC) today. Plus, Australia and New Zealand Banking Group (ASX: ANZ) reduced its franking credit amount.
These are three dividend shares I'd buy for November and beyond:
Future Generation Investment Company Ltd (ASX: FGX)
Future Generation has a grossed-up dividend yield of 6%.
It's a listed investment company (LIC) with a difference, there are no management fees or performance fees. It has two main objectives, it wants to grow the dividend for shareholders and also donate 1% of its net assets to charities each year.
Future Generation invests in the funds of ASX-focused managers who work for free, there's a slant towards smaller businesses in the underlying holdings which hopefully will produce good long-term returns.
It has steadily increased its dividend since it started paying one in 2015.
Rural Funds Group (ASX: RFF)
Rural Funds has a distribution yield of 6.2%.
The farmland real estate investment trust (REIT) receives regular rental income from high-quality tenants. That income is growing and linked to a fixed 2.5% a year or CPI inflation.
It has a number of farm types including cattle, vineyards, almonds, cotton and macadamias which is a good diversification strategy.
Rural Funds doesn't carry the operational risks of running a farm (like drought), that's for the tenant to worry about. However, it does own water entitlements for tenants to use.
Rural Funds Management aims to increase the distribution by 4% a year whilst investing in productivity improvements at the farms to generate higher rent.
WAM Microcap Limited (ASX: WMI)
WAM Microcap has an ordinary grossed-up dividend yield of 4.5%.
It's hard to generate returns a lot better than the index, but WAM Microcap has been a strong performing LIC since inception. The small cap region of the market is a great hunting ground for opportunities, WAM Microcap's portfolio has returned an average of 22.2% per annum before fees and expenses since June 2017.
This strong performance has built up an attractive profit reserve whilst also funding a growing ordinary dividend and special dividends.
Foolish takeaway
Each of the above dividend shares have solid yields and good income growth prospects. WAM Microcap is likely to produce the best total returns over the long-term, but Rural Funds could be the most reliable even if there's a downturn.
