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Why Stockland shares are a great buy for ASX income today

For many investors these days, income is the name of the game. As interest rates have been lowered again and again this year, the hunt for yield has become increasingly desperate.

As ‘safe’ investments like government bonds and term deposits lose their potency, more and more formerly conservative investors are being pushed into the share market as a consequence. That’s because ASX dividend shares are one of the only widely available assets left that can give you a decent yield on capital.

With that in mind, here’s why I think Stockland Corporation Ltd (ASX: SGP) is a top pick for income investors today.

Who is Stockland?

Stockland is considered a REIT (real estate investment trust). A REIT is a company that derives most of its earnings from rental income through owning property.

It’s not just houses though. Stockland has a vast and diverse property portfolio, containing everything from shopping centres and business parks to retirement villages and logistical warehouses. Having such a diverse stable of properties is a huge advantage for the company and makes Stockland a great ‘pure property’ play in my opinion, giving this company an edge over more concentrated REITs like Scentre Group (ASX: SCG).

I also like Stockland as the company’s management has shown a great deal of foresight into the rise of the online economy. Its heavy investment in the ‘logistics and distribution’ side of the business is highly beneficial for shareholders in my view – positioning the company to capitalise on the growing presence of Amazon and other online distributors.

Is Stockland a buy today?

Using these assets, Stockland has held or increased its dividend every year since 2009, which came in at 27.6 cents per share for the 2018/19 financial year. On current prices, this represents a trailing yield of 5.45%, which I think offers a lot to like for income investors.

For a retiree or income investor heavy on dividend blue-chips like the banks or BHP Group Ltd (ASX: BHP), I think Stockland can add some valuable diversity and property exposure to a portfolio with a decent yield to boot.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has recommended 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.

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