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2 alternative dividend shares to buy for income

Investors are looking for ways to boost their income, I think alternative dividend shares could be a way to diversify that income steam.

Everyone knows shares like Commonwealth Bank of Australia (ASX: CBA) and Telstra Corporation Ltd (ASX: TLS), but there are alternatives out there with solid yields and delivering growth.

Here are two dividend share ideas to diversify your income:

Tassal Group Limited (ASX: TGR) 

Tassal is Australia’s largest fish business. I’m sure everyone has seen its salmon products in our local supermarkets. There’s a growing demand for fish here and overseas, it’s a healthier food compared to many alternatives and some consumers who are choosing fish are trying to lower their environmental impact.

The company has recently expanded into prawn farming, which diversifies its earnings by fish type and geography. Both salmon and prawns have a good growth outlook.

Over the past few years Tassal has grown its operating earnings which has seen the dividend grow each year too. The company continues to invest for growth for future years.

It currently has a grossed-up dividend yield of 5.6%

Rural Funds Group (ASX: RFF) 

Rural Funds is a real estate investment trust (REIT) which owns farmland across Australia. Its various farm types include cattle, vineyards, cotton, almonds and macadamias.

Management aim to increase the distribution by 4% per year which is supported by contracted rental increases, productivity investments at the farms and the occasional acquisition.

Many of its tenants are some of the leading businesses in their respective industries such as Select Harvests Limited (ASX: SHV), Treasury Wine Estates Ltd (ASX: TWE), Olam and JBS.

Its share price has surged 14% in a week after winning a court case against short seller Bonitas. However, its share price is still lower than before the short attack and it looks quite cheap compared to many other REITs.

Based on the FY20 distribution, it’s trading with a 5.2% distribution yield.

Foolish takeaway

Both of these shares have solid yields and have good income growth potential. Rural Funds is definitely the safer choice for the medium-term, but Tassal could continue to generate operating growth over the longer-term as food demand changes and grows.

But, I think that these high-quality dividend shares could be even better buys for income.

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Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED, Telstra Limited, and Treasury Wine Estates 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.

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