3 ASX shares to buy with dividends yielding over 5%

These 3 ASX income shares have dividend yields of more than 5%, including LIC WAM Microcap Limited (ASX:WMI).

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There aren't many ASX shares that are growing but have dividend yields above 5%.

It's hard to find because of several factors. Interest rates are so low, valuations are so high and economic growth is tough in Australia right now.

In my opinion, banks, resource shares and telcos cannot be relied upon for reliable, growing dividends these days. That's why I'd rather buy these shares for yield:

Viva Energy Reit Ltd (ASX: VVR) 

Viva Energy Reit is a real estate investment trust that owns a portfolio of over 450 across Australia, predominately Coles Express locations in metropolitan areas which are leased to Viva Energy Group Ltd (ASX: VEA).

Most of the rental income growth is already locked in with a fixed 3% annual increase. There is additional potential growth from acquisitions and site improvements which should add further to distributable earnings.

Whilst 3% growth may not seem like much, it is better than inflation. When you combine that with the current distribution yield of 5.1% it seems that investors could receive underlying returns of high single digits per annum over the coming years, depending on what happens with electric vehicles over the long-term.

WAM Microcap Limited (ASX: WAM

Listed investment companies (LICs) like WAM Microcap have the ability to turn the capital gains and dividends they generate into consistent dividends for shareholders.

WAM Microcap has been one of the best-performing LICs over the past couple of years with a great performance by the investment team at picking the right small caps to deliver strong returns.

The LIC has been growing its ordinary dividend in its short history and the current annualised yield is now 5.5%. It also offers investors a good source of diversification in terms of industry diversification and share market capitalisation.

Rural Funds Group (ASX: RFF

Rural Funds is another REIT. It owns farmland across Australia in different states and different climactic conditions. Some of the farm types it owns are: cattle, cotton, almonds, macadamias and vineyards.

The REIT aims to increase its distribution each year by 4%. That's an attractive level of growth in this era of low inflation. It's partly able to do this because its rental income is linked to either a fixed 2.5% annual increase or CPI inflation in the contracts. Another part of the strategy is investing in productivity improvements at farms which has increased the value and rental potential of those farms too.

It currently has a distribution yield of 5.25%.

Foolish takeaway

Each of these shares have solid starting yields and continue to grow their dividends. WAM Microcap is likely to produce the strongest total returns, though its dividend is the least defensive. For long-term reliability I'd probably go for Rural Funds.

Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED and WAM MICRO FPO. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. 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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