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3 ASX dividend shares to diversify your income

Diverse income streams

I think there are some great ASX dividend shares. You may want to find different sources of income from the typical dividend shares people go for.

This doesn’t mean shares like Australia and New Zealand Banking Group (ASX: ANZ) or Sydney Airport Holdings Pty Ltd (ASX: SYD). Who knows if they will even pay something during 2020 because of the coronavirus?

I think the below ASX dividend shares could be great, diversified options for income:

Duxton Water Ltd (ASX: D2O)

Duxton Water is a company that owns water entitlements. It then leases them out to agricultural businesses. It has a portfolio of water from different entitlement regions, it’s trying to progressively lease out more of them.

This increased earnings visibility has allowed management to forecast that the Duxton Water dividend can grow every six months for the next two years. After that it may depend on how much rain there has been (or not).

The company is currently trading at a sizeable discount to its net tangible assets (NTA). The forward grossed-up dividend yield amounts to 6.25%.

Brickworks Limited (ASX: BKW)

Brickworks is one of the best ASX dividend shares in my opinion. It hasn’t decreased its dividend for more than four decades.

The business is split into three key segments.

The first segment is its large shareholding of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) which owns a diversified and growing portfolio of businesses in different industries. Soul Patts continues to grow its dividend for all shareholders, including Brickworks.

The second segment is its 50% stake of an industrial property trust, the co-partner is Goodman Group (ASX: GMG). This trust is generating reliable cashflow, long-term capital growth and there are more projects which will be completed in the coming years.

The third segment is the diversified building products businesses in Australia and the US. Construction is going to have a tough time this year, but I think there’s a good turnaround story here.

What’s the yield for the ASX dividend share? It currently offers a grossed-up yield of 5.8%.

BetaShares FTSE 100 ETF (ASX: F100)

There are plenty of shares listed on the London Stock Exchange which offer defensive earnings and a good yield. I’m thinking about shares like Tesco, GlaxoSmithKline, Unilever, BHP, Rio Tinto, National Grid and Vodafone.

The UK share market has been hit just like every other share market. This has boosted the dividend yield for ASX investors. At the end of April 2020 it had an underlying trailing dividend yield of 5.86%. The yield has fallen with the rising share prices, but the yield will still be fairly attractive for the long term even if there are a few dividend reductions this year.

It could be a good idea to get international income diversification. 

Which ASX dividend share to buy today?

Each of these ASX dividend shares have attractive futures with solid starting yields. At the current prices I’d probably go for Brickworks, it’s trading at a big discount to its asset value, has a great dividend record and it could be a good contrarian pick with the worries about the construction industry.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of February 15th 2021

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended DUXTON FPO. 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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