High yield ASX dividend shares could be the answer to boost your income.
But you need to be careful. If you go for shares that have unsustainably high dividend yields you could see a dividend cut in the future.
I think the below shares offer the right combination of high yield and potentially a bit of growth:
Rural Funds Group (ASX: RFF)
Rural Funds is one of my favourite high yield ASX dividend shares.
The farmland real estate investment trust (REIT) currently has a FY21 distribution yield of 5.6%. It aims to increase its distribution by 4% each year. I think that's a solid growth rate with how little inflation there is these days.
Contracted rental indexation is a big factor in growing the rental profit and distribution. It is also investing in productivity improvements at its farms for its tenants, unlocking more rental income.
The long-term weighted average lease expiry (WALE) of more than 10 years gives good income visibility for the ASX dividend share.
Arena REIT No 1 (ASX: ARF)
Arena is another REIT that I'm a fan of. It invests in social infrastructure properties like early learning centres and healthcare buildings.
Some of its largest tenants, by rental income, are big childcare providers like Goodstart and G8 Education Ltd (ASX: GEM).
Arena REIT has been steadily been growing its distributions for several years. The ASX dividend share recently guided that the FY20 distribution would be 13.9 cents to 14 cents per unit. This equates to a FY20 distribution yield of at least 5.8%.
Medibank Private Limited (ASX: MPL)
Medibank isn't normally a high yield ASX dividend share I'd go for. But I have to give credit to Medibank as a potential income option.
The private health insurer currently has a grossed-up dividend yield of 7.5%. That's an attractively high yield for an ASX dividend share.
The company recently updated the market to say that it doesn't really see much of a change to its FY20 guidance despite COVID-19. This should translate into solid earnings for FY20, which should mean Medibank has the ability to maintain its dividend.
There has been a recent agreement for public hospitals to stop charging patients as private patients if they have health insurance. This should be helpful for Medibank's earnings.
I'm not sure about the long-term direction of Medibank's policyholder numbers, but there doesn't need to be much growth for Medibank to continue being a good ASX dividend share during this period. Its good balance sheet also helps the company remain robust.
Foolish takeaway
All three of these ASX dividend shares have attractively high yields. The RBA interest rate is now very low. Of the three options I'm probably most attracted to Rural Funds because it is least affected by what's going on with COVID-19.
