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Where to invest for reliable dividend shares

Reliable dividend shares are hard to come by. The 4 major banks were always thought of as a reliable investment for income, right up to when they all deferred their dividends this year.

But as things are starting to become normal again, I believe these 4 great shares will provide reliable dividends, a great dividend yield, and a chance for share price growth.

Mining dividend shares

Not all miners pay dividends. In fact, the gold industry eschews them almost completely. St Barbara Ltd (ASX: SBM) is one of the highest paying of the large gold miners at a trailing 12 month (TTM) dividend yield of 2.68%.

Fortescue Metals Group Limited (ASX: FMG) pays one of the highest dividend yields of the large-cap mining companies. At the time of writing Fortescue has a TTM dividend yield of 7.14%. This is higher than iron ore rival, BHP Group Ltd (ASX: BHP) with a TTM of 5.97%. In addition, I believe Fortescue is currently selling at a good price anywhere under ~$15. 

Consumer discretionary

Harvey Norman Holdings Limited (ASX: HVN) currently has a TTM dividend yield of 5.97%. The company recently announced it would pay a special dividend of 6 cents a share on 29 June to any shareholder registered by 23 June. Aside from anything else, that is an additional payment of 1.7% on top of the regular dividend payments.

The company has seen its dividend payment increase year on year by around 9.4% over a 10 year period. In addition, it has a healthy 10-year average return on equity of 11.8%. Meaning it is pretty good at generating returns from its net assets.

Real estate dividend shares

Right now I really like Vicinity Centres (ASX: VCX) for a whole range of reasons. In particular, I think they did a good thing with their share placement recently. This helped them to reduce the company’s gearing from 34.9% down to 26.6%. In addition, it provided them with a cash and unused debt facilities war chest of $2.6 billion.

Be aware that they have deferred their current dividend due to the pandemic. However, the company has a history of reliable distributions and is tightly managed. At the time of writing Vicinity Centres had a TTM dividend yield of  10.16%.

The banks

The best dividend opportunity of the big 4 banks right now is Westpac Banking Corp (ASX: WBC). Although it has also deferred its decision on the current dividend, it had previously been a reliable dividend share.

At the time of writing Westpac is paying a TTM dividend yield of  9.62%. Moreover, while this company definitely has a few miles of bad road ahead of it, respected analysts have been saying it is undervalued. I believe it to be a very sound company with new management in place.

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 June 30th

Motley Fool contributor Daryl Mather owns shares of Fortescue Metals Group Limited. The Motley Fool Australia has no position in any of the stocks mentioned. 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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