Happy new financial year!
Yes, it's 1 July today and officially the start of the 2021 financial year. Apart from being able to lodge your tax return, a new financial year presents a great opportunity to take a decent look over your investment portfolio. It's the perfect time to celebrate your gains, rue your losses and look towards your next purchase of ASX shares .
So, on that note, let's consider some solid ASX dividend shares. Specifically, I'm looking at those shares that I think will prove fruitful for income investors in the year ahead and beyond.
1) Wesfarmers Ltd (ASX: WES)
Wesfarmers is one of the largest companies on the ASX. It's also a retailing giant – owning the Bunnings Warehouse chain of hardware stores as well as Kmart, Officeworks and Target. It also retains a ~5% stake in Coles Group Ltd (ASX: COL). Wesfarmers first listed on the ASX more than 30 years ago and, in my opinion, has proven itself time and again as a savvy allocator of capital. This was highlighted by the company's acquisition of lithium producer Kidman Resources last year. Wesfarmers is also a formidable dividend payer. On current prices, its shares offer a trailing dividend yield of 3.4%, or 4.86% grossed-up with full franking.
2) Rural Funds Group (ASX: RFF)
Rural Funds has had its fair share of controversy in recent times. Last year, this agricultural REIT (real estate investment trust) was accused of cooking its books by a prominent short-seller. Rural Funds has since been completely exonerated by the courts, however, and I think it remains a top option for income investors to consider. This REIT leases agricultural land to farms and agri-businesses. Its portfolio includes macadamia, cotton, wine and beef-producing land, which all have the potential to return relatively safe and reliable rental cash flows back to Rural Funds. On current prices, Rural Funds shares are offering a 4.2% dividend yield. The company aims to increase this yield by 4% annually.
3) AGL Energy Limited (ASX: AGL)
AGL is Australia's largest supplier of energy like electricity and gas. This isn't the sort of company that will make you rich overnight but, in my opinion, AGL does offer a defensive, inelastic earnings base and a strong and robust dividend. Despite this, AGL has yet to regain the highs of above $21 per share we saw back in February. At today's price of $17.18 per share (at the time of writing), AGL is offering a trailing dividend yield of 6.46%, which grosses-up to more than 8.5% with the company's 80% franking.
