We are almost into August where reporting season will tell us about the impact of COVID-19 on many businesses. I think there are some top ASX dividend shares that are worth buying for long-term dividend income:
Future Generation Investment Company Ltd (ASX: FGX)
Future Generation is a fairly unique listed investment company (LIC). It is philanthropic – it donates 1% of its net assets each year to youth charities. It's able to do this because there are no management fees charged by the LIC or its investments. Future Generation invests in the funds of ASX share-focused fund managers who work for free for the LIC.
In terms of the dividend, Future Generation has increased its dividend consecutively over the past few years. In FY19 it increased the dividend by 8.7% compared to FY18. At the current Future Generation share price it offers an attractive grossed-up dividend yield of 7%. I think it's a great ASX dividend share.
Aside from the dividend, I really like two elements of Future Generation. The underlying diversification is strong with investments in a number of portfolios of shares.
I also like that it's possible to buy Future Generation at a sizeable discount to its net tangible assets (NTA). Future Generation is trading at 11% of its June 2020 NTA. Plus, its portfolio has outperformed the ASX over the long-term.
Vitalharvest Freehold Trust (ASX: VTH)
Vitalharvest is an agricultural real estate investment trust (REIT). It owns some of the largest aggregations of berry and citrus farms in Australia. These farms are leased to Costa Group Holdings Ltd (ASX: CGC). Not only does Vitalharvest receive a solid fixed rent from Costa, it also has a profit share agreement for 25% of the profit that the farms make.
The REIT has a distribution yield of 6.2% based on the current Vitalharvest share price. If profitability returns to 2019 levels, then Vitalharvest could offer a yield of 7.3%. I think those are solid yield numbers for an ASX dividend share.
I'm attracted to the new strategy that Primewest Group Ltd (ASX: PWG) could bring as the new manager of Vitalharvest. It's going to look at more food-related properties used for storage and processing, not just farms.
The net asset value (NAV) per share of Vitalharvest was $0.95 at December 2019, so it's trading at a 19% discount.
Food is a very important resource, so I think Vitalharvest could be a solid ASX dividend share over the long-term.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
For dividends, I believe that Soul Patts is the best ASX dividend share available to Aussie investors.
The main reason I think that is due to dividend reliability. If you're investing for dividends then I imagine you aren't not looking for an unreliable dividend. Dividends may be essential for providing cashflow to fund your life's expenses. I think dividend share picks should be reliable year to year and over the long-term, particularly when you need them most such as during this COVID-19 period. Many prior dividend favourites like ASX banks and infrastructure shares have cut dividends.
Soul Patts has increased its dividend every year since 2000. It has provided dividend growth guidance for this year. It has paid a dividend every year in its 100+ year history.
The investment conglomerate owns a defensive portfolio of diversified businesses including telecommunications, building products, property, LICs, resources, swimming schools and agriculture.
Soul Patts is also planning to start investing in regional data centres, which opens up an interesting growth avenue for the company.
At the current Soul Patts share price it offers a grossed-up dividend yield of 4.25%. I think that's a solid yield, given the low interest rate environment we find ourselves in.
