ASX dividend shares are some of the best ways to generate income from your money.
Cash in the bank is hardly earning anything any more because of how low the RBA interest rate is.
ASX shares can generate solid profit each year and pay out pleasing dividends even during COVID-19.
That's why I think each of these ASX dividend shares could be buys for income:
WAM Global Limited (ASX: WGB)
WAM Global is a listed investment company (LIC) which invests in global shares. The LIC is run by Wilson Asset Management (WAM).
One of the main benefits of LICs is that they can turn investment returns into a steady and growing dividend for shareholders. That's exactly what the ASX dividend share has been doing.
The ASX dividend share has grown its dividend strongly over the past 12 months. A year ago it paid a dividend of 2 cents per share, six months ago it paid 3 cents per share and it just declared a full year dividend of 4 cents per share. It has doubled its final dividend over the past year.
Global shares are a great place to find quality businesses that have good growth potential. Some of its largest holdings include: Tencent, CME Group, Dollar General, EA, Hasbro, Hello Fresh, Intuit, Lowe's and Microsoft.
At the current WAM Global share price it's trading at a 12% discount to the pre-tax net tangible assets (NTA). It offers a grossed-up dividend yield of 4.9%. I think that's a solid starting yield for a ASX dividend share.
Brickworks Limited (ASX: BKW)
Brickworks is a diversified property company. It's well-known for being a building products business that produces bricks, paving, masonry, roofing and so on. It's actually the largest brick supplier in Australia. Brickworks is the market leader in the north east in the US after making three acquisitions.
It generates reliable earnings from two of its other divisions. Brickworks owns a 50% stake of an industrial property trust with Goodman Group (ASX: GMG). Industrial properties are in higher demand with more ecommerce and the increasing importance of logistics. The property trust is currently working on building a huge warehouse for Amazon.
Brickworks also owns a large amount of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shares. Soul Patts is a diversified investment conglomerate which invests in defensive and contrarian assets like telecommunications, resources, agriculture and swimming schools. Soul Patts itself is a defensive ASX dividend share.
Brickworks hasn't cut its dividend for over 40 years. It currently has a grossed-up dividend yield of 5.1% at the current Brickworks share price.
Vitalharvest Freehold Trust (ASX: VTH)
Vitalharvest is a real estate investment trust (REIT) which owns farmland. Citrus fruit and berry farms are the only assets that it owns. But under new management it has plans to diversify with other food properties including food processing, food storage and food logistics.
Not only does the ASX dividend share generate fixed rental income from its farms but it also has a profit share agreement with the farms that are rented to Costa Group Holdings Ltd (ASX: CGC).
Farm earnings don't necessarily follow the same path as the economy, so Vitalharvest can offer a fairly uncorrelated distribution. Using the trailing distribution, at the current Vitalharvest share price it offers a yield of 6%. If Vitalharvest returned to 2019 profitability then it could offer a distribution yield of 7.1%.
New acquisitions could unlock more reliable income for Vitalharvest. I'm excited about the direction that Vitalharvest could go in the future. The Vitalharvest share price is trading at a 16% discount to the net asset value (NAV) at 31 December 2019
Foolish takeaway
I really like each of these ASX shares for dividend income. WAM Global clearly offers the most diversification, but Brickworks could offer the most reliable income with its defensive assets.
