You can give yourself a payrise by investing in the ASX dividend shares that I’m going to talk about in this article.
The great thing about some ASX businesses is that they can continue to pay solid dividends (or distributions) to shareholders even if there is a recession in the economy and even if there is volatility.
Some ASX shares can continue to pay attractive dividends to investors for many years to come.
I believe these ASX dividend shares are attractive ideas to boost your income:
WAM Leaders Ltd (ASX: WLE)
WAM Leaders is a listed investment company (LIC) which targets large shares on the ASX.
One of the main benefits of a LIC is that it can make investment returns and turn that profit into dividends for shareholders. Normal companies make profit from selling products or services. LICs make their profits with investment profits.
WAM Leaders has been steadily growing its dividend for a few years now. The LIC was formed in May 2016 and it started paying a dividend in FY17. The ASX dividend share’s portfolio has made an average return of 10.6% (before fees, expenses and taxes) per annum since inception, outperforming the S&P/ASX 200 Accumulation Index by 3.5% per annum.
The LIC is currently undertaking a capital raising. WAM Leaders has announced the board’s intention to increase its FY21 interim dividend to 3.5 cents per share, which would be a 7.7% increase compared to the FY20 interim dividend.
At the current WAM Leaders share price it’s offering a forward grossed-up dividend yield of at least 8.1%.
Vitalharvest Freehold Trust (ASX: VTH)
The ASX dividend share generates rent in two different ways. It receives fixed rent for the farms. It also receives variable rent from its tenant, Cost Group Holdings Ltd (ASX: CGC). The variable rent comes from a profit-share agreement where Vitalharvest receives 25% of the profit from those farms.
The FY20 variable component was the lowest it has been in years, yet Vitalharvest was still able to pay a distribution which equates to a 6.1% distribution yield at the current Vitalharvest share price. That’s a good yield in my opinion.
I expect the ASX dividend share’s distribution can grow organically as variable returns to normal as the drought lifts and demand for food increases.
I’m excited by the new manager’s plans to buy food-related assets which could provide more consistent rent like food storage buildings and food processing properties.
The ASX dividend share is currently trading at a 14% discount to the Vitalharvest net asset value (NAV) at 30 June 2020.
Pacific Current Group Ltd (ASX: PAC)
Pacific is a business that is an asset management outfit which helps its investment partners by using its resources like capital, institutional distribution capabilities and operational expertise to help partners excel.
Excluding non-cash impairments, Pacific had a strong FY20 result with underlying earnings per share (EPS) rising by 18% to $0.51. This gave the board the confidence to increase the full year dividend by 40% to $0.35. That was after a final dividend of $0.25 per share.
If the company’s net profit can keep going up then I think the dividend could continue to rise. In FY20 alone its funds under management (FUM) grew by 52% (excluding boutiques sold and acquired during the year) to $93.3 billion. If it can grow its FUM by more than 10% a year then the dividend could continue to grow nicely over the coming years as well.
At the current Pacific share price it offers a grossed-up dividend yield of 8.25%.
I like each of these ASX dividend shares. Pacific could produce good market-beating returns if its FUM keeps rising. WAM Leaders offers nice diversification and decent returns, whilst Vitalharvest offers an alternative investment into agriculture for ASX investors.