It can be tricky to know where to start for a beginner looking to invest in ASX shares. There are so many different investment types to choose from, including individual listed companies as well as portfolio investments like exchange-traded funds (ETFs).
There isn't a 'right' answer about what to invest in first but I think ASX dividend shares can be a good place to start.
Now might be a useful time to start investing as well, as many ASX shares are struggling to make gains in a bearish 2022 and their share prices are lower as a result.
Below are three ASX dividend shares that I think have potential for long-term growth and are companies that most people can relate to.
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Wesfarmers Ltd (ASX: WES)
Wesfarmers operates several of the country's most recognised retail businesses including Bunnings, Officeworks, Kmart, Target, Catch and Australian Pharmaceutical Industries (Priceline).
This ASX dividend share is one of the oldest businesses on the ASX. It can trace its origins to 1914 as a Western Australian farmers' cooperative. But now its operations are spread across home improvement and outdoor living, apparel, general merchandise, office supplies, health, beauty and wellbeing, as well as chemicals, energy, fertilisers and industrial and safety products.
It is also involved in a lithium mining project which will become operational in the next few years.
Wesfarmers says that its primary objective is to provide a "satisfactory return to its shareholders". Part of that return involves a dividend. Wesfarmers has a trailing grossed-up dividend yield of 5.2%.
The ASX dividend share can continue to grow the business as its current operations grow and it also makes acquisitions.
Premier Investments Limited (ASX: PMV)
Premier Investments is involved in well-known brands in the retail sector. It owns a number of clothing businesses including Peter Alexander, Just Jeans, Jay Jays, Portmans and Dotti. The company also owns Smiggle, as well as large stakes in Breville Group Ltd (ASX: BRG) and Myer Holdings Ltd (ASX: MYR).
Not only does Premier Investments offer a grossed-up dividend yield of 6%, but it is growing earnings too. It's achieving online sales growth, boosting its profit margins and growing Smiggle internationally.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
Soul Pattinson is the final ASX dividend share that I think could be a good idea for a beginner investor.
It's one of the oldest companies on the ASX – it has been listed for more than 100 years. I think it will be around for many years to come.
Soul Pattinson operates as an investment house. This means it invests in other companies as it builds a business empire that spans resources, agriculture, telecommunications, swimming schools, electronics, financial services, technology and so on.
For me, one of the key attractions of this business is that it can invest in any sector that it wants to, which allows it to find a broad range of opportunities. It also allows it to future-proof the business.
This company holds the current ASX record for consecutive dividend increases stretching back to 2000. It also has a grossed-up dividend yield of 3.6%.
