The tremendous uncertainty around the economy, inflation, and interest rates means many investors are fleeing to the comfort of ASX dividend shares for passive income.
The great thing is that if you pick the right businesses, the stock could pay you a nice income for a long, long time to come.
Let's take a look at three dividend shares that might fit the bill:
The Big Australian is called that for a reason
There is some nervousness among investors to buy into resources companies at the moment.
That's because the global economy could be heading into a slowdown. Demand (and therefore prices) for minerals generally corresponds with the economic cycle.
But if you take a long-term view, ASX dividend shares don't come much more reliable than BHP Group Ltd (ASX: BHP).
The BHP share price surpassed the $50 mark in January but has since cooled off to trade in the low $40s.
That has not only opened up a tempting buying opportunity but has pumped up the dividend yield to a mouthwatering 9%.
This week, Goldman Sachs recommended BHP as a buy, and the Market Matters analysts are seeking to purchase when it hits the right discount.
"We are looking to follow our long-term plan and increase our BHP exposure back below $40," they said in a memo to clients.
"This stance has not changed as the quality miner continues to rotate between $36 and $50."
Record-setting dividend stock
You can't talk about reliable long-term passive income without mentioning Washington H Soul Pattinson and Co Ltd (ASX: SOL).
This company is famous for increasing its dividends uninterrupted over more than two decades. That's even through the global financial crisis and the COVID-19 recession.
Soul Patts, as an investment business, also has decent capital growth prospects. Over the past five years, the share price has risen more than 73%.
All this means that investors need to look past the 2.8% dividend yield, which isn't as high as some other income stocks.
Put it this way. If you bought Soul Patts shares five years ago, you'd be raking in a 4.9% yield that's fully franked.
Cashing in on Australia's national obsession
Abacus Property Group (ASX: ABP) is a name that investors don't hear much about, yet it's quietly posting a 7% dividend yield for its shareholders.
And with the relentless interest rate rises possibly ceasing soon, real estate assets might have passed, or are close to, the bottom.
The Market Matters team feels like Abacus shares are now in the buy zone after dropping almost 11% over the past year.
"We are bullish from current levels," it stated to its clients.
"We like Abacus Property Group at the bottom of its trading range (here) believing that the market is completely underestimating the value of their self storage operations."
The business might have a significant catalyst to come too.
"A theme that the company has flagged recently as they float the concept of splitting these out into a separate entity."
Admittedly, Abacus is more of a speculative pick than the first two, as its fortunes are at the whim of the real estate market.
