2 ASX dividend shares I'd buy for reliable payouts

These businesses offer income investors a lot of positives.

| More on:
Excited woman holding out $100 notes, symbolising dividends.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

I'm always on the lookout for ASX dividend shares that I believe can add reliability or helpful cash flow to my portfolio.

Dividends aren't guaranteed in the same way interest from a term deposit is. But, some businesses have a more reliable dividend record than others.

If we just buy the most reliable names, then we can have greater confidence in the level of cash flow we think we're going to get. On the other hand, I wouldn't be confident about what dividends the miner Fortescue Ltd (ASX: FMG) may pay because of volatile iron ore prices.

I'll highlight two names I think offer very compelling payouts.

Rivco Australia Ltd (ASX: RIV)

This business is unique on the ASX – it owns water entitlements that it can lease to irrigators on short-term or long-term leases.

I like this ASX dividend share because it gives investors the ability to indirectly gain exposure to the important agricultural sector without having the operational risk of running farms.  

Pleasingly, the business can benefit from both the lease income and the potential long-term growth in the value of the entitlements.

Thanks to the decision of the company to pay a sustainable dividend, rather than the biggest it could, it has steadily grown its payout every six months since 2017.

The last two dividends declared by the business come to a grossed-up dividend yield of 7.3%, including franking credits.

The business is also trading at an attractive discount. The Rivco share price is currently at a 7.25% discount to the latest monthly net asset value (NAV) per share.

Rural Funds Group (ASX: RFF)

Rural Funds is another ASX dividend share that also gives investors exposure to the agricultural sector.

The real estate investment trust (REIT) owns a national portfolio of farms that are leased to high-quality tenants. Those farm types include cattle, vineyards, almonds, macadamias and cropping. I like that for the diversification it can add to my portfolio.

Prior to COVID-19, the business had an impressive record of growing its distribution by 4% per year. However, this was stopped by the high interest rate environment. Even so, the business has managed to maintain its annual payout each year since then.

It's expecting to pay an annual distribution of 11.73 cents per unit in FY26, translating into a forward distribution yield of 5.8%.

With rental increases built into most of its contracts (either fixed increases or linked to inflation), I think the prospects are positive for both rental profit growth and distribution growth in the longer-term.

It also looks like it's trading at a really good value. At 30 June 2025, it reported having a NAV of $3.08. That means it's currently trading at a 35% discount, which I'd call a really appealing level to buy at.

Motley Fool contributor Tristan Harrison has positions in Rivco Australia and Rural Funds Group. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Rural Funds Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Dividend Investing

Happy miner with his hand in the air.
Resources Shares

Up 15%: Everything you need to know about the new South32 dividend

South32's latest dividend will make investors happy.

Read more »

Smiling woman with her head and arm on a desk holding $100 notes out, symbolising dividends.
Dividend Investing

These are my top ASX passive income picks

I’m focused on dependable cash flow and dividends that can grow over time.

Read more »

A woman wearing glasses and a black top smiles broadly as she stares at a money yarn full of coins representing the rising JB Hi-Fi share price and rising dividends over the past five years
Dividend Investing

Want to build up a second income? These 2 ASX shares are a buy

These businesses are providing investors with a rising payout.

Read more »

Beautiful young woman drinking fresh orange juice in kitchen.
Dividend Investing

Buy this $11 billion ASX share for healthy growth and income

Brokers think that earnings for this defensive healthcare stock could exceed 20%.

Read more »

Man holding Australian dollar notes, symbolising dividends.
Dividend Investing

This ASX dividend stock is projected to pay a 13% yield by 2029

Dividend yields on the ASX don’t get much bigger than this.

Read more »

Excited couple celebrating success while looking at smartphone.
ETFs

The ASX just got a new ETF that pays monthly dividends

This ETF will pay 12 dividends a year.

Read more »

An electrician looks at a power board using a torch in the dark
Dividend Investing

Income investors: You don't want to miss AGL's latest dividend

AGL's latest dividend is worth a look.

Read more »

Smiling man holding Australian dollar notes, symbolising dividends.
Bank Shares

Here's everything you need to know about the new CBA dividend

CBA's latest dividend is a doozy.

Read more »