My top 5 ASX dividend stocks for regular income

It’s the ultimate goal for so many investors: to build a share portfolio that provides plenty of dividend income in retirement.

If you’re anything like me, you’re also concerned about preserving your capital and minimising your risks. Fortunately, if you diversify your holdings across different sectors of the economy, you can protect your portfolio from some of the market’s gyrations.

Here are five top ASX dividend stock ideas to get you started building your diversified income portfolio.

Think about it this way: If you owned equal portions of each of these 5 stocks, your portfolio would yield around 5% overall – and that’s before you take into account franking credits. That beats the pants off term deposits.

Your instant 5-share income portfolio

Insurance company Suncorp Group’s (ASX: SUN) dividend yield is 4.8%, fully franked, and analysts are forecasting 2015’s payout to increase a further 10%. The company’s dividends have already effectively doubled since 2011 – and with shares trading at about 15 times forward earnings, right now could be an opportune time to pick up shares.

Investing for income is important for many Australian retireesJust like insurance companies, infrastructure plays can be a godsend to income investors. Consider gas transporter APA Group’s (ASX: APA) 5.1% dividend yield. The company’s consistent payouts make it one of the most reliable options going for prudent investors, and owning the shares offers exposure to Australia’s fast-growing LNG industry, too.

With a hefty 4.6% yield, industrial services business Orica Limited (ASX: ORI) is another idea. The company has substantial offshore income streams which could translate into larger profits — and larger dividends — especially if the Australian dollar trends down against other major currencies.

Don’t forget real estate, another quality source of income for investors. Mirvac Group (ASX: MGR), with its heavy exposure to the high-performing Sydney and east coast property markets, looks to be a solid investment. The current dividend yield is 5%, with steady dividend growth expected through 2016.

Telstra (ASX: TLS) is an investor favourite for good reason. Its 28 cent per share payout is legendary, and with rising profits and millions of customers, the business is not just solid, but growing. In fact, Telstra just increased its dividend for the first time in eight years!

An even better bet than Telstra

My family happily owns Telstra. The fully franked dividend looks rock solid, and the company has got some exciting growth opportunities ahead.

Another stock I already own is one the Motley Fool’s top analysts have just tapped as their number one dividend stock pick for 2014-15 and beyond.

This small-cap growth stock flies under the radar and carries a value price tag, yet has a long growth runway ahead. It pays a hefty fully franked dividend yield of around 5%, which is over 7% when grossed up for franking credits! Enter your email address below to claim your FREE copy of “The Motley Fool’s Top Dividend Stock for 2014-2015.”

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The Motley Fool's disclosure policy is accountable. Of the companies mentioned in his article, Bruce Jackson has an interest in Telstra. Please remember that investments can go up and down. Past performance is not necessarily indicative of future returns. The Motley Fool does not guarantee the performance of, or returns on any investment. All figures are accurate as of 24 June 2014. Authorised by Bruce Jackson.

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