The RBA doesn't have many options of what it can do to assist the economy. I understand why the interest rate has been pushed as low as it has. However, it has made it really hard to generate any income for savers. ASX dividend shares like these might be the answer to the problem:

Pacific Current Group Ltd (ASX: PAC)

I think that Pacific looks like a really good dividend option at the moment. The company describes itself as a global multi-boutique asset management business committed to partnering with exceptional investment managers.

The idea is to invest in investment managers, help them grow with Pacific's expertise and generate good long-term growth.

Some of Pacific's investments performed very well in FY20. Asset manager GQG grew its own funds under management (FUM) from US$25.1 billion to US$44.6 billion in just one year. Excluding boutiques sold and acquired during the year, Pacific's FUM grew by 52% to $93.3 billion.

It was this strength of the FUM that helped it grow its underlying earnings per share (EPS) by 18% to $0.44 which helped the FY20 annual dividend grow by 40% to $0.35 per share. That's strong growth for an ASX dividend share. 

At the current Pacific share price it offers a grossed-up dividend yield of 7.9%. I think

WAM Leaders Ltd (ASX: WLE)

This is a listed investment company (LIC) which targets the larger shares on the ASX. It's very capably run by the team at Wilson Asset Management (WAM).

WAM Leaders aims to actively move around in the large caps to provide shareholders with blue chip exposure, but not just a passive investment style.

Its gross portfolio return (before fees, expenses and taxes) has been comfortably more than the S&P/ASX 200 Accumulation Index. WAM Leaders' portfolio has outperformed the index by 9.7% over the past year and 4.7% per annum over the past three years.

Some of its largest 20 positions at the end of September 2020 included: Challenger Ltd (ASX: CGF), OZ Minerals Limited (ASX: OZL), Downer EDI Limited (ASX: DOW) and Star Entertainment Group Ltd (ASX: SGR).

LICs like WAM Leaders can use the investment gains to fund a stable and steadily growing dividend, which is what WAM Leaders is doing.

At the current WAM Leaders share price it offers a grossed-up dividend yield of 7.6%. However, the WAM Leaders net tangible assets (NTA) is no longer trading at an obvious discount to the share price as it was before.

Australian United Investment Company Ltd (ASX: AUI)

AUI is another LIC that invests in large cap ASX shares, but this one is a long-term investor which owns its positions for the long-term.

It's actually one of the oldest LICs around, it was founded in 1953 by the late Sir Ian Potter and The Ian Potter Foundation Ltd is today the company's largest single shareholder.

AUI owns all of the recognisable names like CSL Limited (ASX: CSL), Commonwealth Bank of Australia (ASX: CBA), Transurban Group (ASX: TCL), Rio Tinto Ltd (ASX: RIO) and BHP Group Ltd (ASX: BHP).

One of the most attractive things about AUI is its dividend record. It's a very reliable ASX dividend share. Its website outlines that it has grown or maintained its dividend every year going back to 1993.

Another great benefit of AUI is its extremely low operating cost. In FY20 its management expense ratio (MER) was just 0.12%, which is one of the lowest on the ASX.

At the current AUI share price it offers a grossed-up dividend yield of 6.2%.

The post Beat the low interest rate with these ASX dividend shares appeared first on The Motley Fool Australia.

I can totally understand why people want to grow their dividend income because of what's going on right now. COVID-19 has caused a lot of uncertainty. The great thing about ASX shares is that they are among the best businesses in their industry, perhaps the best in the country. You can usually rely on them for a decent flow of dividends. 

Whilst March 2020 and April 2020 certainly looked rough with the rapid spread of the coronavirus and the restrictions which caused many parts of the country and economy to come to a standstill.

But the following six months has shown why it's important to be invested in shares. The recovery by the share market has just been extraordinary.

How to get started replacing your wage with ASX dividend shares

Over the long-term I think that shares, such as ASX shares, have proven that they can generate great returns for investors.

Most businesses make a profit each year and many of them pay out a portion of that profit out as a dividend (or distribution). Businesses can retain some of the profit to re-invest back into the business for more growth.

To get started you just have to start putting money to work into the share market. Pick a broker – there are plenty to choose from like banks or low-cost providers – then add some money and start investing.

There are lots of good choices where you can start your investment journey. You don't have to necessarily start with ASX dividend shares. Picks like Future Generation Investment Company Ltd (ASX: FGX), Future Generation Global Invstmnt Co Ltd (ASX: FGG), Betashares Global Quality Leaders ETF (ASX: QLTY), iShares S&P 500 ETF (ASX: IVV) and Vanguard Msci Index International Shares Etf (ASX: VGS) could be good places to start.

There are lots of calculators to help you work out how much money you may need to add to your portfolio to grow your portfolio to the size you need replace your dividend income. I think Moneysmart's is one of the best calculators out there.

How big does your portfolio need to be?

The necessary size of your portfolio will depend on how much income you're trying to replace and the dividend yield of your portfolio.

For example, if you're trying to replace $40,000 of wage income then a 4% dividend yield would require a $1 million portfolio.

If you had a portfolio with higher yielding ASX dividend shares, say a 6% yield, but you wanted to replace $100,000 of income then you'd need a $1.67 million portfolio.

I'm not going to name every single possible combination, but you get the idea.

For me, I'd be aiming for around a $1 million portfolio with a 5% yield to generate $50,000 of gross income before tax. If I were going to retire, I'd expect not to have to pay certain expenses – like transportation (to work), or mortgage costs because I'd aim to have paid off the mortgage by the time I retire. That would mean I could live off a lower annual income, meaning I'd be okay with a 'smaller' portfolio.

Which ASX dividend shares are worth buying?

It's getting quite hard to find nicely-priced, good quality ASX dividend shares because of how strong the share market has run and how low interest rates are, which has pushed up share prices.

But here are some examples, many of which are in my portfolio:

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) has a grossed-up dividend yield of 3.3%.

Brickworks Limited (ASX: BKW) has a grossed-up dividend yield of 4.2%.

Rural Funds Group (ASX: RFF) has a FY21 distribution yield of 4.9%.

WAM Microcap Limited (ASX: WMI) has a grossed-up dividend yield of 5.2%.

Future Generation Investment Company (FGX) has a grossed-up dividend yield of 6.3%.

Australian United Investment Company Ltd (ASX: AUI) has a grossed-up dividend yield of 6.3%.

The post How to replace your entire wage with ASX dividend shares appeared first on The Motley Fool Australia.

As we've seen this year and over the past few years, businesses like Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP), Telstra Corporation Ltd (ASX: TLS) and Transurban Group (ASX: TCL) have cut their dividends to shareholders.

There are less popular names that have been much more reliable for dividend income. Here are two ASX share ideas for rock solid income:

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Patts is one of the best ASX dividend shares in my opinion. It certainly doesn't offer the biggest yield, but in terms of reliability I think it's the clear leader.

It has grown its dividend every year for the past two decades, including through COVID-19. That's the most reliable growth record on the ASX.

One of the main reasons why it has done so well is its diversification. It owns a variety of different businesses and assets in its portfolio such as TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), Bki Investment Co Ltd (ASX: BKI) and Milton Corporation Limited (ASX: MLT).

Soul Patts funds its dividend purely from the cashflow (dividends and distributions) from its investments, after paying for its expenses. In FY20 it only paid out 57% of its net cashflow as dividends to shareholders. That means 43% of the cashflow can be invested into other opportunities to increase FY21's cashflow.

Not only can Soul Patts grow its dividend from its re-invested capital, but its underlying holdings of ASX shares will also hopefully grow their dividends.

Holdings like Clover Corporation Limited (ASX: CLV), Magellan Financial Group Ltd (ASX: MFG) and Wesfarmers Ltd (ASX: WES) are attractive long-term dividend growth ideas.

I also like that Soul Patts is trying to generate growing profit from good unlisted investments like agriculture, swimming schools, resources and Ampcontrol.

At the Soul Patts share price it offers a grossed-up dividend yield of 3.6%.

Australian United Investment Company Ltd (ASX: AUI)

Australian United Investment (AUI) is a listed investment company (LIC). It was founded in 1953 by the late Sir Ian Potter, and The Ian Potter Foundation Ltd is today the company's largest single shareholder.

It invests in many of Australia's biggest ASX shares including CSL Limited (ASX: CSL), Commonwealth Bank of Australia (ASX: CBA), Transurban, Rio Tinto Limited (ASX: RIO) and BHP Group Ltd (ASX: BHP). But it also has larger weightings to some ASX shares like Diversified United Investment Limited (ASX: DUI), Atlas Arteria Group (ASX: ALX) and Soul Patts which aren't among the biggest 20 shares on the ASX.

Its operating expenses were just 0.12% of the average market value of the portfolio over FY20, which is extremely cheap. The lower the expense ratio of a portfolio investment (like a LIC), the more of the net returns that are left in the hands of shareholders.

AUI has grown or maintained its dividend every year over the past 30 years. That's a very strong record. Very few businesses can point to that level of strength of their dividend payments. Future dividends are not guaranteed to be reliable, but I think it's a good indicator of how AUI likes to operate with regards to dividends.

At the current AUI share price it offers a grossed-up dividend yield of 6.5%. It's trading at a 6% discount to the AUI pre-tax net tangible assets (NTA) per share at 31 August 2020.

Foolish takeaway

Both of these ASX dividend shares have been very reliable over the past two decades. Out of the two I'd prefer to buy Soul Patts because of its higher focus on growth and its wider investment mandate. However, AUI is one of my preferred ways to invest in ASX blue chips.

The post 2 ASX shares to buy for rock solid retirement income appeared first on The Motley Fool Australia.

What is AUI?

AUI is a listed investment company (LIC) which invests in ASX shares. It has been operating since 1953 when it was set up by Sir Ian Potter and the Ian Potter Foundation Ltd is still the largest single shareholder.

AUI's profit numbers

For the half year ended 31 December 2019, AUI generated revenue from ordinary activities of $27.7 million, a fall of 2.6% from last year.

Net profit after tax was $24.5 million, which was down 0.8% from the prior corresponding period, and earnings per share (EPS) declined by 1%. The result included special dividends of $1.05 million. Excluding the special dividends and taxes on those dividends, profit after tax fell 4.4%.

AUI's net asset backing accumulation performance for the half-year to 31 December 2019, assuming all dividends were re-invested, was a rise of 4.4%, compared to the rise of 3.1% of the S&P/ASX 200 Accumulation Index. Don't forget, AUI's return is after taxes & expenses and the impact of gearing for which no allowance is made in the index. Including franking credits, the AUI return was 5.35% and the index's return was 3.8%.

AUI dividend

The Board of AUI decided to declare an interim dividend of 17 cents per share, the same as last year. Considering the slight profit fall, I think this was the right decision. 

What are some of AUI's largest positions?

At the end of January 2020 its six largest positions were: CSL Limited (ASX: CSL), Commonwealth Bank of Australia (ASX: CBA), Transurban Group (ASX: TCL), Australia and New Zealand Banking Group (ASX: ANZ), Westpac Banking Corp (ASX: WBC) and Diversified United Investment Limited (ASX: DUI).

An interesting group and somewhat different to the index, but a bit more growth focused.

Why could AUI be the best dividend share?

Since FY93 AUI has maintained or grown its dividend every single year. There are very few shares on the ASX with that type of record.

It currently has a grossed-up dividend yield of 5% and it's priced cheaper than its net assets disclosed at 31 January 2020. If you're looking for a defensive dividend option then I think this is one of the better options on the ASX with its diversified portfolio and low costs.

The post HY20 result: Is this the best dividend share on the ASX? appeared first on The Motley Fool Australia.

How can it be a blue chip if hardly anyone knows what it is? Well, it's been operating for over sixty years. I think any business that has an operational track record of over six decades is worth saying it's pretty much a blue chip.

But AUI is actually a listed investment company (LIC) which invests in the ASX's large blue chips. So through its underlying holdings it's essentially a blue chip itself.

At the end of September 2019 its largest holdings are Commonwealth Bank of Australia (ASX: CBA), CSL Limited (ASX: CSL), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group (ASX: ANZ), Transurban Group (ASX: TCL) Rio Tinto Limited (ASX: RIO) and BHP Group Ltd (ASX: BHP).

It also owns some smaller businesses that offer more growth potential like SEEK Limited (ASX: SEK), Event Hospitality and Entertainment Ltd (ASX: EVT), Orica Ltd (ASX: ORI) and InvoCare Limited (ASX: IVC).

The reason why it could be called a really good dividend share is that it has maintained or grown its dividend every year since 1993. That's great income security for shareholders. AUI has grown alongside the Australian economy over the past three decades.

At the end of September 2019 it had pre-tax net tangible assets (NTA) of $9.92 per share, meaning it's trading at a 6% discount to the NTA. Operating expenses were only 0.10% of the average market value of the portfolio in FY19, it's one of the cheapest ways to be invested in an ASX portfolio investment.

Foolish takeaway

AUI has a grossed-up dividend yield of 5.5%. It's a solid yield and if I were trying to get exposure to large cap ASX blue chips this might be my preferred way to do it.

The post Why I'd buy this little-known ASX blue chip dividend share for income appeared first on The Motley Fool Australia.

Wage growth is occurring at a very slow pace, so the best thing to do might be to try to boost your income with alternative methods.

A simple solution to make more money would be to get a second job. But when you're paid by the hour it's hard to make a lot of money without working a lot of extra hours at somewhere like Woolworths Group Ltd (ASX: WOW), Coles Group Limited (ASX: COL) and Wesfarmers Ltd (ASX: WES).

Another way to boost your income could be to start a blog about a topic that you have a lot of interest or knowledge in. Writing a blog can be an excellent way of improving your written communication skills. Blogs can generate an income if you attract a decently-sized audience.

Some bloggers promote referral programs of various products or services where they earn a commission if a user signs up to that service or buys the product. There are some people that earn tens of thousands of dollars a month from these programs. Some examples of these referral programs are Amazon books and Uber.

Online video making, such as YouTube, is also a way to generate a good income if you build up a big enough following.

But, by far, I think the best way to build a passive income is owning assets that pay cashflow. An income of $1,000 a month isn't easy to make, but it's certainly possible.

You have to bring an attitude of saving money and spending less than you earn. Doing that will enable you to invest some money into the share market and it will compound over time.

For example, if you just invest $500 a month which returns 10% a year, in 12 years you could have a portfolio worth $128,000 which would generate an annual income of over $12,000 a year if you invest in high-yield ASX shares like Naos Emerging Opportunities Company Ltd (ASX: NCC) and WAM Research Limited (ASX: WAX).

A portfolio worth $240,000 with a dividend yield of 5% would generate the desired income of $12,000. I think that yield is entirely possible if you were to just invest in the ASX market through an investment like Vanguard Australian Share ETF (ASX: VAS), BetaShares Australia 200 ETF (ASX: A200) and Australian United Investment Company Ltd (ASX: AUI) when you include the franking credits.

Foolish takeaway

I can't wait for my portfolio to earn an average of $1,000 of month of passive income.

The post How to generate $1,000 a month in passive income appeared first on The Motley Fool Australia.

Telstra Corporation Ltd (ASX: TLS) is not the dividend king that it once was. National Australia Bank Ltd (ASX: NAB) may cut its dividend again in six months.

However, I believe the below ASX shares will be very reliable dividend payers over the coming years:

Brickworks Limited (ASX: BKW)

The Brickworks dividend has been maintained or grown every single year since 1976, which is an excellent record. I think the dividend can continue to be solid for a number of reasons.

First, its non-cyclical investments provide a good level of dependable cashflow. Its property trust, which it owns a 50% stake of, provides a pleasing level net income and it's growing with rent reviews and the addition of new developments. I like that the property trust is focused on industrial properties that benefit from eCommerce – a growing industry.

Its holding of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) has done superbly and provides a dependable dividend to Brickworks every six months.

The Brickworks Australian Building Products segment is suffering from disappointing activity but this will turn around at some point in the future. Meanwhile, the Glen Gery acquisition in the US opens up a large growth avenue for the long-term.

Brickworks currently has a grossed-up dividend yield of 4.9%.

Australian United Investment Company Ltd (ASX: AUI)

AUI is one of the oldest listed investment companies (LICs) on the ASX. It has been operating since 1953 and aims to give shareholders income and capital growth over the longer-term.

Since 1993 it has maintained or grown its dividend every single year, although growth has slowed since the GFC.

With an expense ratio of 0.10% of the AUI portfolio, it's one of the cheapest ways to be invested broadly into the ASX. It certainly matches some of the best ASX ETFs available right now in terms of costs.

It is invested in all of the leading ASX blue chips including Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group (ASX: ANZ), CSL Limited (ASX: CSL) and Transurban Group (ASX: TCL).

AUI currently has a grossed-up dividend yield of 6%.

Foolish takeaway

I think each of these ASX dividend shares are excellent choices for income over the next decade or two. However, I prefer the idea of owning Brickworks shares because AUI has a sizeable part of its portfolio invested in the major ASX banks, which I'm quite wary of due to falling Australian house prices. I like Brickworks' diversified earnings and assets.

The post 2 very reliable ASX dividend shares appeared first on The Motley Fool Australia.

That means I would be focusing on ASX shares that have long-term growth potential, seemingly can grow their dividend and have a solid starting dividend yield.

These are three solid dividend shares on the ASX:

Brickworks Limited (ASX: BKW)

Brickworks is a diversified building materials business which is currently facing a rough time due to the difficult Australian construction conditions. I think it looks more attractive with the share price down 12% over the past month.

It's an attractive dividend share because it has maintained or grown its dividend every year for decades, with no decreases. Its Property and Investment assets have helped even out its earnings when construction activity wavers.

It currently has a grossed-up dividend yield of 4.7%, and the dividend could keep growing higher if it manages to do well with its US brick manufacturing expansion plans.

Rural Funds Group (ASX: RFF)

Rural Funds is a farmland real estate investment trust (REIT) that leases out vineyards, almonds, macadamias, cotton, cattle and poultry farms to high-quality tenants.

Farmland has been a useful asset for many centuries and should continue to be useful as long as humans get their nutrition from farmland. Inflation and a growing population should help Rural Funds grow its distribution for many years to come.

Rural Funds aims to increase its distribution by 4% a year, driven by rental increases built into its contracts. It currently has a FY19 distribution yield of 4.7%.

Australian United Investment Company Ltd (ASX: AUI)

This is one of the oldest listed investment companies (LICs) on the ASX, it invests in many of the biggest businesses on the ASX like Commonwealth Bank of Australia (ASX: CBA) and BHP Group Ltd (ASX: BHP). The strength of the Australian economy has helped AUI grow over the past couple of decades.

It has increased or maintained its dividend each year going back to at least FY93, offering reliable income security for shareholders.

AUI has a grossed-up dividend yield of 6.2%, which looks attractive compared to current interest rates.

Foolish takeaway

I expect each of these ASX shares can at least maintain their dividends for many years to come. It would take an Australian GFC for a dividend cut to be on the cards. At the current share prices I think Brickworks looks like the best choice because of the discount to its underlying assets.

The post 3 very reliable ASX dividend shares appeared first on The Motley Fool Australia.

With that in mind, I think these three ASX shares are worth considering:

WAM Research Limited (ASX: WAX)

WAM Research is a listed investment company (LIC) which invests in small and medium businesses that the investment team believe will benefit from a catalyst to boost the share price, otherwise it will sit in cash. The cash is very defensive and protects the portfolio when the market goes down.

This investment process has led to long-term market outperformance and that's why WAM Research has been able to grow its dividend every year since the GFC.

With an impressive profit reserve, WAM Research has a grossed-up dividend yield of 10.2%. Although it's trading at an expensive premium to its underlying assets.

Brickworks Limited (ASX: BKW)

Brickworks is a large construction business that also owns a significant stake of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) which can smooth out earnings in leaner times.

Over the past 20 years the company has maintained or grown its dividend every year. It has been a very reliable dividend payer.

The company has recently been making moves to drive future growth, it has acquired the US' fourth largest brick manufacturer called Glen-Gery for $151 million and has signed a MOU with FBR Ltd (ASX: FBR) to work together.

It currently has a grossed-up dividend yield of 4.3%.

Australian United Investment Company Ltd (ASX: AUI)

Australian United is an old LIC which has been going for more than 50 years. It invests mostly in all the blue chips on the ASX like Commonwealth Bank of Australia (ASX: CBA) and CSL Limited (ASX: CSL).

Australian United has maintained or increased its dividend every year since 1993 – not getting a dividend cut for more than 25 years is really good and it has been extremely reliable for shareholders in income terms.

It has a grossed-up dividend yield of 5.9%.

Foolish takeaway

All of these ASX shares have been rock-solid dividend payers since the GFC and are very likely to continue to be reliable dividend payers for a long time to come. The only time I'd worry is if another GFC comes along.

The post 3 very reliable ASX dividend shares to buy appeared first on The Motley Fool Australia.

The concept is simple. Save as much money as you can (while happily living your life) and squirrelling it away into investments and then let compound interest help you get to FIRE. Many of them are aiming to retire by 40 or even earlier.

Some aspirational Aussie FIRE-ers may have previously said that investing in residential real estate could be a good strategy to achieve FIRE. But falling house prices, low rental yields, rising interest rates and the need to take on huge debt are several reasons why this avenue doesn't look so good at the moment.

Instead, I think investing in shares is the best way to go.

To me, there are three stress-free options to get to FIRE with ASX shares:

Broad index-based Exchange traded funds (ETFs)

General investing advice would say that the simplest way to get to a strong wealth position is to go with ETFs, which gives you exposure to a broad range of shares in one investment. It makes investing very easy. There's hardly any initial research except choosing one of the ETFs amd you don't have to worry what's happening at individual companies along the way. You just regularly invest throughout the economic cycles.

Considering most share market indexes have returned an average of 10% a year, it would be a great strategy.

Just one, or a mix, of iShares S&P 500 ETF (ASX: IVV), Vanguard US Total Market Shares Index ETF (ASX: VTS), Vanguard MSCI Index International Shares ETF (ASX: VGS), Vanguard Australian Share ETF (ASX: VAS) and BetaShares Australia 200 ETF (ASX: A200) could be great choices for their low costs and pleasing returns.

Listed investment companies (LICs)

Another option is to go for LICs. Most LICs also have diverse portfolios, they choose what shares to buy (and sell) and have more control over the dividend payments to smooth them out through economic booms and busts.

Some of the old-school LICs have low management fee costs and stable dividend histories such as Australian United Investment Company Ltd (ASX: AUI), Whitefield Limited (ASX: WHF), Australian Foundation Investment Co. Ltd. (ASX: AFI) and Argo Investments Limited (ASX: ARG). They generally have matched the returns of the market over the long-term.

However, there are also other LICs that try to generate market-beating returns whilst paying out pleasing dividends such as WAM Research Limited (ASX: WAX), WAM Microcap Limited (ASX: WMI), MFF Capital Investments Ltd (ASX: MFF), Naos Emerging Opportunities Company Ltd (ASX: NCC) and Clime Capital Limited (ASX: CAM)

High-quality alternatives

Other simple ways of reaching your FIRE wealth target could be long-term alternatives such as listed investment trusts (LITs), two of my favourites are Magellan Global Trust (ASX: MGG) and Ophir High Conviction Fund (ASX: OPH), which have outperformed their index benchmarks materially since inception.

Real estate investment trusts (REITs) are worth considering, such as farm landlord Rural Funds Group (ASX: RFF).

There are also interesting individual companies that could generate non-cyclical market-beating returns such as water entitlement business Duxton Water Ltd (ASX: D2O) and investment conglomerate Washington H. Soul Pattinson and Co. Ltd (ASX: SOL).

If I could only pick three of the above ASX shares, aside from the globally-focused ETFs, to help me reach FIRE it would be Soul Patts, Magellan Global Trust and MFF Capital.

The post How to retire early (FIRE) with ASX shares appeared first on The Motley Fool Australia.

The job of the LIC is to simply invest into other shares on the stock exchange. There are different types of LICs such as ones that have low operating costs and fairly closely follow an index, others invest completely different to an index.

Some investors just purely invest in LICs (and exchange-traded funds (ETFs)) and do very well.

So, if you want to give the investing reins to someone else then these LICs could be good to invest in with $50,000:

Australian United Investment Company Ltd (ASX: AUI) – $15,000

My pick of the low-cost LICs is Australian United Investment Company, which has been going since 1953 when it was set up by Sir Ian Potter, The Ian Potter Foundation is still the LIC's largest single shareholder.

Since the 1993 financial year it has maintained or increased its dividend every single year, which is very attractive. In FY18 its management fee was only 0.10%, which is very cheap compared to many other LICs.

At the end of December 2018 its underlying assets were worth $8.44 per share before tax, compared to the current share price of $8.26, so it's trading at a slight discount.

Most of the ASX's blue chips are trading cheaper compared to recent times, so it could be a decent time to buy Australia United shares whilst its underlying holdings are cheaper. It has as grossed-up dividend yield of 6%.

WAM Microcap Limited (ASX: WMI) – $10,000

WAM Microcap is the LIC in the Wilson Asset Management stable that invests in the smallest shares on the ASX, ones with market capitalisations under $300 million.

I believe small caps can generate the biggest returns because their small size means they have the biggest room to grow. Big businesses just don't have the growth horizons that they did when they first started.

Most investors don't look at small caps, so the businesses in WAM Microcap's hunting ground usually trade on a smaller earnings multiple than their large peers.

Since inception WAM Microcap's portfolio has delivered a return of 14% per annum before fees and expenses, despite the market volatility. Over the long-term I think this could be one of the highest-performing LICs.

The current grossed-up dividend yield of 4.4% is a bonus.

Naos Emerging Opportunities Company Ltd (ASX: NCC) – $10,000

This LIC operated by Naos also aims for the smallest businesses on the ASX, ones with market capitalisations under $250 million, so it can also benefit from the small cap dynamics I mentioned in the WAM Microcap section above.

Naos looks to invest in a small number of businesses that it has a high-conviction in. Why hold your 40^th best idea?

Despite the market declines over the past few months, this LIC's portfolio has returned 12.4% per annum since inception in February 2013 before fees but after expenses.

It also aims to pay a growing sustainable stream of fully franked dividends from the gains it makes. It currently has a grossed-up dividend yield of 9.5%.

WAM Global Limited (ASX: WGB) – $15,000

WAM Global is a LIC that invests in overseas shares. The ASX only represents 2% of the total global share market, so you'd think there are some good opportunities in the other 98% of the world.

Indeed, US, Asian and European shares generally trade on a cheaper earnings multiple than their Australian counterparts.

I believe (and hope) that the WAM investment strategies and philosophy will work well on the global share market stage as it has done on the ASX.

Foolish takeaway

I think all four of the above shares are priced attractively today. WAM Global, Naos and WAM Microcap all have the potential to beat the ASX market over the long-term, which is why I own some of them in my portfolio for the growing dividends and potential capital growth.

The post How I'd invest $50,000 into LICs today appeared first on The Motley Fool Australia.

Over the past year the Argo share price has fallen nearly 7%. I am always open to investing in quality shares if they are trading at better value.

Argo is one of the oldest and biggest listed investment companies (LICs) on the ASX. It was established in 1946 and now has a market capitalisation of around $5.4 billion, which makes it one of the largest 100 listed companies.

The job of a LIC is simply to invest in other shares on behalf of shareholders. Argo looks to generate long-term returns for shareholders, providing a mix of capital and dividend growth.

Argo is different to many other LICs in that it's internally managed, meaning it doesn't charge fees to shareholders and that results in low operating costs. In FY18 its total operating costs were only 0.15% of average assets at market value. This is attractive because lower costs mean higher net returns for investors.

Another reason to like Argo is the stability of its dividend, it has paid a dividend every year since inception. It wasn't able to maintain its dividend during the GFC like some other old LICs, but a reasonaly small reduction was probably the sensible thing to do.

Many of Argo's top holdings are very recognisable including Westpac Banking Corp (ASX: WBC), BHP Group Ltd (ASX: BHP), Macquarie Group Ltd (ASX: MQG) and Australia and New Zealand Banking Group (ASX: ANZ).

Interestingly, it also holds two old LICs as part of its top 20 holdings, being Australian United Investment Company Ltd (ASX: AUI) and Milton Corporation Limited (ASX: MLT).

The problem for Argo is that its top holdings, which are mostly Australia's largest blue chips, haven't been performing very well lately. For example, the big banks are suffering because of a falling housing market and the Royal Commission. A LIC can only perform as well as its investments.

Foolish takeaway

Argo currently offers a grossed-up dividend yield of 5.9%. Whilst it has been a dependable source of income, it's currently trading at a 4.6% premium to the NTA declared at the end of December 2018. Therefore, it might be a better investment idea to simply invest in the Vanguard Australian Share ETF (ASX: VAS).

However, I believe ASX investors can do better than the index by focusing on individual growth shares for the long-term.

The post Is the Argo share price a buy? appeared first on The Motley Fool Australia.

Argo was set up in 1946, it has been managing people's money ever since. Argo aims to create a diversified investment portfolio that provides long-term dividend growth and capital growth.

It has around 100 holdings, with 20 of the largest blue chips accounting for more than 60% of the Argo portfolio value and the dividend income. I'm sure you recognise the names of its largest holdings including Westpac Banking Corp (ASX: WBC), Macquarie Group Ltd (ASX: MQG), Australia and New Zealand Banking Group (ASX: ANZ) and BHP Billiton Limited (ASX: BHP).

However, some of its other top 20 holdings don't quite match up with the ASX 20 including Australian United Investment Company Ltd (ASX: AUI) and Milton Corporation Limited (ASX: MLT).

One of the best reasons to like Argo is its extremely low operating costs. It's internally managed and its total operating costs were 0.15% of the average assets at market value for FY18. There are few investments on the ASX with a lower annual cost.

Another reason to like Argo is its steady dividend. Although the dividend hasn't been increased or maintained every single year over the past two decades like some other investment companies, you can see the long-term growth over time and the dividend per share payout will likely have doubled between 2000 and 2019.

Foolish takeaway

Argo is currently trading with a grossed-up dividend yield of 5.9%. The underlying value of Argo's portfolio per share was $7.42 at the end of November and it's currently trading at $7.58 despite a fall today – so it seems to be trading at a premium.

Whilst Argo is a solid source of long-term dividend income for shareholders like retirees, its total returns may continue to be low as long as its biggest holdings like the banks are underperforming. I think there could be better shares out there for growth.

The post Is Argo the best LIC on the ASX? appeared first on The Motley Fool Australia.

The best place to start when looking at these vehicles, is with the oldest investment companies. Quite often, they will be the most conservatively managed, have the lowest costs, and will have been through many, many market cycles.

Here are two LICs which get much less attention, yet have delivered an impressive income stream for shareholders:

Diversified United Investment Limited (ASX: DUI)

Founded in 1991, DUI holds a portfolio of shares for their current income and potential for capital growth over time.

The company holds shares in many large companies including CSL Limited (ASX: CSL) and Commonwealth Bank of Australia (ASX: CBA). It also invests in international ETFs which make up around 15% of the portfolio.

DUI is run at rock-bottom costs of 0.15% per annum, which includes the fees for the ETFs it holds. And its dividend history is nothing short of incredible. Since 1992, dividends have either been stable or increased every year.

In fact, DUI has been able to grow its dividend by 6.6% per annum over the last 25 years. Shares currently trade at a discount to NTA, and a gross dividend yield of 5%, including franking credits.

Australian United Investment Limited (ASX: AUI)

Managed by the same investment team as DUI, this company was founded in 1953 by Sir Ian Potter. Today, the Ian Potter Foundation Ltd is the largest shareholder of both AUI and DUI, and it's clear that income stability is a key focus for each company.

AUI holds a portfolio of 40-50 shares on the ASX which it deems to have good prospects for income and growth over the medium to long term. The company is run at an ultra-low-cost 0.10% per annum, which is about as cheap as it gets.

AUI's dividend history is also impressive. Since 1992, dividends have either been stable or increased every year. The company has grown its dividend by an average of 6.4% per annum.

Shares currently trade at a discount to NTA of over 5%, and a gross dividend yield of 6%, including franking credits.

Foolish takeaway

It's my view that LICs like this are perfect for people wanting to live on a stable and increasing stream of dividends. You simply won't get this level of income stability with an index fund. This can make all the difference when the markets head south, because reliable dividends often mean more to the retiree than chasing high returns.

The post 2 proven LICs that have never cut dividends in 25 years appeared first on The Motley Fool Australia.

Low interest rates means terrible income from the bank and it's also pushed up asset prices, reducing the net yield from property and reducing the dividend yield from shares. Most shares with genuine high yields are riskier than most.

That's why listed investment companies (LIC) are so attractive – the company structure means they can pay out capital gains & income received out as dividends to shareholders in a controlled way.

Here are three LICs with big yields:

Clime Capital Limited (ASX: CAM)

Clime is a small LIC, but I like its strategy. It invests in ASX large caps, medium caps, small caps and international shares. Some of its top holdings include Webjet Limited (ASX: WEB), Afterpay Touch Group Ltd (ASX: APT), Collins Foods Ltd (ASX: CKF), Facebook and Alphabet.

It has an attractive quarterly dividend and currently offers a grossed-up dividend yield of 7.8% and has increased its dividend each year over the past five years.

WAM Capital Limited (ASX: WAM)

WAM Capital is the leading LIC run by Wilson Asset Management. Since inception in August 1999 its portfolio has delivered an average return per annum of 17.5% before fees and expenses.

Whilst the returns have somewhat slowed due to size, it is still averaging mid-teen returns over the last few years. It has kept a lot of cash on hand during this time as well, which provides safety and opportunity in tough times.

It has increased its dividend each year since the GFC and currently has a grossed-up dividend yield of 9%.

Australian United Investment Company Ltd (ASX: AUI)

This LIC has been going for over 50 years and has maintained or grown its dividend every year for the past 25 years. However, the dividend growth could be described as slow-and-steady.

It has ridden the wave of Australia's unbroken economic growth thanks to Australia's blue chips like Commonwealth Bank of Australia (ASX: CBA) and Wesfarmers Ltd (ASX: WES) being consistent performers.

It currently has a grossed-up dividend yield of 6%.

Foolish takeaway

All three LICs have yields that offer income at least twice as good as the best bank interest in Australia. Whilst the WAM Capital premium is daunting, the yield is the most attractive and that's the one I'd pick purely for income. However, it might offer a better yield in a couple of months after the dividend has been paid.

The post 3 LICs with big yields appeared first on The Motley Fool Australia.

It could be classed as one of the safest dividend shares on the ASX because it has maintained or increased its dividend every year since 1992. Keeping this streak going for more than 25 years is very impressive in my opinion.

Australian United makes long-term investments in Australia's largest companies. This approach means little brokerage costs and few capital gains events each year – allowing the portfolio to compound.

According to Baillieu Holst, Australian United has an extremely low annual management expense cost of 0.1% per annum. This is about as cheap as you can get for an ASX index-like portfolio.

Speaking of the portfolio, I like how some of its main positions do differ slightly to the index. Its weightings of CSL Limited (ASX: CSL) and Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), for example, are bigger.

Over the past year its NTA performance has been solid, though it closely matched the ASX Index's performance which also had a good year.

Foolish takeaway

For investors such as retirees looking for a dependable flow of dividends year to year, I think Australian United is one of the better options out there. However, like any portfolio-type investor it relies on its underlying holdings to do well.

At the moment I can't see Australian United generating much returns beyond the dividend in the near term – capital growth could be sluggish over the next few years. I am also looking for capital growth if I buy shares with a decent yield.

The post Is this the safest dividend share on the ASX? appeared first on The Motley Fool Australia.

One of the best ways to follow this idea would be listed investment companies (LICs). They are like normal companies except their only job is to invest in other businesses on behalf of shareholders.

There are dozens of LICs out there. One of the oldest and perhaps the best is Australian United Investment Company Ltd (ASX: AUI).

It was set up in 1953 by Sir Ian Potter and The Ian Potter Foundation Ltd is today the Company's largest single shareholder. Being sixty five years old and counting shows it is a long-term business.

The LIC takes a long-term view and invests in shares it thinks that can provide income and capital growth over time. Its top six holdings are Commonwealth Bank of Australia (ASX: CBA), Australia and New Zealand Banking Group (ASX: ANZ), CSL Limited (ASX: CSL), Westpac Banking Corp (ASX: WBC), Wesfarmers Ltd (ASX: WES) and BHP Billiton Limited (ASX: BHP).

I think Australian United Investment could be a good choice for retirees because of its dividend. The grossed-up yield is currently 5.6%. However, it's the dividend history and the intention of the company that I like the most.

The dividend has been maintained or increased each year since 1992. That means the LIC has provided a solid source of income for shareholders for over a quarter of century. Knowing your income is likely to be the same or higher each year is very reassuring.

Foolish takeaway

Obviously, the strength of Australian United Investment over the past two decades has been down to the underlying holdings and Australia's impressive economic growth. I don't think the next decade will be as strong as the last two, but I'm sure Australian United Investment will endeavour to continue growing the dividend over time.

The post This LIC is a great idea for any retiree's portfolio appeared first on The Motley Fool Australia.

If you're trying to find lower volatility and also a seemingly safe dividend share then Australian United Investment Company Ltd (ASX: AUI) could be one of the good options on the ASX.

It's a listed investment company (LIC) that has been operating since 1953 when it was founded by Sir Ian Potter. The Ian Potter Foundation Ltd remains the Company's largest single shareholder after all of this time.

Australian United's objective is to take a medium to long term view and to invest in a diversified portfolio of Australian equities which have the potential to provide income and capital appreciation over the longer-term.

This approach has led to Australian United being able to maintain or increase its dividend each year since 1992, including through the GFC.

It has a portfolio of some of the largest blue chips including Commonwealth Bank of Australia (ASX: CBA), Australia and New Zealand Banking Group (ASX: ANZ), Westpac Banking Corp (ASX: WBC), CSL Limited (ASX: CSL) and Wesfarmers Ltd (ASX: WES).

The strength of Australian United has been down to the reliability of its underlying holdings and the consistent Australian economic growth.

Is it the safest shares on the ASX?

It certainly has a decent claim to that title considering that its portfolio is diversified and it has held good long-term picks so far.

I'm not sure if it's the safest, I'd say something like Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) would be safer because it has produced stronger returns and has a longer-term dividend increase history.

The post Is this the safest dividend share on the ASX? appeared first on The Motley Fool Australia.

If I were to invest in dividend shares I'd want to go for businesses that have reliable dividend histories and have every chance of growing at a good rate over the coming years.

But, the potential dividend ideas also have to pay a good yield, or else I may as well keep cash in the bank.

Here are three ideas:

Naos Emerging Opportunities Company Ltd (ASX: NCC)

This is a listed investment company (LIC) that invests in shares that have market capitalisations less than $250 million, those shares are usually industrial companies. I like this LIC because it invests at least for the medium-term, if not the long-term, into shares that have long-term potential.

Over the past five years its portfolio has averaged 17.09% per annum before fees, which is a good performance in anyone's book. Why is it a good dividend stock? It has increased its dividend each year since it started paying dividends in the second half of FY13. It currently has a grossed-up dividend yield of 7.85%.

Australian United Investment Company Ltd (ASX: AUI)

AUI is another LIC, but this one is a lot older. This one has been going since 1953 when it was set up by Sir Ian Potter.

It invests in all the usual blue chip shares like Commonwealth Bank of Australia (ASX: CBA), Australia and New Zealand Banking Group (ASX: ANZ), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB) and Wesfarmers Ltd (ASX: WES).

Its returns haven't been as strong as Naos but it has a dividend growth or maintained streak almost as old as I am, going back to 1992. In other words, if you invested in 1992 the dividend hasn't been decreased for at least 26 years.

AUI currently has a grossed-up dividend yield of 5.8%.

National Storage REIT (ASX: NSR)

National Storage is the largest self-storage provider in Australia and New Zealand. Self-storage is going through a bit of a boom at the moment. The price of residential real estate has gotten so high that it is far more economical to rent a National Storage unit to store items in than it would be to put it in a spare bedroom which could cost hundreds of thousands of dollars for that extra bedroom in the house.

National Storage has increased its distribution each year since 2014 and it currently has a trailing distribution yield of 5.79%.

Foolish takeaway

All three are good dividend options in my opinion. If you want to play it 'safe' then AUI is probably the best bet but I think the Naos is the best dividend option because it's investing for strong growth, it has the biggest yield and it is increasing its dividend at the fastest rate out of the three.

The post 3 quality dividend shares with yields over 5.75% appeared first on The Motley Fool Australia.

Of course, just because a share has a decent yield doesn't mean it's automatically a buy. To be a good dividend share the underlying business needs to have a promising future too.

Below are three ideas of shares offering good income:

Folkestone Education Trust (ASX: FET)

Folkestone describes itself as the largest ASX-listed real estate investment trust (REIT) that invests in early learning properties.

Childcare is a rising industry due to the growing population and number of births in Australia.

Folkestone is steadily increasing its property portfolio, as well as growing its profit and distribution.

It's currently trading with a distribution yield of 5.23%.

Australian United Investment Company Ltd (ASX: AUI)

Australian United is one of the oldest listed investment companies (LICs) on the market having operated for over 60 years.

The LIC invests in all the major blue chips like Commonwealth Bank of Australia (ASX: CBA), Australia and New Zealand Banking Group (ASX: ANZ), CSL Limited (ASX: CSL) and Transurban Group (ASX: TCL).

Australian United has increased or maintained the dividend every year going back to 1992.

It's currently trading with a grossed-up dividend yield of 5.73%.

Paragon Care Ltd (ASX: PGC)

Paragon is a small cap healthcare business that is steadily acquiring other businesses to add scale and open up new markets.

Healthcare is an attractive industry to grow in because of the ageing population which should mean more patients. This should turn into rising demand for Paragon's products.

Paragon has increased its dividend each year since it started paying dividends and is currently trading with a grossed-up dividend yield of 5.91%.

Foolish takeaway

All three shares look pretty good for their potential income. At the current prices I'd definitely go for Paragon because it offers the best growth potential and it has the best dividend yield.

The post 3 dividend stocks with yields over 5% appeared first on The Motley Fool Australia.