The ASX is a great place to invest to boost your income with very reliable dividend shares.
Not every ASX share with a high dividend yield is going to be a very reliable dividend share to buy.
In my opinion, a quality dividend share is one that is able to maintain, and hopefully increase, the dividend every year including through economic issues. The coronavirus is a unique, horrible situation. Many dividend shares have cut their dividends like National Australia Bank Ltd (ASX: NAB) and Sydney Airport Holdings Pty Ltd (ASX: SYD).
Here are three very reliable dividend shares to buy for income:
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
I think that Soul Patts is the best option on the ASX for dividends.
It’s an investment conglomerate that’s invested in a variety of businesses in different industries such as TPG Telecom Ltd (ASX: TPM), Brickworks Limited (ASX: BKW), Australian Pharmaceutical Industries Ltd (ASX: API) and Clover Corporation Limited (ASX: CLV).
It has been going for over a century and is steadily increasing its diversification in its investments. Its latest forays include retirement living and perhaps data centres.
Soul Patts is a very reliable dividend share. It has grown its dividend every year since 2000. It has also paid a dividend every in its listing in the early 1900s. Soul Patts currently offers a grossed-up dividend yield of 4.5%.
APA Group (ASX: APA)
APA is my favourite infrastructure dividend idea. Sydney Airport and Transurban Group (ASX: TCL) are more popular but I think APA is more defensive.
It owns a vast network of 15,000km of natural gas pipelines around Australia with a presence in every mainland state and the Northern Territory. It also owns or has interests in gas storage facilities, gas-fired power stations and renewable energy generation (wind and solar farms). APA owns, or manages and operates, a portfolio of assets worth more than $21 billion and delivers half the nation’s natural gas usage.
I think APA Group is a very reliable dividend share. The energy giant funds its distribution from its annual cashflow. It continues to invest in new opportunities, which will hopefully increase future cashflow and therefore fund even higher distributions.
APA has grown its distribution every year for a decade and a half. It currently offers a distribution yield of 4.3%.
Rural Funds Group (ASX: RFF)
Rural Funds is a real estate investment trust (REIT) which owns a variety of farm types including cattle, cotton, almonds, macadamias and vineyards.
All of its farms have rental indexation built into the contracts. Those increases are linked to either a fixed 2.5% increase, or CPI inflation, plus market reviews. This is a large reason why management think the distribution can keep growing by 4% per annum.
Currently the REIT is also investing in productivity improvements at its farms. This boosts the rental potential and value of the farm.
I think Rural Funds is a very reliable dividend share. It has increased its distribution each year since it started paying one several years ago. It currently offers a FY21 distribution yield of 5.6%.
Foolish takeaway
In my opinion, each of these income ideas are very reliable dividend shares. That’s why I already Rural Funds and Soul Patts in my portfolio. APA is a great option too, I just don’t think it looks as cheap as Soul Patts.
There are some businesses in some industries which can also provide very reliable dividends in the coming years, such as these top income ideas…
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More reading
- Got $50,000 to invest for income? Pick these 5 ASX dividend shares
- Beat low interest rates with these ASX dividend shares
- How to make $1,000 a month in dividends
- 3 top ASX dividend shares to buy this June
- What would $50,000 invested in the ASX 200 a decade ago be worth today?
Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of Transurban Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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