Beginner investors: I suggest you start with these 2 ASX dividend powerhouses for decades of income

If you’re a beginner investor in ASX shares, picking your first stocks is one of the hardest tasks you’ll face.

Not to pile on unnecessary pressure, but the first ASX shares you buy can often either give you the confidence to keep going on your wealth-building journey or shatter your resolve to use the share markets to manage your money.

That’s why I often advocate that beginner investors stick to mature, dividend-paying ASX shares with long track records of delivering for shareholders as starter investments.

With that in mind, here are two such ASX shares that I’d be happy to recommend to any beginner investor today.

2 ASX shares perfect for a beginner investor

Australian Foundation Investment Co Ltd (ASX: AFI)

The Australian Foundation Investment Co, or AFIC for short, is an ASX institution. This company is what’s known as a listed investment company (LIC). That means that instead of making or selling things, it manages a portfolio of other shares on behalf of its shareholders. This makes AFIC a great choice for a beginner investor, in my view.

You don’t have to worry about picking individual stocks or ensuring your share portfolio is properly diversified – AFIC does it all for you.

Its underlying portfolio is typically made up of blue chip ASX shares, with some of the company’s current top holdings including Commonwealth Bank of Australia (ASX: CBA), Wesfarmers Ltd (ASX: WES) and Macquarie Group Ltd (ASX: MQG).

AFIC has also built up a solid long-term track record when it comes to paying dividends. This company hasn’t skipped a dividend in decades and typically doles out two fully-franked shareholder payments every year. Its shares are presently trading on a dividend yield of 3.6%.

Past performance is no guarantee of future returns. However, AFIC has delivered a respectable average of 8.6% per annum (including dividends) over the past ten years (as of 31 May).

I don’t see any reason why this company’s robust dividends and solid performance can’t continue for decades to come. As such, I think AFIC is a perfect investment for a beginner today.

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

Next up, we have ASX 200 investment house Washington H. Soul Pattinson and Co, or Soul Patts for short.

Although this company isn’t technically an LIC, it functions very similarly to one, managing a portfolio of assets on behalf of its shareholders.

These also include a portfolio of blue-chip stocks and large stakes in a select group of ASX shares. These include TPG Telecom Ltd (ASX: TPG), New Hope Corporation Ltd (ASX: NHC), and Brickworks Ltd (ASX: BKW). Soul Patts also has other assets within its portfolio for diversification. These assets include private credit, venture capital investments, and stakes in private companies.

Soul Patts is an Australian share market veteran, having been around for longer than the ASX itself. In its 120-plus-year history, this ASX share has never failed to pay a dividend and has also delivered an annual dividend pay rise every year since 2000. That’s a feat that no other ASX share can match.

In addition to this track record, Soul Patts has also delivered some impressive overall returns. As of 30 April, this company has given investors an average of 12% per annum in overall returns over the preceding 20 years.

As such, I think this company is another perfect option for any beginner investor today.

The post Beginner investors: I suggest you start with these 2 ASX dividend powerhouses for decades of income appeared first on The Motley Fool Australia.

More reading

• These 3 ASX shares have unstoppable dividend growth
• 1 ASX stock that’s just right for beginner investors
• If I were 60 I’d buy these ASX shares for dividends
• Should you buy Brickworks or Soul Patts shares today?
• How to invest for retirement in an inflationary environment

Motley Fool contributor Sebastian Bowen has positions in Washington H. Soul Pattinson and Company Limited and Wesfarmers. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks, Macquarie Group, Washington H. Soul Pattinson and Company Limited, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Brickworks, Macquarie Group, Washington H. Soul Pattinson and Company Limited, and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.