Income investors have so many options on the ASX boards.
From infrastructure operators to financial services companies and real estate investment trusts, there are many businesses that generate reliable cash flows and return a large portion of those earnings to shareholders through dividends.
For investors looking to build a portfolio that produces steady income, here are three ASX income stocks that I think are worth considering right now.
Transurban Group (ASX: TCL)
Transurban is one of the most well-known infrastructure companies on the ASX and a favourite among income investors.
The company owns and operates major toll roads across Australia and North America. These assets are essential pieces of infrastructure that generate steady revenue from millions of drivers each year.
What I like about Transurban’s business model is its predictability. Its toll roads operate under long-term concession agreements that allow toll prices to increase regularly.
Combined with higher traffic volumes from population growth and urbanisation, this has historically supported consistent earnings and distribution increases.
Because of this, Transurban has been able to deliver dependable income to investors over long periods and I expect this trend to continue in the future.
Pinnacle Investment Management Group Ltd (ASX: PNI)
Pinnacle is a diversified investment management company that partners with a range of specialist fund managers.
Rather than running a single asset management business, Pinnacle provides distribution, operational, and strategic support to its affiliated investment boutiques. In return, it earns a share of the fees generated by those managers.
This model gives Pinnacle exposure to multiple investment strategies and markets, which can help diversify its earnings.
As funds under management grow across its affiliates, the company’s earnings can increase as well. That growth has allowed Pinnacle to steadily increase its dividends over time.
For income investors who want exposure to the asset management sector, Pinnacle offers a combination of dividend income and long-term growth potential.
Dicker Data Ltd (ASX: DDR)
Dicker Data is one of Australia’s leading technology distributors.
The ASX income stock acts as a key link between major global technology vendors and thousands of resellers across Australia and New Zealand. Its partners include some of the biggest names in the technology industry.
Despite operating in the technology sector, Dicker Data’s business model is surprisingly stable. The company earns relatively small margins on a very large volume of product sales, which can produce steady cash flows.
That strong cash generation has allowed Dicker Data to build a reputation as a reliable dividend payer.
For investors seeking income, the company’s consistent payouts and established market position make it an appealing option to consider.
Foolish takeaway
Reliable dividend income often starts with owning businesses that generate consistent cash flow.
Transurban’s infrastructure assets, Pinnacle’s growing funds management platform, and Dicker Data’s established distribution network each support strong earnings and shareholder payouts.
Because of that, these three companies are among the ASX income stocks that I think are well worth a closer look right now.
The post 3 of the best ASX income stocks to buy now appeared first on The Motley Fool Australia.
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Motley Fool contributor Grace Alvino has positions in Transurban Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Pinnacle Investment Management Group and Transurban Group. The Motley Fool Australia has positions in and has recommended Dicker Data, Pinnacle Investment Management Group, and Transurban Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.