5 ASX dividend shares I’d buy for a second income

Building a second income stream from ASX shares is something I think a lot of investors aim for over time.

Fortunately, there are lots of businesses on the share market that generate consistent cash flow and return part of that to shareholders as dividends.

To narrow things down, I have picked out five ASX dividend shares I would look at for income.

Rural Funds Group (ASX: RFF)

Rural Funds is an ASX dividend share I’d buy for a second income in April. It owns agricultural assets across areas like almonds, cattle, and vineyards.

Its income is supported by long-term leases with operators, which helps provide visibility over earnings and distributions.

That structure is what stands out to me. It creates a steady income stream that can support consistent payouts over time.

HomeCo Daily Needs REIT (ASX: HDN)

Another share to look at is HomeCo Daily Needs REIT. This property company focuses on convenience-based retail, including supermarkets and everyday services.

These are the types of assets that tend to see consistent foot traffic, which supports rental income.

For income investors, that stability can be appealing, especially when combined with a relatively attractive yield.

Harvey Norman Holdings Ltd (ASX: HVN)

Harvey Norman offers a different type of income profile.

It operates in retail, which can move with the cycle, though it also has a large property portfolio backing the business.

That combination can support dividends over time, with the added benefit of potential upside if conditions improve.

Woolworths Group Ltd (ASX: WOW)

I think Woolworths is one of the most stable names on the ASX.

Its core supermarket business generates consistent cash flow, supported by demand that holds up across different conditions.

That tends to translate into reliable and growing dividends, which is what I would look for in a second income portfolio.

Lottery Corporation Ltd (ASX: TLC)

Lottery Corporation rounds things out with another defensive income stream.

Its earnings are supported by demand for lotteries that tends to remain steady whatever is happening in the economy, which helps underpin regular and growing dividends.

Including a business like this can add balance alongside more cyclical income names.

Foolish takeaway

A second income from ASX shares comes back to owning businesses that can keep generating cash and paying dividends over time.

These five companies operate in different areas, though each offers exposure to income supported by underlying cash flow. That is what I would focus on when building a portfolio for a second income stream.

The post 5 ASX dividend shares I’d buy for a second income appeared first on The Motley Fool Australia.

More reading

• Should you buy Woolworths shares for the ‘steady dividends’?
• I’d buy 22,166 shares of this ASX stock to aim for $50 a week of passive income
• Stagflation: How to position an ASX stock portfolio
• Forget Westpac shares, I’d buy these ASX dividend stocks
• How to build a second income from ASX shares without taking big risks

Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended The Lottery Corporation. The Motley Fool Australia has positions in and has recommended Harvey Norman, Rural Funds Group, and Woolworths Group. The Motley Fool Australia has recommended HomeCo Daily Needs REIT and The Lottery Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.