ASX dividend shares could be the way to rescue your income hopes. The ultra low interest rates by the RBA (and elsewhere) are causing havoc for income-seekers.

If people are invested in cash or bonds for cash then it’s hardly earning anything any more. How are you supposed to live on a return of less than 1%? That’s less than (normal) inflation!

Unprecedented times call for unprecedented measures. I don’t blame the RBA for doing whatever it can to help the situation. But people wanting income are left short changed.

I think that ASX dividend shares are the answer. Here are two ideas:

WAM Research Limited (ASX: WAX) 

WAM Research is a listed investment company (LIC) which invests in undervalued small and medium businesses.

I think WAM Research is a great ASX dividend share because it has increased its dividend every year since the GFC and it currently offers a grossed-up dividend yield of 11% at the time of writing.

I believe it’s able to pay such a big dividend because of two reasons. The first reason is that it’s able turn capital gains and dividends received into a smoothed dividend for shareholders. The second and most important reason is that its investment returns have been very strong over the past decade.

In these uncertain times I think it’s reassuring knowing that WAM Research usually carries a good amount of cash in its portfolio.

Brickworks Limited (ASX: BKW) 

I think Brickworks is a great ASX dividend share, it currently has a grossed-up dividend yield of 6.3%. The latest result saw a 6% increase of the dividend. 

Brickworks is a diversified property business which has a number of attractive segments: Australian building products, US building products, ‘investments’ and an industrial property trust.

I believe it’s this mix of assets that has allowed Brickworks to grow or maintain its dividend every year for over 40 years. That income is entirely supported by its investments and property trust, it doesn’t need the building products to be generating profit to maintain (and slowly grow) the dividend. The properties in the property trust will slowly increase their rental income.

ASX dividend share takeaway

Share prices will always be volatile, but I think dividends from ASX shares can provide that steady cashflow into your bank account that assets like bonds just can’t match right. At the current prices I’d probably go for Brickworks because it’s trading at an attractive discount to its asset values.

More reading

• Why I think it’s time to buy this ASX 200 share
• ASX shares can help millennials retire before their parents
• Should you invest in ASX shares for income?
• Get paid huge amounts of cash to own these ASX dividend shares
• Take advantage of ASX share market volatility

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Brickworks. 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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The Macquarie Group Ltd (ASX: MQG) share price is trading lower in morning trade after going ex-dividend.

Eligible shareholders of the investment bank can now look forward to being paid its $1.80 per share partially franked final dividend on July 3.  

In the meantime, now might be a good time to think about where to reinvest these dividends if you’re not planning to use the funds as income.

Three top shares that I would reinvest the dividends into are as follows:

BetaShares NASDAQ 100 ETF (ASX: NDQ)

The first option to consider investing your dividends into is the BetaShares NASDAQ 100 ETF. As its name implies, this exchange traded fund provides investors with exposure the 100 largest non-financial shares on the Nasdaq index. The majority of these companies are household names such as Amazon, Apple, Microsoft, Netflix, Starbucks, and Zoom. As a whole, I think these 100 companies have the potential to grow at a quicker rate than the rest of the economy over the next decade. This could lead to the BetaShares NASDAQ 100 ETF providing investors with strong returns for many years to come.

Dicker Data Ltd (ASX: DDR)

If you’re looking for even more dividends then you might want to take a look at Dicker Data. It is a leading wholesale distributor of computer hardware and software. The company has been a real standout performer over the last few years and has been growing both its earnings and dividends at a strong rate. This has continued to be the case in 2020 despite the crisis, with management recently revealing plans to lift its full year dividend by 31% to 35.5 cents per share in FY 2020. This represents a 5.1% fully franked dividend yield.

ResMed Inc. (ASX: RMD)

A final share to consider buying is ResMed. I think it is one of the best options in the healthcare sector and a great place to invest your Macquarie dividends. ResMed is a sleep treatment focused medical device company which looks well-placed for long term growth due to the proliferation of obstructive sleep apnoea (OSA). It estimates that just 20% of OSA sufferers have been diagnosed at this point. Due to the quality of its products and software, I expect ResMed to capture a greater slice of this growing market over the next decade. This should underpin strong earnings growth for years to come.

More reading

• ASX 200 Weekly Wrap: Gold miners help edge ASX ever higher
• 5 things to watch on the ASX 200 on Monday
• 3 top ASX dividend shares to buy next week
• 3 ASX healthcare shares to buy for strong long-term growth
• 2 quality ASX dividend shares for retirement income

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BETANASDAQ ETF UNITS, Dicker Data Limited, and Macquarie Group Limited. The Motley Fool Australia has recommended ResMed Inc. 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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Last week continued the turbulent ASX volatility we have been living with for the past 3 months. The S&P/ASX 200 Index (ASX: XJO) initially rose by 1.7% or 90 points on Monday, then fell by 3% by Wednesday. The week provided investors with ASX 200 winners and losers.

The overall sentiment was driven by 2 emerging issues. The US reported a weekly jobless claims total of 2.981 million, which brings the jobless number to a post-war high of 36.5 million. In Australia, the unemployment rate rose to 6.2% with the government anticipating a peak of 10%.

Added to this were escalating tensions between the US and China, combined with Chinese bans on Australian exports and uncertainty over our trading relationship. 

ASX 200 winners

The ASX 200 winners were drawn predominantly from commodities producers and in particular, the ASX gold miners. 

The Graincorp Ltd (ASX: GNC) share price rose by 12.93% over the week. The company reported a $58 million dollar half-year profit due to the easing of the drought. Investors have praised GrainCorp for the demerger of its malt producing arm, now United Malt Group Ltd (ASX: UMG), and selling off its bulk liquid terminals business. A stripped-down GrainCorp, with a strong insurance arrangement in place to manage drought, is a core industry in times of crisis.

All ASX gold mining large caps rose over the week, continuing the long-term historical trend of the gold price rising as share prices fall. Among the ASX 200 winners were Saracen Mineral Holdings Limited (ASX: SAR) with a massive 13.22% share price rise, Regis Resources Limited (ASX: RRL) with a rise of 11.16%, and St Barbara Ltd (ASX: SBM) with an 11.03% increase.

Ramsay Health Care Limited (ASX: RHC) had a week that reflected market sentiment. On Wednesday, 13 May, the company’s share price tumbled by 3%, yet it regained momentum to finish the week up by 5.3% from Monday’s opening price. Ramsay announced on Friday, 15 May a binding heads of agreement with New South Wales. This was a commitment to make its facilities available during the COVID-19 pandemic. A similar deal already exists with Queensland. 

ASX share price falls

As well as the ASX 200 winners, the market also claimed several losers. Falling share prices last week centred on shares in the real estate and bank sectors. The Commonwealth Bank of Australia (ASX: CBA) released a housing sector prognosis with its Q3 trading results. This noted a forecast for housing prices to drop between 11% and 32%.

Correspondingly, we saw shares fall across the ASX real estate investment trusts and related real estate businesses. Scentre Group (ASX: SCG) saw its share price fall by 10.18%, Mirvac Group (ASX: MGR) saw a fall of 7.62%, and real estate sales website REA Group Limited (ASX: REA) saw its shares fall by 5.85%. Accordingly, we also saw share price falls across the banking sector averaging about 4%.

The Xero Limited (ASX: XRO) share price also fell by 8.79% over the week. Despite producing the company’s first profit report, Xero investors remain skittish. As an accounting provider to small and medium enterprises, the market is expecting it to take a hit at some point. There also appeared to be some sentiment opposed to diverting spending from customer growth.

Lastly, Alliance Aviation Services Ltd (ASX: AQZ) saw its share price drop by 6.64% despite being one of the few airlines still operating. The Alliance share price was hit by news of the aspirations of Singapore-backed Regional Express Holdings Ltd (ASX: REX) to fly between capitals. The Queensland government also frightened the horses with its ambitions to enter the aviation market as a bidder for Virgin Australia Holdings Ltd (ASX: VAH).

More reading

• ASX 200 Weekly Wrap: Gold miners help edge ASX ever higher
• How this $70m ASX small cap is cutting down a $50bn industry
• 7 roaring ASX mid-cap shares last week
• ASX 200 up 0.25% this week, CBA reveals Q3
• Top brokers name 3 ASX 200 shares to sell next week

Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia has recommended Ramsay Health Care Limited, REA Group Limited, and Scentre 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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