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3 strong and reliable ASX dividend shares for October

If you want strong and reliable income, I think these 3 ASX dividend shares would be good ideas to hold in October 2020.
The post 3 strong and reliable ASX dividend shares for October appeared first on Motley Fool Australia. –

fingers walking up piles of coins towards bag of cash signifying asx dividend shares

I think that strong and reliable ASX dividend shares would be good picks for income in October 2020 and beyond.

It seems the closer we get to the US election, the more volatility there’s going to be. The period after the election could be very volatile too, depending on how things go.

No matter what happens next, if you’re focused on income I think it’s a good idea to own reliable businesses that can pay solid dividends regardless of what’s going on.

With that in mind, here are three leading ASX dividend shares to buy for reliability:

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

Soul Patts is an investment conglomerate that has been going for over 100 years. The company has a diversified portfolio which is invested across various industries including building products, telecommunications, resources, financial services and pharmacies.

I rate Soul Patts as the gold standard for income. It has increased its dividend every year for the past two decades. No other ASX dividend share has that record in Australia. It’s reassuring to know that your investment is very likely to grow the dividend each year.

It funds its dividend from its annual cashflow which is steadily growing over the years as its investments (both listed and unlisted dividends) send more profit to Soul Patts in the form of dividends and distributions.

Soul Patts’ dividend is supported by plenty of defensive assets like farmland, TPG Telecom Ltd (ASX: TPG), Bki Investment Co Ltd (ASX: BKI) and Milton Corporation Limited (ASX: MLT).

At the current Soul Patts share price it offers a grossed-up dividend yield of 3.65%.

Brickworks Limited (ASX: BKW)

Brickworks is another high-quality, reliable ASX dividend share. It hasn’t cut its dividend for over four decades. That’s a very strong record.

Its quality Australian building products business can produce variable results, as you’d expect from a cyclical industry.

Brickworks has recently expanded into the US with three acquisitions in the north east of the country. This business has lots of long-term growth potential, but it too may be volatile over the medium-term.

Two assets supports the Brickworks dividend with the necessary cashflow. It owns around 40% of Soul Patts, which provides consistently growing dividends to Brickworks. So, Brickworks’ dividend is mostly supported by another great ASX dividend share. 

Brickworks also owns half of a fantastic industrial property trust which is pivoting towards e-commerce assets. Industrial assets are very important for logistics, and they are more valuable in this COVID-19 era. That property trust is currently building two large distribution warehouses for Amazon and Coles Group Limited (ASX: COL).

At the current Brickworks share price it has a grossed-up dividend yield of 4.3%.

Rural Funds Group (ASX: RFF)

Farmland has been a very useful assets for many centuries. We all need to eat. For that reason alone, I think Rural Funds is a solid, defensive idea for an ASX dividend share.

Rural Funds owns a diversified portfolio of farm types including cattle, almonds, vineyards, macadamias and cropping (sugar and cotton).

The farmland real estate investment trust (REIT) leases its farms to a variety of different quality tenants including businesses like Select Harvests Limited (ASX: SHV), Treasury Wine Estates Ltd (ASX: TWE) and Australian Agricultural Company Ltd (ASX: AAC).

The REIT aims to increase its distribution for investors by 4% per annum. That’s not exactly shooting the lights out, but it’s comfortably above inflation. It’s able to achieve this growth through a combination of contracted rental growth and productivity improvements at its farms.

At the current Rural Funds share price it has a FY21 distribution yield of 4.9%.

Foolish takeaway

Each of these ASX dividend shares offer very reliable income for investors in my opinion. Soul Patts is the one most likely to be able to keep growing its dividend consecutively for the next decade. But Brickworks could also be one to watch if construction rebounds after COVID-19.

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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 Brickworks, RURALFUNDS STAPLED, Treasury Wine Estates Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET. 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.

The post 3 strong and reliable ASX dividend shares for October appeared first on Motley Fool Australia.

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