It's getting harder to find good sources of income these days with banks offering a very pitiful interest rate on money in the bank. The best rate you can find these days is between 2.8% to 3%, depending on the bank and its rules.
Shares are the only game in town to generate good income, which is why income investors would be well suited to look at some shares on the ASX.
However, just because something has a big yield doesn't mean it's necessarily good.
Here are some options I think dividend investors should be interested in:
WAM Research Limited (ASX: WAX)
In my opinion, one of the highest-quality dividend shares on the ASX is this listed investment company (LIC) run by Wilson Asset Management.
It aims for undervalued growth companies that are small or mid-cap in size whilst keeping a good amount of cash on hand for protection and opportunities. It has beaten the market, after fees, very handily over the past five years.
Pleasingly, it has increased its dividend every year since the GFC and currently has a grossed-up dividend yield of 9%.
Arena REIT No 1 (ASX: ARF)
Arena is one of the largest real estate investment trusts (REITs) on the ASX which invests in childcare centres. It also owns a few healthcare buildings which it leases to Primary Health Care Limited (ASX: PRY).
With a long weighted average lease expiry (WALE) and 100% occupancy of its portfolio, Arena generates reliable stream of cashflow. It pays out a quarterly distribution and is achieving annual increases to its operating earnings.
It currently has a distribution yield of 6.26%.
Kogan.Com Ltd (ASX: KGN)
This is a bit of a left-field, speculative choice for a dividend pick. I usually prefer my dividend picks to be reliable and steady.
Kogan has been a rollercoaster ride for shareholders, but it's still achieving a high level of revenue growth. If it can achieve long-term revenue and profit growth with its multi-service online strategy then its trailing grossed-up divided yield of 6.6% would be attractive at these levels.
But, it faces retail behemoth Amazon, so I wouldn't bet the house on Kogan.
Foolish takeaway
At the current prices I am drawn most to WAM Research – its dividend record and yield is very impressive. If it can keep growing the dividend and achieve long-term capital growth of the share price then today's 9% yield could be an income winner.
