Argo Investments Limited (ASX: ARG) is a listed investment company (LIC) which is one of the oldest on the ASX and it's a solid option for dividends. It was founded in 1946 and has over 86,000 shareholders.
The LIC currently has a grossed-up dividend yield of 5.6%, which looks quite attractive in this environment of very low interest rates.
One of the reasons why it's one of the leading ASX dividend ideas is that its assets are so diverse. It owns a large number of ASX blue chips including Westpac Banking Corp (ASX: WBC), Macquarie Group Ltd (ASX: MQG), CSL Limited (ASX: CSL), BHP Group Ltd (ASX: BHP) and Australia and New Zealand Banking Group (ASX: ANZ).
Owning lots of holdings makes it safer than the earnings of a single business.
Argo aims to provide shareholders a mix of capital growth and dividend growth over the long-term.
Argo's dividend has grown in each year since 2013, which is better dividend growth than some of the other old LICs like Australian Foundation Investment Co. Ltd. (ASX: AFI).
The LIC has been a solid performer over 2019 with the ASX performing well. At the moment the Argo share price is trading slightly under the net tangible assets (NTA) of $8.45 at the end of October 2019. Buying assets for cheaper than their value is usually a good move.
One of the main attractions of Argo is its very low costs. The management expense ratio is only 0.15%, leaving most of the returns in the hands of shareholders.
Foolish takeaway
Argo has a solid yield but I'm not sure if it's the best option for income growth because ASX blue chips are generally mature with limited growth prospects.
