Although the S&P/ASX 200 (INDEXASX: XJO) has had a shaky start to the week so far, we are still at levels pretty close to the ASX's all-time high.
Markets could very well still push higher from here, but the current levels give me pause and insist upon allocating capital in a very careful manner, in my opinion.
So in that vein, here's where I would invest a $10,000 lump sum in ASX shares this week.
WAM Research Limited (ASX: WAX)
WAM Research is a listed investment company that specialises in finding undervalued mid-cap ASX growth shares and translating these gains into hefty dividend income. WAM Research actually reported its half-year earnings today and announced a 1% increase to its fully franked dividend, which now stands at 4.9 cents per share. That translates to a forward dividend yield of 6.49% (or 9.27% grossed-up) at the time of writing.
Although WAM Research shares are now trading at around a 20% premium to the underlying net tangible assets (NTA) per share, I still think they offer a compelling buy for dividend income this week.
Brickworks Limited (ASX: BKW)
Brickworks is a company that (you guessed it) makes bricks – as well as tiles and other building products. However, the 'construction materials' side of the business isn't all the company does. Brickworks also owns a share of a property trust in conjunction with Goodman Group (ASX: GMG), which provides the company with a reliable income stream that works well to offset the cyclical nature of the construction market.
The company also has a sizeable stake in investment conglomerate Washington H. Soul Pattinson & Co Ltd (ASX: SOL), which again adds additional ballast to the company's income. The result is a diversified, steady-as-she-goes kind of company, with a remarkably reliable dividend. Thus, I think Brickworks is a great buy in today's market.
Telstra Corporation Ltd (ASX: TLS)
Tesltra is another reliable dividend payer that I think is looking cheap today. Telstra shares are (at the time of writing) going for $3.74 – which means that the shares are offering a trailing grossed-up dividend of 6.1% (including the special nbn payments).
Telstra reaffirmed this payout just last week, so I think it's reasonably likely we will continue to see such a nice yield out of Tesltra shares for a while yet. If you're looking for a non-cyclical stock to add to your portfolio this week, I think Telstra is also a great candidate. Its 5G plans are also very exciting, and might just lead to a sizeable earnings boost down the track (but we'll have to wait and see).
