[ad_1]
As an income investor, I like to get a good dividend. But more importantly, I'm looking for companies with
durable
returns, which can continue to provide shareholders with a high level of income. There is no point in getting a high income today if the dividend can be reduced significantly.
Here are 3 ASX companies that I think have solid and sustainable returns.
Spark Infrastructure Group (ASX: SKI)
Spark owns regulated utility badets. Specifically, power grids in three states, including Victoria Power Networks, Power Network SA and TransGrid.
The company has strong, reliable, inflation-protected cash flow, which gives Spark the ability to provide sustainable income for its shareholders. Since 2011, distribution has increased every year and is expected to increase by 4.9% this year.
Spark shares are currently trading with a 6.6% payout.
Growthpoint Properties Australia Ltd (ASX: GOZ)
This real estate investment trust (REIT) has been performing well since the GFC.
Growthpoint holds a broad portfolio of office and industrial properties worth over $ 3 billion. The portfolio has a high cash flow profile and contractual lease increases of 3.3% per annum on average.
It has steadily increased shareholder distributions over the years, the latest to date having risen 3.3%, and the company has just guided the growth of the fiscal year 19 distribution by 3.6%.
Growthpoint shares are currently trading on a 6.2% return.
WAM Research Limited (ASX: WAX)
WAM Research is a listed investment company that focuses on small and medium businesses, which, according to the investment team, are undervalued and have strong business fundamentals.
Performance has been strong since 2010, with a portfolio yield before fees of 16.7% a year, 8.4% higher than the market.
Earnings are continually raised and the company pays substantial, fully paid dividends on these earnings. The "profit reserve" currently corresponds to three years of dividend payments, which means that the dividends of the next years are already covered; the chances of reducing dividends are therefore very low.
WAM Research shares are currently trading at a yield of 9.7%, including postage credits.
5 companies we like better than WAM Research
When Scott Phillips, Ace Stock's coach, has a buy recommendation, history shows he can pay to listen.
Scott recently revealed what he believes to be the five best ASX stock for investors to buy now … and WAM Research was not one of them! That's right, he thinks these 5 stocks represent even better purchases.
See all 5 stocks
Dave Gow, a contributor to Motley Fool, owns shares in Growthpoint Properties Australia and WAM Research Limited. Motley Fool Australia does not own any of the shares mentioned. We fools may not all have the same opinion, but we all agree that taking into account a wide range of ideas makes us better investors. Motley Fool has a disclosure policy. This article contains only general investment tips (under AFSL 400691). Authorized by Scott Phillips.
Source link
