Most ASX shares pay some sort of dividend, even if it's not a big one.
There aren't many dividend shares that I would be willing to invest large sums of money in.
Dividend shares that I think are worth investing in need to have good fundamentals so that it's likely that they can keep increasing the dividend. The share also needs to have a yield that's at least higher than the best interest rate offered by banks, which is currently 3%.
Here are the four dividend shares I would pick:
WAM Capital Limited (ASX: WAM) is the main listed investment company (LIC) run by Wilson Asset Management.
Its investment strategy isn't dividend focused, it invests in undervalued growth companies. However, it pays out a lot of the market-beating profit it makes as a growing dividend.
It has increased its dividend every year since the GFC and has a grossed-up dividend yield of 8.57%. I'd be happy to invest $10,000 into WAM Capital shares.
Australian Foundation Investment Co. Ltd. (ASX: AFI) (AFIC) is the largest LIC in Australia. It has been operating for many decades and has provided reliable returns by focusing on Australia's blue chips.
AFIC may not generate the highest returns each year but it's very consistent and has paid a long-term growing dividend for a long time. It currently has a grossed-up dividend yield of 5.83%. I'd feel safe investing $10,000 in AFIC shares.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), or 'Soul Patts', is one of the oldest companies in Australia having operated for around a century.
Soul Patts is likened to Warren Buffett's Berkshire Hathaway because it has large stakes in growing businesses like TPG Telecom Ltd (ASX: TPM), Brickworks Limited (ASX: BKW) and Australian Pharmaceutical Industries Ltd (ASX: API).
Soul Patts has increased its annual ordinary dividend every year since 2000. It currently has a grossed-up dividend yield of 4.5%. I'd be glad to invest $10,000 into Soul Patts shares.
Rural Funds Group (ASX: RFF) is the best real estate investment trust (REIT) on the ASX in my opinion.
It owns a variety of farms and leases them to quality tenants with long rental contracts that have rental indexation increases built into them.
Rural Funds has grown its distribution every year since it listed in 2014 and it currently has a distribution yield of 4.45%. I would be happy to invest $10,000 into Rural Funds shares.
Foolish takeaway
I think all four of the above shares would make strong dividend investments for long-term investors. WAM Capital is the one likely to deliver the most dividend income because of its large dividend yield.
