Dividends are fantastic. Paying a dividend is a way for the company to reward shareholders with some of the profit that it has earned during the year. Shareholders don't have to do anything, just sit back and watch the dividend payments roll in.
When a company increases its dividend, it's a good sign that it's had a good year. If there's more profit then shareholders will likely get a bigger dividend. If a company has a long streak of increasing its dividend, it likely has a long history of increasing profit, good management and a generous dividend policy.
If you can buy a company and receive increasing dividend payments for the foreseeable future, that's a great source of reliable income. Here are four companies with some of the longest dividend increase streaks on the ASX:
Retail Food Group Limited (ASX: RFG) is the master franchisor of a large number of food outlets such as Gloria Jean's Coffees, Brumby's Bakery, The Coffee Guy, Crust Gourmet Pizza and Donut King. It's increasing its number of outlets each year and is now expanding overseas which should keep the dividends rolling on.
It has increased its dividend every year for the last 10 years, in March 2007 it paid 3.13 cents per share and in March 2017 it paid 14.75 cents per share. It currently has a grossed-up dividend yield of 7.78%.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) or "Soul Patts" is an investment conglomerate business that has been going for over a hundred years.
Its diversified and conservative approach has allowed it to pay a dividend every year including through wars and the GFC. It has increased its annual ordinary dividend since 2000, but it has increased its interim dividend for the last 20 years.
Soul Patts currently has a grossed-up dividend yield of 4.35%.
InvoCare Limited (ASX: IVC) is Australia's largest funeral operator. The increasing Australian population sadly means there is a growing number of potential customers for InvoCare, it's expected that the death rate will increase every year until 2034.
InvoCare has increased its dividend every year since 2006 and currently has a grossed-up dividend yield of 4.35%.
Ramsay Health Care Limited (ASX: RHC)
Ramsay is one of the world's biggest private hospital operators. With the growing number of elderly and governments around the world struggling to pay for public healthcare, private hospitals should see more and more activity.
Ramsay has increased its dividend every year since 2000 and currently has a grossed-up dividend yield of 2.63%.
Foolish takeaway
All four of these businesses have expertly grown their profit and dividend for a long time and there's every chance they can keep growing the dividend for a long time to come. At the current prices, my order of preference would be Ramsay, then Soul Patts, then InvoCare and finally Retail Food Group.
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