There aren't many ASX dividend shares that are still raising their dividends.
Big banks like National Australia Bank Ltd (ASX: NAB) are stuck in a dividend growth halt and Telstra Corporation Ltd (ASX: TLS) is cutting its dividend at the moment.
The best idea might be to look further down the market capitalisation charts for the best dividend growth ideas:
Brickworks Limited (ASX: BKW)
Brickworks sounds like it's just a construction materials business. That is one part of the business, but it has a very large investment in Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) and also owns half of a growing property trust. The combination is a good way to diversify its assets and earnings.
The company has grown or maintained its dividend every year since 1976, which is an excellent record. It has recently acquired one of the largest brick businesses in the US, which could provide it with ample growth potential over the coming years.
Brickworks has a grossed-up dividend yield of 4.5%.
Future Generation Investment Company Ltd (ASX: FGX)
Future Generation is a listed investment company (LIC) which aims to increase its dividend payment to shareholders every year. The key difference is that it doesn't charge management fees or performance fees, nor is it charged fees by the fund managers it invests in.
Instead, it donates 1% of net underlying assets to youth charities each year. I think Future Generation is an excellent philanthropic idea.
Its dividend has grown each year since it started paying one in 2015 and it currently has a grossed-up dividend yield of 5.4%.
Naos Emerging Opportunities Company Ltd (ASX: NCC)
This is another LIC, but this one targets the smallest businesses on the ASX because the Naos investment team feel these companies have, on average, the most growth potential.
Small businesses are generally under-researched and may be able to be bought at lower earnings multiples than if they were in the ASX 200.
Naos also aims to increase the dividend every year, which it has done since it started paying a dividend in FY13. It currently offers a grossed-up dividend yield of 10%.
Foolish takeaway
Just owning these three shares would provide a solid dividend yield, long term dividend growth and a good level of underlying diversification.
