There are some ASX dividend shares that are growing their dividends like clockwork every year.
Plenty of businesses that were meant to be good dividend shares have cut their income payments to shareholders this year due to COVID-19.
Businesses like Commonwealth Bank of Australia (ASX: CBA), Sydney Airport Holdings Pty Ltd (ASX: SYD) and Transurban Group (ASX: TCL) have all reduced their payments to shareholders.
But there are other ASX dividend shares that continue to grow their dividends year after year:
APA Group (ASX: APA)
It owns a vast network of 15,000km of natural gas pipelines around Australia with a presence in every mainland state and the Northern Territory. It also owns or has interests in gas storage facilities, gas-fired power stations and renewable energy generation (wind and solar farms). APA owns, or manages and operates, a portfolio of assets and delivers half the nation's natural gas usage.
APA pays distributions from its annual cashflow. The cashflow from existing assets is fairly steady and it continues to invest in new projections which will grow cashflow further and fund higher distributions. That makes it a very reliable ASX dividend share.
It has increased its distribution every year for the past decade and a half. At the current APA Group share price if offers a distribution of almost 5%.
Rural Funds Group (ASX: RFF)
Rural Funds is an agricultural real estate investment trust (REIT) which owns a variety of farms including almonds, cattle, cotton, macadamias and vineyards.
The ASX dividend share aims to increase its distribution by 4% every year. It's able to do this because rental increases are built into all of its contracts. Some of the contracts have a fixed 2.5% annual increase, whilst others are linked to CPI inflation, with market reviews.
I like the strategy that Rural Funds has by investing in productivity improvements at its farms. This increases the farm value as well as unlocking rental income growth potential.
As the landlord, Rural Funds doesn't take on operational risk. But it does own water entitlements which are available for tenants.
At the current Rural Funds share price it has a FY21 distribution yield of around 5%.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
Soul Patts is an investment conglomerate that has been operating for over a century, it was listed in 1903.
I think Soul Patts is the gold standard for ASX dividend shares. It has paid a dividend every year in its history including through the Spanish Flu, world wars and recessions. I think it's a very dependable income payer.
It has actually grown its dividend every year since 2000. That's the best record on the ASX. The GFC didn't stop its streak.
Soul Patts has a diversified portfolio of businesses in its portfolio including TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), Australian Pharmaceutical Industries Ltd (ASX: API), Clover Corporation Limited (ASX: CLV) and Bki Investment Co Ltd (ASX: BKI).
It's also invested in unlisted businesses such as financial services, resources, agriculture, swimming schools and Ampcontrol.
Most of the ASX dividend share's investments pay dividends (and distributions) up to Soul Patts each year. In FY19 Soul Patts paid out around 80% of its net cashflow (after paying for expenses) to investors, whilst keeping the rest to re-invest into more opportunities.
I think many of its largest holdings like TPG, Brickworks, Clover and so on have attractive growth potential.
At the current Soul Patts share price it has a grossed-up dividend yield of 4.1%.
Foolish takeaway
Each of these ASX dividend shares have grown their dividend during COVID-19. They're very reliable and have potential for long-term dividend growth for many years to come. If I had to pick one it would be Soul Patts for its diversification and ability to invest into new industries.
