There are some ASX dividend shares that have grown their dividends every year in a row for more than a decade.
It's rare to find businesses in Australia that have increased the dividend consecutively going back that far.
Here are two of those few examples:
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
This business is commonly called 'Soul Patts ' – the full name is a bit of a mouthful.
It's an investment house that has been listed since 1903. It has actually paid a dividend every year since listing – meaning shareholders have received something every year for over a century.
But that's not the record that is being referred to. Soul Patts has increased its dividend every year since 2000. That's the longest dividend growth streak from a share on the ASX. Over the last 20 years Soul Patts' dividend annual compound growth rate has been 9.2% per annum.
Paying a stable and growing dividend is one of the main goals of Soul Patts' management. The company has stated it has the profit reserve and franking credit balance to keep paying dividends.
Its dividends are paid out of the net cash flow from its investments. That net operating cash flow, after paying for expenses, rose by 48.8% in FY20 to $252.3 million. The main reason for the big increase was a significant catch-up special dividend from its biggest investment, the telco TPG Telecom Ltd (ASX: TPG). That increase was despite dividend cuts from a number of other of its investments.
Some of the other major sources of investment income to fund Soul Patts' dividend are ASX shares like Brickworks Limited (ASX: BKW), Milton Corporation Limited (ASX: MLT) and Bki Investment Co Ltd (ASX: BKI).
Soul Patts is also invested in smaller businesses which it hopes will become much larger businesses like Palla Pharma Ltd (ASX: PAL), Clover Corporation Limited (ASX: CLV) and Tuas Ltd (ASX: TUA).
The investment house also has a portfolio of unlisted businesses that it owns outright, or has a large substantial position in. Some of those private investments are: swimming schools, resources, Ampcontrol, financial services and agriculture.
At the current Soul Patts share price it has a trailing grossed-up dividend yield of 3.4%.
APA Group (ASX: APA)
APA owns a large 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.
The energy infrastructure ASX share generated growth in FY20 despite COVID-19 impacts. Earnings before interest, tax, depreciation and amortisation (EBITDA) went up by 5.1%, operating cashflow up 8.3% and net profit after tax (NPAT) up 10.1%.
APA says that it pays its distributions from its operating cashflow, which is rising over time as new projects come online.
The business increased its total FY20 distribution by 6.4% to 50 cents. It has increased its distribution every year for a decade and a half. That is one of the longest ASX share dividend records around.
In FY21, APA is expecting EBITDA to be between $1.625 billion to $1.665 billion – this would be slightly down or the same compared to FY20. It also said that the total FY21 distribution is expected to be substantially the same as the FY20 distribution.
Using the trailing distribution, APA Group has a distribution yield of 4.5%.
