Some ASX dividend shares have demonstrated an excellent ability to keep growing the dividend even during difficult times. I think the businesses I'm going to write about could be buys for passive income.
There are some businesses that have resilient earnings or asset bases that allow them to generate consistent cash flow, which can then fund regular dividends.
But dividends are not guaranteed payments. They are decided by the board of a company and paid from the profit.
And while we can't say anything is certain, I think these ASX shares have built a reputation for paying consistent (and growing) passive income.
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APA Group (ASX: APA)
APA owns a portfolio of energy-related assets. Its core asset is a national gas pipeline, it transports half of the country's usage. The ASX dividend share also owns or has stakes in, gas storage, gas power generation, gas processing, wind and solar farms.
It generates cash flow from its growing portfolio of assets – one of the latest additions is the Basslink, a power cable that connects Tasmania with the mainland. Basslink can transmit 500MW of energy on a continuous basis in either direction. It enables Tasmania to export hydropower while protecting Tasmania against drought-constrained energy shortages.
It's also looking at the potential of being able to convert some of its pipelines to transport hydrogen in the future.
APA has grown its distribution each year since 2004, which is one of the longest growth streaks on the ASX. The guided 55 cents per security distribution is expected to be a distribution yield of 5.4%.
Sonic Healthcare Ltd (ASX: SHL)
Sonic Healthcare is one of the largest ASX healthcare shares. It offers a number of services, though pathology is the dominant earner for the business.
The ASX dividend share has operations in a number of countries including Australia, Germany, the USA and the UK. It has grown its annual ordinary dividend every year since 2013.
Healthcare demand is typically a defensive area as people put a high value on their health over other areas such as discretionary spending.
The company has a stated progressive dividend policy and ongoing growth of its base (excluding COVID-19 testing) revenue can help push the profit and dividend higher.
The trailing 12 months of dividends amount to a total payment of $1.02 per share, which is a grossed-up dividend yield of 4.2%.
Brickworks Limited (ASX: BKW)
Brickworks' building products divisions have cyclical earnings in Australia and the US. It's the biggest brickmaker in Australia and the northeast of the US.
It's other parts of the business that are generating consistent cash flow that has enabled it to grow or maintain its dividend every year for over 40 years.
Brickworks owns a sizeable chunk of the investment business Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), which is invested across a range of defensive sectors including telecommunications, agriculture, financial services, resources, swimming schools and more. Soul Pattinson has grown its dividend each year for the past 23 years, which Brickworks has benefited from.
The company also owns a 50% stake in a growing industrial property trust that is steadily growing its underlying value as the latest warehouses are completed and rental profit increases. It's benefiting from strong demand for logistics in capital cities, with there being limited supply.
Using the last two declared dividends, Brickworks has a grossed-up dividend yield of 3.5%.
