3 reliable ASX dividend shares with yields above 6% that you can buy for less than $7 right now

These stocks are paying consistent dividends to investors.

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In this period of economic uncertainty and higher inflation, many income-seeking investors look to own ASX dividend shares that can provide a decent dividend yield but also have a strong record of reliability.

Of course, dividends and distributions aren't guaranteed — they are paid out of company profit. If profit sinks, dividends may be reduced or cut altogether. That's why I believe dividend investors who rely on passive income should invest in sectors that support the payment of consistent dividends.

ASX dividend stalwarts such as Brickworks Limited (ASX: BKW) and Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) have long records of growing their dividends year after year, but their dividend yields are materially below 6% right now.

So, instead, I'll take a closer look at three alternative ASX dividend shares, which have impressive yields and ongoing passive income streaks.

Telstra Group Ltd (ASX: TLS)

Telstra is the largest telecommunications company in Australia. It has the widest network coverage, the most subscribers and the most extensive spectrum assets.

The company's mobile division is powering its profit higher and helping fund dividend increases. After the NBN transition was completed, Telstra maintained its annual dividend per share in FY20 and FY21, and has grown its annual payout each year between FY22 and FY24.

In FY24, Telstra reported its mobile handheld users rose 4.1%, mobile income increased 5% and operating profit (EBITDA) increased 9%. This helped Telstra's overall net profit grow 12.8% to $1.8 billion, which funded a 5.9% increase in the annual dividend to 18 cents per share.

At the current Telstra share price of $3.87, the FY24 payout translates into a grossed-up (including franking credits) dividend yield of 6.6%.

Rural Funds (ASX: RFF)

Rural Funds owns a portfolio of farms across Australia. It operates as a real estate investment trust (REIT) structure. The farms it owns include almonds, macadamias, vineyards, and cattle.

The ASX dividend share has rental increases built into most of its contracts, which are either fixed annual increases or linked to inflation, with market reviews. It also regularly invests in improving farms for tenants, with improvements such as increased water access.

The above factors helped Rural Funds grow its annual distribution by at least 4% each year until FY22. Since then, the annual distribution has been maintained at 11.73 cents per unit, which I think is commendable during this period when the cost of debt increased significantly, impacting rental profitability.

However, Rural Funds is expecting rental profit growth again in FY25, which is a promising sign to me that the distribution can grow again in future years (except FY25). The stock closed Tuesday at $1.856 and has a current distribution yield of 6.3%.

APA Group (ASX: APA)

I view APA as an undervalued ASX dividend share following its 20% decline since May 2024.

The business owns a variety of energy assets including a national gas pipeline network, other gas-related assets, renewable energy generators, and electricity transmission assets.

Impressively, APA has grown its annual distribution every year since 2004 – two decades of income growth.

It has successfully balanced paying distributions to shareholders and investing in expanding its portfolio of energy assets. It's investing in both renewable energy and gas pipelines. APA is expecting to pay a distribution of 57 cents per security in FY25. This translates into a distribution yield of 8.1% based on the current share price of $6.91.

Motley Fool contributor Tristan Harrison has positions in Brickworks, Rural Funds Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Apa Group, Brickworks, Rural Funds Group, Telstra Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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