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3 ASX cash generating champions

With interest rates so low these days, I think it’s the right move to look on the ASX for cash generating champions to find the income you’re after.

I don’t just mean ASX shares with a big dividend yield. I’m talking about ASX businesses that are paying bigger cash payouts to shareholders year after year and could keep growing the dividend for a long time to come.

Here are three leading ASX cash machines:

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Patts is one of the oldest businesses on the ASX and has been paying a dividend every single year for decades, including through wars and recessions – how comforting is that?

It’s an investment conglomerate, so it puts its money where it thinks the best opportunities are. Two of its largest holdings include TPG Telecom Ltd (ASX: TPM) and Brickworks Limited (ASX: BKW). I like that it can change it portfolio to suit the changing times.

Soul Patts has increased its dividend every year since 2000, but keeps a certain percentage of the cash profit to re-invest back into the investment portfolio to generate further growth.

Rural Funds Group (ASX: RFF)

Rural Funds is a real estate investment trust (REIT) that has a portfolio of high-quality agricultural assets that are leased to experienced tenants for the long-term.

Nearly all of the rental contracts are paid quarterly in advance, this provides good certainty. Rural Funds has high cashflow certainty with tenants shouldering most of the risk and the operational responsibilities.

Rental indexation increases are built into all of the contracts and are linked to either CPI inflation or a 2.5% fixed increase.

Farmland has been a useful assets for many hundreds of years and I expect it will keep being a good cash earner for a long time to come.

Transurban Group (ASX: TCL)

Transurban is a major toll road developer and builder. Australia’s major cities keep growing and the amount of traffic on our roads continues to increase.

With more traffic on Transurban’s roads and a slightly higher toll each year, Transurban has an impressive growing business which is mostly automated with its tolling systems.

Transurban has been steadily increasing its distribution since the GFC.

Foolish takeaway

None of these shares are cheap, quality is fairly expensive on the ASX. Rising interest rates makes me wary of the bond-like Transurban at the current price.

Soul Patts and Rural Funds have both had a strong two years in share price rices, but I believe they could deliver market-beating total returns over the next decade or two.

Another share that is generating wonderful returns every year is this ASX star which just increased its dividend by 20%.

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Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED, Transurban Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Brickworks and TPG Telecom Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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