There is a term used by US dividend investors that describes dividend royalty on the American exchanges: dividend aristocrats. A ‘dividend aristocrat’ is a stock listed on the S&P 500 index that has continuously paid and increased its dividend for the last 25 years in a row.
Although there is no such formalised institution over here on the ASX, we can take a look at some of the best dividend paying companies and make our own dividends aristocrats index. Here are some stocks that, according to Livewire, come as close as you can get to an ASX dividend aristocrats. Although none have increased their dividends for 25 years straight, two are approaching this level.
InvoCare Ltd (ASX: IVC)
InvoCare is a funeral provider that owns over 290 funerals and crematoria across Australia as well as New Zealand and Singapore. As you can imagine (with our ageing population), the demand for funeral services has been on a steady inclination over the past few decades (sorry if that’s a bit dark). InvoCare has been consolidating its operations and expanding its market in addition, so its earnings (and dividend) have been consistently rising as well.
Until this year, InvoCare had increased its dividend every year since 2005. However, an unexpectedly tough 2018 has left the payout slightly dented recently. I expect this won’t last long and InvoCare’s dividend will keep increasing over the coming decade.
Ramsay Health Care Limited (ASX: RHC)
Ramsay Health Care is one of Australia’s largest operators of private hospitals. As you can imagine, the healthcare industry is one of the businesses to be in as Australians are living longer than ever. Ramsay has carved out a niche using its reputation for quality care at low prices at its flagship hospitals and has an ambitious growth plan in Europe. Ramsay has increased its dividend every year since 2000 and looks to be on track to keep this going in 2019 – making this one of our best dividend aristocrat candidates.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
Soul Pattinson is one of our oldest companies on the ASX and also has one of the best dividend records. SOL has paid a dividend every year since inception and has increased said dividend every year since 2000. This puts it on par with Ramsay Health Care as one of the best dividend payers on record. ’Soul Patts’ invests in a portfolio of other quality ASX companies including Brickworks Ltd (ASX: BKW) and TPG Telecom Ltd (ASX: TPM), so you can be assured of getting a good bang for your buck. I have every confidence that Soul Patts can continue to improve on its excellent track record for years to come.
With these companies, I believe you have a trio of excellent dividend payers with the track record to justify an investment today. On current prices, I like Soul Patts the best, as the other two have raced ahead over the past few months. All are on my watch list though, and I’m looking forward to acquiring all three at some point in the future.
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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Brickworks, InvoCare Limited, and Ramsay Health Care 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.