The great thing about owning businesses is that they can give you a payrise year after year like clockwork.
There’s no question that share prices can be volatile each week or even each day. Indeed, earnings can also jump around year to year. But dividends and distributions can be more reliable because they are largely controlled by management, as long as there are profit reserves.
These are three of my favourite ideas of businesses that are growing their payments to shareholders year after year and likely can keep doing so:
WAM Research Limited (ASX: WAX)
WAM Research is a listed investment company (LIC) which invests in promising small and medium ASX growth businesses. It generates profit from both the dividends it receives and the capital growth it achieves, which it then pays a growing dividend from.
It has been growing its dividend each year since the GFC and its portfolio has generated market-beating returns before fees and expenses since the GFC.
WAM Research currently offers a grossed-up dividend yield of almost 10%.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
Soul Patts is an ASX-listed conglomerate that has been operating for over a century.
I think it could be one of the best dividend shares on the ASX, it has paid a dividend every year in its history and has grown its annual ordinary dividend each year since 2000 – only one other business on the ASX has such a long consistent growth record.
The great thing about Soul Patts is that it can invest in whatever business it thinks is a good long-term opportunity. For example, two of its largest holdings are Brickworks Limited (ASX: BKW) and TPG Telecom Ltd (ASX: TPM).
Soul Patts currently has a grossed-up dividend yield of 3.6%.
Rurul Funds Group (ASX: RFF)
Rural Funds is a real estate investment trust (REIT) which owns farmland. The management have projected that the Rural Funds distribution can grow by 4% a year for the foreseeable future.
This growth is based on the fact that all of Rural Funds’ rental contracts with its tenants are linked to either CPI inflation or a fixed 2.5% fixed increase.
With a diverse portfolio of farms with almonds, macadamias, poultry, vineyards, cattle and cotton, Rural Funds is fairly well protected against problems in any particular farming sector.
Rural Funds has a trailing distribution of 4.5%.
Each of these businesses have very attractive dividend propositions in my opinion. WAM Research requires ongoing positive returns to keep its dividend going upwards, whereas Soul Patts and Rural Funds funds their payments from just the cash profit they produce, so although their yields are substantially lower I would rather go for them for long-term dividend security.
Other high-quality ASX dividend shares to think about for an income portfolio are these top ASX share options.
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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 and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Brickworks. 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.