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3 quality ASX shares raising their dividends like clockwork

In an era where wage growth, interest rates and inflation are so low, I think it could be an idea to look for businesses that are increasing their dividends to shareholders every year to make up for the flat income from work.

Obviously a dividend has to be funded by underlying earnings growth too, some dividends could become unsustainable if they depart from the reality of the underlying business.

Here’s three ASX shares that fit the bill:

Ramsay Health Care Limited (ASX: RHC)

Ramsay is one of the world’s largest private hospital businesses and it has increased its dividend every year since 2000.

This dividend growth could continue thanks to two important elements. The first is that the ageing demographics point to a long and steady growth tailwind for Ramsay as long as the private health system remains viable.

The other is that Ramsay continues to add new hospitals to its network through organic construction of new buildings (and through acquisitions) as well as expanding its existing hospitals.

It currently has a grossed-up dividend yield of 2.9%.

REA Group Limited (ASX: REA)

REA Group is Australia’s largest property real estate portal business which owns sites like realestate.com.au and realcommercial.com.au. It has increased its dividend each year since 2009.

Owning the number one property portal gives REA Group a lot of pricing power with how integral it is to sell a property. Being number one attracts the most potential buyers, which then attracts the most sellers, which attracts the most buyers and so on.

Over the long-term I’m attracted to the idea of REA Group’s various overseas investments that could turn into sizeable earnings generators.

REA Group currently has a grossed-up dividend yield of 1.7%.

Duxton Water Ltd (ASX: D2O)

Duxton Water is the only company on the ASX which is a pure-play on owning water entitlements and leasing them to agricultural businesses.

The likely long-term growth in water value will help boost the lease income and the price of the water that Duxton Water owns. More frequent drought conditions and higher usage of water by high-value crops such as almonds could be very profitable for Duxton Water.

It aims to increase its dividend every six months and has done so since it started paying a dividend in 2017.

Duxton Water has a forward grossed-up dividend yield of 5.7%.

Foolish takeaway

Each of these businesses are attractive for dividend growth, but I would definitely prefer Duxton Water because of the higher yield and the discount to its underlying value.

Here are some more top-notch ASX shares that are also regularly growing their dividends for investors.

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Motley Fool contributor Tristan Harrison owns shares of DUXTON FPO. The Motley Fool Australia has recommended DUXTON FPO, Ramsay Health Care Limited, and REA Group 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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