When I buy dividend-paying ASX shares, I like them to have two things. Firstly, a decent starting yield with a likelihood of fairly regular increases down the road. Secondly, the reasonable belief that the company will be around and paying higher yields still in 5, 10 or even 20 years.
Here are 5 ASX dividend stocks that I think offer us both.
BHP Group Ltd (ASX: BHP)
Do I think the world will be buying iron ore and copper in twenty years' time? Absolutely. So that's why I'm going with one of the lowest-cost producers of these resources in the world. BHP has world-class iron and copper assets as well as coal and petroleum. The company has been able to use its low cost-base to shower investors with cash any time commodity prices rise (as we saw this year with iron ore). For these reasons, I'd buy and hold BHP for as long as possible.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
'Soul Patts' has the rare distinction of being able to brag a dividend pay-rise for its shareholders since the year 2000. This diversified conglomerate has large interests in other ASX businesses like TPG Telecom Ltd (ASX: TPM), as well as a small network of pharmacies. I have every reason to believe it will continue to manage these effectively and give us another 20 years of increasing dividends.
Coles Group Ltd (ASX: COL)
Unless we evolve a way of surviving without eating in the next hundred years, I'd say Coles is going to be around to sell us cheap groceries (not to mention other household essentials). You couldn't ask for a more defensive earnings base than this, and Coles' meaty dividend yield of around 3.5% adds to the pile of reasons I'd be happy with owning Coles for the rest of my life.
CSL Limited (ASX: CSL)
We're breaking my first rule here, as CSL currently offers a starting yield of just 0.97%. However, this is a healthcare company with buckets of cash and is the best dividend growth stock on the ASX, in my opinion. Even though it only started paying a dividend in 2013, it has nearly doubled its payout since then and will continue to raise it every year for a long time, in my opinion.
Wesfarmers Ltd (ASX: WES)
Wesfarmers has to be the most diversified blue-chip ASX company out there. It owns Bunnings, Officeworks, Target, Kmart, a 15% stake in Coles as well as a bevy of other companies including King Gee clothes, Kleenheat Gas and most recently Kidman Resources Ltd (ASX: KDR), which it finalised acquisition of just yesterday. You can expect a yield of 3.85% going forward from this company, which is just fine for a long-term buy and hold.
Foolish takeaway
With these 5 ASX dividend stocks, I think we have a perfect mix of income-generating companies that would be very comfortable in a long-term portfolio. All offer solid earnings bases and high likelihoods of consistent shareholder pay rises down the road.
