There are some ASX dividend shares out there raising dividends like clockwork.
I think it's particularly important to find businesses growing their dividends. If a business isn't growing their dividend then it suggests the business is struggling to grow their earnings. It may suggest that the board thinks the business needs to hang onto cash just to tread water.
After Ramsay Health Care Limited's (ASX: RHC) recent dividend suspension due to coronavirus impacts, there aren't many shares left with solid dividend records.
Here are three ASX dividend shares that are growing their dividends like clockwork:
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
Soul Patts is now the ASX dividend share king of Australia. It is the only business to have increased its dividend every year since 2000.
The investment conglomerate has a diversified portfolio of listed and unlisted businesses. Some of its biggest holdings include shares like TPG Telecom Ltd (ASX: TPM) and Brickworks Limited (ASX: BKW).
Its investments and other assets provide an attractive source of dividends, distributions, interest and so on. Soul Patts retains a certain amount of this each year to re-invest into more opportunities. It retained around 20% of its net regular operating cashflow in FY19.
Soul Patts has paid a dividend every year in its existence, which is a record that extends over a century.
Management have already guided that the dividend is expected to increase at the full year result later this year.
APA Group (ASX: APA)
APA is another of the ASX dividend shares that has a record going back before the GFC. It has increased its distribution every year for a decade and a half.
What is APA? It owns a vast network of 15,000km of natural gas pipelines around Australia with a presence in every mainland state and the Northern Territory. It also owns or has interests in gas storage facilities, gas-fired power stations and renewable energy generation (wind and solar farms). APA owns, or manages and operates, a portfolio of assets worth more than $21 billion and delivers half the nation's natural gas usage.
There continues to be solid demand across the country for gas. More people are cooking at home. It's getting into the colder months in the southern states.
APA funds its annual distribution from the cashflow that it makes. The distribution and cashflow have been growing nicely over the past decade.
The infrastructure giant continues to invest in new projects that will earn more cashflow in the future. This should help the distribution to keep growing.
Rural Funds Group (ASX: RFF)
Rural Funds is a farmland real estate investment trust (REIT). It owns an impressive portfolio of farms including almonds, cattle, cotton, vineyards and macadamias.
The farmland trust aims to grow the distribution by 4% a year, this goal comfortably beats the current inflation rate. It's able to go for that level of growth through contracted rental indexation and investing in productivity improvements at its farms. It will occasionally make an acquisition which will presumably be accretive for unitholders.
It could be one of the best ASX dividend shares.
Farmland has been a solid performer over the years and 2020 is predicted to be another good year. Food security will become more important over the next decade, particularly if the global population keeps growing and some global farmland degrades in the 2020s.
It hasn't been listed on the ASX that long, but its distribution increase record has been on target over the past five years.
Foolish takeaway
All three of these ASX dividend shares have been increasing their payments for many years. I think Soul Patts is by far the best dividend share on the ASX in terms of reliability and growth. It would be my pick dividend pick.
