2 very reliable ASX dividend shares to buy

In this article are 2 very reliable ASX dividend shares to buy, including laboratory pathology business Sonic Healthcare Ltd (ASX:SHL).

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There are some very reliable ASX dividend share available to Aussie investors that are consistently growing their payouts for shareholders.

These two businesses are rated as buys by the Motley Fool Dividend Investor service:

Sonic Healthcare Ltd (ASX: SHL)

Sonic Healthcare is a global medical laboratory company. It has operations across many countries including the USA, Australia, Germany, Switzerland, UK, Ireland, Belgium and New Zealand.

It’s playing an important role in the fight against COVID-19. It has performed over 11 million COVID-19 tests to date.

The healthcare company has been awarded a number of contracts in the US, UK and Australia for testing.

Despite COVID-19 severely impacting volumes in the early stages of the pandemic, there has been a recovery and it grew revenue by 11% in FY20, which helped underlying net profit increase by 7%.

In FY20 the ASX dividend share maintained its final dividend, but there had been a 3% increase of its interim dividend, which meant the total FY20 dividend was increased by 1.2% to $0.85 per share.

Due to COVID-19, Sonic wasn’t able to give any FY21 guidance. However, it did say that in general, COVID-19 related falls in its base business saw an associated increase in COVID-19 testing volumes. Base laboratory business revenue (excluding COVID-19 testing) is up on prior year levels in most countries, with negative but improving growth in the US and UK.

Strong COVID-19 testing volumes is currently augmenting growth for Sonic.

In the first quarter of FY21 it saw revenue growth of 29% and earnings before interest, tax, depreciation and amortisation (EBITDA) growth of 71%.

Sonic has a steadily growing dividend and FY20 was another year in that long streak. At the current Sonic share price it offers a grossed-up dividend yield of 2.9%.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Patts is an investment conglomerate which has been listed since 1903 when it started out as a pharmacy business.

It has a diversified portfolio of different assets.

Soul Patts has large stakes in listed businesses spread across many sectors like building products, telecommunications, resources, listed investment companies (LICs), banks, fund managers and pharmacies.

The actual shares the ASX dividend share owns in its portfolio includes TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), Commonwealth Bank of Australia (ASX: CBA), Milton Corporation Limited (ASX: MLT), Bki Investment Co Ltd (ASX: BKI), Magellan Financial Group Ltd (ASX: MFG) and Pengana Capital Group Ltd (ASX: PCG).

It also owns unlisted businesses, either wholly or with sizeable stakes. Some of the unlisted businesses include resources, financial services, swimming schools, agriculture and Ampcontrol.

The investment house recently made a takeover bid for aged care operator Regis Healthcare Ltd (ASX: REG), though the public bid was knocked back because the Regis board believed it materially undervalued the company.

There has also been reports that Soul Patts is investing in regional data centres, though this hasn’t been properly outlined by the company in an ASX announcement yet.

In terms of the dividend, Soul Patts has paid a dividend every year since it listed 1903. It has also increased its dividend every year since 2000, which is the best consecutive dividend growth record on the ASX.

The Soul Patts dividend is funded by the investment income it receives, largely being the dividends from its holdings.

At the current Soul Patts share price it has a trailing grossed-up dividend yield of 3.1%. If a 2 cents per share annual increase of the dividend is paid in FY21 then it offers a forward 3.2% grossed-up dividend yield.

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Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Sonic Healthcare 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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