3 ASX dividend shares to buy in December

In this article are 3 ASX dividend shares that are rated as buys a Motley Fool income-focused service, including Bapcor Ltd (ASX:BAP).

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In this article are three ASX dividend shares that are rated as buys by one of the income-focused Motley Fool investment services.

Income is more in focus with the Reserve Bank of Australia (RBA) recently cutting the official interest rate to just 0.1%.

Some businesses which used to have higher dividend yields cut their dividends during the main COVID-19 period, such as the large ASX banks like Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB) and Australia and New Zealand Banking Group Ltd (ASX: ANZ).

The follow three recommendations grew the dividend or distribution in 2020:

APA Group (ASX: APA)

APA owns a large 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 and delivers half the nation's natural gas usage.

The energy infrastructure business has increased its distribution every year in a row for a decade and a half.

The ASX dividend share increased its total FY20 distribution by 6.4% to 50 cents per unit. This was funded by operating cashflow rising by 8.3% and net profit after tax (NPAT) going up by 10.1%.

At the current APA share price it has a trailing distribution yield of 4.75%.

APA is rated as a buy by the Motley Fool Everlasting Income service.

Brickworks Limited (ASX: BKW)

Brickworks is another business with a long dividend record. It hasn't cut its dividend in over four decades.

The company owns various businesses and assets that provide steady earnings and growing distributions.

The ASX dividend share has a 50% ownership of an industrial property trust which it owns along with Goodman Group (ASX: GMG). The trust will soon finish two distribution warehouses for Coles Group Ltd (ASX: COL) and Amazon which should boost the rental distributions from the property trust by around a quarter.

Its non-construction assets alone fund the dividend.

However, Brickworks does run two large building products businesses. In Australia, where it sells bricks, roofing and other products, it's seeing a recovery.  

Whereas its North American operations are facing difficulties in light on COVID-19 impacts. However, management are still confident about the long-term in the USA.

At the current Brickworks share price it has a grossed-up dividend yield of 4.4%.

Brickworks is currently rated as a buy by the Motley Fool Dividend Investor service.

Bapcor Ltd (ASX: BAP)

Bapcor is the largest auto parts business in Australia and New Zealand with brands like Burson Trade, Autobarn, Midas, ABS and Autobarn.

Despite doing a capital raising in light of early COVID-19 impacts, Bapcor still increased its dividend in FY20 by 2.9% to 17.5 cents per share. But that includes the final dividend being maintained at 9.5 cents per share.

But the ASX dividend share's pro-forma net profit after tax fell by 5.5% in FY20.

However, FY21 has started with growth in the first quarter. Burson Trade revenue was up 10%, with same store sales growth of 7.7% – it was up 17% excluding Victoria. New Zealand revenue grew by 6% on same store sales growth of 4%. Retail revenue soared 47% higher, with Autobarn same stores sales going up 36%. Finally, specialist wholesale revenue went up 45%, though excluding acquisitions revenue went up 18%. Overall, group revenue went up by 27%.

At the current Bapcor share price it has a trailing grossed-up dividend yield of 3.6%.

The Bapcor share price is currently rated as a buy by the Motley Fool Dividend Investor service.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bapcor and Brickworks. The Motley Fool Australia owns shares of APA Group and COLESGROUP DEF SET. 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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