Some ASX dividend shares might be able to pay retirees steady income in retirement.
Plenty of businesses that were known as dividend shares in the S&P/ASX 200 Index (ASX: XJO) cut their payments in the COVID-19 year of 2020. Commonwealth Bank of Australia (ASX: CBA) and Sydney Airport Holdings Ltd (ASX: SYD) were just two that had to implement cuts.
But these two ASX dividend shares increased their payments in 2020 and have done so again in the first half of FY21:
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
Soul Patts, an investment house, increased its dividend by 3.4% to 60 cents per share. The FY21 interim dividend was grown by 4% to 26 cents per share.
The business declares dividends from the cash it receives from its investment portfolio, rather than accounting earnings.
The net cash flows from investments received by the ASX dividend share in FY20 was 49% higher than FY19. It's the only company in the All Ordinaries (ASX: XAO) that has increased its dividends every year for 20 years.
It has investments in plenty of other ASX shares like TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), New Hope Corporation Limited (ASX: NHC), Milton Corporation Limited (ASX: MLT) and Bki Investment Co Ltd (ASX: BKI).
Management explain that one of Soul Patts' key advantages is a flexible mandate to make long-term investment decisions and adjust the portfolio by changing the mix of investment classes over time.
Soul Patts Chair Robert Millner said:
Our aim is to pay a stable and growing dividend year on year. During the GFC many companies cut their dividends while WHSP was able to increase dividends and we are seeing the same thing occur this year as a result of our diversified portfolio and long-term investment decisions.
At the current Soul Patts share price, it has a grossed-up dividend yield of 3%.
APA Group (ASX: APA)
APA is one of the biggest infrastructure businesses on the ASX. It's also the ASX dividend share with one of the longest consecutive distribution growth streaks, aside from Soul Patts. That consecutive improvement goes back more than a decade and a half.
In FY20 APA grew its overall distribution by 6.4% to 50 cents per security. In the FY21 interim result, it grew the distribution by another 4.3% to 24 cents per security.
It owns a wide array of energy assets. Predominately, its assets relate to gas pipelines, gas storage and gas energy generation. APA also has a growing portfolio of renewable energy assets.
The business funds its growing distribution by the cashflow from its assets and projects.
APA says that it has maintained a consistent growth strategy and has built a significant portfolio of energy infrastructure assets that are essential today to ensuring the ongoing supply of gas and electricity for Australians.
The company believes the pool of investment opportunities remains significant. The US remains an attractive opportunity and it remains focused on applying its disciplined approach to finding the right investment there. At the current APA share price, it has a current distribution yield of 5.4%.
