3 ASX shares that keep growing their dividends every year

These 3 ASX shares keep growing their dividends for shareholders, including record-holder Washington H. Soul Pattinson and Co. Ltd (ASX:SOL).

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A businessman points to and arrow going up on a graph, indicating a share price rise for an ASX company

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There are a handful of ASX shares that have a long-term record of growing their dividend for many years in a row.

COVID-19 didn’t stop these businesses from increasing the payout for shareholders despite all of the disruption.

These three businesses have been increasing the dividend for many consecutive years:

Domino’s Pizza Enterprises Ltd. (ASX: DMP)

The Domino’s share price has grown by 73% over the past year on the back of a lot of demand during this period of COVID-19 lockdowns.

Domino’s saw a 16.5% increase in network sales to $1.84 billion in the six months to December 2020. There was also 25.4% growth of online sales to $1.42 billion.

The pizza business reported operating leverage in its business. Earnings before interest, tax, depreciation and amortisation (EBITDA) went up 23.8%, earnings before interest and tax (EBIT) grew 32.3% to $153 million, underlying net profit rose 32.8% to $96.8 million and free cashflow surged 50.3% to $124.4 million.

All of this growth funded a 32.5% increase in the interim dividend by the ASX share. It has increased its annual dividend for over a decade.

Domino’s Pizza has plans for a very large store rollout across Europe and Japan over the next few years.  

Sonic Healthcare Ltd (ASX: SHL)

Global pathology business Sonic has been growing its dividend every year for almost a decade. It had been steadily benefiting from the ageing population and expanding global network.

COVID-19 caused a huge rise in demand for its services to process millions of COVID-19 tests. Due to that fact these tests are utilising Sonic’s infrastructure, it’s causing the business to see excellent operating leverage. That’s how net profit was able to jump 166% to $678 million in the FY21 half-year result.

The ASX share gave shareholders a 6% increase to the interim dividend to $0.36 per share.

Sonic revealed that it’s looking for further growth opportunities, including acquisitions, contracts and joint ventures, supported by its “very strong” balance sheet. It’s looking at opportunities in Australia as well as overseas.

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

Soul Patts is the clear leader when it comes to dividends increases on the ASX. It has grown its dividend every year since 2000, including through the GFC and COVID-19.

That dividend is funded by a diversified portfolio of shares and assets. Some of its biggest investments include 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).

Each year, Soul Patts receives many millions of dollars of investment income from its portfolio. The investment conglomerate pays for its (limited) expenses and then pays out most of the rest as a growing dividend. However, Soul Patts retains some of that net operating cashflow each year to re-invest into more opportunities.

Some of Soul Patts’ more recent investments includes swimming schools, agriculture and luxury retirement homes.

At the current Soul Patts share price, it has a grossed-up dividend yield of 2.9%.

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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 Dominos Pizza Enterprises Limited and Sonic Healthcare Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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