2 ASX 200 shares that keep growing their dividends

Sonic Healthcare and Brickworks keep increasing their dividends for shareholders.

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A money jar filled with coins, indicating an investment return from an ASX dividend share

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There are a group of S&P/ASX 200 Index (ASX: XJO) shares that continue to increase their dividend every year for investors.

Plenty of businesses previously known for paying dividends have reduced their payment during the last 18 months. Businesses like Westpac Banking Corp (ASX: WBC), Sydney Airport Holdings Pty Ltd (ASX: SYD) and Transurban Group (ASX: TCL) all implemented reductions.

But these two continued the increases:

Sonic Healthcare Ltd (ASX: SHL)

Sonic is one of the largest pathology healthcare businesses in the world with operations in ANZ, North America and Europe.

It is playing a very important part in the COVID-19 pandemic where it has performed millions of tests. That work continues, particularly in locations where COVID-19 infections are rising (with the Delta variant).

Sonic has increased its dividend most years in the last two decades, including a current growth streak that goes back several years.

That record continued in the FY21 half-year result where the board decided to maintain its progressive dividend policy with a 6% rise to 36 cents. That was a modest increase compared to the earnings growth with revenue rising 33% and net profit going up 166% to $678 million.

At the time of the profit announcement, management said that the ASX 200 share was looking for further growth opportunities, including acquisitions.

Last month the business announced that it was going to acquire Canberra Imaging Group (CIG). This business comes with annual revenue of around $60 million and is the leading radiology practice in Canberra. It is a “significant and positive step” in developing Sonic Imaging’s division in Australia, broadening its footprint, deepening the talent pool, increasing the division’s revenue by around 10% and offering potential synergy benefits.

At the current Sonic share price, it offers a partially franked dividend yield of 2.2%.

Brickworks Limited (ASX: BKW)

Brickworks is another ASX 200 share that also has a long dividend record going. Not only has it increased its dividend every year for the past several financial years in a row, but it also hasn’t cut its dividend in over forty years.

Whilst the business is best known for being the largest brickmaker in Australia (and now the northeast of the US), it’s the other assets that Brickworks relies on to pay its dividends each year.

A significant part of the cashflow to pay the dividend comes from its Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) investment that it owns around 40% of. Soul Patts’ diversified portfolio is defensively positioned in businesses like TPG Telecom Ltd (ASX: TPG) and Bki Investment Co Ltd (ASX: BKI), swimming schools and agriculture. Soul Patts has been steadily increasing its dividend to shareholders, like Brickworks, for two decades.

Brickworks also has a large and growing industrial property joint venture alongside Goodman Group (ASX: GMG). At the FY21 half-year result, Brickworks said this business has significant land for further development at each of its estates.

There is a total of 171,000 sqm of lease pre-commitments already secured. The completion of these facilities over the next two years will result in gross rent within the trust increasing by around $38 million, representing a 40% uplift from the current level.

Brickworks said that there has been an evolution towards more sophisticated and specialised facilities, incorporating things like robotics, automation and multi-storey warehousing.

In addition to the pre-committed developments, a further 336,900 sqm of gross lettable area (GLA) is available for development within the trust, providing further opportunity for growth.

At the current Brickworks share price, it has a grossed-up dividend yield of 3.5%.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Brickworks. The Motley Fool Australia has recommended 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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