2 ASX shares that could keep growing the dividend every year

Accent and APA are two ASX dividend shares that have a history of growing dividends.

| More on:
man happily kissing a $50 note

Image source: Getty Images

A few ASX dividend shares have a history of growing dividends for shareholders and may have the potential to continue that record going.

Plenty of businesses cut their dividend payments during the difficult COVID-19 year of 2020 such as National Australia Bank Ltd (ASX: NAB), Macquarie Group Ltd (ASX: MQG) and Woodside Petroleum Ltd (ASX: WPL).

But there were a group of businesses that managed to continue those increases:

APA Group (ASX: APA)

APA describes itself as a leading Australian energy infrastructure business. It owns and/or operates a $22 billion of gas, electricity, solar and wind assets. However, the assets are predominately related to gas infrastructure with its national gas pipeline.

The business is steadily adding to its portfolio of assets, which unlocks more cashflow over time. This in turn funds higher distributions.

One of the latest things that APA plans to do is expand its east coast grid pipeline. The expansion will be delivered in two stages and a capital investment of $270 million. It will increase winter peak capacity of the east coast grid by 25% through additional compression and associated works on two key pathways for delivery of gas from Queensland and the Northern Territory to southern markets. Engineering and design works continue on a potential third stage expansion of the East coast grid to add a further 25% of transportation capacity.

The ASX dividend share has increased its distribution every year for over a decade and a half. The FY21 distribution was increased by 2% to 51 cents per security. It currently offers a distribution yield of 5.4%.

Accent Group Ltd (ASX: AX1)

This is a large footwear business which has over 500 stores, 19 brands and over 20 online platforms. Some of the brands that it’s responsible for in Australia include Stylerunner, Vans, The Athlete’s Foot, Platypus, CAT and Trybe.

It has increased its dividend each year for the past several years.

The business is looking to significantly increase its store network size whilst also growing its online sales.

It was expecting to open at least 90 stores in FY21 with a continued strong store opening schedule expected into FY22.

In the first six months of FY21, its digital sales increased by 110% to $108.1 million and represented 22.3% of sales.

The ASX dividend share has been working on its margins and efficiencies. HY21 saw the fruit of those efforts – whilst total sales only increased 6.6% year on year, earnings before interest and tax (EBIT) climbed 47.3% to $81.8 million and net profit after tax (NPAT) grew 57.3%.

It grew its interim dividend by 52.4% to 8 cents per share. The company says it continues to be defined by strong cash conversion and the “consistent strong returns it delivers on shareholders’ funds”. Over the longer-term, it’s aiming for at least 10% compound earnings per share (EPS) growth, which could help the dividend grow further.

At the current Accent share price, it has a grossed-up dividend yield of 6.3%.

Should you invest $1,000 in APA right now?

Before you consider APA, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and APA wasn't one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

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 APA Group and Macquarie Group Limited. The Motley Fool Australia has recommended Accent Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Dividend Investing