ASX dividend shares could be good to think about in August 2021.
The world isn’t in a global lockdown like last year, but dividends are not guaranteed, particularly in this environment.
Some businesses managed to increase their payments for shareholders even during the COVID-affected 2020 year.
Here are two to think about:
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
Soul Patts is the ASX dividend share with the longest dividend growth record. It has actually increased its dividend each year since 2000.
The company has a portfolio of both listed and unlisted assets. It operates as an investment conglomerate.
It has plenty of other investments, though they aren’t as large positions in the portfolio: Bki Investment Co Ltd (ASX: BKI), Pengana Capital Group Ltd (ASX: PCG), Pengana International Equities Ltd (ASX: PIA), Tuas Ltd (ASX: TUA), Clover Corporation Limited (ASX: CLV), Bailador Technology Investments Ltd (ASX: BTI), Commonwealth Bank of Australia (ASX: CBA) and Woolworths Group Ltd (ASX: WOW).
Non-ASX holdings include resources, financial services, healthcare, electrical products, agriculture and swimming schools.
Soul Patts receives investment income from its portfolio, pays for its expenses and then releases a majority of the cashflow to shareholders as a dividend each year. Some profit is retained for future investments.
At the current Soul Patts share price, the ASX dividend share has a grossed-up yield of 2.7%.
Charter Hall Long WALE REIT (ASX: CLW)
This is a real estate investment trust (REIT) with a focus on finding quality tenants with long-term leases.
Its portfolio has a weighted average lease expiry (WALE) of 13.2 years, which is one of the longest in the sector.
The ASX dividend share is currently rated as a buy by the broker Morgan Stanley with a price target of $5.35.
Charter Hall Long WALE REIT was one of the few property businesses to increase the distribution in 2020 thanks to its portfolio of large and stable tenants that currently includes several government entities, Telstra Corporation Ltd (ASX: TLS), BP, Endeavour Group Ltd (ASX: EDV), Inghams Group Ltd (ASX: ING), Coles Group Ltd (ASX: COL), David Jones and Metcash Limited (ASX: MTS).
Its properties are spread across a variety of different sectors including offices, telecommunications, grocery and distribution, fuel and convenience, pubs and bottle shops, food manufacturing, waste and recycling, and ‘other’ (such as Bunnings).
The business has been steadily growing its operating earnings per share (EPS). It pays out 100% of its operating EPS as a distribution. It’s expecting EPS growth of at least 4.5% in FY22.
Morgan Stanley is expecting the FY22 distribution will be 31.2 cents per unit. That translates to a yield of 6.3%.