Investors may be on the search for ASX dividend shares that can provide growing income in retirement.
Not every business has been able to grow their dividend in every year of the past five years. Just look at what happened to Sydney Airport Holdings Pty Ltd (ASX: SYD), Transurban Group (ASX: TCL) and Commonwealth Bank of Australia (ASX: CBA) with COVID-19.
But these two ASX dividend shares may be able to provide growing dividends in the coming years:
APA Group (ASX: APA)
APA is one of the biggest infrastructure businesses on the ASX. It owns a vast gas pipeline across Australia, spanning 15,000km across mainland Australia. APA supplies half of the nation's natural gas usage. It also owns or has interest in gas storage facilities, gas power stations and renewable energy generation (wind and solar farms).
The business recently confirmed it is in discussions to potentially buy Basslink Pty Limited, which owns and operates a 370km high voltage, direct current electricity interconnector between Victoria and Tasmania.
A key focus of the business is to leverage its energy infrastructure capabilities into the next generation energy technologies. APA calls this its pathfinder program. APA is looking for opportunities in both Australia and the USA.
APA points to an opportunity worth at least $68 billion to 2040 in Australia. That's $8 billion in gas pipeline infrastructure, at least $40 billion in renewables, firming and storage and at least $20 billion in electrification (mostly transmission).
In the USA, APA also says there's an investment opportunity worth at least US$2.7 trillion to 2040. There's $125 billion of gas pipeline infrastructure, US$1.6 trillion of renewables and firming and US$1 trillion of electrification.
APA also believes the hydrogen economy worldwide is worth up to US$11 trillion. There is potential for APA's existing pipeline to be repurposed for hydrogen (fully or blended).
The ASX dividend share has increased its distribution every year for over a decade and a half. In FY22 it's expecting to grow the distribution by another 3.9% to 53 cents. That's a forward distribution yield of 5.7%.
Washington H. Soul Pattinson and Co Ltd (ASX: SOL)
Soul Patts is an investment house that has been listed since 1903. It has paid a dividend every year since then. It also has the record on the ASX for the number of years it has consecutively increased its dividend for shareholders. That growth streak started in 2000.
The business has a diversified portfolio of assets that help fund its dividend every year. Some of its ASX investments include TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), New Hope Corporation Limited (ASX: NHC), Milton Corporation Limited (ASX: MLT), Bki Investment Co Ltd (ASX: BKI), Clover Corporation Limited (ASX: CLV), Pengana Capital Group Ltd (ASX: PCG), Pengana International Equities Ltd (ASX: PIA) and Australian Pharmaceutical Industries Ltd (ASX: API).
The ASX dividend share also has investments in unlisted businesses such as agriculture, financial services, mining (Round Oak), swimming schools and electrical products (Ampcontrol).
Round Oak, Brickworks and New Hope are expected to add to Soul Patts' FY21 regular net profit after a good year.
Soul Patts receives dividends and distributions from its portfolio, pays out some as a growing dividend and re-invests the rest for more long-term growth.
At the current Soul Patts share price, it has a grossed-up dividend yield of 2.5%.
