Why Brickworks (ASX:BKW) shares are an ASX dividend favourite

Here’s why the Brickworks dividend has a great reputation amongst ASX dividend investors.

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An elderly retiree holds her wine glass up while dancing at a party feeling happy about her ASX shares investments especially Brickworks for its dividends

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When it comes to investing in ASX dividend shares, Brickworks Limited (ASX: BKW) is a name that might come up.

Brickworks is one of the oldest listed businesses on the ASX. As such, it’s a company that you’ll probably find in many an ASX dividend investors’ portfolio. But why?

Let’s check out what this income share has to offer investors today.

Brickworks first opened its doors back in 1934. As its name implies, this company is a building supplies business. It manufactures and distributes bricks and other building products.

But that’s only part of the story of how Brickworks makes money. It also has a robust property portfolio, which it develops by repurposing land formerly used for the manufacturing of building supplies.

Further, the company also owns a large chunk (26.1%) of Washington H. Soul Pattinson and Co Ltd (ASX: SOL). These 2 supplementary facets of Brickworks’ business help the company balance out the cyclical cash flows inherent in the construction industry.

But let’s take a look at how all of that translates into dividends.

How does the Brickworks dividend stack up?

So Brickworks has paid a biannual dividend for more than 45 years. In that time, it has never cut its dividend — either maintaining or increasing its payouts. Brickworks dividends have been rising every year since 2014, including throughout the COVID-19 crisis years.

Not too many other ASX shares can boast of such a robust dividend record. And this is arguably 1 of the reasons why Brickworks remains a respected favourite of the ASX dividend investor.

The company’s last 2 dividend payments were 21 cents per share (interim) paid in April 2021, and 40 cents per share (final) doled out in November. Both dividend payments came fully franked, as is typical with Brickworks.

So on today’s pricing, that dividend record translates into a yield of 2.49%. That’s 3.55% grossed-up with the full franking credits included.

Not the highest raw yield you can get on the ASX, but perhaps one of the more reliable by going off the company’s impressive history.

The Brickworks share price has also had some strong appreciation in recent times. It’s up a healthy 31% over the past 12 months and a pleasing 87% over the past 5 years.

At the current Brickworks share price of $24.46, this ASX dividend share has a market capitalisation of $3.71 billion.

Motley Fool contributor Sebastian Bowen owns Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns and has recommended Brickworks and Washington H. Soul Pattinson and Company 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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