Shares inside the S&P/ASX 200 Index (ASX: XJO) that offer an above-market average dividend yield tend to be popular among investors.
A high dividend yield is an enticing characteristic for any company, but a high yield can come and go in a flash. Ideally, we are looking for businesses that can reliably grow dividends in a sustainable trajectory. These are companies that have consistently increased their dividends per share year after year, after year, after year — you get the idea.
Sounds dreamy, doesn't it! Well, here are three ASX 200 shares that have been living up to the 'dividend beast' moniker by steadily increasing their dividends over the past five years.
ASX 200 dividend shares that keep on giving
Before we get into the thick of it, the criteria for an ASX 200 company to feature in this list is simple… but not easy. Crucially, annual dividends per share (DPS) paid to shareholders need to have increased each year for the past five years. If the DPS were flat or fell for a single year, it is scratched from consideration.
Steadfast Group Ltd (ASX: SDF)
Australiasia's largest general insurance broker network, Steadfast has lived up to its name over the last five years when it comes to dividend payments. Despite swinging into unprofitability for a short time during 2020, the company has navigated the financial waters to deliver a steadily growing annual dividend, as illustrated below.
Similarly, this ASX 200 share has provided investors with considerable capital appreciation over the years. Today, the Steadfast share price is 80.4% higher than where it was five years ago. For comparison, the benchmark index is only up ~24%.
Steadfast currently offers a dividend yield of 2.51%. This might seem low, but when accounting for the rate of growth in dividends, this company earns its spot as a bona fide dividend beast.
Cleanaway Waste Management Ltd (ASX: CWY)
This ASX 200 share is one of the dirtier companies on our list, but its dividend track record is anything but rubbish. Playing an integral role in waste management solutions, including recycling facilities, treatment plants, and refineries, Cleanaway has built an admirable business over the years.
While the rate of growth in dividends per share has slowed in the past couple of years, Cleanaway has still managed to consistently increase its payout to shareholders. Notably, earnings in the first half were suppressed by acquisition costs. However, the integration of Sydney Resource Network demonstrates the company's continued reinvestment for sustaining further potential dividend growth.
Once again, this is a company with a relatively low yield at 1.7%. However, a five-year dividend compound annual growth rate of 20% is impeccable.
Pro Medicus Limited (ASX: PME)
Lastly, this ASX 200 share comes with the smallest dividend yield. However, what it lacks in size it makes up for in growth. At a compound annual growth rate (CAGR) of 43% over five years, Pro Medicus is growing its dividends at a blistering pace (see chart below).
A company growing at a high clip rate while also offering a dividend is typically a peculiar sight. The reason behind this medical imaging company's unique combination of income and growth is its stellar profit margins. For the 12 months ending December 2021, Pro Medicus derived $37.98 million in earnings on a 47% margin.
For some, a yield of 0.4% may not cut it to be considered a 'dividend beast'. But, at the rate those dividends are growing, this is arguably a future dividend beast in the making.
