The ASX share market is a great place to find ASX dividend shares that can pay strong long-term passive income, in my opinion.
I love receiving dividends because we don't have to do anything once we own the shares. Those businesses can send money to our bank accounts every six months (or every three months). We don't have to worry about tenants, fixing a toilet, or searching for the best term deposit rate.
I'm building a portfolio that is focused on businesses that can grow their profit over time, which can lead to growing dividends and, hopefully, share price growth as well.
These are two of the biggest positions in my ASX dividend share portfolio.
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Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
Soul Pattinson is an investment conglomerate that has been operating for 120 years. It's invested in a wide range of industries including telecommunications, resources, building materials, property, farmland, financial services, swimming pools, luxury retirement living, and more.
The business receives divided, distribution, and interest income from its defensive, cash flow-focused investment portfolio. It pays for its expenses, pays a majority of the net cash flow to investors as growing passive dividend income, and then re-invests the rest in more opportunities.
It has grown its dividend every year since 2000, which is the longest-running dividend growth streak on the ASX. Of course, it's not guaranteed to grow the dividend, but it's a core aim for the business.
I like that the company is improving its diversification. It has recently invested in more farmland.
As long as the business continues to invest with the future in mind, I think it will be capable of good long-term returns.
The ASX dividend share's dividend growth has accelerated over the past year, with the FY23 interim dividend being boosted by 24% to 36 cents per share.
Brickworks Limited (ASX: BKW)
Brickworks is best known as a building products business. It is the biggest brickmaker in Australia and the northeast of the US. The company also has exposure to roofing, paving, masonry, and other building materials in Australia.
To me, one of the most interesting things about the business is that it owns a large chunk of Soul Pattinson shares. Brickworks owns 26.1% of Soul Pattinson. This can provide Brickworks with a growing stream of passive dividend income and, hopefully, capital growth as well.
Brickworks also owns half of a compelling industrial property trust which owns prime logistics and industrial properties across Sydney and Brisbane, tenanted by third-party customers. The industrial trust owns development land which provides "significant further growth." Brickworks' net asset value of its property trust holdings is worth more than $2.2 billion, according to Brickworks. The properties are paying Brickworks growing rental income.
On top of that, Brickworks also has significant additional land that can be developed, including at Horsley Park in New South Wales and Craigieburn in Victoria.
The ASX dividend share hasn't cut its dividend for 47 years, which is a very impressive long-term dividend record in my opinion. In the FY23 half-year result, Brickworks grew its interim dividend by 5%.
