The ASX dividend income beasts in this article are leading contenders for passive income as well as achieving capital growth through their business plans, in my opinion.
A dividend is paid from a company's profit, so if it's able to grow that profit over time, then this could unlock higher shareholder payments as well as a rising share price if the market appreciates the growing profit profile.
Here's why I think these two ASX shares are worth watching for appealing dividend payments and growth.
Wesfarmers Ltd (ASX: WES)
Wesfarmers owns many well-known brands in Australia, including Bunnings, Kmart and Officeworks. The company is doing a solid job of growing earnings over the longer term, with Bunnings the key profit generator.
One of Wesfarmers' goals is to increase its shareholder payment over time. To achieve that, the dividend income beast may be able to generate good growth over the long term with its expansion into lithium and healthcare.
In March 2022, the company acquired Australian Pharmaceutical Industries (API), which saw it take control of brands like Priceline and Clear Skincare Clinics. It's currently offering to buy the ASX business SILK Laser Australia Limited (ASX: SLA).
Wesfarmers is attracted to healthcare because it "provides access to structural growth", with opportunities for bolt-on acquisitions. This division includes 'well-being' and 'beauty' as well. Ageing demographics could be a useful tailwind for this segment's earnings.
The company is also working on the Mt Holland Lithium Project in Western Australia. Wesfarmers sees strong growth ahead for lithium thanks to increasing demand for electric vehicles and other types of batteries.
Indeed, one fund manager has suggested that Mt Holland could generate more than $1 billion of earnings for Wesfarmers each year when operational.
According to Commsec, Wesfarmers could pay an annual dividend per share of $2.08 by FY25. This would be a grossed-up dividend yield of 5.75%, which would be a solid payout from the ASX dividend income beast.
Brickworks Limited (ASX: BKW)
When it comes to dividend history, Brickworks is impressive, in my opinion. It has maintained or grown its dividend every year since 1976. In other words, it's been 47 years since the company last decreased its dividend payments to shareholders. And Brickworks has grown its dividend each year over the past decade.
I think the shares it owns in Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) have been key for enabling resilient dividends and growth over the past few decades. However, Brickworks' industrial property trust could have an increasingly important role over the next five to ten years.
This is where excess Brickworks land is sold into an industrial property trust that owns industrial estates across Sydney and Brisbane with high-quality tenants. Brickworks owns half of the trust, with Goodman Group (ASX: GMG) owning the other half.
The property trust made up to $2 billion of net asset value (NAV) for Brickworks at 31 January 2023.
Further industrial estates may be built in the future thanks to the identification of key development sites, including in Horsley Park in NSW, in Craigieburn in Victoria and in Pennsylvania in the United States.
Over the next five years, Brickworks expects the leased asset value of the property trust could increase by around 33%. The rental income could grow by at least 54% as property developments are finished and organic rental growth flows through.
Those future potential land sales from Brickworks into the property trust could mean that even more capital value and rental income are achieved through the trust.
By FY25, the ASX dividend income beast could be paying an annual dividend per share of 69 cents, according to Commsec, which would be a grossed-up dividend yield of 4%.
