Why I keep loading up on these 2 ASX passive income machines

I can't stop buying these dividend stocks.

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I regularly invest in ASX dividend shares for my portfolio because they offer the potential for appealing passive income and capital growth.

Businesses that are growing earnings or increasing their underlying value can raise their payouts for shareholders.

Here are two S&P/ASX 300 Index (ASX: XKO) shares that have built an impressive history of paying reliable dividends while investing in long-term growth within their businesses.

Rural Funds Group (ASX: RFF)

This real estate investment trust (REIT) owns various types of farmland, including almonds, macadamias, cattle, vineyards and cropping.

Since starting to pay a distribution in 2014, the business has grown or maintained its distribution each year. In the longer term, it aims to grow its distribution by 4% per annum.

Rural Funds invests in its farms to make them more productive and valuable to tenants. One key project currently is transforming some cropping farms into macadamia farms, which are expected to generate more rent as capital is deployed.

Rural Funds is benefiting from some lease contracts with rental growth linked to inflation, which has been elevated in the last couple of years. A significant portion of its remaining rent has fixed annual rental increases.

The passive income machine pays its distribution quarterly — currently an annualised amount of 5.8%. The Rural Funds share price is trading at a 34% discount to its stated adjusted net asset value (NAV) at 31 December 2023.

Brickworks Limited (ASX: BKW)

I have invested in Brickworks shares multiple times over the past year, including recently, due to the compelling assets it owns.

Brickworks is the largest brickmaker in Australia. It also manufactures stone and masonry, roofing, cement, timber battens, and other products.

The ASX dividend share has a 50% stake in a large and growing industrial property trust that is steadily building and completing massive logistics warehouses on excess land Brickworks owned solely before it was sold to the trust.

There is a large demand for industrial properties as companies look to onshore more of their supply networks. The growth of e-commerce is also a good tailwind for warehouse demand, which is driving the rental and capital value of these properties.

Brickworks also owns around a quarter of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL). Soul Patts is an investment house that owns a diversified portfolio of defensive assets, which is growing its dividend and the underlying portfolio value over the long term.

The Soul Patts investment provides stability to Brickworks' earnings during a downturn in Australian demand for building products.

The rental distributions from Brickworks' property investment and the dividends from Soul Patts are enough to fund the Brickworks dividend.

Brickworks has grown its passive income payment yearly since 2014 and hasn't cut its dividend for almost 50 years. The ASX dividend share currently has a grossed-up dividend yield of 3.5%.

Motley Fool contributor Tristan Harrison has positions in Brickworks, Rural Funds Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks, Rural Funds Group, 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 Scott Phillips.

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