Only a small group of ASX shares have the accolade of increasing their dividend every year for the past decade. This is because it can be challenging to grow the payout annually, as profit can dramatically change from year to year due to trading conditions or shifts in commodity prices.
Businesses operating in resilient industries are the ones that grow profit quite consistently. That's important because it's profit generation that funds dividend payments. The below ASX shares are among the leading stocks for regular dividend growth, though dividend hikes are not guaranteed.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
Soul Pattinson has the best record on the ASX when it comes to consecutive dividend increases. Its annual ordinary dividend has grown every year since 2000. The business has paid a dividend every year since 2000.
It has achieved this by owning a portfolio of assets that generate defensive or uncorrelated cash flows, such as telecommunications, resources, swimming schools, property and electrification.
TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), New Hope Corporation Ltd (ASX: NHC), Macquarie Group Ltd (ASX: MQG), Wesfarmers Ltd (ASX: WES) and BHP Group Ltd (ASX: BHP) are some of Soul Patts' biggest ASX holdings.
The ASX share currently offers a grossed-up dividend yield of just over 4%.
APA Group (ASX: APA)
APA owns a large portfolio of gas pipelines around the country, transporting half of the country's gas usage. It also owns gas storage, gas processing, gas-powered energy generation, electricity transmission assets, and renewable energy generation (solar and wind) assets.
The business has grown its payout yearly since 2004, so it has had two consecutive decades of growth.
APA's cash flow pays for the distribution, which has steadily increased as the business completes more energy projects. A large majority (over 90%) of its revenue is linked to inflation and has seen elevated growth in the last couple of years.
The Australian federal government has confirmed that gas will continue to contribute to Australia's energy mix for decades to come.
APA has guided it expects to pay a distribution per security of 56 cents in FY24, which is a forward distribution yield of 6.5%.
Sonic Healthcare Ltd (ASX: SHL)
Sonic is one of the world's leading pathology businesses, with a presence in several countries including Australia, the US, Germany and the UK.
It has increased its dividend every year since 2013 and it has grown its dividend almost every year in the last three decades, with only a few years during that period when the dividend was maintained.
The ASX share has a stated "progressive dividend policy", where the board aims to increase the payout for shareholders. The last two dividends amount to a dividend yield of 4.3%, excluding franking credits.
Inflation may be hurting Sonic's short-term profitability, but the company is hopeful for the future, with its investments in artificial intelligence (AI) a key focus.
