The ASX share market has a reputation for having stocks that pay a good dividend yield. However, there aren't many ASX dividend shares that have a reputation for increasing their dividends every year for multiple decades in a row.
In the United States share markets, some businesses have increased their payout every year for at least 50 years in a row. Examples include Procter & Gamble, Coca-Cola, Johnson & Johnson, Colgate-Palmolive and Target.
The ASX doesn't have the same impressive dividend growth streaks, but two companies have increased their payout for at least 20 years in a row.
I'll start with the ASX dividend share with the smaller passive income growth streak.
APA Group (ASX: APA)
APA is an ASX energy infrastructure share. Its main asset group is a national gas pipeline that transports half of the country's usage. It also owns various gas-related infrastructure assets, renewable energy generation and electricity transmission assets.
This company pays for its growing distribution from its increasing cash flow. It has grown its distribution every year since 2004, which I think is a great record.
The vast majority of APA's revenue is linked to inflation, so while its debt costs more, its revenue has been climbing to offset some of the financial pain. Another tailwind for earnings is the business's regular addition to its portfolio of assets, whether that's constructing a new pipeline or making another acquisition.
APA expects to grow its distribution per security by 1.8% in FY25 to 57 cents, which translates into a forward distribution yield of 7.9%.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
This ASX dividend share, also known as Soul Patts, has the record for the longest dividend growth in Australia. It has increased its annual ordinary dividend every year since 2000.
It's close to becoming an ASX dividend aristocrat – a business that has grown its dividend year for at least 25 years in a row.
How has it achieved that steady growth? Soul Patts operates as an investment conglomerate, meaning it holds investments in a variety of different businesses and other assets.
Its portfolio is designed to be defensive or uncorrelated and generate pleasing cash flow that can help pay for the dividend. It's invested in sectors like telecommunications, resources, property, swimming schools, agriculture, electrification, financial services and bonds/credit.
Each year, Soul Patts receives cash flow from its portfolio through dividends, distributions and income, then sends a majority of the net cash flow to shareholders after paying for its own expenses.
In FY24, the ASX dividend share grew its annual dividend by 9.2% to 95 cents per share. At the current Soul Patts share price, it has a trailing grossed-up (including franking credits) dividend yield of 3.9%.
