In my opinion, ASX dividend shares are one of the best things about the Australian stock market. Many Aussies may wish they had more cash flow to pay for bills or other expenditures, so I'm going to talk about two high-yield options that provide resilient and growing payments to shareholders.
When we pay a bill, that money goes to a company that's providing the utility, whether that's energy, telecommunications or something else. We can own a piece of those businesses and benefit ourselves from the profit they're making. Those utility companies can provide defensive earnings to investors and provide resilient payments because households and businesses put an important value on the bills they're paying.
Telstra Group Ltd (ASX: TLS)
Telstra is the largest utility company in Australia as the biggest ASX telco share, providing mobile and home broadband connections.
Most households and businesses seem to view their internet connection as a very important service. I think this ASX dividend share has very defensive mobile earnings. The profit in that segment continues to grow thanks to a rising number of users and increasing prices for customers.
Pleasingly, Telstra has grown its annual dividend payment in each financial year of FY22, FY23, and FY24. In FY24, the company decided to pay an annual dividend per share of 18 cents, an increase of approximately 6%. The 2024 financial year payment translates into a grossed-up dividend yield of 6.4%, including franking credits.
If someone invested $15,000 into Telstra shares, that would unlock close to $960 of annual income, which may pay a significant portion of the annual phone bill.
UBS projects the Telstra annual dividend per share to grow by 5.5% in FY25. Between FY24 and FY29, it could grow by 50% to 27 cents per share.
APA Group (ASX: APA)
APA owns a portfolio of energy assets, but it's best known for the huge national gas pipeline network it owns, which transports half of the country's gas usage.
Gas continues to be an integral part of Australia's energy mix, providing baseload power. Labor has already acknowledged that it sees gas playing an important role in Australia's energy for decades to come, which I think is promising for the ASX dividend share.
The Minister for Resources, Madeleine King, said:
The analytical findings are clear. Under all credible net zero scenarios, natural gas is needed through to 2050 and beyond, though its production and use will change over this period. Gas will be essential to the transition because our energy system needs gas to achieve net zero. Gas will be a transition fuel that firms renewable power generation and is required for manufacturing and minerals processing until such time as alternatives are viable. Gas can support our future made in Australia. However, the greenhouse gas emissions associated with gas must sharply decline and where gas use cannot be reduced, emissions must be increasingly abated and offset.
APA plays an important part in getting gas from sources of supply to where it's in demand.
Pleasingly, the ASX dividend share has grown its distribution every year for 20 years in a row, so it has provided very resilient income for a long time. However, that's not guaranteed to continue forever.
But, the business is expecting to grow its annual distribution per security by 1.8% to 57 cents. That would translate into a distribution yield of 7.8%. With a $15,000 investment, that could translate into distribution income for FY25 of $1,170.
