If I were a retiree, I would want to own investments that can provide both resilience and a reliable dividend. As a bonus, I'd like to see a steadily-rising payout. I think the ASX dividend share APA Group (ASX: APA) ticks a lot of boxes.
APA is an impressive business with a huge portfolio of energy infrastructure. It has 15,000km of gas pipelines that it owns, operates and maintains.
The business also has investments in electricity transmission assets, connecting Victoria with South Australia, Tasmania with Victoria and New South Wales with Queensland.
Additionally, APA owns power generation assets, including gas-powered, wind and solar assets across Australia, as well as gas storage and gas processing facilities.
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Why APA shares are resilient
APA plays an important role in moving gas around the country, which is seen as a key source of energy for the coming decades with coal usage expected to reduce in the coming years with planned closures of Australia's big coal power stations.
The Australian (Labor) government itself has indicated that it sees gas being an important source of baseload power to 2050 (and beyond). As part of its gas strategy, the government said:
The role of gas will change as we reach net zero in Australia by 2050. Even in net zero scenarios, Australia and the world will need gas at lower levels through to 2050 and beyond. Australian gas will play an important role in an orderly global and domestic energy transformation.
APA says that it transports half of the country's gas usage, making it an integral player for Australia's energy sector. Households and businesses will continue to need energy (including gas), whether the economy is weak or booming.
A large majority of APA's revenue is linked to inflation, giving the business steady and growing revenue. This is a useful inflation protection for retirees, in my view.
It is enhancing its ability to generate larger profits by regularly expanding its portfolio of assets. The latest announcement by the business is to develop and own the proposed Brigalow Peaking Power Plant in Queensland, which is expected to be operational in 2028. APA will own 80% of the project.
A consistently growing dividend
APA has grown its distribution for 20 years in a row, which is an incredibly long record of increases compared to many other ASX shares. It has the second-best record for consecutive annual increases on the ASX.
APA shares are a retiree's dream because of how reliable it has been with its payouts – it grew through the GFC, COVID-19 and the supercharged inflation periods. Payout growth can't be expected forever, but I think it's likely to continue its hikes for the foreseeable future.
It's expecting to increase its annual payout to 58 cents per security in FY26, which translates into a forward distribution yield of 6.3%. That's a solid starting yield for retirees, in my view.
