I think every Aussie investor should look at APA Group (ASX: APA) shares as an ASX dividend stalwart. The business could claim to be one of the best businesses for passive income because of a couple of key factors, which I'll get to below.
APA is a fairly unique business on the ASX in that it has a huge portfolio of energy assets.
It owns billions of dollars worth of gas pipelines across Australia, connecting sources of supply to where it's needed. Impressively, the business transports half of the country's usage.
Other elements of its asset base include gas storage, gas processing, gas-powered energy generation, solar farms, wind farms, and electricity transmission.
With that in mind, let's take a look at why the ASX dividend stalwart is a strong pick.
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Large dividend yield
Investors wanting dividend income from their investments will want to know what dividend yield a business could provide.
If I can get a safe 4.5% return from the bank, I'd want to get a stronger income return from an ASX dividend share (or a decent yield with good growth expected).
APA is one of those businesses that can provide investors with a strong level of dividend income because it pays a high percentage of its cash flow to investors each year.
The business has guided that it expects to pay an annual distribution per security of 58 cents in FY26.
At the time of writing, that translates into a potential distribution yield of 6.4%. That's not the biggest yield on the ASX, but it also comes with a history of long-term payout security and growth.
The ASX dividend stalwart has long-term payout growth
I think one of the most pleasing things to see in an ASX dividend share is a history of growing the payout.
While past growth is not a guarantee of future increases, it shows an intention of the business to reward investors with bigger payouts if it can.
APA has increased its payout every year for the last 20 years, which is one of the best records on the ASX for consecutive annual growth. It's expecting to increase its payout in FY26 to 58 cents per security, up from 57 cents per security in FY25.
I believe the business can continue its payout growth thanks to two main factors.
First, a large majority of its revenue is linked to inflation, which gives it a decent level of organic growth over time.
Second, the business regularly invests in new energy assets, whether that's building a new project or making bolt-on acquisitions.
Over time, I think this ASX dividend stalwart's portfolio will continue to expand and help it grow earnings further.
