The ASX dividend share space gives investors interested in passive income various avenues to find investments that tick the boxes.
For me, a big dividend yield is not one of the first things that I look for. Instead, I want to see that the business is regularly increasing its payout. That's a good sign that the business is headed in the right direction and growing its underlying earnings/value.
Plus, having your investment income regularly grow is a good defence against inflation. So, I'm going to mention three businesses that have regularly increased their payouts, though none of them has increased their payouts for as many years in a row as Washington H. Soul Pattinson and Co. Ltd (ASX: SOL).
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Wesfarmers Ltd (ASX: WES)
Wesfarmers is one of the leading retail businesses in Australia, with a number of brands under its wings including Bunnings, Kmart, Officeworks and Priceline. It also has a compelling chemicals, energy and fertiliser business called WesCEF.
The ASX dividend share has increased its dividend each year since the onset of COVID-19, following the divestment of the Coles Group Ltd (ASX: COL) business several years ago. It grew its payout in FY21 and hasn't stopped hiking the dividend.
Wesfarmers has benefited from the expansion of both the store network and product ranges at Kmart and Bunnings, which has helped improve its profitability and increase the return on capital (ROC).
According to CMC Invest, it's expected to grow its annual payout to $2.206 per share in FY26, translating into a grossed-up dividend yield of 4.3%, including franking credits, at the time of writing.
Universal Store Holdings Ltd (ASX: UNI)
Universal Store is the owner of a number of premium youth apparel businesses, including Universal Store and Perfect Stranger.
Its success has been driven by solid like-for-like growth at its existing store network and regular expansion of its store network. Perfect Stranger is delivering excellent total sales growth, I'm expecting it to drive the company's overall success in the coming years.
The ASX dividend share has increased its annual dividend per share each year since it first started paying a dividend in FY21.
The projection on CMC Invest suggests the business could pay an annual dividend per share of 42.5 cents in FY26. That translates into a grossed-up dividend yield of 8.1%, including franking credits, at the time of writing.
APA Group (ASX: APA)
APA has one of the longest records when it comes to passive income growth.
This ASX dividend share owns various energy infrastructure, including a huge gas pipeline network, gas-powered energy generation and other gas infrastructure, renewable energy generation and electricity transmission assets.
With most of its revenue linked to inflation and steady expansion of its asset portfolio, the business has been able to generate more cash flow and fund higher distributions.
The business is expecting to increase its annual payout to 58 cents per security in FY26, which translates into a distribution yield of 5.8%.
