Most ASX dividend investors prioritise dependability and reliability above all else. After all, what's the use of a 5% or 6% yield on an ASX dividend stock if the dividend gets reduced or cut entirely down the road?
There are many dependable dividend stocks on the ASX. That's a label I would be happy to give to Commonwealth Bank of Australia (ASX: CBA), Telstra Group Ltd (ASX: TLS), or Wesfarmers Ltd (ASX: WES), amongst others.
However, I think there are a few ASX dividend stocks that are able to stand above the throng. For me, Washington H. Soul Pattinson and Co Ltd (ASX: SOL) is at the top of the pile.
Washington H. Soul Pattinson, or Soul Patts for short, is an investing house that has been around for more than a century. Over its long history, it has amassed a well-deserved reputation as a prudent manager of capital and one of the ASX's most reliable income providers.
Soul Patts owns and manages a wide underlying portfolio of investments. These investments are diversified, ranging from large stakes in individual shares to property, venture capital, private credit, and more.
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Stunning income growth from this ASX dividend stock
This approach has historically worked wonders for Soul Patts and its investors, with the company delivering market-beating returns over very long periods of time. To illustrate, the company delivered a total return (growth plus dividends) of 11% per annum over the 15 years to 31 January. Over 25 years, that stretched to 12.9% per annum. That compares to the broader market's returns of 8.6% and 8.4% per annum, respectively.
But let's talk dividends. Dividend returns have always played a large role in this ASX dividend stock's performance. Soul Patts has the best dividend streak on the ASX, bar none. It has increased its annual dividends every single year since 1998, and counting.
Between FY 2021 and FY 2026, those dividends have compounded at an average annual growth rate of 11.9%. Yes, the company is yielding a seemingly unimpressive 2.54% at recent pricing. However, if Soul Patts can keep up that kind of dividend growth, it won't be long before long-term investors are enjoying a yield-on-cost far larger than 2.54%.
At the time of writing, Soul Patts shares are going for $42.14 each. At this price, $10,000 will buy 237 shares of this ASX dividend stock. There aren't too many better things one can do with their cash, in my view.
