The ASX stock APA Group (ASX: APA) continues to deliver a very pleasing level of passive income, particularly for investors targeting resilient payouts each year.
APA has one of the best records when it comes to regular payout growth, as well as its impressive asset base.
The business owns a number of important energy assets, including gas pipelines, electricity transmission, gas power stations, gas processing, gas storage, solar farms and wind farms.
Thanks to the essential nature of its portfolio, the business has been able to deliver investors a pleasing level of passive income.
Image source: Getty Images
Great passive income track record
APA has increased its distribution every year since 2004, which is the second-longest streak on the ASX for consistent growth of dividend payouts.
The business has kept up this payout growth whilst regularly investing in more assets for its portfolio. For example, in recent times it has announced more gas pipelines, as well as a gas peaking power plant in Queensland.
Each asset it builds/acquires, meaning it adds to APA's ability to generate more cash flow. APA pays for its distribution from the cash flow it makes, so a growing portfolio is good news for investors wanting larger payouts.
Another positive for income-seeking investors is the fact that most of APA's revenue is linked to inflation, so it's benefiting from regular growth and can help offset the negatives of higher inflation for investors.
APA does not pay a distribution every month, though it does pay every six months. I think it would be better to think of the goal as an annual target and then divide the amount into 12 equal amounts.
$200 per month translates into an annual goal of $2,400 per year. I'm expecting the business to increase its annual payout to at least 59 cents per security in FY27.
To receive $2,400 per year based on the potential FY27 payout, an investor would need to buy 4,068 APA shares.
In my view, the business has a promising future and can continue expanding its energy portfolio for the foreseeable future as Australia looks to other energy sources to replace coal over the next decade.
