The APA Group (ASX: APA) share price has risen by more than 50% since February 2025, making it one of the stronger performers of the S&P/ASX 200 Index (ASX: XJO). Despite that, the business still offers an attractive dividend yield.
APA describes itself as Australia's energy infrastructure partner, with a diverse portfolio of gas, renewables, and electricity transmission.
The business says it owns or operates a diverse $20 billion portfolio of energy assets and transports about half of the nation's gas usage. It's best known for its huge gas pipeline network, though it also owns gas power stations, gas storage, gas processing, electricity transmission, solar farms and wind farms.
There are four elements that I think could make income investors very interested in this business.
Image source: Getty Images
Dividend yield
Firstly, let's look at the potential dividend yield at the current APA share price.
APA's FY26 payout was 58 cents per security, 1.75% more than the payout in FY25.
The FY26 payout translates into a current distribution yield of 5.75% at the time of writing. I'd say that's extremely competitive with the best term deposit rates right now.
Payout record
Not only does it offer a solid dividend yield, but APA also has an excellent track record of distribution growth.
It has increased the payout every year for the last two decades, which makes this the second best payout income growth streak on the ASX.
I think reliability is just as important as the size of the dividend yield for income investors. It's not ideal for dividend payments to disappear if we're relying on them.
Expanding portfolio of energy assets
APA pays its distribution from the cash flow its portfolio of energy assets generates. Over the years, its list of assets has expanded through organic construction and acquisitions. This has helped boost the cash flow over time.
APA is currently working on several assets, including gas pipeline expansions and a new gas peaking plant in Queensland.
In February, the business noted that it has a $3 billion organic growth pipeline, giving APA, in my view, long-term growth potential on top of its inflation-linked revenue growth.
Inflation protection
The business has built-in inflation protection thanks to how its revenue contracts are structured.
APA says that around 90% of its revenue is highly defensive, predictable, and inflation-linked. While that's not a rapid pace of organic growth, it provides steady growth, helps offset interest rate rises, and can fund steady distribution growth.
Is the APA share price a buy?
For income-focused investors, I think APA is a solid buy for long-term income. Energy is an important part of the Australian economy, which gives me confidence in its long-term future.
But this isn't the only ASX share I'd be willing to own for income with good dividend yields.
