APA Group (ASX: APA) is one of the most impressive ASX dividend stocks in Australia, in my view.
There are very few businesses in Australia like APA. It owns a portfolio of energy assets that are worth tens of billions of dollars, which are key for Australia's economy.
It transports approximately half of Australia's gas usage with a huge gas pipeline network that spans a lot of the country. It takes gas from sources of supply to where the demand is.
APA also owns a number of other assets including gas-powered energy generation, gas processing, gas storage, solar farms, wind farms, batteries and electricity transmission.
That diversified portfolio has helped APA deliver reliable and comforting payouts. Let's take a look at what makes it so appealing.
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Incredibly reliable payout
Only one other ASX dividend stock has a better payout record than APA Group when it comes to consecutive years of growing payments to shareholders.
When APA announced its FY26 result, the annual dividend represented the 22nd consecutive year of distribution increases. That's more than two decades of non-stop growth!
Dividends are not guaranteed of course, but the sector that the business operates in means that it has defensive earnings.
It has managed to grow its payout through the GFC, COVID-19 and the last few years of inflation. Not only is the consistency of the payout appealing but the payment also comes at a good dividend yield.
Good dividend yield
A big dividend yield isn't everything, but it certainly helps with the level of cash flow that's paid out by the business.
There's no 'right' dividend yield investors should necessarily target, but I think APA's yield strikes the right balance between generosity and maintaining enough cash to invest in the business over time.
The business expects to slightly increase its annual payout per security in FY27 to 59 cents. That translates into a forward distribution yield of 5.4%. That's a very competitive starting yield compared to what's on offer from term deposits.
Growing earnings
This ASX dividend stock is not a fast-growing technology business, but it is seeing long-term earnings growth over time.
In FY26, it reported underlying operating profit (EBITDA) growth of 8.3% to $2.18 billion and free cash flow growth of 3.2% to $1.1 billion.
There are two main ways the business grows its financials. Firstly, it's steadily expanding its portfolio of energy assets with gas pipelines, energy generation and electricity-related investments through both construction and acquisitions.
For example, on 20 August 2026, it announced it will construct, own and operate the 72MW Sybella Creek Solar Farm and 52MW 104MWh battery in Mount Isa, Queensland.
The other way APA's financials are growing is that a vast majority of the revenue is inflation-linked. This can help provide a steady drumbeat of progress in revenue, underlying EBITDA, and cash flow.
What a $1,000 investment in the ASX dividend stock could do
With $1,000 an investor could buy 91 APA shares at the time of writing. That could mean generating $53.69 of passive income in the 2027 financial year from the ASX dividend stock, which is a solid starting point and I believe could lead to further growth in the coming years.
Given that APA shares have risen more than 20% in the past year (at the time of writing), this may not be the best value stock on the market today for investors seeking to beat the market. Therefore, other opportunities could be even more compelling.
