APA Group (ASX: APA), which is an energy infrastructure business, just grew its dividend again.
If you don’t know what APA is, it owns and/or operates around $22 billion of energy infrastructure assets. Its gas transmission pipelines are in every state and territory on mainland Australia, delivering about half of the nation’s gas usage.
What happened?
APA announced today an estimated FY21 half-year distribution of 24 cents per share for the six months ending 31 December 2020.
This increase represented a 4.3% increase over the FY20 interim distribution of 23 cents per unit.
This adds to APA’s distribution growth record which is getting close to two decades of consecutive increases.
APA said that all of the distributions will be fully covered by operating cash flows.
What to make of this
A 4.3% increase is not exactly the most impressive dividend increase ever – JB Hi-Fi Limited‘s (ASX: JBH) recent 76% increase to the final dividend comes to mind as a really big one – but APA’s increase is still materially better than inflation.
Using the last two distributions announced, APA has a distribution yield of 4.9%. I think that’s a solid starting yield for a defensive idea in the medium term. However, for the ultra long term, I’m not sure how important gas will be in 15 or 20 years compared to today.
Other ASX dividend shares that I like the look of a business like Brickworks Limited (ASX: BKW) which also has a very reliable record.
