I think there are some really good ASX 200 (ASX: XJO) dividend shares that are contenders as consistent income ideas.
In the current COVID world, there are plenty of impacts that investors didn’t expect. But that doesn’t help if you just want to live off the dividends from your investments.
That’s why I think these two ASX 200 dividend shares are good options:
Rural Funds Group (ASX: RFF)
Rural Funds is one of the best real estate investment trusts (REITs) in my opinion. The REIT structure allows investors to invest in commercial property, it’s essentially a share, except they’re called units instead.
Farming properties are what Rural Funds owns. In-fact, it owns a variety of farms: almonds, macadamias, vineyards, cattle and cropping (sugar and cotton).
I think the tenants are really high quality and likely won’t fail in a recession (and keep paying rent), like we saw during COVID-19 lockdowns in 2020. Some tenants include Treasury Wine Estates Ltd (ASX: TWE), Select Harvests Limited (ASX: SHV), Olam and JBS.
There are two really good reasons to like this ASX 200 dividend share for income.
The first is that it aims to grow the annual distribution (dividend) by 4% per annum. That’s not big, but it’s very consistent and it beats inflation. It achieves that with a mix of rental indexation and profit re-investment at its properties.
The other reason is the actual yield. After the latest distribution forecast of 11.73 cents per unit in FY22, that suggests a forward distribution yield of 4.9%.
That starting yield combined with consistent growth is an attractive combination in my eyes.
APA Group (ASX: APA)
APA is another ASX 200 dividend share that has a really strong track record of paying distributions to investors.
It has been paying a growing distribution for more than 15 years. That’s the second longest consecutive growth streak on the ASX, behind Washington H Soul Pattinson and Co Ltd (ASX: SOL).
APA is a business that owns a large gas pipeline network across the country. It actually transports around of half of Australia’s natural gas usage. That amount and type of demand means that APA enjoys strong and consistent demand each year, leading to regular cashflows for it to fund that growing distribution.
The more assets that APA invests in and owns, the more cashflow it makes. It has been expanding into renewable energy assets in recent years.
One long-term bonus to APA is that its pipelines can supposedly be used to transport hydrogen in the future in a greener world. It’s not just a natural gas play.
After a distribution increase in the FY21 half year result, the annualised payout grew to 51 cents per unit. It offers a distribution yield of 5.1%.
There are also some other really good ASX dividend shares out there that are growing their dividends faster than the above two ideas.