ASX dividend shares can provide a good amount of income. But if I were relying on investment income to fund my lifestyle I’d want strong reliability.
I normally write about shares like Brickworks Limited (ASX: BKW) and WAM Microcap Limited (ASX: WMI) for good yield options.
But, I think recent share price movements have opened up some attractive options:
Sonic Healthcare Ltd (ASX: SHL)
Sonic Healthcare is a business that operates in a defensive sector, providing earnings stability.
Stable earnings are an important factor for consistent dividends.
No-one chooses when they get sick or need pathology services. People/governments will pay what’s necessary for people to stay alive and healthy. Sonic’s pathology services are an important part of that goal.
Sonic has grown its dividend in consecutive years for around the last decade. That’s a strong record for the ASX.
After a huge couple of years of COVID testing earnings, the business is using that cash to make acquisitions and also do a share buy-back of up to $500 million.
In the FY22 half-year result, the ASX dividend share decided to grow the interim dividend by 11% to $0.40.
Excluding franking credits, the Sonic Healthcare dividend yield is now 2.6%.
APA Group (ASX: APA)
APA is another ASX dividend share with a strong income record having grown its distribution every year for the last decade and a half.
It has a huge gas pipeline around Australia, delivering half of the country’s natural gas. This delivers reliable cash flow each year for the business. Interestingly, there is the potential to shift these pipelines to carrying hydrogen, which would be great for the longevity of APA’s assets.
But it also has a growing list of renewable energy assets which are helping it with the energy transition.
The business is also increasingly interested in investing in electricity transmission assets, which will require billions of dollars of investment over the coming years.
At the moment it’s interested in buying Basslink, the power cable which sends renewable energy generated by Tasmania to mainland Australia.
APA is expecting to pay an annual distribution of $0.53 per share in FY22. That would be a dividend yield of 5.2% from the ASX dividend share.
