Insights

2 ASX dividend shares offering solid income and growing yields

Rural Funds is one ASX dividend share offering growing income for investors.
The post 2 ASX dividend shares offering solid income and growing yields appeared first on The Motley Fool Australia. –

A certain group of ASX dividend shares have built a reputation for providing defensive income and growing yields for investors.

Just because a business pays a dividend doesn’t automatically mean that the payment will be consistent and reliable every single year.

For example, there were quite a few dividend cuts in the COVID-affected 2020 calendar year, including from Commonwealth Bank of Australia (ASX: CBA) and Sydney Airport (ASX: SYD).

But these two ASX dividend shares have been providing steady and growing income for a number of years:

Rural Funds Group (ASX: RFF)

Rural Funds is a leading real estate investment trust (REIT) that owns a portfolio of high-quality farming assets across Australia in different states and climactic conditions.

Its portfolio is spread across a number of different farming industries including almonds, vineyards, macadamias, cropping (sugar and cotton) and cattle.

Rural Funds has a goal of increasing its distribution by 4% every year for investors. It has been successful with this target every year since it listed.

The business funds its distribution growth organically in two different ways. First, it has income increases built into its contracts across the portfolio. Some of that indexation is a fixed 2.5% annual increase, whilst other contracts are linked to CPI inflation, with some of them having periodic reviews.

This ASX dividend share’s other organic way to boost its rental profit is its ability to invest in its farms with productivity improvements in things like water access points.

Rural Funds can also grow its rental profit and portfolio by making occasional acquisitions that can be improved, or put to a higher and better use.

In FY22, Rural Funds has guided another 4% increase of the distribution per unit, with a total payment of 11.73 cents per unit. That translates to a distribution yield of 4%.

Brickworks Limited (ASX: BKW)

Brickworks is a leading business in the building products industry. But it’s actually other assets that continue to help maintain and grow the Brickworks dividend.

This business may have a claim to being one of the ASX dividend shares with the longest claim of reliability. Brickworks has grown or maintained its dividend every year for over 40 years.

The biggest contributor to the dividend over that time has been its shareholding of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shares, where it is a substantial shareholder.

Soul Patts has a diversified portfolio of assets across a variety of industries including telecommunications, resources, property and agriculture. Some of its biggest investments are TPG Telecom Ltd (ASX: TPG), New Hope Corporation Limited (ASX: NHC) and Brickworks itself.

Brickworks says that Soul Patts provides growing dividends and consistent earnings for the company.

The other area of Brickworks that is helping grow the capital value and dividends is the ASX share’s joint venture industrial property trust.

This is where the trust is building quality industrial properties on excess land that Brickworks used to own by itself. Some of the latest projects are two huge warehouses, one each for Coles Group Ltd (ASX: COL) and Amazon. Once completed, they are expected to significantly increase the rental profit and capital value of the trust, which could help the Brickworks share price.

The ASX dividend share has a trailing grossed-up dividend yield of 3.8%.

The post 2 ASX dividend shares offering solid income and growing yields appeared first on The Motley Fool Australia.

Should you invest $1,000 in Rural Funds right now?

Before you consider Rural Funds, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Rural Funds wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Why is the Brickworks (ASX:BKW) share price having such a lousy month?

2 excellent ASX dividend shares with attractive yields

Why is the Washington H. Soul Pattinson (ASX:SOL) share price struggling in November?

2 ASX shares that could be buys for both growth and dividends

Why is the Brickworks (ASX:BKW) share price falling today?

Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Brickworks. The Motley Fool Australia owns shares of and has recommended Brickworks, COLESGROUP DEF SET, RURALFUNDS STAPLED, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended TPG Telecom Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!