I’m very interested in the dividend growth investing strategy, investing in companies that consistently raise their dividends year over year. Problem is not many Aussie companies are into raising it year over year.
Sticking to ASX stocks (the US experience is, for the above mentioned reasons, a very different set of circumstances, especially tax treatments), there are a few companies that, if not consistently raising, have managed to either hold dividends steady, or increase on occasion but not every year.
CSL is the obvious one but, great as it has been, this is a rear mirror view; the company’s ability to consistently ‘win’ is not a given. Most other companies tend to be cyclical, with attendant challenges of maintaining payouts.
I will draw your attention to a less glamorous section of the market, that of Listed investment Companies (LICs). Examination of their dividends shows a very consistent pattern, especially among the older more established ones that have reserve accounts, a store of franking credits, pay out from dividends received but not adding a bit of ‘spice’ from capital growth and shorter term trading/ profit taking.
Australian Foundation (AFI), Argo Investments (ARG), Milton (MLT), as well as AUI and DUI, have managed to increase, or at least hold steady, dividends over each of the last 10 years, at the very least. This is based on a 6-monthly cycle of Interim and Final payments; in addition, one-off factors allow for occasional Special Dividends – such as participation in takeovers, Buybacks, demergers and circumstances like the Shorten franking scare of 2019.
Another Investment house that has exhibited a steady dividend rise is Soul Patts (SOL).