Here’s why Brickworks might be one of the ASX’s best dividend shares

On the surface, the Brickworks Limited (ASX: BKW) share price doesn’t look like a truly extraordinary ASX dividend share. Sure, Brickworks shares have a trailing, fully franked dividend yield of 3.28% on offer right now.

That’s not a bad yield at all when it comes to ASX dividend shares. But it also doesn’t stand out too much either. Especially not against some of the ASX’s famous dividend payers. Take Westpac Banking Corp (ASX: WBC). Westpac currently has a fully franked dividend yield of 6.1% on the table.

And nether Brickworks nor Westpac can currently shine a light on the dividend yield of BHP Group Ltd (ASX: BHP), which is currently over 12%.

But when it comes to dividend shares, size alone doesn’t always matter. Brickworks’ dividend prowess doesn’t come from its raw yield. It comes from the company’s almost unbeatable dividend track record.

Brickworks has maintained or increased its annual dividend payments every year since 1976. Only Washington H. Soul Pattinson and Co Ltd (ASX: SOL) can come even close to rivalling this kind of dividend royalty on the ASX boards.

This streak is not slowing down either. Brickworks delivered a total of 62 cents per share in dividends over FY 2022. That was a 3.33% increase over the 60 cents per share investors received over FY2021.

Brickworks’ last interim dividend (which investors received on 3 May 2022) of 22 cents per share was a 4.76% rise over the previous year’s payment.

Why Brickworks could be one of the ASX’s best dividend shares

Compare this with Westpac and BHP. Sure, BHP’s trailing dividend yield is monstrous at over 12%. But BHP can only fund huge dividend increases when the price of iron ore is historically high. That’s why its dividend history looks more like a sine wave than a staircase.

It’s a similar story with Westpac. Although this ASX bank has a large dividend on the table right now as well, Westpac is also a highly cyclical business — one whose dividends tend to rise and fall on the strength of the economy.

The $1.21 in dividends per share that Westpac paid out over FY 2022 is still a long way from the $1.88 in dividends per share the bank forked out back in 2018.

In contrast to these two ASX blue chips, Brickworks has been a beacon of stability. Its diversified earnings base includes its core construction materials business. But it also includes significant property assets, as well as a large stake in none other than Washington H Soul Pattinson shares.

Brickworks clearly manages the earnings of these three diversified facets of its business to deliver smooth dividend increases over time.

That is why I believe Brickworks might be one of the best ASX dividend shares on the ASX 200 today.

The post Here’s why Brickworks might be one of the ASX’s best dividend shares appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX shares today
• Is the Brickworks dividend yield of almost 5% too good to ignore?
• Building up income: 2 ASX dividend shares I believe are buys
• Is it time to go bargain hunting for ASX shares?
• What is the current dividend yield on Brickworks shares?

Motley Fool contributor Sebastian Bowen has positions in Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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