The ASX dividend share APA Group (ASX: APA) could be one of the best ideas for passive income in the S&P/ASX 200 Index (ASX: XJO).
APA describes itself as a leading energy infrastructure business. It operates a portfolio of more than $20 billion of assets. This includes gas transmission, processing, compression, and storage assets, with 15,000km of owned gas pipelines being the key asset. It also owns wind farms, solar farms, battery storage, and electricity assets.
Impressively, the business delivers around half of the country’s gas usage, so it’s an integral player in the Australian economy.
With its important assets and growing cash flow, I think it has a great future for the next 10 years and beyond.
Pleasing FY26 result
APA reported a solid set of numbers in the 2026 financial year report.
Total statutory revenue, excluding pass-through revenue, grew 1.9% to $2.76 billion.
The ASX dividend share’s underlying operating profit (EBITDA) climbed 8.3% to $2.18 billion, beating the mid-point of its guidance. There were contributions from newly commissioned assets, inflation-linked tariff escalations, and business-wide cost reduction efforts.
Free cash flow grew 3.2% to $1.1 billion, driven by strong operating cash flow, despite higher tax and interest costs.
APA noted $546 million of capital investment in growth projects, including the Brigalow Peaking Power Plant and pipeline, its East Coast gas grid expansion, and the Sturt Plateau pipeline.
The ASX dividend stock said its organic growth development pipeline has increased to $3.5 billion, up from $3 billion. There’s capacity to fund the investments from the existing balance sheet and the distribution reinvestment plan (DRP).
APA also said it’s progressing a number of attractive long-term growth opportunities, including Beetaloo gas transmission pipelines, contracted gas-powered generation, remote grid power generation, and integrated energy solutions to support the data centre industry. It’s going through the process to advance these plans.
Pleasingly, the business provided underlying EBITDA guidance for FY27 of between $2.26 billion and $2.34 billion, representing year-over-year growth at the mid-point of 5.4%.
That guidance is supported by inflation-linked tariff escalations, a contribution from the new Sturt Plateau pipeline, the conversion of Basslink to a regulated asset, and the annualised benefit of cost reductions.
Why the ASX dividend share is so appealing
The business has provided guidance that it will increase its FY27 distribution to 59 cents per security, which balances rewarding investors with its funding requirements for the organic growth pipeline and the need to maintain its investment-grade credit rating.
With that potential distribution, it would provide a distribution yield of 5.8% at the time of writing.
Impressively, the business increased its annual distribution for the 22nd consecutive year in FY26, which is the second-longest dividend growth streak on the ASX. I think consistency and reliability are extremely important as an ASX dividend share.
In my view, this is one of the best ASX dividend shares to own for the long term. Energy is always needed, and domestically produced energy could become even more important in the years ahead.
The post I think this is one of the best ASX dividend shares to own for the next 10 years appeared first on The Motley Fool Australia.
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More reading
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- APA Group FY26 delivers strong earnings, pipeline expansion, and 22nd annual dividend increase
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- How to build a strong ASX retirement portfolio with 10 shares
- ASX 200 utilities shares gained 7% while the broader market fell heavily last week
Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Apa Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.