I think that there are several ASX dividend shares that Warren Buffett would like to have in his portfolio if he were focused on Australian shares.

There are tax advantages for Berkshire Hathaway to stay in the US and tax disadvantages to invest in Australia (such as the higher tax rate). So I don’t think he’s about to jump on these shares. 

But as Australians we get to invest in some great companies in Australia. Some of those ASX dividend shares also offer the benefit of franking credits.

Here are three ideas:

Brickworks Limited (ASX: BKW)

Whilst Brickworks is not exactly the same as Clayton Homes, they are both involved in property building. So I think Brickworks would be one that Warren Buffett would want to invest in for the long-term.

Brickworks has been around for decades. It has been Australia’s biggest brickmaker for a while and now it offers a number of different building products like paving, masonry, precast and roofing. It has recently expanded into the US with a few targeted acquisitions so that the company is now a market leader in the north east.

Why does it count as a good ASX dividend share? It hasn’t decreased its dividend for over 40 years. I think that’s a great record. It should be able to keep that record going through the coronavirus with the reliable distributions paid by its other assets, including an industrial property trust.

It currently offers a grossed-up dividend yield of 5.2%.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Patts is probably the closest thing to Berkshire Hathaway on the ASX. Soul Patts invests in both listed and unlisted businesses. It’s invested in things like TPG Telecom Ltd (ASX: TPM), Brickworks, swimming schools, agriculture and soon it will seemingly be invested in regional data centres.

Warren Buffett has already been at Berkshire Hathaway for half a century, yet Soul Patts’ history goes back much further to the early 1900s. It has great staying power. 

I think Soul Patts could be one of the best ASX dividend shares out there. Its dividend is funded purely by its annual investment income (less operating expenses), which is steadily growing over time. It is currently retaining around a fifth of that regular cashflow profit to invest in more opportunities.

The ability of Soul Patts to invest in almost any asset, anywhere, is very useful flexibility. Soul Patts can choose whatever it thinks will make the biggest returns.

It currently has a grossed-up dividend yield of 4.3%.

APA Group (ASX: APA)

Two of Berkshire Hathaway’s biggest divisions are Berkshire Hathaway Energy and the railroad business. APA Group is somewhat a combination of the two.

It owns a vast network of 15,000km of natural gas pipelines around Australia with a presence in every mainland state and the Northern Territory. It also owns or has interests in gas storage facilities, gas-fired power stations and renewable energy generation (wind and solar farms). APA owns, or manages and operates, a portfolio of assets worth more than $21 billion and delivers half the nation’s natural gas usage.

Australia is looking to gas to deliver a major part of its future energy needs, so this ASX dividend share could be an integral part of the puzzle. The company continues to invest in future projects which will unlock more cashflow for the infrastructure business.

It has increased its distribution every year for a decade and a half. The FY20 annual distribution is expected to grow to 50 cents per unit, amounting to a total distribution of 4.4%.

Foolish takeaway

I think all three of these ASX dividend shares are very interesting ideas for income. I believe Warren Buffett would be very interested in owning each of them. I’d probably go for Brickworks over the other two because I still think it looks like the best value during the current uncertainty, but Soul Patts is my favourite choice for the ultra-long-term.

More reading

• Why I’m not afraid to invest in shares during this recession
• Here’s why long term investing can outperform shorter holding periods
• Where should you invest $1,000 in ASX shares?
• ASX 200 rises 0.3%, Zip rockets higher
• Why Amaysim, Bingo, Brickworks, & BlueScope are pushing higher today

Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of APA Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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