There are some ASX dividend shares out there raising dividends like clockwork.

I think it’s particularly important to find businesses growing their dividends. If a business isn’t growing their dividend then it suggests the business is struggling to grow their earnings. It may suggest that the board thinks the business needs to hang onto cash just to tread water.

After Ramsay Health Care Limited’s (ASX: RHC) recent dividend suspension due to coronavirus impacts, there aren’t many shares left with solid dividend records.

Here are three ASX dividend shares that are growing their dividends like clockwork:

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

Soul Patts is now the ASX dividend share king of Australia. It is the only business to have increased its dividend every year since 2000.

The investment conglomerate has a diversified portfolio of listed and unlisted businesses. Some of its biggest holdings include shares like TPG Telecom Ltd (ASX: TPM) and Brickworks Limited (ASX: BKW).

Its investments and other assets provide an attractive source of dividends, distributions, interest and so on. Soul Patts retains a certain amount of this each year to re-invest into more opportunities. It retained around 20% of its net regular operating cashflow in FY19.

Soul Patts has paid a dividend every year in its existence, which is a record that extends over a century.

Management have already guided that the dividend is expected to increase at the full year result later this year.

APA Group (ASX: APA) 

APA is another of the ASX dividend shares that has a record going back before the GFC. It has increased its distribution every year for a decade and a half.

What is APA? 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.

There continues to be solid demand across the country for gas. More people are cooking at home. It’s getting into the colder months in the southern states.

APA funds its annual distribution from the cashflow that it makes. The distribution and cashflow have been growing nicely over the past decade.

The infrastructure giant continues to invest in new projects that will earn more cashflow in the future. This should help the distribution to keep growing.  

Rural Funds Group (ASX: RFF) 

Rural Funds is a farmland real estate investment trust (REIT). It owns an impressive portfolio of farms including almonds, cattle, cotton, vineyards and macadamias.

The farmland trust aims to grow the distribution by 4% a year, this goal comfortably beats the current inflation rate. It’s able to go for that level of growth through contracted rental indexation and investing in productivity improvements at its farms. It will occasionally make an acquisition which will presumably be accretive for unitholders.

It could be one of the best ASX dividend shares.

Farmland has been a solid performer over the years and 2020 is predicted to be another good year. Food security will become more important over the next decade, particularly if the global population keeps growing and some global farmland degrades in the 2020s.

It hasn’t been listed on the ASX that long, but its distribution increase record has been on target over the past five years.

Foolish takeaway

All three of these ASX dividend shares have been increasing their payments for many years. I think Soul Patts is by far the best dividend share on the ASX in terms of reliability and growth. It would be my pick dividend pick.

More reading

• 2 safe ASX dividend shares for income investors to buy right now
• Why I’m even more confident about the Soul Patts share price
• How to make a $1 million share portfolio by investing $1,000 a month
• Bring your portfolio to life with these quality ASX healthcare shares
• 2 blue chip ASX healthcare shares to buy right now

Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of APA Group. The Motley Fool Australia has recommended Ramsay Health Care Limited. 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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Last week saw a large number of broker notes hitting the wires once again. Three buy ratings that caught my eye are summarised below.

Here’s why brokers think investors ought to buy them next week:

Collins Foods Ltd (ASX: CKF)

A note out of UBS reveals that its analysts have upgraded this quick service restaurant operator’s shares to a buy rating with a slightly reduced price target of $8.95. According to the note, the broker was pleased to see the company’s KFC Australia operations have been performing well during the pandemic. In light of this, its defensive qualities, and attractive valuation, the broker believes Collins Foods’ shares are in the buy zone. I would agree with UBS on this one and feel it would be a good option for investors.

Harvey Norman Holdings Limited (ASX: HVN)

According to a note out of Goldman Sachs, its analysts have upgraded the retailer’s shares to a buy rating with an improved price target of $3.85. The broker made the move after industry feedback suggested that sales trends are proving more resilient across the sector than expected only a few months ago. In light of this, the broker has updated its forecasts for Harvey Norman in FY 2020 and FY 2021. While not my favourite option in the retail sector, I think it could be worth a closer look at this level.

NEXTDC Ltd (ASX: NXT)

Analysts at Morgan Stanley have retained their overweight rating and lifted the price target on this data centre operator’s shares to $10.50. According to the note, the broker believes NEXTDC is well-positioned for growth thanks to its ability to take advantage of the accelerated demand for cloud services. This follows the announcements of major new contracts in Melbourne and Sydney in recent weeks. The latter has led to the company pushing ahead with the construction of its third data centre in the city. I agree with Morgan Stanley and feel NEXTDC would be a great long term option.

More reading

• What to watch on the ASX 200 next week
• The ASX 200 blue chip shares I would buy with $5,000 after the market crash
• Top broker urging you to buy this ASX 200 retail stock next week
• Why I’d buy and hold CSL shares forever
• These were the best performing ASX 200 shares last week

Motley Fool contributor James Mickleboro owns shares of Collins Foods Limited and NEXTDC Limited. The Motley Fool Australia has recommended Collins Foods Limited. 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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