APA Group (ASX: APA) is an S&P/ASX 200 Index (ASX: XJO) stock that can deliver strong monthly passive income to investors.
APA is an energy infrastructure player that owns very large gas pipelines around Australia. It also owns or has stakes in a number of gas assets, including gas storage and gas-powered energy generation.
The company is also expanding its electricity transmission and renewable energy portfolio. It’s involved in solar panel farms and recently acquired the Basslink – an electricity cable that connects Tasmania with the mainland.
How much dividend income will ASX 200 stock pay?
APA has been steadily growing its dividend payments each year for more than a decade and a half. It has funded these increases with growing cash flow from its asset portfolio.
In FY23, the company expects to pay a full-year distribution of 55 cents per security, which would represent an increase of 3.8% compared to FY22.
Receiving $400 per month would equate to $4,800 per year. Keep in mind that APA doesn’t pay every month, it’s just that investors need to translate that annual figure into 12 equal parts.
To gain $4,800 per year, we’d need 8,728 APA shares.
To buy 8,728 APA shares, we’re currently talking about a total cost of around $89,000 after the 6% fall of the APA share price over the last month.
The ASX 200 stock is expected to pay an annual distribution per security of 62 cents in FY25, according to Commsec. With that payment, we’d only need 7,742 APA shares for the passive income target.
What is the yield of APA shares?
Thanks to the ongoing dividend growth and the reduction of the APA share price, the FY23 dividend yield is expected to be 5.4%. That’s solid passive income.
If the distribution does grow to 62 cents per security by FY25, then this would translate into a dividend yield of 6.1%.
This is a stronger yield from the ASX 200 stock than what people can get from savings accounts or term deposits while also offering growth.
APA continues to invest in new pipelines, as well as renewable projects, that could unlock further cash flow for the business. It’s also exploring the possibility of using its pipelines for hydrogen, which could lead to a greener future.
APA share price snapshot
Since the start of 2023, the APA share price has fallen by 3%.
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