This morning Australia's oldest bank Westpac Banking Corp (ASX: WBC) will pay an estimated $3,145 million to its shareholders when it distributes its final dividend of 94 cents per share.
Whilst some investors will use this payout as income to live from, others will no doubt look to reinvest it back into the market.
Here's where I would choose to reinvest this dividend:
Retail Food Group Limited (ASX: RFG)
Investors that are in search of even more income might want to consider Retail Food Group. The master franchisor of numerous popular brands such as Gloria Jean's, Michel's Patisserie, and Donut King is expected to provide investors with a fully franked 4.2% dividend in FY 2017. Thanks to its international expansion plans and the revamping of several of its brands, I believe the company will be in a position to continue growing its dividend for many years to come. This could make Retail Food Group an ideal investment option for income investors and retirees as far as I'm concerned.
Vocus Communications Limited (ASX: VOC)
Those that are looking for both dividends and growth could do a lot worse than this growing telco company. In a recent presentation Vocus advised that it expects underlying net profit after tax in FY 2017 to be in the range of $205 million and $215 million. This would represent significant growth from last year's $101.7 million and mean its shares are trading at a little over 11x forward earnings. This is bargain territory as far as I'm concerned, even when you factor in the boardroom drama and Nextgen's underperformance. But perhaps best of all is that management intends to grow its dividend in line with the growth of the business. So with its shares already providing a trailing fully franked 4.1% dividend, this could be a real dividend star in the future if you invest right now.
