On Wednesday the shares of Commonwealth Bank of Australia (ASX: CBA) went ex-dividend, meaning investors that owned the bank's shares before the market opened that day will receive an interim fully-franked dividend of $1.99 per share on April 4.
Whilst some investors will use this pay-out for income, others may want to reinvest this dividend back into the market. Here's where I would reinvest these dividends:
Mantra Group Ltd (ASX: MTR)
One company which I expect to profit greatly from Australia's tourism boom is accommodation provider Mantra. Although its CBD portfolio has been a bit of a disappointment in the last two years, its Resorts segment has been growing strongly. That segment recently posted half-year revenue and EBITDAI growth of 30.1% and 29.5% respectively. I have confidence that management will turn its CBD segment around, leading to stronger growth and profitability for the company as a whole. At the current share price I think Mantra is a buy.
Ramsay Health Care Limited (ASX: RHC)
In my opinion this leading private hospital operator is one of the best buy and hold investments on the ASX. I expect demand for healthcare services will remain strong for the next decade thanks to an ageing and growing population, clinical innovation, and an increase in chronic illnesses. I believe this should allow Ramsay to continue growing its bottom line at a solid rate for the foreseeable future. Whilst there will be a change of CEO this year, I feel confident that it will be business as usual for the company despite the C-suite upheaval.
TPG Telecom Ltd (ASX: TPM)
With its shares down almost 49% in the last six months, I believe this telco giant could be considered a bargain buy right now. Although NBN margins may not be as lucrative as many had hoped, the rollout of its own fibre network in certain areas could be very profitable. Furthermore, the company is pursuing other growth opportunities such as an entry into the Singaporean mobile market. At present its shares are changing hands at 14x estimated FY 2017 earnings. This strikes me as a great time to make a buy and hold investment.
