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10 top dividend shares for 2017

Dividends are one of the most satisfactory things about investing. Your investment will regularly pay you a nice cash payment, whilst you don’t have to do anything at all. Just sit back and watch the dividends roll in.

It’s the perfect way to construct your stress-free lifestyle. No need to worry about collecting rent from tenants, fixing the latest leak or trying to figure out if negative gearing is worth it.

Here are my top dividend shares to buy in 2017:

  • Altium Limited (ASX: ALU) is an electronic PCB software provider helping organisations like NASA, John Deere and Toyota design the products of the future. Management are predicting revenue to double over the next few years thanks to the growth of the ‘Internet of Things’. Altium has an unfranked dividend yield of 2.81%. It has doubled its dividend since 2013.
  • Australian Foundation Investment Company (ASX: AFI) (AFIC) is Australia’s largest listed investment company (LIC) with a dependable investment strategy dating back to 1928. Its portfolio includes all the usual blue chips and it also has an active focus on smaller companies. AFIC has a grossed-up dividend yield of 5.99% and has grown or maintained its dividend every year since 2007.
  • Challenger Ltd (ASX: CGF) is the annuity king which provides reliable income for retirees looking for a stress-free stream of money. The number of baby boomers hitting retirement combined with the growth of Australia’s superannuation pool of assets should be a big boost to Challenger. It has a grossed-up dividend yield of 3.91% and has grown or maintained its dividend every year since 2005.
  • InvoCare Limited (ASX: IVC) is Australia’s leading funeral service provider with around 33% market share. It has a variety of brands serving customers of different price points. Australia’s death rate is expected to steadily increase until 2034, which is a strong tailwind for InvoCare. It has a grossed-up dividend yield of 4.29%. InvoCare has increased its dividend every year since 2006.
  • Mortgage Choice Limited (ASX: MOC) is one of Australia’s largest mortgage brokers with a close alignment to Australia’s booming property market. Mortgage Choice receives a trailing commission from all the loans that it has brokered which creates a strong recurring revenue stream. It has a grossed-up dividend yield of 10% and has grown or maintained its dividend every year since 2009.
  • REA Group Limited (ASX: REA) is the owner of realestate.com.au as well as other leading property sites around the world. Internet advertising is very important for any property owner wanting to sell or rent their property in this day and age. It has a grossed-up dividend yield of 2.12% and its dividend has more than doubled since 2013.
  • Rural Funds Group (ASX: RFF) is the only agricultural ASX-listed real estate investment trust. It owns a variety of farms including cattle, poultry, almonds and vineyards. Rural Funds has rental increases in place with all its contracts, which has allowed management to pencil in a 4% distribution increase for FY18. Rural Funds is trading with a dividend yield of 5.35%.
  • Ramsay Health Care Limited (ASX: RHC) is one of the world’s largest private hospital operators. The ageing population means that it’s likely Ramsay will have increasing numbers of patients for many years ahead. Ramsay has a grossed-up dividend yield of 2.72%. It has increased its dividend every year since 2000.
  • Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) or “Soul Patts” is an investment conglomerate which has been effectively managed since 1903. It has been run by several generations of the same family and has paid a dividend for many decades without fail. It has a grossed-up dividend yield of 4.26% and has increased its ordinary dividend every year since 2000.
  • WAM Research Limited (ASX: WAX) is an LIC that has been outperforming the market and paying out a good portion of the returns as growing dividends. It focuses on small, fast-growing businesses and keeps a lot of cash for protection and opportunities. It has a grossed-up dividend yield of 7.86%. It has increased its dividend every year since 2008.

Foolish takeaway

I think all of these companies would be good additions for a strong dividend portfolio. However, it can be difficult to know when to buy and sell dividend shares, I’d strongly recommend the Motley Fool’s brand new Everlasting Income option to generate all the income you need.

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Motley Fool contributor Tristan Harrison owns shares of Altium, Challenger Limited, InvoCare Limited, Ramsay Health Care Limited, RURALFUNDS STAPLED, WAM Research Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of Altium, Challenger Limited, and Washington H. Soul Pattinson and Company 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 Bruce Jackson.

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