If you're trying to grow your wealth, or live off a regular passive income, the current measly official cash rate of just 2.25% is not nearly sufficient. This is especially so when inflation has averaged 2.48% over the last four quarters.
Fortunately, some of the ASX's best companies are still growing earnings and paying out big, fat dividend cheques to investors. Here are three of my favourite fat-dividend payers which will be mailing out (or direct debiting!) dividend cheques over the next two months:
1. FlexiGroup Limited (ASX: FXL)
FlexiGroup is a star performer in both earnings and dividend growth. Yesterday the company again proved its ability to perform for investors, announcing cash Net Profit After Tax (NPAT) growth of an impressive 9% in the first half of Financial Year 2015 (FY15).
This allowed FlexiGroup to declare a 9% increase to its fully franked interim dividend, pushing the annual dividend yield up to 5%. Best of all, this only represents a pay out of 50-60% of cash NPAT, leaving the company with plenty of cash to reinvest for growth.
Lower interest rates and lower oil prices will help FlexiGroup in the short term, supporting consumer spending, while longer term the company will continue to target repeat customers and keep an eye out for potential acquisitions.
2. Suncorp Group Ltd (ASX: SUN)
Suncorp Group is another company with an inflation-smashing dividend of just over 5%. Suncorp had a huge NPAT result in FY14, growing by almost 50% and allowing the company to grow its dividend to investors by 40%.
The financial company has made it clear it intends to focus on simplifying the business and reducing capital requirements over the next three years, growing its top line, keeping costs flat and improving margins, which should help to protect the 60-80% dividend payout ratio.
3. Mortgage Choice Limited (ASX: MOC)
The third dividend offering (and third financial company) is Mortgage Choice; another steady earner yielding a hefty 5.8% (excluding franking credits). The company grew revenue by 16% in FY14 and has signalled strong performance in FY15.
Mortgage Choice runs the comparison website HelpMeChoose.com.au and is transforming into a diversified financial services business, adding financial planning to its offerings. The strong financial performance helped the company grow its dividend by 19% over FY13 and investors are again likely to be in for a strong year when the company announces its first half results on 26 February.
