4 market-beating dividend shares for income investors

Credit: GotCredit

When investors think about dividend shares they will often think of the big four banks or the likes of BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO).

But the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) certainly has more to offer than these great shares if you dig a little deeper. Four shares that I believe offer income investors growing dividends that beat the market average are as follows:

Ardent Leisure Group (ASX: AAD)

Ardent Leisure operate a diverse portfolio of well-known brands that include Goodlife Health Clubs, Main Event, AMF, Kingpin Bowling, Dreamworld, and SkyPoint.

In its recent half-year results Ardent Leisure reported revenue and statutory profit growth of 17% and 20%, respectively. I believe this is a great sign of things to come. With strong growth prospects in the United States, the future is looking positive for the company and its shareholders.

According to CommSec, the shares are expected to yield around 6.6% for the full year. Additionally, analysts believe this dividend will grow by almost 10% per annum for the next couple of years.

Fantastic Holdings Limited (ASX: FAN)

Fantastic Holdings is the company behind furniture retail brands Fantastic Furniture, Plush, and Dare Gallery. After a very successful first half the company announced a 7 cent interim dividend. Because the housing industry is looking favourable for furniture retailers at present, I am expecting a strong second half to the year.

I believe this should allow the company to payout another 7 cents for the final dividend. Making a full year dividend of 14 cents, which I expect to yield a fully franked 7.5%.

GUD Holdings Limited (ASX: GUD)

Appliance and auto parts maker GUD Holdings didn’t have the best half-year results. It reported a 63% fall in net profit before tax for the six-month period ended 31 December 2015. A one-off impairment charge attributable to the group’s Dexion business was the cause of the disappointing result. Following the results the shares dropped and are now down almost 20% for the year.

Despite the drop in profits the company held firm with its interim dividend of 20 cents per share. I expect it will do the same with its final dividend, bringing the full-year dividend to 42 cents per share. This implies that the shares will yield a fully franked 6%.

IOOF Holdings Limited (ASX: IFL)

Analysts are expecting the dividend of this leading financial service provider to grow by 5% per annum through to 2018. For 2016, a full-year dividend of 56.2 cents is expected, yielding a fully franked 6.3%.

I believe the shares are about fair value at the moment, trading at an estimated forward price-to-earnings ratio of 14. With earnings forecast to grow by 20% per annum for the next two years, now could be an opportune time to buy its shares.

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. 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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