Here are 3 growing dividends to help you retire rich

The Vocus Group Ltd (ASX:VOC) dividend is one of three which I believe could grow significantly in the future. Here's why that is important…

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

If you have a long enough investment time horizon I believe investing in shares which have the potential to grow their dividend significantly in the future is a great way to create a source of income in retirement.

Take for example, Ramsay Health Care Limited (ASX: RHC). The private hospital operator has never been regarded as a dividend share. But had you invested in its shares 10 years ago you might feel very differently.

At that point in time its shares were trading at $11.50 and provided a fully franked 29 cents per share dividend, equating to a 2.5% yield.

This year Ramsay is expected to pay a fully franked 132.3 cents per share dividend. Whilst this is a paltry 2% yield based on today's share price, the yield on cost for those that bought its shares 10 years ago is a massive 11.5%.

Furthermore, companies that have a tendency to pay out the majority of their earnings as dividends could provide long-term shareholders with even more lucrative pay-outs.

An example of this is an investment in Retail Food Group Limited (ASX: RFG). Investing 10 years ago when its shares were priced at $1.36 would provide a staggering fully franked yield on cost of 31.6% this year.

But what about the next 10 years?

Three shares which I believe could be equally successful over the next 10 years are fast-growing telco company Vocus Group Ltd (ASX: VOC), popular retailer Premier Investments Limited (ASX: PMV), and online travel agent Webjet Limited (ASX: WEB).

I think each of these three companies has extremely strong growth prospects and the ability to increase their dividends significantly over the next decade.

Whether or not they turn out to be as successful investments as Ramsay and Retail Food Group, only time will tell. But judging by their performances in the last few years I believe they have a great chance.

Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia owns shares of Retail Food Group 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.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »