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10 of the ASX’s best dividend shares you’ve never heard of

You could go and buy Telstra Corporation Ltd (ASX: TLS) shares, Commonwealth Bank of Australia (ASX: CBA) shares or Woolworths Limited (ASX: WOW) shares, but there are many great ASX shares you’ve probably never heard of hidden just a little further down the market.

Don’t get wrong; there is nothing wrong with Telstra, Commbank or Woolworths shares. In fact, they have been nothing short of fantastic dividend shares over the past few decades. For example, in the early 90’s, CBA shares traded for less than $6 and paid 40 cents per share in annual dividends. Fast forward a couple of decades, and it is currently over $86 and pays $4.20 in dividends!

Unfortunately, I doubt these ‘usual suspects’ can sustain the same rate of profit and dividend growth over the next decade. That’s why I’m looking for other dividend share ideas.

10 of the ASX’s best dividend shares you’ve never heard of

RCG Corporation Ltd (ASX: RCG) is a favourite of mine. The company exclusively distributes leading footwear brands and owns footwear stores like The Athlete’s Foot, Hype DC and more. Profit growth may slow in coming years, but it is forecast to pay a 5.7% fully franked dividend.

Appen Ltd (ASX: APX) is a small-cap software business. The $260 million company specialises in language translation, counting some of the world’s leading technology companies as its clients. It is forecast to pay a 2.2% fully franked dividend.

Gentrack Group Ltd (ASX: GTK) is another software business. The kiwi small-cap creates solutions for airport and utility providers. Its shares trade on a trailing dividend yield of 3%.

Paragon Care Ltd. (ASX: PGC) also pays a 3% dividend, but its payment comes with franking credits. The company distributes specialist medical equipment across Australia and continues to grow by acquisition.

Retail Food Group Ltd (ASX: RFG) is a name that some readers may know. Retail Food Group owns brands like Donut King, Gloria Jeans, Pizza Capers and much more. Shares in the fast casual dining and coffee company trade on a trailing fully franked dividend of 5%.

Thorn Group Ltd (ASX: TGA), despite its size, has paid a steady dividend to shareholders for many years. The company is likely to trim or cut its final dividend this year, yet analysts continue to forecast a dividend well over 5% fully franked.

Greencross Limited (ASX: GXL) is not a small-cap business, but it continues to show promising growth. The $830 million company owns and operates pet stores, including Petbarn and City Farmers, and veterinary clinics. It is tipped to pay a dividend of 2.7% fully franked.

Capilano Honey Ltd (ASX: CZZ) produces and distributes, as its name suggests, honey. Despite being worth just $133 million, Capilano is a household name across Australia. Its shares trade on a trailing 2.8% fully franked dividend.

Hansen Technologies Limited (ASX: HSN) is a $630 million business specialising in software for call centres and big business. Like Gentrack, its revenue is ‘sticky’, meaning its software programs are deeply embedded in company systems and procedures. It yields 2% fully franked.

Automotive Holdings Group Ltd (ASX: AHG) is one of Australia’s leading automotive dealers, with a logistics business. The $1.3 billion company is tipped to pay a 5.5% dividend in the year ahead.

Foolish Takeaway

In my opinion, a well diversified long-term ASX share portfolio should include just as many mid-sized and small companies as blue chips like Commbank, Telstra and Woolies. However, it’s also important to consider your risk tolerances.

I do not think that all 10 of these businesses are a buy at today’s prices. But if I had to pick a couple to consider owning today, Gentrack and Hansen would be at the top of my watchlist.

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Motley Fool Contributor Owen Raszkiewicz does not have a financial interest in any company mentioned. Owen encourages your feedback. You can follow him on Twitter @OwenRask.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Automotive Holdings Group Limited. The Motley Fool Australia owns shares of Appen Ltd, Capilano Honey Limited, Greencross Limited, Hansen Technologies, and 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.

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