Whilst a big dividend yield is great, dividends which have significant room to grow are even better in my opinion.
Two shares which I think could become great dividend shares in the future are as follows:
Altium Limited (ASX: ALU)
The shares of this leading provider of printed circuit board (PCB) design software currently offer a trailing unfranked 2.6% dividend. Although that doesn't jump out as being a must buy, I think investors that are patient will be rewarded extremely handsomely.
There will be an estimated 20.8 billion connected devices in use worldwide by 2020. This is a sizeable increase from the 6.4 billion devices research firm Gartner estimates to have been in use last year. As almost all of these devices require PCBs, I expect demand for Altium's software to grow strongly.
I'm not alone in thinking this. Management believes the company is on course to almost double its revenue to US$200 million by 2020. This should allow its dividend to increase significantly.
Collins Foods Ltd (ASX: CKF)
At present the KFC operator's shares provide a trailing fully franked 3.2% dividend. Whilst this yield is lower than the market average, in the future things could be very different.
Asides from its strong growth prospects through its international expansion, I think the company has a lot of room to increase its dividend payout.
Last year Collins Food paid out just 40% of its earnings as a dividend. In time I would expect this to increase in line with rival Domino's Pizza Enterprises Ltd, (ASX: DMP), which traditional pays out around 70% of its earnings as a dividend.
