Forget Westpac Banking Corp and buy these fast-growing dividend shares

While the big dividends on offer from the likes of Westpac Banking Corp (ASX: WBC) and the rest of the big four are certainly attractive, I believe their respective shares are expensive right now and come with significant downside risk.

Because of this I would suggest investors look elsewhere in the market for dividends. Three such shares which could be worth a closer look are as follows:

AP Eagers Ltd (ASX: APE)

At 15x trailing earnings and providing a trailing fully franked 4.2% dividend, I believe this automotive retailer could be a good option for investors today. In FY 2016 AP Eagers posted record full-year net profit after tax of $105.5m, up 21% on the prior corresponding period. Whilst I expect earnings growth to slow in FY 2017, the company continues to be on the lookout for earnings accretive acquisitions to boost its bottom line.

Sigma Pharmaceutical Limited (ASX: SIP)

Sigma is the company behind pharmacy retail brands such as Amcal, Guardian, PharmaSave, Chemist King, and Discount Drug Stores. It recently reported a 13% increase in full-year net profit thanks partly to an impressive 8.2% jump in like-for-like sales at Sigma branded pharmacies. This allowed the company to increase its full-year dividend to a fully franked 5.5 cents per share, which equates to a 4.5% yield at today’s share price. I think this is a great dividend with plenty of room to grow in the next few years. Especially with the company’s online store in China growing strongly and management extending its buy-back to a further 10% of shares on issue.

Think Childcare Ltd (ASX: TNK)

The shares of this fast-growing childcare centre operator provide a trailing fully franked 4.2% dividend today. I believe this has significant room to grow over the next few years thanks to the company possessing a pipeline of newly developed, purpose built childcare centres around Australia to acquire progressively over the next five years from one of its incubators. So with its shares changing hands at just 15x trailing earnings, I belive Think Childcare could prove to be a great investment.

This fourth dividend share could be the best of the lot. With a market-beating yield and strong growth prospects, I think it is a strong buy.

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. 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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