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Here are 3 fast-growing dividend shares for income investors

Whilst a big dividend yield is undoubtedly great, I’m a bigger fan of dividends that have significant long-term growth potential.

Three shares which I feel could provide exactly that are listed below. Here’s why I think income investors should consider them as buy and hold investments today.

Altium Limited (ASX: ALU)

Although this software-as-a-service company’s shares yield an unfranked 2.4% dividend at present, I believe this can grow significantly in the future. After all, management believes demand for its printed circuit board design software will enable it to double its revenue to US$200 million by FY 2020. I expect there’s a good chance its dividend will also be doubled, potentially making it an opportune time to snap up shares.

Collins Foods Ltd (ASX: CKF)

This KFC operator has increased its dividend for five consecutive years and looks set to do it again this year. After increasing its interim dividend by a third to 8 cents, its shares now yield a trailing fully franked 3.1% dividend. With the company intent on expanding aggressively in the European market, I believe Collins Food could be in a position to continue growing its dividend at an above-average rate for at least the next few years.

InvoCare Limited (ASX: IVC)

This leading funeral services company has an impressive track record for dividend increases and has now grown it each year for over a decade. As a result, its shares provide investors with a trailing fully franked 2.9% dividend today. With the company commanding a market-leading position in a defensive and arguably recession-proof industry, I believe there’s a good probability of InvoCare continuing to increase its dividend for the next decade. This could make it an ideal option for income investors.

This fourth dividend share has also increased its dividend each year for over a decade. Thanks to a recent drop in its share price, I think now could be a great time to consider snapping it and its huge yield up.

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Motley Fool contributor James Mickleboro owns shares in Collins Food Ltd. The Motley Fool Australia owns shares of Altium. 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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