2 small-cap dividend shares on my shopping list

Whilst blue chip shares such as Telstra Corporation Ltd (ASX: TLS) and Suncorp Group Ltd (ASX: SUN) are undoubtedly great options for income investors, I believe there are some equally great dividend shares in the small-cap space.

Two small-cap shares which I think could grow their dividends significantly in the future as their businesses grow are listed below. Here’s why I think they are worth considering today:

Tassal Group Limited (ASX: TGR)

Due to its shares tumbling 15% in the last three months, this vertically integrated salmon company’s shares currently change hands at a little over 13x forecast full-year earnings and provide a trailing fully franked 3.9% dividend.

I believe this makes it a great option for income investors, especially considering the favourable salmon pricing in wholesale and export markets the company is experiencing at present is expected to continue into FY 2018. This could put Tassal in a position to grow its earnings and dividend at an above-average rate.

Think Childcare Ltd (ASX: TNK)

One reason I’m particularly bullish on Think Childcare is its pipeline of newly developed, purpose built childcare centres around Australia which are waiting to be acquired progressively over the next five years from its incubators.

I believe this will provide it with a long runway for growth which makes this childcare provider a great buy and hold investment option. Right now its shares provide a market-beating trailing fully franked 4.2% dividend, but this could grow significantly in the future if its expansion goes to plan.

If you like dividend shares like Think Childcare and Tassal, then check out these five dividend stars as well.

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