While the dividends on offer from the likes of Woolworths Limited (ASX: WOW) and Wesfarmers Ltd (ASX: WES) are among the more generous on the market, I'm not overly convinced that they will grow meaningfully over the next few years.
But don't worry because I think the three small-cap shares below are in a position to grow both their earnings and dividends at a quick pace in the future.
In my opinion this could make them great options for investors with a higher-than-average tolerance for risk. Here's why:
1300 Smiles Limited (ASX: ONT)
Although conditions in the dental industry have been very weak and weighed heavily on 1300 Smiles' performance, management appears optimistic that conditions will improve in the near future. This could make it an opportune time to snap up shares, especially as they provide investors with a trailing fully franked 3.5% dividend.
Money3 Corporation Limited (ASX: MNY)
This credit provider recently posted a 44.5% increase in full-year net profit after tax to $29.1 million thanks to strong growth from its secured automotive loans business. This allowed it to increase its fully franked full-year dividend to 5.6 cents per share, which equates to a 3.8% yield at the current share price. I expect more of the same in FY 2018, making Money3 a great option for income investors.
Think Childcare Ltd (ASX: TNK)
Due to Think Childcare possessing a pipeline of newly developed, purpose built childcare centres around Australia to acquire progressively over the next five years, I believe it is in a great position to deliver solid earnings growth for the foreseeable future. This could give the company the flexibility to increase its generous dividend even further. At present it provides investors with a trailing fully franked 4.6% yield.
