While I remain confident that the Telstra Corporation Ltd (ASX: TLS) dividend will be sustainable at 22 cents per share for at least the next three years, I completely understand why some investors are sceptical on this.
So if you love dividend shares but you're not wanting to risk an investment in the telco giant, then the two dividend shares listed below could be great alternatives. Here's why:
Dicker Data Ltd (ASX: DDR)
This founder-led wholesale computer hardware company recently posted a 7.1% increase in half-year revenue thanks to a mix of organic vendor growth and the introduction of new vendors. In the second-half this growth is expected to accelerate, leading to full-year top line growth of approximately 10% year-on-year.
A key driver of this growth is expected to come from growing categories such as the Internet of Things and Cyber Security. I believe these categories have a long runway for growth which puts Dicker Data in a strong position to grow its bottom line and dividend at a solid rate for the next few years. In FY 2017 Dicker Data intends to pay a fully franked 16.4 cents per share dividend in quarterly instalments. This equates to a very generous annual yield of 6.6% based on the current share price.
Mantra Group Ltd (ASX: MTR)
While Mantra doesn't provide a yield that is comparable to Dicker Data or Telstra, I do believe it has the potential to grow significantly over the next decade. With Australia's tourism boom showing no signs of slowing and inbound tourism from the United States and China expected to grow strongly, I believe Mantra's numerous accommodation brands will see demand for their rooms increase greatly.
I expect this to result in higher occupancy levels, which in turn should allow the company to charge higher room rates. Overall, I believe this puts Mantra in a great position to grow its bottom line and dividend at an above-average rate for the foreseeable future. At present Mantra's shares provide a trailing fully franked 3.4% dividend.
