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3 future dividend champions

The ASX share market doesn’t have many high-quality dividend options that have high yields. A high yield can actually be a dangerous thing if it’s unsustainable.

Investors wanting good income in the future may actually be best served looking for shares that are growing their dividend at a fast rate.

That’s how Domino’s Pizza Enterprises Ltd (ASX: DMP) and CSL Limited (ASX: CSL) ended up paying out more dividend income than Telstra over a decade even though they started with much lower yields.

Here are three shares that could repeat the CSL and Domino’s success:

Altium Limited (ASX: ALU)

Altium is the creator of electronic PCB design software for engineers.

It is experiencing solid growth each year due to the rise of more complex devices and the ‘Internet of Things’ trend.

In FY17 Altium management were able to increase the dividend by 15%. Since FY13 the annual dividend per share has grown from $0.11 to $0.23, that’s very strong growth because the dividend has more than doubled.

Altium management predict that revenue could double over the next few years, which could bring big dividend increases too.

Altium is currently trading with an unfranked dividend yield of 2%.

Bapcor Ltd (ASX: BAP)

Bapcor is the largest auto parts company in Australia with its main two businesses of Burson and Autobarn.

The business has been making acquisitions for a number of years and its latest one called Hellaby’s in New Zealand is a strong fit and is providing even more earnings growth.

Bapcor grew its annual dividend per share by 18.2% in FY17 and there could be more strong increases in the pipeline with more optimisation in the business from synergy benefits.

It’s currently trading with a grossed-up dividend yield of 3.53%.

National Veterinary Care Ltd (ASX: NVL)

National Vet Care has been performing very well for shareholders since it listed in 2015. The business has been steadily acquiring more veterinary clinics and improving them.

Management are confident with how the business has gone and have just declared a maiden dividend. I think the business could follow in the footsteps of Greencross Limited (ASX: GXL) and create rapid dividend growth over the next few years.

National Vet Care is currently trading with a grossed-up dividend yield of 1.59%.

Foolish takeaway

I think all three shares are very exciting for growth and dividend investors. Altium’s price is a bit too high for my liking, but both Bapcor and National Vet Care look like good buys at the current prices.

Another great dividend choice could be our number one dividend pick for FY18 which is expanding in Asia.

A Big, Fat, Fully Franked Dividend

This company's dividend is almost the stuff of legends. Since it started paying dividends in 2007, it has increased its payout to shareholders every single year, a run that includes 21 consecutive dividend increases.

Based on the last 12-months of dividends, its shares are currently offering a fully-franked 4.8% yield, which grosses up to almost 7% when those franking credits are included.

Discover the name of this "new breed" of blue chip along with 2 others in our new FREE report "The Motley Fool's Top 3 Blue Chips Stocks For 2017."

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Motley Fool contributor Tristan Harrison owns shares of Altium, Bapcor, and NATVETCARE FPO. The Motley Fool Australia owns shares of Altium and Bapcor. 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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