These small-cap dividend shares could be perfect for income investors

Although I think the Telstra Corporation Ltd (ASX: TLS) dividend is an attractive option for income investors, I’ll be the first to admit that the telco giant is unlikely to be in position to grow it meaningfully over the next few years.

So if you’re in the market for dividends that have the potential to grow rapidly over the next few years, the two small-cap dividend shares listed below could be exactly what you’re looking for.

Here’s why I think income investors ought to consider snapping them up today:

Amaysim Australia Ltd (ASX: AYS)

Unlike Telstra, the arrival of the NBN is a major opportunity for this fast-growing telco company. Amaysim aims to build on its success in the mobile space by offering low-cost unlimited Amaysim-branded NBN plans. Whilst it is undoubtedly a highly competitive market, the company has cross-selling opportunities with the 800,000 households using its mobile services. While it is early days, I’m optimistic that the company will be able to gain a decent market share. This should put it in a position to grow its dividend at a solid rate over the coming years. At present its shares provide a trailing partially franked 4.5% dividend.

Baby Bunting Group Ltd (ASX: BBN)

Although its shares have rallied 20% higher over the last 30 days, they still provide a generous trailing fully franked 4.3% dividend. The baby products retailer’s dividend isn’t likely to grow much this year due to its expectation of flat earnings, but once the short-term headwinds it is facing subside, I expect strong growth in both earnings and its dividend. Baby Bunting has been the victim of its own success this year. The closure of competitors, and accompanying clearance sales, has led to competitive pressures. But once these competitors are out of the way, I expect the company will be free to gobble up more market share.

Finally, here's a third dividend share which has the potential to grow strongly over the next few years.

OUR #1 dividend pick to grow your wealth over the new financial year is revealed for FREE here!

Financial year 2018 is here and The Motley Fool’s dividend detective Andrew Page has revealed his must buy dividend share to grow your wealth in 2018.

You might not know this market leader's name, but it's rapidly expanding into a highly profitable niche market here in Australia. Even better, the shares boast a strong, fully franked dividend that should balloon in the years to come. In other words, we're looking at the holy grail of incredible long-term growth potential AND income you can watch accruing in your account in real time!

Simply click here to grab your FREE copy of this up-to-the-minute research report on our #1 dividend share recommendation now.

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

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…


The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!