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3 dividend shares I would buy and hold for a decade

I think there are a large number of shares on the Australian share market that are great candidates for a buy and hold investment.

Some of these shares come with dividends that I think have the potential to grow significantly in the future.

Three that I like are listed below:

Collins Foods Ltd (ASX: CKF)

This KFC operator’s shares currently provide investors with a trailing fully franked 3.4% dividend. I think the company’s recent expansion into an underpenetrated European market will provide it with a long runway for growth that ultimately leads to sizeable increases in its earnings and dividend. This could make it a great option for patient investors.

Orora Ltd (ASX: ORA)

This packaging giant’s shares offer investors a trailing partially franked 3.5% dividend at present. I thought the Amcor Limited (ASX: AMC) spin-off delivered a strong half-year result last month and believe it is capable of more of the same in the future. As does Goldman Sachs, which believes that the growth of ecommerce and the potential for it to expand into other high margin areas will allow it to grow EBIT by a compound annual growth rate of 7.5% through to FY 2020. I expect its dividend will grow at a similarly strong rate.

Premier Investments Limited (ASX: PMV)

With the company’s half-year results due to be released next week, investors may want to hold off buying shares until then. But if it delivers a strong result, as expected, then I think investors should consider snapping up shares for the long-term. Thanks largely to the international expansion of its high margin Smiggle business, I believe Premier Investments can deliver above-average earnings and dividend growth for the foreseeable future. At present the company’s shares provide investors with a trailing fully franked 3.7% dividend.

This fourth dividend share is another which I think will grow strongly over the next decade. This could make it worth holding onto for the long-term as well.

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Motley Fool contributor James Mickleboro owns shares of Collins Foods Limited. The Motley Fool Australia owns shares of and has recommended Premier Investments 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 Scott Phillips.

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