3 under the radar dividend shares

Whilst shares such as Telstra Corporation Ltd (ASX: TLS) and Wesfarmers Ltd (ASX: WES) are well-known for being generous dividend payers, many income investors are hesitant to invest in them at the moment due to their questionable business performances.

The good news for these investors is that there are a number of dividend shares flying under the radar that I think are worthy alternatives.

Here are three that I like:

Baby Bunting Group Ltd (ASX: BBN)

This baby products retailer has had a tough 12 months due to the closure and subsequent clearance sales of some of its competitors. Whilst there are concerns that these tough trading conditions could last a little longer if Toys R Us shuts its Babies R Us stores, I do expect in the long-term that Baby Bunting will benefit greatly and seize the vacated market share. This could make it worth considering a patient buy and hold investment today, especially with its shares providing a trailing fully franked 5.4% dividend.

Dicker Data Ltd (ASX: DDR)

This founder-led computer software and hardware wholesale distributor’s shares may have been on a tear over the last 12 months, but I still think they are trading at an attractive price. This year the company expects to deliver a 6% increase in earnings and grow its dividend 10% year-on-year to 18 cents per share. This equates to a forward fully franked 6.1% yield based on its last close price.

Money3 Corporation Limited (ASX: MNY)

I think that this financial services company is one of the best dividend options in the small cap space. The success of its transition from pay day loans to secured auto loans has been a huge success and recently led to the company reporting a 12.3% increase in half-year net profit after tax to $15.5 million. Considering the company still only has a 2% share of the second-hand automotive finance market, I think Money3 has a long runway for growth ahead of it. Money3’s shares currently offer investors a trailing fully franked 4.1% dividend.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited, Telstra Limited, and Wesfarmers 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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