The Motley Fool

3 growing dividend shares I would buy today

While I think that the Telstra Corporation Ltd (ASX: TLS) and Westpac Banking Corp (ASX: WBC) dividends are great options for investors, especially after recent declines, I’ll be the first to admit that I don’t expect either company to be growing their dividends much over the next few years.

So investors that are on the lookout for dividends with strong growth potential may want to skip Telstra and Westpac and consider one of these dividend shares instead:

Collins Foods Ltd (ASX: CKF)

At present this KFC restaurant operator’s shares provide investors with a trailing fully franked 3.2% dividend. Whilst this isn’t the biggest yield available on the local share market, I believe that it has strong growth potential thanks to the company’s expansion plans. Collins Foods has its eye firmly fixed on the underpenetrated European market. Given the size of the opportunity, if the company expands successfully then I believe it could lead to above-average earnings and dividend growth for the next decade.

Money3 Corporation Limited (ASX: MNY)

This financial services company’s shares currently offer investors a trailing fully franked 4.2% dividend. Thanks to the early success of its secured auto loans business, I think this dividend could increase significantly in the future if the company can continue to win market share. At the last count, Money3 had grown its share of the secured second-hand automotive finance market to 2%. I believe this provides the company with a huge runway for growth.

Premier Investments Limited (ASX: PMV)

This retail conglomerate’s shares may be close to an all-time high, but they still provide a generous trailing fully franked 3.6% dividend. Due largely to the runaway success of the company’s Smiggle brand and its ambitious international expansion plans, I believe Premier Investments can grow this dividend meaningfully over the next decade. Especially with the company’s e-commerce business performing ahead of expectations. Last month the company advised that total online sales grew by 71.2% during the first-half to $56 million. This puts the company on course to achieve its $100 million online sales target during the 2018 calendar year, two years ahead of schedule.

Finally, did you see this about rising dividends?

Breaking news: ASX companies set to raise dividends!

It's been a nail-biter of a reporting season here in the first half of 2018.

But the real action, in my opinion, is what companies are doing with dividends.

What does this mean for you? Well there is one stock I've found that could very well turn out to be THE best buy of 2018. And while there's no such thing as a 'sure thing' when it comes to investing - this ripper might come as close as I've ever seen.

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

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