Due to recent declines in their respective share prices, I think the dividends on offer from Telstra Corporation Ltd (ASX: TLS) and National Australia Bank Ltd. (ASX: NAB) are hard to say no to right now.
But given their outlooks, I wouldn’t expect a dividend increase any time soon.
Whereas the four small cap dividend shares listed below could be poised to increase theirs significantly in my opinion.
Here’s why I think they are worth a closer look:
Codan Limited (ASX: CDA)
This radio communications, metal detection, and mining technology company’s shares currently provide investors with a trailing fully franked 4.5% dividend. I’ve been impressed with the company’s performance over the last 12 months and expect it to build on this thanks to new product releases and a global licensing agreement with U.S. giant Caterpillar for its Minetec business.
Dicker Data Ltd (ASX: DDR)
In FY 2018 this wholesale computer hardware and software distributor expects to raise its annual dividend to a fully franked 18 cents per share. Based on its current share price, this equates to a yield of 6.3%. I feel this is a very attractive yield in this low interest environment. This yield, its positive outlook, and robust business model could make Dicker Data a great option for investors.
Money3 Corporation Limited (ASX: MNY)
Money3 would be up there as one of my favourite small cap shares. While its shares are certainly not the bargain buy they were a year ago, I still see a lot of value in them. Especially given the early success that its secured auto loans business is having. The good news is that the company still only has a 2% share of the secured second-hand automotive finance market, which could mean plenty more growth ahead over the coming years. The company’s shares provide a trailing fully franked 4.3% dividend at present.
Shriro Holdings Ltd (ASX: SHM)
Shriro is a kitchen appliance and consumer products company which I think could be destined for a bright future if its US expansion plans are a success. At just 9x trailing earnings and offering a trailing fully franked 8% dividend, I think an investment in its shares provide a compelling risk/reward.
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.
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 and Telstra Limited. The Motley Fool Australia owns shares of National Australia Bank 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.