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3 growing dividend shares with yields over 5.25%

Dividends are one of the most pleasing aspects about investing in shares. It’s so satisfying to do no work for the companies you own, yet receive a dividend every six months.

Not only that, but the income on offer from many ASX shares is a lot higher than you could possibly get from all the various bank accounts that are out there. Even the best ones only offer an interest rate of around 2.8% to 3%.

So, to solve that income dilemma, here are three decent income shares on the ASX:

Greencross Limited (ASX: GXL)

Greencross is Australia’s leading pet business. I really like its strategy of co-locating a Greencross vet inside a Petbarn.

The market has become wary of Greencross because Amazon and other online retailers are supposedly causing damage to overseas pet businesses similar to Greencross. However, Greencross is the leader at the moment and it’s growing its online retail sales strongly.

Investors should keep an eye on Greencross’ profit margins, but for now it’s still growing and offers a growing grossed-up dividend yield of 5.26%.

Tassal Group Limited (ASX: TGR)

Tassal is a large salmon farmer and it also runs a big seafood wholesaler. I like that it plays into the trend of our diets becoming steadily healthier through eating more seafood. I also like that Tassal is growing its export sales, in the first six months of FY17 it exported 11,761 HOG tonnes and in the first-half of FY18 it exported 16,908 HOG tonnes.

The company has grown its operating net profit after tax (NPAT) in each of the last five years, which has allowed its dividend to grow too. It’s currently trading with a grossed-up dividend yield of 5.84%.

NAOS Absolute Opportunities Co Ltd (ASX: NAC)

This is one of the listed investment companies (LICs) run by Naos Asset Management. The LIC looks to invest in industrial companies with market capitalisations between $400 million and $1 billion.

Aside from the odd benchmark, I think this is a quality LIC, its portfolio has grown by an average of 17.23% per annum over the last three years, before fees. It turns a lot of this solid performance into a growing, fully franked dividend – the dividend has increased each year since it started paying in FY15.

It currently has a grossed-up dividend yield of 7.54%.

Foolish takeaway

I like all three shares as dividend ideas, although I’m only a shareholder in Greencross at the moment. At the current prices I would be inclined to buy more Greencross, but the Naos LIC could also be good for investors looking for a big yield.

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Motley Fool contributor Tristan Harrison owns shares of Greencross Limited. The Motley Fool Australia owns shares of and has recommended Greencross 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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