3 growing dividend shares with yields over 5.5%

These 3 dividend shares offer exciting income.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Income is a very important part of returns for a lot of people. Dividends are generally less volatile than share price movements and can represent some, if not all, of a person's income in retirement.

If I were to invest in dividend shares I'd want to go for businesses that have reliable dividend histories and have every chance of growing at a good rate over the coming years.

But, the potential dividend ideas also have to pay a good yield, or else I may as well keep cash in the bank.

Here are three ideas:

WAM Research Limited (ASX: WAX)

WAM Research is my favourite listed investment company (LIC) run by Wilson Asset Management. It purely looks at the quality of the underlying business rather than trying to find any value arbitrage like some of the other WAM LICs.

Over the past five years WAM Research's portfolio has returned an average of 17.4% per annum, before fees. The LIC turns this market-beating performance into a growing stream of fully franked dividends for shareholders.

It has increased its dividend every year since the GFC and it currently has a grossed-up dividend yield of 8.87%.

Tassal Group Limited (ASX: TGR)

Tassal is Australia's largest fish business with large salmon farms in Tasmania's waters and a wholesale fish business as well.

Thankfully, Australian diets are steadily improving, which includes eating more salmon. Tassal is steadily selling more fish each year which is leading to growing operating earnings.

The bonus for income investors is that growing profits results in growing dividends. Tassal trades with a low price/earnings ratio, which helps boost the grossed-up dividend yield to 5.7%.

Arena REIT No 1 (ASX: ARF)

Arena is one of the larger real estate investment trusts (REITs) on the ASX. It aims to invest in properties in growing industries. This has resulted in it owning a lot of childcare buildings and a few medical buildings.

I like Arena because it has a long weighted average lease expiry (WALE), a growing earnings profile and a forward-thinking strategy.

It has grown steadily over the past five years and now has a trailing distribution yield of 5.84%.

Foolish takeaway

For investors looking purely for quality dividends my choice would have to be WAM Research. Even though it is trading on a significant premium to NTA it has the biggest dividend by far and is steadily increasing it.

Motley Fool contributor Tristan Harrison owns shares of ARENA REIT STAPLED and WAM Research Limited. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »