3 future dividend stars I want in my portfolio

Just because a company’s shares don’t provide an above-average dividend yield today, doesn’t necessarily mean it won’t be a dividend star in the future.

Three shares which I think have the potential to be future dividend stars are listed below. Here’s why I think they are well worth snapping up today for the long haul:

Domino’s Pizza Enterprises Ltd. (ASX: DMP)

I think that Domino’s Pizza has a real chance of being a future dividend star. Although at present its shares offer a trailing partially franked yield of only 2.3%, I believe this could grow significantly in the future. Over the next seven years Domino’s intends to double its store network and increase its margins meaningfully. I expect that this will lead to above-average earnings growth, with the company likely to increase its dividend in line with earnings. Furthermore, when its growth options finally come to an end, I believe the company is likely to become more dividend-focused and pay out the majority of its earnings.

Helloworld Travel Ltd (ASX: HLO)

I think this travel company is well worth considering today. Thanks to the growing demand for its integrated service offering, Helloworld delivered an impressive 39.2% increase in half-year net profit before tax to $26 million. This allowed management to increase its interim dividend by almost 17% to 7 cents per share and means its shares now provide investors with a trailing 3.2% dividend.

Macquarie Telecom Group Ltd. (ASX: MAQ)

At present Macquarie Telecom’s shares offer investors a trailing fully franked 2.7% dividend. I think the telecommunications and hosting services company could increase this dividend greatly over the next few years thanks to the impressive performance of its data centre business. That business has been booming over the last 12 months thanks to the rise of cloud computing. With demand accelerating, I think Macquarie Telecom is perfectly positioned to capture a meaningful slice of it.

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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 Helloworld Limited. The Motley Fool Australia has recommended Domino's Pizza Enterprises 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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