Right now it seems that many of the most popular dividend shares on the ASX such as Telstra Corporation Ltd (ASX: TLS) are looking more likely to cut their dividends than keep them on hold or grow them.
The good news is that there are some dividend shares that have more positive outlooks.
Three which I think could be dividend stars of the future are listed below. While they may not have the biggest yields today, in a few years it could be a very different story.
Collins Foods Ltd (ASX: CKF)
Collins Foods is a leading KFC franchisor with operations in Australia and in Europe. Although the company’s recent full-year result was a little underwhelming, it did demonstrate that its international expansion is working. Given the size of the European opportunity, this could mean Collins Foods is in a great position to grow its earnings and dividend at a solid rate over the long-term. At present its shares offer investors a trailing fully franked 3.1% dividend. Incidentally, UBS recently upgraded the KFC restaurant operator’s shares to a buy rating with a target price of $6.30.
Money3 Corporation Limited (ASX: MNY)
I think that this financial services company could be a great option for investors thanks to its generous and growing trailing fully franked 3.9% yield. Due to the early success of its move into secured auto loans, I think Money3 could be a great buy and hold investment. Especially given that its share of the secured second-hand automotive finance market is estimated to be just 2% at the moment.
Premier Investments Limited (ASX: PMV)
One of my favourite retail shares would have to be this conglomerate. This is largely due to two key brands in its portfolio – Smiggle and Peter Alexander. These two brands have been growing at an impressive rate and show little sign of slowing. So much so, they account for almost half of its total sales now. The Smiggle brand in particular has been a real standout performer and most recently reported a 26.7% increase in global half-year sales to $170.7 million. I expect more of the same in FY 2019 thanks to its international expansion. This could put it in a position to continue growing its earnings and dividend at a solid rate for some time to come. Its shares provide a trailing fully franked 3.4% dividend currently.
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Returns As of 6th October 2020
Motley Fool contributor James Mickleboro owns shares of Collins Foods Limited. 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.