3 small cap shares with growing dividends

Although blue chip shares such as Telstra Corporation Ltd (ASX: TLS) and Woolworths Group Ltd (ASX: WOW) offer investors generous dividends, I don’t expect much by way of growth from them in the short-term unfortunately.

So if you’re on the lookout for dividends that have strong growth potential I would suggest you check out the three small cap shares listed below. Here’s why I like them:

Baby Bunting Group Ltd (ASX: BBN)

This baby products retailer currently has a market capitalisation of approximately $190 million after a 25% decline in its share price over the last 12 months. This decline was the result of Baby Bunting suffering from the clearance activities of its closing competitors. While this means FY 2018 will be a disappointing year for the company, I expect it to be just a short-term headwind that could turn into a tailwind in FY 2019 when competition lessens. This may allow the company to grow its dividend again next year. At present Baby Bunting’s shares provide a trailing fully franked 4.9% dividend.

Collection House Limited (ASX: CLH)

Collection House is a receivables management company on the rebound after a couple of tough years. Business has been booming so much that Collection House recently revised its guidance for FY 2018. It now expects earnings per share of 18 cents to 18.5 cents, representing growth of up to 24% on FY 2017. Based on the company’s traditional payout ratio of approximately 55%, this could mean a dividend of around 10 cents per share. This equates to a sizeable 6.7% yield based on its last close price.

Money3 Corporation Limited (ASX: MNY)

Money3 is a financial services company which has successfully pivoted away from payday loans to secured auto loans. Although the company’s loan book has been growing at an impressively strong rate, it still only has a very small share of the secured automotive finance market. If the company can continue its fine form, it could have a significant runway for growth ahead of it. Which could make it a real dividend star of the future. At present Money3’s shares offer a trailing fully franked 3.8% dividend.

OUR #1 dividend pick to grow your wealth over the new financial year is revealed for FREE here!

Financial year 2019 is here and The Motley Fool’s dividend detective Andrew Page has revealed his must buy dividend share to grow your wealth in 2018.

You might not know this market leader's name, but it's rapidly expanding into a highly profitable niche market here in Australia. Even better, the shares boast a strong, fully franked dividend that should balloon in the years to come. In other words, we're looking at the holy grail of incredible long-term growth potential AND income you can watch accruing in your account in real time!

Simply click here to grab your FREE copy of this up-to-the-minute research report on our #1 dividend share recommendation now.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended 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.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…


The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!