The economy is chugging along just fine at the moment, but wage growth is low. Instead of waiting for your employer to give you a pay rise, create your own by investing in companies paying increasing dividends to shareholders.
Here are three for your watch list…
Growthpoint Properties Australia Ltd (ASX: GOZ)
This real estate investment trust (REIT) is bucking the trend of the boring, often lacklustre performance of the REIT sector.
Growthpoint owns a large portfolio of office and industrial properties to the tune of $3.3 billion, having just acquired another building in West Perth for $91 million. Growth is locked in with the property portfolio having contracted rental increases that average 3.3% per annum.
Growthpoint has been regularly increasing dividends for shareholders over the years, with the most recent payment increasing by 3.3%, and the company has just guided for FY19 distribution growth of 3.6%.
Shares currently trade on a yield of 6%.
Transurban Group (ASX: TCL)
Transurban’s cashflow has been marching upwards for years from its growing portfolio of toll-roads in Melbourne, Sydney, Brisbane, Washington and more recently Canada.
Since 2009, distributions have grown by almost 11% per year on average. In the most recent year, the distribution was increased by 8.7%, and over the next year, shareholders are forecast to get another increase of 8%.
Transurban also has some major projects underway, like the West Gate Tunnel Project in Melbourne, expected to be completed in 2022, which should boost future cashflow and underpin further growth in income for shareholders..
Shares currently trade on a yield of 4.5%.
Ramsay Health Care Limited (ASX: RHC)
Ramsay Health Care has fallen out of favour with the market of late, over concerns about slowing growth. The global hospital operator changed full-year guidance from 8%-10% profit growth, to a still solid 7% growth.
Ramsay’s growth may have slowed somewhat, but the story of an ageing population and growing demand for healthcare and hospitals is far from over. The future still looks bright and with shares now down about 25% over the past year, it could be a good entry point.
The company has been rewarding shareholders with regular pay rises over the past 10 years, with the dividend growing by 17% per annum. Going forward, that’s unlikely to continue, but with shares now trading for around 19 times earnings, large growth isn’t required.
The current dividend yield is around 3.5% grossed up, and the dividend is forecast to increase by 8% over the next two years.
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Motley Fool contributor Dave Gow owns shares of Growthpoint Properties Australia, Ramsay Health Care Limited, and Transurban Group. The Motley Fool Australia owns shares of and has recommended Transurban Group. The Motley Fool Australia has recommended Ramsay Health Care 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.