When it comes to shares with growing dividends, I think the small end of the market is a great place to look. In this area of the market there are many companies on the rise with the potential to grow their dividends meaningfully in the future.
Three which I think are worth a closer look are listed below. Here’s why I like them:
Australian Vintage Limited (ASX: AVG)
This Australian wine company could be worth considering after its return to form in FY 2018. Last week the company behind the McGuigan and Nepenthe brand posted a net profit after tax of $7.7 million on revenue of $264.6 million. This was an increase of 79% and 16.9%, respectively, on FY 2017’s result. A key driver of this growth was a 31% rise in North American sales thanks to a strong increase in demand from Canada. While the company does have significant exposure to the UK and could be impacted by any Brexit-related currency devaluations, if the British pound holds up then FY 2019 is likely to be another year of profit and dividend growth. At present its shares provide a 2.6% dividend yield.
Money3 Corporation Limited (ASX: MNY)
Another strong performer in FY 2018 was this financial services company. Money3 delivered a 10.1% increase in net profit after tax to $32 million thanks largely to a 16.6% lift in its secured auto loan book. This impressive performance led to the Money3 board declaring a final, fully franked dividend of 5 cents per share, taking its full year dividend to 9.5 cents per share. This was a 68.1% increase on FY 2017’s dividend and equates to a yield of 4.6%. Pleasingly, management expects good growth in secured loan receivables again this year.
Paragon Care Ltd (ASX: PGC)
I think Paragon Care could be another good option for investors. The shares of this provider of integrated services to the health and aged care markets currently offer a trailing fully franked 4.2% dividend. While this is a generous yield already, I feel that this dividend could grow at a solid rate over the coming years thanks to the positive impact of a series of earnings accretive acquisitions and its leading position in a growing market.
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 has recommended Paragon 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.