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Where I would reinvest my dividends in the ASX

This morning a number of popular shares will trade ex-dividend. This includes the likes of Dicker Data Ltd (ASX: DDR), Elders Ltd (ASX: ELD), Kathmandu Holdings Ltd (ASX: KMD), Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), and WAM Capital Limited (ASX: WAM).

While eligible shareholders of these companies may want to use these dividends as a source of income to live from, others will no doubt be looking to reinvest the funds back into the share market once they are paid.

Here are three shares that I would considering reinvesting these funds into:

Accent Group Ltd (ASX: AX1)

The retail sector has been hammered in recent weeks and Accent Group’s shares have not escaped the selloff. They are down a sizeable 22% since this time last month. I think the selling has been severely overdone and could have created a buying opportunity for investors. At present Accent Group’s shares are trading at under 14x earnings and offer a generous 6% dividend yield. Though, it is worth noting that its AGM is next week and the company is likely to provide a trading update. Investors may want to wait for that release before acting.

Aristocrat Leisure Limited (ASX: ALL)

I think that this gaming technology company’s shares are great value at present after a reasonably meaningful pullback from their 52-week high. At present investors can pick up Aristocrat Leisure’s shares for around 18x estimated FY 2019 earnings, which I think offers a compelling risk/reward given the company’s strong growth potential due to its exposure to a rapidly growing mobile and social gaming market.

National Storage REIT (ASX: NSR)

Investors that are interested in reinvesting these funds into other dividend shares might want to consider National Storage. This real estate investment trust has a wide network of self-storage facilities throughout Australia and New Zealand. I believe its sizeable cash balance will allow it to continue acquiring centres, boosting its income, and ultimately its distribution over the coming years. At present the company’s units provide a trailing 5.5% distribution yield.

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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 and has recommended Dicker Data Limited and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Accent Group, Elders Limited, and National Storage REIT. 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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