Many Australian investors will see share market investing as a way of saving money for retirement and as a way of diversifying their net worth away from the strength or weakness of Australia's residential property markets. For example many Australians will own an expensive home, but have little invested in the share market, which may be a mistake given both have produced strong returns historically.
The advantage of investing for retirement over a 5 to 10 or 20-year horizon for example is that you give the power of compounding to do its work.
Ideally you want to find companies capable of growing their earnings over the long term, as growing earnings pay growing dividends, which is just what you'll need when the time comes to stop working.
Below are four excellent mid-cap growth shares that could help you to a wealthier retirement.
Credit Corp Group Ltd (ASX: CCP) is a debt collection company that has grown its share price around 110% over the past 5 years and delivered a growing stream of dividend payments. Since 2011 dividends have grown from 20 cents per share to 67 cents per share. Credit Corp also has a stable senior management team and is forecasting more growth in FY 2019.
Dulux Group Limited (ASX: DLX) recently posted a net profit uplift of 5.4% to $150.7 million over the financial year ending September 30, 2018. Its stable management team also has a strong track record and it has a good competitive position supported by defensive revenue streams as people need to paint their properties whatever the economic cycle. Dividends have grown from 20.6 cents per share in 2012 to 28 cents per share in 2018.
Idp Education Ltd (ASX: IEL) – since this for profit education and English language proficiency (IELTS) testing business listed inNovember 2015 at $2.65 per share its share price has rocketed to $9.15 today. It has a strong tailwind in the growth of English as the number one global language of professionals and demand for its services could keep soaring over the long term. It recently lifted its final dividend 18% to 5.5 cents per share, which was franked to 60%.
Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) is a New Zealand-based sleep apnea therapy treatment business that has a strong track record and large global addressable market. It has grown dividends from 9.1 cents per share in 2011 to 20 cents per share in 2018.
Foolish takeaway
If the above businesses can keep growing their dividend payouts to investors at strong rates over the long term they will probably offer excellent total returns to today's shareholders over the long term.
