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2 ASX dividend growth shares to buy for 2020 and beyond

Everyone who invests on the ASX loves a good dividend, but sometimes dividend stocks only become obvious when most of the company’s growth is the rear view mirror. Take Commonwealth Bank of Australia (ASX: CBA) for example. Sure, CBA’s juicy dividend yield is obvious to everyone today, but back in 1991 when CommBank first hit the ASX for $5.40 a share, it wasn’t so apparent.

Of course, the real winners are those who bought CBA shares anyway, and today (if they were lucky enough to not sell) would almost get their investment back every year in dividends – CommBank’s latest payout was $4.31 per share.

So here are 2 ASX dividend growth shares that might be the next CommBank.

CSL Limited (ASX: CSL)

CSL is already one of the largest companies on the ASX, so this comparison with Commonwealth Bank isn’t entirely fair. Nevertheless, I think CSL’s dividend is one of the most under-appreciated aspects of this stock.

CSL only started to pay a dividend back in 2013 (of US$1.02 per share), but since then has already grown the payout substantially and recently just rewarded shareholders with a US$1.85 payout for 2019. This translates into a compounded growth rate of around 15%. With consistently rising profits and a payout ratio of just 45%, this company has plenty of petrol left in the tank for higher payouts down the road.

Altium Limited (ASX: ALU)

Altium is a minnow compared with CSL, but that’s part of the reason I like it so much – plenty of room for growth! Altium makes software that assists in the engineering and design of printed circuit boards – an essential component of most electronic devices. Its flagship product Altium Design has proven remarkably popular, with over 40,000 subscribers to date. Altium hopes to grow to 100,000 by 2025, which looks achievable judging by its 13% growth rate last year.

Although Altium is a hot software stock, it has also been quietly growing its dividend on the side – from 12 cents per share in 2014 to 34 cents per share this year. Seeing such a large growth runway in front of this company, together with its track record of dividend payments, makes Altium another dividend growth stock I would love to own for 2020 and beyond.

Foolish takeaway

With these 2 ASX shares, I think we have 2 companies that could become dividend giants down the road – maybe even the next CommBank. Both shares look expensive today, but that’s the price of quality for you!

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Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of Altium. 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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