These ASX shares are growing their dividends at a solid rate

About Latest Posts James MickleboroJames Mickleboro has been a Motley Fool contributor since late 2015. After studying economics at university …

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If you're looking for dividend shares that could grow strongly in the future, then you might want to check out the ones listed below.

While they may not offer the largest yields on the share market, they have the potential to grow materially over the 2020s. Here's what you need to know about them:

Bapcor Ltd (ASX: BAP)

Bapcor is the Asia Pacific's leading provider of vehicle parts, accessories, equipment, service and solutions. It has a growing network of stores across the region under brands such as Autobarn, Burson Auto Parts and Midas.

The company has been a very positive performer in recent years and has continued this strong form in FY 2021 thanks to strong demand for used cars. And with semiconductor shortages unlikely to be resolved any time soon, the supply of new vehicles looks set to remain tight for some time to come. This bodes well for its near term growth.

Pleasingly, thanks to its strong market position and its international expansion plans, its longer term growth looks positive as well. This appears to have put Bapcor in a position to continue growing its dividend for the foreseeable future.

Citi is positive on the company and currently has a buy rating and $9.50 price target on its shares.

The broker is forecasting fully franked dividends of 19 cents per share in FY 2021 and then 22 cents per share in FY 2022. Based on the current Bapcor share price of $8.25, this will mean yields of 2.3% and 2.5%, respectively.

Integral Diagnostics Ltd (ASX: IDX)

Integral Diagnostics is a medical imaging service provider that operates from a total of 72 radiology clinics. This includes 26 comprehensive sites.

As with Bapcor, Integral Diagnostics has been a solid performer in FY 2021. For example, during the first half of FY 2021, it reported a 29.5% increase in revenue to $170.7 million and a sizeable 61.1% jump in net profit after tax to $23.2 million.

Goldman Sachs appears confident that it still has a long runway for growth. This is expected to lead to increasing dividend payments in the coming years.

The broker is forecasting dividends per share of 11 cents in FY 2021, 14 cents in FY 2022, and 15 cents in FY 2023. Based on the latest Integral Diagnostics share price of $5.09, this will mean fully franked yields of 2.15%, 2.75%, and 2.95%, respectively.

Goldman has a buy rating and $5.50 price target on the company's shares.

James Mickleboro does not own any shares mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bapcor. The Motley Fool Australia has recommended Integral Diagnostics Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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