There are some leading S&P/ASX 200 Index (ASX: XJO) dividend shares that are compelling options for income.
Plenty of businesses pay a dividend or distribution. But only some of them have major growth plans and/or a history of dividend reliability.
These two are potential options:
Bapcor Ltd (ASX: BAP)
Bapcor is a leader in the auto parts industry with businesses like Burson and Autobarn.
It is one of the ASX 200 dividend shares with the longest records of consistent dividend growth for investors, going back several years. It even slightly increased its dividend during the difficult COVID-19 year of 2020.
Whilst the business has been impacted by various COVID-19 effects, the company is expecting further growth in the coming years. The average age of vehicles continues to rise, requiring more maintenance.
Over the next five years Bapcor wants to grow its overall network footprint from 1,100 to 1,500 locations. That's an increase of around 36%. The company also wants to invest in store refurbishments and relocation.
It also wants to grow its own brand products program which can come with higher profit margins.
Bapcor also has a plan to deliver supply chain initiatives and invest in technology.
Asia could also be a growing driver of growth including its Burson network in Thailand as well as its investment in Tye Soon.
The forecast on CommSec suggests another dividend in FY22 to $0.22 per share. If that happens, it would be a grossed-up dividend yield of 4.5%.
Wesfarmers Ltd (ASX: WES)
Wesfarmers is another ASX 200 dividend share that is committed to paying investors a good source of income.
It has a number of businesses that are among the leaders in their sectors including Bunnings, Catch, Kmart, Target and Officeworks.
In FY21, Wesfarmers grew its full year ordinary dividend by 17.1% to $1.78 per share, after a 16.2% increase of continuing underlying earnings per share (EPS) to $2.14. On top of that, Wesfarmers also decided on a $2 per share return of capital.
The company continues to look for investment opportunities to increase its earnings and open up new growth avenues.
For example, it is part of the Mt Holland lithium project. The demand for lithium is expected to significantly increase over the next decade as demand explodes for electric vehicles and other battery uses.
Wesfarmers is also currently in the middle of a takeover battle for pharmacy business Australia Pharmaceutical Industries Ltd (ASX: API). If Wesfarmers is successful against Woolworths Group Ltd (ASX: WOW), then API will form part of a new health, beauty and wellness division of Wesfarmers.
According to Commsec, at the current Wesfarmers share price, it's going to pay a grossed-up dividend yield of 4.75% in FY23.
