Analyst who called a 5 bagger Dividend stock now telling investors to check out these five income ideas

Dividend harvesting

By: Greg Maxwell

These could be the best dividend stocks on the ASX, and yet most people don't even know they exist…

According to 20-year investing veteran, investors could be missing out on some of the best dividend stocks – for one simple reason.

Big companies like BHP and Telstra hog the business news.

He says, 'There are many people who will just buy the banks and Woolies, Telstra because that's all they know.'

Which leaves many lesser known, but potentially more lucrative companies left out of the spotlight… and investors' portfolios.

Dividend investing expert, Edward Vesely, whose unique approach to income stocks saw him make a blockbuster call in January 2019 where he recommended a little-followed ASX company called Dicker Data.

Just over two years later, that dividend stock ended up as a 5 fold gain when it was later sold in August 2021.

Ed concedes while many investors look to the big names as a way to generate income – There are many opportunities for everyday investors to find companies that have the potential to not just pay out dividends – but also increase those dividends as well.

This unique approach sees Ed trawl through mountains of data in search of what he thinks are the best income stocks available on the ASX today.

"First and foremost, with dividend investing you're not just buying shares – you're buying a perpetual income stream… So, like with any income stream, you want to see it growing year after year."

Just like a company he first recommended in July 2019.

He says "it held dividends between 2010 and 2012. Other than that, it's increased its dividend every year since 1997!"

But Ed looks for one more crucial factor…  that is, uncovering dividend paying companies that are still growing.

Something investors will rarely see with the biggest stocks on the ASX.

When you can uncover dividend stocks with double digit annual growth potential, that's when things could really turbocharge a retirement portfolio.

And while that may sound hard to believe…

Ed and his team have an uncanny knack for uncovering stocks that do just that year after year – posting annual returns like 15%, 13% and -19%.

And remember, that's not just stocks picked for their growth potential alone. These are chosen for their generous (and often fully franked) dividend payments – where growth is seen as an added 'bonus'.

Just like a company he's described as a 'quiet achiever' — Supply Network. At the time of its recommendation in May 2018, shares were selling for around $3.18 and it paid a fully franked dividend.

Since then, it's returned an incredible 40% a year and still pays out a fully franked dividend. All while its share price is now sitting around $22.00– more than tripling.

Or what about in March 2019, when Ed uncovered PWR Holdings as a prime dividend stock. Paying a healthy dividend its share price has also grown – returning 27% a year to investors who took his advice.

That's a total return of 246% in just a few short years.

Of course, those examples are some of the very best calls Ed has ever made. And when it comes to investing, no one ever gets it right 100% of the time – so naturally he's made calls on stocks that have lost money as well.

But when it comes to finding ASX companies that:

  … Pay out healthy (and often Fully Franked) dividends.

  … Have a record of increasing those dividends

  … And also have a chance of double-digit growth every year

… it's good to know they do in fact exist.

It's just if you're only reading about stocks in your daily newspaper or watching the business news on TV.

Chances are, you'd probably have never heard of them.

But the good news is Ed Vesely releases the names and research of his five top dividend buys every month inside his Motley Fool Dividend Investor service.

These are stocks he thinks are the very best ones for income seeking investors to buy right now.

Stocks that pay healthy dividends and also have the potential to grow in the future.

So any investor looking to build a "perpetual income stream" to help fund retirement – and also wants more potential upside – should be taking a very close look at the dividend shares Ed is recommending right now.

Simply enter your email address below to get all the details on how you can access these names.

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Returns as of 23 May 2024. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Dicker Data, PWR Holdings, and Supply Network. The Motley Fool Australia has positions in and has recommended Dicker Data, PWR Holdings, Supply Network, and Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. For more information about The Motley Fool see our Financial Services Guide. Please remember that investments can go up and down. Past performance is not necessarily indicative of future returns. Performance figures are not intended to be a forecast and The Motley Fool does not guarantee the performance of, or returns on any investment. Any money back guarantee is strictly limited to the subscription price paid for the product.