I'm a firm believer that investors need to be more forward-thinking when it comes to dividends. An example I like to use to demonstrate this is pizza chain operator Domino's Pizza Enterprises Ltd. (ASX: DMP).
Anyone that buys its shares today should expect to receive a paltry 1.4% dividend in FY 2017 according to CommSec, well below the market average of 4.4%. At this rate a $10,000 investment would yield just $140.
But for investors that bought its shares 10 years ago at the low price of $3.19, it is a very different story. This year these investors should expect to receive a staggering yield on cost of 31%. This means that for every $10,000 invested a decade ago, investors will receive $3,100 in dividends.
I believe this shows that if you make buy and hold investments in companies with strong growth potential and a history of increasing their dividends, there's a good chance that you will be rewarded handsomely in the future.
With that in mind here are four shares which I believe could be amongst the best dividend shares in 2025:
Ardent Leisure Group (ASX: AAD)
Although its dividend is expected to fall this year, at the current price Ardent Leisure is forecast to provide an unfranked 5.2% dividend. But moving forward I believe the company has strong growth potential thanks to its profitable Main Event centres in the United States. Currently there are 27 centres operating, but management is targeting upwards of 200 in total.
Mantra Group Ltd (ASX: MTR)
I expect that inbound tourism will continue to increase at a solid rate until at least 2025. This puts this leading accommodation provider in a great position to grow its earnings and dividend. With its shares already providing a fully franked 3.7% dividend, by 2025 investors could be looking at a lucrative yield on cost in my opinion.
Retail Food Group Limited (ASX: RFG)
The master franchisor of a collection of brands including Donut King and Gloria Jean's is already a generous dividend payer and is expected to provide a fully franked 4.8% yield in FY 2017. Thanks to its international expansion plans I believe Retail Food Group can grow both its bottom line and dividend at a steady rate for years to come.
SEEK Limited (ASX: SEK)
SEEK is expected to provide a fully franked 2.8% dividend this year. Because of its market-leading position in the Australian market and fledgling businesses across the world, I believe SEEK has solid growth ahead of it. This should allow it to continue growing its dividend for the foreseeable future, which makes it a great buy and hold investment in my opinion.
