In today's low cash rate world many investors will be rightly focused on dividends and who can blame them with standard term-deposit rates at the National Australia Bank Ltd (ASX: NAB) of just 2.4%.
Unless you're already in the retirement stage of life it might be best to look for shares that offer some growth potential as well as big dividends.
And I'm not kidding when I say I know of two growing business that offer big yields and cheap valuations. Moreover, both these businesses enjoy the tailwinds of the healthcare and cloud computing industries to support their growth.
These kind of businesses tend to be at the little researched smaller end of the market which can offer up some superb opportunities.
And as it's nearly Christmas, I thought I'd share the names of these two companies.
So let's take a quick look at them.
Dicker Data Ltd (ASX: DDR) is a founder-led business that is a wholesale distributor of IT and computer hardware across Australia and New Zealand. Just today it announced a promising new distribution deal in New Zealand with Lenovo, and it is also now successfully expanding into the booming cloud services space.
It pays dividends quarterly with a trailing fully franked yield of 6.3% and price earnings ratio around 14. At $2.26 the shares look attractive for a still-growing business that enjoys the tailwinds of the information technology sector.
Lifehealthcare Group Ltd (ASX: LHC) is a medical equipment distribution business that supplies Australian surgeons with the equipment required to conduct common operations performed on a daily basis. Given the growth of the ageing population and likely solid demand growth for its mainly prosthesis products it has an attractive outlook.
The shares sell for $2.40 and with almost the only broker covering the business (Bell Potter) recently updating their forecasts for earnings per share of 23.6 cents and dividends of 13 cents it trades on just 10x estimated earnings with a 5.5% yield.
I recently took advantage of their slightly lower prices to snap up some bargains, although at today's valuations both these businesses still look like Christmas gifts for investors in my opinion.
In fact when the Foolish trading rules permit, I might go shopping for more shares given their big yields…
Read on for one more big dividend idea……
