Some of the best companies in Australia pay very generous dividends to shareholders. The franking credits are a great bonus.
Investors may like the idea of investing in up-and-coming shares before they become solid dividend options. If you can get ahead of the crowd you should be able to get growth and dividends.
Here are three stocks I think are worth buying now for future dividends:
WAM Microcap Limited (ASX: WMI)
WAM Microcap is the latest listed investment company to be launched by Wilson Asset Management.
I expect that once it has earned profit it will pay a grossed-up dividend yield at a similar level to WAM Capital Limited (ASX: WAM) and WAM Research Limited (ASX: WAX). The grossed-up yields are currently 8.71% and 7.91% respectively.
The WAM investment team are likely to produce market-beating returns too, making this an exciting prospect.
Altium Limited (ASX: ALU)
Altium is the creator of electronic PCB design software for engineers.
The development of the 'Internet of Things' is expected to increase Altium's revenue significantly over the next few years with management expecting revenue to double over the next three or so years.
If profit margins continue increasing then that could see the dividend double from its current unfranked yield of 2.45%.
Altium shares are currently trading at 24x FY18's estimated earnings.
The troubles of the telecommunications industry have been well publicised but I think TPG offers investors a lot of potential. The new mobile networks in Australia and Singapore will take a lot of investment but could turn out very profitable in the future.
TPG shares are only trading at 12x FY17's estimated earnings with a grossed-up dividend yield of 4.06%. The dividend payout ratio was only 30% for the half-year result to 31 December 2016, leaving a lot of room for increases.
Foolish takeaway
I think all three companies could offer strong dividend yields in a few years' time on the current prices. Out of the three I think WAM Microcap will probably pay the biggest and most reliable dividend as long as the investment team can continue choosing stocks well.
