While a big market-beating dividend yield is undoubtedly great, I think dividends that have the potential to grow significantly in the future are even better.
Two fast-growing dividend shares that I think income investors ought to consider today are listed below. Here's why I like them:
Collins Foods Ltd (ASX: CKF)
The shares of this leading KFC operator have disappointingly gone sideways over the last few months while the market has been climbing higher. The good news here though is that it means that it isn't too late to grab hold of its shares today.
At present Collins Foods provides investors with a trailing fully franked 2.9% dividend. I expect its ambitious expansion plans both at home and abroad will result in strong earnings growth over the next few years, allowing it to continue to grow its dividend. Over the last five years Collins Foods has grown its dividend by an average of 21% per annum.
Premier Investments Limited (ASX: PMV)
The shares of the retail group behind the popular Smiggle brand currently provide a generous trailing fully franked 3.8% dividend for investors. This 53 cents per share dividend was an increase of over 10% from a year earlier and I expect a similar level of growth in FY 2018 and beyond thanks to the continued expansion of Smiggle.
The company aims to open 100 to 120 new Smiggle stores in existing markets over the next two years, as well as expand into new markets. This is expected to result in Smiggle sales exceeding $400 million by FY 2020, up from $238.9 million in FY 2017.
