When it comes to making buy and hold investments, I believe one thing in particular that investors ought to look out for is whether a company has the ability to grow its dividend in the future.
A company that grows its dividend at an above-average rate can turn an average yield into a fantastic yield in just a few years.
Three shares which I believe could be capable of achieving this are listed below:
Amaysim Australia Ltd (ASX: AYS)
Despite this growing telco company's shares trading close to their all-time high, they currently provide a trailing partially franked 4.5% dividend. Last year the company launched low-cost unlimited Amaysim-branded NBN plans, something which I think could lead to solid profit growth in FY 2018. Especially if it can successfully cross-sell its NBN offering to some of the 800,000 households using its mobile services.
Blackmores Limited (ASX: BKL)
Although this health supplements company was forced to cut its dividend in FY 2017, a return to form means that it is widely expected to resume its growth again this year. At present Blackmores' shares may only provide investors with a trailing fully franked 1.6% dividend, but I believe this could rise significantly over the next few years and become a meaningful part of an income investor's portfolio.
Helloworld Ltd (ASX: HLO)
At present this travel company's shares offer investors a trailing fully franked 2.8% dividend. But with management confident that demand for its integrated service offering will continue to develop and grow, I feel Helloworld could become a dividend star in the future. In FY 2018 EBITDA is forecast to increase upwards of 21% year-on-year and I expect its dividend could grow at a similar rate.
