I think the small side of the market is a great place to look for dividends with the potential to grow strongly over the next decade.
Three which I think are worth a closer look are listed below. Here's why I like them:
Adairs Ltd (ASX: ADH)
This home furnishings retailer could be a great small cap dividend share to consider buying this month. An impressively strong full year result in FY 2018 allowed the Adairs board to declare a total dividend of 13.5 cents per share, up 68% year on year. This works out to be a trailing fully franked 6% yield at the last close price. Considering the early success the company has had with its homemaker store strategy and its thriving online business, I expect this dividend could continue growing strongly over the next couple of years at least.
Money3 Corporation Limited (ASX: MNY)
Another top performer in FY 2018 was this financial services company thanks to the strong growth of its secured auto loans business. Money3 posted a 16.6% increase in its secured auto loan book during the year, ultimately leading to a 10.1% increase in net profit after tax to $32 million. The positive performance allowed the Money3 board to increase its dividend by 68% to 9.5 cents per share. This means that its shares now offer a trailing fully franked yield of 4.4%. Pleasingly, I believe this could grow again in FY 2019 after management advised that it was expecting good growth in secured loan receivables.
Wellcom Group Limited (ASX: WLL)
Wellcom is a production and content management company which could be worth a closer look. In FY 2018 it posted full year revenue of $108 million and net profit after tax of $11.7 million. This was a 9% and 10% increase, respectively, on FY 2017's result and was driven partly by a number of new contracts wins. Based on its normalised dividend (excluding a special dividend) of 21 cents per share, Wellcom's shares currently offer a trailing fully franked 4.2% yield.
