Today is payday for shareholders of banking giant Commonwealth Bank of Australia (ASX: CBA).
Eligible CBA shareholders will be paid the bank's fully franked $2.00 per share interim dividend later today.
Whilst some shareholders may use these funds as a source of income, I suspect that many will look to reinvest them back into the share market.
Here's where I would invest these dividends:
Aristocrat Leisure Limited (ASX: ALL)
I think that this leading gaming technology company's shares are in the bargain bin at the moment and would be a good place to invest your dividends. At 19x estimated forward earnings, I think Aristocrat Leisure is one of the best value growth shares on the ASX due to the strong growth potential of its core pokie machine business and fast-growing mobile and social gaming business. In respect to the latter, the company is investing heavily on customer acquisition this year in an attempt to boost its daily active users. If this is a success then it is likely to lead to a significant increase in recurring revenues.
Super Retail Group Ltd (ASX: SUL)
If you're looking for more dividends then I think Super Retail Group would be a great option. Despite the tough trading conditions in the retail industry, the retail group posted an 8.9% increase in net profit after tax in the first half of FY 2019. Pleasingly, this strong form continued into the second half, with management revealing that like for like sales were up strongly across the group during the first six weeks of the half. I believe this has put Super Retail in a great position to deliver a strong full year result and grow its dividend further. At present its shares offer a trailing fully franked 6.5% dividend.
Xero Limited (ASX: XRO)
Another growth share that I think would be well worth considering is this cloud-based business and accounting software provider. I believe the quality of its software, its global expansion, and the shift to online accounting means Xero has a significant runway for growth ahead of it. In addition to this, I've been impressed at the way the company continues to deliver strong top line growth. During the first half, Xero's average revenue per user increased 6% to NZ$31.09 per month. Combined with an increase in subscriber numbers, this led to total operating revenue growing 37% to NZ$256.5 million.
