On Tuesday supermarket giant Coles Group Ltd (ASX: COL) is paying eligible shareholders a 27.5 cents per share final dividend.
If you're not planning to use these dividends for income and would rather invest them back into the share market, then I would suggest you consider one of the ASX shares listed below.
Here's why I would buy them:
Appen Ltd (ASX: APX)
If you're looking to invest the funds into growth shares, then I would suggest you consider Appen. It is the global leader in the development of high-quality, human-annotated training data for machine learning and artificial intelligence. Its team of over 1 million crowd-sourced workers allows the company to collect and label high volumes of image, text, speech, audio, and video data. This data is then used to build and improve artificial intelligence and machine learning models.
Given the growing importance of artificial intelligence and machine learning for businesses and governments, I expect demand for its services to grow strongly in the future. This should put Appen in a position to continue growing its sales and earnings at a strong rate for some time to come.
Rural Funds Group (ASX: RFF)
If you're interested in generating even more dividends, then I would suggest you look at this agriculture-focused property group. I'm a big fan of Rural Funds due to its very long leases and blue chip tenants. For example, at the end of FY 2020, the company's 61 properties had a weighted average lease expiry of 10.9 years, with approximately 78% of revenue coming from corporate or listed tenants.
Importantly, these leases include periodic rental increases which are designed to put the company in a position to increase its distribution by 4% each year. This looks set to be the case in FY 2021, with management intending to pay shareholders 11.28 cents per share. Based on the current Rural Funds share price, this works out to be a 4.8% yield.
