While I think the big four banks are great options for income investors due to their generous yields, I wouldn't be expecting a huge amount of growth from them in the coming years.
So if you're looking for growing dividends, you might want to take a look at the shares below. While their yields may not be as large as the banks, I believe they have the potential to grow materially over the 2020s.
Here's why I would buy these ASX dividend shares:
Bravura Solutions Ltd (ASX: BVS)
I think this leading provider of software products and services to the wealth management and funds administration industries would be a great option for income investors. This is because I'm confident that Bravura is well-placed for growth once the pandemic passes. Especially given its growing portfolio of high quality solutions which have large addressable markets.
The main product in its portfolio is the Sonata wealth management platform. While I expect it to be the key driver of growth in the future, this should be supported by the Rufus transfer agency solution, the Garradin back office solution, and the Midwinter financial planning solution.
At present, I estimate that it will pay shareholders an 11.5 cents per share dividend in FY 2021. Based on the current Bravura share price, this equates to an attractive 3.3% dividend yield.
People Infrastructure Ltd (ASX: PPE)
Another option to consider buying is People Infrastructure. It is a leading workforce management company which has been experiencing strong demand for its innovative solutions to workforce challenges. This led to the company delivering an impressive 34.5% increase in revenue to $374.2 million and a 53.3% lift in normalised net profit after tax and before amortisation (NPATA) to $18.4 million in FY 2020.
And while its growth may moderate in FY 2021 because of the pandemic, I believe its strong growth will continue once the crisis passes. In the meantime, I estimate that it will pay shareholders a 9.5 cents per share fully franked dividend in FY 2021. Based on the current People Infrastructure share price, this gives investors an attractive 3.1% forward dividend yield.
