This morning the Coles Group Ltd (ASX: COL) share price traded ex-dividend for its upcoming 27.5 cents per share fully franked dividend.
Eligible shareholders can now look forward to being paid this dividend in just over a month on 29 September.
While many shareholders will no doubt use these funds as a source of income in this low interest rate environment, others may wish to reinvest them into the share market.
But which shares should you reinvest these funds into? Here are a couple to consider:
Dicker Data Ltd (ASX: DDR)
If you’re interested in earning more income in the future, then you might want to consider buying Dicker Data shares. It is a leading wholesale distributor of computer hardware and software in the ANZ region. It has been an exceptionally strong performer in FY 2020 thanks to a surge in demand for remote and virtual working solutions.
This has put the company on course to deliver stellar profit and dividend growth in FY 2020. Pleasingly, due to its strong market position, favourable tailwinds, and its growing number of vendors, I believe its growth can continue for the foreseeable future. Based on the current Dicker Data share price, it offers investors an attractive forward 4.7% fully franked dividend yield.
Xero Limited (ASX: XRO)
Those looking to reinvest these funds into growth shares might want to consider Xero. It is one of the world’s leading cloud-based business and accounting software providers. I’ve been very impressed with the way the company has consistently grown its sales and subscriber numbers at a strong rate over the last few years. This was once again the case in FY 2020, with Xero delivering more explosive growth.
A 26% jump in subscribers to 2.285 million underpinned a 30% increase in operating revenue to NZ$718.2 million and a 29% lift in annualised monthly recurring revenue (AMRR) to NZ$820.6 million. The good news is that Xero still has a very long runway for growth over the next decade. Especially given its modest market share in the United States market. At the end of FY 2020, Xero had just 241,000 subscribers in North America. This compares to 914,000 subscribers in a significantly smaller ANZ market.
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More reading
- Is the Xero Ltd share price a buy at $100?
- ASX giants say cutting staff hours will save jobs
- 2 top ASX shares I would buy now for shareholder value and dividend growth
- ASX 200 up 0.7%: Big four banks storm higher, Blackmores disappoints, Xero acquisition
- Xero share price hits record high following $80 million Waddle acquisition
James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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