Unlike term deposits, dividend shares offer investors the opportunity to generate a decent level of income, plus the very real potential of capital appreciation.
Dividend shares are particularly popular amongst retirees, especially those with their own SMSF.
Even better, companies paying fully franked dividends offer investors a generous tax break, often leading to a tax refund.
Both these two ASX companies are members of the All Ordinaries index. Not only do they pay fully franked dividends, their dividends are growing.
Nick Scali Limited (ASX:NCK) has cultivated a desirable brand and has benefited from the housing boom which has coincided with the roll-out of its store network.
In February the furniture retailer reported first half sales increased by 8 per cent, with profits jumping 15 per cent higher to $23.5 million.
The company is expecting profits for the full year to June 2018 to be 5 to 10 per cent higher than the previous corresponding period, with FY19 expected to benefit from the substantial increase in the store network being established during FY18.
Nick Scali declared a fully franked interim dividend of 16 cents per share, a 14 per cent increase on the previous year.
With the Nick Scali share price trading at $6.91, the shares trade on a trailing fully franked dividend yield of 5.2 per cent, or 7.4 per cent grossed up for franking credits.
Dicker Data Ltd (ASX:DDR) is a computer software and hardware wholesale distributor.
In April the company reported first quarter revenue jumped 14 per cent higher, with profit before tax soaring almost 23 per cent higher to $9.2 million. Dicker Data reiterated full year pre-tax profit guidance of $42.5m for FY18.
Dicker Data pays quarterly dividends, and in March said its proposed total fully franked dividend to be paid in FY18 is 18 cents per share, an increase of 9.8 per cent from FY17.
With the Dicker Data share price trading at $3.01, the shares trade on a FY18 fully franked dividend yield of 6.0 per cent, or 8.5 per cent grossed up for franking credits.