There are many reasons to invest in ASX shares, but most investors either go for ‘buy low, sell high’ capital growth, or dividend income.
Whilst both routes to returns are equally valid and potentially lucrative, I always aim to find those rare ASX shares that can consistently deliver a combination of both.
Here are 2 that I think are looking attractive as long-term investments today.
Macquarie Group Ltd (ASX: MQG)
Macquarie is the largest ASX bank outside the ‘big four’, but I think that label doesn’t really do this company justice. Most of Macquarie’s earnings come from its asset management business, which has been growing steadily over the past few years. Also worth mentioning is the ‘MacCap’ investment banking division, which has been making waves in the renewable energy and agriculture spaces recently.
MQG shares have returned more than 140% to investors in capital growth alone over the past 5 years – but Macquarie also offers a solid dividend yield. On today’s prices, this dividend will nab you a 4.43% yield. Since Macquarie’s dividend has been growing at a healthy pace since 2012, I think investors can expect plenty of increases in the years ahead.
So overall, I think Macquarie’s past performance points strongly to a stock that will continue to deliver both growth and income well into the future.
Medibank Private Ltd (ASX: MPL)
Medibank is Australia’s largest private health insurer but has only been a public company since 2014, when it was kicked out of the loving arms of government ownership and privatised. Since it was floated at $2.17 a share, Medibank has consistently banked capital growth and today an MPL share will set you back $3.20.
This company has also been consistently growing its dividend at a healthy pace since floating. During FY16 (its first full year of dividend payments), the company paid out 10.3 cents per share in payments. Fast forward to FY19 and MPL shares would have netted you 15.6 cents per share. That’s an income growth trajectory that I’d like to be a part of!
I think both of these companies’ track records of capital growth and rising dividends show how potentially lucrative investing in both can be for investors. Both companies are on my watchlist and I would seriously consider buying in during any share price dips this year.
The post 2 ASX shares I would buy for growth and income appeared first on Motley Fool Australia.
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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. 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.
The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2020