Most ASX shares will be placed into a ‘growth’ or ‘income’ camp when being assessed by investors or analysts. The shares may move from one cap to the other over time in investors’ minds, but no one buys Commonwealth Bank of Australia (ASX: CBA) for growth or Afterpay Touch Group Ltd (ASX: APT) for income at the end of the day.
However, there do exist ASX shares that can adequately provide both to investors. These rare shares offer strong growth rates, but also substantial (or at least substantially growing) dividend payments on top.
Here are two ASX shares that I think offer this Holy Grail.
Macquarie Group Ltd (ASX: MQG)
Macquarie is often described as ‘just’ a bank, but in reality, this company is an investing powerhouse, with its retail banking products more like a ‘side-hustle’. This is a company that is now in the top 50 global asset managers with over $500 billion in funds under management. On top of this, its MacCap and other investment divisions have allowed Macquarie to massively increase its profitability over the past decade. This is reflected in the performance of MQG shares, which have more than doubled over the past five years.
Macquarie also pays a healthy dividend, which on today’s prices translates into a yield of 4.5%. Seeing as Macquarie is currently only paying out 65% of its earnings for this dividend, I think it has plenty of room to climb going forward.
WAM Global Ltd (ASX: WGB)
WAM Global is a Listed Investment Company (LIC) that only launched in June last year. It aims to take the successful investment strategy of WAM Capital Ltd (ASX: WAM) and apply it to companies outside Australia. Seeing as WAM Capital has returned 16.8% p.a. since its inception in 1999, I have great hopes for this LIC over the long term, especially considering it currently holds top companies like American Express Co. and Diageo.
WAM Global has only just paid its inaugural dividend of 2 cents per share, but seeing as the company is enjoying strong growth and already has a profit reserve of over 13 cents per share (as of July), I’m very confident in this company’s income potential.
I think we have here two ASX companies you can buy for both income and growth. Both companies aren’t looking too expensive in my opinion either, with WAM Global currently trading at a discount to its net value. Take your pick!
The post 2 ASX shares I’d buy for both growth and income appeared first on Motley Fool Australia.
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Sebastian Bowen owns shares of WAMGLOBAL FPO. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO. 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. 2019