2 stocks I’d buy now for growth and income

Why do you invest? What do you want to achieve?

A lot of successful investing comes down to having clear goals of what you want to accomplish… and then sticking to those goals.

Warren Buffett, the billionaire investor, said in a recent interview,

“If you own your stocks as an investment—just like you’d own an apartment, house or a farm—look at them as a business. If you’re going to try to buy and sell them based on news or something your neighbour tells you, you’re not going to do well. Find a good bunch of businesses and hold them.”

Unless you’re flipping properties in a hot real estate market, your investment won’t do well.

Same goes for many stocks as well. If you want to get in and out of stocks for a quick buck, that’s fine. Some people make money that way, however most don’t.

Investing is for the long-term.

With that in mind, here are two companies that are built for the long-term and could help you hit your targets for wealth creation.

— ResMed Inc (CHESS) (ASX: RMD) produces breathing aids and respiratory devices used by individuals at home and by hospitals and healthcare providers. Many people suffer from breathing disorders and lung related problems and ResMed is a leading company in the US and Australia.

Its specialised and popular products command a premium price, so the net profit margin and earnings growth for the company are in the high double digits. That shows it’s a great business.

— For long-term dividend income, IOOF Holdings Limited (ASX: IFL) is promising. The financial services provider handles superannuation, annuities and investment trusts. Saving and investing for retirement is a top priority for many Australians, so the company can manage its customers’ investments and savings for decades.

Consensus forecasts are for earnings to increase around 12% annually for the next two years, but equally as good is the average 10% annual dividend growth that’s forecast. Offering a 5.5% fully franked yield currently, imagine what the dividend payments may be 10 years from now. You can start building wealth steadily with this stock.

Having a good mix of growth and dividend income increases the chances for smooth, reliable portfolio returns. Actually, there is one stock that could give an attractive combination of both. Top Motley Fool investment advisor Scott Phillips has just named this company his #1 dividend-paying stock for 2014-2015.

With solid growth prospects and a fat, fully franked dividend, this ASX stock could be a huge winner for your portfolio. Discover the name and code FREE by clicking here now.

Don't miss out on The Motley Fool's #1 Dividend Pick!

Motley Fool contributor Darryl Daté-Shappard does not own shares in any company mentioned. 

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