Forget Commonwealth Bank of Australia (ASX: CBA), in the S&P/ASX 300 (Index: ^AXKO) (ASX: XKO), there are many promising companies offering dividends and growth.
Why the ASX 300?
The ASX 300 is filled with companies worth around $300 million to $500 million. In my opinion, this is the perfect stomping ground for an investor focused on the long term.
Let me explain…
Some large superannuation funds and professional fund managers cannot invest in shares outside the ASX 300 because they are not considered 'investment grade'. They have to wait for companies to perform well and enter this 'sweet spot' before buying. As a result, research analysts are few and far between.
For example, 16 analysts currently follow Commonwealth Bank of Australia shares and Woolworths Limited (ASX: WOW) shares.
By contrast, an average of three analysts 'followed' the companies listed below, over the past three months. More analysts are coming on board.
What that means for us individual investors is that we have a far better chance of unearthing a bargain amongst these small-cap shares. In addition, if the company is well run and sells a good service or product, there is a much longer runway for growth.
Best of all, we don't have to pass on dividends if we buy these companies. Indeed, many of these smaller companies also choose to reward shareholders with a regular income stream.
2 S&P/ASX 300 growth + dividend shares
RCG Corporation Ltd (ASX: RCG)
RCG is the owner of The Athlete's Foot, Hype DC, Platypus and other shoe stores. It is also the exclusive distributor of leading footwear brands in Australia and New Zealand, including Merrell, Saucony, Timberland and more.
The $540 million company has grown largely by acquisition, with some concerns that its opportunities for this type of growth are now limited. The looming arrival of online giants has also spooked some investors.
However, with RCG shares down 32% in three months, its shares might be compelling value at these levels. It offers a 5.8% fully franked dividend. You can read more here.
Class Ltd (ASX: CL1)
Class is a smaller company again, with a market capitalisation of just $340 million. Its shares yield a dividend of 1% with full franking.
Class is a software company that is heavily leveraged to the long-term growth of the Australian finance industry. It designs and develops software that can be accessed from any device (smartphone, tablet or computer) anywhere there is an internet connection.
The company's core products are Class Portfolio, a platform for advisers to monitor their client's investment portfolios, and Class Super, a product for advisers and accountants to administer client self-managed superannuation funds (SMSFs).
Foolish Takeaway
Outside the 'usual suspects' like Commbank and Woolies, you can find some great ASX shares buried a little further down the market. Class and RCG shares both appear very tempting at these prices.
