Despite what you may have heard, growth and income are not mutually exclusive. In fact, we can get a nice balance of dividends and growth from a wide variety of companies on the ASX.
With this in mind, here's a few companies which I think have a nice balance between income now, and growth for tomorrow…
Virtus Health Ltd (ASX: VRT)
Virtus is currently Australia's largest IVF provider, with clinics around the country. The company has also expanded into Ireland, Singapore and now Denmark.
Virtus has a decent market share – currently around 34% of IVF cycles in Australia. And with people having babies later in life now, the assisted reproductive technology market is expected to grow quite strongly over the coming decades.
Some low-cost providers have crept into the market and are stealing some market share away from Virtus, which could dampen the company's growth prospects. But overall, with a growing IVF market, that tailwind may well make up for any loss of market share.
The company trades on an undemanding valuation, around 14 times earnings, and a dividend yield of 4.7%, fully franked.
Sonic Healthcare Limited (ASX: SHL)
Sonic Healthcare is a medical diagnostics company which operates all over the world.
The company provides pathology, radiology and clinical services in 8 countries. Sonic has expanded over the last 30 years and is now one of the biggest pathology companies in the world.
Growth has been steady and reliable, with Sonic's earnings increasing by 4.5% per annum over the last decade. The company has also provided regular growing income to shareholders, with dividends growing at a rate of 5% per annum over the last 10 years.
Earnings are forecast to increase by 6.9% per annum over the next 2 years. Sonic currently trades for around 24 times earnings, and a dividend yield of 3% partly franked.
Foolish takeaway
Virtus currently looks like a more attractive buy, with a much cheaper valuation and higher dividend yield. I do like Sonic Healthcare as a business, it has a wonderful track record, but I wouldn't be buying at this price. For some better value picks to grow your wealth, check out the free report below.
