There are few shares that I believe are worth being in every investor's portfolio. To pass the test those shares have to pay a dividend, display market-beating growth potential and be non-cyclical in nature.
Here are two shares that I think fit the bill:
Altium Limited (ASX: ALU)
Altium is one of the leading technology businesses on the ASX. It provides electronic PCB software for engineers to design the products of the future. Some of its major clients include Tesla, Space X, Amazon and NASA.
Management see a potential future where the winner takes all in the industry, like Microsoft did with the Office products.
The company is predicting a lot of growth between now and 2025, which means there could be a lot more revenue and profit margin growth. I have been impressed by the company's continuous improvement towards an earnings before interest, tax, depreciation and amortisation (EBITDA) margin of 35%.67
I believe Altium should be in everyone's portfolio because it could be one of the best ways to benefit from the growing Internet of Things development.
It currently has a dividend yield of 1.2% and it's trading at 43x FY19's estimated earnings,
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
Soul Patts is one of the oldest businesses on the ASX, it has been going for over a century.
It is often called the Australian Berkshire Hathaway. It's a pretty good comparison because they operate in similar fashions. Soul Patts owns large stakes of businesses on the ASX and it also owns a number of businesses outright.
Being an investment conglomerate means it can adapt its portfolio to the change to the economic conditions and the best investment possibilities.
It has beaten the ASX over the long-term and the short-term. I think it could continue to do so due to its long-term investment style, quality & aligned management and its diverse portfolio.
It's currently trading at 21x FY20's estimated earnings with a grossed-up dividend yield of 2.9%.
Foolish takeaway
I wouldn't describe either of these shares as good value – there's a price for quality. I'd really like to buy them both around 20% cheaper than the current level. However, over the next five years I think could both beat the market from the current price. If I had to pick one it would be Altium with where it will be by 2025 in mind.
