Normally when investors talk about ASX shares, stocks get lumped into either a ‘growth pile’ or a ‘dividend pile’. Everyone knows that bank shares like Westpac Banking Corp (ASX: WBC) are dividend stalwarts, whereas something like an Afterpay Touch Group Ltd (ASX: APT) is your typical growth stock. Investors place a mutual exclusivity on these two focal points – no one buys Westpac shares for massive capital appreciation or Afterpay for a robust dividend yield (given Afterpay doesn’t even pay a dividend!).
But there are some rare shares out there that you can buy for a reasonable expectation of both strong growth in addition to a healthy and rising dividend income. Here are two ASX shares that I would buy for growth and income today.
Macquarie Group Ltd (ASX: MQG)
Macquarie is often called our ‘fifth bank’ but banking only makes up a small proportion of what this company does (around 10% to be exact). Macquarie is really an investment bank with a healthy $550 billion asset management business on top. Macquarie’s diversified earnings base along with a global outlook gives it far broader profit horizons than say a Westpac, which has enabled MQG shares to appreciate over 111% over the past five years. Throw in a healthy 4.66% dividend yield on current prices and you have a solid growth/income stock.
NIB Holdings Limited (ASX: NHF)
NIB is one of the largest private health insurance companies on the ASX and has displayed a remarkable growth trajectory over the last decade. We can see evidence of this in NHF shares, which have risen from about $1 in 2009 to the $7.15 mark we see today (a rise of 595%), Just this week, NIB reported revenue increases of 8.3% and profit growth of 11.8%. for the 2019 financial year, which underpins NIB’s FY19 dividend of 26 cents per share. This is up from FY18’s dividend of 20 cents per share and FY17’s 19 cents. On today’s prices, this gives NHF shares a 3.64% yield (or 5.2% grossed-up).
We can see from these numbers that NIB is a quality company that has a history of giving solid growth and income to its shareholders.
These two companies are amongst the best performers of the ASX over the past decade and beyond. I am confident that both Macquarie and NIB will continue to provide a solid income stream as well as market-beating growth well into the future.
5 stocks under $5
We hear it over and over from investors, "I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" And it's true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended NIB Holdings 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.