With the silly season only a few short days away, I think there is still time to make one more smart decision before many of us switch off for the year and enjoy our holidays.
Below are 2 ASX shares I would consider buying before Christmas to see you into the new year and beyond.
Altium Limited (ASX: ALU)
The Altium share price has been pushing higher, rising over 5x the last few years to sit at $35.68 at the time of writing.
Altium has over 30 years' experience in printed circuit board (PCB) design and provides electronic PCB design software for entry level designers up to professionals. It is debt free, saw recent revenue growth of 23% while impressively also reporting a record earnings before interest, tax, depreciation and amortisation (EBITDA) margin of 36.5%.
Possibly my favourite statistic is that Altium has been strongly growing market share at the expense of its competitors. Even better is that this market share growth appears sticky as designers prefer not to change software frequently and has led to the company generating 56% of its revenue from recurring sources.
Altium has diversified global earnings with record revenue growth of 37% recently reported in China where it currently only receives 7% of its revenue, leaving it plenty of room for future growth.
Altium looks set to continue its growth with a stated goal of achieving $500 million in revenue by 2025. I have personally found Altium's software to be user friendly and can see why it has been a high performer. I would be happy to buy and hold Altium shares now with a long-term view, however it doesn't come cheap as it currently trades with a price-to-earnings (P/E) ratio of 88.
Brickworks Limited (ASX: BKW)
Brickworks has a market cap of just over $2.8 billion, which places it well into the ASX 200. It is Australia's leading brickmaker and has recently been expanding its share of the market in the United States (US). Here, brick volume sales are seeing an increase thanks to the recovery in the housing market. In addition, Brickworks has shown bricks to be the preferred material in most locations throughout the US.
Brickworks also has a stunning history of dividend payments where it has maintained or increased its dividend every year since 1976. For FY19, it paid out 57 cents in dividends which, including franking credits, equates to a grossed-up yield of 4.28% at today prices. Additionally, this payment history looks healthy and set to continue, as it only equals a pay-out ratio of 36.5% based on underlying earnings per share of $1.56.
Brickworks has 4 operational divisions – Investments, Property, BP Australia and BP North America. It is this last division, BP North America, which is currently the smallest based on market value/net tangible assets where I believe it has the largest growth potential due to the above reasons.
