2 ASX shares I would buy for growth and income

Here's why I would buy Medibank Private Ltd (ASX: MPL) and 1 other share for both ASX growth and dividend income

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

There are many reasons to invest in ASX shares, but most investors either go for 'buy low, sell high' capital growth, or dividend income.

Whilst both routes to returns are equally valid and potentially lucrative, I always aim to find those rare ASX shares that can consistently deliver a combination of both.

Here are 2 that I think are looking attractive as long-term investments today.

Macquarie Group Ltd (ASX: MQG)

Macquarie is the largest ASX bank outside the 'big four', but I think that label doesn't really do this company justice. Most of Macquarie's earnings come from its asset management business, which has been growing steadily over the past few years. Also worth mentioning is the 'MacCap' investment banking division, which has been making waves in the renewable energy and agriculture spaces recently.

MQG shares have returned more than 140% to investors in capital growth alone over the past 5 years – but Macquarie also offers a solid dividend yield. On today's prices, this dividend will nab you a 4.43% yield. Since Macquarie's dividend has been growing at a healthy pace since 2012, I think investors can expect plenty of increases in the years ahead.

So overall, I think Macquarie's past performance points strongly to a stock that will continue to deliver both growth and income well into the future.

Medibank Private Ltd (ASX: MPL)

Medibank is Australia's largest private health insurer but has only been a public company since 2014, when it was kicked out of the loving arms of government ownership and privatised. Since it was floated at $2.17 a share, Medibank has consistently banked capital growth and today an MPL share will set you back $3.20.

This company has also been consistently growing its dividend at a healthy pace since floating. During FY16 (its first full year of dividend payments), the company paid out 10.3 cents per share in payments. Fast forward to FY19 and MPL shares would have netted you 15.6 cents per share. That's an income growth trajectory that I'd like to be a part of!

Foolish takeaway

I think both of these companies' track records of capital growth and rising dividends show how potentially lucrative investing in both can be for investors. Both companies are on my watchlist and I would seriously consider buying in during any share price dips this year.

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. 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.

More on ⏸️ Dividend Shares

falling healthcare asx share price Mesoblast capital raising
⏸️ Dividend Shares

Sonic Healthcare (ASX:SHL) dividend rises 7%, share price falls after FY21 results

Triple digit profit growth and a solid dividend was not enough to impress investors on Monday.

Read more »

A smiling woman with a handful of $100 notes, indicating strong dividend payments
⏸️ Dividend Shares

The Adairs (ASX:ADH) dividend more than doubled in FY21

A record financial result will see a generous dividend paid out to Adairs shareholders.

Read more »

A businessman on a road raises his arms as dollar notes rain down on him.
⏸️ Dividend Shares

The Newcrest (ASX:NCM) dividend boosted 129%

Newcrest marks its sixth successive year of increasing dividend payments to shareholders

Read more »

Happy couple laughing while shopping in supermarket
52-Week Highs

August has been a great month so far for the Woolworths (ASX:WOW) share price

We take a look at how shares in the supermarket giant have been performing ahead of the company's full-year results

Read more »

wine glass full of coins
⏸️ Dividend Shares

The Treasury Wines (ASX:TWE) dividend bumped up by 60%

Here's how Treasury Wines dividends for FY21 have stacked up.

Read more »

Young boy cries and covers eyes with torn money on table
⏸️ Dividend Shares

The Origin (ASX:ORG) dividend has dropped 20%

What's happened to Origin's dividends?

Read more »

two people hold a sheet above their head while making a bed in a room featuring homewares.
Retail Shares

How did the Adairs (ASX:ADH) share price respond last earnings season?

The homewares retailer will be looking for another year like last year when it releases its FY21 earnings tomorrow.

Read more »

Two men excited to win online bet
Share Market News

Why the Tabcorp (ASX:TAH) dividend was boosted by 32%

The strong performance of Tabcorp's business will see a combined FY21 dividend of 14.5 cents.

Read more »