Do you have $1,000 that you want to invest into ASX shares right now?
It could be an opportune time to invest because shares are a lot lower than they were in February 2020. It takes a brave person to invest in times like this. But it could be a good long-term choice because ultimately we want to buy share prices at lower levels not high prices.
But where are you supposed to invest? Here are two ideas:
For growth: Altium Limited (ASX: ALU)
There aren’t many businesses that are extremely well positioned to ride through this period. I think Altium is one of those rock-solid businesses. At 31 December 2019 it had no debt and it had US$80.7 million of cash.
Not only does it have excellent cashflow, but in the FY20 half-year result it reported that its earnings before interest, tax, depreciation and amortisation (EBITDA) margin increased again to 39.7%, up from 38.8%.
In that same result the electronic PCB software business reported revenue growth of 19% with a 5-year compound annual growth rate (CAGR) of 20%. The dividend keeps growing and it’s aiming for strong long-term growth of its Altium Designer seats and its revenue to 2025.
Its recent release of its cloud offering, Altium 365, is well-timed for this difficult period.
Altium is now trading at 30x FY22’s estimated earnings with a dividend yield of 1.5%.
For income: Brickworks Limited (ASX: BKW)
Brickworks is one of the most reliable dividend shares on the ASX. It has maintained or grown its dividend every year for over four decades.
Today, the company announced its FY20 half-year result. In the report the Board of Brickworks decided to increase its dividend by 5% to 20 cents per share. Its true that its underlying profit dropped 37% and the statutory profit fell 49%, but things look positive for the long-term once this is over.
Its underlying assets are diverse and its market capitalisation is backed by the inferred asset value of just its investments and property division. The whole building products business is a bonus to the valuation.
It now has a grossed-up dividend yield of 5.2%.
I think both businesses look attractive for long-term buys. Brickworks looks great value with a good yield, whilst Altium’s price has come down a lot in recent weeks which is good for capital growth focused investors. I already own Altium, so I’d prefer to add Brickworks to my portfolio today.
If you have more than $1,000 to invest or want a different idea, you should read this free report about some of the best shares on the ASX.
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Motley Fool contributor Tristan Harrison owns shares of Altium. The Motley Fool Australia owns shares of Altium. The Motley Fool Australia has recommended Brickworks. 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.