In a normal investing environment, investors would often concentrate on either ASX growth shares or ASX dividend shares. In doing so, they are making a choice to pursue wealth by either capital growth or dividend income. But in the current stock market, both growth and income have become scarce commodities.
Just today, National Australia Bank Ltd (ASX: NAB) – a longtime dividend favourite of income investors – announced a hefty cut to its dividend payments.
In light of this, I think it’s a good time to discuss which shares might be able to provide both ongoing growth and income for investors in 2020.
Here are 2 ideas:
Argo Investments Limited (ASX: ARG)
Argo is one of the oldest listed investment companies (LICs) on the ASX, having been founded back in 1946.
It aims to provide a conservative portfolio of ASX shares that produce consistent and fully franked dividend payments for its investors as well as modest capital growth. This isn’t the kind of investment that will make you rich overnight, but it is the kind that (I believe) offers investors reliability and prudent capital management – 2 qualities that I think investors should appreciate in a time like this.
Argo has a diverse and broad portfolio that should rise in value alongside the S&P/ASX 200 Index (ASX: XJO) over time. Therefore, I think Argo is offering a good deal for investors today, with a share price nearly 30% off of its all-time high and a trailing grossed-up dividend yield of 6.67%.
Washington H. Soul Pattinson & Co Ltd (ASX: SOL)
‘Soul Patts’ is an investing conglomerate even older than Argo – it was founded back in 1903. Despite its age, I think this is a share that would carry its investors well into 2020 and beyond. It owns a range of top-notch businesses like TPG Telecom Ltd (ASX: TPM) and Brickworks Ltd (ASX: BKW) in its portfolio that should continue to produce healthy returns for the company.
In addition, Soul Patts has the best record of dividend payments on the ASX in my opinion – having delivered a dividend every year since its inception. Not only that, it has also increased said dividend for the last 20 years in a row. Right now, SOL shares are trading with a trailing grossed-up yield of 4.83%. Combine these dividends with its healthy portfolio of good-quality companies and I think Soul Patts is a great long-term stock to hold for both growth and income
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Motley Fool contributor Sebastian Bowen owns shares of National Australia Bank Limited and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company 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.