Image source: Getty Images
ASX tech shares are hot property right now but I think it pays to be selective. Much of the focus has been on the 'WAAAX' shares like Afterpay Ltd (ASX: APT) and Xero Limited (ASX: XRO).
However, there are more tech companies that are doing well in the current climate with further growth on the cards. Here are a couple of my favourite picks in the S&P/ASX 300 Index (ASX: XKO) right now.
Data#3 Limited (ASX: DTL)
Momentum has been propelling the Data#3 share price higher in recent months. Data#3 is a leading cloud computing and ICT solutions provider that is fast becoming a market leader.
The ASX tech share is up 75.3% in 2020 and 475.7% in the last 5 years. The group now boasts a market capitalisation of more than $1 billion with a 2.1% dividend yield.
I think finding ASX tech shares with a combination of dividends and growth is a tough proposition right now. The price to earnings (P/E) ratio of 43.3x is a little pricey but I believe the growth could be there to justify it.
If we continue to see more customer growth and strong revenue generation, I could see the Data#3 share price continuing to climb in 2021.
Megaport Ltd (ASX: MP1)
Megaport was founded in 2013 by entrepreneur and Nextdc Ltd (ASX: NXT) founder, Bevan Slattery. The company has grown quickly to become a leading Australian internet service provider.
Megaport offers scalable bandwidth for public and private cloud connections, metro ethernet, and Data Centre backhaul as well as Internet Exchange Services.
The Megaport share price has jumped 57.0% higher this year alone and 649.5% in the last 5 years. The company now boasts a market capitalisation of $2.5 billion and could be headed higher.
I like the fundamentals underpinning its growth including an accelerated move towards cloud technology. The group has strong monthly recurring revenue numbers and is aiming for earnings before interest, tax, depreciation and amortisation (EBITDA) breakeven in FY2021.
