I'm always looking for opportunities to buy more of my favourite ASX shares.
I like businesses that I can own for the long-term, benefit from dividends along the way and hopefully achieve good returns over time.
The two businesses I'm about to talk about are ones that have been in my portfolio for several years. I'm planning to hold them for many more years, but I'd like to own even more of these two ASX shares.
Rural Funds Group (ASX: RFF)
Rural Funds is a real estate investment trust (REIT) which owns a portfolio of farms. Those farms are spread across a number of agricultural sectors including cattle, vineyards, almonds, macadamias and cropping (sugar and cotton).
I like the idea of owning quality farms as it gives exposure to a somewhat defensive sector (we all need food), there's growing food demand as the population increases in Australia and globally, and it's a source of income.
The tenants are the ones that take on the operational risks of running the farms, Rural Funds just collects growing rental payments each year. The ASX share also owns a sizeable portfolio of water entitlements for the tenants to use.
The rent is growing. Rural Funds has rental contracts where some of the contracts have a fixed 2.5% annual increase and others are linked to CPI inflation. Some contracts also have periodic market reviews. Another thing helping the business is productivity investments at the farms.
The rental growth is helping fund a 4% annual increase of the distribution. This incremental growth is attractive to me for income stability.
Altium Limited (ASX: ALU)
Altium is one of the world's leading electronic PCB software businesses. However, it has grown to offer a number of other services such as the cloud platform Altium 365 and electrical parts search engine Octopart.
I think there are a number of positive tailwinds for the business, including the rising number of connected 'internet of things' devices. Some products, such as cars, are becoming increasingly electronic and complex.
Indeed, some of Altium's biggest subscribers are companies like Tesla, Toyota and Ford.
I think the ASX share is doing the right things to attract and retain clients, such as the shift to the cloud with Altium 365. The company says that it connects the electronics industry fragmented value chain to drive productivity and manage production risk.
Another initiative is Altimade which it says "provides cloud based smart manufacturing that will improve productivity and manufacturability of electronics hardware and manage the supply chain of components as well as production risk."
The potential for longer profit growth looks good, with operating leverage helping profit margins rise in the future. In the FY22 first half, its earnings before interest, tax, depreciation and amortisation (EBITDA) margin was 34.1%. Over the long-term, it wants the EBITDA margin to be between 38% to 40%.
Foolish takeaway
I really like both of these ASX shares, though I did buy my current positions at much lower prices than today, so I'd love to be able to buy more at an even cheaper price.
