2 great ASX All Ords shares that I'd like to buy

Business growth and dividends are two key ingredients.

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If you're on the lookout for promising  All Ordinaries Index (ASX: XAO) shares, it's always wise to consider companies with high-quality fundamentals.

To many, that means growing sales and profits. Some look at dividend growth and yield instead. For others, it is a combination of both ingredients that makes the recipe 'just right'.

In my opinion, investors seeking high-quality business franchises with respectable dividends might want to consider Helia Group Ltd (ASX: HLI) and Wesfarmers Ltd (ASX: WES). Both ASX All Ords shares could present compelling opportunities for capital growth and passive income going forward.

Helia Group Ltd (ASX: HLI)

Helia Group is an insurance provider specialising in lenders mortgage insurance (LMI), which protects lenders against potential defaults. By providing LMI, the ASX All Ords share enables homebuyers to purchase properties with as little as a 5% deposit.

Helia's business model and management brought in strong financial results and respectable dividends last year.

In FY 2023, Helia reported net profit after tax (NPAT) of $275.1 million, a 37% increase. Management revised guidance for this year and now projects FY 2024 insurance revenue of $360 million to $440 million (from $427 million previously).

Despite this double-digit profit growth, the ASX All Ords share trades at a price-earnings ratio (P/E) of 4.86 times at the time of writing.

That is a 73% discount to the iShares Core S&P/ASX 200 ETF (ASX: IOZ), which currently trades at a P/E of 17.96. This exchange-traded fund (ETF) tracks the other major Australian index, the S&P/ASX 200 Index (ASX: XJO). There is no ETF that tracks the All Ords Index.

Helia's dividends have also been rising. In FY 2023, the company paid 59 cents per share, including a special unfranked dividend of 30 cents per share. The previous year, it paid a 36.5 cents per share dividend.

Based on its current price of $4.21 at the time of writing, Helia offers a trailing dividend yield of 6.89%. Compared to many high-interest savings accounts that currently pay 4%–6% interest per annum, this puts Helia at a relative advantage for income-seeking investors.

Wesfarmers Ltd (ASX: WES)

Wesfarmers is a diversified conglomerate with a strong portfolio of retail, healthcare, and chemical brands.

The ASX All Ord share's diverse operations include renowned franchises like Bunnings and Kmart. As I've noted previously, this diversification helps mitigate risks and creates multiple sources of value.

Broker Goldman Sachs expects 6% and 11% growth in revenue and earnings before tax and interest (EBIT) growth, respectively, for Bunnings in FY 2025/2026. This, it says, could generate annual free cash flow of $2.5 billion–$3 billion for the company.

This is healthy, in my opinion, as it can fund Wesfarmers' other high-growth categories, like health and lithium.

Meanwhile, as my colleague Tristan reported, UBS noted four "improvements" Bunnings could deliver. These were improvements in the supply chain, real estate efficiency, customer experience, and commercial offering. Goldman and UBS value Wesfarmers at $68.80 and $66 apiece, respectively.

The company's recent fully franked dividend of $1.94 per share offers a trailing yield of 2.99% after growth of 3.4% year over year.

ASX All Ords shares takeaway

Helia Group and Wesfarmers could be two sensible ASX All Ords shares to consider for your portfolio.

My view is that Helia is trading cheap, while Wesfarmers provides diversified operations and promising growth prospects.

Remember that past performance is no guarantee of future results and that you should consider your own personal financial circumstances before making any decisions.

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Wesfarmers. The Motley Fool Australia has positions in and has recommended Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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