ASX growth shares can be an excellent option for investors in retirement because of their ability to both grow and pay dividends.
Most retirees still have many years left of needing money to fund their needs. I think it's wise to still own investments that can deliver growth because we may need that money for another 20 or 30 years.
However, I'd also want to own businesses with generous dividend payout ratios, so we're still getting a good level of passive income during that period of ownership.
I think the two ASX growth shares below are very appealing based on what I'm looking for.
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GQG Partners Inc (ASX: GQG)
GQG is a fast-growing, US-based fund manager that offers a broad range of investment options across US shares, international shares, global shares and emerging market shares.
The company's investment strategies have each outperformed their respective benchmarks over the long term, which is appealing for helping grow funds under management (FUM) organically and attracting new client money to manage.
GQG reported an impressive 46.5% rise in average FUM to US$139.5 billion in the six months to 30 June 2024, with net flows of US$11.1 billion for the period. This helped revenue increase 53.1% to US$363.1 million, and distributable earnings increased 53.7% to US$209.9 million.
I believe the long-term investment performance of the funds will help attract FUM growth for years to come.
The ASX growth share's half-year dividend was hiked by 46.3% to US5.66 cents per share. According to the estimate on Commsec, it's forecast to pay an annual dividend per share of 7.8% in FY25. That's an attractive yield for retirement, in my opinion.
Lovisa Holdings Ltd (ASX: LOV)
Lovisa is a retailer of affordable jewellery for younger shoppers. The ASX growth share already has a global store network and it's rapidly growing its store numbers further.
In FY24 alone, the business grew its store count by 99 to reach 900 global stores. It has a large number of stores in Australia and the US but a relatively small number of stores (for the respective population) in a large number of markets, including China, Vietnam, Taiwan, Canada, Spain, Mexico, the UK and Poland.
I believe the company's revenue and profit margins can increase significantly as its store count grows in the coming years. We saw this in action in FY24.
In FY24, revenue rose 17.1%, net profit increased 20.9%, and the dividend per share was hiked by 26% to 87 cents per share.
According to the forecast on Commsec, the Lovisa dividend yield could rise to 2.6% in FY26. I think there could be significant profit and dividend growth in the subsequent years.
