The ASX share market is wonderful place to put money so that it can grow from planting a seed, growing into a tree and eventually deliver us fruit each year. I believe the best ASX investments can provide a mixture of growth and dividends.
Investing in good businesses is much more compelling to me than holding cash. While both ASX shares and cash can provide passive income, it's the ASX share that can both grow payouts and their underlying value (unlocking capital growth).
There are a couple of ASX shares that I've invested significantly into because they are providing that mix of dividends, rising payouts and long-term capital growth. In a world that's rapidly changing with technology and other changes, the below stocks are providing what I'm looking for – owning growing businesses offering good payouts.
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Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
Soul Patts is an investment business that has been operating for over a century and it has paid a dividend every year in that time.
The company has been diversifying its portfolio for decades and now its assets are spread across numerous sectors including building products, industrial property, telecommunications, resources, electrification, swimming schools, agriculture, credit and so on.
Each year, the business is adding to its portfolio with the cash that is paid to Soul Patts through dividends, distributions and interest. The new investments and growth of existing investments are helping increase the value of this ASX share.
Long-term growth of the company's cash flow has helped its annual ordinary dividend increase every year since 1998, which is the longest-running dividend growth streak on the ASX.
It currently has a grossed-up dividend yield of around 3.5%, including franking credits.
MFF Capital Investments Ltd (ASX: MFF)
MFF Capital is another investment business, though it's only a faction of the age of Soul Patts. MFF spent most of its life as a pure listed investment company (LIC) focused on international shares. It recently acquired a funds management business, giving it an operating business, which came with additional investment professionals and research expertise.
The vast majority of MFF's value is still tied up in its portfolio of high-quality international shares and the investment team remain focused on high-quality businesses with strong competitive advantages and long-term growth prospects. We're talking about names like Alphabet, Mastercard, Visa, Meta Platforms, Amazon and Microsoft.
I believe MFF's portfolio is capable of producing commendable returns in the coming years and the ASX share has the investment flexibility to pick out new compelling investments in the coming years.
The business has grown its annual dividend every year since 2018, meaning it has already delivered several years of consecutive annual dividend growth.
It currently has a grossed-up dividend yield of 5.3%, including franking credits, at the time of writing.
