I like to own ASX shares that are growing, but I also like to own ones that pay dividends because it's a way for investors to benefit from the rising profits these businesses are generating.
Ideally, we don't want to trigger any capital gains tax (CGT) events if we don't need to, because that can mean handing over money to the ATO unnecessarily, disrupting the compounding potential of the portfolio.
I'm going to talk about two ASX shares that I've long-admired. I'm expecting rising profits and dividends from them over the long-term.
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Australian Ethical Investment Ltd (ASX: AEF)
Australian Ethical describes itself as one of Australia's leading ethical investment managers. It aims to provide investors with investment management products that align with their values and provide long-term, risk-adjusted returns.
One of the main reasons why I think this business is such a compelling fund manager is because it provides customers with a superannuation option. This is compelling due to the consistent contributions that Aussies make to their superannuation, giving the company regular net inflows.
In the update to 31 December 2025, the company reported that it finished the period with funds under management (FUM) of $14.1 billion, with the business experiencing $0.11 billion of net inflows in its superannuation segment.
The company has been working on delivering efficiencies and scalability, which will hopefully help its margins in the coming years.
The ASX share has also pointed out that it continues to be recognised for its leadership in ethical investing, winning Money Magazine's 2026 best of the best awards for the best ESG superannuation product and best ESG pension product.
The forecast on CMC Invest suggests the business could pay an annual dividend per share in FY26, which would be a grossed-up dividend yield of 5.9%, including franking credits (at the time of writing).
Propel Funeral Partners Ltd (ASX: PFP)
Propel is the second-largest funeral operator in New Zealand and Australia. At the last count, it has 208 locations, including 41 cremation facilities and nine cemeteries.
One of the main tailwinds for the business is that death volumes are expected to increase in the coming years because of a growing and ageing population.
According to Propel, Australian death volumes are expected to increase by an average of 2.8% per year between 2025 to 2035 and 2.4% per year between 2036 to 2045. In New Zealand, death volumes are expected to increase by 2% per year between 2026 to 2035 and then 1.8% between 2036 to 2045.
The ASX share had a market share of 9% in 2024, compared to InvoCare's 21% market share. There is room for the company to expand its position in ANZ with both organic growth and acquisitions.
In the first quarter of FY26, the company delivered 3% growth of both revenue and operating profit (EBITDA) year-over-year. It benefited from a 2.7% rise of the average revenue per funeral and a 1% increase in funeral volumes.
According to the forecast on CMC Invest, it's expected to pay an annual dividend per share of 15.5 cents in FY27, which would be a grossed-up dividend yield of 4.5%, including franking credits (at the time of writing).
