What more could an Australian investor want than both growth and dividends? Some ASX shares that are indeed offering that.
I like it when ASX shares pay dividends because it means our bank account is experiencing the improvement in the profit of that business – it's not just 'on paper' returns. The more it grows, the bigger the dividend payments can be.
With that in mind, I'm going to talk about two ASX shares that I believe are likely to grow their underlying earnings and dividend significantly over the next several years.
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Pinnacle Investment Management Group Ltd (ASX: PNI)
This business makes investments in high-quality funds management businesses ('affiliates') and helps them grow by offering a number of services including client distribution services, legal, finance, compliance, seed funds under management (FUM) and plenty of other areas.
This allows the fund manager to focus on delivering strong investment returns, which is the best way to help grow its FUM.
Pinnacle's portfolio of fund managers, such as Coolabah, Solaris, Pacific Asset Management, Firetrail and Plato, has steadily grown Pinnacle's total affiliate FUM and this helped increase the underlying profit.
Performance fees can be variable, so its statutory net profit won't necessarily grow every single year. But, ongoing FUM inflows across the portfolio can help the core earnings and fund strong growth of its 'base' dividend.
The projection on Commsec suggests the ASX share's forecast earnings per share (EPS) could grow by 68% between FY26 and FY28.
This would mean it's currently trading at under 16x FY28's estimated earnings, with a potential grossed-up dividend yield of around 7.7%, including franking credits for FY28, at the time of writing.
Guzman Y Gomez Ltd (ASX: GYG)
GYG is a Mexican restaurant business, with more than 200 locations in Australia, as well as a few in Singapore, Japan and the US.
The company is delivering good sales growth at its existing restaurants, which is helping drive good (and growing) restaurant margins. In the third quarter of FY26, the business reported comparable sales growth across Australia, Singapore and Japan of 6.6%.
The ASX share also has significant plans to expand its Australian restaurant network in the coming years, which can help drive total network sales and scale benefits. At 31 March 2026, it had 242 Australian locations (up 31 year-over-year) – it wants to reach 1,000 Australian locations within 20 years.
The company's total network sales grew 19.5% to $345.9 million in the third quarter of FY26, demonstrating its compounding ability. I'm not counting on the US expansion efforts to add anything meaningful, but if it does then it could be a very useful bonus.
The projection on Commsec suggests EPS could rise by 127% between FY26 and FY28, putting the valuation at 42x FY28's estimated earnings, at the time of writing.
GYG's dividend is not expected to be huge, but it could rapidly rise in the coming years. The forecast amount for FY28 translates into a possible grossed-up dividend yield of 2.35%, including franking credits.
