Some investors separate growth and income into different buckets.
I understand that. A fast-growing company may reinvest heavily and pay little income, while a mature dividend stock may offer yield but limited growth.
But I do not think investors always have to choose. Some ASX shares can offer a useful blend of both.
Two that stand out to me today are named below.
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Wesfarmers Ltd (ASX: WES)
Wesfarmers is not the highest-yielding stock on the ASX, but I think its approximate 3% dividend yield looks appealing when combined with the quality of the business.
For me, Wesfarmers is a growth and income stock because it has more ways to win than many large companies.
Bunnings remains the obvious powerhouse. It has a strong market position, a trusted brand, and exposure to home improvement spending across both consumer and commercial customers.
But the broader group is what makes Wesfarmers more interesting. Kmart continues to benefit from its value positioning, which I think is particularly useful when households are watching their spending. Officeworks gives exposure to education, small business, and technology spending. Wesfarmers Health is still being reshaped and could become a more meaningful contributor over time.
Then there is the lithium exposure through WesCEF, which adds a very different growth angle.
Overall, I think Wesfarmers shares are a buy because the company has a long record of reinvesting sensibly, improving its businesses, and returning cash to shareholders. That combination is exactly what I like in a long-term holding.
Lovisa Holdings Ltd (ASX: LOV)
Lovisa is the higher-growth pick of the two.
The jewellery retailer has built a global rollout model that still looks very powerful to me. It sells affordable fashion jewellery, which gives it a relatively simple product proposition, but the execution is what makes the business stand out.
Lovisa can open stores in many different markets, keep formats small, and use its buying, merchandising, and pricing model to generate strong returns. That gives the company a long runway if it keeps executing well internationally.
Its first-half results showed total revenue rising 23.3%, supported by store network growth and comparable store sales growth. Lovisa opened 85 new stores during the half and finished the period with 1,095 stores across more than 50 markets.
Importantly for income investors, it also lifted its interim dividend to 53 cents per share, 50% franked. That is why I think Lovisa is so interesting as a growth and income stock.
The dividend yield of around 3.2% is already useful, but the real appeal is that the income could grow over time if the global store rollout continues successfully.
There are risks. Fashion retail can be competitive, consumer spending can shift, and international expansion is never automatic.
But Lovisa's model has already travelled across many markets, and I think that gives investors a reason to stay optimistic.
Foolish takeaway
If I were looking for ASX shares that offer both growth and passive income, Wesfarmers and Lovisa would be high on my list.
They are very different businesses, but both offer dividends today and the potential for a larger business tomorrow.
