Some ASX shares can provide a good mixture of growth and income for your portfolio.
In this era of ultra-low interest rates it’s hard to find good sources of income. And with the coronavirus there are few shares that cab provide good growth right now.
Here are three ideas to consider:
Ansell Limited (ASX: ANN)
Ansell is one of the businesses involved in fighting the spread of the coronavirus. It makes a number of products like gloves, masks and protective suits.
However, despite the coronavirus impacts, the company recently reaffirmed its FY20 guidance for earnings per share (EPS) to be in a range of US$1.12 to US$1.22.
Even before the coronavirus Ansell was predicting solid mid-single digit growth so I think that Ansell is well placed to grow whatever happens next. I think it’s a good, defensive ASX share to provide growth and income.
In terms of dividend income it has a trailing dividend yield of 2.3%.
Magellan Global Trust (ASX: MGG)
Magellan Global Trust is a listed investment trust (LIT) which invests in some of the best shares in the world. You get indirect exposure to shares you just don’t find on the ASX. Some examples are Microsoft, Alphabet, Visa, Mastercard, Tencent, Alibaba and Facebook.
Many of its holdings are quality growth shares with great balance sheets. If you owned them yourself you wouldn’t get much income. But Magellan Global Trust can target a 4% distribution yield by paying out a portion of the long-term capital growth each year.
As the net asset value (NAV) of Magellan Global Trust grows, the distribution will rise over time with it. This is an attractive combination of growth and income from an ASX share.
Kogan.com Ltd (ASX: KGN)
Kogan.com is an online retailer that also has a third party marketplace. It also distributes cheap services like telecommunications, superannuation, insurance and so on.
With everyone limiting their exposure to the outside world it’s eCommerce businesses like Kogan.com that are getting a lot of the pent up demand. In April 2020 Kogan.com saw revenue growth of over 100%. ‘Adjusted’ earnings before interest, tax, depreciation and amortisation (EBITDA) grew over 200%.
It also announced this morning that it has acquired Matt Blatt, a furniture and homewares retailer which generated around 20% to 25% of its $46.5 million revenue online in FY19. It will be an online only retailer under Kogan.com’s leadership.
Kogan.com has grown its dividend each year over the past few years and currently has a grossed-up dividend yield of 2.6%.
Are all of these ASX shares buys for income and growth?
Kogan.com and Ansell have both performed strongly after the initial market selloff as investors realised the strength of those businesses. I don’t think they’re not cheap any more. But my ASX share pick for income and growth is Magellan Global Trust – it’s diversified, has the biggest yield and gives exposure to many of the best businesses in the world.
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Returns as of 7/4/2020
More reading
- Kogan.com share price on watch following acquisition news
- ASX small-cap sector rallies strongly during April
- These ASX shares are set to dominate the post-COVID-19 economy
- This ASX growth share has rocketed 150% higher since March. Is it too late to invest?
- With Aussie wages set to fall, could ASX 200 shares follow?
Motley Fool contributor Tristan Harrison owns shares of MAGLOBTRST UNITS. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia has recommended Ansell Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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