Balancing growth and income is a delicate balance when investing in ASX shares. Although there are rare ASX companies out there that can and do provide both capital growth and dividend income for their shareholders, many others get hung up trying to deliver one, the other or both. This can be very damaging for shareholders over the long term, as the fortunes of companies like Westpac Banking Corp (ASX: WBC) have recently shown.
So here are 2 ASX shares that I think are striking the right balance with providing both growth and income today.
2 ASX shares I would buy for both growth and income today
WAM Global Ltd (ASX: WGB)
WAM Global is my fist ASX share to buy for growth and income today. This company is a listed investment company (LIC), which means it’s really an investment vehicle that buys and sells shares on behalf of its shareholders. In WAM Global’s case, this involves scouring the world’s share markets for undervalued growth companies. It currently holds a diverse mix of international shares, which include (as of 31 August) Microsoft Corporation (NASDAQ: MSFT), Tencent Holdings Ltd (HKG: 0700), Electronic Arts Inc (NASDAQ: EA) and Hasbro Inc (NASDAQ: HAS).
I like WAM Global as a strong dividend growth share. It only started life back in 2018, but since then, it has rapidly amassed a substantial profit reserve and has begun paying a rapidly-rising stream of fully franked dividends. Its last announced dividend (to be paid on 30 October) will come in at 4 cents per share (cps). That’s 33% higher than its 2020 interim dividend of 3 cps and a 100% increase on 2019’s final dividend of 2 cps.
That gives WAM Global a trailing dividend yield of 3.33% on current prices, or 3.81% if we annualise the 4 cps dividend. Given this rapid rate of acceleration for this company’s payout, I’m very confident that WAM Global will continue to deliver both growth and income well into the future.
CSL Limited (ASX: CSL)
CSL is my second growth and income share to consider today. This company is a healthcare giant and also the largest company on the ASX at the current time. CSL has amassed a reputation as a large-cap growth share for many years now — evidenced by the CSL share price climbing from $88.50 in 2015 to today’s share price of $297.55 (at the time of writing).
But while on this growth runway, CSL has also been quietly growing its dividend payouts as well. Its current trailing dividend yield of 0.99% might not sound too exciting. But when you consider that CSL has raised its payouts for 7 consecutive years, including again this year, the picture starts to look more interesting.
And when you see that these increases have taken the CSL dividend from US$1.02 in 2015 to what will be US$2.02 in 2020, it starts to get very exciting. As such, I think CSL is another top ASX share to buy for both growth and income today.
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Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of WAMGLOBAL FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Hasbro and Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Electronic Arts and recommends the following options: long January 2021 $85 calls on Microsoft and short January 2021 $115 calls on Microsoft. The Motley Fool Australia has no position in any of the stocks mentioned. 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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