Some ASX shares are known for their dividends and others have been known for growth. There are a select number of stocks that could provide a mixture of both.
Not every business makes profit. Not every company that makes a profit pays a dividend.
However, these two businesses are expected to demonstrate long-term growth and could be decent options for income too:
Ansell Limited (ASX: ANN)
Ansell describes itself as a world leader in providing health and safety protection solutions that “enhance human wellbeing”. The company says that the world always needs better protection so it’s constantly researching, developing and investing to manufacture and distribute the best products through innovation and technology.
It operates in two main business segments, industrial and healthcare. It operates globally.
Ansell has a history of growing its dividend and 2021 was a year of significant growth for the business as it helped the world protect and fight against COVID-19. In FY21 the ASX share managed to grow its profit by 48.5% to $246.7 million and the dividend was increased by 53.6% to 76.8 cents per share.
Whilst healthcare saw a large increase in revenue production volumes, the industrial segment also saw organic revenue growth of 7.1% with a recovery in ‘mechanical’ and continued growth from ‘chemical’.
The company was able to bring capacity expansion online, with 12 new glove lines and several new body protection lines live which will support growth for FY22 and beyond.
Ansell is making sure it’s well positioned for the post COVID-19 environment by continuing to invest in its sales force, customer experience, product innovation and digital capabilities.
However, FY22 could see lower healthcare demand depending on COVID-19 impacts.
Morgans currently rates Ansell as a buy, with a price target of $41.87 – that’s more than 30% higher than where it is right now. At the current Ansell share price, it’s valued at around 12x FY23’s estimated earnings with a projected FY23 yield of 3.5%.
Kogan.com Ltd (ASX: KGN)
Kogan is a leading business in the Australian and New Zealand e-commerce spaces with its website businesses of Kogan and Mighty Ape.
The ASX share had been experiencing higher costs in relation to excess inventory after overestimating how much customer demand there was going to be.
However, Kogan says it has now solved these issues. Costs and margins are now expected to be better than a few months ago and management are expecting that the business can continue to grow its online market share.
Between FY19 and FY21 it grew its market share from 2.1% to 2.7%. It’s growing market share in a growing online market. It’s estimated that in FY21, Australians spent $48.6 billion on online retail, a level that was around 13.3% of the total retail trade estimate.
Kogan has a five-year goal of $3 billion of gross sales to FY26. That would be a compound annual growth rate (CAGR) of over 20% from FY21.
Credit Suisse currently rates the Kogan share price as a buy, with a price target of $13.88. That’s a potential upside of more than 50% over the next several months.
The broker puts the Kogan share price at 22x FY23’s estimated earnings with a grossed-up dividend yield of 3.3% in FY23.
The post 2 ASX shares that could be buys for both growth and dividends appeared first on The Motley Fool Australia.
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More reading
- Top ASX shares to buy in January 2022
- In the ‘dog basket’: 6 ASX shares that could rebound in 2022
- 3 reasons why the Kogan (ASX:KGN) share price could be a smart buy
- These are the 10 most shorted ASX shares
- Forget Christmas! Could these ASX retail shares be set for a Boxing Day bonanza?
Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Kogan.com ltd. The Motley Fool Australia owns and has recommended Kogan.com ltd. The Motley Fool Australia has recommended Ansell Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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