2 ASX shares that every investor should own

I think these 2 ASX shares, including Altium Limited (ASX:ALU), should be in every investor's portfolio.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

There aren't many shares that can fit into every investor's portfolio.

Some don't offer much growth, some don't pay a dividend, some don't have good management, some are too cyclical and so on.

I think the two below shares could fit into every portfolio:

Altium Limited (ASX: ALU

Altium is one of the best of the WAAAX tech group in my opinion. It has a number of high-quality products that could become much larger businesses in the coming years. Altium Designer and Octopart have exciting futures thanks to the Internet of Things. Altium 365, a cloud offering, could really bring things together for engineers.

The electronic PCB software business generates more than half of its revenue from subscriptions, providing attractive recurring revenue at high profit margins.

It generates its revenue from across the world with growth being created in all regions. China in-particular is creating a lot of growth for Altium right now.

Altium is debt free and expenses all of its research & development costs whilst aiming to grow the dividend every year.

There's a lot to like about Altium and it's trading at 37x FY21's estimated earnings.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL

Soul Patts is an investment conglomerate that has been going for over 100 years. It has a really good long-term track record.

Over the past 15 years it has outperformed the All Ordinaries Accumulation Index by an average of 2.6% per annum. Over the past five years it has outperformed by an average of 3.1% per annum.

Soul Patts has managed to do this with management investing for the long-term in a diverse array of assets like Brickworks Limited (ASX: BKW) and TPG Telecom Ltd (ASX: TPM) and holding them whilst they become large businesses.

Technology companies are all the rage, but solid returns can be achieved in other sectors and I think Soul Patts does well at identifying those opportunities. Some of the new focuses are premium retirement living (but not regulated aged care), financial services and resources like gold and copper.

Soul Patts continues to diversify its portfolio, it's trading at 26x FY20's estimated earnings and has a grossed-up dividend yield of 3.6%.

Foolish takeaway

The share prices of both businesses are quite a bit lower than earlier in the year but I think they both have very good growth prospects. Altium might have the best chance to create the bigger returns over the next five years, but I expect Soul Patts will be around in another 100 years from now.

Motley Fool contributor Tristan Harrison owns shares of Altium and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of Altium. The Motley Fool Australia has recommended Brickworks. 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.

More on Growth Shares

a happy investor with a wide smile points to a graph that shows an upward trending share price
Growth Shares

These ASX growth shares are being tipped to smash the market

Returns of 14% to 68% could be on the cards for buyers of these shares according to brokers.

Read more »

A young male ASX investor raises his clenched fists in excitement because of rising ASX share prices today
Growth Shares

These ASX 200 growth shares could rise 50% to 70%

Analysts are predicting these stocks to rise materially from current levels.

Read more »

A young boy sits on his father's shoulders as they flex their muscles at sunrise on a beach
Growth Shares

2 ASX 300 growth shares with 'strong momentum' this fund manager says are buys

These two stocks have plenty of growth potential, according to experts.

Read more »

Rocket going up above mountains, symbolising a record high.
Growth Shares

2 high-growth ASX shares to buy now

Analysts at Bell Potter think these shares would be great picks for growth investors.

Read more »

Man drawing an upward line on a bar graph symbolising a rising share price.
Growth Shares

These ASX 200 growth stocks could rise 30% to 100%

Analysts think these shares are dirt cheap at current levels and have put buy ratings on them.

Read more »

Young woman using computer laptop smiling in love showing heart symbol and shape with hands. as she switches from a big telco to Aussie Broadband which is capturing more market share
Growth Shares

Goldman Sachs loves these ASX 200 growth shares: Do you own them?

Why is the broker bullish on them? Let's find out.

Read more »

Happy work colleagues give each other a fist pump.
Growth Shares

2 super ASX growth shares to buy for huge returns

Analysts are feeling bullish about these shares. Let's see what they are saying about them.

Read more »

A fresh-faced young woman holds an Australian flag aloft above her head as she smiles widely on a beach as though celebrating a national day or event where Australia has been successful.
Growth Shares

The best Australian shares to buy with $1,000 right now 

Analysts think these shares could be great options for Aussie investors when the market reopens.

Read more »