ASX 200 (ASX: XJO) shares are good candidates for both income and growth.
Some of the biggest businesses on the ASX like Telstra Corporation Ltd (ASX: TLS) and Westpac Banking Corp (ASX: WBC) are cutting their dividends and their earnings are going backwards.
But there is a group of quality businesses in the ASX 200 that are large, reliable dividend payers and growing profit over the long-term. These three are three that fit the bill:
Brickworks Limited (ASX: BKW)
Some investors may think of Brickworks as a building products business. It certainly does have a group of high-quality businesses in the building product industry which have attractive long-term futures.
But Brickworks has attractive assets which make up most of the underlying value. It has a great industrial property trust in partnership with Goodman Group (ASX: GMG) and it owns a large shareholding of diversified investment conglomerate Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) which keeps increasing its dividend.
Over the past year it has added another pillar to the business with US building products with three acquisitions. It's already a market leader in the east and north east of the US.
All the divisions are expected to grow over the long-term and the dividend has been steadily growing too.
Webjet Limited (ASX: WEB)
Webjet is a leading travel business for both consumers and businesses. It's aiming for a 50% earnings before interest, tax, depreciation and amortisation (EBITDA) margin at its WebBeds B2B business, which would drive a lot of organic profit growth for Webjet even without the rapid total transaction value (TTV) that it's experiencing.
Excluding the negative Thomas Cook effects, Webjet is expecting solid underlying growth in FY20. I think Webjet could be one to watch at only 14x FY21's estimated earnings.
Service Stream Limited (ASX: SSM)
Service Stream is a steadily-growing business which helps design, build, install and service essential networks in mobile & fixed communications, electricity, water and gas.
The infrastructure and population boom going on in Australia is a good tailwind for Service Stream which has helped it steadily grow its earnings and dividends over the past few years.
It's trading at 16x FY20's estimated earnings, which is pretty cheap in this investment market.
Foolish takeaway
All three businesses have good futures at attractive prices. Webjet may be able to grow its earnings the most over the next few years (excluding FY20), but Brickworks may produce the best mix of growth and income with a solid starting dividend yield and quality diversified assets.
