Having an asset that appreciates in value whilst paying you to hold it seems like it's too good to be true. When it comes to ASX shares, most investors either go for one or the other – rarely both. But I think it's the ultimate prize in investing to find such shares. After all, investment properties often give investors both of these beautiful things, so why can't ASX shares do the same?
Porque no los dos?, as the saying goes.
Here are 2 ASX shares that I think fit the bill today.
Telstra Corporation Ltd (ASX: TLS)
Telstra is not only the largest telco on the ASX but it also boasts impressive market share (around 50%) in both fixed-line broadband and mobile telephony and data. I can't envision any scenario where our demand for data, internet and mobile phone service goes anywhere but up over the coming decade and beyond. On that level alone I think it's worth considering Telstra as an investment.
But Telstra has a few potential tailwinds to carry it forward. For one, its pains with the nbn network have a clear end in sight, which should allow for the resumption of earnings growth in the next few years. In addition, Telstra is rapidly developing its new 5G network, which has the potential to open up another lucrative stream of earnings for the company.
Right now, Telstra pays a 2.6% dividend yield – or 4.16% if you include the special nbn dividend payments. If the aforementioned tailwinds go Telstra's way, I see plenty of room for both share price and dividend growth during this new decade.
Vanguard Australian Shares Index ETF (ASX: VAS)
Another option to consider for both growth and income is the Australian sharemarket as a whole – represented here by the VAS index fund. By holding the largest 300 Aussie companies, you are getting access to growth stocks like Afterpay Ltd (ASX: APT) and Appen Ltd (ASX: APX) as well as big dividend payers like Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP) and Woolworths Group Ltd (ASX: WOW).
Having this balanced mix gives investors plenty of growth and income opportunities in my view – making this kind of fund a great buy-and-hold investment. VAS has returned 23.62% to its investors over the past year, 3.97% of which came from dividend distributions.
Foolish takeaway
I think these 2 ASX shares show that capital growth and dividend income don't have to be mutually exclusive on the share market. Thus, I would be very happy to hold both of these stocks over the next 10 years and beyond.
