Buying ASX shares for both growth prospects and dividend income can be a tricky tightrope to walk. Growth shares can't dole out dividends unless their cash flows are growing and compounding every year. Likewise, a dividend share can't fund continual shareholder income unless its business foundations are strong and growing. Just check out the share price of an ASX bank like Westpac Banking Corp (ASX: WBC) to see what happens to a dividend share that hits the rocks. Luckily, the 2 ASX shares named below are both investments you can buy for both growth and income in my view. Here they are:
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2 ASX shares offering both income and growth prospects
1) Washington H. Soul Pattinson & Co. Ltd (ASX: SOL)
Soul Patts is one of the oldest companies on the ASX, first listing back in 1903. Since then, it has amassed a reputation for being one of the most reliable income shares on the ASX. It has paid out a dividend every year since its listing, and increased that dividend every year since 2000, including in 2020 so far. Barely any ASX companies have that kind of dividend pedigree, but Soul Patts does. This gives me enormous confidence in the company and its management.
Soul Patts is more of an investor itself these days. It holds large chunks of other ASX shares in its portfolio. These currently include TPG Telecom Ltd (ASX: TPG), New Hope Corporation Limited (ASX: NHC) and Brickworks Limited (ASX: BKW). It uses the income from these investments to both fund new acquisitions and grow its dividend. As such, this is a share I would happily recommend for both growth and income today.
2) BetaShares Nasdaq 100 ETF (ASX: NDQ)
This exchange-traded fund (ETF) and the Nasdaq index it tracks have received a lot of publicity recently. The Nasdaq is one of the two major stock exchanges over in the United States (the other being the New York Stock Exchange). The Nasdaq has a reputation for housing most of the big tech companies like Apple Inc. (NASDAQ: APPL) and Facebook Inc. (NASDAQ: FB). Whilst the Nasdaq did have a big fall last week, it has still been on an absolute rampage in 2020 so far. That explains why NDQ units are up 23.50% for the year so far and up 33.57% since 13 March.
This ETF holds the largest 100 companies in the Nasdaq and is known for its growth characteristics (as you can probably judge by the aforementioned performance metrics). However, NDQ also houses many dividend-paying shares like Apple and Microsoft Corporation (NASDAQ: MSFT) and, as such, is also a good choice for dividend growth. It currently offers a trailing distribution yield of 2.7%. I would expect this to grow at a healthy rate over time as well, given the growth profile of most of NDQ's holdings. Thus, we have here another share I would be glad to buy today for both growth and income prospects.
