I love ASX shares that offer investors both growth and income prospects. Both are equally important when it comes to total shareholder returns. Yet some investors prefer growth over income or vice versa. I'm not so picky, and as such if a company is offering good growth prospects with a growing income stream on the side, I'll be interested. So here are 2 ASX shares that I believe offer just that this week.
MFF Capital Investments Ltd (ASX: MFF)
MFF is a Listed Investment Company (LIC) and one of my favourite companies on the ASX. As a LIC, MFF invests in a portfolio of other shares on behalf of its owners. In MFF's case, these shares are usually located in the United States. It currently holds a portfolio of growth-orientated companies, the largest of which are US payments giants Visa Inc (NYSE: V) and Mastercard Inc (NYSE: MA). Other holdings (as of 31 August) include Home Depot Inc (NYSE: HD), Berkshire Hathaway Inc (NYSE: BRK.B) and Microsoft Corporation (NASDAQ: MSFT).
MFF is a growth-focused LIC at its core. But it has also recently beefed up its income chops. MFF has been paying a small but growing dividend over the past few years. It will be paying a 3 cents per share dividend in November, up from the 2.5 cents per share that was paid out in MFF's 2020 interim dividend. If MFF pays out 6 cents per share in dividends in FY21, it gives MFF shares a forward dividend yield of 2.32% on current pricing. But it gets better. In its 2020 earnings report, MFF' management declared that they intend to increase MFF's annual dividend to 10 cents per share over the next few years. That would equate to a forward yield of 3.86%. As such, I think this is a top share for both growth and income today.
iShares Global 100 ETF (ASX: IOO)
Our second ASX share for growth and income is this exchange-traded fund (ETF) from BlackRock's iShares. IOO holds 100 of the largest companies across the advanced economies of the world. You'll find all of the big American companies here like Apple Inc. (NASDAQ: AAPL), Facebook, Inc. (NASDAQ: FB) and Amazon.com, Inc. (NASDAQ: AMZN), as well as some other names like Nestle and Toyota that you might be familiar with.
IOO has been a solid performer over the past decade, delivering an average return of 13.1% per annum. But IOO is also a solid income share. It currently offers a trailing yield of 1.56%, which should rise next year when the worst of the pandemic is behind us, in my opinion. As a rock-solid investment that offers growth, income and stability, I think IOO is a great option to consider.
