Image source: Getty Images
Key points
- Some promising ASX shares are offering both reasonable dividend yields, earnings growth and plans for more
- Collins Foods is a leading fast food business with expanding networks of KFCs and Taco Bells
- Healthia is a rapidly growing allied health business which is growing organically and enacting a steady stream of acquisitions
Some ASX shares are known for growth, whilst others are known for dividends. There is a select group that may be able to offer investors a combination of both growth and dividends.
These are businesses that have long-term growth plans whilst also paying shareholders dividends along the way:
Collins Foods Ltd (ASX: CKF)
Collins Foods is an ASX share that operates a network of KFCs in both Europe and Australia. It is steadily expanding its outlet numbers, which is adding to profitability. The company is also achieving long-term same store sales growth.
At the start of February 2022, it completed the acquisition of nine KFC restaurants in the Netherlands.
In the first half of FY22, underlying net profit increased by 31.6% to $28.9 million. This allowed the business to fund a 14% increase of the interim dividend.
But Collins Foods is no longer just a KFC business. It's leveraging its KFC experience and fast-food know-how to scale its Taco Bell Australia business. The ASX share is investing in marketing to build brand awareness. HY22 Taco Bell revenue surged 33% to $14.8 million, reflecting the contribution of five new restaurants.
The Taco Bell segment is now breakeven at the earnings before interest, tax, depreciation and amortisation (EBITDA) level. It increased the total to 17 restaurants. It's expecting to add nine to 12 new outlets in FY22.
Overall, the ASX share is expecting to add 24 new restaurants across the group in FY22.
According to Commsec, the Collins Foods share price is valued at 23x FY22's estimated earnings with a grossed-up dividend yield of 3.1%.
Healthia Ltd (ASX: HLA)
Healthia is a business that operates across multiple allied health services including optometry, podiatry and physiotherapy clinics.
The business is utilising two methods of growth. It's looking to organically grow profit by improving its current clinic network. Healthia is also expanding through the use of acquisitions.
For example, in late December it announced acquisitions that would add underlying revenue of $9.52 million and earnings before interest, tax, depreciation and amortisation (EBITDA) of $1.9 million. Those acquisitions by the ASX share included eight optometry locations and two physiotherapy locations.
FY21 saw the business grow underlying revenue by 51.8%, organic revenue growth of 9.1% and underlying earnings per share (EPS) growth of 51.6% to 11.13 cents. The business paid a FY21 annual dividend of 4.5 cents per share, the final dividend was increased by 25%.
The Healthia share price is valued at 16x FY22's estimated earnings with a projected grossed-up dividend yield of 4.1%.
