I’ve got my eyes on buying more these two ASX shares which I already own in my portfolio.
The post 2 ASX shares I want to buy more of for my portfolio appeared first on The Motley Fool Australia. –
Iâm always looking for opportunities to buy more of my favourite ASX shares.
I like businesses that I can own for the long-term, benefit from dividends along the way and hopefully achieve good returns over time.
The two businesses Iâm about to talk about are ones that have been in my portfolio for several years. Iâm planning to hold them for many more years, butÂ Iâd like to own even more of these two ASX shares.
Rural Funds Group (ASX: RFF)
Rural Funds is a real estate investment trust (REIT) which owns a portfolio of farms. Those farms are spread across a number of agricultural sectors including cattle, vineyards, almonds, macadamias and cropping (sugar and cotton).
I like the idea of owning quality farms as it gives exposure to a somewhat defensive sector (we all need food), thereâs growing food demand as the population increases in Australia and globally, and itâs a source of income.
The tenants are the ones that take on the operational risks of running the farms, Rural Funds just collects growing rental payments each year. The ASX share also owns a sizeable portfolio of water entitlements for the tenants to use.
The rent is growing. Rural Funds has rental contracts where some of the contracts have a fixed 2.5% annual increase and others are linked to CPI inflation. Some contracts also have periodic market reviews. Another thing helping the business is productivity investments at the farms.
The rental growth is helping fund a 4% annual increase of the distribution. This incremental growth is attractive to me for income stability.
Altium Limited (ASX: ALU)
Altium is one of the worldâs leading electronic PCB software businesses. However, it has grown to offer a number of other services such as the cloud platform Altium 365 and electrical parts search engine Octopart.
I think there are a number of positive tailwinds for the business, including the rising number of connected âinternet of thingsâ devices. Some products, such as cars, are becoming increasingly electronic and complex.
Indeed, some of Altiumâs biggest subscribers are companies like Tesla, Toyota and Ford.
I think the ASX share is doing the right things to attract and retain clients, such as the shift to the cloud with Altium 365. The company says that it connects the electronics industry fragmented value chain to drive productivity and manage production risk.
Another initiative is Altimade which it says âprovides cloud based smart manufacturing that will improve productivity and manufacturability of electronics hardware and manage the supply chain of components as well as production risk.â
The potential for longer profit growth looks good, with operating leverage helping profit margins rise in the future. In the FY22 first half, its earnings before interest, tax, depreciation and amortisation (EBITDA) margin was 34.1%. Over the long-term, it wants the EBITDA margin to be between 38% to 40%.
I really like both of these ASX shares, though I did buy my current positions at much lower prices than today, so Iâd love to be able to buy more at an even cheaper price.
The post 2 ASX shares I want to buy more of for my portfolio appeared first on The Motley Fool Australia.
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.* Scott just revealed what he believes could be the “five best ASX stocks” for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now
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*Returns as of January 12th 2022
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Motley Fool contributor Tristan Harrison has positions in Altium and RURALFUNDS STAPLED. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium and Tesla. The Motley Fool Australia has positions in and has recommended RURALFUNDS STAPLED. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.