2 ASX shares that could be buys for both growth and dividends

Amcor and Sonic Healthcare could both be options for income and growth.
The post 2 ASX shares that could be buys for both growth and dividends appeared first on The Motley Fool Australia. –

There are a select group of ASX shares that could provide a good combination of both growth and dividends over time.

These are businesses that may be able to grow earnings over the long-term, increase the dividend over the years and start with a solid starting yield today.

Here are two that might fit the bill:

Amcor CDI (ASX: AMC)

Amcor is a global packaging businesses. It provides packaging for a wide range of industries including drinks, food, healthcare, home care, personal care, pet care, technical applications and tobacco.

Examples would include things like the packaging you’d find on cheese or meat at the supermarket. Items like toilet paper packaging or wipes packaging are examples of packaging for home products.

Despite all the impacts of COVID-19, Amcor said that FY21 was an outstanding year, exceeding expectations. Net sales increased by 3% to $12.86 billion, adjusted earnings before interest and tax (EBIT) rose 8% to 1.6 billion and adjusted net income rose 13% to $1.16 billion.

The FY21 adjusted earnings per share (EPS) increased even faster thanks to the ongoing share buy-backs. The ASX share’s EPS rose 16% to 74.4 cents. It repurchased $350 million of shares in FY21, equating to 2% of shares outstanding.

In FY22, the business is expecting adjusted EPS to increase by a range of between 7% to 11% on a constant currency basis. It’s also expecting adjusted free cashflow to be between $1.1 billion to $1.2 billion. FY21 free cashflow was $1.1 billion. Management plan to repurchase another $400 million of shares.

In FY22, Commsec numbers suggest Amcor is going to pay a 4% dividend yield and then there could be a slight dividend increase in FY23.

Sonic Healthcare Ltd (ASX: SHL)

Sonic Healthcare is one of the world leading pathology businesses. The ASX share has operations in North America, Europe and ANZ.

It is playing a key role in doing millions of COVID tests around the world. These tests are being done using existing infrastructure. It had done around 30 million COVID tests globally at the time of the FY21 result. Sonic is also Australia’s largest non-government COVID vaccination provider.

FY21 saw a lot of operating leverage. Whilst revenue increased by 28% to $8.8 billion, net profit soared 149% to $1.3 billion.

That profit growth allowed Sonic to grow the final dividend by 8% to 55 cents per share. The total dividend was up 7% over FY21. The ASX share has also announced the acquisition of Canberra Imaging Group and moved to the majority ownership of Epworth Medical Imaging.

It’s looking for further acquisition opportunities. Sonic is also bidding on a number of outsourcing contracts.

Commsec forecasts suggest Sonic Healthcare will grow its annual dividend to $1 per share in FY22, which would be a yield of 2.4%. It’s valued at 20x FY22’s estimated earnings.

The post 2 ASX shares that could be buys for both growth and dividends appeared first on The Motley Fool Australia.

Should you invest $1,000 in Sonic Healthcare right now?

Before you consider Sonic Healthcare, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Sonic Healthcare wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

These ASX 200 shares are trading ex-dividend today

5 things to watch on the ASX 200 on Tuesday

2 highly-rated ASX dividend shares named as buys

Top performing ASX 200 healthcare shares in August

Sonic Healthcare (ASX:SHL) share price struggles despite COVID passport positioning

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Amcor Limited. The Motley Fool Australia has recommended Sonic Healthcare Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!