Investors seeking both growth and income may find promising opportunities in two leading shares from the S&P/ASX 200 Index. These companies have demonstrated strong long-term performance and are expected to continue delivering value to shareholders in the coming years.
JB Hi-Fi Ltd: A Retail Success Story
JB Hi-Fi Ltd (ASX: JBH) has seen its share price more than double over the past two years as investors increasingly value the company’s strong earnings potential. Specializing in a diverse range of electronic devices and appliances, including smartphones, tablets, and smartwatches, JB Hi-Fi is well-positioned to benefit from Australia’s growing digital landscape.
In the financial year 2025 (FY25), JB Hi-Fi reported a sales increase of 10%, alongside a 9.4% rise in underlying operating profit (EBIT) and an 8.5% growth in underlying net profit. This robust performance has led the company to increase its annual dividend per share to $2.75, reflecting a year-over-year increase of 5.4%. At its current share price, this translates to a grossed-up dividend yield of 3.8%, inclusive of franking credits.
Additionally, JB Hi-Fi declared a special dividend of $1 per share for FY25, further enhancing its appeal to income-focused investors. The company has also announced plans to increase its dividend payout ratio from 65% to a range of 70% to 80% of net profit starting in FY26, suggesting that larger dividends may be on the horizon.
In a recent trading update for the first quarter of FY26, JB Hi-Fi Australia sales increased by 6%, while sales in JB Hi-Fi New Zealand surged by 39.3%. Sales from The Good Guys and E&S also reported gains of 2.5% and 4.1% respectively, indicating a positive outlook for profit and dividend growth in the upcoming financial year.
Breville Group: Capitalizing on Coffee Consumption
Breville Group Ltd (ASX: BRG) stands out as a prominent player in the global coffee machine market, featuring brands such as Breville, Lelit, Baratza, and Sage. The company also operates a coffee beans business called Beanz. While Breville may not be classified as a high-flying technology firm, it has consistently produced impressive long-term earnings growth, particularly as at-home coffee consumption continues to rise.
In FY25, Breville reported a revenue increase of 10.9% and a net profit jump of 14.6%. The company also raised its dividend per share by 12.1%, which reflects its commitment to returning value to shareholders. With a grossed-up dividend yield of 1.8%, including franking credits, Breville presents an attractive option for investors interested in consistent dividend growth.
As Breville expands its reach into new markets, including China, the Middle East, and South Korea, there is potential for even greater earnings growth. Should the company maintain an average net profit growth of around 10% per year, it could solidify its position as a compelling long-term investment in the coffee sector.
In summary, both JB Hi-Fi and Breville Group showcase the potential for growth and income in the ASX 200. With strong financial performances and promising outlooks, they represent valuable options for investors looking to diversify their portfolios.
