For those seeking value in ASX shares that offer both growth and strong dividends, IGO Ltd and Helia Group Ltd are two noteworthy options. Each of these stocks presents an intriguing opportunity for investors interested in ASX growth stocks with substantial upside potential.
IGO Ltd (ASX: IGO)
IGO Ltd, a key player in the battery materials sector, has faced significant challenges recently, leading to a 64% drop in share value over the past year. Despite this downturn, the stock is trading close to its 52-week lows, making it an interesting option for value-focused investors.
Currently, IGO shares are trading at a price-to-earnings (P/E) ratio of 15.35, which is lower than the S&P/ASX 200 Index (ASX: XJO) P/E ratio of 19.03. The recent decline in lithium prices has impacted IGO, but the company’s performance remains strong, particularly in terms of cash generation.
IGO's strength lies in its low-cost lithium operations at the Greenbushes mine, one of the largest lithium assets globally. Planned expansions at this site could significantly enhance production capacity. For FY24, IGO is expected to make a final dividend payment of 7 cents per share, bringing the total annual payout to 18 cents. The current trading price of $4.98 offers a potential upside of nearly 36%, based on some projections.
Helia Group Ltd (ASX: HLI)
Helia Group operates in the lender's mortgage insurance (LMI) sector and is currently priced at $3.76 per share. The company’s P/E ratio stands at 4.44, meaning investors are paying $4.44 for every $1 of earnings. Despite recent fluctuations, including a significant rebound of nearly 15% in a single day, Helia Group remains an attractive option.
The rebound followed a period of declines triggered by news that the Commonwealth Bank of Australia (ASX: CBA) was tendering its LMI contract, a key revenue source for Helia. Analysts believe Helia is well-positioned to retain this contract, thanks to its successful track record and longstanding relationship with CBA. Helia Group’s shares are valued at $3.90 and $4.53 by different analyses, indicating potential upsides of more than 20% from current levels.
Both IGO Ltd and Helia Group offer compelling opportunities for investors looking for value and growth. With their attractive dividend yields and growth potential, these ASX shares could be appealing additions to a diversified portfolio. It’s important to conduct thorough research and consider market conditions before making any investment decisions.