Growth and income investing may be two distinct styles, but it's possible to combine them by selecting the right stocks. Some corporations have excellent growth prospects and also offer dividend programs that seem at least somewhat reliable.
Two examples in that department are Meta Platforms (META -0.29%) and Booking Holdings (BKNG -0.37%). Although they are new dividend payers, these market leaders' strong underlying businesses mean they should reward shareholders with consistent dividends for a long time while also capitalizing on significant growth opportunities.
Let me explain.
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1. Meta Platforms
Meta Platforms is the leading social media company. It boasts 3.43 billion daily active users across its websites and apps -- that's pretty close to half of the 8 billion people on Earth, a total that includes many who are too young to be on any of the company's platforms. Meta's deep ecosystem makes it an excellent target for advertisers. That's how it generates most of its sales, and that business is still booming.
In the first quarter, Meta Platforms' revenue increased by 16% year over year to $42.3 billion. The tech leader's earnings per share (EPS) came in at $6.43, 37% higher than the year-ago period.
Here's the good news for investors: Meta Platforms' business is getting even better thanks to artificial intelligence (AI). The company has used AI-powered algorithms to increase engagement on its apps. That means more time spent on Facebook and Instagram, which naturally leads to greater demand for ads and higher revenue. Meta Platforms is also utilizing AI to enhance the ad launch process. Management aims to fully automate this system by the end of 2026.
These initiatives could have a significantly positive impact on Meta Platforms' performance in the long run. That's why the company is doubling down with massive investments in AI infrastructure, to the tune of $65 billion this year, according to some reports.
The company also has other growth opportunities, including business messaging on WhatsApp. Although economic and trade concerns could continue to impact the stock -- Meta lost some ad revenue from Asia-based retailers in the first quarter -- the company should still deliver strong results thanks to the lucrative opportunities at its disposal.
Lastly, Meta Platforms initiated a quarterly dividend last year. The company offers a quarterly dividend of approximately $0.52 per share. Meta's payouts look safe, and although it doesn't have a substantial dividend history yet, investors can benefit from the growth and income it will provide in the next five years and beyond.
2. Booking Holdings
Booking Holdings helps travelers plan for their trips by providing everything from flights to accommodations, car rentals, and activities. The company operates an ecosystem of websites that includes its namesake, Priceline, as well as Kayak and others. Booking Holdings' famous brands and ecosystem grant it a network effect. The more people join one of its platforms, the more attractive it is for hotels or car rental companies, and vice versa.
That's why Booking Holdings remains one of the undisputed leaders in this niche. Financial results remain robust, too. In the first quarter, the company's revenue increased by 8% year over year to $4.8 billion. While that's not too impressive, Booking Holdings' adjusted EPS was up by a juicier 22% year over year to $24.81, while its free cash flow jumped to $3.2 billion, 23% higher than the year-ago period.
Booking Holdings' business could also be impacted by tariffs, particularly if they lead to economic issues, a decline in consumer spending, and lower travel demand. People are less likely to splurge on expensive vacations if the economy is rough. That's nothing new for Booking Holdings, though. Even if it faces some near-term uncertainty due to the state of the economy, the company's prospects are intact.
The travel and accommodation industries should maintain an upward trajectory, in the long run, thanks to factors like an increasing worldwide population and gross domestic product growth. Meanwhile, Booking Holdings is also leveraging the power of AI to enhance its business. It introduced an AI-powered travel planning tool and plans to implement many more initiatives that could make its platform even more attractive.
That's an excellent sign for the future. Booking Holdings began paying dividends last year, with an initial quarterly dividend of $8.75 per share, which has since increased to $9.60. Booking Holdings' shares aren't cheap -- they are trading for just under $5,400 apiece. Thankfully, most online brokers now offer fractional shares. Booking Holdings is worth the money for growth investors who also want some dividends on the side.
