ASX growth shares typically share pay a low dividend or no dividend at all. However, over the long-term you can benefit from strong capital gains. This means you can build wealth build over time, and take advantage of some handy tax benefits.
Let's look at 2 ASX growth shares that are in my buy zone right now.
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ASX growth share 1: Bubs Australia Ltd (ASX: BUB)
Bubs Australia has established a portfolio of premium, high-margin brands of goat milk products in the Australian market. The company concentrates on selling infant formula products. However, its product range now also spans organic baby food, cereals and toddler snacks, as well as adult goat dairy products.
Over the last 12 months, the Bubs share price trended downwards until mid-March, falling to $0.445. It then surged higher in the subsequent period to mid-May, reaching $1.135 on May 13. That's an increase of 155% in just 2 months. Since then, the Bubs share price has lost a bit of ground, but is still trading well above its mid-May levels.
Recent revenue growth for Bubs has been very impressive. Bubs delivered a 67% increase in revenue to $19.7 million in Q3 FY20 to 31 March 2020, compared to the prior corresponding period. I believe that Bub's Asian strategy will help to push its share price higher in the years to come. Local demand for its goat dairy products is also likely to remain strong.
2: SEEK Limited (ASX: SEK)
SEEK has a highly entrenched position as Australia's largest online employment portal. No other competitor has been able to make any real inroads into its commanding market share over the past decade.
However, the significant negative impact of the coronavirus pandemic, led to a disappointing FY 2020 result and SEEK's share price fell sharply. Revenues in Australia and New Zealand were significantly impacted, falling by 12%. In a mature local market, SEEK's local financial performance is now closely tied to local market conditions. SEEK did however manage to deliver a modest a 2.6% increase in overall revenue to $1,577.4 million for the 12 month period.
SEEK will no doubt face further challenges in the months ahead due to the heavy toll that the pandemic is having on the employment markets in its local and overseas operations.
However, over the longer term, I believe that SEEK is still well-positioned for solid growth. SEEK management's high aspirational revenue goal of $5 billion by FY25 still remains in place. I believe that this target still appears to be achievable. SEEK's Investment division continues to perform well despite pandemic challenges, and I see this strong growth as continuing. SEEK has also laid the foundation to achieve strong growth from its Asia Pacific and Americas operations once the pandemic subsides.
Foolish Takeaway
Both Bubs and SEEK are ASX growth shares that I believe are well-placed for above average growth over the next five years.
