Day: January 22, 2021

4 growing small cap ASX shares to watch

A man drawing an arrow on a growth chart, indicating a surging share price

If you’re looking to gain exposure to the small side of the market, then you might want to take a look at the ASX shares listed below. 

Here’s why these four small cap ASX shares could be ones to watch this year:

Bigtincan Holdings Ltd (ASX: BTH)

Bigtincan is a provider of enterprise mobility software. Its software allows sales and service organisations to increase their sales win rates, reduce expenditures, and improve customer satisfaction through improved mobile worker productivity. It has a large number of blue chips using its platform. This includes ANZ Bank (ASX: ANZ), Cardinal Health, Nike, and Red Bull. Demand from these companies underpinned solid recurring revenue growth in FY 2020 and the current financial year.

Damstra Holdings Ltd (ASX: DTC)

Damstra is a growing integrated workplace management solutions provider. Its cloud-based workplace management platform is used by businesses globally to track, manage, and protect their workers and assets. Demand has been growing strongly in recent years and has continued in FY 2021. For example, in the first quarter, Damstra revealed record first quarter revenue, cash receipts, and operating cash flow. 

MyDeal.com.au Limited (ASX: MYD)

MyDeal.com.au is an online retail marketplace that has been a positive performer in FY 2021. It recently released its second quarter update and revealed a 165% increase in gross sales to $70.1 million. This led to MyDeal’s first half gross sales increasing 217% over the same period last year to $126.7 million. This was driven by a strong increase in active customers to a record 813,764 and repeat use. Looking ahead, the company intends to use the $40 million raised from its IPO to drive future growth. This includes growing its private label business and investing in advertising to grow its customer base and brand.

Pointerra Ltd (ASX: 3DP)

Pointerra is a technology company that provides a powerful cloud-based solution for managing, visualising, working in, analysing, using, and sharing massive 3D point clouds and datasets. Its platform is able to extract vital information from the data that would otherwise take many hours to do. Management estimates that its market opportunity is currently worth an enormous $500 billion annually.

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Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of June 30th

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends BIGTINCAN FPO and Damstra Holdings Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Pointerra Limited. The Motley Fool Australia has recommended BIGTINCAN FPO, Damstra Holdings Ltd, and Pointerra Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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2 quality ASX dividend shares with attractive yields

Hand drawing growing Dividends investment business graph with blue marker on transparent wipe board.

Are you fed up with the low interest rates on savings accounts? You’re not alone, if you are.

The good news is that the ASX is home to a large number of shares with attractive dividend yields.

National Storage REIT (ASX: NSR)

The first dividend share to look at is National Storage. It is one of the region’s largest self-storage operators with over 190 locations tailoring self-storage solutions to residential and commercial customers.

Although it has a large network, management still sees plenty of room for growth through its acquisition strategy. In fact, since the end of FY 2020, the company has completed eight acquisitions for $139 million and is working to complete a number of development projects.

Management recently reiterated that it expects to report underlying earnings per share of 7.7 cents to 8.3 cents in FY 2021. It also plans to pay 90% to 100% of its earnings out to shareholders as distributions.

Based on the middle of both guidance ranges (8 cents and a 95% payout ratio), this equates to a 7.6 cents per share distribution. Based on the current National Storage share price, this represents a 3.9% yield.

Super Retail Group Ltd (ASX: SUL)

Another dividend share to look at is Super Retail. It is the retail group behind popular store brands such as Macpac, Rebel, and Super Cheap Auto.

It has been a very positive performer in FY 2021. Last week it revealed that it expects to report a 23% increase in half year sales over the prior corresponding period. Things were even better on the bottom line thanks to margin expansion. It is expecting a normalised net profit after tax in the range of $174 million to $177 million. This represents a 135% to 139% increase on the first half of FY 2020.

One broker that is positive on the company is Goldman Sachs. It has just reiterated its buy rating and lifted its price target on the company’s shares to $14.80. The broker also estimates that it will pay a fully franked dividend of 78 cents per share in FY 2021. Based on the current Super Retail share price, this equates to a 6.8% dividend yield.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Super Retail Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Got cash to invest? Here are 3 ASX shares to buy

using asx shares to retire represented by piggy bank on sunny beach

There are some ASX shares that could be worth looking into.

The Australian dollar has strengthened over the last year to be worth US$0.77. That makes it cheaper to buy US assets or US earnings.

One of President Biden’s urgent goals is to administer 100 million vaccine shots in 100 days to combat the spread and impact of COVID-19, which may have the effect of helping the various parts of the economy recover.

Here are three ASX share ideas:

VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)

This exchange-traded fund (ETF) aims to give exposure to a diversified portfolio of attractively priced US companies with sustainable competitive advantages according to Morningstar’s equity research team.

The focus is on quality US companies that Morningstar believes have wide economic moats. The investments that VanEck Vectors Morningstar Wide Moat ETF targets must be trading at an attractive price relative to Morningstar’s estimate of fair value.

On 21 January 2021, its biggest positions include: Charles Schwab, John Wiley & Sons, Corteva, Intel, Wells Fargo, Cheniere Energy, Bank of America, Constellation Brands, Zimmer Biomet, US Bancorp, Aspen Technology, Blackbaud, Medtronic, Yum! Brands, Gilead Sciences and Berkshire Hathaway.

The ETF has an annual management fee of 0.49% per annum. Over the past five years the VanEck Vectors Morningstar Wide Moat ETF has delivered net returns of 16.6% per annum, beating the S&P 500’s return of 14.5% per annum over the same time period.

Pushpay Holdings Ltd (ASX: PPH)

Pushpay is the next ASX share that has a lot of US exposure. Its client base is predominately large and medium US churches. It’s an electronic donation business that also offers other services such as a church management system, a livestreaming service and donor tools.

The company has seen an elevated level of processing volume over the past year as it helps churches and the congregations adapt to the COVID-19 world. In the FY21 half-year result it saw total processing volume increase by 48% to US$3.2 billion. This strength saw earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDA) surge 177% to US$26.7 million in the FY21 half-year result.

Pushpay said that it benefited from growing operating leverage and it’s expecting further operating leverage to come with limited growth of operating expenses whilst operating revenue grows at a faster pace. Pushpay’s gross profit margin went up from 65% to 68% and the EBITDAF margin jumped from 17% to 31%.

The ASX share is hoping to grow its market share to 50% and eventually reach US$1 billion of annual revenue. It’s looking to expand into smaller churches and possibly other geographies to make this goal a reality.

Betashares Nasdaq 100 ETF (ASX: NDQ)

The ETF is invested in 100 of the largest businesses on the NASDAQ.

Many of the world’s biggest and most dominant technology businesses are listed in North America.

The biggest positions in the portfolio are: Apple, Microsoft, Amazon, Tesla, Facebook, Alphabet, Nvidia, PayPal and Netflix.

Betashares Nasdaq 100 ETF is actually invested in many global leaders, not just the FAANGs. It also gives exposure to Adobe, Intel, Broadcom, PepsiCo, Qualcomm, Costco, Texas Instruments, Moderna, Starbucks, Booking Holdings and Intuitive Surgical.

The ETF has management costs of 0.48% per annum. Betashares Nasdaq 100 ETF has delivered net returns of 34.8% over the last year, 27.4% per annum over the last three years and 21.4% per annum since inception in May 2015.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of June 30th

More reading

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS and PUSHPAY FPO NZX. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS, PUSHPAY FPO NZX, and VanEck Vectors Morningstar Wide Moat ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Got money to invest for dividends? Here are 3 ASX shares

piles of australian one hundred dollar notes

There are some ASX dividend shares that have a reputation for paying out income to shareholders each year.

It’s harder to make money from bank accounts these days because of how low the official interest rate from the Reserve Bank of Australia (RBA) has gone. It’s now down to just 0.25%.

Here are three businesses that could be considerations for their dividends:

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Patts is the ASX dividend share with the longest dividend record in Australia. It has grown its dividend in consecutive years going back to 2000 including during COVID-19. The company was formed in 1903, so it’s one of the oldest companies in Australia.

How has it managed that record streak, which goes back before the GFC?

The company has a diversified portfolio of different assets. Some of the key holdings in Soul Patts’ portfolio are: TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), New Hope Corporation Limited (ASX: NHC), Bki Investment Co Ltd (ASX: BKI) and Milton Corporation Limited (ASX: MLT).

Soul Patts also has unlisted holdings like agriculture, resources and swimming schools.

The portfolio of assets provides Soul Patts with annual cashflow in the form of dividends, distributions and interest. There are defensive businesses within the portfolio, which pay consistent dividends to Soul Patts.

Soul Patts was recently unsuccessful at trying to acquire Regis Healthcare Ltd (ASX: REG), though it shows the type of contrarian approach that management try to take with opportunities.

At the current Soul Patts share price it has a grossed-up dividend yield of 3.1%.

Pacific Current Group Ltd (ASX: PAC)

Pacific Current is a business that takes investment stakes in global fund managers and then helps them grow either with funding or expertise.

Dean Fremder of Perpetual Limited (ASX: PPT) said when Pacific Current shares were a bit lower: “The stock’s really cheap. It is on nine times earnings. It’s growing earnings at double digits, so more than 10% a year. It’s paying a 6.5% fully franked yield. And most excitingly, we think they can pay out a much larger portion of their earnings as dividends. We see no reason, given the surplus franking credits they have on the balance sheet, they can’t be paying a 10 or 11% fully franked yield in the next 12 months. So, really excited about that one.”

In FY20 the ASX dividend share grew its dividend by 40% to $0.35 per share with funds under management (FUM) going up 62% to $93 billion. In the three months to 30 September 2020 it saw its FUM rise another 14% to $106.4 billion.

According to Commsec, the Pacific Current share price is valued at under 10x FY22’s estimated earnings.

APA Group (ASX: APA)

APA owns a large network of 15,000km of natural gas pipelines around Australia with a presence in every mainland state and the Northern Territory. It also owns or has interests in gas storage facilities, gas-fired power stations and renewable energy generation (wind and solar farms). APA owns, or manages and operates, a portfolio of assets and delivers half the nation’s natural gas usage.

The infrastructure ASX dividend share has grown its distribution every year for a decade and a half. It recently decided to increase the annualised distribution from 50 cents per unit to 51 cents per unit.

APA continues to invest in new projects which should unlock more operating cashflow as they are completed.

At the current APA share price it has a distribution yield of 5.4%.

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Our team of investors think these 3 dividend stocks should be a ‘must consider’ for any savvy dividend investor. But more importantly, could potentially make Australian investors a heap of passive income.

Don’t miss out! Simply click the link below to grab your free copy and discover these 3 high conviction stocks now.

Returns As of 6th October 2020

More reading

Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of APA Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Got money to invest for dividends? Here are 3 ASX shares appeared first on The Motley Fool Australia.

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