Stock Pick

  • Why a stamp duty change could unleash the REA Group share price

    online real estate shares

    I think that a change to stamp duty could unleash the REA Group Limited (ASX: REA) share price.

    At the moment the REA Group is suffering because the number of listings and property transactions has fallen due to the coronavirus pandemic.

    Some of the activity has returned with a few social distancing restrictions lifted. Hopefully the country can get back to normal as quick as possible, including the normal property process. 

    Both Victoria and New South Wales are thinking about changing stamp duty. Instead of being a large upfront cost it would probably be a yearly fee. Kind of like how council taxes/rates work. As the two biggest property markets, this would be an important change. 

    Why would this make a difference to the REA Group share price?

    In my opinion, changing stamp duty would motivate both buyers and sellers to transact sooner. Stamp duty can take up a lot of buyer’s cash. That means the buyer has to save for longer before they can buy. It might also then delay the upgrade to a larger house. This isn’t helpful for the REA Group share price. 

    On the seller’s side of things, property owners are able to hang onto their properties for relatively little cost once the mortgage is paid off. But an introduction of an annual stamp duty tax/levy may encourage people to downsize a lot sooner if they’re being essentially being penalised for owning a house larger than they can afford. Or at least larger than their needs.

    Obviously an increase in property transactions would add to REA Group’s earnings and therefore the share price. If you’re going to sell your house you want to list it on the most popular property portal so that you can reach the widest group of potential buyers.

    In terms of brand power, I think REA Group is one of the best shares on the ASX. A return to somewhat normal life, a shift to more jobs working at home and a change to stamp duty could be very helpful to the REA Group share price.

    REA Group isn’t the only great ASX share worth looking at. Here are some more great share ideas…

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    Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended REA Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

    The post Why a stamp duty change could unleash the REA Group share price appeared first on Motley Fool Australia.

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  • How to be an ASX 200 share millionaire in 15 years

    $1 million with fireworks and streamers, millionaire, ASX shares

    The S&P/ASX 200 Index (ASX: XJO) has been on a rollercoaster in 2020 but it could be the perfect time to be an ASX 200 share millionaire.

    A number of blue-chip shares have been smashed lower but I think there are good buying opportunities. Here’s how to make your millions from buying and holding high-quality shares for decades.

    How to be an ASX 200 share millionaire in 15 years

    Dividend yields can be a little bit misleading in times like these. However, I think any dividend cuts will be temporary while valuations have slumped lower.

    If we look at a traditional valuation method of discounted cash flows, one year of lost earnings should only lower ASX 200 prices by 10% or so.

    However, there are some absolute bargain shares trading much lower than that right now. 

    Some of the Aussie real estate investment trusts (REITs) could be the key to becoming a millionaire in 15 years. REITs like Scentre Group (ASX: SCG) are down almost 42% in 2020 and are yielding 9.50% at the time of writing.

    National Australia Bank Ltd (ASX: NAB) shares have slumped 27.91% this year amid the coronavirus pandemic triggering a bear market.

    NAB shares are yielding 6.01% and just posted a $1.4 billion half-year profit. I think the ASX company can continue to churn out strong dividends. That income could quickly compound if reinvested and make you a millionaire within 15 years.

    For some retail exposure, Harvey Norman Holdings Limited (ASX: HVN) shares are down 22% in 2020. The Aussie retailer’s shares are yielding 9.70% today and could build your share portfolio quickly.

    Let’s say we start with a $75,000 share portfolio in 2020. If our ASX dividend shares can yield 7% per year and still get an average of 5% capital appreciation per year, we could be netting a 12% per year total return.

    If we stash away $20,000 per year and reinvest our returns for 15 years, becoming an ASX 200 millionaire could happen sooner than expected.

    That $75,000 portfolio could grow to $1,014,385 within 15 years and set the investor up for retirement. 

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    However, a combination of luck and disciplined savings can go a long way in building your wealth. If you want to be an ASX 200 share millionaire, the best way to start is by building a diversified portfolio for the decades ahead.

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    Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Scentre Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

    The post How to be an ASX 200 share millionaire in 15 years appeared first on Motley Fool Australia.

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  • Why Philanthropy Is Good for Business?

    Some small businesses and other corporate entities have figured out a great way to add more success to their portfolios, through charitable giving. While the heart of a business lies within building a customer base and making a profit, there are many unique benefits for businesses that support a charity. Philanthropy isn’t just something that is good for the people or the planet. It also offers a company big bonuses that can support its mission and business plan. Here are the reasons why philanthropy is good for business.

    The Right Thing To Do

    The top reason to support philanthropy is that it’s the right thing to do. Business leaders have the ability to support great charities and give back to their communities. While making money and achieving financial success does feel good, the act of regularly helping the poor, the vulnerable, and the downtrodden can make someone feel completely fulfilled. Making a difference in the world may give a business owner a greater sense of purpose in life. Repeated generosity, such as giving to charity periodically, makes people feel happy. This happiness is greater than the joy felt after receiving a gift.

    Improves Company Recognition

    Giving back and supporting a charity also helps a company improve its name recognition and brand awareness. Companies that regularly support different charitable organizations may be more well known than other ventures. In today’s world of social media, stories about businesses offering philanthropic support to different causes tend to be shared more than other corporate news. As more people find out about a company’s philanthropic work, the company’s brand gets a big boost.

    Boosts Reputation

    Companies that are known to support their communities and the people in them also experience a boost in their reputation. At some point in a business’s lifetime, it could get bad publicity or a negative review. The best way to fight negative feedback is to have plenty of positive, feel-good stories about the business. Getting out there and offering support to local charities and other philanthropies shows the company’s human side. It also carves out a reputation of kindness and positivity for a business.

    Rallies Employee Morale

    Just like business owners and the community benefit from corporate philanthropy, the employees of an organization also experience positive feelings with charitable giving. Employees who work for a company that helps make the world a better place may experience increased morale. The benefits of venture capitalist Mark Stevens charity giving is also felt by the staff members of the companies he leads, such as Nvidia.

    Attracts Potential Customers

    Businesses that have established a reputation for charitable giving and helping the world in times of crisis also attract more potential customers. In some ways, supporting philanthropy feels like an investment in the company’s future. It builds up the business’ reputation so that customers can associate the company with kindness and doing the right thing. Companies that have made charitable giving a big part of their mission have experienced boosts in sales and the number of new customers.

    Offers Tax Benefits

    Corporate charity also offers a company tax benefits. One way to take advantage of the financial benefits of supporting philanthropy is to claim a tax deduction for a charitable donation. It’s possible to get a deduction if a business gives to a qualifying organization. Businesses can claim the dollar amount of the donation if it’s cash, or they can claim the fair market value of the goods donated if it’s some other type of donation. Doing this helps a company save money on its taxes for the year due to lowering the overall taxable income of the corporation.

    Allows for Free Advertising

    Charity also offers an opportunity for a company to get free publicity for its good deeds. When an organization makes a big donation, there is often some sort of press release or news story accompanying it. The charity itself may create a publicity of the charitable donation for its own audiences. Instead of investing in a large advertising campaign, the company gets free, positive news stories on social media or television about its charitable work, which helps subtly spread the word about its products and services.

    Supports the Community

    Finally, the best reason to support a charity as a business is because it supports the community the company is part of. Doing business in a depressed community is a challenge, but a thriving business setting makes it easier to turn a profit. Companies should do whatever they can to ensure their local community has opportunities to thrive. There are many projects that businesses can support to improve the entrepreneurship and atmosphere in their town or city. Sometimes that means taking the lead and helping other organizations find their own successes.

    Philanthropy and charitable giving are great ways to give a company a big boost in reputation, customer support, and employee satisfaction. Once a company is off to a good, successful start, it should begin considering how it will support its community in the form of philanthropy.

    The post Why Philanthropy Is Good for Business? appeared first on Wall Street Survivor.

    source https://blog.wallstreetsurvivor.com/2020/05/29/why-philanthropy-is-good-for-business/

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