ASX dividend shares are a great way to boost your income.

Cash is still a good way to protect your capital value. But what if you’re trying to make an income? It hardly earns anything any more. But dividends can be the answer. Businesses are still earning profits and paying out dividends. Even during this coronavirus period. 

Here are the three best ASX dividend shares I’d buy right now:

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

Soul Patts could be the best ASX dividend share when it comes to reliability. It has increased its dividend every year since 2000. It has also paid a dividend every year since it listed in 1903, including through all of the wars and recessions.

The way Soul Patts is able to do this is because it’s an investment conglomerate that’s invested in a variety of different businesses and industries such as TPG Telecom Ltd (ASX: TPM) and soon it’ll be invested in regional data centres.

Each year Soul Patts pays out the majority of its investment income that it receives, less the expenses it pays for.

It’s the type of business that you can invest in and hold for many years to come. What’s the yield for the ASX dividend share? It has a grossed-up dividend yield of 4.7%.

Brickworks Limited (ASX: BKW)

Brickworks is another great option in my opinion. This ASX dividend share hasn’t decreased its dividend for more than four decades. It owns a range of building products businesses which are among the biggest in Australia, particularly the brickmaking divisions.

The recent expansion into the US through acquisitions should be a smart move if Brickworks can become more efficient there over time.

What’s particularly attractive at the moment is that Brickworks’ share price has fallen so hard, but it’s actually invested in an industrial property trust along with Goodman Group (ASX: GMG) which generates good reliable cashflow. It also owns a large stake of Soul Patts shares. Soul Patts also owns a large chunk of Brickworks.

The non-construction businesses alone are creating enough cashflow for Brickworks to keep paying the dividend. It currently has a grossed-up dividend yield of 6%. I think that’s solid

WAM Research Limited (ASX: WLE)

WAM Research is one of the best listed investment companies (LICs) for income. It has grown its dividend every year since the GFC.

The ASX dividend share has a grossed-up dividend yield of 10.4%. It manages to fund such a large dividend by generating strong investment returns by targeting small and medium shares where there’s a catalyst to boost the share price.

Dividends have to be funded by the profit reserve, but it’s currently healthy for the LIC.

Foolish takeaway

Each of these ASX dividend shares have attractive income prospects and could be much better ideas for income compared to the overall ASX. But Soul Patts would be my preferred pick for long-term income.

More reading

• Where to invest $20,000 into shares right now
• 3 shares now trading at crazy cheap prices
• 2 ASX shares I plan to hold til I’m 100
• Is the ASX 200 getting too far ahead of itself?
• 3 ASX shares that will have strong dividends in 2020

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. 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 My 3 best ASX dividend shares to buy right now appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2WUvPit

The Telstra Corporation Ltd (ASX: TLS) share price is weathering the COVID-19 market meltdown better than most, but the calm could be marred by another mobile plan price war.

The risks of a price war are growing now that the merger between TPG Telecom Ltd (ASX: TPM) and Vodaphone is largely fait accompli.

A return of the bruising battle between mobile operators in late 2018 will almost certainly see the Telstra share price suffer after a period of relative outperformance.

While the stock is down by around 13% since the start of the year, the S&P/ASX 200 Index (Index:^AXJO) is lagging with a 17% decline due to the pandemic.

Smaller battle

The good news is that any new mobile war is unlikely to be as value destroying as the last one, according to UBS.

The broker is witnessing increasingly evidence of mobile discounting returning but believes the discounts will be more tactical this time round as opposed to outright price cuts on plans.

The tactical discounts are those that apply when customers bundle services or when existing customers add new services.

Itching for a fight

But Vodafone may be more motivated to win greater market share due to its greater exposure to international students. The number of these students have plummeted since the global coronavirus lockdown.

This means the number three network is likely to post falling subscriber numbers while Telstra gains subs.

Vodafone may also be forced to be more aggressive due to pressure from Telstra’s flanker brands. These brands sell lower cost plans under Belong and JB Hi-Fi Limited (ASX: JBH).  

UBS pointed out that the flanker brands are pressuring the average revenue per user (ARPU) across the industry by more than the market realises.

Further, Vodafone is likely to feel the heat to act as its ability to grow ARPU through 5G is more limited than Telstra.

Showing restrain

“We flag that whilst the benign industry status quo suits TLS best with its c50% share, the #3 player Vodafone may be less content with its existing c20% share. We therefore expect discounting to return incrementally,” said UBS.

“With industry post-tax ROICs [return on invested capital] (ex NBN migration payments) now only c4% vs c10% at FY16, MNOs [mobile network operators] simply cannot afford another downward repricing of their customer books.”

Who would have thought we can count on skinner returns and the cash crunch from the COVID-19 fallout to protect Telstra shareholders!

Foolish takeaway

But this doesn’t mean Telstra is out of the woods. UBS believes consensus earnings forecasts for our largest telco may be too optimistic as the market doesn’t seem to be pricing in any real competition.

On the other hand, I think as long as Telstra can cover its dividend payouts, investors will be willing to tolerate a hungrier competitor.

The fact is, the number of reliable and high dividend paying ASX stocks are in short supply.

More reading

• Brokers name 3 ASX 200 shares to buy right now
• ASX 200 down 0.2%: Wesfarmers overhauls Target, Sydney Airport has no plans to raise equity
• 3 reasons the Telstra dividend is sustainable for the foreseeable future
• Can you still invest like Warren Buffett in 2020?
• Why is the Telstra share price being left behind?

Motley Fool contributor Brendon Lau owns shares of Telstra Limited and TPG Telecom Limited. The Motley Fool Australia owns shares of and has recommended Telstra 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 Is Telstra about to be caught in a new mobile phone war? appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2A2Al5G

If you’re planning to invest into the Australian share market, then one of the shares listed below could be worth considering whether you’re looking for growth, income, or value.

Here’s why I think these shares are in the buy zone:

Aristocrat Leisure Limited (ASX: ALL)

This gaming technology company could be a good option for value investors. The earnings of its core poker machine business have been hit hard by the pandemic and are likely to remain subdued until casinos reopen again. But once things return to normal, I expect Aristocrat’s group earnings to accelerate materially. Especially given the impressive growth being exhibited by its digital segment. Based on this, I estimate that its shares are changing hands at just 18x FY 2021 earnings. Given its positive long term outlook, I think this is a real gift for investors.

Pushpay Holdings Group Ltd (ASX: PPH)

Growth investors might want to consider an investment in this donor management platform provider. Pushpay is rapidly bringing the church market into the modern age with its increasingly popular platform. The company has just recorded exceptionally strong operating profit growth in FY 2020 and is guiding to further strong growth in FY 2021. Looking beyond this, management believes it has a massive market opportunity. And thanks to the quality of its platform, I expect it to capture a big slice of it.

Sydney Airport Holdings Pty Ltd (ASX: SYD)

If you’re an income investor and can afford to be patient, then this airport operator could be a good option. The pandemic has impacted the travel and tourism markets materially in 2020, but they will recover in time. I suspect that domestic travel will recover reasonably quickly, with international travel taking another 12 months after that to recover. In light of this, I estimate that Sydney Airport will pay a 27 cents per share dividend in FY 2021 and then a 37 cents per share dividend in FY 2022. This implies yields of 4.7% and 6.5%, respectively, over the two years. I think this makes it a good option for patient investors.

More reading

• Brokers name 3 ASX 200 shares to buy right now
• Why Aristocrat Leisure, Afterpay, Corporate Travel, and Sydney Airport are pushing higher
• ASX 200 down 0.2%: Wesfarmers overhauls Target, Sydney Airport has no plans to raise equity
• 5 things to watch on the ASX 200 on Friday
• ASX 200 drops 0.4%, Chinese threat to Australian iron

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. 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 Where growth, income, and value investors can invest right now appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2TsMibn