An online sales boom has been magnified as a result of the lockdown during the pandemic. It’s anticipated this boom will continue post the coronavirus.

ABC News reported that the virus has shifted consumer behaviour. Because consumer preferences have changed, this has forced retailers to re-think their offerings and move to, or compliment, their operations with an online presence.

For this reason, I believe an investment in either one of these 3 companies could reward the willing investor:

• Kogan.com Ltd (ASX: KGN)
• Goodman Group (ASX: GMG)
• NextDC Ltd (ASX: NXT)

Kogan.com

The Kogan.com share price has soared 185% in the past year.

Why?

As an online retailer selling a diversified mix of products and services and with a loyal customer base, sales have soared – especially since the lockdown. 

Is it too late to buy?

After completing a A$100 million capital raise this month, Kogan now has the flexibility to invest and grow the business.

In its investor presentation released this month, the group announced a significant increase in sales, earnings and customer numbers. 

In my view, Kogan has benefited enormously from online sales because of its diverse offering. Its increase in marketing spend is helping attract customers and boost sales. For this reason, I believe the share price will continue to rise.  

Goodman Group

While the share price has increased by 2% in the past year, I believe there are reasons to be optimistic. 

In its recent investor newsletter to security holders, the group advised it remains in a solid position and reaffirmed its FY20 earnings guidance of 57.3 cents per share, up 11% on FY19, and a full year distribution of 30 cents per share. 

Goodman supplies logistics and warehousing globally. This aids in the delivery of goods for the online sales boom. It’s seeing stronger demand for new space and the development book stands at $4.8 billion. 

In my view, Goodman is an attractive investment that I think will reward investors despite the small increase in share price in the past year.

NextDC

The NextDC share price has soared 38% in the past year on the back of the demand for its data centres. 

Last month, the group completed a $191 million share purchase plan for eligible shareholders. It’s expected that the funds raised will help the development of a new data centre to meet increased demand. 

CEO, Craig Scroggie, said 

“…well capitalised to continue growing our premium data centre services platform in support of our key customers who continue to drive the growth of the digital economy.”

As a result, NextDC Ltd could deliver significant capital gains for buy and hold investors. 

Foolish takeaway

The recent crisis promoted the benefit of e-commerce with some trying online shopping for the first time. The above-mentioned companies could reward investors who are looking to profit from the rise of online sales.

More reading

• I would buy and hold Kogan and these ASX shares until 2030
• Up 250% since March: is it too late to buy Kogan shares?
• 2 ASX shares to buy for beginners
• Will Xero shares and these 2 other ASX companies be portfolio staples by 2030?
• Why Zip Co and these All Ords shares have doubled in 12 months

Motley Fool contributor Matthew Donald has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. 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 3 ASX shares I’d buy because of the online sales boom appeared first on Motley Fool Australia.

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ASX dividend shares are a great place to find a good source of income in my opinion. 

Bank interest is now very low. People may want their money to work harder, particularly if income is the goal.

Growth shares can create solid returns with the compounding of earnings. However, growth shares can be risky because they may be overpriced and the growth may not go according to plan. 

Dividends from ASX shares can be an attractive way to be rewarded each year. Share prices are volatile, whereas dividends can be consistent. Dividends are decided by the boards of companies, so businesses have more control of the dividend income for shareholders.

I think that dividend payments are a good sign of business profitability. It also shows that the leadership are thinking about their shareholders. You don’t want a CEO with an empire-building mindset who may lose a lot of money with risky acquisitions.

What type of ASX shares are good for dividends?

Do you want a mix of growth and income? Are you looking for the highest income? Is dividend growth your main concern?

High yield

The yield from an ASX dividend share is a big consideration. There are both positives and negatives to consider when thinking about high yield dividend shares.

If a business is paying out most of its profit each year as a dividend then there is little left for re-investment. It’s the re-investing for growth that is one of the key factors for long-term growth of the business.

But maybe you don’t want a lot of capital growth from your ASX dividend share. Perhaps a high level of income is all you want. In that case then shares like WAM Research Limited (ASX: WAX), Challenger Ltd (ASX: CGF) and Medibank Private Limited (ASX: MPL) could be decent ideas with their current yields.

Franking credits can really add to the yield on offer with the boost to the after-tax returns.

A healthy mix of income and growth

Some ASX dividend shares may not have grossed-up yields that are around 8% or over. They may be closer to the 5% level.

I like these types of income ideas the most because they may offer a good mix of long-term growth, whilst also paying solid dividends in the short-term.

If a dividend isn’t growing then it’s more likely to face a potential cut in the future. If a business isn’t moving forward then its competition is probably catching up. It’s the businesses with strong economic moats that can keep growing and fend off competition. I don’t think stagnant businesses are worth investing in for the long-term. Shares like banks aren’t attractive dividend ideas to me. 

Some ASX dividend shares that offer solid yields now, with good growth potential, are: Brickworks Limited (ASX: BKW), Arena REIT No 1 (ASX: ARF), APA Group (ASX: APA), Amcor Plc (ASX: AMC), Invocare Limited (ASX: IVC), Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) Service Stream Limited (ASX: SSM).

Fast-growth income shares

There’s also the option of going for shares that seem as though their dividend income will grow at a fast pace.

For example, a dividend yield starting at 3% doesn’t sound like much. But if the dividend payment grows by say 10% a year then it compounds into a much larger number over time. After several years the 3% yield could pay more in dollar terms than the high yield dividend share, plus it may come with pleasing capital growth.

In this area I’m thinking about shares like Magellan High Conviction Trust (ASX: MHH), Propel Funeral Partners Ltd (ASX: PFP) and TechnologyOne Ltd (ASX: TNE).

ASX dividend shares that I’m going for

There is a lot of uncertainty at the moment with COVID-19 and with the US, particularly as it’s an election year.

If I had to pick some of the ASX dividend shares that I’ve named in this article for my portfolio I’d go for Washington H. Soul Pattinson, Brickworks, Magellan High Conviction Trust and Propel. They all offer decent starting yields and I think they are all trading at good value with good future growth prospects.  

More reading

• Top brokers name 3 ASX 200 shares to sell today
• Fund managers have been buying these ASX shares
• Forget bank interest, try these ASX 200 dividend shares!
• Why G8 Education, InvoCare, Megaport, & Webjet shares are tumbling lower
• ASX 200 jumps almost 4%, Webjet share price soars

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Amcor Limited, Brickworks, Challenger Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of APA Group. The Motley Fool Australia has recommended InvoCare Limited, Propel Funeral Partners Ltd, and Service Stream 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 What are the best ASX shares for dividends? appeared first on Motley Fool Australia.

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Investors looking for buy ideas that’s off the beaten path might be keen to put these ASX stocks on their watchlist.

These often overlooked stocks are the latest “buy” recommendations outside of the S&P/ASX 200 Index (Index:^AXJO) by leading brokers.

Little risk of dividend cut

The first is the APN Convenience Retail REIT (ASX: ARQ) share price, which jumped 4.5% to $3.50 on Thursday.

Morgans reiterated its “add” recommendation on the stock after the property trust completed its $50 million placement.

APN is looking to raise another $5 million to strengthen its balance sheet and fund the recently announced acquisition of Coles Express outlets.

Management is promising that its FY21 dividend will be no less than the current financial year. That will be music to investors’ ears given that the property sector is at risk of cutting dividends, as highlighted in my article yesterday.

Upcoming catalyst

“The main tenant remains Puma Energy Australia (c58% of income), however in December 2019 Chevron entered into a conditional agreement to acquire its Australian fuel business,” said Morgans.

“In our view, completion of this deal would be a near term positive catalyst as it would further strengthen the credit quality of a key tenant.”

The broker is forecasting a FY20 dividend of 21.8 cents a share, which increases slightly to 21.9 cents next year.

This puts the stock on a yield of 6.3% and Morgan’s price target on the stock is $3.75 a share.

Digging itself out of a hole

Another ASX small cap to put on your buy list is the Imdex Limited (ASX: IMD) share price, according to UBS.

The drilling services company is impacted by the COVID-19 shutdowns, particularly in South America. You only need to look at Brazil to see what I mean.

UBS estimates that Imdex’s June quarter revenue will crash by around 41% over the same period last year due to the lockdowns.

What’s more, the broker doesn’t see a V-shape recovery for Imdex with the way South America is going, but is convinced the stock looks cheap for those willing to look through the coronavirus crisis.

Looking cheap over medium-term

“While near-term earnings provide little support for IMD’s valuation, we view IMD’s FY22E EBIT multiple of 7.5x EV/EBIT as attractive and representative of more normalised EBIT,” said UBS.

“We see risks skewed to the upside from a faster recovery, underpinned by a favourable commodity price backdrop, and faster adoption of IMD’s new products.”

UBS reiterated its “buy” recommendation on Imdex with a price target of $1.30 a share.

More reading

• Can these 5 FY20 dogs of ASX 200 bounce back in the new financial year?
• How the ASX 200 can help first home buyers save for a deposit
• Millennials be warned! Signs of dangerous ASX share trading grow
• Top brokers name 3 ASX 200 shares to sell today
• Australian unemployment jumps to 7.1%

Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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 Broker’s latest buy ideas of ASX stocks you probably not heard of appeared first on Motley Fool Australia.

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