Woolworths Limited (ASX: WOW) will be rewarding its Australian and New Zealand staff with $50 million in shares and gift cards. Here’s why Woolworths is rewarding its workers and what it could do for the company’s share price.   

Why is Woolworths rewarding its staff?

Earlier this week Woolworths Group CEO, Brad Banducci released a statement announcing the company will reward its employees for their hard work during the bushfires and coronavirus pandemic. Banducci said the reward is in recognition of “extraordinary efforts and contributions during a year of unprecedented challenges.”

The supermarket giant will be rewarding more than 100,000 employees. As part of its rewards system, Woolworths will be giving full-time members up to $750 worth of shares in the company. Part-time members will be allocated shares on a pro-rata basis.  In addition, all Australian full and part-time workers will receive a $250 Woolworths gift card, with casuals to receive a $100 gift card.

Once completed, the share reward program will see Woolworths boast one of Australia’s biggest worker-dominated share registers.

How has Woolworths performed?

The coronavirus pandemic saw staff members inundated as panicked shoppers flocked to buy essential items. The unprecedented surge in demand was reflected in the company’s third-quarter sales results in late April. Woolworths reported its strongest quarterly sales growth through group sales surging more than 10% to $16.5 billion for the quarter.

Woolworths also received a $5 million boost from its stake in subscription-based meal kit provider Marley Spoon AG (ASX: MMM). In 2019, Woolworths invested $30 million in Marley Spoon through a debt and equity transaction. The Marley Spoon share price has since surged as the company enjoyed a boom in demand for at-home meal consumption.

Despite strong sales growth in its supermarket and liquor divisions, Woolworths has also incurred increased costs. According to the company’s management, increased costs for wages, security, supply chain and e-commerce will partially offset sales growth.

Should you buy Woolworths shares?

Many companies on the ASX say they put the well-being of their workers and customers first, however, few put their money where their mouth is. Although, Woolworths is far from perfect. The supermarket giant is in the midst of backpay claims after underpaying 5,700 workers $315 million over the past 10 years. However, despite these issues, I think the rewards program is a great initiative from Woolworths that should see the company win over new suitors.

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Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Woolworths 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.

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ASX shares seem to be in a bull market. What should investors do? The S&P/ASX 200 Index (ASX: XJO) is up another 1% today, it’s back to 6,000 points.

The ASX 200 has risen 32% since 23 March 2020. An incredible run in such a short amount of time. If you’re just thinking ahead to 2030 and beyond then today is probably still a good time to buy shares because plenty of ASX shares are still not back to their February 2020 highs.

The coronavirus is still spreading around the world, particularly in the US and emerging markets like Brazil. ASX shares like BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) are benefiting from the tough conditions mining environment in South America.

ASX bank shares like Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corp (ASX: WBC) are flying higher. The buy now, pay later sector is going nuts – the share prices of Afterpay Ltd (ASX: APT), Zip Co Ltd (ASX: Z1P), Splitit Ltd (ASX: SPT) and Sezzle Inc (ASX: SZL) are soaring.

Australia certainly has done a better job at managing the spread of the infection as well as limiting the worst of the potential economic damage.

But should ASX share investors keep buying or remain patient?

Some investors may have a regular investment plan into an exchange-traded fund (ETF). If that’s the case, I wouldn’t worry too much about delaying your next ASX share investment.

But investors trying to pick the right shares should continue to be cautious and considered. The RBA has reduced the official interest rate to a very low level. But that doesn’t mean businesses are out of the woods yet. Some businesses may never be the same again. The unemployment rate is still much higher than before COVID-19.

I’ve always said that investors should just focus on whether the potential investment is good value (and ignore the rest of the noise). There aren’t many obvious bargains like there were before a couple of months ago.

Hoping that everything will turn out fine over the six months is not an investment strategy. ASX shares that generate most of their earnings in Australia and New Zealand seem to have an easier path out of this. But ASX shares that rely on growth of the economies of China and the US may yet see a wobble later this year.

I’m being more careful with my ASX share buying, but I do intend to keep investing for the long-term.

More reading

• The 10 shares that significantly move the ASX 200 index
• Telstra shares and 2 other ASX companies to buy in a low-interest rate world
• 3 ASX dividend shares with big yields above 9%
• 3 top ETFs you can easily diversify your portfolio with immediately
• Are Megaport shares the ones to buy and hold beyond 2030?

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 AFTERPAY T FPO and ZIPCOLTD FPO. The Motley Fool Australia has recommended Sezzle Inc. 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.

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ASX dividend shares like Telstra Corporation Ltd (ASX: TLS) are a valuable asset these days. Even though the Reserve Bank of Australia (RBA) left interest rates on hold this week, we still have rates at record lows.

That means the value of holding cash in the short-to-medium term is negligible and could actually be detrimental to your wealth if you consider the effects of inflation.

That’s why I think ASX shares like those of Rural Funds Group (ASX: RFF), Commonwealth Bank of Australia (ASX: CBA) and Telstra are the best place to put your hard-earned dollars to work if you have a yearning for dividend yield.

Rural Funds shares

Rural Funds is an agriculture-based real estate investment trust (REIT) which owns tranches of Aussie farmland. Productive land is usually a great investment, and so I think Rural Funds is a great business to have some capital go towards.

It currently leases out farmland for several different crops, including macadamias, almonds, cotton, and vineyards. Rural Funds is currently offering a trailing dividend yield of 4.09%, which it aims to increase by 4% annually.

CommBank shares

CommBank isn’t the first ASX dividend share that comes to mind for strong income in 2020. All 3 of the other big 4 ASX banks have delivered substantial dividend cuts in 2020 – or have ‘deferred’ dividend payments altogether. We haven’t yet yeard from CBA on what to expect from its final dividend this year, but it’s almost certain not to come in anywhere near 2019’s level.

Even so, I think this ASX bank is the best of the banking bunch for future dividend potential. It’s unquestionably our strangest bank and will be first in line to benefit from a recovering Australian economy. There might not be much in the way of dividends this year, but I’m far more bullish on 2021 and beyond.

Telstra shares

Telstra is another great dividend share to consider today. This telco giant is the market leader in providing both fixed-line internet services, mobile phones and mobile networks. It’s also set (in my opinion) to become the market leader in the new 5G technology that is set to roll out soon. Internet services are regarded as a ‘need’ rather than a ‘want’ these days – especially with the ‘work from home’ trend we have seen so far in 2020. As such, I view the telco space as very defensive.

The company also has a strong dividend of 16 cents per share that it looks to continue to fund this year. On current prices, that would give Telstra shares a trailing yield of 4.91% – or 7.01% grossed-up with full franking credits.

More reading

• Why I would buy these outstanding ASX 50 shares right now
• Is the CBA share price cheap today?
• 3 high yield ASX dividend shares to buy right now
• ASX 200 jumps 1.8%, Australian headed for recession
• JobMaker is coming. These 3 ASX 200 shares could benefit

Motley Fool contributor Sebastian Bowen owns shares of Telstra Limited. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED and 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.

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