The Transurban Group (ASX: TCL) share price slumped 3.34% lower last week, but is the Aussie infrastructure group a secret buy?

What does Transurban actually do?

Transurban is entrenched inside the ASX 50 with a market capitalisation of $38.8 billion. But despite its size, the Aussie infrastructure giant isn’t talked about nearly as much as some of its ASX 200 peers.

Transurban operates 18 roads across Australia and North America. It also has seven major projects scheduled for completion over the next five years. I think this is one of the key reasons it could be a secret buy right now.

The Transurban share price is down 4.43% for the year. That means it’s still outperforming the S&P/ASX 200 Index (ASX: XJO) which has slumped 12.92% in 2020.

I like the company’s diversified earnings which are spread across Australia, Canada and the United States. This provides some operational diversity across each country as well as different currency exposure.

I think given the uncertainty right now, this could be a real advantage. Especially if restrictions continue to ease across the globe.

More people out and about is good for toll road operators. More traffic means more earnings and, most likely, a higher share price. Particularly since many people may be unwilling to use public transport due to fears surrounding coronavirus so are more reliant on their cars. 

The Transurban share price has still fallen lower this year despite what I see as some strong potential tailwinds.

Foolish takeaway

While some other ASX 200 shares have been in the spotlight, it feels to me like Transurban is being largely ignored.

That could mean the Aussie group is a secret bargain. Broad currency exposure, diversified operations and more potential traffic in the next 12 to 18 months seem like big positives.

No one knows whether the Transurban share price is set to rocket higher. However, I think the Aussie company could be a secret bargain ahead of its August earnings result.

More reading

• Gold mining shares – these are the facts and myths
• 3 ASX shares with 6% dividend yields to buy for income
• 50% off: these ASX 200 shares are dirt cheap today
• ASX winners and losers from last week
• Where to invest $10,000 into ASX 200 shares immediately

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Transurban 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 Is the Transurban share price a secret bargain? appeared first on Motley Fool Australia.

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It has been a disappointing year for the Jumbo Interactive (ASX: JIN) share price.

The online lottery ticket seller and operator of the Oz Lotteries website has seen its shares fall ~25% since the start of 2020.

This poor form has culminated in the company being dumped out of the S&P/ASX 200 Index (ASX: XJO) at the next rebalance on 22 June.

Why is the Jumbo share price down 25%?

Investors have been selling Jumbo’s shares this year for a couple of reasons.

The first is its investment in growth opportunities, which is expected to temporarily soften its margins.

This was evident in its first half result when Jumbo delivered a 23% increase in revenue but a 14% lift in net profit after tax. Quite a contrast to previous years where its profit growth has thoroughly outpaced its revenue growth.

What else is weighing on its shares?

The other potential reason for its share price weakness is Tabcorp Holdings Limited (ASX: TAH) reporting quicker growth in its digital lottery ticket sales.

In the first half, the gambling company reported a 39.8% increase on the prior corresponding period. This compares to a 25% lift in transaction value by Jumbo during the half.

This has sparked fears that Tabcorp will be less reliant on Jumbo to sell its tickets in the future and could be in a stronger negotiating position when Jumbo’s reseller contract ends in 2022. The worst-case scenario would be Tabcorp showing Jumbo the door completely.

Though, it is worth noting that Tabcorp is a substantial shareholder in Jumbo and the two parties have worked together successfully for years. I feel this means it is unlikely to do anything that would impact the value of its shareholding.

In addition to this, with Jumbo expanding internationally, in the coming years it will be less reliant on the Australia market. In fact, it is thanks partly to its expansion plans that Jumbo is aiming to generate $1 billion in global ticket sales annually through its platform by FY 2022. This will be triple what it achieved in FY 2019.

Should you invest?

I’m optimistic that Jumbo and Tabcorp will extend their reseller agreement in 2022.

However, until this happens, the uncertainty is likely to weigh heavily on the company’s shares. This could mean they continue to underperform during the near term until things become clearer.

Nevertheless, I still believe Jumbo could be a great long term investment option for patient investors due to its sizeable global market opportunity.

Incidentally, this morning Jumbo requested a trading halt, pending the release of an announcement in relation to its reseller operations in Western Australia. No details have been released as of yet, but this could potentially shed some light on its future. I would suggest investors keep a close eye out for that announcement.

More reading

• ASX 200 down 2.2%: Westpac tumbles, TPG reveals special dividend plans
• Why Jumbo, Santos, Westpac, & Zip Co shares are crashing lower
• S&P quarterly rebalance: A2 Milk added to ASX 50 & NEXTDC in the ASX 100
• The Sezzle and Pointsbet share prices have hit new, all time highs. Time to invest?
• Could these ASX shares be the future dividend stars that make you rich?

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Jumbo Interactive Limited. The Motley Fool Australia owns shares of and has recommended Jumbo Interactive 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 The Jumbo share price is down 25% in 2020: Is it time to invest? appeared first on Motley Fool Australia.

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Top-quality ASX shares with strong dividend yields can be hard to come by in 2020. Many reliable dividend payers like the big banks have slashed dividends to conserve capital.

However, the recent bear market has hit many S&P/ASX 200 Index (ASX: XJO) constituents hard. That means that dividend yields have surged higher and many ASX dividend shares could be in the buy zone.

3 top ASX dividend shares 

Fortescue Metals Group Limited (ASX: FMG) is one of those ASX dividend shares right now.

The Fortescue share price has rocketed 72.6% higher since 9 March, but is still yielding a tidy 6.75% at the time of writing. With iron ore prices on the rise, Fortescue could be a bargain given its capital growth and income prospects.

Fortescue isn’t the only top ASX dividend share trading for a good price today. The Harvey Norman Holdings Limited (ASX: HVN) share price is trading at $3.54 per share with a 5.93% dividend yield.

Harvey Norman recently announced a 6 cents per share special dividend for shareholders. This came after a strong sales period during the coronavirus shutdown, as Aussies spent big on their home improvements and office setups.

Sticking with the retail theme, Scentre Group (ASX: SCG) is another ASX dividend share that’s worth watching, with a current dividend yield of 8.39%. 

Scentre shares have been on a rollercoaster ride in 2020 as investors try to work out the impact on real estate investment trusts (REITs) from the pandemic restrictions. 

Scentre owns and operates Westfield shopping centres across Australia and New Zealand. That means what is good for the retail sector is good for Scentre.

With restrictions starting to ease, we could see retail stores reopen for business and earnings bounce back. That means more stable tenants for Scentre, which could make it a strong dividend share in 2021 and beyond.

Foolish takeaway

These are just a few examples of top ASX dividend shares as we start this new week. Of course, dividend yields can be misleading right now, but I think the long-term picture is still good for many of these companies.

More reading

• Gold mining shares – these are the facts and myths
• Is the Transurban share price a secret bargain?
• 50% off: these ASX 200 shares are dirt cheap today
• ASX winners and losers from last week
• Where to invest $10,000 into ASX 200 shares immediately

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 3 ASX shares with 6% dividend yields to buy for income appeared first on Motley Fool Australia.

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