Australian growth investors certainly are lucky. Right now, I believe there are a great number of growth shares that could provide investors with strong returns over the next decade.

Three which I think are well worth considering are listed below. Here’s why I think they could be future market beaters:

Bravura Solutions Ltd (ASX: BVS)

Bravura Solutions is the financial technology company behind the Sonata wealth management platform. This popular platform is used in the wealth management and funds administration industries to connect and engage with clients via computers, tablets, or smartphones. Demand for the platform has been growing very strongly in the past few years and shows no signs of slowing. Combined with recent acquisitions that open the company up to new and lucrative markets, I believe Bravura is well-positioned to deliver solid long term earnings growth.

Nearmap Ltd (ASX: NEA)

Another ASX growth share to consider buying is Nearmap. It is an aerial imagery technology and location data company with operations in the ANZ and North American markets. These two regions currently provide Nearmap with a total addressable market (TAM) of $2.9 billion per year. This is materially more than the annualised contract value (ACV) of $103 million to $107 million it expects to achieve in FY 2020. Given the fragmented nature of the market and its high quality offering, I believe Nearmap can capture a growing slice of this market over the next decade. It also has the option to increase its TAM by expanding into other territories in the future.

Zip Co Ltd (ASX: Z1P)

A final growth share to consider buying is Zip Co. I’ve been very impressed with the performance of the buy now pay later provider over the last couple of years and particularly during the pandemic. In respect to the latter, Zip Co has continued to deliver rapid sales and customer growth over the last few months. I’m confident there will be more of the same in the future due to the growing popularity of the payment method and its expansion internationally. 

More reading

• Got $5,000 spare? Consider Wesfarmers shares and these 2 other ASX companies
• Keep a watch on the Zip Co share price and 1 other ASX tech this June
• Sezzle shares and 2 other ASX techs soared up to 50% in the past 4 weeks
• ASX winners and losers from last week
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Bravura Solutions Ltd, Nearmap Ltd., and ZIPCOLTD FPO. The Motley Fool Australia has recommended Bravura Solutions Ltd and Nearmap 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 The top ASX growth shares I would buy for the 2020s appeared first on Motley Fool Australia.

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The Tyro Payments Ltd (ASX: TYR) share price closed down 12.6% on Monday following a trading update released on Monday morning. The trading update outlined the recent effects of the coronavirus on the company’s business and was one in a series of weekly updates released to the market about the company’s transaction volumes.

Why is the Tyro Payments share price down?

The announcement revealed that payments for June so far were up 6% on the same month in 2019. While this may seem positive, it was probably a lot less than the market was hoping for, given that the worst of the coronavirus lockdowns have eased. It showed that Tyro payments is no longer experiencing the type of growth it saw prior to the coronavirus pandemic.

Growth in January was up 27% on January 2019 and growth in February was up 30% on the same month in 2019. March saw an increase of only 3% with April and May showing steep declines. Transactions in April were down 38% on the same period in 2019 and in May were down 18% on March of the prior year.

Tyro mainly relies on brick and mortar retailers for revenue and it is possible that those merchants have seen a permanent decline in their sales. This could affect the value of Tyro’s transactions in the long term.

Who has been selling Tyro Payments shares?

Also announced on Monday was the reduction in holdings of Tyro Payments shares by fund manager, Fidelity. Recently, Fidelity sold 9,934,175 shares. This took their holding in the company to 6.25%, down from 8.27% previously. Fidelity sold the shares for between $2.66 and $4.26. Fidelity reported that they sold shares between 27 April and 10 June.

How have Tryo Payments shares performed this year?

Tyro listed on the ASX late in 2019 at an IPO price of $2.75. Tyro shares are down 26.3% from its 52-week high of $4.53 reached in February. It is down 4.5% from its share price of $3.50 at the beginning of the year. The company’s share price has had a bumpy ride as a result of the coronavirus and its effect on retailers. In March, the company’s share price hit a low of 97 cents. The Tyro Payments share price closed at $3.32 on Monday.

More reading

• Keep a watch on the Zip Co share price and 1 other ASX tech this June
• Why ASX, Domain, Tyro, & Wesfarmers shares are dropping lower
• Are Aussies still withdrawing cash like crazy?
• The smartest ASX shares to invest $10,000 in right now
• 2 leading ASX tech shares to buy in June

Chris Chitty has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Tyro Payments. 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 The Tyro Payments share price was down 12% on Monday, here’s why appeared first on Motley Fool Australia.

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ASX bank investors have to endure a roller coaster ride as the market falls in and out of love with the sector.

The share prices of the big four crashed as the COVID-19 crisis unfolded and quickly rebounded on a FOMO buying frenzy.

That bounce quickly petered with bank stocks copping the brunt of the selling today. The Westpac Banking Corp (ASX: WBC) share price was the worst in the group with a 2.9% decline to $17.38.

But the National Australia Bank Ltd. (ASX: NAB) share price and Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price weren’t far behind with around a 2.7% fall each.

The Commonwealth Bank of Australia (ASX: CBA) share price is the outlier (as usual). Shares in our biggest domestic bank shed 1.5% to $66.30 and is the only one in the group that outperformed the 2.2% drop on the S&P/ASX 200 Index (Index:^AXJO).

The bank valuation debate

Investors are blowing hot and cold towards the sector as experts can’t seem to quite agree on whether these stocks are cheap or expensive.

The debate centres around bank’s return on equity (ROE) and price to book value (P/B). The Australian Financial Review reported that a consensus view seems to be forming around the sector’s post-coronavirus ROE of around 10%.

The P/B multiple is also fairly black and white with the big banks trading at around 0.9 times, with the exception of the higher quality CBA at 1.5 times.

The problem is working out if these measurements represent value in the face of growing loan defaults after government support ends in September.

Multiple earnings headwinds

The Australian Banking Association data shows that the total number of deferred loans stand at nearly 800,000. If most of these distressed borrowers can’t return to paying off their monthly mortgage payments soon, things could get ugly for the banking sector.

There’re other headwinds impacting on bank profits too. Their net interest margin (which is essentially their operating profit margin) have been under pressure even before the pandemic.

Record low interest rates and a flattening bond curve have made more challenging for these lenders to turn a buck. Banks make the most hay when short-term bond yields are materially lower than longer-term yields.

Stay focus on dividend yield

I won’t blame you if you don’t quite get what ROE and P/B really measure or why retail investors should care.

The fact is, the only measure that I think is important at this juncture is the dividend yield. If the banks can achieve a ROE of around 10% as most analysts expect, this should enable them to pay out around 70% of profits as dividend.

Foolish takeaway

That should provide investors with a forecast dividend yield of around 6% before franking at the current share prices.

Add in franking, and that will push the yield north of 8% (except for CBA as investors will need to pay a premium for quality).

Even if that proves too optimistic and the gross-up yield drops to around 6%, that still represents good value to me as interest rates are expected to stay close to zero for a few years yet.

More reading

• Why MOAT is my favourite ASX ETF
• ASX 200 falls 2%, ASX travel shares drop heavily
• Clinuvel share price jumps as investors favour healthcare
• Why the ASX 200 tumbled lower on Monday and 2 shares to buy
• Should you buy ASX shares during this market selloff?

Motley Fool contributor Brendon Lau owns shares of Australia & New Zealand Banking Group Limited, Commonwealth Bank of Australia, National Australia Bank Limited, and Westpac Banking. Connect with me on Twitter @brenlau.

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 Can ASX big banks generate an attractive sustainable dividend yield from FY21? appeared first on Motley Fool Australia.

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