At lunch on Thursday the S&P/ASX 200 Index (ASX: XJO) is out of form and sinking notably lower. The benchmark index is currently down 2% to 6,024.8 points.

Here’s what is happening on the market today:

JB Hi-Fi guidance.

The JB Hi-Fi Limited (ASX: JBH) share price is trading lower despite the release of a very positive update this morning. The retailer revealed that it has experienced very strong sales growth in Australia during the second half. In light of this, it has reinstated and upgraded its guidance for FY 2020. It expects net profit after tax in the range of $300 million to $305 million. This will be a 20% to 22% increase year on year.

Gold miners jump.

It has been a very positive day of trade for ASX 200 gold miners such as Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST). They are both up significantly today after the gold price jumped higher overnight. The price of the precious metal rose after the U.S. Federal Reserve revealed that it plans to keep interest rates at zero until 2022. The S&P/ASX All Ordinaries Gold index is up 4.5% at lunch.

Big four banks tumble.

The big four banks have come under pressure on Thursday and are acting as a drag on the ASX 200. All four banks have followed the lead of U.S. banks and are in the red at lunch. The worst performer in the group has been the Westpac Banking Corp (ASX: WBC) share price with a 4.5% decline.

Best and worst performing ASX 200 shares.

The best performer on the ASX 200 at lunch is the IPH Ltd (ASX: IPH) share price with a gain of over 6%. This morning analysts at Morgans upgraded the intellectual property company’s shares to an add rating with an $8.69 price target. The worst performer on the index has been the Computershare Limited (ASX: CPU) share price with a 6% decline. This is after Citi downgraded its shares to a sell rating this morning.

More reading

• ASX bank share prices tumble as they aren’t out of the COVID-19 woods yet
• Why Aventus, Kogan, Newcrest, & Northern Star are pushing higher
• 3 ASX 200 shares I’d buy for 2020 and beyond
• 3 great shares to buy now if you’re an ASX 200 investor in your 20s
• JB Hi-Fi share price higher after upgrading profit guidance for FY 2020

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. 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.

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There are some ASX dividend shares out there paying out huge amounts of cash.

You need to be careful with high dividend yields. Sometimes those shares can actually be yield traps. The dividend may be unsustainably high. It could include a one-off special dividend. The market may actually be expecting an earnings fall and therefore a dividend cut.

But if you can find great high yield ASX dividend shares, you can receive large amounts of cash dividends (and franking credits) every year for a bit less risk. Just don’t expect a lot of capital growth.

Here are some ideas to think about:

Share 1: Challenger Ltd (ASX: CGF)

Challenger is the annuity king of Australia with a dominant market share. The Challenger share price has dropped almost 50% from the share price at 21 February 2020. This has pushed the trailing dividend yield to a very high level. It currently has a grossed-up dividend yield of 9.25%. That’s a great yield for an ASX dividend share.

The company has reaffirmed its profit guidance for FY20, which leads me to believe the dividend can be maintained. Challenger didn’t cut its dividend during the GFC. I don’t think it will cut during this period either.

Over the longer-term Challenger can benefit from the ageing demographics in Australia. However, the ultra-low interest rates won’t help Challenger fund the annuities if the rate stays lower for longer than expected.

Share 2: WAM Research Limited (ASX: WAX)

WAM Research is a listed investment company (LIC). The job of a LIC is to invest in shares on your behalf. One of the main benefits is that it generates profit from capital gains and investment income received. It can then pay out a smoothed dividend to shareholders.

The ASX dividend share has an annualised grossed-up dividend yield of 9.6%. That seems really good in today’s low interest world.

It’s invested in shares like Infomedia Limited (ASX: IFM) and Citadel Group Ltd (ASX: CGL) which look compelling at the current prices. WAM Research is trying to find these undervalued smaller growth shares.

WAM Research has grown its dividend every year since the GFC. It likes to keep a solid amount of cash on hand for protection and opportunities. However, it’s likely trading at an expensive premium to the underlying net asset value.

Share 3: Naos Emerging Opportunities Company Ltd (ASX: NCC)

This is another LIC. It counts as an ASX dividend share because it has a grossed-up dividend yield of 11.8%.

Naos does things differently to most other LICs. It only looks at shares with market capitalisations under $250 million. That certainly classifies as the small cap end of the ASX.

I admire the fact that Naos only has around 10 names in the portfolio. That means it has a high conviction in what it invests in.

Small caps are much more volatile than larger shares. I believe that means we have the infrequent opportunity to buy the ASX dividend share when it’s beaten up. The coronavirus has caused the share price to drop heavily, pushing the yield higher. I think the Naos LIC is a good dividend opportunity, particularly because it hasn’t cut its dividend in its relatively young history.

Foolish takeaway

Each of these ASX dividend shares have great yields. At the current prices I think Challenger could produce the biggest total returns over the next few years. However, for pure income I’d go for the Naos LIC because it’s not trading at an expensive premium to its net assets like WAM Research is.

More reading

• Why do I own this ASX 200 share?
• 3 ASX 200 shares to protect your portfolio from recession
• How to replace your entire wage with dividends
• 3 ASX dividend shares with big yields above 9%
• How to make $1,000 a month in dividends

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 Infomedia. The Motley Fool Australia owns shares of and has recommended Challenger Limited. The Motley Fool Australia has recommended Citadel Group 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.

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The 5G Networks Ltd (ASX: 5GN) share price is storming higher today after the company completed an oversubscribed institutional placement.

5G Networks is a licensed communications carrier that operates throughout Australia. It currently owns and operates its own high-speed data network with points of presence in all of the major Australian capital cities.

The company also offers cloud solutions through its data centre and cloud capabilities, along with managed services to optimise customers’ IT and network environment.

What did 5G Networks announce?

5G Network shares have resumed trading on the ASX today after being halted while the company undertook a capital raising.

This morning, 5G Networks announced it has successfully completed the institutional component of the raising, comprising $18.2 million of funds. The institutional placement was completed at an offer price of $1.23 per share, representing an 8.9% discount to the company’s last closing price of $1.35.

The 5G Network share price has been on a tear recently and at yesterday’s close, shares were sitting on a year-to-date gain of 80%.

Notably, 5G Networks stated that the placement was strongly oversubscribed, with demand derived from a range of new and existing institutional investors.

The company will now have a pro forma net cash position of $16.4 million as at 31 March 2020. Proceeds from the capital raising will be used to accelerate organic growth initiatives and fund acquisition opportunities.

These growth initiatives include the expansion of its fibre network in Sydney and Melbourne, and new builds in Brisbane and Adelaide focused on CBD demand. Additionally, the company will continue to invest in increasing utilisation and cross-sell opportunities.

On the whole, 5G Networks believes it is well-positioned for continued growth in the COVID-19 environment. This is due to the essential technology and network services it offers, as well as the increased demand for digital infrastructure due to mass remote-based working.

FY20 guidance

In its capital raising investor presentation yesterday, 5G Networks also provided a trading and guidance update. Accordingly, FY20 earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to be in the range of $6 million to $6.3 million at an EBITDA margin greater than 12%. This is above the previously guided EBITDA range of 8% to 12%.

The company attributed the anticipated improvement in EBITDA margin to the conversion of customers to high-quality, higher-margin recurring revenue services; cost synergy realisation; and an increase in operating leverage.

However, FY20 revenue is expected to land between $50 million and $52 million. This is down from the guidance range of $55 million to $65 million provided in mid-February. 5G Networks attributed this to a shift from one-off hardware sales to recurring revenue services.

At the time of writing, the 5G Networks share price has surged by 7.04% to $1.445 after rallying by as much as 12.59% in early trade.

More reading

• The smartest ASX shares to invest $10,000 in right now

Motley Fool contributor Cathryn Goh 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.

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