Author: therawinformant

Just over a month ago, on 17 September, Unibail Rodamco Westfield (ASX: URW) released the details of its ambitious reset plan.

In order to reduce its sizeable debt pile, the commercial real estate behemoth’s 9 billion euro (AU$14.9 billion) plan includes the intent to complete 4 billion euros worth of office and retail asset sales by the end of 2021.

While that and other parts of the plan remain intact, Unibail’s 3.5 billion euro capital raising, which it intends to use to immediately pay down its debt obligations, could be in jeopardy.

As the Australian Financial Review reports, a “group of activist investors, including French telco billionaire Xavier Niel, is determined to derail” the capital raising.

Together the activists hold a 4.1% stake in the company. And they’re encouraging other shareholders to vote against the capital raising at the 10 November meeting. Advocating “Refocus not RESET”, the group wants to see Unibail sell its US assets rather than issue more shares.

In an online post, the activist group commented: 

URW’s problems are primarily a consequence of its acquisition of Westfield in 2018. Since the transaction’s announcement on 12 December 2017, the company’s share price collapsed 86%… The transaction was the wrong move, at the wrong time and at the wrong price. Moreover, it burdened the company with debt, distracted management and was a gross misallocation of resources… Consequently, URW entered the Covid-19 pandemic and ensuing crisis in a weakened and vulnerable position. It has since been disproportionately affected.

What does Unibail Rodamco Westfield do?

Unibail counts among Europe’s largest commercial real estate companies, owning retail and office complexes. It has assets in Europe, the United Kingdom and the United States of America.

Unibail acquired Australian shopping centre operator Westfield Corporation, created by the split of Westfield Group, in 2018. This saw Unibail shares first listing on the S&P/ASX 200 Index (ASX: XJO).

How has Unibail’s share price responded since it announced the reset plan?

On the day it announced the reset plan, Unibail’s share price slid to 52-week lows. And it kept on sliding, losing 20% from 17 September through to 2 October.

Since then the share price has turned around sharply, up more than 38%. That puts the share price up 5% from where it was on 16 September, the day before the reset plan was released.

With that in mind, the French activist investors may find less support from Unibail Rodamco’s other shareholders to block the planned capital raising than they’re hoping.

More reading

• ASX 200 Weekly Wrap: Promises of easy money push ASX 200 to post-crash high
• These were the best performing shares on the ASX 200 last week
• The Medibank (ASX:MPL) share price rockets on broker upgrade
• ASX 200 flat: Rio Tinto Q3 update, big four banks higher, GUD impresses
• The Unibail (ASX:URW) share price is climbing today. Here’s why.

Motley Fool contributor Bernd Struben 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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If you’re looking for some exposure to the small side of the market, then you might want to take a look at the shares listed below.

I believe they are among the best options for small cap investors and could be destined for big things in the future. Here’s why I believe they are worth watching:

MNF Group Ltd (ASX: MNF)

The first small cap ASX share to look at is MNF Group. It is a leading provider of Voice over Internet Protocol (VoIP) technology to businesses and consumers. VoIP technology is used to convert analogue audio signals into digital data so you can use a telephone over the internet. Given the NBN rollout and the work from home initiative, demand for VoIP services has been growing very strongly.

This led to MNF delivering a 27% increase in recurring revenue to $101.5 million in FY 2020. It also experienced a 17% increase in phone numbers on its network to 4.5 million. This bodes well for FY 2021, as this metric is a key performance indicator for future growth. The good news is that I don’t believe this is a one-off. I remain confident the pandemic has accelerated a structural shift that MNF is in a strong position to benefit from. This could make its shares long term market beaters.

Volpara Health Technologies Ltd (ASX: VHT)

Another small cap ASX share to look at is New Zealand-based healthcare technology company, Volpara. It is the company behind the VolparaEnterprise software solution. This product is a cost-effective, mission-critical tool that helps clinics deliver the highest-quality breast imaging services. The company also has other add-on solutions that work with VolparaEnterprise. These include VolparaDensity, VolparaDose, VolparaPressure, VolparaLive, and VolparaPositioning.

It is because of these extra products that management expects its average revenue per user (ARPU) metric to grow materially in the future. In the second quarter, Volpara revealed an ARPU of US$1.16. However, it is aiming to get this to US$10 in the future for its full product suite. Combined with market share gains and potential geographic expansion, I believe the future is very bright for Volpara.

More reading

• 3 exciting small cap ASX shares that ought to be on your watchlist
• Volpara (ASX:VHT) share price jumps 5% up after business update
• 3 small cap ASX healthcare shares to watch closely in the 2020s
• Could these small cap ASX shares be the next Afterpay (ASX:APT) or Zip (ASX:Z1P)?
• 3 quality small cap ASX shares with very strong growth potential

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 VOLPARA FPO NZ. The Motley Fool Australia owns shares of and has recommended MNF Group Limited. The Motley Fool Australia has recommended VOLPARA FPO NZ. 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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I like buying ASX shares when they offer me a chance of either capital growth or dividend income. But I absolutely love buying ASX shares that offer the chance of both growth and income. These shares are rare but highly lucrative. Remember, paying out dividends as income structurally weakens a company — so it’s usually only the strongest ASX shares that can afford to offer investors both growth and income opportunities. Here are 2 ASX shares that I think offer such a package deal.

2 ASX shares to buy for both growth and income today

Ramsay Health Care Limited (ASX: RHC)

Ramsay Health Care is one of the ASX’s best healthcare shares, in my view. This company is in the business of running private hospitals, with a large portfolio in Australia, as well as across a few other countries like France and Indonesia. I think healthcare is a great sector to invest in, simply because it’s a ‘need’ rather than a ‘want’. This kind of certainty goes a long way in the world of investing. Ramsay has also proved it has what it takes to deliver long-term growth to its shareholders. This was a $15 share a decade ago, which looks pretty good against Ramsay’s current share price of $66 (at the time of writing).

Unfortunately, Ramsay broke a 20-year streak of annual dividend increases in 2020 as a result of the pandemic. But I think the company is well placed to turn the income tap on again next year. As such, I would happily buy Ramsay shares today for both growth and income prospects.

Altium Limited (ASX: ALU)

Altium is our second growth and income share today. this company is in the software-as-a-service (SaaS) business. Its Altium Design suite helps electrical engineers design and manufacture printed circuit boards. Printed circuit boards are an essential ingredient in any moderately complex electronic device. As you can imagine, this is a very high-growth industry these days, and Altium is sitting right in the tailwind. That’s partly why the Altium share price is up nearly 800% in the past 5 years alone. But what most investors overlook with Altium is its dividend.

On the surface, Altium’s current trailing yield of 1% doesn’t look that impressive. But if you dig a little deeper, you’ll find that the company has been increasing its dividend dramatically every year. Since 2016, Altium has pretty much doubled its payouts from 20 cents per share to 39 cents per share in 2020. If this trend continues (which I think it will), Altium looks to be able to deliver both growth and dividends in spades into the future.

More reading

• Brainchip (ASX:BRN) share price jumps on quarterly update
• 10 must-buy ASX shares to snap up before it’s too late
• How to make $50,000 of passive income with ASX dividends
• 3 outstanding ASX shares to buy with $10,000 right now
• Should you stay invested in an ASX share after a strong run?

Sebastian Bowen owns shares of Ramsay Health Care Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia has recommended Ramsay Health Care 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Amazon.com (NASDAQ: AMZN) is slated to report its third quarter 2020 results after the market close on Thursday, Oct. 29.

The e-commerce and technology giant is barrelling toward its report on a strong note. In the second quarter, the company trounced Wall Street’s estimates for both the top and bottom lines. 

As with both the first and second quarters, investors can expect that the COVID-19 pandemic boosted the third quarter’s revenue, while having the opposite effect on profits. 

Amazon shares have soared 77.1% in 2020 through Oct. 16, while the S&P 500 has returned 9.5% over this period.

Key numbers

Metric	Q3 2019 Result	Amazon’s Q3 2020 Guidance	Amazon’s Projected Change YOY	Wall Street’s Q3 2020 Consensus Estimate	Wall Street’s Projected Change YOY
Revenue	$70.0 billion	$87 billion to $93 billion	Approximately 24% to 33%	$92.5 billion	32%
Adjusted earnings per share (EPS)	$4.23	N/A	N/A	$7.25	71%

Data sources: Amazon.com and Yahoo! Finance. YOY = year over year. Wall Street estimates as of Oct. 16. Note: Amazon does not provide earnings guidance. 

Management expects third quarter operating income to range from $2 billion to $5 billion. This guidance assumes more than $2 billion of costs related to COVID. The company’s operating income was $3.2 billion in the year-ago period, so its guidance range represents operating income declining by 38% to rising by 56% year over year. The uncertainty surrounding the pandemic is likely a main reason for the big range. 

As the chart shows, Wall Street is projecting earnings per share to skyrocket 71% year over year. No matter how you slice it, that result would reflect super performance. However, investors should be aware that part of the reason this expected percentage increase is so high is because the company is facing an easy year-ago comparable. In the year-ago period, EPS declined 26% year over year, driven by Amazon’s heavy spending on upgrading its standard Prime free delivery benefit from two days to one.

For context, in the second quarter, Amazon’s revenue surged 40% year over year (41% in constant currency) to $88.9 billion. Net income landed at $5.2 billion, which translated to EPS of $10.30, up 97% from the year-ago period.

Wall Street was looking for EPS of $1.46 on revenue of $81.5 billion. So Amazon cruised by the second quarter top-line consensus estimate and absolutely crushed the profit expectation.

Amazon Web Services’ overall growth

The company’s earnings are largely driven by its cloud computing service, Amazon Web Services (AWS). So, this business is much more important than suggested by its percentage contribution to total revenue. As such, investors should continue to focus on AWS’ overall results.

In the second quarter, AWS’ revenue surged 29% year over year to $10.8 billion, or 12% of total revenue, while operating profit soared 58% to $3.4 billion, or 59% of total operating profit.

Fourth quarter guidance

The market’s reaction to Amazon’s report will probably hinge more on fourth quarter guidance than third quarter results. That’s because the market looks ahead. (Amazon provides guidance for revenue and operating income but not for earnings. The operating income outlook, however, gives investors a ballpark idea as to what year-over-year percentage change the company expects on the bottom line.)

So, investors should know Wall Street’s expectations for the fourth quarter. For the big holiday quarter, analysts are modeling for revenue to increase 27% year over year to $111.4 billion and adjusted EPS to rise 37% to $8.87. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• 3 ASX tech shares that pay dividends
• Is Apple (NASDAQ:AAPL) stock overvalued?
• Why the Buddy (ASX:BUD) share price is up today
• Where will Facebook (NASDAQ:FB) be in 5 years?
• Where will Amazon (NASDAQ:AMZN) be in 10 years?

Beth McKenna has no position in any of the stocks mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool Australia has recommended Amazon. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Telstra Corporation Ltd (ASX: TLS) share price is underperforming the S&P/ASX 200 Index (ASX: XJO) on Monday afternoon.

At the time of writing the telco giant’s shares are trading flat at $2.84. This compares to an impressive 1% gain by the benchmark index.

Why is the Telstra share price underperforming?

The underperformance of the Telstra share price on Monday appears to be in relation to the release of its iPhone 12 plans on Friday night.

Compared with rivals Optus and TPG Telecom Ltd (ASX: TPG), Telstra was very aggressive with the pricing of its plans and has discounted them far more than many expected.

A note out of Goldman Sachs this morning commented on the price changes.

Goldman said: “The key promotion was from Telstra, who launched a very aggressive $50/m discount on its XL plan ($65/m, down from $115) as it looks to be making an aggressive play for ‘premium‘ subscribers, as it looks to leverage its superior 5G network (i.e. 40% coverage currently).”

The broker believes this makes Telstra’s high-end offering very compelling relative to the industry.

While this is expected to support subscriber growth at a price point that is accretive to its average revenue per user (ARPU), it suspects it could also lead to a significant migration of Telstra’s existing $85/m and $115/m subscribers to this price point. It fears the latter could present a meaningful average revenue per user (ARPU) headwind.

Positively, the broker notes that competition at the lower end of the market has been very subdued, with only limited changes to entry level price points.

What now?

Goldman Sachs remains positive on Telstra and still expects its postpaid ARPU to grow in the second half of FY 2021 and then accelerate in FY 2022.

It explained: “Overall, although we are surprised with the extent of Telstra’s promotion, given the subdued competition at the lower end of the market, and the limited price response from Optus/Vodafone to date, we do remain constructive on the outlook for the mobile industry. This view is premised on our belief that industry pricing needs to continue trending higher (likely in early 2021) to support returns through the 5G investment cycle.”

“We forecast Telstra postpaid ARPU to positively inflect in 2H21E (-5% / +1% in 1H21/2H21) before growth accelerates in FY22 (+4%) given a recovery in roaming revenues and the significant 5G price rises in July. With positive ARPU inflections driving share price outperformance we stay Buy on Telstra [price target of $3.60], with the next catalyst its November 12 Investor Day,” it concluded.

More reading

• 3 small cap ASX dividend giants
• ASX 200 Weekly Wrap: Promises of easy money push ASX 200 to post-crash high
• 5 things to watch on the ASX 200 on Monday
• Top brokers name 3 ASX shares to buy next week
• How to make $50,000 of passive income with ASX dividends

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended 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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The government’s relaxation of lending laws has the possibility of providing a boost to housing developers, banks and mortgage companies, as well as building materials companies. However, for investors who may have become disillusioned with the banking sector, non-bank lenders could be of particular interest. Non-bank lenders are often considered more nimble that traditional banks. They can also be regarded as adept at embracing technology and building and exploiting niche markets. 

The following ASX shares represent possible alternatives for investors looking for exposure to the lending market from outside of the big four banks.

Non-bank lenders for personal spending

Resimac Group Ltd (ASX: RMC) is a small cap non-bank lender with a loan book of $12.4 billion. Its FY20 statutory net profit after tax increased 19% on FY19, and the company’s sales have grown by an average of 29.8% over a ten year period. The company has recently outlined its digital roadmap, designed to reduce friction and increase customer loyalty. 

Wisr Ltd (ASX: WZR) is an online non-bank lender specialising in low-rate, unsecured loans. In FY20, the company saw an increase in revenue of 136% and an increase in loan originations by 95% when compared with FY19. The number of users in the Wisr system also increased by 389% on the prior year. Wisr is currently in the process of entering the $33 billion secured vehicle finance market. 

Commercial lender ASX shares

With the economic challenges continuing to be faced due to the pandemic, many small to medium enterprises are trying to gauge the level of capital they need on hand. 

CML Group Ltd (ASX: CGR) specialises in debtor finance, with its principal revenue generation coming from invoice finance. This company recently entered the fintech universe with the purchase of an online software-as-a-service (SaaS) platform. While already integrated with accounting platforms like Xero Limited (ASX: XRO), the company is planning on utilising the new platform to help it pursue clients at lower invoice levels, and improve customer lifecycle value.

Zip Co Ltd (ASX: Z1P) recently announced a deal with the Australian arm of eBay Inc (NASDAQ: EBAY) to provide what is essentially a form of trade finance. To illustrate further, it provides credit secured on products for sale to pay for marketing and other running costs. The company already provides up to a $25,000 revolving credit line with 0% interest if under 60 days. The non-bank lender is increasing its line of credit products in this area, providing it with revenue outside of the buy now, pay later (BNPL) markets.

More reading

• 1 ASX share to buy for the WA housing boom
• ASX 200 Weekly Wrap: Promises of easy money push ASX 200 to post-crash high
• 5 things to watch on the ASX 200 on Monday
• Will you regret calling the Afterpay Ltd (ASX: APT) share price too expensive? 
• Top brokers name 3 ASX shares to sell next week

Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero and ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends eBay and recommends the following options: short January 2021 $37 calls on eBay and long January 2021 $18 calls on eBay. 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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The Dicker Data Ltd (ASX: DDR) share price has reached an all-time high today following the company’s release of a positive Q3 FY20 update. At the time of writing, the Dicker Data share price has jumped 10.04% to $9.32.

Let’s see why the the hardware, software and cloud distributor’s shares are breaking new territory today.

Strong September quarter

For the period ending 30 September, Dicker Data announced a robust result leading into its final quarter for FY20.

The company reported total revenue year to date of $1,481.5 million, up 14.9% over the prior corresponding period. This was underpinned by a surge of significant mobilisation to remote working solutions.

Net profit after tax for the 9 months came in at $60.8 million, an increase of 28.3% over September 2019.

Dicker Data said that gross margins were maintained in line with half-year results and that some operating cost leverage was achieved. The company also said that the COVID-19 impact on business performance has been relatively negligent.

The recent quarterly index balance of the ASX saw Dicker Data added to the S&P/ASX 300 Index (ASX: XKO) and S&P/ASX All Technology Index (ASX: XTX).

Outlook

Looking towards the near term, management said that demand continues to remain robust with customers concentrating on business growth strategies post COVID-19. The company will focus on servicing client needs for remote and virtual working stations across its portfolio.

Furthermore, Dicker Data advised it is seeing an uptick in quoting activity and the resumption of larger infrastructure projects. It is expected that growth will stabilise for the second-half of the year.

In the next 12 to 24 months, the rollout of 5G connectivity is forecasted to drive future growth within the technology industry. Dicker Data noted that is sees a tremendous opportunity as artificial intelligence and machine learning technologies begin to accelerate. The company will seek to differentiate its offerings and value proposition to both vendors and its reseller partner base.

In addition, the construction of its new distribution centre is anticipated to be completed at the end of the year. The warehouse space represents an increase of 80% to 23,500sq m, with an additional 20,000sq m available.

The large-scale expansion allows for substantial inventory growth and technology product diversification. In-turn, this will undoubtedly assist Dicker Data in servicing a larger customer base.

Dicker Data share price reaching new highs

The Dicker Data share price has been on the rise since its March lows of $3.90. Pent-up demand has caused its shares to reach a new all-time high today of $9.34, up 139% in just under 7 months.

The company has a market capitalisation of $1.5 billion, a moderately rated price-to-earnings (P/E) ratio of 25, and current dividend yield of 3.3%.

More reading

• Why Dicker Data, South32, Tyro, and Uniti shares are pushing higher today
• Why I would buy these ASX dividend shares right now for income
• Which ASX ETFs offer the most diversification?
• My 3 favourite ASX dividend shares to buy this year
• 2 quality ASX dividend shares to buy before the RBA meeting

Motley Fool contributor Aaron Teboneras owns shares of Dicker Data Limited. The Motley Fool Australia owns shares of and has recommended Dicker Data 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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With so many shares to choose from on the ASX, it can be hard to decide which ones to buy.

The good news is that brokers across the country are doing a lot of the hard work for you.

Three top shares that leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Qantas Airways Limited (ASX: QAN)

According to a note out of the Macquarie equities desk, its analysts have retained their outperform rating and lifted the price target on this airline operator’s shares to $4.95. The broker appears optimistic that Qantas’ recovery could be quicker than expected in the domestic market thanks to re-opening borders and pent-up demand. This has led Macquarie to upgrade its estimates for FY 2021. I think Macquarie makes some great points and Qantas could be worth considering.

Rio Tinto Limited (ASX: RIO)

Analysts at Citi have retained their buy rating and $115.00 price target on this mining giant’s shares following its third quarter update. The broker notes that Rio Tinto’s shipments were softer during the quarter. However, this was due to planned maintenance activity in its port. It also notes that its production guidance remains unchanged for key commodities. In light of this, the broker continues to expect Rio Tinto to benefit greatly from high iron ore prices. It feels this is likely to underpin generous dividend payments in the coming years. I agree with Citi and would be a buyer of Rio Tinto’s shares.

Woolworths Group Ltd (ASX: WOW)

A note out of UBS reveals that its analysts have retained their buy rating and lifted their price target on this retail giant’s shares to $44.00. According to the note, the broker has upgraded its earnings forecasts after lifting its same store sales growth estimates. Looking further ahead, UBS believes Woolworths is well-placed to benefit from new trends in the food industry. This includes through its investment in meal kit delivery company Marley Spoon AG (ASX: MMM). I think UBS is spot on and Woolworths could be a top blue chip option for investors.

More reading

• 4 ASX shares to buy for a rare Christmas surprise
• ASX 200 Weekly Wrap: Promises of easy money push ASX 200 to post-crash high
• Is it time to go all in on ASX shares?
• 5 things to watch on the ASX 200 next week
• ASX 200 falls, Tyro (ASX:TYR) up on merchant deal

Motley Fool contributor James Mickleboro 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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With the S&P/ASX 200 Index (ASX: XJO) still down 13% from its 20 February all-time highs, index tracking exchange-traded funds (ETFs) have lost some of their allure.

Of course, the ASX 200 has come roaring back following the savage COVID-driven market selloff earlier this year. Taken together, the average share price of the top 200 ASX companies is up 37% since the 23 March lows.

But as you’d expect, some of those shares have gained far more than 37% while others have lagged behind the broad rebound.

With investors eager for any edge they can get, it’s important to keep an eye on wider market trends. Ones that can impact share prices in ways not related to a company’s current or forecast profitability.

Which brings us to these 3 letters of ever-growing importance.

Profit, people, and the planet

No, the 3 letters aren’t PPP. That’s 1 letter repeated 3 times!

The 3 letters many ASX investors ignore to their own potential detriment are:

E – Environmental.

S – Social.

G – Governance.

You may also have heard of ESG policies referred to as the triple bottom line. The idea is that management focuses not only on profits, but also on people and the planet.

Now, ESG investing is far from new.

When I was covering commercial real estate markets in Europe back in 2007, the major shopping centre developers were all eager to demonstrate their commitment to the planet. They were planting trees, installing bike racks, recycling wastewater, and lining their roofs with solar panels.

Some of their actions made real impacts. Others simply helped polish their brand’s image. But all their ESG actions likely served to make them more appealing to a wider range of investors.

If you’re a true impact investor, you’ll want to see the companies follow through and deliver real world results. But even if the companies are just perceived to be doing the right thing, their share prices could benefit.

The rise and rise of ESG

As I said, ESG investing is nothing new. Certainly, it even predates my 2007 immersion into commercial real estate. But with the ascent of social media and the 24/7 news cycle, investors are finding it ever harder to turn a blind eye to a company’s policies on its triple bottom line.

According to the Responsible Investment Association Australasia (RIAA), responsible investments in Australia have grown from $980 billion in 2018 to $1.15 trillion today.

And RIAA’s research indicates that pace of growth is only likely to speed up, with Australian investors wanting to increase the amount of ESG investments they hold by more than fivefold.

While some ESG policies are initially costly to implement, Simon O’Connor, Chief Executive Officer of RIAA says the impact on share prices should be positive:

The rapid growth in responsible investment has been driven by client demand and strong investment outcomes, with clear evidence that responsible investments deliver stronger risk-adjusted returns.

Some ASX shares have an easier time embracing ESG policies than others. With investors increasingly concerned about carbon emissions, ASX miners are coming under the spotlight.

ASX mining shares in the ESG spotlight

ASX 200 mining giant BHP Group Ltd (ASX: BHP) would have been an unlikely flag-bearer for the ESG movement a few years ago. But today, CEO Mike Henry appears determined to place his company at the forefront of policies that include people and the planet right up there with profits.

Speaking in London on Friday, Henry said (quoted by the Australian Financial Review):

The onus is on them [investors] to make fully informed choices based on a rigorous assessment of ESG performance, consistently applied on a company-by-company basis.

Those companies that consistently operate to the highest standards and are in tune with expectations of society, they should be a core holding of any ESG portfolio. Companies that get this right, who operate and relate to others in the right way, will generate outstanding value and returns for shareholders.

They will be better positioned to sense and manage risk, operate more reliably, access more opportunities and grow more steadily. The role that investors can play is to even more strongly reward these companies, the leaders, by prioritising investment towards them over others. By making them a must-hold part of their portfolio.

They need to reinforce these trends through increasingly differentiating between leaders and laggards in this regard.

It’s hard to say just how much the BHP share price has been affected by its progressive ESG policies relative to the price of the commodities it digs up and sells.

But certainly, as the influence of impact investors grows, we can expect to see them hold more sway over ASX share prices, like BHP’s.

More reading

• Brainchip (ASX:BRN) share price jumps on quarterly update
• How I’d position my ASX share portfolio for the next market crash
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Motley Fool contributor Bernd Struben 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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The Vicinity Centres (ASX: VCX) share price has slid lower this morning in a slow start to the week for the Aussie real estate investment trust (REIT). However, for investors like me that are hunting for a top ASX dividend share right now, could Vicinity be the answer?

What does Vicinity Centres do?

Vicinity Centres is an Aussie retail REIT with a market capitalisation of more than $6 billion. REITs must pay out at least 90% of their earnings to investors each year. That makes many top property groups a strong buy for those chasing yield in the current interest rate environment.

Vicinity Centres owns and operates $23.6 billion in real estate assets around the country, mostly in shopping centres. That includes flagship centres like Chadstone in Melbourne and Chatswood Chase in Sydney.

Is Vicinity a top ASX dividend share?

In normal times, I’d back Vicinity Centres in as a solid ASX dividend share to buy. Retail shopping centres, particularly those that Vicinity owns and operates, have historically been cash cows.

However, the coronavirus pandemic has changed all of that. Online retail sales have surged but restrictions have hampered the retail REITs like Vicinity and Scentre Group (ASX: SCG).

At the time of writing, Vicinity Centres shares are yielding a tidy 11.9%. Any yield-seeking investor would rightly take notice of a double-digit return right now, but it’s not that simple.

Given the current environment, I think we’re likely to see lower Vicinity Centres earnings and therefore lower dividends. That means Fools should be wary of falling into a value trap, where a stock looks attractive but only because its share price has been falling for a reason.

Foolish takeaway

I think Vicinity Centres will continue to be a top ASX dividend share. While, in my view, there will be a shake-up in retail real estate, Vicinity still holds prime real estate across the country.

The big question for investors is how low earnings will go and how quickly they can rebound. Despite strong yield and a 4.4x price to earnings (P/E) ratio, I wouldn’t be rolling the dice on the Vicinity Centres share price just yet.

More reading

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• Why the Indoor Skydive (ASX:IDZ) share price is up 300% today
• Why you may not need ASX REITs for dividends
• Could industrial REITs be the best ASX shares to buy for dividends?
• Are these 3 ASX shares strong recovery opportunities?

Motley Fool contributor Ken Hall 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 Is Vicinity Centres (ASX:VCX) a top ASX dividend share? appeared first on Motley Fool Australia.

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