Author: therawinformant

Throughout the year, companies have slashed their dividends to protect their balance sheet in the face of COVID-19. As a result, income seeking investors have commonly ditched these blue chip ASX shares for other opportunities.

While the economy is still marred by uncertainty, it can be quite difficult to pick companies with reliable and growing dividends. So below, I have listed my 3 favourite ASX dividend shares to buy this year.

My top ASX shares to buy for dividends in 2020

Dicker Data Ltd (ASX: DDR)

Dicker Data is an Australian wholesaler and distributor of computer hardware, software and related products. Its vendors include HP Inc (NYSE: HPQ), Cisco Systems Inc. (NASDAQ: CSCO), Toshiba Corp, Lenovo Group Limited, Microsoft Corporation (NASDAQ: MSFT), AsusTek Computer Inc. and other major brands. The company services approximately 5,000 retailers which, in turn, service multiple clients ranging from small and medium-sized enterprises to large corporate businesses.

Dicker Data has delivered a robust performance during the pandemic thanks to the ongoing demand for its products and services. Since March, the Dicker Data share price has jumped from $3.90 to $7.91 at the time of writing. This represents a return of nearly 103% in the last six and half months, not including the quarterly dividends the company pays.

This year alone, Dicker Data paid out 28 cents to shareholders, with another expected dividend due in November. Surprisingly, the company has increased its dividend payments to shareholders by 50% during COVID-19, as compared to previous quarters.

The company has been growing its vendor agreements at a fast pace. In its interim results released in August, Dicker Data reported a record $1 billion in revenue. Furthermore, to supplement its future earnings, the company is building a new distribution centre. It is anticipated this will be completed at the end of the year.

Fortescue Metals Group Limited (ASX: FMG)

The world’s fourth largest iron ore producer, Fortescue has become a dominant player in the mining industry. With world-class assets located in the Pilbara region of Western Australia, the company has been booming in recent times.

Fortescue enjoys a close trade relationship with China, which has been a major consumer of the steel-making ingredient for the past decade. In September, Fortescue highlighted record earnings, with a large percentage of its profits handed down to shareholders.

In total, the company has paid out $1.76 in dividends during 2020. This reflected another record for Fortescue, and was a major boost to investors’ confidence in the company tracking strongly. At the time of writing, the Fortescue share price is up 1.52% to $16.74. This represents a decline of 14.42% from its 52-week high achieved in late August.

Looking forward, the mining outfit has poured $1.7 billion into its Eliwana Mine and Rail project. Due to completed in December this year, the huge investment is expected to produce 170 million tonnes of iron ore per year. In comparison, Fortescue shipped 178.2 million tonnes for the year ending 30 June 2020.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Listed for more than 107 years, Soul Patts (as it is commonly referred to) is the second oldest company listed on the ASX. The Australian investment house has a portfolio of ASX shares in industries such pharmaceuticals, mining, building materials, property investment, telecommunications, financial services and other equity investments.

Major share holdings include TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), and New Hope Corporation Limited (ASX: NHC).

Soul Patts’ broad asset diversification has made it resilient to economic crises. The company has awarded dividends to its shareholders for the last 40 years. Furthermore, Soul Patts has increased its dividend pay-out amounts every year since 2000. In September, the investment conglomerate announced a 35 cents per share dividend, bringing its total payment to 60 cents for its financial year.

The Soul Patts share price can be picked up for $24.21 at the time of writing. This represents an 8.32% increase over the company’s share price 12 months ago.

More reading

• 2 ASX shares that every investor should own
• Where I’d invest $10,000 into ASX dividend shares
• 2 quality ASX dividend shares to buy before the RBA meeting
• Top brokers name 3 ASX shares to buy next week
• Beat the RBA rate cuts with these ASX dividend shares

Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Aaron Teboneras owns shares of Dicker Data Limited and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Microsoft and recommends the following options: long January 2021 $85 calls on Microsoft and short January 2021 $115 calls on Microsoft. The Motley Fool Australia owns shares of and has recommended Brickworks, Dicker Data Limited, and Washington H. Soul Pattinson and Company 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 My 3 favourite ASX dividend shares to buy this year appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/33BoFDf

This afternoon the Reserve Bank elected to keep rates on hold at the record low of 0.25%.

However, it might be a little too soon for income investors to celebrate, because the central bank appears to have left the door open to a rate cut in November.

Governor Lowe commented: “The Board continues to consider how additional monetary easing could support jobs as the economy opens up further.”

In light of this, I think investors ought to consider buying the dividend shares listed below to combat low interest rates:

Rural Funds Group (ASX: RFF)

The first ASX dividend share to consider buying is this real estate investment trust. Rural Funds owns a portfolio of high quality agricultural assets across several different industries. This includes macadamia orchards, cattle assets, cotton assets, almond orchards, and vineyards. The latter are leased to wine giant Treasury Wine Estates Ltd (ASX: TWE). In addition, many of its other assets are leased to some of the most experienced agricultural operators in the country, which I feel is a testament to their quality.

The strength of its portfolio was on display for all to see in FY 2020 when Rural Funds delivered an 8% increase in property revenue to $72 million. This allowed the company’s board to increase its distribution by its target rate of 4% per annum. The good news is that more of the same is expected in FY 2021 thanks to its long term tenancy agreements and periodic rent increases. Management intends to increase its distribution by 4% again to 11.28 cents per share. Based on the latest Rural Funds share price, this equates to a 4.9% yield.

VanEck Vectors Australian Banks ETF (ASX: MVB)

Another option for income investors to consider buying is the VanEck Vectors Australian Banks ETF. As you might have guessed from its name, this exchange traded fund gives investors exposure to the banking sector. And rather than having to choose just a single bank to invest in, this fund gives investors a piece of each of them. The VanEck Vectors Australian Banks ETF is invested in the big four banks, the regionals, and also investment bank Macquarie Group Ltd (ASX: MQG).

While predicting what dividends the banks will collectively pay in FY 2021 is difficult because of the pandemic, I would expect a yield in the region of 4%. This could then rise towards 6% in the following couple of years as trading conditions return to normal. Another bonus is that I think the banks are trading at attractive levels at the moment after sizeable declines this year. So, as well as benefiting from dividends, investors could experience solid share price gains over the next couple of years as bank shares potentially rerate to higher multiples.

More reading

• Where I’d invest $10,000 into ASX dividend shares
• 3 alternative ASX shares to buy for defensive income
• 3 strong and reliable ASX dividend shares for October
• Where to invest your Coles (ASX:COL) dividends this week
• 3 ASX shares for a stress-free life

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and RURALFUNDS STAPLED. 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 Buy these ASX dividend shares to smash low interest rates appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2I21d9R

American Rare Earths Ltd (ASX: ARR) shares were up 45.9% to 8.9 cents by today’s market close. The American Rare Earths share price moved as high as 10 cents in intraday trading, hitting a 52-week high before falling back. This came after an announcement by the company that discussed the US President’s executive order in relation to American domestic rare earth production. The executive order was made on 30 September 2020.

What was in the announcement?

According to the company, the executive order by the US President is critically important to the development of the US domestic rare earth supply chain. It also highlights the strategic value of the company’s two America-based projects, located in Arizona and Wyoming, to the US government.

American Rare Earths announced that its US-based board and management are well positioned to take advantage of the strategic initiatives being offered by the US government.

According to the announcement, the executive order stated the “importance of cooperation on supply chain issues with international partners and allies.” The intention of the bill, according to American Rare Earths, is to immediately strengthen America’s domestic rare earth mining and processing capabilities for defence and radiation-hardened electronics usage.

The announcement stated that the company’s US team was securing research and development relationships on cutting edge and very promising processing technology. The company stated that leading American universities will soon be testing American Rare Earths’ project feedstock in the processing of rare earths. The universities will be testing processes that have been shown to harvest much higher percentages of the elements than previous processes.

American Rare Earths discussed that both sides of American politics have bills that are currently moving through the US congress, each of which contain key elements that the company believes will help it to accelerate its rare earth projects.

About the American Rare Earths share price

American Rare Earths is an Australian exploration company with a focus on rare earth projects in America and Australia. It was previously known as Broken Hill Prospecting and has been listed on the ASX since 2011.

At 30 June 2020, American Rare Earths had cash on hand of $1,433,784. It made a net profit after tax of $923,000 in the year to 30 June 2020.

The American Rare Earths share price is up 709% since its 52-week low of 1.1 cents that it fell to during the March bear market. It is up 345% since the beginning of the year and since this time last year.

More reading

• 2 exciting ASX tech shares to buy and hold for a decade
• My 3 favourite ASX dividend shares to buy this year
• Buy these ASX dividend shares to smash low interest rates
• ASX 200 rises on mixed day, big gold merger
• Why the Xero (ASX:XRO) share price just hit a record high

Motley Fool contributor Chris Chitty 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 American Rare Earths (ASX:ARR) share price up 45% on US President’s executive order appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2SsANA3

The S&P/ASX 200 Index (ASX: XJO) went up 0.35% to 5,962 points on a mixed day.

Australians can look forward to the federal budget tonight which will be announced at 7:30pm, though we have learned about plenty of details already including personal income tax cuts.

Gold merger

The big news of the day was a merger between Northern Star Resources Ltd (ASX: NST) and Saracen Mineral Holdings Limited (ASX: SAR).

Northern Star will acquire all of Saracen’s shares by paying 0.3763 Northern Star shares for each Saracen share held. Saracen will also pay a special, fully franked dividend of A3.8 cents per share for shareholders.

After the merger, Northern Star shareholders will own 64% of the combined business and Saracen shareholders will own the remaining 36%.

Why are the two ASX 200 gold miners doing this? A key part is that it will bring ownership of KCGM under a single owner. The ‘golden mile’ will have a single owner for the first time in its more than 125 years of operation.

It will also unlock $1.5 billion to $2 billion of pre-tax synergies with optimisation of processing throughout the broader Kalgoorlie and Yandal regions, and other savings over a ten year period.

The combined business will have a pro forma market capitalisation of $16 billion and A$118 million of net cash. It will have immediate production of 1.6 million ounces per annum, with a path to 2 million ounces per annum.

The company will boast a ‘world-class portfolio’ with three large scale production centres in Kalgoorlie, Yandal and America.  

Northern Star Chair Bill Beament said: “This is a significant value-creating M&A. Our position as joint venture partners at KCGM, the close proximity of the majority of the combined company’s assets and a host of other synergies makes this a unique opportunity exclusive to Saracen and Northern Star shareholders.”

Saracen managing director Raleigh Finlayson said: “This is one of the most logical and strategic M&A transactions the mining industry has seen. The savings, the synergies and the growth opportunities it will generate make the transaction extremely compelling.

“In short, it is a unique opportunity for Saracen shareholders unlikely to be replicated via any other avenue.”

The Saracen share price rose 10% and the Northern Star share price went up 11%.

BHP Group Ltd (ASX: BHP)

Global commodity giant BHP announced today that it is going to acquire another 28% of Shenzi, a six-lease development in the deepwater Gulf of Mexico.

BHP is currently the operator with a 44% interest, Hess Corporation owns 28% and Repsol S.A. owns the other 28%.

Hess and BHP have agreed a price of US$505 million for the 28% stake, which will bring BHP’s working interest to 72% and add another 11,000 barrels of oil equivalent per day of production for BHP.

BHP thinks this acquisition is a good counter-cyclical buy and believes there is upside for the oil price with a global slowdown in development activity. The ASX 200 resources giant thinks oil will be attractive for the next decade and likely beyond.

BHP’s president of petroleum operations, Geraldine Slattery, said: “This transaction aligns with our plans to enhance our petroleum portfolio by targeted acquisitions in high quality producing deepwater assets and the continued de-risking of our growth options. We are purchasing the stake in Shenzi at an attractive price, it’s a tier one asset with optionality, and key to BHP’s Gulf of Mexico heartland. As the operator, we have more opportunity to grow Shenzi high-margin barrels and value with an increased working interest.”

The BHP share price grew by 0.33% today.

Insurance Australia Group Ltd (ASX: IAG)

The IAG share price dropped 0.3% after announcing the outcome of a class action against it.

IAG has agreed to settle a class action for add-on insurance products sold through motor vehicle and motorcycle dealers.

The settlement involves a gross payment of $138 million and is subject to approval by the Australian federal court.

Inclusive of all related costs and after insurance recoveries, IAG said it’s anticipating a net after tax impact from this settlement of less than $50 million. This will be included in the upcoming FY21 half-year report.

More reading

• Why the Coles Group (ASX:COL) share price just got upgraded to “buy”
• What investors learnt from the RBA’s rate decision today
• Does time in the market really beat timing the market?
• ASX 200 down 0.2%: Northern Star & Saracen announce mega merger, IAG settles class action
• Why Baby Bunting, Northern Star, Oil Search, & Telix shares are storming higher

Motley Fool contributor Tristan Harrison 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 ASX 200 rises on mixed day, big gold merger appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3livcbP

The Xero Limited (ASX: XRO) share price has been on form again on Tuesday.

So much so, in afternoon trade the business and accounting software platform provider’s shares climbed 2% to a record high of $106.68.

When the Xero share price reached that level, it meant it was up 34% since the start of the year.

Why is the Xero share price at a record high?

Investors have been fighting to get hold of Xero’s shares over the last few months following a positive annual general meeting update and the announcement of a new acquisition.

In respect to the former, at its annual general meeting in August, Xero revealed that it has continued its subscriber growth in FY 2021 despite the pandemic.

Since the start of April and through to 31 July, Xero recorded 96,000 net subscriber additions to its platform. This lifted its subscribers to a total of 2.38 million at the end of the period.

Pleasingly, this was driven by positive net subscriber additions in all geographies during the four months.

As for its acquisition, earlier this month Xero completed the acquisition of Waddle for up to A$80 million.

Waddle is a cloud-based lending platform that helps small businesses access capital through invoice financing. Its platform allows a range of banks and financial technology companies to more easily lend to small businesses by leveraging their accounting data and automating many of the manual processes typically involved in invoice financing.

Management notes that the acquisition aligns with its strategy to grow its small business platform and to address critical small business financial needs.

Waddle’s best-in-class cloud-lending platform, combined with small businesses’ invoice data, is expected to enable the delivery of tailored invoice financing solutions to small businesses.

Xero’s CEO, Steve Vamos, commented: “The acquisition of Waddle is an important step in our strategy to help small businesses better manage cash flow and gain access to working capital. Waddle’s lending platform has the potential to enable a wide range of banks, fintechs and other lenders to better support small business financial needs. We’re excited about the benefits Waddle can bring to many of our customers and banking partners.”

Is it too late to invest?

While Xero’s shares are certainly not cheap after this strong run, I still see value in them for long-term focused investors.

This is due to its very positive long term outlook thanks to the shift to online accounting and its evolution into a full service small business solution.

More reading

• 2 outstanding ASX tech shares to buy for the long term
• 5 things to watch on the ASX 200 on Monday
• 2 of the best ASX 200 shares to buy in October
• ASX 200 down 0.95%: Mesoblast crashes lower on FDA update, Afterpay surges higher
• Why WAAAX shares like Afterpay (ASX:APT) and Xero (ASX:XRO) are surging

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 Xero. 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 Why the Xero (ASX:XRO) share price just hit a record high appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/36zfZ1R

The Tesserent Ltd (ASX: TNT) share price is flying higher today, up 18%. This comes after the company’s ASX announcement earlier today on two new key appointments along with organic growth from its acquisition synergies.

Tesserent shareholders have had much to celebrate this year, with the share price leaping higher in July and August following several new strategic acquisitions.

Which is not to say shareholders haven’t suffered through white-knuckle moments. During the COVID-19 market panic, Tesserent’s share price plunged 73% from 18 February through to 23 March.

Since that low, the share price has rocketed 750% higher, putting it up 538% year-to-date. For comparison of just how remarkable that performance has been, the All Ordinaries Index (ASX: XAO) is down 10% over that same time frame.

What does Tesserent do?

Tesserent provides cyber security and networking solutions to businesses and government institutions across Australia. Its Cyber 360 strategy offers integrated solutions for 24/7 monitoring, protection and identification of cyber security threats.

The company employs more than 220 security engineers to help defend their clients’ digital assets. Following the acquisitions of several other cyber security businesses, Tesserent is now the largest dedicated cyber security company trading on the ASX.

What did Tesserent announce to the ASX today?

In this morning’s announcement, Tesserent revealed the appointment of 2 new key executives.

Peter Fearns will start in his role as the company’s new chief financial officer (CFO) in November. The company also announced the recent appointment of Nathan Knox as its head of synergies. Knox will focus on coordinating the company’s approach to help drive cross-selling opportunities.

In its sales and synergies update, Tesserent also stated it had won new federal, state, and local government contracts exceeding $6 million in the September quarter. Additionally, it retained 100% of its existing federal government clients, seeing the majority of contracts extended through 2020 and beyond.

It also reported significant enterprise contract wins in the month of September with financial services, insurance, advertising and media business, worth more than $4 million.

Continued growth from Tesserent’s annual recurring revenues streams from locked-in annuity contracts now exceed $30 million annually.

After the last few months of phenomenal growth, Tesserent’s share price will be one to watch.

More reading

• Why the Envirosuite (ASX:EVS) share price has rocketed up today
• Why the Image Resources (ASX:IMA) share price is rocketing higher today
• Why the Droneshield (ASX:DRO) share price has rocketed higher
• Starpharma (ASX:SPL) share price tumbles on oversubscribed placement
• Why the Paradigm (ASX:PAR) share price has rocketed 8% higher today

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.

The post Why the Tesserent (ASX:TNT) share price has surged 18% today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3iB3wgG

The MyFiziq Ltd (ASX: MYQ) share price has been on the move today following the release of a new binding term sheet. During intra-day trade, the MyFiziq share price reached a record high of $1.50 before falling down to $1.25. At the time of writing, the MyFiziq share price has settled at $1.34, up 1.5%.

Let’s take a look to what MyFiziq announced today.

New agreement

MyFiziq advised it has signed a significant binding term sheet with Nexus Vita Pte Ltd, a Singapore-based health monitoring and management tech company.

In detail, Nexus has developed a system that bridges medical health and wellness management of an individual. The application tracks and manages medical and health records onto an easy-to-access digital platform, which can be shared with a medical professional. Nexus-Vita’s aim is to improve lifetime health and reduce the need for medical procedures, saving costs and resources to user and government health systems.

Under the agreement, both companies will add MyFiziq’s CompleteScan platform into all of Nexus-Vita’s products. The partnership will begin with the integrated rollout of Nexus-Vita’s pre-emptive health app. It is expected to be available to market by January 2021.

The conditions stipulate Nexus-Vita will deliver a minimum of 100,000 active users to the platform within the first 12 months of launch. This will be backed by a minimum revenue guarantee of US$3,588,00 per annum paid to MyFiziq.

As Nexus-Vita operates mostly in the greater Asia region, price sensitivity was a key driver to achieving its marketing strategy. As a result, Nexus-Vita will lower the per user month price of US$5.49 to US$2.99, reflecting a 46% discount.

What did management say?

MyFiziq CEO Vlado Bosanac said the transaction was a turning point in MyFiziq’s pathway to revenue and profit. He said:

Nexus-Vita is taking advantage of the global need for digital health engagement, which has seen a significant increase with individuals reluctant to attend medical facilities, and the compounding strain being experienced by the healthcare system worldwide as a result of the current pandemic.

Nexus-Vita has identified, developed, and entered the market with a dynamic and well-resourced offering. I am pleased to be working with Jeff and the Nexus-Vita team to provide the CompleteScan platform capabilities to their unique intervention, monitoring and pre-emptive health solution.”

Mr Bosanac mentioned the identifiable market opportunities that had arisen due to COVID-19, adding:

With the COVID-19 pandemic, the world has experienced a surge in mHealth, telehealth, virtual care and preventative health investment. Nexus-Vita’s user monitoring and engagement-based platform is in good company with recent activities in the digital health, telehealth, and medical sectors, which saw Teledoc, acquire Livongo for USD$18.5 billion.

Nexus-Vita is targeting both intervention and early identification of addressable disease prior to current preventative healthcare solutions, which is unique and innovative in this much-needed and accepted market segment.

MyFiziq share price performance

The positive announcement is good news for investors and will likely further fuel the meteoric MyFiziq share price rise. Since the start of the year, the MyFiziq share price has jumped more than 400% to reach its all-time high of $1.49 today. A market capitalisation of $155 million, the company has a huge runway ahead should it exceed market expectations.

More reading

• This ASX share soared 175% in September
• Why the MyFiziq (ASX:MYQ) share price is up 400% in just six weeks
• MyFiziq (ASX:MYQ) share price soars 30% on expansion news

Motley Fool contributor Aaron Teboneras 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 MyFiziq (ASX:MYQ) share price at record high. Here’s why. appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3jv6qVo

I think that some ASX shares are worth a spot in every portfolio.

Some businesses can be attractive to income investors as they pay a dividend and they can be attractive for growth investors because they are demonstrating solid growth credentials.

I also like the idea of owning businesses that can be held for many years, which allows compounding for a long time rather than regularly triggering taxes on capital gains.

That’s why I like these two ASX shares that could work for every investor portfolio:

Future Generation Global Investment Co Ltd (ASX: FGG)

This is a listed investment company (LIC) which is a very interesting proposition. The idea of a LIC is that it can be invested in a portfolio of assets, usually shares, on behalf of shareholders.

As the name suggests, Future Generation Global provides exposure to international shares. It is invested in the funds of various Australian fund managers that target global shares. If you think about it, the ASX share actually has very strong diversification because each of those funds represents a whole portfolio of different shares.

Some of the fund managers that the LIC is invested with includes: Magellan Financial Group Ltd (ASX: MFG), Cooper Investors, Caledonia, Marsico and Munro Partners.

One of the most impressive things about the Future Generation set up is that these fund managers don’t charge management fees or performance fees. Instead, Future Generation Global donates 1% of its net assets each year to youth mental health charities. It’s a great cause in my opinion.

The ASX share’s gross portfolio return has been solid compared to the MSCI AC World Index (AUD), outperforming it over the past month, six months, twelve months, three years and since inception in September 2015. Over the past three years it has outperformed the global index by an average of 2.3% per annum.

At the current Future Generation Global share price it’s trading at a 14% discount to the pre-tax net tangible assets (NTA) at 31 August 2020. However, the NTA may have grown since then. It currently offers a grossed-up dividend yield of 2.1%. Its diversification and performance makes it an attractive long-term option.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Patts is another ASX share that I believe is a really good long-term investment option.

The investment conglomerate owns a quality portfolio of important and mostly defensive businesses. Can you imagine going without your internet connection? Soul Patts owns a large amount of TPG Telecom Ltd (ASX: TPG) shares. Everyone needs to live in a property, and construction is getting boost in tonight’s budget. Soul Patts owns a significant portion of Brickworks Limited (ASX: BKW). Energy demand is expected to rise in Asia, so New Hope Corporation Limited (ASX: NHC) could rebound.

At 31 July 2020, the ASX could point to total shareholder returns (TSR) of an average of 12.7% per annum over the prior two decades, outperforming the All Ordinaries Accumulation Index by 5.2% per annum.

Whilst a majority of the return came from capital growth, dividends have been important too. Soul Patts has grown its dividend every single year over the past two decades. That’s a great streak.

Soul Patts receives dividends and distributions from its investments. Soul Patts pays for its expenses and then pays out enough of the cashflow to increase the dividend compared to the previous year. In FY20 it only paid out 57% of its regular operating cashflows, meaning a large chunk of earnings can be re-invested for more growth in FY21.

At the current Soul Patts share price it offers a grossed-up dividend yield of 3.5%. The ASX share has been rising recently, so the yield has been pushed lower. But 3.5% is still comfortably better than bank interest rates. 

More reading

• Where I’d invest $10,000 into ASX dividend shares
• Forget the tech boom, these ASX shares are primed for the recovery trade
• 2 ASX shares to buy for rock solid retirement income
• 3 strong and reliable ASX dividend shares for October
• 5 ASX shares held by leading fund managers

Motley Fool contributor Tristan Harrison owns shares of Future Generational Global Investment Company Limited and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company 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 2 ASX shares that every investor should own appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3d4BPvj

The Coles Group Ltd (ASX: COL) share price is outperforming its largest rival after it was upgraded to “buy” by a leading broker.

The COL share price jumped 0.2% to $17.44 during lunch time trade with the Woolworths Group Ltd (ASX: WOW) share price fell 0.7% to $36.88.

In contrast, the S&P/ASX 200 Index (Index:^AXJO) slipped 0.2% at the time of writing.

Broker upgrades Coles share price to “buy”

The stronger performance by the Coles share price coincides with Credit Suisse’s decision to lift its rating on the stock to “outperform” from “neutral”.

The broker’s move comes as it forecasts Australia will have one million more residents to feed come Christmas. This represents around a 4% increase in the population.

These “extra” people are made up of Aussies who can’t travel abroad this year for holidays due to COVID-19 restrictions.

It also includes long-term visitors, such as international students, who find themselves stuck here as international borders remain shut.

1 million COVID population boost

“The addition to the resident population in Australia is likely to be a significant benefit to domestic retail,” said the broker.

“We highlight food and recreational goods retail as areas likely to benefit disproportionately from a greater level of domestic expenditure.”

Credit Suisse found that the rate of retail spending growth was negatively impacted by an increasing number of resident departures in the past.

ASX stocks best placed to benefit

It added that the increase in spending is likely to be larger than the increase in population for 2020 and that food retailers will be among the biggest beneficiaries.

That’s understandable given the amount of food we feast on during the festive season.

This bullish outlook prompted Credit Suisse to upgrade its price target on Coles to $20.16 a share. It increased the Woolworths target by 12 cents to $40.43 and the Metcash share price by 7 cents to $3.62.

Coles better than Woolworths?

“We prefer COL to WOW,” explained Credit Suisse.

“In our view, a stronger cost out programme, lower level of capital expenditure, and higher payout ratio should result in absolute appreciation in COL and out-performance relative to WOW.”

The broker rates Woolworths as “neutral” and reiterated its “outperform” recommendation on Metcash.

Another retailer that the broker is urging investors to buy based on the same thematic is the Super Retail Group Ltd (ASX: SUL) share price.

The group is well placed to benefit from the multi-year increase in road trips and outdoor recreational activity. It also has a superior online offering compared to its rivals.

More reading

• Why I would buy CSL (ASX:CSL) and this blue chip ASX share
• What investors learnt from the RBA’s rate decision today
• Here’s where you could invest your Woolworths (ASX:WOW) dividends today
• Does time in the market really beat timing the market?
• ASX 200 down 0.2%: Northern Star & Saracen announce mega merger, IAG settles class action

Motley Fool contributor Brendon Lau owns shares of Woolworths Limited. The Motley Fool Australia owns shares of and has recommended Super Retail Group Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET and 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.

The post Why the Coles Group (ASX:COL) share price just got upgraded to “buy” appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/30BAvep

If you’re looking to add a few blue chip ASX shares to your portfolio this month, then you’re in luck.

The ASX is home to a number of blue chips which I believe could generate market-beating returns for investors over the 2020s.

Two blue chip ASX shares that I would buy are listed below. Here’s why I like them:

Coles Group Ltd (ASX: COL)

The first ASX blue chip share to consider buying today is this supermarket operator. Although its shares have been on fire this year, I still think they are good value for a long-term investment. Especially given its solid growth prospects and attractive dividend policy.

In respect to the former, I expect Coles’ long track record of same store sales growth and its focus on cost cutting, automation, and efficiencies to underpin solid earnings growth over the next decade. And with the company aiming to pay out 80% to 90% of its earnings to shareholders, this bodes well for its dividend growth in the future. At present, based on the current Coles share price, I estimate that it offers a fully franked forward 3% dividend yield.

CSL Limited (ASX: CSL)

A second blue chip ASX share to buy is this global biotherapeutics company. Due to the quality of its portfolio of therapies and vaccines, its growing plasma collection network, strong demand for immunoglobulins, and its high level of research and development investment, I am confident that CSL can continue to deliver strong earnings growth for the foreseeable future.

Overall, I expect this to lead to market-beating returns again for shareholders over the next decade. It is also worth noting that the CSL share price has come under pressure this year due to the pandemic. As a result, if you were to invest today, you would be buying at 16% discount to its 52-week high.

More reading

• Why the Coles Group (ASX:COL) share price just got upgraded to “buy”
• Leading brokers name 3 ASX shares to buy today
• 2 strong ASX dividend shares to buy today
• 2 of the best ASX 200 shares to buy in October
• 5 things to watch on the ASX 200 next week

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 CSL Ltd. The Motley Fool Australia owns shares of COLESGROUP DEF SET. 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 Why I would buy CSL (ASX:CSL) and this blue chip ASX share appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3iEc7Pr