Author: therawinformant

I think there are some ASX shares that are great options to buy for rock solid retirement income.

As we’ve seen this year and over the past few years, businesses like Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP), Telstra Corporation Ltd (ASX: TLS) and Transurban Group (ASX: TCL) have cut their dividends to shareholders.

There are less popular names that have been much more reliable for dividend income. Here are two ASX share ideas for rock solid income:

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

Soul Patts is one of the best ASX dividend shares in my opinion. It certainly doesn’t offer the biggest yield, but in terms of reliability I think it’s the clear leader.

It has grown its dividend every year for the past two decades, including through COVID-19. That’s the most reliable growth record on the ASX.

One of the main reasons why it has done so well is its diversification. It owns a variety of different businesses and assets in its portfolio such as TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), Bki Investment Co Ltd (ASX: BKI) and Milton Corporation Limited (ASX: MLT).

Soul Patts funds its dividend purely from the cashflow (dividends and distributions) from its investments, after paying for its expenses. In FY20 it only paid out 57% of its net cashflow as dividends to shareholders. That means 43% of the cashflow can be invested into other opportunities to increase FY21’s cashflow.

Not only can Soul Patts grow its dividend from its re-invested capital, but its underlying holdings of ASX shares will also hopefully grow their dividends.

Holdings like Clover Corporation Limited (ASX: CLV), Magellan Financial Group Ltd (ASX: MFG) and Wesfarmers Ltd (ASX: WES) are attractive long-term dividend growth ideas.

I also like that Soul Patts is trying to generate growing profit from good unlisted investments like agriculture, swimming schools, resources and Ampcontrol.

At the Soul Patts share price it offers a grossed-up dividend yield of 3.6%.

Australian United Investment Company Ltd (ASX: AUI)

Australian United Investment (AUI) is a listed investment company (LIC). It was founded in 1953 by the late Sir Ian Potter, and The Ian Potter Foundation Ltd is today the company’s largest single shareholder.

It invests in many of Australia’s biggest ASX shares including CSL Limited (ASX: CSL), Commonwealth Bank of Australia (ASX: CBA), Transurban, Rio Tinto Limited (ASX: RIO) and BHP Group Ltd (ASX: BHP). But it also has larger weightings to some ASX shares like Diversified United Investment Limited (ASX: DUI), Atlas Arteria Group (ASX: ALX) and Soul Patts which aren’t among the biggest 20 shares on the ASX.

Its operating expenses were just 0.12% of the average market value of the portfolio over FY20, which is extremely cheap. The lower the expense ratio of a portfolio investment (like a LIC), the more of the net returns that are left in the hands of shareholders.

AUI has grown or maintained its dividend every year over the past 30 years. That’s a very strong record. Very few businesses can point to that level of strength of their dividend payments. Future dividends are not guaranteed to be reliable, but I think it’s a good indicator of how AUI likes to operate with regards to dividends.

At the current AUI share price it offers a grossed-up dividend yield of 6.5%. It’s trading at a 6% discount to the AUI pre-tax net tangible assets (NTA) per share at 31 August 2020.

Foolish takeaway

Both of these ASX dividend shares have been very reliable over the past two decades. Out of the two I’d prefer to buy Soul Patts because of its higher focus on growth and its wider investment mandate. However, AUI is one of my preferred ways to invest in ASX blue chips.

More reading

• 3 strong and reliable ASX dividend shares for October
• ASX 200 Weekly Wrap: Bank shares push ASX 200 higher
• 3 ASX shares for a stress-free life
• How to create a yearly income of $65,000 in dividends
• These were the best performing ASX 200 shares last week

Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Clover Limited and CSL Ltd. The Motley Fool Australia owns shares of and has recommended Brickworks, Telstra Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of Transurban Group and Wesfarmers 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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Are you looking for dividend shares to buy in October? Then I think the two listed below could be worth considering.

Here’s why I think these ASX shares would be great options for income investors:

Jumbo Interactive (ASX: JIN)

Jumbo Interactive is an online lottery ticket seller and the operator of the Oz Lotteries website. It also has a growing software as a service (SaaS) business, Powered by Jumbo. This business provides lotteries with everything they need to take their gaming online.

Earlier this year management estimated that just 7% of the US$303 billion global total addressable market was currently online. Given how much more efficient it is to sell lottery tickets online instead of in physical locations, I suspect that more and more lotteries will make the shift over the next decade. And given the quality of its Powered by Jumbo platform, I believe Jumbo is well-placed to win market share. This should support solid earnings and dividend growth over the 2020s. For now, based on the current Jumbo share price, I estimate that it offers investors a fully franked 3.3% FY 2021 dividend yield.

People Infrastructure Ltd (ASX: PPE)

I think this leading workforce management company is another ASX dividend share to buy. Demand for People Infrastructure’s innovative solutions to workforce challenges has been growing strongly in recent years. This certainly was the case in FY 2020, with the company delivering an impressive 34.5% increase in revenue to $374.2 million and an even more impressive 53.3% lift in normalised net profit after tax and before amortisation (NPATA) to $18.4 million.

Although the pandemic is likely to stifle its growth in FY 2021, I believe its long term outlook is as positive as ever and expect very strong earnings and dividend growth over the 2020s. At present, I estimate that it will pay a 9.5 cents per share fully franked dividend in FY 2021. Based on the current People Infrastructure share price, this gives investors an attractive 3.1% forward dividend yield.

More reading

• Brokers name 3 ASX shares to buy right now
• Why EOS, Jumbo, Nearmap, & OceanaGold shares are dropping lower today
• ASX 200 sinks 2%, Corporate Travel (ASX:CTD) soars 8%
• 2 exciting ASX mid cap ASX growth shares to buy for the long term
• Why the Jumbo (ASX:JIN) share price is moving higher today

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Jumbo Interactive Limited. The Motley Fool Australia owns shares of and has recommended Jumbo Interactive Limited. The Motley Fool Australia has recommended People Infrastructure 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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On Thursday the S&P/ASX 200 Index (ASX: XJO) returned to form and raced notably higher. The benchmark index climbed 1% to 5,872.9 points.

Will the market be able to build on this on Friday? Here are five things to watch:

ASX 200 expected to fall.

It looks set to be a disappointing end to the week for the ASX 200 despite a solid night of trade on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 26 points or 0.45% lower this morning. Overnight the Dow Jones rose 0.1%, the S&P 500 climbed 0.5%, and the Nasdaq stormed 1.4% higher.

Oil prices sink lower

Energy shares such as Beach Energy Ltd (ASX: BPT) and Woodside Petroleum Limited (ASX: WPL) could tumble lower on Friday after oil prices sank lower.  According to Bloomberg, the WTI crude oil price is down 3.9% to US$38.65 a barrel and the Brent crude oil price has dropped 3.5% to US$40.83 a barrel. A weak demand outlook and higher than expected OPEC production weighed on prices.

Gold price rises.

Gold miners such as Evolution Mining Ltd (ASX: EVN) Northern Star Resources Ltd (ASX: NST) could end the week on a positive note after the gold price pushed higher. According to CNBC, the spot gold price is up 0.8% to US$1,910.60 an ounce amid U.S. stimulus hopes.

Tech shares could storm higher.

It could be a good day for tech shares such as Afterpay Ltd (ASX: APT) and Appen Ltd (ASX: APX) after their U.S. peers stormed higher overnight. On Wall Street the tech-focused Nasdaq index recorded a strong 1.4% gain. The local sector has a tendency to follow the lead of the Nasdaq.

Mesoblast on watch.

It will be worth keeping an eye on the Mesoblast limited (ASX: MSB) share price on Friday. While the company isn’t expecting to make an announcement on whether the US FDA has approved its remestemcel-L (RYONCIL) product for paediatric patients with steroid-refractory acute graft versus host disease until Monday, there’s always a chance the FDA will move quicker than expected and give its verdict before the market open. The Mesoblast share price will remain halted until its release.

More reading

• Why the Mesoblast (ASX:MSB) share price is in a trading halt
• ASX 200 rises 1%, Reliance Worldwide (ASX:RWC) climbs 11%
• ASX big bank profits haunted by zombie mortgages
• ASX 200 up 1.6%: CBA higher on COVID-19 loan deferrals update, Reliance rockets
• Investors push for 40% women in ASX 200 exec roles

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO and Appen 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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Ah, diversification… This has to be one of the most overused words in investing. You’ll hear almost every market commentator touting the benefits of diversification (including us Fools). We all know the dangers of being under-diversified, epitomised with that equally-overused phrase ‘don’t have all your eggs in one basket’. But is it possible to be too diversified?

What is ‘diversification’?

Diversification in its essence refers to spreading out your capital among different investments to mitigate risk. It is certainly a theory that has merit. One of the founders of modern portfolio theory (a prominent theory of how markets operate that we Fools often disagree with), Harry Markowitz, famously called diversification “the only free lunch in finance”. And to some extent that’s true. It is possible to ‘diversify’ a portfolio in a way that boosts your potential returns without increasing the risk of losing your money.

The idea is that by spreading out your capital, you reduce the chances of a single event, whether that be relating to an individual company or an entire market (e.g. Australia), from decimating your portfolio. Take an investor who has all of their wealth in Sydney property. Well, that investor is highly exposed to a disruption in that one single market. If that investor sold a house or two and invested the profits in ASX shares, their diversification would increase. This is an example of when diversification is probably a wise and prudent thing to do.

But what about a pure portfolio of ASX shares?

Di-worse-ification

Well, I think some investors do get a little carried away with diversification. We Fools like to advocate that all active investors get to a point where they have 15-20 different and uncorrelated ASX shares for diversification purposes. We also think that adding a few international shares is a good idea as well, just in case the entire Australian economy is hit with some kind of black swan event.

But you could take it a lot further. ASX shares are just one asset class of many. There are also government bonds, corporate bonds, precious metals, property, cryptocurrencies and cash to consider. There’s also a range of more eccentric investment options too, like collectables, fine wine, art.. .the list goes on.

And in the world of shares, there are also countless options. Every exchange-traded fund (ETF) provider on the market will tell you that buying their ETF is a good idea for diversification. Why stop at ASX and US shares? Why not get exposure to European shares with the iShares Europe ETF (ASX: IEU)? Or Asia with the Vanguard FTSE Asia ex-Japan Shares Index ETF (ASX: VAE)?. Or the ‘Far East’ with the iShares MSCI EAFE ETF (ASX: IVE)? You get the idea… Going down this path won’t lead to a good long-term outcome in my view.

Foolish takeaway

There are literally thousands of ETF combinations you could have in your portfolio, but there does come a point when you’re changing the oil in a rental car, so to speak. I don’t think you really gain much benefit from holding a portfolio of 20 diversified companies against a portfolio of 1,000 companies, or a collection of ETFs covering every corner of the investing world. If you choose to invest passively, just one market-wide ETF does give you quite a lot of diversification. And if you actively invest, I think you can get as much balance as you need with a portfolio of 15-20 shares (perhaps with some international ones thrown in for good measure). So don’t get too carried away with diversification, you might end up diversifying your profits if you do!

More reading

• Where I’d invest $10,000 into ETFs right now

Motley Fool contributor Sebastian Bowen 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 Aeris Environmental Ltd (ASX: AEI) share price rose today after the company announced a new partnership. The Aeris share price closed the day 6.93% higher at a price of 54 cents per share.

What Aeris does

Aeris is an Australian company that develops and manufactures environmentally friendly technology in order to save energy, increase efficiency and keep workplaces and equipment clean. The company has seen large demand for its product thanks to the global coronavirus pandemic.

Aeris offers a management tool called AerisVIEW that is uniquely scalable across a range of climate controlled environments such as buildings and vehicles.

What happened

Aeris announced that it has entered into a partnership with SABCO, which specialises in cleaning and garden products. SABCO is wholly owned by American company Libman. It is estimated that Libman has 27% of the United States market share for cleaning tools. The connection may excite Aeris shareholders as it points to increased market opportunity.

The partnership relates to SABCO’s ‘Ultrashield Pro, Powered by Aeris’ product. It is set to be launched nationwide and stocked in over 250 Bunnings locations around Australia. Aeris has received an opening order worth $415,000 for the product.

Aeris’ Chief Executive Officer, Peter Bush, said of the partnership:

We are proud to have partnered with SABCO, the leading Australian consumer brand in the category. This opportunity allows us to grow a core range of Aeris’ product portfolio into the Australian retail channel. SABCO’s relationship with The Libman Group creates leverage into North America and beyond, with a strong partner that has over a century of experience in the field.

About the Aeris share price

The Aeris share price has risen on the news, closing almost 7% up for the day. This is one share that has enjoyed real tailwinds from COVID-19, posting a remarkable 91% increase since the start of the year.

More reading

• Is your ASX share portfolio too diversified?
• 3 ASX shares I want to buy in October
• Why the Mesoblast (ASX:MSB) share price is in a trading halt
• Where to now for the Flight Centre (ASX:FLT) share price?
• ASX 200 rises 1%, Reliance Worldwide (ASX:RWC) climbs 11%

Motley Fool contributor Daniel Ewing 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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Well, October is here, and we are now officially in the last quarter of 2020 — a year that many more of us than usual are probably looking forward to seeing the back of. Small milestones like this occasion are always a good opportunity for us to take stock and have a think about where our portfolios are standing and where we’d like to see them go. So in this spirit, here are 3 ASX shares that I’m looking to buy or top up on this month.

3 ASX shares to buy this October

1) WAM Research Limited (ASX: WAX)

WAM Research is a listed investment company (LIC) that I already own. Even so, this LIC has such a high and robust dividend that I would love to add some more funds at the right price. On current pricing, WAM Research’s annual dividend of 9.8 cents per share is yielding a whopping fully franked 6.45%. Since the company told us last month that there are 34.9 cents per share left in WAM Research’s profit reserves, this dividend looks well-funded and sustainable to me. Unfortunately, at the current price of $1.52 a share, this company is trading at quite a premium to its underlying net tangible assets of $1.09 per share (as of 20 August). If this gap narrows in October, I’ll be topping up my holdings of this company.

2) Cochlear Limited (ASX: COH)

Cochlear was my Foolish stock pick of the month, so it would be remiss of me to neglect this company here. As I pointed out, Cochlear is a global leader in the healthcare space and dominates the market for hearing aids and assistance. For its customers, dealing with Cochlear is pretty much a necessity rather than a choice, which is great for this company’s bottom line. The impact of the pandemic is still well-and-truly priced into Cochlear shares right now, but I think the company will return to its pre-COVID form in FY21 and beyond. As such, this is a company I’m strongly considering adding to my portfolio in October.

3) Magellan Financial Group Ltd (ASX: MFG)

Magellan is the third ASX share I’m looking at this October. This company is the best funds management business in the country, in my view. It has grown enormously over the past few years, partly through both the stellar reputation of the company and of its chief investment officer, billionaire Hamish Douglass, and partly through an innovative line of new products. I’ve been impressed with the launch of the new Magellan High Conviction Trust (ASX: MHH) last year, which already has more than $980 million in funds under management. The new venture with Barrenjoey Capital is also a good move, in my view. I think Magellan will continue to grow at a very healthy pace over the next decade (especially with interest rates at near-zero), and so this company would be another ASX share I would love to add this October.

More reading

• 2 strong ASX shares I’d buy today for growth and income
• How to generate $50k a year from ASX dividends
• Top ASX Stock Picks for October 2020
• 3 ASX 200 passive investing shares to buy today
• Is the WAM Capital (ASX:WAM) 10% dividend yield sustainable?

Sebastian Bowen owns shares of Magellan High Conviction Trust and WAM Research Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. The Motley Fool Australia has recommended Cochlear 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 Mesoblast limited (ASX: MSB) share price was out of action on Thursday and missed out on the S&P/ASX 200 Index (ASX: XJO) rebound following a trading halt request prior to the market open.

Why is the Mesoblast share price in a trading halt?

This morning the biotech company requested a trading halt pending the release of an announcement.

That announcement relates to the United States Food and Drug Administration’s review of its Biologics License Application for RYONCIL (remestemcel-L). Mesoblast is seeking approval for its use in treating paediatric patients with steroid-refractory acute graft versus host disease (SR-aGvHD).

The United States Food and Drug Administration gave its priority review date of 30 September but appears to be either behind schedule or taking its time with the review.

Priority reviews are given to drugs treating serious conditions with the potential to provide significant improvements in safety or effectiveness over existing therapies. They traditionally cut the time in which the administration aims to take action on a drug’s application from ten months to six.

What are the chances of success?

Going into the review, Mesoblast was well-placed to gain approval thanks to its meeting with the Oncologic Drugs Advisory Committee of the Food and Drug Administration in August.

At the meeting, the Committee voted overwhelmingly (9 to 1) in favour that the available data supports the efficacy of remestemcel-L in paediatric patients with SR-aGvHD.

This was a big win the company, as the ODAC plays a key role in whether certain drugs get approval or not. Failure to gain the support of the ODAC would make it almost impossible to then gain FDA approval.

What now?

Mesoblast requested that the trading halt continues until it makes its announcement. This is expected to be on Monday 5 October 2020.

This could be an indication that it expects the Food and Drug Administration to make its decision on Friday night (Australian time).

More reading

• ASX 200 up 1.6%: CBA higher on COVID-19 loan deferrals update, Reliance rockets
• 5 things to watch on the ASX 200 on Thursday
• ASX 200 ends the day flat, BOQ (ASX:BOQ) shares drop on impairments
• Why a2 Milk, Bank of Queensland, Mesoblast, & Northern Star are dropping lower today
• Is the Mesoblast (ASX: MSB) share price still good value?

Motley Fool contributor James Mickleboro 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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It has been a whirlwind for Flight Centre Travel Group Ltd (ASX: FLT) and its shareholders during 2020. The travel agency has effectively come to a standstill with the Flight Centre share price heavily affected due to COVID-19 restrictions. 

Flight Centre shares closed Thursday’s session 2.91% higher at $14.16. This is a far cry from its highs of around $40 reached at the start of the year.

Let’s take a closer look at the business and try to gauge whether the Flight Centre share price can make a recovery any time in the not too distant future.

Financial impact

Flight Centre is facing the most challenging year in its history. Revenue has plummeted from widespread travel restrictions that were applied in March. The company reported a 99.4% decrease in Australian outbound travel during Q4 FY20.

In addition, Flight Centre recorded a high cost base of $230 million per month in its FY20 result. The travel agency raised $900 million in April via a $700 million capital raise and $200 million increase in debt facilities. Despite having more than $1.1 billion in liquidity, plans have been implemented to reduce costs by 70% and preserve cash.

On a positive note, the company’s corporate segment is recovering at a more rapid pace than the leisure sector. This is due to customers meeting the ‘essential services’ criteria, which are related to mining/resources, health/pharma and government industries.

The business sector recorded a profit of $74 million over the last 12 months, highlighting resilience in corporate travel.

Store closures

With continuing uncertainty around when and how the government’s travel restrictions will be lifted, Flight Centre has been closing down its stores. Just yesterday, the company announced it will shut down another 91 stores across Australia. This brings a total of 408 stores closed since the pandemic began, leaving 332 stores to face an uncertain future.

Flight Centre said it simply cannot afford to operate at the scale it has been in the past. The company’s Australian managing director, James Kavanagh, commented, “We are taking steps to preserve as many roles as possible for the future, while building a smaller but stronger overall network.”

Furthermore, CEO Graham Turner said, “The company has used the latest cost-cutting measures to argue that Australia’s economic health demands that borders are opened.”

Mr Turner also said, “We need the Australian borders open, we need the New Zealand trans-Tasman bubble up and running as soon as possible.”

Can the Flight Centre share price recover?

Flight Centre looks set to continue hibernating much of its business for the foreseeable future as global travel activity has been significantly reduced. While I think the company will again become profitable as a whole, I can’t see this happening in the near term.

In my opinion, the Flight Centre share price is accurately reflective of where the business currently stands. The travel agency is cashed up but still faces a high cash-burn rate in a zero-revenue environment.

For now, I will be staying away from investing in Flight Centre until I can see a meaningful road to recovery.

More reading

• Why Flight Centre, MoneyMe, Paradigm, & Zip shares are pushing higher today
• Are ASX travel shares like Webjet (ASX:WEB) set to soar?
• ASX 200 up 0.1%: a2 Milk crashes lower, Flight Centre and Webjet surge higher
• Why Flight Centre, OneVue, Paradigm, & PointsBet shares are charging higher
• These are the 10 most shorted ASX shares

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel Group 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 S&P/ASX 200 Index (ASX: XJO) went up by 1% today to 5,873 points.

Here are some of the highlights from the ASX 200:

Reliance Worldwide Corporation Ltd (ASX: RWC)

The Reliance Worldwide share price jumped 11% after releasing a first quarter trading update to 25 September 2020 as part of an investor day presentation.

The plumbing business said that, overall, the sales performance in each of its three regions has continued to track in line (in constant currency terms) with what was reported when it announced its FY20 result.

The Americas region showed sales growth of 22% in July, 15% in August and 29% in September.

APAC has seen sales growth of 5% in July, a decline of 2% in August and growth of 4% in September.

The EMEA region saw a sales decline of 4% in July, growth of 5% in August and growth of 24% in September.

Reliance Worldwide’s CEO Heath Sharp said that FY21 has started well for the ASX 200 share, but forward visibility remains limited in most markets due to the ongoing impacts of COVID-19:

“The first quarter of the 2021 financial year has been particularly strong from a sales perspective. Looking ahead, we remain cautious. The US has been boosted by the surge in DIY activity and the return of construction activity to pre-COVID levels, but without further government stimulus measures this growth is likely to slow. We expect some softening in the Australian market as the reduction in new housing construction approvals leads to lower building activity.

“In the UK we are uncertain as to where underlying demand levels will settle once the pent-up demand for products and plumbing services has been satisfied. We are also watchful as to the impact the recent rise in COVID-19 case numbers may have on demand and plumbing activities there. Given the continuing uncertainties in all our markets as a result of COVID-19 we would caution against extrapolating the first quarter’s sales performance for the full year.”

Lynas Corporation Ltd (ASX: LYC)

The Lynas share price went up more than 5% after investors sensed the ASX 200 share was a beneficiary of an announcement from the US.

According to reporting by media, such as the Australian Financial Review, President Trump has used government power to allow direct state investments into ‘critical minerals’ projects in Australia to reduce the reliance of the US on Chinese supplies. This could be helpful for the ASX 200 share.

As one of the world’s biggest non-Chinese rare earth miners, Lynas is positioned to benefit. It’s already got a contract to build a processing facility in Texas.

The business could also benefit from Australia’s own plan to invest in its manufacturing capabilities. 

Commonwealth Bank of Australia (ASX: CBA)

CBA announced its August data for loan repayment deferrals today. The CBA share price went up almost 1%. 

The ASX 200 bank said that the amount of loan deferrals that expired or were exited in August was $5.7 billion.

CBA revealed that the number of home loans still being deferred in August 2020 was 7.4% of the portfolio, down from 7.6% in July and 8.2% in June.

New approved or extended loan deferrals was $2.3 billion in August, with $1.7 billion of this was an extension by the ASX 200 bank of an existing deferral.

CBA CEO Matt Comyn said: “Since the onset of the pandemic, our priority has been to do what we can to assist our customers in managing the challenges of COVID-19, including providing temporary loan repayment deferrals on approximately 250,000 home, personal and business loans. As we approach the end of the initial deferral periods, we have been contacting all customers with deferred loans to talk with them about their options, including returning to full or part payment, or converting their loans to interest only. Many of those contacted will be able to recommence their repayments. For customers who are facing financial hardship, we are reaching out to offer solutions tailored to their individual needs.”

More reading

• ASX big bank profits haunted by zombie mortgages
• Lynas (ASX: LYC) share price boosted 5% by PM’s budget plan
• ASX 200 up 1.6%: CBA higher on COVID-19 loan deferrals update, Reliance rockets
• Why BHP, Paradigm, Reliance, & SeaLink shares are charging higher today
• Investors push for 40% women in ASX 200 exec roles

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 Reliance Worldwide Limited. The Motley Fool Australia has recommended Reliance Worldwide 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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If you’re struggling with the low interest rates on term deposits, then you might want to look to the share market.

The Australian share market is home to a large number of shares that are providing investors with superior yields.

But which ASX dividend shares should you buy today? Two that I’m a big fan of are listed below:

Telstra Corporation Ltd (ASX: TLS)

The first dividend share to buy is Telstra. I’ve been very impressed with the progress it is making with its T22 strategy and firmly believe that it has positioned it for a return to growth in the near future. Especially now the NBN headwind is easing and 5G internet has arrived. The latter looks likely to give its key mobile revenues a boost over the coming years. Combined with its rampant cost cutting and the simplification of its business, things are looking increasingly positive.

In addition to this, I’m optimistic that Telstra can avoid a dividend cut in FY 2021. This could be achieved if it switches its dividend policy to be based on its free cash flow rather than accounting earnings. If the company does make the switch, based on the current Telstra share price, it would offer investors a very generous 5.7% yield.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

Another option for income investors to consider buying is an exchange traded fund. The Vanguard Australian Shares High Yield ETF is invested in a total of 66 high yield shares. This means income investors are able to diversify their portfolio significantly through just a single investment. This is a big positive in my eyes. After all, diversity has proven to be very important during the pandemic due to dividend deferrals and suspensions.

Among its holdings you will find the big four banks, BHP Group Ltd (ASX: BHP), and Telstra. Based on the current Vanguard Australian Shares High Yield ETF share price, I estimate that it offers a FY 2021 dividend yield in the region of 4% to 5%.

More reading

• 3 ASX shares for growth, income, and value investors to buy in October
• New $190 million tech share listing on ASX
• Telstra (ASX:TLS) launches new 5G NBN alternative
• Is the TPG (ASX:TPG) share price a buy today?
• Are these high yield ASX dividend shares worth buying?

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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