The Federal Reserve will bar big banks from increasing their dividend payments, following the central bank’s annual stress tests that included a “sensitivity” analysis incorporating the impact of the COVID-19 crisis. Calvin Schnure, Nareit Senior Economist & Former Federal Reserve Economist, joins Akiko Fujita to discuss.
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Bess Freedman, Brown Harris Stevens CEO, joins Yahoo Finance to talk about demand in the housing market and what New York luxury real estate is like during COVID-19.
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I think one of the best ways to set yourself up for an early retirement is by having a passive income stream that is reliable and has the potential to grow over time.
But this doesn’t necessarily mean you should buy the highest yielding shares on the ASX.
Instead, I would suggest you buy shares which pay dividends (even if the yield is small) and have the potential to grow them strongly over the next decade or two.
Two that I think tick a lot of boxes are listed below. Here’s why I would buy them:
I think Goodman Group would be a great option for investors. I’m a big fan of the integrated commercial and industrial property group due to the way its portfolio is positioned. The quality of its portfolio has been on display for all to see in FY 2020. Despite the pandemic, Goodman has been able to reaffirm its earnings and distribution guidance this year.
This is because of its exposure to in-demand markets such as ecommerce, logistics, food, consumer goods, and the digital economy. I’m confident these positive trends will continue for some time to come. This should put Goodman in a strong position to deliver solid earnings and distribution growth for a long time to come. At present its shares offer an estimated forward 1.9% distribution yield.
Another option to consider is this wine company. Although its performance in FY 2020 has been disappointing (and not just because of the pandemic), I feel Treasury Wine is now on a path to sustainable growth. Especially after announcing its intention to spin off its Penfolds business and associated assets into a separate ASX listed company. Management believes the demerger will facilitate the creation of incremental long-term value for shareholders and I agree.
In light of this, now could be an opportune time to make a patient long term investment in its shares. Not least for its dividend. While I expect its to be cut down to a level that provides a ~2.5% yield in FY 2021, I suspect it could be back to previous levels in FY 2022 once things normalise again. This would be a fully franked 3.7% yield based on FY 2019’s dividend. After which, I expect it to grow at a decent rate over the decade that follows.
3 “Double Down” Stocks To Ride The Bull Market
Motley Fool resident tech stock expert Dr. Anirban Mahanti has stumbled upon three under-the-radar stock picks he believes could be some of the greatest discoveries of his investing career.
He’s so confident in their future prospects that he has issued “double down” buy alerts on each of these three stocks to members of his Motley Fool Extreme Opportunities stock picking service.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates 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 Federal Reserve will bar big banks from increasing their dividend payments, following the central bank’s annual stress tests that included a “sensitivity” analysis incorporating the impact of the COVID-19 crisis. Calvin Schnure, Nareit Senior Economist & Former Federal Reserve Economist, joins Akiko Fujita to discuss.
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Stocks closed out Friday’s session sharply lower after Texas and Florida reversed their reopening processes and closed bars and limited restaurant capacity following surges in coronavirus cases. Each of the three major indices fell more than 2%, and the S&P 500 dropped to its lowest level in two weeks.
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One of the best performers on the Australian share market in 2020 has been the De Grey Mining Limited (ASX: DEG) share price.
Since the start of the year, the gold-focused mineral exploration company’s shares have jumped an incredible 1,645%.
To put that into context, if you had invested $10,000 into its shares at the start of the year, you would have just short of $165,000 today.
Investors have been scrambling to get hold of the company’s shares this year thanks to a series of positive updates from its Hemi prospect in Western Australia.
Drilling results at the prospect have delivered outstanding results over the last few months and appear to indicate that the company is sitting atop a major resource with the added bonus of having world class infrastructure on its doorstep.
The latter will be a big positive if the prospect becomes operational in the future.
Last week its drilling activities revealed further high grades and an expanded footprint at the Aquila Zone within the Hemi prospect.
De Grey Exploration Manager, Phil Tornatora, commented: “The Aquila style gold mineralisation identified in highly altered intrusion 400m to the west is an exciting and significant development as it opens up the overall strike potential of the deposit.”
“The broad high grade mineralisation announced today is particularly encouraging demonstrating the potential to rapidly add to Aquila’s gold endowment,” he added.
Further diamond drilling is coming with the aim of extending Aquila to at least 300 metres below surface along the entire strike of the deposit. Management also notes the potential to extend Aquila a further 400 metres to the west under an interpreted shallow veneer of sediments.
I’ve been very impressed with its drilling results and I’m confident that De Grey has discovered a real gem.
However, with its market capitalisation now over $1 billion, I think the easy gains are gone. In light of this, I would suggest investors wait until the full resource is known and feasibility studies are undertaken.
We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
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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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If you’re looking for new additions to your portfolio in July, then I think the three ASX shares listed below would be great options.
I believe these shares are some of the best the ASX has to offer and could generate market-beating returns for investors in the future.
Here’s why I rate them as five-star stocks:
The first five-star stock I would buy is Appen. This growing tech company has a team of one million plus crowd-sourced experts, preparing the data for the artificial intelligence (AI) and machine learning models of some of the biggest tech companies in the world. This includes the likes of Facebook, Microsoft, and Apple. And thanks to the acquisition of the Figure Eight business last year, the company now has strong offering for government customers. This is a lucrative market given that the US government has a US$5 billion AI budget and the UK government has a £2.3 billion AI budget. Overall, I believe Appen is well-positioned to continue growing its earnings at an above-average rate for many years to come.
The second five-star stock to consider buying is CSL. I think the biotherapeutics giant is a fantastic long term investment option for investors. This is due to the company’s world class CSL Behring and Seqirus businesses. These two businesses have leading therapies and vaccines, a growing plasma collection network, and extremely promising research and development pipeline. The latter contains a number of products that have the potential to generate billions of dollars of sales in the future if they are commercialised. I believe this puts the company in a position to continue generating strong returns for investors over the next decade and beyond.
While not strictly an ASX share, I believe the BetaShares NASDAQ 100 ETF is a five-star option for investors. In fact, this exchange traded fund gives investors access to a large number of companies that are deserving of five-star status. These include Apple, Amazon, Facebook, Microsoft, Nvidia, and Google parent, Alphabet. It also includes a number of up and coming companies that could be stars of the future like online conferencing company Zoom and biotech company Seattle Genetics. I believe the majority of companies on the NASDAQ 100 are well-placed to grow at a quicker than average rate in the future. This could ultimately drive strong returns for investors over the next decade.
We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS and CSL Ltd. The Motley Fool Australia owns shares of Appen Ltd. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS. 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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Although there have been a large number of dividend cuts and deferrals this year because of the pandemic, there are still plenty of companies sharing their profits with shareholders.
Three quality shares which continue to perform strongly and look set to pay generous dividends over the next 12 months and beyond are listed below. Here’s why I think they could be great options:
The first dividend share I would consider buying is BHP. I think the mining giant is a top option right now due to its world class and low cost operations and favourable commodity prices. The latter is particularly the case with iron ore. Thanks to supply disruptions and robust demand, the steel making ingredient is currently commanding a price of over US$100 a tonne. This means BHP’s iron ore operations are generating high levels of free cash flow. The majority of which I expect to be returned to shareholders. I estimate that BHP’s shares currently provide investors with a forward fully franked ~5% dividend yield.
BWP Trust is a real estate investment trust and the landlord to 68 Bunnings Warehouse stores. While many retail store landlords have been negatively impacted by the pandemic, BWP has continued to collect rent as normal. I believe this is a testament to the quality of its tenancies. And given how the government is supporting the renovation market with additional stimulus, I believe Bunnings is well-placed to continue its growth over the coming years. Overall, I feel this leaves BWP positioned to increase its rental income and distribution at a modest rate for the foreseeable future. At present I estimate that its shares offer a 4.7% FY 2021 distribution yield.
A final dividend share to consider buying is Wesfarmers. I’m a big fan of the conglomerate due to its strong businesses and their positive long term outlooks. As I mentioned above, I believe the Bunnings business is well-placed for growth over the medium term thanks to its high quality business model and government stimulus. This is a big boost for Wesfarmers as it is the biggest contributor to the company’s earnings now. Outside this, I expect Wesfarmers to add to its portfolio with value accretive acquisitions in the near term. Combined, this could lead to its earnings and dividends growing at a solid rate over the next decade. At present I estimate that its shares offer a fully franked 3.7% FY 2021 dividend yield.
3 “Double Down” Stocks To Ride The Bull Market
Motley Fool resident tech stock expert Dr. Anirban Mahanti has stumbled upon three under-the-radar stock picks he believes could be some of the greatest discoveries of his investing career.
He’s so confident in their future prospects that he has issued “double down” buy alerts on each of these three stocks to members of his Motley Fool Extreme Opportunities stock picking service.
*Extreme Opportunities returns as of June 5th 2020
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of 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.
The post 3 fantastic ASX dividend shares to buy next week appeared first on Motley Fool Australia.
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The recent share market crash has caused many high-quality dividend shares to trade on low valuations. In the short run, their prices could move lower due to the economic impact of coronavirus. But over the long run, they have the potential to deliver a sound recovery.
Furthermore, with interest rates likely to remain at low levels as policymakers seek to support the economy during an uncertain time, the yields available from dividend shares could make them highly attractive relative to other income-producing assets. This may catalyse their prices over the coming years.
The world economy is likely to continue to face risks over the coming years that could negatively impact on its growth rate. For example, there could be a second wave of coronavirus in the latter part of 2020. There may also be ongoing geopolitical uncertainty between the US and China that could cause a deterioration in global economic activity.
Despite this, now could be an opportune moment to buy dividend shares. In many cases, investors have factored in the dangers facing the world economy over the medium term. Therefore, long-term investors can take advantage of lower share prices to obtain more attractive risk/reward opportunities. Over time, investor sentiment and the world economy’s growth rate are likely to recover, which may produce rising dividends and improving share price performances.
Even if there are difficulties ahead for many dividend shares, equities have a solid track record of delivering long-term growth. For example, the FTSE 100 and S&P 500 have recorded annualised total returns that are in the high-single digits since their inceptions. Therefore, even if they experience slower growth for a period of time, improved performance is likely to be ahead.
With a large proportion of the 2 indexes’ returns having been derived from the reinvestment of dividends, purchasing a selection of income shares could prove to be a sound investment for a wide range of investors. They may, for example, offer investment appeal for growth investors as well as those individuals who are seeking to generate a passive income from their portfolio.
Furthermore, dividend shares could become increasingly popular over the coming years. Low-interest rates look set to remain in place over the next few years, as policymakers seek to revitalise the economic outlook. This could make the returns on dividend shares seem far more appealing on a relative basis than other income-producing assets such as cash and bonds. Therefore, demand for income shares may increase, which could boost their prices.
As such, now could be the right time to buy a diverse range of dividend shares and hold them for the long run. They may experience some uncertainty in the near term but have the potential to offer a strong total return as the share market recovers.
We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
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Motley Fool contributor Peter Stephens 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 coronavirus pandemic has forced individuals and society to adapt in order to function and endure. Here are 3 ASX shares that I think have adapted well to these changes and could prosper in 2020 and beyond.
The essential services provided by Woolworths were highlighted during the pandemic, with the supermarket giant experiencing unprecedented demand. The pandemic also saw consumers grow their appetite for online grocery delivery services.
In order to accommodate the change in consumer behaviour, Woolworths recently doubled its capacity for online grocery deliveries as the company expects $3 billion in e-commerce sales next year. The supermarket giant has also hired an additional 5,000 third-party couriers to strengthen its current fleet of 800 delivery trucks in order to service more delivery orders.
In addition, Woolworths has announced plans to invest approximately $780 million on 2 automated distribution centres in order to streamline its supply chains.
Despite the financial turmoil caused by the pandemic, it has unearthed a potential gem in Marley Spoon. Marley Spoon is a subscription-based meal-kit provider that has capitalised on changing consumer behaviour as a result of COVID-19. The company delivers fresh ingredients directly to consumers and operates in 3 primary regions: Australia, the US, and Europe.
Marley Spoon reported that 7.5 million meals were delivered in the first quarter of 2020, resulting in the company’s first ever positive cash flow since its IPO. The company also saw a 46% increase in revenue for the first quarter, with growth accelerated by the coronavirus pandemic.
With many consumers opting for the convenience of services provided by Marley Spoon, the company could be well poised for future growth. As a result, Marley Spoon has already completed a $16.6 million capital raising in order to strengthen its balance sheet and fund continued global expansion.
Recently, I wrote an article highlighting how the market capitalisation of Kogan.com is 5 times that of Myer Holdings Ltd (ASX: MYR). In my opinion, this reflects the changing of the guard in the retail sector, as consumers opt for the convenience of online shopping over traditional brick-and-mortar shops.
As at 31 May, Kogan saw its active customer base grow to over 2 million, with 126,000 additional customers joining the company in May. The online retailer also reported a 100% increase in gross sales across the April and May period in comparison with the same period last year and also reported a 130% surge in gross profit for the period.
The demand has also been reflected in the Kogan.com share price, which has surged more than 310% from late March and is currently trading at all-time highs. The online retailer recently completed a $115 million capital raising in order to accelerate future acquisition opportunities. Notable acquisitions made by Kogan include Dick Smith and furniture and homeware retailer Matt Blatt.
In my opinion, the 3 shares mentioned are well positioned to benefit from changing consumer needs and behaviours. I think a prudent strategy for investors is to compile a watchlist of ASX shares that could also thrive in the next 10 years and wait for a good buying opportunity.
3 “Double Down” Stocks To Ride The Bull Market
Motley Fool resident tech stock expert Dr. Anirban Mahanti has stumbled upon three under-the-radar stock picks he believes could be some of the greatest discoveries of his investing career.
He’s so confident in their future prospects that he has issued “double down” buy alerts on each of these three stocks to members of his Motley Fool Extreme Opportunities stock picking service.
*Extreme Opportunities returns as of June 5th 2020
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Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd. The Motley Fool Australia owns shares of Woolworths Limited. The Motley Fool Australia has recommended Kogan.com 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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