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Big oil might really see a decade of change in one year: Morning Brief
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Boeing’s Aircraft Deliveries Drop In May As Cancellations Rise
Boeing Co.’s (BA) aircraft deliveries continued to decline in May, while order cancellations increased as travel restrictions tied to the coronavirus pandemic have throttled commercial jet demand.Last month, the ailing plane maker delivered 4 planes, compared with 6 in April, adding up to a total of 58 in the first five months of this year, as air travel demand has been halted in an effort to contain the coronavirus pandemic. The report comes after France-based planemaker Airbus SE (EADSF) said earlier this week that it did not receive a single order in May.Boeing reported order cancellations of another 18 planes last month, including 14 of its 737 MAX jets. Last year, the U.S. planemaker suspended production of the MAX jets following a second crash. It recently resumed production of the jets at its factory in Renton, Washington, albeit at a low rate.Against this, Boeing did get 9 new orders for wide body planes, which included two 777 freighters, one 737 NG and one 767 freighter.The coronavirus travel restrictions have resulted in a deep cut in the number of commercial jets and services Boeing customers need over the next few years. As such, global airlines suffering billions of dollars in losses have been seeking to cancel or delay some of the orders they have with Boeing. COVID-19 has hit the planemaker very hard, with shares still down 35% since the beginning of the year.The stock dropped 6% to $216.74 on Tuesday. Commenting on the report, five-star analyst Cai Rumohr at Cowen & Co, said that he attributed the “very weak” deliveries in May to COVID-19 shutdowns and flight restrictions. Rumohr reiterated his Hold rating on the stock with a $150 price target.Looking ahead to Q2, Rumohr sees "headwinds of sharply lower commercial delivery/service sales than in Q1, continuing abnormal production/severance expense, and possible further MAX compensation reserves". The analyst estimates that Q2 cash outflow could hit $9 billion with a resumption of a dividend unlikely until 2024.Wall Street analysts are cautiously optimistic on the stock. Nine Buys, 11 Holds, and 1 Sell rating give Boeing a Moderate Buy analyst consensus, with the $177.89 average analyst price target reflecting 18% downside potential in the shares over the coming year. (See Boeing stock analysis on TipRanks).Related News: Airbus Gets No New Aircraft Orders In May Amid Aviation Crisis Boeing CEO Says ‘Likely’ A Major Airline Could Fold In 2020 Colombian Carrier Avianca Files for Bankruptcy Protection Due to Coronavirus Woes More recent articles from Smarter Analyst: * Merck’s Keytruda Fails To Meet Endpoints In Bladder Cancer Trial * Five Below Surges 11% After-Hours Despite Earnings Miss * Chewy Posts Strong Beat & Raise Quarter As Growth Accelerates * Denali Drops 7% In After-Market On Halt Of DNL747 Drug Study
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Japan’s AnGes speeds towards 2021 rollout in coronavirus ‘vaccine war’
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2 top ASX dividend shares for income in 2020
Finding good-quality ASX dividend shares for income in 2020 has become something of a sport. This year, the normal ASX dividend paradigm has been turned on its head.
The ASX banks which were the kings of the ASX divided hill are now its paupers. Dividend aristocrat, Ramsay Health Care Limited (ASX: RHC) has suspended its dividends – ending a 20-year streak of dividend growth. Shares like Transurban Group (ASX: TCL) and Sydney Airport Holdings Pty Ltd (ASX: SYD) which used to be regarded as the safest income providers on the ASX are now struggling to tell investors how much to expect this year.
Considering all of these factors, I think we need to look outside the box for income in 2020. So here are 2 ASX dividend shares that I would consider if I were seeking top-quality income this year.
SPDR S&P Global Dividend Fund (ASX: WDIV)
This exchange-traded fund (ETF) invests in a basket of global shares that are screened for dividend reliability. In order to make the cut, WDIV’s holdings need to have either grown, or at least maintained their dividend payments over the past 10 years. As such, I think this is a great option for a diversified income investment in 2020.
Some of this ETF’s top holdings include Freenet AG, Enagas, Japan Tobacco and our own AGL Energy Limited (ASX: AGL). It’s also fairly well balanced across many different countries (19 in total). WDIV currently offers a trailing dividend yield of 6.13%.
Rio Tinto Limited (ASX: RIO)
I think the ASX resources sector is one of the best avenues to explore for ASX dividend shares in 2020. Most commodity prices have held up remarkably well across the board during the coronavirus pandemic – especially iron ore. And that’s primarily what mining giant Rio Tinto is in the business of extracting. Rio has iron ore mines all over the world, as well as several other smaller operations for diamonds, copper and gold.
With iron ore prices now comfortably sitting at multi-year highs above US$100 per tonne, Rio looks set to be able to fund generous dividend payments to its shareholders this year. On current prices, Rio shares are offering a trailing dividend yield of 5.66%, or 8.09% grossed-up. I wouldn’t be too surprised if Rio tops this trailing yield in 2020. Especially if iron ore continues to stay near its current levels.
For more shares you don’t want to miss, make sure you check out the free report below!
One trick to potentially generating life-changing wealth from the stock market is to buy early-stage growth companies when their share prices still look dirt cheap.
Motley Fool’s resident tech stock expert Dr. Anirban Mahanti has identified 5 stocks he thinks are screaming buys. And you can buy them now for less than $5 a share!
* Extreme Opportunities returns as of June 5th 2020
More reading
- 2 quality ASX dividend shares to buy today
- 3 safe and strong ASX 50 shares to buy right now
- Are the Rio Tinto, Fortescue and BHP share prices a buy right now?
- Where to invest $20,000 into ASX shares immediately
- ASX 200 Weekly Wrap: ASX bulls crash through 6,000 points
Motley Fool contributor Sebastian Bowen owns shares of Ramsay Health Care Limited and SPDR S&P Global Dividend Fund. The Motley Fool Australia owns shares of Transurban Group. The Motley Fool Australia has recommended Ramsay Health Care Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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2 ASX shares I’d buy in a heartbeat
ASX shares continue to rise with investor confidence seemingly growing every week.
Australia is getting close to the point of no new COVID-19 cases across the nation. Some ASX shares are soaring in reaction to how much better the outlook seems.
But there are still many places in the world where the number of infections is still rising.
With the current state of play domestically and abroad in mind, here are two ASX shares that I’d buy in a heartbeat:
Pushpay Holdings Ltd (ASX: PPH)
Pushpay is one of the businesses that is seeing an acceleration of growth due to the unfortunate circumstances. It’s an electronic donation business that enables people to digitally give to not-for-profit organisations.
A key part of US churches is the congregations. COVID-19 and social distancing makes church gatherings more difficult at the moment. That also means that getting cash donations can become problematic for those churches.
Pushpay’s system is perfect for this environment. The ASX share’s technology also allows churches to livestream to their congregations.
The large and medium church sector is a $1 billion revenue opportunity according to Pushpay’s management.
The ASX share is aiming to approximately double its earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) in FY21. Pushpay’s profit margins could keep rising as it gets bigger over time.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
There are few ASX shares that have stood the test of time like Soul Patts. It has been operating since the early 1900s. So it has already survived through the Spanish Flu, two world wars, the recessions and so on.
Soul Patts is invested in businesses that should be able to remain robust this year. Some large positions include TPG Telecom Ltd (ASX: TPM), Brickworks Limited (ASX: BKW) and Clover Corporation Limited (ASX: CLV).
The ASX share conglomerate continues to invest in new opportunities. It is reportedly about to start investing in regional data centres.
I think Soul Patts is one of those shares that you could invest in and potentially hold forever. Its ability to change its investments and invest in anything is very attractive.
A very nice bonus with this ASX share is that it has grown its dividend every year since 2000.
Foolish takeaway
I’d buy both of these ASX shares for the long-term in a heartbeat. Pushpay has a lot of exciting growth potential over the coming years. But Soul Patts could be a solid idea for long-term steady growth.
There are other growth shares I’d buy in a heartbeat like these future winners…
3 “Double Down” stocks to ride the bull market higher
Motley Fool resident tech stock expert Dr. Anirban Mahanti has identified three stocks he thinks can ride the bull market even higher, potentially supercharging your wealth in 2020 and beyond.
Doc Mahanti likes them so much he has issued “double down” buy alerts on all three stocks to members of his Motley Fool Extreme Opportunities stock picking service.
* Extreme Opportunities returns as of June 5th 2020
More reading
- Here are another 2 insanely cheap ASX 200 shares to buy right now
- 3 top ASX shares to buy now to get rich later
- 3 ASX shares to buy for the big shift to contactless payments
- How to become a millionaire before your parents with ASX shares
- Where to invest $20,000 into ASX shares immediately
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 PUSHPAY FPO NZX. The Motley Fool Australia owns shares of and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended PUSHPAY FPO NZX. 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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Dollar Weakens; Fed Meeting in Focus
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Why I think Wesfarmers is the best ASX blue chip
I think that Wesfarmers Ltd (ASX: WES) is the best ASX blue chip share right now.
Wesfarmers doesn’t exactly have a ton of competition for the title of best ASX blue chip. ASX banks like Westpac Banking Corp (ASX: WBC) and miners like BHP Group Ltd (ASX: BHP) have been patchy over the decades.
The (mostly) retail conglomerate seems like a reliable pick in most aspects. Here are some of the reasons why I think it’s a good pick:
Strong performing businesses
The crown jewel of Wesfarmers is Bunnings. The hardware business is now the key profit centre after the divestment of Coles Group Limited (ASX: COL). In good economic times Bunnings is a solid performer with a healthy construction industry.
During these COVID-19 times we saw that a lot of people went to Bunnings to do some home improvements during the lockdown.
Wesfarmers revealed in its retail trading update that in the second half of FY20 to May 2020, Bunnings sales were up 19.2%. We also heard that Officeworks’ sales were up 27.8% and Catch’s gross transaction value sales were up 68.7%.
I like businesses that can keep performing in all economic conditions.
Investment flexibility
One of the main things I like about Wesfarmers is its ability to regularly change what operating businesses it owns. It used to own Coles Group Limited (ASX: COL) and Kmart Tyre and Auto. Management was comfortable divesting those businesses.
In recent times Wesfarmers has acquired Catch (an online retailer) and Kidman Resources (a lithium miner).
Having the ability to evolve over time is important. The better growth opportunities may be in different industries in the coming years. Wesfarmers can pivot the overall business towards that growth will help it continue its solid earnings performance.
Wesfarmers is focused on shareholder returns
Ultimately, shareholder returns is what management should be focused on. As long as it doesn’t come at the expense of the long-term health of the company.
I like how Wesfarmers is willing to try new things, such as the attempt to take Bunnings to the UK. But management are also willing to end initiatives when appropriate. The closure of many Target stores is one recent example.
It’s a solid dividend share on the ASX and continues to reward shareholders.
Foolish takeaway
Wesfarmers certainly isn’t cheap at a share price of $44. But the ongoing strength of Bunnings, Officeworks and Catch justifies this price in my opinion. I’d be happy to buy a parcel of Wesfarmers at today’s price, but I’d only buy more if the ASX share market falls again.
Until then, I think there could be even better growth share ideas out there, like these top stocks…
One trick to potentially generating life-changing wealth from the stock market is to buy early-stage growth companies when their share prices still look dirt cheap.
Motley Fool’s resident tech stock expert Dr. Anirban Mahanti has identified 5 stocks he thinks are screaming buys. And you can buy them now for less than $5 a share!
* Extreme Opportunities returns as of June 5th 2020
More reading
- Leading brokers name 3 ASX 200 shares to sell today
- ASX 200 jumps 2.4%, unloved shares keep rising
- Not keen on Westpac? Then buy these top ASX dividend shares instead
- Can the Wesfarmers share price continue to rise after its market update today?
- ASX 200 Weekly Wrap: ASX bulls crash through 6,000 points
Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET 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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Macron Needs More than $17 Billion to Save Airbus
(Bloomberg Opinion) — The Covid-19 pandemic has brought the usually resilient aerospace industry to its knees. Air passenger traffic has collapsed by 90% in Europe and isn’t likely to get back to pre-virus levels for several years. Airlines are fighting for survival and have grounded their fleets. Passenger-jet makers Airbus SE and Boeing Co., after years of briskly building planes to meet booming demand, are slashing investments, jobs and production in a world where nobody wants new aircraft. Their suppliers are equally suffering.Nothing like this has been seen since the “Boeing Bust” of the early 1970s, when defense cutbacks, airliner belt-tightening and a consumer recession led to losses and bailouts across the industry. Boeing survived, but its hometown of Seattle was scarred by layoffs. A billboard was put up to reflect the mood: “Will the last person leaving Seattle turn out the lights.”French President Emmanuel Macron is understandably keen to avoid this kind of bust hitting Toulouse, where Airbus and other aerospace firms such as Latecoere SACA are based. His administration this week unveiled a string of measures, totaling 15 billion euros ($17 billion), to support the aviation industries, including loan guarantees, wage subsidies for furloughed workers and an investment fund for small businesses.For all the government’s talk of creating new, greener aircraft of the future, this is really about protecting the economy and strategic pride: There are 300,000 aerospace jobs in France, and the industry is a key export that posted a trade surplus of 31 billion euros in 2019.One has to wonder, though, whether even $17 billion is enough. Almost half the aid will go to Air France-KLM, in the form of loans and guarantees, in return for a reduction in carbon emissions and services on its domestic routes. Although the state has asked the carrier to be a “good customer” of Airbus, you can’t really force an airline to keep buying planes in a demand-led recession. As for the rest of the package, while it does offer some form of safety net for workers and engineers, it’s unlikely to offset the need for cuts. Jefferies analysts expect net aircraft orders (orders minus cancellations) at Airbus and Boeing to be -1,500 this year and zero the next. There’s also the risk that the scale of the damage, along with greater state intervention, will fan the flames of trade wars. We aren’t yet at the stage of nationalizations like that of Britain’s Rolls-Royce Plc in the 1970s, but the current combination of central-bank and fiscal stimulus does point to ever-more government nudging of supply and demand if the sector’s woes get worse.Boeing was recently in line to receive a whopping $60 billion in U.S. government aid — which it ended up turning down, but it may not have that luxury next time. In Europe, politicians are increasingly keen to invoke “sovereignty” on the world stage as a reason to step in to boost domestic industry, especially with Donald Trump imposing trade tariffs in response to a 16-year spat over aircraft subsidies. “We don’t intend to be the world’s village idiots,” French Finance Minister Bruno Le Maire said on Tuesday, referring to global protectionist trends.To be sure, there are some glimmers of hope out there, and for Airbus in particular. It can at least claim to be in a relatively stronger position than Boeing, which was at a “huge disadvantage” going into this crisis, according to Teal Group’s Richard Aboulafia. Airbus’s hugely successful A320 single-aisle planes look well placed for a world of downsizing, where less is more. Boeing, meanwhile, has the unenviable baggage of high debt levels and the huge reputational damage of the MAX aircraft catastrophe.But trying to preserve Airbus’s lead may clash with the reality that aerospace recoveries are slow and painful for everyone. Nick Cunningham, an analyst at Agency Partners, expects aircraft deliveries to remain depressed for years, with none of the usual growth levers — such as emerging-market demand — helping. Supply chains have been strained by the virus, and the wheels of visa-free travel in Europe still aren’t turning. Aerospace jobs and technological assets are worth fighting for, but they’re not saved yet.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Lionel Laurent is a Bloomberg Opinion columnist covering Brussels. He previously worked at Reuters and Forbes.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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Afterpay share price up 7%, ASX 200 edges higher
The S&P/ASX 200 Index (ASX: XJO) managed to slightly rise by 0.06% today to 6,418 points.
Australia continues to do well with the coronavirus, though it’s not eliminated from every state yet.
Afterpay Ltd (ASX: APT) share price continues to soar, helping the ASX 200 rise
The buy now, pay later sector continues to perform strongly.
The ASX 200 instalment payment company saw its share price rise another 7.5% to $54.50. The market is becoming even more confident on the company’s future despite the ongoing wider coronavirus issues.
Afterpay wasn’t the only one to rise in the sector. The Zip Co Ltd (ASX: Z1P) share price went up 3.4% and the Sezzle Inc (ASX: SZL) share price went up 7.5%.
Christmas in June for shareholders of Harvey Norman Holdings Limited (ASX: HVN) investors
The Harvey Norman share price rose by 7.3% today after the company made two announcements.
Firstly, the ASX 200 retailer revealed a retail trading update. Australian franchisee total sales are up 17.5% in the FY20 second half to 31 May 2020.
Looking at the company-operated stores overseas sales in this half-year to date in Australian dollar terms, Northern Ireland and Singapore suffered sales declines of 38.2% and 21.7% respectively. New Zealand sales were down 7.3% and Slovenia and Croatia sales were down by 5.5%. Malaysia sales were up 1.3% and Ireland sales were up 25.4%.
In the other announcement, Harvey Norman announced a special fully franked dividend of 6 cents per share to be paid on 29 June 2020.
Kogan.com Ltd (ASX: KGN) capital raising
The ASX 200 ecommerce business has gone into a trading halt to do a capital raising.
Kogan is looking to raise $100 million from institutional investors and another $15 million from regular investors.
The money will be used to fund potential acquisitions that the company may make where Kogan can utilise its efficiencies and digital model. Two recent acquisitions have been Dick Smith and Matt Blatt.
The raising will be done at a share price of $11.45 per share.
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
More reading
- Why the Afterpay share price just hit a record high and could still go higher
- Latest 3 ASX buy ideas from leading brokers
- How Australian super funds are letting the team down on ethics
- Here are another 2 insanely cheap ASX 200 shares to buy right now
- 2 crazy cheap ASX 200 shares you could still buy
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 AFTERPAY T FPO and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia has recommended Sezzle Inc. 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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2 ASX shares to buy to benefit from the cloud computing boom
One investment theme that I think could be well worth gaining exposure to is cloud computing.
Cloud computing is the on-demand availability of computer system resources such as data storage and computing power without direct active management by the user.
It is because of the cloud that you can watch Netflix on demand wherever you are, do your accounting on the go, and have Zoom meetings with colleagues.
And as you might have noticed, particularly during the pandemic, more and more software and services are going to the cloud.
This shift to the cloud is expected to accelerate in the coming years. So much so, research by Statista shows that the size of the public cloud computing services market is expected to grow from US$227.8 billion in 2019 to US$354.6 billion by 2022. This is an increase of almost 56% in just three years and is unlikely to stop there.
The good news for Australian investors is that there are a couple of quality shares which have direct exposure to the cloud.
I believe this bodes well for their future growth and could make them great long term investments. Here’s why I like them:
Megaport Ltd (ASX: MP1)
The first ASX share you can buy to gain exposure to the cloud computing boom is Megaport. It offers scalable bandwidth for public and private cloud connections, metro ethernet, and data centre backhaul. As of the end of March, Megaport was serving 1,777 customers out of 329 data centres globally. Both its footprint and customer numbers have been growing at a rapid rate over the last couple of years and look likely to continue thanks to the growing cloud usage.
NEXTDC Ltd (ASX: NXT)
Another way to gain exposure to cloud computing is through NEXTDC. It is one of the world’s most innovative data centre operators with a total of 9 centres across 5 capital cities. Its customers are supported by more than 550 partners that form its highly skilled and network-rich partner ecosystem. The company believes this makes it Australia’s only truly channel centric data centre solutions provider, offering complete service neutrality. Demand for capacity within its centres has been growing at a rapid rate over the last few years. I expect this trend to continue and drive strong earnings growth as it scales.
And here are more exciting shares which could be destined for big things…
One trick to potentially generating life-changing wealth from the stock market is to buy early-stage growth companies when their share prices still look dirt cheap.
Motley Fool’s resident tech stock expert Dr. Anirban Mahanti has identified 5 stocks he thinks are screaming buys. And you can buy them now for less than $5 a share!
* Extreme Opportunities returns as of June 5th 2020
More reading
- Could these sensational ASX shares help you beat the market?
- Are Megaport shares the ones to buy and hold beyond 2030?
- Why I’m not afraid to invest in shares during this recession
- The smartest ASX 200 shares to buy with $2,500 today
- 1 ASX 200 tech share to buy and hold for a decade
James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of MEGAPORT FPO. The Motley Fool Australia has recommended MEGAPORT FPO. 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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