Category: Stock Market

The Coles Group Ltd (ASX: COL) share price will be in focus today.  

Investors will be keeping an eye on the supermarket giant amid its latest push to expand into the premium homeware market.

Let’s take a closer look.

Why are investors watching the Coles share price?

Coles is one of the most trusted brands in Australia and plans to grow its market share by expanding into premium homewares.

According to a recent article in The Australian, the supermarket giant has struck a deal with celebrity chef Curtis Stone.

Stone’s high-end cookware, which has been popular on the US Home Shopping Network, is set to be sold exclusively at Coles. The high-quality cookware and utensils will be available to shoppers in an affordable price range.

With this latest deal, Coles looks to expand into the premium homewares sector dominated by Kmart, which is operated by Wesfarmers Ltd (ASX: WES).

Coles is not alone, with rival supermarket giant Woolworths Group Ltd (ASX: WOW) launching a new range of home accessories in August.

More on Coles

Last month, Coles released its full-year report for FY21 which noted a bumper year for the supermarket giant.  

The company’s report was highlighted by a 3.1% increase in sales revenue for the year of $38,562 million.

Other highlights from Coles’ report included;

• Earnings before interest, tax, depreciation, and amortisation (EBITDA) up 5.4% to $3,432 million;
• Net profit after tax up 7.5% to $1,005 million;
• Fully franked final dividend of 28 cents per share. This resulted in a record total dividend of 61 cents per share, up 6.1% from FY20.

Coles cited several initiatives for its surging grocery segment, including the continued roll-out of its ‘Click & Collect’ service.

Outlook on the Coles share price

Since the start of the year, shares in the supermarket behemoth are down more than 6%. By comparison, the S&P/ASX 200 Index (ASX: XJO) has managed to claw 11% higher in 2021.

Despite the subdued performance, the Coles share price has support from various institutions.

Most recently, leading broker Morgans retained its add rating on the company with a $19.80 share price target.

According to analysts, Coles is well placed to benefit from people working from home and consuming more due to COVID-19 lockdowns.

The Coles share price closed yesterday’s session at $17.28.

The post Coles (ASX:COL) share price on watch amid latest push to Kmart market appeared first on The Motley Fool Australia.

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Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended COLESGROUP DEF SET and Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Pushpay Holdings Ltd (ASX: PPH) share price could be one to consider after the tech company released an investor presentation, outlining its strategy.

For readers that haven’t heard of Pushpay before, it’s a donation processing and church management business. It currently has a number of tools for churches including live streaming, giving, bible study, HR software, bookkeeping software, music licensing and so on.

It can also work with non-church organisations like charities or corporates. Pushpay can assist with payments, donations, memberships, branded credit cards, video on demand, event management and more.

There are a few different things that Pushpay pointed to in its presentation as reasons why it has growth potential:

Diversification plans

At the moment, a very large amount of Pushpay’s earnings come from US churches. But Pushpay is looking to explore other avenues for new earnings streams.

It said that education can be another area of focus, such as K-12 and college campus alumni associations. The company shared a list of offerings it could be involved, including: tuition or dues, the parent and teacher curriculum review, student body voting, sports program funding, audio and textbook licensing, sororities and fraternities membership and dues, class attendance, study groups, home school co-ops or networks and tutoring.

Other payment services that Pushpay could offer include currency conversion and cryptocurrency transactions.

Pushpay also noted that it can geographically expand as well. The US is the main profit generator, but management are also thinking about growing in South East Asia, South America and Europe too.

Resi Media

The ASX tech share recently announced the acquisition of Resi Media. The Pushpay share price has risen by 17% since the date of the announcement. This business was bought for a cost of US$150 million.

Pushpay described Resi Media as a high-growth software as a service (SaaS) company specialising in high-quality transmission for web and multisite streaming offering end-to-end solutions to customers.

Resi Media’s products are being used by 70% of the Outreach 100 churches – many of the biggest churches in the US.

The video streaming business also reportedly has customers outside of the faith sector, including in the corporate, education, sports and live event streaming markets.

In FY21, Resi Media had $12.9 million of annual recurring revenue (ARR), with 3,374 customers and net revenue retention of more than 100%. FY21 saw 101% revenue growth compared to FY20.

Catholic sector growth

Pushpay has told investors that it wants to expand in the Catholic sector.

The company says that 23% of the US population considered itself to be Catholic in 2018.

In 2016, 27% of US faith giving was generated from Catholic services, totaling US$30 billion. Pushpay estimates there’s an estimated US$330 million annual revenue opportunity here.

The ASX tech share pointed out there are an estimated 17,000 parishes in the US, which skew more heavily to medium and large churches.

It said that current solutions for the Catholic sector are dated, lack features, are not mobile-friendly and are not cloud-based. The donation business’ research shows that parishes are generally dissatisfied with current tools and ready for a change. It also said that Catholic branded or customised solutions are “clearly preferred” by Catholic parishes.

All of that leads Pushpay to believe there is an opportunity to provide a modern technology solution.

So Pushpay is providing an offering called ParishStaq, alongside its older all-in-one offering called ChurchStaq.

Pushpay share price valuation

The pre-open price of $1.84, its shares are currently valued at 35x FY22’s estimated earnings.

The post 3 compelling reasons why the Pushpay (ASX:PPH) share price could be a buy appeared first on The Motley Fool Australia.

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Motley Fool contributor 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 and has recommended PUSHPAY FPO NZX. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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IDP Education Ltd (ASX: IEL) shares will be keenly monitored on Tuesday morning after a round of endorsements about their prospects.

Prior to this morning’s open, UBS brokers raised their price target for the international education provider by 13%.

They are now forecasting the IDP share price to hit $36.40. That’s an 11% premium on Monday’s closing price of $32.72.

The stock is already up close to 60% for the year and more than 20% over the past month.

Tribeca Investment Partners portfolio manager Jun Bei Liu told The Motley Fool’s Ask A Fund Manager on Tuesday morning that IDP Education has plenty more growth to come.

“It has gone up a lot but, in terms of its earnings, it has yet to return,” she said. 

“In the next 12 months, we do expect meaningful returns for this company, as its earnings grow higher and its multiple continues to expand.”

Why the ducks are all lined up for IDP shares

Liu revealed that IDP shares are among the 5 biggest positions her fund holds currently.

Australian universities, as one of the big beneficiaries of IDP’s services, previously held more than 40% ownership of the company.

But when COVID-19 difficulties hit the tertiary sector, Liu’s team bought up big.

“They sold down some parts of their stake and then we took advantage of it,” she said.

“We have always liked this company. It’s a very high-quality company exposed to global student placements.”

Liu reminded investors IDP doesn’t just do business bringing in foreign students into Australia.

“The amazing thing about this company is that it’s not just students coming to Australia. It’s going global,” she said. 

“It has huge exposure across the UK, Canada, and many other countries. Essentially just leveraged to that global movement from students wanting to be educated in some of the top universities.”

Of course, IDP’s short-term numbers have taken a massive hit due to restrictions on international travel. But Liu has faith that IDP is a strong post-pandemic recovery story.

“Once we have all the vaccinations or vaccination passports, these students will return.”

Based on the current IDP share price, the company commands a market capitalisation of around $9.1 billion.

The post Why IDP Education (ASX:IEL) shares are on watch Tuesday appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Idp Education Pty Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Flight Centre Travel Group Ltd (ASX: FLT) share price has been flying higher over the past month. Investors appear optimistic about a speedy recovery in the travel industry as Australia accelerates its vaccine rollout.

At Monday’s market close, the travel agent’s shares ended the day at $18.05. It’s worth noting that the company’s shares reached a 5-month high of $18.67 last week, before some slight profit-taking.

What’s fuelling the travel agent’s shares?

There are a few catalysts as to why the Flight Centre share price has been travelling upwards in recent times.

In late August, the company released its full-year results, highlighting month-on-month sales revenue growth despite lockdowns and heavy restrictions. In particular, the corporate sector in the United States gained momentum as trading conditions generally improved.

Flight Centre noted some countries, including the United States, Canada and the United Kingdom, are poised for strong returns in FY22. Coupled with its leaner and more efficient cost base model, the company expects this to provide solid profits over the long term.

Following its annual scorecard, a number of brokers weighed in on the Flight Centre share price with a positive outlook.

Swiss investment firm, UBS raised its view for Flight Centre shares by 7.1% to $17.25 apiece. Macquarie and JPMorgan also revised their ratings, increasing the price target by 6.5% to $16.50, and 12% to $14.00, respectively.

Early this month, Flight Centre revealed its expansion plans for Japan via a joint venture with NSF Engagement Corporation.

Flight Centre’s leading FCM travel management business will enter the fourth-largest corporate travel market from January 2022.

Management stated it intends on winning new local, regional and multi-national accounts, while also enhancing existing services in Japan.

Flight Centre share price summary

Since this time last year, the Flight Centre share price has been on a rollercoaster ride, gaining 45%. In 2021, the company’s shares are up 15%.

On valuation grounds, Flight Centre commands a market capitalisation of roughly $3.6 billion, with approximately 199.5 million shares on issue.

The post Why the Flight Centre (ASX:FLT) share price is up 20% in a month appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Westpac Banking Corp (ASX: WBC) share price will be one to watch on Tuesday.

This follows the release of an update on a proposed asset sale this morning.

What did Westpac announce?

According to the release, Westpac has revealed that its plan to divest its Pacific businesses has been dealt a blow.

Late last year, the bank announced the sale of its Pacific businesses to Kina Securities Limited (ASX: KSL) for up to $420 million. This was part of its strategy to simplify its operations and focus on banking in Australia and New Zealand.

At the time, it warned that the sale was subject to regulatory approvals in both Fiji and Papua New Guinea.

Speaking of which, in July, the banking giant revealed that the Papua New Guinea’s Independent Consumer and Competition Commission (ICCC) released a draft determination relating to the sale. That draft determination indicated that the ICCC was proposing to deny authorisation to Kina Securities for the proposed acquisition of Westpac’s stake in Westpac Bank PNG.

Unfortunately for Westpac and Kina Securities, the ICCC has now released its final determination and no changes have been made. The Commission has denied authorisation for the sale.

Westpac has acknowledged the ICCC’s determination. It has advised that it will continue to operate the businesses as normal while it reviews the impact on the sale.

Is the Westpac share price in the buy zone?

One leading broker that sees value in the Westpac share price is Citi. Late last month the broker put a buy rating and $30.00 price target on its shares.

Based on the current Westpac share price of $25.64, this means potential upside of 17% over the next 12 months.

Citi appears positive on Westpac’s cost cutting plans and expects this to help offset top line headwinds.

The post Westpac (ASX:WBC) share price on watch after asset sale blocked appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro owns shares of Westpac Banking Corporation. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Xero Limited (ASX: XRO) share price has been out of form in 2021.

Since the start of the year, the cloud accounting and business platform provider’s shares have gained only 1%.

This compares unfavourably to the S&P/ASX 200 Index (ASX: XJO) and its 11% gain this year.

Is the Xero share price good value?

The good news is that one leading broker expects the Xero share price performance to improve.

According to a recent note out of Goldman Sachs, the broker has a buy rating and $165.00 price target on the company’s shares.

Based on the current Xero share price, this implies potential upside of 10% over the next 12 months.

What did the broker say?

Goldman Sachs is positive on the Xero share price due to its belief that the company is well-placed for strong revenue growth over the coming years.

In fact, the broker expects its revenue to double over the next few years thanks to subscriber growth and the monetisation of its user base.

Goldman commented: “We expect XRO revenue to double across FY21-24E (+26% CAGR), driven by: (1) ARPU growth from the recently announced price rises (benefiting FY22/23E) and the introduction of this app store fee (benefiting FY23/24E); (2) Subscriber growth, given accelerating subscriber growth across all geographies in 2H21, and strong recent traction from its Enterprise strategy (i.e. recently signed a Global partnership with DFK, the 7th largest Global Accounting Association, to complement agreements with BDO/RSM); and (3) M&A, with the Planday acquisition to contribute +3% growth in FY22E.”

But Goldman doesn’t necessarily expect its revenue growth to stop there. The broker is forecasting revenue of NZ$3,699 million and EBITDA of NZ$1,263 million in FY 2030. This compares to its revenue estimate of NZ$1,129 million and EBITDA estimate of NZ$209 million for FY 2022.

Overall, if the company delivers on its estimates, the broker appears to believe the Xero share price will generate strong returns for investors. This could make it a top long term option for investors.

The post Is the Xero (ASX:XRO) share price heading to $165? appeared first on The Motley Fool Australia.

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Motley Fool contributor 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 and has recommended Xero. The Motley Fool Australia owns shares of and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price has been a strong performer in 2021.

Since the start of the year, the banking giant’s shares are up 20% to $27.62.

This is close to double the return of the S&P/ASX 200 Index (ASX: XJO) over the same period.

Can the ANZ share price keep climbing?

The good news is that one leading broker believes there is still a lot more upside for the ANZ share price over the next 12 months.

According to a recent note out of Morgans, its analysts have an add rating and $34.50 price target on the company’s shares.

Based on the current ANZ share price, this means potential upside of 25% over the next 12 months before dividends.

And if you include the $1.65 per share fully franked dividend the broker is forecasting in FY 2022, this potential return stretches to almost 31%.

Why is Morgans bullish?

The note reveals that Morgans is bullish on the ANZ share price due to its attractive valuation and the bank’s cost reduction plans.

Combined with a big improvement in the quality of its loan book, the broker believes this makes ANZ the best option among the major banks right now.

It commented: “We believe ANZ is the most compelling of the major banks on a valuation basis. We expect ANZ to continue to focus on absolute cost reduction over the medium term. ANZ has de-risked its loan book over recent years – particularly its institutional loan book – such that the quality of its loan book has improved. While ANZ’s Australian home loan book has been growing below system over recent months, we expect a disciplined margin performance from ANZ.”

All in all, the ANZ share price may be smashing the market this year, but Morgans doesn’t believe it is too late to invest.

The post This analyst sees 25% upside for the ANZ (ASX:ANZ) share price appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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If you’re looking for some growth shares to add to your portfolio this month, then you may want to look at the ones below.

Here’s what you need to know about these highly rated ASX growth shares:

Life360 Inc (ASX: 360)

The first ASX growth share to look at is Life360. It operates in the digital consumer subscription services market, with a focus on products and services for digitally native families, where all members of the household are connected by smartphones.

The company’s key offering is the increasing popular Life360 app. This app has been developed for families with features such as communications, driving safety, and location sharing. At the last count, the company’s Global Monthly Active User (MAU) base stood at a massive 32.3 million. In addition, Life360 has also just expanded into the wearables market via the acquisition of Jiobit. This gives it cross-selling opportunities to its large subscriber base.

The team at Bell Potter are very positive on Life360. As a result, they currently have a buy rating and $10.75 price target on its shares.

NEXTDC Ltd (ASX: NXT)

Another ASX growth share to look at is NEXTDC. It is one of the Asia-Pacific region’s leading data centre operators. Due to strong demand for data centre capacity, which is being driven by the structural shift to the cloud, NEXTDC has been growing its sales and operating earnings at a solid rate.

For example, in FY 2021 the company reported a 23% increase in data centre services revenue to $246.1 million and a 29% jump in EBITDA to $134.5 million.

Pleasingly, this strong demand isn’t expected to soften any time soon. As a result, management is guiding to revenue growth of 16% to 20% and EBITDA growth of 19% to 23% in FY 2022.

And one leading broker doesn’t expect its growth to stop there. A note out of Goldman Sachs reveals that its analysts are expecting NEXTDC to continue to grow its EBITDA at ~20% per annum through to FY 2024.

In light of this, the broker has a conviction buy rating and $14.40 price target on its shares.

The post 2 outstanding ASX growth shares named as buys appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Life360, Inc. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Ask A Fund Manager

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In this edition, Tribeca Investment Partners Alpha Plus portfolio manager Jun Bei Liu reveals the conviction behind her 2 biggest ASX holdings.

Investment style

The Motley Fool: How would you describe your fund to a potential client?

Jun Bei Liu: I manage an Aussie equity long-short fund. We essentially invest all in Australia and our benchmark is S&P/ASX 200 Index (ASX: XJO), which means we try to outperform our benchmark year in, year out, regardless of whether it’s an up market or down market. 

What does a ‘long-short fund’ mean? We can take advantage of a company that we think the share price will go up, and also we can short stocks where we take advantage where we think the share price will go down. We take both sides, which does make us much more defensive on the way down when the market goes down. 

When the market goes higher, it makes us just more active and finding more opportunities to buy. And our fund’s currently sitting just over $1 billion dollars. I think that has grown probably 3-fold since last time we spoke.

MF: Last year I remember you were a big advocate of Afterpay Ltd (ASX: APT). Now that the Square Inc (NYSE: SQ) deal has been revealed, how do you feel about it? Have you sold off or are you holding onto the shares?

JBL: We took some profit but we still remain a shareholder of Afterpay. 

The reason we took some profit is that though we believe it’s a really great thing for Afterpay to move to the next level, it does reduce that buy now, pay later exposure. Because it’s now part of a bigger group and Square does make quite a lot of money from Bitcoin and a lot of other things. That is quite different from what we used to invest in.

My view is that Afterpay needs to take this step to quickly move onto the next level. I think M&A will continue in the sector. I’m still not ruling out that there might be somebody else that will come in to bid for Afterpay — just simply because Afterpay is a first mover and is the market leader in this space. It’s the innovator and also is the one with the most active user within its ecosystem. 

Afterpay also is just at the cusp of monetising its substantial ecosystem now that they start charging for some of the display advertising and some of those redirection trades. There’s a lot of opportunity within its business and this would really take it to the next level.

ASX shares that are perfect post-COVID reopening plays

MF: What are your two biggest holdings?

JBL: One of them is Sydney Airport Holdings Pty Ltd (ASX: SYD), believe it or not. 

Our view of that is we were quite fortunate. We knew this is a premium asset, it’s something that’s difficult to come by. It’s very unique in this sense that there are not many listed airports around the world. And then we knew just before the pandemic hit, Tasmania [Hobart] Airport was sold at a substantial premium to the listed price at the time.

We saw this as a very strong reopening trade, a high quality asset. It is very defensive and it’s very, very quality skew. We would have this as one of the largest positions and then a bid came through, it was a really good price. We were just waiting to see what the next step is. And we continue to think that the bid will probably come back probably closer to $9 at the end.

If you look at the consortium itself, it’s a very high quality consortium. They know the importance and the quality of this asset. It’s so rare. I just think it’s better to be patient at this point. But I do like to see the management engage once the bid comes back with a more realistic number.

[Ed’s note: Sydney Airport received a new $8.75 per share bid on Monday, after this interview.]

IDP Education Ltd (ASX: IEL) is in my top 5 positions at the moment. 

The universities together previously held over 40% of the company. They sold down some parts of their stake and then we took advantage of it. We have always liked this company. It’s a very high quality company exposed to global student placements. 

Obviously, it was hit very hard when the students couldn’t travel, couldn’t come in. Also, the amazing thing about this company is that it’s not just students coming to Australia. It’s going global. It has huge exposure across the UK, Canada, and many other countries. Essentially just leveraged to that global movement from students wanting to be educated in some of the top universities. 

Short term earnings have been impacted because of the COVID and, ultimately, will move past this. Once we have all the vaccinations or vaccination passports, these students will return. 

MF: IDP shares have already gone up 57% this year. But you feel like there’s more growth left?

JBL: Yeah, absolutely. It has gone up a lot but, in terms of its earnings, it has yet to return. In the next 12 months, we do expect meaningful return coming for this company, as its earnings grow higher and its multiple continues to expand.

The post 2 ASX shares ready to explode after COVID: expert appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo owns shares of Square and Sydney Airport Holdings Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, Idp Education Pty Ltd, and Square. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Pro Medicus Ltd (ASX: PME) share price has been a strong performer over the last year, rising by 135%.

There are a few different reasons why this business could be a good one to hold for the long-term.

What is Pro Medicus?

If readers haven’t heard of Pro Medicus before, it describes itself as a leading medical imaging IT provider which was founded in 1983. The company provides a full range of radiology IT software and services to hospitals, imaging centres and healthcare groups around the world.

The company boasts that it offers one of the most comprehensive end-to-end offerings in radiology. It has offices in Melbourne, Berlin and San Diego.

That’s what the company does. These are some important reasons why investors may want to hold Pro Medicus in their portfolio:

Strong profit margins

Pro Medicus may be one of the most profitable businesses on the ASX when it comes to its profit margins.

The healthcare technology business recently reported its FY21 result which showed a sizeable amount of revenue growth at very high profit margins.

It generated a total of $67.9 million of revenue – an increase of 19.5% year on year. With that, the business saw underlying profit before tax growth of 41% to $42.6 million. Net profit rose 33.7% to $30.9 million. The net profit can be a key driver of the Pro Medicus share price.

Pro Medicus said that it had an earnings before interest and tax (EBIT) margin of 63.2% for the year. The net profit after tax margin works out to be 45.4%.

The higher the profit margins, the more of the new revenue that Pro Medicus can turn into net profit.

Major partnerships, client wins and business progress

Pro Medicus has won announced a number of positive agreements over the last year or so.

There have been some large wins in both Europe and the US. For example, it won a 7-year deal with Intermountain Healthcare, the largest health system in Utah, worth $40 million.

Another example would be the $31 million, 7-year deal with the University of California (including all five academic campuses).

It has signed research collaboration agreements with NYU Langone Health and Mayo Clinic, which Pro Medicus said were two of the most prestigious academic healthcare institutions in North America. Those agreements were signed to provide a framework for collaboration to facilitate development and commercialisation in the field of AI, utilising the Pro Medicus Visage AI Accelerator platform.

Balance sheet and dividends

At the current Pro Medicus share price, its dividend only amounts to a fully franked dividend yield of 0.25%.

However, longer-term shareholders are benefiting from compounding growth of its dividend. It declared a final dividend of 8 cents per share, bringing the total for the year to 15 cents per share. That full year dividend was an increase of 25% compared to FY20. Shareholders are getting growing cash returns each year.

Pro Medicus’ balance sheet remains in a position of strength, it remains debt free. Its cash and other financial assets increased by 42.4% to $61.8 million. Management can use this cash for a variety of purposes like paying dividends, investing for organic growth or potentially making acquisitions.

The post Here are 3 reasons why Pro Medicus (ASX:PME) is a great ASX share to own appeared first on The Motley Fool Australia.

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Motley Fool contributor 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 and has recommended Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Pro Medicus Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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