Category: Stock Market

There are a number of very interesting and exciting small cap ASX shares that could be worth looking into.

Businesses that are smaller may have more growth potential simply because of how small they are starting from. It’s easier to double a $500 million business to $1 billion, than doubling a $50 billion business to $100 billion.

These two businesses are delivering growth and could be worth a spot on an investor’s watchlist:

Healthia Ltd (ASX: HLA)

Healthia is a small cap ASX share with a few different divisions – ‘feet and ankles’, ‘bodies and minds’ and ‘eyes and ears’.

Those are represented by a number of different businesses including myFootDr, The Optical Co and All Sports Physiotherapy. It continues to make acquisitions to expand its network in each of those segments.

For example, two of its latest acquisitions include Bernie Lanigan Optometrist in Townsville and The Eyecare Place in Abbotsford, Victoria.

It aims for an earnings before interest, tax, depreciation and amortisation (EBITDA) multiple of between 3x to 4.5x for acquisitions. It expects to deploy a minimum of $20 million of capital for new businesses over the next 12 months. Acquisitions are just one part of the strategy though. 

It has developed a clinically focused growth model which aims to drive organic growth and retain clinicians. Healthia has a number of centralised support functions, such as coaching, marketing and client retention strategies. It’s introducing additional services too.

Healthia also owns and operates iOrthotics, DBS Medical (an allied health supplies business) and a wholesale eyewear frame distributing business. There are margin improvements to this vertically integrated model, according to management.

In the FY21 half-year result, it saw underlying EBITDA rise 90.7% to $11 million and underlying net profit go up 103.6% to $5.8 million. The underlying EBITDA margin increased 486 basis points to 17.87%.

Propel Funeral Partners Ltd (ASX: PFP)

Propel is the second largest funeral operator in Australia and New Zealand. It has around 140 locations, over 30 cremation facilities and approximately 10 cemeteries. But it still counts as a small cap ASX share.

One of the growth trends that management morbidly point to is that the number of deaths is expected to grow in the coming decades.

Death volumes in Australia are expected to increase by 2.7% per annum from 2019 to 2030 and then 2% per annum from 2030 to 2050 according to the ABS.

Propel says that the number of deaths is the most significant driver of revenue in the death care industry.

In the 2020 calendar year, Propel had grown its Australian market share to around 7%.

It also continues to see steady growth of its average revenue per funeral. In the first half of FY21, this was $5,874, which was a 3.6% increase on FY20 overall and a 2.1% increase on the pre-COVID-19 period of the first three quarters of FY20.

In the first half of FY21, it showed that whilst revenue was up just 3.5%, operating net profit after tax (NPAT) grew 7.6% and operating earnings per share (EPS) went up 7% to 8.5 cents. This allowed the board to pay an interim dividend that was 50% higher to 6 cents per share.

Propel says that recent trading indicates that death volumes may be reverting to long-term trends and there is still the growing and ageing population in Australia and New Zealand that could boost long-term revenue.

The post 2 exciting small cap ASX shares that could be buys appeared first on The Motley Fool Australia.

More reading

• What’s driving the Propel (ASX:PFP) share price today?

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. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended HEALTHIA FPO and Propel Funeral Partners 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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The biggest advantage that cryptocurrency advocates have spruiked from the start is that all transactions are decentralised.

That is, there is no ‘middle man’ facilitating the transfer of Bitcoin (CRYPT: BTC) or Ethereum (CRYPTO: ETH) between the sender and receiver.

No big brother government or government looking over your every move, the libertarians say with glee.

“The benefit is greater access, faster transactions and, in some cases, lower transaction costs,” said The Motley Fool US’s Adam Levy this week.

“The ability to exchange currency and send money quickly and inexpensively holds a lot of promise for a global economy, and that’s why DeFi [decentralised finance] could play a significant role in our financial systems in the future.”

What’s more, cryptocurrency blockchains don’t record anyone’s names for ownership. Whoever holds the secure key to the digital coin is the de facto “owner”.

So, with no middle man and no names recorded, how would the Australian Tax Office (ATO) know whether you made hundreds, thousands or millions from cryptocurrencies?

The Motley Fool asked a tax expert to settle this once and for all.

Cryptocurrencies are not anonymous

According to H&R Block Inc (NYSE: HRB)’s Australian tax communications director Mark Chapman, one big myth about digital money must be dispelled.

“Cryptocurrency is not really anonymous,” he told The Motley Fool.

“The ATO receives data from Australian designated service providers (DSP’s) which enable it to identify the name of the cryptocurrency investor, date of birth, addresses, ABN (if applicable), email address, contact phone numbers and social media accounts.”

How does the ATO know all this when transactions don’t record any of this data?

Australian cryptocurrency exchange platform Coinjar explained in an email to users this week.

“The ATO is very interested in your crypto transactions and will find out about them because they use sophisticated tracking software that has already helped them find hundreds of thousands of non-reporters.”

The platform, therefore, reminded its customers that every transaction made in the 2021 financial year is “a taxable event” that must be reported. 

“This includes everything from regular selling and trading through to airdrops, staking, ICOs, futures trading and DeFi liquidity mining.”

Chapman said that as well as basic personal information, the tax office already has data on individual crypto accounts and transactions — such as linked bank accounts, wallet address, unique identifier, transaction date and time, type of currency, amount, transfer description and account balance.

“The ATO uses all of this to match with investors’ tax returns – and if there is a discrepancy, they will write to the investor seeking an explanation.” 

So there it is — you’ve been warned. Don’t say we didn’t tell you so.

The post How does the ATO know how much money I made from cryptocurrencies? appeared first on The Motley Fool Australia.

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• ASX 200 Weekly Wrap: ASX finishes FY21 on a high
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Motley Fool contributor Tony Yoo owns shares of Bitcoin and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin. 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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Whether you take a contrarian view to investing or like to hop on what’s hot, it’s interesting to see which ASX sectors have fared the best in the past year.

Perhaps you want to put some money into the sectors that haven’t gone so well, thinking there will be a turnaround. Or maybe you prefer to ride the momentum of the industries that have been on fire.

Ausbil chief economist Jim Chronis predicted that inflation would remain under control in the coming years, and this might have a bearing on which industries investors might favour.

“This low-rate environment, and the multi-year economic growth outlook, are supportive of an underlying multi-year growth outlook for equities, especially in cyclical sectors — banks and resources — as world demand grows.”

To help you make up your own mind about what the coming 12 months might hold, The Motley Fool has calculated the 3 best-performing sectors and the 3 worst for the 2021 financial year.

3 best-performing ASX sectors 

The Motley Fool used the sector-based S&P indices and looked at their performance for the year to 30 June 2021.

These 3 industries came out on top:

GICS* sector	ASX index	Performance 2021 financial year
Consumer discretionary	S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ)	Up 42.62%
Information technology	S&P/ASX 200 Information Technology Index (ASX: XIJ)	Up 38.88%
Financials	S&P/ASX 200 Financials Ex-A-REIT Index (XXJ)	Up 35.69%

All the money from COVID-19 government support and a lack of travel spending has seen the consumer discretionary sector go gangbusters.

1851 Capital portfolio manager Martin Hickson gave an example to The Motley Fool last month of a business in that area that served his fund very well last year.

“Post [March 2020] sell-off, it led to some of the best buying opportunities that we’ve seen in a decade since coming out of the GFC,” he told Ask A Fund Manager.

“Eagers Automotive Ltd (ASX: APE), one of the largest automotive companies here in Australia — we initially started buying shares in AP Eagers at $3.30 back in March. Shares today are around $15. So it’s performed very strongly for us.”

Ausbil chief investment officer Paul Xirades is backing bank shares to continue their run in the 2022 financial year.

“The banks had over-provisioned for [COVID-19] losses. With APRA allowing a return to more commercial dividend levels, and the economy resurging from the 2020 lows, we could see banks were in a position to reduce these provisions and grow their books further in a renewing real estate market,” he said.

“The result is that over the next few years, the unwinding of this over-provisioning will see a rerating of earnings, ahead of the consensus expectation at the time we began up-weighting into banks.”

3 worst-performing ASX sectors 

Noting that 2 of the 3 still made positive returns, here is the worst-performing trio from the 2021 financial year:

GICS* sector	ASX index	Performance 2021 financial year
Utilities	S&P/ASX 200 Utilities Index (ASX: XUJ)	Down 22.94%
Healthcare	S&P/ASX 200 Health Care Index (ASX: XHJ)	Up 4.98%
Consumer staples	S&P/ASX 200 Consumer Staples (ASX: XSJ)	Up 5.36%

Utilities, especially energy providers, are having a torrid time. 

Uncertainty over future climate change regulations and falling electricity prices have combined to hammer stocks like AGL Energy Limited (ASX: AGL), which is down more than 53% over the past 12 months.

Sadly for utilities, The Motley Fool couldn’t find many analysts willing to back it as a comeback play.

Healthcare, however, does seem to have a better future.

AVITA Medical Inc (ASX: AVH) shares, for example, have fallen 40% in the past year. But this week one fund manager told investors to keep the faith.

“We remain optimistic the company will expand its addressable markets through both label extension and geographic expansion given the extensive evidence of real-world cases in its targeted indications, while also growing its current burns business for years to come.”

* – ‘Global Industry Classification Standard’

The post Best and worst performing ASX sectors of financial year 2021 appeared first on The Motley Fool Australia.

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• These were the worst performing ASX 200 shares last week
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Motley Fool contributor Tony Yoo owns shares of Avita Medical Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Avita Medical Limited. The Motley Fool Australia has recommended Avita Medical 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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If you’re interested in adding some growth shares to your portfolio in July, then you may want to look at the ones listed below.

Here’s why they have been rated as buys:

REA Group Limited (ASX: REA)

The first ASX growth share to consider is REA Group. It is of course the dominant player in real estate listings in the Australian market with its realestate.com.au website.

REA Group has been growing at a consistently solid rate over the last decade and has been tipped to continue this trend over the next decade. This is thanks to its strong market position, a booming housing market, international operations, and recent acquisitions.

In respect to acquisitions, REA Group has just announced the completion of its acquisition of Mortgage Choice and a 34% stake in mortgage software company Simpology. This is expected to help REA Group capture a growing share of the mortgage broker market in the coming years.

Analysts at Goldman Sachs are very positive on its outlook. Earlier this week, the broker retained its buy rating and lifted its price target to $198.00. This compares to the current REA Group share price of $165.61.

Zip Co Ltd (ASX: Z1P)

Another ASX growth share to look at is this leading buy now pay later (BNPL) provider. In FY 2021, Zip has been growing at a rapid rate yet again.

For example, after delivering stellar growth in the first half, the company built on this during the third. This was particularly the case in the United States, where its QuadPay business reported third quarter transaction volume growth of 234% to $762 million. This was driven by a 153% increase in US customers to 3.8 million.

Pleasingly, this is still only a very small slice of a US retail market worth an estimated $5 trillion per year. This gives Zip’s QuadPay business a very long runway for growth as BNPL adoption rates increase and credit card usage declines. This should be supported by its expansion into Europe and Asia via recent acquisitions.

Morgans is expecting Zip’s strong growth to continue. As a result, it has an add rating and $10.39 price target on the company’s shares currently. This compares to the latest Zip share price of $7.25.

The post Why Zip (ASX:Z1P) and this ASX growth share could be buys appeared first on The Motley Fool Australia.

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• AGL and Zip shares were among the most traded ASX shares last week
• 3 companies that broke their way into the ASX 200 in FY21
• These are the 10 most shorted shares on the ASX
• Got Sezzle (ASX:SZL) shares? What’s in store for FY22?
• Top broker tips REA Group (ASX:REA) share price to hit $198

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 ZIPCOLTD FPO. The Motley Fool Australia has recommended REA 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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Are you looking for some quality ASX dividend shares to add to your income portfolio?

Then you might want to look at the ones listed below. Here’s what you need to know about these dividend shares:

Accent Group Ltd (ASX: AX1)

The first dividend share to look at is Accent. It is a retail group with a collection of popular footwear-focused store brands. These include stores such as HYPEDC, Platypus, Sneaker Lab, Stylerunner, and The Athlete’s Foot. In addition to this, the company recently acquired Glue Store and launched a new brand called 4 Workers. The latter is targeting the niche but lucrative workwear market. This includes clothing and footwear for tradies.

Accent has been growing at a solid rate for years and has been tipped to continue doing so in the future. This is thanks to the popularity of its brands and its store expansion plans.

Bell Potter is very positive on its outlook. It currently has a buy rating and $3.30 price target on its shares. The broker is forecasting dividends of 11.7 cents per share in FY 2021 and 12.3 cents per share in FY 2022. Based on the latest Accent share price of $2.78, this represents fully franked yields of 4.2% and 4.4%, respectively.

Transurban Group (ASX: TCL)

Another ASX dividend share to look at is Transurban. It is a toll road operator with a portfolio of important roads throughout Australia and North America. And while traffic has been soft on its roads during the pandemic, it is starting to bounce back. Pleasingly, as traffic levels recover, so too will its distributions.

It is because of this that analysts at Ord Minnett are forecasting dividends per share of 37 cents in FY 2021 and then 58 cents in FY 2022. Based on the current Transurban share price of $14.46, this will mean yields of 2.6% and 4% over the next two years. Ord Minnett has an outperform rating and $16.00 price target on its shares.

The post 2 strong ASX dividend shares tipped as buys appeared first on The Motley Fool Australia.

More reading

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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 recommended Accent Group. 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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On Tuesday the S&P/ASX 200 Index (ASX: XJO) gave back its morning gains and tumbled lower. The benchmark index ended the day 0.7% lower at 7,261.8 points.

Will the market be able to bounce back from this on Wednesday? Here are five things to watch:

ASX 200 expected to fall

The Australian share market looks set to edge lower on Wednesday. According to the latest SPI futures, the ASX 200 is expected to open the day 4 points or 0.1% lower this morning. This follows a poor start to the shortened week on Wall Street, which saw the Dow Jones fall 0.6%, the S&P 500 drop 0.2%, and the Nasdaq push 0.2% higher.

Oil prices sink

Energy producers such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could tumble on Wednesday after oil prices sank overnight. According to Bloomberg, the WTI crude oil price is down 1.9% to US$73.73 a barrel and the Brent crude oil price is down 3% to US$74.86 a barrel. Oil prices hit a six-year high before turning negative. This follows news that OPEC has postponed its production talks indefinitely.

Pinnacle market update

The Pinnacle Investment Management Group Ltd (ASX: PNI) share price will be on watch today after it provided the market with an update on its performance fee expectations in FY 2021. According to the update, Pinnacle’s seven affiliates have crystallised performance fees of $85.9 million. Its share of these fees is $19.5 million. This compares to $6.6 million in FY 2020.

Gold price rises

It could be a good day for gold miners Evolution Mining Ltd (ASX: EVN) and Newcrest Mining Limited (ASX: NCM) after the gold price pushed higher. According to CNBC, the spot gold price is up 0.75% to US$1,796.70 an ounce. Falling bond yields gave the precious metal a boost.

Nanosonics downgraded to sell

The Nanosonics Ltd (ASX: NAN) share price could come under pressure today after being the subject of a bearish broker note out of Goldman Sachs. According to the note, the broker has downgraded the infection prevention company’s shares to a sell rating with a reduced price target of $4.93. Goldman made the move after reducing its earnings estimates on the belief that the growth recovery may be shallower than its previous expectations.

The post 5 things to watch on the ASX 200 on Wednesday appeared first on The Motley Fool Australia.

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• 3 companies that broke their way into the ASX 200 in FY21

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 Nanosonics Limited. The Motley Fool Australia owns shares of and has recommended Nanosonics 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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There are a lot of high quality companies listed on the Australian share market. This can make it hard to decide which shares to buy above others.

To help narrow things down, I have picked out two ASX shares that are highly rated. Here’s why they could be buys:

NEXTDC Ltd (ASX: NXT)

NEXTDC could be an ASX share to buy. It is one of the Asia-Pacific region’s leading data centre operators with a growing portfolio of world class centres in key locations across Australia. Thanks to the insatiable demand for data centre capacity due to the structural shift to the cloud, NEXTDC has been growing at a strong rate for years.

Pleasingly, this trend is expected to continue and support further growth in the coming years. In addition to this, NEXTDC is now looking to boost its growth by expanding into the Asian market. If this is a success, it could provide it with a significant market opportunity.

Citi currently has a buy rating and $14.45 price target on the company’s shares. This compares to the latest NEXTDC share price of $11.85. It notes that a majority of its near-term earnings are already contracted and customer expansion is underpinning its medium-term forecasts.

Temple & Webster Group Ltd (ASX: TPW)

Another ASX share to look at is Temple & Webster. It is Australia’s leading online furniture and homewares retailer.  Temple & Webster has been benefiting greatly from the structural shift to online shopping. This underpinned explosive growth during the first half of FY 2021.

Pleasingly, online furniture shopping is still in its infancy compared to other categories. But this is expected to change in the future, which is why management is now aiming to cement its leadership position by investing heavily in marketing.

Credit Suisse supports this decision and currently has an outperform rating and $12.54 price target on its shares. The broker sees scope for the furniture industry to reach ~13% in online penetration by FY 2025. It believes Temple & Webster is well-placed to benefit from this.

The post 2 high quality ASX shares that could be buys appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted shares on the ASX
• 2 ASX growth shares that could be buys in July 2021
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• ASX 200 flat, e-commerce ASX shares soar, Metcash rises

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 Temple & Webster Group Ltd. The Motley Fool Australia has recommended Temple & Webster Group 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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Although the shares listed below may not offer the largest yields on the market, they are growing at a solid rate. This could make them great long term options for patient income investors.

Here’s why analysts are rating them as buys right now:

Carsales.Com Ltd (ASX: CAR)

The first dividend share to look at is Carsales. It is a leading online advertising services company with a focus on the automotive industry. It generates its revenue predominantly from classified and display advertising. The former is from private sellers and dealer customers selling vehicles, whereas the latter is advertising from corporate customers such as finance and insurance companies.

It has been tipped for growth over the 2020s thanks to its dominant auto listings business in the ANZ market and its growing international operations. The latter will soon be boosted by the acquisition of a majority stake in US based Trader Interactive. It is a digital marketing solutions and services provider to the commercial truck, recreational vehicle, powersports, and equipment industries.

One broker that is positive on its prospects is Morgan Stanley. The broker currently has an outperform rating and $23.00 price target on its shares. This compares to the latest Carsales share price of $20.61. Morgan Stanley is forecasting dividends per share of 62 cents in FY 2021 and then 71.6 cents in FY 2022. This represents fully franked dividend yields of 3% and 3.5%, respectively.

Ramsay Health Care Limited (ASX: RHC)

Ramsay Health Care could be an ASX dividend share to consider. It is a global private healthcare company with facilities catering for a broad range of healthcare needs. This ranges from primary care to highly complex surgery, as well mental health care and rehabilitation.

The company is currently looking to add to its portfolio with the acquisition of Spire Healthcare. This morning Ramsay increased its offer in the hope of sealing a deal. If the takeover is a success, it is expected to create a leading private health care services provider in the lucrative UK market. It will also diversify its UK payor sources, case mix, expand the geographic reach of its capabilities, and improving capacity utilisation.

For now, though, Ramsay appears well-placed to benefit from a post-pandemic backlog in surgeries in the near term. This is expected to underpin solid earnings and dividend growth in the coming years.

Citi is bullish on Ramsay and currently has a buy rating and $76.00 price target on its shares. This compares to the latest Ramsay share price of $62.90. The broker is forecasting fully franked dividend yields of 2.4%, 3.3%, and then 3.6% over the next three financial years.

The post 2 growing ASX dividend shares named as buys appeared first on The Motley Fool Australia.

More reading

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• Ramsay (ASX:RHC) share price lower on UK acquisition update
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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 recommended Ramsay Health Care Limited and carsales.com 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 Rent.com.au Ltd (ASX: RNT) share price has spent today’s session firmly in the green, shooting up 11.5% in early trading.

The Rent.com.au share price was trading at 14.5 cents at the market close today, up 7.69% after hitting an intraday high of 15 cents. This means it has finished the previous 5 sessions more than 16% higher.

Let’s take a look at the Rent.com.au share price and some of the news around its price action this year.

Rent.com.au share price trends

Despite there being no market-sensitive information specific to the company today, shares in the rental property website continue an impressive run this year to date.

Since 1 January, Rent.com.au shares have catapulted more than 190%, far outpacing the S&P/ASX 200 Index (ASX: XJO)’s return of 9.7% over the same time period.

Over the previous 12 months, the Rent.com.au share price has delivered a return of 311%, again outpacing the broad index’s return of ~22% for the same period.

Much of this upside can likely be attributed to two key events in the company’s growth narrative.

Firstly, Rent.com.au announced back in February that well-known Australian tech investor Bevan Slattery had made a $2.75 million investment in the company. The share price rocketed 218% higher on the day of the announcement.

Later in March, the company announced that its FinTech offering RentPay had secured an agreement with SkyCredit Ltd, effectively adding beneficial features to the RentPay platform. RentPay is an application that allows direct debit forms of rent servicing, all provided on a ledger for future rental reference.

Both announcments seem to have been welcomed by the market with the company’s share price skyrocketing from 4 cents to a high of 39.5 cents.

Rent.com.au share price snapshot

The Rent.com.au share price is currently trading well off its 52-week high of 39.5 cents but is sitting above the 52-week low of 3 cents.

At the current share price of 14.5 cents, Rent.com.au has a market capitalisation of $57.7 million.

The company has negative earnings per share from the most recent filings and does not pay a dividend to shareholders.

The post The Rent.com.au (ASX:RNT) share price surged 11.5% today appeared first on The Motley Fool Australia.

More reading

• 2 excellent ASX shares that could be buys for a retirement portfolio
• 2 ASX 200 shares that could be buys for dividends
• 5 worst-performing ASX 200 healthcare shares of FY21
• ASX 200 drops, Myer soars, Ramsay down
• Australia’s favourite international shares? Tesla (NASDAQ:TSLA) tops the list

Zach Bristow has no positions 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 options for a retirement portfolio, then you might want to look at the shares listed below.

These high quality ASX shares could be great options for retirees. Here’s what you need to know about them:

Lifestyle Communities Limited (ASX: LIC)

The first option for retirees to consider is Lifestyle Communities. It builds, owns, and operates land lease communities which provide affordable housing options to Australians over 50. Its land lease model allows working, semi-retired, and retired people to downsize their family home to free up equity in retirement whilst enjoying resort style living.

According to a note out of Goldman Sachs, its analysts see strengthening demand for land lease as the ageing population looks to enhance retirement by releasing equity from the family home.

Its analysis suggests the current 2% to 3% of people over 65 living in a land lease community could rise to 5% over the medium term. In light of this, it feels Lifestyle Communities is well-placed for growth in the coming years.

As a result, the broker has a conviction buy rating and $16.50 price target on the company’s shares. This compares to the latest Lifestyle Communities share price of $14.80.

Goldman is also forecasting consistent dividend growth over the next few years. And while the current yield on offer is a touch on the slender side, it will grow in time.

Wesfarmers Ltd (ASX: WES)

Another retirement share to consider is this $66 billion leading conglomerate.

Wesfarmers has a portfolio of high quality businesses. This includes retailers, such as Bunnings and Kmart, industrial businesses, and even a lithium miner. Combined, these businesses have positioned Wesfarmers for growth over the 2020s.

In addition, the company has significant balance sheet strength. This gives Wesfarmers the opportunity to make potentially lucrative and value accretive acquisitions in the near future.

Goldman Sachs is a fan of Wesfarmers as well. It currently has a buy rating and $59.70 price target on the company’s shares.

The broker is also forecasting fully franked dividends per share of $1.84 in FY 2021, $1.93 in FY 2022, and then $2.08 in FY 2023. Based on the latest Wesfarmers share price, this means yields of 3.2%, 3.3%, and 3.6%, respectively.

The post 2 excellent ASX shares that could be buys for a retirement portfolio appeared first on The Motley Fool Australia.

More reading

• ASX 200 Weekly Wrap: ASX finishes FY21 on a high
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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 owns shares of and has recommended 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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