May.24 — Governor Andrew Cuomo says he doesn’t “believe this economy just bounces back” even as he marks new steps in reopening New York, and urges the state to rebuild better after the nation’s worst outbreak of Covid-19. He speaks at Jones Beach on Long Island. (Excerpts)
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If you want income then you should replace your term deposit ASX dividend shares.
Term deposits were earning more than 5% not too long ago. But those days are long gone. Term deposits are obviously still a good idea if you’re looking for capital protection. But eating into your capital to pay for your life expenses because the interest rate is so low isn’t a good prospect!
Shares come with risks of course. There are plenty of shares I wouldn’t suggest because of how unstable the dividend may be. I’d only go for ASX dividend shares that may be able to offer very reliable dividends during this coronavirus period:
‘Soul Patts’ is one of the best ASX dividend shares out there, perhaps the best, for dividend reliability. How does the dividend record stack up? It has increased its dividend every year since 2000. It has paid a dividend every year since listing in 1903. That’s a great record!
The investment conglomerate owns shares that are likely to keep paying the dividend (and hopefully growing it) during this period. Shares like TPG Telecom Ltd (ASX: TPM) and Brickworks Limited (ASX: BKW) are two of the biggest sources of investment income for Soul Patts. Both of those shares increased the dividend in the recent results.
I think Soul Patts could be the best ‘set and forget’ individual ASX dividend share because its investments will evolve over time to focus on growing opportunities. It currently offers a grossed-up dividend yield of 4.7%.
Rural Funds is an agricultural real estate investment trust (REIT) that owns a variety of farm types including cattle, cotton, vineyards, almonds and macadamias.
I think it’s a great ASX dividend share for two key reasons. The first is that it aims to increase its distribution by 4% a year. I think this is attractive because it’s comfortably more than inflation. The second reason I like Rural Funds is that its forecast FY21 distribution yield is 5.9%. I think that’s a solid yield in this environment.
The contracted rental indexation and strategy of investing into its farms for productivity improvements are powerful forces for growing the distribution.
Rural Funds’ distribution is funded by the cash net rental profit. Around 20% of that rental profit is currently being re-invested for more growth.
APA Group is another ASX dividend share that has a very strong income growth record for investors. It has increased its distribution every year for a decade and a half.
I’ll tell you what APA Group is. It owns a vast network of 15,000km of natural gas pipelines around Australia with a presence in every mainland state and the Northern Territory. It also owns or has interests in gas storage facilities, gas-fired power stations and renewable energy generation (wind and solar farms). APA owns, or manages and operates, a portfolio of assets worth more than $21 billion and delivers half the nation’s natural gas usage.
The infrastructure giant’s distribution is entirely funded by its cashflow. That cashflow is steadily growing over the years as new projects and investments come online. APA Group is looking for new opportunities both in Australia and in the US. It has already reconfirmed the annual distribution guidance for FY20 of 50 cents per unit, translating to a distribution yield of 4.5% today.
I believe each of these income ideas are great picks for long-term dividends. I’d be comfortable owning them for many years and I think they’ll provide growing income compared to a term deposit, with a much better starting yield. At the current share prices I’d definitely choose Soul Patts first.
But there are other top dividend shares on the ASX, just like these wonderful ideas:
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Edward has just named what he believes is the number one ASX dividend stock to buy for 2020.
This fully franked “under the radar” company is currently trading more than 24% below its all-time high and paying a 6.7% grossed-up dividend.
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But you will have to hurry — history has shown it can pay dividends to get in early to some of Edward’s stock picks, and this dividend stock is already on the move.
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Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks, RURALFUNDS STAPLED, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of APA Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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The S&P/ASX 200 (INDEXASX: XJO) finished the week up 1.8% on Monday’s opening level. This was against a backdrop of continuing trade tensions with our largest trade partner, April figures showing a 17.9% drop in April sales, and Wesfarmers Ltd (ASX: WES) announcing mass closures of Target stores nationally, and the big 3 iron ore miners rising approximately 4% under trade threats.
The ASX is clearly in a bizarre place. Like most of the world we take our lead from the US stock exchanges; which are being driven largely by the large tech shares.
These are some of the bigger news stories in ASX 200 trading last week that went almost totally under the radar.
The Alliance Aviation Services Ltd (ASX: AQZ) share price had a truly phenomenal week, rising 27.96% over the week. On Wednesday the company retracted its suspension of guidance due to Covid-19. It announced it was on target for a profit before tax of over $40 million. The company has been buoyed by its fly-in-fly-out services to resource companies and record charter flights. Alliance was floated as a takeover target for Qantas Airways Limited (ASX: QAN) last year.
Takeovers in general have been sparse since the start of the pandemic. The Village Roadshow Ltd (ASX: VRL) share price leapt a further 16.9% last week on the back of news about a conditional buyout offer by BGH Capital. The offer still represents a premium of 12.5% to Friday’s closing price.
Criticism of the opportunistic and predatory nature of the offer by US investor and 5% stakeholder Mittleman Brothers raised the spectre of a second offer for the embattled entertainer.
The Worley Ltd (ASX: WOR) share price was another ASX 200 winner this week. It jumped by 12.42% over last week. The rising WTI oil price combined with the announcement of two global framework agreements with BP International raised the likelihood of strong near term performance.
The A-REIT sector was among the ASX 200 winners last week across the board. The Stockland Corporation Ltd (ASX: SGP) share price rose 11.64% over the week. A very confident Stockland CEO Mark Steinert was interviewed by the ABC on Wednesday. He discussed rising trends in foot traffic and the progress around difficulties with Premier Investments Limited (ASX: PMV). Steinert also spoke positively about the residential real estate market.
Likewise the Scentre Group (ASX: SCG) share price rose by 10.89%. Scentre announced the successful raising of AUD$2.3 billion from the US bond markets on May 20.
As well as the ASX 200 winners, last week also saw a few share price falls. However, the magnitude of share price slides has been lower than what we have come to expect.
The Austal Limited (ASX: ASB) share price fell by 9.74% over the week. Investors are still reeling from the company’s loss of a competitive tender worth US$5.5 billion to Italy’s Fincantieri (FCT.MI).
Transmission utility Ausnet Services Ltd (ASX: AST) saw its share price drop by 6.84% over the week. The company had recently announced it was looking into equity raising as one of its options to fund growth. The market is treating the share is if this process has commenced.
Regis Resources Limited (ASX: RRL) saw its share price fall by 5.5% despite a wave of good news over the past month.
CSL Limited (ASX: CSL) also saw its share price fall by 5.49% last week. Likely as a result of investors taking profits off the table.
Download our expert report on 5 shares likely to be big winners after Covid-19.
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Daryl Mather owns shares of Austal Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Austal Limited and CSL Ltd. The Motley Fool Australia has recommended Scentre Group. 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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I continue to believe that income investors would be better off with ASX dividend shares than term deposits.
Especially given the outlook for interest rates in Australia. According to the latest weekly economic report by Westpac Banking Corp (ASX: WBC), it continues to see the cash rate remaining at 0.25% for a long time to come.
But which ASX dividend shares should you buy? Here are three that I would snap up today:
The first ASX dividend share to consider buying is BWP. It is a real estate investment trust with a focus on warehouses. Most of BWP’s warehouses are leased to hardware giant Bunnings, which is owned by Wesfarmers Ltd (ASX: WES). Interestingly, Wesfarmers is also a major BWP shareholder with a ~23.6% stake. I think this is a big positive as it is unlikely to do anything (vacate properties en masse, etc) that would negatively impact BWP’s performance and share price. At present I estimate that it offers investors a forward 5.2% yield.
Another ASX dividend share to consider buying is Commonwealth Bank. Although the banks are struggling right now because of the pandemic, with the economy now reopening, I’m optimistic that the worst is behind them. Especially after they collectively announced billions of dollars of provisions over the last few weeks. And while Commonwealth Bank will almost certainly be forced to cut its dividend in FY 2021, the pullback in its share price means it is likely to still provide a very generous yield. I estimate that its shares offer a forward fully franked yield of 6.2%.
A final dividend share to consider buying is Rio Tinto. It feel it would be a great option for income investors that are not averse to investing in the resources sector. The mining giant has been a strong performer over the last few years and looks set to continue this trend in FY 2020. Especially given how iron ore prices remain at lofty levels despite the pandemic. I expect this to lead to strong free cash flows and big dividends for shareholders. In fact, last week Morgans suggested that iron ore prices could continue to rise and believes its shares currently offer a fully franked ~9% FY 2021 dividend yield.
And here is another dividend share which looks well-positioned to grow strongly during the pandemic. This could make it a must buy for income investors..
NEW: Expert names top dividend stock for 2020 (free report)
When our resident dividend expert Edward Vesely has a stock tip, it can pay to listen. After all, he’s the investing genius that runs Motley Fool Dividend Investor, the newsletter service that has picked huge winners like Dicker Data (+92%), SDI Limited (+53%) and National Storage (+35%).*
Edward has just named what he believes is the number one ASX dividend stock to buy for 2020.
This fully franked “under the radar” company is currently trading more than 24% below its all-time high and paying a 6.7% grossed-up dividend.
The name of this dividend dynamo and the full investment case is revealed in this brand new free report.
But you will have to hurry — history has shown it can pay dividends to get in early to some of Edward’s stock picks, and this dividend stock is already on the move.
More reading
Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of Wesfarmers Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The post 3 high yield ASX dividend shares to buy right now appeared first on Motley Fool Australia.
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My ASX share for the week is Washington H. Soul Pattinson and Co. Ltd (ASX: SOL).
The share price of Soul Patts is currently down by 21% compared to where it was before the coronavirus smashed the market. Some quality ASX shares have actually completely recovered to where they were before. Soul Patts isn’t there yet.
The investment conglomerate is a regular favourite pick of mine, but it’d be my ASX share pick for the week for two key reasons over the next few days.
TPG is one of the largest telecommunication companies in Australia and it’s about to get even bigger when it merges with Vodafone Australia. The two telcos have been trying to merge for some time. They were finally victorious in court against the ACCC and are moving forward.
The date has now been set for the shareholder vote to merge the two telcos – 24 June 2020. Not only will the merger bring together two complementary businesses with combined infrastructure, but it will lead to a large special dividend to TPG shareholders such as Soul Patts.
The certainty of the merger going ahead should be a boost for the TPG share price and therefore the Soul Patts portfolio too.
Soul Patts has been listed on the stock exchange since 1903. Think of all the things it has already survived through. Wars, recessions and other global infections like the Spanish Flu.
I think Soul Patts offers more security than most other businesses and most other types of investments. It’s built to last for decades. That’s why it’s my ASX share for the week and indeed for the decades ahead.
I believe it has a safe balance sheet, with long-term focused investments and a pleasing, growing dividend. I think the Milners and CEO Todd Barlow are very aligned with their share holdings.
As Soul Patts increases its diversification with more investments, such as a planned partnership into regional data centres, it makes me even more confident about Soul Patts’ future.
Soul Patts is my ASX share for the week. I plan to be a very long-term shareholder. The Soul Patts share price looks very good to me today, which is why I’d buy some more this week after the positive TPG news.
Soul Patts isn’t the only share I’d love to buy this week for my portfolio. I’ve also got my eyes on these top ASX shares.
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One is a diversified conglomerate trading 40% off it’s all-time high, all while offering a fully franked dividend yield of over 3%…
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Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Washington H. Soul Pattinson and Company 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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At the start of each week I like to look at ASIC’s short position report in order to find out which are the most shorted ASX shares.
This is because I believe it is worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.
With that in mind, here are the 10 most shorted ASX shares this week according to ASIC:
Finally, instead of these most shorted shares, I would buy these dirt cheap shares which analysts have given buy ratings following the market crash.
NEW! 5 Cheap Stocks With Massive Upside Potential
Our experts at The Motley Fool have just released a FREE report detailing 5 shares you can buy now to take advantage of the much cheaper share prices on offer.
One is a diversified conglomerate trading 40% off it’s all-time high, all while offering a fully franked dividend yield of over 3%…
Another is a former stock market darling that is one of Australia’s most popular and iconic businesses. Trading at a significant discount to its 52-week high, not only does this stock offer massive upside potential, but it also trades on an attractive fully franked dividend yield of almost 4%.
Plus, this free report highlights 3 more cheap bets that could position you to profit in 2020 and beyond.
Simply click here to scoop up your FREE copy and discover the names of all 5 cheap shares.
But you will have to hurry because the cheap share prices on offer today might not last for long.
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Motley Fool contributor James Mickleboro owns shares of Galaxy Resources Limited. The Motley Fool Australia owns shares of and has recommended Super Retail Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The post These are the 10 most shorted ASX shares appeared first on Motley Fool Australia.
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