Category: Stock Market

The S&P/ASX 200 Index (ASX: XJO) has finished yet another week in the green, making this the third week in a row of ASX market gains.

A solid day of positive trading on Friday helped offset some of the weakness seen earlier in the week and led the ASX 200 to record a 0.25% gain for the week overall. Although it’s a rather inconsequential gain (meaning the ASX was pretty much flat for the week), psychology and sentiment are important factors to consider in the investing world!

Excitement over the lifting of coronavirus restrictions in several states was likely to be partly behind the market’s optimism, as was a surge in ASX resources shares late in the week. Although there were some negative developments over Australia’s relationship with China during the week, which included a flagging of restrictions for Australian beef and barley exports, this wasn’t enough to dent the ASX’s luke-warm enthusiasm.

It’s fair to say (in my opinion anyway) that the ASX 200 wouldn’t have broken even last week if it wasn’t for the massive surge we saw in ASX gold miners late in the week. The price of gold rallied last week, increasing from around US$1,697 per ounce on Monday to over US$1,750 an ounce by Friday (up around 3%). That was, of course, catnip for gold bug investors, who pushed the shares of ASX gold miners up dramatically on Thursday and Friday. Resolute Mining Limited (ASX: RSG) was the standout, up 14.2% for the week, but all ASX gold miners enjoyed healthy gains.

Of course, the other ‘big news item’ last week was Commonwealth Bank of Australia (ASX: CBA)’s long-awaited market update for its third-quarter. As the only ASX bank of the ‘big four’ that hasn’t yet had to front its investors ‘post-COVID19’, the market was eagerly awaiting some news. CBA reported a net profit for the quarter of around $1.3 billion and also announced a $1.7 billion sale of a 55% stake in wealth management business Colonial First State to private firm KKR. The markets weren’t really sure what to make of these announcements, with Commonwealth shares first dipping and then rallying on the news. The enthusiasm didn’t last past Wednesday, however, and Commonwealth shares ended the week slightly lower.

How did the markets end the week?

As discussed earlier, the ASX 200 had a relatively flat week – starting at 5,391.1 points and finishing the week 0.25% higher at 5,404.8 points.

Monday was the week’s best day with a 1.3% gain. Then we saw a 1.1% dip on Tuesday, followed by a mild gain on Wednesday and another big drop of 1.7% on Thursday. But in the end, it was the 1.4% gain on Friday that saved the ASX 200’s bacon for the week.

Meanwhile, the ALL ORDINARIES (ASX: XAO) also had a relatively flat week – starting at 5,488 points on Monday and finishing up at 5,492.8 points on Friday for a five-day gain of 0.08%.

Which ASX shares were the biggest winners and losers?

Let’s now get into the Fool’s equivalent of the ‘gossip pages’ and see which ASX shares were the week’s biggest winners and losers. As always, let’s start with the losers!

Worst ASX losers	% loss for the week
Corporate Travel Management Ltd (ASX: CTD)	11.8%
Challenger Ltd (ASX: CGF)	10.9%
Unibail-Rodamco-Westfield (ASX: URW)	10.4%
Jumbo Interactive Ltd (ASX: JIN)	9.8%

Most of this week’s losers would be familiar with their presence in this column by now.

Leading the pack with last week’s wooden spoon was embattled travel stock Corporate Travel Management, whose shares sunk nearly 12% despite no major news out of the company. Corporate Travel shares have more than doubled since the lows we saw in March, but are still down nearly 50% year-to-date.

Challenger was also in the wars last week, again despite no major news emanating out of the annuity provider. This company is especially vulnerable to low interest rates, so perhaps investors were spooked from the rumours last week that the Reserve Bank of Australia might have to adopt negative interest rates in tandem with the Reserve Bank of New Zealand. Challenger shares are also down close to 50% year-to-date.

Now that the losers are out of the way, let’s take a peek at last week’s winners!

Although the spotlight was on gold miners on Friday, the biggest ASX winner last week was lithium miner Pilbara Minerals which ended the week with a 20% gain. There was no major news out of this resources stock either, but perhaps some value investors got a case of FOMO on Thursday when the stock hit 20 cents a share. Regardless of the cause, Pilbara was at 24 cents by Friday afternoon.

Southern Cross Media was another winner this week, with investors seemingly responding well to the company’s recent capital raising and a positive rating from a major broker. Advertisers have been hit hard by this crisis, but clearly the deep pockets of Mr Stokes are giving investors some confidence in Seven West.

As discussed above, Resolute Mining was the best performing ASX gold miner with a 14.2% surge last week. But Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) also had great weeks – boasting 9.5% and 7.75% gains, respectively. 

What is this week looking like for the ASX 200?

Well, the ASX 200 has now managed three weeks of gains in a row, so bulls will no doubt be hoping for a quadrilogy by the end of this week. But (as always during these uncertain times), we shall just have to wait and see if this eventuates.

There were clearly some market wobbles going on last week, so it is possible that the bears will regain the steering wheel this week. Particularly if there is any bad news (keep an eye on the China space) or if infections of coronavirus spike after lockdown restrictions are lifted (fingers crossed for the negative). 

Before we go, let’s have a look at how the major ASX 200 blue-chips are faring:

ASX company	Trailing P/E ratio	Last share price	52-week high	52-week low
CSL Limited (ASX: CSL)	44.16	$301.84	$342.75	$197.00
Commonwealth Bank of Australia (ASX: CBA)	10.81	$59.60	$91.05	$53.44
Westpac Banking Corporation (ASX: WBC)	11.45	$15.26	$30.05	$13.47
National Australia Bank Limited (ASX: NAB)	13.87	$15.46	$30.00	$13.20
Australia and New Zealand Banking Group Limited (ASX: ANZ)	10.51	$15.44	$29.30	$14.10
Woolworths Group Ltd (ASX: WOW)	17.50	$35.16	$43.96	$31.02
Wesfarmers Ltd (ASX: WES)	19.65	$37.90	$47.42	$29.75
BHP Group Ltd (ASX: BHP)	11.02	$31.67	$42.33	$24.05
Rio Tinto Limited (ASX: RIO)	11.31	$85.36	$107.99	$72.77
Coles Group Ltd (ASX: COL)	17.11	$15.21	$18.09	$12.32
Telstra Corporation Ltd (ASX: TLS)	18.29	$3.17	$4.01	$2.87
Transurban Group (ASX: TCL)	160.85	$13.60	$16.44	$9.10
Sydney Airport Holdings Pty Ltd (ASX: SYD)	30.80	$5.51	$9.30	$4.37
Newcrest Mining Limited (ASX: NCM)	26.95	$30.23	$38.87	$20.70
Woodside Petroleum Limited (ASX: WPL)	37.52	$21.26	$37.55	$14.93
Macquarie Group Ltd (ASX: MQG)	12.36	$105.08	$152.35	$70.45

And finally, here is the lay of the land for some leading market indicators:

•     S&P/ASX 200 (XJO) at 5,404.8 points
•     ALL ORDINARIES (XAO) at 5,492.8 points
•     Dow Jones Industrial Average at 23,685.42 points
•     Gold (Spot) swapping hands for US$1,740.51 per troy ounce
•     Iron ore asking US$90.66 a tonne
•     Crude oil (Brent) trading at US$32.50 a barrel
•     Crude oil (WTI) going for US$29.52 a barrel
•     Australian dollar buying 64.14 US cents
•     10-year Australian Government bonds yielding 0.92% per annum

Foolish takeaway

We saw some very interesting things on the ASX this week, including gold riding to the ASX’s rescue on Friday to keep the winning streak alive. It’s a strange and crazy time to be an investor these days, that’s for sure. But as always, remember to drown out the white noise and negativity we are subjected to on a daily basis, and focus on the long-term. That’s what the best investors in the world do, and I think we can always find time to learn from the best!

But that’s all for now, fellow Fools. Stay safe, stay rational and stay Foolish!

Returns as of 6/5/2020

Sebastian Bowen owns shares of National Australia Bank Limited, Newcrest Mining Limited, and Telstra Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Jumbo Interactive Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of and has recommended Challenger Limited, Corporate Travel Management Limited, Macquarie Group Limited, and Telstra Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET, Transurban Group, Wesfarmers Limited, and Woolworths Limited. The Motley Fool Australia has recommended Jumbo Interactive 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.

More reading

• I would reinvest my Macquarie dividends in these top ASX shares
• 5 ASX 200 winners and 5 losers of the week
• How this $70m ASX small cap is cutting down a $50bn industry
• 7 roaring ASX mid-cap shares last week
• Why I think it’s time to buy this ASX 200 share

The post ASX 200 Weekly Wrap: Gold miners help edge ASX ever higher appeared first on Motley Fool Australia.

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ASX dividend shares could be the way to rescue your income hopes. The ultra low interest rates by the RBA (and elsewhere) are causing havoc for income-seekers.

If people are invested in cash or bonds for cash then it’s hardly earning anything any more. How are you supposed to live on a return of less than 1%? That’s less than (normal) inflation!

Unprecedented times call for unprecedented measures. I don’t blame the RBA for doing whatever it can to help the situation. But people wanting income are left short changed.

I think that ASX dividend shares are the answer. Here are two ideas:

WAM Research Limited (ASX: WAX) 

WAM Research is a listed investment company (LIC) which invests in undervalued small and medium businesses.

I think WAM Research is a great ASX dividend share because it has increased its dividend every year since the GFC and it currently offers a grossed-up dividend yield of 11% at the time of writing.

I believe it’s able to pay such a big dividend because of two reasons. The first reason is that it’s able turn capital gains and dividends received into a smoothed dividend for shareholders. The second and most important reason is that its investment returns have been very strong over the past decade.

In these uncertain times I think it’s reassuring knowing that WAM Research usually carries a good amount of cash in its portfolio.

Brickworks Limited (ASX: BKW) 

I think Brickworks is a great ASX dividend share, it currently has a grossed-up dividend yield of 6.3%. The latest result saw a 6% increase of the dividend. 

Brickworks is a diversified property business which has a number of attractive segments: Australian building products, US building products, ‘investments’ and an industrial property trust.

I believe it’s this mix of assets that has allowed Brickworks to grow or maintain its dividend every year for over 40 years. That income is entirely supported by its investments and property trust, it doesn’t need the building products to be generating profit to maintain (and slowly grow) the dividend. The properties in the property trust will slowly increase their rental income.

ASX dividend share takeaway

Share prices will always be volatile, but I think dividends from ASX shares can provide that steady cashflow into your bank account that assets like bonds just can’t match right. At the current prices I’d probably go for Brickworks because it’s trading at an attractive discount to its asset values.

More reading

• Why I think it’s time to buy this ASX 200 share
• ASX shares can help millennials retire before their parents
• Should you invest in ASX shares for income?
• Get paid huge amounts of cash to own these ASX dividend shares
• Take advantage of ASX share market volatility

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Brickworks. 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 2 ASX dividend shares to rescue your income hopes appeared first on Motley Fool Australia.

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The Macquarie Group Ltd (ASX: MQG) share price is trading lower in morning trade after going ex-dividend.

Eligible shareholders of the investment bank can now look forward to being paid its $1.80 per share partially franked final dividend on July 3.  

In the meantime, now might be a good time to think about where to reinvest these dividends if you’re not planning to use the funds as income.

Three top shares that I would reinvest the dividends into are as follows:

BetaShares NASDAQ 100 ETF (ASX: NDQ)

The first option to consider investing your dividends into is the BetaShares NASDAQ 100 ETF. As its name implies, this exchange traded fund provides investors with exposure the 100 largest non-financial shares on the Nasdaq index. The majority of these companies are household names such as Amazon, Apple, Microsoft, Netflix, Starbucks, and Zoom. As a whole, I think these 100 companies have the potential to grow at a quicker rate than the rest of the economy over the next decade. This could lead to the BetaShares NASDAQ 100 ETF providing investors with strong returns for many years to come.

Dicker Data Ltd (ASX: DDR)

If you’re looking for even more dividends then you might want to take a look at Dicker Data. It is a leading wholesale distributor of computer hardware and software. The company has been a real standout performer over the last few years and has been growing both its earnings and dividends at a strong rate. This has continued to be the case in 2020 despite the crisis, with management recently revealing plans to lift its full year dividend by 31% to 35.5 cents per share in FY 2020. This represents a 5.1% fully franked dividend yield.

ResMed Inc. (ASX: RMD)

A final share to consider buying is ResMed. I think it is one of the best options in the healthcare sector and a great place to invest your Macquarie dividends. ResMed is a sleep treatment focused medical device company which looks well-placed for long term growth due to the proliferation of obstructive sleep apnoea (OSA). It estimates that just 20% of OSA sufferers have been diagnosed at this point. Due to the quality of its products and software, I expect ResMed to capture a greater slice of this growing market over the next decade. This should underpin strong earnings growth for years to come.

More reading

• ASX 200 Weekly Wrap: Gold miners help edge ASX ever higher
• 5 things to watch on the ASX 200 on Monday
• 3 top ASX dividend shares to buy next week
• 3 ASX healthcare shares to buy for strong long-term growth
• 2 quality ASX dividend shares for retirement income

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BETANASDAQ ETF UNITS, Dicker Data Limited, and Macquarie Group Limited. The Motley Fool Australia has recommended ResMed 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.

The post I would reinvest my Macquarie dividends in these top ASX shares appeared first on Motley Fool Australia.

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Last week continued the turbulent ASX volatility we have been living with for the past 3 months. The S&P/ASX 200 Index (ASX: XJO) initially rose by 1.7% or 90 points on Monday, then fell by 3% by Wednesday. The week provided investors with ASX 200 winners and losers.

The overall sentiment was driven by 2 emerging issues. The US reported a weekly jobless claims total of 2.981 million, which brings the jobless number to a post-war high of 36.5 million. In Australia, the unemployment rate rose to 6.2% with the government anticipating a peak of 10%.

Added to this were escalating tensions between the US and China, combined with Chinese bans on Australian exports and uncertainty over our trading relationship. 

ASX 200 winners

The ASX 200 winners were drawn predominantly from commodities producers and in particular, the ASX gold miners. 

The Graincorp Ltd (ASX: GNC) share price rose by 12.93% over the week. The company reported a $58 million dollar half-year profit due to the easing of the drought. Investors have praised GrainCorp for the demerger of its malt producing arm, now United Malt Group Ltd (ASX: UMG), and selling off its bulk liquid terminals business. A stripped-down GrainCorp, with a strong insurance arrangement in place to manage drought, is a core industry in times of crisis.

All ASX gold mining large caps rose over the week, continuing the long-term historical trend of the gold price rising as share prices fall. Among the ASX 200 winners were Saracen Mineral Holdings Limited (ASX: SAR) with a massive 13.22% share price rise, Regis Resources Limited (ASX: RRL) with a rise of 11.16%, and St Barbara Ltd (ASX: SBM) with an 11.03% increase.

Ramsay Health Care Limited (ASX: RHC) had a week that reflected market sentiment. On Wednesday, 13 May, the company’s share price tumbled by 3%, yet it regained momentum to finish the week up by 5.3% from Monday’s opening price. Ramsay announced on Friday, 15 May a binding heads of agreement with New South Wales. This was a commitment to make its facilities available during the COVID-19 pandemic. A similar deal already exists with Queensland. 

ASX share price falls

As well as the ASX 200 winners, the market also claimed several losers. Falling share prices last week centred on shares in the real estate and bank sectors. The Commonwealth Bank of Australia (ASX: CBA) released a housing sector prognosis with its Q3 trading results. This noted a forecast for housing prices to drop between 11% and 32%.

Correspondingly, we saw shares fall across the ASX real estate investment trusts and related real estate businesses. Scentre Group (ASX: SCG) saw its share price fall by 10.18%, Mirvac Group (ASX: MGR) saw a fall of 7.62%, and real estate sales website REA Group Limited (ASX: REA) saw its shares fall by 5.85%. Accordingly, we also saw share price falls across the banking sector averaging about 4%.

The Xero Limited (ASX: XRO) share price also fell by 8.79% over the week. Despite producing the company’s first profit report, Xero investors remain skittish. As an accounting provider to small and medium enterprises, the market is expecting it to take a hit at some point. There also appeared to be some sentiment opposed to diverting spending from customer growth.

Lastly, Alliance Aviation Services Ltd (ASX: AQZ) saw its share price drop by 6.64% despite being one of the few airlines still operating. The Alliance share price was hit by news of the aspirations of Singapore-backed Regional Express Holdings Ltd (ASX: REX) to fly between capitals. The Queensland government also frightened the horses with its ambitions to enter the aviation market as a bidder for Virgin Australia Holdings Ltd (ASX: VAH).

More reading

• ASX 200 Weekly Wrap: Gold miners help edge ASX ever higher
• How this $70m ASX small cap is cutting down a $50bn industry
• 7 roaring ASX mid-cap shares last week
• ASX 200 up 0.25% this week, CBA reveals Q3
• Top brokers name 3 ASX 200 shares to sell next week

Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia has recommended Ramsay Health Care Limited, REA Group Limited, and 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.

The post 5 ASX 200 winners and 5 losers of the week appeared first on Motley Fool Australia.

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The online sales surge reported by Shaver Shop Group Ltd (ASX: SSG) last week is an ominous sign for the $50 billion shopping mall industry.

The $70 million market cap retailer reported last Thursday a near 400% surge in online sales for the six weeks to May 10 as Aussies rediscovered the love of self-grooming during this COVID-19 lockdown.

This has the potential to re-write the lopsided relationship between small retailers and all-powerful shopping centre landlords sooner than many think.

Six years in six weeks

Shaver Shop isn’t the only retailer to see a big online surge. Others like Myer Holdings Ltd (ASX: MYR), Premier Investments Limited (ASX: PMV) and JB Hi-Fi Limited (ASX: JBH) have reported strong growth in internet sales.

While the online trend isn’t new, the surge in adoption rates due to the coronavirus pandemic over the six-week shutdown is probably equal to what is forecast for the next six years!

Power rebalances

This changes the power balance between ASX retailers and property groups in two ways. The first is the realisation by retailers that they don’t need as many shops as they thought previously.

The second is the devaluation of foot traffic. In the past, mall operators would incentivise large anchor tenants, such as Woolworths Group Ltd (ASX: WOW), to move in as they draw large number of shoppers.

This allows landlords to charge a premium to smaller retailers who regard high traffic areas as a key sales driver. Smaller retailers are usually charged a base rent plus a variable component on sales turnover.

Mega malls have peaked

But the business model for landlords may have to change and it’s the mega malls that are likely to feel more of the impact of this structural shift.

The losers include Vicinity Centres (ASX: VCX) with its flagship Chadstone Shopping Centre, and Scentre Group (ASX: SCG) with its Westfield branded shopping destinations.

If physical stores become pick-up points for online orders or a showcase for products to aid web purchases, then retailers will baulk at paying a premium to be in mega malls.

Foolish takeaway

Don’t get me wrong, I am not saying mega malls will turn into ghost cities in the post COVID-19 apocalypse. But their strategic value has probably peaked and these landlords have a lot of shops to fill.

What this means for investors in ASX-listed Australian real estate investment trusts (A-REITs) is that they may need to question traditional valuation models when making their investment decision.

On the flipside, the online evolution is likely to lift the operating margins for ASX retailers. This means that profitability can improve even if online sales don’t fully offset lost sales from a physical store.

The David and Goliath battle is only just beginning.

More reading

• These are the 10 most shorted ASX shares
• ASX shares that could benefit from the Internet of Food
• Broker tips 10 ASX 200 shares for a post-coronavirus recovery
• 4 top ASX 200 shares for blue chip investors
• Why I think Premier Investments is the best retail share on the ASX

Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. Connect with him on Twitter @brenlau.

The Motley Fool Australia owns shares of and has recommended Premier Investments Limited. The Motley Fool Australia owns shares of Woolworths Limited. 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.

The post How this $70m ASX small cap is cutting down a $50bn industry appeared first on Motley Fool Australia.

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Many ASX mid-cap shares have been on a tear over the past week. There were a couple of stand out performers in the aviation space, as well as the iron ore mining space. However, last week belonged predominantly to the ASX gold miners.

This is a reinforcement of just how uncertain the market is as Australia moves from lockdown. Fears over global trade and tensions, concerns over economic forecasts, and uncertainty about potential second wave infections are driving safe-haven investing. 

ASX mid-cap movers

The Regional Express Holdings Ltd (ASX: REX) share price rose an impressive 21.5% last week. On Wednesday, the company’s shares jumped by 38.3%. This was after deputy chairman John Sharp on Tuesday told ABC radio the airline was planning a domestic service similar to one that Virgin Australia had operated. Normally, such claims would be laughed off. However, REX runs a very tight ship and is talking about an achievable $200 million investment. 

The Champion Iron Ltd (ASX: CIA) share price popped to 15.26% up from Monday’s open. This was a recognition of the value of its 66.5% iron ore concentrate from its Bloom Lake operations in Canada. Iron ore has been remarkably resilient during the COVID-19 pandemic. Iron ore contract prices were up by 7% last week.

Resolute Mining Limited (ASX: RSG) saw its share price rise by 14.2%. Resolute is a well-performing gold mining company. In part, it has benefited by investor sentiment over gold. However, it also announced the success of the second tranche of its ~$195 million equity raising launched in January 2020. It also maintained FY20 guidance despite COVID-19 constraints.

Other gold miners that saw their shares rise last week include Silver Lake Resources Limited (ASX: SLR), which rose by 9.14% over the week, and Perseus Mining Limited (ASX: PRU), which saw its share price rise by 5.1%. Also, the Gold Road Resources Ltd (ASX: GOR) share price rose by 7.1%.

In the industrial sector, shipbuilder Austal Limited (ASX: ASB) saw its share price jump by 4.4% over the week. This is recognition of the solid management, consistent contract wins, and the defensive nature of the share. 

Foolish takeaway

The mid-cap shares on the ASX are very volatile. When things go well, they can jump several times more than their large-cap stablemates. However, when things go badly, they tend to fall by greater percentages as well.

Last week’s share price movements underscore the uncertainty in the market, yet there are still opportunities for discerning investors. For instance, Champion Iron should provoke interest in mid-cap iron ore miners.

More reading

• These were the best performing ASX 200 shares last week
• ASX 200 finishes up 1.4%, gold miner share prices surge
• 6 ASX shares driving the Australian gold boom
• Why the best performing ASX stock might have more room to run higher
• Losers of Virgin Australia’s potential nationalisation

Daryl Mather owns shares of Austal Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Austal Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post 7 roaring ASX mid-cap shares last week appeared first on Motley Fool Australia.

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I think it’s time to buy the diversified property S&P/ASX 200 Index (ASX: XJO) share Brickworks Limited (ASX: BKW).

The ASX 200 has plenty of quality shares that would make good long-term investments for most portfolios. An added bonus from owning Australian shares is that franking credits are attached to the dividends that are paid.

I think it’s time to buy Brickworks for these reasons:

Low share price

One of the most important parts of investing is buying that asset at a good price. Due to the coronavirus the Brickworks share price has fallen 34% since 20 February 2020. Having the option to buy this great long-term focused ASX 200 share is very attractive right now.

There are some shares that are priced a lot cheaper at the moment because of potential wipeout risk. Think how bad it could get for the banks if bad debts get significantly worse. But I don’t think the Brickworks share price decline is warranted considering its long-term prospects.

Good dividend for an ASX 200 share

One of the main things that ASX 200 share investors look for is a decent dividend. I don’t think banks like Westpac Banking Corp (ASX: WBC) can be relied upon for income. But Brickworks has a great record. It hasn’t cut its dividend for over 40 years. I think that’s a fantastic record.

It’s not just the reliability that I like though. The grossed-up dividend yield is really attractive at 6.6%. The falling share price has boosted the starting yield for investors.

Diversification

One of the main reasons I’m confident about Brickworks for the future as an ASX 200 share pick is the diversification of its business.

Most people will think of Brickworks for its Australian building products divisions that supplies the country with bricks, paving, roofing, precast and so on.

But there are other parts to the business that should be regarded just as well. Its American building products business is just getting started after a few acquisitions. The US is a huge market with plenty of growth potential.

It also has two defensive assets – its ‘investments’ divisions and the 50% stake of its industrial property trust that it owns along with Goodman Group (ASX: GMG). Both of these provide defensive earnings and good cashflow.

Foolish takeaway

I think Brickworks is one of the best ASX 200 shares to choose right now. Its shorter-term construction income looks uncertain and bleak – which is precisely why the share price is down so much. When things start improving the share price will probably go up too, much sooner than we see a recovery in the earnings.

More reading

• These ASX 200 shares are up over 40% in 2020
• 5 things to watch on the ASX 200 on Monday
• ASX 200 up 0.25% this week, CBA reveals Q3
• Top brokers name 3 ASX 200 shares to sell next week
• Why BHP is an ASX 200 dividend share to buy today

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Brickworks. 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 Why I think it’s time to buy this ASX 200 share appeared first on Motley Fool Australia.

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The S&P/ASX 200 Index (ASX: XJO) may have fallen sharply this year because of the pandemic, but not all shares on the index have been dragged lower.

Some have even managed to carve out exceptionally strong gains this year despite the crisis.

Three ASX 200 shares that are up more that 40% since the start of the year are listed below. Here’s why they are charging higher:

Afterpay Ltd (ASX: APT)

The Afterpay share price has risen 41% since the start of the year. The catalyst for this strong gain has been a particularly strong third quarter update and news of a new substantial shareholder. In respect to its update, Afterpay proved the doubters wrong when it delivered very strong growth in the third quarter despite the pandemic. At the end of March, Afterpay’s underlying sales reached $7.3 billion year to date. This was a 105% increase on the prior corresponding period. Its shares were then given a major boost by news that Chinese tech giant Tencent had become a substantial shareholder with a 5% stake. The market appears to believe the WeChat owner could help Afterpay expand into the Asian market in the future.

Evolution Mining Ltd (ASX: EVN)

The Evolution share price has zoomed 50% higher in 2020. The driver of this gold miner’s strong gain has of course been a significant rise in the price of the precious metal. Over the weekend the gold price hit a seven-year high due to a combination of economic concerns, falling interest rates, and government stimulus. The S&P/ASX All Ordinaries Gold index is up over 18% since the start of the year.

NEXTDC Ltd (ASX: NXT)

The NEXTDC share price is up over 42% year to date. Investors have been buying this data centre operator’s shares after it revealed increasing demand for its services during the pandemic. Demand was already very strong due to the ongoing shift to the cloud, but the crisis appears to accelerated this shift. NEXTDC has taken advantage of its strong share price and the increased demand to complete a fully underwritten institutional placement to raise $672 million. These funds will be used partly to develop a new Sydney data centre.

More reading

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• 5 things to watch on the ASX 200 on Monday
• Why I would buy these exciting ASX growth shares right now
• ASX 200 up 0.25% this week, CBA reveals Q3
• Top brokers name 3 ASX 200 shares to sell next week

Motley Fool contributor James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia owns shares of AFTERPAY T 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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