May.18 — Ryanair Holdings Plc Chief Executive Officer Michael O’Leary says that support by German and French governments for their airline industries is “illegal” and will “distort the market.” He made the comments after Europe’s biggest low-cost carrier boosted its liquidity with a 600 million-pound ($726 million) loan backed by the U.K. government. He speaks on “Bloomberg Markets: European Open.”
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May.18 — April’s rally in stock markets “was a classic case of a bear market rally,” according to Rebecca Chesworth, senior equities strategist at State Street Global Advisors. She speaks on “Bloomberg Markets: European Open.”
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Some ASX growth investors dismiss the idea of dividends and dividend income entirely. After all, if you don’t need the income today, why would you buy a company weakening its balance sheet every 6 months by shovelling cash out the door.
But dividends have advantages of their own (not least franking credits) that can help any investor accumulate wealth faster. This choice isn’t always mutually exclusive. There are some ASX shares that offer investors both dividend income today, as well as the opportunity for significant future capital growth tomorrow.
Here are (in my opinion) two such shares.
Telstra is not the kind of company that has a reputation for growth. It’s Australia’s largest telco that makes a crust selling phones, data plans and fixed-line broadband internet. It does have a reputation for dividend income, however. On current prices, Telstra shares are offering investors a trailing dividend yield of 5.1%, or 7.20% grossed-up (based on Telstra’s annualised 16 cents per share dividend over the past 12 months).
That’s a fine yield to be sure, but I also think Telstra has significant growth potential in front of it. That’s because the company is heavily investing in the rollout of 5G technology. 5G is the next ‘big leap’ in mobile internet and promises many new applications like NBN-beating speeds and the Internet of Things.
If all goes well with 5G in the next few years, I see Telstra as a stock with both income and growth potential.
This share isn’t one company, but a listed investment trust (LIT) consisting of an entire portfolio of companies. But not just any companies. Magellan Global Trust has a management team that selects companies from all over the globe that they think are the ‘world’s best’. Right now, these include Facebook, Alibaba, Alphabet (Google), Visa and Tencent, amongst others. All of these names are growth engines that have helped this LIT deliver a performance of 12% per annum since its inception in 2017.
But one of the great features of MGG is that its also geared for income as well. The trust aims to provide its investors with a 4% distribution yield every year, which you can either choose to receive in cash or reinvest at a discount. In this way, I think Magellan Global Trust is a great share to hold for both capital growth and dividend income.
If you liked the sound of these two shares, you definitely won’t want to miss the stock named below!
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.
See the top dividend stock for 2020
*Returns as of 7/4/20
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Alphabet (A shares), Facebook, Telstra Limited, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Facebook, and Visa. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia has recommended Alphabet (A shares) and Facebook. 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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‘Just buy the index’ is a common refrain you hear from investors these days. Index-tracking exchange-traded funds (ETFs) have become a popular pathway for investing in recent years. So much so that the most popular ETF in Australia – the Vanguard Australian Shares Index ETF (ASX: VAS) – now has over $4.8 billion in funds under management.
The ease, simplicity and passive nature of ETFs have driven this surge, together with the (quite frankly) dismal performance of ETFs’ actively managed counterparts.
So why bother trying to buy shares yourself when you can just ‘buy the market’?
ETFs work by buying every share in an index – the good, the bad and the ugly. VAS, for example, holds the largest 300 companies in Australia, with the largest companies (like CSL Limited (ASX: CSL)) having far more weighting than the smallest.
The good news is that you can buy the market just through one single ASX share. ETFs typically have very low fees and expenses as well (VAS only charges a fee of 0.1% per annum for instance).
The bad news is that ETFs are designed to blindly follow an index – meaning the fund will be buying the strong shares along with the weak, the good companies along with the bad – with no discretion in between.
That means you are never going to outperform the ‘market’ because the ETF is the market. You are accepting an average return forevermore.
That might be just fine for those investors who don’t want to put any work into investing and have a very long-term horizon. History shows that even just investing in an ETF like VAS will give you far superior returns to just having your money in cash (even in a high-interest term deposit).
But if you want to use the stock market to generate market-beating returns, ETFs are not the best place to be.
We Fools think anyone has the potential to beat the market (although it’s not easy). But it does require dedication, patience, and the right temperament.
For some people, active investing in this manner just isn’t the right fit, and so index-tracking ETFs might be the best option for those individuals. But if you want to learn how to beat the market, you will have to branch out beyond index ETFs and dive into the world of finding good quality businesses to buy into.
If that sounds like you, why not start with the 5 shares named below!
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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%…
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%.
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Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. 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 Should ASX investors just buy ETF index funds for better returns? appeared first on Motley Fool Australia.
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Is Whitefield Limited (ASX: WHF) the best ASX dividend share? It just grew its dividend in its FY20 result.
Whitefield is a listed investment company (LIC). It’s one of the oldest on the ASX, it has been around since 1923.
It can point to a record of dividends that have been maintained or grown every year over the past 25 years.
In today’s FY20 result the LIC declared a final dividend of 10.25 cents per share, compared to 10 cents per share last year. That is in addition to the 10.25 cents per share it paid as the interim dividend, compared to the prior year’s 9.75 cents per share.
That brings the FY20 grossed-up dividend yield to 6.6% at today’s share price. I think that’s a solid yield in today’s environment.
The ASX dividend share announced an operating profit after tax of $17.66 million. This equated to earnings per share (EPS) of 17.8 cents, a decrease of 3.7%.
Whitefield said that the financial year to March saw two periods. The first 10 months of the year saw moderately widespread dividend and distribution growth from a majority of shares in the portfolio. There was some weakness in the financial and banking sectors. However, the emergence of COVID-19 and the containment measures in February and March meant companies began to cut or defer dividends to preserve cash. I think we’re likely to see cuts for the next 12 months.
Some of the businesses that delivered distribution growth was Brambles Limited (ASX: BXB), ASX Ltd (ASX: ASX) and Medibank Private Limited (ASX: MPL).
Whitefield’s portfolio return for the full year amounted to a negative 8.88%. This outperformed the S&P/ASX 200 Industrials Accumulation Index by 3.15%. I think that’s a solid performance.
The ASX dividend share said that the outlook is dominated by COVID-19. I don’t think that’s surprising. Remember its profit is determined by investment returns. The near-term is full of uncertainty and the financial impacts are “profound”. Whitefield said there is likely to be a very material downturn in both 2020 and 2021.
Whitefield expects to maintain its dividend in the December 2020 result, but said investors should be aware it may have to review its dividend payments if conditions continue to deteriorate.
Seeing as Whitefield is currently trading at around its net asset value, I’m not in a rush to say it’s a buy. But I think Whitefield is one of the best ASX dividend share ideas for conservative income.
But I’d much rather buy this ultra-defensive dividend share for long-term income instead.
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.
See the top dividend stock for 2020
*Returns as of 7/4/20
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. 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 Is this the best ASX dividend share? appeared first on Motley Fool Australia.
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If you have $500 to invest in the share market, I believe you should be thinking long term.
This is because brokerage costs (which are usually around ~$10 a trade) will eat into your profits if you are constantly buying and selling.
With that in mind, here are three top ASX shares which I think could be fantastic buy and hold investments:
I think this payments company would be a great buy and hold investment. Due to the growing popularity of buy now pay later as a payment method with consumers and retailers and its global expansion opportunity, I think Afterpay has the potential to become a payments giant over the next decade. In addition to this, it is worth remembering that the company has signed a strategic partnership with Visa to support the development of innovative new solutions. This could be another driver of growth in the future.
A second option for that $500 investment could be Kogan. It is a growing ecommerce company and the home grown equivalent of Amazon. While the company may not be destined for global domination like Amazon, I believe it has the potential to grow enormously in the local market thanks to the ongoing shift to online for shopping. At present only ~10% of consumer spending is made online, but this is likely to grow materially over the next couple of decades. With this tailwind in its sails, the future looks bright for Kogan.
A final option to consider is another payments company, Pushpay. It provides a donor management system to churches and non-profits. The company’s sales have been growing at a very strong rate in recent years and look likely to continue doing so in the coming years. Management recently revealed that it has set itself a target of winning a 50% share of the medium and large church market. This represents a US$1 billion revenue opportunity for Pushpay and compares favourably to the operating revenue of US$127.5 million it recorded in FY 2020.
And let’s not forget this fourth ASX share which is arguably a must buy right now. No wonder a leading analyst has urged investors to go all in with it.
One “All In” ASX Buy Alert, that could be one of our greatest discoveries
Investing expert Scott Phillips has just named what he believes is the #1 Top “Buy Alert” after stumbling upon a little-owned opportunity he believes could be one of the greatest discoveries of his 25 years as a professional investor.
This under-the-radar ASX recommendation is virtually unknown among individual investors, and no wonder.
What it offers is an utterly unique strategy to position yourself to potentially profit alongside some of the world’s biggest and most powerful tech companies.
Potential returns of 1X, 2X and even 3X are all in play. Best of all, you could hold onto this little-known equity for DECADES to come
Simply click here to see how you can find out the name of this ‘all in’ buy alert… before the next stock market rally.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd and PUSHPAY FPO NZX. 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.
The post Where to invest $500 in ASX shares right now appeared first on Motley Fool Australia.
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The S&P/ASX 200 Index (ASX: XJO) went up more than 1% today in a positive start to the week.
It was another strong day for some of the ASX 200 gold miners. The Saracen Mineral Holdings Limited (ASX: SAR) share price rose by 11.3% and the St Barbara Mining Limited (ASX: SBM) share price went up 7.5%.
Agri business Elders reported its half-year result today, causing the share price to rise almost 10%.
Elders reported that statutory net profit after tax (NPAT) went up by 90% to $52 million. Underlying NPAT rose 68% to $47.6 million. Operating cash flow jumped 309% to $27.4 million.
The company declared the same interim dividend as last year at 9 cents per share.
It said that the result reflected a solid performance from its Rural Products with the gross margin boosted by recent winter crop confidence, high prices for both cattle & sheep and steady earnings in Real Estate and Financial Services.
Elders was one of the best performers in the ASX 200.
The administrators of Virgin have moved the rescue process to a bidder shortlist.
According to Vaughan Strawbridge, lead partner of the administrators, each bidder is well funded and possesses deep aviation experience. Each of the bidders has a plan which could secure the future of thousands of employees.
The ABC has reported those remaining bidders are Bain Capital and BGH Capital, US aviation firm Indigo Partners, and New York-based investor Cyrus Capital Partners.
The ASX 200 private hospital operator continues to make announcements regarding agreements it has achieved with health bodies.
Today the healthcare business said it has finalised the agreement with Western Australia and it has also finalised the agreement with NHS England.
The market sent the Ramsay share price up more than 3% today in positive reaction.
Amid all of this share market volatility there are a lot of opportunities out there. These are some of the best I’ve seen.
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.
Returns as of 7/4/2020
Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Elders Limited and Ramsay Health Care Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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May.17 — Federal Reserve Chairman Jerome Powell says the U.S. recovery could take a while and stretch through the end of next year, even as he downplays the risk of a second great depression. Powell’s remarks follow a warning that asset prices could see a significant decline should the Covid-19 crisis continue to deepen. Bloomberg’s Chris Anstey reports on “Bloomberg Markets: China Open.”
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