On Thursday the S&P/ASX 200 Index (ASX: XJO) followed the lead of U.S. markets and sank notably lower.

While the majority of ASX shares tumbled lower with the market, some fell more than most.

Three ASX 200 shares that hit multi-year lows are listed below. Here’s why they are down in the dumps:

Bank of Queensland Limited (ASX: BOQ)

The Bank of Queensland share price sank to a 20-year low of $4.51 on Thursday. Weakness in the banking sector, a dilutive capital raising, the deferral of its dividend, and a weak half year result have all weighed heavily on Bank of Queensland this year. In respect to its results, the regional bank posted half year cash earnings after tax of $151 million. This was down 10% on the prior corresponding period. Judging by its share price performance, investors appear to believe things will get worse before they get better because of the pandemic.

Orocobre Limited (ASX: ORE)

The Orocobre share price dropped to a multi-year low of $1.82 yesterday. This lithium miner has been sold off again this year due to weak prices of the battery making ingredient and the forced shutdown of its Argentinian operations during the pandemic. Unfortunately for Orocobre and its peers, many analysts believe that a recovery in the lithium price has been pushed back because of the crisis. This could mean another difficult 12 months for Orocobre.

Unibail-Rodamco-Westfield (ASX: URW)

The Unibail-Rodamco-Westfield share price tumbled to an all-time low of $3.65 on Thursday. This latest decline means the shopping centre operator’s shares have lost 68% of their value of the last 12 months. Unibail-Rodamco-Westfield’s shares have come under significant pressure during the pandemic because the majority of its shopping centres have been forced to close. In addition to this, it has warned that it is difficult to judge the impact on the contractual obligations of its retailers and to estimate the effect of any case-by-case support measures it may offer tenants.

More reading

• 5 things to watch on the ASX 200 on Friday
• Is this ASX 200 REIT a bargain right now?
• ASX 200 drops 1.7%, Xero reports a profit
• ASX fundie says ASX 200 was more volatile in March than during the GFC
• This ASX growth share has rocketed 150% higher since March. Is it too late to invest?

Motley Fool contributor James Mickleboro 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.

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While I think that Commonwealth Bank of Australia (ASX: CBA) would be a good option for income investors, not everyone is keen on the banks right now.

For those investors, I have picked out three non-bank dividend shares which I think would be good alternatives.

Here’s why I like them:

BWP Trust (ASX: BWP)

The first dividend share to consider buying is BWP. It is a real estate investment trust with a focus on warehouses. Most of its warehouses are leased to hardware giant Bunnings, which is owned by Wesfarmers Ltd (ASX: WES). I think Bunnings is arguably the highest quality retailer in the country and likely to stay in its warehouses for the long term. As a result, I believe BWP’s earnings are very defensive and it is well-placed to grow its distribution in the future. At present I estimate that it offers investors a 5.2% yield.

Coles Group Ltd (ASX: COL)

This supermarket giant could be a great alternative to the banks. Unlike the banks, it appears well-placed to continue its sales growth whatever economic conditions it is facing. In addition to this, with the company aiming to strip out costs materially and embrace new technologies, I expect its margins to improve over the next decade and support solid earnings and dividends growth. In FY 2021 I estimate that its shares will provide investors with a fully franked dividend yield of 4.2%.

Sydney Airport Holdings Pty Ltd (ASX: SYD)

A final option for income investors to consider is Sydney Airport. Although I suspect its dividends may be limited in 2020 due to the material decline in passenger numbers, I believe they will both bounce back in 2021 and 2022. This could make it worth being patient and buying shares with a long term view. A recent note out of Goldman Sachs reveals that it expects Sydney Airport to pay a 27 cents per share distribution in FY 2021 and then a more normal 37 cents per share distribution in FY 2022. This represents a 4.9% and 6.7% yield, respectively.

More reading

• 5 things to watch on the ASX 200 on Friday
• 4 top ASX 200 shares for blue chip investors
• Leading broker names CBA shares as a sell
• Top brokers name 3 ASX shares to sell right now
• ASX 200 down 0.9%: Xero posts strong growth & Australian economy loses 594,300 jobs

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET and 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.

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Is the Xero Limited (ASX: XRO) share price a buy? Investors didn’t think so yesterday as the Xero share price dropped 4.8% in reaction to the FY20 result.

Xero FY20 result

I thought the FY20 report was actually good from Xero, it’s just that investors were seemingly expecting even more from the result and outlook.

Xero reported that free cash flow increased by 320% to NZ$27.1 million. Net profit after tax (NPAT) came in at $3.3 million, an improvement from the NZ$27.1 million loss in FY19. As free cash flow grows it should mean investors are more willing to pay for a higher Xero share price over time.

Total subscribers rose by 26% to 2.285 million and average revenue per user increased by 2% to NZ$29.93. Operating revenue increased by 30% to NZ$718 million. Earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 88% to NZ$137.7 million.

One of the most attractive parts to me was that the gross margin increased from 83.6% to 85.2%.

Subscriber number growth was good across the world. North American subscribers grew 24% to 241,000, UK subscribers grew 32% to 613,000, Australian subscribers grew by 26% to 914,000, New Zealand subscribers rose 12% to 392,000 and the rest of the world subscribers rose by 51% to 125,000.

Is the Xero share price a buy?

Xero said that whilst FY20 was strong, trading in early FY21 has been impacted by the coronavirus. Uncertainty meant it would be speculative for the company to say anything else about FY21 expectations.

However, the company did say that it still aims to be a long-term orientated, high-growth business. That’s a good sign, but obviously not surprising. 

After a share price fall of 5% for Xero, I think it looks a bit better at under $80. The question will be how many businesses will permanently fold as a result of the coronavirus crisis. How many subscribers will Xero lose from its total?

Keep in mind that the interest rate in Australia and New Zealand is now incredibly low. This should mean that growth is even more valuable. I’d be happy to buy a small parcel of Xero shares at this price, but I’d be wary about buying too much because of the high expectations built in at this level.

More reading

• ASX 200 drops 1.7%, Xero reports a profit
• Got $5,000 to spend? Here are 5 ASX shares you can buy today
• 2 exciting ASX tech shares to buy right now
• ASX 200 down 0.9%: Xero posts strong growth & Australian economy loses 594,300 jobs
• Why Beach, CBA, Qantas, & Xero shares are dropping lower

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Xero. 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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