The TechnologyOne Ltd (ASX: TNE) share price has come under pressure today following the release of its half year update.

At the time of writing the enterprise software company’s shares are down 5% to $9.34.

This compares to a strong 2% gain by the S&P/ASX 200 Index (ASX: XJO) this morning.

How did TechnologyOne perform in the first half?

For the six months ended March 31, TechnologyOne reported a 6% increase in revenue to $138.4 million and a 6% lift in profit after tax to $19.1 million. This result was underpinned by continuing strong demand for its SaaS ERP Solution.

Speaking of which. At the end of March the company’s SaaS Annual Recurring Revenue (ARR) stood at $110.2 million, up 33% on the prior corresponding period.

This ARR growth was driven largely by an increase in the number of large-scale enterprise SaaS customers. They have increased 22% over the last 12 months to 475. Pleasingly, management advised that the SaaS business continues to grow during the current pandemic.

Growing at an even quicker rate was its cash flow generation. TechnologyOne more than doubled its cash flow to $9.9 million during the half. This led to its cash and cash equivalents lifting 23% to $84 million.

In light of this and its confidence in its near term outlook, the company’s board has declared an interim dividend of 3.47 cents per share. This represents a 10% increase on last year’s interim dividend.

Outlook.

Unlike countless other companies, TechnologyOne has been able to provide guidance for the full year.

TechnologyOne’s CEO, Edward Chung, revealed that it has a strong pipeline and a high proportion of locked in recurring revenues. As a result, he is confident the company is well positioned to deliver continuing strong growth over the full year.

He commented: “TechnologyOne is well positioned, as the markets we serve are generally resilient. Our global SaaS ERP solution is mission critical to the markets we serve, and also enables any device, any time access from anywhere around the world.”

In light of this, the chief executive expects the company’s FY 2020 net profit before tax to increase 8% to 12% year on year.

Foolish Takeaway.

While growth in the current environment is clearly a big positive, I suspect the market was looking for stronger guidance given the premium its shares trade at. Based on its last close price, its shares were trading at 52x trailing earnings this morning.

More reading

• 3 ASX 200 dividend shares I’d buy today
• How to invest $10,000 in ASX 200 shares today
• Should you invest $1,000 in Woodside Petroleum shares?
• 2 millionaire-maker ASX internet growth shares
• A vaccine (probably) won’t be a quick fix for the ASX 200

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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S&P/ASX 200 Index (ASX: XJO) dividend shares can be great sources of income. Share prices are a lot lower at the moment because of the coronavirus, which is boosting the potential dividend yields on offer.

If you’re after income there’s not much point having cash in the bank or bonds these days. It’s probably earning less than 1%.

But ASX 200 dividend shares could be the answer. They’re large enough to be able to get through a difficult period, but small enough to have plenty of growth potential.

ASX 200 dividend share 1: Brickworks Limited (ASX: BKW)

Brickworks has a grossed-up dividend yield of 6.3%. The diversified property business has maintained or grown its dividend every year for over 40 years. That’s a great ASX 200 dividend share record.

Australia has had a strong economy for a few decades, so obviously a construction company was going to do well during that period too. The current times are difficult for Brickworks’ building products divisions in Australia and the US, but construction will return to normal in the future.

In the meantime it’s Brickworks’ other assets that can continue to fund the dividend and hold up Brickworks’ valuation. Those assets are an ‘investments’ division and a 50% stake of an industrial property trust. Very defensive with reliable pretty cashflow. 

Share 2: Tassal Group Ltd (ASX: TGR)

Tassal has a trailing grossed-up dividend yield of 6.8%. The diversified fish business has both salmon farms and prawn farms under its belt now. The company is always trying to improve how it farms, improve its biomass and increase consumption of fish by the public.

Its operating earnings have been steadily growing in previous years which has supported a solid dividend.

Healthy food will continue to be important during this period, so I think Tassal is a solid alternative ASX 200 dividend share candidate to provide reliable income during this.

Share 3: Amcor Plc (ASX: AMC)

The global packaging business is one of the limited ASX 200 businesses to expect profit to increase during this coronavirus period.

Amcor has already been one of the best ASX 200 dividend shares over the best decade with regular dividend growth. It’s expected to increase its dividend again this year. It has an (analyst) projected 2021 dividend yield of just over 5%.

Foolish takeaway

All three of these ASX 200 dividend shares have promising long-term potential for growth and income. At the current prices I’d probably go for Brickworks. If you take the non-construction assets at book value, you get the construction side of the business for free essentially. That sounds good to me.

More reading

• This ASX 200 tech share is sinking 5% lower after its half year update
• How to invest $10,000 in ASX 200 shares today
• Should you invest $1,000 in Woodside Petroleum shares?
• 2 millionaire-maker ASX internet growth shares
• A vaccine (probably) won’t be a quick fix for the ASX 200

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Amcor Limited and 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 3 ASX 200 dividend shares I’d buy today appeared first on Motley Fool Australia.

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I believe that buying shares and holding onto them for the long term is one of the most efficient ways of building wealth.

This is because buy and hold investing allows investors to benefit from compound interest. This is essentially interest on top of interest or returns on top of returns when it comes to shares.

A $1,000 investment earning a 10% return will be worth $1,100 after one year, but almost $2,600 after 10 years.

And then if we look even further into the future, this single investment becomes almost $120,000 in 50 years if you continue to earn the same level of return.

With that in mind, here are a few top shares which I think would make great buy and hold investments. They are as follows:

Appen Ltd (ASX: APX)

The first share to consider buying and holding is Appen. It is a leading developer of high-quality, human annotated datasets for the machine learning and artificial intelligence markets. Due to the growing importance of machine learning and artificial intelligence, these markets are expected to continue growing materially in the future. I expect this to underpin strong earnings growth over the next 10 years.

Nanosonics Ltd (ASX: NAN)

This pandemic has shown us just how important infection control is. I believe this bodes well for Nanosonics’ industry-leading trophon EPR disinfection system for ultrasound probes. In addition to this, the company is planning to launch several new products in the near future which have similar addressable markets. All in all, I feel Nanosonics is well-positioned to be a market beater over the next decade and beyond.

SEEK Limited (ASX: SEK)

Another share to consider buying with a long term view is this job listings giant. The pandemic will certainly put a lot of pressure on job listings in the near term, but I expect listings to recover once the crisis passes. Looking ahead, SEEK is aiming to grow its revenues to $5 billion later this decade. This will be a big increase on the revenue of $1,537.3 million it recorded in FY 2019.

More reading

• The newspaper killers: 3 ASX 200 online classifieds shares dominating the market
• Why I would buy these exciting ASX growth shares right now
• Want to invest like Warren Buffett? Buy and hold these ASX 200 shares
• 4 top ASX shares to invest $4,000 into immediately
• 2 of the best ASX 200 healthcare shares to buy for the long term

James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nanosonics Limited. The Motley Fool Australia owns shares of Appen Ltd. The Motley Fool Australia has recommended Nanosonics Limited and SEEK 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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