If you’re looking for ways to boost your income in retirement, then you might want to look at the shares listed below.

These high quality ASX shares could be great options for retirees. Here’s what you need to know about them:

Suncorp Group Ltd (ASX: SUN)

The first ASX share to consider for a retirement portfolio is Suncorp. It is one of Australia’s leading insurance and banking companies. As well as the eponymous Suncorp brand, it also owns the AAMI, Apia, Bingle, GIO, Shannons, and Vero brands.

After a tough year during the pandemic, Suncorp has returned to form in FY 2021. During the first half, the company reported a 39.5% increase in cash earnings to $509 million.

Pleasingly, Goldman Sachs believes this solid form can continue. As a result, it recently retained its buy rating and lifted its price target to $12.08.

Goldman is positive on the company’s outlook and is forecasting a 60 cents per share fully franked dividend this year. Based on the current Suncorp share price of $11.24, this will mean a 5.3% dividend yield.

Telstra Corporation Ltd (ASX: TLS)

Another ASX share to look at for a retirement portfolio is Telstra. After several years of struggles, the word “growth” is finally being talked about.

In February, Telstra’s CEO, Andy Penn commented: “After a decade of disruption following the creation of the nbn, and with its rollout now declared complete, we can clearly see the path to underlying growth ahead of us.”

“Our investment in innovation and technology, digitisation and networks, improving our customer experience and being disciplined in our capital management, mean that at the start of this decade, as Australia digitises its economy, Telstra is in a strong position to grow,” he added.

Analysts at Goldman Sachs appear confident that the telco giant will deliver on this. Its analysts currently have a buy rating and $4.00 price target on its shares.

The broker is also forecasting 16 cents per share fully franked dividends for the foreseeable future. Based on the latest Telstra share price of $3.56, this will mean 4.5% yields.

The post Why Telstra (ASX:TLS) and this ASX share could be top options for a retirement portfolio appeared first on The Motley Fool Australia.

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• How did the Telstra (ASX:TLS) share price fare in May?
• 4 ASX 200 blue chip shares analysts rate as buys

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia has recommended Sonic Healthcare Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Technology shares have taken a pummelling in recent months, but some have weathered the storm better than others.

Growth stocks that rely on low interest rates for high valuations have been punished by the market over the past 6 months. Investors have been shifting to value shares that are more likely to be resilient to rising inflation.

Wilson Asset Management portfolio manager Oscar Oberg said this year had been a time of reckoning for high-flying ASX tech shares.

“We’ve really been able to differentiate the winners and losers in the technology sector,” he told a Wilson video.

“For a number of years, if you were a company that had ‘pay’ at the end of your name, you seem to get a huge re-rating, and you trade at 20 times sales. It does feel like those days are coming to an end.” 

Some of those deflated tech stocks include Afterpay Ltd (ASX: APT), which has fallen almost 40% from its 53-week highs; and Appen Ltd (ASX: APX), which is down nearly 70% from highs.

But not every high-flying tech stock has been absolutely hammered.

Why has Xero been so resilient?

One business that surprised Oberg with its resilience during the tech sell-off is cloud accounting software provider Xero Limited (ASX: XRO).

Its shares closed Tuesday at $132.01, not ridiculously far from $148.46 at the start of the year. The current price is also only 16% below the 53-week high of $157.99.

Oberg credited multiple factors in the New Zealand business for its success in retaining its valuation.

“It’s got such a high level of recurring revenues, it’s a SaaS [software-as-a-service]-based business, and it has very low levels of churn.”

Looking ahead, Oberg viewed Xero’s future favourably.

“Really confident around their market share growth they can get in the United Kingdom, Australia and the US over time.”

Oberg isn’t the only one who likes Xero for those reasons. On Tuesday, brokers at Goldman Sachs had a buy rating with a price target of $153, with a forecast that the Kiwi monster has potential for decades of strong revenue growth.

“Xero is still only scratching at the surface of its overall market opportunity,” The Motley Fool’s James Mickleboro reported.

“In FY 2021, the company reported an 18% increase in revenue to NZ$848.8 million, which was driven by a 20% increase in subscribers to 2.74 million. This compares to the cloud accounting subscriber total addressable market of 45 million.”

Xero is one of the largest technology companies listed on the ASX. It started life on the NZX and was dual-listed until 2018.

The post This surprising ASX tech share refuses to dive: analyst appeared first on The Motley Fool Australia.

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Tony Yoo owns shares of AFTERPAY T FPO, Appen Ltd, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, Appen Ltd, and Xero. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO, Appen Ltd, and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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ASX data centre shares are seeing ever-growing demand from cloud computing, spurred on by COVID-19 work-from-home changes.

Which leads me to ask this question…

Do you remember the first time you heard the term ‘in the cloud’?

For me, it was back in 2007. The Netherlands-based company I was working for at the time had its own mainframe computers humming away in a back room.

While the wardrobe­-sized machines did the job, they were expensive to maintain. And that back room got hot! So the company’s president, eager to be at the cutting edge of technology, investigated shifting a huge trove of data into what he called ‘cloud computing’.

Now I knew he couldn’t be talking about sending data into the literal clouds – of which you tend to find plenty in the Netherlands. But it took a while to understand that, really, all the cloud represents is banks upon banks of computers located offsite in data centres.

We’ll get to those, and the fast-growing demand for cloud computing, shortly.

But first…

Who coined the term ‘cloud computing’?

The idea of storing your digital data offsite has been around for more than 50 years.

But it seems that Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG) – Google to you and me – gets the credit for coining the term cloud computing. Or more specifically, Google’s CEO Eric Schmidt, who first used the term at a conference in August 2006.

With remarkable prescience, Schmidt said at the time (quoted by MIT Technology Review):

What’s interesting [now] is that there is an emergent new model. I don’t think people have really understood how big this opportunity really is. It starts with the premise that the data services and architecture should be on servers. We call it cloud computing – they should be in a cloud somewhere.

Emergent new model indeed…

The growth and growth of cloud computing

For an idea of just how fast cloud computing is growing Down Under, we turn to the Australian Bureau of Statistics (ABS). According to the ABS Characteristics of Australian Business report, released last week, 55% of Australian businesses are leveraging paid cloud computing. That’s up from 42% in 2017-18 and up from 31% in 2015-16.

Commenting on the ABS data on cloud-computing growth, Karl Durrance, director of enterprise at Amazon Web Services (AWS) said: “The past year accelerated our shift to a digital world and highlighted an even more urgent recognition of the problems we need to address together to drive our economy and society forward.”

AWS pointed to a report it commissioned from consulting firm AlphaBeta, titled ‘Unlocking APAC’s Digital Potential: Changing Digital Skill Needs and Policy Approaches’. The report found “43% of Australia’s digital workers, who are not applying cloud-computing skills today, believe it will be a requirement to perform their jobs by 2025”.

Then there’s the IDC Australia Future of Work Survey 2020 that AWS also pointed to. According to the survey, “69% of local organisations indicated that working from home, or a hybrid mix of working from home and in the workplace, will become the norm”.

As most of us don’t have our own servers stuffed in our back rooms, arguably the demand for cloud computing and the ASX data centre shares that secure the data could be set to keep growing.

Which brings us back around to…

2 ASX shares focused on data centres

NextDC Ltd (ASX: NXT) is one of Australia’s leading independent operators of data centres. The company has a network of nine data centres spread across the biggest capital cities.

NextDC shares began trading on the ASX in 2010. Today, the ASX data centre share has a market capitalisation of around $5.1 billion and is part of the S&P/ASX 200 Index (ASX: XJO).

The NextDC share price was up by 4.23% to $11.33 by yesterday’s close. That puts the company’s shares up by around 23% over the past 12 months. Year to date, NextDC shares have gone the other way, down around 7% so far this year.

A second ASX data centre share is better known as one of Australia’s largest housing developers, which also has a large commercial property footprint.

I’m talking about Stockland Corporation Ltd (ASX: SGP), which isn’t technically a data centre share just yet. In fact, the company doesn’t actually own any data centres – but that’s about to change.

As the Australian Financial Review reported yesterday, Stockland is getting ready to build its first data centre at its M Park development in Sydney:

The NSW Government rushed through approval for the data centre, which it said has an end value of $264 million, as a State Significant Development (SSD).

‘Fast-tracking data centre assessments are a key part of the NSW government’s planning reforms,’ said Planning Minister Rob Stokes.

It’s understood the five-storey data centre will be a hyper-scale facility leased to a major cloud computing provider, believed to be Amazon Web Services.

Stockland has a market cap of around $11.4 billion and pays a dividend yield of 4.6%, unfranked.

The Stockland share price, which edged 1.27% higher in Tuesday’s session, is up by around 21% in the past 12 months. Year to date, the company’s shares have gained around 15%.

The post How ASX data centre shares are racing for the cloud appeared first on The Motley Fool Australia.

More reading

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Alphabet (A shares), Alphabet (C shares), and Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), and Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The post LIVE COVERAGE: ASX expected to rise; Mercury downgrades guidance appeared first on The Motley Fool Australia.

More reading

• 3 small cap ASX shares for your watchlist
• 2 quality ASX dividend shares rated as buys
• 3 reasons why Soul Patts (ASX:SOL) can be a good ASX dividend share
• 5 things to watch on the ASX 200 on Wednesday
• Here are 3 ASX shares with high debt levels

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Kate O’Brien owns shares of Apple and Rio Tinto Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Apple. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), and Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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As I’m a fan of small cap shares, I feel quite fortunate to have a large number to choose from on the Australian share market.

Three small cap ASX shares that could have bright futures are listed below. Here’s why they could be worth watching:

Damstra Holdings Ltd (ASX: DTC)

The first small cap to watch is Damstra. It is an integrated workplace management solutions provider. Its cloud-based workplace management platform is used by businesses to track and keep their employees safe.

Damstra has been a positive performer over the last couple of years and has built on this in FY 2021. For example, during the first half of FY 2021, the company posted a 29.6% increase in revenue to $13.3 million. The good news is that this is still only a fraction of its total addressable market, which is expected to be worth US$20 billion by 2022.

SILK Laser Australia Limited (ASX: SLA)

Another small cap ASX share to watch closely is SILK Laser. It is a laser, skin care, and cosmetic injections company which has been growing strongly in FY 2021. For example, during the first half, SILK reported a 62% increase in network sales to $44.9 million and a 305% increase in net profit to $4.7 million.

Thanks to growing demand and store network expansion, SILK appears well-positioned to continue its growth over the next decade. In respect to the latter, at present SILK has a total of 60 clinics in operation. However, management intends to grow its network by 6 to 10 new clinics per annum up to a target of approximately 150 clinics.

Universal Store Holdings Limited (ASX: UNI)

A final small cap to watch is Universal Store. It is a fashion retailer aiming to deliver a frequently changing and carefully curated selection of on-trend products to the fashion focused customer. This focus is clearly paying off, with Universal Store a particularly positive performer this year. It delivered a 23.3% increase in first half sales to $118 million and a 63.6% increase in underlying net profit after tax to $21.1 million.

Looking ahead, the company has opportunities to expand its footprint materially over the next decade to drive further growth. Management has identified up to 60 new store sites, this is almost double the 65 stores it was operating from during the first half.

The post 3 small cap ASX shares for your watchlist appeared first on The Motley Fool Australia.

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James Mickleboro does not own any shares mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Damstra Holdings Ltd. The Motley Fool Australia owns shares of and has recommended Damstra Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Are you looking for some excellent ASX dividend shares to add to your income portfolio?

Then you might want to take a look at the ones listed below. Here’s what you need to know about these dividend shares:

Aventus Group (ASX: AVN)

The first ASX dividend share to look at is Aventus. It is a fully integrated owner, manager, and developer of large format retail centres in Australia.

At the last count, Aventus had a portfolio of 20 centres valued at $2.2 billion and spanning 536,000m2 in gross leasable area. It has a diverse tenant base of 593 quality tenancies, with national retailers representing 87% of the total portfolio.

Demand for tenancies has remained strong during the pandemic, underpinning strong rental collections. This led to a 6.5% increase in funds from operations (FFO) to $55.9 million during the first half. Positively, more of the same is expected in the second half.

Morgans currently has an add rating and $3.12 price target on its shares. The broker is also forecasting a 17.4 cents per share distribution in FY 2021 and then a 17.7 cents per share distribution in FY 2022. Based on the latest Aventus share price, this represents 5.7% and 5.8% dividend yields, respectively.

National Australia Bank Ltd (ASX: NAB)

Another ASX dividend share to consider is this banking giant. It could be a good option due to its positive outlook thanks to Australia’s strong economic recovery and the booming housing market.

In addition, although its shares have been strong performers in 2021, they have been tipped to climb even higher. According to a note out of Goldman Sachs this week, its analysts have retained their conviction buy rating and $29.97 price target on the bank’s shares.

Goldman is also forecasting fully franked dividends of 124 cents per share in FY 2021 and 133 cents per share in FY 2022. Based on the current NAB share price of $26.77, this will mean yields of 4.6% and 5%.

NAB remains Goldman’s preferred sector exposure. This is due to the bank’s cost management initiatives, its position as the largest business bank, and its strong capital position.

The post 2 quality ASX dividend shares rated as buys appeared first on The Motley Fool Australia.

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• ASX 200 drops, Altium soars, Skycity drops, NAB falls

James Mickleboro does not own any shares mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended AVENTUS RE UNIT. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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There are a few reasons why Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), also called Soul Patts, might be a solid choice as an ASX dividend share.

What is Soul Patts?

It’s a company that is a diversified investment conglomerate.

However, it started out as a pharmacy business on the stock exchange over a century ago in 1903.

Multiple generations of families have been involved in the running of the business. More than 40 employees have worked for the company for over 50 years. Five generations of the Pattinson family have served the company, as have three generations of the Dixson, Spence, Rowe and Letters families.

But there’s more to its potential as an ASX dividend share than just its longevity:

Diversified portfolio

Soul Patts has a number of different investments across a range of sectors.

Some of its biggest investments are the ones that it has held for the longest. The biggest two positions in the portfolio are telco TPG Telecom Ltd (ASX: TPG) and the diversified industrial property and building products business Brickworks Limited (ASX: BKW).

It’s also invested in a number of other ASX-listed businesses like New Hope Corporation Limited (ASX: NHC), Australian Pharmaceutical Industries Ltd (ASX: API), Pengana Capital Group Ltd (ASX: PCG), Pengana International Equities Ltd (ASX: PIA), Milton Corporation Limited (ASX: MLT), Bki Investment Co Ltd (ASX: BKI), 360 Capital REIT (ASX: TOT), Clover Corporation Limited (ASX: CLV), Tuas Ltd (ASX: TUA) and Commonwealth Bank of Australia (ASX: CBA).

The ASX dividend share is invested in a number of private businesses too. Some are sector plays like financial services, agriculture, retirement living and resources. Others are more specific private businesses like swimming schools and an electrical business called Ampcontrol.

A focus on dividends for shareholders

Soul Patts has the record of the longest run of annual dividend increases in a row on the ASX.

It has grown its dividend every year since 2000, meaning the record stretches back two decades.

Soul Patts also has another dividend record. It has paid its dividend every year since it listed in 1903. That record stretches back through the world wars, global recessions and two pandemics (Spanish Flu and COVID-19).

The ASX dividend share generates investment income from its portfolio of assets that pay dividends and distributions. After paying for its expenses, Soul Patts has been paying a slightly higher dividend and then retains the rest of the profit to re-invest for further opportunities.

The dividend yield

Soul Patts recently increased its interim dividend by 4% to 26 cents per share in the FY21 half-year result. That brought the rolling 12 months of dividends to $0.61 per share.

At the current Soul Patts share price, that means the trailing grossed-up dividend yield is 2.9%.

The post 3 reasons why Soul Patts (ASX:SOL) can be a good ASX dividend share appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Clover Corporation Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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On Tuesday the S&P/ASX 200 Index (ASX: XJO) was back on form and pushing higher. The benchmark index rose 0.15% to 7,292.6 points.

Will the market be able to build on this on Wednesday? Here are five things to watch:

ASX 200 expected to rise

It looks set to be a positive day of trade for the Australian share market on Wednesday. According to the latest SPI futures, the ASX 200 is expected to open the day 19 points or 0.25% higher this morning. This follows a reasonably positive night of trade on Wall Street, which saw the Dow Jones and S&P 500 trade flat and the Nasdaq rise 0.3%.

Oil prices charge higher

Energy producers such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could have a solid day on Wednesday after oil prices charged higher. According to Bloomberg, the WTI crude oil price is up 1.4% to US$70.19 a barrel and the Brent crude oil price is up 1.2% to US$72.34 a barrel. News that the US won’t be lifting all its sanctions on Iran gave oil prices a boost.

ResMed give neutral rating

The ResMed Inc (ASX: RMD) share price is about fair value according to Goldman Sachs. In response to its appearance at a Goldman Sachs conference, the broker has retained its neutral rating and $28.40 price target on its shares. It notes that ResMed reported that a sequential improvement in new diagnoses continues to develop. It also believes a new product launch could drive uptick in device growth.

Gold price softens

Gold miners Evolution Mining Ltd (ASX: EVN) and Newcrest Mining Limited (ASX: NCM) will be on watch after the gold price softened overnight. According to CNBC, the spot gold price is down 0.2% to US$1,895.30 an ounce. The precious metal eased ahead of the release of US inflation data on Thursday.

Iron ore price rebounds

BHP Group Ltd (ASX: BHP), Fortescue Metals Group Limited (ASX: FMG), and Rio Tinto Limited (ASX: RIO) shares could be on the rise today. This follows a solid night of trade for the price of the steel making ingredient. According to Metal Bulletin, the spot iron ore price is up 3.5% to US$209.50 a tonne.

The post 5 things to watch on the ASX 200 on Wednesday appeared first on The Motley Fool Australia.

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James Mickleboro does not own any shares mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia has recommended ResMed Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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With so many growth shares to choose from on the Australian share market, it can be hard to decide which ones to buy over others.

To help narrow things down, I have picked out three ASX growth shares that could be top options for investors today. Here’s what you need to know about them:

IDP Education Ltd (ASX: IEL)

The first growth share to look at is IDP Education. It is a provider of international student placement services and English language testing services. While trading conditions are difficult right now, they have been improving. Furthermore, the longer the pandemic drags out, the stronger its market position will be at the end of it. This is due to many of its smaller competitors failing to survive the crisis. Morgans is expecting IDP Education to grow its market share meaningfully once the pandemic passes. As a result, it remains very positive on the company. The broker recently put an add rating and $28.48 price target on its shares.

Megaport Ltd (ASX: MP1)

Another growth share to look closely at is Megaport. It is an elasticity connectivity and network services company. Megaport’s service utilises software defined networking (SDN) to allow customers to rapidly connect their network to other services across the Megaport Network. This means that services can be directly controlled by customers via mobile devices, their computer, or its open API. This has proven very popular with businesses, leading to Megaport growing its recurring revenues at a rapid rate over the last few years. Pleasingly, this has continued in FY 2021. It recently released its third quarter update and revealed an 8% quarter on quarter increase in monthly recurring revenue (MRR) to $6.8 million. UBS is positive on the company. The broker currently has a buy rating and $17.10 price target on its shares.

Temple & Webster Group Ltd (ASX: TPW)

Another ASX growth share to look at is Temple & Webster. It is an online furniture and homewares retailer. With online furniture shopping still in its infancy in comparison to other areas of the retail market, Temple & Webster appears well placed for growth over the long term. Particularly given its leadership position. Management recently revealed that it plans to invest heavily to take advantage of the shift and cement its position as the market leader. Morgan Stanley was happy with this plan. It currently has an overweight rating and $15.00 price target on its shares.

The post 3 stellar ASX growth shares rated as buys appeared first on The Motley Fool Australia.

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Idp Education Pty Ltd, MEGAPORT FPO, and Temple & Webster Group Ltd. The Motley Fool Australia has recommended MEGAPORT FPO and Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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There are many competing variables at play when considering investing in an ASX share. Whether it has good growth potential, if it has a moat from the competition, or if it’s at a good price.

These are all important factors but another immensely critical factor that even the great Warren Buffett bangs on about is… the balance sheet.

A company with a good balance sheet can weather economic storms. Often, such companies can offer dividends to shareholders. And when challenging times do hit, they have excess cash to even take advantage of the conditions. Sometimes that means acquiring competitors at a discount.

On the flip side, companies with high levels of debt are often caught out when tides turn. So, let’s peruse a handful of ASX shares with high debt levels.

ASX shares that might be dancing with the debtor

Openpay Group Ltd (ASX: OPY)

The first cab off the rank is buy now, pay later player Openpay. This ASX share has the smallest market capitalisation out of the bunch at $169.5 million. Openpay’s marketed differentiator is its flexibility of payment plan. These payment plans range from 2 to 24 months for up to $20,000.

At the end of December, the company held $46.2 million of debt on its balance sheet. However, thanks to a handful of capital raisings, it also held $39.3 million in cash. Based on reported figures, Openpay’s debt-to-equity ratio stood at 91.8% at the end of December.

Typically, a company would aim to maintain a debt-to-equity ratio of less than 40% to ensure it doesn’t get caught with its pants down.

Usually, having a chunk of cash to offset that debt would defuse concerns. However, Openpay remains a loss-making company, burning through its cash reserves.

Flight Centre Travel Group Ltd (ASX: FLT)

Many would know how disappointing ruined travel plans have been — though ASX tourism companies probably know that pain to a different extent. Flight Centre was walloped by COVID-19, with revenue and earnings falling off a cliff.

Unsurprisingly, the damage has extended to the balance sheet. While the company has managed to bolster its cash reserves, debts have skyrocketed. At the end of December 2020, Flight Centre had $914 million in debt, equating to a debt-to-equity ratio of 78.4%.

Unless earnings bounce back, this ASX share could quickly churn through its cash balance, which could potentially result in further capital raisings.

Event Hospitality and Entertainment Ltd (ASX: EVT)

Last on the list – another company hit by the pandemic with a balance sheet that’s worse for wear. Event Hospitality and Entertainment owns various hotels, resorts, and cinemas. All of these have been impacted to some extent.

Consequently, debt levels have crept higher in the past 18 months to $532.5 million. That gives Event a debt-to-equity ratio of 61.8%. Much like Flight Centre, this company has switched from profitable to loss-making.

Event has managed to get by without raising additional capital yet. However, it could potentially find itself in a similar position as Flight Centre if profitability doesn’t resume in the short to medium term.

The post Here are 3 ASX shares with high debt levels appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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