High-performing fund manager Wilson Asset Management (WAM) has revealed two ASX shares that it rates as buys within the WAM Research Limited (ASX: WAX) portfolio.

WAM operates several listed investment companies (LICs). Two of those LICs are WAM Capital Limited (ASX: WAM) and WAM Leaders Ltd (ASX: WLE).

One of the LICs is called WAM Research, which looks at smaller businesses on the ASX.

WAM describes WAM Research as a LIC that invests in the most compelling undervalued growth opportunities in the Australian market.

The WAM Research portfolio has delivered gross returns (that’s before fees, expenses and taxes) of 16.1% per annum since the strategy changed in July 2010, which is superior to the S&P/ASX All Ordinaries Accumulation Index return of 8.9% per annum.

These are the two ASX shares that WAM outlined in its most recent monthly update:

BWX Ltd (ASX: BWX)

BWX is described by WAM as a leading wellness company that sells natural beauty products throughout Australia, the US, Canada and the UK.

It owns and sells a number of different brands including Sukin, Andalou Naturals, Mineral Fusion and Nourished Life.

Last month, BWX announced that it had signed a 5-year, equity-linked strategic partnership with Chemist Warehouse, with the entire product range available online and an increased store presence in Australia, New Zealand and Ireland.

This new partnership will see BWX as a platinum supplier to Chemist Warehouse in exchange for issuing 881,613 shares, which equates to 0.6% of BWX’s share capital base, with potential future share issues based on performance targets.

WAM said that the partnership is expected to result in positive earnings per share (EPS) accretion for the ASX share within 12 months and is indicative of BWX’s opportunities for growth.

The fund manager is positive on BWX management’s ‘go global, go mainstream’ strategy, as the company now has 1.4 million total distribution points for all core brands globally and has forecast this to grow to over 2 million in FY22.  

Codan Limited (ASX: CDA)

Codan is based out of South Australia. It’s a business that’s involved in making equipment relating to communications, metal detection and mining technology for various groups like defence groups, governments and mining businesses for use in harsh environments.

The ASX share recently announced an acquisition called Domo Tactical Communications for $114 million. It’s a US business and it’s a wireless communications technology provider that has over 20 US government agencies as clients, as well as the UK, Canada, Australia and New Zealand.

The company expects that this acquisition will add to earnings. In the first 12 months of owning the business, Codan expects that Domo Tactical will generate $90 million of sales, $14 million of earnings before interest, tax, depreciation and amortisation (EBITDA) and $9 million of profit before tax.

WAM Research benefited from the Codan share price run up during February 2021 after its result release where sales grew 14% to $194 million and it made the biggest ever profit in its half-year result. Codan’s board grew the interim dividend by 40%.

More reading

• 5 things to watch on the ASX 200 on Monday
• Wilson Asset Management (WAM) thinks these 2 ASX shares are a buy
• Top brokers name 3 ASX shares to buy today
• Why the BWX (ASX:BWX) share price jumped 11% in February
• Leading brokers name 3 ASX shares 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 BWX 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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Are you looking for some ASX dividend shares to add to your income portfolio? 

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

Wesfarmers Ltd (ASX: WES)

The first blue chip ASX dividend share to look at is Wesfarmers. It is the conglomerate behind a number of popular retail brands including Bunnings, Kmart, and Officeworks. It also owns a number of industrial businesses such as CSBP and Covalent Lithium.

Furthermore, it has a very strong balance sheet and the potential to add further value accretive acquisitions to its portfolio in the near future.

It was a strong performer during the first half of FY 2021. For the six months ended 31 December, Wesfarmers reported a 16.6% increase in revenue to $17,774 million and a 25.5% increase in net profit after tax to $1,414 million.

A key driver of this growth was its important Bunnings business. It reported a 24.4% increase in revenue to $9,054 million. This means the hardware giant contributes over half of its overall revenue.

One broker that was pleased with the result was Goldman Sachs. It has a buy rating and $59.70 price target, and is forecasting a fully franked FY 2021 dividend of $1.88 per share. Based on the latest Wesfarmers share price, this equates to a 3.7% yield.

Westpac Banking Corp (ASX: WBC)

Another blue chip ASX dividend share to buy could be Westpac. Like Wesfarmers, Westpac has been on form in FY 2021

Last month the banking giant released its first quarter update and revealed an impressive $1.97 billion first quarter cash profit. This was more than double the quarterly FY 2020 second half average cash earnings.

But perhaps the best part of the result was the bank reversing ~$500 million of COVID-19 related impairments. It made the move due to improving economic conditions and appeared to hint that more could be coming if conditions continue to improve.

Analysts at Morgans were pleased with the result and have put an add rating and $27.50 price target on its shares. In addition, the broker is forecasting a fully franked $1.32 per share dividend in FY 2021. Which, based on the current Westpac share price, represents a generous 5.4% dividend yield.

More reading

• ASX share market on watch: Goldman Sachs shares thoughts on inflation and interest rates
• Leading brokers name 3 ASX dividend shares to buy
• Will the ASX share e-commerce boom last?
• ASX 200 climbs, Westpac in the clear, Nine reveals a WIN-ning deal
• Morgans just added this ASX 200 share to its model portfolio

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of Wesfarmers 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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A couple of key figures at Goldman Sachs have shared their thoughts about inflation and interest rates. What could this mean for the ASX share market?

Josh Schiffrin, the global co-head of US and global interest rate products, and Brian Friedman, the global head of market strategies, has tried to shed some light about what’s going on.

What caused the market volatility in recent times?

Mr Schiffrin said that the recent volatility is down to the market looking at what the world will look like with COVID-19 vaccinations being rolled out and COVID-19 cases dropping.

He said that it’s no longer just about a reflation trade, but it’s now about the fact that the economy is recovering sooner than expected and what that means for growth and other knock-on effects.

Mr Friedman said that a lot of investor attention is now on central banks and what they will do in response to what’s happening. That change in thinking, combined with the stronger economy, will affect what assets investors want to buy.

What does that mean?

Mr Friedman said:

The future period of stronger growth and allowing for higher inflation calls for the market to be long real assets—equities, commodities and real estate—all of which have unlimited upside to growth instead of nominal assets. And as the economy and asset prices start to reflate, we expect to see higher volatility given the procyclical nature of Fed policy, and higher economic volatility emanating from enormous pent-up demand due to the pandemic and historically large fiscal packages.

He went on to say that as long as the 5-year US Treasury point of the yield curve is under control as break-even rates move higher, then that’s a large indication that the US Federal Reserve is staying dovish while growth prospects improve.

In Mr Friedman’s opinion, it is difficult to be negative about ‘risk’ assets if the economy’s growth is getting better and the Fed is remaining dovish. He is currently watching for news of infrastructure spending in the US.

What are some things to watch over the next couple of years for the US (and ASX) share market?

Mr Schiffrin said that Goldman Sachs is expecting that slow its bond buying in 2022 and finish by the end of 2022 or early 2023. After that, Goldman Sachs thinks that the Fed may start increasing the interest rate by 0.25% per quarter, probably starting in early 2024.

Mr Friedman thinks that the Fed wants to get the unemployment rate down and it won’t increase interest rates unless inflation becomes too high.

Interest rate sensitive ASX shares

There are lots of interest rate sensitive ASX shares that investors may keep their eyes on such as Macquarie Group Ltd (ASX: MQG) and Computershare Ltd (ASX: CPU).

Other businesses, like big banks, could also react to changing interest rates like Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB).

More reading

• 2 blue chip ASX dividend shares in the buy zone
• Wilson Asset Management thinks these 2 ASX shares are a buy
• Leading brokers name 3 ASX dividend shares to buy
• Macquarie Group (ASX:MQG) is hungry for assets as its share price grows
• ASX 200 climbs, Westpac in the clear, Nine reveals a WIN-ning deal

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie 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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On Friday the S&P/ASX 200 Index (ASX: XJO) finished the week in a positive fashion. The benchmark index rose 0.8% to 6,766.8 points.

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

ASX 200 expected to edge lower

The Australian share market looks set to edge lower this morning following a mixed finish to the week on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the week 3 points lower this morning. On Wall Street on Friday night, the Dow Jones climbed 0.9%, the S&P 500 rose 0.1%, and the Nasdaq index dropped 0.6%.

Tech shares could fall

It could be a difficult day for ASX tech shares including Afterpay Ltd (ASX: APT) and Xero Limited (ASX: XRO) after a poor finish to the week on the tech-heavy Nasdaq index. This was driven by surging bond yields. The US 10-year treasury yield climbed to 1.625%, which is its highest level in over a year. As the local tech sector tends to follow the Nasdaq’s index’s lead, this doesn’t bode well for today’s trading session.

Oil prices drop

Energy producers such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could start the week in the red after oil prices dropped on Friday night. According to Bloomberg, the WTI crude oil price fell 0.6% to US$65.61 a barrel and the Brent crude oil price dropped 0.6% to US$69.22 a barrel.

Gold price softens

Gold miners Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) will be on watch on Monday after the gold price softened on Friday. According to CNBC, the spot gold price dropped 0.15% to US$1,719.80 an ounce. Despite this decline, the gold price still had its best week in seven weeks.

Quarterly rebalance

S&P Dow Jones Indices has announced its March 2021 Quarterly Rebalance. Six new companies will be added to the illustrious index on 22 March. Two companies joining the index are electronics products company Codan Limited (ASX: CDA) and investment platform provider Hub24 Ltd (ASX: HUB). The companies leaving the index include the underperforming Bravura Solutions Ltd (ASX: BVS) and Service Stream Limited (ASX: SSM).

More reading

• The JobKeeper payment is ending. So what will happen next?
• Top brokers name 3 ASX shares to sell next week
• 10 of the best ASX shares to buy in March
• 2 fantastic ASX shares with long runways for growth
• These were the best performing ASX 200 shares last week

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 Bravura Solutions Ltd and Hub24 Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO and Xero. The Motley Fool Australia has recommended Bravura Solutions Ltd, Hub24 Ltd, and Service Stream 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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If you like to invest in growth shares, then you’re in luck. The Australian share market is home to a number of companies growing their earnings at a solid rate.

Two ASX growth shares that could be worth a closer look are listed below. Here’s what you need to know about them:

Domino’s Pizza Enterprises Ltd (ASX: DMP)

The first ASX growth share to look at is this pizza chain operator.

Domino’s recently released its half year results and smashed the market’s expectations.

For the six months ended 31 December, the company reported a 16.5% increase in total global food sales to $1.84 billion. This was driven by a combination of strong same store sales growth and the opening of 131 new stores. The latter was quite an achievement during the pandemic.

But perhaps best of all was the operating leverage it achieved. This led to Domino’s reporting a sizeable 32.8% increase in underlying net profit after tax to $96.2 million.

Looking ahead, the company is confident its strong form will continue in the second half. In fact, management expects an even stronger performance during the half.

Macquarie is positive on the company. It recently reaffirmed its outperform rating and lifted its price target to $120.20.

Nuix Limited (ASX: NXL)

Another ASX growth share to look at is Nuix. It is a leading provider of investigative analytics and intelligence software.

Its Discover, Workstation, and Investigate platforms have been used in a number of important investigations. This includes the Panama Papers and the Banking Royal Commission. Current users include AIG, Airbus, Amazon, BDO, HSBC, Samsung, and Unilever.

The Nuix share price has fallen very heavily in recent weeks due to the tech sell off and a surprise underperformance during the first half. While the underperformance was disappointing, management has reiterated its full year guidance and appears confident it will achieve it. This could make the recent selloff a buying opportunity for patient investors.

One broker that thinks this is the case is Morgan Stanley. It currently has an overweight rating and $10.75 price target on the company’s shares.

More reading

• The JobKeeper payment is ending. So what will happen next?
• 2 excellent ASX shares to buy and hold today
• ASX tech correction? 10 of the worst-hit shares
• Why AVZ, Legend Mining, Nuix, & Vocus shares are surging higher
• 2 ASX shares at 52-week lows: Are they bargain buys?

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Nuix Pty Ltd. The Motley Fool Australia has recommended Dominos Pizza Enterprises Limited and Nuix Pty 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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Respected fund manager Wilson Asset Management (WAM) has recently identified two ASX shares that it owns in its portfolio.

WAM operates several listed investment companies (LICs). Two of those LICs are WAM Capital Limited (ASX: WAM) and WAM Research Limited (ASX: WAX).

There’s also one called WAM Leaders Ltd (ASX: WLE) which looks at the larger businesses on the ASX.

WAM says WAM Leaders actively invests in the highest quality Australian companies.

The WAM Leaders portfolio has delivered gross returns (that’s before fees, expenses and taxes) of 14.1% per annum since inception in May 2016, which is superior to the S&P/ASX 200 Accumulation Index average return of 8.9%.

These are the two ASX shares that WAM outlined in its most recent monthly update, which were two of the largest contributors of performance for the month:

Bank of Queensland Limited (ASX: BOQ)

WAM Leaders said that it has been positive on Bank of Queensland due to the industry-wide tailwinds such as lower funding costs and the potential for a loan growth surprise, coupled with an undemanding valuation compared to the big four banks of Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB) and Australia and New Zealand Banking Group Ltd (ASX: ANZ).

During February, BOQ announced the acquisition of ME Bank for approximately $1.3 billion, which is being funded by the regional bank with a capital raising.

WAM said that this is a transformative acquisition for the ASX share and will increase the number of Bank of Queensland customers by around 50%. BOQ will become the sixth largest lender in Australia, being behind only the big four ASX banks and Macquarie Group Ltd (ASX: MQG).

The fund manager expects that Bank of Queensland will be able to achieve good scale benefits from lower wholesale funding costs as well as significant cost synergy benefits.

Oil Search Limited (ASX: OSH)

Oil Search is one of the largest oil businesses on the ASX.

The fund manager said that oil and demand imbalances intensified in February with ‘OPEC+’ maintaining discipline while demand continues to recover towards pre-COVID-19 levels. OPEC+ includes countries like Saudi Arabia, UAE, Iran, Iraq, Kuwait, Nigeria, Russia, Mexico, Kazakhstan and Bahrain.

WAM Leaders said that it expects the oil price rally will be supported by investors repositioning for a reflationary environment, with oil offering the characteristics of a real asset, benefiting from a stimulus-driven recovery and demonstrating a powerful hedge against inflation shocks.

The fund manager concluded about the ASX share:

As a pure play oil and liquid natural gas exploration company, Oil Search has the highest leverage to changes in the oil price across our investable universe. Other upcoming catalysts for Oil Search include progressing key growth projects in Alaska and Papua New Guinea towards a financial investment decision, and the sell down of equity in Alaska over 2021.

More reading

• Macquarie Group (ASX:MQG) is hungry for assets as its share price grows
• AMP (ASX:AMP) selling assets too cheaply warns Macquarie
• Bank of Queensland (ASX:BOQ) share price rises as it inks office deal with AMP (ASX:AMP)
• Why the Macquarie (ASX:MQG) share price just hit a record high
• Why the Rio Tinto (ASX:RIO) share price is among the worst performers 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 Macquarie 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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There are quite a few ASX dividend shares that brokers rate as buys at the moment.

Good dividend income is in high demand with how low interest rates are right now. Indeed, the official cash rate of the Reserve Bank of Australia (RBA) is almost at 0%.

ASX dividend shares could be the answer, but there are only a certain number that are worth buying according to those brokers.

Here are two of them:

Growthpoint Properties Australia Ltd (ASX: GOZ)

Broker Credit Suisse currently rates Growthpoint as a buy, with a share price target of $3.54 for the property business.

Growthpoint has a portfolio of 57 properties which is valued at more than $4 billion. Those buildings are either industrial or office properties. The overall portfolio has a weighted average capitalisation rate of 5.5%, with a weighted average lease expiry (WALE) of 6.2 years.

The ASX dividend share’s portfolio has an occupancy rate of 95%, up from 93% to 30 June 2020. Around 97% of the portfolio is leased to government, listed or large organisations. Some of those tenants include Woolworths Group Ltd (ASX: WOW), Linfox, the Australian government, Bank of Queensland Limited (ASX: BOQ), Samsung, Australian and New Zealand Banking Group Ltd (ASX: ANZ), Country Road Group and Wesfarmers Ltd’s (ASX: WES) Bunnings.

Its net tangible assets (NTA) is $3.82, which means the last closing Growthpoint share price was at a 15% discount. It announced a buyback to buy up to 2.5% of its issued capital to benefit the funds from operations (FFO) and NTA per security.

In FY21 it’s expecting to generate FFO per security of 25.2 cents to 25.5 cents. Its FY21 distribution guidance is 20 cents, which is a FY21 yield of 6.1%.

Adairs Ltd (ASX: ADH)

Adairs is a home furnishings ASX dividend share. It’s currently rated as a buy by Ord Minnett with a price target of $4.50.

The broker is attracted to Adairs by its e-commerce growth, improvements to its stores and the growing presence of Mocka.

Adairs reported strong double digit growth in the first half of FY21 with sales growth of 34.8% and like for like sales growth of 32.4%. Online sales jumped 163.2% to $90.2 million with COVID-19 impacts, representing 37% of group sales. The last twelve months of online sales amounted to $180.2 million, being 37% of total sales. It also has over 900,000 people in its membership programme.

The gross profit margin increased by 545 basis points to 66.1%, which helped underlying earnings before interest and tax (EBIT) grow by 166% to $60.2 million. The EBIT margin almost doubled year on year to 24.8%.

Adairs has a number of initiatives to drive the business further. It’s investing in its digital channel. The ASX dividend share thinks that there’s a good opportunity for Mocka in Australia as brand awareness grows – it only has a small market share, for now.

Looking at its stores, it wants to make its stores bigger, which could increase the profit contribution from its stores by more than half.

It’s also building a new DHL-operated national distribution centre in Melbourne, which is expected to be operational in the first quarter of FY22. This will generate savings of $3.5 million per annum once fully operational.

In the first seven weeks of the second half FY21, it had grown total sales by 25%, with Adairs online sales growing by 65.9%. It expects to open one or two net new stores and upsize three or four stores across ANZ in the second half of FY21.

Ord Minnett thinks that Adairs will pay a dividend of $0.28 per share in FY21, translating to a grossed-up dividend yield of 10.9%.

More reading

• Will the ASX share e-commerce boom last?
• Why Adairs, Afterpay, IAG, & Livetiles shares are sinking
• 4 ASX retail shares that Morgans thinks are a ‘Buy’
• How Aldi plans to disrupt many ASX retail shares
• 3 ASX shares that doubled their profit in reporting season

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends ADAIRS FPO. The Motley Fool Australia owns shares of Wesfarmers Limited and Woolworths Limited. The Motley Fool Australia has recommended ADAIRS FPO. 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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Last week saw a number of broker notes hitting the wires once again. Three buy ratings that caught my eye are summarised below.

Here’s why brokers think investors ought to buy them next week:

CSL Limited (ASX: CSL)

According to a note out of Citi, its analysts have upgraded this biotech giant’s shares to a buy rating with a $310.00 price target. The broker made the move largely on valuation grounds after recent weakness in the CSL share price. Citi expects the COVID-19 vaccine rollout to support plasma collections in the coming months. In addition to this, it remains confident that demand for its core plasma-based products will be robust in the medium term. The CSL share price ended the week at $253.26.

Iress Ltd (ASX: IRE)

A note out of Credit Suisse reveals that its analysts have upgraded this financial technology company’s shares to an outperform rating with an $11.00 price target. According to the note, the broker believes that the Iress share price has dropped to a very attractive level. Especially given its defensive qualities and growth opportunities. In addition to this, it notes that its shares offer a generous dividend yield in this low interest rate environment. The Iress share price was fetching $9.53 at Friday’s close.

Qantas Airways Limited (ASX: QAN)

Analysts at Ord Minnett have upgraded this airline operator’s shares to a buy rating with a $6.00 price target. According to the note, the broker believes Qantas is well-placed to come out of the pandemic in a stronger position than when it entered it. And while dividends may be a couple of years away, it feels it is well worth sticking with the company. This is thanks to its balance sheet, cost cutting, and stronger market position. The Qantas share price was trading at $5.30 at the end of the week.

More reading

• The JobKeeper payment is ending. So what will happen next?
• 10 of the best ASX shares to buy in March
• Qantas (ASX:QAN) successfully trials COVID vaccine app in preparation of return to international travel
• Brokers name 3 ASX shares to buy right now
• What this broker thinks about ASX travel shares after government’s stimulus package

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 CSL Ltd. The Motley Fool Australia has recommended IRESS 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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With low interest rates likely to be here to stay for some time to come, it certainly is a hard time for income investors.

But don’t worry, because there are plenty of ASX dividend shares that can help you overcome low rates. Two that are highly rated are listed below:

Aventus Group (ASX: AVN)

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

Aventus owns a portfolio of 20 centres with a diverse tenant base of 593 quality tenancies. From these tenancies, national retailers such as ALDI, Bunnings, and Officeworks represent ~87% of its total portfolio.

This, and their exposure to every day needs, has allowed Aventus to perform strongly during the pandemic. For example, during the first half of FY 2021 it reported a modest increase in revenue and a 43% lift in net profit to $103.4 million. The latter includes a $25.7 million increase in the net fair value of its property.

Goldman Sachs is a fan of the company. It currently has a buy rating and $3.04 price target on its shares. As well as liking the company due to its exposure to the household goods sector, it notes that its bulky goods homewares tenant base is a natural resistance to online sales penetration.

The broker estimates that it will pay a ~16.6 cents per share distribution this year. Based on the current Aventus share price, this represents a 5.9% yield.

Telstra Corporation Ltd (ASX: TLS)

Another ASX dividend share to consider buying is Telstra. This telco giant’s outlook is improving greatly thanks to its T22 strategy, the arrival of 5G internet, and its plan to split into three separate businesses. The latter is expected to allow Telstra to take advantage of potential monetisation opportunities, unlocking value for shareholders.

Goldman Sachs is a fan of Telstra as well. It recently reiterated its buy rating and $4.00 price target on the company’s.

It also continues to forecast a 16 cents per share fully franked dividend for the foreseeable future. Based on the current Telstra share price, this will mean a generous 5.2% dividend yield.

More reading

• 2 ASX dividend shares with 5% fully franked yields
• 3 blue chip ASX shares with dividend yields over 5% today
• This ASX dividend share has a very generous 5.9% yield
• Telstra (ASX:TLS) share price and others caught in Greensill insolvency
• Is the Telstra (ASX:TLS) share price a top buy right now?

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 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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The JobKeeper payment is coming to a close. Everyone (including the ATO) is talking about what it will mean when the scheme officially stops.

After the federal government tried selling its half-price flight program to the Australian public yesterday, reality seems to have sunk in that the scheme is officially coming to an end. JobKeeper payments will conclude on 28 March 2021.

What does the ATO say about JobKeeper payments ending?

According to ABC News, the Australian Tax Office (ATO) believes it is owed hundreds of millions of dollars from companies who hustled the JobKeeper subsidy.

While some companies such as Domino’s Pizza Enterprises Ltd (ASX: DMP), Nick Scali Limited (ASX: NCK) and Santos Ltd (ASX: STO) have paid back JobKeeper funds that were not required, many others have not.

20 Australian companies promised to repay approximately $144 million to the ATO, however, only $20 million has been paid back so far.

According to ATO second commissioner Jeremy Hirschhorn, the misused JobKeeper payments were issued to companies based on revenue, opposed to whether the company is profitable or not.

Some recipients used JobKeeper payments to pay executive bonuses and raise dividends, with experts stating they believe this is the product of a poorly designed policy. While the ATO isn’t likely to admit an oversight, it’s clear that the program has run its course and it’s time for the next act.

Will the tourism and aviation support package save us?

While some businesses like Qantas Airways Limited (ASX: QAN) and Flight Centre Travel Group Ltd (ASX: FLT) will benefit from the federal government’s follow up to JobKeeper, the new scheme isn’t pleasing everyone.

The Australian Financial Review reports that duty free retailers are not happy about being left out of the new funding package. Considering the current crux on international travel, being denied a dime of the $1.2 billion support package doesn’t sit well with some people in the industry.

Richard Goodman, who is the Managing Director of Heinemann Australia, said that sales are down 98%. He continued that without ongoing government support, such as the JobKeeper payment, cost decisions that may result in job cuts will have to be made.

The CEO of The Australian Retailers Association, Paul Zahra, commented:

“It’s good to see focused support for the tourism and aviation industry locally and the flow-on effects that will have for some retailers, but this [package] overlooks support for businesses severely impacted by international border closures.”

Foolish Takeaway

As a replacement to previous JobKeeper payments, the government is turning to the ravaged tourism and travel industries for its next approach.

Rating agencies are also paying attention to how the country is addressing its financial commitments as the coronavirus continues to leave its mark.

The JobKeeper payment is going to end, the next support package will take effect. Depending on how that goes, we’ll see where we land next.

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Motley Fool contributor Gretchen Kennedy owns shares of Flight Centre Travel Group Limited and Qantas Airways Limited. The Motley Fool Australia has recommended Dominos Pizza Enterprises Limited and 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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