More Australian businesses are struggling to pay their bills since JobKeeper ended, CreditorWatch has found.

The digital credit reporting agency’s latest Business Risk Review is the first it has conducted since the end of JobKeeper. It found that, while business activity looks to be generally healthy, businesses are taking longer to pay their bills.

It also found the number of defaults is back to pre-pandemic levels, though some industries are still struggling. But CreditorWatch believes a strong pipeline of credit enquiries points to an economic recovery.

Bills are multiplying after JobKeeper

One trend highlighted in CreditorWatch’s April Business Risk Review was the increase in time businesses took to pay their bills since JobKeeper ended.

CreditWatch said this held true across 17 of the 19 industries surveyed. The industries most affected were healthcare, construction, administration, and social assistance.

CreditorWatch CEO Patrick Coghlan commented on the increase in payment delays, saying:

Twice as many industries reported a deterioration in payment times versus last month. This is to be expected following the withdrawal of JobKeeper – the Federal Government’s main economic stimulus measure.

But we won’t really be able to get a true read on economic conditions until the June and September quarters, when businesses will have had time to stand on their own feet for a period without government support.

While defaults were found to be lower than the same time last year, they’ve increased since January 2021. Currently, the businesses most likely to default are those in industries such as accommodation, food services, postal, and public administration.

CreditorWatch’s chief economist Harley Dale said yesterday:

The sting is defaults rose by 18 per cent in the three months to April 2021 compared to the three months to January 2021. We are certainly seeing mixed results for defaults and will have a watchful eye on these figures for the June 2021 quarter. These results will be far more telling in terms of how businesses are really performing…

It’s expected the Federal Government will announce targeted stimulus measures in the federal budget to assist sectors that have been severely affected by pandemic. This will also flow through to future payments’ data.

Good news

While some of the data within the latest Business Risk Review looks bleak, it also houses plenty of positive news.

CreditorWatch said the rate of external administrations – which incorporates administration, receivership and liquidation ­– was falling. Over the three months prior to April 2021, the number of external administrations dropped 34% compared to the same period of 2020. CreditorWatch said that number had been falling for 14 consecutive months now.

The agency also reported a continuing pipeline of credit enquiries. It says this indicates a healthy level of business activities following the pandemic – another sign Australia’s economy is recovering from both the pandemic and the end of JobKeeper. CreditorWatch performed 39% more credit enquiries last month than it did in April 2020.

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Motley Fool contributor Brook Cooper has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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Could the National Australia Bank Ltd (ASX: NAB) share price really offer a 7% grossed-up dividend yield right now?

What has happened to NAB’s dividend?

It has been a volatile few years for the NAB dividend.

In 2018, NAB paid a dividend of $1.98 per share – can you believe it? During the heavily-affected 2020 year, NAB paid a dividend of $0.60 per share.

COVID-19 caused banks, including NAB, to take on significant provisions in their accounts to ensure they were prepared for the potential economic fallout of the pandemic.

APRA also told banks to hold onto more of their profit and capital than normal conditions.

But the FY21 half-year result included a much better dividend. The interim dividend was doubled to $0.60 per share. Considering APRA’s unquestionably strong benchmark for the common equity tier 1 (CET1) ratio is 10.5%, NAB was very strongly positioned with a ratio of 12.37%.

NAB expects to manage its CET1 ratio over time to a target range of 10.75% to 11.25%. The company is expecting to reset its capital and dividends for a more normal operating environment. The future dividends are expected to be guided by a dividend payout ratio range of between 65% to 75% of cash earnings.

As NAB noted, the rebound of the Australian and New Zealand economies from COVID-19 has been better than expected. The major bank is optimistic about the outlook thanks to the vaccine rollout and continued strong health outcomes.

How positive is the bank about the future?

The bank had a number of positive comments about the future:

Australia’s economic recovery is unfolding at a brisk pace and indicators point to ongoing strength in activity and the labour market. In-particular, record high levels of business conditions and forward orders combined with strong business confidence and increasing capacity utilisation should drive a pick-up in business investment and further jobs growth. This suggests that, in aggregate, the economy is well placed to absorb the winding up of jobkeeper at the end of March despite some sectors remaining challenged. Encouragingly, GDP for the March 2021 quarter is forecast to have fully recovered its pre COVID-19 level, but a large degree of spare capacity remains in the labour market. As such, wages growth and inflation will likely remain weak for some time, supporting ongoing accommodative monetary policy and potentially the need for further fiscal support in coming years.

What next for the NAB dividend?

The investment community seems to believe that the big four banks can continue their recovery as banks can relax on the loan provisions.

Different brokers have different opinions about what the dividend will be in FY21. Morgans thinks that NAB will pay a fully franked dividend of $1.29 in the current financial year. This translates to a grossed-up dividend yield of around 7%.

However, due to the strong performance of the NAB share price, most brokers now rate NAB as a hold/neutral. Credit Suisse has a rare buy rating, but the price target is only $27.50, though the broker appreciates the current strength of the mortgage market for the bank.

More reading

• 2 excellent ASX dividend shares to buy
• NAB (ASX:NAB) share price lower despite 86 400 acquisition update
• Is the NAB (ASX:NAB) share price great value?
• Commonwealth Bank (ASX:CBA) share price hits record high. Here’s why
• ASX 200 Weekly Wrap: Bank shares push ASX 200 towards all-time high

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. 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 Pushpay Holdings Ltd (ASX: PPH) share price will be one to watch on Wednesday.

This follows the release of the donation and engagement platform provider’s full year results.

How did Pushpay perform in FY 2021?

For the 12 months ended 31 March, Pushpay delivered operating revenue of US$179.1 million. This was a 40% or US$51.6 million increase on the prior corresponding period.

Positively, things were even better for its operating earnings (EBITDAF) due to the achievement of further operating leverage.

Management advised that its operating expenses only increased by 9% during the year, compared to a 40% increase in operating revenue. This led to its operating expenses as a percentage of operating revenue improving by 11 percentage points from 47% to 36%.

This was driven largely by strong operating revenue growth, further margin improvements, and disciplined cost management. The good news is that Pushpay expects significant operating leverage to accrue as operating revenue continues to increase, while growth in total operating expenses remains low.

This ultimately led to the company reporting EBITDAF of US$58.9 million for FY 2021, which was an increase of 133% or US$33.8 million from US$25.2 million in FY 2020.

It was also in line with its FY 2021 guidance for EBITDAF of between US$56 million and US$60 million. It is worth noting also that this guidance was upgraded three times during the course of the year.

Which is quite the opposite to fellow New Zealand based company A2 Milk Company Ltd (ASX: A2M), which has downgraded its guidance four times in FY 2021.

Finally, on the bottom line, Pushpay reported a net profit after tax of US$31.2 million. This was up 95% on FY 2020’s net profit.

Management commentary

Pushpay’s new CEO, Molly Matthews, was pleased with the company’s performance in FY 2021.

She said: “We are pleased to deliver a strong result for the year ended 31 March 2021. Pushpay continued its momentum throughout the 2021 financial year, delivering strong revenue growth, cash flow growth, expanding operating margins and EBITDAF growth while continuing to attract and support Customers throughout the evolving COVID-19 environment.”

“Over the year ended 31 March 2021, the Company made significant progress integrating Church Community Builder into the Pushpay solution. By successfully combining Church Community Builder’s market leading church management system with Pushpay’s unique donor management system over the past year, we are better able to execute against our vision and strategic goal of being the preferred provider of mission-critical software to the US faith sector.”

“With the significant progress in integrating the Pushpay and Church Community Builder solutions achieved over the 2021 financial year, the Company welcomed many new Customers, successfully realised strategic cross-selling opportunities within the Customer base and achieved operational efficiencies across the combined business,” she added.

FY 2022 guidance

Pushpay advised that it expects strong revenue growth in FY 2022, as it continues to execute on its strategy to gain further market share through continued innovation of its products, merger and acquisitions, and expanding into the Catholic market.

However, its earnings may not grow as quickly. Management explained that it will continue to balance expanding operating margin with opportunities to increase revenue growth. While it continues to focus on ensuring efficiency remains high, it also intends to invest strongly in future growth opportunities such as the Catholic market in the short term.

As a result, it is expecting to achieve EBITDAFI of between US$64 million and US$69 million in FY 2022. This will be an 8.7% to 17.1% increase year on year.

Though, excluding the impact of the investment into the Catholic initiative, Pushpay expects to achieve EBITDAFI of between US$66 million and US$71 million. This represents year on year growth of 12% to 20.5%.

Management concluded: “In the long-term, Pushpay is targeting to increase the appeal of our products to new customers and increase the revenue per Customer through continued innovation, and merger and acquisitions. The Catholic initiative is our first step in investing to grow our Customer base outside of our existing core Customer base, and we have set the goal of acquiring more than 25% of the Catholic church management system and donor management system market over the next five years.”

“The Catholic church is closely associated with many education providers and non-profit organisations, which presents further opportunities within the US and other international jurisdictions. Mergers and acquisitions provide opportunities to expand our Customer base and to deliver new products that can be sold into our existing Customer base more rapidly than could be achieved organically.”

More reading

• ASX 200 sinks, Boral rises, A2 Milk drops again
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• Leading brokers name 3 ASX shares to sell today
• ASX 200 down 0.9%: Boral rejects takeover offer, Afterpay & PointsBet sink
• Is the A2 Milk (ASX:A2M) share price cheap? Here’s what brokers think

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 PUSHPAY FPO NZX. The Motley Fool Australia owns shares of and has recommended A2 Milk. The Motley Fool Australia has recommended PUSHPAY FPO NZX. 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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• 2 buy-rated ASX dividend shares with attractive yields

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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Can the CSL Limited (ASX: CSL) share price be called a clear buy right now? Some of the leading brokers in Australia have had their say.

What’s the latest views on the CSL share price?

Quite a few brokers are positive on the ASX healthcare share giant.

For example, the brokers from Macquarie Group Ltd (ASX: MQG) currently rate the CSL share price as a buy with a price target of $296. That’s only a single digit upside over the next 12 months, but Macquarie is positive on the growing activity at US plasma collection centres. This is an important part of the picture for CSL.

However, Macquarie has pointed out that there are potential competition issues down the road.

Citi is another broker that has a buy rating on CSL shares, with a price target of $310. The broker is also positive on the plasma collection recovery story.

However, not every broker is convinced that the CSL share price is an opportunity today. For example, Morgan Stanley is neutral on CSL with a price target of just $275 – which is where the share price is already trading.

Ord Minnett is also not convinced – its price target is $266.20, which is below where it’s trading now.

What has the CSL share price done recently?

It has been a strange year for CSL so far. It’s actually lower than where it was at the start of the calendar year. But in March the CSL share price went as low as $246, so it has recovered noticeably since then.

CSL recently gave investors a presentation about its current operations and growth plans. In FY21 it’s opening 25 new plasma collection centre, bringing its global network to more than 300. Not only are there 284 centres in the US, but there are also nine in Germany, three in Hungary and five in China. It has plans to open another 40 in FY22.

The healthcare giant has plans to mitigate some of the issues it has seen relating to its plasma collection business. CSL has made adjustments to its US donor compensation. It also has a call back program for first-time, lapsed and temporarily deferred donors. CSL is also doing a large campaign to raise awareness of the opportunity and need for plasma donations.

Looking at the vaccine-focused Seqirus business, CSL has delivered over 100 million doses in the northern hemisphere for its 2020 to 2021 influenza campaign. There’s also an ongoing shift to differentiated products.

In the longer-term, CSL said that planning is underway for the construction of a new cell-culture vaccine facility in Melbourne.

Is it a clear opportunity?

The CSL share price does not offer a lot of upside according to the brokers that rate it as a buy.

At the current CSL share price, it’s valued at around 40x FY21’s estimated earnings.

More reading

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• Top 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’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. 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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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:

National Australia Bank Ltd (ASX: NAB)

If you don’t have exposure to the banks, then you might want to take a look at NAB. Even though its shares have been on fire this year, one leading broker doesn’t believe it is too late to invest.

According to a note out of Goldman Sachs, its analysts have a conviction buy rating and $29.97 price target on the bank’s shares. NAB remains the broker’s preferred sector exposure due to its cost management initiatives, its position as the largest business bank, and its strong capital position.

Goldman is forecasting fully franked dividends of 124 cents per share and 133 cents per share in FY 2021 and FY 2022, respectively. Based on the current NAB share price of $26.81, this will mean yields of 4.6% and 5%.

Sydney Airport Holdings Pty Ltd (ASX: SYD)

Another ASX dividend share to look at is this airport operator. With the domestic tourism market recovering and vaccines rolling out across the world, it may not be long until Sydney Airport’s terminals are packed full of travellers again.

Goldman Sachs is also positive on Sydney Airport and believes it is worth being patient with the company. It notes that the airport remains in an effective hibernation and expects it to be a major beneficiary of the Australian domestic inoculation strategy, if it facilitates relaxation of border restrictions.

The broker currently has a buy rating and $6.73 price target on its shares. It is also forecasting dividends per share of ~8.8 cents and ~27.1 cents over the next two years. 

Based on the current Sydney Airport share price, this will mean yields of 1.4% and 4.3%, respectively.

More reading

• NAB (ASX:NAB) share price lower despite 86 400 acquisition update
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• ASX 200 Weekly Wrap: Bank shares push ASX 200 towards all-time high
• The big four banks and Macquarie offer these juicy dividend yields

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. 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 a very poor performer and sank lower. The benchmark index fell 1.05% to 7,097 points.

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

ASX 200 expected to fall

It looks set to be another difficult 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 39 points or 0.55% lower this morning. This follows a poor night of trade on Wall Street which saw the Dow Jones fall 1.35%, the S&P 500 fall 0.9% and the Nasdaq drop 0.1%. The latter was down as much as 3.5% at one stage before rebounding.

Federal Budget

The Federal Government has just unveiled its “recovery budget” which includes billions of dollars of new funding. Among the biggest winners from the budget will be the aged care sector, which gets a $17.7 billion funding boost, and low to middle income earners. The latter will see up to 10 million Australians receive another tax offset of up to $1,080 in their refunds. This could be a boost to consumer spending.

Oil prices rise

It could be a good day for energy producers such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) on Wednesday after oil prices pushed higher. According to Bloomberg, the WTI crude oil price is up 0.8% to US$65.43 a barrel and the Brent crude oil price has climbed 0.5% to US$68.68 a barrel. Oil prices rose amid fears of fuel shortages in the United States.

Gold price edges higher

Gold miners Evolution Mining Ltd (ASX: EVN) and Newcrest Mining Limited (ASX: NCM) will be on watch after the gold price edged higher overnight. According to CNBC, the spot gold price is up slightly to US$1,838.30 an ounce. Increased demand for safe haven assets was partially offset by rising bond yields.  

Treasury Wine rated as neutral

The Treasury Wine Estates Ltd (ASX: TWE) share price could be fully valued according to analysts at Goldman Sachs. According to a note, ahead of the wine company’s investor day event, the broker has retained its neutral rating and $9.30 price target. It notes that Nielsen data in the US continues to be supportive from a market share perspective. However, the market is now cycling the pandemic driven consumption levels and is subsequently experiencing double digit sales declines in retail.

More reading

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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 Treasury Wine Estates 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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Fortunately, in this low interest rate environment, the Australian share market is home to a range of shares that are expected to provide attractive yields to investors in 2021. 

If you’re interested in adding a few to your portfolio, then you may want to look at the ones listed below. Here’s why they could be dividend shares to buy:

Sonic Healthcare Limited (ASX: SHL)

Sonic Healthcare is a leading medical diagnostics company with operations across the world.

It could be a good option due to its strong business model and positive performance during the pandemic.

In respect to the latter, in February Sonic released its half year results and revealed a 33% increase in revenue to $4.4 billion and a massive 166% increase in first half net profit to $678 million.

And while COVID-19 testing has been a key driver of this growth, the rest of the business performed positively as well.

Morgan Stanley is positive on the company. Its analysts currently have an overweight rating and $38.60 price target on its shares.

The broker is also forecasting dividends of 86.2 cents per share in FY 2021 and 89.2 cents per share in FY 2022. Based on the latest Sonic share price of $34.82, this will means yields of 2.5% and 2.6%. 

Wesfarmers Ltd (ASX: WES)

Another option to consider is Wesfarmers. Like Sonic, the conglomerate has been performing very positively in FY 2021.

This has been driven by growth across the majority of its businesses but particularly from the Bunnings business.

The hardware giant has been benefiting from home improvement-related government stimulus and the booming housing market.

Goldman Sachs is also a fan of Wesfarmers and currently has a buy rating and $59.70 price target on its shares. This compares to the latest Wesfarmers share price of $54.81.

The broker is also forecasting fully franked dividends of $1.88 per share in FY 2021 and $1.94 per share in FY 2022. This represents attractive yields of 3.4% and 3.5%, respectively.

More reading

• 2 ASX 200 COVID-19 shares to buy
• ASX 200 Weekly Wrap: Bank shares push ASX 200 towards all-time high
• 2 blue chip ASX dividend shares given buy ratings
• Do brokers think the Wesfarmers (ASX:WES) share price is in the buy zone?
• These ASX dividend shares keep giving investors a payrise

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Wesfarmers 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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If you’re looking to boost your portfolio with some quality shares, then you might want to look at the ones listed below.

Here’s why these quality ASX 50 shares have been tipped as ones to buy right now:

CSL Limited (ASX: CSL)

The first ASX 50 share to look at is CSL. It is a biotherapeutics company that manufactures and develops a portfolio of leading therapies and vaccines. Among its portfolio are flu vaccines, immunoglobulins, and a range of other plasma-based products.

While plasma collection headwinds have been weighing on its performance this year, there are signs that conditions are improving rapidly. In fact, last week analysts at Macquarie upgraded the company’s shares to an outperform rating after its research indicated that US plasma collection centre foot traffic has risen materially in recent weeks. Given that the vast majority of CSL’s collection network is in the United States, this bodes well for the future.

As does its burgeoning research and development pipeline which contains a number of potential lucrative products that could be launched in the coming years.

Macquarie currently has a $296.00 price target on the company’s shares. This compares to the latest CSL share price of $274.34.

NEXTDC Ltd (ASX: NXT)

Another ASX 50 share to look at is NEXTDC. It is Australia’s leading data centre operator with a collection of nine world-class centres located across the country. The company is also looking to expand its offering into both the Singapore and Tokyo markets.

The latter expansion would be highly complementary to its Australian business, which continues to go from strength to strength.

For example, during the first half of FY 2021, NEXTDC posted a 27% increase in data centre services revenue to a record $121.6 million and a 29% increase in EBITDA to $65.7 million. This was underpinned by a 33% lift in contracted utilisation to 71MW, a 16% lift in customers, and a 16% rise in interconnections.

Pleasingly, more of the same is expected in the second half. This is thanks to the accelerating shift to the cloud, which has led to very strong demand for capacity in its centres.

Macquarie is also a fan of NEXTDC. It currently has an outperform rating and $13.95 price target on its shares. This compares to the current NEXTDC share price of $10.84.

More reading

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James Mickleboro owns shares in NEXTDC. 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. 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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Shares in Mesoblast Limited (ASX: MSB) were once the talk of the ASX, but they’ve been plummeting recently.

The Mesoblast share price has fallen 11.5% since the company’s last announcement on 30 April.

In the April update, Mesoblast released its quarterly results and the results from those aged under 65 involved in its COVID-19 acute respiratory distress syndrome trial.

But it’s what might not have been released that could have investors worried. 

Class action lawsuits against Mesoblast

Last week, the Australian Financial Review (AFR) reported that its attempts to get information from Mesoblast about participants of the trial aged over 65 had been unsuccessful.

It’s likely the company’s silence is not doing much to soothe anxious investors. Particularly, as Mesoblast is no stranger to failing to disclose important information on its drug Remestemcel-L.

As the Motley Fool touched on in October last year, Mesoblast is facing multiple class-action lawsuits in the US. It has been accused of making false or misleading statements to investors and failing to disclose adverse facts about Remestemcel-L.

In addition, an Australian law firm is preparing to engage in a class-action claim against Mesoblast, according to the AFR. The firm states Mesoblast engaged in misleading or deceptive conduct to investors and breaches of disclosure when it promoted Remestemcel-L’s prospects.

The Australian law firm, Phi Finney McDonald, is alleging that Mesoblast misrepresented Remestemcel-L’s effectiveness and potential benefits or the significance of trial results. It also alleges Mesoblast failed to disclose flaws in study design and statistics to the market.

Phi Finney McDonald’s director Tim Finney was quoted by the AFR as saying:

In terms of the potential application for COVID induced ARDS – we intend to allege Mesoblast made claims regarding the success of trials that did not compare apples to apples in terms of clinical outcomes.

We’re yet to hear anything more from Mesoblast, nor anything out of the courts involved in the class actions against Mesoblast.

Mesoblast share price snapshot

The Mesoblast share price has performed poorly on the ASX of late and is down 24% year to date. It’s also fallen 48% over the last 12 months.

The company has a market capitalisation of around $1.1 billion, with approximately 648 million shares outstanding.

More reading

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• Why the Mesoblast (ASX:MSB) share price is surging 14%

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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