Piedmont Lithium Ltd (ASX: PLL) shares were racing higher today following news of a recent court decision involving the company.

At the close of trade today, the Piedmont share price was trading 12.77% higher at $1.06. In earlier trade, Piedmont shares reached an intraday high of $1.085 – a new all-time high for the company.

Let’s take a look at what the company announced.

What did Piedmont report?

In a statement released to the ASX last night, Piedmont announced the Supreme Court of Western Australia had approved its decision to re-domicile in the United States. The planned move is set to take place via a newly formed company, Piedmont Inc, acquiring Piedmont shares.

Piedmont is a dual-listed company – it trades on both the ASX and NASDAQ. The company intends to list the new Piedmont Inc on the NASDAQ. Piedmont Inc will then buy all shares, on both markets, under the scheme.

Shareholders will receive either: one US Chess depository interest (CDI) or one share in Piedmont Inc for every share they own. Shareholder allotment of either CDIs or Piedmont Inc shares will depend on whether they own shares on the ASX or NASDAQ, respectively.

The CDIs can be traded on the ASX when available.

As part of the court’s decision, Piedmont will send a booklet containing all relevant information to shareholders. Owners will then decide whether or not to approve the move. The lithium company will also send the booklet to the ASX for publication.

Due to the COVID-19 pandemic, electronic voting will be available for shareholders.

How has the Piedmont share price been performing?

As previously reported, demand for lithium has been surging in recent months. And higher demand means higher prices. One of the main drivers of this demand is the increasing uptake of electric vehicles, which require the use of lithium in the manufacture of their batteries.

As a result, the Piedmont share price has been going gangbusters. Only six months ago, Piedmont shares were selling at just 9 cents. Investors who bought in at that time would now be sitting on gains of more than 1,000%.

Similarly, the NASDAQ Piedmont share price has also been performing well. It jumped by around 9.5% on today’s news and is up more than 40% in the last five days of trading.

Based on the company’s current ASX share price, it has a market capitalisation of $1.5 billion.

More reading

• Did you know Piedmont (ASX:PLL) and Mesoblast (ASX:MSB) are listed on the NASDAQ?
• The Piedmont (ASX:PLL) share price surged 12% today. Here’s why

Motley Fool contributor Marc Sidarous 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 S&P/ASX 200 Index (ASX: JXO) is having a fairly nice day today, up 0.82% at the time of writing to 6,818 points. And understandably so. The Australian Bureau of Statistics (ABS) has just released its economic data, including gross domestic product, (GDP) for the quarter ending 31 December 2020. And it was a pleasing read.

The Australian economy grew by 3.1% over the quarter, in what was a nice beat on expectations. AMP Capital analysts had been expecting a lift of 2.5% for the quarter. Therefore, the 3.1% figure is a very healthy number indeed.

The short but sharp coronavirus-induced recession is now firmly in the rear-view mirror. Household consumption was the largest driver of GDP over the quarter, rising a healthy 4.3%. This contributed 2.3% to the total figure of 3.1%. Even so, annual spending in the hardest-hit areas of the economy is still reportedly depressed. Spending on transport services is still down 78.1% per annum. Additionally spending on hotels, cafes and restaurants is still down 29.8% per annum.

Household cash contributes to GDP

But the overall GDP rise was helped by the household savings rate dropping. Significantly, this figure dropped from the historic highs of 22% that we saw in the midst of the 202 lockdowns. Finally landing at 12% for the quarter. That’s a large drop. However, it still puts the savings rate well above the ~5% levels we saw prior to the pandemic.

That leaves plenty of cash in the bank for households that can be used for further consumption. AMP Capital notes that this is positive for household incomes. Especially as the labour market is also improving. On these numbers, AMP Capital is also estimating that Australian GDP will return to pre-COVID levels by the June quarter this year. It is possible these might return even by the end of the current quarter (ending 31 March).

However, it is also noted that the Australian economy is still around 3% below what it would have been without the pandemic.

The state of the states

In terms of individual states, Victoria was the standout performer.  Significantly, it grew 6.8% over the quarter. This, of course, was coming off of a low base. Especially as Victoria was the only state in a rolling lockdown over the previous quarter. Aside from Victoria, Tasmania, and the Northern Territory were the strongest performers, growing 3.3% and 4.1% respectively.

Queensland and New South Wales also had strong growth at 2.9% and 2% apiece. The Australian Capital Territory and South Australia were the laggards, but still managed 0.6% and 1.3% each. Western Australia managed 1.5%.

To conclude, AMP Captial commented the following on today’s numbers:

The positive outcomes in GDP activity are unlikely to shift the dial on the [Reserve Bank of Australia] policy response for now… there is still some spare capacity in the economy as GDP growth would have been much stronger if COVID-19 never happened and the unemployment rate is at least 1% above its pre-COVID levels. So, expect the low interest rate environment to persist over 2021 and 2022 despite the recent back up in bond yields.

More reading

• Is investing in ASX shares better than property?
• 2 ASX 200 shares to buy for growth
• 3 reasons why Brickworks is a great ASX dividend share
• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 slides lower, A2 Milk surges, Gold Road sinks

Motley Fool contributor Sebastian Bowen 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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Investors are talking about the 3D MetalForge (ASX: 3MF) share price following yesterday’s initial public offering (IPO) and ASX debut.

Listing at 12noon yesterday, the 3D printing company debuted at 35 cents a share and quickly plummeted 24.29%, closing its first trading day at 27 cents. Despite a minor lift in trading today, the 3D MetalForge share price dropped even lower, trading at 26 cents at the close.

Let’s review what the business does and how the 3D MetalForge IPO went down.

3D MetalForge IPO at a glance

On 21 December 2020, Singapore-headquartered 3D MetalForge Limited lodged a prospectus with the Australian Securities and Investment Commission (ASIC) regarding the company’s IPO and admission to the Australian Securities Exchange, ASX Ltd (ASX: ASX).

According to the prospectus, the company set out to raise a minimum of $8 million and a maximum of $10 million through the issue of shares at an issue price of $0.20 per share under the public offer.

The 3D MetalForge IPO stopped accepting applications from investors after achieving its maximum subscription of $10 million.

So what exactly does 3D MetalForge do?

3D MetalForge specialises in additive manufacturing production, better known as 3D printing. 

The company produces additively manufactured parts at scale and provides a suite of additional business services. These include consulting, engineering, design optimisation as well as printing and production services.

3D MetalForge claims to offer an advanced range of printing equipment. Its Directed Energy Deposition (DED) printers can produce high-quality metal parts of up to 1.5m in size at a speed of up to 750 grams per hour.

Since 2012, the business says it has printed more than 20,000 parts on its 26 printers. The work extends across 1,300 projects for clients in 20 countries.

Looking ahead

Following the 3D MetalForge IPO, the company plans to proceed with its business and expansion strategy. 

This includes expanding the production capacity at its current Additive Manufacturing Centre in Singapore and upgrading its office in Houston to a production centre. 3D MetalForge will also open sales and marketing centres in Australia, the Middle East and Europe.

The Singapore expansion and Houston upgrade are targeted for completion by 30 June 2021. Sales and marketing activities will continue over a 24-month period.

More reading

• Why is the ASX Ltd (ASX:ASX) share price slipping today?
• 5 things to watch on the ASX 200 on Thursday
• How to turn $20,000 into $1 million in 10 years with ASX shares

Motley Fool contributor Gretchen Kennedy 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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ASX dividend shares may be interesting to some income investors right now with how low interest rates are at the moment.

The Reserve Bank of Australia (RBA) official interest rate is now just 0.10%, which means that it’s hard to make a high level of income from some rate-linked investments.

ASX dividend shares may be an answer to grow income, such as these two:

Charter Hall Long WALE REIT (ASX: CLW)

This entity is a real estate investment trust (REIT) that’s managed by Charter Hall Group (ASX: CHC), one of the largest property managers in Australia which runs a variety of property strategies.

A few different brokers rate the Charter Hall Long WALE REIT share price as a buy, such as Citi which has a price target of $5.30.

Charter Hall Long WALE REIT runs a diversified property strategy. It isn’t just about retail properties, office properties or any particular sector.

WALE stands for weighted average lease expiry (WALE), which is how long its tenants are signed up for on the rental contracts.

The ASX dividend share has a portfolio of properties worth around $4.5 billion, with $1.5 billion in long WALE retail, $1.1 billion in industrials and logistics, $1 billion in office buildings, $643 million in telecommunications exchanges and $241 million in agri-logistics.

Some of the tenants at the REIT include Wesfarmers Ltd’s (ASX: WES) Bunnings, Westpac Banking Corp (ASX: WBC), Metcash Limited (ASX: MTS), David Jones, Coles Group Ltd (ASX: COL), Woolworths Group Ltd (ASX: WOW), BP and Telstra Corporation Ltd (ASX: TLS).

Management reaffirmed that the target distribution payout ratio remains at 100% of operating earnings, which is expected to be at least 29.1 cents per security (up at least 2.8%). It was one of the few REITs that grew the dividend in 2020 during the COVID-19-affected year.

At the current Charter Hall Long WALE REIT share price, it has a distribution yield of 6.1%.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Patts is the ASX dividend share with the longest dividend growth streak. The investment conglomerate has grown its dividend every year since 2000. Over the last 20 years, total ordinary dividends have grown at a compound average growth rate of 9.2%.

The company is focused on two main elements for shareholders. The first focus is growth in the capital value of the portfolio (measured by growth in the net asset value (NAV)). The other element is steady and growing dividends, paid from cash generation of the portfolio.

It owns a number of different sectors and businesses including telecommunications like TPG Telecom Ltd (ASX: TPG) and Tuas Ltd (ASX: TUA), building products and property with Brickworks Limited (ASX: BKW), resources with Round Oak Minerals and New Hope Corporation Limited (ASX: NHC) and financial services including Bki Investment Co Ltd (ASX: BKI), Pengana Capital Group Ltd (ASX: PCG) and 360 Capital REIT (ASX: TOT).

Some of the ASX dividend share’s recent investment focuses are agriculture and retirement living. In FY20 it invested $150 million into agriculture and it’s looking for more opportunities, current commodities include citrus, macadamias, table grapes, stone fruit and water. Soul Patts said that there’s strong demand globally for good quality Australian food products. The country has a global competitive advantage in agriculture according to management.

Regarding retirement living, it’s continuing to progress the Cronulla development and it’s working with Provectus to examine new opportunities for luxury independent living developments.

At the current Soul Patts share price, it has a grossed-up dividend yield of 2.9%.

More reading

• 3 reasons why Brickworks is a great ASX dividend share
• No ASX dividend share is perfect, but Soul Patts (ASX:SOL) is more perfect than most
• 3 ASX shares that keep growing the dividend every year
• 2 high-yielding ASX 200 shares
• 2 ASX dividend shares rated as strong buys by brokers

Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks, Telstra Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET, Wesfarmers Limited, and Woolworths 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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The Enero Group Ltd (ASX: EGG) share price is trading lower in late afternoon trade. This comes after the company announced that it has divested Frank PR (Frank) from its brand portfolio. At the time of writing, the marketing and communication services company’s shares are down 1.16% to $2.99.

Let’s take a look at what moved the Enero share price below the $3 barrier today.

Sale of Frank

The Enero share price is in the red after investors appear displeased with the company’s offloading of Frank.

According to its release, Enero advised that it has sold off its 75% interest in Frank. The move was a part of a management buyout. Moreover, the deal was facilitated between Enero and Frank’s management team, chair and founder, Graham Goodkind, and managing director, Alex Grier.

Together, both Mr. Goodkind and Mr. Grier hold the other remaining 25% stake in Frank.

Enero will recognise a non-cash loss of $9.5 million to $10 million from the sale of Frank. This is before the impact of income tax, after receiving a cash consideration payment of $1.5 million for the 75% interest in Frank.

In FY20, Frank delivered $9.3 million in revenue to Enero, representing 6.8% of total group net revenue. More recently, the company reported $4.3 million for the first-half of FY21, reflecting 5.3% of Enero’s total earnings.

Management commentary

Enero Group CEO Brent Scrimshaw commented on the sale. He said:

Enero continues to sharpen its focus on the core agencies of the Group in line with its strategy announced at the 2020 AGM. The Frank sale will provide additional capital to allocate to high growth opportunities across the global network of the Hotwire & Orchard brands along with BMF in Sydney, in addition to future acquisitions that accelerate capability across the Group.

Frank chair and founder Graham Goodkind added:

Enero has been a great owner, shareholder, partner and friend of Frank and the advice and support that we’ve received over the last 14 years has been tremendous.

…I am grateful to Brent Scrimshaw and the Enero board for the way in which they have conducted negotiations and wish the Group every success in the future.

About the Enero share price

Despite today’s fall, the Enero share price has accelerated over the last 12 months, gaining more than 110%. The company’s shares took off strongly at the start of last month from around the $2 mark to almost $3 today.

More reading

• 2 top ASX dividend shares to buy
• Why the Ioneer (ASX:INR) share price is in limbo today
• Better Buy: Netflix vs. AT&T
• These ASX 200 shares are trading at near 52-week highs
• Is investing in ASX shares better than property?

Motley Fool contributor Aaron Teboneras 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 Ioneer Ltd (ASX: INR) share price is in limbo today after the company asked for a trading halt pending an announcement.

At yesterday’s market close, the Ioneer share price was trading at 44 cents. 

The trading halt will conclude on Friday 5 March or once the announcement is released to the market.

Ioneer positions for capital raising

The mineral exploration company today advised that it is positioning to release a capital raising announcement. 

This follows its 16 February announcement that it had joined forces with construction giant Caterpillar Inc (NYSE: CAT). 

Caterpillar is one of the world’s largest construction and mining equipment manufacturers.

The 2 companies entered a memorandum of understanding (MoU) that Ioneer will use Caterpillar’s Cat® Command for hauling, Autonomous Haul System (AHS). This will improve operator safety, equipment utilisation
and site productivity.

The company will use AHS at its Rhyolite Ridge lithium-boron project based in Nevada, US – the first greenfield operation to use the system in North America.

Starting in 2023, Ioneer will initiate operations with a fleet of Cat® 785 Next Generation trucks equipped with Cat® Command.

With the truck purchase in sight, Ioneer seems on the move to have the funds in place in order to take the next steps.

What else is coming up for Ioneer?

According to Ioneer’s December quarterly update, the company is continuing its engineering efforts at the Rhyolite Ridge project. In addition, negotiations are underway for the first lithium offtake sales.

The update concluded that looking ahead, Ioneer would be, “further advancing strategic partnering and financing process through continued technical and financial discussions”.

The forthcoming capital raising announcement will provide more colour to the market about how these activities are being carried out.

Ioneer share price snapshot

The Ioneer share price has rocketed 319% over the past 6 months.

Ioneer has a market capitalisation of $733.4 million, and there are presently 1.7 billion shares outstanding.

More reading

• Better Buy: Netflix vs. AT&T
• These ASX 200 shares are trading at near 52-week highs
• Is investing in ASX shares better than property?
• Why the Strandline Resources (ASX:STA) share price is up 11% today
• Why the Orthocell (ASX:OCC) share price is edging higher today

Motley Fool contributor Gretchen Kennedy 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

AT&T (NYSE: T) took on Netflix (NASDAQ: NFLX) and other video streaming rivals with the launch of its HBO Max service last year. But any comparison between Netflix and AT&T requires a look into how AT&T’s streaming service fits into its larger telecom business.

Through this lens, is AT&T a better stock buy than Netflix? Here’s how the telecom titan stacks up against the streaming entertainment pioneer.

AT&T’s strategy

Despite HBO Max, AT&T’s key competitors aren’t the likes of Netflix; they’re telecom rivals like Verizon Communications.

With the U.S. telecommunications market at a saturation point, AT&T and its competitors are forced to snatch customers from one another to grow subscribers. Holding on to its customers is AT&T’s top priority, and as CEO John Stankey said, “HBO Max is the key here.”

By bundling telecom services with HBO Max, AT&T hopes to retain customers while enabling the company to capture a higher average subscription price. To this end, AT&T shook up the entertainment industry last December by announcing plans to release its WarnerMedia-produced theatrical film slate to HBO Max at the same time it releases them to theaters in 2021.

Its fourth-quarter results suggest the strategy is having an impact. AT&T experienced growth in postpaid subscribers, the telecom industry’s most valued customers, for the second quarter in a row. AT&T added 1.2 million postpaid customers, the highest net adds in some time.

Data source: AT&T. 

It combined this growth with the second-lowest quarter of postpaid phone churn in the company’s history. It also doubled the number of fourth-quarter HBO Max subscriptions over the previous quarter.

But despite these promising trends, AT&T has struggled since the pandemic struck. The company’s 2020 full-year revenue dropped to $171.8 billion from 2019’s $181.2 billion.

The diminished revenue hurt the company’s efforts to pay down a massive debt load accumulated to acquire Time Warner (which included HBO) and DIRECTV. The latter is like an anchor dragging on AT&T’s operations as the service bleeds subscribers.

The financial impact was perhaps most apparent when the company failed to raise its dividend in 2020 after 36 consecutive years of dividend increases. Its high-yield dividend is one of the key reasons investors are attracted to the stock.

Netflix’s success

Netflix helped pioneer streaming video entertainment, allowing it to ride a rocket ship of revenue growth spanning years.

Data by YCharts.

The trend continued through the company’s most recent quarter. Netflix enjoyed a strong fourth quarter, with paid subscription memberships rising 21.9% year over year.

The company anticipates continued membership growth in the first quarter, rising to 209.7 million subscribers from the previous quarter’s 203.7 million. Netflix also expects first-quarter revenue to reach $7.1 billion, up 23.6% from last year.

Membership growth was helped by pandemic-induced stay-at-home restrictions, but when you dig into the numbers, it’s also the result of a successful strategy. Netflix invested in content attractive to an international audience. The company developed original programming in German, Korean, Spanish, and other languages.

As a result, Netflix’s member growth was powered by international adoption. Of its 2020 net additional memberships, 83% came from markets outside North America. Even better, these local titles also possess global appeal. Its French-language heist series Lupin was a hit around the world, ranking second in Netflix’s top 10 in the U.S.

This strategy bodes well for its ability to continue capturing subscriber growth and revenue. Moreover, CFO Spencer Neumann indicated the company turned a corner and expects to break even on a cash flow basis this year and be cash flow positive from 2022 onward.

Despite the successful strategy, Netflix lost market share as more competitors entered the fray. As co-CEO and chief content officer Ted Sarandos says, people have tremendous appetites for great entertainment and are willing to pay for more than one streaming service to get the content they want.

The final verdict

At this point, Netflix is the better buy. Its consistent revenue and subscriber growth, steady path toward being cash flow positive next year, and resilience in the face of fierce competition are all factors making it a justified part of the FAANG gang.

AT&T, meanwhile, must spend years reducing its debt. This and its substantial dividend payouts, totaling nearly $15 billion in 2020, hamper the company’s ability to invest in its business.

So for now, Netflix is the clear winner in this comparison.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• Why the Nine (ASX:NEC) share price hit another 52-week high
• Netflix dominates Golden Globes, ushering in new era for streaming
• Why this ASX tech ETF is in the buy zone
• 3 factors impacting Netflix’s next price hike
• Why investors should look beyond the ASX 200 to US share markets

Robert Izquierdo owns shares of AT&T. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Netflix. The Motley Fool Australia has recommended Netflix. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Rising bond yields have triggered much of the market’s recent volatility and weakness across tech and growth-related sectors. At the moment it feels like the market’s taking one step forward and one step back. However, these ASX 200 shares are seemingly unphased by potentially higher interest rates and making new highs.

ASX 200 shares making 52-week highs 

Australia and New Zealand Banking Group Ltd (ASX: ANZ) 

The ANZ share price has clawed its way back to pre-COVID levels. The gruelling COVID sell-off saw the ANZ share price lose 48% of its value between 21 February and 23 March last year. To recoup those losses, the ANZ share price has almost doubled in just one year. 

Bank’s earnings during the February reporting season was solid.  Citi Bank cited that revenue grew positively. This was driven by lower funding costs and higher deposit margins. Meanwhile, a sizable fall in bad debts was occurring earlier than expected. 

BHP Group Ltd (ASX: BHP) 

The gravity-defying iron ore spot price has managed to stay near 9-year highs of US$170 per tonne. This has been supported by a resumption in Chinese buying interest after its mid-February Lunar New Year holidays. This has helped the BHP share price not only make 52-week highs but an almost 10-year high of $50.80 last week. 

Rio Tinto Ltd (ASX: RIO) 

If the BHP share price is soaring into 10-year highs, then the Rio Tinto share price will follow suit. Rio Tinto briefly hit $130.30 on Tuesday, marking a new all-time record high.

Despite the outperformance of ASX iron ore miners, sceptics are concerned that iron ore prices could cool down in the short-medium term. 

The surge in iron ore prices has been supported by supply-side challenges from the world’s largest iron ore producer, Vale. Vale has been fraught with production challenges including a dam disaster in January 2019 and was forced to close multiple mine sites throughout 2020 due to the rapid spread of COVID in Brazil. 

Brazilian exports are coming back online, with exports increasing by 10.9% in February compared to the corresponding month in 2020. 

Nine Entertainment Co Holdings Ltd (ASX: NEC) 

Of all ASX 200 shares, you wouldn’t expect Nine Network to be making 52-week highs. However, the business is reaping rewards of its digital transformation and continued strength within its traditional lines of businesses such as free-to-air television, publishing, and radio.

The company’s half-year results announced on 24 February highlight its net profit after tax doubling from $87.3 million to $181.9 million. It cited strong audience results across all platforms while its streaming platforms Stan and 9Now delivered strong double-digit growth. 

More reading

• The ANZ (ASX:ANZ) share price just hit a 52-week high
• Why the Nine (ASX:NEC) share price hit another 52-week high
• ‘Deep regret’: Rio Tinto (ASX:RIO) share price climbs as chair quits
• Exploring the golden window of opportunity for ASX ESG investors
• The big four banks offer these juicy dividend yields to ASX investors

Motley Fool contributor Kerry Sun 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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At the start of this week, the S&P/ASX 200 Index (ASX: XJO) seemed to take something of a back seat, as it is inclined to do from time to time. In its place, investors were abuzz at news out of the property market.

According to a report in Monday’s Australian Financial Review (AFR), property values rose at their fastest pace in almost 17 years over the month of February. Home values reportedly rose 2.1% over the month, and investor home loans 9.4% in January to their highest levels in four years.

According to the report, the gains put the Sydney and Melbourne property market on track to hit record highs. They also make the ASX 200, which has (as at the time of writing) ‘only’ given investors a 1.94% appreciation year to date in 2021, rather boring by comparison.

But, at risk of stoking that eternal debate, there are still reasons why ASX shares (meaning a diversified portfolio of shares) might be a better asset class to own today. Here are three potential reasons why:

ASX shares vs. property

Tax advantages

Sure, property does offer some tax breaks. While negative gearing and depreciation are certainly welcome benefits of owning property, the tax advantages of owning ASX shares are also significant. Take franking. Rental yields don’t come with a receipt entitling you to a tax refund. Yet for a fully franked dividend, you get exactly that. And if you don’t pay tax, you get that back as a cash refund.

That’s not something that is available to property investors utilising negative gearing or depreciation. Therefore, investing in shares could be a better move than investing in property from a tax perspective, depending on your personal circumstances.

Liquidity

It can take weeks at best, and months or even years at worst, to sell a property. The property market is highly illiquid, and selling can simply be a huge pain in the proverbial. Then, there are other transactional costs to worry about too. Between stamp duty and real estate fees, selling a house ain’t cheap.

By contrast, buying and selling ASX shares attracts no taxes (apart from capital gains of course), and brokerage costs have never been lower. Without too much research, you can find a broker that will charge you as little as $5 per trade.

In the case of US shares, it’s often free. And you are free to instantly buy or sell your shares from 10 am to 4 pm, Monday to Friday. So, in terms of liquidity, buying and selling shares is simpler and cheaper than buying and selling property.

Diversification

Say an investor is about to buy their first investment property in Sydney. They will be looking at putting down a $100,000 to $200,000 deposit for a median-priced property, which is likely to be a fair chunk of their entire net worth. If they are successful, they will own a $1 million (give or take) asset, in one asset class, on one street, in one city, in one market and in one country. That’s hardly a diversified base of wealth, regardless of the investment quality.

Contrast this to ASX shares. You can buy a range of exchange-traded funds (ETFs) on the ASX that offer exposure to hundreds or even thousands of different companies with one single investment. These companies could come from dozens of different countries and be priced in a range of different currencies. And you can pick some up for as little as $500 (sometimes less, depending on your broker).

Say what you want about shares, but you can’t deny that building a diversified portfolio can be cheap and simple. In contrast, building a diversified portfolio of properties can take years, or even decades.

Volatility

Volatility is one area where the two asset classes differ dramatically. Because the share market is so liquid, changes in pricing are immediately obvious. Contrast that to property prices, which are often only obvious in hindsight. Unless you have your property professionally valued, it can be hard to know exactly how much it’s worth at any given time. That can be both an advantage and a disadvantage. Equally, the liquidity and volatility that the share market brings can be both a blessing and a curse.

Some investors simply can’t stomach seeing the value of their assets move around, especially during those dreaded market crashes. In these situations, it’s not uncommon to see 20%, 30% or even 50% of a share’s value wiped out in a matter of weeks (or even days).

These kinds of moves might even provoke a nervous investor to capitulate and sell out (which, if you remember, is easy due to the liquid nature of the share market). That is often not a prudent move from a long-term perspective. If an investor can’t handle that kind of volatility, then property might be a more suitable investment for them.

Property prices are relatively stable compared to shares. Prices tend to move in month and year terms, rather than daily swings. Plus, there’s usually very little chance you can make a panic-driven snap sell that you might later regret. On the other hand, some investors enjoy the volatility that the share market brings to the table since it gives them periodic opportunities to buy shares of their favourite companies at a cheap price. The legendary share market investor Warren Buffett is famous for making big deals in the middle of market panics.

In conclusion, volatility can arguably either complement or detract from your investing efforts, depending on your temperament.

Foolish takeaway

At the end of the day, there’s no ‘right’ answer to the question ‘are ASX shares better than property’. If there was, there wouldn’t be such a strong market for both asset classes. Property offers many benefits that shares don’t – and vice versa.

The right choice for you can probably be worked out with easier questions, such as ‘how much money do I have to invest?’ or ‘am I bothered by high volatility?’. Most wealthy people have a healthy mix of both, which tells you all you need to know!

More reading

• 2 ASX 200 shares to buy for growth
• 3 reasons why Brickworks is a great ASX dividend share
• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 slides lower, A2 Milk surges, Gold Road sinks
• Here are 4 ASX shares that insiders have been buying recently

Motley Fool contributor Sebastian Bowen 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.

The post Is investing in ASX shares better than property? appeared first on The Motley Fool Australia.

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The Strandline Resources Ltd (ASX: STA) share price is rocketing upwards today.

The mineral sand producer’s share price opened 9.5% higher than yesterday’s close after announcing it secured the final binding offtake contract for its flagship project.

At the time of writing, Strandline shares are up more than 11.9% – selling for 24 cents apiece.

What did Strandline Resources announce?

In today’s announcement to the ASX, Strandline Resources reported it has signed an agreement to sell all rutile produced at its Coburn project.

The agreement is with chemical company Venator Materials – a developer of titanium dioxide pigments.

The deal has secured approximately 17% to 20% of the project’s revenue over the next 5 years.  

With this final agreement, Strandline Resources has secured more than 90% of the project’s future revenue under binding sales contracts.

Prior agreements have secured buyers for most of Coburn’s other mineral outputs including, ilmenite, zircon concentrate and premium finished zircon.

The company plans to reserve the remaining 9% of minerals produced at Coburn for shorter-term spot market contracts.

Today’s announcement follows Northern Australia Infrastructure Facility’s (NAIF) investment decision to provide the company with a 15-year $150 million loan facility to help fund the development of the Coburn project.

The NAIF loan accounts for the major share of funding needed, leaving Strandline Resources to finalise the remaining $110 million of capital requirements.

Commentary from management

Strandline managing director Luke Graham said the agreement is a testament to the quality of Coburn’s mineral sands products: 

With over 90 per cent of the project’s revenue now underwritten by binding sales contracts with major customers and a significant portion of the development funding secured via the NAIF loan, Strandline is on track to become Australia’s next world-scale mineral sands producer.

Strandline share price snapshot

The Strandline share price has risen by 17% year to date, and by 135% over the past 12 months.

Aside from the Coburn project, the company has four projects in East Africa in various stages of development.

More reading

• Is investing in ASX shares better than property?
• Why the Orthocell (ASX:OCC) share price is edging higher today
• Here’s why Airbnb is the perfect recovery stock
• The ANZ (ASX:ANZ) share price just hit a 52-week high
• Lynas (ASX:LYC) share price jumps 6% to new 52-week high

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.

The post Why the Strandline Resources (ASX:STA) share price is up 11% today appeared first on The Motley Fool Australia.

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