The Xero Limited (ASX: XRO) share price has dropped 23% over the last three months, could it be worth a buy right now?

What’s happened to the Xero share price recently?

Well, the Xero share price did end up 4% higher yesterday. Plus, it has had a strong performance during COVID-19 – the share price has gone up 59% over the last year (with the starting point a year ago not quite being the bottom of the COVID-19 crash).

However, plenty of ASX growth shares have seen their share prices decline during 2021. Other names to fall include Afterpay Ltd (ASX: APT) and CSL Limited (ASX: CSL).

Some brokers don’t think that the Xero share price is going to perform well over the next 12 months.

Broker Morgan Stanley has a share price target of $100 for Xero – this suggests it could fall 15% over the next year.

UBS has an even worse outlook for Xero shares, with a price target of $79.50. That means the broker believes it could drop by around a third over the next year, despite the large decrease already.

An acquisition

Xero recently made an acquisition called Planday. A workforce management platform with more than 350,000 employee users across Europe and the UK that simplifies employee scheduling, allowing businesses to forecast and manage their labour costs.

Not only will Xero be able to diversify its global revenue further, but the acquisition will allow Xero to strengthen its offering to clients and potentially cross-sell services. Xero will then take Planday’s offering into other markets where Xero operates, supporting Xero’s long-term growth plans.

This acquisition will cost €155.7 million and have a “modest” negative impact on Xero’s FY22 earnings before interest, tax, depreciation and amortisation (EBITDA) according to management.

Is the Xero share price a buy?

There is no doubt that the market thinks Xero is a quality business. It’s why it has a $16.6 billion market capitalisation, according to the ASX.

In the FY21 half-year result, it reported a number of growth metrics. It said that total subscribers grew by 19% to 2.45 million, annualised monthly recurring revenue grew by 15% to NZ$877.5 million. The gross profit margin improved from 85.2% in the prior year, to 85.7%. It generated NZ$120.7 million of EBITDA (up 86%), it made NZ$34.5 million of net profit after tax (NPAT) and NZ$54.3 million of free cash flow.

But no business is a buy at any price. UBS and Morgan Stanley don’t think the Xero share price will do very well over the next year.

Brokers like Citi think that there are question marks over the business when government support comes to a stop – it doesn’t think Xero is an obvious buy despite all of its qualities.

But Xero says that it’s positive on the outlook, saying:

Xero is a long-term orientated business with ambitions for high-growth. We continue to operate with disciplined cost management and targeted allocation of capital. This allows us to remain agile so we can continue to innovate, invest in new products and customer growth, and respond to opportunities and changes in our operation environment.

More reading

• 2 of the best ASX growth shares to buy immediately
• ASX 200 jumps, Pointsbet reveals acquisition, Metcash drops
• ASX 200 up 0.8%: Metcash update, tech shares rebound, PointsBet acquisition
• 5 things to watch on the ASX 200 on Tuesday
• 5 things to watch on the ASX 200 on Monday

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 AFTERPAY T FPO and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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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.

Wall Street got off to a generally good start on Tuesday morning, as market participants seemed comfortable with the slow but steady pace of economic recovery. Although the latest data on retail sales was somewhat disappointing, investors like that a sluggish economy is likely to make the Federal Reserve keep interest rates low for longer. As of 10:30 a.m. EDT, the Dow Jones Industrial Average Index (DJX: .DJI) had moved lower by 70 points to 32,884, backing off from its record close on Monday. However, the S&P 500 Index (SP: .INX) had pushed further into all-time high ground with a 10-point rise to 3,979, and the Nasdaq Composite (NASDAQ: .IXIC) had risen 116 points to 13,575.

Many investors have focused their efforts on a very narrow part of the stock market, drilling down on companies that have become extremely popular among short-term traders. Stocks like GameStop Corp (NYSE: GME) and AMC Entertainment Holdings Inc (NYSE: AMC) have gone from relative obscurity to the Wall Street spotlight. Yet as today’s big moves lower for these two stocks show, it’s extremely dangerous to speculate in high-profile stocks. As quickly as they move higher, they can give up those gains and leave traders with big losses.

Losing the game

Shares of GameStop were down more than 20% at 10:30 a.m. EDT Tuesday morning. The downward move took the video game retailer stock’s losses since its best levels less than a week ago to more than 50%.

The biggest problem with investing in a stock that’s a favorite among traders is that the reasons for any given day’s rise or fall often has little to do with the company itself. In GameStop’s case, one commonly cited expectation coming into this week was that investors flush with cash from the latest economic stimulus measure in Washington would buy more shares of the video game specialist. That would’ve been visible as a big bump in trading volume, but Monday’s volume figures were subdued at best as the stock fell from $265 per share to $220. This morning’s further decline took the stock to around $175 per share.

Even with the fall, though, GameStop shares remain at more than triple their worst levels in mid-February following the stock’s initial rise and fall. Short-squeeze dynamics were primarily responsible for that first cycle up and down, but bullish shareholders pointed to news that Chewy Inc (NYSE: CHWY) co-founder Ryan Cohen was working more closely with GameStop to further its plans for a technological transformation.

Investors need to understand that Cohen’s efforts will take time to bear fruit. In the meantime, volatile day-to-day swings promise to take GameStop shares on a wild ride — and there could be plenty more ups and downs as traders fight with one another for supremacy.

AMC wants a Hollywood ending

Elsewhere, AMC Entertainment Holdings saw its stock pull back almost 10% on Tuesday morning. That still left the shares above where they’d started the week, with Monday’s 26% rise outweighing the downward pressure today.

AMC’s latest surge has come amid good news for the movie theater operator, as it has taken advantage of new rules in California to reopen theaters in key areas like Los Angeles. Already, popular theaters in Burbank and Century City are open to limited audiences, and if local officials concur, AMC will have all of its more than four dozen locations across the Golden State open by the end of this week.

Yet while traders focus on the likelihood that AMC will in fact make it through the pandemic without having to seek bankruptcy protection, many Wall Street analysts point to a cloudier long-term view. Moreover, given that AMC had to take on a lot of debt to survive, shareholders won’t participate fully in any ensuing recovery in its business. That has some analysts calling for a plunge of 80% or more for AMC stock.

Don’t get distracted

It’s tempting to try to trade fast-moving stocks to score quick profits. But more often than not, traders find themselves getting burned in the inevitable downdrafts that follow big upward moves. Even long-term investors with bullish views must be wary of investing in AMC and GameStop in light of the disruptive trading activity that’s dominating these two stocks right now.

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

More reading

• ASX investors still can’t get enough of GameStop (NYSE:GME) shares
• Amazon buying AMC isn’t as crazy as you think

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Chewy, Inc. 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 GameStop and AMC are riding the stock market roller coaster again appeared first on The Motley Fool Australia.

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

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More reading

• Xero (ASX:XRO) share price down 23%, is it a buy?
• 2 ASX investing strategies for those paying off a mortgage
• GameStop and AMC are riding the stock market roller coaster again
• How I’d aim to generate a growing passive income from dividend shares
• The Core Lithium (ASX:CXO) share price is up 21% in just one week

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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Are you wondering if you should pay off your mortgage before investing your spare cash in the ASX? You’ve come to the right place.

If you’re a homeowner, congratulations. You’re already a proactive investor. 

Many experts advise to diversify your investment portfolio as much as possible. Investing in shares may offer some protection if the residential property market reduces in value.

If you’ve already committed to your property investment and you’re comfortable not immediately paying off your mortgage, maybe the share market is your next mountain.

What ASX investment strategies might work best for people paying down a mortgage?

It’s incredibly important that you take a personal approach to investing. Your individual situation must be considered before taking action and this article only contains general advice.

With that in mind, here are 2 ASX investment strategies that could be attractive to those with a mortgage.

Rather than paying extra off of your mortgage, put that cash towards accumulating compound interest

This strategy can be a relatively safe bet for simple, low-maintenance investing. This approach works because of compounding interest rates. If you’re staring at your screen blankly, check out this breakdown of investing in shares versus paying down a mortgage.

Now, obviously, compound interest only works if the market is going up more often than it’s going down, and that’s never guaranteed. Compounding interest takes time and consistency. Although, if you’re already the holder of a mortgage, you’re probably well versed in the realities of long-term financial commitments.

Investing in dividend-paying shares

If you’re after a more immediate reward, perhaps dividend-paying shares could be your answer. Dividends are a portion of a company’s profits that shareholders are entitled to. Most companies pay their shareholders a dividend every 6 or 12 months, but they can pay more or less regularly. In fact, they don’t have to pay at all. Further, the amount that reaches your bank account from your dividend shares is likely to be unstable as it reflects a company’s profits and whims.

With that in mind, some investors might find dividends could be a good way to offset a proportion of their mortgage repayments. Or maybe to earn some spending money, especially if most of your disposable income currently goes towards house repayments.

Here’s what you need to know before investing in the ASX

Firstly, investing in shares is risky. Even the most stable company, with a perfect record of past performance, can see volatility in its share price for a number of reasons.

Don’t let that scare you though. As today’s low-interest rates and rising bond prices have made cash savings accounts and bonds less prosperous than they used to be, investing in the share market might be worth considering.

Secondly, make sure you’ve paid off any high-interest debt before investing in the share market. Compounding interest works the same in reverse — don’t let any success you may find on the ASX be depleted by debt.  

Finally, make sure you have a few months’ expenses left in the bank after you put your savings into any investment. You don’t want to find yourself in the position of not being able to support yourself if your income stream stalls.

More reading

• How I’d aim to generate a growing passive income from dividend shares
• The Core Lithium (ASX:CXO) share price is up 21% in just one week
• Wilson Asset Management thinks these 2 small cap ASX shares are a buy
• 2 quality ASX dividend shares to buy today
• 2 of the best ASX growth shares to buy immediately

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Generating a growing passive income from dividend shares is a realistic goal for most investors.

Buying companies that have affordable dividend payouts as a proportion of profit could indicate they have the scope to raise shareholder payments. Similarly, stocks with impressive profit forecasts may be able to raise their dividends at a relatively fast pace.

Through buying a diverse range of such companies, it could be possible to build a strong income portfolio in a low-interest-rate environment.

Buying shares with low payout ratios

A company’s dividend payout ratio can provide guidance on its passive income prospects. The ratio is calculated by dividing dividends paid in the most recent financial year by net profit from the same year. The result is a percentage figure. A figure below 100% shows that the company had headroom when making its most recent dividend payments out of net profit.

Clearly, company profitability can change – especially in the current economic environment. However, businesses with low payout ratios may find it easier to grow their dividends at a fast pace than those companies that have higher payout ratios. They may be less reliant on rising profits to fund dividend growth. As such, they could be a more promising means of obtaining a rising passive income in the coming years.

Earnings growth can catalyse a company’s passive income

Companies that have attractive earnings growth prospects may also offer a higher chance of providing a rising passive income. For example, two companies with the same payout ratios may have very different financial outlooks due to industry conditions and their strategies. The stock with a more upbeat operating outlook may find it easier to raise dividends without compromising the affordability of its shareholder payouts.

Of course, assessing the profit potential of any business is a known unknown. It’s especially difficult at the present time to judge whether a company has the scope to raise profitability. However, by focusing on the track record of profit growth for a specific stock versus its peers, it may be possible to deduce whether it has a competitive advantage. This may indicate that it is able to offer more resilient sales growth, higher margins and a rising passive income in the long run.

Buying dividend shares today

The uncertain economic outlook makes it more important than ever to diversify among a range of dividend shares when seeking to make a passive income. Otherwise, an investor may be too reliant on a small number of holdings for their income.

Even after the stock market’s rally since the 2020 stock market crash, a number of companies appear to be trading on low valuations given their long-term dividend prospects. As such, there seem to be opportunities to build a diverse income portfolio that can provide strong growth in a low-interest-rate environment.

More reading

• The Core Lithium (ASX:CXO) share price is up 21% in just one week
• Wilson Asset Management thinks these 2 small cap ASX shares are a buy
• 2 quality ASX dividend shares to buy today
• 2 of the best ASX growth shares to buy immediately
• 2 ASX 200 shares that keep growing the dividend every year

Motley Fool contributor Peter Stephens 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 Core Lithium Ltd (ASX: CXO) share price has been a very strong performer in recent trading sessions.

In fact, since this time last week, the lithium company’s shares have rallied an impressive 21%.

This means the Core Lithium share price is now up a remarkable 1,000% over the last 12 months.

Why is the Core Lithium share price racing higher this week?

Investors have been scrambling to buy Core Lithium shares this week following a rise in lithium prices to two-year highs and the release of a positive announcement.

In respect to the latter, on Monday the company revealed that its Finniss Lithium Project near Darwin has been awarded Major Project Status (MPS) by the Hon Karen Andrews MP.

According to the release, MPS is the Federal Government’s recognition of the strategic significance of a project to Australia. It provides companies with extra support from the Major Projects Facilitation Agency. This includes a single-entry point for Australian Government approvals, project support, and coordination with state and territory approvals.

Management believes the award of MPS, which carries a three-year period, represents yet another major milestone in its path towards bringing this world-class lithium project into production.

What’s next?

There are a number of potential catalysts on the horizon that could make or break the Core Lithium share price.

The main one is of course the updated Definitive Feasibility Study (DFS) on the Lithium Project, which is due in the first half of 2021. Once that is complete, the company will make its final investment decision on the project.

If all goes to plan, Core Lithium is on track to commence construction at the Finniss Project before the end of the year.

Core Lithium’s Managing Director, Stephen Biggins, commented: “The award of Major Project Status for our flagship Finniss Lithium Project is another major milestone for both the company and the Federal Government, as we strive to enter the construction phase in 2021, subject to a Final Investment Decision.”

“When in production, the Finniss Lithium Project will be the first Australian lithium-producing mine outside of Western Australia, with our proximity to Darwin Port – the country’s nearest port to Asia – serving as a direct route for our lithium to be processed and delivered to end users worldwide.”

“This opens up a pathway for a critical minerals hub to be established in Northern Australia, along with the potential for significant associated local modern manufacturing opportunities.”

Given the potential of the project, it isn’t at all surprising to see the Core Lithium share price flying high this week. Shareholders will no doubt be hoping for more of the same in the coming months as things progress.

More reading

• Core Lithium (ASX:CXO) share price climbs on government award
• The Core Lithium (ASX:CXO) share price slips today

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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Respected fund manager Wilson Asset Management (WAM) has recently identified two small cap ASX shares that it owns in its portfolio.

WAM operates several listed investment companies (LICs). Some focus on larger companies like WAM Leaders Ltd (ASX: WLE) and WAM Capital Limited (ASX: WAM).

There’s also one called WAM Microcap Limited (ASX: WMI) which targets small cap ASX shares with a market capitalisation under $300 million at the time of acquisition.

WAM says WAM Microcap targets the most exciting undervalued growth opportunities in the Australian microcap market.

The WAM Microcap portfolio has delivered gross returns (that’s before fees, expenses and taxes) of 24.7% per annum since inception in June 2017, which is superior to the S&P/ASX Small Ordinaries Accumulation Index average return of 10.5%.

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

Atomos Ltd (ASX: AMS)

Atomos is a business that provides digital imaging creation tools for video professionals. WAM explained that Atomos now creates 4K and HD Apple ProRes monitor-recorders, using by video professionals for content creation with lower production costs.

The fund manager pointed to its strongest six months in history, with $32.8 million in sales and $3 million of earnings before interest, tax, depreciation and amortisation (EBITDA) – this was a 210% increase year on year.

WAM was also impressed by the significant cash flow improvement which was growth of 133% to $4.3 million.

The fund manager said that the small cap ASX share has benefited from the large increase in video usage and production during the COVID-19 pandemic across the world.

Atomos is well placed to scale with $23.3 million of cash on its balance sheet and access to an undrawn $5 million working capital facility, according to WAM Microcap.

Universal Store Holdings Ltd (ASX: UNI)

The fund manager also likes Universal store, which was only listed a few months ago.

Universal Store has 65 casual apparel stores across Australia and New Zealand. Its main target audience is the 16 to 35 year old age bracket.

WAM explained that Universal Store sells a selected range of third party branded products – this makes up around 70% of revenue, it also has a range of private label products.

Just like plenty of other businesses, particularly in the retail space, Universal Store reported a record six month result in its FY21 half-year report. It made $31.5 million of underlying earnings before interest and tax (EBIT) – this was growth of 69%. This beat the guidance that was given in January 2021 of a range of $30 million to $31 million.

A key part of that growth was the online sales, which grew by 128% and represented 12% of the overall total thanks to options like ‘ship from store’ and click and collect.

With the company making a record result, it decided to repay its jobkeeper payments of $3 million.

In the second half of FY21, the small cap ASX share is expecting to open three new stores. It’s looking to open more than 100 stores over time.

WAM Microcap is positive on the outlook for growth. It has a good net cash balance sheet of $22.5 million, with plans for expanding its private label brands and a disciplined pricing and promotional strategy.

More reading

• 3 small cap ASX shares to watch in 2021
• 4 exciting small cap ASX shares to watch
• 2 exciting small cap ASX shares to watch
• Why Flight Centre, Life360, Nanosonics, & Universal Store are racing higher
• Why the Universal Store (ASX:UNI) share price is up 6% to a record high

Tristan Harrison owns shares of WAM MICRO FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Atomos Ltd. The Motley Fool Australia has recommended Atomos Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Are you looking to boost your income portfolio with some quality ASX dividend shares? Then you might want to consider the ones listed below.

Here’s what you need to know about these ASX dividend shares:

Accent Group Ltd (ASX: AX1)

The name Accent may not be familiar, but I bet readers will know many of this footwear retailer’s store brands. Accent is the company behind the likes of HYPEDC, Platypus, Sneaker Lab, Stylerunner, and The Athlete’s Foot.

Its stores and their online businesses have been booming over the last 12 months despite the pandemic. This culminated in Accent delivering a strong half year result last month. It revealed a 6.6% increase in total sales to $541.3 million and a massive 57.3% lift in net profit after tax to $52.8 million.

The good news is that the second half started strongly, putting Accent in a position to deliver a bumper full year profit result in August.

Analysts at Bell Potter are positive on the company and have a buy rating and $2.65 price target on its shares. The broker is also forecasting an 11.9 cents per share dividend in FY 2021. Based on the current Accent share price, this will mean a fully franked 5.1% yield.

Coles Group Ltd (ASX: COL)

Another company that has been performing very strongly over the last 12 months is Coles. The supermarket operator has benefited greatly from a shift in consumer behaviour caused by the pandemic. 

However, with the company now cycling the elevated sales period from a year earlier, its second half performance is not expected to be as strong as the first. In fact, management has even warned that sales could decline during the half. This has put pressure on the Coles share price, bringing it down to a level which many brokers believe is very attractive.

One of those is Goldman Sachs. Its analysts have a buy rating and $20.70 price target on its shares currently. The broker remains positive on its medium term outlook thanks to its strong market position, Refreshed Strategy, and focus on automation.

Goldman is forecasting a 62 cents per share dividend in FY 2021. Based on the current Coles share price, this represents a fully franked 4% yield.

More reading

• Why the Coles (ASX:COL) share price is still down 15% in 2021
• Got money to invest for dividends? Here are 2 ASX shares
• 2 ASX dividend shares to buy with yields above 4%
• ASX 200 Weekly Wrap: Calm restored to the ASX 200
• Leading brokers name 3 ASX dividend shares to buy

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET. The Motley Fool Australia has recommended Accent Group. 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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Due to recent pullbacks in the share prices of a number of growth shares, now could be an opportune time to consider making some new additions to your portfolio.

But which ASX growth shares should you buy? Here are two which could be in the buy zone:

Altium Limited (ASX: ALU)

The first ASX growth share to look at is Altium. It is an electronic design software provider best-known for its Altium Designer and Altium 365 platforms. It also has the Octopart electronic parts search engine business and the NEXUS design collaboration platform supporting the core business.

These businesses look well-positioned for growth over the long term thanks to the rapidly growing internet of things and artificial intelligence markets. These markets are underpinning an explosion in electronic devices globally, which is leading to increased demand for Altium’s offering.  

One broker that is positive on the company’s future is UBS. Last month the broker upgraded Altium’s shares to a buy rating with a $34.00 price target. This compares to the latest Altium share price of $26.72.

Xero Limited (ASX: XRO)

Another ASX growth share to consider is Xero. It is a leading provider of a cloud-based business and accounting solution to small and medium sized businesses globally.

Xero has been growing strongly over the last few years and looks well-positioned to continue the trend in the years to come. Particularly given recent acquisitions, which are strengthening its offering and positioning it for growth. One of those was the Planday acquisition that was announced earlier this month. Xero will pay up to $284.6 million for the workforce management platform.

In addition to this, the company looks well-placed for long term growth thanks to its international expansion, the shift to the cloud, and the monetisation of its app ecosystem.

The latter is something Goldman Sachs is particularly positive on. It believes that it could provide it with a multi-decade runway for strong growth if management can successfully monetise its app ecosystem.

Goldman has a buy rating and $157.00 price target on its shares. This compares to the current Xero share price of $117.67.

More reading

• ASX 200 jumps, Pointsbet reveals acquisition, Metcash drops
• ASX 200 up 0.8%: Metcash update, tech shares rebound, PointsBet acquisition
• 5 things to watch on the ASX 200 on Tuesday
• ASX 200 down 0.1%: Afterpay sinks, Evolution announces acquisition
• The Altium (ASX:ALU) share price is nearing its 52-week low

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia owns shares of Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The two S&P/ASX 200 Index (ASX: XJO) shares in this article have been growing their dividends every year to shareholders for over a decade.

It’s quite rare to find an ASX 200 share that has a dividend growth record going back over a decade. The GFC ended a number of dividend growth records, including the one belonging to Ramsay Health Care Limited (ASX: RHC).

The business with the longest dividend growth record in the ASX 200 is Washington H. Soul Pattinson and Co. Ltd (ASX: SOL).

But this article is about these two ASX 200 dividend growth shares:

Domino’s Pizza Enterprises Ltd. (ASX: DMP)

Domino’s actually has a dividend growth streak going back to the GFC. Since then the pizza business has become a global fast food powerhouse.

In the latest result, being the FY21 half-year report, it reported it made $1.84 billion of network sales (up 16.5%) and online sales grew by 25.4% to $1.42 billion.

At the end of the half, it had grown its store count to almost 2,800. Over the next decade or so it’s looking to grow that store count to around 5,550. Europe will account for around half of that total, with the Japanese store target goal being 1,500 and ANZ making up the rest.

The ASX 200 share is still forecasting solid medium-term growth. Over the next three to five years it thinks that the annual same store sales could grow by 3% to 6% per annum, with an outlook for annual organic new store additions of between 7% to 9% per annum.

Japan is a region that the company is “very confident of ongoing expansion”. In the FY21 half-year result it saw online sales growth of 56.6%, network sales growth of 42.6% and same store sales (SSS) growth of 36.4%.

Overall, Domino’s half-year net profit grew 32.8% and free cashflow went up 50.3%, funding a 32.5% increase to the dividend.

APA Group (ASX: APA)

APA’s distribution growth record actually extends back before the GFC. It’s one of the longest records on the ASX.

This ASX 200 share is a major Australian energy infrastructure business that owns and/or manages and operates a portfolio of assets worth around $22 billion. It has 15,000 kilometres of natural gas pipelines that connect sources of supply and markets across mainland Australia. It connects 1.4 million Australian homes and businesses to natural gas, supplying around half of the nation’s usage.

The business also has investments in a number of other energy infrastructure assets such as wind farms, solar farms, gas storage, gas processing and gas power stations.

APA continues to look for new investments that can grow its operating cashflow, which is what funds the distribution to shareholders. It’s looking to expand into high growth infrastructure markets. It said it will invest in contracted and regulated energy infrastructure (gas, electricity and renewables) in Australia and North America.

The ASX 200 dividend share has also established its ‘pathfinder program’ to explore a range of new energy technologies.

It’s expecting to organically spend more than $1 billion over FY21 to FY23, including building the new $460 million Northern Goldfields Interconnect and $38 million Gruyere Hybrid Energy Microgrid.

APA continues to hunt for opportunities in the US, but factors like COVID-19 and the US federal election resulted in a number of opportunities being put on hold in 2020. More activity is expected in FY21.

In the FY21 half-year result APA grew the distribution by 4.3% to 24 cents per security, with guidance for the full year distribution to by 51 cents – a 2% total increase. This equates to a forward distribution yield of 5.2%.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Sneaky way ASX company can boost share price by 7%
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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 Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of APA Group. The Motley Fool Australia has recommended Dominos Pizza Enterprises Limited and Ramsay Health Care 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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