The Sequoia Financial Group Ltd (ASX: SEQ) share price has jumped almost 5% in today’s trading following the financial services company’s annual general meeting (AGM). Sequoia shares are currently trading at 44 cents, up 4.76%.

What did Sequoia report today?

Sequoia  is a financial services company offering financial planning, stock broking, and accounting to both retail and wholesale clients. The company reported that it more than tripled its earnings in FY20.

It says that despite enormous changes in the industry post-Hayne Report (which resulted in large institutions abandoning the financial planning industry altogether), it remains bullish and has plans to add 600 advisers to its roster. 

Sequoia also reported that it expects to see revenue increase to above $100 million in FY21, operating profit to increase by 25% to $6 million, and that it is working towards increasing the dividend payout ratio from 25% to 65% over the next 4 years. The company says it is currently tracking ahead of this budget.

In today’s AGM announcement, Sequoia chief executive Garry Crole indicated he believes there will continue to be new entrants into the financial planning sector, however he thinks that a full recovery will not occur before 2024.

Major financial highlights

Sequoia announced the following metrics for FY20:

• revenue in FY20 of $84.5 million, an increase of almost 2% over 2019 results.
• earnings before interest, tax, depreciation, and amortisation (EBITDA) of $4.8 million, a significant increase of 336% 
• net profit after tax (NPAT) of $1.9 million, compared to a loss of $1 million in 2019
• a dividend of 40 cents, or 25% of NPAT. The company did not pay a dividend in 2019.

How has the Sequoia share price performed in 2020?

The Sequoia share price has had a tremendous year in 2020, almost doubling in value on the back of strong results. Its current share price of 44 cents gives it a market cap of $54 million.

More reading

• Why ASX bank share dividends might be surging soon
• Here’s why GUD (ASX:GUD) is acquiring this AMA (ASX:AMA) business for $70m
• China is a much bigger threat to the ASX bull run than COVID
• Another major shakeup for Unibail Rodamco Westfield (ASX:URW) shareholders
• Why the Regional Express (ASX:REX) share price is rising today

Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The AMA Group Ltd (ASX: AMA) share price is pushing higher on Thursday after announcing the divestment of its ACAD business to GUD Holdings Limited (ASX: GUD).

At the time of writing, the AMA share price is up 2% to 84 cents, whereas the GUD share price is in a trading halt.

What was announced?

This morning the two companies revealed that they have entered into a $70 million agreement for AMA’s ACAD business, excluding the ACM Auto Parts and Fluiddrive businesses. This figure remains subject to customary purchase price adjustments and capex adjustments.

AMA revealed that its board has been reviewing its strategic objectives to determine its optimal focus.

And while it notes that the ACAD business is a strong well performing business, it was determined that a focus on the Panel Repairs sector would provide greater opportunities for investment and growth for shareholders.

AMA’s management advised that the proceeds of the sale will be used to retire debt and set it up for continued growth in its core Panel Repairs operations.

For GUD, it notes that the acquisition is in line with its growth strategy. This is particularly the case in respect to securing new customers and categories through disciplined acquisitions.

After funding costs, the acquired businesses are expected to make a positive contribution to GUD’s earnings. Management is forecasting the acquisition to be mid-single-digit pro forma FY 2021 earnings per share accretive, pre-synergies.

GUD’s Managing Director and Chief Executive Officer, Graeme Whickman, commented: “The acquisition of these businesses is highly complementary to GUD’s automotive business and provides strategic diversification across products and customer channels, along with increased exposure to fast growing pick-up truck and SUV vehicle segments.”

“We are excited by the opportunity to bring GUD’s strong customer focus and sales ethos to what are well managed and established businesses with impressive product development and manufacturing capabilities,” he added.

Equity raising.

In order to fund the deal, GUD has launched an equity raising which aims to raise a total of $70 million. This comprises a fully underwritten $55 million institutional placement and a non-underwritten $15 million share purchase plan.

The institutional placement has an underwritten floor price of $10.75 per share, with the final price to be determined via a bookbuild. This floor price represents a 9.1% discount to its last close price.

More reading

• These could be the next ASX stocks to unlock value by selling assets
• 5 things to watch on the ASX 200 on Tuesday
• 5 ASX 200 shares that just received share price upgrades

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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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ASX bulls have been hanging out for any piece of good news regarding a vaccine for COVID‐19, but it’s China should be keeping a wary eye out on.

Just as you think things couldn’t get any worse between Australia and our largest trading partner, the relationship just took a turn for the worse.

Prime Minister Scott Morrison defiantly stated that Australia won’t compromise on its sovereignty and security as China warned against making the Asian giant an enemy, reported Bloomberg.

China-Australia spat poses key risk for ASX investors

Australian business leaders who have been urging the Morrison government to tone down on the fiery rhetoric and offer gestures towards reconciliation will be disappointed.

The diplomatic chest beatings have not only gotten louder, but the relationship is likely to get worse before getting better.

The breakdown in Sino-Australia relations is putting the 43% S&P/ASX 200 Index (Index:^AXJO) bounce back from the COVID market meltdown in March at risk!

China is bigger than COVID

While its conceivable that the ASX can continue to climb even if it takes the world longer to get on top of the pandemic, it’s hard to imagine the bull run staying intact if China bans even more Aussie imports.

Chinese authorities have already moved to ban or restrict a range of Aussie goods entering that market. This includes copper, wine, barley, beef and timber, just to name a few.

The worry is that the black list will expand significantly and include iron ore. Not only is this Australia’s top export earner, China is really the only customer on the other side of the equation.

Brazil stepping up to the plate

This could come as Brazil’s exports of the commodity recovers from the COVID fallout. The rebound is already happening.

The latest data showed that Brazilian iron ore shipments increased by 64% week-on-week, or 7% year-on-year. This is the second highest level of the year of 8.1 million tonnes, according to UBS.

“Overall, Brazilian iron ore shipments have sequentially increased since the first quarter,” said the broker in a note issued on Monday.

“This explains the ongoing uptick in Chinese port inventories of Brazilian iron ore.”

ASX stocks at risk

Our mining giants like the BHP Group Ltd (ASX: BHP) share price and Rio Tinto Limited (ASX: RIO) share price have a lot of lose in the China-Australia tiff.

They aren’t the only ones with an over reliance on the Chinese giant. The Treasury Wine Estates Ltd (ASX: TWE) share price, A2 Milk Company Ltd (ASX: A2M) share price and Blackmores Limited (ASX: BKL) share price have a lot riding on China.

Hopefully both sides will find a much needed circuit breaker for worsening geopolitical tensions.

More reading

• Global fund managers are bullish on these 3 things
• Why a2 Milk, Crown, Immutep, & Suncorp shares are dropping lower
• Why the Aventus (ASX:AVN) share price is rising today
• ASX 200 down 0.3%: Altium FY 2021 guidance, Crown drops, insurance shares sink
• Can Magellan (ASX:MFG) prosper in a market dominated by Macquarie (ASX:MQG)?

Motley Fool contributor Brendon Lau owns shares of BHP Billiton Limited and Rio Tinto Ltd. Connect with me on Twitter @brenlau.

The Motley Fool Australia owns shares of and has recommended A2 Milk, Blackmores Limited, and Treasury Wine Estates Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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ASX bulls have been hanging out for any piece of good news regarding a vaccine for COVID‐19, but it’s China should be keeping a wary eye out on.

Just as you think things couldn’t get any worse between Australia and our largest trading partner, the relationship just took a turn for the worse.

Prime Minister Scott Morrison defiantly stated that Australia won’t compromise on its sovereignty and security as China warned against making the Asian giant an enemy, reported Bloomberg.

China-Australia spat poses key risk for ASX investors

Australian business leaders who have been urging the Morrison government to tone down on the fiery rhetoric and offer gestures towards reconciliation will be disappointed.

The diplomatic chest beatings have not only gotten louder, but the relationship is likely to get worse before getting better.

The breakdown in Sino-Australia relations is putting the 43% S&P/ASX 200 Index (Index:^AXJO) bounce back from the COVID market meltdown in March at risk!

China is bigger than COVID

While its conceivable that the ASX can continue to climb even if it takes the world longer to get on top of the pandemic, it’s hard to imagine the bull run staying intact if China bans even more Aussie imports.

Chinese authorities have already moved to ban or restrict a range of Aussie goods entering that market. This includes copper, wine, barley, beef and timber, just to name a few.

The worry is that the black list will expand significantly and include iron ore. Not only is this Australia’s top export earner, China is really the only customer on the other side of the equation.

Brazil stepping up to the plate

This could come as Brazil’s exports of the commodity recovers from the COVID fallout. The rebound is already happening.

The latest data showed that Brazilian iron ore shipments increased by 64% week-on-week, or 7% year-on-year. This is the second highest level of the year of 8.1 million tonnes, according to UBS.

“Overall, Brazilian iron ore shipments have sequentially increased since the first quarter,” said the broker in a note issued on Monday.

“This explains the ongoing uptick in Chinese port inventories of Brazilian iron ore.”

ASX stocks at risk

Our mining giants like the BHP Group Ltd (ASX: BHP) share price and Rio Tinto Limited (ASX: RIO) share price have a lot of lose in the China-Australia tiff.

They aren’t the only ones with an over reliance on the Chinese giant. The Treasury Wine Estates Ltd (ASX: TWE) share price, A2 Milk Company Ltd (ASX: A2M) share price and Blackmores Limited (ASX: BKL) share price have a lot riding on China.

Hopefully both sides will find a much needed circuit breaker for worsening geopolitical tensions.

More reading

• Global fund managers are bullish on these 3 things
• Why a2 Milk, Crown, Immutep, & Suncorp shares are dropping lower
• Why the Aventus (ASX:AVN) share price is rising today
• ASX 200 down 0.3%: Altium FY 2021 guidance, Crown drops, insurance shares sink
• Can Magellan (ASX:MFG) prosper in a market dominated by Macquarie (ASX:MQG)?

Motley Fool contributor Brendon Lau owns shares of BHP Billiton Limited and Rio Tinto Ltd. Connect with me on Twitter @brenlau.

The Motley Fool Australia owns shares of and has recommended A2 Milk, Blackmores Limited, and Treasury Wine Estates Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It’s been a turbulent year for Unibail Rodamco Westfield (ASX: URW) shareholders. At the end of October, the Unibail share price was down 74% for the 2020 calendar year. That’s rough, even for a retail landlord operating in today’s pandemic battered times.

Year to date, however, the Unibail share price is now ‘only’ down 59%. This comes after a major share price rally last week saw shares gain 62% so far in November.

Much of that rally was owed to shareholders voting to reject the supervisory board’s 3.5 billion euro (AU$5.7 billion) capital raising, part of the company’s ‘reset’ plan to pay off its burdensome debt load.

The defeat of the capital raising proposal saw chair of the board, Colin Dyer, resign earlier this week. Leon Bressler, one of the activist investors stringently opposed to the capital raise, was appointed as the new chair.

With so much managerial shakeup, Christophe Cuvillier, Unibail’s CEO, was left in a tenuous position.

Indeed, in an announcement released today, Unibail confirmed that Cuvillier has been replaced by Jean-Marie Tritant, with the transition to take place on 1 January 2021.

What did Unibail’s management say?

Commenting on the shakeup of CEOs, Leon Bressler said:

A transition phase is beginning for URW. I am delighted that Christophe Cuvillier has agreed to lead it for the Group. His long experience as CEO, particularly during the ongoing health and economic crisis, will be very valuable. I am convinced that Jean-Marie will lead the company with great success.

Jean-Marie Tritant added:

This appointment is for me an immense honour and I fully appreciate the trust that has been placed in me. URW is an exceptional company that I joined more than 20 years ago and is a leader in its sector. I know that I can count on the Group’s teams, their talent and their energy. Thanks to them, we will be able to build on the Group’s future successes.

I would like to commend the tireless work accomplished by Christophe Cuvillier at the helm of URW since 2013 and his commitment to ensure a smooth transition as from today.

The Unibail share price is down 1.12% in early afternoon trading.

More reading

• Why the Unibail Rodamco Westfield (ASX:URW) share price is up 63% in 5 days
• ASX 200 up 0.35%: Moderna vaccine success, Afterpay update, Westpac upgraded
• ASX 200 up 1.2%: Afterpay ASIC response, Elders result, CSL vaccine facility
• ASX 200 Weekly Wrap: ASX continues to hit post-COVID highs
• These were the best performing ASX 200 shares last week

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Regional Express Holdings Ltd (ASX: REX) share price is on the rise today after the company announced it has signed an agreement with PAG Regulus Holdings on funding for its domestic operations. At the time of writing, the Regional Express share price is trading at $1.51, up 2.7%.

What’s moving the Rex share price?

The Rex share price is edging higher on the company’s news that Asia-Pacific investment firm, PAG, will provide funds of up to $150 million. The injection of capital will support the launch of Regional Express’ domestic jet operations scheduled to commence on 1 March.

The investment will comprise of first ranking senior secured convertible notes. An initial funding tranche of $50 million will be drawn down towards early January 2021. Furthermore, the remaining balance will be available over the following 3 years.

Subject to shareholder approval, Regional Express will hold a vote on the deal at its AGM at the start of the new year. In addition, the Foreign Investment Review Board will also need to approve the proposed funding.

If permitted, and upon completion, PAG will nominate two of its directors to the Regional Express board.

What did management say?

Regional Express chair, Mr Lim Kim Hai, spoke about the partnership, saying:

PAG is a well-respected and highly successful investment group which manages more than USD40 billion on behalf of major global institutional investors.

Preparations for our domestic operations are proceeding to plan with our first Boeing 737 800NG aircraft delivered on 5 November 2020. Our crew will carry out training on the aircraft over the next 3 weeks before the CASA proving flight on 2 December 2020. We anticipate CASA approval shortly after. Five other similar aircraft will be delivered from next month to March 2021.

Once the initial services are well established, we aim to progressively grow our fleet to cover all the major cities in Australia.

Adding to Mr Hai’s comments, PAG chair and CEO, Mr Weijan Shan said:

We have been impressed with Rex’s established track record in regional aviation in Australia. Rex’s plan to provide Australia’s major cities with affordable and high-quality air travel is consistent with their disciplined and focused approach over the past 18 years. PAG is excited to partner with Rex on this expansion.

What’s been happening with the Regional Express share price

The Regional Express share price has come back strongly after being hit hard by COVID-19 lockdowns. Shares in the airline dropped to as low as 37 cents in March, before recovering to levels seen in 2019.

Regional Express considers itself as a competitive passenger airline for domestic routes, going up against Qantas Airways Limited‘s (ASX: QAN) QantasLink and Jetstar as well as Virgin Australia Holdings Ltd (ASX: VAH).

It’s worth noting that the Regional Express share price is now just 10% below its all-time high of $1.68 which it achieved back in October 2018.

More reading

• Global fund managers are bullish on these 3 things
• It’s official: Like it or not, millions will own Tesla stock soon
• SEEK (ASX:SEK) share price flat despite FY 2021 guidance upgrade
• Get real: 2 ASX dividend shares to boost your income stream
• Why a2 Milk, Crown, Immutep, & Suncorp shares are dropping lower

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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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With the S&P/ASX 200 Index (ASX: XJO) going above 6,500 points this week for the first time since February, ASX investors certainly have something to be happy about. The ASX 200 is now well and truly out of the ‘rut’ it was stuck in between June and October. By ‘rut’, I’m referring to the fact that the ASX 200 seemed to never get too far above, or below, the 6,000 point threshold for those 4 months.

Now the ASX 200 is seemingly pushing to greater heights this week. So I’m sure many an investor is wondering ‘where to next?’ for ASX shares, given we’re barrelling towards a new year.

Where are fundies investing for 2021?

Well, reporting in the Australian Financial Review (AFR) today sheds some light on this question. The AFR is covering the Bank of America’s monthly survey of more than 200 global fund managers (with a collective $784 billion in assets under management) for their views on how to position a share portfolio going forward. And the view is reportedly almost unanimous: “It’s time to go long or go home”.

The AFR reports that the fundies aren’t too concerned over the recent ‘second/third waves’ of coronavirus cases around the world. Although they do note it’s a risk. Instead, managers have “pulled forward their expectations for a credible vaccine to be announced from next February to next January. And are piling into trades that will benefit from the reopening of economies”. Bank of America says the “US election outcome and the announcement of promising results from vaccine trials” are behind the “switch in the psyche of investors”.

And that is resulting in cash positions being whittled to “15-year lows”. Where is this cash going? According to the report, there are 3 areas which are overwhelmingly popular amongst the fund managers: emerging markets, oil, and the S&P 500 Index (INDEXSP: .INX).

A triumvirate of opportunity?

Emerging markets refer to the economies (and stock exchanges) of countries outside the ‘advanced economies’ of the world. Specifically such as the United States, United Kingdom, Europe, Japan, Canada and Australia. As an example, a typical exchange-traded fund (ETF) covering emerging markets is the iShares MSCI Emerging Markets ETF (ASX: IEM). This ETF is weighted 40.56% to China, 12.67% to Taiwan, 12.52% to South Korea, 8% to India and 4.88% to Brazil.

Oil is an interesting choice as well. Oil prices and companies have been decimated in 2020 as a result of the pandemic. Many are sitting at multi-year share price lows. Take Woodside Petroleum Ltd (ASX: WPL). It’s currently trading at $21.77 after falling as low as $14.93 earlier in the year. Before 2020, you’d have to go back to 2005 to find similar pricing. It’s a similar story with global oil giants like Exxon Mobil Corporation (NYSE: XOM).

Finally, the S&P 500 is the flagship index for US shares. Thus, a bet on the S&P 500 could be construed as a bet on the US shares, especially the larger companies like Amazon.com Inc (NASDAQ: AMZN), Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL) and Apple Inc (NASDAQ: AAPL).

More reading

• Why the Aventus (ASX:AVN) share price is rising today
• ASX 200 down 0.3%: Altium FY 2021 guidance, Crown drops, insurance shares sink
• 5 things to watch on the ASX 200 on Thursday
• ASX 200 rises again on Wednesday
• 2 ASX shares making all-time highs today

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Alphabet (A shares). The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, and Apple and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, and Apple. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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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.

A lot of people have strong feelings about electric vehicle pioneer Tesla Inc (NASDAQ: TSLA), both as a company and as an investment. The Elon Musk-led company has generated plenty of controversy over its history, but its skyrocketing share price has left its automaker peers in the dust.

The stock’s amazing run has delivered 550% returns in just the past year, and more than 9,500% gains in Tesla’s roughly 10 years as a publicly traded company. That has resulted in a share price that many investors think is far too high to pay.

Yet even if you believe that Tesla isn’t a buy right now, you might still end up acquiring some of its stock soon. That’s because the company that manages one of the most-followed stock indexes in the world just decided to add Tesla to it.

Tesla is joining the S&P 500

S&P Dow Jones Indices is the entity behind the S&P 500 Index (INDEXSP: .INX). The popular benchmark contains roughly 500 of the largest and most influential US companies, but its membership is not static. S&P Dow Jones often adds new components and removes old ones to reflect changing factors like market capitalisation, takeover activity, and other corporate events.

For a long time, Tesla wasn’t eligible to be in the S&P 500 despite its large market cap. Many of the formal requirements for inclusion, such as a minimum share price and adequate share float, weren’t a problem for the electric automaker. The requirement that it took the longest for Tesla to meet was that it had to be profitable for four consecutive quarters and over a 12-month period.

Yet even when that happened earlier in 2020, S&P Dow Jones didn’t immediately pull the trigger. Some pundits cited issues with the quality of Tesla’s profits, boosted as they are by regulatory credits. Others pointed to the complexity of adding a company to the S&P 500 that was already as large as Tesla was.

S&P Dow Jones ended the speculation on Monday when it said it would add Tesla to the S&P 500, effective 21 December.

A couple of unusual things about Tesla’s addition to the S&P 500

However, the announcement wasn’t typical in a couple of respects. First, S&P Dow Jones didn’t announce which company Tesla will replace. It’s putting that decision off until we’re closer to the late-December rebalance date.

Also, S&P Dow Jones reached out to the investment community for guidance on precisely how to add Tesla. Given the company’s size – its market cap is above $420 billion – this move has the potential to cause a massive disruption to index-related trading. The index manager suggested the possibility of adding Tesla incrementally, possibly incorporating two separate dates on which portions of the final allocation would get put in the S&P 500.

You would’ve been better off buying earlier

The irony here is that index-fund investors who scoffed at buying Tesla earlier in 2020 are going to end up paying much higher prices for the shares. At the beginning of the year, you could’ve bought Tesla shares at a split-adjusted price of less than $100. As recently as June, Tesla stock was trading under $200 per share. But on Monday, Tesla closed above $400 per share – and it jumped more than $50 per share on the S&P 500 news.

However, index funds have no choice. If they want to track the S&P 500, they will need to own Tesla shares – regardless of the premium they’ll be paying to acquire them.

It’s not the end of the world

This isn’t the first time investors have had to accept index-fund additions they didn’t like. It happened with Facebook (NASDAQ: FB), but in hindsight, index investors have to be pleased with the returns the social media giant has generated for their funds.

Moreover, even at Tesla’s massive current size, its impact on your S&P 500 index fund won’t be all that big. Tesla will likely end up with a weighting of slightly over 1% in most of those funds. That will make it the biggest new addition ever – but it still doesn’t amount to a huge exposure to the automaker’s stock.

Tesla will continue to generate controversy, and it’s highly possible that the S&P addition will be the next event that triggers a massive feeding frenzy for the electric vehicle pioneer’s shares. In the end, though, what will matter is whether Tesla can convert on its amazing potential and expand into a business that justifies its industry-leading valuation.

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

More reading

• Tesla (NASDAQ:TSLA) share price zooms 8% on S&P 500 news
• Average Aussie needs 22 weeks to earn what Elon Musk does in 5 minutes
• Here are the US shares that CommSec customers are buying
• Tesla Stock Jumps on News It Will Join the S&P 500
• Here are the shares Magellan has been buying recently

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Facebook and Tesla. Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Facebook. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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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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The SEEK Limited (ASX: SEK) share price is trading broadly flat this afternoon after the release of its annual general meeting presentation.

What did SEEK speak about at its annual general meeting?

As well as giving investors a summary of its performance in FY 2020, the company provided an update on current trading conditions and its guidance for the new financial year.

In respect to current trading, SEEK revealed that its performance financial year to date has been far stronger than it was expecting.

According to the release, group revenues are well above the assumptions underlying its illustrative scenario provided with its FY 2020 results.

It notes that the SEEK ANZ, OES, and Zhaopin businesses have all performed well above these assumptions. And while the SEEK Asia is also performing better than expected, it is to a lesser extent compared to the other businesses.

Management notes that this revenue growth has been driven by a mix of rehiring of roles lost during previous months, and growth in some sectors.

The company’s Early Stage Ventures (ESV) segment continues to perform well, which has increased management’s conviction levels to re-invest.

FY 2021 guidance.

Management notes that forecasting remains challenging given the ongoing uncertainty in all markets caused by COVID-19 restrictions, overall business confidence, and FX rates.

Furthermore, its ad volumes have responded quickly to changes in COVID-19 restrictions, both positively and negatively, and yields are also sensitive to the sectors in which activity occurs.

Nevertheless, the company is providing guidance for FY 2021, based on a number of key high level assumptions.

These include COVID-19 restrictions remaining consistent with current conditions across key markets, hiring activity remaining broadly in line with current levels, the usual seasonal fluctuations, and its investment increasing above what was initially assumed to reflect its stronger revenue performance.

Based on this, SEEK is expecting its revenue to be in the order of $1,600 million in FY 2021 and EBITDA to be in the order of $400 million.

This compares to its previous illustrative FY 2021 guidance of revenue of ~$1,470 million and EBITDA of $330 million and FY 2020’s revenue of $1,577.4 million and EBITDA of $414.9 million.

SEEK’s chairman, Graham Goldsmith AO, commented: “As I look out over the coming years, whilst COVID-19 has created near-term economic challenges, this does not fundamentally change our long-term aspirations. I am confident that if our management team, led so ably by CoFounder and CEO Andrew Bassat, continue our long-term focus and execute well, we will unlock large new revenue pools and create significant long-term shareholder value.”

More reading

• 5 things to watch on the ASX 200 on Thursday
• 5 things to watch on the ASX 200 next week
• Why the SEEK (ASX:SEK) share price just hit a record high
• 3 ASX shares targeting huge growth in the 2020s
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Motley Fool contributor James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia has recommended SEEK Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post SEEK (ASX:SEK) share price flat despite FY 2021 guidance upgrade appeared first on Motley Fool Australia.

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Let’s get real here.

If you’re hoping for more income in the year ahead by securing a pay rise, you’ll likely be disappointed.

According to the Australian Bureau of Statistics (ABS), the seasonally adjusted Wage Price Index (WPI) climbed a paltry 0.1% in the September quarter. Year-to-date, the average Australian’s wage has grown by just 1.4%. And that comes as unemployment has snaked up to 6.9%.

But meagre as the wage growth figures are, they don’t tell the whole story. That’s because these are nominal figures, not real. Meaning they don’t take inflation into account.

Excluding volatile items, the annual inflation rate comes in at 1.6%. Meaning real wages are actually going backwards.

So banking on a hefty pay rise to secure more income in 2021 looks to be a long shot. In fact, most of us will be lucky to bring home the same pay cheque, in terms of our real wages, as we earned this year.

Then how about a term deposit?

Though nothing is 100% safe, cash in the bank is about as close as you can get. Especially if you keep your deposits below $250,000 per authorised deposit-taking institution (ADI). That’s the amount the government guarantees to protect depositors via its Financial Claims Scheme (FCS).

Unfortunately, this isn’t 2012, when some term deposits were paying 5% interest and the inflation rate was less than 2%. Meaning your cash in the bank was earning you real returns of some 3% annually.

Current term deposits are broadly quoted around the 0.50% range. But a bit of googling tells me if you shop around you may be able to secure a 0.75% interest rate on a 1-year term deposit, with certain minimal balance requirements.

That’s pretty thin, even in nominal terms. But again, in real (inflation adjusted) terms, your deposit plus interest will be worth less 1 year from now than it is today.

Which brings us to ASX dividend shares. These are companies that pay out cash (or occasionally shares) from their profits to their shareholders.

Sometimes these dividends come partly or wholly franked. That’s when a company has already paid its corporate taxes (generally 30%) on the dividend profits its distributing. You can deduct the corporate tax rate from any taxes you may owe on the dividend payments you receive. If your tax rate is less than the corporate rate, you can even get money back from the ATO.

Very nice…

ASX dividend share #1

The first ASX dividend share (presented in no particular order) you may want to consider to lift your income stream is Brickworks Limited (ASX: BKW).

Brickworks specialises in property, investments, and building products for residential and commercial construction in Australia and the United States. It also has a major holding in Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), which in turn has a significant stake in Brickworks. Brickworks also owns 50% of an industrial property trust with Goodman Group (ASX: GMG).

Importantly, at the current share price, Brickworks pay an annual dividend yield of 3.1%, 100% franked.

It also has a lengthy history of delivering capital gains. Despite shares plunging more 41% during the COVID-19-driven market panic earlier this year, Brickwork’s share price is up 1.2% for the year and 52% from its April lows. That compares to a 2.7% loss for the broader S&P/ASX 200 Index (ASX: XJO).

The Motley Fool’s own Edward Vesely recommended Brickworks in his advisory service, Dividend Investor, on 14 July this year. He cited the company’s diversified exposure to a variety of assets, its long track-record of success, and its 3.7% fully franked dividend yield as reasons to buy.

Since then Brickworks’ share price has gained 16.6%, hence the dividend yield has slipped to 3.1%. Nonetheless, Edward maintains his ‘buy’ recommendation for Brickworks’ shares.

ASX dividend share #2

The second dividend share you may want to consider to boost your income stream is Rural Funds Group (ASX: RFF).

Rural Funds is a real estate investment trust (REIT). It owns a broad portfolio of quality Australian agricultural properties spread across the country. The company has a proven track record of consistent share price growth going back to 2014. Year-to-date Rural Funds’ share price is up 35%.

Importantly, it’s also paid all 4 quarterly dividend payments during this difficult year that’s seen many companies suspend their dividend distributions.

Rural Funds is another one of Edward Vesely’s Dividend Investor recommendations.

In fact, Edward’s recommended it twice, first in August 2017 and again in August 2018. Atop its regular dividend payments, the Rural Funds share price is up 57.3% since his first recommendation and it’s gained 42.7% since the second time he tipped it.

Edward cites Rural Funds’ high quality and well-diversified assets, its proven and well-practiced growth strategy, and its strong balance sheet and reliable cash flows which support an attractive yield as reasons to buy. Rural Funds maintains its ‘buy’ rating in his Dividend Investor service.

At the current price of $2.58 per share, Rural Funds pays an annual dividend yield of 4.3%, unfranked.

More reading

• 2 ASX dividend shares with yields of 4%+
• Leading brokers name 3 ASX shares to sell today
• 3 ASX dividend shares with large yields and consistent payouts
• Why Afterpay, Goodman, MedAdvisor, & PointsBet shares are dropping lower
• These ASX dividend shares offer income investors attractive yields

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Brickworks, RURALFUNDS STAPLED, and Washington H. Soul Pattinson and Company Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Get real: 2 ASX dividend shares to boost your income stream appeared first on Motley Fool Australia.

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