In a year headlined by corporate failures due the coronavirus pandemic, there have been some notable winners on the ASX bourse. Here we recap the top 5 best share price performers for large cap companies in 2020.

Afterpay Ltd (ASX: APT)

The clear winner this year has been the financial sector darling Afterpay, with its share price rising by an incredible 230% in 2020. The company has shown consistent growth every quarter. Its FY20 result shows some impressive numbers including 112% growth in sales to $11.1 billion, 116% growth in active customers, and 72% growth in active merchants. Similar metrics were also reported for 1Q 2021.

Other notable achievements this year have been: adding a savings account to its services in partnership with Westpac Banking Corp (ASX: WBC), and acquiring a European competitor, Pagantis.

Despite those impressive metrics, Afterpay has not generated a net profit. Talks of impending regulation is also hanging over the the buy-now-pay-later segment. 

Nextdc Ltd (ASX:NXT)

In second place this year is the information services provider NextDC, with its share price rising by 93% and reaching an all-time high.  The company is involved in the operation of data centres in Australia and providing on-demand cloud services.

The pandemic and resulting rise in remote work arrangements has created increased demand for NextDC’s services, which explains the stock’s meteoric rise. 

Notable achievements in 2020 have been: acquiring 180 more customers taking its total number to 1,364, and securing a $1.5 billion borrowing arrangement that will reduce its debt servicing costs significantly.

Despite the meteoric rise, the company has not turned over a profit, with its net loss expanding from $9.8 million in 2019 to $45.2 million in 2020. The capital intensive nature of its business in building new data centres will also weigh on its growth.

Saracen Mineral Holdings Limited (ASX: SAR)

Gold miner Saracen has had an astounding year with its share price rising by 70% YTD, as the company continues to capitalise on high gold prices. 

After an impressive FY20, Saracen is also on track to achieve its key FY21 guidance targets  for production and financials after a solid September quarter.  The company has added $98 million to the balance sheet in free cash, adding liquidity to its business.

Earlier this year, Saracen and Northern Star Resources Ltd (ASX: NST) announced that they were set to combine forces under a $16 billion merger of equals. The mega merger would form a top 10 global gold company with target production of 2 million ounces of gold per year.

Fortescue Metals Group Limited (ASX: FMG)

Another mining company that has had a stellar year is Fortescue Metals. The iron ore miner has seen its share price rising by 62% in 2020.

The outstanding share price performance is on the back of its record full year profit in FY20, helped by a surge in iron ore prices as a result of strong demand from China. In FY20, the world’s fourth-biggest iron ore miner reported net profit of $$6.6 billion, a 49% increase from the previous year.

It continued its performance into FY21 as the company recently announced another 5% increase in iron ore shipment to China for the first quarter. The current geopolitical issues could, however, be a major factor in its future growth.

Fortescue’s biggest shareholder Andrew Forrest is Australia’s second richest person.

Domino’s Pizza Enterprises Ltd (ASX: DMP)

Rounding up the top five is Domino’s Pizza. The retail food giant has seen a remarkable 61% rise in its share price in 2020.   

Domino’s Pizza has exclusive master franchise rights for the Domino’s brand in Australia, New Zealand, Belgium, France, The Netherlands, Japan, Germany, Denmark and Luxembourg.

The Domino’s share price reached a new record high of $92.15 earlier this month. The pizza chain operator’s shares have been in demand with investors this year thanks to its strong performance during the pandemic. This led to Domino’s delivering a 12.8% increase in its network sales to $3.27 billion in FY 2020.

The most remarkable metric is that its online sales were $2.4 billion, representing 72% of all sales.

More reading

• 3 reasons the Afterpay (ASX:APT) share price smashed the market in October
• Top brokers name 3 ASX shares to sell next week
• Top brokers name 3 ASX shares to buy next week
• How La Nina will create unexpected ASX stock winners and losers
• How the Saracen (ASX:SAR) share price stoked Kerry Stokes’ multi-billion dollar wealth

Motley Fool contributor Eddy Sunarto has no positions in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Domino’s Pizza Enterprises 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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Up to the end of September, merger and acquisition (M&A) activity for ASX shares was at its lowest point for 17 years. Specifically, announced M&A transaction volumes for 2020 have been almost half the US$88 billion tally seen by 30 September last year, according to data published by Refinitiv. 

For example, in February a takeover of National Storage REIT (ASX: NSR) for $1.9 billion was called off. Just as the $8.8 billion bid for Ampol Ltd (ASX: ALD), then Caltex, was shelved in April due to coronavirus.

Nonetheless, as predicted by the Refinitiv data, the fourth quarter has already seen a definite spike in takeover activity. In fact, there were 2 major bids for large cap ASX shares within 4 days of each other. 

Large Cap ASX Shares

Manufacturing and beverages

Last Monday, Coca-Cola Amatil Ltd (ASX: CCL) acknowledged takeover talks with Coca-Cola European Partners PLC (NYSE: CCEP). However, at least 3 major shareholders have expressed discontent with the offer, even though the board have unanimously supported it. Head of equities at Pendal Group Ltd (ASX: PDL), Crispin Murray has commented:

We don’t feel like this is an offer that is compelling and we don’t see a lot of downside if the deal fell over…It’s a good time to bid when borders are shut and there are no tourists and earnings have been downgraded. The stock could have been trading around mid-$11 – now you’re only looking at a 10% premium on this bid.

His views were reflected by other major shareholders such as investment managers Martin Currie Australia, and Antares Capital. Specifically, they believe the bid is opportunistic, because the ASX share price has fallen due to coronavirus. In addition, various analysts have been critical, citing the offer as a “fair, not full” valuation of the ASX share. Regardless, most agree it will likely get away in the new year. 

Financial Services

Last week AMP Limited (ASX: AMP) announced ongoing talks with US private equity firm, Ares Management Corp Class A (NYSE: ARES). This is supposedly a $6.4 billion non-binding bid at this stage.

However, according to the Australian Financial Review (AFR) several large shareholders have questioned the logic behind the deal, believing a break up of the business is a better option. Simon Mawhinney, chief investment officer of shareholder Allan Gray didn’t believe Ares Management wanted to own a bank, while Hamish Carlisle of Merlon Capital Partners, believes it would be a better option to break up the wealth manager. Meanwhile, the market is waiting to see if any other interested parties will declare their hand.

Future takeovers for ASX shares

Aside from moves by large foreign interests in the large cap arena, there is also something going on with investment funds. In particular, WAM Capital Limited (ASX: WAM) is executing 2 hostile takeovers of smaller funds.

However, of more immediate interest is another potential multi-billion dollar takeover in the S&P/ASX 200 Index (ASX: XJO). Back in September the AFR posted an article implying that the takeover of Ampol Ltd (ASX: ALD) may start again soon. Alimentation Couche-Tard Inc Class chief executive Brian Hannasch emphasised to investors in early September the “significant runway” it saw for M&A, with a focus on US and Asia. Moreover, the Canadian company has since poached Louise Warner, Ampol’s former executive general manager for fuels and infrastructure.

More reading

• Which small cap ASX shares were the best performers in October?
• Buy CBA (ASX:CBA) and this ASX share for their dividends
• These were the 5 best performing ASX shares last week
• 6 major events for ASX shares this week
• ASX 200 Weekly Wrap: ASX 200 has another shocker as US election approaches

Motley Fool contributor Daryl Mather 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 Pro Medicus Limited (ASX: PME) share price was a particularly positive performer in October.

During the month the healthcare technology company’s shares recorded an impressive 22.4% gain.

This compares to a 1.9% gain by the benchmark S&P/ASX 200 Index (ASX: XJO).

Why did Pro Medicus outperform the market?

Investors were fighting to buy Pro Medicus shares last month following the release of an update which revealed a major new contract win.

That contract win was with one of the largest university hospitals in Germany, LMU Klinikum.

According to the release, Pro Medicus has signed a seven-year deal with LMU Klinikum worth a total of A$10 million.

The deal will see its popular Visage 7 technology deployed throughout LMU Klinikum’s radiology and subspecialty imaging departments. This will replace a number of systems from legacy vendors with a single centralised platform from December.

In addition to this, Visage will be used in the hospital’s state of the art operating theatre suite for high definition video documentation and point-of-care ultrasound archival and viewing.

Why is this a big deal?

While a $10 million contract isn’t necessarily a game-changer, it is who the contract is with that has got both the company and investors excited.

Pro Medicus’ Visage Imaging Managing Director, Dr Malte Westerhoff, explained: “We are very excited about this project. LMU Klinikum is a thought leader in making a digital strategy a core principle of their operations. We are confident that our technology and expertise can make a significant contribution to helping LMU Klinikum further enhance efficiency and achieve better patient outcomes.”

Dr Westerhoff also pointed out that multinational imaging equipment vendors have had a stranglehold on this part of the market for a long time, which makes this deal a real milestone.

He added: “Traditionally, large European teaching hospitals like LMU Klinikum have standardised on IT platforms from large, multinational imaging equipment (modality) vendors making this a difficult market to penetrate. So this is a very significant milestone for us in this highly competitive market.”

Is it too late to invest?

While Pro Medicus shares are certainly not cheap, I believe they could still be a great option for buy and hold investors due to its exceptionally strong long term growth potential.

In light of this, I think it is worth considering a small position in a balanced portfolio.

More reading

• I plan to invest heavily in ASX shares next week
• ASX 200 Weekly Wrap: ASX snaps winning streak… just
• These were the best performing ASX 200 shares last week
• Why these 2 ASX growth shares lifted more than 4% yesterday
• Why Dubber, New Hope, Pro Medicus, & Rio Tinto shares are dropping lower

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Pro Medicus Ltd. 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 Reserve Bank of Australia has stepped up its research into a cryptocurrency version of the Australian dollar, announcing a collaboration with 3 major ASX-listed companies on Monday morning.

Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB) and Perpetual Limited (ASX: PPT) will partner with the RBA on the Wholesale Central Bank Digital Currency Research Project.

The program will explore the use of central bank digital currency (CBDC) for transactions between financial institutions.

US software firm ConsenSys will also be involved, lending its expertise on Ethereum-based blockchain technology.

The Motley Fool has contacted CBA, NAB and Perpetual for comment.

What does the RBA want to get out of this?

The end result of the project will be a proof-of-concept in using cryptocurrency in the wholesale market for “the funding, settlement and repayment of a tokenised syndicated loan”.

“With this project, we are aiming to explore the implications of a CBDC for efficiency, risk management and innovation in wholesale financial market transactions,” said RBA assistant governor Michele Bullock.

“While the case for the use of a CBDC in these markets remains an open question, we are pleased to be collaborating with industry partners to explore if there is a future role for a wholesale CBDC in the Australian payments system.”

The project should be completed by the end of the year, with a report published in the first half of 2021.

A crypto-dollar has been years in the making

RBA has toyed with the idea of a digital version of the Australian dollar for several years.

In 2017, a group of Australian fintech startups secretly approached the central bank with the concept.

FlashFX was the first local startup granted a financial services licence to transfer money internationally using distributed ledgers, also known as blockchain technology.

“A government-endorsed digital Australian dollar has the potential to lead to increased trust and certainty, particularly to grow the digital currency marketplace,” FlashFX chief enabling officer Nicolas Steiger said in 2017.

“It would also stop multiple private parties creating a confusing array of ‘Australian dollars’ with no official backing.”

More reading

• Buy CBA (ASX:CBA) and this ASX share for their dividends
• ASX 200 Weekly Wrap: ASX 200 has another shocker as US election approaches
• 3 ASX blue chip shares to buy for dividends
• 5 things to watch on the ASX 200 next week
• RBA will cut rates Tuesday, say 67% of experts

Motley Fool contributor Tony Yoo 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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Small cap ASX shares typically do not move in tandem with the general market. This is due to the market’s size, liquidity and the standalone nature of its speculative businesses. Despite the S&P/ASX 200 Index (ASX: XJO) nosediving in the latter half of October, many small cap ASX shares continued to deliver eyewatering returns. Here are the best performing small cap ASX shares this month. 

1. E2 Metals Ltd (ASX: E2M) 

The E2 Metals share price spiked 200% in October after exceptional gold and silver drill results at its Mia prospect, Conserrat project, located in the Santa Cruz province of Argentina. Moving forward, the company has planned for further drilling to better define the structural context and controls on mineralisation. 

2. Pioneer Credit Ltd (ASX: PNC) 

Pioneer Credit is a financial services provider involved in acquiring and servicing unsecured retail debt portfolios. The company was involved in a controversial trading halt late 2019 after being in breach of debt and other covenants due to its accounting methods. This involved financiers acquiring the company’s debt and new replacement debt facilities coming into play to save the company. 

This month’s quarterly update highlighted what could be the beginning of a recovery story with the company highlighting a successful refinance and improved market conditions. The Pioneer Credit share price has increased 135% in October. 

3. Kleos Space SA (ASX: KSS) 

Kleos is a space-powered Radio Frequency Reconnaissance data-as-a-service (DaaS) company to clients in the defence, commercial and regulatory sectors. The Kleos Space share price increased 142% this month following a series of announcements regarding satellite contracts and launches.

On 22 October, the company announced the signing of four satellites for the Polar Vigilance Mission to increase its global coverage and broaden revenue opportunities. And on October 29, the company announced the final preparations before the launch of its scouting mission satellites scheduled for 7 November. The satellites will collect data over crucial areas of interest such as the Strait of Normuz, South China Sea, East/West Africa, Southern Sea of Japan and Northern Australian coast.  

4. Weebit Nano Ltd (ASX: WBT) 

The Weebit Nano share price has cooled off in recent days after delivering a peak return of almost 200% in October. The company develops next generation memory technology and plans to become a key player in this market. Weebit focuses on producing Resistive Random-Access-Memory (ReRAM) technology that is 1000 times faster and uses 1000 times less power than flash. 

Its shares have attracted significant trading volumes in the last three months which is likely to assist in its share price outperformance. The company’s quarterly update was also significant with highlights including a key productisation milestone, progressing embedded memory module development, filing three new patents and progressing discussions with potential production partners and customers. 

More reading

• These were the 5 best performing ASX shares last week
• ASX 200 Weekly Wrap: ASX 200 has another shocker as US election approaches
• 5 things to watch on the ASX 200 on Monday
• These were the worst performing shares on the ASX 200 in October
• Is it time to buy ASX gold shares?

Motley Fool contributor Lina Lim 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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Every Monday I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Webjet Limited (ASX: WEB) has seen its short interest reduce slightly to 14.3%, but not enough to stop it from being the most shorted ASX share. Short sellers have been going after the online travel booking company due to concerns over its valuation and rising COVID-19 levels globally. The latter could potentially push back the global travel market recovery.
• Speedcast International Ltd (ASX: SDA) has short interest of 10.6%. The communications satellite technology provider’s shares remain suspended whilst it undertakes a recapitalisation. Speedcast shares have been suspended since February.
• InvoCare Limited (ASX: IVC) has short interest of 9.8%, which is down slightly week on week. The funerals company has come under pressure this year after COVID-related restrictions impacted the industry.
• Mesoblast Limited (ASX: MSB) has seen its short interest rise again to 9.5%. The key driver of this rise has been the US FDA not approving its remestemcel-L application for steroid-refractory acute graft versus host disease (SR-aGVHD). Mesoblast does have another meeting coming up with the regulator, but short sellers don’t appear to believe it will come to anything.
• Myer Holdings Ltd (ASX: MYR) has seen its short interest rebound to 9.5%. Last week the department store operator’s chairman bowed to pressure and retired ahead of its annual general meeting. In FY 2020, Myer posted a statutory loss of $172.4 million.
• Inghams Group Ltd (ASX: ING) has 8.7% of its shares held short, which is up slightly week on week. Short sellers don’t appear confident the worst is behind this poultry company. In FY 2020 it reported a 68.2% drop in net profit to $40.1 million.
• Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest remains flat at 8%. Concerns over rising COVID-19 cases globally are weighing on sentiment in the travel sector.
• Galaxy Resources Limited (ASX: GXY) has seen its short interest fall to 7.9%. An oversupply of lithium and subdued demand have attracted short sellers to this battery materials producer.
• Metcash Limited (ASX: MTS) has seen its short interest rise to 7.5%. Short sellers are going after the wholesale distributor despite favourable trading conditions in the supermarkets and home improvement channels.
• CLINUVEL Pharmaceuticals Limited (ASX: CUV) has seen its short interest slide to 7.4%. Last week the biopharmaceutical company posted first quarter cash receipts of $12 million. This was an increase of 22.8% on the prior corresponding period.

More reading

• These were the worst performing shares on the ASX 200 in October
• These were the worst performing shares on the ASX 200 last week
• 5 ASX 200 broker updates after quarterly earnings season
• Could this finally save the Myer (ASX:MYR) share price?
• Are ASX retail investors ‘dumb money’?

Motley Fool contributor James Mickleboro owns shares of Galaxy Resources Limited. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited and InvoCare 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 was a month to forget for the Megaport Ltd (ASX: MP1) share price in October.

The elastic interconnection services provider’s shares were well and truly out of form last month and recorded a 16.3% decline.

Why did the Megaport share price crash lower?

The Megaport share price came under pressure last month for a couple of reasons.

The first was general weakness in the tech sector late on in the month that weighed on the likes of Megaport and Zip Co Ltd (ASX: Z1P).

The other catalyst for this decline was the company’s first quarter update.

It appears as though investors were disappointed with Megaport’s slower than normal revenue growth during the quarter.

For the three months ended 30 September, the company recorded revenue of $17.3 million, up 2% since the end of the previous quarter. This led to its monthly recurring revenues (MRR) also increasing 2% quarter on quarter to $5.8 million.

Management advised that its growth would have been stronger if the Australian dollar hadn’t appreciated as much as it did. This adversely impacted its MRR by $0.2 million and its total revenue by $0.3 million.

In addition to this, slower net customer and port additions in the fourth quarter of FY 2020 also had a negative impact on its performance.

What about the future?

The good news is that the company did report strong growth in port numbers during the quarter. Megaport posted a 10% quarter on quarter increase in Total Ports to 6,333.

As this is a leading indicator for growth, it is likely to bode well for its second quarter performance.

Another positive is that its CEO, Vincent English, revealed that the company is still aiming to become breakeven in FY 2021.

He commented: “Profitability remains a company-wide priority. We are focused on achieving EBITDA breakeven on an exit run-rate basis by the close of Fiscal Year 2021 by driving further customer growth across all regions.”

“With our SDN reaching over 700 enabled data centres across 24 countries, we are well positioned to capture the demand for elastic interconnection to support the ever-increasing surge of data powered by the digital economy,” he concluded.

Should you buy the dip?

I think last month’s weakness in the Megaport share price could be a buying opportunity for long-term focused investors.

Due to its leadership position in a market that looks set to benefit greatly from the cloud computing boom, I believe the future is very bright for Megaport.

More reading

• ASX 200 Weekly Wrap: ASX 200 has another shocker as US election approaches
• These were the worst performing shares on the ASX 200 last week
• ASX 200 flat: ResMed smashes expectations, AMP surges on takeover talks
• Sezzle (ASX:SZL) share price charges higher on Q3 update
• Are ASX retail investors ‘dumb money’?

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 MEGAPORT FPO. The Motley Fool Australia has recommended MEGAPORT FPO. 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 S&P/ASX 200 Index (ASX: XJO) presented a challenging market in October, with the index wiping much of its monthly gains in the latter half of the month. Quarterly reporting season allowed many ASX 200 tech shares to continue their share price momentum following strong updates.

Here are the 3 best-performing ASX 200 tech shares in October. 

1. Link Administration Holdings Ltd (ASX: LNK) 

The Link share price increased 27% in October, driven by the non-binding indicative proposal the company received from Pacific Equity Partners. The offer would acquire 100% of the shares in Link Group at an indicative cash price of $5.20 per share. 

The current view from Link is that the proposal materially undermines the company and is not in the best interests of the shareholders. The company views itself as possessing leading positions in the markets in which it operates in, making early progress in its transformation plan and an expected recovery in market-driven revenue as economic activity improves. While no hard decision has been made, there is no certainty that such a proposal will eventuate. 

2. Dicker Data Ltd (ASX: DDR) 

The Dicker Data share price soared 23% following a strong quarterly update for the quarter ended 30 September. The update outlined a 14.9% increase in total revenue, year-to-date (YTD), to $1,481.5 million and a 28.3% increase in net profit before tax YTD to $60.8 million. The company highlighted it had been experiencing over and above forecasted revenue growth rates in the first half of the year, off the back of a significant mobilisation to remote working solutions. It sees growth stabilising for the second half of the year to expected levels. 

Looking ahead, the greatest opportunity for Dicker Data over the next quarter is supporting businesses with their return-to-work strategies and business continuity plans in a post-COVID-19 environment. It also commented it has experienced increased quoting activity and the resumption of larger infrastructure projects that were previously put on hold. 

The company also points to the rollout of 5G connectivity as a “tremendous opportunity” with all its hardware and software vendors. Furthermore, the company also intends to develop and invest in a new distribution centre at Captain Cook Drive, Kurnell NSW. The new distribution centre represents an increase in capacity of almost 80%. The large-scale expansion will pave the way for substantial inventory growth and technology portfolio diversification to meet the emerging needs of the Australian market. 

3. Hub24 Ltd (ASX: HUB) 

The Hub24 share price has been relentless, with a 250% run since its March lows and a 28% increase in October. From a fundamental perspective, the company continues to go from strength to strength, with a strong quarterly update and strategic acquisitions announced in October. 

The company posted a record September quarter, with $19 billion funds under administration (FUA), up 32% on the prior corresponding period. The company experienced strong inflows driven by new and existing licensee channels across self-licensed and boutique advisers, brokers and large national accounts. Even with its significant FUA, HUB24 only has a 2.1% market share in the investment and superannuation administration sector, so still has much room to grow.

On 28 October, the company announced three strategic transactions and a $60 million capital raising. These transactions included: 

• The proposed acquisition of investment platform provider Xplore Wealth Ltd (ASX: XPL) for $60 million
• The acquisition of Ord Minnett’s non-custody Portfolio Administration and Reporting Service for $10.5 million upfront cash consideration 
• Proposed subscription for new shares in Easton Investment Ltd (ASX: EAS) of $14 million which will result in a shareholding of up to 40% of Easton. 

More reading

• These were the best performing shares on the ASX 200 in October
• 5 ASX 200 broker updates after quarterly earnings season
• ASX 200 sinks 1.6%, ANZ (ASX:ANZ) reports FY20 result
• Xplore Wealth share price surged to a 2-year high today on M&A fever
• ASX 200 down 1.1%: ANZ cash earnings down 42%, SEEK slammed, HUB24 jumps

Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Hub24 Ltd and Link Administration Holdings Ltd. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited. The Motley Fool Australia has recommended Hub24 Ltd and Link Administration Holdings Ltd. 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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Later this week the Reserve Bank of Australia is widely expected to cut the cash rate to a new record low of 0.1% or even 0%.

Unfortunately, I think it could be a long time until interest rates move higher from here, let alone back to normal levels again.

In light of this, I continue to believe that income investors would be better off sticking with dividend shares instead of term deposits or savings accounts.

But which dividend shares should you buy? Two top dividend shares I would buy are listed below. Here’s why I like them in the current low interest rate environment:

Commonwealth Bank of Australia (ASX: CBA)

Rather than put money in its savings accounts, I think investors should be buying its shares. Although the pandemic is certainly hitting the bank hard, it is reassuring to see that the number of loans on deferral continue to reduce. I believe this is a sign that the provisions it has made will be sufficient.

In light of this and the relaxing of responsible lending rules, I believe Commonwealth Bank’s outlook is improving greatly. So with its shares still down over 24% from their 52-week high, I think now could be an opportune time to invest with a long term view.

Finally, estimating what dividend the bank will pay in FY 2021 is difficult because of the pandemic. However, based on the current Commonwealth Bank share price, I would expect a fully franked yield in the region of 4% over the next 12 months.

National Storage REIT (ASX: NSR)

Another ASX dividend share I would buy is National Storage. It is a leading self-storage operator which I believe has a very positive long term growth outlook. This is thanks to its organic and inorganic growth opportunities. The latter is through its growth through acquisition strategy which has been very effective over the last few years.

Pleasingly, management has persisted with this strategy even during the pandemic. Last week at its annual general meeting, National Storage revealed that it has completed eight acquisitions totalling $139 million in FY 2021. Management also advised that its forward-looking acquisition pipeline remains strong.

Another positive from its annual general meeting was that its occupancy levels are increasing. It advised that in excess of 60,000 square metres of occupancy has been added since 1 July, which is the equivalent of 12 full centres.

Finally, management reaffirmed its underlying earnings per share guidance of 7.7 cents to 8.3 cents per security. Based on this, its dividend policy, and the latest National Storage share price, I estimate that its shares offer a 4.2% yield.

More reading

• ASX 200 Weekly Wrap: ASX 200 has another shocker as US election approaches
• 3 ASX blue chip shares to buy for dividends
• Forget savings accounts and buy these ASX dividend shares instead
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Australia’s third biggest energy company by market cap, Origin Energy Ltd (ASX: ORG), has lost more than half its value this year, with the share price slumping 52% year to date (YTD).

The dismal performance of Origin Energy’s share price is largely in line with the broader energy sector’s performance, in which the ASX 200 Energy Sector Index (ASX: XEJ) has lost more than 45% YTD.

Australia’s other two biggest energy companies have also done miserably in 2020, with Woodside Petroleum Limited (ASX: WPL) falling by 49% YTD, and Santos Ltd (ASX: STO) slumping by 42%.  

What’s dropping the Origin Energy share price?

Needless to say, Origin Energy has been a casualty of the big slump in demand for energy this year as the coronavirus pandemic stopped the world dead in its tracks.

As a commodity producer, Origin Energy is a price taker and therefore its earnings closely track the price of Brent crude oil, which has fallen to under US$40 from nearly US$70 a barrel at the start of 2020.

Understanding Origin Energy’s business

Before deciding to buy shares in a company, it’s imperative that you as an investor have a basic understanding about what the company does, and how it makes money. Only then will you get a sense of the risk of the investment you are about to make.

Let’s take a look at Origin’s Energy’s business model.

Origin Energy has two main revenue sources – Australian energy retail, and liquified natural gas (LNG) export.

In the retail business, Origin Energy is one of three energy retailers in Australia controlling 80% of the market. The other two being Energy Australia and AGL Energy Limited (ASX: AGL).

The retail business is relatively stable where each of the three players essentially owns similar percentages in market share. The retail energy market in Australia is also highly regulated, so significant future growth from this segment might be unlikely.

Origin Energy’s LNG business on the other hand, is a volatile yet potentially highly lucrative business. It owns 37.5% stake in a company called Australia Pacific LNG (APLNG), which is a major liquefied natural gas exporter in Queensland. 

APLNG has a contract in place to export 8.6 million metric tons per year to Asian customers for the next 20 years, with the price linked to the volatile Brent crude oil price.

Can Origin Energy recover from the slump?

On Friday 30 October, the company announced that its FY21 first-quarter revenue from its stake in the APLNG project fell 46%, as a result of lower prices for its oil and gas exports.

This demonstrates that the key to the Origin Energy share price recovery will need to come from a recovery in the oil price to pre-COVID-19 levels.

There’s some bad news, however. A group of 10 investment banks in the US recently polled by The Wall Street Journal forecast that Brent crude oil price will only average $53.50 a barrel by the end of 2021 – far below the pre-COVID levels.

The decision on whether or not to invest in Origin Energy, at least in the short term, comes down to a call on the movement in the oil price. The Origin Energy share price is trading up 0.5% to $4.02 at the time of writing.

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Motley Fool contributor has no positions 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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