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.

Amazon.com Inc (NASDAQ: AMZN)‘s crusade against climate change continues. In its latest move, the e-commerce giant has struck a deal to buy 380 megawatts (MW) of wind energy from Hollandse Kust Noord, a wind farm off the coast of Netherlands that’s being developed by The Crosswind, a consortium between oil major Royal Dutch Shell (NYSE: RDS.B) and Eneco, a Netherlands-based energy company owned by Japan’s Mitsubishi Corp (OTC: MSBHF).

Amazon says this project, called the Amazon-Shell HKN Offshore Wind Project, is also its “largest single-site renewable energy project” yet.

The wind farm is expected to be operational by 2023 with an installed capacity of 759 MW. That means Amazon will buy 50% of its total power starting in 2024 to power its operations in Europe, including 250 MW from Shell and 130 MW from Eneco.

This project takes Amazon one step closer to its goal of becoming a 100% renewable energy company by 2025, five years ahead of its original target announced in late 2019 under its Climate Pledge.

Amazon has made significant investments in renewable energy since. In 2020, it became the largest corporate purchaser of renewable energy, having announced 127 solar and wind energy projects with 6.5 gigawatts (GW) of capacity by Dec. 10, 2020.

With its latest offshore wind project, Amazon’s global wind and solar projects now total 187 with a capacity of 6.9 GW.

Lately, Amazon has been consistently hitting the headlines for its clean energy initiatives. The first of its three wind farms in Ireland came online earlier this month, and the company just ordered more than 1,000 natural-gas engines for its distribution fleet. These moves reflect Amazon’s commitment to becoming net-zero carbon by 2040.

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

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Neha Chamaria has no position in any of the stocks mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, 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 Amazon and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool Australia has recommended Amazon. 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 Douugh Ltd (ASX: DOU) share price is pushing higher on Tuesday morning.

In early trade, the financial wellness app company’s shares are up 16% to 18 cents.

Why is the Douugh share price charging 16% higher?

The catalyst for the strong performance by the Douugh share price today has been the release of a product announcement.

According to the release, the company has now launched its Autopilot feature within its app. Douugh refers to Autopilot as a “self-driving” money management feature.

The release explains that the first function of the feature, Salary Sweeper, has been released to all users today. This service automatically allocates a customer’s paycheck to cover their upcoming expenditure needs for the period and contribute to savings goals.

Furthermore, it uses algorithms to make real-time decisions about how to allocate money, sweeping cash between “jars” to provision for bills, meet saving goals, and speed up debt repayments.

Founder and CEO, Andy Taylor, commented: “This is a hugely exciting moment for our customers, shareholders and team as we launch the first stage of automation that aims to make Douugh indispensable in people’s daily lives – changing the way people bank and invest.”

“We believe Autopilot is what will set Douugh apart from the competition who continue to devote resources to self-service offerings. Autopilot detects, tracks and predicts income and outgoings to calculate each individual’s optimal budgeting requirements,” he added.

Once again, one thing missing from its update was the number of users it has for its app. This could be a sign that the numbers are not strong enough to announce publicly.

It is worth noting that competition in this area of the financial world is intense and has low barriers to entry.

It also has competition from companies with deep pockets such Zip Co Ltd (ASX: Z1P). It is the company behind the hugely popular Pocketbook app, which has more than 800,000 users.

More reading

• Why Douugh, Janus Henderson, Northern Star, & Orocobre are dropping lower
• Why the Douugh (ASX:DOU) share price is crashing 18% lower
• Douugh (ASX:DOU) share price still in limbo. Here’s why
• Does Xinja’s downfall mean neobanks are dead?
• Douugh (ASX:DOU) share price remains suspended after listing rule breaches were found

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 ZIPCOLTD FPO. 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 Shopping Cntrs Austrls Prprty Gp Re Ltd (ASX: SCP) share price will be on watch this morning after it posted an increase in profits and dividends.

You might not have guessed that COVID-19 had hit retail landlords hard. But SCA Property Group’s focus on neighbourhood centres provided it some protection.

The group reported a 14.1% increase in interim net profit to $102.9 million compared with the same period last year.

Watch the cash not profit

But profits aren’t really the focus when it comes to property groups. It’s more the Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO) that I watch.

On these two metrics, the group posted a weaker result compared to 1HFY20, which was before COVID.

However, management was quick to point out that FFO in the latest half improved by 8.2% to 6.77 cents per unit (cpu) compared with 2HFY20.

The increase would have been starker at 16.1% if not for the significant capital raise it undertook during the height of the pandemic.

SCA lifts dividends on improving AAFO

AAFO also improved in 1HFY21 over the previous six months. This measure, which deducts operating costs including maintenance capex climbed 7.4% to 5.8cpu.

Fund flows are more important to investors because that’s where dividends are paid from. On that front, investors would be pleased that SCA Property Group boosted its interim distribution by 14% over 2HFY20 to 5.7cpu.

While that’s still a big drop from last year’s interim dividend of 7.5cps, management is promising to keep increasing the dividend as long as the economy continues to recover.

Dividend and earnings outlook improving

As long as nothing comes out of left field, investors can count on another dividend upgrade in the second half as management is forecasting a full year AFFO of 12.2cpu. Assuming a 98% payout ratio, this should equate to a final distribution of ~6.25cps. This compares with the 5cps it paid in 2HFY20.

SCA Property Group’s earnings are probably more resilient than many other retail landlords, including the Vicinity Centres (ASX: VCX) share price and Scentre Group (ASX: SCG) share price.

While some of the group’s specialty retail tenants are facing ongoing pressure from COVID, its key anchor clients are Woolworths Group Ltd (ASX: WOW) and Coles Group Ltd (ASX: COL).

Foolish takeaway

Both the WOW share price and COL share price are trading at or close to record highs as they are “COVID winners”. Demand for their groceries and alcohol increased during the pandemic and are expected to remain strong.

As for the big profit jump reported by SCA Property Group, that is less exciting than it sounds, in my view.

This is because it was driven primarily by the higher valuations placed on it property portfolio. The main reason investors buy a property stock is for sustainable dividends and companies can’t pay dividends from property valuation increases.

More reading

• Real reporting season surprise isn’t about profits but dividends
• 2 fantastic ASX shares to buy right now
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• Leading brokers name 3 ASX shares to buy today

Motley Fool contributor Brendon Lau owns shares of Woolworths Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET, Shopping Centres Australasia Property Group, and Woolworths Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Macquarie Group Ltd (ASX: MQG) share price is surging higher on Tuesday following the release of its third quarter update.

At the time of writing, the investment bank’s shares are up 7% to $143.45.

How did Macquarie perform in the third quarter?

For the three months ended 31 December, Macquarie experienced an improvement in trading conditions across the company.

According to the release, Macquarie’s annuity-style businesses’ combined third quarter net profit contribution was up on the prior corresponding period.

However, year to date, this side of the business is broadly in line with the same period last year. This is due to base and performance fees being partially offset by margin pressures, increased credit impairment charges, and higher costs to support clients as a result of COVID-19.

Macquarie’s markets-facing businesses’ combined third quarter net profit contribution was significantly higher than the prior corresponding period. This was thanks to the partial sale of its interest in Nuix Ltd (ASX: NXL).

Once again, though, year to date its net profit contribution was broadly in line with the same period in FY 2020. This was due to stronger activity across the majority of its commodity and global markets businesses being partially offset by lower fee revenue and principal income in Macquarie Capital.

At the end of the period, Macquarie’s financial position comfortably exceeded APRA’s Basel III regulatory requirements. As of 31 December, it had a group capital surplus of $8.1 billion and a CET1 ratio of 12.1%. The latter was down from 13.5% at the end of September.

Outlook

Macquarie acknowledges that market conditions are likely to remain challenging, especially given the significant and unprecedented COVID-19 uncertainty.

As a result, it makes short-term forecasting extremely difficult. However, at this point, management advised that it anticipates the FY 2021 result to be slightly down on FY 2020.

Macquarie’s CEO, Ms Shemara Wikramanayake, commented: “Macquarie remains well-positioned to deliver superior performance in the medium term due to our deep expertise in major markets; strength in business and geographic diversity and ability to adapt our portfolio mix to changing market conditions; an ongoing program to identify cost saving initiatives and efficiency; our strong and conservative balance sheet; and a proven risk management framework and culture.”

More reading

• 5 things to watch on the ASX 200 on Tuesday
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• 5 things to watch on the ASX 200 next week

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Nuix Pty Ltd. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia has recommended Nuix Pty 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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The Challenger Ltd (ASX: CGF) share price has come under pressure following the release of its half year results.

In morning trade the annuities company’s shares are down 6% to $6.77.

How did Challenger perform in the first half?

For the six months ended 31 December, Challenger reported annuity sales of $2.2 billion and total life sales of $3.4 billion.

While this was a solid 12% and 10% increase, respectively, over the prior corresponding period and a mammoth 87% and 71% increase, respectively, over the second half of FY 2020.

Together with funds management net inflows of $6.4 billion for the half, Challenger ended the period with assets under management of $96 million. This was a 13% lift on the prior corresponding period.

Things weren’t quite as positive for its profits, with Challenger reporting a sizeable (but expected) decrease in half year earnings.

Normalised net profit before tax (NPBT) came in at $196 million, down 30% on the same period last year. This puts in on track to achieve its FY 2021 normalised NPBT guidance of $390 million to $440 million

This ultimately led to profit after tax falling 29% on a normalised basis to $137 million and rising 1% to $223 million on a statutory basis. The latter includes positive investment experience of $87 million.

Finally, Challenger is resuming its dividend payments after a brief hiatus and declared a fully franked interim dividend of 9.5 cents per share.

How does this compare to expectations?

According to a note out of Morgans, it expected the company to reveal that it was tracking in line with its guidance and was forecasting a half year underlying profit before tax of $204 million. Its analysts also pencilled in an interim dividend of 9.8 cents per share.

While Challenger is tracking in line with its guidance, it has fallen short of Morgans’ profit and dividend forecasts for the half.

This appears to be why the Challenger share price is under pressure today.

Outlook

As mentioned above, management expects its normalised net profit before tax in FY 2021 to be in the range of $390 million to $440 million.

It notes that earnings are expected to be weighted to the second half, reflecting the gradual deployment of excess cash and liquid investments over the year.

Managing Director and Chief Executive Officer, Richard Howes, commented: “Our strategy of diversifying revenue is working with strong book growth in our Life business and industry leading organic flows in Funds Management.”

“We remain strongly capitalised with prudent portfolio settings which are appropriate given our growing customer franchise. The investment portfolio is in good shape, with no significant credit defaults and stable property valuations during the half year. We are gradually deploying our excess cash and liquidity to enhance future returns.”

“Challenger enters the second half of the 2021 financial year in good shape, having withstood industry and COVID-19 related disruption of recent years. Our strong performance in funds management, building momentum in annuities, and new opportunities in banking mean Challenger is well placed to achieve our vision of providing customers with financial security for retirement,” he concluded.

More reading

• 5 things to watch on the ASX 200 next week
• Top ASX shares to buy in February 2021

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Challenger 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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There are some ASX small cap shares worth owning according to fund manager Naos Asset Management.

What is Naos Asset Management’s investment approach?

Naos is led by chief investment officer (CIO) Sebastian Evans. NAOS Small Cap Opportunities Company Ltd (ASX: NSC) is one of the listed investment companies (LIC) operated by Naos.

That particular LIC looks at businesses with market capitalisations between $100 million and $1 billion.

The fund manager has a number of investment focuses. It looks for businesses that are good value with long term growth potential. With its portfolio, Naos believes it’s better to have a quality portfolio rather than numerous holdings. That’s why it only holds around 10 positions in each fund, with each ASX share representing a high-conviction position.

Naos invests in the small cap ASX shares for the long-term. It considers the performance and the liquidity of its positions whilst ignoring the index. Performance can sometimes be quite variable when compared to the index.

It looks to invest purely in industrial companies whilst also considering the ESG factors (environmental, social and governance).

COG Financial Services Ltd (ASX: COG)

COG was the only business in the Naos Small Cap Opportunities portfolio to give a meaningful update during January.

This small cap ASX share, as the name suggests, provides a number of financial services including finance, broking, aggregation and it also owns a stake of a debenture issuer.

Naos explained that COG revealed its FY21 half-year net profit after tax and amortisation (NPATA) would be $10.1 million, which would be an increase of 140% compared to the prior corresponding period.

The fund manager was pleased that the profit growth is translating into strong free cash flow with unrestricted cash and term deposits of $53 million (not including the $17 million investment in Earlypay Ltd (ASX: EPY)), compared to a market capitalisation of $149 million with minimal gross debt.

Naos said the small cap ASX share’s profit growth was driven by two main factors, the first of these being the finance, broking and aggregation division, where margins have increased as the business continues to improve efficiencies through automation as well as offering complementary services to their clients such as insurance broking.

The other key driver, according to the fund manager, was the increased ownership of debenture issuer Westlawn Finance. Naos believes that Westlawn has continued to be a beneficiary in the growth of the debenture book, as well as the growth of its insurance broking arm.

COG said that it will be rolling out a ‘hub and spoke’ insurance broking model to all their owned and aggregated broker members in the coming months.

BSA Limited (ASX: BSA)

Naos describes BSA as a solutions-focused technology services small cap ASX share.

BSA assists clients in implementing their physical assets, needs and goals in the areas of building services, infrastructure and telecommunications. BSA clients include the National Broadband Network (NBN), Aldi Supermarkets, Foxtel and the Fiona Stanley Hospital.

The fund manager outlined the investment case for BSA. Even though the company had an eventful 2020, Naos thinks there are some significant catalysts.

The first relates to the $4.5 billion that the NBN is looking to spend over the next three years to continue to upgrade specific parts of the network. Naos believes that the small cap ASX share is well positioned to secure part of this work as it continues to deepen its relationship with the NBN, as demonstrated through its recent contract win.

Secondly, Naos thinks the recent acquisition of Catalyst One provides an opportunity to potentially transform a $15 million revenue business into a $100 million business over the next three to five years if BSA can successfully combine the Catalyst One offering with the existing skillset of the business to offer a one-stop solution for customers around both their current and future wireless capability needs.

The fund manager also said that BSA could be more aggressive with an active buyback and a higher payout ratio could be achieved given the large cash balance on the balance sheet.

More reading

• 2 little-known small cap ASX shares rated as buys by fundie

Motley Fool contributor Tristan Harrison owns shares of NSC. 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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American Pacific Borates Ltd (ASX: ABR) shares will be on watch today following an update regarding the company’s Fort Cady Borate Mine. At market close yesterday, the ABR share price finished the day at $1.86.

It will be interesting to watch how the company’s shares perform today as investors digest this morning’s update.

What did ABR announce?

The ABR share price will be in focus this morning after the company released a positive update.

According to this morning’s release, ABR reported that it has selected Matrix Service Co (NASDAQ: MTRX) to finish the Phase 1A construction at the Fort Cady Borate Mine.

Established in 1984, Matrix is focused on construction, maintenance and fabrication services primarily across the North American region. However, the company extends its reach in energy and industrial markets throughout the United States, Canada, South Korea, and Australia.

ABR stated that it has begun discussions with Matrix to ensure timely completion of the project. It’s estimated the works will be completed sometime in the third quarter of the 2021 calendar year. ABR also highlighted that it has a healthy cash balance of $67.3 million as of 31 January, to fully-fund the first phase of the project.

Furthermore, ABR noted that it intends to retain Matrix for the remaining three production phases at the Fort Cady Borate Mine.

Management commentary

ABR CEO and managing director Mike Schlumpberger welcomed the partnership, saying:

We are delighted with the appointment of Matrix to complete the construction of Phase 1A of our Fort Cady Borate Mine. Matrix is a leading North American industrial engineering and constructor contractor headquartered in Tulsa, Oklahoma. Matrix’s core values of safety and community involvement align perfectly with ABR’s core values and intention to ensure the mine is delivered safely and with positive community involvement.

This is another important step in the fulfilment of our aspiration to become a globally significant producer of borates and specialty fertilisers.

About the ABR share price

Over the past 12 months, the ABR share price has performed well for investors, gaining more 280%.

The company’s shares dipped to a 52-week low of 14.5 cents in March, before storming higher.

Just last month, ABR shares reached an all-time high of $1.88, and are within a whisker of that record today.

At the present share ABR price, the company has a market capitalisation of around $697 million.

More reading

• American Pacific Borates (ASX:ABR) share price pops following latest presentation

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The market’s attention is on the earnings recovery during this profit reporting season, but the real surprise may be dividends.

It’s the expected rebound in earnings from the impact of COVID-19 that’s dominating the spotlight and fuelling much of the recent rally in the S&P/ASX 200 Index (Index:^AXJO).

There’s nothing like a “V-shape” profit recovery to get the blood racing. We have already seen some ASX shares issue profit upgrades.

Profit upgrades are only half the story

Some recent examples are the Amcor CDI (ASX: AMC) share price, BlueScope Steel Limited (ASX: BSL) share price and ARB Corporation Limited (ASX: ARB) share price.

We can expect more positive earnings surprises and upgrades during this month’s reporting season. But the real action may be on the dividends front.

That’s the view from Morgan Stanley who is predicting dividend upgrades will surpass profit upgrades.

Dividend upgrades could dominate profits

“During 2020 the primary focus shifted from solvency and liquidity to leverage to a recovery,” said the broker.

“The debate around earnings also evolved with a focus on how quickly pre-COVID levels of earnings could be regained.

“Left in the back of the analyst spreadsheet is the dividend, anchored to a savage COVID adjustment and well below FY19 levels in many cases.”

Higher upside from lower expectations for dividends

As the market isn’t pricing in much of a dividend recovery, at least not as much as earnings, ASX shares that boost their payouts could be the bigger winners.

The fact is, the tailwinds that are lifting earnings expectations apply equally to dividends!

The pandemic recession isn’t as bad as initially feared, cheap money is lubricating the wheels in the corporate machinery, jobs are rebounding and consumers are cashed up.

Dividend upgraders have an extra edge

These factors are as conducive for dividend growth as it is for profits. But dividends may have one extra advantage – capital raises.

ASX companies have gone to investors for emergency capital injections during the height of the COVID scare. As it turned out, many didn’t need quite as much as feared and have excess cash on their balance sheets to restore some, if not all, of their dividend cuts.

Some companies that went cap in hand to shareholders in 2020 but are expected to cut dividends in FY21 include the Shopping Cntrs Austrls Prprty Gp Re Ltd (ASX: SCP) share price, Perpetual Limited (ASX: PPT) share price and Lendlease Group (ASX: LLC) share price.

Others like the Metcash Limited (ASX: MTS) share price, Tabcorp Holdings Limited (ASX: TAH) share price and Newcrest Mining Ltd (ASX: NCM) are also on the list.

More reading

• Here’s a bargain ASX share in a sea of expensive stocks
• 5 things to watch on the ASX 200 on Tuesday
• ASX 200 rises 0.6%, Vocus jumps on takeover offer, Afterpay hits new record
• Why the Afterpay (ASX:APT) share price is exploding even higher today
• ASX 200 up 0.6%: Vocus rockets, Zip surges, & Treasury Wine rebuffs speculation

Motley Fool contributor Brendon Lau owns shares of BlueScope Steel Limited and Newcrest Mining Limited. Connect with me on Twitter @brenlau.

The Motley Fool Australia owns shares of and has recommended Amcor Limited. The Motley Fool Australia owns shares of Shopping Centres Australasia Property Group. The Motley Fool Australia has recommended ARB 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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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.

Tesla Inc (NASDAQ: TSLA) made a game-changing disclosure on Monday.

The electric-vehicle (EV) leader purchased $1.5 billion worth of bitcoin (CRYPTO: BTC) in a move that could bring legitimacy to the digital currency markets and pave the way for more companies to adopt the cryptoasset as a key part of their treasury-management strategies.

Tesla’s entry into the crypto arena is likely to accelerate this trend. Tesla’s blockbuster bitcoin purchase could create “a safe zone for some of the smaller companies and possibly everyone in the S&P 500 Index (SP: .INX) to allocate into bitcoin,” Antoni Trenchev, co-founder of crypto lender Nexo, said in January. 

Moreover, with $19.4 billion in cash reserves as of the end of 2020, Musk could choose to bolster Tesla’s bitcoin holdings in the year ahead. The EV leader also said that it intends to begin accepting payments in bitcoin for its vehicles, subject to applicable laws. 

Bitcoin’s price soared on the news to a record high above $44,000 before pulling back close to $43,000 as of 3:25 p.m. EST on Monday. 

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

More reading

• Should short selling be banned?
• Tesla finally recalls 134,951 vehicles for defective touchscreens
• GameStop (NYSE:GME) dominates the US shares ASX investors have been buying
• GameStop chaos: Love always wins over shorting
• Don’t fall for Elon Musk’s self-driving car fallacy

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

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

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Suncorp Group Ltd (ASX: SUN) shares will be on watch today after the company announced a 39.5% increase in half-year cash profit. At Monday’s close, the Suncorp share price was sitting at $10.44.

Why is the Suncorp share price in focus?

Suncorp reported its results for the half-year ended 31 December 2020 (1H 2021) this morning. That announcement was headlined by a 39.5% increase in cash profit to $509 million.

Strong earnings across all businesses, including insurance (Australia), banking & wealth and Suncorp New Zealand helped boost profits.

Group net profit after tax fell 23.7% on the prior comparative period (pcp) to $490 million. It’s worth noting the 1H 2020 figure included a $293 million gain on the sale of the Capital S.M.A.R.T and ACM Parts businesses in October 2019.

The Suncorp share price will be one to watch this morning following the latest earnings update. That included a 109.8% surge in insurance (Australia) profit to $258 million.

Suncorp also announced a fully franked interim dividend of 26 cents per share. That represents a 65.2% payout of cash earnings compared to 89.5% in 1H 2020.

Suncorp CEO Steve Johnston said the result demonstrates the focus on core businesses and digitisation is yielding results. 

The Aussie insurer recorded $1,026 million of excess common equity tier 1 (CET1) after dividends. All businesses are holding CET1 at or above targets with $789 million held at the group.

Suncorp hailed a renewed brand strategy and increased digitisation as key initiatives.

However, it wasn’t all positivity from the Aussie insurer. It will be interesting to see how the Suncorp share price responds as investors process the latest update, including an “uncertain” outlook for 2021.

The coronavirus pandemic and its economic impact remain front of mind for the Aussie insurer. Suncorp’s catastrophe reinsurance covers remained fully intact at 31 December 2020 with availability to be used throughout FY2021.

Mr Johnston said Suncorp enters the second half of the year in “good shape”. According to the company, momentum is building across Suncorp’s segments while the balance sheet remains “very strong”.

Foolish takeaway

The Suncorp share price is one to watch this morning after the company reported a significant increase in cash earnings. Suncorp’s payout ratio dipped below 1H 2020 numbers while its balance sheet remains intact.

The Suncorp share price has fallen 16.6% in the last 12 months to $10.44 as at Monday’s close while the S&P/ASX 200 Index (ASX: XJO) is down 1.9% in the same period.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• 5 things to watch on the ASX 200 next week
• NRW (ASX:NWH) share price jumps as it moves closer to Primero acquisition
• Broker lists the best ASX stocks to own for an up to 30% gain in 2021
• Why the QBE (ASX:QBE) share price is in focus today

Motley Fool contributor Ken Hall 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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