There are a large number of growth shares for investors to choose from on the Australian share market.

Two in the tech sector that come highly rated are listed below. Here’s why they have recently been named as shares to buy:

Pushpay Holdings Ltd (ASX: PPH)

The first tech share to look at is Pushpay. It is a fast-growing donor management and community engagement provider to the church market.

Thanks to the quality of its platform, its leadership position in the market, and the shift to a cashless society, Pushpay has been growing at a very strong rate.

For example, the company recently released its half year results and revealed a 48% increase in total processing volume to US$3.2 billion. This led to Pushpay reporting a 53% increase in operating revenue to US$85.6 million and, thanks to the further widening of its margins, EBITDAF growth of 177% to US$26.7 million.

This strong form and its long runway for growth has caught the eye of analysts at Goldman Sachs. They have put a conviction buy rating and $2.59 price target on the company’s shares. Based on the current Pushpay share price of $1.68, this price target implies potential upside of over 54%.

Xero Limited (ASX: XRO)

Another tech share to look at is Xero. It is a leading New Zealand-based cloud-based business and accounting software provider.

Thanks to its successful evolution from an accounting platform into a full service small business solution over the last few years, the company has been growing its customer numbers and revenues at a rapid rate.

For example, at the last count Xero had 2.45 million subscribers and was generating half year operating revenue of NZ$409.8 million from them.

The good news is that due to the quality of its offering, the shift to the cloud, its global market opportunity, and burgeoning app ecosystem, Xero has been tipped for more of the same in the future.

Goldman Sachs is very positive on its prospects and recently put a buy rating and $157.00 price target on its shares.

More reading

• 3 reliable ASX 200 shares that keep growing
• 5 fantastic ASX shares to buy in 2021
• 3 of the best ASX shares to buy right now
• How to get the best out of the 2021 mining boom
• 2 of the best ASX 50 shares to buy today

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 PUSHPAY FPO NZX and Xero. The Motley Fool Australia has recommended PUSHPAY FPO NZX. 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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Last week saw a large number of broker notes hitting the wires once again. Three buy ratings that caught my eye are summarised below.

Here’s why brokers think investors ought to buy them next week:

A2 Milk Company Ltd (ASX: A2M)

According to a note out of Morgans, its analysts have retained their add rating but trimmed the price target on this infant formula company’s shares to $12.20. This follows a2 Milk Company’s earnings guidance downgrade due to weakness in the daigou channel. While the broker acknowledges that investor sentiment will be impacted by the uncertainty it is facing, it takes comfort in the company’s strong performance in mainland China. And although it has downgraded its earnings forecasts by almost a third for the coming years, the broker still sees value in its shares at the current level. The a2 Milk share price ended the week at $10.95.

Alliance Aviation Services Ltd (ASX: AQZ)

Analysts at Morgans have also retained their add rating and lifted the price target on this contract, charter and allied aviation services provider’s shares to $5.00. The broker notes that Alliance Aviation is expanding its fleet to 73 aircrafts via the acquisition of 16 Embraer E190s for $85 million. Morgans believes the deal has been done on attractive terms and expects the expansion to result in higher levels of activity across its network in the coming years. The Alliance Aviation share price last traded at $3.90.

City Chic Collective Ltd (ASX: CCX)

A note out of Goldman Sachs reveals that its analysts have retained their buy rating and lifted the price target on this fashion retailer’s shares to $4.25. This follows the announcement of the acquisition of UK-based plus sized fashion retailer Evans. It notes that this acquisition is consistent with its stated goal of building a global footprint solely focused on the plus-sized market. Goldman expects the acquisition to deliver strong strategic benefits and provide a platform for cross-selling Avenue and City Chic products. The City Chic share price ended the week at $3.96.

More reading

• These were the best performers on the ASX 200 last week
• 3 top small cap ASX shares to buy
• 2 ASX growth shares to buy when the market reopens
• ASX 200 rises on Christmas Eve
• ASX 200 up 0.5%: BHP Samarco update, A2 Milk’s acquisition, Credit Corp rockets

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended A2 Milk. 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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It takes a considerable amount of time to make a million from buying shares. However, that process may be shortened through investing money in top share picks. They may offer good value for money relative to other stocks, and could deliver higher returns over the coming years.

Through investing in companies benefitting from clear industry growth trends while they trade at low prices, it is possible to outperform the stock market. Over time, this could improve an investor’s financial prospects and lead them towards a seven-figure portfolio.

Buying shares to make a million

Of course, an investor can make a million by tracking the performance of the stock market. For example, indexes such as the S&P 500 Index (SP: .INX) and FTSE 100 Index (FTSE: UKX) have produced high single-digit annual returns over the past few decades on a total return basis. Investing even a modest amount of money, such as $500 per month, over a 35-year time period would be sufficient to produce a portfolio valued in excess of a million at an 8% annual return.

Clearly, this example assumes that the stock market continues to produce high single-digit annual total returns. While there is no guarantee that this will take place, taking a long-term view of the stock market allows an investor to benefit from compounding. Over time, this can have a significant impact on their portfolio valuation, since they earn returns on previous returns.

Finding today’s top share picks

Unearthing and investing in today’s top stock picks can lead to market-beating returns, as well as greater scope to make a million. Although views on the best shares to buy may differ among a group of investors, they are likely to offer stronger profit growth than their index peers. As such, seeking to identify companies that operate in industries with clear long-term growth potential could be a shrewd move. They may benefit to a great extent from rising demand for their products and services.

For example, healthcare could be a growing market over coming decades. An aging and growing world population may mean demand for a variety of drugs and orthopaedics is required. This could catalyse the sales and profitability of healthcare-related  companies. Similarly, online-focused businesses may deliver higher profit growth in future. The coronavirus pandemic has pushed many consumers online, which may now prove to be a permanent trend.

Meanwhile, buying companies with flexible business models may lead to higher returns. For example, a company with low fixed costs, low debt and a forward-thinking management team may be able to more easily adapt to changing market conditions. Not only could such companies offer higher return prospects and a better chance to make a million, they may also have less risk than their sector peers.

Buying attractive stocks at fair prices

Clearly, buying today’s top share picks does not guarantee that an investor will make a million. However, purchasing them when they offer fair value for money may lead to market-beating returns. Over time, this may increase an investor’s chances of generating a seven-figure portfolio, and of enjoying greater financial freedom in older age.

More reading

• Top brokers name 3 ASX shares to sell next week
• 3 small cap ASX dividend shares to buy
• Report: authorities rejected Facebook offer to foster competitors’ growth
• 2 ASX 200 shares to buy in January
• 3 small cap ASX shares that could have a big 2021

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

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Once again, a large number of broker notes hit the wires last week. Some of these notes were positive and some were bearish.

Three sell ratings that caught my eye are summarised below. Here’s why top brokers think investors ought to sell these shares next week:

Bendigo and Adelaide Bank Ltd (ASX: BEN)

According to a note out of Morgan Stanley, its analysts have retained their underweight rating but lifted the price target on this regional bank’s shares to $7.70. While the broker notes that the bank’s housing loan growth is well ahead of forecasts and that recent changes from APRA are favourable, it doesn’t believe its shares offer value for money at the current level. The broker prefers other options in the banking sector. The Bendigo and Adelaide Bank share price ended the week at $9.48.

National Storage REIT (ASX: NSR)

A note out of Goldman Sachs this week reveals that its analysts have retained their sell rating but lifted the price target on this self-storage operator’s shares slightly to $1.57. This follows the release of the company’s trading update and guidance for FY 2021. While the broker was pleased with aspects of this update, there wasn’t enough detail to allow it to change its view. In addition, Goldman Sachs has an issue with its current valuation, which it appears to believe is excessive compared to its peers. It notes that its shares are trading at a 23x estimated FY 2022 FFO. This compares to a sector average of 17x. The National Storage share price was trading at $1.96 at the end of the week.

QBE Insurance Group Ltd (ASX: QBE)

Analysts at Macquarie have retained their underperform rating and $8.00 price target on this insurance giant’s shares. This follows the release of a trading update which revealed that the company is expecting to post a huge loss in FY 2020. Unfortunately, Macquarie doesn’t appear convinced that the worst is over. Particularly given that QBE’s return on capital expectations in North America are below its cost of capital. The QBE share price ended the week at $8.86.

More reading

• These 4 ASX REITS are about to go ex-dividend
• Top brokers name 3 ASX shares to buy today
• Top broker puts sell rating on National Storage (ASX:NSR) shares
• Leading brokers name 3 ASX shares to sell today
• Why the QBE (ASX:QBE) share price has been given a conviction buy rating

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

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Blue chips aren’t the only businesses to pay dividends. Small cap ASX dividend shares could also be worth considering for income.

Here are three different smaller businesses to look at:

Nick Scali Limited (ASX: NCK)

Nick Scali currently has a trailing grossed-up dividend yield of 7.1%.

Fund Manager Matt Williams from Airlie Funds thinks Nick Scali is going to benefit from a lower unemployment rate and consumers could continue to benefit from the government stimulus.

The small cap ASX dividend share has a market capitalisation of around $772 million according to the ASX. It has been steadily increasing its dividend over the past several years. 

In FY20 it grew the final dividend by 12.5%, meaning the total FY20 dividend grew by 5.6% to 47.5 cents.

The furniture business said that in the first quarter of FY21 its sales orders were up 45% and this trend continued into October. There were store closures in Melbourne and Auckland during the quarter, so when excluding times when any stores were shut total comparable store sales orders grew by 59% in the FY21 first quarter.

Nick Scali was still generating large online sales growth – up 47% in the first quarter of FY21 – and management are expecting the earnings before interest and tax (EBIT) from online to be higher in FY21 than expected.

The company is now expecting net profit after tax (NPAT) in the FY21 first half to grow by 70% to 80%.

Propel Funeral Partners Ltd (ASX: PFP)

Propel currently has a trailing grossed-up dividend yield of around 5%.

The funeral business is exposed to long-term tailwinds of Australia’s ageing population. Death volumes are expected to grow by 1.4% per annum between 2016 to 2025 and then increase by 2.2% per annum from 2025 to 2050.

COVID-19 caused a lot of disruption during 2020 to the small cap ASX dividend share. Not only was funeral attendance limited, but in the first quarter of FY21 death volumes were materially below historical long term trends in key markets where Propel operates. Flu cases in Australia were down around 99% compared to the 5-year average.

In terms of financial performance, in the first quarter of FY21 operating earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 18% to around $10.5 million. Average revenue per funeral growth compared FY20 was in the company’s target range of 2% to 4%. Total funeral volumes were higher than the prior corresponding period and its “strong” cash flow conversion was maintained.

Propel is projecting growth for the rest of the year with the company expected to benefit from death volumes reverting to long term trends, given the growing and ageing population.

Pacific Current Group Ltd (ASX: PAC)

Pacific has a trailing grossed-up dividend yield of 8.1%.

FY20 was a year of growth for the company. Underlying earnings per share (EPS) went up by 40% to $0.51 cents which helped the total dividend grow by 40% to $0.35 per share.

Pacific is a business that invests in fund managers and then brings resources to help the manager grow such as using its financial capabilities or its expertise.

At the company’s annual general meeting (AGM), Pacific explained that it is focused on growing the existing business, diversifying its portfolio and seeking new revenue sources. It’s going to keep looking for compelling investments, open up new distribution channels and perhaps launch a private fund to invest alongside Pacific, where it would receive management fees revenue and co-investment rights.

The small cap ASX dividend share is expecting to make at least two investments in FY21.

Dean Fremder of Perpetual Limited (ASX: PPT) said when Pacific Current shares were approximately 10% lower: “The stock’s really cheap. It’s on nine times earnings. It’s growing earnings at double digits, so more than 10% a year. It is paying a 6.5% fully franked yield. And most excitingly, we think they can pay out a much larger portion of their earnings as dividends. We see no reason, given the surplus franking credits they have on the balance sheet, they can’t be paying a 10 or 11% fully franked yield in the next 12 months. So, really excited about that one.”

More reading

• 3 top small cap ASX shares to buy
• Got cash to invest? Here are 2 ASX shares to buy
• 3 top ASX shares to buy for 2021
• 3 little-known ASX dividend shares offering big income
• 3 small ASX dividend shares with large yields

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Propel Funeral Partners 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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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.

Antitrust regulators at the Federal Trade Commission (FTC), along with almost every state attorney general, filed lawsuits against Facebook (NASDAQ: FB) this month alleging it is a monopoly and seeking to break up the social network.

Yet Facebook tried to head off the legal showdown by offering to license its code and its members’ connections to another company or developer to create their own platforms to compete against it.

As the subsequent lawsuits make clear, the offer was too little, too late.

The lawsuits primarily stem from Facebook’s acquisition of Instagram in 2012 and WhatsApp in 2014, purchases the FTC itself approved of at the time. The social network was able to turn them into juggernauts in their respective spaces, a success the lawsuits are now using against it.

But The Washington Post reports Facebook maintains that the lawsuits are misguided since the internet is highly competitive. It says the suits amount to “revisionist history” considering the significant competitive pressure applied from the likes of Alphabet‘s (NASDAQ: GOOG)(NASDAQ: GOOGL) Google, Snap, TikTok, and Twitter.

Yet as Facebook has squelched user ability to freely express opinions on the site by either blocking content or putting warning labels on posts with which it disagrees, other social networking sites with a greater laissez-faire attitude toward regulating speech such as Gab, MeWe, and Parler have sprung up in response.

The advent of those new sites suggests Facebook’s code isn’t the problem, but rather Facebook’s willingness to acquire the competition to squash it.

Facebook is also moving forward with its plan to integrate its disparate services to allow users to interact with one another across the platforms, a move that might make it more difficult to break up the tech giant, but also one that could prove the antitrust regulators point, too.

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

More reading

• The 1 mega-cap tech stock that doesn’t fear Washington
• Facebook is preparing to copy Cameo
• World’s 10 biggest companies are now worth 12% of Earth’s GDP
• Is it time for Facebook to do the unthinkable?
• ACCC hauls Facebook to court for ‘deceptive’ conduct

Rich Duprey has no position in any of the stocks mentioned. 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. The Motley Fool Australia has recommended Facebook. 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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Are you looking for some new additions to your portfolio in January? Then you might want to get better acquainted with the ASX 200 shares listed below.

Both companies have been tipped to grow strongly over the 2020s. Here’s what you need to know about these ASX 200 shares:

Altium Limited (ASX: ALU)

Altium is an electronic design software provider which has been growing at a very strong rate over the last few years. Pleasingly, management remains confident that it still has a long runway for growth. This is thanks to its exposure to the growing Internet of Things and Artificial Intelligence markets, which are underpinning solid demand for subscriptions. Also supporting its growth will be the recent release of its cloud-based Altium 365 platform, which has been well-received by users.

It is aiming to almost double its subscriber numbers to 100,000 and its revenue by ~150% to US$500 million by 2025/26. Analysts at Credit Suisse are positive on its outlook. They have an outperform rating and $42.00 price target on its shares.

Nanosonics Ltd (ASX: NAN)

The COVID-19 pandemic has taught us that infection control is very important. This must be music to the ears of this infection prevention company. It is the company behind the industry-leading trophon EPR disinfection system for ultrasound probes. In addition to this, the company is hoping to launch several new infection control products in the near future which reportedly have similar addressable markets.

One broker that thinks investors should be buying Nanosonics’ shares with a long term view is UBS. The broker notes that Nanosonics is a high-quality and structural growth story. It is expecting the company to benefit from post-COVID infection prevention tailwinds. Its analysts have a buy rating on its shares.

More reading

• 3 reliable ASX 200 shares that keep growing
• These were the best performers on the ASX 200 last week
• These were the worst performers on the ASX 200 last week
• 5 fantastic ASX shares to buy in 2021
• ASX 200 rises on Christmas Eve

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nanosonics Limited. The Motley Fool Australia has recommended Nanosonics 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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If your risk profile allows you to invest in small cap ASX shares, then you might want to take a look at the ones listed below.

All three of these small cap shares have been growing strongly and have been tipped to continue doing so in the future. Here’s what you need to know:

ELMO Software Ltd (ASX: ELO)

ELMO is a cloud-based human resources and payroll software company which provides a unified platform to streamline processes for employee administration, recruitment, on-boarding, learning, performance, remuneration, compliance training and payroll. It has a massive opportunity in the ANZ and UK markets and the option to expand internationally in the future thanks to its jurisdiction agnostic platform. Morgan Stanley currently rates ELMO as overweight with a $9.70 price target.

Nitro Software Ltd (ASX: NTO)

Nitro Software could be a small cap ASX share worth keeping an eye on. It is a software company aiming to drive digital transformation in organisations around the world across multiple industries. Its core solution is the Nitro Productivity Suite. This provides integrated PDF productivity and electronic signature tools to customers through a horizontal, software-as-a-service, and desktop-based software solution. Analysts at Morgan Stanley are also positive on Nitro and have an overweight rating and $3.50 price target on its shares.

Whispir (ASX: WSP)

Whispir is a software-as-a-service communications workflow platform provider which allows businesses and governments to deliver two-way interactions at scale using automated multi-channel communication workflows. Its platform was used to great effect during the height of the pandemic when 22 government departments used it for COVID-19 communications. Management estimates that the Workflow Communications platform as a Service market could reach US$8 billion per year by 2024. This compares to the revenue of $39.1 million it recorded in FY 2020, which was up 25.5% year on year. Wilsons has an overweight rating and $5.10 price target on the company’s shares.

More reading

• 5 exciting small cap ASX shares to watch in 2021
• 2 ASX growth shares to buy
• 3 top ASX shares to buy in 2021
• Leading brokers name 3 ASX shares to buy today
• 27 ASX companies just got an unwanted knock on the door

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 Elmo Software and Whispir Ltd. The Motley Fool Australia has recommended Elmo Software, Nitro Software Limited, and Whispir 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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Many investors may view today’s cheap dividend stocks solely from a passive income perspective. In other words, their high yields provide a generous income return and little else.

However, undervalued income stocks could deliver impressive capital returns alongside a passive income. Their low prices may equate to capital growth potential – especially as low income returns available on other mainstream assets push investors towards dividend shares.

Capital growth opportunities from cheap dividend stocks

Despite the 2020 stock market rally, there are a wide range of cheap dividend stocks available to purchase today. In many cases, they face challenging operating conditions in the short run that have caused investors to demand a wide margin of safety.

While this may limit their scope to deliver capital growth in the short term, over the long run they could benefit from improving operating conditions as part of a global economic recovery.

Therefore, buying them now while they trade at a discount to their intrinsic values could be a shrewd move. It may enable a long-term investor to lock-in low valuations across the stock market for high-quality businesses that have the financial capacity to survive further operating challenges.

Over time, today’s cheap stocks could experience stronger financial performances and improving investor sentiment that leads to high capital returns for investors.

A lack of passive income appeal elsewhere

Cheap dividend stocks offer a significantly more attractive passive income opportunity than other mainstream assets at the present time. For example, obtaining an income return that is positive on an after-inflation basis has become more difficult over the past year for bondholders and savers. They may even experience a loss of spending power should interest rates remain low and inflation rise in the coming years.

Meanwhile, property investment may produce disappointing income returns over the next few years. High house prices and a struggling economy may produce low yields that fail to improve significantly.

This may increase the appeal of cheap dividend stocks, thereby raising demand for income shares. The end result could be rising share prices – especially if interest rates remain at low levels. Since policymakers seem to be more concerned about the economy’s outlook rather than maintaining modest levels of inflation, it would be unsurprising for a loose monetary policy to remain in place over the coming years.

Reducing risk from undervalued dividend shares

Of course, cheap dividend stocks may experience further difficulties in the short run. Their operating conditions could deteriorate further in the coming months. As such, it is important to buy those companies with solid financial positions and affordable dividends.

Doing so may reduce risk and lead to a higher passive income, as well as a larger capital return in a likely stock market rally over the long term.

More reading

• Leading fund manager names the ASX dividend shares to buy in 2021
• 2 blue chip ASX shares to buy next week
• 2 ASX dividend shares to solve your income needs
• 2 stellar ASX growth shares to buy in January
• 3 reliable ASX 200 shares that keep growing

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

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While the probability of a rate increase by the Reserve Bank of Australia in 2021 is incredibly low, income investors need not worry.

That’s because the Managing Director of Plato Investment Management, Dr Don Hamson, revealed that the income-focused investment firm is entering 2021 with a relatively bullish outlook for yield from Australian equities.

Plato Investment Management, the company behind Plato Income Maximiser Ltd (ASX: PL8), is particularly positive on miners with exposure to iron ore.

Dr Hamson commented: “We been getting exceptional yield from Iron Ore miners for some time now and we think this continues into 2021, even if we do see some short-term volatility. COVID-19 economic stimulus across the globe is continuing to evolve from income support to infrastructure spending, led by China, and this is a strong tailwind for demand.”

“There is some concern about the impact of trade wars, but the reality is Chinese steel mills have few options outside of Australia. Brazil being the other major Iron Ore exporter, but all the data indicates Brazil alone can’t provide China with what they need. China is hitting the exports it can get from other countries, like beef, barley, wine and now it seems coal,” he added.

Plato’s picks for dividends in this space are BHP Group Ltd (ASX: BHP), Fortescue Metals Group Limited (ASX: FMG), and Rio Tinto Limited (ASX: RIO).

What are the other dividend options for 2021?

It isn’t just the iron ore miners that Plato Investment Management sees as dividend options next year. The investment company expects to find strong yields in select domestically focused retailers in 2021.

Dr Hamson explained: “You can’t travel abroad, so if you think about the number of additional Australians who’ll be spending the holiday season at home, buying groceries from supermarkets, buying gifts and taking advantage of post-Christmas sales, we think this is significant. It bodes well for continuing strength from consumer staples stocks and select consumer discretionary.”

In light of this, Plato is expecting good yields from the likes of Coles Group Ltd (ASX: COL), JB Hi-Fi Limited (ASX: JBH), Super Retail Group Ltd (ASX: SUL), and Wesfarmers Ltd (ASX: WES).

And with APRA removing dividend payout limits on the banks, Dr Hamson is also expecting upside in bank dividends.

He commented: “We’ve been underweight banks for most of the year but have become much more optimistic on banks dividends in recent months. We don’t expect bank dividends to go back to where they were two years ago, but we’re confident they will increase in 2021 and begin moving back towards normal payout ratios of between 70-90%.”

“Rising property prices and continued government support for small business are both key factors that strengthen the case for a recovery in the banks,” he concluded.

The Plato Australian Shares income fund is targeting a 7% yield over the coming 12 months.

More reading

• These ASX dividend shares could be top Christmas gifts for income investors
• ASX 200 rises on Christmas Eve
• 3 top ASX dividend shares for a better retirement
• ASX 200 up 0.5%: BHP Samarco update, A2 Milk’s acquisition, Credit Corp rockets
• Why the Woodside (ASX:WPL) share price is edging higher today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Super Retail Group Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Wesfarmers 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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