The Infratil Ltd (ASX: IFT) share price is one to watch this morning after the company’s latest investor day updates.

What does Infratil do?

Infratil is a New Zealand-based infrastructure group that has investments in a number of industries including data centres, airports and renewable energy.

The ASX-listed entity boasts a $3.7 billion market capitalisation and is a majority owner of Kiwi renewables group, Tilt Renewables Ltd (ASX: TLT).

Why is the Infratil share price on watch?

Infratil provided its latest update in its 2020 Auckland Investor Day presentation with some juicy information for investors.

Its been a tough year in 2020 for asset owners and investors like Infratil. The Infratil share price has managed to edge 2.4% higher this year, despite the many challenges.

The group’s CDC Data Centres business has had to adapt to changing coronavirus restrictions but achieved earnings before interest, tax, depreciation and amortisation (EBITDA) growth of 50% from FY19 to FY20.

The CDC business is continuing to explore expansion opportunities in New Zealand with the construction of two 10 megawatt data centres in Auckland.

There is also a concerted push to grow its National Critical Infrastructure client base and secure additional land for further growth.

If the success of data centre rival NextDC Ltd (ASX: NXT) is anything to go by, there could be some serious growth in store for Infratil in FY21.

The Infratil share price will be worth watching as investors take in the latest updates from across Infratil’s portfolio. In its Vodafone business, Infratil is forecasting an EBITDA impact of $60 million to $75 million in FY21.

That comes as COVID-19 has hit roaming, prepaid and retail revenue despite opportunities for rapid change and more cloud-based products.

Infratil sees 5G leadership as the key to future margin growth as it looks to capitalise on shifting dynamics in the New Zealand mobile industry.

Foolish takeaway

Today’s update provides investors with some food for thought heading towards the end of the year.

There are growth opportunities on offer for both its CDC Data Centres and Vodafone businesses, let alone in the renewables space with Tilt.

More reading

• 5 ASX shares hitting record all-time highs this week
• Invest like Warren Buffett and buy and hold these fantastic ASX shares
• Should you stay invested in an ASX share after a strong run?
• 3 exciting ASX growth shares to buy for stellar long term returns
• How top ASX tech shares like Afterpay (ASX:APT) have performed in 2020

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. 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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Bank accounts are something we all have and need these days. Traditionally, there are two primary types of bank accounts: chequing and savings.

Chequing accounts normally don’t come with a substantial interest rate and are primarily used for transactions and the like — which is why they typically come with an EFTPOS card.

However, savings accounts are usually classed as ‘wealth-building tools’ or even ‘investments’. You place your surplus cash in a savings account, where you were traditionally rewarded with a reasonable interest rate — compensation for technically lending your money to the bank. That capital is still liquid (you can withdraw it whenever you want), but you used to expect that the bank would pay an interest rate that would handily cover the effects of inflation each year, and then some.

But that paradigm has long departed from the financial landscape we see today.

See, banks charge interest on loans and pay interest on savings using the official cash rate that is determined by the Reserve Bank of Australia (RBA) each month. So say if the cash rate was 5%, you used to expect a mortgage interest rate of say around 6%, and a savings account interest rate of 4%, for argument’s sake.

But today, the Australian cash rate sits at just 0.25% — a record low. There is some speculation that the RBA will again lower the cash rate this year to a new record low of 0.1%.

So if you’re wondering why your mortgage has never been cheaper to service, that’s why.

Savers are losers

But what’s good for the goose is apparently good for the gander. And if you’ve looked at the interest rate your savings account offers recently, I’m sure you would have choked into your morning coffee.

As an example, Commonwealth Bank of Australia (ASX: CBA) is currently offering a maximum interest rate for a standard savings account of just 0.85% per annum.

That is absolutely pathetic from the perspective of wealth building. I’m not having a go at CBA here, all of the banks’ offerings are pretty similar. It’s purely a consequence of the RBA’s current cash rate.

So what does this mean? Well, even if inflation averages a low-by-historical-standards 1% per annum over the next year or two, your savings will be losing value in real terms.

But here’s the real kicker. Our friends over at the Australian Taxation Office (ATO) don’t take inflation into account when assessing your taxable income for the year. And interest received from a savings account is taxable income. So not only is your money going backwards, you have to pay tax on the interest that slows this decay. You’re almost no better off than keeping your cash under the mattress.

So what’s the solution? I believe you need to invest. No one ever really saves their way to significant wealth. And in 2020, you’re swimming upstream.

A solution?

In contrast, ASX shares have consistently given investors inflation-smashing returns (albeit amidst the odd market crash).

Take a plain-jane S&P/ASX 200 Index (ASX: XJO) fund like the SPDR S&P/ASX 200 Fund (ASX: STW). This exchange-traded fund (ETF) has returned an average of 7.31% per annum since its inception in 2001. And, being an ETF, it’s one of the easiest investments on the ASX you can own.

So when I encounter people who still have all their cash in the bank, I usually recommend them to take most of it out and, instead, put it into shares. I also suggest keeping an adequate amount in the bank for emergencies and savings, of course. You never want to be in the awful position of having to sell shares to fix your car or go to hospital. But if you think you’re getting a good deal having your life savings in a bank account, I respectfully believe you are mistaken. As the old saying goes, the best time to plant a tree was yesterday, and the second-best time is today.

More reading

• 5 ASX 200 events to watch for this week
• 5 things to watch on the ASX 200 on Wednesday
• CSL (ASX:CSL) share price and 2 other ASX stocks among latest broker “buy” ideas
• The ASX 200 slid 0.72% lower today
• Is the ASX 200 trading too high right now?

Motley Fool contributor Sebastian Bowen 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 EML Payments Ltd (ASX: EML) share price will be on watch on Wednesday following the release of a presentation ahead of its appearance at the Goldman Sachs 4th Annual Virtual Tech Forum.

What was included in EML Payments’ presentation?

As well as providing investors with a breakdown on its performance during an unprecedented FY 2020, the payments company released an update on how its businesses are faring in the new financial year.

Pleasingly, EML Payments has started FY 2021 in a positive fashion. During the first quarter, the company’s gross debit volume (GDV) reached $4.85 billion. This was up 51% on the prior corresponding period and 20% on the fourth quarter of FY 2020.

This led to the company recording revenue of $40.6 million for the quarter, which was a 75% increase on the prior corresponding period and a 20% lift on the previous quarter.

Finally, growing even quicker was its earnings before interest, tax, depreciation and amortisation (EBITDA). EML Payments achieved EBITDA of $10 million, up 215% on the prior corresponding period and 69% quarter on quarter.

Given that the first quarter is historically the company’s weakest quarter of the year, this bodes well for the remainder of FY 2021.

What were the drivers of this growth?

The key drivers of its growth during the first quarter were its General Purpose Reloadable and Virtual Account Numbers (VANS) segments.

The former reported a 16% increase in GDV to $2,389 million thanks to BaaS and Government channels. Whereas the latter experienced a 23% increase in GDV to $2,267 million.

They were supported by a 41% lift in Gift & Incentive GDV to $199 million. Management notes that volumes recovered significantly during the quarter after the initial impacts of COVID-19. Given how this segment is based around shopping gift cards, it notes that the next three months will be crucial for its overall segment results in FY 2021.

No guidance was given for the full year. However, management notes that its full year profits are expected to be split 48%/52% between the first and second halves.

More reading

• 3 ‘opening up’ recovery ASX shares
• Is it time to go all in on ASX shares?
• EML (ASX:EML) share price rockets up 8% on investor briefing
• ASX 200 flat: Bank of Queensland impresses, CSL guidance update, AUSTRAC clears Afterpay
• Why Afterpay, Bank of Queensland, EML, & Sonic shares are storming higher

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended EML Payments. 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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Australia is really opening up now. A number of states are opening up to each other and Victoria’s COVID-19 cases are really low. I’ve got some recovery ASX share ideas.

These businesses may be lower than their pre-COVID-19 prices now, but I think they could recover strongly over the next 12 months as the country opens up:

Sydney Airport Holdings Pty Ltd (ASX: SYD)

This is the infrastructure stock that probably has the most upside if Australia opens up again. Some Australian states weren’t really connected with Sydney Airport. But now most of those borders are opening up.

Not only that, but international passengers are now starting to return to Australia. New Zealand people are now flying into Sydney Airport. The government is also looking at opening up to other low-risk countries like Japan and South Korea. That could mean more passengers for Sydney Airport.

I’m not expecting an instant return of full domestic passenger volume. But remember that share prices will usually move before activity/earnings. There is a lot of pent up demand for holidays and perhaps interstate travel, so Sydney Airport could see a useful surge over the next few months.

New Zealand, South Korea and Japan are each within the top 10 sources of passengers for Sydney Airport. It’s going to be a grind, but as passengers and earnings return, I think investors will like the Sydney Airport share price valuation, particularly when lower interest rates are taken into account.  

EML Payments Ltd (ASX: EML)

EML is an ASX share that facilitates various types of payments including gift cards, general reloadable cards, salary packaging cards, virtual accounts and so on.

It’s a global business with operations in Australia, North America and Europe. Obviously the company is suffering from the lack of demand of in-store gift cards. The run up to Christmas could be a real boost for the business. A return to (fairly) normal retail conditions in Australia would also be really useful for its earnings.

The EML share price has been rising recently and I think it could continue on this trajectory as Australia’s COVID-19 situation stabilises and a vaccine (hopefully) gets closer.

I think this ASX share could be a long-term performer from the current level and a good recovery idea.  

Tyro Payments Ltd (ASX: TYR)

Tyro is another payments business. It provides the technology for merchants to receive payments. There’s a good chance your local café may have one of Tyro’s terminals (or soon will), particularly after the recent deal with Bendigo and Adelaide Bank Ltd (ASX: BEN).

I thought Tyro was a good recovery ASX share play even before this deal because more people out and about should mean more processing volume for Tyro.

But the deal with Bendigo Bank is a good boost. It will see Tyro deploy more than 26,000 Tyro terminals in 2021 with the new alliance as it replaces Bendigo’s existing network and the economic benefits will move to Tyro. Bendigo Bank will also exclusively refer new merchant opportunities from its business customer base to Tyro, under a co-brand.

Tyro is expecting that Bendigo Bank’s business customers will generate approximately $5 billion in transaction value in FY22. Tyro’s gross profit share (after gross profit share to Bendigo Bank and before operating costs) from the Bendigo Bank cohort will be approximately $19 million in FY22.

I think Tyro is another good recovery ASX share option.

Foolish takeaway

I think all three of these ASX shares are interesting ideas and could rise as Australia’s borders and economies open up again. At the current prices I think I’d go for EML Payments first, as it’s the one that has the potential for truly global growth.

More reading

• Why the Tyro (ASX:TYR) share price is sinking 6% lower today
• Why IDP Education, Perseus Mining, Lovisa, & Tyro shares are dropping lower
• Why Dicker Data, South32, Tyro, and Uniti shares are pushing higher today
• ASX 200 Weekly Wrap: Promises of easy money push ASX 200 to post-crash high
• Is it time to go all in on ASX shares?

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Tyro Payments. The Motley Fool Australia owns shares of and has recommended EML Payments. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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This has been a very eventful week so far with many S&P/ASX 200 Index (ASX: XJO) companies holding AGMs and releasing Q1 results at the same time. Nonetheless, there are several potentially contentious meetings still to be held this week. Some of these relate to companies that have received a lot of press coverage recently, while others concern businesses impacted particularly hard by the pandemic. Here are a few of the highlights to watch out for over the remainder of the week. 

ASX 200 events on Thursday 22 October

At 7.30am on Thursday, ASX 200 company AMP Limited (ASX: AMP) will provide its Q3 update. On 2 September, AMP announced it was undertaking a portfolio review as it regularly received unsolicited offers for its assets and businesses. As a result, it has been rumoured that Vicinity Centres (ASX: VCX) has declared an interest in the company’s real estate portfolio.  Moreover, the company has flagged mass job cuts to try to bring costs under control. 

At 10.00am, Crown Resorts Ltd (ASX: CWN) will be holding its AGM. At present, Crown is enmeshed in an inquiry to determine whether it is fit to hold a license for the Barangaroo casino. Consequently, AUSTRAC has become involved recently, declaring it has “serious concerns” over money laundering, which has led to an investigation that could take up to two years. Moreover, the company’s largest institutional investor, Perpetual Limited (ASX: PPT), has voted to oppose the re-election of three directors.

In conclusion, the company chair, Helen Coonan, has said the Barangaroo casino will open its doors before the inquiry determines whether Crown can hold a casino license. All of these issues are likely to play out in the company’s AGM.

At 11.00am, ASX 200 mall operator Scentre Group (ASX: SCG) will hold its AGM. Scentre is often one of the highest volume large cap shares traded on the ASX. Meanwhile, lockdowns, social distancing, and the government’s code of conduct for commercial tenancies have had a significant impact on this company. Nevertheless, in August the company declared it had been able to collect 86% of rent payments. Indeed, the AGM and Q1 results will likely provide an insight into the degree of improvement in the mall business sector.

At 11.30am, National Australia Bank Ltd. (ASX: NAB) will publish its Q3 business confidence survey. The survey provides an overview of business confidence and business conditions. The company’s 2Q report highlighted the difficult conditions resulting from lockdown restrictions faced by Australian business .

End of the week, Friday 23 October

At 11.00am on Friday, ASX 200 airline Qantas Airways Limited (ASX: QAN) will hold its AGM. Qantas has been one of the high profile casualties of the pandemic. In recent weeks, the company decided to end international joint ventures, place its super jumbos into storage, and resume trans Tasman flights. The Q1 results will provide an insight into how much the company has been able to mobilise on domestic routes.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• CSL (ASX:CSL) share price and 2 other ASX stocks among latest broker “buy” ideas
• The ASX 200 slid 0.72% lower today
• Is the ASX 200 trading too high right now?
• Here’s why the Perpetual (ASX:PPT) share price is falling today

Motley Fool contributor Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Crown Resorts 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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I think there are a number of exciting, quality small cap ASX shares that I’d be happy to buy with $3,000 right now.

Smaller businesses have the potential to generate much stronger earnings growth over the medium-term because they’re starting from a smaller base.

Here are some of the most exciting (and non-tech) ASX small cap shares that I’d buy with $3,000.

City Chic Collective Ltd (ASX: CCX)

City Chic is one of the most promising ASX retail shares in my opinion. It’s a seller of clothes, footwear and accessories for plus-size women.

The company has been growing internationally very well over the past few years, organically as well as through acquisitions. City Chic reported that in FY20 it achieved sales revenue growth of 31% to $194.5 million with comparable sales growth of 0.4%. Not bad during a global pandemic.

The small cap ASX share saw its percentage of online sales increase to 65% of total sales (up from 44% in FY19). Online sales surged 113.5% compared to FY19.

Plenty of retailers on the ASX are focused on Australian (and New Zealand) sales. In FY20 the clothes retailer saw 42% of its global sales come from the northern hemisphere (up from 20% in FY19). It’s a global retailer with sales in Europe and North America.

I think the acquisitions are smart and could lead to attractive synergies and market share growth in FY21.

At the current City Chic share price it’s trading at 20x FY23’s estimated earnings.

Australian Ethical Investment Limited (ASX: AEF)

Australian Ethical is a fund manager that aims to give investors exposure to ‘ethical’ investments by excluding a number of industries like coal and so on. It also likes to invest in businesses which are making a positive impact on the world.

I like that it’s benefiting from two key trends. The first is that it’s exposed to superannuation because it’s a superannuation provider. In the first quarter of FY21 it saw $100 million of net inflows for the quarter to super. Mandatory super contributions will help Australian Ethical’s funds under management (FUM) grow steadily over the coming years. It also offers managed funds which is seeing net inflows.

The small cap ASX share is also benefiting from the growth of some investors wanting to be invested in ethical businesses that are doing good for the country or even the world.

With Australian Ethical’s FUM growing by 6.5% in the first quarter alone, I think it has plenty of growth potential. Lowering management fees could help attract more FUM and members over the coming years. The FY20 result was solid with revenue and underlying profit growing by 15%.

BWX Ltd (ASX: BWX)

Natural beauty is another industry that is seeing growth. Beauty as a whole is/was doing well, but natural beauty is growing at a faster pace.

BWX is a business that owns a variety of natural beauty brands. It owns Sukin (which grew revenue by 55% in FY20), which is a large, global brand which is expanding nicely in the northern hemisphere.

The small cap ASX share also owns two US-based brands called Andalou Naturals (which grew revenue by 10% in FY20) and Mineral Fusion (which grew revenue by 16% in FY20) which are growing strongly in the US and are now looking to expand internationally.

Nourished Life is a website that sells a variety of products. It saw revenue growth of 15% in FY20, though revenue grew by 26% in the second half of the year.

There is a lot of things to like about BWX. It’s also looking to build a new manufacturing hub that will hopefully help the business lower costs, improve efficiencies and help BWX become a bigger business. It’s growing profit margins and this will help it become more profitable.

In FY21 it has guided that both revenue and earnings before interest, tax, depreciation and amortisation (EBITDA) can grow by at least 10%.

At the current BWX share price it’s valued at 21x FY23’s estimated earnings.

More reading

• 4 ASX shares to buy for a rare Christmas surprise
• Is it time to go all in on ASX shares?
• Why I’d buy Australian Ethical (ASX:AEF) shares this week
• Where I’d invest $10,000 in ASX shares for growth
• 3 top small cap ASX shares to buy right now

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Australian Ethical Investment Ltd. The Motley Fool Australia owns shares of and has recommended BWX Limited. The Motley Fool Australia has recommended Australian Ethical Investment 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 today eligible Suncorp Group Ltd (ASX: SUN) shareholders will be paid the insurance and banking giant’s final 10 cents per share fully franked dividend.

While many shareholders will use this for income or take advantage of its dividend reinvestment plan, others may wish to invest the funds back into the share market.

Here’s where I would invest these dividends:

a2 Milk Company Ltd (ASX: A2M)

Investors that are interested in putting these funds into a growth share could consider a2 Milk Company. It is a New Zealand-based infant formula and fresh milk company with a focus on A2-only products. Strong demand for its products from the China market and the expansion of its fresh milk footprint have underpinned very strong earnings growth over the last few years.

And while the pandemic is going to stifle its growth this year, I expect it to accelerate again in FY 2022 once market conditions return to normal. Especially given its modest market share in China, its growing distribution in the country, and its sizeable cash balance. The latter gives the company the option of boosting its growth through acquisitions in the future.

Vitalharvest Freehold Trust (ASX: VTH)

If you’re looking for more dividends, then you might want to take a look at Vitalharvest. It is an owner of agricultural property assets which have exposure to the nutritious and healthy food trend. Its assets comprise four berry properties and three citrus properties. Some of which are leased to horticulture giant Costa Group Holdings Ltd (ASX: CGC).

Due to the quality of its portfolio, I believe the company is well-placed to grow its income and distribution at a solid rate over the 2020s. For now, based on the current Vitalharvest share price, I estimate that it offers investors a very generous forward ~6% distribution yield.

More reading

• 3 ASX shares to hold forever
• 3 brilliant ASX growth shares to buy
• 10 must-buy ASX shares to snap up before it’s too late
• My top 5 ASX growth shares to buy right now
• Investing $1,000 in these 3 ASX shares could be a very smart move

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 and COSTA GRP 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 probability of a rate cut by the Reserve Bank next month just keeps getting higher.

According to the latest cash rate futures, the market is now pricing in an 82% probability of a cut to zero at the November meeting.

While the market doesn’t always get it right, it does seem almost inevitable that one is coming.

But don’t worry if you’re an income investor, because there are plenty of dividend shares offering generous dividend yields that smash those on offer with term deposits and savings accounts.

Two ASX dividend shares that I would buy are listed below:

BWP Trust (ASX: BWP)

BWP is the largest owner of Bunnings properties in the Australian market. It currently has 68 warehouses leased to the home improvement giant, which makes up the vast majority of its rental income. This has proven to be a very good thing in 2020. At a time when many retailers have been deferring rental payments because of the pandemic, BWP was able to collect its rent largely as normal. 

So much so, in FY 2020 the company reported a 1% increase in profit before gains on investment properties to $117.1 million. Impressively, including property gains, BWP’s profit was up 24.4% to $210.6 million. The latter reflects the strength of its Bunnings tenancies. I’m confident there will be more of the same in FY 2021 and expect a distribution of 18.3 cents per share to be paid. Based on the current BWP share price, this works out to be an attractive 4.45% yield.

Coles Group Ltd (ASX: COL)

A second ASX dividend share to buy is Coles. I think the supermarket giant would be a top option due to its strong market position, positive growth prospects, and defensive qualities. The latter was on display in FY 2020 when Coles delivered an impressive full year result. It achieved sales growth of 6.9% to $37.4 billion and net profit after tax growth of 7.1% to $951 million.

Thanks to its strong start to FY 2021, I feel Coles is in a position to deliver another solid result this year. And with the company aiming to pay upwards of 90% of its earnings back to shareholders, I expect another generous dividend payment. Which, based on the current Coles share price, I estimate offers a forward fully franked ~3.5% dividend yield.

More reading

• 3 things to tell someone who has never invested in ASX shares
• How I’d position my ASX share portfolio for the next market crash
• 4 ASX shares to buy for a rare Christmas surprise
• ASX 200 Weekly Wrap: Promises of easy money push ASX 200 to post-crash high
• 3 core holdings for a $100,000 ASX portfolio

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET. 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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I think there are certain group of ASX income shares that are worth being in every dividend-seeker’s portfolio.

There were a couple of names that I nearly included like Rural Funds Group (ASX: RFF) and WAM Microcap Limited (ASX: WMI). However, their share prices have run hard over the past six months, so there may be some other names that I’d want to buy first.

It’s very hard to make any money from keeping cash in the bank at the moment. But I don’t think ASX blue chips are the safest place to generate income. I think these ASX income shares are worth buying for dividends:

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

I think Soul Patts is the best ASX dividend share in Australia. It has been listed since 1903. 

It has a diversified portfolio of different assets because it’s an investment house. It can invest anywhere and shift its portfolio to other growing areas over time. Some of the ASX shares that it owns a sizeable chunk of include: TPG Telecom Ltd (ASX: TPG), Australian Pharmaceutical Industries Ltd (ASX: API), New Hope Corporation Limited (ASX: NHC), Clover Corporation Limited (ASX: CLV), Bki Investment Co Ltd (ASX: BKI), Milton Corporation Limited (ASX: MLT), Palla Pharma Ltd (ASX: PAL) and Tuas Ltd (ASX: TUA).

The ASX income share also owns plenty of unlisted businesses in various sectors like swimming schools, resources, agriculture and financial services.

It receives a strong level of investment income from its portfolio each year. After paying for expenses, Soul Patts then pays out some of the remaining net cashflow as a growing dividend.

Soul Patts has actually increased its dividend every year since 2000 (including through the worst of COVID-19) which is the best record on the ASX. I like the defensive nature of Soul Patts, but it has also managed to outperform the index in the short-term and the long-term.

At the current Soul Patts share price it offers a grossed-up dividend yield of 3.3%.

Future Generation Investment Company Ltd (ASX: FGX)

Future Generation is another quality ASX income share.

It’s a listed investment company (LIC) which has investments across around 20 top fund managers that invest in ASX shares – those managers work for free so that Future Generation can donate 1% of its net assets to youth charities each year. There are no management fees or performance fees when it comes to Future Generation.

Its gross portfolio has outperformed the S&P/ASX 200 All Ordinaries Accumulation Index over the past month, six months, twelve months, three years, five years and since inception in September 2014. Over the past year Future Generation’s portfolio has outperformed by more than 10%.

The ASX income share can use its investment gains to pay a steadily-growing dividend, which it has done since 2015.

At the current Future Generation share price it offers a trailing grossed-up dividend yield of 6.3%.

Brickworks Limited (ASX: BKW)

Brickworks is primarily known as a building products business in Australia. It sells a variety of products like bricks, paving, masonry, roofing and precast.

It also has a strong market presence in the north east of the US after three targeted acquisitions. It’s now the market leader in places like New York. I think Brickworks is well placed to benefit when the US construction industry returns to normal operations after COVID-19.

Brickworks also has two other assets. It owns around 40% of Soul Patts and it also has a 50% stake of an industrial property trust alongside Goodman Group (ASX: GMG). Goodman is a high quality operator of industrial estates, one of the best in the world. The trust will soon have Amazon as a key tenant at a large distribution warehouse that it’s constructing.  

The building products business hasn’t cut its dividend for over 40 years. That’s very reliable. It’s one of the main reasons why I think Brickworks is must-have ASX income share.

It’s the above two assets’ cashflow which completely fund Brickworks’ dividend, it doesn’t need the building products divisions to do well every single year to keep growing the dividend.

At the current Brickworks share price it offers a grossed-up dividend yield of 4.4%. I think that’s a good starting yield.

More reading

• Why the Soul Patts (ASX:SOL) share price is up 25% in 2 months
• Is it time to go all in on ASX shares?
• 2 ASX shares I plan to hold til I’m 100
• 2 ASX dividend shares raising their dividends like clockwork
• Why Brickworks, Flight Centre, Whitehaven, & Zip shares are dropping lower

Tristan Harrison owns shares of FUTURE GEN FPO, RURALFUNDS STAPLED, WAM MICRO FPO, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Clover Limited. The Motley Fool Australia owns shares of and has recommended Brickworks, RURALFUNDS STAPLED, and Washington H. Soul Pattinson and Company Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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On Tuesday the S&P/ASX 200 Index (ASX: XJO) followed the lead of U.S. markets and dropped lower. The benchmark index fell 0.7% to 6,184.6 points.

Will the market be able to bounce back from this on Wednesday? Here are five things to watch:

ASX 200 expected to edge higher.

It looks set to be a better day of trade for the ASX 200 on Wednesday. According to the latest SPI futures, the ASX 200 is poised to open the day 2 points higher. This follows a strong night on Wall Street which in late trade sees the Dow Jones up 0.55%, the S&P 500 0.65% higher, and the Nasdaq climbing 0.5%. This follows comments by Nancy Pelosi that she is optimistic that a stimulus deal will be reached.

Oil prices rise.

Energy shares Oil Search Limited (ASX: OSH) and Santos Ltd (ASX: STO) could be on the rise today after oil prices pushed higher. According to Bloomberg, the WTI crude oil price is up 1.7% to US$41.51 a barrel and the Brent crude oil price is up 0.8% to US$42.96 a barrel. Stimulus hopes gave oil prices a lift.

Annual general meetings.

The annual general meetings continue on Wednesday with both Orora Ltd (ASX: ORA) and Service Stream Limited (ASX: SSM) scheduled to hold their virtual meetings. Both the packaging company and the essential network services company could provide trading updates at their respective meetings.

Gold price higher.

Gold miners Evolution Mining Ltd (ASX: EVN) and Saracen Mineral Holdings Limited (ASX: SAR) will be on watch after the gold price strengthened. According to CNBC, the spot gold price is up 0.15% to US$1,914.40 an ounce following a softening U.S. dollar and stimulus optimism.

CSL rated as a buy.

The CSL Limited (ASX: CSL) share price still has further to run according to analysts at Goldman Sachs. According to a note, the broker has retained its buy rating and lifted its price target on the biotherapeutics company’s shares to $329.00. This follows the company’s R&D day on Tuesday. Overall, it was pleased with its update and has increased its valuation in response to the products under development.

More reading

• CSL (ASX:CSL) share price and 2 other ASX stocks among latest broker “buy” ideas
• The ASX 200 slid 0.72% lower today
• Oil Search (ASX:OSH) share price flat on Q3 FY20 update
• Leading brokers name 3 ASX shares to sell today
• Is the ASX 200 trading too high right now?

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 CSL Ltd. The Motley Fool Australia has recommended Service Stream 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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