Christmas could come early for the Coles Group Ltd (ASX: COL) share price on reports that it’s gearing up for record sales during the holiday season.

The supermarket chain is anticipating record sales as it will have one million more mouths to feed in December and January, reported the Australian Financial Review.

The news report is yet to inspire investors as the Coles share price slipped 0.9% to $17.92 during lunch time trade.

In contrast, the Woolworths Group Ltd (ASX: WOW) share price gained 0.7% to $39.09 and the Metcash Limited (ASX: MTS) dipped 0.2% to $3.

Coles share price gears for one million extra shoppers

Readers on this site shouldn’t be surprised about the big Christmas supermarket rush. I’ve reported last week about this “phenomenon” with Credit Suisse upgrading Coles shares to “buy”.

Australia will have a full house this festive season as Aussies can’t go on their regular overseas vacation due to COVID-19.

The federal and state governments are running campaigns to convince locals to holiday domestically instead. This is not only good news for the local tourism industry, but for our supermarkets too.

How this Christmas will be different

But this tailwind may not be as strong as some bulls like to believe. The chief executive of Coles, Steve Cain, told the AFR that says celebrations are likely to be smaller due to social restrictions.

Also, the economic impact from the pandemic is pushing more Aussies onto struggle street.

Coles is planning the Christmas shopping bash, including a new collectables program, with these factors in mind.

It’s doing this by offering smaller serving sizes and semi-prepared food like prosciutto-wrapped saddle of lamb and stuffed Tasmanian salmon roast.

“We think this will be the biggest Christmas ever by far, given the circumstances – it will be a lot better than Easter,” Mr Cain told the AFR.

“With one million more Australians around, and with a more limited food service offering, this year it’s going to be a summer of more frequent, smaller entertaining going on – that’s what we’ve tried to cater for.”

Read through for the Woolworths share price

You can bet that Woolies will be thinking the same thing! I have also heard anecdotally that Woolworths is reducing staff hours at some of its Melbourne stores.

I don’t think it’s due to weakening sales, even though sales are cycling through a COVID high, but an effort to pad margins.

Margins are the key thing I will be looking at for Woolworths as its recent results showed a lack of operating leverage. This is probably due to a sharp but temporary increase in costs to operate in a COVID stricken world.

The proof will be in the Christmas pudding.

More reading

• 2 blockbuster blue chip ASX shares to buy
• Top brokers name 3 ASX shares to buy today
• Why I like ASX consumer staples shares in the current climate
• Revealed: ASX Christmas winners and losers
• Why Woolworths is too expensive right now

Motley Fool contributor Brendon Lau owns shares of Woolworths Limited. Connect with me on Twitter @brenlau.

The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths 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 exchange-traded funds (ETFs) are something that any ASX investor can get amongst. There are ETFs for virtually everything these days. Whether you want hefty dividends, exposure to fringe, high-growth biotech stocks, or a healthy mix of everything, there’s an ETF for that.

But which ETF to choose from the hundreds of options out there?

3 ASX ETFs every investor should consider today

BetaShares Nasdaq 100 ETF (ASX: NDQ)

This ETF from BetaShares tracks the largest 100 companies on the Nasdaq exchange over in the United States. The Nasdaq is the exchange that most tech companies list on in the US. As such, this ETF is heavily tilted towards the tech sector. You’ll probably be familiar with its largest holdings, companies like Apple Inc (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT) and Amazon.com Inc. (NASDAQ: AMZN). It also holds substantial weightings in some other growth favourites from the US, including NVIDIA Corporation (NASDAQ: NVDA) and Tesla Inc (NASDAQ: TSLA).

Tech is the way of the future, and so I think this ETF is a top choice for any ASX investor wanting to increase their exposure to the sector. NDQ’s recent performance has been breathtaking. This ETF has delivered an average return of 28.79% per annum over the past 3 years, and 22.7% p.a. over the past 5. Enough said.

iShares Global Consumer Staples ETF (ASX: IXI)

Turning to a very different beast, IXI tracks an index of global companies involved in the consumer staples sector. Consumer staples may not be as exciting as tech, but the reality is we can’t live without the products that consumer staples companies provide. These include food, drinks, household essentials like laundry powder and dishwashing detergent, and vices like alcohol and tobacco.

As such, IXI holds companies like Nestle, Proctor & Gamble, Unilever, Coca-Cola, Philip Morris International and even our own Woolworths Group Ltd (ASX: WOW). In an uncertain world, these are the kinds of companies that can provide the most certainty and stability in my view. No matter the maladies the economy is facing, we’re going to be buying these products. Therefore, I think IXI is another top fund that any ASX investor can look at today.

BetaShares Asian Technology Tigers ETF (ASX: ASIA)

Our final ETF returns to the tech theme. But instead of American companies, this ETF tracks some of the best tech shares in Asia. Most of this ETF’s holdings reside in China, but you also get some exposure to India, South Korea, Hong Kong and Taiwan. You might know some of ASIA’s top holdings, which include Taiwan Semiconductor Manufacturing Co, Tencent Holdings, Samsung, Alibaba Group and JD.com.

Asia is one of the fastest-growing markets in the world, and in the 21st century, I think it would be remiss for investors to ignore it completely. This ETF is an easy way to access some of the best of what Asia has to offer, and therefore I think it is a top choice for any ASX investor today.

This ETF is also a top performer – it’s delivered a return of 58.98% in the past year alone. Again, enough said!

More reading

• Which ETFs attracted the most money this year?
• How to position yourself for the next big surge in technology shares
• Why it is important to diversify your ASX portfolio and how you can do it
• 3 five-star ASX shares to buy next week
• Is it still safe to invest in China?

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Coca-Cola, Procter & Gamble, Philip Morris International and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon, Apple, Microsoft, NVIDIA, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS and recommends the following options: long January 2022 $1920 calls on Amazon, long January 2021 $85 calls on Microsoft, short January 2021 $115 calls on Microsoft, and short January 2022 $1940 calls on Amazon. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. The Motley Fool Australia owns shares of iShares Global Consumer Staples ETF and Woolworths Limited. The Motley Fool Australia has recommended Amazon, Apple, BETANASDAQ ETF UNITS, and NVIDIA. 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 Pointerra Ltd (ASX: 3DP) share price is falling today after the company released its quarterly activities and cash flow report. The Pointerra share price has dropped 5.15% to 46 cents at the time of writing.

Quarterly update

Pointerra’s share price is down this morning despite the company announcing strong results for the September quarter. Investors in the 3D geospatial company may have been expecting more growth to go with the company’s lofty $330 million market capitalisation.

During the quarter, cash receipts from customers totalled $0.61 million compared to $0.82 million in Q4 FY20. Despite this decline, the company reported it continued to grow the spend from existing customers across Pointerra’s suite of services. With the strongest growth coming from the US utilities sector. The addition of Eversource Energy (NYSE: ES), a US$32 billion energy company was a highlight.

Furthermore, the company saw numerous US Defence sector opportunities emerge. During September, Pointerra was invited to participate in a platform demonstration and situational proof of concept at an exercise for the US military. The company showcased the real world applications for its platform that could be of benefit.

The company’s highly anticipated 3D Data marketplace also saw progress during the quarter. Progress on the soft-launch of the company’s marketplace occurred during September. Available data was sourced and identified, pricing negotiated and data progressively uploaded for analysis and sale to Pointerra’s customers and partners.

Nevertheless, as a result of the decline in cash receipts, the company saw a net cash outflow from operating activities of $0.33 million for the quarter. Pointerra’s research and development spend was $0.34 million.

Contract value growth

Despite the company’s falling cash receipts, Pointerra saw strong annual contract value (ACV) growth. With the one month growth in ACV standing at US$0.95 million, this represented a 24% increase during the month of September. ACV now stands at US$4.93 million as of 30 September.

Pleasingly for shareholders Pointerra remains profitable on a ACV run-rate basis.

About the Pointerra share price

Pointerra provides cloud computing solutions for 3D geospatial data technology. The company processes 3D data and allows storage on the cloud, allowing for very large 3D datasets to be used without the need for high power computing. The company’s platform can be accessed anywhere from any device.

Pointerra’s share price has performed exceptionally since the cash injection from Tech entrepreneur Bevan Slattery in July. Its shares have risen 675% so far this year.

More reading

• Is this 1000% runner the next Nearmap (ASX:NEA) share price?

Motley Fool contributor Daniel Ewing owns shares of Pointerra Limited. 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 CV Check Ltd (ASX: CV1) share price has stormed higher today following a positive announcement before market open. At one point, the online technology company’s shares reached a high of 17 cents in early morning trade. The CV Check share price has since retreated to 15 cents, at the time of writing, up 7.14%.

This compares to the All Ordinaries Index (ASX: XAO) which is up 0.41% to 6,421 points.

What’s moving the CV Check share price?

The CV Check share price is on the rise after the company advised that its best-of-breed screening and verification solution is now available to the market. The new product is aimed at providing wholesale services to other large international screening and verification players.

The white label rollout will tick off the company’s strategic objective as previously announced.

Further to the update, CV Check signed United States employment screening specialist, NetForce Global LLC. The agreement will see NetForce become CV Check’s first international wholesale customer.

What did management say?

CV Check CEO, Mr Rod Sherwood, commented on the deal. He said:

In its FY2020 Annual Report, CV1 advised pre-commercialisation had commenced on the strategic project to take its white label technology beyond our current Australia and New Zealand base.

We are pleased to advise that our first major contract under this initiative has now been executed and we welcome NetForce Global as our first inbound international wholesale customer.

White label addressable market

The full-service screening and verification market comprises several thousand firms on a global scale. While most background checks occur within domestic markets, CV Check said that the international mobile workforce is increasing. Thus, companies like NetForce are able to rely on a trusted partner to screen any persons who are seeking employment.

In addition, both CV Check and NetForce are active members of the Professional Background Screening Association (PBSA). The international organisation represents the interests of companies offering background screening services and promotes a high level of ethics and performance standards.

Should you invest?

Over the course of the last six months, the CV Check share price has performed strongly. The company’s shares have risen over 114%, trading just below their 52-week high of 18 cents. As more companies continue to return to normal trading following the fallout of COVID-19, employment checks could be expected to surge. 

More reading

• Here’s why the CV Check (ASX:CV1) share price has soared 30% today

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

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The Nanosonics Ltd (ASX: NAN) share price is currently trading approximately 25% lower than its 52-week high.

Is this a buying opportunity for investors? I thought I would take a closer look to find out:

The good.

Nanosonics’ trophon EPR product is a best in class disinfection system for ultrasound probes. Over the last few years, the company has been growing its installed base at a consistently strong rate.

So much so, at the end of FY 2020 it had grown its installed base by 13% over the 12 months to 23,720 units. This is positive for two reasons. The first is the revenue it generates from unit sales, the second is the sales it then generates from the consumables it requires.

This means that as its installed base grows, so too do the recurring revenues from consumables. For example, full year consumables and service revenue was up 36% to $70.1 million in FY 2020. This now accounts for approximately 70% of its total revenue.

Another reason to be positive is the increased awareness of infection prevention because of the pandemic.

Management commented: “The COVID-19 pandemic has reinforced the importance of infection prevention and given increased prominence to this important topic, not just amongst the medical community but in all communities. The Company considers that this can only be positive for the longer term fundamentals of the business.”

The bad.

For several years now, Nanosonics has been promising to release new products targeting other unmet needs with similar addressable markets.

Given its great reputation, distribution channels, and expertise, the market has been very excited about these new products and have been using them to justify the premium its shares trade at. At present, Nanosonics’ shares are changing hands for 127x FY 2019 (pre-COVID) earnings.

However, these new products just keep getting pushed further and further back.

After first promising a new product back in FY 2017, according to Goldman Sachs, the latest estimate is now FY 2022.

Management explained: “Commercialisation of the new technology is no longer expected to be in FY21 but will likely be in FY22, with the ultimate launch timing continuing to be dependent on the necessary technical milestones being met as well as the timing of individual market regulatory approvals.”

My concern is that if the market starts to doubt this latest estimate, it could begin to take these products out of the equation, causing a significant de-rating of its shares.

The verdict.

While the delays are disappointing, I think it could still be worth buying and holding Nanosonics’ shares for the long term.

However, due to the premium its shares trade at and management’s habit of missing deadlines, I would suggest investors restrict an investment to just a small part of a balanced portfolio.

After which, when things become more certain, investors could consider increasing their holding.

More reading

• ASX 200 Weekly Wrap: Budget, US election sparks 5% surge in ASX shares
• These were the worst performing shares on the ASX 200 last week
• Are these 2 ASX 200 healthcare shares a buy yet? 
• ASX technology stocks to buy during this global tech sell-off
• Is the Nanosonics (ASX:NAN) share price in the buy zone?

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 Nanosonics Limited. The Motley Fool Australia has recommended Nanosonics 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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In afternoon trade the S&P/ASX 200 Index (ASX: XJO) is on course to bounce back with a solid gain. At the time of writing, the benchmark index is up 0.6% to 6,216 points.

Four shares that are climbing more than most today are listed below. Here’s why they are charging higher:

The Bank of Queensland Limited (ASX: BOQ) share price is up 2% to $6.86. Investors have been buying the regional bank’s shares after it was upgraded by analysts at Credit Suisse. According to the note, the broker has upgraded its shares to an outperform rating with a $7.60 price target. This follows the release of a better than expected FY 2020 result on Wednesday.

The BHP Group Ltd (ASX: BHP) share price has climbed 2.5% to $36.91. This appears to be down to improving sentiment in the mining sector today and its annual general meeting update on Wednesday afternoon. At the event, management advised that BHP was “very well positioned to weather uncertainty and to emerge from COVID-19 stronger, faster-paced and more focused.”

The Pro Medicus Limited (ASX: PME) share price has jumped 7.5% higher to $31.20. Investors have been buying the healthcare imaging software provider’s shares after it announced a milestone contract win in Germany. Pro Medicus has signed a seven-year deal with LMU Klinikum worth a total of A$10 million. The contract will see its Visage 7 technology deployed throughout LMU Klinikum’s radiology and subspecialty imaging departments.

The Redbubble Ltd (ASX: RBL) share price has surged 11.5% higher to $5.35. The catalyst for this was the release of the ecommerce company’s first quarter update this morning. For the three months ended 30 September, Redbubble reported a 116% jump in Marketplace Revenue to $147.5 million and a 149% increase in gross profit to $64.5 million. The Redbubble share price was up as much as 25% to a record high of $6.02 at one stage.

More reading

• ASX 200 up 0.9%: Big four banks rise, Pro Medicus jumps, miners charging higher
• Pro Medicus (ASX:PME) share price shoots higher on “milestone” deal
• Redbubble (ASX:RBL) share price on watch after delivering stellar Q1 growth
• 5 things to watch on the ASX 200 on Thursday
• ASX 200 flat: Bank of Queensland impresses, CSL guidance update, AUSTRAC clears Afterpay

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

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Monopolies are a strange thing (the economic concept, not the board game). They are technically illegal in Australia under consumer law. And fair enough too. If a company has monopolistic power, it has the potential to exploit its customers in order to maximise profits, unhindered by the competition that prevents most companies from doing so. Yet there are some companies out there that I believe are unquestionably monopolies, or at least have monopolistic powers.

Through systematic quirks or unique regulatory environments, these ASX ‘monopoly shares’ are allowed to operate as such (albeit usually with some restrictions). These arrangements can be highly lucrative for shareholders, for the reasons mentioned above. Here are 3 such ASX shares that you might want to consider today.

3 ASX ‘monopoly’ shares

Transurban Group (ASX: TCL)

Transurban can be considered a virtual monopoly in my view. That’s simply because it is the only company in Australia with a massive grip on the network of tolled-roads in the country. If there is a toll road in one of our capital cities, you can bet Transurban has its fingers in the pie. In Sydney alone, the company owns or operates at least five.

Transurban’s tolls are regulated by the government as a result. But most are still very generous arrangements – often giving Transurban the right to increase its tolls by at least 4% every year (an amazing arrangement when inflation is essentially zero). As such, I think Transurban is a top, long-term buy for ASX investors today, especially those who enjoy dividend income.

ASX Ltd (ASX: ASX)

Yes, the ASX is, in fact, an ASX-listed company in its own right. And guess what? In Australia when you buy shares, it’s usually on the ASX. There is an alternative that’s popped up in recent years known as Chi-X. But in reality, the ASX is a monopolistic company. It can pretty much charge companies listing on it what it likes in terms of fees. That’s clearly in the interests of ASX shareholders, who have enjoyed more than 100% in gains across the last five years alone.

I believe the ASX company is one of the most overlooked monopolies on the market today, and as such, I think it will continue to be a lucrative investment.

Sydney Airport Holdings Pty Ltd (ASX: SYD)

It’s all in the name with this one. Sydney Airport literally has a monopoly in terms of New South Wales air travel. There are other regional airports of course. But none are close to Sydney. And none service international flights with the same capacity (not that this is an issue right now). There is a second Sydney Airport currently being built (to be loquaciously known as Nancy Bird Walton Western Sydney International Airport) at Badgerys Creek. But this won’t be open until late 2026 at the earliest and will do little harm to Sydney Airport’s long-term profitability anyway in my view. 

Like the ASX, Sydney Airport has rewarded its shareholders handsomely over the last decade or so (at least before the pandemic). And while things won’t return to 2019 levels for some time in my opinion, the current Sydney Airport share price might represent a good long-term buying opportunity.

More reading

• 3 ASX dividend shares rated as buys by brokers
• Is Transurban’s (ASX:TCL) share price 18% undervalued?
• Why it’s always a good time to buy blue chip ASX shares
• ASX website crash reminds everyone it has a monopoly
• Are these beaten down blue chip ASX shares bargain buys?

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Transurban Group. 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 it’s a great idea to review your portfolio every few weeks and scour the market for new opportunities. There are some high-quality ASX shares that have provided investors with strong growth throughout the year.

With that in mind, I believe these ASX growth shares will continue to outperform the market for years to come.

Domino’s Pizza Enterprises Ltd (ASX: DMP)

Domino’s has experienced impressive growth due to the increasing popularity of pizzas during COVID-19. The company reported a solid result for the FY20 period with consumer demand shifting to take-away foods.

As a result, the Domino’s share price has been surging higher. Today, the Domino’s share price is trading at $86.88, just under 1% off its all-time high. And is likely to again break new territory before 2021.

Domino’s has been aggressively expanding its store network to further fuel its market leading appetite. The pizza chain operator plans to double its store network to 5,500 stores by 2033.

In addition, the company has been at the forefront of technological innovation. New partnerships with social media platforms and ordering technologies has created convenience for hungry customers, translating to sales for Domino’s.

JB Hi-Fi Limited (ASX: JBH)

One of Australia’s favourite retailers, JB Hi-Fi has achieved record sales since March with consumers spending big on household goods. Government stimulus measures have been a huge tailwind to the company’s performance this year. And with Christmas just around the corner, more growth could come.

Unemployment levels fell from 7.5% to 6.8% in August, hinting the economy is slowly getting back on track. JB Hi-Fi said its online and commercial operations has seen significant acceleration.

Furthermore, once Victoria reduces restrictions and opens up retail trading, JB Hi-Fi should be in for a bumper season. New phone releases and gaming consoles could be a massive push for the company’s top line growth.

At the time of writing, the JB Hi-Fi share price is swapping hands for $52.04, marginally down 1.03%. Following today’s fall, JB Hi-Fi is sitting slightly below its all-time high reached in August.

Pointsbet Holdings Ltd (ASX: PBH)

Pointsbet has made huge tailwinds in recent times, winning a new 5-year partnership agreement with sports media giant, NBC Sports. The corporate bookmaker’s share price sky rocketed more than 100% on the news. At the time of writing, the Pointsbet share price is down 2.38% to $11.88.

As the sporting industry slowly starts to come back to life, Pointsbet is likely to see a lift in earnings. The previously announced multi-year agreements with Pacers Sports & Entertainment, Kroenke Sports & Entertainment (KSE) and Twin River Management Group, will also start to generate revenue for the company.

Pointsbet recently competed a capital raise to support marketing costs across the United States, and further client acquisition and retention. The company should see its share price grow next year if it can deliver on its strategic goals.

More reading

• Why ASX gambling shares like PointsBet (ASX:PBH) have surged in 2020
• Top ASX tech shares to buy in October 2020
• Revealed: ASX Christmas winners and losers
• 3 unstoppable ASX shares to buy with $3,000
• 2 ASX 200 tech shares I don’t want to miss if the market rallies 

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

The post 2 ASX growth shares that I would buy in 2020 appeared first on Motley Fool Australia.

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Commonwealth Bank of Australia (ASX: CBA) shares have seen their reputation for dividends take a hit in 2020. In 2019, CBA shares paid out 2 dividends to its investors – an interim dividend of $2 and a final dividend of $2.31 per share.

In 2020, investors have also received 2 dividends – an interim dividend of $2 and a final dividend of 98 cents per share. That’s a total payout of $2.98 for 2020, in contrast from the $4.31 that shareholders received in 2019.

Not that this dividend cut is entirely CBA’s fault. The coronavirus pandemic and associated economic shutdowns have been devastating to the entire ASX banking sector. All of the banks have implemented ‘mortgage freeze’ policies for landlords and occupiers struggling to repay home loans. And various government policies have halted evictions on the grounds of financial difficulty. These are good policies for the economy and society in my view. But unfortunately, they are not good for banking profits.

On top of this, the banking regulator APRA (the Australian Prudential Regulatory Authority) implemented ‘guidance’ in April (read orders) that dictated that banks shouldn’t be paying substantial dividends in 2020 to maintain a precautionary buffer for the financial sector.

APRA later revised this advice in June, telling banking companies that they shouldn’t be paying out more than 50% of their earnings as dividends in 2020. CBA’s final dividend of 98 cents per share reflected this ‘guidance’, as it was roughly 50% of CBA’s half-year earnings.

Outlook for Commonwealth Bank share dividends

So now the history lesson is over, what can we expect from CBA in terms of dividends from here?

Well, according to reporting in the Australian Financial Review (AFR) this week, future dividend payments were discussed at CommBank’s annual general meeting on Tuesday. According to the AFR, CBA chair Catherine Livingstone told investors that the bank “hoped” to restore its dividend payout to around 75% of earnings, but added it was “too early to be precise on when this might occur”.

This sounds great for dividend investors. But let’s analyse what this might mean.

So in 2020, CBA delivered $4.21 in earnings per share (EPS), of which $2.98 was paid out as dividends. For the 6 months to 30 June, CBA generated roughly $1.96 in EPS, which the final dividend of 98 cents per share comes from (representing a payout ratio of 49.95%, falling within the APRA guidelines).

So if CBA was paying out 75% of earnings, like management is telling investors they would like to, the final dividend would have instead come in around $1.47 per share by my estimation.

That would give CBA shares an annualised dividend yield of 4.27% on current prices.

Foolish takeaway

Although the dividend outlook for Commonwealth Bank shares is brightening, I’m not even sure that the bank will deliver a 4.27% yield in 2021 (although its possible). The reality is that the entire ASX banking sector is facing some massive structural headwinds right now. I’m not confident we will see these headwinds subside for a number of years. As such, I simply think there are better options for ASX dividend income out there today.

More reading

• Why it’s always a good time to buy blue chip ASX shares
• ASX 200 jumps more than 1%, big ASX banks rise
• 3 reasons I don’t use stop-loss orders for ASX shares
• 3 takeaways from the Commonwealth Bank (ASX:CBA) annual general meeting
• 5 things to watch on the ASX 200 on Tuesday

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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It can be an interesting insight to know what brokers think of an ASX dividend share. The problem is that a single broker can be wrong or biased.

If you can get a consensus among brokers about which shares are best, then that may give a clue about what to buy and what to avoid.

Every so often MarketIndex collates the broker recommendations of 150 ASX shares and totals the buys, holds and sells for those shares. The higher or lower the average score the more of a strong buy, buy, hold, sell or strong sell that share is.

The below ideas have dividend yields above 5% and a market capitalisation above $1 billion. However, a high dividend yield can indicate a falling share price or limited growth prospects.

Here are three of the ASX dividend shares that fit the bill:

Aurizon Holdings Ltd (ASX: AZJ)

This is a large owner and operator of rail networks across Australia. It’s a large indirect beneficiary from the fact that Australia produces and exports a large amount of commodities.

It saw solid tonnage in ‘coal’ and ‘network’ in FY20, with the bulk business driven by new contracts and efficiency improvements.

In FY20 Aurizon grew its underlying earnings per share (EPS) by 15% to 27.2 cents, this helped grow the total FY20 dividend by 15% to 27.4 cents per share.

Everything related to the resource sector can be a bit unpredictable, but the medium-term looks fairly promising, though there’s a high reliance on Chinese demand.

At the current Aurizon share price it offers a trailing partially franked dividend yield of 6.7%. I think that’s a solid yield for an infrastructure ASX dividend share.

Charter Hall Social Infrastructure REIT (ASX: CQE)

As the name suggests, this is a real estate investment trust (REIT) which invests in social properties like early learning centres. However, it recently broadened its investment mandate to consider other properties.

For example, it recently announced the $122.5 million acquisition of a property that is under construction which will be the new corporate headquarters of Mater Misericordiae, Queensland’s largest Catholic not-for-profit health provider. The building will also be used for healthcare training facilities.

At 30 June 2020, it had a 99.5% occupancy rate of its 395 properties with a weighted average lease expiry of 12.7 years.

In FY21 it expects to pay distributions amounting to 15 cents per unit over the year, which translates to a distribution yield of 5.4%. That is a good starting yield for an ASX dividend share, which should grow as COVID-19 impacts subside.

Sydney Airport Holdings Pty Ltd (ASX: SYD)

Sydney Airport is the operator of Sydney’s main airport. It is currently seeing dramatically reduced air traffic because of the COVID-19 impacts and restrictions.

The Sydney Airport share price is still down by 30% compared to where it was in mid-January, despite Australia’s interest rate now being incredibly low.

Whilst its current earnings are not looking great, there is clearly an expectation that passengers will return at some point in the future, particularly if/when an effective COVID-19 vaccine is produced and distributed.

When passengers return, that will return Sydney Airport’s earnings to a more normal level and its dividends can begin flowing to shareholders again.

But who knows when passenger numbers will return to normal? If we assumed dividends per share of $0.22 per share, that would be a yield of 3.5%. Dividends of $0.39 per share would be a yield of 6.3%. That latter yield would be solid for an infrastructure ASX dividend share. It just depends how quickly passengers and earnings return to normal.

Foolish takeaway

Each of these ASX dividend shares offer compelling dividend potential. Sydney Airport is an interesting COVID-19 recovery idea. Though I’d probably go for Charter Hall Social Infrastructure REIT for my dividend pick because I’m not sure about the reliability of resources or when passengers will return to Sydney Airport.

More reading

• Why it’s always a good time to buy blue chip ASX shares
• Are these beaten down blue chip ASX shares bargain buys?
• The Sydney Airport (ASX:SYD) share price rebounds from early morning losses
• ASX 200 Weekly Wrap: Budget, US election sparks 5% surge in ASX shares
• Charter Hall Social Infrastructure REIT (ASX:CQE) announces acquisition

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Aurizon Holdings 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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