The COVID-19 recession has seen anxious Australians lock up their wallets to save their money.

Unfortunately for ASX-listed retailers, like Wesfarmers Ltd (ASX: WES), JB Hi-Fi Limited (ASX: JBH), Super Retail Group Ltd (ASX: SUL), Myer Holdings Ltd (ASX: MYR) and Harvey Norman Holdings Limited (ASX: HVN), Christmas is not expected to bring much joy.

Research firm IBISWorld revealed this week that negative shopper sentiment combined with high unemployment and tumbling discretionary incomes could devastate the sector.

“Consumer electronics retailing is expected to be 2.7% lower this December, relative to last Christmas. Department store turnover is expected to be 1.0% lower, at $2.8 billion,” said IBISWorld senior industry analyst Yin Yeoh.

“Although many households are likely to receive a cash injection from the recent Federal Budget, there is a high likelihood that these funds will be saved rather than spent, providing little help to the ailing retail sector.”

Consumer goods retail lost 15.8% in revenue over the 2019-20 financial year, and is forecast to dip another 2.1% in the current year.

The Christmas winners

Although in the minority, there are some retailers who will have a good time this Christmas.

For example, Australians are expected to drink away their worries this festive season. 

Alcohol retailing this December is expected to surge 3.6% year-on-year, to hit $1.6 billion, according to IBISWorld.

The theory is that Australians can’t holiday overseas this Christmas so they will be forced to spend within the country.

As such, the supermarket sector will also benefit.

Grocers like Woolworths Group Ltd (ASX: WOW),  Coles Group Ltd (ASX: COL), and  Metcash Limited (ASX: MTS) will be licking their lips at IBISWorld’s prediction that sales will increase 2.8% year-on-year this December, to reach $11.1 billion.

“Families are expected to go all-out on their Christmas feasts this year, with many Australians celebrating their ability to reunite with family after states reopen borders and ease social distancing regulations,” said Yeoh.

She warned, however, these companies aren’t necessarily up for a windfall.

“While the upcoming Christmas season provides major opportunities for supermarkets and liquor retailers, growing competition in these industries is expected to exert downward pressure on prices and profit margins.”

Christmas is now November

The last five years has seen Christmas shopping habits shift to November as American customs like Black Friday and Cyber Monday seep into Australia.

This pattern, IBISWorld says, will continue this year.

“A 7.8% decline in discretionary income this year is likely to cause some consumers to postpone expensive gadget purchases,” said Yeoh.

“However, consumers are still expected to take advantage of Cyber Monday and Amazon Prime sales. Other large players, such as JB Hi-Fi and Harvey Norman, are likely to offer discounts during the same period, in an effort to retain market share.”

Prospects for retailers next year are a bit brighter, although still very dependent on the ongoing pandemic.

“The outlook for the retail sector, and the economy overall, is largely dependent on the rate of new COVID-19 cases across the country,” Yeoh said.

“Australia is making promising progress in this regard, which should make retailers optimistic for a rebound next year.”

More reading

• 3 unstoppable ASX shares to buy with $3,000
• Why Woolworths is too expensive right now
• Ignore EBITDA and P/E ratios? This fundie does
• If you LOVE a Bunnings sanga, you might LOVE the stock…
• 2 of the best ASX dividend shares you can buy today

Motley Fool contributor Tony Yoo 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, Wesfarmers Limited, 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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The Telstra Corporation Ltd (ASX: TLS) share price will be on watch on Tuesday after the release of its annual general meeting presentation.

What did Telstra announce at its annual general meeting?

At the annual general meeting the telco giant provided investors with a breakdown on its performance in FY 2020 and the impacts of the pandemic on its operations.

But arguably the most important subject the company covered was its dividend for FY 2021.

The Telstra share price has come under significant pressure since the release of its full year results in August due to concerns that its earnings guidance for the year ahead implied a sizeable dividend cut.

However, as I have mentioned numerous times since then, Telstra’s accounting earnings are now notably lower than its free cash flows.

In light of this, I suggested that a switch to a free cash flow-based dividend policy would be more appropriate and could be a way for the company to maintain its 16 cents per share dividend.

At its annual general meeting, Telstra spoke about its dividend and the potential for such a shift in policy.

What did Telstra say?

Telstra’s Chairman, John Mullen, commented: “The board is acutely aware of the importance of the dividend to shareholders, and we understand the nervousness from some that COVID and other pressures may force Telstra to again cut its dividend.”

“Andy [Penn] has previously said that to maintain the dividend at 16c within our Capital Management framework post the nbn, we need to achieve Underlying EBITDA in the order of $7.5-$8.5b, and I want to assure you that we are absolutely aspiring to achieve this.”

“The board clearly understands the importance of the dividend and if necessary is prepared to temporarily exceed our capital management framework principle of paying an ordinary dividend of 70- 90% of underlying earnings to maintain a 16c dividend,” he added.

This would depend on several factors, which include:

“1. whether an underlying EBITDA of $7.5b to $8.5b post the rollout of the nbn is achievable. 2. whether the free cash flow dividend payout ratio remains supportive and we retain a strong financial position. 3. whether there are other factors that would make the payment of the dividend at that level imprudent,” Mr Mullen explained.

However, the chairman has warned investors that these comments are not “a guarantee of any level of dividend into the future.”  

Rather, it is to demonstrate “the board’s commitment to doing all that it can responsibly do to maintain the current dividend and eventually increase it again over time.”

More reading

• Telstra share price and 1 other ASX telecom trading near all time lows
• ASX 200 Weekly Wrap: Budget, US election sparks 5% surge in ASX shares
• Why I would buy these ASX dividend shares in October
• 4 high quality ASX blue chip shares to buy right now
• 3 reasons the Telstra (ASX:TLS) share price is a buy

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra 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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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.

Investing in the stock market is a proven way to grow wealth over time, and the sooner you get started, the better. But deciding how to invest can be challenging. If you opt for a collection of individual stocks, you’ll need to spend time researching each company and making sure it’s the right fit for your portfolio. If you go with index funds, you won’t have to put in the same amount of legwork, but you may lose out on certain benefits that individual stocks have to offer.

For many investors, index funds are actually a good way to go. But here’s why you may want to hand-pick your stocks instead.

Hand-picking your stocks allows you to choose companies that fit in with your personal investing strategy and appetite for risk. Say you’re really not keen on putting airline stocks in your portfolio because you think that’s a risky prospect given the hit the industry has taken during the coronavirus pandemic. If you buy S&P 500 Index (INDEXSP: .INX) funds, you’ll be stuck with airline stocks in your portfolio, whether you like it or not. By choosing your own stocks, you avoid companies or industries you’d rather steer clear of.

2. You can avoid stocks that don’t align with your ethics

Some people buy stocks because they believe in a company’s growth potential. Other people buy stocks because they believe in the products or services being offered by a particular company, or because they believe in its mission. As just mentioned, when you buy index funds, you don’t get to dictate which stocks land in your portfolio and which don’t. This means that if you have a problem with a specific company from an ethical standpoint, you could end up having to invest in it anyway.

Imagine you’re not a fan of tobacco companies. Since Philip Morris International Inc (NYSE:PM) is part of the S&P 500, if you buy funds based on that index, you’ll end up owning its shares, which could pose a moral dilemma for you.

3. You’ll have the potential to beat the market

Index funds aim to match the performance of the indexes they’re tied to – not beat it. If you want your portfolio to deliver returns that exceed those of the broader market, then you’ll need to assemble your own mix of stocks – ones with supreme growth potential and a clear edge over the competition. Beating the market isn’t easy, but with the right approach, it can be done – but not with index funds.

What’s the right move for you?

Ultimately, the decision to buy individual stocks versus index funds should boil down to how confident you are in your ability to choose the right companies, and how much time you’re willing to spend in the process. If you’re up for the challenge, then hand-picking stocks could be a great strategy that rewards you over time. But if you’d rather keep things simple on the investing front, then there’s nothing wrong with reverting to index funds and enjoying the automatic diversity they allow for.

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

More reading

• This ASX share is recession-proof
• 3 unstoppable ASX shares to buy with $3,000
• Telstra share price and 1 other ASX telecom trading near all time lows
• $10,000 invested in the CSL (ASX:CSL) IPO is worth how much now?
• 2 robust ASX 200 blue chip shares to buy today

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

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A fund manager has revealed his tip for an ASX share that might actually prosper during an economic downturn.

Pengana Capital Group Ltd (ASX: PCG) portfolio manager Chris Tan told The Motley Fool that his fund had kept an eye on automotive parts provider Bapcor Ltd (ASX: BAP) for “a long time”.

“It was always just a bit too expensive and COVID-19 allowed us the opportunity to buy it,” he said.

“We probably started buying in late February or early March, but we had done a lot of work on it and were able to just keep adding as it went down into the crazy times.”

Bapcor shares have risen almost 150% since the depths of the COVID-19 panic. They were trading for $7.85 at close of trade on Monday, after they were as low as $3.15 in late March.

“We see that as a business that is really, really resilient,” Tan said in this week’s Foolish Q&A. 

“Recession-proof almost.”

Tan explained that in times of economic distress, consumers tended to avoid buying new cars, preferring to maintain existing vehicles for longer.

“(With) new car sales shrinking for two years in a row, the fleet of second hand or older vehicles on the road is just getting larger,” he said.

“Bapcor will make their money servicing or supplying mechanics who service the after-warranty or second-hand car market.”

After performing a capital raising, the company is also in fine shape structurally.

“They’re now poised to consolidate more smaller competitors. So there’s good industry structure as well,” said Tan.

“There’s really [only] two main players, Bapcor and Repco… And there’s an Asian growth story further down the line as well.”

Read The Motley Fool’s full exclusive interview with Chris Tan right here.

More reading

• Why NEXTDC (ASX:NXT) and these ASX 200 shares just hit record highs
• Why Woolworths is too expensive right now
• ASX 200 ends higher, Link (ASX:LNK) share price shoots 24% higher
• Ignore EBITDA and P/E ratios? This fundie does
• Why the Bapcor (ASX:BAP) share price just zoomed to a record high

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bapcor. 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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There are some ASX shares that seem unstoppable with how much they have grown this year and how much growth potential they still have.

Businesses that are winning now could keep winning over the longer-term. Think of a business like CSL Limited (ASX: CSL) – it has been delivering for a very long time.

Here are three ASX shares that seem unstoppable and could be worth buying today:

JB Hi-Fi Limited (ASX: JBH)

JB Hi-Fi seemed like a business that could have been flattened when Amazon first arrived in Australia a few years ago. But it hasn’t done badly, indeed JB Hi-Fi has continued to thrive.

Despite the COVID-19 environment being supportive of new e-commerce businesses, JB Hi-Fi has continued to grow strongly.

In FY20 its total sales increased by 11.6% to $7.9 billion, underlying earnings before interest and tax (EBIT) shot up 30.5% to $486.5 million and underlying net profit after tax (NPAT) gained 33.2% to $332.7 million. The final dividend was increased by an astonishing 76.5%.

The company’s sales in July 2020 continued to be strong. JB Hi-Fi Australia total sales growth was 42.1% over the month. The Good Guys total sales growth for July 2020 was 40.4%. JB Hi-Fi New Zealand total sales growth for the month was 9.1%.

The ASX share also reported that its August sales were looking good, with strong online sales in Victoria.

I’m not sure how much JB Hi-Fi will grow over the rest of FY21, but I think it could continue to be a good option. Particularly after the economy-boosting budget that was just released by the Australian government.

At the current JB Hi-Fi share price it’s trading at 17x FY21’s estimated earnings.

Kogan.com Ltd (ASX: KGN)

This difficult COVID-19 period has made a large number of people try out online retailers such as Kogan.com which sells a large amount of products including phones, computers, cameras, appliances, furniture, clothes, tools, cars and so on.

FY20 showed a strong year of growth, gross sales rose by 39.3%, gross profit grew by 39.6%, adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) went up 57.6% to $49.7 million and net profit surged 55.9% to $26.8 million. The active customer base jumped 35.7% to 2,183,000.

The second half of FY20 showed even stronger numbers – gross sales, gross profit and adjusted EBITDA grew by 62.5%, 68.3% and 74.1% respectively.

The ASX share’s growth has continued into August 2020. Gross sales in August grew by 117% year on year, gross profit went up 165% and adjusted EBITDA rocketed higher by 466%.

Aside from being an online retail play, which Kogan.com is doing very well at, it’s also a broader e-commerce play. It sells a variety of other products like insurance, credit cards and superannuation. If it can attract some of its newer customers to take up those extra services, it will add incrementally to profit at a good margin.

At the current Kogan.com share price it’s trading at 37x FY23’s estimated earnings.

Redbubble Ltd (ASX: RBL)

Redbubble is a leading marketplace business for artist-produced products like wall art, masks, clothing and phone cases. It operates both Redbubble and TeePublic.

The ASX share has seen a surge of customers which has helped propel its financial results forward. In FY20 it grew its marketplace revenue by 36%, gross profit went up 42%, operating EBITDA jumped 141% and it generated free cash inflow of $38 million, compared to an outflow of $0.2 million in FY19.

The fourth quarter of FY20 saw marketplace revenue grow by 73%. In July 2020 it saw marketplace revenue grow by 132% with similar growth levels in the first two weeks of August.

An online marketplace can benefit from very pleasing networks effects. Not only does it benefit from economies of scale, but it also can generate interest simply by being one of the biggest operators. The more products that are on sale, the more potential customers it will attract. The more customers there are, the more potential sellers that will be drawn to Redbubble.

At the current Redbubble share price, it’s priced at 33x FY20’s free cashflow.

But all three of these ASX shares have seen very strong share price performances recently, so I’m keeping that in mind and also looking at other share opportunities at the moment.

More reading

• The Redbubble (ASX:RBL) share price is up 320% in 2020: Can it go higher?
• If you LOVE a Bunnings sanga, you might LOVE the stock…
• 2 hot e-commerce ASX shares to buy today
• Why this Federal Budget is good for many ASX shares
• Why the JB Hi-Fi (ASX:JBH) share price could soar into Christmas

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 CSL Ltd. and Kogan.com ltd. The Motley Fool Australia has recommended Kogan.com 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 3 unstoppable ASX shares to buy with $3,000 appeared first on Motley Fool Australia.

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Telstra Corporation Ltd (ASX: TLS) and TPG Telecom Ltd (ASX: TPG) are both trading near their all-time lows right now. The Telstra share price has certainly taken a beating over the last few years. The TPG share price seems to be following suit. Could they be worthy of an investment at current prices?

Performance

Telstra share price

The coronavirus pandemic was surprisingly harsh on the Telstra share price. To be honest, with such a large portion of the population working remotely, I’m surprised that the share price hasn’t recovered more. Almost every company I look at has either bounced back from the March lows or even exceeded previous highs in some instances. Telstra has gone in the opposite direction.

After a brief period of recovery between April and July, the Telstra share price has fallen dramatically. On 12 August, the Telstra share price plummeted from around $3.38 all the way down to $3.11 in a single trading day. After this, the price continued to fall, and currently sits around $2.78 today. Telstra’s all-time low share price sits at $2.55, which occurred at the very end of 2010. Since then the price rapidly recovered from $2.55 all the way up to $6.60 in 2015. It has been on a downward trend ever since. Its current price looks to be on its way for another retest of the telco’s all-time low. Will Telstra hold its ground here and begin to rise? 

TPG share price 

TPG is a relatively new company to the ASX, being listed around 30 June 2020. Its shares first listed at $8.49 and unfortunately have steadily fallen since then, down to today’s price of around $7.50. Twice this year already it has come close to its all-time low of $7.01. I’m curious now as to whether TPG will follow Telstra’s lead and continue down to that level again.

In my view, both companies represent a potential buying opportunity if they can hold their ground above these lows.

Dividends

Investors looking for a holistic analysis will be pleased to know that Telstra offers a current dividend yield of 5.78%. TPG has no history of issuing dividends, however when TPG announced a merger with Vodafone Hutchinson Australia in June, investors were treated to a ‘special dividend’ of around 52 cents per share. However, this special dividend does not really constitute a dividend yield.

Both the Telstra share price and the TPG share price are currently sitting low, however Telstra is ahead of TPG with the dividend factored in. 

Potential 

It’s hard to compare Telstra to TPG considering the age difference of the companies. TPG is certainly the up-and-comer in the telecom sector and obviously trying to take market share from Telstra. However, Telstra’s long history of being a strong company and a blue-chip stock mean it has loyal investors and a sizeable footprint in the market. Its ability to capitalise on future trends will often put Telstra ahead of its competitors, particularly for future developments.

One of those potential future developments is the 5G network. Telstra is in prime position to take advantage of any potential future rollouts of a 5G Network. They are also a large carrier of the Apple iPhone. Apple has recently hinted that its latest iPhone may be 5G compatible, so this could be a potential catalyst in the making. Telstra generally has its finger in every pie and while it may not be the latest and most exciting telecom on the block, it’s certainly a force to be reckoned with.

Foolish takeaway

In my personal opinion Telstra and TPG are 2 completely different companies and therefore quite hard to truly compare.

I see Telstra as more compatible for long-term investors, potentially those seeking more stable returns and a solid dividend payout.

TPG, on the other hand, is an exciting new contender that’s only been on the market for less than 6 months.

If I was looking to hedge my bets I might take a position in Telstra for stability and income and TPG for growth potential. The merger between TPG and Vodaphone was certainly an interesting move and could lead to an evolution of both the company and its competitive position in the market.

More reading

• ASX 200 Weekly Wrap: Budget, US election sparks 5% surge in ASX shares
• Why I would buy these ASX dividend shares in October
• 4 high quality ASX blue chip shares to buy right now
• 3 reasons the Telstra (ASX:TLS) share price is a buy
• 2 quality ASX dividend shares to buy before the RBA meeting

Motley Fool contributor Glenn Leese has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra 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 have been looking at IPOs recently to see how you would have fared if you had invested in them.

On this occasion, I have turned my attention to CSL Limited (ASX: CSL).

The Commonwealth Serum Laboratories was established in Melbourne in 1916 to service the health needs of a nation isolated by war.

Since then, it has gone on to become one of the world’s leading biotherapeutics companies and is saving millions of lives through the development of important therapies and vaccines.

The CSL IPO.

CSL was listed on the Australian share market in 1994 for a stock-split-adjusted price of $0.76 per share.

This means that if you invested $10,000 into the CSL IPO, you would have received 13,157 shares.

At the time of its listing, CSL was generating revenue of A$193 million a year. Whereas in FY 2020, CSL reported a 7.2% increase in sales revenue to US$8,797 million.

Unsurprisingly, this remarkable sales growth over the last quarter of a century has resulted in significant share price appreciation for shareholders.

In February, prior to the pandemic, the CSL share price hit a record high of $342.75. Today, the company’s shares are changing hands for $296.67.

This means that even though CSL’s shares are down 13.5% from their high, they are still up a remarkable 390x from their IPO price.

What does this mean for your original investment?

With the CSL share price at $296.67, the 13,157 shares you received when investing $10,000 into its IPO would have a market value of approximately $3.9 million today.

But it doesn’t stop there. Each year CSL shares a portion of its profits with shareholders in the form of dividends.

In FY 2021 the company is forecast to pay shareholders a dividend of $3.04 per share. If this proves accurate, those 13,157 shares will generate dividends of just under $40,000.

Foolish Takeaway.

It is worth remembering that CSLs are a rare breed and very few IPOs will be anywhere near as successful.

However, overall, I believe this demonstrates why buying and holding high quality companies can be a fantastic way to generate wealth over the long term.

More reading

• Ignore EBITDA and P/E ratios? This fundie does
• Leading brokers name 3 ASX shares to buy today
• ASX 200 Weekly Wrap: Budget, US election sparks 5% surge in ASX shares
• How anyone can become rich by investing in ASX shares
• ASX 200 down 0.2%: Big four banks drop, CIMIC jumps, CSL slides lower

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 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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I think there are some S&P/ASX 200 Index (ASX: XJO) shares that are robust and defensive, yet still offer good growth prospects.

Most ASX 200 shares are big enough that they offer good reliability. But I think they also need growth. The growth depends on the sector(s) they operate in. That’s why I like these options:

Goodman Group (ASX: GMG)

Goodman is the biggest ASX property business. It builds and owns industrial properties across the world in places including Australia, New Zealand, Europe, the UK and North America.

Industrial properties are growing increasingly important in this COVID-19 world. E-commerce is rapidly growing in demand compared to a year ago. Businesses want to improve their logistics and efficiency with the supply chain being impacted by COVID-19.

Despite everything that went on with COVID-19 during FY20, it managed to grow operating profit by 12.5% to $1.06 billion and operating earnings per share (EPS) rose by 11.4% to 57.5 cents – compared to initial guidance of growth of 9%.

The ASX 200 share has a really strong balance sheet for a real estate investment trust (REIT). Its gearing dropped to 7.5%, down from 9.7% in FY19. I think that makes it a much safer option compared to other REITs.

The business is one of the few REITs to deliver growth in its operating earnings and net tangible assets (NTA). The FY20 NTA per share increased 9.4% to $5.84.

Its property portfolio looks strong with an occupancy rate of 97.5% as well as like for like net property growth of 3%.

The ASX 200 share still has a lot of growth planned with $6.5 billion of work in progress across 46 projects.

The Goodman share price may seem expensive on traditional valuation metrics, but these really low interest rates may stay low for many years.

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

Investment house Soul Patts is one of the most robust ASX 200 shares in my opinion.

It has been listed since 1903, so it’s actually one of the oldest businesses in Australia. It has already survived through the first world war, the Spanish Flu, the Great Depression, the second world war, the GFC and various other historical events.

Soul Patts has a diversified portfolio of shares. It has large positions in defensive businesses like TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), Clover Corporation Limited (ASX: CLV), Milton Corporation Limited (ASX: MLT) and Bki Investment Co Ltd (ASX: BKI). It also has defensive unlisted positions like Ampcontrol, agriculture and swimming schools.

At 31 July 2020, its total shareholder returns (TSR) showed strong outperformance over the medium-term and the long-term. Its TSR outperformed the All Ordinaries Accumulation Index by 5.1% per annum over the previous five years and 5.2% per annum over the previous 20 years.

The ASX 200 share’s FY20 report was a mixed result because of COVID-19, but there were two highlights from the year for me. The TPG merger with Vodafone has finally happened, which should make a big difference for the longer-term profit outlook for TPG, and therefore it should help the value of those shares for Soul Patts. The investment house also reported that its net cash from its investments in FY20 rose by 48.8% to $252.3 million – this is an important profit measure because the net cash flow is what funds the dividend.

The investment house has increased its dividend every year since 2000. That’s a fantastic record, the best on the ASX. At the current Soul Patts share price it offers a grossed-up dividend yield of 3.3%.

More reading

• How to replace your entire wage with ASX dividend shares
• This is where I’d invest $1,000 right now into ASX shares
• 4 high quality ASX blue chip shares to buy right now
• Insiders have been buying these ASX shares this week
• Up 22% in a month, is the Soul Patts (ASX:SOL) share price a buy?

Tristan Harrison owns shares of 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 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 Monday the S&P/ASX 200 Index (ASX: XJO) continued its impressive run with yet another solid gain. The benchmark index rose 0.5% to 6,132 points.

Will the market be able to build on this on Tuesday? Here are five things to watch:

ASX 200 expected to storm higher.

It looks set to be another very positive day of trade for the Australian share market on Tuesday. According to the latest SPI futures, the ASX 200 is poised to open the day 44 points or 0.7% higher this morning. This follows a strong start to the week on Wall Street, which in late trade sees the Dow Jones up 0.9%, the S&P 500 1.6% higher, and the Nasdaq index a sizeable 2.5% higher.

Tech shares to rise?

A strong rise in the technology-focused Nasdaq index could be great news for the local tech sector on Tuesday. This is because the likes of Appen Ltd (ASX: APX) and Xero Limited (ASX: XRO) have a tendency to follow the lead of their U.S. counterparts. In late trade on Wall Street the Nasdaq index is up a sizeable 2.5%. A very strong gain by Apple is helping drive markets higher in the United States.

Gold price rises.

Gold miners including Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could be on the rise today after the gold price pushed higher. According to CNBC, the spot gold price is up 0.1% to US$1,928.40 an ounce. Overnight the price of the precious metal managed to reach a three-week high before giving back some of its gains.

Oil prices tumble lower.

It could be a difficult day for energy shares such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) after oil prices tumbled lower. According to Bloomberg, the WTI crude oil price is down 2.55% to US$39.56 a barrel and the Brent crude oil price is down 2.4% to US$41.81 a barrel. Traders were selling oil after production came back online in Libya, Norway, and the United States following recent stoppages.

Commonwealth Bank AGM.

The Commonwealth Bank of Australia (ASX: CBA) share price will be one to watch on Tuesday when it holds its annual general meeting. The banking giant could potentially release a trading update along with its meeting presentation. Shareholders will also have the opportunity to vote on items such as the bank’s renumeration report.

More reading

• Why NEXTDC (ASX:NXT) and these ASX 200 shares just hit record highs
• The Zip (ASX:Z1P) share price soars as Citigroup says 1Q update to surprise
• ASX 200 ends higher, Link (ASX:LNK) share price shoots 24% higher
• Why ASX oil stock laggards are well placed to bounce in the COVID recovery trade
• The Cann Group share price getting smoked after a strategic shareholder exits

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 Xero. The Motley Fool Australia owns shares of Appen 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 5 things to watch on the ASX 200 on Tuesday appeared first on Motley Fool Australia.

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The S&P/ASX 200 Index (ASX: XJO) has been in fine form this month and has surged notably higher.

And while the benchmark index is still trading well short of its 52-week high, that hasn’t stopped a number of ASX 200 shares from reaching new highs of their own.

Three shares that have just hit new highs are listed below. Here’s why they are on fire right now:

Bapcor Ltd (ASX: BAP)

The Bapcor share price hit a record high of $8.08 on Monday after the automotive aftermarket parts distributor released its first quarter update. Bapcor’s update revealed that trading has been very strong so far in FY 2021, with revenue up 27% compared to the first quarter of FY 2021. The key drivers of this growth have been its Retail and Specialist Wholesale businesses, which have recorded exceptionally strong sales. Management advised that this was driven partly by an increase in sales of second-hand cars, reduction in use of public and shared transport modes, and government stimulus.

NEXTDC Ltd (ASX: NXT)

The NEXTDC share price continued its remarkable run and hit a new record high of $13.25 yesterday. Investors have been fighting to get hold of the data centre operator’s shares this year after it experienced a surge in demand following the accelerating shift to the cloud caused by the pandemic. In addition to this, on Monday its shares were given a boost after it announced a new $1.5 billion debt facility. This debt facility has lowered the company’s cost of debt notably and positioned it for growth. NEXTDC also revealed that some of the facility is multi-currency. This could be a sign that it has its eyes on expanding internationally in the near future.

Northern Star Resources Ltd (ASX: NST)

The Northern Star share price rose to a new record high of $16.80 on Monday. This gold miner’s shares have been strong performers since announcing a merger with Saracen Mineral Holdings Limited (ASX: SAR). This merger will create a top 10 global gold company targeting production of 2 million ounces of gold per annum exclusively in tier-1 locations. Management also expects the merger to result in unique pre-tax synergies of $1.5 billion to $2 billion.

More reading

• ASX 200 ends higher, Link (ASX:LNK) share price shoots 24% higher
• Ignore EBITDA and P/E ratios? This fundie does
• Why Evolution, Link, Newcrest, & NEXTDC shares are charging higher
• NEXTDC (ASX:NXT) share price hits record high on debt update
• Why the Bapcor (ASX:BAP) share price just zoomed to a record high

Motley Fool contributor James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia owns shares of and has recommended Bapcor. 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 Why NEXTDC (ASX:NXT) and these ASX 200 shares just hit record highs appeared first on Motley Fool Australia.

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