There is one nascent theme that is the biggest investment opportunity since the invention of the internet, according to one fund manager.

Climate change will force a global transition from old high-emission industries to low-carbon technologies in the next couple of decades, said Munro Partners chief investment officer Nick Griffin.

“We conservatively estimate this will cost US$21 trillion (AU$27 trillion) over the next 30 years.

“This is going to be the biggest S curve of my investment lifetime. The one before was the internet — this is the next one.”

Likening it to the shift from horse carts to motor vehicles in the early 20th century, Griffin said both companies and sovereign nations are not just committing to token gestures any more.

“The US says they want to go to zero-carbon by 2050. China says they want to go to zero-carbon by 2050. Microsoft says they want to go to zero-carbon by 2050,” he told a GSFM briefing.

“They’re not saying ’emit less carbon’. They’re saying ’emit no carbon’.”

The fund manager said that one stock had already demonstrated the returns a green transition could bring, but it was just a preview.

“We’ve obviously seen one explode, which is Tesla Inc (NASDAQ: TSLA). There will be others,” he said.

“There’s lots of smaller companies here we think will grow over time. It’s going to be really a great place to invest for the next 20 years.”

Danish power company Oersted A/S (CPH: ORSTED) was an example of one of the bets Munro Partners have made.

While Joe Biden’s victory in the US has helped the impetus for green transition, Griffin said it would have happened anyway.

Forget cyclical, go thematic growth 

Climate now takes up 18% of Munro’s portfolio, but there are a couple of other themes the fund is also interested in.

Griffin understood why cyclical and value stocks are in favour at the moment. But he sees those only as short-term — 6 to 12 months — investment plays.

“But in the next 3 to 5 years if you are trying to find structural winners, we still think digital areas are the place to look.”

High-performance computing stocks (such as ASML Holding NV (AMS: ASML)) and e-commerce shares (like Hellofresh SE (ETR: HFG)) were also in favour at Munro Partners.

More reading

• Top fundie Hyperion to launch new growth ETF
• The worst mistake Tesla investors can make right now
• Stop worrying about a market crash: Do this instead
• Cathie Wood announces space ETF, what about the ASX space sector?
• Signal share price? An Elon Musk tweet and a WhatsApp controversy

Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Microsoft and Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Here’s the biggest investment opportunity since the internet appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3qsSbDI

The PolyNovo Ltd (ASX: PNV) share price is pushing higher this morning following the release of a couple of positive announcements.

At the time of writing, the medical device company’s shares are up 7% to $2.66.

What did PolyNovo announce?

This morning PolyNovo announced that it has expanded its presence in Europe by entering into both the Poland and Turkey markets.

In respect to Poland, the company has appointed Hortho Medical Innovations as its exclusive distributor in the country.

According to the release, Hortho distributes modern and innovative devices for medical reconstruction. This includes a number of complementary bio-absorbable implant technologies.

It also works closely with key opinion leaders in plastic/reconstructive surgery and has a direct team servicing all of Poland. Hortho plans to add dedicated personnel to support NovoSorb BTM sales and marketing activities.

The company notes that Poland is the sixth largest country in the European Union with a population of more than 38 million, and a medical device market valued at over $2.2 billion.

PolyNovo’s Managing Director, Paul Brennan, said: “Poland is an exciting growth market in Europe and we see this partnership as an important step in expanding our sales in Europe.”

What about Turkey?

Over in Turkey, PolyNovo has appointed Incomed Saglik Hiz and its medical sales channel LotuS as its distributor.

It notes that this expansion into the Europe-Middle East-Africa (EMEA) region is a big step in bringing NovoSorb BTM to a significant number of surgeons and patients in the region.

LotuS has an established product portfolio and sales relationships within wound and burn treatment. It also has over 10 years’ experience launching innovative devices through its extensive customer base.

Management advised that LotuS is the distributor of Suprathel (an artificial wound and burn dressing) and is familiar with the benefits of synthetic products in the treatment of complex surgical wounds. NovoSorb BTM will complete its plastic and reconstructive surgery offering.

Mr Brennan commented: “We are excited by our partnership with LotuS mcd and our entry into Turkey. The country is an important geographical and commercial link in our European, Mediterranean and Middle East strategy. We will now be able to service surgeons who work across EMEA and expand the inter-surgeon referral of the benefits of NovoSorb BTM.”

More reading

• ASX 200 Weekly Wrap: ASX drops despite promises of more US stimulus
• These were the worst performing ASX 200 shares last week
• Why Advance Nanotek, Polynovo, Resolute, & Tyro shares are dropping lower
• ASX 200 up 0.4%: Afterpay hits record high, bank shares rise, Resolute disappoints
• Why this broker sees little upside to the Polynovo (ASX:PNV) share price 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 POLYNOVO FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the PolyNovo (ASX:PNV) share price is zooming 7% higher today appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3sH4XjF

The Regis Healthcare Ltd (ASX: REG) share price has come under pressure on Wednesday morning.

At the time of writing, the aged care operator’s shares are down a sizeable 11% to $1.65.

Why is the Regis Healthcare share price sinking lower?

Investors have been selling the company’s shares this morning following the release of an update by Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) on its takeover approach.

Back in September, Washington H. Soul Pattinson (WHSP) submitted a non-binding, indicative proposal to acquire Regis Healthcare.

WHSP tabled an offer of $1.65 per share to acquire the company, which represented a 48% premium to the one-month volume weighted average price (VWAP) of Regis shares on 29 September 2020.

This approach was rejected by the company, leading to WHSP coming back with an improved offer in November.

The investment house, together with its partner Ashburn Pty Ltd, an entity controlled by Bryan Dorman (a co-founder and major shareholder of Regis Healthcare), made a non-binding, indicative proposal to acquire Regis for $1.85 per share via a scheme of arrangement.

This offer was subject to due diligence and represented a 59% premium to the one-month VWAP of Regis shares on 19 November 2020.

WHSP believes that the two proposals provided Regis shareholders with a highly attractive opportunity to realise value for their shares in light of the significant uncertainty and funding challenges currently facing the aged care industry.

However, with both proposals being rejected by the board of Regis and WHSP apparently unwilling to go higher, it has now withdrawn its non-binding indicative proposal and also ceased its association with Ashburn Pty Ltd and Bryan Dorman.

At the time of writing, Regis Healthcare has not responded to this news. However, it previously stated that it believes it “materially undervalues the company given its medium to long term prospects and does not offer fair value to shareholders.”

More reading

• 3 top ASX dividend shares to buy for income
• 3 ASX 200 shares that keep growing their dividends
• Got money to invest for income? Here are 3 ASX 200 dividend shares
• 3 ASX dividend shares with yields above 4%
• Why the Summerset (ASX:SNZ) share price is in focus today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Here’s why the Regis Healthcare (ASX:REG) share price is crashing 11% lower appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3p1Qc8W

Diehard BNPL investors have something new to cheer about as they have a new reason to believe in the Afterpay Ltd (ASX: APT) share price.

After returning a 15-fold return since the depth of the COVID-19 market crash last year, there were bound to be questions about Afterpay’s valuation.

But if hiring intentions are any guide, there are reasons to be optimistic about the APT share price and that of its peers.

Job ads signal for Afterpay share price

Citigroup tracked job ads in the December half and found a big increase among several ASX tech stocks.

Hiring intentions are typically a good indicator for growth. Companies will only take on staff to cope with stronger demand for their goods and services, or anticipate material growth on the horizon.

The broker also pointed out that job ads reflect management confidence in their outlook, and in some cases strengthening balance sheets from capital raisings.

Gearing up for a big 2021

Two ASX tech stocks that tapped investors for capital recently include Zip Co Ltd (ASX: Z1P) and Nearmap Ltd (ASX: NEA).

While Afterpay was actively ramping up hiring, it wasn’t the most aggressive, according to Citi.

“As a % of existing headcount, Zip had the highest listings followed by Afterpay with job listings in the December half representing 59% and 55% of total headcount, respectively,” said the broker.

“We see this as a function of ongoing investment driven by strong growth as well as geographical and product expansion and note that both companies have the highest revenue growth outlook within our coverage.”

ASX tech stocks with biggest growth ambitions

It’s also worth noting that Zip’s hiring activity was focused on the US where its ramping up Quadpay.

Meanwhile, Nearmap’s job listings jumped to 35 in the second quarter of FY21 compared to 14 in the first quarter.

But if you were wondering who topped the job ad leader board, it’s not either of these buy now pay later (BNPL) ASX darlings. The crown goes to the Xero Limited (ASX: XRO) share price.

“Xero had the highest number of listings in the December half, with hiring activity improving after slowing in the June quarter,” explained Citi.

“While we see this as a positive signal and points to improving trading conditions, the fact that Xero had the highest listings is not surprising when considering that Xero has the largest headcount within our coverage.”

ASX tech stocks on hiring freeze?

On the flipside, the level of job activity doesn’t bode well for the Altium Limited (ASX: ALU) share price and WiseTech Global Ltd (ASX: WTC) share price.

The broker noted both of these tech stocks had the lowest listings as a percentage of existing headcount in 1HCY20.

More reading

• 2 high quality ASX growth shares to buy immediately
• Broker lists the best ASX stocks to own for an up to 30% gain in 2021
• ASX 200 Weekly Wrap: ASX drops despite promises of more US stimulus
• 3 great ASX tech shares to buy
• 3 reasons why Xero (ASX:XRO) shares could be a buy

Brendon Lau owns shares of Nearmap Ltd. Connect with him on Twitter @brenlau.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nearmap Ltd. and Xero. The Motley Fool Australia owns shares of AFTERPAY T FPO and WiseTech Global. The Motley Fool Australia has recommended Nearmap Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post One bullish growth signal for the Afterpay (ASX:APT) share price in 2021 appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/2M3sHOr

The BHP Group Ltd (ASX: BHP) share price will be on watch today following the release of its second quarter and half year production update.

How did BHP perform in the second quarter?

The Big Australian had a solid finish to the half thanks to record production at Western Australia Iron Ore (WAIO) and record average concentrator throughput at Escondida.

BHP reported iron ore production of 62,394kt for the second quarter and 128,434kt for the first half. This represents a 3% and 6% increase, respectively, on the prior corresponding periods.

Despite an improvement in copper production over the first quarter, second quarter production was 6% lower than the prior corresponding period at 428kt and 5% lower for the half at 841kt.

BHP’s petroleum production fell 16% on the prior corresponding period to 24Mmboe during the second quarter. This led to a 12% decline in half year production to 50Mmboe.

Overall, this was a largely mixed performance in comparison to the market’s expectations. For example, Goldman Sachs was forecasting quarterly iron ore shipments of 69.3Mt, copper production of 382kt, and petroleum production of 25.6Mmboe.

Commodity price update.

During the first half the company has benefited greatly from an increase in commodity prices since the end of FY 2020.

A few key increases include a 35% improvement in the average realised price of iron ore to US$103.78 a tonne, a 39% jump in copper to US$3.32 a pound, a 10% lift in oil price to US$41.40 a barrel, and a 22% rise in the nickel price to US$15,140 a tonne.

This was offset slightly by weakness in coal and LNG prices during the last six months.

Outlook.

BHP has provided an update on its guidance for the full year. Management revealed that its iron ore guidance has increased to between 245Mt and 255Mt, reflecting the restart of Samarco in December 2020.

Its copper guidance has narrowed to between 1,510kt and 1,645kt from between 1,480kt and 1,645kt. And finally, its petroleum guidance remains unchanged at between 95 and 102 MMboe. However, volumes are expected to be in the upper half of the guidance range as additional production from Shenzi is partially offset by the impacts of significant hurricane activity in the Gulf of Mexico.

BHP’s full year unit cost guidance remains unchanged for the 2021 financial year.

One slight negative is that its upcoming half year results will include an impairment charge of between US$1.15 billion and US$1.25 billion post tax in relation to New South Wales Energy Coal (NSWEC) and associated deferred tax assets.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Leading brokers name 3 ASX shares to buy today
• ASX dividends: Are miners the new bank shares?
• Can iron ore keep pumping the share prices of these ASX miners?
• Wilson Asset Management thinks these 2 ASX shares are a buy

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

The post BHP (ASX:BHP) share price in focus following first half update appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/2KvvxeD

Respected fund manager Wilson Asset Management (WAM) has recently identified two ASX shares that it owns in its portfolio.

WAM operates several listed investment companies (LICs). Two of those LICs are WAM Capital Limited (ASX: WAM) and WAM Leaders Ltd (ASX: WLE).

There’s also one called WAM Research Limited (ASX: WAX) which looks at smaller businesses on the ASX.

WAM says WAM Research invests in the most compelling undervalued growth opportunities in the Australian market.

The WAM Research portfolio has delivered gross returns (that’s before fees, expenses and taxes) of 15.8% per annum since the strategy changed in July 2010, which is superior to the S&P/ASX All Ordinaries Accumulation Index return of 8.9% per annum.

These are the two ASX shares that WAM outlined in its most recent monthly update:

Imdex Limited (ASX: IMD)

WAM described Imdex as a mining services and technology company that develops drilling optimisation products and sensor for mining companies to conduct minerals exploration. According to the ASX, Imdex has a market capitalisation of $664 million. 

The fund manager said that the company is set to benefit from increasing commodity prices in gold, copper, and iron ore, which form 82% of its commodity exposure and should contribute to increased levels of exploration expenditure in 2021.

Imdex has a net cash balance sheet and WAM thinks the company has the potential to make earnings accretive acquisitions.

In FY20 the ASX share saw its net profit decline by 17% to $21.8 million, however operating cash flow improved by 31% to $52.4 million.

In July 2020, Imdex acquired AusSpec International, which the company said was the world’s leading provider of spectral mineralogy through its platform. The co-founder of AusSpec is described as the world’s leading spectral mineralogy expert who has built an extensive spectral library over the past five years.

Imdex said that AusSpec has a four-year consistent and profitable growth profile and generates revenue through a software as a service (SaaS) model. The acquisition was immediately cashflow positive.

Australian Finance Group Ltd (ASX: AFG)

The fund manager said that this ASX share operates the largest aggregation platform of mortgage brokers in Australia, with around 3,000 brokers offering business finance, insurance and securitised products. According to the ASX, Australian Finance Group has a market capitalisation of $730 million.

With the company leveraged to new loan originations and refinancing for homeowners, the fund manager sees a positive outlook for the company going forward, driven by a combination of record low interest rates, government stimulus measures and improving consumer confidence.

Australian Finance Group recently gave an update at its annual general meeting (AGM). The quarter ending 30 September 2020 was a record quarter of lodgement activity in the residential broking division. October volumes continued with that momentum.

Significant government incentives at both a federal and state level have targeted the first home buyer market. Due to that, according to the company, the first home buyer market share activity has increased to 23% in October, up from 15% in the same period last year.

Looking at October trading showed increases in lodgements across the country. Lodgement volumes for October exceeded $6.7 billion for the ASX share. That was the highest the company has ever achieved and represented a 16% increase from October last year. WA saw the largest percentage increase in volume with lodgements increasing 41% from the same period last year. Queensland growth was 30%, South Australian growth was 25%, NSW growth was 7% and Victoria growth was 11%.

More reading

• Wilson Asset Management (WAM) thinks these 2 ASX shares are a buy
• 4 ASX shares that helped this fund outperform in December
• Top fundie names these 2 ASX shares as buys

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

The post Top fundie names these 2 ASX shares as buys appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3iv6lRK

With earnings season on the horizon, I thought I would start to take a look at what is expected from some of Australia’s most popular companies.

On this occasion, I’m going to take a look at supermarket giant Coles Group Ltd (ASX: COL).

What is expected from Coles in the first half of FY 2021?

With the Coles share price up strongly over the last 12 months, expectations certainly are high for the company next month.

According to a note out of Goldman Sachs, its analysts are expecting Coles to reported group sales of $20,585.9 million for the half, which will be an increase of 9.2% on the prior corresponding period.

This is expected to be driven by an 8.7% jump in Food sales to $18,022.6 million, a 16% jump in Liquor sales to $1,961.9 million, and a 5.1% increase in Coles Express sales to $601.4 million.

In respect to earnings, Goldman is forecasting earnings before interest, tax, depreciation and amortisation (EBITDA) of $1,784.2 million for the half. This will be a 7.2% increase on the prior corresponding period.

And on the bottom line, an underlying net profit after tax of $540.4 million has been pencilled in. This represents a 10.5% increase on the same period last year.

Finally, the broker expects this strong form to lead to the Coles board declaring an interim fully franked dividend of 34 cents per share, which will be a 13.3% increase on last year’s interim dividend.

Is the Coles share price in the buy zone?

According to the note, Goldman Sachs believes the Coles share price is in the buy zone right now.

This morning it has retained its buy rating and lifted its price target on the company’s shares to $21.10.

Based on the current Coles share price, this implies a potential total return of ~22% over the next 12 months including dividends.

More reading

• ASX 200 Weekly Wrap: ASX drops despite promises of more US stimulus
• 2 high quality ASX dividend shares to buy
• Got money to invest for income? Here are 3 ASX 200 dividend shares
• 2 ASX dividend shares for income investors
• 3 ASX dividend shares with yields above 4%

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

The post What to expect from the Coles (ASX:COL) first half result appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3oZgN6x

Given the state of the economy and inflation, it seems highly unlikely that interest rates will be going higher any time soon.

In fact, the Westpac Banking Corp (ASX: WBC) economics team expect rates to remain on hold until at least the end of 2022.

After which, if rates do start to rise, it will be almost certainly be a gradual process and take several years until they return to previous levels again.

While this is disappointing for income investors, all is not lost. The Australian share market is home to a good number of companies that look set to offer very generous dividend yields over the coming years.

But which dividend shares should you buy? Here are two that come highly rated right now:

Accent Group Ltd (ASX: AX1)

Accent is a leading leisure footwear-focused retailer that owns a number of popular retail store brands. It has been a strong performer in FY 2021, delivering first half like for like sales growth of 12.3% excluding stores closures. This performance went down well with Citi, which has put a buy rating and $2.60 price target on its shares. In addition, Citi is expecting the company to pay an 11 cents per share dividend in FY 2021. Based on the current Accent share price, this represents a fully franked 4.7% dividend yield.

Rio Tinto Limited (ASX: RIO)

Thanks to favourable copper and iron ore prices, this mining giant has been tipped to pay bumper dividends to investors in FY 2021. According to a note out of Macquarie, it is expecting the mining giant to pay an ~$8.78 per share fully franked dividend this year. Based on the current Rio Tinto share price, this represents a massive 7.3% dividend yield. The broker has an outperform rating and $127.00 price target on its shares. 

More reading

• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 up 1.2%: Bingo rockets, Rio Tinto update, Domino’s jumps
• Why the Rio Tinto (ASX:RIO) share price will be on watch today
• ASX dividends: Are miners the new bank shares?
• Can iron ore keep pumping the share prices of these ASX miners?

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

The post 2 outstanding ASX dividend shares to buy appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3is6V2R

The Australian share market is home to a large number of companies that have been tipped to grow strongly in 2021 and beyond.

Two that you might want to get better acquainted with are listed below. Here’s what you need to know about them:

Altium Limited (ASX: ALU)

The first growth share to consider is Altium. If you look inside most electronic devices you will find a printed circuit board (PCB). These circuit boards have highly complex designs and are integral to the operation of these devices. This means specialist software is usually required to design and manufacture them.

Altium is a leading PCB design software company which is aiming to dominate the industry with its Altium Designer and cloud-based Altium 365 platforms. The latter in particular is being seen as the main driver of growth in the future and the key to it achieving its target of 100,000 subscribers and US$500 million in revenue by FY 2026. This compares to its subscribers of 51,000 and revenue of US$189 million in FY 2020.

And while the pandemic is having an impact on demand for its platform right now, management remains very positive on its long term growth trajectory.

One broker that remains confident on the company’s prospects is Credit Suisse. Its analysts have an outperform rating and $35.00 price target on the company’s shares. This compares to the current Altium share price of $28.75.

Xero Limited (ASX: XRO)

Another growth share to look at is Xero. After starting life as an accounting software provider, Xero has successfully evolved into a full service cloud-based small business solution over the last few years.

This has underpinned very strong customer and recurring revenue growth. For example, at the end of the first half of FY 2021, Xero reported a 19% lift in subscriber numbers to 2.45 million and a 21% increase in operating revenue to NZ$409.8 million.

Since that the release, the company has raised US$700 million to support its growth. Given its substantial cash balance, there is speculation Xero could be plotting a major acquisition in the near future. Especially given its track record of making bolt-on acquisitions that strengthen its offering. One of these was the acquisition of cloud-based lending platform Waddle for $80 million in August last year.

Analysts at Goldman Sachs are very positive on Xero. The broker recently put a buy rating and $157.00 price target on its shares. Goldman believes Xero can grow its subscribers to 7.4 million by 2030 and generate NZ$3.4 billion in annual revenue from them. After which, it sees opportunities for strong multi-decade growth thanks to its expanding total addressable market.

More reading

• ASX 200 Weekly Wrap: ASX drops despite promises of more US stimulus
• 3 great ASX tech shares to buy
• 3 reasons why Xero (ASX:XRO) shares could be a buy
• These were the worst performing ASX 200 shares last week
• 2 fantastic ASX shares to buy and hold until 2031

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

The post 2 high quality ASX growth shares to buy immediately appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3a1SwH1

This article is about three top ASX dividend shares that are known for their income payments to investors.

The official Reserve Bank of Australia (RBA) interest rate is now just 0.25%, meaning that many dividend yields are now materially higher.

Here are three ASX dividend shares that have kept increasing the dividend through COVID-19:

Rural Funds Group (ASX: RFF)

Rural Funds is an agricultural real estate investment trust (REIT) that owns a variety of farm types including cattle, almonds, macadamias, vineyards and cropping (sugar and cotton).

The business enters into long leases with high-quality tenants to ensure income certainty. It currently has a weighted average lease expiry (WALE) of more than 10 years.

Some of the ASX dividend share’s tenants include large players like Olam, JBS, Select Harvests Limited (ASX: SHV), Treasury Wine Estates Ltd (ASX: TWE) and Australian Agricultural Company Ltd (ASX: AAC).

Rural Funds aims to increase its distribution by 4% each year for investors. This is achieved through a combination of contracted rental indexation and re-investing into productivity improvements at the farms.

Based on FY21 distribution guidance of 11.28 cents per unit, Rural Funds has a forward distribution yield of 4.5%.

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

Soul Patts has the longest dividend growth streak on the ASX. It has grown the dividend every year since 2000.

Operating as an investment conglomerate, WHSP has a diversified portfolio of assets.

The ASX dividend share is invested across industries like telecommunications, building products, resources, listed investment companies (LICs), financial services, luxury retirement homes, agriculture and swimming schools.

In terms of actual names, its two biggest holdings are TPG Telecom Ltd (ASX: TPG) and Brickworks Limited (ASX: BKW).

Soul Patts receives annual investment income from its portfolio. It pays for its annual operating expenses and then pays out a good portion of the remaining net cashflow as the growing dividend.

At the current Soul Patts share price it has a grossed-up dividend yield of 3%.

APA Group (ASX: APA)

This ASX dividend share owns a large network of 15,000km of natural gas pipelines around Australia with a presence in every mainland state and the Northern Territory. It also owns or has interests in gas storage facilities, gas-fired power stations and renewable energy generation (wind and solar farms). APA owns, or manages and operates, a portfolio of assets and delivers half the nation’s natural gas usage.

The infrastructure giant has increased its distribution every year for a decade and a half. That’s one of the longest records on the ASX behind Soul Patts.

It recently announced an investment of up to $460 million to construct a new 580km pipeline in Western Australia to connect emerging gas fields in the Perth Basin to the resource rich Goldfields region, forming an interconnected WA gas grid. This is expected to be operational around the middle of 2022. Each time APA expands its pipeline in WA, it receives more requests for connection from miners wanting a reliable and affordable energy source, complementing variable renewable energy sources.

A couple of weeks after that, APA announced a two phased power expansion agreement with an existing customer, Gruyere Gold Mine in Western Australia, which will increase total installed capacity by 45%. The agreement includes the creation of the Gruyere Hybrid Energy Microgrid, APA’s first hybrid energy microgrid investment. Total capital expenditure for all expansion work will be approximately $38 million.

The ASX dividend share funds its distribution from the operating cashflow from its various assets. As more projects come online, APA generates more cashflow.

At the current APA share price, it has a distribution yield of 5.3%.

More reading

• 2 ASX dividend shares with 4%+ yields
• 3 ASX 200 shares that keep growing their dividends
• 3 ASX dividend shares with large yields and consistent payouts
• Are these 2 beaten-up ASX shares turnaround ideas?
• Got money to invest for income? Here are 3 ASX 200 dividend shares

Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks, RURALFUNDS STAPLED, Treasury Wine Estates Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of APA Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post 3 top ASX dividend shares to buy for income appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3oZZQsQ