At lunch on Wednesday the S&P/ASX 200 Index (ASX: XJO) is on course to make it three days of declines in a row. The benchmark index is currently down 0.3% to 6,660.7 points.

Here’s what has been happening on the market today:

Premier Investments update impresses.

The Premier Investments Limited (ASX: PMV) share price is surging higher today. The catalyst for this has been an impressive trading update which included guidance for the first half of FY 2021. For the 27 weeks ending 30 January, the conglomerate expects its retail segment to achieve earnings before interest and tax (EBIT) of between $221 million to $233 million. This will be up between 75% and 85% on the 26 weeks ended 25 January 2020. Strong like for like sales and cost management have driven the stellar growth.

Altium sinks lower.

The Altium Limited (ASX: ALU) share price has come under pressure again on Wednesday. Investors have been selling the electronic design software provider’s shares after it revealed that COVID-19 had impacted its sales during the first half. As a result, Altium is expecting to deliver revenue of around US$89.6 million for the six months, which will be down 3% on the prior corresponding period. This morning analysts at Macquarie responded to the update by retaining their neutral rating but cutting their price target by 11.5% to $31.00.

Energy shares push higher.

One area of the share market pushing higher on Wednesday is the energy sector. The likes of Beach Energy Limited (ASX: BPT) and Santos Ltd (ASX: STO) are recording solid gains after oil prices pushed higher overnight. At the time of writing, the S&P/ASX 200 Energy index is up a solid 3.2% to 8,977.1 points.

Best and worst ASX 200 performers.

The best performer on the ASX 200 today has been the Premier Investments share price with a sizeable 14% gain. This follows the release of its update. The worst performer has been the PolyNovo Ltd (ASX: PNV) share price with a decline of 7%. Investors have been selling the medical device company’s shares following the release of a trading update this week.

More reading

• Why Afterpay, Altium, Mesoblast, & PolyNovo shares are dropping lower
• Why Oil Search, Praemium, Premier Investments, & Universal Store are storming higher
• Here’s why the Premier (ASX:PMV) share price just hit an all-time high
• Is the Altium (ASX: ALU) share price in the buy zone after its update?
• Here’s why the Universal Store (ASX:UNI) share price is surging 10% higher

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 POLYNOVO FPO. The Motley Fool Australia owns shares of and has recommended Premier Investments Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Afterpay Ltd (ASX: APT) has taken a breather in recent weeks after running to an all-time record high of $123.40 on 18 December 2020. Despite the company’s ballooning valuation, big brokers are still edging their Afterpay share price targets higher. 

Recent breather for the Afterpay share price 

The Afterpay share price has been choppy in recent weeks, largely driven by movements in the broader market and tech sector. The company has not announced any market sensitive news or updates since 2 December 2020 regarding new monthly sales milestone in November. 

US politics has been a key driver of the heightened level of volatility in the tech sector. Last Thursday, the Democrats were poised to take control of the Senate, threatening increased regulation. 

The control of the Senate spells good news for incoming President Joe Biden’s agenda on issues including healthcare, the environment, government reform and the economy. Experts see this victory as a potential rotation away from tech shares into more cyclical sectors, similar to what the market experienced back in October and November last year. 

Brokers keen on Afterpay 

Citi is the first broker to upgrade its Afterpay share price target in the new year. The broker raised its price target from $97.75 to $115 with a neutral rating on Tuesday. 

Other brokers have yet to provide updates for Afterpay in 2021. 

Morgan Stanley previously retained an overweight rating with a $120 price target on 3 December 2020. The broker notes that Afterpay’s November sales were ahead of expectations and operations appear to be on track. 

Credit Suisse initiated coverage on 7 December 2020 with an outperform rating and $124 price target. The broker anticipates a strong growth outlook to underpin strong financial performance and investor returns. 

Goldman Sachs retained its neutral rating and $99.90 price target on December 7. There was no change in rating or target after reviewing the November milestone. 

Afterpay in 2021 

Afterpay has hinted at a few things that investors can look forward to in 2021. 

Its first steps into the rest of Europe is currently pending the approval from the Bank of Spain. The company’s acquisition of Pagantis in Europe will allow the company to launch into Spain, France and Italy immediately. 

Afterpay is also eyeing the South Asia market after establishing a base in Singapore. While no official plans are set, the company is looking to develop a strategy to enter this new market. 

More reading

• Why Afterpay, Altium, Mesoblast, & PolyNovo shares are dropping lower
• Afterpay and Creso Pharma were among the most traded shares on the ASX last week
• The biggest ASX bulls are about to get their faith tested
• ASX 200 down 0.4%: Afterpay tumbles, bank shares lower, gold miners crash
• Why the Afterpay (ASX:APT) share price has rocketed 250% in 12 months

Motley Fool contributor Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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In morning trade the S&P/ASX 200 Index (ASX: XJO) is on course to record another decline. At the time of writing, the benchmark index is down 0.15% to 6,667.8 points.

Four shares that have fallen more than most today are listed below. Here’s why they are dropping lower:

Afterpay Ltd (ASX: APT)

The Afterpay share price is down 1.5% to $110.25. The tech sector has come under pressure again on Wednesday amid a rotation to value and cyclical stocks. This has led to the S&P/ASX All Technology Index (ASX: XTX) falling 1% today. On Tuesday analysts at Citi held firm with their neutral rating but lifted their price target on the company’s shares to $115.00.

Altium Limited (ASX: ALU)

The Altium share price is down almost 5% to $28.68. Investors have been selling this electronic design software company’s shares since the release of its first half guidance on Tuesday. This morning analysts at Macquarie responded to the disappointing update by retaining their neutral rating but cutting their price target by 11.5% to $31.00.

Mesoblast limited (ASX: MSB)

The Mesoblast share price has fallen over 5.5% to $2.45. This appears to have been driven by profit taking after some strong gains this week. The biotech company’s shares surged higher after it released a positive trial update. That update revealed that its rexlemestrocel-L drug provides a reduction in heart attacks, strokes, and cardiac death in patients with chronic heart failure.

PolyNovo Ltd (ASX: PNV)

The PolyNovo share price has fallen a further 7% to $2.75. The medical device company’s shares have come under pressure this week following the release of a trading update. Although that update revealed a 31% increase in first half sales, it would have been much stronger had its second quarter performance not underwhelmed. PolyNovo delivered a 75% increase in sales during the first quarter, but this was offset by the softening of sales in October and November.

More reading

• Why 1 broker thinks the Mesoblast (ASX:MSB) share price can run higher 
• Is the Altium (ASX: ALU) share price in the buy zone after its update?
• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 drops lower
• Objective (ASX:OCL) share price continues its rise in 2021 after doubling last year

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 POLYNOVO FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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It has been an interesting 12 months for shareholders of ASX aerial imagery company Nearmap Ltd (ASX:NEA). After falling as low as 83 cents during the COVID-19-inspired sell-off back in March 2020, the company’s shares posted a valiant recovery, soaring to a 52-week high of $3.22 by late August.

But since then market interest in the company has waned, and the share price has slowly edged back down to $2.07. Shareholders no doubt will be hoping that Nearmap’s investments in its growth initiatives will translate to higher returns over the next few years.

What does Nearmap do?

Nearmap provides high resolution aerial images to business and government clients. It gives private companies and government agencies the ability to conduct virtual site visits without ever having to physically leave their offices. This allows people working in fields like engineering, infrastructure development, mining and construction to plan and analyse complex projects.

How has the company performed?

Nearmap’s FY20 financial results, released in August, were well-received by the market and helped push the share price up to its 52-week high. Statutory revenue jumped 25% year-on-year to $96.7 million, and Nearmap’s annualised contract value portfolio increased by 18% to $106.4 million.

The makeup of the contract portfolio also shifted favourably over the year: over half the portfolio was made up of premium content subscriptions, and 43% of contracts incorporated multi-year subscriptions. This meant that average revenue per subscription increased 11% year-on-year to $10,178.

Why has the share price declined?

That might leave you scratching your head and asking why, if the company has performed so well, its share price has declined so markedly since August.

There are a couple of potential reasons.

Firstly, Nearmap conducted a series of successful capital raisings since it released its results. In September, the company announced it had completed a $72.1 million institutional placement at $2.77 a share, a discount of 4.2% on the 9 September 2020 closing share price of $2.89.

Then, in October, it announced it had raised a further $23.1 million through a retail share purchase plan (SPP). Shares issued through the SPP were priced at just $2.30.

Each of these capital raisings diluted the share price, forcing it down.

Secondly, despite its strong revenue growth, Nearmap’s statutory loss after tax blew out during FY20 after the company made significant investments in various growth initiatives throughout the year. Nearmap’s loss increased from $14.9 million in FY19 to almost $37 million in FY20. The company’s earnings before interest, tax, depreciation and amortisation expenses also declined year-on-year, from $15.5 million in FY19 to just $9.1 million in FY20.

What is Nearmap forecasting for FY21?

In a market update released in November, Nearmap stated that it expected annual contract value for FY21 to be between $120 million and $128 million, representing year-on-year growth of between 13% and 20%. It also stated its intention to invest a further $10 million to $15 million in growth initiatives throughout FY21.

More reading

• Why the Nearmap (ASX:NEA) share price is climbing today
• These were the worst performers on the ASX 200 last week
• ASX 200 down 0.85%: ANZ CFO resigns, tech shares tumble, iron ore jumps
• 2 ASX tech shares to buy for 2021
• 3 exciting ASX tech shares to buy in 2021

Rhys Brock owns shares of Nearmap Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nearmap Ltd. 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.

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The S&P/ASX 200 Index (ASX: XJO) has failed to follow the lead of US markets and is dropping lower on Wednesday. In late morning trade the benchmark index is down 0.1% to 6,673.6 points.

Four shares that have not let that hold them back are listed below. Here’s why they are storming higher:

Oil Search Ltd (ASX: OSH)

The Oil Search share price is up 4% to $4.35. Investors have been buying the energy producer’s shares after a solid rise in oil prices overnight. It isn’t just the Oil Search share price on the up today. At the time of writing, the S&P/ASX 200 Energy index is up a sizeable 3.2%.

Praemium Ltd (ASX: PPS)

The Praemium share price has surged 11.5% higher to 68 cents following the release of its second quarter update. During the quarter, the investment platform provider achieved record platform inflows of $1.1 billion. This was up 128% compared to last year’s December quarter inflows. This means Praemium’s global funds under administration increased 10% during the quarter to $34.3 billion.

Premier Investments Limited (ASX: PMV)

The Premier Investments share price has jumped 15.5% to $25.99. Investors have been buying the retail conglomerate’s shares after it released its guidance for the first half of FY 2021. For the 27 weeks ending 30 January, the company revealed that expects its Retail segment to achieve earnings before interest and tax (EBIT) of between $221 million to $233 million. This will be up between 75% and 85% on the 26 weeks ended 25 January 2020.

Universal Store Holdings Ltd (ASX: UNI)

The Universal Store share price has stormed 11.5% higher to $5.74. This follows the release of a very strong trading update from the fashion retailer this morning. According to the release, Universal Store expects its underlying EBIT to be in a range of $30 million to $31 million for the half. This represents growth of between 61% and 67% on the prior corresponding period. This was driven by strong like for like sales growth and gross margin improvements.

More reading

• Here’s why the Premier (ASX:PMV) share price just hit an all-time high
• Here’s why the Universal Store (ASX:UNI) share price is surging 10% higher
• With energy prices roaring back will these ASX energy shares keep booming?
• Leading brokers name 3 ASX shares to buy today
• These were the best performing ASX 200 shares last week

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 Praemium Limited. The Motley Fool Australia owns shares of and has recommended Premier Investments Limited. The Motley Fool Australia has recommended Praemium Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Well, 2020 was yet another rollercoaster ride for the Mesoblast Limited (ASX: MSB) share price, as good and bad news pushed and pulled on the company’s shares. 

The latest piece of disappointing news from Mesoblast was on its remestemcel-L product. This is used for ventilator dependent patients with moderate to severe acute respiratory distress syndrome (ARDS) due to COVID-19 infection. 

The Mesoblast share price spiralled 45% lower when the trial was reported to be unlikely to meet the 30-day mortality reduction endpoint at the planned 300 patient enrolment. 

Despite the trial shortcomings, Bell Potter maintained a speculative buy recommendation on Mesoblast shares on 23 December 2020. The broker updated its Mesoblast share price target to reflect the trial, lowering the price target from $7.40 to $5.10. This is almost twice today’s price of $2.61, at the time of writing. 

COVID-19 ARDS trial 

Bell Potter believes that remestemcel-L is unlikely to be approved for COVID-19 ARDS treatment on the basis of this trial. The broker thinks that at best, they may get a path forward to identify the correct patient population and clinically meaningful endpoint for a confirmatory trial. 

While Mesoblast has stated that it remains committed to developing remestemcel-L for both COVID-19 ARDS and non-COVID-ARDS, Bell Potter thinks otherwise.

Its report said that “it may be best now for the company and its partner Novartis to focus their efforts on non-COVID-ARDS if they do get any clinically meaningful signals from this trial, as they are likely to have more control over the trial”. Combined with the evolving treatment landscape for COVID-19 with new vaccines, antibodies and other experimental treatments, the broker decided to remove COVID-19 ARDS from its modelling for remestemcel-L. 

Chronic Heart Failure (CHF) trials 

On Monday, Mesoblast announced that it had treated 537 patients with chronic heart failure with its rexlemestrocel-L product. The trial found that one single does provides a substantial and durable reduction in heart attacks, strokes and cardiac death in patients with CHF. Results show that the incident of hearth attacks and strokes were reduced by 60 per cent over a follow-up period of 30 months. Based on the observed reduction in morality and morbidity in this trial, Mesoblast intends to meet with the FDA to discuss a potential approval pathway. 

The results coincide with Bell Potter’s view that its CHF therapy may not reduce the number of heart failure related hospitalisations but significantly reduces the risk of a patient dying from cardiac causes. The broker observes that Mesoblast’s therapy seems to work best when treated at an earlier stage in Class II patients vs. the more severe Class III patients. 

The report believes that path forward is “focusing on Class II CHF patients, with reduction in morality as a primary endpoint”. However, it is likely that Mesoblast will be required to do a confirmatory Phase 3 trial focused on class II patients with mortality as a primary endpoint. 

Revised Mesoblast share price target with next catalyst 

Bell Potter’s revised model led to a large decrease in NPAT forecasts for FY21 and FY23 and a large increase in net loss forecast for FY22. This was driven by lower revenue due to the removal of COVID-19 ARDS. 

The broker sees the next catalyst for the Mesoblast share price is its results from Phase 3 trial for chronic discogenic lower back pain (CLBP). These results were expected in December 2020.

More reading

• ASX 200 up 0.4%: Altium disappoints, ARB impresses, Mesoblast charges higher
• Why ARB, Mesoblast, Pushpay, & Super Retail shares are racing higher
• 5 things to watch on the ASX 200 on Tuesday
• ASX 200 drops 0.9%
• Mesoblast (ASX:MSB) share price soars 14% on clinical trial results

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

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The Premier Investments Limited (ASX: PMV) share price is on the run this morning. This comes after the company released a positive trading update for the first half of FY21.

At market open, the retail conglomerate’s shares shot up 17% to an all-time high of $26.32. At the time of writing, the Premier share price is trading up 15.9% at $26.06

What did Premier announce?

With 3 weeks remaining until the end of the term, Premier advised it has continued its sales growth trajectory throughout the first half of FY21.

For the period ending 9 January, Premier revealed it has achieved total global sales of $716.9 million. This represents an increase of 5% on the same time last year, pushed by the rapid acceleration of online sales. The latter accounted for $146.2 million, reflecting a 60% jump over the prior corresponding period.

Total global like for like (LFL) sales also lifted 18%, with its Australia business reporting an increase of 26.2%.

In addition, the company highlighted its strong cost management, negotiating with key landlords on rent reductions due to the COVID-19 environment. Premier went on to discuss that at different times including up until today, several of its locations worldwide have been temporarily closed, affecting staff and loss of potential sales.

However, despite the trading restrictions and provided no significant impacts occur in the final weeks, the company is projecting earnings before interest and tax (EBIT) to swell. Current estimates put EBIT over the entire 27-week period to come in the range of $221 million to $233 million. This is an increase of between 75% and 85% on prior’s H1 FY20 performance.

Overall, Premier said gross profit was tracking well ahead of last year’s result over the same timeframe. It further reiterated that it maintains a healthy balance sheet and will release its H1 FY21 results in late March.

About the Premier share price

The Premier share price has surged from last year’s March lows of $8.13. Reaching an all-time high today, this represents a gain of 223%.

At current, Premier has a market capitalisation of $4.1 billion and a price-to-earnings (P/E) ratio of 30.

More reading

• Here’s why the Universal Store (ASX:UNI) share price is surging 10% higher
• ASX 200 drops 1.1%
• Why a2 Milk, AVZ Minerals, Nanosonics, & Premier Investments are dropping lower
• Investors caught in crossfire as ASX retailers battle ASX property stocks in 2021
• Forecast double-digit surge in Aussie dollar could put brakes on ASX rally in 2021

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Premier Investments Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Altium Limited (ASX: ALU) share price came under pressure on Tuesday following the release of a trading update.

The electronic design software company’s shares fell as much as 5% before recovering to end the day 2% lower at $30.13.

What did Altium announce?

Altium’s update revealed that trading conditions were tough during the six months ending 31 December.

In light of this, the company is expecting to report a 3% decline in first half revenue to US $89.6 million.

Management explained that this decline was “due to extreme COVID conditions in the US and Europe and challenging economic conditions, post COVID in China, for licence compliance activities.”

Positively, the company witnessed an improvement in trading conditions during the second quarter, which has given management confidence that the second half will be much stronger.

Altium’s CEO, Aram Mirkazemi, commented: “I am confident that with our pivot to the cloud and our move to digital sales that the Q2 momentum will continue into the second half.”

In light of this, the company has maintained its guidance for FY 2021.

Is this a buying opportunity?

According to analysts at Credit Suisse, this could be an opportune time to pick up Altium shares.

This morning the broker retained its outperform rating but with a revised price target of $35.00. While it was disappointed with its update, it notes that management has stated that its second half deal pipeline is significant.

Credit Suisse’s price target implies potential upside of 16% over the next 12 months.

Elsewhere, analysts at Goldman Sachs have retained their neutral rating. However, it is worth noting that their price target of $36.35 offers upside of 20% from yesterday’s close price.

That’s better than some of the potential returns on offer with shares that the broker has buy ratings on at present.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 drops lower
• Objective (ASX:OCL) share price continues its rise in 2021 after doubling last year
• ASX 200 up 0.4%: Altium disappoints, ARB impresses, Mesoblast charges higher
• Why Altium, Clover, PolyNovo, & Tyro shares are dropping 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 and recommends Altium. 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 Is the Altium (ASX: ALU) share price in the buy zone after its update? appeared first on The Motley Fool Australia.

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The Core Lithium Ltd (ASX: CXO) share price has been a very strong performer on Wednesday morning.

In early trade the emerging lithium miner’s shares jumped as much as 19% higher to 25 cents.

The Core Lithium share price has since dropped back a touch but is still up 9% to 23 cents at the time of writing.

This latest gain means its shares are now up an incredible 360% over the last couple of months.

Why is the Core Lithium share price jumping higher?

Investors have been buying the company’s shares this morning following the release of a positive announcement.

According to the release, Core Lithium has been granted a mineral lease for the high-grade BP33 Lithium Deposit. This is a key component of the company’s 100%-owned Finniss Lithium Project located near Darwin in the Northern Territory.

Management notes the 25-year lease for BP33 follows the receipt of the first ever mineral lease that the Northern Territory Government had awarded for a lithium project. That was for Core Lithium’s Grants Deposit, which is another key component of the Finniss Lithium Project.

Core Lithium’s Managing Director, Stephen Biggins, believes this approval is both well-timed and a significant milestone in the company’s history.

He commented: “This additional mining lease approval from the Northern Territory Government is well timed as Core continues to advance the Finniss Lithium Project towards commencing construction and as we aim to further expand resources, life of mine and production capacity in 2021.”

“It is a further encouragement that the NT Government understands the important role that Finniss will play in the future of the lithium sector and as we continue to see signs of global improvement in this industry, we are optimistic of our near-term plans for Australia’s next lithium mine,” he concluded.

More reading

• Afterpay and Creso Pharma were among the most traded shares on the ASX last week
• Here’s why the Core Lithium (ASX:CXO) share price rocketed 45% higher today

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

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Dividend shares could prove to be a sound means of obtaining a passive income for life. At the present time, they offer significantly higher income returns than other mainstream assets, such as cash and bonds.

Furthermore, many stocks have solid financial positions that mean their dividends are very affordable. They could also produce strong dividend growth in the coming years that outpaces inflation and provides an investor with an increasingly sound financial outlook.

Reducing the risk of loss from dividend shares

Dividend shares offer a substantially higher passive income than other assets due to low interest rates and the effect of the 2020 stock market crash. Low interest rates mean that the income returns available on cash and bonds are below inflation in some cases. Meanwhile, many income stocks have not fully recovered from the market decline. This may mean that they offer above-average yields at the present time.

Of course, the higher income return from dividend stocks comes with greater risk. A weak global economic outlook means that some companies could experience challenging operating conditions. As such, diversifying among a wide range of companies, sectors and regions could be a shrewd move. It may reduce risk and provide an income investor with a more reliable return in the coming years.

An affordable passive income

Alongside diversification, enduring that dividend shares can afford their current payouts is crucial when seeking to make a passive income for like. A company with a generous yield that is unaffordable is unlikely to provide any added value to an income investor.

Assessing a company’s financial position can provide guidance on the likelihood of it experiencing difficulties in paying dividends. For example, low debt levels and defensive characteristics may help in producing a robust income return. Similarly, a company’s dividend cover provides an insight into the amount of headroom it has when making dividend payouts. It is calculated by dividing net profit by dividends. A figure of more than one suggests it has room to spare when rewarding shareholders for its success via a dividend.

Dividend growth opportunities

Dividend shares that can increase shareholder payouts at a fast pace may become increasingly valuable. The loose monetary policies being followed in major economies could lead to higher inflation. Therefore, a passive income that can grow at a high rate could be required in the coming years to maintain, or increase, an investor’s spending power.

A company’s capacity to raise dividends at a fast pace is closely linked to its financial outlook. Therefore, buying shares in companies that could benefit from long-term industry growth trends, or those businesses that have a competitive advantage over their peers, may be a sound move. They may be able to produce strong dividend growth that further enhances an investor’s passive income in the coming years.

More reading

• Here’s why the Core Lithium (ASX:CXO) share price stormed 19% higher today
• The Saracen (ASX:SAR) share price dips on dividend update
• Here’s why the Universal Store (ASX:UNI) share price is surging 10% higher
• Why the Audinate (ASX:AD8) share price is dropping lower today
• Why lithium miner AVZ Minerals (ASX:AVZ) is shooting higher today

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

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