The Regis Resources Limited (ASX: RRL) share price is up 3.5% at $3.77 in afternoon trading following positive results at the company’s annual general meeting (AGM).

The share price rise comes despite the gold price slipping overnight to US$1,808 per ounce.

Like all gold shares, the Regis share price is closely aligned to the price of the yellow metal. Regis shares hit their 2020 peaks (so far) in late July and early August, when gold was trading above US$2,000 per ounce.

Following today’s gains, the Regis share price remains down 12.9% year-to-date. By comparison the S&P/ASX 200 Index (ASX: XJO) is up 0.1%.

What does Regis Resources do?

Based in Perth, Regis Resources Limited is a gold producer and explorer. The company’s gold operations are located across Australia and in Africa. Its Australian sites include the Duketon Gold Project in the North Eastern Goldfields of Western Australia and the McPhillamys Gold Project in the Central Western region of New South Wales.

Regis shares began trading on the ASX in 1999.

What’s driving the Regis share price up today?

The company announced some positive news and forward guidance to the ASX today. This included record net profit after tax (NPAT) of $200 million with a return on equity (ROE) of 24%. Regis also reported earnings before interest, tax, amortisation and depreciation (EBITDA) of $394 million, up 28%.

Full year dividends came in at 16 cents per share. That represents a dividend yield of 4.2% at the current share price.

In forward guidance, Regis said it expected a year of growth with gold production “heading to” 400,000 ounce per annum. The company plans to lift its production rate above the historic annual rate in the second half of the year.

Addressing the results at the AGM, Regis chair James Mactier said:

An increased gold price and consistent operational performance resulted in a record net profit after tax of $200 million. Regis continued to be a leader in the gold industry in the fundamental business metrics of profitability per ounce of production, earnings per share, dividend yield and return on equity.

At the same time, we utilised our strong operational cashflows to invest in future production growth through capital and exploration expenditure and reduced our hedge book, whilst maintaining a strong cash balance and debt free status.

Our strong financial position and outlook, enabled the Board to declare fully-franked dividends of 16 cents per share for the year, totalling $81 million. Total dividends declared by Regis now amount to $488 million.

More reading

• 2 quality ASX cyclical shares to buy today
• ASX 200 up 0.8%: Fisher & Paykel Healthcare impresses, Harvey Norman’s profits surge
• Why these ASX 200 shares just hit record highs
• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 rises more than 1% on Tuesday

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

The post Why the Regis (ASX:RRL) share price is up today despite sliding gold price appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3770v3R

The Telstra Corporation Ltd (ASX: TLS) share price may be edging lower today, but one leading broker believes it could be going a lot higher from here.

In afternoon trade, the telco giant’s shares are down slightly to $3.11.

Who is bullish on Telstra?

According to a note out of Goldman Sachs this morning, the broker has been looking into the telco market and remains positive on Telstra’s prospects.

As a result, its analysts have retained their buy rating and $3.75 price target on the company’s shares.

This price target implies potential upside of 20% for its shares over the next 12 months excluding dividends. If you include Goldman’s forecast for a 16 cents per share dividend, this potential return stretches to almost 26%.

What did Goldman say?

Goldman Sachs has been looking into the launch of new mobile offerings from both TPG Telecom Ltd (ASX: TPG) and Optus. TPG has recently launched its Felix brand and Optus has launched the Gomo brand.

The broker commented: “In our view, neither Felix nor Gomo pricing is significantly disruptive in the market. While Felix headline pricing looks attractive (i.e.A$35/m for unlimited data), we believe the 5Mbps cap significantly narrows the addressable market.”

“Gomo pricing is mid-pack relative to peers, and its price/data proposition (W$25/18GB) is at a similar discount to Belong (offers A$25/10GB) as Optus is to Telstra. The Gomo pricing is consistent with recent commentary suggesting they would be rational on pricing in the MVNO market, given AYS’s current sub momentum, and Gomo to be more focused on lower data users,” it added.

In light of this, Goldman Sachs remains constructive on Telstra’s average revenue per user (ARPU) outlook. It is forecasting a 4.5% decline in the first half, a 1% increase in the second half, and then a 4% lift in FY 2022.

It expects this to be supported by the new iPhone 12, 5G price increases, a recovery in roaming revenues in FY 2022, and continued market rationality and potential 5G use case upside.

Why ARPU is important.

The broker believes this ARPU growth has the potential to drive the Telstra share price higher in the future.

It notes: “Historically, positive mobile ARPU inflections have driven share price out-performance, hence we reiterate our Buy on Telstra ahead of its 2H21 positive mobile inflection (with mobile the most important segment for TLS).”

Goldman remains neutral on TPG Telecom, stating: “TPG is also exposed to an improving mobile market, however, we stay Neutral given: (1) the current share price implies strong market share gains; (2) delayed 5G launch impacting near-term performance.”

More reading

• 2 cheap ASX shares to buy right now
• Here’s why the TPG (ASX:TPG) share price surged by 5% today
• ASX 200 Weekly Wrap: ASX continues to climb, despite outage
• 2 ASX dividend shares with huge yields
• Why the Telstra (ASX:TLS) share price can go even higher from here

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.

The post Here’s why this broker says the Telstra (ASX:TLS) share price is cheap appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3767lqn

The Smartpay Holdings Ltd (ASX: SMP) share price is falling today after the company announced its half-year results for FY21. During early morning trade, the Smartpay share price fell as low as 55 cents. However, its shares have since recovered to 62 cents, at the time of writing, down 10.14%.

Let’s take a look at how Smartpay performed for the first six months of its new financial year.

What’s driving the Smartpay share price lower?

The Smartpay share price hasn’t fared well today as the company reported a mixed result for the first half of FY21.

For the period ending 30 September, the company achieved record levels of lead generation and sales conversion in its Australian segment. This translated to total group revenue of $14.5 million, an increase of 8% over the prior year.

Most pleasingly for Smartpay is that it saw September as its strongest month in revenue since the COVID-19 pandemic began. In Australia alone, $6.3 million was realised, representing a 67% increase on the the first half of FY19. Based on current calculation, the annualised run-rate return equates to over $19 million thus far. This is double that of the $9.5 million attained for the entire FY20 year.

Earnings before interest, tax, depreciation and amortisation (EBITDA) fell to $3.6 million, reflecting a 6% decline. The drop was attributed to COVID-19 having a $500,000 impact on the business and a significant spend on marketing and sales activities.

Smartpay revealed an after-tax net loss of $9.2 million, mostly comprising a $7.7 million adjustment of its existing convertible notes.

Furthermore, net debt excluding the convertible notes, was mostly paid off through its capital raise conducted in June. In total, net debt stood at $4.8 million, a sizable drop from the $19.4 million recorded at the beginning of April.

Management commentary

Smartpay chair, Mr. Gregor Barclay, and CEO, Mr. Marty Pomeroy, commented on the group’s results for the first half of FY21, saying:

We are extremely pleased with the overall performance of the business in the first half of the financial year in what was a very challenging period for our customers and our team.

Both our Australian and New Zealand operations showed strong resilience to the effects of the national lockdowns through the first quarter of the financial year and this was in large part due to the effectiveness of our management team and the agility and adaptability of our people.

Whilst many of our customers experienced a downturn in trading in the first quarter, most have returned to pre COVID-19 levels as trading restrictions have eased across both countries.

FY21 outlook

No guidance was provided for the remainder of the FY21 year, however, management stated it expects to generate record revenue. Despite the disruption COVID-19 has caused the business, it is well capitalised and continues to recover to normal levels.

About the Smartpay share price

The Smartpay share price has performed well over the past 12 months. Shareholders who bought into the company this time last year would be sitting on gains of more than 138%. The Smartpay share price reached an all-time high of 82 cents in February, before the onset of the COVID-19 sell-off. On the other side of the spectrum, the company’s shares hit a low of 22 cents in March.

Smartpay has a market capitalisation of around $147 million and a price-to-earnings (P/E) ratio of around 90.

More reading

• Here’s why this broker says the Telstra (ASX:TLS) share price is cheap
• 3 ASX shares with large dividend yields
• Dubber (ASX:DUB) share price shoots up 14%, nears 52-week high
• CBA and Zip were among the most traded shares on the ASX last week
• Why the Whitehaven (ASX:WHC) share price is rocketing 10%

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

The post Smartpay (ASX:SMP) share price falls 10% on half-year results appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/362aSqe

In this article are three ASX shares with large dividend yields.

The Reserve Bank of Australia (RBA) recently decided to reduce the official interest rate to 0.10%.

These ASX shares offer higher dividend yields than what bank saving accounts are offering:

Pacific Current Group Ltd (ASX: PAC)

This is a business that invests in boutique asset management. Indeed, it aims to partner with “exceptional” investment managers. It combines its capital with strategic business development through bespoke economic structures. 

According to the ASX, Pacific has a market capitalisation of $302 million.

In FY20 it grew by 40% to $0.35 per share. This was funded by underlying earnings per share growth of 18% to $0.44 per share. That means at the current Pacific Current Group share price it is priced at under 14x FY20’s underlying earnings. It also has a trailing grossed-up dividend yield of 8.3%.

The ASX share managed to increase its funds under management (FUM) to $93.3 billion. When excluding boutiques sold or acquired during the year, FUM rose 52%. GQG, one of its main investments, grew FUM from US$25.1 billion to US$44.6 billion.

The FUM growth continued into the first quarter of FY21. FUM went up 14% to $106.4 million. However, in native currency terms, US dollar orientated fund managers saw FUM rise by 19.3% – FUM growth in Australian dollar terms was reduced by the strength of the Australian dollar.

Magellan Financial Group Ltd (ASX: MFG)

Magellan is a fund manager which specialises in investing in international shares. However, it also has investment strategies that focus on infrastructure shares and Australian shares.

The business earns base management fees from its FUM. If the fund manager outperforms its benchmark then it can also receive performance fees.

The fund manager reported a 26% increase in the average FUM to $95.5 billion in FY20. The FUM had risen to $103.5 billion by the end of October 2020.

In FY20 the ASX share increased its total dividends by 16% to 214.9 cents per share. It also grew its adjusted diluted EPS by 17% to 241.5 cents. That means that, at the current Magellan share price, it has a grossed-up dividend yield of 4.8%. It also means it is valued at 25x FY20’s underlying earnings.

The ASX share recently announced that it was making a major investment into a new investment bank called Barrenjoey which has signed up a number of high-profile people to work there and it will offer a wide array of services.

Brickworks Limited (ASX: BKW)

Brickworks is a building construction business that sells a wide variety of products in Australia including bricks, masonry, paving, precast and roofing.

The company actually owns around 40% of investment conglomerate Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) as well, which sends steadily-climbing dividends to Brickworks.

It also owns 50% of an industrial property trust along with Goodman Group (ASX: GMG). At the end of FY20, its total assets stood at over $2 billion. After including debt, Brickworks’ share of net assets was $727 million.

Brickworks just held its annual general meeting and said that development activity by the property trust has continued at an unprecedented scale. At Oakdale West in Sydney, construction of the Amazon distribution facility is well advanced and is due to be completed in September 2021. Brickworks also said that infrastructure works are proceeding to schedule and will allow construction of the Coles Group Ltd (ASX: COL) distribution warehouse to commence early in 2021.

Once these two facilities are completed, net rental distributions will increase by over 25% and gross assets held within the property trust is expected to exceed $3 billion. Management said that there is sufficient remaining land to provide at least a further five years of development.

At the current Brickworks share price it has a trailing grossed-up dividend yield of 4.2%.

More reading

• Is the Brickworks (ASX:BKW) share price a buy?
• ASX 200 rises more than 1% on Tuesday
• ASX 200 jumps 1.2%: Technology One results, Brickworks update, gold miners sink
• Why Brickworks, Mesoblast, Qantas, & Telix shares are storming higher
• Brickworks (ASX:BKW) share price on watch after trading update

Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post 3 ASX shares with large dividend yields appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/39cnKMH

The Dubber Corp Ltd (ASX: DUB) share price is rocketing up 14.14% today to $1.66 as it closes in on its 52-week high of $1.675. The communication company’s share price has been on an upward trajectory in November, gaining more than 35% this month.

Why is the Dubber share price on the rise?

Dubber’s cloud-based software helps companies to transition away from traditional communications infrastructure to remote working arrangements. The business has benefited from the COVID-19 pandemic, with the company posting record growth customer acquisition numbers during FY20. This has resulted in its annualised recurring revenues jumping by 95% year-on-year in FY20 to $16.1 million.

The company has been able to expand rapidly through a series of capital raisings. In 2020 alone, it raised a total of $45 million from institutional investors. Earlier this month, Dubber also announced a $6 million share purchase plan (SPP), which was oversubscribed up to $33 million. The company eventually elected to keep just $10 million by scaling back its acceptance of SPP offers.

Big contract wins

Dubber has been dubbed a ‘disruptive innovator’ in the multi-billion dollar call recording industry. Its cloud-based technology removes the need for on-premise hardware, or costly and limited storage. 

IBM (NYSE: IBM) has taken note of Dubber’s technology. In early November, the ‘Big Blue’ selected Dubber to provide recording and data capture technology to support its newly launched service – the IBM Cloud for Telecommunication Services platform.

In this project, Dubber’s Unified Call Recording (UCR) solution would be used to integrate with the IBM Cloud for Telecommunications platform, and would enable IBM to offer solutions critical to their customers addressing compliance mandates, improving sales, and unlocking the critical information contained within voice data.

One month before the IBM project was announced, Dubber also unveiled the global launch of its unified recording and voice artificial intelligence solution for the Microsoft Corporation (NASDAQ: MSFT)’s Microsoft Teams platform. 

The Microsoft Teams platform has more than 75 million daily active users. Dubber’s technology would give companies on Teams more control to automate voice recording at scale, without the need for additional and expensive hardware.

About the Dubber share price in 2020

The Dubber share price started the year at $1.18, before plummeting to 39 cents in March. It has since regained its value to $1.66, a year-to-date gain of 38%. At this price, the company commands a market value of $396 million.

More reading

• Ask a fund manager: Totus Capital’s Sam Granger reveals the methods behind his outperforming High Conviction Fund
• I have too many tech shares: Do I sell, buy or hold?
• Here are the US shares that CommSec customers are buying
• What COVID-19? World’s 5 most valuable brands are up 54%
• Here are the shares Magellan has been buying recently

Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Eddy Sunarto 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 recommends the following options: long January 2021 $85 calls on Microsoft and short January 2021 $115 calls on Microsoft. 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.

The post Dubber (ASX:DUB) share price shoots up 14%, nears 52-week high appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2UXX9uz

Australia’s leading investment platform provider CommSec has released data on the most traded ASX shares on its platform from last week.

Once again, there were a number of familiar faces filling up the top five over the period.

Here’s the data:

Westpac Banking Corp (ASX: WBC)

The most popular share on the CommSec platform last week was this banking giant. Westpac shares accounted for 1.6% of trades on the platform, with 48% of them coming from buyers. Despite this even split between buyers and sellers, the Westpac share price recorded a sizeable 8.5% gain. This was driven by COVID-19 vaccine optimism and the improving outlook for bank dividends

Commonwealth Bank of Australia (ASX: CBA)

For the same reasons, Commonwealth Bank shares were also popular with investors and contributed 1.6% of total trades on CommSec. As with Westpac, the Commonwealth Bank share price was a strong performer and rose 10% over the five days. Surprisingly, despite this strong form, only 28% of these trades were attributable to buyers.

Flight Centre Travel Group Ltd (ASX: FLT)

The prospect of two (and now three) effective COVID-19 vaccines gave the travel industry a huge boost last week. Unsurprisingly, this meant that Flight Centre shares were popular with investors. They accounted for 1.6% of trades on CommSec, with a sizeable 63% coming from the buy side. The Flight Centre share price pushed higher, stretching its month to date gain to 42% at the end of the week.

Afterpay Ltd (ASX: APT)

This buy now pay later provider was popular with investors again and accounted for 1.5% of trades on the platform. Approximately 63% of these trades were from buyers. Unfortunately for these buyers, the Afterpay share price lost 4.2% of its value over the five days. This may have been due to concerns over the growth of its US business. Last week it revealed that Co-CEO Nick Molnar is planning to return to the US as soon as possible.

Zip Co Ltd (ASX: Z1P)

Fellow buy now pay later provider, Zip Co, was popular with investors as well. Its shares were responsible for 1.5% of trades on the CommSec platform. This time the buying and selling was evenly split, with 49% of trades coming from the buy side. They will be pleased to have seen the Zip share price rise 2% over the five days.

More reading

• Why the Afterpay (ASX:APT) share price is sliding lower
• Top brokers name 3 ASX shares to buy today
• Why the Webjet (ASX:WEB) share price is soaring 6%
• Why Origin, Qantas, Webjet, & Westpac shares are storming higher
• The 13 ASX shares that could have doubled your money in 2020

James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Flight Centre Travel Group 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.

The post CBA and Zip were among the most traded shares on the ASX last week appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/35ZcRMa

The Whitehaven Coal Ltd (ASX: WHC) share price is storming higher today, despite no news out of the coal miner. Shares in the ASX mid cap are currently trading 10.36% above last night’s close.

Impressively, in intraday trade Whitehaven shares reached a 3-month high of $1.58 before settling to their current level of $1.54. These gains come on the back of a challenging few months for the Whitehaven share price. 

What’s driving its resurgence?

The NSW coal miner was recently added to the list of the 10 most shorted shares on the ASX. Whitehaven was a new entry in the top 10 with short interest of 7.7%. Traders were shorting the coal miner amid reports that China was going to ban purchases of Australian coal. However as these rumours have abated, the company has seen a dramatic change in fortunes.

Additionally, a recent report by Wood Mackenzie suggests that coal imports may actually increase in December in China. According to the report, thermal coal imports will grow from 9.5Mt to 20Mt, which is an increase of 111%. Mining accidents in Shanxi, Shaanxi and Inner Mongolia have prevented output from increasing and imports will have to fill the void.

Furthermore, the recent development of vaccines has continued to improve sentiment about the recovery from COVID-19, which has helped to lift the broader market. 

What now for the Whitehaven share price?

The uptick in share price will be a relief for shareholders, who have witnessed a decline in share price of almost 50% this year.

However, the Whitehaven share price will remain heavily reliant on China’s demand.

Also noteworthy is the fact that insider Fritz Kundrun recently sold a substantial portion of shares. The sale of the 12.7 million shares was completed below the current market price at $1.17, meaning Kundran pocketed just under $15 million. However, despite this being the largest insider sale this year, it was not a substantial part of Mr Kundrun’s holding in the company.

The Whitehaven share price is trading 10.36% higher at the time of writing.

More reading

• Why Aristocrat Leisure, Chalice Gold, Westpac, & Whitehaven Coal shares are charging higher
• ASX 200 up 0.35%: Aristocrat FY 2020 results, big four banks higher, a2 Milk update
• ASX 200 jumps 1.7%: REA Group surges to record high, bank shares push higher
• Why Platinum, ReadyTech, Tabcorp, & Whitehaven shares are dropping lower
• These are the 10 most shorted shares on the ASX

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

The post Why the Whitehaven (ASX:WHC) share price is rocketing 10% appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3kZlef3

The Afterpay Ltd (ASX: APT) share price is slipping today, down nearly 4% in early afternoon trading as the company is drawing attention over its merchant fees.

That’s heading in the opposite direction of the wider S&P/ASX 200 Index (ASX: XJO), up 0.6% at time of writing. And it puts the Afterpay share price down 7.2% from its all-time high of $104.53 reached on 9 November.

Year to date, shareholders will have little to complain about though, with Afterpay shares up 217% since 2 January.

What does Afterpay do?

Afterpay operates in the buy now, pay later (BNPL) market. The company’s payment platform allows people to buy and receive goods and spread the cost of their purchase out over equal payments, without any interest or fees. Those fees are carried by the merchants.

The company was founded in 2015. It now operates in Australia, the United States and the United Kingdom, with current expansion plans into the wider European market. The Afterpay share price first began trading on the ASX in June 2017.

What’s pressuring the Afterpay share price?

Afterpay’s business model is based on consumers being able to pay for the goods and services they purchase over time without incurring any interest charges or other fees.

Of course, someone has to carry those fees. With Afterpay, and many BNPL shares, that someone is the merchant.

Afterpay charges merchants an average fee of 4% of the price of the items they sell via its payment platform. Crucially, the company doesn’t allow merchants to pass any of that cost on to their customers. That differs from credit cards, which generally charge merchants less than 1%, and also allow merchants to pass the cost along to customers if they choose.

According to the Australian Financial Review, merchant fees provide more than 80% of Afterpay’s revenue.

And Sebastian Siemiatkowski, CEO of Swedish-based Klarna – a direct competitor to Afterpay – says he’s surprised “people are celebrating the success of some of your local players when they are charging 400 basis points… To me, it’s not just about surcharging, it’s about capping – because that’s not a payments scheme any more, that’s an extortion scheme.”

A basis point, if you’re not familiar, is 0.01%. Hence 400 basis points is 4.0%.

Afterpay’s current business model may need to change next year. That’s when the Reserve Bank of Australia will decide whether or not merchants should be allowed to pass on the fees they incur from BNPL providers to their customers.

That decision is likely to have a material impact on the Afterpay share price.

More reading

• The 13 ASX shares that could have doubled your money in 2020
• Why has the Zip (ASX:Z1P) share price gone nowhere in 6 months?
• Tech shares could crash 40%, warns fundie
• 2 ASX small cap shares tipped for big things
• Are these the new paths for growth of the Afterpay (ASX:APT) share price?

The post Why the Afterpay (ASX:APT) share price is sliding lower appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/39fmRD8

The stock market crash means there are a wide range of high-dividend-yield shares available to buy today. They could deliver impressive returns due to rising demand for income opportunities in a low interest rate environment.

Furthermore, their low valuations and potential to produce dividend growth may mean that they offer attractive capital growth. As such, buying a range of dividend stocks today could improve your chances of retiring early.

Low valuations after the stock market crash

The stock market crash has caused many dividend stocks to offer high yields and low valuations. In some cases, they may be warranted due to risks such as a company having a weak balance sheet that may inhibit its capacity to survive present economic woes. However, in other cases, weak investor sentiment towards a sector or industry may produce mispricings that can be exploited by long-term investors.

Furthermore, the past performance of the stock market shows that reinvested dividends have made up a large proportion of total returns. Buying high-quality companies while they offer attractive yields could be a means of obtaining a relatively impressive total return in the coming years. This may make income shares appealing for a wide range of investors – including those individuals who are seeking to generate capital growth from their portfolio.

A low interest rate environment

The stock market crash prompted policymakers across many major economies to put in place more accommodative monetary policies. As such, low interest rates could remain in place for a prolonged period of time as they try to stimulate economic growth.

Low interest rates reduce the amount of choice available to income-seeking investors. Products such as cash savings accounts and investment grade bonds now offer relatively low returns that may even struggle to keep pace with inflation. Similarly, high house prices in many locations may mean that property investment is no longer a viable choice for many income investors.

This could mean that demand for high-dividend-yield shares increases following this year’s stock market crash. They may be one of the few means of generating a high passive income. This may mean that their prices rise on the back of high demand among investors, thereby producing strong capital gains for their holders.

Financial strength

The prospects for many businesses have deteriorated following the stock market crash. Although dividends do not necessarily provide clear guidance on the financial position of a business, they can act as a useful guide in determining its financial strength and the confidence of its management team regarding future prospects.

Therefore, buying a range of income stocks with affordable dividends could be a means of lowering overall risk within your portfolio. Over time, they could produce high total returns that improve your financial prospects and even help you to retire early.

More reading

• IOOF (ASX:IFL) accused of butchering its share price
• Pro Medicus (ASX:PME) share price tumbles 4% after AGM
• Top brokers name 3 ASX shares to buy today
• Why the Webjet (ASX:WEB) share price is soaring 6%
• Why Origin, Qantas, Webjet, & Westpac shares are storming higher

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. 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 Stock market crash: why the best high-dividend-yield shares can help you retire early appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2J7bX7h

IOOF Holdings Limited (ASX: IFL) has faced a furious annual general meeting (AGM) today. Shareholders have accused the company of overpaying for its $1.44 billion MLC acquisition from National Australia Bank Ltd (ASX: NAB). The IOOF share price has fallen by 11.7% since the announcement of this deal on 31 August. Criticism to date has focused on the headline price paid for MLC. In particular, activist shareholder, Stephen Mayne, relentlessly accused the company of overpaying, highlighting the wealth destroying impact this can have. 

Mr. Mayne asked repeatedly who registered the 17% proxy vote against the acquisition. Nonetheless, IOOF chair, Allan Griffiths, would not be drawn on the issue. Instead deferring it until analysis could be undertaken. Surprisingly, the IOOF share price is up by nearly 3% today, at the time of writing. 

Another shareholder expressed his outrage, telling Mr. Griffiths “I vote against all resolutions, and will continue to do that as I think the handling of the MLC purchase was a disgrace.” He went on to state “You have butchered the share price.”

The growing rebellion in the ranks

A group was reported to be planning to vote against IOOF’s provision of operating funds for MLC subsidiaries. As a result, the company saw protest votes on all resolutions including, in particular, the reappointment of two directors. Elizabeth Flynn, recorded a 24.8% vote against her. Meanwhile, John Selak saw a 17% vote opposing his re-appointment. 

Shareholders have expressed frustration over the price of and approach to the MLC deal. In particular, they believe the company used a COVID-19 waiver to issue 300 million additional shares on the basis of a non-COVID-related issue. However, an ASX spokesman responded that the rules were not limited to raisings under the health crisis. In addition, many critics are skeptical about claims by IOOF CEO, Renato Mota, that the MLC acquisition would add 20% to the company’s earnings per share (EPS). 

Stephen Mayne pointedly questioned the chair’s competence to be running IOOF. Particularly as he has spent his career in unlisted financial services companies and has no additional directorships. He referred several times to the fall in the IOOF share price.

Mr. Griffiths pointed out he has only been chair for 18 months, during which time he had reset relationships with regulators, is implementing recommendations from the Hayne Royal Commission, and enjoys the full support of the board.

The falling IOOF share price

Since October 2017, the IOOF share price has fallen by over 60% during the heat of the Hayne Royal Commission. In the wake of the commission’s findings Mr. Mota confirmed to a questioner that conflicts of interest were always front of mind. As the four large banks have divested themselves of wealth management assets in response to the royal commission, IOOF has capitalised on this opportunity to propel itself past its longtime rival AMP Ltd (ASX: AMP) with regard to its funds under management.

In year-to-date trading, the IOOF share price remains down by more than 47%.

More reading

• ASX 200 events this week that could move the market
• 3 ASX dividend shares rated as buys by brokers
• AMP (ASX:AMP) asset sales part of wealth sector transformation

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

The post IOOF (ASX:IFL) accused of butchering its share price appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2UVB0No