Shorting is an investment activity that’s usually the domain of professionals and the bane of retail shareholders.

Fund managers who short a stock will make money if the price goes down. It’s hardly an endorsement for the company.

So what happens if you read that a share that you own has been shorted?

Forager Funds chief investment officer Steve Johnson recently addressed this dilemma in a company video. 

Here’s the good news

For any share that you purchase or hold, you need to research both the pros and cons of the company behind it.

This means a report from a short investor is a non-emotive way to educate oneself about the risks, according to Johnson.

“We always want to know what the bear case is on a stock if we’ve got a strong bull case, and understand why people on the other side are selling it.”

Johnson said fundies who short a stock are usually pretty public about their concerns. Perhaps they’re motivated to speak out in order to push the price down.

“You can go and get the report, you can read it, do your own research and work out whether you think they are right or not.”

Perhaps you agree with the short case and decide to sell or not buy.

Huge upside

But say you disagree with the short investor and you hold onto the shares. 

According to Johnson, if the heavily shorted stock surges in value it’ll be a better windfall than other shares.

Why is this?

“The big upside in these stocks is that when they are wrong, it can cause a surge in the share price in a very short period of time as they’re all rushing to get out of their positions.”

Johnson said the level of short interest in each ASX stock is published on the exchange’s website.

“It’s a really good idea if you are researching something on the long side, go and have a quick look at how big the short interest is.

“Then you can usually Google a short interest report about the company that you’re looking at. It’s an interesting way of seeing the bear case.”

Forager Funds runs the ASX-listed Forager Australian Shares Fund (ASX: FOR). Its share price is up more than 15% for the year, trading at $1.36 on Wednesday afternoon AEDT.

More reading

• Sell now or hold forever? What to do with shares like Afterpay (ASX:APT)
• This ASX travel share is already too expensive: fundies

Motley Fool contributor Tony Yoo 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 A2 Milk Company Ltd (ASX: A2M) share price will be one to watch on Thursday after the release of an announcement.

What did a2 Milk announce?

This morning a2 Milk confirmed that it has entered into a binding agreement relating to the acquisition of a 75% interest in Mataura Valley Milk (MVM).

MVM is a dairy nutrition business that is located in Southland, New Zealand. Management notes that the proposed acquisition will provide the company with the opportunity to participate in nutritional products manufacturing. It also provides supplier and geographic diversification and strengthens its relationship with key partners in China.

According to the release, the company will be paying a total consideration of NZ$268.5 million for the 75% stake in MVM. This is based on an enterprise value of circa NZ$385 million.

The acquisition will be undertaken on a debt-free cash-free basis and funded from the company’s existing and rather substantial cash reserves. At the end of FY 2020, a2 Milk had a cash balance of over NZ$850 million.

What now?

The completion of the proposed transaction is subject to approval from the New Zealand Overseas Investment Office. Management expects completion to occur on 31 May 2021.

A key feature of the company’s proposed investment in MVM is that MVM’s current majority shareholder, China Animal Husbandry Group (CAHG), will retain a 25% interest alongside it.

CAHG is a wholly owned subsidiary of China National Agriculture Development Group, which itself is the the parent company of a2 Milk’s strategic logistics and distribution partner in China, CSFA Holdings Shanghai (China State Farm).

Why MVM?

The company revealed that the due diligence process has confirmed its strategic rationale for pursuing this acquisition.

Management notes that this includes the establishment of dual supply arrangements for nutritional products to complement its existing supply relationships. It will also help capture a unique opportunity to acquire a recently constructed and operational, world-class nutritional products manufacturing facility in New Zealand.

Another reason is that MVM is well located for access to a growing productive milk pool, supported by favourable climatic conditions and water availability. It also notes that it will be partnering with a highly respected China state owned enterprise in CAHG, to assist in further developing the business, including into China.

Finally, the acquisition gives it the opportunity to produce additional infant nutrition products for China and other markets and the ability to capture manufacturing margin.

A2 Milk’s Chief Executive Officer, Geoff Babidge, commented: “MVM provides a unique opportunity to acquire a new world-class nutritional products manufacturing capability in New Zealand, alongside a highly respected China state owned enterprise in China Animal Husbandry Group. We have worked closely with CAHG and MVM over recent months and have developed relationships with both teams that we are confident will provide a strong foundation for the business going forward. We continue to be impressed by the MVM facility and the management team.”

More reading

• 3 top ASX shares to buy in 2021
• Why a2 Milk, Air New Zealand, Mesoblast, & Recce shares are storming higher
• Why a2 Milk and these ASX shares have been smashed in 2020
• Leading brokers name 3 ASX shares to sell today
• Why a2 Milk, Doctor Care Anywhere, McPherson’s, & Volpara are pushing higher

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended A2 Milk. 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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With demand for healthcare services expected to grow strongly over the next decade due to population growth, shifts in demographics, and improving technologies and treatments, the healthcare sector has been tipped as a place to invest.

But which shares should you buy? Two top ASX healthcare shares that could be worth a closer look are listed below:

Cochlear Limited (ASX: COH)

When it comes to shifting demographics, and particularly in respect to the growing number of over 65s, there are few companies that stand to benefit as much as Cochlear. It is a global developer, manufacturer, and distributor of cochlear implantable devices for the hearing impaired.

As hearing loss is typically a part of the ageing process, a growing number of over 65s globally is expected to lead to an increase in demand for hearing solutions in the coming decades. And thanks to its industry-leading products and the high barriers to entry, Cochlear appears well-placed for long term growth.

Macquarie is a fan of the company and has an outperform rating and $241.00 price target on its shares.

CSL Limited (ASX: CSL)

This biotherapeutics company is another which has been tipped to have a bright future. This is because CSL appears to be in a strong position for growth over the long term due to increasing demand for immunoglobulins, its expansive plasma collection network, growing demand for influenza vaccines, and its burgeoning research and development pipeline.

The latter has some very lucrative therapies under development and is being underpinned by a material investment each year. In fact, in FY 2021, CSL will be investing approximately ~US$1 billion into its research and development activities. This follows a US$922 million investment in FY 2020.

One broker that is particularly positive on the company’s prospects is UBS. It recently put a buy rating and $346.00 price target on CSL’s shares.

More reading

• 7 top ASX biomedical shares in 2020
• In a record-breaking year, here are some of the world’s most popular shares
• ASX 200 Weekly Wrap: ASX hits new post-March high
• 2 outstanding ASX shares to buy and hold for a decade
• ASX healthcare shares could outperform in 2021: Fundie

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 Cochlear Ltd. and CSL Ltd. The Motley Fool Australia has recommended Cochlear 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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If you’re looking for decent dividend yields for 2021, then you might want to look at the dividend shares listed below.

Here’s what is expected from them next year:

Rural Funds Group (ASX: RFF)

Rural Funds is an agriculture-focused property group that owns a number of properties across five agricultural sectors. These high quality properties are leased on ultra long term agreements to some of the biggest operators in the industry. This includes wineries leased to wine giant Treasury Wine Estates Ltd (ASX: TWE).

At the end of FY 2020, Rural Funds had a weighted average lease expiry (WALE) of 10.9 years. Given that these leases have rental increases built into them, the company has great visibility on its future earnings.

In light of this, management appears confident that it is well-positioned to continue growing its distribution by its 4% per annum target each year in the future. This will mean a distribution of 11.28 cents per share in FY 2021. Which based on the current Rural Funds share price, equates to a 4.35% yield.

Telstra Corporation Ltd (ASX: TLS)

After several disappointing years due to the NBN impact on its earnings, Telstra’s outlook is becoming increasingly positive. This is being underpinned by its T22 strategy, which is stripping out costs and simplifying its business.

Another big positive is the status of the NBN rollout. While this rollout still has further to go, the headwinds it is causing are now peaking.

In light of this, a return to growth doesn’t appear far away. Especially given the rational competition in the industry and the arrival of 5G internet. The latter is expected to give its average mobile revenue per user metric a boost in the coming years.

Finally, with the Telstra board intending to do what it can to maintain its 16 cents per share dividend, the company’s shares could yield very generous dividends in the coming years. Based on the current Telstra share price, a 5.3% fully franked dividend is expected next year.

More reading

• These 4 ASX REITS are about to go ex-dividend
• Why Bigtincan, Over the Wire, Resolute, & Uniti shares are dropping lower
• Why a2 Milk and these ASX shares have been smashed in 2020
• 2 blue chip ASX shares to buy for 2021
• Cimic (ASX:CIM) share price falls despite positive update

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED, Telstra Limited, and Treasury Wine Estates 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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On Wednesday the S&P/ASX 200 Index (ASX: XJO) was back on form and climbed higher. The benchmark index rose 0.65% to 6,643.1 points.

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

ASX 200 expected to rise again.

The Australian share market looks set to end the shortened week on a positive note. According to the latest SPI futures, the ASX 200 is poised to open the day 53 points or 0.8% higher this morning. This follows a positive night of trade on Wall Street, which in late trade sees the Dow Jones up 0.85%, the S&P 500 up 0.6%, and the Nasdaq trading 0.2% higher.

Christmas Eve trading.

The Australian share market will be closing early on Thursday ahead of the Christmas break. According to the ASX, normal trading will cease at 14:10 Sydney time. After which, the market will be closed for Boxing Day on Monday, before reopening as normal again on Tuesday of next week.

Oil prices jump.

Energy producers including Oil Search Ltd (ASX: OSH) and Santos Ltd (ASX: STO) could finish the week strongly after oil prices jumped overnight. According to Bloomberg, the WTI crude oil price is up 2.8% to US$48.32 a barrel and the Brent crude oil price has risen 2.7% to US$51.43 a barrel. This was driven by a greater than expected draw on US inventories.

Gold price rises.

It could be a good day for gold miners such as Evolution Mining Ltd (ASX: NCM) and St Barbara Ltd (ASX: SBM) on Thursday. According to CNBC, the spot gold price has risen 0.45% to US$1,878.40 an ounce. A softening US dollar helped drive the precious metal higher on Wednesday night.

Transurban given neutral rating.

The Transurban Group (ASX: TCL) share price has been given a neutral rating and $13.27 price target by analysts at Goldman Sachs. This follows the release of the toll road operator’s distribution guidance. Goldman was disappointed with its 15 cents per share distribution, which fell short of both the broker’s and the market’s expectations.

More reading

• ASX 200 ends 0.7% higher
• Are we heading for a new ASX resources ‘supercycle’?
• ASX 200 up 0.5%: Big four banks rise, Smartgroup guidance, Transurban distribution update
• Here’s what the Transurban (ASX:TCL) dividend will look like in 2021
• Here’s how ASX 200 energy shares have performed in 2020 so far

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Transurban Group. 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) went up by 0.7% today to 6,643 points.

Here are some of the highlights from the ASX:

Challenger Ltd (ASX: CGF)

The ASX 200 annuity business announced today that it’s going to buy a bank.

Challenger is buying MyLifeMyFinance, which is an Australia savings and loans bank, for $35 million.

The company likes the acquisition because it’s highly strategic and provides Challenger with the opportunity to significantly expand its secure retirement income offering.

After the acquisition, Challenger will hold an Australian Prudential Regulation Authority (APRA) authorised deposit-taking institution (ADI) licence, providing access to Australia’s $1 trillion term deposit market.

Challenger will initially focus on expanding the term deposit offering by replicating the investment strategy used to support Challenger’s annuity business. Under Challenger ownership, it said it will be able to provide term deposit customers with “compelling value” across a range of tenors.

The CEO and managing director Richard Howes said: “Adding a digital domestic banking capability to sit alongside our existing life and funds management operations will further broaden the ways in which we provide financial security for retirement and will further diversify our distribution channels.

“Term deposits represent a significant asset class for Australian retirees and entering the market provides an opportunity to play a greater role supporting the retirement incomes of our customers, while also attracting a new cohort of customers.

“Authorised deposit-taking institutions have had great success in attracting government guaranteed retail deposits. We see a significant opportunity to leverage our leading retirement income position and capability to manufacture guaranteed returns for our customers.”

The Challenger share price rose by more than 4% in response.

Smartgroup Corporation Ltd (ASX: SIQ)

Smartgroup provided an update about its earnings guidance for the year to 31 December 2020.

Following a stronger second half performance, Smartgroup expects to report that the 2020 net profit will be approximately $65 million.

The profit performance has been supported by an improved operating earnings before interest, tax, depreciation and amortisation (EBITDA) margin of approximately 44% in the second half, up from 43% in the first half of 2020. Operating EBITDA is expected to be approximately $47 million for the second half.

Improved cost controls helped offset a forecast 3% fall in novated leasing volumes from the first half. The second half result also includes 8% lower yields, reflecting the impact of the previously announced insurance price reductions that became effective 1 July 2020.

The number of salary packages and novated leases under management are forecast to be in line with the first half.

Smartgroup managing director and CEO Tim Looi said: “We expect to deliver an encouraging full year profit result demonstrating the resilience of our business in a challenging operating environment. We are seeing a positive trend in the number of novated lease enquiries and settlements in respect of new vehicles.

“However, we remain cautious. The current environment is fragile with the potential for further economic disruption due to COVID-19 public health responses and the potential knock on effects these may have on consumer confidence and our business.”

The Smartgroup share price rose by 7.6%. 

Transurban Group (ASX: TCL) distribution

Toll road giant Transurban announced its distribution for the six months to 31 December 2020.

Transurban announced that a distribution totalling 15 cents per security will be paid for the half-year. The FY21 distribution is still anticipated to be in line with its free cash flow generation, excluding capital releases. That includes the 15 cents distribution that has just been declared.

A distribution re-investment plan will be in operation for this distribution, though there won’t be any discount.

The Transurban share price rose by 0.4% in response.

More reading

• Are we heading for a new ASX resources ‘supercycle’?
• ASX 200 up 0.5%: Big four banks rise, Smartgroup guidance, Transurban distribution update
• Here’s what the Transurban (ASX:TCL) dividend will look like in 2021
• Why the Smartgroup (ASX:SIQ) share price has popped 7% higher
• Here’s how ASX 200 energy shares have performed in 2020 so far

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Challenger Limited. The Motley Fool Australia owns shares of Transurban Group. The Motley Fool Australia has recommended SMARTGROUP DEF SET. 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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Shares such as Afterpay Ltd (ASX: APT) and Kogan.com Ltd (ASX: KGN) currently trade on sky high multiples.

While many would argue that they fully deserve to trade at these levels, for some investors, these shares are just too expensive for their tastes.

The good news is that not all shares are trading at such a premium. In fact, some could even be described as cheap at current levels.

Two ASX shares which could be good options for value investors are listed below:

Healius Ltd (ASX: HLS)

Healius is a healthcare company that provides services to medical and health professionals through its network of medical centres and pathology centres across Australia.

It has been a very strong performer in FY 2021, with growth being exhibited across the business. This was particularly the case in its Pathology business, which has been benefiting from strong demand for COVID-19 testing.

While its shares are not necessarily conventionally cheap, analysts at Goldman Sachs believe it should be classed as a value share.

The broker explained: “Trading at 10.2x pre-AASB EBITDA (or 6.0x post-AASB) for +8% EBITDA CAGR (FY21-24E), HLS is one of the few value-oriented stocks in the ASX healthcare sector, and we believe it should be considered a core holding ahead of CY21. We expect consensus upgrades and multiple re-rating to drive further stock performance through the mid-term.”

People Infrastructure Ltd (ASX: PPE)

People Infrastructure is a leading workforce management company that provides innovative solutions to workforce challenges. Although it was negatively impacted by the pandemic, it was still a strong performer in FY 2020. It delivered an impressive 49.2% increase in normalised EBITDA to $26.4 million.

While no updates have been provided for its performance since the release of its results, analysts at Morgans are very positive on its future. They recently put an add rating and $4.05 price target. The broker is also forecasting a dividend of 11 cents per share and earnings per share of 22 cents in FY 2021.

Based on the latest People Infrastructure share price, it is trading at 16x forward earnings and offers a fully franked 3.2% dividend yield.

More reading

• What a 20x return on Afterpay (ASX:APT) shares taught me
• Here’s why the Zip (ASX:Z1P) share price is in focus today
• How to get the best out of the 2021 mining boom
• In a record-breaking year, here are some of the world’s most popular shares
• 2 exciting mid cap ASX shares to buy for the long term

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 Kogan.com ltd and People Infrastructure Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Kogan.com ltd and People Infrastructure 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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It may not be the biggest tech sector in the world, but the ANZ region is home to a good number of companies with significant potential.

Two small cap ASX tech shares that have been tipped for big things in the future are listed below. Here’s why they are currently rated as shares to buy:

Damstra Holdings Ltd (ASX: DTC)

Damstra is a growing integrated workplace management solutions provider to multiple industry segments. Its cloud-based workplace management platform is used by businesses globally to track, manage and protect their workers and assets.

The company also offers solutions such as fever detection and mobility tracking, which are particularly appropriate in the current environment.

Furthermore, it recently strengthened its offering with the acquisition of Vault Intelligence. It is a software company offering solutions which combine health, safety, compliance, and risk management.

Following its 61% increase in first quarter cash receipts, analysts at Morgan Stanley reiterated their overweight rating with a $2.00.

MyDeal.com.au Limited (ASX: MYD)

MyDeal.com.au is a recently listed online retail marketplace provider with a focus on furniture, homewares, appliances, technology, baby products, and hardware.

It has also been a strong performer in FY 2021, delivering first quarter gross sales growth of 317% to $56.67 million. This strong form has continued since, with MyDeal recording gross sales of $30 million in November. This was up 192% year on year and 63% month on month. Its active customers also grew to a record 778,867, up 236% year on year.

Morgans is a fan of the company and recently put an add rating and $1.70 price target on its shares. It was pleased with its performance in November and notes that its private label sales have been growing ahead of its expectations in FY 2021. This is a big positive given the stronger margins these products have. 

More reading

• Here’s how Nuix (ASX:NXL) and these recent IPOs are performing since listing
• 2 exciting small cap ASX shares to watch closely in 2021
• Top brokers name 3 ASX shares to buy next week
• MyDeal (ASX:MYD) share price falls despite record November sales
• 2 rapidly-growing small cap ASX shares to buy

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 Damstra Holdings Ltd. The Motley Fool Australia has recommended Damstra Holdings 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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As 2020 draws to a close, we cast our net out for the best ASX shares to buy now to take with you into 2021.

Today we look at two shares that one fund manager has highlighted. One stands to benefit from the expected nationwide reopening and return of shoppers in 2021. The other stands to benefit from the forecast global infrastructure spending splurge, led by China.

An ASX share to benefit from the reopening

First up is EML Payments Ltd (ASX: EML).

Dushko Bajic is the Head of Australian Equities Growth at First Sentier Investors.

In an interview with Livewire, Bajic said they’ve been analysing and adding, “great stocks to the portfolio that we believe are beneficiaries of the reopening as the world normalises in the years ahead.”

Bajic went on to say:

[E]xamples include… EML Payments, which is a company that provides gift cards and general-purpose re-loadable cards. We believe that they will be a big beneficiary of foot traffic returning more broadly in the economy.

EML Payments, with a market cap of $1.46 billion, is part of the S&P/ASX 200 Index (ASX: XJO). And the company has been posting strong revenue growth in its recent quarterly reports.

EML reported revenue of $40.6 million for the first quarter of the 2021 financial year (FY21). That’s up 75% from the first quarter for FY20. Earnings before interest, tax, depreciation and amortisation (EBITDA) also leapt 215% year-on-year.

The EML Payments share price has yet to fully recover from the COVID market crash, which saw its shares plummet 77% from 14 February through to 24 March. Since that low, shares have soared 206% higher. Year-to-date the share price remains down 12%.

An ASX share to benefit from the global infrastructure splurge

The second ASX share is Fortescue Metals Group Limited (ASX: FMG).

The Aussie mining giant – the fourth largest iron ore producer in the world – has a market cap of $72.3 billion and pays a juicy dividend yield of 7.7%, fully franked.

Dushko Bajic notes, “[W]e’ve also done well out of the Pilbara iron ore sector of Australia, which is one of the great comparative advantages of our economy and one of the great sources of investment in the stock market.”

He says that Fortescue, in particular, is a company that’s “really low on the cost curve and generating very strong returns, not only for our economy, but also as stocks and earnings for us as individual investors in the company.”

Indeed, Fortescue is trading at a price to earnings (P/E) ratio of only 10.3 times. And that’s after seeing its share price rocket 117% higher in 2020.

Happy investing!

More reading

• 2 ASX dividend shares with fully franked yields over 7% today
• With the ASX tipped to outperform in 2021, shares in this sector could rocket
• Are we heading for a new ASX resources ‘supercycle’?
• Why is everyone talking about the iron ore price?
• ASX miners put on alert as the iron ore price crashes overnight

Bernd Struben 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 EML Payments. The Motley Fool Australia has recommended EML Payments. 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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One of the few certainties we have going into 2021 is the continuing futility of traditional cash and fixed-interest investments. Even for term deposits these days, the best interest rate you can expect will likely come in with a yield at less than 1% per annum.

That’s a very large price to pay for the certainty of income and capital preservation that these investments provide. And it doesn’t look like this is set to get any better any time soon. The Reserve Bank of Australia (RBA) has said that it doesn’t expect interest rates to start rising again until 2023 at the earliest.

So what to do? Well ASX dividend shares are a good place to start. Yes, dividend shares don’t offer the guaranteed return that a term deposit does. But they do offer the chance of getting a dividend yield of more than 1% per annum.

Here are 2 ASX shares doing one better. They both have yields on the table today that gross-up to more than 7%.

Fortescue Metals Group Limited (ASX: FMG)

Fortescue has been one of the surprise performers of 2020 so far. Since the start of the year, Fortescue shares have risen from around $10.78 a share to today’s price (at the time of writing) of $23.42. That’s a handy 117% return that Fortescue shareholders have enjoyed.

A surging iron ore price in 2020 has loaded Fortescue’s coffers with cash. And Fortescue has been returning a lot of it to investors this year. Even after this meteoric share price appreciation, Fortescue shares are still offering a trailing yield of 7.51% on current prices. With full franking credits, that grosses-up to 10.73%.

Alumina Limited (ASX: AWC)

Our second dividend share today is aluminium/alumina producer Alumina Limited. Alumina is one of the largest pure-play aluminium companies on the ASX.

Alumina recently told investors that the company saw strong earnings growth in its aluminium division in its most recent quarter, up 35% to $119 million. No doubt investors who buy Alumina shares for dividend income would have been pleased.

The company boasts a trailing yield of 5.2% on current prices, which grosses-up to 7.43% with Alumina’s full franking. It could get even better from here too.

My Fool colleague Brendon Lau recently covered how one broker sees Alumina shares offering a yield of 13.6 cents a share by FY2022. That would net a yield of around 7.5% (or 10.71% grossed-up) on current prices.

More reading

• With the ASX tipped to outperform in 2021, shares in this sector could rocket
• Are we heading for a new ASX resources ‘supercycle’?
• Why is everyone talking about the iron ore price?
• ASX miners put on alert as the iron ore price crashes overnight
• These ASX shares have more than doubled in 2020

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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