On Friday the S&P/ASX 200 Index (ASX: XJO) finished a very positive week in a subdued manner. The benchmark index fell 0.2% to 6,405.2 points.

Will the market be able to bounce back from this on Monday? Here are five things to watch:

ASX 200 poised to rise.

The Australian share market looks set to start the week on a positive note despite declines on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 34 points or 0.5% higher this morning. On Friday the Dow Jones fell 0.75%, the S&P 500 dropped 0.7%, and the Nasdaq fell 0.4% lower. Rising COVID-19 cases in the United States weighed on investor sentiment.

NSW-Victoria border reopens.

Flight Centre Travel Group Ltd (ASX: FLT) and Webjet Limited (ASX: WEB) shares could be on the rise today after the NSW government announced the opening of its border with Victoria today after being closed for 137 days. This is expected to lead to hundreds of flights between Melbourne and Sydney from this week.

Oil prices push higher.

Energy producers including Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could start the week on a positive note after oil prices pushed higher on Friday. According to Bloomberg, the WTI crude oil price rose 1.4% to US$42.17 a barrel and the Brent crude oil price climbed 1.7% to US$44.96 a barrel. Oil prices recorded their third successive weekly gain thanks to COVID-19 vaccine optimism.

Gold price pushes higher.

Gold miners such as Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) could be on the rise today after the gold price pushed higher on Friday night. According to CNBC, the spot gold price climbed 0.45% to US$1,869.60 an ounce. This was driven by optimism over U.S. COVID stimulus.

Lendlease given conviction buy rating.

Goldman Sachs has maintained its conviction buy rating on the Lendlease Group (ASX: LLC) share price. The broker notes that the company is targeting over A$10 billion of project commencements over the next 18 months. It expects this to underpin solid earnings growth over the coming years. Goldman has a $16.65 price target on Lendlease’s shares.

More reading

• 5 things to watch on the ASX 200 next week
• These were the worst performing ASX 200 shares last week
• These were the best performing ASX 200 shares last week
• ASX 200 ends flat on Friday
• This broker reckons Woodside Petroleum (ASX:WPL) shares are a screaming buy today

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

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Some investors may avoid buying cheap shares at the present time due to the potential for a second stock market crash. Risks such as Brexit and coronavirus could realistically prompt weaker financial performances from businesses that translate into falling share prices.

However, the past performance of the stock market shows that it has always experienced challenging periods. The key takeaway for investors is that it has always recovered from them to post new record highs.

Furthermore, today’s cheap share prices may factor in many of the risks facing the economy. This could mean there are buying opportunities available.

The threat of a stock market crash

The potential for a stock market crash may be elevated at the present time. Investors often become increasingly bearish during periods of major change when they find it more difficult to accurately forecast the outlook for businesses. With political uncertainty present across many of the world’s major economies and coronavirus continuing to cause disruption, it would be unsurprising for investor sentiment to weaken to some extent in the coming months.

However, many bear markets have been impossible to predict. This year’s stock market decline took place over a very short period of time, with very few investors accurately predicting that it would happen. It’s a similar story with previous market declines. Therefore, a downturn can take place at any time and without prior warning. This means that all investors must accept that their holdings may be in loss-making territory at times.

Long-term growth potential

Despite the constant threat of a stock market crash, indexes such as the FTSE 100 Index (FTSE: UKX) and S&P 500 Index (SP: .INX) have produced relatively impressive returns over recent decades. In fact, their annual total returns have been in the high single-digits even though they have experienced severe bear markets such as the global financial crisis and dot com bubble.

Their returns may have been more volatile than those of other assets such as cash and bonds. However, they have also been higher over the long term. As such, investors who are able to live with the potential for short-term paper losses may be better off investing money in a portfolio of stocks instead of holding lower-risk assets. Over time, they may deliver significantly higher returns.

Buying cheap shares today

At the present time, many cheap shares appear to account for elevated risks that could cause a stock market crash. Therefore, even though risks are higher at the present time, now could be an opportune moment to purchase a wide range of companies for the long term.

Their wide margins of safety may provide some support should there be another market downturn. Meanwhile, their low valuations may also mean they can offer impressive returns in the coming years that have a positive impact on your financial prospects.

More reading

• 2 ASX small cap shares tipped for big things
• 3 reasons why I’d buy the best dividend shares today
• 2 ETFs that ASX investors need to know about
• Top fund manager Dalio warns investors to stay away from cash
• Top brokers name 3 ASX shares to sell next week

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.

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It’s worth remembering that all companies start somewhere and don’t become Afterpay Ltd (ASX: APT) overnight.

Two ASX shares that are still at the start of their journeys and have been tipped to have bright futures are listed below. Here’s what you need to know about them:

Mach7 Technologies Ltd (ASX: M7T)

Mach7 is a $286 million developer of enterprise imaging and informatics solutions for image viewing, storage, and workflow management. These solutions can be implemented individually or as a comprehensive end-to-end image management and diagnostic viewing platform. They have been designed to assist healthcare organisations with removing technology limitations to ensure patient information flows easily and can be accessed instantly.

Earlier this month the company announced a seven-year contract with Trinity Health for the license and associated support services for its eUnity enterprise viewer. The total value of this contract is A$5.26 million. Trinity Health is the fifth largest healthcare Integrated Delivery Network (IDN) in the United States and will be installing it across multiple facilities within its 92 hospitals located across 22 US states.

This news went down well with Morgans, which has reiterated its add rating and $1.49 price target on the company’s shares. It notes this could be the first of many deals due to its material tender pipeline. The Mach7 share price ended the week at $1.22.

MyDeal.com.au Limited (ASX: MYD)

MyDeal.com.au is an online retail marketplace provider with a market capitalisation of $300 million. The company has a focus on furniture, homewares, appliances, technology, baby products, and hardware. This focus has delivered strong results so far in FY 2021, with the company recently revealing first quarter gross sales growth of 317% to $56.67 million. This strong growth was driven by the accelerating shift to online shopping and a 268% increase in active customers to 669,897 compared to the prior corresponding period.

Another positive is the company has $40 million from its recent initial public offering (IPO) that can be used to drive future growth. This includes growing its private label business, investing in its proprietary technology, and investing in advertising to grow its customer base and brand.

One broker that likes what it sees here is RBC Capital Markets. It has just initiated coverage on MyDeal with a buy rating and $1.60 price target. It thinks the company is at an inflection point as annualised gross transaction value exceeds $200 million and customer numbers approach 700,000. The MyDeal share price last traded at $1.16.

More reading

• Are these the new paths for growth of the Afterpay (ASX:APT) share price?
• I have too many tech shares: Do I sell, buy or hold?
• Is the Afterpay (ASX:APT) share price a buy today?
• Top brokers name 3 ASX shares to buy today
• Afterpay (ASX:APT) share price under pressure by US BNPL giant

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 MACH7 FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended MACH7 FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The best dividend shares could offer more than just a relatively high passive income. The stock market crash has caused a wide range of high-quality businesses to trade at low prices that do not account for their recovery prospects.

As such, undervalued companies with impressive shareholder payouts could become more popular in a low interest rate environment. This may boost their prices and lead to impressive total returns in the coming years.

The passive income potential of dividend shares

Of course, the most obvious reason to buy the best dividend shares today is their passive income prospects. The stock market crash has caused many income stocks to trade at lower prices than at the start of the year – even after the recent market rebound. Therefore, it is possible to obtain high yields from high-quality income shares that may not be available permanently in many cases.

A large proportion of the stock market’s past total returns have been derived from the reinvestment of dividends. Therefore, income shares may be of interest to a wider range of investors than those who are purely interested in a passive income. Over time, many companies may also be able to increase their dividend payouts as the economic outlook improves. This may further improve their total return potential over the coming years.

Relative income appeal

At the same time as dividend shares offer a generous passive income, many other assets currently fail to provide a worthwhile income opportunity. Low interest rates mean that the returns on cash savings accounts have fallen to historic lows. Similarly, the returns on investment grade bonds may struggle to keep pace with inflation over the long run. This may reduce an investor’s spending power and make it more difficult to obtain a worthwhile passive income over the coming years.

Meanwhile, high house prices mean that the yields available on property may be relatively unattractive. Investors must also pay various fees when owning investment property, while it is likely to be more difficult to diversify when owning property directly. This may increase overall risk, and could lead to a less stable passive income than that on offer via a portfolio of dividend shares.

Capital return prospects

Dividend shares also offer scope for impressive capital returns. As mentioned, their prices have fallen in many cases due to the stock market crash. This could mean that their financial prospects are currently undervalued by investors. As the world economic outlook improves and investor sentiment strengthens, income shares could make capital gains that have a positive impact on investor portfolios.

Therefore, building a diverse portfolio of income shares could be a logical approach. Their low prices, passive income potential and relative appeal could make them a profitable investment for a wide range of investors over the coming years.

More reading

• 2 ETFs that ASX investors need to know about
• Top fund manager Dalio warns investors to stay away from cash
• Top brokers name 3 ASX shares to sell next week
• Is National Storage (ASX:NSR) a dividend share to buy?
• Top brokers name 3 ASX shares to buy next week

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.

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Exchange traded funds (ETFs) are becoming increasingly popular with Australian investors and it isn’t hard to see why.

ETFs give investors the opportunity to invest in a large number of shares through just a single investment. This includes themes, countries, or whole indices.

Two ETFs that are popular with investors right now are listed below. Here’s what you need to know about them:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The BetaShares Asia Technology Tigers ETF gives investors exposure to a collection of tech shares that are revolutionising the lives of billions of people in the Asia market. Among its holdings you will find the likes of Samsung, Alibaba, JD.com, Tencent, and Baidu.

In respect to Baidu, it is widely regarded as the Chinese version of Google. As well as being the dominant search engine in China, Baidu has a keen focus on artificial intelligence and is aiming to be an autonomous vehicle powerhouse. In 2019, the company ranked number one in the amount of AI-related patent applications in China for the second consecutive year. This demonstrates just how active in the space it is.

Another key holding in the fund is Tencent. It is one of the world’s largest tech companies with a focus on video games and social media. It is best known as the company behind the WeChat app, which is used by over 1.2 billion people for messaging, e-commerce, digital payments, and entertainment.

BetaShares Global Cybersecurity ETF (ASX: HACK)

Another ETF that is popular with investors is the BetaShares Global Cybersecurity ETF. This ETF aims to track the performance of an index that provides exposure to the leading companies in the global cybersecurity sector.

BetaShares notes that with cybercrime on the rise, demand for cybersecurity services is expected to grow strongly for the foreseeable future. This is a side of the market which is heavily under-represented on the ASX at present.

Included in the fund are both global cybersecurity giants and emerging players from a range of global locations. Among its holdings you’ll find Crowdstrike, Okta, Accenture, Cisco, and Cloudflare.

More reading

• 2 ASX tech ETFs analysts rate as a ‘buy’ today
• 10 hottest (and coldest) Aussie ETFs right now
• 2 quality ETFs that are popular with ASX investors
• Best performing Aussie ETFs right now
• 2 tech ETFs generating big returns

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 BETA CYBER ETF UNITS. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Billionaire Ray Dalio is a world-famous investor that many look to for advice, wisdom or just good old-fashioned market commentary. Dalio founded one of the world’s largest hedge funds – Bridgewater Associates – back in 1973. It is perhaps most well known for its performance during the global financial crisis a decade ago. While global markets were tanking, Bridgewater’s Pure Alpha Fund managed to make a motza back then. Today, Bridgewater has more than US$140 billion in assets under management, although Mr. Dalio is no longer playing an active role at the fund.

Even so, he is still out and about, sharing his insights on the current economic climate and market conditions.

Reporting in Business Insider this week shed some light on what Dalio has been telling investors in this current climate. Business Insider quoted Dalio speaking at the Bloomberg New Economy Forum this week. First off, he told the forum that diversification is “one of the most important portfolio strategies” in the current environment. But he caveats this statement by saying that investors shouldn’t be owning bonds (also called ‘fixed-interest investments’) or cash right now:

In my opinion, don’t own bonds, and don’t own cash because they’re producing a lot of debt and producing a lot of money to fund it, and so that’s changing the nature of capital flows.

Dalio instead recommended that investors “diversify between currencies, asset classes, and countries as the best way to reduce risk without reducing opportunity”.

Dalio: Cash is trash

This news might not be as relevant for us Aussie investors, who have never had much of a tradition of investing in bonds. However, a common investing practice over in the United States is the ’60/40 portfolio’, which advocates a 60% allocation to shares and a 40% allocation to bonds. Something to keep in mind.

Beyond diversification, Dalio also told investors that “liquidity and differentiation” should be guiding lights for portfolio construction in today’s environment: “liquidity allows an investor flexibility to change as circumstances change” he said.

Whilst Dalio is bullish on shares in general, he does nudge investors to differentiate between companies and countries that are “orderly and will prosper in this environment”, and those that are prone to bankruptcy and disorder. According to Dalio, disorder in a company or country  “depends on the entity’s income relative to its expenses, and its assets to liabilities”. Dalio said differentiation will allow investors to see “radical differences in financial consequences.” 

More reading

• Top brokers name 3 ASX shares to sell next week
• Is National Storage (ASX:NSR) a dividend share to buy?
• Top brokers name 3 ASX shares to buy next week
• 3 leading ASX dividend shares to buy for income
• Exciting ASX shares rated as buys by top fundie

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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Once again, a large number of broker notes hit the wires last week. Some of these notes were positive and some were bearish.

Three sell ratings that caught my eye are summarised below. Here’s why top brokers think investors ought to sell these shares next week:

Commonwealth Bank of Australia (ASX: CBA)

According to a note out of Morgan Stanley, its analysts have retained their underweight rating and $68.50 price target on this banking giant’s shares. Although the broker’s overall view of the major banks has improved, it notes that investors have driven their shares higher in recent weeks. This has particularly been the case for Commonwealth Bank, with its shares now trading well above its estimate for fair value. The broker also notes that there are limited cost reduction possibilities for the bank and also a risk from potential credit quality deterioration. The Commonwealth Bank share price ended the week at $80.00.

New Hope Corporation Limited (ASX: NHC)

A note out of Macquarie reveals that its analysts have retained their underperform rating and $1.00 price target on this coal miner’s shares. Although production at its Bengalla operation is currently in line with its expectations, the broker notes that the New Acland operation is ramping down after failing to get its expansion approval. In addition to this, the broker has concerns over potential legal issues relating to the latter mine and the outlook for thermal coal. The New Hope share price last traded at $1.18.

Oil Search Ltd (ASX: OSH)

Analysts at Credit Suisse have downgraded this energy producer’s shares to an underperform rating with a $3.10 price target. The broker made the move after Oil Search released its strategy update. It notes that this update revealed higher capital expenditure at the PNG LNG operation. In addition to this, it has been disappointed with the slow progress being made with the Alaska sell-down. The Oil Search share price was changing hands for $3.54 on Friday.

More reading

• ASX 200 ends flat on Friday
• Why the Oil Search (ASX:OSH) share price is the worst performer today
• Why Kogan, Oil Search, Orica, & Soul Pattinson shares are dropping lower
• What would it take for the ASX 200 to hit 7,000 again?
• ASX 200 up 0.1%: CBA’s APRA update, Mesoblast rockets, Oil Search sinks

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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The National Storage REIT (ASX: NSR) share price has had a turbulent year and is currently trading roughly in line with where it started it.

This is despite the company recently reporting big improvements in trading conditions.

How has National Storage been performing?

National Storage is a leading self-storage operator which has been growing at a solid rate over the last decade thanks to a combination of organic and inorganic growth. The latter is through its growth through acquisition strategy, which has been particularly effective over the last few years.

The good news for investors is that management has persisted with this strategy even during the pandemic. Last month at its annual general meeting, the company advised that it has completed eight acquisitions totalling $139 million in FY 2021. But it may not stop there. Management also revealed that its forward-looking acquisition pipeline remains strong.

And while 2020 has been difficult because of the pandemic, trading conditions have been improving greatly in recent months. In fact, at the meeting, the company revealed that in excess of 60,000 square metres of occupancy has been added since 1 July, which is the equivalent of 12 full centres.

In light of this, management was confident enough to reaffirm its underlying earnings per share guidance of 7.7 cents to 8.3 cents. This compares to underlying earnings per share of 8.3 cents in FY 2020.

Is the National Storage share price in the buy zone?

One broker that is positive on the investment opportunity here is Ord Minnett.

At present, the broker has an accumulate rating and $2.05 price target on its shares. It is also forecasting an 8 cents per share distribution in FY 2021.

Based on the current National Storage share price of $1.86, this implies potential upside of 10.2% over the next 12 months.

This potential return stretches to 14.5% if you include Ord Minnett’s dividend estimate, which equates to a 4.3% yield.

More reading

• 2 ASX dividend shares with yields of 4%+
• Takeovers will continue to rock ASX shares
• Buy CBA (ASX:CBA) and this ASX share for their dividends
• Forget savings accounts and buy these ASX dividend shares instead
• Why Bendigo and Adelaide Bank, Mach7, National Storage, & Unibail-Rodamco-Westfield are dropping lower

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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Last week saw a large number of broker notes hitting the wires once again. Three buy ratings that caught my eye are summarised below.

Here’s why brokers think investors ought to buy them next week:

A2 Milk Company Ltd (ASX: A2M)

According to a note out of Macquarie, its analysts have retained their outperform rating and $17.95 price target on this infant formula and fresh milk company’s shares. This follows the release of an update at its annual general meeting which reiterated its guidance for FY 2021. While the broker notes that a2 Milk Company will require a huge second half and that there’s still a lot of uncertainty in the daigou channel, it remains positive on the company’s medium term growth prospects. The a2 Milk share price ended the week at $13.90.

Aristocrat Leisure Limited (ASX: ALL)

Analysts at Citi have retained their buy rating and lifted the price target on this gaming technology company’s shares to $40.60. This follows the release of a full year result which was largely in line with expectations. Looking ahead, the broker believes the company is well-placed for growth and has upgraded its earnings estimates. It expects its earnings growth in FY 2021 to be driven by its Digital business and a recovery in the US market. The Aristocrat Leisure share price closed the week at $33.96.

EML Payments Ltd (ASX: EML)

A note out of UBS reveals that its analysts have commenced coverage on this payments company’s shares with a buy rating and $5.00 price target. The broker believes EML Payments is well placed to benefit from the accelerating shift to a cashless society. It also sees a lot of value in the Prepaid Financial Services acquisition from earlier this year. It feels this has opened up the company to significant growth opportunities. The EML Payments share price last traded at $3.63.

More reading

• Brokers name 3 ASX shares to buy right now
• Could the Aristocrat (ASX:ALL) share price be a leading ASX 200 growth share?
• Broker retains $20 price target on A2 Milk (ASX:A2M) share price
• Why the Aristocrat Leisure (ASX:ALL) share price can go higher from here
• China is a much bigger threat to the ASX bull run than COVID

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 EML Payments. The Motley Fool Australia owns shares of and has recommended A2 Milk. The Motley Fool Australia has recommended EML Payments. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Reserve Bank of Australia (RBA) recently cut the official interest rate down to 0.1%. In this article are some leading ASX dividend shares to buy for income.

These three ideas have been rated as buys by the Motley Fool Dividend Investor service.

Let’s get straight to it:

Propel Funeral Partners Ltd (ASX: PFP)

Propel is the second biggest funeral business in Australia and New Zealand. According to ABS stats, death volumes are expected to grow by 1.4% per annum between 2016 to 2025 and then increase by 2.2% per annum from 2025 to 2050.

The funeral business recently declared a fully franked full year dividend of 10 cents per share for FY20, which equates to a grossed-up dividend yield of 4.7% at the current Propel share price.

The ASX dividend share recently gave a trading update for the first quarter of FY21 which said that there was total funeral volume growth on the prior corresponding period, the average revenue per funeral displayed growth on FY20 (within its target range of 2% to 4%) and operating earnings before interest, tax, depreciation and amortisation (EBITDA) grew 18%.

That was on top of FY20’s growth which saw pro forma operating net profit after tax (NPAT) increasing by 8.4% and statutory operating net profit growing by 6.5%.

The company is now only expecting COVID-19 related impacts in isolated hot spots. Propel still believes growth will come from a growing and ageing population. Acquisition completed during, and since, FY20 will also help. New acquisitions could also occur.

Service Stream Limited (ASX: SSM)

Service Stream is an ASX dividend share involved in the design, construction, operation and maintenance of important networks like telecommunications and other utilities.

The NBN is its biggest customer and it recently won a contract extension. Service Stream management is working to diversify its earnings away from telecommunications.

In FY20, Service Stream paid an annual dividend per share of 9 cents, equating to a grossed-up dividend yield of 5.6% at the current Service Stream share price. In FY20 it increased revenue by 9% and EBITDA from operations went up 15.9%.

Service Stream is expecting its FY21 earnings to remain resilient, supported by long-term contracts. Continued demand is expanded across critical infrastructure networks where it will try to secure more organic growth.

The ASX dividend share will be particularly focused on winning additional work from the NBN’s recent $4.5 billion network upgrade.

Service Stream is also looking for acquisition opportunities. However, the company is expecting the FY21 result to be weighted towards the second half because of COVID-19 impacts in the first half where works were slowed and new projects delayed.

Brickworks Limited (ASX: BKW)

Brickworks has four different divisions. It has an Australian building products division where it’s the market leader for bricks, but it also sells other things like masonry, roofing, paving and precast.

The company also has an American building products division that it acquired in recent years. Brickworks is already the market leader in the north east of the US and it’s working to increase efficiencies there.

The ASX dividend share owns around 40% of investment conglomerate Washington H. Soul Pattinson and Co. Ltd (ASX: SOL).

It also owns 50% of an industrial property trust along with Goodman Group (ASX: GMG). This trust is steadily growing its net rental profit. This trust will soon count Amazon and Coles Group Ltd (ASX: COL) as paying tenants as two large, high-tech distribution warehouses are being built for them.

Brickworks’ dividend hasn’t been cut for over 40 years. The dividend is purely funded by the dividends from Soul Patts and the profit from the property trust.

At the current Brickworks share price it has a trailing grossed-up dividend yield of 4.6%.

More reading

• ASX 200 ends flat on Friday
• ASX stock of the day: Japara Healthcare (ASX:JHC) share price soars 23%
• Why the Oil Search (ASX:OSH) share price is the worst performer today
• Why Kogan, Oil Search, Orica, & Soul Pattinson shares are dropping lower
• Why Accent, Mesoblast, Redbubble, & Regis Healthcare shares are charging higher

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. The Motley Fool Australia has recommended Propel Funeral Partners Ltd and Service Stream Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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