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:

Altium Limited (ASX: ALU)

According to a note out of Morgan Stanley, its analysts have retained their overweight rating and $40.00 price target on this electronic design software platform provider’s shares. This follows the announcement that Altium is selling a non-core business to focus on its key Altium 365 platform. Morgan Stanley was encouraged by management’s comments on the platform and expects it to be the key driver of growth in the future. The broker was also pleased to see the company reiterate its full year guidance. Especially given the challenging operating environment. The Altium share price ended the week at $34.68.

Bapcor Ltd (ASX: BAP)

A note out of Citi reveals that its analysts have retained their buy rating and lifted the price target on this auto parts retailer’s shares to $8.85. The broker made the move following the release of a trading update which revealed stronger than expected sales growth. Citi expects this to result in a solid half year result in February. In addition to this, the broker likes Bapcor due to its defensive qualities, favourable tailwinds, and international expansion. The Bapcor share price was trading at $7.65 on Friday.

Zip Co Ltd (ASX: Z1P)

Analysts at Morgans have retained their add rating but trimmed the price target on this buy now pay later provider’s shares to $8.89. The broker made the revision to its price target to account for Zip’s $150 million equity raising last week. It notes that the funds will be used partly to support its growth in the key US market. Morgans was pleased with the accompanying update on its US business and the more than tripling of its transaction value in the country during November. Overall, the broker remains positive on the company’s future and sees strong growth ahead. The Zip share price ended the week at $5.44.

More reading

• Could this be the saving grace for the Zip Co Ltd (ASX:Z1P) share price?
• Why Bapcor, Fortescue, Nufarm, & Saracen shares are pushing higher
• Here’s how ASX buy now, pay later (BNPL) shares have performed in 2020
• 2 ASX growth shares to buy that keep delivering wins
• ASX 200 rises on Thursday

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Bapcor. 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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Many shares have not yet recovered from the 2020 stock market crash. Despite improving investor sentiment and the prospect of a brighter economic outlook in the long run, some stocks continue to trade at cheap prices.

Buying them could prove to be a profitable long-term move. Through building a diverse portfolio of high-quality companies that are presently experiencing weak operating conditions, it may be possible to generate a surprisingly large nest egg in the coming years.

Buying high-quality shares after the stock market crash

A number of today’s cheap shares are still unpopular many months after the stock market crash because of their weak near-term outlooks. Some sectors, such as energy, financial services and leisure, are facing unprecedented challenges at the present time. In many cases, their potential to grow sales and profit in the short run is very limited. As such, investor sentiment towards them is weak. This has caused their share prices to lag the wider index in many cases.

Buying such companies may not seem to be an attractive idea to many investors. However, those companies that have difficult operating conditions, while also having solid financial positions and a competitive advantage, may offer recovery potential over the long run. They may emerge in a stronger position after the stock market crash relative to their weaker sector peers. This may enable them to deliver improving financial performances in the coming years that translates into rising stock prices.

Diversification in a stock market recovery

It is easy to become complacent as a stock market recovery replaces a stock market crash. This may lead to a portfolio that lacks diversity, in terms of the number and range of companies that are held within it.

However, as this year’s market decline showed, a bull market can quickly turn into a bear market without warning being given. Therefore, while it may be tempting to only invest in the very best shares available at the present time, ensuring a portfolio is diversified could be crucial in generating high returns in the coming years. After all, it is unclear which companies and sectors will deliver growth in what could be a fast-paced and different economic outlook in a post-coronavirus world.

A long-term approach to buying cheap shares

Of course, a second stock market crash could occur in the near term. Risks such as Brexit and the coronavirus pandemic may remain in place for some time. They could prompt a period of weaker investor sentiment and a more challenging period for the world economy’s performance.

As such, taking a long-term view of any stocks purchased at the present time could be important in generating high returns. The stock market has always posted new record highs after its various declines. Using a buy-and-hold strategy may enable an investor to take advantage of a similar outcome after the 2020 stock market crash.

More reading

• 2 ASX dividend shares with 4%+ yields
• 3 recovery ASX shares to buy for 2021
• How useful is the P/E ratio in assessing ASX shares?
• Top brokers name 3 ASX shares to sell next week
• 4 rock-solid ASX dividend shares to buy for 2021

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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According to the latest cash rate futures, there market is pricing in a 65% probability of the Reserve Bank taking rates to zero in February.

Whether or not this transpires, time will tell. But one thing that is for sure, is that rates are unlikely to be going higher for a long time to come.

In fact, the latest Westpac Banking Corp (ASX: WBC) economic report reveals that its team expect rates to stay where they are until at least the end of 2022, but probably longer.

In light of this, if you want to overcome low interest rates, then you might want to add some dividend shares to your portfolio.

Two ASX dividend shares with generous yields are listed below:

National Storage REIT (ASX: NSR)

National Storage is one of the region’s largest self-storage providers. From its 200+ centres across Australia and New Zealand, the company tailors self-storage solutions to residential and commercial customers.

It has been growing at a solid rate over the last decade thanks to a combination of organic and inorganic growth. While trading conditions are tough at present because of the pandemic, it continues to supplement its growth with acquisitions. Looking beyond the pandemic, the future looks positive due to its exposure to ecommerce and a potential rebound in the housing market in 2021.

Management recently provided guidance for earnings per share to be at the upper end of its guidance range of 7.7 cents per share to 8.3 cents per share. It is also expecting an FY 2021 distribution of 90% to 100% of its underlying earnings. Based on this and the latest National Storage share price, this will mean a ~4% dividend yield in FY 2021.

Rural Funds Group (ASX: RFF)

Another option for investors to look at is property company Rural Funds. It owns a diversified portfolio of high quality Australian agricultural assets that are leased to experienced agricultural operators. The company’s revenues are derived from long-term leases across five sectors: almonds, cattle, vineyards, cropping and macadamias.

Given their ultra-long leases and built-in rental increases, Rural Funds appears well positioned to continue growing its rental income and distribution at a solid rate over the next decade. That certainly will be the case this in FY 2021. The company plans to increase its distribution by 4% to 11.28 cents per share. Based on the latest Rural Funds share price, this equates to a generous 4.3% yield.

More reading

• 4 rock-solid ASX dividend shares to buy for 2021
• 2 ASX dividend shares for 2021’s zero interest rate world
• Why the National Storage (ASX:NSR) share price is dropping lower
• Why the IOOF (ASX:IFL) share price is one to watch on Friday
• 2 quality ASX dividend shares with 5%+ yields

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. 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 price-to-earnings (P/E) ratio is one of the most oft-quoted statistics in the world of investing, usually coming after an ASX share’s price, and perhaps its market capitalisation.

This is justified to an extent – the P/E ratio can be a very useful metric to examine when you’re deciding whether to invest in a particular company. But it can also be misleading. So let’s look at some ways to use the P/E ratio, and when you shouldn’t.

P/E ratios: An introduction

So let’s first examine exactly what the P/E ratio tells us. The ratio represents the relationship between a company’s annual earnings, measured by its earnings per share (EPS), to its market capitalisation, measured by the share price. A company with a high P/E ratio will have lower earnings compared with its market capitalisation than a company with a low P/E ratio.

Let’s look at an example. So Coles Group Ltd (ASX: COL) reported an earnings per share metric of 73.3 cents for FY2020 back in August. That means the company brought in 73.3 cents in earnings for every share outstanding. So at the time of writing, the Coles share price is trading at $18.35. If we divide $18.35 (the price) by 0.733 (the earnings), we get a P/E ratio of 25.03.

How do we use this ratio?

The P/E ratio can be especially useful for comparing different companies within the same sector, or comparing a company to the broader S&P/ASX 200 Index (ASX: XJO). A dollar of earnings is a consistent metric (since every dollar is worth the same value across all companies).

Thus, since Coles has a P/E ratio of 25.03, and its rival Woolworths Group Ltd (ASX: WOW) currently has a P/E ratio of 43.66, we can say that the market is valuing each dollar that Woolworths earns at a higher rate than Coles’. In other words, the market is placing a premium on Woolies’ shares (why the market is choosing to do this is a whole other discussion!).

The ratio can be useful from a broad market perspective too. Right now, the ASX 200 Index has an average P/E ratio of 22.73, according to BlackRock. Thus, we can also say that investors are placing a higher premium on both Coles and Woolworths when compared to the entire index.

When is the P/E ratio not so useful?

Looking at the P/E ratio alone, however, is not a sound investment strategy. Investors tend to price different sectors according to their earnings risk. For example, Fortescue Metals Group Limited (ASX: FMG) currently has a P/E ratio of just 11.2, despite the company being at record highs. This could possibly reflect the fact the market is unwilling to pay a premium for an iron ore miner that is subject to the whims of the commodity markets (read low long-term earnings certainty).

Also, the P/E ratio is almost useless for valuing companies that don’t yet have earnings or which reinvest revenues aggressively for more growth. As an example, Afterpay Ltd (ASX: APT) doesn’t even have a P/E ratio yet because it chooses to reinvest its revenues into the business, rather than banking them as earnings.

And many investors are choosing to buy Xero Limited (ASX: XRO) shares right now due to the company’s massive growth, despite a technical P/E ratio of a whopping 641. If Xero simply switched from reinvesting its revenues to banking earnings, its P/E ratio would come back closer to Earth.

Foolish takeaway

The P/E ratio is a great metric, and a highly useful one in certain situations. But it possibly doesn’t deserve the prominence it has among parts of the investing community. Its lack of universal application and potential for creating misleading impressions of a company mean it should be carefully regarded in conjunction with plenty of other data and research.

More reading

• 4 rock-solid ASX dividend shares to buy for 2021
• 2 blue chip ASX dividend shares to buy next week
• These were the best performing ASX 200 shares last week
• These were the worst performing ASX 200 shares last week
• How to invest in US shares in 2021

Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia owns shares of AFTERPAY T FPO, COLESGROUP DEF SET, and Woolworths 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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There are some ASX shares that could be poised to recover from the impacts of COVID-19 in 2021.

Many different sectors were particularly hurt in 2020. Travel, shopping centres, cinemas, casinos and so on were all hit.

However, there are some ASX shares that could recover some more of the lost ground in 2021:

Sydney Airport Holdings Pty Ltd (ASX: SYD)

Sydney Airport is one of the largest infrastructure ASX shares.

Dion Hershan from Yarra Capital Management recently wrote that the ‘stay at home’ shares have outperformed the ‘out and about’ businesses by 21% since the market peak back in February. He thinks that with highly effective COVID-19 vaccines on the horizon and better treatment protocols, mobility will improve and confidence will rebound.

Yarra Capital has been looking for high quality businesses which have been de-rated to more appealing valuations through the sell-off. The fund manager said that it’s overweight to Sydney Airport as well other infrastructure shares like Transurban Group (ASX: TCL) and Atlas Arteria Group (ASX: ALX).

Sydney Airport recently told the market that there would be no distribution paid for the full year result because of the continued significant impact of COVID-19 on the business performance of the airport over the second half of the calendar year.

In terms of traffic, November 2020 showed the domestic passenger market is recovering for the ASX share, but international passenger numbers are still down heavily.

Total passengers were down 90.6% in November 2020 to 350,000. Domestic passengers were down 87.1% to 308,000 whilst international passenger numbers were down 96.9% to 42,000.

The modest recovery in domestic traffic in the month was driven by demand for NSW and Victoria interstate travel. Unrestricted travel between NSW and Victoria was permitted from 23 November 2020. The downturn in international passenger traffic is expected to persist until government travel restrictions are eased.

EML Payments Ltd (ASX: EML)

This ASX share has a number of different payment services for clients to use. EML Payments has general purpose reloadable offerings such as gaming payouts with white label gaming cards, salary packaging cards, commission payouts and rewards programs. EML Payments also offers physical gift cards, shopping centre gift cards and digital gift cards. Finally, it offers virtual account numbers.

The company boasts of a high retention rate with 99% of clients being retained through the three years to 2020. It also says there are high levels of barriers to entry, with necessary regulatory and compliance across the world being one of the main elements. It also has a high level of IT capability, with platforms for customer services.

Its gift and incentive volumes recovered significantly in the first quarter of FY21 after the initial impacts of COVID-19. Total FY21 first quarter revenue grew 20%, compared to the fourth quarter of FY20, to $40.6 million.

Earnings before interest, tax, depreciation and amortisation (EBITDA) generated in the FY21 first quarter was $10 million, which was 69% higher than the fourth quarter of FY20.

At the current EML Payments share price it’s valued at 30x FY23’s estimated earnings according to Commsec numbers.  

Audinate Group Ltd (ASX: AD8)

Audinate is an ASX share that owns the Dante platform, which distributes audio signals across computer networks. The company boasts about being the lead supplier of digital and audio video networking for the professional AV industry.

Some of Audinate’s main customer groups, being live sound and large events, are still being impacted because of COVID-19 impacts.

However, the recovery is on course within the sectors of corporate conferences and higher education. There has been a steady improvement in trading conditions since May.

In the first quarter of FY21, it generated revenue of US$5.2 million and EBITDA of AU$0.3 million.

More reading

• 4 leading ASX growth shares to buy for 2021
• These were the best performing ASX 200 shares last week
• Is the Sydney Airport (ASX:SYD) share price in the buy zone?
• Why Blackmores, Service Stream, Sydney Airport, & Webjet shares are dropping lower
• ASX 200 up 0.7%: Zip capital raising, A2 Milk trading halt, Sydney Airport dividend update

Tristan Harrison 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’s parent company Motley Fool Holdings Inc. owns shares of AUDINATEGL FPO. The Motley Fool Australia has recommended AUDINATEGL FPO and 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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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:

AGL Energy Limited (ASX: AGL)

According to a note out of UBS, its analysts have downgraded this energy retailer’s shares to a sell rating and cut the price target on them to $12.25. The broker believes that AGL is going to experience a sustained reduction in its earnings over the coming years. This is due to margin pressure from softening wholesale electricity prices and the push towards renewable energy. UBS notes that the majority of AGL’s electricity generation is powered by coal. The AGL share price ended the week at $13.22.

Commonwealth Bank of Australia (ASX: CBA)

A note out of Morgans reveals that its analysts have retained their reduce rating but lifted the price target on this banking giant’s shares to $64.00. According to the note, following the removal of dividend restrictions by APRA, the broker believes that Commonwealth Bank could increase its payout ratio to upwards of 75% over the coming years. While this would be a positive for dividend seekers, it isn’t enough for a change of rating. Morgans continues to believe its shares are overvalued and notes that other banks offer better value for money currently. The Commonwealth Bank share price was fetching $83.16 at Friday’s close.

Transurban Group (ASX: TCL)

Analysts at Citi have retained their sell rating and $12.83 price target on this toll road operator’s shares following an update last week. That update revealed that the company has sold a 50% stake in its Greater Washington assets to AustralianSuper and two other funds. While Citi sees positives in the move and expects it to reduce its leverage, it believes the reduction in earnings could put pressure on dividends until the funds are redeployed elsewhere. The Transurban share price ended the week at $14.15.

More reading

• How to invest in US shares in 2021
• AGL (ASX:AGL) shuts coal power unit after serious injury
• ASX 200 rises on Thursday
• ASX stock of the day: Why are Netwealth (ASX:NWL) shares up 7%?
• Here’s what is driving the Transurban (ASX:TCL) share price higher today

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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This article is about four ASX dividend shares that pay consistent payments to investors, even during difficult times:

Rural Funds Group (ASX: RFF)

Rural Funds is a real estate investment trust (REIT) that owns farmland across different agricultural sectors including cattle, almonds, macadamias, vineyards and cropping (sugar and cotton).

The REIT was actually one of the top FY21 picks by broker Bell Potter which liked the high-quality tenants and steadily-growing asset values of the farms.

Those farms are spread across a variety of states and climactic conditions for useful diversification.

The ASX dividend share aims to grow its distribution by 4% per annum. This is funded by contracted rental increases and productivity improvement investments at its farms.

At the current Rural Funds share price, it offers a FY21 distribution yield of 4.3%.

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

Soul Patts is one of the oldest listed businesses in the country. It has been listed in Australia since 1903. More than 40 employees have worked for the company for over 50 years. Five generations of the Pattinson family have served the company, as have three generations of the Dixson, Spence, Rowe and Letters families.

It’s an investment conglomerate that has exposure to many sectors including telecommunications, resources, building products, pharmacies, agriculture, financial services and swimming schools.

Some of its holdings include the following ASX shares: TPG Telecom Ltd (ASX: TPG), Clover Corporation Limited (ASX: CLV), Australian Pharmaceutical Industries Ltd (ASX: API), Bki Investment Co Ltd (ASX: BKI), Milton Corporation Limited (ASX: MLT) and Palla Pharma Ltd (ASX: PAL).

The business aims to take long-term positions in the businesses that it invests in, often with a contrarian approach.

In terms of being a reliable ASX dividend share, it has increased its dividend every year for 20 years in a row. That’s the longest growth record on the ASX.

Soul Patts pays for that dividend from the dividends and distributions received from its investments, after paying for its own operating expenses.

At the current Soul Patts share price it offers a grossed-up dividend yield of 2.8%.

Brickworks Limited (ASX: BKW)

Brickworks is one of the largest building products businesses in the country. It produces and sells a number of different products such as bricks, masonry, paving, precast and roofing. It’s also the market-leading brickmaker in the northeast of the US.

The business hasn’t cut its dividend for over 40 years, so it also has one of the longest dividend records. But it doesn’t have the consecutive dividend growth streak like Soul Patts.

However, it is actually invested in Soul Patts shares. Brickworks owns 39.4% of Soul Patts, which provides Brickworks with a growing stream of dividends and the capital value is steadily climbing over time as well.

It’s the Soul Patts dividends and the distributions from the joint venture (JV) property trust with Goodman Group (ASX: GMG) that entirely funds Brickworks’ dividend.

This JV structure is based on Brickworks selling surplus operational land into the trust at market value and Goodman funding the infrastructure works, to created serviced land ready for development. Balancing payments may be required to ensure a fair contribution towards the value of the fully serviced land. Once a lease pre-commitment is secured, the serviced land can then be used as security, with debt funding used to cover the cost of constructing the facilities.

This property trust is currently building huge warehouses for Amazon and Coles Group Ltd (ASX: COL) which, when completed, will see the trust’s gross assets rise above $3 billion and the net rental distributions to Brickworks are expected to rise by more than 25%.

At the current Brickworks share price it offers a grossed-up dividend yield of 4.3%.

APA Group (ASX: APA)

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

This ASX dividend share funds its distributions from the operating cashflow produced by its assets. APA regularly announces new plans to grow its asset base further. It plans to build a new pipeline in WA and that will link up with its existing pipeline.

APA recently announced it is going to increase its interim distribution by 4.3%, bringing the current distribution to $0.51 per unit, which equates to a distribution yield of 5% at the current APA share price. It has increased its distribution every year for about a decade and a half.

More reading

• 2 blue chip ASX dividend shares to buy next week
• 3 reasons why Brickworks (ASX:BKW) shares are a compelling idea
• 2 ASX dividend shares for 2021’s zero interest rate world
• ASX 200 rises 0.7% on Wednesday
• Here’s what these popular ASX dividend shares plan to pay investors in 2021

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The three ASX shares in this article could be some of the most interesting businesses to monitor in 2021.

Here are those three ASX stocks:

Pacific Current Group Ltd (ASX: PAC)

Pacific Current is a business that takes stakes in investment managers. The company then helps with its resources to grow the business. It can use capital, institutional distribution capabilities and operational expertise to help partners. It has around 15 boutique asset managers globally.

Dean Fremder of Perpetual Limited (ASX: PPT) said when Pacific Current shares were approximately 10% lower: “The stock’s really cheap. It’s on nine times earnings. It’s growing earnings at double digits, so more than 10% a year. It’s paying a 6.5% fully franked yield. And most excitingly, we think they can pay out a much larger portion of their earnings as dividends. We see no reason, given the surplus franking credits they have on the balance sheet, they can’t be paying a 10 or 11% fully franked yield in the next 12 months. So, really excited about that one.”

In FY20 the ASX share grew its underlying earnings per share (EPS) by 18% to $0.51. This was driven by funds under management (FUM) reaching $93.3 billion at 30 June 2020. FUM increased 52% when excluding the boutiques that were sold or acquired during the year. Fund manager GQG grew strongly with FUM rising from US$25.1 billion to US$44.6 billion.

In the quarter for the three months ending 30 September 2020 Pacific saw FUM grow by 14% to $106.4 billion. The vast majority of the FUM growth came from GQG.

According to estimates on Commsec, Pacific Current is valued at 9x FY23’s estimated earnings. It also has a grossed-up dividend yield of 8.3%.

Temple & Webster Group Ltd (ASX: TPW)

This ASX share is a furniture and homewares business that sells a wide variety of items through its online-only offering.

Temple & Webster has gained market share during this year as more shoppers move to online buying.

The company generated a lot of growth in FY20, it achieved revenue growth of 74% to $176.3 million. Second half revenue grew by 96% and fourth quarter revenue went up 130%.

Temple & Webster saw accelerated leverage in FY20 with earnings before interest, tax, depreciation and amortisation (EBITDA) soaring 483% to $8.5 million. The adjusted EBITDA margin improved from 2.5% to 5.3%.

However, growth didn’t stop in the first quarter of FY21, even when most of Australia was able to shop at physical retail locations again. At the time of its AGM, it reported year to date revenue growth of 138% in the year to 19 October 2020. October revenue growth was still more than 100%.

The FY21 first quarter EBITDA was $8.6 million, which was more than the whole of FY20. The contribution margin stayed ahead of its 15% target and customer satisfaction remains high with a net promoter score of around 70% and newer customers continue to perform better than historical comparisons.

The ASX share’s management is focused heavily on growth. The company said that it’s committed to a high growth strategy to take advantage of the structural shift towards online, capitalising on both organic and inorganic opportunities.

At the current Temple & Webster share price it’s valued at 35x FY22’s estimated earnings.

Pushpay Holdings Ltd (ASX: PPH)

Pushpay is an ASX share that’s exposed to the growing theme of payments shifting from cash to digital.

The idea behind Pushpay is that it helps connect the church with the congregation with tools like livestreaming. It helps facilitate electronic donations to large and medium US churches. The business is aiming for a 50% market share of this sector. This should translate into around US$1 billion of revenue.

This ASX share combines revenue growth with rising profit margins. The gross margin increased from 65% to 68% in the interim FY21 result.

Pushpay is also showing that its new combined offering is resonating with customers. ChurchStaq, the service which combines the features of both Pushpay and Church Community Builder, is quickly convincing customers to switch to that offering.

In FY21 it is expecting to generate earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) of between US$54 million to US$58 million.

At the current Pushpay share price it’s valued at 31x FY22’s estimated earnings.

More reading

• 4 leading ASX growth shares to buy for 2021
• These are the 7 best ASX retail shares in 2020
• 3 exciting ASX tech shares to buy
• Why Mesoblast, Pilbara Minerals, Pushpay, & Retail Food Group shares are dropping lower
• Why the Pushpay (ASX:PPH) share price is tumbling lower today

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of PUSHPAY FPO NZX and Temple & Webster Group Ltd. The Motley Fool Australia has recommended PUSHPAY FPO NZX and Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The last few months have been jam-packed with new companies hitting the ASX boards after completing their IPOs.

Here’s a summary of a few recent IPOs and how they have performed since listing:

Adore Beauty Group Limited (ASX: ABY)

The Adore Beauty share price has been a disappointing performer since listing on the Australian share market. The online beauty products retailer’s shares ended the week at $5.29, which is down almost 22% from its IPO price of $6.75. 

This is despite the company recently revealing that it is on course to outperform its prospectus forecast for the first half of FY 2021. It is now expecting revenue to come in at approximately $95.2 million for the six months, which is 7% higher than its guidance of $89 million.

Management also advised that the uplift in revenue is expected to have a positive impact on its operating earnings forecast for the half. Though, no guidance has been provided at this stage.

MyDeal.com.au Limited (ASX: MYD)

The MyDeal.com.au share price ended the week at $1.22. This means the ecommerce company’s shares are up 22% from its IPO price of $1.00.

As with Adore Beauty, MyDeal’s operational performance has been very strong since listing. It recently released a trading update for November, which revealed record gross sales of $30 million for the month. This was up 192% year on year and 63% month on month.

In addition to this, the company advised that its active customers grew to a record 778,867 at the end of November. This was more than triple what it had a year earlier.  And pleasingly, more and more customers are returning for additional purchases. During the month of November, 52.9% of all transactions were from returning customers. This was up from 49.7% in the first quarter of FY 2021.

Nuix Limited (ASX: NXL)

The Nuix share price has been an exceptionally strong performer since listing on the ASX boards. The analytics software provider’s shares ended the week at $8.23, which is 55% higher than its offer price of $5.31 per share.

Nuix is a leading investigative analytics and intelligence software provider. This software has been used by customers around the world to process, normalise, index, enrich, and analyse data from a multitude of different sources. This includes for a number of important investigations such as the Panama Papers, the Banking Royal Commission, organised crime rings, corporate scandals, and terrorist activities.

Judging by its post-IPO rise, investors appear to believe its shares were great value based on its positive long term growth outlook.

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

The post Here’s how Nuix (ASX:NXL) and these recent IPOs are performing since listing appeared first on The Motley Fool Australia.

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As I mentioned here earlier, the interest rates on offer with term deposits have fallen to such low levels, you would have to invest millions into them to earn a sufficient income.

In light of this, the share market looks set to remain the place to earn a passive income for the foreseeable future.

But which shares should you buy? Here are two ASX dividend shares that are rated as buys:

Australia and New Zealand Banking GrpLtd (ASX: ANZ)

While trading conditions in the banking sector are likely to remain relatively tough in the near term, they are certainly improving now the worst of the pandemic appears to be behind us. In addition to this, the relaxing of responsible lending rules and the improving housing market look set to give the banks a boost in 2021.

Another positive is that APRA has just announced that it will be removing its dividend restrictions on the banks. This means they will be free to pay out however much of their profits that they see fit in 2021.

It was because of this that Morgans reiterated its add rating and lifted its price target on the company’s shares to $26.00 last week. Morgans is forecasting a $1.27 per share dividend in FY 2021 and a $1.50 per share dividend in FY 2022. Based on the current ANZ share price, this represents 5.4% and 6.4% dividend yields, respectively.

Coles Group Ltd (ASX: COL)

This leading supermarket operator has been growing at a solid rate in recent years thanks to a combination of same store sales growth, store expansion, and its defensive qualities. The latter has been particularly helpful during the pandemic, with Coles reporting strong sales growth despite the economic downturn.

Pleasingly, this strong form has continued in FY 2021 even as COVID headwinds ease. This appears to have put Coles in a position to deliver a strong full year result next year.

Analysts at Citi appear confident this will be the case. The broker recently retained its buy rating and lifted the price target on the Coles share price to $21.20. It is also forecasting a 63.5 cents per share fully franked dividend this year. This represents a fully franked 3.5% dividend yield.

More reading

• Brokers name 3 ASX shares to buy right now
• 2 blue chip ASX dividend shares to buy
• 3 key takeaways from the ANZ annual general meeting
• ASX 200 up 1.1%: ANZ AGM, Resolute jumps, travel shares soar
• The Commonwealth Bank (ASX:CBA) share price is climbing higher today. Here’s why.

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

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