Next month certainly is a big one for dividends, with billions due to be paid out to Australian bank shareholders.

Here’s what you should be expecting from your bank in December and then again in FY 2021:

Australia and New Zealand Banking GrpLtd (ASX: ANZ)

ANZ shareholders can look forward to the bank paying them a 35 cents per share fully franked dividend on 16 December.

Looking ahead, according to a note out of Morgan Stanley, it is expecting ANZ to pay a 95 cents per share dividend in FY 2021. Based on the current ANZ share price, this represents a 4.2% dividend yield.

Macquarie Group Ltd (ASX: MQG)

This leading investment bank is paying its shareholders a partially franked 135 cents per share dividend on 22 December

After which, analysts at Ord Minnett are forecasting a 385 cents per share dividend over the next 12 months. Based on the latest Macquarie share price, this implies a forward 2.75% dividend yield.

National Australia Bank Ltd (ASX: NAB)

On 10 December NAB will be paying its shareholders a fully franked 30 cents per share dividend.

The bank’s dividend is expected to grow to $1.00 per share in FY 2021 according to analysts at Ord Minnett. Based on the current NAB share price, this will mean a fully franked 4.3% yield.

Westpac Banking Corp (ASX: WBC)

Westpac is paying its shareholders a 31 cents per share fully franked dividend on 18 December.

Next year Australia’s oldest bank is forecast by Morgan Stanley to pay a fully franked 90 cents per share dividend. With the Westpac share price currently fetching $20.23, this represents a 4.4% dividend yield.

What about CBA?

Wondering where the Commonwealth Bank of Australia (ASX: CBA) dividend is? Australia’s largest bank operates on a different financial calendar to the other banks. As a result, it pays its dividends in March and September.

Looking ahead, Ord Minnett is expecting a 270 cents per share dividend in FY 2021. Based on the current CBA share price, this will be a 3.4% dividend yield.

More reading

• Why the banks are back in the ASX 200 spotlight
• ASX 200 Weekly Wrap: ASX 200 on track for a top month
• Is the Westpac (ASX:WBC) share price a buy?
• The NAB (ASX:NAB) share price is up 25% in November
• The Telstra (ASX:TLS) dividend yield is 8 times greater than term deposits

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

The post Here’s when your ASX bank dividends are being paid in December appeared first on Motley Fool Australia.

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Australia’s big four banks haven’t exactly had the best of runs lately.

To refresh your memory, we’re talking about the multi-billion-dollar market leaders here: Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group Ltd (ASX: ANZ), and National Australia Bank Ltd (ASX: NAB).

Between royal commissions, plummeting interest rates and an economy-stalling global pandemic – to name just a few issues – it would seem they just can’t catch a break.

Indeed, the share prices of all 4 of the big four are still well down in 2020. Worse still, if you’d bought shares in any of the big four banks 5 years ago, in November 2015, every one of them would currently be trading at a lower share price. (Note, we’re not talking total returns here, as we’re not taking dividend payments into account.)

The NAB share price, for example, is down 19% over 5 years. The CBA share price is down a more muted 1%.

To put that in some perspective, over that same 5 years, the S&P/ASX 200 Index (ASX: XJO) is up 27%.

The tide could be turning for Australia’s banks

Like most every ASX share, the banks were savaged during the wider COVID-driven market panic in late February and March. But they’ve defied a lot of gloom and doom forecasts to come back strongly.

Since the 23 March low, the CBA share price is up 46%. That leaves shares only 0.5% down since 2 January.

NAB’s share price is up 66% from 23 March. Though NAB shares remain down 6% so far in 2020.

The past month has been particularly promising for shareholders in the big banks. NAB’s shares are up 24% and CBA’s have gained 15%, both outpacing the 11% gain posted by the ASX 200.

And there could be more good news to come.

Party like it’s 1976!

According to the Australian Financial Review, growth among Australia big four banks in the September quarter is forecast to be between 3% to 4.1%. The last time the banks posted that kind of growth?

1976.

Earlier this month, Morgan Stanley (NYSE: MS) analyst Richard Wiles wrote:

For the Australian banks, tail risks have decreased given highly supportive fiscal and monetary policy, the end of the Victorian lockdown, an improving outlook for the housing market, and recent progress on a COVID-19 vaccine.

UBS Group (NYSE: UBS) analyst Jon Mott, quoted by the AFR, is also cautiously optimistic, saying:

While the banks are no longer cheap in absolute terms, we remain positive for the cyclical recovery. However, we are very conscious of the structural headwinds to revenue and pre-provision profits from sustained near-zero rates.

The banks’ CEO’s have joined in the optimism that Australia’s economic outlook for 2021 now is much better than what most analysts had forecast just a few months ago.

CBA’s chief executive, Matt Comyn, speaking to the Australian Financial Review Banking & Wealth Summit on 18 November, said:

The speed of their recovery has been faster than we’d anticipated and a lot better than we’d feared, and we’re increasingly optimistic. To give you an example, we were previously forecasting, I think, 2.75 per cent GDP growth in calendar 2021 – that’s now at 4.5 per cent. I think where we have an even more optimistic view is on unemployment, I think the RBA had 6.5 per cent by the end of next calendar year, and we’re at 5.75 per cent.

NAB’s chief executive officer, Ross McEwan, added:

Shoe sales went up 1600 per cent in the first week [after lockdown]. It’s like everyone went out and bought a pair of shoes. We’re now expecting the Australian economy to get back to pre-COVID levels by late 2021, much earlier than we originally thought. There are still a number of big issues to manage, but overall the current picture better reflects the best-case scenario we presented at our recent financial results.

In a research report released by investment manager Ausbil earlier today, Paul Xiradis, Ausbil’s chief investment officer, labels the banks “one of the best risk-adjusted opportunities” to take advantage of Australia’s resurging economy:

As the economy builds strength, and companies complete their repositioning for a changed world and earnings growth returns, we believe one of the best risk-adjusted opportunities for leverage to a resurging economy is in the banks. Banks are still trading well below their long-term multiples, have experienced less delinquency and bad debts than first thought, and are all well-capitalised.

With leniency recently expressed by APRA in terms of dividends, we expect a resurging banking sector to return to paying more normalised dividends on the back of a resurging economy in 2021.

Although shares in all the big four banks are down today, along with the wider ASX 200, the better than expected economic news offers renewed hope for the year ahead.

More reading

• ASX 200 Weekly Wrap: ASX 200 on track for a top month
• Is the Westpac (ASX:WBC) share price a buy?
• The NAB (ASX:NAB) share price is up 25% in November
• The Telstra (ASX:TLS) dividend yield is 8 times greater than term deposits
• Is the CBA (ASX:CBA) share price overvalued?

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

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With so many shares to choose from on the ASX, it can be hard to decide which ones to buy.

The good news is that brokers across the country are doing a lot of the hard work for you.

Three top shares that leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Aventus Group (ASX: AVN)

According to a note out of Goldman Sachs, its analysts have retained their buy rating and $2.76 price target on this retail park operator’s shares. This follows a tour of the company’s recently completed Caringbah Super Centre development. The broker notes that the centre is performing above expectations in respect to returns and tenant sales. Goldman believes this development demonstrates the opportunities the company has in adjoining vacant land. Something which it believes could be a key driver of growth in the future. Another positive, the broker points out, is that Aventus’ shares offer a forward 6.1% dividend yield according to its forecasts. The Aventus share price is fetching $2.72 this afternoon.

Karoon Energy Ltd (ASX: KAR)

A note out of Macquarie reveals that its analysts have retained their outperform rating and lifted the price target on this energy producer’s shares to $1.40. Although the company’s shares have rocketed higher since the renegotiation of the terms of its Bauna acquisition, it still sees plenty of upside ahead. Particularly given its promising Neon and Goia oil fields in Brazil. The Karoon Energy share price is trading at $1.01 on Monday.

Treasury Wine Estates Ltd (ASX: TWE)

Analysts at Morgan Stanley have retained their overweight rating and $11.00 price target on this wine company’s shares. This is despite China placing material tariffs on the company’s exports in response to dumping allegations. Although it sees limited options for the company to continue exporting to China through normal channels and expects this to have a big impact on its sales, it isn’t enough for a change of rating just yet. Morgan Stanley appears to still see value in its shares at the current level. The Treasury Wine share price is trading at $8.65 today.

More reading

• Why Kathmandu, Resolute, Select Harvests, & Treasury Wine Estates are dropping lower
• ASX 200 drops 0.5%: Treasury Wine sinks, Zip flat after AGM update, Bega Cheese rises
• Treasury Wine (ASX:TWE) share price sinks 12% after responding to China export tariff
• ASX 200 Weekly Wrap: ASX 200 on track for a top month
• 3 ASX dividend shares with 5%+ yields to 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 Treasury Wine Estates Limited. The Motley Fool Australia has recommended AVENTUS RE UNIT. 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 Dimerix Ltd (ASX: DXB) share price lifted higher today after the company announced the start of its second clinical study on lead drug candidate, DMX-200. At the time of writing, the Dimerix share price is up 6.1% at 26 cents.

What’s driving the Dimerix share price?

The Dimerix share price is storming higher following the announcement of its international study into COVID-19 patients. Led by Professor Meg Jardine at the University of Sydney Australia, the clinical trial will collaborate with Professor Vivek Jha and The George Institute for Global Health, in India.

DMX-200 was chosen for a partner study of the controlled evaluation of angiotensin receptor blockers for COVID-19 respiratory disease (Clarity) study. The Clarity 2.0 will seek to monitor the treatment of DMX-200 in COVID-19 patients who are admitted to hospital.

The phase 3, Clarity 2.0 study will assess roughly 600 patients in India who have tested positive for coronavirus, using DMX-200 together with an angiotensin receptor blocker. The randomised, double blind, controlled study will use the World Health Organisation’s (WHO) 7-point health score. At the 14-day treatment day mark, Dimerix will record the primary endpoint results. Recruits in the study will be administered the drug for a period of up to 28 days and followed up for a total of 6 months.

The DMX-200 aims to reduce damage from inflammatory immune cells by blocking signals and limiting movement predominately in the lungs. When infected with COVID-19, patients usually suffer from breathing complications, prior to the onset of acute respiratory distress syndrome.

What did management say?

Commenting on the potential applications of DMX-200, Professor Meg Jardine said:

We generally see that people with chronic health conditions that include inflammatory drivers, such as chronic kidney disease, diabetes, cardiovascular disease and obesity, are also those who are more vulnerable to respiratory complications if they contract the SARS-CoV2 virus. Some of those inflammatory drivers interact with the blood pressure system which is why some common blood pressure medications may improve outcomes in COVID-19 disease.

Early results suggest that DMX-200 may have stronger anti-inflammatory effects when used in combination with these blood pressure medications. The Clarity and Clarity 2.0 studies are designed to answer whether these blood pressure medications, used alone or in combination with DMX-200, may alter the course of COVID-19 disease and provide a better outcome for patients.

Dimerix CEO and managing director Dr Nina Webster added:

Our lead candidate, DMX-200, has demonstrated efficacy across three different studies in patients with active inflammatory disease, and we are very pleased to support a second research study in COVID-19 patients as well as progressing DMX-200 into a Phase 3 clinical study in the rare kidney disease Focal Segmental Glomerulosclerosis (FSGS) in the first half of 2021.

About the Dimerix share price

The Dimerix share price hit an all-time high of 78 cents in September, but is still a long way off that level despite today’s rise. Sitting at 26 cents, the Dimerix share price is up 100% since the beginning of the year.

More reading

• Why the Bega Cheese (ASX:BGA) share price is rising again today
• Impedimed (ASX: IPD) share price up 6% on study results
• 3 ASX dividend shares to buy in December
• Why the holidays are looking up for Sydney Airport (ASX:SYD) shares
• Stock market crash: I’d drip-feed money into cheap shares to make a million

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

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Bega Cheese Ltd (ASX: BGA) shares are again having a top day on the markets today. At the time of writing, the Bega Cheese share price is up another 0.74% to $5.46. The S&P/ASX 200 Index (ASX: XJO) is commensurately down 0.9%, meaning Bega is significantly outperforming the broader market today.

It was a lot better earlier in the day too. Soon after open, Bega reached a high of $5.78, which was a gain of more than 5% at that time, before settling at its current share price. On today’s moves, the Bega share price is now up nearly 11% over the past month, and up more than 28% year to date.

So why is this company continuing to power ahead today?

Bega brings home the bacon… and cheese

Today’s rise in the Bega share price is likely a continuation of the market reaction to last week’s blockbuster acquisition news. On Friday, Bega told the markets it had successfully bid for Lion’s dairy and drinks portfolio of products and brands. Lion is a giant company and a subsidiary of the Japanese titan Kirin. It owns a massive portfolio of brands, including beers like XXXX, Toohey’s, Hahn, James Squire and Little Creatures, as well as McKenna Bourbon and Four Pillars Gin.

But it’s the dairy and drinks division that Bega is acquiring from Lion, not the company’s alcoholic beverage assets. This portfolio includes well-known and iconic Aussie dairy staples like Dairy Farmers, Pura, Dare, Big M, Farmers Union and Yoplait, as well as other well-known beverage brands like Berri, Daily Juice Co and Vitasoy.

Bega is reportedly paying Lion $534 million for the acquisition, which is set for final completion early next year. This acquisition comes three years after Bega’s last blockbuster deal. That saw the company acquire another iconic Australian brand – Vegemite – from another large foreign multinational, the United States giant Mondelez International Inc (NASDAQ: MDLZ). Mondelez is the owner of brands like Cadbury, Ritz and Oreo and old licensee of the Kraft brand in Australia. That deal also included the acquisition of the Kraft-branded peanut butter and mayonnaise ranges, as well as Kraft’s famous Mac ‘n’ Cheese.

What does this purchase mean for Bega?

According to reporting in the Australian Financial Review (AFR) last week, the Lion deal will see Bega’s latest annual revenue of $1.6 billion supplemented with another $1.5 billion in sales that Lion brings to the table. It will also swell Bega’s 7 manufacturing plants to 20, and add 134 distribution centres to Bega’s existing 10. The AFR also tells us that this deal will result in Bega’s revenue from branded products increasing from its current 59% level to 80% after the deal. 

More reading

• ASX 200 drops 0.5%: Treasury Wine sinks, Zip flat after AGM update, Bega Cheese rises
• Why Afterpay, Bega Cheese, Humm, & Telix shares are storming higher
• ASX 200 Weekly Wrap: ASX 200 on track for a top month
• ASX 200 drops on Friday
• Is it too late to buy the surging Bega (ASX:BGA) share price?

Motley Fool contributor Sebastian Bowen owns shares of Mondelez International and Kraft Heinz. 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 Impedimed Limited (ASX: IPD) share price lifted this morning on positive results from a significant cancer screening study. The results show that its bio-impedance spectroscopy (BIS) technology is more effective in screening and detecting subclinical breast cancer. Particularly in high-risk patients.

The Impedimed share price shot up as high as 18.5 cents in early trade today but has since retreated to 17 cents, up 6.25% at the time of writing.

What did the study find?

The medical device company is developing ‘BIS L-Dex’, a device that incorporates its in-house L-Dex technology and BIS to measure and monitor fluid status in breast cancer patients. 

The device sends a low-level electrical signal through the body. As lymphedema (abnormal swelling that develops as a side-effect of breast cancer surgery or radiation therapy) develops, the amount of fluid increases. This makes it easier for the signal to travel though the  body’s extracellular fluid. The L-Dex BIS then gives a score based on how easily the electrical signal moves through both unaffected and affected parts. 

The study confirmed that overall, the BIS L-Dex device achieved an 81% relative reduction in the rate of chronic lymphoedema when compared with tape measure – with a p-value of <0.001. In medical statistics, a p-value of <0.001 is the highest score and indicates that it’s statistically significant. 

The results are also clinically significant, demonstrating patients monitored with BIS L-Dex were significantly less likely to develop chronic breast cancer-related lymphedema (BCRL). 

Impedimed said the study was performed on more than 67,000 women with breast cancer, with follow-up ranging from 8 months to 3.9 years. This meta-analysis will form a strong submission to the National Comprehensive Cancer Network (NCCN) in the United States.

A bit about Impedimed

Impedimed is a medical device company that produces a family of FDA-approved devices. It has been listed on the ASX since 2007.

Earlier this month, the company made news when pharmaceutical giant AstraZeneca selected its Sozo device for a phase-2 trial in order to measure fluid volume in patients with chronic kidney disease. The AstraZeneca study will use the Impedimed device to evaluate the efficacy, safety and tolerability of a combination of two AstraZeneca drugs.

How has the Impedimed share price performed in 2020

In the first quarter of FY21, Impedimed reported revenue of $1.5 million, an increase of 11% on the prior corresponding period. Impedimed also had $15.4 million cash on hand at 30 September 2020.

The Impedimed share price is up more than 430% since its 52-week low of 3.2 cents, and it’s also up by 13% since the beginning of the year. The company commands a market value of $172 million.

More reading

• Here’s why the Impedimed (ASX:IPD) share price shot up 13% today

Motley Fool contributor Eddy Sunarto 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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In this article are three ASX dividend shares that are rated as buys by one of the income-focused Motley Fool investment services.

Income is more in focus with the Reserve Bank of Australia (RBA) recently cutting the official interest rate to just 0.1%.

Some businesses which used to have higher dividend yields cut their dividends during the main COVID-19 period, such as the large ASX banks like Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB) and Australia and New Zealand Banking Group Ltd (ASX: ANZ).

The follow three recommendations grew the dividend or distribution in 2020:

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.

The energy infrastructure business has increased its distribution every year in a row for a decade and a half.

The ASX dividend share increased its total FY20 distribution by 6.4% to 50 cents per unit. This was funded by operating cashflow rising by 8.3% and net profit after tax (NPAT) going up by 10.1%.

At the current APA share price it has a trailing distribution yield of 4.75%.

APA is rated as a buy by the Motley Fool Everlasting Income service.

Brickworks Limited (ASX: BKW)

Brickworks is another business with a long dividend record. It hasn’t cut its dividend in over four decades.

The company owns various businesses and assets that provide steady earnings and growing distributions.

The ASX dividend share has a 50% ownership of an industrial property trust which it owns along with Goodman Group (ASX: GMG). The trust will soon finish two distribution warehouses for Coles Group Ltd (ASX: COL) and Amazon which should boost the rental distributions from the property trust by around a quarter.

Its non-construction assets alone fund the dividend.

However, Brickworks does run two large building products businesses. In Australia, where it sells bricks, roofing and other products, it’s seeing a recovery.  

Whereas its North American operations are facing difficulties in light on COVID-19 impacts. However, management are still confident about the long-term in the USA.

At the current Brickworks share price it has a grossed-up dividend yield of 4.4%.

Brickworks is currently rated as a buy by the Motley Fool Dividend Investor service.

Bapcor Ltd (ASX: BAP)

Bapcor is the largest auto parts business in Australia and New Zealand with brands like Burson Trade, Autobarn, Midas, ABS and Autobarn.

Despite doing a capital raising in light of early COVID-19 impacts, Bapcor still increased its dividend in FY20 by 2.9% to 17.5 cents per share. But that includes the final dividend being maintained at 9.5 cents per share.

But the ASX dividend share’s pro-forma net profit after tax fell by 5.5% in FY20.

However, FY21 has started with growth in the first quarter. Burson Trade revenue was up 10%, with same store sales growth of 7.7% – it was up 17% excluding Victoria. New Zealand revenue grew by 6% on same store sales growth of 4%. Retail revenue soared 47% higher, with Autobarn same stores sales going up 36%. Finally, specialist wholesale revenue went up 45%, though excluding acquisitions revenue went up 18%. Overall, group revenue went up by 27%.

At the current Bapcor share price it has a trailing grossed-up dividend yield of 3.6%.

The Bapcor share price is currently rated as a buy by the Motley Fool Dividend Investor service.

More reading

• What is a holding company?
• 4 ASX growth shares to buy in December
• Is the Bapcor (ASX:BAP) share price a buy?
• 3 ASX dividend shares rated as buys
• APA Group (ASX:APA) share price flat despite major project news

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bapcor and Brickworks. The Motley Fool Australia owns shares of APA Group and COLESGROUP DEF SET. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price action this year provides a concise snapshot of the damage inflicted by the global pandemic.

After gaining more than 38% in 2019, things took a sharp turn for the worse in February this year. That’s when investors began to cotton on to the fact that the kind of lockdowns China had instituted to control the coronavirus in Wuhan could spread across the globe.

As indeed, they did.

With the prospect of international and domestic air travel grinding to a halt, the Sydney Airport share price crashed more than 45% from 4 January through to 19 March. Since that low, shares have rebounded by 48%. Still, Sydney Airport shares remain down nearly 20% year to date.

But with domestic borders reopening, the light at the end of the tunnel for Sydney Airport, and a host of other ASX travel and leisure shares, appears to be growing much nearer.

What does the company do?

Sydney Airport Holdings owns a 100% of Sydney Airport. The domestic and international gateway connects to more than 90 other airports around the globe.

The company is headquartered in Sydney. Its two main business units – Aviation (Sydney Airport) and Leasing & Advertising Opportunities ­– provide aeronautical, retail, property, car rental, and parking and ground transport services.

Sydney Airport listed on the ASX in 2002.

Why the Sydney Airport share price is gaining today as the ASX 200 slips

After opening 0.6% higher in the early morning, the S&P/ASX 200 Index (ASX: XJO) is down 0.9% in afternoon trading.

The Sydney Airport share price, while also giving back some of its earlier intraday gains, remains up 0.15% today. That puts Sydney Airport shares up around 24% in November, compared to a 10.5% gain on the ASX 200.

Investor enthusiasm is likely driven by the reopening of most state borders.

New South Wales is again open to Victoria as of last week, and tomorrow Queensland and South Australia will reopen their borders with Victoria. Tomorrow will also see travellers from Sydney once more being allowed to fly into Queensland.

That’s “huge” news, according to Sydney Airport’s CEO, Geoff Culbert, as quoted by the Australian Financial Review:

We are expecting a really material impact on the amount of passengers coming through the airport. If you look at trips from Sydney to Queensland, Sydney into Victoria combined, they represent about 70 per cent of our total domestic traffic and about 50 per cent of all traffic through the airport, so those two border openings are going to be huge.

Even with the pending rollout of a COVID vaccine, international travel is unlikely to return to its pre-pandemic levels for some time. But the promised return of domestic air travel is already boosting interest in Sydney Airport’s shares.

More reading

• ASX 200 Weekly Wrap: ASX 200 on track for a top month
• 2 quality ASX cyclical shares to buy today
• ASX 200 Weekly Wrap: ASX continues to climb, despite outage
• ASX 200 up 0.1%: CBA’s APRA update, Mesoblast rockets, Oil Search sinks
• Sydney Airport (ASX:SYD) share price resilient despite plummeting passenger traffic

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

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There are a wide range of cheap shares available to buy following the 2020 stock market crash. However, in many cases they face uncertain futures that include the prospect of a second market downturn in the coming months.

Therefore, drip-feeding money into undervalued stocks could be a sound move. It may enable you to capitalise on even lower valuations that could become available further down the line.

Over time, this strategy may boost your returns. It may even improve your prospects of making a million.

Drip-feeding money into cheap shares

Slowly buying cheap shares could be a better idea than investing a lump sum because of the uncertain economic outlook. At the present time, risks such as coronavirus and Brexit remain relatively high. Any of those threats, as well as a large number of other risks, could cause a second stock market crash. This would mean that investors who invest a lump sum today experience paper losses. They may also be unable to take advantage of even lower stock prices in the coming months.

As such, buying smaller amounts of shares on a regular basis could be a more logical strategy. Regular investing services are widely available, with the cost of a trade being significantly lower than it otherwise would be. This means that regular investing does not produce excessive commission costs that negate the benefits of investing slowly in undervalued stocks.

Cheap shares with growth potential

Buying cheap shares after the stock market crash could be a sound move. Certainly, in some cases companies are currently trading at low prices for good reason. For example, they may have weak market positions or their balance sheets could contain significant amounts of debt that inhibit their financial prospects. However, many high-quality companies are currently trading at low prices because of weak investor sentiment towards equities.

Historically, buying undervalued shares has been a profitable strategy. Investors who have previously purchased bargain stocks have generally benefitted to a greater extent from the market’s long-term growth prospects compared to their peers who purchase companies with high valuations. Low share prices mean greater scope for capital returns that could have a positive impact on your portfolio.

Making a million

Drip-feeding money into cheap shares can produce surprisingly large portfolio values over the long run. For example, investing $500 per month at the stock market’s historic annual growth rate of 8% would produce a $1 million portfolio within 35 years.

However, through buying undervalued shares today and holding them for the long run, you may be able to obtain a higher return than that of the wider market. This may improve your prospects of becoming a millionaire as the stock market recovers from its recent crash over the coming years.

More reading

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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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A holding company is designed for one specific purpose – to purchase and hold shares in other companies. Whereas a normal company is formed to provide products and services to clients, a holding company essentially ‘outsources’ that. This type of company will own assets in other companies, which then provide products and services to the public.

So, what does this mean for investors?

Buying shares in a holding company means that you are essentially accessing a number of other companies. This gives you exposure to multiple securities through a single purchase.

Exchange-traded funds (ETFs) offer a similar style of investing. Just as an ETF holds multiple shares inside a fund, a holding company holds other securities.

Today, I’m looking at two well-known companies on the ASX that are both considered to be ‘holding companies’. Although they have slightly different investment strategies, both are interesting case studies.

Premier Investments Limited (ASX: PMV)

According to the company, Premier Investments was created for the following reason:

The company was established as an investment vehicle to maximise growth in capital returns to shareholders. This is achieved through the acquisition of controlling or strategic shareholdings in premier Australian companies. A particular focus is given to retailing, importing and distributing.

You can see here that Premier was entirely created to invest in other companies. This is usually the main strategy of a holding company. 

What does Premier Investments own?

Premier Investments wholly owns the retail conglomerate The Just Group. If you aren’t familiar with the name, you might recognise the brands. The Just Group owns and operates the following popular retail brands:

• Smiggle
• Peter Alexander 
• Just Jeans
• Jay Jays
• Portmans
• Jacqui E
• Dotti

Premier Investments obtained a controlling interest in the shares of Just Group Limited in 2008. This came after an off-market takeover offer, which saw Premier purchase 100% of the shares. Just Group Limited was removed from the ASX after this occurred.

Additionally, Premier Investments owns 28.06% of Breville Group Limited, another well-known Australian brand. Breville Group is a leading provider of small electrical appliances. Breville was founded in 1932 (during the Great Depression) and was originally known as ‘Breville Radio’!

Breville’s brands include:

• Breville
• Kambrook
• Sage by Heston Blumenthal
• Distribution of Ronson and Philips products.

The Premier Investments share price

The Premier Investments share price is up more than 20% in 2020. However, during March this year, it crashed hard as a result of COVID. The share price fell from $21.61 down to as low as $8.07, representing a catastrophic drop of 62%. 

Premier has since recovered strongly from this initial setback – not only did it recover lost ground, but exceeded it. The company created new all-time highs in October this year and has managed to stay above those levels since then. In fact, from the lows in March of $8.07 to today’s price of $22.76, Premier has risen more than 170%!

One thing to note is that Premier Investments delivered strong financial results this year, in spite of COVID. This has helped to move the share price in a positive direction. 

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

According to the company, Soul Pattinson (or ‘Soul Patts’) was created for the following reason:

WHSP is a significant investment house with a portfolio encompassing many industries. These include its traditional field of pharmaceuticals, as well as mining, building materials, property investment, telecommunications, financial services and other equity investments.

Soul Patts certainly has a much broader scope than Premier, but the concept is very similar – it’s also a company designed to invest in other companies.

What does Soul Pattinson own?

Soul Pattinson owns a wide range of investments, many of which are ASX listed companies:

• TPG Telecom Ltd (ASX: TPG) 
  • TPG is an Australian telecom provider, Soul Patts holds 25.3%.

• Brickworks Limited (ASX: BKW)
  • Brickworks is group of companies in the construction space, Soul Patts owns 43.9%.

• New Hope Corporation Limited (ASX: NHC)
  • New Hope is a diversified energy company, Soul Patts owns 50%.

• Australian Pharmaceutical Industries Ltd (ASX: API)
  • This company is a leader in health and beauty, Soul Patts holds 19.3%.

• Bki Investment Co Ltd (ASX: BKI)
  • BKI is a listed investment company, Soul Patts owns 8.6%.

• Round Oak Minerals (private company)
  • This is a mining and exploration company and is wholly owned (100%) by Soul Patts

• Milton Corporation Limited (ASX: MLT)
  • This is another listed investment company, of which Soul Patts owns 3.3%.

• Apex Healthcare Berhad (KLSE: AHEALTH)
  • Apex is a leading healthcare group based in Asia. Soul Patts owns 30.3%.

• Palla Pharma Ltd (ASX: PAL)
  • A manufacturer of narcotic raw material, of which Soul Patts owns 19.9%.

• Ampcontrol Pty Limited (private company)
  • An international electrical supplier, Soul Patts owns 43.3%.

• Clover Corporation Limited (ASX: CLV)
  • Clover is a “bioactives” provider in the health space. Soul Patts owns 22.6%.

• Pitt Capital Partners (private company)
  • Pitt is an independent corporate advisory firm, wholly owned (100%) by Soul Patts.

The Soul Pattinson share price

The Soul Pattinson share price is up more than 35% in 2020. The market has largely become unpredictable this year due to the impact of the COVID pandemic, however, the Soul Patts share price is somewhat hedged given the company’s broad portfolio. Additionally, three of Soul Pattinson’s holdings are private and largely unaffected by the stock market.

Comparing Premier Investments and Soul Pattinson

In terms of their structure as holding companies, the main difference between Premier and Soul Patts is the type of shares they hold. Additionally, their investment strategies vary.

All of Premiers holdings are completely private – that is, they don’t trade on a public exchange. The company also has a strong retail focus with The Just Group and Breville.

The majority of Soul Pattinson’s holdings are in publicly listed companies from a broad range of sectors. Soul Pattinson has a similar structure to Berkshire Hathaway, Warren Buffett’s company, which also has broad holdings, many in publicly listed companies. 

Foolish takeaway

A holding company is an interesting concept and one which both Premier and Soul Patts have embraced. Each style of holding has a certain agenda. Therefore, it’s worth doing some deeper research to see what might align with your investment strategy. 

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glennleese owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Clover Limited. The Motley Fool Australia owns shares of and has recommended Brickworks, Premier Investments Limited, and Washington H. Soul Pattinson and Company 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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