Over the last five years the healthcare sector has been one of the best performing areas of the share market.

During this time the S&P/ASX 200 Health Care index has gained more than 125%. This has vastly outperformed the S&P/ASX 200 Index (ASX: XJO) which is only up 7.5% over the same period (excluding dividends).

While I doubt this level of outperformance will continue over the next five years, I believe the healthcare sector is still very well-placed to beat the market.

Especially given the increasing demand for healthcare services due to ageing populations, increased chronic disease burden, and product and technological developments.

In light of this, I think having exposure to the healthcare sector would be a very smart move. Here are two ASX healthcare shares that I would buy:

CSL Limited (ASX: CSL)

The first healthcare share to consider buying is CSL. It is one of the world’s leading biotherapeutics companies and has a portfolio of life-saving therapies and vaccines. In addition to this, CSL invests heavily in research and development. This investment means it has a large number of therapies in its pipeline that have the potential to generates significant sales over the next decade. Combined, I believe CSL is well-positioned to continue growing its earnings at a solid rate throughout the 2020s.

ResMed Inc. (ASX: RMD)

Another healthcare share to consider buying is ResMed. It was a very strong performer over the 2010s and I feel confident it can repeat this throughout the 2020s. This is due to the medical device company’s focus on the sleep treatment market. The proliferation of obstructive sleep apnoea is driving increasing demand for masks and software solutions. Given the quality of its offering and its wide distribution network, I believe it is well-placed to capture this growing demand and deliver strong earnings growth this decade.

More reading

• How I would build a balanced portfolio worth $100,000 with 10 ASX shares
• Should you buy CSL shares before it’s too late?
• Top brokers name 3 ASX 200 shares to buy today
• Where to invest $5,000 into ASX 200 shares immediately
• Is the CSL share price in the buy zone?

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 CSL Ltd. The Motley Fool Australia has recommended ResMed Inc. 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 You could beat the market in the 2020s with these ASX healthcare shares appeared first on Motley Fool Australia.

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When it comes to dividends, many investors will look for shares which offer above-average yields.

While this is completely fine if you’re in need of an immediate source of income (especially in this low interest rate environment), it may not be the best way to invest in dividend shares.

If you have time on your side, then I believe you should be looking at shares that pay dividends and have the potential to grow strongly over the next decade and beyond.

To demonstrate why, I’m going to compare a couple of shares.

Comparing dividend shares.

Let’s start with Commonwealth Bank of Australia (ASX: CBA). I think Australia’s largest bank is a great option right now for investors that are looking for immediate income.

I estimate that its shares offer a forward fully franked yield of approximately 5.2%. However, if you’re not in need of income right now, it may not be the share to buy.

This is because if we were to jump ahead by 10 years, I don’t believe the yield on offer will be vastly superior to what it is today.

Next year I suspect the bank will cut its dividend down to approximately $3.70 per share. If it were to then grow this dividend by an average of 5% per annum for the following 10 years, in 2031 Commonwealth Bank would be paying a $6.03 per share dividend.

This equates to a yield on cost (the yield on the price you paid for the shares) of ~9%. While this is a generous yield, I think we can do better.

How can we do better?

One share that I think could be a future dividend star is ecommerce company Kogan.com Ltd (ASX: KGN).

Next year I expect Kogan to pay a 30 cents per share dividend. This equates to a fully franked 2.3%. While this isn’t anywhere near as good as Commonwealth Bank’s yield, I believe it could overtake it in time.

Given Kogan’s extremely positive outlook thanks to its increasingly popular website, acquisition plans, and the seismic shift to online shopping, I believe it is well-placed to grow both its earnings and dividends at a strong rate over the next decade.

My bull case is for Kogan to grow its earnings and dividends by an average of 20% per annum between 2021 and 2031.

If this proves accurate, then Kogan’s dividend would have grown to 185.7 cents by the end of FY 2031. At that point, if you bought shares today, you would have a yield on cost of approximately 14.1%.

But why stop there? If we then assume that it can continue growing its dividend by 7.5% per annum for the following 10 years, by FY 2041 its dividend would have grown to approximately 383 cents per share. This represents a yield on cost of 29%.

This means that $172,000 invested in Kogan’s shares today, could be generating dividends of $50,000 in 2041.

Foolish Takeaway.

I believe this demonstrates why some of the best dividend shares could actually be the ones with the lowest yields.

This could make it well worth considering a long term investment in Kogan and also tech shares such as Altium Limited (ASX: ALU) and Appen Ltd (ASX: APX).

All three look exceptionally well positioned to deliver long term growth and could increase their dividends materially over the next two decades if all goes to plan.

More reading

• 3 ASX dividend kings to buy and hold forever
• How I would build a balanced portfolio worth $100,000 with 10 ASX shares
• 12 top ASX dividend shares to buy in June 2020
• ASX 200 falls 1.9%, big 4 ASX banks retreat
• ASX shares I’d buy if this decline is a second COVID-19 crash

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 Altium. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia owns shares of Appen Ltd. 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 How to earn $50,000 in dividends each year with ASX shares appeared first on Motley Fool Australia.

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The Australian dollar certainly has been in fine form over the last few weeks. And if the economics team at Westpac Banking Corp (ASX: WBC) are to be believed, there could be more gains ahead for the local currency.

Which could be good news for companies like ARB Corporation Limited (ASX: ARB), Nick Scali Limited (ASX: NCK), and Reject Shop Ltd (ASX: TRS). This is because these companies pay for some of their goods in U.S. dollars, so a stronger local currency gives them more bang for their buck.

Why does Westpac think the Australian dollar can go higher?

Westpac’s chief economist, Bill Evans, notes that the Australian dollar has been on fire recently.

This strong gain has been driven largely by the solid performance of the iron ore price, which is up 25% from a level the bank previously felt was vulnerable to the downside.

However, given the supply disruption in Brazil and increasing demand in China, Westpac has changed its tune and appears confident that iron ore prices can stay higher for longer.

Mr Evans said: “We recognise that these positive influences on the iron ore price are unlikely to fade in the foreseeable future. Global opinion is highly sceptical about Brazil’s ability and commitment to bring the virus under control. China seems determined to make up for the “lost” first quarter, particularly in construction, over the course of the remainder of 2020 – and cram twelve months’ activity into nine.”

In light of this, the bank has lifted its year-end target for the Australian dollar by 4 U.S. cents to 72 U.S. cents.

What about in 2021?

Looking ahead, the chief economist expects a global growth recovery to boost demand for Australia’s key exports and support the Australian dollar.

“We are expecting global growth to lift from minus 3% (some forecasters such as OECD are now forecasting much deeper contractions of up to 6% in 2020) in 2020 to positive 5% in 2021, including a stunning 10% growth momentum in China,” Evans explained.

The bank expects this to take the Australian dollar up to 76 U.S. cents by the end of 2021.

Though, Mr Evans notes that there are downside risks to its forecasts, particular if the RBA were to take rates into negative territory.

The chief economist explained: “Downside outcomes for inflation and growth, exacerbated by an over-valued AUD, may well see the Bank reassessing its caution towards reducing the cash rate below zero.”

I think the Westpac economics team makes some great points and these forecasts could well prove accurate. This could make it a good time to look at shares that will benefit… and maybe start planning your next overseas holiday.

More reading

• ASX 200 falls 1.9%, big 4 ASX banks retreat
• Westpac share price lower on AUSTRAC update
• ASX 200 down 2.2%: Westpac tumbles, TPG reveals special dividend plans
• Why Jumbo, Santos, Westpac, & Zip Co shares are crashing lower
• ASX 200: improved consumer sentiment to near pre COVID-19 levels

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia has recommended ARB 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 Westpac tips the Australian dollar to continue rising appeared first on Motley Fool Australia.

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If you’re looking to make some new additions to your portfolio, then I think the three ASX shares named below would be fantastic options.

I believe they are among the best shares available to investors on the Australian share market and could generate strong returns for investors over the next decade.

Here’s why I would give them five stars:

Domino’s Pizza Enterprises Ltd (ASX: DMP)

Although its performance over the last couple of years has been a bit shaky, I would still give Domino’s Pizza five stars. This is because I believe the pizza chain operator’s plans have positioned it to deliver strong earnings growth over the next decade. Over the next five years the company is aiming to grow its same store sales by 3% to 6% per annum. It is also aiming to deliver annual organic new store additions of 7% to 9% per annum over the same period. If successful, the combination of the two would result in stellar earnings growth if its margins are maintained.

Pushpay Holdings Group Ltd (ASX: PPH)

Another share that I would give five stars is Pushpay. It is a donor management platform provider for the faith sector. Over the last few years Pushpay has grown its market share in the United States at a rapid rate. This has led to the company reporting very strong revenue growth over the period. For example, in FY 2020 Pushpay reported a 33% increase in revenue to US$127.5 million. And thanks to its operating leverage, the company’s earnings grew at an even quicker rate. The good news is that more of the same is expected in FY 2021, with management forecasting its operating earnings to double. But it won’t be stopping there. Its longer term target is to win a 50% share of the medium to large church market. This represents a US$1 billion revenue opportunity.

SEEK Limited (ASX: SEK)

A final share I would give five stars is SEEK. I think the founder-led job listings giant is a high quality business with the potential to grow materially in the future. This is thanks largely to its international operations and particularly its rapidly growing Zhaopin business in China. I expect this business to play a key role in the company achieving its goal of growing its revenue to $5 billion later this decade. This compares to the revenue of $1,537.3 million it posted in FY 2019.

More reading

• Got $20,000? These are the ASX shares I’d buy during COVID-19
• Have $1,000? You should pick one of these 8 ASX shares
• 3 of the best ASX 200 blue chip shares to buy today
• Where to invest $500 into ASX shares right now
• 2 ASX shares I’d buy in a heartbeat

James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of PUSHPAY FPO NZX. The Motley Fool Australia has recommended Domino’s Pizza Enterprises Limited, PUSHPAY FPO NZX, and SEEK 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 3 five-star ASX shares I would buy today appeared first on Motley Fool Australia.

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After a strong start to the shortened week, the S&P/ASX 200 Index (ASX: XJO) gave back its gains and more to end notably lower. The benchmark index fell 2.5% over the period to 5847.8 points.

Not all shares tumbled lower last week. Here’s why these ASX 200 shares defied the market weakness and stormed higher:

The IPH Ltd (ASX: IPH) share price was the best performer on the ASX 200 last week with a gain of 6.6%. This follows the announcement of its acquisition of New Zealand intellectual property firm Baldwins Intellectual Property. IPH will be paying approximately NZ$7.9 million, including deferred consideration of NZ$0.4 million. Baldwins’ FY 2020 EBITDA after normalisation adjustments for partner salaries was approximately NZ$2 million. This news went down well with analysts at Morgans. They upgraded the company’s shares to an add rating with an $8.69 price target

The Mineral Resources Limited (ASX: MIN) share price was some way behind with a gain of 3.8% over the period. This was despite there being no news out of the miner and mining services company. However, given its exposure to iron ore, investors may believe it is well-positioned to profit from the high prices of the steel making ingredient.

The Coca-Cola Amatil Ltd (ASX: CCL) share price was on form last week with a 3.75% gain. Last week the beverage giant held a conference call with analysts at Goldman Sachs. That call revealed that trading conditions remain tough because of the pandemic. And while this led to Goldman retaining its neutral rating, its price target of $9.50 implied decent upside for its shares. This could have been enough for some investors to invest.

The Newcrest Mining Limited (ASX: NCM) share price wasn’t far behind with a gain of 3.6%. This appears to have been driven by the combination of a rise in the gold price and an exploration update. In respect to the latter, the gold miner revealed positive drilling results at Havieron and Red Chris orebodies. Management notes that Havieron returned its best drill result to date and sees real potential to further expand this orebody.

More reading

• Why the Nearmap share price and one other are on my buy list
• Got $20,000? These are the ASX shares I’d buy during COVID-19
• 3 ASX shares I’d buy if the market hits 23 March levels again
• Leading fund manager names 4 ASX stocks set to benefit from a faster re-opening of the Australian economy
• ASX 200 falls 1.9%, big 4 ASX banks retreat

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.

The post These were the best performing shares on the ASX 200 last week appeared first on Motley Fool Australia.

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The S&P/ASX 200 Index (ASX: XJO) was out of form last week and tumbled notably lower. The benchmark index lost 2.5% over the shortened week to end at 5847.8 points.

A number of shares on the index fell more than most. Here’s why these ASX 200 shares were the worst performers over the period:

The Unibail-Rodamco-Westfield (ASX: URW) share price was the worst performer on the index last week with a 14.1% decline. On Friday the shopping centre operator was dumped out of the ASX 100 index along with coal miner Whitehaven Coal Ltd (ASX: WHC). They are being replaced with data centre operator NEXTDC Ltd (ASX: NXT) and gold miner Saracen Mineral Holdings Limited (ASX: SAR) in the index from 22 June.

The Estia Health Ltd (ASX: EHE) share price wasn’t far behind with a decline of 13.7% last week. The majority of this decline occurred on Friday when the aged care operator’s shares crashed notably lower. This followed news that it was being kicked out of the ASX 200 index at the next rebalance on 22 June. Though, given the material decline in its share price over the last 12 months, this news shouldn’t have come as a big surprise to investors. Also falling heavily for the same reason was the Mayne Pharma Group Ltd (ASX: MYX) share price.

The Southern Cross Media Group Ltd (ASX: SXL) share price was out of form last week and fell 13%. This was despite there being no news out of the media company. However, with its shares up a massive 70% in May, there could have been some profit taking happening last week. Southern Cross Media’s shares are still down 86% from their 52-week high.

The Orocobre Limited (ASX: ORE) share price dropped a sizeable 12.9% lower last week. Investors have been selling the lithium miners after the price of the battery making ingredient sank lower again in 2020. Unfortunately, with demand remaining extremely subdued, a rebound in prices looks unlikely to happen in the near term.

More reading

• ASX 200 falls 1.9%, big 4 ASX banks retreat
• ASX 200 down 2.2%: Westpac tumbles, TPG reveals special dividend plans
• Estia Health share price tumbles after being cut from the ASX 200
• S&P quarterly rebalance: A2 Milk added to ASX 50 & NEXTDC in the ASX 100
• ASX 200 Weekly Wrap: ASX bulls crash through 6,000 points

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

The post These were the worst performing shares on the ASX 200 last week appeared first on Motley Fool Australia.

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ASX growth shares can be a little more volatile than the market as a whole. They often experience considerable swings in value created largely by market sentiment. However, I believe it’s important to focus more on business fundamentals rather than short-term share price movements. This is because in the short term, a company’s share price is often not representative of the value of its underlying business. However, I believe this changes over longer-term holding periods.

With this in mind, following are 2 ASX growth shares I currently own but would be happy to double down on next week, based on today’s prices.

The Nearmap Ltd (ASX: NEA) share price

Despite Nearmap being one of the 10 most shorted shares in June, I would still place this ASX growth share on my buy list. The Nearmap share price has soared more than 150% since its March lows. This is despite it recently pulling back along with the rest of the S&P/ASX 200 Index (ASX: XJO) amid concerns over a second wave of coronavirus.  

In fact, the Nearmap share price has been on a crazy rollercoaster over the last two years. However, its business has been growing strongly. Both here in Australia and New Zealand (ANZ), as well as in North America (NA). The company’s NA market includes both the United States and Canada. Not only has Nearmap’s subscription base been growing at an 11% compound annual growth rate, but its average revenue per subscription (ARPS) has also been growing at a compound annual growth rate of 22% in NA and 12% for the more mature ANZ region. Combining these for its most recent half, the group achieved growth in its annualised contract value of 23% over the prior corresponding period. 

In addition, the company has recently launched ‘Nearmap AI’ which should help to drive ARPS growth in the future. It also has a massive total addressable market (TAM). Nearmap’s TAM is estimated to be around $1.6 billion to $2.75 billion. Moreover, these figures only represent markets the company currently operates in. On this note, Nearmap’s CEO Rob Newman has expressed a desire to become a global leader and believes the company’s unique business model has the potential to scale to multiple geographies around the world.

I believe Nearmap’s business model has proven itself in ANZ and shown scalability in the NA market. Additionally it is on track to reach cash flow breakeven by the end of June 2020. Nearmap’s closing cash balance is expected to be between $32 million and $35 million by the financial year’s end. I believe the company will continue to grow in its current markets and push into new ones. In my eyes, this makes today’s Nearmap share price a very compelling buy. 

The Medical Developments International Ltd (ASX: MVP) share price

You’ve probably heard of Medical Developments’ flagship product, the ‘green whistle’. The green whistle is used by medical practitioners, paramedics, life savers and others to administer emergency pain relief. It contains the drug Penthrox and is advocated by many as superior to other pain relief medications. This is thanks to it being fast-acting, non-addictive and able to be self-administered. Uptake of the green whistle has exploded, with the number of countries around the world selling it rapidly increasing over the past decade. This is reflected in the company’s sales which have increased 42% for its UK market and 35% for the European market for H1FY20.

However the Medical Developments business doesn’t start and end with the green whistle. In fact, the green whistle only accounts for a little over half its revenue. A stat which may soon change. The remaining majority of the company’s revenue comes from its medical devices segment, followed by a much smaller veterinary segment. The medical devices segment includes space chambers, masks and other devices and was the company’s fastest growing segment in H1FY20. Total sales in this segment grew 49% compared to the prior corresponding period, with US sales up 49% and UK/Europe sales climbing by 73%.

Medical Developments also noted an increase in R&D investment. I believe this should also bode well for this ASX growth share’s future. While I don’t think today’s prices are necessarily ‘cheap’, thanks to its future growth prospects as it increases sales and enters more markets, I would be happy making a long term investment in Medical Developments next week.

More reading

• These were the best performing shares on the ASX 200 last week
• Got $20,000? These are the ASX shares I’d buy during COVID-19
• 3 ASX shares I’d buy if the market hits 23 March levels again
• Leading fund manager names 4 ASX stocks set to benefit from a faster re-opening of the Australian economy
• ASX 200 falls 1.9%, big 4 ASX banks retreat

Michael Tonon owns shares of Medical Developments International Limited and Nearmap Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Medical Developments International Limited and Nearmap Ltd. The Motley Fool Australia has recommended Medical Developments International Limited and Nearmap Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why the Nearmap share price and one other are on my buy list appeared first on Motley Fool Australia.

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Warren Buffett has an exceptional track record of outperforming the share market over a long time period. Buffett’s investing strategy aims to buy high-quality companies when they offer wide margins of safety, and hold them over the long term.

As such, it could be a useful strategy for investors to adopt as a means of benefitting from the recent market volatility. It may not produce high returns in the short run, but could significantly improve your financial prospects over the coming years.

Warren Buffett’s investing strategy

One of the most notable aspects of Warren Buffett’s investing strategy is its simplicity. He does not use a plethora of complicated formulas in deciding when or where to invest. He simply seeks to buy stocks when they are trading at attractive prices. This method allowed him to buy a range of companies following the last global recession in 2008/09. Many of those holdings produced high returns as the world economy recovered.

With many stocks currently trading on low valuations, using a value investing strategy could improve your long-term returns. It may enable you to take advantage of the cyclicality of the stock market, and generate high returns during its likely recovery.

Economic moats

As well as seeking to buy stocks when they offer wide margins of safety, Warren Buffett also seeks to purchase companies with economic moats. An economic moat is essentially a competitive advantage that one company has over its sector peers. Examples include a lower cost base, a unique product or strong customer loyalty. These help to protect a company’s financial performance during a downturn and deliver relatively high profitability during economic growth.

At the present time, a number of companies with wide economic moats are trading on low valuations. Therefore, investors have a significant amount of choice. Choice in building a diverse portfolio of companies that produce relatively high returns in the long term.

Holding period

Warren Buffett’s investment strategy also seeks to hold stocks for the long term. In fact, his favoured holding period is apparently ‘forever’.

This attitude could be beneficial given the current outlook for the world economy. A global recession seems highly likely this year. And it could take place over a sustained time period depending on monetary policy, fiscal policy and whether there is a second wave of the coronavirus.

As such, investors who are able to take a long-term view of their holdings could be among those who generate the highest returns. They may be able to overcome short-term market volatility to benefit from the eventual recoveries of their holdings.

Although this may not lead to a portfolio size which rivals Warren Buffett’s, it could, nevertheless, boost your returns in the long run.

More reading

• These were the best performing shares on the ASX 200 last week
• These were the worst performing shares on the ASX 200 last week
• Why the Nearmap share price and one other are on my buy list
• 2 defensive ASX shares to protect your portfolio
• 3 ASX dividend kings to buy and hold forever

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

The post Will Warren Buffett’s investing strategy help you get rich in today’s market? appeared first on Motley Fool Australia.

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