If you’re interested in adding some dividend shares to your portfolio in September, then the two listed below could be great options.

I believe both are well-placed to continue growing their dividends over the coming years despite the tough economic environment. Here’s why I think they are among the best on offer right now:

BWP Trust (ASX: BWP)

BWP is a real estate investment trust (REIT) that invests in and manages commercial assets. These assets are predominantly large format retail properties which are leased to home improvement giant, Bunnings Warehouse. I believe this is a great tenant to have, especially given the strong performance by Bunnings during the pandemic.

While having such a reliance on a single tenant is often a risk, I see it as a strength on this occasion. This is because Bunnings is owned by conglomerate Wesfarmers Ltd (ASX: WES), which also owns a ~23.6% stake in BWP Trust. I believe this means it is very unlikely that you’ll see Bunnings vacating these properties en masse in the future. Overall, I feel this puts BWP in a position to grow its income and distribution at a modest and predictable rate over the next decade. Based on the current BWP share price, I estimate that it offers a forward 4.4% yield.

National Storage REIT (ASX: NSR)

Another option to consider buying is this self storage operator. Due to its strong market position and growth through acquisition strategy, I believe it could prove to be a great long term option. It was thanks partly to this growth through acquisition strategy that National Storage delivered a 9% increase in underlying earnings to $67.7 million in FY 2020 despite the pandemic.

And although management has suggested that its earnings could be flat in FY 2021, I remain confident its growth will resume once the crisis passes. In FY 2021 National Storage expects to post earnings of 7.7 cents to 8.3 cents per share and will then pay out 90% to 100% of this to shareholders. The middle of this range (8 cents earnings per share and a 95% payout ratio) would be a 7.6 cents per share distribution. Based on the current National Storage share price, this represents an attractive 4% yield.

More reading

• Leading brokers name 3 ASX shares to sell today
• Buy these ASX dividend shares if the RBA cuts rates
• Is the Mirvac share price the best real estate buy right now?
• Why I would buy these strong ASX dividend shares next week
• 2 top ASX results you might have missed on Wednesday

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

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The Australian share market was on form again on Thursday and charged notably higher for a second day in a row.

While a good number of shares pushed higher with the market, some gained more than most.

This led to a few shares climbing so much they reached all time highs. Here’s why these two ASX shares are flying high right now:

Carsales.com Ltd (ASX: CAR)

The Carsales share price stormed to a new record high of $21.63 yesterday. Investors have been buying the online auto listings company’s shares since the release of a solid full year result for FY 2020. For the 12 months ended 30 June 2020, Carsales posted adjusted revenue of $423 million. While this was only a small 1% increase on FY 2019, investors were expecting much worse given the pandemic.

Positively, improving margins led to Carsales reporting adjusted EBITDA growth of 6% to $218 million. But perhaps what got investors most excited was management’s commentary on current trading conditions. It notes that there has been a strong turnaround in demand for vehicles across a number of international markets following the easing of lockdowns.

Redbubble Ltd (ASX: RBL)

The Redbubble share price jumped to an all-time high of $4.44 on Thursday. The ecommerce company’s shares have been exceptionally strong performers over the last few months. This has been driven by the shift to online shopping caused by the pandemic. This shift underpinned a very strong second half to FY 2020, which ultimately led to Redbubble delivering a 43% increase in full year revenue to $368 million.

The good news is that its strong form has continued early in FY 2021, with marketplace revenue more than doubling in July. Redbubble has been benefiting from demand for face masks during the pandemic. Also supporting the Redbubble share price was a recent broker note out of Morgans. It upgraded its shares to an add rating and lifted its price target from a lowly 54 cents to $4.33.

More reading

• Why Afterpay, IOOF, Redbubble, & Zip shares are dropping lower
• Why it makes sense to invest in ASX tech shares
• How the rising Aussie dollar could drive the Carsales share price to new all-time highs
• Why Lendlease, Redbubble, SeaLink, & Starpharma shares are pushing higher
• This ASX dividend share offers a 9% fully franked yield

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended carsales.com 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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The S&P/ASX 50 index may not be as well-known as the illustrious ASX 200 index, but it is still a very important large cap index.

It is home to 50 of the largest shares on the Australian share market. These are predominantly household names and companies of bona fide blue chip status.

While not all shares on the index are buys, I think there are a few that could be great additions to a balanced portfolio. Two of my favourites are listed below:

Goodman Group (ASX: GMG)

The first ASX 50 share to consider buying is Goodman Group. It is an integrated commercial and industrial property group that owns, develops, and manages industrial real estate across 17 countries. Among its portfolio of 392 properties, you’ll find warehouses, large scale logistics facilities, and business and office parks. It also has $6.5 billion of work in progress at present, which will bolster its portfolio in the coming years.

But why invest in Goodman Group over other property companies? I think it is a standout pick in the industry due to its exposure to markets experiencing structural tailwinds. These include its warehouses and logistics facilities which have exposure to the ecommerce boom through tenants such as tech behemoth Amazon. In fact, the company recently strengthened its relationship with Amazon. The ecommerce giant signed a 20-year lease for a new distribution centre in Western Sydney owned by its joint venture with Brickworks Limited (ASX: BKW).

Telstra Corporation Ltd (ASX: TLS)

Another ASX 50 share I would buy is Telstra. I think the telco giant would be a great option, especially after its shares recently dropped to a 52-week low. This share price weakness has been driven by concerns over the sustainability of its dividend following its softer than expected guidance for FY 2021 due to the pandemic.

Nobody knows what will happen to its dividend this year, but it does appear as though a cut to 12 cents per share has been priced in. I believe this means the downside risk from the current level is limited and the upside potential is substantial should its dividend be maintained. Beyond the pandemic, I believe its outlook is improving greatly and a return to growth could be on the cards in the coming years. This is thanks to the progress of its T22 strategy, the easing NBN headwind, the arrival of 5G internet, and rational industry competition.

More reading

• 3 top ASX shares I would love to buy this September
• Why a recession shouldn’t matter for the ASX share market
• UBS picks the best and worst ASX stocks from the reporting season
• Should you buy Telstra and these beaten down ASX shares?
• The Telstra share price just hit a 52-week low: Is it time to buy?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Brickworks and Telstra 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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I think that the A2 Milk Company Ltd (ASX: A2M) share price is a strong buy today.

The A2 Milk share price has declined by 11% over the past month. I think A2 Milk is one of the highest-quality S&P/ASX 200 Index (ASX: XJO) shares, so seeing it drop by more than 10% makes it look even better in my opinion.

The recent FY20 result

We get a true insight into the business performance of an ASX share when it reports its results. A2 Milk recently released its FY20 report which showed impressive growth.

Total revenue grew by 32.8% to NZ$1.73 billion. Earnings before interest, tax, depreciation and amortisation (EBITDA) went up by 32.9% to NZ$549.7 million and net profit after tax (NPAT) increased by 34.1% to NZ$385.8 million. Earnings per share (EPS) went up by 33.5% to NZ 52.39 cents.

It was a very strong result and the cash position of the business is enviable in my opinion. Operating cash flow was NZ$427.4 million for the year and it finished with a closing cash balance of NZ$854.2 million.

If you take the cash pile off the valuation, I think the A2 Milk share price looks even more attractive.

It was a very good FY20 result. But there are a few key reasons why I think it’s a strong buy today:

International growth

I believe one of the most important factors for achieving good long-term growth is the ability to grow overseas. Australia and New Zealand are great countries, but the combined population is quite small. Europe, North America and Asia are very large markets. 

A2 Milk is doing a great job of growing in Asia, specifically China, and the US.

The ‘China and other Asia’ segment saw revenue growth of 65.1% to NZ$699.4 million, with EBITDA growth of 66.7% to NZ$224.9 million. It’s not far off being half of the earnings of the overall business. And it will get to that size if it keeps growing strongly like FY20.

It’s doing so well with Chinese consumers. In FY20 its China label infant nutrition grew revenue by more than double to NZ$337.7 million. According to the Nielsen MBS 12 month market value share, its MBS value share was 2% at 30 June 2020, up from 1.7% at 31 December 2020 and 1.3% at 30 June 2019.

It’s this growing market share that makes me particularly excited about A2 Milk in China. As it expands its distribution it is becoming further entrenched in the minds of consumers. In the second half of FY20 it grew its store footprint from 18,300 to 19,100 stores.

The success in China is a big reason why the A2 Milk share price has grown so much over the past few years. China will be an important part of the success over the next few years.

US milk revenue growth is also proving to be exciting too. In FY20 alone US revenue increased by 91.2% to NZ$66.1 million. Over 50% of the sales growth came from existing stores. During FY20, A2 Milk increased its store distribution from 13,100 stores to 20,300 stores at 30 June 2020. This growth was achieved despite COVID-19 related milk purchasing limits.

The US is a long-term growth runway and it’s setting the scene well for the launch of other products there in the future.

Canada will soon start making A2 Milk some money after an exclusive licensing agreement with Agrifoods.

China, the US and Canada alone offer A2 Milk very attractive growth potential.

Investing in manufacturing capability

A2 Milk is planning to put some of its cash to work by buying a 75.1% stake in Mataura Velley Milk, a New Zealand dairy nutrition business which owns a recently-commissioned manufacturing facility. The investment by A2 Milk will be approximately NZ$270 million.

I think it’s a smart move to secure more manufacturing capacity due to the increasing scale of the company. A2 Milk has quality relationships with Synlait Milk Ltd (ASX: SM1) and Fonterra Shareholders’ Fund (ASX: FSF), but it would be smart to diversify its manufacturing further and actually have a controlling stake.

Valuation

The A2 Milk share price is currently valued at 27x FY22’s estimated earnings. When you compare that to the profit growth rate and the growth runway it has, I think it’s very reasonable.

Look at some of the highly popular ASX growth shares:

Altium Limited (ASX: ALU) is trading at 55x FY22’s estimated earnings.

Appen Ltd (ASX: APX) is trading at 35x FY22’s estimated earnings.

I think A2 Milk looks much more reasonable, and if it expands into Europe in the future then it has even more long-term growth potential.

A2 Milk could be the best ASX 200 share to buy for growth in my opinion.

More reading

• Why a recession shouldn’t matter for the ASX share market
• 3 ASX 200 shares to buy for strong returns
• Some ASX winners and losers from a high Aussie dollar
• 3 ASX shares to buy for international growth
• The a2 Milk share price sank 12% lower in August: Should you buy the dip?

Tristan Harrison owns shares of Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia owns shares of A2 Milk and 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.

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Well, it’s official. As of yesterday, Australia is in recession for the first time in almost 3 decades. It’s mind-blowing in itself that every Australian under the age of 30 has never lived through an official recession in itself.

Yes, the global financial crisis of a decade ago was a challenging economic time. But since the Australian economy only endured one quarter of negative gross domestic product (GDP) growth in 2009 (unlike almost every other country), it didn’t technically qualify as a recession. A recession is only official after 2 consecutive quarters of economic growth — at least that’s what the economists tell us.

And yesterday, the Australian Bureau of Statistics told us that for the quarter ending 30 June, GDP plunged by 7%. Seeing as the quarter ending 31 March saw a 0.3% GDP drop, it means we are now officially facing the dreaded R-word.

So how does one invest in a recession? It’s a good question, considering the ASX hasn’t seen a real live one for so long. Here are 3 things I think all ASX investors can do to navigate these strange and challenging economic times.

1) Only invest in companies that will make it through a recession

It seems like a no-brainer, but I think it’s a good idea to have a think about how the companies in your portfolio are going to fare in recessionary conditions over the next year or 2. Right now, the economy is being heavily supported through government programs like JobKeeper and the coronavirus supplement.

But these are scheduled to taper off over the next 6 months. Once that happens, it’s my view that we will see the true extent of the economic damage the pandemic has wrought. As such, I think it would be prudent to avoid companies with highly uncertain futures before this happens. Shares like the ASX banks, Qantas Airways Limited (ASX: QAN) and Myer Holdings Ltd (ASX: MYR) come to mind.

2) Avoid the hype train

One of the more startling trends we have seen over the past 5 or so months has been the tendency for ASX investors to enthusiastically chase the shares that are perceived to be ‘winners’ from this pandemic. Yes, the pandemic has accelerated many behavioural shifts that were already happening across the economy and society. Think cashless payments and food delivery. But there’s a difference between investing for the future and chasing rising share prices for the sake of it.

I love disruptive companies like Afterpay Ltd (ASX: APT) and Sezzle Inc. (ASX: SZL) But looking at how a company like Sezzle has appreciated more than 2,000% since March (in the midst of a recession) gets me worried. Don’t make the mistake of jumping on a bandwagon just so you can try and make some ‘easy money’. It normally doesn’t end well, especially in a recession.

3) Cash is king

Cash may be earning you little interest these days, but I think it’s an investor’s best friend in a recession. I would be extremely surprised if this recession doesn’t lead to another stock market crash before its over, or at least some good old-fashioned market volatility. Therefore, I think keeping a cash position for that rainy day is a great idea right now.

Cash isn’t exciting, but you’d wish you had more if the sharemarket takes a dive, trust me. You don’t have to be silly and sell up everything, but I think a 10–20% cash position would be wise in these strange times.

More reading

• Why the Qantas share price has lifted 22% in the past month
• Myer’s share price is rocketing up. Here’s why.
• How household savings could boost these ASX share prices
• ASX 200 rises 1.8%, Afterpay had a volatile day
• The Future Fund is stockpiling cash. Should ASX investors take the hint?

Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Sezzle Inc. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Sezzle 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.

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The Qantas Airways Limited (ASX: QAN) share price is up 22% over the last month. And this during a month where Victoria remains in lockdown, most states maintain strict border controls, and international travel is all but off the agenda.

As you’d expect, the Qantas share price was savaged by the measures put in place to control COVID-19, alongside the panic selling that gripped the wider market earlier this year.

From 20 February through to its low on 19 March, Qantas’ share price dropped a gut-wrenching 68%. Long-term investors who kept the faith – or lucky punters who bought shares on 19 March – have enjoyed an 85% share price leap since that low.

Still, Qantas’ share price remains depressed, down 45% year-to-date. For comparison the S&P/ASX 200 Index (ASX: XJO) is down 9%.

What does Qantas do?

Qantas was founded in Queensland in 1920, making it the world’s second oldest airline. Today the company is Australia’s largest airline for both regional, domestic and international travel. Qantas launched the low-cost carrier Jetstar in Australia in 2004 in answer to Virgin Australia’s low-cost offerings. Jetstar-branded airlines now operate across Asia Pacific.

The company’s subsidiary businesses include Qantas Freight Enterprises, Qantas Frequent Flyer and Qantas Loyalty. Qantas shares began trading on the ASX in 1999.

Why is the Qantas share price up 22% over the past month?

The high-flying Qantas share price over the past month has nothing to do with a return to business as normal. Rather it has a lot more to do with forward-looking investors eyeing that eventual return to normal, alongside Qantas’ own cost-cutting strategies.

On 25 August, in the company’s latest attempt to slash its budget so it can emerge from hibernation in viable shape, Qantas announced it planned to outsource its ground staff. The plan would eliminate more than 2,400 jobs, which Qantas estimates would save $100 million in operating costs annually. The impacted employees have until 9 October to put together their own bid if they wish to keep their positions.

At the moment, Qantas has already stood down 20,000 of its staff due to the impacts of COVID-19. At some stage, hopefully soon, most of those staff will return to their posts, joined by new colleagues as Australia’s biggest airline returns to the skies.

Australia is a vast and geographically isolated nation, after all. No one is going to drive from Perth to Sydney for business and most rarely for pleasure. And business and tourist travel in and out of Australia will resume once the virus is controlled or eradicated.

The Qantas share price closed up 0.3% today.

More reading

• How to build a recession-beating ASX share portfolio
• Why I think the AMP share price is finally looking good enough to buy
• ASX 200 rises 0.8%, investors bet on SkyCity
• New to investing? 3 top ASX shares to kickstart your portfolio
• Why I would buy and hold Altium and these top ASX 200 shares

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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The AMP Limited (ASX: AMP) share price seems like one of the highest risk stocks to buy on the S&P/ASX 200 Index (Index:^AXJO). But the scandal-plagued company could provide a good payoff for the brave.

I initially refused to touch this ASX stock as it jumped from one crisis to another, but decided last week it was time to after chairman David Murray resigned.

AMP has been a real dog with the stock trading close to $6 in 2016 to around $1.66 today. The bad taste from the Banking Royal Commission that claimed Murray’s predecessor Catherine Brenner had barely left our mouths when the Boe Pahari controversy erupted.

AMP will become the quintessential case study on how NOT to manage a crisis.

Deal breaker

If I have one firm rule when it comes to investing, it’s never to touch stocks with governance or accounting issues. History taught me that I always get burnt by seemingly “cheap” stocks being sold on either of these interconnected blemishes.

I am happy to stomach other business risks, such as technology or market risks, as I can made an educated assessment on such threats. But there’s a thick cloud of uncertainty when it comes to governance that will always blind investors.

As far as I am concerned, you are rolling the dice if you buy such stocks. The same can be said for accounting issues as I see the two as often being interlinked.

When to start looking at ASX dogs again

The only time I become interested again is after a big cleanout, like what just happened at AMP. Real change can only happen under new leadership.

This isn’t reason enough to buy the AMP share price, but it at least means I am not wasting my time working out its fair valuation.

And AMP share price looks cheap given the amount of bad news priced into the stock and considering the strategic value of its brand.

Strategic value

Remember that this was once an attractive takeover target, just ask National Australia Bank Ltd. (ASX: NAB). Things have radically changed since 2003 and AMP is a much easier target now.

This is why it didn’t surprise me that its newest chairperson Debra Hazelton confirmed AMP was approached by several parties.

The question is how much AMP might be worth under a break-up.

How much is a broken up AMP worth?

The analysts at JPMorgan tries to answer this question by considering two probable scenarios, according to the Australian Financial Review.

In the first instance, the broker assumed that AMP’s wealth management business (the biggest prize bidders are after) is sold on the same 16 times post-tax earnings multiple that IOOF Holdings Limited (ASX: IFL) is paying NAB for MLC.

On that basis, AMP’s shares are worth $1.94 a share.

Less optimistic scenario still delivers good returns

In the second scenario, JPMorgan assumed AMP’s wealth division would be valued using MLC’s funds under management margin as a proxy.

Under this assumption, AMP’s valuation will come in at $1.81 a share. This implies a 15% upside to the stock but doesn’t include the 10 cents a share special dividend.

Don’t forget your special dividend

This dividend represents one part of a capital return to shareholders following the sale of AMP Life. Management is also undertaking an up to $200 million on-market share buyback over the next 12 months.

AMP is still a higher risk proposition, but I think the risk-reward has not looked this attractive in the last three years, if not longer.

More reading

• Why the Qantas share price has lifted 22% in the past month
• ASX 200 rises 0.8%, investors bet on SkyCity
• New to investing? 3 top ASX shares to kickstart your portfolio
• Why I would buy and hold Altium and these top ASX 200 shares
• What exactly is the ASX 200 telling us today about 2020?

Motley Fool contributor Brendon Lau owns shares of AMP Limited and National Australia Bank Limited. Connect with me on Twitter @brenlau.

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 S&P/ASX 200 Index (ASX: XJO) went up by 0.81% today to 6,113 points.

Investors bet on SKYCITY Entertainment Group Limited (ASX: SKC)

SkyCity released its FY20 result today for the 12 months ending 30 June 2020.

Casino operators like SkyCity announce both reported numbers and normalised numbers.

SkyCity said that reported revenue rose 36.8% to $1.125 billion. Reported earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 16.9% to $348.3 million. Reported net profit after tax (NPAT) rose by 62.8% to $235.4 million and reported earnings per share (EPS) increased by 65.5% to 35.4 cents.

Normalised revenue (including gaming GST) fell by 24.3% to $779.5 million. Normalised EBITDA declined 37.7% to $200.7 million and normalised NPAT dropped by 59.7% to $66.3 million. The normalised EPS fell by 59% to 10 cents.

The ASX 200 casino operator didn’t declare a final dividend for FY20.

SkyCity said that the normalised EBITDA of $200.7 million and NPAT of $66.3 million was at the top end of its guidance provided at the time of its equity raising in June 2020. Its reported results were up significantly because of the NZICC fire accounting and the gain from the Auckland car park concession sale. However, this was offset by a $150 million impairment of the SkyCity Adelaide casino licence.

Looking ahead to FY21, its New Zealand businesses recovered more quickly than anticipated for the period from 1 June 2020 to 11 August 2020, though the Auckland facility was closed from 12 August to 30 August 2020. Hamilton and Queenstown continued to trade ahead of expectations.

The business said that the EBITDA and cashflow was materially ahead of expectations. SkyCity Adelaide is EBITDA and cashflow positive since re-opening and the NZ online casino business has been EBITDA positive for every month since April 2020.

The Skycity share price rose by 8% and it was the best performer within the ASX 200.  

WiseTech Global Ltd (ASX: WTC) founder share selldown

It was revealed today that WiseTech founder and CEO Mr Richard White as well as co-founder and executive director Ms Maree Isaacs have sold shares.

Mr White said that the shares were sold as part of a trading program which will continue until 31 December 2020, subject to no material, non-public information arising during this period. The trading program has limits on daily trade volumes so it doesn’t impact the market.

WiseTech told investors that Mr White intends to sell down a small portion of his shares to facilitate liquidity of WiseTech’s shares and enable diversification of assets.

After the completion of the trading program Mr White expects to have voting control of more than 45% of issued capital. In the last share sale he sold approximately 0.83% of WiseTech’s total shares. The other sale since listing was in December 2017 when he sold less than 2% of the ASX 200 company’s shares.

Mr White assured investors he remains committed to WiseTech. He intends to remain a substantial, long-term shareholder. Directors and employees of WiseTech still own approximately 59% of the business.

The ASX 200 business included some words from Mr White in the ASX announcement. One section said: “I am excited about WiseTech’s future global growth opportunities and continue to be as committed and driven as ever, on achieving our global growth ambitions. We are gaining momentum in driving revenue growth, with four new global customer signed up in the first seven months of calendar 2020 and a strong pipeline of further global deals.”

The WiseTech share price rose 1.1% today, despite initially being down.

Other notable share price movements

The worst performer in the ASX 200 today was the Spark Infrastructure Group (ASX: SKI) share price which dropped 6%.

One business to make the news today was Bubs Australia Ltd (ASX: BUB). The infant formula business announced its capital raising was being done at a price of $0.80 per share. Its share price dropped almost 5% in reaction.

More reading

• Why the Qantas share price has lifted 22% in the past month
• Why I think the AMP share price is finally looking good enough to buy
• New to investing? 3 top ASX shares to kickstart your portfolio
• Why I would buy and hold Altium and these top ASX 200 shares
• What exactly is the ASX 200 telling us today about 2020?

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 BUBS AUST FPO and WiseTech Global. The Motley Fool Australia has recommended BUBS AUST FPO and Sky City Entertainment Group 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.

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The Clean TeQ Holdings Limited (ASX: CLQ) share price jumped 8.33% to close at 20 cents today. This follows a company announcement that it will start platinum zone drilling in the coming weeks.

What did Clean TeQ announce?

Clean TeQ reported that a new high-grade platinum zone had been outlined. It’s part of an existing 1 million ounce platinum resource at the company’s Sunrise project in NSW. The company said significant historic downhole intersections had yet to be tested with drilling to start in the coming weeks.

Significant downhole intersections from earlier drilling campaigns near the surface include 12 metres at 8 grams per tonne platinum, .55% nickel .08% cobalt and 23 parts per million scandium, along with 13 metres at 7.1 grams per tonne platinum and 6 metres at 15.1 grams per tonne platinum, .95% nickel, .16% cobalt and 170 parts per million scandium.

The company said despite extensive drilling in previous decades, not many holes had been drilled beneath the sunrise laterite. However, significant historic intersections at a greater depth have included 4 metres at 7.4 grams per tonne platinum,  .13% nickel and .01% cobalt along with 1 metre at 6.5 grams per tonne platinum, .15% nickel and .01% cobalt and 1 metre at 4.2 grams per tonne platinum, .15% nickel and .01% cobalt.

Clean TeQ said that given the high grades of platinum near the surface and historic intercepts beneath the laterite, work had started on testing the structural geology of the zone and to establish a platinum resource. The company said the platinum resource would either integrate with the development of the Sunrise nickel-cobalt-scandium mine or be developed as a stand-alone operation.

Clean TeQ co-chair Robert Friedland said: 

As I’ve said for years, despite being an incredibly valuable base metals resource, Sunrise is one of the best walk-up precious metal drill targets on the planet. It is astounding what little work has been done to test geological interpretations under the blanket of this laterite, despite very encouraging results from historic drilling.

About the Clean TeQ share price

Clean TeQ is a minerals development company that also holds patented technology which can be used for water purification and resource extraction. It has been listed on the ASX since 2007.

In August, Clean TeQ announced it had completed construction of a water processing plant for mine waste water at the Fosterville gold mine in Victoria.

Also in August, Clean TeQ provided an update on the electric car market it plans to supply with metals, saying growth in that market had continued. It also said it would release a project execution plan for its Sunrise project at the end of September 2020.

The Clean TeQ share price is up 100% from its 52-week low of 10 cents. However, it is down 10% since the beginning of the year. The Clean TeQ share price is down 42.86% since this time last year

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Dividends… It’s been a rough year. ASX dividend shares have seen one of the biggest decouplings in ASX share market history in 2020 so far. If you told a dividend investor back in 2018 that 2020 would see ASX bank dividends practically dry up, Transurban Group (ASX: TCL)  and Sydney Airport Holdings Pty Ltd (ASX: SYD) slash their payouts and Ramsay Health Care Limited (ASX: RHC) break its 20-year streak of dividend raises, you probably would have been laughed out of the room.

Yet that is the reality all dividend income investors now face in this strange and turbulent year.

So here are 2 ASX dividend shares that I think ASX investors can comfortably turn to instead.

ASX dividend share 1) Rural Funds Group (ASX: RFF)

Rural Funds Group is an agriculturally-focused real estate investment trust (REIT). It owns productive land that is used to grow all manner of crops, from macadamias to wine grapes and beef cattle. Rural Funds rents out this land to various clients and in turn, receives rental income.

These rental agreements are useful to Rural Funds, as most include automatic inflation-linked annual increases. That’s precisely why I like this company an income investment. We all need to eat and a coronavirus pandemic isn’t getting in the way of that fact. Thus, in a year where ASX dividend shares have been slashing their payouts, Rural Funds has been able to grow its distribution by 4%. On current prices, this gives Rural Funds an unfranked trailing yield of 3.77%. Not bad in my view.

2) Coles Group Ltd (ASX: COL)

Coles is another top income share to consider today. Its defensive supermarkets and bottleshop businesses have proved especially useful to investors in 2020 as panic buying earlier in the year helped insulate Coles from rising coronavirus-related costs.

Similarly to Rural Funds, Coles is inherently useful as a dividend share because we all need to buy food and other household essentials regardless of what is happening in the economy. And it’s highly likely that a large chunk of Australians will continue to use Coles to that end. Speaking of dividends, Coles was able to increase its dividend by a hefty 14.6% in its FY2020 earnings report that was released last month. That gives Coles shares a trailing yield of 3.24%, or 4.63% grossed-up with the company’s full franking credits.

Foolish takeaway

I think both Coles and Rural Funds are top ASX shares to consider in 2020 for ASX dividend income. They don’t offer any kind of eye-dropping yields. But then again, many of the company’s that used to offer 5% or 6% dividends are offering nothing today. I think in the search for income in 2020, beggars can’t exactly be choosers!

More reading

• New to investing? 3 top ASX shares to kickstart your portfolio
• Where I would invest my BHP dividends in September
• 2 quality ASX dividend shares for income investors to buy today
• 2 high quality and growing ASX dividend shares
• Top ASX Stock Picks for September 2020

Motley Fool contributor Sebastian Bowen owns shares of Ramsay Health Care Limited. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Transurban Group. The Motley Fool Australia has recommended Ramsay Health Care 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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