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With many savings accounts offering base interest rates of just 0.05% at present, I think investors are better off looking to the share market for a source of income.
But which ASX dividend shares should you buy? Three top ASX dividend shares I would buy are listed below:
The first ASX dividend share to consider buying is BWP Trust. It is the largest owner of Bunnings Warehouse sites in Australia and has a total of 68 locations leased to the hardware giant. Given the quality of the Bunnings brand and its positive growth outlook, I believe it is a great tenant to have. Furthermore, I feel the risk of rental defaults or stores closures in the near term is very low. In light of this, I feel BWP is in a position to continue growing its income and distribution at a solid rate for the foreseeable future. Based on the latest BWP share price, I estimate that it offers investors a generous 4.7% FY 2021 distribution yield.
Another ASX dividend share to consider buying is this mining giant. I believe Rio Tinto is well-placed to deliver bumper free cash flows thanks to its strong iron ore production and the high prices the steel making ingredient is commanding. Positively, due to the strength of Rio Tinto’s balance sheet, I expect almost all of its free cash flow will be returned to shareholders in the near term. In light of this and based on the current Rio Tinto share price, I estimate that it currently offer a forward fully franked dividend yield of at least 5%.
A final dividend share to buy is Rural Funds. It is a leading agriculture-focused property company with a collection of quality assets leased to some of the biggest names in the industry. Another attraction for me is its long term tenancies. These have been designed to allow the company to consistently increase its distribution at a solid rate each year over the long term. For example, in FY 2020 it plans to pay 10.85 cents per share and in FY 2021 it intends to pay shareholders 11.28 cents per share. Based on the current Rural Funds share price, the latter equates to a generous 5.5% yield.
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of June 30th
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. 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 a new month upon us, I think it could be a good time to take a look at your portfolio and see if it needs some adjustments.
If you’re looking for some growth shares to buy, then the three listed below could be great options in August. Here’s why I like them:
Altium is a printed circuit board (PCB) design software provider which I think would be a great long term option for investors. As PCBs are found inside almost all connected devices, I believe Altium is a great way to gain exposure to the Internet of Things boom. A boom which I expect to accelerate when 5G internet becomes the norm. The explosive speeds of 5G internet should allow more and more everyday devices to connect to the internet, which could lead to an increase in licenses for its award-winning Altium Designer software. The launch of its cloud-based Altium 365 offering also looks likely to be a key driver of growth in the coming years.
I think this global leader in the development of high-quality, human-annotated training data for machine learning and artificial intelligence would also be a great long-term investment option. Appen has been growing at an impressively strong rate in recent years thanks to the growth in machine learning and artificial intelligence and its leadership position in data annotation. As this market is expected to continue growing materially over the next decade, I feel Appen is well-placed to continue its strong form long into the future.
Another growth share to consider buying in August is ResMed. I’m a big fan of this sleep treatment products developer and believe its shares could provide outsized returns for investors over the next decade. This is thanks to the quality of its products and its growing addressable market. In respect to the latter, management estimates that there are 1 billion people impacted by sleep apnoea worldwide. However, the vast majority of these sufferers are currently undiagnosed and could be at risk of life-threatening conditions. I expect the growing education around sleep disorders to lead to more diagnoses and support ResMed’s growth over the coming years.
5 stocks under $5
We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia owns shares of Appen 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 3 fantastic ASX growth shares to buy in August appeared first on Motley Fool Australia.
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Although it can be tempting to construct a portfolio filled to the brim with high growth tech shares, it is worth remembering that having too much exposure to one particular sector can be a very bad thing for a portfolio.
The travel sector is a prime example of why this is the case. Over the past few years the travel sector has been a great place to invest. The likes of Corporate Travel Management Ltd (ASX: CTD) and Webjet Limited (ASX: WEB) had generated mouth-watering returns for investors over the last five years, prior to the pandemic.
But then out of nowhere their business models were broken, through no fault of their own, and their shares are now trading at levels not seen since 2015. That’s five years of gains gone in the blink of an eye.
If you had a portfolio with significant weighting to the travel sector, you would be severely underwater right now compared to those with more balanced portfolios.
Buying companies with limited correlations is one way to diversify.
For example, the drivers of growth for electronic design company Altium Limited (ASX: ALU) and supermarket giant Coles Group Ltd (ASX: COL) are unrelated.
Given their positive outlooks, building a portfolio around these two could be a good start.
Alternatively, you could diversify your portfolio very quickly by investing in exchange traded funds.
The Betashares Nasdaq 100 ETF (ASX: NDQ) is one of my favourite exchange traded funds. It gives investors exposure to 100 of the largest, non-financial businesses on the NASDAQ exchange.
These include countless household names such as Amazon, Apple, Costco, Netflix, Starbucks, and Google parent, Alphabet. Though, given its high weighting to the technology sector, you might want to balance it out with other shares or exchange traded funds.
Another to consider is the iShares Global Healthcare ETF (ASX: IXJ). This exchange traded fund gives investors access to many of the biggest healthcare companies in the world.
This includes CSL Ltd (ASX: CSL), Johnson & Johnson, Novartis, Ramsay Health Care Limited (ASX: RHC), and Sanofi. I think it could generate strong returns for investors over the next decade due to the increasing demand for healthcare services because of ageing populations and increased chronic disease burden.
Overall, I feel if you follow these steps, you’ll maximise your returns over the long run and lower the risk of shock events wiping out your gains.
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of June 30th
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Webjet Ltd. The Motley Fool Australia owns shares of COLESGROUP DEF SET. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS and 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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ASX defence shares have attracted global attention as international tensions increase. The Prime Minister recently said we are entering a world that is more uncertain than it was in February. Accordingly, Australia has announced a range of spending initiatives to better secure our country’s defences over the next decade. Furthermore, we are also seeing additional defence spending activity elsewhere around the world.
One example is the Japanese Memorandum of Understanding that formalises Australia and Japan’s plans to work more closely together on space and defence sectors. A second example is the US$50 million in funding from the United States government to Austal Limited (ASX: ASB). This is to maintain, protect, and expand US domestic production of steel shipbuilding capabilities for capital projects over the next 24 months. Consequently, we are seeing a mini-boom in ASX defence shares. On that note, let’s take a look at three defence shares that have done very well recently.
DroneSheild has made two strong announcements this week, taking its market capitalisation to $40.39 million. The company specialises in drone security technology and is a world leader in the field. Earlier this week, it announced new contracts with both the US defence forces and the European Ministry of Defence. This builds upon an already expansive client list which also includes the European Union Police.
Dronesheild saw its share price rise by 33.33% across this week. However, it is still down by over 40% in year to date trading due to the coronavirus market crash. I think this ASX defence share is likely to see an increased level of sales due to the proven capability of its product.
Orbital has enjoyed a share price increase of only 0.79% this week. However, over the past month the share price has risen by approximately 73%. The company provides propulsion systems for small unmanned aircraft or drones. In the past month, the company had a visit from the Minister for Defence, the Hon Linda Reynolds, reminding the market that Orbital is already an accomplished defence contractor.
In addition, this ASX defence share received a new contract with Northrop Grumman to design and develop a hybrid propulsion system. This will combine an electric motor with the company’s flight-proven engine. The company has a current valuation of $99.31 million.
Xtek is a very interesting company for me. Its share price is level for this week but up by 12.7% over the past month. The company has developed a patented technology called XTclave for curing and consolidating composite materials. Xtek has already installed an industrial sized machine in its Adelaide premises. This is large enough to support ~$40 million in revenues per year, and Xtek is also looking to install another one at its recently acquired US base.
This technology is used to produce a range of products, including; armour, lightweight tactical and human carriage equipment, robotic mechanical systems and unmanned craft. In the past 2 months, this ASX defence share has announced additional contracts with the Finnish Defence Forces and the Australian Defence Forces as well as a grant from the Australian Space Agency.
Australia has a good number of technologically advanced defence contractors. While most of us focus on Austal and Electro Optic Systems Holdings Limited (ASX: EOS) there are also many smaller ASX defence shares that have developed technologies other countries are willing to pay for.
3 “Double Down” Stocks To Ride The Bull Market
Motley Fool resident tech stock expert Dr. Anirban Mahanti has stumbled upon three under-the-radar stock picks he believes could be some of the greatest discoveries of his investing career.
He’s so confident in their future prospects that he has issued “double down” buy alerts on each of these three stocks to members of his Motley Fool Extreme Opportunities stock picking service.
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Daryl Mather owns shares of Austal Limited and Electro Optic Systems Holdings Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Austal Limited, Electro Optic Systems Holdings Limited, and Orbital Limited. The Motley Fool Australia has recommended Electro Optic Systems Holdings 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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While there are many cheap stocks available to buy right now, some investors may be considering other opportunities such as the housing market. Low interest rates that could persist for a prolonged period of time could mean that house prices perform relatively well in the coming years.
However, with the stock market offering greater diversification potential, lower valuations and a solid track record of recovery from bear markets, it could be a better means of improving your financial prospects.
Buying a portfolio of cheap stocks is a relatively straightforward option for almost any investor due to the low cost of sharedealing. Online sharedealing has become increasingly prevalent over the past decade, and features such as regular investing opportunities mean that commission costs can be exceptionally low.
As such, reducing overall risks within a portfolio of shares is much easier than it is within the property sector. Due to the high cost of owning just one property, in terms of the amount required for a deposit, many investors may end up with a small number of houses or apartments in their portfolios. This could lead to disappointing returns should there be a problem, such as unexpected repairs, with even just one of their properties.
By contrast, a portfolio of cheap stocks could offer less risk. Even if one company reports disappointing results, this may be mitigated by strong performances from other holdings within a portfolio. This may lead to higher returns in the long run than a more concentrated portfolio of properties.
The recent market crash means that there may be a larger number of cheap stocks available at the present time than would normally be the case. In some sectors, it is possible to buy high-quality businesses at prices that are significantly below their long-term averages. This suggests that they offer wide margins of safety, and could deliver impressive total returns in the coming years.
Meanwhile, house prices may be less attractive than stocks from a value perspective. House prices have moved higher over the past couple of decades, and may not yet reflect a changing economic outlook. As such, there may be less scope for capital growth than there is within the stock market.
Furthermore, the stock market has an excellent track record of recovery from its bear markets. In fact, it has always produced new record highs after each of its past downturns. This suggests that investors who are able to buy cheap stocks now while the wider market is at a relatively low ebb could profit from a likely recovery.
This opportunity may not necessarily be available within the housing market due to the high valuations that are currently present. Therefore, now may be the right time to buy undervalued shares, rather than seeking to build a property portfolio.
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of June 30th
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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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