The Moneyme Ltd (ASX: MME) share price was a standout performer on Wednesday.

The digital consumer credit company’s shares were up as much as 21% at one stage before ending the day 11% higher at $1.60.

Why did the Moneyme share price zoom higher?

Investors were buying Moneyme shares following the release of its full year results for FY 2020.

For the 12 months ended 30 June 2020, Moneyme delivered a 49.5% increase in revenue to $47.7 million. This was ahead of its prospectus forecast of $45.8 million.

Key drivers of this growth were strong increases in loan originations and its gross loan book.

Moneyme reported a 52.8% increase in loan originations to $178.5 million and a 52.7% lift in its gross loan book to $133.6 million. The former was ahead of its prospectus forecast of $168.2 million, but the latter fell short of its prospectus forecast of $141.9 million. Management blamed the miss on an increase in customers making early repayments.

Nevertheless, this didn’t stop the company’s earnings outperforming expectations.

Pro forma earnings before interest, tax, depreciation and amortisation (EBITDA) came in at $3.2 million and statutory EBITDA was $1.1 million. These were ahead of forecast by 10.5% and 20.8%, respectively.

Finally, statutory net profit after tax more than quadrupled to $1.3 million from $0.3 million in FY 2019.

A significant year.

MoneyMe’s Managing Director and Chief Executive Officer, Clayton Howes, was very pleased with the company’s performance.

He said: “The financial year ended 30 June 2020 was a significant year in the history of MoneyMe. We successfully completed our initial public offering, enabled Freestyle with a virtual Mastercard, launched ListReady and RentReady, entered new verticals, achieved accelerated growth, and exceeded our Prospectus forecasts while also outperforming credit risk expectations.”

“Throughout the year, our team contributed to delivering an outstanding set of results while meeting the operational challenges created by COVID-19 and successfully transitioning to operating as an ASX-listed company,” he added.

Outlook.

Mr Howes appears positive on the company’s prospects in FY 2021 and beyond.

He commented: “The MoneyMe brand has gone from strength to strength. I am truly excited about the future for this business that is well positioned to build upon its record achievements from FY20 throughout and beyond the current COVID-19 environment, and be the favourite credit partner for Generation Now.”

While no guidance was given for FY 2021, management expects to “continue to deliver growth and profit, expand our customer base, leverage our new products and launch more innovation across new verticals.”

One of those new products is its recently launched MoneyMe+ product. It joins the likes of Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P) in the buy now pay later space, but with a focus on larger purchases.

Management intends to provide regular performance updates through the year.

More reading

• MoneyMe share price surges, but is it sustainable?
• ASX stock of the day: Moneyme share price surges 36% as lender enters buy now, pay later space

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 ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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 Objective Corporation Limited (ASX: OCL) share price has been a very strong performer on Wednesday.

In late afternoon trade the content, collaboration, and process management software solutions company’s shares are up 11% to a record high of $12.20.

How did Objective Corp perform in FY 2020?

As you might have guessed from the positive share price reaction, Objective Corp was a strong performer in FY 2020.

For the 12 months ended 30 June 2020, the company reported group revenue growth of 13% to $70 million.

Approximately 75% of this revenue is now classed as recurring, up from 70% a year earlier. Annualised recurring revenue (ARR) now stands at $56.6 million, up 22% from $46.6 million a year earlier.

This was driven by strong ARR growth across all its core subscription software products. This includes the doubling of ECMaaS ARR, a 34% lift in Connect ARR, a 51% increase in Trapeze ARR, a 49% jump in AlphaOne ARR, and an 8% increase in Keystone ARR.

Pleasingly, although its cost base has increased following a series of acquisitions, it didn’t stop the company’s margins from expanding.

This led to Objective Corp delivering a 22% increase in earnings before interest, tax, depreciation and amortisation (EBITDA) to $17.2 million and a 22% lift in net profit after tax to $11 million.

Also growing strongly was its operating cash flow, which lifted 24.8% to $29.2 million. This ultimately led to the company finishing the period with a healthy cash balance of $51 million with no external borrowings.

In light of this result and its strong balance sheet, the Objective Corp board declared a fully franked 7 cents per share dividend.

Management commentary.

Objective Corporation’s CEO, Tony Walls, commented: “In FY2020 we successfully met the challenges we were presented; those that we had expected and those that demanded we change course and address immediately.”

“In this unprecedented environment, our business delivered a strong financial performance with 13% revenue growth, 22% growth in EBITDA and 22% growth in ARR. The results reflect our uncompromised commitment to transitioning our business to subscription-based revenue models and growing our annual recurring revenue base,” he added.

Outlook.

The good news is that the company is expecting more of the same in FY 2021.

Mr Walls said: “In FY2021, we expect a material lift in revenue and profitability. We will extend our market reach with increased global digital marketing capacity and invest further in broadening our offerings to every customer.”

“Further we continue to seek opportunities to introduce new, strategically aligned products through acquisition where these can be acquired at reasonable valuations,” he concluded.

More reading

• Bigtincan joins list of junior ASX tech companies adapting to COVID-19
• 3 top small cap ASX shares to buy now

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 Objective 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.

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The AGL Energy Limited (ASX: AGL) share price hasn’t been having a great time on the markets of late. Over the past month, AGL shares are down more than 10% and are going for $15.03 at the time of writing.

The catalyst for this move? Earlier this month, AGL reported its earnings for the 2020 financial year, and it wasn’t a pretty sight. AGL reported a 22% drop in profits after tax and told investors it expects things to get worse before it gets better in the coming years.

Some investors might be sceptical on AGL shares today — and for good reason. This is a share that has gone absolutely nowhere over the past 5 years. Just have a look at the share price graph below for a visual illustration:

Not a graph you want to see as a shareholder, that’s for sure.

Despite this stick-out-like-a-sore-thumb underperformance, I still think AGL is a perfect share for a retiree today for ASX dividend income. Here’s why.

AGL as a dividend share

In its earnings report, one of the sole pieces of good news for investors was the announcement that dividend payments would continue uninterrupted in 2020. By 25 September, AGL shareholders will have received a 47 cents per share interim dividend and a 51 cents per share final dividend this year, both franked at 80%. That is down from 2019’s 55 and 64 cents per share payouts, respectively, but a lot better than what many other ASX dividend shares have delivered in 2020 so far.

The sum of 98 cents per share in dividends for 2020 gives AGL shares a trailing dividend yield of 6.52% on current prices. That’s a far better yield than most other ASX dividend shares out there right now and runs rings around the kind of yield you could expect from a term deposit or government bond these days.

But the company also (rather unusually) announced its plans for the next few years in terms of dividends. This will be headlined by a ‘special dividend plan‘, which will involve AGL paying special dividends of up to 25% of underlying profits over the 2021 and 2022 financial years. Since AGL already has a 75% payout ratio policy, this will effectively mean the company is paying out 100% of its profits over these 2 years.

Unfortunately, these dividends won’t be coming with any franking credits attached, as AGL is instead focusing on utilising historical tax losses. But it hopes to return to paying a franked dividend by FY2023.

Foolish takeaway

I wouldn’t expect much in the way of capital appreciation along the road, but it looks as though AGL is offering a consistent dividend yield above 6% for years into the future. Because of this generous dividend policy, I think AGL shares are a perfect option for a retiree to consider today.

More reading

• What are dividend shares and how do you find them?
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• Afterpay and Mesoblast were among the most traded shares on the ASX last week
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• 2 ASX dividend shares with yields over 6% today

Motley Fool contributor Sebastian Bowen 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 Japara Healthcare Ltd (ASX: JHC) share price has fallen more than 4% today after the aged care provider revealed a $292 million loss. The loss was a result of a large impairment charge, combined with higher expenses and lower occupancy rates. 

What does Japara Healthcare do?

Japara Healthcare owns, operates, and develops aged care facilities. One of Australia’s largest aged care providers, Japara has more than 4,000 people in its care and more than 5,000 staff caring for them. The company’s aged care portfolio comprises 50 homes across five states and 180 independent living units co-located with five of its aged care homes. 

What did the company report? 

Japara reported statutory revenue of $427.5 million, a 6.9% increase on FY19. This was mainly due to increased development earnings and increased revenue per resident. Average occupancy was 92.2% in FY20, weaker than anticipated due to the impacts of the COVID-19 pandemic. Four of Japara’s 21 metropolitan Melbourne homes have active coronavirus outbreaks affecting residents and staff.

The trend of increasing resident numbers over the first nine months of FY20 was impacted by the pandemic from April onwards. At 30 June 2020 the company reported 4,102 residents, but this had fallen to 3,977 residents by 21 August 2020. 

Japara says it is difficult to quantify the ongoing financial impact of COVID-19 given uncertainties around its future prevalence and the success of measures to control its spread. Indirect impacts include reduced occupancy due to limitations on tours and reduced consumer preference to enter residential aged care. Direct COVID-19 related costs incurred in FY20 were ~$1 million, with spending on infection control measures and protective equipment. 

Japara’s recurring EBITDA fell 24.1% in FY20 to $36.9 million largely due to lower occupancy and cost inflation greater than revenue inflation. A non-cash impairment of $291.9 million was incurred due to an impairment in goodwill. This led to a statutory net loss of $292.1 million for the year, attributed to the impairment, lower occupancy, and higher staff and other costs.

This compares to a profit of $16.4 million in FY19. No final dividend was declared and Japara ended the financial year with net debt of $190.7 million. 

Declines in occupancy have resulted in an oversupply of places, causing challenges in maintaining resident numbers at older style homes. Growth in the potential resident cohort has been offset by declining utilisation rates. This has resulted in net place additions exceeding annual increases in residents in recent years. Revenue and cost growth imbalance and declining occupancy has seen the aged care sector show decreasing EBITDA and margin from operations. 

What is the outlook for Japara Healthcare? 

Japara Health’s guidance remains suspended as cost and revenue implication from COVID-19 remain uncertain. Recently completed developments are expected to contribute to FY21 EBITDA, but interest and depreciation expenses are also expected to increase.

Delivery of developments under construction is expected to add ~250 new places in FY21, but decisions on future developments have been deferred until the impacts of the pandemic and economic outlook is more certain. 

The Japara Healthcare share price slumped 4.2% to 0.46 cents at the time of writing.

More reading

• Objective Corp share price rockets to record high on strong FY 2020 result and positive outlook
• Why I think AGL is a perfect retiree dividend share today
• Lovisa share price falls as fashion retailer reports sharp drop in profits
• What’s sent WiseTech’s share price up 36% so far in August
• This ASX dividend share offers a 9% fully franked yield

Motley Fool contributor Kate O’Brien 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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Lovisa Holdings Ltd (ASX: LOV) shares have fallen more than 3% in today’s trade after the retailer released its financial results for the year ended 30 June 2020 (FY20). The accessories and jewellery retailer saw profits plunge nearly 50% after it was forced to shutter stores due to lockdowns. 

What does Lovisa do?

Lovisa is a fast-fashion accessories and jewellery retailer with stores in multiple jurisdictions worldwide. The company opened 66 new stores in FY20, ending the year with a total of 435 stores. Lovisa operates a vertically integrated business model, developing, designing, sourcing, and merchandising 100% of its Lovidsa branded products. 

What did Lovisa report?

Lovisa reported a 3.2% decline in revenue, which was down to $242.2 million. This was a result of COVID-19 disruptions in the second half of the year. In the first half of the financial year, the retailer had seen strong growth in total sales both from the increased store network and comparable store sales growth.

Lovisa began to see the impacts of COVID-19 in the third quarter, initially in its Asian markets, but this quickly escalated to store closures globally by the end of March. Supply chain disruptions were also experienced during this period, initially due to factory and warehouse closures in China, followed by freight disruption and bottlenecks. These factors combined to result in total sales for the second half being down 32.2% on FY19.

The business was able to begin re-opening in mid-April with the majority of stores now trading. Closures are still impacting stores in Melbourne, California, New York, and New Zealand. Efforts on the digital business have been refocused with improved execution and expanded geographical reach. The digital business saw sales growth of 382% in the fourth quarter compared to the prior corresponding period. Nonetheless, the overall drop in sales flowed through to earnings, with Lovisa reporting a 28.3% decline in earnings before interest, taxes, depreciation and amortisation (EBITDA) for FY20, which fell to $44.7 million. Net profit after tax dropped 47.8% to $19.3 million, from $37 million in FY19. 

Managing director Shane Fallscheer said:

We are pleased with what our team has been able to achieve through the disruptions to our business over the past 6 months, and whilst it has had a temporary impact to sales and profitability we remain confident in our growth objectives and have been able to maintain the balance sheet strength required to deliver on them. This leaves us well placed for the future.

What is the outlook for Lovisa? 

Lovisa says trading for the first 8 weeks of FY21 has seen challenging conditions continue in most markets. Comparable store sales for this period were down 19%, an improvement on the 32.5% decline seen in Q4 FY20.

Eight new stores have been opened since the end of the financial year, with the store network currently at 443 stores. The balance sheet remains strong with a net cash position of above $20 million and undrawn debt facilities. This will enable Lovisa to continue its strategic plans and store roll out. 

At the time of writing, the Lovisa share price is down more than 3% to $7.28 per share.

More reading

• Take a look at last week’s best performing ASX shares
• What’s driving the surge in jewellery retailer Lovisa Holdings’ share price in August?
• How will Victoria’s stage 4 lockdowns impact ASX shares?

Motley Fool contributor Kate O’Brien 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 WiseTech Global Ltd (ASX: WTC) share price has soared more than 36% higher so far in August. Despite sliding 1% in late afternoon trading today, that still puts WiseTech among the top 5 leading share price gainers on the S&P/ASX 200 Index (ASX: XJO) this month.

During this same period, the ASX 200 has climbed a far more subdued 3.1%. (Not that we’re turning our noses up at 3% monthly gains!)

WiseTech wasn’t immune to the wider COVID-19  viral selloff that gripped markets in late February into March. From February 18 through March 19, the logistics software provider’s share price crashed a gutwrenching 64%.

However, from the March low, the WiseTech share price rebounded strongly, and is up 173% at time of writing. That rebound has been enough to put the company well into the green for 2020, with the WiseTech share price up 22% since 2 January.

What does WiseTech do?

WiseTech is a leading global provider of cloud-based software solutions for the international and domestic logistics industries. Its leading product, CargoWise One, provides a comprehensive, end-to-end global logistics solution.

WiseTech Global was founded in 1994 in Sydney, with the intent to lead the international logistics industry in technology innovation. WiseTech shares began trading on the ASX in 2016.

Today, the company operates in 50 offices worldwide. More than 12,000 logistics organisations in 150 countries use WiseTech software.

What’s behind the 36% WiseTech share price leap in August?

The WiseTech share price saw rapid growth from its March low through the end of May. From there it traded in a range roughly between $19 and $22 per share. Right up until last Wednesday, 19 August. Wednesday saw WiseTech’s share price close up 34% for the day, to $27.87 per share. (It’s currently trading for $28.56 per share.)

The huge daily surge, responsible for most of August’s 36% share price gains, came upon the release of WiseTech’s 2020 financial year results. The company reported a 23% increase in revenue and a 17% increase in earnings before interest, taxes, depreciation and amortisation (EBITDA).

The company holds a strong position with its global logistics software solutions business model. While the coronavirus pandemic may have shuttered countless restaurants across the globe and slashed international travel, goods still need to be stored and moved around from place to place.

As WiseTech founder and CEO Richard White noted: “COVID-19 market disruptions have provided a long-term tailwind for growing our market share.”

More reading

• ASX 200 down 1.25%: Big four banks tumble, Cleanaway impresses, Whitehaven disappoints
• Investors to look beyond Worley’s big jump in earnings and dividend
• 5 things to watch on the ASX 200 on Wednesday
• ANZ-Roy Morgan consumer confidence rises as COVID-19 case numbers fall
• ASX 200 rises, Bingo jumps after reporting

Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of WiseTech Global. 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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It’s no secret 2020 so far has been the year of the disappearing dividend. We’ve had a revolving door of companies cancelling, slashing, deferring or suspending their shareholder payouts so far this year.

That far-from-illustrious conga line includes the ASX banks like Westpac Banking Corp (ASX: WBC). Then there’s Ramsay Health Care Limited (ASX: RHC), BHP Group Ltd (ASX: BHP), Sydney Airport Holdings Pty Ltd (ASX: SYD), Qantas Airways Limited (ASX: QAN) and Transurban Group (ASX: TCL). The list goes on.

So where to turn for ASX dividend income in 2020? It’s a vexing conundrum, made worse by the fact there are few opportunities for yield outside the world of dividend shares these days. With interest rates at record lows, the old alternatives of cash or government bonds are out of the question.

Luckily, there is one ASX dividend share that I’m looking at today that I think is a fantastic option.

It’s an ASX dividend share with 9% yield

Enter WAM Research Limited (ASX: WAX). WAM Research is a listed investment company (LIC) run by the LIC powerhouse of Wilson Asset Management (the WAM in WAM Research).

WAM Research has been around in its current form since 2010. Since then, it has returned an average of 14% per annum before fees and taxes. It has managed this performance through an investment mandate which involves buying undervalued growth companies (usually in the mid-cap space) and selling them when a pricing catalyst is realised.

Some of WAM Research’s current holdings include Redbubble Ltd (ASX: RBL), Elders Ltd (ASX: ELD), Breville Group Ltd (ASX: BRG) and Adairs Ltd (ASX: ADH). It uses the proceeds of these sales to fill a ‘profit reserve’, from which its fully franked dividends are funded.

The company’s most recent dividend came in at 4.9 cents per share, which was paid in April and was an increase from 2019’s interim dividend of 4.85 cents per share. If we annualise this payout, we get a dividend yield of 6.81% on the company’s share price (at the time of writing) of $1.44. If we include the value of WAM Research’s full franking, the grossed-up yield rises to 9.73%.

The best part (in my view) about this yield is how sustainable it is. In its latest update for July 2020, WAM Research advised investors that its profit reserve stood at 27.7 cents per share. That’s enough to fund the dividend at its current level for at least another 2½ years by my rough calculations.

Foolish takeaway

For this stupendous and yet sustainable yield, I think WAM research is a great ASX dividend share to invest in today. Especially so if we consider the current prospects for dividend income on the share market. It’s worth noting that WAM Research currently trades at a large premium to its underlying assets (probably as a result of this yield). Even so, it’s hard to turn down a 9%+ yielder today.

More reading

• On a day when the ASX 200 is going nowhere, these popular “coronavirus shares” are hitting record highs
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• 2 ASX dividend shares with yields over 7%
• Meet the latest ASX stock that’s more than doubled its full year COVID-19 earnings

Motley Fool contributor Sebastian Bowen owns shares of Ramsay Health Care Limited and WAM Research Limited. The Motley Fool Australia owns shares of Transurban Group. The Motley Fool Australia has recommended Elders Limited 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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The Polynovo Ltd (ASX: PNV) share price has been among the worst performers on the S&P/ASX 200 Index (ASX: XJO) on Wednesday following the release of its full year results for FY 2020.

In afternoon trade the dermal regeneration solutions-focused medical device company’s shares are down 8.5% to $2.16.

How did PolyNovo perform in FY 2020?

PolyNovo had a very positive 12 months and delivered strong NovoSorb BTM sales growth in FY 2020.

For the 12 months ended 30 June 2020, the company sales revenue grew 104% to $19.1 million.

This was driven by strong growth in all markets, but particularly in the United States. The company’s US business delivered a record quarterly sales result in the March quarter and then followed it up with a 36% increase in sales compared to the prior corresponding period during the June quarter.

Management notes that it is building a solid revenue base in trauma, reconstructive surgery, hand surgery, necrotising fasciitis, and general surgery. Its Burn sales are also strong, with significant account penetration in accredited burn centres in all regions

However, also growing strongly during the year was the company’s operating expenses. They increased 28.4% year on year to $22.6 million.

As a result, the company posted an operating loss of $1.1 million, down from FY 2019’s operating loss of $2.8 million. And on the bottom line, it reported a net loss after tax of $4.2 million. While this compares unfavourably to a net loss of $3.2 million a year earlier, it includes $2.06 million in share-based payments.

In respect to cash flow, PolyNovo reported a net cash outflow from operations of $0.4 million, leaving it with a cash balance of $11.6 million.

Outlook.

Management notes that there has been no material impact on its business from the COVID-19 pandemic. It revealed that its global digital marketing program is proving effective and sales continue to grow.

And while no guidance was given for the year ahead, management revealed that its fourth quarter sales came in at $5.99 million. This means PolyNovo starts FY 2021 with a sales run rate of $24 million, which already implies annual growth of almost 26%.

It also advised that it plans to reinvest its cashflows back into the business. It aims to use the funds to enter new markets, expand its market share, and develop new products.

More reading

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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 POLYNOVO FPO. 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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Looking for the best ASX shares to boost the value of your portfolio? Choosing ASX shares with both long-term growth prospects and reliable high-yield dividends is a foolproof way to build income and set-up your retirement early.

Here are 2 top ASX shares I would buy right now for shareholder value and dividend growth.

Dicker Data Ltd (ASX: DDR)

Dicker Data is an Australian wholesale and distributor of computer hardware, software and related products.  Its vendors include Hewett-Packard, Cisco, Toshiba, Lenovo, Microsoft, ASUS and other major brands.  Dicker Data services 5,000 retailers who in turn service multiple clients ranging from small and medium enterprises to large corporate businesses.

Dicker Data’s half year 2020 group results in July didn’t disappoint.  Total revenue was up 18.1% to $1,005.9 million. Earnings before interest, tax, depreciation and amortisation (EBITDA) grew 27.6% to $47 million. And net profit after tax rose 23.5% to $29.4 million.

Pleasingly for shareholders, the company’s dividend growth was a massive 63.4% increase for FY19 compared to 20.2 cents per share (cps) for FY18.  In total, the company paid out 33 cents to shareholders in the last 12 months.  It plans to further increase its dividend to 35.5 cps this year.

Dicker Data has achieved double-digit revenue and profit growth for the past 5 years to become Australia’s largest commercial distributor and leading market share distributor for most of its tier 1 vendors represented.

To maintain growth and preserve the company’s strong balance sheet, Dicker Data has reduced its reliance on its top 5 vendors from 90% in FY12 to 57% in FY19.

I like Dicker Data because it pays quarterly dividends to shareholders and the business has been maturing consistently for a number of years.  Dicker Data has shown to be resilient in challenging conditions such as COVID-19 and is well-positioned for future growth

At the time of writing, the Dicker Data share price is down 2.97%, trading at $7.51. Still, I think Dicker Data offers investors a worthy buy.

Fortescue Metals Group Limited (ASX: FMG)

As the world’s fourth largest iron ore producer, Fortescue has become a very important trade partner to China and other countries with a strong demand for the steel-making ingredient.

Fortescue’s FY20 results released on Monday highlighted total revenue of $12.82 billion, an increase of 28.6% on FY19.  Underlying EBITDA was also up 38.4% to $8.375 billion, and net profit after tax climbed to $4.735 billion, a strong percentage boost of 48.5%.

The pure-play miner also boasts the industry’s leading cost position on extracting and refining its key product, at C1 costs at US$12.94 per wet metric tonne.  Record shipments were exported of 178.2 million tonnes in the past year.

It’s no wonder the Fortescue share price has exploded over the past 5 years from $1.62 to a whopping $18.64 (at the time of writing).  Of course, a major catalyst for the company’s strong balance sheet is the rising spot price of iron ore which has a knock-on effect with the share price.

The company has a dividend yield of 10.59%, as shareholders have recently been rewarded with $1 for every Fortescue share held.  For FY20, the mining magnet’s total dividend remuneration was $1.76.  For those lucky early investors who bought and kept Fortescue shares back in 2015, they would have a 108% payout on their initial investment in just one year.  That is the power of long-term investing.

I think Fortescue is a great ASX share to add on your portfolio.  The company offers shareholder value with strong growth in both its business and dividends.

More reading

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Motley Fool contributor Aaron Teboneras owns shares of Dicker Data Limited. The Motley Fool Australia owns shares of and has recommended Dicker Data 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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You might have heard of Apple (NASDAQ: AAPL).

It’s kind of a big deal.

Makes computers and phones, apparently.

Sports a lazy US$2 trillion market capitalisation, making it the first US company to reach that mark and, by dint of that achievement, the most highly valued company on the US exchanges.

(If you’re wondering, the Saudi-owned oil company, Aramco, has the highest market cap in the world.)

Those numbers are impressive. But I want to give you another one.

32%.

And a bigger one:

$500 billion.

That’s the extra ‘value’ that’s been created in Apple shares over just — get this — the last 20 or so trading days.

That’s 4 CBAs.

Almost 4 CSLs.

20 Afterpays.

And remember, that’s not Apple’s total value… just the increase in market cap since this time last month.

The increase in value is almost exactly equal to the entire market cap of Berkshire Hathaway — the investment conglomerate that Warren Buffett has spent a lifetime creating (and I own shares, for the record).

And in a nice twist, Apple is Berkshire’s largest public company holding.

But 32%?

In a month?

For a well-known company that was already the largest on the US markets?

It’s hard to find a good, brand new reason for such a jump.

Yes, it released earnings on July 31. So that’s something.

But 32%?

Instead, here’s what I think it happening:

Either Apple shareholders are correcting a past mistake… or making one.

If this was a small, underfollowed company, 32% might make sense.

If it announced it was getting into some previously unknown new (and large!) business line, I could understand it.

But this is Apple.

It’s not exactly an ‘under the radar’ small cap that no-one knows about!

Which brings me back to the ‘mistakes’.

If shares of a company of Apple’s size and profile gain that much in that short a timeframe, one of two things is taking place.

If you’re in the ‘correcting a mistake’ camp, the share price gains are the market belatedly releasing that Apple is a much better business than it had given it credit for, and with a longer, stronger growth path ahead of it.

Realising the error, the market is repricing its expectations for a brighter future.

And that would be sensible.

But equally sensible is the ’making a mistake’ hypothesis. In this case, investors — perhaps due to a lack of decent alternatives in a COVID-impacted world — are just jumping on ‘certainty’ and/or ‘quality’. Where the ‘safe stocks’ used to be banks and oil companies, they’re quickly being supplanted by big, well known, consumer-tech stocks.

And that thesis is fine, as far as it goes, but paying too much, even for the highest quality businesses, can hurt your returns. In the wake of the dot.com boom, for example, Microsoft shares spent the best part of 15 years going nowhere.

Let me illustrate.

Apple now sells on a P/E of 38.

A month ago, it was 29.

A year ago it was less than 20.

But profits haven’t doubled.

So either the shares were cheap, back then, and the market is correcting that mistake…

… or they’re expensive now, and the market is making one.

If shares were up 5, 10 or even 15%, and over a longer timeframe, you could explain it away as the slow ratcheting up of future potential, as a company progressively increases profits.

But — again, and for the last time — 32%?

It is true we’re living in strange, largely unprecedented times.

But investors need to make sure they understand the businesses they own, and what they’re worth.

It’s not just Apple, by the way. Afterpay Ltd (ASX: APT) is up 10-fold in less than 6 months. Kogan.com Ltd (ASX: KGN) (I own shares) is up 5-fold over the same timeframe.

And other businesses have been left for dead.

Knowing the difference between sentiment and value is imperative.

As Warren Buffett’s mentor, Ben Graham, reminds us:

“You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right.”

Whether your shares are up or down by large amounts, it’s vital that you don’t get carried away by exuberance or despair; and don’t let the market tell you what to think!

Fool on!

More reading

• The 1 Warren Buffett quote that tells us how to invest right now
• Apple becomes first company worth US$2 trillion. Here’s what we can learn
• These beaten down ASX energy shares could mirror the tech share price boom
• After the stellar COVID-19 rebound, can ASX share prices keep rising?
• Apple to hit US$3 trillion by 2023, analyst predicts

Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Scott Phillips owns shares of Berkshire Hathaway (B shares) and Kogan.com ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Apple, Berkshire Hathaway (B shares), and Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. and Kogan.com ltd and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), long January 2021 $85 calls on Microsoft, short January 2021 $115 calls on Microsoft, and short September 2020 $200 calls on Berkshire Hathaway (B shares). The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Apple, Berkshire Hathaway (B shares), and Kogan.com 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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