The Ansell Limited (ASX: ANN) share price will be in focus on Tuesday after the safety products company released its full year results for FY 2020.

How did Ansell perform in FY 2020?

For the 12 months ended 30 June 2020, Ansell posted a 7.7% increase in sales to US$1,613.7 million.

This was driven largely by the performance of its Healthcare business, which reported a 12.5% increase in revenue to US$894.6 million thanks to COVID-19 related demand for exam/single use products. This was supported by a modest 2.2% increase in Industrial revenue to US$719.1 million. Strong demand for gloves for cleaning and sanitation drove the segment’s growth.

Ansell’s earnings before interest and tax (EBIT) margin expanded by 135 basis points during FY 2020 thanks to a combination of transformation benefits and net favourable raw material costs.

Combined with its solid sales growth, this led to the company reporting a 23% increase in EBIT to US$141.8 million. It’s worth noting that on a constant currency basis, its EBIT was up 34.7% year on year.

Net profit after tax came in at US$158.7 million, up 5.2% year on year or 19% in constant currency. Whereas earnings per share was up 9.2% or 23.6% in constant currency to 121.8 U.S. cents.

The company’s operating cash flow generation was strong at US$191.7 million, leading to cash conversion of 117.7%. This allowed the Ansell board to increase its full year dividend to 50 U.S. cents, up 7% on FY 2019’s dividend. This comprises an interim dividend of 21.75 U.S. cents per share and a final dividend of 28.25 U.S. cents per share.

An unprecedented year.

Ansell’s Chairman, John Bevan, was pleased with the company’s performance in a tough economic environment.

He commented: “F’20 was an unprecedented year for the global economy but also for the Company. Despite operational challenges caused by COVID-19, Ansell was able to deliver a high quality financial result with strong growth in sales and earnings combined with robust cash flow generation and improved return on capital employed.”

“The Company has delivered EPS at the top end of its guidance range. This demonstrates not only the successful execution of the company’s strategy but also resilience of the business, reflecting the breadth of its portfolio and the balance of products, end users and geographies,” he added.

FY 2021 outlook.

Management is cautiously optimistic on the year ahead.

It explained: “The impact of COVID-19 on the global economy and the markets in which Ansell operates continues to evolve. Although we cannot predict the severity of COVID-19 around the world, we do expect it to remain a challenge through F’21 and possibly into F’22 as well. We believe the Company is well positioned to continue to respond and adapt. We have a well-balanced portfolio with strong brands that served us well in F’20 and are expected to do so in the future.”

Management is forecasting earnings per share in the range of 126 U.S. cents to 138 U.S. cents in FY 2021. This represents 3.5% to 13.3% year on year growth.

It commented: “The Company acknowledges that the COVID-19 situation is constantly evolving and presents significant uncertainty. The EPS range reflects the uncertainties from raw material pricing, foreign exchange, the ability to increase Exam/Single Use prices as needed and finally our ability to increase supply of critically needed products.”

More reading

• 5 things to watch on the ASX 200 on Tuesday
• 2 quality ASX shares to buy with $2,000
• Why Kogan and these ASX shares just hit new record highs
• The ASX stocks that could enjoy a consensus earnings upgrade this reporting season
• Leading brokers name 3 ASX shares to buy today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ansell 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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I think Carsales.Com Ltd (ASX: CAR) is a recession-proof company. The Carsales share price jumped 2.9% higher to a new all-time high of $21.23 per share in yesterday’s trade.

Some investors are skeptical of Carsales’ $5.2 billion market capitalisation, but I think it could be a strong buy in the current market.

Here’s why I think the Aussie online classifieds business is worth a look, despite its lofty valuation and economic uncertainty.

Why the Carsales share price is climbing higher

A strong earnings result last week helped boost the Carsales share price to a new record high.

Carsales reported a 1% increase in underlying revenue to $423 million with underlying net profit after tax up 6% to $138 million.

That means the Carsales share price has now surged 15.4% higher in August and is quickly shaping up as a top outperformer amongst the S&P/ASX 200 Index (ASX: XJO).

Why I like Carsales even in a recession

The coronavirus pandemic has hit the economy hard and even caused the Carsales share price to drop 45% in the March bear market.

However, I think those investors have missed a huge opportunity for Carsales in a recession. As times get tough, people look to reduce their expenses and may even look to offload their cars.

On the flip side, many investors are wary of buying new cars when cash is tight, so demand for second-hand vehicles may surge and create a strong market for a classifieds operator.

That has been evident as government stimulus measures like JobKeeper and early access to super has seen a surge in second-hand car sales.

That means even if we see further deterioration in the economy, I think the Carsales share price could still be good value.

Foolish takeaway

The Carsales share price has rocketed to a new record high in a strong start to the week.

Long-term investors will be impressed, but those looking to buy in may be a little hesitant. However, I think the current economic conditions could be a blessing in disguise for value-minded investors.

Of course, a diversified portfolio is key here. Carsales could be a good share to buy for some stability and potentially even countercyclical sales in 2021.

More reading

• Perenti share price on watch after posting record revenue result
• 5 things to watch on the ASX 200 on Tuesday
• ASX 200 rises 0.3%, Afterpay up on European plans
• On a day when the ASX 200 is going nowhere, these popular “coronavirus shares” are hitting record highs
• Why reporting season isn’t the bloodbath we expected

Motley Fool contributor Ken Hall 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 Perenti Global Ltd (ASX: PRN) share price is one to watch as the mining services company reported a record revenue result despite weak profits.

What does Perenti do?

Perenti is a global mining services company with subsidiaries covering surface mining, underground mining and mining support services.

That includes exploration drilling, production drilling, blasting, equipment supply and maintenance to name a few.

Formerly known as Ausdrill Limited (ASX: ASL), Perenti rebranded in August 2019.

The group has operations in 13 countries across 4 continents, has more than 8,000 employees and currently has a market capitalisation of $834 million.

Why is the Perenti share price on watch?

The Perenti share price will be worth watching after reporting an 84.9% slump in statutory profit after tax from continuing operations to $23.84 million.

That weak bottom line came despite full-year revenue climbing 3.8% higher to $2.04 billion thanks to significant depreciation expenses. Earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 6.8% to $443.8 million with EBITDA margin up 60 basis points to 21.7%.

Perenti’s underground segment contributed 64% of total revenue with surface (30%) and investment (6%) generating the remainder. 

The coronavirus pandemic did weigh on the full-year result despite an overall strong result from the group.

Gold remained the primary revenue generator by commodity with 68% of earnings, followed by nickel (10%) and zinc (5%).

In terms of geography, Australia (44%), Ghana (19%) and Burkina Faso (14%) were the biggest contributors.

The group continues to focus on transforming its AMS business with a focus on earnings, cash conversion and capital management.

This follows the tragic incident involving AMS employees that shut down operations and saw the Perenti share price fall lower in November 2019.

Group cash conversion climbed to 96% in FY20, up from 89% in FY19 with return on average capital employed of 16.6%.

Net cash flow jumped 31.6% higher to $110.3 million thanks to a 50% surge in operating cash flow.

Total asset backing jumped 8.2% to $1,614.9 million during the year. That came as increased cash reserves and AASB16 accounting impacts offset a drop in plant and equipment.

Dividend

The Perenti share price is one to watch after reporting a 7.0 cents per share (cps) full-year dividend.

That includes a 3.5 cps final dividend, fully-franked, to go with the 3.5 cps interim dividend announced in February.

Based on yesterday’s closing Perenti share price of $1.20, that dividend represents a 5.8% dividend yield.

Outlook

Perenti reported work in hand of $5.4 billion for FY20 with a further $2 billion in negotiation.

$1.7 billion of revenue for this financial year is secured by order book with 82% of that in the Underground segment. That includes 69% gold exposure which is underpinned by soaring gold prices.

The Perenti share price is worth watching after reporting a near-term pipeline of $8.8 billion comprising 57 opportunities.

A geographical expansion across North America and significant internal investment is slated for FY21. 

How has the Perenti share price performed lately?

The Perenti share price remains down 25.3% for the year while the S&P/ASX 200 Index (ASX: XJO) has fallen 8.4%.

More reading

• Why the Carsales share price is a recession-proof buy
• 5 things to watch on the ASX 200 on Tuesday
• ASX 200 rises 0.3%, Afterpay up on European plans
• Why reporting season isn’t the bloodbath we expected
• Meet the group reaping the biggest profit from the gold bull run

Motley Fool contributor Ken Hall 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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If you’re on the lookout for quality fully franked dividends, then you might want to take a look at the two listed below.

Both these ASX dividend shares offer attractive fully franked dividends and appear well-positioned to grow them over the next decade. Here’s why I like them:

Coles Group Ltd (ASX: COL)

I think that Coles is a great dividend share to own right now. I’m a big fan of the company due to its defensive qualities and strong market position. The combination of the two means Coles is well-placed for growth whatever the economy throws at it. This certainly was the case in FY 2020. At a time when most other companies across the country saw their profits decline because of the pandemic, Coles delivered strong growth. It reported a 6.9% increase in sales to $37.4 billion and a 7.1% lift in net profit after tax to $951 million in FY 2020.

Pleasingly, the company has started FY 2021 strongly and looks well placed to deliver another solid profit result in FY 2021. I expect this to lead to Coles rewarding its shareholders with another dividend increase next year. Based on the current Coles share price, I estimate that it offers a fully franked 3.2% dividend yield in FY 2021.

Dicker Data Ltd (ASX: DDR)

Another fully franked ASX dividend share to buy is Dicker Data. It is a leading wholesale distributor of computer hardware and software in the ANZ region. As with Coles, Dicker Data has been able to continue its growth throughout the pandemic. This has been driven by a combination of strong demand, new vendor agreements, and favourable industry tailwinds.

So much so, the Dicker Data board revealed that it intends to increase its dividend by around a third to 35.5 cents per share this year. Based on the current Dicker Data share price, this represents a very generous 4.5% fully franked dividend yield.

More reading

• 3 ASX shares to buy and hold through COVID-19
• ASX 200 Weekly Wrap: Blue chips, earnings drag ASX lower
• Why the Wesfarmers share price could surge in 2021
• 2 ASX 50 shares to buy for your retirement portfolio
• 2 high yield ASX dividend shares to buy today

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

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Last week, infant nutrition company a2 Milk Company Ltd (ASX: A2M) released a record result for the 2020 financial year.

I own a2 Milk shares so made some time to dig through the company’s annual report. This is a great way to get a better understanding of the challenges and opportunities that face the company. But three things in particular caught me by surprise:

1. a2 Milk Company is accumulating a huge pile of cash

The first surprise was the huge pile of cash a2 Milk has built up. In fact, in the 2020 financial year, the company’s cash position jumped by a massive 83% to NZ$854 million.

A2 Milk Company is a very capital light business. It doesn’t directly own farms or factories and doesn’t need to spend much cash to grow production. 

But what will the company do with all that cash? One option is for a2 Milk to pay a dividend to shareholders. However, a2 Milk says that a dividend is not on the cards. Instead the company is focused on using the cash to execute its long-term growth ambitions.

These include potential acquisitions and last week a2 Milk Company announced it is in discussions to acquire a controlling position in New Zealand dairy processing business Mataura Valley Milk. A2 Milk has proposed splurging up to NZ$270m to acquire a 75.1% stake in the business.

2. COVID-19 is creating problems in the US market

The COVID-19 pandemic created a bump in earnings of infant nutrition in the 2020 financial year, but it is making life a lot more difficult for sales in the United States. Higher unemployment rates and economic uncertainty have made US consumers more cautious and this has forced a2 Milk to change strategies. Price discounting and in-store promotion will now be used to drive increased volumes.

Disappointingly, a2 Milk says that it expects revenue in the US to remain flat in FY21 after jumping 91% in FY20.

3. Return on equity dropped

One surprising result of building up such a huge cash pile is that a2 Milk Company’s monster return on equity (ROE) dropped from 44% in 2019 to 40%.

Return on equity (ROE) is a company’s net profit after tax (NPAT) divided by the average shareholder equity over the year. Having a large cash pile increases the equity in the business, so we end up dividing profit by a larger number. Although this is a surprise, the cash pile gives a2 Milk options to reinvest back into the business and compound returns in the years ahead.

More reading

• Leading brokers name 3 ASX shares to buy today
• Could these 2 ASX growth shares that crashed last week be a buy?
• 3 ASX 200 growth shares to buy right now
• 3 ASX share reports I loved this week
• Is the A2 Milk share price still a good buy after strong full year results?

Motley Fool contributor Regan Pearson owns shares of A2 Milk.

You can follow him on Twitter @Regan_Invests.

The Motley Fool Australia owns shares of A2 Milk. 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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On Monday the S&P/ASX 200 Index (ASX: XJO) started the week in a positive fashion and pushed higher. The benchmark index rose 0.3% to 6,129.6 points.

Will the market be able to build on this on Tuesday? Here are five things to watch:

ASX 200 expected to rise again.

It looks set to be another positive day for the ASX 200 after Wall Street started the week very strongly. According to the latest SPI futures, the benchmark index is poised to open the day 41 points or 0.7% higher this morning. In the United States, the Dow Jones jumped 1.35%, the S&P 500 climbed 1%, and the Nasdaq index pushed 0.6% higher. News that the Trump administration is considering fast tracking an experimental coronavirus vaccine developed in the UK lifted markets.

Oil prices rebound.

It could be a decent day for energy producers such as Beach Energy Ltd (ASX: BPT) and Woodside Petroleum Limited (ASX: WPL) after oil prices rebounded. According to Bloomberg, the WTI crude oil price is up 0.15% to US$42.40 a barrel and the Brent crude oil price has jumped 1.5% to US$45.01 a barrel.

Gold price sinks lower.

The improving investor sentiment could weigh on gold miners such as Evolution Mining Ltd (ASX: EVN) and Newcrest Mining Limited (ASX: NCM) on Tuesday. According to CNBC, the spot gold price dropped 0.65% to US$1,934.90 an ounce amid optimism over the potential coronavirus treatment. This led to softening demand for safe haven assets.

Blackmores results.

The Blackmores Limited (ASX: BKL) share price will be on watch on Tuesday when it releases its full year results. The health supplements company is believed to have had a mixed time during the pandemic. Although demand for vitamins has been strong, supply issues appear to have prevented it from fully capitalising on the trend. According to CommSec, the market expects a net profit after tax of $17.77 million.

Ansell full year result.

One company that is expected to have done exceptionally well during the pandemic is safety products company Ansell Limited (ASX: ANN). It hands in its report card today and is expected to post a net profit after tax of US$153 million, according to CommSec. Strong demand for personal protective equipment (PPE) is expected to be the driver of the strong result.

More reading

• ASX 200 rises 0.3%, Afterpay up on European plans
• Why reporting season isn’t the bloodbath we expected
• Meet the group reaping the biggest profit from the gold bull run
• ASX 200 up 0.2%: Afterpay expansion, Fortescue’s monster dividend, NIB disappoints
• 2 ASX 200 bargains to buy this week

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Blackmores Limited. The Motley Fool Australia has recommended Ansell 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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Stock splits have been all the rage for investors in the last month or so.

It all started when Apple Inc. (NASDAQ: AAPL) — the world’s largest public company — announced a 4-for-1 stock split late last month. Not to be outdone, electric car and battery manufacturer Tesla Inc. (NASDAQ: TSLA) announced a 5-for-1 stock split soon after.

The reaction from investors has been one of delirious exhilaration. Since the announcement of Apple’s stock split, Apple shares are up nearly 30%. Again not to be outdone, since Tesla announced its own split on 11 August, its shares are up nearly 50%. Investors are loving these moves, despite there being no real benefit to shareholders from a stock split.

Now we don’t normally see the kinds of lofty share prices that our American friends are used to here on the ASX. A range of large US companies have share prices of more than US$1,000, including Tesla, Alphabet Inc. (NASDAQ: GOOG)(NASDAQ: GOOGL) and Amazon.com Inc. (NASDAQ: AMZN). Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK.A)(NYSE: BRK.B) has famously never split its Class A shares, partially explaining why one single BRK.A share costs around US$311,000 today.

So today, I thought we’d have a look at the 3 ASX shares that I think are most likely to split their shares in the near future.

3 ASX stock split candidates:

1) CSL Limited (ASX: CSL)

CSL is one of the most expensive shares on the ASX right now, which goes well with the company’s title of the most valuable ASX company today. At the time of writing, CSL shares are trading for $295.12 each. Earlier this year, CSL shares reached a new all-time high of $342.75. As such, I think CSL shares are one of the most likely ASX companies to split its shares. It last did so in 2007 with a 3-for-1 split, so the company is no stranger to this process either.

2) Commonwealth Bank of Australia (ASX: CBA)

There was a time (back in 2015) when CSL and CBA were in a two-horse race to hit the $100 a share mark first. Of course, CSL convincingly won that race, whilst Commonwealth Bank is languishing back at $68.95 today. But I think this banking giant could conceivably split its stock in the coming years.

Back in February, CBA was pushing over $90 a share once again. Perhaps coincidentally, the other 3 big ASX banks – National Australia Bank Ltd (ASX: NAB), Westpac Banking Corp (ASX: WBC) and Australia and New Zealand Banking GrpLtd (ASX: ANZ) all have share prices in a similar range today (between $17–18). Maybe CommBank just likes to be different, but a 2-for-1 or 3-for-1 split would put this bank back in the same ballpark as the other 3 majors.

3) Afterpay Ltd (ASX: APT)

Our final possibility is the buy now, pay later pioneer Afterpay. This one is a long shot, but considering what the Afterpay share price has done in 2020 so far, we can’t rule it out in my view. Afterpay shares today hit yet another record high of $83, making it a ’10-bagger’ from the lows we saw in March. If this share price moves into the triple-digits in the coming months (not entirely inconceivable), we could well see a stock split for the company, in my opinion.

More reading

• Here’s why I would buy CSL and this ASX blue chip share
• What are dividend shares and how do you find them?
• ASX 200 rises 0.3%, Afterpay up on European plans
• Is this ASX 200 market too greedy right now?
• On a day when the ASX 200 is going nowhere, these popular “coronavirus shares” are hitting record highs

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Alphabet (A shares), National Australia Bank Limited, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Amazon, Apple, Berkshire Hathaway (B shares), and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL 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), short January 2022 $1940 calls on Amazon, long January 2022 $1920 calls on Amazon, 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 Alphabet (A shares), Amazon, Apple, and Berkshire Hathaway (B shares). 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 Nearmap Ltd (ASX: NEA) share price is up 32% in August, after its shares gained another 12% in today’s trading.

The rally is enough to put Nearmap’s share price up 20% year-to-date. And shareholders who bought at the 25 March low, following the COVID-19 driven ASX rout, would be sitting on a gain of 250% today.

By contrast, the S&P/ASX 200 Index (ASX: XJO) is down 8% for the calendar year and up 35% from its March lows.

What does Nearmap do?

Founded in Perth in 1998 in Perth, the company provides high resolution aerial imagery technology and location data for companies and government customers across Australia, the United States, Canada and New Zealand. Its technology enables clients to conduct virtual site visits rather than having to fly to and over site locations in person.

Nearmap shares listed on the ASX in 2000.

Why is the Nearmap share price up 32% in August?

Nearmap’s 32% share price leap in August comes despite an almost 16% intraday share price drop last Wednesday 19 June after the company released its FY20 results. Shares closed the day down 10%.

Investors hitting the sell button likely were focusing on some of the negatives in the report. Those details included the fact that the cash balance of $33.8 million for the financial year was down from $75.9 million on the previous year. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) also fell, down to $9.1 million from $15.5 million in FY2019.

However, as Nearmap CEO Dr Rob Newman pointed out, the company maintained its forward guidance — reset in February after some of its North American customers were shut down — despite the coronavirus pandemic. “That’s a really good indicator that our business has been strong and resilient through this more challenging period,” he said.

The market may also be re-evaluating the high barriers to entry that any would-be competitors have if they wish to challenge Nearmap in the field of aerial imagery. Dr Newman says:

What other companies still take months to do, we do in days. … And now we have our 3D and AI. There is no other company in the aerial imagery space that would do that complete vertical integration on the scale we do. We do it for 80 million properties across the world.

Investors have clearly had time to digest and rethink their positions since the company released its results. The Nearmap share price is up 28% since last Wednesday’s closing bell.

More reading

• 4 exciting ASX tech shares surging higher today
• These are the 10 most shorted shares on the ASX
• Are these ASX shares future millionaire makers?
• Top brokers name 3 ASX shares to buy next week
• 3 exciting mid cap ASX tech shares to buy for the long term

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 Nearmap Ltd. The Motley Fool Australia has recommended Nearmap Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Luckily for investors, the Australian share market is home to a good number of high quality blue chip shares to choose from. 

Perhaps the hardest part is deciding which ones to buy over others. Two top blue chip shares that I think would be great options for a balanced portfolio are named below.

Here’s why I like them:

CSL Limited (ASX: CSL)

It is almost impossible to recommend blue chip shares and not choose CSL. I continue to believe the global biotherapeutics giant is one of the best companies on the share market and that it would make a fantastic core holding in most portfolios. CSL is made up of the CSL Behring and Seqirus businesses.

CSL Behring is the global leader in plasma therapies, whereas Seqirus is the second biggest in the influenza vaccines industry. I believe both are well-positioned for long term growth thanks to their leading therapies and vaccines, talented management teams, and their lucrative research and development pipelines.

REA Group Limited (ASX: REA)

I think REA Group is another blue chip share for investors to consider buying right now. I was very impressed with the property listings performance during the housing market downturn and the way it still achieved strong profit growth despite the tough trading conditions.

And while the housing market is now under pressure because of the pandemic (especially given the Melbourne lockdowns), I’m optimistic that it will recover swiftly once the crisis passes. This could mean a rebound in property listings from early in 2021. This, combined with price increases, new revenue streams, and its cost cutting, could see REA Group’s growth accelerate over the coming years. Overall, I think this makes REA Group a great blue chip to buy and hold for the long term.

More reading

• Here are the highlights of this ASX reporting season
• ASX 200 Weekly Wrap: Blue chips, earnings drag ASX lower
• 2 of the best ETFs for investing in ASX shares
• Top brokers name 3 ASX shares to buy next week
• 2 ASX 50 shares to buy for your retirement portfolio

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

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