The coronavirus situation in Victoria seems to be worsening by the day. With a nightly curfew and even tighter lockdown laws taking effect at midnight tonight, the state appears to be under siege. Some ASX shares are actively playing a part in the fight against the virus and the treatment of patients. As the battle against the pandemic increasingly becomes a war, we take a look at two ASX shares involved in the fight against COVID-19. 

2 ASX shares fighting against coronavirus

Mesoblast Limited (ASX: MSB)

Mesoblast is a regenerative medicine company seeking to provide treatments for inflammatory illnesses. The company has a portfolio of phase 3 product candidates including remestemcel-L, which is being trialed in the treatment of severe acute respiratory distress syndrome (ARDS) due to COVID-19 infection. 

Interim analysis of the phase 3 trial of remestemcel-L in COVID-19 patients is set for early September. The trial’s first 90 patients will complete 30-day follow ups in August. After this, the Data Safety Monitoring Board will assess the interim data and determine whether the trial should proceed or stop early. There are currently no approved treatments for ARDS in COVID-19 patients, so if Mesoblast’s treatment is approved it would be a first. With ARDS the primary cause of death in COVID-19 patients, demand for an effective treatment is high. 

Remestemcel-L was originally developed to treat acute graft versus host disease (GVHD). An application for the use of the treatment in children with the disease is being assessed by the United States FDA (Food and Drug Administration). If approved, Mesoblast plans to launch in the US this year with product inventory in place. 

Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) 

Fisher & Paykel Healthcare manufactures products used in respiratory and acute care. In the respiratory market since 1971, Fisher & Paykel Healthcare’s products are now being used in the treatment of coronavirus patients. The company’s respiratory humidifiers and consumables are directly involved in COVID-19 treatment. Fisher & Paykel has seen an increase in demand globally since the start of the pandemic and has ramped up production accordingly. 

A weaker New Zealand dollar also contributed to Fisher & Paykel’s strong result for the year ended 31 March 2020. Operating revenue increased 18% over the previous year to $1.26 billion. This increase was driven by demand for products to treat COVID-19 patients and strong hospital hardware sales throughout the year. Revenue grew 25% in the hospital group, which includes respiratory and acute care products. Sales of consumables were up 23% over the previous year. This added up to a 37% increase in net profit after tax, with a final dividend of 15.5 cents per share declared. 

Foolish takeaway 

These two ASX shares provide products and treatments used to combat the coronavirus in those afflicted. Until a vaccine is found, these ASX shares should see steady demand. 

More reading

• Here’s how to start investing with $5k
• Why this broker thinks Mesoblast shares are a strong buy
• Mesoblast share price pushes higher ahead of the “most significant period in its history”
• Does the second wave of COVID-19 make these ASX 200 healthcare shares a buy?
• 3 junior ASX healthcare shares with explosive growth potential

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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ASX dividend shares could be the only way to make good income from your money at the moment.

I’m not talking about some blue chip shares like Westpac Banking Corp (ASX: WBC) or Transurban Group (ASX: TCL). Income investors haven’t been able to rely on reliable dividend payments from them in 2020.

I’m talking about ASX dividend shares with reliable business models that continue to increase their income payments to shareholders even through COVID-19.

A business that can increase its dividend during this period is definitely worth considering for an income portfolio:

Dividend share 1: APA Group (ASX: APA)

APA is my preferred infrastructure ASX dividend share. It doesn’t require a certain number of air passengers or cars to generate its earnings.

APA owns a large network of pipelines across Australia, it’s about 15,000 km in size. It actually delivers around half of Australia’s natural gas.

The energy asset giant also owns (or has interests in) gas storage facilities, gas-fired power stations and renewable energy generation (wind and solar).

APA has grown its distribution every year for a decade and a half. It funds that distribution from its annual cashflow, which is regularly growing. As more projects and investments are completed, that cashflow increases and this will fund higher distributions over time.

Based on the FY20 distribution, at the current APA share price, it offers a distribution yield of 4.5%. Not a bad starting yield for an ASX dividend share.

Dividend share 2: Rural Funds Group (ASX: RFF)

Rural Funds is an agricultural real estate investment trust (REIT). It owns a variety of farm types including almonds, macadamias, cattle, cotton and vineyards.

As a farmer there are commodity risks, just like there are with miners. However, as a landlord Rural Funds isn’t exposed to those sorts of risks. It’s the tenant that takes on the operational risks.

The farms are spread across states and climactic conditions, so Rural Funds is well diversified. It recently announced an $81.1 million sugar cane farm acquisition which it plans to progressively turn into macadamia orchards and the rest will be able to be used for cropping.

The ASX dividend share aims to increase its distribution by 4% per annum, which it has been successful at doing since it first listed and started paying a distribution several years ago.

We all need to keep eating food, so Rural Funds’ rental income should keep flowing from its quality tenants like JBS and Olam. That rental income is steadily growing thanks to contracted rental indexation of either a fixed 2.5% increase or it’s linked to CPI inflation, plus market reviews.

Rural Funds has provided guidance of a FY21 distribution of 11.28 cents per share, which equates to a 5.4% yield at the current Rural Funds share price.  

Dividend share 3: WAM Microcap Limited (ASX: WMI)

WAM Microcap could be one of the best ASX dividend shares on the ASX in my opinion. It’s a listed investment company (LIC) run by Wilson Asset Management which invests in small cap ASX shares. Generally, those targets have market caps under $300 million.

ASX small caps have the potential to make the biggest returns for investors because they’re not followed by many investors, so they’re priced lower. Those small businesses also have a lot of growth potential. It’s much easier growing a company’s market cap from $200 million to $400 million than it is to go from $20 billion to $40 billion.

WAM Microcap can turn the investment returns it generates into a big, growing dividend for its shareholders. The WAM Microcap board have an aim of growing the dividend, assuming it makes sense to do so and it has sufficient profit reserves and franking credits.

Since inception in June 2017, the WAM Microcap portfolio has returned 15.9% per annum before fees, expenses and taxes. That’s a very strong performance and allows it to fund a solid dividend.

The ASX dividend share recently announced a bigger ordinary dividend, a special dividend and a capital raising. I am very likely to participate in that capital raising, even if I just do a fairly small purchase.

At the current WAM Microcap share price, using the FY20 annual ordinary dividend of 6 cents per share, it has an ordinary grossed-up dividend yield of 5.9%.

Foolish takeaway

I really like each of these ASX dividend shares. Right now I think WAM Microcap could be the best pick. It has the highest yield and may it generate the strongest total returns over the long-term. But I think both APA and Rural Funds are likely to deliver very reliable cashflow over the next 12 months and beyond. 

More reading

• Buy these ASX dividend shares if the RBA cuts rates
• ASX 200 edges lower, Melbourne enters stage 4 lockdown
• Is the Wesfarmers or Rural Funds share price a buy for dividend income?
• WAM Microcap share price rises on big special dividend
• 3 of the best ASX dividend shares to buy right now

Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED and WAM MICRO FPO. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. The Motley Fool Australia owns shares of APA Group and Transurban Group. 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 Tuesday the S&P/ASX 200 Index (ASX: XJO) was in sensational form and stormed notably higher. The benchmark index jumped 1.9% to 6,037.6 points.

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

ASX 200 to give back some gains.

The ASX 200 index looks set to give back some of its gains on Wednesday. According to the latest SPI futures, the benchmark index is expected to open the day 15 points or 0.25% lower. This is despite there being another positive night of trade on Wall Street. Overnight, the Dow Jones rose 0.6%, the S&P 500 climbed 0.35%, and the Nasdaq index pushed 0.35% higher.

Oil prices push higher.

It looks set to be a positive day for energy producers including Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL). According to Bloomberg, the WTI crude oil price has risen 1.3% to US$41.54 a barrel and the Brent crude oil price has climbed 0.5% to US$44.36 a barrel. Traders were buying oil after inventories declined.

Gold price smashes through US$2,000.

Gold miners including Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) will be on watch today after the gold price surged higher again. According to CNBC, the spot gold price jumped 2.3% to US$2,033.60 an ounce. Gold hit a record high on the belief that major U.S. stimulus is coming.

Wesfarmers rated neutral.

Analysts at Goldman Sachs have been looking at the impact that the lockdowns will have on Wesfarmers Ltd (ASX: WES). The broker has revised its FY 2021 earnings before interest and tax forecasts lower by 3.9% to reflect the lockdowns in Metropolitan Melbourne and current store numbers. This has resulted in Goldman reaffirming its neutral rating and lowering its price target to $42.00. This compares to the current Wesfarmers share price of $46.29.

Qube given buy rating.

Goldman Sachs is far more positive on the Qube Holdings Ltd (ASX: QUB) share price. This morning the broker retained its buy rating and $3.46 price target on the shares of the integrated provider of import and export logistics services. It commented: “While QUB remains substantially exposed to potential weakness in trade and container volumes, we believe it retains sufficient operational flexibility to withstand a material downturn and reiterate our positive view on the stock.”

More reading

• Should you buy ASX gold shares or FAANG stocks in August?
• ASX 200 jumps 2% higher, Afterpay soars
• Looking for good ASX dividend shares? I would buy these right now
• How will Victoria’s stage 4 lockdowns impact ASX shares?
• ASX 200 jumps 2%: Big four banks rebound, Wesfarmers update, Afterpay rockets

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Wesfarmers 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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