Is the Domino’s Pizza Enterprises Ltd. (ASX: DMP) share price a buy?

The Domino’s share price has actually risen by 67% over the past six months in a remarkable performance by the pizza business since the COVID-19 crash.

It has been one of the ASX businesses most prepared for the COVID-19 pandemic because how much investing it has done into its online ordering systems over the previous years.

Domino’s made sure it helped its outlets get COVID-19 ready so that it could continue to serve customers efficiently and safely.

With so many other food locations closed because of COVID-19 restrictions, Domino’s was well placed to step into the gap.

FY20 result

Domino’s produced a solid set of numbers for FY20 because of the COVID-19 impacts.

Network sales increased by 12.8% to $3.27 billion. Online sales rose by 21.4% to $2.36 billion. Domino’s reported that its earnings before interest and tax (EBIT) grew by 3.6% to $228.7 million and free cashflow increased by 90.7% to $161.9 million.

There was a mixed performance across its store network.

In Japan it generated a record performance across multiple metrics, attracting new customers and increasing order frequency. Japanese earnings before interest, tax, depreciation and amortisation (EBITDA) rose 29.9% to ¥7.5 billion. It’s good that the Japan market has improved because it was a troublesome market for a while.

In Europe there were short-term closures in France and support for franchisees, reducing EBITDA by 1.5% to €50.6 million.

In Australia and New Zealand, increased safety and franchisee investments protected the network but reduced EBITDA by 5.8% to $129.4 million.

What about FY21 and beyond?

The Domino’s share price, indeed all share prices, are meant to be forward looking. The pizza business is continuing to expect to grow its revenue base over the coming years. It’s expecting annual same store sales growth of 3% to 6% over the next three to five years. It also expects to add annual organic new store additions of 7% to 9% over the medium-term.

If it achieves those goals then it could see earnings grow by double digits over the next five years. That could also mean that the dividend can grow at a good pace too.

I think that Domino’s looks like it can deliver good business growth over the next few years. The company has invested heavily in technology and it’s now benefiting from that.

The key question is whether Domino’s is worth buying today.

At the current Domino’s share price it’s valued at 31x FY23’s estimated earnings.

Domino’s is expecting a lot of growth over the next decade. Quite a lot of the new growth is expected to come from new stores. Hopefully that doesn’t cause competition with existing Domino’s stores.

The company is priced fairly highly. Will growth be hampered when most other food places are at full capacity again? Domino’s may well see momentum slow down across its global network.

Other food ideas

Domino’s isn’t the only food business on the ASX that could be worth looking at.

Fish business Tassal Group Limited (ASX: TGR) is steadily growing operating earnings and is trading at just 9x FY23’s estimated earnings.

KFC franchisee company Collins Foods Ltd (ASX: CKF) keeps growing its earnings and store network.

Farm owner Vitalharvest Freehold Trust (ASX: VTH), the owner of citrus and berry farms, is trading at cyclical lows.

Domino’s has done very well since COVID-19 impacted the world. But it’s now trading at a high valuation, so I think it’s worth taking a look at other food ASX shares such as the three I just mentioned – I believe all of them are trading at better valuations compared to Domino’s. But Dominos could keep growing nicely if its store rollout is a success.

But I think there are better sectors to look at for returns than food, I’m looking at other share opportunities at the moment.

More reading

• Why Domino’s, Harvey Norman, WiseTech Global, & Zip shares are dropping lower
• 5 things to watch on the ASX 200 on Friday
• Forget term deposits and buy these ASX dividend shares instead
• Leading brokers name 3 ASX shares to sell today
• Why I would buy Wesfarmers (ASX:WES) and this ASX share for a retirement portfolio

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Collins Foods Limited and Domino’s Pizza Enterprises 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.

The post Is the Domino’s (ASX:DMP) share price a buy? appeared first on Motley Fool Australia.

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Is the Domino’s Pizza Enterprises Ltd. (ASX: DMP) share price a buy?

The Domino’s share price has actually risen by 67% over the past six months in a remarkable performance by the pizza business since the COVID-19 crash.

It has been one of the ASX businesses most prepared for the COVID-19 pandemic because how much investing it has done into its online ordering systems over the previous years.

Domino’s made sure it helped its outlets get COVID-19 ready so that it could continue to serve customers efficiently and safely.

With so many other food locations closed because of COVID-19 restrictions, Domino’s was well placed to step into the gap.

FY20 result

Domino’s produced a solid set of numbers for FY20 because of the COVID-19 impacts.

Network sales increased by 12.8% to $3.27 billion. Online sales rose by 21.4% to $2.36 billion. Domino’s reported that its earnings before interest and tax (EBIT) grew by 3.6% to $228.7 million and free cashflow increased by 90.7% to $161.9 million.

There was a mixed performance across its store network.

In Japan it generated a record performance across multiple metrics, attracting new customers and increasing order frequency. Japanese earnings before interest, tax, depreciation and amortisation (EBITDA) rose 29.9% to ¥7.5 billion. It’s good that the Japan market has improved because it was a troublesome market for a while.

In Europe there were short-term closures in France and support for franchisees, reducing EBITDA by 1.5% to €50.6 million.

In Australia and New Zealand, increased safety and franchisee investments protected the network but reduced EBITDA by 5.8% to $129.4 million.

What about FY21 and beyond?

The Domino’s share price, indeed all share prices, are meant to be forward looking. The pizza business is continuing to expect to grow its revenue base over the coming years. It’s expecting annual same store sales growth of 3% to 6% over the next three to five years. It also expects to add annual organic new store additions of 7% to 9% over the medium-term.

If it achieves those goals then it could see earnings grow by double digits over the next five years. That could also mean that the dividend can grow at a good pace too.

I think that Domino’s looks like it can deliver good business growth over the next few years. The company has invested heavily in technology and it’s now benefiting from that.

The key question is whether Domino’s is worth buying today.

At the current Domino’s share price it’s valued at 31x FY23’s estimated earnings.

Domino’s is expecting a lot of growth over the next decade. Quite a lot of the new growth is expected to come from new stores. Hopefully that doesn’t cause competition with existing Domino’s stores.

The company is priced fairly highly. Will growth be hampered when most other food places are at full capacity again? Domino’s may well see momentum slow down across its global network.

Other food ideas

Domino’s isn’t the only food business on the ASX that could be worth looking at.

Fish business Tassal Group Limited (ASX: TGR) is steadily growing operating earnings and is trading at just 9x FY23’s estimated earnings.

KFC franchisee company Collins Foods Ltd (ASX: CKF) keeps growing its earnings and store network.

Farm owner Vitalharvest Freehold Trust (ASX: VTH), the owner of citrus and berry farms, is trading at cyclical lows.

Domino’s has done very well since COVID-19 impacted the world. But it’s now trading at a high valuation, so I think it’s worth taking a look at other food ASX shares such as the three I just mentioned – I believe all of them are trading at better valuations compared to Domino’s. But Dominos could keep growing nicely if its store rollout is a success.

But I think there are better sectors to look at for returns than food, I’m looking at other share opportunities at the moment.

More reading

• Why Domino’s, Harvey Norman, WiseTech Global, & Zip shares are dropping lower
• 5 things to watch on the ASX 200 on Friday
• Forget term deposits and buy these ASX dividend shares instead
• Leading brokers name 3 ASX shares to sell today
• Why I would buy Wesfarmers (ASX:WES) and this ASX share for a retirement portfolio

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Collins Foods Limited and Domino’s Pizza Enterprises 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.

The post Is the Domino’s (ASX:DMP) share price a buy? appeared first on Motley Fool Australia.

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Although the Reserve Bank held firm with the cash rate at its October meeting, the economics team from Westpac Banking Corp (ASX: WBC) doesn’t expect that to be the case for long.

In its latest economics report, the bank’s Chief Economist, Bill Evans, reiterated his belief that a cut to 0.1% is coming.

He said: “We continue to expect the RBA will cut the cash rate; 3-year bond yield target; and TFF rate from 0.25% to 0.10% in November and will also announce additional government bond purchases for maturities between 5 and 10 years at that meeting.”

After which, the bank is predicting that the cash rate will stay on hold at this level until at least June 2022 when its forecast period ends.

In light of this, I think income investors ought to prepare for at least a few more tough years of low rates.

But don’t worry, because there are plenty of quality ASX dividend shares for investors to generate an income from.

One that I think would be great option for investors right now is named below. Here’s why I would buy it:

BWP Trust (ASX: BWP)

I think one of the best ASX dividend share to consider buying is BWP. It is a real estate investment trust (REIT) that invests in and manages commercial assets across Australia. The majority of its assets are leased to home improvement giant, Bunnings Warehouse.

While having such a reliance on a single tenant can often be a risk, I see it as a strength on this occasion. This is because Bunnings is arguably the highest quality retailer in the country, making the risk of rent defaults and stores closures very low. Furthermore, the owner of Bunnings,  Wesfarmers Ltd (ASX: WES), is also a major BWP shareholder. I believe this means Wesfarmers would be unlikely to do anything that would have a negative impact on its investment.

Overall, I believe this puts the company in a strong position to grow its income and distribution at a consistent rate over the next decade. Based on the current BWP share price, I estimate that it offers investors a forward 4.4% yield.

More reading

• ASX 200 up 0.8%: Big four banks higher, CSL rises on vaccine update, Zip rockets
• ASX 200 finishes 1.3% higher after federal budget
• Top brokers name 3 ASX shares to buy today
• ASX 200 up 0.4%: Big four banks push higher, Westpac upgraded, ARB impresses
• Which ASX banking share is the cheapest today?

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. 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.

The post Westpac (ASX:WBC) tips RBA cash rate cut in November appeared first on Motley Fool Australia.

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The idea of buying cheap shares may seem less appealing after the COVID-19-led stock market crash. It highlighted the volatility that can be present in the stock market over short time periods, as well as the paper losses that can be incurred by any investor.

However, over the long run, purchasing undervalued companies could be a profitable move. It is a strategy that has been used to great effect by Warren Buffett. He has used market downturns to his advantage over many years.

As such, avoiding popular assets such as Bitcoin and gold to buy bargain stocks may be a sound move despite heightened short-term risks.

The appeal of cheap shares

Cheap shares can sometimes be priced at low levels because they offer disappointing investment outlooks. For example, they may have high debt levels or a weak strategy that is in need of major change.

However, in some cases undervalued stocks can offer significant recovery potential. Their prices may be suffering because of weak industry conditions that ultimately give way to growth. Similarly, investor sentiment may be weak due to an uncertain economic outlook that gradually evolves into growth over the long run.

Warren Buffett has consistently purchased cheap shares after bear markets. This has enabled him to buy high-quality businesses at low prices. Over time, they are likely to recover to post impressive gains. As such, with many strong businesses currently in a similar situation, now could be the right time to capitalise on their low prices to improve your long-term financial prospects.

Short-term risks

Of course, cheap shares could fall in price in the short run. Risks such as political uncertainty in the US and coronavirus may mean that investor sentiment declines even further in the coming months. This may negatively impact stock markets and put share prices under greater strain.

As such, it is imperative that investors follow Warren Buffett’s lead and adopt a long-term timeframe when buying shares. It may take some time for industry operating conditions and investor confidence to return to 2019 levels. By allowing your portfolio the time it needs to recover, you can fully benefit from a likely resurgence in global economic growth and in the performance of the stock market.

Avoiding gold and Bitcoin

Short-term risks to cheap shares may persuade some investors that now is the right time to buy other assets such as gold and Bitcoin. However, gold’s high price means there may be limited scope for a similar rate of growth to that experienced so far this year. Moreover, improving investor sentiment towards risky assets such as shares may reduce demand for defensive assets such as gold, thereby negatively impacting on its performance.

Meanwhile, Bitcoin’s lack of infrastructure and regulatory risks mean that it may fail to deliver on investor expectations over the long run. It may underperform a portfolio of undervalued shares, while being a riskier means of planning for retirement. Therefore, following Warren Buffett’s advice and buying a portfolio of stocks could be a more prudent means of improving your long-term financial outlook.

More reading

• How anyone can become rich by investing in ASX shares
• How to replace your entire wage with ASX dividend shares
• These were the worst performing shares on the ASX 200 last week
• These were the best performing shares on the ASX 200 last week
• 2 leading ASX 200 shares to buy for growth and income

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.

The post Forget gold and Bitcoin. I’d follow Warren Buffett and buy cheap shares to get rich appeared first on Motley Fool Australia.

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One thing I think most Australians will share, is the dream of becoming wealthy one day.

While you could achieve this by winning the lottery, it is worth remembering that the odds on you actually winning are extremely slim.

In light of this, if you want to become rich, I think you need to take matters into your own hands.

How can you become rich?

I believe that investing in the share market with a long term and patient strategy is arguably the most effective way of building wealth.

This is because if you invest over a long period, you will benefit from the magical power of compound interest. This is what happens when you earn interest on top of interest or returns on top of returns when it comes to shares.

It explains why a $10,000 investment earning a 10% return will be worth $11,000 after one year, but almost $26,000 after 10 years.

Compound interest will then turn that $26,000 into a massive $67,000 after 10 more years and then $175,000 after 10 more.

And that’s just a single investment, let’s not forget. Investing what you can each year would compound into materially more over the same period.

Which shares would be good options for long term investments?

If you’re wanting to make a successful buy and hold investment, then I believe you should be looking at companies with strong business models and long runways for growth.

A prime example of a quality buy and hold option is biotherapeutics giant CSL Limited (ASX: CSL). I believe it is well-placed to be a market beater due to its world class businesses, leading therapies and vaccines, and lucrative research and development pipeline.

Another company to consider is artificial intelligence services company Appen Ltd (ASX: APX). Its team of experts prepare the high quality data that goes into the machine learning models of some of the biggest technology companies in the world.

It has worked with Facebook and Google and also with Apple on its Siri virtual assistant. Due to the growing importance of artificial intelligence and its leadership position in the market, I believe it is well-placed for growth over the 2020s.

All in all, I think these two ASX shares would be a great place to start on your quest to becoming rich through investing.

More reading

• ASX 200 down 0.2%: Big four banks drop, CIMIC jumps, CSL slides lower
• Why I would invest $10,000 into these fantastic ASX shares today
• 3 reasons I would buy CSL (ASX:CSL) shares today
• ASX 200 rises 1% again, Zip (ASX:Z1P) soars 8%
• ASX 200 up 0.8%: Big four banks higher, CSL rises on vaccine update, Zip rockets

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

The post How anyone can become rich by investing in ASX shares appeared first on Motley Fool Australia.

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In this article I’m going to try to show you how to replace your entire wage with ASX dividend shares.

I can totally understand why people want to grow their dividend income because of what’s going on right now. COVID-19 has caused a lot of uncertainty. The great thing about ASX shares is that they are among the best businesses in their industry, perhaps the best in the country. You can usually rely on them for a decent flow of dividends. 

Whilst March 2020 and April 2020 certainly looked rough with the rapid spread of the coronavirus and the restrictions which caused many parts of the country and economy to come to a standstill.

But the following six months has shown why it’s important to be invested in shares. The recovery by the share market has just been extraordinary.

How to get started replacing your wage with ASX dividend shares

Over the long-term I think that shares, such as ASX shares, have proven that they can generate great returns for investors.

Most businesses make a profit each year and many of them pay out a portion of that profit out as a dividend (or distribution). Businesses can retain some of the profit to re-invest back into the business for more growth.

To get started you just have to start putting money to work into the share market. Pick a broker – there are plenty to choose from like banks or low-cost providers – then add some money and start investing.

There are lots of good choices where you can start your investment journey. You don’t have to necessarily start with ASX dividend shares. Picks like Future Generation Investment Company Ltd (ASX: FGX), Future Generation Global Invstmnt Co Ltd (ASX: FGG), Betashares Global Quality Leaders ETF (ASX: QLTY), iShares S&P 500 ETF (ASX: IVV) and Vanguard Msci Index International Shares Etf (ASX: VGS) could be good places to start.

There are lots of calculators to help you work out how much money you may need to add to your portfolio to grow your portfolio to the size you need replace your dividend income. I think Moneysmart’s is one of the best calculators out there.

How big does your portfolio need to be?

The necessary size of your portfolio will depend on how much income you’re trying to replace and the dividend yield of your portfolio.

For example, if you’re trying to replace $40,000 of wage income then a 4% dividend yield would require a $1 million portfolio.

If you had a portfolio with higher yielding ASX dividend shares, say a 6% yield, but you wanted to replace $100,000 of income then you’d need a $1.67 million portfolio.

I’m not going to name every single possible combination, but you get the idea.

For me, I’d be aiming for around a $1 million portfolio with a 5% yield to generate $50,000 of gross income before tax. If I were going to retire, I’d expect not to have to pay certain expenses – like transportation (to work), or mortgage costs because I’d aim to have paid off the mortgage by the time I retire. That would mean I could live off a lower annual income, meaning I’d be okay with a ‘smaller’ portfolio.

Which ASX dividend shares are worth buying?

It’s getting quite hard to find nicely-priced, good quality ASX dividend shares because of how strong the share market has run and how low interest rates are, which has pushed up share prices.

But here are some examples, many of which are in my portfolio:

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) has a grossed-up dividend yield of 3.3%.

Brickworks Limited (ASX: BKW) has a grossed-up dividend yield of 4.2%.

Rural Funds Group (ASX: RFF) has a FY21 distribution yield of 4.9%.

WAM Microcap Limited (ASX: WMI) has a grossed-up dividend yield of 5.2%.

Future Generation Investment Company (FGX) has a grossed-up dividend yield of 6.3%.

Australian United Investment Company Ltd (ASX: AUI) has a grossed-up dividend yield of 6.3%.

More reading

• 2 leading ASX 200 shares to buy for growth and income
• This is where I’d invest $1,000 right now into ASX shares
• Insiders have been buying these ASX shares this week
• Up 22% in a month, is the Soul Patts (ASX:SOL) share price a buy?
• Say goodbye to low interest rates and buy these ASX dividend shares

Motley Fool contributor Tristan Harrison owns shares of FUTURE GEN FPO, Future Generational Global Investment Company Limited, RURALFUNDS STAPLED, WAM MICRO FPO, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks, RURALFUNDS STAPLED, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Vanguard MSCI Index International Shares ETF. 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 was an unforgettable one for the S&P/ASX 200 Index (ASX: XJO). The benchmark index had its strongest week in almost six months and saw it record a 5.4% gain to end at 6,102.2 points.

A small number of shares were unable to follow the lead of the ASX 200 last week. Here’s why these were the worst performers on the index over the five days:

Megaport Ltd (ASX: MP1)

The Megaport share price was the worst performer on the ASX 200 last week with a 1.9% decline. This was despite there being no news out of the elastic interconnection services provider. However, a week earlier Commonwealth Bank of Australia (ASX: CBA) revealed that it had been selling shares. The banking giant appears to have been locking in gains after Megaport’s year to date gain of over 50%.

Nanosonics Ltd (ASX: NAN)

The Nanosonics share price was out of form and dropped 0.9% lower over the five days. Last week analysts at Goldman Sachs reiterated their neutral rating and $5.50 price target on the infection prevention company’s shares. This compares to the latest Nanosonics share price of $5.62.

Transurban Group (ASX: TCL) 

The Transurban share price underperformed the market last week with a 0.9% decline. This follows the release of its annual general meeting update which revealed that its quarterly traffic volumes were still down notably. However, there have been big improvements in certain markets. Transurban also advised that it has commenced a process for the potential introduction of equity partners into its Greater Washington Area assets. It expects this to release significant capital into the business.

Bravura Solutions Ltd (ASX: BVS)

The Bravura Solutions share price wasn’t far behind with a decline of almost 0.9%. This was despite there being no news out of the financial technology company. However, the Bravura share price has been under a lot of pressure since the release of its full year results in August. Investors appear disappointed by its outlook for FY 2021, which indicated that earnings could be flat because of the pandemic.

More reading

• ASX 200 rises, Cimic (ASX:CIM) share price climbs
• 3 ASX stocks the rally left behind that brokers are urging you to buy today
• Up 22% in a month, is the Soul Patts (ASX:SOL) share price a buy?
• Top brokers name 3 ASX dividend shares to buy today
• ASX 200 down 0.2%: Big four banks drop, CIMIC jumps, CSL slides lower

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 MEGAPORT FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nanosonics Limited. The Motley Fool Australia owns shares of and has recommended Bravura Solutions Ltd. The Motley Fool Australia owns shares of Transurban Group. The Motley Fool Australia has recommended MEGAPORT FPO and Nanosonics Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) was in sparkling form last week and recorded its best weekly gain in almost six months. The benchmark index rose 5.4% over the five days to 6,102.2 points

While the majority of shares on the index pushed higher last week, some recorded particularly strong gains.

Here’s why these were the best performing ASX 200 shares last week:

CIMIC Group Ltd (ASX: CIM)

The CIMIC share price was the best performer on the ASX 200 with a massive 20.4% gain. A good portion of this came on Friday when the engineering company released its third quarter update which revealed an uptick in its performance. In addition to this, the Federal Budget is aiming to ignite the Australian economy with heavy infrastructure investment. This could lead to strong demand for its services in the near term. For the same reason, the Seven Group Holdings Ltd (ASX: SVW) share price stormed 17.9% higher last week.

Virgin Money UK CDI (ASX: VUK)

The Virgin Money UK share price wasn’t far behind with a 20% rise over the five days. This was despite there being no news out of the UK-based bank. However, the banking sector was a solid performer last week, with the big four banks all recording notable gains over the five days. The latter appears to have been driven by optimism over the Federal Budget’s impact on the economy and the sector.

Eagers Automotive Ltd (ASX: APE)

The Eagers Automotive share price was on form last week and stormed 17.5% higher. Once again, this appears to be related to the Federal Budget. Investors may believe that tax cuts will support vehicle sales in the near future. In addition to this, the government will allow businesses with turnover of up to $5 billion a year to immediately write-off all assets up to $150,000. This could support new vehicle sales for business use.

Zip Co Ltd (ASX: Z1P)

The Zip share price was a very strong performer and jumped 16.5% higher over the five days. This appears to have been driven by bargain hunters swooping in after a sharp decline in September. In addition to this, a very strong update from one of its buy now pay later provider peers gave its shares a lift.

More reading

• ASX 200 rises, Cimic (ASX:CIM) share price climbs
• Why the Zip (ASX:Z1P) share price is sinking 6% lower today
• Why Domino’s, Harvey Norman, WiseTech Global, & Zip shares are dropping lower
• ASX 200 down 0.2%: Big four banks drop, CIMIC jumps, CSL slides lower
• Why ARB, CIMIC, Janus Henderson, & Netwealth shares are charging higher

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 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.

The post These were the best performing shares on the ASX 200 last week appeared first on Motley Fool Australia.

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I think there are a number of leading S&P/ASX 200 Index (ASX: XJO) shares that are worth buying for growth and income.

Businesses in the ASX 200 have already been growing for years. I think these companies could be worth buying for their growth credentials as well as the income they currently provide:

Brickworks Limited (ASX: BKW)

Brickworks is one of my favourite ASX 200 shares. The Brickworks share price has done well in recent times. It has gone up 11.7% over the past month and 48% over the past six months.

The construction company may benefit from a number of positives in Australia. The country is almost entirely in control of COVID-19, helping the economy. A number of measures announced by the government in recent months should help first home buyers purchase newly-built properties, driving up construction demand. It is supposedly about to get a little easier for borrowers to get access to money. There is serious talk of another slight interest rate cut by the RBA. All of these measures may help Brickworks in Australia.

The ASX 200 share recently acquired some brick businesses in the USA. That is a long-term growth market for the company because the population on the eastern side of the US is so much larger than Australia’s entire population. The American economy has more work to do to recover from COVID-19, but I believe Brickworks can boost its margins and efficiency there.

I’m also confident about Brickworks’ other assets. Its large shareholding of investment conglomerate Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) continues to do well. Indeed, the Soul Patts share price just reached a 52-week high, it has risen 41% over the past six months.

I really like Brickworks’ 50% stake in an industrial property trust. The other joint venture partner is ASX 200 share Goodman Group (ASX: GMG). Industrial property is in higher demand since the onset of COVID-19. Both Coles Group Limited (ASX: COL) and Amazon want large, high-tech distribution warehouses built on land owned by the trust. After those warehouses are built, it should boost the gross assets of the trust to above $3 billion.

At the current Brickworks share price it offers a grossed-up dividend yield of 4.2%.

Magellan Financial Group Ltd (ASX: MFG)

Magellan is one of the best fund managers in Australia in my opinion. Its main focus is on international shares, though it also has very sizeable funds that invest in global infrastructure and Australian shares.

The ASX 200 share is organically growing its funds under management (FUM) from investment performance and net inflows. In September 2020 it reached $102 billion of FUM.

I like that Magellan is always looking for new ways to diversify profit and serve clients. Magellan recently announced it was going to take a 40% economic stake in Barrenjoey, a new investment bank which will have highly capable people involved.

The fund manager is also working on launching a retirement product which could be attractive considering the long-term growth of the superannuation pool thanks to mandatory contributions and the tax-advantaged status of super.

Magellan also plans to launch a set of lower-costing exchange-traded funds (ETFs) which may be attractive for investors looking for lower fees. Hopefully this attracts a wider group of investors, rather than cannibalising its own FUM.

At the current Magellan share price the ASX 200 share is trading at 20x FY23’s estimated earnings with a trailing grossed-up dividend yield of 4.9%.

Foolish takeaway

These are two of the best ASX 200 shares that can provide a good mix of income and growth in my opinion. However, they have both run hard in recent weeks. So I’d be inclined to wait a little bit before buying shares.

I’m looking at other share opportunities at the moment for my own portfolio.

More reading

• This is where I’d invest $1,000 right now into ASX shares
• Up 22% in a month, is the Soul Patts (ASX:SOL) share price a buy?
• 3 unique ASX shares I’d buy and hold forever
• Why growth investors still have a lot to like about the Magellan (ASX:MFG) share price
• Brokers name 3 ASX shares to buy right now

Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company 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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