It certainly is a difficult time to be an income investor. Not only are interest rates at record lows, but many popular dividend shares are deferring or cancelling their payouts due to the pandemic.

While this is disappointing, I believe the selloff of traditional dividend favourites has created an opportunity for income investors that can afford to be patient.

Two top dividend shares which I think will offer generous dividend yields in FY 2021 and beyond are listed below:

Sydney Airport Holdings Pty Ltd (ASX: SYD)

There’s no doubt that Sydney Airport’s terminals are going to be quiet for the next few months. But domestic tourism will pick up in due course and international tourism will follow thereafter. It may take time before its earnings rebound to the same levels as FY 2019, but it will happen gradually.

I expect Sydney Airport to be in a position to pay a 29 cents per share distribution in FY 2021, before lifting it to a more normal 37 cents per share in FY 2022. This represents forward yields of 5.15% and 6.6%, respectively, over the two years. In light of this and the potential capital returns, I think it could prove to be a top long term option for investors.

Transurban Group (ASX: TCL)

Another option for income investors to consider buying is Transurban. Due to the sharp reduction in traffic volumes on its roads during the pandemic, I suspect that it might decide against paying a final distribution in FY 2020. Or if it does pay one, it is likely to be reduced materially from a year earlier.

But I wouldn’t let that put you off investing. I expect its toll roads to start their recovery in the coming months and for traffic volumes to slowly return to relatively normal levels by mid to late 2021. In light of this, I estimate that its shares offer forward distribution yields of 3.4% and 4.5% for FY 2021 and FY 2022, respectively. Once again, I think this makes it well worth being patient with its shares.

More reading

• In a post-COVID world, could Australia be the next superpower?
• Top ASX Dividend Stock Picks for May 2020
• Is this ASX 200 share market recovery “fool’s gold”? This ASX fundie thinks so
• 3 ASX 200 pandemic winners and 3 losers
• Are there any safe havens in ASX aviation shares?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of 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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The AMCOR PLC/IDR UNRESTR (ASX: AMC) share price is outperforming the market after it upgraded its profit guidance.

Shares in the global packaging giant jumped 0.7% to $13.82 when the S&P/ASX 200 Index (Index:^AXJO) slumped 1.2% at the time of writing.

You will be hard pressed to find another stock that is lifting its full-year forecast and growing earnings in this coronavirus-stricken market.

Profit growth in challenging market

But Amcor is doing just that as management unveiled its quarterly results. Underlying earnings per share (EPS) jumped 13.7% in constant currency terms to 44.7 US cents in the nine months ended March 31.

Underlying earnings before interest and tax (EBIT) lifted 6.9% to US$1.06 billion even as revenue dipped a modest 1.8% to US$9.33 billion over the period.

Earnings guidance upgrade

The good news didn’t stop there. Amcor increased its FY20 for the second consecutive quarter with management now tipping a 11% to 12% increase in EPS from its previous guidance of 7% to 10%.

While Amcor isn’t immune from the global recession due to the COVID-19 lockdown, its business is deemed by governments as an essential service.

This means its 250 plants around the world have largely continued to operate as Amcor services clients in defensive sectors like healthcare, food and beverages.

Further, the group isn’t reporting an increase in operating costs due to disruptions caused by the pandemic.

Impact of COVID-19

Interestingly, management commented that the impact of COVID-19 on its business is unclear. While some parts of its business have slowed, others have benefitted from the crisis.

For instance, Amcor experienced good demand from healthcare globally and most food and beverage end markets were relatively strong in developed countries.

However, the group experienced weakness in emerging markets, including China and India.

Other quality ASX stocks to watch

Amcor’s integration of its recent acquisition of Bemis is also proceeding well. It’s managed to deliver pre-tax cost savings of US$55 million this financial year and expects to achieve US$180 million by end of FY22.

And unlike many other blue-chip ASX companies, including the big banks like Commonwealth Bank of Australia (ASX: CBA), there is no need to worry about dividend cuts from Amcor.

The group declared a quarterly dividend of 11.5 US cents a share (or 17.7 Australian cents) and said it expected to complete its $500 million on market share buyback by the end of this fiscal year.

Amcor isn’t the only defensive growth stock that’s well placed to outperform in this market. I also rate glove maker Ansell Limited (ASX: ANN) and ship builder Austal Limited (ASX: ASB) very highly.

More reading

• 3 ASX healthcare shares to buy now for the long term
• 3 ASX dividend kings to buy and hold forever
• ASX 200 sinks 1.3%: Big four banks drag ASX lower & Altium issues sales warning
• Top ASX Dividend Stock Picks for May 2020
• Reality bites: Broker warns CBA shares to underperform this week

Brendon Lau owns shares of Austal Limited, Ansell Limited and Commonwealth Bank of Australia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Austal Limited. The Motley Fool Australia owns shares of and has recommended Amcor 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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Is the Westpac Banking Corp (ASX: WBC) share price a buy for future dividends at the current price?

It seems pretty clear that Westpac is in for a rough time in 2020 with a hefty AUSTRAC penalty coming and all of the coronavirus pain.

The Westpac board wisely decided to defer the interim dividend decision. We don’t know how much pain there’s going to be for banks yet. It could be really painful, or perhaps there will just be some pain but not too much – which is what the banks have already provisioned. Investors just can’t know at this stage. 

In the FY20 half-year result Westpac announced an impairment charge of $2.24 billion, which was up $1.9 billion to take into account the potential impacts of the coronavirus.

That Westpac interim report was hard to read for shareholders. There’s a reason the Westpac share price has fallen so much. Cash earnings were down 70% to $993 million and statutory profit was down 62% to $1.2 billion.

Is the Westpac share price a buy for income?

Clearly there’s no dividend at the moment with it being deferred. However, what about when we get through this stage of the coronavirus? Will the Westpac share price be worth buying then?

If Westpac were to go back to paying $0.80 per share every six months in the future then Westpac would have a grossed-up dividend yield of 15%. But even if you were to assume some positive assumptions, how long would that take? Two years, three?

Not only don’t we know how long the economy will take to get back to normal, we don’t even know if the bank boards will go back to those same dividend payout ratios. Westpac could decide to only pay out half of earnings or even just a third going forwards.

Historically, lot of retirees probably paid less attention to the Westpac share price and more to the dividend. I wouldn’t buy Westpac expecting big dividends in the future, it could easily change to a North American bank level of dividends permanently.

The Westpac share price is a lot lower, but it’s only a buy if the economy can rebound quickly. There may be a lot more pain to come, I’m not looking to buy today. I think there are better dividend shares out there.

More reading

• Is it time to invest in shares or wait on the sidelines?
• ASX 200 storms 1.2% higher: Cochlear reports 60% sales decline, Webjet jumps 22%
• How Macquarie Group is vying to unseat CBA
• ASX 200 Weekly Wrap: New ASX bull run continues
• 3 top ASX dividend shares to buy right now

Motley Fool contributor Tristan Harrison 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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Buying ASX shares for the long-term can be a smart way to build stable wealth. A diversified portfolio of high-quality companies can be the key to unlocking your retirement dreams. Buying shares is relatively straight-forward, but just how do you choose the shares that will set you up for life? Here’s a couple of my favourite picks below.

2 long-term ASX shares that could set you up for life

Let’s assume you’re a buy and hold investor looking 30 years ahead. That means investing for today won’t help that much, but investing for the next big trends can.

I think Nextdc Ltd (ASX: NXT) could be one ASX share to buy for the future. Nextdc owns and operates a number of data centres around Australia. If we look 30 years into the future, it’s hard to see how data security and storage won’t continue to grow both here and abroad.

That means Nextdc could transform from a growth share to large-cap dividend share in 30 years’ time. As the company matures over time, I think Nextdc could pay some handy dividends by the time you hit retirement age.

I think Kogan.com Ltd (ASX: KGN) could be another ASX share to set you up for life. Kogan has grown from a backyard electronics reseller to a diversified online conglomerate.

Kogan could become Australia’s answer to Amazon, given it already has business operations in credit cards, insurance, mobile phones and travel. With efficient online operations and lower overheads than competitors, Kogan shares could outperform their ASX peers in the decades ahead.

I think Kogan still has a strong growth profile in the years ahead and could become an ASX 50 share within the next decade or so.

Foolish takeaway

Both of these growth shares are on my watchlist at the moment. If you’re investing with a long-term mindset, I think both Nextdc and Kogan are 2 ASX shares that could be a staple in Aussie retirement portfolios in the years to come.

More reading

• Where to invest $10,000 in ASX 200 shares immediately
• Why CSR, Kogan, Premier Investments, & ResMed shares are storming higher
• Kogan share price jumps after doubling its sales in April
• In a post-COVID world, could Australia be the next superpower?
• 5 top ASX shares to buy and hold for a decade

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended 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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The COVID-19 pandemic has changed how consumers and governments look at health and hygiene. As a result, shares in the sector could be poised to blossom in 2020 and beyond.

Here are 3 ASX shares exposed to the healthcare sector you should think of buying now for the long term.

Ansell Limited (ASX: ANN)

Ansell is a global leader in developing, manufacturing and distributing health and safety protection solutions. The company could be well poised to benefit in the post-COVID world as the population becomes more aware of safety and hygiene protocols.

In late March, Ansell reaffirmed its earnings per share guidance for FY20 and cited strong demand for its hand and body protection products. Ansell also assured investors that its balance sheet remains in a strong position and the company is working to maximise its product output.

Medibank Private Ltd (ASX: MPL)

The COVID-19 pandemic could result in consumers and households becoming more aware of their overall health and encourage trips to hospitals and general practices. As a result, many might look to spend money on private health insurers like Medibank for peace of mind.

In addition, with the federal government’s budget coming under pressure post-pandemic, private healthcare might become more popular as public health systems become constrained. This could see the emergence of alternative care models such as telehealth becoming more prominent.

In a recent letter to shareholders, Medibank provided assurance that the COVID-19 pandemic is expected to have no overall impact on the company’s FY20 financial outlook. The company also assured shareholders of its strong and debt-free balance sheet, whilst also elaborating that Medibank is well-positioned to benefit from changes in the healthcare sector.

Sonic Healthcare Limited (ASX: SHL)

Sonic is the third-largest pathology provider in the world, generating relatively defensive revenue from radiology and pathology services. Although the pandemic forced the company to withdraw its earnings guidance for FY20, Sonic was able to secure a contract from the Australian government to provide testing for COVID-19.

In addition to playing a crucial frontline role, Sonic also boasts a strong financial position with a balance sheet boasting almost $1 billion in cash on hand. This could allow Sonic to fuel its growth through acquisitions of smaller, struggling providers. Additionally, with the public being forced to live with the virus until a vaccine is found, Sonic could benefit from further contracts in the future.

Should you buy?

In my opinion, the ASX healthcare sector is poised to benefit from various tailwinds in the long term. Apart from an ageing population and the demand this has for healthcare, the sector could benefit from renewed consumer behaviour and the public’s approach to health and wellbeing post-pandemic.

I suggest that investors create a watchlist of ASX shares that could benefit from a boom in healthcare and wait for positive price action before making an investment decision.

More reading

• In a post-COVID world, could Australia be the next superpower?
• 3 ASX 200 pandemic winners and 3 losers
• Protect your portfolio with these defensive ASX shares
• ASX shares and investing trends that could boom post COVID-19
• Why Dicker Data, Medibank, Mesoblast, & Orora are dropping lower

Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ansell Ltd. and Sonic Healthcare 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 Altium Limited (ASX: ALU) share price is having a rare off day and is sinking lower on Tuesday afternoon.

At the time of writing the electronic design software company’s shares are down 4% to $35.35.

Why is the Altium share price sinking lower?

Investors have been hitting the sell button today after Altium warned that it could fall short of its aspirational goal of US$200 million in revenue in FY 2020.

This is because the company is anticipating some headwinds in the important months of May and June. These have been caused by the ongoing restrictions and lockdowns associated with COVID-19 in the United States and Western Europe.

Altium’s CEO, Aram Mirkazemi, explained: “While engineers are actively doing prototype designs, and the electronics industry is holding up relatively well, the cash preservation priorities of small to medium size businesses are likely to affect the timing of closing sales in our typically strongest months of the year being May and especially June.”

The company’s CFO, Joe Bedewi, added: “Our long-term aspirational goal of US$200 million revenue for the full year will require our typically strong months of May and June to be unaffected and have the usual strong finish. At this point, given the economic consequences of the continued restrictions, this is likely to be a low probability.”

Is this a buying opportunity?

While this news is slightly disappointing, it is not unexpected given how the pandemic has shaken the global economy.

Furthermore, the market was already predicting revenues lower than this aspiration target.

According to a note out of Goldman Sachs, it was forecasting FY 2020 revenue of US$194 million and EBITDA of US$71 million. This was largely in line with the market’s expectations, with the Bloomberg consensus at US$186 million and EBITDA of US$71 million.

And while there may be concerns that the weakness could carry over into FY 2021, Goldman Sachs remains comfortable with its estimates. Both the broker and the consensus are expecting revenue growth of 18% next year.

The broker commented: “… our FY21E revenue forecasts (and those of consensus) assume +18% growth on FY20E. We regard this as achievable at this stage but note it is likely to be more second half weighted than usual as 1H21E is likely to still remain relatively challenging.”

I agree and believe Altium’s growth will accelerate once these headwinds ease. Which could make it worth taking advantage of today’s share price weakness to pick up shares. Especially with the company still aiming to achieve market domination and 100,000 subscribers by 2025.

This will be double its expected FY 2020 subscriber base and, along with its other growing businesses, should drive strong earnings growth as it scales.

More reading

• ASX 200 sinks 1.3%: Big four banks drag ASX lower & Altium issues sales warning
• Why Altium, ELMO, Suncorp, & Webjet shares are sinking lower
• 3 ASX tech shares to buy now for long-term returns
• Altium share price on watch after warning of tough trading conditions
• In a post-COVID world, could Australia be the next superpower?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Altium. 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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Polynovo Ltd (ASX: PNV) shares could be about to surge in 2020. The ASX 200 healthcare company boasts a market capitalisation of $1.71 billion at the moment, but I think it could grow to be the next CSL Limited (ASX: CSL).

Why the Polynovo share price is climbing higher

Concerns about COVID-19 smashed the S&P/ASX 200 Index (ASX: XJO) in late February and for most of March. The Polynovo share price was no different and slumped as low as $1.32 per share on 23 March.

Since then, the ASX 200 has rebounded and gone on a bullish run. Polynovo has followed suit – at the time of writing, the ASX healthcare share is up 96.21% in the space of just 6 weeks. Pretty impressive, even for an Aussie growth share.

But I think that this 96.21% gain could be just the beginning. Polynovo has a strong research and development (R&D) pipeline and is continuing to bring more products to market. I can’t see demand for medical technology and Polynovo’s flagship NovoSorb product subsiding any time soon.

In fact, I think Polynovo could follow in CSL’s footsteps to become the next large-cap ASX healthcare share.

Will Polynovo be the next ASX healthcare leader?

CSL remains the gold standard in terms of ASX healthcare shares. The biotech giant is worth a whopping $137 billion right now and is up more than 40,000% since its IPO.

Polynovo could be on a similar path if things continue going well. The medical group reported record US quarterly sales for the March quarter and this COVID-19 volatility looks to be a minor speed bump.

The technical environment remains good for the company in 2020. In fact, the Polynovo share price is up more than 3,000% in just 5 years and could be one to watch in the years to come.

Foolish takeaway

It’s hard to pick value with all the noise in the markets right now. However, Polynovo looks to be a high-quality growth share with solid R&D prospects. That could make Polynovo a top ASX healthcare share to buy despite the economic uncertainty we’re seeing today.

More reading

• Where to invest $10,000 in ASX 200 shares immediately
• 3 must-read investing books for new investors
• Leading brokers name 3 ASX shares to sell today
• Is ‘buy-and-hold’ the best way to invest in ASX shares?
• ASX 200 sinks 1.3%: Big four banks drag ASX lower & Altium issues sales warning

Ken Hall 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 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 lucky enough to have $10,000 sitting in a savings account, then now could be an opportune time to invest it.

After all, the S&P/ASX 200 Index (ASX: XJO) is still down 25% from its February high and interest rates are at historical lows and unlikely to improve any time soon.

With that in mind, here are three ASX 200 shares that I believe would be worth considering as investments:

Appen Ltd (ASX: APX)

Appen is a provider of human annotated dataset development services. The company’s million-strong crowd sourced team of experts prepare the data that goes into the machine learning and artificial intelligence models of some of the world’s biggest tech companies. Given the growing importance of this technology and expectations that spending on it will grow materially over the next decade, I believe Appen is well-placed for long term growth.

CSL Limited (ASX: CSL)

Another option for investors to consider buying is this biotherapeutics giant. I think CSL is well-placed to be a market beater again over the next decade thanks to the quality of its therapies and the high level of investment in research and development it makes each year. In respect to the latter, in FY 2019 CSL invested a massive US$832 million in R&D activities across its businesses. I expect these investments to bear fruit over the coming years and cement its position at the leader in its field.

NEXTDC Ltd (ASX: NXT)

Another company which I think could be a great option for a $10,000 investment is NEXTDC. The data centre operator has been growing very strongly over the last few years thanks to the increasing amount of data being generated by both consumers and businesses. And with data consumption only going to increase in the future as more software moves to the cloud and 5G internet adoption grows, the future looks bright for NEXTDC.

More reading

• 2 ASX shares that could set you up for life
• Is this ASX healthcare share about to soar?
• 3 must-read investing books for new investors
• Leading brokers name 3 ASX shares to sell today
• Is ‘buy-and-hold’ the best way to invest in ASX shares?

James Mickleboro owns shares of NEXTDC Limited. 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.

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