The gold spot price has remained steady at 8-year highs of around US$1,704 per ounce. Furthermore, the combination of a weak Australian dollar and an elevated gold spot price has created very healthy margins for Aussie gold miners.

Given its safe haven and hedging characteristics, could gold shares in the S&P/ASX 200 Index (ASX: XJO) provide investors with both a defensive asset and safe returns?

Let’s take a look at 3 mid to top-tier ASX gold miners.

Saracen Mineral Holdings Limited (ASX: SAR)

Mid-tier producer Saracen has largely been unaffected by COVID-19. Proactive control measures including longer fly-in fly-out rosters, additional charter flights and buses to support social distancing, and reduced capital works have allowed the company to operate in a business as usual manner.

In the company’s March quarter update, it highlighted record quarterly production thanks to its first full quarter contribution from its KCGM acquisition. I believe Saracen is in a strong position moving forward given its 7-year track record of meeting or beating guidance and is currently tracking ahead of FY20 guidance.

With a globally renowned Super Pit acquisition under its belt and a moderate price-to-earnings ratio of 34, Saracen may represent good value at today’s prices.

Northern Star Resources Ltd (ASX: NST)

Northern Star Resources is likewise a growth engine following the joint acquisition of KCGM. Some of its COVID-19 related measures resulted in temporary reductions in production, leading to increases in unit costs in the March quarter. However, Northern Star expects improved performance in the June quarter.

That said, it still experienced quarter-on-quarter improvements in both gold production and costs per ounce. As it stands, the March quarter had an average all-in sustaining cost (AISC) of A$1,590/oz, with the current spot price at the time of writing at A$2,637.5.

If investors feel uneasy buying Saracen which is currently at record all-time highs, Northern Star may be the alternative growth-orientated gold miner to consider. 

Evolution Mining Ltd (ASX: EVN)

Evolution Mining is widely regarded as the lowest cost producer alongside Newcrest Mining Limited (ASX: NCM). In its March quarterly report, it highlighted no material impact from COVID-19, but group gold production had declined 3% quarter on quarter.

The company remains confident that it will meet its FY20 gold production guidance of around 725,000 ounces at an AISC at the top end of guidance of A$990/oz.

Evolution noted that should current spot metal prices be maintained during the June quarter, net cash flow is expected to be $90 million to $95 million higher, but AISC would be negatively impacted by A$20 to $25/oz due to higher royalties and lower by-product credits. 

More reading

• The smartest ASX shares to buy if you have $2,000
• Is $1,000 of A2 Milk shares a good investment?
• How can the ASX 200 soar with rising unemployment?
• ASX 200 down 0.9%: CBA reveals $1.5bn COVID19 provision & gold miners charge higher
• Why CBA, CSR, Fortescue, & Northern Star shares are pushing higher

Motley Fool contributor Lina Lim 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 ASX gold shares steady: Can gold provide your portfolio with defensive and safe returns? appeared first on Motley Fool Australia.

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A2 Milk Company Ltd (ASX: A2M) shares have been one of the top ASX 200 performers in 2020. In fact, the Kiwi dairy group’s shares have climbed 27.88% since the start of the year. That in itself sounds pretty impressive, but then you remember how many of A2 Milk’s ASX 200 peers have performed so far this year.

The S&P/ASX 200 Index (ASX: XJO) is down 20.43% since 2 January amid the COVID-19 pandemic and an oil price war between Saudi Arabia and Russia. This makes A2 Milk’s share price growth even more remarkable in the face of a broader market downturn.

So, is there still time to buy into the Kiwi dairy group for a good price today?

Should you invest $1,000 in A2 Milk shares?

It’s easy to see why the group’s shares are rocketing higher. We saw ASX supermarket shares surge as panic buying increased in February and March. However, many supermarket suppliers also benefitted from this increased demand at the checkout.

That drove A2 Milk shares to a new 52-week high of $19.23 per share on 16 April. To some, this could signal that its shares are overvalued right now.

It’s hard to go past the dairy company’s recent success if you’re looking to invest. Of course, past performance is not a reliable indicator of future performance. But at the same time, with A2 Milk’s increasing share price pushing its overall value to $13.3 billion, there’s a lot to like about this company.

Compare that to 5 years ago, when A2 Milk shares were trading at just $0.48 per share. Now, if you didn’t invest in the dairy group in 2015, there’s no point crying over spilled milk! In fact, all of us wish we’d bought A2 Milk in the last 5 years.

Foolish takeaway

I don’t think the current $18.00 per share valuation should put you off buying A2 Milk. Sure, there are challenges facing the dairy industry in Australia and New Zealand. However, A2 Milk has also had success in Asia and is deepening its overseas network, which should see it well placed for continued growth in the years ahead. I still think A2 Milk shares could easily be a top 10 ASX share within the next decade.

More reading

• The smartest ASX shares to buy if you have $2,000
• ASX gold shares steady: Can gold provide your portfolio with defensive and safe returns?
• How can the ASX 200 soar with rising unemployment?
• Safe dividend stocks to buy today for the COVID-19 world
• 2 quality ASX shares to buy for long-term growth

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. 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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The S&P/ASX 200 Index (ASX: XJO) has rallied 19% off its March lows despite rising unemployment. This has been assisted by government measures:

• $130 billion JobKeeper payment to eligible businesses and employees
• Record low interest rates set by the Reserve Bank of Australia (RBA) and quantitative easing
• Cash flow boosts to eligible businesses
• Increase in payments to eligible welfare recipients
• Early access to superannuation for eligible citizens

The list above is not exhaustive but representative of measures taken by the government and the RBA to try to cushion the economy.

Why has the government stepped in?

The COVID-19 pandemic has had a detrimental impact on the Australian economy. Unemployment is estimated to rise to 10% from 5.1% according to Treasury figures. Without the stimulus measures, unemployment would have been higher. The Treasurer said the economic shock from coronavirus is set to be far more significant than the Global Financial Crisis.

According to research firm Roy Morgan, a staggering 3.92 million Australians (27.4% of the workforce) were unemployed or under-employed and looking for more work in the second half of March.

Relationship between unemployment and the share market

The market rally is surprising to many, particularly when economic indicators, such as unemployment, are soaring. The share market is more concerned about predicting the future than it is about the present. Furthermore, the recent decline and upswing is explained by the market’s ongoing re-evaluation of risk.

The bounce in the market is also in anticipation of a ‘V-shaped’ recovery.  While it’s yet to be seen whether government stimulus will have the desired effect, it’s reassuring for investors to see economic support.

Prices of shares are influenced by company earnings. While earnings have been hit hard in some sectors, other sectors have thrived on the back of the crisis with more demand.

An example of a sector hit hard by economic shocks are financial institutions such as Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB), Australia and New Zealand Banking GrpLtd (ASX: ANZ), and Westpac Banking Corp (ASX: WBC). A low interest rate environment squeezes net interest margins which impact earnings significantly.

In contrast, a sector that has performed very well are ASX healthcare shares such as Ansell Limited (ASX: ANN) and Fisher & Paykel Healthcare Corp Ltd (ASX: FPH). This is on the back of increasing demand for their healthcare products.

Foolish takeaway

It appears optimism on the share market has replaced pessimism somewhat. Over the coming months, as more economic data is released, investors will have a clearer picture of any economic recovery.

More reading

• ASX 200 down 0.9%: CBA reveals $1.5bn COVID19 provision & gold miners charge higher
• Dividends are drying up – but not for these ASX shares
• Why CBA, CSR, Fortescue, & Northern Star shares are pushing higher
• Safe dividend stocks to buy today for the COVID-19 world
• 2 quality ASX shares to buy for long-term growth

Motley Fool contributor Matthew Donald owns shares of National Australia Bank 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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With the share market still trading notably lower than its February highs, I believe there are some great opportunities for investors right now.

If you have $3,000 gaining just a modicum of interest in a savings account, I would seriously consider putting it to work in the share market instead.

Here are two top ASX 200 shares I would buy with $3,000:

Bravura Solutions Ltd (ASX: BVS)

Bravura Solutions is a leading provider of software products and services to the wealth management and funds administration industries. It is best known for its Sonata wealth management platform which allows users to connect and engage with their clients anytime, anywhere, through computers, tablets or smartphones. Sonata has been growing very strongly in recent years and looks set to continue for some time due to its quality and sizeable market opportunity.

This should be bolstered by recent acquisitions of Midwinter and Finocomp. Midwinter allows financial advisers to provide comprehensive face to face financial advice and looks well placed to capitalise on the continued change in the Australian financial advice industry. Whereas FinoComp’s software adds functionality to Bravura and cross-sell opportunities. Another positive is that demand for its offering has not been impacted by the pandemic. Management recently reaffirmed its guidance for mid-teens profit growth in FY 2020 (excluding the benefits of the aforementioned acquisitions).

ResMed Inc. (ASX: RMD)

Another share to consider buying with $3,000 is ResMed. It has been growing at a very strong rate over the last decade and has become one of the world’s leading sleep treatment companies. Pleasingly, this strong form has continued in FY 2020. During the first half the company delivered a 22% lift in operating profit to US$368.9 million. It then followed this up with a 47% increase in third quarter profits earlier this month.

Although ResMed’s growth in the coming quarters could be hit by lower sleep apnoea diagnoses because of the pandemic, outside this, I’m confident that it is well-placed to continue its positive trajectory for many years to come. This is due to its world-class product portfolio and the massive number of undiagnosed sleep apnoea sufferers globally. The company estimates that there are upwards of ~1 billion people impacted by sleep apnoea globally. The vast majority of these are currently undiagnosed.

More reading

• Why CSR, Kogan, Premier Investments, & ResMed shares are storming higher
• These were the top 10 ASX 200 shares over the last year
• In a post-COVID world, could Australia be the next superpower?
• 5 top ASX shares to buy and hold for a decade
• Fund manager thinks investors should look beyond the worst economic data since the Great Depression

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 Bravura Solutions Ltd. The Motley Fool Australia has recommended Bravura Solutions Ltd and ResMed Inc. 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 Got $3,000 to invest? Here are 2 fantastic ASX 200 shares to buy right now appeared first on Motley Fool Australia.

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At lunch on Wednesday the S&P/ASX 200 Index (ASX: XJO) is off its lows but on course to record another decline. The benchmark index is down 0.9% to 5,352.5 points.

Here’s what has been happening:

Commonwealth Bank third quarter update.

The Commonwealth Bank of Australia (ASX: CBA) share price is trading higher today after the release of its third quarter update. For the three months ending March 31, Commonwealth Bank delivered cash net profit from continuing operations of $1.3 billion. This was down 41% on the average quarterly cash net profit it posted in the first half. The coronavirus pandemic was the main drag on its results. The banking giant revealed an additional credit provision of $1.5 billion for the potential longer term impacts of COVID-19.

Big banks under pressure.

The rest of the big four banks are trading lower on Wednesday after overnight declines by their U.S. counterparts. The worst performer in the group is the Australia and New Zealand Banking Grp Ltd (ASX: ANZ) share price with a 1% decline. Its shares were down as much as 2% at stage this morning.

Gold miners charge higher.

One area of the market which is pushing higher today is the gold mining industry. Two of the biggest gold miners, Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST), are up around 2% at lunch. This has helped drive the S&P/ASX All Ordinaries Gold index 1.25% higher today. Investors have been buying the gold miners due to a rise in the gold price and increasing demand for safe haven assets.

Best and worst ASX 200 performers.

The best performer on the ASX 200 today has been the Pilbara Minerals Ltd (ASX: PLS) share price by some distance with a 7% gain. This is despite there being no news out of the lithium miner today. The worst performer has been the Ausnet Services Ltd (ASX: AST) share price with a 6.5% decline. This morning Ord Minnett downgraded its shares to a lighten rating with a $1.75 price target following its FY 2020 result.

Returns as of 7/4/2020

Motley Fool contributor James Mickleboro 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.

More reading

• How can the ASX 200 soar with rising unemployment?
• Revealed: 5 dividend shares for reliable income
• Dividends are drying up – but not for these ASX shares
• Why CBA, CSR, Fortescue, & Northern Star shares are pushing higher
• Safe dividend stocks to buy today for the COVID-19 world

The post ASX 200 down 0.9%: CBA reveals $1.5bn COVID19 provision & gold miners charge higher appeared first on Motley Fool Australia.

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The S&P/ASX 200 Index (ASX: XJO) has followed the lead of U.S. markets and is sinking lower on Wednesday. In late morning trade the benchmark index is down 1.45% to 5,325.3 points.

Four shares that are falling more than most today are listed below. Here’s why they are dropping lower:

The Afterpay Ltd (ASX: APT) share price is down 3.5% to $40.29. This decline appears to be down to profit taking after some exceptionally strong gains over the last few weeks. In fact, this week the Afterpay share price hit a record high of $43.68. When the payments company’s shares hit that level, it meant they were up ~450% from the 52-week low they hit in March.

The Flight Centre Travel Group Ltd (ASX: FLT) share price has fallen 3% to $10.23. As with Afterpay, the travel agent’s shares look to have come under pressure due to profit taking. Flight Centre’s shares were surging higher on Friday and Monday in response to the government’s plan to reopen Australia.

The Mesoblast limited (ASX: MSB) share price has returned from its trading halt and is down 4% to $3.30. This morning the cellular medicines developer announced the successful completion of a US$90 million capital raising. The funds were raised at a price of A$3.20 per share, which represents a 7% discount to its last closing price. The proceeds will be used to scale-up manufacturing of its lead product candidate remestemcel-L. This is being trialled as a treatment for COVID-19 acute respiratory distress syndrome (ARDS).

The Sezzle Inc (ASX: SZL) share price has fallen almost 6% to $2.15. This is despite the Afterpay rival releasing a very positive presentation this morning ahead of its appearance at the Goldman Sachs virtual conference. Sezzle continues to grow its merchant sales and customer numbers at a solid rate in 2020.

More reading

• Safe dividend stocks to buy today for the COVID-19 world
• Short sellers are going after Afterpay’s rivals and these ASX shares
• 3 top-notch ASX shares on my May watchlist
• ASX 200 sinks 1.3%: Big four banks drag ASX lower & Altium issues sales warning
• These 10 ASX 200 shares have fallen the most over the last year

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Flight Centre Travel Group Limited and Sezzle Inc. 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 Why Afterpay, Flight Centre, Mesoblast, & Sezzle shares are dropping lower appeared first on Motley Fool Australia.

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The names of five dividend shares have been revealed as picks for reliable income.

It’s more important than ever to find those reliable dividend shares at the moment because plenty of dividend shares aren’t paying like normal.

Shares like National Australia Bank Ltd (ASX: NAB), Transurban Group (ASX: TCL), Sydney Airport Holdings Pty Ltd (ASX: SYD), Westpac Banking Corp (ASX: WBC) and Australia and New Zealand Banking Group (ASX: ANZ) have all made it clear that normal dividends won’t be paid.

Australia and the globe is expected to go through a lot of pain this year. Economies may be stretched to the limit.

So what dividend shares are ones that you can rely on?

An Australian Financial Review article has named five shares:

Amcor Limited (ASX: AMC) is a packaging giant that recently merged with Bemis in the US. It had already been a solid dividend share and its earnings are holding up well despite the coronavirus. Amcor actually increased its guidance this week.

Ausnet Services Ltd (ASX: AST) is an energy infrastructure business. It owns and operates the Victorian electricity transmission network. It also owns one of five electricity distribution networks, and one of three gas distribution networks in Victoria.

APA Group (ASX: APA) is another energy infrastructure business. It owns a large network of gas pipelines around Australia. APA also owns stakes in other energy investments. APA has been one of the best dividend shares on the ASX for reliability this century.

Spark Infrastructure Group (ASX: SKI) owns interests in $18 billion of electricity network assets across Australia. They deliver energy to more than 5 million customers in Victoria, South Australia, New South Wales and the Australian Capital Territory and transports energy across the National Electricity Market (NEM) to other states.

Medibank Private Limited (ASX: MPL) is Australia’s biggest private health insurer. Whilst policyholder numbers aren’t going to be as good as previously expected, there are obviously less claims too. It is likely to be able to maintain its dividend during this period.

Foolish takeaway

I believe these are solid dividend share ideas. As a group I think they’ll be able to keep paying solid dividends during this period. Apart from Medibank, I think I’d be happy to own all of them in a dividend portfolio for the time being. Though I think a share like Brickworks Limited (ASX: BKW) could be even better for total returns.

More reading

• ASX 200 down 0.9%: CBA reveals $1.5bn COVID19 provision & gold miners charge higher
• Dividends are drying up – but not for these ASX shares
• Safe dividend stocks to buy today for the COVID-19 world
• Why high yield dividend shares can be detrimental to your wealth
• Meet the growing ASX large cap that’s beating the COVID-19 slowdown

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Amcor Limited and Brickworks. The Motley Fool Australia owns shares of APA 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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Dividends are being slashed as the economic impact of coronavirus takes its toll. Portfolios set up to harvest dividends are seeing returns diminish as dividend stalwarts defer or cancel dividends. For retirees reliant on dividend income to cover living expenses, the impact is serious.  

The banks have long been a favourite of ASX dividend investors due to their relatively high yields. But National Australia Bank Ltd (ASX: NAB) slashed its interim dividend to 30 cents per share, down from 83 cents last year. Australia and New Zealand Banking GrpLtd (ASX: ANZ) has chosen to defer its 2020 interim dividend decision until greater clarity emerges regarding the economic impact of COVID-19. 

According to analysis cited by the Australian Financial Review, 7 of Australia’s largest financial services companies have either cut or deferred dividends over the past couple of months.

So where does a dividend investor go in the current market? We take a look at 2 ASX shares that are still paying solid dividends. 

Amcor PLC (ASX: AMC)

Amcor upgraded its guidance yesterday, with profit growth of 11% to 12% forecast, up from 7% to 10%. The business is benefitting from geographic and product diversity which has underpinned its defensive earnings profile. 

Amcor develops and produces packaging for food, beverage, pharmaceutical, home and personal care products. Net sales in the March quarter increased to US$3,141 million, up from US$2,310 million in the March 2019 quarter. Earnings per share increased to 11.4 US cents from 9.7 US cents in the prior corresponding period. 

Amcor has benefitted from the demand for packaging of food and healthcare products. A quarterly cash dividend of 11.5 US cents per share will be paid, unfranked, which works out to 17.7 Australian cents per share. 

AusNet Services Ltd (ASX: AST)

AusNet delivered improved financial performance in the full year to 31 March 2020, with revenues up 6.2% to $1,978 million. This was driven by increased underlying revenues and customer contributions. Despite an overall increase in expenses, underlying operational expenditures declined through the delivery of efficiency initiatives. 

As an infrastructure company operating regulated assets, AusNet has defensive properties which help shield it from the coronavirus crisis. Net profit after tax increased 14.5% to $290.7 million in FY20. A dividend of 5.1 cents per share has been declared, 50% franked. This takes the full-year dividend to 10.2 cents per share, up 4.9% from 9.72 cents in FY19. 

More reading

• How can the ASX 200 soar with rising unemployment?
• ASX 200 down 0.9%: CBA reveals $1.5bn COVID19 provision & gold miners charge higher
• Revealed: 5 dividend shares for reliable income
• Safe dividend stocks to buy today for the COVID-19 world
• Why high yield dividend shares can be detrimental to your wealth

Motley Fool contributor Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Amcor 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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