The National Australia Bank Ltd. (ASX: NAB) share price slumped 32% lower in FY20, but is the ASX bank share a strong buy this year?

Why did the NAB share price slump lower in FY20?

It’s been a tough 12 months for all the ASX bank shares. While the S&P/ASX 200 Index (ASX: XJO) fell 11.3%, the NAB share price fell even further.

The coronavirus pandemic has spooked investors and hit some bank shares harder than others in 2020. In fact, NAB’s value has slumped 24.5% lower this calendar year while Commonwealth Bank of Australia (ASX: CBA) shares are down just 12.5%.

CommBank shares have been surging in value in recent weeks with the bank selling its 55% stake in Colonial First State for $1.7 billion in May.

But NAB is far from alone as Westpac Banking Corp (ASX: WBC) shares remain down 34.5% in the last 12 months.

There are still some looming questions about the housing market and economy in general. These factors are weighing on investors’ minds and the NAB share price as we enter FY21.

NAB also slashed its dividend in April, announcing a 30 cents per share interim, fully franked dividend. Many investors were disappointed by the cut, down 64% from 1H 2019 distributions, combined with a $3.5 billion equity raise.

But as we enter a new financial year, will we see strong prospects for the NAB share price and the bank’s investors?

Can NAB surge in value this year?

I personally think the market is at an interesting point right now. I’m keen to see what the impact will be on the ASX when the government starts rolling back stimulus measures from September.

If the economy bounces back sooner than expected, the NAB share price could finish the year strongly. A robust housing market and lower than anticipated unemployment would be good news for ASX bank shares.

However, that is far from a certainty at this point in time. NAB’s next earnings result is due in November but I wouldn’t be holding out for a big dividend given the current conditions.

Having said that, long term, I still see the NAB share price as a strong buy for dividends.

More reading

• 5 things to watch on the ASX 200 on Thursday
• 10 FY21 ASX share picks revealed by Bell Potter
• Australian property prices fell again in June. Will the drop continue?
• These ASX 200 shares were the worst performers of FY20
• These 3 ASX healthcare shares are at all-time highs!

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Webjet Limited (ASX: WEB) share price will be on watch on Thursday after it followed the lead of rival Flight Centre Travel Group Ltd (ASX: FLT) by bolstering its liquidity.

What did Webjet announce?

This morning the online travel agent announced the successful pricing of an offering of 100 million euros (A$163.1 million) convertible notes due in 2027.

Webjet’s Managing Director, John Guscic, explained: “This Offering supports our ongoing focus on maintaining a strong balance sheet as we continue to navigate the challenging operating environment caused by COVID-19.”

The chief executive expects the notes to diversify the company’s funding sources and increase its financial and strategic flexibility. He also believes it will put Webjet in a position to take advantage of any opportunities in the future.

He added: “We continue to believe the strength of Webjet’s capital position in the current uncertain environment will provide a strategic advantage longer term, enabling the Company to execute its strategy and take advantage of opportunities as they arise.”

What will the funds be used for?

The company will use the proceeds to repay $50 million of its existing term debt, whilst extending remaining term debt maturity into late 2022. It will also use some of the proceeds for potential acquisitions and ongoing capital management.

Though, management notes that there is no agreement or understanding with respect to any potential acquisitions or investments at this time.

Trading update.

Webjet also released a trading update with its offering. It advised that, as expected, its total transaction value (TTV) and revenue in April and May 2020 were nominal.

And while the company has started to see some booking activity in its Australian OTA and WebBeds businesses, it expects any revenue contribution in the near term to only be modest.

It also advised that its operating costs from April 2020 to the end of June 2020 were averaging $15 million month. This is a reduction of approximately $13 million per month from pre COVID-19 expenditure.

Finally, on another note, Webjet has just announced an agreement with Afterpay Ltd (ASX: APT), which will see it offer customer buy now pay later options. It is available on flight, hotel, and package bookings up to $2,000.

More reading

• 5 things to watch on the ASX 200 on Thursday
• ASX 200 finishes 0.6% higher, Aussie house prices fall
• These ASX 200 shares were the worst performers of FY20
• Webjet and these shares were the worst performers on the ASX 200 in June
• ABS reveals which industries (and ASX shares) may rebound hard after COVID-19

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

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The ASX healthcare sector continues to be one of the top-performing market sectors. The demand for healthcare products and services only continues to grow. An ageing global population and continuing advances in healthcare treatments and technology are driving this demand.

Here we examine 2 of my top ASX healthcare shares picks right now: Nanosonics Ltd. (ASX: NAN) and Ansell Limited (ASX: ANN).

Nanosonics

Nanosonics manufactures and distributes market-leading disinfection system for ultrasound probes. Its core product is the trophon EPR disinfection system, which has gained industry reputation as the market leader.  The device is fully automated, quick to use and does not require chemicals.

As well as selling the trophon system product units, the company also sells a range of ancillary products. These recurring consumables grow additional strong revenues over time, in line with the growth of its installed core product unit. This results in a strong combined revenue stream. Nanosonics recorded revenue of $48.5 million for the first half of FY 2020. This was an increase of 19% on the prior corresponding period (pcp).

The company has strong geographic diversification. Its overseas markets generate 90% of its revenue. Nanosonics continues to grow revenue very strongly in its largest market, the US. It is also seeing strong growth across Asia, Europe and the Middle East.

Nanosonic’s strategic priorities moving forward focus on 4 core areas. This includes continuing to establish trophon technology as the industry standard in its operating markets. This ASX healthcare share will also look at expanding and investing in new markets.

Nanosonics could capitalise on the growing global trend towards stricter disinfection control over the next 5–10 years. Globally, more and more health agencies are taking measures to enforce stricter policies to protect against hospital-acquired infections.

Ansell

Ansell is involved in the development, manufacturing and sale of gloves and protective personal equipment in the industrial and medical markets. It has broad geographic and customer diversity with sales operations in over 50 countries. Also, most of its new product lines are patentable and must comply with ever-increasing regulatory standards. This further strengthens its competitive position.

A business update in late March revealed a high demand for its hand and body protection products. These products are industry certified for protection against infections such as the coronavirus.

Ansell is well-positioned to grow over the next decade through rising demand for protective personal equipment in the healthcare segment. 

Ansell shares are currently trading on a forward dividend yield of 1.9%, unfranked.

More reading

• These 3 ASX healthcare shares are at all-time highs!
• 2 shares to buy before earnings season
• Top ASX Stock Picks for July 2020
• 10 high quality ASX shares to buy in FY 2021
• The best placed ASX stocks for the August reporting season

Phil Harpur owns shares of Nanosonics Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nanosonics Limited. The Motley Fool Australia has recommended Ansell Ltd. 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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On Wednesday the S&P/ASX 200 Index (ASX: XJO) made it two days in a row of solid gains. The benchmark index climbed 0.6% to 5,934.4 points.

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

ASX 200 expected to push higher.

It looks set to be another positive day of trade for the ASX 200. According to the latest SPI futures, the benchmark index is poised to rise 40 points or 0.7% at the open. This follows a reasonably positive night of trade on Wall Street. Although the Dow Jones fell 0.3%, the S&P 500 rose 0.5% and the Nasdaq jumped 0.95%. The latter index closed at a record high.

Pfizer coronavirus vaccine update.

U.S. markets were given a lift overnight after the release of an update on a study of a coronavirus vaccine candidate. The study of BNT162b1, which is being developed by Pfizer and BioNTech, showed that the drug created neutralising antibodies. However, at this stage the results have not been reviewed by a medical journal. If the vaccine is successful and gets regulatory approval, Pfizer expects to manufacture upwards of 100 million doses by the end of the year.

Oil prices rebound.

It could be a good day of trade for energy producers such as Beach Energy Ltd (ASX: BPT) and Oil Search Limited (ASX: OSH) after oil prices jumped higher. According to Bloomberg, the WTI crude oil price is up 1.2% to US$39.73 a barrel and the Brent crude oil price has climbed 1.6% to US$41.92 a barrel. A drawdown in U.S. crude inventories from record highs and some positive manufacturing data supported oil prices.

Gold price tumbles.

Gold miners such as Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) could come under pressure today after a pullback in the gold price. According to CNBC, the spot gold price has dropped 1.1% to US$1,780.40 an ounce after stronger than expected economic data.

Webjet raises funds.

The Webjet Limited (ASX: WEB) share price will be on watch today after the release of a late announcement on Wednesday. The online travel booking company revealed that it is launching an offering of A$163 1 million convertible notes. These notes will be due in 2027.  The company’s Managing Director, John Guscic, commented: “This Offering supports our ongoing focus on maintaining a strong balance sheet as we continue to navigate the challenging operating environment caused by COVID-19.”

More reading

• ASX 200 finishes 0.6% higher, Aussie house prices fall
• Australian property prices fell again in June. Will the drop continue?
• These ASX 200 shares were the worst performers of FY20
• These 3 ASX healthcare shares are at all-time highs!
• ASX 200 up 0.9%: Big four banks rising, NEXTDC rockets higher

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Webjet 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 5 things to watch on the ASX 200 on Thursday appeared first on Motley Fool Australia.

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Fortunately, in this low interest rate environment, there are a good number of dividend shares offering investors generous yields.

Two dividend shares that I would buy right now instead of a term deposit are listed below. Here’s why I think they are great income options:

BWP Trust (ASX: BWP)

As the largest owner of Bunnings Warehouse sites in Australia with 68 leases, I believe BWP could be a property trust to buy. This is because I believe that Bunnings is one of the highest quality businesses in the country and well-positioned to continue its growth through the pandemic and over the coming years. Especially given how the government is supporting the construction industry with renovation grants.

I believe this should make it easier for BWP to collect rent as normal at a time when other retail property companies are struggling to do so. At present I estimate that the company’s shares offer investors a 4.8% FY 2021 dividend yield.

Rural Funds Group (ASX: RFF)

Another property company which I think would be a great option for income investors is Rural Funds. It has a focus on agricultural properties and owns a diverse range of assets across several different industries. These include cattle, vineyards, and orchards. Due to the nature of these industries, its tenants generally sign long term leases. And as these leases tend to contain fixed rental increases, the company has great visibility with its future earnings and distributions.

As a result, it has already provided its guidance for FY 2021. Next year Rural Funds intends to increase its distribution to 11.28 cents per share. This works out to be a forward 5.6% distribution yield. Overall, I think this makes Rural Funds a great dividend share to own in the current environment.

More reading

• 10 FY21 ASX share picks revealed by Bell Potter
• 3 top ASX dividend shares to buy for FY21
• Why I would buy these high yield ASX dividend shares
• 5 things to watch on the ASX 200 on Monday
• 3 fantastic ASX dividend shares to buy next week

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. 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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