Are you looking to add a few blue chip ASX 200 shares to your portfolio in July? Then the three listed below could be worth considering.

I believe these blue chip shares have the potential to generate solid total returns for investors over the next few years. Here’s why I would buy them next month:

Coles Group Ltd (ASX: COL)

The first blue chip ASX 200 share I would consider buying in July is Coles. I think the supermarket giant would be a great option for a number of reasons. These include its defensive earnings, strong market position, and the refreshed strategy unveiled last year. This strategy aims to make $1 billion in cumulative savings by FY 2023 through the use of technology to automate manual tasks and simplifying above-store roles. I believe this leaves Coles well-positioned to achieve solid earnings and dividend growth over the next decade.

Ramsay Health Care Limited (ASX: RHC)

Another blue chip ASX 200 share to consider buying is Ramsay Health Care. Although the short term is likely to be challenging, I believe Ramsay’s long term growth potential remains very strong. This is because the company’s world class network of private hospitals looks set to benefit from the expected increase in demand for healthcare services in the future due to ageing populations and increased chronic disease. Another positive is Ramsay’s long history of making earnings accretive acquisitions. I believe there’s a strong chance it will acquire its way into new markets in the coming years to support its growth. Overall, I feel this puts it in a solid position to deliver strong total returns for investors over the 2020s and beyond.

SEEK Limited (ASX: SEK)

A final blue chip ASX 200 share to consider buying is this job listings giant. As with Ramsay, SEEK is certainly having a tough time right now. But I don’t believe it will be long until trading conditions normalise and the company returns to growth. In respect to the latter, I believe its China-based Zhaopin business will be the key driver of growth in the future. This business has quickly become the pivotal part of the company and contributed 47.8% of its total revenue during the first half of FY 2020. Given how lucrative the China market is, I’m confident Zhaopin can underpin strong growth for SEEK for a long time to come.

More reading

• These were the best performing ASX 200 shares last week
• Wesfarmers and one more ASX share I’d buy in another market crash
• How I’d build a $100,000 portfolio for ASX dividend shares
• ASX 200 rebounds 1.5%, Qantas drops on capital raising
• The latest ASX shares to be upgraded by top brokers to “buy”

Motley Fool contributor James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET. The Motley Fool Australia has recommended Ramsay Health Care Limited and SEEK 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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With interest rates at ultra-low levels and looking likely to remain that way for the foreseeable future, I continue to believe investors would be better off putting any excess funds into the share market.

But where should you invest these funds? Here are three top shares I would invest $5,000 into in July:

Bubs Australia Ltd (ASX: BUB)

The first share to look at is this goat’s milk-focused infant formula and baby food company. For a long time Bubs was delivering strong sales growth but posting significant losses. This led to the company burning through cash at a rapid rate and needing to tap the market for additional funds. Pleasingly, the company appears to have reached an inflection point and recently reported positive operating cashflow. I’m optimistic Bubs will build on this in the coming 12 months and start growing its earnings at a very strong rate.

PolyNovo Ltd (ASX: PNV)

Another option for a $5,000 investment could be PolyNovo. It is an exciting medical device company behind the NovoSorb technology. NovoSorb is a biodegradable material that can be used to aid the repair of bone fractures and damaged cartilage, and in skin grafts. The key product in its portfolio is the NovoSorb Biodegradable Temporising Matrix (BTM) product, which is a wound dressing intended to treat full-thickness wounds and burns. I believe this product, which was developed at CSIRO, is well-placed to capture a growing slice of a $1.5 billion market. And looking ahead, the company believes there is an opportunity to use NovoSorb in the hernia and breast treatment markets. Combined, these give PolyNovo a $7.5 billion addressable market.

Pro Medicus Limited (ASX: PME)

A final share that I think could be worth considering is Pro Medicus. It is a healthcare technology company that provides radiology IT software and services. It has a number of products on offer, but the one that I’m most excited about is the Visage 7 Enterprise Imaging Platform. It delivers fast, multi-dimensional images which are streamed via an intelligent thin-client viewer. A number of major healthcare companies are using this platform, which I believe is a testament to its quality. In addition to this, management recently revealed that it has a number of sales opportunities in its pipeline that it is working on. If it can close these deals, it could underpin strong earnings growth over the coming years.

More reading

• 3 top ASX shares to buy for growth investors in July
• ASX 200 down 1.8%: CSL announces new acquisition, Qantas to raise $1.9bn
• Could one of these ASX shares be ‘the next Afterpay’?
• Australian businesses are running out of cash
• Is the share market facing another February 2020 moment?

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 POLYNOVO FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended BUBS AUST FPO and Pro Medicus 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 Where to invest $5,000 into ASX shares in July appeared first on Motley Fool Australia.

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According to the latest weekly economic report out of Westpac Banking Corp (ASX: WBC), its team continue to forecast the cash rate remaining on hold at 0.25% until at least the end of 2021.

At this point, I can’t see any reason to believe that this forecast won’t prove accurate. Which, unfortunately for income investors, means that interest rates are likely to stay at ultra low levels for some time to come.

But don’t worry, because the two ASX dividend shares listed below could help you beat low interest rates. Here’s why I like them:

Commonwealth Bank of Australia (ASX: CBA)

The first dividend share I would consider buying to beat low interest rates is Commonwealth Bank. Although the banking giant’s shares have recovered strongly over the last few months, I still see a lot of value in them at the current level. This is especially the case for income investors due to the bank’s generous yield.

While I think Commonwealth Bank will have to cut its dividend one final time in FY 2021, I’m optimistic the cut won’t be as severe as some believe. Based on my belief that the economic damage from the pandemic won’t be as bad as first feared, I’m pencilling in a ~$3.70 per share dividend next year. If this proves accurate it will mean a forward fully franked yield of 5.3%.

Rio Tinto Limited (ASX: RIO)

Another dividend share that I would buy to beat low rates is this mining giant. I believe the company is well-placed to deliver bumper free cash flows over at least the next couple of years thanks to the high prices that iron ore is commanding. For example, in FY 2020 Rio Tinto expects its Pilbara iron ore unit costs to be US$14 to US$15 per tonne. This compares to the benchmark iron ore price of over US$100 per tonne.

And given the strength of its balance sheet, I believe Rio Tinto is likely to return the bulk of its free cash flow to shareholders in FY 2020 and FY 2021. In light of this, I estimate that its shares offer a forward fully franked dividend yield of at least 5%.

More reading

• A good time to buy Commonwealth Bank shares?
• How I’d build a $100,000 portfolio for ASX dividend shares
• ASX 200 rebounds 1.5%, Qantas drops on capital raising
• ASX banks told to dip into capital buffers to “support businesses and households”
• ASX 200 rebounds 1.1%: Big four banks charge higher, Qantas sinks after raising $1.4bn

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.

The post These ASX dividend shares will help you beat low interest rates appeared first on Motley Fool Australia.

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Commonwealth Bank of Australia (ASX: CBA) shares continue to lag behind 2 of the other 3 major banks. Both National Australia Bank Ltd. (ASX: NAB) and Australia and New Zealand Banking GrpLtd (ASX: ANZ) have risen by ~32% from 23 March. Yet CBA shares are up only ~27%. This places it on equal footing with beleaguered Westpac Banking Corp (ASX: WBC). A bank undergoing investigation by the ACCC.

Personally, I believe the CBA share is worth further investigation.

Setting up for growth

On 15 March CommBank announced it would be selling 55% of Colonial to US private equity firm KKK for AUD$1.7 billion. This provides additional capital for the bank at a time when it has set aside $1.5 billion for impacts from the coronavirus. This deal caused ASIC to pursue civil proceedings against the bank for issues arising from the Royal Commission. 

However, I do not think CommBank shares will be impacted too much. The bank indemnified KKK against all impacts from the Royal Commission in the purchase arrangement. 

Secondly, and far more exciting is the bank’s entry into the buy now pay later (BNPL) market. 

CommBank announced it was to launch Swedish private fintech, Klarna in Australia on 30 January. A plan later derailed by the COVID-19 outbreak. CommBank holds a 5.5% stake in Klarna, increased from its original 1.8% holding. The companies will jointly fund and have 50:50 ownership rights to Klarna’s Australian and New Zealand business. It is worth mentioning that Klarna is the originator of the BNPL approach and is currently the largest in the world. 

CommBank is the nation’s largest provider of digital payments services. This means the Klarna BNPL service can be immediately available across Australia. This is a significant threat to Afterpay Ltd (ASX: APT) as the dominant player in the Australian market. However, it will also threaten any other BNPL that has a service offering purely in Australia. 

Robust position

CommBank was the first Aussie bank to signal its intention to cut back on COVID-19 support by 30 June. CommBank will likely be the first of the majors to start to see loan defaults for those customers unable to pay. In addition, the bank is the largest provider of home loans and business loans in Australia. Nonetheless, it has already made a $1.5 billion provision to pay for defaults.

In addition, Colonial is more likely to increase earnings while managed as part of the core business of a private equity firm.

CBA shares are presently trading at a price to earnings (P/E) ratio of 12.4. At the time of writing, based on the current price, CBA shares have a trailing 12-month dividend yield of 6.27%. Moreover, while dividends are currently deferred, I cannot see the banks reducing or permanently cancelling dividend payments. It is the core reason why many funds hold the banks.

Foolish takeaway

I think our largest bank is good value for money right now. It has set itself up for growth in the near future and is managing its response to the coronavirus in a very fiscally responsible manner. At the current price I believe investors will see solid share price growth in the medium term, as well as securing a solid dividend payment once they recommence. 

More reading

• Could the Afterpay share price really be good value right now?
• ASX 200 rebounds 1.5%, Qantas drops on capital raising
• ASX banks told to dip into capital buffers to “support businesses and households”
• ASX 200 rebounds 1.1%: Big four banks charge higher, Qantas sinks after raising $1.4bn
• Why AMP, IOOF, Redbubble, & Westpac shares are charging higher

Motley Fool contributor Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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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