The Adairs Ltd (ASX: ADH) share price is soaring today after the ASX retailer delivered a trading update and provided FY20 sales guidance.

At the time of writing, Adairs shares have risen 16.43% and are up more than 370% since the bottom of the bear market in March.

In late March, Adairs announced the closure of Australian and New Zealand stores in response to COVID-19. The retailer flagged the reopening of stores in early May, which came with a trading update that revealed a 221% online sales surge.

What did Adairs announce today?

With all stores having been open for at least two weeks, Adairs provided a trading update this morning on its performance for the 24 weeks to 14 June 2020 (second half to date) and 50 weeks to 14 June 2020 (year to date).

For some context, New Zealand stores closed on 24 March and re-opened on 14 May. Meanwhile, Australian stores closed on 30 March and progressively re-opened from 7 May to 29 May.

Additionally, Adairs’ online businesses in New Zealand were closed from 25 March to 28 April due to government restrictions.

For the second half to date, Adairs’ brick and mortar stores recorded 5.3% like-for-like sales growth, while its online channel grew by 92.6%. These figures led to total like-for-like sales growth of 27.4%. Meanwhile, sales for the online-only Mocka brand were up 52.1% over the same period.

Turning to year-to-date numbers, like-for-like sales growth for Adairs stores came in at 3.5%. Adairs’ online channel posted 64% growth in the period, leading to 15.7% total sales growth for the Adairs business.

FY20 guidance

The retailer also provided FY20 sales guidance this morning as the end of its financial year quickly approaches.

The company expects full-year group sales to be in the range of $385 million to $390 million. This comprises sales guidance for the Adairs business of between $358 million and $362 million, and a 30-week contribution from Mocka in the range of $27 million to $28 million.

The online channel for the Adairs brand is expected to account for approximately 27% of Adairs sales.

Commenting on today’s update, managing director and CEO Mark Ronan said:

“Since Adairs stores re‐opened we have seen strong sales across both the store network and online channel as customers return for the instore service and experience they expect from Adairs. Pleasingly, Mocka’s sales growth has also continued at high levels.”

“Our omni channel strategy and focus on the home decorating and furnishing category has served us well during this period where our customers have spent significantly more time at home,” he added.

Adairs expects to announce its FY20 results on Wednesday, 26 August 2020.

More reading

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• Why Adairs, Nick Scali, SEEK, & Splitit shares are storming higher
• The Kogan share price makes it 5 times bigger than Myer
• Top brokers name 3 ASX shares to buy next week
• Insiders have been buying Medibank and this ASX share

Motley Fool contributor Cathryn Goh 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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From time to time I take a look through the rates offered for term deposits by the various banks. It never ceases to amaze me how low they are!

For retirees relying on term deposits to fund their retirement, this could pose a real challenge.

Furthermore, with typical blue chip shares like the big four banks deferring or cutting their dividends, it’s a passive income earner’s nightmare. It’s possible we’ll return to ‘normality’ soon and the big banks will be paying their juicy dividends once more. But in the meantime, many investors are being forced to look elsewhere for reliable dividend income. With that in mind, here are my thoughts on five dividend shares capable of putting term deposit rates (and potentially dividends) offered by the banks to shame!

Wesfarmers Ltd (ASX: WES)

Wesfarmers provided a  retail trading update to the market on 9 June 2020. The update reported positive sales results across the Bunnings, Catch and Officeworks businesses. The three retailers  delivered 2H20 to date sales growth of 19.2%, 68.7% and 27.8% respectively. COVID-19 restrictions have benefitted these businesses with more customers working, studying and undertaking DIY projects at home. 

Kmart and Target delivered 2H20 to date sales growth of 4.1% and -1.8% respectively. Unsurprisingly, these results were largely caused by a reduction in foot traffic across shopping centres due to restrictions. Having said that, the Target business had already been underperforming for some time. As lockdown restrictions continue to ease though, both foot traffic and sales momentum for Kmart and Target has improved. Furthermore, Wesfarmers announced in May its plans to overhaul the Kmart group by closing some poorly performing Target stores and replacing some others with Kmart.

Wesfarmers currently has a trailing dividend yield of 3.6% on its current share price of $42.55. This far exceeds the interest rates provided by banks on savings accounts and term deposits.

I believe Wesfarmers’ diversity provides it with strength and, in my view, income investors would do well by holding the conglomerate in their portfolios. 

AGL Energy Limited (ASX: AGL)

In its presentation to the Macquarie Australia Conference on 5 May 2020, AGL advised it had approximately $1 billion in cash and undrawn facilities, putting it in a strong and flexible financial position. Pleasingly, the company also has no bond debt refinancing until FY22.

In addition, customer account numbers are growing and the churn rate is on the decline. 

AGL provided guidance for FY20 with underlying profit after tax of $780 million to $860 million. This is despite the increase in customer debts and unanticipated operating costs from the lockdown. 

Electricity and gas are essential services. For this reason, despite its recent share price performance, I believe AGL will be able to continue paying dividends to its shareholders. 

A trailing dividend yield of 6.32% makes it especially attractive for income but also long-term investors as energy markets recover post-pandemic.

Aurizon Holdings Ltd (ASX: AZJ)

Aurizon is Australia’s largest rail freight operator. Having successfully executed a $1.3 billion debt refinancing and reconfirmed its FY2020 earnings guidance on 3 June 2020, Aurizon has no further financing requirements until 2023. This could make the group a real gem in an income investor’s portfolio.

Furthermore, Aurizon’s operations have continued across its three businesses (bulk, coal and network) with minimal interruption during the pandemic. 

Managing director and CEO Andrew Harding said:

”While the COVID-19 pandemic has had some impact to coal demand in Asia and on the Indian sub-continent, it has not been material to date to volumes and the Company’s earnings. Accordingly, we reiterate our underlying EBIT guidance of $880 to $930 million for FY2020.”

A trailing dividend yield of 5.46% without a material impact on earnings due to the virus could potentially provide a reliable income stream to investors.

Spark Infrastructure Group (ASX: SKI)

Spark Infrastructure owns and manages a portfolio of electricity infrastructure assets.

On 7 May 2020 at the Macquarie Investor Conference, Spark reconfirmed its FY20 distribution guidance of 13.5 cents per share. At the current share price of $2.13 this provides a dividend yield of 6.34%. This is on the back of strong cash flow from the company’s network businesses. As a result, the group could be well placed to continue distributing profits to its investors moving forward.

Spark Infrastructure is also shifting its focus to renewable energy to replace ageing coal power stations and help future proof the business.

Transurban Group (ASX: TCL)

Transurban is the owner and operator of toll roads across Australia and North America.

According to its 4 May 2020 Investor briefing, whilst Transurban saw noticeable declines in traffic numbers due to COVID-19 lockdowns, the group has seen improving traffic since the second half of April. The company did advise, however, that traffic levels remain sensitive to government announcements.

Pleasingly, Transurban has sufficient liquidity to meet capital requirements and debt refinancing obligations to the end of FY21. In addition, it raised $3.7 billion in debt to help strengthen its balance sheet. Furthermore, as lockdown restrictions continue to ease but the fear surrounding coronavirus remains, Transurban may benefit from increased traffic due to people avoiding public transport. 

For income investors, the group expects the 2H20 distribution will be declared in late June and paid in August 2020. The group has a trailing dividend yield of 4.15% for FY20 on current share price levels.

Foolish takeaway

While term deposits are considered to be safer investments than investing in securities, the interest rates currently offered by banks in real terms is approximately zero. 

For this reason, investors could consider the ASX shares above to potentially provide an income stream in these uncertain times.

More reading

• Why the Wesfarmers share is beating the ASX 200
• How the ASX 200 can help first home buyers save for a deposit
• 3 ASX dividend shares to buy to beat low interest rates
• Why you should top up your super before June 30
• Forget bank interest, try these ASX 200 dividend shares!

Motley Fool contributor Matthew Donald owns shares of Wesfarmers Limited. The Motley Fool Australia owns shares of Transurban Group and Wesfarmers 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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More reading

• Sydney Airport share price on watch after traffic update
• Where to invest for reliable dividend shares
• Why I would buy Telstra and these ASX 200 blue chip shares
• Why the Wesfarmers share is beating the ASX 200
• 3 quality ASX shares to buy now to get rich later

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The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price will be on watch today after the release of its latest traffic update.

What did Sydney Airport announce?

This morning the airport operators released its passenger traffic numbers for the month of May.

Once again, Sydney Airport’s terminals resembled a ghost town last month, with barely any passengers passing through its gates compared to previous times.

According to the release, the airport welcomed 62,000 domestic passengers through its gates in May. This is down 97.2% on the same period last year when over 2.2 million domestic travellers used its airport.

Unsurprisingly, it was even worse for its international terminal. Just 29,000 international passengers travelled through the airport last month. This is a 97.7% decline on the ~1.3 million passengers passing through its gates in May of last year.

What about year to date?

After a solid start to the year, the company’s year to date performance has been materially impacted over the last few months.

Year to date domestic passenger numbers are down 49.2% to ~5.7 million. Whereas international passenger numbers are 49.8% lower year to date at just over 3.5 million.

Combined, the airport has recorded a 49.4% decline in passenger numbers to ~9.2 million in 2020.

That’s a whopping 9 million less travellers than the same period last year. I feel this highlights just how hard things have been for the likes of Sydney Airport, Qantas Airways Limited (ASX: QAN), and Webjet Limited (ASX: WEB).

What now?

With social distancing restrictions easing and a number of state borders opening up, the travel market is now starting its recovery.

This will make June’s data arguably the most highly anticipated release out of Sydney Airport in some time.

Management wasn’t giving much away and once again stated: “We expect the downturn in passenger traffic to persist until government travel restrictions are eased.”

More reading

• Are these beaten down ASX shares in the buy zone?
• 3 ASX shares to buy for 2021
• 2 quality ASX 200 shares to buy for long-term growth
• Why I would buy Wesfarmers and these ASX dividend shares
• ASX 200 falls 2%, ASX travel shares drop heavily

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.

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Reliable dividend shares are hard to come by. The 4 major banks were always thought of as a reliable investment for income, right up to when they all deferred their dividends this year.

But as things are starting to become normal again, I believe these 4 great shares will provide reliable dividends, a great dividend yield, and a chance for share price growth.

Mining dividend shares

Not all miners pay dividends. In fact, the gold industry eschews them almost completely. St Barbara Ltd (ASX: SBM) is one of the highest paying of the large gold miners at a trailing 12 month (TTM) dividend yield of 2.68%.

Fortescue Metals Group Limited (ASX: FMG) pays one of the highest dividend yields of the large-cap mining companies. At the time of writing Fortescue has a TTM dividend yield of 7.14%. This is higher than iron ore rival, BHP Group Ltd (ASX: BHP) with a TTM of 5.97%. In addition, I believe Fortescue is currently selling at a good price anywhere under ~$15. 

Consumer discretionary

Harvey Norman Holdings Limited (ASX: HVN) currently has a TTM dividend yield of 5.97%. The company recently announced it would pay a special dividend of 6 cents a share on 29 June to any shareholder registered by 23 June. Aside from anything else, that is an additional payment of 1.7% on top of the regular dividend payments.

The company has seen its dividend payment increase year on year by around 9.4% over a 10 year period. In addition, it has a healthy 10-year average return on equity of 11.8%. Meaning it is pretty good at generating returns from its net assets.

Real estate dividend shares

Right now I really like Vicinity Centres (ASX: VCX) for a whole range of reasons. In particular, I think they did a good thing with their share placement recently. This helped them to reduce the company’s gearing from 34.9% down to 26.6%. In addition, it provided them with a cash and unused debt facilities war chest of $2.6 billion.

Be aware that they have deferred their current dividend due to the pandemic. However, the company has a history of reliable distributions and is tightly managed. At the time of writing Vicinity Centres had a TTM dividend yield of  10.16%.

The banks

The best dividend opportunity of the big 4 banks right now is Westpac Banking Corp (ASX: WBC). Although it has also deferred its decision on the current dividend, it had previously been a reliable dividend share.

At the time of writing Westpac is paying a TTM dividend yield of  9.62%. Moreover, while this company definitely has a few miles of bad road ahead of it, respected analysts have been saying it is undervalued. I believe it to be a very sound company with new management in place.

More reading

• Why the Wesfarmers share is beating the ASX 200
• How the ASX 200 can help first home buyers save for a deposit
• ASX 200 down 1.3%: Big four banks tumble, Afterpay tipped to go higher
• Where to invest $5,000 in an irrational market
• Next phase of bull market could see ANZ Bank outperform Afterpay

Motley Fool contributor Daryl Mather owns shares of Fortescue Metals Group Limited. 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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With so many quality blue chip shares to choose from on the Australian share market, it can be hard to decide which ones to buy.

To narrow things down I have picked out three blue chip ASX 200 shares which I think are standout buys. Here’s why I like them:

Goodman Group (ASX: GMG)

Goodman Group is an integrated commercial and industrial property group which owns, develops, and manages industrial real estate globally. I think it is positioned perfectly for growth over the long term thanks to some very smart investments over the last decade. These include gaining exposure to the structural tailwinds of the ecommerce market with properties leased to the likes of Amazon and DHL. Based on how quickly online shopping is growing, especially after the pandemic, these assets are likely to be in demand for a long time to come. I expect this to underpin solid earnings and distribution growth throughout the 2020s. I think this makes it a blue chip share to buy.

REA Group Limited (ASX: REA)

Although times have been hard for this property listings company this year because of the pandemic, I’ve been very impressed at the resilience of its business model. Despite a sharp drop in property listings, it was able to reduce costs and grow its profits during the third quarter. The good news is that trading conditions are improving as social distancing restrictions ease and listing volumes appear to be recovering. I expect this to lead to REA Group’s profit growth accelerating in FY 2021 and FY 2022.

Telstra Corporation Ltd (ASX: TLS)

A final blue chip share to look at buying is Telstra. I like the telco giant due to its T22 strategy, which is aiming to turn the company into a leaner and lower cost operation. In addition to this, the return of rational competition in the telco market, the easing of the NBN headwind, and its leadership position in 5G are other reasons to be positive. The latter is expected to be a key driver of growth over the next few years and could help underpin modest profit and dividend growth from FY 2022 onwards.

More reading

• Why the Wesfarmers share is beating the ASX 200
• 5 things to watch on the ASX 200 on Friday
• ASX 200 falls 0.9%, Afterpay share price hits new record
• Is the Cochlear share price in the buy zone now that it’s down 23%?
• Top brokers have just downgraded Carsales.Com and these outperforming ASX 200 stocks

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia has recommended REA 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 Wesfarmers Ltd (ASX: WES) share price is ahead of the S&P/ASX 200 Index (INDEXASX: XJO) year to date, over the past year, and over the past week. In fact, despite lockdowns and bushfires, the Wesfarmers share price is up by 4% year to date. 

Like JB Hi-Fi Limited (ASX: JBH) and Harvey Norman Holdings Limited (ASX: HVN), Wesfarmers found itself well-positioned for the lockdowns.

The brands boosting the Wesfarmers share

Officeworks’ sales performance, up to the end of May for 2H20, rose by 27.8% against the prior corresponding period. This is a major step up from the 11.5% growth in 1H20. Similarly, Bunnings has seen its sales performance for 2H20 increase, so far, by 19.2% versus the 5.8% rise in 1H20.

This is a significant increase likely due to the company’s customers continuing to spend more time working, learning and relaxing at home. In a performance update on 9 June, the company claimed Bunnings had seen growth across all Australian trading regions and product categories. Pretty impressive.

Wesfarmers secret weapon

There are 2 secret weapons fueling the performance of Wesfarmers shares. First is the online company they purchased last year, Catch. Catch followed in the footsteps of permission marketing pioneer site, Daily Candy. The initial newsletter was ‘Catch of the Day’. Today it has evolved into an online marketplace. 

Catch is not just an e-commerce site to sell products from K-Mart or Bunnings. It is trying to compete directly with Amazon.com, Inc. (NASDAQ: AMZN) or Kogan.com Ltd (ASX: KGN). Moreover, it sells products directly in competition with Kogan.

Catch saw its 2H20 sales performance so far improve by an astounding 68.7% against the previous corresponding period. In contrast, 1H20 reported a gross sales increase of 21.4%. 

Across all their retail operations, Wesfarmers have seen total online sales growth of 89%. 

Strong management

The Wesfarmers management team has made quite a few tough decisions in recent time. They sold down their stake in the Coles Group Ltd (ASX: COL) at a near all-time high share price. In addition, they took the decision to close loss-making Target stores and to refocus on K-Mart and acted swiftly to permanently close 7 small-format Bunnings stores during the half.

Foolish takeaway

Wesfarmers unintentionally holds a range of assets which were perfectly suited to the recent lockdown. It has also bought a company that places it directly in competition with Kogan for growing online sales.

Lastly, Wesfarmers management have shown the capacity to make hard decisions. These include, as mentioned, closing underperforming Bunnings formats, releasing capital from Coles for business growth and closing the door on underperforming Target stores.

More reading

• Where to invest for reliable dividend shares
• Why I would buy Telstra and these ASX 200 blue chip shares
• 5 things to watch on the ASX 200 on Friday
• ASX 200 falls 0.9%, Afterpay share price hits new record
• Is the Cochlear share price in the buy zone now that it’s down 23%?

Motley Fool contributor Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Wesfarmers 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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If you’re interested in building your wealth, then I believe that thinking long term is the best way to do it.

This is because by investing with a long time horizon, you can benefit from the power of compounding.

This is essentially earning a return on your return, which accelerates the process. It explains why $50,000 generating an annual return of 10% per annum would turn into ~$130,000 in 10 years.

With that in mind, I have picked out three ASX shares that I believe could provide strong returns for investors over the next decade and beyond:

BetaShares NASDAQ 100 ETF (ASX: NDQ)

I think the BetaShares NASDAQ 100 ETF is well worth considering. It provides investors with exposure to the 100 largest non-financial shares on the NASDAQ. This includes behemoths such as Amazon, Facebook, and Microsoft. As I believe the majority of the companies on this index have the potential to grow at a quicker rate than the global economy, I expect the ETF to provide investors with strong returns for many years to come.

NEXTDC Ltd (ASX: NXT)

Another ASX share I would suggest you look at is NEXTDC. It is a leading Data Centre-as-a-Service provider with a portfolio of world class centres in key locations across Australia. I believe the company is perfectly positioned for growth thanks to the structural shift to the cloud. Another positive is its recent $672 million equity raising, which will strengthen its balance sheet and fund its strategic expansion plans.

SEEK Limited (ASX: SEK)

I think this job listings company would be a top option for investors. While I’m a big fan of its ANZ business, I think its rapidly growing China-based Zhaopin business is the real reason to invest. In the first half Zhaopin contributed 47.8% of SEEK’s total revenue, compared with 25.6% by the ANZ business. Given how lucrative the China market is, I expect Zhaopin to underpin strong growth for many years once the crisis passes.

More reading

• 3 ASX shares I’d buy because of the online sales boom
• Will Xero shares and these 2 other ASX companies be portfolio staples by 2030?
• Looking to diversify your portfolio? Try these ASX ETFs
• Is the CSL share price a buy right now?
• Why these ASX shares could help you beat the market

Motley Fool contributor James Mickleboro owns shares of NEXTDC Limited and SEEK Limited. The Motley Fool Australia owns shares of and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended 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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