If I had $10,000 burning a hole in my pocket I’d want to invest it into ASX shares. But I’d only put my money into the best investment ideas.

The coronavirus has caused share prices to fall almost across the board. I think the falls are completely justified with some businesses – I’m not any more inclined to buy those just because they’re priced lower.

But with some ASX shares I think the business growth or share price fall represents very compelling value.

Pushpay Holdings Ltd (ASX: PPH) – $3,000

Pushpay is one of the few ASX shares that’s seeing its growth accelerate due to the ongoing crisis. It’s an electronic donation business which mainly services US churches. Its technology also allows videostreaming – very useful if people can’t attend their church.

Its FY20 result was impressive with earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) rising by 1,506% to US$25.1 million.

FY21 is expected to be another bumper year with EBITDAF guidance of US$48 million to US$52 million. This comes with higher profit margins and a good control on costs. It’s targeting over US$1 billion of annual revenue over the longer term.

WAM Microcap Limited (ASX: WMI) – $2,500

WAM Microcap is one of the best listed investment companies (LICs) in my opinion, it targets ASX shares with market capitalisations under $300 million at the time of purchase.

It was performing very strongly in normal times and once the falls stop I think the investment team will be able to pick up some opportunities.

The large dividend payments over time will be an attractive way to be rewarded as shareholders. If WAM Microcap can maintain its dividend through this period it offers a very attractive grossed-up dividend yield of 7.6%.

Brickworks Limited (ASX: BKW) – $2,500

ASX share investors sometimes have a habit of pricing something that’s temporary as permanent. The construction industry is probably going to have a bit of a tough time over the next six months. Not many projects are going to get started due to the ongoing impacts of the coronavirus.

But it’s not going to be like that forever in Australia and the US. Properties in cities and towns have continually been built for hundreds of years. A relatively short period of a year (or two) shouldn’t alter the long-term prospects of Brickworks.

It has a diverse building products portfolio that will be one of the first to get back into the swing of things because of Brickworks’ efficiency and low costs.

In the meantime, I’d invest in Brickworks for its reliable assets that continue to generate earnings and cashflow for Brickworks. The investments division and industrial property trust are very defensive for this environment.

For an ASX share, it has a very, very reliable dividend. It currently has a grossed-up dividend yield of 6.5%. It hasn’t cut the dividend for over 40 years.

Bubs Australia Ltd (ASX: BUB) – $2,000

Bubs is another high growth ASX share which has a very promising future. Its distribution agreements continue to improve, brand recognition is rising and it’s achieving higher profit margins.

The infant formula business is achieving very impressive revenue growth, particularly in China. It achieved a positive operating cashflow in the March 2020 quarter thanks to the growth of sales and control on costs. If it can continue to remain cashflow positive from here it has a less risky yet very promising future.

Whilst I’m not trying to think too far ahead, there are plenty of countries that Bubs can expand to.

Which ASX shares should you buy?

I like the long-term prospects of all of these ASX shares. Pushpay and Bubs have exciting growth stories, whereas Brickworks and WAM Microcap have diversified growing assets and they come with large dividend yields. I’d be happy to buy them all today. 

More reading

• How to build good wealth with small investments
• Revealed: 5 dividend shares for reliable income
• Why high yield dividend shares can be detrimental to your wealth
• Is it time to buy ASX small caps for your portfolio?
• The Pushpay share price is up 70% in 2020: Why I would still invest

Motley Fool contributor Tristan Harrison owns shares of WAM MICRO FPO. The Motley Fool Australia owns shares of and has recommended Brickworks, BUBS AUST FPO, and PUSHPAY FPO NZX. 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 shares I’d invest $10,000 into today appeared first on Motley Fool Australia.

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Here’s why I think every ASX dividend investor should own shares of Washington H. Soul Pattinson and Co Ltd (ASX: SOL).

‘Soul Patts’ (as it’s more easily known) is an ASX conglomerate that’s sometimes described as the ‘Berkshire Hathaway’ of the ASX. That’s because Soul Patts’ management follows a remarkably similar strategy to that of Berkshire’s famous chief Warren Buffett.

Buffett has made a name for himself by acquiring a diverse range of top-quality businesses that all sit within the Berkshire stable. The combination of these businesses results in a company that Buffett himself likes to describe as a ‘financial fortress’.

And that’s exactly what Soul Patts tries to emulate.

Some of the companies it owns shares of include phone-and-internet provider TPG Telecom Ltd (ASX: TPM), coal miner New Cope Corporation Limited (ASX: NHC), building supplies manufacturer (and part-time landlord) Brickworks Limited (ASX: BKW) and investment company BKI Investment Co Ltd (ASX: BKI). With this healthy cross-section of the ASX, I think Soul Patts is one of the best ways to get broad exposure to the Australian economy outside of buying an index fund.

But it’s the Buffett-esque long-term thinking and eye on the bigger picture that makes Soul Patts stand out, in my view. All of the businesses above pour dividends into Soul Patts every year and all have shown their worth over many years for the company.

An ASX dividend king?

Speaking of dividends, we now come to the crux of this company’s potential. Soul Patts has one of – if not the – best dividend records of any company on the ASX. It has paid a dividend every year since its listing in 1903 – think about that! Its shareholders have enjoyed payouts every year of the Great Depression and every year of the Second World War.

Not only that, but Soul Patts is also the only company on the ASX to have delivered a dividend increase every year since 2000. Anyone who bought shares in the year 2000 (for $3.50) is now getting an approximate yield-on-cost of 16.86% per annum!

One other ASX company – Ramsay Health Care Limited (ASX: RHC) – also held this record but lost it this year when it suspended its dividends, along with many other former ASX dividend heavyweights.

This elevates Soul Patts even higher in my eyes. It remains hands-down the best dividend share on the ASX for these reasons and leaves no argument (in my view) that this ASX share should be in every dividend investor’s portfolio.

More reading

• 2 quality ASX shares to buy for long-term growth
• Is it time to invest in shares or wait on the sidelines?
• Top ASX Dividend Stock Picks for May 2020
• Want to become wealthy? Do this one thing
• 3 of the best ASX dividend shares for income

Motley Fool contributor Sebastian Bowen owns shares of Ramsay Health Care Limited and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Ramsay Health Care 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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By now, almost all Aussies would be familiar with our record-low interest rates in one way or another. Whether it’s a mortgage costing a homeowner just 2.5% per annum or a term deposit paying 1%, low interest rates have certainly worked their way into everyday life.

But according to reporting in the Australian Financial Review (AFR), we might not be at the end of the road just yet.

But how is that possible given interest rates are at just 0.25% – one cut above zero?

Well, according to the AFR, the Reserve Bank of New Zealand (RBNZ) is in discussions with our ‘big four’ banks, including Commonwealth Bank of Australia (ASX: CBA), in “getting their systems ready” for the possible introduction of negative interest rates, which the RBNZ said, “will become an option” in early 2021.

The AFR quotes the RBNZ as stating: “The committee noted that a negative official cash rate will become an option in the future, although at present financial institutions are not yet operationally ready”.

What are negative interest rates?

If negative interest rates did become a reality across the ditch, our own Reserve Bank of Australia might be forced to follow suit.

Negative interest rates result in a strange situation where borrowers are actually paid to borrow and savers are penalised for saving. We have already seen this paradigm play out in recent years across a few countries, especially in Europe and Japan.

Aside from some odd consequences that we may see (such as cash hoarding), negative rates would probably be a tailwind for ASX shares. That’s because negative rates narrow the range of assets which investors can use to generate real returns to essentially just shares and property. As discussed earlier, bank accounts and term deposits are out, as would be government bonds. What would you rather, some shares of Woolworths Group Ltd (ASX: WOW) yielding 2.95% per annum or a term deposit that costs you 1%?

The answer’s obvious. Thus, if we did see negative rates in Australia or even New Zealand, I would expect demand for ASX shares to rise, with the possible exception of ASX banks.

Negative rates would be terrible for our banks – who will have to try and turn a profit by convincing customers to keep their cash with them for no reward or even under financial penalty, rather than under the mattress.

When a bank has to compete with the bedding for your cash, it’s not a good sign!

More reading

• ASX 200 up 0.35%, CBA gives Q3 update
• With Aussie wages set to fall, could ASX 200 shares follow?
• This is the best ASX big bank stock you can buy right now
• 4 top ASX shares to invest $4,000 into immediately
• How can the ASX 200 soar with rising unemployment?

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Woolworths 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.

The post Negative interest rates coming? Here’s what it would mean for ASX shares appeared first on Motley Fool Australia.

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The S&P/ASX 200 Index (ASX: XJO) ended the day up 0.35% to 5,422 points. The ASX 200 was down over 1% earlier in the day.

China and Australia’s dispute continues to grow. The Asian superpower reminded Australia how important it is to the Australian economy.

Commonwealth Bank of Australia (ASX: CBA) update

CBA, Australia’s largest bank, announced its third quarter update today in light of the coronavirus. .

The bank said that it has been giving widespread support for the economy.

It said that its March 2020 quarter showed cash profit was down 44% compared to the first half of FY20’s quarterly average.

Both the statutory net profit after tax and cash profit came in at $1.3 billion.

The major ASX 200 bank also announced that it had agreed to sell a 55% stake in Colonial First State for $1.7 billion.

Glittering day for Resolute Mining Limited (ASX: RSG)

Resolute Mining announced it has completed the second tranche of its $195 million capital raising at a price of $1.10 per share. The initial capital raising was launched in January 2020. Today it issued over 7.7 million shares to ICM Limited nominees.

The gold miner was one of the top performers in the ASX 200 today. The Resolute Mining share price went up over 5%.

Large ASX 200 movers

At the green end of the ASX 200 the Pilbara Minerals Ltd (ASX: PLS) share price rose around 11%, the Avita Medical Ltd (ASX: AVH) share price climbed 8.7% and the Mayne Pharma Group Ltd (ASX: MYX) share price grew over 5%.

At the red of the ASX 200 the Orocobre Limited (ASX: ORE) share price fell 7.7%, the Alumina Limited (ASX: AWC) share price dropped 6.6% and the Harvey Norman Holdings Limited (ASX: HVN) share price fell 5.7%.

More reading

• With Aussie wages set to fall, could ASX 200 shares follow?
• This is the best ASX big bank stock you can buy right now
• 4 top ASX shares to invest $4,000 into immediately
• How can the ASX 200 soar with rising unemployment?
• ASX 200 down 0.9%: CBA reveals $1.5bn COVID19 provision & gold miners charge higher

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Avita Medical Limited. The Motley Fool Australia has recommended Avita Medical 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.

The post ASX 200 up 0.35%, CBA gives Q3 update appeared first on Motley Fool Australia.

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