Charter Hall Long WALE REIT (ASX: CLW) shares had a strong finish to the week, jumping 5.1% higher to $4.97 per share. That was on the back of a strong full-year result headlined by a 5.2% jump in operating earnings.

Here’s why I think the coronavirus pandemic has created a solid case for Charter Hall Long WALE REIT shares.

What did the ASX REIT report on Friday?

I was pleasantly surprised by the full-year numbers for the year ended 30 June 2020 (FY20).

Operating earnings climbed 5.2% on the prior corresponding period (pcp) to $121.9 million. Statutory profit totalled $122.4 million with distributions to shareholders up 5.2% to 28.3 cents per share.

Based on Friday’s closing price of $4.97, that represents a tidy dividend yield of 5.7% per annum.

Net tangible asset per security climbed 9.3% to $4.47 while balance sheet gearing was a lowly 24.2%.

The Aussie REIT boasts a $3.6 billion property portfolio, up from $2.1 billion last year, following $1.4 billion of property acquisitions.

But the real reason I like the Charter Hall Long WALE REIT is, unsurprisingly, for its long weighted-average lease or “WALE” terms.

Why Charter Hall Long WALE REIT shares could be a buy

Understandably, investors are worried about Aussie real estate investment trusts (REITs) right now. After all, there aren’t many real estate sectors that are looking rock solid.

Retail, commercial, office and residential real estate all have their challenges. COVID-19 has been the trigger, but not necessarily the cause, of much of this instability.

For starters, Charter Hall Long WALE REIT shares provide the upside of high distributions. That’s good news given the uncertainty around rental income and the role of commercial landlords right now.

But I think the average lease term here is the key. The ASX REIT reported a portfolio WALE of 14.0 years, up from 12.5 years at 30 June 2019.

That means that rather than seeing a big impact from short-term movements, Charter Hall Long WALE REIT shares could actually outperform.

That’s because the ASX REIT already has long-term agreements in place with tenants locked in. On top of that, the COVID-19 impact has been relatively minor so far.

The REIT reported that small and medium enterprise (SME) tenants, those more at risk of negative impact, comprise just 0.4% of net rent.

Charter Hall Long WALE REIT also provided just 0.2% of rent relief to tenants in FY20, with FY20 guidance reaffirmed and delivered.

Foolish takeaway

I think a long average-weighted lease term and blue-chip tenants is good for the ASX REIT.

If you’re looking for dividend stability amid the short-term volatility, Charter Hall Long WALE REIT shares could be a good option.

More reading

• ASX 200 jumps 0.75%: Westpac tumbles on AUSTRAC update, Credit Corp surges

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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ASX reporting season is upon us. Every August, a large number of the companies on the ASX report their full year results. This allows investors to gauge performances over the past 12 months and get some insight into future performance.

This reporting season, however, is unlike any other. The effects of coronavirus will be apparent in many companies’ financial results. For most, the pandemic has had a negative impact. But for a few, it has driven sales and revenues to new heights. Here’s what to look out for during this week of ASX reporting season. 

What’s happening in ASX reporting season this week?

Monday 

The week starts with a bang and when Aurizon Holdings Ltd (ASX: AZJ) releases its full year report. Australia’s largest rail-based transport business, Aurizon has been fighting the ACCC in court over the latter’s decision to oppose Aurizon’s proposed sale of its Acacia Ridge Terminal. In June, Aurizon confirmed underlying earnings before interest, taxes, depreciation and amortisation (EBIT) guidance of $880 million to $930 million for FY20. 

Tuesday

On Tuesday, it will be time to take a look at the financial sector with Challenger Ltd (ASX: CGF) providing its results. The wealth manager was subject to volatile investment markets over the second half of FY20 which may impact on results. The Challenger share price is yet to recover from the March downturn, remaining nearly 60% down from its high for the year. 

Wednesday 

On Wednesday, we hear more from the financial sector with Magellan Financial Group Ltd (ASX: MFG) reporting. The Magellan share price fell on Friday despite the wealth manager reporting an increase in funds under management. Commonwealth Bank Bank of Australia (ASX: CBA) is also due to release its full year results. Investors are eager to see whether the bank will pay a final dividend, and if so, its size. 

Thursday

Come Thursday, it’s time to hear from AGL Energy Limited (ASX: AGL) and Breville Group Ltd (ASX: BRG). AGL has predicted full year profits will be in the upper half of its guidance range of $780 million to $860 million. The Breville share price hit a record high last week with the appliance maker reporting strong sales throughout the pandemic. 

Friday 

On Friday it’s the miners’ turn, with Newcrest Mining Limited (ASX: NCM) and Iluka Resources Limited (ASX: ILU) reporting. The Newcrest share price has recently hit all time highs off the strength of the gold price. Iluka saw its mineral sands revenue decline 16% in the half year to June compared to the prior corresponding period, reflecting the impact of COVID-19 on key markets. 

More reading

• Aurizon share price on watch after solid profit and dividend growth in FY 2020
• CBA and 2 more ASX 200 shares to watch this week
• ASX 200 Weekly Wrap: Surging commodity prices snap ASX 200’s losing streak
• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 next week

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 Challenger Limited. The Motley Fool Australia has recommended Aurizon Holdings 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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ASX dividend shares are a great way to build a beginner share portfolio. Coronavirus excepted, they are a good way to generate steady cash flow and provide flexibility with reinvestment.

Here are 3 ASX dividend shares that I think are solid buys for beginners.

What’s good about ASX dividend shares?

I think the “bird in the hand” theory is a good one. Basically, a dollar today in the form of dividends is better than an uncertain amount tomorrow in capital gains.

In Australia, ASX dividend shares also have another advantage: franking credits.

The current tax imputation scheme means that dividends receive favourable tax treatment. This effectively eliminates the risk of that money being taxed at the company level and at the individual level.

That’s good news for investors, particularly those in retirement, where franking credits can actually boost your income higher.

There is, of course, regulatory risk in the form of government tax changes but it’s still a big tick for ASX dividend shares right now.

BHP and 2 more top picks for a beginner portfolio

The first ASX share I’m watching is BHP Group Ltd (ASX: BHP). BHP shares are currently yielding 5.4% with a market capitalisation of $183.3 billion.

Iron ore prices are surging and a cyclical share like BHP is doing well right now. That means that dividends may fluctuate in the short-term but I’d expect long-term income to be quite reliable.

Another ASX dividend share I’d like to buy for a beginner portfolio is National Australia Bank Ltd (ASX: NAB).

Prior to COVID-19, NAB shares had a very tidy dividend yield even amongst the ASX banks. While distributions may not return to what they were, I think NAB will remain a reliable ASX dividend share for the long-term.

Given the strong link between the Big Four banks and the Aussie economy, I also think it’s a good bet for long-term stability.

Finally, it’s worth considering a broad market exchange-traded fund (ETF). Australian companies tend to have a higher payout ratio compared to their global peers, largely due to the favourable tax treatment.

That means a broad-market ASX ETF like BetaShares Australia 200 ETF (ASX: A200) could be worth a look.

This BetaShares ETF has a 12-month net distribution yield of 4.1% with a management fee of just 0.07% per year.

This is an easy option for exposure to many ASX dividend shares like BHP and NAB in one convenient investment.

More reading

• ASX 200 Weekly Wrap: Surging commodity prices snap ASX 200’s losing streak
• Top brokers name 3 ASX shares to sell next week
• 5 things to watch on the ASX 200 next week
• Here are a couple of safe and strong ASX dividend shares to buy
• Ready for the “80% stock market crash”?

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 Aurizon Holdings Ltd (ASX: AZJ) share price will be on watch on Monday after the release of the rail freight operator’s full year results.

How did Aurizon perform in FY 2020?

For the 12 months ended 30 June 2020, Aurizon delivered a 5% increase in total revenue to $3,064.6 million. This was driven largely by a strong performance by its Bulk business during the financial year.

The Bulk business posted a 21% increase in revenue to $608.8 million and a 102% lift in earnings before interest, tax, depreciation, and amortisation (EBITDA) to $110.1 million. This ultimately led to Aurizon reporting a 7% increase in total EBITDA to $1,467.6 million for FY 2020.

On the bottom line, the company posted a 12% increase in underlying net profit after tax to $531 million and a 28% lift in statutory net profit after tax to $605 million. The latter includes the profit on sale of Aurizon’s Rail Grinding business.

Underlying earnings per share came in 15% higher at 27.2 cents, which allowed the Aurizon board to increase its full year dividend by the same margin. The company’s final dividend will be 13.7 cents per share, which lifts its full year dividend to 27.4 cents. This dividend will be 70% franked and represents 100% of its underlying earnings for the fifth year in a row.

In addition to its dividend, Aurizon will be returning funds to shareholders via buybacks. After buying back $400 million of shares in FY 2020, it will push ahead with a new $300 million on market share buyback during the current financial year.

“No material impact as a result of the pandemic.”

Aurizon’s Managing Director and CEO, Andrew Harding, revealed that the company’s operations have not been impacted meaningfully by the pandemic.

He commented: “Despite the emergence of COVID-19 in the second half of FY2020, the Company has delivered a solid operational and financial performance with no material impact as a result of the pandemic.”

“I am proud of the outstanding efforts of our employees during this very challenging time. As an essential transport provider to the Australian economy we have provided safe, reliable services to our customers and continued to support regional communities where our people live and work,” he added.

Outlook.

Aurizon is expecting its FY 2021 underlying EBIT to be in the range of $830 million to $880 million, representing a year on year decline of 3.2% to 8.7%.

This assumes flat volumes in the Coal business of 210-200mt, based on the current view of COVID-19 impact on steel demand. It also assumes a QCA-approved volume increase of 5% to 239 million tonnes, lower CQCN volumes due to COVID-19’s impact on coal demand, operational efficiency improvements, and redundancy costs.

More reading

• It’s ASX reporting season! Here’s what to watch out for this week
• Top broker picks the cheapest ASX stocks to buy today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Aurizon Holdings 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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Australian debt buyer Credit Corp Group Limited‘s (ASX: CCP) share price surged 21.8% in July, closing the month at $18.98 per share. That compares to a 0.5% gain from the S&P/ASX 200 (INDEXASX: XJO).

Like most shares on the ASX, and indeed around the globe, the Credit Corp share price was savaged during the COVID-19 driven panic selling. The company’s shares fell a stomach-churning 83% from 20 February before bottoming on 23 March.

From its 23 March trough, Credit Corp’s share price rebounded strongly, gaining a massive 204% by the time the closing bell rang on 31 July.

Yet even that huge share price surge wasn’t enough to recoup all of 2020’s losses, with the company’s shares closing down 39% from 2 January through to the end of July.

What does Credit Corp do?

Credit Corp Group is Australia’s largest debt buyer and collector, providing financial services in the credit-impaired consumer segment. The company operates two key divisions: debt buying and lending.

Its core business is debt buying, in which Credit Corp purchases defaulted consumer debts from major banks, finance companies, telcos and utility providers across Australia, New Zealand and the United States. From there, Credit Corp works with these consumers to develop payment plans. On the lending side, Credit Corp provides consumer loans through brands such as Wallet Wizard and ClearCash.

Founded in 1992, Credit Corp shares have been listed on the ASX since 2000.

Why did Credit Corp’s share price rocket in July?

As coronavirus lockdowns see increasing numbers of households and businesses struggling to meet their debt payments, Credit Corp’s debt recovery model is in a unique position to potentially benefit. And Credit Corp’s July share price surge appears to back this theory.

On 28 July, Credit Corp announced its net profit after tax (NPAT) had improved 13% to reach $79.6 million before adjustments. Those adjustments, however, were sizeable, coming in at $64.1 million of impairments, bringing its adjusted NPAT to $15.5 million.

The company also stated that economic uncertainty from pandemic-related slowdowns had left its customers hesitant to commit to longer-term debt repayment agreements after March. However, additional fiscal and monetary stimulus from the Reserve Bank of Australia and government could see more clients prioritise their debt repayments.

Credit Corp’s share price also likely received a welcome nudge higher at the end of July when Morgans’ analysts retained their add rating and lifted their price target to $19.10 per share.

On Friday 7 August, Credit Corp’s share price closed at $17.82.

More reading

• ASX 200 Weekly Wrap: Surging commodity prices snap ASX 200’s losing streak
• These were the worst performing ASX 200 shares last week
• These were the best performing shares on the ASX 200 last week
• ASX 200 down 0.4%, Credit Corp and Temple & Webster impress
• Credit Corp share price jumps 13%, should you invest?

Motley Fool contributor Bernd Struben 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 S&P/ASX 200 Index (ASX: XJO) roared back to life last week as it gained 1.3% to close above 6,000 points. Several beaten-down ASX 200 shares made strong gains while tech and gold sectors continued to soar.

Last week, I was watching AMP Limited (ASX: AMP), Super Retail Group Ltd (ASX: SUL) and St Barbara Ltd (ASX: SBM).

The AMP share price fell 2.1% in another tough week for shareholders. However, Super Retail and St Barbara shares jumped 3.7% and 5.0%, respectively.

It’s a big week ahead as the August earnings season really kicks into gear. One of the biggest names that I’ll be watching this week is Commonwealth Bank of Australia (ASX: CBA).

Find out why I’ve got my eye on CBA and 2 other ASX 200 shares in the week ahead.

CBA and 2 other ASX 200 shares to watch this week

Let’s start with the big movers and shakers reporting this week. CBA shares will be worth keeping an eye on as the bank reports its full-year results on Wednesday.

This will be the first real opportunity for investors to gauge the impact of the coronavirus pandemic on the banks and the economy. I think that makes CBA a must-watch ASX 200 share over the next week or so.

Also on my watchlist this week is Newcrest Mining Limited (ASX: NCM). The ASX 200 gold share has had a strong 2020 with Newcrest shares climbing 21.0%.

I think Newcrest’s full-year result on Friday makes the Aussie miner worth watching. Global gold prices continue to surge to new record highs which pave the way for a bumper earnings result.

Outside of reporting season, I am watching Corporate Travel Management Ltd (ASX: CTD) shares.

We saw something of a resurgence in beaten-down ASX 200 shares this week. That included the Corporate Travel share price rocketing 15.1% higher.

That’s despite tightening restrictions across the country which would seem to be bad for the travel industry.

I think it’s something of a bull trap driven by speculative investors so I will be keeping an eye on Corporate Travel shares this week.

More reading

• It’s ASX reporting season! Here’s what to watch out for this week
• Results: GPT share price on watch as net profit falls 247%
• ASX 200 Weekly Wrap: Surging commodity prices snap ASX 200’s losing streak
• 5 things to watch on the ASX 200 on Monday
• Top brokers name 3 ASX shares to buy next week

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Super Retail 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.

The post CBA and 2 more ASX 200 shares to watch this week appeared first on Motley Fool Australia.

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The GPT Group (ASX: GPT) share price is one to watch this morning after the Aussie real estate investment trust (REIT) reported a 247.2% drop in half-year net profit.

Why is the GPT share price on watch?

Net profit after tax for the half-year ended 30 June 2020 (1H20) fell 247.2% lower to total a $519.1 million loss.

However, the Aussie REIT did announce an interim distribution of 9.3 cents per stapled security, expected to be paid on 28 August.

Funds from Operations (FFO), a key metric for REIT earnings, fell 23.3% from 1H19 numbers to $244.5 million. That’s despite FFO from GPT’s Office and Logistics segments climbing 0.9% and 12.8%, respectively.

However, the big drag on earnings was the REIT’s Retail arm which saw FFO plummet 49.7% lower to $79.2 million.

GPT’s adjusted FFO, taking into account maintenance capex and lease incentives, fell 18.6% to $197.1 million.

The GPT share price will be one to watch in early trade as investors consider the 9.3 cent interim distribution, down 29.1% from 1H19.

GPT reported a total portfolio valuation of $14.41 billion, down from $14.85 billion as at 31 December 2019 (FY19).

The Retail portfolio ($5.70 billion) slumped in value while Office and Logistics portfolios edged higher on FY19 numbers.

GPT’s occupancy numbers also climbed higher during the last 6 months. Portfolio occupancy came in at 98.1%, up from 96.5% in December 2019.

That’s despite Retail and Office occupancy falling to 98.0% and 94.4%, respectively. The Logistics portfolio was again a strong performer with occupancy rocketing from 94.4% to 99.8% as at 30 June.

GPT’s weighted average lease expiry (WALE) totalled 4.9 years, down from 5.0 years in FY19. The group’s weighted average capitalisation rate edged 5 basis points higher to 5.00% during the half-year.

How has COVID-19 impacted on earnings?

Clearly, the coronavirus pandemic has had an impact on GPT’s earnings and the GPT share price.

Centre sales growth in GPT’s Retail portfolio from March to June varied between -21.3% to -59.0% per month.

Positively, the percentage of stores opened recovered to 91% in June compared to just 36% in April.

Despite some headwinds for retail, GPT’s percentage of rent collected climbed to 53.3% in June compared to just 25.8% in April.

GPT’s net asset valuations were also revised downwards due to the pandemic which contributed to a 300 basis point jump in net gearing to 25.1%. This is at the low end of the REIT’s target range of 25% to 35%.

Foolish takeaway

The GPT share price will be one to watch in early trade after this morning’s result.

Shares in the ASX REIT are down 32.5% for the year as investors have sold out of many real estate shares.

By comparison, the S&P/ASX 200 Index (ASX: XJO) is down 10.3% in 2020 as at Friday’s close.

More reading

• CBA and 2 more ASX 200 shares to watch this week
• ASX 200 Weekly Wrap: Surging commodity prices snap ASX 200’s losing streak
• 5 things to watch on the ASX 200 on Monday
• Does it ever make sense to access your super early?
• Is this the right time to be investing in the share market?

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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