Having a spare $130,000 to invest in an ASX dividend portfolio is probably an unlikely scenario for most readers (as well as this writer). But that doesn’t mean it’s not a valuable thought exercise!

Building a portfolio of ASX dividend shares typically takes years, a lot of dedication and a lot of discipline. But it’s entirely achievable all the same.

So if this was my ASX investing goal, here’s how I would construct a $130,000 portfolio of ASX dividend-paying shares.

Macquarie Group Ltd (ASX: MQG) – $30,000

My first $30,000 would go to Macquarie shares. Macquarie is one of the best ASX financials in the current environment, in my view. Unlike the big four ASX banks, Macquarie’s earnings come from highly diversified streams, including from outside the country.

Traditional banking services like loans and mortgages only make up a small fraction of Macquarie’s total business. Much more instrumental is Macquarie’s well-regarded investment banking business, as well as its annuity-style asset management side, which I think are huge advantages in these uncertain times. 

On current prices, Macquarie is offering a trailing dividend yield of 4.15%, which normally comes partially franked. As such, I think Macquarie is a great financial company to start off our dividend portfolio.

WAM Research Ltd (ASX: WAX) – $40,000

WAM Research is actually a listed investment company (LIC), which means it primarily invests in other ASX shares rather than operating a business. But WAM Research has proven pretty deft at this, returning an average of 13.4% per annum (before fees) since 2010. 

The reason WAX shares are getting an oversize position in our hypothetical portfolio today is its massive dividend yield. On current prices, this LIC is offering a trailing yield of 7.22%, which typically comes fully franked.

Telstra Corporation Ltd (ASX: TLS) – $30,000

Telstra is a dividend stalwart and offers a compelling enough return on current prices (in my opinion anyway) to justify inclusion in a dividend portfolio.

Right out of the gate, Telstra is offering investors a fully franked 5.21% starting yield (including the special dividend Telstra pays). But I also think that the 5G network Telstra is investing heavily in right now will pay further dividends down the road (literally). I think this investment in the next-gen 5G technology will play out very well for this telco giant, but even if it doesn’t, there’s that healthy dividend to ease the pain!

Brickworks Limited (ASX: BKW) – $30,000

Brickworks is one of the oldest and proudest dividend shares on the ASX, in my view and well deserves a place in this dividend portfolio. Its core building materials business is a lucrative one for Brickworks, but it’s also very cyclical, which can be bad news for a dividend-paying company. Luckily, Brickworks nullifies this cyclicality by investing on other revenue streams, including real estate and a cross-ownership with dividend king Washington H. Soul Pattinson & Co Ltd (ASX: SOL).

This has enabled Brickworks to pay a dividend that has either been steady or grown for over 40 years. That’s some solid reliability, in my opinion. On current prices, Brickworks is offering a trailing dividend yield of 4.25%, which comes fully franked.

More reading

• Here are 2 ASX dividend shares with yields over 10%
• 3 ASX dividend shares I would buy to beat low rates
• How to reduce your work to part-time using ASX shares
• Here’s how I would put $10,000 to work on the ASX
• The latest ASX small caps broker picks to buy today

Motley Fool contributor Sebastian Bowen owns shares of Telstra Limited, WAM Research Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks, Macquarie Group Limited, Telstra Limited, and Washington H. Soul Pattinson and Company 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 How I would build a $130,000 ASX dividend portfolio right now appeared first on Motley Fool Australia.

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Last week saw a large number of broker notes hitting the wires once again. Three buy ratings that caught my eye are summarised below.

Here’s why brokers think investors ought to buy them next week:

Aristocrat Leisure Limited (ASX: ALL)

According to a note out of Goldman Sachs, its analysts have retained their buy rating but lowered their price target on this gaming technology company’s shares to $28.50. While the broker acknowledges that there is uncertainty in regard to how long it will take for its land based segment to recover from the pandemic, it believes it is better placed than its rivals due to its market leading suite of games. It also notes that it has a strong balance sheet, giving it the option to pursue acquisitions. I agree with Goldman Sachs and would be a buyer of its shares with a long term view.

Sonic Healthcare Limited (ASX: SHL)

Analysts at Citi have retained their buy rating and $32.50 price target on this healthcare company’s shares. According to the note, the broker believes Sonic Healthcare has a lucrative opportunity in the U.S. with COVID-19 testing. Even if it only wins a small share of the multi-billion dollar market, it suspects it could give its revenue and earnings a major boost. I think Citi makes some good points and Sonic Healthcare could be worth a closer look.

Volpara Health Technologies Ltd (ASX: VHT)

A note out of Morgans reveals that its analysts have retained their add rating but cut the price target on this healthcare technology company’s shares to $1.68. The broker made a small reduction to its price target after factoring Volpara’s recent $37 million capital raising into the equation. The proceeds will be used for general working capital purposes and to fund potential future acquisition opportunities. Overall, the broker believes Volpara is well placed for growth over the coming years and thus holds firm with its positive rating. I agree with Morgans and feel Volpara is a good option for investors looking for small cap exposure.

More reading

• Here’s how I would put $10,000 to work on the ASX
• Top brokers are urging you to buy this slumping ASX 200 stock next week
• Brokers name 3 ASX 200 shares to buy right now
• Where growth, income, and value investors can invest right now
• Why Aristocrat Leisure, Afterpay, Corporate Travel, and Sydney Airport are pushing 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 VOLPARA FPO NZ. The Motley Fool Australia has recommended Sonic Healthcare 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 Top brokers name 3 ASX shares to buy next week appeared first on Motley Fool Australia.

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I think that $1,000 can be enough to change your money mindset forever.

There are things holding a lot of people back. Maybe they don’t have the money confidence to start on the right path.

I believe it’s wrong to believe that you need some large amount of money to make a huge difference. Sometimes it’s more about a mental shift than requiring a $100,000 share portfolio to feel good.

$1,000 to help your money confidence

Before the coronavirus hit, many Aussies didn’t have $1,000 to be able to cover an emergency expense with its savings.  

Having money in the bank may not strike plenty of people as a necessary thing. Why have cash sitting there for emergencies if you’ve never had to experience living through an emergency? The problem is that emergencies don’t tell you in advance when they’re going to happen.

Having $1,000 always sitting there in a (high interest) bank account can give you a lot of confidence with your money. You’re able to ride through a problem if it occurs. Obviously having more savings would be even better, but one step at a time. You are freer to make the best decisions for your life. 

There are plenty of banks offering savings accounts like Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group (ASX: ANZ), National Australia Bank Ltd (ASX: NAB) and Bendigo and Adelaide Bank Ltd (ASX: BEN).

$1,000 to get your financial ball rolling

You don’t need $10,000 or $50,000 of money to start investing in shares. You can start building your share portfolio with just $1,000, or even $500. Share brokerage fees are so cheap these days.

Compound interest from shares can make you 10% a year whether you portfolio balance is $1,000 or $1 million.

You don’t need a huge deposit to start investing. You can build your money by investing a small amount now and invest more when things are safer and conditions are closer to normal.

What shares could be a good place to start? I think shares like Future Generation Global Invstmnt Co Ltd (ASX: FGG) and iShares S&P 500 ETF (ASX: IVV) could be very good long-term investments.

More reading

• Where to invest $1,000 in ASX ETFs today
• 3 ASX shares that I’d invest $1,000 into EVERY month
• Is Afterpay an ASX blue chip of tomorrow?
• 2 ASX 200 dividend shares to buy for income in 2021
• ASX 200 down 0.2%: Afterpay hits a record high, Aristocrat Leisure update disappoints

Motley Fool contributor Tristan Harrison 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 How $1,000 can be enough to change your money mindset appeared first on Motley Fool Australia.

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ASX 200 healthcare shares have had a rollercoaster ride in 2020. While the S&P/ASX 200 Index (ASX: XJO) is down 18.36% this year, the nature of the coronavirus pandemic has meant investors are snapping up healthcare companies like there’s no tomorrow.

Here are a couple of my top healthcare shares to buy for a good price today!

2 ASX 200 healthcare shares to buy today

I like the look of CSL Limited (ASX: CSL) shares right now. The biotech giant’s share price closed at $290.93 on Friday and boasts a $132 billion market capitalisation.

On the surface, that may seem expensive. However, I think we’ve seen some strong support for CSL shares at the $300 per share mark. Given the group’s size and demand for its products, the ASX 200 healthcare share could be in the buy zone.

Despite climbing higher in 2020, the CSL share price is down 11% since early April. That could mean now is a good time to buy in and hold a blue-chip share for the long-term.

Other than CSL, I think Polynovo Ltd (ASX: PNV) shares could be in the buy zone. Polynovo develops and manufactures polymers to assist with the treatment of burns and its share price has been flying in recent years.

In fact, the ASX 200 healthcare share is up more than 100% since 23 March and more than 3,300% in the last 5 years. 

Those are some strong growth numbers and there could be more on the way. The Aussie biotech group is going from strength to strength and posted record US quarterly sales in the March quarter.

The group’s NovoSorb Biodegradable Temporising Matrix (BTM) product has had success in a number of countries and received widespread praise from the medical community.

There’s still further market share for Polynovo to capture and a strong research and development pipeline could drive further growth for the ASX 200 healthcare share.

Foolish takeaway

ASX 200 healthcare shares could be good buy options in the COVID-19 environment. There are strong dividend and growth shares for savvy investors but you just have to know where to look…

More reading

• Have $500 to invest? Then buy these 5 ASX 200 shares immediately
• What to watch on the ASX 200 next week
• How to tidy up your super in just 10 minutes this weekend
• These were the worst performing ASX 200 shares last week
• Where to invest $1,000 in ASX ETFs today

Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. 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 Got $2,000? Here are 2 ASX 200 healthcare shares to buy today appeared first on Motley Fool Australia.

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Is it possible to get an ASX dividend share with a yield of more than 10% that isn’t a value trap?

Well, that’s the question we’ll be looking at today. When an ASX dividend share offers to pay you back your invested money in just dividends in 10 years or less, alarm bells might be ringing. After all, Westpac Banking Corp (ASX: WBC) technically still has a raw trailing dividend yield of 11.59% – yet no one believes that the ASX bank will pull that out of its hat in 2020, given it’s already ‘deferred’ its interim dividend payments.

But here are 2 ASX shares that I think can offer investors a yield of more than 10% this year!

Fortescue Metals Group Limited (ASX: FMG)

Fortescue shares have been on an absolute tear recently – even making a new all-time high of $14 just this week. Why? Well, because the price of iron ore – Fortescue’s raison d’être – has exploded this week, climbing very close to US$100 a tonne. Production shutdowns in the Brazilian mining industry (which is another massive exporter of iron ore) have resulted in a supply squeeze for iron. Since Fortescue has an extraction cost per tonne between US$12 and US$14, the company is a cash-printing machine at these levels.

That means it should be well placed to reward shareholders handsomely this year with dividend payments. Fortescue has a trialling dividend yield of 7.36% – or 10.51% grossed-up with full franking. If iron ore continues to stay at the current price, this yield might even go higher for Fortescue shareholders. 

WAM Research Limited (ASX: WAX)

WAM Research is another dividend powerhouse, but this share is actually a listed investment company (LIC) specialising in small- to mid-cap ASX growth shares. Some of its current holdings include TPG Telecom Ltd (ASX: TPM), Aristocrat Leisure Limited (ASX: ALL) and REA Group Limited (ASX: REA).

This LIC has been a stellar performer over the last decade, returning an average of 13.4% per annum since 2010. A fair chunk of these returns have hailed from dividend payments, with WAM Research increasing its dividend every year since 2008. 

On current prices, WAM Research shares are offering a raw dividend yield of 7.3% – which grosses-up to 10.43% with full franking credits. If you’re worried that this yield is unsustainable, consider this. WAM Research’s last interim dividend payment was 4.9 cents per share. The company had over 26 cents per share in its profit reserve at the end of last month, meaning this dividend looks well-covered for at least the next 2 years.

Foolish takeaway

Normally, when a company boasts a dividend yield of more than 10%, it’s a sign to run for the hills. But I think these 2 ASX dividend shares are exceptions to this rule and have the potential to be valuable income shares to hold in 2020 and beyond. 

More reading

• Top brokers name 3 ASX shares to sell next week
• How to make a $50,000 passive income with ASX shares
• ASX 200 drops 1% on Friday
• My 3 best ASX dividend shares to buy right now
• ASX 200 drops 0.4%, Chinese threat to Australian iron

Motley Fool contributor Sebastian Bowen owns shares of WAM Research 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.

The post Here are 2 ASX dividend shares with yields over 10% appeared first on Motley Fool Australia.

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Once again, a large number of broker notes hit the wires last week. Some of these notes were positive and some were bearish.

Three sell ratings that caught my eye are summarised below. Here’s why top brokers think investors ought to sell these shares next week:

Fortescue Metals Group Limited (ASX: FMG)

According to a note out of Citi, its analysts have downgraded this iron ore producer’s shares to a sell rating with an increased price target of $11.10. Citi has responded to a lift in iron ore prices by upgrading its earnings and dividends estimates for Fortescue. And while it notes that its 88 cents per share dividend estimate for FY 2021 implies a generous yield, it expects a meaningful decline in iron ore prices to lead to a sharp dividend cut in FY 2022. In light of this, it believes the company’s valuation is getting stretched now. The Fortescue share price ended the week at $13.58.

TechnologyOne Ltd (ASX: TNE)

Analysts at UBS have downgraded this enterprise software company’s shares to a sell rating but lifted the price target on them to $8.20. According to the note, TechnologyOne’s half year update fell a touch short of its expectations last week. As a result, the broker suspects it might be hard for the company to deliver on its full year expectations now. All in all, it doesn’t believe the company’s shares deserve to trade on such a high earnings multiple. TechnologyOne’s shares finished the week at $9.91.

Wagners Holding Company Ltd (ASX: WGN)

A note out of the Macquarie equities desk reveals that its analysts have retained their underperform rating and slashed the price target on this building materials company’s shares to 80 cents. The broker notes that the Supreme Court of Queensland has delivered its judgement on its pricing dispute with Boral Limited (ASX: BLD). While the orders will remain confidential for a couple of weeks, Macquarie doesn’t appear optimistic. In addition to this, Macquarie has concerns over Wagners’ outlook and thus remains bearish. The Wagners share price was trading at 82 cents at the close of play on Friday.

More reading

• Here are 2 ASX dividend shares with yields over 10%
• How to make a $50,000 passive income with ASX shares
• What to watch on the ASX 200 next week
• ASX 200 drops 1% on Friday
• ASX 200 drops 0.4%, Chinese threat to Australian iron

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 Top brokers name 3 ASX shares to sell next week appeared first on Motley Fool Australia.

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A $50,000 passive income sounds like a dream, but can you really achieve it with ASX shares?

How to make a $50,000 passive income with ASX shares

I think making an annual $50,000 passive income via ASX shares is very achievable, but it won’t happen overnight. $50,000 is a sizeable amount of money and it takes disciplined savings and savvy investing to deliver.

Sure, you could put all of your money into hot stocks like Altium Limited (ASX: ALU) and then sell your stake slowly, but that’s a risky strategy. If you’re going to retire and live off your investments, a diversified portfolio is the key.

Let’s assume we invest in a mix of ASX dividend shares. I like the look of Scentre Group (ASX: SCG), Fortescue Metals Group Limited (ASX: FMG) and Harvey Norman Holdings Limited (ASX: HVN) right now.

While dividend yields can be misleading at the moment, let’s assume these yields are constant for now. Scentre shares are yielding 8.46% while Fortescue and Harvey Norman are paying 7.35% and 11.22% respectively, at the time of writing.

This means an equally-weighted portfolio comprising these 3 ASX shares would deliver a yield of 9.01% per annum. Let’s say a 25-year-old investor starts with nothing and invests $10,000 per year until they’re 65.

If that 9.01% remains constant throughout their 40-year investing journey, their portfolio would be worth over $3 million by age 65. The yearly distributions would total a whopping $305,249 (before tax). That’s much more than $50,000 of passive income, but I wouldn’t necessarily bank on this. 

If you’re at or approaching retirement age, it’s unlikely you’ll want all of your money invested in ASX shares. Shares can offer great returns, but they also come with higher risk than safer investments like bonds and cash.

A blended portfolio, on the other hand, still has the potential to generate a $50,000 income from ASX shares whilst better protecting your net worth. And given we’re after $50,000, not $300,000, your real return could be much lower than 9% per annum while still achieving your goal.

Foolish takeaway

Clearly, our example investor’s scenario has been simplified down. But the fact is that compounding returns work and are the key to building a $50,000 income using ASX shares for your future retirement.

More reading

• Here are 2 ASX dividend shares with yields over 10%
• Top brokers name 3 ASX shares to sell next week
• Have $500 to invest? Then buy these 5 ASX 200 shares immediately
• How to reduce your work to part-time using ASX shares
• ASX 200 drops 1% on Friday

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Altium. The Motley Fool Australia has recommended Scentre Group. 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 How to make a $50,000 passive income with ASX shares appeared first on Motley Fool Australia.

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If you’re looking to invest $500 into the share market, then I would suggest you think long-term.

This is because brokerage costs will eat into your profits if you are constantly buying and selling. 

But which shares should you buy with this $500? I think the five ASX 200 shares listed below would be great options:

Altium Limited (ASX: ALU)

Altium is an electronic design software provider. I believe it is one of the best long term options on the ASX due to the Internet of Things boom. The rise of connected devices is driving increasingly strong demand for its Altium Designer software and shows no signs of slowing. In addition to this, it has other businesses, such as Octopart, that are growing quickly and supporting its growth.

BHP Group Ltd (ASX: BHP)

If you’re looking for exposure to the resources sector then I would pick BHP. This is due to its diversified, world class operations and favourable commodity prices. Overall, I believe it is well-placed to deliver a bumper profit result and return significant funds to shareholders again.

CSL Limited (ASX: CSL)

Another favourite of mine is CSL. Due to the quality and strong long term growth potential of both its CSL Behring and Seqirus businesses, I think this biotherapeutics giant could be a market-beater in the 2020s. And while its shares may appear expensive, this is almost always the case. Importantly, this hasn’t stopped its shares generating significant wealth for investors over the last decade.

Nanosonics Ltd (ASX: NAN)

Another option to consider is Nanosonics. It is a leading infection control specialist behind the industry-leading trophon EPR disinfection system for ultrasound probes. This product has a sizeable global market opportunity and I expect it to underpin strong earnings growth in the future. Supporting this growth will be the upcoming launch of new products, which are understood to have similar market opportunities.

Xero Limited (ASX: XRO)

A final share to consider buying is Xero. As the business and accounting software provider is quickly becoming the platform of choice for small and medium sized businesses across the globe, I believe it is well-positioned for strong long term growth. And while subscriber growth may be subdued during the pandemic, I expect a rebound once the crisis passes.

More reading

• How to make a $50,000 passive income with ASX shares
• What to watch on the ASX 200 next week
• How to tidy up your super in just 10 minutes this weekend
• These were the worst performing ASX 200 shares last week
• Where to invest $1,000 in ASX ETFs today

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 CSL Ltd., Nanosonics Limited, and Xero. The Motley Fool Australia owns shares of Altium. The Motley Fool Australia has recommended 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.

The post Have $500 to invest? Then buy these 5 ASX 200 shares immediately appeared first on Motley Fool Australia.

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