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The gold price has been a quiet achiever over the year so far. While most investors’ attention has been focused on the recovery of the S&P/ASX 200  (INDEXASX: XJO) since the market bottom on 23 March, the gold price has also been climbing. At March’s low, the yellow metal was priced around US$1,478 an ounce. Today, that same ounce will set you back US$1,778 (which is more than a 20% bump). Just 2 days ago, gold hit $1,787 an ounce — it’s the highest price since 2011’s all-time high of $1,917.90.

Why has the gold price been climbing?

Gold is usually viewed as a ‘safe haven’ asset due to its physicality, scarcity, and former role as a monetary base. The coronavirus pandemic has created an almost perfect environment for gold to flourish in this role in recent months. Further, investors worry about the consequences of central banks using ‘quantitative easing’ (QE) to assist their economies through the crisis. QE is viewed by many people as ‘money printing’. This is leading to fears of an inflationary investing environment in the coming years. Last month, I wrote about how the ultra-rich are hoarding gold for this very reason.

How can you invest in gold?

There are 3 conventional ways of investing in gold:

1. Buying physical gold bullion
2. Invest in a gold miner
3. Buy gold through an exchange-traded fund (ETF).

Buying physical bullion can be unattractive to investors due to storage and transportation costs, so we’ll leave this out of the discussion.

That leaves ETFs or ASX gold miners for your perusal.

Advantages of gold ETFs

A gold ETF is an easy way to invest in gold because the fund manager buys and stores the gold on investors’ behalf, usually in a bank vault or other secure location. An ASX example is the ETFs Metal Securities Australia Ltd (ASX: GOLD).

Gold ETFs are an easy choice, as they will usually mirror the returns you will see in the gold price. This will, of course, be adjusted for currency fluctuations. But there are a couple of drawbacks. Gold (as an unproductive asset) gives off no yield, so you can’t generate cash flow unless you sell your units. Also, the gold still has to be stored and guarded, which means you will pay a fee to the ETF for the privilege.

Advantages of ASX gold miners

A gold miner is another popular way of gaining exposure to gold. As a gold miner is a company, you, as a shareholder, indirectly ‘own’ any gold the company mines. And as a company is (hopefully) profitable, you can also receive a yield on your investment through dividend payments. As an example, Newcrest Mining Limited (ASX: NCM) is the largest ASX gold miner and currently offers a trailing dividend yield of 1%.

But the good news for a gold miner is that it can deliver returns that exceed the gold price movements. If a company’s cost to mine an ounce of gold is US$1,000, and gold is selling for $1,500 an ounce, the company makes a profit of $500 per ounce. But if gold prices rise to US$2,000 an ounce, your investment just doubled its profitability, even though gold ‘only’ rose 33%.

Of course, this works in reverse too. Meaning that a gold miner is effectively a ‘leveraged bet’ on gold prices. There are also other concerns to worry about with a miner including how well the company is run and the debt it employs.

Foolish takeaway

A gold miner can be a lucrative way to gain exposure to gold. But it’s also riskier than just owning physical bullion or investing in an ETF. As such, if exposure to gold is important to your investing philosophy, I think most retail investors are best served by an ETF.

More reading

• The Webjet share price is dividing analysts even as it becomes a likely takeover target
• These were the best performing ASX 200 shares last week
• These were the worst performing ASX 200 shares last week
• 2 dirt-cheap ASX shares to buy next week
• ASX 200 closes 0.4% higher, Cochlear share price up 6%

Motley Fool contributor Sebastian Bowen owns shares of Newcrest Mining 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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The prospects for dividend stocks may prove to be somewhat challenging in the short run. After all, risks such as political uncertainty in the United States and Europe, as well as the potential for a rise in coronavirus cases later this year, could provide difficult trading conditions for many businesses.

However, those risks mean that many companies now trade on low valuations that could lead to high returns in the long run. Buying them now instead of other popular assets could boost your financial position over the coming years.

Bargain dividend stocks

The low valuations of dividend stocks is a key part of their appeal at the present time. They appear to offer wide margins of safety in many cases that could translate into improving returns in the long run.

A strategy of buying high-quality companies while they offer wide margins of safety has been highly profitable for many investors in the past. Value investors such as Warren Buffett have been able to purchase stocks when risks are relatively high and their prices are reflective of weaker investor sentiment. Over time, the stock market has always recovered from the various risks it has faced to produce high single-digit returns over the long term.

Through buying a diverse range of dividend stocks today, you can access low valuations and high yields that could lead to attractive total returns as the world economy recovers.

Income opportunities

Dividend stocks have been a popular means for income-seekers to generate a passive income since the global financial crisis. Lower interest rates have caused other income-producing assets, such as cash and bonds, to become a less viable means of producing a worthwhile passive income. Therefore, many investors have focused their capital on dividend shares when they would normally have also held cash and/or bonds in the past.

This situation is likely to be prolonged by the recent market crash. Policymakers across many large economies are set to remain supportive of the global economy’s growth prospects during what is proving to be a hugely damaging period following the pandemic. Rising unemployment and weaker GDP growth may encourage sustained low interest rates that make dividend stocks one of the few means of generating an above-inflation income return over the coming years.

Dividend reinvestment

The past performance of equities suggests that buying dividend stocks could increase your chances of generating market-beating returns. A large proportion of the stock market’s total returns have been derived from the reinvestment of dividends. This trend could persist in the coming years, as the continued payment of generous dividends may provide compounding opportunities for investors.

Therefore, even if you do not desire a passive income today and are looking for capital growth over the coming years, buying a selection of dividend stocks could help you to achieve your financial goals.

More reading

• The Webjet share price is dividing analysts even as it becomes a likely takeover target
• Another stock market crash may be ahead. I’d take these 3 steps to get rich from it
• How I’d invest in this stock market crash to make a passive income
• 3 of the best ASX growth shares to buy for the 2020s
• 3 very reliable dividend shares I plan to pay for my retirement

Motley Fool contributor Peter Stephens 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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There are many reasons why the Webjet Limited (ASX: WEB) share price will be in the spotlight in FY21 as it emerges from the COVID-19 baptism of fire!

The online travel agent will likely keep investors on the edge of their seats as its one of the most divisive stocks on the S&P/ASX 200 Index (Index:^AXJO) and could be a star player in mergers and acquisitions (M&As).

Of course, Webjet isn’t the only one in the travel sector to be hit hard by the coronavirus outbreak.

The Flight Centre Travel Group Ltd (ASX: FLT) share price and Qantas Airways Limited (ASX: QAN) share price have copped a beating, but it’s Webjet that’s splitting the experts.

It seems Flight Centre and Qantas are easier calls. Brokers are overwhelmingly recommending investors sell Flight Centre and buy Qantas, according to data on Yahoo Finance.

Consensus divided over Webjet

But in the case of Webjet, they are equally split between “buy” and “hold or sell” after the group received a €100 million ($162 million) cash injection through the issue of convertible notes.

The key point of contention is the uncertainty over when state and international borders will reopen, even though Webjet bought itself time through the convertible notes and the emergency $346 million capital raising in April.

A bull’s view

UBS is a bull when it comes to Webjet. The broker upgraded its price target to $5.35 from $3.75 a share and reiterated its “buy” recommendation on the stock on Friday.

“A high degree of uncertainty still remains around the travel market recovery, which will likely create a more volatile share price in the short-term,” said the broker.

“However, we continue to believe the high quality, well-capitalised players like WEB will take share and potentially acquire good businesses at discounted prices.”

Better placed than its peers?

UBS is feeling confident about Webjet’s future as the group aims mainly at leisure travellers who can easily substitute locations for holidaying. State border restrictions are lifting bar Victoria, but even then, all states are likely to allow border crossings in the not too distant future.

Further, there’s talk that Australia and New Zealand may form a travel bubble by September and this will open another market for Webjet. If travellers can’t go to Bali, they can head to Cairns or somewhere in New Zealand.

A bear’s view

However, some brokers like Morgan Stanley aren’t so sure. The extra cash from the con notes may give Webjet ammunition to make an opportunistic acquisition or two (so says management), but Morgan Stanley is taking a dim view of the move.

“Talk of meaningful M&A [merger and acquisition] following a c. 150% dilution event when cash burn is still close to peak levels seems optimistic,” said the broker.

“We feel that risks around receivables, working capital unwind and prolonged disruption are the main issues, and that balance sheet protection is the priority.”

Morgan Stanley prefers the Corporate Travel Management Ltd (ASX: CTD) share price over Webjet.

Webjet a takeover target?

As an aside, it’s also worth noting the hunter could be the hunted. Takeover speculation for Webjet was running rife in late 2019.

One has to wonder if potential bidders could come out of the woodwork amid the chaos, especially now that Webjet is cashed up.

Stranger things have happened!

More reading

• These were the best performing ASX 200 shares last week
• These were the worst performing ASX 200 shares last week
• 10 more top broker ASX share picks for FY21
• 2 dirt-cheap ASX shares to buy next week
• ASX 200 closes 0.4% higher, Cochlear share price up 6%

Motley Fool contributor Brendon Lau owns shares of Webjet Ltd. Connect with me on Twitter @brenlau.

The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and 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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A number of risks currently face investors that could cause another market crash over the coming months. For example, there could be a second wave of coronavirus across many of the world’s major economies. There may also be rising trade tensions between the United States and China that cause investor sentiment to weaken.

Therefore, now could be the right time to focus your capital on high-quality shares that have a higher chance of surviving an economic downturn. Through taking a long-term view, and keeping some cash on hand, you could benefit from another stock market crash.

Holding cash in a market crash

Having some cash available during a market crash can be highly beneficial to long-term investors. It provides peace of mind so that you can pay for unexpected costs at a time when job security may be low. It also means that you are in a position to capitalise on lower valuations across the stock market.

Clearly, holding large amounts of cash for the long term is unlikely to produce high returns. But, at a time when the prospects for the world economy are uncertain, ensuring you have liquidity within your portfolio could be a major advantage should stock prices become more attractive over the coming months.

High-quality stocks

High-quality businesses may be in a better position than their industry peers to survive another market crash. For example, companies with solid balance sheets that contain little amounts of debt may be under less pressure to deliver sales and profit growth on a relative basis. Likewise, companies with wide economic moats may be less affected by a period of weaker growth for the world economy.

Furthermore, high-quality businesses may be able to take advantage of weak operating conditions to strengthen their competitive positions. For example, they may be able to take market share from their peers to improve their profit growth potential over the coming years. This could aid their share price performances, and boost your portfolio returns.

A long-term view

A market crash can cause investors to panic about paper losses within their portfolio. However, a loss is not realised until a stock is sold. As such, holding your stocks for the long term could be a means of allowing them to recover from short-term declines in their valuations.

Similarly, when buying stocks it could be a sound move to have modest expectations about their prospects over the short run. The challenging outlook for the economy means that many stocks may struggle to post improving levels of profitability. However, with the world economy and the stock market having strong track records of recovery over the long run, adopting a buy-and-hold strategy could allow you to benefit from improving performances over the coming years.

More reading

• 3 reasons why I’d buy dirt-cheap dividend stocks right now
• The Webjet share price is dividing analysts even as it becomes a likely takeover target
• How I’d invest in this stock market crash to make a passive income
• 3 of the best ASX growth shares to buy for the 2020s
• 3 very reliable dividend shares I plan to pay for my retirement

Motley Fool contributor Peter Stephens 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 Another stock market crash may be ahead. I’d take these 3 steps to get rich from it appeared first on Motley Fool Australia.

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Making a passive income has become increasingly difficult since the start of 2020. Continued low interest rates and challenging trading conditions mean there are fewer opportunities to earn a sound income return than there were even just a handful of months ago.

However, by focusing your capital on companies with defensive characteristics and affordable dividends, you could generate a worthwhile income return over the long run. It could improve your financial prospects and enable you to enjoy a greater degree of financial freedom.

Passive income prospects

With interest rates likely to remain at low levels over the medium term as policymakers seek to support the economy, making a passive income from assets such as cash and bonds may become more difficult. They may be unable to provide a sufficient return on your capital, and may even reduce your spending power if their returns lag inflation.

Therefore, buying dividend stocks could be the most worthwhile means of obtaining an income return over the coming years. Even though stock prices could be volatile over the coming months, weak investor sentiment may mean that the yields on offer across many stock market sectors are highly attractive relative to other income-producing assets. By purchasing a diverse range of high-yielding stocks, you could generate a much higher income return than that available through other mainstream assets.

Defensive characteristics

While some companies have decided to reduce or postpone their dividend payments over recent months, others continue to offer an appealing passive income. They often include businesses with defensive characteristics, whereby their business models are less correlated with the wider economy’s performance than many of their index peers.

For example, companies operating in the utility and consumer goods sectors may be less impacted by coronavirus than businesses in the retail and travel & leisure industries. As such, buying companies with business models that are less likely to be impacted by a slowdown in global GDP growth could be a means of obtaining a solid income return after the recent market crash.

Affordable dividends

Buying stocks that have affordable dividends could be another means of obtaining a solid passive income at the present time.

Many businesses are likely to experience slowing demand for their goods or services as factors such as rising unemployment and weak consumer confidence take hold in many of the world’s major economies. If they have dividends that were previously very affordable, in terms of being easily covered by net profit over the past few years, they may be less likely to cut shareholder payouts in response to a period of weaker profitability.

Therefore, by assessing the affordability of a company’s dividend, you could build a more robust income stream in what may prove to be a challenging period for income-seeking investors.

More reading

• 3 of the best ASX growth shares to buy for the 2020s
• 3 very reliable dividend shares I plan to pay for my retirement
• 3 top ASX dividend shares I would buy next week
• Here are 3 ASX COVID-19 success stories
• These were the best performing ASX 200 shares last week

Motley Fool contributor Peter Stephens 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 I’d invest in this stock market crash to make a passive income appeared first on Motley Fool Australia.

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I’m a big fan of growth shares and feel very lucky to have a large number to choose from on the Australian share market.

But with so many to choose from, it can be hard to decide which ones to buy.

To narrow things down, I have picked out three exciting ASX growth shares that I believe could generate outsized returns for investors over the 2020s:

Bubs Australia Ltd (ASX: BUB)

The first growth share to look at is Bubs. It is a goat’s milk-focused infant formula and baby food company which has a growing footprint online in China and in supermarkets and pharmacies throughout Australia. The latter in particular has been boosted materially in recent months with increasing shelf space at major supermarkets. I believe this and its expansion into cow’s milk infant formula are likely to lead to its sales growth accelerating in FY 2021. Another positive is that the company appears to have now reached a scale which will make its operations more and more profitable over the coming years. As a result, I think the Bubs share price could charge notably higher over the next decade. 

Pushpay Holdings Group Ltd (ASX: PPH)

Another ASX growth share that I think has enormous potential is Pushpay. It is a donor management platform provider for the faith sector. It looks well-positioned for growth thanks to the shift to a cashless society and its leadership position in a church market which is rapidly embracing digital transformation. Management appears very confident in its future prospects and has set itself a target to win a 50% share of the medium to large church market in the future. This represents a US$1 billion revenue opportunity and is many times greater than its FY 2020’s revenue of US$127.5 million. If it delivers on this, I believe Pushpay’s shares could provide market-beating returns for investors in the future.

Xero Limited (ASX: XRO)

A third ASX growth share to consider buying is Xero. Although this cloud accounting software company had a sizeable 2.285 million subscribers at the end of FY 2020, I still believe this figure can rise materially in the future. Especially given how it estimates that less than 20% of the global English-speaking target market is using cloud-based accounting software at present. Combined with price increases, its high retention rate, and the benefits of scale, I expect this to lead to above-average earnings growth over the next decade. In light of this, I’m confident the Xero share price can continue its market-beating form for some time to come.

More reading

• Afterpay share price hits $67! Are BNPL shares in a bubble?
• What’s next for WAAAX shares?
• 3 exciting ASX growth shares to buy with $3,000 today
• These are 2 quality ASX shares to buy with $2,000
• These 2 ASX tech shares show stellar growth prospects

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 PUSHPAY FPO NZX and Xero. The Motley Fool Australia owns shares of and has recommended BUBS AUST FPO. The Motley Fool Australia has recommended 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.

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There are some very reliable dividend shares on the ASX. I plan for a few of them to pay for my retirement.

I think dividend shares are great. It’s very pleasing to receive dividend cashflow from your investments without any effort. There’s a lot of things you need to do when owning a rental property like paying the bills, dealing with a property manager, getting a good tenant into the property, dealing with tenant issues and collating all the info for the tax return. After all that work, a lot of rental properties are actually negatively geared. That means there are more expenses than income each year, you’re losing money.

Dividend shares pay you to own them. You can get juicy, income-boosting franking credits. Many dividend shares generate long-term capital growth as well. I’m planning for these dividend shares to pay for my retirement:

Dividend share 1: Future Generation Investment Company Ltd (ASX: FGX)

Future Generation is a listed investment company (LIC) with a difference. There are no management fees or performance fees involved with this LIC. It donates 1% of its net assets each year to youth charities, hence the name ‘Future Generation’. In 2019 it donated $4.6 million across a number of charities.

The dividend share invests in the funds of fund managers that invest in ASX shares. Those fund managers also work for free to enable Future Generation to give good donations. Some of those quality fund managers include Bennelong, Paradice, Regal, Eley Griffiths and Wilson Asset Management. The underlying diversification is strong because of all the different funds.

Future Generation has been a solid performer. At the end of May 2020 its gross portfolio performance outperformed the S&P/ASX All Ordinaries Accumulation Index over one month, six months, 12 months, three years, five years and since inception in September 2014. 

LICs can turn investment returns into a nice dividend for shareholders. At the current Future Generation share price it offers a grossed-up dividend yield of 7.2%.

Dividend share 2: Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

I think Soul Patts is a great dividend share for a number of reasons. The investment conglomerate has grown its dividend every year since 2000. I’d really like to have that type of income certainty in retirement. In-fact Soul Patts has paid a dividend every year in its listed history since 1903.

The company is invested in a number of shares like TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW) and Australian Pharmaceutical Industries Ltd (ASX: API). It’s also invested in a number of unlisted businesses like swimming schools, resources and agriculture.

Soul Patts retains some of its cash profit each year to re-invest into more investment opportunities. At the current Soul Patts share price, it offers a FY20 grossed-up dividend yield of 4.3%.

Dividend share 3: Magellan Global Trust (ASX: MGG)

Magellan Global Trust could be one of the best set ups for retirement. There is a widely-used rule that suggests that people can withdraw 4% of their portfolio each year in retirement. I’m not sure if that rule works for some investments, particularly when it comes to sequencing risk.

Dividend share Magellan Global Trust targets a 4% distribution yield for its investors. That’s a good starting yield. If the trust makes better total net returns than 4% a year then the distribution payment should steadily grow over time.

At the end of May 2020 it had generated net returns of 12.5% per annum since inception in October 2017. It’s invested in high quality global shares like Microsoft, Alphabet, Visa, Mastercard, Tencent and Alibaba. These types of businesses seem solid in the face of COVID-19. 

The trust started with a bi-annual distribution of 3 cents per unit. It just announced an upcoming distribution of 3.58 cents per share. At the current Magellan Global Trust share price it offers a distribution yield of 3.85%.

Foolish takeaway

I really like each of these dividend shares for long-term income. I think Soul Patts is the best choice for reliable dividends. Future Generation has the best yield, though Magellan Global Trust could make the best total returns because of its global investment focus on the best businesses.

More reading

• 2 dirt-cheap ASX shares to buy next week
• Here’s how to play China’s V-shaped growth story
• 10 FY21 ASX share picks revealed by Bell Potter
• 3 ASX dividend shares for every income investor’s portfolio
• ASX shares vs property: which is a better investment?

Motley Fool contributor Tristan Harrison owns shares of FUTURE GEN FPO, MAGLOBTRST UNITS, 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. 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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As I mentioned here yesterday, at present the Australia and New Zealand Banking GrpLtd (ASX: ANZ) Online Saver account currently provides savers with a base interest rate of just 0.05%.

This is broadly in line with what you’ll find with other savings accounts. And unfortunately, I expect rates to stay at these ultra low levels for some time to come.

In light of this, if you’re looking to earn an income, then you might want to consider investing your funds into some of the high quality dividend shares on the ASX.

Three top ASX dividend shares I would buy are listed below:

Coles Group Ltd (ASX: COL)

I think this supermarket operator would be a great option for income investors. I think Coles is well-positioned to grow its dividend at consistently solid rate over the next decade. This is because of its positive growth outlook thanks to food inflation, its refreshed strategy, and expansion opportunities. Based on the current Coles share price, I estimate that it offers a fully franked 3.9% FY 2021 dividend.

Rio Tinto Limited (ASX: RIO)

Another dividend share that I think income investors ought to consider buying is this mining giant. Because of the high prices that iron ore is commanding at present, I believe Rio Tinto is well-placed to deliver high levels of free cash flow this year and next. And given the strength of its balance sheet, I suspect the majority of this free cash flow will be returned shareholders. In light of this, I estimate that Rio Tinto shares currently offer a forward fully franked dividend yield of at least 5%.  

Rural Funds Group (ASX: RFF)

A final dividend share that I would buy right now for income is Rural Funds. It is a leading agriculture-focused property company with a collection of quality assets throughout Australia. The main attraction to Rural Funds for me is its long term tenancies. These have been designed to allow the company to consistently increase its distribution at a solid rate each year. For example, in FY 2020 it plans to pay 10.85 cents per share and in FY 2021 it intends to pay shareholders 11.28 cents per share. Based on the current Rural Funds share price, the latter equates to a 5.7% yield.

More reading

• 2 ASX dividend shares with yields over 6%
• Here’s how to play China’s V-shaped growth story
• What’s going on with the Coles share price?
• Why Adbri, BlueScope, Netwealth, & Rio Tinto shares are tumbling lower
• Risk to supermarkets is rising but is Woolworths share price still a buy?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. The Motley Fool Australia owns shares of COLESGROUP DEF SET. 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 unprecedented consequences of the coronavirus pandemic have taken a heavy toll on the global economy. As a result, the pandemic has forced individuals and society to adapt in order to function and endure. Despite the widespread chaos for most businesses, some notable ASX COVID-19 success stories have emerged.

Here are 3 companies that have come into their own as a result of the coronavirus lockdown.

Temple & Webster Group Ltd (ASX:TPW)

Temple & Webster is Australia’s largest online retailer of furniture and homewares, boasting more than 150,000 products for sale. The company has been a market darling during the coronavirus lockdown period as shoppers switch to online retail avenues.

Temple & Webster acknowledge this strong demand in a recent trading update, which highlighted a 130% surge in gross sales to 28 June on a year-on-year basis.  In mid-June, the online retailer reported a 668% increase in year-to-date EBITDA of $7.1 million. Additionally, Temple & Webster reported a 68% increase in year-to-date revenue of $151.7 million.

Despite being debt-free and boasting around $30 million in cash, Temple & Webster recently completed a $40 million share placement. The company noted that this will allow for further investments in growth and will improve its technology, product and service offerings.

Marley Spoon AG (ASX: MMM)

Another company to capitalize on the demand for online and convenience services has been Marley Spoon. The subscription-based meal-kit provider saw an unprecedented surge in demand during the pandemic. Marley spoon reported that 7.5 million meals were delivered in the first quarter of 2020.

This surge in demand resulted in Marley Spoon recording its first-ever positive cash flow and accelerating future growth plans. This has been reflected in the company’s share price, which has surged more than 600%  since mid-March. In response, the company completed a $16.6 million capital raising to strengthen its balance sheet and fund continued global expansion.

Kogan.com Ltd (ASX: KGN)

Kogan.com is fast becoming a household name following the coronavirus pandemic. During the lockdown period, Kogan’s active customer base grew to over 2 million, with 126,000 additional customers as of 31 May.

Kogan reported a 100% increase in gross sales across April and May thanks to consumers opting for the convenience of online shopping. The online retailer also reported a 130% surge in gross profit for the same period.

The demand has rippled into the Kogan share price which has surged more than 300% from late March to trade near all-time highs. The online retailer recently completed a $115 million capital raising in order to accelerate future acquisition opportunities.

Foolish takeaway

The trend among these ASX COVID-19 success stories is the benefits they have all experienced from the change in consumer behaviour and their continued investment in online exposure.

Although all 3 companies have rallied tremendously since March, I can’t advocate buying shares in any at the moment.

Instead, I think a prudent strategy for investors would be to compile a watchlist of similar companies that could thrive in 2020 and beyond.

More reading

• How I’d build a $100,000 portfolio with ASX growth shares
• 10 more top broker ASX share picks for FY21
• Why Afterpay and this ASX share just hit record highs
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Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Temple & Webster Group Ltd. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia has recommended Temple & Webster Group 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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The S&P/ASX 200 Index (ASX: XJO) was back on form last week and charged notably higher. The benchmark index climbed a total of 153.8 points or 2.6% to end the period at 6057.9 points.

A good number of shares climbed higher with the market. However, a few stood out with particularly strong gains. Here’s why these were the best performers on the ASX 200 last week:

The Afterpay Ltd (ASX: APT) share price was the best performer on the ASX 200 last week with an 18.4% gain. Investors were buying the payments company’s shares thanks partly to a broker note out of Citi. Although its analysts have retained their neutral rating, they have more than doubled their price target to $64.25 from $27.10. The broker made the move after upgrading its earnings estimates materially. This was in response to Afterpay’s impressive growth in the UK and United States and its belief that it will benefit from the acceleration in the shift to online shopping.

The Nearmap Ltd (ASX: NEA) share price wasn’t far behind with a 17.5% gain. A positive broker note released last week could also have played a role in this strong gain. A note out of the Macquarie equities desk reveals that its analysts have retained their outperform rating and lifted their price target to $2.47. Macquarie appears impressed with the aerial imagery and location data technology company’s performance during the pandemic. Nearmap recently confirmed that it is on track to achieve its FY 2020 guidance.

The NEXTDC Ltd (ASX: NXT) share price was a strong performer and jumped 14.6% last week. Investors were buying the data centre operator’s shares after it announced major new contract wins in New South Wales. According to the release, NEXTDC’s contracted commitments at its New South Wales data centre facilities have now increased by approximately 4MW, to more than 36MW. And including expansion options, its data centres in the state are now approaching a sizeable 60MW. This is more than the total capacity of its S1 and S2 data centres.

The Domain Holdings Australia Ltd (ASX: DHG) share price was on form and surged 14.3% higher last week. This was despite there being no news out of the property listings company last week. The Domain share price has now more than doubled in value since dropping to a 52-week low of $1.68 in March.

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James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nearmap Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Nearmap 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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