Tag: Motley Fool Australia

If you’re looking to add some tech shares to your portfolio in July, then I think the three listed below could be the ones to consider buying.

Here’s why I think these ASX tech shares could be destined for big things:

Altium Limited (ASX: ALU)

Altium is the printed circuit board (PCB) design software provider behind the popular Altium Designer platform. This award-winning platform is used by almost 50,000 users to effortlessly connect with every facet of the PCB design process. PCBs are found inside almost all electronic devices and are vital to connectivity. Given how 5G internet is supporting the rise of connected devices globally, demand for its software looks set to grow strongly over the next decade. I expect this to drive strong earnings growth once the pandemic passes.

Nearmap Ltd (ASX: NEA)

Another tech share that I would consider buying is Nearmap. It is a leading aerial imagery technology and location data company. Its software allows users to move location analysis out of the field and into the office. This gives businesses the tools to scale quickly and efficiently. I think Nearmap could have a bright future ahead of it due to its lucrative opportunity in a highly fragmented market. And thanks to recent product launches, I’m confident the company will grow its market share in the ANZ and North America markets in the coming years and drive strong sales growth.

NEXTDC Ltd (ASX: NXT)

A final tech share to consider buying is NEXTDC. I believe the innovative data centre operator is perfectly positioned to capitalise on the ever-increasing amount of data being generated by consumers and businesses. This consumption is likely to increase strongly in the future as more software moves to the cloud and 5G internet adoption grows. As a result, I expect demand for capacity at its world class centres will be strong for many years to come. This should drive above-average earnings growth as it scales.

More reading

• Here are 3 top ASX tech shares to buy with $5,000 today
• Top brokers name 3 ASX 200 shares to buy today
• How to get rich by investing in ASX shares
• How ASX 200 shares like Xero could help you retire early
• Best growth shares to buy with $4,000

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 Altium and Nearmap Ltd. 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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Investing in exchange-traded funds (ETFs) can be a good way to create good returns through easy investing.

ETFs are attractive because they allow you to invest in a large number of shares through a single investment. Some ETFs are invested in a few dozen shares and others own thousands of shares. It just depends which one you go for.

But diversification is only helpful to a certain level. I think the best type of diversification is when you decrease your risks without decreasing your returns.

Imagine that a lot of your portfolio is invested in Afterpay Ltd (ASX: APT), Splitit Ltd (ASX: SPT), Sezzle Inc (ASX: SZL) and Zip Co Ltd (ASX: Z1P). Your portfolio would have created great returns recently, but it’s largely exposed to the same risks. If you also had shares like Xero Limited (ASX: XRO), CSL Limited (ASX: CSL), City Chic Collective Ltd (ASX: CCX) and others in your portfolio then your ‘industry risk’ is lowered but the returns would still be strong.

That’s why I think certain ETFs can provide you with good diversification and good returns. They can add to your portfolio’s strength.

Here are two of those ideas:

BetaShares Global Sustainability Leaders ETF (ASX: ETHI)

Ethical investing may sound like it’s expensive, or perhaps you’re worried about missing out on better returns if you included ‘unethical’ shares in your portfolio.

But this option is actually a really good pick in my opinion. Its annual operating costs are just 0.59% per annum. That’s a lot cheaper than most Australian fund managers. The ETF screens out a number of categories which are deemed unethical.

And the returns? Well they’re strong too. Since inception in January 2017 to May 2020 it has generated net returns of 21.2% per annum. Over the 12 months to 31 May 2020 it generated net returns of 33%. Don’t forget those time periods include the COVID-19 selloff.

I think it shows that ethical businesses may actually perform better than just the ‘average’ business.

What shares does this ETF own which are ethical and perform so well? Its largest 10 exposures at 31 May 2020 were: Apple, Mastercard, Visa, Home Depot, NVIDIA, Adobe, PayPal, Toyota, Netflix and ASML. In total it owns around 200 shares. 

I think that looks like a high quality group to me. 

Betashares Global Cybersecurity ETF (ASX: HACK)

This ETF is made up of many of the world’s leading cybersecurity businesses.

You may have seen the news that Australia was recently subject to a widespread cyber attack. That’s just the latest example of businesses and governments around the world that have faced cyber problems.

More and more government services with integral data are being offered online. Citizen information needs protecting. Lots of businesses are now moving their computer infrastructure online. Valuable intellectual property needs protecting. Customer data needs to be kept out of the hands of hackers.

Betashares Global Cybersecurity ETF’s top holdings include: Crowdstrike, Broadcom, Splunk, Okta, Cisco, Cloudflare, Zscaler, VMware, BAE Systems and Booz Allen Hamilton. I

Around half of the ETF’s sector allocation is to systems software. Other sectors include communications equipment and internet services and infrastructure.

The returns of this ETF are also very strong. Since inception in August 2016, the fund has returned around 20% per annum after fees. Over the past year it has made a 27.8% return.

If you were with an investment manager you’d probably expect to be paying high fees for these types of returns. The annual management fee cost is just 0.67% per annum. I don’t think that’s super cheap compared to some of the other international ETFs, but it’s cheaper than most fund managers in Australia.

Foolish takeaway

I really like both of these ETFs. They’re both different to what you’d normally see from an ASX ETF and a typical global cheap global ETF, yet the returns are just as good, if not better. 

More reading

• Building a $100,000 portfolio with Afterpay shares and 3 other ASX companies

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 CSL Ltd., Xero, and ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO and BETA CYBER ETF UNITS. The Motley Fool Australia has recommended Sezzle Inc. 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 BHP Group Ltd (ASX: BHP) share price has had a very nice 3 months. BHP shares were pushing over the $40 mark back in February on the back of a strong economy, rising demand for high-yielding ASX dividend shares and rising commodity prices. But, like with most ASX shares, BHP shares were smashed in the March market crash that was sparked by the spread of the coronavirus pandemic. Between 22 January and 16 March, the BHP share price lost more than 38% of its value.

But since mid-March, BHP has staged a remarkable recovery. After hitting a low of $24.05 on 16 March, BHP shares have climbed almost 40% — going off of today’s share price (at the time of writing) of $35.02. Over the same period, the S&P/ASX 200 Index (INDEXASX: XJO) has regained around 18.6% or close to 29% from its own low point on 23 March.

BHP is a diversified mining giant that would easily be the largest company on the ASX if it wasn’t for the company’s London, Tokyo and New York cross-listings. The company has 4 core commodity operations: coal, copper, oil and iron ore.

So, what’s behind this dramatic revaluation of the ‘Big Australian’?

BHP shares on the rise

To understand the renewed sentiment behind the company’s share price, we only need to look at how the prices of the commodities BHP extracts and processes have been holding up. Over the course of the year, coal, oil and copper prices took a huge hit on the back of the coronavirus crisis. The copper price has recovered somewhat from lows reached in March and April. As has oil to a lesser extent, although WTI crude fell to below 0 at one point during April, so the base for recovery was very low.

But iron ore prices (which is BHP’s biggest earner) have had a remarkable year. The iron ore price is today sitting above US$100 per tonne, which is close to its highest level in almost a year. Even in the depths of the coronavirus crash, iron prices didn’t drop below US$78 a tonne. This was surprising for many investors, as iron ore is a volatile commodity that has fairly direct links with global economic growth. But a supply squeeze in the Brazilian iron ore industry has resulted in dramatic falls in output from Brazil’s Vale (a rival iron miner), which in turn has kept iron ore prices above US$90 a tonne since mid-May and over $100 a tonne since the start of June.

As a result of this, investors are expecting strong earnings from BHP shares this year, which will likely lead to strong dividend payments for shareholders in a year where many ASX companies are struggling to pay dividends at all. It’s these factors that have lead to such a robust recovery in BHP shares since March.

More reading

• Top brokers recommending you buy these ASX shares in this market sell-off
• 3 quality ASX shares offering shareholders generous dividends
• Transurban Group and 1 other ASX share I’d buy in another share market crash
• ASX retailers beware! Amazon.com is gearing up for its next major attack
• Can 5G help push the Telstra share price higher by 2021?

Motley Fool contributor Sebastian Bowen 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 ASX is suffering a big sell-off but this is the time investors should be hunting for buying opportunities.

The S&P/ASX 200 Index (Index:^AXJO) is likely to close near or at its intraday low with the benchmark tumbling over 2% to 5,844 in late afternoon trade.

The rising risk of a second COVID-19 wave in the US and Victoria roiled investors and is prompting many to ask if this is the start of a painful market correction.

Don’t let this pullback go to waste. I do not believe we will retest the bear market lows in March and even stocks that are not directly in the path of a second wave are getting tossed out with the bathwater.

Coincidently, leading brokers have reiterated their buy recommendation on some of these ASX shares.

Defensive buy

One of these is the Sonic Healthcare Limited (ASX: SHL) share price as Goldman Sachs restated its “buy” recommendation and described it as the “preferred name in the sector”.

The medical testing services group issued a better than expected trading update yesterday, which will likely see a 7% to 9% increase in its FY20 consensus earnings forecasts.

“Overall, new guidance is only 4-5% below pre-Covid-19 targets, which, if achieved, would be viewed as a significant achievement in such a challenging period,” said the broker.

Riding on a second wave

What’s even more exciting is management’s belief that its business in most of the regions it operates will start FY21 at around pre-coronavirus levels.

Sonic also undertakes COVID-19 testing and a second wave isn’t necessarily bad news for the group.

Goldman Sachs’ 12-month price target on Sonic is $34.50 a share.

Double-digit profit growth

Another stock with relatively safe earnings and that’s recommended by Macquarie Group Ltd (ASX: MQG) is AUB Group Ltd (ASX: AUB).

The insurance broker withdrew its earnings guidance at the peak of the pandemic but just recently issued a fresh update.

The new forecast is for adjusted net profit to range between $52 million and $53 million for the current financial year.

Earnings upgrade despite the coronavirus

That’s a 12% to 14% improvement over last year and is ahead of its previously withdrawn guidance for 9% to 11% increase!

“At a sector level, competitors have also recently noted increased rates, stable operating trends, cost out and M&A potential,” said Macquarie.

The broker’s 12-month price target on AUB is $15.11 a share.

More reading

• The BHP share price has jumped 40% higher in the last 3 months
• Transurban Group and 1 other ASX share I’d buy in another share market crash
• Top brokers name 3 ASX shares to sell right now
• ASX retailers beware! Amazon.com is gearing up for its next major attack
• Can 5G help push the Telstra share price higher by 2021?

Motley Fool contributor Brendon Lau owns shares of Macquarie Group Limited. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. 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.

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The Ardea Resources Ltd (ASX: ARL) share price surged as much as 15.69% higher today as the company reported “significant” gold exploration results from a new target at its flagship project.

Ardea is a multi-commodity explorer and developer that controls more than 5,100 square kilometres of tenure in Western Australia.

It is focused on advancing its flagship wholly-owned Goongarrie Nickel Cobalt Project (GNCP), which is part of the largest nickel-cobalt resource in the developed world. 

Goongarrie is located 80 kilometres north of Kalgoorlie and offers multi-commodity exposure, including nickel, cobalt, aluminium and gold.

Why did the Ardea share price jump today?

The catalyst for today’s move appears to be an announcement from the company this morning. In the release, Ardea revealed that first pass regional aircore drilling over a new gold target at GNCP has intercepted significant gold anomalism. 

The target is currently unnamed and covers around 2.4 kilometres of strike. It is located 3 kilometres east of the nearest nickel-cobalt deposits that constitute the GNCP.

Significant intercepts announced today include:

• 4 metres at 0.53 grams per tonne (g/t) gold from 36 metres;
• 6 metres at 1.83g/t gold from 118 metres;
• 5 metres at 3.91g/t gold from 42 metres;
• 6 metres at 0.50g/t gold from 44 metres; and
• 6 metres at 0.54g/t gold from 66 metres.

The drilling, which consisted of 46 aircore holes for 3,787 metres, was completed at the end of May 2020. A total of 680 samples were collected for assay.

The company is currently awaiting assay results from a resampling program to confirm gold mineralisation thickness and grade.

Once Ardea has received these results, it will complete a more detailed interpretation of the logged geology and assay data.

Ardea noted that deeper drilling is required to confirm the geometry and extensions of gold mineralisation into fresh rock.

“Though at a very early stage, these results from the newly identified Goongarrie South target area suggest strong gold anomalism over an extensive area that has never been systematically explored before this program,” said managing director Andrew Penkethman. 

After racing to an impressive gain in early morning trade, the Ardea share price pulled back throughout the day to eventually close 5.88% higher at 27 cents. With this rise, the company’s market capitalisation currently stands at just over $30 million.

More reading

• Where I would spend $2000 on ASX shares right now
• 3 stellar ASX tech shares to buy in July
• 2 ETFs for easy investing and good returns
• The BHP share price has jumped 40% higher in the last 3 months
• Top brokers recommending you buy these ASX shares in this market sell-off

Motley Fool contributor Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Over the last few years the likes of Appen Ltd (ASX: APX) and Altium Limited (ASX: ALU) have gone from being small caps to multi-billion dollar tech companies.

This means that anyone that was lucky enough to buy shares when they were small caps, and held onto them until today, will be sitting on mouth-watering returns.

I believe this demonstrates why investing in the small cap space can be a very rewarding experience if it goes well. However, it is worth remembering that it doesn’t always go to plan. For every Appen and Altium there have been countless other companies that have failed to live up to their potential.

This means it is best to be very careful when investing in the space and only consider companies with strong business models and positive long term outlooks.

Three small caps that tick a lot of boxes for me are listed below. Here’s why I like them

Audinate Group Limited (ASX: AD8)

The first small cap tech share to watch is Audinate. It is a $393 million digital audio-visual networking technologies provider which is best known for its innovative Dante product. This award-winning audio over IP networking solution is being used widely across the professional live sound, commercial installation, broadcast, and recording industries globally. The company also has its eyes on the lucrative Audio & Video (AV) market. If it can dominate this market as well, I believe it could have a very bright future ahead of it.

Bigtincan Holdings Ltd (ASX: BTH)

Another exciting small cap share to watch is Bigtincan. It is a $296 million tech company which provides enterprise mobility software to businesses. This software helps to improve mobile worker productivity and has a track record of increasing sales win rates and reducing costs. Users of the software include Australia and New Zealand Banking GrpLtd (ASX: ANZ), Cardinal Health, and Guess. 

Whispir (ASX: WSP)

A final small cap to watch is Whispir. It is a $226 million software-as-a-service communications workflow platform provider. It provides businesses with a platform that allows users to deliver two-way interactions at scale using automated multi-channel communication workflows. This can make operations more efficient and reduce the number of service desk support calls. Users of its software include AGL Energy Limited (ASX: AGL), Foxtel, and Disney.

More reading

• Are these small cap ASX tech shares the next Afterpay or Appen?
• ASX tech shares: 2 exciting small caps to watch closely
• 3 excellent small cap ASX shares to add to your watchlist
• 3 undervalued ASX growth companies to add to your portfolio
• 3 exciting small cap ASX shares to watch closely in the 2020s

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 Altium, AUDINATEGL FPO, BIGTINCAN FPO, and Whispir Ltd. The Motley Fool Australia owns shares of Appen Ltd. The Motley Fool Australia has recommended AUDINATEGL FPO, BIGTINCAN FPO, and Whispir 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 number of tech shares listed on the ASX continues to grow each year.

The sector is still relatively small compared to the much larger United States market, which is home to tech giants such as Amazon and Netflix. However, there is a growing number of high-quality companies from the tech sector now listed on the ASX.

Here we examine two such tech shares I think are worth considering as possible additions to your share portfolio. They are: WiseTech Global Ltd (ASX: WTC) and Xero Limited (ASX: XRO).

WiseTech Global

WiseTech is a leading global developer and provider of software solutions for the logistics industry. It is also a member of Australia’s WAAAX cohort of tech shares .

As the global economy continues to grow, managing logistics has become more and more complex. This has enabled WiseTech to carve out a very successful and strong niche in the global logistics market. Its customer base now exceeds 15,000 and is spread across more than 150 countries.

WiseTech continues to grow at a rapid pace, in both size and scale, via organic growth and targeted acquisitions. It has made a number of acquisitions across Europe, Asia, Australasia, and the Americas since 2018.

The company downgraded its earnings forecast for FY 2020 in February to year-over-year growth of between 5% and 22%. This represented slower growth than the company has previously achieved. WiseTech was significantly impacted by the coronavirus pandemic with manufacturing and economic trade slowing considerably around the world. However, global markets are now beginning to open up which, I believe, elevates the company’s future growth prospects.

Xero

Another ASX tech share I think is worth taking a closer look at is Xero. Xero is an online accounting software provider that targets small businesses. Its growth story over the past decade has been quite remarkable. Two of Xero’s key differentiators are that the product is affordable and user-friendly, making it ideal for small business owners. In comparison, many of the software packages from its competitors can be expensive and more complex to use.

Xero delivered another strong set of numbers for the 12 months ending 31 March 2020. Revenue increased by 30% to NZ$718.2 million. All geographic segments including Australia, New Zealand, the United Kingdom, and North America performed strongly. Growth was driven by a 2% increase in average revenue per user. Overall subscribers also continued to grow solidly, increasing by 26% to reach 2.285 million. Due to its expanding economies of scale, Xero’s gross margin also continues to improve and increased by 1.6% to reach 85.2%.

Furthermore, Xero is transitioning to become more than just a cloud accounting platform. It now offers a broad spectrum of tools and services to help manage a small business in its entirety, as opposed to only its finances.

Foolish takeaway

While the ASX 200 may not have the same sort of scale as the Nasdaq, I believe it still presents investors with many exciting opportunities to purchase tech shares poised for considerable future growth. WiseTech and Xero are two such shares that I would be happy to hold for at least the next 5 years and beyond.

More reading

• Why Xero and these ASX tech shares just hit record highs
• Australian businesses are running out of cash
• Where to invest $10,000 in ASX 200 shares for 2030
• How ASX 200 shares like Xero could help you retire early
• Best growth shares to buy with $4,000

Phil Harpur owns shares of WiseTech Global and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia owns shares of WiseTech Global. 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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I think that ASX shares with international exposure could be a good way to produce both growth and income for investors who want to diversify their portfolio.

When you look at the ASX there seems to plenty of shares that fit into one of two categories. They are either domestically-focused businesses with low growth and (usually) a high dividend yield like miners or banks such as Commonwealth Bank of Australia (ASX: CBA). Or there are growth shares that are highly priced with international growth plans such as Afterpay Ltd (ASX: APT).

I believe there are some ASX shares that can give a decent income whilst also giving exposure to great international shares with good growth. Here are three of those ideas:

Share 1: Magellan Global Trust (ASX: MGG)

This is a listed investment trust (LIT) which invests in the best businesses in the world. Magellan Global Trust can turn some of the capital return growth that it makes into distributions to shareholders. The ASX share targets a 4% distribution yield, so that’s the income part covered.

The shares that it’s invested in have strong economic moats. Some of the shares it’s invested in are: Alibaba, Alphabet, Atmos Energy, Facebook, Mastercard, Microsoft, Reckitt Benckiser, Tencent, Visa and Xcel Energy.

Since inception in October 2017, its net portfolio performance (after fees) has been 12.5% per annum, outperforming the MSCI World Net Total Return Index (AUD) by 1.5% per annum. Those numbers are to the end of May 2020, which includes the COVID-19 sell-off.

Over time, the best businesses in the world can act like compound growth machines. A benefit of Magellan Global Trust is that it can invest anywhere in the world, it’s not limited to a particular country or weighting with its share investments.

Share 2: PM Capital Global Opportunities Fund Ltd (ASX: PGF)

This is a listed investment company (LIC) which looks to invest in businesses which are good value.

Some of the shares that it currently owns include European homebuilder Cairn Homes, Bank of America, Visa, MGM China, KKR & Co, Siemens and Freeport-McMoRan Copper.

The ASX share currently has a grossed-up dividend yield of 6.3%. Part of the reason why the yield is quite high is because the current share price of $0.90 is at a 23% discount to the net tangible assets (NTA) at 19 June 2020, which was the latest weekly NTA disclosure. I think that represents great value. PM Capital aims to grow the dividend over time. I believe that’s an attractive feature and will help close the NTA discount.

Some of the shares that the LIC owns has been sold off heavily due to COVID-19. At them moment its net performance is only showing a return of 8.1% per annum since inception. But I believe today’s share price offers very compelling value.

Share 3: WAM Global Limited (ASX: WGB)

WAM Global is the international version of WAM Capital Limited (ASX: WAM). It looks for undervalued growth companies listed overseas which could deliver good returns.

The investment team at Wilson Asset Management are happy to change the portfolio as conditions change. At the moment some of the biggest holdings are: Tencent, Amazon, Activision, Auto Zone, CME Group, Costco, Dollar General, Hasbro, Hello Fresh, Intuit, Logitech and Microsoft.

The ASX share currently has an annualised grossed-up yield of 4.5%. This yield will probably grow in time, just like it has at the other WAM LICs.

One of the things that I like about WAM Global is that it isn’t afraid to go to fairly high levels of cash during volatile periods. Cash is good for protection and opportunities. At the end of May 2020 it had a cash weighting of 14.8%.

It’s currently trading at a 17.3% discount to the 31 May 2020 NTA.

Foolish takeaway

I like each of these shares for what international diversification they offer. I think all of them are trading at good value, particularly PM Capital Global Opportunities Fund which is valued at a large NTA discount. 

More reading

• Ramsay Health Care and 1 other ASX share I would buy for both growth and income
• If I won the lottery I’d buy these 6 ASX shares
• How I would build a balanced portfolio worth $100,000 with 10 ASX shares
• Got $20,000? These are the ASX shares I’d buy during COVID-19
• Have $1,000? You should pick one of these 8 ASX shares

Motley Fool contributor Tristan Harrison owns shares of MAGLOBTRST UNITS and PM Capital Global Opportunities Fund Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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If you’re wanting to add some dividend shares to your portfolio, then you might want to consider the three listed below.

All three of these dividend shares offer generous yields and trade at attractive levels. Here’s why I like them:

BHP Group Ltd (ASX: BHP)

I think BHP would be a great dividend share to buy if you’re not averse to investing in the resources sector. Thanks to favourable commodity prices, I believe BHP is well-positioned to deliver strong free cash flows over the coming years. And given how robust its balance sheet is at present, I suspect the majority of this free cash flow will be returned to shareholders. I estimate that the mining giant’s shares currently offer investors with a forward fully franked ~5% dividend yield.

Dicker Data Ltd (ASX: DDR)

Another dividend share to consider buying is this wholesale distributor of computer hardware and software. Dicker Data has really caught the eye over the last few years after consistently growing its earnings and dividends at a solid rate. This has been driven by a combination of new vendor agreements, industry tailwinds, and solid demand. Pleasingly, its strong form has continued in FY 2020 and the company is well-placed to deliver a bumper profit result. As a result of this, the company intends to increase its dividend by 31% to 35.5 cents per share. This represents a 5% fully franked dividend yield.

National Australia Bank Ltd (ASX: NAB)

A final option for investors to consider buying is this banking giant. While times are certainly hard for the bank right now and a rise in bad debts seems inevitable, I’m optimistic that this is more than priced into its shares. In light of this, and on the belief that the worst is now behind the bank, I think it could be an opportune time to pick up its shares. Especially if you’re looking for dividend. I estimate that NAB’s shares offer a generous fully franked 5.2% FY 2021 dividend yield at present.

More reading

• Qantas share price on watch as it launches a $2bn cap raise
• You don’t have to time the market to get rich with ASX shares
• Why I would buy these outstanding ASX 50 shares right now
• Australian businesses are running out of cash
• This top fund manager believes dividend yields are going to 0%. Where should you invest?

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.

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The Scentre Group (ASX: SCG) share price has had a very rough trot in recent months. As 1 of the ASX’s largest owners and operators of shopping centres, Scentre was hit extremely hard by the coronavirus pandemic and associated economic shutdowns.

Scentre shares started 2020 at $3.85 and went all the way up to $4.04 in January. But when the extent of the economic impacts from the coronavirus pandemic became clear in March, Scentre shares dropped like a stone. The company touched a post-demerger low of $1.35 on 24 March. The Scentre share price has recovered somewhat since, but it’s ‘only’ trading for $2.14 today (at the time of writing). That’s a nice 59% bounce off of the March low but still, 88% below it’s 2020 high watermark.

But I think Scentre could potentially return to the levels we were seeing in February. That would deliver a further 88% upside to the current Scentre share price.

A bull case for Scentre shares

Scentre owns the Westfield brand of shopping centres in Australia and New Zealand. It received these centres from the demerger of the old Westfield Group back in 2014. Unibail-Rodamco-Westfield (ASX: URW) took Westfield’s international assets.

As a REIT  (real estate investment trust), Scentre makes its crust from collecting rental income from shops that occupy its shopping centres. This is problematic when shops are forced to close and customers stop visiting them altogether, exactly what happened in March and April.

So there’s no doubt that Scentre is going to have a rough fiscal year in FY2020. But I’m very bullish going forward.

Why? Well, signs are pointing to a remarkable resurgence in ASX retailing fortunes. As my fellow Fool contributor, Matthew Donald reported last week, Australian retail sales were up 16.3% in May to $4.03 billion, the largest month-on-month rise in 38 years according to the Australian Bureau of Statistics. If these trends continue, I think it points to a bright future for Scentre and the resumption of healthy dividend distributions.

I think the government assistance (like jobKeeper and JobSeeker payments) for Australians during the crisis is helping to boost retail sales.

We should (in my opinion) see this effect continue until the government starts winding down assistance. And hopefully, at this point the economy be in a recovery mode. Once we see Scentre’s numbers for the quarter ending 30 June 2020 and beyond, I think there is a strong chance that Scentre shares will be re-rated by the market, perhaps even back up to the $4 mark.

More reading

• Here are 3 ASX 200 shares with dividend yields over 8%
• Here are 3 Australian share market trends to watch this week
• ASX share price winners and losers of last week
• 3 ASX shares I think are super cheap right now
• The next ASX sector at risk of cutting dividends

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. 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.

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