Tag: Motley Fool Australia

With smart investing and the magic of compounding, a humble sum like $10,000 has the potential to change your life in the long term. You have worked hard and sacrificed for your money, so instead of wasting it, why not put it to work?

For those who are just getting started investing, the coronavirus pandemic has created great long-term opportunities. Here are 4 ASX share ideas that can put your money to work.

Macquarie Group Ltd (ASX: MQG)

I would start by buying $2,500 worth of Macquarie Group shares. Given the uncertain market, Macquarie has the ability to adapt to volatile market conditions by switching between market-facing and annuity-style operations.

Aristocrat Leisure Limited (ASX: ALL)

I would put another $2,500 to work by buying shares in gambling machine manufacturer Aristocrat Leisure. The company has a strong, recurring revenue stream from leasing machines and also makes revenue through outright sales of its machines.

Additionally, the company has excellent growth potential with heavy exposure to the lucrative gaming industry in the US and online operations, which provides it with earnings flexibility. Despite the pandemic shutting down most casinos, Aristocrat is well-positioned to expand its market share when operations restart.

Brambles Limited (ASX: BXB)

I believe most portfolios should be balanced by having exposure to a defensive earner that can generate revenue through all market cycles. Therefore, logistics giant Brambles is the third company I would invest $2,500 in. Brambles owns more than 330 million pallets and crates which are used to transport goods from manufacturers to retail stores and online operators. 

Operating in approximately 60 countries around the world through its iconic CHEP brand, Brambles has a sturdy business model with resilient exposure to the demand for essential consumer goods.

Woolworths Group Ltd (ASX: WOW)

With the remaining $2,500, I would buy shares in Woolworths. Apart from the surge in demand for essential goods during the pandemic, Woolworths is also poised to adapt to future demand with the supermarket giant investing heavily in its e-commerce operations.

Woolworths recently reported a near 11% surge in group sales for the quarter to $16.5 billion, with supermarket sales rising more than 40% in the week ending March 22. Although the costs of larger operations will increase, Woolworths also has exposure to the liquor and hotel industries, which are expected to recover post-pandemic.

Foolish takeaway

The way I have allocated $10,000 in this case is relatively conservative. In my opinion, for long-term and sustainable growth, this is a prudent strategy in building wealth. Although the ASX shares I have chosen may not be to every investor’s taste, I think it reflects how a balanced portfolio should look.

More reading

• Top brokers are urging you to buy this slumping ASX 200 stock next week
• The latest ASX small caps broker picks to buy today
• Is Afterpay an ASX blue chip of tomorrow?
• Brokers name 3 ASX 200 shares to buy right now
• Where growth, income, and value investors can invest right now

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

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If you’re anything like me, you’re probably hoping your investment in ASX shares will make you a millionaire. But when the S&P/ASX 200 Index (ASX: XJO) plummets lower it can make you question your investment strategy.

But the reality is that the maths behind investing is quite straight forward. Let’s take a look at how ASX shares can help you become a millionaire by the time you reach retirement.

How to use ASX shares to become a millionaire

Let’s check out an example to demonstrate. Consider your average 35 year old investor with a diversified ASX share portfolio. To keep things simple, we’ll ignore taxes and brokerage on shares and assume an 8% per annum average return with dividends reinvested.

This average investor starts with $50,000 in ASX shares and adds $5,000 per year to his portfolio. 

What we can see is that, through the magic of compound interest, his investment in ASX shares can most definitely make this investor a millionaire by the retirement age of 65. Even 10 years prior to retirement, this ASX share portfolio is worth $461,858. However, by retirement age, the portfolio has more than doubled to $1,069,549 and the investor has become a millionaire.

How can you do the same with your ASX share portfolio?

So, what does this example really tell us? The answer is that a diversified share portfolio and long-term outlook can really pay off in the future.

While the Afterpay Ltd (ASX: APT) share price might have rocketed 400% higher since mid-March, it’s not a wise strategy to put all your eggs in one basket.

By constructing a portfolio of high-quality ASX shares and holding for decades ahead, you could generate the 8% per annum average return illustrated in this example.

Of course, it’s wise to invest only what you can afford to lose. You don’t want to be forced to sell at a bad time because you over-invested and suddenly need that cash back.

It’s also important to remember that it’s never too late to start investing. Every day your money is in the market is a day that it can potentially be working towards make you a millionaire.

More reading

• Is the Afterpay share price a buy at $44?
• Top brokers are urging you to buy this slumping ASX 200 stock next week
• 3 ETFs perfect for an ASX growth investor
• ASX 200 drops 1% on Friday
• The latest ASX small caps broker picks to buy today

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. 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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Is the Afterpay Ltd (ASX: APT) share price a buy at $44?

Amazingly, the Afterpay share price has risen by 400% over the past two months from the coronavirus price of $8.90 on 23 March 2020. That’s some recovery.

Perhaps some investors thought that the Afterpay model was about to come unstuck. Maybe they thought that every active customer wasn’t going to pay their most recent balance. Clearly that wasn’t the case.

Afterpay has managed to keep growing despite the worries about the worrying coronavirus economic conditions. I think Afterpay has done the right thing by adjusting its risk settings so that it’s a bit more cautious during this period.

The third quarter of FY20 still saw solid growth with total underlying sales growth of 105% compared to FY19. Within that, US growth was 263% and ANZ growth was 40%.

April saw average daily underlying sales growth of approximately 10% globally compared to the second half of March. Promising signs of a recovery. 

Afterpay US recently announced that it has passed 5 million active customers. 

Not all easy for the Afterpay share price

I fear that investors may be thinking that Afterpay is unstoppable now. It’s true that the buy now, pay later business has revolutionised how people pay in instalments (for no cost). But plenty of competition don’t want Afterpay to have all the limelight.

Global ecommerce player Shopify is launching ‘Shop Pay Installments’. Shopify said that “buyers will be able to pay for purchases in four equal payments over time, with no interest or fees. Merchants will receive the full purchase amount upfront, and Shopify will collect the remaining installment payments, meaning there’s no risk to merchants. This flexible payment option will allow buyers to stretch out their payments, making purchases more convenient. This, in turn, will help merchants increase cart sizes and overall sales.” This could cause trouble for the Afterpay share price. 

At $44 I think the Afterpay share price is far too optimistic and assumes the company won’t have to reduce margins to maintain market share in the future. Even if I were interested in buying Afterpay shares, I wouldn’t remotely want to buy above $40.

More reading

• How to use ASX shares to become a millionaire
• 3 ETFs perfect for an ASX growth investor
• Here are all the ASX 200 shares that have doubled or more since the bottom of the bear market
• Is Afterpay an ASX blue chip of tomorrow?
• Why Aristocrat Leisure, Afterpay, Corporate Travel, and Sydney Airport are pushing higher

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. 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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The Aristocrat Leisure Limited (ASX: ALL) share price is underperforming again on Friday after it’s disappointing profit results.

But top brokers believe the sell-off is overdone and are urging bargain hunters to use the weakness to buy the gaming machines developer.

The Aristocrat share price fell 1.7% to $25.52 – taking its two day decline to 6.7% when the S&P/ASX 200 Index (Index:^AXJO) lost 1.3% as geopolitical tensions knocked some wind out of global markets.

COVID-19 hit to profits

The sell-off in Aristocrat came as the group’s earnings missed consensus estimates. Its normalised interim net profit of $368 million was well below the $450 million that brokers were expecting.

The weakness was primarily due to its land-based business, which supplies poker machines to hotels and casinos.

The shutdown of gaming venues due to the COVID-19 pandemic more than offset the strength in its digital social gaming division.

Are Aristocrat’s shares cheap?

But UBS is unperturbed as it reiterated its “buy” recommendation on the stock with a 12-month price target of $31.80 a share.

“We remain confident in the pipeline of product and note management comments that the company has not reduced spend within R&D as a cost-saving strategy,” said the broker.

“In a month, we should know if this is a short-term surge or something more sustainable. The outcome of this has the potential to act as a significant catalyst for the share price in our view.”

Well placed for the coronavirus recovery

The bullish sentiment was echoed by Credit Suisse as it too repeated its “outperform” (or “buy”) call on the stock.

“Casino operators – opening with partial capacity – need strong game performance, assistance in moving slot machines, and flexibility in pricing models,” said Credit Suisse.

“We sense that ALL is ahead of the competition on sales and service.”

The broker also noted that Aristocrat’s digital business is performing ahead of its expectations and the group’s balance sheet is able to withstand the downturn in the global casino industry.

Not without risks

JP Morgan was equally impressed with Aristocrat’s digital division, which makes popular mobile apps but believes the downturn in the land-based business will last closer to 24 months than the six months many are expecting.

It also highlighted the risk that management may need to undertake a capital raise to help it ride out the coronavirus storm.

Nonetheless, JP Morgan still regards the stock as a buy and stuck with its “overweight” recommendation, although it lowered its price target on Aristocrat to $28.50 from $30.30 a share.

More reading

• Here’s how I would put $10,000 to work on the ASX
• How to use ASX shares to become a millionaire
• ASX 200 drops 1% on Friday
• The latest ASX small caps broker picks to buy today
• 3 super strong ASX 200 blue chip shares to buy right now

Motley Fool contributor Brendon Lau owns shares of Aristocrat Leisure 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.

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Exchange-traded funds (ETFs) are not normally the domain of the growth investor. Index funds like the Vanguard Australian Shares Index ETF (ASX: VAS) are very popular investments in this space. But they are usually favoured by passive investors who are not trying to beat the market long-term.

But there are ETFs out there that are more growth-orientated. These have proven themselves to deliver market-beating performances (as well as market-beating ticker codes!). Here are 3:

3 growth ETFs to hold for the long term

Betashares Global Cybersecurity ETF (ASX: HACK)

Aside from this fund’s brilliant ticker code, I also think it’s worth a look at from a growth perspective. As its name suggests, HACK invests in companies around the world that operate in the cyber security sector. This is an industry that has been growing enormously over the past decade, both in size and importance. I also think there’s plenty of room for future growth as our reliance on the internet continues to accelerate. 

HACK has returned an average of 16.7% per annum since listing in 2016. I believe these returns, along with the future-proof nature of the cyber security industry, mean this ETF would be perfect for growth investors. 

ETFS Morningstar Global Technology ETF (ASX: TECH)

This ETF is set up to track a basket of tech stocks the fund believes have market-leading positions as well as sustainable competitive advantages. By its nature, TECH invests in growth companies and has returned a pleasing 24.37% per annum since its inception in 2017. Some of its current holdings include Microsoft, Fortinet, Splunk and Intel.

As such, TECH is a perfect choice for any tech-focused growth investor. It might also suit those investors looking to increase their global exposure to the technology sector as a whole.

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

This ETF (another from BetaShares) tracks tech stocks that hail from Asian markets such as China, Taiwan and Korea. Shares from these countries don’t often find their way into Australian investment portfolios. Yet, in my opinion, they present some of the best growth opportunities for the 21st century.

ASIA’s primary focus is on tech companies and you’ll find some familiar names in its holdings. There’s Afterpay Ltd’s (ASX: APT) new business partner Tencent Holdings, as well as Alibaba, JD.com and Baidu (sometimes called the Google of China). ASIA has returned an average of 14.6% per annum since its inception in 2018.

Foolish takeaway

For a diversity play, as well as exposure to significant growth opportunities, I believe these 3 ETFs are top picks for ASX growth investors today!

More reading

• Here are all the ASX 200 shares that have doubled or more since the bottom of the bear market
• Is Afterpay an ASX blue chip of tomorrow?
• Why Aristocrat Leisure, Afterpay, Corporate Travel, and Sydney Airport are pushing higher
• Why Afterpay and these ASX shares just hit multi-year highs
• ASX 200 drops 0.4%, Chinese threat to Australian iron

Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ETFS Morningstar Global Technology ETF. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. The Motley Fool Australia owns shares of AFTERPAY T FPO and BETA CYBER ETF UNITS. 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) dropped 1% on Friday as ASX 200 investors worry about what China is going to do next with Australia.

ASX investors had to contend with the fact that China wasn’t willing to issue a GDP target this year according to the Australian Financial Review.

Here are some of the ASX 200 highlights from today:

Wesfarmers Ltd (ASX: WES) cuts down Target

Retail business Wesfarmers has announced a large restructuring of Target to try to boost overall profitability.

Between 10 to 40 large Targets will be converted to Kmarts, subject to landlord support. “Approximately” 52 Target Country stores will change to small format Kmart stores. Around 10 to 25 large Target stores and the remaining 50 Target Country stores will be closed. The Target store support office will be significantly reduced.

Kmart Group will take a non-cash impairment of between $430 million to $480 million. The industrial and safety division will also take a non-cash impairment of approximately $300 million.

The share price of the ASX 200 business was almost flat, finishing down 0.05%.

ASX 200 miners drop

ASX 200 investors sent the share prices of Australian resource shares on worries that China may hinder their shipments into China because of the Australian push for a coronavirus inquiry.

The BHP Group Ltd (ASX: BHP) share price fell 0.6%.

Rio Tinto Limited (ASX: RIO) saw its share price fall 2%.

The Fortescue Metals Group Limited (ASX: FMG) share price declined by just 0.2%.

Afterpay Ltd (ASX: APT) continues its march higher

The share price of the ASX 200 buy now, pay later business saw its share price rose by another 1.2% today after reporting strong growth of its US subsidiary.

The ASX 200 payments business has managed to add over 1 million customers in the US during the coronavirus period.

Afterpay has been one of the strongest performers since the market crash a couple of months ago.

More reading

• Myer share price bounces after announcing its doors will be reopening across the nation
• The latest ASX small caps broker picks to buy today
• 3 super strong ASX 200 blue chip shares to buy right now
• Here are all the ASX 200 shares that have doubled or more since the bottom of the bear market
• Is Afterpay an ASX blue chip of tomorrow?

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Wesfarmers 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 Myer Holdings Ltd (ASX: MYR) share price was one of the standout performers on the ASX today, closing 7.41% higher after being up by as much as 15.56% in early afternoon trade.

The department store operator released a COVID-19 trading update at midday today, flagging the reopening of all stores by the end of next week.

What did Myer announce?

Taking into account government measures across the different states and territories of Australia, Myer has reopened 24 stores over recent weeks on a staged and trial basis.

Given the easing of restrictions across the nation, Myer now has its sights set on a full-scale reopening. It will reopen all of its remaining stores from next Wednesday 27 May, aside from Karrinyup in Western Australia, which is expected to reopen on 30 May after the completion of refurbishment works. Additionally, click-and-collect services will be available at all stores.

Stores will operate with enhanced safety and cleaning measures, including increased frequency of cleaning, hand sanitiser stations, social distancing, and contactless payments.

The department store operator closed all stores nationwide in late March, temporarily standing down around 10,000 staff in the process. On 24 April, Myer revealed that its online business had “performed strongly” since the closure of brick-and-mortar stores. The company echoed a similar sentiment today, noting the online platform has “continued to perform strongly” over recent weeks.

Again borrowing from its April announcement, Myer assured investors it is “continuing to take all necessary measures to minimise costs, including engaging in ongoing discussions with suppliers and landlords.”

While the reopening of stores is certainly welcome news for shareholders, an announcement from Wesfarmers Ltd (ASX: WES) might have acted as a further driver in today’s share price rise.

This morning, the ASX conglomerate shared details of a major shakeup in its discretionary retail division. Addressing the unsustainable financial performance of Target, Wesfarmers flagged its intention to close up to 75 Target and Target Country stores.

Given Target stores rival Myer in many locations, this news could have also been lifting the Myer share price higher today.

More reading

• ASX 200 drops 1% on Friday
• ASX 200 down 0.2%: Wesfarmers overhauls Target, Sydney Airport has no plans to raise equity
• Wesfarmers share price lower after announcing major Target overhaul
• 3 high yield ASX dividend shares you can buy right now
• Is the Wesfarmers share price in the buy zone?

Motley Fool contributor Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Wesfarmers 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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If you’re looking to beat low interest rates with dividend shares, then I think the three listed below would be top options.

Here’s why I think they would be good options for income investors right now:

Coles Group Ltd (ASX: COL)

The first dividend share I would buy is this supermarket giant. I think Coles is a top option due to its defensive qualities and positive long term growth outlook. Combined with its cost cutting plans, I believe Coles is well-placed to grow its earnings and dividends at a solid rate over the next decade. Another positive is its favourable dividend policy of returning upwards of 90% of its earnings to shareholders. Based on this, I expect its shares to provide investors with a fully franked dividend yield of 4.1% in FY 2021.

Rural Funds Group (ASX: RFF)

Another dividend share to consider buying is Rural Funds. It is a property company that owns a diversified portfolio of high quality Australian agricultural assets that are leased to experienced agricultural operators. It generates its revenue from long-term leases across five sectors: almond orchards, cattle assets, vineyards, cotton assets, and macadamia orchards. Due to its lengthy tenancy agreements, Rural Funds has good visibility with its earnings. This means it has been able to provide guidance for the next couple of years. It plans to pay distributions of 10.85 cents per share in FY 2020 and then 11.28 cents per share in FY 2021. This equates to yields of 5.85% and 6.1%, respectively.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

A final option for income investors to consider buying is the Vanguard Australian Shares High Yield ETF. I think this exchange traded fund is a top option for investors that don’t have enough funds to diversify their portfolio effectively. This is because it provides investors with exposure to many of the highest yielding blue chip shares on the ASX through a single investment. At present I estimate that its units provide a forward dividend yield of ~4.5%.

More reading

• 3 super strong ASX 200 blue chip shares to buy right now
• Wesfarmers share price lower after announcing major Target overhaul
• ASX retail stocks facing new billion-dollar earnings scare during COVID-19 recovery
• 3 ASX retail shares to own for the next 20 years
• Is the Wesfarmers share price in the buy zone?

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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ASX small cap stocks are outrunning their larger counterparts since the bear market bottom on March 23.

The S&P/ASX Small Ordinaries (Index:^AXSO) bounced by nearly 40% since while the S&P/ASX 200 Index (Index:^AXJO) recovered by 22%.

There’s a real chance that smaller stocks can continue to outperform if we get firmer signs of the economic recovery from the COVID-19 pandemic.

That’s a big “if” but for the eternal optimists in us, there are still buying opportunities at the small end of the market even after the big run.

Here are two ASX small caps that brokers are urging investors to buy.

Dirt cheap

One that’s deeply undervalued is mining and construction engineering group NRW Holdings Limited (ASX: NWH), according to UBS.

The broker reiterated its “buy” recommendation on the stock after management’s latest trading update and guidance.

The group reported revenue of $1.6 billion and earnings before interest, tax, depreciation and amortisation (EBITDA) of $177 million for the 10 months to April.

“Annualised EBITDA and EBIT are 8% and 11% below UBSe, respectively,” said UBS.

“However, we expect this would not include claims recovery from higher COVID-19 related operating costs and we estimate profitability has historically been higher in Q4 vs Q3; both suggestive of upside risks.”

The broker’s 12-month price target on NRW is $4 a share.

Buy call retained

Another small cap that issued a trading update is Service Stream Limited (ASX:SSM). The infrastructure services group is forecasting FY20 EBITDA of around $108 million.

That’s below consensus estimates of $116 million and Macquarie Group Ltd’s (ASX: MQG) forecasts of $113.9 million.

The coronavirus fallout is impacting on group performance. The earnings miss is due to higher costs due to safety expenses, clients pausing work and the commencement of minor projects.

“With NBN activations remaining strong through 2H20, we suspect the weakness from delays are mixed and related to some reluctance on decision making from client to pursue projects and to interrupt connections in both utility and telecommunications whilst Australia works from home,” said Macquarie.

That’s good news in the sense that the headwind is transitionary. The broker also pointed out that Service Stream isn’t a beneficiary of the JobKeeper program unlike others. If the lift from the government program was excluded, Service Stream would be in a far superior position compared to peers.

Macquarie still expects Service Stream to be net cash positive by this financial year and reiterated its “outperform” recommendation on the stock with a price target of $2.88 a share.

More reading

• 3 super strong ASX 200 blue chip shares to buy right now
• Why this ASX infrastructure company could help protect your portfolio in a downturn
• Here are all the ASX 200 shares that have doubled or more since the bottom of the bear market
• Is Afterpay an ASX blue chip of tomorrow?
• Brokers name 3 ASX 200 shares to buy right now

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 Service Stream 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 S&P/ASX 200 Index (ASX: XJO) is home to a large number of quality blue chip shares for investors to choose from.

In fact, there are so many it can be hard to decide which ones to buy.

To narrow things down for you, I’ve picked out three blue chip shares which I think are in the buy zone right now. They are as follows:

Coles Group Ltd (ASX: COL)

I think Coles is a great blue chip option for those searching for a combination of value, growth, and income. At present I feel the supermarket giant’s shares are trading on an attractive valuation in comparison to its peers. Especially given its solid growth potential thanks to its focus on automation, cost cutting, and expansion opportunities. In respect to automation, this focus is expected to lead to margin improvements over the long term. I feel this bodes well for Coles’ dividend growth over the next decade.

Goodman Group (ASX: GMG)

Another blue chip to consider buying is Goodman Group. It is an integrated commercial and industrial property group which owns, develops and manages industrial real estate in 17 countries. Goodman Group has made some very smart investments over the last decade, which I feel positions it perfectly for long term growth. These include gaining exposure to the structural tailwinds of the ecommerce market. Given how quickly online shopping is growing, these assets are likely to be in demand for a long time to come and should underpin solid earnings and distribution growth throughout the 2020s.

REA Group Limited (ASX: REA)

Another blue chip share to consider buying is REA Group. I think the property listings company is a great option due to the resilience of its business model. Even though listings volumes were down during 7% during the third quarter, it didn’t stop REA Group from growing its earnings. The company posted a 1% increase in revenue to $199.8 million and an 8% lift in operating earnings to $119.6 million. And while trading conditions are likely to remain tough in the near term because of the pandemic, I expect its earnings growth to accelerate once the crisis passes. I feel this makes it worth being patient with its shares.

More reading

• Here are all the ASX 200 shares that have doubled or more since the bottom of the bear market
• Is Afterpay an ASX blue chip of tomorrow?
• Brokers name 3 ASX 200 shares to buy right now
• Is Telstra about to be caught in a new mobile phone war?
• ASX 200 down 0.2%: Wesfarmers overhauls Target, Sydney Airport has no plans to raise equity

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET. The Motley Fool Australia has recommended ResMed 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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