Tag: Motley Fool Australia

ASX dividend shares could be the only way to make good income from your money at the moment.

I’m not talking about some blue chip shares like Westpac Banking Corp (ASX: WBC) or Transurban Group (ASX: TCL). Income investors haven’t been able to rely on reliable dividend payments from them in 2020.

I’m talking about ASX dividend shares with reliable business models that continue to increase their income payments to shareholders even through COVID-19.

A business that can increase its dividend during this period is definitely worth considering for an income portfolio:

Dividend share 1: APA Group (ASX: APA)

APA is my preferred infrastructure ASX dividend share. It doesn’t require a certain number of air passengers or cars to generate its earnings.

APA owns a large network of pipelines across Australia, it’s about 15,000 km in size. It actually delivers around half of Australia’s natural gas.

The energy asset giant also owns (or has interests in) gas storage facilities, gas-fired power stations and renewable energy generation (wind and solar).

APA has grown its distribution every year for a decade and a half. It funds that distribution from its annual cashflow, which is regularly growing. As more projects and investments are completed, that cashflow increases and this will fund higher distributions over time.

Based on the FY20 distribution, at the current APA share price, it offers a distribution yield of 4.5%. Not a bad starting yield for an ASX dividend share.

Dividend share 2: Rural Funds Group (ASX: RFF)

Rural Funds is an agricultural real estate investment trust (REIT). It owns a variety of farm types including almonds, macadamias, cattle, cotton and vineyards.

As a farmer there are commodity risks, just like there are with miners. However, as a landlord Rural Funds isn’t exposed to those sorts of risks. It’s the tenant that takes on the operational risks.

The farms are spread across states and climactic conditions, so Rural Funds is well diversified. It recently announced an $81.1 million sugar cane farm acquisition which it plans to progressively turn into macadamia orchards and the rest will be able to be used for cropping.

The ASX dividend share aims to increase its distribution by 4% per annum, which it has been successful at doing since it first listed and started paying a distribution several years ago.

We all need to keep eating food, so Rural Funds’ rental income should keep flowing from its quality tenants like JBS and Olam. That rental income is steadily growing thanks to contracted rental indexation of either a fixed 2.5% increase or it’s linked to CPI inflation, plus market reviews.

Rural Funds has provided guidance of a FY21 distribution of 11.28 cents per share, which equates to a 5.4% yield at the current Rural Funds share price.  

Dividend share 3: WAM Microcap Limited (ASX: WMI)

WAM Microcap could be one of the best ASX dividend shares on the ASX in my opinion. It’s a listed investment company (LIC) run by Wilson Asset Management which invests in small cap ASX shares. Generally, those targets have market caps under $300 million.

ASX small caps have the potential to make the biggest returns for investors because they’re not followed by many investors, so they’re priced lower. Those small businesses also have a lot of growth potential. It’s much easier growing a company’s market cap from $200 million to $400 million than it is to go from $20 billion to $40 billion.

WAM Microcap can turn the investment returns it generates into a big, growing dividend for its shareholders. The WAM Microcap board have an aim of growing the dividend, assuming it makes sense to do so and it has sufficient profit reserves and franking credits.

Since inception in June 2017, the WAM Microcap portfolio has returned 15.9% per annum before fees, expenses and taxes. That’s a very strong performance and allows it to fund a solid dividend.

The ASX dividend share recently announced a bigger ordinary dividend, a special dividend and a capital raising. I am very likely to participate in that capital raising, even if I just do a fairly small purchase.

At the current WAM Microcap share price, using the FY20 annual ordinary dividend of 6 cents per share, it has an ordinary grossed-up dividend yield of 5.9%.

Foolish takeaway

I really like each of these ASX dividend shares. Right now I think WAM Microcap could be the best pick. It has the highest yield and may it generate the strongest total returns over the long-term. But I think both APA and Rural Funds are likely to deliver very reliable cashflow over the next 12 months and beyond. 

More reading

• Buy these ASX dividend shares if the RBA cuts rates
• ASX 200 edges lower, Melbourne enters stage 4 lockdown
• Is the Wesfarmers or Rural Funds share price a buy for dividend income?
• WAM Microcap share price rises on big special dividend
• 3 of the best ASX dividend shares to buy right now

Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED and WAM MICRO FPO. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. The Motley Fool Australia owns shares of APA Group and Transurban 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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On Tuesday the S&P/ASX 200 Index (ASX: XJO) was in sensational form and stormed notably higher. The benchmark index jumped 1.9% to 6,037.6 points.

Will the market be able to build on this on Wednesday? Here are five things to watch:

ASX 200 to give back some gains.

The ASX 200 index looks set to give back some of its gains on Wednesday. According to the latest SPI futures, the benchmark index is expected to open the day 15 points or 0.25% lower. This is despite there being another positive night of trade on Wall Street. Overnight, the Dow Jones rose 0.6%, the S&P 500 climbed 0.35%, and the Nasdaq index pushed 0.35% higher.

Oil prices push higher.

It looks set to be a positive day for energy producers including Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL). According to Bloomberg, the WTI crude oil price has risen 1.3% to US$41.54 a barrel and the Brent crude oil price has climbed 0.5% to US$44.36 a barrel. Traders were buying oil after inventories declined.

Gold price smashes through US$2,000.

Gold miners including Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) will be on watch today after the gold price surged higher again. According to CNBC, the spot gold price jumped 2.3% to US$2,033.60 an ounce. Gold hit a record high on the belief that major U.S. stimulus is coming.

Wesfarmers rated neutral.

Analysts at Goldman Sachs have been looking at the impact that the lockdowns will have on Wesfarmers Ltd (ASX: WES). The broker has revised its FY 2021 earnings before interest and tax forecasts lower by 3.9% to reflect the lockdowns in Metropolitan Melbourne and current store numbers. This has resulted in Goldman reaffirming its neutral rating and lowering its price target to $42.00. This compares to the current Wesfarmers share price of $46.29.

Qube given buy rating.

Goldman Sachs is far more positive on the Qube Holdings Ltd (ASX: QUB) share price. This morning the broker retained its buy rating and $3.46 price target on the shares of the integrated provider of import and export logistics services. It commented: “While QUB remains substantially exposed to potential weakness in trade and container volumes, we believe it retains sufficient operational flexibility to withstand a material downturn and reiterate our positive view on the stock.”

More reading

• Should you buy ASX gold shares or FAANG stocks in August?
• ASX 200 jumps 2% higher, Afterpay soars
• Looking for good ASX dividend shares? I would buy these right now
• How will Victoria’s stage 4 lockdowns impact ASX shares?
• ASX 200 jumps 2%: Big four banks rebound, Wesfarmers update, Afterpay rockets

Motley Fool contributor James Mickleboro 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The FAANG stocks – Facebook, Amazon.com, Inc (NASDAQ: AMZN), Apple, Netflix, and Google parent Alphabet Inc (NASDAQ:GOOGL)(NASDAQ: GOOG) – have now all reported second-quarter 2020 earnings. One fact is abundantly clear: A new era dominated by these tech giants is here, and it isn’t going away anytime soon.

Barring the advice to just buy them all, which is the better buy right now?

Amazon is a standout winner that – even valued at over $1.5 trillion – continues to find new ways to separate itself from the pack. The pandemic is driving a surge in e-commerce demand. Meanwhile, it could be argued that Google is the biggest loser compared to its tech titan peers, posting its first-ever quarterly revenue decline. Right at the moment, it’s easy to argue Amazon is by far the better buy, but a few items bear consideration first. 

All-out growth versus incredibly high profit margins

Amazon and Google will both benefit from long-term secular growth trends: Amazon from the migration to online retail (shockingly, the latest Census Bureau numbers imply less than 20% of retail purchasing happens online in the U.S.), and Google from the switch to internet advertising (half of ads were digital in 2019 for the first time, and the percentage is expected to keep rising).

But with COVID-19 rapidly reshaping the global economy, e-commerce is the winning investment theme of the moment. Amazon’s overall revenue surged 40% in Q2 2020 to $88.9 billion, driven by 43% growth in North American sales, slightly offset by a gain of “only” 38% internationally and a 29% gain for the Amazon Web Services (AWS) cloud computing platform. Meanwhile, Alphabet revenues fell 2% from a year ago to $38.3 billion, with Google, YouTube, and partner ad sales falling 9%, offset by Google Cloud’s 43% advance (as it slowly narrows the gap with AWS) and “other” revenue (YouTube subscriptions, Play app store, hardware, etc.) increasing 26%.

Thanks to Amazon’s top-line momentum, its stock is up 72% this year to Alphabet’s 10% gain. Amazon predicted 24% to 33% growth in the third quarter, with no outlook provided by Google. Clearly Amazon wins the momentum stock challenge, but the amount of cash a company can hang onto is also important.

The bulk of Amazon’s sales comes from retail and related services, and operating profit margins are far lower here than in other areas of the tech world. Total operating profit in the quarter was $5.84 billion (good for an operating margin of 6.6%), with $3.36 billion of that coming from AWS alone. Google, on the other hand, posted an operating profit of $6.38 billion (a 17% operating margin). Granted, both of these figures factor in the large sums of money Amazon and Google spend on disruptive investments to foster future growth and innovation. Still, when using free cash flow (revenue minus only cash operating and capital expense outflows), Amazon’s $19.4 billion over the last 12 months is far smaller than Google’s $31.2 billion.

In terms of valuation, that makes Alphabet stock something almost resembling a value — at least for a high tech name. Based on the current market cap of $1 trillion, Alphabet trades for 32.1 times trailing 12 month free cash flow to Amazon’s 81.5. The relative value on Google counts for something.  

Don’t ignore the war chest

What does free cash flow matter? It’s the sum of cash that gets added to (or subtracted from) the balance sheet at the end of each quarter. And it matters a great deal, especially in the next decade as big tech gets bigger and needs to find new projects to keep growth going. 

At the end of Q2, Google had $120 billion in cash and marketable investments on its balance sheet, and a paltry sum of debt at just $4.55 billion. Amazon is no slouch here with $55.0 billion in cash and marketable securities, but long-term debt of $23.4 billion. Google’s war chest wins, against Amazon or any other mega-tech name out there.

Put another way, Google is one of the most deep-pocketed organizations on the planet and its lead is growing. That too counts for something when deciding which stock is a buy. For now, Amazon looks like the better buy of the moment, with e-commerce expanding at a torrid pace and the company carrying the torch of world-shaping disruption. But over the long term, don’t for a second write off Google.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• 3 ways to play the skyrocketing tech shares
• Better Buy: Netflix vs. Amazon
• Why Amazon’s share price is set to leap on the opening bell
• Meet the ASX stocks that are about to get a boost from Facebook and Google
• US tech shares deliver massive results – what does it mean for ASX tech shares?

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Nicholas Rossolillo and his clients own shares of Alphabet (C shares), Apple, and Facebook. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Amazon and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), and Amazon. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The August profit reporting season is described by some as the worst ever for the ASX, but this may not be true for at least one sector.

This sector is the only one that UBS is predicting can deliver earnings per share (EPS) growth for FY20.

If you guess mining, you’d be wrong. While Rio Tinto Limited (ASX: RIO) posted a decent result last week, its interim EPS fell 3%!

The only ASX sector growing profits

The mining-beating sector is discretionary retail even though this sounds counter intuitive. Retailers tend to be among the hardest hit in recessionary environments, just like during the GFC.

But this downturn that’s triggered by COVID-19 is different from any other we’ve encountered in living memory.

The pandemic brought about a change in consumer behaviour, while government stimulus provided an extra tailwind. UBS is tipping the sector will post a 5.9% increase in EPS for the year.

Recent guidance shines light

The recent trading updates from JB Hi-Fi Limited (ASX: JBH) and Kogan.com Ltd (ASX: KGN) are only but two examples of retailers growing sales and earnings.

However, this doesn’t mean the best opportunities are in the consumer discretionary sector. If anything, the fiscal cliff (when government support is tapered or withdrawn in October) poses a risk to the sector.

While many retailers will post decent FY20 profit results, their outlook for the next 12 months may not support their stellar share price run, in my view.

ASX stocks that can beat expectations

If you are looking for upside surprises during the reporting season, you probably will need to look elsewhere, and UBS highlighted a few to watch.

Among the S&P/ASX 200 Index (Index:^AXJO) miners, the BHP Group Ltd (ASX:BHP) share price, Alumina Limited (ASX: AWC) and South32 Ltd (ASX: S32) share price could jump as UBS thinks they could deliver better than expected results.

Others in the top 200 benchmark that the broker believes can beat expectations this month include the AMCOR PLC/IDR UNRESTR (ASX: AMC) share price and RESMED/IDR UNRESTR (ASX: RMD) share price.

Better than expected outlook

Meanwhile, the larger cap stocks that could please investors with their outlooks are Amcor, Goodman Group (ASX: GMG) and Charter Hall Group (ASX: CHC).

At the smaller end of the market, UBS is optimistic about the Breville Group Ltd (ASX: BRG) share price and Nextdc Ltd (ASX: NXT) share price. The broker believes both will please on their results and outlook statements.

More reading

• Should you buy ASX gold shares or FAANG stocks in August?
• ASX 200 jumps 2% higher, Afterpay soars
• 3 high quality blue chip ASX 200 shares to buy
• 4 things you need to know about the RBA’s rate decision today
• 2 ASX tech shares to buy and hold beyond 2026

Brendon Lau owns shares of BHP Billiton Limited, Breville Group Ltd, Rio Tinto Ltd., and South32 Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd. The Motley Fool Australia owns shares of and has recommended Amcor Limited. The Motley Fool Australia has recommended Kogan.com ltd and 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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Both FAANG stocks and ASX gold shares have outperformed in 2020. But which one is better for investors chasing strong capital gains?

Should I buy FAANG stocks?

I think your views on the August earnings season will largely make the decision for you here.

If you’re bullish on the tech sector to continue its gains, then FAANG stocks seem like an obvious answer. While you can’t buy these shares directly on the ASX, there are some exchange-traded funds (ETFs) on the ASX that provide exposure to FAANG stocks.

One option is ETFS FANG+ ETF (ASX: FANG) which has concentrated positions in a handful of United States and China-based tech companies.

The other option is to buy a broad-market, US ETF like BetaShares NASDAQ 100 ETF (ASX: NDQ). FAANG stocks make up a huge proportion of the US market which means this ETF could be an easy way to tilt your portfolio towards US tech.

What about ASX gold shares?

There’s no doubt ASX gold shares have been a good buy this year.

The Saracen Mineral Holdings Limited (ASX: SAR) share price is up 83.1% as gold prices have surged.

That’s despite a 2.4% drop yesterday in this ASX gold share as investors priced in the new Victorian lockdown restrictions and economic impacts.

The St Barbara Ltd (ASX: SBM) share price is up 26.0% in 2020 while Northern Star Resources Ltd (ASX: NST) shares have climbed 39.8%.

Of course, those that bought in the March bear market have done well. However, if we see more market volatility in the months ahead, ASX gold shares could climb even higher.

This month sees many top ASX companies report their full-year or half-year earnings. That means investors will be watching closely to get a gauge on the health of the Aussie economy right now.

If you think we’re in for more short to medium-term pain, ASX gold shares could be a good way to hedge against further drops in the S&P/ASX 200 Index (ASX: XJO).

Foolish takeaway

There are no guarantees in investing. But naturally, we expect to see some good, long-term returns for taking on investing risks.

Both FAANG stocks and ASX gold shares have performed well this year. Right now, no one knows which one will outperform by the end of 2020 or beyond.

However, I think the August earnings season that’s kicking off this week and next may provide us with a pretty good indication.

More reading

• This is the only ASX sector tipped to report earnings growth this reporting season
• 3 high quality blue chip ASX 200 shares to buy
• I don’t normally buy ETFs, but I would invest in these 2
• 4 things you need to know about the RBA’s rate decision today
• 3 ways to play the skyrocketing tech shares

Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended BETANASDAQ 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) has risen 1.9% to 6,038 points.

Here are some of the main headlines from today:

RBA holds interest rates

The Reserve Bank of Australia (RBA) announced today that it is keeping the official interest rate at 0.25%. However, it is planning to start buying government bonds again.

RBA boss Dr Lowe said that extending stimulus like jobkeeper was good for the economy and it seems like stimulus will be needed for some time.

Plenty of ASX 200 finance related businesses saw their share prices rise today.

The Australia and New Zealand Banking Group (ASX: ANZ) share price climbed 2.4%, the Commonwealth Bank of Australia (ASX: CBA) share price went up 2.5%, the Macquarie Group Ltd (ASX: MQG) share price rose 2.6%, the National Australia Bank Ltd (ASX: NAB) share price grew 1.5% and the Westpac Banking Corp (ASX: WBC) share price increased 2.2%.

Afterpay Ltd (ASX: APT) finishes its capital raising

The buy now, pay later business today announced that its capital raising finished on 30 July 2020. Afterpay had given retail shareholders the option to apply for up to $20,000 without needing to pay brokerage and other transaction costs.

The ASX 200 company said that the raising was set at a share price of $66 per share, being the same share price for institutional and professional investors.

Afterpay said that it raised approximately $136 million from retail shareholders. Around 19% of shareholders applied for an average of $13,300 worth of new shares.

The Afterpay share price rose by almost 7% today.

BWP Trust (ASX: BWP)

BWP Trust released its FY20 result today. If you don’t know what the business does, it’s a property landlord. It predominately leases its large warehouses to Bunnings.

Revenue dropped 0.3% to $1.56 million and profit before valuation gains on its investment properties was up 1% to $117 million. The property trust achieved like for like rental growth of 2.4% for the 12 months to 30 June 2020.

Net profit rose 24.4% to $210.6 million and its net tangible assets per unit increased by 4.8% to $3.06. The gearing ratio for the ASX 200 share was just 19.7%.

BWP Trust increased its final distribution by 1% to 9.27 cents per unit, adding to the 1% increase of the interim distribution.

Management expect the FY21 distribution to be similar to the FY20 distribution.

COVID-19 closure impacts on retail businesses

Various major retail businesses announced the impact of the Victorian stage four restrictions today.

JB Hi-Fi Limited (ASX: JBH) said its Melbourne stores are being closed but it can fulfill orders with home delivery or contactless click and collect. The ASX 200 company’s warehouses and Melbourne metro store network will be operational to fulfil online and commercial orders.

Woolworths Group Ltd (ASX: WOW) said that 22 Big W stores will be closed, though regional stores can continue to operate. Home delivery will continue and contactless in-store pick-up, plus ‘drive-up’ is offered at 15 of the 22 impacted stores. All Victorian ALH hotels are closed. Woolworths is working hard to ensure its meat supply (and other products) can continue.

Wesfarmers Ltd (ASX: WES) announced that all of its retail businesses – Bunnings, Kmart, Target and Officeworks – will need to shut to retail customers.

However, all of its online operations can continue with home delivery and contactless click and collect options.

Bunnings will remain open for trade customers but will be closed for in-store retail customers.

Kmart and Target stores in metropolitan Melbourne won’t be able to service customers in-store.

Officeworks can continue to service business customers, but will be closed for in-store retail customers.

Wesfarmers said that in FY20 it derived approximately 17% of its retail sales from stores in metropolitan Melbourne.

The ASX 200 business said that its industrial businesses are expected to continue to operate. Those include Blackwoods, Workwear Group Coregas, Australian Vinyls and Modwood.

More reading

• This is the only ASX sector tipped to report earnings growth this reporting season
• Integrated Research share price hits record high – should you invest?
• Looking for good ASX dividend shares? I would buy these right now
• Woolworths provides update on the impact of COVID-19 restrictions
• 3 high quality blue chip ASX 200 shares to buy

Motley Fool contributor Tristan Harrison 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 AFTERPAY T FPO, Wesfarmers Limited, and 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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The share price of software solutions provider Integrated Research Limited (ASX: IRI) reached an all-time high in early afternoon trade, surging over 5% to a new high of $4.40.

The Integrated Research share price got off to a hot start today after the company informed the market it would be releasing full-year earnings for FY19 on 20 August. The share price has, however, also been assisted by the collective gains of the ASX technology sector more broadly.

Today’s result means the company has more than doubled in value since bottoming out at $2.19 in March. But I think the Integrated Research share price still has some growth ahead of it, particularly over the medium to long term.

What’s driving the Integrated Research share price to an all-time high during this period of extreme volatility?

Impressive FY19 earnings

The Integrated Research share price has improved since the company, which is a leading global provider of management solutions for critical unified communications, payments, contact centres and IT infrastructure, provided a sneak-peak for expected FY19 profit guidance on 17 July.

This announcement indicated that revenue was expected to grow by around 9%-10% up to as much as $111 million. Likewise, profit after tax was touted to see an improvement of around 8%-11%.

Despite last month’s announcement being subject to the necessary financial auditing requirements, the Integrated Research share price has been bolstered by over 13% since these figures were revealed.

Why I think the Integrated Research share price is still a buy

Although we’ll know for sure just how well the company has performed in a couple of weeks, I like Integrated Research for its unique product offering, ‘Prognosis for Unified Communications (UC)’.

In last month’s profit guidance update, the company cited that its 13%-15% increase in licence sales was predominantly driven by its UC products.

Prognosis for UC is a performance management solution for voice, video and collaboration ecosystems, allowing its clients to monitor, troubleshoot, and optimise complex UC environments on-premises, in the cloud, or both.

Integrated Research offers the Prognosis suite in over 60 countries worldwide, and the company has benefitted from contracts with Avaya, Microsoft, Cisco, AT&T and Australia and New Zealand Banking Group Limited (ASX: ANZ) among others.

I believe the growth of the company’s ‘Prognosis’ platform is a key factor currently driving the positive movements of its share price.

Foolish takeaway

With working from home protocols resulting in unprecedented demand for software as a service (SaaS) and enhanced capabilities in the cloud itself, I see companies such as Integrated Research continuing to perform well over the medium to long term.

This company remains a watchlist item for me at this point, but I’ll be keeping a close eye on its Prognosis UC platform over the coming months.

More reading

• ASX 200 jumps 2% higher, Afterpay soars
• Why I would invest $50,000 into these excellent ASX shares
• Why ASX bank stocks are the worst performing group today
• ASX 200 up 0.1%: Big four banks tumble, Flight Centre sinks, SEEK cancels final dividend
• Why ANZ, Flight Centre, SEEK, & Tabcorp shares are dropping lower

Toby Thomas has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Integrated Research 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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Although the Reserve Bank didn’t cut rates to zero today, it doesn’t make it any easier for income investors to generate a liveable income from term deposits.

Unfortunately, I suspect that it will be some time until rates are back to “normal” levels again. Which I believe makes it even more important to find good dividend shares to invest your hard-earned money into.

But what makes a good dividend share? When looking for dividend shares, I think investors should look for robust business models, positive growth outlooks, and strong balance sheets.

Two that tick a lot of boxes for me are listed below. Here’s why I think they are dividend shares to buy:

BWP Trust (ASX: BWP)

The first dividend share that I’m a big fan of is BWP Trust. It is the largest owner of Bunnings properties in Australia. This morning the company released its full year results and revealed a 1% increase in profit before gains on investment properties to $117.1 million. Incredibly, at a time when retail properties are being impaired, BWP Trust recognised a $93.6 million increase in the gains in fair value of its investment properties. Management advised that this reflects the continuing strong market support for Bunnings Warehouse properties from an investment and risk perspective. Looking ahead, BWP Trust expects to pay a distribution in the region of 18.29 cents per unit in FY 2021. This works out to be an attractive 4.6% yield.

Wesfarmers Ltd (ASX: WES)

Another dividend share that ticks a lot of boxes for me is Wesfarmers. It has been a positive performer during the pandemic thanks largely to the aforementioned Bunnings brand. The good news is that with the government supporting the home improvements market with additional stimulus, I believe it is well-placed to continue its strong form in FY 2021 and underpin solid earnings and dividend growth for Wesfarmers. Another positive which I think is worth pointing out, is Wesfarmers’ strong balance sheet. This provides it with the flexibility to undertake earnings accretive acquisitions that could give its growth a boost in the coming years. Based on the current Wesfarmers share price, I estimate that it offers investors a fully franked forward 3.3% dividend yield.

More reading

• ASX 200 jumps 2% higher, Afterpay soars
• How will Victoria’s stage 4 lockdowns impact ASX shares?
• ASX 200 jumps 2%: Big four banks rebound, Wesfarmers update, Afterpay rockets
• Why the JB Hi-Fi share price is dropping lower today
• Wesfarmers share price higher on Victorian COVID-19 update

Motley Fool contributor James Mickleboro 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 Woolworths Group Ltd (ASX: WOW) share price was a strong performer on Tuesday.

The conglomerate’s shares charged over 2% higher to finish the day at $39.99.

Why did the Woolworths share price push higher?

Investors appear to have been buying Woolworths shares on Tuesday after the Victorian Government announced which businesses will be forced to close and which may stay open following the stage four lockdowns in metropolitan Melbourne.

As with rival Wesfarmers Ltd (ASX: WES), Woolworths will not be disrupted as much as some retailers.

What will happen to Woolworths’ Victorian stores?

This afternoon the company revealed how the lockdown will impact its businesses. According to the release, all its 22 BIG W stores in metropolitan Melbourne will be closed for six weeks from tomorrow under stage four restrictions.

Nine BIG W stores in regional Victoria will remain open for customers under Stage Three restrictions, with the remaining 148 BIG W stores outside Victoria continuing to trade as normal.

While BIG W’s doors may be closing in Melbourne, that won’t mean shoppers can’t still purchase goods. BIG W will provide contactless in-store pick up services from all stores and drive up services in 15 of the 22 impacted stores. It will also continue to offer contactless home delivery to all Victorians.

The company’s ALH Hotels business had already closed 77 of its 80 venues in Victoria during the stage three restrictions. The remaining venues will close their doors tomorrow, with those outside Victoria continuing under applicable state regulations.

Woolworths supermarkets will remain open largely as normal during stage four. So there’s certainly no need to go out and panic buy items such as toilet roll.

Woolworths Group CEO, Brad Banducci, commented: “These are challenging times in Victoria and I can only imagine the stress and anxiety being felt by the entire community. We are focused on doing everything we can to minimise the impact on our team members, including temporary opportunities to support other businesses in the Woolworths Group where possible.”

“We remain committed to doing whatever it takes to help keep our team and customers safe in Victoria and right across Australia,” he concluded.

Woolworths intends to provide a further update with its FY 2020 results on 27 August.

More reading

• 3 high quality blue chip ASX 200 shares to buy
• The ASX stocks hit by Victoria’s stage 4 forced shutdowns
• Analysis: Is the Woolworths share price good value in August?
• Here’s how to start investing with $5k
• Is the Woolworths 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 Wesfarmers Limited and 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.

The post Woolworths provides update on the impact of COVID-19 restrictions appeared first on Motley Fool Australia.

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One group of shares that are particularly popular with investors are blue chip shares.

A blue chip is a large and well-established company that has been around for many years and is often a leader in its field.

The good news is that the ASX is home to a large number of blue chips for investors to choose from. While not all of these shares are necessarily buys, I believe the ones listed below are standouts picks.

Here’s why I would buy these blue chip ASX 200 shares:

Coles Group Ltd (ASX: COL)

I think Coles is a great blue chip option for investors. I’m a big fan of the supermarket operator as I believe it offers an attractive combination of growth and income. This is due to its positive long term outlook thanks to its defensive qualities, focus on automation, cost cutting, and expansion opportunities. In respect to automation, this focus is expected support margin improvements over the long term. I feel this bodes well for Coles’ dividend growth over the next decade.

Telstra Corporation Ltd (ASX: TLS)

Another blue chip share to consider buying in August is Telstra. After several disappointing years of earnings declines and dividend cuts, I believe the future is looking increasingly positive for the telco giant. This is thanks to its sizeable cost cutting, the simplification of its business, and the easing of the NBN headwind. In fact, Telstra’s operating earnings would have increased slightly during the first half if it were not for this headwind. Overall, I believe now could be the time to make a long term investment in its shares.

Woolworths Limited (ASX: WOW)

A final blue chip share to consider buying is this conglomerate. I like Woolworths due to its quality brands, defensive qualities, and strong management team. Combined, I believe they have put the company in a position to deliver solid earnings and dividend growth over the long term. Another positive is the planned spin off of its hotels business. Although this has been pushed back because of the pandemic, I expect it to unlock value for shareholders if it goes ahead in the future.

More reading

• Woolworths provides update on the impact of COVID-19 restrictions
• Earnings season: What to expect from the CSL FY 2020 result
• 4 things you need to know about the RBA’s rate decision today
• Indiana Resources share price jumps to 3-year high on acquisition news
• ASX 200 jumps 2%: Big four banks rebound, Wesfarmers update, Afterpay rockets

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