Tag: Motley Fool Australia

The BHP Group Ltd (ASX: BHP) share price will be on watch on Tuesday after the release of its fourth quarter and full year production update.

How did BHP perform?

BHP has just completed a solid 12 months with production guidance met for iron ore, metallurgical coal, and operated copper and energy coal assets.

Petroleum production fell a touch short of guidance due to lower than expected demand due to the impact of COVID-19. Whereas production at Antamina and Cerrejon was lower than guidance due to the temporary suspension of operations due to the pandemic. Both operations are now ramping back up.

Here’s a summary of its production for FY 2020 and expectations for next year:

Petroleum production was 109 MMboe, down 10% on the prior corresponding period. This was despite a strong finish to the year thanks to increased production at Bass Strait due to higher seasonal demand. In FY 2021, BHP is forecasting production of 95 to 102 MMboe. This represents a 6% to 13% decline.

Copper production was up 2% in FY 2020 to 1,724 kt. This was despite lower production in the fourth quarter due to the aforementioned temporary operating suspensions. Copper production is expected to decline by 13% to 21% in FY 2021 to 1,480 kt to 1,645 kt. This is due largely to a sharp reduction at the key Escondida operation.

Iron ore production was the highlight of FY 2020 with 248 Mt. This was up 4% on the prior corresponding period thanks to a strong fourth quarter performance at Mining Area C and Yandi. Pleasingly, production costs are expected to be in line with guidance at WAIO and BHP has benefited greatly from a 16% increase in average price realised to US$77.36 a tonne. In FY 2021 production is forecast to be 244 Mt to 253 Mt. This will be a 2% decline to a 2% increase.

Metallurgical Coal production came in a 41 Mt in FY 2020, down 3% year on year. A very strong performance in the fourth quarter prevented a much worse result. Looking ahead, in FY 2021 production is expected to be in the region of 40 Mt to 44 Mt. The low end represents a 3% decline and the high end represents a 7% gain.

Elsewhere, Energy Coal production was down 16% to 23 Mt and Nickel production fell 8% to 80 kt. The latter is expected to rebound with production growth of 6% to 19% in FY 2021. Whereas Energy Coal production guidance for the new financial year ranges from a 5% decline to 4% growth.

What else did BHP announce?

The Big Australian also gave investors an idea of what its finances will look like when it reports its full year results next month.

Management advised that its unit costs are expected to be in line with guidance for its WAIO, Queensland Coal, and NSWEC operations. Whereas Petroleum and Escondida costs are expected to slightly better than guidance.

There will be an increase in closure and rehabilitation provisions for closed mines of US$600 million to US$700 million and impairments of US$450 million to US$500 million to property, plant and equipment at Cerro Colorado.

It also has forecast costs directly attributable to COVID-19 of US$100 million to US$150 million after tax.

Nevertheless, BHP’s net debt is expected to be at the lower end of its target range of US$12 billion to US$17 billion.

BHP Chief Executive Officer, Mike Henry, commented: “Our diversified portfolio and high quality assets, together with our strong balance sheet, make us resilient to the ongoing uncertainty in the markets for our commodities. We expect to continue to generate solid cash flow through the cycle and we remain confident in the outlook for demand for our products over the medium to long-term.”

“We continue to focus on becoming even safer, delivering exceptional operational performance, maintaining disciplined capital allocation, creating and securing more options in future facing commodities and building social value. We have learned new ways of working, both internally and with others, through the COVID-19 pandemic. We will seek to embed these in a way that helps to reinforce these priorities,” he concluded.

More reading

• Why you should buy ANZ and these ASX dividend shares for income
• Why the South32 share price is falling today
• 3 ASX shares to leverage the booming iron ore price
• ASX 200 Weekly Wrap: Blue chip shares pull ASX 200 back over 6,000 points
• Why I would buy a2 Milk and these fantastic ASX 50 shares

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

The post BHP share price on watch after robust FY 2020 update appeared first on Motley Fool Australia.

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If you’re a fan of a particular brand or retail outlet, it can pay to look into the company behind it. Many of the products and services we consume are produced by companies trading on the ASX. As our consumption habits shift, so do the fortunes of the companies catering to them. By monitoring your own consumption you can gain insights into long term trends that can influence the way ASX shares perform.

Here we take a look at 7 ASX shares you probably already buy from. 

Wesfarmers Ltd (ASX: WES) 

Wesfarmers is behind a stable of retail brands including Bunnings, Officeworks, Kmart, and Target. The Wesfarmers share price has recovered strongly from the March downturn and it is now trading on par with February levels, i.e. near record highs.

Bunnings and Officeworks both saw a surge in sales as a result of lockdowns and the move to remote working. Consumers spent time and money setting up home offices and getting stuck into DIY. As a result, Officeworks’ sales grew 27.8% in the second half and Bunnings’ grew 19.2%. 

Coles Group Ltd (ASX: COL)

Spun off from Wesfamers in 2018, Coles is behind 2,500 retail outlets nationally. This includes 800 supermarkets, 900 liquor stores, and more than 700 fuel and convenience retailers. The Coles share price remained relatively robust in the March correction, losing around 17% from peak to trough. Coles shares have now surpassed pre-Covid-19 levels and are trading near all-time highs.

Coles saw significant sales growth in the third quarter as the result of stockpiling and panic buying. Supermarkets sales grew 13.8%, with overall sales revenue up 12.9% to $9.2 billion. 

Woolworths Group Ltd (ASX: WOW) 

If you don’t shop at Coles, there’s a strong chance you shop at Woolworths, Australia’s other major supermarket chain. Woolworths operates some 995 supermarkets across Australia. Including its liquor and Big W brands, Woolworths is behind some 3,000 stores across the country. The Woolworths share price fell 20% in the March dip, but has since recovered somewhat. It is still, however, trading down 10% from its February high.

Woolworths experienced a similar rush in sales to Coles in the third quarter. The Australian food business saw growth of 11.3%, Big W grew sales by 9.5%, and liquor also grew 9.5%. The Hotels business saw a 12.9% drop in sales with the closure of venues. 

JB Hi-Fi Limited (ASX: JBH)

JB Hi-Fi is Australia’s largest home entertainment retailer with almost 200 stores throughout Australia and New Zealand. JB Hi-Fi acquired The Good Guys in 2016, a home appliances retailer with a network of over 100 stores. The JB Hi-Fi share price has recovered strongly from the March downturn and is now just 3% down from its February peak.

JB Hi-Fi also saw a surge in sales in the third quarter as consumers set up home offices and searched for in-home entertainment. Australian JB Hi-Fi sales were up 20% in the half year to June. The Good Guys sales were up 23.5%. JB Hi-Fi New Zealand sales fell 19.3% as a result of closures during lockdowns. 

Kogan.com Ltd (ASX: KGN)

Kogan is an online retailer selling a wide range of products from consumer electronics, to appliances, homewares, hardware, and toys. The company sells its own stock and provides for third party sellers via Kogan Marketplace. The company also owns and operates a suite of private label brands. The Kogan share price has surged since its March low of $4.16 with shares currently trading at $17.34.

The company grew gross sales by more than 100% in April and May with gross profit growing by more than 103% over the same period. Kogan is benefitting from the ongoing shift to ecommerce, which has been hastened by the onset of coronavirus. 

Premier Investments Limited (ASX: PMV)

Premier Investments is the company behind popular brands Peter Alexander, Smiggle, Portmans, Just Jeans, Jay Jays, Jacque E, and Dotti. The company also holds a 28% stake in Breville Group Limited (ASX: BRG). The Premier Investments share price is up 82% from its March low but remains 23% below its February high.

Premier Investments closed stores during the first lockdown and took the hard line with landlords on rental payments. Pleasingly, during temporary store closures the retailer’s online sales surged. Online sales for Peter Alexander during the store closure period were up 295%. Incredibly, during the week ended 2 May, the brand’s online sales alone were up 18% on the previous years total sales across online and the 122 store network. 

Adairs Ltd (ASX: ADH)

Adairs is an omni-channel home furnishings retailer operating in Australia and New Zealand. Its product range includes bed linen, towels, homewares, soft and children’s furnishings, and some furniture. The Adairs share price has recovered strongly from the March downturn and is now close to reaching its pre-Covid-19 peak.

The retailer was forced to close stores during the first lockdown, but its online sales surged. Customers spending more time at home took the opportunity to upgrade home furnishings. Adairs reported a 92.6% increase in online sales in the 24 weeks to 14 June 2020. This led to a 27.4% increase in total sales for the period. Online furniture subsidiary Mocka saw sales growth of 52.1% over the same period. 

Foolish takeaway

Observing your own spending patterns can help you identify trends that will impact ASX shares in both the short and long term. If you’re a believer in the products or services produced by a certain company, you may want to consider investing. That way, you could stand to earn a portion of the money you spend on its products in the form of dividends.  

More reading

• Why you should buy ANZ and these ASX dividend shares for income
• One thing you should be doing ahead of the ASX reporting season
• The Coles share price is flying under the radar
• Why these 9 ASX shares have doubled in value in the past year
• Coles and 2 more ASX 200 shares to watch this week

Kate O’Brien has no position in any of the stocks mentioned. 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 Premier Investments Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET, Wesfarmers Limited, and Woolworths Limited. The Motley Fool Australia has recommended Kogan.com 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.

The post You probably shop at these 7 ASX retailers. Should you buy shares in them too? appeared first on Motley Fool Australia.

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The Super Retail Group Ltd (ASX: SUL) share price could be a bargain right now, in my view.

Shares in the Aussie retailer fell 4.8% lower yesterday to $7.80 per share. It was far from the only ASX 200 share falling lower as the S&P/ASX 200 Index (ASX: XJO) closed down 0.5% at 6,001.60 points.

So, after a big share price fall, is Super Retail worth a look right now?

Why the Super Retail share price fell lower

I think the main cause for concern is the rising coronavirus cases across Australia. The pandemic continues to spread in Victoria and somewhat in New South Wales as well.

That could spell trouble for the Aussie economy and lead to tightening restrictions. In turn, a reduction in foot traffic and potentially discretionary income could hit the retail sector hard.

These fears saw investors head for safety on Monday, which pushed the Super Retail share price lower.

Why the Aussie retailer could be a strong buy

There’s no denying there could be some impact on retailers from tightening restrictions a second time round. However, that was also the case in March when the ASX 200 entered a bear market.

But Super Retail has been relatively resilient in the face of these challenges. In fact, after bottoming out at $2.99 per share in March, the Super Retail share price has rocketed 160% higher since then to $7.80 per share. That’s on the back of strong earnings from Super Retail’s online channels, in particular a surge in sales from its Supercheap Auto and Rebel Sport brands.

I don’t see any reason why that trend can’t continue if we see another lockdown. Yes, there will be some customers who have already bought what they needed. But a targeted strategy towards boosting online sales could pay dividends for the Super Retail share price and the group’s investors.

On top of that, shares in the Aussie retailer are now down 25.3% from their 52-week high. That could mean that now is the chance to snap up a bargain.

Leading fundie Paul Xiradis from fund manager Ausbil holds a similar view. According to a recent client memo from Mr Xiradis, Ausbil’s base case for Super Retail is for a quick recovery.

That represents a bullish scenario that could see the Super Retail share price and others like JB Hi-Fi Limited (ASX: JBH) outperform in 2020.

More reading

• Down 5% in 1 day: Are Bendigo and Adelaide Bank shares a buy?
• 3 investing strategies to profit from a second ASX share market crash in 2020
• 5 things to watch on the ASX 200 on Tuesday
• Where to invest $5,000 into ASX shares right now
• Market close: ASX 200 falls 0.5%

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

The post Is the Super Retail share price cheap today? appeared first on Motley Fool Australia.

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It wasn’t a good start to the week for Bendigo and Adelaide Bank Ltd (ASX: BEN) shares.

The company’s share price slumped 5.17% as ASX bank shares were hammered in Monday’s trade. The Aussie banks led the S&P/ASX 200 Index (ASX: XJO) 0.5% lower to close at 6,001.60 points.

But is the Aussie bank cheap after yesterday’s slump or does it have further to fall in 2020?

Why Bendigo and Adelaide Bank shares fell yesterday

The big factor in Monday’s trading sessions was, you guessed it, coronavirus concerns.

An increase in cases across Victoria and New South Wales once again spooked investors. There are increasing talks of tighter restrictions that could hurt Australia’s economic rebound.

The banks are exposed to a deteriorating economy. This could be through more home, personal and business loan defaults and lower earnings.

That sent investors heading for the exits with Bendigo and Adelaide Bank shares closing down 5.17% on Monday.

Is the ASX bank a cheap buy?

I think the best way to evaluate Bendigo and Adelaide Bank shares is by benchmarking them against their peers.

Bendigo is the largest Australian retail bank outside of the big four. That means banks like Commonwealth Bank of Australia (ASX: CBA) or National Australia Bank Ltd (ASX: NAB) might be a reasonable benchmark.

Commonwealth Bank shares trade at a price to earnings (P/E) ratio of 13.1 while NAB shares trade at 16.0. However, Bendigo and Adelaide Bank shares have them both beaten with a P/E of just 11.5.

That could mean that the Aussie bank is a good relative buy versus its peers. Unfortunately for us keen-eyed Fools, it’s not that simple.

For one, P/E ratios and dividend yields are a bit unreliable right now. No one knows just how different the next period’s earnings will be from the last period due to the pandemic.

It’s also arguable that Bendigo is in a worse position compared to the big four. Bendigo is a smaller bank and has heavy regional exposure. That could mean more defaults in hard-hit regions and difficulty to compete on pricing with the majors.

On the other hand, Bendigo is looking towards the long-term. The Aussie bank owns neobank Up which leaves it well-placed for any potential shift in the banking sector.

Foolish takeaway

ASX bank shares like Bendigo and Adelaide Bank are hard to value right now. I think it’s too uncertain to be buying in for a marginally lower P/E ratio under the current conditions.

Personally, I would be waiting until the bank’s August earnings result for a better idea of whether to buy or not.

More reading

• Is the Super Retail share price cheap today?
• 3 investing strategies to profit from a second ASX share market crash in 2020
• 5 things to watch on the ASX 200 on Tuesday
• Where to invest $5,000 into ASX shares right now
• Market close: ASX 200 falls 0.5%

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

The post Down 5% in 1 day: Are Bendigo and Adelaide Bank shares a buy? appeared first on Motley Fool Australia.

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The 2020 ASX share market crash has caused a lot of pain for many S&P/ASX 200 Index (ASX: XJO) investors. In the short run, further declines could happen from a second wave of coronavirus and its potential impact on the world economy.

Here are 3 investing strategies to profit from a potential second ASX share market crash in 2020:

Hold alternative assets

ASX 200 shares are by no means the only asset class you should hold in a diversified portfolio during a share market crash. Two “safer” options are gold and cash. 

Investors looking for exposure to gold could consider miners like Northern Star Resources Ltd (ASX: NST), physical gold, or an ETF like Perth Mint Gold (ASX: PMGOLD).

Perth Mint Gold has a very low management fee of just 0.15%. Another great feature is that unlike many gold exchange traded products, PMGOLD can be physically redeemed for any of The Perth Mint’s bullion coins and bars.

If you’re particularly bullish on the safe-haven metal during a 2020 share market crash, investing in a gold miner should provide you with additional leverage to the gold price, meaning that you could have greater upside potential. However, with greater potential comes greater risk.

Cash is a great asset to hold for both optionality and peace of mind. More risk averse investors should hold some cash to give them the confidence to hold their growth stocks through any stock market turbulence. More aggressive investors can use cash to “buy the dip”, which I explain in more detail below.

Buy a bear fund before the crash

Shorting stocks or the share market is my least favourite option to profit from a pull back. Why? Because it requires you to successfully time the market. Maybe you can, but I know that I certainly can’t do that.

With that being said, if you have a sound understanding of economics or investor sentiment, this strategy can make you money. The easiest way to take a position like this is through an ETF like BetaShares Australian Equities Bear Hedge Fund (ASX: BEAR).

Buy quality ASX 200 shares during the crash

You’ve heard my least favourite way to invest during a share market crash, now here is my favourite. Buy ASX 200 shares! If you remain fully invested, I would recommend dollar cost averaging a portion of each paycheck into the market. If you have cash waiting to be deployed, I still think that you should stage it into shares to avoid missing out on depressed prices.

In my view, you should look for high quality, profitable companies with strong balance sheets, and growth companies that have seen their lofty valuations cut more than their fundamental business. Perfect examples of these are CSL Limited (ASX: CSL) and ETFS FANG+ ETF (ASX: FANG).

Foolish bottom line

Over the long-term, high quality ASX 200 shares should continue to be a life changing asset to own. Potential share market crash or not, continuing to invest in the right businesses will stand you and your family in good stead.

More reading

• Is the Super Retail share price cheap today?
• Down 5% in 1 day: Are Bendigo and Adelaide Bank shares a buy?
• 5 things to watch on the ASX 200 on Tuesday
• Where to invest $5,000 into ASX shares right now
• Market close: ASX 200 falls 0.5%

Lloyd Prout has no position in any of the stocks mentioned and expresses his own opinions. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post 3 investing strategies to profit from a second ASX share market crash in 2020 appeared first on Motley Fool Australia.

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I believe that ASX dividend shares are great options for income.

The official RBA interest rate is now just 0.25%. You won’t get much interest from a bank account. I’d want to make my money work harder than that, so I’d go for ASX shares that will be good dividend picks.

However, I don’t think that most ASX blue chips are the answer. We have seen dividend cuts from shares like National Australia Bank Ltd (ASX: NAB) and Sydney Airport Holdings Pty Ltd (ASX: SYD) during this COVID-19 era.

I think these ASX dividend shares could be much better ideas for long-term income:

Future Generation Investment Company Ltd (ASX: FGX)

Future Generation is a listed investment company (LIC). The job of a LIC is to invest in other assets on your behalf. LICs are good options to be ASX dividend shares because they can turn investment returns (including capital growth) into a consistent dividend for their shareholders.

This LIC is quite different to most other LICs on the ASX. It doesn’t charge any management fees or performance fees. Instead, it donates 1% of its net assets each year to youth charities. Future Generation invests in the funds of fund managers who invest in ASX shares. These fund managers don’t charge any fees so that Future Generation can make those donations to youth charities.

Its investment returns are compelling. At the end of June 2020 it reported that over FY20 its gross portfolio performance showed a decline of just 1.2%, outperforming the S&P/ASX All Ordinaries Accumulation Index by 6% (which fell 7.2%).

At the current Future Generation share price it offers a grossed-up dividend yield of 7%. The share price is trading at an 11.5% discount to the June 2020 net tangible assets (NTA) per share. That means you’re buying $1 of assets for less than $0.90.

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

Soul Patts has one of the best ASX share dividend records around. It has grown its dividend every year since 2000. It has actually been listed since 1903 and it has paid a dividend every single year including through world wars, recessions, the Spanish Flu and any other disaster you can name over the past century.

It’s an investment house that’s invested in a variety of listed and unlisted businesses. Some of its main ASX share investments are: TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), Milton Corporation Limited (ASX: MLT), Bki Investment Co Ltd (ASX: BKI), Palla Pharma Ltd (ASX: PAL) and Clover Corporation Limited (ASX: CLV).

Some of its unlisted assets include swimming schools, agriculture, luxury retirement living and soon it will be involved in regional data centres.

Soul Patts has defensive assets which are well diversified. The investment conglomerate continues to diversify its portfolio and it has a strong focus on cashflow. Each year it tells investors what its regular operating cashflows are – this is the investment income minus operating expenses (and a few other small items). Soul Patts funds its dividend from its annual net cashflow. In FY19 it only paid out 80% of its net cashflow.

At the current Soul Patts share price it offers a grossed-up dividend yield of 4.2%.

APA Group (ASX: APA)

I think APA is a high-quality ASX dividend share. It has increased its distribution every year for the past decade and a half.

The business owns a vast network of 15,000km of natural gas pipelines around Australia with a presence in every mainland state and the Northern Territory. It also owns or has interests in gas storage facilities, gas-fired power stations and renewable energy generation (wind and solar farms). APA owns, or manages and operates, a portfolio of assets worth more than $21 billion and delivers half the nation’s natural gas usage.

It generates a reliable source of cashflow from its national customer base. This allows APA to pay a dependable distribution to shareholders each year. That’s why it was able to stick to its annual FY20 guidance of 50 cents per unit.

Using the FY20 annual distribution, at the current APA share price, it’s trading with a 4.5% distribution yield. I think it’s very likely that FY21 will see another increase for investors.

Foolish takeaway

I really like all three of these ASX dividend shares. At the current prices I think Future Generation looks like the best value, but Soul Patts has a great dividend history and it’s the one that I’d rely on for my investment income in retirement because of its reliability.

More reading

• 2 quality ASX 200 shares to buy and hold beyond 2027
• How to create a yearly income of $65,000 in dividends
• Fund managers have been buying these ASX shares
• Top ASX dividend shares to buy in July 2020
• What I’m looking for in dividend shares during COVID-19

Tristan Harrison owns shares of FUTURE GEN FPO and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Clover Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of APA Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post 3 of the best ASX dividend shares for income appeared first on Motley Fool Australia.

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Fortunately for income investors in this low interest rate environment, there are a good number of shares on the ASX paying shareholders generous dividends.

Three which I think are quality options right now are listed below. Here’s why I would buy them:

Australia and New Zealand Banking GrpLtd (ASX: ANZ)

I think ANZ could be a good option for income investors. I believe the selloff of its shares has been overdone and has left them trading at an attractive price of just 13x estimated FY 2021 earnings and 0.9x FY 2021 book value. And while dividend cuts are inevitable, I’m expecting the banking giant to still pay one which provides a very generous yield next year. I’m forecasting a partially franked dividend of $1.05 per share in FY 2021. Based on the current ANZ share price, this will provide investors with a very generous forward 5.7% yield.

BHP Group Ltd (ASX: BHP)

Another dividend share to consider buying is BHP. I believe the Big Australian is well-positioned to generate strong free cash flows in FY 2020 and FY 2021 thanks to its low cost operations and favourable commodity prices. This is particularly the case for its iron ore operations, which are benefiting from spot prices of ~US$110 a tonne. This compares to its full year cost guidance of just US$13-14 per tonne for the Western Australia Iron Ore operation. Based on the latest BHP share price, I estimate that its shares offer investors a forward fully franked ~4.9% dividend yield.

Woolworths Limited (ASX: WOW)

A final ASX dividend share to consider buying is Woolworths. I think the conglomerate would be a good option for income investors due to its quality brands, their defensive qualities, and their positive long term outlooks. Combined with its supply chain improvement plans, I believe the company is well-positioned to continue growing its earnings and dividend at a solid rate over the next decade. Based on the current Woolworths share price, I estimate that its shares provide investors with a fully franked 3% FY 2021 dividend yield.

More reading

• Why the South32 share price is falling today
• 3 ASX shares to leverage the booming iron ore price
• ASX 200 Weekly Wrap: Blue chip shares pull ASX 200 back over 6,000 points
• Cedar Woods share price edges higher on announcement
• Are our ASX bank shares expensive by global standards?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. 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.

The post Why you should buy ANZ and these ASX dividend shares for income appeared first on Motley Fool Australia.

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On Monday the S&P/ASX 200 Index (ASX: XJO) was out of form and started the week on a disappointing note. The benchmark index fell 0.5% to 6,001.6 points.

Will the market be able to bounce back from this on Tuesday? Here are five things to watch:

ASX 200 expected to rebound.

It looks set to be a positive day of trade for the ASX 200 index on Tuesday. According to the latest SPI futures, the benchmark index is expected to open the day 45 points or 0.75% higher at the open. This follows a positive start to the week on Wall Street which saw the Dow Jones edge higher, the S&P 500 rise 0.85%, and the Nasdaq jumped 2.5% higher. The S&P 500’s gain means it is now in positive territory for 2020.

Tech shares on watch.

Tech shares including Altium Limited (ASX: ALU) and Appen Ltd (ASX: APX) could be on the rise today after an incredibly positive night of trade for their U.S. counterparts. The tech-focused Nasdaq index jumped 2.5% overnight thanks to strong gains by the likes of Amazon, Apple, Microsoft, and Google parent, Alphabet. Amazon was the star of the show with a gain of almost 8%.

Oil prices edge lower.

It could be a positive day for energy producers such as Oil Search Limited (ASX: OSH) and Santos Ltd (ASX: STO) on Tuesday after oil prices pushed higher. According to Bloomberg, the WTI crude oil price rose 0.3% to US$40.71 a barrel and the Brent crude oil price climbed 0.2% to US$43.22 a barrel. Coronavirus vaccine hopes supported oil prices.

Gold price rises.

Gold miners including Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could be on the rise again on Tuesday after the gold price strengthened further. According to CNBC, the spot gold price rose 0.45% to US$1,818.5 an ounce. Overnight the price of the precious metal hit its highest level since September 2011.

Commonwealth Bank given sell rating.

Analysts at Goldman Sachs believe the Commonwealth Bank of Australia (ASX: CBA) share price could be going lower from here. Ahead of its full year results release next month, the broker has retained its sell rating and $65.00 price target on the banking giant’s shares. This price target implies potential downside of over 10%.

More reading

• Where to invest $5,000 into ASX shares right now
• Market close: ASX 200 falls 0.5%
• ASX investors were buying these 5 international shares last week
• Why the BlueScope share price is outperforming today
• Are you a ‘risky’ investor in ASX 200 shares?

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. The Motley Fool Australia owns shares of Appen 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.

The post 5 things to watch on the ASX 200 on Tuesday appeared first on Motley Fool Australia.

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I think that one of the most exciting areas to invest in at the moment is the tech sector.

In this part of the market there are a large number of companies with the potential to grow strongly over the next decade and generate outsized returns for shareholders.

Three ASX tech shares that I would buy in July are listed below. Here’s why I like them:

Afterpay Ltd (ASX: APT)

I think this payments company could be a great long term option. In FY 2020, Afterpay has continued to smash expectations thanks to the increasing popularity of its buy now pay later platform with both consumers and retailers. The uptake of its platform has been especially strong with younger demographics, which are turning away from credit cards and looking for better ways to budget. I expect this trend to continue for the foreseeable future and be boosted by further geographic expansion in the coming years. This could make Afterpay shares long term market beaters.

Nearmap Ltd (ASX: NEA)

Another tech share to consider buying is this aerial imagery technology and location data company. Thanks to the increasing demand for its services in both Australia and North America, Nearmap has been growing its sales at a very strong rate over the last few years. The good news is that I believe the company can continue this impressive growth for a long time to come thanks to its massive opportunity in a highly fragmented market, the launch of several exciting new products, and its potential expansion into new geographies.

Xero Limited (ASX: XRO)

A final tech share to consider buying is Xero. It is one of the world’s leading cloud-based business and accounting software providers. Xero recently reported its FY 2020 results and revealed further impressive growth in sales and operating earnings. This was driven by strong customer growth and its sky high retention rate. I believe the latter demonstrates both the quality and stickiness of its platform. Another positive is its modest market share in North America. At present it has just 241,000 subscribers in the key market. This compares to 914,000 subscribers in a materially smaller ANZ market.

More reading

• Top fund manager names favourite ASX growth shares
• Why the BlueScope share price is outperforming today
• Is the Zip share price a buy after falling 20% last week?
• Zip and Openpay were among the most traded shares on the ASX last week
• 5 of the worst performing ASX shares from last week

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

The post Why I would buy Afterpay and these exciting ASX tech shares appeared first on Motley Fool Australia.

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Do you have some spare cash to invest in ASX shares right now?

I believe the shares below are 2 very solid options. Here’s why they are both on my buy list right now, and how I would split a $5,000 investment across the 2 ASX shares.

BetaShares NASDAQ 100 ETF (ASX: NDQ) – $3,000

My first recommendation is actually an exchange-traded fund (ETF), rather than an individually listed company. The BetaShares NASDAQ 100 ETF invests in a basket of shares that are listed the US NASDAQ exchange. This ‘tech heavy’ ETF includes many  of the tech giants that you probably familiar with, such as Apple, Amazon, Google, Facebook, Microsoft and Netflix.

What really appeals to me about this ETF is that you get exposure to a vast portfolio of US shares that you otherwise wouldn’t gain exposure to by investing on the ASX. Australia does have its own tech shares that are individually listed. However, I think it’s a great idea to also have some exposure to the massive tech market listed in the US. A number of US tech companies have become global leading brands and many also have dominant positions in their individual tech market niches.

The tech sector in the US is really booming right now. Despite strong recent gains, I believe the long annual return of this fund is likely to continue exceed the return of the S&P/ASX 200 Index (ASX: XJO) over the next 5 to 10 years. 

Telstra Corporation Ltd (ASX: TLS) – $2,000

Australia’s largest telecommunications provider Telstra has had many challenges to face over the last decade. In particular, it has had to transition to a whole new telecoms world, centred around the government-owned National Broadband Network (NBN). Prior to the NBN, Telstra enjoyed margins and profit levels well above those achievable by most of its competitors. However, Telstra is now on a level playing field with the rest of the local market.

Telstra’s response has been to transition to a leaner operation under its ‘T22 strategy’ and is now well underway to achieving this goal. In addition, it is emerging as a market leader in the race to launch full scale 5G mobile services.

Telstra also currently has an attractive price-to-earnings ratio of 19 and pays a forward fully franked dividend yield of around 2.9%

Foolish takeaway

BetaShares NASDAQ 100 ETF and Telstra are 2 very different types of investments. However, I believe that both are well positioned to deliver above average shareholder returns over the next 5 years.

If I was investing $5,000 between both shares, I would lean towards investing slightly more in BetaShares NASDAQ 100 ETF, due to its higher level of market diversification.

More reading

• Market close: ASX 200 falls 0.5%
• Why the BlueScope share price is outperforming today
• Are you a ‘risky’ investor in ASX 200 shares?
• One thing you should be doing ahead of the ASX reporting season
• 3 top Warren Buffett quotes for ASX investors this week

Phil Harpur owns shares of Telstra Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS. The Motley Fool Australia owns shares of and has recommended Telstra Limited. 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.

The post Where to invest $5,000 into ASX shares right now appeared first on Motley Fool Australia.

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