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Rural Funds Group (ASX: RFF) could be a quality ASX dividend share to consider for a few different reasons.

If readers haven’t heard of Rural Funds before, it’s a real estate investment trust (REIT) that owns farmland properties that it leases out.

There are a number of reasons why it could be a good idea to consider this agricultural landlord for income:

Diversification

Unlike a residential investment property where all of the value is tied up in one piece of real estate, Rural Funds owns a portfolio of assets. It’s diversified in several different ways.

It has farming properties across several different sectors including cattle, vineyards, almonds, macadamias and cropping (sugar and cotton).

The farms are also diversified geographically – they are spread across different states and in different climactic conditions. Rural Funds also owns a large portfolio of water entitlements to ensure that its tenants have enough water for their needs.

Some of Rural Funds’ tenants include: Olam, JBS, Select Harvests Limited (ASX: SHV) and Treasury Wine Estates Ltd (ASX: TWE).

Income growth

One of the main goals of Rural Funds is to increase its distribution to investors by 4% per annum. It has been successful with this target ever since it listed several years ago.

One of the main ways that Rural Funds achieves this growth is thanks to the rental growth that is built into the contracts it has with its tenants. Most of the contracts either have a fixed annual rental increase or it’s linked to CPI indexation, with some contracts having market reviews.

In FY21, Rural Funds grew its distribution by 4% to 11.28 cents per unit. In FY22 it has guided that it will increase the distribution by 4% to 11.73 cents per unit. That translates to a forward distribution yield of 4.3%.

Investing for growth

Rural Funds is not just passively growing its profit from rental increases. It is taking measures to grow its rental profit by investing for growth.

For example, at its cattle properties it has invested in a number of things like water points, pasture improvement, cultivation areas, irrigated areas and grazing areas.

Another key element of the investing is changing the land to higher and better use to increase total returns. For example, it’s currently turning some of its cropping farms into macadamia orchards. Planting of 1,000 hectares is expected to be completed by June 2022. Planted orchards are more attractive to tenants and may be leased at higher rates.

What is the Rural Funds share price’s underlying value?

Over the last six months the Rural Funds share price has risen around 16%. FY21 saw the pro forma adjusted net asset value (NAV) per unit increase 13% to $2.20. That means the REIT is valued at a premium of around 23.6% to its adjusted NAV.

The post 3 reasons why Rural Funds (ASX:RFF) is a quality ASX dividend share appeared first on The Motley Fool Australia.

More reading

• These 5 ASX shares are going ex-dividend this week
• 2 ASX 200 shares that could be buys for dividends

Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED and Treasury Wine Estates Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Ask A Fund Manager

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In this edition, Redpoint Investment Management senior portfolio manager Max Cappetta explains why his fund is betting on 2 of the 4 major banks and a construction materials provider.

Investment style

The Motley Fool: How would you describe your fund to a potential client?

Max Cappetta: In the Redpoint Australian Equity Income Fund, we’re seeking to capture a share of the profits earned by Australia’s leading companies, which are paid as dividends. 

Companies usually pay their dividends twice a year, just after they announce their half-year and their full-year results. And if we look at history, it shows us that owning a share of company profits can provide a really attractive level of income from those dividends over the longer term.

The Australian equity market has delivered, on average, an annual cash yield of approximately 4%, quite consistently. This means that the income paid year on year — so every 6 months as dividends — has kept up with the overall growth in share prices over time.

The good news here is that this income we can capture has kept pace with inflation over the longer term because it represents a share of the profits which have been earned by companies. And those profits are tied to the underlying growth of the overall economy. 

Our fund is specifically designed for low and zero tax rate payers, such as retirees and charities. I think what’s of particular benefit to these investors — and we’re looking to capture in our strategy and fund — is that when companies pay dividends here in Australia, they also pass through the tax credits for the income tax that they’ve already paid.

So for a zero tax rate investor, they can claim this amount back in their tax return. What it means is that for every dollar of a fully franked dividend that investors like this earn, they actually get $1.42 worth of value.

When you consider that the cash rate is pretty much stuck at 0.1 of 1%, and you’ve got a one-year term deposit rate at a quarter of 1%, then an average 4% cash yield on equities is actually very attractive. 

Now, within the fund, what we are looking to do is deliver an even higher cash yield than the ASX 200 if you were to hold that passively. While we’re also looking to deliver our investors with a total return that will be in line with the S&P/ASX 200 Index (ASX: XJO) over the longer term.

We’re trying to take the total return of the equity market and deliver back to investors a higher proportion in fully franked income. Then a smaller proportion, but still important, growth over the long term. Because they do need their capital, and they do need that income to keep tabs with inflation over the long term.

MF: Considering your income focus, 2021 must be, so far, a pretty good year for your team.

MC: Yes. Certainly, in this reporting period, it’s been very strong through August and September. We’ve definitely seen a bounce back in the bank dividends, and we’ve also seen some record profits from iron ore miners, such as Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG). 

I think overall there’s been a relaxation in the conservativeness that many of Australia’s listed companies had in 2020, where there was great uncertainty over COVID-19 and what that meant. And I think now, people are looking forward to 2022, and we’re seeing more of that profit being returned to shareholders as dividends.

Biggest convictions

MF: What are your two biggest holdings?

MC: First, I might just say that we actually run a very diversified portfolio of around 60 to 70 names. We do think that that is one of the features of our approach because we do look at companies from a range of different metrics and try to stay well-diversified. 

However, when you look at that income capture element, coming up in the dividend calendar is now the full-year results to 30 September for 3 out of Australia’s 4 major banks. 

As you know, the Commonwealth Bank of Australia (ASX: CBA) reported on 30 June. They delivered essentially a doubling in their dividend plus a tax-effective off-market share buyback for investors, which delivers an even larger fully franked dividend to investors that tender their shares into that buyback.

Now at the moment for the other three, Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB), and Australia and New Zealand Banking Group Ltd (ASX: ANZ), we favour Westpac and the NAB. 

Our expectations are showing that their profitability looks to be rebounding more strongly. Plus, we also see the potential for capital management by either a buyback or even an increased dividend from Westpac. 

We also like building materials giant James Hardie Industries plc (ASX: JHX). I think they are benefiting from both a DIY renovation market growth and also gaining market share in the United States.

One of the key things that we look for as we analyse financial statements is that they are improving operationally. So that leads us to believe that they could deliver an even larger earning surprise than they have in the past.

And also, the company has guided that they are going to reinstate their dividends at their first half-year result, which will be at 30 September. We expect that dividend to come through sometime in November.

The post Why we favour 2 of 4 big bank ASX shares: fund manager appeared first on The Motley Fool Australia.

More reading

• 3 ASX shares that everyone’s underestimating right now
• The NAB (ASX:NAB) share price rises amid hiring frenzy in private banking
• These experts believe the future is bright for the Bank of Queensland (ASX:BOQ) share price
• The Westpac (ASX:WBC) share price is down 3% so far in September. What’s next?
• How does the Commonwealth Bank (ASX:CBA) dividend compare to ASX bank shares?

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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If you are looking to strengthen your portfolio with some ASX 200 shares, you may want to look at the two listed below.

Both of these ASX 200 shares are highly rated and have recently been named as buys. Here’s what you need to know about them:

Bapcor Ltd (ASX: BAP)

The first ASX 200 share to look at is Bapcor. It is the Asia Pacific region’s leading provider of vehicle parts, accessories, equipment, service and solutions. It was on form again in FY 2021, delivering a 20.4% increase in revenue to $1,761.7 million and a 46.5% jump in pro forma net profit after tax to $130.1 million. This was driven by growth across the business. Pleasingly, more of the same is expected over the 2020s thanks to its strong market position and bold expansions plans.

The team at Credit Suisse remain positive on its long term growth potential. Its analysts currently have an outperform rating and $9.20 price target on its shares. This compares to the current Bapcor share price of $7.59.

Xero Limited (ASX: XRO)

Another ASX 200 share to look at is Xero. It is a fast-growing cloud-based accounting solution provider to small and medium sized businesses. Xero’s rapid growth in recent years has been driven by the shift to the cloud, its global expansion, and a series of bolt-on acquisitions. The good news is that the company still has a very long runway for growth. At the end of FY 2021, Xero had 2.74 million subscribers. This compares to its total addressable market of 45 million subscribers.

Goldman Sachs believes the company has multi-decade strong revenue growth potential. As a result, the broker has a buy rating and $165.00 price target on Xero’s shares. This compares to the current Xero share price of $149.95.

The post 2 highly rated ASX 200 (ASX:XJO) shares to buy right now appeared first on The Motley Fool Australia.

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• Is the Xero (ASX:XRO) share price good value?
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• 3 rapidly growing ASX tech shares to buy
• Brokers name 3 ASX shares to buy today

Motley Fool contributor 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 and has recommended Xero. The Motley Fool Australia owns shares of and has recommended Bapcor and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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There are few S&P/ASX 200 Index (ASX: XJO) dividend shares that could be good ideas to consider.

Income is hard to come by at the moment with the official Reserve Bank of Australia (RBA) interest rate being close to 0%. Businesses with attractive dividend yields could be the way to go to boost investment income.

Here are two ASX 200 dividend shares to consider:

Centuria Industrial REIT (ASX: CIP)

This business is a real estate investment trust (REIT) that owns a quality portfolio of industrial properties across Australia, predominately in metropolitan areas.

After its latest acquisitions, it will have a total of 75 assets with a total value of around $3.5 billion. The occupancy rate is 97.3% and it has a weighted average lease expiry of nine years.

Its portfolio is invested across different sectors including distribution centres (36%), manufacturing (25%), data centres (15%), transport logistics (14%), cold storage (8%) and development (3%).

Looking at its tenants, some of the largest (in terms of rental income) includes Telstra Corporation Ltd (ASX: TLS), Arnott’s, Woolworths Group Ltd (ASX: WOW), Visy and Australian Pharmaceutical Industries Ltd (ASX: API).

In FY22, the ASX 200 dividend share is expecting to generate funds from operations (FFO) – net rental profit – of no less than 18.1 cents per unit and pay a distribution of 17.3 cents per unit. That means the Centuria Industrial REIT share price is valued at 21x FY22’s estimated FFO. It’s expecting to pay a distribution yield of 4.5% in FY22.

The broker Macquarie Group Ltd (ASX: MQG) rates Centuria Industrial REIT as a buy. It’s expecting the distribution yield in FY23 to be 4.8%.

Metcash Limited (ASX: MTS)

Metcash is a diversified business.

It’s the largest supplier for independent supermarkets in Australia, supplying more than 1,600 stores including IGA and Foodland.

Metcash also says it’s the second largest player in the liquor market, supplying more than 90% of independent liquor stores in Australia, including national brands like IGA Liquor, Bottle-O and Cellarbrations.

The company is also the second largest player in the Australian hardware market. It owns the Mitre 10 and Home Timber & Hardware brands. A recent addition has been Total Tools. A few months ago it actually increased its ownership of Total Tools from 70% to 85% for a cost of $59.4 million.

Metcash believes that Total Tools has significant growth opportunities, including expansion of the store network and the acquisition of an ownership interest in a select number of stores. Metcash has a pathway to full ownership towards the end of FY24 with put and call arrangements in place.

FY21 saw underlying earnings per share (EPS) increase by 13.3% to 24.7 cents. This allowed Metcash to increase the total dividend by 40% to 17.5 cents. The ASX 200 dividend share has increased its payout ratio to 70% of underlying net profit.

In FY22, Metcash is seeing a single digit decline of food sales with the loss of contracts like 7-Eleven. However, liquor sales were up 9.5% and hardware sales were up 16.3% in the first 16 weeks of FY22.

UBS currently rates Metcash shares as a buy, with a price target of $4.60. A change of consumer habits appears to have helped the business, including higher levels of local shopping. Some of these changes could be permanent.

The broker believes Metcash could pay a grossed-up dividend yield of 6.5% in FY22.

The post 2 ASX 200 shares that could be buys for dividends appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX shares today
• These 3 ASX 200 shares are topping the volume charts today
• Woolworths (ASX:WOW) and Coles (ASX:COL) could face a margin shock
• ASX 200 (ASX:XJO) midday update: Fortescue jumps, Wesfarmers dealt takeover blow

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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On Monday the S&P/ASX 200 Index (ASX: XJO) started the week on a positive note. The benchmark index rose 0.6% to 7,384.2 points.

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

ASX 200 expected to fall

The Australian share market is expected to fall on Tuesday. According to the latest SPI futures, the ASX 200 is expected to open the day 43 points or 0.6% lower. This follows a mixed start to the week on Wall Street. The Dow Jones rose 0.2% and the S&P 500 fell 0.3%, and the Nasdaq dropped 0.5%.

Iron ore price continues rebound

Mining giants BHP Group Ltd (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG) could have a decent day after iron ore prices continued to rebound. According to Metal Bulletin, the spot iron ore price has risen 7.2% to US$119.31 a tonne.

Oil prices rise

Energy producers such as Beach Energy Ltd (ASX: BPT) and Woodside Petroleum Limited (ASX: WPL) could push higher today after oil prices rose overnight. According to Bloomberg, the WTI crude oil price is up 2% to US$75.44 a barrel and the Brent crude oil price has risen 1.7% to US$79.41 a barrel. Supply constraints are supporting oil prices. In other news, Beach announced a deal with BP after the market close on Monday.

Gold price softens

Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) will be on watch after the gold price softened. According to CNBC, the spot gold price is down 0.1% to US$1,750.4 an ounce. The precious metal fell due to a stronger dollar and higher bond yields.

Dividends being paid

It is pay day for the shareholders of a number of ASX 200 shares. Paying their dividends today are the likes of Altium Limited (ASX: ALU), Amcor CDI (ASX: AMC), Coles Group Ltd (ASX: COL), and Evolution Mining.

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

More reading

• Why the Beach Energy (ASX:BPT) share price will be in focus on Tuesday
• Here are the top 10 ASX shares today
• These 3 ASX 200 shares are topping the volume charts today
• September hasn’t been a great month so far for the Coles (ASX:COL) share price
• Why AVZ, Flight Centre, Fortescue, & Sigma shares are storming higher

Motley Fool contributor 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 and has recommended Altium. The Motley Fool Australia owns shares of and has recommended Altium, Amcor Limited, and COLESGROUP DEF SET. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Fortunately in this low interest rate environment, there are plenty of ASX shares offering attractive dividend yields.

Two such shares are listed below. Here’s what you need to know about their dividends:

BWP Trust (ASX: BWP)

The first ASX dividend share with an attractive yield is BWP Trust. It is the largest owner of Bunnings Warehouse sites in Australia with a portfolio of warehouses leased to the hardware giant.

Thanks to strong demand for hardware products and Bunnings being able to open during lockdowns, BWP has been a positive performer over the last 18 month. This has allowed the company to collect rent largely as normal during the pandemic. It has even seen the value of its properties increase notably.

In FY 2021, BWP paid an 18.29 cents per unit distribution. It also plans to pay a similar distribution in FY 2022.

Based on the current BWP share price of $4.06, this will equate to a 4.5% dividend yield.

National Storage REIT (ASX: NSR)

Another dividend share to look at is National Storage. It is one of the ANZ region’s largest self-storage operators with a portfolio of over 210 centres providing tailored storage solutions to over 85,000 residential and commercial customers.

National Storage was on form in FY 2021 and delivered a 28% increase in underlying earnings to $86.5 million. This was driven by both organic growth and the benefits of acquisitions. This allowed the company to pay a full year distribution of 8.2 cents per share.

Positively, management is expecting another solid year in FY 2022. It has provided guidance for underlying earnings per share growth of at least 10%. In addition, it has approximately $900 million of investment capacity to support its growth by acquisition strategy.

If National Storage grows its distribution in line with its earnings guidance, it will mean a distribution of 9.02 cents per share in FY 2022. Based on the current National Storage share price of $2.36, this will mean a yield of 3.8%.

The post Here are 2 ASX dividend shares with attractive yields appeared first on The Motley Fool Australia.

More reading

• 2 quality ASX shares for a retirement portfolio
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Beach Energy Ltd (ASX: BPT) share price ended Monday’s trading session in the green. However, its shares could be on watch tomorrow following an after-market release.

At the closing bell, Beach Energy shares finished up 4.22% to $1.235 a pop.

What did Beach Energy announce?

The Beach Energy share price could be on the move on Tuesday after the energy producer announced a positive update.

In its release, Beach Energy advised it has entered into a Heads of Agreement (HOA) with oil and gas company, BP.

The arrangement relates to the supply of Beach Energy’s share of liquefied natural gas (LNG) from Waitsia Gas Project Stage 2.

The HOA contains the terms and conditions for BP purchasing all 3.75 million tonnes of Beach’s expected LNG volumes. This is expected to come from the Waitsia Gas Project Stage 2, with supply forecasted to commence in the second-half of 2023.

Beach Energy noted that the annual contract volumes and supply terms are similar to the North West Shelf Gas Processing and Lifting Agreements. The terms include built-in flexibility, ensuring that LNG will flow when construction and commissioning activities have been completed.

Supply will be delivered on a Free on Board (FOB) basis from the NWS facilities in Karratha, Western Australia. BP is a joint venture partner in NWS.

The agreed price for the LNG contract is said to be linked to Brent crude oil and Japan Korea Marker price indices.

Beach and BP are targeting the execution of an LNG Supply and Purchase Agreement later this year.

About the Beach Energy share price

Over the last 12 months, Beach Energy shares have fallen around 10%, with year-to-date dropping more than 30%. The company’s share price is hovering around the lower point of its 52-week range of $1.01 and $2.04.

Beach Energy presides a market capitalisation of roughly $2.82 billion, with approximately 2.3 billion shares on its registry.

The post Why the Beach Energy (ASX:BPT) share price will be in focus on Tuesday appeared first on The Motley Fool Australia.

More reading

• Leading brokers name 3 ASX shares to buy today
• These were the best performers on the ASX 200 last week
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• The Beach Energy (ASX:BPT) share price is leaping 6% on Wednesday
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Motley Fool Australia Chief Investment Officer Scott Phillips joined Peter Overton on Nine’s Late News on Sunday night to discuss the big macroeconomic data and decisions coming out of the US, a meeting of the world’s most powerful central bank chiefs, and Australian retail sales and home loan data out this week.

The post Week ahead: US data, retail sales and home loans. Scott Phillips on Nine’s Late News appeared first on The Motley Fool Australia.

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• The best news you won’t read about
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• Here are the top 10 ASX shares today
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• The interest rate cost of climate inaction. And save, before you spend. Scott Phillips on Weekend Sunrise

Motley Fool contributor Scott Phillips has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Just over nine months ago, we were wishing 2020 ‘good riddance’, and looking forward to a better 2021, on the basis that COVID would be gone, or managed, and life would be back to some sort of normal.

But, in late September 2021, I write this as one of the 60% of Australians in lockdown.

We look enviously to our west, north and far south, as Western Australia, South Australia, the Northern Territory, Queensland and Tasmania live, relatively restriction-free, though even there travel restrictions remain in force.

(Gotta say, though, for those in the East pointing to WA residents ‘struggling’ through lockdown as a reason to lift restrictions… the AFL grand final didn’t exactly look like a bunch of miserable West Australians miserable at their plight!)

Of course, the restrictions nationally, though not ideal, are a helluva lot better than the alternative. And Australians should be bloody proud of ourselves for getting vaccinated in large numbers.

(If you can, but you haven’t, please go get jabbed (after appropriate medical advice, of course. I’ve had mine, and my 5G reception has never been so good. I dream about Bill Gates a lot, too. But I’m sure those side effects will fade. Seriously, just get vaccinated, please.)

But back to my theme. Or, more accurately, on to my theme.

See, the headlines are full of bad news. And it’s bad. Too many people are sick, or have died. Too many are recovering, or grieving friends and family no longer with us.

I don’t want to detract from that, or to pretend that’s not the worst thing that’s happened to those people.

And God knows we owe our scientists, medicos and emergency services personnel a debt we’ll never repay. They remain stretched, tired, yet soldiering on. Thank you!

But I do want to also take some time to count our blessings.

It is the way of humanity that we notice (and remember) the big, bad, ugly stuff.

We tend not to notice the small, regular, improvements that compound day after day, year after year.

As Stephen Pinker told Radio Free Europe:

“Those are undoubtedly threats to progress, and it’s essential to realise that progress does not mean that everything gets better for everyone, everywhere, all the time. That would be a miracle, that wouldn’t be progress. And there are definite threats to progress.

It’s important not to let your view of the world be influenced by headlines — because they report isolated incidents — but to look at counts that add up all of the countries that have moved in one direction or another.”

That applies doubly — and more regularly — to investors.

I wrote last week about the risks that continually appear to threaten stock market progress.

The latest one is the Evergrande sage (the company is a large Chinese property developer, if you missed the news).

It’s the latest, but it won’t be the last.

Meanwhile, Woolworths Group Ltd (ASX: WOW) sold groceries all weekend. BHP Group Ltd (ASX: BHP) mined iron ore. Harvey Norman Holdings Limited (ASX: HVN) sold tellies, computers, beds and couches. CSL Limited (ASX: CSL) created more blood plasma products. Seek hosted more job ads.

Did you read about any of that? Me either.

Not that it should be reported, necessarily, but the fact that it wasn’t — and Evergrande was — impacts our brains in unfortunate ways.

We overweight the latter and forget about the former. We know it’s true, of course; we just tend not to account for it.

In stock market terms, the headline that should, by rights, lead every day is “Businesses get a little bit better, again”

In the main section of the paper, the first few pages should be filled with ‘Humans live a little longer’, ‘A few more people got out of poverty, today’, ‘Cars just got safer, again’ and ‘Computing power got even better, for less, again’.

Sport, of all things, perhaps gets it most right. The sports reporters get to write about yet another world record broken, almost like clockwork. It is a neat analogy for life (and we actually pay attention to that, in the same way we should — but don’t — to numbers released by the Australian Bureau of Statistics).

The ABS, itself, is both a victim to, and part of, the problem. The data it focuses on is the change in national data from month to month or this year versus last year.

And, to be fair to the ABS, that’s its role, and its data is used by policymakers and businesses to plan their immediate futures.

But if and when we give extra funding to this vital body (and we should), one of the first things I’d task them with is to prepare and publicise some longer-term data series.

Looking at things like life expectancy, national income, jobs numbers and standard of living (measured not just in how much money we get, but also what we get for our money) would remind us all of the progress we’re making as people and as a country. The same would be true for the rest of the world, too.

(One of the things we most overlook, when it comes to standard of living, is not just how much stuff we get for our money, which is the usual way people think about it, but how good those things are. A Toyota Camry probably costs about the same as it did twenty years ago, yet the hugely improved fuel economy, the vastly improved safety features and the big jump in standard in-car equipment aren’t captured by the stats. The same is true for computers, phones (including data plans) and lots more!)

Bottom line: The bad stuff gets the headlines. Most, as I said last week, don’t happen. But even when the bad things do come to pass, they are the exceptions that prove the rule of continued human improvement.

Yes, we need to strive to do even better. We need to constantly address things like inequality, other social impacts, and environmental damage.

But the presence of bad news, or imperfect outcomes, doesn’t invalidate the long term arc of improvement.

Yes, even in a year partly wrecked by COVID, things continue to improve. Not every day. Not for everyone. But overall. The march of human progress continues.

If you’ve had a tough 2021, I hope that gives you a reminder to hold on to hopes of better times ahead. And if you’ve been lucky enough to do well this year, I hope it’s a reminder that plenty of people haven’t been so fortunate.

But, overall, I want you to remember that, throughout history, optimism has been the right approach. Over time, through our collective efforts and despite the mistakes, missteps and (still) unaddressed failures, things get better.

It would be a brave person to believe that multi-millennium trend is going to reverse any time soon.

And, as an investor, I wouldn’t bet against it, either.

We have some challenges. We need to address them.

But overall, as a species, we’re far from done. And I’m investing accordingly.

Fool on!

The post The best news you won’t read about appeared first on The Motley Fool Australia.

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Motley Fool contributor Scott Phillips has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended CSL Ltd. The Motley Fool Australia owns shares of and has recommended Harvey Norman Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Ramsay Health Care Limited (ASX: RHC) share price has been an underperformer over the past year. During the last 12 months, shares in the healthcare facility operator have traded sideways, gaining ~2%. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) has dished out a 23.7% return to investors over the same period.

Although, one fund manager is betting on the tide turning as COVID-19 restrictions ease across its operating geographies.

Let’s take a look at why Sydney-based Perennial Partners are bullish on the Ramsay Health share price.

A big backlog filtering through

Firstly, the Perennial Value Australian Shares Trust invests in a broad swathe of ASX shares, with the aim of outperforming the S&P/ASX 300 Accumulation Index on a rolling 3-year basis. At the end of August, the trust held $761 million in funds under management.

To outperform the index, the fund must attempt to balance its investment weightings better than the index itself. As such, compared to the index, the Perennial Value fund is underweight on Rio Tinto Limited (ASX: RIO), Transurban Group (ASX: TCL), Goodman Group (ASX: GMG), Australia and New Zealand Banking Group Ltd (ASX: ANZ), and Afterpay Ltd (ASX: APT).

On the contrary, there are several ASX-listed companies in which the fund sees greater upside potential. One of these shares is Ramsay Health Care. As a result, the Perennial Value fund is overweight with Ramsay when comparing to its benchmark index.

In the near term, elective surgery restrictions in Australia are impacting the healthcare company’s earnings. However, looking beyond this, the fund points out a likely bounce back in surgical volumes once restrictions lift.

Providing justification, Perennial drew attention to the increase in volumes in Ramsay’s United Kingdom operations. Considering the UK is largely open again, procedures deferred by COVID-19 are now being tended to.

According to the Australian Institute of Health and Welfare, the median waiting time for elective surgery in Australia for 2019-2020 increased to 77 days from 66 days. On a similar note, The Age recently reported a significant blowout in Victoria’s hospital waiting lists.

Specifically, the state’s elective surgery waiting list has reached more than 65,000 people – with more than 30,000 procedures being cancelled last year.

Positioning for upside in Ramsay Health share price

The Perennial fund is putting its (investors’) money where its mouth is. According to the trust’s activity in August, the fund took profits in some of its outperforming holdings and redirected that capital elsewhere.

In gearing up for a reopening boom, Perennial allocated those proceeds to several ASX shares, including Ramsay Health.

The Ramsay Health share price finished the Monday trading session at $69.28.

The post Ramsay Health (ASX:RHC) share price presents a reopening play: Fund manager appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler owns shares of AFTERPAY T FPO and Ramsay Health Care Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia has recommended Ramsay Health Care Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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