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Week four of reporting season was jam-packed with another large number of results. Some good, some bad.

Among the best results of the week were the three listed below. Here’s what happened:

Nanosonics Ltd (ASX: NAN)

The Nanosonics share price was a strong performer last week after investors responded very positively to its full year results release. For the 12 months ended 30 June, the infection prevention specialist reported a 3% increase in revenue to $103.1 million and a 15% decline in net profit after tax to $8.6 million. While this may not initially look impressive, its profits were actually significantly ahead of estimates. This was driven by a strong recovery in the second half. Pleasingly, management expects its recovery to continue in FY 2022. It is guiding to double-digit revenue growth in FY 2022. But arguably getting investors the most excited was the announcement of another new product – Nanosonics Coris. This new platform, which is expected to be launched in calendar year 2023, is for cleaning flexible endoscopes.

Sonic Healthcare Limited (ASX: SHL)

The Sonic share price edged higher last week the release of its exceptionally strong full year results. For the 12 months ended 30 June, the healthcare company delivered a 28% increase in revenue to $8.8 billion and a 149% lift in net profit to $1.3 billion. This was driven largely by strong demand for COVID-19 testing services. However, its base business (non-COVID testing operations) also contributed, delivering a 6% increase in revenue for the period.

WiseTech Global Ltd (ASX: WTC)

The WiseTech share price was on fire last week after it smashed its earnings guidance in FY 2021. The logistics solutions platform provider reported an 18% increase in revenue to $507.5 million and a 63% jump in EBITDA to $206.7 million. This compares to its upgraded guidance for revenue of $470 million to $510 million and EBITDA of $165 million to $190 million. Pleasingly, more strong growth is expected in FY 2022. Management is guiding to EBITDA growth of 26% to 38% for the year ahead.

The post 3 top ASX results from week four of reporting season appeared first on The Motley Fool Australia.

More reading

• These were the best performing ASX 200 shares last week
• Sonic Healthcare (ASX:SHL) share price hits record high at $43.43
• Top brokers name 3 ASX shares to sell today
• ASX 200 rises, WiseTech soars, Zip drops
• Top broker gives its verdict on the Nanosonics (ASX:NAN) share price

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 Nanosonics Limited and WiseTech Global. The Motley Fool Australia owns shares of and has recommended Nanosonics Limited and WiseTech Global. The Motley Fool Australia has recommended Sonic Healthcare 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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If you’re an income investor on the lookout for dividend options, then you may want to look at the two listed below.

Here’s what you need to know about them:

Australia and New Zealand Banking GrpLtd (ASX: ANZ)

The first ASX dividend share for income investors to look at is banking giant ANZ.

Thanks to its positive outlook due to improving trading conditions and cost reductions, it could be a top option for income investors. In respect to the latter, ANZ aiming to reduce its cost base materially to $8 billion in the near future.

Another positive is its strong capital position. At the end of the third quarter, ANZ’s CET1 ratio stood at 12.2%. This is significantly higher than APRA’s unquestionably strong benchmark of 10.5%, giving the bank plenty of opportunities to return funds to shareholders. For example, ANZ’s recently announced $1.5 billion share buyback is only expected to reduce its CET1 ratio by 35 basis points.

Analysts at Morgans are bullish on the bank. They currently have an add rating and $34.50 price target on ANZ’s shares.

In addition, the broker is forecasting fully franked dividends of 145 cents per share in FY 2021 and then 165 cents per share in FY 2022. Based on the latest ANZ share price of $28.32, this represents yields of 5.1% and 5.8%, respectively.

Transurban Group (ASX: TCL)

Another ASX dividend share to look at is this toll road operator.

Transurban has a world class portfolio of important toll roads throughout Australia and North America. These include the CityLink in Melbourne, Cross City Tunnel in Sydney, and the AirportlinkM7 in Brisbane.

Lockdowns have inevitably hit the company hard. But with the vaccine rollout going well, it may not be long until its roads are full of traffic again.

Ord Minnett remains very positive on the company. Its analysts currently have a buy rating and $15.50 price target on its shares.

As for dividends, the broker is forecasting dividends of 36.5 cents per share in FY 2022 and then 48.4 cents per share in FY 2023. Based on the current Transurban share price of $14.08, this will mean yields of 2.6% and 3.5%, respectively.

The post 2 buy-rated ASX dividend shares for income investors appeared first on The Motley Fool Australia.

More reading

• ANZ (ASX:ANZ) share buyback, what does it mean for you?
• 2 quality ASX dividend shares rated as buys this month
• Is the ANZ (ASX:ANZ) share price a buy right now?
• Here’s what has been moving the ANZ (ASX:ANZ) share price in August 2021
• What’s moving the ASX 200 Index (ASX:XJO) on Monday?

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 BHP Group Ltd (ASX: BHP) share price has registered modest gains over the past few years. This comes despite the world’s second-largest miner suffering a few hiccups along the way.

Nonetheless, BHP shares have created wealth for investors who bought and held their shares over the long term.

What’s happening with BHP in 2021?

Since the start of the year, the BHP share price has posted a return of just over 5%.

The mining giant’s shares took a massive hit last week following the release of the company’s full-year results, tanking 15%.

BHP recorded a strong underlying performance for the period. However, investors were unimpressed by the miner’s scorecard and merger plans with Woodside Petroleum Limited (ASX: WPL).

The hype around BHP shares quickly fell from a near-record high of $53 to a 6-month low of $43.88.

In addition, the spot price for iron ore fell heavily from mid-July to US$139.50 per tonne, adding to BHP’s woes. Although, it’s worth noting there has been an uptick in the steel-making ingredient prices over the last few days.

How much would you have if you invested $1,000 10 years ago?

If you invested $1,000 into BHP shares in 2011, you would have picked them up for approximately $35.47 apiece. This equates to about 28 shares without reinvesting the dividends.

Fast-forward to today, the closing BHP share price is at $44.70. This means those 28 shares would be worth $1,251.60 (28 shares x $44.70).

When looking at percentage terms, this is a 25.16% increase or an average yearly return of 2.27%. In comparison, the S&P/ASX 200 Index (ASX: XJO) has given back roughly 5.96% over the same timeframe.

Is the BHP share price a buy?

A couple of brokers rated the company with varying price points after providing its full-year results to the market.

Australian investment bank Macquarie cut its 12-month price target by 3.3% to $58 for BHP shares. This implies an upside of around 30% based on the current BHP share price of $44.70.

More in line with the present value of BHP shares, Morgans raised its rating by 0.9% to $45.90.

BHP commands a market capitalisation of roughly $132.3 billion, making it the third largest company on the ASX.

The post If you invested $1,000 in BHP (ASX:BHP) shares a decade ago, here’s what it would be worth now appeared first on The Motley Fool Australia.

More reading

• BHP (ASX:BHP) share price flat despite rebound in iron ore prices
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• BHP (ASX:BHP) share price free falls in August, analysts say iron ore pressures will persist
• How do BHP (ASX:BHP) earnings compare to Woodside Petroleum’s?
• Pilbara Minerals (ASX:PLS) share price bounces back, up 8% on Monday

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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It was a good week for the S&P/ASX 200 Index (ASX: XJO) last week. The benchmark index rose 27.4 points or 0.4% over the five days to end the period at 7,488.3 points.

While a good number of shares climbed higher with the market, some climbed more than most. Here’s why these were the best performers on the ASX 200 last week:

WiseTech Global Ltd (ASX: WTC)

The WiseTech share price was the best performer on the ASX 200 last week with a massive 29.3% gain. Investors were scrambling to buy the logistics solutions company’s shares following the release of its full year results for FY 2021. For the 12 months ended 30 June, WiseTech reported an 18% increase in revenue to $507.5 million and a 63% jump in EBITDA to $206.7 million. This compares favourably to its guidance for full year revenue of $470 million to $510 million and EBITDA of $165 million to $190 million. Looking ahead, management’s guidance for FY 2022 is EBITDA growth of 26% to 38% in FY 2022.

Blackmores Limited (ASX: BKL)

The Blackmores share price wasn’t far behind with a 28.4% gain last week. This was driven by the release of the health supplements company’s full year results. For the 12 months ended 30 June, Blackmores reported a 1.3% increase in revenue to $575.9 million and a 51.7% jump in underlying net profit after tax to $25.4 million. This went down well with analysts at Credit Suisse. In response, the broker upgraded its shares to a buy rating with a $100.00 price target.

Clinuvel Pharmaceuticals Limited (ASX: CUV)

The Clinuvel share price was a very strong performer last week and rose 25.8%. Investors were buying the biopharmaceutical company’s shares after a leading broker responded positively to its full year results. In respect to the latter, in FY 2021 Clinuvel reported a 43% increase in revenue to $48.5 million and a 63.5% jump in net profit after tax to $24.7 million. This led to analysts at Jefferies upgrading the company’s shares to a buy rating with a $36.80 price target.

Flight Centre Travel Group Ltd (ASX: FLT)

The Flight Centre share price was on form and charged 22.9% higher over the five days. This was despite the travel agent posting another large loss in FY 2021. For the 12 months ended 30 June, the company reported a 74.2% decline in total transaction value (TTV) to $3,945 million and an underlying loss after tax of $364 million. However, the company’s outlook gave its shares a major boost. Management advised that it believes Flight Centre can reach profitability in FY 2022.

The post These were the best performing ASX 200 shares last week appeared first on The Motley Fool Australia.

More reading

• These were the worst performing ASX 200 shares last week
• It has been a great week for the Webjet (ASX:WEB) share price
• ASX 200 flat, Wesfarmers drops, Nextdc declines
• Is the Flight Centre (ASX:FLT) share price good value?
• These 3 ASX 200 shares were flying around the share market this Friday

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 WiseTech Global. The Motley Fool Australia owns shares of and has recommended Blackmores Limited and WiseTech Global. The Motley Fool Australia has recommended Flight Centre Travel Group 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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There are a few quality ASX shares that could be worth looking at this weekend.

Businesses that are growing quickly and have long-term growth plans may be ones to consider. Companies in the tech space or have international growth potential could be able to produce good returns over time.

Here are two ASX shares to think about:

Adore Beauty Group Ltd (ASX: ABY)

This business is a large beauty focused e-commerce website that sells over 10,000 products from more than 260 brands. It currently operates in Australia and New Zealand. The Adore Beauty share price has fallen 6.5% over the last two weeks.

The ASX tech share is going to report its result next week. It’s expecting to report a lot of revenue growth. The guidance is for revenue to grow between 43% to 47%.

When Adore Beauty released its FY21 third quarter, it said that it continues to see a structural shift in consumer behaviour towards online retail, based on continued strong retention of customers acquired during the COVID-19 lockdown.

In that third quarter, it delivered revenue of $39.4 million, which was an increase of 47% on the third quarter of FY20.

The FY21 growth, in percentage terms, is expected to be more than FY20’s growth rate.

Adore Beauty says it continues to invest with discipline to drive revenue growth and expand its online leadership position.

The beauty and personal care market in Australia is worth $11.2 billion and is expected to grow at a compound annual growth rate of 26% to 2024. Online sales only make up 11.4% of this market, a lower rate compared to markets like the US and the UK.

Management are expecting operating leverage as it gets bigger because of the largely fixed nature of its cost base.

Magellan Financial Group Ltd (ASX: MFG)

The Magellan share price has fallen 16% over the last month. This is a large funds management business that predominately invests in global shares on behalf of investors. But it also has strategies focused on infrastructure businesses and Australian shares too.

The ASX share diversified its business further in FY21 by making a few external investments into businesses such as Barrenjoey, FinClear and Guzman y Gomez. It was the start-up expenses of investment bank Barrenjoey that caused the Magellan’s FY21 statutory profit to fall 33% to $265.2 million.

However, the core business continues to see profit and profitability rise. Magellan’s average funds under management increased by 9% to $103.7 billion. This helped profit before tax and performance fees of the funds management business rise by 10% to $526.6 million.

Magellan launched a number of other funds and strategic initiatives that may help grow FUM further. Those included the MFG core series, the Magellan sustainable fund and the Magellan FuturePay (retirement) product.

The fund manager’s FUM had grown to $117 billion by the end of July 2021.

Magellan is currently rated as a buy by the broker Morgans with a price target of $54.85. Using the broker’s projections, it is valued at 16x FY23’s estimated earnings with a partially franked dividend yield of 5.8%.

The post 2 quality ASX shares to look at this weekend appeared first on The Motley Fool Australia.

More reading

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• BHP to sell assets to Woodside, Domain surges and Magellan crashes. Scott Phillips on Nine’s Late News
• 3 small cap ASX shares to put on your watchlist this week

Motley Fool contributor Tristan Harrison owns shares of Magellan Financial Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. 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 S&P/ASX 200 Index (ASX: XJO) returned to form last week and recorded a decent gain. The benchmark index rose 27.4 points or 0.4% to end the period at 7,488.3 points.

Unfortunately, not all shares were able to follow the market higher. Here’s why these were the worst performers on the ASX 200 last week:

Austal Limited (ASX: ASB)

The Austal share price was the worst performer on the ASX 200 last week with a 19.4% decline. This followed the release of the shipbuilder’s full year results. In FY 2021, Austal reported a 24.6% reduction in revenue to $1,572 million and a 12.1% decline in EBIT to $114.6 million. The team at Credit Suisse weren’t overly impressed. In response, the broker downgraded the company’s shares to a neutral rating with a lowered price target of $2.25. Credit Suisse has reduced its earnings estimates due to its expectation of softer margins in Australia and lower revenue in the US.

NIB Holdings Limited (ASX: NHF)

The NIB share price was the next worst performer with a 16.7% decline over the five days. Investors were selling the private health insurer’s shares following the release of full year results that fell short of the market’s expectations. In FY 2021, NIB reported a 2.9% increase in revenue to $2.6 billion and an 84.5% lift in net profit after tax to $160.5 million. A note out of Goldman Sachs reveals that it was expecting the private health insurer to report a 92.2% increase in net profit after tax to $171.4 million. In response to the results, Citi downgraded its shares to a sell rating with a reduced price target of $6.30. It was particularly disappointed with the performance of its international business.

Kogan.com Ltd (ASX: KGN)

The Kogan share price wasn’t far behind with a 16.1% decline last week. This was driven by the release of a disappointing full year result. For the 12 months ended 30 June, the ecommerce company reported gross sales growth of 52.7% to $1,179 million but an 86.8% decline in net profit after tax to $3.5 million. The latter was driven by inventory issues and led to Kogan pausing its dividends. Unfortunately, July hasn’t been much better. Kogan revealed a small increase in gross sales and an 80% reduction in EBITDA over the prior corresponding period.

Link Administration Holdings Ltd (ASX: LNK)

The Link share price was out of form and dropped 15.6% over the period. The catalyst for this was the release of the financial technology company disappointing full year result. In FY 2021, Link reported a 6% year on year decline in revenue to $1.16 billion and an 18% decline in operating net profit after tax and amortisation to $113 million.

The post These were the worst performing ASX 200 shares last week appeared first on The Motley Fool Australia.

More reading

• ASX 200 flat, Wesfarmers drops, Nextdc declines
• How does the Medibank (ASX:MPL) earnings result compare to NIB?
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• 5 things to watch on the ASX 200 on Friday

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 Austal Limited, Kogan.com ltd, and Link Administration Holdings Ltd. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia has recommended Link Administration Holdings Ltd and NIB Holdings 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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The A2 Milk Company Ltd (ASX: A2M) share price has managed to shrug off disappointing full-year results to be still trading higher this month.

Despite tanking more than 13% since reporting its results for FY21, shares in the infant formula producer are in the green for August.

Let’s take a look at what’s been supporting the A2 Milk share price.

Takeover talks fuel A2 Milk share price in August

Shares in A2 Milk made significant gains earlier this month following reports of a potential takeover.

Although the company didn’t formally acknowledge the rumours, investors were quick to drive shares in A2 Milk higher.

According to reports, global food giant Nestle was reportedly taking a close look at A2 Milk.

As a result, shares in the company bolted more than 17% higher.

Full-year results weigh down A2 Milk share price

A disappointing full-year result and outlook brought a wave of selling upon the A2 Milk share price earlier this week.

A2 Milk reported a 30% decline in revenue to NZ$1.21 billion during FY21.

In addition, the former market darling noted a 77.6% reduction in earnings before interest, tax, depreciation and amortisation (EBITDA) to NZ$123 million.

A2 Milk also advised that the company would review its growth strategy, given the rapid changes in the daigou channel and Chinese infant formula market.  

The outlook for A2 Milk

A2 Milk’s management noted an uncertain outlook after delivering the company’s full-year result.

Growth in the Chinese formula market remains the main driver of A2 Milk’s earnings.

According to management, falling birth rates in China could weigh heavily on the company’s outlook.

In addition, the company cited a sharp fall in demand and disruption in cross-border trade.

In light of these circumstances, its management stressed the importance of innovating and expanding its product portfolio.

A2 Milk is also in the process of addressing major problems with inventories.

At the end of June, the company’s inventory stood at $NZ112.2 million, with A2 Milk focused on reducing excess stock.

As a result of these headwinds, A2 Milk expects revenue for the first half of FY22 (including MVM) to be marginally lower than the first half of FY21.

Despite a strong rally earlier this month, the A2 Milk share price has plummeted more than 47% since the start of 2021.

The post Despite disappointing FY21 results, the A2 Milk (ASX:A2M) share price is still up in August. Here’s why appeared first on The Motley Fool Australia.

More reading

• Leading brokers give their verdict on the A2 Milk (ASX:A2M) share price
• The ASX reporting wrap-up: A2 Milk, Woolworths, Appen
• ASX 200 drops, A2 Milk sinks, Appen plummets
• Here are the 3 heaviest trading ASX 200 shares this Thursday
• Why A2 Milk, Appen, Jumbo, & Link shares are sinking

Motley Fool contributor Nikhil Gangaram owns shares of A2 Milk. 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 recommended A2 Milk. 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 Webjet Limited (ASX: WEB) share price has climbed around 15% over the last week, making it a good week for shareholders.

Investors may have been looking to other results and commentary in the ASX travel sector.

There have been two businesses that have reported their result recently.

Flight Centre Travel Group Ltd (ASX: FLT)

Flight Centre is a reasonably similar business to Webjet as a travel agent business, though the business model and geographic and sector exposures are a bit different. It reported its FY21 result this week.

June 2021 was a record for revenue despite lockdowns and heavy restrictions. It said that corporate total transaction volume (TTV) was tracking at 40% of pre-COVID levels globally by the year end. There had been a rapid leisure and corporate recovery in the US late in the fourth quarter.

Flight Centre pointed to strong and immediate rebounds after travel restrictions are lifted.

Whilst exposed to vaccination efforts and borders reopening, Flight Centre said that it’s targeting a return to profitability in both the corporate and leisure markets during FY22.

The ASX travel share also said that the resumption of international travel could be an earnings catalyst.

Qantas Airways Limited (ASX: QAN)

Qantas also shared some positive comments about its result and prospects, which could also have an impact on the Webjet share price and profit.

The airline said that 95% of its domestic flying was cash positive in FY21. It said that demand proved resilient throughout the year, with quick uptake in bookings when domestic borders reopened. Qantas has announced 46 new domestic routes since the start of the pandemic, many to regional destinations, in response to a boom in leisure travel driven largely by the closure of international borders.

It also said that corporate travel demand has recovered to around 75% of pre-COVID levels in May.

Qantas also said that when Australia reaches those critical vaccination targets later this year and the likelihood of future lockdowns and border closures reduces, it expects to see a surge in domestic travel demand and a gradual return of international travel.

Once Australia’s borders start to reopen, group international capacity is expected to be between 30% to 40% in the third quarter of FY22 and 50% to 70% in the fourth quarter, compared to pre-COVID levels on available seat kilometres.

Destinations with high vaccination rates are the initial focus, including North America, the UK, Singapore and Japan. Travel to Fiji and New Zealand is also expected.

Webjet share price valuation

A few months ago, Webjet reported its FY21 result. It said that its online travel agency (OTA) profitability continues to improve (it made an operating profit in the nine months to 31 March 2021) and WebBeds is committed to emerging from COVID as the number one global business to business provider.

UBS currently rates Webjet as a buy with a price target of $5.90.

According to the broker, the Webjet share price is valued at 17x FY23’s estimated earnings.

The post It has been a great week for the Webjet (ASX:WEB) share price appeared first on The Motley Fool Australia.

More reading

• Is the Flight Centre (ASX:FLT) share price good value?
• Own Flight Centre (ASX:FLT) shares? Here’s what the company has planned for FY22
• Here are the 3 heaviest trading ASX 200 shares this Thursday
• Why Blackmores, Flight Centre, Kuniko, & Qantas shares are soaring today
• Qantas (ASX:QAN) share price up amid plan to restart international travel

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 Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group 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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If you are looking to bolster your portfolio with some ASX 200 shares, you may want to look at the two listed below.

Here’s why these ASX 200 shares are highly rated right now:

CSL Limited (ASX: CSL)

The first ASX 200 share to look at is CSL. It is one of the world’s leading biotherapeutics companies, comprising the CSL Behring and Seqirus businesses. CSL Behring is the global leader in plasma therapies and Seqirus is the second largest influenza vaccines business.

It recently released its full year results and revealed a 9.6% increase in constant currency revenue to US$10,026 million and a 10% lift in profit after tax to US$2,307 million. The latter was ahead of its guidance of 3% to 8% growth.

And while plasma collection headwinds are expected to weigh on its performance in FY 2022 and lead to a decline in profit, its long term prospects remain very positive. This is thanks to strong demand for its key therapies and its pipeline of potentially lucrative products under development.

Morgans is positive on the company. The broker currently has an add rating and $324.40 price target on its shares.

REA Group Limited (ASX: REA)

Another ASX 200 share for investors to look at is REA Group. It is the leading player in real estate listings in the Australian market with its realestate.com.au website.

In addition to this, the company has a number of complementary businesses both at home and internationally. It has also just strengthened its offering with the acquisition of Mortgage Choice and an interest in Simpology.

All in all, this appears to have left REA Group in a strong position to continue its solid growth over the next decade.

Goldman Sachs certainly expects this to be the case. It is very bullish on REA Group’s prospects and has a buy rating and $190.00 price target on its shares.

The post 2 ASX 200 shares that are rated as buys appeared first on The Motley Fool Australia.

More reading

• August has been a great month so far for the CSL (ASX:CSL) share price
• 2 excellent blue chip ASX 200 shares named as buys
• What’s moving the ASX 200 Index (ASX:XJO) on Monday?
• The CSL (ASX:CSL) share price has gained 14% in the last 6 months
• ASX 200 Weekly Wrap: Miners drag ASX back to earth

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 CSL Ltd. The Motley Fool Australia has recommended REA Group 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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The Commonwealth Bank of Australia (ASX: CBA) share price is holding up today, despite the pushback the company is receiving from Apple Inc (NASDAQ: AAPL).

At close of trade, shares in Australia’s largest bank were trading for $101.54 – up 0.54%. The S&P/ASX 200 Index (ASX: XJO), meanwhile, finished the day 0.04% lower.

The quarrel between the tech behemoth and the Australian banking giant originated from comments CommBank CEO, Matt Comyn, made at the Joint Parliamentary Committee Inquiry into mobile payments and digital wallets. Comyn said Apple’s practices in relation to mobile payments amounted to a “distortion” of the market.

Let’s take a closer look at his comments and Apple’s response.

CommBank v. Apple

Comyn’s main frustration with Apple is his claim that the company does not allow digital wallets on its mobile devices bar like its own Apple Wallet. He says Apple “restricts access to the [near-field communication] NFC chip”. He contrasts this with Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) and their Android devices.

He said:

On android systems, by contrast, multiple wallet apps coexist. At last count, around eight were available in Australia alone. These include ours as well as a number from our competitors, both new and established players. This provides Australians who own android devices with choice and forces Google and others to compete for those consumers’ business. Australians who use Apple devices should be able to make their own decisions about which features they prefer in a wallet app, as android users can, yet currently they cannot.

In its own written submission to the committee, Apple says the heat it gets for its NFC technology is “driven by companies seeking to mischaracterise Apple’s technical and customer-experience led approach for their own commercial gain.”

“Apple’s model [of restricting access to its NFC chips] is designed to ensure that all developers, including banks, car manufacturers, loyalty programs and others, have equal access to NFC,” the Silicon Valley giant added.

Apple then went on to say Comyn’s preferred Android model is in reality the anti-competitive option.

[The Android model] effectively gives one player (potentially a bank) sole control over NFC to the exclusion of their competition…

Allowing Commonwealth Bank to have sole control of the NFC controller would assist them in not only locking out competitors but also prevent innovation around non-bank use cases such as car keys or health insurance cards.

Despite this pointed criticism, the CBA share price ended the day in the green.

“The thought that a single provider could have 80 per cent market share in an individual market is usually cause for concern.”

Comyn told the committee that he expects the majority of payments made in Australia this year to be via tap and go options. He said Apple Pay makes up 80% of those payments.

The thought that a single provider could have 80 per cent market share in an individual market is usually cause for concern. I’d be the first to say [Apple] make fantastic products, but this is a company whose market cap is double Australia’s gross domestic product…

Apple also addressed this 80% claim in its submission.

Apple Pay has under a 10% share of all credit and debit card spend across Australia.

The misleading 80% figure shared initially by Commonwealth Bank and cited in future dialogue and media reports does not represent Apple Pay’s share of any market. It is simply the percentage of Apple Pay transactions from Commonwealth Bank’s overall digital wallet payments at point of sale. This high usage of Apple Pay amongst Commonwealth Bank customers only demonstrates how strongly consumers prefer the convenience, security and privacy provided by Apple compared to the model being advocated by the Commonwealth Bank.

The ugly spat appears to be having little effect on the CBA share price.

CBA share price snapshot

Over the past 12 months, the CBA share price has increased 46.5% while the ASX 200 is 23.3% higher at the same time. Year-to-date, Commonwealth Bank’s value appreciated 20.8%. The benchmark index lifted 12% since 1 January.

Commonwealth Bank has a market capitalisation of $179 billion.

The post Commonwealth (ASX:CBA) share price lifts despite Apple crying foul appeared first on The Motley Fool Australia.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Marc Sidarous 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 Alphabet (A shares), Alphabet (C shares), and Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), and Apple. 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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