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As we marked a year since the introduction of COVID-19 lockdowns in Australia and with Easter upon us, we asked our Foolish contributors to compile a list of some of the ASX shares experts are saying to Buy in April.

Here is what the team have come up with…

Tristan Harrison: Brickworks Limited (ASX: BKW) 

Brickworks has a number of positives going for it right now. The Australian construction market is going strong, whilst the US construction industry is finally seeing a recovery. 

Its property trust joint venture is making good progress at building new large warehouses. Plus, there’s still plenty of land left for development.  

Brickworks revealed in its FY21 half-year result that its inferred asset backing is over $27 per share, meaning that the current Brickworks share price is trading at a substantial discount to this. Within that value, some land is held at book value, but with a “significantly higher” market value.  

Motley Fool contributor Tristan Harrison does not own shares of Brickworks Limited.

Bernd Struben: Rural Funds Group (ASX: RFF)

ASX investors looking for potential share price gains along with a historically reliable income stream may want to consider Rural Funds Group.

Rural Funds leases agricultural equipment and property including cattle ranches, vineyards and cropping acreage. The company is in a good position with its leasing terms, with an average weighted lease expiry (WALE) of 11.1 years.

Rural Funds has a market cap of $801 million and has a strong history of regular and growing dividends. It pays a current annual dividend yield of just over 4.6%, unfranked.

At the time of writing, the Rural Funds share price is up by around 23% over the past 12 months.

Motley Fool contributor Bernd Struben does not own shares of Rural Funds Group.

Sebastian Bowen: Coles Group Ltd (ASX: COL) 

The ASX’s second-largest grocery giant, Coles, has had a rough start to the year, evidenced by its year-to-date fall of close to 15%.

However, that might make Coles a cheap option to consider, especially if you value dividend income.

On recent pricing, the Coles share price is offering a yield that’s close to 4%, with a price-to-earnings (P/E) ratio of under 21.

The dividend also comes with full franking credits of course, which could come in handy in this era of near-zero interest rates. Both of those metrics outshine Coles’ arch-rival Woolworths Group Ltd (ASX: WOW).  

Motley Fool contributor Sebastian Bowen does not own shares of Coles Group Ltd. 

Mitchell Lawler: Elders Ltd (ASX: ELD)

Heavy rainfall over the past couple of weeks has been devastating for some – but for farmers, the ground soaking was well needed.

The rainfall strengthens what has already been a blockbuster 12 months for our primary producers. Cattle prices have surged to astronomical levels as herds are restocked. Crop yields are also at record highs. A telling sign of how insulated the agriculture sector is from COVID-19 impacts.

If conditions continue to be favourable as they have been for farmers, Elders will continue to benefit. Elders’ cropping retail products, livestock agency services, and financial services are all closely tied to farming conditions.

Analysts at Goldman Sachs also see a favourable future for the company. The firm holds Elders on its conviction list with a buy rating and a 12-month price target of $15 a share – representing an upside of 20.5%.

Motley Fool contributor Mitchell Lawler owns shares of Elders Limited. 

Brendon Lau: IGO Ltd (ASX: IGO)

There’s a re-rating opportunity for the IGO share price, according to JPMorgan.

The miner is close to selling its stake in its Tropicana gold project and buying a $1.4 billion stake in Tianqi. The transactions will transform IGO into a pure raw material producer for high nickel batteries at a time when demand for the batteries is set to soar.

JPMorgan is recommending the stock as “overweight” with a price target of $7.80 a share.

Motley Fool contributor Brendon Lau does not own shares of IGO Ltd.

James Mickleboro: Adore Beauty Group Ltd (ASX: ABY)

Adore Beauty is Australia’s leading pureplay online beauty retailer with almost 800,000 active customers. Thanks to the accelerating shift to online shopping, Adore Beauty has been in fine form in FY 2021. During the first half, the company reported an 85% increase in half-year revenue to $96.2 million and a 188% jump in operating earnings to $5.2 million.

The good news is that this is still only a very small slice of its ~$11 billion addressable market. This gives Adore Beauty a long runway for growth over the next decade. Especially given the relatively low penetration of online beauty sales in Australia compared to other Western markets. An estimated 7.3% of beauty sales are made online here, whereas in the US it is over double this at 15.4%. UBS is a fan of the company and recently put a buy rating and $6.20 price target on its shares.

Motley Fool contributor James Mickleboro does not own shares of Adore Beauty.

More reading

• 2 top ASX dividend shares to buy this month
• Is the ASX tech sector in for more pain?
• 2 of the best ASX shares to buy for your retirement portfolio
• Is Coles (ASX:COL) a great value ASX dividend share?
• Over 1 in 4 Australians are investing in the ASX: report

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Adore Beauty Group Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and RURALFUNDS STAPLED. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths Limited. The Motley Fool Australia has recommended Elders 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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Are you wanting to bolster your income portfolio with some reliable ASX dividend shares in April?

Then you might want to take a look at the dividend shares listed below. Here’s what you need to know about them:

BWP Trust (ASX: BWP)

BWP is the largest owner of Bunnings Warehouse properties in Australia with a total of 68 properties in its portfolio.

While having such a reliance on a single tenant can carry risks, on this occasion it appears to be a strength. Bunnings is a fantastic business, which has proven to be able to grow whatever the economy throws at it.

In addition to this, Bunnings’ owner, Wesfarmers Ltd (ASX: WES), is a major shareholder of BWP. As a result, Wesfarmers is unlikely to do anything that would hurt its investment, such as mass lease terminations.

Pleasingly, BWP has been on form again this year. It recently released its first half results for FY 2021 and revealed profit growth of 6% over the prior corresponding period to $144 million.

This positive form allowed the BWP board to reaffirm its plans to pay a full year distribution of ~18.3 cents per share. Based on the current BWP share price, this represents a generous 4.6% dividend yield.

Rural Funds Group (ASX: RFF)

Rural Funds is a leading owner of agricultural property. It currently owns a $1.1 billion portfolio of diversified agricultural assets, including almond and macadamia orchards, premium vineyards, water entitlements, cattle and cropping assets. These are all leased to high quality and experienced tenants. This includes wine giant Treasury Wine Estates Ltd (ASX: TWE).

One of the main attractions to the company for investors is its long term leases. These provide the company with great visibility on its future earnings, allowing it to target consistent distribution growth each year. At the end of the first half, Rural Funds’ weighted average lease expiry (WALE) stood at a sizeable 11.1 years.

In FY 2021 Rural Funds intends to pay a 11.28 cents per share distribution and then an 11.73 cents per share distribution next year. Based on the current Rural Funds share price, this equates to 4.85% and 5% yields.

More reading

• ‘Remarkable resilience’ in Aussie farmland a tailwind for ASX agriculture shares
• 2 ASX dividend shares to buy in April
• 2 outstanding ASX shares for your retirement portfolio
• 2 quality ASX dividend shares with generous yields
• 2 ASX dividend shares for steady income in retirement

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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On Wednesday the S&P/ASX 200 Index (ASX: XJO) was on form and ended the month on a very positive note. The benchmark index rose 0.8% to 6,790.7 points.

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

ASX 200 futures pointing higher

The Australian share market looks set to start the month in a positive fashion following a solid night of trade on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 30 points or 0.45% higher. In late trade on Wall Street, the Dow Jones is up 0.1%, the S&P 500 has risen 0.8%, and the Nasdaq has jumped 2%.

Tech shares on watch

It could be a good day for ASX tech shares such as Xero Limited (ASX: XRO) and Zip Co Ltd (ASX: Z1P) on Thursday after US tech stocks surged higher during overnight trade. At the time of writing, the tech-focused Nasdaq index is up a sizeable 2%. Strong gains by a number of tech giants have helped drive the index higher.

Oil prices weaken

Energy producers Beach Energy Ltd (ASX: BPT) and Woodside Petroleum Limited (ASX: WPL) could trade lower today after oil prices weakened. According to Bloomberg, the WTI crude oil price is down 2.3% to US$59.16 a barrel and the Brent crude oil price has fallen 0.9% to US$63.57 a barrel. This follows news that OPEC has lowered its 2021 demand growth forecast due to a slower than expected recovery.

Gold price rebounds

Gold miners Newcrest Mining Ltd (ASX: NCM) and Resolute Mining Limited (ASX: RSG) could be on the rise today after the gold price rebounded. According to CNBC, the spot gold price is up 1.4% to US$1,709.30 an ounce. This was driven by a softening US dollar. Despite this solid gain, the precious metal is on course to have its worst quarter in over four years.

Suncorp rated as a buy

The Suncorp Group Ltd (ASX: SUN) share price could be in the buy zone according to analysts at Goldman Sachs. This morning the broker retained its buy rating but trimmed its price target slightly to $12.05. Goldman has reduced its earnings estimates by 5% for Suncorp in FY 2021 to reflect the flood claims. However, it still sees enough value in its shares at this level to retain its buy rating.

More reading

• ASX 200 finishes quarter strongly, Zip partners with JB Hi-Fi, Suncorp gives flood update
• Is the ASX tech sector in for more pain?
• Afterpay (ASX:APT) also signs deal with JB Hi-Fi & The Good Guys
• The Zip (ASX:Z1P) share price is seesawing today on partnership news
• ASX 200 jumps 1.35%: Zip inks deal with JB Hi-Fi, Suncorp’s flood update

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

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The S&P/ASX 200 Index (ASX: XJO) has risen 0.8% in the final day of the quarter to 6,791 points.

These are some of the highlights from the ASX today:

Zip Co Ltd (ASX: Z1P) wins a big new merchant

Zip announced today that it has entered into a partnership with JB Hi-Fi Limited (ASX: JBH).

If you didn’t know, JB Hi-Fi operates both JB Hi-Fi stores and The Good Guys. It’s one of Australia’s largest technology and entertainment retailers.

Zip will provide its interest-free payments solution for both of JB Hi-Fi’s businesses, both in-store and online.

Peter Gray, the co-founder and chief operations officer of Zip, said:

We are delighted to partner with the JB HI-FI Group. We look forward to providing customers with choice at checkout, empowering them to own the way they pay at JB HI-FI and The Good Guys. This strategic partnership provides Zip customers with access to even more of Australia’s favourite brands, further delivering on Zip’s mission to be the first payment choice everywhere and every day.

Zip is anticipating this partnership will be launched to market in April 2021.

The Zip share price grew by 0.4% today.

Suncorp Group Ltd (ASX: SUN)

Today, Suncorp gave an update on the expected financial impact from the heavy rainfall and flooding across NSW, South East Queensland and Victoria.

The ASX 200 share has received over 7,600 claims across all three states. The insurer is expecting that number to rise as customers gain access to affected regions and the extent of damage becomes clear.

The CEO of Suncorp, Steve Johnston, said:

Suncorp continues to work with our customers, particularly in the hardest-hit areas of the mid-North Coast of NSW and Western Sydney.

Floods too frequently devastate communities across Australia, which is why as a country we must address this risk. Unfortunately, many homes in Richmond, Windsor, Penrith, Port Macquarie and Taree are in medium to very high flood risk areas.

As a country, we need to address how we can protect homes in flood-prone regions through government investment in mitigation infrastructure. We must also improve planning decisions to ensure we are not building new homes in high-risk areas.

Based on claims lodged to date and the group’s preliminary assessment of damage, Suncorp estimates net claims costs in relation to this event will be $230 million to $250 million. Suncorp expects the majority of claims to be attributed to a single event across all three states for reinsurance purposes. The costs of this event will be capped at $250 million under the group’s main catastrophe program.

Spirit Technology Solutions Ltd (ASX: ST1)

Spirit Technology announced an acquisition today.

It’s acquiring Nexgen, which has over 5,500 data and voice business customers with 4,000 being contracted and recurring. The average contract term is 4.5 years with no customer concentration. It also has more than 100 sales team members that will be joining Spirit to sell Nexgen products and cross-sell Spirit’s internet, cloud, voice, mobiles and cyber security.

Nexgen is expected to generate $36 million of revenue and is tracking to a forecast of FY21 earnings before interest, tax, depreciation and amortisation (EBITDA) of between $7.2 million to $7.6 million. The implied multiple is 6.5x with the completion payment (including a deferred component of $10 million) capped at $50 million.

Spirit Technology will have over 10,500 business customers after the acquisition.

To fund this, it has successfully conducted a placement to institutional and sophisticated investors raising $23.8 million and its debt facility has been increased by $10 million to $25 million.

More reading

• Is the ASX tech sector in for more pain?
• Afterpay (ASX:APT) also signs deal with JB Hi-Fi & The Good Guys
• Why Aristocrat Leisure, Opthea, PointsBet, & Spirit are storming higher:
• The Zip (ASX:Z1P) share price is seesawing today on partnership news
• ASX 200 jumps 1.35%: Zip inks deal with JB Hi-Fi, Suncorp’s flood update

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of SPIRIT TC FPO and ZIPCOLTD FPO. The Motley Fool Australia has recommended SPIRIT TC FPO. 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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Are you looking to add a growth share or two to your portfolio next month? Then take a look at the two ASX shares listed below.

Here’s why they could be growth shares to buy right now:

ELMO Software Ltd (ASX: ELO)

ELMO is a cloud-based human resources and payroll software company that provides businesses with a unified platform to streamline a wide range of processes.

It has been a strong performer in recent years and pleasingly this continued in FY 2021 despite the pandemic. Last month ELMO released its half year results and revealed that its annualised recurring revenue (ARR) had grown to $74.2 million. This was driven by a combination of organic growth and the benefits of acquisitions that have strengthened its offering and increased its addressable market.

Morgan Stanley was pleased with its half year results and put an overweight rating and $9.70 price target on its shares. It is confident on its second half prospects and appears confident it will achieve its FY 2021 guidance.

Pro Medicus Limited (ASX: PME)

Another growth share to look at is Pro Medicus. It is a healthcare technology company that provides radiology information systems (RIS), picture archiving and communication systems (PACS), and advanced visualisation solutions to healthcare organisations globally.

It has been performing positively during the pandemic and reported strong revenue and profit growth last month. For the six months ended 31 December, Pro Medicus delivered a 7.8% increase in revenue to $31.6 million and a 25.9% jump in underlying profit before tax to $18.76 million.

Pleasingly, since the end of the half the company has won a number of lucrative long term contracts with major healthcare institutions. And thanks to its industry-leading software, its sizeable market opportunity, and the shift away from legacy systems, it wouldn’t be a surprise to see more contract wins in the coming months. 

Goldman Sachs is a fan and recently upgraded Pro Medicus’ shares to a buy rating with a $53.80 price target. It believes it is well-positioned to grow its earnings at a rapid rate over the coming years.

More reading

• 2 strong ASX mid cap shares to buy
• 2 ASX tech shares growing rapidly to buy
• 2 ASX shares delivering irresistible growth
• ELMO (ASX:ELO)’s disappointing Supreme Court decision revealed
• 3 ASX Healthcare shares feeling a little under the weather

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 recommends Elmo Software and Pro Medicus Ltd. The Motley Fool Australia has recommended Elmo Software and Pro Medicus 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 Euro Manganese Inc CDI (ASX: EMN) share price has surged 8.8% to 68 cents today after the company posted a series of positive investment results in its tranche placement announcement. More impressively, it’s up 655% over the past 12 months as one of the relatively few manganese producers worldwide.

Let’s take a closer look at what’s driving the battery minerals company today.

What did Euro Manganese announce?

Today’s Euro Manganese share price movement follows news of its closure of the first tranche of its $30 million private placement.

The tranche comprised the sale and issue of around 41.6 million CHESS Depositary Interests (CDIs) at 60 cents per CDI. Proceeds will go towards expanding its Chvaletice manganese extraction project and there is a second tranche to come, involving the sale of 8.3 million CDIs by May.

The Euro Manganese share price rise is also due to the company’s support from the European Institute of Innovation & Technology (EIT), a European Union investment fund focused on supporting clean energy projects. EIT is providing Euro Manganese three grants totalling approximately $385,000. 

The company also advised it had benefitted from the Czech Republic’s Ministry of Industry and Trade decision to extend its investment incentive tax credits until 2025.

Management commentary

When Euro Manganese first announced its $30 million private placement 9 days ago, its CEO Marco Romero said that demand for the mineral was constantly improving.

The demand for high-purity manganese products continues to grow and the latest market developments have further improved our prospects. Volkswagen Auto Group recently announced plans to use a high proportion of manganese in the batteries that will be used in the largest segment of its future electric vehicle production.

This financing will allow us to complete all site and technical work required for a final investment decision expected in 2022. Euro Manganese is clearly in the right place at the right time.

A closer look at Euro Manganese Inc

The Canadian small-cap battery materials company is a dual-listed company on the ASX as it focuses its mineral exploration, not in Canada or Australia, but in the mining exploration destination of the Czech Republic. 

The company’s Czech Republic project, titled Chvaletice, is producing high-purity electrolytic manganese metal and high-purity manganese sulphate monohydrate. Its manganese products are aimed at the electric vehicle (EV) industry, which is expected to increasingly demand manganese as a critical metal for its batteries.

In a sense, both Euro Manganese and the Czech Pardubice District lucked out on its current global manganese significance, as Euro Manganese is simply reprocessing a large deposit of manganese carbonate contained in waste from historical mining operations at the site.

But, like many rare earth metals miners, its potential profitability is a little more complicated than it looks…

What is manganese?

Manganese is an interesting precious mineral often found in combination with iron, as it’s not a free element in nature. It’s currently an essential ingredient in the development of steel and is also used in animal feed.

However, until recently, it flew under the radar of the United States and other large mining nations, which may help explain why Euro Manganese is focused on the Czech Republic.

Manganese has a growing role in the production of electric vehicle batteries, as a key ingredient in lithiated manganese dioxide (LMD) batteries. A typical LMD battery uses 61% of manganese and only 4% lithium and reportedly has numerous benefits over lithium-ion batteries, including higher power output, thermal stability, and improved safety. 

As is the case with many of these precious metals that could play a key role in renewable energy technology, the rate of supply and demand is constantly changing as large nations play catch-up and often attempt to stranglehold emerging markets.

Since the US added manganese to its “critical materials” list in 2017 in anticipation of this increase in demand, the price has been incredibly volatile and that’s had an equally volatile impact on the Euro Manganese share price.

More reading

• Why the Euro Manganese (ASX:EMN) share price is volatile this week
• Mining companies with ESG strategies are at the front of the pack

Motley Fool contributor Lucas Radbourne-Pugh 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’s no secret that the place to be for S&P/ASX 200 Index (ASX: XJO) gains in 2021 so far has not been the ASX tech sector. Or any ASX shares that can be called a ‘growth share’ for that matter.

Former high flyers like Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P) have spent the last month or so coming back to earth after recovering spectacularly from the lows of the coronavirus-induced market crash last year. Since 16 February, Zip shares have lost more than 46% of their value, whilst Afterpay is down more than 34% over the same period.

It’s not just these buy now, pay later (BNPL) companies that are suffering though. Xero Limited (ASX: XRO) is down almost 15% in 2021 so far. Altium Limited (ASX: ALU) is down nearly 23%. Appen Ltd (ASX: APX) has lost a hefty ~37%.

In fact, the entire S&P/ASX All Technology Index (ASX: XTX) is down 9% in 2021 so far.

The catalyst for these reversals of fortune has almost universally been blamed on rising government bond yields. Bond yields punish growth companies especially hard because they dampen the appeal of companies that are valued on their potential future earnings, rather than on the earnings they make today. That’s pretty much every high-flying growth share. Remember, even at today’s share price, Afterpay is worth more than Coles Group Ltd (ASX: COL), even though Coles is laughably more profitable than Afterpay at the present time.

But the pain might be about to get worse for ASX tech investors.

Bond blitz coming for ASX tech shares?

According to CNBC, the US 10-year government bond yield hit a high of more than 1.77% in overnight trading. That’s the highest level US 10-year Treasuries have been at since January 2020, a good 14 months ago. Even though I’m sure I don’t have to remind you, that’s also since before the pandemic.

Our own 10-year government bond yields have also been rising, as is typical of US and Australian bonds. At the time of writing, the 10-year Australian government bond yield is sitting at 1.78%.

Say yields continue to stay at this level or let alone continue to push higher. We could well see an acceleration of selling across growth shares and in the tech sector in particular.

So if these companies have a large presence in your ASX share portfolio, this is an area you certainly want to keep an eye on going forward.

More reading

• 2 of the best ASX shares to buy for your retirement portfolio
• Why the Wesfarmers (ASX:WES) share price is up today
• Is Coles (ASX:COL) a great value ASX dividend share?
• Afterpay (ASX:APT) also signs deal with JB Hi-Fi & The Good Guys
• The A2 Milk (ASX:A2M) share price was down almost every day in March

Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Appen Ltd, Xero, and ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO 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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The Douugh Ltd (ASX: DOU) share price traded lower today after the smart bank account provider posted a remedial action update. At the time of writing, the Douugh share price finished 3.13% lower to 16 cents per share. Which appears particularly poor when compared to the 0.78% gain in the S&P/ASX 200 Index (ASX: XJO).

Today’s disappointing performance appears to stem from the company’s completion of remediation following the breach which came to light in early January. In short, during Douugh’s ASX listing, the parents of one of the company’s directors, Bert Mondello, were issued shares without shareholder approval.

Actions complete, Douugh share price damage remains

This speculative growth-share has been on a rollercoaster since listing. Within 10 days from making its ASX debut, Douugh’s share price increased fivefold from 6.8 cents to 34.5 cents a share. However, the following months have been marred by various listing breaches. As a result, the company’s latest announcement looks to lay to rest the breach shares incident.

According to the release, the company obtained relevant shareholder approvals to undertake a selective capital reduction of the breach shares. More importantly, the breach shares held by the director’s parents were sold on-market with all profits being donated to registered charities. The net profits from the disposal totalled $252,291.

Lastly, Douugh advised it continues to consider making changes to the composition of the board to hold the appropriate mix of qualifications, experience, and expertise. An outcome of this is expected from the company prior to its next quarterly report, 30 April 2021.

Despite these actions, the Douugh share price has lost roughly 43% since the breach revelations arose. Shareholders appear to have not found much solace in the company’s directors completing an ASX listing rules compliance course.

Recent developments

Lost in all the tribulations are the company’s latest developments in delivering on its financial wellbeing experience. Here’s a quick summary of recent events:

• Douugh acquires millenial-focused investing app Goodments – 6 January
• Launches ‘self-driving’ money management feature called Autopilot – 9 February
• Reports strong growth metrics in 3 months since launch, reaching 8,001 customers – 18 February
• Launches instant virtual card provisioning with Mastercard – 11 March

Even with the company making efforts to move forward, the Douugh share price has continued its downward trend. As a result, the company’s market capitalisation now stands at $57.5 million.

More reading

• Why the Douugh (ASX:DOU) share price is surging 8% this morning
• One person earned $250,000 on Airtasker last year. Now it’s listing
• Why the Douugh (ASX:DOU) share price is jumping 12% today

Motley Fool contributor Mitchell Lawler owns shares of Douugh 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 PayGroup Ltd (ASX: PYG) share price edged higher today before ending the day down. Today’s price oscillation comes after the company announced a new acquisition and updated earnings guidance. Today’s announcement ended the trading halt the company had been in since yesterday.

At close of trade today, the PayGroup share price was at 62.5 cents – 0.79% lower. For comparison the S&P/ASX All Ordinaries Index (ASX: XAO) finished the day up 0.68%.

What did PayGroup announce to the ASX today?

In a statement to the ASX, the business software gave several announcements regarding its business. These were:

• An upgraded earnings guidance for FY21.
• A strategic acquisition.
• Confirmation of commitments to raise $15 million via an institutional placement, and
• A share purchase plan offer to eligible shareholders to raise $1 million.

FY21 earnings guidance

PayGroup has announced a further revision of its earnings guidance for FY21, just over two weeks from its first guidance update for FY21. In today’s announcement, the company said it expects annualised recurring revenue (ARR) for the financial year to equal $21.5 million. That’s $1 million above the last guidance.

Furthermore, the company said it expects the value of new contracts signed this financial year to total $13 million. This is $3 million above the last guidance.

Strategic acquisition

In its second announcement today, the company advised it would purchase 100% of Integrated Workforce Solutions (IWS).

IWS is a workforce management software platform “specialising in solutions for the franchise sector in Australia and New Zealand.” IWS already has 1,000 customers and processes 400,000 payslips a year. PayGroup says the platform has a customer retention rate of 94%.

The total cost of the purchase to PayGroup is $15.3 million. The payment compromises a $12.75 million initial consideration ($8.4 million of which is payable in cash and the rest in PayGroup equity). The company will pay the remainder of the fee if key revenue and profit targets are met during FY22 and FY23.

PayGroup expects the acquisition to make “a material contribution” to the company’s growth going forward due to increased ARR and gross margins. This should bode well for the PayGroup share price.

$15 million institutional placement

PayGroup claims in today’s statement it has “secured firm commitments from new and existing investors” to raise $15 million before costs. 26.8 million shares will be issued at price of 56 cents each, which represents an 11.1% discount on the previous trading day’s close.

$1 million share purchase plan

Existing, eligible shareholders in the company will be able to purchase up to $30,000 worth of new shares each under a plan to raise approximately $1 million. To be an eligible shareholder, an investor must reside in Australia or New Zealand and have held shares in the company as of 7:00pm on 30 March 2021.

The new shares will be sold at a price of 56 cents each.

PayGroup share price snapshot

Over the last 12 months, the PayGroup share price has increased a modest 7.76%. In June 2020, the PayGroup share price hit a 52-week record of 90.5 cents. Since then, the value of the company has dropped by 30.94%.

At today’s market price, PayGroup has a market capitalisation of $51.6 million.

More reading

• PayGroup (ASX:PYG) share price jumps 7% on updated guidance

Motley Fool contributor Marc Sidarous 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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A number of ASX dividend shares have quite high yields, so they could be worth looking at if investors are searching for income.

Not every business has a big yield. Some ASX shares have high valuations, which pushes down the prospective yield. Other stocks have lower dividend payout ratios and that obviously doesn’t help the yield. 

These three ASX shares have relatively high yields:

Nick Scali Limited (ASX: NCK)

Nick Scali is rated as a buy a few brokers, including Citi – it has a price target of just over $12 on the business. According to Citi’s prediction, the furniture retailer is going to pay a dividend of $0.80 per share for FY21, which translates to a grossed-up dividend yield of 11.4%.

The latest Nick Scali dividend – the FY21 interim one – was increased by 60% to $0.40 after a strong first half where sales increased 24.4% to $171.1 million and a doubling of underlying earnings per share (EPS) to 50 cents.

Consumer spending has been focused on their homes rather than things like holidays during this difficult COVID-19 period.

The ASX dividend share’s margins improved significantly as the company discounted less and ensured spending was disciplined. The underlying earnings before interest and tax (EBIT) margin improved by 1,270 basis points to 33.6%.

The sales order bank at the end of January was the highest of all time, suggesting further sales growth for the rest of FY21.

Accent Group Ltd (ASX: AX1)

Accent is a footwear retailer which sells a number of different brands through over 500 stores. It has over 100 stores under each brand of The Athlete’s Foot, Platypus and Skechers. It’s expecting to open at least 90 stores in FY21 across all banners.

Whilst the retailer only grew its total sales by 6.6% in the first six months of FY21, online sales soared 110% to $108.1 million and this represented 22.3% of total sales.

Margins improved considerably for the business, with underlying earnings before interest, tax, depreciation and amortisation (EBITDA) going up by 44% to $97.5 million. EBIT went up 47.3% to $81.8 million and net profit after tax (NPAT) grew 57.3% to $52.8 million.

It was the above numbers that gave the board the confidence to increase the interim dividend by 52.4% to 8 cents per share.

Citi rates Accent as a buy and thinks it’s going to pay a grossed-up dividend yield of 7.6%. The company continues to invest for more growth, particularly with its store rollout and online capabilities.  

Charter Hall Long WALE REIT (ASX: CLW)

This is a real estate investment trust (REIT), it’s one of the larger ones on the ASX and it has one of the longest weighted average lease expiry (WALE) statistics on the ASX at 14.1 years.

It was the strong and stable tenant base that allowed Charter Hall Long WALE REIT to increase its distribution last year, unlike most other ASX REITs.

This ASX dividend share has good tenants such as various Australian government entities, Telstra Corporation Ltd (ASX: TLS), Woolworths Group Ltd (ASX: WOW), Ingham’s Group Ltd (ASX: ING), Coles Group Ltd (ASX: COL), Westpac Banking Corp (ASX: WBC) and Wesfarmers Ltd (ASX: WES).

Charter Hall Long WALE REIT’s rental income is slowly but steadily growing thanks to rental indexation that’s either fixed or linked to CPI inflation, as well as acquisitions. It had an occupancy rate of 97.5% at 31 December 2020.

In FY21 the REIT is expecting operating EPS to grow by at least 2.8% to no less than 29.1 cents per security. With a distribution payout ratio of 100%, that represents a FY21 yield of at least 6.2%. It’s currently rated as a buy by Morgan Stanley with a price target of $5.35.

More reading

• Retail shares: buy what you know, but who owns what you buy?
• 2 quality ASX dividend shares you can buy today
• Brokers name 3 ASX shares to buy right now
• Why the Accent (ASX:AX1) share price is pushing higher today
• Is Temple & Webster (ASX:TPW) the best e-commerce ASX share to buy right now?

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET, Wesfarmers Limited, and Woolworths Limited. The Motley Fool Australia has recommended Accent Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post 3 ASX dividend shares to buy with yields above 5% appeared first on The Motley Fool Australia.

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