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The Archer Materials Ltd (ASX: AXE) share price is lifting this morning, up 1% at the time of writing having earlier posted gains of more than 7%.

The ASX tech share focuses on the development of quantum computing, biotechnology, and reliable energy. We take a look at the company’s latest announcement below.

What did Archer Materials report to the market this morning?

The Archer Materials share price is gaining in morning trade after the company reported it had strengthened its graphene-based biochip technology.

The improvement in its nanofabrication capabilities was demonstrated by Archer Materials’ fabrication of “nanosize biosensor components of 100-150 nanometer features on silicon wafers”.

According to the release, translating the biochip sensor components onto silicon wafers is a vital step in commercial production volumes, opening the door for potential future retail applications of its biochip.

The biochip, or lab-on-a-chip, combines several biological laboratory functions. The initial goal for Archer’s biochip is to help detect respiratory diseases.

Before the announced improvement in its fabrication capabilities, Archer reports it was limited to 1 sensor per square centimetre. The new nanofabrication process will enable more than 1 million sensors per square centimetre.

What did management say?

Commenting on the developments, Archer’s CEO Mohammad Choucair said:

Archer has attracted talented technologists to work on a promising, potential solution to a global challenge that has significant socio-economic implications. As we ramp up our biochip development, we will strategically bridge industry capability gaps, and where possible, locally.

At Archer, our staff have a proven track record of producing intellectual property that is worth protecting internationally. As we solve for significant technological barriers in our biochip development, the company will rapidly translate this knowledge into strong IP assets that would underpin high value, long-term commercialisation.

Archer Materials share price snapshot

Archer Materials shares have been a stellar performer over the past 12 months, up 673%. That compares to a 53% gain on the All Ordinaries Index (ASX: XAO).

Year-to-date, the Archer Materials share price is up 93%.

More reading

• These are the 10 most shorted shares on the ASX
• Stock market rally: is it too late to buy and hold cheap dividend stocks?
• Syrah (ASX:SYR) share price dips lower despite positive update
• Crown (ASX:CWN) share price shoots up 18% after Blackstone takeover bid
• Why the AnteoTech (ASX:ADO) share price is surging 15% today

Motley Fool contributor Bernd Struben 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 stock market rally following the 2020 market crash has caused many shares to trade at significantly higher prices. Despite this, it is still possible to purchase cheap dividend stocks in order to obtain a generous passive income and the potential for capital growth.

Through focusing on their quality and future prospects, an investor can realistically build an attractive portfolio of income shares. On a relative basis, it could deliver high returns in a low interest rate environment.

Cheap dividend stocks may still be available

While the recent stock market rally has pushed many share valuations to higher levels, some sectors remain modestly valued in comparison. Within them, it may be possible to buy cheap dividend stocks, since bullish investors may have turned their attention to other industries that apparently offer higher growth rates at the present time.

For example, a number of strong businesses in the retail and consumer goods sectors appear to have bright long-term outlooks.

Moreover, they seem to have the financial means to overcome future risks from a challenging economic outlook to produce a rising dividend payout for investors. Due to weak investor sentiment at the present time, they could offer the potential to generate impressive total returns in the coming years.

Focusing on the quality of income shares

Of course, not every cheap dividend stock could be worth buying at the present time. The world economy has experienced one of its biggest ever shocks in recent months.

As such, high dividends from previous years may fail to be paid in future. Similarly, some companies may struggle to survive difficult operating conditions should they have large debts or weak cash flow.

Therefore, it is important to check the quality of any stock before buying it. This can mean taking steps such as reading its latest investor updates, assessing its strategy, and analysing recent annual reports.

Doing so allows an investor to build a picture of the company in question so they avoid potentially unattractive investments. Moreover, they may be able to find the strongest businesses that trade at the lowest prices. They could prove to be the most appealing cheap dividend stocks to buy at the present time.

Considering the relative appeal of dividend shares

While cheap dividend stocks may be less prevalent than they were several months ago due to the stock market rally, their relative appeal appears to be high. The world is currently operating in a low interest rate environment that could persist for a number of months or even years.

Therefore, relying on other income-producing assets to generate a passive income may prove to be a disappointing move. By contrast, the return potential from dividend shares that trade at low prices could be highly attractive from a long-term standpoint.

More reading

• Up 673% in 1 year, why the Archer Materials (ASX:AXE) share price is lifting again today
• These are the 10 most shorted shares on the ASX
• Syrah (ASX:SYR) share price dips lower despite positive update
• Crown (ASX:CWN) share price shoots up 18% after Blackstone takeover bid
• Why the AnteoTech (ASX:ADO) share price is surging 15% today

Motley Fool contributor Peter Stephens 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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At the start of each week I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Tassal Group Limited (ASX: TGR) has seen its short interest rise to 12.9%. A sharp decline in salmon prices over the last 12 months and concerns over the Australia-China trade war have been weighing on sentiment.
• Webjet Limited (ASX: WEB) has seen its short interest reduce to 10.8%. Short sellers may have been closing positions following the government’s announcement of a stimulus package for the tourism industry. In addition, last week Webjet spoke very positively about its longer term outlook at an event.
• Inghams Group Ltd (ASX: ING) has 8% of its shares held short, which is unchanged week on week. Short sellers have been going after the poultry company due to concerns over costs, an unfavourable sales mix, and a potential oversupply of chicken.
• Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest rise slightly to 7.7%. While the travel agent was recently given a boost by a $1.2 billion government stimulus package for the tourism sector, short sellers aren’t giving up on it. They appear to believe it is overvalued after a strong share price recovery.
• Bravura Solutions Ltd (ASX: BVS) has experienced another increase in its short interest to 7.7%. Short sellers appear to be targeting the financial technology company due to the significant Brexit and COVID headwinds impacting its business.
• Resolute Mining Limited (ASX: RSG) has seen its short interest reduce week on week to 7.5%. Industrial disruption at its Syama operation has been weighing heavily on sentiment. Particularly given its guidance for another decline in production in FY 2021.
• Metcash Limited (ASX: MTS) has seen its short interest fall to 6.9%. Last week this wholesale distributor released its growth strategy to the market and received a somewhat mixed response due to its higher capex plans.
• Myer Holdings Ltd (ASX: MYR) has short interest of 6.7%, which is down week on week. Short sellers continue to target the department store operator due to the belief that it is in a structural decline.
• Freedom Foods Group Ltd (ASX: FNP) is back in the top ten with 6.7% of its shares held short. Short sellers will have been celebrating this morning after the Freedom Foods share price crashed 94% lower after returning from its nine-month suspension.
• InvoCare Limited (ASX: IVC) has 6.7% of its shares held short. Concerns over market share losses and allegations of anti-competitive conduct in the funeral sector appear to be weighing on sentiment.

More reading

• Freedom Foods (ASX:FNP) share price crashes 94% after 9-month suspension
• Top brokers name 3 ASX shares to buy next week
• Top brokers name 3 ASX shares to sell next week
• End of oil price rally fires warning shot for the ASX COVID recovery trade
• 11 top ASX shares that WAM thinks will make great buys

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 Bravura Solutions Ltd. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended Bravura Solutions Ltd, Flight Centre Travel Group Limited, Freedom Foods Group Limited, and InvoCare 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 Syrah Resources Ltd (ASX: SYR) share price is edging lower this morning. This comes despite the company providing a positive update regarding its production of graphite.

At the time of writing, the graphite producer’s shares are swapping hands for $1.145, down 1.29%.

What did Syrah announce?

Investors are selling off their positions in the Syrah share price regardless of the company’s release to the ASX market.

In its announcement, Syrah advised that it has installed a furnace at its Active Anode Material Project in Vidalia, the United States. This will allow the company to produce active anode material (AAM) using natural graphite extracted from its Balama Graphite Operation.

Syrah stated that the milestone achievement puts it closer to becoming a vertically integrated producer of natural graphite AAM. The newly-installed furnace is seen as the final process in which natural graphite is converted for use in lithium-ion batteries.

In Q4 2020, Syrah toll treated purified spherical graphite (anode precursor) to AAM for fast-tracking product qualification. The furnace, whist producing AAM, will be used for product testing with potential customers.

Management commentary

Syrah managing director and CEO Shaun Verner commented:

In our view, this milestone further positions Syrah as the most progressed ex-China option for vertically integrated supply of natural graphite AAM for USA and European battery makers and OEMs.

We have been very encouraged by initial feedback from in-progress product testing and qualification processes. Syrah remains on track to become an important supplier of natural graphite AAM to ex-Asia markets.

In addition, the company noted that it’s on track to expand its current production capacity at Vidalia. A final investment decision for the construction of a 10ktpa AAM facility is planned for the second half of 2021.

About the Syrah share price

The Syrah share price has performed well over the past 12 months, gaining more than 400%. Year-to-date, the company’s shares have risen above 20%.

Syrah has a market capitalisation of around $577 million, with close to 500 million shares outstanding.

More reading

• Why Clover, PointsBet, Syrah, & Temple & Webster shares are racing higher
• Here’s why the Syrah (ASX:SYR) share price is pushing 5% higher today
• ASX lithium shares to get price shock as commodities supercycle charges up
• Leading brokers name 3 ASX shares to sell today

Motley Fool contributor Aaron Teboneras 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 Crown Resorts Ltd (ASX: CWN) share price is ascendant today after a bid by Blackstone to buy the company. At the time of writing, shares in the company are trading at $11.61 – up an incredible 17.75%. By comparison, the S&P/ASX 200 Index (ASX: XJO) is up just 0.31%.

After a few months to forget for Crown, which began when the New South Wales Independent Liquor and Gaming Authority (ILGA) found the company unsuitable to hold a gaming license in the state, swiftly followed by a slew of resignations, including the CEO and several directors, and a royal commission to the granting of the license in Victoria – the news of a Blackstone takeover bid is very welcome for investors in the hospitality giant.

Blackstone wants to claim the Crown

In a statement to the ASX, Crown announced private equity group, Blackstone Group Inc, sent an unsolicited bid to the board to buy all the shares in the company.

Blackstone is offering $11.85 per share, which represents a 19% premium to the volume-weighted average price of Crown shares since the release of its H1 FY21 results.

The proposal is still in its early stages. Several more steps must be taken before any deal is finalised, including:

• Due diligence.
• Arranging debt finance.
• A unanimous agreement by the board to recommend accepting the deal.
• Blackstone being found suitable to hold the Crown gaming license in Sydney, Melbourne, and Perth.
• Approval from the Blackstone investment committee.

Blackstone already owns approximately 10% of shares in Crown Resorts.

Crown has appointed UBS as financial advisors and Allens as legal advisors in the matter. The board did not indicate its position on the bid.

Why Crown might want to sell to Blackstone

The ILGA report found Crown was culpable of “facilitating money laundering, exposing staff to the risk of detention in a foreign jurisdiction and pursuing commercial relationships with individuals with connections to triads and organised crime groups…”

CEO Ken Barton, director Andrew Demetriou, and board member John Poynton all resigned in the wake of the devastating findings. According to the Sydney Morning Herald, Mr Poynton was the last of the James Packer aligned members of the board to resign. The ILGA report heavily impacted Mr Packer.

The decision in NSW also prompted the Victorian and WA Governments to review whether Crown should have been granted a gaming license in their jurisdictions at all.

Crown share price snapshot

Despite all its recent troubles, the Crown share price is still almost 80% higher than this time last year. Of course, late March last year represents the very worst of the coronavirus-induced market selloff. The virus, and associated government restrictions, heavily impacted Crown’s operations, along with those of most other ASX-listed companies.

The Blackstone offer to buy Crown shares at $11.85 would represent the highest price Crown shares have been at since 14 February 2020. Back then, the share price was $11.90 and it was pre-pandemic.

More reading

• Crown (ASX:CWN) share price on watch after receiving takeover approach
• 5 things to watch on the ASX 200 on Monday
• Why ASX 200 hospitality shares could be about to enjoy a boost
• Crown (ASX:CWN) share price facing double Royal Commission trouble
• Exploring the golden window of opportunity for ASX ESG investors

Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Crown Resorts 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 AnteoTech Ltd (ASX: ADO) share price has rocketed more than 15% higher this morning.

Shares in the Aussie biotech are on the charge after an update on its rapid COVID-19 test.

Why is the AnteoTech share price surging?

The strong upswing comes after a positive update on AnteoTech’s rapid COVID-19 test. The Brisbane-based biotech reported the outcome of the COVID-19 Antigen Rapid Test (ART), conducted and reviewed by the Victorian Infectious Diseases Reference Laboratory (VIDRL). The VIDRL forms part of the highly respected Peter Doherty Institute for Infection and Immunity.

AnteoTech is seeking to develop an innovative point of care rapid COVID-19 test. The AnteoTech share price previously surged in February after a major customer, Ellume, secured a US$231.8 million contract with the US Department of Defense.

The VIDRL study included validation of the analytical analysis and clinical study to assess the test’s accuracy and performance. Overall COVID-19 ART sensitivity was recorded at 97.3%, with 179 of 184 positive samples identified.

Specificity came in at 99.6%, with 259 of 260 negative samples identified. The study also did not find any cross-reactivity across other common coronaviruses such as MERS, Flu A, and Flu B. Today’s announcement reported that the test is “very specific” based on this lack of false positives.

The AnteoTech share price has surged higher on the study update news this morning. AnteoTech CEO Derek Thomson was upbeat in today’s market announcement.

We are delighted to have achieved this significant milestone in the development of AnteoTech’s first COVID-19 ART. The study enables us to be compliant with WHO guidelines for market use of our COVID-19 ART.

As at Friday’s close, AnteoTech boasted a market capitalisation of $421.6 million. The AnteoTech share price has jumped to $0.26 per share at the time of writing, up 18% from Friday’s $0.22 closing price.

Foolish takeaway

The AnteoTech share price has surged higher this morning on its latest rapid COVID-19 test update. This follows February’s share price surge on the back of Ellume’s major contract with the US Department of Defense.

The Aussie biotech share’s addition to the All Ordinaries Index (ASX: XAO) also comes into effect today.

More reading

• ASX 200 Weekly Wrap: Inflation fears hold ASX down
• ASX stock of the day: Why ResApp Heath (ASX:RAP) shares are soaring
• What’s happening with the Tesserent (ASX:TNT) share price today?
• ASX 200 Weekly Wrap: Calm restored to the ASX 200
• ASX 200 Weekly Wrap: ASX finishes higher, despite tech selloff

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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 Singular Health Group Ltd (ASX: SHG) share price has returned from its trading halt and is sinking lower on Monday.

At the time of writing, the medical technology company’s shares are down 13.5% to 60 cents.

Why was the Singular Health share price in a trading halt?

Last Monday the Singular Health share price was placed into a trading halt and subsequent suspension pending the release of an acquisition and investment announcement.

That announcement has now been made and reveals that Singular Health has entered into binding agreements to further enhance its capabilities in surgical planning, 3D visualisation, and the vertical integration of medical computer aided design and additive manufacturing.

According to the release, the company intends to acquire Virtual Surgical Planning software and integrate it into its existing MedVR software.

In addition to this, Singular Health plans to invest $300,000 for 25% equity stake in Australian Additive Engineering (AAE). AAE will then lease polymer and titanium 3D printers for capital efficient manufacturing of craniofacial surgical guides and personalised fixment plates.

Management believes the transactions will strengthen Singular Health’s mission to develop technologies to provide patients and practitioners with access to personalised, enhanced medical data. They also expect them to form part of a long-term vision by all parties to deliver a personalised end-to-end surgical planning platform in the maxillofacial sector from scan through to surgery.

Purchase order

In other news, the company has revealed that leading medical computer aided design company, Lyka Smith, has agreed to purchase 50 licenses of integrated software for maxillofacial planning at $300 per month per license.

Lyka Smith’s Managing Director, Benjamin Baxter, said: “Lyka Smith is looking forward to working with Singular Health and the opportunities provided by integrating VSP into MedVR/3Dicom. We have demonstrated MedVR to a number of clients and the interest received led to our commitment to purchase 50 licenses.”

Singular Health’s Chief Executive Officer, Thomas Hanly, added: “It has been a considerable amount of effort by all parties and we at Singular Health are excited to be working with Lyka Smith to integrate the Virtual Surgical Planning software into MedVR and optimise their existing processes for maxillofacial surgery preparation.”

“The commitment by Lyka Smith to purchase 50 MedVR licences (following integration with the VSP software) for their clients, reinforces Singular Health’s position as a leader in the development of world leading medical visualisation and planning software.”

Mr Hanly also spoke positively about the future and working with AAE and its executive Hugh Tevelein.

“Furthermore, we are very pleased to invest in and work with Hugh and his team, with his extensive experience in metallic 3D printing and presents us with the opportunity to accelerate our commercialisation strategy in the healthcare 3D printing industry that, according to Frost and Sullivan, is estimated at US$1.63 billion and is forecast to grow to US$3.78 billion by 2025 at a CAGR of 20.4% between 2015 and 2025,” he concluded.

However, judging by the Singular Health share price performance today, some investors aren’t as sure about these transactions as management is.

More reading

• Why is the Singular Health (ASX:SHG) share price frozen?
• The Singular Health (ASX:SHG) share price launched 27% higher today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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 Telstra Corporation Ltd (ASX: TLS) share price is edging higher in morning trade, up 0.5%.

Below we take a look at the S&P/ASX 200 Index (ASX: XJO) listed telco’s update on the proposed legal restructure of its infrastructure assets.

What did Telstra report on its infrastructure restructuring plans?

The Telstra share price is edging up after the company reporting it expects its proposed legal restructure to be completed by this December.

As part of that plan, InfraCo Fixed would own and operate Australia’s biggest telco’s ducts, fibre, data centres, and exchanges. InfraCo Towers would own and operate Telstra’s passive or physical mobile tower assets. And ServeCo would own the radio access network and spectrum assets.

The telco said it plans to establish its international business “under a separate subsidiary within the Telstra Group to keep that part of the business, including subsea cables, together as one entity”. The international assets will be transferred to the new subsidiary over time, subject to relevant approvals and engagement with appropriate stakeholders.

Telstra reported it will move to establish a new holding company and create separate subsidiaries – InfraCo Fixed, InfraCo Towers, ServeCo and Telstra International – and “transfer the relevant assets into InfraCo Towers and ServeCo”. The company plans to seek shareholder approval of its proposed schemes in October at this year’s annual general meeting (AGM).

When the restructure is completed, Telstra shareholders will own shares in the new holding company on a like for like basis.

Commenting to the restructure, Telstra Chairman John Mullen said:

Even before the COVID pandemic reminded us of the enormous importance of telecommunications infrastructure globally, we could see the opportunity to provide transparency of our assets and opportunities to deliver additional value for shareholders.

The legal restructure is a step toward that outcome. It also reflects the new post-COVID world we are living in and the fact that our assets are a critical part of the infrastructure that is enabling the nation’s rapidly growing digital economy.

Mullen added that aside to shareholder and court approval, “there a number of other steps to work through, including taxation, stamp duty rulings and discussions with government, regulators and other key stakeholders”.

Telstra share price snapshot

Telstra shares have struggled to hold onto their post pandemic selloff gains, and are currently up only 3.9% over the past 12 months. By comparison the ASX 200 has gained 47.6% over that same time. (Remember, this time last year marked the ASX 200 lows.)

Year to date, the Telstra share price has shown renewed strength, currently up 6.6% in 2021. Telstra pays an annual dividend yield of 3.1%, fully franked.

More reading

• ASX 200 Weekly Wrap: Inflation fears hold ASX down
• 2 high yield ASX dividend shares to buy
• Why the Telstra (ASX:TLS) share price has had a top week
• Spacetalk (ASX:SPA) share price surges 77% on Telstra deal
• ASX weakness could be met with $19bn “dividend bonanza”

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra 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) is the latest player wanting a piece of the buy now, pay later (BNPL) pie.

As BNPL becomes an increasingly crowded space, will this pose a threat to the Afterpay Ltd (ASX: APT) share price? 

CBA’s new BNPL product 

CBA’s BNPL product allows its customers to create a digital Mastercard via the CommBank app, which is accepted anywhere that accepts Mastercard. Customers can use the card for everyday spend for transactions less than $100 and pay in four fortnightly instalments for transactions higher than $100.

The bank aims to roll out its new product in the second half of the year, making it available up to 4 million of its customers. As for merchants, a report in the Australian Financial Review (AFR) has indicated that CBA will charge 1.4% compared to Afterpay’s average 3.8%. 

Goldman thinks Afterpay will continue to be the BNPL king 

Goldman Sachs took a deep dive into the critical success factors for BNPL service providers on 17 March. In this report, the broker maintained a neutral stance on the Afterpay share price with a $127.70 target price. 

Mounting competition may be a concern for many investors, but Goldman believes that there “is enough potential growth for several scaled players”. 

In the case of BNPL in Australia, the broker highlights the critical early mover advantage for Afterpay. Afterpay has already amassed 47% of the BNPL customer base, but more importantly, it “facilitates 66% of the industry’s GMV and makes 76% of the industry’s Net Transaction Profits”. 

Goldman thinks that while the new CBA product might offer a lower transaction cost to merchants, Afterpay “has likely aggregated a user base that is possibly different to the user base that CBA may appeal to”.

The broker also notes that recent launches of Klarna and the National Australia Bank Ltd (ASX: NAB) no-interest card have yet to impact Afterpay’s growth performance. 

Looking over at the US market, Goldman notes that the December 2020 quarter suggests a current market penetration of 3-8% for BNPL transactions.

The broker estimates a potential A$160 billion to A$410 billion gross merchandise value (GMV) opportunity should market penetration increase to 10-25% in relevant retail categories. To add some perspective, Afterpay’s first-half FY21 North American GMV was A$4.25 billion. 

Could history repeat itself?

There has been a steady stream of big players entering the BNPL for the past few years. The Afterpay share price has always been able to shrug off the short-term negative sentiment associated with increasing competition.

In 2016, MasterCard announced its own MasterCard instalment product, which it described as an innovative way to pay, which offers consumers flexible and convenient access to funds when needed. 

In 2019, JPMorgan began offering a point-of-sale (POS) finance feature in its Chase mobile app, while MasterCard acquired Vyze, a consumer financing solutions business, to pursue the same market. 

In late 2020, CBA and NAB both launched a no-interest credit card to combat BNPL.

CommBank Neo and NAB’s StraightUp card would provide customers with up to $3,000 of credit with no interest payments, no late payments and no foreign currency fees but with a fixed, monthly fee. 

In light of increasing competition, Afterpay delivered more explosive growth in its 1H21 results. These results highlight a 106% increase in underlying sales to $9.8 billion, while revenue increased 108% to $374.2 million.

Surging sales and revenue translated to a significant 521% increase in earnings before interest, tax, depreciation and amortisation (EBITDA) to $47.9 million. 

More recently, Afterpay continues to take leadership in the BNPL sector after launching in France, Spain and Italy. 

More reading

• Why the Commonwealth Bank (ASX: CBA) share price is on watch today
• ASX 200 Weekly Wrap: Inflation fears hold ASX down
• Is the NAB (ASX:NAB) share price a buy for dividends?
• 5 things to watch on the ASX 200 on Monday
• 3 five-star ASX shares to buy in March

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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

Arguably two of the greatest dividend stocks are from tech giants Microsoft Corporation (NASDAQ: MSFT) and Apple Inc (NASDAQ: AAPL). Though they currently have low dividend yields, with Microsoft’s at 1% and Apple’s at 0.7%, investors looking for income shouldn’t overlook these income-producing investments. Not only do both companies regularly increase their dividends, but their payouts are likely to grow substantially in the coming years.

But which of these two dividend payers is the better investment?

Let’s take a look.

Microsoft

The coronavirus pandemic negatively affected many businesses, with some popular dividend-paying companies even reducing or suspending their quarterly dividends. Microsoft, however, didn’t skip a beat.

The tech giant announced a 10% increase to its quarterly dividend last September, increasing the payout to $0.56 every quarter — or $2.24 annually. It was the company’s 16th consecutive annual dividend increase.

Of course, it wasn’t surprising to see Microsoft keep up its long history of annual dividend increases. The company easily affords its dividends. Of its $45 billion of fiscal 2020 free cash flow (cash flow left over after both regular operating expenses and capital expenditures are accounted for), for instance, only $15 billion went to dividends. Similarly, the company’s payout ratio, or the percent of net income it pays out in dividends, was just 34% in fiscal 2020.

With a low payout ratio and an average annual dividend increase growth rate of 9% over the past three years, investors should expect more strong growth from Microsoft’s dividend in the years ahead.

Apple

Apple may have a lower dividend yield than Microsoft, but its payout ratio of just 22% is meaningfully more conservative. In other words, Apple’s dividend has a lot more room to grow in the coming years.

Furthermore, the company’s robust free cash flow of $73 billion in fiscal 2020 is significantly greater than Microsoft’s — and the gap between Apple’s free cash flow and Microsoft’s has widened over the trailing-12-month period. During this timeframe, Apple’s free cash flow was $80.2 billion, compared to Microsoft’s $50.4 billion.

Of course, Apple commands a higher value than Microsoft. The company’s market capitalisation is $2 trillion compared to Microsoft’s $1.7 trillion. But based on this financial analysis, Apple looks like its worth this greater market cap. It’s arguably the more promising and resilient dividend stock. However, its win may only by a narrow margin, if not even debatable. Both tech stocks look like worthy considerations for investors looking to buy stocks poised to produce meaningful income over the long haul.

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

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Daniel Sparks has no position in any of the stocks mentioned. His clients may own shares of the companies mentioned. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Apple and Microsoft and recommends the following options: short March 2023 $130 calls on Apple and long March 2023 $120 calls on Apple. The Motley Fool Australia has recommended Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Battle of dividend stocks: Microsoft vs. Apple appeared first on The Motley Fool Australia.

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

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