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The S&P/ASX 50 index is home to 50 of the largest listed companies on the Australian share market.

This means the index hosts many of the highest quality and most well-known companies that the ANZ region has to offer.

While not all of the shares on the index are necessarily in the buy zone, two that could be are listed below. Here’s what you need to know about them:

Ramsay Health Care Limited (ASX: RHC)

Ramsay Health Care is an ASX 50 share which could be worth considering. Although 2020 was a difficult year for the private hospital operator because of the pandemic, Ramsay appears to be over the worst of it now and positioned for growth over the long term.

In fact, analysts at Goldman Sachs believe Ramsay can grow its operating earnings at a compound annual growth rate of 7% between FY 2021 and FY 2024.

As a result, they believe its shares are great value at the current level. So much so, Goldman has put a conviction buy rating and $75.00 price target on the company’s shares.

Based on the current Ramsay share price of $63.15, this implies potential upside of almost 19% over the next 12 months.

It commented: “The stock is trading at 8.7x EBITDA for a 7% EBITDA CAGR (FY21-24E), towards the bottom of its 5-year range. We believe the improvement in near-term fundamentals is still not reflected in consensus forecasts or current trading multiples. We raise our 12-month TP to $75 and reiterate our Buy (on CL).”

Xero Limited (ASX: XRO)

Another ASX 50 share to consider is Xero. It is a leading cloud-based business and accounting software provider with a focus on small to medium sized businesses.

Over the last few years Xero’s platform has evolved from an accounting solution into a full service small business solution. This has supported strong growth in customer numbers and ultimately recurring revenues.

Goldman Sachs is also a fan of Xero and believes its growth still has a long way to go. This is due to the quality of its offering, the ongoing shift to cloud-based solutions, its global market opportunity, and burgeoning app ecosystem.

The broker currently has a buy rating and $157.00 price target on the company’s shares. This compares to the current Xero share price of $109.69.

Goldman commented: “…as it broadens and monetizes its app ecosystem, and expands into new geographies, we estimate this will open a further NZ$62bn in addressable TAM, providing a multi-decade runway for strong revenue growth. Combined with attractive unit economics at maturity (GSe 40% EBIT margins), we believe the long-term earnings opportunity for Xero is material.”

More reading

• 2 fantastic ASX growth shares to buy immediately
• Could Australia be the next tech hub? Afterpay (ASX:APT) CEO thinks it should be
• Here are some of the best performing ASX tech shares today
• ASX 200 rises, Afterpay sinks, Vocus jumps
• Why ASX 200 tech shares could be in for another wild session

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

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The Flight Centre Travel Group Ltd (ASX: FLT) share price has had a turbulent 12 months, along with its fellow ASX travel shares. Investors were quick to dump Flight Centre shares as the company came to grips with international and domestic travel being either suspended or restricted.

With COVID-19 vaccines being hastily rolled-out across the world, could the Flight Centre share price be poised to continue its comeback in 2021?

What’s instore for Flight Centre in 2021?

Over the past 12 months, Flight Centre has seen its revenues dive as a result of the pandemic. The business was effectively put in hibernation mode to survive the economic fallout of travel corridors being shut down.

In the time since, management has taken drastic, cost-cutting measures to improve net operating cash flow. In December, the company achieved operating cash outflows of $30 million, compared to $43 million in July 2020.

Furthermore, Flight Centre boosted its liquidity to $1.2 billion as at the end of the calendar year, primarily through issuing convertible notes.

Fast-forward to 2021, the company stated that total transaction value (TTV) is beginning to gradually recover. Revenue margin is expected to increase when low-risk international travel returns. This is forecast to occur around the second-half of 2021.

With the company arguably having sufficient liquidity to weather any unforeseen surprises, it believes positive signs are now starting to emerge. Widespread vaccination roll-outs, along with rapid rebounds in demand when restrictions ease, are projected near-term tailwinds.

Broker upgrades

After Flight Centre reported its first-half results, Macquarie raised its price target for Flight Centre shares by 31% to $20.00. Morgans followed suit, also lifting its rating by 41% to $19.21. As the current Flight Centre share price sits at $19.44, after having gained 9.2% on Thursday, you could argue it’s fairly valued for now.

But since the pandemic is still far from over, the operating environment for ASX travel companies can still change very quickly, for both better or worse.

Flight Centre share price snapshot

Almost all ASX travel shares are still trading at considerably lower levels than where they were just 12 months ago. In particular, the Flight Centre share price fell from pre-COVID levels of around the $40-mark to now trade at $19.44. That represents a discount of more than 50%.

Based on valuation grounds, Flight Centre commands a market capitalisation of close to $3.9 billion, with approximately 199 million shares outstanding.

More reading

• Should the JobKeeper payment be replaced with discounted airfares?
• ASX 200 down 0.9%: Flight Centre & Webjet jump, Afterpay sinks
• Why Flight Centre, Qantas, ResApp, & Volpara are racing higher
• Qantas (ASX:QAN) share price rises despite fears tourism will struggle after JobKeeper
• Why analysts are backing these 2 ASX travel shares

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. 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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Real estate is booming, thanks to historic-low interest rates and pent-up savings from the COVID-19 pandemic.

Just this week, Sydney joined Brisbane, Adelaide, Canberra and Hobart in recording record-high house prices, past the previous 2017 peak.

So how does an ASX share investor take advantage of this?

There are the obvious real estate investment trust (REIT) shares, which directly invest in property.

Then there are secondary winners, such as the big banks or homewares retailers.

But two experts recently independently pointed out two media companies that are worth pursuing in light of soaring property prices.

Confused? Read on:

News Corporation (ASX: NWS)

Longwave Capital Partners portfolio manager David Wanis picked out News Corporation as an ASX share that’s enticingly undervalued.

According to Longwave’s analysis, News Corp’s ownership of real estate classifieds provider REA Group Limited (ASX: REA) makes up about 85% of the current share price.

But News Corp also has a US real estate business, Move Inc, plus its traditional operations for newspapers, Dow Jones, Foxtel, publishing and net cash.

So Wanis reckons the News Corp share price should be much higher if all these components are added up.

“We’re looking at a company where a reasonable sum of the parts’ value gives you almost twice the current share price,” he told a Pinnacle Investment webinar this week.

Shares for REA Group, the operator of realestate.com.au, have had an excellent 12 months. They have gone from $87 to $136.75 at the close of trade Thursday.

In a market where many companies are trying to get their future performance to match the current share price, Wanis finds News Corp is going the other way.

“In a market where people are focused on areas trying to get to the current share price — putting in bullish assumptions to try to even achieve some of the market caps that are being applied — you have a situation where, with a bit of digging, you can find a pretty attractive situation.”

Nine Entertainment Co Holdings Ltd (ASX: NEC)

Investors Mutual assistant portfolio manager Marc Whittaker this week singled out Nine Entertainment as a potential beneficiary of the real estate boom.

He posted on Livewire that the company is already growing recurring revenue, with subscriptions for streaming service Stan and digital newspapers growing.

But similar to News Corp, it owns a substantial part of property classifieds business Domain Holdings Australia Ltd (ASX: DHG).

“Domain’s ongoing listings recovery and the expectation of carriage fee agreements with Facebook Inc (NASDAQ: FB) and Google should also provide earnings tailwinds,” said Whittaker.

Domain shares, like REA, have gone from strength to strength in the past year. They traded at $2.44 a year ago, but ended Thursday on $4.41.

While Nine’s traditional television business will do nicely during the COVID-19 recovery, Whittaker said its digital assets are where the long-term growth will come from.

“Digital earnings grew 53% year-on-year and now account for 41% of earnings, which we expect to rise to around 60% over the next three years.”

More reading

• Is Nine Entertainment (ASX:NEC) eyeing up regional broadcaster WIN?
• These 4 ASX shares just got upgraded to a ‘buy’ rating
• 5 ASX shares to buy in a market crash
• Why the Nine (ASX:NEC) share price is up 26% in 2021
• 5 things to watch on the ASX 200 on Monday

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Tony Yoo owns shares of Alphabet (A shares). The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Facebook. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Facebook, and 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 ASX sharemarket game has begun… you might be completely new to investing. Maybe you’ve been interested in it for a while and are waiting to take the plunge. Potentially your mate dragged you into it a bit of competitive fun.

Whatever the reason, the virtual investment provides a straightforward starting point to invest in publicly listed Australian companies – just not with real money. It certainly has its place, but there are a few things you likely won’t learn from it.

The ASX share market is a game of emotions

This is most likely the biggest drawback… You probably won’t experience the same emotions as you would investing with real money.

When it is not real money at stake it is easy to shrug off a 10% or 20% loss. In reality, it’s hard, sometimes really hard. Particularly when you have worked hard for those dollars and they seemingly vanish, in minutes at times, the human psyche kicks in.

The ASX sharemarket game is a no-loss, no-win environment. As such, you likely won’t learn how to handle being down on a share. Some simplify investing to “buy low, sell high”, but all too commonly emotions override. As a result, investors can find themselves buying high and selling low.

These emotions cannot be simulated, and often the best way to learn is to dip your toes into the real thing to get a feel for it.

Skin in the game

Somewhat similar to the last point, but for a different reason. Having ‘skin in the game’ means you’ve got something to lose… or gain if you’re lucky.

For that reason, it acts as a motivator to be diligent and mindful with investments. On the ASX Sharemarket Game, there’s a maximum of $2,000 up for grabs – not too shabby. However, loss is a much stronger emotion than winning – it’s called negativity bias.

Hence, having skin in the game will act as a significant motivator to research companies and learn as much as possible.

Tends to reward the YOLO’ers

Lastly, because the ASX Sharemarket Game only runs for 15 weeks the ones that do well often apply a bit of the ‘YOLO’ mentality.

15 weeks is a small window, so shares that perform really well might have received a takeover bid, struck gold, FDA approval, or many other various short-term events. However, it doesn’t give enough time to truly consider the compounding nature of great long-term investments, nor the influence of dividends. Both of which can be attributed to legendary Warren Buffett’s wealth.

In conclusion, the ASX Sharemarket Game can be a lot of fun – but I would suggest if you are starting to think more seriously about investing, trying the real thing, even with a small amount of money, will teach you a whole lot more as a beginner investor.

More reading

• Why the Qantas (ASX:QAN) share price could shoot higher in 2021
• Software and bikes: 3 ASX shares ready to explode
• 2 small cap ASX shares to watch closely in 2021
• 5 things to watch on the ASX 200 on Friday
• 2 ASX dividend shares with 5% fully franked yields

Motley Fool contributor Mitchell Lawler 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 Qantas Airways Limited (ASX: QAN) share price was a positive performer yesterday after the Government announced a $1.2 billion stimulus package to support the domestic tourism market.

The airline operator’s shares rose by a solid 2.5% to end the day at $5.30.

This latest gain means the Qantas share price is now up 35% over the last six months.

Can the Qantas share price go higher?

The good news for investors is that one leading broker still believes the Qantas share price can go a lot higher from here.

According to a note out of Goldman Sachs this morning, its analysts have reiterated their buy rating and $6.38 price target on its shares.

This price target implies potential upside of approximately 20% over the next 12 months.

What did Goldman say?

Goldman was pleased with the news and believes the stimulus on tourism and leisure routes will underpin its expectations of a tourism/leisure led recovery in the Australian domestic market.

In addition to this, the broker expects the discounted ticket sale to support Qantas’ cash inflows.

“QAN actively re-paid c.A$2bn of revenues received in advance (RRIA) during 1H21, which we expect to re-build during the recovery phase. QAN’s 1H21 revenue received in advance stood at A$3.7bn and was A$2bn lower than pre-covid levels (1H21). The proposed ticket sale will aid QAN’s cash inflows and we expect rising RRIA to benefit net debt levels and ultimately equity valuations.”

It also expects the government’s package to provide direct support to retain employees, which should mean the airline won’t have to incur additional and upfront cash redundancy costs.

Another positive is that the offer of discounted fares tends to support full-fare purchases. Goldman explained:

“We have seen that historically flash sales have generated significant peripheral demand for full-fare ticket sales. During the NZ recovery last year, AIR.NZ announced a 3-day flash sale with the offer of 180k discounted seats and subsequently sold 250k seats within a 72 hours period. We expect a similar level of demand to be generated with this highly publicised offer.”

Exposure to the COVID-19 recovery

Overall, the broker believes Qantas is a great way for investors to gain exposure to the COVID-19 recovery. Goldman concluded:

“We reiterate our Buy rating on QAN.AX with our 12-month TP of A$6.38 (based on 50% SOTP (FY22E)/50% NPV) presenting 20% potential upside. QAN represents a strong recovery investment, if the Australian COVID-19 vaccination program has the effect of reducing community transmission of the virus and limits the need for domestic border closures.

The key downside risks to our view are from: (i) increased market capacity resulting from increasing competition; (ii) moderation in underlying passenger demand; (iii) higher fuel prices; (iv) weaker A$; and (v) worse outcomes than anticipated from the cost reduction program.”

More reading

• 5 things to watch on the ASX 200 on Friday
• ASX 200 unmoved, Flight Centre soars, Afterpay keeps falling
• Should the JobKeeper payment be replaced with discounted airfares?
• ASX 200 down 0.9%: Flight Centre & Webjet jump, Afterpay sinks
• Here’s why the Webjet (ASX:WEB) share price is flying

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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A prominent ASX shares fund has revealed three stocks it has high hopes for after the recent results season.

Forager chief investment officer Steve Johnson said that Forager Australian Shares Fund (ASX: FOR)’s portfolio gained more than 4% over the February reporting period.

“In general, you’d give it a tick for reporting season,” he said in a Forager video.

“With COVID over the past 12 months, [results] were particularly closely watched, although often largely flagged by companies leading into reporting season.”

The Forager Australian Shares Fund share price has gone from $1.09 back in September to $1.40 as of Thursday’s close.

There are three ASX shares the fund currently holds that showed exciting prospects during February reporting, according to Johnson and senior analyst Alex Shevelev:

RPMGlobal Holdings Ltd (ASX: RUL)

RPM Global provides technology services to the mining industry. It’s currently Forager Australian Shares Fund’s largest position. 

The business has been around for more than 50 years, so is a lot more mature than many of its tech peers on the ASX.

Shevelev was anxious going into the RPM results announcement because there had been a pattern of enterprise suppliers experiencing delays in signing contracts.

“It seems like in the result what we saw was, yes, a slowdown,” he said.

“But some of the detail in that presentation was very helpful to work out that in fact, in the last calendar quarter of a year things were turning around and so far this quarter we’ve actually seen a lot of new contracts signed.”

Software providers that sell to businesses rather than consumers had done it tough in the past year, according to Johnson.

“Last year, every 5 million [dollars] of contract wins that they’d done they made an announcement on the stock market. We hadn’t heard anything since the full year [results]. Last year they gave an AGM update that wasn’t great,” he said.

“So we were quite nervous about this result, yet the number was quite good, at least until the end of February.”

Johnson added that he was now “pretty excited” about RPM’s future, while Shevelev said RPM has attractive revenue dynamics.

“It’s important here that what we’re adding is a really high quality recurring subscription revenue. And because it’s a very low churn, so not much of it goes away year to year, every dollar we’re adding now will build up forwards.”

Life360 Inc (ASX: 360)

The Life360 share price skyrocketed in mid-January with the news that former Facebook Inc (NASDAQ: FB) executive Randi Zuckerberg had been appointed to the board.

Although listed on the ASX, the company is American and it sells trackers to US parents for their teenage kids.

Shevelev said with COVID lockdowns hitting that country hard, the demand for such an app would have waned.

“Nonetheless, the company has been able to increase revenue year-on-year, and with the reopening of the US with higher value plans and with more people actually taking on paid plans, they’re talking about revenue growth in the order of 25-35% in this current year.”

Johnson said the guidance was “surprisingly bullish”.

“There was also some talk in their announcement about either a dual listing or a relisting to the NASDAQ in the US, which would certainly apply higher evaluations in this climate than where we’re currently seeing in the share price.”

MotorCycle Holdings Ltd (ASX: MTO)

The coronavirus pandemic has been a boon for the motorbike and accessories seller, according to Shevelev.

“It’s been a phenomenal time to be selling motorcycles because you’ve had people being able to withdraw from super, you’ve had people being able to spend on domestic activities like motorcycles rather than international travel,” he said.

“Net profit was up 250% year on year, which is a phenomenal effort. And it looks like from the guidance that… activity level has continued into the current year.”

According to Johnson, MotorCycle Holdings’ balance sheet used to be “worrying” but the February accounts showed it was “completely fixed”.

“They’ve done a lot over the past few years to improve their market share, to grow the underlying size of the business and I don’t think we’ve yet seen the full impact of that in the results,” he said.

“So people are looking back and saying, well, if it goes back to 2019 profitability, and I put that on 12 or 13 times earnings, I get today’s price. I think there are sustainable earnings here, well and truly above what they made in 2019.”

Shevelev said the necessary reforms had now been made and it was just a matter of getting products into their stores.

“That’s actually very profit accretive because you don’t have to spend the extra operating costs.

“There’s a lot of self-help work that the company has done that, in addition to cutting costs, [is] really going to come through over the next couple of years.”

More reading

• Why the MotorCycle Holdings (ASX:MTO) share price is racing higher
• Why Flight Centre, Life360, Nanosonics, & Universal Store are racing higher
• The Life360 (ASX: 360) share price rips 18% higher on strong results

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Tony Yoo owns shares of RPMGlobal Holdings. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Facebook. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of RPMGlobal Holdings. The Motley Fool Australia has recommended Facebook and RPMGlobal Holdings. 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 a fan of small cap shares, then you might want to take a look at the ones listed below.

These small caps are growing quickly and could have bright futures ahead of them. Here’s what you need to know about them:

Damstra Holdings Ltd (ASX: DTC)

The first ASX small cap share to watch is Damstra. It is a growing integrated workplace management solutions provider.

Damstra’s solutions help users track, manage, and protect their employees and contractors. This is becoming increasingly important for businesses and can potentially save significant costs relating to workplace injuries. 

While its growth has slowed a touch in FY 2021 because of the pandemic, it looks well-placed to accelerate its growth once the crisis passes. Particularly given the overall digital transformation theme happening across many industries that Damstra operates in.

For the six months ended 31 December, Damstra reported a 29.6% increase in revenue to $13.3 million and a 4% decline in EBITDA to $2.5 million. Though, it is worth noting that its earnings were impacted by the acquisition of the loss-making Vault Intelligence business during the half.

Positively, management revealed that its unaudited revenue was up 61% in January. This bodes well for the second half and its full year results.

MyDeal.com.au Limited (ASX: MYD)

Another small cap ASX share to look at is MyDeal.com.au. It is an online retail marketplace with a focus on homewares, furniture, and technology.

Thanks to the accelerating shift to online shopping, MyDeal has been growing very strongly in FY 2021. For example, the company recently released its half year results and revealed a 217% increase in gross sales to $126.7 million. Management advised that this was driven by a jump in active customers to 813,764 and increased repeat use.

The good news is that the company appears well-placed for growth in the coming years thanks to increased online spending and its investments in growth opportunities. That latter includes growing its private label business and investing in advertising to support its customer base and brand.

More reading

• ASX tech correction? 10 of the worst-hit shares
• One person earned $250,000 on Airtasker last year. Now it’s listing
• 2 buy-rated small cap ASX shares with strong growth potential
• Why the Damstra (ASX:DTC) share price is crashing 11% lower today
• Why the MyDeal (ASX:MYD) share price is tumbling lower today

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 Damstra Holdings Ltd. The Motley Fool Australia has recommended Damstra Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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On Thursday the S&P/ASX 200 Index (ASX: XJO) had a volatile day and ultimately ended it ever so slightly lower. The benchmark index fell to 6,713.9 points.

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

ASX 200 to rise

The Australian share market looks set to end the week on a positive note. According to the latest SPI futures, the ASX 200 is expected to open the day 37 points or 0.55% higher this morning. This follows a positive night of trade on Wall Street, which in late trades sees the Dow Jones up 0.9%, the S&P 500 up 1.4%, and the Nasdaq trading 2.6% higher.

ASX 200 tech shares on watch

It could be a good day for Australian tech shares such as Afterpay Ltd (ASX: APT) and Appen Ltd (ASX: APX) on Friday after US tech stocks stormed higher. As mentioned above, the tech-heavy Nasdaq index is currently up 2.6%. This is thanks to solid gains by giants such as Amazon, Apple, Facebook, and Tesla. Given how the local tech sector tends to follow the Nasdaq’s lead, this bodes well for today’s trading session.

Oil prices jump

Energy producers including Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could finish the week strongly after oil prices stormed higher overnight. According to Bloomberg, the WTI crude oil price is up 2.1% to US$65.80 a barrel and the Brent crude oil price has climbed 2.3% to US$69.47 a barrel. Oil prices were given a lift by vaccine rollouts boosting the global economic outlook and U.S. gasoline stocks falling sharply.

Gold price flat

Gold miners Newcrest Mining Ltd (ASX: NCM) and St Barbara Ltd (ASX: SBM) will be on watch after a flat night of trade for the gold price. According to CNBC, the spot gold price is flat at US$1,721.90 an ounce. This appears to have been driven by bond yield firming during overnight trade.

Qantas shares rated as a buy

The Qantas Airways Limited (ASX: QAN) share price could be going a lot higher from here according to one leading broker. A note out of Goldman Sachs this morning reveals that its analysts have reiterated their buy rating and $6.38 price target on its shares. Goldman believes the Government’s support package will underpin the domestic recovery. It also sees it as a positive for near term cash generation.

More reading

• ASX 200 unmoved, Flight Centre soars, Afterpay keeps falling
• 3 blue chip ASX shares with dividend yields over 5% today
• Will the Afterpay (ASX:APT) share price bounce back?
• Should the JobKeeper payment be replaced with discounted airfares?
• Why Afterpay, Nearmap, Temple & Webster, & Z Energy are tumbling lower

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 Appen Ltd. 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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Unfortunately for income investors, interest rates are still at ultra low levels and unlikely to improve in the near term.

But don’t worry because the Australian share market is home to countless dividend shares offering attractive yields. Two to consider are listed below, here’s what you need to know about them:

Accent Group Ltd (ASX: AX1)

The first ASX dividend share to look at is Accent. It is the leading leisure footwear retailer behind store brands such as HYPEDC, The Athlete’s Foot, and Platypus. It also owns the exclusive rights to a number of popular footwear brands in the ANZ region.

Accent has been a very strong performer in FY 2021 thanks to a favourable shift in consumer spending. This led to the company releasing its half year results last month and revealing a 6.6% increase in total sales to $541.3 million and 57.3% lift in net profit after tax to $52.8 million. The was its seventh consecutive record half year profit.

One broker that was impressed was Bell Potter. In response to its results, the broker put a buy rating and $2.65 price target on its shares. The broker is also forecasting an 11.9 cents per share dividend in FY 2021. Based on the current Accent share price, this will mean a fully franked 5% yield.

Telstra Corporation Ltd (ASX: TLS)

The second ASX dividend share to consider is Telstra. Now could be a good time to buy the telco giant’s shares after it reaffirmed its plans to maintain its dividend at 16 cents per share when it released its half year results.

But perhaps the biggest positive from the release is news that the company is aiming to return to growth in FY 2022. Thanks to the success of its T22 strategy, Telstra CEO Andy Penn has set an aspirational target for mid to high single-digit growth in underlying EBITDA in FY 2022, with further growth in FY 2023.

This appears to be a sign that the dividend cuts are finally over at long last.

Analysts at Goldman Sachs appear to believe this will be the case and are forecasting a 16 cents per share annual dividend for the foreseeable future. Based on the current Telstra share price, this will mean a 5.2% fully franked dividend yield for income investors.

The broker also sees value in Telstra’s shares at the current level. It has a buy rating and $4.00 price target on the company’s shares.

More reading

• 3 blue chip ASX shares with dividend yields over 5% today
• ASX fashion and beauty shares shine on half-year results
• Is the Accent (ASX:AX1) share price in the buy zone after today’s decline?
• Why Accent, Fortescue, Western Areas, & Zip shares are tumbling lower
• Telstra (ASX:TLS) share price and others caught in Greensill insolvency

Motley Fool contributor James Mickleboro 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 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.

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The Kogan.com Ltd (ASX: KGN) share price could be an interesting one to consider right now.

E-commerce has seen a big boom over the last 12 months and Kogan.com has certainly benefited from that.

Over the last year the Kogan share price has risen just over 230%. That’s a great return for just 12 months. But it has actually drifted quite significantly in recent weeks.

Since 25 January 2021, Kogan shares have actually fallen by 40%. You may or may not be surprised by that drop.

The FY21 half-year result included plenty of sizeable growth statistics. Gross sales grew 97.4% to $638.2 million and adjusted earnings per share (EPS) went up 211.7% to $0.35.  

Kogan.com’s board decided to increase the fully franked interim dividend by 113.3% to 16 cents.

But Kogan.com is focused on more growth over the next decade as it continues to invest in its logistics network, speed of delivery, range expansion and improved competition on the platform to drive even better experiences for customers.

Year on year, Kogan reported that its active customers grew by 76.8% to 3 million. Kogan First memberships scaled “significantly” during the first half of FY21.

3 reasons why the Kogan.com share price could be worth looking at

New Zealand expansion

Whilst New Zealand is not as big as a market as Australia, expanding there increases Kogan.com’s total addressable market.

Indeed, there may be less online competition in New Zealand than Australia because it’s a smaller market. The acquisition is called Mighty Ape, one of New Zealand’s largest online retailers with a focus on gaming, toys and other entertainment categories.

Mighty Ape was the highest ranking retailer on the 2020 Kantar customer leadership survey and it also won the most satisfied customers award for 2020 from Canstar. It had 719,000 active customers at the last public count.

Kogan.com has been integrating Mighty Ape into the business. Management said that December 2020 showed strong sales over the Christmas peak trading period with revenue of $20 million and gross profit of $5.4 million.

This acquisition also improves the Australian position through Mighty Ape’s Australian websites.

Kogan says there’s a significant opportunity to expand product offerings on both platforms and bring Kogan.com’s marketplace capability to New Zealand. Management also said that it has attractive financial metrics with expected meaningful synergies across the combined businesses.

Steadily growing profit margins

Over the past four first-half financial periods, Kogan.com has achieved growth in its gross profit margin. In the first half of FY18 the gross profit margin was 19.4% and in the first half of FY21 it had risen to 27.3%.

The contribution margin in the first half of FY18 was 11.6%, by the latest result it had gone up 15.5%.

Kogan.com’s earnings before interest, tax, depreciation and amortisation (EBITDA) margin has risen from 6.7% in HY18 to 9.4% in HY21.

These rising margins have allowed Kogan.com’s profit growth in accelerate quicker than the revenue growth (which is growing quickly). If margins keep rising then Kogan.com can keep growing profit at a faster pace.

Kogan First members

Kogan First gives members a range of consumer benefits, which helps create a large and growing community of loyal customers who access free shipping, member discounts and other benefits.

Kogan explained that:

Kogan First members purchase on average much more often than non-members, demonstrating loyalty to the platform, and also demonstrating the significant savings available through the loyalty program.

What’s the valuation for the Kogan.com share price?

Forecasts are just predictions, but it might be useful to take them into account.

According to Commsec, the Kogan.com share price is valued at 18x FY23’s estimated earnings. In FY23 it’s projected to pay a dividend of $0.49, which translates to a grossed-up dividend yield of 5.4%.

More reading

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• International Women’s Day: Which ASX companies are fighting gender inequality?

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 Kogan.com ltd. The Motley Fool Australia has recommended Kogan.com ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post 3 reasons why the Kogan.com (ASX:KGN) share price could be a great buy appeared first on The Motley Fool Australia.

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