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While bond yields have been rising recently, it remains unlikely that interest rates will rise enough in the near term to make life easier for income investors.

In fact, according to the latest Westpac Banking Corp (ASX: WBC) weekly economic report, the banking giant’s economics team expects the cash rate to remain at 0.1% until at least the end of 2022.

Westpac has also ruled out rate hikes in the United States in the near term after an eventful week.

It commented: “While we continue to believe that growth in the US will run at almost three times potential through much of this year and still be above potential during 2022, we do not see a taper of asset purchases until the second half of next year, and federal funds rate hikes for a long while after that given the severe excess capacity that needs to be put to work.”

This is also expected to support the Australian dollar versus the US dollar, sending it above 80 U.S. cents by September and keeping it there until at least the start of 2023.

It explained: “Along with the sentiment boost that the global recovery will bring, US policy developments are expected to see the Australian dollar uptrend of the past year remain in place into 2022.”

In light of this, dividend shares look set to remains the best financial assets to generate a passive income with.

But which ASX dividend share should you buy?

One ASX dividend share which has been tipped as a buy is Westpac rival Australia and New Zealand Banking GrpLtd (ASX: ANZ). 

According to a recent note out of Morgans, its analysts currently have an add rating and $31.00 price target on the bank’s shares.

In addition to this, the broker is forecasting a $1.45 per share fully franked dividend in FY 2021.

Based on the current ANZ share price of $28.84, this means it offers income investors a fully franked 5% dividend yield.

This is vastly superior to anything you’ll receive from ANZ or Westpac’s term deposits or savings accounts.

More reading

• These were the best performing ASX 200 shares last week
• This was the week that ASX dividend shares proved their worth
• Brokers name 3 ASX shares to buy right now
• Can the ANZ (ASX:ANZ) share price go even higher?
• ANZ (ASX:ANZ) share price outperforms on broker “buy” upgrade

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.

The post Beat low interest rates with this outstanding ASX dividend share appeared first on The Motley Fool Australia.

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There are a few exchange-traded funds (ETFs) that are dropping through this tech-led share market sell-off.

Legendary investor Warren Buffett has a great quote about burgers, prices and shares. Gurufocus quoted my Buffett:

A short quiz: If you plan to eat hamburgers throughout your life and are not a cattle producer, should you wish for higher or lower prices for beef? Likewise, if you are going to buy a car from time to time but are not an auto manufacturer, should you prefer higher or lower car prices? These questions, of course, answer themselves.

But now for the final exam: If you expect to be a net saver during the next five years, should you hope for a higher or lower stock market during that period? Many investors get this one wrong. Even though they are going to be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall. In effect, they rejoice because prices have risen for the “hamburgers” they will soon be buying.

With that in mind, these two ETFs are quite a bit lower than a month ago.   

iShares S&P 500 ETF (ASX: IVV)

Warren Buffett himself is a big fan of S&P 500 funds because of the good long-term returns, diversification and the low management costs.

This one on the ASX is offered by Blackrock for an annual management fee cost of just 0.04% per annum.

Over the last month the iShares S&P 500 ETF has dropped by 4%.

The S&P 500 gives investors exposure to the FAANG shares of Facebook, Apple, Amazon, Netflix and Google (now called Alphabet).

There are also plenty of non-tech shares in the S&P 500 – there’s 500 names of course – but the biggest holdings include non-tech companies like Berkshire Hathaway, JPMorgan Chase, Johnson & Johnson, Walt Disney, United Health, Procter & Gamble, Bank of America, Home Depot and Exxon Mobil.

As you’re probably aware, the S&P 500 has performed strongly in recent years because of the strength of the American share market, particularly the tech sector. Over the last five years, the iShares S&P 500 ETF has delivered net returns of 14.70% per annum.

Betashares Asia Technology Tigers ETF (ASX: ASIA)

This ETF is about giving investors exposure to the 50 biggest technology businesses in Asia, outside of Japan.

Since 15 February 2021, the Betashares Asia Technology Tigers ETF has dropped around 14%.

It is full of Asia’s tech powerhouses including Samsung, Taiwan Semiconductor Manufacturing, Tencent, Meituan, Alibaba, JD.com, Pinduoduo, Infosys, Netease and Sea.

More than half of the portfolio is invested in businesses in China, but there are sizeable positions from countries like Taiwan, South Korea and India.

It has an annual management fee of 0.67% and the net returns have been stronger than the ASX in recent years. Over the last year the ETF’s net return has been 69.6% and its net return has been an average of 36.5% per annum since inception in September 2018.

BetaShares explains why this ETF is a very attractive growth opportunity with the following:

Due to its younger, tech-savvy population, Asia is surpassing the West in terms of technological adoption and the sector is anticipated to remain a growth sector.

More reading

• 2 high quality ASX ETFs to buy this month
• This investment is one of Warren Buffett’s favourite share ideas
• 2 top ETFs to buy in March
• 2 tech ETFs for ASX investors to buy after the market selloff
• 2 of the best ETFs for ASX investors to buy today

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. The Motley Fool Australia has recommended iShares Trust – iShares Core S&P 500 ETF. 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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Last week saw a number of broker notes hitting the wires once again. Three buy ratings that caught my eye are summarised below.

Here’s why brokers think investors ought to buy them next week:

A2 Milk Company Ltd (ASX: A2M)

According to a note out of UBS, its analysts have retained their buy rating and lifted their price target on this infant formula company’s shares to NZ$16.00 (A$14.88). The broker expects the company’s daigou sales to recover over the next couple of years. This is expected to be supported by market share gains in the lucrative China market. The a2 Milk share price ended the week at $9.31.

ARB Corporation Limited (ASX: ARB)

Analysts at Citi have retained their buy rating and lifted the price target on this 4×4 accessories company’s shares to $45.15. According to the note, the broker sees positives from its acquisition of the UK-based Auto Styling Truckman Group for $40 million. Citi notes that the deal gives ARB access to a European market which currently only contributes a very small portion of its overall revenue. The broker has upgraded its earnings estimates to reflect the acquisition and lifted its price target accordingly. The ARB share price was fetching $33.23 at the end of play on Friday.

Northern Star Resources Ltd (ASX: NST)

Another note out of Citi reveals that its analysts have retained their buy rating but trimmed the price target on this gold miner’s shares to $13.50. The broker believes that the gold price has now peaked and has downgraded its forecasts for the precious metal accordingly. And while it suspects that gold miners will be out of favour with investors, it still sees value in Northern Star’s shares. This is thanks to its strong cash flow generation and upcoming developments. The Northern Star share price was trading at $9.56 at Friday’s close.

More reading

• 5 things to watch on the ASX 200 on Friday
• ASX 200 sinks, Xero reveals acquisition, ARB driven higher
• The ARB (ASX:ARB) share price moving up on $40 million acquisition
• 3 ASX 200 shares that doubled profits this reporting season 
• Synlait (ASX:SM1) share price crashes 7% on cancelled guidance

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended A2 Milk. The Motley Fool Australia has recommended ARB 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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Many investors may naturally be drawn to the highest yielding dividend shares when seeking to make a passive income. After all, they offer the greatest potential income return on a relative basis.

However, it could be prudent to check their dividend affordability before buying them. While this does not guarantee that they will be able to make future dividend payouts, it can be a means of ruling out stocks that are clearly not able to afford their shareholder payouts.

Similarly, assessing the growth potential of a company’s dividend can be a sound move. It may allow an investor to obtain a growing passive income in the long run.

Assessing affordability when buying dividend shares

The affordability of shareholder payouts can be assessed in a couple of different ways. For example, dividend shares can be analysed in this regard by comparing their net profits with shareholder payouts. A company that has a large amount of headroom when making dividend payments may be less likely to run into trouble when trying to pay them in future.

Meanwhile, an assessment of a company’s wider financial situation can provide an insight into the affordability of its dividends. For example, considering its debt levels and interest cover, in terms of how many times it could service debt out of operating profit, may build a picture of its financial strength. Similarly, companies that have a long and reliable track record of dividend payouts may be less likely to cut them in future.

All of these factors, when combined, can provide an insight into the reliability of dividend shares. It may lead an investor to avoid the highest yielding stocks in favour of more reliable opportunities that have lower yields.

Dividend growth opportunities

As well as a high and reliable yield, buying dividend shares that can grow shareholder payouts at a fast pace could be a shrewd move. They may be able to deliver a rising passive income over the long run that has a more positive impact on an investor’s financial situation compared to a high initial yield that fails to grow at a fast pace over the coming years.

Assessing the prospect of dividend growth is very subjective. It is closely tied to the financial performance of a business, in terms of how quickly its profitability can grow. Therefore, analysing its strategy, forecasts and competitive advantage could act as a guide, rather than a definitive answer, to the question of its dividend growth potential.

Despite the subjective nature of assessing the growth potential of dividend shares, the process can help an investor to avoid potentially unattractive stocks. Although this does not mean a complete avoidance of companies that may struggle to raise dividends in the coming years, it could improve an investor’s risk/reward ratio so that they are more likely to enjoy a high and growing passive income in the long run.

More reading

• Top brokers name 3 ASX shares to buy next week
• These small cap ASX shares could be ones to watch in 2021
• Is it time to buy these 2 ASX travel shares?
• Top brokers name 3 ASX shares to sell next week
• 2 ASX dividend shares with attractive yields to buy this week

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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Would you like to add some small cap shares to your portfolio this month? If you would, then you may want to get better acquainted with the ones listed below.

Here’s why these small cap ASX shares could be the ones to watch:

Alcidion Group Ltd (ASX: ALC)

The first small cap to watch is Alcidion. It is an informatics solutions company that provides software that has been designed to improve the efficacy and cost of delivering services to patients and reduce hospital-acquired complications.

Last month Alcidion released its half year results and reported a 36% increase in revenue to $11.1 million. In addition to this, it revealed that a further $23 million of sold revenue will be recognised over the next five years from FY 2022 to FY 2026.

Since then, the company has announced another potentially important contract with New Zealand’s Te Manawa Taki region District Health Boards for a pilot implementation of Better’s OPENeP Electronic Medication Management solution.

All in all, Alcidion looks well-placed to benefit from the digitisation of the healthcare sector over the next decade.

CleanSpace Holdings Limited (ASX: CSX)

Another small cap ASX share to watch is CleanSpace. It is a designer, manufacturer, and seller of workplace respiratory protection equipment (RPE) for healthcare and industrial end markets.

CleanSpace listed on the Australian share market late last year, raising $20 million to support its growth plans. This includes building on the adoption of CleanSpace products in the healthcare and industrial markets, product development, expanding awareness, and entering new international markets.

It recently released a very strong first half result. It revealed revenue of $39.7 million and EBITDA of $20.1 million. This was up from revenue of $7.3 million and an operating loss of $1.9 million a year earlier. It was also 25% and 72.6% higher, respectively, than management’s forecast. Positively, this is still well short of its addressable market of US$6.3 billion.

More reading

• Why the Alcidion (ASX:ALC) share price is jumping 8% to a record high today
• Alcidion (ASX:ALC) share price hits 52-week high on record sales
• Why the CleanSpace (ASX:CSX) share price is tumbling 8% 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 Alcidion Group Ltd. The Motley Fool Australia has recommended Alcidion Group Ltd and CleanSpace Holdings Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The ASX travel share industry has been through a very difficult 12 months. Could it be time to look at some of the travel stocks?

COVID-19 is still making it a very difficult industry for many of them to make a profit, or even generate much revenue.

Reporting season has now finished and investors can pick through the pieces of the sector.

Qantas Airways Limited (ASX: QAN)

The airline is keen for domestic borders and flights to get back to normal as soon as possible. It’s still at less than 10% activity of its international flying, although the freight division is seeing a very strong level of demand at the moment.

Qantas said that the domestic airlines are generating positive underlying cash flow. It made underlying operating cashflow of $1.05 billion for the period.

Management are working on lowering costs. In the half-year result it said that the interim target of $600 million in permanent savings for FY21 is on track. It’s looking to save at least $1 billion in permanent annual savings from FY23 onwards. At least 8,500 people will be leaving, with 5,000 having already gone, with the rest leaving by the end of FY21.

Right now a total of 14,500 full time equivalent roles are now stood up while around 11,000 full time equivalent roles remain stood down, most of which are associated with international flying.

The ASX travel share said its recovery has been delayed by three months due to border closures, but it thinks international travel could restart by November.

The company continues to receive assistance from the federal government which has helped many employees in the form of jobkeeper. Qantas also said that there has also been support for regional and domestic passenger flights and for some international flight routes, that would not otherwise have been commercially viable, helped to keep key transport links active.

Qantas is also expecting domestic capacity to increase to 60% in the third quarter of FY21 and 80% in the fourth quarter of FY21.

The airline is focused on getting the business back to positive net free cashflow (excluding one-offs). Net debt is expected to peak in the second half of FY21, with balance sheet repair to begin in the fourth quarter of FY21.

UBS rates Qantas as a buy and has a share price target of $6.20. However, Credit Suisse has a share price target of $4.15.

Webjet Limited (ASX: WEB)

In the FY21 half-year result, Webjet said that its online travel agency has returned to profitability as domestic borders started to reopen, driven by its market position in the domestic leisure market, as well as benefiting from its variable cost base.

HY21 total transaction volume (TTV) was down 89% to $267 million. Revenue declined 90% to $22.6 million, whilst expenses dropped 52% to $62.7 million. Earnings before interest, tax, depreciation and amortisation (EBITDA) fell 146% to $40.1 million.

Webjet said that WebBeds is focused on transforming its business so that it can emerge as the number one global business to business (B2B) player in the world. Management said that initiatives are on track to deliver at least 20% greater cost efficiencies when at scale.  

Webjet is not at a point where it’s cashflow positive yet. Webjet has managed to get the monthly cash burn down to $4.8 million. It had a cash balance of $283 million. Management said that its cash position allows it to withstand a protracted market recovery should it extend into 2022. The bank waivers have been extended through to 31 March 2022.

Morgan Stanley has a share price target of $4.50 for Webjet, whilst Ord Minnett has a share price target of $5.85.

More reading

• Top brokers name 3 ASX shares to sell next week
• Why analysts are backing these 2 ASX travel shares
• These are the 10 most shorted shares on the ASX
• Is the Qantas (ASX:QAN) share price a buy?
• ASX 200 Weekly Wrap: Friday carnage ruins last week of ASX earnings

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

The post Is it time to buy these 2 ASX travel shares? appeared first on The Motley Fool Australia.

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Once again, a large number of broker notes hit the wires last week. Some of these notes were positive and some were bearish.

Three sell ratings that caught my eye are summarised below. Here’s why top brokers think investors ought to sell these shares next week:

Nanosonics Ltd (ASX: NAN)

According to a note out of Citi, its analysts have retained their sell rating but lifted their price target on this infection prevention company’s shares to $4.30. Citi suspects that FY 2021 could be a tough year for Nanosonics due to the impact of COVID-19 on Trophon EPR adoption. In addition to this, the broker believes that the market is already pricing in a new product launch with a significant addressable opportunity. While it is optimistic that new products will be launched in the near future and support its growth, too little is known of them at this point to factor in appropriately. The Nanosonics share price ended the week at $5.81.

Qantas Airways Limited (ASX: QAN)

A note out of Credit Suisse reveals that its analysts have retained their underperform rating but lifted the price target on this airline operator’s shares to $4.15. While the broker sees positives in its working capital position, it isn’t enough for a change of rating. Credit Suisse continues to have concerns about increasing competition in the domestic market from Virgin and REX. The Qantas share price was trading at $5.10 at Friday’s close.

Zip Co Ltd (ASX: Z1P)

Analysts at Macquarie have retained their underperform rating and lifted their price target on this buy now pay later provider’s shares to $5.70. According to the note, the broker has concerns that the company’s QuadPay business could see its strong net transaction margins come under significant pressure due to increasing competition. It notes that the company is having to increase its customer acquisition costs to drive its customer growth. The Zip share price ended the week at $9.56.

More reading

• ASX 200 drops again, Zip sinks, Worley wins
• This was the week that ASX dividend shares proved their worth
• Why analysts are backing these 2 ASX travel shares
• What does the Zip (ASX:Z1P) share price have in store for 2021?
• ASX 200 sinks, Xero reveals acquisition, ARB driven higher

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 Nanosonics Limited and ZIPCOLTD FPO. The Motley Fool Australia has recommended Nanosonics Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Top brokers name 3 ASX shares to sell next week appeared first on The Motley Fool Australia.

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A major component of choosing an ASX dividend share is, naturally, the yield that that ASX dividend share has on offer. As long as a company can pay a reasonable and stable dividend each year, the onus on delivering capital growth can be eased. This is especially true for investors who only invest for dividend income.

So here are 2 ASX dividend shares that are offering attractive yields on recent pricing, as well as full franking credits.

2 ASX dividend shares with attractive yields this week

Coles Group Ltd (ASX: COL)

Coles is one of the most well-known companies in the country. It’s Australia’s second-largest grocery chain and also owns some other ventures, such as bottle shop chains.

Coles shares have been out of favour ever since the company reported its earnings for the first half of FY2021 last month. And that was despite the company reporting an 8% increase in revenue and a 10% jump for its interim dividend.

In fact, Coles shares are now down around 15% year to date. But, as ASX dividend investor would know, lower share prices mean higher starting dividend yields. And the most recent pricing of Coles indicated a dividend yield of 3.88% (or 5.54% grossed-up with full franking) on offer.

That’s a heck of a lot more than what you could expect from a term deposit these days and handily outstrips inflation as well. Since Coles sells groceries and other life essentials, its earnings base is relatively durable as well (as the company proved last year). That is a great advantage to have in a dividend share and is one of the reasons Coles was able to grow its dividends during the worst of the coronavirus pandemic in 2020.

Telstra Corporation Ltd (ASX: TLS)

Telstra is another ASX dividend share to consider today. As the ASX’s largest telco, Telstra has long had a reputation for large dividend yields, despite the infamous ‘day of the long dividend knives’ in 2017 (when Telstra slashed its dividends from the historic high of 31 cents a share).

These days, Telstra pays an annual dividend of 16 cents per share (including 6 cents in special dividends), which the company recently re-affirmed for 2021. Even so, this annual payout equates to a yield of roughly 5.2% on recent pricing, or 7.41% grossed-up with full franking.

As with Coles, that kind of yield runs rings around term deposits despite interest rates and other cash-based investments. It also puts Telstra in the upper echelons of yields offered by many of the ASX’s blue-chip shares, like the big four banks.

Since Telstra sells highly inelastic products and services like phones, broadband and mobile data (all modern essentials), it also has a very inelastic earnings base as well.

More reading

• Leading broker names 2 ASX dividend shares to buy next week
• Why is the Macquarie Telecom (ASX:MAQ) share price down today?
• 2 ASX dividend shares with generous yields
• Australian Primary Hemp (ASX:APH) share price surges. Here’s why.
• 3 reasons why Brickworks is a great ASX dividend share

Motley Fool contributor Sebastian Bowen owns shares of Telstra Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of 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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If you’re interested in boosting your portfolio with the addition of an exchange traded fund (ETF), then you might want to consider the one listed below.

Here’s why it could be the one to buy right now:

Betashares Nasdaq 100 ETF (ASX: NDQ)

The Betashares Nasdaq 100 ETF share price has come under significant pressure in recent weeks due to concerns over rising bond yields.

While there is nothing to say that this volatility is over, with its units down 10% from their high, the risk/reward on offer here looks to have shifted very favourably.

Why buy Betashares Nasdaq 100 ETF units?

The Betashares Nasdaq 100 ETF aims to track the famous NASDAQ-100 Index. This index comprises 100 of the largest non-financial companies listed on the NASDAQ stock market.

Betashares notes that this includes many companies that are at the forefront of the new economy.

This means that through just a single trade, investors will have access to companies like Apple, Amazon, and Google.

Furthermore, with its strong focus on technology, Betashares notes that it provides diversified exposure to a high-growth potential sector that is under-represented in the Australian share market.

What other companies are included in the Betashares Nasdaq 100 ETF?

Another stock included in the Betashares Nasdaq 100 ETF is Nvidia. It is a graphics card company which has been growing at an extraordinarily strong rate over the last few years.

It is benefiting from a number of industry tailwinds such as online gaming, cryptocurrency mining, and cloud computing.

In addition to this, investors will be buying a piece of MercadoLibre. It is the Latin American version of a number of global tech giants.

It is best known for the MercadoLibre Marketplace. This automated ecommerce platform allows businesses and individuals to list merchandise and conduct sales and purchases online. It is often regarded as the region’s answer to Amazon.

In addition to this, it has a PayPal-type business called MercadoPago and a Shopify-esque business called MercadoShops.

Combined, these businesses are underpinning stellar revenue and earnings growth, which has led to mouth-watering returns in recent years.

And with the company, and the majority of the Nasdaq 100, tipped to continue growing strongly throughout the 2020s, this ETF has the potential to be a market-beater over the long term.

More reading

• Top ASX shares to buy in March 2021
• 1 great way for Aussies to get exposure to Tencent and Alibaba
• 2 ASX tech shares to buy in March 2021
• 2 tech ETFs for ASX investors to buy after the market selloff
• Why this ASX tech ETF is in the buy zone

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

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There are some businesses in the S&P/ASX 200 Index (ASX: XJO) that have relatively high dividend yields and a history of increasing those payments for shareholders.

With the Reserve Bank of Australia (RBA) official interest rate at almost 0%, it’s hard to generate any meaningful returns from cash in the bank.

Here are two businesses with a track record of growing dividends:

APA Group (ASX: APA)

APA is one of the largest infrastructure shares on the ASX. It owns a vast gas pipeline network around Australia, it reportedly supplies around half of the country’s natural gas.

The ASX 200 share also has a number of renewable energy investments, as well as gas assets such as storage.

APA has a long record of distribution increases for shareholders – it has grown its distribution every year for around a decade and a half.

The business funds its distributions from the operating cashflow that its assets generate each year.

APA recently announced a 4.3% increase of its interim distribution to 24 cents per security. That came off the back of a 1.4% increase in operating cashflow in the FY21 half-year result. Management said that there was strong volume growth in Western Australia, the Northern Territory and sections of the east coast grid offset by softer contract renewals and lower energy consumption in Victoria.

However, the other statistics in the result showed a decrease for the ASX 200 share – revenue fell 0.6%, earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 2.3% and net profit excluding significant items declined 7%.

The reported net loss after tax was $11.7 million from the ASX 200 share, which included a non-cash impairment recognised against the Orbost Gas Processing Plant of $174.5 million.

APA is expecting to pay a distribution of 51 cents per security for FY21, which would be a 2% increase.

At the current APA share price, that would represent a distribution yield of 5.5%.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Patts one of the oldest businesses on the ASX. It was started as a pharmacy business over a century ago as a partnership between two existing pharmacy businesses.

Soul Patts still has an exposure to pharmacies and the Soul Pattinson chemist chain with its holding of Australian Pharmaceutical Industries Ltd (ASX: API) shares.

It’s now a diversified company with many investments across different sectors.

Some of the ASX 200 share’s investments include Brickworks Limited (ASX: BKW), New Hope Corporation Limited (ASX: NHC), TPG Telecom Ltd (ASX: TPG), Milton Corporation Limited (ASX: MLT) and Bki Investment Co Ltd (ASX: BKI). It also has plenty of unlisted investments and businesses like financials services, swimming schools and resources. 

One of the advantages of the Soul Patts model is that it can invest in any asset that it thinks is a good opportunity. In recent times it has invested in various assets like agriculture, Retail Food Group Ltd (ASX: RFG) shares and luxury retirement living. It also tried to buy Regis Healthcare Ltd (ASX: REG).

Soul Patts has grown its dividend every year since 2000, which is the best record on the ASX.

At the current Soul Patts share it has a grossed-up dividend yield of 2.8%.

More reading

• 2 top ASX dividend shares to buy
• 3 reasons why Brickworks is a great ASX dividend share
• No ASX dividend share is perfect, but Soul Patts (ASX:SOL) is more perfect than most
• APA (ASX:APA) share price on watch with HY21 report, upgrades distribution guidance
• 3 ASX shares that keep growing the dividend every year

Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of APA 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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