Tag: Motley Fool

The market may be closed for Christmas but that doesn’t mean you can’t plan the investments you want to make when it reopens.

Two top ASX shares you might want to take a closer look at are listed below. Here’s what you need to know about them:

a2 Milk Company Ltd (ASX: A2M)

The first share to look at is A2 Milk Company. It is a leading infant formula and fresh milk company which focuses on A2-only products. This reportedly makes its milk easier to digest than regular milk which has both A1 and A2 proteins. This point of difference has helped the company stand out in a crowded market and underpinned strong sales and profit growth over the last few years.

While COVID headwinds are going to weigh on its performance in FY 2021, management remains very positive that demand will rebound once the pandemic passes. Analysts at Morgans appear to agree and have recently put an add rating and $12.20 price target on its shares.

Kogan.com Ltd (ASX: KGN)

Unlike a2 Milk, Kogan has been a big winner from the pandemic. The closure of bricks and mortar retail stores shifted consumers online in large numbers, with some shopping online for the first time. This led to Kogan reporting a significant jump in active customers, which has underpinned extraordinarily strong sales and earnings growth.

Pleasingly, despite retail stores opening as normal again, this hasn’t stifled Kogan’s growth. Its strong growth has continued in FY 2021 and the company is currently on course to deliver a bumper profit result in the first half. In addition to this, a couple of value accretive acquisitions look set to give its second half performance a boost. One broker that is positive on the company is Credit Suisse. It recently put an outperform rating and $20.60 price target on its shares.

More reading

• ASX 200 rises on Christmas Eve
• ASX 200 up 0.5%: BHP Samarco update, A2 Milk’s acquisition, Credit Corp rockets
• Got cash to invest? Here are 3 ASX shares to buy
• Why the a2 Milk (ASX:A2M) share price will be on watch today
• 2 dirt cheap ASX shares to buy in 2021

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 Kogan.com ltd. The Motley Fool Australia owns shares of and has recommended A2 Milk. 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.

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Unfortunately, as much as income investors may wish for it, Santa will not be bringing interest rate increases this Christmas.

In fact, if many economists are to be believed, it could be over two years until rates start to head higher from their record lows.

In light of this, dividend shares look likely to remain the best way to earn a passive income in 2021.

But which dividend shares should you buy? Here are two to consider:

BHP Group Ltd (ASX: BHP)

Investors that are not opposed to investing in the resources sector, might want to take a closer look at the Big Australian. It is one of the world’s largest miners and the owner of some of the highest quality operations across the globe.

With iron ore and copper prices surging higher this year and oil prices rebounding strongly from their lows, BHP has been tipped to deliver a bumper profit result in FY 2021. And with its balance sheet in such good health, the company looks set to reward shareholders handsomely with dividends.

Macquarie is expecting this to be the case and has forecast a fully franked ~$3.85 per share dividend in FY 2021. Based on the current BHP share price, this represents a massive 9% dividend yield.

Telstra Corporation Ltd (ASX: TLS)

Another dividend share to look at is Telstra. With the end of the NBN rollout in sight and the company’s T22 strategy progressing very well, the hard days certainly appear to be behind this telco giant. In addition to this, the arrival of 5G internet looks set to give its hugely important mobile business a big boost in the coming years.

Another potential positive on the horizon is its plan to split into three separate businesses. This will allow Telstra to take advantage of potential monetisation opportunities and unlock value for shareholders.

Goldman Sachs is pleased with its plan and is positive on its outlook. It has a buy rating and $3.60 price target on Telstra’s shares and is forecasting a 16 cents per share fully franked dividend in FY 2021 and beyond. Based on the current Telstra share price, this would provide investors with a 5.3% dividend yield.

More reading

• ASX 200 rises on Christmas Eve
• 3 top ASX dividend shares for a better retirement
• ASX 200 up 0.5%: BHP Samarco update, A2 Milk’s acquisition, Credit Corp rockets
• Why the Woodside (ASX:WPL) share price is edging higher today
• Iron ore prices poised to hit US$180 next month: Westpac

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 has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The BrainChip Holdings Ltd (ASX: BRN) share price was an exceptionally strong performer on Thursday.

The artificial intelligence company’s shares were up as much as 57% to 51 cents at one stage.

While the BrainChip share price ultimately gave back a good portion of these gains, it still ended the day a very impressive 29% higher at 42 cents.

Why did the BrainChip share price rocket higher?

Investors were fighting to get hold of the company’s shares following the release of two positive announcements.

The first announcement revealed that BrainChip has received an order for its Akida Early Access Evaluation Kit from NASA.

According to the release, NASA will use the Akida Early Access Evaluation Kit within its shared service centre at the NASA/Ames research centre (ARC) in California.

Management notes that the kit will allow the space agency to evaluate the Akida technology for use in programs with a neuromorphic processor that meets spaceflight requirements.

It feels the processor is well suited for spaceflight and aerospace applications. This is because the device is a complete neural processor and does not require an external CPU, memory, or Deep Learning Accelerator.

This is a big positive as reducing component count, size, and power consumption is a paramount concern in spaceflight and aerospace applications.

Though, it is worth noting that there’s no guarantee that NASA will take things further once it has evaluated the technology.

What else did BrainChip announce?

In a separate announcement BrainChip revealed that it has signed an intellectual property license agreement with Renesas Electronics America.

Renesas Electronics America is a subsidiary of Renesas Electronics Corp, which is a global semiconductor manufacturer that specialises in microcontroller and automotive system-on-chip (SoC) products.

The agreement will see BrainChip deliver its Akida technology for use as a SoC licensed product and includes a single-use design license, implementation support services, royalty payments per unit, and software maintenance services for two years.

As with space travel, management believes the technology is well suited for advanced driver assistance systems (ADAS), autonomous vehicles, drones, vision-guided robotics, surveillance, and machine vision systems.

Overall, two promising developments, but time will tell whether they lead to material revenue generation in the future.

More reading

• Why AVZ Minerals, BrainChip, BSA, & Credit Corp shares are storming higher
• BrainChip (ASX:BRN) share price on watch following major announcements
• Why Brainchip Holdings (ASX:BRN) shares are in a trading halt
• Why the BrainChip (ASX:BRN) share price is charging higher
• ASX small caps could get a boost with the Aussie dollar hitting 28-month highs

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 S&P/ASX 200 Index (ASX: XJO) went up by around 0.3% to 6,665 points.

Here are some of the highlights from the shortened trading day on the ASX:

A2 Milk Company Ltd (ASX: A2M)

A2 Milk confirmed that, as previously contemplated, it has decided to enter into binding agreements relating to the acquisition of a 75% interest in Mataura Valley Milk (MVM), which is a dairy nutrition business in New Zealand.

The company said that the proposed acquisition will provide the opportunity for A2 Milk to participate in nutritional products manufacturing, provides supplier and geographic diversification and strengthens its relationship with key Chinese partners.

A2 Milk will spend NZ$268.5 million to buy 75% of MVM, based on an enterprise value of NZ$385 million. It will be funded from A2 Milk’s existing cash.

One of the main reasons for the acquisition is that it will establish dual supply arrangements alongside existing relationships with Synlait Milk Ltd (ASX: SM1) and Fonterra Shareholders’ Fund (ASX: FSF).

The manufacturing facility that MVM owns has been recently constructed and it’s operational. A2 Milk described it as world class.

A2 Milk also said that MVM is well located for access to a growing productive milk pool supported by favourable climactic conditions and water availability. A2 Milk thinks the deal would give the opportunity to produce additional infant nutrition products for China and other markets. Finally, A2 Milk is excited by the ability to capture manufacturing margin.

Geoff Babidge, the CEO of A2 Milk, said: “MVM provides a unique opportunity to acquire a new world-class nutritional products manufacturing capability in New Zealand, alongside a highly respected China state owned enterprise in China Animal Husbandry Group. We have worked closely with CAHG and MVM over recent months and have developed relationships with both teams that we are confident will provide a strong foundation for the business going forward. We continue to be impressed by the MVM facility and the management team.”

A2 Milk expects that during a transitional period, between FY22 and FY24, it will be approximately break even at the earnings before interest, tax, depreciation and amortisation (EBITDA) level, with positive EBITDA generation from FY25 when significant nutritional volumes will be manufactured at the site.

There will be transaction costs of approximately NZ$10 million which will be treated as a one-off expense.

The A2 Milk share price went up more than 1% today in response to this news.

BHP Group Ltd (ASX: BHP)

BHP gave a Samarco update today. Samarco is the Brazilian business that BHP owns half of. Samarco had a dam failure a few years ago.

The miner said that Samarco has met the licensing requirements to restart operations at its Germano complex and Ubu complex. It has commenced iron ore pellet production.

Samarco’s operations were suspended following the failure of the dam on 5 November 2015.

BHP said that Samarco’s gradual restart of operations incorporates concentrator 3 at the Germano complex and pelletising plant 4 at Ubu, as well as a new system of tailings disposal combining a confined put and tailings filtering system for dry stacking.

Independent tests have been carried out on Samarco’s preparations for a safe restart of operations. Samarco expects initially to produce approximately eight million tonnes of iron ore pellets each year.

The work by the Renova Foundation to remediate and compensate for the damages of the failure of the dam continues. BHP’s Brazilian subsidiary continues to support Renova in its work. By November, Renova had spent US$2.1 billion on its remediation and compensation programs, with US$620 million spent on indemnities and emergency financial aid to approximately 325,000 people.

The BHP share price went up more than 1% in reaction to this news.

More reading

• ASX 200 up 0.5%: BHP Samarco update, A2 Milk’s acquisition, Credit Corp rockets
• 10 incredible quotes that sum up investing in 2020
• Why the Woodside (ASX:WPL) share price is edging higher today
• Iron ore prices poised to hit US$180 next month: Westpac
• BHP (ASX:BHP) share price on watch after Samarco update

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended A2 Milk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Are you looking for a growth share or two to buy in 2021? Listed below are two top growth shares to look at.

Both have been growing strongly in recent years and have been tipped to continue this positive form in the 2020s. Here’s why they are highly rated:

Altium Limited (ASX: ALU)

Altium is a leading printed circuit board (PCB) design software provider. Its software is used by countless companies around the world to design the complex circuit boards that you’ll find inside almost all electronic devices.

The good news for Altium is that due to the artificial intelligence and internet of things booms, there has been a proliferation of electronic devices over the last decade. This rapid growth is expected to continue over the next decade, which should underpin growing demand for its award-winning software.

Management is confident in its growth trajectory and is targeting revenue of US$500 million by 2025-26. This will be a 150% increase on FY 2020’s revenue.

Analysts at Morgan Stanley are confident on its future. They have an overweight rating and $40.00 price target on the company’s shares.

ELMO Software Ltd (ASX: ELO)

ELMO is a cloud-based human resources and payroll software company. Its software streamlines processes such as employee administration, recruitment, remuneration, and payroll through a single a unified platform.

At present the company is operating in both the ANZ and UK markets. In respect to the latter, the company has just bolstered its position in this $6.8 billion market with the acquisitions UK-based Breathe and Webexpenses. Importantly, this also provides it with plenty of cross sell opportunities for its existing services.

A recent note out of Morgan Stanley reveals that its analysts have retained their overweight rating and lifted the price target on the company’s shares to $9.70.

More reading

• Leading brokers name 3 ASX shares to buy today
• 3 fantastic ASX growth shares to buy in 2021
• Top brokers name 3 ASX shares to buy next week
• Why the ELMO Software (ASX:ELO) share price surged 11% higher today
• 3 exciting ASX tech shares to buy

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 Altium and Elmo Software. The Motley Fool Australia has recommended Elmo Software. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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It’s become something of a tradition for me to share a ‘Foolish Christmas Carol’ in this space around this time each year.

Yes, it’s corny. But also heartfelt and hopefully a little fun. And frankly, I’ve never been cool, so there’s little credibility left to lose, on that score!

I generally take the words of a well-known Christmas song, add a little investing wisdom, and use it as an opportunity to say thank you to our readers and members. We know there are a plethora of investing resources out there, and we appreciate your interest and trust. It’s a trust we hold with no little weight.

So, in keeping with that tradition, I will do the same this year.

But also, this year, something a little extra.

2020 has been a helluva year. Some people will finish it in better shape than they started, having kept their jobs and their health, and having perhaps saved and made a few bob along the way.

But many of us will be glad to see the end of 2020. It’s been challenging on a lot of fronts: health, finances and emotional wellbeing. Fires, droughts, floods, and yes, bloody coronavirus. If you’re worn out, and have had enough, I hope the New Year lets you turn a new page.

A reminder, too, that things tend to get better, over time. No, not in a straight line. And not for everyone, all the time. But we make progress. The future will, I believe, be better than the past (and in no small part because of people like you and me who continually strive for ‘better’ in all walks of life).

So, this year, before my ‘carol’, I want to share something, unadulterated. It’s something I hope you’ve read before. It’s something I try to read, slowly and deliberately, every year. But this year, I think we all need the pick-me-up. 

For me, it’s an antidote to frustration. To exhaustion. To pessimism. For the times when life just gets too heavy.

It’s an answer to a letter, written by an 8 year old girl in 1897, to the editor of The Sun, a prominent New York newspaper.

Her name was Virginia O’Hanlon.

She wrote:

——-

“Dear Editor,

I am 8 years old. Some of my little friends say there is no Santa Claus. Papa says, ‘If you see it in The Sun, it’s so.’ Please tell me the truth, is there a Santa Claus?”

Virginia O’Hanlon
115 West Ninety Fifth Street

——-

The reply, written by Francis P Church, became the most reprinted editorial in history. Enjoy:

——-

VIRGINIA, your little friends are wrong. They have been affected by the skepticism of a skeptical age. They do not believe except they see. They think that nothing can be which is not comprehensible by their little minds. All minds, Virginia, whether they be men’s or children’s, are little. In this great universe of ours man is a mere insect, an ant, in his intellect, as compared with the boundless world about him, as measured by the intelligence capable of grasping the whole of truth and knowledge.

Yes, VIRGINIA, there is a Santa Claus. He exists as certainly as love and generosity and devotion exist, and you know that they abound and give to your life its highest beauty and joy. Alas! how dreary would be the world if there were no Santa Claus. It would be as dreary as if there were no VIRGINIAS. There would be no childlike faith then, no poetry, no romance to make tolerable this existence. We should have no enjoyment, except in sense and sight. The eternal light with which childhood fills the world would be extinguished.

Not believe in Santa Claus! You might as well not believe in fairies! You might get your papa to hire men to watch in all the chimneys on Christmas Eve to catch Santa Claus, but even if they did not see Santa Claus coming down, what would that prove? Nobody sees Santa Claus, but that is no sign that there is no Santa Claus. The most real things in the world are those that neither children nor men can see. Did you ever see fairies dancing on the lawn? Of course not, but that’s no proof that they are not there. Nobody can conceive or imagine all the wonders there are unseen and unseeable in the world.

You may tear apart the baby’s rattle and see what makes the noise inside, but there is a veil covering the unseen world which not the strongest man, nor even the united strength of all the strongest men that ever lived, could tear apart. Only faith, fancy, poetry, love, romance, can push aside that curtain and view and picture the supernal beauty and glory beyond. Is it all real? Ah, VIRGINIA, in all this world there is nothing else real and abiding.

No Santa Claus! Thank God! he lives, and he lives forever. A thousand years from now, Virginia, nay, ten times ten thousand years from now, he will continue to make glad the heart of childhood.

——–

I’m not ashamed to admit to getting a little misty-eyed re-reading that, even if I’ve read it scores of times before.

Now, to our Christmas carol!

——–

Rudolph The Foolish Reindeer

You know Buffett and Fisher and Lynch and Graham
Soros and Templeton and Dalio and Ackman
But do you recall
The most Foolish reindeer of all?

Rudolph the Foolish Reindeer
Had a very long-term bent
He didn’t fear price movements
He knew how almost naught they meant

All of the other ‘vestors
Used to laugh and place their trades
They could never tempt old Rudolph
To join in on their silly games

Then one foggy COVID year
Share prices did crash and sway
But Rudolph, with his view held tight
Didn’t sell or run in fright

Then how the market rewarded him
As share prices recovered with glee
Said Rudolph the Foolish Reindeer
“Patience is the price of victory”

Rudolph the Foolish Reindeer
Learnt the lessons of this year
You gotta take the slings and arrows
And never, ever cede to fear

The future always has its worries
The headlines they’ll be full of doubt
They’ll never give poor Rudolph
Respite from all the fear they shout

But whatever worries rear their heads
They’ll not hang ‘round too long
Rudolph he’ll remember well
Hist’ry’s got some tales to tell

Then the market will reward him
Compounding, it works you see
Rudolph the Foolish Reindeer
Learned optimism from history

——-

On behalf of the entire team here at Motley Fool Australia, I want to wish you a very Merry Christmas (and a wonderful holiday season, if you observe a different tradition), and all the very best for a safe, prosperous and joyful 2021.

Our thoughts go out to those who are separated from family and friends. Those who’ve lost loved ones this year, and who will have an empty chair at their Christmas table. We hope your pain will abate, in time, and that your memories of better times will see you through.

And a big shout out to those of you who will be working over Christmas, sacrificing time with family and friends to look after our community. To our Diggers, particularly those posted overseas. To the coppers, firies and ambos. To the doctors and nurses. The retail workers, shift workers and members of the SES, Bush Fire Brigades and service crews who stand ready to drop the ham and prawns, if the call goes out.

Thank you, all, for what you do for the rest of us.

Merry Christmas, Fools!

More reading

• 2 ASX growth shares to buy
• 2 high quality ASX shares to buy for your retirement portfolio
• Brokers name 3 ASX shares to buy right now
• 8 issues that will impact investors in 2021: experts
• 3 top ASX dividend shares for a better retirement

Motley Fool contributor Scott Phillips 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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When you first start investing, you might look for high risk, high reward growth shares. Because if things don’t go quite to plan, you have plenty of time to recover.

However, when you’re approaching retirement, you have less time on your side to recover your losses, so it can be best to switch your focus to income and capital preservation.

With that in mind, here are two ASX shares which could be top options for retirees:

Ramsay Health Care Limited (ASX: RHC)

Ramsay Health Care is a leading private healthcare company with operations across several regions. Although its growth over the short term is likely to be challenging because of headwinds caused by the pandemic, its long term outlook remains as positive as ever.

This is due to its world class network of private hospitals and their exposure to the growing demand for healthcare services globally. Management also has a penchant for acquisitions and could boost its growth with further earnings accretive acquisitions in the future.

Analysts at Macquarie have an outperform rating and $73.65 price target on the company’s shares at present.

Woolworths Limited (ASX: WOW)

Woolworths could be a good option for retirees due to the conglomerate’s numerous quality brands. These include Woolworths supermarkets, Dan Murphy’s, BWS, and BIG W. As a whole, the company appears to be well-positioned for growth over the long term thanks to its defensive qualities and strong market position.

In addition to this, another potential driver of value in the future could be its supply chain improvement plans and the proposed spin-off of its $10 billion Endeavour segment. Although the latter is likely to be delayed until after the pandemic passes, it is expected to create value for shareholders.

Analysts at Citi are positive on the company’s future. They recently put a buy rating and $44.50 price target on Woolworths’ shares. Citi is forecasting a fully franked $1.16 per share dividend in FY 2021, which equates to a 2.9% yield.

More reading

• Ramsay Health Care (ASX:RHC) share price climbs after this announcement
• ASX 200 Weekly Wrap: ASX hits new post-March high
• Buy these ASX blue chip shares for your retirement portfolio
• How useful is the P/E ratio in assessing ASX shares?
• Citigroup picks the best ASX retail stocks to own for 2021

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Woolworths Limited. 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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Australia’s top brokers have been busy adjusting their estimates and recommendations again, leading to the release of a large number of broker notes this week.

Three broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Control Bionics Ltd (ASX: CBL)

According to a note out of Morgans, its analysts have initiated coverage on this medical device company’s shares with an add rating and $1.42 price target. The broker notes that the company’s NeuroNode technology allows severely disabled people to operate and communicate via a computer using visual and neural signals. It appears positive on its long term future and notes that it is targeting a market worth $1.2 billion a year. The Control Bionics share price is trading at 98 cents today.

Hub24 Ltd (ASX: HUB)

Analysts at Citi have retained their buy rating and $24.00 price target on this investment platform provider’s shares. The broker points out that the company has signed an agreement with IOOF Holdings Limited (ASX: IFL). While it sees some risks from the deal, overall it views it as a positive. In addition to this, the broker believes HUB24 is well-placed to benefit from the ongoing structural shift in wealth management. The HUB24 share price is changing hands for $20.82 on Thursday.

Medibank Private Ltd (ASX: MPL)

A note out of Morgan Stanley reveals that its analysts have retained their overweight rating and $3.15 price target on this private health insurer’s shares. This follows the decision of the Federal Government to authorise a 3.25% increase in its premiums in 2021. It believes this is a positive for Medibank, though acknowledges that increasing premiums could lead to affordability issues for consumers. The Medibank share price is changing hands for $3.01 on Thursday afternoon.

More reading

• Why the Hub24 (ASX:HUB) share price could go higher
• ASX 200 ends slightly down
• Why the Medibank (ASX:MPL) share price surged 4% higher today
• ASX 200 down 0.4%: NIB jumps, a2 Milk rebounds, WiseTech sinks lower
• Here’s what is driving the NIB (ASX:NHF) share price higher 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 Hub24 Ltd. The Motley Fool Australia owns shares of CBL Limited. The Motley Fool Australia has recommended Hub24 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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As another year draws to a close in a blink of an eye, we say goodbye to an unforgettable (or perhaps forgettable) twelve months headlined by the coronavirus pandemic.

There is nobody whose life has not been touched by this event. Many of the effects will be long-lasting, such as the way we work, interact, travel and shop. 

We shall now look ahead to 2021 with hope, but also with a certain degree of caution.

The economists at the Commonwealth Bank of Australia (ASX: CBA) have compiled a list of big issues which they believe will dominate the headlines and affect investors in 2021. We’ve summarised the main points below.

COVID-19 (yes, still…)

The economists believe that COVID-19 will still dominate the landscape in 2021, and global economic outlook will be dictated by the virus and how quickly an effective vaccine can be distributed.

Australia has done well in managing the virus spread in the country, with just over 28,000 cases at the time of writing, while keeping the death rate at under 1,000. The country sits a lowly 94th in active cases globally.

The Commonwealth Bank economists also expect the global economy to contract around 3.5% by the end of 2020, before rebounding 5% in 2021.

This is good news considering that the economic downturn is the worst since World War II – or in peacetime, the worst downturn since the Great Depression of the 1920s/30s.

The Joe Biden presidency

The recent $1 trillion stimulus package approved by Congress could boost economic growth in the United States and return the American economy to pre-pandemic levels by the end of 2021, the economists predicted.

As President, Joe Biden could introduce tougher financial regulation and impose anti-trust measures on big technology companies.

The US administration’s engagement with China on trade issues will also be one to focus on, as this would also affect businesses and investors around the globe including Australia.

The economists believe that Biden will adopt a tough but conciliatory stance with China, rather than a ‘tit-for-tat’ tariff battle pushed by Trump.

China

Any discussion about the Australian economy has to include China.

China is by far Australia’s biggest trade partner, accounting for almost 40% of Australia’s goods exports, and 28% of Australia’s imports. Until recently China was also our largest source of tourists.

The current political spat with Beijing and the subsequent bans imposed on Australian produce will certainly be a key talking point in 2021.

The economists are tipping growth of 1.8% for China, accelerating to 9.1% in 2021 before lifting by 5.6% in 2022 – which is a big positive for the world and Australia.

Monetary policy

Interest rates in Australia are set to remain super low for some time. In fact the Reserve Bank of Australia has made a commitment to not lift the cash rate for at least three years.

On its projections, the economists predicted that inflation will struggle to get near the bottom of the 2–3% target band.

In other developed nations, interest rates have been reduced even further, with negative rates in some parts of Europe and in Japan. The economists believe that it will stay that way for some time.

Jobs

The economists believe that the ‘shotgun’ approach of the Australian government with initiatives such as Jobkeeper and industry subsidies have made a difference in keeping the lid on unemployment.

At the start of the crisis, the Reserve Bank and Federal Treasury expected the jobless rate to peak over 10%. Now the expectation is that the jobless rate could peak at 8% or below in 2021.

The effective distribution of a vaccine would be the main catalyst for a faster-than-expected economic recovery. And that raises the prospect of the jobless rate returning to 5% quicker than expected.

Migration

Australia has relied on population growth to fuel economic growth for decades. Population growth of around 1.5% a year and productivity growth of 1.0-1.5% has underpinned our economic growth of 2.5-3.0%.

That’s all changed as a result of the pandemic.

In the 44 years of records, there has never been three months in a row where more people left Australia than settled here.

Migration will certainly be a topic of debate in 2021 in the struggle to maintain our economic growth and prosperity.

Economic inequality

The World Bank has projected that by 2021, an additional 110–150 million people worldwide will have fallen into extreme poverty in the developing world as a result of the pandemic.

While advanced economies have rolled-out large-scale government spending programs to protect their citizens from the recession, emerging economies aren’t so fortunate. 

Those countries have weaker healthcare systems, wage and welfare safety nets, and lack of macroeconomic policy tools at their disposal.

Climate change

Government action on climate change has stalled over the past year, as focus turned to handling the pandemic.

A lack of resolve from the Trump Administration in the US also accounts for some stalling in moves to address climate change.

However, the economists predicted that President-elect Joe Biden will take a much more active approach on climate change.

Closer to home, Australian Prime Minister Scott Morrison was less committed, saying that “Australia also shares an ambition for net zero emissions, but we are focused on how to get there.” 

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Motley Fool contributor Eddy Sunarto owns shares of Commonwealth Bank of Australia. 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 8 issues that will impact investors in 2021: experts appeared first on The Motley Fool Australia.

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Retirement can be a confronting transition for many ASX investors. It heralds a shift in your relationship with your money.

Instead of saving and investing to build your nest egg, you’re spending that nest egg (or the proceeds from it) to cover your costs of living. Instead of working for your keep with labour, you are instead relying on investment income from interest, dividends and franking credits, as well as pensions and savings.

With that in mind, dividend-paying shares can be a great way to boost the cash available to you in retirement, especially in this era of near-zero interest rates. The income dividend shares can produce can help to replenish the assets you’re spending down to cover your costs, or help with your portfolio’s ability to meet your future needs.

These 3 top dividend shares can help in this quest for a better, more comfortable retirement.

A consumer staples giant

Our first ASX dividend share to consider for a better retirement today is Coles Group Ltd (ASX: COL). Coles is a company we’d all probably be familiar with. It owns the eponymous supermarket chain, as well as a slew of bottle shops such as Liquorland and First Choice Liquor.

What makes Coles appealing an ASX retirement dividend share is its very nature. Being in the business of selling everyday essentials like food, drinks, toilet paper, razors, laundry powder, Coles is always going to be a business where people need, rather than want, to visit. That’s the beauty of owning a consumer staples company.

We saw this advantage on full display in 2020. Amidst rampant economic and social uncertainty across the year, Coles managed to increase sales revenue by 6.9% across FY2020. That enabled Coles to bump up its 2020 final dividend by 14.6% over the previous year’s payout. That’s the kind of certainty that would benefit a retiree’s share portfolio.

On current pricing, Coles’ dividend is worth a trailing yield of 3.13%, or  4.47% grossed-up with Coles’ full franking credits. Goldman Sachs currently rate Coles shares as a ‘buy’ today, with a 12-month price target of $20.50 a share and a forecast yield of 4.5% by FY2023.

An ASX telco dividend stalwart

Our next ASX dividend share for a better retirement is Telstra Corporation Ltd (ASX: TLS). Telstra has not been a lot of retirees’ favourite share, I’d wager. Investors who bought into the T2 Telstra float back in 1999 have never seen their shares above water since. And Telstra infamously slashed its cherished dividend payments back in 2017, much to the dismay of its shareholders.

However, even though the Telstra of today isn’t the same company as it used to be, doesn’t mean it’s not a valuable retirement income share today.

Much like Coles, Telstra has benefitted from an inelastic, needs-based earnings base in 2020. An internet connection or mobile phone is perhaps one of the last things people will stop spending money on in our modern age.

And that has helped Telstra keep its dividend payments steady over 2020. The company paid out 16 cents per share in dividends over the year and has all-but-guaranteed this dividend will be repeated in FY2021 as well. That gives Telstra shares a healthy trailing yield of 5.3% on current pricing, or 7.57% grossed-up with Telstra’s full franking credits.

Goldman Sachs has also given Telstra a current ‘buy’ rating, with a 12-month price target of $3.75 a share.

An ASX dividend king

One of the most important factors a retiree should consider in an ASX dividend share is income certainty. After all, the reason why dividend shares offer higher yields than term deposits is the risk we take from investing in them. Unlike a term deposit, there is no guarantee of either income or capital preservation with any company, dividend-paying or otherwise.

But our final ASX dividend share could be one of the best alternatives the ASX has to offer. That’s because of Washington H. Soul Pattinson & Co Ltd (ASX: SOL) has an unimpeachable record of dividend payments, unrivalled by any other company.

Like clockwork, it has managed to deliver 20 years of straight dividend increases to its investors as of 2020. That’s an impressive record when you consider that includes the ‘tech wreck’, the global financial crisis, and the coronavirus pandemic.

The annual shareholder pay rises aren’t tokenistic either. Soul Patts’s dividends in 2001 amounted to 11 cents a share. In 2020, they were 60 cents a share, which represents a compounded annual growth rate of 9.2% per annum (beating inflation hands down). In 2020 alone, the increase was a comfortable 3.4% on 2019’s payouts.

Part of this success is likely Soul Patts’ unique structure. It’s an industrial conglomerate, owning large stakes in a wide variety of other ASX companies. These include TPG Telecom Ltd (ASX: TPG), Brickworks Ltd (ASX: BKW) and New Hope Corporation Limited (ASX: NHC).

In fact, in its 2020 annual general meeting, Soul Patts told investors that it has managed to return an average of 14.3% per year to shareholders (that includes share price growth and dividends) over the past 20 years. On current pricing, Soul Patts’ dividend is worth a yield of 1.98%, or 2.83% grossed-up with full franking credits.

Foolish takeaway

All 3 of these ASX dividend shares could be perfect choices for a retirement portfolio. None are absolutely safe of course, but all 3 companies’ recent track record of dividends leave term deposits in the dust. Whether you are about to retire, or you already have retired, there are many stones to look under on the sharemarket for dividend income.

More reading

• 3 ASX shares for growth, income, and value investors
• The NBN is finally finished. Is Telstra (ASX:TLS) waiting in the wings?
• Why the BSA (ASX:BSA) share price is on watch today
• 2 ASX dividend shares with big yields
• Forget savings accounts and look at these quality ASX dividend shares

Motley Fool contributor Sebastian Bowen owns shares of Telstra Limited and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks, Telstra Limited, and Washington H. Soul Pattinson and Company 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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