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Low interest rates mean that dividend stocks may become increasingly popular among investors. In many cases, they offer significantly higher returns than other income-producing assets such as bonds and cash.

However, there is more to successful dividend investing than simply buying high-yielding stocks. Considering a company’s financial position, long-term outlook and the affordability of its dividends could lead to less risk and higher returns.

Buying dividend stocks with affordable payouts

Purchasing dividend stocks with high yields is of little use to an investor if they are unaffordable. As such, it is crucial to check that a company can pay its dividends – even if there is a period of weaker operating conditions ahead.

Assessing a company’s dividend affordability can be done through comparing its net profit to its shareholder payouts. Dividing net profit by dividends paid shows how many times a company could have made its shareholder payouts. A figure of more than one means that it had headroom when doing so. This may become an increasingly valuable requirement due to the uncertain economic outlook that could cause profitability across a wide range of sectors to come under pressure.

Financial strength

Dividend stocks with solid financial positions may mean less risk for income investors. For example, a company that has a strong balance sheet with modest debt may be better able to survive an uncertain economic period. It may not need to reduce dividends to service debt or pay operating expenses. This may result in a more reliable dividend for investors, as well as a stronger share price performance.

Analysing a company’s financial position can be undertaken via its investor updates and annual reports. They paint a picture of its financial standing that can be used to assess its risks. By looking at a longer period of updates, it may be possible to gauge how a company’s strategy is impacting on its financial position. This may provide income investors with a greater insight into how the company is run, and how its dividends could change in future.

Long-term growth outlook

Dividend stocks can become increasingly attractive if they are able to raise shareholder payouts at a fast pace. As such, assessing a company’s long-term profit growth outlook could be a means of identifying the most attractive income investing opportunities.

Companies that have the capacity to adapt to changing consumer tastes may prove to be more successful in the long run. Similarly, companies with wide economic moats may face fewer challenges during economic turmoil and may also be able to generate higher profit growth in a period of economic growth.

Clearly, dividend stocks can experience unforeseen difficulties. Therefore, it is crucial to buy a diverse range of companies within a portfolio so that risk is spread among a broad spectrum of regions and sectors. This can lead to a more reliable passive income and higher returns in the long run.

More reading

• Why is the Recce (ASX:RCE) share price soaring 14%?
• Charter Hall REIT (ASX:CQR) gains 5% on vaccine news, AGM
• 2 ASX mid cap shares that are growing strongly
• Enjoying your ASX 200 gains? Here’s why you should watch out for January
• Vaccine hopes cause ASX 200 to rise on Tuesday

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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Recce Pharmaceuticals Ltd (ASX: RCE) share price has been soaring up today. Recce shares jumped up more than 14% on news that the company has seen encouraging results in the treatment against the COVID-19 virus. The release comes on the same day that Pfizer Inc (NYSE: PFE) announced its vaccine success.

The Recce share price has risen 14.21% at the time of writing, vaulting its shares to $1.08.

What does Recce do?

Recce is involved in drug discovery and development business. It aims to commercialise a new class of synthetic antibiotics that target a wide range of diseases to address the global health challenge of antibiotic-resistant superbugs.

The group operates solely in research and development, and is located in both Australia and the United States.

COVID-19 trial success

Today the Recce share price is flying on the news that it saw encouraging results of its primary drug, Recce 327 against COVID-19. R327, a synthetic anti-infective drug, showed encouraging efficacy in an in-vitro screening assay against the virus.

FDA-approved R327 has traditionally been developed for the treatment of blood infections and sepsis. Infections that are derived from E. coli and S. aureus bacteria. However, earlier this year it was announced that the drug may also be effective against COVID-19.

As the drug showed encouraging inhibition against the virus it is now advancing to Stage 1b. This stage will be under way in near weeks.

Whilst the company is delighted by the results, it notes that preliminary and further testing must be completed before the drug can be announced as fully effective.

Recce non-executive chair John Prendergast was pleased, saying:

We’re highly encouraged by the results from this study, which indicate anti-viral activity of R327 and, in particular, highlight the potential potency of our lead candidate against SARS-CoV-2 . We are interested in seeing the next stage and look forward to continuing research on the effectiveness of R327 with the team at the Doherty Institute.

More reading

• COVID-19 over? Credit and debit card spend surges
• ASX energy shares blast off after COVID-19 vaccine news
• Will Pfizer’s COVID-19 vaccine end the ASX tech share rally?
• ASX 200 to surge higher after Pfizer COVID-19 vaccine success
• Here’s why the Recce (ASX:RCE) share price has fallen 7% today

Motley Fool contributor Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Australian listed property trust Charter Hall Retail REIT (ASX: CQR) has announced some promising metrics today at its annual general meeting (AGM) to unit holders. The unit price of this real estate investment trust (REIT) rose by 5.5% today to $3.84 amid a broader rise in the property sector of the ASX.

Highlights of today’s AGM

Charter Hall Retail REIT reported some decent results for FY20 despite pandemic lockdowns and various restrictions. Highlights included:

• Operating earnings of $142 million, up 11.5% from the previous financial year.
• Operating earnings per unit of 30.56 cents, up 1.8%.
• Distribution per unit of 24.52 cents, up 14.7%.
• Property portfolio value of $3,325 million, up 9.1%.

The company also advised that in light of current cash collection levels, it expects the first half distribution to be approximately 10.7 cents per unit. Assuming there are no further lockdown or government imposed trading restrictions, Charter Hall expects that the second half distribution will be greater than the first half distribution

The REIT also provided a preview of its operational performance so far in FY21. It says that supermarket sales growth for the quarter increased to 8.9%, reflecting continued strength of in-home consumption. Occupancy remains stable at 97.3% as 96% of stores were still open nationally at the end of September. 

What is Charter Hall Retail REIT?

Charter Hall Retail REIT owns an Australian portfolio of roughly 50 shopping centres, 225 service stations leased to the Australian arm of BP plc (NYSE: BP), and a distribution centre leased to Coles Group Ltd (ASX: COL). It also counts Woolworths Group Ltd (ASX: WOW) and Aldi as its customers. Rent is of course Charter Hall Retail REIT’s dominant revenue driver.

In July 2020, the REIT acquired a stake in a Coles distribution centre with 14 years remaining on the lease and fixed annual rental uplifts of 2.75%. Woolworths remains the company’s largest tenant, representing 18% of its income. Charter Hall Retail REIT commands around a 5% market share of Australia’s retail space shopping centres. 

More reading

• Why is the Recce (ASX:RCE) share price soaring 14%?
• 2 ASX mid cap shares that are growing strongly
• Enjoying your ASX 200 gains? Here’s why you should watch out for January
• Vaccine hopes cause ASX 200 to rise on Tuesday
• Why the Sydney Airport (ASX:SYD) share price rocketed 24% higher today

Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The mid cap side of the Australian share market is home to a number of companies that have been growing strongly over the last few years.

Two that have achieved this are listed below. Here’s what you need to know about them:

Adore Beauty Group Limited (ASX: ABY)

Adore Beauty is a recently listed $600 million beauty retailer. It was created in a garage in Melbourne 20 years ago and now has over 590,000 Active Customers across the ANZ region purchasing third-party beauty and personal care products from its website. This calendar year the company is expecting to generate revenue of $158.2 million, this will be an increase of 76% on the prior corresponding period. Also expected to grow strongly is its net profit, which is forecast to increase 150% year on year to $3.5 million.

This is still only scratching at the surface of a beauty and personal care products market estimated to be worth $10.9 billion in 2019 according to Frost & Sullivan. Management has its eyes on winning a greater slice of this market and intends use the funds it raised from its IPO to support its growth strategy and future growth opportunities. 

Jumbo Interactive (ASX: JIN)

Jumbo Interactive is a $788 million online lottery ticket seller and the operator of the Oz Lotteries website. At present the company generates the majority of its revenue from the Oz Lotteries website, but it is far from a one-trick pony. Jumbo also has a growing software-as-a-service (SaaS) business – Powered by Jumbo.

Management expects its Powered by Jumbo SaaS business to be the key driver of growth in the future. It estimates that it has a US$303 billion global total addressable market, with only 7% of this market online at the moment.

One broker that is confident on its future is Goldman Sachs. Yesterday it initiated coverage on the company with a buy rating. It is forecasting a 16% compound annual growth rate for Jumbo’s revenue over the next three years. This is expected to be supported by the lottery industry reaching an inflection point in digital penetration and the structural shift to online sales.

More reading

• Leading brokers name 3 ASX shares to buy today
• Why this broker has rated Jumbo (ASX:JIN) shares a buy
• Where to invest $1,000 into ASX shares this week
• These 3 ASX shares to IPO recently are struggling
• 6 major events for ASX shares this week

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Jumbo Interactive Limited. The Motley Fool Australia owns shares of and has recommended Jumbo Interactive Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) is having a fabulous time of late, if the numbers are anything to go by.

Today, the ASX 200 is up 0.70% to 6,340 points, improving on yesterday’s 8-month high. The index is up 4.5% over the past week, 3.35% over the past month, and 16% over the past 6 months. The catalysts for this enjoyable rise? As we outlined this morning, many market commentators are pointing to the combination of the Reserve Bank of Australia’s (RBA) interest rate cut last week (to a new record low of 0.1%), with the more-decisive-than-initially-hoped outcome of last week’s presidential election.

On the latter, we discussed how various commentators and fund managers are pointing to the ‘nirvana’ outcome of a Democrat in the White House, in combination with divided Democrat/Republican control of congress (America’s parliament). As Magellan Financial Group Ltd‘s (ASX: MFG) Hamish Douglass told us in the Australian Financial Review (AFR), this should ensure political stability, whilst also providing a handbrake on the major reform that Democratic president-elect Joe Biden promised in his campaign (which includes large tax rises for corporations).

However, it’s this outcome that I’d like to discuss today.

US Senate elections could move the ASX

See, the US elections aren’t actually over. Well, the presidential election is. But not the concurrent US senate elections. Yes, most of the Senate elections (the third of the Senate seats that were up for re-election anyway) are over. But not all of them. The Senate elections resulted in the Republican Party winning or holding 50 seats, and the Democrats holding 48. Yet there are 100 seats in the chamber.

Under a quirk of America’s patchwork electoral laws, the state of Georgia only allows direct re-election if a candidate wins more than 50% of the vote. And, according to separate reporting in the AFR,  in the elections last week, no candidate crossed this threshold in the 2 Georgia senate seats that were up for re-election. That means that Georgia will hold a runoff election for these 2 senate seats in January. These will be both 2 horse races with a Democratic and a Republican candidate.

Doing some quick maths, if Democrats win both seats up for re-election, both parties will have 50 senate seats. Under the US constitution, the vice-president breaks a 50-50 tie. And as a result of the presidential election last week, Democrat Kamala Harris will become vice-president for 4 years on 20 January 2021, giving Democrats control of the Senate for at least 2 years under this scenario. 

If this were to play out, suddenly this ‘nirvana’ for investors will vanish, and leave the Democrats in theoretical control of both branches of government. So make sure you watch these elections on 5 January next year. If both of these races go to the Democrats, we could well see a shift in sentiment from the market that’s reportedly already priced in 2 years of divided American government.

More reading

• Vaccine hopes cause ASX 200 to rise on Tuesday
• Why the JB Hi-Fi (ASX:JBH) share price is down 7% today
• Why the Immutep (ASX:IMM) share price flew up 5% this morning
• 2 fast-growth ASX tech shares that are being sold off
• ASX 200 up 1.6%: COVID-19 vaccine news sends Flight Centre, NAB, & Qantas surging higher

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) rose by 0.6% today to 6,340 points.

There was one very major piece of news over the past 24 hours:

COVID-19 vaccine news

Global news media is reporting that a vaccine being produced by Pfizer could be 90% effective at stopping COVID-19. Around 44,000 people had been given a trial of the vaccine, and the results are promising when looking at the 94 people who have been infected by COVID-19, according to early results.

This vaccine is actually one of the ones that Australia has signed an agreement about. Federal Health Minister Greg Hunt said: “The data on our vaccine candidates continues to be positive. We will examine the evidence carefully but the latest results are heartening news.”

There are still several steps to bring the vaccine to public, but Pfizer hopes to start production of the vaccine as soon as it can.

Various sectors react

There were some big movements in the ASX 200 as investors tried to decide what this meant for different industries and different businesses.

As you may have guessed, travel businesses went up significantly in response. The Qantas Airways Limited (ASX: QAN) share price went up around 8%, the Sydney Airport Holdings Pty Ltd (ASX: SYD) share price grew by around 10%, the Webjet Limited (ASX: WEB) share price went up 13.5% and the Flight Centre Travel Group Ltd (ASX: FLT) share price rose by around 9%.

The oil sector also had a really strong performance. The Woodside Petroleum Limited (ASX: WPL) share price went up around 7.25%, the Oil Search Limited (ASX: OSH) share price soared up by 16.5%, the Santos Ltd (ASX: STO) share price went up 12.2% and the Beach Energy Ltd (ASX: BPT) share price rose 14.8%.

ASX 200 bank shares also went up a lot today. The National Australia Bank Ltd. (ASX: NAB) share price rose 7.6%, the Westpac Banking Corp (ASX: WBC) share price went up 5.2% and the Australia and New Zealand Banking Grp Ltd (ASX: WBC) share price rose 5% as well.

Shopping centre businesses also saw big increases in their share prices. The Unibail-Rodamco-Westfield (ASX: URW) share price went up 43.5% and the Scentre Group (ASX: SCG) share price rose 14.5%.

Incitec Pivot Ltd (ASX: IPL)

Incitec Pivot reported its FY20 result to the market today. The Incitec share price fell by around 2.8% in response.

The company said that it generated $123 million of statutory net profit after tax, including $65 million of material items relating to writedowns and COVID-19 effects.

Excluding those material items, net profit went up by 23% to $152.4 million and underlying earnings per share (EPS) went up by 15% to 10.9 cents.

Earnings before interest and tax (EBIT) excluding material items rose by 23% to $374.5 million.

In terms of its segments, Dyno Nobel Americas reported that EBIT fell 1% on last year to $230.8 million. Volumes in the explosives business were impacted by structural declines in the coal market as well as temporary COVID-19 restrictions at some customer mining operations.

Meanwhile, Dyno Noble Asia Pacific delivered EBIT of $149.3 million (down 17%). While volumes in the Australian business held up well, according to management, earnings were impacted by the previously announced re-contracting of Moranbah foundation customers, as well as lower earnings from Indonesia.

The company finished with net debt down to $1.03 billion (down from $1.69 billion), largely thanks to the capital raising of $646 million as well as cash generation.

The board of Incitec decided not to pay a dividend because of the COVID-19 uncertainty and the equity raising earlier in the year.

More reading

• Enjoying your ASX 200 gains? Here’s why you should watch out for January
• Why the Sydney Airport (ASX:SYD) share price rocketed 24% higher today
• Zip and Flight Centre were among the most traded shares on the ASX last week
• Why the Unibail (ASX:URW) share price is rocketing 38% higher
• Why the JB Hi-Fi (ASX:JBH) share price is down 7% 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 Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price was a strong performer on Tuesday.

The airport operator’s shares were up as much as 24% to $7.49 in morning trade before giving back some of these gains.

The Sydney Airport share price ultimately ended the day a sizeable 9.5% higher at $6.62.

Why did the Sydney Airport share price take off?

Investors were flooding into the travel sector on Tuesday after US biotech company Pfizer provided an update on its COVID-19 vaccine candidate.

That update revealed that its vaccine candidate was found to be more than 90% effective in preventing COVID-19 in participants without evidence of a prior SARS-CoV-2 infection.

Given that Pfizer believed even 60% to 70% effectiveness would be a good result, these early study results have smashed expectations.

For context, according to the US Centers for Disease Control and Prevention, the overall estimated effectiveness of seasonal influenza vaccines is currently 45%.

Given the success of its phase 3 trials, there is optimism that travel markets could rebound quicker than anticipated. Especially with Pfizer expecting to produce up to 50 million vaccine doses globally in 2020 and then up to 1.3 billion doses in 2021.

The sooner that a working vaccine is successfully rolled out globally, the sooner that Sydney Airport’s terminals will be bustling with travellers again.

How did other travel shares perform?

Unsurprisingly, Sydney Airport wasn’t the only travel share charging higher today. Here’s how other travel shares performed:

• The Corporate Travel Management Ltd (ASX: CTD) share price surged 16% higher to $19.83.
• The Flight Centre Travel Group Ltd (ASX: FLT) share price rose 9% to $15.70.
• The Qantas Airways Limited (ASX: QAN) share price jumped 8% to $5.07.
• The Webjet Limited (ASX: WEB) share price stormed 13.5% higher to $4.86.

More reading

• Zip and Flight Centre were among the most traded shares on the ASX last week
• Why Fletcher Building, Santos, Vitalharvest, & Webjet shares are storming higher
• ASX 200 up 1.6%: COVID-19 vaccine news sends Flight Centre, NAB, & Qantas surging higher
• Flight Centre (ASX:FLT) and Webjet (ASX:WEB) shares surge higher on vaccine news
• ASX 200 to surge higher after Pfizer COVID-19 vaccine success

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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This morning Australia’s leading investment platform provider CommSec released data on the most traded ASX shares on its platform from last week.

A number of familiar faces were popular with investors and filled up the top five over the period.

Here’s the data:

Zip Co Ltd (ASX: Z1P)

Once again, Zip shares were extremely popular with investors last week. The buy now pay later provider was the most traded ASX share and accounted for 2.8% of total trades on the CommSec platform. Approximately 61% of these trades came from the buy side, which helped drive its shares 6.5% higher for the week.

Flight Centre Travel Group Ltd (ASX: FLT)

This travel agent’s shares contributed 2.2% of trades on the platform last week. And while the buying and selling was evenly split, the ones buying will certainly be the happier group. The Flight Centre share price was on fire last week and stormed 24% higher. The catalyst for this appears to have been its annual general meeting update.

Betashares Nasdaq 100 ETF (ASX: NDQ)

This exchange traded fund (ETF) returned to the top five last week after being attributable for 2% of CommSec trades. A whopping 84% of these trades came from buyers. They may have been wanting exposure to the US tech sector following a string of positive quarterly updates.

Westpac Banking Corp (ASX: WBC)

CommSec investors were buying this banking giant’s shares in large numbers last week following its full year results release. Westpac’s shares accounted for 1.7% of trades on the platform. The buying was strong, with 78% of these trades coming from the buy side. They may believe the worst is now behind the bank and it is onwards and upwards from here.

Afterpay Ltd (ASX: APT)

Afterpay shares were popular with investors again last week and were responsible for 1.3% of trades on the CommSec platform. There was more selling than buying, though, with 55% of trades coming from sellers. Despite this, the Afterpay share price climbed 3.4% over the five days.

More reading

• ASX 200 up 1.6%: COVID-19 vaccine news sends Flight Centre, NAB, & Qantas surging higher
• The OFX (ASX:OFX) share price slumps with ASX tech stocks after posting its results
• Flight Centre (ASX:FLT) and Webjet (ASX:WEB) shares surge higher on vaccine news
• The 5 best-performing ASX 200 shares so far this year
• ASX 200 to surge higher after Pfizer COVID-19 vaccine success

James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS and ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS and Flight Centre Travel Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The revelation overnight that a COVID-19 vaccine showed 90% effectiveness in testing sent the share market into wild celebrations overseas and in Australia.

Whether this news from co-makers Pfizer Inc (NYSE: PFE) and BioNTech SE (NASDAQ: BNTX) turns into an actual jab ready for the general population remains to be seen.

Regardless of this, one day the world will move on from the coronavirus. A vaccine will come, a treatment will be developed, or nations will learn to live with it.

So which shares are set for a rally in the post-COVID world?

Trading platform provider IG Group Holdings plc (LON: IGG) analysed what happened in the global financial crisis in the late 2000s. It then combined history with the opinion of 253 hedge fund managers and economic experts for the answer.

The obvious answer

This is not a massive shock, but 73% of the experts picked health and pharmaceutical shares to “increase in value” over the next 12 months.

“The pharma industry in terms of growth opportunities will come in two parts, and this is what comes out of the survey,” IG Group global head of Prime brokerage sales Max Hayden said.

The first part is the short-term race for a COVID-19 vaccine.

“The companies that are working on and will achieve that, obviously are ones to watch for the future.”

Then the second is the long-term potential for ongoing business from keeping COVID-19 at bay.

“Like the flu, COVID-19 is not going away. Pharma companies will have to keep producing and, importantly, refining vaccines for years to come as the virus mutates and proliferates,” read IG’s report COVID-19 vs The Global Financial Crisis.

“This should keep pharma investments strong and, potentially, bring new companies into the spotlight if they can pioneer new COVID-19 vaccines or treatments.”

The more surprising answer

One stark pattern both in the United States and Australia on Tuesday is that while the markets generally shot up like a rocket, technology shares actually sank.

The implication seems to be that a COVID-19 vaccine would eliminate the need for people to work, shop and play from home — therefore technology becomes less important.

Does this seem a bit myopic? IG’s study certainly thinks so.

A healthy 66% of the hedge fund and economics experts surveyed thought tech shares would “increase in value” in the next 12 months.

“Companies with interests in digital technology and remote working should prove to be strong performers over the next five years,” stated the IG report.

“Also, digital companies with fewer physical assets, or ones that are able to embrace the new socially distant, tech-first culture will survive the crisis.”

The virus-ravaged airline and travel sector was picked by 50% of experts as one where stock values would appreciate.

Sector	Experts who thought ‘likely to increase’
Health and pharmaceuticals	73%
Digital technology	66%
Airline and travel	50%
Financial services	46%
Retail	40%
Real estate	38%
Automotive	36%
Cryptocurrencies	23%
Precious metals	18%
Indices	17%
Oil	15%
Currency exchange	13%
Source: IG report COVID-19 vs The Global Financial Crisis Table created by author

 

More reading

• Why the Unibail (ASX:URW) share price is rocketing 38% higher
• Auscann (ASX:AC8) share price climbs higher on sale agreement
• Domain (ASX:DHG) share price tumbles 8% lower on AGM update
• Leading brokers name 3 ASX shares to sell today
• COVID-19 over? Credit and debit card spend surges

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Unibail Rodamco Westfield (ASX: URW) share price is soaring higher today, up 38% in late afternoon trading after posting earlier intraday gains in excess of 44%.

This comes after the company released the results of the votes on 6 resolutions submitted to its shareholders. The results were initially not expected until after the company’s combined general meeting, scheduled for 10 November.

However, due to the COVID-19 pandemic, shareholders voted remotely, and the vote closed early.

Today’s surge will come as welcome news to longer-term shareholders, who watched Unibail’s share price fall by 75% from 2 January through to yesterday’s trading. Even after today’s stellar gains, the share price still remains down 65% in 2020.

What does Unibail Rodamco Westfield do?

Unibail is one of Europe’s largest commercial real estate companies, owning a portfolio of quality retail and office complexes. It has assets in Europe, the United Kingdom and the United States.

Unibail acquired Australian shopping centre operator Westfield Corporation, created by the split of Westfield Group, in 2018. This saw Unibail shares first listing on the ASX. The company makes up part of the S&P/ASX 200 Index (ASX: XJO).

What’s driving the Unibail share price leap up?

In an announcement released to the ASX this morning, Unibail revealed the results of its shareholders’ votes on 6 resolutions put to them.

But it’s likely only one key result that’s really spurring today’s share price gains.

Unibail reported that shareholders had rejected the management board’s resolution to issue ordinary shares with preferential subscription rights. The proposed 3.5 billion euro capital raising was intended to pay down the company’s significant debt obligations, as part of what it calls the ‘RESET’ plan.

While other aspects of the plan – including asset disposals and a reduced cash dividend – can go forward, the capital raising will not.

Addressing the outcome, Group CEO Christophe Cuvillier said:

We take note of the shareholders’ votes expressed in view of the Shareholders’ General Meeting of November 10, notably regarding the proposed capital increase, which did not gather the required two-third majority.

The Group and our industry are going through a period of uncertainty and disruption; the announcement of a possible first global vaccine against COVID-19 is the most recent illustration of this. This medical breakthrough is tremendous news for all and marks a major step in the global fight against the pandemic. Subject to the approval of the next clinical steps, this could have a significant positive impact on retail real estate in general, on URW in particular, especially on our operations and the completion of our disposal plan.

With the capital raising off the radar and a promising potential vaccine in the near-term pipeline, the Unibail share price is one to watch.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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