We are two thirds of the way through Dry July. Whether you are participating for health or charitable reasons, completing Dry July can be a challenge. Rewarding yourself for completing difficult tasks feels great and alcohol is expensive. So why not boost your ASX share portfolio with all of the extra cash you have saved instead! So, on that note, here are two food and beverage related ASX shares that can help you power through the rest of Dry July.
2 ASX shares to buy in Dry July
Treasury Wine Estates Ltd (ASX: TWE) – Why Dry July is so hard!
Treasury has been a great producer of wines and an even better ASX share to buy (unless you happened to buy right before the pandemic hit!). Over the last 5 years, the Treasury Wine share price has had a compound annual growth rate (CAGR) total return (including capital growth and dividends) of 18.85% per annum. Shares currently trade on a price-to-earnings (P/E ratio) of about 19.5x earnings and a dividend yield of 3.6%.
The share price is down 37% since 24 January, which could present a nice entry point for long-term investors. The company provided a business update on 9 July, which was the first for new CEO, Tim Ford, who commenced the role on 1 July 2020. Preliminary FY20 performance shows EBITS of between $530 and $540 million, representing a 21% decline against the prior year. Management were cautious in the short to medium term given social gathering restrictions internationally.
As a business directly impacted by COVID-19, with international diversification including Asia and the United States, the Treasury Wine share price could be volatile. But, it would be nice to crack open a bottle of wine in August and pay yourself at the same time!
Rural Funds Group (ASX: RFF) – The agricultural land play
The Rural Funds share price has doubled over the last 5 years. Add in dividends and the stock has grown by a CAGR of 18.71% per annum over the half decade. Shares currently trade on a P/E ratio of about 15.4x earnings and a distribution yield of 4.1%. Rural Funds has guided for an FY21 distribution of 11.28 cents per unit, or an even better yield of 5.5%.
This ASX share is a great option for investors who need a secure dividend. The business currently has a weighted average lease expiry of 11.5 years.
Over the long term, the value of agricultural land should appreciate. As the Australian and worldwide population grows, and the middle class of developing countries like China and India boom, the need and desire for fresh produce will increase. Insider Michael Carroll believes in the business, with a recent acquisition of 124,862 shares at $2 per unit.
Foolish bottom line
Over the long term, high quality ASX shares should continue to be a life changing asset to own.
Congratulations to everyone doing Dry July. Treat yourself with some ASX shares now, don’t wait for a drink in August!
Where to invest $1,000 right now
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Motley Fool contributor Lloyd Prout has no position in any of the stocks mentioned and expresses his own opinions. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED and Treasury Wine Estates 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.