Do you have some cash to invest? There could be some ASX shares that may be worth a spot on your watchlist.
Pushpay Holdings Ltd (ASX: PPH)
Pushpay is an ASX technology business that facilitates electronic donations. Its main client base is large and medium churches in the United States.
The ASX share is tapping into the global shift of payments from cash to digital. This is particularly noticeable during this COVID-19 period of restrictions and social distancing. Indeed, the US is currently seeing record numbers of COVID-19 cases, hospitalisations and deaths.
Pushpay is aiming for US$1 billion of annual revenue from the church sector whilst it progresses towards market leadership.
The growth of revenue is coming with increasing profit margins. In the FY21 half-year result it reported that its gross profit margin went up from 65% to 68%. This means that more of the revenue will fall to the next line of profit like a waterfall.
In a recent presentation, Pushpay pointed out that it can expand to smaller Catholic churches as well as different denomination groups and other donation sectors and geographies.
Pushpay recently upgraded its guidance to say that earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) is now expected to be in a range of between US$54 million to US$58 million.
At the current Pushpay share price, it’s priced at 24x FY23’s estimated earnings.
Kogan.com Ltd (ASX: KGN)
Kogan.com is another ASX share that’s in the technology space and is experiencing stronger demand partly because of physical retail impacts.
In FY20 it grew gross sales by 39.3% to $768.9 million. In the annual general meeting (AGM) update it said that gross sales increased by 99.8% in the first four months of FY21.
Kogan.com is another business that can demonstrate growing operating leverage as it gets bigger. In FY17 it had an EBITDA margin of 4.3%, in FY18 it had an EBITDA margin of 6.3%, in FY19 the margin was 6.9% and in FY20 the margin was 9.3%.
The ASX share continues to invest in areas that it thinks will increase the efficiency and margins of the business, whilst continuing to serve the customer and grow profit.
It announced this week that it’s going to acquire the Mighty Ape online retail business which is based in New Zealand. Kogan.com is paying AU$122.4 million for the business which is expected to generate AU$14.3 million of EBITDA in FY21 (which would be growth of 254.1% compared to FY20).
At the current Kogan.com share price it’s valued at 27x FY23’s estimated earnings.
Brickworks Limited (ASX: BKW)
Brickworks is the biggest brickmaker in Australia. It’s currently experiencing a recovery in the Australian construction market after the impacts of COVID-19 earlier in 2020.
However, the part of the business that has been grabbing the most attention in recent times has been the industrial property trust that it owns 50% of, along with Goodman Group (ASX: GMG).
This property trust is currently constructing two very large distribution warehouses for Amazon and Coles Group Ltd (ASX: COL). Once these are completed, it’s expected to increase the gross assets of the trust to more than $3 billion. These new warehouses are also expected to increase the rental profit distributions by at least 25%. This in turn will provide more cashflow for Brickworks to pay dividends to shareholders.
It hasn’t cut the dividend in over 40 years and its dividend is entirely funded by the distributions from the property trust and the dividends from its large shareholding of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shares.
At the current Brickworks share price it’s valued at 19x FY21’s estimated earnings. It also has a trailing grossed-up dividend yield of 4.3%.