Warren Buffett loves to buy businesses with wide economic moats.

A business with a wide economic moat has a durable competitive advantage over its rivals. Possessing a wide economic moat also deters potential competitors from encroaching into its market space and profits. Some examples of such companies that Warren Buffett has invested in are Coca-Cola and Visa.

In Australia's share market, there are also companies with wide economic moats.

Here are three such ASX blue-chip companies:

Commonwealth Bank of Australia (ASX: CBA)

Australia's second-oldest and largest bank has operations spanning across Australia, New Zealand and Asia. It is a leading provider of integrated financial service from retail and business to general insurance and brokerage services.

Over the years, Commonwealth Bank has built a high level of loyalty and trust among its customers. Its robust financial position has seen revenue grow at a 5-year average of around 4% and maintained a steady ROE of about 14% last fiscal year.

Wesfarmers Ltd (ASX: WES)

Wesfarmers is Australia's largest conglomerate with a market cap of $37 billion. It owns a group of leading household names, including Bunnings Warehouse – the biggest hardware chain, Kmart – the leader in discount department stores, and Officeworks – the top office supplies retailer.

Though Wesfarmers growth has slowed in recent years, it still represents one of the strongest fundamentals on the ASX. Currently, Wesfarmers has an ROE of about 11% and a low debt to equity of only 13%. Both figures do better than the industry average.

Scentre Group (ASX: SCG)

Scentre Group owns and operates Westfield Group – the largest portfolio of premium shopping centres in Australia and New Zealand. Most of Westfield operated malls have created a strong presence in the suburbs where they are located.

Scentre's portfolio is currently valued at about $53 billion. Based on its third-quarter update, it has a strong occupancy rate of 99.5%. With Scentre's strong financial position and its well-located malls, it will be difficult for competitors to replicate its success.

The post 3 ASX blue-chip shares that Warren Buffett might like appeared first on The Motley Fool Australia.

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Vroom! The Carsales.com Ltd (ASX: CAR) share price has zoomed ahead with a year-to-date increase of 14%.

Despite the impending write-down of $48 million for its finance arm, Stratton Finance Group, and a recent report of lower new car sales in 2018, the Carsales.com share price has continued to climb.

I believe that the rise in the Carsales share price could be due to investors looking forward to its future earnings.

If Carsales.com is not yet in your portfolio, here are 3 reasons why I think you should add it onto your watchlist.

1. Win-win

Carsales.com has traditionally been an online platform for car dealers to list their fleet of vehicles for sale.

In recent years, we are seeing more individual car owners putting up their own listings on carsales.com. Some car owners believe that they can fetch a higher selling price through their own listing. Others prefer to have more control over the selling process.

With the affordable advertising fee, we may see more individual car owners selling their used vehicles on their own.

This is a win-win situation for both the sellers and Carsales. The platform allows the seller to reach a larger pool of prospective buyers, while more individual seller listings generate more activity and revenue for Carsales.com.

2. Strong branding

Over the years, Carsales has grown to be a major player in the online automotive classified market in Australia. It is now a household name for most Australians.

The company's powerful branding is evident from its strong online presence, customer-centric focus and its on-going expansion into the global automobile classified market.

3. Network effect

A network effect occurs when an increased number of participants or users lead to an increase in the value of a good or service. This is where Carsales.com stands out.

As more people list their vehicles for sale on Carsales.com, more buyers will emerge. This will then lead to even more people listing their vehicles for sale.

This network effect naturally forms an unprecedented competitive advantage for Carsales.com that makes it difficult for competitors to penetrate its market.

Foolish Takeaway

At present, the growth potential of this $3 billion market cap vehicle sales website has no known boundaries. Further expansion beyond its current operation network of Asia Pacific and Brazil will likely bring an increase to its revenue.

The Carsales.com share price is currently trading at price to earnings of about 17 times. I believe it is a good idea to add Carsales.com to your watchlist as a potential future addition to your portfolio. At the moment, I also have REA Group Limited (ASX: REA) and Afterpay Touch Group Ltd (ASX: APT) on my watchlist.

The post 3 reasons why Carsales.com should be on your watchlist appeared first on The Motley Fool Australia.

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Throughout the booms and busts of the share market, the best bargains usually come at a time where pessimism is at its peak.

The late Sir John Templeton, dubbed as the greatest global stock picker of the century by Money Magazine in 1999, once said, "Bull markets are born in pessimism, grow on scepticism, mature on optimism and die on euphoria".

Hence, some might believe that the time of maximum pessimism could be the best time to buy, and the time of maximum optimism could be the best time to sell.

Australian real estate prices fell by 4.8% in 2018 and there is an ever-increasing pessimism in the property market currently. I would think that this is the time to search for potential buys.

These are three ASX shares to watch during the property downturn.

REA Group Limited (ASX: REA)

This garage start-up in 1995 is now a global advertising business focussing on real estate. In Australia, REA owns the leading property listing website, realestate.com.au.

This growth company could see gains from an increase in listings once the property market lifts.

I foresee a surge in listings almost certainly translating into a stronger bottom line and growth for REA Group.

The REA Group share price is now trading at around 38 times its earnings. This growth share has a gross dividend yield of about 2%

Boral Limited (ASX: BLD)

Boral is now actively expanding its footprint in the U.S and gaining exposure to the Asian market with its joint venture partner, USG Corp.

In Australia, it is the largest construction materials and building supplier. I think Boral is well positioned to capitalise on Australia's property market once the dark cloud is lifted.

Boral has a current price to earnings of 13.5 times. Boral's gross dividend yield is at 6.5%.

DuluxGroup Limited (ASX: DLX)

Once the property market recovers, you can expect many properties to go on sale again.

For property sellers, giving your home a fresh coat of paint is one way to make it more attractive to potential buyers, and for many homebuyers, repainting is seen as an essential part of the renovation process.

Hence, DuluxGroup, which owns some of Australia's leading home improvements brands, such as Dulux, Selleys, Cabot's, Yates and British Paints, will no doubt benefit from increased properties sales.

DuluxGroup share price is currently trading at about 18 times its earnings and a gross dividend yield of 5.8%.

Foolish Takeaway

While the property market is still facing headwinds, it is never too early to start looking out for potential buys on the ASX. As long as investors are patient, I am sure they will have the opportunity to capture some bargain buys.

The post 3 ASX shares to watch during the property downturn appeared first on The Motley Fool Australia.

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In a recession, there are services which you can't do without, such as utilities and medical care.

Some cyclical companies could suffer greatly from the effects of a recession, while a defensive one could maintain its profit or even thrive.

I believe that you should never wait for a recession to occur before buying into defensive shares to protect your funds.

Warren Buffett once said:

"Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can't buy what is popular and do well."

So if you want to better protect your portfolio, here are 3 defensive ASX shares to own before a recession:

Spark Infrastructure Group (ASX: SKI)

Will this electricity provider stop serving and charging its customers because of a recession? I don't think so.

Spark Infrastructure is a leading energy network owner and distributor of electricity across New South Wales and Queensland, Victoria and the Australian Capital Territory. It currently owns about $17 billion of energy assets and serves 5.5 million customers.

Spark Infrastructure pays an annual dividend of $0.15, which at its current share price, generates a yield of 6.4%. The only set back is the potential regulatory risk which may restrict its future earnings.

Should a recession occur, I have no doubt that electricity will continue to be delivered to consumers. Likewise, investors will continue to receive a dividend from Spark Infrastructure.

InvoCare Limited (ASX: IVC)

InvoCare is a market leader for funeral services in Australia, New Zealand and Singapore. Despite a lower than expected number of deaths last year, it has continued to grow with acquisitions.

While the funeral home business may not be completely recession-proof, I am certain that a recession will not stop families from giving a proper send-off for their deceased loved ones.

With a price to earnings ratio of 17.63 times, I believe that this undying business could be a good defensive stock addition to your portfolio.

Ramsay Health Care Limited (ASX: RHC)

During a recession, will you avoid going to the hospital for medical treatment? Unlikely.

Ramsay Health Care is one of the largest and well-established private healthcare providers with 480 facilities across 11 countries. A share price target of $60 based on consensus analysts suggests that Ramsay Health Care is fairly valued.

Besides being a defensive business, I think Ramsay Health Care has the potential to grow and expand its services.

Foolish Takeaway

In my view, it is always wise for investors to keep some defensive stocks in their portfolio regardless of the market conditions. In a weak market situation, such as a recession, it's also a good idea to always have ready cash on hand and be prepared to pounce when buying opportunities arise.

The post 3 defensive ASX shares to buy before a recession appeared first on The Motley Fool Australia.

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The S&P/ASX 200 (ASX: XJO) index has made a good start to the year with a solid gain of almost 4%. Beyond this gain, there is still a cloud of uncertainty among investors surrounding the US and China trade tensions and the housing downturn.

Despite these uncertainties, some ASX shares surge ahead and are outperforming the index at the time of writing.

These ASX shares are on the rise:

Harvey Norman Holdings Limited (ASX: HVN)

Last week, a strong momentum drove the Harvey Norman share price higher, and while it's since faltered – falling 3.44% to close at $3.37 today – the Harvey Norman share price is up  6.65% since the start of the year.

Harvey Norman is one of Australia's largest electrical, entertainment and furniture retailer in Australia and has more than 250 stores globally. As reported in FY2018 annual report, Harvey Norman has executed its flagship strategy by creating more flagship stores and complexes that include a larger range of quality brand products and interactive customer experience.

Amid stiffer competition from the increasing online shopping of electrical appliances and furniture, Harvey Norman is evolving its approach to engage customers by offering a better and more holistic shopping experience in their stores.

Harvey Norman is currently trading at 10.9 times of its earnings. This is significantly below its 5-year average of around 16 times. I foresee its share price to rise further in the mid-term.

Bellamy's Australia Ltd (ASX: BAL)

Bellamy's had a challenging 2018 but since the start of this new year, its share price has risen by an impressive 19%.

Despite the increasing global competition, Bellamy's has an established distribution network that enables it to penetrate into new markets such as Vietnam.

Currently, Bellamy's organic products are still experiencing strong demand in China. Though the recent licence extension from General Administration of Customs China (GACC) permits Bellamy's to manufacture infant formula to export to China, it is still awaiting a permit to sell directly in China stores.

I believe that Bellamy's investors will be able to benefit from higher dividends payout and growth in its share price as it penetrates into more new markets. At the moment, Bellamy's is trading at around 19.6 times its earnings.

Other ASX shares that are on the rise include Altium Limited (ASX: ALU), Afterpay Touch Group Ltd (ASX: APT), and Origin Energy Ltd (ASX: ORG).

The post These ASX shares are on the rise so far in 2019 appeared first on The Motley Fool Australia.

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Amid the housing slowdown, the Stockland Corporation Ltd (ASX: SGP) share price has increased by almost 10% in the last three weeks.

Stockland, one of the largest real estate groups in Australia, is in the process of divesting assets to release capital for reinvestment and reshaping its commercial property portfolio.

Recent transactions that took place in the last six months include the sale of Stockland Bathurst Shopping Centre and Stockland South in Caloundra for $113 million and sale of The Grove residential development for $202.5 million.

According to the Managing Director and CEO, Mark Steinert, the proceeds of the sale will strengthen Stockland's balance sheet, enhance workplace and logistics development, and provide funds for securities buyback to allow the company to capitalise on counter-cyclical residential opportunities.

Is management hinting the Stockland share price is undervalued?

Since announcing the intention to buy back shares, Stockland has been actively executing its $350 million shares buyback initiative over the last few months.

Share buybacks can benefit shareholders who hold on to the shares because it increases their percentage of ownership and share prices.

A big fan of share buybacks is none other than Warren Buffett. He believes that the best use of cash is to buy back shares when they are below the business's value.

Based on the current Stockland share price, it is trading at 0.9 times to book value. Most investors believe that a price to book ratio below one indicates that the shares may be undervalued.

Furthermore, Stockland seems fairly valued with a forward price to earnings at 10.4 times as compared to its 5-year average of 14.6 times.

Foolish Takeaway

Stockland has been a consistent dividend paying machine for the last 15 years. It currently has a forward dividend yield of around 7% with the next payment of $0.135 due on 28 February 2019.

I think owning Stockland shares now is a great opportunity for investors who want to put their foot in real estate but find it too capital intensive to own physical properties.

Coupled with Stockland's current PB at 0.9 and its share buyback initiative, I believe it will bode well for investors who plan to own Stockland shares for the long term.

For investors who wish to own shopping centres, it may be worth checking out Scentre Group (ASX: SCG) or Vicinity Centres Re Ltd (ASX: VCX).

The post Is the Stockland share price undervalued? appeared first on The Motley Fool Australia.

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Sell, sell, sell! That seems to be the current market sentiment for the Automotive Holdings Group Ltd (ASX: AHG) share price.

Automotive Holdings share price fell 59% from a 52-week high of $3.71 to close at $1.49 on Wednesday.

So is it time to buy Automotive Holdings Group shares?

The negatives:

According to Australia's largest automotive retailer trading update, consumer confidence has been affected by the property market downturn, and this has led to crawling auto sales.

Slower auto sales will likely mean an increase in the inventory of existing stock. Thus, affecting the cost of operations and put a strain on its revenue growth.

Automotive Holdings management has also provided a lower than anticipated forecast for its FY2019 full-year operating profit of $56 million to $59 million as compared to FY2018 of $74.8 million.

Another factor that could have spooked investors into hitting the sell button on Automotive Holdings shares is the 3% fall in 2018 new car sales figures in Australia.

The positives:

Despite the gloom and doom hovering over Automotive Holdings, I think there are some notable points.

In the last 3 months, Automotive Holdings insiders have been collectively buying back shares worth a total of $353,000.

Managing director John McConnell added in last November's trading update that other sectors of the auto market were stronger, including truck and fleet sales. I believe this could help buffer the impact of falling car sales.

Fundamentally, Automotive Holdings has an established and solid reputation that enables it to represent twenty-seven passenger vehicle brands and nice commercial vehicle and truck brands.

The group holds at least 182 automotive retail franchises at 113 dealership locations. Its refrigerated logistics division is also Australia's largest provider of cold storage services and transport.

I believe, with its diversified nature and scale, Automotive Holdings can weather the car industry downturn.

Automotive Holdings' share price is currently trading at a forward price to earnings (PE) of just 9 times, which is at a significant discount below its 5-year average PE of 12.6 times.

Foolish Takeaway

Based on Automotive Holdings current price to book value of about 0.65 times, I believe that it is now trading undervalue.

Similarly, a share price target of $1.82 based on consensus analysts suggests that Automotive Holdings is undervalued.

I think this could be the period where contrarian investors will start making their move to buy when others are fearful and overreacting in the market.

If you want to own Automotive Holdings shares, I think it'll be wise to adopt a longer-term approach to capitalise on the recovery for the car industry.

The post Is the Automotive Holdings Group share price a buy? appeared first on The Motley Fool Australia.

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ASX shares that trade at a high volume are frequently monitored by investors and traders, with some believing that trading volume can influence changes in the share price.

Here are 3 top volume ASX shares to watch this week:

The Fortescue Metals Group Limited (ASX: FMG) share price had a strong start to the year. It has grown by 13.25% from the first trading day of 2019 and is currently trading at $4.74, up 2.38% for the session.

Fortescue is a global leader in the iron ore industry and has consistently produced about 170 million tonnes of iron ore per annum.

In light of the falling demand for low-grade iron ore, the world's fourth-largest iron ore miner responded with a new higher grade 60.1% iron product, West Pilbara Fines.

The new higher grade iron product could attract a premium of $10 a tonne with a negligible effect on costs.

Fortescue is expected to make its first shipment last December 2018.

I think Fortescue management's awareness of the changing market is notable.

Fortescue's share price is currently trading at 10.3x FY19's estimated earnings. For investors with a long-term approach, I think it looks attractive to dip a toe in now.

The Aurizon Holdings Ltd (ASX: AZJ) share price is up 3.04% since the start of 2019 to its current price of $4.41.

Despite the rise in its share price, Australia's largest rail-based transport business is still plagued by some outstanding issues.

The uncertainty over the final outcome for its latest set of operational undertakings (UT5) has clouded Aurizon's FY19 outlook.

Aurizon's management also expects headwinds in FY2019 with additional investment in coal to enhance reliability and cessation of iron ore contracts in bulk.

Aurizon is currently trading at 17.7x FY19's estimated earnings. I believe its share price may continue to be volatile amid the uncertainties. I will avoid Aurizon's shares for now.

The Telstra Corporation Ltd (ASX: TLS) share price is $2.93 at the time of writing, which is up 2.98% from the start of the year.

Despite achieving a strong subscriber growth in fixed and mobile in FY18, Telstra has seen its year-on-year FY18 earnings per share growth slide by around 7.7%.

In the first retail shareholder information meeting on September 2018, Telstra's management has provided weaker FY19 guidance.

With the half-year results announcement around the corner, I will approach Telstra shares with a wait and see attitude. The Telstra share price is currently trading at 14.23x FY 19's estimated earnings.

The post 3 top volume ASX shares to watch appeared first on The Motley Fool Australia.

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The InvoCare Limited (ASX: IVC) share price is in the red on Thursday, down 1.52% to $11.05 in lunchtime trade.

Although down 30% in the last year, the InvoCare share price soared 11% higher over the past 2 weeks, from a 52 week low of $10.10 on Jan 3, 2019, to close at $11.22 on Wednesday.

Could the InvoCare share price turn around?

2018 wasn't as smooth sailing for Australia's largest funeral operator as it may have foreseen

At the UBS Investor Conference, held in November 2018, Martin Earp – CEO of InvoCare, restated the October trading update that the number of deaths over the winter period was down approximately 6%, further adding that every 1% decline in deaths equates to a $3 million loss in revenue for the funeral business. Any further weakness in the funeral case volume for H2 is expected to impact the bottom line.

Despite the negative exposure, InvoCare's 'Protect and Grow' plan, designed to respond to changing customer needs, saw the company continue to grow its market share.

Between March 2018 and September 2018, InvoCare acquired eight funeral parlours in Australia and three in New Zealand. The acquisitions account for another 2,080 and 1,730 funeral cases in respective countries.

Presently, InvoCare has an estimated market share of 5% in regional/rural areas and 32% in metropolitan areas.

Amid growing competition in the funeral industry, InvoCare's management undertook research to understand the needs of their customers, highlighting the key issue that it's not necessarily the price of the funeral but rather the experience and level of service offered that will determine which provider they choose.

Hence, refurbishing work is currently on-going to inject a modern look, feel and experience into InvoCare's 221 funeral locations. Work is expected to be fully completed by end 2020.

Foolish Takeaway

Life is unpredictable, but when tragedy happens, InvoCare has a chance to benefit. While many investors may avoid this taboo stock, it is one I would like to own because it's an undying business.

Based on the current price, InvoCare's price to earnings is 15.49 times as compared to the industry at 19.19.

Reflecting on a quote by Warren Buffet's Berkshire Hathaway partner, Charlie Munger,

"A great business at a fair price is superior to a fair business at a great price."

I believe this is an opportunity to add another great business to my retirement portfolio.

Two other ASX shares that I am looking for my retirement portfolio are National Australia Bank Ltd (ASX: NAB) and Brickworks Ltd (ASX: BKW).

The post Could the InvoCare share price turn around? appeared first on The Motley Fool Australia.

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The G8 Education Ltd (ASX: GEM) share price has rocketed about 37% higher in the last three months, from a low of $1.88 in October 2018 to close at $2.74 on Tuesday.

Amidst the jubilee of the turnaround, I think it is prudent to ask:

Is the G8 Education share price a buy?

The current upbeat sentiment with G8 Education's share price can be summarised with a quote by Warren Buffett:

"Equities will do well over time — you just have to avoid getting excited when other people are getting excited."

I think the excitement with the recent G8 Education share price run may be unsustainable in the near term. Here's why.

The industry-wide oversupply of child care centres has brought about the dilution of the occupancy rate and has contributed to a slide in profit. Until the oversupply is stemmed, profit is likely to be restrained.

Based on past records, G8 Education revealed slower revenue growth from 70% in 2014 to a mere 2.08% in 2017.

G8 Education's earnings per share for the aforementioned period also retreated in growth, from positive growth of 43.17% to negative growth of 10.89%.

In the 2018 half-yearly report, earnings before interest and tax are reported 20% lower against the 2017 half-year report.

With the reporting season just around the corner, you may want to keep an eye on the upcoming earnings to make a further assessment of G8 Education's growth potential.

G8 Education's dividend payout reduced to 4.5c in October 2018 from 10c per half year in Mar 2018. This has caused further discomfort for income investors.

Foolish Takeaway

The G8 Education share price seems attractive at the current level of around $2.75 versus a year ago when it was trading at $4.55. However, with the looming issues such as the oversupply of child care centres and weak earnings, I think you may want to hold your horses.

Meanwhile, I would suggest you take a look at other discretionary shares such as InvoCare Limited (ASX: IVC) or Aristocrat Leisure Limited (ASX: ALL).

The post 37% higher in 3 months – is the G8 Education share price a buy? appeared first on The Motley Fool Australia.

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The beginning of a new year is a time when many people look to rebalance their portfolio. The act of rebalancing allows us to better position our portfolio for greater potential profits.

Here's why I'm holding on to Wesfarmers Ltd (ASX: WES) shares in my portfolio in 2019.

Wesfarmers recently divested Coles Group Ltd (ASX: COL) and sold its 40% stake in its Bengalla joint venture. The sales will allow Wesfarmers to focus on its higher growth areas and position itself for new acquisitions.

Wesfarmers still holds a sturdy group of retailers including Bunnings Warehouse, Officeworks, Kmart, and Target, even after divesting Coles.

Bunnings

In recent years, Bunnings Warehouse has been the star performer for Wesfarmers. In FY2018, year ended 30 June, Bunnings Warehouse achieved strong same-store sales growth of 8.9% and an increase in earnings before interest and tax (EBIT) of 12.7%. Wesfarmers' management is optimistic and expects Bunnings Warehouse to continue its growth in 2019.

Officeworks

Officeworks has achieved steady growth over the past decade and in FY2018, its EBIT grew by 8.3%. Officeworks has further plans to expand in FY2019 with six new stores, online enhancements, and a focus on its B2B segment.

Kmart and Target

Kmart and Target combined achieved EBIT growth of 21.5% in FY2018, the highest growth rate out of all of Wesfarmers' group of retailers. The EBIT growth for Kmart and Target was mainly driven by stronger sales growth for Kmart during the period.

Unfortunately, Wesfarmers' on Monday announced in the most recent trading update that comparable store sales for Kmart are likely to decline 0.6% in the half-year ending December 31, 2018. The sales growth was impacted by the weaker Christmas sales, planned exit of low margin DVDs, and weaker apparel sales, particularly in womenswear.

I believe Target, which is reinventing its business model to increase revenue, together with Kmart will certainly keep Wesfarmers' management on their toes.

Wesfarmers' share price is now trading at about 15 times estimated earnings for FY2019.

Foolish Takeaway

Bunnings, Kmart, Target, and Officeworks have established themselves firmly as household brands in Australia. Despite the recent setback for Kmart in sales, I believe it may just be a glitch before Kmart resumes its growth.

Overall, I believe that Wesfarmers has set itself up for a positive long-term growth outlook with its 'new-look' business portfolio. For long-term growth potential for my portfolio, I'm holding my Wesfarmers shares.

The post Why I'm holding on to my Wesfarmers shares in 2019 appeared first on The Motley Fool Australia.

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In spite of the lack of news after its third-quarter update in November 2018, the Scentre Group (ASX: SCG) share price has grown by 5% since the start of 2019.

Is the Scentre Group share price a buy?

I believe so. Here's why.

Scentre Group owns and operates Westfield, the operator of some of the largest shopping centres in Australia and New Zealand. Scentre's current portfolio comprises 41 high-quality shopping centres and its assets are valued at $53.4 billion.

One significant factor to the bottom line of every shopping centre is its occupancy rate. Despite headwinds from e-commerce, Scentre's Westfield shopping centres have maintained above 99.5% occupancy rate as reported in the third-quarter update.

Scentre Group's share price is now trading at about 0.92 times price to book (P/B ratio). The P/B ratio measures a company's market price in relation to its book value. It shows how much investors pay for what would remain if the company goes bust immediately. A P/B ratio below 1 denotes that the Scentre Group share price may be undervalued.

Despite having a strong financial position with gearing of 32.1% and interest cover of 3.6 times now, Scentre's maturing debts and its management's ability to refinance its loan in 2020 is a matter to keep an eye on.

Foolish Takeaway

I like owning a stable and cash generating business such as Scentre Group. Furthermore, the idea of owning a piece of 41 high-quality shopping centres in Australia and New Zealand adds icing to the cake.

Scentre Group has an estimated forward annual dividend yield of 5.4% while its peers Vicinity Centres Re Ltd (ASX: VCX), which manages $27 billion in retail assets, and Charter Hall Group (ASX: CHC), which holds a $6.1 billion Australian retail portfolio, have dividend yields of 6.02% and 4.4% respectively.

Though its dividend payout may not be as attractive as compared to some of its peers now, having a P/B below 1 could be attractive to some investors wanting to dip a toe in. As every coin has two sides, I will be watchful on how Scentre's management manages their maturing debts.

The post Why I think the Scentre Group share price is a buy appeared first on The Motley Fool Australia.

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The Aristocrat Leisure Limited (ASX: ALL) share price has tumbled 25% lower over the last six months and is currently trading toward the bottom end of its 52-week range.

At the time of writing, the Aristocrat share price is trading at $23.32, sitting 3.12% higher for the session.

Aristocrat Leisure is a leading global provider of gaming solutions that offer products and services, including electronic gaming machines, digital gaming and casino management system.

In early 2018, Aristocrat grew organically through the acquisition of Israel's Plarium, a social game developer, and US company Big Fish, a casual game developer. Both acquisitions are expected to contribute significantly to Aristocrat's bottom line. Hence, higher growth expectation drove Aristocrat Leisure's share price up to an all-time high of $33.06 in July 2018.

Aristocrat Leisure reported a 47.7% increase in revenue and 9.6% increase in net profit in FY 2018. The impressive results were driven by growth in the Americas, ANZ, and Digital.

Management added that Plarium and Big Fish have significantly increased Aristocrat's presence in the high-growth social game market. The acquisitions contributed substantially to the digital segment earnings with year-on-year growth of 172.5%. The digital segment now represents 27% of Aristocrat's overall profit.

After achieving record year-on-year growth, Aristocrat anticipates continued growth in 2019 but warned that FY2019 earnings are expected to be skewed to the second half.

I believe that the uncertain outlook is a major factor contributing to the recent decline in Aristocrat's share price.

Foolish takeaway

Given the uncertain outlook, Aristocrat's five-year average earnings per share (EPS) growth of 38% is notable. In comparison, its peers such as Tabcorp Holdings Limited (ASX: TAH) and Crown Resorts Ltd (ASX: CWN) have a five-year average EPS growth of -35% and 8.35% respectively.

The Aristocrat share price is now trading at 24.8 times earnings, compared to the average gaming and gambling industry price-to-earnings of 43.8 times.

Even though the short-term outlook is cloudy, investors with patience and a long-term view could do well given Aristocrat's current strong fundamentals and high growth.

The post Why the Aristocrat Leisure share price has fallen 25% in the last 6 months appeared first on The Motley Fool Australia.

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