The Commonwealth Bank of Australia (ASX: CBA) share price has been under pressure over the past two years due to the fallout from the 2018 Royal Commission, which highlighted bad practices and allegations of misconduct. At the time of writing, CBA's share price is $81.83.

Now the big four banks are facing another threat to their business – 'neobanks', a new digital-only way of banking that has no legacy systems or branches. According to the Australian Financial Review (AFR), several of these neobanks have already applied to the Australian Prudential Regulatory Authority (APRA) for full banking licences.

It could just be a matter of time before customers start to make the switch.

Neobanks have a clear target in mind: millennials. Appealing to them with their mobile apps, high introductory interest rates and low costs, the eventual goal is to gain market share in what APRA identifies as a $1.7 trillion home loan market.

The AFR reports that these dynamic start-ups are aiming to provide customers with a more "interactive, intuitive and transparent online experience". If these neobanks qualify for the $250,000 government-funded Authorised Deposit-taking Institutions (ADIs) guarantee (whereby the Australian Government guarantees deposits up to $250,000, should anything happen to the institution), there's a chance that many customers could give neos a try.

Is the CBA share price at risk?  

The traditional banking model in Australia could be under threat following the introduction of neobanks. People's belief in the banking system is already shaky, with many customers showing distrust in the big four banks, including Commonwealth Bank.

So, what does this all mean for the big four banks?

It's hard to say definitively, as it will take time to see the full extent of the neobanks' impact, however, this new category of competitor does represent some risk for banks.

We saw a similar pattern with consumer-friendly home-loan start-ups in the 2000s. Companies like Aussie Home Loans shook up traditional institutions, until the 2008 global financial crisis caused many to collapse.

The difference now is that neobanks can learn from these businesses. Currently, neos are offering limited products to specific audiences.

Competition is normal – it's not something shareholders should fear. Some businesses even thrive on it and improve themselves in the long term. However, the extent of the neobanks' impact all comes down to whether the consumer will trust these start-ups or stay chained to the traditional banking systems.

Foolish takeaway

For those already holding CommBank shares for their above-market dividend yield, this isn't a sign to sell, but it is something to think about.

In good news for shareholders, the neobank market's relatively niche audience, with specific products and demographics, means your holdings in any of the big four banks won't become worthless overnight.

And the banks won't be taking the news of a new competitor laying down. CBA is already combatting this by investing $5 billion over 5 years to deliver a more interactive experience for its 5 million daily logins.

While it's still far too early to make a call about how Commonwealth Bank shares will fare based on this news, investors should keep an eye on the rise of neobanks.

The post Will neobanks hurt the Commonwealth Bank share price?  appeared first on The Motley Fool Australia.

More reading

• Macquarie Group vs Commonwealth Bank: Which ASX bank is the better buy?
• Could CBA shares reach $180 in 2027?
• Down 15% and paying record dividends: Are CBA shares now a good buy for passive income?
• Are BHP, CBA, and CSL shares top buys?
• 3 ASX shares I'd buy for income and growth in retirement

Motley Fool contributor leahfrances 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.

Dividend investing is great for conservative investors looking to increase their capital in stable shares with, hopefully, less risk.

There's a lot of crossover between general success in the share market and success in dividend investing.

The fundamentals are the same. You're still investing in stocks, but your main focus is on the companies that will continue to pay returns to their shareholders.

This means you want to be looking into more of the large-cap bracket. Companies with a detailed dividend history, a good track record, and larger profit margins are more viable options.

Dividend investing essentials

When deciding where to invest when it comes to dividend shares, there are a few fundamentals to consider.

First, do your research.

A key component is a company's dividend yield. Look for companies that have a dividend yield around 5%. Anything too much lower and it becomes harder to see potential returns.

Next, take a detailed look into your company's dividend history.

While past performance isn't an indication of future performance, a good start is to get an idea of a company's overview. How long has this company paid dividends? And is there reasonable growth in them? These are the kinds of things you could consider.

Now that you've researched the history, it's time to look forward. What is the company's projected dividend yield? Note, you cannot predict future dividend payments, but you can look at a company's yearly dividend yield.

A forward dividend yield is the percentage of a corporation's share price that it expects to pay out as dividends to its shareholders, usually over 12 months.

A case study: Is Wesfarmers Ltd (ASX: WES) a good dividend investment?

Let's take a look at this summary of Wesfarmers, and the reasons why it could be a dividend worth investing in.

Wesfarmers is a company offering a diverse range of services, from operating in the retail sector to interests in the mining, manufacturing and insurance industries. At the time of writing, the Wesfarmers share price is $38.84.

It is one of the largest companies on the ASX, with a market cap of $44.67 billion and a dividend yield of 4.52%. In April this year, analysts projected Wesfarmers to have a 12-month yield of around 7.3%.

According to its FY19 results, Wesfarmers' dividend record date is 2 September 2019, with dividends payable by 9 October 2019. Wesfarmers reports full-year ordinary dividend of $1.78 per share, as well as a special dividend of $1.00 per share, for total dividends declared in FY19 of $2.78 per share.

Wesfarmers projects itself as a company committed to providing satisfactory dividends to its shareholders. As a starting point for dividend investors, it has a lot of appeal.

The post How to pick the best ASX dividend shares appeared first on The Motley Fool Australia.

More reading

• Metcash vs Wesfarmers: Which Is Better for Income Investors?
• 3 top ASX dividend shares to target this week for lifelong income
• How much passive income could I make by investing $500 a month in ASX shares?
• ASX retail shares are down 13% in 2026. Here's what Morgan Stanley is worried about
• 3 ASX shares I'd buy for income and growth in retirement

Motley Fool contributor leahfrances has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Wesfarmers 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.

The Splitit Ltd (ASX: SPT) share price closed 3.81% higher on Wednesday at $0.54 and has opened morning trade higher again, sitting at $0.56 at the time of writing. 

At points in Wednesday trade, the Splitit share price traded as high $0.58, up almost 5%. This rise was most likely due to a financing announcement made to the ASX yesterday morning.

The global monthly instalment payments solution business announced that it had signed an agreement with Shaked Partners Fund, aimed at continuing its ability to deliver growth to its funded merchant business model, via an interim finance facility.

The new facility is up to $11.6 million, which could be a contributing factor to the Splitit share price increase. 

Splitit CEO Gil Dan commented: "This new finance facility is flexible and global. It can be utilised by Splitit to help us serve merchants all over the world."

ASX fintech shares on the move

We have seen a real shift in the financial technology industry. It's now moving away from traditional banking tropes and into new financing solutions, where it's back into the hands of the consumers.

With an estimated 400 fintech companies based in Australia alone, it's truly an exciting time for the industry and investors alike.

Pit this against the shift in consumer feelings towards banks, the rise in technology and general investment appetite – and we are seeing an opportunity for fintech shares to emerge.

Following the 2018 Royal Banking Commission, Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB) all suffered losses to their business.  

Buy now and pay later fintech stocks like Splitit could be the key to the banks' survival.

Should you buy Splitit shares? 

The economic climate is proving promising for fintech stocks and investors can expect that this new financing facility will help nurture Splitit's growth plans.

But is that enough for Splitit to spill over into an investment-worthy share?

Well, you should keep in mind that while there's still a lot of growth to be had for fintech companies, there's also risk, which makes Splitit shares prone to future share price shifts.

As with any emerging industry, there might still be a little time yet to figure an appropriate buy price.

The post Why you should keep an eye on the Splitit share price in 2019 appeared first on The Motley Fool Australia.

More reading

• Macquarie Group vs Commonwealth Bank: Which ASX bank is the better buy?
• Sell alert! Why this expert is calling time on Tabcorp and NAB shares
• Could CBA shares reach $180 in 2027?
• Buy, hold, sell: Coles, NAB, CSL shares
• 2 ASX 200 shares to buy and 1 to sell now

Motley Fool contributor leahfrances has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of National Australia Bank 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.

After releasing its 2019 FY results, iron ore producer Fortescue Metals Group Limited (ASX: FMG) has been high on many investors' watchlists.

And that's with good reason.

As a global leader in the iron ore industry, with mining assets in the Pilbara region of Western Australia and a dividend yield of 5.11, it's a stock worth watching.

In its 26 August 2019 report, the group revealed that its mined ore tonnes increased 12% to 206.7 million and processed tonnes increased by 7% to 176.0 million.

It also posted a record underlying earnings before interest, tax, depreciation and amortisation of $6 billion, which is a 90% lift from its previous 2018 results.

Should you buy Fortescue Metals shares?

Overall, it's been pretty smooth sailing for Fortescue Metals since its listing. With many countries bent on growth and building infrastructure, Fortescue's revenue has been gradually rising – which is something many investors might look for in a more reliable mining stock. 

At the time of writing, Fortescue Metals' shares are trading at $8.75 apiece, an increase of 1.74% in morning trade. Over the last month we have seen an upward trend in the company's share price, which has increased more than 21% since Monday 12 August.

Iron ore prices obviously play a big part in a stock like Fortescue Metals' buy status. Supply and demand issues of iron ore and its subsequent price increase have seen Fortescue's average revenue per tonne jump 45% to US$65 per dry metric tonne (dmt), compared to last years US$44/dmt.

This is mainly down to continued strength in benchmark iron ore prices following the supply disruption in the first quarter of 2019 in both Brazil and Australia. 

On top of this, renewed strength in Chinese steel production has risen by 9.9% in 2019HY, which saw an increase in Fortescue's product demands.

What's in it for Fortescue Metals Group shareholders?

You can't look past Fortescue's return for shareholders. Its 2019 growth is clear, with a record fully franked dividends of $1.14 per share, compared to the $0.23 return in 2018FY.

And this is likely to continue, with Fortescue forecasting that through FY20 the company is in a good position to continue to deliver advantages to all stakeholders.

This is good for shareholders, as 2019 results reflect Fortescue Metals' focus on its productivity and efficiency initiatives – a strategy that seems to be working.

The post Why Fortescue Metals shares could be a buy appeared first on The Motley Fool Australia.

More reading

• Woodside Energy vs Fortescue: Which ASX mining share is best for passive income?
• Fortescue shares break a 4-day losing streak as $150 million legal fight heats up
• Sell alert! Why this expert is calling time on Boss Energy and Fortescue shares
• Fortescue shares just hit a 52-week low. Could $16 be next?
• Experts name CBA and these big-name ASX 200 shares as sells this week

Motley Fool contributor leahfrances 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.