You do not need to pick individual stocks straight away. You do not need to forecast earnings next quarter. And you definitely do not need to trade every week.

Exchange-traded funds (ETFs) can provide instant diversification and exposure to global markets with a single trade.

With that in mind, here are three ASX ETFs that could make sense for beginner investors in March and beyond.

iShares S&P 500 ETF (ASX: IVV)

The first ETF for beginner investors to consider buying is the iShares S&P 500 ETF.

This fund tracks the famous S&P 500 index, giving investors exposure to 500 of the largest stocks in the United States. That includes businesses such as Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), and Walmart (NYSE: WMT).

Rather than trying to pick which US stock will perform best, this ASX ETF spreads your investment across the broad US market. The S&P 500 index has historically delivered strong long-term returns, supported by innovation, corporate profitability, and economic growth.

For beginners, this type of broad exposure can provide a solid foundation.

Betashares Australian Quality ETF (ASX: AQLT)

If you want exposure closer to home, the Betashares Australian Quality ETF could be worth a look.

This ASX ETF focuses on high-quality Australian shares that boast strong balance sheets, stable earnings, and high return on equity. It aims to tilt towards the best businesses rather than simply tracking the market.

Holdings often include established names with durable competitive positions and solid financial metrics.

For a new investor, a quality-focused approach can reduce exposure to weaker businesses and provide a smoother ride over time. This fund was recently recommended to clients by analysts at Betashares.

VanEck Morningstar Wide Moat AUD ETF (ASX: MOAT)

Another beginner-friendly option is the VanEck Morningstar Wide Moat AUD ETF.

This ASX ETF invests in US stocks that have sustainable competitive advantages. These advantages can include brand strength, intellectual property, or cost leadership.

Its holdings change periodically but currently include shares such as United Parcel Service (NYSE: UPS), Bristol-Myers Squibb (NYSE: BMY), and Huntington Ingalls Industries (NYSE: HII).

Instead of chasing fast-growing but speculative businesses, this fund focuses on shares that can defend their profits over the long term. This has proven to be a highly successful strategy for legendary investor Warren Buffett. And it is never a bad idea for beginners to follow in his footsteps.

The post 3 ASX ETFs for beginner investors to buy in March appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

There are a few things that United Parcel Service (NYSE: UPS), Walt Disney (NYSE: DIS), and Ford Motor Company (NYSE: F) have in common. They are Wall Street juggernauts, components of the S&P 500. The stocks all pay a dividend; two of the three currently top a 5% yield.

They're also out of favor. UPS, Disney, and Ford are trading 22%, 28%, and 29% below their 52-week highs. Stretch out the timeline, and the three stocks are trading 45% to 60% below their all-time highs set in either 2021 or 2022. This isn't a problem. It's an opportunity. Let's dive into why these are three great dividend-paying S&P 500 stocks that you can hold for the long haul.

1. United Parcel Service

Brown has been more black and blue lately. The provider of parcel delivery and supply chain solutions saw its revenue slide 9% to $91 billion last year. Profitability took an even bigger hit.

The near-term challenges are real. Striking a five-year deal with the UPS Teamsters union last summer locks its workforce in place through mid-2028, but it comes at the expense of a margin-gnawing spike in labor costs over the past year. The increases will continue through the next four years, but it will be more manageable.

It's no fun when an income statement is burning at both ends, and this could be particularly problematic for income investors. UPS has increased its quarterly distributions for 15 consecutive years. The rising payouts and shrinking share price find the shares yielding 5% right now. Is this sustainable if business continues to contract as expenses keep expanding?

This doesn't have to be an accordion of cacophony. UPS rolled out layoffs earlier this week after a much larger sea of pink slips earlier this year. Analysts see a return to revenue growth in the second half of this year, followed by a bottom-line recovery in 2025. If they're right, UPS will have wiggle room to keep its streak of dividend hikes coming. You can also pick up UPS at a reasonable 14 times next year's projected earnings.

2. Disney

Another household name with an attractively depressed share price is Disney. The media stock is moving lower for the sixth consecutive month. You can buy Disney for less than 19 times forward earnings.

There are a lot of things going well for the company, despite its stock chart going the other way. Disney returned to box office dominance this summer with the world's two highest-grossing films of 2024, and it has two movies coming out over the holidays that should fare even better. Disney+ is finally profitable. There are some near-term hiccups at its theme parks and a more long-lasting problem with its legacy media networks, but the sum of all of these mouse parts points to healthy growth in the near future.

Disney's current yield of 1% is much lower than the other names on this list, but the entertainment bellwether did boost its semiannual distributions by 50% earlier this year. The bullish play here will still be in the form of capital appreciation over dividend checks.

3. Ford

The highest yield and lowest earnings multiple on the list belongs to Ford, but let's start with a brake check. Growth has slowed to single-digit upticks at the automaker for three consecutive quarters. Trading at a P/E ratio of 11 sounds great until you realize that it's based on its market cap of $42 billion. Ford's enterprise value is $168 billion once you consider its debt.

The car market is cyclical, and Ford is struggling to get the balance right between its electric vehicles and its more traditional rides. The current 5.7% yield will reward patient investors, but the hefty disbursements are at the mercy of Ford stepping on the accelerator again and controlling costs. Analysts see flat revenue and earnings growth for Ford next year, and we know how drivers feel about flats. The bullish catalyst here is that falling interest rates could spur fresh interest in big-ticket purchases. Aren't you due for a new car? Ford hopes that you turn to the iconic car manufacturer.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Analysts at ANZ Group Holdings Ltd (ASX: ANZ) are tipping the US Fed to raise rates at a meeting later this week.

The S&P 500 Index (SP: .INX) slid 1.3% overnight, the Dow Jones Industrial Average (DJX: .DJI)slipped 0.77% and the Nasdaq Composite Index (NASDAQ: .IXIC) slipped 1.96% on Monday, US time.

What's ahead?

ANZ highlighted it is a "big week for both central banks and US equities" in a research report released this morning.

Among the US stocks due to report earnings are Apple Inc (NASDAQ: AAPL), Meta Platforms Inc (NASDAQ: META), Caterpillar Inc (NYSE: CAT), McDonald's Corp (NYSE: MCD), General Motors Company (NYSE: GM), United Parcel Service Inc (NYSE: UPS) and Alphabet Inc Class A (NASDAQ: GOOGL).

ANZ senior economist Felicity Emmett said these earnings announcements will provide a "micro overview of the macro economy". She added:

Investors bought into the 'soft landing' view in early 2023, despite the prospect of what could still be a bumpy ride for activity as the lagged effects of last year's interest rates front-loading and still-high inflation bite. 

Meanwhile, the United States Federal Open Market Committee (FOMC) is due to announce an interest rate decision on Thursday morning, Sydney time. ANZ is forecasting a 0.25% rate rise.

Commenting on this outlook, ANZ's Emmett said:

We expect a 25bp rate rise and anticipate that the Fed will caution against an early pause in the tightening cycle and certainly give the notion of cuts no rein.

Risk appetite could be vulnerable to a correction.

US stock market snapshot

Meta shares fell 3% on Monday and have shed 53% in the last year.

Apple Inc (NASDAQ: AAPL) shares lost 2% on Monday and have slid 18% in the last year.

Alphabet shares slid 2.74% on Monday and have tumbled 28% in the past year.

McDonalds shares dropped 0.58% on Monday but have climbed 4.41% in the last 52 weeks.

General Motors shares shed 4.37% on Monday and have slumped 31% in the last year.

Caterpillar shares fell 1.11% on Monday but have soared 29.74% in the past year.

The United Parcel Service share price lost 2.81% on Monday and has slid 12.48% in the last year.

Meanwhile, the S&P 500 Index has shed 11% in the last year, while the Dow Jones has lost 4% in a year and the Nasdaq Composite has shed nearly 20% in the past 12 months.

The post What to watch on the US stock market this week: ANZ appeared first on The Motley Fool Australia.

The stock market sell-off has compressed the valuations of good and bad businesses alike. All three major indexes -- the S&P 500, the Dow Jones Industrial Average, and the Nasdaq Composite -- are in a bear market. And while it may be tempting to go bottom fishing by scooping up shares of stocks that are down big off their highs, the safer and potentially more rewarding route is to simply stick with top companies that stand out from the competition.

Investors categorize stocks into buckets -- like growth stocks versus value or dividend stocks. But no matter the size of the company or its industry, there's one key trait that all top stocks share: consistency. Here's why investing in consistent companies can be an excellent strategy for outlasting a prolonged bear market.   

Setting expectations

Consistency can take different forms depending on the company. But as a rule of thumb, consistent businesses are those that bridge the gap between expectations, financial goals, and real results.

As a recent example, FedEx's (NYSE: FDX) inability to forecast accurately caused the largest single-day percentage stock decline in company history. The shipping specialist's upbeat tone and record guidance from late June proved to be way off base after it called for lower-than-expected first-half fiscal 2023 results and failed to provide full-year fiscal 2023 guidance.

FedEx has a track record of inconsistency that dates back to the peak of the U.S.-China trade war in 2018, when the company produced lower-than-expected results and routinely missed guidance. FedEx may be an inexpensive stock with a decent dividend yield. And it could even be a nice turnaround play. But it is far less consistent than its peer, United Parcel Service (NYSE: UPS).     

UPS has a better track record than FedEx of hitting its financial guidance, navigating challenges, and deploying capital efficiently without overspending. The package delivery industry is cyclical and capital-intensive. UPS and FedEx depend on a blend of business-to-business and business-to-consumer deliveries to domestic and international buyers. Both companies sport incredibly sophisticated supply chains, logistics, and distribution networks. Labor and fuel costs are high, making forecasting an essential quality of a good package delivery company. No one has a crystal ball. But being roughly right when it comes to accurately predicting buyer behavior separates an excellent package delivery company like UPS from an OK one like FedEx.

In sum, the main differentiating factor between these two companies isn't their dividend yields, valuation, or even a year's worth of revenue or earnings. Rather, it is the ability of UPS to better leverage its resources and capital to execute on goals and limit disappointing shareholders. 

Delivering on long-term targets

Another core trait of consistent companies is their ability to deliver on long-term targets. For some companies, that could simply mean growing the dividend and supporting it with free cash flow (FCF) or sustaining a high profit margin while growing the top line. For others, it could mean bringing a new product or service to market and increasing customer adoption and retention.

Apple (NASDAQ: AAPL) is an excellent example of a company that has delivered on its long-term targets. It wasn't long ago that investors questioned the feasibility of Apple's wearables, its penetration into wireless earbuds, its ability to continue generating growth from its phones and computers, and the establishment of its services segment. Apple has proven that it has arguably the strongest consumer electronic product ecosystem of any company in the world. Its ability to make new versions of its flagship products while also integrating new products and services into the ecosystem has led to sustained growth, high margins, efficient use of capital, and outsized profits.

Apple has shown that despite its size, it can still grow quickly and drive shareholder value through organic growth and boosting earnings per share through buybacks. The below chart says it all.

AAPL Shares Outstanding data by YCharts

In just five years, Apple has more than doubled its net income and reduced its outstanding share count by a staggering 21.6%. Apple's ability to reinvest capital efficiently in its business and still have plenty of dry powder to buy back its own stock is a testament to the success it has had with hitting its long-term goals of product innovation and vertically integrating its business with both hardware and software. Companies a fraction of the size of Apple tend to have trouble growing profits at a faster rate than revenue. But Apple's ability to drive profits at a faster rate than sales is an example of its pricing power and loyal customer base. 

Profiles in consistency

UPS and Apple are just two examples of the many consistent companies that are on sale now. Although they are in different industries and have little in common as companies, they are very similar investments. At the end of the day, long-term investing aims to find companies that can continue delivering growth over time.

For UPS, growth results in a larger dividend, the expansion of routes and services, and branching into new markets such as healthcare and automotive. 

In Apple's case, growth results in share buybacks, product development, and expanding its ecosystem to retain existing customers, boost revenue per customer, and attract new customers into the ecosystem. 

By understanding what consistency looks like, an investor can put their hard-earned savings to work in quality companies no matter the industry.      

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post The no. 1 quality that top stocks share (and it's not even close) appeared first on The Motley Fool Australia.

A month after Amazon.com Inc (NASDAQ: AMZN) began outfitting its vans with new surveillance cameras equipped with artificial intelligence (AI) to keep a watchful eye on its drivers, the company is reportedly demanding that its drivers either agree to be monitored biometrically while in the vans or get fired.

Motherboard, a tech news website, reports that 75,000 US delivery drivers, as a condition of employment, are being given a consent form to sign acknowledging they agree to facial recognition and the collection of biometric data while driving company-branded vans. Amazon says the cameras are to improve driver safety.

The consent form says that to deliver packages, drivers must agree to have the vehicle tracked for location, movement, speed, acceleration, braking, turns, following distance, and more.

Earlier this year, Amazon posted a video to Vimeo to alert its delivery contractors it was installing Netradyne Driver-i cameras in its branded delivery vans, giving it a 270-degree view to monitor drivers and detect potentially risky behaviour. Incidents that trigger the cameras, such as running a stop sign or taking a corner too hard, are uploaded to Amazon's cloud for review.

Motherboard reports the onboard AI can detect if a driver yawns, appears distracted, or isn't wearing a seatbelt. Because of the intrusive nature of the surveillance, drivers are reportedly quitting rather than be constantly monitored. Congress has also recently questioned Amazon about its concerns over driver privacy.

Amazon Logistics delivered around 5.1 billion packages in 2020, which was just slightly fewer than the 5.3 billion that United Parcel Service Inc (NYSE: UPS) delivered, and half the total volume of all packages delivered for Amazon last year.

Most Amazon drivers don't actually work for the company. Instead, they are employed by third-party contractors that Amazon encouraged to start their own delivery business through its delivery service partner (DSP) program.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Amazon reportedly demands that delivery drivers submit to invasive biometric surveillance or be fired appeared first on The Motley Fool Australia.

Tesla (NASDAQ: TSLA) popularised the electric car, turning a niche product into a mark of distinction and "green" credentials for consumers. Will Amazon.com (NASDAQ: AMZN) do the same for retailers?

On Tuesday, Amazon's blog featured something of a surprising announcement. Hidden deep within "a sprawling industrial complex in Michigan," Amazon technicians working in cooperation with electric start-up Rivian are hard at work developing "the next generation of Amazon delivery vans -- electric-powered vehicles that will hit the roads beginning in 2021."  

Amazon has a strong incentive to make this project a success, as it works to wring costs out of its business model by eschewing third-party delivery services such as FedEx (NYSE: FDX) and UPS (NYSE: UPS), and delivering its packages to consumers itself. Sure, Amazon is playing up a secondary goal, promising that "100,000 electric delivery vans will save millions of metric tons of carbon per year." But the real goal here is to remove every expense it can, drive prices lower, and squeeze every possible penny of profit out of its 5.1% operating profit margin.

Hold up a sec. Go back. Did I just say "100,000 electric delivery vans?"

Indeed I did. And that's arguably even the bigger story here. Bigger than Amazon's costs. Bigger than its "green" credentials. When Amazon gets its electric delivery van fleet fully deployed a few years from now, it will have more delivery vans in service than FedEx Express has in service (84,700 according to Statista). It will have nearly as many vans as UPS has "cars, vans, tractors, and motorcycles" -- 123,000 according to UPS.  

Amazon's becoming a major player in delivery -- and it's all beginning in Michigan.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post How Amazon.com plans to add electric vehicles to its delivery fleet appeared first on The Motley Fool Australia.

Amazon.com (NASDAQ: AMZN) will report earnings Thursday, Oct. 24, at an interesting time for the company and the stock. Though Amazon has been a tremendous winner for investors over the years, the stock has been quite the laggard over the past year or so. While the market is currently very close to a record high, Amazon is over 10% lower than its all-time high all the way back in the late summer of 2018.

Since the stock is reflecting investor concerns, I'll be homing in on a few hot topics in the upcoming report. Amazon is now a sprawling conglomerate encompassing many businesses beyond just its core e-commerce business, so here are the most important aspects I'll be watching.

AWS growth rate and margin

A large part of the reason to own Amazon's stock isn't its e-commerce business, but rather Amazon Web Services (AWS), which made up about two-thirds of Amazon's operating income last quarter. Though AWS makes up only around 13% of Amazon's revenue, its high profitability, sticky recurring-revenue business model, and high profitability make it arguably the company's most valuable segment.

Last quarter, AWS reported 37% growth, which is terrific by itself, but it did mark a significant deceleration from the 49% growth in the year-ago quarter. In addition, operating margin fell from 26.9% to 25.3% year over year. The segment will be coming up against tough comps from the year-ago quarter, in which AWS grew 46% and had an all-time high operating margin of 31.1%.

One shouldn't immediately react to the headline operating margin, however, without listening to Amazon's commentary. Last quarter, management explained that it had invested heavily in AWS, adding significant personnel to its marketing team, and also grew AWS's technical personnel at twice the rate of the overall company. These investments ate into the margin, but Amazon's investments usually pay off in the long run. Therefore, investors should pay attention to management's commentary on AWS's operating margins and investments in addition to the headline numbers.

North American retail acceleration

While AWS had been decelerating, Amazon's more mature North American retail business accelerated last quarter. The company's new one-day shipping initiative helped, and it was recently supplemented by Amazon's decision to add items as low as $1 to its Prime free shipping service.

These new customer-friendly benefits spurred the North American segment to accelerate to 20% growth, up from the prior quarter's 17%. The reacceleration came from both the online stores segment, which accelerated from 12% to 16% growth, and third-party sellers, whose growth accelerated from 23% to 25%.

Investors should watch to see whether that acceleration can continue, or at least if these growth rates can maintain their high levels.

Third-party controversies

Speaking of third-party sales, Amazon's third-party platform has been under fire recently. In August, an in-depth article in The Wall Street Journal (subscription required) highlighted the proliferation of faulty and/or counterfeit products that come from third-party vendors on Amazon's platform.

If this point comes up on the call, I'll be listening for whether the company is taking steps to police its massive platform. And of course, investors should monitor whether negative publicity affected third-party sales growth.

Shipping With Amazon

Finally, I'll also be watching for any commentary around Shipping With Amazon, the company's new initiative to ship third-party goods through Amazon's logistics system. Some believe this new service could pose a threat to FedEx (NYSE: FDX) and UPS (NYSE: UPS). FedEx itself reported quite negative results in its recent earnings release, though there is some debate over how much of the shortfall, if any, can be attributed to Amazon's nascent program, or FedEx's recent decision to cut ties with the e-commerce giant.

Amazon has also begun delivering an increasing percentage of its own packages. According to Rakuten, Amazon has gone from shipping 15% of its packages in early 2017 to around 50% today. On the upcoming release, I'll be watching for any more information regarding how many customers Amazon has picked up for Shipping With Amazon, and also what percentage of packages Amazon is shipping through its own logistics infrastructure.

Taking more shipping in-house should have a positive effect on Amazon's North American margin, but shipping costs accelerated to 36% growth last quarter, ahead of North American sales growth. A lot of that had to do with the one-day shipping initiative, however. Either way, investors should zero in on whether management can break down the puts and takes between the one-day shipping headwinds and vertical integration tailwinds with regard to its shipping costs.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Amazon's cloud computing and shipping progress will be key to Q3 earnings appeared first on The Motley Fool Australia.