Two ASX 200 retail shares tipped as Federal budget winners

ASX 200 retail shares stand to be among the big beneficiaries of the Federal budget’s tax cuts. We take a closer look.
The post Two ASX 200 retail shares tipped as Federal budget winners appeared first on The Motley Fool Australia. –

A happy shopper lifts her bags high, indicating a rising share price in ASX retail companies

S&P/ASX 200 Index (ASX: XJO) retail shares stand to be among the big beneficiaries of the new Federal budget, according to one fund manager.

The budget, unveiled last week, is widely seen as offering something to almost everyone… except for Australia’s future taxpayers.

Indeed, the government is opening the spending taps wide. So wide, that AMP Capital’s chief economist, Shane Oliver, estimates total government spending (spent and projected) since the early days of the COVID-19 outbreak has now hit around $350 billion. (More budget coverage here.)

Commenting on the Federal budget, Ophir Asset Management senior portfolio manager Andrew Mitchell said (quoted by the Australian Financial Review):

It was certainly a spendathon, and the Frydenberg treasury will likely go down as one of the biggest spenders in history. This perhaps shouldn’t be surprising as they have an election to win and an economy that still needs to play catch-up due to COVID-19.

Mitchell said he was caught off-guard by the government’s decision to extend the $7.8 billion low and middle-income tax offset for an extra year. Some 10 million taxpayers are eligible for the end-of-year rebate of up to $1,080.

He added, “The boost to household consumption…should see retailers remain strong.”

Two of the ASX 200 retail shares Mitchell singled out that should benefit are Harvey Norman Holdings Ltd (ASX: HVN) and JB Hi-Fi Ltd (ASX: JBH).

Cashed up consumers

It’s not just the latest extension of tax cuts that look set to offer another tailwind for ASX 200 retail shares.

Australian consumers also remain cashed up on the back of temporary boosts to JobSeeker and the recently terminated JobKeeper program. And with domestic borders only now fully reopening and international travel restrictions remaining in place, many consumers haven’t been spending as much as they would have in ‘normal’ times.

Which brings us back to…

Two ASX 200 retail shares tipped to benefit

Over the past full-year, JB Hi-Fi has handily outperformed the benchmark. Shares in the consumer electronics retailer are up 43% in 12 months. By comparison, the ASX 200 gained 29% in that same time. Year-to-date the JB Hi-Fi share price has gone the other direction, slipping 2% so far in 2021.

At the current price of $48.74 per share (up 3% in intraday trading today), JB Hi-Fi has a market cap of $5.6 billion. The ASX 200 retail share pays a dividend yield of 5.54%, fully franked.

Harvey Norman’s share price is also marching higher today.

Shares in the discretionary retailer are up 2% in intraday trading giving shareholders an 86% gain over the past 12 months. Harvey Norman is beating the benchmark in 2021 as well, with shares up 11% in 2021.

At the current price of $5.29 per share, Harvey Norman has a market cap of $6.6 billion and pays a dividend yield of 7.20%, fully franked.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Two ASX 200 retail shares tipped as Federal budget winners appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!