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Morningstar runs the numbers

Lex Hall  |  02 Nov 2020Text size  Decrease  Increase  |  
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We take a numerical look through this week's Morningstar research. Plus, our most popular articles and videos for the week ended 30 October.


The margin by which the Republicans hold the Senate, note Daniel Morris and Mark Allan from BNP Paribas Asset Management. On Tuesday, all 435 seats in the House of Representatives, 35 of the 100 seats in the Senate as well as the office of President of the US will be contested. In addition, elections will be held for 13 state and territorial governorships, as well as a number of other state and local bodies. Democrats have held a majority in the House since the 2018 elections, while Republicans have controlled the Senate since the 2014 elections. The Democrats enter the 2020 election with 232 of the 435 seats in the House to the Republicans’ 196, giving them a sizable 37-seat advantage. To enact sweeping change, the next administration would need to have a working majority in both the House and the Senate. This is particularly true given the current divided and very partisan political climate in the US.

70 per cent

The share price gain for Amazon this year, reports Morningstar's James Gard. But it is longer-term investors who’ve seen the most impressive gains—shares have increased a staggering 19 times since 2010. The upward march has continued as the company has rolled out services such as Amazon Prime, Kindle, Amazon Video and Amazon Fresh. Part of the original cohort of FANG (Facebook, Amazon, Netflix and Google) stocks, Amazon’s US$1.6 trillion market cap means it is now bigger than the rest of this group. But Apple, which underwent a stock split at the end of August, has already beaten Amazon to become the first US$2 trillion company.

More than 50 per cent

The amount by which Australia's national debt to GDP ratio is set to rise, says Morningstar's Peter Warnes. That's the highest level since post-WWII in the 1950s. Despite this, it is among the lowest levels of the developed countries. "While interest rates are at all-time lows, the servicing of the debt is not the major issue, but it will still require at least $17.5bn annually. We begin every year $17.5bn behind the starting line before the country can trim the debt," writes Warnes. "There is no room for complacency. Unscrambling the omelette and driving economic activity back to pre-coronavirus levels is not a given. It is likely to take years."

35 cents a share

The final dividend declared by ANZ. That was in line with predictions from Morningstar banking analyst Nathan Zaia, who has retained his $25 per share fair value estimate for Australia and New Zealand Banking Group despite an expectedly weak fiscal 2020 result. However, Zaia says the bank's capital position is strong enough to weather the rise in loan losses to come and still pay out dividends. "In line with our expectations ANZ Bank declared a final dividend of 35 cents per share, paying out 50 per cent of second-half earnings and taking full-year dividends to 60 cents per share," Zaia says. "We expect a 50 per cent payout in fiscal 2021 with the payout ratio lifted to around 65 per cent in fiscal 2022."

25 per cent

The amount by which global GDP could fall by 2100 if the world neglects efforts to reduce global greenhouse gas emissions. That’s the warning from more than 60 central banks, including the RBA and the Bank of England, writes Nicki Bourlioufas. This estimate is included in scenarios published earlier this year by the Network for Greening the Financial System, a collection of 66 central banks and supervisors and 13 observer institutions. “However, that estimate is conservative, and does not account for all sources of risk, including low probability high-impact events, sea level rise, extreme events and societal changes such as migration and conflict, the NGFS said in a June 2020 report,” Bourlioufas writes.

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is senior editor for Morningstar Australia

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