Day: 23 August 2021

The Mineral Resources Limited (ASX: MIN) share price has enjoyed strong gains, up 74% since this time last year. This comes as the mining services company experienced sky-high prices for iron ore and lithium throughout 2021 until of late.

At Monday’s market close, Mineral Resources shares finished the day up 0.51% to $51.31.

What’s going on with the Mineral Resources share price?

Investors have been relatively buoyant on the Mineral Resources share price despite its steep 16% drop over the past week.

The spot price for iron ore and lithium surged in the first half of 2021, which translated to bumper profits for Mineral Resources.

In its FY21 full-year results, the company reported revenue of $3.7 billion, up 76% over the prior corresponding period. The robust performance was driven by mining services growth and new external contracts, record commodities shipment, and strong spot prices.

This led to underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) of $1.9 billion, up 148% compared to FY20.

However, as mentioned above, the Mineral Resources share price has taken a tumble since around the time the company revealed its FY21 scorecard.

The spot price for lithium and iron ore has been weighted down as China has cut its imports from Australia. In addition, the Asian country has ramped up domestic efforts to be more self-reliant in producing critical minerals and iron ore.

Since August 13, Mineral Resources shares have sunk from $61.52 to $51.31, representing a fall of 16.6%.

Mineral Resources dividend yield

Mineral Resources paid a fully franked interim dividend of $1.00 per share to shareholders in March. On top of this, the company rewarded shareholders with a final dividend payment of $1.75 this earnings season.

When factoring in the current share price along with its full-year dividend payment, this gives Minerals Resources a dividend yield of 5.35%.

Not a bad return for investors when factoring in the company’s share price over the past 12 months.

The post The Mineral Resources (ASX:MIN) share price is now trading on a 5.35% fully franked dividend yield appeared first on The Motley Fool Australia.

More reading

• ASX 200 Weekly Wrap: Miners drag ASX back to earth
• August hasn’t been a great month for the Mineral Resources (ASX:MIN) share price
• These were the worst performing ASX 200 shares last week
• What’s going on with ASX lithium shares today?
• Why the Mineral Resources (ASX:MIN) share price fell 15% this week

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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.

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The SEEK Limited (ASX: SEK) share price is one to watch this morning after the human resources consulting company’s latest full-year result.

SEEK share price on watch as FY21 revenue falls flat

SEEK this morning reported its full-year results for the period ended 31 December 2021 (FY21). Some of the key takeaways include:

• Revenue up 1% on the prior corresponding period (pcp) to $1,591 million (+17% to $760 million from continuing operations)
• Earnings before interest, tax, depreciation and amortisation (EBITDA) up 15% to $474 million (+30% to $332 million from continuing operations)
• Net profit after tax (NPAT) excluding significant items up 58% to $141 million (+68% to $135 million from continuing operations)

The SEEK share price is one to watch this morning after the Board announced a final dividend of 20 cents per share, fully franked.

What happened in FY21 for SEEK?

SEEK reported Australia and New Zealand (ANZ) as its strongest market during the year. That coincided with record ad volumes in the second half of the year amid easing COVID-19 restrictions. SEEK reported its market position remained strong despite “intense” competition.

SEEK reported 40 million monthly site visits representing 10% growth on pre-COVID-19 levels. ANZ revenue grew 40% to $541 million thanks to a small and medium enterprise (SME)-led recovery.

The Aussie company also launched the SEEK Growth Fund with seed assets of $1,215 million. The fund’s purpose is on greater independence to enable long-term, aggressive investment decisions.

What did management say?

SEEK CEO and Managing Director, Ian Narev, had this to say about the results:

Market conditions in FY21 were unprecedented for SEEK. The year started in the depths of the first wave of COVID-19, which then gave way to a strong recovery in Australia, New Zealand, and many Asian markets.

Operationally, revenue in our core businesses grew 17% and EBITDA grew 30%.

The recovery in ANZ job ad volumes began in the second quarter of FY21, and then increased rapidly. By March of this year, job ad volumes exceeded pre-COVID-19 levels and were at all-time highs.

While we have observed an improvement in operating conditions from the COVID-19 lows of early 2020, we continue to experience volatility in hiring demand as our key markets react to localised outbreaks of COVID-19.

Despite these challenges, we will continue to focus on our key priorities to grow our core businesses over the long term and invest in our capabilities.

What’s next for SEEK and its share price?

SEEK provided FY22 guidance excluding significant items and the SEEK Growth Fund. That includes expected EBITDA of $425 million to $450 million and net profit after tax of $190 million to $200 million.

The Seek share price has climbed 54.8% in the last 12 months and is outperforming the S&P/ASX 200 Index (ASX: XJO) in 2021.

The post SEEK (ASX:SEK) share price on watch as revenue falls flat appeared first on The Motley Fool Australia.

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• 2 excellent ASX 200 blue chip shares named as buys

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended SEEK Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Ansell Limited (ASX: ANN) share price will be one to watch when trading resumes on Tuesday. That’s after the personal protective equipment (PPE) manufacturer released its full-year results for FY21 this morning.

At close of trade Monday, shares in the company were trading at $40.50 – down 0.49%. The S&P/ASX 200 Index (ASX: XJO), meanwhile, ended the day 0.39% higher.

Let’s take a closer look at today’s results.

Ansell share price in focus after 54% dividend growth

• Sales of approx. US$2 billion – up 25.6% on the prior corresponding period (pcp).
• Earnings before interest and taxes (EBIT) jumped 56% to US$338 million.
• Net profit after tax (NPAT) surged 57% on the pcp to US$248 million.
• Basic earnings per share (EPS) of US$1.922 – up 60% on the pcp.
• Full-year dividend of US76.8 cents per share (US43.6 cents final + US33.2 cents interim). This is 54% higher than the pcp and represents a dividend yield of 2.63%.

What happened in FY21 for Ansell?

The biggest story around the world, which has also been impacting the Ansell share price, is the coronavirus pandemic. Ansell chair John Bevan conceded the emergence of new strains of the virus has benefitted the company’s bottom line.

“The COVID-19 pandemic has continued to be the dominant influence on the global economy this year as countries recover or succumb to new waves. As a result, Ansell’s mission to provide innovative safety solutions in a responsible and reliable manner has never been clearer. This partly contributed to the company upgrading EPS guidance three times throughout 2021 financial year and achieving EPS of 192.2¢,” he said.

As well, in June, Ansell announced the appointment of a new CEO. Neil Salmon was an internal hire who was previously president of Industrial GBU at the company. The Ansell share price fell on the day of this announcement. He will take the job come 1 September this year.

What did management say?

Bevan had more to say on today’s results, including:

To meet higher demand for some of our products, we increased our capital expenditure to $82.7m, a 36.5% increase on the prior year. We plan on maintaining the spend at elevated levels for financial year 2022 and are confident that we can deliver the desired returns from these investments. It is important that our shareholders are rewarded and as a result, we have declared a final dividend of US43.6¢ which takes full year dividend to US76.8¢, a 53.6% increase compared to the prior year and a 40% payout ratio. We will also continue to assess share buybacks from time to time as part of our capital allocation strategy.

Retiring CEO Magnus Nicolin added:

The focus for us this year has been to continue serving our customers and bringing our major capacity expansions into production despite the challenging operating environment. We were able to get 12 new glove lines and several new body protection smart lines live which helped to deliver the results we saw for 2021 financial year and will also support growth for 2022 financial year and beyond. In addition to this, we ensured that the business is well positioned for the post COVID-19 environment by continuing to invest in our sales force, customer experience, product innovation and digital capabilities.

What’s next for Ansell?

Ansell says the continuing impact of COVID-19 will be material to the company’s performance in FY22. Investors will be interested to watch how the Ansell share price performs as the economy starts to open up.

The company says it has a diversified portfolio of products and, whilst it expects demand for medical PPE to taper off as the impacts of COVID-19 lessen, it maintains this should be offset by sales of other products. These include “Mechanical, Surgical, Life Sciences and internally manufactured Single Use gloves.”

Conversely, Ansell said the impacts of the pandemic in rubber rich South-East Asia may hamper supply in FY22:

A number of Ansell’s factories and suppliers in the region have had short term closures or reduced operations. This may impact sales during FY22 H1. Increased freight costs and shipping delays are also expected to persist throughout FY22.

Ansell expects EPS for FY22 to be within the range of US175 cents and US195 cents.

Ansell share price snapshot

Over the past 12 months, the Ansell share price has increased 0.5%. The ASX 200 has outperformed it by more than 21 percentage points over the same period. Year to date, however, Ansell shares have climbed 15.6% compared to the ASX 200’s gains of 12.1%. Ansell has a current market capitalisation of about $5.2 billion.

The post Ansell (ASX:ANN) share price on watch after 57% profit surge appeared first on The Motley Fool Australia.

More reading

• Revealed: The biggest shocker from results season
• 2 COVID-19 ASX shares that could be buys

Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ansell Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The WiseTech Global Ltd (ASX: WTC) share price will be one to watch this week when it hands in its full year results.

Shareholders will no doubt be hoping that the market reacts as positively to its full year result as it did to the company’s half year results.

In February, the WiseTech share price jumped 9% during intraday trading following its release.

What happened last time it released earnings?

For the six months ended 31 December, WiseTech reported a 16% increase in revenue to $238.7 million. Management advised that this was driven by a 19% lift in CargoWise revenue to $150 million and a 12% increase in acquisition revenue to $88.7 million.

Thanks to organisation-wide efficiency initiatives and operating leverage, the company’s earnings before interest, tax, depreciation and amortisation (EBITDA) increased at an even stronger rate of 43% to $89.2 million.

And finally, on the bottom line, WiseTech revealed a 61% jump in underlying net profit after tax to $43.6 million.

WiseTech’s Founder and CEO, Richard White, commented: “Notwithstanding the subsequent waves of COVID-19 in major markets, our business has continued to deliver solid revenue and EBITDA growth in 1H21. Our strategic focus on ‘Product, Penetration and Profitability’ has enabled us to continue to expand the CargoWise ecosystem, increase our market penetration, with eight new global customer roll-outs signed since 1 January 2020 and deliver 61% growth in Underlying NPAT, demonstrating the step change in operating leverage that we are achieving by extracting acquisition synergies and implementing organisation-wide efficiencies.”

What else happened?

Also getting investors excited and giving the WiseTech share price a boost was its guidance for the full year.

The company reaffirmed its revenue guidance of $470 million to $510 million, which represents annual growth of 9% to 19%, but lifted its EBITDA guidance. The latter is now expected to be in the range of $165 million to $190 million. This represents year on year growth of 30% to 50%. Previous guidance was for growth of 22% to 42%.

Is the WiseTech share price good value?

Late last month analysts at Credit Suisse upgraded WiseTech shares to an outperform rating with a $34.00 price target. However, since then, the WiseTech share price has surpassed this price target and is currently fetching $36.72.

This could be an indication that investors are expecting an impressive result from the company later this week.

The post What happened to the WiseTech (ASX:WTC) share price last earnings season? appeared first on The Motley Fool Australia.

More reading

• 3 compelling ASX growth shares that could be buys in August
• How China’s war on tech companies can hit ASX shares where it hurts
• 2 excellent ASX tech shares named as buys

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended WiseTech Global. The Motley Fool Australia owns shares of and has recommended WiseTech Global. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The National Australia Bank Ltd (ASX: NAB) share price has been on a strong run of late.

Shares in the Aussie big four bank have climbed 19.5% in 2021 and are outperforming the S&P/ASX 200 Index (ASX: XJO) by some margin.

However, the ASX banking sector has had a strong year. How does NAB’s performance stack up against its bank peers?

How does the NAB share price stack up against its peers?

As it stands, NAB is Australia’s third-largest bank by market capitalisation. Commonwealth Bank of Australia (ASX: CBA) is the largest at $177.7 billion with Westpac Banking Corporation Ltd (ASX: WBC) in second at $94.6 billion.

NAB and Australia and New Zealand Banking Group Ltd (ASX: ANZ) round out the top four with valuations of $90.3 billion and $80.6 billion, respectively.

The NAB share price has now rocketed 56.2% higher in the past 12 months. That’s better than ANZ (+55.5%), CBA (+45.3%) and Westpac (+50.7%).

Recent share price performance is not the only thing to consider when evaluating the NAB share price. NAB is currently trading at a price to earnings (P/E) ratio of 21.0 times with a 3.3% dividend yield.

In terms of the P/E ratio, that puts it in the middle of the pack compared to ANZ (17.2 times), CBA (21.3 times) and Westpac (22.1 times). But this is not the only metric investors would be looking at when comparing ASX bank shares against one another.

Different dividend yields are also important in evaluating the NAB share price performance. Westpac and CBA (both 3.5%), as well as ANZ (3.7%), all offer higher yields at their current prices.

Foolish takeaway

The NAB share price has been performing strongly in 2021. In fact, on share price performance alone, the Aussie bank has outperformed its big four peers in the past 12 months.

The post How is the NAB (ASX:NAB) share price performing against the banking sector? appeared first on The Motley Fool Australia.

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Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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.

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One ASX shares fund has revealed the 10 companies that it’s betting on to provide maximum returns as Australia recovers from the current COVID-19 resurgence.

The Firetrail Australian High Conviction Fund only contains about 25 stocks in its portfolio, so the 10 investments it publicised in its latest update are relatively large stakes.

The fund claims to have a high 80% active share, meaning the majority of its investments are different to what the rest of the market possesses.

Re-opening beneficiaries

Some of Firetrail’s overweight ASX shares are post-pandemic “re-opening” beneficiaries — like Qantas Airways Limited (ASX: QAN) and gambling machine provider Aristocrat Leisure Limited (ASX: ALL).

Qantas’ narrative is obvious. Eventually, the world will return to something resembling pre-COVID life, and air travel volumes will multiply from the current nadir.

Similarly, gambling sites like pubs and casinos will start to see more patronage in the coming years, allowing Aristocrat to cash in.

Aristocrat shares are already up more than 40% this year. Qantas is down 10.6% after the Delta variant of COVID-19 killed off the recovery of its domestic operations in recent months.

Housing construction will also pick up, as the winding down of COVID restrictions will allow more productive building sites and consumer confidence to start new projects.

Firetrail’s update named BlueScope Steel Limited (ASX: BSL) and James Hardie Industries plc (ASX: JHX) as overweight shares in its portfolio, benefitting from “strong demand while taking market share in their categories”.

Yarra Capital Management head of Australian equities Dion Hershan this week also named Aristocrat and James Hardie as safe havens in the inflationary climate.

He told clients his team has currently a “preference to skew our portfolios towards high-quality companies, in attractive industry structures with strong pricing power”.

James Hardie shares have risen more than 37% for the year-to-date.

Finance and ‘defensive’ ASX shares

The Firetrail team made it clear it was staying well away from Australian banks.

But it does like the look of some ASX finance stocks outside of banking, namely QBE Insurance Group Ltd (ASX: QBE), Insurance Australia Group Ltd (ASX: IAG) and Medibank Private Ltd (ASX: MPL).

Private health insurer Medibank has seen its shares rise more than 18% this year. Insurers QBE and IAG have both seen 10% and 6.6% rises respectively in the past month.

The Firetrail Australian High Conviction Fund is also going overweight on a trio of “undervalued defensive companies” — Telstra Corporation Ltd (ASX: TLS), Newcrest Mining Ltd (ASX: NCM) and Crown Resorts Ltd (ASX: CWN). 

Meanwhile, similar to the big banks, Firetrail is avoiding iron ore-related stocks.

The post 10 ASX shares we’re overweight in right now: fund appeared first on The Motley Fool Australia.

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• Top broker tips Newcrest (ASX:NCM) share price to have a golden 12 months
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• ASX 200 Weekly Wrap: Miners drag ASX back to earth

Motley Fool contributor Tony Yoo owns shares of Qantas Airways Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Insurance Australia Group Limited and Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Temple & Webster Group Ltd (ASX: TPW) share price has been a strong performer over the last few weeks.

Since this time last month, the online furniture and homewares retailer’s shares have stormed 17% higher.

This compares to a 1.3% gain by the S&P/ASX 200 Index (ASX: XJO) over the same period.

Why is the Temple & Webster share price on fire?

Investors have been bidding the Temple & Webster share price higher this month following the release of its full year results at the end of July.

For the 12 months ended 30 June, Temple & Webster delivered an 85% increase in revenue to $326.3 million and a 141% jump in EBITDA to $20.5 million.

A key driver of its growth in FY 2021 was another strong increase in customer numbers. At the end of the period, Temple & Webster’s active customers were up 62% year on year to 778,000. This means the company added 100,000 new active customers in the second half of the financial year.

Positively, its strong form has continued early in the new financial year, with revenue increasing 39% over the prior corresponding period between 1 July to 24 July.

Can its shares go higher?

The good news is that the team at Morgan Stanley believe Temple & Webster’s shares can still climb higher from here.

In response to its full year results, the broker retained its overweight rating and lifted its price target on Temple & Webster’s shares to $16.00.

Based on the latest Temple & Webster share price of $13.60, this represents potential upside of almost 18% over the next 12 months.

Its analysts believe that Temple & Webster can grow its revenue by ~30% per annum in the coming years, putting it on course to hit $1 billion in revenue by FY 2026.

The post Top broker names Temple & Webster (ASX:TPW) share price as a buy appeared first on The Motley Fool Australia.

More reading

• 2 ASX COVID-19 shares reporting big growth
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• Why the Temple and Webster (ASX:TPW) share price has jumped 18% in a month
• 2 top ASX shares to buy according to WAM

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Temple & Webster Group Ltd. The Motley Fool Australia has recommended Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Iron ore bulls might want to look away following an 18% slide in the BHP Group Ltd (ASX: BHP) share price since its record open of $54.06 on 4 August.

Shares in the iron ore major have tanked to a 7-month low. This is broadly in line with the recent weakness in iron ore prices.

Iron ore spot prices are currently fetching ~US$160/tonne, losing almost a third in value since May record highs of ~US$230/tonne.

While things were going great for the BHP share price during iron ore’s ascent to all-time highs, it is now unravelling.

Analysts say pressure will persist for iron ore

China’s steel production mandates and commitment to decarbonisation appear to be the main drivers of weakness behind iron ore prices. As a consequence, the BHP share price also has been driven down.

Mining.com quotes Commonwealth Bank commodities analyst Vivek Dhar as saying:

The fall in prices was linked to weaker steel demand conditions in the property and infrastructure sectors in China.

Weaker demand conditions in both these crucial sectors only reaffirmed market anxieties that China’s steel output cuts in H2 2021 are inevitable.

Morgan Stanley warned that iron ore could fall further due to China’s weak steel demand, according to Mining.com.

Federal Reserve to tighten monetary policy

Another factor weighing on iron ore prices, and consequently the BHP share price, is commentary from the US Federal Reserve.

There are increasing concerns that the Federal Reserve might tighten its accommodative monetary policy stance in the near term.

Its most recent July meeting minutes were released on 18 August. In it, the Fed cited that “several participants noted that an earlier start to tapering could be accompanied by more gradual reductions in the purchase pace…”

These expectations have lifted the US currency, which historically has an inverse relationship with commodity prices.

The value of the US dollar influences commodity prices because the dollar is used as the benchmark pricing mechanism for most commodities. Hence why we refer to iron ore spot prices in US dollars.

As dollar-denominated metals become more expensive, it could be a factor weighing on demand.

BHP share price snapshot

The BHP share price tumbled 6.35% to $44.37 on 19 August. That was the day after the Fed July meeting minutes were released. BHP’s market capitalisation is currently $130.81 billion.

The post BHP (ASX:BHP) share price free falls in August, analysts say iron ore pressures will persist appeared first on The Motley Fool Australia.

More reading

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• Pilbara Minerals (ASX:PLS) share price bounces back, up 8% on Monday
• What’s moving the ASX 200 Index (ASX:XJO) on Monday?
• ASX 200 Weekly Wrap: Miners drag ASX back to earth
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Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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.

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With savings accounts and term deposits still providing very low interest rates, the share market arguably remains the best place to earn a passive income.

But which ASX dividend shares should you consider buying? Two that this top broker rates highly are listed below:

Charter Hall Social Infrastructure REIT (ASX: CQE)

The first dividend shares to look at is the Charter Hall Social Infrastructure REIT. It is a real estate investment trust focused on social infrastructure properties. These include specialist use properties with low substitution risk such as childcare centres and government properties.

The Charter Hall Social Infrastructure REIT was on form in FY 2021. The company recently released its full year results and revealed a 13.5% increase in operating earnings to $58 million. It also advised that it ended the period with a weighted average lease expiry of 15.2 years and 73.2% of its properties on fixed rent reviews. Combined with its 100% occupancy rate, this bodes well for the future.

Goldman Sachs currently has a conviction buy rating and $3.81 price target on the company’s shares. Furthermore, based on the current Charter Hall Social Infrastructure REIT share price of $3.60, the broker expects its shares to provide yields of ~4.6% in FY 2022 and ~4.8% in FY 2023.

National Australia Bank Ltd (ASX: NAB)

Another ASX dividend share to consider is this banking giant. It could be a good option due to the favourable outlook for the sector right now. This is thanks to Australia’s strong economic recovery from the pandemic and the thriving housing market. And while current lockdowns have put a dampener on near term trading conditions, another rebound is expected once restrictions ease.

Another positive is the recent deal to acquire Citibank’s Australian consumer business. This gives NAB exposure to an area it was significantly underweight and could bode well for future growth.

The team at Goldman Sachs are very positive on NAB. This is due to the bank’s cost management initiatives, its position as the largest business bank, excellent margin management, and its strong capital position.

The broker has a conviction buy rating and $30.62 price target on the bank’s shares. And based on the current NAB share price of $27.39, Goldman expects yields of 4.5%, 5%, and 5.3%, respectively, between FY 2021 and FY 2023.

The post Top broker names 2 ASX dividend shares to buy appeared first on The Motley Fool Australia.

More reading

• What’s moving the ASX 200 Index (ASX:XJO) on Monday?
• ASX 200 Weekly Wrap: Miners drag ASX back to earth
• 2 ASX shares with generous fully franked dividend yields
• Analysts name 2 ASX dividend shares with attractive yields as buys
• August has been a great month so far for the NAB (ASX:NAB) share price

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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.

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The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price has risen 23% in the calendar year to date. It has risen 55% over the last 12 months.

But that’s old news. It hasn’t actually done much in the last few months. It is virtually flat since early March 2021.

However, just because ANZ shares haven’t done much doesn’t mean that analysts think it’s a sell (or buy, either).

So what do analysts think?

Mixed views on the ANZ share price

One view is Citi’s, it thinks ANZ shares are a sell with a price target of $28. It thinks that ANZ’s core profit is going to be weaker and it has only been ‘markets’ that have helped keep revenue as high as it is.

Credit Suisse is another broker that believes that ANZ shares aren’t a buy. Though it doesn’t go as far as calling it a sell – it’s neutral on the business. However, it also noted the markets earnings were likely to be hurting because of the current conditions.

What has the market been told recently?

The latest material update out of the big four ASX bank has been its capital management update.

ANZ’s board decided that the bank would buy back up to $1.5 billion of ANZ shares on-market as part of its capital management plan.

The bank’s reported level 2 common equity tier 1 capital (CET1) ratio at 31 March 2021 was 12.4%, which was materially above APRA’s stated ‘unquestionably strong’ capital requirement of 10.5%.

This on-market buy-back is expected to reduce ANZ’s March 2021 CET1 ratio by approximately 35 basis points.

At the time, ANZ CEO Shayne Elliot said:

After taking into consideration the ongoing pressures in some parts of the economy due to COVID, including the current lockdowns in parts of the country, the strength of our balance sheet and ongoing financial performance means we are in a position to return a modest amount of surplus capital to shareholders through a buy-back of shares on-market.

Just as we supported our customers through previous lockdowns we stand ready and able to provide assistance to those that need it. The strength of our business means we are well placed to fulfil needs of our customers and the broader community while still actively managing our capital.

Since 19 July 2021, the ANZ share price has risen by 4%.

Prior to that, ANZ reported its FY21 first half result. The major bank revealed that its statutory profit after tax had risen by 45% to $2.94 billion compared to the second half of FY20. Continuing operations cash profit was up 28% to $2.99 billion.

In that result, ANZ’s board also decided to double its dividend from $0.35 per share to $0.70 per share.

However, the HY21 report was heavily influenced by a total provision release of $491 million. Profit before credit impairment and tax was actually down 10% to $3.94 billion.

What is the ANZ share price valuation?

Credit Suisse reckons ANZ shares are valued at 13x FY21’s estimated earnings with a projected grossed-up dividend yield of 7%.

Citi has a lower earnings projection for FY21. It thinks the ANZ share price is valued at 14x FY21’s estimated earnings, but also with a grossed-up dividend yield of around 7%.

The post Is the ANZ (ASX:ANZ) share price a buy right now? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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.

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