Last week saw a number of broker notes hitting the wires once again. Three buy ratings that investors might want to be aware of are summarised below.

Here’s why brokers think investors ought to buy them next week:

IDP Education Ltd (ASX: IEL)

According to a note out of UBS, its analysts have retained their buy rating and $35.90 price target on this student placements and language testing company’s shares. This follows news that its CEO, Andrew Barkla, is stepping down from the role in the coming months. While UBS acknowledges that the news is a negative, it remains very positive on the company’s prospects and sees it as one of the best growth shares on the Australian share market. The IDP share price ended the week at $23.17.

Webjet Limited (ASX: WEB)

A note out of Goldman Sachs reveals that its analysts have retained their buy rating and $6.90 price target on this online travel agent’s shares. Ahead of the release of Webjet’s results next week, the broker has reiterated its buy rating. It feels that the company’s outlook is very positive thanks to the growing online channel, its Bedbanks business, and strong balance sheet. The latter gives it opportunities to make bolt-on acquisitions. The Webjet share price was fetching $5.47 at Friday’s close.

Xero Limited (ASX: XRO)

Another note out of Goldman Sachs reveals that its analysts have retained their buy rating but trimmed their price target on this cloud accounting platform provider’s shares to $118.00. This follows the release of a full-year result which fell a touch short on earnings and subscribers. Despite this, Goldman remains positive and continues to forecast strong growth over the coming years and sees value in its shares after recent weakness. The Xero share price ended the week at $84.16.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

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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 positions in and has recommended Idp Education Pty Ltd and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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There are plenty of ASX dividend shares available for income investors to look at. I plan to hold Rural Funds Group (ASX: RFF) forever because of the income it can produce.

Rural Funds operates as a real estate investment trust (REIT) that owns farmland and agricultural assets across Australia.

There are a few different reasons why I’m planning to keep holding Rural Funds in my portfolio for many years to come. Let’s take a look.

Diversification

Rather than just a single property in one location, Rural Funds owns a diverse portfolio of farms.

The ASX dividend share owns properties across agricultural sectors including cattle, vineyards, almonds, macadamias and cropping (sugar and cotton).

I think it is useful for Rural Funds to own different types of farmland for diversification purposes. For example, if the REIT’s portfolio were limited to just cattle farms, the investment ‘universe’ would be smaller. Diversification also allows management to look at a wider array of potential opportunities.

Rural Funds’ properties are also spread over different climatic conditions. In times of variable weather, this can lower short-term and longer-term risks. In addition, Rural Funds owns substantial water entitlements for its tenants to use.

Speaking of tenants, the REIT’s tenant base is mostly comprised of large, stable businesses. Some of the largest ones include Select Harvests Limited (ASX: SHV), Treasury Wine Estates Ltd (ASX: TWE), Olam International and JBS.

Distribution growth

For me, one of the main attractions of Rural Funds as an ASX dividend share is its goal to increase its distribution by 4% per annum.

While 4% per year isn’t exactly rocketing higher, it’s usually faster growth than inflation and it can compound over time.

I’m looking for businesses that hopefully provide income security even during times of economic uncertainty. Rural Funds stuck to its 4% distribution growth goal even during the COVID-19 year of 2020.

In FY22, it’s expecting to grow its annual distribution by 4% to 11.73 cents per unit. It has increased its distribution every year since it listed several years ago.

Contracted rental growth

One of the main ways that Rural Funds can achieve this distribution growth is through contracted rental indexation.

Rural Funds notes that 44% of its lease income is based on CPI inflation, which is currently running at an elevated rate. Most of the rest of the contracted income sees fixed annual increases, with occasional market reviews.

The ASX dividend share also invests in productivity improvements at its farms, which aims to increase the value of the farm for tenants (and Rural Funds), and aims to lead to further rental growth.

Yield

One of the final things that I like about Rural Funds is that it has a pretty good dividend yield. At the current Rural Funds share price, it has an FY22 distribution yield of 4%.

At the moment, its adjusted net asset value (NAV) per unit is $2.24. That’s the underlying value of the business. Currently, the Rural Funds share price is at a 30% premium to its NAV.

The post I plan to hold this quality ASX dividend share forever. Here’s why. appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in RURALFUNDS STAPLED. 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 positions in and has recommended RURALFUNDS STAPLED. The Motley Fool Australia has recommended Treasury Wine Estates Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Time and time again, statistics show that the most popular ASX exchange-traded funds (ETFs) are those that track ASX shares themselves.

That is not too surprising. Australian investors seem patriotic in that way, or perhaps they just stick to the companies we all know best. But international ETFs have also been rising in popularity as many investors want to add exposure to world-class companies outside Australia, companies perhaps like Apple Inc (NASDAQ: AAPL) and Amazon.com Inc (NASDAQ: AMZN), to their portfolios.

ETF provider Vanguard has the distinction of running the ASX’s most popular ETF — the Vanguard Australian Shares Index ETF (ASX: VAS). VAS is by far the winner. But Vanguard’s flagship international offering — the Vanguard MSCI International Shares Index ETF (ASX: VGS) — is a distant laggard. It is not even the ASX’s most popular international shares ETF. That honour goes to the iShares S&P 500 ETF (ASX: IVV).

VGS vs. IVV: Which ASX ETF comes out on top?

VGS and IVV are both remarkably similar, and yet quite different. On paper, VGS is far more diversified than IVV. It invests in shares ranging from more than 20 different advanced economies. These include Britain, Japan, Canada, the United States, and Europe. Its current basket counts almost 1,500 different individual shares.

In contrast, IVV tracks the US-centric S&P 500 Index. This index houses 500 of the largest companies that are listed on the US markets.

Yet both ETFs here largely have similar top 10 holdings. That is because both ETFs are weighted by market capitalisation. And the largest companies on both the S&P 500 and in VGS both happen to be the same.

But let’s get down to the $64,000 question: which ETF has been better to own for investors?

So as of 30 April, the iShares S&P 500 ETF had returned 8.5% over the preceding 12 months (including the value of dividend distributions). Over the past three years, IVV units have returned an average of 13.2% per annum. That grows to 14.5% over the past five years.

In contrast, VGS has returned 4.7% over the past year. It has averaged 10.1% over the past three, and 11.4% over the past five.

So it appears VGS’s increased diversification has held this ETF back compared to IVV. This makes IVV the unbridled winner in a showdown with VGS over any recent time period.

Of course, past performance is no guarantee of future gains, so this could well change in the future. But it perhaps explains why iShares’ S&P 500 ETF remains a far more popular choice than Vanguard’s International Shares ETF for ASX investors.

The post VGS: Were you better off buying the S&P 500 ETF? appeared first on The Motley Fool Australia.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen has positions in Amazon and Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, Apple, and Vanguard MSCI Index International Shares ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Amazon, Apple, Vanguard MSCI Index International Shares ETF, and iShares Trust – iShares Core S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Once again, a large number of broker notes hit the wires last week. Some of these notes were positive and some were bearish.

Three sell ratings that investors might want to hear about are summarised below. Here’s why top brokers think investors ought to sell these shares next week:

JB Hi-Fi Limited (ASX: JBH)

According to a note out of Goldman Sachs, its analysts have reiterated their sell rating and $39.20 price target on this retailer’s shares. The broker believes that JB Hi-Fi will fall short of the market’s expectations in FY 2023. This is due to softening discretionary goods spending and increasing competition from online pureplays including Amazon. The JB Hi-Fi share price was trading at $48.53 on Friday.

Macquarie Group Ltd (ASX: MQG)

A note out of Credit Suisse reveals that its analysts have downgraded this investment bank’s shares to an underperform rating and trimmed their price target on them to $150.00. This follows the release of a full-year result that fell short of Credit Suisse’s expectations. And with the broker believing that Macquarie’s earnings have peaked, it feels now could be the time to sell. The Macquarie share price was fetching $183.11 at Friday’s close.

Wesfarmers Ltd (ASX: WES)

Another note out of Goldman Sachs reveals that its analysts have retained their sell rating and $38.60 price target on this conglomerate’s shares. As with JB Hi-FI, Goldman expects Wesfarmers to be impacted from softening consumer demand. This is being driven by broad-based inflation and higher housing costs. In addition, its analysts expect a decline in housing transaction volumes to negatively impact household goods consumption. The Wesfarmers share price ended the week at $49.97.

The post Top brokers name 3 ASX shares to sell next week appeared first on The Motley Fool Australia.

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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 positions in and has recommended Wesfarmers Limited. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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