Day: 16 May 2022

The recent ASX big bank reporting season threw up a few surprises during this rising interest rate environment. And one, in particular, is standing out from the crowd, according to a top broker.

The most surprising thing to emerge from the results was the dramatic change in tune in the big banks’ approach to costs.

That was the findings of Citigroup as it noted the complete reset of the major banks’ future cost expectations.

ASX big bank cost target surprise

The National Australia Bank Ltd (ASX: NAB) and Australia and New Zealand Banking Group Ltd (ASX: ANZ) have already abandoned the cost targets they religiously set previously.

ASX big banks had previously focussed heavily on cost control as that was an effective lever to manage margin pressure when interest rates were at record lows.

The turn in the rate cycle will help them to pad margins, but high inflation is making costs a challenge to manage. The irony is that the winner will be the one that masters the art of cost control.

How to pick the winner

“A rising cash rate is set to accelerate revenue growth for all the major banks,” said Citi.

This is likely to lead to a narrowing of the current revenue differences, as lending demand slows. Therefore, EPS growth forecasts in the next few years will be dictated by each bank’s cost strategy, so long as asset quality holds up.

There is one ASX big bank share that Citi believes will be in pole position to outperform against this backdrop.

The ASX bank share that is the top buy pick

This is the Westpac Banking Corp (ASX: WBC) share price as Westpac is the only major bank sticking to its cost-savings goals.

At face value, it means Westpac is also likely to be the only ASX big bank to face higher expenses.

“Costs will grow at every bank except WBC, which seems determined to run its own race,” added the broker.

“We see WBC as offering the best risk-return equation as well as the strongest EPS growth profile.”

What is the Westpac share price worth?

Citi’s 12-month price target on the Westpac share price is $29 a share. This implies a 19% upside before dividends and franking are included.

Further, the broker rates the ANZ Bank share price as its second ASX bank share option to buy. This is followed by the NAB share price, which is rated as neutral and Commonwealth Bank of Australia (ASX: CBA) share price, which Citi rates a ‘sell’.

The post This is the best ASX bank share to buy in a rising rate environment: Citi appeared first on The Motley Fool Australia.

More reading

• Hoping to bag the next Westpac dividend? Read this
• Top ASX dividend shares to buy in May 2022
• Top brokers name 3 ASX shares to sell today
• How does the ANZ dividend compare to the other ASX 200 banks?
• Inflation to ‘peak shortly’: CBA boss says markets have priced in too many rate rises

Motley Fool contributor Brendon Lau has positions in Australia & New Zealand Banking Group Limited, Commonwealth Bank of Australia, National Australia Bank Limited, and Westpac Banking Corporation. 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 Westpac Banking Corporation. 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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The Galileo Mining Ltd (ASX: GAL) share price is racing higher again on Monday.

In afternoon trade, the mineral exploration company’s shares are up a further 42% to a new multi-year high of 77 cents.

This means the Galileo Mining share price is now up 250% since the start of the month.

Why is the Galileo Mining share price storming higher?

The catalyst for the rise in the Galileo Mining share price on Monday has been news that one of the company’s major shareholders has increased their stake.

According to a change of substantial holding notice, Mark Creasy has increased his stake by 3 million shares to 44,371,895 shares. This represents an interest of 26.35%.

Mr Creasy made the move on Friday, paying an average of 58 cents per share or a total consideration of $1.74 million.

The billionaire mining prospector appears to have liked what he saw when Galileo Mining released drilling results last week.

‘Significant’ discovery

Last Wednesday, Galileo Mining revealed that it has discovered “significant” palladium, platinum, copper, gold, and nickel mineralisation at the Norseman project in Western Australia.

Drilling from 144m at hole NRC266 intersected with 33 metres at 1.64 grams per tonne (g/t) palladium, 0.28 g/t platinum, 0.09 g/t gold, 0.32% copper, and 0.3% nickel. Management believes this shows the potential for a large mineralised system.

Galileo Mining’s managing director, Brad Underwood, commented:

While we are at an early stage in the discovery process, the thick and consistent zone of mineralisation, and the extensive prospective strike length, suggests the potential for a large mineralised system.

Galileo remains fully funded with $8.2 million at the end of the March quarter and able to continue aggressive exploration programs at all our projects. We look forward to updating the market as work progresses on this exciting new West Australian discovery.

The post Why is the Galileo Mining share price jumping 42% today? appeared first on The Motley Fool Australia.

More reading

• Why did the Galileo Mining share price tumble 18% in early trading on Thursday?
• Galileo Mining share price explodes 150% on major discovery

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 Scott Phillips.

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The Westpac Banking Corp (ASX: WBC) share price has been moving in circles the past week.

Investor fears surrounding interest rate hikes, inflation, China’s COVID-19 crisis, and a global economic slowdown are impacting the markets in May.

This led the S&P/ASX 200 Index (ASX: XJO) to fall 1.27% since last Monday, despite lifting 0.19% so far today.

Westpac, on the other hand, is currently up 1.35% to $24.325.

Westpac shares set to go ex-dividend

Despite the recently volatility, investors have been buying the bank shares following the company’s half year results last week.

This is most likely because of the upcoming ex-dividend date for Westpac shares.

Investors need to buy Westpac shares before market close on Wednesday to be eligible for the interim dividend. The ex-dividend date is on Thursday 19 May.

It’s worth noting though that, historically, when a company reaches its ex-dividend day, its shares tend to fall in proportion to the dividend paid out. This is because investors tend to sell off the company’s shares after securing the dividend.

When can Westpac shareholders expect payment?

For those who are eligible for the Westpac interim dividend, shareholders will receive a payment of 61 cents per share on 24 June. The dividend is also fully franked which means shareholders will receive a portion of tax credits from this.

Furthermore, investors can elect to take up the bank’s dividend reinvestment plan (DRP) which will instead add a number of shares to their portfolios.

There is no DRP discount rate, however, price will be determined by the daily volume-weighted average (VWAP) from 25 May to 7 June.

The last election date for shareholders to opt-in to the DRP is on 23 May.

Westpac share price snapshot

In 2022, the Westpac share price has gained 14% but is down almost 4.5% over the last 12 months.

The company’s shares reached a year to date high of $24.67 last month, before moving sideways in the following weeks.

Westpac commands a market capitalisation of roughly $85 billion and has a trailing dividend yield of 4.92%.

The post Hoping to bag the next Westpac dividend? Read this appeared first on The Motley Fool Australia.

More reading

• Top ASX dividend shares to buy in May 2022
• Is the Westpac share price a smart bank buy today?
• Time is running out to secure dividends from these 3 ASX 200 shares
• 2 top ASX dividend shares experts rate as buys
• Westpac share price is a buy: Broker tips ‘strongest EPS growth in the sector’

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 recommended Westpac Banking Corporation. 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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The future of Boral Limited (ASX: BLD) shares could be unfolding as the company continues down one of five avenues outlined for its journey towards net zero.

The S&P/ASX 200 Index (ASX: XJO) building products manufacturer has been granted $30 million for a carbon capture, use, and storage (CCUS) project at its New South Wales cement and lime facilities.

Today’s news of the grant – offered by the Australian Government’s CCUS Hubs and Technologies Program – was announced by the company’s partner on the project, Calix Ltd (ASX: CXL).

At the time of writing, the Boral share price is $3.33, 1.52% higher than its previous close. For context, the ASX 200 is currently up 0.88%.

Let’s look closer at the latest on the building and construction materials producer’s pathway to net-zero emissions.

Boral granted $30m for CCUS project

Own Boral shares? You likely know the company is planning to reach net-zero emissions by 2050.

And one of the five pillars the company is using to support its climate targets is emerging CCUS technologies.

That’s good news for Calix. Boral has been granted $30 million to use the environmental technology company’s low emissions intensity lime and cement (LEILAC) technology at its NSW-based facility.

The project aims to use the technology to target 100,000 tonnes of carbon each year. It will also look into using renewable energy sources and alternative fuels to further reduce emissions.

As a result, Boral could end up producing true zero-carbon lime and cement at the facility.

Boral chief operating officer Darren Schulz commented on today’s news:

This is game changing technology for our industry and will play a critical role in supporting customers’ sustainability targets.

Boral share price snapshot

Despite today’s uptick, the Boral share price is trading considerably lower year to date.

It has tumbled 46% since the start of 2022, while the ASX 200 has slumped 6%.

The stock has also fallen 51% over the last 12 months. Meanwhile, the index has gained 1%.

The post Boral share price climbs amid ‘game changing’ carbon project appeared first on The Motley Fool Australia.

More reading

• The Boral share price has been smashed 10% so far in May. What’s happening?
• 2 ASX All Ords shares helping the planet and the back pocket
• What’s happening to the Boral share price today?

Motley Fool contributor Brooke Cooper 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 Scott Phillips.

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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.

Get out. That’s tempting investing advice with the stock market in a downward spiral. The idea is that simply getting out of the stock market altogether is the safest strategy right now.

However, reality is more complicated. Thinking about selling all your stocks? Here are two big risks you’ll face.

Missing out

Some investors have an exit strategy. They sell stocks during a correction to avoid taking an even bigger loss if a full-blown bear market occurs. There’s a significant risk, though, that the lack of an effective reentrance strategy will ultimately cost more than staying in the market.

As a case in point, I personally know someone who sold all of his stocks back in late 2008. He did so before the bottom completely fell out. This appeared to be a prudent move — for a while.

The problem, however, was that he was still too apprehensive about the market to again buy stocks in 2009. Even as the rebound picked up momentum in 2010, he continued to hesitate. Sure, he eventually did jump back in. However, he waited so long to do so that he would have been better off never selling in the first place.

You might think, “That won’t happen to me. I’ll only stay out of the market until the dust clears.” But how will you know when is the best time to invest again? The stock market is unpredictable. It can sometimes recover so quickly that even well-intentioned investors miss out on gains. Just look at the steep sell-off and rapid rebound in 2020.

Also, what will you do if you return to investing only for the market to plunge again? It’s easy for such ‘whipsaws’ to result in much greater losses than you’d incur by sticking things out.

Warren Buffett’s “swindler”

There’s also another key risk with selling all your stocks — inflation. Your money will have to be parked somewhere if you sell all your stocks. But there are few alternatives that are safe from the effects of inflation.

Warren Buffett summarized the problem well in his comments at Berkshire Hathaway‘s (NYSE: BRK.A) (NYSE: BRK.B) recent shareholder meeting. The legendary investors said, “Inflation swindles the bond investor, too. It swindles the person who keeps their cash under their mattress. It swindles almost everybody.”

As is often the case, Buffett was exactly right. You might think that you’re avoiding losing money by exiting the stock market. However, with inflation at 40-year highs, the value of those dollars parked in bonds, savings accounts, or nearly every other place will still decline.

Sure, inflation can hurt stocks as well. Many businesses, though, hold up quite well during periods of high inflation. Some have escalators in their contracts with customers that automatically increase prices based on the Consumer Price Index. Others, such as oil and gas companies right now, benefit because the higher prices contributing to rising inflation are tailwinds rather than headwinds. 

Three magic words

I won’t state that exiting the stock market altogether will definitely cause you to lose more than holding steady. Maybe you’ll be able to time the market really well. However, I do think that most investors are better off remaining invested.

There are three magic words that might seem cliched but are nonetheless excellent advice: Think long term. Great investors such as Buffett have achieved their success by adhering to those three words.

Buffett hasn’t sold all of the stocks owned by Berkshire during the recent market downturn. On the contrary, he’s investing more heavily than he’s done over the past couple of years. The ‘Oracle of Omaha’ knows that corrections and bear markets can be a blessing for long-term investors.

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

The post Thinking about selling all your stocks? Here are 2 big risks you’ll face appeared first on The Motley Fool Australia.

More reading

• Worried about inflation? Here’s what Warren Buffett says Berkshire Hathaway is doing
• 3 lessons from what Buffett didn’t say at Berkshire Hathaway’s shareholder meeting
• Warren Buffett talks cash and more at Berkshire Hathaway’s annual meeting

Keith Speights has positions in Berkshire Hathaway (B shares). The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Berkshire Hathaway (B shares). The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), and short January 2023 $265 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has recommended Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

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The Fortescue Metals Group Ltd (ASX: FMG) share price is tracking lower after its opening spike on Monday and is now trading 0.62% in the red at $19.27 apiece.

After a huge run throughout March and April this year, the Fortescue share price has slipped off the mantlepiece lately and now trades around 10% down over the past month.

Is the Fortescue share price ‘cheap’?

Analysts at JP Morgan aren’t so convinced, noting that Fortescue currently trades within ranges of the broker’s fair valuation of the company.

The broker prices Fortescue at $19 per share, in line with how investors are pricing Fortescue in the market.

JP Morgan said in a recent note:

[Fortescue] continues to trade near our [net present value] NPV. A potential reopening trade in China is positive for iron ore, but FMG continues to trade near its CY22 highs, and this positive thematic looks priced in.

While broadly in line with our NPV, the stock trades with a lower [free cash flow] FCF yield of ~8% vs mining sector peers like BHP at 12%, with FMG also on an [eventerprise value] EV/[earnings before interest, tax, depreciation and amortisation] EBITDA premium (5.4 times vs BHP at 4.4 times).

Sentiment looks low

Analysts at Bloomberg Intelligence adopt a similar posture, noting potential headwinds in the price of iron ore stemming from a slowing in the property market and Chinese demand.

Analysts Yi Zhu and Anthony Cham Fang Yau wrote:

Fortescue Metals is on track to deliver on annual shipment guidance of 185-188 million tons of iron ore in fiscal 2022 ending June.

However, revenue growth will hinge on the iron ore price in fiscal 2H, due to a slowing property sector and a potential decline in China’s crude-steel output.

The company also expects higher costs in the fiscal year due to a shortage of skilled labor, rising fuel prices and increased maintenance expenses.

Despite its positive run so far in 2022, analysts appear to be more pessimistic on the stock relative to other large miners.

Exactly 60% of coverage has it rated as a hold right now, with the remaining 40% of brokers urging their clients to sell Fortescue shares, according to Bloomberg data.

The consensus price target from this list is $17.97 per share, suggesting a small amount of downside potential if the group is right.

The post Is the Fortescue share price cheap after dropping 10% in a month? appeared first on The Motley Fool Australia.

More reading

• Why are Fortescue and green hydrogen making news again on Friday?
• Is the Fortescue share price a buy for its 16% dividend yield?
• Is the Fortescue Future Industries hydrogen dream more fantasy than feasible?
• Why is the Fortescue share price rebounding today?
• Why are ASX 200 mining shares in the green today?

Motley Fool contributor Zach Bristow 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 Scott Phillips.

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Shares of newly listed Chrysos Corp Ltd (ASX: C79) are surging on Monday and now trade well in the green at $4.73 apiece.

After a tumultuous start to its life on the ASX, Chrysos shares are rebounding with a vengeance today amid (ASX: C79) are surging on Monday and now trade well in the green at $4.73 apiece.”>the release of a company update.

In wider market moves, the S&P/ASX All Technology Index (ASX: XTX) is also rallying 3% higher on the day as tech shares begin to show signs of life once again.

What did Chrysos announce?

Chrysos advised that it has increased its total contract value (TCV) to A$559.8 million “with new international customer agreements”.

The company said that it has signed 5 new ‘PhotonAssay’ lease agreements, thereby increasing its TCV by a total of $108.6 million.

“Three new PhotonAssay leases signed with new customers Alfred H Knight and Britannia,” it said.

“[The] total number of deployed or contractually-committed PhotonAssay units rises from 33 to 38.”

The company’s CEO, Dirk Treasure, said it was an “exciting time for [the] business”.

[A]s we continue to execute our expansion plans and focus on key international mining hubs, with increasing demand, a strong pipeline of blue chip customers and our global market penetration continuing at pace, we feel the business is well positioned to meet its ongoing strategic and operational objectives.

In addition, Chrysos reports that 2 new PhotonAssay units have already been deployed with existing customers, bringing its ‘deployed unit base’ to 10.

Chrysos share price snapshot

Following its $183 million IPO roughly two weeks ago now, the Chrysos share price has been on a volatile journey.

Immediately after listing its share price sunk 40%, however, it has staged a recovery and is now trading back above its listing price.

The post Here’s why the Chrysos share price is rebounding 16% appeared first on The Motley Fool Australia.

More reading

• Chrysos Corporation share price plummets 40% on ASX debut

Motley Fool contributor Zach Bristow 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 Scott Phillips.

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At lunch on Monday, the S&P/ASX 200 Index (ASX: XJO) has started the week on a reasonably positive note. The benchmark index is currently up 0.3% to 7,096.5 points.

Here’s what is happening on the ASX 200 today:

Goodman Q3 update impresses

The Goodman Group (ASX: GMG) share price is pushing higher on Monday. This follows the release of the industrial property company’s third quarter update. That update revealed that Goodman has continued its strong form during the period. So much so, it has upgraded its earnings per share growth guidance from 20% to 23% for FY 2022.

Brambles is a takeover target

The Brambles Limited (ASX: BXB) share price is racing higher today after the logistics solutions company confirmed that it is a takeover target. However, while it is in discussions with private equity giant CVC Partners, it hasn’t received a proposal as of yet. At the rate that private equity firms are making deals, there’ll be fewer and fewer quality blue chip options for Australian investors in the coming years.

Tech shares storm higher

A key driver of the ASX 200’s gains on Monday has been the tech sector. Thanks to an explosive night of trade on the Nasdaq index on Friday, the S&P/ASX All Technology Index is up 2.5% today. Appen Ltd (ASX: APX) and Megaport Ltd (ASX: MP1) are among the best performers in the sector today.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Monday has been the Brambles share price with a 10% gain. This follows new of its takeover talks with CVC. Going the other way, the Imugene Limited (ASX: IMU) share price is the worst performer with a 5.5% decline on no news. This leaves the biotech trading within a whisker of its 52-week low.

The post ASX 200 midday update: Brambles rockets, Goodman upgrades guidance appeared first on The Motley Fool Australia.

More reading

• Here’s why the Brambles share price is rocketing 11% on Monday
• Goodman share price charges higher on Q3 update and guidance upgrade
• Brambles share price on watch as takeover talks confirmed
• Experts name 2 beaten down ASX growth shares to buy after the market meltdown
• 5 things to watch on the ASX 200 on Monday

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 Appen Ltd and MEGAPORT FPO. The Motley Fool Australia has recommended MEGAPORT FPO. 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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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.

Shiba Inu is known for two things: Its mascot, the Shiba Inu dog. And its jaw-dropping 2021 performance. The cryptocurrency surged 45,000,000% last year. It’s pretty much impossible to predict that sort of enormous short-term gain. But there are elements that can help us pick potential long-term winners in this dynamic market.

When I say winner, I’m referring to cryptocurrency players that have what it takes to attract more and more users and investors. And that eventually should lead to an increase in market value. The following two players could dwarf Shiba Inu over the long term. They offer more real-world utility. Both of the following players are blockchains that can host decentralized applications (dApps). And, unlike Shiba Inu, they aren’t limited by a massive circulating supply of tokens. Let’s check them out.

1. Ethereum

Ethereum (CRYPTO: ETH) already is a leader in the cryptocurrency market. It’s the second largest by market value after Bitcoin. But Ethereum has room to grow. And that could happen soon. Here’s why. Ethereum right now is tackling its biggest problems: transaction speed and fees. The crypto player is in the middle of a major upgrade.

The idea of the upgrade is to carry out transactions more quickly — and that will reduce congestion and costs users pay to complete operations on the network. Part of this involves a switch from the proof-of-work validation process to proof-of-stake. This puts validation power in the hands of those who have the biggest stake in Ethereum. And it eliminates the need to use tons of computer power to validate. This means an extra advantage is a greener platform.

Ethereum expects to switch over to proof-of-stake in the third or fourth quarter of this year. Then, it aims to introduce sharding next year. These chains relieve congestion on the main network. The result of the complete upgrade? Ethereum will go from today’s average of about 15 transactions per second to more than 100,000.

As I mentioned above, coin supply won’t hold Ethereum back from gains. Circulating coins total about 120 million. That’s compared to 549 trillion for Shiba Inu. Ethereum — unlike Shiba Inu — has room to grow in value without reaching an impossibly high market capitalization.

2. Cardano

One of Ethereum’s co-founders went on to launch Cardano (CRYPTO: ADA). So, we can count on a lot of the same quality in this younger player. What makes Cardano special? First, it already uses proof-of-stake to validate transactions. So, it’s already pretty fast. It can handle 250 transactions per second. And software engineers are working on a scaling solution that could greatly increase speed. 

Another positive is the way work on Cardano is unfolding. The blockchain only launches an update or something new after a peer review process. Of course, this slows down progress. But the big plus here is it avoids technical problems down the road. Once work on Cardano is complete, the system may be more reliable than other blockchains that have moved more quickly.

Right now, software engineers are working on the final two stages of Cardano development. The roadmap includes a total of five stages. The goal is to create a completely self-sustaining, decentralized system. Last fall, Cardano’s smart contract functionality launched. Right now, more than 2,600 smart contract scripts in the Plutus language exist on the network, according to Adapools.org.

Like Ethereum, Cardano’s growth isn’t limited by token supply. Cardano’s tokens in circulation total about 33.7 billion. So, Cardano could increase by five, for example, and still maintain a reasonable market value. All of this means investors in Cardano today have the opportunity to get in early — and watch the blockchain grow. 

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

The post 2 cryptocurrencies that could dwarf Shiba Inu appeared first on The Motley Fool Australia.

More reading

• Shiba Inu is down 85%, but here’s how it could recover
• How is the Bitcoin ETF (EBTC) performing compared to the ASX on Friday?
• Crypto crash: Why Bitcoin, Ethereum, and Dogecoin are struggling again
• Crypto market crash: Cardano, XRP, and Solana all take big hits again today
• How are Australia’s Ethereum and Bitcoin ETFs faring on their first day?

Adria Cimino has positions in Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin and Ethereum. The Motley Fool Australia owns and has recommended Bitcoin and Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. 

 

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

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The Bank of Queensland Ltd (ASX: BOQ) dividend received a significant boost following the company’s robust half-year results.

A bumper performance across key financial metrics reflected the strong business momentum, disciplined cost control, and improved portfolio quality.

Integration and strategic transformation were also on track and delivering results.

This led the company to give back to its shareholders, reflecting its consistent dividends policy.

Let’s see how the Bank of Queensland dividend stacks up against its rivals.

How does the Bank of Queensland dividend stack up?

Bank of Queensland is set to pay a fully franked interim dividend of 22 cents per share to eligible investors on 26 May.

However, according to Goldman Sachs, the bank is expected to declare a final dividend of 23 cents per share. This will bring the total FY22 dividend amount to 45 cents per share.

Based on the current Bank of Queensland share price of $7.51, this gives a forecast trailing dividend yield of 5.99%.

What about its competitors?

The company’s main direct competitors are Bendigo and Adelaide Bank Ltd (ASX: BEN) and the big four banks. They include Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group Ltd (ASX: ANZ), and National Australia Bank Ltd (ASX: NAB).

By comparison, Bendigo Bank rewarded its shareholders with a fully franked interim dividend of 26.5 cents per share.

Goldman Sachs estimates the bank to maintain its final dividend at 26.5 cents per share, bringing the full-year dividend to 53 cents.

Bendigo Bank shares are exchanging hands at $10.34, which gives it a dividend yield of 5.12%.

Another competitor in the sector, ANZ, is on track to distribute an interim dividend of 72 cents per share to shareholders on 1 July. The company’s forecasted final dividend for FY22 is predicted to be around 73 cents on Goldman Sachs’ watch.

This translates to a full-year dividend of $1.45.

Calculating using the last price of $25.59 for ANZ shares, this is a dividend yield of 5.66%. 

Comparing the Bank of Queensland dividend yield against its peers may be one point to consider when investing. However, it is important to also look at the total shareholder return for the past 12 months.

As such, Bank of Queensland shares have fallen 14% for the period, while Bendigo Bank’s have moved up 1%.

When looking at ANZ shares, they have dropped around 7%.

Are Bank of Queensland shares a buy?

A couple of brokers weighed in after the bank revealed its half-year financial performance in mid-April.

Goldman Sachs analysts believe Bank of Queensland shares still have a potential upside despite the broker cutting its 12-month price target. The broker slashed its rating by 5.1% to $9.34 for the company, which implies an upside of roughly 25%.

On the other hand, Credit Suisse also reduced its price target by 12% to $10.00 apiece. This represents an upside of around 34% from where the regional bank’s shares last traded.

On valuation grounds, Bank of Queensland commands a market capitalisation of roughly $4.8 billion.

The post How does the Bank of Queensland dividend compare to the other ASX 200 banks? appeared first on The Motley Fool Australia.

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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 positions in and has recommended Bendigo and Adelaide Bank Limited. The Motley Fool Australia has recommended Westpac Banking Corporation. 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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