Month: May 2022

The Tabcorp Holdings Limited (ASX: TAH) share price has crashed significantly lower on Tuesday morning.

In early trade, the gaming company’s shares are down a massive 82% to 93 cents.

Why is the Tabcorp share price crashing?

The good news for shareholders is that the weakness in the Tabcorp share price has nothing to do with the company’s performance or a broker downgrade.

Today’s decline has been driven by the demerger of its lottery and Keno businesses into a separate listed entity – The Lottery Corporation Limited (ASX: TLC).

This was a major part of the Tabcorp business, contributing 55% or $611 million of Tabcorp’s EBITDA in FY 2021. So, with this EBITDA removed from the Tabcorp business, its shares have fallen to reflect this.

In exchange, existing eligible shareholders have been issued shares in the Lottery Corporation.

Management notes that The Lottery Corporation is an omni-channel business with a portfolio of high profile, recognised brands and games, strong digital growth and a retail footprint across ~7,000 retail outlets/venues. This makes it one of the largest in the country.

At listing, there will be 2,225,771,703 The Lottery Corporation shares on issue. So with the company’s shares expected to open around the $5.00 mark, this will value the spin off at ~$11 billion. This compares to a ~$12 billion valuation for pre-demerger Tabcorp.

What’s left of Tabcorp?

Tabcorp has been left with its wager and media and gaming services businesses, which generated revenue of $2,493 million and EBITDA of $464 million in FY 2021.

It will be a leader in omni-channel wagering, racing and sports broadcasting, and gaming services solutions. Management believes the business is well positioned for organic growth and potential upside from possible changes in the wagering and gaming industry.

The post Why is the Tabcorp share price crashing 82%? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• Here are the 3 most traded ASX 200 shares on Monday
• Here’s why the Tabcorp share price is lifting on Wednesday
• Tabcorp share price rangebound following lotto demerger vote
• Here are the 3 most heavily traded ASX 200 shares on Tuesday

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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If you’re wanting to bag the upcoming BHP Group Ltd (ASX: BHP) dividend, then you’ll need to act fast.

Today is the final day to buy shares to be eligible for the mining giant’s special dividend.

What is the next BHP dividend?

Last week BHP revealed that Woodside Petroleum Limited (ASX: WPL) shareholders have voted in favour of merging with the Big Australian’s petroleum assets.

This transformative deal will see Woodside become a top 10 global energy producer with over 2 billion barrels of proven and probable reserves and annual EBITDA approaching US$5 billion.

As part of the merger, Woodside is issuing BHP with 914,768,948 new shares, which have a value of approximately $26.5 billion today.

However, BHP isn’t keeping these shares, it will be distributing them to eligible shareholders via an in-specie dividend. An in-specie dividend is a dividend that is paid in assets rather than cash.

What’s next?

The latest BHP dividend will see shareholders receive one new Woodside share for every 5.534 BHP shares they hold on the ex-dividend date (Wednesday). From that date onwards, the dividends will remain with the seller if you were to buy shares. This means today is the final day to act.

It is also worth noting that any entitlement to a fraction of a Woodside share will be rounded down to the nearest whole share.

This means that if you own 200 BHP shares, you will receive 36 new Woodside shares and not 36.14 shares when they are distributed to shareholders on Wednesday 1 June. This is when the merger is expected to complete.

Those new shares will then commence normal trading on the ASX boards a day later on Thursday 2 June.

After which, BHP shareholders can look forward to the mining giant’s final dividend in September. And judging by the amount of free cash flow it is generating, this looks set to be another bumper payout for them.

The post Keen to bag the special BHP dividend? Here’s what you need to do appeared first on The Motley Fool Australia.

More reading

• What might a Labor government mean for ASX energy shares?
• Why is the Woodside share price having such a strong start to the week?
• How are ASX 200 mining shares responding to the election outcome?
• 2 ASX energy shares that brokers rate as buys for exposure to sky high oil prices
• 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 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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Regardless of travelling sideways in 2022, the Cochlear Ltd (ASX: COH) share price has rocketed throughout the past decade.

In fact, the hearing solutions company’s shares have almost quadrupled in value, representing strong long-term growth.

During August 2021, Cochlear shares reached an all-time high of $257.76 before travelling lower soon afterwards. While the company’s shares have somewhat recovered, they are still a tad off moving again into uncharted territory for now.

Nonetheless, let’s wind the clock back and see how much you would have made if you’d invested $10,000 in Cochlear shares 10 years ago.

How much would your initial investment be worth now?

If you’d spent $10,000 on Cochlear shares this time in 2012, you would have bought them up for $61.86 each. The long-term investment would have given you approximately 161 shares without reinvesting the dividends or topping up along the way.

Looking at yesterday’s market close, the Cochlear share price finished at $219.33 apiece.

This means that those 161 shares would be worth $35,312.13 right now.

In percentage terms, the initial investment implies a return of about 253% or an average return of 13.45% per year.

On the other hand, if you’d invested the same amount into an ASX 200 index-tracking fund, this would have netted you $17,577.82.

Going back to percentages, this represents a gain of 75% or a yearly average of 5.80% across a 10-year period.

What about Cochlear’s dividends?

From 2012 to halfway through 2022, Cochlear has made a total of 19 bi-annual dividend payments to shareholders.

Its most recent dividend distribution was its third highest interim dividend declared by the board despite COVID-19 disruptions.

Adding those 19 dividend payments gives us a total amount of $25.21 per share. Calculating the number of shares owned against the dividend payments gives us a figure of $4,058.81.

When putting both the initial investment gains and dividend distribution, you would have roughly $39,370.94 or $29,370.94 profit.

As you can see, investing in Cochlear shares would have almost quadrupled what you would have gotten from investing in an ASX 200 index-tracking fund ($29,370.94 vs. $7,577.82).

Cochlear share price snapshot

Over the past 12 months, the Cochlear share price has edged 1% higher and is up around 1.5% year to date.

Cochlear has a price-to-earnings (P/E) ratio of 54.64 and commands a market capitalisation of roughly $14.19 billion.

The post Think Cochlear shares are boring? That might change when you see what $10,000 invested 10 years ago is worth now appeared first on The Motley Fool Australia.

More reading

• Down 8% in a week, is the Cochlear share price in the buy zone?
• Analysts say these top ASX growth shares are buys
• Broker says the Cochlear share price is in the buy zone following Oticon acquisition
• Top brokers name 3 ASX shares to buy today
• 2 medical tech ASX shares Morgans loves right now

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 positions in and has recommended Cochlear Ltd. The Motley Fool Australia has recommended Cochlear 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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The Medibank Private Ltd (ASX: MPL) share price is in the red year to date, but what could be on the cards for its future?

The company’s share price has slid 3.88% this year and is trading at $3.22. For perspective, the S&P/ASX 200 Index (ASX: XJO) has also dropped 3.97% so far this year.

Let’s take a look at what is happening at Medibank.

Takeover target?

Rumours have emerged that Medibank Private has been confronted with a takeover offer. A private equity firm recently approached Medibank about buying its healthcare services business, The Australian reported.

However, the publication speculated the offer may have been rejected quickly due to the company’s plans to grow healthcare services.

In a May presentation at the Macquarie conference in Sydney, Medibank CEO David Koczkar highlighted the private health insurer is building on telehealth, primary care, short stay, and home care.

Medibank highlighted in the financial year to date, resident policyholders have increased by 2.3% or 42,900 as of 30 April 2022. In FY22, the company is hoping to achieve 3.1-3.3% policyholder growth overall.

The company said: “Targeted inorganic growth for Medibank Health and Health Insurance remain areas of focus.”

Medibank recently announced it will publish full-year results on 18 August. The company’s final dividend will be paid on 22 September.

Medibank share price snapshot

The Medibank share price has ascended by almost 4% in the past year, while it is up almost 1% in the past month.

For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has returned nearly 2% in the past year.

Medibank has a a market capitalisation of about $8.9 billion based on today’s share price.

The post The Medibank share price has struggled in 2022. Could the company be a takeover target? appeared first on The Motley Fool Australia.

More reading

• Why is the Medibank share price struggling to gain ground in May?
• Own Medibank shares? Here’s what to watch over the coming months
• How big will the Medibank dividend be in 2022?
• The Medibank share price has leapt 5% in a month. Could it be on the comeback trail in May?
• This ASX 200 healthcare share has a fully franked dividend yield over 4% right now

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 Elders Ltd (ASX: ELD) share price stormed higher following the company’s half year results yesterday.

At Monday’s market close, the agribusiness company’s shares finished up 8.91% to $14.92.

For context, the S&P/ASX 200 Index (ASX: XJO) ended slightly in the green, up 0.05% to 7,148.9 points.

A quick breakdown on Elders’ half year result

In the half year report for the 2022 financial year, Elders reported double-digit growth across key financial metrics.

In summary, sales revenue soared 38% to $1,514.8 million over the previous corresponding period.

Management stated the robust performance of its rural products business was driven by pent-up demand for fertiliser and crop protection products. This came off the back of favourable seasonal conditions across key cropping regions.

On the bottom line, Elders recorded a net profit after tax (NPAT) of $91.2 million. This represents an increase of 34% from this time last year.

Based on the company’s profit above, the Elders board declared a 30% franked interim dividend of 28 cents per share. This reflects a 40% jump from the 20 cents announced in the prior comparable period.

Notably, this is the highest ever dividend that the company is set to pay to shareholders.

Management indicated that the latest dividend is consistent with its stated target dividend payout ratio of between 40% and 60%.

When can shareholders expect payment?

The Elders interim dividend will be paid to eligible shareholders roughly 3 and a half weeks away on 17 June.

However, to be eligible, you’ll need to own Elders shares before the ex-dividend date which falls on 30 May. This means if you want to secure the dividend, you will need to purchase Elders shares this Friday at the latest.

In addition, investors can elect for the dividend reinvestment plan (DRP) which will add a portion of shares to their portfolio instead. This will be based on a 10-day volume-weighted average price from 31 May to 9 June.

There is no DRP discount rate and the last election date for shareholders to opt-in is on 2 June.

The post This ASX 200 company just hiked its latest dividend by almost 70%, here’s what you need to know appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX shares today
• 3 ASX All Ordinaries shares starting the week with new 52-week highs
• Why BrainChip, Codan, Elders, and Karoon Energy are storming higher
• ASX 200 midday update: Elders and Codan rocket, Incitec Pivot disappoints
• Elders share price jumps 9% on stellar first-half profit growth

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 Elders 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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The Qantas Airways Limited (ASX: QAN) share price will be keenly watched on Tuesday after the company announced a major acquisition this morning.

The airline revealed that it had purchased a 51% stake in “fast-growing online travel business” TripADeal.

The deal gives Qantas a foot into the $13 billion online packaged holidays market, which the airline says is “experiencing significant growth as leisure demand booms”.

“This is a great opportunity at the perfect time,” said Qantas chief executive Alan Joyce.

“Coming out of the pandemic, people want a holiday experience that is special but also tried and tested, and there is a huge shift to booking online.”

Existing owners — TripADeal co-founders Norm Black and Richard Johnston plus private equity firm BGH Capital — retain minority stakes.

The acquisition price was not disclosed, although it may show up in Qantas financial reports later in the year.

The deal gives the airline an option to buy the remaining 49% in four years’ time at “an agreed multiple of TripADeal’s bookings at the time”.

The acquisition is the second in May for Qantas, which reached an agreement to buy out fellow ASX-listed company Alliance Aviation Services Ltd (ASX: AQZ) three weeks ago. The Qantas share price edged slightly into the red on the news.

Fast-growing online business

Before the COVID-19 pandemic, TripADeal reportedly had an annual growth rate of more than 40%. 

Qantas claimed the company had booked more than $200 million worth of services in the 12 months prior to the impact of coronavirus.

“It’s an Aussie success story built on delivering ready-made holidays at very sharp prices, and their level of repeat customers shows how well they do it,” said Joyce.

“Buying a majority stake at the same time means we can benefit from the strong growth that’s going to follow as a result.”

Black said TripADeal already had a close relationship with Qantas.

“Qantas understands why TripADeal is different and what makes it a success, which is why we chose to do this deal with them.”

The Qantas share price has risen 6% so far this year, and 15.7% over the past 12 months. 

Loyalty points an integral part of deal

The airline emphasised the benefits of how customers can now earn Qantas frequent flyer points through bookings made via TripADeal.

Johnston said it was a feature that would boost the online business.

“It’s taken a decade for us to build the relationships direct with suppliers to be able to offer all the experiences we have, and the ability to now use Qantas Points for that is really going to drive our growth in the years ahead.”

According to Joyce, the loyalty points business was a saviour for Qantas while its planes were grounded during the pandemic.

“Despite the lack of flying, members earned and used large volumes of points on the ground, customer satisfaction reached record levels and the business delivered strong earnings for the group,” he said.

“I don’t think any other airline loyalty program managed to do that.”

The post Qantas share price on watch after massive acquisition appeared first on The Motley Fool Australia.

More reading

• 2 ASX blue-chip shares this top fund manager thinks are good value
• ‘Never waste a crisis’: Expert picks one ASX share he’d buy right now
• Zip just joined forces with another ASX 200 company
• Ready for takeoff? Top broker sees smooth runway for Qantas shares in 2022
• 4 ASX shares of the most trusted brands in Australia

Motley Fool contributor Tony Yoo 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 Alliance Aviation Services Ltd. The Motley Fool Australia has positions in and has recommended Alliance Aviation Services 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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The Xero Limited (ASX: XRO) share price has seen a lot of volatility this year. Could the ASX tech share be an opportunity after its decline?

Since the beginning of the 2022 calendar year, Xero shares have fallen almost 40%. But they have recovered since 12 May – up 18% since then.

What has happened to the Xero share price?

ASX shareholders — including those of Xero — are facing uncertainty due to factors such as the Russian invasion of Ukraine, strong inflation, and the prospect of higher interest rates by central banks, including the Reserve Bank of Australia (RBA).

But earlier this month, Xero also reported its FY22 full-year result. Investors pay particular attention to the progress a business has made and its expectations for the near future, which can impact the Xero share price.

The company reported further growth. Subscribers rose by 19% to 3.27 million, which helped operating revenue rise by 29% to NZ$1.1 billion.

Average revenue per user (ARPU) went up by 7% to NZ$31.36 and the annualised monthly recurring revenue (AMRR) grew by 28% to NZ$1.23 billion.

The company’s growing scale led to the gross profit margin increasing by a further 1.3 percentage points to 87.3%.

Ongoing focus on investing for growth

Xero is focused on a number of areas to keep growing. One of the key areas is growing its customer numbers with marketing spending, which the company said had a positive impact on subscriber additions and brand awareness across its global operations.

The ASX tech share said it has taken the opportunity to develop a range of new approaches to engage with customers and partners, such as its recently announced partnership with FIFA women’s football.

Xero is also investing heavily in product design and development, which increased by 49% to $372 million, representing 33.9% of operating revenue. Management said investments in product and technology are aligned with Xero’s long-term ambitions, such as production localisation in a number of international markets and future innovation in areas such as platform, ecosystem, and integration of acquisitions.

Xero CEO Steve Vamos said:

Our strong revenue and subscriber growth gives us confidence to continue to invest for growth consistent with our long-term strategy.

Our performance reflects the quality of our customer and partner relationships as more people realise the benefits that cloud accounting and digital tools provide.

We are committed to delivering the world’s most insightful and trusted small business platform by focusing on driving cloud accounting adoption, growing the small business platform and building for global scale and innovation.

We continue to prioritise investment in building products and growing partnerships by investing cash generated to help deliver our strategy, drive long-term growth and meet customer needs.

Is the Xero share price good value?

Brokers are somewhat mixed on the business.

Citi thinks Xero is a buy, with a price target of $108, with one positive being the potential growth in the UK as businesses go digital with taxation compliance.

However, UBS rates the business as a sell with a price target of just $70. The broker noted that cash flow is low (Xero made NZ$2 million of free cash flow in FY22). However, it also noted that changes in the foreign currency could help revenue in FY23.

The Xero share price closed at $90.48 on Monday.

The post Do experts think the Xero share price is a buy? appeared first on The Motley Fool Australia.

More reading

• Analysts name 2 ASX growth shares to buy now
• What’s happening with ASX 200 tech shares today?
• Why this ASX 200 share is my biggest personal holding: fund manager
• 2 beaten down ASX tech shares analysts say have major upside potential
• Leading brokers name 3 ASX shares to sell today

Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Xero. 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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Ask A Fund Manager

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In this edition, Catapult Wealth portfolio manager Tim Haselum tells investors to not be anxious about timing.

Investment style

The Motley Fool: How would you describe your services to a potential client?

Tim Haselum: My name’s Tim Haselum. I’m the portfolio manager here at Catapult Wealth. Essentially what I do is I run the model portfolios and the investment recommendations across five portfolios. 

My day-to-day really is just being the filter between research providers and market noise, and sticking to our fundamental investment philosophy and rolling it out to the client. 

Situations like now, people are panicking but the plan should have been agreed to and aligned before this. The whole “Should I buy high, sell low?” — that conversation had to have happened before and now it’s just sticking to the guns and making sure we’re true to the values in terms of what we provide to the client.

MF: With the model portfolio, what sort of investment philosophy do you take?

TH: Our philosophy, essentially the short version, is to be nimble. 

You think about what we’ve seen in the last 10 years, well, value has underperformed growth and I’d say part of the reason, besides low interest rates and [the] tech boom, would be a lot of these companies have been propped up by governments, haven’t been allowed to exit out the index. The value index is very artificial. 

We’ve now seen an interest rate rise, and growth has been actually annihilated, right? The ASX is absolutely destroyed. 

So I think the lesson we’ve learned is you need to have flexibility. Not quite style-neutral, but flexibility. But in our core, in saying that, our main mantras are quality, value buyers, and momentum, and so to us when we talk about quality, we’re talking about filtering out really high leveraged companies, low profitability, very volatile, unpredictable earnings, and then having a slight bias for value. That includes the growth space.

We try [to] look at tech companies that have earnings, and look like they have the momentum to grow the earnings. After we take those two filters, it’s a pure momentum play in terms of the timing of in and out. We want timing for buys and sells. We don’t want to buy on a downtrend, so you do miss, you might miss the bottom, but we want to see the positive moods before we jump in, so we avoid some of these value traps. 

Missing the very bottom is okay, as long as you don’t just get stuck in an AMP Ltd (ASX: AMP) or something like that where it looks like it’s not likely to jump back anytime soon.

We don’t want quality companies that are expensive, and we don’t want poor quality companies that are cheap. For us overall, it’s strategic asset allocation first and foremost, and then style after that.

MF: Are you seeing anxiety among your clients at the moment?

TH: Our client base is quite experienced. But I would say a lot of clients are more itching [to buy]. They’re like, “Oh look, we’ve got some cash. Should we jump in now? Should we jump in now?” 

I think given that we’ve been through COVID and it was such a V-shaped recovery, I guess clients are like, “Well, maybe it’s a V-shape recovery again”. They just want to jump on the bandwagon. 

We’ve had the likes of crypto and certain stocks just shoot up through the stratosphere and so it’s just tempering that and being cautious… is more what we’re doing now.

MF: You personally feel like the stock market recovery will take a little bit longer than back in 2020?

TH: I think it’s too early to tell, because we’ve just had one rate rise so far in Australia. The US is going, but we are very, very early on in this rising cycle. 

Historically [we’ve] seen that, even though we’ll see jitters after the first rate rise, markets just stabilise and then [it] shoots back up again. 

But once the weight of these rate rises start to accumulate and then you might see corporates downgrade their needs. That’s when you see this continuation of the bear market from what could just be a short-term correction.

It’s just that if what the [US Federal Reserve] is saying, soft landing, if some of this issue is transitory, if supply chains can come back online, if China changes their tune on zero-COVID, well perhaps [shares will recover]. 

But what we’re seeing, it’s very early to tell. Don’t burn all your dry powder all in one go.

The post Why missing the market bottom is okay: expert appeared first on The Motley Fool Australia.

More reading

• When might the dividend drought break for AMP shares?
• What was the highest ever AMP share price?
• Why this top broker says the AMP share price is 27% over-valued
• Top brokers name 3 ASX shares to sell next week
• Could the worst now be over for the AMP share price?

Motley Fool contributor Tony Yoo 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 term ‘bear market‘ will invariably send some shivers up the spines of many an ASX investor. Although there will be many Warren Buffett disciples out there that will tell you buying when there is blood on the streets is the quickest way to share market riches, the reality is that most investors like to see their shares go up in value and not down. But a bear market means a falling market. It is technically defined as a market that has retreated by more than 20% from its most recent high.

Now, the S&P/ASX 200 Index (ASX: XJO) is not in bear market territory yet. Yes, the past few weeks have been nasty. But since topping out at 7,632.8 points last August, the ASX 200 has fallen only 6.4% away from that high on today’s pricing. Even when the ASX 200 hit the ‘6000s’ earlier this month, we only got to falls of around 9%.

That stands in stark contrast to the US markets right now. Last Friday saw the flagship S&P 500 Index (INDEXSP: .INX) enter bear market territory for the first time since the COVID crash of 2020. Although the US markets saw a late uptick on Friday night (our time), it wasn’t enough to prevent the S&P 500 from recording a 20% drop from its most recent peak during the trading session. The US’s tech-heavy NASDAQ-100 (INDEXNASDAQ: NDX) has already entered bear market territory recently.

So is a grizzly bear market coming for ASX shares? Or is this just a cub for Aussies?

Is an ASX bear market coming?

Well, according to an article in The Age yesterday, it could, unfortunately, be the former. Financial writer Matthew Lynn describes the possibility of an ASX bear market as looking “inevitable”. Here’s how he described the situation as he sees it:

Why? Because bear markets triggered by recessions are always the worst, and we are now heading for a deep downturn; because valuations were already crazily over-stretched at the peak; and because policymakers are completely out of ammunition to counter the sell-off in equities. Then, add it all up and the market rout could well turn into one of the worst in post-war history…

It might not necessarily match 1973 with its 48 per cent fall. But neither does it look like a mild correction before equities start to march higher again. There is still a lot of pain ahead – and this bear market will be a big one.

Well, not exactly a rosy outlook for ASX shares there, to be sure. Yes, there is always the possibility of a bear market and a protracted period of sub-optimal returns from shares. But that’s just a normal and accepted part of investing. History shows us that ASX bear markets are a regular occurrence. But it also shows us that markets have never before failed to reach and exceed previous highs. 

The post Is a big scary bear coming for ASX 200 shares, or could it be just a playful cub? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• This fundie has beaten the ASX 200 every year for the past 2 decades. Here’s how
• Here are the top 10 ASX shares today
• Why have ASX 200 shares popped then dropped on Monday?
• ASX 200 midday update: Elders and Codan rocket, Incitec Pivot disappoints

Motley Fool contributor Sebastian Bowen 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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Are you looking for some dividend options for your portfolio? If you are, check out the two ASX 200 shares listed below.

Here’s why these ASX dividend shares have been tipped to as buys:

Rio Tinto Limited (ASX: RIO)

The first ASX 200 dividend share to look at is mining giant Rio Tinto. It could be a top option thanks to strong commodity prices, which are underpinning bumper free cash flows this year.

Goldman Sachs is a fan of the company and has a buy rating and $135.10 price target on its shares. It likes Rio Tinto due to its attractive valuation, strong free cash flow, production growth potential, and compelling low emission aluminium exposure through its ELYSIS inert anode technology. The broker believes this technology could be worth billions.

As for dividends, the broker is forecasting fully franked dividends of approximately US$9.00 per share in FY 2022 and FY 2023. Based on the current Rio Tinto share price of $109.50 and current exchange rates, this will mean yields of approximately 11.5%.

Telstra Corporation Ltd (ASX: TLS)

Another ASX 200 dividend share that could be a top option for income investors is telco giant, Telstra. Especially considering that its outlook is now the most positive it has been in over a decade.

For example, earlier this year the company released its half year results and reported underlying earnings growth for the first time in many years.

Pleasingly, thanks to the success of its T22 strategy and its very promising upcoming T25 strategy, Telstra is expecting to deliver solid and sustainable earnings growth over the coming years.

It is thanks largely to this that the team at Morgans currently have an add rating and $4.56 price target on the company’s shares.

Morgans also continues to forecast fully franked dividends per share of 16 cents in FY 2022 and FY 2023. Based on the current Telstra share price of $3.92, this will mean yields of 4.1% for investors.

The post Analysts rate these ASX 200 dividend shares as buys 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 Telstra Corporation 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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