Month: May 2022

The Commonwealth Bank of Australia (ASX: CBA) share price is one of the most widely followed on the S&P/ASX 200 Index (ASX: XJO).

That could be for one or more of several reasons. CBA’s old status as the biggest share on the ASX perhaps. Or its place as the largest of the ASX’s big four banks, and with the most market share. It could even be due to the fact that CommBank used to be a government-owned company.

Whatever the reason, the bank is a popular flagship share of the ASX 200. This is why many investors might find the idea of the CBA share price falling a painful one. Investors have been used to some decent returns from Commonwealth Bank shares. This was a bank that rose more than 20% last year, after all. Over the past five years, CBA shares remain up almost 30%. And that’s not including the generous dividends (and franking credits) that have been paid along the way.

But perhaps the good times are coming to an end, at least for a while. That’s the view of more than one broker on the ASX. So is it buy or sell for the CBA share price today?

CBA share price: Buy or sell?

Well, broker Goldman Sachs is firmly in the latter camp. Goldman has rated the bank as a sell for a while now. As my Fool colleague James covered recently, it has recently raised its 12-month share price target to $89.86, while maintaining its sell rating. If that were to play out, CBA shares would be facing a fall of around 13% over the next year.

Goldman reckons the CBA share price is just too expensive and notes that the bank I “more exposed to sector-wide headwinds” than its rivals.

Brokers at Macquarie largely agree. Macquarie also has a bearish ‘underperform’ rating on CBA shares right now. As we covered last week, the investment bank has a $90 share price target to match its underperform rating.

Macquarie also believes CommBank shares are expensive, and reckons the bank could struggle to match the performance of its rivals going forward, and thus shouldn’t be commanding today’s share price premium.

Perhaps that’s not what CBA investors might want to hear today, but that is the view of two of the ASX’s most prominent brokers. Time will only tell if their predictions turn out to be accurate.

At the current CBA share price, this ASX 200 bank has a market capitalisation of $174.53 billion, with a dividend yield of 3.63%.

The post Here’s why the CBA share price could soon be in for some pain appeared first on The Motley Fool Australia.

More reading

• Brokers: 2 ASX 200 shares that could be top buys for growth
• Here are the 3 most heavily traded ASX 200 shares on Monday
• Why is the ASX 200 giving back the morning’s gains on Monday?
• This is the best ASX bank share to buy in a rising rate environment: Citi
• ASX 200 midday update: Brambles rockets, Goodman upgrades guidance

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 positions in and has recommended Goldman Sachs. 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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BHP Group Ltd (ASX: BHP) is one of the biggest businesses in the world. It has a market capitalisation of $232 billion according to the ASX. But, how big is the dividend yield going to be?

In 2021, BHP was actually the largest dividend payer in the world. But that’s now history. What could the 2022 and 2023 dividends look like?

What we already know

A few months ago, BHP declared an interim dividend of US$1.50 per share with its FY22 half-year result. That was a 49% increase in the dividend compared to the prior corresponding period.

The dividend growth came after a significant rise in BHP’s profit. It reported that attributable profit rose 144% to US$9.4 billion, with net operating cash flow increasing by 42% to US$13.3 billion.

Continuing operations profit from operations jumped 50% to US$14.8 billion while continuing operations underlying attributable profit increased 57% to US$9.7 billion. The continuing operations underlying earnings per share (EPS) went up 57% to US$1.92. This means that BHP paid out 78% of its continuing operations underlying EPS.

BHP said that its record interim dividend was supported by its “reliable operating performance and continued strong markets” for a number of its resources.

How big could the dividend be in 2022 and 2023?

Ultimately, it’s up to the board of BHP to decide on dividend payments. The strength of commodity prices, profit, cash flow and the balance sheet can be influencers on the size of the dividend.

In Australian dollar terms, Commsec numbers suggest a dividend of $4.53 per share could be paid in FY22. That translates into a potential grossed-up dividend yield of 14.2%.

Then, in FY23 the forecast on Commsec shows a potential annual dividend of $3.23 per share. That would represent a grossed-up dividend yield of 10.2%.

But Commsec isn’t the only place with dividend estimates for BHP.

The broker Citi thinks that BHP could pay a grossed-up dividend yield of 15.1% in FY22. In FY23, the Citi estimate for the BHP dividend translates into a grossed-up dividend yield of 14.6%.

There’s another broker with an even larger forecast. Credit Suisse thinks that BHP could pay a grossed-up dividend yield of 16.2% in FY22 and 15.5% in FY23.

Is the BHP share price a buy?

The brokers at Macquarie think so, with a buy rating and a price target of $60. That implies a possible rise of around 30%.

Macquarie thinks that the BHP share price will benefit after it divests its petroleum assets to Woodside Petroleum Limited (ASX: WPL). It’s thought that investors that can’t invest in BHP because of environmental, social, and corporate governance (ESG) reasons will then be able to invest in the business.

The broker thinks that BHP has a positive future with exposure to commodities like nickel, copper and potash in a lower emissions world.

However, Credit Suisse is neutral on the business with a price target of $50.

Citi rates BHP as a buy, with a price target of $56.

The post How big is the BHP dividend yield going to be in 2022 and 2023? appeared first on The Motley Fool Australia.

More reading

• Which ASX 200 mining share has the highest dividend yield in May?
• Top ASX dividend shares to buy in May 2022
• Is the BHP share price too exposed to the downside risks of China?
• Brokers name 2 ASX 200 dividend shares to buy now
• Why are ASX 200 mining shares in the green today?

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 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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You’d have to be living under a rock of some description if you hadn’t noticed the attention that ASX lithium stocks have been getting from investors in recent months and years. Lithium has been one of the hottest areas investors have been looking at on the markets over 2021 and 2022. You only have to look at the share prices of ASX lithium stocks like Pilbara Minerals Ltd (ASX: PLS) to see why.

Back in late 2020, Pilbara was a company with a share price under $1. Fast forward to January of this year and we were seeing Pilbara shares close to $4 each. The company has cooled off since then, closing today at $2.60. We’ve seen similar patterns emerge for other companies in the lithium space, such as Core Lithium Ltd (ASX: CXO) and AVZ Minerals Ltd (ASX: AVZ). But this still proves how much attention (and cash) ASX lithium stocks like Pilbara and its peers have gotten in recent times.

As you might guess, excitement about the global transition to electric vehicles and renewable energy, as well as emerging battery technology, are likely behind this increase in interest. But buying lithium stocks is an investment in a business at the end of the day. And ASX investors still have expectations when it comes to their ASX businesses. One of these is dividend income.

Most ASX shares pay dividends of some sort. That is arguably because ASX investors expect to receive dividend income (as well as franking credits) from their shares.

Do ASX lithium stocks pay dividends?

So how do ASX lithium stocks hold up in this regard?

Not well, to sum it up. For a company to pay a dividend, usually it must first develop strong, consistent cash flows. And most of the companies in the ASX lithium space are yet to achieve such a milestone. Many are not yet even consistently profitable. That’s why Core Lithium and AVZ Minerals don’t even have price-to-earnings (P/E) ratios yet. There are no earnings to speak of.

There is one exception though. Mineral Resources Limited (ASX: MIN) is not a pure-play lithium company. It has interests in a wide range of commodities and projects. However, one of those is lithium. Mineral Resources owns two hard rock lithium mines in Western Australia.

This company is also a historical dividend payer. Mineral Resources has doled out two dividends per year for over a decade. That included through 2020. Saying that, the company did skip an interim dividend in 2022, citing “volatile conditions in the iron ore market”. That was the first time it has missed a dividend in over a decade. So even with this sole dividend payer in the lithium space, income can’t be guaranteed.

So if an ASX investor is seeking regular dividend income, perhaps ASX lithium stocks might not be the best place to look.

The post Do any ASX lithium stocks pay dividends? appeared first on The Motley Fool Australia.

More reading

• Here are the 3 most heavily traded ASX 200 shares on Monday
• Why Brambles, Core Lithium, Infomedia, and Qube shares are charging higher
• The Mineral Resources share price has dumped 13% in a month. Time to dig in?
• Why are ASX lithium shares off to such a flying start this week?
• Why is the Core Lithium share price charging 7% higher?

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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The Webjet Limited (ASX: WEB) share price showed off against most of the S&P/ASX 200 Index (ASX: XJO) today.

And it wasn’t alone in the green. The online travel agent’s stock surged alongside many of its travel sector peers.

At Monday’s close, the Webjet share price was trading at $5.64, 3.11% higher than its previous close.

For context, the ASX 200 ended the day 0.27% higher.

Let’s take a closer look at what might be going on with ASX travel shares today.

What’s driving the Webjet share price higher?

The Webjet share price gained on Monday. Its movement came as the market digested the latest news from one of the world’s biggest airlines.

The Dubai-based Emirates airline released its annual results on Friday, leaving ASX participants to deliberate on its performance over the weekend.

The unlisted airline posted a notable recovery from its previous results in which it reported a US$5.5 billion loss, reports Reuters. This time around, Emirates’ loss came to around US$1.1 billion.

The company’s revenue also increased 91% on that of the prior 12 months while its earnings before interest, tax, depreciation, and amortisation (EBITDA) improved 282%.

The improvements came amid a recovery from COVID-19 international travel restrictions and despite increased oil prices and inflation.

That’s likely good news for the ASX travel sector and for Webjet in particular.

The online travel agent is due to release its full year earnings on Thursday.

The Webjet share price was far from the only ASX 200 travel stock trading higher today.

The share prices of Flight Centre Travel Group Ltd (ASX: FLT) and Qantas Airways Limited (ASX: QAN) share price closed 1.9% and 1.7% higher respectively.

Meanwhile, stock in Corporate Travel Management Ltd (ASX: CTD) outperformed the lot. It gained 3.4% on Monday.

The post Why is the Webjet share price outperforming on Monday? appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• Top brokers name 3 ASX shares to buy next week
• Here are 2 ASX growth shares experts have named as buys
• Broker says Webjet share price is a buy ahead of its FY22 results
• Own Webjet shares? Here’s what to expect from next week’s FY22 results

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 recommended Corporate Travel Management Limited, Flight Centre Travel Group Limited, and 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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The Wesfarmers Ltd (ASX: WES) share price has been rangebound on Monday and remains bottom-heavy at $49.56, down 0.81%.

After dropping sharply from the open, Wesfarmers’ shares managed to claw back from a low of $49.36 in early trade.

What’s up with the Wesfarmers share price?

Whilst ASX consumer discretionary shares are generally trading higher today, Wesfarmers shares have slipped lower.

Despite no market-sensitive updates, analysts at Citi have downgraded their recommendation on Wesfarmers from neutral to sell.

The investment bank anticipates that Australian households will have reduced capacity to spend on domestic retail in FY22 and FY23. It predicts the sector is set to face headwinds to the tune of $68 billion and $61 billion respectively.

It also expects “a further drag from additional interest rate increases and the resumption of normal travel activity in FY24”.

The broker mentions both Harvey Norman and home hardware giant Bunnings throughout its review, noting the latter’s softer earnings prospects.

It slashed its valuation on Wesfarmers by 16% to $42 per share, citing risks to “margins normalising back towards pre-COVID levels and slower revenue growth as the housing market cools”.

Meanwhile, 25% of brokers covering the stock have Wesfarmers still rated as a buy while 50% have it rated as a hold, according to Bloomberg data.

The remaining 25% of coverage urges its clients to sell Wesfarmers shares. The consensus price target from this list is $49.60, raising questions on whether Wesfarmers is fairly priced at its current levels.

In the last 12 months, the Wesfarmers share price has compressed down by more than 8% after a 16% slump this year to date.

The post What’s dragging on the Wesfarmers share price on Monday? appeared first on The Motley Fool Australia.

More reading

• 2 ASX dividend shares I’d buy with $1,000
• Top brokers name 3 ASX shares to sell next week
• Top ASX dividend shares to buy in May 2022
• 4 ASX shares of the most trusted brands in Australia
• Where next for the Wesfarmers share price?

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 positions in and has recommended Wesfarmers 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 CSL Limited (ASX: CSL) share price has started the week in the red.

In afternoon trade, the biotherapeutics giant’s shares are down 1.5% to $276.79.

Where next for the CSL share price?

According to a note out of Citi, its analysts believe the CSL share price could be heading higher from here.

The note reveals that its analysts have retained their buy rating and $335.00 price target on the company’s shares.

Based on the current CSL share price, this implies potential upside of 21% for investors over the next 12 months.

What is the broker saying?

Citi has been looking at industry data and believes that it is pointing to continued improvement in plasma collections and strong underlying demand.

It believes this supports its view that the key drivers of the CSL share price will shift in the near future to product demand and the acquisition of Vifor Pharma.

It commented:

The latest quarterly results from Grifols, Takeda and Haemonetics, and recent comments from CSL are all highlighting the continued improvement in plasma collection and strong underlying demand for plasma products.

This is consistent with our view that over the next six months, we expect the market to shift its focus to the strong underlying plasma product demand, and the closure the Vifor deal, both of which should lead to strength in the share price.

Our FY23-24 EPS estimates remain 5-6% above consensus (we have included the Vifor consensus estimates in our forecasts). The next catalyst will be the closure of the Vifor transaction which is now expected to complete by the end of Sept (previously June).

All in all, the broker appears to see the CSL share price as trading at an attractive level for investors at present and I would have to agree due to the points outlined above.

The post Where next for the CSL share price? appeared first on The Motley Fool Australia.

More reading

• CSL share price cracks under Vifor Pharma acquisition delay
• Why CSL, Dicker Data, Lifestyle Communities, and Money3 shares are rising today
• What is driving the CSL share price higher today?
• 2 ASX shares at ‘appealing’ buy prices right now
• How did the CSL share price escape the carnage today?

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 CSL Ltd. 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 DGL Group Ltd (ASX: DGL) share price is on the move today.

This comes after the company announced the acquisition of a chemical warehousing and distribution business.

At the time of writing, DGL shares are up 5.36% to $2.95 apiece.

DGL expands warehousing capacity

According to its release, DGL advised it has strategically acquired the Temples chemicals warehousing division for $3.5 million.

Located in Perth, Temples’ chemical storage and warehouse business in one of the largest of its type in Western Australia. The group provides store, consolidate and distributes a variety of freight types within the industry.

The agreed purchase price represents a valuation of 2.2 times the last twelve months of Temples’ earnings (FY21). The deal is being funded solely by tapping into DGL’s existing cash reserves.

DGL stated that Temples adds 13,000 tonnes of chemical storage capacity to its Western Australia operations.

In addition, there is now over 10,000 square kilometres of operational space for transport equipment and shipping container work.

This takes DGL’s total chemical storage to more than 153,000 tonnes across 56 dedicated chemical management sites.

DGL founder and CEO, Simon Henry commented:

The acquisition of Temples chemical warehousing division helps with our organic growth as well as targeted new business opportunities.

DGL share price summary

It’s been an impressive 12 months for the DGL share price, rising by more than 192% in value.

The company entered the ASX in late May with a share price of $1 and has made quick progress since.

Based on valuation metrics, DGL presides a market capitalisation of roughly $781.74 million, with 269.84 million shares outstanding.

The post DGL share price surges 5% on acquisition announcement appeared first on The Motley Fool Australia.

More reading

• Here’s why the DGL share price is soaring 9% on Tuesday

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 DGL Group Limited. The Motley Fool Australia has recommended DGL 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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S&P/ASX 200 Index (ASX: XJO) mining shares, by and large, have seen their revenues soar alongside the prices of their commodities.

While some commodities, like iron ore, have retraced from all-time highs posted mid-last year, most, including iron ore, remain well above their historic levels.

Atop offering a welcome tailwind for their share prices, the leading ASX 200 mining shares have also returned record amounts of money to shareholders in the form of dividends.

So, which of the miners offers the best yield this month?

A word on dividend yields

Before we get to the big reveal, it’s important to note that we’re discussing trailing dividend yields here. That’s the metric you’ll most commonly see quoted, rather than a forward dividend yield, which relies on forecast earnings.

A trailing yield is, by definition, backwards-looking. It reveals the yield you would have gotten if you’d owned a company (in this case ASX 200 mining shares) before the ex-dividend date for all of the past year’s dividend payouts. And it calculates this using the current share price.

That means when a company’s share price falls, its trailing dividend yield rises. Conversely, if its share price rises, its trailing dividend yield falls.

Also, bear in mind that high dividend payouts are not necessarily sustainable. If any of the three ASX 200 mining shares listed below sees its revenues decline, the dividend payout will likely fall as well.

With that said…

Which ASX 200 mining share pays the highest yield right now?

Flush with cash, our top three dividend payers will be familiar names to you.

Coming in at number three is Rio Tinto Ltd (ASX: RIO). The miner pays a 10.3% dividend yield, fully franked. The Rio Tinto share price is up 4.3% year-to-date.

Up next is the world’s second-largest miner, BHP Group Ltd (ASX: BHP). BHP pays a 10.5% dividend yield, fully franked. The BHP share price is up 6.9% so far in 2022.

Which brings us to the ASX 200 mining share with the highest dividend yield at this time, Fortescue Metals Group Ltd (ASX: FMG). Fortescue pays a whopping 15.3% dividend yield, also fully franked. The Fortescue share price is down 3.9% year-to-date.

Happy income investing!

The post Which ASX 200 mining share has the highest dividend yield in May? appeared first on The Motley Fool Australia.

More reading

• Woodside share price lifts despite Twiggy’s latest ‘greenwashing’ accusations
• Is the Fortescue share price cheap after dropping 10% in a month?
• Top ASX dividend shares to buy in May 2022
• Why are Fortescue and green hydrogen making news again on Friday?
• Is the BHP share price too exposed to the downside risks of China?

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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Investors looking for buying opportunities during these volatile times have two ASX shares on the All Ordinaries Index (ASX: XAO) to consider.

These ASX companies are the latest buy-rated shares from leading brokers and both shares are outperforming today.

The All Ordinaries share to buy for its market-beating potential

The first is the Endeavour Group Ltd (ASX: EDV). Shares in the hospitality group have been in the green all day and are trading 2% higher at $7.74 at the time of writing. In comparison, the All Ords has gained 0.28%.

According to JPMorgan, there’s still more room for the Endeavour share price to run. The broker initiated coverage on the shares with an ‘overweight’ recommendation and an $8.60 per share price target.

The optimism stems from the broker’s belief that the market is underestimating the group’s earnings potential over the next few years. Said JPMorgan:

Our EPS [earnings per share] forecasts are 5% and 6% ahead of Bloomberg consensus in FY23 and FY24, respectively, due to the reinvestment in the hotel network and continued strength in the retail drinks business.

This price target implies a 24.6x FY24 PER, underpinned by the market-leading position of the retail and hotels business, both of which have a deep moat and earnings growth optionality, which justifies a premium to the market, in our view.

Worth adding to your shopping list

Meanwhile, the Universal Store Holdings Ltd (ASX: UNI) share price is also outperforming today. Shares in the fashion retailer rallied 3.5% to $4.66 at the time of writing.

The rally coincides with Citigroup’s decision to start coverage on Universal shares with a ‘buy’ recommendation.

The broker’s optimism is based on the view that the Universal Store share price has several medium-term growth drivers.

These include new store rollouts and margin expansion opportunities. These drivers could see the retailer generate a 10% CAGR for its earnings per share from FY21 to FY24.

Citigroup said:

Universal’s store rollout target of 100+ across ANZ appears to be conservative given our analysis indicates potential for the company to roll out 110 stores.

We forecast Universal’s EBITDA margin to expand ~100 bps over FY21 to FY25e, driven by new stores reaching maturity, increasing private brand penetration, higher levels of direct sourcing and scale benefits.

The broker’s 12-month price target on the Universal Store share price is $5.83 a share. The retailer is also forecast to pay a 27.1 cents a share dividend in FY23.

The post 2 ASX All Ordinaries shares top brokers rate as buys appeared first on The Motley Fool Australia.

More reading

• 2 ASX shares to buy as Aussies tighten their belts
• 2 retail ASX shares Morgans rates as a buy now
• Endeavour share price struggles amid Dan Murphy’s leadership resignation
• Why is the Endeavour share price escaping unscathed on Tuesday?
• Top brokers name 3 ASX shares to sell next week

Motley Fool contributor Brendon Lau 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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Brokers love finding opportunities that could make money over the long term. The two S&P/ASX 200 Index (ASX: XJO) shares in this article are leaders in their sectors and brokers have rated them as buys.

There has been a lot of volatility in recent months, which has lowered the share prices of some of the businesses.

Here are two ASX 200 shares that are viewed as opportunities, particularly after the declines:

Goodman Group (ASX: GMG)

Goodman is a large developer, owner, and manager of industrial properties around the world.

It’s currently rated as a buy by the broker Macquarie, with a price target of $27.38. That rating came after Goodman’s FY22 third-quarter result, with the broker noting the stronger performance of the business.

Total assets under management (AUM) increased to $68.7 billion at the end of March 2022, despite the headwind of foreign exchange rates. Its AUM is expected to grow to more than $70 billion by June 2022.

It now has $13.4 billion of development work in progress (WIP) across 89 projects. Goodman said that it has seen 3.7% like-for-like net property income (NPI) growth in its managed partnerships.

The ASX 200 share increased its guidance for FY22 operating earnings per security (EPS) to 23%, up from 20%.

Goodman explained the tailwinds that are driving demand:

Consumers continue to seek faster and more flexible delivery. This requires intensification of warehousing in urban locations, and an increase in automation and technology to optimise delivery and improve efficiency. Our global business is concentrated in key urban locations and focused on delivering opportunities through planning, change of use, sustainability features and higher intensity use. This allows our customers to achieve greater value and enhanced productivity from the space, mitigating the higher cost.

Pinnacle Investment Management Group Ltd (ASX: PNI)

Pinnacle is an investment platform business that aims to take investment stakes in high-quality investment managers. It can then help them grow with a number of business operations, allowing the fund manager to focus on the investing.

Some of those services it can help with include distribution and client services, fund administration, compliance, finance, legal, technology, seed [funds under management] FUM, and so on.

Hyperion, Plato, Solaris, Antipodes, Spheria, Firetrail, Metrics, Coolabah, and Five V are some of the investment managers it’s invested in.

The ASX 200 share is steadily investing in areas that give exposure to new asset classes and markets.

An important contributor to the company’s profit growth is an increase in FUM of its affiliates. In the FY22 half-year result, aggregate affiliate FUM increased 5% to $93.6 billion, while aggregate retail FUM increased 17% to $23.8 billion. This helped net profit after tax (NPAT) grow by 32% to $40.1 million.

The company is looking to grow in North America with its 32.5% stake in Langdon equity partners. The company is based in Toronto, Canada, and it’s focused on global and Canadian small cap shares.

The broker Macquarie also rates Pinnacle as a buy, with a price target of $11.90. That implies a possible upside of around 40% over the next year. However, the broker points out that the ASX 200 share’s FUM is expected to be hit in all of the current volatility.

On Macquarie’s numbers, the Pinnacle share price is valued at 21 times FY22’s estimated earnings.

The post Brokers: 2 ASX 200 shares that could be top buys for growth appeared first on The Motley Fool Australia.

More reading

• Here are the 3 most heavily traded ASX 200 shares on Monday
• Why is the ASX 200 giving back the morning’s gains on Monday?
• ASX 200 midday update: Brambles rockets, Goodman upgrades guidance
• Goodman share price charges higher on Q3 update and guidance upgrade
• 5 things to watch on the ASX 200 on Monday

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 PINNACLE FPO. The Motley Fool Australia has positions in and has recommended PINNACLE FPO. 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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