Day: June 9, 2022

This ASX 300 retail share could grow its global store network by 260%: fundie

A woman wearing a top of gold coins and large gold hoop earrings and a heavy gold bracelet stands amid a shower of gold coins with her mouth open wide and an excited look on her face.

A woman wearing a top of gold coins and large gold hoop earrings and a heavy gold bracelet stands amid a shower of gold coins with her mouth open wide and an excited look on her face.

One fund manager has picked out an S&P/ASX 300 Index (ASX: XKO) retail share that he reckons could grow its global store network by a significant amount.

That ASX share is affordable jewellery retailer Lovisa Holdings Ltd (ASX: LOV).

Monash Investors co-founder Simon Shields shared the opinion on Livewire, saying Lovisa was his pick as a company to buy and hold for five years. He said:

There’s still a very long store rollout underway in the US and Europe – from 550 stores currently we could easily see 2000 over the next seven to eight years.

The earnings numbers will go up and the share price will follow.

Shields said he believed Lovisa was a “bargain” that would offer good value, even if its share price were to fall a bit further. Lovisa shares were trading 4.43% higher at $14.15 at the close on Thursday.

What is the attraction of Lovisa?

Lovisa is set up with a vertically integrated model, meaning it owns its own product and brand. The company claims to have a significant cost advantage through direct sourcing from factories, with products manufactured in cost-optimal locations such as China, Thailand and India.

According to the ASX 300 retail share, the company has a strong focus on data analytics for inventory management, with a business model that underpins “consistently high gross margins” of more than 75%.

Lovisa noted in an investor presentation that it has a central buying team, which is “highly responsive” to fashion and sales trends with “proven success” in bringing new products to the market that are on-trend.

The ASX 300 retail share has built global logistics infrastructure to help fulfil its growth ambitions. It has logistics hubs in Melbourne, China and Poland, with dedicated e-commerce warehouses in the United Kingdom, the United States and South Africa.

In terms of its store network, management is focussing on international rollout. It has opened 59 new stores in the year to April 2022. In the US, it has opened 38 new stores in the year to date, and it’s now trading from 31 US states.

Lovisa notes that a global leasing team is in place to drive growth from existing and new markets.

Future outlook

When outlining its future, Lovisa said that it was working on the continued expansion of its current markets with the same “successful disciplines” and criteria used to date. It’s also investing in the team to stay ahead of the growth curve and build global capability.

Lovisa is also continuing to focus on digital platforms to help its online sales.

The ASX 300 retail share is aiming to identify new markets to pilot its Lovisa brand.

Trading update

The company noted that trading in the first eight weeks of the FY22 second half saw store sales for that period rise 12.1% compared to the same period in FY21. Total sales were up 61.7% over the same period in FY21.

Lovisa says that the sales momentum has continued through the second half to date to the end of April.

The post This ASX 300 retail share could grow its global store network by 260%: fundie appeared first on The Motley Fool Australia.

Should you invest $1,000 in Lovisa right now?

Before you consider Lovisa, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Lovisa wasn’t one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Lovisa Holdings 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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Are Telstra shares still ASX dividend heavyweights?

A woman has a thoughtful look on her face as she studies a fan of Australian 20 dollar bills she is holding on one hand while he rest her other hand on her chin in thought.A woman has a thoughtful look on her face as she studies a fan of Australian 20 dollar bills she is holding on one hand while he rest her other hand on her chin in thought.

For decades, the Telstra Corporation Ltd (ASX: TLS) share price was a top choice for ASX dividend income investors on the ASX. A mature, monopolistic business model with a high payout ratio policy, what was there not to like?

But Telstra’s days of offering 7%, fully franked dividends came to an unceremonious end back in 2017. That was when the telco announced a big haircut to its cherished dividend. At the time, this saw a steep decline in the value of Telstra shares. To illustrate, Telstra was being priced at close to $7 a share in early 2015. But by mid-2018, the telco was down to under $3 a share.

But in the years since then, Telstra has arguably managed to salvage some of its reputational former glory when it comes to dividends. Telstra is still not paying anything close to the dividends it used to in raw terms. But the telco has kept its payouts steady for the past few years, including during 2020.

This was crucial for investors. For most of 2020, Telstra shares were being priced around the $3 mark, with some swings thrown in. The telco kept its dividend steady at 16 cents per share, fully franked, over the year of the pandemic. As such, investors enjoyed a rough dividend yield of 5% or so.

This would have been invaluable for income investors, who watched as many other ASX dividend heavyweights, including all four of the big banks, slashed their payouts.

But now we are in 2022, and the worst of the pandemic lockdowns are behind us (touch wood), is Telstra still a dividend share heavyweight on the ASX?

Are Telstra shares still worth considering for dividend income?

Well, the Telstra share price has steadily recovered from its 2020 lows, although it has saged somewhat over 2022 thus far.

At the close of trading on Thursday, Telstra was going for $3.86 a share. At this share price, its still-standing 16 cents per share in annual payouts mean Telstra is offering a fully franked dividend yield of 4.13% on current pricing.

That is certainly nothing to turn one’s nose up against. Especially considering 4.13% grosses-up to 5.9% with that full franking.

Saying that, Telstra certainly doesn’t stand as high above the ASX dividend pack as it used to. The company’s yield is still beating out Commonwealth Bank of Australia (ASX: CBA) at the moment. But it is now trailing the other big four banks.

Australia and New Zealand Banking Group Ltd (ASX: ANZ) currently has a trailing yield of more than 6%. ANZ has also suffered a near 20% drop in value over the past 12 months, so it’s not all roses and rainbows.

The big miners like BHP Group Ltd (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG) have been catapulted past Telstra in the dividend stakes in recent years too, fuelled by record-high iron ore prices. BHP’s trailing dividend yield is still over 10% right now.

But all in all, Telstra remains a solid ASX dividend paying share offering an above-average income stream on the ASX 200. Income investors value consistency with their payouts just as much as a high yield, so that counts for something too.

 

The post Are Telstra shares still ASX dividend heavyweights? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Telstra right now?

Before you consider Telstra, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Telstra wasn’t one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

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Motley Fool contributor Sebastian Bowen has positions in Telstra Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia 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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Experts name 2 ASX dividend shares for income investors to buy now

blockletters spelling dividends bank yield

blockletters spelling dividends bank yield

Are you looking for dividend shares to add to your income portfolio? If you are, then the two listed below could be worth considering.

These dividend shares have been rated as buys and tipped to provide income investors with attractive yields. Here’s what you need to know about them:

Centuria Industrial REIT (ASX: CIP)

The first ASX dividend share to look at is Centuria Industrial. It is has a portfolio of high quality industrial assets.

This is a great space to be in right now, with the company reporting strong nationwide demand for industrial space. This is particularly the case from ecommerce-related tenant customers and has underpinned strong rental growth in FY 2022.

Analysts at Macquarie remain positive on the company. Earlier this month, the broker retained its outperform rating with a $3.94 price target.

In addition, the broker is forecasting dividends per share of 17.3 cents in FY 2022 and 16.8 cents in FY 2023. Based on the current Centuria Industrial REIT share price of $3.19, this will mean dividend yields of 5.4% and 5.25%, respectively.

Wesfarmers Ltd (ASX: WES)

Another ASX dividend share that could be in the buy zone is Wesfarmers. It is the conglomerate behind businesses including Bunnings, Catch, Covalent Lithium, Kmart, Officeworks, and Priceline.

While trading conditions are tough for its retail businesses at present, the same cannot be said for its Wesfarmers Chemicals, Energy and Fertilisers (WCEF) business. This business is experiencing strong demand at present, which bodes well for its near term earnings.

And while it may not be enough to drive overall profit growth in FY 2022, a number of analysts are expecting a rebound in FY 2023. One of those is Morgans, which has an add rating and $58.40 price target on its shares.

As for dividends, Morgans is forecasting fully franked dividends per share of $1.65 in FY 2022 and $1.81 in FY 2023. Based on the current Wesfarmers share price of $44.70, this will mean yields of 3.7% and 4%, respectively.

The post Experts name 2 ASX dividend shares for income investors to buy now appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of January 12th 2022

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Northern Star share price is down 25% from its April high. Is now the time to buy?

Two miners examine things they have taken out the ground.Two miners examine things they have taken out the ground.

The Northern Star Resources Ltd (ASX: NST) share price is tumbling again on Thursday, down 2.52% to $8.51 in late afternoon trade.

This means the gold miner’s shares are now down more than 25% from their April high of $11.59.

Furthermore, investors have also hit the sell button on Northern Star’s peers in the past couple of months.

For context, Newcrest Mining Ltd (ASX: NCM) shares have dropped 17% from their top of $28.96 in April. 

And the Evolution Mining Ltd (ASX: EVN) share price is in the red by 23% from its nine-month high of $4.68 in April.

What’s dragging Northern Star shares to near multi-year lows?

Investor confidence has been waning in recent times following a raft of unfavourable macro environmental factors.

First and foremost, the price of gold has deteriorated to around US$1,850 per ounce. This represents a decline of 6.3% since 18 April – around the time when Northern Star shares were hitting monthly highs.

Despite the price of the yellow metal staying relatively stable for now, the Northern Star share price is continuing to be impacted.

The decision by the Reserve Bank of Australia to lift interest rates also likely had a negative effect on the gold sector.

In times of rate hikes, investors tend to shift their focus away from gold and into government bonds.

On Friday, the United States consumer price index for May will be released, which will provide crucial data on whether inflation has peaked.

Depending on the report, it’s anyone’s guess if the Federal Reserve will be more aggressive with its monetary policy.

With Northern Star shares falling, is this a buying opportunity?

A couple of brokers put out their thoughts on the Northern Star share price late last month.

As reported by ANZ Share Investing, Credit Suisse raised its 12-month price target on the company’s shares by 4.5% to $11.50.

It appears the broker is bullish on Northern Star and believes it is significantly undervalued.

Based on the current share price, this represents an upside of around 35%.

On the other hand, UBS cut its rating by 0.8% to $11.70. It, too, thinks Northern Star shares have a huge upswing.

Share price snapshot

The Northern Star share price is down 22% over the past 12 months.

It is also trading 9% lower this year to date and is 10% down over the past month.

On valuation grounds, Northern Star commands a market capitalisation of approximately $9.94 billion.

The post The Northern Star share price is down 25% from its April high. Is now the time to buy? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Northern Star right now?

Before you consider Northern Star, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Northern Star wasn’t one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

More reading

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