Day: July 27, 2022

Down 1% in a month, what’s next for the Dicker Data share price?

A young woman with glasses holds a pencil to her lips as she is surrounded by the reflection of data as though she is being photographed through a glass screen project with digital data.A young woman with glasses holds a pencil to her lips as she is surrounded by the reflection of data as though she is being photographed through a glass screen project with digital data.

The Dicker Data Ltd (ASX: DDR) share price has descended slightly in the past month, but could it go ahead in the future?

The company’s share price has lost 1.41% in the last month and is currently trading at $11.19. In today’s trading, the company’s share price closed 2.01% lower.

So what is the outlook for the Dicker Data share price?

What is ahead?

Dicker Data is an Australian technology company that supplies software, cloud, and computer hardware products to major international companies.

Morgan Stanley analysts have recently placed a $16 price target on the company’s shares and maintained an overweight rating. At its current level, this represents nearly 43% upside for the Dicker Data share price.

Further, Morgan Stanley is predicting Dicker Data could provide a fully franked dividend of 48.5 cents in FY 2023. In FY 2022, the broker forecasts a 41.4 cent dividend.

Meanwhile, Airlie Funds Management analysts have recently predicted Dicker Data’s prospects “should remain strong”. Portfolio manager Matt Williams said:

No matter the upcoming economic conditions, we think the path to digitisation won’t be affected… [O]ver the past seven years, sales and profits have compounded annually at 16% and 20% respectively.

Dicker Data recently updated the market on its unaudited results for H1 2022. According to the report, revenue growth is up 36% on the prior corresponding period.

Earnings before interest, tax, depreciation and amortisation (EBITDA) has also grown 20% in the same timeframe from $51 million to $61 million.

The company will hold a webcast of its F22 half-year results on 30 August.

Share price snapshot

The Dicker Data share price slumped nearly more than 24% in the year to date but lost just 0.53% in the past year.

For perspective, the S&P/ASX All Technology Index (ASX: XTX) has shed nearly 26% in a year and almost 29% year to date.

Dicker Data has a market capitalisation of more than $1.9 billion based on the current share price.

The post Down 1% in a month, what’s next for the Dicker Data share price? appeared first on The Motley Fool Australia.

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

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*Returns as of July 7 2022

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Motley Fool contributor Monica O’Shea 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 Dicker Data Limited. The Motley Fool Australia has positions in and has recommended Dicker Data 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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Do Woodside shares really have a 6% dividend yield right now?

A man sits in deep thought with a pen held to his lips as he ponders his computer screen with a laptop open next to him on his desk in a home office environment.

A man sits in deep thought with a pen held to his lips as he ponders his computer screen with a laptop open next to him on his desk in a home office environment.

Few ASX 200 shares have had as dramatic a year as the Woodside Energy Group Ltd (ASX: WDS) share price. For one, over the past 12 months, Woodside shares have gained an impressive 40.25%. That certainly looks good against the 8.3% loss that the S&P/ASX 200 Index (ASX: XJO) recorded over the same period.

But then there’s also the blockbuster merger with BHP Group Ltd (ASX: BHP)’s petroleum division to consider as well. Back in May, the old Woodside Petroleum Ltd became Woodside Energy after BHP spun out its petroleum division. All BHP shareholders at the time received one new Woodside Energy share for every 5.534 BHP shares owned.

As we covered at the time, this tie-up saw Woodside become a “top 10 global energy producer with over two billion barrels of proven and probable reserves and annual EBITDA approaching US$5 billion”.

So as it stands today, the ‘new’ Woodside has a market capitalisation of $59.8 billion. But is Woodside’s trailing dividend yield of 5.94% too good to be true?

Well, this trailing yield comes from the last two dividend payments this oil share has doled out. These were the $1.46 per share final dividend investors received in March as well as the interim dividend of 41 cents that was paid out last September.

Both of these payments were fully franked, which means that the trailing yield of 5.94% grosses up to an even more impressive 8.49% with the value of that franking.

But that represents the past. So what of the future?

Are Woodside shares’ dividend yield of 6% a floor or a ceiling?

Well, any company’s trailing dividend yield comes from its past dividend payments. So no investor should automatically assume Woodside shares will continue to pay a near-6% yield.

Saying that, many ASX experts are indeed predicting Woodside will be able to keep doling out large dividend payments going forward.

One is broker Ord Minnet. As my Fool colleague Tristan covered last month, this broker reckons Woodside’s next interim divided will bring its dividend yield up to 13.6% for FY2022. However, Ord Minnet is also predicting the dividends Woodside will pay that cover FY2023 will be lower, and will equate to a forward yield of 8.1%.

Even so, if Ord Minnet is to be believed, it looks as though Woodside’s trailing dividend yield of almost 6% might be a floor, rather than a ceiling, over the next 12 months. But we shall have to wait and see what happens.

The post Do Woodside shares really have a 6% dividend yield right 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

See The 5 Stocks
*Returns as of July 7 2022

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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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Is the Vanguard VGS ETF a good idea for dividends?

ETF written on cubes sitting on piles of coins.

ETF written on cubes sitting on piles of coins.

The Vanguard MSCI Index International Shares ETF (ASX: VGS) invests in a global portfolio of shares. But could it be a good idea for dividends?

It’s one of the more popular index funds. It is invested in more than 1,470 businesses in the portfolio, spread across a number of different countries including the US (70.2% of the portfolio), Japan (6.3%), the UK (4.5%), Canada (3.7%), France (3.2%), Switzerland (3%) and so on.

The ASX is known for being a dividend-friendly share market. Other share markets typically don’t have as large of a dividend yield. The ASX’s largest businesses mostly have low price/earnings (p/e) ratios and high dividend payout ratios, leading to a higher yield for the S&P/ASX 200 Index (ASX: XJO).

How good is the VGS ETF dividend yield?

The Vanguard MSCI Index International Shares ETF is invested in a whole range of different businesses.

Exchange-traded funds (ETFs) simply pass through to investors the dividends that they receive. The biggest positions have the biggest influence on the dividend yield.

Let’s look at the top 10 holdings in the VGS ETF: Apple, Microsoft, Alphabet, Amazon.com, Tesla, UnitedHealth, Johnson & Johnson, NVIDIA, Meta Platforms and Exxon Mobil.

Some of those names don’t even pay dividends, like Tesla, Amazon and Alphabet. Others, like Apple and Microsoft, do pay dividends but their p/e ratios are so high that the subsequent dividend yield is very low.

According to Vanguard, the VGS dividend yield at 30 June 2022 was 2.1%. This has been pushed a bit higher after a 16% decline in the unit price of the Vanguard MSCI Index International Shares ETF in 2022.

Dividend growth

ETFs can distribute both capital gains and dividends to investors. While capital gain distributions are somewhat unpredictable, the dividends/distributions are more predictable and can be more consistent.

Businesses like Microsoft, Apple and Johnson & Johnson have been growing their dividends over the past decade. Plenty of other businesses within the VGS ETF have also grown their dividend.

So, the underlying dividend income from Vanguard MSCI Index International Shares ETF can steadily grow. The typically good earnings growth of the underlying VGS ETF portfolio names can help fund dividend growth and also hopefully lead to decent capital growth as well, over the longer term.

The post Is the Vanguard VGS ETF a good idea for dividends? 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

See The 5 Stocks
*Returns as of July 7 2022

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. 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 Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Meta Platforms, Inc., Microsoft, Nvidia, Tesla, and Vanguard MSCI Index International Shares ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Johnson & Johnson and UnitedHealth Group and has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Meta Platforms, Inc., Nvidia, and Vanguard MSCI Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Rio Tinto share price on watch after half-year earnings miss

Two miners standing together with a smile on their faces.

Two miners standing together with a smile on their faces.

The Rio Tinto Limited (ASX: RIO) share price will be one to watch on Thursday.

This follows the release of the mining giant’s half-year results after the market close today.

Rio Tinto share price on watch following earnings miss

  • Revenue down 10% to US29,775 million
  • Underlying EBITDA down 26% to US$15,597 million
  • Free cash flow down 30% to US$7,146 million
  • Dividend of 276 US cents per share
  • No special dividend

What happened during the half?

For the six months ended 30 June, Rio Tinto reported a 10% decline in revenue to US$29,775 million and a 26% reduction in underlying EBITDA to US$15,597 million.

This was driven by a softer iron ore price, which led to the company’s iron ore EBITDA falling 35% to US$10,395 million for the half. This was partially offset by a 49% lift in aluminium EBITDA to US$2,866 million.

How does this compare to expectations?

Unfortunately for the Rio Tinto share price, this result appears to have fallen a touch short of expectations.

For example, a recent note out of Goldman Sachs reveals that its analysts were expecting revenue of US$29,655 million and underlying EBITDA of US$15,671 million.

Furthermore, the market consensus estimate was for revenue of US$30,785 million and underlying EBITDA of US$16,813 million.

Also falling short of expectations was its dividend of 276 US cents per share. Not only did this come in short of estimates, but there was no special dividend this time around.

Goldman was pencilling in total dividends of US$3.68 per share, whereas the consensus estimate was for US$3.97 per share. Both estimates included special dividends of 50 US cents and 67 US cents, respectively.

Though, it is worth highlighting that this was the second largest interim dividend in the company’s history.

Management commentary

Rio Tinto’s chief executive, Jakob Stausholm, commented:

We remain focused on delivering on our long-term strategy, with a steady improvement in operating performance and some notable advances in our growth agenda. We continue to strengthen our partnership with the Mongolian government following commencement of underground mining at Oyu Tolgoi, delivered first iron ore from the Gudai-Darri mine and approved early works funding at the Rincon lithium project.

Stausholm spoke cautiously about the second half. He notes that the “market environment has become more challenging at the end of the period.”

Nevertheless, the chief executive remains optimistic on the longer term.

We are committed to making lasting, long-term change to our culture, including to our workplace culture, and to building better relationships with Indigenous peoples, communities and partners. The progress we are making will ensure we continue to deliver attractive returns to shareholders, invest in sustaining and growing our portfolio, and make a broader contribution to society in the drive to netzero carbon emissions.

The post Rio Tinto share price on watch after half-year earnings miss appeared first on The Motley Fool Australia.

Should you invest $1,000 in Rio Tinto Limited right now?

Before you consider Rio Tinto Limited, 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 Rio Tinto Limited 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.

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*Returns as of July 7 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 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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