This year valuations of ASX shares have been dominated by forces external to business operations, like inflation, interest rates, the economy, and a war in Europe.
In such helpless times, it can help to rattle the cage with something that the company can control. Like a blockbuster acquisition.
That’s what two ASX-listed companies recently did, with experts recommending buying into their shares:
Sensible deal adding earnings and value
Viva Energy Group Ltd (ASX: VEA) owns the Geelong Oil Refinery and Shell petrol stations in Australia.
Last month, supermarket giant Coles Group Ltd (ASX: COL) sold its service station network to Viva for $300 million.
Ord Minnett senior advisor Tony Paterno feels positive about the acquisition that saw 710 sites join the Shell network.
“We expect the balance sheet to remain in a net cash position after the $300 million deal is completed,” Paterno told The Bull.
“We believe the deal makes sense, as it offers Viva Energy additional flexibility from a strategic and operational standpoint, while also looking accretive to earnings and value.”
Paterno recommends Viva Energy shares as a buy.
The Viva share price has risen 16.5% year to date while handing out a tidy 6.2% dividend yield.
Reducing risk and expanding margins
Baker Young managed portfolio analyst Toby Grimm considers Australia and New Zealand Banking Grp Ltd (ASX: ANZ) shares a buy.
“Compared to the other three major banks, ANZ shares were recently trading on the lowest price-earnings multiple and offer the highest prospective dividend yield.”
Indeed, ANZ shares are currently paying out a juicy 5.8% dividend yield.
Grimm reckons the recent acquisition of Suncorp Group Ltd (ASX: SUN)’s banking arm aligns with ANZ’s long-term direction.
“The decision to expand core operations via the Suncorp Bank acquisition reduces risk and supports medium-term growth,” he said.
“Net interest margin expansion is expected to underpin ANZ’s full-year result.”
ANZ shares are down 11.7% so far this year. Grimm is in good company. According to CMC Markets, nine out of 15 analysts are currently rating ANZ shares as a buy, with seven of those recommending it as a strong buy.
The post Buy these 2 ASX dividend shares supercharged by acquisitions: experts appeared first on The Motley Fool Australia.
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More reading
- Could the Coles share price be in for a better month in October?
- Down 9% in a month, could the Woolworths share price turn around in October?
- ANZ share price best-value buy of the ASX 200 big four banks right now: expert
- Here’s how ASX 200 bank shares fared in the shocker month of September
- What’s the outlook for ANZ shares in October?
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 positions in and has recommended COLESGROUP DEF SET. 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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