Month: October 2022

In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record another gain. At the time of writing, the benchmark index is up 0.55% to 6,847.4 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are dropping:

Australia and New Zealand Banking Group Ltd (ASX: ANZ)

The ANZ share price is down almost 4% to $24.86. This follows the release of the banking giant’s full year results for FY 2022. For the 12 months ended 30 September, ANZ reported a 5% lift in cash profit from continuing operations to $6,515 million. While this was slightly ahead of Goldman Sachs’ estimates, its pre-provisioning operating profit “came in 1% lower than GSe, as an in-line NIM performance was more than offset by slightly weaker volumes and weaker than expected performance in Markets income.”

Australian Clinical Labs Ltd (ASX: ACL)

The Australian Clinical Labs share price is down 4% to $3.39. This morning this pathology provider revealed that it was the victim of a cyber incident all the way back in February. And despite finding customer data on the dark web in June, it has taken the company until now to tell patients and the market.

Core Lithium Ltd (ASX: CXO)

The Core Lithium share price is down 4.5% to $1.39. Investors have been selling this lithium miner’s shares after it revealed that its proposed offtake agreement with Tesla has collapsed. However, the company doesn’t appear concerned given the insatiable demand for lithium and its other offtake agreements which account for 80% of planned production.

Kogan.com Ltd (ASX: KGN)

The Kogan share price is down 6% to $3.29. This appears to have been driven by a broker note out of Credit Suisse this morning. In response to the company’s dismal first quarter update, the broker has downgraded its shares to an underperform rating and slashed the price target on them by 25% to $2.73.

The post Why ANZ, Australian Clinical Labs, Core Lithium, and Kogan are sinking today appeared first on The Motley Fool Australia.

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More reading

• Everything you need to know about the latest ANZ dividend
• Another ASX All Ords share is plunging 12% on cyberattack news
• Core Lithium share price crushed on Tesla deal collapse
• Why is the ANZ share price sinking today?
• ANZ share price on watch after reporting $6.5b cash earnings for FY22

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Warren Buffett has been a prolific investor for decades, soundly beating the markets on a consistent basis.

What’s noteworthy is that he hasn’t generally done it by betting on big tech or emerging growth stocks in high-risk industries. His strategy centres around safety and not about taking oversized risks.

There are two Buffett rules in particular that investors would do well to always keep in mind when buying stocks. Let’s look at them both.

Never lose money

This rule is so important that even his second rule is to not forget the first one. Not losing money in the stock market can seem impossible, especially in the current bear market. Even Buffett’s business, Berkshire Hathaway, has lost money on its investments in the past and has even underperformed the S&P 500 Index (SP: .INX) in some years.

The nature of the stock market is that there will always be some risk. The key takeaway from Buffett’s rule is to not take unnecessary or excessive risks and that the desire to avoid losing money should guide investors to making more calculated, strategic investment decisions, as opposed to jumping onto the latest meme stock.

Stop digging

This leads to another great Buffett quote: “The most important thing to do if you find yourself in a hole is to stop digging.”

In other words, if you’ve taken on too much stock risk and gotten yourself into a hole (e.g., your portfolio is deep in the red), the temptation may be to take on even greater risk and swing for a 10-bagger investment that gets you out of the hole. But by doing so, you could end up with even greater losses.

By minimizing losses to begin with, investors can avoid the temptation to take on excessive risks entirely. One industry where you can find many safer stocks is healthcare.

Healthcare stocks for long-term investors

Not all industries have performed poorly during the current downturn in the markets. One segment that has bucked the trend is healthcare.

Consider healthcare giant Bristol-Myers Squibb (NYSE: BMY), a top-performing stock in 2022. Year to date, the stock is up an impressive 17%, while the S&P has declined by 21%.

Bristol-Myers is a top drugmaker that has solid fundamentals. Last year, the company had three products that generated more than $5 billion in revenue for the business: Revlimid, Eliquis, and Opdivo. And they all reported positive year-over-year growth of at least 6%.

The healthcare company has grown, in part, via acquisitions and in 2021 reported revenue of $46 billion — more than double its $23 billion tally in 2018. It has also posted free cash flow of at least $13 billion for two consecutive years.

Another top healthcare stock that has performed reasonably well this year is Johnson & Johnson (NYSE: JNJ). Year to date, its shares are flat, but that would still satisfy Buffett’s first and second investing rules by avoiding losses.

The popular drug manufacturer and medical device company recently reported encouraging earnings numbers.

Sales totaled $23.8 billion for its most recent quarter (ended in September) and rose 1.9% year over year. The business expects to generate operational sales growth, which excludes the impact of acquisitions/divestitures and translating foreign currency, of up to 7.2% this year.

These businesses are safe and are excellent examples of the types of companies to invest in if your priority is to avoid losing money.

Over the past decade, Bristol-Myers and Johnson & Johnson have generated total returns (which include dividends) of 190% and 213%, respectively. That’s not far from the S&P 500 total returns of 223% over that time frame. And if the recent trends continue, the two healthcare stocks could continue to shrink that gap.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Two Warren Buffett rules you should never forget appeared first on The Motley Fool Australia.

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More reading

• Which stocks are most likely to thrive in a recession? Here’s what history shows
• The companies Warren Buffett owns might surprise you
• Warren Buffett has been buying up big on dividend stocks. Should you?
• No savings at 40? I’d use the Warren Buffett method to build wealth
• How bear markets can be a blessing for dividend investors

David Jagielski has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and recommends Berkshire Hathaway (B shares) and Bristol Myers Squibb. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Johnson & Johnson and recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), and short January 2023 $265 calls on Berkshire Hathaway (B shares). 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.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The CSL Limited (ASX: CSL) share price has been receiving some insider support lately. 

Two of its directors have loaded up on CSL shares this month, adding to their holdings by picking up shares on the market.

It can be worth monitoring the activity of company insiders because, after all, they should have better insights than the rest of us about the ASX 200 healthcare company’s prospects.

Director buying can be seen as a vote of confidence in a company. It can suggest that the director sees great potential in their company and that they believe shares are undervalued.

As the great investor Peter Lynch famously said, “Insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.”

CSL directors have been busy

Two of CSL’s non-executive directors have purchased CSL shares in as many weeks.

First up we have Dr Megan Clark AC, who has been a director since February 2016. She also sits on the board of Rio Tinto Limited (ASX: RIO).

In a recent ASX release, we learned that Clark went on a buying spree for CSL shares on 20 October. She picked up 270 CSL shares for $274.01 apiece, splashing around $74,000 in the process. This takes her total shareholding to 4,363 ordinary CSL shares, worth a tidy $1.2 million at current prices.

Days later on 24 October, fellow non-executive director Alison Watkins AM joined the party. Watkins has been a director of CSL since August 2021 and also sits on the board of Wesfarmers Ltd (ASX: WES).

A recent ASX release revealed that Watkins added 1,000 CSL shares to her self-managed super fund (SMSF). These shares were purchased on-market at $272 for a total of $272,000. Watkins now holds 3,076 CSL shares, worth roughly $850,000 at today’s prices.

Is the CSL share price a buy?

This insider buying comes hot on the heels of CSL’s Vifor investor briefing, which went into the weeds of the recent $16 billion dollar acquisition.

Notably, CSL revealed long-awaited guidance that incorporates the contribution from Vifor. 

Given that the acquisition was completed in August 2022, it will have an 11-month contribution to CSL’s FY23 results. Across this period, CSL is expecting Vifor to generate net profit after tax (NPAT) of between US$300 million and US$330 million.

Overall, CSL is guiding for adjusted NPAT of between US$2.7 billion and US$2.8 billion in FY23. This would represent growth of between 13% and 18% compared to the prior year.

On the back of this presentation, analysts at Morgans retained their add rating on CSL shares with a trimmed price target of $312.20. With CSL shares last changing hands at $275.31, this implies a potential upside of 13% over the next 12 months.

As plasma collections improve, the broker believes that ongoing demand across CSL Behring and Seqirus, combined with Vifor’s added breadth, points to strong growth and momentum. 

Goldman Sachs, however, is more sceptical. It currently has a neutral rating on CSL shares with a 12-month price target of $291.00, implying potential upside of 6%.

The broker remains constructive on the recovery potential across CSL’s plasma business. However, Goldman’s neutral rating stems from the uncertainties around CSL’s margin and return on invested capital (ROIC) profile over the medium and long term.

Personally, as I’ve discussed previously, I’d be happy to hold CSL shares as a long-term, high-quality investment in my portfolio. 

The CSL share price has been somewhat resilient this year. Despite slumping 6.5%, it’s outperformed the S&P/ASX 200 Index (ASX: XJO) which has tumbled 9.5% in the year to date.

The post Directors have been buying up CSL shares this month. Should you? appeared first on The Motley Fool Australia.

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More reading

• Is buying CSL shares right now a smart move?
• Here’s what Morgans is saying about the CSL share price
• This ASX 200 share could be 50% higher next year: expert
• Citi says CSL share price is great value amid large iron therapy opportunity
• 2 classic healthcare ASX shares priced to buy now: expert

Motley Fool contributor Cathryn Goh 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 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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It’s a good day to be invested in All Ordinaries Index (ASX: XAO) shares. The index is gaining 0.66% on Thursday, helped along by these companies and their quarterly updates.

Three ASX All Ordinaries shares are lifting by as much as 20% on news of their performance over the three months ended September.

Let’s take a closer look at what’s got the market excited over the shares.

3 ASX All Ordinaries shares rocketing on quarterlies

The Aurelia Metals Ltd (ASX: AMI) share price is rocketing higher on Thursday. Indeed, it’s one of the best-performing shares on the All Ordinaries Index.

It’s currently up a whopping 20% to trade at 12 cents.

The miner’s gold production increased quarter-on-quarter to 22,500 ounces over the September quarter while its all-in sustaining cost (AISC) dropped to $2,643 an ounce.

It expects to produce 87,000 ounces of gold at an average AISC of $1,900 per ounce this financial year.

The Humm Group Ltd (ASX: HUM) share price is also rocketing higher on Thursday. It’s up 10.4%, trading at 53 cents.

The provider of buy now, pay later (BNPL) plans’ volumes lifted 29% on those of the prior comparable period to $988.2 million over the quarter just been.

That was driven by an 88% rise in its flexicommercial business’ volumes, offsetting a 1% in those of its BNPL business.

Finally, the share price of All Ordinaries gold producer Red 5 Limited (ASX: RED) is trading at 17.25 cents right now, 11.3% higher than its previous close.

The company released its activities report for the September quarter today, revealing its King of the Hills project is on track to reach commercial production in the current quarter.

It produced 26,710 ounces of gold over the three months just been, selling 30,005 ounces at the same time. The company will begin to report its AISC when it reaches commercial production.

The post 3 ASX All Ordinaries shares leaping more than 10% on quarterly updates appeared first on The Motley Fool Australia.

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More reading

• Do the highest-yielding ASX dividend shares really offer the best passive income?
• How to avoid making bad investment decisions on the stock market right now: fundie
• How I’d build a portfolio by investing in top ASX shares now
• 5 things I love about investing in ASX shares
• 3 ASX All Ords shares smashing multi-year highs today

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 Humm 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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If you own Rio Tinto Limited (ASX: RIO) shares or are considering investing in the S&P/ASX 200 Index (ASX: XJO) mining giant, you’re likely keeping an eye on iron ore prices.

Iron ore, after all, brings in the lion’s share of the miner’s revenue.

When the price of the industrial metal heads higher, Rio Tinto shares tend to gain. And if you look at the overlaying price charts, you’ll notice the same strong correlation in reverse.

Hence, the Rio Tinto share price hit all-time highs in mid-2021, when iron ore was fetching more than US$216 per tonne. And shares slid lower in the second half of the year as the iron ore price retreated to US$92 per tonne.

This year we saw Rio Tinto shares leap higher again. Shares reached $127.85 on 3 March amid rebounding iron ore prices, which hit US$161 per tonne in the first week of April.

Today, iron ore is fetching US$94 per tonne. And the Rio Tinto share price stands at $92.67, after paying out some outsized dividends this calendar year.

So, what’s all this about a divergent outlook between Commonwealth Bank of Australia (ASX: CBA) analysts and the Federal government?

I’m glad you asked!

Where to next for iron ore prices?

In attempting to forecast its own future revenue stream, the Federal budget predicts a big drop in iron ore price, to US$55 per tonne (Free on Board (FOB) Australia) by the end of Q1 2023.

As outlined above, that kind of fall in iron ore prices would throw up some strong headwinds for Rio Tinto shares.

However, the analysts at CBA have a more bullish prediction for iron ore, at least over the medium term.

In CBA’s Economic Insights report, published earlier this week, the bank stated, “We think that the Government’s forecasts for Australia’s key mining and energy commodities in the coming years are broadly too conservative.”

According to the report:

The Budget’s iron ore price forecast is lower than our outlook through the outlook period. The differences though lessen in later years. The difference reflects our view that prices will only gradually fall to $US60/t-$US65/t (FOB Australia) by late 2026/27 following a volatile year ahead.

Spot prices have come under pressure as China’s property downturn weighs on demand. Policy in China remains the key driver of prices, particularly China’s COVID-zero policy.

As for the kind of support Rio Tinto shares can expect from the iron ore price next year, CBA said:

We broadly expect iron ore prices to bottom in Q1 2023 as China’s COVID-zero policy continues to weigh on demand. A shift away from China’s COVID-zero by the end of March 2023 should see iron ore prices lift in the following quarters.

How have Rio Tinto shares been performing longer term?

Atop some healthy dividend payouts, Rio Tinto shares have gained 32% over the past five years. That compares to a 16% gain posted by the ASX 200 over that same time.

The post Why CBA is much more upbeat on Rio Tinto shares than the government appeared first on The Motley Fool Australia.

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More reading

• Why is the Rio Tinto share price in the doldrums today?
• Why is the Fortescue share price surging today?
• Broker says Rio Tinto share price is trading at a discount
• ASX dividend shares ‘likely to remain attractive’ despite rising bank deposit rates: expert
• Rio Tinto share price has 20% upside and 7% dividend yield: Goldman Sachs

Motley Fool contributor Bernd Struben 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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Shares of Webjet Limited (ASX: WEB) are in focus on Thursday, as travel heats back up and Aussies begin planning trips abroad once more.

A record number of Australians have applied for passports in 2022 as airlines deal with the built-up demand from two years of border closures due to COVID-19.

Webjet has come in for a soft landing these past 12 months with a series of lows across the year, finally bottoming at a year-to-date low of $4.64 on 3 October.

At the time of writing, the Webjet share price is up 0.2% to $5.19.

But how does the future look for this ASX travel share?

Can Webjet shares take off again?

It’s no secret the travel and tourism industries were among the hardest hit by the COVID-19 pandemic. Despite this, numbers are tracking back up again — and this could spell good news for Webjet shares.

Data compiled by the International Air Transport Association (IATA) predicts that four billion trips will take place in 2024. That’s a 103% increase on the 2019 [pre-COVID] total. Last year saw traveller numbers at just 47% of the 2019 highs.

Airlines are also forecasting strong travel numbers, with a return to full travel regimes planned within the next year or so, pending no other upsets.

For all those along the travel and tourism industry value chain – from agent to airline – this could spell a return to growth.

Looking ahead, however, the runway is different for Webjet compared to its previous three years of operation.

Whereas the pandemic era bought on a period of liquidity, low interest rates and government support, the near-term future looks a little different.

Many experts are talking in terms of inflation, interest rates and recession. This means different things for companies than it does for everyday consumers.

For companies, expenditure will be pulled into the limelight, with capital-light companies – those with lower capital expenditures (CapEx) – looking attractive for that reason.

What do the experts think?

Webjet recorded CapEx of $11.8 million in its most recent set of results. That’s down from $15 million in 2019. Coupled with its cash generation, brokers are constructive on Webjet shares.

Goldman Sachs rates it a buy with a $6.50 price target and reiterates this point. It notes Webjet has “demonstrated strong cash generation as the market recovers and valuation continues to be impacted by macro concerns”.

Meanwhile, those at Morgans are equally positive on the shares. The analyst team points to a strong European summer season and points out “crisis and cost reduction initiatives will reduce its cost base by 20% across the group” once implemented.

Both brokers join six other firms in rating Webjet shares a buy. Four say it’s a hold, with two brokers recommending to sell, according to Refinitiv Eikon data.

The consensus price target from this list is $6.40, suggesting a portion of upside should the number be correct.

In the meantime, Webjet shares are down almost 18% in the past 12 months of trade.

The post Could now be a good time to buy Webjet shares? appeared first on The Motley Fool Australia.

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More reading

• Why is the Qantas share price so volatile today?
• Webjet share price higher on bullish Goldman Sachs note
• 5 things to watch on the ASX 200 on Wednesday
• Experts say these are the ASX 200 shares to buy next week
• What is the outlook for ASX travel shares for the rest of 2022?

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 recommended 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Cryptocurrencies continued their ascent this morning, as bond yields dropped and investors got more optimistic about the trajectory of interest rates. There has also been an apparent short squeeze this week for several prominent cryptocurrencies.

Over the last 24 hours, the prices of Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH), and Dogecoin (CRYPTO: DOGE) had all made significant gains.

The price of Bitcoin traded roughly 6.6% higher and hovered around $20,777 as of 10:26 a.m. ET today. The price of Ethereum traded roughly 13.4% higher, and the price of Dogecoin was up 10.4%.

So what

Cryptocurrencies have been crushed all year long because of the Federal Reserve’s aggressive interest rate hikes, which have led to surging bond yields as well.

But this week, bond yields have receded some, with the yield on the 10-year U.S. Treasury bill coming down from above 4.2 percentage points earlier this week to just above 4 percentage points as of this writing.

That has buoyed stocks and cryptocurrencies, as investors get hopeful that perhaps the bulk of the Fed’s rate hikes will soon be at an end. 

But in other news, there have been reports of a big short squeeze that has driven the recent gains of Bitcoin and Ethereum. CoinDesk reported that major exchanges have seen some of the largest liquidations of short positions since the middle of 2021.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why are Bitcoin, Ethereum, and Dogecoin leaping higher today? appeared first on The Motley Fool Australia.

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More reading

• Why were Meta and Amazon stocks falling today?
• Why did Alphabet stock crash 9% on Wednesday?
• The bear market rally has seen the ASX 200 jump five percent higher in October. It could all be about to run out of steam
• The Spectacular fail of Aptos shows why Ethereum is the ultimate long-term buy
• The Bitcoin price just popped back above US$20,000. Is the crypto bull run back on?

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Bram Berkowitz has positions in Bitcoin and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Alphabet (C shares), Bitcoin, and Ethereum. The Motley Fool Australia has recommended Alphabet (A shares) and Alphabet (C shares). The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Fortescue Metals Group Ltd (ASX: FMG) share price is up slightly in morning trade on Thursday.

Fortescue shares are currently trading for $16.16 apiece after touching an intraday high of $16.36 earlier.

Below, we look at what the S&P/ASX 200 Index (ASX: XJO) iron ore miner just reported for the quarter ending 30 September (Q1 FY23).

Fortescue share price lifts on record first quarter operating performance

Investors are bidding up the Fortescue share price after the miner reported a 4% boost in iron ore shipments from the prior comparable period. The 47.5 million tonnes (mt) shipped in Q1 FY23 represent a record for a first quarter.

The company earned an average revenue of US$87 per dry metric tonne (dmt).

Direct costs (C1) were also up, climbing 3% quarter on quarter to US$17.69 per wet metric tonne (wmt). This was due to higher fuel costs and other industry-wide cost pressures.

As at 30 September, Fortescue had a cash balance of US$3.3 billion with a net debt of US$2.8 billion. This figure is post the payment of the FY22 final dividend of US$2.4 billion and capital expenditure of US$653 million.

What else happened during the quarter?

ESG investors may also be helping out the Fortescue share price today after the miner updated the market on its decarbonisation roadmap.

The company plans to invest US$6.2 billion by 2030 to eliminate fossil fuel risks. It forecasts this will save some US$3 billion by 2030. Annual savings are expected to reach US$818 million once the roadmap is fully in place.

Over the quarter Fortescue Future Industries (FFI) also entered a collaboration with Tree Energy Solutions. The partnership is intended to speed up the development of a green hydrogen and green energy import facility in Germany.

Atop this, FFI established a United States Technology Hub and inked a partnership with the US Department of Energy’s National Renewable Energy Laboratory.

What did management say?

Commenting on the results that look to be helping boost the Fortescue share price today, CEO Andrew Forrest said:

We are establishing the building blocks of a new, global renewable energy value chain spanning technology, manufacturing, green energy generation and distribution which will deliver significant returns to our shareholders.

Last month at the United Nations General Assembly, Fortescue announced it would step beyond fossil fuels and lead heavy industry to achieve real zero emissions (Scope 1 and 2) across our iron ore operations by 2030…

Against this backdrop of a strong performance for the first quarter, we are well positioned to meet our guidance, execute on our strategy and ensure all our stakeholders continue to benefit from Fortescue’s success.

What’s next?

Looking ahead, Fortescue offered FY23 guidance of 187-192 mt of iron ore shipments, which includes around 1 mt from Iron Bridge.

The miner expects CI costs for hematite of US$18.00 – US$18.75/wmt, with capital expenditure of US$2.7 – US$3.1 billion.

The cap ex guidance excludes FFI, which Fortescue expects will come to US$500 – US$600 million of operating expenditure and US$230 million of capital expenditure.

The miner is assuming an average exchange rate for the financial year of 70 Aussie cents to the US dollar.

Fortescue share price snapshot

Atop some healthy dividends the miner paid out, the Fortescue share price is up around 16% over the past 12 months. That compares to an 8% loss posted by the ASX 200.

The post Fortescue share price lifts on record first quarter operating performance appeared first on The Motley Fool Australia.

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More reading

• Have ASX 200 high-yield dividend shares been a blessing or a curse in 2022?
• Why ‘other stocks appeal more’ than Fortescue shares: expert
• Why is the Fortescue share price surging today?
• Why I’m not worried about Fortescue’s $9.6 billion decarbonisation plans smashing my dividends
• ASX dividend shares ‘likely to remain attractive’ despite rising bank deposit rates: expert

Motley Fool contributor Bernd Struben 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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Australia and New Zealand Banking Group Ltd (ASX: ANZ) has just reported its FY22 result for the 12 months to 30 September 2022. Shareholders also learned about the ANZ dividend announcement.

Many investors may be interested in what the bank decided to do with its dividend.

With many banks valued on a relatively low price-to-earnings (P/E) ratio – the valuation multiple of their earnings – it means that many banks have high dividend yields.

ANZ dividend

The large S&P/ASX 200 Index (ASX: XJO) bank share decided to declare a final dividend of 74 cents per share. This represented a 2.8% increase compared to the final dividend from FY21 of 72 cents.

That brought the full-year dividend to $1.46 per share, which was an increase of 3% year over year.

The dividend payout ratio of its cash profit was 65% for the final dividend. The payout ratio was also 65% for the full year.

ANZ’s board said:

The board considers that a final dividend of 74 cents per share is appropriate and is consistent with its stated target dividend payout ratio of between 60% and 65% (cash continuing, ex large/notable basis).

This is in line with statements made during the recent equity raising and applies to new ANZ shares issued as part of the process.

With an annual dividend of $1.46 per share, that means the ANZ share price currently offers a grossed-up dividend yield of 8.5%.

Outlook

The board of ANZ doesn’t provide guidance about its expected dividend payment.

However, considering it’s targeting a payout ratio of its earnings, we can see whether ANZ is expecting to grow profit, and this could imply dividend growth.

ANZ CEO Shayne Elliot said:

There is uncertainty ahead, however we have the business in good shape to withstand volatility. We also have a highly engaged workforce with a high-performance culture and I’m confident in our ability to continue to deliver for customers and shareholders.

He also referred to RBA data that shows total household balance sheets are “the best they have been for 15 years”.

But Elliot said the next six months “will be testing”, particularly for first-time homeowners who are only starting to build up their equity as well as those with less stable employment.

The net interest margin (NIM) improvement looks promising for ANZ. In the first half of FY22 its NIM – which shows how much profit the bank makes from lending – was 1.58%. It grew to 1.68% in the second half of FY22. The exit margin for the month of September 2022 was 1.8%, implying that lending profitability can rise in FY23.

It’s possible, perhaps likely, that the Reserve Bank of Australia (RBA) interest rate could keep rising until inflation is under control, which may be able to help ANZ’s lending margins further. There is also an “increasing mix of variable rate home loan flows”, which have a higher NIM than the fixed rate loans over the past couple of years.

Foolish takeaway

ANZ is paying investors another large dividend in this result. If it can grow profit in FY23, then investors may well see a larger ANZ dividend in the new financial year.

The post Everything you need to know about the latest ANZ dividend appeared first on The Motley Fool Australia.

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More reading

• Why is the ANZ share price sinking today?
• ANZ share price on watch after reporting $6.5b cash earnings for FY22
• 5 things to watch on the ASX 200 on Thursday
• Here’s how ASX 200 banks stand to benefit from the budget
• Own ANZ shares? Here’s why the bank just copped a $25 million fine

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 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 S&P/ASX 200 Materials Index (ASX: XMJ) is climbing 1.90% today, but one ASX lithium share is soaring far higher.

The Koba Resources Ltd (ASX: KOB) share price is exploding 136% today to 26 cents.

Let’s take a look at why this ASX lithium share is doing so well today.

What’s going on?

Koba Resources advised the market it has staked mining claims covering 145km2 at the company’s new Whitlock Lithium Project. This means Koba has the right to extract lithium from this area of land.

The site, located in southern Manitoba Canada, is a “high quality lithium pegmatite project”, Koba said.

The project is located immediately on strike from the Tanco mine, which has lithium reserves of 7.3 Mt at 2.76% lithium oxide. Also nearby, are lithium resources including 10.2 Mt at 1.4% Li2O2, 3.6Mt at 1.28% Li2O3 and 1.1Mt at 1.51% Li2O4.

Koba said extensive pegmatites have been mapped at the Whitlock project. Field work will start at the project in future days.

Commenting on the news, managing director and CEO Ben Vallerine said:

We are excited to have staked the Whitlock Lithium Project adjacent to the world-class Tanco Lithium-Caesium-Tantalum pegmatite mine – Canada’s only operating lithium mine.

The addition of a lithium project to our portfolio of high-grade cobalt assets is a logical progression as we continue to focus on battery metals to support the EV revolution and the electrification of the global economy.

Koba is also exploring cobalt in the United States.

Koba share price snapshot

The Koba share price has lifted 30% year to date, while it has soared 100% in the past month.

Koba listed on the ASX in May.

Koba has a market capitalisation of about $16.9 million based on the current share price.

The post Guess which ASX lithium share is soaring 136% on big news appeared first on The Motley Fool Australia.

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More reading

• Why are Bitcoin, Ethereum, and Dogecoin leaping higher today?
• Fortescue share price lifts on record first quarter operating performance
• Everything you need to know about the latest ANZ dividend
• Why is the Weebit Nano share price whizzing 18% higher today?
• Why is the Bank of Queensland share price sliding lower today?

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 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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