Month: October 2022

The Sayona Mining Ltd (ASX: SYA) share price is pushing higher today on no news. At the time of writing, the share is trading 11% in the green at 25.5 cents.

Also pushing higher today and continuing its lengthy rally is the price of lithium, with lithium carbonate now priced at A$120,047.45 per tonne – a record high.

It hasn’t been smooth sailing for Sayona on the chart these past 6 months, however. As seen in the chart below, shares are reclaiming ground after dipping from highs of 35.5 cents on 13 September.

What’s up with the Sayona Mining share price?

Chief to the upside in recent weeks for Sayona has been the extended gains in lithium pricing that have seen the battery metal shoot to another record high.

Driving the upside is the continued demand for batteries used in electric vehicles such as cars, scooters and buses.

Exploration and offtake activity has exploded in the space over the past 2–3 years and this has seen numerous new entrants into the space.

Updates in the space are therefore rewarded very generously if positive, which has been the case for Sayona lately.

On October 4 it announced it has launched a pre-feasibility study to produce lithium carbonate at its North American Lithium (NAL) project.

This was immediately followed by an update advising another pre-feasibility study at the Moblan Lithium Project, in Canada.

Finally, on 18 October, the company advised it had found a contractor to deliver its NAL spodumene concentrate from its facility to the port.

As such, investors positioning themselves within the lithium trade will have found the company’s latest two updates appealing, evidenced in the price action afterwards.

Shares are now up 18% this week, and today’s trading volume is already 82% of the 4-week average at 69.2 million shares.

Meanwhile, Sayona is up 96% this year to date.

The post Why is the Sayona Mining share price booming 10% on Tuesday? appeared first on The Motley Fool Australia.

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More reading

• Guess which ASX lithium company is the biggest holder of Sayona Mining shares?
• If you’d bought $5,000 of Sayona Mining shares at the start of 2022, congratulations! Here’s what you’d have today
• Why are these ASX 200 lithium shares smashing it on Monday?
• The Sayona Mining share price has dumped 24% since joining the ASX 200. What’s happening?
• Can ASX 200 lithium shares bank on the price of lithium to keep soaring?

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 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 Core Lithium Ltd (ASX: CXO) are pushing 5% into the green on Tuesday and now trade at $1.465 apiece.

Today’s jump extends gains for the lithium player and brings this year’s return to almost 150%, amid a continued rally in the price of lithium.

Lithium carbonate now trades at A$120,047 per tonne, another all-time high. The battery material has now gained 95% year to date.

The chart below shows Core Lithium’s performance (in black) against the broader S&P/ASX 300 Metals and Mining Index (ASX: XMM) which has slipped 5% in 2022 so far.

What’s up with Core Lithium shares?

Core Lithium’s upcoming offtake agreement with electric vehicle manufacturer Tesla has been in focus following the electric vehicle giant’s recent quarterly earnings.

Core Lithium is one of three ASX-listed companies chosen by Tesla to help fulfil its enormous lithium supply requirements.

Whilst Tesla delivered a record 343,000 cars during the period, revenue was behind analyst expectations, and this has triggered questions on the demand situation looking ahead.

Core’s deal with Tesla would see it produce spodumene concentrate for four years starting in 2023. As such, it represents a large opportunity for the company.

News of the agreement has been a major catalyst for the share’s performance this year to date, alongside the price of lithium.

With prices of the battery metal still punching above record highs, momentum remains in Core’s favour, particularly given the enthusiasm for renewables and battery technology.

It’s also worth noting it was Tesla’s revenue expectation that fell short, not the number of cars it delivered. In Tesla’s case, it suggests demand is still robust.

Certainly, investors remain bullish on Core Lithium shares on Tuesday.

Trading volume has already hit 48% of the four-week trading average with 17.8 million shares exchanging hands in early trade.

Meanwhile, Core Lithium shares are up 157% in the past 12 months.

The post Why are Core Lithium shares lifting another 5% on Tuesday? appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Monday
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Is the Core Lithium share price at risk following Tesla’s disappointing earnings?
• Here are the 3 most heavily traded ASX 200 shares on Thursday

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 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 Index (ASX: XJO) may be trading sharply lower this year, but that hasn’t stopped some ASX shares from reaching new highs.

Three ASX mining shares that have just climbed to all-time highs are listed below. Here’s why they are flying high right now:

Mineral Resources Limited (ASX: MIN)

The Mineral Resources share price hit a new all-time high of $78.14 this morning. While there was no news out of the mining and mining services company, investors have been fighting to buy its shares all year due to its lithium operations. These are expected to generate bumper profits this year thanks to sky high lithium prices.

Interestingly, despite hitting an all-time high, the team at Macquarie still sees significant value in the Mineral Resources share price. Its analysts have an outperform rating and $98.00 price target on its shares.

Pilbara Minerals Ltd (ASX: PLS)

The Pilbara Minerals share price reached a record high of $5.66 this morning. This followed the release of the lithium miner’s first quarter update this morning, which revealed further solid production and sales growth.

Macquarie is also positive on the Pilbara Minerals share price. Though, it doesn’t see anywhere near as much upside potential as it does with Mineral Resources shares. Its analysts have an outperform rating and $5.70 price target. However, it is worth noting that this could change once the broker has reviewed the company’s quarterly update.

Tietto Minerals Ltd (ASX: TIE)

The Tietto Minerals share price climbed to an all-time high of 73 cents on Tuesday despite there being no news out of the gold developer. Though, it is worth noting that last week the company provided a positive update on its Abujar Gold Project in the Ivory Coast.

That update revealed that the construction of the project is on track and Tietto expects to deliver its first gold during the current quarter. If everything goes to plan, management expects to produce 260,000oz of gold from Abujar in 2023.

The post 3 ASX mining shares hitting all-time highs today appeared first on The Motley Fool Australia.

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More reading

• Pilbara Minerals share price hits record high following Q1 update
• This ASX 200 lithium share turned a $15,000 investment into $1.4 million
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX 200 shares today
• Why Life360, Novonix, Pilbara Minerals, and Vulcan shares are storming higher 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 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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There’s a mountain of advice for market watchers seeking out their next big winner. On top of that, every ASX investor will likely search for ASX shares to buy in their own unique way.

For instance, if I were to create an ASX wish list, I’d be looking to fill it with quality businesses trading at cheap valuations.

That way, I believe, I would have a better chance of picking winning ASX shares with plenty of future prospects.

I would also pay special attention to creating a list of diverse ASX stocks, searching a wide range of sectors to find potential champions.  

How I’d build a ‘best ASX shares to buy now’ list

Find high quality ASX shares

There are plenty of factors that one can consider when assessing the quality of an ASX share. Personally, I would consider a company’s competitive advantages and balance sheet.

A business able to corner a market that is reliant on its offerings is the gold standard. However, a loyal customer base and room for growth can also prove a strong advantage over competing businesses.

Additionally, a company with room for growth, the means to do, and extra cash in case of tough times could also be a quality ASX share.

Whichever way a market watcher determines if an ASX share represents good quality, the best place to start is often recent earnings and updates.

Additionally, it’s important to keep an open mind when considering not only a stock’s strengths but its weaknesses too. In many cases, current weaknesses can represent future risks.

It’s also generally a good idea to compare an ASX-listed company to its peers.

Identify undervalued stocks

Another measure I would consider when building a ‘best ASX shares to buy now’ list is a stock’s valuation. There are plenty of ways to assess if a stock is trading cheaply.

Two common and useful measures are price-to-book (P/B) ratios and price-to-earnings (P/E) ratios.

While no measure is perfect – and none can predict the future – these two ratios are simple to understand and can be easily calculated using a company’s financial statements.  

Once again, I would compare a company’s valuation to that of its peers before adding it to my list.

Diversification

Finally, I would make a point to not focus on any single sector while building my ‘best ASX shares to buy now’ list.

A strategically diverse portfolio is less likely to be largely impacted by a downturn in a single sector.

Diversification can also allow a shareholder to take advantage of a diverse range of opportunities spread across the ASX.

Though, spreading a portfolio across numerous sectors neither guarantees returns nor downside protection.

The post How I’d build a ‘best ASX shares to buy now’ list appeared first on The Motley Fool Australia.

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More reading

• 3 ASX mining shares hitting all-time highs today
• Why is the Woodside share price bouncing around today?
• Why ‘other stocks appeal more’ than Fortescue shares: expert
• Even as one strategist predicts a 30% crash, others think the bottom of this bear market may already be in and shares might rally for Christmas
• Want thousands in monthly retirement income? Focus on these investments

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 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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It’s turning out to be another positive day for the S&P/ASX 200 Index (ASX: XJO) so far this Tuesday. But the Woodside Energy Group Ltd (ASX: WDS) share price is looking a lot more volatile.

At the time of writing, the ASX 200 has gained a healthy 0.56%, putting the index back over 6,800 points.

Woodside shares initially opened strongly this morning, rising just after open to $35.93 a share. But things quickly took a turn for the worse, with the company dropping to $35.38 soon after.

As it presently stands, Woodside Energy is still in the red, nursing a 0.22% loss at $35.53 a share.

So what could be going on here? Let’s check out what’s new with Woodside.

Woodside share price rises amid new carbon capture partnership

Well, there haven’t been any new ASX announcements from this ASX oil share today. However, the company did put out a media release yesterday that could be influencing sentiment.

This announcement gazetted a new strategic collaboration. Woodside declared that it has signed an agreement with the US-based carbon capture and storage company LanzaTech NZ Inc. Here’s what the company had to say:

Under the Strategic Framework Agreement Woodside will, in collaboration with LanzaTech and subject to a positive final investment decision, design, construct, own, maintain and operate pilot facilities relating to LanzaTech’s technologies.

The Strategic Framework Agreement also allows Woodside and LanzaTech to explore opportunities for the potential commercial scale–up of LanzaTech’s technology, which seeks to convert greenhouse gas emissions into new products.

Additionally, Woodside also announced that it would be investing US$50 million into the publicly listed AMCI Acquisition Corp. AMCI is expected to merge with LanzaTech, facilitating LanzaTech’s entrance onto the public markets.

Although these moves were announced yesterday, they could well be influencing the Woodside share price today.

But, as always, we can’t rule out that the moves of the oil price itself are also at play here. As an ASX energy share, the Woodside share price is easily influenced by how oil is being priced by the markets.

As my Fool colleague James covered this morning, oil had a weak session overnight on the US markets. Both WTI and Brent crude fell. WTI was down 0.3% to US$84.76 a barrel, while Brent dropped 0.1% to US$93.47. This could be why we are seeing some weakness in the Woodside share price this Tuesday.

But investors can’t be too upset. Woodside shares remain up a very pleasing 57% in 2022 thus far, and up 47% over the past 12 months.

At the current Woodside share price, this ASX 200 oil share has a market capitalisation of $67.5 billion, with a dividend yield of 8.61%.

The post Why is the Woodside share price bouncing around today? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Monday
• Expert reveals why these ASX All Ords shares are drumming up a ‘growing international appetite’ right now
• Here are the top 10 ASX 200 shares today
• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today

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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Shares of Fortescue Metals Group Limited (ASX: FMG) are tracking lower from the open today and trade less than 2% in the red at $16.54.

In what’s been a profitable year for commodity baskets, the second half of CY2022 hasn’t been so rosy. Most raw materials have consolidated gains.

Iron ore, the key ingredient in steel making, has been perhaps the key exemplar of this trend. It has pushed south of record highs and now trades back at pre-pandemic highs.

With the price of iron ore approaching 52-week lows early in the week, this has put pressure on Fortescue shares. It currently rests at US$92.50 per tonne.

What does this mean for Fortescue shares?

Since the company is one of the largest iron ore producers in the world, it is therefore a price taker on the material, meaning that its share price fluctuates with volatility in the commodity markets.

It comes as no surprise therefore to see that investors have sold off Fortescue in unison with the descent in the iron ore price, as seen on the chart below.

With the sell-off, shares have retreated towards their October 2021 levels. But this has also sweetened valuation multiples relative to peers.

Fortescue now trades on a price-to-earnings ratio (P/E) of 5.32 times and a price-to-book (P/B) ratio of just 1.9 times.

These are slightly behind the GICS Metals & Mining Industry’s median of P/E of 10.8 times and P/B of 2.01 times respectively, per Refinitiv data.

The discount might be warranted according to some, however. Jabin Hallihan of investment bank Morgans believes that Fortescue is a sell, in The Bull’s 18 Share Tips for 24 October.

“[Foretescue’s] capital expenditure guidance to decarbonise its iron ore business by 2030 is $US6.2 billion,” Hallihan notes.

“Our estimate was $US5.5 billion, highlighting the inflation risk. Our 12-month price target is $15. There’s much to play out in decarbonising the business,” he added.

“Other stocks appeal more.”

Morgans joins 8 other brokers as a sell recommendation for Fortescue shares, with the remaining 9 split to hold, per Refinitiv Eikon data.

The consensus price target from this is $15.71 apiece, behind the current market value.

Meantime, Fortescue shares are down 14% this year to date.

The post Why ‘other stocks appeal more’ than Fortescue shares: expert appeared first on The Motley Fool Australia.

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More reading

• 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
• Why has the Fortescue share price dropped 20% in 6 months?
• Why was the Fortescue share price on such a rollercoaster today?

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 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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1) The prospect of a Fed pivot again drove US shares higher overnight Monday, sending the Dow Jones Industrial Average Index (DJX: .DJI) and S&P 500 Index (SP: .INX) to their highest closes in more than a month.

The S&P/ASX 200 Index (ASX: XJO) index has followed suit, gaining 40 points or 0.60% in early Tuesday trade. The benchmark local index is now only down 8.4% over the past 12 months, putting US markets to shame.

You can thank your ASX coal, energy, and lithium stocks, if you are skilful and luckily enough to own them.

2) This global stock market rally (ex-China stocks) is coming on top of Wall Street last week notching up its best week since June as US bond yields fell from multi-year highs.

Much of this bullishness has been driven by a report in The Wall Street Journal which said the US Federal Reserve is likely to use its November meeting to debate “whether and how to signal plans to approve a smaller interest rate increase in December”.

The prospect of a Fed Pivot – even as it is set to raise interest rates by another 75 basis points in early November – has finally given the bulls something to cheer about in this god-awful year for stock market investors.

It’s anyone’s guess as to whether this rally will stick. 

It didn’t – even when I thought it might – when the S&P 500 index jumped 17% from its June 2022 low only to crash all the way back down again by September 2022. 

Although I’m not calling September the bottom of the market – because that would just be guessing – I am continuing to buy stocks, because I think many of them are just plain cheap. 

3) That doesn’t mean they can’t go lower.

In the “batten down the hatches” corner, we have David Rosenberg on MarketWatch saying the S&P 500 crashes 30% lower from here, with US home prices also declining by 30%, and the US economy sinking into a recession.

Cheery soul, right?

All is not lost (yet), though, for stock market investors, with Rosenberg saying that since markets are cyclical, a new bull market for stocks, bonds and other risk assets should begin in 2024.

Only 15 more months of pain to go…

4) In the “believe” camp, we have the Chanticleer column in the AFR titled Is it time to believe in a Santa sharemarket rally? Excerpt: 

After a torrid year marked by rising interest rates, savage asset price falls and bruising volatility, consensus is building around a year-end Santa rally for share markets.

The logic of such a rally is pretty simple. Investor sentiment is low, positioning is light (that is, investors are underweight equities in a way not seen since the global financial crisis) and the bad news has largely been priced in, including a 0.75 percentage point rate increase from the US Federal Reserve in November and a mild recession.

So any bit of good news – particularly hints that the Fed may be about to slow the pace of rate rises, or company earnings holding up – should give stocks a nice nudge.

5) In the “not entirely sold on the Fed Pivot” corner, we have Lisa Erickson at US Bank Wealth Management, quoted on Bloomberg as saying…

“We are still agnostic as to whether the Fed really is going to pivot or be at the peak of its hawkish cycle. If you look at the underlying data, inflation remains sticky, particularly in services ex-housing, which can often be more persistent. So given the Fed’s dependence on the data, we’re not clear exactly again, when the Fed may truly begin to slow down.”

6) And in the “have faith, buy stocks now” corner, we have a bunch of fund managers who are licking their lips at a) the cheap prices on offer for selected stocks and b) the prospect of higher markets ahead, especially given the positive three, five and 10-year return profiles coming out of past bear markets.

In its most recent monthly update, the SGH Emerging Companies Fund said…

… we believe that once there are clear signals of the end of rate hikes, it will be bullish for both stocks and bonds. Consequently, we still expect equity markets to be significantly higher next year. Note share markets discount the future and will bottom before the economy. 

For emerging companies, after the large share market decline, we continue to see plenty of opportunities at cheaper valuations and deals at more favourable pricing.

7) “Earnings risk” might soon become the new buzzword for the near-term direction of equity markets, and in particular, for individual stocks.

This week sees a host of large-cap stocks reporting earnings, including Apple, Microsoft, Alphabet and Amazon.

Here on the ASX in Australia, as AGM season approaches, we’re already seeing quarterly updates, with the usual smattering of winners and sinners.

One of today’s winners is Mader Group Ltd (ASX: MAD), the global leader in the provision of specialist technical services across multiple industries.

The company reported that FY23 has started strongly, delivering a 48% jump in first-quarter revenue, with its nascent North American business growing in momentum. 

Favourable Q1 results and client demand across multiple sectors have provided Mader with the confidence to upgrade FY23 financial guidance.

Such language is usually music to the ears of investors. On this occasion, in early Tuesday trade, the Mader share price is largely flat, perhaps a nod to its already lofty valuation, at around 20 times forecast earnings before interest, tax, depreciation, and amortisation (EBITDA).

Still, quality doesn’t come cheap.

“Our goal is to find outstanding businesses at sensible prices, not a mediocre business at a bargain price.” – Warren Buffett

The post Even as one strategist predicts a 30% crash, others think the bottom of this bear market may already be in and shares might rally for Christmas appeared first on The Motley Fool Australia.

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More reading

• Westpac share price on watch following $1.3b earnings hit
• 5 things to watch on the ASX 200 on Tuesday
• Guess which ASX 200 directors bought $4m worth of their company shares last week
• Here are the top 10 ASX 200 shares today
• Why did ASX 200 gold shares have such a top run today?

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. Motley Fool contributor Bruce Jackson has positions in Alphabet (A shares), Alphabet (C shares), and Amazon. 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, and Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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, and Apple. 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.

The two primary ways to make money from stocks are selling them for more than you paid and dividends. The first one is straightforward, but the role dividends can play in an investor’s total returns is often underrated. Dividends, paid out quarterly from a company’s profits, are a way for companies to reward shareholders for simply holding onto their shares.

A well-rounded portfolio shouldn’t only have dividend stocks, but it should have its fair share. When done correctly, dividends can provide thousands in monthly retirement income. Let me show you how.

Spread out some of the risks

There are exchange-traded funds (ETFs) that pay out dividends simply as a byproduct of some of the companies within it paying dividends. And then, there are ETFs that focus specifically on dividend-paying stocks that have to meet specific qualifications. If you’re looking to invest in dividend stocks, focusing on dividend-paying ETFs can help you accomplish multiple things at once: dividends, diversification, and less risk.

Let’s take a look at the ProShares S&P 500 Dividend Aristocrats ETF (NYSEMKT: NOBL) as an example. To be eligible, a company must be in the S&P 500 and be a Dividend Aristocrat, which is a company that has increased its yearly dividend for at least 25 consecutive years. What’s better is that most of the companies within the fund have done so for at least 40 years.

The fund contains 65 companies spanning all major sectors, and the top 10 holdings only make up 17.66% of the fund (for perspective, the top 10 holdings in the S&P 500 make up just over 27%).

Let time do the heavy lifting

You have to accumulate a sizable stake in dividend stocks to get to the point where you’re receiving thousands in monthly dividend income. For most investors who don’t have large lump sums to invest at once, this means taking advantage of compound earnings. In investing, compound earnings occur when the money you make from investments starts to make money on itself.

Since its inception, the ProShares S&P 500 Dividend Aristocrats ETF has returned just over 10% annually. By no means do past results guarantee future performance, but if we assume this continues over the long term, here’s roughly how much an investor could have in 25 years at different monthly investment amounts:

Monthly Investment	Average Annual Returns	Amount in 25 Years
$1,000	10%	$1.18 million
$1,500	10%	$1.77 million
$2,000	10%	$2.36 million

Data source: Author calculations.

With time and consistency, accumulating a significant stake in dividend stocks is attainable. A great way to keep yourself consistent is by using dollar-cost averaging. With dollar-cost averaging, you put yourself on an investing schedule and stick to it regardless of stock prices at the time. It keeps you consistent and helps prevent you from trying to time the market, which is virtually impossible to do consistently long-term.

It pays to be patient

Dividends, in general, can be lucrative, but they can really be powerful when you reinvest your dividends. Many brokers, and companies, allow you to automatically reinvest the dividends you’re paid back into the stock that paid it out. Doing so adds to the effects of compound earnings and can drastically add to your returns.

Let’s assume a dividend-paying stock returns, on average, 7% annually with a 2% dividend yield over 25 years. Here’s how the values would differ if you reinvested the dividends over that span versus taking them as cash:

Monthly Investment	Value After 25 Years When Taking Dividends as Cash	Value After 25 Years When Reinvesting Dividends
$1,000	$758,988	$1.01 million
$1,500	$1.13 million	$1.52 million
$2,000	$1.51 million	$2.03 million

Data source: Author calculations. (Assumes average annual 7% price appreciation and 2% dividend yield.)

Yes, you would’ve made money from the cash dividends you received over those 25 years, but it wouldn’t be comparable to the hundreds of thousands more your investment would’ve grown by reinvesting your dividends. It’s usually in your best interest to reinvest your dividends until you reach retirement and then begin accepting them as cash when the extra income will likely be more valuable.

At the above totals, a 2% dividend yield would pay roughly $20,200, $30,400, and $40,600 annually, respectively.

You’ll be glad you took the steps

Retirement is expensive, and unfortunately for many people, that means Social Security by itself won’t do the trick. There’s no one-amount-fits-all regarding how much you’ll need in retirement, but one thing’s for sure: To make sure you’re as financially comfortable as possible, you’ll need to utilize all resources.

Dividends likely won’t be the bulk of your retirement income, but they can play an important role — use them to your advantage.

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

The post Want thousands in monthly retirement income? Focus on these investments appeared first on The Motley Fool Australia.

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• Set for life: 5 ASX dividend shares I’d invest in if I ever had a million-dollar windfall
• Could this send Qantas shares flying too close to the sun?
• BHP share price dips following rough night on Wall Street
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Stefon Walters 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 ProShares S&P 500 Aristocrats ETF. 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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Receiving $1 million would be an incredible windfall. Not only would I instantly become a millionaire, but I think I’d be able to invest it in ASX dividend shares so that I could live off the investment income for the rest of my life.

Some businesses have built a strong track record of paying dividends to investors. I’d utilise some of these to protect and grow my pot of gold.

I’d want to choose a mixture of defensive ASX shares and growth shares. I’m still quite young, relatively speaking, so I don’t need to choose high-yielding picks for every choice.

With that in mind, these are five of the ASX dividend share names I’d go for:

Rural Funds Group (ASX: RFF)

Rural Funds is a real estate investment trust (REIT) that owns farmland. I’ll point out that farmland has been a useful asset for (at least) hundreds of years. I think that will continue for the rest of my lifetime – we all need food after all.

It owns a diversified portfolio across a number of farming categories including cattle, vineyards, almonds, macadamias, and cropping (sugar and cotton).

The business has an objective of growing its distribution by 4% each year. This offers solid income growth in my opinion.

It’s expecting to pay a total distribution of 12.2 cents per unit in FY23, which translates into a forward distribution yield of 5%.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

This ASX dividend share holds the record for the longest run of consecutive annual dividend growth, going back to 2000.

It owns a portfolio of investments in businesses and assets across a range of assets like telecommunications, building products, agriculture, resources, financial services, swimming schools, and many other industrial businesses.

The business pays out a majority of its cash flow as dividends each year but retains some of the money to reinvest in more opportunities.

It currently has a grossed-up dividend yield of 3.75%, excluding the special dividend.

Charter Hall Long WALE REIT (ASX: CLW)

This is another REIT, but its main focus is owning quality properties with a long lease expiry. Its weighted average lease expiry, or WALE, was 12 years at the last disclosure.

It’s invested in various things like telecommunication exchanges leased to Telstra Corporation Ltd (ASX: TLS), Bunnings Warehouse properties leased to Wesfarmers Ltd (ASX: WES), and BP petrol stations.

The rental income is growing, particularly the contracts linked to CPI inflation.  These have a 6.3% weighted average forecast increase in FY23.

It’s expecting to pay a distribution of 28 cents per unit in FY23, translating into a forward yield of almost 7%.

VanEck Morningstar Australian Moat Income ETF (ASX: DVDY)

This is an exchange-traded fund (ETF) that looks to invest in the 25 highest-yielding ASX dividend shares that meet Morningstar’s required criteria, which combines a company’s economic moat and its ‘distance to default’ measures.

An economic moat refers to a company’s competitive advantages. In other words, they are good at what they do and are expected to be resilient against competitors trying to displace them.

Its portfolio can change, but at the moment its biggest three holdings are IPH Ltd (ASX: IPH), Ansell Limited (ASX: ANN), and National Australia Bank Ltd (ASX: NAB).

The ETF passes the dividends it receives to investors.

Bailador Technology Investments Ltd (ASX: BTI)

My final pick is Bailador which invests in unlisted technology businesses that have good growth potential with global addressable markets. It’s looking for tech businesses at the ‘expansion stage’, where they have already been running for two to six years and are generating revenue internationally.

I think the businesses that Bailador invests in have very promising futures.

Some of its investments from years ago have gone on to list on the ASX. It still owns stakes in Straker Translations Ltd (ASX: STG) and Siteminder Ltd (ASX: SDR).

The business has a dividend policy of paying 4% of its pre-tax net tangible assets per annum, paid semi-annually. In other words, it will pay a 2% dividend yield on its NTA every six months.

At 30 September 2022, the pre-tax NTA was $1.75. That implies the dividend would be 7 cents per share and the forward grossed-up dividend yield would be 7.7% if the NTA didn’t change.

The post Set for life: 5 ASX dividend shares I’d invest in if I ever had a million-dollar windfall appeared first on The Motley Fool Australia.

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More reading

• Experts name 2 ASX dividend shares to buy with great yields
• Guess which ASX 200 directors bought $4m worth of their company shares last week
• 2 ASX dividend shares with big yields I’d buy for income
• Don’t miss out on these buy-rated ASX dividend shares: analysts
• When it comes to ASX 200 dividend shares, is there any such thing as truly passive income?

Motley Fool contributor Tristan Harrison has positions in Bailador Technology Investments Limited, RURALFUNDS STAPLED, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bailador Technology Investments Limited, SiteMinder Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended IPH Ltd. The Motley Fool Australia has positions in and has recommended RURALFUNDS STAPLED, Telstra Corporation Limited, Washington H. Soul Pattinson and Company Limited, and Wesfarmers Limited. The Motley Fool Australia has recommended Ansell Ltd., Bailador Technology Investments Limited, IPH Ltd, and Straker Translations. 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 BHP Group Ltd (ASX: BHP) share price is out of form on Tuesday.

In morning trade, the mining giant’s shares are down 0.4% to $38.90.

This compares unfavourably to the ASX 200 index, which is up 0.5% this morning.

Why is the BHP share price underperforming?

The BHP share price has come under pressure today following broad weakness in the materials sector.

This follows a poor night of trade for materials stocks, such as BHP’s NYSE listed shares, on Wall Street on Monday. This was driven by a pullback in the price of a range of commodities, including iron ore, amid concerns over the global demand outlook.

Here’s how other materials shares are performing on the ASX 200 today:

• The Fortescue Metals Group Limited (ASX: FMG) share price is down 1.5%
• The OZ Minerals Limited (ASX: OZL) share price is down 1.5%
• The Rio Tinto Limited (ASX: RIO) share price is down 0.6%
• The South32 Ltd (ASX: S32) share price is down 3%

Is this a buying opportunity?

Based on what brokers are saying, this could be a buying opportunity for investors.

For example, Morgans has an add rating and $47.00 price target on its shares and Goldman Sachs has a buy rating and $42.50 price target on them.

Based on the current BHP share price, this implies potential upside of 21% and 9%, respectively, over the next 12 months.

In addition, sweetening the deal further, both brokers are forecasting big dividend yields in the coming years.

The post BHP share price dips following rough night on Wall Street appeared first on The Motley Fool Australia.

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More reading

• Why these 2 ASX 200 dividend shares are ‘of particular interest’: fund manager
• Why is the Fortescue share price surging today?
• Why is the BHP share price leaping 4% on Monday?
• ASX dividend shares or distribution shares? Is there even a difference?
• Brokers name 3 ASX shares to buy 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 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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