Stock Pick

Month: October 2022

  • Guess which ASX 200 coal share is leaping higher on a possible takeover

    Coal miners look resigned to the end of mining this resourceCoal miners look resigned to the end of mining this resource

    The share price of S&P/ASX 200 Index (ASX: XJO) coal producer Coronado Global Resources Inc (ASX: CRN) is taking off after the company confirmed rumours of takeover talks.

    The stock is apparently on the radar of giant coal pure-play Peabody Energy Corporation (NYSE: BTU), with the pair discussing what could be a $9 billion merger.

    The Coronado share price is rocketing 8.27% to trade at $2.095 right now. For comparison, the ASX 200 is up 0.01% at the time of writing.

    Let’s take a closer look at the latest update from the coal stock.

    ASX 200 coal share Coronado takes off on takeover talks

    The Coronado share price is leaping after the company responded to takeover rumours this morning, saying it is indeed in talks with $6 billion coal giant Peabody.

    However, the ASX 200 coal miner said discussions are still ongoing and there’s no guarantee they’ll end in a deal.

    The pair are discussing a combination transaction, Coronado confirmed. At last market close, they boasted a combined market capitalisation of around $9.3 billion.

    The ASX 200 company commanded a $3.2 billion valuation while its New York-listed counterpart is worth around $6.1 billion.

    Peabody operates numerous coal mines across Queensland and New South Wales. It also boasts multiple assets in the United States.

    Similarly, Coronado operates one coal project in Queensland’s Bowen Basin and another three in the United States’ Central Appalachian region.

    Today’s gains included, the Coronado share price has soared 61% since the start of 2022, driven by soaring coal prices.

    The company’s revenue rocketed 147% in the first half of 2022, reaching US$1,978 million. Its adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) also lifted a massive 3,204% to US$849 million.

    Meanwhile, Peabody posted US$577.8 million of adjusted EBITDA for the June quarter, marking a 373% year-on-year increase, while its revenue lifted more than 80% to US$1,322 million. Its share price has jumped 133% year to date.

    No doubt ASX 200 coal fans will be watching the share closing in coming months to learn if the takeover talks come to fruition.

    The post Guess which ASX 200 coal share is leaping higher on a possible takeover appeared first on The Motley Fool Australia.

    .

    More reading

    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.

    from The Motley Fool Australia https://ift.tt/2qdJrNI

  • CSL share price lower despite FY23 guidance update

    A health professional wearing a stethoscope and scrubs shrugs with uncertainty.

    A health professional wearing a stethoscope and scrubs shrugs with uncertainty.

    The CSL Limited (ASX: CSL) share price is trading lower on Wednesday.

    In afternoon trade, the biotherapeutics giant’s shares are down almost 1% to $280.65.

    Why is the CSL share price falling today?

    The weakness in the CSL share price today appears to have been driven by broad selling in the healthcare sector.

    In fact, only one constituent of the S&P/ASX 200 Health Care index is in positive territory today, which has led to the index falling 0.8%.

    Unfortunately, this has offset some relatively positive news coming out of the company’s annual general meeting today.

    What’s happening at the AGM?

    At the event, CSL’s CEO and managing director, Paul Perreault, provided investors with an update on the company’s performance so far in FY 2023.

    The good news is that CSL is performing in line with its guidance for the financial year. Perreault said:

    In terms of guidance for Financial Year 23, I am pleased to reaffirm that: Revenue growth to be in the range of 7 to 11% over Financial Year 22 at constant currency, with net profit after tax expected to be approximately in the range of US$2.4 to US$2.5 billion at constant currency. On a like for like basis, this represents a growth of between 10 – 14%.

    It is worth noting that this guidance excludes CSL Vifor earnings and costs associated with the acquisition, as well as non-recurring COVID vaccine contribution. CSL intends to provide a further update on its guidance, including CSL Vifor, later this month.

    Looking further ahead, Perreault is confident on the company’s outlook. He concluded:

    To close, I am absolutely certain that the fundamentals of our business are strong and the diversity of our pipeline is rich. This really sets up CSL to build on our track record of sustainable growth for years to come.

    The post CSL share price lower despite FY23 guidance update appeared first on The Motley Fool Australia.

    .

    More reading

    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 positions in and has recommended CSL Ltd. 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.

    from The Motley Fool Australia https://ift.tt/PbxQjFL

  • Why is the Bitcoin price outperforming for Australian crypto investors?

    a woman wearing dark clothing and sporting a few tatoos and piercings holds a phone and a takeaway coffee cup as she strolls under the Sydney Harbour Bridge which looms in the background.

    a woman wearing dark clothing and sporting a few tatoos and piercings holds a phone and a takeaway coffee cup as she strolls under the Sydney Harbour Bridge which looms in the background.

    The Bitcoin (CRYPTO: BTC) price currently stands at US$19,093 (AU$30,474).

    That’s about where the world’s top crypto was trading at yesterday, having hit highs of US$19,241 and a low of US$18,926 over the past 24 hours, according to data from CoinMarketCap.

    This flat performance over the day isn’t entirely unwelcome. As you likely know, BTC and almost all cryptos have trended sharply lower over the course of 2022.

    Why have cryptos been under so much pressure?

    Faced with stiff headwinds from soaring inflation and fast-rising interest rates across much of the globe, the Bitcoin price has plummeted 60% year-to-date. And it’s down 72% from the all-time highs it hit on 10 November last year. That’s when central banks, including our own RBA, were flagging years more of low inflation and low rates.

    That party came to an end this year. A year that has seen the RBA ratchet up rates from the historic low 0.10% to the current 2.60%, with more rate hikes likely ahead in a bid to tame inflation.

    The US Federal Reserve has been even more aggressive, raising the benchmark rate in the world’s largest economy to the current 3.25%. And looking ahead, Fed officials are sounding a significantly more hawkish tone than RBA governor Philp Lowe.

    Which brings us back to the Bitcoin price.

    More specifically, the price in US dollars versus Aussie dollars.

    Why is the Bitcoin price outperforming for Australian crypto investors?

    One of the side effects of the aggressive Fed tightening has been a strengthening of the US dollar against most other global currencies. The greenback has also gained amid rising geopolitical uncertainties due to its haven status.

    This has seen the Aussie dollar value slip from 76 US cents in early April to just under 63 US cents today.

    Which means Aussie crypto investors selling their holdings for US dollars will be receiving a welcome foreign exchange boost.

    Commenting on this relative advantage for Bitcoin investors, head of trading at Capital.com Australia Brian Gould said:

    US dollar strength has meant that Australian dollar traders who entered Bitcoin at current price levels in mid-June have actually made a 10% return in four months, should they choose to cash in their coins and convert the US dollar proceeds back to Australian dollars.

    Those Australian traders interested in the dual diversification of cryptocurrency returns that have low correlation with equity and commodity markets, as well as the US dollar diversification inherent in cryptocurrencies during uncertain times for inflation and risk assets, are now benefiting by simply holding onto their positions.

    Indeed, on 18 June the Aussie dollar was worth 69.3 US cents. Today it’s trading for 62.7 US cents.

    On 18 June, the Bitcoin price stood at US$19,045, right about where it’s trading for today.

    That’s in US dollars, mind you.

    But Aussie crypto investors who bought on 18 June and opt to sell today, will be up 11.5% in Aussie dollar terms.

    Mind the gap.

    The post Why is the Bitcoin price outperforming for Australian crypto investors? appeared first on The Motley Fool Australia.

    .

    More reading

    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 positions in and has recommended Bitcoin. The Motley Fool Australia has positions in and has recommended Bitcoin. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

    from The Motley Fool Australia https://ift.tt/Pb0Hs3K

  • Queensland Pacific Metals share price soars 18% on General Motors deal

    a miner holds his thumb up as he holds a device in his other hand.a miner holds his thumb up as he holds a device in his other hand.

    The Queensland Pacific Metals Ltd (ASX: QPM) share price is taking off today after the company announced a strategic collaboration with electric vehicle-focused automotive giant General Motors Company (NYSE: GM).

    General Motors will fork out up to $108 million for an equity stake in the battery metals-focused mineral developer.

    The pair have also outlined a long-term offtake agreement. That will see the US-listed company snapping up all uncommitted nickel and cobalt sulphate produced at Queensland Pacific’s TECH Project.

    The Queensland Pacific Metals share price is surging on the news, gaining 18% to trade at 17.7 cents.

    Let’s take a closer look at the news driving the All Ordinaries Index (ASX: XAO) share higher today.

    Queensland Pacific Metals rockets on General Motors deal

    The Queensland Pacific Metals share price is surging on news the company has agreed to supply General Motors with battery-making materials.

    General Motors expects to use the materials to produce Ultium battery cells for its electric vehicles.

    The partnership will kick off with General Motors investing $31.4 million in the All Ords company.

    That will see the car manufacturer buying 174.6 million shares for 18 cents apiece. It will also receive 46.8 million options with a 20-cent exercise price.

    The cash will go towards the construction of the TECH Project, expected to kick off next year.

    In return, the pair will commit to a 15-year offtake agreement for the first phase of the project. That will see General Motors snapping up around 6,000 tonnes of nickel and around 800 tonnes of cobalt per annum.

    That will increase to around 16,000 tonnes and 1,800 tonnes respectively when Queensland Pacific Metals’ other commitments are met.

    General Motors has also agreed to participate in a capital raise conducted as part of the TECH Project’s final investment decision (FID). That will see the automotive giant with offtake rights for the life of the project.

    After that, the pair could commit to an additional yearly supply of around 16,000 tonnes of nickel and 1,800 tonnes of cobalt from the project’s second phase expansion.

    What did management say?

    Queensland Pacific Metals managing director Dr Stephen Grocott said the company’s “absolutely delighted” with the news driving its share price. He continued:

    GM’s strategic direction, company values and focus on sustainability in its pursuit of making electric vehicles for all is a perfect fit for Queensland Pacific Metals and our TECH Project.

    GM’s investment in our company and the associated offtake brings us one step closer towards construction of the TECH Project where we will one day aim to deliver the world’s cleanest produced nickel and cobalt.

    General Motors vice president of global purchasing and supply chain Jeff Morrison also commented:

    The collaboration with Queensland Pacific Metals will provide GM with a secure, cost-competitive and long-term supply of nickel and cobalt from a free-trade agreement partner to help support our fast-growing EV production needs.

    GM already has binding agreements securing all battery raw material supporting our goal of 1 million units of annual capacity in North America by the end of 2025.

    This new collaboration builds on those commitments as we look to secure supply through the end of the decade, while also helping continue to expand the EV market.

    Queensland Pacific Metals share price snapshot

    Despite today’s performance, the Queensland Pacific Metals share price has had a rough year so far.

    Today’s gains included, the stock has fallen nearly 3% so far this year. It has also dumped 30% since this time last year.

    For comparison, the All Ordinaries has slumped around 14% year to date and 10% over the last 12 months.

    The post Queensland Pacific Metals share price soars 18% on General Motors deal appeared first on The Motley Fool Australia.

    .

    More reading

    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.

    from The Motley Fool Australia https://ift.tt/UInW7kd

  • CBA share price higher on AGM update and sector rebound

    A man sees some good news on his phone and gives a little cheer.

    A man sees some good news on his phone and gives a little cheer.

    The Commonwealth Bank of Australia (ASX: CBA) share price is having a great day on Wednesday.

    At the time of writing, the banking giant’s shares are up 1.5% to $95.59.

    Why is the CBA share price rising?

    Investors have been bidding the CBA share price higher today for a couple of reasons.

    One is the release of the bank’s annual general meeting presentation this morning.

    Although the bank didn’t provide any details on its performance during the current quarter, its CEO, Matt Comyn, spoke positively about the medium to long term. He commented:

    Overall, we remain fundamentally optimistic about the medium to long term opportunities for Australia, as well as our capacity to provide support in the immediate future for customers who need us.

    Looking ahead, we will continue to invest in the Bank’s core retail, business and institutional banking franchises, to reinforce our proposition and extend our digital leadership. We believe that strong customer engagement and deeper relationships will continue to underpin our ongoing positive performance.

    What else?

    Also potentially giving the CBA share price a lift today has been the Bank of Queensland Ltd (ASX: BOQ) full year results release.

    Although the bank’s result itself wasn’t too flash, its exiting net interest margin appears to show how rising interest rates are boosting bank profitability.

    In response to the results, Goldman Sachs said:

    BOQ’s FY22 cash earnings of A$508 mn were down -5% on pro-forma pcp and 5% below GSe, driven by a higher-than-expected expenses (+2% vs. GSe) and BDDs.

    The highlight of the result was that BOQ’s 4Q22 NIM came in at 1.81%, well ahead of the 1.75% 2H22 average, and also our FY23E forecast of 1.78% and Visible Alpha Consensus Data forecast of 1.75%.

    Investors appear optimistic that CBA will report similar improvements when it hands down its first quarter update next month.

    The post CBA share price higher on AGM update and sector rebound appeared first on The Motley Fool Australia.

    .

    More reading

    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.

    from The Motley Fool Australia https://ift.tt/iElVC8k

  • BrainChip share price higher on new US patent issue

    a woman holds her hand out under a graphic hologram image of a human brain with brightly lit segments and section points.

    a woman holds her hand out under a graphic hologram image of a human brain with brightly lit segments and section points.

    The BrainChip Holdings Ltd (ASX: BRN) share price is avoiding the weakness in the tech sector today.

    At the time of writing, the semiconductor company’s shares are up 2.5% to 86.5 cents.

    This compares favourably to the S&P/ASX All Technology Index which is currently down 1%.

    Why is the BrainChip share price rising?

    The BrainChip share price is defying the tech sector weakness on Wednesday thanks to the release of an announcement this morning.

    According to the release, the US Patents and Trademarks Office (USPTO) has issued the company with a patent for “An Improved Spiking Neural Network.”

    The patent, which is known as US 11,468,299, was issued on 11 October by the USPTO. Management believes it is a valuable intellectual property (IP) asset and increases the patent protection around BrainChip’s neuromorphic on-chip learning technology.

    What exactly is the patent?

    The release explains that the patent protects the learning function of BrainChip’s digital neuron circuit implemented on a neuromorphic integrated circuit/system. It stated:

    The neurons and synapses are implemented efficiently so that a significantly high number of them can be implemented in the most efficient and resource constrained computational environment.

    The memory management of membrane potential values, synapse weights and synapse connections amongst the spiking neuron circuits is handled innovatively, contributing significantly to reducing the power and the cost when delivering edge applications to customers.

    The patent protects a key learning feature when choosing the synapses for weight variation during on-chip learning. The right combination of factors related to accuracy and efficiency is chosen that delivers valuable results during edge learning.

    Following the issue of this patent, BrainChip’s portfolio now comprises 10 US and 1 Chinese issued patents. It also has 27 patent applications pending across the globe.

    Time will tell if these patents and its technology ever generate meaningful revenue for the $1.4 billion company.

    The post BrainChip share price higher on new US patent issue appeared first on The Motley Fool Australia.

    .

    More reading

    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.

    from The Motley Fool Australia https://ift.tt/fl0wqZR

  • The Novonix share price has just capped off a shocker first quarter. What’s next?

    A male investor wearing a white shirt and blue suit jacket sits at his desk looking at his laptop with his hands to his chin, waiting in anticipation.A male investor wearing a white shirt and blue suit jacket sits at his desk looking at his laptop with his hands to his chin, waiting in anticipation.

    The Novonix Ltd (ASX: NVX) share price fell by 21% over the first quarter of FY22.

    Today, the battery technology and materials company is trading down 2.5% to $1.76.

    By comparison, over the first quarter the S&P/ASX All Ordinaries Index (ASX: XAO) dipped by 0.6%. So, Novonix did about 20 times worse than the broader market.

    Drill down even further, and Novonix’s home sector — the S&P/ASX 200 Information Technology Index (ASX: XJI) — actually gained 2.3%.

    The quarter ended with an absolute shocker in September. Despite no news from the company, the Novonix share price dropped by 27%.

    Yeah, Q1 FY23 was not a great period for Novonix. What on Earth is going on here?

    Why has the Novonix share price been slaughtered?

    Unfortunately, Q1 FY23 was just an extension of a big loss in value for the Novonix share price that took place in Q4 FY22.

    Over the past six months, the Novonix share price has dropped by more than 70%. Most of that occurred in Q4 FY22, but let’s focus on what happened in Q1 FY23.

    Arguably, the worst bit of news for Novonix shareholders was the company’s annual report, released in August. It detailed a $71.4 million loss for FY22 and a $40.35 million net operating cash outflow.

    Now, it’s not uncommon for growth companies to spend big in their expansion phase.

    As my Fool colleague Zach reported, a big part of the FY22 outflow was the purchase of an approximate 5% stake in United States battery tech company KORE Power. That cost Novonix $35.1 million in cash and scrip in January.

    It’s worth noting that Novonix did report revenue growth in FY22. Revenue came in at $8.4 million, up from $5 million in FY21. But it’s yet to turn a profit.

    The company added to its costs when it gave rather large pay rises to key management personnel.

    As Zach noted, the company increased its remuneration by 224% in FY22 to $21.45 million. That’s up from $6.6 million in FY21.

    Here’s the clincher, though.

    On 20 September, Novonix’s auditor, PriceWaterhouseCoopers (PWC), said there was “a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern”. Yikes.

    The auditors said Novonix “remains dependent upon raising additional funding to finance its ongoing expansionary activities”.

    Shareholders can ask questions this month

    October heralded a new 52-week low share price of $1.655 for Novonix. This was recorded during intraday trading on 3 October. This is a pretty good indicator that shareholders are feeling nervous.

    Continuing pressure for Novonix comes in the form of rising interest rates. Obviously, that makes debt more expensive, and as a growth company, Novonix needs to borrow to fund its expansion activities.

    The company increased its borrowings to $1.474 million in FY22, up from $277,060 in FY21. Borrowing costs in FY22 increased to $2.086 million, up from just $229,394 in FY21.

    Shareholders will have the opportunity to ask questions at the upcoming annual general meeting.

    The meeting will be held on 26 October in Brisbane.

    The post The Novonix share price has just capped off a shocker first quarter. What’s next? appeared first on The Motley Fool Australia.

    .

    More reading

    Motley Fool contributor Bronwyn Allen 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.

    from The Motley Fool Australia https://ift.tt/WT1tXgk

  • Guess which ASX lithium share is rocketing 25% on a new, high-grade discovery

    a man in a hard hat and overalls raises his arms and holds them out wide as he smiles widely in an optimistic and welcoming gesture.a man in a hard hat and overalls raises his arms and holds them out wide as he smiles widely in an optimistic and welcoming gesture.

    Small-cap ASX lithium share St George Mining Ltd (ASX: SGQ) is setting the bar high today.

    Following the announcement of high-grade lithium results, the St George Mining share price is up a whopping 25% in morning trade.

    Here’s what the ASX lithium share reported.

    What’s driving investor interest in the ASX lithium share?

    The St George Mining share price is rocketing after the miner reported rock chip assays confirming the presence of up to 2.7% Li2O at its joint venture Mt Alexander project, located in Western Australia.

    The assays come from the first batch of 10 selective rock chip samples the ASX lithium share submitted for laboratory assay.

    St George has a 75% interest in the project area and is the project manager. Mining giant IGO Ltd (ASX: IGO) holds the other 25%.

    Atop the confirmation of high-grade lithium at the site, the ASX lithium share looks to be getting a boost from the report that its field mapping has identified a “significant extension” of the outcropping pegmatites that contain visible lithium minerals.

    The high levels of caesium, tantalum, and rubidium returned in the results are also often associated with significant lithium deposits at depth.

    Commenting on the assays, St George Mining’s executive chairman John Prineas said:

    The grades and scale we are seeing appears to confirm that we are exploring a highly prospective pegmatite hosted lithium mineral system in its early stage of evaluation.

    Our lithium bearing pegmatites are located in the same corridor parallel to the Copperfield Granite where Red Dirt Metals (ASX: RDT) has announced significant lithium discoveries and flagged a pending maiden mineral resource. Zenith Minerals (ASX: ZNC) has also announced on 11 October 2022 the commencement of drilling of prospective pegmatites at its Mt Ida North Lithium Project, north-east of our lithium-bearing pegmatites.

    Additional rock chip and soil sampling assays are pending, and St George aims to commence drilling later this month or early November.

    St George Mining share price snapshot

    Despite today’s big lift, the ASX lithium share remains down 30% in 2022. That compares to a year-to-date loss of 14% posted by the All Ordinaries Index (ASX: XAO).

    The post Guess which ASX lithium share is rocketing 25% on a new, high-grade discovery appeared first on The Motley Fool Australia.

    .

    More reading

    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.

    from The Motley Fool Australia https://ift.tt/Et7IJMk

  • Bank of Queensland share price leaps 8% higher on results and NIM outlook

    Woman looks amazed and shocked as she looks at her laptop.

    Woman looks amazed and shocked as she looks at her laptop.

    The Bank of Queensland Ltd (ASX: BOQ) share price is having a very strong day.

    In morning trade, the regional bank’s shares are up 8% to $7.38.

    Why is the Bank of Queensland share price racing higher?

    Investors have been bidding the Bank of Queensland share price higher today following the release of the bank’s full year results.

    For the 12 months ended 31 August, Bank of Queensland reported a 5% decline in cash earnings to $508 million. This was driven a 12-basis points reduction in its net interest margin to 1.74%, which was caused by the impacts of increasing competition and swap rate volatility.

    According to a note out of Goldman Sachs, it was disappointed with the bank’s performance, noting that its earnings fell short of its expectations. It said:

    BOQ’s FY22 cash earnings of A$508 mn were down -5% on pro-forma pcp and 5% below GSe, driven by a higher-than-expected expenses (+2% vs. GSe) and BDDs (FY22 BDD charge of A$13 mn vs. GSe A$1 mn contribution). Accordingly, PPOP was -3% lower than our estimates.

    And while Bank of Queensland’s final dividend of 24 cents per share came in ahead of Goldman’s estimate of 23 cents, it was in line with consensus estimates.

    So why are investors buying its shares?

    The catalyst for the rise in the Bank of Queensland share price appears to have been its net interest margin at the end of FY 2022.

    While its average for the full year fell notably year over year, its exiting net interest margin was up strongly. This could bode well for the year ahead.

    Goldman Sachs stated:

    The highlight of the result was that BOQ’s 4Q22 NIM came in at 1.81%, well ahead of the 1.75% 2H22 average, and also our FY23E forecast of 1.78% and Visible Alpha Consensus Data forecast of 1.75%.

    Are its shares a buy?

    At present, Goldman has a neutral rating and $8.16 price target on the bank’s shares. But that rating could change in the coming days once the broker has fully digested the results. So, investors may want to sit tight and wait for that.

    The post Bank of Queensland share price leaps 8% higher on results and NIM outlook appeared first on The Motley Fool Australia.

    .

    More reading

    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.

    from The Motley Fool Australia https://ift.tt/XRDqTkG

  • Everything you need to know about the upsized Bank of Queensland dividend

    A man lies back in a deck chair with his hands behind his head on a quiet and beautiful beach with blue sky and water in the background.

    A man lies back in a deck chair with his hands behind his head on a quiet and beautiful beach with blue sky and water in the background.

    Owners of Bank of Queensland Ltd (ASX: BOQ) shares are benefiting today. Not only are shareholders getting a lift in the value of their shares (with the BOQ share price currently up more than 7%), but the ASX bank share also announced a bigger dividend in its FY22 result.

    BOQ said that the result, which saw statutory net profit after tax (NPAT) rise 15% to $426 million, reflected “good business momentum, tightly managed costs and improved portfolio quality”.

    Let’s have a look at how much better the payout is.

    FY22 BOQ dividend

    The bank’s board decided to declare a final ordinary dividend per share of 24 cents. This was an increase of 9% from the first half of FY22. It also represents a dividend payout ratio of 64.7% of cash earnings.

    BOQ said that its cash earnings per share (EPS) increased by 5% to 78.4 cents per share for the year. The uplift was the result of higher underlying net profit after tax and the benefit of a full year of ME Bank earnings.

    The bank’s board increased the full-year dividend by 18% to 46 cents per share. That represents 58.7% of full-year cash EPS.

    Not only did the higher profit support the bigger dividend, but BOQ also pointed to its common equity tier 1 (CET1) ratio of 9.57%, making it “unquestionably strong”.

    How big will the FY23 payment be?

    The board told investors that its dividend payout ratio target range is between 60% to 75% of cash earnings.

    However, BOQ cautioned that the amount of any dividend paid will be at the discretion of the board and depends on several factors – generating profit, having cash to distribute, expectations of future profit, or when the forecast timeframe for capital demands of the business allows for a “prudent” distribution to shareholders.

    But, in terms of profit, in its outlook guidance, the ASX bank share outlined a number of positives that could lead to “quality sustainable profitable growth”. This could be helpful for growth of the BOQ dividend.

    BOQ is expecting market credit growth of 3.5% in housing and 6.5% in business. The bank is expecting growth ahead of the market, optimising margin, revenue, and returns. There is net growth across all of its brands, both retail and business.

    The ASX bank share also pointed to positive momentum for its lending profitability, thanks to tailwinds from rising interest rates, partly offset by headwinds from wholesale funding.

    But, there are cost headwinds from inflation and investing in building a digital bank. This will be partly offset by simplification and integration benefits.

    BOQ is expecting positive jaws – that is, for revenue to grow faster than expenses.

    BOQ dividend yield

    Using the FY22 payout of 46 cents, Bank of Queensland has a grossed-up dividend yield of 9.1% at the current BOQ share price.

    The post Everything you need to know about the upsized Bank of Queensland dividend appeared first on The Motley Fool Australia.

    .

    More reading

    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.

    from The Motley Fool Australia https://ift.tt/DlToS9P