The Xero Limited (ASX: XRO) share price languished today despite a broadly positive session for Australian shares.

Investors in the cloud-based accounting software provider might find some solace in the fact that they’re not alone — misery loves company, right? Other notable ASX tech shares that experienced weakness today include Link Administration Holdings Ltd (ASX: LNK) and TechnologyOne Ltd (ASX: TNE).

Though, Xero is mostly to blame for dragging the technology sector into the red. At the closing bell, Xero shares shrunk 3.3% in value to $69.29 apiece. In contrast, the S&P/ASX 200 Index (ASX: XJO) finished 0.9% higher.

Losing one of its growth engines

Xero’s bottom line is treading on the cusp of profitability. This puts a greater focus on the software company’s top-line growth trajectory. If revenue begins to slow, it could significantly impact the future potential earnings power of the company, and its valuation.

Yesterday afternoon, the Australian Financial Review reported on the delay to the latest phase in the United Kingdom’s Making Tax Digital (MTD) initiative. Under the revised plan, the use of digital accounting for income tax self-assessment (ITSA) has been pushed back from April 2024 to April 2026.

Those earning more than £50,000 (A$87,975) will now have an additional two years to adopt an MTD-supported software solution. The change is a blow to Xero’s share price and its short-term growth ambitions in its largest market outside of Australia.

The accounting software company provided the news itself via a blog three weeks ago. Within the blog, Xero shared the new-look roadmap for its major UK catalyst, the MTD rollout:

• April 2026 — MTD for ITSA instituted for businesses, self-employed individuals, and landlords with income over £50,000
• April 2027 — MTD for ITSA instituted for businesses, self-employed individuals, and landlords with income over £30,000

Importantly, the changes are merely a delay and not a removal of previous plans. However, the high rate of inflation puts a greater value on cash flows in the near term.

Does the Xero share price have potential?

Shareholders might be wary of slowing growth in the future. Though, Xero has been growing its cash from operations at an impressive margin for years. The question is whether there will be considerable profits to be made when the company decides to take its foot off the gas.

Two brokers that are opportunistic on the Xero share price at the moment are Citi and Bell Potter. Both currently hold a price target of $97.90 on Xero shares. That would mean investors at today’s price could be looking at roughly a 42% upside.

The Xero share price is down an astonishing 45.8% over the past year.

The post Why did the Xero share price take such a beating on Wednesday? appeared first on The Motley Fool Australia.

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More reading

• When it comes to ASX 200 dividend shares, is boring better?
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• ASX 200 lifts despite latest Aussie inflation data
• Why European Lithium, PEXA, PolyNovo, and Xero shares are dropping today
• What’s the outlook for ASX 200 gold shares in 2023?

Motley Fool contributor Mitchell Lawler 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 Link Administration and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Technology One. 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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Whilst I’m a valuer of consistency when it comes to investing, I still regard a new year as a great opportunity to take a look at my ASX share portfolio and think about what my next moves might be.

So here are three dependable ASX shares that I’m seriously considering adding to my share portfolio in 2023.

3 ASX shares that I’m hoping to buy this year

Brickworks Limited (ASX: BKW)

Brickworks is sometimes derided as a ‘borin’ kind of ASX 200 share. But that’s precisely why I would love to own this company. Brickworks’ main business is the manufacturing and sale of construction materials, as its name implies.

But this company also has a lucrative property portfolio, which it cannily builds up using surplus land from its manufacturing facilities. This enables the company to mitigate the cyclical nature of the construction materials industry.

Further, the company also has a share investment portfolio, headlined by a massive stake in Washington H. Soul Pattinson and Co Ltd (ASX: SOL), which is another ASX 200 share I deeply admire.

Perhaps what attracts me most to Brickworks shares is the company’s stellar dividend track record. Brickworks hasn’t cut its dividend in more than four decades, and more often than not, gives its investors an annual dividend pay rise.

All of these factors are driving me to add Brickworks to my portfolio in 2023 if I can get an attractive price.

Vanguard MSCI Australian Small Companies Index ETF (ASX: VSO)

This exchange-traded fund (ETF) from Vanguard is an investment I already own. However, I am hoping to add even more to my holdings in 2023. Unlike the more popular Vanguard Australian Shares Index ETF (ASX: VAS), this fund focuses exclusively on the smaller side of the ASX.

Instead of BHP Group Ltd (ASX: CBA) and Commonwealth Bank of Australia (ASX: CBA), you’ll find companies like Lynas Rare Earth Ltd (ASX: LYC), Cleanaway Waste Management Ltd (ASX: CWY) and Carsales.com Ltd (ASX: CAR) amongst this ETF’s major holdings.

I think smaller ASX shares have far more capacity for growth than our largest businesses. So I like the diversification that this ETF brings to my portfolio. This fund also tends to pay out very healthy dividend distributions as well.

TechnologyOne Ltd (ASX: TNE)

My final 2023 hopeful is an ASX 200 tech share in TechnologyOne. Tech shares had an exceptionally rough year last year. But TechnologyOne was spared the pain. I think this was due to the high quality of this business. This company is a top provider of enterprise software to a range of clients, including companies, universities and governments.

TechnologyOne has delivered some impressive growth numbers over many years too. In FY2022, the company managed to boost its revenues by 19% and its after-tax profits by an even better 22%. I don’t see the success slowing down any time soon either.

So this is the third ASX share I would love to see in my portfolio by the end of 2023, and I’m hoping that this year will give me a compelling price at some point to realise this dream.

The post New year, new look: 3 dependable ASX shares I’ll be adding to my portfolio in 2023 appeared first on The Motley Fool Australia.

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More reading

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• How ASX dividend shares can solve retirement income needs
• Brokers name 3 ASX shares to buy now
• 5 things to watch on the ASX 200 on Friday
• Here’s how I’ll be investing my money in ASX shares in 2023

Motley Fool contributor Sebastian Bowen has positions in Vanguard Australian Shares Index ETF, Vanguard Msci Australian Small Companies Index ETF, 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 Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Carsales.com and Technology One. 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 was a good day to be invested in many S&P/ASX 200 Index (ASX: XJO) shares, with the index gaining 0.9% on Wednesday to close at 7,195.3 points.

In a welcome change from yesterday’s session, nearly all sectors ended the day higher than they started.

That was despite the Australian Bureau of Statistics releasing seemingly disappointing inflation data. The Aussie inflation rate rose 7.3% over the 12 months to November, with the cost of housing leading the increase.

Leading the surge among ASX 200 shares today were miners, with the S&P/ASX 200 Materials Index (ASX: XMJ) lifting 1.7%. Joining it in the green was the S&P/ASX 200 Real Estate Index (ASX: XRE), gaining 1.9%.

However, it wasn’t such a good day for energy providers. The S&P/ASX 200 Utilities Index (ASX: XUJ) fell 0.5% today.

Let’s take a look at the shares that led the market higher on Wednesday.

Top 10 ASX 200 shares countdown

Today’s top-performing ASX 200 stock was none other than former favourite Novonix Ltd (ASX: NVX).

The tech share lifted 9.3% today to close at $1.755. Though, that’s still 82% lower than it was this time last year.

These shares made today’s biggest gains:

ASX-listed company	Share price	Price change
Novonix Ltd (ASX: NVX)	$1.755	9.35%
IGO Ltd (ASX: IGO)	$14.63	5.18%
Allkem Ltd (ASX: AKE)	$12.47	5.14%
Liontown Resources Ltd (ASX: LTR)	$1.50	4.9%
Lovisa Holdings Ltd (ASX: LOV)	$25.33	4.63%
Sayona Mining Ltd (ASX: SYA)	$0.235	4.44%
Mineral Resources Ltd (ASX: MIN)	$87.93	3.75%
AMP Ltd (ASX: AMP)	$1.315	3.54%
Megaport Ltd (ASX: MP1)	$6.50	3.5%
Pinnacle Investment Management Group Ltd (ASX: PNI)	$10.13	3.47%

Our top 10 shares countdown is a recurring end-of-day summary to let you know which companies were making big moves on the day. Check in at Fool.com.au after the weekday market closes to see which stocks make the countdown.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• 3 ASX 200 lithium shares brokers just upgraded to ‘buy’
• Why Allkem, Pilbara Minerals, Talga, and Westgold shares are storming higher today
• Will 2023 be a golden year for ASX 200 mining shares?
• 5 things to watch on the ASX 200 on Wednesday

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 positions in and has recommended Lovisa, Megaport, and Pinnacle Investment Management Group. The Motley Fool Australia has positions in and has recommended Pinnacle Investment Management Group. The Motley Fool Australia has recommended Lovisa and Megaport. 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 ASX could be one of the best places to find investment income. Plenty of S&P/ASX 200 Index (ASX: XJO) dividend shares have attractive dividend yields.

Term deposit interest rates have jumped higher thanks to the interest rate hikes by the Reserve Bank of Australia (RBA).

One of the main attractions of salary earnings is that it’s consistent. Boring dividends may not be exciting, but they may be what some people need if they’re relying on the dividend income.

Fund manager Michael O’Neill from Investors Mutual points to evidence that dividends can provide more reliable returns than capital gains because dividend income is “decided by the company’s board and is generally a reflection of the company’s overall profitability”.

He suggested that “an investor’s dividends should stay much the same if they have a diversified portfolio made up of quality companies.”

Which ASX 200 dividend shares can provide resilient income?

The fund manager said that Investors Mutual prefers industrial businesses for long-term, consistently high dividends, while also trying to find ones that can provide a steady or growing dividend in this high inflation environment.

There are a few different things that the fund manager suggests could mean good performance during high inflation:

One factor is pricing power – “their strong market position gives them the ability to pass on rising costs to their customers e.g. home and motor insurance companies like Suncorp Group Ltd (ASX: SUN).”

Another suggestion was that the potential dividend players should be in a rational industry – “the main players are motivated by profit and act ‘rationally’ to maximise long-term profits – not spending large amounts of capital at the top of the cycle, or chasing market share at all costs through unprofitable discounting. The explosives industry for example has rationalised significantly and is at a strong point in the capital cycle, benefitting companies like Orica Ltd (ASX: ORI).”

The third idea was related to businesses that sell essential products and services – “people need to buy them, no matter how high prices go e.g. consumer staples companies like Metcash Limited (ASX: MTS).”

Finally, O’Neill suggested that potential ASX 200 dividend shares need to have “capable, proactive management that can put well-structured contracts in place that make difficult conversations about passing on inflationary costs easier. Ideally, contracts are structured with adjustments for inflation and pass-through of essential input costs such as fuel. Aurizon Holdings Ltd (ASX: AZJ) benefits from such contractual protections.”

Financial estimates

Seeing as we’re currently in the 2023 financial year, let’s have a look at the FY23 projections on Commsec.

Suncorp shares are valued at under 12 times FY23’s estimated earnings, with a possible grossed-up dividend yield of 9%.

Orica shares are valued at 19 times FY23’s estimated earnings with a potential dividend yield of 2.75%.

Metcash shares are valued at 13 times FY23’s estimated earnings with a possible grossed-up dividend yield of 7.8%.

Aurizon shares are priced at under 14 times FY23’s estimated earnings with a potential grossed-up dividend yield of 7.7%.

The post When it comes to ASX 200 dividend shares, is boring better? appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• ASX 200 lifts despite latest Aussie inflation data
• What’s the outlook for ASX 200 gold shares in 2023?
• ‘High cash conversion’: 2 ASX shares to buy before they rocket even more
• 5 things to watch on the ASX 200 on Wednesday

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 recommended Aurizon and Metcash. 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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