Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a number of broker notes this week.

Three ASX shares brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Core Lithium Ltd (ASX: CXO)

According to a note out of Macquarie, its analysts have retained their outperform rating on this lithium miner’s shares with an improved price target of $1.50. This follows news that the company’s drilling activities have led to the more than doubling of the Finniss Lithium Project mineral resource estimate. The Core Lithium share price is trading at 96.7 cents this afternoon.

Fisher & Paykel Healthcare Corporation Ltd (ASX: FPH)

A note out of Goldman Sachs reveals that its analysts have retained their conviction buy rating and $27.00 price target on this medical device company’s shares. Fisher & Paykel Healthcare remains Goldman’s top pick in the healthcare sector. The broker believes the company is now on the correct side of an earnings inflection cycle. This is being driven predominantly by demand, but importantly compounded by a lower-risk margin recovery profile. The Fisher & Paykel Healthcare share price is fetching $24.31 today.

IGO Ltd (ASX: IGO)

Analysts at Citi have retained their buy rating and $17.10 price target on this battery materials miner’s shares. Although the broker suspects that lithium shares could struggle in the near term due to lithium price weakness, it remains positive on IGO due partly to its attractive valuation. In addition, the broker believes that lithium prices could rebound when industry restocking picks up in the coming months. The IGO share price is trading at $13.38 on Wednesday.

The post Top brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

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More reading

• Broker gives its verdict on the Core Lithium share price
• Here are the 3 most heavily traded ASX 200 shares on Monday
• Why Block, BrainChip, Core Lithium, and Life360 shares are racing higher
• Why is the Core Lithium share price soaring 11% today?
• Here are the 10 most shorted ASX shares this week

Motley Fool contributor James Mickleboro has positions in Nextdc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Harvey Norman and Tyro Payments. The Motley Fool Australia has positions in and has recommended Harvey Norman. The Motley Fool Australia has recommended Tyro Payments. 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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National Australia Bank Ltd (ASX: NAB) shares offer investors an impressive dividend yield. It’s one of the biggest dividend payers on the ASX. But, how much would an investor need to put into the S&P/ASX 200 Index (ASX: XJO) bank share to receive $200 per month? I’ll answer that in this article.

Owning NAB for passive income could be a better idea than Commonwealth Bank of Australia (ASX: CBA) because of the relative valuation difference between the two, resulting in a stronger yield for NAB shareholders.

I’ll show you what I mean.

According to Commsec, the NAB share price is valued at under 12 times FY23’s estimated earnings, whereas CBA shares are priced at more than 16 times FY23’s estimated earnings.

CBA is projected to pay an annual dividend of $4.40 per share in FY23, which translates into a forward grossed-up dividend yield of 6.4%, according to Commsec numbers.

NAB shares could pay an annual dividend per share of $1.72. This translates into a potential grossed-up dividend yield of 8.35%.

Monthly dividend income goal

NAB doesn’t pay a dividend every month. Instead, it pays a dividend every six months.

So, I think it’s better to think of the goal of $200 per month as an annual target of $2,400, which can then be divided into 12 equal amounts.

I’m also going to ignore the effect of franking credits for this scenario because franking credits can have a different impact on different investors, depending on their tax situation. For low-income earners, the franking credits would be a bonus.

To receive $2,400 of dividend income in 2023, using the current projections, I’d need to own 1,396 NAB shares.

At the current NAB share price of around $29.40, an investor would need to allocate around $41,000 to receive the desired amount.

NAB is currently predicted to increase its dividend each year to FY25. By the 2025 financial year, the ASX 200 bank share could be paying an annual dividend per share of $1.78. If an investor owned 1,396 NAB shares, that would mean an annual cash dividend income of $2,485. As a monthly amount, that would translate into $207.

Getting a high dividend yield and income growth seems like a good combination to me.

Foolish takeaway

Looking at all of the ASX 200 bank shares on offer, and the valuations, NAB is one of my preferred names in the industry.

I like some of the other banks as well, but I particularly appreciate the job that NAB’s CEO Ross McEwan has done since taking over the leadership role. He has gotten the bank to succeed at the basics while being focused on the future.

The post Here’s how much I’d need to invest in NAB shares to generate a $200 monthly income appeared first on The Motley Fool Australia.

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More reading

• Own NAB shares? Here’s why the ASX 200 bank is facing Federal Court action
• ASX 200 bank shares slump could continue: Morgan Stanley
• Buy NAB and this ASX passive income share: analysts
• Should I buy NAB shares at $29?
• Watch out CBA: This ASX 200 bank share is rapidly growing

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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Due to recent market volatility, there are potentially quite a few bargains on the Australian share market right now.

One of those bargains could be Westpac Banking Corp (ASX: WBC) shares based on what brokers are saying.

Are Westpac shares a bargain buy?

At present, there are a large number of brokers that are recommending Australia’s oldest bank as a buy. This includes the likes of Citi, Goldman Sachs, Morgan Stanley, Morgans, and UBS.

And while these brokers exhibit varying degrees of bullishness, each of their price targets imply potential upside of greater than 15% from current levels.

And that’s not including the dividends that Westpac’s shares will provide over the next 12 months. According to CommSec, the consensus estimate is for a dividend of $1.38 per share in FY 2023.

Based on the current Westpac share price of $22.08, this will mean a 6.25% fully franked yield for investors.

Even greater upside potential

One of the more bullish brokers is Goldman Sachs. It currently has a conviction buy rating and $27.74 price target on Westpac’s shares. This implies potential upside of almost 26% for investors from current levels.

Its analysts recently highlighted that the bank’s shares are “trading at a 22% 12-month forward PER discount to peers.” Whereas historically they have traded at just a 2% discount. This is despite the bank having arguably one of the strongest outlooks in the sector at present. Goldman adds:

We are Buy-rated (on CL) and continue to see WBC as our preferred exposure to the A&NZ Financials reflecting: i) its strong leverage to rising rates, ii) despite WBC revising its FY24E cost target to A$8.6 bn (from A$8.0 bn), the bank’s performance on cost management remains strong in this inflationary environment with a 9% step down in costs expected over the next two years, iii) the business is still investing effectively in its franchise, and iv) we note the stock is trading at a notable discount to peers, versus the historical average discount of 2%.

All in all, Goldman appears to believe this could make Westpac shares a bargain buy right now.

The post Why Westpac shares are a smart buy for ASX bargain hunters appeared first on The Motley Fool Australia.

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More reading

• ASX 200 bank shares slump could continue: Morgan Stanley
• How I would invest in ASX shares to retire rich
• Buy Westpac and this high-yield ASX dividend share: analysts
• Top ASX dividend shares to buy in March 2023
• Westpac predicts 7 interest rate cuts from 2024, but…

Motley Fool contributor James Mickleboro has positions in Westpac Banking. 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 Westpac Banking. 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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National Australia Bank Ltd (ASX: NAB) shares are down 0.9% in afternoon trade, broadly in line with the wider market decline. 

The S&P/ASX 200 Index (ASX: XJO) bank stock closed yesterday trading for $29.71 per share. Shares are currently changing hands for $29.44 apiece.

That’s how NAB shares are moving on Wednesday.

Now, here’s why the big bank is facing Federal Court action. 

How much unpaid overtime is ‘reasonable’?

In news that doesn’t appear to be having a material impact on NAB shares today, The Australian Financial Review reports that the Finance Sector Union (FSU) is launching a Federal Court action against the bank today.

The union is acting on behalf of four managers who allege their work weeks stretched to as much as 55 to 80 hours, with no extra pay for the overtime. The managers are seeking unspecified compensation.

According to FSU national secretary Julia Angrisano:

While they are nominally employed to work 38 hours a week, their actual hours can range between 10 and 16 hours a day, every day of the week, in order to meet excessive workload demands.

Angrisano added that many NAB managers have to do “unpaid work on weekends to complete assigned tasks or risk being sacked”.

The excessive hours, she said, are negatively impacting “their health, their relationships, the time available to spend with their families and their overall quality of life”.

According to NAB’s enterprise agreement, the managers are classified amongst a group that’s not entitled to overtime penalties, and their normal 38 hours work week allows for “reasonable overtime”.

It will be up to the courts to pass judgement on this tricky situation.

But if the union’s action on the four managers’ behalf is successful, NAB shares could face some headwinds, as the penalty may be significant.

“If we win this case, the FSU will be demanding the bank compensate up to 10,000 staff who are also subject to similar levels of excessive unpaid work,” Angrisano said (quoted by the AFR). The union is also seeking “substantial” punitive penalties against NAB.

And the FSU has other big fish in its crosshairs as well.

“This case is just the start,” Angrisano said. “We know the culture of the big banks exploits workers and we will be going after them as well.”

How have NAB shares been tracking?

As you can see in the chart below, NAB shares have been in decline over the past month, but remain up 3% since this time last year.

The post Own NAB shares? Here’s why the ASX 200 bank is facing Federal Court action appeared first on The Motley Fool Australia.

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More reading

• ASX 200 bank shares slump could continue: Morgan Stanley
• Buy NAB and this ASX passive income share: analysts
• Should I buy NAB shares at $29?
• Watch out CBA: This ASX 200 bank share is rapidly growing
• Why did the NAB share price tumble 6% in February?

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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