The team at Goldman Sachs has been running the rule over the healthcare sector following the conclusion of earnings season.

Two ASX 200 healthcare shares that have been given the thumbs up by the broker are listed below. Here’s what its analysts are saying about them:

Cochlear Limited (ASX: COH)

This hearing solutions company could be a top option in the sector according to Goldman Sachs. Its analysts believe Cochlear is well-placed to outperform its guidance in FY 2023 thanks to improving trading conditions.

Goldman has a buy rating and $265.00 price target on its shares. It commented:

We believe Cochlear screens well on these fundamental factors, and largely avoids the margin uncertainties prevalent across other verticals. We expect a sequential improvement in momentum through 2H23 (further elective volume improvement and new processor launch momentum, potentially tempered by some moderation in Acoustics). We forecast above guidance in FY23E (GSe: $306m vs. $290-305m) and believe shares will now be further supported by a newly announced multi-year buyback program (GSe: $75m/year).

ResMed Inc. (ASX: RMD)

Another ASX 200 healthcare share that Goldman Sachs is bullish on is ResMed. It is forecasting double-digit earnings growth through to at least 2026. It also sees scope for even quicker growth depending on the Philips re-entry after a major product recall.

Goldman has a buy rating and $38.00 price target on this sleep treatment company’s shares. It said:

The timing/nature of Philips’ re-entry remains an important debate, but under most scenarios we expect excess demand through end-2023 at least. Whilst supply shortages and cost inflation mitigated the tailwinds through FY22, the benefits to RMD are significant, and could accrue over many years. As operational pressures continue to ease we see margin/cost dynamics improving, both near- and long-term. We expect a sequentially stronger 2H23, and currently model an EPS CAGR of +11% FY23-26E (with potential upside depending on how competitive dynamics develop).

The post Buy these excellent ASX 200 healthcare shares: Goldman Sachs appeared first on The Motley Fool Australia.

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The Core Lithium Ltd (ASX: CXO) share price was among the top performers of the S&P/ASX 200 Index (ASX: XJO) today.

The small-cap ASX lithium share closed the session up 3.09% to a neat $1 on Thursday.

This was despite the lithium miner reporting an almost tripled loss in its 1H FY23 report released today.

Then again, it’s unsurprising for a junior miner to report increased losses when it’s been ramping up investment and operations to commence production at scale.

And 1H FY23 was a milestone period for the company in this regard. Core Lithium has now transitioned from a mine explorer and developer to a mine operator and producer with its first sale during the period.

This makes Core Lithium one of the few ASX lithium companies actually producing lithium. Game-changer.

Let’s check out the half-year numbers.

Core Lithium share price up despite $9.2 million loss

The miner owns the Finniss Lithium Operation on the Cox Peninsula, 88km south-west of Darwin.

It produced and sold its first batch of lithium at the very end of 1H FY23. So, the income from that sale didn’t make it onto the books for the period.

However, in terms of income, rising interest rates throughout 2022 certainly helped the company out. Its ample cash reserves generated more than $1 million in interest in 1H FY23, up from just $150,000 in 1H FY22.

Here’s the key data:

• Loss of $9.2 million, up from $3.3 million in the prior corresponding period (pcp) of 1H FY22
• Cash and cash equivalents of $125 million, down from $157 million pcp
• Total net assets worth $327 million, up from $239 million pcp
• Earnings per share (EPS) loss of 0.52 cents per share, down from 0.22.

Investors appear unperturbed by the increased operational losses. After the report was released to the ASX at about 2pm today, the Core Lithium share price continued to rise until the market close.

What else happened in 1H FY23?

Among the highlights of the half was mining the first lithium ore from Grants Pit. The company also commissioned its dense media separation plant (DMS) to produce its first spodumene concentrate.

This facilitated Core Lithium’s first sale — a one-off direct shipping ore (DSO) to China. The shipment was trucked to Darwin Port in December 2022 and set sail for China in January this year.

Other highlights of 1H FY23 included:

• Upgrading the mineral resource estimate (MRE) for Finniss by 28% and the ore reserve estimate (ORE) by 43%. This extended the life of mine estimate to a minimum of 12 years
• Completed a $100 million capital raise to fund an extensive drilling campaign in 2023, pursue growth opportunities, and provide additional working capital
• Appointment of CEO Gareth Manderson and COO Mike Stone (CFO Doug Warden has also been appointed in 2023).

What did management say?

In the report, Core Lithium said:

The Company continues to receive strong inbound interest in lithium spodumene concentrate from Finniss and is well-positioned to capitalise on high demand for available battery grade lithium concentrate to complement existing binding offtake arrangements with Ganfeng Lithium and Yahua.

What’s next?

Core Lithium had $125 million in liquid capital at the end of the period, and now that it’s producing lithium, it can start generating revenue. So, the future looks pretty bright for this ASX lithium share.

On Monday, the company reported a more than doubling of the Finniss Lithium Project MRC following further drilling activities. This pushed the Core Lithium share price up by 11%.

The company said further significant growth opportunities exist beyond the currently modelled resource domains at Carlton, Ah Hoy, Hang Gong, and Sandras. Core Lithium will continue exploring this year and will update the global mineral resource and ore reserve estimate for Finniss shortly.

Brokers are divided on Core Lithium stock.

Macquarie retains an outperform rating with an improved 12-month price target of $1.50 following the MRC update.

This implies a potential 50% upside for investors who buy Core Lithium shares at today’s price.

Goldman Sachs is less enthusiastic, with a sell rating and a price target of 90 cents.

Core Lithium share price snapshot

Core Lithium has been one of the favourite ASX lithium shares among investors in recent years.

The stock started a pretty sustained run in early 2021, rising from about 14 cents to $1.50 by April 2022.

As is often the case with young and exciting ASX mineral explorer shares, investors bid up the price based on promise and expected future earnings. Arguably, it ran too hard, and in mid-2022, a correction began.

Enormous fluctuations in the Core Lithium share price have followed.

Over the past 12 months, the Core Lithium share price is up 3.3%.

Over the past six months, it’s down 37%.

In the year to date, it’s virtually steady — down by just 0.3%.

The post Core Lithium share price spikes despite almost tripled losses in 1H FY23 appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy today
• Broker gives its verdict on the Core Lithium share price
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• Why is the Core Lithium share price soaring 11% today?

Motley Fool contributor Bronwyn Allen has positions in Core Lithium and Macquarie Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. 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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Coles Group Ltd (ASX: COL) stock could deliver attractive total returns through a combination of share price growth and dividends.

The supermarket business has done very well since the start of COVID-19, but with pandemic effects now disappearing, the company is still managing to achieve good financial growth.

Experts think that the good times could continue for Coles shares.

Margins are rising amid inflation

It would be understandable that inflation would lead to higher revenue and profit for the business.

If Coles made a 5% profit margin, then it’d make a $5 profit on $100 of sales. If the same basket of products were sold for $105, then a profit margin of 5% would result in a $5.25 profit.

But, Coles’ continuing operations sales grew 3.9% to $20.8 billion and the earnings before interest and tax (EBIT) grew 9.9% to $1.06 billion. Earnings per share (EPS) grew 11.6% to 46.3 cents. Clearly, margins have increased during this period.

The ABC reported on comments from Coles’ government and industry relations manager, Vittoria Bon, about the increased profit margins when talking to the Senate Committee who commented that the supermarket had cut produces on some products:

That’s why we’ve got the campaigns that we have, [such as] Dropped and Locked.

We’ve got 5,000 products at any point in time that represent value for our customers because they’re on special…and we have a whole range of products that customers can buy that are less than $1, for example canned tuna, canned vegetables.

We’re very conscious of the cost of living pressures faced by our customers, and that’s why we’re responding with those sorts of value campaigns.

The ABC also reported that Coles denied it was “profiteering from inflation”, saying that it was because of a fall in COVID costs.

However, Coles did report that its gross profit margin improved by 43 basis points (0.43%) to 26.5% over the period. The EBIT margin increased by 28 basis points to 5.3%.

The Betashares chief economist David Bassanese said:

We need to eat, and that doesn’t change all that much, and so we’re not that price sensitive.

We hate paying more for Vegemite and peanut butter, but ultimately we’re still going to buy it even at higher prices.

So what we’ve seen is businesses in those cases have been able to pass on the cost increase to prices, and sales in the main have been maintained.

Expert views on Coles stock and the dividend

As noted by my colleague James Mickleboro, Citi thinks Coles stock is a buy, with a price target of $20.20. That suggests that the Coles share price could rise by more than 10%.

The broker suggests that the FY23 first-half EBIT was better than expected and there is “upside” to the FY23 estimated consensus for EBIT.

Citi expects Coles to pay an annual dividend per share of 69 cents in FY23, which is a grossed-up dividend yield of 5.5%. The FY24 dividend per share could be 71 cents, which would be a grossed-up dividend yield of 5.7%.

The post Coles stock can deliver golden combo of share price growth plus dividends: Citi appeared first on The Motley Fool Australia.

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Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 positions in and has recommended Coles Group. 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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2022 and 2023 have seen a strange shift in the investing world. For the decade before 2022, interest rates were at historically low levels. They were essentially zero over 2020 and 2021. That meant that investors could not get any kind of decent return on cash investments. Savings accounts, term deposits and the like offered next to no return. That meant ASX 300 dividend shares were one of the only real options if investors wished to receive a decent yield on their cash.

Well, that world has gone. Just this week, the Reserve Bank of Australia (RBA) raised interest rates for the tenth time in a row. The cash rate has gone from 0.1% at the end of 2021 to the 3.6% we see today – one of the sharpest rises in history.

As a consequence, many savings accounts and term deposits are now offering interest rates of up to 5% (and some even higher) today.

But that doesn’t mean we can’t get even better yields from some ASX 300 dividend dynamos.

So let’s check out three that are offering yields that can smash cash right now.

Smash cash with these ASX 300 dividend shares

First up is Accent Group Ltd (ASX: AX1). This ASX 300 retail share operates well-known footwear outlets such as Platypus Shoes and The Athlete’s Foot. Over the past 12 months, Accent shares have paid out a total of 16 cents per share in dividend payments – the highest 12-month total in its history.

Despite the Accent share price rising by almost 43% over the past year, the shares still offer a trailing dividend yield of 6.67% today. That grosses up to a whopping 9.53% with Accent’s full franking credits.

Another ASX 300 share offering a supersized dividend yield is Adairs Ltd (ASX: ADH). Unlike Accent, the Adairs share price has been suffering over the past 12 months, currently down by just over 17%. But despite this, this company paid out a historically high 18 cents per share in dividends over 2022.

That gives Adairs shares a dividend yield of 7.5% today. Again, Adairs’ dividends usually come fully franked, so this grosses up to a pleasing 10.71%.

An 11.3% yield from Harvey Norman?

Finally, let’s check out Harvey Norman Group Holdings Limited (ASX: HVN). Harvey Norman is a company needing little introduction, thanks to its prominent presence on the Australian retail scene for over four decades.

This is another ASX 300 share that has had a rough time over the past year, with Harvey Norman losing almost 29% of its value since March 2022. But that isn’t obvious when you look at this company’s dividend. 2022 saw Harvey Norman dole out its largest shareholder payments ever, with investors showered with a total of 37.5 cents per share, fully franked.

This gives Harvey Norman a dividend yield of 7.92% today, which grosses up to a massive 11.31% with that full franking.

So as you can see, there are plenty of ASX 300 shares out there that have the potential to still give investors massive yields on their capital today.

The post These 3 ASX 300 shares are dividend dynamos! appeared first on The Motley Fool Australia.

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• Gerry Harvey just bought $8 million worth of Harvey Norman shares. Should you buy?
• I’d aim for $1 million, thanks to just a few ASX shares
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• Give yourself a passive income boost with these ASX dividend shares: experts
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Motley Fool contributor Sebastian Bowen has positions in Adairs. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Adairs and Harvey Norman. The Motley Fool Australia has positions in and has recommended Adairs and Harvey Norman. The Motley Fool Australia has recommended Accent Group. 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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