Day: 4 May 2023

The good news for income investors is that there are a large number of ASX 200 stocks that share a good portion of their profits with shareholders. This makes the share market a great place to generate passive income.

But which ASX 200 shares would be good options right now for a passive income boost? Two that have recently been rated as buys are named below:

BHP Group Ltd (ASX: BHP)

If you’re not averse to investing in the mining sector, then BHP could be a top option for income investors. That’s because this mining giant has been tipped to provide investors with some very big dividend yields in the near future.

For example, a note out of Goldman Sachs from this morning reveals that its analysts are forecasting fully franked dividend yields of 7% in FY 2023 and 5.6% in FY 2024. This means that $10,000 invested could provide passive income of $700 and $560, respectively.

Another positive is that the broker also sees scope for the BHP share price to rise from current levels. It currently has a buy rating and $49.90 price target on its shares. This implies potential upside of 13.5% over the next 12 months.

Centuria Industrial Reit (ASX: CIP)

Another ASX 200 dividend share that could provide investors with a source of passive income is Centuria Industrial.

It is an industrial-focused property company that owns a portfolio of 88 high-quality, fit-for-purpose industrial assets worth a total of $3.9 billion. These assets are in-demand with users thanks partly to being situated in key in-fill locations and close to key infrastructure.

UBS is very positive on the company and is expecting it to pay dividends per share of 16 cents in both FY 2023 and FY 2024. Based on the current Centuria Industrial share price of $3.13, this represents yields of 5.1% in both financial years. This means that $10,000 invested in its shares could yield $510 of passive income each year.

The broker also sees decent upside for its shares with its buy rating and $3.68 price target.

The post Analysts name 2 ASX 200 dividend shares to buy for passive income appeared first on The Motley Fool Australia.

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More reading

• 4 ASX 200 shares just upgraded by brokers
• Why the iron ore price is ‘not out of the danger zone’
• Why Goldman Sachs just slapped a buy rating on BHP shares
• Investing for passive income? Here’s your dividend yield if you bought BHP shares in July
• Bye bye OZ Minerals shares

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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a modest decline. At the time of writing, the benchmark index is down slightly to 7,191.2 points.

Four ASX shares that are not letting that hold them back are listed below. Here’s why these shares are rising:

CogState Limited (ASX: CGS)

The CogState share price is up 13% to $1.72. Investors have been scrambling to buy this neuroscience technology company’s shares after Eli Lilly and Company announced positive results from a Phase 3 study in Alzheimer’s disease. Its investigational treatment, donanemab, significantly slowed cognitive and functional decline in people with early symptomatic Alzheimer’s disease. This bodes well for demand for CogState’s services.

Jumbo Interactive Ltd (ASX: JIN)

The Jumbo share price is up 5.5% to $14.33. This morning, Goldman Sachs responded positively to this lottery ticket seller’s trading update by reiterating its buy rating with an improved price target of $16.10. Goldman was pleased with Jumbo’s proposed pricing changes, which the broker expects to have a positive impact on its earnings outlook.

Magellan Financial Group Ltd (ASX: MFG)

The Magellan share price is up 3.5% to $8.32. This is despite the struggling fund manager releasing another bleak funds under management (FUM) update this morning. Magellan advised that it experienced net outflows of $2.4 billion during April. Though, thanks to favourable market movements, its FUM only declined by $500 million month on month.

St Barbara Ltd (ASX: SBM)

The St Barbara share price is up 10% to 70.25 cents. This follows a rise in the gold price, which is lifting the whole industry today. In addition, the gold miner has put its shares in a trading halt this afternoon. This appears to be related to news involving gold developer Genesis Minerals Ltd (ASX: GMD), which has also been paused from trade.

The post Why CogState, Jumbo, Magellan, and St Barbara shares are rising today appeared first on The Motley Fool Australia.

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More reading

• Why Genesis Minerals, NAB, oOh!Media, and Super Retail shares are sinking today
• Why Flight Centre, Jumbo, Pilbara Minerals, and Ramelius shares are charging higher
• 5 things to watch on the ASX 200 on Friday
• 3 ASX 300 mining shares climbing following quarterly updates
• 12 ASX dividend shares with yields over 10%. Are they too good to be true?

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 Cogstate and Jumbo Interactive. The Motley Fool Australia has positions in and has recommended Cogstate. The Motley Fool Australia has recommended Jumbo Interactive. 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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S&P/ASX 200 Index (ASX: XJO) shares are recovering from this morning’s 55-point dip shortly after the open.

But they remain in the red at the time of writing.

ASX 200 shares are currently sitting at 7,183.2 points, down 0.2%.

As reported in The Australian today, brokers have upgraded the following four ASX 200 shares.

Let’s take a look.

BHP Group Ltd (ASX: BHP)

The BHP share price is currently $43.96, up 1.6% for the day so far.

Goldman Sachs has increased its rating on the ASX 200 mining share to buy with a price target of $49.90. This implies a potential upside of 13.5% over the next 12 months.

The broker has now incorporated the value of BHP’s acquisition of Oz Minerals into its pricing. It thinks there is good value in these blue-chip ASX 200 shares right now.

Goldman says:

… we upgrade BHP to Buy (from Neutral) based on attractive valuation after the recent ~15% drop in the stock price since January.

The slide in share price is due to the recent drop in iron ore and copper prices on the back lower than expected Chinese steel demand and developed market copper demand in 1Q.

BHP shares are down 3% in the year to date.

Flight Centre Travel Group Ltd (ASX: FLT)

The Flight Centre share price is currently $20.89, up 0.4% for the day so far.

Morgans has raised the ASX 200 travel share to add; however, Jefferies has gone the other way.

Jeffries cut its rating to underperform with a 12-month share price target of $18.

The ASX 200 travel share added 2% yesterday after the company updated its guidance.

Flight Centre is now targeting between $270 million and $290 million of underlying earnings before interest, tax, depreciation, and amortisation (EBITDA).

Flight Centre also reported a record-breaking month for March.

Total transaction value (TTV) on its leisure and corporate legs surpassed $1 billion for the first time ever.

Flight Centre shares are up 45% over the year to date.

Amcor CDI (ASX: AMC)

The Amcor share price is currently $15, up 0.6% for the day so far.

JPMorgan has raised its rating on the ASX 200 packaging company to overweight with a share price target of $16.30.

Competing broker Jefferies has also raised its rating to hold with a price target of $14.

Amcor released its Q3 FY23 update yesterday, revealing a 34% decline in quarterly net income to US$177 million. This led to management downgrading its full-year earnings guidance.

Amcor now expects to deliver earnings per share (EPS) of between 72 US cents to 74 US cents. The previous guidance was 77 US cents to 81 US cents.

Amcor announced an unfranked dividend of 12.25 US cents to be paid on 20 June.

As we reported, the Amcor share price dropped to a 52-week low of $14.68 yesterday.

The ASX 200 share has taken a 14% hit over the year to date.

Ramsay Health Care Ltd (ASX: RHC)

The Ramsay share price is currently $60.06, down 2.9% for the day so far.

CSLA has raised its rating on the ASX 200 healthcare share to accumulate with a $67 price target.

Meantime, Wilsons has cut its rating to market weight with a price target of $65.88.

Investors weren’t too impressed with Ramsay’s Q3 FY23 business update yesterday.

Ramsay reported a 6.6% bump in its financial year-to-date EBITDA.

This sent the Ramsay share price down 5%.

Ramsay told the market today that it’s launching two medium-term note programs.

The ASX 200’s shares are down 6.7% over the year to date.

The post 4 ASX 200 shares just upgraded by brokers appeared first on The Motley Fool Australia.

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More reading

• How did the Flight Centre share price manage to flog the ASX 200 in April?
• Why the iron ore price is ‘not out of the danger zone’
• Why are these ASX shares at 52-week lows?
• Why Goldman Sachs just slapped a buy rating on BHP shares
• Here are the top 10 ASX 200 shares today

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Bronwyn Allen has positions in BHP Group and Flight Centre Travel Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group, JPMorgan Chase, and Jefferies Financial Group. The Motley Fool Australia has positions in and has recommended Amcor Plc. The Motley Fool Australia has recommended Flight Centre Travel 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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There is an ASX All Ords share flying under-the-radar that one portfolio manager is getting very excited about right now.

That share is the little known IPD Group Ltd (ASX: IPG), which currently has a market capitalisation of approximately $320 million.

IPD is a national distributor and service provider to the Australian electrical market. Think of it as the Dicker Data Ltd (ASX: DDR) of electrical infrastructure products.

Its core focus in the products division is the sale of electrical infrastructure products to customers including switchboard manufacturers, electrical wholesalers, electrical contractors, power utilities, OEMs and system integrators.

The company also provides a range of value-added services. This includes custom assembly, sourcing, engineering design, technical compliance, procurement, transport, storage, regulatory management, technical support, packaging, labelling, inventory management and delivery.

Who is bullish on this ASX All Ords share?

The portfolio manager that has been raving about this ASX All Ords share is Josh Clark from QVG Capital’s long-short fund.

While Clark may be going short on some stocks, he is well and truly going long on this one.

According to the AFR, the portfolio manager believes IPD is well-placed to grow strongly for a long period of time. He explains:

IPD is a distributor to the electrical industry providing products not unlike the circuit breakers in your home but on an industrial scale. Think hospitals, data centres, engineering applications, utilities etc. We like it because they have the ingredients to dramatically increase their market share over the next decade.

They compete against a large, foreign-owned incumbent and a small handful of independents, all of whom are in maintenance mode. We’ve seen this movie before with companies like Dicker Data, which have been more agile and customer-focused than their foreign competition, allowing them to grow at high rates for long periods of time.

All in all, this could make IPD an ASX All Ords share to keep a very close eye on.

The post The under-the-radar ASX All Ords share that could ‘grow at high rates for long periods of time’ appeared first on The Motley Fool Australia.

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More reading

• ‘Rerating likely’: 2 ASX shares to buy before they take off
• ’20-fold increase’: 3 ASX shares that’ll rocket sooner or later

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 Dicker Data and Ipd Group. The Motley Fool Australia has positions in and has recommended Dicker Data. The Motley Fool Australia has recommended Ipd 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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The Flight Centre Travel Group Ltd (ASX: FLT) share price gained 6.4% in April.

Shares in the S&P/ASX 200 Index (ASX: XJO) travel stock closed on 31 March trading for $18.48. At the closing bell on 28 April shares were swapping hands for $19.67 apiece.

That 6.4% boost in the Flight Centre share price is more than three and a half times the 1.8% gain posted by the ASX 200 in April.

So, what went right for the ASX 200 travel share last month?

Why did the ASX 200 travel share outperform in April?

The strong outperformance of the Flight Centre share price in April will come as good news for shareholders. But certainly not so good for the sizeable number of short sellers who’ve been betting against the travel stock.

In the first week of April, Flight Centre was the most shorted stock on the ASX, with a whopping short interest of 11.7%. That short interest rose to 11.9% the next week.

Which is right about when the Flight Centre share price began to lift off. Shares gained 6.6% from the closing bell on 12 April through to the end of the month.

With no price-sensitive news released by the company in April, we can only speculate on what spurred investors to hit the buy button.

Some positives for FLT are the potential for further increases in international travellers. International travel numbers are ramping up but remain below pre-pandemic levels.

However, Flight Centre expects international capacity will reach 85% of those levels in June.

The company could also be finding support from its strong balance sheet, with a $465 million net cash position as at 31 December.

And many ASX 200 investors may be eyeing the bigger picture.

Despite some sizeable gains in 2023, Flight Centre shares remain down 48% from early January 2020. That was less than two months before COVID knocked the stuffing out of most shares, with travel stocks especially hard hit.

Flight Centre share price snapshot

The Flight Centre share price has gained an impressive 45% since the opening bell on 3 January. Though that’s not quite enough to make up for the heavy losses in the latter half of 2022.

Over the past 12 months, the ASX 200 travel share remains down 1.5%.

The post How did the Flight Centre share price manage to flog the ASX 200 in April? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Why Flight Centre, Jumbo, Pilbara Minerals, and Ramelius shares are charging higher
• Flight Centre share price lifts following record, $1 billion month
• Top broker upgrades Flight Centre share price
• Here are the 10 most shorted ASX shares

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 recommended Flight Centre Travel 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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The iron ore price has dropped from above US$120 a few weeks ago to less than US$110. The price an ASX iron ore share gets for its production can have a key impact on profitability, which is why there has been pressure on the BHP Group Ltd (ASX: BHP) share price, Rio Tinto Ltd (ASX: RIO) share price and the Fortescue Metals Group Ltd (ASX: FMG) share price.

Over the past month, the Fortescue share price is down 7%, the BHP share price is down 4% and the Rio Tinto share price is down 5.6%.

The investment bank Morgan Stanley thinks that the iron ore price could fall even further, according to reporting by The Australian.

Oversupply?

Morgan Stanley is suggesting that there is going to be an oversupply of iron in the coming months.

That’s because China’s steel production is “catching up with the reality of sluggish underlying demand”, according to Morgan Stanley’s commodity analysts. We have seen reports of China’s economy not rebounding strongly after COVID-19 lockdowns ended in the country.

One of the issues for iron is that China’s peak steel output ‘season’ ended about a month earlier than it did during the last two years.

Morgan Stanley reportedly noted that “relatively stable” iron ore port inventories imply that the market isn’t significantly oversupplied as of yet, but this could be about to change and hurt the iron ore price.

The suggestion by the investment bank is that more steel production cuts are needed on top of what has already occurred in China, while the iron ore supply is ramping up, which could lead to a surplus.

The Australian reported on analyst comments regarding the danger zone:

At $US106/t, the iron ore price remains above cost support and is not out of the danger zone yet. Last year, the price kept trending lower from April to October, a dynamic we could well see this year again.

What could this mean for iron ore miners?

BHP, Rio Tinto and Fortescue are three of the iron ore miners with the lowest production costs globally, so even at US$100 per tonne or US$90 per tonne, they can make decent money.

But, if the iron ore price falls it would likely mean that those three ASX mining shares would make less profit because they would get less revenue for the same amount of production.

However, if the iron ore price does fall it could make some other high-cost iron ore miners decide to lower their production, which would help the global supply and demand relationship, and hopefully boost the iron ore price.

I think the iron ore price has proven to be very cyclical over the past five years. If it does keep falling, I believe that could end up being a medium-term buying opportunity for investors because of the cyclical nature of iron ore demand. However, there’s no certainty at all that the iron ore price will recover back to its former heights this year.

The post Why the iron ore price is ‘not out of the danger zone’ appeared first on The Motley Fool Australia.

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More reading

• Here’s what brokers are saying about the Fortescue share price in May
• Top ASX passive income shares to buy in May 2023
• Why Goldman Sachs just slapped a buy rating on BHP shares
• Investing for passive income? Here’s your dividend yield if you bought BHP shares in July
• Bye bye OZ Minerals shares

Motley Fool contributor Tristan Harrison has positions in Fortescue Metals Group. 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 National Australia Bank Ltd (ASX: NAB) share price is having a day to forget on Thursday.

The banking giant’s shares were down as much as 8% after posting a half-year result that fell short of expectations for a number of metrics such as earnings and its dividend.

As a reminder, NAB reported a 17% increase in cash earnings to $4,070 million for the six months ended 31 March. While this is certainly strong growth, it was still short of consensus estimates. For example, the market was expecting cash earnings of $4,151 million and Goldman Sachs was forecasting even higher cash profits at $4,227 million.

These softer earnings unfortunately meant that the NAB dividend also fell short of expectations.

The NAB dividend

For the first half of FY 2023, NAB declared a fully franked interim dividend of 83 cents per share.

Once again, while this was up strongly (13.7%) from the prior corresponding period, it was a touch short of expectations. Goldman was forecasting the NAB interim dividend to come in at 84 cents per share for the half.

Though, it is worth noting that with the NAB share price currently trading at $26.92, the bank’s interim dividend still offers a juicy yield of approximately 3.1%.

Want to receive this payout?

If you want to receive the NAB dividend, you will need to ensure that you own the bank’s shares when they trade ex-dividend next week on 10 May.

You will then be able to look forward to receiving the cash payout in two months on 5 July. Unless of course you opt to take part in the bank’s dividend reinvestment plan. The company explains:

The dividend is paid in cash or as part of a dividend plan. Cash dividends are paid by way of direct credit or cash equivalents. The dividend plans in operation are the Dividend Reinvestment Plan and the Bonus Share Plan (closed to new participants). The last date for receipt of election notices for the Dividend Reinvestment Plan and the Bonus Share Plan is 12 May 2023 at 5pm (Australian Eastern Standard time).

The post Everything you need to know about the NAB dividend appeared first on The Motley Fool Australia.

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More reading

• NAB shares dive 8% as EPS downgrades expected
• NAB share price on watch after half-year earnings fall short of expectations
• 4 reasons to buy ASX 200 banks stocks right now
• 3 ASX 200 bank shares to go ‘long and bullish’ on right now
• 5 things to watch on the ASX 200 on Thursday

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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On my hunt for serial compounders, Resmed CDI (ASX: RMD) shares have made their way onto my watchlist. The company’s share price has flown 16.4% higher since the beginning of the year, but that’s not why the respiratory medical device maker is on my radar.

The real eye-catching aspect of Resmed is its push into a potentially lucrative revenue stream. While there are notable differences, Resmed appears to be executing a play that’s arguably been instrumental in the success of Apple Inc (NASDAQ: AAPL) over the past decade.

So, do I think this growth ingredient is enough to justify the 40 times earnings multiple Resmed shares are fetching?

What is the money-making Apple move?

Most of us know the American tech giant for its sleek and intuitive devices — iPhones, iPads, Macs, etc. These innovative and stylish products have formed the backbone of Apple’s sticky ecosystem as we know it today.

Over time, Apple has embedded itself in the daily lives of its customers, selling products that many of us use day in and day out. In doing so, the company has built up enormous switching costs, which is a type of moat. Financially, it’s hard to justify swapping to a non-iPhone when it means also shelling out for a new smartwatch, wireless headphones, etc.

While the company’s, almost luxury-like, devices generate solid profits, it is the services segment that takes full advantage of the high switching cost.

This segment extracts extremely high-margin revenue from the Apple customer base by monetising the limited number of alternatives (of which there are none at times) to iCloud, the App Store, and Apple Pay among others.

The chart above illustrates how the services segment delivers an outsized boost to gross profits compared to its share of revenue. Simply put, the near-zero cost of providing services — which are mostly just a bit of software — makes this avenue a lucrative one.

Could SaaS revenue make Resmed an ASX 200 outperformer?

Like Apple, Resmed is best known for its physical products. For many, the company’s medical equipment is essential for getting a good night’s sleep — combating sleep apnea and insomnia with their continuous positive airway pressure (CPAP) machines.

However, Resmed has been quietly building another source of revenue… Software as a Service (SaaS). What is noticeably different from Apple is that it appears most of this revenue is derived from clinical-facing software rather than consumer-facing.

At present, ASX-listed Resmed’s solutions encompass Brightree, MatrixCare, Healthcarefirst, CitusHealth, and Medifox Dan. Generally, these solutions are geared towards streamlining processes for healthcare workers.

Nevertheless, the segment has grown rapidly in recent years. Between Q3FY21 and Q3FY23, SaaS revenue increased 45.8% to $136.8 million. Still, this fast-growing division only represents roughly 12% of total revenue.

Where Resmed possibly departs from Apple’s storyline is its relationship between the software/services and its key products.

Personally, I’d be more excited if Resmed leveraged its SaaS expertise to derive higher revenue from its medical device customers. Perhaps that is the endgame of the Resmed team. From my perspective, that would make use of the high switching cost of its products, implementing the Apple strategy.

Until then, Resmed will probably stay on my ASX watchlist.

The post On my ASX watchlist: Is Resmed borrowing Apple’s multi-billion-dollar playbook? appeared first on The Motley Fool Australia.

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More reading

• Leading brokers name 3 ASX shares to buy today
• Why Perenti, Pointsbet, ResMed, and Telix shares are rising today
• 3 things ASX investors should watch this week
• ResMed share price higher on Q3 ‘solid beat’
• Better ASX 200 healthcare share: CSL vs. Resmed

Motley Fool contributor Mitchell Lawler has positions in Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple and ResMed. The Motley Fool Australia has positions in and has recommended ResMed. The Motley Fool Australia has recommended 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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On Tuesday this week, the Reserve Bank of Australia (RBA) raised interest rates yet again. It was the 11th rise in the past 12 months. With rates now well and truly above the near-zero levels we had become used to, cash investments like term deposits are a lot more appealing today than they were a year ago. So let’s check out whether investors in the Vanguard Australian Shares Index ETF (ASX: VAS) might be better off switching to cash. 

The Vanguard Australian Shares ETF is the most popular index fund on the ASX. This exchange-traded fund (ETF) allows investors to gain exposure to the S&P/ASX 300 Index (ASX: XKO). In essence, it is an investment in the largest 300 public companies listed on the Australian share market.

Thus, an investment in the VAS ETF can be thought of as an investment in the ASX itself.

This was a very appealing investment when interest rates were near-zero across 2020 and 2021. You got exposure to the compounding capital growth of shares, as well as the dividends and franking credits that this ETF passes through to its investors. In contrast, a term deposit would get you a 1% yield on your money, if you were lucky.

But today, the tables have turned. A term deposit can get you as much as a 5% annual return on your money right now. And that’s before the latest interest rate rise has filtered through.

And a term deposit comes with none of the volatility that the share market brings. If you lock your money up for 12 months at a 5% interest rate, it’s guaranteed to be there when you come back for it.

In contrast, a sharemarket-based index fund like the Vanguard Australian Shares ETF comes with no guarantees. There’s no guarantee that you’re capital will be safe. And there’s no promise that last year’s dividends will match this year’s.

With all that in mind, does a term deposit make for a better investment than the VAS ETF today?

Should investors just choose a term deposit over Vanguard’s VAS ETF?

Well, it depends. If you’re a retiree, where preservation of capital is more important than anything else, then perhaps a term deposit would suit your goals better. 5% isn’t a bad yield, exceeding what many ASX dividend shares offer. It certainly has the potential to offer some meaningful cash flow.

But for other investors who might have a higher tolerance for risk and share market volatility, the Vanguard Australian Shares ETF might still be a better option for one simple reason: the potential returns.

The Vanguard Australian Shares ETF has a long history of delivering returns that well exceed 5% per annum. As of 31 March, the VAS ETF has returned an average of 8.06% per annum over the past decade, and 8.88% per annum since its inception in 2009. Those returns include dividends.

Now, past performance is no guarantee of future success, of course. But a general rule of investing is that lower risk equates to lower returns. ASX-based ETFs have always outperformed cash investments over long periods of time, as we have discussed here at the Fool on many occasions.

So if I had the choice between putting the majority of my wealth in term deposits or ASX shares, I would choose ASX shares every time. Cash is great for emergencies and for funding living expenses. But not much else.

 

The post Better investment: Vanguard Australian Shares ETF (VAS) or a term deposit? appeared first on The Motley Fool Australia.

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More reading

• My 5-step plan to achieving $500 in monthly passive income
• If you’d invested $5,000 in the Vanguard Australian Shares Index ETF (VAS) after the COVID crash, here’s much you’d have now
• 5 dividend shares I think are among the safest on the ASX
• I think this underrated reason is key to why ETFs can be great investments
• The Vanguard Australian Shares Index ETF dividend is being paid today. Here’s the lowdown

Motley Fool contributor Sebastian Bowen has positions in Vanguard Australian Shares Index ETF. 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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CSL Limited (ASX: CSL) shares have dipped beneath the $300 watermark over the past two days.

The CSL share price is currently $299.51, down 0.03% for the day so far.

The ASX 200 blue chip share has recorded large fluctuations in price over the past 12 months.

Its lowest trading price over the period is $254.30, recorded in June last year.

Its 52-week high is $314.28, recorded in February.

Is it time to buy?

Are CSL shares a buy under $300?

The analysts at Citi certainly think so. They currently have a buy rating on CSL shares and a 12-month price target of $350. That implies a potential 17% upside from here.

Macquarie has an outperform rating on CSL shares with a 12-month price target of $344.

CSL shares once again feature on Morgans’ best ideas list this month.

The broker has given the ASX 200 biotech share an add rating and a $337 share price target.

The broker says CSL is a buy due to its significantly improved outlook and attractive valuation.

Morgans says:

A key portfolio holding and key sector pick, we believe CSL is poised to break-out this year, a COVID exit trade, offering double-digit recovery in earnings growth as plasma collections increase, new products get approved and influenza vaccine uptake increases around ongoing concerns about respiratory viruses, with shares offering good value trading around its long-term forward multiple of ~30x.

Analysts impressed by company’s European tour

CSL shares outperformed the ASX 200 in April, rising 4.3%. The ASX 200 rose by 1.8%.

As my Fool colleague James reported, CSL conducted a European investor site tour at the end of March.

Morgan Stanley responded to the tour by reiterating its overweight rating and $339 price target.

Goldman Sachs was also at the event and said:

… CSL is now well positioned for a medium-term period of less capital-intensive growth (supporting our views that the current ROIC [return on invested capital] trough should markedly improve from here).

What about dividends?

Another Fool writer, Sebastian suggests CSL shares are a ‘sleeping dividend giant‘.

He points out that the annual dividend has risen by a cumulative 96.5% between 2014 and 2022.

The biotech has just paid investors an interim dividend of US$1.07 per share. That’s up from US$1.04 per share in 2022.

If the company continues increasing its dividends at the same pace as the 2014 to 2022 period, shareholders stand to receive US$4.36 per share by the year 2030.

That’s $6.52 per share in Australian dollars at today’s exchange rate.

The post Should I buy up CSL shares right now while they’re under $300? appeared first on The Motley Fool Australia.

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More reading

• The US Fed just lifted rates again. Here’s how the ASX 200 is responding today
• Morgans names the best ASX 200 stocks to buy in May
• 4 reasons to buy ASX 200 banks stocks right now
• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX 200 shares today

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Bronwyn Allen has positions in CSL and Macquarie Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL and 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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