Day: 9 May 2023

If it’s passive income you’re after, you may wish to run your slide rule across New Hope Corp Ltd (ASX: NHC).

Fuelled by record high prices for thermal coal in 2022, the S&P/ASX 200 Index (ASX: XJO) coal share saw its half-year profits to 31 January more than double from the corresponding six-month period.

In a pleasing development for income investors, New Hope’s board divvied out some of the miner’s booming fortunes with shareholders. The past 12 months have seen the company declare an all-time high interim and an all-time high final dividend, both fully franked.

New Hope paid a 56 cents per share final dividend on 8 November. The miner will pay a 40 cents per share interim dividend this Wednesday, 3 May. The coal stock traded ex-dividend on 17 April.

Atop this welcome passive income, New Hope shares have also delivered some outsized capital gains.

After closing up 3.3% yesterday to $5.23 per share, the New Hope share price is up 44% over the past year.

Of course, some ASX 200 investors are making out better than others.

Please do note that future dividends paid by New Hope could be higher or lower depending on numerous company-specific and broader macroeconomic factors.

Drilling into New Hope shares for passive income

All up, New Hope delivered a total dividend payout of 96 cents per share over the last 12 months. (Or will have done so on Wednesday, when the final dividend lands in shareholders’ bank accounts.)

At yesterday’s closing price of $5.20 per share, that works out to a fully franked trailing yield of 18.4%.

That equates to $184 in annual passive income from a $1,000 investment.

That’s certainly praiseworthy.

But investors who – through sheer luck or perhaps good investment advice – bought shares near the lows last June will be earning a good bit more passive income than that.

On 20 June last year, the New Hope share price closed at $3.21. If you’d bought $1,000 worth of shares near market close on the day, you’d be earning a yield of 30.0%.

Or a whopping $300 a year in passive income from that $1,000 investment. Not to mention the 63% share price gain.

The post Looking for passive income? Here’s the yield you’re earning if you bought New Hope shares in June appeared first on The Motley Fool Australia.

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More reading

• Why Alumina, New Hope, Virgin Money, and Vulcan Energy shares are falling
• Directors are still buying the dip in New Hope shares. Should you?
• How I’d invest $1,000 in May to make easy passive income
• ASX 200 dividend stocks: Here’s a diamond in the rough yielding 18%!
• 12 ASX dividend shares with yields over 10%. Are they too good to be true?

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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The ASX healthcare share sector can be a fruitful place to find companies that are both defensive but also can grow for a very long time.

I think the industry has a compelling future with Australia’s ageing demographic and the ongoing growth of the overall population.

With that underlying support for demand, I think the businesses that I’m going to write about have very promising futures through the 2020s.

Healthia Ltd (ASX: HLA)

Healthia is looking to become a large player in the allied healthcare space.

It has a few different divisions, including ‘bodies and minds’, ‘feet and ankles’ and ‘eyes and ears’. That includes services such as physiotherapy, hand therapy, occupational therapy and speech pathology; podiatry clinics and retail footwear stores; optometry and audiology stores, as well as eye frame distributor AED.

The company is looking to grow its organic revenue by between 3% to 6% per annum, which can drive its earnings higher. In the FY23 first half, organic revenue increased by 5.4%.

Healthia is also growing through acquisitions, which is increasing its market share and scale. In HY23, for example, it bought 10 physiotherapy clinics and two hand therapy clinics.

HY23 saw ‘underlying’ revenue grow by 34.3% to $125 million, underlying earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 48.2% to $18 million, and underlying net profit after tax (NPAT) went up 48.3%.

Ongoing revenue growth, combined with increasing profit margins, is very positive for the long term, in my opinion. The business has a market share of less than 3%, so there are plenty of future acquisition opportunities.

Commsec forecasts put the current Healthia share price at 9x FY23’s estimated earnings.

NIB Holdings Limited (ASX: NHF)

NIB is an increasingly diversified private health insurance business.

It’s best known for providing health insurance to Australian residents and visitors. But it’s also involved in other areas, including health insurance in New Zealand and travel insurance. Plus, there’s a division called NIB Thrive which is involved with NDIS plan management and support coordination.

The ASX healthcare share continues to see policyholder growth in Australia, which is helping drive revenue and earnings. People reportedly value health insurance more following the pandemic. NIB has outgrown the wider industry every year over the last 20 years, and it’s expecting to keep outperforming the industry, according to the company.

The company is looking to expand its “value proposition and differentiate NIB in existing private health insurance markets by making membership as much about supporting good health as it is the treatment of sickness and injury”.

The company plans to become a larger player with both its travel insurance and pursue NDIS opportunities. It has around 22,000 NDIS participants today, but it says it’s on track to manage plans for around 50,000 participants by FY25.

The ASX healthcare share is expecting stronger travel earnings thanks to increasing levels of availability of travel options.

Plus, international student volumes are strongly rebounding, while international workers are returning in numbers as well, according to NIB. This can help its international inbound health insurance earnings.

Commsec numbers put the current NIB share price at 20x FY23’s estimated earnings.

The post 2 ASX healthcare shares I’m backing for strong growth this decade appeared first on The Motley Fool Australia.

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More reading

• Perfect balance: 2 ASX 200 shares set to surge while paying dividends
• ‘Resilient earnings’: Buy 3 ASX 200 shares to win through troubled times

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 positions in and has recommended Healthia. The Motley Fool Australia has recommended Healthia and NIB Holdings. 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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While inflation in Australia might have headed down in the March quarter, it is still flying uncomfortably high at 7%.

We’ve all witnessed first-hand over the past year that excessive inflation triggers interest rate rises, and therefore economic slowdowns and a depreciation in ASX share prices.

Many frightened punters have pulled out of the share market in recent times for that reason.

However, Fairmont Equities dealers’ assistant Lauren Hua reminds investors that holding cash is a far worse option during high inflation.

“Cash would not be the optimal asset class to hold in a high inflationary environment as inflation is rising faster than the interest that you earn on your cash,” Hua said on the Fairmont blog.

“Stocks would be a much better choice.”

She added that many companies would see their revenue and earnings grow at or above inflation.

“Some companies are able to pass rising costs to the consumer to maintain their profit margin.”

Things people just can’t live without

So which ASX shares are the best ones to have in the portfolio while inflation is raging like a bushfire?

Hua suggested four sectors that investors should take a look at.

First is healthcare.

“Defensive stock such as healthcare are considered safer investments as people will always need healthcare, even when consumer budgets are tight.”

High inflation prompts investors to pull their money out of higher risk industries to move into sectors they know will have resilient demand.

“Just like groceries in a supermarket, people will always need medicine and medical treatment,” said Hua.

“Consumers will place priority in spending on healthcare as opposed to less crucial goods and services.”

Along the same lines, ASX shares representing utility companies could also be a prudent shelter.

“Demand in utility companies will still be strong even in high inflation periods.”

According to Hua, utility providers have the awesome advantage of charging pretty much whatever they like.

“When operating costs rise for energy companies, they will pass these higher costs onto consumers and maintain their profit margin,” she said.

“Consumers will have no choice but to pay this inflated cost if they want to continue to receive utilities.”

‘People will still buy bread and milk’

Hua suggested that ASX shares in the consumer staples sector are not a bad batch to consider when the consumer price index is lofty.

Again, those companies are producing goods that Australians can’t live without.

“When there is high inflation, companies will pass these costs onto the consumers,” she said.

“People will still buy bread and milk, even if the costs increase. Companies in consumer staples know that even if they increase the price of a good, consumers will still need to buy it.”

The other side of the coin is that investors should avoid ASX businesses that produce discretionary goods.

“Consumers will stay away from non-essential goods and services such as a new TV or a new car. They will only spend what is necessary if their budget is stretched.”

Finally, Hua reckons the energy sector is ripe for picking during times like these.

That’s because there is a correlation between the oil price and inflation.

“Energy costs in households would be included in the consumer price index,” she said.

“As the oil prices increases, this directly affects the energy costs spent by consumers. This would lead to an increase in the CPI index and then inflation.”

The post The ASX shares to buy in high inflation times appeared first on The Motley Fool Australia.

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More reading

• What are brokers saying about the CSL share price in May?
• I’d invest $10,000 into these excellent ASX shares for the long-term
• The Westpac share price could offer a 20% return: Goldman Sachs
• 5 things to watch on the ASX 200 on Tuesday
• Citi rates these ASX dividend shares as buys

Motley Fool contributor Tony Yoo 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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The CSL Limited (ASX: CSL) share price is having a decent year so far.

Since the start of 2023, the biotherapeutics giant’s shares have risen almost 5% to close at $301.27 on Monday.

This compares favourably to the ASX 200 index and its 3.4% gain.

The big question now, though, is can the CSL share price keep rising?

In order to answer this question, let’s take a look at what brokers are saying about the company’s shares.

Can the CSL share price keep rising?

Well, I have good news for you. All the major brokers believe the CSL share price has room to climb from current levels.

Here’s a summary in alphabetical order:

The team at Citi currently has a buy rating and $350 price target on the company’s shares. This implies potential upside of over 16% for investors over the next 12 months. Incidentally, this is the highest price target that I have seen.

Goldman Sachs is sitting on the fence at the moment with its neutral rating and $314.00 price target. This suggests the CSL share price could rise a little over 4% from here. Not great, but a gain is a gain.

Moving on, Macquarie is a fan and currently has an outperform rating and $344.00 price target on its shares. If it reached this level, it would mean a gain of just over 14%.

Analysts at Morgan Stanley are also positive on CSL. They currently have an overweight rating and $339.00 price target, which implies potential upside of 12.5% for investors.

Finally, Morgans is another broker that is bullish on the company. It currently has an add rating and $337.92 price target on its shares. This would mean a 12% gain if the CSL share price climbed to this level.

All in all, it seems that now is a good time to be a shareholder of this biotherapeutics leader if brokers are on the money with their recommendations.

The post What are brokers saying about the CSL share price in May? appeared first on The Motley Fool Australia.

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More reading

• Should I buy up CSL shares right now while they’re under $300?
• Morgans names the best ASX 200 stocks to buy in May
• Can the CSL share price crack a new, all-time high in 2023?
• These ASX 200 shares could be top options for your retirement portfolio: experts
• ‘Under the radar success’: 3 quality ASX 200 growth shares to buy right now

Motley Fool contributor James Mickleboro has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. 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 ASX share market is a great place to invest in businesses that can grow, in my opinion.

If someone handed me $100,000 to invest for the long term, I know that I’d want to put at least $10,000 of it into two options that could deliver strong growth well into the future.

We can’t know for certain which share prices are going to go up. But, companies that can grow revenue and/or profit at a solid rate have a good chance of achieving good performance or even outperformance.

I’d be happy to invest $10,000 in these two ASX shares because I believe they will outperform the S&P/ASX 200 Index (ASX: XJO).

BetaShares Global Sustainability Leaders ETF (ASX: ETHI)

This is a diversified exchange-traded fund (ETF) that enables investors to invest in a portfolio of businesses that are trying to do the right thing when it comes to environmental, social, and corporate governance (ESG) factors.

The 200 companies in the portfolio come from the global share market, have been identified as ‘climate leaders’ and exclude a number of ‘unethical’ sectors such as fossil fuels, tobacco, gambling, weapons and so on.

According to BetaShares, a dollar invested in this portfolio has 71.3% lower carbon emissions compared to the Solactive Global DM Index.

Some of the businesses involved that pass all of the screens include Nvidia, Visa, Apple, Mastercard, Home Depot and Toyota.

It comes with an annual management fee of just 0.59%, which is quite inexpensive considering all of the work done to create the portfolio.

Past performance is not a reliable indicator of future returns, but the ETHI ETF returned an average of 16.4% per annum over the five years to April 2023.

Volpara Health Technologies Ltd (ASX: VHT)

Volpara is an ASX healthcare share that makes software to help against breast cancer and lung cancer.

Its AI-powered image analysis enables radiologists “to quantify breast tissue with precision, and helps technologists produce mammograms with optimal image quality, positioning, compression and dose.”

The company helps healthcare professionals better identify risk. It’s currently focused on the United States, with a market share in the breast screening space of more than a third of US women.

Volpara recently became operating cash flow positive and continues to grow revenue quickly. In the fourth quarter of its FY23 (the three months to March 2023), cash receipts increased by 25% to NZ$10 million.

Annual recurring revenue (ARR) has now reached NZ$33.6 million. The ASX share comes with a gross profit margin of more than 90%, so any revenue growth is very beneficial for the company’s financials.

It’s seeing its cost base remain “steady”, which suggests that the profit margins could rapidly grow from here. The company is looking at future areas of growth, including “new forays in primary care.”

If the ASX share continues to be chosen by large healthcare providers such as Banner Health, that bodes well for future revenue growth and returns for shareholders.

The post I’d invest $10,000 into these excellent ASX shares for the long-term appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX 200 shares today  
• Here are the 3 most heavily traded ASX 200 shares on Monday
• Which ASX 200 travel share has already taken off by 48% in 2023?
• 5 things to watch on the ASX 200 on Monday

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 positions in and has recommended Apple, Home Depot, Mastercard, Nvidia, Visa, and Volpara Health Technologies. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2025 $370 calls on Mastercard and short January 2025 $380 calls on Mastercard. The Motley Fool Australia has positions in and has recommended Volpara Health Technologies. The Motley Fool Australia has recommended Apple, Mastercard, and Nvidia. 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 Westpac Banking Corp (ASX: WBC) share price was on form on Monday.

The banking giant’s share rose almost 2% to $21.74. This was driven by a positive reaction to the company’s half-year results release.

In case you missed it, Australia’s oldest bank reported a 22% increase in profit to $4 billion. This was driven by a combination of solid net interest income growth and lower expenses.

This allowed the Westpac board to declare a 70 cents per share fully franked interim dividend, which was up 15% year over year.

Is the Westpac share price good value?

The good news for investors is that analysts at Goldman Sachs believe that the Westpac share price remains great value. So much so, the broker has kept the bank on its coveted conviction list with a buy rating and trimmed price target of $24.67.

Based on where its shares are currently trading, this implies potential upside of 13.5% for investors over the next 12 months.

But it gets better. Goldman is forecasting a 6.4% dividend yield in FY 2023 (and FY 2024), which lifts the potential 12-month total return to approximately 20%.

What did the broker say?

In respect to its results, the broker was reasonably pleased with what it saw. It said:

WBC’s 1H23 cash earnings (GS basis ex-notables) from continued operations were up significantly hoh and +8% above GSe (+1% ex notables and businesses sold). The beat was driven by higher trading income and lower BDDs, partially offset by lower NIMs, and in line expenses, such that POP came in 3% higher than GSe (-1% ex notables and businesses sold). The 1H23 DPS of 70¢ (payout ratio 60%) was lower than GSe (72¢), and the DRP will be done with no discount. WBC’s 1H23 CET1 of 12.3% (globally harmonised 18.1%) was 26 bp better than GSe. WBC reiterated that it would operate within a CET1 range of 11.0-11.5% and amended its payout ratio range to 65-75% of reported NPAT, ex-notables.

Why is it so bullish?

Goldman Sachs has outlined three key reasons why it is bullish on the Westpac share price. They are as follows:

We remain Buy rated (on CL) on WBC given: i) we view WBC’s NIM management in the half as a positive relative to peers, in particular having achieved an exit NIM that was flat versus 2Q23 average in contrast with peers who saw continued deterioration, ii) despite WBC walking away from its FY24E cost target of A$8.6 bn, we expect a broadly flat cost trajectory over the next two years, which will see WBC outperform peers in this relatively difficult inflationary environment, and iii) the stock is trading on a c.11x 12-month forward PER (ex-dividend adjusted), which is a 23% discount to peers (versus 3% historic discount), and our revised TP of A$24.67 offers 25% [now 20%] TSR.

The post The Westpac share price could offer a 20% return: Goldman Sachs appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Tuesday
• Why Lynas, Piedmont Lithium, Westpac, and Woodside shares are rising
• Here’s what you need to know about the 70 cents Westpac dividend
• Westpac share price on watch amid $4bn half-year profit
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. 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 Corporation. 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 Monday, the S&P/ASX 200 Index (ASX: XJO) started the week with a strong gain. The benchmark index rose 0.8% to 7,276.5 points.

Will the market be able build on this on Tuesday? Here are five things to watch:

ASX 200 expected to edge lower

The Australian share market looks set to give back a small portion of yesterday’s gains following a mixed start to the week on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 6 points or 0.1% lower. In the United States, the Dow Jones was down 0.2%, the S&P 500 was up slightly by 0.05%, and the NASDAQ rose 0.2%.

Oil prices rise again

Energy shares Beach Energy Ltd (ASX: BPT) and Karoon Energy Ltd (ASX: KAR) could have strong session after oil prices pushed higher again. According to Bloomberg, the WTI crude oil price is up 2.1% to US$72.83 a barrel and the Brent crude oil price is up 1.8% to US$76.54 a barrel. Oil prices rose as recession fears began to ease.

Westpac still a buy for Goldman

The Westpac Banking Corp (ASX: WBC) share price pushed higher on Monday after investors responded positively to the bank’s half-year results release. Goldman Sachs believes the gains can continue and has reiterated its buy rating with a new $24.67 price target. The broker has also kept Australia’s oldest bank on its conviction list.

Gold price edges higher

Gold miners Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) will be on watch after the gold price edged higher overnight. According to CNBC, the spot gold price is up 0.15% to US$2,028 an ounce. Traders appear to be betting that the upcoming US inflation reading will bring good news for gold.

Lynas rated neutral

Goldman Sachs isn’t as positive on Lynas Rare Earths Ltd (ASX: LYC) shares. It has responded to news that its Malaysian operations will continue to operate for another year by retaining its neutral rating with an improved price target of $6.90. The broker prefers Iluka Resources Limited (ASX: ILU) for rare earths exposure.

The post 5 things to watch on the ASX 200 on Tuesday appeared first on The Motley Fool Australia.

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More reading

• Leading brokers name 3 ASX shares to buy today
• Here are the top 10 ASX 200 shares today  
• Here are the 3 most heavily traded ASX 200 shares on Monday
• Why Lynas, Piedmont Lithium, Westpac, and Woodside shares are rising
• Why these booming ASX 200 gold shares could continue to outshine in 2023

Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. 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 Corporation. 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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If you’re looking for ASX dividend shares for your portfolio, then you may want to check out the two listed below that Citi currently rates as buys.

Here’s why the broker says these are top options for income investors:

Charter Hall Long WALE REIT (ASX: CLW)

Citi believes that the Charter Hall Long Wale REIT could be an ASX dividend share to buy.

The broker highlights the company’s “low risk income stream with c. 12 year WALE and 99.9% occupancy” as a reason to buy.

Another positive is that the broker is expecting some big dividend yields in the near term. For example, Citi is forecasting dividends per share of 28 cents in FY 2023 and 29 cents in FY 2024. Based on the current Charter Hall Long Wale REIT share price of $4.42, this will mean yields of 6.3% and 6.55%, respectively.

Citi currently has a buy rating and $5.00 price target on its shares.

Super Retail Group Ltd (ASX: SUL)

Another ASX dividend share that Citi has tipped as a buy is Super Retail. It is the retailer behind brands such as Rebel and Super Cheap Auto.

It was impressed with the company’s recent trading update and highlights that it “demonstrated resilience in sales across the board.”

The broker appears to believe more of the same is coming and is forecasting above consensus earnings during the second half. For this reason, Super Retail remains its “top pick in consumer discretionary.”

As for dividends, Citi is forecasting fully franked dividends per share of 77 cents in FY 2023 and then 72 cents in FY 2024. Based on the latest Super Retail share price of $12.83, this will mean generous yields of 6% and 5.6%, respectively.

The broker currently has a buy rating and $14.50 price target on its shares.

The post Citi rates these ASX dividend shares as buys appeared first on The Motley Fool Australia.

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More reading

• Which ASX retail shares could be ‘most impacted’ by Amazon’s rapid growth?
• 3 ASX 300 stocks Goldman Sachs has just put buy ratings on
• Why Genesis Minerals, NAB, oOh!Media, and Super Retail shares are sinking today
• Brokers say buy these ASX dividend stocks for their big fully franked yields
• These ASX dividend shares could be strong buys: brokers

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 Super Retail Group. The Motley Fool Australia has positions in and has recommended Super Retail 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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Macquarie Group Ltd (ASX: MQG) shares fell again on Monday.

The investment bank’s shares dropped over 2% to close the day at $173.50.

Investors have been selling Macquarie shares since the release of its full-year results last week.

Are Macquarie shares attractively priced now?

Morgans is likely to see the recent weakness in its share price as a buying opportunity for investors.

On Monday, the broker responded to Macquarie’s results by reaffirming its equivalent of a buy rating on the bank’s shares.

According to the note, Morgans has retained its add rating with a trimmed price target of $202. Based on where Macquarie shares currently trade, this implies potential upside of just over 16% for investors over the next 12 months. It is also forecasting a 3.6% dividend yield in FY 2024, sweetening the deal further.

While the broker acknowledges that the quality of the result was lower than hoped, it was still ahead of expectations. It said:

MQG’s FY23 NPAT (A$5.18bn) was +10% on the pcp and 2% above company compiled consensus (A$5.08bn). The 2H23 dividend (A$4.50ps, 40% franked) was 18% above consensus (A$3.82ps). In our view, it could be argued this was a lower quality beat by MQG, but there is no doubt the diversity of its franchise seems to help MQG generally find a way to outperform.

Looking ahead, the broker also acknowledges that there are risks to its earnings in FY 2024 that could mean it falls short of expectations. However, it concedes that this has been the case many times in the past and the company still finds a way to deliver. It explains:

On FY24 guidance, similar to recent years, MQG has given no specific NPAT guidance figure. Broadly MQG’s divisional commentary points to expected improved results in BFS (strong volume growth) and Macquarie Capital (better deal activity) than in FY23, but weaker results in MAM (lower investment related income) and CGM (more subdued commodities trading conditions). Clearly CGM particularly, shapes as a large earnings swing factor in FY24, noting Commodities income guidance is very wide, e.g. expected to be down on the FY23 performance (A$6bn), but up on the FY22 result (A$3.3bn). Given MQG has already said volatility in some of its CGM operations started to subside in 4Q23, we see FY24 earnings risks as likely weighted to the downside, although noting similar risks in prior years did not eventuate.

Despite the above, the broker sees plenty of value in Macquarie shares and continues to recommend them as a buy. It concludes:


MQG is a quality franchise, exposed to structural growth areas, and the company performed exceptionally well in a more difficult FY23 environment. With >10% share price upside to our price target, we continue to maintain our ADD recommendation.

The post ‘A quality franchise’: Why this broker sees major upside ahead for Macquarie shares appeared first on The Motley Fool Australia.

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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 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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Earlier this year, Pilbara Minerals Ltd (ASX: PLS) excited investors by declaring its maiden dividend.

Thanks to the high level of cash it is generating from its lithium operations, the company was able to declare and pay a fully franked 11 cents per share interim dividend.

The question on everybody’s lips now is: “what comes next?”

Where next for the Pilbara Minerals dividend?

Unfortunately, one leading broker believes that the majority of Pilbara Minerals’ FY 2023 payout has already been distributed.

According to a recent note out of Morgans, its analysts are forecasting a fully franked 15 cents per share dividend in FY 2023, which implies a final payout of 4 cents per share.

Based on the current Pilbara Minerals share price of $4.60, this will mean a full-year yield of 3.25% and a final dividend yield of 0.85%.

What about next year?

Looking ahead, Morgans expects weaker lithium prices to lead to the Pilbara Minerals dividend being cut to 9 cents per share. This represents a 1.95% dividend yield based on current prices.

But the broker doesn’t think that should put you off investing. It has an add rating and $5.00 price target on the company’s shares.

Its analysts also see scope for a surprise rebound in lithium prices. If this happens, it could lead to stronger earnings and dividends. The broker advises:

Our base case is for lithium prices to stabilise and plateau before declining to LT levels. However, we do see the potential for prices to be driven higher if the Chinese market is forced to aggressively restock. If this were to happen there would be strong trading opportunities over and above our base case.

Time will tell what happens with lithium prices and ultimately the Pilbara Minerals dividend in the near future.

The post How big will the Pilbara Minerals dividend be next year? appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX 200 shares today  
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• ASX lithium shares are off and racing today. What’s behind the boost?
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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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