Day: 15 May 2023

With so many shares to choose from on the ASX, it can be hard to decide which ones to buy. The good news is that brokers across the country are doing a lot of the hard work for you.

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

QBE Insurance Group Ltd (ASX: QBE)

According to a note out of Morgans, its analysts have retained their add rating on this insurance giant’s shares with a trimmed price target of $16.50. This follows the release of a mixed quarterly update at the end of last week. While the broker was pleased to see QBE’s gross written premium growth guidance lifted, higher claims have weighed on its combined operating ratio. Nevertheless, the broker was pleased with underlying trends and remains positive on its outlook. The QBE share price is trading at $14.74 today.

REA Group Ltd (ASX: REA)

A note out of Goldman Sachs reveals that its analysts have retained their conviction buy rating on this property listings company’s shares with a trimmed price target of $159.00. This follows the release of a mixed quarterly update from the realestate.com.au operator. While cost pressures and listing headwinds in Melbourne and Sydney are weighing on its performance, the broker was pleased with its FY 2024 ad yield outlook, which was more robust than it was expecting thanks to Premiere pricing. The REA share price is fetching $135.94 today.

Technology One Ltd (ASX: TNE)

Analysts at Bell Potter have upgraded this enterprise technology company’s shares to a buy rating with an improved price target of $17.00. The broker believes Technology One is well-placed to deliver a strong half-year result this month. Pleasingly, more of the same is expected in the coming years. So much so, the broker suspects that the company may need to upgrade its medium term guidance in the near future. The Technology One share price is trading at $14.79 on Monday.

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

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More reading

• Why did Morgans just downgrade this popular ASX 200 stock?
• Broker urges investors to buy the QBE share price dip
• Why Bell Potter just upgraded this ASX 200 tech share
• 5 things to watch on the ASX 200 on Monday
• Green skies ahead: These 2 ASX 200 stocks upgraded their earnings guidance this week

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 Technology One. The Motley Fool Australia has recommended REA Group and Technology One. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Elders Ltd (ASX: ELD) share price is suffering on Monday after the company revealed disappointing first half earnings, including an 18% cut to its interim dividend.

The S&P/ASX 200 Index (ASX: XJO) agriculture company will provide shareholders with just 23 cents per share. That’s compared to the 28 cents per share it paid out this time last year.

Right now, shares in Elders are down 11.99%, trading at $7.31.

Let’s dive into all that those invested in the company need to know about their newly slashed interim payout.

Elders slashes interim dividend 18% to 23 cents per share

The market is bidding Elders shares lower on the back of a 46% tumble in first-half profits, as The Motley Fool Australia reported earlier.

Its earnings were dinted amid weaker conditions for the agriculture industry compared to a strong performance in the prior period. And now passive income investors might feel some of the impact.

The company declared a 23-cent per share, 30% franked, interim dividend this morning.

That’s dwarfed by the offerings it handed out last financial year. Though, it does come in 15% higher than the financial year 2021’s 20 cents per share, 20% franked, interim offering.

Elders shares will trade ex-dividend next Tuesday. That means would-be investors have a week to get on board the company or miss out on the payment.

Those invested in the company as of next Monday’s close will see the dividend hit their accounts from 22 June.

Elders will run its dividend reinvestment plan (DRP) for its interim offering. Though, no discount will be applied to the shares provided. Investors have until 26 May to register to receive their dividend in the form of stock rather than cash.

But there’s a silver lining to the ASX 200 agriculture stock’s tumble.

Considering both its newly announced 23-cent dividend and its recent 28-cent final dividend, Elders shares trade with a 7% dividend yield at its current share price.

The post Own Elders shares? Your dividend was just slashed by 18% appeared first on The Motley Fool Australia.

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More reading

• Elders share price plummets as half-year profit dumps 46%
• Goldman Sachs says buy these ASX 200 shares for passive income
• 5 things to watch on the ASX 200 on Tuesday
• Here are 2 ASX 200 dividend shares to buy with 6%+ yield: analysts

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Elders. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It’s been a tough start to the trading week so far for ASX shares and the S&P/ASX 200 Index (ASX: XJO). At the time of writing, the ASX 200 has slipped by 0.15%, putting the Index at under 7,250 points. But what about the share price of Pointsbet Holdings Ltd (ASX: PBH)?

Pointsbet shares are crashing in lunchtime trading. The company closed at $1.85 a share last Friday and its shares are currently fetching $1.535 apiece, a plunge of 16.8%. But that’s a recovery from its intraday low of $1.43 a share, a loss of 22.7%. So what’s going on?

This morning, Pointsbet released an ASX announcement that told investors that “trading in the securities of the entity will be temporarily paused pending a further announcement”.

Soon after, the company came out with another announcement. This revealed to shareholders that Pointsbet has entered into a binding agreement to sell its US business to Fanatics Betting and Gaming for US$150 million ($222 million).

Pointsbet share price crashes as US business offloaded for $222 million

The proposed sale is subject to a few conditions, including regulatory approvals and shareholder assent. Pointsbet will still retain both its Australian and Canadian businesses, and shareholders will receive the net proceeds of the sale directly in the form of capital returns. The company estimates these returns will have a value of between $1.07 and $1.10 per share.

Pointsbet also revealed that after the sale of its US business, its remaining Australian and Canadian businesses “will be at or around EBITDA breakeven on a stand–alone basis”.

Shareholders will vote on the sale at a shareholders’ meeting scheduled to occur “in late June 20203”. The Pointsbet board has unanimously recommended that shareholders vote in favour of the sale in the absence of a better offer.

Here’s some of what Pointsbet CEO Sam Swanell had to say on his news today:

The sale of the US Business to Fanatics Betting and Gaming delivers the most attractive risk-adjusted value outcome for shareholders compared to the risks and benefits of other options including the status quo.

Fanatics Betting and Gaming has recognised our strategy, technology and team, as a platform for their own expansion in the online sports betting and iGaming market. Given Fanatics significant presence in the US sports market, we consider them to be a natural acquirer of our US Business…

Importantly the proposed transaction removes the risks and capital requirements associated with executing the Company’s United States strategy.

Company snapshot

Prior to today, the Pointsbet share price had a cracking year in 2023 so far. It was up 13% year to date but is now 2% in the red.

Over the past 12 months though, Pointsbet shares have now lost around 41% of their value. And the company is down around 90% from its 2021 all-time highs of more than $15 a share. This ASX share has a current market capitalisation of $461 million.

The post Here’s why the Pointsbet share price is tumbling 17% on Monday appeared first on The Motley Fool Australia.

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More reading

• Here are the 10 most shorted ASX shares
• Why Macquarie, Meteoric Resources, Pointsbet, and Syrah shares are falling
• Here are the 10 most shorted ASX shares
• Why Perenti, Pointsbet, ResMed, and Telix shares are rising today
• These were the best-performing ASX 200 shares in April

Motley Fool contributor Sebastian Bowen 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 PointsBet. The Motley Fool Australia has recommended PointsBet. 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 S&P/ASX 200 Index (ASX: XJO) stock Brickworks Limited (ASX: BKW) looks like a great ASX dividend share contender for producing a strong amount of annual passive income for shareholders.

If you haven’t heard of Brickworks before, you’ll love the various attributes that I’m going to tell you about in this article.

I’m not about to say that Brickworks is going to become as big a business as Commonwealth Bank of Australia (ASX: CBA) and BHP Group Ltd (ASX: BHP), but I will say that Brickworks’ divisions have promising long-term outlooks and this could enable pleasing dividend growth and resilience.

Investments

Brickworks owns a significant amount of investment business in Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shares with a 26.1% stake. It’s a cross-holding partnership, with Soul Pattinson also owning a significant amount of Brickworks.

This arrangement has been going for decades and it has provided Brickworks with a defensive and fairly consistent source of earnings and dividends which offsets the largely cyclical nature of building products demand.

Soul Pattinson is invested in a number of different sectors including telecommunications, property, financial services, resources, agriculture, healthcare and swimming schools.

The investment company has grown its passive dividend income each year since 2000 for investors.

Brickworks also owns around a fifth of robotic bricklaying business FBR Ltd (ASX: FBR), though this hasn’t made much of an impact for Brickworks yet.

Building products

Brickworks started out on the ASX as a large brickmaker in Australia. It’s the market leader in Australia and it also manufactures a number of other building products including roofing, cement, masonry and advanced cladding systems.

In recent years the ASX 200 stock has also expanded into North America after making a few acquisitions. It’s the brickmaking market leader in the northeast of the US.

The building products divisions see their earnings bounce up and down through the years, but they can benefit from long-term demand growth as the Australian (and US) population grows.

But, I think this division is also very beneficial for Brickworks shares and the long-term passive income because of the land factor.

Brickworks owns/owned parcels of land that the building products manufacturing facilities are located on. It has unlocked a lot of value with its property trust.

Industrial property trusts

Brickworks has a 50% stake in an industrial property trust that it owns alongside Goodman Group (ASX: GMG). The company’s management has said that the dividends from Soul Pattinson and net rent from the property trust together fund Brickworks’ passive income payments.

Brickworks has been steadily selling land it no longer needs into this trust, unlocking some of the value of the land. Goodman then builds large industrial properties on that land for tenants like Woolworths Group Ltd (ASX: WOW), Coles Group Ltd (ASX: COL) and Amazon.

When the large warehouses are complete, the trust achieves a development profit for the trust (and Brickworks) because the land is now worth more with a huge property on it. The ASX 200 stock then benefits from the (growing) rental profit that the property trust is generating.

Brickworks has identified other parcels of land it owns that can be sold into the trust over the next few years which could lead to a 54% increase of the net rent over the next five years when combined with the expected organic rental increases with its current property portfolio.

Passive income potential from the ASX 200 stock

Brickworks hasn’t cut its dividend in over 45 years, which is a very impressive record and shows that the management and board want to provide shareholders with a resilient payment each year. I like the diversification offered by the Soul Pattinson shares and the property trust.

It’s those factors that would make me comfortable enough to invest a large amount into Brickworks shares to make $50,000 of annual passive income.

The last two dividends from Brickworks amount to an annual dividend per share of 64 cents. To make $50,000 we’d need 78,125 Brickworks shares, which would come at a cost of $1.93 million.

I don’t know about you, but I don’t have almost $2 million cash waiting to be invested. So, it might be better to think of $5,000 of annual passive income from a $193,000 investment or $500 of annual dividends from a $19,300 investment.

Whatever size investment someone goes for, Brickworks could be a great candidate for long-term payouts and growth.

The post How does $50,000 of annual passive income sound? Buy 78,100 shares of this ASX 200 stock appeared first on The Motley Fool Australia.

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More reading

• 3 ASX 200 building shares that could rise now that house prices have bottomed
• My 5-step plan to achieving $500 in monthly passive income
• How I’d invest $20k in ASX stocks today to target serious wealth
• 5 dividend shares I think are among the safest on the ASX
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor Tristan Harrison has positions in Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks, Coles Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Goodman 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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AMP Ltd (ASX: AMP) shares are once again offering investors some welcome passive income.

The S&P/ASX 200 Index (ASX: XJO) financial stock has been struggling over recent years.

The wealth manager last paid out a dividend back in October 2020.

But in a sign things may finally be turning around, the board declared a final dividend of 2.5 cents per share, 20% franked, when the company announced its full-year results on 16 February. This will have hit shareholders’ bank accounts on 3 April.

That’s not quite enough to make up for the 4.2% fall in AMP shares over the past year. But with the partial franking credits, it comes close.

How much passive income will my $8,000 June investment in AMP shares have yielded?

AMP shares are currently trading for $1.09 apiece.

That works out to a trailing yield of 2.3%.

On the day the AMP board declared its revived dividend, shares closed at $1.14.

ASX 200 investors who were drawn by the renewed dividend payment and bought on that day will be earning a yield of 2.2%. Or $175 in passive income from an $8,000 investment.

But if I’d been brave and bought shares near the lows on 30 June, I could have bought the stock for 96 cents per share.

Now my yield on those same AMP shares has grown to 2.6%.

And I’d have earned a very welcome $208 in passive income from that investment already.

Not to mention realising a 14% share price gain, which would have seen me bank capital gains of another $1,083.

Now admittedly I’m cherry-picking the AMP share lows from last June with the benefit of hindsight. And a tumbling stock may, of course, continue its slide after you buy in.

But if you do manage to buy in near the lows – via good luck, extensive research, or perhaps good investing advice – it can really boost your passive income stream for as long as you hold that stock.

The post If I’d invested $8,000 in AMP shares in June here’s how much passive income I’d be earning today appeared first on The Motley Fool Australia.

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More reading

• How did the AMP share price manage to surge 8% in April?
• AMP shares are finally heading upwards, but will it last?
• Here are the top 10 ASX 200 shares today
• Why AMP, EML, Pilbara Minerals, and Telix shares are racing higher today
• AMP share price marching higher as net outflows ebb

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 BHP Group Ltd (ASX: BHP) share price has drifted lower over the last few months, trading at $43.88 at the time of writing. But a fund manager has suggested the ASX mining share could rise as high as $100 in the future. Let’s have a look at what might cause such a monumental increase.

The fund manager who’s made the call is Tribeca Investment Partners’ Ben Cleary, according to reporting in the Australian Financial Review.

Cleary has suggested it’s a great time to invest in ASX mining shares despite pessimistic sentiment.

Why be bullish on miners?

The fund manager suggested there are supply constraints with a number of commodities after a “decade of underinvestment in new projects, while demand is continuing to build amid the transition to a decarbonised world”.

Cleary points out that ASX mining shares are achieving good profits, enabling them to pay good dividends and fund share buybacks.

Despite the sound operating conditions, the fund manager thinks valuations in the resources sector have dropped because of the fears of a potential global recession, which might hurt demand for raw materials.

Why could this be good news for the BHP share price? The AFR reported Cleary thinks the market prices an event “long before it takes place”, so he believes the market will soon be looking beyond the current economic uncertainty.

BHP share price to hit $100?

As we can see on the chart above, BHP shares are sitting at around $44, so the share price would need to more than double to hit $100 a share. But Cleary thinks the BHP share price can rise to $100 over the longer term in the current commodity cycle. He commented in the AFR:

Resources stocks are trading cheap, particularly against the broader market and there’s all these categories of potential catalysts like M&A that could spark a rally.  

We just think it’s a great time to be adding exposure to the sector, and we have been, despite the uncertain environment we’re in. I think people will look back and think they should’ve been topping up their exposure to resources stocks during the last couple of months.

BHP has a diversified resource base across iron ore, copper, nickel, and coal. China is a major buyer of iron ore, so what happens with the Asian superpower could be essential to the future success of the BHP share price. So what does the fund manager think about the outlook for the country?

Clearly noted that there has been some “underwhelming” economic data from China but he suggests its economy is strengthening. Cleary has visited the country three times so far this year. He points to a number of positives including rising property prices in most cities. As well, sales volumes are almost back to pre-COVID levels and home builders are also reportedly issuing bonds to foreign investors again, according to Cleary.

The fund manager said:

Activity in China is as strong as I’ve ever seen it – there’s no doubt domestic travel is as strong as it’s even been in the last 20 years, and commuting numbers are as strong as we’ve seen.

He thinks that strong credit growth will continue in China, which is good news for the manufacturing sector and subsequently iron ore. His bullish call on the BHP share price is a “proxy” for how bullish he is for the resources sector.

The post This fund manager thinks the BHP share price could reach $100! appeared first on The Motley Fool Australia.

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More reading

• Could the iron ore price slide below $100 US dollars in 2023?
• How to invest $10,000 in ASX dividend shares in May
• Why are ASX 200 mining stocks having such a shocking end to the week?
• What’s the 5-year forecast for commodity prices and ASX 200 mining shares?
• Why are BHP shares sliding today?

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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The Tyro Payments Ltd (ASX: TYR) share price has followed the All Ordinaries Index (ASX: XAO) lower today despite the payment solutions provider upgrading its full-year guidance.

The upgrade came on the back of a strong 10-month period and was driven by improved margins and cost reduction.

The Tyro share price roared to peak at $1.62 earlier today, marking a 4.8% gain.

However, it has since slumped into the red, falling 0.97%, trading at $1.53 at the time of writing

For comparison, the All Ordinaries is down 0.23% at the time of writing.

Let’s take a closer look at what investors might expect from the tech company’s upcoming financial year 2023 results.

Tyro tipped to bring in up to $194 million of profits

The Tyro share price is wobbling on Monday amid the news the company expects to continue its winning streak.

It reached profitability and posted its maiden positive free cash flow as a public entity in the first half of this fiscal year. And things appear to have just gotten better from there.

It now expects to bring in a gross profit of between $192 million and $194 million for financial year 2023. That’s up from its previous forecast of $187 million to $191 million.

Meanwhile, its earnings before interest, tax, depreciation, and amortisation (EBITDA) is forecast to come in between $41 million and $43 million. That was previously tipped to reach $37 million to $41 million.

It’s also targeting an EBITDA margin of around 22% and approximately 78% of operating leverage.

However, the company dropped its transaction value forecasts to between $42.25 billion and $42.75 billion. It previously estimated its transaction value would come in between $42.5 billion and $43.5 billion.

Tyro CEO Jon Davey commented on the news weighing the company’s share price today, saying:

Transaction value across our three core verticals remains strong albeit with some expected softening due to a slowdown in consumer discretionary spending. Despite this, we remain optimistic about the outlook for financial year 2024.

The All Ordinaries tech stock is still in takeover talks with suitor Potentia Capital. It reiterated that there’s no certainty the talks will result in a transaction.

Tyro share price snapshot

The Tyro share price has been on a roll lately.

The stock has gained 11% since the start of 2023. It’s also 42% higher than its previous close.

Meanwhile, the All Ordinaries has lifted 4% year to date and 1% over the last 12 months.

The post Tyro share price slumps despite cost reductions delivering earnings guidance upgrade appeared first on The Motley Fool Australia.

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More reading

• InvoCare shares rocket 11% today on sweetened $2.2 billion takeover offer
• Is the Fortescue share price a buy for its 2024 dividend yield?
• Newcrest share price lifts as $28.8 billion Newmont takeover greenlighted
• Elders share price plummets as half-year profit dumps 46%
• Here’s why these high-quality ASX ETFs could be buys this week

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tyro Payments. 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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InvoCare Ltd (ASX: IVC) shares are soaring today, up 10.82%.

S&P/ASX 200 Index (ASX: XJO) funeral services provider closed on Friday trading for $11.09 per share. Shares are currently changing hands for $12.29 apiece.

This comes on news that private equity firm TPG Capital Global has lobbed an improved takeover proposal for InvoCare. TPG’s initial proposal was reported on 7 March. InvoCare shares closed up 35% on the day.

What is TPG’s new takeover offer?

InvoCare shares are once more leaping higher on today’s news of the revised proposal.

The conditional, non-binding, and indicative proposal would see TPG acquire all InvoCare shares for $13.00 per share in cash by way of a scheme of arrangement.

That’s 35 cents per share more than the $12.65 offered under the initial proposal. That proposal was withdrawn on 24 April.

The revised proposal equates to an equity value of approximately $1.9 billion and an enterprise value of some $2.2 billion.

Management notes this is a 45.3% premium to InvoCare’s undisturbed closing share price of $8.95 per share on 6 March 2023, the day before the initial takeover offer was reported.

And it’s 17% higher than Friday’s closing price.

Under the revised proposal, InvoCare will also be allowed to pay a fully franked special dividend before the takeover is completed. The company expects that to be around 60 cents per share.

The amount shareholders will receive will be reduced by the amount of the special dividend. However, thanks to the potential tax benefits, stockholders who can utilise the franking credits could see their shares worth around $13.25 apiece.

InvoCare’s board has agreed to grant TPG the opportunity to conduct due diligence for five weeks on an exclusive basis.

Should TPG come back with a binding proposal of at least $13.00 per InvoCare share, the board said it intends to unanimously recommend shareholders vote in favour, barring a superior proposal.

Shareholders do not need to take any action at this point.

How have InvoCare shares been tracking?

With today’s big intraday leap factored in, InvoCare shares are up a healthy 12% so far in 2023. That handily outpaces the 4.3% year-to-date gain posted by the ASX 200.

The post InvoCare shares rocket 11% today on sweetened $2.2 billion takeover offer appeared first on The Motley Fool Australia.

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More reading

• Why BHP, InvoCare, Lake Resources, and South32 shares are dropping today
• ASX 200 takeover target dives 15% after its deal is laid to rest

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 Fortescue Metals Group Ltd (ASX: FMG) share price has been drifting lower over the last month, so that makes me think about whether the ASX mining share is now better value and the dividend yield is too good to miss.

Over the past month, Fortescue shares have dropped by around 10%, as we can see in the chart below.

Typically, the large ASX iron ore shares like Fortescue and BHP Group Ltd (ASX: BHP) trade on a low price/earnings (p/e) ratio which helps enable a high dividend yield.

With the Fortescue share price dropping in recent weeks, this is pushing up the prospective Fortescue dividends.

What’s going on?

The iron ore price is an integral part of the picture for ASX iron ore shares.

It costs a miner roughly the same amount each month to mine 1 million tonnes of iron ore. So, an increase in the commodity price and revenue also largely boosts the net profit. But, a reduction in the resource price obviously hurts the net profit, which can have a flow-on effect on the Fortescue share price.

What we’ve been seeing is a fall in the iron ore price in the last few weeks from more than US$120 per tonne to around US$100 per tonne. Fortescue’s monthly profitability has therefore been cut quite a bit.

The past few years have shown how cyclical the trading environment can be for iron miners. Demand from China is usually unpredictable, and who knows what the next 12 months and beyond hold?

Long-term looks promising

China has developed enormously as a country over the past three decades, and I think its demand for iron ore will be strong enough to ensure that the iron ore price remains at a healthy level for Fortescue to keep making a decent profit and cash flow.

I like Fortescue’s move to open the higher-grade iron ore project Iron Bridge which is now operational, as this diversifies and grows Fortescue’s product offering for customers.

I’m very confident about the company’s future when it comes to the green energy goal of making large quantities of green hydrogen to decarbonise heavy machinery, boats and perhaps planes.

Those green plans may come with a large price tag. However, Fortescue has a number of different ways to pay for this, including allocating some of its net profit after tax (NPAT) each year to Future Fortescue Industries (FFI), possibly bringing sovereign wealth funds on board and potentially receiving some government funding.

Is the Fortescue share price a buy for the dividend yield?

Using the estimates on Commsec, Fortescue is projected to pay a grossed-up dividend yield of 13.3% in FY23 and 9.1% in FY24.

For most companies, a dividend yield of more than 9% is a very high dividend yield, so that could be a solid cash return for shareholders over the next 12 months.

The Fortescue share price is now cheaper than it was, which is better for potential buyers, though an even lower price would be even more attractive, of course.

For me, Fortescue has appealing long-term plans and could pay attractive dividends, at least in the shorter term. I’d be happy to buy a few shares today, though I’d load up if the Fortescue share price fell below $17.

The post Is the Fortescue share price a buy for its 2024 dividend yield? appeared first on The Motley Fool Australia.

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More reading

• Could the iron ore price slide below $100 US dollars in 2023?
• Why are ASX 200 mining stocks having such a shocking end to the week?
• How much would I need to invest in ASX shares for a retirement income of $65,000 per year?
• ASX 200 mining shares in focus: Top broker says current iron ore price is ‘unsustainable’
• The top 10 ASX shares held by millionaires

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 Newcrest Mining Ltd (ASX: NCM) share price is marching higher today, up 0.8%.

Shares in the S&P/ASX 200 Index (ASX: XJO) gold stock closed Friday trading for $28.25. Shares are currently changing hands for $28.48.

This comes after Newcrest’s board announced that they now approve of the latest takeover offer lobbed by United States gold miner Newmont Corporation (NYSE: NEM).

On 16 February, the Newcrest board rejected a prior offer, which at the time represented a 22% upside to the Newcrest share price.

Here’s what happening today.

What’s happening with the Newmont takeover offer?

This morning, the ASX 200 miner’s board reported they have agreed to proceed with Newmont’s proposal to acquire 100% of its shares by way of an Australian scheme of arrangement.

The board unanimously recommends shareholders vote in favour of the offer, barring a superior proposal.

Under the agreement, Newcrest shareholders will receive 0.400 Newmont shares for each share they hold. Newcrest will also be allowed to pay a fully franked special dividend of up to US$1.10 per share prior to completion of the takeover.

When aggregated with the franked special dividend, this represents an implied Newcrest share price of $29.27 per share, or 3.6% above Friday’s closing price. And it works out to an implied enterprise value of $28.8 billion.

On completion, Newcrest shareholders will hold a 31% ownership of the combined gold mining group.

Management commentary

Commenting on the offer sending the Newcrest share price higher today, chair Peter Tomsett said:

This transaction will combine two of the world’s leading gold producers, bringing forward significant value to Newcrest shareholders through the recognition of our outstanding growth pipeline.

In addition to the ongoing benefits of merging these premier portfolios, the combined group will set a new benchmark in gold production while benefitting from a material and growing exposure to copper and a market leading position in safety and sustainability.

Tomsett added, “We believe our shareholders and other stakeholders can look forward to an exciting and prosperous future.”

Pending shareholder approval and other required conditions, Newcrest expects the scheme to be implemented by the end of the year.

Newcrest share price snapshot

The ASX 200 gold miner has been a very strong performer in 2023, benefiting from a rising gold price and the steady stream of Newmont takeover news.

That’s all helped the Newcrest share price gain 37% since the opening bell on 3 January.

The post Newcrest share price lifts as $28.8 billion Newmont takeover greenlighted appeared first on The Motley Fool Australia.

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More reading

• What’s the 5-year forecast for commodity prices and ASX 200 mining shares?
• Newcrest share price slips as exclusivity period for $32b takeover extended
• What’s the gold price forecast for the remainder of 2023?
• 5 things to watch on the ASX 200 on Friday
• Top defensive ASX shares to buy in May 2023

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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