Stock Pick

Author: openjargon

  • Red Lobster is closing down over 50 locations, and everything must go

    A Red Lobster restaurant in Rohnert Park, California.
    A Red Lobster restaurant in Rohnert Park, California — one of the dozens of locations listed for auction.

    Justin Sullivan via Getty Images

    • Red Lobster is closing over 50 US locations, a restaurant liquidator confirmed.
    • TAGeX Brands will auction off furniture and kitchen items from the closing locations.
    • Bloomberg previously reported that the seafood restaurant chain is considering a bankruptcy filing.

    Red Lobster, the seafood restaurant chain considering a bankruptcy filing, is shutting down over 50 locations across the US.

    TAGeX Brands, a restaurant liquidator, confirmed to Business Insider on Monday that it would be auctioning off kitchen items and furniture from the locations that would be shut down. The auction began Monday and will end Thursday. Neal Sherman at TAGeX Brands told BI that four sales were completed on Monday.

    "TAGeX Brands is conducting the largest restaurant equipment auction event ever, auctioning off the contents of 50+ former Red Lobster locations across the country that were closed as part of Red Lobster's footprint rationalization," the company wrote in a statement to BI.

    Red Lobster has not made a public statement about the restaurant closures and did not immediately respond to a request for comment from Business Insider.

    Per the Red Lobster website, locations TageX Brands lists as part of their liquidation auction appear to be closed for the rest of the week. Local outlets from Orlando to Buffalo reported that locations had been listed as "temporarily closed" on the website.

    States that will see Red Lobster closures include California, Colorado, Florida, New York, and Texas. The company has over 700 locations, although it's unclear if the total was updated to reflect the restaurant closures.

    Red Lobster has seen its share of financial struggles over the years.

    The 56-year-old chain founded in Florida recently blamed $11 million in losses in the third quarter of 2023 on its all-you-can-eat shrimp promotion.

    The restaurant also reported losing billions in sales in March 2020 during the start of Covid-19 lockdowns.

    Bloomberg reported in April that the restaurant company was considering filing for Chapter 11 bankruptcy protection.

    Retail experts who previously spoke to Business Insider said some of the company's troubles are due to the private equity firm Golden Gate Capital, which took over the struggling business in 2014.

    Golden Gate Capital sold Red Lobster's real-estate holdings that same year to a separate company to help finance the deal and later leased those restaurants back, which has cost the brand.

    In the past two years, the company has also faced unsteady leadership, with multiple Red Lobster executives leaving roles.

    Read the original article on Business Insider

  • Why this $1.5 billion ASX 200 stock just surged 10%

    Man holds young girl out in a flying motion as mum watches on, all in front of a motorhome.

    S&P/ASX 200 Index (ASX: XJO) stock GUD Holdings Ltd (ASX: GUD) is off to the races on Tuesday.

    Shares in the diversified automotive market products company closed yesterday trading for $9.77. At the time of writing in late morning trade today, shares are changing hands for $10.71 apiece, up 9.6%.

    For some context, the ASX 200 is down 0.2% at this same time.

    Here’s what’s piquing investor interest.

    ASX 200 stock soars on confirmed earnings guidance

    Investors are bidding up the GUD Holdings share price after the company confirmed that its full 2024 financial year (FY 2024) underlying earnings before interest, taxes and amortisation (EBITA) is forecast to be at least $193.5 million.

    That’s in line with management’s prior expectations, and based on updated April 2024 unaudited, management estimates.

    Excluding its AutoPacific Group (APG) segment, the ASX 200 stock’s automotive was reported to be continuing to trade well across all its key business units.

    Management said this reflects the ongoing execution of its diversification strategy and the resilience of the aftermarket. They added that the end user workshop demand also remains positive.

    As for APG, the company now expects this business, which it acquired in November 2021, to deliver approximately $63 million in underlying EBITA for the full financial year. That’s $3 million below what was expected when GUD reported on its half-year results (H1 FY 2024).

    The ASX 200 stock cited various headwinds impacting APG’s earnings.

    Among those is the New Zealand market’s slower-than-expected recovery. The New Zealand market was reported to be operating “marginally above breakeven to date” in FY 2024. However, the NZ business has delivered some $10 million less in EBITA in FY 2024 to date than management’s base case assumptions.

    APG was also impacted by lower Toyota volumes, with second-half volumes declining, along with “emerging consumer-related softness in the trailering market”.

    Despite that weak caravan market, management said earnings from Cruisemaster are in line with FY 2023, “reflecting market share gains”.

    Looking ahead, the company expects revenue and EBITA growth from APG in FY 2025 “as headwinds partially moderate and new business wins begin to contribute”.

    GUD Holdings’ corporate costs, cash conversion and leverage were also said to be tracking in line with management’s expectations.

    As for passive income

    The ASX 200 stock is also popular among passive income investors for its long-term track record of paying two fully franked dividends per year.

    GUD Holdings paid a final dividend of 22 cents per share on 14 September and an interim dividend of 18.5 cents per share on 8 March.

    That works out to a full-year payout of 40.5 cents per share.

    At the current share price of $10.71, this ASX 200 stock trades on a fully franked trailing yield of 3.8%.

    The GUD Holdings share price is up 16% over 12 months.

    The post Why this $1.5 billion ASX 200 stock just surged 10% appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Gud Holdings Limited right now?

    Before you buy Gud Holdings Limited shares, consider this:

    Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Gud Holdings Limited wasn’t one of them.

    The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    And right now, Scott thinks there are 5 stocks that may be better buys…

    See The 5 Stocks
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    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.

  • Inherited a substantial sum of money? Here’s how I’d spend it (including the ASX stocks I’d buy)

    Woman with speaker

    Given the topic, let’s try to keep this article as light-hearted as possible. Let’s assume that one day, out of the blue, you get a call from a lawyer telling you that your mysterious great aunt Holga recently passed away at the ripe old age of 106. You can only remember meeting Holga once – on a family trip to Dusseldorf when you were still a toddler – but you must have made a good impression, because she decided to leave you all her worldly possessions, including a significant sum of money.

    Sure, you feel sad for poor old Holga, but she had a good run. And so, before long, your thoughts turn to how you should spend this sum of money. It could set you up for the future – and might even allow you to retire early!

    But you’ve never had so much money before, and it’s hard to work out where to start. Should you invest it all in stocks? Should you use it to pay off your debts? Should you blow it all at the casino?

    In this article, we take a look at some of the most prudent ways you can use your surprise cash injection. After all, it’s what Holga would have wanted.

    Pay off your debts

    The first thing you should do – before you even think about investing your inheritance on the ASX – is pay off as much of your outstanding debts as possible. Debt is the finance universe’s equivalent of a black hole. It sucks all your cash into oblivion and significantly diminishes your ability to grow your wealth.

    Trust me – although it might sound a bit boring, the best thing you can do if you come into a significant amount of money is to use it to wipe out your debt. It will be a huge weight off your mind, and a first step towards financial freedom.

    Set aside an emergency fund

    The second-best thing you can do (after getting rid of your debts) is to set aside an emergency fund. This is an amount of money you squirrel away to use in case something unfortunate happens – like you suddenly lose your job, have to pay a medical bill or have some other large, unexpected expense crop up.

    Advice differs on how much you need to put into your emergency fund, but enough to cover between 3 and 6 months of expenses is a good rule of thumb. Ensure your emergency fund is somewhere you can access quickly and easily, like a high-interest savings account. Don’t invest it in shares or other at-risk assets, because if you need that money in a hurry and those investments have lost some of their value, you’ll be forced to sell them for a loss.

    Income or growth?

    OK, now that we’ve got the boring things out of the way, it’s time to use whatever cash you have left to build a portfolio. But what sort of portfolio do you want to build?

    You may decide to use your portfolio to supplement your income. In that case, you should build a portfolio weighted towards blue-chip stocks with stable valuations and consistently high dividends.

    Good places to start would be leading Aussie bank Commonwealth Bank of Australia (ASX: CBA), mining giant BHP Group Ltd (ASX: BHP), or a favourite of mine, investment house Washington H Soul Pattinson & Company (ASX: SOL). A portfolio made up of just these stocks would pay you a dividend yield of about 4%, meaning you can expect an annual dividend income of $4,000 for every $100,000 invested.

    Alternatively, you can park some of your money in a dividend exchange-traded fund (ETF) like the Vanguard Australian Shares High Yield ETF (ASX: VHY). This fund invests in a diversified portfolio of 71 ASX large-cap high-dividend stocks, including CBA and BHP, as well as diversified conglomerate Wesfarmers Ltd (ASX: WES) and telco Telstra Group Ltd (ASX: TLS), among many others. Its dividend yield is a little over 5% and charges an annual management fee of 0.25%.   

    If you’d rather target growth there are plenty of great options on the ASX. I believe tech market darling WiseTech Global Ltd (ASX: WTC) is a good stock to watch, as is cancer drug company Telix Pharmaceuticals Ltd (ASX: TLX) and digital audio company Audinate Group Ltd (ASX: AD8). And a left-field choice to add to your watch list is Las Vegas-based gambling machine company Light & Wonder Inc (ASX: LNW).

    There are also ETFs available for growth-oriented investors. The Betashares Diversified High Growth ETF (ASX: DHHF) provides exposure to a portfolio of about 8,000 global stocks with high growth potential – and charges an annual management fee of just 0.19%.

    The post Inherited a substantial sum of money? Here’s how I’d spend it (including the ASX stocks I’d buy) appeared first on The Motley Fool Australia.

    Wondering where you should invest $1,000 right now?

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes could be the ‘five best ASX stocks’ for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now…

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    Motley Fool contributor Rhys Brock has positions in Audinate Group, Commonwealth Bank Of Australia, and WiseTech Global. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Audinate Group, Light & Wonder, Telix Pharmaceuticals, Washington H. Soul Pattinson and Company Limited, Wesfarmers, and WiseTech Global. The Motley Fool Australia has positions in and has recommended Audinate Group, Washington H. Soul Pattinson and Company Limited, Wesfarmers, and WiseTech Global. The Motley Fool Australia has recommended Light & Wonder, Telix Pharmaceuticals, and Vanguard Australian Shares High Yield ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

  • Boats still aren’t safe from orcas as the Mediterranean yachting season kicks off and killer whales sink another yacht

    A pod or orca whales feeds in the Atlantic Ocean.
    A pod of orca whales feeds in the Atlantic Ocean. In the Mediterranean, a different group of orcas sank another yacht.

    Arturo de Frias photography

    • Killer whales took down another yacht on Monday as the Mediterranean yachting season begins.
    • It's the latest incident of orcas clashing with boats, which has been on the rise in recent years.
    • Marine biologists say the orcas are likely playing and may be learning the behavior from each other.

    The Mediterranean yachting season has kicked off for the summer — and it didn't take long for another yacht to fall victim to a killer whale encounter.

    A group of orcas sank a 50-foot sailing yacht in Moroccan waters on Sunday in the latest of several similar incidents involving the highly social species that have occurred over the past four years.

    An unknown number of orcas were involved in the incident, which took place in the Strait of Gibraltar, Spain's maritime rescue service said Monday, according to Reuters.

    The incident is the most recent in a spate of bizarre orca encounters with boats that have been on the rise in recent years, primarily in Mediterranean waters south of Spain, where many yachts cruise during the summer months.

    Two passengers were on board the Alboran Cognac around 9 a.m. local time on Sunday when they felt sudden hits to the hull and rudder, Reuters reported, citing the maritime service. Water soon started to pour into the yacht.

    A nearby oil tanker came to the people's rescue, saving them from the waterlogged ship and delivering them to land.

    But the yacht wasn't as lucky. The Alboran Cognac stayed adrift for a time until it ultimately sank.

    Since 2020, hundreds of similar encounters between boats and orcas have been documented off the southern coasts of Spain and Portugal, often near the Strait of Gibraltar. And it's not just yachts. The orcas have also rammed into sailboats, and some mariners have even created heavy-metal playlists in hopes of deterring the killer whales — though experts say it'll do little to help.

    Researchers say the clashes typically follow a similar pattern, with a killer whale repeatedly ramming into the rudder of a ship, often until it breaks and the boat is stranded. Most of the time, the ships are able to escape with minimal damage, but several boats have sunk.

    While the so-called orca "attacks" may appear violent, marine biologists have said it's unlikely the encounters are actually malicious. Several experts told Business Insider last year that the orcas are probably just playing.

    Andrew Trites, director of the Marine Mammal Research Unit at the University of British Columbia in Canada, said ramming into the boats may simply be a "playful activity that's gotten way out of hand."

    Researchers have also said the killer whales may be learning the behavior from each other through simple imitation.

    Read the original article on Business Insider

  • An ancient coin collection worth $72 million is headed to auction after 100 years of secrecy

    A man holds a gold coin up to the camera
    Vicken Yegparian, vice president of numismatics, Stack's Bowers Galleries, holds a golden coin that is part of L. E. Bruun's collection.

    James Brooks

    • A legendary Danish coin collection will go up for sale later this year after 100 years.
    • The auction house handling the sale says the collection is worth $72 million.
    • The tycoon who compiled the collection stipulated it could not be sold until 100 years after his death.

    One of the most valuable privately-owned coin collections is headed to auction later this year after spending more than a century shrouded in secrecy.

    The collection once belonged to Danish businessman and butter tycoon Lars Emil Bruun, who spent decades compiling the nearly 20,000 coins, bank notes, and medals that comprise the set. For over a century, the collection has been kept out of the public eye due to a stipulation in Bruun's will that forbade the coins from being sold until a century after his death in 1923 at 71.

    Emotionally impacted by the devastation of World War I, Bruun determined the collection should be kept as backup reserves for Denmark should a second war ravage Europe, The Washington Post reported.

    The collection in total is estimated to be worth up to $72 million, making it the most valuable coin collection ever to go to sale, according to Stack's Bowers, the New York rare coin dealer and auction house overseeing the sale.

    The proceeds from the sales will go to Bruun's heirs. At least one of Bruun's descendants was involved in an effort to negotiate a sale of the coins to a museum in Denmark before the required century of waiting was up, but Danish authorities ultimately shut down the sale, citing the businessman's will, The Post reported.

    Bruun began collecting coins as a boy in the 1850s and 1860s, long before he made millions exporting butter to England and other countries, according to The Associated Press. His vast wealth allowed him to continue pursuing his coin hobby in later years. Bruun initially kept his collection at Frederiksborg Castle, the former royal residence located north of Copenhagen, but it was later moved to the Danish Central Bank, per The Post.

    Since 2011, however, the collection has lived in a secret location of which even coin enthusiasts are in the dark.

    "When I first heard about the collection, I was in disbelief," Vicken Yegparian, vice president of numismatics at Stack's Bowers Galleries, told The AP, calling the collection "the best open secret ever."

    The National Museum of Denmark got first dibs on the collection, ultimately snagging seven rare coins, including six gold and one silver, that were minted for $1.1 million, according to the outlet.

    "We chose coins that were unique. They are described in literature as the only existing specimen of this kind," Helle Horsnaes, senior researcher at Denmark's National Museum, told The AP.

    The sales are set to begin this fall and could take anywhere from three to five years, according to Stack's Bowers.

    Some pieces in the collection could go for as cheap as $50, while others could fetch $1 million, Yegparian told The AP.

    Read the original article on Business Insider

  • BHP share price slides amid no deal on ‘compelling opportunity’

    Miner and company person analysing results of a mining company.

    The BHP Group Ltd (ASX: BHP) share price is in the red today.

    Shares in the S&P/ASX 200 Index (ASX: XJO) mining giant closed yesterday trading for $43.25. In morning trade on Tuesday, shares are swapping hands for $43.07 apiece, down 0.4%.

    For some context, the ASX 200 is down 0.1% at this same time.

    This comes as investors digest the news that BHP returned with an improved takeover offer for Anglo American (LSE: AAL) last week. And that the sweetened offer was rejected by Anglo American’s board overnight.

    Here’s what’s happening.

    BHP share price slips as sweetened takeover deal rebuffed

    As a quick recap, BHP announced it had made a non-binding offer to acquire Anglo American on 26 April for an all scrip offer valued at approximately AU$60 billion.

    Interestingly, the BHP share price closed down 4.6% on the day.

    BHP is looking to expand its copper footprint. And copper represents 30% of Anglo American’s total production. If BHP were to acquire Anglo, it would become the world’s top copper producer.

    Anglo American’s board rejected BHP’s offer on 29 April, with chairman Stuart Chambers saying the bid significantly undervalued the company and its growth potential.

    Which brings us to the improved offer from BHP, which values the copper miner at 34 billion pounds (AU$64 billion).

    But the Anglo board clearly feels this remains too little.

    Commenting on the improved takeover offer, Chambers said, “The latest proposal from BHP again fails to recognise the value inherent in Anglo American.”

    Mike Henry responds

    This morning BHP responded to the rejection of its improved offer, stating, “BHP continues to believe that a combination of the two businesses would deliver significant value for all shareholders.”

    Commenting on the rejection that’s seeing the BHP share price dip this morning, CEO Mike Henry said, “BHP put forward a revised proposal to the Anglo American Board that we strongly believe would be a win-win for BHP and Anglo American shareholders. We are disappointed that this second proposal has been rejected.”

    Henry added:

    BHP and Anglo American are a strategic fit and the combination is a unique and compelling opportunity to unlock significant synergies by bringing together two highly complementary, world class businesses.

    The combined business would have a leading portfolio of high-quality assets in copper, potash, iron ore and metallurgical coal and BHP would bring its track record of operational excellence to maximise returns from these high-quality assets…

    The combination is consistent with BHP’s strategy and the revised proposal is underpinned by a focus on delivering long term fundamental value.

    The BHP share price is down 15% so far in 2024.

    The post BHP share price slides amid no deal on ‘compelling opportunity’ appeared first on The Motley Fool Australia.

    Wondering where you should invest $1,000 right now?

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes could be the ‘five best ASX stocks’ for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now…

    See The 5 Stocks
    *Returns as of 5 May 2024

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    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.

  • How ASX growth shares can become top dividend stocks

    Man holding Australian dollar notes, symbolising dividends.

    ASX growth shares aren’t known for their dividends, but I’m going to tell you how growing businesses could become great options for passive income.

    Investors may think of blue-chip names like ANZ Group Holdings Ltd (ASX: ANZ) and Rio Tinto Ltd (ASX: RIO) for income because of their high dividend yield. However, the dividends usually don’t grow at a strong compound annual growth rate (CAGR).

    According to Commsec, in FY24, ANZ is predicted to pay a grossed-up dividend yield of 8.4% and Rio Tinto is predicted to pay a grossed-up dividend yield of 7.5%.

    I will show you how smaller, growing businesses can become very compelling picks for big dividends. However, keep in mind that not every growth stock turns into a major dividend success.

    The strength of compounding

    The dividends of some ASX large-cap shares have gone sideways, or even downward over the past decade. At the current share price, the 2014 payout from ANZ represents a grossed-up dividend yield of 9%. It’s lower now than it was then.

    There are a number of ASX growth shares that have grown their dividends substantially over the past decade, such as TechnologyOne Ltd (ASX: TNE), REA Group Limited (ASX: REA), Lovisa Holdings Ltd (ASX: LOV) and Johns Lyng Group Ltd (ASX: JLG). It’s thanks to the power of their compounding.

    Profits generated pay for dividends. If a business can grow its profit, then the dividend can grow too, assuming the company maintains (or increases) its dividend payout ratio.

    Smaller ASX growth shares are capable of scaling their profit significantly over the long term, particularly if they expand overseas. If the dividend keeps growing at the same pace as profit, the dividend payout can eventually become impressive on that original cost base.

    The TechnologyOne dividend payout per share increased by around 250% between FY13 and FY23. The FY23 payout represents a grossed-up dividend yield of around 17% compared to the TechnologyOne share price at the start of 2013.

    The REA Group dividend payout per share has increased by approximately 200% comparing the last 12 months of dividends to the FY14 payout. The last two dividends from REA Group represent a grossed-up dividend yield of over 13% compared to the REA Group share price at the start of 2013.

    And there has been excellent capital growth by these two stocks in that time.

    Lovisa and Johns Lyng haven’t been paying dividends as long as TechnologyOne and REA Group, but they already have an impressive longer-term growth history. I’m backing them for longer-term success.

    Where I’d invest for long-term dividend growth

    I wouldn’t pick TechnologyOne and REA Group today for long-term dividends – their valuations are much higher today than a decade ago, and the profit growth rate will probably be slower because it’s harder to keep growing at a fast pace the bigger a business becomes.

    I’m a fan of the international growth outlooks of both Lovisa and Johns Lyng (and I’m a shareholder in both). In a decade from now, I think their payouts could be a lot bigger, particularly if they can both execute well on the US growth plans.

    Other dividend payers I’d keep my eye on include Collins Foods Ltd (ASX: CKF), Corporate Travel Management Ltd (ASX: CTD) and Step One Clothing Ltd (ASX: STP).

    The post How ASX growth shares can become top dividend stocks appeared first on The Motley Fool Australia.

    Wondering where you should invest $1,000 right now?

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes could be the ‘five best ASX stocks’ for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now…

    See The 5 Stocks
    *Returns as of 5 May 2024

    More reading

    Motley Fool contributor Tristan Harrison has positions in Collins Foods, Johns Lyng Group, and Lovisa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Corporate Travel Management, Johns Lyng Group, Lovisa, REA Group, and Technology One. The Motley Fool Australia has positions in and has recommended Corporate Travel Management. The Motley Fool Australia has recommended Collins Foods, Johns Lyng Group, Lovisa, 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.

  • Get paid huge amounts of cash to own these ASX dividend shares

    Man holding out $50 and $100 notes in his hands, symbolising ex dividend.

    Owning ASX dividend shares can be a very rewarding experience – receiving cash every year for very little effort sounds like a good life.

    A big dividend yield alone is not enough; in my opinion, there should also be a good chance of long-term dividend growth. That’s because it’s useful to protect against inflation so the value of the dividend dollars isn’t being eroded. Plus, if the dividend is growing then it’s obviously not being cut. Dividend stability is usually an important factor to me.

    Dividend growth is not guaranteed (in FY24 or any year), but over the long term, I think these two ASX dividend shares are good options for big yields.

    Universal Store Holdings Ltd (ASX: UNI)

    This retailing business owns a number of premium youth fashion brands, including Universal Store, THRILLS, Worship and Perfect Stranger. It currently operates 100 physical stores across Australia.

    The business has been growing Perfect Stranger as a separate business rather than selling through Universal Store locations. In the FY24 first-half result, Perfect Stranger sales soared 59.7% to $6.6 million. In the HY24 period, the ASX share opened six new stores, with three new Perfect Stranger stores and two Universal Stores.

    Universal Store has done a good job of growing its dividend every year since it first started paying one in 2021.

    I think the ASX dividend share can keep growing the profit and dividend if its existing stores collectively deliver rising sales over time while opening new stores in good locations.

    According to the estimate on Commsec, the business is projected to pay a grossed-up dividend yield of 6.6% in FY24 and 8.25% in FY26.

    Metcash Ltd (ASX: MTS)

    This business supplies a large number of independent stores around Australia including IGA, Foodland, Thirsty Camel, Cellarbrations, The Bottle-O, IGA Liquor, and Porters Liquor. It also owns a number of hardware businesses, including Mitre 10, Home Timber & Hardware, Total Tools and more.

    Everyone needs to eat food, and lots of people drink liquor, so in my view, the business has a lot of defensive earnings built into it.

    Australia’s population keeps growing which is a useful tailwind for the hardware earnings – it means more dwellings are needed, plus more potential hardware work in the future from DIY projects and renovations.

    The ASX dividend share has used acquisitions to diversify and boost its earnings, with Total Tools, Superior Food (food distribution to businesses like restaurants), Bianco Construction Supplies and Alpine Truss being some of the latest deals.

    It has a dividend payout ratio of 70% of underlying net profit after tax, which I think is a good balance between rewarding shareholders and retaining some profit to invest in the business.

    According to Commsec, it could pay a grossed-up dividend yield of 7.4% in FY24 and 8.2% in FY26.

    The post Get paid huge amounts of cash to own these ASX dividend shares appeared first on The Motley Fool Australia.

    Wondering where you should invest $1,000 right now?

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes could be the ‘five best ASX stocks’ for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now…

    See The 5 Stocks
    *Returns as of 5 May 2024

    More reading

    Motley Fool contributor Tristan Harrison has positions in Metcash. 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 Metcash. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

  • 3 ASX shares I’d buy for instant diversification

    Two funeral workers with a laptop surrounded by cofins.

    If we look at the ASX share market, around half of the weighting consists of ASX bank shares and ASX mining shares. Therefore, I think it could be a good idea to diversify by investing in different industries.

    Ideally, we want to choose investments that can diversify and grow. I don’t think investing in something with a high chance of not delivering any long-term growth is ideal. Hence, that’s why I like the potential of the below three ASX shares.

    Propel Funeral Partners Ltd (ASX: PFP)

    Propel is the second-largest funeral operator in Australia and New Zealand. It’s a morbid industry, but it’s a necessary service. Indeed, as the saying goes, there are two things certain in life – death and taxes.

    The company describes how a “death boom” is expected in the next two decades. The number of deaths in Australia is expected to grow at a compound annual growth rate (CAGR) of 2.5% between 2024 to 2030 and then 2.9% between 2031 to 2040.

    Propel’s average revenue per funeral continues to grow – in the first half of FY24, it saw a 4.5% year-over-year increase, driven by inflation. The average revenue per funeral has increased every year since FY14, at a CAGR of around 3.1%.

    Revenue is growing at a fast rate organically, and the company is also regularly making acquisitions to expand geographically.

    HY24 revenue was up 22.8% and operating earnings before interest, tax, depreciation and amortisation (EBITDA) increased 18.5%.

    In the long-term, this business could make stronger profits with Australia’s growing and ageing population.

    Corporate Travel Management Ltd (ASX: CTD)

    This ASX share describes itself as a leader in business travel management services in Australia, New Zealand and beyond. It also has a presence in North America, Asia and Europe.

    It has done a good job of growing its market share over the years, partly due to its very high client retention rate of 97%. The return of travel after COVID-19 has been very beneficial for its earnings.

    The business has a goal of delivering revenue growth of at least 10% per annum over the next five years, partly by winning new clients. Any acquisitions would be an extra. It’s aiming to grow its EBITDA by an average of 15% per annum in the next five years.

    Corporate Travel Management is aiming to maintain a 50% dividend payout ratio, invest in high-performing projects, use excess cash for share buybacks, and make acquisitions.

    According to Commsec, the Corporate Travel Management share price is valued at under 13x FY26’s estimated earnings.

    VanEck MSCI International Quality ETF (ASX: QUAL)

    This ASX exchange-traded fund (ETF) is all about investing in high-quality global shares that score well on a few different quality metrics – high return on equity (ROE), earnings stability and low financial leverage. When you combine those metrics, you’re left with a group of strong businesses.

    In total, this fund is invested in 300 businesses, so that’s more diversification (in terms of the number of stocks) than the S&P/ASX 200 Index (ASX: XJO).

    Banking and mining make up half of the ASX but account for less than 10% of this fund. Instead, it has large allocations to stocks like Nvidia, Microsoft, Meta Platforms, Apple, Eli Lilly, Alphabet, Novo Nordisk and Visa.

    The QUAL ETF has performed well over the long term, and I’m optimistic it can beat the ASX 200 share index over time because of the screening process for quality.

    The post 3 ASX shares I’d buy for instant diversification appeared first on The Motley Fool Australia.

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    Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. 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 Alphabet, Apple, Corporate Travel Management, Meta Platforms, Microsoft, Nvidia, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Novo Nordisk and has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has positions in and has recommended Corporate Travel Management. The Motley Fool Australia has recommended Alphabet, Apple, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

  • Both of these excellent ASX ETFs are on my buy list

    Businessman at the beach building a wall around his sandcastle, signifying protecting his business.

    I love owning good investments in my portfolio. There are great ASX shares, but there are plenty of compelling businesses outside of the ASX too. My portfolio is quite focused on ASX shares because that’s where I spend my time researching.

    But it’d be good for me to get more diversification without necessarily reducing my returns. That’s where exchange-traded funds (ETFs) come in. Good ETFs can provide diversification as well as solid returns.

    The two ETFs I’m going to discuss below offer quality and exposure to different industries that largely aren’t available in Australia.

    VanEck MSCI International Quality ETF (ASX: QUAL)

    The QUAL ETF owns a portfolio of 300 global businesses that rank well on quality metrics.

    Compared to the ASX, which is weighted to ASX bank shares and ASX mining shares, which largely make their profit in Australia (and New Zealand), this ASX ETF offers a much better spread of investments.

    It does have the biggest weighting to IT (with a 33.8% allocation), which I think is a good thing because that’s usually where good returns can often be found due to the strong economics of software. Four other sectors have a weighting of more than 9%  – healthcare (18.2%), industrials (12.7%), communication services (10.2%) and consumer staples (9.3%).

    Geographic diversification is also good. The portfolio includes several countries with a weighting of more than 1%, including the US (75.2%), Switzerland (5%), the UK (3.7%), Denmark (3.2%), Japan (3%), the Netherlands (3%), France (2%), and Canada (1.1%).

    But, I don’t just want diversification for the sake of it if it were to reduce my returns materially. This ASX ETF only invests in businesses that score well on having a high return on equity (ROE), earnings stability, and low financial leverage.

    In other words, it makes good profit for shareholders, the profit doesn’t usually experience sizeable declines, and the balance sheet is in good shape.

    Past performance is not a guarantee of future performance, but the quality focus has led the QUAL ETF to deliver an average return per annum of 14.9% over the three years to April 2024.

    VanEck Morningstar Wide Moat ETF (ASX: MOAT)

    Morningstar analysts choose the MOAT ETF’s portfolio, which looks at US companies with strong and durable economic moats or competitive advantages.

    Competitive advantages can come in many different forms, such as patents, brand power, network effects, cost advantages and switching costs. This ASX ETF is targeting businesses where the competitive advantage is expected to almost certainly endure for the next decade or two.

    There’s quite a mixture of different businesses at the top of the holdings, including Alphabet, International Flavors & Fragrances, Teradyne and Rtx (which have a weighting of between 3.1% and 2.9%). The smallest position in the portfolio has a weighting of 1%.

    The sector allocation within this ASX ETF can change as the investments shift, but at the moment, there are five industries with a double-digit weighting – healthcare (20.8%), industrials (17.9%), IT (15%), financials (14.3%) and consumer staples (11.6%). I like the mixture of businesses here.

    Since its inception in June 2015, the MOAT ETF has delivered an average annual return of 15.6%.

    I think both ASX ETFs can play a good part in my portfolio, and there’s a good chance I’ll own at least one of them by the end of 2024.

    The post Both of these excellent ASX ETFs are on my buy list appeared first on The Motley Fool Australia.

    Wondering where you should invest $1,000 right now?

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes could be the ‘five best ASX stocks’ for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now…

    See The 5 Stocks
    *Returns as of 5 May 2024

    More reading

    Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. 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 Alphabet. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended RTX and Teradyne. The Motley Fool Australia has recommended Alphabet and VanEck Morningstar Wide Moat ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.