Category: Stock Market

ASX growth shares could be the best way to invest to produce market-beating returns. Businesses that are compounding at a strong rate can lead to good wealth creation because of how they can grow to larger and larger financial numbers.

Australia is a great country to live in and do business in. But it’s the investments that give us exposure to international growth that can do particularly well over time because the US and other countries have much bigger populations and economies than Australia.

With that in mind, below are three ASX growth shares I really like, which is why I’m invested in two of them. If I had $7,000 to invest today, I’d happily split it between these three names.

Lovisa Holdings Ltd (ASX: LOV)

Lovisa is a leading retailer of affordable jewellery with a network of stores around the world.

The business is opening stores across the world at a very fast pace, rapidly diversifying away from Australia. In FY23, the business grew its store network by 27%, or 172 stores, to 801 which included an extra 72 stores in the US to reach 190 stores.

Lovisa earns good margins at each of its stores, and it’s quite cheap for the business to open new stores. Despite the cost of opening all of those new stores and entering new countries, the business was able to grow FY23 net profit after tax (NPAT) by 20.1% (on a 52-week basis) to $68 million.

It has recently entered markets like Mexico, Canada, Hong Kong, China, Spain and Vietnam. Added to other markets like Germany, the UK and the US, Lovisa still has plenty of growth potential ahead. I think it can double its store count over the next five years.

According to the projection on Commsec, the Lovisa share price is valued at 20 times FY26’s estimated earnings.

Johns Lyng Group Ltd (ASX: JLG)

Johns Lyng is another one of my favourite S&P/ASX 200 Index (ASX: XJO) growth shares because it’s growing in a variety of different ways.

Its core offering is rebuilding and restoring buildings and contents after an insured event, including flooding, storms, fire and so on. The company’s main markets are Australia and the US.

The business is rapidly growing its earnings and capabilities in addressing catastrophes. In FY23, catastrophe revenue rose 125.3% to $371.3 million, helping total revenue grow 43.2% to $1.28 billion.

Johns Lyng is growing additional sources of earnings, which are defensive and recurring. It is acquiring body corp/strata service providers, as well as electrical, fire and compliance, testing and maintenance businesses (including Smoke Alarms Australia and Linkfire).

Its growing scale is delivering operating leverage, meaning profit is growing faster than revenue.

The US is a huge potential growth market, and it’s looking at expanding to other markets. It recently entered New Zealand and management has indicated there could be further geographic growth down the track.

According to Commsec, the ASX growth share is valued at 29 times FY24’s estimated earnings.

Vaneck Morningstar Wide Moat ETF (ASX: MOAT)

The exchange-traded fund (ETF) is one of the most exciting ETFs in my mind.

It invests in (US) shares that, in Morningstar’s eyes, have strong competitive advantages that are expected to almost certainly endure for the next decade and more likely than not for two decades. In other words, these businesses need to have long-term economic moats that are hard for competitors to challenge.

The ETF only invests in these businesses when they’re at a good price, compared to what Morningstar thinks they’re worth.

That investment strategy has seen the MOAT ETF deliver net investment returns in the teens over the long term, though this isn’t guaranteed to continue.  

The post The ultimate ASX growth shares I’d buy with $7,000 right now appeared first on The Motley Fool Australia.

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More reading

• Buy and hold these ASX dividend stocks for a decade
• ASX passive income seekers: Invest $10,000 for $520 in monthly income
• Buying ASX retail shares? You’ll want to see these numbers
• 3 excellent ASX ETFs to buy and hold in February
• Why I think Lovisa stock is an amazing ASX 200 buy for both dividends and growth

Motley Fool contributor Tristan Harrison has positions in Johns Lyng Group and Lovisa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Johns Lyng Group and Lovisa. The Motley Fool Australia has recommended Johns Lyng Group, Lovisa, 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.

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The great thing about exchange-traded funds (ETFs) is that they cater to all investment groups.

Whether you’re a growth investor or an income-focused investor, there’s something out there for you.

Let’s now take a look at two ASX ETFs that could be good options for these investors.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

If you’re an income investor, then you may want to look at the Vanguard Australian Shares High Yield ETF.

It allows you to instantly build a portfolio filled with many of the best ASX dividend shares on the Australian share market.

And it does this with diversity in mind. In order to stop you from owning purely banks and miners, Vanguard limits how much it invests in any particular industry or company.

Among its ~70 holdings are BHP Group Ltd (ASX: BHP), Coles Group Ltd (ASX: COL), Commonwealth Bank of Australia (ASX: CBA), Transurban Group (ASX: TCL), and Wesfarmers Ltd (ASX: WES).

The ETF currently trades with a dividend yield of 5.1%.

BetaShares Global Cybersecurity ETF (ASX: HACK)

Whereas if you’re a growth investor you might want to check out the BetaShares Global Cybersecurity ETF.

This ETF gives investors access to the rapidly growing companies that are leading the way in the global cybersecurity sector.

With cyberattacks continuing to increase and cybersecurity becoming more and more important, the sector has been tipped to grow materially in the future.

For example, a recent McKinsey survey found that the total opportunity amounts to a massive US$1.5 trillion to US$2.0 trillion addressable market.

And while it doesn’t think the “market will reach such a size anytime soon”, it demonstrates how companies in the sector could have very long growth runways.

Among the ETF’s holdings are leaders such as Accenture, Cloudflare, Crowdstrike, Okta, and Palo Alto Networks.

The post Buy these fantastic ASX ETFs for passive income and growth appeared first on The Motley Fool Australia.

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More reading

• Looking for growth? I’d buy these 2 ASX ETFs
• How I’d create investment cash flow in retirement from ASX ETFs
• 5 excellent ASX ETFs to buy when the market reopens
• Could AI be a boon for this ASX ETF?
• 2 excellent ASX ETFs I’d buy for diversification and growth

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 Accenture Plc, BetaShares Global Cybersecurity ETF, Cloudflare, CrowdStrike, Okta, Palo Alto Networks, Transurban Group, and Wesfarmers. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2025 $290 calls on Accenture Plc and short January 2025 $310 calls on Accenture Plc. The Motley Fool Australia has positions in and has recommended BetaShares Global Cybersecurity ETF, Coles Group, and Wesfarmers. The Motley Fool Australia has recommended CrowdStrike, Okta, 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.

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The S&P/ASX 200 Index (ASX: XJO) has been enjoying a terrific run, closing in the green each of the past eight trading days.

Yesterday’s 1.1% gain saw the benchmark index close at a record high of 7,680.70, knocking down the prior all-time closing high of 7,628.9 points. That one was set way back on 13 August 2021.

The string of gains put the index up an impressive 4.6% since 18 January.

Which brings us to our headline question.

Why is the ASX 200 taking a tumble today?

What’s pressuring the ASX 200 on Thursday?

While nothing has inherently changed for the worse for the vast majority of the 200 companies listed on the ASX 200 since yesterday, the benchmark index is down 0.8% in morning trade.

Atop some potential profit-taking post-Wednesday’s record close, the biggest headwind dragging on the Aussie markets is blowing out of the United States.

Yesterday (overnight Aussie time), US Federal Reserve chair Jerome Powell threw cold water on investor hopes for a March interest rate cut from the world’s most influential central bank.

That means the official US rate is likely to remain at the current 22-year high 5.25% to 5.50% target range for a while longer yet.

Investors reacted by hitting the sell button, sending the S&P 500 (INDEXSP: .INX) to close down 1.6%. The tech-heavy Nasdaq Composite (INDEXNASDAQ: .IXIC) fared even worse, closing down 2.2%.

Many tech stocks are priced with future earnings growth in mind, which leaves them particularly sensitive to interest rates.

We’re seeing the same thing here in Australia today.

The S&P/ASX All Technology Index (ASX: XTX) – which also contains smaller tech stocks outside of the ASX 200 – is down 1.1 % at the time of writing.

Why is the Federal Reserve unlikely to cut interest rates in March?

US Fed officials revealed yesterday that they’re not yet convinced they have the inflation genie securely back inside its bottle.

The Fed’s statement noted that it doesn’t “expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%”.

Powell did say that Fed officials believe the benchmark rate is “likely at its peak for this tightening cycle”.

But he underlined that rate cuts may be some way off, adding “Based on the meeting today, I would tell you that I don’t think it’s likely that the committee will reach a level of confidence by the time of the March meeting.”

And with US stocks diving on those words, the ASX 200 is following suit today.

Commenting on the market’s reaction to Powell’s rather hawkish words, Oscar Munoz, macro strategist at TD Securities said (quoted by Bloomberg), “If stock bulls expected a rate cut in March, Powell seems to have closed the door on that.”

Greg McBride, chief financial analyst at Bankrate added:

The Federal Reserve is getting closer to the first interest rate cut, but we’re not there yet. Inflation has come down faster than anticipated, but whether or not this can be sustained is central to the Fed’s decision about when to begin cutting interest rates…

Interest rates took the elevator going up – but are going to take the stairs coming down.

The takeaway for ASX 200 investors here is patience.

Remember, the benchmark index notched new records yesterday. And whether US and Aussie interest rates begin to come down this month, next month, or not for six months or more, come down they will.

And eventually, the cycle will begin all over again.

The post After 8 days of gains and a record high why is the ASX 200 tumbling today? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Thursday
• These were the best performers on the ASX 200 in January
• Here are the top 10 ASX 200 shares today
• 3 big questions about the Australian stock market in 2024
• Big ASX 200 news! Aussie shares just reached a new record high

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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The rage for artificial intelligence (AI) stocks is showing no signs of cooling off. That’s why Microsoft (NASDAQ: MSFT) management made sure to mention AI tech prominently in both the press release and during the conference call detailing its fiscal second quarter of 2024 earnings. 

Those results, divulged just after market hours on Tuesday, beat analyst estimates and featured some impressive numbers. And while AI certainly played a part in that, it was actually another set of offerings from the tech giant that really gave its quarter some muscle.

No cloudy skies with the cloud

Microsoft’s second frame of the fiscal year saw the company book slightly over $62 billion in revenue, which was a sturdy 18% improvement over the same quarter of fiscal 2023 and topped the company’s guidance of $60 billion to $61 billion. Not to be outdone, non-GAAP (adjusted) net income advanced by 26% year over year to hit nearly $22 billion ($2.93 per share).

Analyst expectations for the quarter were relatively modest. On average, they were expecting the tech giant to earn slightly over $61 billion on the top line, and post a per-share, adjusted net income figure of $2.78.

Microsoft posted estimate-beating quarters throughout calendar 2023, but the rise in its shares was due more to its association with top AI app developer OpenAI. Microsoft is a major investor in — and partner of — the company, which is the entity behind the popular ChatGPT app. Microsoft has assertively incorporated OpenAI functionalities into more than a few of its offerings, including the Office software suite.

In the earnings release, the only quote Microsoft attributed to its CEO Satya Nadella was about, yes, AI. The company’s leader briefly enthused about the technology, saying that by applying it at scale, it’s helping to gain new clients and improve productivity throughout its operations.

What didn’t get as much attention, and probably should have, was Microsoft’s cloud computing products and services. The company is the No. 2 provider of such offerings — behind Amazon‘s mighty Amazon Web Services (AWS) — and is doing well in drawing fresh revenue from this source.

During the quarter, the company’s Intelligent Cloud business segment saw its revenue balloon by 20% year over year to nearly $26 billion. Inside that grouping, the still-hot Azure and other cloud services saw their collective take rise at a 30% clip, outpacing the analyst expectations of under 28%.

The AI and cloud combination is already potent

Even if AI — still a relatively young technology — wasn’t a mighty driver of Microsoft’s growth for the quarter, it still made a difference. The company said it now has about 53,000 clients for Azure AI, its anchor cloud-based AI platform. Nadella said that one-third of that figure comprises customers new to Azure within the past year.

This portends very well for Microsoft’s future. However, judging by the market’s rather tepid reaction to the quarterly results — the stock was trading slightly down after hours as of this writing — investors haven’t yet fully considered this potential. So even though the company’s shares zoomed higher in 2023, in this year and beyond, they can certainly hit even loftier heights. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Yes, Microsoft is a star AI stock, but this is what really powered its solid second-quarter results appeared first on The Motley Fool Australia.

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More reading

• Two giants of the Nasdaq just reported their results. Did they smash expectations?
• 3 things ASX investors should watch this week
• Here’s how the ASX 200 market sectors stacked up this week
• Better AI stock: Microsoft vs. Amazon
• Which Nasdaq company just overtook Apple as the world’s largest by market cap?

Eric Volkman 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 Microsoft. 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.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Shares of Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) were falling today after the tech giant reported its fourth-quarter and full-year 2023 results. Alphabet beat analyst estimates on the top and bottom lines in its fourth quarter, but its ad revenue was a bit short of expectations. The sell-off also came after the stock jumped more than 50% in 2023, a sign that investors may believe it had become overheated.

As of 1:11 p.m. ET, shares were down 6.6%.

The ad biz is recovering, but not fast enough

Alphabet reported 13% revenue growth to $86.3 billion, which beat expectations of $85.3 billion. Operating income jumped 30% to $23.7 billion as its operating margin expanded from 24% to 27%.

On the bottom line, earnings per share jumped from $1.05 to $1.64, aided by accounting gains on its equity securities. That result topped the consensus for $1.59.

However, investors seemed to zero in on the ad business, the source of the majority of its profits, where revenue grew just 11% to $65.5 billion due to a decline in its Google Network segment, which shows ads on other websites. Analysts had expected ad revenue to come in at $66.1 billion.

Elsewhere, Google Cloud continued to show strength with revenue up 26% to $9.2 billion, and it reported operating income of $864 million, up by more than $1 billion from the quarter a year ago.

On the call, management talked up its recent artificial intelligence (AI) initiatives like Gemini, but offered little in the way of details on new products or businesses.

Should Alphabet investors be worried?

It’s hard to fault a company the size of Alphabet for only growing ad revenue by 11%, but the results will be more telling after investors see the performance of peers like Meta Platforms, which has been taking ad market share from Alphabet in recent quarters. Losing market share is generally a negative sign for any company, though Alphabet seems to be benefiting from the broader ad market recovery from the lull in 2022.

At this point, there’s little reason to sell the stock on yesterday’s report as its search and YouTube businesses still look solid, and its valuation looks substantially improved. However, investors should keep an eye on the ad business in future quarters to see if the current trend persists. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Alphabet stock was sliding today appeared first on The Motley Fool Australia.

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More reading

• Two giants of the Nasdaq just reported their results. Did they smash expectations?
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Jeremy Bowman has positions in Meta Platforms. 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. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Jeremy Bowman has positions in Meta Platforms. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet and Meta Platforms. The Motley Fool Australia has recommended Alphabet and Meta Platforms. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a number of broker notes this week.

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

Altium Limited (ASX: ALU)

According to a note out of Citi, its analysts have upgraded this electronic design company’s shares to a buy rating with an improved price target of $56.60. The broker is feeling very positive about the company’s outlook thanks to the Altium365 cloud platform. It believes the platform can increase Altium’s addressable market materially outside its existing user base. In addition, the broker sees artificial intelligence tailwinds that could boost revenue. The Altium share price is trading at $49.66 today.

Jumbo Interactive Ltd (ASX: JIN)

A note out of Morgan Stanley reveals that its analysts have retained their overweight rating and $19.20 price target on this digital lottery ticket seller’s shares. The broker believes that Jumbo will benefit greatly from recent Powerball jackpots. In addition, Morgan Stanley is tipping Jumbo as a company that could surprise to the upside during earnings season. The Jumbo share price is fetching $15.71 on Thursday.

Woolworths Group Ltd (ASX: WOW)

Analysts at Goldman Sachs have retained their conviction buy rating on this supermarket giant’s shares with a trimmed price target of $42.30. While the broker was disappointed with the company’s performance in New Zealand, it was pleased with a stronger than expected first half from its key Australian Food business. And with its shares still trading on earnings multiples lower than their five-year average, the broker sees it as a great time to buy. The Woolworths share price is trading at $36.01 this morning.

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

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More reading

• Beginner investors: 5 top Aussie stocks I’d buy for 2024
• How big could the 12-month return be on Woolworths shares?
• 5 things to watch on the ASX 200 on Tuesday
• Woolworths share price falls on $1.5b impairment news
• The pros and cons of buying Woolworths shares right now

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor James Mickleboro has positions in Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium, Goldman Sachs Group, and Jumbo Interactive. The Motley Fool Australia has recommended Jumbo Interactive. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Life360 Inc (ASX: 360) shares could be dirt cheap at current levels.

That’s the view of analysts at Goldman Sachs, which believes the ASX 200 tech stock’s “valuation is compelling.”

Particularly given how recent developments in the tech space could “drive structurally improved margin profile” for the location services technology company.

What is Goldman saying about this ASX 200 tech stock?

Goldman believes that recent changes to the Apple App Store could signal more substantial longer-term moves. It said:

We highlight within that the myriad regulatory and civil actions against the rules imposed on developers by the major platforms Apple and Google are gradually seeing fees reduced and restrictions eased. In January, both in the US and EU, Apple has made concessions including allowing for out-of-app payments and new commission fee structures.

Although the broker doesn’t expect this to have an immediate impact on the ASX 200 tech stock’s business, it could be a different story over the long term for the owner of the eponymous Life360 app. Goldman adds:

While likely immaterial to Life360 in the near-term, we believe these changes may signal the potential for more substantive commission reductions in the future. Given at present Life360 pays away ~20% of subscription revenue to the platforms, and starting off a low EBITDA base, any reduction in the effective commission rate would have a significant impact on Life360’s structural margin profile and earnings.

The broker has described the potential for lower commissions as a “free option” for investors. It said:

Our sensitivity analysis indicates that each 100bps reduction in the average platform commission could drive a +9%/+6% uplift to our FY24/25E Adj. EBITDA estimates. At current discounted valuation levels, we see lower commissions as effectively a free option that could provide meaningful earnings/valuation upside.

Compelling valuation

In light of the above and its belief that Life360 can grow materially already, the broker feels that its shares are cheap at current levels.

Goldman has a buy rating and $10.50 price target on the tech stock. This implies potential upside of 35% for investors over the next 12 months. It commented:

Life360’s valuation is compelling at 0.18x growth-adjusted EV/GP vs 0.41x/0.49x MP1/SDR, and 11x/19x FY25E EV/EBITDA pre/post stock comp (adj. for R&D capitalisation).

The post This rapidly growing ASX 200 tech stock’s “valuation is compelling” appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX 200 shares today
• Here are the top 10 ASX 200 shares today
• Here’s why these ASX 200 growth shares could be top buys
• How I’d invest $300 a month in ASX shares to target $22,000 annual passive income!

Motley Fool contributor James Mickleboro has positions in Life360. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Life360. 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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If you’ve got $15,000 to invest, using it to build a portfolio of passive income-generating ASX dividend shares is one of the best uses of your capital in my view.

ASX shares offer everyone the chance to build wealth in a highly effective way, whilst paying you passive income in the form of dividends.

But building a bulletproof portfolio of quality ASX dividend shares is easier said than done. So today, we’ll discuss five ASX shares that I think are all worthy of a $3,000 investment. Together, I think they will form the backbone of a bulletproof passive income portfolio.

Building a $15,000 passive income portfolio with 5 dividend shares

BHP Group Ltd (ASX: BHP)

First up is the ‘Big Australian’, BHP. BHP is one of the largest mining companies in the world, and specialises in iron ore, copper, metallurgical coal, nickel and potash. These are all commodities that the world needs to continue to develop and accommodate economic growth.

Large, mature and profitable commodity companies can be a useful hedge against inflation. They can also shower investors with dividends when commodity prices are at a high point of their cycle. BHP’s glory days of 2021 and 2022 have receded somewhat.

But this company is still a passive income heavyweight, offering a trailing, and fully franked, dividend yield of over 5.5% today.

National Australia Bank Ltd (ASX: NAB)

Next up we have an ASX 200 bank for our next passive income stock. Of course, the banks have all nurtured a well-deserved reputation as dividend monsters over the past few decades. That’s fair enough. All four of the big banks are strong, sound companies that enjoy several unique benefits as a result of their status as pillars of our economy.

But NAB is the pick of the bunch for me. It’s arguably an inferior business to that of the universally venerated Commonwealth Bank of Australia (ASX: CBA). However, NAB shares trade at a far more reasonable valuation at present, in my view. This also means that investors get a far larger dividend yield upfront. At present, that fully franked yield is sitting at just over 5.1%

Telstra Group Ltd (ASX: TLS)

Telstra is a favourite passive income payer for ASX investors. And for good reason. This telco, which is utterly dominant in its industry, has also been funding generous dividends for decades. I like the defensiveness and resilience that Telstra brings to a dividend portfolio – just think about what most Australians would give up before their phones and internet connections.

Telstra has not cut its dividend for a number of years now (including throughout the pandemic) and even gave investors a pay rise last year. At present, Telstra shares offer a fully-franked dividend yield of 4.21%.

Coles Group Ltd (ASX: COL)

Let’s turn to Coles Group. Coles is a business that has a highly prominent role in Australian society as the second-largest supermarket operator.

As a payer of passive dividend income, I like Coles as an investment for our $15,000 bulletproof portfolio for similar reasons to Telstra. Coles is a defensive company whose business tends to remain strong regardless of the economic weather. Whether inflation is high or low, or whether we’re in a boom or a recession, many of us are visiting Coles at least once a week.

I prefer Coles to Woolworths Group Ltd (ASX: WOW) for our portfolio as the dividends that Coles tends to pay out typically result in a higher yield for shareholders. Right now, Coles shares are trading with a fully-franked yield of 4.15%

Washington H. Soul Pattinson and Co Ltd (ASX: SOL)

Our final candidate for the $15,000 passive income portfolio is investment house Soul Patts. This company has a lot to offer investors. It runs a large, diversified portfolio made up of a variety of different assets on behalf of its shareholders. Most of those assets are stakes in large, mature ASX blue-chip shares.

This inherently offers investors a huge level of diversification, which is great news for our portfolio.

But Soul Patts is also a compelling investment in its own right. It has a decades-long history of delivering market-beating returns for investors for one. But it is also the only ASX share that can tell its investors that they have enjoyed a 23-year streak of annual dividend pay rises.

The dividend yield on Soul Patts shares is presently sitting at a fully franked yield of 2.53%. But considering this streak of dividend pay rises, I think Soul Patts is more than a worthy candidate for our portfolio’s final slot.

The post Got $15,000? How I’d invest for a bulletproof ASX passive-income portfolio appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in National Australia Bank, Telstra Group, 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 Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Coles Group, Telstra Group, and Washington H. Soul Pattinson and Company Limited. 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 banking sector exposure, then Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corp (ASX: WBC) shares are likely to have crossed your mind.

But which would be the better buy? Let’s see what analysts are saying.

Should you buy Westpac or CBA shares?

Firstly, it is worth highlighting that it is widely agreed that there is a gulf in quality between these banks.

CBA is regarded as Australia’s highest quality bank by some margin. So clearly, all else equal, you would want to own CBA ahead of others in the sector.

But the share market isn’t equal.

Because of its quality, CBA shares trade at a significant premium to the rest of the big four banks. Unfortunately, this means that getting hold of the bank’s shares at a fair price can be difficult.

For example, at present none of the major brokers have a buy rating on the shares of Australia’s largest bank.

The most bullish is UBS, which has a neutral rating and $105.00 price target. This still implies potential downside of almost 11% for investors over the next 12 months.

And while brokers aren’t overly enamoured with Westpac, there are a couple of brokers that are tipping Australia’s oldest bank as a buy.

One of those is Ord Minnett, which has an accumulate rating and $28.00 price target on Westpac’s shares.

Based on its current share price, this implies potential upside of almost 16% for investors between now and this time next year.

In addition, the broker is forecasting a fully franked $1.45 per share dividend in FY 2024. This equates to a 6% dividend yield and stretches the total potential return to approximately 22%.

Overall, at current prices, analysts appear to believe investors would be better buying Westpac shares over CBA shares.

The post Better buy: Westpac or CBA shares? appeared first on The Motley Fool Australia.

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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 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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It has been a really tough time for ASX lithium shares.

With the price of the battery making ingredient falling to low levels on oversupply concerns, many miners are having to take drastic action to conserve cash.

You only need to look at Sayona Mining Ltd (ASX: SYA) to see how bad it has become for some lithium miners.

Yesterday the company reported an average realised selling price of A$946 per dry metric tonne (dmt) and a unit operating cost of A$1,397 per dmt. This means it is losing A$450 every time it pulls a tonne of lithium out of the ground.

But one ASX lithium share that remains highly profitable is IGO Ltd (ASX: IGO).

And it is for this reason that Goldman Sachs has just reiterated its buy rating on the lithium miner’s shares.

‘Economics remain highly compelling’

According to the note, the broker has retained its buy rating on IGO’s shares with a reduced price target of $8.85.

Based on the current IGO share price of $7.56, this implies potential upside of 17% for investors over the next 12 months.

The broker is positive on IGO due to its Greenbushes operation. It notes that “Greenbushes economics remain highly compelling” despite current lithium prices. It adds:

Greenbushes is the lowest cost lithium asset in our coverage; Production growth more than offsets increasing strip ratio. […] We reiterate further Greenbushes expansion remains one of the most economically compelling brownfield lithium projects with a breakeven/incentive LT spodumene price of ~US$400-500/t, where the JV also retains significant optionality around extending/converting the TRP, while the resource likely underpins even further expansion (i.e. CGP5, subject to market conditions).

All in all, Goldman appears to believe that it would be a top option for anyone looking for ASX lithium shares to buy following recent weakness.

The post Buy this ASX lithium share with “highly compelling” economics 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 positions in and has recommended Goldman Sachs Group. 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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