Category: Stock Market

If you are hunting for some ASX 200 income stocks to buy in June, then read on.

That’s because listed below are three that analysts think could be in the buy zone right now.

Another positive is that they have also been tipped to provide great dividend yields. Here’s what you can expect from them:

Charter Hall Retail REIT (ASX: CQR)

The Charter Hall Retail REIT could be a great option for investors that are looking for an ASX 200 income stock to buy this month.

It is a property company that invests predominantly in supermarket anchored neighbourhood and sub-regional shopping centre markets.

Analysts at Citi are feeling positive about the company and its prospects. Particularly given its inflation-linked rental increases. The broker expects this to underpin dividends of 28 cents per share in both FY 2024 and FY 2025. Based on the current Charter Hall Retail REIT share price of $3.35, this will mean huge yields of 8.4%.

Citi currently has a buy rating and $4.00 price target on its shares. This implies potential upside of almost 20%.

Telstra Group Ltd (ASX: TLS)

Another ASX 200 income stock that has been tipped as a buy is Telstra. It is of course Australia’s largest telecommunications company with millions of mobile phone and broadband customers.

Goldman Sachs thinks income investors should be buying its shares at current levels. Particularly given how its analysts “believe the low risk earnings (and dividend) growth that Telstra is delivering across FY22-25, underpinned through its mobile business, is attractive.”

Goldman is expecting fully franked dividends of 18 cents per share in FY 2024 and then 18.5 cents per share in FY 2025. Based on the current Telstra share price of $3.56, this equates to yields of 5% and 5.2%, respectively.

Goldman currently has a buy rating and $4.25 price target on the ASX dividend stock. This suggests that upside of almost 20% is possible over the next 12 months.

Transurban Group (ASX: TCL)

Another ASX 200 income stock that could be a buy this month is Transurban.

It is an urban toll road company with assets in Australia and North America. In Australia, this includes the Cross City Tunnel, the Eastern Distributor, and Westlink M7. Whereas in North America, its roads include 95 Express Lanes and the A25.

The team at Citi is very positive on its outlook and is expecting some good dividend yields in the near term. It is forecasting dividends per share of 63.6 cents in FY 2024 and then 65.1 cents in FY 2025. Based on the current Transurban share price of $12.80, this will mean yields of 5% and 5.1%, respectively.

Citi has a buy rating and $15.50 price target on its shares. This implies potential upside of 21% for investors.

The post Telstra and these ASX 200 income stocks could be top buys this month appeared first on The Motley Fool Australia.

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• 3 ASX shares set for dividend increases this year
• Buy these ASX 200 dividend stocks in June for an income boost

Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 and Transurban Group. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

For investors that have a high risk tolerance, it could be worth considering some small cap ASX shares for your portfolio.

That’s because the returns on offer at the small side of the market can be material. But which small caps could offer a compelling risk/reward?

Listed below are two small caps that analysts at Morgans are bullish on right now. Here’s what they are saying about them:

AVITA Medical Inc (ASX: AVH)

AVITA Medical could be a small cap ASX share to buy. It is a regenerative medicine company with a focus on wound care management and skin restoration with its RECELL technology.

A new version of this technology was granted FDA approval recently, which bodes well for the future. Especially given its significant market opportunity across various treatment areas.

Commenting on its market opportunity, Morgans said:

AVH is a regenerative medicine company focusing on the acute wound care market. It has recently expanded its indication into full thickness skin defects and Vitiligo (US$5bn TAM). The expanded indication in full thickness skin defects has the required reimbursement in place and sales have started.

The broker also described the recent FDA approval as a significant milestone. It adds:

AVH has received FDA approval for its automated product, RECELL Go, for use in burns and full thickness skin defects. This approval marks a significant milestone for the company, with management expecting this device to increase adoption of the technology amongst clinicians. We have made no changes to our forecasts and recommendation.

Morgans has an add rating and $5.60 price target on its shares. Based on the current AVITA Medical share price of $2.86, this suggests that the company’s shares could rise 96%.

Tyro Payments Ltd (ASX: TYR)

Another ASX small cap share that could be in the buy zone according to Morgans is Tyro Payments.

It is a payments provider with approximately 70,000 merchants on its network. This makes it Australia’s fifth largest merchant acquiring bank by number of terminals in the market.

Morgans notes that its shares have been under pressure recently and believes this has created a buying opportunity for investors. It said:

TYR sold off heavily in 2023 affected by the broad pull back in technology stocks and overall concerns regarding its earnings trajectory. However, we believe FY24 will show significantly improved business momentum, importantly driven by a much greater focus on lifting overall profitability. TYR still trades at a significant discount to valuation.

Morgans has an add rating and $1.47 price target on its shares. Based on the current Tyro share price of 79 cents, this implies potential upside of 86% for investors.

The post Why these small cap ASX shares could rise 85%+ appeared first on The Motley Fool Australia.

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• 2 ASX shares to buy that are near 52-week lows
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• Why AVITA Medical, Catapult, Meridian Energy, and Telix shares are storming higher today
• Guess which All Ords ASX healthcare share just rocketed 19% on major FDA news

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 Avita Medical and Tyro Payments. The Motley Fool Australia has recommended Avita Medical and Tyro Payments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Investing in the ASX large-cap stocks can be rewarding, but knowing when to sell is crucial. Some of us use sell rules. Others go by changes in fundamentals. Some, via the stars.

With the ASX bustling in 2024, it’s a good time for investors to assess their portfolios. Today, I’m going to look at two large-cap ASX stocks: Bank of Queensland Ltd (ASX: BOQ) and Mineral Resources Ltd (ASX: MIN).

Here’s what brokers are saying about the 2 ASX large-caps in their recent notes.

Should you sell this ASX large-cap stock?

Bank of Queensland shares have struggled in 2024, having compressed by around 2% into the red at the time of writing.

The ASX large-cap stock currently has one of the highest trailing dividend yields of all the ASX 200 banking majors and boasts a 2.7% share of the Australian residential mortgage market.

Despite this, Goldman Sachs has a bearish outlook on BOQ shares. It rates the bank a sell based on foreseeable risk and valuation grounds. Its BOQ price target is $5.44 apiece, below the $5.98 per share the bank was trading at on Friday’s close.

The broker points out that Australian banks – including BOQ – no longer offer the robust returns on equity (ROE) they once did.

Back in 2015, Australian banking majors boasted “the second highest average ROE of global comparable banks…”. BOQ’s 9.25% projected returns on equity for FY 2026 also fall short of this mark.

While we believe the company’s transformation program a positive long-term strategy (aiming to deliver a lower cost to serve on the back of its digitisation efforts), we remain wary of both the high degree of execution risk and the potential for going over budget on investment spend (as has often been the case historically when banks undergo such large scale initiatives).

However, Goldman Sachs believes the high price-to-book (P/B) valuations aren’t sustainable given the underwhelming ROE and potential for lower returns moving forward.

Despite this view, BOQ’s current trailing dividend yield is 6.4%, which is attractive for income-focused investors, in my opinion. In fact, for the dividend-minded, I believe BOQ could offer compelling value.

Mineral Resources reiterated a sell

Goldman Sachs recently released a note on Mineral Resources highlighting several factors that investors should consider.

Despite the company’s impressive $1.3 billion Onslow Haul Road asset sale in June, which generated significant proceeds, Goldman Sachs maintains a cautious outlook on the ASX large-cap stock.

The broker points out that the current market price reflects long-run commodity prices about 20% higher than their estimates.

It also highlights that Mineral Resources trades at a multiple significantly above its peers, with a price-to-net asset value (NAV) ratio of 1.35x and a 17x forward EBITDA multiple. The peer group is priced at 8x forward EBITDA.

This valuation suggests that much of the company’s future growth is already priced in, leaving limited upside potential.

Furthermore, Goldman Sachs is concerned about the expected decline in lithium prices over the next couple of years. It expects lower spodumene prices going forward.

Our commodity team expect spodumene prices to average US$800/t and hydroxide at US$10,000/t (vs. spot c. US$1200/t and US$10,000/t) in 2H CY24 driven by our view of a market surplus over 2024-2025, and for the price to trade at or below marginal cost which we think will be set by Chinese integrated lepidolite producers.

The broker also forecasts low or negative free cash flow for the next two years, producing a free cash flow yield of negative 4% to negative 19%. As such, it values the miner at $47 per share, a 31.5% downside potential on the Mineral Resources share price of $68.63 at Friday’s close.

It’s not all negative sentiment on ASX large-cap stock, however. Analysts at Bell Potter rate Mineral Resources a buy. According to my colleague James, its diverse operations and growth outlook are two of Bell Potter’s themes.

The rating is “underpinned by MIN’s earnings diversification, strong insider ownership, clearly articulated strategies, expertise in contracting and internal growth options at Onslow as well as potential lithium expansions including into downstream”.

It values the company at $85.00 per share, almost double that of Goldman.

ASX large-cap shares on the block

Both BOQ and Mineral Resources present unique opportunities and risks. For BOQ, Goldman says the high valuation amidst underwhelming returns makes it a potential candidate for selling.

Meanwhile, Mineral Resources’ strategic asset sale offers have split hairs among brokers. Whilst Goldman rates it a sell, Bell Potter is bullish and sees it trading higher.

The difference in opinion highlights the importance of conducting your own due diligence.

The post Is it time to cash in these 2 ASX large-cap stocks? appeared first on The Motley Fool Australia.

More reading

• Mineral Resources shares race higher on $1.3b asset sale
• 5 things to watch on the ASX 200 on Thursday
• Bell Potter names the best ASX shares to buy in June
• Why you should sell CBA, Westpac, and Bank of Queensland shares in June
• 2 high-yield ASX shares I’d buy right now for dividends

Motley Fool contributor Zach Bristow 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.

It has been another busy week for Australia’s top brokers. This has led to the release of a number of broker notes.

Three broker buy ratings that you might want to know more about are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

IDP Education Ltd (ASX: IEL)

According to a note out of Goldman Sachs, its analysts have retained their buy rating on this language testing and student placement company’s shares with a trimmed price target of $21.75. Goldman notes that IDP Education released a market update last week which revealed that it is being negatively impacted by a more restrictive policy environment in its key destination countries. While the broker acknowledges that the trading update was soft, it believes it should help investors better frame the earnings base for FY 2025. And with Goldman forecasting IDP Education’s earnings to rebound in FY 2026, its analysts think that now could be a good time for patient investors to snap up its shares. The IDP Education share price ended Friday’s session at $15.33.

Lovisa Holdings Ltd (ASX: LOV)

A note out of Bell Potter reveals that its analysts have retained their buy rating and $36.00 price target on this fashion jewellery retailer’s shares. Bell Potter notes that Lovisa has announced that its highly regarded CEO, Victor Herrero, will be leaving next year. While the broker sees some leadership transition risk, it was pleased with his replacement John Cheston, who is the current CEO of Smiggle. It believes the new CEO appointment aligns well to drive the next leg of growth and lift the penetration of a global business built by Herrero. In addition, its analysts anticipate a smooth transition over the next 12 months and expect Cheston’s background to assist continued execution in Lovisa’s ~40 markets globally. The Lovisa share price was fetching $31.25 at Friday’s close.

Xero Ltd (ASX: XRO)

Analysts at Macquarie have retained their outperform rating and $180.70 price target on this cloud accounting platform provider’s shares. Macquarie notes that Xero has announced price increases and plan updates in the United Kingdom that will take place in September. The broker was pleased with the changes, which are mirroring those undertaken in the Australia market recently. Macquarie believes the new plans will support a higher average revenue per user metric in the UK market through the simplification of its offering and increased bundling. The Xero share price ended the week at $129.29.

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

More reading

• These ASX shares could rise 25% to 50%
• Here are the top 10 ASX 200 shares today
• Brokers name 3 ASX shares to buy now
• Why IDP Education, Novonix, PYC, and Regis Resources share are racing higher
• Goldman Sachs names 2 ASX 200 shares to buy now

Motley Fool contributor James Mickleboro has positions in Lovisa and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group, Idp Education, Lovisa, Macquarie Group, and Xero. The Motley Fool Australia has positions in and has recommended Macquarie Group and Xero. The Motley Fool Australia has recommended Lovisa. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Fortescue Ltd (ASX: FMG) shares may be best known for iron ore mining, but it has also been a commendable passive income stock in the last few years, thanks to the strength of the iron ore price.

With a market capitalisation of $75.03 billion, according to the ASX, it’s one of the largest miners in the world. This scale allows the business to deliver impressive profit margins compared to its smaller peers.

Interestingly, Fortescue shares usually trade on a relatively low price/earnings (P/E) ratio, partly because of how unpredictable the iron ore miner’s earnings are. The lower P/E ratio enables a higher dividend yield.

What is the Fortescue dividend yield?

The dividend yield is decided by a combination of a company’s dividend payout ratio and the P/E ratio.

In the FY24 half-year result, Fortescue’s dividend payout ratio was 65% of net profit after tax (NPAT). The company’s dividend policy is to pay out between 50% and 80% of underlying NPAT.

In my opinion, the next dividends are more important than the last ones declared because those old ones are history and not necessarily indicative of future payouts.

Broker UBS has projected owners of Fortescue shares could receive a dividend per share of $1.28 in FY25. At the current Fortescue share price, that would represent a grossed-up dividend yield of 7.5%, which is still quite high. This potential payout is lower than the predicted grossed-up dividend yield of 9.8% for FY24.

Owning 1,000 shares

Buying 1,000 Fortescue shares would cost more than $24,000. However, it would also potentially result in receiving $1,280 in dividend cash and grossed-up dividend income of $1,828 (when including the potential franking credits) for FY25.

If the iron ore price is stronger than expected, the net profit and dividend could be more significant than UBS predicted. However, if the iron ore price is weaker, it would hurt Fortescue’s dividends and profit.

As a miner, its production costs don’t typically change much month to month, so additional revenue (or weaker revenue) can lead to a significant change to net profit, which flows onto the dividend payments. Time will tell what happens next.

Fortescue share price snapshot

The chart below shows that the Fortescue share price is up around 20% in the past year. However, the ASX iron ore share has declined by approximately 17% in the year to date with the iron ore price falling from above US$140 per tonne at the start of the year to around US$107 per tonne now, according to Trading Economics.

The post If I buy 1,000 Fortescue shares, how much passive income will I receive? appeared first on The Motley Fool Australia.

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• How to earn $1,900 in passive income with just $10,000 in savings
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Motley Fool contributor Tristan Harrison has positions in Fortescue. 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.

Given we’re now well into the month of June, it’s inevitable that many Australians’ attentions will be turning to their tax returns. With individuals’ income tax returns due from 1 July, many of us will be looking forward to that annual windfall that often comes alongside a lodged tax return. However, many investors who own ASX shares might not be getting as much cash back as they might be entitled to.

If you own and invest in ASX shares, it immediately opens up some tax deduction doors that are not ordinarily open to your average Aussie. Understanding these doors and how you can use them to save a few extra dollars is vitally important to building your wealth using ASX shares.

So today, let’s discuss three investing deductions that you might not even be aware of today. A caveat, though. The deductions we’ll be discussing may not apply to you or your affairs. So make sure to double-check your claims with a licensed tax professional before you claim them from the Australian Taxation Office (ATO). Otherwise, you might get a nasty surprise.

Three tax deductions to claim if you own ASX shares in FY2024

Expenses arising from your investments

The general rule when it comes to tax deductions from investments like ASX shares is that any money you spend directly in the service of your portfolio is a deductible expense. If you use a computer or mobile phone to manage your portfolio, those expenses might be at least partially deductible.

You can also usually claim financial investment advice fees as a tax deduction if they relate to your ASX shares portfolio. Additionally, if you utilise a margin loan or other gearing strategy, any interest costs you might incur are deductible if the loan is for investment purposes.

Educational expenses

Many investors like to keep abreast of the current events in the financial world to help them invest appropriately and prudently. What you might not know is that any expenses you pay to further your investing portfolio are usually deductible.

Let’s say you choose to buy financial newspapers, investment magazines or online journals to pad out your financial knowledge. Chances are these will be at least partially tax deductible too. But only if you act on them and actually own ASX shares.

The tax perks of owning ASX shares

Investing in ASX shares isn’t a free lunch when it comes to paying taxes. Income that you receive in the form of dividends or distributions from ASX shares or exchange-traded funds (ETFs) is regarded as ordinary income by the ATO. These are taxed as income accordingly.

Likewise, if you buy a share and sell it for a profit down the track, those profits are counted as capital gains and are also taxed as income. However, if you buy an ASX share and hold it for longer than one year before selling it, you might be entitled to a 50% discount on those capital gains when declaring them for income. This can make the income that one earns from shares more attractive from a tax perspective.

Additionally, you probably know that most ASX dividend shares also pay out franking credits with their dividends. As we discussed earlier this week, franking credits can considerably boost the returns you receive from investing in ASX shares.

These credits, a reflection of the corporate tax already paid by a company, can be used as a tax deduction against all other income. So make sure that your tax return reflects the level of franking you are entitled to receive this year.

The post Own ASX shares? Here are 3 investing tax deductions you may not be aware of appeared first on The Motley Fool Australia.

More reading

• Buy and hold these ASX ETFs until 2034
• These ASX shares could rise 25% to 50%
• How to earn $1,900 in passive income with just $10,000 in savings
• 4 top quality ASX dividend shares to buy in June
• CSL shares can ‘absolutely’ head to $500: ASX expert

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 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.

If you want to make some long term investments but aren’t a fan of stock picking, then it could be worth considering exchange-traded funds (ETFs).

That’s because they allow investors to buy a large collection of shares through a single investment. This makes it easier to diversify a portfolio and reduces risk.

But which ASX ETFs could be great buy and hold options for investors right now? Let’s take a look at three funds that could be worth holding until at least 2023. They are as follows:

BetaShares Global Cybersecurity ETF (ASX: HACK)

The first ASX ETF that could be a great buy and hold option is th BetaShares Global Cybersecurity ETF. It provides investors with access to the leading players in the rapidly growing cybersecurity sector.

Betashares highlights that “an estimate of the total addressable market by McKinsey suggests that the cybersecurity market is $1.5-$2.0 trillion globally, and at best only 10% penetrated with a very long runway for growth.”

It also notes that “during the period 2024-2028, cybersecurity revenue is expected to grow at an annual rate of 10.6%, resulting in a total market size of $273.6 billion by 2028.”

This bodes well for the companies that are held by the BetaShares Global Cybersecurity ETF. This includes Accenture, Cisco, Crowdstrike, and Palo Alto Networks.

Betashares Global Cash Flow Kings ETF (ASX: CFLO)

Another ASX ETF that could be a great long term option is the Betashares Global Cash Flow Kings ETF. In fact, Betashares recently named it as one to consider.

It notes that companies that generate high levels of free cash flow have tended to outperform broad global equity benchmarks over the medium to long term.

The Betashares Global Cash Flow Kings ETF focuses on global companies that demonstrate strong and consistent free cash flow generation, growth of free cash flow, and relatively low levels of debt.

Among its holdings are tech giant Alphabet and retailer Costco.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

A final ASX ETF that could be a great buy and hold option is the Vanguard MSCI Index International Shares ETF.

This ETF gives investors exposure to approximately 1,500 of the world’s largest listed companies from major developed countries.

Vanguard highlights that investing internationally offers greater access to sectors such as technology and health care that aren’t as well represented in the Australian share market. Among the ETF’s largest holdings are giants from numerous industries such as Apple, Johnson & Johnson, JP Morgan, Nestle, and Visa.

The post Buy and hold these ASX ETFs until 2034 appeared first on The Motley Fool Australia.

More reading

• Top ASX shares to buy in June and hold for retirement
• Is the Vanguard MSCI Index International Shares ETF (VGS) a better buy for beginner investors or retirees?
• 1 highly diversified ASX AI share to buy now
• Buying ASX shares, rentvesting and co-ownership: How young Australians are achieving home ownership
• 5 ASX ETFs that could be great long-term buys

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. 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, Alphabet, Apple, BetaShares Global Cybersecurity ETF, Cisco Systems, Costco Wholesale, CrowdStrike, JPMorgan Chase, Palo Alto Networks, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Johnson & Johnson and Nestlé and 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. The Motley Fool Australia has recommended Alphabet, Apple, CrowdStrike, and Vanguard Msci Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The share market has historically delivered investors a return of 10% per annum.

While this is a great return, there are some ASX shares that have been tipped to rise significantly more than this over the next 12 months.

Let’s take a look at three ASX shares that analysts believe have market-beating potential:

Arcadium Lithium (ASX: LTM)

If you’re looking for exposure to the beaten down lithium industry then it could be worth checking out Arcadium Lithium.

That’s the view of analysts at Bell Potter, which see significant value in the lithium giant’s shares at current levels. It said:

LTM provides the largest, most diversified exposure to lithium in terms of mode of upstream production, asset locations, downstream processing and customer markets. It is a key large-cap leverage to lithium prices and sentiment, which we expect to improve over the medium term. The group has a strong balance sheet and growth portfolio.

Bell Potter has a buy rating and $9.50 price target on the ASX share. This implies potential upside of almost 50% for investors from current levels.

IDP Education Ltd (ASX: IEL)

Goldman Sachs is sticking with this language testing and student placement company after a disappointing trading update last week.

While it expects another tough year in FY 2025, it believes IDP Education’s growth will resume the following year. In light of this, it thinks that now could be the time for patient investors to load up. It said:

IEL remains well placed to capitalise as conditions normalise into FY26E, with IEL selectively investing for growth while SP competitors come under significant pressure. In our view the regulatory headwinds are cyclical, while structural SP growth can resume off the FY25E baseline.

Goldman has a buy rating and $21.75 price target on its shares. This suggests that upside of 42% is possible for investors over the next 12 months.

Universal Store Holdings Ltd (ASX: UNI)

A third ASX share that could be destined to deliver big returns is youth fashion retailer Universal Store.

Morgans is a big fan of the company and believes it has a very positive long term growth outlook. It said:

Our positive view about the fundamental long-term appeal of Universal Store as a retail proposition and investment opportunity is undiminished. The growth opportunities are in place. Universal Store’s women’s banner Perfect Stranger is performing well, justifying an acceleration in its network expansion; the prospect of building out the wholesale distribution channels acquired with CTC is compelling; and customers continue to respond well to the Universal Store banner, rendering its plan to grow this network to more than 100 stores more than reasonable.

Morgans has an add rating and $6.50 price target on its shares. This implies potential upside of 27% for investors between now and this time next year.

The post These ASX shares could rise 25% to 50% appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• Brokers name 3 ASX shares to buy now
• Why IDP Education, Novonix, PYC, and Regis Resources share are racing higher
• Goldman Sachs names 2 ASX 200 shares to buy now
• Why Core Lithium, IDP Education, Seek, and Skycity shares are sinking today

Motley Fool contributor James Mickleboro has positions in Universal Store. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Idp Education. 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.

Got $10,000 in savings and looking to turn that into a $1,900 annual passive income stream?

That may sound like a lofty goal. But it’s quite achievable if you invest in the right basket of ASX dividend shares.

Now to get $1,900 a year in extra income from an initial $10,000 investment implies a 19% dividend yield. So, barring a stroke of excellent good fortune, you’re unlikely to achieve that in year one.

But by tapping into the power of compounding you could be enjoying that passive income landing in your bank account sooner than you may think.

Below, we’ll look at three top ASX dividend stocks you might wish to consider. But do keep in mind that a properly diversified portfolio will hold more than just three stocks. While there’s no magic number, 10 is a decent yardstick. That will help to lower the overall risk of your ASX dividend portfolio.

Also, remember that the yields you generally see quoted are trailing yields. Future yields may be higher or lower, depending on a range of company-specific and macroeconomic factors.

With that said…

Three ASX dividend stocks for passive income

The first company I’d buy for passive income is the S&P/ASX 200 Index (ASX: XJO) bank stock Australia and New Zealand Banking Group Ltd (ASX: ANZ).

ANZ paid a partly franked final dividend of 94 cents per share on 22 December and will pay the interim dividend of 83 cents per share on 1 July. The ASX 200 bank stock traded ex-dividend on 13 May, so we’re a bit late to score that payout.

With a full-year payout of $1.77 a share, ANZ trades on a partly franked trailing yield of 6.1% at Friday’s closing price of $29.18. The ANZ share price is up 28% in 12 months.

The second company I’d buy for passive income is ASX coal stock Yancoal Australia Ltd (ASX: YAL).

Over the past 12 months, Yancoal has paid two fully franked dividends, totalling 69.5 cents a share. At Friday’s closing price of $6.27 a share, Yancoal trades on a fully franked trailing yield of 11.1%. The Yancoal share price is up 39% in 12 months.

And the third dividend stock I’d buy for passive income is ASX 200 mining giant Fortescue Metals Group Ltd (ASX: FMG).

Fortescue shares delivered a fully franked final dividend of $1.00 a share on 28 September and an interim dividend of $1.08 a share on 27 March for a 12-month payout of $2.08 a share.

At Friday’s closing price of $24.37, Fortescue shares trade on a fully franked trailing yield of 8.5%. The Fortescue share price is up 21% in 12 months.

So, how long will it take before we can sit back and enjoy $1,900 a year in passive income without touching or initial capital investment?

To the maths!

Assuming you buy an equal number of each of these three ASX dividend stocks, you could expect to earn a yield of 8.6%.

That would see your $10,000 of invested savings return $860 a year in passive income. Or slightly less than half our goal of $1,900.

With an 8.6% yield, you’ll need to build that investment up to $22,093 before you can withdraw $1,900 a year without drawing down that capital.

Which means you’ll need to be a bit patient and reinvest those dividends at first.

Now atop the dividends, I’d also expect Fortescue, Yancoal and ANZ to continue to deliver share price gains over time. However, I wouldn’t expect them to deliver the same kinds of outsized gains they have over the past 12 months. But I think that an accumulated annual gain (dividends plus share price appreciation) of 10% is realistic, if not conservative.

Tapping into the power of compound interest, that would see your initial $10,000 in savings grow to $22,182 in eight years.

Then, you can sit back and enjoy an extra $1,907 in annual passive income.

The post How to earn $1,900 in passive income with just $10,000 in savings appeared first on The Motley Fool Australia.

More reading

• Fortescue shares rally amid claims of green tech theft
• Guess which ASX All Ords stock has rocketed 37% in a year AND pays an 11% dividend yield!
• Should you buy the 3 highest-yielding dividend shares in the ASX 200?
• Why this top broker says ANZ shares can deliver 10%+ returns in FY25
• Are ASX 200 bank shares a good investment right now?

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.

There are a lot of ASX dividend shares to choose from on the local market.

But which ones could be top buys this month? Let’s take a look at four that analysts are recommending:

APA Group (ASX: APA)

The first ASX dividend share that has been tipped as a buy is APA Group. It is an energy infrastructure business that owns and operates a $27 billion portfolio of gas, electricity, solar and wind assets.

Macquarie is bullish on the company and has an outperform rating and $9.40 price target on its shares.

As for dividends, the broker is forecasting dividends of 56 cents per share in FY 2024 and 57.5 cents per share in FY 2025. Based on the current APA Group share price of $8.58, this equates to 6.5% and 6.7% dividend yields, respectively.

Aurizon Holdings Ltd (ASX: AZJ)

Another ASX dividend share that has been given the thumbs up is Aurizon. It transports a range of commodities across its vast rail network to customers across Australia.

Ord Minnett rates the company highly and has an accumulate rating and $4.70 price target on its shares.

In respect to income, the broker is forecasting partially franked dividends of 18.6 cents per share in FY 2024 and then 24.4 cents per share in FY 2025. Based on the current Aurizon share price of $3.77, this will mean dividend yields of 4.9% and 6.5%, respectively.

Coles Group Ltd (ASX: COL)

Analysts at Morgans think that Coles could be an ASX dividend share to buy right now.

The broker currently has an add rating and $18.70 price target on its shares.

As well as decent upside, the broker is forecasting some attractive yields. It expects fully franked dividends of 66 cents per share in FY 2024 and then 69 cents per share in FY 2025. Based on the current Coles share price of $16.98, this implies yields of approximately 3.9% and 4%, respectively.

Dexus Convenience Retail REIT (ASX: DXC)

A fourth ASX dividend share that analysts are tipping as a buy is Dexus Convenience Retail REIT. It owns a portfolio of service station and convenience retail assets across Australia.

Morgans is also positive about this one and has an add rating and $3.23 price target on its shares.

As for dividends, the broker is forecasting dividends per share of 21 cents in both FY 2024 and FY 2025. Based on its current share price of $2.68, this implies yields of 7.8%.

The post 4 top quality ASX dividend shares to buy in June appeared first on The Motley Fool Australia.

More reading

• 3 of the best ASX blue chip shares to buy in June
• 3 lower-risk ASX dividend shares for retirees
• Buy these ASX 200 dividend stocks in June for an income boost
• With 6%+ yields, here are 2 ASX dividend shares to consider buying now
• Bell Potter names the best ASX shares to buy in June

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 Macquarie Group. The Motley Fool Australia has positions in and has recommended Apa Group, Coles Group, and Macquarie Group. The Motley Fool Australia has recommended Aurizon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.