Category: Stock Market

Shares in All Ordinaries Index (ASX: XAO) company AUB Group Ltd (ASX: AUB) are back on the move once more.

Stock in the insurance broker exited a single-session trading halt this morning on news the company successfully raked in $150 million.

Right now, the AUB share price is $27.67, 7% higher than it was at Wednesday’s close.

Let’s take a closer look at all that’s been going down with the All Ords share this week.

ASX All Ords share soars on oversubscribed placement

The AUB share price is roaring ahead of the All Ords on Friday after the company’s $150 million placement received strong support from institutional shareholders.

Investors had the opportunity to snap up a portion of 6.25 million new shares offered for $24 apiece. That represented a 7.2% discount on the stock’s Wednesday close.

Proceeds from the capital raise will replace $100 million of cash in flow previously expected to come from a joint venture between AUM’s Tysers UK Retail business and PSC Insurance Group Ltd (ASX: PSI). The proposed venture was binned earlier this week.

AUB CEO Mike Emmett commented that the company was “very pleased” with the outcome of the oversubscribed placement, saying “it is a testament to the strong performance of both AUB and the Tysers business”. Emmett continued:

We continue to focus on delivering our strategy by combining strong organic performance with executing accretive M&A. This raising provides us the financial flexibility required to capitalise on our attractive M&A pipeline, so we thank our investors for their continued support.

And retail investors need not fret. They’ll get their chance to join in on the capital raise under a share purchase plan (SPP).

The plan is expected to raise $15 million. It will allow shareholders to secure up to $30,000 of new securities in the All Ords company for $24 apiece.

An offer booklet for the SPP is expected to be released to the ASX in around a week’s time.

AUB share price snapshot

Today’s gain is just the latest to boost the AUM share price higher.

The ASX All Ords share has been outperforming the benchmark index lately. It’s gained 23% since the start of 2023 and 43% since this time last year.

Meanwhile, the All Ords has risen 5% year to date and 2% over the last 12 months.

The post This ASX All Ords share is surging 5% after securing $150 million appeared first on The Motley Fool Australia.

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More reading

• Why is everyone talking about AUB shares on Thursday?

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

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The Austal Ltd (ASX: ASB) share price is sailing at full steam ahead today, up 25.4%.

Shares in the ASX shipbuilder closed yesterday trading for $1.60. At the time of writing, Austal shares are changing hands for $2.00 apiece.

This follows the company’s announcement this morning of a contract potentially worth $4.8 billion.

What did the ASX shipbuilder report?

The Austal share price is flying higher after the company reported the United States Navy has awarded Austal USA some lucrative contracts.

Those comprise a US$113.9 million fixed-price incentive (firm target) and firm-fixed-price contract for detail design of the Auxiliary General Ocean Surveillance Ship T-AGOS 25 Class.

According to the release, the contract includes options for detail design and construction of up to seven T-AGOS 25 Class ships.

Helping lift the Austal share price today is the company’s report that if that option is exercised, the cumulative value of the contract comes to US$3.2 billion (AU$4.8 billion).

The 110m steel-hulled T-AGOS ships support anti-submarine missions for the US Atlantic and Pacific Fleets by providing a platform capable of passive and active anti-submarine acoustic surveillance.

Management commentary

Commenting on the contract sending the Austal share price up today, CEO Paddy Gregg said Austal USA was “honoured to be selected to deliver this critical capability for the Navy”.

Gregg said the contract would take advantage of the company’s “advanced manufacturing processes, state-of-the-art steel shipbuilding facilities”, and growing team of shipbuilders.

He added:

The T-AGOS contract is a clear acknowledgment of Austal’s capabilities in steel naval shipbuilding, that includes the Navy’s Towing, Salvage and Rescue (T-ATS) ships, an Auxiliary Floating Drydock Medium (AFDM), and the US Coast Guards’ Offshore Patrol Cutters.

Gregg said these four steel naval shipbuilding projects were “positioning Austal USA exceptionally well to meet the growing demands of the US Navy and Coast Guard”.

Austal share price snapshot

With today’s big intraday boost factored in, the Austal share price is back in the green over the full year, up 2.4%.

The post Why the Austal share price is sailing 25% higher today appeared first on The Motley Fool Australia.

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More reading

• Broker urges investors to buy the dip in the Beach Energy share price for a 50% return
• 4 ASX 200 shares trading ex-dividend next week
• 3 reasons to buy Westpac shares now: broker
• Dusk share price sinks 16% today as cost of living weighs
• Back to 100%: The deal driving Qantas shares into the green on Friday

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 positions in and has recommended Austal. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Beach Energy Ltd (ASX: BPT) share price is recovering on Friday after taking a tumble yesterday.

At the time of writing, the energy producer’s shares are up 1% to $1.37.

Why did its shares tumble on Thursday?

Investors were selling down Beach Energy shares yesterday amid news that the company has abandoned its target schedule and capital estimates for the Waitsia Stage 2 project.

Beach Energy made the move in response to the tight labour market in Western Australia, which has impacted construction progress and created a range of uncertain outcomes.

Why is the Beach Energy share price rebounding?

Today’s gain may have been driven by a reasonably bullish broker note out of Bell Potter this morning.

According to the note, the broker has responded to yesterday’s news by retaining its buy rating with a slightly trimmed price target of $2.05.

Based on the current Beach Energy share price, this implies potential upside of approximately 50% for investors over the next 12 months. The broker also expects a 3% dividend yield to sweeten the deal even further.

While disappointed with the news, Bell Potter remains positive. It said:

Waitsia Stage 2 is a key component of BPT’s near-term production growth, adding around 7.8MMboe/year net capacity (for context FY23 production guidance is 19.0-20.5MMboe). Delays to the project will mostly impact FY24 production and earnings estimates and make providing FY24 guidance problematic for BPT. However, the impact on valuation is less pronounced with production deferred to later periods. BPT has a strong balance sheet to withstand capital cost pressures.

The broker then concludes:

BPT has a strong, fully funded production growth outlook, diversified across five energy basins and across four separate gas markets, including LNG. BPT is rolling-off peak capex into a step-change in production and free cash flow in FY24, has a strong balance sheet, and has a capital management framework with franked dividends a key component. With a positive view on Australian east coast gas and LNG markets, and BPT’s strong earnings growth outlook, we maintain a Buy recommendation.

The post Broker urges investors to buy the dip in the Beach Energy share price for a 50% return appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Why Aristocrat, Beach Energy, Bowen Coal, and Virgin Money shares are falling today
• ASX 200 energy share tumbles 7% as ‘key’ project guidance scrapped
• 5 things to watch on the ASX 200 on Thursday

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

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It’s set to be a big week for ASX 200 dividend investors next week. That’s because we have not one, not two, but four ASX 200 shares set to trade ex-dividend.

When an ASX 200 share goes ex-dividend, it draws a line between the shareholders who are eligible for an upcoming dividend and those who are not. Anyone who owns a company before the day its sales trade ex-dividend is eligible to receive the said dividend. But if an investor buys the shares on or after the ex-dividend date, they miss out on the current round.

That’s why we tend to see the value of a share that goes ‘ex-div’ fall on the day – it reflects this loss of value for new shareholders.

So let’s get into the four ASX 200 shares that will go through this experience next week.

4 ASX 200 shares that will trade ex-dividend next week

Elders Ltd (ASX: ELD)

ASX 200 agricultural share Elders is first up. This farming supplies and services company will fork out an interim dividend of 23 cents per share, partially franked at 30%, on 22 June. But investors will be quick if they wish to receive it, with the ex-dividend date set for next Tuesday, 23 May.

This interim dividend is a bit of a step back for Elders, who paid out 28 cents per share in May 2022. At the current Elders share price, this ASX 200 share has a dividend yield of 7.42%.

Amcor CDI (ASX: AMC)

Next up is ASX 200 cardboard and packaging share Amcor. Amcor shares are also scheduled to trade ex-dividend on Tuesday 23 May. Amcor is a rare ASX 200 share that pays out quarterly dividends, so this latest one will be worth an unfranked 12.25 US cents per share (18.43 cents).

That’s the same amount as investors bagged back in March. But it also represents a decent increase over last year’s commensurate dividend of 12 US cents.

Pay date for Amcor is set for 20 June. Right now, Amcor shares offer a trailing yield of 4.58%.

Orica Ltd (ASX: ORI)

Explosives manufacturer Orica is our third ASX 200 share worth a look today. We’re back to a bi-annual dividend with this one, with Orica preparing to dole out its latest interim dividend on 3 July.

This will be worth 18 cents per share, unfranked – a pleasing increase over the 13 cents per share investors were paid last July. Orica’s ex-dividend date is set for next Thursday, 25 May. The company has a trialling dividend yield of 1.76% right now.

CSR Limited (ASX: CSR)

Rounding out our list today is ASX 200 building and construction supplies share, CSR. Earlier this month, CSR declared that its latest final dividend would be worth a fully-franked 20 cents per share. The payment day is set for 3 July, while the ex-dividend date is next Friday, 26 May.

This 20-cent payout is one of CSR’s highest ever. It beat out both last July’s final dividend of 29 cents and December’s interim dividend of 16.5 cents per share.

On current pricing, CSR shares offer a dividend yield of 6.8%.

The post 4 ASX 200 shares trading ex-dividend next week appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Why Elders, Northern Star, Pointsbet, and Weebit Nano shares are sinking
• Why ANZ, Elders, Nanosonics, and Pointsbet shares are falling today
• Own Elders shares? Your dividend was just slashed by 18%
• Elders share price plummets as half-year profit dumps 46%

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 positions in and has recommended Amcor Plc. The Motley Fool Australia has recommended Elders. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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If you’re looking for a reason to buy Westpac Banking Corp (ASX: WBC) shares, then read on.

The team at Goldman Sachs doesn’t just have one reason to invest in the banking giant’s shares, it has three big reasons to do so.

Three reasons to buy Westpac shares

The first reason to buy Westpac shares is its net interest margin (NIM) management. Goldman explains:

[W]e view WBC’s NIM management in the half as a positive relative to peers, in particular having achieved an exit NIM that was flat versus 2Q23 average in contrast with peers who saw continued deterioration,

Another reason is its cost outlook. Although it was disappointed that Westpac has walked away from its cost reduction target, the broker still expects its costs to be largely flat. This is a decent outcome in the current inflationary environment. Goldman adds:

[D]espite WBC walking away from its FY24E cost target of A$8.6 bn, we expect a broadly flat cost trajectory over the next two years, which will see WBC outperform peers in this relatively difficult inflationary environment.

Finally, the broker highlights the discount that Westpac shares trade at as a reason to buy. It concludes:

[T]he stock is trading at a notable discount to peers, versus the historical average discount of 3%.

What is fair value?

According to the note, the broker has a conviction buy rating and $24.67 price target on Westpac’s shares. Based on its current share price of $21.17, this implies potential upside of 16.5% for investors over the next 12 months.

In addition, the broker is expecting fully franked dividend yields of approximately 6.2% in FY 2023 and FY 2024.

All in all, this makes Westpac the broker’s “preferred exposure to the A&NZ Financials.”

The post 3 reasons to buy Westpac shares now: broker appeared first on The Motley Fool Australia.

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More reading

• With interest rates rising, why have ASX 200 bank shares been pummelled in 2023?
• Could buying Westpac shares around $21 make me rich?
• These are the best ASX 200 bank shares to buy now: analysts
• Broker warns that ‘our conviction has waned’ on Westpac shares
• How to invest $10,000 in ASX dividend shares in May

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

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The Dusk Group Ltd (ASX: DSK) share price is tumbling today, down 15.5%.

Shares in home fragrance product retailer closed yesterday trading for $1.52. Shares are currently swapping hands at $1.28 apiece representing a new all-time low.

ASX investors look to be hitting the sell button on the back of a trading update released by the company this morning.

What are ASX investors considering?

The Dusk share price is sliding after the company provided some underwhelming guidance for the full 2023 financial year (FY23).

Management said that with 45 weeks of FY23 having passed – including key trading for the company around Mother’s Day – they decided to provide that guidance today.

The sales and earnings before interest and tax (EBIT) forecasts are based on unaudited management accounts to the end of April 2023.

On the sales front, Dusk is forecasting FY23 sales to fall between $135 million and $137 million. FY22 sales came in at $138.4 million.

The Dusk share price is also likely under pressure with the company expecting pro forma EBIT for FY23 to gall in the range of $16 million to $17 million. That’s well down from the EBIT of $26.5 million in FY22.

As for the gross margin rate, management expects FY23 will be similar to last year.

Commenting on the results sending the Dusk share price sliding today, CEO Peter King said:

Trading conditions in the second half of FY23 have been impacted by an increasingly cautious consumer environment, driven by higher interest rates and mounting cost of living pressures impacting the disposable income levels of our core customer.

King noted that the key Mother’s Day period was “softer than anticipated” for sales.

He also highlighted the company’s ongoing growth plans. With new stores continuing to open in the second half of the financial year, Dusk will end FY23 with 145 stores, up from 132 stores at the end of FY22.

“The performance of these new stores as a group is in line with expectations,” King said.

Dusk share price snapshot

The Dusk share price has underperformed over the past 12 months, sinking a precipitous 34%. For some context, the All Ordinaries Index (ASX: XAO) is up 2% over the full year.

The post Dusk share price sinks 16% today as cost of living weighs appeared first on The Motley Fool Australia.

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More reading

• I think these 2 ASX small cap shares could make big returns
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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 recommended Dusk Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Qantas Airways Limited (ASX: QAN) shares are edging higher on Friday morning.

At the time of writing, the airline operator’s shares are up 0.3% to $6.47.

Why is the Qantas share price rising?

Today’s gain appears to have been driven by a combination of a rising market and the release of a positive announcement.

In respect to the latter, Qantas has revealed that it will boost its international network with extra flights, more aircraft, and new routes as it restores capacity in line with strong travel demand and the broader recovery of the aviation industry.

According to the release, from late October, the flag carrier airline plans to add around one million seats to its international network over 12 months compared to its current schedule. It notes that this will offer customers more choice to popular destinations across Asia, the United States, and the Pacific.

Underpinning this will be more Qantas aircraft returning to service, new aircraft joining the fleet, and an arrangement with oneworld partner Finnair to operate two Airbus A330 aircraft on two Qantas routes.

In addition, its ongoing wet lease agreement with Alliance Aviation Services Ltd (ASX: AQZ) appears to be supporting this increased capacity. This morning, Alliance revealed that four more aircraft have been leased with extended range capabilities.

All in all, these changes will see group international capacity grow to around 100% of pre-COVID levels by March 2024. This is up from 44% 12 months ago and 84% today.

Management advised that most of the flying announced today will be powered by the 2,400 pilots and cabin crew Qantas has recruited since borders reopened. A further 300 employees will be needed by the end of the year.

Prices to come down

The good news for travellers is that this action is expected to result in lower airfares.

Qantas CEO, Alan Joyce, commented:

While airlines globally are working to restore capacity to meet demand, there is still a mismatch between supply and demand for international flying. But with more of our aircraft back in the air, new 787s joining our fleet and our contract with Finnair, we’ve got more seats for our customers and more opportunity for Qantas crew as we increase our own flying. We know our customers are looking for great value and this additional capacity will also put downward pressure on fares.

The post Back to 100%: The deal driving Qantas shares into the green on Friday appeared first on The Motley Fool Australia.

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More reading

• Why Goldman Sachs rates these ASX 200 shares as top buys
• Why Qantas shares are Morgans’ top pick in the travel sector
• Buyback bender: These ASX All Ords shares can’t get enough of their own stock
• Qantas shares: High-flying potential or grounded expectations?
• Rio Tinto and this ASX 200 share are strong buys: analysts

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

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The S&P/ASX 200 Index (ASX: XJO) stock Lendlease Group (ASX: LLC) has suffered heavily over the last few years. But some investors are seeing value in it now.

For readers that don’t know, Lendlease is a business with a market capitalisation of more than $5 billion. It describes itself as a globally integrated real estate group that’s involved in the development, design, placemaking, construction and investments to deliver “iconic and enormously successful places”.

The company’s involved with a number of different developments including ”Sydney’s award-winning Barangaroo precinct, London’s Elephant Park urban renewal project, Singapore’s Paya Lebar Quarter, Boston’s Clippership Wharf and a $20 billion urban renewal project comprised of four districts in the San Francisco Bay area.” These projects are part of its $120 billion global development pipeline, according to Lendlease.

Why the ASX 200 stock looks cheap

As we can see on the chart above, the Lendlease share price has dropped around 30% over the last year. That’s a lot worse than the S&P/ASX 200 Index (ASX: XJO) which has risen by around 3% in the past year.

But, a fall in the share price alone doesn’t automatically mean that the business is good value.

Romano Sala Tenna is portfolio manager of Katana Asset Management’s Australian equity fund, and he was talking to the Australian Financial Review.

When talking about some of the most underlying ASX 200 stocks in the fund, he named Lendlease, suggesting that it’s trading at a “historically low price to book value of less than 0.90 times.”

The price to book refers to the company’s market capitalisation (or Lendlease share price, in per-share terms) compared to the net asset value (NAV) of the business – it’s cheaper than what the underlying balance sheet is supposedly worth.

Investors can buy $1 of Lendlease net assets for less than $0.90.

However, the fund manager acknowledged that the company faces “pronounced headwinds in the short-term and may stay cheap or fall further”. He said that the fund has started with a small position with a medium-term lens, and expects to build a larger position over the coming 12 to 18 months as the “macro environment normalises”.

What’s the view on the ASX share market?

Romano Sala Tenna said:

We have been overweight cash for the best part of nine months. This is premised on our view that consumer spending will recalibrate notably lower at the same time as inflation and higher debt servicing impact production costs. This combination will most certainly drive earnings lower. The piece of the puzzle that we are less certain about is the impact on shares. In an ordinary cycle, declining earnings equate to declining share prices. However, this is already the consensus viewpoint, and the herd by definition is rarely positioned correctly.

Having said this, we do not have the luxury to hold cash indefinitely. Our current intention is to hold our course until the end of May. If we do not see signs of the market rolling over by that time, we will pivot and selectively deploy capital.

The post One ASX 200 stock ‘trading at a historically low price to book value’ right now appeared first on The Motley Fool Australia.

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More reading

• 4 ASX 200 shares to buy if they plunge from June tax-loss selling
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• Here are the top 10 ASX 200 shares today

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

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The S&P/ASX 200 Index (ASX: XJO) provides some great opportunities to earn a regular passive income.

Especially with the franking credits that many of the top dividend-paying ASX shares offer. You simply won’t find those kinds of potential tax benefits on most international exchanges.

If I were aiming to invest $20,000 for passive income right now, I’d target some of the big ASX 200 energy stocks.

Energy markets are certainly changing, with an ever greater focus on renewables. But the past few years have highlighted the vital role that coal, oil, and gas continue to play in the global energy mix. And I believe that’s highly unlikely to change any time soon.

Now before diving in, take note that the dividend yields we’ll be looking at are trailing yields, backwards-looking by definition. Future yields may be higher or lower depending on a range of company-specific and macroeconomic factors.

With that said, the first ASX 200 share I’d target for passive income is coal stock Yancoal Australia Ltd (ASX: YAL).

Harvesting passive income from black gold and Texas tea

The Yancoal share price has edged lower in 2023, down 6% amid slipping thermal and coking coal prices.

The retrace to $5.34 a share at the time of writing could provide a good entry point to lock in that passive income.

Yancoal paid an interim dividend of 52.7 cents per share on 20 September as profits soared on the back of record-high thermal coal prices. The coal stock delivered a final dividend of 70 cents per share on 28 March. Both were fully franked.

That works out to $1.227 per share in passive income and a whopping trailing yield of 22.7%.

The second ASX 200 energy stock I’d tap for its impressive, fully-franked dividend potential is oil and gas stock Woodside Energy Group Ltd (ASX: WDS).

The Woodside share price has also slipped this year, down 4% amid lower crude oil prices.

As with Yancoal, with Woodside currently trading at $34.32, the passive income potential looks appealing.

Woodside paid an interim dividend of $1.60 per share on 6 October. The all-time high final dividend of $2.154 landed in shareholder bank accounts on 5 April.

That equates to a total dividend payout of $3.754 for a trailing yield of 11.0%.

Dividend income

I’d invest my $20,000 evenly between the two ASX 200 energy shares, giving me pure exposure to the oil and gas sector from Woodside and the coal sector from Yancoal.

That would see me earning an average yield of 16.85%. Or a very welcome $3,370 in passive income hitting my bank account, with potential benefits come tax time.

The post How I’d invest $20,000 today for a $3,370 passive income appeared first on The Motley Fool Australia.

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• 2 ASX coal shares with dividend yields over 20%: Are they for real?
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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.

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It’s likely a question on the lips of many of those invested in S&P/ASX 200 Index (ASX: XJO) lithium shares. Thankfully for those holding Liontown Resources Ltd (ASX: LTR) shares, we have an answer as to when the company might pay its maiden dividend.

Liontown chair and major shareholder Tim Goyder sat down with Bell Direct market analyst Grady Wulff earlier this week to discuss what the coming years might bring the company.

And investors will be glad to know dividends are expected to be on the cards. Though, they’re likely some time away yet.

Right now, the Liontown share price is up 0.71%, trading at $2.83%.

For comparison, the ASX 200 is gaining 0.46% at the time of writing.

So, without further ado, let’s dive into when those invested in Liontown shares might expect to receive dividends from the company.

When can those holding Liontown shares expect dividends?

It’s been a big year so far for the Liontown share price. It’s gained a whopping 130% year to date, with the majority of those gains realised on the back of a takeover bid posed by industry giant Albemarle.

The New York-listed lithium producer offered to pay $2.50 per share for its ASX 200 counterpart in March. Commenting on the company’s rejection of the bid at this week’s Resources Rising Stars conference, Goyder said:

The best people to ascertain the value of a company are the operators of the company, or the board.

We, like Albemarle, believe that it’s a great company. The only thing we differ on, of course, is the price.

And, you know, the longer-term shareholders, including myself, look forward to dividends.

Word of potential dividends likely pricked the ears of investors. Particularly, those already honed in on Liontown following its rebuffed takeover bid and amid major merger news from ASX 200 peer Allkem Ltd (ASX: AKE).

But passive income-focused ASX 200 lithium fans might not want to hold their breath waiting for the company’s payouts.

Its flagship Kathleen Valley Project, located in Western Australia, is on schedule to see first production in mid-2024. From there, three major five-year offtake agreements will take effect.

Electric vehicle giants Tesla, Ford, and LG Energy Solutions have each signed on to purchase up to 150,000 dry metric tonnes (DMT) of the project’s production annually.

When asked why investors should pour their hard-earned cash into Liontown shares, Goyder said:

It all comes back to the deposit. We’ve got a 25-year mine life, a production rate in the order of 600,000 tons a year of concentrate, we’ve got five years locked away with Tesla, Ford, and LG Energy Systems.

So, come year six and onwards, hopefully we’ll be doing downstream, and during that period we are quite confident of paying dividends.

The post Own Liontown shares? Here’s when the company expects to kick start dividends appeared first on The Motley Fool Australia.

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More reading

• Are ASX 200 lithium shares approaching a ‘tipping point’ for ripper revenues?
• Power portfolios: Millionaire investors shun ASX 200 lithium shares
• Liontown share price cracks yet another all-time high on Wednesday
• 3 ASX 300 shares that turned $5,000 into $59,000 or much more in 5 years
• ASX lithium shares are off and racing today. What’s behind the boost?

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. 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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