Category: Stock Market

As a long-time investor, I consider many factors when analysing ASX shares. I try to understand business models and industries, analyse financial health and valuation, and think about growth potential, competitors, and more.

Another crucial factor for minority shareholders is high insider ownership. When insiders, such as executives and directors, own a chunk of the company’s shares, their interests align closely with those of smaller shareholders.

Their personal financial stake in the company’s success often leads to decisions that aim to increase shareholder value.

With this in mind, here are three ASX companies with significant insider ownership that I recommend considering today.

Reece Ltd (ASX: REH)

If you’ve recently undertaken bathroom renovations, you may already be familiar with Reece. As a leading Australian distributor of plumbing, waterworks, and bathroom products, Reece has established itself as a go-to source for quality renovation supplies.

Established in 1920 by H.J. Reece, Reece has grown to become a dominant player in the Australian and New Zealand markets, with a significant presence in the US through its acquisition of MORSCO in 2018.

In 1969, the Wilson family became majority shareholders in Reece and currently owns at least 359 million shares, representing 55% of the company according to the FY23 annual report.

Reece’s business model focuses on maintaining a broad product range, efficient supply chain management, and investing in digital transformation to enhance customer experience.

The company’s revenues have grown from $5.5 billion in FY19 to $8.8 billion in FY23, while net profits after tax (NPAT) have doubled from $202 million to $388 million during the same period.

Reece is a consistent dividend payer, distributing approximately 38% of its FY23 profits to its shareholders, or 25 cents per share. This is equivalent to a dividend yield of 1% at the current share price.

Supply Network Ltd (ASX: SNL)

Supply Network distributes aftermarket parts for commercial vehicles. The company operates through its two main brands: Multispares, which serves Australia, and Globac, which serves New Zealand.

Supply Network provides a wide range of products, including brake, suspension, and engine components, primarily for the truck and bus industries.

It boasts a tight-knit, long-serving board, all with significant shareholdings. According to its FY23 annual report, the company’s directors and senior managers own nearly 18 million shares, representing 42% of the company.

The founder, Greg Forsyth, holds a relevant interest in over 12 million shares, or 28% of the company. He has served as the chairman of the Board since 2010. Managing director and CEO Geoff Stewart has been at the helm since 1999. With an engineering background and more than 30 years of industry experience, he holds around 1.4 million shares.

With strong backing from insiders, the company’s growth has been impressive. Between FY19 and FY23, its revenue doubled from $123.9 million to $252.3 million, as net profits after tax more than tripled from $8.7 million to $27.4 million. The return on average total equity has been high and growing, reaching 40% in FY23.

The Supply Network share price is traded on a price-to-earnings (P/E) ratio of 32x based on its trailing earnings over the 12 months to December 2023.

Pro Medicus Limited (ASX: PME)

Last but not least, Pro Medicus. This is a leading provider of radiology information systems (RIS), picture archiving and communication systems (PACS), and advanced visualisation solutions across the globe.

The company excels in the United States, the largest medical imaging market in the world. Between FY18 and FY23, its revenues quadrupled from $34 million to $127 million, driven by successful market penetration in both Australia and the US.

For instance, the North American region accounted for nearly 80% of its FY23 revenue. Thanks to this remarkable success, its net profits after tax soared from $10 million to $61 million during the same period.

There are many reasons behind this success story. Pro Medicus capitalised on the medical imaging industry’s shift to digital with its innovative and efficient product offerings, positioning itself as a leader in the market.

Above all, however, I think having a solid management team with substantial share ownership was one of the important factors.

As noted in the FY23 annual report, executive key management personnel collectively hold 52.4 million shares, representing 52% of the company. Co-founders Dr Sam Hupert and Anthony Hall maintain a strong influence, each owning 24% of the company.

Dr Hupert co-founded Pro Medicus in 1983 as he recognised the potential for computers in medicine early on. He served as CEO from the company’s inception until 2007, became an executive director, and resumed his role as CEO in 2010.

I must admit its current valuation is eye-watering, with a P/E ratio of 184x based on trailing earnings. However, the good news is that the company’s earnings have been growing at an annual rate of 30% to 40% since FY21. If this growth continues, its future P/E ratio will become more reasonable.

The post 3 ASX shares with high insider ownership appeared first on The Motley Fool Australia.

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Motley Fool contributor Kate Lee 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 Pro Medicus and Supply Network. The Motley Fool Australia has recommended Pro Medicus and Supply Network. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Looking to invest in an ASX biotech share with the potential to become the next Telix Pharmaceuticals Ltd (ASX: TLX)?

You’re not alone!

The S&P/ASX 200 Index (ASX: XJO) biopharmaceutical company has been going from strength to strength lately.

Just in the past few weeks, Telix made several announcements that sent the stock soaring.

First it announced positive results from its ProstACT SELECT clinical cancer trial. And just days later it reported on progress on approval for TLX250-CDx, its kidney cancer imaging agent, with the United States Food and Drug Administration (FDA).

So, just how well have shareholders in this ASX biotech share been faring?

Well, if you’d bought Telix shares one month ago you’d be sitting on a gain of 20% today.

If you’d bought at the start of 2024, you’d be up 78%.

And if you’d snapped up the ASX biotech share for a bargain $1.05 a share five years ago, you’d have watched those shares surge 1,606%.

Or enough to turn a $5,000 investment into $85,300!

Which bring us to Rory Hunter, portfolio manager of SG Hiscock’s Medical Technology Fund.

The ASX biotech shares that could mimic Telix’s success

The SG Hiscock’s Medical Technology Fund will have done well with its Telix Pharmaceuticals holdings.

According to Hunter (courtesy of The Australian Financial Review):

We originally took a position [in Telix] back in 2019 and chief executive Christian Behrenbruch has delivered on all stated commercial milestones in a timely manner, which is a feat not often achieved among early stage biotechs.

Hunter remains moderately bullish on the outlook for the ASX biotech share. But he noted that in the case of this ASX biotech share, “The easy money has been made.”

And he cautioned that “investors will need to stomach some volatility” with the Telix share price moving forward.

Though, as you can see on the price chart up top, that’s something long-term shareholders in this ASX biotech share should already be well-familiar with.

When asked which stocks his fund holds that have the same explosive potential as Telix or Neuren Pharmaceuticals Ltd (ASX: NEU), Hunter pointed to Clarity Pharmaceuticals Ltd (ASX: CU6) and Dimerix Ltd (ASX: DXB).

He noted that Clarity Pharmaceuticals could replicate “Telix’s success in radiotheranostics”. While Dimerix could replicate “Neuren’s success in rare diseases”.

He added that with “assets in late-stage development”, Dimerix was a potential M&A target.

Clarity, Hunter added, could also become a potential takeover target for its “exciting and compelling early-stage data”.

The Clarity share price is already up a whopping 575% over 12 months.

The Dimerix share price has run even hotter. The ASX biotech share is up 817% over 12 months.

The post 2 ASX biotech shares that could be the next Telix Pharmaceuticals appeared first on The Motley Fool Australia.

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

ASX dividend shares that generate relatively stable profits may deliver more consistent investment income than the broader ASX share market, which could appeal to retirees.

If I were in retirement, I’d want to own stocks that are more likely to continue delivering dividends, even during a downturn. Life expenses continue regardless of what’s happening with the economy.

With that in mind, I think the three ASX shares below are candidates for passive income.

Metcash Ltd (ASX: MTS)

Metcash has three divisions – food, liquor and hardware.

With the food division, it supplies IGA supermarkets around the country, and it recently acquired a food distribution business that supplies business customers like cafes, restaurants, hotels, hospitals, and so on.

The liquor division supplies various independent liquor chains, such as Cellarbrations, The Bottle-O, IGA Liquor, Porters Liquor, Thirsty Camel, and Duncans.

I believe the food and liquor segments can provide defensive earnings with largely consistent demand.

Its hardware division includes several businesses, including Mitre 10, Home Timber & Hardware and Total Tools. Australia’s growing population helps drive long-term demand for hardware.

The business is committed to a dividend payout ratio of 70% of underlying net profit after tax (NPAT). According to Commsec, the ASX dividend share is predicted to pay a grossed-up dividend yield of 7.8% in FY25.

Wesfarmers Ltd (ASX: WES)

This business owns various leading retailers, including Bunnings, Kmart, Officeworks, Priceline and Target.

Wesfarmers’ biggest profit generators – Bunnings and Kmart – are very well suited to capture market share in the current economic conditions because of their focus on providing customers with value for household products.

The company is investing in new industries, such as healthcare and lithium, that can help diversify and grow Wesfarmers’ earnings for retirees (and all other shareholders).

One of Wesfarmers’ aims is to grow its dividend over time, and it has delivered that since the onset of COVID-19. The FY24 half-year dividend was hiked by 3.4% to 91 cents per share, and the Commsec projection suggests a grossed-up dividend yield of 4.5% for FY25.  

APA Group (ASX: APA)

APA owns vast gas pipelines around Australia that transport half of the nation’s gas usage. It also owns other gas-related assets, including gas-powered energy generation. APA has a growing portfolio of renewable energy (solar and wind) and electricity transmission assets.

It has grown its distribution every year since 2004, giving it one of the longest growth streaks on the ASX. The ASX dividend share’s cash flow is increasing over time as more pipelines and other assets are completed or acquired.

APA has guided its payout will be 56 cents per security, which translates into a distribution yield of 6.5%.

The post 3 lower-risk ASX dividend shares for retirees appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Metcash. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Wesfarmers. The Motley Fool Australia has positions in and has recommended Apa Group and Wesfarmers. The Motley Fool Australia has recommended Metcash. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX investors woke today to news that the European Central Bank had cut interest rates.

In a broadly expected move, the ECB lowered the official interest rate by 0.25%, taking it from 4.00% to 3.75%. This marks the first easing by the ECB since 2019.

The bank noted that since its council meeting in September “inflation has fallen by more than 2.5% and the inflation outlook has improved markedly”.

Explaining its decision, the ECB stated:

Based on an updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission, it is now appropriate to moderate the degree of monetary policy restriction after nine months of holding rates steady.

But the inflation genie is not yet securely back in its bottle.

The ECB cautioned:

At the same time, despite the progress over recent quarters, domestic price pressures remain strong as wage growth is elevated, and inflation is likely to stay above target well into next year.

Indeed, inflation in the EU in May picked up more than expected with rising wages expected to keep the pressure on rising prices for some time yet. This could see interest rates in the EU remain higher for longer.

Addressing the sticky inflation, ECB president Christine Lagarde said (quoted by The Australian Financial Review), “Inflation is expected to fluctuate around current levels for the rest of the year. It is then expected to decline towards our target over the second half of next year.”

Still, consensus expectations are for the next ECB interest rate cut in September.

But to achieve that, inflation in the EU is going to need to continue to moderate.

According to the ECB:

The Governing Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner. It will keep policy rates sufficiently restrictive for as long as necessary to achieve this aim.

What does the ECB interest rate cut mean for ASX investors?

There’ll be some ASX companies that could directly benefit from lower borrowing costs in the EU.

But as a whole, ASX investors are waiting to reap some bigger benefits from interest rate cuts by the RBA and the US Fed.

Now the RBA will remain focused on Australia’s own inflationary data. But it’s worth noting that the ECB’s rate cut follows on the Bank of Canada’s 0.25% cut the day before, which brough Canada’s cash rate down to 4.75%.

And with more central banks opting to ease ahead of the US Fed, it could nudge the RBA board in the same direction.

As Doug Porter, chief economist at the Bank of Montreal, said following the Bank of Canada’s interest rate cut:

There is safety in numbers. If central banks see their counterparts heading that way, that gives them some comfort that they’re not completely misreading the situation. I think it does make it easier for other central banks to start cutting too.

European stock markets broadly closed higher on the news. Here in Australia, the S&P/ASX 200 Index (ASX: XJO) is up 0.2% in morning trade.

The post European Central Bank cuts interest rates. What does it mean for ASX investors? appeared first on The Motley Fool Australia.

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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.

The VanEck Morningstar Wide Moat ETF (ASX: MOAT) has been a high-performing fund for several years. An exchange-traded fund (ETF)‘s performance is decided by the underlying companies’ returns, so how the portfolio is constructed is important.

Since its inception in June 2015, the ASX ETF has delivered an average annual return of 15.3%, compared to 14.1% for the S&P 500 Index (SP: .INX) over the same time period.

While the holdings within the ETF do steadily change, the portfolio is always focused on solid businesses with excellent economic moats that are expected to endure and succeed for many years.

Companies inside the MOAT ETF

The VanEck Morningstar Wide Moat ETF looks to invest in a portfolio of at least 40 “attractively priced US companies with sustainable competitive advantages”, according to Morningstar’s equity research team.

It currently has 54 holdings across a range of industries. The biggest position in the portfolio right now (with a 3.47% allocation) is Teradyne, and the smallest positions, both with a weighting of 1.04%, are Adobe and Fortinet. There are numerous holdings with a position size of at least 2.25%, which are as follows:

• Teradyne (3.47%)
• Alphabet (3.22%)
• International Flavors & Fragrances (3.06%)
• Rtx (2.99%)
• Tyler Technologies (2.79%)
• Charles Schwab (2.73%)
• Altria Group (2.64%)
• Corteva (2.64%)
• Biogen (2.51%)
• Pfizer (2.48%)
• Transunion (2.45%)
• Allegion (2.43%)
• Campbell Soup (2.42%)
• Medtronic (2.38%)
• Equifax (2.35%)
• Agilent Technologies (2.31%)
• US Bancorp (2.28%)

As we can see, the position size is quite evenly distributed, which reduces the risk of being overconcentrated in any particular stock.

How are stocks selected?

Businesses are only chosen for the MOAT ETF portfolio if they are trading at an attractive price relative to Morningstar’s estimate of fair value. In other words, they only buy a stock if they think it’s much cheaper than they believe it’s actually worth.

The analysts assign an economic moat rating to each of the approximately 1,500 companies under its coverage. For Morningstar, this is where a company has a sustainable competitive advantage that allows it to generate positive earnings for shareholders over an extended period. Only 14% of the companies monitored have a “wide moat” rating.

To earn a wide moat rating, analysts think that the company’s “excess normalised returns must, with near certainty, be positive ten years from now. In addition, excess normalised returns must, more likely than not, be positive 20 years from now.”

There are several different types of moat, including cost advantage, intangible assets (patents, brands, regulatory licenses), switching costs, network effects, and efficient scale.

The investment style seems to be working well – in the five years to 31 May 2024, the MOAT ETF has delivered an average return per annum of 16.2%. Of course, past performance is not a guarantee of future performance.

The post Which companies are in the VanEck Morningstar Wide Moat ETF (MOAT) portfolio? appeared first on The Motley Fool Australia.

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Charles Schwab 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 Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Adobe, Alphabet, Charles Schwab, Fortinet, Tyler Technologies, and U.S. Bancorp. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Biogen, Medtronic, RTX, and Teradyne and has recommended the following options: long January 2026 $75 calls on Medtronic, short January 2026 $85 calls on Medtronic, and short June 2024 $65 puts on Charles Schwab. The Motley Fool Australia has recommended Adobe, Alphabet, and VanEck Morningstar Wide Moat ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

There are many cheap stocks available for the Foolish investor who is willing to look. Take telecommunications giant Telstra Group Ltd (ASX: TLS), for example. Its shares have taken a hit in 2024 and now trade at $3.55 per share, down from a 52-week high of $4.42 on 21 June 2023.

This decline could present a potential buying opportunity for savvy investors looking for a cheap stock with strong fundamentals. Let’s dig into why Telstra might be a bargain worth considering.

Why is Telstra’s stock cheap now?

Over the past year, Telstra shares have fallen around 18%, underperforming the S&P/ASX 200 Index (ASX: XJO) by 28%. This isn’t what makes it a cheap stock, though.

The slump has pushed Telstra’s price-to-earnings (P/E) ratio down to 19.7 at the time of publication. Notably, the stock hasn’t traded at this valuation since 2017, when it ended the year on a P/E of 13.4.

For context, the current multiple implies that investors are paying $19.70 for every $1 of the company’s earnings.

This is also a significant drop from its peak P/E of 27 in 2022 and a 16% discount from the three-year average multiple of 23.5 times. This is calculated as the average of the P/E multiples recorded at year-end.

This suggests that the current P/E ratio is on the lower end of its three-year range, making it potentially cheap.

Year	P/E multiple (year-end)
2020	21.5
2021	23.1
2022	25.75
Average Current	23.5 19.7

Allan Gray’s investment chief, Simon Mawhinney, echoes this sentiment. Allan Gray first bought Telstra shares in the first quarter of this year, The Australian Financial Review reports.

Mawhinney believes this is one of the rare occasions in the past decade when Telstra is available at a “not unreasonable price”, thanks to its recent decline.

Do analysts think Telstra is a cheap stock?

Goldman Sachs analysts see substantial income potential in Telstra shares, even amid recent disappointments in its trading updates.

The broker has projected fully franked dividends of 18 cents per share for FY 2024 and 18.5 cents per share for FY 2025, according to my colleague James. At the current share price of $3.55, these projections translate to forward dividend yields of approximately 51% and 5.2% for FY 2024 and FY 2025, respectively.

Goldman Sachs maintains a buy rating on the company with a price target of $4.25 per share.

Auburn Capital also rates the telco giant a buy amid the continued downtrend in its share price. According to my Foolish colleague Tristan, the broker values Telstra even higher at $4.50 per share.

On a trailing earnings per share (EPS) of 17.6 cents per share, this valuation implies a P/E of 25.5 times ($4.50 / 0.176 = 25.5) – equal to a 30% value gap at the time of writing. In my opinion, that makes Telstra a cheap stock today.

Can Telstra trade higher?

The market’s reaction to the news Telstra will cut up to 2.800 jobs in April fanned the flames that were already charring the telco’s share price.

Representing almost 10% of the company’s staff headcount, the job cuts are part of a wider strategic review at the company.

In April, Telstra announced a review of its health division, not ruling out a potential sale of the unit. Before that, in 2021, the firm had revealed plans to cut $500 million in costs by 2025.

Known as its “T25 cost reduction ambition”, the blueprints include a planned $200–$250 million in annual restructuring costs over the next two years.

The job cuts and other strategic moves would reduce costs by $350 million in the coming two years, the company recently said.

It noted:

In addition to starting the reset of Telstra Enterprise, Telstra will reshape some of its internal operations by moving its Global Business Services function into other parts of the business.

This will help simplify processes and empower leaders closest to customers to make more decisions.

Telstra’s efforts in cleaning up the business can’t be ignored, in my view and could be grounds for a change in P/E multiple.

Foolish takeaway

Despite a challenging year, I think Telstra’s current valuation and projected dividend yield could present a compelling case.

Trading at a trailing P/E of 19.7, Telstra’s valuation is compressed compared to its historical averages. It is a cheap stock compared to years past.

Just remember, investing comes with risk. Always conduct your due diligence and consider your own personal financial circumstances.

The post Time to pounce? 1 phenomenal ASX stock that hasn’t been this cheap in a while appeared first on The Motley Fool Australia.

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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 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.

Life360 Inc (ASX: 360) shares have returned from their trading halt on Friday and are dropping into the red.

At the time of writing, the location technology company’s shares are down 3.5% to $14.16.

Why were Life360 shares in a trading halt?

The high-flying ASX tech stock was placed into a trading halt yesterday as it finalised its Nasdaq IPO.

This is now complete with Life360 shares trading on Wall Street overnight under the (NASDAQ: LIF) ticker.

And the good news for shareholders is that the company’s shares didn’t have a terrible start to life on the Nasdaq boards. More on that soon.

Nasdaq IPO

After the market close on Thursday, Life360 revealed that it had finalised the pricing of its initial public offering in the United States.

It was offering a total of 5,750,000 shares of its common stock at an initial public offering price of US$27.00 per new share.

Life360 advised that it intends to use the net proceeds it receives from the offering to increase its capitalisation and financial flexibility, to create a public market for its common stock in the United States, and for general corporate purposes, including working capital, operating expenses and capital expenditures.

Management also stated that it “views the Offering and increased exposure to U.S. investors as a natural next-step in its growth.”

What is Life360?

In case you’re not familiar with the company. Life360 is a family connection and safety company aiming to keep people close to the ones they love.

Its category-leading mobile app and Tile tracking devices allow members to stay connected to the people, pets, and things they care about most. This is through a range of services, including location sharing, safe driver reports, and crash detection with emergency dispatch.

At the last count, Life360 was serving approximately 66 million monthly active users (MAU) across more than 150 countries.

Wall Street debut

As I mentioned at the top, Life360 shares were offered at US$27.00 per new share to investors in the United States.

During a relatively subdued session on Wall Street, they traded as low as $26.00 and as high as $27.26.

And at the end of Thursday’s night session they closed at $27.00, which is exactly where they started it.

But with the Nasdaq index falling 0.1%, this can be described as a reasonably positive debut for the tech stock. But perhaps not the explosive start that many investors were hoping for.

The post Life360 shares tumbles after Wall Street debut appeared first on The Motley Fool Australia.

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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 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.

The Australian share market is a great place to generate a passive income.

But which ASX stocks would be good options for income investors right now?

Let’s take a look at three ASX income stocks that analysts have recently named as buys:

Inghams Group Ltd (ASX: ING)

The team at Morgans thinks that income investors should be looking at Australia’s leading poultry producer, Inghams.

Its analysts believe the company’s shares are being undervalued by the market. Particularly given its leadership position and attractive dividend yield. Morgans also highlights that the company is “leveraged to poultry – the affordable, healthy, sustainable and growth protein.” This bodes well for the future.

As for those attractive dividend yields, Morgans is expecting fully franked dividends of 22 cents per share in FY 2024 and then 23 cents per share in FY 2025. Based on the current Inghams share price of $3.67, this equates to dividend yields of 6% and 6.25%, respectively.

Morgans has an add rating and $4.40 price target on its shares.

Orora Ltd (ASX: ORA)

Over at Goldman Sachs, its analysts think that Orora could be an ASX income stock to buy. It is one of the world’s largest packaging companies. It manufactures packaging products such as glass bottles, beverage cans, and corrugated boxes.

Goldman appears to believe a selloff this year has created a buying opportunity for patient investors. Especially given its cheap valuation and above-average dividend yields.

In respect to the latter, the broker is forecasting dividends per share of 12 cents in FY 2024 and 13 cents in FY 2025. Based on the current Orora share price of $2.19, this will mean yields of 5.5% and 5.9%, respectively.

Goldman has a buy rating and $3.00 price target on its shares.

Super Retail Group Ltd (ASX: SUL)

A third ASX income stock to buy could be Super Retail. It is the owner of popular retail brands BCF, Macpac, Rebel, and Super Cheap Auto.

Goldman Sachs is also a fan of Super Retail and thinks it would be a great option for income investors. Especially given its loyalty program. Its analysts continue to “believe that SUL is building a competitive advantage through 11.1mn members and 76% sales to members, which will help drive sales in a more complex operating environment.”

Goldman believes this positions the company to pay fully franked dividends per share of 67 cents in FY 2024 and then 73 cents in FY 2025. Based on the latest Super Retail share price of $13.23, this will mean yields of 5% and 5.5%, respectively.

Goldman has a buy rating and $17.80 price target on its shares.

The post Analysts name 3 ASX income stocks to buy now 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 and Super Retail Group. The Motley Fool Australia has positions in and has recommended Super Retail Group. The Motley Fool Australia has recommended Orora. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Australian share market is home to a large number of listed companies.

However, only a small portion of these can be classed as truly high quality companies.

Examples of this include ASX 100 stocks such as biotech giant CSL Ltd (ASX: CSL) and industrial property company Goodman Group Ltd (ASX: GMG).

But Bell Potter thinks that we should be adding a new ASX 100 stock to the list. That is enterprise technology company TechnologyOne Ltd (ASX: TNE).

What is the broker saying about this ASX 100 stock?

According to a note this morning, the broker believes that TechnologyOne’s quality makes it deserving of a re-rate to higher multiples. It commented:

Technology One has had very consistent and an increasing rate of PBT [profit before tax] growth the last four years: 13% in FY20, 14% in FY21, 15% and FY22 and 16% in FY23. This trend looks set to continue for the short to medium term with VA consensus forecast growth of 16%, 18% and 18% in FY24, FY25 and FY26 which is slightly below our forecasts of 17%, 19% and 19%. In our view this consistent and increasing growth has been a key driver of the PE re-rating in the stock over the last few years from around 30x to now around 40x. If the trend of consistent and increasing growth continues – as both consensus and we expect – then we believe this PE re-rating can continue up to a forward PE of around 50x.

Commenting on its comparison to other quality companies that have re-rated, the broker adds:

What’s interesting, however, is that while all these stocks have had re-ratings largely on the back of strong earnings growth over multiple years, the growth has not been consistent and in some cases has even been quite volatile. We believe, therefore, this is a key differentiator for Technology One in its favour and the comfort the market has in knowing the growth is going be consistent and not spike in one year or sink the next only supports in our view a continued re-rating in the multiple.

Double-digit returns

In light of the above, the broker has reaffirmed its buy rating and lifted its price target on the ASX 100 stock to $20.25.

Based on its current share price of $18.14, this implies potential upside of 11.6% for investors over the next 12 months.

The broker also expects a 1.2% dividend yield, lifting the total potential return to almost 13%.

The post Buy this quality ASX 100 stock that deserves a re-rating like CSL and Goodman appeared first on The Motley Fool Australia.

More reading

• 3 ASX 200 tech stocks that smashed the market in May
• Brokers name 5 fantastic ASX growth shares to buy in June
• Should I buy TechnologyOne shares before they trade ex-dividend on Thursday?
• 4 ASX growth shares to buy to supercharge your portfolio in June
• Here’s how the ASX 200 market sectors stacked up last week

Motley Fool contributor James Mickleboro has positions in CSL and Technology One. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, Goodman Group, and Technology One. The Motley Fool Australia has recommended CSL, Goodman Group, and Technology One. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Australian share market traditionally trades with an average dividend yield of 4%.

While this is a great yield and comparable to what you might find with savings accounts, you don’t have to settle for that.

Not when there are some ASX dividend stocks out there offering significantly larger yields.

In addition, one of these stocks has been tipped to grow its dividend in the coming years, meaning bigger and bigger yields could be coming.

So much so, the ASX dividend stock in this article is forecast by one leading broker to provide a yield as large as 8% in 2026.

The stock in question is Accent Group Ltd (ASX: AX1).

What is Accent?

In case you’re not familiar with Accent Group, let’s take a little look at what it does.

Accent is a footwear retailer and wholesaler which owns and operates a number of footwear businesses in the performance, comfort, and active lifestyle sectors.

This includes many store brands that readers will be familiar with such as The Athlete’s Foot, Platypus, HypeDC, and Stylerunner. In addition, it has the local rights to global brands such as Skechers, Vans, Timberland, Reebok, and Hoka.

Accent also has an emerging presence in youth apparel following the acquisition of Glue Store in 2021.

Big yields expected from this ASX dividend stock

Thanks to the strength of these brands and favourable consumer trends, Bell Potter believes that Accent is well-positioned to reward shareholders with some very attractive dividends in the coming years.

For example, in FY 2024, the broker is forecasting the company to pay a fully franked 13 cents per share dividend. Based on its current share price of $1.98, this will mean a 6.6% dividend yield for investors.

Looking ahead, Bell Potter believes the ASX stock will increase its dividend to 14.6 cents per share in FY 2025. This equates to a fully franked 7.4% dividend yield for anyone buying its shares at current levels.

This trend is expected to continue in FY 2026, with Bell Potter forecasting an increase to 16.4 cents per share. This will mean a very large 8.3% dividend yield for income investors to look forward to receiving that year.

But wait, there’s more! Bell Potter isn’t just expecting outsized dividend yields. It also expects Accent shares to deliver big capital gains over the next 12 months.

The broker has a buy rating and $2.50 price target on them. This implies potential upside of 26% for investors from current levels.

The post This ASX dividend stock is predicted to pay an 8% yield in 2026! appeared first on The Motley Fool Australia.

More reading

• Now could be an opportunity to snap up overlooked ASX shares
• With 6%+ yields, here are 2 ASX dividend shares to consider buying now
• Forget NAB and buy these ASX dividend shares
• 3 Australian shares to help secure your future
• 4 excellent ASX dividend stocks 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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Accent Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.