Category: Stock Market

As we rocket faster than a speeding bullet to the halfway mark of 2023, we asked our Foolish writers which ASX shares they reckon could be set to soar up, up and away!

Here is what the team came up with:

7 best ASX shares for May 2023 (smallest to largest)

• Universal Store Holdings Ltd (ASX: UNI), $360.59 million
• Beach Energy Ltd (ASX: BPT), $3.35 billion
• Altium Limited (ASX: ALU), $5.02 billion
• Allkem Ltd (ASX: AKE), $7.81 billion
• Treasury Wine Estates Ltd (ASX: TWE), $10.06 billion
• James Hardie Industries Plc (ASX: JHX), $14.80 billion
• Telstra Group Ltd (ASX: TLS), $50.49 billion

(Market capitalisations as of market close 28 April 2023).

Why our Foolish writers love these ASX stocks

Universal Store Holdings Ltd

What it does: Universal Store is a retailer focused on premium youth apparel. It operates three different brands – Universal Store, Thrills and Perfect Stranger.

By Tristan Harrison: I think this ASX All Ords share could deliver good returns over the next few years.

In its FY23 half-year result, the company delivered statutory profit growth of 31.7% and declared an interim dividend of 14 cents per share.

Using the forecast numbers on Commsec, Universal Store shares are valued at just 11x FY23’s estimated earnings with a potential grossed-up dividend yield of 8.1%.

I believe the business can continue to grow as it opens more stores, expands the Perfect Stranger brand nationally, benefits from increased scale and achieves greater efficiencies through its new distribution centre.

Motley Fool contributor Tristan Harrison does not own shares in Universal Store Holdings Ltd.

Beach Energy Ltd

What it does: Beach Energy is an oil and gas producer based in South Australia. The company has numerous onshore and offshore projects in New Zealand and Australia. It’s a key gas supplier to Australia’s east coast markets.

By Bernd Struben: Beach Energy shares are down 6% in 2023, which I think presents a good entry point.

Oil and gas prices have come off the boil, but I believe energy prices will rebound once global interest rates peak and recession fears ebb.

While Beach reported a 5% decline in third-quarter production, that was mostly due to expected and unexpected outages, and the company did maintain its guidance.

Looking ahead, Beach has significant potential to increase production, with first gas from its Waitsia Gas Plant targeted by the end of 2023.

The company’s balance sheet is strong, with total liquidity of $504 million as at 31 March.

Beach pays a trailing dividend yield of 2.0%, fully franked.

Motley Fool contributor Bernd Struben does not own shares in Beach Energy Ltd.

Altium Limited

What it does: Founded in 1985, Altium provides software for designing printed circuit boards (PCBs). Think of the company as the digital toolkit for designing the technology responsible for powering modern-day devices – from electric vehicles to smart vacuum cleaners.

By Mitchell Lawler: Despite Altium making strides in growing the business over the past few years, the share price is still fluctuating between $25 and $40. This is probably due to the lack of earnings growth over this period. However, I believe this could be set to change. 

Earnings margins ultimately come down to pricing power. In the PCB design space, there are two big names: Altium and Cadence. Both companies are growing their revenue aggressively and maintaining profit margins above 20%. 

This leads me to think there could be a duopoly forming in the industry, which would allow both companies to lift their prices. Mastercard and Visa are prime examples of this, now touting margins greater than 40%.

Motley Fool contributor Mitchell Lawler does not own shares in Altium Limited.

Allkem Ltd

What it does: Allkem is the lithium mining giant formed by the merger of Galaxy Resources and Orocobre in 2021.

By James Mickleboro: Although lithium prices have taken a tumble in recent months and look likely to keep falling for some time, I’m still positive on Allkem shares. This is due to the company’s production growth plans for its massive projects across the Americas and Australia.

Management aims to grow Allkem’s lithium carbonate equivalent (LCE) production by >4x over the five years to FY 2028. I expect this production growth to help offset lithium price declines and keep the company’s profits strong for the foreseeable future.

Another reason I would buy Allkem stock is its valuation. At 0.9x net asset value (NAV), the ASX 200 share looks meaningfully cheaper than rivals, which trade on a peer average of ~1.3x NAV. It is partly for this reason that Goldman Sachs currently has a buy rating and a $12.90 price target on Allkem shares.

Motley Fool contributor James Mickleboro owns shares of Allkem Ltd.

Treasury Wine Estates Ltd

What it does: Treasury Wine is the company behind iconic Australian wine labels such as Penfolds, Wolf Blass, and 19 Crimes.

By Brooke Cooper: The Treasury Wine share price has been on a roll lately.

It’s lifted more than 50% from the lows it reached in 2021 amid wine tariffs imposed by China in response to political tensions. And I think it has scope to continue gaining.

Treasury Wine reported a 17% jump in earnings before interest, tax, SGARA, and material items for the first half of the financial year.  Not to mention, there looked to be positive news on the tariff front last month.

I’m not alone in my bullishness. Goldman Sachs has a buy rating and a $14.70 price target on Treasury Wine shares.

Motley Fool contributor Brooke Cooper does not own shares in Treasury Wine Estates Ltd.

James Hardie Industries Plc

What it does: James Hardie is the world’s leading producer and marketer of fibre-cement wall and floor products used in new residential, commercial, and industrial construction.

By Bronwyn Allen: James Hardie shares steadily tumbled throughout 2022.

This was due to rising inflation and interest rates, as well as global supply disruptions and labour shortages that created significant delays in housing construction activity.

But, it appears all that could be now turning around, providing tailwinds for an ASX 200 share that many experts believe has been oversold.

Brokers have been recommending James Hardie as a buy since the start of 2023, and its share price is now up by almost 30% in the year to date.

It may not be too late to buy, though. Citi says the company is trading on an attractive FY24 “trough earnings” multiple of 19, and the stock price is still a long way off its historical peak of $58.07, reached in December 2021.

Motley Fool contributor Bronwyn Allen owns shares in James Hardie Industries Plc.

Telstra Group Ltd

What it does: Telstra is a company almost all Australians would be familiar with. It is the largest and most dominant telco in Australia, offering a range of mobile and fixed-line internet and telephony services.

By Sebastian Bowen: I believe Telstra is an ASX 200 share worth a second look in May. This telco has been on a bit of a tear this year, rising from under $4 a share at the start of the year to the $4.30 range we are seeing more recently. Telstra also hit several new 52-week highs at the end of April too.

I like Telstra because of its inelastic customer demand and strong brand. This is a blue-chip stock that should do well in all economic climates.

Many brokers think Telstra stock has further to run as well. Last month, Morgans had Telstra on its best buys list, with a share price target of $4.70.

Motley Fool contributor Sebastian Bowen owns shares in Telstra Group Ltd.

The post Top ASX shares to buy in May 2023 appeared first on The Motley Fool Australia.

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More reading

• 6 excellent ASX 200 dividend shares that aren’t banks or miners
• These are the ASX 200 lithium shares to buy due to a new ‘game changing’ technology
• Bought Telstra shares last June? Guess what kind of dividend yield you’re earning today
• Here are the top 10 ASX 200 shares today
• Nasdaq rebound! Brokers say these ASX 200 tech shares are buys

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium, Cadence Design Systems, Mastercard, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2025 $370 calls on Mastercard and short January 2025 $380 calls on Mastercard. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Mastercard and Treasury Wine Estates. 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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Pilbara Minerals Ltd (ASX: PLS) shares had a strong finish to the week.

The lithium miner’s shares rose 7.5% on Friday to end the period at $4.24.

This followed the release of the company’s third-quarter update, which went down well with investors despite falling short of the market’s expectations.

What are brokers saying about Pilbara Minerals shares

A number of brokers have been looking over the company’s update and have given their verdict on it and Pilbara Minerals’ shares.

Let’s start with Citi, which wasn’t expecting the market to respond positively to the release. However, with the broker believing that we could be at the end of the downstream destocking cycle, it remains positive and reiterated its buy rating and $4.60 price target. It said:

PLS reported operating cashflow of ~$920m, down 3% QoQ but better than SepQ. Cash now A$2.68bn, +0.46bn QoQ. Average selling price down 15% QoQ to US$4840/t or US$5,522 on a SC6 basis vs spot US$4671/t. PLS expects softening prices into JunQ until chemicals pricing stabilises. Production guidance is maintained with costs nudged up. Conference call is tomorrow at 9AM AEST and will likely focus on downstream strategy, pricing environment and ramp up of plant throughput. We expect a market reaction to the downside. Maintain Buy on our view that we are probably at the end of the downstream destocking cycle.

Over at Goldman Sachs, its analysts weren’t overly impressed with the update. However, they retained their neutral rating with a new $4.10 price target. The broker commented:

Pilgangoora achieved an average realised price of US$4,840/t (US$5,522/t SC6.0 CIF China), down ~15% QoQ and ~10% below GSe/consensus, including a spot sale of 15kt based on a new pricing model linked to tolling lithium hydroxide. PLS anticipates continued softening of spodumene prices into the June quarter until pricing for lithium chemicals stabilises, including domestic pricing in China, with this expected to continue in the short term with pricing potentially strengthening in 2H as restocking of inventory levels in China occurs across the supply chain.

‘Softer than we’d hoped’

Morgans was also disappointed but believes there’s value on offer with Pilbara Minerals shares. It has retained its add rating with a reduced price target of $5.00. It said:

3Q production met expectations (-1% on forecast) but pricing was softer than we’d hoped (-5% on forecast, -15% qoq). Realised prices will continue to soften in the coming quarters and we have reduced our forecasts given weak chemical pricing. This reduces our price target to $5ps (- 6%). We still see upside to our DCF valuation and there is the potential for short-term price momentum when the Chinese market strengthens.

The post Here’s what brokers are saying about Pilbara Minerals shares appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy next week
• 2 ASX lithium shares this US institutional investor is buying up big (and one it’s selling)
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Why Appen, Megaport, Mirvac, and Pilbara Minerals shares are pushing higher today

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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Are you searching for big dividend yields? If you are, then read on because listed below are two ASX dividend shares that offer investors big yields.

Here’s what you need to know about these ASX dividends shares:

Accent Group Ltd (ASX: AX1)

This retailer could be an ASX dividend share to buy for income investors. It is the fashion and footwear retailer behind brands including Hype DC, The Athlete’s Foot, Glue, and Platypus.

The team at Goldman Sachs is very positive on the company. In fact, it believes the market is overlooking just how positive its outlook is. The broker highlights its expansion potential and exposure to younger consumers as reasons to buy. Particularly given how the latter have less exposure to rising rates and stand to benefit from increases to the minimum wage.

Goldman currently has a buy rating and $3.10 price target on its shares.

As for dividends, Goldman is forecasting a fully franked dividend of 15 cents per share in FY 2023. Based on the current Accent share price of $2.54, this will mean a generous yield of 5.9%.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

Another option for income investors to consider is actually an ETF. The Vanguard Australian Shares High Yield ETF gives investors with exposure to ASX dividend shares that have higher than average forecast dividends based on broker research.

But rather than just loading up on banks and miners, the ETF has a diverse group of holdings and restricts the proportion invested in any one industry to 40% and 10% for any one company.

Among the ASX dividend shares that you’ll be owning a slice of with this ETF are giants such as BHP Group Ltd (ASX: BHP), Coles Group Ltd (ASX: COL), Commonwealth Bank of Australia (ASX: CBA), and Telstra Corporation Ltd (ASX: TLS).

At present, the Vanguard Australian Shares High Yield ETF trades with an estimated forward dividend yield of 5.5%.

The post These ASX dividend shares have big yields appeared first on The Motley Fool Australia.

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More reading

• Is the Vanguard Australian Shares High Yield ETF (VHY) a strong ASX buy for passive income?
• Get a passive income boost from these ASX dividend shares: analysts
• 2 fantastic ETFs for ASX investors to buy next week
• 5 steps to bring in $1,000 per month in passive income
• The Accent share price has soared 100% in 6 months. Is it still a buy?

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 positions in and has recommended Coles Group and Telstra Group. The Motley Fool Australia has recommended Accent Group and Vanguard Australian Shares High Yield ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Last week saw a number of broker notes hitting the wires once again. Three buy ratings that investors might want to be aware of are summarised below.

Here’s why brokers think investors ought to buy them next week:

Mineral Resources Ltd (ASX: MIN)

According to a note out of Morgans, its analysts have retained their add rating on this mining and mining services company’s shares with a trimmed price target of $103.00. Although the broker was a touch underwhelmed with Mineral Resources’ quarterly performance, the result does not impact its very positive longer-term investment view on the company. As a result, it continues to see plenty of value in its shares at the current level. The Mineral Resources share price ended the week at $73.68.

Pilbara Minerals Ltd (ASX: PLS)

A note out of Citi reveals that its analysts have retained their buy rating and $4.60 price target on this lithium miner’s shares. This follows the release of a quarterly update that was short of expectations, particularly in regard to lithium pricing. However, Citi is overlooking this on the belief that we are probably at the end of the downstream destocking cycle. The Pilbara Minerals share price was fetching $4.24 at Friday’s close.

Xero Limited (ASX: XRO)

Analysts at UBS have upgraded this cloud accounting company’s shares to a buy rating with an improved price target of $109.00. According to the note, UBS believes that Xero is well-placed to deliver stronger than expected free cash flow in the coming years. This is due to its belief that the company’s strong growth will continue despite its recent cost reductions initiative. The Xero share price was trading at $93.34 on Friday afternoon.

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

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More reading

• 2 ASX lithium shares this US institutional investor is buying up big (and one it’s selling)
• Here are the top 10 ASX 200 shares today
• Nasdaq rebound! Brokers say these ASX 200 tech shares are buys
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Why Appen, Megaport, Mirvac, and Pilbara Minerals shares are pushing higher today

Motley Fool contributor James Mickleboro has positions in Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Xero. 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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S&P/ASX 200 Index (ASX: XJO) stock Inghams Group Ltd (ASX: ING) could be the source of appealing passive income in the form of dividends. It could play a part in an investor’s nest egg.

Inghams is the largest integrated poultry producer in Australia and New Zealand. While chickens are the core part of the business, it’s also involved with the production of turkey and stock feed.

The ASX agriculture share has been through a lot of volatility over the last few years as it suffers from inflation impacts.

Inghams earnings recap

Inghams’ recent FY23 half-year result showed some of the pain that the business has gone through over the prior 12 months. While core poultry volume was only down 0.6% year over year, the underlying earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 12.2% to $210.2 million and the underlying net profit after tax (NPAT) fell 13.1% to $26.6 million.

But, the comparison to the FY22 second half numbers shows how much the business has already started showing an improvement. Half-over-half, underlying EBITDA rose 32.7% and underlying NPAT was up 885.2%.

Consumer demand returns

Inghams said in the result that poultry demand was seeing “healthy growth” as consumer activity returned to pre-COVID patterns. An industry-wide reduction of chicken volume for sale has underpinned a “favourable pricing environment”. That sounds positive for its ability to pay passive income in the coming periods.

While it was still seeing cost inflation, the company said it was “focused on ensuring customer pricing levels appropriately reflect these ongoing feed and inflationary cost pressures and will pass on further price increases as required.” The company added:

The poultry sector remains a growing sector, holding a significant and growing affordability advantage over red meat and seafood alternatives which is particularly attractive in the current inflationary environment.

Importantly, ongoing discussions with key customers highlights their strategic focus on the poultry segment, reaffirming our optimism for the category over the medium to longer term.

It’s with that in mind that there are projections for good dividends in the next few years from Inghams.

$300 goal of monthly passive income from the ASX 200 stock

In FY24, the business could generate 21.6 cents of earnings per share (EPS) and pay a dividend per share of 14.8 cents (according to Commsec), which would equate to a forward grossed-up dividend yield of 7.5%.

If we think about the monthly $300 target, Inghams doesn’t actually pay monthly. But, we can think of the target of a $3,600 goal which is then divided into 12 equal amounts.

Investors would need 24,325 Inghams shares to get $3,600 of annual passive income in FY24. This many shares would currently come at a cost of around $68,000.

But, that cost could be reduced if we think further ahead to the FY25 payout. Commsec numbers suggest that the ASX 200 stock could pay a total dividend per share of 17.4 cents per share. To achieve $3,600 of annual dividend income with that goal in mind, we’re talking about 20,690 Inghams shares for a cost of around $58,000.

Diversification is a good idea in a passive income portfolio, I wouldn’t put all my eggs in one basket with Inghams, But, I think it can deliver good dividends and growth over the next few years.

The post Want $300 in monthly passive income? Buy 24,300 shares of this ASX 200 stock appeared first on The Motley Fool Australia.

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More reading

• These were the best-performing ASX 200 shares in April
• Looking to buy ASX 200 iron ore shares? Here are 5 reasons not to
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Friday
• 5 things to watch on the ASX 200 on Friday

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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When it comes to making an investment, it is always best to understand why some investors are bullish on an ASX share and why others are bearish.

Failure to do this could leave you nursing a heavy loss because of something you had not even considered to be a risk.

To give you an example of this, let’s take a look at BHP Group Ltd (ASX: BHP) shares.

Bullish and bearish factors

Fortunately, in a recent note from Morgans, its analysts have laid out three bull points and three bear points for investors to consider.

Let’s start with its bull points. These include its exposure to China’s reopening, its production growth plans, and its relative safety. In respect to the former, it commented:

BHP’s quality and robust fundamentals positions it as a key way to play a recovery in China’s COVID-impacted growth. We also see this fueled by BHP’s basket of commodity exposures. This could also benefit from an improvement in ex-China world fears of a global recession.

As for production growth, the broker said:

BHP is alone amongst the major iron ore miners in planning meaningful production growth. We expect it will get the required approvals to expand to 330mtpa in the medium term. While Jansen (potash) continues to shape up as a solid fifth pillar.

Finally, another reason to be bullish on BHP shares is the broker’s view that the Big Australian is a safer than average option in the mining sector. It adds:

BHP’s operational performance has shown considerable resilience against current sector headwinds. While its balance sheet and dividend profiles are supportive.

Bearish points

A few bearish points for investors to consider before buying BHP shares include a potential turn in the mining cycle, M&A appetite, and cost pressures. On the first point, it commented:

Every cycle is different, and the changing of cycle phases is only usually obvious when it is in the rear vision mirror. A significant slowdown in China, combined with the risk of a global recession, should not be taken lightly, and could materially impact BHP’s earnings if metal prices weaken.

And while its point about M&A activity isn’t as relative now its acquisition of OZ Minerals is signed and sealed, it is food for thought for future deals. It said:

BHP may increase its offer for OZL, but there is a risk it continues to get more aggressive in layering in new growth into its business.

Finally, the broker feels investors should consider cost inflation and how that could impact its operations. It concludes:

Inflationary pressures across BHP’s global business have proven volatile over the last 6 months, and may not moderate the way we had hoped, impacting margins.

Should you buy?

Based on the sum of the above and the current valuation of BHP shares, Morgans believes the risk/reward is favourable for investors.

As a result, it has given BHP shares the equivalent of a buy rating with a $50.40 price target.

The post Bull and bear factors impacting BHP shares appeared first on The Motley Fool Australia.

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More reading

• Looking to buy ASX 200 iron ore shares? Here are 5 reasons not to
• Top brokers predict BHP shares to surge past $50 again in 2023
• Morgans says ‘attractive buying opportunity’ coming for BHP shares
• 3 ASX 200 stocks brokers just upgraded to ‘buy’
• Top brokers name 3 ASX shares to buy today

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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Warren Buffett is one of the richest people on earth, commanding a net worth of nearly US$115 billion today, according to Forbes.

But that wasn’t always the case. Indeed, he famously amassed 99% of his wealth after his fiftieth birthday.

The billionaire behind Berkshire Hathaway made the most of his fortune by investing in the stock market – earning him the title ‘Oracle of Omaha’ and admiration from value investors everywhere.

That’s why I’d turn to Buffett wisdom if I had no savings and an ambition to build wealth.

First things first

If I had absolutely nothing in the bank and a desire to invest in the stock market, the first thing I’d do is assess my financial situation. That means making a budget.

From there, I’d commit to setting aside a certain amount each week or month, even if it doesn’t seem like much.

Initially, that cash would go towards paying off high-interest debt and building a safety net in case of emergency.

Only after that would I use my spare money to consistently invest in ASX shares capable of growing over the years and decades to come.

Warren Buffett looks to the horizon

You’ve likely heard the phrase ‘money doesn’t grow on trees’. Similarly, wealth is rarely built overnight.

It makes sense, then, that Buffett is famously a long-term investor. In fact, he’s held some of his best investments for two decades. He once said:

I buy on the assumption that they could close the market the next day and not reopen it for five years.

That means buying shares in companies you truly believe can outperform over the long term when they’re trading at attractive prices.

To follow in Buffett’s footsteps, I’d personally look for stocks that offer competitive advantages over their peers, boast a strong balance sheet, and have the potential to grow.

Diversification is key

But, since investing in just one such share brings some major risks, I’d also aim to build a portfolio of diverse ASX shares.

That way, if a single company or sector experiences a major downturn, it won’t drag my whole portfolio down with it.

It’s the same idea for the winners. By investing in a variety of shares, I stand more of a chance to find myself holding the market’s next big success story. As Buffett said earlier this year:

The weeds wither away in significance as the flowers bloom. Over time, it takes just a few winners to work wonders.

Finally, Warren Buffett takes advantage of compounding

Albert Einstein is widely quoted as having dubbed compound interest “the eighth wonder of the world” and Buffett has attributed his fortune, in part, to the phenomenon.

Compound interest (or compounding) is, to put it simply, realising gains on your gains.

By reinvesting your earnings – or dividends – back into the stock market, it’s possible to realise more returns without forking out additional cash.

It’s a powerful wealth-building tool that requires a decent degree of patience. Indeed, the final quote I’ll leave you with comes not from Buffett, but from Berkshire Hathaway vice chair Charlie Munger, who once said:

The first rule of compounding: Never interrupt it unnecessarily.

The post No savings? I’m using the Warren Buffett method to build wealth from scratch appeared first on The Motley Fool Australia.

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More reading

• 6 excellent ASX 200 dividend shares that aren’t banks or miners
• 3 top quality ETFs for ASX investors to buy and hold for 10 years
• These were the best-performing ASX 200 shares in April
• Dividend income beasts: 2 ASX 200 shares offering big yields
• Looking to buy ASX 200 iron ore shares? Here are 5 reasons not to

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 Berkshire Hathaway. The Motley Fool Australia has recommended Berkshire Hathaway. 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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Believe it or not, the S&P/ASX 200 Index (ASX: XJO) is not a very diverse universe of 200 businesses.

The finance (27.1%) and materials (25.6%) sectors together make up more than half of the index weight, according to S&P Global.

“According to Morgan Stanley, Australian retail investors own roughly 48% of the big four [banks]’s float as of late 2022,” the Global X Research team said on a blog post.

“Miners made up the majority of the top 10 most purchased shares on CommSec and CMC – the two largest retail brokerage platforms by market share – over the past 12 months. 

This means that if you already own shares in an exchange-traded fund (ETF) that tracks the ASX 200, you are already substantially invested in these industries.

So when it comes to picking specific dividend shares, it might be worth diversifying away from banks and miners.

Earnings sustainability leads to the ‘best income producers’

Shaw and Partners portfolio manager James Gerrish was recently asked what his favourite dividend stocks are outside of finance and resources.

Firstly, he warned high yields don’t always make the best investments.

“Important to recognise that we don’t simply look at the size of the dividend,” Gerrish said in a Market Matters Q&A.

“We focus more on the sustainability of the underlying earnings and that will generally translate into good income over time.”

With that caveat, he named these six stocks as the best income producers:

ASX 200 stock	Dividend yield
Telstra Group Ltd (ASX: TLS)	3.72%
Wesfarmers Ltd (ASX: WES)	3.59%
Metcash Limited (ASX: MTS)	5.63%
Centuria Capital Group (ASX: CNI)	6.49%
APA Group (ASX: APA)	5.1%
AGL Energy Limited (ASX: AGL)	2.1%

Gerrish’s team doesn’t currently own shares in APA Group or AGL, but would buy into them if a dip came along.

Both Telstra and Wesfarmers have already performed strongly this year, gaining 9.75% and 14.8%, respectively, year to date.

Grocery provider Metcash has risen 2.5% this month, while Centuria has rocketed 13.25%.

The post 6 excellent ASX 200 dividend shares that aren’t banks or miners appeared first on The Motley Fool Australia.

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More reading

• Why did the Wesfarmers share price perform so well in April?
• Bought Telstra shares last June? Guess what kind of dividend yield you’re earning today
• Brokers name 3 ASX shares to buy now
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• ‘Well placed for strong growth’: 3 ASX 200 shares that hit the spot right now

Motley Fool contributor Tony Yoo 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 APA Group, Telstra 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.

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I think that buy and hold investing is one of the best ways to take advantage of the magical power of compounding and grow your wealth over the long term.

However, not everyone has the time to research which ASX shares might be good buy and hold options.

But don’t worry if you fall into that category, because there is a solution – exchange traded funds (ETFs).

ETFs allow investors to buy large groups of shares from different indices, sectors, or countries in one fell swoop. This could make them a great choice for anyone that is short on time but wants to put their money to work in the share market.

With that in mind, listed below are three excellent ASX ETFs that could be top buy and hold options for investors. They are as follows:

BetaShares NASDAQ 100 ETF (ASX: NDQ)

The BetaShares NASDAQ 100 ETF could be a top buy and hold option for investors. You only need to look at the shares included in the fund to understand why. Among its 100 holdings are some of the highest quality companies in the world. This includes Google parent Alphabet, Amazon, Apple, Facebook owner Meta, Microsoft, and Tesla.

VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)

Another ASX ETF that could be a top buy and hold option is the VanEck Vectors Morningstar Wide Moat ETF. It provides investors with easy access to a group of shares that have fair valuations and sustainable competitive advantages or moats (hence its name). The ETF generally comprises approximately 50 companies with these qualities. At present, this includes the likes of Adobe, Alphabet, Boeing, Kellogg Co, Meta, and Walt Disney.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

Finally, the Vanguard MSCI Index International Shares ETF could be another great buy and hold option for investors. This popular ETF gives investors access to approximately 1,500 of the world’s largest listed companies, which provides significant diversity for a portfolio. There are a good number of global giants held by the ETF. This includes Amazon, Apple, Nestle, Procter & Gamble, Tesla, and Visa.

The post 3 top quality ETFs for ASX investors to buy and hold for 10 years appeared first on The Motley Fool Australia.

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More reading

• 3 top ASX ETFs hitting new 52-week highs on Friday
• Sunk $5,000 into the Betashares Nasdaq 100 ETF (NDQ) in 2020? Here’s how much passive income your investment has provided
• 3 highly rated ETFs for ASX investors to buy in May
• I think this underrated reason is key to why ETFs can be great investments
• 3 quality ASX ETFs for investors to buy for the long term

Motley Fool contributor James Mickleboro has positions in BetaShares Nasdaq 100 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended BetaShares Global Cybersecurity ETF and BetaShares Nasdaq 100 ETF. The Motley Fool Australia has positions in and has recommended BetaShares Global Cybersecurity ETF and BetaShares Nasdaq 100 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It was a volatile but positive month for the S&P/ASX 200 Index (ASX: XJO) in April. Over the period, the benchmark index recorded a decent 1.8% gain to finish at 7,309.2 points.

While a good number of ASX 200 shares climbed with the market, some recorded stronger gains than others.

For example, the shares listed below smashed the market after launching higher in April. Here’s why they were on fire:

Megaport Ltd (ASX: MP1)

The Megaport share price was the best performer on the ASX 200 index in April with a 37% gain. Interestingly, this network services company’s shares were on course to record a disappointing monthly decline until the final trading day of the month. However, the release of a surprisingly positive quarterly update appears to have caused a short squeeze and led to Megaport’s shares rocketing over 40% higher on Friday.

Blackmores Ltd (ASX: BKL)

The Blackmores share price wasn’t far behind with a gain of 35% in April. This was driven by news that Japan’s Kirin has tabled a $95 cash per share takeover offer for the health supplements company. Blackmores has accepted the offer and will now let shareholders vote on it at an upcoming meeting. The deal values Blackmores at $1.85 billion.

Pointsbet Holdings Ltd (ASX: PBH)

The Pointsbet share price was on form and charged 27% higher last month. Investors were buying this sports betting company’s shares amid speculation that it will soon offload some of its operations. The most recent speculation is that PointsBet could sell its US operations for US$500 million and keep hold of its Australian arm. This would be more than its current market capitalisation.

Corporate Travel Management Ltd (ASX: CTD)

The Corporate Travel Management share price was also a strong performer and rose 16% over the period. A key driver of this was the announcement of a major contract win. The corporate travel specialist won the Bridging Accommodation and Travel Services contract from the UK Home Office. Management estimates it to be worth nearly £1.6 billion in total transaction volume (TTV) over two years, which equates to approximately $3 billion Australian dollars.

The post These were the best-performing ASX 200 shares in April appeared first on The Motley Fool Australia.

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More reading

• Looking to buy ASX 200 iron ore shares? Here are 5 reasons not to
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Another ASX company to disappear
• Why Appen, Megaport, Mirvac, and Pilbara Minerals shares are pushing higher today

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 Megaport and PointsBet. The Motley Fool Australia has recommended Blackmores, Corporate Travel Management, Megaport, and PointsBet. 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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