Category: Stock Market

Goldman Sachs has been busy running the rule over the lithium industry again this week.

And while the broker remains bearish on the price of the battery making ingredient, it is starting to see value in ASX lithium shares following recent weakness. It commented:

With lithium prices continuing to decline, and stock prices pulling back, we expect increased focus on finding defendable value in the sector, noting the Australian lithium sector is still largely flat YTD. While we remain cautious as these declines and our lowered CY23 lithium forecasts come through realised pricing/earnings on a lagged basis, we see emerging fundamental value in the sector.

Which ASX lithium shares does Goldman like?

Goldman has buy ratings on just two ASX lithium shares following its recent downgrade of Mineral Resources Ltd (ASX: MIN) to a neutral rating.

These are Allkem Ltd (ASX: AKE), which it has been bullish on for some time, and IGO Limited (ASX: IGO), which has been upgraded to a buy rating from neutral today.

In respect to valuations, Goldman has a price target of $13.20 on Allkem’s shares and a price target of $13.90 of IGO’s shares. This implies potential upside of 19% and 10%, respectively, over the next 12 months for investors.

Why is it bullish?

Goldman advised that it is bullish on these ASX lithium shares due to their low costs, production growth potential, and vertical integration. It explains:

With our continued expectation that low cost producers with growth optionality & vertical integration will be more defensive and best placed for future opportunities, we reiterate our preference for Allkem (Buy) and upgrade IGO to Buy.

In light of the above, the broker believes that “IGO and AKE deserve to trade at a premium to peers.”

Elsewhere, Goldman has maintained its neutral ratings on Liontown Resources Limited (ASX: LTR) and Pilbara Minerals Ltd (ASX: PLS) shares, as well as its sell rating on Core Lithium Ltd (ASX: CXO) shares.

The post Goldman Sachs names the ASX 200 lithium shares to buy (and avoid) appeared first on The Motley Fool Australia.

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More reading

• Does the Pilbara Minerals share price fall finally make it a no-brainer buy?
• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Why Future Generation, Pilbara Minerals, Platinum, and Whitehaven Coal shares are dropping

Motley Fool contributor James Mickleboro has positions in Allkem. 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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Most investors target particular ASX shares chasing either growth or passive income from dividends. But some of the best ASX shares give their investors the best of both worlds. They are hard to find, and often their lucrativeness is only obvious in hindsight.

So today, let’s take a look at two ASX shares that might just fit the bill of providing both capital growth potential and dividend income.

2 ASX shares that could deliver both growth and dividends

WiseTech Global Ltd (ASX: WTC)

ASX 200 logistics share Wisetech has been a poster child for growth investors for years now. And fair enough too. The Wisetech share price has rocketed 567% over the past five years alone and is up an extraordinary 1,540% since 2016. And the growth doesn’t look to be slowing down either.

Earlier this year, WiseTech reported its latest half-year earnings, and they were a pretty sight. The company revealed a 35% rise in revenues, as well as a 40% surge in underlying net profit after tax (NPAT) to $108.5 million.

But Wisetech has also been quietly growing its dividends too.

Back in 2017, the company paid out a total of 2.2 cents per share in dividends. But by 2022, this had grown to 11.2 cents per share, up more than 400% from 2017. 2023’s Wisetech interim dividend of 6.6 cents per share was also a significant 39% increase over the corresponding dividend of 4.75 cents in 2022.

TechnologyOne Ltd (ASX: TNE)

Another ASX 200 tech share, enterprise software products company TechnologyOne is next up today. This is another company whose share price has followed its profitability growth over recent years.

Since 2018, the TechnologyOne share price has risen by an impressive 195%. In its most recent earnings from November last year (covering FY2022), TechnologyOne reported an 18% rise in revenues, as well as a 22% surge in NPAT to $112.32 million.

But again, it’s not just share price growth that investors have banked on. Back in 2018, TechnologyOne shares doled out a total of 11 cents per share in dividends. But by 2022, this had risen to 17 cents per share up more than 54%.

So here we have another ASX 200 share that has demonstrated a strong track record of providing both share price growth and a rising dividend.

 

The post Want growth and passive income? Here are the ASX shares I’d buy for the best of both worlds appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Thursday
• Big Wednesday: 12 ASX 200 stocks cracking new 52-week highs
• 7 ASX 200 stocks smashing new 52-week highs on Monday
• Top ASX shares to buy in April 2023
• How I’d aim to retire rich enough to live on passive income from my ASX dividend shares

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 positions in and has recommended Technology One and WiseTech Global. The Motley Fool Australia has positions in and has recommended WiseTech Global. The Motley Fool Australia has recommended Technology One. 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) energy shares are outpacing the benchmark today.

The ASX 200 is down 0.22% in late morning trading after heading lower from the open.

However, the big energy stocks are helping drive the S&P/ASX 200 Energy Index (ASX: XEJ) significantly higher, up 0.48%.

At the time of writing, the Santos Ltd (ASX: STO) share price is up 0.35%.

Meanwhile, rival ASX 200 energy share Woodside Energy Group Ltd (ASX: WDS) is marching 0.59% higher at this same time.

What’s helping lift these ASX 200 energy shares?

The Santos and Woodside share prices both look to be benefiting from rising crude oil prices.

In fact, US West Texas Intermediate (WTI) hit its highest level in 2023 overnight, trading for US$83.26 per barrel. That’s up 24.7% from the recent lows of US$66.74 per barrel WTI was fetching on 17 March.

Brent crude is also nearing 2023 highs, reaching US$87.33 per barrel overnight. That same barrel was trading for US$72.97 on 17 March.

The oil price, and by connection these ASX 200 energy shares, have been marching higher largely due to supply-side issues.

While the market remains concerned about a potential global recession denting energy demand, the recent production cuts by OPEC+ look to be achieving what the cartel’s members hoped. ‘Plus’ member Russia’s oil shipments were reported to have fallen to the lowest levels in two months.

Declining US inventories also look to be supporting the higher oil price.

Commenting on the market moves, market analyst at StoneX Fawad Razaqzada, pointed to the latest inflation report out of the United States.

“The weaker US CPI print has raised doubts over whether the Fed will now hike rates at all next month,” he said (quoted by Reuters). “Falling interest-rate expectations is reducing recession concerns and helping to support buck-denominated asset prices at the same time.”

With oil still priced in greenbacks, a lower US dollar forecast looks to be good news for ASX 200 energy shares Santos and Woodside today.

The post <strong>ASX 200 energy shares Santos and Woodside outperforming as oil hits new 2023 highs</strong> appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Thursday
• 5 things to watch on the ASX 200 on Wednesday
• Best ASX energy share to buy now: Woodside vs. Santos
• Banking and energy: The ASX 200 dividend shares to buy now according to analysts
• Invested $12,000 in Woodside shares in 2018? Here’s how much dividend income you’ve earned

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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The share price of $32 million battery metals explorer Future Battery Minerals Ltd (ASX: FBM) is launching higher this morning following a significant lithium discovery.

Drilling at the company’s 80%-owned Nevada Lithium Project has uncovered lithium-bearing claystone, including one intercept the explorer is “extremely excited” about.

The Future Battery Minerals share price is surging 25% at the time of writing to trade at 10 cents.

Let’s take a closer look at the news driving the ASX battery share sky-high today.

ASX critical minerals stock leaps 31% on Thursday

The Future Battery Minerals share price is leaping on findings dubbed by company technical director Robin Cox as “an exceptional start to … early-stage exploration efforts”.

Of the findings from the maiden drill program conducted at the Nevada Lithium Project, the company is most excited about one of four drill holes conducted at the project’s Western Flats.

Assay results from WF23-011 returned 109.7 metres at 766 parts per million lithium, exhibiting a significant high-grade component. The intercept remains open to the south and west, leaving the potential for more lithium discoveries.

Cox commented that the results have so far “exceeded all expectation”. The company is planning to kick off phase two drilling later this quarter.

It’s also currently drilling at its 80%-owned Kangaroo Hills Lithium Project, located in Western Australia. Assays confirmed spodumene-bearing lithium-caesium-tantalum pegmatites at the project last month.

Future Battery Minerals chair Mike Edwards commented on the news driving the ASX explorer’s share price today, saying:

In a short space of time the company has delivered two high potential lithium discoveries, cementing our position as an aggressive and effective explorer for lithium.

In addition, we are also continuing work to realise the significant value from the company’s three Western Australia located nickel sulphide assets.

Future Battery Minerals share price snapshot

This year has been a good one so far for the Future Battery Minerals share price on the ASX. Though its longer-term performance hasn’t been quite so prosperous.

The stock has roared 96% so far this year. Though, it’s fallen 23% over the last 12 months.

The post ‘Exceeded all expectation’: Guess which tiny ASX battery share is launching 25% today appeared first on The Motley Fool Australia.

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More reading

• Does the Pilbara Minerals share price fall finally make it a no-brainer buy?
• ASX 200 dips amid slowing US inflation and Fed rate hike bets
• 3 ASX ETFs I’d buy and hold for 10 years
• Invest like Warren Buffett and buy and hold these ASX shares: experts
• After big falls, these ASX 300 shares look dirt-cheap!

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 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 Pilbara Minerals Ltd (ASX: PLS) share price has dropped around 30% since 25 January 2023. Is this the perfect time to buy into the ASX lithium share?

This has been a tough period for the company, it has underperformed the S&P/ASX 200 Index (ASX: XJO) – the ASX 200 only dropped by 2% over that same time period.

What has gone wrong for the Pilbara Minerals share price?

The company’s fortunes are heavily linked to the lithium price. A commodity producer is able to produce a certain amount of its resource. That production has a cost that doesn’t change much from month to month.

If the commodity price increases, the company is getting more revenue while costs stay the same – higher prices largely add straight onto net profit for a miner.

But, it’s the opposite when resource prices fall. It mostly wipes off the profit.

Sadly, for Pilbara Minerals, the lithium price has dropped quite heavily over the last few months.

It’s not just the lithium price that has been going downward. Tesla recently cut prices for its cars and has been regularly doing so to try to “drive demand” according to The Guardian reporting on Elon Musk’s comments.

However, these price changes by Tesla have reportedly “stoked demand”. Perhaps this will increase the demand for lithium.

Is this a good time to buy?

I think that the best time to buy ASX mining shares is when there’s pessimism and the commodity price has fallen. This certainly describes the situation for the Pilbara Minerals share price. It’s not as low as it could be, but we don’t know how low things are going to go.

Pilbara Minerals is growing its production and the lithium price is still at a good price for the company to generate good cash flow. It has a huge cash pile – its cash balance was $2.23 billion at 31 December 2022. If we removed the cash from the valuation, I think the valuation would look very reasonable.

I think the long-term outlook for electric vehicle demand is very good, which should help support the lithium price. I like Pilbara Minerals’ plan to become more involved in the lithium value chain, which can help increase its profit margins.

The current projection on Commsec is that the business could generate 53.3 cents per share of earnings per share (EPS), putting the Pilbara Minerals share price at under 7 times FY24’s estimated earnings. That projection implies a 35% fall in profit compared to the forecast EPS for FY23. It could also pay a grossed-up dividend yield of 6.5% in FY24.

I think it’s a fairly good time to buy shares for the longer term.

The post Does the Pilbara Minerals share price fall finally make it a no-brainer buy? appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Why Future Generation, Pilbara Minerals, Platinum, and Whitehaven Coal shares are dropping
• Pilbara Minerals is one of the cheapest shares in the ASX 200. Am I buying?
• ‘Attractive value’: 2 ASX 200 mining shares ‘worth adding’ right now
• Here are the 3 most heavily traded ASX 200 shares on Tuesday

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) is down 0.07% in early trade today after the benchmark index closed up 0.5% yesterday.

The ASX 200 is following the lead of US markets, which all closed lower overnight.

This came after the United States Bureau of Labor Statistics released its March Consumer Price Index (CPI) data during trading hours in the US yesterday.

Here’s what we know.

ASX 200 dips despite slowing US inflation

US markets and the ASX 200 are both trending lower despite headline CPI slowing to 5% in March after coming in at 6% in February.

CPI in the world’s largest economy hit a high of 9.1% last June. March marks the sixth consecutive month that the pace of inflation has been slowing.

While that’s good news, at the end of the day it wasn’t good enough to boost US stocks. Or the ASX 200.

The Federal Reserve’s inflation target is 2%, mind you. Meaning there’s quite some way to go yet before the Fed, and investors, can breathe easy.

Core inflation, which strips out volatile goods like energy and food, also remains a concern. Core CPI edged higher month on month in March and now sits at 5.6% in the US.

Then there’s the jobs market. Which is strong.

While no one likes to see people out of work, the 3.5% unemployment rate in the US remains an issue for Fed chair Jerome Powell as the tight labour market will put upward pressure on wages, making inflation stickier.

Can we expect another rate hike from the Fed?

While slowing headline CPI in the US is certainly welcome news, ASX 200 investors should expect another 0.25% rate hike when the Federal Open Market Committee (FOMC) meets next month.

According to Oxford Economics chief US economist Ryan Sweet (quoted by The Australian Financial Review):

We expect the Fed to increase the target range for the fed funds rate by 25 bps in both May and June and then pause through the remainder of this year. However, the odds of a pause in June are rising.

As for the banking crisis in the US and Europe, Citi economist Andrew Hollenhorst said that was unlikely to derail the FOMC members from lifting rates to tamp down inflation:

Fed members [John] Williams along with [James] Bullard, [Thomas] Barkin and [Patrick] Harker (as well as Treasury Secretary Yellen) suggested that while it is possible tighter credit conditions will slow the economy, they are not yet seeing evidence that will be the case.

We agree with that assessment.

So, despite slowing CPI figures, prices are still rising too fast in the US.

And with another rate hike from the world’s most influential central bank now looking very likely in May, ASX 200 shares are facing some headwinds today.

The post ASX 200 dips amid slowing US inflation and Fed rate hike bets appeared first on The Motley Fool Australia.

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More reading

• 3 ASX ETFs I’d buy and hold for 10 years
• Invest like Warren Buffett and buy and hold these ASX shares: experts
• After big falls, these ASX 300 shares look dirt-cheap!
• How much would you need to invest in Coles shares to generate a $100 monthly passive income?
• 3 reasons the 6% Rio Tinto dividend yield looks safe to me

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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I firmly believe that making long-term investments in ASX shares is the best way to grow your wealth.

This is because of compounding, which is what happens when you generate returns on top of returns.

It helps explain why a 10% per annum return will turn a single $10,000 investment into $11,000 after one year, then a massive $26,000 after ten years.

But if you’re not comfortable stock-picking, don’t let that put you off investing. Not when there are exchange-traded funds (ETFs) out there to make things easier for you.

ETFs allow investors to buy a collection of shares through a single investment. In many cases, this can provide instant diversification for a portfolio.

But which ETFs could be great options for buy and hold investors? Three that I would buy are listed below. Let’s check them out:

BetaShares Global Cybersecurity ETF (ASX: HACK)

The first ETF that I think could be a great buy and hold option is the BetaShares Global Cybersecurity ETF. Unless you’ve been hiding under a rock, you’ll know that cybercrime is on the rise. This is good news for the cybersecurity leaders included in this ETF, which appear well-placed to benefit from the increasing demand for their services over the long term. Among its holdings are Accenture, Cisco, Cloudflare, Okta, Palo Alto Networks, and Trend Micro.

VanEck MSCI International Quality ETF (ASX: QUAL)

Another ETF that I would buy for the long term is the VanEck MSCI International Quality ETF. It provides investors with access to a diversified portfolio of approximately 300 quality companies from across developed markets around the world (excluding Australia). To be included in the fund, a company needs to have low leverage, high earnings growth rates, and high returns on equity (ROE). Companies that currently tick these boxes and are included in the ETF are Apple, ASML, Microsoft, Nike, Nvidia, and Visa.

VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)

A third and final ETF that I think could be a top buy and hold option is the VanEck Vectors Morningstar Wide Moat ETF. This ETF gives investors access to a portfolio of US-based companies with fair valuations and sustainable competitive advantages. These are qualities that Warren Buffett looks for when investing and given his track record over multiple decades, I think it is well worth following his investment style. Among the ~50 shares included in the ETF are the likes of Adobe, Alphabet, Amazon, Boeing, Constellation Brands, Microsoft, and Walt Disney.

The post 3 ASX ETFs I’d buy and hold for 10 years appeared first on The Motley Fool Australia.

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More reading

• Here are 3 fantastic ETFs for ASX investors to buy and hold this month
• Top ASX ETFs to buy in April 2023
• How I’m building more passive income to retire early
• It’s another day, another all-time high for this Buffett-esque ASX ETF
• 2 amazing ASX ETFs I’d love to buy for my portfolio

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 BetaShares Global Cybersecurity ETF. The Motley Fool Australia has positions in and has recommended BetaShares Global Cybersecurity ETF. The Motley Fool Australia has recommended VanEck Morningstar Wide Moat ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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One of the most famous investors in the world is Warren Buffett. Over almost six decades, the Oracle of Omaha has smashed the market with incredible returns.

In light of this, it certainly could pay to follow in his footsteps when it comes to your own investing. But how could we copy him?

One thing Buffett is well-known for, is taking a long-term perspective when making his investments. Rather than make short term trades, he buys shares “on the assumption that they could close the market the next day and not reopen it for five years.”

With that in mind, let’s take a look at a few ASX shares that could be great buy and hold candidates today. Here they are:

Breville Group Ltd (ASX: BRG)

Breville could be a top option for long-term focused investors. It is a leading kitchen appliance manufacturer behind a growing portfolio of brands such as Breville, Kambrook, Lelit, and Sage. Goldman Sachs is very bullish on its growth outlook thanks to its international expansion and exposure to the coffee market. It has a buy rating and $22.70 price target on its shares.

IDP Education Ltd (ASX: IEL)

Another ASX share that could be worth considering as a long term investment is IDP Education. It is a language testing and student placement company. Goldman Sachs is also very positive on its long term growth prospects. This is thanks to its leadership position, robust balance sheet, and strong underlying demand for its services. Goldman has a buy rating and $35.70 price target on the company’s shares.

Lovisa Holdings Limited (ASX: LOV)

A final ASX share to buy and hold could be fast-fashion jewellery retailer Lovisa. It could be a top long term investment option due to its bold global expansion plans. Morgans, which is bullish on the company, highlights that “we could be at the start of a period of remarkable expansion.” It has an add rating and $28.50 price target on its shares.

The post Invest like Warren Buffett and buy and hold these ASX shares: experts appeared first on The Motley Fool Australia.

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More reading

• These are the 10 most shorted ASX shares this week
• My top 5 ASX shares to buy and hold forever in anticipation of the bull market
• Morgans names the best ASX 200 growth shares to buy in April
• Top ASX growth shares to buy in April 2023
• Why ASX shares in 2023 are eerily similar to 2019 (and what you should do)

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 Idp Education and Lovisa. The Motley Fool Australia has recommended Idp Education and Lovisa. 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 300 Index (ASX: XKO) is rising again. But, there are some names that have plunged heavily over the last year or so. This could be a great time to invest if those ASX 300 shares rebound.

Shares don’t necessarily recover just because they’ve gone down. But, if problems are just short-term then it can prove to be a great opportunity to jump on it while investors are pessimistic.

With the three ASX 300 shares that I’m going to write about, I think that they’re not only leaders at what they do, but they’re trading at bargain prices as well.

Baby Bunting Group Ltd (ASX: BBN)

Baby Bunting is a leading retailer of baby products like prams, car seats, toys, blankets and so on.

The Baby Bunting share price has fallen over 50% in the last year. It still has the same store network, it has the same growth plans, and it’s not as though the Australian baby population has dropped by 50%.

Profit did take a hit in the first half of FY23, as the business responded to discounting by competitors. But, I don’t think the sector will be as competitive forever. Even if it is, Baby Bunting’s share price is much cheaper and its expansion plans can help drive its profit and share price higher.

The Baby Bunting share price is valued at 13 times FY23’s estimated earnings and under 9 times FY25’s estimated earnings, according to Commsec. The business could be paying a grossed-up dividend yield of 11%.

Domino’s Pizza Enterprises Ltd (ASX: DMP)

Domino’s is another ASX 300 share that has fallen hard – it’s down 33% in the past year and it’s down 67% from September 2021.

But, I think the company’s future profitability will be stronger than what it reported in the first half of FY23. Its global store network continues to grow. It recently entered into Malaysia and Singapore. The business has a very compelling growth profile in markets like Germany and France.

I think trends like automation and population growth can help Domino’s performance in the markets in that it operates.

Commsec numbers put the Domino’s share price at 32 times FY23’s estimated earnings and 23 times FY25’s estimated earnings with a large profit recovery expected.

Food inflation (hopefully) returning to a normal rate will help improve the economics of the food for customers and Domino’s.

Dicker Data Ltd (ASX: DDR)

Dicker Data describes itself as a technology hardware, software, cloud, access control and surveillance distributor. It has a partner base of over 10,000 resellers across Australia and New Zealand. It distributes products from a number of the world’s most famous technology brands.

The Dicker Data share price has dropped 37% in the last year.

In a recent update, the company said that buying power will “shift back into the end-customer’s hands in 2023 as order backlogs are fulfilled and vendors manufacture new inventory in line with the dynamics of the previous years, with supply expected to outstrip demand.”

According to Commsec, the Dicker Data share price is valued at 19 times FY23’s estimated earnings with a potential grossed-up dividend yield of 7.4%. Dicker Data shares are valued at 17 times FY25’s estimated earnings and a potential grossed-up dividend yield of 9.1%.

The post After big falls, these ASX 300 shares look dirt-cheap! appeared first on The Motley Fool Australia.

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More reading

• Creating a diversified income stream: Top ASX dividend shares to buy today according to analysts
• 2 ASX 200 shares that could be top buys for growth
• Down 60% in 12 months, I’d buy these 2 ASX All Ords shares for the turnaround
• Here are the top 10 ASX 200 shares today
• Bargain hunting: 3 retailer ASX shares that shouldn’t be this cheap

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 Baby Bunting Group, Dicker Data, and Domino’s Pizza Enterprises. The Motley Fool Australia has positions in and has recommended Dicker Data. The Motley Fool Australia has recommended Baby Bunting Group and Domino’s Pizza Enterprises. 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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Investing in ASX 200 dividend shares is one way of delivering passive income without having to get a second gig.

Coles Group Ltd (ASX: COL) has a solid record of delivering dividends since it joined the ASX.

Coles, unlike many ASX 200 stocks, has lifted its dividend every year since the onset of COVID-19.

Let’s crunch the numbers on how much you would need to invest in Coles shares to receive a $ 100-a-month passive income.

How many Coles shares would get you $100 a month in dividend income?

Starting with the basics, a monthly income of $100 would equate to an annual passive income of $1200.

Coles paid a record interim dividend of 36 cents per share in the first half of FY23. And in the second half of FY22, Coles paid a final dividend of 30 cents per share.

This means that in the past year, Coles has delivered total dividends of 66 cents per share.

In order to have received $1,200 a year, or $100 a month in passive income, you would need to own 1,818 Coles shares.

Coles shares climbed 0.49% in Wednesday’s trade to finish at $18.62.

Based on this closing price, buying 1,818 Coles shares would cost you $33,851.16.

What now?

Looking ahead, the team at Citi is predicting Coles will pay total fully franked dividends per share of 69 cents in FY2023.

If you wanted to receive $1,200 annually or $100 a month from Coles shares, you would need to own 1,739 Coles shares.

This would set you back $32,380.18 based on the company’s last closing share price.

Coles reported an 11,4% boost in net profit after tax (NPAT) to $616 million in its half-year earnings for FY23 compared to the prior corresponding half.

Morgans is tipping Coles will pay fully franked dividends of 66 cents per share in FY 2023 and FY 2024. This is consistent with the company’s total dividends in the last year.

Coles share price snapshot

The Coles share price has climbed 1.53% in the last year.

Coles has a market capitalisation of about $24.8 billion based on its last closing price.

The post How much would you need to invest in Coles shares to generate a $100 monthly passive income? appeared first on The Motley Fool Australia.

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More reading

• How much do you need to invest to give up work and live only off dividend income?
• If a stock market crash is coming, I want to own these 2 ASX shares
• Why did the Coles share price smash the ASX 200 in the first quarter of 2023?
• Passive income: How much to invest to get $800 per month
• Coles share price climbs following $100 million acquisition

Motley Fool contributor Monica O’Shea 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. 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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