Category: Stock Market

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• How will today’s GDP numbers hit the ASX (and interest rates)?
• Magellan share price leaps 8% as funds grow up and flow out
• Why DroneShield, Magellan, Platinum, and Zip shares are rising today
• 5 things to watch on the ASX 200 on Wednesday
• 2 ASX shares with attractive ‘risk-reward’ balance to buy right now

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 Corporate Travel Management. The Motley Fool Australia has recommended Corporate Travel Management. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/RtoMzIZ

Today, we got the latest economic report from the Australian Bureau of Statistics (ABS). And it wasn’t pleasant reading for anyone who wants to see the Australian economy (specifically its gross domestic product (GDP) running on all cylinders at full steam ahead.

The ABS informed us, in contrast, that the Australian economy grew by a seasonally adjusted 0.2% over the three months to 31 December 2023, putting its annualised growth at 1.5% for the 12 months to 31 December. That’s the slowest annual growth rate since the pandemic began.

Even more worryingly, the economy actually contracted before we account for the benefits of population growth. The ABS stated that “strong population growth saw GDP per capita fall 1.0 per cent over the year”.

The ABS’ data also showed that household savings increased, while household consumption rose “a meagre 0.1%”. Imports also fell over the quarter.

In some good news, labour productivity was up 0.5%, which helped wages rise 0.9% for the quarter and 4.2% year on year. That’s the highest annual wage growth recorded since 2009.

Business investment also ticked up by 0.7% during the quarter, marking the 14th quarterly rise in a row.

So why is the share market up on this GDP news?

Before this report became public, the S&P/ASX 200 Index (ASX: XJO) was having an awful day. But the release of this data seemed to put a spring in investors’ steps, with the index now healthily in the green with a 0.08% rise to over 7,730 points at present.

Since 12:30 pm, the ASX 200 has added 0.4%.

So investors appear to be celebrating this news. Why? Well, the only possible explanation is the impact this data might have on the Reserve Bank of Australia (RBA)’s next interest rate move.

As many investors would know, interest rates have a direct and meaningful impact on the share market. Higher rates, as Warren Buffett once put it, tend to act like gravity on asset classes characterised as ‘risky’. That, of course, includes shares. Because higher rates increase the appeal of ‘safer’ assets like cash and government bonds, shares tend to suffer when rates go up.

But the opposite is also true. Lower rates increase the attractiveness of shares as the yield available from cash investments and government bonds is degraded.

With economic growth slowing, the RBA might be keener to start cutting rates sooner rather than later.

The ASX has arguably been reaching new all-time highs in recent weeks partly for this very reason. Investors and commentators have been growing bolder with their predictions for rate cuts in 2024 for a while now, and these latest GDP figures will do nothing to dampen that speculation.

Judging by today’s post-announcement market recovery, it may be increasing it.

Let’s see what happens next.

The post How will today’s GDP numbers hit the ASX (and interest rates)? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today
• Key takeouts for ASX shares this earnings season: CBA analysis
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX 200 shares today

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

from The Motley Fool Australia https://ift.tt/Sb1t5yx

The Super Retail Group Ltd (ASX: SUL) share price dropped more than 1% today after the ASX retail share went ex-dividend.

This is the business behind Supercheap Auto, Rebel, BCF and Macpac.

Ex-dividend date

Today is the ex-dividend date, which is the day that new investors are no longer entitled to the upcoming FY24 half-year dividend. If buyers aren’t going to receive the upcoming dividend, they’re probably not going to want to pay as much for Super Retail shares.

Super Retail is going to pay a fully franked interim dividend of 32 cents per share. This dividend is going to be paid on 12 April 2024, which is a month and a week away.

The 32 cents per share represents a fully franked dividend yield of 2.1% and a grossed-up dividend yield of 3% at yesterday’s share price.

The company generated statutory earnings per share (EPS) of 63.5 cents, so the dividend payout ratio is roughly 50%. The company is paying half of its profit to shareholders and retaining half within the business, which can be used for growth spending and/or improving the balance sheet.

This payout is 6% smaller than the FY23 half-year payout a year ago.

What next for Super Retail shares?

The company is projected to pay an annual dividend per share of 80 cents in FY24, according to Commsec. This would be a cut compared to FY23, but would still represent a dividend yield of 5.4% or a grossed-up dividend yield of 7.7%.

In terms of the outlook, it said FY24 second half like for like sales were down 3% year over year.

It said demand in the auto category remains “resilient”, particularly for products that keep customers’ cars on the road including batteries, lubricants and wipers.

Rebel is cycling elevated sales in the prior corresponding period.

BCF’s fishing category is continuing to “perform well”, though trading has been disrupted by wet weather events.

Macpac has made a “positive start” to the second half.

The business is seeing signs of a more subdued consumer environment, but it’s “relatively well-positioned”. It’s focusing on optimising the margin and “driving cost efficiencies”. It’s still seeing inflation in wages and rent costs.

Super Retail share price snapshot

In the last six months, the Super Retail share price has risen around 25%.

The post Why did Super Retail shares drop after going ex-dividend? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Move quickly if you want to receive the Super Retail dividend
• 34 ASX 200 shares with ex-dividend dates next week
• How I’d invest $250 a month in ASX dividend shares to target a $24,000 annual second income
• Morgans says these ASX shares are buys (with special dividends to come)

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

from The Motley Fool Australia https://ift.tt/W1DrFM8

S&P/ASX 200 Index (ASX: XJO) bank shares have been on a tear over the past six months.

And a growing number of analysts are cautioning that the rally may be getting overheated.

Here’s how the big four bank stocks have performed over the past six months:

• Australia and New Zealand Banking Group Ltd (ASX: ANZ) shares have gained 15.2%
• National Australia Bank Ltd (ASX: NAB) shares are up 19.0%
• Westpac Banking Corp (ASX: WBC) shares have gained 26.7%
• Commonwealth Bank of Australia (ASX: CBA) shares are up 16.5%

For some context, the ASX 200 has gained 6.4% over this same period.

The blistering rally sees ASX 200 bank shares trading at more than one-year highs. On Monday, the CBA share price notched a fresh all-time high. Australia’s biggest bank closed the day at $118.12 a share.

Are ASX 200 bank shares getting frothy?

Concerns that the rally may be running out of steam are being fuelled on several fronts.

First, there’s the increasing level of bad debts reported by the ASX 200 bank shares as more customers come under pressure from high interest rates.

The level of non-performing loans hasn’t reached critical levels yet. And the banks are well-capitalised to withstand some impairments. But should bad debt levels continue to rise, investors may start to rethink their portfolio holdings.

Second, net interest margins among the banks are coming under pressure amid intense competition in the lucrative Aussie mortgage market. This is crimping profit margins and could also see the ASX 200 bank shares come under selling pressure down the road.

E&P Capital analyst Azib Khan is sceptical on the big share price gains of the last six months, with investor exuberance about pending interest rate cuts potentially sending the bank stocks unjustifiably high.

According to Khan (quoted by The Sydney Morning Herald), “Prospects of interest rate cuts have seen bank share prices get ahead of themselves. While rate cuts may well prove beneficial for bank earnings, [future earnings forecasts] already appear quite optimistic.”

Morgan Stanley equity analyst Richard Wiles flagged the historically high forecast price-to-earnings (P/E) ratios the ASX 200 bank shares are trading on as a potential warning sign.

“In our view, the major banks did not deliver the material upgrades to earnings, dividend or buyback expectations necessary to support current multiples,” Wiles said.

There you have it.

Proceed with caution.

And, as always, if you’re unsure of where or how to invest your money, seek out some professional help.

The post Is the blistering rally in ASX 200 bank shares overdone? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• ANZ shares push higher amid asset sale and dividend bump hopes
• Forget Westpac and buy these ASX dividend shares
• An 8% yield on CBA shares? Here’s how these passive income investors achieved it!
• Investing in an ASX share portfolio for lifelong passive income!
• 3 ASX 200 shares I think could grow to be bigger than BHP one day

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.

from The Motley Fool Australia https://ift.tt/H6XQwdN

Many ASX investors, and certainly those who own ASX lithium stocks, would be aware that this corner of the share market has had a rough trot in recent months.

Lithium shares are certainly not immune from wild swings. But the downturn we’ve seen over the back half of 2023 and into 2024 is one of the worst slumps investors have had to deal with in a long time.

Nowhere is this more evident than on the ASX short-seller lists. Every Monday, my Fool colleague James publishes a list of the ASX’s most short-sold shares. For months now, ASX lithium stocks have been a constant presence on this list.

Just look at this week’s list. Pilbara Minerals Ltd (ASX: PLS), Core Lithium Ltd (ASX: CXO) and Sayona Mining Ltd (ASX: SYA) all featured prominently. Pilbara, the largest lithium stock on the ASX, even came in at the number one spot, with a whopping 21% of its outstanding shares being held in a short position.

When an investor shorts a share, they actually borrow someone else’s shares and sell them with a promise of returning them at a later date. If the share price has fallen over this period, they make a profit.

When will the shorters stop targeting ASX lithium stocks?

Obviously, ASX lithium stocks would have proved to be very fertile ground indeed to farm for short-selling gains recently. And judging by this week’s short-seller report, that short interest doesn’t look like it’s fading.

However, long lithium investors might soon get some breathing room, if recent forecasts prove accurate.

Shorters only target companies that they think have a reasonable chance of losing value. With the price crash of lithium and its derivative materials over the past eight months or so, these companies were always going to be a treat for short sellers. But if lithium prices start picking up, we could see those same short sellers run for the door.

We’ve already seen signs of a recovery. Pilbara shares, for instance, are up more than 23% from their 52-week low from only a few months ago. That’s probably thanks to a slight recovery in lithium prices over 2024 to date.

Earlier this week, my Fool colleague went over the views of analysts from Macquarie. They were bullish on lithium’s immediate future, stating that “we believe lithium demand growth could outpace that of batteries in 2024”.

They added that “We believe that the significant month-on-month increase in battery production plans in March may indicate that demand is better than market expectations”.

However, at a similar time, we also covered the views of ASX broker Goldman Sachs. Goldman is forecasting only improvements in the lithium carbonate and lithium hydroxide prices every year from now until 2027. Goldman was slightly more bearish on lithium spodumene, but thinks this compound will start rising as well after a dip in 2025.

If the recovery in lithium prices is as modest as Goldman is projecting, it could mean that it might be a while before we see ASX lithium stocks like Pilbara back at record highs. But it could also mean short-sellers might finally move onto greener pastures. We’ll have to wait and see though.

The post Could the big short of ASX lithium stocks be nearing its end? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why is the Core Lithium share price down 14% in two days?
• 2 ASX 200 shares I recently sold
• Why are ASX lithium shares like Pilbara Minerals crashing on Tuesday?
• Why the 2024 outlook for these rebounding ASX 200 lithium shares looks ‘better than market expectations’
• Guess which 4 shares are being dumped from the ASX 200 index

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

from The Motley Fool Australia https://ift.tt/ZmTJByo

If you’re on the lookout for some income options, then it could be worth checking out these ASX dividend stocks listed below.

Here’s what analysts are saying about these buy-rated shares:

Coles Group Ltd (ASX: COL)

The first ASX dividend stock for income investors to look at is supermarket giant Coles.

Morgans is a fan of the company following earnings season, particularly with its results coming in ahead of expectations. It was also pleased to see its sales growth outperform its arch rival early in the second half of FY 2024.

In light of the above, the broker is now forecasting fully franked dividends of 66 cents per share in FY 2024 and 69 cents per share in FY 2025. Based on the current Coles share price of $16.31, this will mean dividend yields of 4% and 4.2%, respectively.

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

Dexus Convenience Retail REIT (ASX: DXC)

Another ASX dividend stock that could be a buy is Dexus Convenience Retail REIT.

It is a property company that owns a portfolio of service station and convenience retail assets located across Australia but concentrated on the eastern seaboard.

Bell Potter likes the company due partly to its attractive valuation and generous forecast dividend yields.

In respect to the latter, the broker is forecasting dividends per share of 20.9 cents in FY 2024 and 20.7 cents in FY 2025. Based on its current share price of $2.70, this equates to yields of approximately 7.7% in both years.

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

The post 2 buy-rated ASX dividend stocks for income investors in March appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why Coles, Liontown, Lovisa, and Wildcat shares are dropping today
• How is the Coles share price down 3% today?
• 3 all-star ASX dividend stocks I’d own in retirement to combat falling interest rates
• 5 things to watch on the ASX 200 on Tuesday
• If I were 60 I’d buy these ASX shares for dividends

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. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/GCiutpV

Cettire Ltd (ASX: CTT) shares are recovering in afternoon trade following a sharp selloff this morning.

At the time of writing, the online luxury product retailer’s shares are down 13% to $4.06.

This is a big improvement on its earlier decline of 27% to $3.41.

In fact, if you had bought at the bottom on Wednesday, you’d now be up a sizeable 19% in less than five hours.

Why are Cettire shares recovering?

Investors were hitting the sell button today amid concerns over a report in the Australian Financial Review.

That report claimed that the media outlet was charged duties of $169.43 but that these duties were not handed over to Australian customs officials.

This sparked concerns over Cettire’s business practices and called into question its impressive sales and profit growth.

Cettire response

This afternoon, the company responded to the media report and refuted its claims.

While Cettire acknowledges that it charges estimated duties on orders, it highlights that any benefit from these charges is negligible. Particularly given that sometimes its estimates are short of the mark and its bears the additional costs. It said:

Cettire accounts for revenue for any estimated duties or import fees charged to customers as well as a corresponding cost for the duties and import fees paid, in accordance with accounting standards. On balance, the Company believes that neither duty revenues, nor duty expenses nor the net P&L impact are material.

Furthermore, in direct response to the media report, the company highlights that the AFR was erroneously using DHL internal terminology to judge whether duties were paid. It explains:

The article in question referenced a shipping label from DHL and highlighted the language “Duties & Taxes Unpaid”. This language on the DHL shipping label bears no relation whatsoever to whether or not duties were applicable to the shipment, nor whether duties were actually paid.

Rather, it refers to a service provided by DHL whereby it facilitates the payment of duty on behalf of its customer (Cettire). In this specific example, Duties & Taxes Unpaid simply means that that service was not provided by DHL on the relevant shipment. It does not mean that there is any outstanding duty payable by the customer or by Cettire in relation to the shipment.

Cettire shares are up approximately 140% over the last 12 months.

The post Cettire shares recover after morning meltdown: what’s happening? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why Accent, Cettire, Dicker Data, and Iress shares are dropping today
• Why is the Cettire share price crashing 27% on Wednesday?
• Why Cettire, Fletcher Building, Lake Resources, and Nick Scali shares are falling today
• The CEO of this ASX stock just sold $127m worth of shares
• If you’d put $20,000 in this ASX retail stock 19 months ago, you’d have $239,000 now

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 Cettire. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/0mZqb8d

Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a number of broker notes this week.

Three ASX shares brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Graincorp Ltd (ASX: GNC)

According to a note out of Bell Potter, its analysts have retained their buy rating and $9.30 price target on this grain exporter’s shares. This follows the release of the latest ABARES crop report which highlighted an uplift in the 2023-24 winter and summer crop forecasts. The broker believes this is good news for Graincorp and continues to see its valuation as undemanding at current levels. The Graincorp share price is trading at $7.84 today.

Lovisa Holdings Ltd (ASX: LOV)

A note out of Morgans reveals that its analysts have retained their add rating on this fashion jewellery retailer’s shares with an improved price target of $35.00. The broker was pleased with the company’s performance during the first half and appears confident the trend will continue. So much so, it has increased its valuation on the belief that it deserves to trade on higher multiples. The Lovisa share price is fetching $30.37 on Wednesday.

Xero Ltd (ASX: XRO)

Analysts at Citi have retained their buy rating on this cloud accounting platform provider’s shares with an improved price target of $159.00. This follows the company’s inaugural investor day event. While there wasn’t a lot of quantitative detail, the broker still came away from the event feeling confident in the company’s outlook after management dug deep into its key growth initiatives for the medium term. The Xero share price is trading at $132.43 this afternoon.

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

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why is the Graincorp share price having such a bumper week?
• 2 ASX shares that could keep flying after a massive reporting season
• 5 things to watch on the ASX 200 on Wednesday
• 4 Australian shares set to soar in 2024
• Best ASX growth stocks to consider buying in March

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has positions in and has recommended Coles Group and NIB Holdings. 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.

from The Motley Fool Australia https://ift.tt/yp7fqm1

Investors are bidding up the Magellan Financial Group Ltd (ASX: MFG) share price on Wednesday following its February funds under management (FUM) update.

In afternoon trading, shares in the funds management company are 8% higher to $9.25. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is marching in the opposite direction today, sliding 0.25% to 7,704.9 points.

The negative market move has failed to cloud the optimism surrounding Magellan shares, even though the beleaguered financial house suffered another $200 million in outflows last month.

Grateful for growth

Shareholders appear to be shrugging off yet another month marred by a withdrawal of capital.

In February, Magellan witnessed $200 million of net outflows from its customers. The outflow comprised $100 million of retail funds and $100 million of institutional funds. On the bright side, this reflected a reduction from the $400 million outgoing investor capital in January.

Another positive from today’s announcement is the enlarged total funds under management that the company earns fees on. Growing from $36.3 billion at the end of January, the company recorded $37.2 billion in funds it oversees at the end of February — increasing approximately 2.5% month-on-month.

Given the fund experienced a net outflow, the only way for FUM to increase is through the appreciation in value of its managed assets. Below are the changes in funds under management by asset class:

• Global equities: $16.4 billion, up from $15.5 billion
• Infrastructure equities: $15.5 billion, down from $15.6 billion
• Australian equities: $5.3 billion, up from $5.2 billion

Increasing 5.8% in value, the global equities portion of Magellan’s managed assets delivered the strongest growth. Assuming the increase is wholly attributable to returns, this beats out the Vanguard MSCI Index International Shares ETF (ASX: VGS)’s return of 4.05% during February.

This might instil confidence among shareholders for improved performance fees in future reports.

Good signs for the Magellan share price?

Ideally, Magellan would grow its funds both ways: appreciating assets and incoming investor funds. However, the fund manager’s profits are greatly helped by additional fees on market outperformance. In other words, it certainly doesn’t hurt to fatten those funds through capital appreciation.

Analysts at Citi are keen to see the official February performance figures (yet to be released) before casting definitive judgement. The team thinks a rut of underperformance will have likely improved but is waiting to see.

Lastly, the Citi team maintains a cautious outlook on FUM growth amid a new chief at the helm. The broker currently holds a sell rating on Magellan shares with a price target of $8.10. Based on today’s price, this would suggest more than 12% downside.

The post Magellan share price leaps 8% as funds grow up and flow out appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why DroneShield, Magellan, Platinum, and Zip shares are rising today
• 2 ASX shares with attractive ‘risk-reward’ balance to buy right now
• Why Altium, Goodman, Magellan, and Wesfarmers shares are storming higher today
• Magellan share price rises as profit jumps 24%

Motley Fool contributor Mitchell Lawler 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 Vanguard Msci Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/P1b5nrk

Some ASX companies have the potential to increase their dividends next year, and over the long-term.

For me, one of the most important dividend metrics is the dividend payout ratio. That tells us how much of that year’s profit the business is paying out.

For example, if a business makes $100 million in profit and pays out $70 million of it to shareholders, the dividend payout ratio is 70%. Dividends aren’t free money, it does reduce the business’ cash balance.

The lower the payout ratio, the more scope there is for the business to increase the dividend next time – it doesn’t need to necessarily grow profit the next year to afford a higher payout. Or, if profit falls, there’s more scope for the business to maintain its dividend payout.

For example, if the business that made $100 million in profit saw its profit drop 10% to $90 million in a recession, it could still afford an increase of the payout to $75 million (resulting in a dividend payout ratio of 83%).

Below are two ASX shares with large yields today which I think can grow their dividends in FY25 and FY26.

Shaver Shop Group Ltd (ASX: SSG)

Shaver Shop is one of the largest retailers of shaving products in Australia, with 123 stores across Australia and New Zealand.

In the FY24 first-half result, the retail saw total sales drop 3.7% to $127 million, while net profit after tax (NPAT) declined 8.6% to $12.5 million. This translated into 9.7 cents of earnings per share (EPS).

The business decided to pay an interim dividend of 4.7 cents per share.

The estimate on Commsec suggests Shaver Shop could generate an EPS of 11.3 cents for FY24. If it were to pay the same dividend as FY23 (10.2 cents per share), it would be a grossed-up dividend yield of 12.8% and a dividend payout ratio of 90%. That’s quite high, but there’s still a good gap between profit and the payout.

The business has grown its dividend each year since 2017, when it first started paying money to shareholders. The forecast on Commsec suggests Shaver Shop’s profit could grow in FY25 and FY26.

I think there’s a good chance the profit and dividend can grow in FY25 and FY26 if/when household finances (and confidence) improve. The company’s ongoing store rollout can also help grow earnings.

Nick Scali Limited (ASX: NCK)

Nick Scali is a retailer of furniture through its Nick Scali and Plush brands.

It grew its dividend every year between FY13 and FY23, which is an impressive record considering it’s a retailer of a somewhat discretionary type of item.

In the FY24 first half, its revenue dropped 20% to $226.6 million and NPAT fell 29%. Ouch. However, the prior year was boosted because of increased deliveries as the order bank reduced with lead times returning to pre-COVID levels.

Nick Scali reported that its group written sales orders for HY24 were $212.7 million, an increase of 1.1% year over year. So, underlying sales slightly increased year over year.

It generated an EPS of 53.1 cents and paid a dividend per share of 35 cents. That translates into a dividend payout ratio of 66%. The forecast on Commsec suggests it could pay 65 cents per share in FY24, which would be a grossed-up yield of 6.4%. It could then grow profit and dividends in FY25 and FY26, resulting in a possible grossed-up yield of 7.3%.  

The post 2 ASX companies with the firepower to raise their dividends appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Key takeouts for ASX shares this earnings season: CBA analysis
• Why Cettire, Fletcher Building, Lake Resources, and Nick Scali shares are falling today
• Guess which ASX 300 director just cashed in $2.3 million worth of company shares
• With a 12% yield, I think this potentially undervalued ASX dividend stock is amazing
• Shares vs. property: 3 furniture retailers hit 52-week highs amid continually rising home values

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 recommended Nick Scali and Shaver Shop Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/Uv3j5hX