Category: Stock Market

If it’s passive income you’re looking for, then you’ll want to have a look at this S&P/ASX 200 Index (ASX: XJO) dividend star.

Namely diversified ASX 200 financial stock Macquarie Group Ltd (ASX: MQG).

Macquarie was founded in 1969, and the company began trading on the ASX in November 2007.

When it comes to passive income, Macquarie has a very reliable track record. The company has paid out two partly franked dividends every year since 2013.

Atop its juicy dividends, the Macquarie share price has also been on a strong upward trend over the past three months.

As you can see in the chart below, since 13 November, the ASX 200 financial stock has gained 21%.

So, alongside the passive income I’m aiming to bank for this ASX dividend star, I’ll also be aiming to see some further share price gains to sweeten the pot.

Tapping this ASX dividend star for a $380 monthly passive income

Before running through the maths, take note that the yields you generally see quoted are trailing yields. Future yields may be higher or lower depending on a range of company-specific and macroeconomic factors.

With that said, Macquarie paid a final dividend of $4.50 a share on 4 July. The interim dividend of $2.55 a share will have landed in eligible investors’ bank accounts on 19 December.

That equates to a full year’s passive income payout of $7.05 a share.

At Friday’s closing price of $192.50 a share, this ASX 200 dividend star trades on a trailing yield of 3.7%, 40% franked.

Now let’s run the maths.

If I’m aiming for $380 a month in passive income (or a tidy $4,560 a year), I’d need to buy 608 Macquarie shares today.

And, as mentioned up top, I’ll be hoping to supercharge those returns if the Macquarie share price keeps marching higher.

The post 608 shares in this ASX 200 dividend star could make me $380 a month in passive income! appeared first on The Motley Fool Australia.

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More reading

• Macquarie share price sinks on ‘substantially’ lower profits
• 2 rejuvenated ASX 200 stocks with ‘strong brands’ ready to roar again
• I think this ONE factor gives ASX shares a huge chance to make big returns
• 2 sizzling-hot ASX stocks to buy right now
• CBA could be eyeing record profits if first-half results echo the past

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie 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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Flight Centre Travel Group Ltd (ASX: FLT) shares are trading at $21.73 in late afternoon trading on Friday.

As earning season rolls on, investors may be wondering what to expect from Flight Centre this year in terms of dividends.

After all, the ASX 200 travel share only resumed paying dividends last year.

Due to the pandemic, the company ran a four-year freeze on dividends to conserve cash.

When Flight Centre announced that dividends were back in its FY23 full-year results, it committed to paying 50% to 60% of net profit after tax (NPAT) in dividends and/or buybacks moving forward.

Flight Centre paid shareholders 18 cents per share, fully franked, as the final dividend for FY23. There was no interim dividend.

So this is likely the first year since 2019 that Flight Centre will pay both an interim and final dividend.

How much will Flight Centre pay in dividends in 2024?

The consensus analyst forecast published on CommSec is for Flight Centre to pay 47.4 cents per share in total annual dividends in 2024. The experts tip this will rise to 67.3 cents in 2025 and 81 cents in 2026.

A $10,000 budget (less a brokerage fee of $5) will buy you 459 Flight Centre shares at the current price.

Total spend = $9,974.07.

If we multiply 459 Flight Centre shares by the 2024 forecast dividend of 47.4 cents, we get a total annual dividend amount of $217.57. That’s a dividend yield of 2.18%.

But Flight Centre shares also pay dividends with 100% franking.

So, if we include the franking benefit, we get a total gross annual dividend of $310.81. That’s a gross dividend yield of 3.12%.

What about 2025 and 2026?

As outlined above, the dividends are expected to go higher.

So, if you were to buy Flight Centre stock at today’s share price, here are the gross dividend amounts and yields you are forecast to receive in 2025 and 2026:

2025: 459 x 67.3 cents = $308.91. With franking, it’s $441.30. Gross dividend yield = 4.42%.

2026: 459 x 81 cents = $371.79. With franking, it’s $531.13. Gross dividend yield = 5.33%.

The post If I invest $10,000 in Flight Centre shares, how much dividend income will I receive in 2024? appeared first on The Motley Fool Australia.

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More reading

• Analysts tip 10% to 30% returns for these ASX growth shares in 2024
• These are the 10 most shorted ASX shares
• Is Flight Centre about to regain ASX dividend share status?
• Buy these ASX growth shares for 20% to 40% returns
• These are the 10 most shorted ASX shares

Motley Fool contributor Bronwyn Allen has positions in Flight Centre Travel Group. 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 Flight Centre Travel 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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It certainly has been a difficult period for ASX nickel shares.

The price of the battery making ingredient has come under significant pressure after supply from Indonesia increased materially and the London Metals Exchange accepted Indonesian-origin nickel products in response to evolving industry dynamics.

This has led to many ASX nickel shares falling heavily, much to the disappointment of their shareholders.

But things are looking a little more upbeat on Friday, with their shares finishing the week on a high. Here’s the state of play in the industry at present:

• BHP Group Ltd (ASX: BHP) shares are up over 1%
• IGO Ltd (ASX: IGO) shares are up 5%
• Nickel Industries Ltd (ASX: NIC) shares are up 6.5%

Why are ASX nickel shares pushing higher?

Investors have been picking up their shares today after the Federal Resources Minister, Madeleine King, placed nickel on the Critical Minerals List.

This gives nickel companies the opportunity to access billions of dollars in Commonwealth funding.

This includes access to financing under the $4 billion Critical Minerals Facility and critical minerals–related grant programs such as the International Partnerships Program.

Minister King revealed that she took action because the nickel industry faces substantial structural challenges that cannot be addressed overnight. King said:

The international nickel price is forecast to stay relatively low through 2024, and likely for several years to come until the surplus of nickel in the market is corrected. In the meantime, this puts further Australian nickel operations at risk. Given impacts to our domestic capacity and noting the broader market developments presently unfolding in the nickel sector, I am fully convinced that we must be proactive in addressing the recent developments, including by adding nickel to the Critical Minerals List.

The post Why ASX nickel shares are ending the week with a spring in their step appeared first on The Motley Fool Australia.

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More reading

• ASX mining shares up amid Labor plan to spend multibillions on renewables revolution
• Which ASX 200 large-cap shares offer the best dividend yields in 2024?
• Why BHP, IDP Education, Pro Medicus, and Whitehaven Coal shares are dropping
• BHP shares fall on multi-billion profit hit from nickel and Samarco
• Own BHP shares? Here’s your first-half results preview

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

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It has been another busy week for Australia’s top brokers. This has led to the release of a number of broker notes.

Three broker buy ratings that you might want to know more about are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Pro Medicus Limited (ASX: PME)

According to a note out of Macquarie, its analysts have retained their outperform rating and $120.00 price target on this health imaging technology company’s shares. Although Pro Medicus fell short of the broker’s first-half expectations for both revenue and earnings, it remains positive. Particularly given new contract wins and its healthy sales pipeline. The Pro Medicus share price is trading at $87.83 on Friday.

Telstra Group Ltd (ASX: TLS)

A note out of Goldman Sachs reveals that its analysts have retained their buy rating on this telco giant’s shares with a trimmed price target of $4.55. Goldman felt that Telstra delivered a solid core result during the first half. And while it has reduced its earnings estimates to reflect NAS challenges, it believes the issues are cyclical and retains its bullish view. Importantly, its dividend forecasts remain unchanged and an 18 cents per share dividend is forecast for FY 2024. The Telstra share price is fetching $3.88 today.

Treasury Wine Estates Ltd (ASX: TWE)

Another note out of Goldman Sachs reveals that its analysts have retained their buy rating on this wine giant’s shares with an improved price target of $12.60. This follows the release of a half-year result in line with the broker’s expectations. Goldman also highlights that a decision on Chinese wine tariffs is expected in March. It thinks this could be a big boost to sales given the strong brand equity of Penfolds among Chinese consumers. The Treasury Wine share price is trading at $11.48 this afternoon.

The post Brokers name 3 ASX shares to buy now appeared first on The Motley Fool Australia.

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More reading

• Why Inghams, IAG, Neuren Pharmaceuticals, and Pro Medicus shares are sinking today
• Down 12% from their highs: Are Telstra shares a post-results bargain buy?
• 3 high-quality ASX 200 dividend shares to buy for a second income
• 5 things to watch on the ASX 200 on Friday
• Which ASX 200 large-cap shares offer the best dividend yields in 2024?

Motley Fool contributor James Mickleboro has positions in Treasury Wine Estates. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group, Macquarie Group, and Pro Medicus. The Motley Fool Australia has positions in and has recommended Macquarie Group and Telstra Group. The Motley Fool Australia has recommended Pro Medicus 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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ASX investors looking to get in on the billionaire-making artificial intelligence (AI) revolution may wish to run their slide rule over this rocketing ASX ETF (exchange-traded fund).

There are only a handful of S&P/ASX 200 Index (ASX: XJO) companies involved in the AI revolution. And most of them have been struggling to match the progress made by their larger global competitors. That’s also seen many of their share prices take a tumble over the past year.

Which is why Betashares Global Robotics And Artificial Intelligence ETF (ASX: RBTZ) has focused its holdings on international stocks developing AI and robotics platforms for tomorrow’s world.

ASX ETF capitalising on the AI boom

As you’re likely aware, a number of leading global AI stocks have been rocketing amid rapid advancements in generative artificial intelligence.

Like NVIDIA Corporation (NASDAQ: NVDA). Which also happens to be the biggest holding of this ASX ETF.

On the back of its AI advancements, the Nvidia share price has rocketed 230% over 12 months. And shares are up an eye-popping 1,726% over five years. That gives Nvidia a market cap of US$1.79 trillion (AU$2.8 trillion)!

To put that in perspective, that’s some $30 billion more than the current valuation of global giant Amazon.com Inc (NASDAQ: AMZN).

Atop Nvidia, RBTZ’s other top holdings include Intuitive Surgical Inc, ABB Ltd and Keyence Corp.

The success of its portfolio holdings has helped the ASX ETF’s share price surge by 32% in 12 months.

RBTZ also pays an annual unfranked dividend. On 18 July, the fund paid out 63 cents per share. Adding that back in and the accumulated value of the ASX ETF is up more than 40% for the full year.

Annual management fees and costs for the Betashares Global Robotics And Artificial Intelligence ETF come out to 0.57%.

So what about these billionaires and their AI investments?

Circling back to the billionaire-making AI revolution this ASX ETF is tapping into, have a look at the chart below (courtesy of Bloomberg).

These billionaires all attribute at least part of their mammoth 2024 wealth gains to investments in companies tracked by the Bloomberg Global Artificial Intelligence Index.

As you can see, Facebook founder – or Meta Platforms Inc (NASDAQ: META), if they insist – Mark Zuckerberg leads the pack. Zuckerberg’s wealth has surged by US$37.1 billion so far in 2024!

Then there’s Nvidia, the top holding of this artificial intelligence-focused ASX ETF.

Nvidia co-founder Jensen Huang comes in at number two on this billionaires list, seeing his wealth grow by US$19.6 billion year to date.

Boom!

The post How this rocketing ASX ETF is tapping into the billionaire-making AI revolution appeared first on The Motley Fool Australia.

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More reading

• 3 investment megatrends of 2024 and the ASX ETFs offering a way in
• Will Nvidia stock be worth more than Microsoft by 2030?
• Meta stock pops 15% after profits triple
• Better AI stock: Microsoft vs. Amazon
• Could investing $20,000 in Nvidia stock make you a millionaire?

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, Meta Platforms, and Nvidia. The Motley Fool Australia has recommended Amazon, Meta Platforms, and Nvidia. 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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Australia’s biggest ASX mining shares are trading higher alongside the S&P/ASX 200 Index (ASX: XJO) on Friday.

At the time of writing, the ASX 200 is up 0.43%.

Meantime, ASX mining giant BHP Group Ltd (ASX: BHP) is up 0.84% to $45.55. Fortescue Ltd (ASX: FMG) shares are up 0.64% to $28.26. Rio Tinto Ltd (ASX: RIO) shares are up 1.24% to $128.97.

Australia has long been known as one of the world’s biggest suppliers of iron ore.

But the Federal Government wants to see Australia diversify and become a clean energy superpower, given we have large deposits of almost every mineral the world needs for the green energy transition.

Billions to be budgeted for Australia’s clean energy revolution

Some funding schemes are already in place to support the development of Australia’s renewable energy sector. But the Prime Minister intends to announce bigger plans on Friday evening.

According to the Australian Financial Review, Labor is planning a multibillion-dollar initiative along similar lines to the United States’ highly successful $624 billion Inflation Reduction Act (IRA).

The IRA may be an inflation-fighting measure in name, but it is well-known for its clean energy incentives.

The IRA contains $US437 billion in subsidies specifically earmarked for projects in the clean energy space.

Fortescue executive chair Andrew “Twiggy” Forrest AO has previously commented that the IRA has encouraged his Fortescue Future Industries (FFI) business to invest in the US instead of Australia.

Prime Minister Anthony Albanese will deliver a speech in Newcastle tonight. In it, he will push Labor’s case for investing multi-billions more to make Australia a renewable energy superpower.

He plans to say that achieving this will require the government to be a “partner … not just an observer”.

Albanese will cite unprecedented investments by other Western governments to grow their clean energy industrial bases, such as the US, Europe, Japan and Korea.

The Prime Minister will say:

We don’t have to go dollar-for-dollar in our spending, but we can go toe-to-toe on the quality and impact of our policies.

In all of this, we must be prepared to think big.

The new initiative will likely involve a combination of subsidies and co-investment offers to clean energy businesses.

What’s happening in Australia’s renewable energy sector?

Forrest has been at the forefront of the Australian mining industry’s decarbonisation efforts and its diversification into renewable energy.

Fortescue aims to decarbonise its iron ore mining operations, while also developing Fortescue Future Industries. FFI is a separate business invested in green hydrogen and green ammonia projects.

The other two big miners are also targeting the global green energy transition for business development. Both BHP and Rio Tinto have invested heavily in growing their copper segments, for example.

Many other smaller ASX mining shares and ASX energy shares are solely focused on renewable energy opportunities, as well as mining the critical minerals essential to the world’s green energy transition.

Examples among ASX mining shares include Core Lithium Ltd (ASX: CXO), which mines the white metal required to make electric vehicle (EV) batteries.

Other lithium players among ASX mining shares include Pilbara Minerals Ltd (ASX: PLS), Mineral Resources Ltd (ASX: MIN), and IGO Ltd (ASX: IGO), which also mines nickel.

Graphite is also essential for EV batteries, and ASX mining share Renascor Resources Ltd (ASX: RNU) is seeking investment for its South Australian operations.

The post ASX mining shares up amid Labor plan to spend multibillions on renewables revolution appeared first on The Motley Fool Australia.

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More reading

• Why Fletcher Building, GQG, Pilbara Minerals, and Tyro shares are climbing today
• Own Pilbara Minerals shares? Here’s your first-half results preview
• Which ASX 200 large-cap shares offer the best dividend yields in 2024?
• Why BHP, IDP Education, Pro Medicus, and Whitehaven Coal shares are dropping
• BHP shares fall on multi-billion profit hit from nickel and Samarco

Motley Fool contributor Bronwyn Allen has positions in BHP Group and Core Lithium. 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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ASX earnings season is now in full swing. This week, we have continued to hear from some of the ASX’s biggest shares about how their most recent results have measured up. But with earnings season also comes fresh dividend announcements. And some ASX 200 shares are already approaching their next ex-dividend dates.

Next week, we’ll see not one, not two, but seven ASX 200 shares trade ex-dividend.

A company’s ex-dividend date is not the day when the dividend gets paid out. Rather, it’s the date that decides who gets the latest dividend from an income share, and who misses out.

Put simply, if you own a company’s shares before that company reaches its latest ex-dividend date and you still hold them when that date rolls around, then you will be in line to receive the dividend (and the attached franking credits if applicable).

But if you buy those shares on or after the ex-dividend date, the dividend payment will go to the former owner of those shares.

Because a company’s shares become inherently less valuable when the company trades ex-dividend (as they no longer come with the rights to the upcoming payment), we often see a sizeable share price drop on the ex-dividend date.

7 ASX 200 shares that are about to trade ex-dividend

Here’s a list of the ASX 200 shares that will cut off dividend eligibility next week:

So keep your eye on these ASX 200 shares next week. We’ll probably see some big share price movements (and not good ones) when these stocks trade ex-dividend.

And if you want any of these upcoming dividend payments, you’d better be quick to buy these shares before their respective ex-dividend dates.

The post 7 ASX 200 shares with ex-dividend dates next week appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• This ASX 200 energy stock is predicted to pay a dividend yield of almost 8%!
• Crikey! Will ASX 200 investors really have to wait until 2025 for RBA interest rate cuts?
• How much passive income could I earn buying $5,000 of CBA shares today?
• 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 recommended Challenger and Jb Hi-Fi. 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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to end the week on a positive note. The benchmark index is currently up 0.55% to 7,647.1 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are falling:

Inghams Group Ltd (ASX: ING)

The Inghams share price is down 13% to $3.75. Investors have been selling the poultry producer’s shares despite it doubling its half-year profits. They appear to have been spooked by management’s outlook commentary for the second half.

Insurance Australia Group Ltd (ASX: IAG)

The IAG share price is down 3.5% to $6.09. Although the insurance giant reported strong profit growth during the first half, it appears to have fallen short of expectations. Goldman Sachs commented: “Overall result summary: 1) Insurance profits: 1H24 result was $614m vs. GSe of $628m. 2) Cash earnings for 1H24 was $415m vs. GSe of $442m. 3) Underlying margin in line: IAG’s definition of 1H24 underlying margin was 13.7% (however 15.1% ex reinsurance reinstatement) vs. GSe of 15.1%. 4) Reported margin: 1H24 reported margin was 13.7% vs. GSe of 13.9%.”

Neuren Pharmaceuticals Ltd (ASX: NEU)

The Neuren Pharmaceuticals share price was down 13% to $20.04 before being paused from trade. Investors were hitting the sell button after a short seller targeted its US partner Acadia Pharmaceuticals. It alleges that the Daybue drug Neuren licensed to Acadia is a flop and that users are reporting “horror stories” from using it.

Pro Medicus Limited (ASX: PME)

The Pro Medicus share price is down 6% to $88.00. This morning, Bell Potter downgraded the health imaging technology company’s shares to a sell rating with a $75.00 price target. It said: “PME remains a high quality technology group with price leadership, great margins and earnings growth through the economic cycle. Notwithstanding, the stock is overpriced relative to its peers and earnings growth and for these reasons we downgrade our recommendation to Sell.”

The post Why Inghams, IAG, Neuren Pharmaceuticals, and Pro Medicus shares are sinking today appeared first on The Motley Fool Australia.

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More reading

• Guess which ASX 200 share is crashing 15% despite doubling its first-half profits
• This ASX 200 healthcare share is diving 13% as short sellers take aim
• IAG share price sinks 6% despite huge dividend boost and buyback
• 5 things to watch on the ASX 200 on Friday
• Why BHP, IDP Education, Pro Medicus, and Whitehaven Coal shares are dropping

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Pro Medicus. The Motley Fool Australia has recommended Pro Medicus. 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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on form and pushing higher. The benchmark index is up 0.45% to 7,640.2 points.

Four ASX shares that are rising more than most today are listed below. Here’s why they are climbing:

Fletcher Building Ltd (ASX: FBU)

The Fletcher Building share price is up almost 5% to $3.35. The building products company’s shares are rebounding today following a selloff on Thursday. The team at Ord Minnett believes the weakness created a buying opportunity. This morning, the broker retained its buy rating on the company’s shares with a lofty $5.70 price target.

GQG Partners Inc (ASX: GQG)

The GQG share price is up almost 5% to $2.23. Investors have been buying the fund manager’s shares following the release of its full year results. GQG reported an 18.5% increase in revenue to US$517.6 million and a 15.7% lift in net operating income to US$384.4 million. This allowed the company to lift its final dividend by 30% to 2.6 US cents per share.

Pilbara Minerals Ltd (ASX: PLS)

The Pilbara Minerals share price is up almost 6% to $3.66. Investors are buying ASX lithium shares on Friday amid reports that the Albanese government is considering a multibillion-dollar initiative to try to compete with the United States Inflation Reduction Act. According to the AFR, the aim is to drive the domestic development of clean energy technology.

Tyro Payments Ltd (ASX: TYR)

The Tyro share price is up 2.5% to $1.19. This has been driven by news that the payments company has settled its legal proceedings commenced against Kounta. These proceedings asserted that Kounta breached its obligations to Tyro by offering a competing product to Tyro merchants. Kounta will pay Tyro $10 million in damages and not solicit certain mutual merchants until September.

The post Why Fletcher Building, GQG, Pilbara Minerals, and Tyro shares are climbing today appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tyro Payments. The Motley Fool Australia has recommended Tyro Payments. 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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Altium Limited (ASX: ALU) shares have had a very good week, rising by 28% after accepting a takeover offer. In fact, Altium shares are up 43% in the past month and 79% in six months.

Investors may be wondering about buying Altium shares and what happens next. So, let’s have a look at what may happen.

Offer accepted

Tokyo-based Renesas Electronics, a supplier of advanced semiconductor solutions, is the business that’s trying to buy Altium.

Under the proposal, Altium shareholders will receive A$68.50 per share in cash. At the moment, the Altium share price is trading at around $66, which is around 3.8% below the takeover offer.

So, if shareholders want to exit now, they can get almost all of the potential value of this takeover deal without having to wait for many months.

Why is there a discount? I’d suggest it’s because of two main reasons. First, the takeover still has a number of steps to go through – it’s not guaranteed to happen.

There’s also a time cost. Investors recognise that money could get a safe return in a savings account or bond with an annual interest rate of 4% or 5%. As the takeover date approaches, I’d expect the discount to close up because there’s less time until the deal goes through (and less missed potential interest from a bond/savings account).

Unless there’s a bigger takeover offer, that approximately 4% return is the most investors will get from here.

What next for the Altium takeover?

The offer has a very good chance of going ahead because of how large it is.

Renesas’ offer gives Altium an equity value of A$9.1 billion. The offer is a 31% premium to the all-time high closing Altium share price on 12 February 2024.

The Altium board has unanimously recommended that shareholders vote in favour of the takeover in the absence of a superior proposal and subject to an independent expert concluding (and continuing to conclude) that the offer is in the best interests of Altium shareholders. Assuming those qualifications are ticked off, Altium’s directors plan to vote their collective 13.8 million Altium shares in favour of the deal.

There are a few steps that still need to happen before the takeover can be completed.

It needs owners of Altium shares to vote to approve the deal at a meeting later this year. It requires regulatory approvals, the positive assessment of an independent expert, no Altium ‘material adverse change’ and no ‘prescribed events’. These are usual for a transaction like this.

Altium is planning to send a booklet to shareholders which will contain important information once the timing of all regulatory approvals is clear. The shareholder meeting will take place to vote after that. The takeover will then be submitted for final court approval.

At this stage, there are no dates, but Altium expects final court approval prior to the end of the year and “hopefully well before that time.” Owners of Altium shares will receive their cash around the time that the takeover is implemented and it’s de-listed from the ASX, if everything goes ahead.

Altium share price snapshot

Altium shares have gone up 90% in the past five years, giving shareholders plenty of reward.

The post Buying Altium shares amid blockbuster takeover deal? What you need to know appeared first on The Motley Fool Australia.

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More reading

• I’d invest $580 a month in ASX 200 shares to aim for a million!
• Here are the top 10 ASX 200 shares today
• Why Altium, Goodman, Magellan, and Wesfarmers shares are storming higher today
• Altium shares rocket on $9.1b takeover deal
• I’d grow my wealth by buying these so-called ‘expensive’ ASX stocks

Motley Fool contributor Tristan Harrison has positions in Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium. 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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