Category: Stock Market

Most ASX investors love a good dividend-paying stock. If you want to buy a dividend stock for your own portfolio, however, you’ll probably be forced to buy shares that pay out passive dividend income only every six months.

From Commonwealth Bank of Australia (ASX: CBA) to BHP Group Ltd (ASX: BHP), and Telstra Group Ltd (ASX: TLS) to Woolworths Group Ltd (ASX: WOW), biannual dividend payments are the accepted norm on the ASX.

You can get investments that pay out quarterly passive income. However, these are usually confined to exchange-traded funds (ETFs) and ASX shares with primary listings overseas, such as Coronado Global Resources Inc (ASX: CRN).

But let’s talk about ASX dividend stocks that pay their investors passive income every single month. These are extraordinarily rare on the ASX, with only a handful of companies offering this perk.

And there’s only one that I’d consider buying for monthly dividend income today. It also happens to be well under $10 a share right now.

It’s Plato Income Maximiser Ltd (ASX: PL8). Plato Income Maximiser is a listed investment company (LIC). That means it functions as an investment vehicle itself, holding an underlying portfolio of shares for the benefit of its own investors.

The ASX’s best monthly passive income stock?

As its name implies, Plato’s purpose is to provide its investors with significant dividend income, paid out every month. To this end, its investing portfolio typically only consists of heavy-hitting ASX dividend shares that dole out fully franked passive income.

As of the company’s latest update, Plato’s portfolio included the likes of CBA and BHP, as well as Woodside Energy Group Ltd (ASX: WDS), Goodman Group (ASX: GMG) and JB Hi-Fi Limited (ASX: JBH).

But let’s talk dividends. So as we’ve already covered, this company pays out passive dividend income every single month. Since April 2022, this monthly dividend has come in at 0.55 cents per share.

At this LIC’s current share price of $1.18, the past 12 months’ worth of dividends give Plato a trailing and fully franked dividend yield of 6.06%.

That’s obviously quite a chunky yield, especially when you consider you bank part of it every four weeks or so.

But it’s not the only reason why I’d happily buy Plato shares today (if I didn’t already own quite a few).

Plato Income Maximiser, unlike many dividend-focused investments, also has a pretty good overall track record when it comes to absolute performance. Its December update confirms that investors have enjoyed a total return (franked dividends plus share price growth) of 9.6% per annum since the LIC’s inception in 2017.

That comes in above the return of the company’s benchmark. Yes, the S&P/ASX 200 Franking Credit Adjusted Daily Total Return Index brought in an average of 9.5% per annum over the same period.

As such, we can conclude that Plato investors have enjoyed chunky passive income paid monthly over the past almost seven years. Not to mention a market-beating investment to boot.

The post Here’s an ASX dividend stock under $10 to buy for monthly passive income appeared first on The Motley Fool Australia.

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More reading

• I’m buying these 2 ASX dividend shares for 2024 and beyond!
• How to make income every month with $10,000 and these 2 ASX dividend stocks

Motley Fool contributor Sebastian Bowen has positions in Plato Income Maximiser and Telstra Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goodman Group. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Goodman Group 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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ASX shares are, as a whole, kicking off 2024 with a rather lacklustre performance.

After gaining 8.4% in 2023, the All Ordinaries Index (ASX: XAO) is down 0.8% since the closing bell on 29 January.

But the year is young. And there are literally thousands of potentially profitable ASX shares to investigate.

If you’re looking to invest in companies that, atop hopefully gaining in value, also work to improve the world, then you’ll want to know what Andy Gracey, portfolio manager of the Emerging Companies and the Australian Shares Fund at Australian Ethical Investment, told The Motley Fool earlier this week.

And according to Gracey, investing in ethical ASX shares shouldn’t lead to lower returns.

“We believe investors don’t have to sacrifice investment returns while investing in more progressive companies that leave the world in a better place,” he said.

With that said…

ASX share leading the renewable charge

The first stock Gracey believes is positioned to outperform in 2024 is ASX energy share Contact Energy Ltd (ASX: CEN).

“We remain believers in Contact Energy which is a renewable energy generator and retailer out of New Zealand,” Gracey told us.

He noted that New Zealand’s energy transition now sees some 80% of the nation’s energy generated from renewable sources.

Gracey added:

We believe the transition will grow the overall energy market 3% to 4% per annum as electric vehicles and electrical applications progressively displace petrol and diesel. Contact Energy trades on reasonable earnings multiples with a credible dividend yield.

The ethical ASX share has gained 2% over the past 12 months.

As of Thursday’s closing price, Contact Energy shares trade on a trailing dividend yield of 4.1%, unfranked.

An ethical ASX travel stock

The second ethical ASX share Gracey is bullish on for 2024 is travel stock Webjet Ltd (ASX: WEB).

“Webjet is both a domestic online travel booking business and a much larger business to business hotels, and beds booking business,” he said.

He said his fund is “attracted to the growing long-term thematic around leisure travel and particularly the WebBeds hotel rooms market-place business”.

As for the growth outlook, he added, “We believe WebBeds can grow its circa 4% global market share into a bigger business and investors are paying a reasonable earnings multiple for the business today.”

The Webjet share price is up 6% over 12 months. The company suspended its dividend payments in 2020 following the outbreak of the COVID pandemic.

A pivotal year ahead for this ASX share

The third ethical ASX share Gracey has an optimistic outlook on is biotech company Immutep Ltd (ASX: IMM). His fund has a holding in the immunotherapy drug developer.

According to Gracey, “Immutep should have a pivotal year in 2024. We expect to see continued strong clinical data in lung cancer as well as head and neck cancer treatments.”

He added:

Immutep is the number two globally in clinical development of a new class of immunotherapy called LAG3. To date this has shown to enhance the clinical efficacy of cancer treatments, with few safety issues when combined with the global leading immunotherapy Keytruda, which is owned by pharmaceutical giant Merck.

This ethical ASX share has gained 21% over the past 12 months.

The post 3 ethical ASX shares poised to outperform in 2024 appeared first on The Motley Fool Australia.

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More reading

• Tripled since COVID: 2 rocketing ASX 200 stocks not too late to buy
• True blue tech: The ASX shares I’d buy to build a Nasdaq index-inspired portfolio
• Goldman Sachs says these ASX 200 stocks are buys today

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 Australian share market has made countless millionaires since it was established in 1987.

And the good news is that there’s nothing to stop you from trying to be one of them in the future.

But how long does it take to become a millionaire with ASX shares? Let’s take a look and find out.

Becoming a millionaire with ASX shares

History shows that with a combination of capital, time, and compounding, investments in ASX shares can grow into something significant.

But how much capital do we need? Well, the more capital you can put in, the less time you will need.

For example, based on an expected (but not guaranteed) average return of 10% per annum, which is in line with historical averages, it would take you approximately 29.7 years to grow a million-dollar portfolio by investing $500 a month into ASX shares.

That means that if you were 20 years old, you would be a millionaire when you turned 50.

But if you’re either older than this or simply want to get there quicker, you can do so by putting a little extra into ASX shares each month.

If you were to put in $1,000 a month into the share market, it would take you approximately 23 years to reach your goal.

Have more money to invest? Well, increasing your monthly contribution to $2,000 would get you to one million dollars in under 17 years.

And finally, if you’re lucky enough to have $5,000 spare to invest into ASX shares each month, you would reach your $1 million portfolio goal in 10 years.

In summary:

• $500 – 29.7 years
• $1,000 – 23 years
• $2,000 – 17 years
• $5,000 – 10 years

It is also worth noting that you could increase your monthly contributions as your wage grows over the years, which would cut down the time it takes to reach your goal.

The post How long does it take to become a millionaire with ASX shares? appeared first on The Motley Fool Australia.

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More reading

• Why I think Lovisa stock is an amazing ASX 200 buy for both dividends and growth
• Here are the top 10 ASX 200 shares today
• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX 200 shares today
• 5 things to watch on the ASX 200 on Wednesday

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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Do you have $500 spare to invest?

Because that’s all you need if you have the patience to buy ASX shares for the long run.

Of course, it always helps to buy stocks for as low a price as possible. Each cent you don’t spend on the initial outlay is a potential cent that will go towards profits later.

Here are two cheap ASX shares I think could be smart buys for investors that are willing to hold them for years:

Doubled in a year, but no doubt these are still cheap ASX shares

The Avita Medical Inc (ASX: AVH) share price has more than doubled over the past year, so it might seem absurd that I’m calling it “cheap”.

But the stock is still down more than 70% from its pre-COVID high.

The biotechnology stock makes regenerative products for burns patients. The nature of the sector means supreme patience is required from investors for products to go through all the testing and approval hurdles.

Professional investors are bullish on the future for Avita Medical.

According to CMC Invest, nine out of 10 analysts covering the stock are rating it as an add. Among those, eight think it’s a strong buy.

Multiple tailwinds for this US giant

Block Inc CDI (ASX: SQ2) shares have halved since April 2022, so it’s certainly looking cheap right now.

But the ASX stock only listed in January 2022 after the US giant acquired Australia’s Afterpay.

If you look at the track record of the original stock, Block Inc (NYSE: SQ), the current discount is even more astounding.

From its August 2021 peak, the Block share price is now down more than 77%.

The fintech has multiple factors running in its favour for the coming years.

First is that interest rate rises may have peaked and some cuts might even be around the corner. That will be a boost for growth stocks and consumer-facing businesses like Block Inc.

Second is that the business has consciously made an effort recently to reduce costs and reckless stock dilution to remunerate staff.

The third is that its interests in cryptocurrency could soon become a tailwind rather than a burden, as that market emerges from a multi-year winter.

Already Bitcoin (CRYPTO: BTC) has rocketed 42% in value over the past six months, with the approval and launch of spot ETFs in the US giving it a major long-term push.

All three analysts studying Block Inc rate it a strong buy right now, according to CMC Invest.

The post Have $500? 2 absurdly cheap ASX shares I think long-term investors should buy right now appeared first on The Motley Fool Australia.

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More reading

• Why Block, Domino’s, IDP Education, and Sayona Mining shares are sinking like stones today
• The ASX 200 stock that could rocket now that Bitcoin ETFs are running
• 2 ASX 200 shares that could surge in 2024 if the RBA cuts interest rates
• Here are the top 10 ASX 200 shares today
• How I’d invest $300 a month in ASX shares to target $22,000 annual passive income!

Motley Fool contributor Tony Yoo has positions in Avita Medical, Bitcoin, and Block. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Avita Medical, Bitcoin, and Block. The Motley Fool Australia has positions in and has recommended Bitcoin and Block. The Motley Fool Australia has recommended Avita Medical. 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 ETF provider BetaShares says last year was a record year for growth in exchange-traded funds (ETFs).

BetaShares co-founder Ilan Israelstam says ETFs received $15 billion in net inflows from investors in 2023.

This, along with asset value appreciation, helped the Australian ETF industry achieve its highest increase in annual funds under management (FUM) ever, up 33% in 2023 to a total market cap of $177.5 billion.

While this was happening, unlisted Australian managed funds had their worst year on record, with net outflows of $36.9 billion.

Israelstam said:

The industry grew $43.7B in 2023 – an industry record in terms of $ annual growth. 2/3 of this growth came from market appreciation with the remainder deriving from investor inflows and unlisted fund conversion activity.

Israelstam said Australians had fully embraced ETF investing via the ASX and Cboe Australia since the products were introduced in 2001.

He added that investors’ clear preference for ETFs today was leading to many unlisted managed funds being converted into actively managed ETFs, representing “a significant ‘changing of the guard’ in the Australian asset management industry”.

What type of ASX ETFs did investors favour in 2023?

The net inflows of $15 billion into ETFs last year represented a 12% increase on 2022.

Receiving the most funds were fixed-income, Australian shares and international shares ETFs.

Fixed-income ETFs received $5.3 billion, up from $3.6 billion in 2022. Israelstam said this reflected investors’ desire for defensive assets and higher income in an uncertain economy last year.

Australian shares ETFs received $5.2 billion, up from $4.4 billion in 2022. International equities ETFs received $2.9 billion, down from $3.3 billion in 2022.

The top 5 performing ETFs in 2023

BetaShares has also revealed the top five performing ETFs trading via the ASX and Cboe in 2023.

Although investors ploughed more funds into defensive ETFs last year, it was growth ETFs that delivered the best performance. This was largely due to the broader market turnaround in the second half.

At the top of the list is BetaShares Crypto Innovators ETF (ASX: CRYP), which delivered total returns of 215%.

Here are the others making up the top five ETFs of 2023 for total returns. You’ll note that all of them provide exposure to cryptocurrencies and tech shares.

Two of these products trade on the Cboe exchange (formerly known as Chi-X) rather than the ASX. They are the Global X 21Shares Bitcoin ETF (EBTC) and the Global X 21Shares Ethereum ETF (EETH).

These are managed investment trust ETFs that provide investors with an interest in bitcoin and ether held in cold storage by Coinbase (NASDAQ: COIN), the world’s largest cryptocurrency custodian.

What companies are you buying with the No. 1 ASX ETF?

According to the BetaShares Cryp fact sheet, this crypto ETF aims to track the performance of an index (before fees and expenses) comprising global companies at the forefront of the crypto economy.

The top three holdings in the ETF are Marathon Digital Holdings Inc (NASDAQ: MARA) at 12.4%, Coinbase Global Inc (NASDAQ: COIN) at 9.9%, and Galaxy Digital Holdings Ltd (TSX: GLXY) at 9.4%.

More ETF options for investors in 2023

Last year, 56 new ETFs were launched in Australia, making it the biggest year on record for new products.

Israelstam said:

In what is certainly an accelerating trend, a large proportion of the new launches in 2023 were Active ETFs (46% or 26 funds), with the majority of these launches being via the creation of traded classes of existing unlisted funds (which we call ‘conversions’).

At the end of 2023, the biggest ASX ETF remained the Vanguard Australian Shares Index ETF (ASX: VAS). It tracks the performance of the S&P/ASX 300 Index (ASX: XKO) and has a market cap of $14.38 billion.

What’s next for ASX ETFs in 2024?

Israelstam predicts that investors will continue to adopt ETF investing this year, and markets will be more positive. He reckons total ETF FUM could rise to $200 billion and go as high as $220 billion in a strong market.

In terms of the types of ETFs that investors may favour in 2024, Israelstam thinks international shares will be more attractive as interest rates come down.

He said:

.. we would fully expect investors to adopt more meaningfully growth oriented exposures typically found in global equities ETFs going forward.

We recently documented the top performers of 2023 among ETFs holding only Australian shares.

There was a clearly dominant theme among Aussie shares ETFs, and it wasn’t crypto or tech. It was environmental, social, and corporate governance (ESG).

The post In a record year for ETFs growth, this ASX crypto fund returned 215% appeared first on The Motley Fool Australia.

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More reading

• How much does Vanguard Australian Shares Index ETF (VAS) pay in dividends?
• 3 no-brainer ASX 300 shares I’d buy right now without hesitation
• How I’d build a backup superannuation fund with $10,000 and 5 ASX shares
• I’m buying cheap ASX shares to build my wealth in 2024 and beyond
• How I’d create investment cash flow in retirement from ASX ETFs

Motley Fool contributor Bronwyn Allen has positions in Vanguard Australian Shares Index ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Betashares Crypto Innovators ETF and Coinbase Global. 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’d love to receive $30,000 of annual passive income, but right now, I’m only getting a fraction of that. I hope to get there in the future!

So how quickly could I reach that target?

It’d be easy if I won the lottery or inherited $1 million. Then I’d just need to invest in a portfolio of ASX shares with an average dividend yield of 3%.

Every household has a different financial setup, so regularly putting money into the stock market will depend on individual situations. Investing $1,000 per month seems like a nice round target, so I’m going to use that as an example to get us to $1 million.

The share market has returned an average of roughly 10% per annum over the long term. Future returns could be stronger or weaker than that, particularly in the short term.

In 24 years, the total value could grow to $1.06 million. With a 3% dividend yield, that’s actually $31,800 of annual passive income. If a 20-year-old could reach that by age 44, they’d be sitting very nicely (financially)!

Do I need to wait 24 years to get $30,000 of annual passive income?

There are a few key ways to build up that cash flow faster.

First, by investing more. In my example, we talked about $1,000 per month. Maybe you can only invest $1,000 per month in the first year, but then circumstances change, and you can invest $2,000 per month. It would take less than 18 years if $2,000 were invested per month.

The second option is to choose investments that could deliver stronger growth. I regularly write about ASX shares I think are capable of producing returns that could beat the market.

FiThe third option is to choose investments with a higher dividend yield. I’ve assumed the dividend yield for the portfolio will be 3%. But there are plenty of businesses with much higher dividend yields.

Keep in mind that higher-yielding ASX shares could reduce their passive income and company growth rate (because it’s not keeping as much money available to invest for growth).

Having said that, a portfolio with an average yield of 6% would mean the portfolio only needs to reach $500,000. That’s half the size!

Reaching $500,000 is a much more achievable total. Going for higher-yield stocks may sacrifice some growth, but we can re-invest the dividends received into more shares and build wealth using compounding.

The post How quickly could I build a $30k annual passive income with ASX shares? appeared first on The Motley Fool Australia.

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More reading

• At 20x earnings and a 4% yield, surely I can’t ignore this ASX 200 stock?
• Brokers say buy these ASX 200 dividend stocks with juicy yields
• Why I think Lovisa stock is an amazing ASX 200 buy for both dividends and growth
• If I invested $10,000 into Pilbara Minerals shares 10 years ago, I would have…
• Retirees: 2 Top ASX dividend shares I’d buy now for passive income in 2024

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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Investors love to use the price-to-earnings (P/E) ratio to value ASX 200 stocks. But the P/E ratio isn’t an absolute indicator of whether an ASX 200 stock is cheap or not.

For example, I would be happy to pay a 20x earnings multiple for Lottery Corp Ltd (ASX: TLC) shares. But if ANZ Group Holdings Ltd (ASX: ANZ) shares were going with a P/E ratio of 20, I wouldn’t buy them with free money.

Yet there’s one ASX 200 stock that I think is currently in a sweet spot with its P/E ratio of 20. At this valuation, this stock also comes with a fully franked dividend yield of 4.2%.

I’m talking about Coles Group Ltd (ASX: COL).

Coles is a business we’d all be familiar with. The company is the second-largest grocer in Australia, with a market capitalisation of just over $21 billion.

Is this ASX 200 stock cheap?

Just to be clear, I don’t view Coles’ 20x earnings multiple as bargain-basement cheap. But I do think it represents a decent and compelling value for an ASX 200 stock today.

Especially so considering its arch-rival consumer staple Woolworths Group Ltd (ASX: WOW) is currently 35% more expensive than Coles with its present multiple of around 27. That’s with a much lower dividend yield of roughly 2.87%.

Think about what you are buying at this 20x earnings multiple. You are getting one of the most resilient businesses in Australia that all of us either have to shop at or visit a competitor in the same sector.

After all, we all need, not want, to buy the food, drinks and household essentials that Coles sells. That’s regardless of whether the economy is booming or in recession or whether we have high or low inflation.

And Coles is often the cheapest, or at least second-cheapest, place you can obtain these consumer staples.

That makes this ASX 200 stock phenomenally strong and resilient, in my view.

This strength can be seen in Coles’ dividend track record. Since hitting the ASX boards in its own right in late 2018, Coles has been able to raise its annual dividend every single year.

If you’re looking for a healthy, reliable ASX 200 stock that pays out generous dividends, I think it’s hard to go past Coles right now.

The post At 20x earnings and a 4% yield, surely I can’t ignore this ASX 200 stock? appeared first on The Motley Fool Australia.

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More reading

• Woolworths share price in the red as CEO denies trying to ‘cancel’ Australia Day
• Boost your second income with these buy-rated ASX dividend stocks
• How I’d build a backup superannuation fund with $10,000 and 5 ASX shares
• Own Woolworths shares? Here’s a $15 billion piece of news
• Top ASX shares to buy in 2024 instead of investing in a term deposit

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 Lottery. 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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If you’re in the market for some ASX 200 dividend stocks, then it could be worth taking a look at the two listed below.

Here’s why brokers have tipped them as buys:

Centuria Industrial Reit (ASX: CIP)

The first ASX 200 dividend stock that has been given the seal of approval by brokers is Centuria Industrial.

It is Australia’s largest domestic pure play industrial REIT. It owns a portfolio of high-quality industrial assets that are situated in urban infill locations throughout Australia. This includes distribution centres, logistic hubs, data centres, manufacturing hubs, and cold storage facilities.

The team at Macquarie is positive on the company and has an outperform rating and $3.41 price target on its shares.

As for income, the broker is expecting dividends per share of 16 cents in both FY 2024 and 16.5 cents in FY 2025. Based on the current Centuria Industrial share price of $3.18, this represents yields of 5% and 5.2%, respectively.

Deterra Royalties Ltd (ASX: DRR)

Another ASX 200 dividend stock that could be a buy according to brokers is mining royalty company Deterra Royalties.

Its primary focus is on bulks, base metals, and battery metals. This includes the lucrative Mining Area C iron ore operation, which is co-owned by mining behemoth BHP Group Ltd (ASX: BHP).

Morgan Stanley is feeling positive about the company thanks to high iron ore prices. It has an overweight rating and $5.65 price target on its shares.

As for dividends, it is forecasting fully franked dividends per share of 40.3 cents in FY 2024 and 30.1 cents in FY 2025. Based on the current Deterra Royalties share price of $5.38, this will mean yields of 7.5% and 5.6%, respectively.

The post Brokers say buy these ASX 200 dividend stocks with juicy yields 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 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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Lovisa Holdings Ltd (ASX: LOV) stock is a really attractive investment to me for both its dividends and growth. The S&P/ASX 200 Index (ASX: XJO) share has plenty of pleasing characteristics, which I’ll explore in this article.

Lovisa sells affordable jewellery to younger shoppers.

Strong profitable growth

Investors often like to judge a company based on profit and how much it’s expected to make. In FY23, on a 52-week comparative basis, Lovisa grew net profit after tax (NPAT) by 20.1% to $68.2 million.

A key part of Lovisa’s growth (and that of almost any ASX 200 share) is revenue growth. Store count growth is a large driver of revenue growth. In FY23, Lovisa’s revenue rose by 33.1% on a 52-week basis, and the store count grew by 27% (or 172 stores) to 801 stores.

A lot of those new stores have been open for less than a year, so a full 12 months of operations will add to revenue and profit. Opening a new store or entering a new country comes with costs before any revenue flows in. It’s an upfront investment but well worth it.

Lovisa entered a number of new markets in FY23, including Hong Kong, Taiwan, Namibia, Botswana, Spain, Italy, Hungry, Romania, UAE and Mexico. In FY24, it’s entering markets like China and Vietnam. The longer the growth runway, the more it can help Lovisa stock.

At the end of FY23, it had 195 stores in Australia and New Zealand out of a global total of 801.

The company could open a significant number of potential stores in the next decade.

For now, I’m just working on the premise that Lovisa can roughly double its store count over the next five years. This could boost its revenue and profit by roughly double, particularly if operating leverage can help with its growing store count. This would then be very supportive of Lovisa’s stock price, in my opinion.

Great dividends

If revenue and profit can continue to grow at the rate I think it might, there could be a lot of scope for the dividend to keep growing if it sticks to the same dividend payout ratio.

I’d expect capital growth to make up the larger portion of overall returns over the long term from this ASX 200 share. But the dividends are a welcome boost, particularly if we don’t want to sell any shares and still benefit from the profit growth.

In FY23, the company paid an annual dividend per share of 69 cents. That translates into a trailing cash yield of 3% and a grossed-up dividend yield of around 4%.

The dividend may not be as strong in FY24 based on the current retail conditions, but by FY26, it could pay an annual dividend per share of 91 cents (according to Commsec). This would be a potential cash yield of 4% or a grossed-up dividend yield of more than 5%.

At the current Lovisa stock price, I’d be happy to buy some shares for the long term and top up on any sell-offs.

The post Why I think Lovisa stock is an amazing ASX 200 buy for both dividends and growth appeared first on The Motley Fool Australia.

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• Here’s how I’m targeting a generous ASX passive income in retirement!
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Motley Fool contributor Tristan Harrison has positions in Lovisa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Lovisa. The Motley Fool Australia has recommended 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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Pilbara Minerals Ltd (ASX: PLS) shares have been on a wild ride over the last 12 months.

After soaring to a 52-week high of $5.43 in August, the lithium miner’s shares ended the week at $3.53.

While the decline over the five months might be disappointing for some, I doubt that longer term shareholders will be too dismayed.

That’s because Pilbara Minerals’ shares have delivered staggering returns for them over the last decade.

The state of play a decade ago

If you were to have invested in Pilbara Minerals shares 10 years ago, you wouldn’t have been investing in an ASX lithium share.

This battery making ingredient wasn’t on the menu for the company at that point.

For example, in November 2013, the company raised $750,000 to support drilling activities at the Tabba Tabba Tantalum Project in Western Australia.

It wasn’t until a year later that the company signed an agreement to “evaluate the potential to produce high-grade lithium carbonate from the extensive lepidolite mineralisation at its 100%-owned Pilgangoora Lithium-Tantalum Project in the Pilbara region of Western Australia.”

The company’s CEO at the time, David Biddle, said: “This is a great opportunity which could unlock substantial value.”

He wasn’t wrong.

What would $10,000 invested in Pilbara Minerals shares 10 years ago be worth now?

If you had been lucky enough to invest $10,000 into Pilbara Minerals shares in January 2014, you would have been able to snap them up for 3 cents each.

This means you would have ended up holding approximately 333,333 units.

Fast forward to today, with the Pilbara Minerals share price now fetching $3.53, those units would be worth almost $1.2 million if you had held onto them.

It’s also worth noting that over the last 12 months, the company has paid out 25 cents per share in fully franked dividends.

That would have seen you receive a pay check of approximately $83,000 in dividends for the 12 months.

I think I might look for the next Pilbara Minerals this long weekend!

The post If I invested $10,000 into Pilbara Minerals shares 10 years ago, I would have… appeared first on The Motley Fool Australia.

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More reading

• Here’s what Bell Potter is saying about the Pilbara Minerals share price
• Here are the top 10 ASX 200 shares today
• Is the Pilbara Minerals’ interim dividend at risk of being axed?
• Why Karoon Energy, Kogan, Northern Star, and Pilbara Minerals shares are jumping today
• Pilbara Minerals shares charge higher on rock solid Q2 update

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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