Category: Stock Market

Share markets rose remarkably in January, with the S&P/ASX 200 Index (ASX: XJO) rocketing 6.22% during the month.

Whether the surge is sustainable or if it’s yet another bear market rally is up for debate. But the gains have caused many punters to wake up and pay attention to ASX shares once again.

With a looming economic downturn, it’s fair to say investors are looking at big brand names to seek quality businesses to buy.

Three such names are Seek Ltd (ASX: SEK), Magellan Financial Group Ltd (ASX: MFG), and Virgin Australia.

The first two have, in the past, made many investors wealthy but have crashed during the past 13 months for both external and internal reasons.

Virgin, meanwhile, was delisted and went into administration in 2020 after COVID-19 brought aviation to a standstill. But its private equity owner is expected to float it once again this year, taking advantage of a post-pandemic boom in travel.

So should you buy this trio? Shaw and Partners portfolio manager James Gerrish examined their prospects:

Aeroplanes, jobs and investments

Gerrish, in a Market Matters Q&A, warned that private equity initial public offers (IPOs) “generally have a history of underperformance”.

“It is also a fair assumption that Bain, the private equity firm… will unload some shares sooner or later given its 95% stake in the airliner.”

As a counterbalance to that, Gerrish does like Virgin’s recovery out of the coronavirus pandemic and its new fleet of fuel-efficient Boeing 737 Max-8 planes.

“However, this [will] not suffice and we like other opportunities in the market with much more depth and key macro themes to support it.”

Of course, the issue price per share at the IPO will also be a consideration. But Gerrish is not expecting a bargain.

“My best guess is it will be priced fairly richly following the strong advance by Qantas Airways Limited (ASX: QAN) post-COVID.”

Gerrish’s team has ridden Seek’s 20% rise over the past quarter but thinks the jobs classified site’s had its run now.

“If Seek was a standalone holding we would indeed have looked to sell into its recent pop to fresh 5-month highs,” he said.

“From a stock sector perspective, as we’ve alluded to over recent weeks, we are looking for tech names to continue their bounce in line with the Nasdaq Composite (NASDAQ: .IXIC), but we do intend to reduce our exposure into such a move.”

Magellan has horrifyingly lost 80% of its value over the past 18 months, as a series of highly publicised governance and performance issues dogged the fund manager.

Its funds were US tech-orientated, so the NASDAQ’s decline over that time hasn’t helped either.

According to Gerrish, Magellan has diversified a bit more in recent times.

“In December 2022, the High Conviction Trust’s top 5 holdings were Alphabet Inc (NASDAQ: GOOGL), Intercontinental Exchange Inc (NYSE: ICE), Microsoft Corp (NASDAQ: MSFT), Visa Inc (NYSE: V) and Yum! Brands Inc (NYSE: YUM).”

Therefore the performance of its funds will not necessarily strictly follow the NASDAQ anymore.

But Gerrish is not upbeat about the business. 

“Performance is what this stock needs to get back on track. However, if outflows continue at similar rates and possible management fees are lowered in an attempt to maintain FUM [funds under management], we think the stock will simply continue to slide lower.”

The post Should you buy Seek, Magellan, or Virgin shares? 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

• The ASX 200 is still full of cheap shares despite this year’s surge and I’m ready to buy more
• Here are the top 10 ASX 200 shares today
• 3 ASX 200 companies brimming with cash right now
• 3 high-yield ASX shares I think are dividend traps right now
• Here are the top 10 ASX 200 shares today

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Tony Yoo has positions in Alphabet, Microsoft, and Seek. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Microsoft, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Intercontinental Exchange. The Motley Fool Australia has recommended Alphabet and Seek. 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/9aRuI7Q

The team at Morgans has been busy picking out its best ASX share ideas for February.

These are the shares that its analysts think offer the highest risk-adjusted returns over a 12-month timeframe and are supported by a higher-than-average level of confidence.

The first two shares we looked at can be found here. Read on for the next two:

Domino’s Pizza Enterprises Ltd (ASX: DMP)

Morgans has this pizza chain operator on its best ideas list again this month. Its analysts continue to believe that investors should be taking advantage of the share price weakness that has been caused by headwinds that will soon reverse. It explained:

DMP is, in our opinion, a high quality operator with significant brand strength, first class executive management and a global platform for long-term network expansion. Cost inflation and adverse FX movements present significant challenges to earnings at present, as evidenced by EBIT margins, which fell from 13.4% in FY21 to 11.5% in FY22. SSS sales, which averaged +6.9% in the ten years between FY11 and FY21, dropped to (0.3)% in FY22 and (1.0)% in FY23 YTD. We believe these pressures are transitory in nature. In our opinion, now is the best time to consider an investment in a quality business like DMP that is facing headwinds that will reverse in time. The recent equity raise will fund DMP’s acquisition of the remaining stake in its German joint venture and keep gearing low enough to allow for future M&A optionality.

The broker has an add rating and $90.00 price target on Domino’s shares.

Lovisa Holdings Ltd (ASX: LOV)

Another ASX share that Morgans has on its best ideas list is growing fashion jewellery retailer Lovisa. Morgans thinks very highly of the company and believes it could one day become a global force thanks to its ambitious leadership team and global expansion plans. It said:

LOV may just prove to be one of the biggest success stories in Australian retail. With ambitious and well-incentivised new leadership in place, we think now is the time LOV steps up to become a global force. LOV has accelerated its organic rollout in the US and entered into a number of new markets, including Poland, Canada, Mexico and Hong Kong. It is also poised to enter the important market of Italy. Investment will be needed to expand LOV’s network in the US and Europe and to take it into new markets, but the returns could be stellar. We think LOV’s products fill an underserved niche, offering fast fashion jewellery at prices that are attainable to the target demographic

Morgans has an add rating and $28.50 price target on Lovisa’s shares.

The post Morgans names 2 more of the best ASX shares to buy in February 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 I’d invest $200 a month in ASX shares to make a $20,000 passive income for life
• Morgans names 8 ASX retail shares to buy
• Here are the top 10 ASX 200 shares today
• Buy and hold these fantastic ASX growth shares: experts
• Which ASX dividend shares I’d buy now to target $50,000 of annual passive income

Motley Fool contributor James Mickleboro has positions in Domino’s Pizza Enterprises. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Domino’s Pizza Enterprises and Lovisa. The Motley Fool Australia has recommended Domino’s Pizza Enterprises and Lovisa. 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/9J3ameK

If you are wanting to bolster your portfolio with some ASX tech shares and have a high tolerance for risk, then the small caps listed below could be worth a look.

Both of these small cap tech shares have been tipped as buys by Goldman Sachs recently. Here’s what the broker is saying about them:

Readytech Holdings Ltd (ASX: RDY)

The first small cap ASX tech share that Goldman Sachs has named as a buy is Readytech.

It is a leading provider of mission-critical software-as-a-service (SaaS) solutions for the education, employment services, workforce management, government and justice sectors.

Goldman believes that the company’s shares are trading at an attractive level after pulling back following the collapse of a takeover approach. It said:

RDY remains a tech value play within our coverage universe, trading at a >50% discount to peers when accounting for its robust growth outlook. Government software has been a pocket of strength and resilience within TMT (~3/4 of RDY’s earnings) and we are positive on RDY’s ability to deliver mid-teens organic growth at an expanding profit margin through the cycle.

Goldman Sachs has a buy rating and $4.45 price target on its shares.

Temple & Webster Group Ltd (ASX: TPW)

Another small cap that Goldman Sachs is a big fan of is online furniture and homewares retailer Temple & Webster.

Its analysts believe that Temple & Webster is well-positioned for strong long term growth thanks to its leadership position in a retail category that is in the early stages of shifting online.  It commented:

Our Buy thesis is predicated on the following key drivers: (1) we believe TPW is well positioned in the upcoming cycle to continue to grow market share, despite a weaker macro environment; (2) in our view TPW is best placed to be a winner in a category that favours scale players, requires a specialised approach to e-commerce, and has higher barriers to entry vs. other retail categories; and (3) greater focus on costs is a sensible strategy to balance near-term profitability with growth.

Goldman has a buy rating and $7.60 price target on its shares.

The post Goldman Sachs names 2 exciting small cap ASX tech shares to buy right now 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

• 2 explosive ASX growth shares to buy now: Goldman Sachs
• Leading brokers name 3 ASX shares to buy today
• How I’d invest $20,000 in ASX shares in 2023
• Bargains or traps? Fundie reveals if these 3 ASX shares are worth buying cheap
• Top ASX growth shares to buy in 2023

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 ReadyTech and Temple & Webster Group. The Motley Fool Australia has recommended ReadyTech and Temple & Webster 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/VjgGdE7

There are many Australians who invest in ASX shares on the basis that the businesses are on the right side of massive trends.

These could be themes like lithium production, electric vehicles, or the ageing population.

But one expert has warned that investing in mega-trends is a trap that could lose you significant amounts of money.

US financial expert and buy-and-hold advocate Brian Feroldi took the example of meat substitutes as an example in his newsletter.

“Last year, global sales of plant-based meat rose 31% to more than $10 billion, according to Statista. Over the next five years, that figure is expected to triple,” he said.

“This is clearly a mega-trend in the making.”

However, the winners from such explosive growth aren’t always investors.

“In the case of plant-based meat, consumers and society are most likely to reap the bulk of the rewards,” said Feroldi.

“That’s because we don’t see any discernible moat — or sustainable competitive advantage — for the largest players.”

The fake meat business is booming, but are investors cashing in?

Take a look at one of the pioneers, Beyond Meat Inc (NASDAQ: BYND).

As a first-mover in the industry, investors went crazy for the shares after the company listed in 2019. Within the first few months, the share price went from the US$60s to the US$230s. 

This is the sustainable future in a world craving better health and feeding a massive population, thought shareholders.

And that sentiment is still likely true, with more and more people consuming meat substitutes each year.

But now the Beyond Meat stock price is languishing around US$16.

Why? Because larger, deep-pocketed competitors joined the plant-based meat market when they saw how lucrative the business is.

“Scores of rivals like Tyson Foods Inc (NYSE: TSN), Kraft Heinz Co (NASDAQ: KHC), and Conagra Brands Inc (NYSE: CAG) have started offering plant-based meats of their own at cheaper prices,” said Feroldi.

“When that happens, gross margins — the price a burger sells for minus what it cost to make — contract.”

Feroldi presented the deterioration in Beyond Margin’s gross margins in black-and-white:

Year	Beyond Meat’s gross margin
2019	33.5%
2020	30%
2021	25.2%
2022	(6.2%)

“That’s right, the company has been forced to slash prices so much it is losing money with each sale.”

And that’s why a business’ moat matters much more than trends.

A company could be in the most exciting growth field in the history of humankind, but if everyone else can easily pile on then investors will lose.

“Before you run out [and] invest in the next mega-trend, ask yourself: what’s this company’s moat?” said Feroldi.

“Without that moat protecting profits, it’s just a matter of time before competitors show up to drive down prices. And when that happens, it is consumers — not investors — that stand to benefit the most.”

The post Mega-trends don’t make you rich: Why moats matter in investing 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

• Buy these ASX 200 shares for a passive income boost: analysts
• 5 things to watch on the ASX 200 on Thursday
• Top ASX dividend shares to buy in February 2023
• 2 globetrotting ASX ETFs for investors to buy in February
• Experts say these ASX dividend shares are top buys right now

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Beyond Meat. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Kraft Heinz. 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/veQx4ni

There are plenty of passive income options on the Australian share market to choose from. Two top ASX 200 dividend shares that brokers rate highly are listed below.

Here’s why they have been named as buys:

Endeavour Group Ltd (ASX: EDV)

Goldman Sachs believes that this drinks company could be a quality option for investors right now. Its analysts currently have a buy rating and $7.80 price target on the company’s shares.

The broker likes the company due to its industry-leading position and attractive valuation. It commented:

Xmas trading has been strong as evidenced by liquor retail sales acceleration and pubs growth feedback from peers is accelerating into Jan 2023. Our sensitivity analysis suggests the risk of cashless gaming is already largely priced in. […] EDV now trades at 19.7x FY24 P/E vs historical average of 24.3x and is value entry point for a high quality industry leader.

As for dividends, the broker is forecasting fully franked dividend of approximately 21.4 cents per share in FY 2023 and 24 cents per share in FY 2024. Based on the current Endeavour share price of $6.62, this equates to yields of 3.2% and 3.6%, respectively.

Telstra Group Ltd (ASX: TLS)

Analysts at Morgans believe that Telstra could be a quality dividend share to buy. The broker is a fan of the telco giant and has a buy rating and $4.65 price target on its shares.

Morgans likes Telstra due to its successful turnaround, positive outlook, and valuation. In respect to the latter, the broker feels Telstra’s assets are worth more than the market is pricing in. It said:

After a major turnaround, TLS has emerged in good shape with strong earnings momentum and a strong balance sheet. In late CY22 shareholders vote on Telstra’s legal restructure, which opens the door for value to be released. TLS currently trades on ~7x EV/EBITDA. However some of TLS’s high quality long life assets like InfraCo are worth substantially more, in our view. We don’t think this is in the price so see it as value generating for TLS shareholders.

As for dividends, the broker is forecasting fully franked dividends per share of 16.5 cents in both FY 2023 and FY 2024. Based on the current Telstra share price of $4.15, this will mean yields of 4%.

The post Buy these ASX 200 shares for a passive income boost: analysts 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

• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Why TPG and Telstra shares could get a big profit boost in 2023
• Leading brokers name 3 ASX shares to buy today
• Here’s the Telstra dividend forecast through to 2025
• 2 ASX 200 shares to buy even as the world slips into recession

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 Telstra 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/k36jPwC

On Wednesday, the S&P/ASX 200 Index (ASX: XJO) was back on form and pushed higher. The benchmark index rose 0.3% to 7,501.7 points.

Will the market be able to build on this on Thursday? Here are five things to watch:

ASX 200 expected to fall

The Australian share market may fall on Thursday following a wild night of trade on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 26 points or 0.35% lower this morning. In late trade in the United States, the Dow Jones is down 0.45%, the S&P 500 has risen 0.3%, and the NASDAQ is up 0.8%. US stocks were deep in the red at one stage.

US Fed raises rates

The US Federal Reserve has raised its benchmark interest rate by a quarter percentage point and given no indication that it is near to the end of this hiking cycle. This took its interest rate to a target range of 4.5% to 4.75%. While the hike was not unexpected, the market was looking for hints that the cycle could soon be over. US stocks plunged on the news but have now started to rebound.

Oil prices tumble

Energy shares Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a tough day after oil prices tumbled on Wednesday night. According to Bloomberg, the WTI crude oil price is down 2.8% to US$76.68 a barrel and the Brent crude oil price is down 2.8% to US$83.09 a barrel. This was driven by U.S. government data showing a big build in crude oil, gasoline and distillate inventories.

QBE named as a buy

The QBE Insurance Group Ltd (ASX: QBE) share price could be great value according to Goldman Sachs. This morning the broker has retained its buy rating and $16.67 price target on the insurance giant’s shares. This follows the release of a quarterly update from rival Chubb in the United States. It said: “Our US analyst views the result as favourable driven by better-than-expected core underwriting result ex crop and particularly in commercial lines.”

Gold price falls

ASX 200 gold shares Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) will be on watch after the gold price dropped overnight. According to CNBC, the spot gold price is down 0.25% to US$1,940.4 an ounce. The precious metal softened after the US dollar strengthened.

The post 5 things to watch on the ASX 200 on Thursday 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

• Bears beware! ASX 200 recoups all of 2022’s losses plus more in January
• Investing in ASX 200 gold shares? Here’s what to expect from the yellow metal in 2023
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• ASX shares investors rejoice! RBA says inflation has now peaked
• Should I buy Qantas shares before the company’s ASX earnings 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.

from The Motley Fool Australia https://ift.tt/EqmKb2L

Are you…

A) Contemplating retirement and worrying about whether you’ll have enough income to live on?

B) Keen to help offset the soaring cost of living without having to work longer hours?

C) Hoping to benefit from franking credits like countless other Aussies have been doing over the past 30+ years?

D) Disillusioned by the interest rate your bank is offering in exchange for locking up your hard-earned cash? 

E) Not really sure but just love the idea of getting paid for doing not much of anything?

If you answered yes to any of the above, you may be in the market for some ASX dividend shares. These types of stocks regularly divvy out a portion of their profits to their owners — the shareholders! And, with any luck (as well as top-notch management!), will also deliver share price gains over the long term as well.

But the ASX is awash with dividend shares so the decision on what to buy can be daunting.

For their thoughts, we asked our Foolish writers which income-paying stocks they are loving the look of right now. Here is what they said:      

6 best ASX dividend shares for February 2023 (smallest to largest)

• Best & Less Group Holdings Ltd (ASX: BST), $238.82 million
• Nick Scali Limited (ASX: NCK), $967.95 million
• Transurban Group (ASX: TCL), $42.47 billion
• Rio Tinto Ltd (ASX: RIO), $47.01 billion
• ANZ Group Holdings Ltd (ASX: ANZ), $75.35 billion
• Commonwealth Bank of Australia (ASX: CBA), $185.83 billion

(Market capitalisation as of 1 February 2023)

Why our Foolish writers love these ASX passive-income stocks

Best & Less Group Holdings Ltd

What it does: Best & Less describes itself as a value apparel specialty retailer with around 250 stores and an e-commerce offering. It wants to be the number one choice for families buying baby and kids’ value apparel in Australia and New Zealand through Best & Less in Australia and Postie in New Zealand.

By Tristan Harrison: The Best & Less share price is down around 50% since the start of February 2022. This has had the effect of boosting the company’s possible payout ratio.

Commsec numbers suggest this ASX All Ords share could pay an annual dividend per share of 23.5 cents in FY24, translating into a FY24 grossed-up dividend yield percentage in the mid-teens.

While FY23 may be tricky for profitability, I think FY24 could be positive, particularly as Best & Less adds to its store network. Six new stores are scheduled for opening in the second half of FY23, and the company is also refurbishing some existing stores. It is committed to paying a dividend of 60% to 80% of net profit.

Motley Fool contributor Tristan Harrison does not own shares in Best & Less Group Holdings Ltd.

Nick Scali Limited

What it does: Nick Scali is a furniture retailer and owner of an eponymous brand as well as the Plush – Think Sofas brand. It has more than 100 stores across Australia and New Zealand as well as a successful e-commerce platform.

By Bronwyn Allen: The Nick Scali share price has had a great start to 2023, with a 15% gain already, so I reckon value investors are already onto this one. Despite this, I believe the trailing gross dividend yield is still very attractive at 8.3%.

Sales are increasing, partly due to the company’s first major acquisition — the purchase of Plush in November 2021, with integration largely completed at the end of FY22.

I’m excited to see the FY23 first-half (1H FY23) numbers due out next Monday (6 February) to get a better picture of how Plush is growing the company’s earnings. Nick Scali has guided a 57% to 66% increase in net profit after tax (NPAT) in 1H FY23 compared to 1H FY22.

Motley Fool contributor Bronwyn Allen owns shares in Nick Scali Limited. 

Transurban Group

What it does: Transurban is a large-scale operator of tolled roads. It has a near monopoly on Sydney’s toll roads but also owns roads in other capital cities, as well as in North America.

By Sebastian Bowen: Transurban’s reputation as one of the ASX 200’s safest dividend shares was trashed during the pandemic years. But the company has bounced back steadily ever since the dark days of 2020.

What I believe makes Transurban such an attractive dividend share is its resistance to inflation.

Most of Transurban’s toll roads are contractually permitted to increase their tolls in line with inflation, protecting the company’s earnings base from erosion.

As such, I think this is a useful company to have in any income portfolio – especially with its dividend yield closing in on 4% at recent pricing.

Motley Fool contributor Sebastian Bowen does not own shares in Transurban Group.

Rio Tinto Ltd

What it does: Rio Tinto is one of the globe’s largest miners with a portfolio of world-class operations across a range of commodities.

By James Mickleboro: I think Rio Tinto could be a top option for ASX income investors in February. That’s because China’s reopening looks set to support robust demand for copper and iron ore, which bodes well for commodity prices.

In fact, as things stand, Rio Tinto is generating significant free cash flow, which is expected to underpin some big dividends in the near term.

Goldman Sachs, for example, is currently forecasting fully-franked dividends per share of US$4.40 (A$6.25) in FY 2023 and US$5.70 (A$8.10) in FY 2024. This equates to yields of 4.9% and 6.35%, respectively, at the time of writing.

Goldman has a buy rating and a $134.40 price target on the mining giant’s shares.

Motley Fool contributor James Mickleboro does not own shares in Rio Tinto Ltd.

ANZ Group Holdings Ltd

What it does: The ANZ we know and, arguably, love was born more than 50 years ago and is now one of Australia’s ‘big four’ ASX 200 banks. Nowadays, it provides banking and financial services to millions of retail and business customers across 32 markets.

By Brooke Cooper: ANZ is both the highest-yielding and cheapest of the big four banks on a price-to-earnings (P/E) ratio basis. It currently boasts a 5.9% dividend yield and a P/E ratio of 10.65, according to CommSec data.

I also like the company’s proposed acquisition of Suncorp Group Ltd (ASX: SUN)’s banking division – set to bring greater exposure to the Queensland market. The sunshine state was crowned Australia’s best-performing economy by CommSec’s latest State of the States report.

Finally, ANZ is favoured by both Macquarie and Citi. They each have an equivalent buy rating on the stock, while the latter has given it a $29.25 price target and expects the bank to grow its dividends in the future.

Motley Fool contributor Brooke Cooper does not own shares in ANZ Group Holdings Ltd or Suncorp Group Ltd.

Commonwealth Bank of Australia

What it does: CBA provides a range of financial services including retail and business banking, funds management, superannuation, insurance, and broking services. With a market cap of some $185 billion, it’s Australia’s largest bank and the second-biggest stock trading on the ASX.

By Bernd Struben: CBA is well-respected as a long-term, reliable dividend stock.

The bank has delivered two fully franked dividends per year for well over a decade, including during the pandemic-addled 2020 market turmoil.

CommBank also offers a dividend reinvestment plan (DRP).

At the current share price, CBA pays a 3.6% trailing dividend yield, having paid out $3.85 per share in 2022. But that could well grow.

Morgan Stanley is forecasting the CBA dividend to increase the most of any of the big four banks this year to $4.50 per share, up 17% year on year.

The CBA share price has also been a strong performer, gaining almost 9% so far in 2023 and around 17.2% over the past 12 months.

Motley Fool contributor Bernd Struben does not own shares in Commonwealth Bank of Australia. 

The post Top ASX dividend shares to buy in February 2023 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(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 5 ASX 200 shares smashing new 52-week highs on Wednesday
• ASX shares investors rejoice! RBA says inflation has now peaked
• The Rio Tinto share price just hit a new 52-week high! Here’s why
• Buy these ASX passive income shares now: experts
• Top ASX shares to buy in February 2023

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 Macquarie 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/eC9zXyc

If you’re wanting to add some exposure to global markets to your portfolio, then an easy way to do it would be through exchange traded funds (ETFs).

Rather than having to open up an international brokerage account, ETFs can be bought in the same way that you would buy shares in ASX listed companies.

With that in mind, listed below are two top ETFs that allow investors to buy a large collection of international shares in one fell swoop.

Here’s what you need to know about them:

Vanguard MSCI Index International Shares ETF (ASX: VGS)

The first ETF for investing globally is the Vanguard MSCI Index International Shares ETF.

This popular ETF gives investors access to almost 1,500 of the world’s largest listed companies from 23 major developed countries including the U.S, Japan, U.K, Canada, France, and Switzerland.

The fund manager notes that the ETF offers greater access to sectors such as technology and health care that aren’t as well represented in the Australian share market.

Among the global giants you’ll be buying with this fund are Apple, HSBC, LVMH Moet Hennessy Louis Vuitton, Nestle, Procter & Gamble, Roche, Royal Bank of Canada, Shell, and Visa.

Vanguard U.S. Total Market Shares Index ETF (ASX: VTS)

Another ETF for investors to look at for international exposure is the Vanguard Australian US Total Market Shares Index ETF.

As you might have guessed from its name, this low-cost ETF provides investors with access to some of the largest companies listed in the United States.

Vanguard believes it could be a top option for buy and hold investors. Particularly those that are seeking long-term capital growth, some income, and international diversification.

Among the companies included in the ETF are household names such as Amazon, Boeing, JP Morgan, Starbucks, and Walmart.

The post 2 globetrotting ASX ETFs for investors to buy in February 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

• The Vanguard MSCI Index International Shares ETF lagged the market in January. Here’s why?
• 3 popular ETFs that could be top picks right now
• 3 highly rated ETFs for ASX investors to buy right now
• Forget gold, I’m using the Warren Buffett method to try and get rich!
• 3 fantastic ETFs for ASX investors to buy this month

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 Vanguard Msci Index International Shares ETF. 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/QVixspt

If you’re looking for dividend shares to buy, then the two listed below could be worth a look.

Both have been named as buys by experts recently. Here’s why they are bullish on them:

Macquarie Group Ltd (ASX: MQG)

The first ASX dividend share that could be in the buy zone is this investment bank.

The team at Morgans is positive on Macquarie due to its exposure to long term structural tailwinds. It explained:

We continue to like MQG’s exposure to long-term structural growth areas such as infrastructure and renewables. The company also stands to benefit from recent market volatility through its trading businesses, while it continues to gain market share in Australian mortgages.

Morgans has an add rating and $214.33 price target on the company’s shares.

In respect to dividends, the broker is expecting partially franked dividends of $7.05 per share in FY 2023 and $7.36 per share in FY 2024. Based on the current Macquarie share price of $187.00, this will mean yields of 3.8% and 3.9%, respectively.

Universal Store Holdings Ltd (ASX: UNI)

Another ASX dividend share to consider is this youth fashion retailer.

Goldman Sachs is a fan of Universal Store and has just named it as a key pick. The broker is positive due to the company’s exposure to younger consumers, which it expects to continue spending in 2023.

It also believes that a recent update from an industry peer is supportive of its bullish view on Universal Store. It commented:

UNI a key pick into 1H23 results: the positive demand backdrop reported by AX1 gives us incremental confidence in the youth consumer discretionary category during the key holiday promotional period. Our monitoring of promotions and web traffic suggests UNI is performing in-line with our expectations and showing discipline with discounting.

Goldman Sachs has a buy rating and $7.55 price target on its shares.

As for dividends, the broker is expecting fully franked dividends of 26.1 cents in FY 2023 and 29.9 cents in FY 2024. Based on the latest Universal Store share price of $5.71, this equates to yields of 4.6% and 5.2%, respectively.

The post Experts say these ASX dividend shares are top buys right now 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

• Top brokers name 3 ASX shares to buy next week
• $20,000 invested in these ASX shares 10 years ago is worth how much now?
• Morgans names 8 ASX retail shares to buy
• Buy Macquarie and this ASX 200 dividend share: analysts
• Goldman Sachs names 2 ASX dividend shares to buy 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 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.

from The Motley Fool Australia https://ift.tt/5twrk3T

The Lynas Rare Earths Ltd (ASX: LYC) share price went on a very strong run in January, rising by around 20%. The S&P/ASX 200 Index (ASX: XJO) climbed by 6%.

Lynas released its quarterly update on 30 January 2022, which included a number of interesting updates.

So, while investors may have liked that update for the three months to 31 December 2022, it may not have provided the fuel for a lot of recovery in the future.

We’ll have a look at the update in a moment, but let’s consider what happened in the wider market which could have impacted the Lynas share price last month.

Growth gets a boost

A number of ASX growth shares saw a pleasing rise over January as they recovered some of the lost ground from 2022.

For example, the Xero Limited (ASX: XRO) share price went up 9%, the Block Inc (ASX: SQ2) share price rose over 20%, and the Lovisa Holdings Ltd (ASX: LOV) share price climbed 13%.

It was also a good month for ASX mining shares, for example, the BHP Group Ltd (ASX: BHP) share price climbed by 8% and the South32 Ltd (ASX: S32) share price rose by 13.5%.

January saw a strong start to the year for commodity businesses as well. So, Lynas seems to have benefited from the recovery in investor sentiment for both growth shares and mining shares.

Lynas quarterly update

The business reported quarterly sales revenue of $232.7 million in the three months to December 2022, compared to $163.8 million in the first quarter of FY23 and $202.7 million in the second quarter of FY22. This is helpful for the Lynas share price.

Total rare earth production was up 6% year over year, and up 27% quarter over quarter.

Lynas explained that these numbers were up after water supply disruptions in the prior quarter.

It also said that “market prices started to increase again from December in anticipation of the late January Lunar New Year holidays and an expected rebound of the consumption in China”, though future pricing trends “will depend on China’s economic recovery”.

Lynas also revealed that progress on major construction activities accelerated at the Kalgoorlie rare earths processing facility in the quarter, while the Mt Weld expansion project is “progressing as planned”.

It continues to “progress its deliverables” for the development of a US rare earths separation facility.

Foolish takeaway

After the rare earth miner’s rise, analysts are now mixed on the Lynas share price. Of the analyst opinions that Commsec collects, there are four buy ratings, three hold ratings, and three sell ratings.

The post Why did the Lynas share price rocket 20% in January? 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

• Here are the top 10 ASX 200 shares today
• Why is the Arafura share price surging 12% to an 11-year high?
• Why was the Lynas share price hit so hard on Tuesday?
• Here are the top 10 ASX 200 shares today
• Why Block, Core Lithium, Lynas, and Xero shares are charging higher today

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.

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