Category: Stock Market

Time to get personal. Like many, if not most, investors, 2022 was a tough year for my ASX shares. With the S&P/ASX 200 Index (ASX: XJO) losing 5.5% last year, it was always going to be hard for an ASX portfolio to break even.

But I still had more than a few winners helping to offset some of the losses in my portfolio. So I shall now reveal my top three best-performing ASX shares of 2022, and why I reckon they will continue to be winners in 2023.

My top 3 ASX shares of 2022

National Australia Bank Ltd (ASX: NAB)

NAB is an ASX share that needs little introduction. It is now the second-largest ASX bank share on the market by market capitalisation, only behind Commonwelath Bank of Australia (ASX: CBA). NAB is one of my oldest investments, and I have been loath to sell it before out of pure, foolish nostalgia.

But these days, I am quite happy to hold it as one of my investments, helped by the 4.2% share price gain I enjoyed last year. That came with a healthy dividend too, which boosted my returns by another 7% or so.

I have been impressed with the business’ performance since CEO Ross McEwan took over a few years ago and I think NAB will prove a solid investment in 2023 and beyond accordingly.

Wesfarmers Ltd (ASX: WES)

Wesfarmers is a newer position of mine. I was fortunate enough to buy some shares when this company was really on the nose back in October.

Since then, I have enjoyed double-digit gains on my position, with my only regret being that I didn’t buy more. That’s despite the Wesfarmers share price losing more than 22% of its value over the entire calendar year.

I think Wesfarmers is one of the top-tier ASX shares on our market. It has an incredibly diverse earnings base, with stakes in a wide range of retail and industrial businesses.

Its crown jewel Bunnings is one of the best-run retailers in the country too. Accordingly, this is a company that I have no plans to ever sell.

A2 Milk Company Ltd (ASX: A2M)

A2 Milk rounds out my top performers of 2022. A2 Milk shares had a pretty great year last year, considering the returns of the broader market.

This company enjoyed a 26% or so rise over 2022, which makes it my best-performing ASX share of the year. We can probably thank improving business conditions, as well as China’s moves towards reopening, for these gains.

Unfortunately, I bought A2 Milk shares back in 2021 and, even after these healthy gains, I am still underwater. But even so, it’s been nice to see such a spirited recovery for this embattled share.

I think A2 still has a lot of potential and I think 2023 will be another great year for this former market darling.

The post My 3 best ASX shares of 2022 – and why I think they’ll win again in 2023 appeared first on The Motley Fool Australia.

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More reading

• Starting 2023 with no savings? I’d follow Warren Buffett and start building wealth
• Why 2023’s stock market could offer me once-in-a-generation returns
• Want 17% upside plus dividend income? Broker says buy Wesfarmers shares
• Can ASX bank shares deliver in 2023 after higher interest rates?
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Sebastian Bowen has positions in A2 Milk, Wesfarmers and National Australia Bank. 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 Wesfarmers. The Motley Fool Australia has recommended A2 Milk. 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, Telstra Group Ltd (ASX: TLS) shares have dropped with the market.

At the time of writing, the telco giant’s shares are down slightly to $3.97.

This means the Telstra share price is now down approximately 4.5% since this time last year.

While this may be a little disappointing for shareholders, it could have created a buying opportunity for the rest of us.

That’s the view of the team at Morgans, which has the company on its best ideas list with an add rating and $4.60 price target on its shares.

Based on where Telstra shares are trading today, this suggests potential upside of approximately 16% for investors over the next 12 months.

But the returns don’t stop there! Far from it, Morgans is expecting Telstra to pay another 16.5 cents per share fully franked dividend in FY 2023. This represents a healthy 4.15% dividend yield at current prices.

Why should you buy Telstra shares?

Morgans believes that Telstra shares are worth far more than their current market value. This is due largely to its “strong earnings momentum and a strong balance sheet”, as well as its recent legal restructure.

Its analysts highlight that the latter, which has recently been approved by shareholders, could unlock value. It explained:

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. This, free option, combined with likely reputational damage to its closest peer, following a major cybersecurity incident, means TLS looks well placed for the year ahead.

Overall, this could make Telstra a top blue chip option for investors in 2023.

The post Can Telstra shares deliver 16% upside AND a healthy dividend this year? appeared first on The Motley Fool Australia.

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• How different is the Vanguard Australian Shares Index ETF (VAS) now compared to a year ago?
• Buy Telstra and this ASX 200 dividend share for income in 2023: brokers
• Here’s how I plan to recession-proof my ASX share portfolio this year
• Telstra shares fell short in 2022. Can they deliver in 2023?
• 23 ASX shares to buy in 2023 – brokers

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.

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These two ASX mining shares could have significant upside according to analysts.

Argosy Minerals Ltd (ASX: AGY) and Musgrave Minerals Ltd (ASX: MGV) share prices are both tipped to charge higher.

Let’s take a look at these two ASX mining shares in more detail.

Argosy Minerals

Argosy Minerals is a lithium miner developing the Rincon Lithium Project in Argentina. The company’s shares are 0.45% in the red today and currently fetching 65.3 cents.

Analysts at Canaccord Genuity have placed a speculative buy rating on Argosy Minerals shares with a price target of 85 cents. This implies a 30% upside. Analysts noted Argosy has produced maiden battery quality lithium carbonate at the Rincon project, commenting:

The production of 99.76% lithium carbonate (250kgs) represents a significant validation of its production process, in our view.

In 2023, the team at Canaccord believe Argosy “is likely” to deliver on multiple fronts that could unlock value for shareholders. These include first sales of lithium product, customer offtake agreements, the ramp-up of the two kilo tonnes per annum (ktpa) plant, resource and reserve updates and a final investment decision and financing of the 10 ktpa plant. Analysts added:

We value AGY using a 50:50 NAV:five-year average EBITDA with a multiple of 7.5. We use US$22,500 per tonne for our lithium price and USD/AUD of 0.75.

Musgrave Minerals

Musgrave Minerals is a gold explorer developing the Cue Project in Western Australia. The company’s shares are down 2% today and are currently fetching 22 cents.

Argonaut equity research has placed a speculative buy rating on Musgrave with a 40 cent price target. This implies an upside of 82% based on the current share price. Analyst Royce Haese highlighted the “rare nature” of high-grade, near surface gold deposits in WA.

Commenting on Musgrave, Haese said:

Updated met results exceed our expectations and granting of mining leases is another tick towards development.

On our modelling we bump up our assumed average project metallurgical recovery from 92% to 93%, retaining plenty of conservatism. We still assume processing through Dalga. Our valuation improves slightly to $0.40 per share, prior $0.38.

The post Buy these 2 ASX mining shares with over 30% upside: brokers appeared first on The Motley Fool Australia.

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More reading

• Why Argosy Minerals, Block, Essential Metals, and Resolute shares are storming higher
• This ASX 300 lithium share boomed in 2022, and still has 30% upside: broker
• These were the 3 best performing ASX lithium shares of 2022
• 3 ASX All Ordinaries shares up by more than 60% in 2022
• Why Argosy Minerals, Arafura, Deep Yellow, and Pro Medicus shares are charging higher

Motley Fool contributor Monica O’Shea has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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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Welcome to 2023! It might be a good year for investors so far, with the S&P/ASX 200 Index (ASX: XJO) now up more than 2.7% year to date. But that is probably cold comfort for those of us starting 2023 with no savings. If that’s you, never fear. The wise words of Warren Buffett can be a great place to start building wealth, no matter your age.

The legendary investor Warren Buffett may be in his 90s but he is still regarded as one of the best investors in the world. His holding company Berkshire Hathaway Inc (NYSE: BRK.A)(NYSE: BRK.B) has navigated the stormy waters of the past two years with aplomb, and its shares are now sitting at 40% above its pre-COVID highs.

So what would Buffett’s first piece of advice for someone with no savings be? I would bet he’d repeat this advice he gave once: “Do not save what is left after spending, but spend what is left after saving”.

You can’t invest for your future if you have no savings to start with. And consistently building up a healthy savings account starts with spending less money than you earn. You simply can’t get ahead unless you master this skill.

But once you have a healthy pile of savings squirrelled away for a rainy day, what does one do next?

How Warren Buffett tells most people to invest

Well, Buffett would tell you to start investing, since cash has proven to be a poor store of value over a long period of time.

Warren Buffett is well known for his value investing style. He loves finding companies that are trading for less than what he sees they are worth. One of his most famous quotes is “price is what you pay, value is what you get”.

Buffett loves buying quality companies when they are on the nose with most other investors. Some of his biggest positions were built out when a company had a temporary fall in value.

But what if figuring out what an investment is worth is not your strong suit? Well, Buffett reckons most people would be better off just investing in a simple index fund anyway.

In 2017, he told CNBC that investors should “consistently buy an S&P 500 low-cost index fund” and “keep buying it through thick and thin, and especially through thin”.

So that’s some of Warren Buffet’s wisdom that I think would be of most use to a would-be investor starting 2023 with no savings. Investing takes a long time to bear fruit. But when it does, you’ll be glad you started.

The post Starting 2023 with no savings? I’d follow Warren Buffett and start building wealth appeared first on The Motley Fool Australia.

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More reading

• Why 2023’s stock market could offer me once-in-a-generation returns
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Monday
• Will 2023 bring gains for ASX 200 shares? Here’s what Citi is forecasting

Motley Fool contributor Sebastian Bowen has positions in Berkshire Hathaway. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Berkshire Hathaway. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway, short January 2023 $200 puts on Berkshire Hathaway, and short January 2023 $265 calls on Berkshire Hathaway. The Motley Fool Australia has recommended Berkshire Hathaway. 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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Last year was dismal for the Australian stock market. Indeed, the S&P/ASX 200 Index (ASX: XJO) posted its second-largest annual loss of the last decade, falling 5.45% over the course of 2022.

Fortunately, there’s likely a silver lining to the market’s mayhem. I believe the downturn has brought about a once-in-a-generation opportunity to realise major returns.

Taking Buffett’s advice in 2023

Last year brought soaring inflation, multiple interest rate hikes, and a war in Ukraine, all of which contributed to a tumultuous year on the ASX. And such factors haven’t abated yet.

But I’m still following the advice of investing great Warren Buffett. The billionaire once told investors:  

[W]e simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.

And that’s how I plan to approach the stock market in 2023.

When most market participants are fearful, quality shares are more likely to trade below fair value amid low expectations. Of course, the cheaper one buys a value share, the larger their potential returns.

Though, it’s worth noting no investment is guaranteed to provide gains or downside protection.

Looking back on the 2018 downturn

2018 was this decade’s worst year for the Australian stock market. The ASX 200 plummeted 6.9% that year amid a trade war between the United States and China, the Banking Royal Commission, and a rough reporting season.  

No doubt, then, investors who entered 2019 particularly wary were surprised by the market’s recovery. The ASX 200 jumped a whopping 18.4% that year – likely putting a smile back on investors’ faces.

Of course, 2023 probably won’t shape up like 2019. While this year looks like it could be better for investors, key economists aren’t expecting a jaw-dropping recovery.

For starters, interest rates are tipped to grow further this year amid a continuing battle against inflation. Additionally, there are more questions than answers as to the end of the war in Ukraine.

But, it is likely some quality shares were dragged down in the ASX’s 2022 calamity. And I think some could be ripe to provide once-in-a-generation returns in the years to come.

Where I’ll be searching for stock market winners in 2023

Of course, not all stocks bruised by 2022 will prove to be future winners.

However, the disparity in ASX 200 sectors’ recent performances has likely provided a once-in-a-generation point to begin searching for diamonds in the rough.

For instance, while the market was buoyed by S&P/ASX 200 Energy Index (ASX: XEJ) stocks, many S&P/ASX 200 Real Estate Index (ASX: XRE) shares suffered. The real estate sector fell 24% over the year to 31 December.  

The S&P/ASX 200 Information Technology Index (ASX: XIJ) and the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) could also house future winners. They tumbled 34% and 23% respectively last year.

Though, it’s also possible that the market could continue sliding in 2023. Particularly, given predictions of global recessions and the potential for more unexpected and unfortunate happenings.

The post Why 2023’s stock market could offer me once-in-a-generation returns appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Monday
• Will 2023 bring gains for ASX 200 shares? Here’s what Citi is forecasting
• Mineral mania: 5 ASX 200 mining shares smashing new highs on Monday

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

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The Qantas Airways Limited (ASX: QAN) share price has been in fine form over the last 12 months.

Thanks to its strong rebound from the pandemic, as you can see below, the company’s shares have soared 25% since this time last year.

So, with Qantas on course to deliver an underlying profit before tax of between $1.35 billion and $1.45 billion for the first half of FY 2023, investors may now be wondering whether a dividend could be paid for the first time in three years.

Will Qantas shares pay a dividend in 2023?

Opinion is divided on whether there will be a Qantas dividend in 2023.

One of the most bullish brokers out there is Goldman Sachs. It currently has a conviction buy rating and $8.20 price target on Qantas shares.

Its analysts believe that the company will be in a position to pay a 10 cents per share dividend in FY 2023. Based on the latest Qantas share price of $6.35, this implies a modest 1.6% dividend yield for investors.

Though, it is worth noting that Goldman then expects Qantas to double its dividend to 20 cents per share the following year. This brings its dividend yield to a more attractive 3.2%.

Share buybacks ‘likely’

Over at Morgans, its bullish brokers have an add rating and $8.50 price target on Qantas’ shares.

However, they are not expecting Qantas to resume its dividend payments any time soon. In fact, the broker has no dividends pencilled in as far out as FY 2025. It appears to believe that share buybacks are more likely than dividend payments due to Qantas’ lack of franking credits. The broker said:

QAN is set to benefit from record earnings in FY23 and we expect further earnings growth through to FY25. During this period, we also forecast QAN to generate strong cashflow. This, along with QAN’s strong track record of maintaining balance sheet strength, leaves us with little doubt that QAN will have no issues funding its upcoming capex spend whilst continuing to return excess capital to shareholders. Given QAN has no franking credits, capital management will likely be in the form of on- market share buybacks going forward.

Time will tell which broker makes the right call. But either way, shareholders look set to benefit from Qantas’ return to form.

The post Will Qantas shares pay a dividend in 2023? appeared first on The Motley Fool Australia.

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More reading

• Qantas stock: Is it a good ASX 200 investment for 2023?
• Top brokers name 3 ASX shares to buy
• Top ASX shares to buy in January 2023
• The Qantas share price soared 20% in 2022. Can it maintain altitude in 2023?
• Can these 2 ASX 200 shares crush the market again 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 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 Brainchip Holdings Ltd (ASX: BRN) share price is under pressure on Tuesday.

In morning trade, the semiconductor company’s shares are down 6% to 69 cents.

As you can see below, this means the Brainchip share price is now down by a third over the last 12 months.

Why is the Brainchip share price falling?

Investors have been selling down the Brainchip share price today after the company effectively launched a capital raising.

Rather than raise capital the traditional way, Brainchip is able to raise funds via its agreement with US based alternative investment group called LDA Capital.

Essentially, when required, Brainchip will issue LDA Capital with a certain number of shares at a reasonable discount. The investment group then has the option to sell these shares on-market for a quick profit.

On this occasion, Brainchip has submitted a notice to LDA Capital to subscribe to 30 million shares, with an option to subscribe for an additional 10 million shares subject to approval.

How much is Brainchip raising?

At this stage it is unclear how much Brainchip will raise from the issue of the 30 million shares. That’s because the pricing of the shares will depend on the issue price and the pricing period. The latter is expected to be 11 January to late March or early April.

Though, based on the current share price, the 30 million Brainchip shares being issued have a market value of $20.7 million.

The company explained that the issue price will be 91.5% of the higher of the average daily volume weighted average price (VWAP) during the pricing period and the “minimum price” notified to LDA Capital by the company. It is unclear how the latter is calculated.

One thing that this raising of funds does have in common with a traditional capital raising, is that existing shareholders will be diluted given the discount that is being offered.

In addition, if LDA Capital doesn’t want to hold onto the shares, which appears to have previously been the case, there could be a fair bit of selling happening once the shares are issued, which could weigh on the Brainchip share price.

Why raise funds?

As of its most recent quarterly update, Brainchip is generating little by way of cash receipts and burning through its funds at a rapid rate. This means that additional funds will be required to keep the business operating.

In addition, management explained that it plans to use the funds to support its growth initiatives, including the taping out of another chip and growing its salesforce.

Brainchip CEO Sean Hehir said

Additionally, we will further expand our go-to-market capabilities by hiring sales personnel in key international markets, as well as increase our domestic sales and marketing headcount.

Time will tell if this leads to the company generating sales that justify its $1.2 billion market capitalisation.

The post Here’s why the Brainchip share price is sinking 6% today appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX 200 shares today
• ASX 200 tech shares are leading the market higher today
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today
• Will 2023 be a rewarding year to own Brainchip shares?

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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Income investors are likely aware ANZ Group Holdings Ltd (ASX: ANZ) shares have delivered the biggest dividend yield of the S&P/ASX 200 Index (ASX: XJO) big four banks for some time.

And its notable payout ratio could be set to grow.

Right now, shares in ANZ are trading for $23.72, leaving the stock with a 6.15% trailing dividend yield.

Coming in second best in terms of dividends among ASX 200 big four banks is Westpac Banking Corp (ASX: WBC). It offers a 5.35% trailing yield.

Looking ahead, however, one broker is tipping ANZ to grow its dividends by another 20%. Here are all the details.

Could ANZ shares really offer $1.76 of dividends in FY24?

ANZ shares could be a passive income buy, if Citi’s forecasts for dividends of the smallest big four bank are accurate.

The broker is tipping the bank to grow its dividends to $1.76 per share in financial year 2024, my Fool colleague James recently reported.

That’s up from $1.46 per share last financial year, consisting of a 72-cent interim dividend and a 74-cent final dividend.

If Citi’s forecast bears fruit, ANZ could boast a 7.4% dividend yield next year considering its current share price. Though, the broker is tipping the stock’s value to grow as well.

It has slapped ANZ shares with a buy rating and a $29.25 price target – a potential 23% upside. At this price, $1.76 of dividends per share would represent a 6% yield.

The broker likes the bank’s net interest margin (NIM), saying rising interest rates could lead to higher earnings.

However, Goldman Sachs isn’t nearly so bullish. It’s neutral on ANZ shares, tipping them to trade at $26.25 – representing a potential 11% upside.

It’s also forecasting ANZ’s dividends to reach $1.58 in the coming years.

That would see the banking share offering a 6.7% yield at its current price and a 6% yield at the broker’s forecasted price.

In a less positive note, Goldman Sachs tips earnings benefits born from rising NIMs to wane from financial year 2024, while costs aren’t expected to abate.

The post Can income investors bank on a 7% dividend yield from ANZ shares? appeared first on The Motley Fool Australia.

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More reading

• Can ASX bank shares deliver in 2023 after higher interest rates?
• Will 2023 get better for ASX 200 shares?
• ASX financial shares lifted the ASX 200 today
• ANZ shares were slaughtered in 2022. Does the new year bring fresh hope?
• 5 things to watch on the ASX 200 on Wednesday

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Westpac Banking. 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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When it comes to investing, you will often read that “past performance is no guarantee of future returns.” This is an important (and true) statement for investors to take into account when investing in ASX shares. Just because a share has risen strongly one year, doesn’t mean it will do the same the next year.

However, it can still pay to look at past events to see how they have impacted the performance of certain shares previously.

For example, over the last five years, BHP Group Ltd (ASX: BHP) shares have been on fire and generated an average total return of 17% per annum for investors. This would have turned a $1,000 investment in 2018 into approximately $2,200 today.

This market-beating return has been underpinned by strong commodity prices, which have driven the Big Australian’s shares higher and allowed it to pay big dividends to shareholders.

What sort of return could BHP shares generate in 2023?

It’s quite clear that for BHP shares to have a successful year, the mining giant needs commodity prices to be favourable.

The good news is that China’s reopening from COVID lockdowns and restrictions is expected to be supportive of demand for many commodities such as copper, iron ore, and oil. Particularly if it pour billions into stimulus programs to reignite its faltering economic growth.

In fact, copper has just hit a six-month high on the London Metal Exchange thanks to Chinese demand optimism. And while iron ore dipped yesterday, it was still fetching US$116.25 a tonne on the Singapore exchange. The latter is significantly higher than BHP’s WAIO unit cost guidance of US$18-19 per tonne.

In light of this, the mining giant appears well-positioned to generate bumper free cash flow again in FY 2023, which could bode well for BHP shares.

Potential returns

According to a note out of Macquarie, its analysts have an outperform rating and $50.00 price target on the company’s shares.

Based on the current BHP share price, this implies modest upside of 5.1% for investors in 2023.

However, that doesn’t include dividends. Macquarie is forecasting a fully franked $2.88 per share dividend this year. This equates to a 6% dividend yield, which brings the total potential return on offer with BHP shares to over 11%.

While this might not be as great a return as we have seen over the last five years, it would still turn a $1,000 investment into over $1,100. Which isn’t to be sniffed at in the current environment!

The post If I invest $1,000 in BHP shares now, what could my return be this year? appeared first on The Motley Fool Australia.

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More reading

• My top predictions for ASX 200 shares in 2023
• Why is the BHP share price having such a strong start to the week?
• How different is the Vanguard Australian Shares Index ETF (VAS) now compared to a year ago?
• Why are ASX 200 iron ore shares jumping higher today?
• How much profit are BHP shares going to make 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 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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Due to high inflation, rising interest rates, and the cost of living crisis, the economic outlook remains very uncertain. In light of this, it could be prudent for investors to seek ASX dividend shares that offer defensive characteristics and a solid track record of paying shareholders a rising passive income.

But how do you identify dividend shares to buy in the current environment? Listed below are three steps to find top ASX dividend shares to buy in 2023 and beyond.

Defensive characteristics

The first step to take is identifying dividend shares that have defensive characteristics. Doing so could mean that your portfolio has a greater chance of offering a rising passive income regardless of what happens in the economy.

This could mean searching for ASX dividend shares in the utilities and consumer staples sectors, where sales and profitability are less likely to be impacted by an economic slowdown than in other sectors.

A track record of dividend growth

Another step for investors to take is to look for companies that have a strong track record of growing their dividends. Particularly if they were able to maintain (or even grow) their dividends during previous periods of economic uncertainty. This is the sign of a strong and/or adaptable business model.

Investors can look at annual reports or online share trading platforms to check the track records of dividend payments for companies.

A positive outlook

A track record of growing dividend payments means nothing if the company’s longer-term outlook isn’t positive. Investors should keep their eyes open for disruption or signs that a company’s future is less certain than it was.

An example of this might have been Telstra Group Ltd (ASX: TLS) a decade or so ago when the NBN rollout began. While Telstra had been a defensive option for investors for some time, the goalposts were well and truly changed with the NBN rollout and its dividend payments were on a downward trajectory until recently.

Foolish Takeaway

Overall, if you follow these steps, I believe you could be better positioned to find ASX dividend shares that will provide you with a growing passive income long into the future.

The post 3 steps I’d take to find top ASX dividend shares to buy in 2023 and beyond appeared first on The Motley Fool Australia.

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More reading

• If I invest $1,000 in BHP shares now, what could my return be this year?
• Looking to sniff out ASX dividend opportunities? This share is forecast to pay a sweet 12% yield
• Brokers name 2 ASX dividend shares to buy now
• Want 17% upside plus dividend income? Broker says buy Wesfarmers shares
• Bought $1,000 of CSL shares 10 years ago? Here’s how much dividend income you’ve received

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.

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