Category: Stock Market

The Coles Group Ltd (ASX: COL) share price is on the move on Monday.

In morning trade, the supermarket giant’s shares are up 0.65% to $18.14.

Why is the Coles share price rising?

As well as getting a boost from improving investor sentiment, the Coles share price is rising today after it made an acquisition announcement.

According to the release, Coles has entered into a binding agreement to acquire two automated milk processing facilities from Saputo Dairy Australia (SDA) for approximately $105 million.

These processing facilities are located in Laverton North (VIC) and Erskine Park (NSW) close to Coles’ distribution centres. They each have the capacity to process around 225 million litres a year and are predominantly used to process Coles Own Brand 2L and 3L milk.

Why acquire these facilities?

Coles’ CEO, Steven Cain, believes that bringing these facilities in-house will protect its milk supply, complement existing investments, and open up growth opportunities. He commented:

These facilities are state-of-the-art, delivering exceptional production efficiency and quality through highly automated processes. Whilst improving security of our milk supply and our supply chain resilience in the dairy sector, these facilities also have sufficient capacity to facilitate further growth opportunities through new product innovation.

The acquisition will build on the strong relationships we have developed with our dairy farmers since launching our direct sourcing model in 2019. Around 90 dairy farmers supply milk direct to Coles, allowing these farmers to invest for the future and ensuring the long-term sustainability of their farms. These processing facilities will complement our existing investments in our Own and Exclusive brand portfolio and manufacturing capabilities in areas such as convenience meals and meat.

The acquisition will be funded from Coles’ existing debt facilities. Pleasingly, management expects the deal to exceed its investment return hurdles within three years.

Though, the acquisition of these sites remains subject to Australian Competition and Consumer Commission (ACCC) approval and other customary closing conditions. If all goes to plan, it is expected to be completed in first half of FY 2024.

The post Coles share price climbs following $100 million acquisition appeared first on The Motley Fool Australia.

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More reading

• ASX shares are paying out $19 billion in dividends this week. Are you getting a piece?
• Analysts say buy these growing ASX 200 dividend shares for passive income
• The record Coles dividend is being paid today. Here’s the lowdown
• Here are 2 ASX dividend shares that brokers rate as buys
• For $1,000 in monthly passive income, buy 18,462 shares of this ASX 200 stock

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

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The All Ordinaries (ASX: XAO), or All Ords ASX share, Best & Less Group Holdings Ltd (ASX: BST) could be one of the largest dividend yield payers in the coming years. By 2025, the grossed-up dividend yield might be 16%.

There are very few businesses that are expected to grow their dividend in the coming years to such a high level.

Sometimes ASX mining shares can pay very high yields when times are good like we’ve seen from BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) in the last few years.

But, with the fact that retailers do trade on a low price/earnings (P/E) ratio, it means that sometimes those dividend yields can become very high.

What does this ASX All Ords share do?

The business describes itself as a leading value apparel specialty retailer with an omnichannel sales network comprising 245 physical stores and an online platform.

Its aim is to be the “number one choice for mums and families buying baby and kids’ value apparel in Australia and New Zealand through its two trusted brands: Best & Less (in Australia) and Postie (in New Zealand).”

Dividend projection for Best & Less shares

Commsec numbers suggest that Best & Less is going to pay an annual dividend per share of 18.1 cents in FY23, which would equate to a grossed-up dividend yield of 12.6% at the current Best & Less share price.

In FY25, it’s projected to pay an annual dividend per share of 22.7 cents per share. This would be a grossed-up dividend yield of around 16%.

Why is the dividend yield so high? According to Commsec numbers, Best & Less is valued at under 9 times FY23’s estimated earnings and 6 times FY25’s estimated earnings.

Will it be able to grow earnings?

I think a key part of being a good ASX dividend share is growing earnings over time so that it’s more likely to be able to fund the current dividend and achieve dividend growth.

The All Ords ASX share is planning to accelerate its investment online, including a new customer data platform, a new mobile app and a consumer website. It’s also reviewing its core planning, merchandising and finance systems.

The business is working on a number of growth priorities:

Continued market share growth in baby, kids and womenswear, achieving above market online sales growth and enhancing the store network, underpinned by supply chain transformation.

It’s planning to open six new stores in the second half of FY23. This can help FY24 earnings and beyond as the stores mature.

The business is seeing a return to supply chain stability, which will hopefully help its inventory positioning.

Foolish takeaway

While there may be some volatility ahead, I think this retailer can do well in the coming years, particularly if more shoppers look for good-value clothing. This could then help the business fund those huge projected dividends.

The post This ASX All Ords share could pay a 16% dividend yield by 2025 appeared first on The Motley Fool Australia.

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More reading

• 3 ASX All Ordinaries shares I’m watching like a hawk in March

Motley Fool contributor Tristan Harrison has positions in Fortescue Metals Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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 Kogan.com Ltd (ASX: KGN) share price has fallen heavily over the past four weeks. It’s down 15% in a short amount of time.

But, it’s also down by around a third over the last year and it has sunk over 80% since October 2020.

It’s even down approximately 55% in the past five years.

What’s going wrong?

The company’s latest report, which was the half-year result for the six months to 31 December 2022, showed a 32.5% decrease in gross sales to $471.1 million. Kogan explained it was cycling against COVID-19-related lockdown orders, and that it was seeing subdued sales for the company.

Gross profit decreased by 41.8% to $62.9 million. The e-commerce ASX share said that the period was impacted by the “substantial right-sizing of inventory involving unprecedented discounting.”

However, Kogan did note that operational costs reduced after this reduction of inventory.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was negative $4.4 million, while actual EBITDA was a loss of $23 million. Losses at the EBITDA level haven’t been good news for the Kogan share price.

The adjusted net loss after tax was $9.6 million, while the statutory net loss after tax was $23.8 million.

But, just to provide a bit more detail, the New Zealand business called Mighty Ape managed to achieve adjusted EBITDA of $6.8 million, while the adjusted net profit was $4.1 million.

But, there was some positive growth – Kogan First saw subscribers rise by 47.6% to 404,000 and Kogan First revenue went up by 83.1% to $10.8 million.

It also revealed that it bought luxury furniture retailer Brosa out of administration for $1.5 million, which comes with 500,000 Brosa subscribers.

Is the Kogan share price a buy?

It’s a tricky question because the business has seen a complete collapse in profitability from pre-COVID and early COVID times.

Kogan said that it made a monthly adjusted EBITDA profit for the first in January 2023 since July 2022.

Now Kogan just needs to put a number of monthly profits together and then the business will have made a profit for a half-year period, which would be very positive for regaining investor confidence.

I think Kogan showed in pre-COVID times that it could make a profit on a much smaller base than the numbers it was producing in FY21 and FY22.

With the inventory (finally?) right sized, the business can focus on making profitable sales.

According to Commsec, the current Kogan share price is valued at 37 times FY25’s estimated earnings, which is based on potential earnings per share (EPS) of 10 cents.

So, a full recovery of normalised profit isn’t expected for a while, but a return to making a statutory net profit would be a good first step in FY24.

I think more shoppers will buy things online over time, so I do think Kogan has a positive future. But I also think it’s important not to anchor to the past Kogan share price heights or profit expecting that it’ll get back there quickly. I’d call the Kogan share price a buy at under $4.

The post Down 15% in 4 weeks: Is now the time to buy Kogan shares? appeared first on The Motley Fool Australia.

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More reading

• Why Atlas Arteria, Kingsgate, Kogan, and Synlait Milk shares are dropping 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 positions in and has recommended Kogan.com. The Motley Fool Australia has positions in and has recommended Kogan.com. 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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There are a number of different ways to value whether a business is a cheap ASX share. I think that using a company’s projected profit is one of the easiest ways, as well as its price/earnings (P/E) ratio which compares the share price to the earnings.

However, profit may not be a perfect tool to measure businesses. Certainly, it’s possible to massage profit to make it look better than it really is.

For example, businesses could capitalise and depreciate their research and development costs, spreading the costs, in accounting terms, over a number of years, rather than accounting for them all in the first year. This can boost how good profit looks in the short term.

Indeed, it’s worth knowing what a tech company’s policy with this is because different companies take different approaches.

Businesses can also decide to not pay for any marketing in the last month of the year, boosting profits. But that could be bad for long-term performance.

Keeping that warning in mind, there are some smaller ASX shares that seem so cheap that they could be good investments.

Dusk Group Ltd (ASX: DSK)

Dusk is an ASX retail share with a market capitalisation of $97 million, according to the ASX.

It sells a variety of home fragrance products including candles, ultrasonic diffusers, reed diffusers, essential oils, and fragrance-related homewares.

First, let’s point out that the business had no debt and $32.9 million net cash at the end of the FY23 first half. That cash makes the company’s P/E ratio look even cheaper, and can enable attractive shareholder payments like dividends and share buybacks.

It is projected to pay very large dividends according to Commsec. Dusk could pay a grossed-up dividend yield of 12.8% in FY23 and 16.5% in FY25.

The cheap ASX share is expecting to keep adding new stores to its store network. This boosts its potential customer reach and, hopefully, scale and overall profitability.

According to current Commsec estimates, it’s valued at 8x FY23’s estimated earnings and 6x FY25’s estimated earnings.

While it may not be the highest-quality business in the world, I think its cash pile, high dividend yield, and low valuation make it an appealing idea in this uncertain time for retail.

Aeris Resources Ltd (ASX: AIS)

I think Aeris is one of the most compelling smaller ASX mining shares around.

It’s known as a copper miner, with operational projects and a promising growth portfolio.

I think copper has a good future considering the amount of electrification that is likely to happen in the coming years with electricity grids around the world, electric vehicles, batteries, renewable energy generation, and so on.

Copper prices don’t need to soar for this cheap ASX share to do well, in my opinion.

As projects come online, profitability is expected to increase as development costs end and mine cash flow starts being produced.

By FY25, the business is projected to be producing 17.3 cents of earnings per share (EPS). This puts the current Aeris Resources share price at just 4x the FY25 estimated earnings.

If Aeris were to pay a dividend with a payout ratio of just 50%, that would be a dividend yield of 12.9%, and 18.4% grossed-up if those dividends were fully franked. Later this decade, I think this business could be an attractive dividend payer.

The post I believe these 2 beaten-up ASX shares are too cheap to ignore in April appeared first on The Motley Fool Australia.

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More reading

• Leading brokers name 3 ASX shares to buy today
• Why Aeris, Block, Fineos, and Tyro shares are racing higher
• Dividend yields over 10%! Cheap ASX shares I’d buy for passive income
• Here’s one hot, one lukewarm and one cold ASX share: fundie
• 3 top ASX mining shares I’d buy right now

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Dusk 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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The Zip Co Ltd (ASX: ZIP) share price significantly outperformed the S&P/ASX 200 Index (ASX: XJO) in March 2023.

The buy now, pay later (BNPL) business climbed by around 10% while the ASX 200 fell by around 1%. It’s been rare for Zip to have such a positive month compared to the ASX.

But, there’s a very good reason for the company’s outperformance.

Cash flow breakeven?

Zip announced at the end of March 2023 that it had signed agreements to divest its businesses in South Africa (Payflex) and central and eastern Europe (Twisto). The BNPL business also said that it’s winding down its business in the Middle East.

The ASX share said that it expects aggregate net cash inflows of approximately $20 million to be received in the FY23 second half as a result of these moves.

Zip noted that cash earnings before tax, depreciation and amortisation (EBTDA) for its Europe, Middle East and African (EMEA) businesses was negative $10.2 million in the first half of FY23. As a result of the announced transactions and decisions, on completion of the moves by Zip, it will have “successfully delivered on its objective of neutralising cash burn from its rest of the world (RoW) footprint by the end of this financial year.”

In that announcement, the company said that it continues to progress other activities in line with its strategic priorities. It also said that this demonstrated its focus on the core businesses of the US, and Australia and New Zealand.

Zip noted that the expected cash inflows will “contribute directly to the group’s available cash and liquidity and Zip remains confident that it has sufficient available cash and liquidity to deliver on positive group cash EBTDA during H1 FY24.”

Is this good news?

The market definitely seemed to like it, with the Zip share price rising.

One of the biggest issues that Zip faced before this announcement is that it wasn’t cash flow breakeven, yet it had to grow to have enough scale to potentially be breakeven. Spending on growth activities uses cash.

On top of that, the environment has changed for BNPL. Interest rates have shot higher, which is problematic because interest is one of the main expenses for Zip. There is also increasing talk about regulators introducing regulation.

The business may be on track for breakeven, though there’s more to its future success than just that. With the business walking away from a number of markets, it’s now betting more on the US being able to provide a lot of the growth that it’s looking for.

The recent FY23 half-year result showed that US revenue was up 6% to $152.5 million, while ANZ revenue was up 23%. But, the rest of the world revenue had increased 374% to $18 million.

Zip share price snapshot

Since the start of 2023, Zip shares are flat compared to the start of the year.

The post Why did the Zip share price zoom higher in March? appeared first on The Motley Fool Australia.

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More reading

• These are the 10 most shorted ASX shares this week
• Why Appen, Regis Resources, Syrah, and Zip shares are charging higher today
• Zip share price leaps 14% on $20 million windfall
• Zip share price dips amid Apple’s BNPL US launch
• Here are the 10 most shorted ASX shares this week

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 positions in and has recommended Zip Co. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It can be useful for investors to keep an eye on which ASX 200 shares have experienced meaningful insider buying.

This is because insider buying is often regarded as a bullish indicator, as few people know a company and its intrinsic value better than its own directors. If they are buying, it suggests that they are confident in the direction the company is heading.

With that in mind, listed below are a couple of ASX 200 mining shares that reported meaningful insider buying last week. They are as follows:

BHP Group Ltd (ASX: BHP)

According to a change of director’s interest notice, one of the Big Australian’s non-executive directors has been topping up their shareholding.

The release notes that Gary Goldberg bought 1,000 BHP American depositary shares (ADS) through an on-market trade on 29 March. This is the equivalent of 2,000 ASX listed BHP shares.

Goldberg paid an average of US$58.3719 per ADS, which equates to a total consideration of US$58,371.90 or A$87,515.50.

This increased the non-executive director’s holding to 8,000 ADS, representing 16,000 ordinary BHP shares.

Fortescue Metals Group Ltd (ASX: FMG)

Another change of director’s interest notice reveals that a director of this ASX 200 iron ore giant has been buying its shares.

According to the note, Fortescue’s non-executive director, Jennifer Morris OAM, picked up 652 shares through an on-market trade last week on 29 March.

Ms Morris paid a total of $14,697.75 for the parcel of shares. This equates to an average of $22.54 per Fortescue share, which is broadly in line with where they trade today.

This latest purchase increased the director’s holding to a total of 21,176 Fortescue shares.

The post 2 ASX 200 mining directors buying up their company shares in the past week appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Why did the BHP share price see-saw in March?
• Bought $9,000 of Fortescue shares in 2018? Here’s how much passive income you’ve pocketed
• Why did the BHP share price have such a top run today?
• ASX shares are paying out $19 billion in dividends this week. Are you getting a piece?

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 last five years have brought turbulent times for the Flight Centre Travel Group Ltd (ASX: FLT) share price. The stock soared to an all-time high in mid-2018 before plummeting amid the onset of the COVID-19 pandemic.

Indeed, a $13,000 investment in Flight Centre five years ago would have seen an investor with 253 shares, having paid $51.30 apiece.

Those stocks would currently be worth around $4,675.44. The Flight Centre share price last traded at $18.48 – 64% lower than it was at this point in 2018.

For comparison, the S&P/ASX 200 Index (ASX: XJO) has risen 24% in that time.

Fortunately, Flight Centre’s dividends might have stifled some of the pain born from its share price’s tumble. Let’s take a look.

All dividends paid to those holding Flight Centre shares

Let’s dive into all the dividends handed to those invested in Flight Centre shares since 2018:

Flight Centre dividends’ pay date	Type	Dividend amount
October 2019	Final	98 cents
April 2019	Interim	60 cents
April 2019	Special	$1.49
October 2018	Final	$1.07
April 2018	Interim	60 cents
Total:		$4.74

That’s right, the company hasn’t paid a dividend since 2019. And for good reason.

It hasn’t turned a profit since the first half of financial year 2020 – for which it initially declared but later revoked a 40-cent dividend.

Thus, the ASX 200 travel stock has paid just $4.74 per share in dividends over the last five years – meaning our figurative parcel has yielded around $1,199.22 of passive income over its life.

Though, on a more positive note, each of those payouts was fully franked. That means they might have brought additional benefits for some investors come tax time.

And the future appears brighter for Flight Centre.

The company’s leisure and corporate businesses both reached profitability in all geographic segments aside from Asia last half. Meanwhile, many analysts forecast the travel giant will return to dividend in financial year 2024 or financial year 2025.

The post Invested $13,000 in Flight Centre shares 5 years ago? Here’s how much dividend income you’ve earned appeared first on The Motley Fool Australia.

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More reading

• These are the 10 most shorted ASX shares this week
• Are short sellers wrong about Flight Centre shares?
• Here are the 10 most shorted ASX shares this week
• Rising Flight Centre share price delivers 25% gains to SPP investors in a week
• 2 ASX 200 shares to buy for ‘excellent value’: fund manager

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

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At the start of each week, I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Flight Centre Travel Group Ltd (ASX: FLT) remains the most shorted ASX share after its short interest rose to 11.7%. Revenue margin headwinds could be the reason for this.
• Core Lithium Ltd (ASX: CXO) has short interest of 10%, which is flat week on week. Concerns over falling lithium prices has been behind this. Though, M&A activity in the industry is likely to be making short sellers nervous.
• Zip Co Ltd (ASX: ZIP) has short interest of 9.9%, which is down marginally week on week. This is despite the buy now pay later provider reiterating its profit targets last week.
• Liontown Resources Ltd (ASX: LTR) has short interest of 9.1%, which is up week on week. Short sellers may be regretting this one. Last week a takeover approach sent this lithium share rocketing higher.
• Megaport Ltd (ASX: MP1) has seen its short interest ease to 9.1%. Softening growth and the exit of its CEO and CFO last month seem to have caused concerns.
• Sayona Mining Ltd (ASX: SYA) has 8.5% of its shares held short, which is down week on week. Short sellers may also have some regrets with this lithium share after it recorded a strong gain last week.
• JB Hi-Fi Limited (ASX: JBH) has seen its short interest rise to 7.9%. Short sellers appear to believe that the cost of living crisis could impact consumer spending on household goods.
• Temple & Webster Group Ltd (ASX: TPW) has entered the top ten after its short interest jumped to 7.3%. This may be due to concerns that this online furniture retailer could be struggling in the current environment.
• Pointsbet Holdings Ltd (ASX: PBH) has short interest of 7.2%, which is up week on week. Competition and cash burn concerns may be why short sellers are targeting this sport betting company.
• Brainchip Holdings Ltd (ASX: BRN) has seen its short interest ease slightly to 7.2%. This is likely to be down to this semiconductor company’s ridiculous valuation on less revenue than a Sydney CBD café. It also faces competition from huge players that could easily acquire Brainchip if they thought it was a threat.

The post These are the 10 most shorted ASX shares this week appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy next week
• These ASX 200 lithium shares could be takeover targets: Morgans
• These were the best performing ASX 200 shares in March
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Which ASX 200 lithium share has been a 10-bagger in two years?

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 Megaport, PointsBet, Temple & Webster Group, and Zip Co. The Motley Fool Australia has recommended Flight Centre Travel Group, Jb Hi-Fi, Megaport, PointsBet, 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.

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The S&P/ASX 200 Index (ASX: XJO) dividend shares that I’m about to reveal could be two of the most underrated ideas for passive income for many years ahead.

The dividend income that many ASX bank shares and mining shares pay has been impressive over the past decade.

However, I think it’s useful to have diversification at the very least.

Over the long-term, I think there are a number of names that could be better dividend payers – whether that’s with more growth, possibly better reliability, or however else we want to judge a passive income-paying business.

With that in mind, I think the following two names are worth a spot in a dividend-focused portfolio.

Collins Foods Ltd (ASX: CKF)

Collins Foods is a fast food business that has a goal of being the “world’s top restaurant operator”. At this stage, it operates KFC outlets in Australia and Europe, and also has a small but growing network of Taco Bell restaurants in Australia. It currently has around 15,000 KFC and Taco Bell employees.

According to Collins Foods, it has 270 KFCs in Australia, 16 KFCs in Germany, 48 KFCs in the Netherlands, and 26 Taco Bells in Australia.

I believe it’s possible that fast food businesses can provide defensive earnings during a recession, perhaps even growth, as people look to fast food as a treat during a downturn, perhaps as a cheaper alternative to other dining options.

Collins Foods has dropped 17% from 28 November 2022, making it considerably cheaper than it was before. It has grown its dividend each year since 2014, making it one of the most consistent ASX 200 dividend shares around.

While underlying net profit after tax (NPAT) fell in its most recent result, I don’t think the challenging environment with food inflation will continue forever. The business continues to grow its store numbers and same-store sales grew in both Australia and Europe in the first six months of the second half of FY23.

Commsec numbers suggest the business could pay a grossed-up dividend yield of 4.8%, with a 3.7% increase projected for passive income in FY23 to 28 cents per share.

Charter Hall Long WALE REIT (ASX: CLW)

This is an Australian real estate investment trust (REIT). It aims to invest in “high quality Australasian real estate assets that are predominately leased to corporate and government tenants on long-term leases”. The current weighted average lease expiry (WALE) is around 12 years.

It’s invested in a number of different sectors including office, industrial, logistics, retail, and social infrastructure.

Some of its tenants include the Australian government, Telstra Group Ltd (ASX: TLS), BP, and Endeavour Group Ltd (ASX: EDV).

Higher interest rates can have a negative impact on REITs with both a higher interest cost and an impact on property values. Charter Hall Long WALE REIT isn’t experiencing large hits to its valuations (yet). But, the ASX 200 has already fallen 22% over the last 12 months, which I think is a fair reflection of how much lower it should be priced in this environment.

But, with the strong inflation, some of the rental income is getting a boost because the growth rate is linked to inflation. That could be helpful for the passive income from the ASX 200 dividend share.

The REIT has guided that it’s going to pay a distribution of 28 cents per unit for FY23, which is a distribution yield of 6.7%.

The post 2 leading ASX 200 dividend shares I’d buy for long-term passive income appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Thursday
• Analysts say buy these high yield ASX dividend shares for a passive income
• Want passive income? Analysts say you can get 6%+ yields with these ASX dividend shares
• I think retirees will love these 2 ASX 200 dividend shares for passive income
• Investing as little as $25 a week could help me retire with $104,000 a year in passive income!

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 positions in and has recommended Collins Foods. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Collins Foods. 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 Telstra Group Ltd (ASX: TLS) share price managed to beat the return of the S&P/ASX 200 Index (ASX: XJO) in March 2023, despite the telco going ex-dividend during the month.

During March, Telstra shares climbed by 1.4% while the ASX 200 dropped by 1.1%. An outperformance of 2.5% in just one month is solid outperformance for an ASX blue-chip share.

Telstra shares went ex-dividend

Telstra started the month’s performance at a disadvantage after going ex-dividend on 1 March 2023.

That means investors who buy shares on that date (and from then on) are not entitled to the upcoming dividend.

Telstra’s half-year dividend was 8.5 cents per share, which represented an increase of 6.25%. Grossed-up for franking credits, the total payment was around 12 cents per share. So, it was perhaps not a surprise that the Telstra share price dropped by 12 cents on the ex-dividend date of 1 March.

But, from that date, Telstra shares climbed by around 4.5% to the end of the month.

What went wrong for the ASX 200?

The ASX 200 didn’t drop by much. Certainly, 1.1% is not like some of the declines we saw in 2020 and 2022.

But, last month we saw a lot of pain for the global banking sector after difficulties for Silicon Valley Bank (SVB) and Credit Suisse.

While the ASX bank sector aims to be ‘unquestionably strong’, investors still went negative on banking shares in Australia. In turn, the performance of the banking sector had a significant influence on the negative direction of the ASX 200.

Over the month, the Commonwealth Bank of Australia (ASX: CBA) share price fell 2.3%, the National Australia Bank Ltd (ASX: NAB) share price declined 7.6%, the ANZ Group Holdings Ltd (ASX: ANZ) share price declined 7%, and the Westpac Banking Corp (ASX: WBC) share price dropped 3.9%.

Together, those bank movements caused a negative hit for the ASX 200.

Did anything important happen for Telstra shares?

Reporting season was in February 2023, so it wasn’t as though investors were reacting to the Telstra result during March.

But, the result did show a number of pleasing things, including a 6.4% rise in total income to $11.6 billion and a 27.1% rise in earnings per share (EPS) to 7.5 cents.

The company also said it’s making progress on its T25 strategy with the business focusing on a number of things, including improving the customer experience, having a strong 5G network, growing margins, and increasing the dividend.

Interestingly, we did see that Telstra director Ming Long decided to buy some Telstra shares on the market, buying a total of 25,589 for a cost of $105,123.39. That’s an average price of around $4.11.

Coincidence or not, the Telstra share price steadily climbed over the rest of the month after news of the director’s investment. Investors may have gained confidence from the director deciding it was a good time to buy.

The post Why did the Telstra share price beat the ASX 200 in March? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Monday
• For $400 in monthly passive income, buy 28,236 shares of this ASX 200 stock
• These were the best performing ASX 200 shares in March
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Friday

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Group. 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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