Category: Stock Market

The City Chic Collective Ltd (ASX: CCX) share price is having a day to forget.

In morning trade, the plus sized fashion retailer’s shares are down 24% to a 52-week low of $1.05.

Why is the City Chic share price crashing?

Investors have been hitting the sell button in a hurry this morning after the retailer released a trading update at its annual general meeting.

According to the release, City Chic’s revenue is down 2% financial year to date to $128.6 million. While ANZ sales are up 10%, this has been offset by a worrying decline in Americas sales. The latter segment posted a 12% decline in revenue despite the significant weakness in the Australian dollar over the last 12 months.

Management commented:

Demand has been volatile, and the consumer is looking for promotion as a reason to buy. The competitive landscape, especially in the Northern Hemisphere, has intensified as all businesses promote aggressively to capture the limited dollars she is prepared to spend.

At a regional level there have been very contrasting results. The Southern Hemisphere, with stores open has shown growth and the Northern Hemisphere, which is facing much greater economic pressures, delivered a decline in revenue.

What else?

Another area of concern that could be weighing on the City Chic share price is the company’s inventory position.

Management expects its inventory to be in the range of $168 million to $174 million at the end of the first half. As a comparison, City Chic currently has a market capitalisation of just over $250 million. This appears to indicate that investors have major doubts that the company will be able to successfully shift these items.

Another negative from today’s update was management’s commentary on margins. While no details were provided on its profits, its margin commentary appears to indicate that City Chic’s earnings could be down sharply during the first half. It said:

The real issue for us to deal with in FY2023 is temporary margin compression driven by competition for reduced demand, together with transitory logistics costs in the Northern Hemisphere.

Given this bleak outlook, you may not be surprised to learn that the City Chic share price is now down over 80% since the start of the year.

The post What is driving the City Chic share price 21% lower on Friday? appeared first on The Motley Fool Australia.

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More reading

• 3 reasons this fundie is still bullish on ASX mining shares
• Is Amazon stock really a cheap buy? Here’s what the charts say
• If I’d bought $5,000 of Core Lithium shares at the start of this financial year, guess how much I’d have now?
• 8%+ dividend yields! 3 ASX 200 shares I’d snap up to beat inflation
• Don’t miss out on these top ASX dividend shares: analysts

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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One fund manager believes ASX mining shares could see the demand for their output soar in the near future.

In a Livewire article, VanEck portfolio manager Cameron McCormack suggested China’s projected reopening and its pivot away from harsh zero-COVID policies would be the main value drivers for Australian commodity exporters.

So let’s peel back the layers of McCormack’s thesis to uncover the three ways he expects this change in China to benefit ASX mining shares.

China’s infrastructure spending is poised to return

It’s anticipated that China will have a renewed focus on spurring economic growth after relaxing its strict measures to eliminate COVID-19.

This could be accomplished through a strong return to infrastructure spending in the country, McCormack said.

Framing this is that Chinese President Xi Jinping made comments in April that an “all-out” focus must be made to increase construction projects in the country, per Bloomberg.

McCormack notes that China made a similar play that kept its economy moving near the end of the global financial crisis in 2009.

A surge in Chinese infrastructure spending was also described as being the “saviour” of Australia’s economy that stopped it from slipping into a recession during this time, with Australian commodity producers being the main beneficiaries due to soaring export prices.

China remains reliant on Australian mining resources

Despite a growing geopolitical rivalry between the countries, Australia and China remain tethered by trade due to a mutual reliance on each other’s imports and exports.

McCormack notes that “19% of Australian mining revenue is attributed to China”.

Iron ore comprises an overwhelming majority of that 19%, which will be vital to sustaining a renewed construction boom in China. Lloyd’s List noted last year that “China accounts for more than 70% of global iron ore trade and two-thirds of its imports [of iron ore] currently come from Australia”.

McCormack then used a graph provided by Factset showing that some ASX mining shares have far greater exposure to the Chinese market than others.

In order, Fortescue Metals Group Limited (ASX: FMG) sourced most of its revenues from China, with sales to the country making around an 87 per cent contribution to its top line. This was then followed by BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO).

Valuations of ASX mining shares improve

McCormack underlined his thesis by noting that Australian mining shares are trading at record lows, relative to their forward cash flow projections.

This may provide investors with an entry point to scoop them up while they’re still cheap.

McCormack said:

The recent downturn in global markets and economic weakness in China has improved the valuation profile of Australian resources. Price to 12-month forward cash flow is at a historic low and iron ore prices have dropped to 2018 levels.

The post 3 reasons this fundie is still bullish on ASX mining shares appeared first on The Motley Fool Australia.

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More reading

• The Rio Tinto share price is trading at a ‘compelling’ level: broker
• BHP share price has ‘no upside’: Goldman Sachs
• ‘Rare opportunity’: Expert explains why he just added this ASX 200 share
• 5 things to watch on the ASX 200 on Friday
• Is Macquarie still recommending Pilbara Minerals shares as a buy?

Motley Fool contributor Matthew Farley 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Amazon (NASDAQ: AMZN) is one of the best-performing stocks of the past generation, but 2022 has mostly been a disaster for the tech giant. The stock is down 47% year to date, revenue growth has slowed to all-time lows, it’s closed dozens of warehouses after overestimating demand, shuttered once-promising projects like Amazon Care, and just reported that it’s laying off 10,000 corporate employees.

While it’s clear Amazon has struggled this year, those challenges seem well-reflected in Amazon’s stock price. Plenty of investors seem to think the stock could be a bargain right now, but is it really cheap? Let’s investigate.

How to value Amazon

Amazon isn’t an easy company to value. It’s a combination of several businesses, including direct online retail, third-party e-commerce, advertising, cloud infrastructure, hardware and devices, a supermarket chain, and its Prime membership program that ties many of those segments together.

The stock has long traded at a high price-to-earnings valuation because investors have assumed it could be more profitable if it stopped investing so aggressively in future growth. Amazon’s international business, for example, has historically been unprofitable, but that’s because the company is investing in emerging growth markets like India. Its mature international markets, like the U.K. and Japan, are profitable.  

Since Amazon’s earnings are volatile and not entirely reflective of the business’s strength, valuing the business based on its price-to-sales (P/S) ratio may make more sense.           

AMZN PS Ratio data by YCharts. PS = price to sales.

As you can see from the chart above, Amazon is as cheap as it’s been since 2015. Before then, the P/S ratio mostly ranged between 1.5 and three. But there’s a reason it began to surge that year. That was when Amazon reported Amazon Web Services (AWS) as a separate business segment.

Investors bid Amazon stock higher in response, recognizing the potential of the cloud infrastructure. The stock more than doubled that year and nearly quadrupled over the following three years.

AMZN data by YCharts.

Since the first time it was reported as a separate business segment, AWS has grown from $1.56 billion in quarterly revenue with a 17% operating margin in Q1 2015 to $20.5 billion in revenue with an operating margin of 26.3%.

The sum of the parts

Since Amazon is primarily made up of an e-commerce business with high revenue and thin margins and a cloud infrastructure business with less revenue but wide margins, separately valuing the two businesses may make the most sense.

AWS is on track to bring in $80 billion in revenue and $23 billion in operating income this year, and sales grew 27% in its most recent quarter. AWS doesn’t have pure-play peers, so there’s no precise way to value it. Still, with that kind of growth rate and evident competitive advantages, a multiple of at least 30 times operating income, if not closer to 50, seems appropriate. That would value AWS between $690 billion and $1.15 billion.

Another way to value AWS is based on the P/S ratio. Cloud software stocks with similar top-line growth rates tend to trade at P/S multiples in the high single digits. At a P/S ratio between five and 10, AWS would be worth between $400 billion and $800 billion.

Now, let’s look at Amazon’s e-commerce business, which we can compare to other e-commerce companies. Since these businesses can vary from direct sales to third-party marketplaces to hybrids like Amazon, it’s best to look at the gross merchandise volume (GMV), or total value of goods sold on the platform. The chart below shows how a few e-commerce stocks trade as a multiple of GMV for 2021.

Company	Market Cap	2021 GMV	Price/GMV
Etsy	$14.3 billion	$13.5 billion	1.06
Wayfair	$3.6 billion	$13.7 billion	0.26
Chewy	$17.3 billion	$8.9 billion	1.94
Farfetch	3.1 billion	$4.2 billion	0.74

Data source: Yahoo! Finance and company filings. GMV = gross market value.

There’s a fairly wide range among Amazon’s e-commerce peers, and investors should keep in mind that e-commerce valuations are down right now since growth in the sector has slowed. Amazon doesn’t report GMV, but Statista estimates it at $610 billion.

Considering that Amazon’s e-commerce segment includes advertising, which is on track to bring in close to $40 billion in high-margin revenue this year, a price-to-GMV ratio of one (similar to Etsy) seems fair. That would value the e-commerce business at $610 billion. Or to be more conservative, we could measure this business based on a P/S multiple of one. That would give it a valuation of $400 billion since the e-commerce business is expected to bring in roughly $400 billion in revenue this year.

Is Amazon stock a good buy?

Based on the numbers above, Amazon’s fair valuation is anywhere from $800 billion to $1.76 trillion. (For comparison, Amazon’s current market capitalization is around $1 trillion.) Additionally, Amazon’s valuation multiples are likely to expand if its growth rate improves or its e-commerce business returns to profitability.      

The good news for investors is that most of Amazon’s challenges are temporary. Macro headwinds will eventually dissipate, e-commerce growth will resume, and the company will likely improve its cost structure. While a comeback in the stock may not be immediate, the shares look well-priced, and Amazon still has plenty of opportunity ahead to ramp up profit.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Is Amazon stock really a cheap buy? Here’s what the charts say appeared first on The Motley Fool Australia.

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More reading

• Amazon stock is still a surefire buy despite growth plateau
• Why Amazon stock fell today
• BrainChip share price dips despite ex-Amazon hire
• Does Amazon’s latest healthcare move make the stock a buy?
• Why Amazon stock fell today

Jeremy Bowman has positions in Amazon and Etsy. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Core Lithium Ltd (ASX: CXO) shares kicked off the new financial year (1 July) trading for 94 cents apiece.

In early morning trade today, shares in the S&P/ASX 200 Index (ASX: XJO) lithium stock are swapping hands for $1.42 apiece.

The company doesn’t, as yet, pay any dividends as it works towards first lithium production.

Meaning if I’d bought $5,000 of Core Lithium shares at the start of FY23 I’d be sitting on $7,553 and change today.

A handy $2,553 in less than five months.

That’s a heck of a lot better than the slightly improved interest I’ve been earning from my cash deposit account. Though investing in shares does come with significantly more risk, as shares can certainly post losses as well as gains.

So, how have Core Lithium shares managed to march 51% higher with more than half the new financial year yet to go?

What’s driving ASX 200 investor interest in the lithium stock?

Core Lithium has been a major beneficiary of soaring demand for lithium.

Prices for lithium carbonate have more than doubled over the calendar year as EV makers scramble to secure supplies of the lightweight, conductive metal, a critical component in the batteries that power their vehicles.

Investors have been snapping up Core Lithium shares with an eye on the company’s Finniss Project, located near port of Darwin in the Northern Territory. That project is expected to deliver its first lithium production within the coming months.

The Australian federal government has already awarded Finnis with Major Project Status. And, according to Core Lithium, Finnis is one of the most capital efficient lithium projects and the most advanced lithium project on the ASX.

How have Core Lithium shares been tracking longer-term?

We know investors who bought Core Lithium shares on the first day of the new financial year are sitting on gains of 51% today.

But investors with telescopic foresight who bought shares five years ago will have bagged a gain of… wait for it…1,186%.

The post If I’d bought $5,000 of Core Lithium shares at the start of this financial year, guess how much I’d have now? appeared first on The Motley Fool Australia.

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More reading

• Three comforting lessons for investors whose portfolio has been smashed versus the surprisingly good return of the ASX 200
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• What $10,000 in ASX lithium shares a year ago would be worth today
• Why Core Lithium, Invictus Energy, New Hope, and Smartgroup shares are sinking
• Why is the Core Lithium share price getting crushed on Thursday?

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

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Many of Australia’s largest companies are members of the S&P/ASX 200 Index (ASX: XJO) index. Some of these blue-chip shares have large dividend yields right now.

Here are three ASX 200 shares with yields north of 8% that I would consider buying for my portfolio if I had spare money to invest and wanted to beat inflation.

Harvey Norman Holdings Limited (ASX: HVN)

The first high-yielding ASX 200 share to consider is Harvey Norman. Due to concerns over rising living costs and the housing market downturn, this retail giant’s shares have taken a tumble in 2022 and are down 17% year to date.

While this is disappointing, it has made the dividend yield on offer with its shares very attractive now. According to a note from Goldman Sachs, its analysts expect a fully franked 37.6 cents per share dividend in FY 2023. This represents an 8.9% dividend yield.

Goldman also sees a decent upside for its shares with its buy rating and $4.80 price target. It highlights that Harvey Norman’s exposure to older consumers and regional markets gives it some protection from online competition.

New Hope Corporation Limited (ASX: NHC)

With coal prices continuing to trade at sky-high levels, this ASX 200 coal miner could be a great option for income investors right now.

You only need to look at its first quarter update from this week to see just how much the company is benefiting from these high prices. For the three months, New Hope reported a 167% increase in underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) to $648.1 million. For reference, it reported EBITDA of $293.1 million for the whole of FY 2021.

And while coal prices will inevitably come back down to earth and put pressure on its dividend payments, New Hope remains confident that this is still some way off. At its annual general meeting, the company’s CEO, Robert Bishop, stated: “Looking ahead, we expect that coal prices will remain well above historical averages, as uncertainty remains about security of global energy supply.”

A note out of Morgans reveals that its analysts believe New Hope is on course to pay a $1.20 per share fully franked dividend in FY 2023. This equates to a massive 22% yield for investors. The broker has an add rating and $7.00 price target on its shares.

For the same reasons, I would consider rival coal miner Whitehaven Coal Ltd (ASX: WHC), which Morgans is forecasting to pay a fully franked $1.20 per share dividend in FY 2023. This represents a 14.5% dividend yield at current prices. Morgans has an add rating and $11.50 price target on its shares.

The post 8%+ dividend yields! 3 ASX 200 shares I’d snap up to beat inflation appeared first on The Motley Fool Australia.

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More reading

• Three comforting lessons for investors whose portfolio has been smashed versus the surprisingly good return of the ASX 200
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Why is the New Hope share price tumbling 8% on Thursday?
• Why Core Lithium, Invictus Energy, New Hope, and Smartgroup shares are sinking
• The CEO just sold 900,000 of his Whitehaven shares. What’s going on?

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 Harvey Norman Holdings Ltd. The Motley Fool Australia has positions in and has recommended Harvey Norman Holdings Ltd. 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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Looking for dividend shares to buy? Listed below are two ASX dividend shares that analysts rate as buys.

Here’s why they are bullish on these dividend shares:

Elders Ltd (ASX: ELD)

The first ASX dividend share that has been rated as a buy is Elders. It is a leading agribusiness company offering a range of services to rural and regional customers across the ANZ region.

Goldman Sachs is very positive on the company and believes recent weakness since its full year results release has created an excellent buying opportunity.

Although heavy rainfall poses a short term headwind, the broker remains positive on the future and believes “ELD is very well positioned to grow through the cycle.”

Its analysts expect this to underpin fully franked dividends per share of 53 cents in FY 2023 and 57 cents in FY 2024. Based on the current Elders share price of $10.22, this will mean yields of 5.2% and 5.6%, respectively.

Goldman Sachs currently has a conviction buy rating and $18.40 price target on its shares.

Macquarie Group Ltd (ASX: MQG)

Another ASX dividend share that could be in the buy zone is investment bank Macquarie.

Morgans is a fan of Macquarie due to its exposure to long-term structural growth areas such as infrastructure and renewables.

The broker also sees opportunities for the bank to “benefit from recent market volatility through its trading businesses, while it continues to gain market share in Australian mortgages.”

All in all, Morgans is expecting this to underpin partially franked dividends of $7.07 per share in FY 2023 and $7.47 per share in FY 2024. Based on the current Macquarie share price of $178.06, this will mean yields of 4% and 4.2%, respectively.

Morgans has an add rating and $215.00 price target on the company’s shares.

The post Don’t miss out on these top ASX dividend shares: analysts appeared first on The Motley Fool Australia.

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More reading

• 5 ASX 200 shares Macquarie just recommended its clients buy
• Markets are nervous. Why waiting to buy these ASX 200 shares could prove expensive
• Why ASX shares in these sectors should outperform in 2023 while these are ones to avoid: fund manager
• 2 ASX shares perfect for the current climate: expert
• Looking to buy Macquarie shares? The bank is ‘positioned for an earnings recovery’: fundie

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 recommended Elders Limited and Macquarie Group Limited. 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 morning trade, the Rio Tinto Ltd (ASX: RIO) share price is trading slightly lower at $106.40.

Though, shareholders aren’t likely to be too bothered given that the mining giant’s shares have risen almost 17% since this time last month.

Where next for the Rio Tinto share price?

The team at Goldman Sachs believes the Rio Tinto share price has room to climb higher from here.

According to a note, the broker has retained its buy rating and lifted its price target on the miner’s shares to $114.70.

Based on the current Rio Tinto share price, this implies a return of 9% for investors before dividends.

If you include the US$4.18 per share fully franked dividend Goldman expects in FY 2023, the total potential return stretches to 15%.

What did the broker say?

Goldman highlights that Rio Tinto has recently announced an agreement with Wright Prospecting to modernise the 50:50 joint venture covering the large Rhodes Ridge iron ore deposit in the East Pilbara.

Its analysts believe the development of Rhodes Ridge has “the potential to be significant for RIO’s Pilbara business as it could lift system capacity, utilise spare rail and port infrastructure and help close the FCF/t gap with BHP over the medium term.”

In respect to the latter, the broker commented:

BHP has a >US$10 FCF/t gap over RIO due to lower capital intensity (larger orebodies means less replacement mines) and higher grades/margins but Rhodes Ridge could help lower system unit costs and long run capital intensity, and close the FCF gap to BHP by US$6-8/t or by >50% by the end of the decade.

In light of the above and with the Rio Tinto share price trading at a “compelling” ~0.9x NAV, the broker believes it is a great option for investors in the resources sector right now.

The post The Rio Tinto share price is trading at a ‘compelling’ level: broker appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• Rio Tinto share price lifts amid ‘exciting’ decarbonisation development
• Why is the Rio Tinto share price trailing the ASX 200 on Monday?
• Rio Tinto share price falls on Turquoise Hill takeover setback
• Which stocks are in the Vanguard Australian Shares Index ETF (VAS) right 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 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 S&P/ASX 200 Index (ASX: XJO), unlike many global indices, didn’t fall into a bear market this year. But that doesn’t mean retirement-focused investors weren’t able to take advantage of its correction.

A market correction can provide an opportunity to buy many of the ASX 200’s greats for lower-than-typical prices. Such a downturn is often touted as a sale on shares.

Buying ASX 200 shares for cheap prices has the potential to speed up returns and help investors reach their goals sooner than they otherwise might.

Here’s how I would take advantage of the next market correction to grow my portfolio and, hopefully, set myself up for an early retirement.

Investing for retirement: Compounding

Let’s say I build an imaginary portfolio made up of three ASX 200 shares. Of course, in reality, I would prefer to create a far more diversified portfolio.

However, for the sake of simplicity, let’s imagine I’d invested $10,000 equally across shares in Telstra Group Ltd (ASX: TLS), Australia and New Zealand Banking Group Ltd (ASX: ANZ), and Woolworths Group Ltd (ASX: WOW). The market favourites currently offer respective dividend yields of 3.4%, 5.9%, and 2.6%, for an average of around 4%.

That would mean my investments would probably yield around $400 each year in dividends. Thus, it could take 25 years to recover my initial investment.

Though, future dividends can never be assured, and past performance doesn’t guarantee future performance. That’s also assuming the share prices of my investments stayed put for all that time.

However, if I reinvested my dividends, I could theoretically double my money sooner.

By employing a dividend reinvestment plan (DRP), I could harness the power of compounding. That means that, factoring in all the above, it would only take 18 years for my portfolio to double from my initial investment.

Assuming that’s my retirement goal, I would have reached it seven years earlier by employing compounding, rather than stashing away my dividends for a rainy day.

How I’d take advantage of an ASX 200 market correction

Now, an investor would likely receive those same dividends whether they bought each stock in a market correction or not.

Let’s say I invested $3,333 in each of the above-mentioned ASX 200 stocks at yesterday’s closing price. That would have seen me walking away with around 846 Telstra shares, 135 ANZ shares, and 95 Woolworths shares.

However, at the shares’ respective lowest points of 2022 – often falling amid June’s market correction – that same cash would have seen me boasting 920 Telstra shares, 160 ANZ shares, and 105 Woolworths shares.

Discounting special offerings, the former portfolio would have returned $398.71 in dividends over the 12 months just been. Meanwhile, the latter would have returned $454.40 – representing an approximate 4.5% trailing yield.

If that rate were to remain stable, compounding means my imagined portfolio would have doubled in value in just 16 years, potentially allowing me to retire two years earlier than I otherwise might have.

All that for simply taking advantage of an ASX 200 market correction.

And, as we never know when the next correction will come, it could be a good idea to prepare a ‘best ASX dividend shares to buy now’ list today.

The post Use the ASX 200 market correction to retire early. Here’s how appeared first on The Motley Fool Australia.

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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 positions in and has recommended Telstra Corporation Limited. 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 is a wide range of ASX dividend shares, from blue chips to ASX growth shares that pay solid dividends.

I think there are some names that are small enough to have a large growth runway but are already profitable enough to be paying good dividends.

In my opinion, it’s the businesses that are growing at a good pace that are the ones that can deliver the strongest returns over time thanks to compounding.

With that in mind, here are three of my leading ASX dividend shares ideas to achieve growth at the current prices.

Premier Investments Limited (ASX: PMV)

Premier Investments is one of the most compelling retailers on the ASX in my opinion. It has plenty of brands that you’d find in an Australian Westfield shopping centre, such as Just Jeans, Jay Jays and Peter Alexander.

But, there are two parts of Premier Investments that I’m particularly attracted to – Smiggle and Breville Group Ltd (ASX: BRG). Smiggle is a retailer focused on school children that sells a variety of branded products like bags, pencil cases and so on. The products have brand imagery from some of the most popular brands including Marvel and Minecraft.

Management is pleased by Smiggle’s performance since the COVID reopening. It’s looking to grow in regions like Europe and Asia. The business is looking to “maximise EBIT (earnings before interest and tax) growth”.

It owns 25.6% of Breville, a globally-growing kitchen appliance business. While this isn’t an article about Breville, I think this business is doing well at increasing its global addressable market and expanding into new countries.

Premier retail sales were up 42.8% year over year in the first 12 weeks of FY23.

The ASX dividend share is projected to pay a grossed-up dividend yield of 5.8% in FY23.

Universal Store Holdings Ltd (ASX: UNI)

Universal Store owns a “portfolio of premium youth fashion brands”, which it can sell through its retail stores, online and wholesale. It owns the businesses Universal Store and THRILLS, while also trialling the Perfect Stranger brand as a standalone retail concept.

It continues to open new stores. Universal Stores recently said it’s planning to open two new stores before Christmas, as well as another four to five stores in the second half of FY23.

In FY23 for the 21 weeks to 20 November 2022, total group sales (excluding THRILLS) had increased by around 40%, while it also reported a gross profit margin improvement.

The company expects that favourable trading conditions can continue in the post-lockdown environment.

Using the estimates on Commsec, the Universal Store share price is valued at 11 times FY24’s estimated earnings with a potential grossed-up dividend yield of 8.4%.

Beacon Lighting Group Ltd (ASX: BLX)

Beacon Lighting might not seem like a business with a lot of growth potential, but I think it is, particularly at this valuation starting point with the Beacon Lighting share price down 30% in 2022 to date.

The shorter term may be a bit volatile with a possible downturn of housing construction in Australia amid rising interest rates.

Beacon Lighting finished FY22 with 117 company stores and two franchised stores. Company research has identified the potential for 184 Beacon Lighting stores in Australia. That suggests a possible rise of over 50%.

It’s looking to grow trade sales. FY22 saw Beacon commercial sales increase by 15.8%. Trade club members went up by 7,800 to 52,000 members. It’s acquiring new trade products to create a comprehensive range of products for its trade customers.

The ASX dividend share has launched a Beacon Lighting business-to-consumer website in the US to build a market presence in the USA. Beacon Lighting USA saw FY22 sales grow by 51.9%, though from a relatively small base.

FY22 Beacon international sales increased by 27.9% to $15.7 million. It has established a new online ceiling fan sales channel in China with Tmall Global. The company is expecting continued expansion of the Australian designed products into the USA, China, Asian and European markets.

According to Commsec, the Beacon Lighting share price is valued at 13 times FY23’s estimated earnings with a potential grossed-up dividend yield of 5.9% for the 2023 financial year.

The post 3 ASX dividend shares I think have supercharged growth potential appeared first on The Motley Fool Australia.

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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 Premier Investments Limited. 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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We’re well and truly past August reporting season but some companies in the S&P/ASX 200 Index (ASX: XJO) operate on different financial calendars to the rest.

As a result, some ASX 200 shares have released their full-year results this month. And in the process, they’ve also declared dividends.

With every dividend comes an ex-dividend date, which marks the day that a company’s shares no longer trade with rights to the recently-declared dividend.

In other words, investors who purchase shares on or after the ex-dividend date won’t be eligible for the upcoming payment. 

But since shares typically drop on the day they turn ex-dividend, investors may be able to pick up shares at a reduced price.

Without further ado, here are three ASX 200 shares going ex-dividend next week.

GrainCorp Ltd (ASX: GNC)

First up, GrainCorp handed in its full-year FY22 results last week and delighted shareholders by declaring a special dividend.

All up, the ASX 200 agribusiness announced a fully franked final dividend of 30 cents per share, which will be paid on 14 December.

GrainCorp shares will turn ex-dividend for this payment on Tuesday. So, to be eligible for this dividend, investors must be on GrainCorp’s share register by the closing bell on Monday.

FY22 was a record year for GrainCorp as net profit after tax (NPAT) rocketed by 173% to $380 million.

Each of the company’s business segments delivered an increase in activity and volumes. This was driven by more grain handled and exported, higher oilseed crush volumes, and stronger food sales.

The company noted that against a backdrop of operational challenges, global demand for Australian grains, oilseeds, and vegetable oils remained strong throughout the year.

This helped GrainCorp to dish up a three-fold increase in its annual dividends to 54 cents per share, fully franked. With GrainCorp shares last trading at $8.27, this spins up a trailing dividend yield of 6.5%.

Taking out the special dividend, this yield comes in at 4.6%, which grosses up to 6.6%, including franking credits. 

Aristocrat Leisure Limited (ASX: ALL)

The next cab off the rank is ASX 200 slot machine and casino game manufacturer Aristocrat, which also released its FY22 results last week.

Aristocrat shares will be going ex-dividend on Wednesday, trading without claims to the company’s fully franked final dividend of 26 cents per share.

Aristocrat doesn’t have a dividend reinvestment plan (DRP), so all eligible shareholders will receive this payment in cash on 16 December.

FY22 was another year of growth for Aristocrat. On the top line, revenue climbed 18% to $5.6 billion, while NPAT jumped 30% to $1.0 billion.

The company said this growth reflected sustained investment in top-performing product portfolios, differentiating capabilities, increased operational diversification, and business resilience.

Aristocrat’s North American gaming operations and global outright sales division were standouts.

Across the financial year, Aristocrat returned $660 million to shareholders through dividends and an on-market share buyback.

The ASX 200 gaming company dialled up its annual dividends by 27% in FY22, declaring total dividends of 52 cents. This puts Aristocrat shares on a trailing dividend yield of 1.5%, which grosses up to 2.1%.

Pendal Group Ltd (ASX: PDL)

Rounding out this trio of ASX 200 shares going ex-dividend next week is investment management business Pendal.

As of Thursday, Pendal shares will be trading without rights to the company’s fully franked final dividend of 3.5 cents per share. 

Like GrainCorp and Aristocrat, Pendal isn’t running a DRP for this payment. So, shareholders will have no choice but to receive this dividend in cash on 15 December.

It’s been a busy year for Pendal, with its proposed takeover by Perpetual Limited (ASX: PPT) currently awaiting shareholder approval.

Perpetual first lobbed a bid for Pendal in April this year and there’s been plenty of back and forth between the two parties since. 

Just last week, the terms of the offer were revised again, changing the split between cash and scrip.

If the deal proceeds, Pendal shareholders will receive one Perpetual share for every 7 Pendal shares, plus $1.65 cash. However, this cash component will be reduced by 3.5 cents to account for Pendal’s FY22 final dividend.

Based on Perpetual’s last closing price, this currently values Pendal at around $5.28 per share. In comparison, Pendal shares last swapped hands on-market for $4.83.

Pendal shareholders are set to vote on the proposal next month on 23 December.

The post 3 ASX 200 shares trading ex-dividend next week appeared first on The Motley Fool Australia.

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Motley Fool contributor Cathryn Goh 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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