Category: Stock Market

If you want to retire early, then you could try and win the lottery. But with the odds on Powerball stacked against you, I wouldn’t be relying on this.

Instead, I would look to grow my wealth by buying and holding high-quality ASX 200 shares over the long term.

Growing your wealth

The good news is that you don’t need to start with a huge sum of money to do this. Slow and steady can win the race when it comes to investing.

If you can afford to put $500 into ASX 200 shares each month, you could potentially retire early thanks to the power of compounding.

It’s difficult to say how much money you will need for retirement in the future, particularly if you want to retire early, but let’s look at retiring with a passive income stream of $60,000 per annum.

$60,000 passive income in retirement

Historically, the share market has provided investors an average annual return of 10%.

And while past performance is not a guarantee of future returns, I’m optimistic that the share market will continue to deliver similar returns over the long term.

If it does, and you invest $500 a month and earn the market return, you would have grown your portfolio to just over $1 million after 30 years.

After which, once your portfolio has hit the $1 million mark, you can switch your focus to income by building a portfolio filled with high-yield ASX 200 dividend shares that provide you with ~6% yields.

At present, this includes bank shares such as Westpac Banking Corp (ASX: WBC) (see here) or the Vanguard Australian Shares High Yield ETF (ASX: VHY).

Overall, this means that if you started investing in this way in your 20s, you could theoretically be retiring early in your 50s.

The post I’d start spending $500 a month on ASX 200 shares to retire early appeared first on The Motley Fool Australia.

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More reading

• IAG share price sinks 5% as New Zealand flood claims pour in
• Up 25% in a year, is it time to cash in Qantas shares?
• Is Bank of Queensland gearing up for the next big ASX 200 bank merger?
• Liontown share price roars amid milestone transition from lithium explorer to mining operator
• Did you buy $1,000 of Whitehaven shares 10 years ago? If so, here’s how much passive income you’ve received

Motley Fool contributor James Mickleboro has positions in Westpac Banking. 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 Vanguard Australian Shares High Yield ETF and 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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The Insurance Australia Group Ltd (ASX: IAG) share price is down 5.2% in Friday morning trade. 

The S&PASX 200 Index (ASX: XJO) insurance stock closed yesterday trading for $4.83 per share. Shares are currently changing hands for $4.58 apiece.

This comes following the company’s release of this morning’s Auckland flooding impact and financial update.

What’s happening with the New Zealand flood claims?

The IAG share price is sinking after the company said it has received more than 15,000 claims to date across its AMI, State, NZI and partner brands related to the devastating rains and floods around Auckland.

IAG’s CEO Nick Hawkins reiterated the insurer’s primary focus is supporting its clients.

“We have a large team, led by our New Zealand CEO Amanda Whiting, on the ground to provide immediate support and in the longer term, to help our customers and their communities recover,” he said.

As the company reported on Monday, when the IAG share price closed 3.7% lower, its reinsurance arrangements provide it with a Maximum Event Retention of $236 million. IAG expects the Auckland claims to exceed $350 million.

With second-event reinsurance covers in place, the Maximum Event Retention for a second event during the 2023 financial year is $192 million. IAG will pay an additional premium for its second drop-down cover.

IAG share price slides despite growth estimates

IAG is scheduled to release its half-year results for the six months ending 31 December on Monday, 13 February.

The company forecasts first-half gross written premium (GWP) growth of 7.5%. On an underlying basis, IAG expects 9.8% GWP growth.

Commenting on the growth outlook that’s failed to lift the IAG share price today, Hawkins said:

Our strong top-line growth over the half reflects significant premium increases and new customer growth. Premium rates continue to increase in response to claims inflation and in anticipation of additional reinsurance and natural perils costs. Our retention rates have remained at very high levels.

The company forecasts a 1H23 net profit after tax (NPAT) attributable to shareholders of $468 million, up from $173 million in 1H22. It noted that this includes the benefit of the post-tax $252 million reduction in the Business Interruption provision.

The insurer expects its CET1 ratio will be 1.11, above its target range of 0.9 to 1.1.

What’s ahead?

Looking ahead to the full year, IAG forecasts FY23 GWP growth of some 10%. That’s up from its previous guidance of ‘mid to high-single digit’.

The company said it’s on track to achieve a 15% to 17% insurance margin, which could help boost the IAG share price in the months ahead.

“The strong premium growth we’re delivering, along with the strength of our business and brands, provides us with confidence in the outlook and the ability to deliver our targeted 15% to 17% margin over the medium term,” Hawkins said.

IAG share price snapshot

With today’s intraday slide factored in, the IAG share price, pictured below, has dropped into the red in 2023, down 3.7%. Shares are up 5% over the past 12 months.

The post IAG share price sinks 5% as New Zealand flood claims pour in appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Monday
• Why Brainchip, IAG, Metcash, and ResMed shares are sinking today
• Why is the IAG share price tumbling 4% on Monday?
• 2 Warren Buffett-style ASX dividend stocks for big income
• Goldman Sachs gives its verdict on the IAG share price

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

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The Qantas Airways Limited (ASX: QAN) share price has been one of the better-performing, non-resource S&P/ASX 200 Index (ASX: XJO) shares over the past year.

But, after the last 12 months, is it time to exit Qantas as an investment?

Qantas shares have done well amid a recovery for travel, it has increased its profit guidance and improved its expectations for net debt.

The last Qantas market update was released near the end of November 2022. It showed that underlying profit before tax was expected to be $1.35 billion to $1.45 billion for the first half of FY23, while net debt is expected to fall between $2.3 billion to $2.5 billion.

While consumers “continue to put a high priority on travel ahead of other spending categories”, fuel costs were “significantly elevated with FY19 and are expected to reach approximately $5 billion for FY23”. That’s despite international capacity being around 30% below pre-COVID levels.

Is this the best it gets for the Qantas share price?

One expert thinks that the airline could fly even higher.

Wilson Advisory has held Qantas shares in its ‘focus portfolio’ for exposure to the travel recovery theme. It “still believes Qantas presents a well-priced investment opportunity due to its current discounted valuation relative to US peers, while earnings still have the potential to surprise to the upside”.

According to Wilson, Qantas shares are forecast to trade at an enterprise value to earnings before interest, tax, depreciation and amortisation (EBITDA) ratio of 3.2x for the 2024 calendar year, while the average of American Airlines, Delta Air Lines, United Airlines and Southwest Airlines is 4.4x.

Wilson said this discount seemed “unjustified”, with Qantas and the Australian air travel industry going through “structural change” since the pandemic. There was “reduced competition”, and a “more rational market” with the potential initial public offering (IPO) of Virgin. Qantas has also reduced its costs by around $1 billion since the start of the pandemic, increasing its profitability.

Wilson also noted that Qantas earnings were forecast to grow in FY24 by 2.6%, with that estimate looking “too conservative”, according to the team. It thinks pent-up travel demand will continue to help prices and passenger numbers. Wilson also pointed out that international travel numbers are yet to fully recover. The airline could also announce further share buybacks.

How far could the airline rise?

Wilson suggested that if Qantas’ (analyst consensus) forecast EBITDA for FY24 was put on a multiple of 4x, compared to the FY24 US peer average of 4.4x, this would place the Qantas share price at $8.57. That’s a potential upside of more than 30%.

But, if Qantas were conservatively valued at 3.5x the consensus FY24 EBITDA – below the pre-COVID multiple of 3.7x – this would suggest a value of $7.34. This could be a possible rise of around 15% for Qantas shares.

Wilson also suggested that forecast earnings for FY23 to FY25 could be too conservative, and that upgrades were plausible for the next 12 months. This could mean even further upside.

The post Up 25% in a year, is it time to cash in Qantas shares? appeared first on The Motley Fool Australia.

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More reading

• Should I buy Qantas shares before the company’s ASX earnings update?
• Morgans names 2 of the best ASX 200 shares to buy in February
• 3 of the very best ASX 200 travel shares to buy according to Goldman Sachs
• Up 8% in 2023, is it too late to buy Qantas shares now?
• Qantas share price struggles amid second incident in 2 days

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

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Merger and acquisition activity amid S&P/ASX 200 Index (ASX: XJO) bank shares have been hot lately, with ANZ Group Holdings Ltd (ASX: ANZ)’s plan to buy Suncorp Group Ltd (ASX: SUN)’s banking division piquing attention in July.

And now another unification could be in the works. Bank of Queensland Ltd (ASX: BOQ) and Bendigo and Adelaide Bank Ltd (ASX: BEN) are reportedly rumoured to be in early merger discussions.

The not-quite-big-four-banks boast respective market capitalisations of approximately $4.6 billion and $5.7 billion.

Right now, the Bank of Queensland share price is $7.05 while that of Bendigo Bank is $10.02.

Let’s take a closer look at the talks rumoured to be happening between the two ASX 200 bank shares.

Is Bank of Queensland in ASX 200 merger talks?

Bank of Queensland and Bendigo Bank are contemplating a more-than-$10 billion merger, sources have reportedly told The Australian. However, Bank of Queensland is said to have denied such suggestions.

It follows the surprise ousting of former Bank of Queensland CEO George Frazis in November. Commenting on Frazis’ departure, chair Patrick Allaway said:

[D]ifferent leadership is now required to ensure BOQ can continue to build a stronger and more resilient bank through future cycles.

It has reportedly been suggested that the bank has stalled its search for a new leader as it considers a possible merger, which could bring both competitive and regulatory benefits.

Though, the bank told the publication its search for a new CEO is ongoing and no talks between it and Bendigo Bank are in progress.

The rumours come just two years after Bank of Queensland acquired ME Bank for around $1.3 billion – representing an implied acquisition multiple of 1.05 times book value and 11.9 times cash underlying earnings.

Then, Allaway dubbed the buy, “a key step in our strategy to be a compelling alternative to the big banks.”

If a Bank of Queensland/Bendigo Bank merger proposal sounds familiar, it’s probably because it is.

The former bank put forward a $17.18 per share takeover bid for the latter in 2007. That bid was ultimately rejected. Bendigo Bank instead merged with Adelaide Bank later that year.

So, might the market see another merger proposal from the ASX 200 bank shares in the coming months or years? Only time will tell.

The post Is Bank of Queensland gearing up for the next big ASX 200 bank merger? appeared first on The Motley Fool Australia.

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More reading

• Did you buy $1,000 of Bank of Queensland shares 10 years ago? Here’s how much dividend income you’ve made
• This could crash the earnings season party for ASX 200 bank shares: Macquarie
• Dividends, dividends, dividends! 3 ASX 200 bank shares forecasting yields over 8%
• Attention income investors! These 7 ASX 200 dividend shares are projecting yields of 7%+ in FY24
• Which ASX 200 bank share is forecast to pay the highest dividend yield in FY24?

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 Bendigo And Adelaide Bank. 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 Liontown Resources Ltd (ASX: LTR) share price is on course to end the week on a positive note.

In early trade, the lithium developer’s shares are up 2.5% to $1.61.

Why is the Liontown share price rising?

Investors have been bidding the Liontown share price higher today following the release of an update on the Kathleen Valley lithium project in Western Australia.

According to the release, the company’s mining services provider has commenced open pit mining operations at Kathleen Valley with the first blast successfully fired.

Management notes that the first blast at the Mt Mann open pit marks a significant milestone in the development of Kathleen Valley.

This blast area contains predominantly waste rock which will be used as bulk fill for construction of the Run of Mine (ROM) pad. The small quantity of ore contained within the blast will ultimately be used to sheet the ROM pad once constructed.

All in all, this leaves the company placed to commence first production on schedule in mid-2024.

But Liontown expects to generate revenue before then. Management has also reconfirmed that it is progressing a Direct Shipping Ore (DSO) opportunity with sample composites currently being prepared for potential customers. This DSO will allow Liontown to monetise material not previously expected to be processed and take advantage of strong lithium market conditions.

‘A significant milestone’

Liontown’s managing director and CEO, Tony Ottaviano, was delighted with the progress the company is making. He said:

Completion of the first blast and commencement of open pit mining operations at Kathleen Valley is a significant milestone for Liontown, signifying our transition from explorer to mining operator.

Achieving this milestone ahead of schedule is a testament to the hard work and dedication of the Liontown and Iron Mining Contracting teams. We are excited to be working with the experienced team at Iron Mine Contracting. We have every confidence in their ability to deliver results and look forward to partnering with them to bring our Kathleen Valley Lithium Project to life.

The post Liontown share price roars amid milestone transition from lithium explorer to mining operator appeared first on The Motley Fool Australia.

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More reading

• 3 ASX 200 lithium stocks that leapt beyond 20% in January
• Forget lithium! I’m using the Warren Buffett method to help find winning ASX shares in 2023
• These are the 10 most shorted ASX shares
• 4 ASX All Ords shares insiders have been buying up in January
• Here are the 3 most heavily traded ASX 200 shares on Friday

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 Whitehaven Coal Ltd (ASX: WHC) share price has burned bright over the last decade. It has gained a notable 150% since February 2013.

Back then, $1,000 likely would have bought 306 shares in the coal producer at $3.26 apiece.

Today, that holding would be valued at around $2,500. The Whitehaven share price last traded at $8.17.

For comparison, the S&P/ASX 200 Index (ASX: XJO) has gained around 53% over that time.

But what would come of Whitehaven’s returns if we also factor in the company’s dividends? Let’s take a look.

All the dividends from Whitehaven shares since 2013:

Here are all the dividends the ASX 200 coal producer has provided over the last decade:

Whitehaven dividends’ pay date	Type	Dividend amount
September 2022	Final	40 cents
March 2022	Interim	8 cents
March 2020	Interim	1.5 cents
September 2019	Final	13 cents
September 2019	Special	17 cents
March 2019	Interim	15 cents
March 2019	Special	5 cents
September 2018	Final	14 cents
September 2018	Special	13 cents
March 2018	Interim	13 cents
November 2017	Final	6 cents
November 2017	Capital return	14 cents
Total:		$1.595

As the chart above shows, each Whitehaven share has yielded $1.595 of dividend income over the last 10 years. That means our figurative parcel has likely provided $488.07 of passive income.

That bolsters the total return on investment (ROI) for the imagined 306-share-strong parcel to a whopping 199.5% – nearly triple the initial investment!

However, it hasn’t been smooth sailing for income investors. The company’s dividends have been volatile over the years.

It didn’t put any on the table between 2012 and 2017 or between early 2020 and early 2022. It has also paid a number of special dividends and provided a capital return.

The company’s most recent offering was also its largest ordinary dividend in history, born from soaring coal prices.

Whitehaven shares currently offer a 5.87% dividend yield.

The post Did you buy $1,000 of Whitehaven shares 10 years ago? If so, here’s how much passive income you’ve received appeared first on The Motley Fool Australia.

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More reading

• Two ‘top prospect’ ASX 200 dividend shares for 2023 revealed: fund manager
• These ASX 200 shares were smashed in January
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Why is the Whitehaven Coal share price tanking 6% today?
• Why Accent, Mineral Resources, Newcrest, and Whitehaven Coal shares are dropping

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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Premier Investments Limited (ASX: PMV) shares could make a great first investment with $500. It’s an S&P/ASX 200 Index (ASX: XJO) stock that offers investors a good dividend yield.

If I were looking to invest, I’d want to go for a business that could generate a good total return, through a mix of capital growth and income.

The ASX is a great place to find investment opportunities in my opinion, but the problem is that Australia doesn’t have a very large population, so businesses can sometimes reach their growth limit fairly quickly.

But, the ASX businesses that are growing internationally could be ones to look at.

I think Premier Investments’ global growth exposure makes it an attractive option to consider.

Brand power

Premier Investments owns a number of different retail brands including Just Jeans, Jay Jays, Dotti, Peter Alexander and Smiggle. Many readers may already have heard of some of these names.

The ASX 200 stock also owns significant shareholdings of Breville Group Limited (ASX: BRG) and Myer Holdings Ltd (ASX: MYR).

Increased profitability for the ASX 200 stock

The business has managed to use the COVID-19 pandemic period to increase its profitability significantly.

On one hand, the company has managed to grow its percentage of online retail sales a lot compared to the pre-COVID times. Online sales come with a higher profit margin according to the company.

The ASX 200 stock also worked hard on changing its rental agreements to better reflect the situation for bricks and mortar retailing. A lower rent-to-sales ratio improves the profit margin for the business in its physical retailing as well.

Increased profitability normally helps investor sentiment and can help the Premier Investments share price.

International growth

Premier Investments is doing an excellent job at growing Smiggle, a business that sells school items (such as bags and pencil cases) with branded imagery on them, such as Marvel and Minecraft.

This offering appears to be very popular with kids and families around the world. Premier Investments said that in FY22, Smiggle generated $261.2 million of sales globally, which was an increase of 24.6% – Smiggle saw sales rise 61.7% in Australia and New Zealand, while Europe and Asia also saw growth return as school and tourism resumed.

The company noted that it developed new products with Disney studios, BBC studios and Universal Studios, as well as its very first sporting collaboration with the AFL.

The company’s overall sales have continued to perform strongly in FY23 as it cycles against the last of the lockdowns globally.

What is the dividend yield on Premier Investments shares?

The ASX 200 stock could pay a grossed-up dividend yield of 5.4% in FY23 according to the estimate on Commsec.

In the coming years, I think the dividends could provide good returns and the growth of Smiggle could unlock further capital gains.

The post I’d invest my first $500 in this high-dividend-yield ASX 200 stock today appeared first on The Motley Fool Australia.

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More reading

• The ASX 200 is still full of cheap shares despite this year’s surge and I’m ready to buy more
• Top ASX shares to buy in February 2023
• How I’d invest $200 a month in ASX shares to make a $20,000 passive income for life
• Forget lithium! I’m using the Warren Buffett method to help find winning ASX shares in 2023
• Why this ASX 200 retail share is ‘best positioned’ for 2023: Morgan Stanley

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 Walt Disney. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2024 $145 calls on Walt Disney and short January 2024 $155 calls on Walt Disney. The Motley Fool Australia has recommended Premier Investments and Walt Disney. 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 tech sector is roaring again at last!

Investors have been flooding back into this side of the market this week, driving ASX tech shares higher.

The good news is that it’s not too late to add some tech exposure to your portfolio. Listed below are two ASX tech shares that Morgans rates very highly:

Megaport Ltd (ASX: MP1)

The first ASX tech share that Morgans is tipping as a buy is Megaport. It is the leading network as a service provider with a clear first mover advantage. Morgans believes that recent weakness in its share price means the risk/reward on offer with its shares is compelling. It commented:

MP1 is the world leader in Network as a Services (NaaS). They have first mover advantage, scale and technical expertise which means they are well placed to grow rapidly and maintain a healthy competitive advantage. We have always been long term bulls on MP1 but more recently thought expectations were too high and that this made for poor risk/reward. Consensus revenue and EBITDA growth in FY23 now looks reasonable to us. With the risk of multiple compression now hopefully behind us, fundamentals will once again matter. Quality tech can grow regardless of weak economic conditions.

Morgans has an add rating and $8.25 price target on the company’s shares.

NextDC Ltd (ASX: NXT)

Another ASX tech share that Morgans has named as a buy is NextDC. The broker believes the data centre operator is well-placed for growth thanks to the structural shift to the cloud and its new developments. It explained:

NXT should deliver another good set of results in FY23 with some upside risk to guidance, in our view. Structural demand for cloud and colocation remains incredibly strong. NXT’s new S3 and M3 data centres are now open. Consequently, we expect significant new customer wins over the next six-to-twelve months (including CSP options being exercised). Sales should drive the share price higher. NXT looks comfortably on-track to generate over $300m of EBITDA in the next three to five years.

Its analysts have an add rating and $13.30 price target on NextDC’s shares.

The post Tech boom! Buy these ASX tech shares before it’s too late: broker appeared first on The Motley Fool Australia.

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More reading

• Buy this ASX 200 tech stock that’s crashed 27% this week: expert
• Here are the top 10 ASX 200 shares today
• 3 ASX 200 tech shares going gangbusters on Thursday
• ‘Incredible value’: 3 ASX 200 shares expert would buy now for long-term growth
• Top brokers name 3 ASX shares to buy today

Motley Fool contributor James Mickleboro has positions in Nextdc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Megaport. The Motley Fool Australia has recommended Megaport. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://www.fool.com.au/2023/02/03/tech-boom-buy-these-asx-tech-shares-before-its-too-late-broker/

National Australia Bank Ltd (ASX: NAB) shares have had a strong year, rising by 12% in the last 12 months. On top of that, the dividend income from NAB may be supercharged thanks to the higher interest rates. But is the ASX bank share a good bet in the current environment?

Bank profits are expected to rise in FY23 because banks have passed on more of the rate hikes to borrowers than to savers.

Considering lending is where most of the profit is generated by NAB, changes to the situation can have a big impact.

Large financial improvement expected in FY23

It’s partially because of the higher interest rates that NAB is expected to generate $2.50 of earnings per share (EPS) in FY23, according to Commsec. That would be an increase of around 14% from continuing operations EPS in FY22. This estimate would put the NAB share price at under 13 times FY23’s estimated earnings.

Bigger profit generation would enable NAB to fund bigger dividend payments.

Commsec numbers suggest that NAB could pay an annual dividend per share of $1.71 in FY23, translating into a grossed-up dividend yield of around 7.75%.

In terms of the dividend yield, that’s a compelling level of income that could be on the way to investors, with mid-single-digit growth in percentage terms in FY24 and FY25.

For investors who are mostly focused on income, I think NAB is a decent shout with its effective management team and growing profit.

Is the NAB share price a buy?

There’s more to an investment than just how much dividend income it produces. I don’t think there’s much point getting 7% of income if the share price falls 10% or more (and stays down).

I think banks like NAB are on track for higher levels of profitability as measured by the net interest margin (NIM). But higher interest rates also come with a risk – a higher chance of defaulting by borrowers. How much will NAB’s arrears rise? Well, that’s a key question. At this stage, I think it’s hard to say.

I think NAB will be able to get through the coming period relatively unscathed, I think the boss Ross McEwan has set up the bank in the right way with the right risk settings.

I’d choose NAB over all of the other domestic ASX bank shares because of the combination of its quality, growth, and reasonable valuation.

Time will tell whether the banking sector ignites another competition war, but I think NAB shares are well-placed to do well.

The post Should I buy NAB shares for 2023 dividend potential? appeared first on The Motley Fool Australia.

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More reading

• Investing in ASX 200 dividend shares? Here’s what to look for in 2023: fund manager
• How I’d invest $20,000 in ASX 200 dividend shares in 2023
• Buy NAB and this high yield ASX dividend share: experts
• Investing in ASX 200 bank shares? Here’s the dividend outlook for 2023
• Goldman Sachs names 2 ASX dividend shares to buy 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 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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Certainly businesses need to know what they’re doing to flourish, that much is obvious.

But sometimes external factors can push a company’s fortunes into the stratosphere.

It could be that its products and services see a huge rush in demand because of an unexpected event. It might be that the economic forces align just in the sweet spot for the business.

The company happens to be in the right place at the right time.

Is this fair? 

Plenty of otherwise excellent businesses go broke because of unexpected external factors — such as a pandemic. So you have to take the good with the bad.

The Elvest Fund this week mentioned two of its holdings that currently have the opportunity to make much hay while the sun shines:

Travel is going gangbusters

Yes, interest rates have climbed recently at a frightening speed not seen in a generation. Consumers and businesses alike are tightening their belts.

But visit any airport and you realise how much Australians want to travel at the moment, regardless of how worried they are about their mortgage repayments.

Being trapped in lockdowns and closed borders for two years will do that to you.

There are also external drivers stimulating the travel industry too.

China, after persisting with a zero-COVID policy for three years, reversed its stance late last year after rarely seen mass protests flared up among its fed-up population.

While in the short term this could cause tremendous health problems for the world’s largest country, it is a major step in rejuvenating its economy back to something close to normal levels.

These are the two stocks to buy

So which are the two ASX travel shares that the Elvest team thinks are perfectly placed to ride these tailwinds?

“The release of considerable pent up demand coupled with the reopening of the Chinese economy pushed travel related businesses Corporate Travel Management Ltd (ASX: CTD) and Helloworld Travel Ltd (ASX: HLO) higher during the month,” its memo to clients read.

Indeed Corporate Travel shares are now 12.5% higher than where they started December. The Helloworld share price has climbed an impressive 21.7% over the same period.

Certainly, there are many other players that can similarly take advantage of the above tailwinds in the travel industry.

But the nature of these two businesses set them up for long-term success, read the Elvest memo.

“With leaner operating structures, healthy balance sheets and rapidly recovering demand for travel services, both businesses are well positioned to grow earnings from depressed levels in the years to come.”

The post 2 ASX shares in the right place at the right time right now: Elvest appeared first on The Motley Fool Australia.

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More reading

• These were the best performing ASX 200 shares in January
• Here are the top 10 ASX 200 shares today
• 3 of the very best ASX 200 travel shares to buy according to Goldman Sachs
• Here are the top 10 ASX 200 shares today
• Analysts say these ASX growth shares can generate huge returns for investors

Motley Fool contributor Tony Yoo has positions in Corporate Travel Management. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Helloworld Travel. The Motley Fool Australia has positions in and has recommended Helloworld Travel. The Motley Fool Australia has recommended Corporate Travel Management. 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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