Category: Stock Market

The Arafura Resources Limited (ASX: ARU) share price is sinking by more than 6% on Friday afternoon. This comes after the company released its most recent quarterly activities report after Thursday’s closing bell.

At the time of writing, shares of the rare earths producer are down 6.45% to 29 cents apiece.

Let’s go over the highlights of the report for the quarter ended 30 September 2022.

What did Arafura report?

• Net cash used in operating activities: $14.17 million
• Net cash used in investing activities: $1.06 million
• Cash and cash equivalents at end of the period: $49 million
• Estimated quarters of funding available: 3.2

Arafura made progress within its front-end engineering and design works (FEED) for its Nolans project during the quarter. This included finalising key process design documents for its hydrometallurgical plant and commencing the tendering of its on-site power station.

The company also commented on its macro environment both in Australia and internationally. It expects more attention drawn to neodymium-praseodymium oxide (NdPr) production thanks to the National Reconstruction Fund earmarking $1 billion to “move Australia further up mineral value chains” through mineral processing development.

On a global level, Arafura expects China’s increasing aggression towards Taiwan as a catalyst for the world to need an alternative to China for NdPr production, which could potentially play in its favour.

It also mentioned that the United States’ Inflation Reduction Act of 2022 has earmarked a sizable $US369 billion for energy security and handling climate change, which could benefit Australian mineral producers.

What else did the company announce?

Arafura notes that the spot price of NdPr contracted considerably over the quarter, dropping 32% from US$139 per kg to US$94 per kg. This was said to be due to softer Chinese demand, particularly for magnets used for its domestic economy.

However, in the near future, the outlook for magnet demand is anticipated to improve by 2023, growing to 300,000 tonnes, which Arafura described as being “much higher” than the demand observed in 2022.

Overall the company notes that the renewable energy and e-mobility markets will help keep demand for NdPr stable.

Arafura share price snapshot

The Arafura share price is up around 40% year to date. That’s considerably better than the performance of the S&P/ASX 200 Index (ASX: XJO), which is down almost 9% over the same period.

The company’s market capitalisation is around $535.50 million.

The post Why is the Arafura share price sliding 6% on Friday? appeared first on The Motley Fool Australia.

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More reading

• Why is the Arafura share price falling in a hole today?
• Here’s why the Arafura share price is rebounding 10% today

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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It’s no doubt one of the best days in WAM Capital Limited (ASX: WAM) investors’ calendars today. That’s because shareholders of this popular ASX listed investment company (LIC) are scheduled to receive their latest dividend payment today.

WAM Capital is amongst the larger LICs on the ASX. It was founded back in 1999 and today boasts a market capitalisation of $1.83 billion – helped by the generous premium the company trades at over its net tangible assets (NTA).

To illustrate, as of 30 September, WAM Capital had an NTA per share of $1.41. But today it trades at a share price of $1.69. That’s despite a five-year share price loss of almost 30%.

But most of WAM Capital’s investors probably don’t buy this LIC for share price appreciation. Rather, WAM Capital is famous for its large and fully franked dividend yields.

What’s WAM Capital’s latest dividend worth?

As we already mentioned, the LIC’s latest dividend payment is heading to investors’ bank accounts today. It is a payment of 7.75 cents per share. That’s the same dividend that WAM Capital investors have received every six months for four years now.

But shareholders would have had to own WAM Capital shares before the company’s ex-dividend date of 17 October to be eligible to receive this latest payment.

Together with the last interim dividend of the same value, WAM Capital has now paid out a total of 15.5 cents per share over the past 12 months. On the current share price, this gives the LIC a trailing dividend yield of 9.17%. That grosses up to a hefty 13.1% with the full franking.

As of 30 September, the WAM Capital investment portfolio has delivered an average of 5% per annum (including dividend returns). This underperformed the benchmark S&P/ASX All Ordinaries Accumulation Index, which returned 7.1%. However, WAM Capital’s performance is calculated before the management fee of 1% per annum.

The post The WAM Capital dividend is hitting bank accounts today. Here’s the lowdown appeared first on The Motley Fool Australia.

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More reading

• These 2 ASX 200 shares are ‘compelling growth opportunities’: fund manager
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Motley Fool contributor Sebastian Bowen 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 Wesfarmers Ltd (ASX: WES) share price has gone through a lot of pain in 2022, but I think it’s now in bargain territory. I think that’s even more the case after seeing the update and comments from the annual general meeting (AGM) this week.

While it didn’t give much in terms of numbers, I think the ASX share’s comments were promising. I also like the company’s long-term plans.

Overall, I believe that Wesfarmers has a promising future, which is why I think it’s worth owning.

Promising AGM update

Earlier this week, Wesfarmers told investors how FY23 had been going so far.

It said that retail trading conditions have “remained robust” and management has been “pleased” with sales in FY23 to date.

Rob Scott, managing director of Wesfarmers, said:

Australian consumer demand continues to be supported by low unemployment and high levels of accumulated household savings, but rising interest rates and the impact of inflation are starting to affect consumer behaviour.

Over recent months, shopping patterns and customer feedback indicate some customers are becoming more price sensitive, as they try to manage household budgets. We see these conditions as an opportunity for our businesses, which are well known for their everyday low prices, to outperform relative to others in their markets.

Bunnings, the key profit generator for Wesfarmers, has seen sales impacted by prolonged wet weather. But overall sales growth for the financial year so far “remains resilient and continues to be supported by strong demand from commercial customers”. Sales growth from DIY customers remains positive, but it has moderated from high levels experienced through COVID.

Combined sales growth for Kmart and Target “continue to be pleasing, with strong trading results even when adjusted for the impact of lockdowns in prior periods.”

Kmart’s low product prices could be attractive to shoppers during this period when households are looking for value.

Officeworks sales are “in line” with the prior year, while Catch’s online sales are lower with lockdowns finished.

The chemicals energy and fertiliser division has continued to benefit from “strong customer demand and elevated commodity prices”. The Mt Holland lithium project is “progressing well”.

Results from the new health division have been “pleasing”, with “strong” growth in wholesale and improvements in performance for both Priceline and Clear Skincare.

Scott also said that the balance sheet is “strong” and that it has the capacity to effectively manage a range of economic scenarios.

Why I’m positive about the Wesfarmers share price

For starters, for the first half of FY23 at least, the comparable period in FY22 is for locked down periods. It provides an easier year-over-year growth rate for the group’s retailers, particularly Kmart and Target. This will also help the overall picture for FY23.

Second, the strong lithium price could be very helpful for Mt Holland’s future earnings. Wesfarmers pointed out that the production from the lithium hydroxide project will be equivalent to powering 1 million battery electric vehicles. In two years it will be selling lithium hydroxide, which will be refined in Kwinana in Western Australia.

I’m also impressed by the recent acquisitions. The health division has attractive long-term tailwinds thanks to Australia’s demographics. Bunnings’ acquisition of Tool Kit Depot and Beaumont Tiles gives Bunnings more scope for growth.

I appreciated Scott’s comments about making acquisitions, but still focusing on returns for shareholders:

I should stress that our investments in these new areas are all about delivering returns to shareholders. We do not seek growth for the sake of growth. Rather, we focus on building businesses where we have unique assets and capabilities, that will deliver attractive returns to our shareholders.

In my opinion, the lower level of the Wesfarmers share price and growth venues makes it one of the most attractive ASX blue-chip shares to consider.

The post Why I think the Wesfarmers share price is a buy after this week’s AGM appeared first on The Motley Fool Australia.

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More reading

• How I’d build a portfolio by investing in top ASX shares now
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• No savings at 35? I’d buy cheap ASX shares to try and retire rich
• Looking to buy Wesfarmers shares? Here’s what to watch at this week’s AGM
• 5 ways to be carefree during the next ASX share market downturn

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 Wesfarmers 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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The Novonix Ltd (ASX: NVX) share price is failing to entice buyers on Friday following the release of its FY23 first-quarter report.

Nearing lunchtime, shares in the battery materials company are getting bite taken out of them. At the time of writing, the damage toll is sitting around 3.48%, dragging the share price down to $2.77. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is experiencing its own languishing today, down 0.66%.

The disappointing performance could have something to do with $25 million getting incinerated in Q1.

Let’s take a closer look at the details.

Progress at a cost

The sentiment for Novonix shares has soured today amid the company’s quarterly activities report. While the anode and cathode materials manufacturer made progress in the three-month period, the price tag for it might be catching investors off guard.

According to the report, Novonix made headway in its development and expansion efforts. For instance, the company completed the installation of an analytical lab to allow materials analysis on-site during the quarter.

In addition, Novonix commenced the installation of equipment that should enable the company to generate 10 tonnes per year of anode materials. The company expects to commission the installation by December 2022.

Another positive, Nononix continued to engage with Samsung SDI and Sanyo — as well as other battery cell and automotive manufacturers — during the quarter. These discussions were centred around capacity planning for future production.

However, the in-roads made during the quarter came at a meaningful cost to the balance sheet. Over the three-month period, Novonix chewed through $25.3 million of cash. The most significant costs were attributed to property, plant, and equipment investments reaching $20.2 million.

A possible antidote to the outflow of capital could be in the works, though, with Novonix nominated to be in the running for a A$240 million grant.

Whirlwind year for Novonix shares

The Novonix share price has suffered a destructive year as excitement for loss-making companies has waned. Since the start of 2022, shares in the company have sunk a colossal 73% — dragging the share price from above $10 to below $3.

Although, anyone who picked up a bundle of Novonix shares in the past month has been rewarded. In the space of a month, the company’s shares have soared 58%, mostly due to the recent grant announcement.

The post Novonix shares go for a swim after burning through $25 million appeared first on The Motley Fool Australia.

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More reading

• Why $6.5b Argo Investments is backing these ASX 200 lithium shares
• Down 65% in 2022, chair says Novonix ‘share price will respond appropriately’
• Here are the top 10 ASX 200 shares today
• Why Life360, Novonix, Pilbara Minerals, and Vulcan shares are storming higher today
• Why is the Novonix share price surging 16% higher today?

Motley Fool contributor Mitchell Lawler 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 Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price is defying the market weakness and pushing higher on Friday.

In afternoon trade, the banking giant’s shares are up 0.5% to $25.11.

Where next for the ANZ share price?

Unfortunately for investors, one leading broker believes the ANZ share price is about fair value now and unlikely to climb meaningfully higher.

According to a note out of Goldman Sachs, in response to the bank’s full year results, the broker has retained its neutral rating with a slightly improved price target of $26.25.

Based on the current ANZ share price, this implies potential upside of 4.5% for investors.

Though, it is worth remembering that the bank is a dividend payer, so there’s more to it than just potential share price gains.

Goldman is now expecting a fully franked dividend of $1.58 per share in FY 2023, up from its previous estimate of $1.57. This equates to a generous 6.3% yield, taking the total potential return closer to 11%.

What did the broker say?

Goldman was pleased with ANZ’s full year results and has updated its earnings estimates to reflect a higher than expected exit net interest margin (NIM). It explained:

ANZ’s FY22 cash earnings were up 5% on pcp and 1.4% ahead of GSe, with the beat driven primarily by outperformance on the BDD charge. We revise our FY23/24/25E EPS by +6.1%/+0.9%/+0.6%, largely due to higher NIMs in FY23, and as a result, our 12-mo TP moves to A$26.25 (from A$26.09).

And while ANZ’s NIM is peaking higher and sooner than expected, the broker ultimately expects the majority of this benefit to be wiped out by increasing costs in FY 2024. It said:

Today’s result suggested that while ANZ’s NIM is likely to peak at higher levels than we previously forecast, this peak is also likely to come through earlier (GSe 1H23). While this bodes well for ANZ’s FY23E revenue growth (GSe +16%), the benefits do not sustain into FY24E, while cost pressures will. To this end, we note our revised FY24E PPOP growth is flat. Therefore, with the stock trading on 6.5x PPOP earnings, broadly in line with its 15-yr average, stay Neutral.

In light of the above, the broker sees the ANZ share price as fairly valued now and prefers other options in the sector.

The post Goldman Sachs gives its verdict on the ANZ share price appeared first on The Motley Fool Australia.

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• 5 big ASX announcements making news this week
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• Why ANZ, Australian Clinical Labs, Core Lithium, and Kogan are sinking today
• Everything you need to know about the latest ANZ dividend

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 Vanguard Australian Shares Index ETF (ASX: VAS) is arguably the most popular exchange-traded fund (ETF) on the ASX.

But the BetaShares Australia 200 ETF (ASX: A200) is also popular, especially among retail investors.

The two ASX ETFs are similar in that they both track an index, providing broad-based exposure to Australian shares.

But there are some distinct differences. Let’s take a look.

Underlying benchmark

The A200 aims to track the S&P/ASX 200 Index (ASX: XJO), the most prominent index on the ASX. The ASX 200 comprises the ASX’s largest 200 companies, weighted in terms of market capitalisation.

In contrast, the VAS ETF aims to track the S&P/ASX 300 Index (ASX: XKO), which, as its name suggests, comprises the top 300 companies.

Holdings and weightings

Since these two ASX ETFs have different benchmarks, they also have different holdings and weightings.

Naturally, the VAS ETF has around 300 holdings, while the A200 ETF has 200.

But since both of these indices are weighted in terms of market capitalisation, they mirror each other more closely than I thought. 

Both ETFs share the same top 10 holdings in identical order, with very similar weightings, as shown below.

	VAS ETF weightings	A200 ETF weightings
BHP Group Ltd (ASX: BHP)	9.9%	9.8%
Commonwealth Bank of Australia (ASX: CBA)	7.8%	8.0%
CSL Limited (ASX: CSL)	6.9%	7.1%
National Australia Bank Ltd (ASX: NAB)	4.6%	4.7%
Westpac Banking Corp (ASX: WBC)	3.7%	3.7%
Australia and New Zealand Banking Group Ltd (ASX: ANZ)	3.4%	3.5%
Woodside Energy Group (ASX: WDS)	3.0%	3.1%
Macquarie Group Ltd (ASX: MQG)	2.8%	2.9%
Wesfarmers Ltd (ASX: WES)	2.5%	2.5%
Telstra Corporation Ltd (ASX: TLS)	2.3%	2.3%

Sector exposure is also very similar across these two ASX ETFs, with some minute differences. You can check it out for yourself below. 

	VAS ETF weightings	A200 ETF weightings
Financials	28.0%	28.9%
Materials	23.5%	23.1%
Healthcare	10.5%	10.6%
Consumer discretionary	6.5%	6.3%
Energy	6.3%	6.3%
Real estate	6.0%	6.2%
Industrials	6.0%	5.8%
Consumer staples	5.0%	4.9%
Communication services	3.9%	3.9%
Other	4.3%	3.8%

VAS wins on popularity

The VAS ETF had a whopping $10.8 billion invested in it at the end of September. This makes VAS the largest ETF on the ASX by a country mile.

Vanguard also offers this product in the form of a retail fund and a wholesale fund. So in total, this strategy ended the month with assets under management of $26.6 billion.

The A200 ETF is a minnow in comparison but it’s BetaShares’ largest ASX ETF, slightly edging out the BetaShares Nasdaq 100 ETF (ASX: NDQ). At the end of September, A200 had net assets of $2.4 billion.

The ASX’s monthly investment products update shows that the VAS ETF enjoyed $242 million of net inflows during September. Meanwhile, the A200 ETF brought in $72 million of net flows.

A200 takes the cake on fees

The VAS ETF incurs yearly management fees of 0.10%. So, A200 takes the cake here with annual fees of 0.07%.

Based on a $10,000 investment, this would spin up fees of $10 and $7, respectively.

As I’ve discussed previously, fees compound over time and can eat into investment returns. But given that we’re dealing with very small differences here, the effect isn’t nearly as pronounced.

To demonstrate, let’s use $50,000 portfolios earning annual returns of 7%. One invests in VAS and the other invests in A200. After 25 years, the VAS portfolio would be worth around $215,000, while the A200 portfolio would be worth roughly $230,000.

But this hypothetical example assumes both ETFs have identical returns, which certainly isn’t the case…

Which ASX ETF has performed better? 

So, last but not least, let’s take a look at how the VAS ETF has performed compared to the A200 ETF.

It would be remiss of me not to mention that past performance is not a reliable indicator of future performance. But in my mind, it’s still valuable insight.

In the last year, the VAS ETF has dropped 7.94% while A200 has fared slightly better, sliding by 7.21%.

Zooming out across the last three years, VAS has delivered an average annual return of 2.81%, again slightly lagging A200, which has achieved an average annual return of 2.92%.

Over the last five years, VAS has served up an average return of 6.83% per annum. Given that the A200 ETF was launched in 2018, it doesn’t have a five-year track record. However, its benchmark ASX 200 index has averaged a return of 7.00% per annum over the last five years.

So, the A200 ETF appears to have historically performed slightly better than the VAS ETF.

Personally, I think both of these ASX ETFs are top choices for an investment portfolio. However, given their similarities, I’d be choosing one or the other, not both.

The post Here’s how the Vanguard Australian Shares ETF (VAS) stacks up against the BetaShares Australia 200 ETF (A200) appeared first on The Motley Fool Australia.

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More reading

• 5 things I look at when buying an ASX ETF
• Is the Vanguard Australian Shares (VAS) ETF the most popular ETF to buy?
• These could be the ETFs to buy for big dividends
• The Vanguard Australian Shares ETF has doled out record dividends this year. Here’s why
• The Vanguard Australian Shares Index ETF dividend is being paid today. Here’s the lowdown

Motley Fool contributor Cathryn Goh has positions in BETANASDAQ ETF UNITS and BetaShares Australia 200 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended BETANASDAQ ETF UNITS and CSL Ltd. The Motley Fool Australia has positions in and has recommended BETANASDAQ ETF UNITS, Telstra Corporation Limited, and Wesfarmers Limited. The Motley Fool Australia has recommended Macquarie Group Limited and Westpac Banking Corporation. 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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Flight Centre Travel Group Ltd (ASX: FLT) shares have lifted 14% so far this month.

The travel company’s share price has risen from $14.22 at market close on 30 September to $16.25 at the time of writing.

Let’s take a look at how a $1,000 investment in this ASX travel share would be faring now.

Taking off

If you had invested $1,000 in Flight Centre after market close on 30 September, you would be on a winner.

With a $1,000 investment, you would have walked away with 70 Flight Centre shares with $4.60 left over.

Now, these shares are fetching $16.25 per share based on the share price at the time of writing. So this investment would now be worth $1,137.50.

So in less than a month, you would have made $137.50 from a $1,000 investment.

Looking at the bigger picture, on 19 March 2020 — just as COVID-19 began to turn the world upside down — Flight Centre shares were fetching just $8.921. At this time, with $1,000, you would have gained 112 shares with 85 cents left over. This investment would now be worth $1,820.

This means, if you had held onto the shares through the turbulent times, you would still be ahead.

Flight Centre has not paid a dividend since 2019. In March 2020, Flight Centre cancelled its interim dividend amid COVID-19 border closures.

Flight Centre share price snapshot

Flight Centre shares have lost around 8% in the year to date, while they have fallen 19% in the past year.

For perspective, the S&P/ASX 200 Index (ASX: XJO) has slid more than 8% in the year to date.

The ASX travel share has a market capitalisation of nearly $3.3 billion.

The post If you’d spent $1,000 buying Flight Centre shares at the start of October, guess how much you’d have now appeared first on The Motley Fool Australia.

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More reading

• Why is the Qantas share price so volatile today?
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• Are Flight Centre shares worth buying in October?

Motley Fool contributor Monica O’Shea has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel 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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The Nitro Software Ltd (ASX: NTO) share price is on ice on Friday as the company prepares to receive and respond to an improved takeover offer from Potentia Capital Management.

The bidder, which is also the company’s largest shareholder, plans to put forward a $1.80 per share acquisition offer. That’s 13.9% higher than its previously rejected $1.58 per share bid.  

The $1.80 per share bid values the tech company at around $440 million.

The Nitro share price last traded at $1.73. It will return to trade on the company’s response to Potentia’s intended bid or Monday’s open, whichever comes first.

The All Ordinaries Index (ASX: XAO) constituent was recently rumoured to be gearing up to announce an acquisition offer this morning.

Let’s take a closer look at Potentia’s latest move in the battle for control of the document productivity company.

Nitro share price frozen amid new takeover bid

The Nitro share price was halted this morning after the company received word of Potentia’s intention to put forward a new and improved off-market takeover bid. And this time it’s final.

The firm says its anticipated offer will only be bumped if another proposal emerges or its granted full due diligence.

Potentia has a 19.8% stake in the All Ords tech stock. It has vowed to vote its stake against any competing offers.

The $1.80 cash offer represents a 59.3% premium to Nitro’s undisturbed share price of $1.13 on 29 August. The stock last traded above $1.80 in February and boasts a 52-week high of $4.

In rejecting the firm’s previous offer, the company said the bid was “highly opportunistic … at a time of significant share market volatility and cyclical weakness in global technology company valuations.”

Potentia managing director Andrew Gray commented on the firm’s anticipated offer, saying:

This bid is a demonstration of our commitment to Nitro, its team, and to the strategy they are pursuing under the strong leadership of [co-founder and CEO] Sam Chandler and stewardship of the board.

We are specialist investors in the technology and software sector, and we have been on the same journey of building great companies which Sam and his team are currently treading. We believe we have real value to add as partners in their growth.

The firm said it intends to lodge its $1.80 per share bid for Nitro today. It expects the offer to open in around a fortnight.

The post Nitro share price halted amid improved takeover bid 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 recommended Nitro Software 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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The Macquarie Group Ltd (ASX: MQG) share price is rocketing 3% after the S&P/ASX 200 Index (ASX: XJO) giant revealed a record interim dividend.

The financial services provider announced a $3 per share first half dividend alongside its earnings for the six months ended 30 September this morning.

The Macquarie share price is launching higher on the back of the release, gaining 2.98% to trade at $171.51.

Let’s take a closer look at the payout Macquarie investors can expect to receive in coming weeks.

All you need to know about Macquarie’s monster dividend

Invested in Macquarie shares? You’ll be glad to learn of the S&P/ASX 200 Financials Index (ASX: XFJ)’s giants latest interim dividend – 10% higher than that of the prior corresponding period (pcp).

The $3 per share dividend also represents its largest half-year offering ever.

Like that of the pcp, the upcoming interim dividend is 40% franked and represents a 50% payout ratio.

The financials favourite posted $8.6 billion of net operating income for the first half of financial year 2023.

Macquarie’s latest payout sees it trading with an approximate 3.79% trailing dividend yield. That’s considering its share price at the time of writing and its previous $3.50 final dividend.

Anyone wanting to get in on the company’s upcoming payout has a little over a week to do so.

It will trade ex-dividend on 7 November. That means investors buying the stock from then on will miss out on the offering. After that, shareholders can expect to receive their dividends from 13 December.

Macquarie will also be offering its dividend reinvestment plan (DRP) for the interim dividend. Participating shareholders will receive their payout in the form of new shares, rather than cash.

The post Everything you need to know about the super-sized Macquarie dividend appeared first on The Motley Fool Australia.

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More reading

• Why is the Macquarie share price charging 4% higher today?
• Macquarie share price on watch after first-half earnings beat
• 5 things to watch on the ASX 200 on Friday
• 22 high-yield ASX dividend shares Wilsons is targeting
• Is the Macquarie share price a buy ahead of the bank’s results on Friday?

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 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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The Macquarie Group Ltd (ASX: MQG) share price is on course to end the week on a positive note.

In morning trade, the investment bank’s shares are up approximately 4% to $172.81.

Why is the Macquarie share price pushing higher?

The Macquarie share price is rising this morning after investors responded positively to the release of the company’s half year results.

For the six months ended 30 September, Macquarie reported an 11% increase in net operating income and a 13% increase in profit after tax to $2,305 million.

The latter was 6.8% ahead of the market consensus estimate of $2,157 million for the half, which helps explain the outperformance of the Macquarie share price today.

What were the drivers of the result?

Macquarie’s strong half was driven by its Banking and Financial Services (BFS), Commodities and Global Markets (CGM), and Macquarie Asset Management (MAM) businesses, which delivered double-digit growth in profit contributions.

This offset a softer performance from its Macquarie Capital business, which posted a 12% decline in its profit contribution compared to the prior corresponding period.

Also potentially giving the Macquarie share price a boost was management’s positive outlook commentary. Although, CEO Shemara Wikramanayake acknowledges the uncertain economic environment, she believes Macquarie is well-placed to prosper. Wikramanayake said:

Macquarie remains well-positioned to deliver superior performance in the medium term. This is due to our deep expertise in major markets; strength in business and geographic diversity and ability to adapt the portfolio mix to changing market conditions; an ongoing program to identify cost saving initiatives and efficiency; ongoing technology spend across the Group; a strong and conservative balance sheet; and a proven risk management framework and culture.

Broker response

Analysts at Goldman Sachs were impressed with the half. They commented:

MQG’s 1H23 NPAT was up +13% on pcp to A$2,305 mn and +6% above GSe and Visible Alpha consensus. The beat versus our forecasts was driven by lower expenses (-8% lower than GSe), partially offset by lower revenues (5% lower than GSe), largely on account of trading income. MQG’s surplus capital position improved to A$12.2 bn (A$10.7 bn at FY22).

However, overall, the broker isn’t expecting any major changes to consensus estimates for the full year. It explained:

Overall, we think the outlook commentary is unlikely to drive material changes to consensus expectations for FY23 (A$4.2 bn, per Visible Alpha consensus), albeit profit may need to be reallocated from the higher multiple Macquarie Asset Management (MAM) division, into the lower multiple Commodities and Global Markets (CGM) division.

The post Why is the Macquarie share price charging 4% higher today? appeared first on The Motley Fool Australia.

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More reading

• Everything you need to know about the super-sized Macquarie dividend
• Macquarie share price on watch after first-half earnings beat
• 5 things to watch on the ASX 200 on Friday
• 22 high-yield ASX dividend shares Wilsons is targeting
• Is the Macquarie share price a buy ahead of the bank’s results 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 recommended 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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