Category: Stock Market

The Mineral Resources Limited (ASX: MIN) share price flew 3.1% higher in early trading to an intraday high of $85.32.

It has since dropped to $83.98, a gain of 1.49% on yesterday’s close and is outperforming the S&P/ASX 200 Index (ASX: XJO), which is barely in the green today, up 0.09% at the time of writing.

Mineral Resources shares are having a great week with the highlight being a new 52-week peak.

Let’s take a look at what’s been happening with the $15 billion diversified miner.

Broker buys despite lofty Mineral Resources share price

According to The Australian, broker Wilsons has added Mineral Resources to its Focus Portfolio. The broker has allocated 3% of its portfolio to the ASX mining share.

The article says that Wilsons considers Mineral Resources to be one of the highest-quality mining companies on the ASX.

It has four business segments — iron ore, energy (gas), lithium, and mining services.

What has really piqued the broker’s interest is the lithium segment.

There was speculation earlier this year that Mineral Resources may spin off its lithium business.

Wilsons notes that if this were to occur, it could provide substantial returns because the segment is “markedly undervalued” at the moment.

Mineral Resources has a stake in two of the country’s largest hard-rock lithium mines.

Their two mines are Mt Marion mine and Wodgina mine, both in Western Australia.

Mineral Resources holds AGM today

The mining giant held its annual general meeting (AGM) today and delivered an investor presentation.

It noted that it is the world’s largest crushing contractor and a global top five lithium producer.

Over the next two years, the company plans to double production at Mt Marion from 450,000 tonnes of lithium spodumene concentrate per annum to 900,000 tonnes.

At Wodgina, it plans to commence Train 3 and approve and construct Train 4.

In the presentation, Mineral Resources said it operates 29% of the world’s hard rock lithium supply.

The company noted: “Production-ready hard rock lithium deposits are rare.”

Mineral Resources share price snapshot

The mining stock hit a new 52-week high price of $85.36 on Monday as lithium stocks enjoyed a dream run on the back of news that China is relaxing its COVID-19 restrictions.

There was also news that Australia is exploring a lithium mine and processing partnership with Indonesia.

According to reporting by The Australian, the partnership could make the two countries the dominant global supplier of electric vehicle batteries.

As my Fool colleague Sebastian notes, it’s been an incredible couple of years for Mineral Resources.

Back in November 2020, the Mineral Resources share price was $27. It has tripled since then.

In recent weeks, the Mineral Resources share price has steadily increased following the release of the company’s quarterly activities report on 26 October.

In the report, the company reaffirmed its FY23 guidance.

The post Why is the Mineral Resources share price beating the ASX 200 on Thursday? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Why did ASX lithium shares have a dream run on Monday?
• 4 ASX 200 shares to play the global decarbonisation theme: fund manager
• 3 ASX 200 lithium shares smashing all-time highs on Friday
• Why have Minerals Resources shares hit two new all-time highs this week?

Motley Fool contributor Bronwyn Allen 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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When you buy an ASX dividend share, many investors are offered a choice. Take your dividends as cash, or participate in a dividend reinvestment plan (DRP). Of course, not all ASX shares offer DRPs to investors.

But for those who do, investors have a choice between receiving their dividend in cash, or instead getting additional shares in the company to the value of the dividend payment.

Why would some investors choose the DRP path? Well, DRPs usually offer these additional shares without any brokerage costs or other fees. Thus, the dividends are ‘rolled back’ into the investor’s portfolio seamlessly, ensuring an even greater dividend payment next time around (assuming the company at least keeps its dividend payments steady).

Yes, you still have to pay tax on your dividend, even if you decide to reinvest your shares. And yes, you still get the franking credits as well.

Many investors enjoy this hands-off approach. It can fully harness the wonderful power of compound interest over time, and ensures there are no hard choices about where to invest one’s dividends.

But then again, there’s no cash payment. And having the flexibility and liquidity that this passive income can provide is also a wonderful thing. So can investors have their cake and eat it too?

Well, in many cases, yes.

To DRP or not to DRP your ASX dividends? Why not both!

If a company offers a DRP, chances are it will also offer what is known as a partial DRP. This means you can indeed have your cake and eat it too.

A partial DRP allows investors to allocate some of a dividend payment to the DRP, while receiving the remainder as a cash payment. For example, you may decide to have half of your dividend go towards new shares, and the other half come your way as a cash payment.

So which ASX shares offer partial DRPs? Well, there are many.

For one, all four of the major ASX bank shares offer both full DRPs and partial DRPs. As do Telstra Group Ltd (ASX: TLS), Woolworths Group Ltd (ASX: WOW), and BHP Group Ltd (ASX: BHP). Along with CSL Ltd (ASX: CSL), Coles Group Ltd (ASX: COL), Woodside Energy Group Ltd (ASX: WDS), and Wesfarmers Ltd (ASX: WES).

In fact, it’s rather hard to find a large ASX dividend share that doesn’t offer a DRP with full or partial participation. Some notable exceptions include Washington H. Soul Pattinson and Co Ltd (ASX: SOL), Brickworks Limited (ASX: BKW), and Goodman Group (ASX: GMG). Not to mention any ASX share that doesn’t pay a dividend, of course.

At the end of the day, receiving dividends as cash or as additional shares as part of a DRP is a personal choice. But it’s sure nice to have the option.

The post How to have your ASX 200 dividend cake and eat it too appeared first on The Motley Fool Australia.

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More reading

• What’s going on with ASX 200 mining shares on Thursday?
• Here’s how much dividend income $20,000 worth of Telstra shares will get you today
• OZ Minerals shares remain halted ahead of potential BHP takeover offer update
• 3 passive ASX income machines to help fund your retirement
• Which are the best ASX mining shares to buy now for 2023?

Motley Fool contributor Sebastian Bowen has positions in CSL Ltd., Telstra Corporation Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks, CSL Ltd., and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks, COLESGROUP DEF SET, Telstra Corporation Limited, Washington H. Soul Pattinson and Company Limited, and 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 Zip Co Ltd (ASX: ZIP) share price has had a top run in the past week.

Zip shares have surged 31% since market close on 10 November to the current price of 82 cents per share. For perspective, the S&P/ASX 200 Index (ASX: XJO) has climbed 2.6% in the same time frame.

So what is going on with this ASX buy now, pay later (BNPL) share?

What’s happening with Zip?

Zip shares soared 18% on 11 November alone. Investors bought up Zip shares amid general sector strength.

This followed an incredible night on US markets, where the S&P 500 Index (SP: .INX) lifted 4.7% and the NASDAQ-100 (NASDAQ: NDX) soared 7.5% on better-than-expected inflation data.

Zip shares surged 12% on Wednesday and are currently up a further 4.5% today.

A positive business update from fellow BNPL share Sezzle Inc (ASX: SZL) may have boosted investor sentiment in the Zip share price on Wednesday. Sezzle reported it is making significant progress towards profitability.

Zip’s over-the-counter market listing in the US (OTCMKTS: ZIZTF) soared 17% to 55 US cents overnight.

US retail sales lifted more than expected in October, Reuters reported today. This could be providing Zip shareholders with confidence today, given Zip’s BNPL solution can be used for in-store payments.

Zip CEO and co-founder Larry Diamond moved to the US last month to take advantage of “significant opportunity” for the company in America. Diamond said:

It is important to be there to demonstrate what we have done in Australia. There is still a significant opportunity for fintech in the US, as US banks are asleep at the wheel.

Diamond also said in October he believes Zip can be the next Commonwealth Bank of Australia (ASX: CBA). He said there is “no reason why deposits and mortgages can’t be inside Zip, if customers trust us”.

Zip share price snapshot

The Zip share price has descended 86% in the past year, while it has fallen 81% in the year to date.

In comparison, the ASX 200 has shed more than 3% in the past year.

Zip has a market capitalisation of around $554 million based on the current share price.

The post Boom! Why has the Zip share price soared 31% in a week? appeared first on The Motley Fool Australia.

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More reading

• 3 ASX All Ordinaries shares having a cracker session on Thursday
• Guess which ASX All Ords share is leaping 22% on ‘significant progress towards profitability’
• Up 18% today: Can the Zip share price really fight City Hall?
• Why Accent, Block, Nufarm, and Zip shares are racing higher
• Wowsers: Why the Zip share price is up 18% today

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 positions in and has recommended ZIPCOLTD FPO. 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 a rough day on the market for many S&P/ASX 200 Index (ASX: XJO) mining shares.

The S&P/ASX 200 Materials Index (ASX: XMJ) is down 0.9% right now, making it one of the market’s worst performing sectors. That’s reflected in the share prices of some of the ASX 200’s most iconic miners:

• The BHP Group Ltd (ASX: BHP) share price is down 1.4%, trading at $43.83
• That of Rio Tinto Limited (ASX: RIO) is posting a greater tumble. It’s fallen 1.7% to $106.23
• Finally, shares in Fortescue Metals Group Limited (ASX: FMG) are defying the downturn, lifting 0.25% to $19.90

For comparison, the ASX 200 has lifted 0.3% at the time of writing.

So, what might be going on with ASX 200 mining shares today? Let’s take a look.

Is this weighing on ASX 200 mining shares today?

The materials sector is falling on Thursday, weighed down by some of the ASX 200’s biggest mining shares.

Interestingly, there’s been no news from the mining goliaths to explain today’s moves. Though, it’s widely speculated that OZ Minerals Limited (ASX: OZL)’s continued freeze is related to another BHP takeover bid.

Iron ore futures were relatively stable overnight, lifting 0.1% to US$92.34 a tonne. It was a worse story for some base metals, with nickel tumbling 9.1% and copper slipping 0.4%.

Looking more broadly, today’s slump comes amid continued concerns regarding a mining tax under consideration by the federal government.

The mooted tax would relate to earnings from thermal coal and gas exports. It is being considered as a bid to reduce energy costs.

NSW Minerals Council CEO Stephen Galilee previously said, if implemented, its “unlikely” the tax would be temporary. He also said it could be extended to other sections of the mining industry over time.

Though, treasurer Jim Chalmers has said the government’s preferred solution would be regulatory, rather than tax-based.

Any move to tax energy commodities would likely impact BHP more than Rio Tinto or Fortescue. The former operates seven coal mines in Queensland.

NSW Minerals Council, the Minerals Council of Australia, and Queensland Resources Council (QRC), all of whom have slammed the mooted tax, are banding together to launch an advertising campaign against the move today, The Australian reports. QRC CEO Ian Macfarlane commented yesterday:

Introducing a new mining tax on the resources sector, on top of the billions in taxes and charges coal and gas companies already pay to state and federal governments, will kill off investor interest in future resources projects in Australia, it’s as simple as that.

Such talk might be turning investors’ attention to ASX 200 mining shares on Thursday.

The post What’s going on with ASX 200 mining shares on Thursday? appeared first on The Motley Fool Australia.

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More reading

• Why is Rio Tinto share price rolling downhill today?
• OZ Minerals shares remain halted ahead of potential BHP takeover offer update
• Which are the best ASX mining shares to buy now for 2023?
• 5 things to watch on the ASX 200 on Thursday
• 3 ASX mining shares on ice today pending big news

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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Data#3 Limited (ASX: DTL) shares represent a leading opportunity, according to a fund manager. The S&P/ASX 300 Index (ASX: XKO) technology share has jumped over the last few months, but it could keep going strong.

Like many businesses, the share price suffered in the middle of 2022, with a hefty drop during June. But, despite being a technology business, the Data#3 share price is up more than 10% in 2022 to date.

It describes itself as a leading Australian IT services and solutions provider. Its offering spans cloud, the ‘modern workplace’, security, data, analytics and connectivity.

In a recent presentation, the business outlined that it’s in a good position because, according to Gartner, Australian IT spending is growing at 6.5% per annum, with cloud computing continuing to grow at an accelerated rate.

Data#3 says it’s aligned with market-leading vendors such as Microsoft, Cisco, HP and Dell. It’s continuing to gain market share and the company said “there is still plenty of opportunity”.

So, that’s what the ASX 300 share does. Let’s have a look at what a fund manager thinks about the business.

Bullish opinion on the Data#3 share price

In the latest monthly update for the listed investment company (LIC) WAM Research Limited (ASX: WAX), the investment team revealed why they think that Data#3 can outperform expectations of the market.

Wilson Asset Management noted that in the 2022 annual general meeting (AGM) held in October, Data#3 said that it has seen a strong start to the financial year with “solid” FY23 first quarter performance thanks to an order backlog from FY22 and new contracts and projects.

Data#3 warned it’s expecting the global supply constraints to keep going throughout the rest of FY23. But it is expecting that the constraints will “ease” in the coming months.

WAM highlighted that the ASX 300 share is expecting the FY23 first-half pre-tax profit will be between $21 million and $25 million. This would be an improvement on last year’s $18.5 million figure.

There is an expectation that the backlog of orders will not be “materially different” to the backlog at the start of FY23.

The fund manager concluded:

As a leading provider of digital transformation products and services, Data#3 is well-positioned to outperform market expectations over the medium-term.

Foolish takeaway

The Data#3 share price has gone up around 7% over the last month. With the ASX 300 business steadily growing the dividend for investors, it could be an interesting one to consider for total shareholder returns.

The post This ASX 300 share could keep delivering ‘strong performance’: fund manager appeared first on The Motley Fool Australia.

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More reading

• 3 ASX All Ordinaries shares having a cracker session on Thursday
• Why is Rio Tinto share price rolling downhill today?
• ASX lithium shareholders rejoice! Expert tips lithium price to hit $100K
• Here’s how much dividend income $20,000 worth of Telstra shares will get you today
• Why is Wilsons selling down its ASX 200 bank shares?

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 Cisco Systems and Microsoft. 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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Three All Ordinaries Index (ASX: XAO) shares are setting a brisk pace today.

Heading into the lunch hour, the All Ordinaries is up 0.3%.

Meanwhile, the Zip Co Ltd (ASX: ZIP) share price is up 4.5%, the Cettire Ltd (ASX: CTT) share price has gained 3.9%, and Argosy Minerals Limited (ASX: AGY) shares are up 6.1%.

Here’s what’s spurring investor interest in these All Ordinaries shares on Thursday.

Why is the Zip share price leaping higher?

With today’s intraday gains factored in, the Zip share price is up 17% since Tuesday’s closing bell and up a whopping 36% over the past month.

There’s no fresh price-sensitive news out from the All Ordinaries buy now, pay later (BNPL) share. So, it looks like investors are continuing to bid up the share price on hopes the company is indeed back on the road towards profitability.

BNPL shares have also broadly benefited in recent weeks following the lower-than-expected inflation data out of the United States. That data has raised hoped of fewer rate hikes from the US Fed. And, as you’re likely aware, BNPL shares have been walloped this year as the Fed, the Reserve Bank of Australia, and central banks the world over began to ratchet rates higher for the first time in a decade.

Which brings us to our second All Ordinaries share having a cracker of a day today, online luxury goods retailer Cettire.

Cettire share price lifts on strong growth trajectory

The Cettire share price is outperforming the All Ordinaries after the company confirmed at today’s annual general meeting that it’s continuing to experience strong trading momentum.

In October, the company reported that its sales revenue grew 82% compared to the prior corresponding period.

Commenting on the company’s performance, Cettire CEO Dean Mintz said:

Our business has started Q2 very strongly driven by a seasonal upswing in traffic and AOV and effective marketing execution. It is pleasing to see continued robust profit performance as we leverage our lean operating cost structure with revenue growth and attractive unit economics.

This All Ordinaries share is riding the lithium wave

Our third outperforming All Ordinaries share is ASX lithium explorer Argosy Minerals.

There have been no new price-sensitive releases from the company since 1 November, but the miner has some good buying momentum going.

Over the past month, the All Ordinaries share has soared 41%, and it’s up 110% year to date.

Argosy has been a clear beneficiary of the soaring demand for lithium. The battery-critical metal is trading near all-time highs amid booming growth in global electric vehicle production. And today’s trading action indicates investors believe lithium demand isn’t about to dry up anytime soon.

The post 3 ASX All Ordinaries shares having a cracker session on Thursday appeared first on The Motley Fool Australia.

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More reading

• Guess which ASX All Ords share is leaping 22% on ‘significant progress towards profitability’
• Up 18% today: Can the Zip share price really fight City Hall?
• Why Accent, Block, Nufarm, and Zip shares are racing higher
• Wowsers: Why the Zip share price is up 18% today
• Down 60% since late July, can Zip shares really ’emerge stronger from challenging times’?

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 positions in and has recommended ZIPCOLTD FPO. The Motley Fool Australia has recommended Cettire 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 Rio Tinto Limited (ASX: RIO) share price is out of form on Thursday.

In afternoon trade, the mining giant’s shares are down almost 2% to $106.28.

This compares unfavourably to the ASX 200 index, which is up 0.3% at the time of writing.

What’s going on with the Rio Tinto share price?

The Rio Tinto share price is falling today following a poor night of trade for base metals.

This has put pressure on the entire materials sector, which has led to the S&P/ASX 200 Materials index falling 0.8% this afternoon.

This makes the sector the worst performer on the Australian share market on Thursday.

What’s happening?

According to CommSec, base metal prices tumbled after data revealed that Chinese new home prices have fallen sharply. It explained:

Base metal prices were weaker on Wednesday with nickel recording a 9.1% decline. Copper also fell in response to data showing that Chinese new home prices recorded the biggest decline in more than seven years. But supporting copper is an upcoming strike announced by workers at Chile’s Escondida, the world’s largest copper mine.

Is this a buying opportunity?

A recent note out of Goldman Sachs reveals that its analysts have a buy rating and $112.60 price target on the mining giant’s shares.

Based on the current Rio Tinto share price, this implies modest potential upside of 6% for investors.

However, let’s not forget dividends. Goldman is expecting the miner to pay a US$4.20 (A$6.23) per share dividend in FY 2023. This represents a 5.9% fully franked dividend yield, which stretches the total potential return to almost 12% for investors over the next 12 months.

The post Why is Rio Tinto share price rolling downhill today? appeared first on The Motley Fool Australia.

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More reading

• Why is the Rio Tinto share price having such a cracking run on Monday?
• Why are ASX 200 mining shares going nuts on Monday?
• China’s property crash has decimated the iron ore price. So what’s the outlook for Rio Tinto shares?
• Leading brokers name 3 ASX shares to buy today
• Why are ASX 200 mining shares bolting out the gates on Monday?

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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An international lithium market analyst has predicted the lithium hydroxide price could reach $100,000 per tonne.

ASX lithium shares include:

Sayona Mining Ltd (ASX: SYA) – up 48% in a year

Pilbara Minerals Ltd (ASX: PLS) – lifted 109% in a year

Core Lithium Ltd (ASX: CXO) – up 160% in a year

Allkem Ltd (ASX: AKE) – risen 58% in a year

Lake Resources N.L. (ASX: LKE) – climbed 14% in a year

What’s ahead?

Speaking on 3AW, Global Lithium LLC founder and president Joe Lowry said he “absolutely” believes high lithium prices can be sustained. He said:

It’s all supply and demand, and the EV [electric vehicle] market is taking off, driving demand.

There’s really nothing in the cards in the few years to bring the price back to the old level.

Asked if he believes prices as high as US$80,000 a tonne for lithium hydroxide can be retained, Lowry said:

There’s nothing really to keep it at the level it is today if the pressure on supply continues. I think it could touch 100, in that range.

Lithium hydroxide on the London Metals Exchange (LME Lithium Hydroxide CIF Fastmarkets MB) is fetching US$83,500 a tonne at last look.

Allkem this week advised of maiden lithium hydroxide production from the Naraha Lithium Hydroxide plant in Japan. Allkem has a 75% interest in this project, which is a joint venture with Toyota Tsusho Corporation.

Meanwhile, Pilbara Minerals is in a joint venture with Korean steel giant POSCO to develop a 43ktpa lithium hydroxide chemical processing facility.

Sayona is planning to develop a spodumene conversion facility at its North American Lithium (NAL) operation to produce lithium hydroxide or lithium carbonate.

What about Western Australia?

Lowry also tipped big things for Western Australia. He said in the last five years it has become “the most significant lithium province in the world”. He added:

I think WA will continue to dominate for the foreseeable future.

What else?

ASX lithium shareholders have had a turbulent week, with lithium shares falling dramatically on Tuesday after lifting on Monday.

Today, lithium shares are a mixed bag. For example, Pilbara Minerals shares are climbing 1.22% and Allkem shares are rising 1.51%. However, Core Lithium shares are down 2.86%, Sayona Mining shares are falling 2.13% and the Lake Resources shares are descending 0.47%. Pilbara reported positive news from its spodumene concentrate auction on the Battery Material Exchange (BMX) today.

Macquarie analysts this week said they remain optimistic on the lithium price despite major falls earlier this week. Analysts, quoted by the Australian Financial Review, said:

Despite near-term future price volatility, we believe buoyant lithium prices present potential for valuation upside to all lithium names under our coverage universe.

The post ASX lithium shareholders rejoice! Expert tips lithium price to hit $100K appeared first on The Motley Fool Australia.

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More reading

• Allkem share price up on broker upgrade: Analyst says it’s too soon ‘to underweight the sector’
• Why is the Pilbara Minerals share price pushing higher today?
• Sayona Mining share price slumps despite ‘major acquisition’
• Guess which ASX 200 lithium director just snapped up $250,000 worth of their company’s shares
• Is ASX 200 share Lake Resources selling any lithium yet?

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

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Telstra Group Ltd (ASX: TLS) is one of those ASX 200 shares that is famous for its dividends. The ASX telco is an ASX dividend stalwart and can be found in many a dividend investor’s portfolio.

That comes from the relatively large and consistent dividend payments Telstra shares have made ever since they first listed on the ASX back in the 1990s. But Telstra hasn’t gotten through its three decades and counting on the ASX without some hiccups along the way.

Investors were mightily unimpressed back in 2018 and 2019 when Telstra delivered sharp cuts to its annual dividend. In fact, 2022 has been the first year since 2019 that Telstra has raised its annual dividend.

Saying that, it did manage to keep its dividends steady throughout 2020 and 2021. Both were COVID-affected years which saw many other ASX blue-chip shares slash their dividend payouts.

So with all of this in mind, let’s check out what kind of dividend income an investor would enjoy from Telstra shares today.

How much dividend income would $20,000 worth of Telstra shares bag you?

Let’s start by assuming an investor owns $20,000 worth of Telstra shares. At today’s price of $3.92, a $20,000 investment would get an investor 5,102 Telstra shares, with a little change left over.

Over the past 12 months, Telstra has given its investors the typical two dividend payments. The first was the fully franked interim dividend of 8 cents per share that we saw back in April. Our investor’s 5,102 shares would have yielded a payment of $408.16 for this dividend.

The second was the 8.5 cents per share final dividend, also fully franked, that was paid out in September. This would have resulted in $433.67 in dividend income.

So if an investor owned $20,000 worth of Telstra shares right now, they would have enjoyed a total of $841.83 in dividend income from their shares this year. That equates to a dividend yield of 4.21% on the current Telstra share price.

If we factor in the value of Telstra’s full franking credits, this yield grosses up to 6.01%.

The post Here’s how much dividend income $20,000 worth of Telstra shares will get you today appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in Telstra Corporation Limited. 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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S&P/ASX 200 Index (ASX: XJO) bank shares have gotten a lot of attention in 2022 as interest rates began to rise.

Faced with soaring inflation, the Reserve Bank of Australia (RBA) hiked the official cash rate for the first time in more than a decade on 4 May, taking the rate from the historic low of 0.10% to the still quite low 0.35%.

The RBA has hiked rates at every monthly meeting since then, taking the cash rate to today’s 2.85%. Several more hikes are expected over the coming months.

This casts particular light on ASX 200 banks, as they operate in one of the few sectors where rising interest rates can help their performance. That’s because moderately higher rates enable banks to increase their net interest margins.

On the flip side, if rates rise too high it could negatively impact ASX 200 banks by increasing their levels of non-performing loans and decreasing the number of new home loans.

Which brings us to Wilsons latest portfolio reshuffle.

Why is Wilsons selling down its ASX 200 bank shares?

Wilsons is lightening its holdings of three ASX 200 banks. Namely Australia and New Zealand Banking Group Ltd (ASX: ANZ), National Australia Bank Ltd (ASX: NAB) and Westpac Banking Corp (ASX: WBC).

The broker’s analysts said (courtesy of The Australian), “After the banks’ reporting season over the past few weeks, we have become increasingly cautious on the banks.”

The analysts believe the banks have likely reached a peak in net interest margins. They also pointed to a slowdown in the Aussie economy and housing credit amid rapidly rising interest rates. All up they said this means the earnings estimates for the banks are “too optimistic”.

Wilsons’ Focus Portfolio exposure to the ASX 200 banks was reduced to 16.5% as it added a 3% exposure to Mineral Resources Limited (ASX: MIN).

How have the big banks performed in 2022?

Of the three ASX 200 banks Wilsons is trimming, only ANZ has underperformed in 2022, with the share price down 12%. NAB shares meanwhile have gained 4.7% while the Westpac share price is up 7.6% this calendar year.

For some context, the ASX 200 is down 6% year to date.

The post Why is Wilsons selling down its ASX 200 bank shares? appeared first on The Motley Fool Australia.

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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 recommended 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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