Category: Stock Market

The Endeavour Group Ltd (ASX: EDV) share price has outperformed the ASX 200 this year, but could it still be a buy?

Endeavour shares have climbed 4% in the year to date. For comparison, the S&P/ASX 200 Index (ASX: XJO) has fallen nearly 13% since the start of the year.

At the time of writing, its shares are up 1.37% today to $7.01 apiece.

Let’s consider the outlook for the Endeavour share price.

Is Endeavour a buy?

Endeavour is an ASX 200 consumer share operating brands including BWS, Dan Murphy’s, Jimmy Brings and ALH Hotels.

Analysts at Goldman Sachs are recommending investors buy the Endeavour share price. Goldman has an $8.10 price target on the company’s shares. This suggests 15% upside on the current share price.

Despite Tasmania’s recent plan to limit player losses on gaming machines, Goldman does not believe this will impact Endeavour shares.

Endeavour sees this Tasmanian plan as “immaterial” to Endeavour’s earnings and is positive on the company’s long-term growth.

EDV has 150 Gaming Machines in TAS (c. 1.2% of total machines) which we estimate contributes to A$6mn in revenue (0.1% of group).

In our view, while this may offer short-term overhang, we have a more constructive view on EDV’s longer-term growth aspirations as it may accelerate the speed of independent publicans exiting the industry due to the increasing cost and complexity of the operating environment.

Endeavour reported a net profit after tax (NPAT) of $495 million in FY22, up 11.2% on the 2021 financial year. Group sales overall for the company were $11.6 billion, on par with FY21. The company declared a final dividend of 7.7 cents per share.

Endeavour share price snapshot

The Endeavour share price has climbed 3.5% in the past year. In the past month, it has fallen 3%, while it has lost 1.5% in the past week.

For perspective, the ASX 200 has shed 12% in the last year.

Endeavour has a market capitalisation of nearly $12.6 billion based on the current share price.

The post The Endeavour share price has slayed the ASX 200 so far this year. Too late to buy? appeared first on The Motley Fool Australia.

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More reading

• Goldman Sachs tips major upside for the Endeavour share price
• Brokers name 3 ASX shares to buy today
• Attention Endeavour shareholders: Here’s some news on your dividends
• 5 things to watch on the ASX 200 on Friday
• How do Endeavour’s dividends stack up against its old parent Woolworths?

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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The ASX 200 iron ore miners are racing ahead today following a rebound across the broader market.

Yesterday, the S&P/ASX 200 Index (ASX: XJO) fell 1.60% as investors fled for safe-haven assets such as US treasury bonds.

That brought losses on the ASX to around 5% over the last 3 days, signalling the biggest fall since June.

However, it appears the market is taking a breather with a number of popular ASX shares in the green.

Let’s take a look at how the big miners are performing today.

ASX 200 iron ore miners make a comeback

There are a couple of reasons why shares in the ASX 200 iron ore miners are heading north today despite no company announcements.

The S&P/ASX 200 Resources (ASX: XJR) sector is the best performer across the ASX today with a 2.06% gain.

This has catapulted shares in BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) to climb 2.18%, 2.5% and 3.39% respectively.

The strong turnaround for the benchmark index of Australian resource companies comes after falling a mammoth 5.88% yesterday.

Recently, bearish sentiment impacted global markets following the 75-basis points rate hike by the US Fed and concerns about a looming recession.

However, those worries have since been alleviated for now as a number of blue-chip shares are trading in bargain territory.

For example, BHP and Fortescue shares are entering near year-to-date lows, while Rio Tinto is closing in on its 52-week lows.

Furthermore, the price of iron ore appears to have found the bottom at roughly US$100 per tonne.

This comes as China’s previous extended stimulus package is now paying dividends to its ailing construction and manufacturing sectors.

The Asian powerhouse added more than 1 trillion yuan (US$146 billion) of stimulus to fight against its slowing economy.

As reported by Trading Economics, the steel-making ingredient is currently fetching at US$99.50 a tonne.

The post ASX 200 iron ore miners rally as market rebounds on Tuesday appeared first on The Motley Fool Australia.

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More reading

• The Fortescue share price is handily beating the ASX 200 today
• Down 14% in a month, what’s next for the BHP share price?
• 5 things to watch on the ASX 200 on Tuesday
• Why BHP, Costa, Link, and Syrah shares are dropping
• Why is the Rio Tinto share price rolling 5% lower on Monday?

Motley Fool contributor Aaron Teboneras 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 Mineral Resources Limited (ASX: MIN) share price is up today amid a recovery in the materials sector.

The ASX 200 miner’s shares are up 4.14%, while the S&P/ASX 200 Materials Index (ASX: XMJ) is one of the best-performing sector indices today with a 2.09% gain.

It might not be surprising, then, that some of Mineral Resources’ peers have also recovered from yesterday’s sell-off. Pilbara Minerals Ltd (ASX: PLS) is up 6.35%, and Newcrest Mining Ltd (ASX: NCM) is rising 0.44%.

In comparison, the S&P/ASX 200 Index (ASX: XJO) is currently enjoying a 0.27% gain.

So what’s going on? Let’s investigate.

What’s going on with the Mineral Resources?

Investors seem to have refreshed their appetites for shares of Mineral Resources after they suffered a sizable loss yesterday, as the Motley Fool reported. The Mineral Resources share price ended the day 7.94% in the red.

The coverage included the fact that a broker rated the company’s shares a hold and that a speculated demerger of its lithium business “could create value”.

Other ASX lithium shares were also sold off on Monday, with some losing as much as 16.9%.

So with the broader market moving upwards and no news announced from the company, investors may surmise that the prices of these and other lithium shares are too good to pass up.

Mineral Resources share price snapshot

The Mineral Resources share price is up almost 11% year to date and 36% over the past 12 months. Meanwhile, the ASX 200 is down 14.5% in 2022 and 12% in the past year.

Mineral Resources has a market capitalisation of $11.79 billion.

The post Why is the Mineral Resources share price gaining 4% on Tuesday? appeared first on The Motley Fool Australia.

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More reading

• Is the Mineral Resources share price a buy right now?
• Our 4 favourite lithium ASX shares right now: Wilsons
• These ASX 200 dividend shares just paid out. Here’s how much
• Own Mineral Resources shares? Your dividends are on the way
• Here are the top 10 ASX 200 shares 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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The S&P/ASX 200 Index (ASX: XJO) is heading in the right direction at last on Tuesday. In afternoon trade, the benchmark index is up 0.3% to 6,488.7 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are dropping:

Core Lithium Ltd (ASX: CXO)

The Core Lithium share price is down 5% to $1.20. This is despite a number of lithium shares charging higher and Core Lithium releasing a business update. The latter revealed that preparations are underway for the company’s first shipment of direct ship ore spodumene from the Finniss Lithium project before the end of 2022.

Ramsay Health Care Limited (ASX: RHC)

The Ramsay share price has continued its slide and is down a further 3% to $57.42. Investors have been selling this private hospital operator’s shares this week after it revealed that takeover talks with the KKR consortium have now terminated.

Synlait Milk Ltd (ASX: SM1)

The Synlait Milk share price is down 7% to $2.95. This follows the release of the dairy processor’s fully year results this morning. That’s despite Synlait Milk reporting a 21% increase in revenue to NZ$1.66 billion and a 213% jump in adjusted EBITDA to NZ$117.2 million. Management’s commentary for FY 2023 may have spooked investors. It warned that the SAMR registration timeline, a tight labour market, high inflation, and supply chain pressures could materially impact the company’s current guidance.

Virgin Money UK (ASX: VUK)

The Virgin Money share price is down 4% to $2.22. Investors have been selling this UK based bank’s shares this week amid concerns over the state of the British economy. This follows an extremely poor reaction to the government’s new tax cuts that saw the British pound drop to a record low against the US dollar.

The post Why Core Lithium, Ramsay, Synlait Milk, and Virgin Money shares are dropping appeared first on The Motley Fool Australia.

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More reading

• Core Lithium share price falls despite business update
• Why is the Core Lithium share price cratering 9% on Monday?
• Ramsay share price sinks 7% to two-year low on failed takeover deal
• Here’s which ASX lithium shares investors have been loading up on this month
• Which ASX lithium shares are performing best in 2022?

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 Ramsay Health Care 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 S&P/ASX 200 Materials Index (ASX: XMJ) is up 2% today, but three lithium and battery minerals ASX shares are soaring higher.

The Ragusa Minerals Ltd (ASX: RAS), Talga Group Ltd (ASX: TLG) and Dundas Minerals (ASX: DUN) share prices are all storming ahead.

Let’s take a look at why these three ASX shares are surging today.

Talga Group

Talga shares are lifting 13% today. The company is developing battery and advanced materials in Sweden for a cleaner future. Today, Talga announced it has signed a non-binding off take term sheet with Automotive Cells Company SE (ACC).

Talga will supply ACC with its flagship lithium-ion battery anode product, Talnode-C, from the Vittangi Anode Project in Sweden. Talga will provide ACC with 60,000 tonnes of Talnode-C over five years.

Ragusa Minerals

Ragusa shares are soaring nearly 30% today. This follows an update on the company’s Northern Territory Lithium Project.

The company released details on its upcoming drilling program at the project. Preparation earthworks including access track and drill pad clearing are now complete.

At a recent site visit, a new pegmatite of 150m outcrop was discovered at the eastern edge of the project area.

Commenting on the news, chair Jerko Zuvela said:

We have a significant opportunity to utilise our exploration and development experience to rapidly progress our NT Lithium Project and realise the massive upside value potential in a Tier 1 jurisdiction close to major infrastructure at a time of record lithium prices.

Dundas Minerals

Dundas Minerals shares are soaring 47% today. The company’s shares have surged 196% since the market close on Friday. This follows the company discovering “massive sulphides” in two drill holes.

The company is exploring the Albany-Fraser Orogen belt in Western Australia. Many samples showed sulphides anomalous in cobalt, nickel, copper and silver.

The post 3 ASX lithium and battery minerals ASX shares going gangbusters today appeared first on The Motley Fool Australia.

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More reading

• Why Brainchip, New Hope, Sayona Mining, and Talga are pushing higher
• Talga share price surges 14% on Mercedes battery anode deal
• Why has this ASX mining share exploded 200% in 2 days?
• Guess which ASX lithium share is rocketing 39% on project news
• Which ASX lithium shares are performing best in 2022?

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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The Whitehaven Coal Ltd (ASX: WHC) share price is soaring this afternoon as it rebounds from Monday’s slump.

Whitehaven shares are currently up 7.71% to $8.52 after losing 14% in yesterday’s trading session.

It’s also proving a good day for other ASX coal shares. New Hope Corporation Limited (ASX: NHC) shares are gaining 6.02%, Coronado Global Resources Inc (ASX: CRN) is up 3.36%, while the Yancoal Australia Ltd (ASX: YAL) share price is rising 1.67%.

On a broader level, the S&P/ASX 200 Energy Index (ASX: XEJ) is currently climbing 1.98%.

Coal futures are also up 0.64% and are currently trading for US$438 per tonne, according to Trading Economics.

This morning the Fool published bullish comments from a broker about the outlook for coal shares. Let’s cover the highlights.

What did the broker say?

Datt Capital principal Emanuel Datt is particularly bullish on thermal coal, which is consumed to create steam for electricity. Thermal coal is distinguished from metallurgical coal, with the latter used for carbon to create steel.

Datt gave his thoughts on why coal shares retain their importance on the world stage:

Effectively, the thesis behind thermal coal standard is a critical and cheap energy source in a world today that is highly energy constrained after the Russian-Ukraine war and knock-on sanctions. With our positions, we have an earnest on the quality of the product but also the jurisdiction and the location of the production assets itself.

Thermal coal also has the benefit, or what we think will be the benefit of, pretty likely to be higher energy prices throughout the winter months in the northern hemisphere. But also, we will benefit from US dollar exposure and thermal coal has recently had almost one-to-one correlation with US dollar strength of late.

Datt went on to say that the long-term outlook for coal shares is uncertain due to the cyclical nature of commodities and forces of supply and demand.

Whitehaven share price snapshot

The Whitehaven share price is up 207% year to date. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is down 14% over the same period

Whitehaven Coal has a market capitalisation is $7.56 billion.

The post Whitehaven share price leaps 8% amid ASX 200 coal rally appeared first on The Motley Fool Australia.

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More reading

• Why are ASX 200 coal shares smashing it out of the park on Tuesday?
• ‘Largest exposure’: Why this expert is still bullish on red-hot ASX coal shares
• Why is the Whitehaven share price wilting 10% on Monday?
• Whitehaven Coal shares are on fire, but could there be a looming risk?
• Why Apollo Tourism, OZ Minerals, SSR Mining, and Whitehaven Coal shares are rising

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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to end its losing streak. At the time of writing, the benchmark index is up 0.2% to 6,483.9 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are pushing higher:

Brainchip Holdings Ltd (ASX: BRN)

The Brainchip share price is up 5.5% to 87.5 cents. Investors have been buying this loss-making semi-conductor company despite there being no news out of it. They may believe that recent weakness in the Brainchip share price has created a buying opportunity. That’s despite its market capitalisation still hovering around $1.5 billion.

New Hope Corporation Limited (ASX: NHC)

The New Hope share price is up 6% to $5.73. This appears to have been driven by bargain hunters swooping in after significant weakness on Monday. The coal miner’s shares were down almost 15% yesterday due to a market selloff amid global recession fears.

Sayona Mining Ltd (ASX: SYA)

The Sayona Mining share price is up almost 7% to 23.5 cents. This morning this lithium developer announced that it has awarded a contract to Fournier & Fils to supervise mining operations at the North American Lithium (NAL) operation in Canada. Work will commence from next month, with the restart of production at NAL targeted within the first quarter of 2023.

Talga Group Ltd (ASX: TLG)

The Talga share price is up 14% to $1.35. Investors have been scrambling to buy this technology minerals company’s shares after it entered into a non-binding offtake term sheet with Automotive Cells Company. It is co-owned by major automotive brands Mercedes-Benz and Stellantis, as well as battery company Saft. The agreement will see Talga supply Automotive Cells Company with 60,000 tonnes of its flagship anode product Talnode-C over a five-year term.

The post Why Brainchip, New Hope, Sayona Mining, and Talga are pushing higher appeared first on The Motley Fool Australia.

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More reading

• Talga share price surges 14% on Mercedes battery anode deal
• Sayona Mining share price leaps 7% on lithium project news
• Why are ASX 200 coal shares smashing it out of the park on Tuesday?
• New Hope share price rebounds 10%: Time to buy?
• ‘Largest exposure’: Why this expert is still bullish on red-hot ASX coal shares

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 Woodside Energy Group Ltd (ASX: WDS) share price is outperforming on Tuesday following a disappointing start to the week for S&P/ASX 200 Index (ASX: XJO) energy stocks.

The energy giant is backing up its Monday fall with a strong performance today.

At the time of writing, the Woodside share price is $30.63, 1.42% higher than its previous close.

For comparison, the ASX 200 has gained 0.19% right now. Meanwhile, the S&P/ASX 200 Energy Index (ASX: XEJ) is among the market’s leaders, posting a 1.56% rebound.

So, what might be going on with the ASX 200 energy monolith today? Let’s take a look.

Woodside share price partially recovers on Tuesday

The Woodside share price is picking up some of its Monday losses today, joining the ASX 200 energy index in the green.

The sector tumbled a whopping 6.3% yesterday, marking its worst session in more than two years.

Meanwhile, the Woodside share price posted a 4.97% fall, sending it to a near-three-month low point.

Interestingly, the stock’s partial rebound comes amid continuously falling oil prices. Global oil prices slumped around 2.5% to nine-month lows overnight.

The Brent crude oil price dumped 2.4% to trade at US$84.06 a barrel while the US Nymex crude oil price fell 2.6% to US$76.71 a barrel.

The commodity’s suffering comes as the US dollar strengthens, making oil more expensive for those trading in other currencies, Reuters reports.

Still, the Woodside share price is joined in the green by those of many of its ASX 200 oil-focused peers.

Stock in Worley Ltd (ASX: WOR) is up 0.4% right now while that of Santos Ltd (ASX: STO) has gained 0.3%.

But it’s not all green in the sector. The Beach Energy Ltd (ASX: BPT) share price is dragging on the market, falling 1.7% following its near-7% tumble on Monday.

The post Woodside share price rebounds as energy stocks surge on Tuesday appeared first on The Motley Fool Australia.

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More reading

• Why is the Woodside share price tumbling 5% on Monday?
• 5 things to watch on the ASX 200 on Monday
• 2 surprising ASX shares to buy for the energy transition: Wilsons
• Could this nation-first action make an investment in Woodside shares cleaner?
• 5 things to watch on the ASX 200 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 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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Fund management guru Geoff Wilson, the chair of Wilson Asset Management, has responded angrily to proposed legislation that will stop companies paying franked special dividends funded via capital raisings.

As my Fool colleague Brendan reported, the new rules will also require investors and super funds to pay back franking tax credits attached to special dividends received all the way back to December 2016.

Wilson says it’s a cash grab and the first step in dismantling the franking system, according to an article in The Australian today.

Changed ASX dividend rules to disadvantage growth shares

Wilson said:

If you stop every growth company that raises capital from paying a fully franked (special) dividend, that’s a big segment of the Australian corporate sector and puts growth companies at a big disadvantage.

It should have been off the table for a generation, for 30 years … this is the start of the dismantling of the Paul Keating-introduced franking system.

The retail investor will certainly be impacted by the retrospective nature of this. They’ll get a letter from a company saying ‘the dividend you got wasn’t franked so you‘ve actually got to pay tax on that’.

The government says the measure will save $10 million a year. But Wilson reckons it will be billions.

Wilson said:

Treasury thinks this will bring in $10m (a year) … but because of the broad wording of the (proposed legislation), and it really comes down to the tax office’s interpretation and its ability to put pressure on large corporate companies, we think the figure could run into the billions by making it retrospective to 2016.

Wilson said he’d fight the proposed legislation with “the same amount of resources as we did in 2019”.

He’s referring to the previous federal election when Labor promised to abolish franking credit cash refunds. The Liberals dubbed it a “retiree tax” because it would have affected retirees the most.

What is the government’s point of view?

The Federal Treasurer, Jim Chalmers, described the legislation as “a very minor measure”, according to the article.

Labor says it merely closes a loophole that companies use to pay out excess franking credits on their books.

The draft proposal says: “The object of the frankable distribution rules is to ensure that only distributions equivalent to realised profits can be franked”.

The current loophole allows companies to use capital raisings to fund franked special dividends. This allows them to release excess credits above their earnings in a given period.

Chalmers points out that the Coalition Government initially proposed the measure in 2016.

The legislation is now open for public comment until 5 October.

The proposed changes will not impact ordinary dividends. ASX dividend shares will still be able to pay special dividends without franking.

The S&P/ASX 200 Index (ASX: XJO) is down 0.22% at the time of writing.

The post Labor’s proposed changes to franked ASX dividends ‘could run into the billions’: Wilsons appeared first on The Motley Fool Australia.

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More reading

• The Fortescue share price is handily beating the ASX 200 today
• Down 7% in a month, is the Telstra share price in the buy zone?
• Talga share price surges 14% on Mercedes battery anode deal
• Why has this ASX mining share exploded 200% in 2 days?
• 2 reasons why you shouldn’t worry about rising interest rates, and 2 reasons why you should

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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The Fortescue Metals Group Limited (ASX: FMG) share price is currently up by more than 4% at the time of writing. That compares to the S&P/ASX 200 Index (ASX: XJO) which is only up by 0.25%, which includes the impact of ASX resource shares rising.

Fortescue isn’t the only one that’s doing well. For example, the BHP Group Ltd (ASX: BHP) share price is up 2% and the Rio Tinto Limited (ASX: RIO) share price is up by 2.75%.

ASX coal shares are also doing well today, with the Whitehaven Coal Ltd (ASX: WHC) share price up by more than 4% and the New Hope Corporation Limited (ASX: NHC) share price up by 5%.

What’s going on with the Fortescue share price?

One of the main things that normally influence sentiment about Fortescue is a change in the iron ore price. A higher iron ore price can largely translate into higher profit for Fortescue because the costs to extract 1mt of iron ore don’t change as the iron ore price rises (aside from paying more to the government).

According to Commsec, the iron ore price only rose by 0.1% overnight.

But, aside from a bit of market positivity returning about miners today, there could be some positive thoughts surrounding the Fortescue dividend after some comments from Fortescue leader Andrew Forrest.

Dividends to keep flowing?

According to reporting by the Australian Financial Review, he has rubbished the idea that spending money on decarbonising Fortescue will mean lower dividend payments.

He said that Fortescue has enough cash right now to fully pay for the decarbonisation plan.

The AFR quoted him from London:

We could write out a cheque for this. We’ve got over $US6 billion in cash right now. So, why would we get rid of the dividend policy? This has no cash challenge implications at all.

One point that Forrest referred to was that the Iron Bridge project construction is finishing. In FY23, Fortescue is expecting 1mt of production from Iron Bridge. This project’s funding has been funded out of cash flow, which hasn’t hurt the dividend policy (of paying up to 80% of net profit out as a dividend).

Forrest said:

That’s nearly $4 billion. That comes to an end, that starts production. They just haven’t thought this through.

Investments to help with costs

Fortescue isn’t investing in renewables just for the sake of going green, it will also help lower costs because the green energy generated will save money straight away, leading to a “double-digit rate of return”, according to reporting by the AFR. This could help the Fortescue share price, as lower costs help profit.

Forrest said:

This is not like those huge construction programs you’ve always seen me do: scoping, feasibility study, definitive feasibility study, front-end engineering design, construction; then commissioning, might work, might not, all the repairs when it doesn’t, then ramp up. Then you might get a cheque.

That’s not how renewable works. You roll it out like a carpet. And every time you do that, you plug it in. It’s simple, it’s proven, and you start saving money immediately.

The Fortescue boss explained that renewable energy will come with lower costs of maintenance, operations and fuel inputs, compared to fossil fuel power stations.

As Forrest points out “the wind doesn’t send you a bill. The sun doesn’t send you a bill. Pump hydro doesn’t send you a bill. It’s free.”

Fortescue share price snapshot

Despite today’s rise, the Fortescue share price is still down more than 10% over the past month.

The post The Fortescue share price is handily beating the ASX 200 today appeared first on The Motley Fool Australia.

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More reading

• Fortescue shares: Buy, hold, or fold?
• Broker gives its verdict on the Fortescue share price
• The Fortescue share price has outpaced the ASX 200 today. Could green dreams be why?
• Is the Fortescue dividend at risk from the miner’s $9b decarbonisation strategy?
• Why has the Fortescue share price been having such a rough trot lately?

Motley Fool contributor Tristan Harrison has positions in Fortescue Metals Group 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 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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