Category: Stock Market

The 2022 financial year that has just wrapped up was not a great one for ASX investors. Between 1 July 2021 and 30 June 2022, the S&P/ASX 200 Index (ASX: XJO) fell by 10.19%. But investors in the BetaShares Nasdaq 100 ETF (ASX: NDQ) had an even worse time.

As we discussed earlier this month, the NDQ exchange-traded fund (ETF) fell by a painful 20% or so over the 2022 financial year. So now we have turned the page on such a depressing 12 months, what might FY 2023 hold in store for this popular ETF?

Of course, it’s impossible to know for sure. NDQ’s performance is determined by approximately 100 individual shares on the US’s NASDAQ exchange. But we can look at what might move this ETF over the next 12 months.

There are dozens and dozens of underlying companies held within this ETF. Even so, NDQ is still dominated by a handful of companies. Those are the largest shares on the NASDAQ exchange and would be familiar to almost every reader today.

They include Apple Inc (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT), Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL), Amazon.com Inc (NASDAQ: AMZN), and Tesla Inc (NASDAQ: TSLA).

Together, these five US tech titans make up almost 42% of NDQ’s entire portfolio weighting.

What does FY 2023 hold in store for the NDQ ETF?

The valuations of these companies have all fallen significantly over the past year. This is the primary reason why NDQ itself has had such a tough time.

Of course, each company is individual. But it’s fair to say all of them have been impacted by rising interest rates, investors’ concerns over inflation, and fears over a possible global recession.

Thus, it’s a reasonable bet that these factors will be at the forefront of what drives these companies’ valuations over FY 2023.

So for any investor who wants to keep track of this ETF over the current financial year, keeping an eye on those macro factors is a good place to start.

It’s hard to know how FY 2023 will treat these shares. And by extension, the NDQ ETF. But the next step for any current or would-be NASDAQ investors might be to look at these companies’ upcoming earnings. The US has just started its quarterly earnings season.

Despite the past year’s poor performance, NDQ units have still managed to keep a five-year average return of 18.22% per annum (as of 30 June).

The BetaShares NASDAQ 100 ETF charges a management fee of 0.48% per annum.

The post What’s in store for the BetaShares NASDAQ 100 ETF in the next 12 months? appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX shares today
• Here are the 3 most heavily traded ASX 200 shares on Friday
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• Down 23%, should investors buy Alphabet before its stock split?

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen has positions in Alphabet (A shares), Amazon, Apple, Microsoft, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, BETANASDAQ ETF UNITS, Microsoft, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has positions in and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, and Apple. 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 Magellan Financial Group Ltd (ASX: MFG) share price has had a terrible time over the past month, falling by around 75%.

But, can the next 12 months create a turnaround for the business?

It’s probably a good idea not to anchor our thoughts about where share prices have been in the past. Just because the Magellan share price was above $40 a year ago doesn’t mean it’s going to get back there any time soon. If it did, that would be a rise of more than 200%.

The underperformance of Magellan’s main investment funds and the loss of funds under management (FUM) may explain the downward plunge of the Magellan share price.

But, can things turn around?

Performance

Magellan operates many different funds, But let’s look at one of the biggest funds – the Magellan Global Fund (Open Class) (ASX: MGOC) which is $10 billion in size.

At 31 March 2020, close to the bottom of the COVID-19 crash, the Magellan Global Fund told investors it had produced a net return per annum of 16.1% over the prior three years, outperforming its global share benchmark by an average of 9.7% per annum.

However, by 31 May 2022, the Magellan Global Fund showed a net return of 4.9% per annum over the prior three years, underperforming the global share benchmark by an average of 6.5% per annum.

While investing is about the long-term, a heavy underperformance in a relatively short period of time has led to the loss of tens of billions of dollars of funds under management (FUM).

If Magellan can produce some outperformance then it may be able to slow or even reverse the FUM net outflows.

At 30 June 2022, it had $61.3 billion of FUM, down from $65 billion at 31 May 2022. For the three months to June 2022, the business suffered $5.2 billion of FUM outflows ($1.7 billion of retail FUM and $3.5 billion of institutional FUM).

Broker thoughts on the Magellan share price

The broker Morgan Stanley currently has an underweight rating on the business, with a price target of $11. It did note that investment performance had improved in June.

Morgans is neutral on the business with a price target of $13.43, which implies an upside of around 10%.

The broker Macquarie is neutral on the Magellan share price, though the price target is $11.50. It thinks there will be more outflows over the next three months.

Finally, Credit Suisse is neutral on the business, with a price target of $12. It thinks Magellan needs to deliver better fund returns before positive market sentiment can return.

The post Is the Magellan share price on course for a recovery in FY23? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX shares today
• Why Collins Foods, GQG, Magellan, and SkyCity shares are dropping
• Here’s why the Magellan share price is sinking 6% today
• 5 ASX dividend shares with the highest yields in FY22
• Here are the top 10 ASX shares today

Motley Fool contributor Tristan Harrison has positions in Magellan Financial Group. 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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If you’re on the lookout for ASX 200 shares to add to your portfolio, then the two listed below could be worth a closer look.

Here’s what you need to know about these shares right now:

Altium Limited (ASX: ALU)

The first ASX 200 share that could be in the buy zone is Altium. It is an electronic design software provider that is best-known for its Altium Designer and Altium 365 platforms. These platforms are regarded as the best in the industry and are used by many of the world’s largest companies for electronic/printed circuit board design. Among its growing user base are the likes of BAE Systems, Microsoft, and Tesla.

In addition, the company has a parts search engine called Octopart that is performing exceptionally well thanks to supply chain disruption. All in all, the company appears well-placed for growth over the next decade. Particularly given the booming internet of things and artificial intelligence markets. These are driving strong demand for electronic design software.

Bell Potter currently has a buy rating and $34.00 price target on Altium’s shares.

CSL Limited (ASX: CSL)

Another ASX 200 share that could be a buy for investors this month is CSL. It is one of the world’s leading biotechnology companies, comprising the CSL Behring and Seqirus businesses. These businesses are leaders in their respective fields – plasma therapies and vaccines.

And while plasma collection headwinds have been weighing on sentiment in 2022, industry data appears to show that collections have finally returned to pre-COVID levels. Combined with the impending blockbuster acquisition of Vifor Pharma and its huge annual investment in research and development, the future looks bright for CSL.

Citi currently has a buy rating and $330.00 price target on the company’s shares.

The post 2 top ASX 200 shares brokers rate as buys appeared first on The Motley Fool Australia.

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More reading

• Here’s how much $20k invested in these ASX shares 10 years ago is worth today
• CSL shares ‘well-positioned to deliver double-digit earnings growth’: expert
• Could FY23 be a good year for the CSL share price?
• 3 ASX shares to buy in a sector suddenly soaring this month: expert
• Why is the CSL share price up 11% in a month?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium and CSL Ltd. 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 Westpac Banking Corp (ASX: WBC) share price ended Friday in the red, down 0.2% to $19.90. It comes as a number of bidders are reportedly lining up to acquire the bank’s investment platform business, when it attempts to sell in August.

Reports have surfaced suggesting Westpac has various finance giants interested, ranging from asset managers and investment banks to private equity.

Westpac’s $1 billion divestment

It’s understood that non-binding bids for the bank’s planned divestment of its investment platform segment have come in at around $1.2 billion.

This was below Westpac’s expectations of around $1.5 billion, The Australian reports.

Meanwhile, the intended sale – planned for next month – is facing inquisitions from a number of players interested in participating in the bid.

Bain Capital and Colonial First State are purportedly interested, while Macquarie Group Ltd (ASX: MQG) and AMP Ltd (ASX: AMP) were reported to be “best-placed to buy the unit”, The Australian said.

The planned sale comes at the same time rival banking giant Australia and New Zealand Banking Group Ltd (ASX: ANZ) looks to acquire accounting software firm MYOB in a $4.5 billion transaction.

ASX-listed banks had a tough day on Friday after US investment banking giant JPMorgan Chase & Co posted weaker earnings overnight and announced it was set to wind back its buyback program. The S&P/ASX 200 Financials Index (ASX: XFJ) ended the day’s trading down 0.39%.

However, the Westpac share price has been on a downward trend for the past 12 months and now rests around 20% in the red over that period (see graph below). It has also fallen 8% so far this year.

The post Own Westpac shares? The plan for a $1 billion division sale appeared first on The Motley Fool Australia.

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More reading

• Top ASX dividend shares to buy in July 2022
• Setting the pace: Why ASX 200 bank shares are feeling the pinch on Friday
• Surprise US inflation pumps the brakes on ASX 200 bank shares
• Will Westpac shares really offer a 7.8% dividend yield this year?
• Analysts name 2 ASX 200 dividend shares to buy now

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Zach Bristow 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 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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If you’re looking for exchange traded funds (ETFs) to buy, then you may want to look at the two listed below.

These exciting ETFs have recently been rated as buys. Here’s what you need to know:

ETFS S&P Biotech ETF (ASX: CURE)

The first ETF to look at is the ETFS S&P Biotech ETF. This ETF provides investors with exposure to U.S. healthcare biotechnology companies. These are companies that are engaged in the research, development and manufacturing of products based on genetic analysis and genetic engineering. This includes vaccine manufacturers and immunotherapy treatment developers.

Among its holding are promising biotechs such as Arrowhead Pharmaceuticals, Beam Therapeutics, Global Blood Therapeutics, and Twist Bioscience.

Felicity Thomas from Shaw and Partners is positive on the ETF. She recently told Livewire:

I’m going to go with a buy. Look I like to buy ETFs for the long term. We have an ageing population, and what’s the most important thing in the world? Your health. Biotech, healthcare, and life sciences, that’s where you want to be invested over the next couple of decades.

VanEck Vectors MSCI World ex Australia Quality ETF (ASX: QUAL)

Another ETF for investors to look at is the VanEck Vectors MSCI World ex Australia Quality ETF. It provides investors with access to a portfolio of high quality shares outside Australia that pass certain criteria.

Companies deemed to be high quality enough to be included in the fund are the likes of Apple, Mastercard, Microsfot, Nestle, Pfizer, and Visa.

Sarah Gonzales from Apt Wealth is a fan of the ETF. She also told Livewire:

My preferred ETF is the VanEck MSCI International Quality ETF. I think it provides exposure to that quality factor, which tends to outperform in market downturns. It does focus on factors like return and equity, year-on-year growth of earnings and also levels of debt. These are proxies for profitability, earnings variability, and the level of debt of companies. Particularly if we are going into a recession,  I think these are really the factors that I think we should focus on.

The post 2 top ETFs tipped as buys by experts for ASX investors appeared first on The Motley Fool Australia.

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More reading

• I think these 2 ETFs are long-term buys
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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 Kogan.com Ltd (ASX: KGN) share price has been sold off heavily. It’s down around two thirds in the 2022 calendar year to date. But is this an opportunity?

The e-commerce retailer has been through a lot of volatility since the start of COVID-19. But, it’s currently down more than 30% from the bottom of the COVID-19 crash. In other words, the market seems to be pricing the business as having less favourable prospects now than at the worst point of the pandemic uncertainty.

It’s certainly true that the company’s profitability has significantly reduced.

Let’s look at the FY22 third quarter numbers, which is the most recent update.

Quarterly update

Total gross sales were $262.1 million, which was a reduction of 3.8% year on year. Gross profit fell 11.2% year on year to $41 million. Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) sank 110.5% year on year to a loss of $0.8 million. Reducing profitability may have had a big impact on the Kogan share price.

Active customers grew 3.6% year on year to 4.1 million, while Kogan First members jumped 264% year on year to 328,000.

Kogan explained that there was a decline in both exclusive brands and third-party brand sales, cycling “extreme growth” in the prior year.

Consumer demand did not meet management’s expectation of continuing growth. It had $193.9 million of inventory at the end of the quarter. The company has an intention to “progressively recalibrate” its baseline level of inventory over the coming year.

Can things get better in FY23?

Management certainly thinks so.

In terms of sales, the business is quite a bit bigger than it was two years ago. FY22 third quarter gross sales were 42.6% higher than the third quarter of FY20.

If Kogan can improve its profit margins, then the profit numbers may look a bit better.

Kogan.com founder and CEO Ruslan Kogan said:

While market conditions are challenging at present, the foundations laid over the last 16 years are holding us in good stead. Our current focus on recalibrating inventory levels and core operational costs is aimed at returning the company to its historical margins and also to position the business for its next phase of growth.

Kogan didn’t spell out what profit margin the business would be aiming for, but a return to profitability could go some way to reassure the market of its future prospects.

Looking at the earnings estimate on CMC Markets, Kogan is expected to return to making a net profit after tax (NPAT) in FY23, with a projection of 6.5 cents of earnings per share (EPS). This puts the Kogan share price at 42 times FY23’s estimated earnings.

The FY24 profit projection is 14 cents of EPS, meaning it’s valued at 20 times FY24’s estimated earnings.

Broker rating

UBS rates Kogan as a sell because of the lower profitability and inventory level. The economic environment could also make it tricky for retailers. There is an ongoing impact on supply chains.

However, the Kogan share price has fallen so much that the price target of $2.90 represents a small rise over the next 12 months.

The post Can the Kogan share price turn over a new leaf in FY23? appeared first on The Motley Fool Australia.

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More reading

• Why Allkem, Kogan, Metcash, and Sezzle shares are sinking
• Does the FY23 outlook make ASX retail shares look like bargains?
• Why are these 2 ASX ecommerce shares hitting two-year lows?
• These are the 10 most shorted ASX shares
• Why did the Kogan share price go backwards in FY22?

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 Kogan.com ltd. The Motley Fool Australia has positions in and has recommended Kogan.com ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Are you looking for some dividend shares to add to your income portfolio when the market reopens next week? If you are, then the two listed below could be worth considering.

Here’s why these dividend shares have been rated as buys:

Coles Group Ltd (ASX: COL)

Coles could be an ASX dividend share to buy next week even if it has just hit a 52-week high.

Investors have been buying the supermarket operator’s shares on the belief that the company is well-placed for growth in the current environment. That’s due to its strong market position, defensive qualities, and favourable exposure to inflation.

The good news is that the team at Morgans still see room for the Coles share price to rise further. Its analysts currently have an add rating and $20.65 price target on its shares.

As for dividends, the broker is forecasting fully franked dividends of 61 cents per share in FY 2022 and then 64 cents per share in FY 2023. Based on the latest Coles share price of $18.95, this will mean yields of 3.2% and 3.4%, respectively, over the next two financial years.

It commented:

We continue to see COL as offering good value with the company possessing defensive characteristics and a strong balance sheet (1H22 net cash $54m) allowing ongoing investment for growth.

Costa Group Holdings Ltd (ASX: CGC)

Another ASX dividend share for investors to consider is horticulture company Costa.

Unlike Coles, its shares were sold off and hit a 52-week low last week. This was driven by concerns over Costa’s citrus operations and the impact they could have on its full-year earnings.

One leading broker that remains positive is Goldman Sachs. In response to its trading update, the broker retained its buy rating with a slightly trimmed price target of $3.65.

It also continues to forecast attractive yields in the coming years. Goldman is expecting fully franked dividends of 10.5 cents per share in FY 2022 and then 11.5 cents per share in FY 2023. Based on the latest Costa share price of $2.54, this will mean yields of 4.1% and 4.5%, respectively.

Goldman commented:

We believe price strength has outpaced cost inflation and forecast margin expansion in the current year. CGC continues to effectively manage labour costs, which accounts for c.40% of total costs. We believe CGC is well positioned to deliver strong earnings growth in CY22/CY23/CY24.

The post 2 highly rated ASX dividend shares that brokers say are buys appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX shares today
• Coles share price claims new 52-week high, could it still be a buy?
• Why experts have named these ASX 200 dividend shares to buy
• ASX 200 supermarket shares lead as household spending jumps
• Costa Group shares down, responds to ASX query. What happened?

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 positions in and has recommended COLESGROUP DEF SET. The Motley Fool Australia has recommended COSTA GRP FPO. 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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Cryptocurrency owners better check that they’re reporting their transactions the right way.

That’s the message from the Australian Taxation Office (ATO), which revealed this week five tips for crypto investors to double-check as tax time begins in earnest.

ATO assistant Commissioner Tim Loh empathised with crypto holders who could think the tax implications are complicated.

“That’s why our focus is on helping people get it right,” he said.

“Over one million taxpayers will have a message appear as a reminder when they prepare their tax returns saying they may have capital gains or capital losses from crypto to declare.”

1. Crypto is an asset that attracts capital gains tax

According to the ATO, “generally” cryptocurrencies are an asset for capital gains tax (CGT) purposes.

This means taxpayers must report when there has been a “disposal” of such an asset. Such an event could occur when an investor:

• Trades, sells or gifts crypto
• Exchanges one cryptocurrency for another cryptocurrency
• Converts crypto to a fiat currency, such as Australian dollars
• Spends crypto in return for goods or services

After such an event, the investor will either have a capital gain or a loss, which needs to be reported in tax returns. This is why records of all crypto transactions need to be kept somewhere.

Like any other CGT asset, an investor could be eligible for a 50% discount on the tax liable if they’ve held the crypto for longer than 12 months.

2. What if there is a capital loss?

This is especially relevant for the financial year just ended, as most cryptos have plunged in value.

The ATO reminded taxpayers that a capital loss can only be claimed upon disposal. Paper losses, like Bitcoin (CRYPTO: BTC)’s value merely plummeting, can’t be claimed as a capital loss.

Capital losses can’t be offset against other income, like from your day job. But it can offset capital gains from the same year or be carried forward to be used in future years.

3. What if I received income from crypto?

An investor may have eked out an income from crypto, through activities like staking or airdrops.

These payments must be included in tax returns under “other income”.

“Whether you receive income in the form of Australian dollars or crypto assets, you need to make sure the correct information is included in your tax return,” said Loh.

4. Record keeping

The ATO warns crypto investors to keep immaculate records of when they bought or sold cryptos.

Each cryptocurrency is a separate CGT asset, the office cautioned.

“Keeping good records gives the ATO confidence you are reporting correctly and can reassure you that you are claiming everything you are entitled to,” said Loh.

“It’s vital that you keep accurate records including dates of transactions, the value in Australian dollars at the time of the transactions, what the transactions were for, and who the other party was, even if it’s just their wallet address.”

5. Data matching

The tax office reminded Australians that their activities are being tracked in the background.

Money trails can be traced back to taxpayers using data from banks and crypto exchanges.

“We are able to match this data to individuals transacting in crypto assets, so don’t forget to include gains and losses in your tax return,” said Loh.

The ATO also reminded investors that correcting their return retrospectively will not be penalised. But ignoring errors could have later consequences, such as an audit.

The post 5 warnings from the ATO for crypto investors appeared first on The Motley Fool Australia.

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• What went so right and so wrong for the Bitcoin price in the 2022 financial year?

Motley Fool contributor Tony Yoo has positions in Bitcoin. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin. The Motley Fool Australia has positions in and has recommended Bitcoin. 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 financial year just gone wasn’t a particularly kind one to ASX shares and investors. Over FY 2022, the S&P/ASX 200 Index (ASX: XJO) dropped by a meaningful 10.19%. It wasn’t much better for the Washington H. Soul Pattinson and Co Ltd (ASX: SOL) share price. In fact, it was worse.

Soul Patts shares started the financial year at $33.73 each. But by 30 June last month, the industrial conglomerate finished up at just $23.54. That’s a drop of just over 30%, almost triple the losses of the ASX 200. Ouch.

But now that nasty year is out of the way, and we are well into FY 2023, what might the next 12 months hold in store for Soul Patts shares?

What will guide the Soul Patts share price in FY 2023?

Well, it’s hard to predict the movements of any ASX share, whether that be over a day, week, month or year. But it’s arguably even harder to assess what could happen to this particular company.

That’s because most of its value comes from the large share portfolio that the company holds within it – a share portfolio made up of dozens of other ASX shares.

Until October last year, Soul Patts only owned a relatively small number of ASX portfolio holdings, as well as some unlisted assets. These include positions in Brickworks Limited (ASX: BKW), New Hope Corporation Limited (ASX: NHC), BKI Investment Company Ltd (ASX: BKI), and TPG Telecom Ltd (ASX: TPG).

But in October, Soul Patts acquired the listed investment company (LIC) Milton Corporation. Milton already had a large portfolio of mostly ASX blue-chip shares, which is of course now owned by Soul Patts.

Almost half of the Soul Patts investment portfolio is still concentrated on its ‘strategic portfolio’, which includes the stakes in the companies listed above, but excludes the shares inherited from Milton.

So going into this financial year, it’s a fair bet that the Soul Patts share price will be guided by what happens to its largest holdings – mainly Brickworks, New Hope, and TPG.

If the entire ASX does well, it’s likely to lift up the Soul Patts share price even further, given the company still owns Milton’s ASX 200-aligned cache of shares.

But if you’re itching to watch how Soul Patts shares navigate the current financial year, make sure to keep an eye on those three companies.

 

The post Own Soul Patts shares? Here’s what to look out for in FY 2023 appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in 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 and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended TPG Telecom 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 case for raising interest rates further strengthened this week when the United States announced a 40-year high for inflation at 9.1%, which was well beyond consensus expectations. We also found out that the Australian jobs market is even tighter with unemployment falling again to a 48-year low of just 3.5%.

During times of increasing uncertainty and volatility, many investors gravitate to ASX dividend shares for their potential to deliver regular returns that may outperform share price gains.

On that note, we asked our Foolish contributors to compile a list of ASX dividend shares that they reckon could make great buying for income investors in July. Here is what the team came up with.

8 best ASX dividend shares for July 2022 (smallest to largest)

Dusk Group Ltd (ASX: DSK), $123.9 million

AUB Group Ltd (ASX: AUB), $1.7 billion

Dicker Data Ltd (ASX: DDR), $2.15 billion

Charter Hall Long WALE REIT (ASX: CLW), $3.17 billion

Wesfarmers Ltd (ASX: WES), $51.83 billion

Macquarie Group Ltd (ASX: MQG), $65.48 billion

Westpac Banking Corp (ASX: WBC), $69.64 billion

National Australia Bank Ltd (ASX: NAB), $90.38 billion.

(Market capitalisations as of 14 July 2022)

Why our Foolish writers love these ASX dividend shares

Dusk Group Ltd

What it does: Dusk is a retailer that specialises in candles, fragrances, and other homewares.

By Sebastian Bowen: Dusk is one of those companies that boomed during COVID but now seems to have lost favour with investors.

Although the company has staged something of a comeback in the past month, it remains down more than 35% over the year to date. However, this steep fall has pushed Dusk’s dividend yield up substantially.

On recent pricing, Dusk shares offer a fully franked yield of more than 9.5% (or 13.5% grossed-up).

Even if Dusk has to trim its dividends this financial year (which is very possible), that 9.5% gives the company a lot of wiggle room to still offer investors a very attractive yield going forward.

By Aaron Teboneras: The Dicker Data share price has continued to travel higher since the start of the month, up 14.6%.

The company is expected to reveal its next quarterly dividend in the upcoming earnings season in August.

For the first interim dividend declared on 11 May, Dicker Data paid 13 cents per share to eligible shareholders.

With the company previously proposing to maintain its dividend policy, this could be a good option for income investors.

The total dividends expected to be paid this year are 54 cents per share, an increase of 44%. This includes the final dividend of 15 cents per share paid in March.

Based on the share price at the time of writing, Dicker Data has a trailing dividend yield of 3.69%.

Motley Fool contributor Aaron Teboneras owns shares in Dicker Data Ltd.

Charter Hall Long WALE REIT

What it does: Charter Hall Long WALE REIT is a real estate investment trust (REIT) that owns a diversified portfolio of properties across a number of different sectors. These include agri-logistics, social infrastructure, office, industrial and logistics, retail, service stations, and hospitality. The REIT says 99% of its tenants are blue chip, being government, ASX-listed, multinational, or national companies.

By Tristan Harrison: The REIT has a net tangible asset (NTA) per unit of $6.08 after its latest quarterly update, so the current Charter Hall Long WALE REIT share price is at a 27% discount to this.  

It has a long weighted average lease expiry (WALE) of around 12 years, meaning the business has long-term income security and visibility, in my opinion.

Income growth is driven by annual rent increases on all leases, with 46% linked to CPI inflation and 54% with an average fixed increase of 3.1%.  

The estimated distribution of at least 30.5 cents in FY22 translates to a forward yield of 6.9%. 

Motley Fool contributor Tristan Harrison does not own shares in Charter Hall Long WALE REIT.

Wesfarmers Ltd

What it does: Wesfarmers is a diversified company with a large retail portfolio including many top names like Bunnings Warehouse, Kmart, Target and Officeworks. The company also has energy & fertiliser and industrial divisions.

By Bernd Struben: Wesfarmers has long been a reliable dividend payer, making two annual payments even throughout the 2020 pandemic crunch.

Over the past five years, the company has paid out $10.49 in fully franked dividends. In FY22, it paid out $1.70, giving it a current trailing dividend yield of 3.8%.

In the first half of FY22, Wesfarmers earned $17.6 billion in revenue, with 51% of that coming from Bunnings. Yet investors pushed down the share price amid sliding profits due to pandemic headwinds. Net profit after tax (NPAT) in H1FY22 was down 14% year over year.

With the pandemic hopefully fading, and Wesfarmers expanding its reach with a new health division, this is an income stock to consider.

Motley Fool contributor Bernd Struben does not own shares in Wesfarmers.

Macquarie Group Ltd

What it does: Macquarie is a financial services giant. It provides banking, asset management, and advisory services. 

By Brooke Cooper: Macquarie is an S&P/ASX 200 Index (ASX: XJO) staple and one of the market’s largest companies. It’s also been tipped as a long-term winner by broker Morgans, The Motley Fool Australia’s James Mickleboro recently reported.  

The broker likes the company’s exposure to infrastructure and renewables, as well as its growing position in the Australian mortgage market. 

Macquarie is currently trading with a yield of around 3.6%, having paid out $6.22 per share in dividends over the past 12 months. And Morgans expects that to grow in the future. 

The broker believes the stock will offer investors $7.07 per share in dividends this financial year. It’s also tipping $7.47 per share next financial year. 

Motley Fool contributor Brooke Cooper does not own shares in Macquarie Group Ltd.

Westpac Banking Corp

What it does: Established in 1817, Westpac is Australia’s oldest bank. As well as the eponymous Westpac brand, it owns the Bank of Melbourne, Bank SA, RAMS, and St George brands.

By James Mickleboro: It has been a difficult 12 months for this big four bank. Since this time last year, the Westpac share price has lost 20% of its value.

This has been driven partly by concerns that Australia could fall into a recession, which could put pressure on loan growth and bad debts.

While this is disappointing, I think the risks are all known and priced in now and this could be a buying opportunity for investors. Especially those that are looking for attractive yields as inflation rears its ugly head.

Consensus estimates for Westpac dividends are $1.23 per share in FY22, $1.29 per share in FY23, and then $1.46 per share in FY24.

Based on the current Westpac share price, this will mean yields of about 6.1%, 6.4%, and 7.2% respectively.

Motley Fool contributor James Mickleboro owns shares in Westpac Banking Corp.

National Australia Bank Ltd

What it does: NAB is one of the big four banks in Australia. It provides banking and financial services here in Australia and New Zealand. NAB also has operations in the United Kingdom and the United States. It is valued at a $90.2 billion market capitalisation.

By Zach Bristow: Trading on a respectable 5% trailing dividend yield, the National Australia Bank Ltd (ASX: NAB) share price is another ASX dividend player worth mentioning. 

NAB is forecast to print revenue of $20 billion this year, according to Refinitiv consensus data. On this revenue, it is projected to claim around $7 billion in net income. That’s around a 7% year-over-year gain. 

That leaves a sizeable amount left over to return to shareholders. 

Analysts forecast NAB to pay a $1.48 per share dividend in FY22, with this figure growing to $1.61 in FY23, and $1.73 in FY24, per Refinitiv. 

This represents a growth schedule of 16.5%, 8.9%, and 7.4% over these coming two years. That’s well ahead of the current level of inflation.

Motley Fool contributor Zach Bristow does not own shares in National Australia Bank.

The post Top ASX dividend shares to buy in July 2022 appeared first on The Motley Fool Australia.

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More reading

• Macquarie shares ‘a clear beneficiary’ of global green energy push: fundie
• Setting the pace: Why ASX 200 bank shares are feeling the pinch on Friday
• Here’s what might happen to the NAB share price in FY2023
• Why analysts say these excellent ASX dividend shares are buys
• Why the yield you’re getting on ASX dividend shares may not be as advertised

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Dicker Data Limited. The Motley Fool Australia has positions in and has recommended Dicker Data Limited and Wesfarmers Limited. The Motley Fool Australia has recommended Austbrokers Holdings Limited, Dusk Group Limited, 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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