Category: Stock Market

The Zip Co Ltd (ASX: ZIP) share price is heading south during mid-afternoon trade on Monday.

At the time of writing, the buy now, pay later (BNPL) company’s shares are down 5.66% to 50 cents a share.

For context, the S&P/ASX 200 Financials (ASX: XFJ) sector is 0.59% lower to 5,878.7 points amid a broader sell-off today.

What dragging Zip shares down today?

While the broader market may be contributing to the Zip share price fall today, investors are digesting the latest news surrounding the company.

According to Business News Australia, Zip is shutting down its money management app Pocketbook.

This comes after the embattled company struggles with higher-than-expected bad debts along with unfavourable macroenvironmental conditions, including rising interest rates.

Acquired by Zip in 2016 for $7.5 million, Pocketbook is Australia’s largest personal finance management app with more than 800,000 users.

The software analyses and tracks spending by category and value, providing users with budgeting tools and offering better control of finances.

Zip chief product officer Travis Tyler commented:

Zip’s operating environment has changed significantly in the last few months and as a result we have adapted our strategy accordingly in order to accelerate our path to global profitability.

With this in mind, Zip has decided to close the Pocketbook app in order to reprioritise resources and focus on delivering sustainable profitability in our core ANZ market.

The closing of Pocketbook will come into effect on 5 August.

Despite an 89% increase in revenue, Zip posted a staggering loss of $172.7 million for the first half of FY22.

With total cash on hand down 19% to $266.8 million for the period, Zip is making changes to preserve its cash balance.

A number of experts are predicting the BNPL sector to fall further as tighter regulation looms in mid-2022.

As reported by The Guardian, Australian financial services minister Stephen Jones said that BNPL products would be treated the same as credit products.

Zip share price summary

Over the past 12 months, the Zip share price has plummeted almost 94%, with year-to-date performance down 88%.

It seems a long time ago that the company’s shares rocketed to an all-time high of $14.53 in February 2021.

Based on today’s price, Zip has a market capitalisation of approximately $345 million.

The post Own Zip shares? BNPL player shuts down finance app to focus on profitability appeared first on The Motley Fool Australia.

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More reading

• Down 6%, why Monday is not a fun day for the Zip share price
• Why did some ASX BNPL shares plummet more than 90% in FY22?
• Guess which 2 ASX shares were the best and worst All Ordinaries performers of FY22
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Why Block, Bubs, Infomedia, and Zip shares are dropping

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 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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Crypto mining may appear to take place in the virtual realm.

But the reality is that the blockchains behind these virtual tokens are maintained by numerous powerful, energy hungry computers.

Take Bitcoin (CRYPTO: BTC), the world’s original crypto, for example.

Bitcoin relies on a proof-of-work (PoW) protocol to verify transactions, which requires a series of miners along the blockchain working in tandem. While the system works, in today’s carbon weary world, the amount of electricity used is mind boggling.

In fact, according to a study by the University of Cambridge, in 2020 Bitcoin used as much energy as all of the Netherlands’ 17 million people. The university also revealed that Bitcoin used almost as much energy as all of the global gold mining activity that year.

But just like corporations are working to green their images and minimise their environmental footprints, so too are a number of pioneering cryptos.

One of the best means for cryptos to go green is to shift from the proof-of-work protocol that Bitcoin still relies on, to what’s known as proof-of-stake (PoS). This sees miners staking some of their own holdings to participate in verification processes. Requiring a lot fewer computers, proof-of-stake has the potential to significantly reduce associated emissions along with reducing overall costs and increasing speeds.

So, which five cryptos are leading the green transition charge?

For insight into that answer, we turn to Coinspot market analyst, Lee Daniels.

World’s number eight crypto greening its credentials

First up, Daniels points to Cardano (CRYPTO: ADA). Currently trading for 45.4 US cents, Cardano has a market cap of US$15.4 billion, making it the eighth biggest token in virtual circulation.

“The digital currency is named after Ada Lovelace, a 19th century mathematician who is recognised as the world’s first computer programmer,” Daniels said.

“Cardano’s PoS blockchain platform has been built with the purpose of igniting the ‘positive change the world needs’,” he added. “Users can utilise ADA as a secure exchange of value and every transaction is recorded under the Cardano blockchain. Cardano works like Ethereum (CRYPTO: ETH), enabling smart contracts and decentralised applications.”

Cardano hit all time highs of US$3.10 on 2 September last year.

ALGO and EOS

Two other cryptos that are spruiking their green credentials are Algorand (CRYPTO: ALGO), and EOS (CRYPTO: EOS).

Algorand, a decentralised blockchain-based network, supports a range of applications.

Currently worth 30.4 US cents, it has a market cap of US$2.1 billion, placing it at number 28 in terms of size.

As for its sustainable nature, Daniels explains:

Algorand was the world’s first pure PoS blockchain. Its network was designed to minimally impact the environment, allowing for faster and cheaper transaction times. Committed to being the greenest blockchain, Algorand is built on an open-source, carbon-negative network and sets the industry standard in sustainability to combat CO2 emissions.

Algorand hit record highs of US$3.28 on 21 June 2019.

As for EOS, it’s “the native cryptocurrency of EOSIO, an open source platform for blockchain innovation and performance”.

EOS is currently trading for 99.2 US cents, with a total market value of just under US$1 billion.

It’s similar to Ethereum, Daniels said, in that it’s a smart platform for the development of decentralised applications:

EOSIO uses a unique consensus model called Delegated Proof-of-Stake model (DPoS), which allows it to process millions of transactions per second. It also features a voting and delegation mechanism that makes the process more democratic, allowing users to spend their coins to vote for various delegates.

EOS hit record highs of US$22.89 on 29 April 2018.

Two other leading cryptos with an eye on the environment

Next up we have IOTA (CRYPTO: MIATA).

Trading for 28.9 US cents, IOTA is the 54^th biggest crypto, with a market cap of US$804 million.

IOTA, Daniels said, “is designed for the ‘Internet-of-Things’(IoT), handling payments and other transactions between physical devices that are connected to the internet”.

As for its green credentials, he explained:

IOTA exists to overcome the cost and scalability limitations of blockchain by its proprietary technology called the ‘Tangle’. The Tangle’s data structure consists of a group of data nodes that flows unidirectionally, unlike that of blockchain structure. IOTA is designed to accommodate devices such as sensors that operate in a low-energy environment.

IOTA hit all time highs of US$5.69 on 19 December 2017.

Which brings us to the fifth crypto with a green tinge, Stellar (CRYPTO: XLM).

Stellar is trading for 10.6 US cents and has a current market cap of US$2.7 billion, number 24 on the top-100 list in terms of size.

So what is Stellar and why is it considered a green crypto?

According to Daniels:

Stellar is an open network for storing and saving money. Users can create, send and trade digital representations of all forms of money like USD, peso or Bitcoin.

The software runs across a decentralised, open network and handles millions of transactions each day… Stellar features a unique algorithm called the Stellar Consensus Protocol (SCP), which strives to be highly configurable, faster, and more highly energy efficient than Bitcoin’s PoW method.

Stellar hit all-time highs of 93.8 US cents on 4 January 2018.

The post 5 cryptos boosting their green credentials in 2022 appeared first on The Motley Fool Australia.

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More reading

• Own Zip shares? BNPL player shuts down finance app to focus on profitability
• Here are the 5 best ASX 200 bank shares of FY22
• Novonix share price sinks 8% following ‘gun shy’ broker note
• What Coinbase is building during the crypto winter
• ASX 200 mining shares glide lower as expert reduces commodity targets

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 Bitcoin and Ethereum. The Motley Fool Australia has positions in and has recommended Bitcoin and Ethereum. 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 that has just passed us by – FY22 – was something of a mixed bag for ASX shares and the S&P/ASX 200 Index (ASX: XJO). Between 1 July 2021 and 30 June 2022, the ASX 200 went backwards by 10.19%. But how did ASX 200 bank shares do?

ASX banks, of course, form a major constituency of the ASX 200. Indeed, the big four ASX banks are currently the second, fourth, fifth and sixth largest ASX 200 shares on the share market by market capitalisation. Together, these four companies make up almost 20% of the entire ASX 200’s weighting as it currently stands.

So if the ASX 200 had such a dreary year, it immediately tells us that it’s likely that the ASX banking sector also had a tough FY22. But time to put some numbers to these predictions and see if they are sound.

Here are the 5 best ASX bank shares of FY22

So our fifth-best performing ASX bank share last financial year was none other than Australia and New Zealand Banking Group Ltd (ASX: ANZ). ANZ shares started FY22 at $28.15 but ended up finishing the financial year at just $22.03.

That means ANZ shares gave investors a loss of 21.74% for FY22. Not even ANZ’s trailing dividend yield of 6.35 % could make up for a loss like that.

Bendigo and Adelaide Bank Ltd (ASX: BEN) may not be a member of the big four. But it was nonetheless, the fourth-best performing ASX bank share last financial year. Bendigo Bank started out at $10.49 a share but finished up last month at $9.07. That’s a loss for FY22 of 13.54%.

Next up we have Commonwealth Bank of Australia (ASX: CBA), the ASX 200’s largest bank share by market cap. CBA shares indeed had a rough FY22, beginning at $99.87 but finishing up at $90.38. That’s a loss of 9.5%.

Our ASX banking silver medallist is another big four bank in National Australia Bank Ltd (ASX: NAB). NAB was the only big four bank to record a positive share price movement over FY22. NAB shares started July 2021 at $26.22 each but ended up at $27.39 last month. That’s a gain of 4.46% for FY22.

The ASX 200’s top bank of FY22…

And our best-performing ASX bank share for FY22 is… none other than Macquarie Group Ltd (ASX: MQG). Macquarie is arguably not a bank in the same way the other companies on this list are. Its banking division makes up a small portion of its overall earnings base.

But we can’t ignore that Macquarie shares beat out every other ASX banking share over FY22. Macquarie rose from $156.43 to $164.31 over the financial year just gone, a gain of 5.04%.

So that’s our five best ASX 200 bank shares of FY22 revealed. It will be interesting to see if these same names top the best banks of FY23. But we’ll have to wait and see.

The post Here are the 5 best ASX 200 bank shares of FY22 appeared first on The Motley Fool Australia.

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More reading

• ASX 200 midday update: EML crashes amid CEO exit, Costa and Domino’s sink on broker downgrades
• How does the CBA dividend stack up against its ASX 200 peers?
• Is this a good time to go digging for ASX 200 mining shares for FY23?
• ANZ shares offer the best dividend yield of the big four in July
• How did ASX 200 travel shares go in FY22?

Motley Fool contributor Sebastian Bowen has positions in National Australia Bank 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 Bendigo and Adelaide Bank Limited. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Novonix Ltd (ASX: NVX) share price has started the week deep in the red.

In afternoon trade, the battery technology company’s shares are down 8% to $2.26.

This means the Novonix share price is now down almost 80% since the start of the year.

Why is the Novonix share price sinking?

Investors have been selling down the company’s shares on Monday in response to a cautious broker note out of Morgans.

For several months the broker has had a hold rating and $4.88 price target on the Novonix’s shares. While only a hold rating, this price target no doubt sparked hopes that there was significant upside ahead for its shares over the next 12 months.

However, those hopes have been extinguished today after Morgans took an axe to its price target.

According to the note, the broker has retained its hold rating but cut its price target by 39% to $2.88.

What did Morgans say?

Morgans notes that the risk off sentiment is now reflected in the Novonix share price but it is still feeling “gun shy.”

It explained:

We have deferred our expectations for revenue as commissioning continues on the Riverside anode facility. NVX has not provided further updates on the progress of a firm offtake with Samsung and we suspect it will take longer than hoped.

The market is pricing in risk much more aggressively and NVX has not yet proven the viability of its anode business with blue chip clients at scale.

We have therefore reduced our target price to $2.98 (-39%) with a higher assumed cost of equity and a later assumed ramp up of production.

All in all, it appears as though the broker doesn’t feel the risk reward on offer with Novonix’s shares is compelling enough at this point despite its sizeable decline in 2022.

The post Novonix share price sinks 8% amid ‘gun shy’ broker appeared first on The Motley Fool Australia.

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More reading

• These 3 ASX 200 lithium stocks are exploding on Friday
• Why was FY22 a rollercoaster period for the Novonix share price?
• Why did the Novonix share price slide nearly 36% in June?
• These were the worst performing ASX 200 shares in June
• Novonix share price down 6% on Tuesday, what’s happening?

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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Shares of cryptocurrency stock Coinbase Global (NASDAQ: COIN) have dropped over 85% from their peak in late 2021 as the crypto market has imploded. Trading is down, prices are down, and there’s concern that margins will be under pressure all year.

As terrible as the operating conditions are today, Coinbase continues to build for the future. And if it can execute on plans to become more than just an exchange, this could be one of the biggest winners in the future of crypto and Web3.

The exchange problem

Coinbase has made its money by being a popular crypto exchange, particularly in the U.S. But there are other exchanges with lower fees, and there will naturally be pricing pressure for Coinbase to lower transaction costs for all users. Combine that with the decline in transaction volume overall and you have a recipe for declining revenue and margins in 2022. 

In the first quarter of 2022, retail trading volume plummeted from $177 billion to $74 billion sequentially. A vast majority of revenue is generated from retail traders, so this was the biggest reason for the decline in revenue and earnings.

There’s no easy fix to the exchange problem. Margins will continue to be squeezed and retail traders may not be coming back anytime soon. So Coinbase needs to look elsewhere for revenue.

Business is where the money is

Coinbase may be known for being a popular exchange for traders, but the future of its business may be business services. Subscription and Services revenue jumped 169% in the first quarter of 2022 versus a year ago, while transaction revenue dropped 34%.

There are a number of opportunities like staking services, which take a 25% commission for helping users stake cryptocurrencies. Custodial fees were also $31.7 million, and I think that could grow as the company offers security products to users. Coinbase is looking to combine its app and wallet into an easier to use platform, which could make onboarding users easier.

COIN Revenue (Quarterly) data by YCharts.

Cloud services could be a big part of the company’s future as well as developers look to build faster in Web3. There’s no point in building wallet integrations, commerce tools, or trading capabilities when they’re available through Coinbase Cloud. This could be a cloud giant for Web3 companies.

For example, Coinbase is one of the providers of Shopify’s crypto payments platform, and the same tools are available to anyone. If you think commerce is going to be disrupted by “crypto rails” — or cryptocurrency being the path the funds move from a customer to a merchant — rather than credit or debit cards, Coinbase could be a huge player.

Crypto and NFTs will someday be invisible

If I had to sum up the case for Coinbase long term, it’s that no company could make cryptocurrencies and NFTs invisible better than Coinbase. As someone told me at the world’s largest non-fungible token conference NFT.NYC, “this should be a non-event for most people.”

What does that mean? It means that users shouldn’t have to worry about remembering security phrases that could compromise their accounts or wallet integrations or signing nefarious transactions in Web3. They should be able to feel comfortable using Web3 tools, and the technical details should fade into the background.

I think this is what we’re seeing with Coinbase integrating more of its app and wallet products together, introducing an NFT marketplace, and having “Pay with Coinbase” available to merchants. When concert tickets move to the blockchain, it’ll be a nonevent because the tickets will simply go to your Coinbase App. Or when a coffee shop sends you a loyalty NFT, it may sit in the background of your Coinbase App, invisible to you because it lives on the blockchain but can be hidden from sight.

Focus on the next billion users

Coinbase is building the tools to onboard the next billion people to crypto, NFTs, and Web3 more broadly. That’s what the company is doing in this bear market, and if it succeeds, the company could come out of this stronger than ever. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post What Coinbase is building during the crypto winter appeared first on The Motley Fool Australia.

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More reading

• Here’s why Coinbase stock fell 81% in the first half of 2022
• Coinbase Plunges on Crypto and Celsius Fears, but This Is the Real Threat

Travis Hoium has positions in Coinbase Global, Inc. and Shopify. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Coinbase Global, Inc. and Shopify. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify. 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.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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S&P/ASX 200 Index (ASX: XJO) mining shares are dragging on the market today. It comes as one major bank reportedly drops its expectations for base metal prices.

The S&P/ASX 200 Materials Index (ASX: XMJ) – home to the market’s major miners – is tumbling 2.29% right now. Meanwhile, the broader index is down 0.7%.

Many of the sector’s biggest names are dragging it lower on Monday. Here’s how some of the ASX 200’s favourite mining shares are performing:

• Fortescue Metals Group Limited (ASX: FMG) down 2.02%
• BHP Group Ltd (ASX: BHP) down 2.58%
• Rio Tinto Limited (ASX: RIO) down 2%
• IGO Ltd (ASX: IGO) down 2.86%
• Nickel Industries Ltd (ASX: NIC) down 0.52%

ASX 200 mining shares suffer amid bearish sentiment

Most ASX 200 mining shares are falling amid news Australia and New Zealand Banking Group Ltd (ASX: ANZ) dropped its short-term targets for some base metals.

The bank’s chief economist Richard Yetsenga has dropped targets for aluminium, zinc, and nickel, the Australian Financial Review reports.

The expert was quoted as saying:

Persistently high inflation is causing the central banks of developed economies to tighten monetary policy, risking a reversal of the economic rebound.

Supply side issues can’t be ignored. Mining headwinds associated with environmental, social and governance (ESG) requirements are exacerbating labour shortages and high-energy costs, stalling plans to boost the output of copper, aluminium, and nickel. This is on top of the disruptions caused by Russia’s invasion of Ukraine.

Not all was dire, however. Yetsenga believes China’s COVID-19 policy could support demand for metals through the remainder of 2022 while the other metals still hold upside risks.

The prices of aluminium and nickel were trading at their lowest in more than a year last week while the price of zinc hit its lowest point since October.

The price of copper also spiralled to a 19-month low last week although Yetsenga reportedly also noted investor position for the orange metal is now bearish.

The post ASX 200 mining shares glide lower as expert reduces commodity targets appeared first on The Motley Fool Australia.

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More reading

• Here’s a look at what might happen to BHP shares in FY2023
• Is this a good time to go digging for ASX 200 mining shares for FY23?
• BHP share price on watch as court clears the way for potential $9 billion ‘day of reckoning’
• Where is the Fortescue share price headed in 2023?
• Broker names 2 ASX 200 dividend shares to buy in July

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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The Costa Group Holdings Ltd (ASX: CGC) share price has been sold off on Monday.

In morning trade, the horticulture company’s shares were down as much as 12% to a two-year low of $2.52 before being paused.

What’s going on with the Costa share price?

The catalyst for the Costa share price selloff on Monday appears to have been the release of a broker note out of Credit Suisse this morning.

According to the note, the broker has downgraded the company’s shares to a neutral rating and slashed the price target on them by 24% to $2.80.

Credit Suisse made the move after revising its earnings estimates lower. These revisions were driven largely by weaker avocado prices, supply chain headwinds, and its expectation for a poor citrus season.

In respect to the latter, the broker notes that the current citrus season is on track to fall well short of expectations due to diseases impacting harvests.

As a result, it is now forecasting EBITDA well short of consensus estimates.

It expects EBITDA of $244.3 million in FY 2022 and $280.5 million in FY 2023. This compares to consensus estimates of $275 million and $302.3 million, respectively.

Is there anything else?

As things stand, it is unclear if there is anything else that is weighing on the Costa share price. Particularly given that a 12% decline seems quite severe for a broker downgrade to neutral.

However, all will be revealed later this afternoon. That’s because the company appears to have been sent a price query request or speeding ticket from the stock exchange operator. This happens when a share makes a big move on high volume and no announcement.

The pause in trading announcement states:

Trading in the securities of the entity will be temporarily paused pending a further announcement.

The post Why is the Costa share price sinking 12% to a two-year low? appeared first on The Motley Fool Australia.

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More reading

• ASX 200 midday update: EML crashes amid CEO exit, Costa and Domino’s sink on broker downgrades
• Top broker names 3 of the best ASX 200 shares to buy in FY23

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 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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Despite travelling 1.45% higher to $7.01 today, the Bank of Queensland Limited (ASX: BOQ) share price is down 13% in 2022.

While the regional bank hasn’t made any price-sensitive announcements since its half-year results in April, investors are continuing to sell.

Bank of Queensland shares have dropped around 18% despite reporting growth across all key financial metrics.

Let’s take a look at what might have weighed on Bank of Queensland shares lately.

What’s happened to Bank of Queensland shares?

It appears the Bank of Queensland share price is being dragged down by negative investor sentiment.

The S&P/ASX 200 Financials (ASX: XFJ) has tumbled 8% in the last six weeks amid concerns about an impending recession.

Aggressive rate hikes by major central banks to cool down inflation has put selling pressure across global markets.

In particular, the United States reported a 16-month low in consumer confidence as market conditions continue to falter.

Notably, Bank of Queensland shares hit a 52-week low of $6.39 in late June before staging a mini rebound.

Interestingly, a number of directors within the company have decided to take advantage of the share price weakness.

Non-executive chair Patrick Allaway bought 15,000 Bank of Queensland shares for an average price of $6.93 apiece in June.

Further, non-executive director Mickie Rosen and managing director and CEO George Frazis picked up 10,000 and 14,750 shares, respectively. Both transactions were conducted via an on-market trade in June with the buyers paying an average price of less than $6.90 a share.

This could be considered an absolute steal in light of the projections of a couple of brokers who weighed in on the company’s outlook recently.

As reported by ANZ Share Investing, Citi cut its price target for Bank of Queensland shares by 5.4% to $8.75.

Based on today’s price, this implies an upside of almost 25% for investors.

On the other hand, Macquarie raised its outlook to “outperform” from “neutral” for the bank’s shares.

Again, although its analysts reduced the price target by 8.6% to $8.00, it still reflects a 14% improvement from where the bank’s share price trades now.

Bank of Queensland share price snapshot

Market volatility on the ASX has led Bank of Queensland shares to sink 20% over the last 12 months.

These losses have mostly occurred during the past few months.

Bank of Queensland commands a market capitalisation of roughly $4.53 billion.

The post Down 13% in 2022. Is the Bank of Queensland share price in bargain territory? appeared first on The Motley Fool Australia.

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More reading

• Experts name these ASX 200 dividend shares with big yields as buys
• Leading brokers name 3 ASX shares to buy today
• June was a terrible month for ASX 200 bank shares. Here’s why
• Do Bank of Queensland shares really offer a dividend yield above 6%?
• Why is the Bank of Queensland share price outperforming today?

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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Now that FY2022 is well in the rear-view mirror, it’s a good time to take stock and consider what FY2023 might have in store for the ASX and some of its most prominent shares. So, let’s check out the BHP Group Ltd (ASX: BHP) share price.

BHP is the largest share on the S&P/ASX 200 Index (ASX: XJO), and by a mile too. It currently makes up around 10% of the entire ASX 200 by weighted market capitalisation. That’s significantly more than the next-largest share, Commonwealth Bank of Australia (ASX: CBA), at just over 8%.

Over the financial year just passed, BHP shares didn’t have a great time of it though. As my Fool colleague Tristan Harrison covered earlier this month, the BHP share price fell by a nasty 17.5% between 1 July 2021 and 30 June 2022.

That was significantly worse than what the broader ASX 200 delivered, which was a loss of 10.19%. Not even the monster dividend payments that shareholders received over FY2022 were enough to erase this loss.

But that’s all in the past now. So could FY2023 be a better time for BHP shares?

Are BHP shares an FY2023 buy today?

Well, as we covered just this morning, one broker who thinks the next 12 months look promising for BHP shares is Morgans. This ASX broker has recently retained an add rating on the miner, complete with a 12-month share price target of $48.30. That would represent an upside of more than 25% from the current share price of $38.40 if accurate.

Morgans likes BHP’s “relatively low risk given its superior diversification relative to its major global mining peers”. It went on to say that “we see BHP as holding an attractive combination of upside sensitivity, balance sheet strength and resilient dividend profile”.

Last week, we covered how brokers at Macquarie are also bullish on BHP. Macquarie has a 12-month share price target of $50, which would result in an even higher potential upside of 30% or so. But these bullish opinions aren’t universal.

We also looked at how broker Morgan Stanley is “equal weight” on BHP shares today, with a share price target of $40.05. Further, Ord Minnett is rating the company as a hold today, with a target price of $44.

Bot of these less-enthusiastic brokers are worried that lower commodity prices going forward will weigh on the miner.

So a bit of a mixed bag when it comes to what the experts are thinking will happen to BHP shares in FY2023. Only time will tell which one proves to be accurate.

Meanwhile, the current BHP share price gives this ASX 200 mining giant a market capitalisation of $194.29 billion, with a trailing dividend yield of 12.49%.

The post Here’s a look at what might happen to BHP shares in FY2023 appeared first on The Motley Fool Australia.

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More reading

• Is this a good time to go digging for ASX 200 mining shares for FY23?
• BHP share price on watch as court clears the way for potential $9 billion ‘day of reckoning’
• Broker names 2 ASX 200 dividend shares to buy in July
• Own BHP shares? Top broker warns of looming oversupply of iron ore in 2H 2022
• Why BHP and other ASX mining shares are making strides on Friday

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

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The Telstra Corporation Ltd (ASX: TLS) share price is an interesting consideration as an ASX dividend share at its current level.

Telstra is the largest telecommunications business in Australia, with a strong presence in both mobile and home broadband. It also has exposure to a number of other telco areas with Telstra Health, as well as a presence in the Asia Pacific region with its Digicel Pacific acquisition.

The company has been committed to paying investors a high level of dividend income for an extended period of time.

Even if the dividend has been variable over the last couple of decades, it has remained at a high dividend payout ratio. In other words, even though Telstra’s dividends and net profit after tax (NPAT) have changed over the years, it has consistently paid out a relatively high proportion of its profit to shareholders.

Since 2019, Telstra has paid shareholders a half-yearly dividend of eight cents per share every six months.

It seems that Telstra is on track to pay another eight cent per share dividend for the second half of FY22.

How big will the Telstra dividend be in FY23?

Dividends are not guaranteed. Even if the telco has provided comments or guidance about its future dividend, it’s still not 100% certain.

Having said that, let’s look at what Telstra has said regarding its upcoming dividends.

As part of its T25 strategy, the telco outlined its ambition to increase its underlying return on invested capital to around 8% by FY23. It’s also targeting a compound annual growth rate (CAGR) of mid-single digits for underlying earnings before interest, tax, depreciation and amortisation (EBITDA) and high-teens for earnings per share (EPS) between FY21 to FY25.

Telstra said:

Through delivery on its T25 commitments, Telstra is confident in maintaining a minimum 16 cent per share fully franked dividend, subject to no unexpected material events and the requirements of its capital management framework.

Based on an estimated 16 cents per share dividend, the current Telstra share price offers a potential grossed-up dividend yield of 5.9% in the 2023 financial year.

Is the dividend ever going to grow again?

Telstra said that by implementing its T25 strategy, it will become a “vastly different company”. Delivering profit growth will certainly help as it seeks to grow its dividends “over time”.

However, it acknowledged that it needs to grow underlying earnings in line with its financial ambitions, and grow its franking balance in a bid to grow its fully franked dividends.

It intends to grow profit by extending its 5G coverage, cutting costs, earning a higher margin through wireless home broadband, and increasing its mobile prices in line with inflation.

Looking at estimates on CMC Markets, the FY24 dividend forecast is 17.7 cents, implying a 10.6% increase in the dividend. That higher dividend translates into a forward grossed-up dividend yield of 6.5%.

The post How big will the Telstra dividend yield be in FY23? appeared first on The Motley Fool Australia.

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More reading

• Here’s why brokers rate these ASX dividend shares as buys
• Telstra share price in the red despite taking out green crown
• What’s the outlook for ASX 200 dividend shares in FY23?
• Why did the Telstra share price beat the market in FY22?
• Telstra share price rises as Optus folds to inflation

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended 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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