Category: Stock Market

On Friday, the S&P/ASX 200 Index (ASX: XJO) finished a tough week on a high. The benchmark index stormed 1.9% higher to 7,075.1 points.

Will the market be able to build on this on Monday? Here are five things to watch:

ASX 200 expected to rise again

The Australian share market looks set to start the week strongly following a great night on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 54 points or 0.8% higher this morning. On Wall Street, the Dow Jones rose 1.5%, the S&P 500 climbed 2.4%, and the Nasdaq stormed 3.8% higher. The latter bodes well for the tech sector today.

Oil prices jump

Energy producers Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could have a good start to the week after oil prices stormed higher. According to Bloomberg, the WTI crude oil price rose 4.1% to US$110.49 a barrel and the Brent crude oil price climbed 3.8% to US$111.55 a barrel. This follows supply concerns as China looks to ease COVID restrictions.

Goodman Q3 update

The Goodman Group (ASX: GMG) share price will be on watch when the industrial property company releases its third quarter update. Goodman has provided guidance for earnings per share growth of 20% in FY 2022. However, a number of brokers believe that the company will outperform this. This could mean the market will be looking for an upgrade to its guidance this morning.

Gold price rises

Gold miners Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) could have a poor start to the week after the gold price weakened on Friday night. According to CNBC, the spot gold price is down 0.9% to US$1,808.2 an ounce. A stronger US dollar weighed on the precious metal.

Aristocrat Leisure share price is in the buy zone

The Aristocrat Leisure Limited (ASX: ALL) share price could be in the buy zone according to the team at Goldman Sachs. Ahead of the gaming technology company’s half-year results this month, the broker has retained its buy rating and $43.00 price target on its shares. Goldman expects Aristocrat to deliver a 29% lift in net profit to $531 million for the half.

The post 5 things to watch on the ASX 200 on Monday appeared first on The Motley Fool Australia.

More reading

• These were the best performers on the ASX 200 last week
• Why I would invest $10,000 into these ASX 200 shares right now
• These were the worst performers on the ASX 200 last week
• Here are the top 10 ASX shares today
• Why did the Telstra share price rebound nearly 2% on Friday?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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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Last week saw a number of broker notes hitting the wires once again. Three buy ratings that investors might want to be aware of are summarised below.

Here’s why brokers think investors ought to buy them next week:

IDP Education Ltd (ASX: IEL)

According to a note out of UBS, its analysts have retained their buy rating and $35.90 price target on this student placements and language testing company’s shares. This follows news that its CEO, Andrew Barkla, is stepping down from the role in the coming months. While UBS acknowledges that the news is a negative, it remains very positive on the company’s prospects and sees it as one of the best growth shares on the Australian share market. The IDP share price ended the week at $23.17.

Webjet Limited (ASX: WEB)

A note out of Goldman Sachs reveals that its analysts have retained their buy rating and $6.90 price target on this online travel agent’s shares. Ahead of the release of Webjet’s results next week, the broker has reiterated its buy rating. It feels that the company’s outlook is very positive thanks to the growing online channel, its Bedbanks business, and strong balance sheet. The latter gives it opportunities to make bolt-on acquisitions. The Webjet share price was fetching $5.47 at Friday’s close.

Xero Limited (ASX: XRO)

Another note out of Goldman Sachs reveals that its analysts have retained their buy rating but trimmed their price target on this cloud accounting platform provider’s shares to $118.00. This follows the release of a full-year result which fell a touch short on earnings and subscribers. Despite this, Goldman remains positive and continues to forecast strong growth over the coming years and sees value in its shares after recent weakness. The Xero share price ended the week at $84.16.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

More reading

• 3 top ASX growth shares I’d buy next week
• Here are the top 10 ASX shares today
• Nearmap share price jumps 9% on Friday
• Why 5E Advanced Materials, Block, Neometals, and Xero shares are racing higher
• ASX 200 midday update: Block and Xero rebound, gold miners fall

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 Idp Education Pty Ltd and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Webjet 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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There are plenty of ASX dividend shares available for income investors to look at. I plan to hold Rural Funds Group (ASX: RFF) forever because of the income it can produce.

Rural Funds operates as a real estate investment trust (REIT) that owns farmland and agricultural assets across Australia.

There are a few different reasons why I’m planning to keep holding Rural Funds in my portfolio for many years to come. Let’s take a look.

Diversification

Rather than just a single property in one location, Rural Funds owns a diverse portfolio of farms.

The ASX dividend share owns properties across agricultural sectors including cattle, vineyards, almonds, macadamias and cropping (sugar and cotton).

I think it is useful for Rural Funds to own different types of farmland for diversification purposes. For example, if the REIT’s portfolio were limited to just cattle farms, the investment ‘universe’ would be smaller. Diversification also allows management to look at a wider array of potential opportunities.

Rural Funds’ properties are also spread over different climatic conditions. In times of variable weather, this can lower short-term and longer-term risks. In addition, Rural Funds owns substantial water entitlements for its tenants to use.

Speaking of tenants, the REIT’s tenant base is mostly comprised of large, stable businesses. Some of the largest ones include Select Harvests Limited (ASX: SHV), Treasury Wine Estates Ltd (ASX: TWE), Olam International and JBS.

Distribution growth

For me, one of the main attractions of Rural Funds as an ASX dividend share is its goal to increase its distribution by 4% per annum.

While 4% per year isn’t exactly rocketing higher, it’s usually faster growth than inflation and it can compound over time.

I’m looking for businesses that hopefully provide income security even during times of economic uncertainty. Rural Funds stuck to its 4% distribution growth goal even during the COVID-19 year of 2020.

In FY22, it’s expecting to grow its annual distribution by 4% to 11.73 cents per unit. It has increased its distribution every year since it listed several years ago.

Contracted rental growth

One of the main ways that Rural Funds can achieve this distribution growth is through contracted rental indexation.

Rural Funds notes that 44% of its lease income is based on CPI inflation, which is currently running at an elevated rate. Most of the rest of the contracted income sees fixed annual increases, with occasional market reviews.

The ASX dividend share also invests in productivity improvements at its farms, which aims to increase the value of the farm for tenants (and Rural Funds), and aims to lead to further rental growth.

Yield

One of the final things that I like about Rural Funds is that it has a pretty good dividend yield. At the current Rural Funds share price, it has an FY22 distribution yield of 4%.

At the moment, its adjusted net asset value (NAV) per unit is $2.24. That’s the underlying value of the business. Currently, the Rural Funds share price is at a 30% premium to its NAV.

The post I plan to hold this quality ASX dividend share forever. Here’s why. appeared first on The Motley Fool Australia.

More reading

• 2 ASX shares that could benefit from rising inflation
• 2 top ASX dividend shares to think about
• 2 ASX dividend shares with great yields to beat inflation

Motley Fool contributor Tristan Harrison has positions in RURALFUNDS STAPLED. 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 RURALFUNDS STAPLED. The Motley Fool Australia has recommended Treasury Wine Estates 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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Time and time again, statistics show that the most popular ASX exchange-traded funds (ETFs) are those that track ASX shares themselves.

That is not too surprising. Australian investors seem patriotic in that way, or perhaps they just stick to the companies we all know best. But international ETFs have also been rising in popularity as many investors want to add exposure to world-class companies outside Australia, companies perhaps like Apple Inc (NASDAQ: AAPL) and Amazon.com Inc (NASDAQ: AMZN), to their portfolios.

ETF provider Vanguard has the distinction of running the ASX’s most popular ETF — the Vanguard Australian Shares Index ETF (ASX: VAS). VAS is by far the winner. But Vanguard’s flagship international offering — the Vanguard MSCI International Shares Index ETF (ASX: VGS) — is a distant laggard. It is not even the ASX’s most popular international shares ETF. That honour goes to the iShares S&P 500 ETF (ASX: IVV).

VGS vs. IVV: Which ASX ETF comes out on top?

VGS and IVV are both remarkably similar, and yet quite different. On paper, VGS is far more diversified than IVV. It invests in shares ranging from more than 20 different advanced economies. These include Britain, Japan, Canada, the United States, and Europe. Its current basket counts almost 1,500 different individual shares.

In contrast, IVV tracks the US-centric S&P 500 Index. This index houses 500 of the largest companies that are listed on the US markets.

Yet both ETFs here largely have similar top 10 holdings. That is because both ETFs are weighted by market capitalisation. And the largest companies on both the S&P 500 and in VGS both happen to be the same.

But let’s get down to the $64,000 question: which ETF has been better to own for investors?

So as of 30 April, the iShares S&P 500 ETF had returned 8.5% over the preceding 12 months (including the value of dividend distributions). Over the past three years, IVV units have returned an average of 13.2% per annum. That grows to 14.5% over the past five years.

In contrast, VGS has returned 4.7% over the past year. It has averaged 10.1% over the past three, and 11.4% over the past five.

So it appears VGS’s increased diversification has held this ETF back compared to IVV. This makes IVV the unbridled winner in a showdown with VGS over any recent time period.

Of course, past performance is no guarantee of future gains, so this could well change in the future. But it perhaps explains why iShares’ S&P 500 ETF remains a far more popular choice than Vanguard’s International Shares ETF for ASX investors.

The post VGS: Were you better off buying the S&P 500 ETF? appeared first on The Motley Fool Australia.

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• 3 fantastic ETFs for ASX investors to buy this week
• How diversified is the Vanguard International Shares ETF?
• Here are 2 top ETFs for ASX investors to buy next week
• What’s impacting the Vanguard MSCI Index International Shares ETF price in 2022?
• 3 high quality ETFs for ASX investors to buy today

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 Amazon and Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, Apple, and Vanguard MSCI Index International Shares ETF. 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 recommended Amazon, Apple, Vanguard MSCI Index International Shares ETF, and iShares Trust – iShares Core S&P 500 ETF. 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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Once again, a large number of broker notes hit the wires last week. Some of these notes were positive and some were bearish.

Three sell ratings that investors might want to hear about are summarised below. Here’s why top brokers think investors ought to sell these shares next week:

JB Hi-Fi Limited (ASX: JBH)

According to a note out of Goldman Sachs, its analysts have reiterated their sell rating and $39.20 price target on this retailer’s shares. The broker believes that JB Hi-Fi will fall short of the market’s expectations in FY 2023. This is due to softening discretionary goods spending and increasing competition from online pureplays including Amazon. The JB Hi-Fi share price was trading at $48.53 on Friday.

Macquarie Group Ltd (ASX: MQG)

A note out of Credit Suisse reveals that its analysts have downgraded this investment bank’s shares to an underperform rating and trimmed their price target on them to $150.00. This follows the release of a full-year result that fell short of Credit Suisse’s expectations. And with the broker believing that Macquarie’s earnings have peaked, it feels now could be the time to sell. The Macquarie share price was fetching $183.11 at Friday’s close.

Wesfarmers Ltd (ASX: WES)

Another note out of Goldman Sachs reveals that its analysts have retained their sell rating and $38.60 price target on this conglomerate’s shares. As with JB Hi-FI, Goldman expects Wesfarmers to be impacted from softening consumer demand. This is being driven by broad-based inflation and higher housing costs. In addition, its analysts expect a decline in housing transaction volumes to negatively impact household goods consumption. The Wesfarmers share price ended the week at $49.97.

The post Top brokers name 3 ASX shares to sell next week appeared first on The Motley Fool Australia.

More reading

• Top ASX dividend shares to buy in May 2022
• 4 ASX shares of the most trusted brands in Australia
• 2 ASX 200 dividend shares to buy according to a top broker
• Where next for the Wesfarmers share price?
• Own ASX 200 retail shares? Here’s how the majors are tackling climate change

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 Wesfarmers 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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Despite popular sentiment, rising interest rates do not benefit all finance ASX shares.

The big banks, certainly, enjoy rate rises as they have both borrowers and depositors as customers.

When the Reserve Bank cash rate increases, they often pass on the full change to its borrowers while only awarding a partial amount to the depositors.

This fattens up what is known as their net interest margin, which is the difference between what they pay out to depositors and the income they receive from borrowers. 

But for those smaller players that are loan-only businesses, it’s a different picture.

Forager Funds, in a memo to clients, noted that rising interest rates “can affect customers’ ability to repay their loans” and inflate the cost of funding for the lenders. 

“Fear of growing problems in this sector has sent share prices plummeting,” read the memo.

“The fund has small investments in both Wisr Ltd (ASX: WZR) and Plenti Group Ltd (ASX: PLT), whose respective share prices have fallen 42% and 35% this calendar year alone.”

Performance ‘exceeded expectations’

Despite the stock price drop, the Forager team noted that the performance of the businesses has “exceeded expectations”.

The lending business is a race for scale.

“The expectation is for a small number of healthily profitable players to emerge over time and Wisr and Plenti look like two of them,” read the memo.

“March quarter reports showed Plenti’s loan book is already north of $1 billion and Wisr isn’t far away. They will both hit $2 billion over the next few years without dramatically increasing the rate of progress and that should enable them to be nicely profitable.”

‘Fear is overdone’ for Wisr and Plenti

The anxiety among investors for shares like Wisr and Plenti is, not so much the growth rate, but the hit to profitability from bad debts arising out of rising rates.

The Forager team acknowledged this “healthy scepticism is warranted”.

“But the fear is overdone,” read the report.

“Both these businesses are specifically targeting safer borrowers with a proven capacity to repay their loans. The March quarterly reports still showed default rates well below our long-run expectations.”

Forager also noted both Wisr and Plenti have indicated they will raise charges to customers.

“In any case, savings rates in Australia remain high and jobs plentiful,” the memo read.

“Economic conditions are absolutely going to deteriorate. But, while the portfolio weightings need to remain modest, we expect both businesses to successfully navigate and prove that their current share prices are far too low.”

The post 2 ASX shares with prices ‘far too low’ right now: Forager appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to sell next week
• Analysts name 2 ASX shares to buy with ~50% upside potential
• 3 Stocks Warren Buffett Is Betting on Big Time Right Now
• Top ASX dividend shares to buy in May 2022
• Here are 2 fantastic ETFs for ASX investors to buy in May

Motley Fool contributor Tony Yoo 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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If you’re looking for investment options, then the two ASX shares listed below could be worth considering.

Analysts currently rate these shares as buys and see potential for them to climb materially higher from current levels. Here’s what you need to know:

Altium Limited (ASX: ALU)

The first ASX share to look at is Altium. It is the electronic design software company behind the Altium Designer and Altium 365 platforms, the NEXUS team-based PCB workflow solution, and the Octopart electronic parts search engine.

Thanks to their exposure to the rapidly growing Internet of Things (IoT) and artificial intelligence (AI) markets, demand for this offering is expected to increase materially over the coming years. In fact, management is targeting revenue of US$500 million by 2025-2026. This is more than double its FY 2022 revenue guidance of US$213 million to US$217 million. It is also targeting market dominance in electronic design software with a massive 100,000 subscribers by 2026. This compares to 55,978 at the end of the first half.

One leading broker that believes the Altium share price is great value at the current level is Bell Potter. It recently reiterated its buy rating and $41.25 price target on the company’s shares. Based on the current Altium share price of $27.00, this implies potential upside of 53%.

Baby Bunting Group Ltd (ASX: BBN)

Another ASX share that could be in the buy zone is leading baby products retailer Baby Bunting.

It has been tipped as a buy due to its positive growth outlook, exposure to less discretionary spending, and its strong market position. The latter is expected to strengthen further in the coming years as its store network expansion continues.

For example, at present the company has 60 national superstores across Australia. However, analysts at Citi expect this to hit 68 at the end of FY 2022 and then sees scope for over 110 stores in the future. In addition, the broker sees other growth opportunities from “exclusive/private label growth and supply chain efficiencies.”

At present, Citi has a buy rating and $6.22 price target on the company’s shares. Based on the current Baby Bunting share price of $4.21, this suggests of 48% for investors over the next 12 months.

The post Analysts name 2 ASX shares to buy with ~50% upside potential appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: Block and Xero rebound, gold miners fall
• Thursday thrashing: ASX tech shares tumble
• How much further can ASX 200 tech shares tumble? Macquarie weighs in
• Is the Altium share price now great value after dropping 30% in 2022?
• Why did the Xero share price just rebound 6%?

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. The Motley Fool Australia has recommended Baby Bunting. 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.

Warren Buffett probably ranks as the most frequently quoted investor in history. One of his most famous statements seems especially applicable in the current market environment: “Be fearful when others are greedy. Be greedy when others are fearful.”

There’s no question that many investors are fearful as a result of the stock market’s volatility. However, true to form, Buffett is showing some signs of being greedy. Here are three stocks that Buffett is betting on big time right now.

1. Chevron

Buffett’s Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) added to its positions in only a handful of stocks in the fourth quarter of 2021. Chevron (NYSE: CVX) was one of them. And Berkshire’s regulatory filing for its first-quarter results reveals that Buffett is still a fan of the oil and gas stock. As of the end of Q1, Berkshire owned $25.9 billion of Chevron shares.

There’s no mystery behind why Buffett likes Chevron these days. Russia’s invasion of Ukraine disrupted energy markets. Demand is picking up with fewer travel restrictions related to COVID-19. Oil prices have soared as a result of these factors.

Unsurprisingly, Chevron stock has trounced the market. Based on Berkshire’s increased stake in the company during the first quarter, Buffett seems to think this outperformance can continue. He could very well be right.

Chevron stands as one of the strongest oil companies from a financial perspective. It’s also expanding into clean energy with the pending acquisition of Renewable Energy Group. 

2. Occidental Petroleum

While Chevron is Buffett’s favorite oil stock, it’s not his only one. Berkshire has also been busy scooping up shares of Occidental Petroleum (NYSE: OXY).

In Berkshire’s Q1 regulatory filing, the company revealed that it had bought Occidental preferred stock, along with warrants to buy up to 83.86 million shares of common stock. Last week, another regulatory filing disclosed that Berkshire now owns 142.3 million Occidental shares. 

Occidental should benefit from many of the same tailwinds as Chevron. Like Chevron, Oxy is also ramping up its clean-energy initiatives, including carbon capture projects.

Buffett probably especially likes the Occidental preferred stock that Berkshire owns. Those shares pay a juicy dividend yield of 8%. It won’t take much share appreciation for this investment to pay off nicely.

3. HP

Tech stocks haven’t exactly been Buffett’s forte in the past. He’s had a few successes but some notable flops, as well. However, this mixed record didn’t deter Berkshire from opening a huge position in HP (NYSE: HPQ) recently.

Early last month, Berkshire purchased nearly 121 million shares of HP. It now stands as the largest shareholder of the technology giant, owning around 11% of its outstanding shares.

Why does Buffett (or one of his investment managers) like HP so much? The most likely reason is that the stock is cheap. Even with the boost provided by the revelation of Berkshire’s stake, HP’s shares trade at only 8.6 times expected earnings.

Buffett probably also likes HP’s dividend yield of 2.7%. And he’s a fan of share buybacks. HP plans to repurchase at least $4 billion of its stock this year. 

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

The post 3 Stocks Warren Buffett Is Betting on Big Time Right Now appeared first on The Motley Fool Australia.

More reading

• Worried about inflation? Here’s what Warren Buffett says Berkshire Hathaway is doing

Keith Speights has positions in Berkshire Hathaway (B shares). The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Berkshire Hathaway (B shares) and HP. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), and short January 2023 $265 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has recommended Berkshire Hathaway (B shares). 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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It’s been a stormy month on the Aussie stock market so far in May. So we asked our Foolish contributors to compile a list of ASX shares that experts reckon have a fine outlook with a strong chance of dividend windfalls over the long range. Here is what the team came up with.

7 best ASX dividend shares for May 2022 (smallest to largest)

• Adairs Ltd (ASX: ADH), $433.43 million
• Elders Ltd (ASX: ELD), $2.21 billion 
• Brickworks Limited (ASX: BKW), $3.33 billion
• Wesfarmers Ltd (ASX: WES), $55.3 billion
• Macquarie Group Ltd (ASX: MQG), $67.22 billion
• Westpac Banking Corp (ASX: WBC), $83.29 billion
• BHP Group Ltd (ASX: BHP), $227.55 billion

(Market capitalisations as of 13 May 2022)

Why our Foolish writers love these ASX dividend shares

Adairs Ltd 

What it does: Adairs is a leading ASX retail company operating in the homewares space. It owns traditional brick-and-mortar stores nationally as well as a thriving e-commerce platform.

By Sebastian Bowen: Adairs was definitely something of a COVID winner, and experienced a notable uplift in sales and profits over 2020 and into 2021. The company has been struggling somewhat in 2022 though, with a meaningful share price reduction of close to 40% over the year to date.

However, this has pushed up Adairs’ fully-franked dividend yield to more than 7%. Even if Adairs trims its dividends moving forward, it’s still arguably likely to have a robust dividend yield at the current share price of $2.51. Thus, this often-overlooked dividend share could well be worth a look in May.

Motley Fool contributor Sebastian Bowen owns shares of Adairs Ltd.

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Elders Ltd 

What it does: Elders is a 180-year-old agricultural business that provides a range of products and services to support rural communities across Australia and New Zealand.

By Mitchell Lawler: Elders is one ASX dividend share that has continued to go from strength to strength amid the disruption around the world. The Australian agricultural business enjoyed a 22% revenue uplift over the past year as the industry experiences better than usual conditions.

The latest forecasts from the Australian Bureau of Agricultural and Resource Economics (ABARES) suggest the good conditions will persist between June and August. Specifically, there’s a 75% chance of rainfall totals of more than 50mm across much of the company’s key operational regions.

Recently, Goldman Sachs highlighted its conviction buy rating on Elders shares – accompanied by a $17.65 price target, compared to the current $13.99 per share. The company currently offers a dividend yield of 3.00%.

Motley Fool contributor Mitchell Lawler owns shares of Elders Ltd.

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Brickworks Limited 

What it does: Brickworks is not only the largest brickmaker in Australia, but also specialises in other building products as well as property and investments.

By Tristan Harrison: Brickworks has been operating for several decades. It’s a major player both in Australia and in the United States.

In terms of dividends, Brickworks hasn’t cut its payment for more than four decades. Management is proud of the company’s reliability as a dividend payer to shareholders.

The business is seeing growth within its industrial property trust, with properties being built on excess Brickworks land. Over the next few years, Brickworks is expecting the trust to complete building properties that add $60 million of gross rental and $1.5 billion of leased asset value to the trust.

The trailing, grossed-up dividend yield on Brickworks shares is around 4.00% based on Friday’s closing share price of $22.15.

Motley Fool contributor Tristan Harrison does not own shares of Brickworks Limited.

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Wesfarmers Ltd 

What it does: Wesfarmers is a retail conglomerate that operates some of Australia’s favourite brands including Bunnings, Kmart, and Officeworks.

By Brooke Cooper: An oldie but a goodie, Wesfarmers has been a blue-chip staple among ASX investors for decades. Wesfarmers is also a consistent dividend-paying stock. It’s been handing investors back a portion of its profits since the 1980s.

Broker Morgans believes Wesfarmers has a strong management team and a healthy balance sheet. It also expects the company’s Bunnings brand will continue to attract customers despite uncertain economic conditions.

On top of that, Morgans is expecting the Wesfarmers dividend to grow to a fully-franked, $1.81 per share in the 2023 financial year.

Motley Fool contributor Brooke Cooper does not own shares of Wesfarmers Ltd.

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Macquarie Group Ltd 

What it does: Macquarie is among Australia’s largest banks and is primarily involved in investment, commercial banking and asset management.

By Aaron Teboneras: The Macquarie share price has fallen by almost 10% in the past week and could be trading at bargain levels, according to Morgans.

The investment bank delivered its FY22 results earlier this month, reporting double-digit growth across key financial metrics. However, this wasn’t enough to stop its shares from falling due to the market’s lofty expectations.

Nonetheless, the board decided to increase its final dividend by 4.5% to $3.50 for the full year ending 31 March.

The team at Morgans upgraded its outlook on Macquarie shares to ‘add’ from ‘hold’. In addition, the broker raised its 12-month price target by 2.6% to $215 apiece.

Based on Friday’s closing price of $183.11, this represents a potential upside of almost 18% for investors.

Motley Fool contributor Aaron Teboneras does not own shares of Macquarie Group Ltd.

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Westpac Banking Corp 

What it does: Westpac is Australia’s oldest banking and financial services group and is one of the largest banks listed on the ASX. 

By James Mickleboro: I think Westpac could be a dividend share to buy in May, particularly given the recent release of the bank’s half-year results. The update revealed cash earnings of almost $3.1 billion and an interim fully franked dividend of 61 cents per share. Both were ahead of the market’s expectations for the period.

But in my opinion, the main reason to be positive is that the bank continues to target a cost base of $8 billion in FY2024, down from $13.3 billion in FY 2021 (including $2.3 billion of one-offs). This is despite two of its peers admitting defeat on their own cost-reduction targets this month due to inflation. If Westpac delivers on this, it should be supportive of earnings and dividend growth in the coming years.

At present, Citi is forecasting fully franked dividends of $1.23 per share in FY2022, $1.55 per share in FY 2023, and $1.80 per share in FY2024. Based on the current Westpac share price at the time of writing, this will mean yields of 5.1%, 6.4%, and 7.5%.

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

BHP Group Ltd 

What it does: BHP is one of the world’s biggest miners and is involved in a diversified array of natural resources including iron ore, metallurgical coal, and copper.

By Bernd Struben: On the back of soaring commodity prices, BHP has become a star dividend payer, currently paying a 10.7% trailing dividend yield.

Plato Investment Management’s Peter Gardner believes there’s more to come.

“The big Australian is in a really good position to continue delivering big dividends… During the recent reporting season, BHP announced a record first-half dividend of $1.50 per share, fully franked,” he said. “This dividend was announced along with increasing revenues, increasing earnings, and increasing profit.”

Gardner also believes BHP’s pending merger deal with Woodside Petroleum Limited (ASX: WPL) would be “a tax-effective income opportunity for BHP shareholders”.

Motley Fool contributor Bernd Struben does not own shares of BHP Group Ltd.

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

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ADAIRS FPO and Brickworks. The Motley Fool Australia has positions in and has recommended ADAIRS FPO, Brickworks, and Wesfarmers Limited. The Motley Fool Australia has recommended Elders 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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If you’d like to make some investments but aren’t sure which shares to buy, you could look at exchange traded funds (ETFs) instead. This increasingly popular asset class allows you to invest in large groups of shares from particular indices or sectors through a single investment.

But which ETFs could be in the buy zone? Two that are very popular are listed below. Here’s what you need to know about them:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The first ETF for investors to look at is the BetaShares Asia Technology Tigers ETF. This ETF tracks the performance of an index comprising around 50 of the biggest and brightest technology shares in Asia.

These are the tigers of the Asian economy and include the likes of Alibaba, Baidu, JD.com, Pinduoduo, Samsung, Taiwan Semiconductor, and Tencent.

As the Asian tech sector is expected to remain a growth sector for some time to come, this could make the BetaShares Asia Technology Tigers ETF a great option for long-term focused investors. Particularly after recent weakness dragged many of these companies (and therefore the ETF) down materially from their highs.

VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)

Another ETF that investors might want to look at is the VanEck Vectors Morningstar Wide Moat ETF, especially if you’re after high quality and defensive companies to invest in.

That’s because this ETF aims to invest in a collection of companies that are deemed to be fairly valued and have sustainable competitive advantages or moats (hence the ETF’s name).

The VanEck Vectors Morningstar Wide Moat ETF also has around 50 shares among its holdings. These include Adobe, Amazon, Boeing, Campbell Soup, Constellation Brands, Lockheed Martin, Microsoft, Walt Disney, and Wells Fargo.

The post Here are 2 fantastic ETFs for ASX investors to buy in May appeared first on The Motley Fool Australia.

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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 recommended BetaShares Asia Technology Tigers ETF and VanEck Vectors Morningstar Wide Moat ETF. 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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