Category: Stock Market

Construction materials companies are admittedly not glamorous to ASX investors.

They’re not full of future optimism like the technology stocks, nor are they cyclically exciting like mining.

But people and businesses always need housing and buildings, and existing ones always need maintenance and repair. Demand is never lacking.

As such, Ord Minnett senior investment advisor Tony Paterno picked out a couple of ASX shares that he would snap up right now:

269% profit boost? Yes, please

Paterno noted that Brickworks Limited (ASX: BKW) recently posted a stunning improvement in its profit.

“Brickworks reported first half 2022 underlying net profit after tax of $330 million, up 269% on the prior corresponding period,” he told The Bull.

“The company declared an interim dividend of 22 cents, up a cent on a year ago.”

All business units, except for building products in North America, reported “strong earnings growth”, Paterno said.

“In the medium term, we expect company earnings to continue growing on the back of a strong pipeline of work from housing activity in Australia and improving non-residential construction activity in the US.”

Brickworks shares are down more than 5% for the year thus far. The stock dipped last week after going ex-dividend, bringing the price-to-earnings ratio down to less than 5.

Brickworks is handing out a significant 2.61% dividend yield, according to The Motley Fool website.

When the market drives up the price of the product you’re selling

BlueScope Steel Limited (ASX: BSL) is another ASX share Paterno would buy at the moment.

“Steel prices in Europe and the US have moved higher.”

The business is set to enjoy a perfect storm in the steel market, according to Paterno.

“Despite declining from recent highs, spot spreads are still generating an attractive 18% free cash flow yield for BlueScope from fiscal year 2023 and beyond,” he said.

“This highlights that BlueScope remains a high generator of free cash flow despite strong cost inflation.” 

It seems Paterno is not alone in his bullishness.

According to CMC Markets, eight out of 11 analysts surveyed rate Bluescope shares as a “strong buy”, with one other rating it as “moderate buy”.

Bluescope shares have remained flat so far in 2022.

The post Bricks and steel: expert reveals 2 ASX shares ready to skyrocket appeared first on The Motley Fool Australia.

More reading

• Is it time to buy these 2 quality ASX shares?
• Why is the Brickworks share price sliding on Monday?
• ASX 200 midday update: IGO increases Western Areas offer, BlueScope makes US acquisition
• BlueScope share price jumps on $671m acquisition news
• 5 things to watch on the ASX 200 on Monday

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. owns and has recommended Brickworks. The Motley Fool Australia owns and has recommended Brickworks. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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There are a lot of shares to choose from on the Australian share market.

To narrow things down, listed below are two ASX shares that are highly rated by analysts.

Here’s what they are saying about them:

Domino’s Pizza Enterprises Ltd (ASX: DMP)

This pizza chain operator’s shares have been having a tough year. Weakness in Japan and concerns over inflationary pressures have been weighing on investor sentiment.

The team at Morgans remains positive on the company and believes recent share price weakness is a buying opportunity.

It said: “We upgraded to ADD after the result and, although inflationary pressures have worsened since then, we continue to believe there is meaningful upside to the current share price over the next 12 months.”

Morgans has an add rating and $100 price target on the company’s shares.

Lifestyle Communities Limited (ASX: LIC)

Goldman Sachs is a fan of this retirement communities company.

The broker believes Lifestyle Communities is well-placed to benefit from Australia’s ageing population and the structural growth in land lease living.

It explained: “We believe LIC is well positioned to benefit from shifting demographic trends, as its business helps address some critical emerging social issues. Its core business is to provide affordable housing to an ageing population, addressing a key social issue that is becoming more prevalent as the proportion of over 50’s increases. We expect as this population cohort continues to grow, this should deliver structural growth for the industry; we expect demand to far outpace supply at current build rates.”

Goldman has a conviction buy rating and $21.60 price target on its shares.

The post Why analysts say investors should buy these top ASX shares appeared first on The Motley Fool Australia.

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• Brokers name 3 ASX shares to buy today
• Why Allkem, Domino’s, Qantas, and Uniti shares are racing higher
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• Top ASX shares to buy in April 2022
• 3 ASX growth shares brokers rate as buys for April

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 Dominos Pizza Enterprises Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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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:

Commonwealth Bank of Australia (ASX: CBA)

According to a note out of Citi, its analysts have retained their sell rating and $90.75 price target on this banking giant’s shares. Citi has been reviewing the banking sector ahead of potential rate hikes by the Reserve Bank. While the broker believes cash rate increases could support stronger than expected net interest margins in the near future, it isn’t enough for a more positive rating on CBA. Citi continues to see its shares as expensive at the current level and believes there are better options in the sector. The CBA share price was trading at $106.50 on Thursday.

Fortescue Metals Group Limited (ASX: FMG)

A note out of Goldman Sachs reveals that its analysts have retained their sell rating but lifted their price target on this mining giant’s shares to $15.20. The broker believes Fortescue’s shares are overvalued compared to its peers. Goldman also has concerns with capex and execution risks for the Iron Bridge and Fortescue Future Industries businesses. The Fortescue share price was fetching $21.61 at Thursday’s close.

Pro Medicus Limited (ASX: PME)

Another note out of Goldman Sachs reveals that its analysts have retained their sell rating and $44.80 price target on this health imaging technology company’s shares. This follows news that Pro Medicus has signed a major $32 million eight-year deal with Inova Health System. Although Goldman was pleased with the deal and is a fan of the company, it believes its shares are expensive at over 50x earnings. This is especially the case given that the company does not have sufficient visibility to know if recent win-rates can be sustained. The Pro Medicus share price ended the week at $48.63.

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

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• Top brokers name 3 ASX shares to sell today
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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. owns and has recommended Pro Medicus Ltd. The Motley Fool Australia owns and has recommended Pro Medicus Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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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.

Stock splits can be exciting events, right? They certainly draw attention to the splitting company, even if they don’t necessarily move the stock price up.

Consider the fates of two would-be splitters, Tesla (NASDAQ: TSLA) and GameStop (NYSE: GME). Since announcing their respective share divisions in late March, the share prices of both have declined (GameStop by 13.2% and Tesla by 9.6%).

But softening share prices can often make companies more attractive. Let’s see which of these contenders is the better buy opportunity right now.

A tale of two splitters

Tesla and GameStop aren’t directly comparable as businesses, but they do share some similarities. Both have been criticized for the way they operate in the past and both have come close to bankruptcy at various points in their histories. The two companies are also the subject of constant, and sometimes frenzied, online discussion. This somewhat distorts the value of their stocks, as chatter and noise can knock a company’s price around quite a bit.

Let’s cut through the static and look at the fundamentals of the pair. Both operate in relatively high-cost and low-margin environments. Tesla cars require thousands of components, some rather expensive, and GameStop has to maintain a decent level of inventory and operate and staff brick-and-mortar stores. Earning a buck for the two companies, then, has been a challenge at times.

Electrifying growth for Tesla

Tesla is a recent arrival to the profit garage. Its bottom line has only recently been consistently in the black. It’s managed to do this with a laser focus not only on EVs exclusively — unlike slower-moving, auto-making competitors who are still beholden to the traditional internal-combustion engine — but also because the “cool factor” is nicely baked into its vehicles. This is especially true with the popular, higher-end offerings such as the Model X SUV.

This is a business model expertly practised by Apple, whose iPhone line of products is still the premium smartphone line of choice for many consumers after 15 years. The beauty of this approach is that quality premium products command higher prices and, all things being equal, produce higher margins for their makers. That was a key factor in Tesla’s dramatic lurch into profitability.

This success is combined with heady top-line growth. People want to own next-generation cars and desire to own Teslas. Demand continues to be bodybuilder strong and has helped lift revenue higher. Tesla’s full-year 2021 sales were nearly $54 billion, a sky-high 71% improvement year over year.

Is it game on or off for GameStop?

During the coronavirus pandemic, GameStop grew to prominence because of the many online denizens posting feverishly about the company. For a time (and still to some extent these days), it was the company that personified the new term “meme stocks,” with the outcome of entire trading days dependent on the tone of online discussions.

This kicked off in late 2020 with the most famous short squeeze in recent history. The shorts were ultimately routed, and GameStop began the roller-coaster ride it’s still on today.

To be blunt, it’s not a good investment based on the business fundamentals. While GameStop hasn’t done badly squeezing out sales growth (18% in full-year 2021) lately, it’s a retail dinosaur that usually loses money. Over the past four years, its annual loss has ranged from just under $215 million to nearly $800 million. Zooming in, the past three quarters have seen the flailing company slide increasingly deeper into the red on the bottom line.

And the winner is…

In one corner, we have Tesla as the highest-profitable operator in a red-hot segment in which demand shows no sign of cooling. In the opposite corner stands wobbly GameStop, weakened by a legacy business model that’s hard to succeed with today and tough to pivot from. The company’s also not a hot prospect to excel with behind-the-trend ventures, such as its recently announced non-fungible token (NFT) platform.

I suppose some argument could be made in favor of GameStop being far cheaper on certain, highly selected valuations. The company’s price-to-sales ratio, for instance, stands at less than two, while that of ever-expensive Tesla is a bloated 24-plus.

Then again, Tesla is a zeitgeist company with its best years in front of it. GameStop is a gossip-prone, volatile stock fronting a money-losing business.

There’s no real competition here. Admittedly, Tesla’s valuations give me pause to think and its top management is a bit flaky for my taste, but it’s built a powerful brand and will continue to be a leader in its segment. The EV specialist is unhesitatingly my pick in this contest.

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

The post Better stock-split buy: Tesla vs. GameStop appeared first on The Motley Fool Australia.

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Eric Volkman owns Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Apple 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 recommended Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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

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Shares in National Australia Bank Ltd. (ASX: NAB) finished trading on Thursday at $32.85 apiece in afternoon trade.

NAB shares have thrust to 52-week highs in recent months after surging off low points in December, February and then again in March.

In the past month, its share price has jumped 10% and is now up 14% for the year to date.

Is NAB a buy?

Analysts at Morgan Stanley recently noted that NAB could increase its FY22 cost guidance, but that could very well be offset if the bank meets its revenue growth targets.

It is neutral on NAB shares and values the company at $31.50 apiece, slightly below the consensus valuation of $32.46 per share.

Analysts at Bloomberg reckon there could be more to the NAB story when digging a little deeper. They rank NAB as Australia’s “top green lender” after committing to an “environmental-finance target of A$70 billion and committed funding of A$56 billion.”

“It’s also Australia’s leading renewables lender and its lending carbon-intensity is well below peers. It hit its 2025 emission target last year and disclosure is among the best of Australian financials.”

That’s something worth thinking about particularly for ESG and/or sustainability minded investors.

Meanwhile, JP Morgan analysts are bullish on the bank and reckon it is set to outstrip peers in revenue growth and capital management this year.

“We have an overweight recommendation on NAB reflecting stronger-than-peer revenue growth prospects, likely sound cost control, and ongoing capital management,” it said in a recent note.

“The stronger revenue profile reflects NAB’s tilt towards small business banking, which should insulate it from ROE pressures in retail banking, as well as strong execution in its market leading SME franchise where it continues to take market share,” it added.

“While we think it possible that NAB walks away from its cost targets, this is already factored into our forecasts and still we see NAB’s pre-provision profit growth outstripping peers.”

It rates NAB a buy and values the bank at $33.50 per share, slightly above consensus.

In the last 12 months, the NAB share price has held gains and is up 23% in that time after a period of rough volatility.

The post Should investors buy the NAB share price at its 52-week highs? appeared first on The Motley Fool Australia.

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• Is the NAB share price entering a ‘sweet spot’?

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 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 Bruce Jackson.

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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:

Allkem Ltd (ASX: AKE)

According to a note out of Citi, its analysts have retained their buy rating and bumped up their price target on this lithium miner’s shares to $16.00. Citi expects lithium prices to be stronger for longer on the belief that it will be a couple of years until the lithium market finds a balance again. This bodes well for Allkem, which remains the broker’s top pick in the industry. The Allkem share price ended the week at $13.52.

Pilbara Minerals Ltd (ASX: PLS)

A note out of Macquarie reveals that its analysts have retained their outperform rating but trimmed their price target on this lithium miner’s shares slightly to $4.00. This follows the release of a quarterly update which fell short of the broker’s expectations due largely to a delayed shipment. Nevertheless, Macquarie remains positive on Pilbara Minerals due to strong lithium prices and its bold production targets. The Pilbara Minerals share price was fetching $2.96 at Thursday’s close.

ResMed Inc. (ASX: RMD)

Another note out of Citi reveals that its analysts have retained their buy rating and $38.00 price target on this medical device company’s shares. Citi believes ResMed is well-placed to benefit post-COVID if it can avoid short term supply chain disruption. Especially given the enormous Philips product recall, which is expected to run until the end of the year. The ResMed share price ended the week at $31.61.

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

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Motley Fool contributor James Mickleboro owns Allkem Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia has recommended ResMed Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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There has been significant volatility for ASX tech shares in April 2022. But could they be opportunities?

Some technology businesses have the capability of achieving good profit margins because of the intangible nature of their offering.

When combined with revenue growth, tech businesses could deliver good results over the long term.

Here are two ASX tech shares to consider:

Pushpay Holdings Ltd (ASX: PPH)

Pushpay is a business that predominately serves large and medium US churches in the US. It provides digital donation tools and church management systems.

The company processes billions of dollars of donations each year. It has a total of around 14,000 customers. There is a growing number of customers using multiple products from Pushpay’s offering. It recently acquired streaming business Resi Media, expanding the company’s offering.

Pushpay describes Resi Media as a high-growth business which has a “strong foothold” in the US faith sector with over 70% of the ‘Outreach 100’ churches using Resi products.

This ASX tech share is looking to expand in the Catholic sector, eventually reaching a 25% market share, by the number of parishes. According to IBISWorld, in 2016, 27% of US faith giving was generated from Catholic services, totalling US$30 billion. Pushpay says that the Catholic segment represents an estimated annual revenue opportunity of US$330 million.

The benefits from the Catholic segment are expected to be realised “incrementally” over the next financial years.

Pushpay continues to grow its gross profit margin, which increased from 68% to 69% in the first half of FY22. This is up from 54% at March 2018.

TechnologyOne Ltd (ASX: TNE)

This ASX tech share aims to double in size every five years. It provides enterprise software that allows clients to access their software from anywhere.

It says that its ‘future’ business is expecting to grow by at least 15% per annum, with a particular focus on software as a service (SaaS). The company says that the quality of its SaaS revenue is very high, with a recurring contractual nature, combined with a “very low” churn rate of around 1%. The target is that 95% of revenue is recurring by FY27.

Total annual recurring revenue (ARR) is expected to increase to at least $500 million by FY26. The profit before tax margin was 31% in FY21 and is expected to improve to 35% in the next few years thanks to economies of scale and cost reductions.

TechnologyOne sees a “significant” upside in the UK in the coming years, with the total addressable market in the UK three times the size as the Asia Pacific region.

The ASX tech share says that SaaS is creating significant opportunities, with a “strong” pipeline for 2022.

It’s currently rated as a buy by the broker Morgans, with a price target of $13.73.

The post Are these 2 ASX tech shares buys in April? appeared first on The Motley Fool Australia.

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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. owns and has recommended PUSHPAY FPO NZX. The Motley Fool Australia owns and has recommended PUSHPAY FPO NZX. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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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.

It seems like talk of the metaverse is everywhere these days, with news of novel and exciting planned additions to this collection of virtual 3D worlds cropping up constantly. It’s a wild time to be an investor, to be sure. Based on the hype, investing in metaverse spaces seems like the next big thing for anyone with a few spare dollars lying around.

Although it’s easy to buy metaverse real estate, it’s not the right choice for just anyone. Not only is it a very risky investment, there are still a lot of unknowns. Even so, there are some reasons to jump into this space as an investor, including those outlined below.

You have a brand or business to promote

If you have a company or brand that appeals to Generation Z (those people between 10 and 25 years of age), the metaverse could be a great place to connect with them. A lot of the members of this generation are already in the workforce, and they’re familiar with digital spaces that look and behave like popular metaverse platforms, including Decentraland and The Sandbox. Gen Z already has an estimated collective buying power of about $150 billion.

Because these people are largely less interested in older social media platforms, they tend to find themselves interacting with each other on platforms that inhabit the metaverse, or those that are metaverse-like. This is a version of the internet that Gen Z knows well and is comfortable with, and a good advertiser takes their business where their customers are. After all, Gen Z is the future of the internet, and what they imagine it to be will necessarily become reality as they come of age.

You want to help other companies find a foothold in the metaverse

If you already have a pretty good idea of how the metaverse will work and what kinds of projects will make sense in the space, then it might be a great idea to invest in metaverse real estate with the intention of becoming either a developer or a landlord.

Many companies are trying to find a way to get into the metaverse, but don’t really know what to do first. Metaverse developers can help them take a project from the idea phase through execution, often with many partners that help add expertise along the way. They may advise on where projects should be built, or when they should launch (such as during Fashion Week in Decentraland), and they often acquire property to develop before reselling it.

Metaverse landlords, on the other hand, know what they want to build and to whom they want to lease those spaces. They seek out businesses and brands that want a metaverse presence, but aren’t sure they’re ready to commit fully to purchasing virtual land. Metaverse landlords stand to generate long-term rental income if they design appealing structures in great locations.

You want to build something for yourself

One type of metaverse real estate investor that we rarely discuss is the kind who is curious about this bold new world and also very tech-forward. They probably are already dabbling in cryptocurrencies, and likely have been playing around in metaverse spaces, but haven’t yet set down roots. For individuals of this type, buying a piece of digital land could be more an act of self-expression than an act of investment.

However, simply by holding that virtual property — even if it is, for now, just an empty lot or an art installation — they become investors, too. According to a Citi GPS report, by the end of this decade, the metaverse can be expected to expand to as many as 5 billion users and a total addressable market of up to $13 trillion. The likely end result of such expansion is that many parcels of digital land will grow in value even if they’ve only been used for their owners’ enjoyment. As long as the platform you choose has a healthy community and is driven by a sense of collaboration, people will continue to make it their digital home.

The metaverse isn’t for every investor, but many belong there

Although investing in metaverse real estate can seem like a pretty dodgy experiment, there is mounting evidence that this alternate reality is here to stay. With a limited supply of building lots and a potentially unlimited number of users, the value of real estate on any metaverse platform will be driven, in part, by its popularity. It’s the same for physical land in any neighborhood in any city or town.

This early in the growth of what is expected to become the metaverse, there’s no way to really know which metaverse platforms will hit and which will shrink into obscurity, but if you’re the betting type, or you have a business plan in mind that would benefit from a metaverse presence, you definitely should give it a try. Patience is key, because it will take time (and effort) for these platforms to mature. But there’s only so much downside versus enormous upside to being an early adopter of technology that has the potential to become a whole new way of connecting people around the globe.

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

The post Should you buy Metaverse real estate? appeared first on The Motley Fool Australia.

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• Here are the ASX retail share winners and losers of the last quarter

Citigroup is an advertising partner of The Ascent, a Motley Fool company. . Kristi Waterworth owns Decentraland. 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 Bruce Jackson.

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

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If you’re wanting to invest in the tech sector after recent weakness but aren’t sure which shares to buy, then these exchange traded funds (ETFs) could be worth considering.

The two ETFs below provide investors with easy access to a number of high quality shares in the tech sector. Here’s what you need to know about them:

BetaShares Global Cybersecurity ETF (ASX: HACK)

The first tech ETF to consider is the BetaShares Global Cybersecurity ETF. This fund gives investors access to the leading companies in the growing global cybersecurity sector.

This is a sector that has been tipped to grow strongly over the next decade due to the rampant rise of cyber crime and the structural shift to the cloud.

Among the companies you’ll be investing in with this ETF are Accenture, Cisco, Cloudflare, Crowdstrike, and Okta.

VanEck Vectors Video Gaming and eSports ETF (ASX: ESPO)

Another side of the sector that is booming is the gaming industry. In light of this, the VanEck Vectors Video Gaming and eSports ETF could be a top option for investors.

As its name suggests, this ETF gives investors access to a portfolio of the largest companies involved in the video game industry. These are video game developers and hardware providers.

VanEck highlights that these companies are in a position to benefit from the increasing popularity of video games and eSports.

Among the ETFs major holdings are graphics processing units giant Nvidia and games developers Take-Two Interactive (GTA, Red Dead), Electronic Arts (FIFA, Sims, Apex Legends), and Roblox.

The post Here are 2 excellent ASX tech ETFs to buy 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. owns and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia owns and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia has recommended VanEck Vectors ETF Trust – VanEck Vectors Video Gaming and eSports ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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If you’re wanting to boost your income with some dividend shares next week, then you might want to consider the two listed below.

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

Adairs Ltd (ASX: ADH)

The first ASX dividend share for investors to look at is leading furniture and homewares retailer, Adairs.

While it is having a tough time in FY 2022, the retailer has been tipped by Morgans to bounce back strongly in FY 2023. This is thanks to the newly acquired Focus on Furniture business bedding down and starting to improve its store economics while expanding its footprint.

The company’s new distribution centre is also expected to be a boost to its performance and support its margins. All in all, Morgans believes “[t]hese factors underpin an expectation of positive earnings growth in FY23 and FY24, which we do not think are reflected in the multiple.”

Morgans has an add rating and $3.50 price target on the company’s shares. As for dividends, the broker is forecasting fully franked dividends of 19 cents per share in FY 2022 and 26 cents per share in FY 2023. Based on the current Adairs share price of $2.85, this will mean yields of 6.7% and 9.1%, respectively, over the next couple of years.

Elders Ltd (ASX: ELD)

Another dividend share to look at is Elders. It is an agribusiness company that provides a range of services to rural and regional customers across the Australia/New Zealand region.

After a very difficult period during the 2010s, Elders has returned to form in the 2020s. This follows a highly successful transformation plan and the equally transformational acquisition of Australian Independent Rural Retailers.

Goldman Sachs is very positive on the company and its outlook. It currently has a conviction buy rating and a $17.65 price target on Elders shares.

As for dividends, the broker expects dividends per share of 45 cents in FY2022 and 47 cents in FY2023. Based on the current Elders share price of $14.19, this implies yields of 3.2% and 3.3%, respectively.

The post Analysts name 2 ASX dividend shares to buy next week 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. owns and has recommended ADAIRS FPO. The Motley Fool Australia owns and has recommended ADAIRS FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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