Category: Stock Market

It has been a difficult couple of years for the Treasury Wine Estates Ltd (ASX: TWE) share price.

Although the wine company’s shares are up a sizeable 23% in 2021, they are still down approximately 37% over the last two years.

Why is the Treasury Wine share price down 37% in two years?

The main cause of the Treasury Wine share price weakness over the last couple of years has been its exit from the China market.

The wine giant was effectively kicked out of the country after Chinese regulators slapped significant duties on its wine following anti-dumping and countervailing investigations into certain Australian wine exports into China.

China’s Ministry of Commerce put a duty rate of 175.6% on Treasury Wine’s Australian country of origin wine in containers of two litres or less imported into China. This essentially means that a $50 bottle of wine would now cost $137.80 after duties have been applied.

Given how lucrative the China market was for the company, this created a huge gap in its earnings and unsurprisingly put significant pressure on the Treasury Wine share price.

Can Treasury Wine fill the gap?

According to a note out of Citi, its analysts are optimistic on the company’s future and note that management is working hard to fill the Chinese earnings gap.

This includes the Penfolds brand shifting its strategy from Australian wine to French wine. This will see the company aim to launch its tariff-less French collection in China mid to late 2022.

Citi also commented: “The focus of this week’s virtual analyst event with Penfolds Managing Director and Group CFO was on the i) China strategy following the import tariffs, ii) Penfolds ability to restrict wine supply from Asian markets ending up in China through grey channels, and iii) distribution opportunities outside China.”

“We rate Treasury a Buy. We see the recent Frank Family Vineyards acquisition providing i) a significant distribution growth opportunity, ii) the scope to expand its market share in the luxury wine category, and iii) assistance to reach its 25% margin target, combined with the recent share price decline,” it added.

Citi has a $13.80 target on the Treasury Wine share price. This implies potential upside of 17% for investors.

The post Can Treasury Wine (ASX:TWE) ever fill the hole left by Chinese exports? appeared first on The Motley Fool Australia.

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• Cheers! Morgans tips Treasury Wine (ASX:TWE) share price to rise 19%
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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 Treasury Wine Estates 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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Evergrande is making headlines again after telling the market that it may run out of money.

The Chinese real estate developer has said that there was no guarantee that it would have enough funds to meet debt repayments.

In an announcement on the Hong Kong Stock Exchange, Evergrande said that since September 2021, it has been reviewing its capital structure and liquidity condition with the help of its financial and legal advisors, evaluating all available strategic options and maintaining ongoing dialogue with offshore creditors.

Here is what the company said about potentially not having enough cash:

In light of the current liquidity status of the Group, there is no guarantee that the Group will have sufficient funds to continue to perform its financial obligations. The Group is taking a comprehensive view in assessing its overall financial condition, considering the interests of all stakeholders, upholding the principles of fairness and legality, and plans to actively engage with offshore creditors to formulate a viable restructuring plan of the company’s offshore indebtedness for the benefit of all stakeholders.

Why did it make this announcement? It’s because the company has received a demand to “perform its obligations” under a guarantee for the amount of approximately US$260 million.

If Evergrande is unable to meet its guarantee obligations or certain other financial obligations, it “may lead to creditors demanding acceleration of repayment”.

Time will tell whether Evergrande is able to get through this latest problem.

What are the authorities doing about it?

According to reporting by Reuters, China’s Guangdong province has summoned the chair of Evergrande, Hui Ka Yan . Guandong province is where Evergrande is based.

The local government said that it would send people to the company to “oversee risk management, strengthen internal controls and maintain normal operations.”

It was also reported that China’s central bank, banking and insurance regulator and its securities regulator sought to reassure the market with statements.

The People’s Bank of China said:

Evergrande’s problem was mainly caused by its own mismanagement and break-neck expansion.

The People’s Bank also said that short-term risks caused by a single real estate firm will not undermine market fundraising in the medium and long term and supposedly housing sales, land purchases and financing “have already returned to normal in China.”

Reuters reported the China Banking and Insurance Regulatory Commission (CBIRC) said the Evergrande issue would not affect the industry’s normal operations and it would increase support for guaranteed rental housing. The Commission said that it believed domestic and overseas regulators would deal with Evergrande-related issues fairly.

Finally, the news agency said that the China Securities Regulatory Commission (CSRC) said any fallout for the capital market was “controllable” and it would maintain support for property developers’ funding needs.

What does this mean for ASX shares?

Evergrande is one of the biggest real estate developers in China, but it’s currently dealing with debts of more than US$300 billion. For Australia, Evergrande is a big user of steel and therefore Australian iron. If the company went under it could cause volatility.

The market will get a chance to react to this news with the share prices of ASX iron ore miners like BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO).

The London-listed BHP share price dropped 2.75% on Friday, so the ASX version of BHP may or may not follow on from that.

The post Evergrande admits it may not meet debt repayments appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy next week
• These were the best performing ASX 200 shares last week
• ASX 200 (ASX:XJO) midday update: BHP higher on unification plans, TPG tumbles
• BHP (ASX:BHP) share price lifts as single listing gets green light
• Analysts say these are the ASX resources shares to buy now for big returns

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 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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Health is a topic that’s never been far from everyone’s minds in the past 18 months, so it’s worth looking at ASX shares that are contributing to our wellbeing.

Each month investment firm Morgans publishes its “best ideas”, as analyst Andrew Tang explained.

“Our best ideas are those that we think offer the highest risk-adjusted returns over a 12-month timeframe supported by a higher-than-average level of confidence,” he said in the December ‘best ideas’ memo.

“They are our most preferred sector exposures.”

There are 2 healthcare ASX shares in Morgans’ latest list that caught our eye:

Volatile short term but excellent long term

Breathing apparatus maker Resmed CDI (ASX: RMD) is a December buy for Morgans.

That’s not to say the stock won’t be up and down over the next year or so.

“The next few quarters will likely be volatile, as COVID-related demand for ventilators continues to slow and core sleep apnoea volumes gradually lift,” said Tang.

“[But] nothing changes our medium/longer term view that the company remains well-placed as it builds a unique, patient-centric, connected-care digital platform that addresses the main pinch points across the healthcare value chain.”

Medallion Financial managing director Michael Wayne agreed, telling The Motley Fool last week that Resmed shares are a “core position” that his clients are “comfortable” holding.

“They’re growing at double digit revenue growth and earnings growth. Margins are very, very strong.”

Although it’s pulled back about 10% from its September highs, Resmed shares have still gained more than 31% for the year to date.

No end in sight for COVID-19 tests

International pathology services provider Sonic Healthcare Limited (ASX: SHL) was one of the best-performing health ASX shares last month.

“After a poor start to the month, shares in ASX healthcare giant Sonic Healthcare finished the month 7% in the green,” reported The Motley Fool’s Zach Bristow.

“Robust demand for COVID-19 tests and vaccinations bumped the company’s sales and earnings during the quarter.”

With the Omicron emerging in recent days, Tang has no doubt this activity will continue to bring in revenue.

“We see COVID-19 testing continuing into the foreseeable future, with growth potential in COVID serology testing.”

He added Sonic’s international core business is “increasingly resilient”. 

“Strong balance sheet — gearing 21.6x, $1.3 billion headroom — [opens] the door to acquisitions, contracts and JVs.”

Sonic shares closed the week at $42.62, up almost 30% for the year.

The post 2 healthcare ASX shares that Morgans loves right now appeared first on The Motley Fool Australia.

More reading

• 2 ASX shares with strong long term growth potential
• These were the 5 best performing ASX healthcare shares in November
• Advisor reveals the 3 most popular ASX shares among his clients
• 2 ASX shares looking good in turbulent times
• ASX 200 healthcare shares jump amid Omicron fears

Motley Fool contributor Tony Yoo owns shares of ResMed Inc. 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 ResMed Inc. and Sonic Healthcare 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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Are you looking to add some dividend shares to your portfolio this month? Then take a look at the ones listed below.

Both dividend shares have been tipped to grow their distributions over the coming years by analysts. Here’s what you need to know about them:

Bapcor Ltd (ASX: BAP)

The first ASX dividend share to look at is Asia Pacific’s leading provider of vehicle parts, accessories, equipment, service and solutions.

It has been growing at a solid rate over the last few years. This has been underpinned by its strong market position, growing store footprint, a favourable redirection in consumer spending, and robust demand for used cars.

And while FY 2022 is expected to be a touch subdued due to lockdowns and the cycling of strong sales in the prior corresponding period, the company has been tipped to pay an attractive dividend.

The team at Citi, for example, are forecasting fully franked dividends per share of 23 cents in FY 2022 and then 25 cents in FY 2023. Based on the current Bapcor share price of $6.79, this will mean yields of 3.4% and 3.7%, respectively.

Citi has a buy rating and $8.25 price target on the company’s shares.

Centuria Industrial Reit (ASX: CIP)

Another ASX dividend share to look at is Centuria Industrial. It is the largest domestic pure play industrial REIT with a portfolio of high-quality industrial assets situated in key metropolitan locations throughout Australia and underpinned by a quality and diverse tenant base.

Management notes that its portfolio is well positioned with an 89% weighing to Australia’s high performing eastern seaboard industrial markets and underpinned by strong tenant base. In respect to the latter, approximately 62% of portfolio income derived from occupants directly linked to the production, packaging and distribution of consumer staples, telecommunications and pharmaceuticals.

Macquarie is a fan of the company. Its analysts are forecasting dividends per share of 17.3 cents per share distribution in FY 2022 and an 18.7 cents per share distribution in FY 2023. Based on the current Centuria Industrial share price of $3.70, this will mean yields of 4.7% and 5%, respectively.

The broker has an outperform rating and $4.16 price target on its shares.

The post These ASX dividend shares have been tipped as buys this month 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 Bapcor. 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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On Friday the S&P/ASX 200 Index (ASX: XJO) finished a difficult week on a positive note. The benchmark index rose 0.2% to finish the week at 7,241.2 points.

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

ASX 200 expected to rise

The Australian share market looks set to start the week on a mildly positive note. According to the latest SPI futures, the ASX 200 is expected to open the day 11 points or 0.15% higher this morning. This is despite a very red end to the week on Wall Street, which saw the Dow Jones fall 0.2%, the S&P 500 drop 0.85%, and the Nasdaq tumble 1.9%.

Oil prices mixed

Energy producers such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) will be on watch after oil prices had a mixed finish to the week. According to Bloomberg, the WTI crude oil price fell 0.35% to US$66.26 a barrel and the Brent crude oil price rose 0.3% to US$69.88 a barrel. This follows comments out of OPEC stating that it will act if demand weakens.

Quarterly rebalance

S&P Dow Jones Indices has announced the December quarterly rebalance of the S&P/ASX Indices. This has seen six changes to the ASX 200. This includes Kogan.com Ltd (ASX: KGN), Nearmap Ltd (ASX: NEA), and Redbubble Ltd (ASX: RBL) being dumped out of the index on 20 December.

Gold price storms higher

Gold miners Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) could start the week on a very positive note after the gold price stormed higher on Friday night. According to CNBC, the spot gold price rose 1.3% to US$1,783.90 an ounce. COVID concerns and lower bond yields boosted demand for gold.

Metcash half year results

The Metcash Limited (ASX: MTS) share price will be one to watch on Monday when it releases its half year results. According to a note out of Ord Minnett, its analysts are expecting a net profit of $141 million for the six months. This is expected to allow the company to pay an interim dividend of 10.5 cents per share.

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

More reading

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• Is there hope for the Kogan (ASX:KGN) share price in the lead up to Christmas?
• These 3 ASX 200 shares are topping the volume charts this 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. owns shares of and has recommended Kogan.com ltd and Nearmap Ltd. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd and Nearmap 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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If you’re interested in gaining some exposure to the healthcare sector, then you may want to look at Healthco Healthcare and Wellness REIT (ASX: HCW) shares.

It is the latest addition to the Goldman Sachs conviction list with a buy rating and $2.56 price target.

This implies potential upside of ~15.5% for Healthco Healthcare and Wellness REIT shares over the next 12 months.

And with Goldman forecasting an attractive 3.3% dividend yield, the potential return stretches to almost 19%.

What is the Healthco Healthcare and Wellness REIT?

Healthco Healthcare and Wellness REIT owns a portfolio of healthcare and wellness assets predominantly on the eastern seaboard states.

Goldman Sachs believes it provides a good mix of defence plus offense given the external growth runway. In respect to defence, the broker notes that it has a weighted average lease expiry of ~9.4 years and strong tenant covenants in sub-sectors that are majority government-backed.

Whereas on the offense, the broker notes that the healthcare real estate sector in Australia is in its infancy, providing scope for a large runway for growth through acquisitions and ground up development.

Another reason Goldman is positive is its exposure to sub-sector mega trends.

It commented: “We believe the opportunity set for healthcare related assets is expansive and is underpinned by key mega trends within Australia: 1) Australia’s ageing population, 2) growing government expenditure, 3) technological improvements, and 4) the increasing consumption of health-related services. The company estimates an additional ~A$87bn of investment into healthcare property will be needed over the next 20 years, adding to the current ~A$218bn asset base.”

“We initiate coverage with a Buy (add to CL), given HCW’s strong balance sheet, attractive industry fundamentals and runway for external growth in its portfolio,” it concluded.

The post Goldman Sachs just added this ASX healthcare share to its conviction buy list appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy next week
• Where is the Christmas cheer for the Zip (ASX:Z1P) share price?
• What happened to the IAG (ASX:IAG) share price last month?
• 2 ASX dividend shares with 4% yields
• Why has the Fortescue (ASX:FMG) share price had such a lousy start to December?

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 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:

GUD Holdings Limited (ASX: GUD)

According to a note out of Citi, its analysts have retained their buy rating and lifted their price target on this diversified products company’s shares to $15.70. The broker sees strategic value in GUD’s plan to acquire Auto Pacific Group. Citi notes that it provides exposure to the 4×4 growth sector and geographic diversity. The broker has upgraded its earnings per share estimates for FY 2023 and FY 2024 materially to reflect the deal. So much so, the broker estimates that GUD trades at 10x FY 2024 earnings. The GUD share price ended the week at $11.10.

Rio Tinto Limited (ASX: RIO)

Another note out of Citi reveals that its analysts have retained their buy rating and $115.00 price target on this mining giant’s shares. Citi continues to have a preference for Rio Tinto among the larger miners. This is due partly to its exposure to green aluminium. It highlights that Rio Tinto’s hydro powered Canadian smelters emit <4t CO2/t of production versus industry average of 11.5t. It expects this to provide a competitive advantage over peers as markets start to price carbon costs into valuations. It also notes that the company is looking to commercialise the ELYSIS smelting process to further reduce carbon intensity in the aluminium value chain. The Rio Tinto share price was fetching $95.52 at Friday’s close.

Superloop Ltd (ASX: SLC)

Analysts at Morgan Stanley have upgraded this telco’s shares to an overweight rating with a $1.45 price target. The broker believes Superloop is a turnaround story following a period of divestments and balance sheet repair. In addition, it notes that the company is aiming to double its revenue share in the telco market in the coming years. Morgan Stanley believes this is achievable thanks partly to its fibre network. The Superloop share price ended the week at $1.26.

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

More reading

• These were the worst performing ASX 200 shares last week
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• Analysts say these are the ASX resources shares to buy now for big returns
• Did the Rio Tinto (ASX:RIO) share price start a recovery in November 2021?
• Why API, Chalice Mining, GUD, and Worley shares are charging higher

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 shares of and has recommended SUPERLOOP 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 Bruce Jackson.

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The Zip Co Ltd (ASX: Z1P) share price is not having a strong start to the festive season.

In the first few days of the month, Zip has dropped more than 6%. Over the past month the Zip share price has plunged 22%.

In-fact, it has been a steady decline for Zip since 20 October 2021 – it has fallen by 32%.

What’s happening to the Zip share price?

After hitting a high of almost $14 earlier this year, it has dropped by more than two thirds.

The business has continued to report growth. Only sellers would know why they are accepting a much lower price than earlier this year.

Some brokers are seeing some negative impacts for Zip.

For example, Macquarie Group Ltd (ASX: MQG) analysts note that both US and Australian growth rates were slowing down, with the US possibly affected by Zip rebranding from Quadpay to Zip. The three months to 31 December 2021 will be telling for ongoing growth considering it includes the important trading periods like Christmas, Black Friday and Cyber Monday.

UBS referred to the recent Payments System Board comments on buy now, pay later surcharges. The board said:

The Board has also concluded that it would be in the public interest for ‘buy now, pay later’ providers to remove their no-surcharge rules, consistent with the Board’s longstanding position on such rules. Given the complexity of the regulatory issues, the Bank will continue engaging with the Treasury on regulatory approaches.

The broker thinks this is a bad thing for the Zip share price.

Recent growth

Despite those negatives, Zip does continue to report a high level of growth.

For the three months to September 2021, quarterly revenue grew 89% year on year to $136.8 million on the back of transaction volume growth of 101% year on year to $1.9 billion.

Customer numbers grew 82% to 8 million and merchants on the platform jumped 71% to 55,200.

The business continues to seek international growth through acquisitions. One of its latest moves is expansion into India with an investment in ZestMoney.

ZestMoney is one of the largest and fastest growing buy now, pay later platforms in India with more than 11 million registered users, more than 10,000 online merchants and a presence in 75,000 physical stores.

Zip also reported that in Australia its arrears went from 0.91% at 30 September 2020 to 1.87% at 30 September 2021.

As well as India, it’s now looking to expand in Mexico, Canada and the Middle East.

Is the Zip share price good value?

Both Macquarie and UBS rate Zip as a sell. But the Zip share price has fallen so much that their price targets of $5.70 and $5.40 are both more than 10% higher than where it is now.

Other broker price targets from different price targets imply a high level of potential growth. For example, Morgans has a price target of $8.56, which is more than 70% higher than today.

The post Where is the Christmas cheer for the Zip (ASX:Z1P) share price? appeared first on The Motley Fool Australia.

More reading

• Here are 6 of the worst performing ASX shares of November
• The Zip (ASX:Z1P) share price fell 20% in November and now trades at a 52-week low
• These were the 5 worst performing ASX 200 shares in November
• These are the 10 most shorted ASX shares
• Down 20% in a month: Is the Zip (ASX:Z1P) share price too cheap to ignore?

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 shares of and has recommended ZIPCOLTD FPO. 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 Bruce Jackson.

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The Insurance Australia Group Ltd (ASX: IAG) share price edged lower in November, striking pain again for shareholders.

The company kept relatively quiet over the month with the last price-sensitive release coming at the beginning of November.

The insurance giant’s shares travelled around 8% lower for the month. However, on Friday, the company clawed back some of those losses to post a 1.59% gain. As at market close on Friday, the IAG share price is $4.47.

What’s the latest with IAG?

With the company not making any new announcements since its trading update, investors have continued to weigh down IAG shares.

The company revealed that it is expecting a significant rise in net natural perils claim costs for FY22. Severe storm and hail activity experienced in South Australia and Victoria during October were being blamed for the increased costs.

In total, net natural perils claim costs for the current financial year is forecast to be around $1,045 million. This is a hefty amount from the company’s previous estimates of $765 million. It is worth noting that this includes $510 million for perils events for the remainder of the financial year.

The seasonally unexpected claims made year to date has forced IAG to downgrade its FY22 insurance margin guidance.

As such the company is forecasting an insurance margin guidance range of between 10% to 12%. Previously, the insurance margin level stood in the 13.5% to 15.5% range. Inflationary pressure on claims costs in the company’s motor and home portfolios were partly offset by lower vehicle claims.

Undoubtedly, the concerning update affected IAG shares, falling 7% on the day of the release alone. And since 9 November, its shares have mostly featured in the red, with a number of days recording consecutive losses.

While still trying to navigate its way through the tough trading conditions, IAG shares at trading at near multi-year lows.

IAG share price recap

Over the last 12 months, the IAG share price has lost around 15%, with year to date down 5%. The company’s shares have fallen 60% since July 2019, with heavy losses attributed to the COVID-19 pandemic.

Based on today’s price, IAG presides a market capitalisation of roughly $10.84 billion, with approximately 2.47 billion shares on issue.

The post What happened to the IAG (ASX:IAG) share price last month? appeared first on The Motley Fool Australia.

More reading

• Own IAG (ASX: IAG) shares? Here’s why the company is facing a shareholder class action
• With the IAG (ASX:IAG) share price trading around decade-lows, is now the time to buy?
• November hasn’t been a great month so far for the IAG (ASX:IAG) share price
• Is the IAG (ASX:IAG) share price set to outperform? Here’s what Motley Fool Australia analyst Drew Flowers says
• Why is the IAG (ASX:IAG) share price rising for the first time in 7 days?

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 owns shares of and has recommended Insurance Australia Group 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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If you’re looking to boost your income with some dividend shares, then you might want to consider the ones listed below.

Both dividend shares are expected to provide investors with attractive yields in the near term. Here’s what you need to know about them:

BWP Trust (ASX: BWP)

The first ASX dividend share to look at is this commercial property company. BWP has a focus on warehouses, with vast majority of its properties leased to Bunnings Warehouse. In fact, the company is the largest owner of the hardware giant’s properties.

BWP has been a positive performer during the pandemic thanks largely to the strength of the Bunnings business. The retailer’s strong performance has allowed BWP to collect rent largely as normal and underpinned a notable increase in the value of its properties.

In FY 2021, BWP paid an 18.29 cents per unit distribution. Management advised that it plans to pay a similar distribution in FY 2022. Based on the current BWP share price of $4.14, this will mean a 4.4% dividend yield.

Rural Funds Group (ASX: RFF)

Another ASX dividend share to look at is this agricultural real estate investment trust (REIT).

Rural Funds owns a diversified portfolio of Australian agricultural assets which are leased to large industry players including Select Harvests Limited (ASX: SHV) and Treasury Wine Estates Ltd (ASX: TWE).

The company has also just added to its portfolio through the acquisition of a number of cattle and cropping properties in Queensland. Management notes that these are consistent with its strategy of acquiring assets with potential for productivity improvements, in agricultural sectors in which it has operating experience and Australia has a comparative advantage.

In FY 2022, the company intends to increase its dividend by its annual target rate of 4% to 11.73 cents per share. Based on the current Rural Funds share price of $2.90, this represents a yield of 4%.

The post 2 ASX dividend shares with 4% yields appeared first on The Motley Fool Australia.

More reading

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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 owns shares of 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 Bruce Jackson.

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