Category: Stock Market

Investors may be on the search for ASX dividend shares that can provide growing income in retirement.

Not every business has been able to grow their dividend in every year of the past five years. Just look at what happened to Sydney Airport Holdings Pty Ltd (ASX: SYD), Transurban Group (ASX: TCL) and Commonwealth Bank of Australia (ASX: CBA) with COVID-19.

But these two ASX dividend shares may be able to provide growing dividends in the coming years:

APA Group (ASX: APA)

APA is one of the biggest infrastructure businesses on the ASX. It owns a vast gas pipeline across Australia, spanning 15,000km across mainland Australia. APA supplies half of the nation’s natural gas usage. It also owns or has interest in gas storage facilities, gas power stations and renewable energy generation (wind and solar farms).

The business recently confirmed it is in discussions to potentially buy Basslink Pty Limited, which owns and operates a 370km high voltage, direct current electricity interconnector between Victoria and Tasmania.

A key focus of the business is to leverage its energy infrastructure capabilities into the next generation energy technologies. APA calls this its pathfinder program. APA is looking for opportunities in both Australia and the USA.

APA points to an opportunity worth at least $68 billion to 2040 in Australia. That’s $8 billion in gas pipeline infrastructure, at least $40 billion in renewables, firming and storage and at least $20 billion in electrification (mostly transmission).

In the USA, APA also says there’s an investment opportunity worth at least US$2.7 trillion to 2040. There’s $125 billion of gas pipeline infrastructure, US$1.6 trillion of renewables and firming and US$1 trillion of electrification.

APA also believes the hydrogen economy worldwide is worth up to US$11 trillion. There is potential for APA’s existing pipeline to be repurposed for hydrogen (fully or blended).

The ASX dividend share has increased its distribution every year for over a decade and a half. In FY22 it’s expecting to grow the distribution by another 3.9% to 53 cents. That’s a forward distribution yield of 5.7%.

Washington H. Soul Pattinson and Co Ltd (ASX: SOL)

Soul Patts is an investment house that has been listed since 1903. It has paid a dividend every year since then. It also has the record on the ASX for the number of years it has consecutively increased its dividend for shareholders. That growth streak started in 2000.

The business has a diversified portfolio of assets that help fund its dividend every year. Some of its ASX investments include TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), New Hope Corporation Limited (ASX: NHC), Milton Corporation Limited (ASX: MLT), Bki Investment Co Ltd (ASX: BKI), Clover Corporation Limited (ASX: CLV), Pengana Capital Group Ltd (ASX: PCG), Pengana International Equities Ltd (ASX: PIA) and Australian Pharmaceutical Industries Ltd (ASX: API).

The ASX dividend share also has investments in unlisted businesses such as agriculture, financial services, mining (Round Oak), swimming schools and electrical products (Ampcontrol).

Round Oak, Brickworks and New Hope are expected to add to Soul Patts’ FY21 regular net profit after a good year.

Soul Patts receives dividends and distributions from its portfolio, pays out some as a growing dividend and re-invests the rest for more long-term growth.

At the current Soul Patts share price, it has a grossed-up dividend yield of 2.5%.

The post 2 ASX dividend shares that could provide growing income in retirement appeared first on The Motley Fool Australia.

More reading

• Transurban (ASX:TCL) share price could get boost from WestConnex rumour
• ASX 200 edges higher, Soul Patts (ASX:SOL) falls, Hansen (ASX:HSN) declines
• Here’s why the Brickworks (ASX:BKW) share price is lifting on Monday
• Leading brokers name 3 ASX shares to buy today
• Soul Patts (ASX:SOL) share price slips on FY21 earnings update

Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Clover Corporation Limited. The Motley Fool Australia owns shares of and has recommended APA Group, Brickworks, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended TPG Telecom Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The AGL Energy Limited (ASX: AGL) share price has fallen from grace, reaching an all-time low of $6.22 yesterday. This is a stark contrast from when its shares were trading around the $27 mark in April 2017.

Ever since COVID-19, the company has been severely impacted by several downgraded earnings estimates.

At Monday’s market close, AGL shares finished the day slightly up 0.47% to $6.44.

What’s dragging AGL shares lower lately?

There are a few catalysts as to why the AGL share price has tumbled lower over the past month.

First and foremost, AGL released its full year results in mid-August, recording significant losses across the board.

The company acknowledged that it’s struggling with the current conditions of the national electricity market as well as unstable electricity prices. This led to a sharp downturn in wholesale prices for electricity and renewable energy certificates.

Adding to the strain, AGL’s soon-to-close Liddell coal-fired power station faced temporary closures this year. An injured worker and the outage of Liddell Unit 2 forced AGL to shut down operations.

The company plans to transform the site with a hydro and solar energy facility following Liddell’s ceased operations in 2023.

AGL has since proposed to split into two separate energy businesses following a catastrophic 12 months.

The first, New AGL, will focus on delivering electricity, gas, internet, and mobile services to Australian households, emerging as a zero-carbon electricity supplier. And the other business, PrimeCo, will be centred on becoming Australia’s largest electricity generator.

AGL previously noted that it is shifting towards more environmentally friendly options.

AGL share price summary

It has been a disastrous 4 years for AGL shareholders, having lost around 75% of their portfolio value. The company’s share price is down almost 60% in the past 12 months alone, with no end in sight.

It’s anyone guess if and when the AGL share price will stage a recovery and recoup its worth.

On valuation grounds, AGL commands market capitalisation of around $4 billion, with 623 million shares on its registry.

The post The AGL (ASX:AGL) share price is down 16% in a month. Here’s why appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Investors may finally have a reason to get excited again about the Transurban Group (ASX: TCL) share price.

There are reports that the ASX toll road operator is in pole position to snatch a commanding stake in Sydney’s WestConnex.

This is because its biggest competitor to the buyout, IFM Investors, is pulling out of the race, reported the Australian Financial Review.

Transurban share price in fast lane to WestConnex?

The article didn’t cite any sources but claimed that IFM will not be bidding on the auction this week. This is despite undertaking due diligence over the past six months and trying hard to win a slice of the asset over the last five years.

If the rumours are true, it could energise the Transurban share price. There has been a lack of catalysts for the S&P/ASX 200 Index shares as the long delta lockdowns in Victoria and New South Wales and project blowouts cloud its outlook.

Transaction share price catalyst

Nothing like a significant transaction to put the Transurban share price back in the fast lane!

IFM taking the exit ramp means leaves a clear road ahead for Transurban and its consortium buddies to put in a winning bid for 24.5% of WestConnex this week.

The consortium includes AustralianSuper and Canada Pension Plan Investment Board, according to the AFR.

In it to win it

Another 24.5% stake in WestConnex will be auctioned off next week. But bidders will need to have participated in the first auction to be entitled to bid in the second. As they say, you have to be in it to win it.

But the last lap is usually the most exciting part of any race, and this is no different. IFM has not formally withdrawn from the auction and there’s room for manoeuvring and surprises before Thursday’s bid deadline.

After all, IFM lost out to Transurban for a stake in WestConnex back in 2018 and one would think they wouldn’t be giving up so easily.

Infrastructure makes hot M&A targets

Throw in the fact that quality infrastructure is in hot demand during this ultra-low interest rate era. It’s this hunt for stable and predictable yield that triggered takeover bids for the Sydney Airport Holdings Pty Ltd (ASX: SYD) share price and Spark Infrastructure Group (ASX: SKI) share price.

There’s even talk that gas pipeline owner APA Group (ASX: APA) could attract a suitor too even as it mulls acquiring assets.

Too early to call a winner

Further, IFM will miss out on a $50 million consolation prize if it pulls out now. The AFR said that bidders are offered a 1% capital commitment fee if their bid hit the states reserve price and was unsuccessful.

The fee is meant to offset costs in preparing the bid and to encourage competition.

In case you are wondering, Transurban and its consortium owns the 51% stake in WestConnex that isn’t up for auction.

The post Transurban (ASX:TCL) share price could get boost from WestConnex rumour appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• ASX 200 edges higher, Soul Patts (ASX:SOL) falls, Hansen (ASX:HSN) declines
• Here are the 3 most traded ASX 200 shares this Monday
• Here are the top 10 ASX 200 shares on Monday
• Why the Evolution Mining (ASX:EVN) share price is leaping higher today

Motley Fool contributor Brendon Lau 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 APA Group. 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 Vulcan Energy Resources Ltd (ASX: VUL) share price has come into the spotlight again this week.

Not that it ever really lost the spotlight.

With the lithium developer’s shares up 422% since the start of the year, it has been getting a lot of attention from investors.

Why is the Vulcan Energy share price in the spotlight this week?

The Vulcan Energy share price was given an additional boost this week when S&P Dow Jones Indices announced changes to the S&P/ASX Indices. These changes will be effective prior to the open of trading on 20 September and follow S&P Dow Jones Indices’ quarterly review.

According to the release, the lithium developer’s shares will be added to the S&P/ASX 300 Index (ASX: XKO) at the next rebalance.

It is one of 12 new additions to the index, along with fellow lithium explorer Liontown Resources Limited (ASX: LTR) and battery materials focused company Novonix Ltd (ASX: NVX).

Why is this good news for Vulcan Energy?

Being added to an index like the ASX 300 can be a big positive for a company’s shares.

This is for two reasons. The first is that index funds or ETFs that track the index will have to purchase shares. This buy-side pressure could give the Vulcan Energy share price an additional boost in the coming days and weeks.

Another reason is that many fund managers have strict investment mandates. This means they can only buy shares from certain indices.

This means that any fund managers that were restricted from buying shares outside the ASX 300, will now be able to consider Vulcan shares.

Though, with the Vulcan share price up so much since the start of the year, they may well wait for a pullback before considering an investment.

The post Why the Vulcan Energy (ASX:VUL) share price is in the spotlight this week appeared first on The Motley Fool Australia.

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• Why the Vulcan Energy (ASX:VUL) share price is jumping 7% 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. 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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The Aussie Broadband Ltd (ASX: ABB) share price won’t be going anywhere on Tuesday after the company requested a trading halt.

What’s the trading halt for?

Aussie Broadband said it “is in the process of making and finalising arrangements in relation to a potential capital raising”.

The company advised that its shares will remain halted until an announcement is made to the market in relation to the outcome of the proposed capital raising or until Thursday, 9 September.

According to the company’s FY21 results, it had $57 million in cash and cash equivalents.

The decision to raise capital comes after the Aussie Broadband share price surged 7.67% to a record close of $4.63 on Monday.

What’s next for Aussie Broadband?

Aussie Broadband is looking to continue its strong growth trajectory after a stellar performance in FY21.

The company’s FY21 full-year results highlighted an 84% jump in revenue to $350.3 million. Additionally, earnings before interest, taxes, depreciation, and amortisation (EBITDA) surged 433% to $19.1 million.

As a result, the company’s loss before income tax benefit came in at $4.2 million compared to a $12.3 million loss in FY20.

The Aussie Broadband share price has surged 23% since its results announcement on 30 August.

According to the company’s FY21 results, it is targeting the completion of its fibre build this year. More than 1,200km of Aussie Broadband-owned fibre will be in the ground on completion. This is expected to drive more than $15 million per year in savings from FY23 onwards.

Aussie Broadband managing director Phillip Britt highlighted the upcoming milestone as a catalyst to drive both savings and growth.

“We anticipate that our fibre network will start to show financial benefits not only through offloading existing leased infrastructure but also through the opportunity to directly connect customers to our own network,” Britt said.

Looking ahead, the company said it wanted to become “solutions-focused” rather than just selling connections to customers or third parties.

Aussie Broadband highlighted products under development including security, managed hardware and cloud solutions.

Aussie Broadband share price snapshot

The Aussie Broadband share price has surged 129% year-to-date.

The company successfully debuted on the ASX on 16 October at a listing price of just $1.00.

The post Why the Aussie Broadband (ASX:ABB) share price is frozen on Tuesday appeared first on The Motley Fool Australia.

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Motley Fool contributor Kerry Sun owns shares of Aussie Broadband Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Aussie Broadband Limited. The Motley Fool Australia has recommended Aussie Broadband 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 Qantas Airways Limited (ASX: QAN) share price is on watch this morning after the airline confirmed that it has received bids from numerous potential buyers of its Mascot land.

The airline expects the sale to be worth several hundred million dollars. Many outlets are reporting it will result in a $500 million payday for Qantas.

The Qantas share price finished yesterday’s session trading for $5.39 after gaining 0.94% over the course of Monday.

Let’s take a closer look at today’s news of Qantas.

Qantas share price in focus on news of buyers

The Qantas share price will be one to watch this morning after the airline confirmed it has received 18 competitive bids from potential buyers for its nearly 14-hectares of under-developed industrial land.

Qantas launched an expression of interest to scope out buyers for the Mascot land in July.

A Qantas spokesperson commented on the strong interest in the land:

What’s been clear from the market is that there’s a lot of value in this land given how the surrounding area has developed over the past decade or so. Assuming we sell some or all of the 14 hectares that we took to the market, we’d expect to have agreements finalised in the next two months.

Qantas expects to have finished offloading the 14-hectares by the end of 2021. The funds resulting from the sale will be put towards paying off the airline’s debt.

According to reporting by The Australian, Lendlease Group (ASX: LLC) and Mirvac Group (ASX: MGR) are among those jockeying to grab the land.

Market watchers might want to keep an eye on the Qantas share price in the coming months as the Mascot land goes under the hammer.

As The Motley Fool Australia has previously reported, Qantas has owned some of the land since the 1960s. Its value has quadrupled over the last decade as South Sydney’s industrial precinct has grown.

The Qantas distribution centre is also reportedly located on the land. Qantas is said to be planning to lease the centre back from its potential buyer.

The post Why the Qantas (ASX:QAN) share price is in focus on Tuesday appeared first on The Motley Fool Australia.

More reading

• The Qantas (ASX:QAN) share price is having a great start to the week
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• If you invested $1,000 in Qantas (ASX:QAN) shares a decade ago, here’s what they would be worth now
• Qantas (ASX:QAN) share price falls while international ‘Points Planes’ considered
• Here’s why the Qantas (ASX:QAN) share price rallied 10% in August

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Xero Limited (ASX: XRO) share price has been a positive performer over the last few weeks.

Since this time in August, the cloud accounting platform provider’s shares are up 3.5% to $152.75.

This compares favourably to a broadly flat performance by the S&P/ASX 200 Index (ASX: XJO) over the same period.

Why is the Xero share price pushing higher?

The decent gain by the Xero share price over the last month appears to have been driven by a broker note out of Goldman Sachs at the start of August.

According to the note, its analysts reiterated their buy rating and $165.00 price target on the company’s shares.

Based on the current Xero share price, this implies potential upside of 8% over the next 12 months.

Why is Goldman positive on Xero?

Goldman Sachs is positive on Xero due to its strong revenue growth potential. In fact, the broker is forecasting its revenue to double by FY 2024 due to a combination of subscriber growth, price increases, and mergers and acquisitions (M&A).

The broker commented: “We expect XRO revenue to double across FY21-24E (+26% CAGR), driven by: (1) ARPU growth from the recently announced price rises (benefiting FY22/23E) and the introduction of this app store fee (benefiting FY23/24E); (2) Subscriber growth, given accelerating subscriber growth across all geographies in 2H21, and strong recent traction from its Enterprise strategy (i.e. recently signed a Global partnership with DFK, the 7th largest Global Accounting Association, to complement agreements with BDO/RSM); and (3) M&A, with the Planday acquisition to contribute +3% growth in FY22E.”

App Store launch

Goldman was also pleased with the launch of the Xero App Store across the ANZ and UK markets. It notes that this will streamline and simplify access to the ~1,000 apps currently available, with Xero earning a 15% royalty on subscriptions purchased through the store.

It said: “We see this as a positive step from Xero, which is increasingly focused on monetizing its strong market positions within the ANZ and UK markets, with the incremental revenues used to accelerate its ongoing global expansion.”

“We previously outlined our belief that a 10-15% app-store fee was possible for Xero, given this would provide consistency across the Xero app developers to incentivize continued investment, while being comparable to a number of digital marketplaces globally who have app fees ranging from 12% (Epic Games) to 30% (Apple, Google, Steam, etc).”

“Although the quantum of app attachment rates is uncertain, we estimated that a 15% app store fee could open up an incremental NZ$1.4bn of TAM, with these earnings likely to be 100% margin,” it concluded.

All in all, although the Xero share price is up 62% over the last 12 months, Goldman doesn’t believe the gains are over.

The post Top broker says Xero (ASX:XRO) share price is a buy appeared first on The Motley Fool Australia.

More reading

• 2 excellent ASX tech shares rated as buys
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• Analysts rate these ASX tech shares as buys
• The Xero (ASX:XRO) share price is up 50% over the past 12 months

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 Xero. The Motley Fool Australia owns shares of and has recommended Xero. 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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It could be a difficult day for BHP Group Ltd (ASX: BHP), Fortescue Metals Group Limited (ASX: FMG), and Rio Tinto Limited (ASX: RIO) shares on Tuesday.

This follows another pullback in the iron ore price during overnight trade.

What’s happening?

Unfortunately for these mining giants, the iron ore price came crashing down to Earth during overnight trade.

According to Metal Bulletin, the catalyst for this weakness was Chinese authorities taking a stricter stance against steelmakers on steel production curbs and the start of sintering restrictions.

This ultimately led to the benchmark iron ore price falling a disappointing US$13.55 a tonne or 9.3% to US$131.50 a tonne.

It was a similar story for lower grade 58% fines iron ore, which fell 9% or US$9.84 a tonne to US$104.70 a tonne.

What now for BHP, Fortescue, and Rio Tinto shares?

Where BHP, Fortescue, and Rio Tinto shares go next will depend largely on what happens with the iron ore price.

Given how much iron ore contributes to their sales, higher prices have boosted their profits and underpinned generous dividend payments.

If there isn’t a rebound in the steel making ingredient in the near term, it could lead to revisions to earnings estimates for the miner.

For example, Goldman Sachs is currently forecasting an average iron ore price of US$178 a tonne in FY 2022 and then US$140 a tonne in FY 2023.  If prices don’t improve soon, it seems unlikely that they will average those levels during the coming financial years.

This could mean that these miners won’t be in a position to deliver on the broker’s forecasts, potentially putting their shares under pressure.

Though, as we have seen in the past, the iron ore price has a habit of surprising to the upside. So don’t count it out just yet.

The post Why BHP, Fortescue, & Rio Tinto shares could tumble today appeared first on The Motley Fool Australia.

More reading

• How does the BHP (ASX:BHP) dividend compare to its sector?
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Afterpay Ltd (ASX: APT) share price just seems to be the gift that keeps on giving for ASX investors. Not only has this buy now, pay later (BNPL) pioneer shot up by more than 72% over the past 12 months, it has also managed to give investors a sizable 5.6% return over just the past month or so (since 5 August).

So what has gone so right for Aferpay investors over the past month?

Well, as anyone with even a remote interest in Afterpay would know by now, Afterpay is currently in the process of being acquired by the US payments giant Square Inc (NYSE: SQ). Last month, Afterpay announced that it would be bought out by Square in an all-scrip deal.

Once this deal reaches its conclusion, Afterpay investors will be receiving 0.375 shares of Square for every Afterpay share held.

Many investors historically struggled to value Afterpay. That’s due to the company’s status of boasting ballooning revenues but no profitability. At least as yet.

Afterpay share price worth whatever Squares

Well, that is no longer of any real concern. That’s because, in the time that Afterpay has left as its own public company, there’s a far easier way of valuing Afterpay shares: whatever 0.375 of a Square share is worth. That’s the price that Afterpay shares will eventually be acquired at. As such, it arguably represents the company’s ‘value’ to investors today.

So let’s check out what the Square share price has done over the past month or so. Since 5 August, Square shares have gone from roughly US$281.80 to the most recent price of US$269.74. That’s a fall of around 4%.

Even so, on today’s exchange rates and the most recent Square share price, this offer of 0.375 Square shares per Afterpay share means that the offer is currently worth an Afterpay share price of approximately $135.95.

Afterpay shares are still a way away from this price. Because of this, it’s possible that investors have moved to ‘close the gap’ over the past month or so. This would have the effect of pushing the Afterpay share price closer to the value of what 0.375 of a Square share is currently worth.

At Afterpay’s closing share price of $132.88, the company has a market capitalisation of $38.55 billion.

The post Here’s why the Afterpay (ASX:APT) share price is up 5% in a month appeared first on The Motley Fool Australia.

More reading

• Afterpay (ASX:APT) share price edges higher amid increasingly crowded BNPL space
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• How has the Square share price performed since announcing the Afterpay deal?

Motley Fool contributor Sebastian Bowen owns shares of Square. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO and Square. The Motley Fool Australia owns shares of and has recommended AFTERPAY T 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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Motley Fool Australia Chief Investment Officer Scott Phillips joined Weekend Sunrise on Sunday to discuss some options for spring cleaning your finances with four ways to save money, as well as some of the very low mortgage rates on offer, so make sure you call your bank (or the competition) and #getabetterrate.

The post Spring clean your finances, and #getabetterrate. Scott Phillips on Weekend Sunrise appeared first on The Motley Fool Australia.

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Motley Fool contributor Scott Phillips 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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