Category: Stock Market

The Core Lithium Ltd (ASX: CXO) share price came under intense selling pressure in the financial year just past.

Shares in the All Ordinaries Index (ASX: XAO) lithium stock closed out FY 2023 trading for 90 cents. On 28 June, the last day of FY 2024, shares closed the day at 9.3 cents apiece.

That put the Core Lithium share price down a painful 89.7% over the financial year.

Here’s why the ASX lithium miner just finished off a year to forget.

What happened to the Core Lithium share price in FY 2024?

Most of the pressure heaped onto the Core Lithium share price came from an ongoing slide in global lithium prices.

With lithium supplies ramping up faster than demand growth over the year, the lithium carbonate price ended FY 2024 at around US$11,000 a tonne. That’s well down from the 2022 all-time highs. And it’s less than a third of the US$32,000 a tonne that lithium prices averaged in 2023.

While there were a few sizeable moves higher for the Core Lithium share price over the 12 months, the trend was sharply lower, as you can see in the chart above.

The 2024 calendar year started poorly.

On 5 January, the miner announced it was suspending mining operations at its flagship Finniss Project in the Northern Territory in early January. With lithium prices crashing, management said it was unprofitable to continue mining.

While continuing to process its established ore stockpiles, Core Lithium indicated it was unlikely to resume operations at Finniss until lithium prices have recovered.

The company’s half-year results, released after market close on 12 March, also left much to be desired.

For the first six months of FY 2024, Core reported revenue of $135 million and a loss after tax of $167 million. The company also announced that CEO Gareth Manderson was leaving the top job.

The Core Lithium share price crumbled by 30% over the five trading days following the half-year announcement.

And the miner’s 3Q FY 2024 results, released on 29 April, did little to placate shareholders.

While Core continued to process ore stockpiles, quarterly spodumene concentrate production declined by 14% from the prior quarter.

Commenting on those results at the time, interim CEO Doug Warden acknowledged that, “Following the decision to cease mining in January 2024, it has been a challenging quarter for Core employees, contractors and shareholders.”

As for FY 2025, the Core Lithium share price closed the first trading week of the new financial year flat at 9.1 cents.

The post Why did the Core Lithium share price crash 90% in FY 2024 appeared first on The Motley Fool Australia.

More reading

• Guess which 2 ASX All Ordinaries shares were the best and worst performers of FY24?
• ASX lithium shares: Screaming bargains or falling knives?
• Which ASX lithium shares are financially primed to survive this rut?
• Will FY25 be kinder to Core Lithium shares?
• The Core Lithium share price is down 36% in a month. Time to pounce?

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

If you’re in the market for some new ASX 200 shares in July, then it could be worth listening to what analysts at Bell Potter are saying.

That’s because they have just revealed their favoured picks for the month ahead. Three on its list this month are named below. Here’s what the broker is saying about them:

Mineral Resources Ltd (ASX: MIN)

Bell Potter continues to see a lot of value in this mining and mining services company’s shares at current levels.

Its analysts like the company due to the diversity of its operations and its strong production growth potential. It said:

Our Buy view is underpinned by MIN’s earnings diversification, strong insider ownership, clearly articulated strategies, expertise in contracting and internal growth options at Onslow as well as potential lithium expansions including into downstream. All up, MIN offers diversified exposure to steady income streams from the contracting business and market-driven commodity exposure coupled with earnings derived from both lithium and iron ore.

Bell Potter has a buy rating and $84.00 price target on the ASX share. This implies potential upside of approximately 45% for investors.

Neuren Pharmaceuticals Ltd (ASX: NEU)

Another ASX 200 stock that could be a buy in July according to the broker is Neuren Pharmaceuticals. It is a growing biotechnology company developing treatments for rare diseases of the central nervous system.

Bell Potter is particularly positive on its NNZ-2591 product and believes it could be a key driver of growth in the coming years. It said:

In the last six months, NNZ-2591 reported highly encouraging Phase 2 data in two rare diseases. NEU will once again have first-to-market opportunities in these two rare diseases, assuming future Phase 3 trials are successful. While short-term news will continue to be impacted by Acadia’s commercialisation of NEU’s first drug, called Daybue, we maintain our BUY recommendation for investors who have a longer 2 to 3-year investment horizon.

Bell Potter has a buy rating and $28.00 price target on its shares. This suggests that upside of 40% is possible for investors.

Perpetual Ltd (ASX: PPT)

The broker believes that this ASX 200 stock could be seriously undervalued by the market. Especially given the recently announced sale of its Corporate Trust (CT) and Wealth management (WM) businesses to private equity firm KKR.

It believes this makes the remaining business cheap compared to peers. It explains:

Perpetual announced a disposal of the Corporate Trust (CT) and Wealth Management (WM) businesses to KKR for $2.175bn. This price was ahead of our expectations ($1.5-1.9bn), and should result in a cash payment to shareholders of between $804m-1,104m or $6.95- 9.55 per share, dependent upon the assumptions, particularly tax and deal costs. We estimate the residual asset management business is being valued at between $1.3-1.6bn or between 3.5x-5.5x EBITDA. We believe this is too low for an international asset manager. Valuing the residual asset management business on 6.3x FY25 would imply a value of $2.1bn or $18.17/per share.

Bell Potter has a buy rating and $27.60 price target on its shares. This reflects ~$18.17 for the remaining business and a forecast cash distribution of ~$9.50. Based on its current share price, this implies potential upside of 28% for investors.

The post Bell Potter names 3 of the best ASX 200 stocks to buy in July appeared first on The Motley Fool Australia.

More reading

• Best 3 ASX 200 healthcare shares for price growth in FY24
• Here are the top 10 ASX 200 shares today
• Here are the top 10 ASX 200 shares today
• Which ASX lithium shares are financially primed to survive this rut?
• This ASX stock just announced a special dividend with a 20% yield

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

As you plan for retirement, it’s essential to ensure that your superannuation contributions align with your income bracket. Contributing enough to your super is vital for securing a comfortable retirement, but many Australians are unsure if they’re doing enough.

In this article, we’ll explore average super contributions and balances across income groups. Understanding where you stand in your income bracket can empower you to make informed decisions towards a financially secure retirement.

Average and median superannuation balances by income group

Let’s begin by examining the superannuation balances of Australians across different income brackets. According to the Australian Taxation Office, here are the average and median super balances for FY21 and FY22 by income bracket:

Taxable income	Average balance 2020–21	Average balance 2021–22	Median balance 2020–21	Median balance 2021–22
$18,200 or less	$200,833	$161,473	$31,237	$21,374
$18,201 to $45,000	$102,045	$98,453	$18,047	$17,127
$45,001 to $180,000	$153,187	$142,818	$77,930	$70,374
$120,001 to $180,000	$325,265	$295,925	$200,164	$178,728
$180,001 or more	$615,266	$573,053	$331,971	$303,980
No income tax return	$132,312	$132,854	$36,568	$40,888
Total	$170,191	$164,126	$59,883	$57,912

• Lower-income earners: For those making $18,200 or less, the average and median super balances dip noticeably. This change signals a need for extra support to help the lower-income group grow their retirement savings.
• Steady despite challenges: Interestingly, individuals without a taxable income managed a slight increase in their average super balance. This resilience suggests various factors are at play, including possibly government co-contributions that helped buoy their savings.
• Middle-income group: Those earning between $45,001 and $180,000 saw their super balances shrink a bit. Despite this, their continued accumulation of substantial savings points to the importance of regular contributions and the benefits they bring over time.
• High earners: The top earners, those with incomes of $180,001 or more, experienced a decrease in their average balance but still maintained significant savings. This highlights how higher contribution limits and perhaps more aggressive investment strategies can pay off.

How much did Aussies contribute to super?

The ATO’s FY22 data breaks down individuals’ superannuation contributions by taxable income brackets. The original data is separated by gender, age, and income range, but I combined them to find subtotals and calculated averages for each income group.

Income range	Employer	Personal	Other	Total contribution
$18,200 or less	$1,037	$5,595	$1,718	$8,350
$18,201 to $45,000	$3,070	$2,890	$480	$6,440
$45,001 to $180,000	$7,766	$2,070	$530	$10,366
$120,001 to $180,000	$13,842	$4,083	$1,288	$19,213
$180,001 or more	$19,103	$9,284	$1,918	$30,306
No income tax return	$4,757	$4,044	$2,171	$10,972

The ATO’s FY22 data shows significant variation across different income brackets:

• $18,200 or less: This group made total contributions averaging $8,350, with the majority coming from personal contributions of $5,595.
• $18,201 to $45,000: Contributions totalled $6,440, with employer contributions of $3,070 being the largest component.
• $45,001 to $120,000: Total contributions reached $10,366, predominantly from employer contributions amounting to $7,766.
• $120,001 to $180,000: This income range had contributions of $19,213, with a substantial amount coming from employer contributions at $13,842.
• $180,001 or more: Contributions were highest in this bracket, totalling $30,306. Employer contributions were again the largest part at $19,103.
• No income tax return: This group made contributions totalling $10,972. However, this group has a more balanced distribution among employer, personal, and other contributions.

This data highlights that higher income groups generally contribute more to their superannuation, with employer contributions being the primary source across all brackets.

It’s encouraging to note that Australians across different income levels are actively making additional contributions to their super accounts, taking advantage of the tax benefits offered by super.

I hope your super contributions are on a par with other Aussies making similar income. Explore more about superannuation here for additional insights.

The post Are you contributing enough to superannuation for your income bracket? appeared first on The Motley Fool Australia.

More reading

• These ASX shares can rise 25% to 40%
• Why did the Core Lithium share price crash 90% in FY 2024
• Bell Potter names 3 of the best ASX 200 stocks to buy in July
• 3 things about Vanguard US Total Market Shares Index ETF (VTS) every smart investor knows
• Forget CBA and buy these ASX dividend stocks

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

The Vanguard US Total Market Shares Index ETF (ASX: VTS) is a high-quality exchange-traded fund (ETF) that most people would have benefited from owning in the last five years. The unit price has gone up more than 80%, as shown on the chart below.

The US share market is home to many of the world’s biggest and strongest businesses including Microsoft, Apple, Nvidia, Alphabet (which owns Google), Amazon, Meta Platforms, Berkshire Hathaway, Eli Lilly & Co, Broadcom and JPMorgan Chase & Co.

Households that invest in the VTS ETF can get exposure to most of the US share market because it has over 3,700 holdings. That’s a lot of diversification in one investment. While the holdings are listed in the US, the underlying earnings come from across the world.

Having said that, I think there are (at least) three things that some investors need to know about this fund.

Extremely low fees

One of the best reasons to invest in this ASX-listed ETF is the fact that it has exceptionally low management costs.

The lower the fees, the more returns stay in the hands of investors. Therefore, low fees are good for long-term investing and wealth building. Of course, there’s more to being a good investment than just low fees, but it’s a very useful element.

According to Vanguard, the VTS ETF has an annual management fee of just 0.03%. Let’s compare that to a few other options.

The Vanguard MSCI Index International Shares ETF (ASX: VGS) has an annual fee of 0.18%.

The Betashares Nasdaq 100 ETF (ASX: NDQ) has an annual management fee of 0.48%.

The iShares S&P 500 ETF (ASX: IVV) has an annual fee of 0.04%.

The VTS ETF is cheaper than its rivals, though the IVV ETF fee is very similar.

Great financial metrics

Every month, Vanguard tells investors what the financial metrics of its ETFs are.

The financial ‘characteristics’ of the VTS ETF are very positive because of the strength of the businesses within the US share market.

According to Vanguard, as of 31 May 2024, the VTS ETF had a return on equity (ROE) of 24%. That shows that the companies within the ETF are generating enormous profits for how much shareholder money is being retained within the businesses. It may also suggest that these businesses can keep growing profit at a good rate if they continue reinvesting for ongoing growth.

Vanguard also said the earnings growth rate is currently 15.7%, which is a strong rate of compounding of the earnings per share (EPS). Long-term double-digit EPS growth can translate into double-digit shareholder returns over time, even if there is a bit of volatility along the way.

Becoming more concentrated

While the performance of US shares has been stunning, we should keep in mind that the American stock market’s performance is being driven by a few large US tech shares.

I’m talking about names like Nvidia, Microsoft, Apple, Alphabet, Amazon and Meta Platforms. The stocks alone account for more than a quarter of the portfolio – a fund that owns over 3,700 businesses.

It’s understandable that these stocks are becoming a larger share of the US market because their profits and market capitalisations keep rising over time. However, if this trend continues, it reduces the effectiveness of diversification, and the VTS ETF could become very reliant on those stocks delivering returns to do well.

The post 3 things about Vanguard US Total Market Shares Index ETF (VTS) every smart investor knows appeared first on The Motley Fool Australia.

More reading

• 2 of the best reasons to buy ASX ETFs
• Last chance to secure the latest Vanguard US Total Market Shares Index ETF dividend
• Own the Vanguard US Total Market Shares Index ETF (VTS)? Here’s your 12-month ASX outlook
• Why the Vanguard US Total Market Shares Index ETF (VTS) is a top long-term buy

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. 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 positions in and has recommended Alphabet, Amazon, Apple, Berkshire Hathaway, BetaShares Nasdaq 100 ETF, JPMorgan Chase, Meta Platforms, Microsoft, Nvidia, and iShares S&P 500 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Broadcom and has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Alphabet, Amazon, Apple, Berkshire Hathaway, Meta Platforms, Microsoft, Nvidia, Vanguard Msci Index International Shares ETF, and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Commonwealth Bank of Australia (ASX: CBA) shares are a popular option for income investors.

But with many analysts saying that the banking giant’s shares are overvalued at current levels, it may not be the best pick right now.

But which ASX dividend stocks could be good alternatives? Let’s take a look at three:

Challenger Ltd (ASX: CGF)

This annuities company could be an ASX dividend stock to buy right now according to analysts at Goldman Sachs.

The broker likes Challenger due to its “exposure to the growing superannuation market” and its belief that “higher yields should drive a favorable sales environment for retail annuities.”

In respect to income, Goldman is forecasting fully franked dividends of 26 cents per share in FY 2024 and then 27 cents per share in FY 2025. Based on the current Challenger share price of $6.82, this will mean dividend yields of 3.8% and 4%, respectively.

Goldman currently has a buy rating and $7.50 price target on its shares.

Healthco Healthcare and Wellness REIT (ASX: HCW)

Another ASX dividend stock that could be a good option for income investors is the Healthco Healthcare and Wellness REIT.

It is a real estate investment trust with a focus on healthcare and wellness assets. This includes hospitals, aged care, childcare, government, life sciences and research, and primary care and wellness properties.

Morgans is very positive on the company and believes it is well-placed to pay dividends per share of 8 cents in FY 2024 and then 8.3 cents FY 2025. Based on the current Healthco Healthcare and Wellness REIT unit price of $1.08, this will mean yields of 7.4% and 7.7%, respectively.

Morgans has an add rating and $1.50 price target on its shares.

Telstra Group Ltd (ASX: TLS)

Analysts at Goldman Sachs also think that income investors should buy Telstra shares.

It continues to see a lot of value in the telco giant at current levels. Particularly given its low risk growth.

In addition, it is expecting some good yields from its shares. The broker is forecasting fully franked dividends of 18 cents per share in FY 2024 and then 18.5 cents per share in FY 2025. Based on the current Telstra share price of $3.70, this equates to yields of 4.9% and 5%, respectively.

Goldman has a buy rating and $4.25 price target on the ASX dividend stock.

The post Forget CBA and buy these ASX dividend stocks appeared first on The Motley Fool Australia.

More reading

• ASX 200 bank shares ‘don’t appear overly expensive’ compared to global peers: UBS
• Down 16% over 12 months, the Telstra share price could explode 20% from here!
• 3 top ASX retirement shares to buy for FY25
• Buy Woolworths and these ASX dividend stocks
• How come the Telstra share price crashed 16% in FY 2024?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Challenger. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The best five ASX 200 energy shares of FY24 included three uranium stocks, a thermal and metallurgical coal stock and an oil stock.

Let’s check them out.

Top 5 ASX 200 energy shares of FY24

These are the five best-performing ASX 200 energy shares for capital growth in FY24, according to data from S & P Global Market Intelligence.

Deep Yellow Limited (ASX: DYL)

Deep Yellow was the best-performing energy share on the ASX 200 last financial year. The Deep Yellow share price soared by 77.5% in FY24.

Rising global demand for uranium lifted the commodity price again in FY24.

This provided a strong tailwind for Deep Yellow and other ASX uranium shares. That’s why the three top-performing ASX 200 energy shares for FY24 are all uranium stocks.

The United States and 20 other countries intend to triple their nuclear power by 2050. This is creating strong demand for uranium across the globe.

Paladin Energy Ltd (ASX: PDN)

Paladin Energy was the second top-performing ASX 200 uranium stock in terms of share price growth. Its share price rose 71% in FY24.

In the last week of FY24, the company announced plans to acquire 100% of Canadian uranium miner Fission Uranium Corp. (TSX: FCU) for 0.1076 shares for each Fission share.

Boss Energy Ltd (ASX: BOE)

The third best-performing ASX 200 energy share of FY24 was Boss Energy, up 33.2% over the 12 months.

Boss finished FY24 on a high after announcing the commencement of production at its joint venture mine, Alta Mesa, located in Texas, United States, in June. The news came eight weeks after Boss announced the start of production at its 100%-owned Honeymoon project in South Australia.

Whitehaven Coal Ltd (ASX: WHC)

Whitehaven was the top-performing ASX 200 coal stock in FY24 and the fourth-best among ASX 200 energy shares. But its share price gain wasn’t anything spectacular. Whitehaven shares lifted 14% in FY24.

ASX coal stocks are generally off the boil as commodity prices cool down. Newcastle futures reached a peak of about US$440 per tonne in September 2022 (in the first half of FY23). Today, they’re trading closer to US$140 per tonne. Newcastle coal futures fell by about 9% in FY24.

A tailwind for Whitehaven shares in FY24 was the company’s US$3.2 billion acquisition of the Daunia and Blackwater metallurgical coal mines from BHP Group Ltd (ASX: BHP). This gave the company a more even split between its thermal and met coal assets, thereby enhancing its production and sales profile.

Beach Energy Ltd (ASX: BPT)

Beach Energy outperformed much larger rivals like Woodside Energy Group Ltd (ASX: WDS) in terms of share price gains in FY24. It was the top ASX 200 oil stock for the year and also the fifth-best-performing ASX 200 energy share with a modest 10.4% share price gain.

Oil stocks were volatile in FY24, and commodity prices fluctuated. The price of Brent Crude, the international oil commodity benchmark, rose by about 14% over the year.

Conflict in the Middle East may create issues with oil supply in the future, especially if Iran gets involved. OPEC+ production cuts and US stockpiles influenced the Brent Crude oil price last year.

The post Best 5 ASX 200 energy shares for price growth in FY24 appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• What will it take for DroneShield shares to enter the ASX 200?
• The best ASX 200 share of each market sector in FY24
• 3 high-flying ASX 200 stocks leading the charge into FY 2025
• Why Boss Energy, DroneShield, Jumbo, and Raiz shares are falling today

Motley Fool contributor Bronwyn Allen has positions in BHP Group and Woodside Energy Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

I recently invested in Guzman Y Gomez Ltd (ASX: GYG) shares for my portfolio for a few compelling reasons.

Let me say upfront that this buy was a minimal starting investment. Before the initial public offering (IPO), I was thinking about investing at the IPO price of $22. The Guzman Y Gomez share price soared to $30 on the opening day, causing me to decide to wait for a better price.

Perhaps unsurprisingly, and luckily for me, the GYG share price had dropped 17% by 1 July 2024. I decided to make a small investment when it hit the $25 mark. The price may fall further. I’d be interested in buying more if it did slip to a better valuation.

Why I decided to buy Guzman Y Gomez shares

Over the years, I’ve regularly written that one of the most helpful elements in helping an ASX share deliver strong returns is international growth. Australia has a relatively small population, whereas Asia, the United Kingdom, continental Europe, and North America are regions that can unlock much more growth potential.

GYG already has a small presence in three other countries outside of Australia – the United States, Singapore and Japan.

The Mexican fast-food business has 16 restaurants in Singapore and five in Japan, owned and operated by separate master franchisees. The ASX share earns royalty revenue from franchisee sales. It also has four corporate restaurants in the US.

At the latest count, GYG had 185 locations in Australia, with 62 corporate restaurants and 123 franchise restaurants. It plans to open 30 new restaurants in FY25 and increase its annual openings to 40 per year within five years.

Guzman Y Gomez has made significant progress over the last several years. In FY15, it made $101 million in global network sales, which increased to $759 million in FY23. This represents a compound annual growth rate (CAGR) over that time period. It expects another 50% growth of global network sales to $1.14 billion by FY25.

If the business grows its global network sales at a CAGR in the double-digits by 2030, I think it has an exciting future. As the owner of the GYG brand, the ASX share can benefit from global expansion, even if done through franchisees. I hope Guzman Y Gomez can expand into new countries in coming years, such as New Zealand and the UK.

Impressively, the business reported comparable restaurant sales growth in Australia in the double digits in FY22, FY23 and the first half of FY24. This bodes well for the ongoing growth of existing stores and justifies more locations across the country for the coming years.

If comparable store growth can remain comfortably above inflation, I’ll continue to be optimistic about Guzman Y Gomez shares for the long term.

Rising profit margins

Rolling out more locations can help grow its revenue. But the key reason why I think today’s GYG share price could be appealing for the long term is the potential for rising profit margins.

It’s true that the company is not priced cheaply. Even the $22 IPO GYG share price was judged by many market investors to be expensive. And there are many growth expectations built into the value.

However, I expect the company’s margins to significantly lift in the coming years, so profit can rise faster than revenue (which is predicted to rise quickly). Investors usually judge profitable businesses by their net profit capabilities.

GYG expects its underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to global network sales margin to increase from 3.9% in FY23 to 4.5% in FY24 and then rise to 5.3% in FY25.

I think margins can continue to rise as the company adds more stores globally, with improving same-store sales helping increase the value of each location for GYG and franchisees.

The post Why I invested in Guzman Y Gomez (GYG) shares this week for the long-term appeared first on The Motley Fool Australia.

More reading

• GYG share price ends the week at $28. Is $62 in its future?
• Why Clinuvel, Guzman y Gomez, Magellan, and Sandfire shares are charging higher
• Top brokers name 3 ASX shares to buy today
• Why APA Group, Chalice Mining, Guzman Y Gomez, and Monadelphous shares are falling
• Down 18% since listing, should you buy Guzman Y Gomez shares now?

Motley Fool contributor Tristan Harrison has positions in Guzman Y Gomez. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

In today’s volatile market, finding reliable dividend-paying stocks can provide much-needed stability and consistent income for investors. However, identifying such ASX dividend stocks can often feel like searching for hidden gems amidst the market noise and uncertainty.

The following two ASX dividend shares might be worth consideration today if you’re a dividend-focused investor.

APA Group (ASX: APA)

APA Group is Australia’s leading energy infrastructure business, owning and operating natural gas transportation assets. With a vast network of pipelines spanning the country, APA plays a crucial role in delivering energy to homes and businesses.

APA Group shares currently offer a dividend yield of 6% using actual payments over the last 12 months. The good news is that the company guided for FY24 dividends per share (DPS) of 56 cents, implying a 7% dividend yield at the current share price.

Macquarie anticipates APA Group’s attractive dividends will continue in FY25. The broker projects FY25 DPS of 57.5 cents, slightly higher than FY24 DPS, as my colleague James highlighted.

This attractive yield is backed by stable cash flows generated from its long-term contracts with major energy producers and consumers.

Investing in APA Group provides exposure to Australia’s essential energy infrastructure sector. With a reliable dividend yield and strategic growth initiatives, APA can be a compelling choice for income-seeking investors looking for stability and potential capital appreciation.

The APA Group share price has fallen 20% over the past year and closed Friday trading at $7.91.

Rural Funds Group (ASX: RFF)

Rural Funds Group is a leading agricultural real estate investment trust (REIT) in Australia, owning a diversified portfolio of agricultural assets. These include vineyards, cattle farms, water assets, and almond orchards spread across various regions.

Currently, Rural Funds Group offers investors an attractive dividend yield of around 6%. The REIT’s business model focuses on long-term leasing arrangements with agricultural tenants, providing predictable and sustainable cash flows.

Amid global demand for agricultural products, Rural Funds Group stands to benefit from stable rental income and potential capital appreciation of its agricultural properties. The REIT’s diversified portfolio mitigates risks associated with any single agricultural sector.

Following a recent dip in its unit price, Rural Funds Group is now trading below its book value. Its current price-to-book (P/B) ratio stands at 0.72x based on reported figures, which include water entitlements at their book values. When adjusting for the estimated market value of these water entitlements, the company estimates its net asset value (NAV) to be $3.07 per unit as of December 31, 2023. This adjustment lowers its P/B ratio even further to 0.66x.

Investing in Rural Funds Group offers exposure to Australia’s resilient agricultural sector with the added benefit of consistent dividend income. The REIT’s strategic portfolio management and focus on long-term leases ensure reliable returns for investors seeking income and stability.

The Rural Funds Group share price rose 6.6% over the past year and closed Friday at $2.01.

The post 2 bargain Australian shares with dividend yields higher than 6% appeared first on The Motley Fool Australia.

More reading

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• ASX 200 stock slips on $145 million impairment
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• Brokers says these ASX 300 dividend shares are top buys

Motley Fool contributor Kate Lee has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Apa Group and Rural Funds Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The 2023-24 financial year may have been a choppy ride for ASX investors, but overall, it turns out that FY24 was also pretty lucrative!

Despite all the ups and downs, geopolitical headwinds and the ever-present fear of unfettered inflation, the ASX 200 managed to deliver returns of 12.1% (including dividends) in FY24. Not too shabby!

So, if you sat on the shore last financial year, hoping for calmer waters before diving into the stock market, these are the potential gains you missed out on.

While an encore performance in FY25 is not guaranteed, the ASX 200 has delivered average annual returns of around 9% over the past 30 years.

Therefore, the longer you sit on the sidelines, the less time those returns have to compound your wealth.

So, if you’re ready to take the plunge, you’re in luck because we asked our Foolish writers which ASX shares should be on your buy list for FY25.

Here is what they told us:

6 best ASX shares for the new financial year (smallest to largest)

• Johns Lyng Group Ltd (ASX: JLG), $1.59 billion
• MFF Capital Investments Ltd (ASX: MFF), $2.23 billion
• Betashares Nasdaq 100 ETF (ASX: NDQ), $4.98 billion
• Steadfast Group Ltd (ASX: SDF), $6.85 billion
• NextDC Ltd (ASX: NXT), $10.68 billion
• Resmed Inc (ASX: RMD), $41.89 billion

(Market capitalisations as of market close 5 July 2024).

Why our Foolish writers love these ASX stocks

Johns Lyng Group Ltd

What it does: Johns Lyng specialises in building and restoration services in Australia and the United States. It restores properties and contents after insured events. Customers include major insurance companies, commercial enterprises, local and state governments, body corporates and retail customers.

By Tristan Harrison: The Johns Lyng share price has fallen almost 20% since 26 February 2024, making the company better value to buy today.

Johns Lyng is growing at a good pace. The normalised business as usual (BAU) net profit after tax (NPAT) grew by 15.8% to $26.4 million in the first half of FY24, and I think its underlying NPAT can continue to grow strongly as well.

The company is expanding its geographic presence, with New Zealand being one source of recent good news after Johns Lyng signed a contract with Tower Ltd (ASX: TWR) — the first agreement signed with a major national insurer in New Zealand.

In addition, Johns Lyng USA has been appointed to the Allstate emergency response and mitigation panel. Allstate is one of the largest insurance companies in the US.

The ASX share has also hinted that there could be further geographic expansion in the future.

The business can also grow profit if there is more catastrophe response work. The company has previously said that although inherently unpredictable, workflows stemming from catastrophe events continue to exhibit “larger and more enduring characteristics”, with work from prior events taking some time to finalise.

Motley Fool contributor Tristan Harrison owns shares of Johns Lyng Group Ltd.

MFF Capital Investments Ltd

What it does: MFF Capital is a listed investment company (LIC) that, like all LICs, manages an underlying portfolio of investments on behalf of its shareholders.

By Sebastian Bowen: MFF Capital is one of the best-performing and longest-held investments in my ASX share portfolio. As such, I would happily recommend it to anyone as a potential buy for FY2025.

MFF is run by Chris Mackay, one of Magellan‘s co-founders. Mackay is a disciple of Warren Buffett and aims to emulate Buffett’s style in MFF’s portfolio — a trait that very much draws me to this company.

As such, you’ll normally find high-quality American companies with strong moats in said portfolio, which are typically held for years at a time.

At the last count, these stocks included Amazon, Bank of America, L’Oreal, JP Morgan Chase, Mastercard and Home Depot.

This approach has worked well for MFF in the past, and I don’t see why it won’t continue to be effective in the future. With one share, you can get access to some of the best companies in the world, run by a world-class fund manager.

That’s why I’m happy to hold MFF and think it will continue to be a top-quality investment over the 2025 financial year.

Motley Fool contributor Sebastian Bowen owns shares of MFF Capital Investments Limited, Amazon and Mastercard.

Betashares Nasdaq 100 ETF

What it does: NDQ is an exchange-traded fund (ETF). You can buy and sell shares just as you would with any other ASX stock. The ETF is intended to track the performance of the NASDAQ-100 Index (NASDAQ: NDX). NDQ currently holds 102 technology-focused shares.

By Bernd Struben: NDQ provides investors with diversified exposure to some of the world’s leading tech companies with a single investment.

Individual tech stocks may go higher or lower in the financial year ahead. But I’m a firm believer in the ongoing power of the artificial intelligence (AI) revolution to lift most, if not all, of the world’s leading tech stocks in FY 2025.

And you’ll find most of those top global tech stocks listed on the Nasdaq 100.

Indeed, NDQ’s top four holdings are: Microsoft, Apple, Nvidia and Amazon.

Between them, these companies are investing billions of dollars in advancing their own AI ambitions, with Nvidia producing the chips that make it all happen.

The NDQ share price is up 29% over 12 months. The ETF also pays two annual distributions, with shares trading on a 2.7% unfranked trailing yield.

Annual management fees run at 0.48%.

Motley Fool contributor Bernd Struben does not own any of the shares mentioned.

Steadfast Group Ltd

What it does: Steadfast Group is Australia’s largest general insurance broker network, providing businesses and individuals with a broad range of insurance products and services.

By Kate Lee: I firmly believe that ‘time in the market’ is more crucial than ‘timing the market.’ Holding high-quality shares for the long term is, in my view, the key to successful investing. 

With that said, it’s also beneficial to understand where we stand in the investment market cycles. As I highlighted, we’re likely in the later stage of the bull cycle, which makes me cautious about cyclical shares.

In light of this, I believe Steadfast Group is a company that fits both strategies, as it operates in a non-cyclical industry.

Its earnings per share (EPS) have consistently grown from 7 cents in FY15 to 18 cents in the last 12 months to December 2023, with only two exceptions due to the COVID-19 pandemic.

Similarly, the company has increased its dividends-per-share every year for the last decade. 

The Steadfast share price has lifted 12.5% over the past month since we last highlighted this stock, but hasn’t moved significantly from its price of $6.09 a year ago. 

Currently, Steadfast shares are valued at 20x its FY25 earnings estimates by S&P Capital IQ, compared to their trading range of 15x to 25x. I think this PE multiple is still attractive,  considering the last time it reached 15x PE was in April 2020 during the COVID-19 pandemic.

Motley Fool contributor Kate Lee does not own shares of Steadfast Group Ltd.

NextDC Ltd

What it does: NextDC is a technology company enabling business transformation through innovative data centre outsourcing solutions, connectivity services, and infrastructure management software. 

By James Mickleboro: I think NextDC could be a great ASX share to buy for the new financial year.

The data centre solutions company has been growing rapidly for many years and appears well-placed to continue this trend long into the future. This is due to the insatiable demand for data centre capacity thanks to the cloud computing and artificial intelligence megatrends.

The team at Morgans agrees with this view. The broker thinks that “NXT is especially well placed to succeed given its partner ecosystem (enterprise users of cloud are also AI users).” In fact, the broker believes that if “NXT can fund and fill the planned pipeline, then it could be a $40+ stock.”

For now, though, the broker has an add rating and a $19.00 price target on the company’s shares.

Motley Fool contributor James Mickleboro owns shares of NextDC Ltd.

Resmed Inc

What it does: Resmed is the global leader in sleep apnea treatment devices. The company is known for its continuous positive airway pressure (CPAP) machines, delivering improved sleep and respiratory care to people in more than 140 countries.

By Mitchell Lawler: After surging 49% from its September low to around $32, Resmed shares are back on the ropes following new data on GLP-1s, dubbed weight-loss drugs, last month. 

On June 24, Eli Lilly and Co (NYSE: LLY) revealed a substantial reduction in sleep apnea events among people treated with its tirzepatide injection (branded Mounjaro) compared to the placebo during trials. 

The findings unsurprisingly rattled Resmed investors, resulting in an 11% fall in the share price since then. 

Personally, I see the retreat as an opening to buy more Resmed shares at an undemanding price. 

Weight-loss drugs may erode the company’s total addressable market. Still, given that the market is forecast to reach 1.2 billion people by 2050 (versus Resmed’s 23.5 million patients in 2023), there’s ample room for both treatment methods to coexist. 

Motley Fool contributor Mitchell Lawler owns shares of Resmed Inc.

The post Top ASX shares to buy for FY25 appeared first on The Motley Fool Australia.

More reading

• ASX NASDAQ (NDQ) ETF: Up 30% in a year, should you buy now or wait?
• 5 top ASX growth shares that could rise ~10% to 25%
• Buy these market-beating ASX ETFs in FY25
• Here are the top 10 ASX 200 shares today
• 9 ASX All Ords shares lifted to ‘strong buy’ consensus ratings in June

Bank of America is an advertising partner of The Ascent, a Motley Fool company. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, Apple, Bank of America, Home Depot, JPMorgan Chase, Johns Lyng Group, Mastercard, Microsoft, Nvidia, and ResMed. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2025 $370 calls on Mastercard, long January 2026 $395 calls on Microsoft, short January 2025 $380 calls on Mastercard, and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has positions in and has recommended ResMed and Steadfast Group. The Motley Fool Australia has recommended Amazon, Apple, Betashares Nasdaq 100 ETF – Currency Hedged, Johns Lyng Group, Mastercard, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Guzman Y Gomez Ltd (ASX: GYG) share price rallied today, recovering from its sour start to the week. An improved appetite for shares in the Mexican-inspired food joint helped it finish the week in finer form than it began.

At the closing bell, GYG shares fetched $27.75, up 4% from yesterday’s close — squeezing out a weekly gain of 1.2%. Whereas, the S&P/ASX 200 Index (ASX: XJO) stepped up 1.3% during the week.

While the GYG share price might have had a quiet week, could its future be a lot spicer? According to one analyst, store growth is the magic ingredient for one red-hot valuation.

United States key to doubling the GYG share price

Price targets are a dime a dozen. Analysts crunch the numbers and give their best guess on a company’s share price in 12 months, often changing frequently with the release of earnings and other material information.

What is far less common is a price target of more than double the current market rate.

The team at Morgans believes this is within the realm of possibilities for GYG shares. But only if the newly listed company achieves a milestone — and a major milestone at that.

GYG now operates 210 stores in Australia, Singapore, Japan, and the United States, of which only four are located in the US. Analysts at Morgans think the GYG share price could reach $62 apiece if the company reaches 500 restaurants in the US.

It’s a tall order, considering it took the burrito seller 18 gruelling years to grow from one to 210 stores.

GYG aims to have 1,000 stores in Australia by 2050, which ‘appears far from unreasonable’ to Billy Boulton and Alexander Mees of Morgans. The domestic growth forms the basis of the broker’s baseline $30.80 price target.

To arrive at $62, a 123% premium on Friday’s share price, GYG would need 500 US stores alongside the 1,000 Australian outlets.

Why it still mightn’t be enough

The caveat to all of this… it’s a price target for 20 years into the future.

Why does this matter?

Well, a 123% return in one year is phenomenal! … over five years, terrific! … but over 20 years.

If the GYG share price is $62 in 20 years from now, it would equate to an average annualised return of 6.15%, which sounds okay. However, the ASX 200 has averaged around 9% per annum over the past 20 years — no ambitious store rollout required.

The post GYG share price ends the week at $28. Is $62 in its future? appeared first on The Motley Fool Australia.

More reading

• Why Clinuvel, Guzman y Gomez, Magellan, and Sandfire shares are charging higher
• Top brokers name 3 ASX shares to buy today
• Why APA Group, Chalice Mining, Guzman Y Gomez, and Monadelphous shares are falling
• Down 18% since listing, should you buy Guzman Y Gomez shares now?
• Why Guzman Y Gomez, MacMahon, Strike Energy, and WiseTech shares are sinking

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