Category: Stock Market

With December now underway and markets still rattled by pockets of volatility, many investors are wondering where to put fresh capital to work before the end of the year.

The good news is that there are several high-quality ASX shares that look like compelling opportunities right now.

If you are investing $10,000 this month, the three shares below could be worth considering.

Goodman Group (ASX: GMG)

Goodman Group has been one of the quiet stars of the ASX 200, and December offers an attractive entry point for long-term investors. The company is a global leader in logistics, warehousing, and industrial property, with blue-chip customers including Amazon (NASDAQ: AMZN), FedEx (NYSE: FDX), and Tesla (NASDAQ: TSLA).

What could make Goodman so attractive heading into 2026 is its rapidly expanding data centre pipeline. As AI models and cloud services drive an explosion in global computing demand, Goodman is positioning itself as a critical landlord for hyperscalers around the world. These developments have the potential to become a major profit driver over the next decade.

The team at UBS recently put a buy rating and $36.41 price target on its shares.

Macquarie Group Ltd (ASX: MQG)

Another ASX share that could be a top buy is Macquarie. It has been going through a softer period but its diversified model, spanning asset management, banking, commodities, and infrastructure, leaves it well-placed for growth over the long term.

Especially given that when conditions improve, Macquarie usually rebounds harder and faster than peers. Its green energy, infrastructure, and private markets businesses are positioned for a major upswing as rates normalise and capital begins flowing more freely again.

At current levels, the long-term risk–reward looks very attractive for a business with a world-class management team and decades of wealth-creation history.

Ord Minnett has a buy rating and $255.00 price target on its shares.

TechnologyOne Ltd (ASX: TNE)

TechnologyOne has had a rare pullback recently, falling meaningfully from its highs despite continuing its strong form.

The company continues to deliver double-digit recurring revenue growth and exceptional customer retention across government, education, and enterprise clients.

Very few ASX tech names offer this blend of stability, profitability, and long-term growth. With the broader tech sector under pressure, some high-quality names have been unfairly dragged lower and TechnologyOne is one of them. For patient investors, this kind of weakness often proves to be a golden opportunity.

Morgan Stanley has an overweight rating and $36.50 price target on its shares.

The post Where to invest $10,000 in ASX shares in December appeared first on The Motley Fool Australia.

More reading

• Why these ASX 200 shares crashed 10%+ in November
• 2 ASX 200 tech shares to buy following sector sell-off
• These fantastic ASX 200 tech shares look far too cheap
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• Invest $10,000 in this ASX dividend stock for $1,200 in passive income

Motley Fool contributor James Mickleboro has positions in Goodman Group and Technology One. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, Goodman Group, Macquarie Group, Technology One, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended FedEx. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Amazon, Goodman Group, and Technology One. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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• Why Domino’s, Greatland, NextDC, and Unico Silver shares are pushing higher today
• These ASX 200 shares rocketed 10%+ higher in November
• These are the 10 most shorted ASX shares
• 5 things to watch on the ASX 200 on Monday
• ASX 200 tech shares fight back after 10 weeks of decline

Motley Fool contributor Sebastian Bowen 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 Domino’s Pizza Enterprises. The Motley Fool Australia has recommended Domino’s Pizza Enterprises. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Whenever ASX dividend investors see a popular income stock with an 8.7% yield, it’s enough to make most stop and take a second look. Particularly if that 8.7% yield comes with franking credits too.

That’s exactly what is on display right now from WAM Capital Ltd (ASX: WAM).

WAM Capital is a listed investment company (LIC) that has been around for more than 25 years. Like most LICs, it holds a portfolio of underlying shares that it owns and manages on behalf of its investors.

In WAM’s case, this portfolio usually consists of small to mid-cap ASX shares which WAM’s team views as undervalued, or else poised to benefit from some kind of pricing catalyst. When the value rises, or the catalyst is realised, the shares are often sold, and the profits banked, ready to be passed on to investors through franked dividends. 

Over the past 12 months, WAM Capital shares have paid out two dividends, both worth 7.75 cents per share. That annual total of 15.5 cents per share is the level of income that this company has paid out for eight years now. 

These dividends used to come fully franked, but WAM Capital has lost the ability to fund full franking credits in recent years, with 2025’s two payments coming partially franked to 60%. 

Even so, at the current WAM Capital share price of $1.79, the company trades on a trailing yield of 8.67% today.

However, I think there’s reasonable cause to believe that this popular ASX income stock could be a dividend trap.

How might this popular ASX income stock be a dividend trap for investors?

A dividend trap is the dreaded term used to describe an income stock that seemingly promises a high level of payouts, only to rob investors of capital down the road by either dropping significantly in value or cutting its dividends (or both).

The first red flag comes from WAM Capital’s profit reserve. At the end of October, WAM reported that it had just 21.1 cents per share left in its profit reserve. That’s not enough to cover its annual dividend for longer than one year. If the company has a tough 2026, that reserve could fall even further.

Secondly, WAM Capital’s actual share price performance has been horrendous. At $1.79 today, the company is trading almost 30% lower than it was in early 2017. Furthermore, you could have purchased this company’s shares at the same price they are currently going for today as far back as 2006. That’s two decades of zero capital growth, and an awfully long time to tread water.

All the while, the company is taking hefty management fees worth at least 1% per annum from its investors.

Putting all of this together, I believe there are numerous cheaper and lower-risk shares that income investors can opt for instead of WAM Capital at present. Even a simple ASX 200 index fund would have been a better investment than this LIC over the past ten years.

The post Why this popular 8.7% income stock could be a dividend trap appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen 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.

There are a lot of options for Aussie investors to choose from on the local share market.

But which ones could be buys today? Let’s see what analysts are saying about these popular options, courtesy of The Bull. Here’s what you need to know:

CSL Ltd (ASX: CSL)

The team at Red Leaf Securities thinks that this biotech giant has been oversold and have named it as an ASX share to buy this week.

It highlights CSL’s buyback, transformational restructuring, and demand tailwinds as reasons to be positive. Red Leaf said:

This biotechnology company is massively oversold, in our view. CSL offers a rare chance to buy a global plasma therapy powerhouse at a discount. Its $1.5 billion US investment strengthens the core Behring business and secures long term immunoglobulin supply. Its planned transformational restructuring is expected to unlock between $500 million and $550 million over three years, turbocharging cash flow. Share buy-backs, a rising dividend and secular demand tailwinds for chronic therapies point to significant upside if management can successfully execute its strategy.

DroneShield Ltd (ASX: DRO)

Red Leaf Securities isn’t in a hurry to recommend this counter drone technology company’s shares despite its significant share price weakness. This morning, it has named DroneShield as an ASX share to sell.

Its analysts are expecting DroneShield shares to remain under pressure in the near term amid governance and confidence concerns among investors. They explain:

The company provides artificial intelligence based platforms for protection against advanced threats, such as drones and autonomous systems. The stock plunged after disclosures to the ASX revealed DRO directors had been selling their holdings. The company announced that November contracts were inadvertently marked as new ones rather than revised contracts due to an administrative error. In our view, such an error raises governance and confidence concerns among investors. The shares have fallen from $6.60 on October 9 to trade at $1.997 on November 27. We believe the shares will remain under pressure.

Northern Star Resources Ltd (ASX: NST)

Finally, this gold miner has been named as a hold by Red Leaf Securities. While it acknowledges its quality, it believes that Northern Star’s upside is being limited by key risks. Red Leaf explains:

This gold miner has solid fundamentals, strong cash flows and a growing project pipeline, but upside is tempered by key risks. Major growth projects, including KCGM (Kalgoorlie Consolidated Gold Mines) mill expansion and the Hemi development are capital intensive with execution uncertainty. Costs are under pressure, and earnings remain exposed to volatile gold prices, which increases uncertainty. Until a clearer picture emerges in relation to project delivery and commodity stability, a hold position is prudent.

The post Buy, hold, sell: CSL, DroneShield, and Northern Star shares appeared first on The Motley Fool Australia.

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• Why did the DroneShield share price crash 48% in November?
• Why these ASX 200 shares crashed 10%+ in November
• 5 things to watch on the ASX 200 on Monday
• Why today’s cheap ASX shares could double my money during the next bull market
• I’d listen to Warren Buffett’s advice to buy undervalued ASX shares today

Motley Fool contributor James Mickleboro has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL and DroneShield. The Motley Fool Australia has recommended CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Although the last official ASX earnings season is well behind us now, some ASX 200 shares like to report their latest numbers fashionably late. Grocery and hardware supply stock Metcash Ltd (ASX: MTS) is one of those ASX 200 stocks, with investors finding out this morning just how much the next Metcash dividend will be worth.

As we covered earlier today, it was an interesting set of numbers for investors to digest.

Metcash reported a 0.1% rise in revenues to $8.48 billion for the six months to 31 October, compared to the same period in 2024. That was helped by growth in food, liquor, and hardware. However, they were significantly hindered by tobacco sales, which continue to haemorrhage. Without tobacco, revenues were up 4.5%.

Meanwhile, earnings before interest, tax, depreciation and amortisation (EBITDA) lifted 2% to $367.2 million. But total earnings before interest and tax (EBIT) dropped 2.4% to $240.2 million.

On the bottom line, Metcash revealed a reported profit after tax of $142.2 million. That’s up 0.3% from last year’s half.

It seems the market wasn’t impressed with what Metcash had to show for itself today, though. At present, Metcash shares are down a nasty 9.2% to $3.36. That perhaps indicates that the market was expecting to see better numbers. Saying that, the stock has been significantly impacted by the ASX’s issues today. As such, investors may wish to take that with a grain of salt.

But let’s talk Metcash dividends.

Metcash holds its dividend steady

This morning, the company revealed that its latest dividend will be worth 8.5 cents per share. It will come fully franked, as the payouts from Metcash tend to do.

This dividend matches last year’s interim payout exactly. However, it is lower than the 9.5 cents per share final dividend investors enjoyed back in August.

This latest interim dividend will find its way to shareholders’ bank accounts on 28 January next year. To be eligible, though, investors will need to have Metcash shares against their name by the close of trading on 11 December next week. That’s before the company trades ex-dividend on 12 December.

Eligible investors also have the choice to opt in to Metcash’s dividend reinvestment plan (DRP) if they wish to receive additional shares in lieu of the traditional cash payment (at zero discount). The cut-off for the DRP is close-of-business on 16 December.

Since Metcash’s dividend is flat year-on-year, its current (at the time of writing) dividend yield of 5.36% holds steady going forward.

The post Here’s how much the new Metcash dividend is worth appeared first on The Motley Fool Australia.

More reading

• Metcash shares on watch amid $142m first half profit and flat dividend
• 5 things to watch on the ASX 200 on Monday
• Up 21% this year! This fast-recovering ASX dividend share might not be a bargain forever
• Why did the ASX 200 dive to a near six-month low last week?

Motley Fool contributor Sebastian Bowen 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.

With so many shares to choose from on the Australian share market, it can be difficult to decide which ones to buy. The good news is that brokers across the country are doing a lot of the hard work for you.

Three top ASX shares that leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

AGL Energy Limited (ASX: AGL)

According to a note out of Ord Minnett, its analysts have retained their buy rating on this energy company’s shares with an improved price target of $13.00. This follows an investor day event which has given the broker increased confidence in Bayswater Power Station and Liddell Battery assets. It expects Bayswater to become the lowest cost generator in New South Wales and has boosted its earnings forecasts. Overall, with major upside and an attractive dividend yield on offer here, Ord Minnett thinks it could be a good time to invest. The AGL share price is trading at $9.31 on Monday afternoon.

Hub24 Ltd (ASX: HUB)

A note out of Bell Potter reveals that its analysts have retained their buy rating on this investment platform provider’s shares with a trimmed price target of $125.00. This follows the release of an investor day update, which had both positives and negatives. The main positive was that it sees upside risk to funds under administration (FUA) guidance as Hub24 continues to broaden its offering and lift volumes. The negative was that management has increased its expense growth guidance to 18% to 20%. However, this reflects a deliberate move to outpace peers and bring forward investment. Overall, the broker left the event feeling confident in its growth outlook and cadence over peers. The Hub24 share price is fetching $98.70 at the time of writing.

QBE Insurance Group Ltd (ASX: QBE)

Another note out of Bell Potter reveals that its analysts have upgraded this insurance giant’s shares to a buy rating with an improved price target of $21.80. This follows the release of the company’s third quarter update, which was largely in line with expectations. Bell Potter points out that management has reiterated its combined operating ratio guidance of 92.5% in FY 2025 and is expecting this to continue in FY 2026. In light of this and its attractive valuation, the broker feels that QBE’s shares are now in buy territory. The QBE share price is trading at $19.31 on Monday.

The post Leading brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• 3 reasons to buy QBE shares in December
• Why this ASX 200 tech stock could rise 20%
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• Dividend investors: Top Australian energy stocks to buy in 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 positions in and has recommended Hub24. The Motley Fool Australia has recommended Hub24. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Woolworths Group Ltd (ASX: WOW) shares are $29.24, down 0.27% while the S&P/ASX 200 Index (ASX: XJO) is down 0.37%.

It’s been a tough year for Woolworths investors, who have watched the market’s largest consumer staples share fall 4% this year.

Meantime, the share price of chief rival Coles Group Ltd (ASX: COL) has soared 17.8%.

As a forgettable year for Woolworths shareholders draws to a close, here are the key dates to mark in your diary for the new year.

When will Woolworths pay dividends in 2026?

Woolworths will announce its 1H FY26 results and the interim dividend on 25 February.

The record date for the interim dividend will be 5 March.

Woolworths will pay the dividend to investors on 2 April.

The supermarket giant will release its third-quarter FY26 sales update on 30 April.

On 26 August, investors will learn of Woollies’ full-year FY26 results and how much the final dividend will be.

Should you buy Woolworths shares?

Top broker Bell Potter says Woolworths shares are a buy for the new year.

Bell Potter has a 12-month price target of $30.70 on Woolworths shares.

In relation to dividends, the broker is tipping Woolworths to pay a fully franked annual dividend of 91 cents per share in FY26.

In FY27, Bell Potter forecasts an annual dividend of 100 cents per share.

Based on today’s Woolworths share price, these forecasts equate to dividend yields of 3.1% in FY26 and 3.4% in FY27.

Morgans is less optimistic and has a hold rating on Woolworths.

After the company released its 1Q FY26 sales update in October, the broker noted “some early signs of modest improvement”.

The broker commented:

WOW’s 1Q26 sales growth overall was broadly in line with our expectations but weaker than consensus estimates.

Management acknowledged the performance fell short of their aspirations.

The quarter began with challenges, but following increased investment in the customer value proposition, management noted signs of modest improvement in item and transaction volumes in the early part of 2Q26, with sales up ~3.2%.

Looking ahead, Morgans says the Christmas period will be a critical trading period for Woolworths.

While the modest pick-up in operating performance in early 2Q26 and indications from customer surveys that cost-of-living pressures may be easing are encouraging, the group’s performance during the key upcoming festive period will be critical.

The impact on margins from the increased investment will also be important to monitor.

As for dividends, Morgans says Woolworths is trading on a forward FY26 dividend yield of about 3.5%.

The broker views Woolworths as fully valued with a price target of $28.25.

This implies a potential downside of 3.5% ahead.

… we think the stock remains fully valued and prefer to wait for further evidence of improvement before reassessing our view.

The post Own Woolworths shares? Here are the dividend dates for 2026 appeared first on The Motley Fool Australia.

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• What’s driving a 9% divergence in ASX 200 consumer staples vs. discretionary shares?

Motley Fool contributor Bronwyn Allen 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 Woolworths Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Amongst the ASX dividend shares typically chosen by income-seeking investors on the ASX, Transurban Group (ASX: TCL) shares are a perennially popular choice.

Alongside the major ASX banks like Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP), and Telstra Group Ltd (ASX: TLS), Transurban is often bought for its income potential for those investors seeking to build up a stream of passive income to one day retire on.

However, Transurban is a rather unique ASX share in the top echelons of the ASX. So today, let’s discuss this company and what kind of role it can play in a dividend portfolio in 2026 and beyond.

If you weren’t aware, Transurban is a toll-road operator. It has extensive operations across Australia, owning many (if not most) of the major tolled arterial roads in Sydney, Melbourne, and Brisbane. It also owns roads in North America. In Sydney alone, Transurban operates no fewer than 11 motorways, meaning motorists in Australia’s largest city are very familiar with doing business with this company.

It’s largely due to this business model that ASX dividend investors are so attracted to Transurban shares.

Transurban shares: An ASX dividend favourite

Road traffic is highly predictable and relatively insensitive to what happens in the broader economy. As such, it is a lucrative and reliable source of revenue for Transurban.

The company has decades-long contracts covering most of its roads, many of which allow Transurban to increase its tolls every quarter by at least the rate of inflation (usually by more).

This translates into a dependable dividend for income investors. Prior to the 2020 pandemic, Transurban was famous for increasing its annual dividend almost every year. The disruption of the pandemic did (understandably) dent this company’s payouts.

But since 2021, the company’s dividends have been increasing annually. 2025 saw the company pay out a 32-cent per share dividend in February. That was followed by a 33-cent-per-share payout in August. Both payments represented increases over their 2024 equivalents.

At today’s (at the time of writing) share price of $14.94, these dividends give Transurban shares a trailing dividend yield of 4.35%.

There is one major caveat to note with this company, though. Due to its unique business model, Transurban does not normally attach significant franking credits to its dividends.

To illustrate, February’s dividend came completely unfranked, while August’s payout was partially franked but at just 0.05%.

Foolish Takeaway

Considering the hefty upfront yield and steady track record, I regard Transurban shares as a useful source of income and worthy of a place in a diversified, dividend-focused portfolio. However, this is not a growth stock. As such, someone looking to beat the market over the long term might want to look elsewhere.

The post Are Transurban shares a buy for dividend income right now? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen 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 Transurban Group. The Motley Fool Australia has positions in and has recommended Telstra Group and Transurban Group. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The first few trading days of November started off well enough for Commonwealth Bank of Australia (ASX: CBA) shares.

Shares in the S&P/ASX 200 Index (ASX: XJO) bank stock closed out October trading for $171.64. On 6 November, shares closed the day changing hands for $178.57, putting the stock up 4% early in the month.

But things took a turn for the worse from there.

When the closing bell sounded on 28 November, shares were trading for $152.51.

That saw CBA shares down a sharp 11.2% over the month, significantly underperforming the 3% one-month loss posted by the ASX 200.

Here’s what’s been happening.

CBA shares slump on missed expectations

The biggest down day of the month for stockholders came on 11 November. That followed the release of CBA’s September quarter results (Q1 FY 2026), with CBA shares closing the day down 6.6%.

Now Australia’s biggest bank still reported some solid results.

Highlights included a 2% year-on-year increase in CBA’s unaudited cash net profit after tax (NPAT), which came in at $2.6 billion.

The bank also reported a $17.8 billion increase in household deposits over the three-month period, with home loans increasing by $9.3 billion.

Unfortunately, costs were also up materially.

The ASX 200 bank reported a 4% increase in its operating expenses, excluding restructuring/notable items. Management said rising costs were primarily driven by wage and IT vendor inflation.

On the passive income front, CBA paid out $4.4 billion in fully franked dividends in the September quarter.

But with CBA shares trading at a price to earnings (P/E) ratio of around 25 times, the highest of all the big Aussie banks, market expectations for the bank are high. And the September quarterly results look to have fallen short of those expectations.

“We remain focused on supporting our customers, disciplined execution of our strategy, investing in technology to deliver exceptional customer experiences and delivering strong financial outcomes for our shareholders,” CommBank CEO Matt Comyn said on the day.

What about the other big four ASX 200 bank stocks?

So, how did the other three big ASX 200 bank stocks compare with the 11.2% losses posted by CBA shares in November?

Well, National Australia Bank Ltd (ASX: NAB) shares fell 8.1% over the month. NAB shares trade on a P/E ratio of around 18 times.

ANZ Group Holdings Ltd (ASX: ANZ) shares slipped 5.5% in November. ANZ shares trade on a P/E ratio of around 15 times.

Westpac Banking Corp (ASX: WBC) shares were the best performers among the big four ASX 200 bank stocks. Shares closed down 3% in November, mirroring the losses posted by the benchmark index. Westpac shares trade on a P/E ratio of around 18 times.

The post Why did CBA shares get smashed in November? appeared first on The Motley Fool Australia.

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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.

We all know that Amazon.com Inc (NASDAQ: AMZN) is one of the largest and most successful companies in the world. Its founder and former CEO, Jeff Bezos, is a household name, and the company’s services are wildly popular in Australia, as well as around the world. As such, it’s also arguably common knowledge that Amazon stock has been a long-term winner for any investor who has held it for any significant length of time.

Most people know Amazon for its sophisticated online store featuring fast delivery, as well as its Prime membership program, and, more recently, its streaming service.

But those businesses, while important, only make up part of this behemoth’s revenue streams. Perhaps its most successful segment operates behind the scenes. It is none other than Amazon Web Services (AWS), a service that facilitates back-end internet operations. It is used by clients ranging from Netflix and Coca-Cola to Apple and LinkedIn.

But how has this success translated into the company’s share price? Well, let’s take a look at Amazon stock over the past five years to find out.

So, five years ago, back in early December 2020, Amazon stock was going for just over US$3,115 a share. That’s about US$158 on a post-stock split basis – remember, Amazon underwent a 20-for-1 stock split back in mid-2022.

As it stands today, its shares last traded at US$233.22 each, the price recorded on Saturday morning (our time) at the end of the short trading day over in the US.

This means that investors have enjoyed a gain of about 47.5% from the Amazon stock price itself since December 2020. That works out to be a yearly rate of return of approximately 8.1% per annum over the five years.

Why has Amazon stock been a market laggard?

Now, Amazon doesn’t pay any dividends at the current time. In fact, the company has never paid out a dividend. As such, those capital gains are the only returns investors would have bagged from their Amazon stock. However, for Australian investors, currency movements would have added about 2.5% per annum to their total returns.

If an investor bought US$5,000 worth of Amazon stock five years ago this week, this means they would have been able to pick up 31.6 shares at the time. Today, those 31.6 shares would have a value of US$7,374.30.

Many investors might be startled to see such a low rate of return from Amazon. A member of the ‘Magnificent 7’, no less. You would have been far better off investing in a generic S&P 500 Index (SP: .INX) fund.

It’s not as though this company isn’t growing through. As we reported last month, the company’s latest quarterly report showed Amazon’s sales increasing 13% year on year, while its AWS revenue surged 20%.

As such, we can conclude that Amazon stock’s sluggish performance since late 2020 is almost entirely due to price-to-earnings (P/E) ratio compression. This company’s five-year earnings multiple average stands at just over 58. Yet the company trades at a far lower 32.95 today.

Thus, investors might conclude that the company is looking relatively cheap right now, despite being just under 10% away from its all-time high of US$258.60 a share.

The post $5,000 invested in Amazon stock 5 years ago is now worth… appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in Amazon, Apple, Coca-Cola, Microsoft, and Netflix. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, Apple, Microsoft, and Netflix. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 recommended Amazon, Apple, Microsoft, and Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.