Category: Stock Market

Ever since Medibank Private Ltd (ASX: MPL) shares were first wrested from government hands and privatised back in 2014, investors have been anticipating hefty dividend income from this health insurance giant.

Those investors haven’t been disappointed. Medibank has paid out remarkably consistent dividend payments since its ASX debut. That’s despite the Medibank share price itself delivering fairly lacklustre growth in recent years.

Sure, today the company is around 70% above the ~$2.20 share price it hit the ASX boards at back in late 2014. But Medibank shares have only appreciated by around 9.3% over the past five years.

Have a look at the Medibank share price’s recent (and not so recent, if you wish) performance for yourself below:

But let’s get down to Medibank’s dividends. 

What’s the current dividend yield on Medibank shares?

The ASX 200 health insurance provider has paid out two dividends every year since 2015. Over the past 12 months, Medibank has doled out a final dividend worth 8.3 cents per share (back in October 2023) and an interim dividend (March) of 7.2 cents per share. Both dividend payments came with full franking credits attached, as is the norm for Medibank stock.

That’s an annual total of 15.5 cents per share. Plugging that into the current Medibank stock price of $3.71 (at the time of writing), we get a trailing dividend yield of 4.18%. If we include the value of Medibank’s full franking credits, this yield grosses up to 5.97%.

As we touched on before, Medibank’s dividends have been on a generally upward trajectory ever since the company’s ASX listing. Back in 2016, Medibank funded an annual total of 11 cents per share in dividend payments. But over 2023, the company forked out a total of 14.3 cents per share in payouts.

Medibank has also increased its annual dividend every year since 2020. That year saw shareholders receive 12 cents per share in dividends. But 2021 had Medibank fork out 12.7 cents per share, rising to 13.4 cents in 2022 and to 14.3 cents by 2023.

What about the future?

The interim dividend of 7.2 cents per share from March this year was a hefty rise over 2023’s equivalent payout of 6.3 cents. So it looks as though this streak of delivering consistently rising dividends is set to continue this year.

That’s a belief held by one ASX expert, anyway. As my Fool colleague James covered earlier this month, ASX broker Goldman Sachs is predicting Medibank will pay out a total of 16 cents per share in dividend income over FY2024, rising to 17 cents per share in FY2025.

If Goldman is on the money here, investors can expect a forward yield from Medibank stock of 4.19% and 4.6%, respectively.

Let’s see if Goldman is on the money and Medibank shareholders continue to enjoy a rising dividend yield.

The post Medibank shares: Here’s the dividend yield you’ll get today appeared first on The Motley Fool Australia.

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• Medibank shares dip as huge potential fines loom from 2022 data breach
• What is Goldman Sachs saying about Medibank shares in June?
• Overinvested in CBA shares? Here are two alternative ASX dividend stocks
• Here’s how I’d target a $2,000 second income by investing $35 a 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 positions in and has recommended Goldman Sachs Group. 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.

Over the past three years, the Lynas Rare Earths Ltd (ASX: LYC) share price has been disappointing. Lynas shares have dropped more than 40% from their all-time high in January 2022 to just over $6 today.

Despite this underperformance, the Lynas share price is still 130% higher over the last five years, handily outpacing the S&P/ASX 200 Index (ASX: XJO), which gained approximately 18% over the same period.

Weak consumer demand for electric vehicles (EVs) and falling global rare earth prices are largely behind such dramatic share price fall.

However, after a 40% drop in its stock value, is this battery metal miner ready to rebound when the global commodity market recovers?

Why did the Lynas share price drop so much?

China dominates the rare earths market with a 70% share in mining and a 90% processing capacity. Lynas is one of only two non-Chinese companies selling rare earths, the critical element in producing EVs and military devices. The other producer is MP Materials Corp (NYSE: MP) located in the United States.

Behind the sluggish share price movement is underwhelming consumer demand for EVs, which heavily use rare earth materials for batteries and other critical components.

The weak demand has pushed down the global rare earths prices, impacting revenue and profitability for producers like Lynas.

According to Lynas’ quarterly updates, China’s domestic prices for neodymium and praseodymium (NdPr) oxide, one of the important types of rare earth elements, have halved to US$43 per kilogram in a year. This is less than a third of the metal’s peak price of $144 per kilogram in March 2022.

What experts say about global rare earths price outlook

Former BHP copper boss Darryle Cuzzubbo is optimistic about the long-term outlook for the rare earths market. In a May 2024 interview with the Australian Financial Review, he referenced projections from Arafura Rare Earths Ltd (ASX: ARU), predicting a supply shortfall by 2032 with global production expected to reach only 65,000 tonnes, far below the anticipated demand of around 126,000 tonnes.

That said, price predictions for any commodities are difficult as the supply and demand dynamics keep on changing. Just yesterday, Europe’s largest deposit of rare earth elements was discovered at Fen, Norway. This news, as my colleague James summarised, pushed down the share prices of rare earths producers.

The good news is that Lynas is one of the few producers generating positive operating cash flows at the current low prices. Many other producers remain in the red. This means there could be industry consolidation ahead of us, and if it happens, Lynas has a better chance of becoming the survivor.

What do brokers say, and who else is positive about Lynas?

Mining magnate Gina Rinehart seems to think it’s a good time to invest in this critical metal producer. In April 2024, she became a major shareholder in Lynas, holding 5.8% through her company, Hancock Prospecting.

The same company bought 5.3% of the other non-China rare earth producer MP Materials in the US earlier this year. This series of share purchases sparked speculation that she may play a pivotal role in a potential merger between Lynas and MP Materials, as the Australian Financial Review reported.

Brokers see an upside from the current Lynas share price. UBS is cautiously optimistic saying rare earths prices have likely bottomed while not ruling out the possibility of further downside.

Goldman Sachs is another broker remaining optimistic. In a report in April 2024, summarised by my colleague Bronwyn, Goldman highlighted better-than-expected production volume from Lynas Advanced Materials Plant (LAMP) in Malaysia and the Lynas shares’ cheap valuation metrics.

Foolish takeaway

In the mining sector, navigating the ups and downs of global commodity cycles is inevitable. Lynas stands out as a key rare earths producer outside of China, offering a unique market position amid intensifying geopolitical tensions.

In my view, the recent dip in Lynas’s share price could present a compelling buying opportunity for long-term investors.

The post Down 40% in under 3 years, is the Lynas share price due a bounce? appeared first on The Motley Fool Australia.

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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 S&P/ASX 200 Index (ASX: XJO) is up 0.3% so far in June, with three ASX 200 shares doing a lot of the heavy lifting.

Which three stocks have really been going gangbusters this month?

I’m glad you asked!

ASX 200 shares flying higher in June

The first high-flying ASX 200 share in June is electronics retailer JB Hi-Fi Ltd (ASX: JBH).

JB Hi-Fi shares closed out May, trading for $58.23. In afternoon trade today, shares are changing hands for $63.39. That puts the JB Hi-Fi share price up 8.6% so far in June. Shares are now up 50% since this time last year.

JB Hi-Fi shares also trade on a fully franked dividend yield of 4.3%.

The last price-sensitive announcement from the company was a reasonably strong quarterly sales update on 9 May.

Investors appear to have been bidding up the ASX 200 share in June ahead of the pending stage 3 tax cuts and a raft of cost-of-living relief measures contained in the Federal budget. With most Aussies looking at pocketing significantly more money in the year ahead, JB Hi-Fi could enjoy a material uptick in sales.

Pro Medicus Ltd (ASX: PME) is the second ASX 200 share to charge higher in these first two weeks of June.

Shares in the health imaging company closed out May trading for $120.12. At the time of writing, shares are changing hands for $132.54 apiece, up 9.3% in June. That sees the Pro Medicus share price up an eye-watering 104.5% since this time last year. Pro Medicus shares trade on a fully franked 0.3% dividend yield.

The most recent share price momentum was driven by the company’s 28 May announcement that its wholly owned US subsidiary, Visage Imaging, had signed five new customer contracts. Pro Medicus said the new contracts have a total value of at least $45 million.

In a nod to its growing AI ambitions, the new contracts will be fully cloud-deployed and are expected to be completed within the next six months.

“Despite record new contract signings this year, our pipeline remains strong with a broad range of opportunities both in terms of size and market segments likely helping,” Pro Medicus CEO Sam Hupert said on the day.

Also soaring in June

Rounding off the list of ASX 200 shares going gangbusters in the first half of June is Bapcor Ltd (ASX: BAP).

Shares in the auto parts company closed out May trading for $4.25. In afternoon trade today shares are changing hands for $5.00 apiece, up 17.7%. The Bapcor share price remains down 14.8% since this time last year. Bapcor shares also trade on a 4.2% fully franked trailing dividend yield.

The big June boost for the Bapcor share price came on Tuesday this week.

Investors sent the ASX 200 share up 14.0% on the day after management confirmed media speculations that the company had received a non-binding takeover proposal from United States-based private investment firm Bain Capital.

The $5.40 per share cash offer values Bapcor at more than $1.8 billion.

There is not yet any guarantee that the takeover offer will proceed.

The post 3 ASX 200 shares going gangbusters in June 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 positions in and has recommended Pro Medicus. The Motley Fool Australia has recommended Bapcor, Jb Hi-Fi, and Pro Medicus. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Reserve Bank will make its next decision on interest rates next Tuesday.

All of the Big Four banks are expecting rates to remain on hold. For several months, they’ve all been tipping the first cut to occur in November, with four more cuts to follow over the course of 2025.

This week, ANZ Group Holdings Ltd (ASX: ANZ) became the first of the four to alter its view.

ANZ now expects the first cut to occur in February, with only two more to follow by the end of the year.

What are the experts saying on interest rates?

Gareth Aird, Head of Australian Economics at Commonwealth Bank of Australia (ASX: CBA), is sticking with his November forecast for the first interest rate cut.

However, he says the chances of it being delayed are increasing due to signs of stickier inflation.

Aird commented:

Our expectation for a more material loosening in the labour market relative to the RBA’s forecasts is a key reason why our base case sees the RBA commence an easing cycle in late 2024.

But given the challenging underlying inflation backdrop and a shortening runway between now and November, the risk to our call is increasingly moving towards a later start date for an easing cycle.

Luci Ellis, Chief Economist at Westpac Banking Corp (ASX: WBC), is also tipping November or thereabouts for the first rate cut.

Ellis said:

The likely trajectory of disinflation from here precludes a rate cut much before November.

The trimmed mean measure of inflation was still a full percentage point above the top of the target range over the year to the March quarter. The Bank will be watching this measure more closely as temporary factors buffet the headline measure in coming quarters.

However, even with a further moderation in trimmed mean inflation, it will take time for enough evidence to accumulate to convince the Board that the disinflation is firmly on track to reach 2-3% on a sustained basis.

The main thing that would cause the RBA to push back the timing of its first rate cut is inflation remaining sticky above the target range.

AMP Ltd (ASX: AMP) Chief Economist Share Oliver said 25% of the world’s central banks had begun cutting rates.

The central banks in Canada and Europe cut rates by 25 basis points earlier this month.

However, Australia began its interest rate hiking cycle later than other major economies. Therefore, we are not as far along in taming inflation as other economies, so we are likely to cut rates later.

Dr Oliver said:

The RBA will still want to see lower inflation readings, how the economy responds to the tax cuts next month and more confidence that inflation will decline sustainably into the 2-3% target …

But we continue to see the first rate cut coming by year end as continuing weaker than expected economic conditions provide the confidence it needs regarding the inflation outlook.

Interestingly, after the GDP data the money market removed the probability of another rate hike and is now allowing for around a 46% chance of a cut by year end.

The post Is there any chance of an interest rate cut in Australia next week? appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen has positions in Anz Group and Commonwealth Bank Of Australia. 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.

It has been another busy week for many of Australia’s top brokers. This has led to the release of a number of broker notes.

Three broker buy ratings that you might want to know more about are summarised below. Here’s why brokers think these ASX shares are in the buy zone right now:

Bega Cheese Ltd (ASX: BGA)

According to a note out of Bell Potter, its analysts have retained their buy rating on this diversified food company’s shares with an improved price target of $5.35. The broker has been looking at recent movement in indicators for the branded and bulk business as well as farmgate milk prices. While this has resulted in an earnings downgrade for FY 2024, it has lifted its earnings estimates for the next two years. In light of this, the broker estimates that Bega Cheese is trading at around 10x FY 2025 EBITDA. It notes that this is a reasonable discount to its 10-year average of 12.3x forward EBITDA. And with the broker feeling confident about Bega Cheese’s five-year outlook, it thinks this has created a buying opportunity for investors. The Bega Cheese share price is trading at $4.41 on Friday afternoon.

BHP Group Ltd (ASX: BHP)

A note out of Citi reveals that its analysts have retained their buy rating and $48.50 price target on this mining giant’s shares. Citi notes that its global commodities team has lifted its copper forecast by 20% to US$12,000 per pound to reflect increased demand due to the decarbonisation megatrend. In light of this, the broker has lifted its earnings estimates for the coming years. In addition, Citi is now forecasting an attractive 6%+ dividend yield from the Big Australian’s shares in FY 2025, boosting the total potential return further. The BHP share price is fetching $43.14 at the time of writing.

Life360 Inc (ASX: 360)

Analysts at Morgan Stanley have retained their overweight rating and $17.50 price target on this location technology company’s shares. According to the note, the broker has been looking into the potential of Life360’s recently announced advertising business. It highlights that Lyft Inc (NASDAQ: LYFT) has also announced similar ambitions. And given how ride sharing and location technology have similarities, it believes Lyft’s targets can be a guide to see what is possible for Life360. The good news is that the broker believes that Life360 can generate significant revenue from its advertising business even if it penetrates a much smaller portion of its massive user base compared to Lyft. The Life360 share price is trading at $15.02 today.

The post Brokers name 3 ASX shares to buy now appeared first on The Motley Fool Australia.

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Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor James Mickleboro has positions in Life360. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360. 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 VanEck Morningstar Wide Moat ETF (ASX: MOAT) has achieved some eye-watering returns for its investors over the past few years.

To illustrate, this exchange-traded fund (ETF)‘s latest update informs us that, as of 31 May, investors have banked an average return of 16.16% per annum over the past five years. MOAT unitholders have also received an average of 15.34% per annum since this ETF’s ASX inception back in 2015.

That beats the pants off what most ASX ETFs have returned over that time frame. For example, the Vanguard Australian Shares Index ETF (ASX: VAS), which is currently the most popular ETF on the ASX, has returned an average of 7.81% per annum over the five years to 31 May 2024.

So how has this high-flying ASX ETF pulled off such a consistently high return over so long? What is the secret sauce that enables these returns?

What’s the VanEck Wide Moat ETF’s secret ASX sauce?

To answer this question, let’s dive into how this ETF works. Unlike most popular ETFs, MOAT is not an index fund. Rather, it is an actively managed ETF that contains a curated and concentrated portfolio of around 70 stocks.

These stocks are selected from the US markets based on an assessment of their possession of what’s known as a ‘wide economic moat‘.

A ‘moat’ is a term coined by Warren Buffett that refers to an intrinsic competitive advantage that a company can possess over its competitors.

It might be a strong brand or providing a product that consumers find difficult not to use or switch away from. It could also be a company’s cost advantage over competitors.

Learning from Warren Buffett

Buffett has made no secret about his love of a company with a strong moat. In fact, he usually only buys companies that have at least some form of moat. It clearly works for Buffett, given Berkshire Hathaway‘s incredible growth over the past 60 or so years.

This is the secret sauce that the VanEck Wide Moat ETF attempts to harvest within its portfolio.

As such, it’s no surprise to see names like Alphabet, Adobe, Disney, Altria, Pfizer, Nike, Microsoft, Amazon and Starbucks in MOAT’s current portfolio. All of these companies have a clear moat that they can use to keep competition at bay and profits growing.

Just think of Disney’s intellectual property portfolio. Or Amazon’s ability to provide products at rock-bottom prices and have them at your door within a day or two. Or the reach of Microsoft’s Office and Windows software and the power of the Starbucks and Nike brands.

Buffett told us that the best companies in the world usually have some kind of MOAT. The VanEck Wide MOAT ETF has taken this concept and run with it, which explains why this ETF is able to bang out such compelling returns.

The post 16% per annum: What is the VanEck Wide Moat ETF’s secret sauce? appeared first on The Motley Fool Australia.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen has positions in Adobe, Alphabet, Altria Group, Amazon, Berkshire Hathaway, Microsoft, Nike, Starbucks, VanEck Morningstar Wide Moat ETF, Vanguard Australian Shares Index ETF, and Walt Disney. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Adobe, Alphabet, Amazon, Berkshire Hathaway, Microsoft, Nike, Pfizer, Starbucks, and Walt Disney. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2025 $47.50 calls on Nike, long January 2026 $395 calls on Microsoft, and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Adobe, Alphabet, Amazon, Berkshire Hathaway, Microsoft, Nike, Starbucks, VanEck Morningstar Wide Moat ETF, and Walt Disney. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Few ASX shares on the All Ordinaries (ASX: XAO) Index have delivered the kind of returns that DroneShield Ltd (ASX DRO) stock has over the past few months.

Today, the Droneshield share price is trading at $1.44, down 1.03% for the day thus far. But even so, this share price still leaves Droneshield stock with a jaw-dropping year-to-date gain of 277.6% over 2024 so far. Over the past 12 months, this defence share has risen by an even more impressive 524%.

So needless to say, Droneshield investors would be a pretty happy bunch right about now. Check out Droneshield’s incredible stock price trajectory for yourself below:

This monstrous rise in value hasn’t come unprovoked. Droneshield is a stock that has been growing at breakneck speed. Back in April, the company released a quarterly cash flow report, which revealed Droneshield’s revenues for the quarter ending 31 March came in at $16.4 million. That was up a stupendous 925% from the $1.6 million the company reported for the same quarter last year.

So given Droneshield’s stunning recent success, many investors might be wondering whether this company pays out a dividend, perhaps even a fully franked one. So today, let’s dive into what kind of dividends Droneshield stock pays, or at least, has paid, out.

Will you get dividend income from Droneshield stock?

Well, this won’t take long.

Droneshield stock has never paid out a dividend. And it doesn’t look like it will, at least on a short-term horizon.

Most companies only start paying dividends when they are comfortably profitable, and with a business model that has reached some sort of maturity. Remember, every dollar that a company forks out in dividend payments is a dollar it can’t reinvest into its business.

It was only in the 2023 financial year that Droneshield achieved profitability for the first time. The company reported a net profit of $9.3 million for FY2023, up from a net loss of $900,000 for FY2022.

Right now, the company is clearly prioritising growth, with a $15 million capital raising program recently completed.

If Droneshield continues to grow at this stunning rate, I still wouldn’t expect a dividend until it has scaled up to its full potential and is sitting on a comfortable stream of free cash flow with net profits consistently high.

Even so, Droneshield stock owners arguably shouldn’t complain too loudly about this lack of dividend income, considering their lucrative capital gains over just the past six months alone.

The post Does DroneShield stock pay dividends? 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 DroneShield. 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 S&P/ASX 200 Index (ASX: XJO) is having a subdued finish to the week. In afternoon trade, the benchmark index is down 0.3% to 7,728.6 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

Core Lithium Ltd (ASX: CXO)

The Core Lithium share price is down 4% to 9 cents. This is despite there being no news out of the lithium miner today. However, it is worth noting that most lithium shares are falling again on Friday following yet another red session for their peers on Wall Street. This latest decline means that Core Lithium’s shares are now down over 90% since this time last year. They have also hit a new multi-year low on Friday.

Deterra Royalties Ltd (ASX: DRR)

The Deterra Royalties share price is down 7% to $4.14. While this mining royalties company has announced a major acquisition, this has been overshadowed by a second announcement. The latter announcement reveals that Deterra Royalties is making a major change to its dividend policy. At present, it pays out 100% of net profit after tax. However, from FY 2025, the company will change its target payout ratio to a minimum of 50% of its profits.

Northern Star Resources Ltd (ASX: NST)

The Northern Star Resources share price is down 3% to $13.30. This follows a reasonably sharp pullback in the gold price overnight which is weighing on the industry today. This has seen the S&P/ASX All Ordinaries Gold index fall by 2% this afternoon. Traders appear to have been selling gold to take profit after a decent run.

Opthea Ltd (ASX: OPT)

The Opthea share price is down 23% to 37.5 cents. This follows news that the retinal disease focused clinical-stage biopharmaceutical company has successfully completed the institutional component of its capital raising. Optea’s institutional entitlement offer raised approximately $161.5 million at a discount of 40 cents per new share. Eligible institutional shareholders took up approximately 61.4% of their entitlements, with the shortfall placed to both new and existing institutional shareholders and to the underwriter. The proceeds from the capital raising will be used to fund the company through the anticipated Phase 3 topline data readouts. CEO Frederic Guerard said: “We appreciate the strong support from our shareholders, and from new investors, who share our belief that sozinibercept has the potential to transform patient outcomes with superior vision gains, which continues to be a significant unmet need in wet AMD.”

The post Why Core Lithium, Deterra Royalties, Northern Star, and Opthea shares are dropping appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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 the S&P/ASX 200 Index (ASX: XJO) slips around 0.3% into the red on Friday, one ASX 200 stock has copped a hammering.

Deterra Royalties Ltd (ASX: DRR) shares took a significant hit at the open and were down 10% in early trade. However, the mining royalty company’s shares have since regained some ground and are trading at $4.18, with a trailing dividend yield of 7.14%.

This morning’s sharp decline followed the company’s announcement of a substantial acquisition and a major change to its dividend policy.

Why is this ASX 200 stock under pressure?

The slide in Deterra Royalties’ stock price came after it announced its new move into the lithium domain. It has made an all-cash offer to acquire UK-based Trident Royalties Plc for $276 million (144 million pounds).

According to the announcement, Trident is a “growth-focused diversified mining royalty and streaming company”, boasting a portfolio of “royalties and offtakes”.

Its portfolio includes 21 royalties and offtake contracts, giving the ASX 200 stock exposure to lithium, gold, silver, copper, zinc, and more. As such, the acquisition marks a pivot towards green metals and away from its traditional iron ore royalties, including those with BHP Group Ltd (ASX: BHP).

Deterra’s offer for Trident is set at 49 pence per share, equal to AUD 93.4 cents per share at the current exchange rate. This represents a premium of 22.5% over Trident’s latest closing price of 40 pence (AUD 76.3 cents).

Trident’s board has unanimously recommended shareholders vote in favour of the acquisition. Key shareholders â€“ representing about 28.7% of Trident’s share capital – have also voted in favour.

If successful, the acquisition will be completed via a UK scheme of arrangement

The market has reacted negatively to ASX 200 stock’s announcements, as seen in the price action today. East 72 fund manager Andrew Brown wasn’t keen on the deal either, suggesting it diluted the value of Deterra’s existing BHP royalties.

He expressed scepticism about the move into lithium, implying it might turn a “brilliant asset into a terrible company”, according to the Australian Financial Review.

“Have somebody cash the cheque and buy back stock. If the royalty is worth buying, Franco Nevada will buy it first”, he added. “I don’t hold Deterra, but wish I could and hope an activist [investor] comes along”.

Dividend policy changes and market reaction

In addition to the acquisition news, Deterra announced changes to its dividend policy. Previously, the company had a 100% net profit after tax (NPAT) payout ratio.

The FY 2024 final dividend will remain the same. However, moving forward, Deterra aims for a minimum payout ratio of 50% of NPAT. This change aims to balance capital growth with income returns.

It will also implement a dividend reinvestment plan (DRP). The DRP will allow its investors to automatically invest dividends received without incurring brokerage fees.

Deterra managing director Julian Andrews had this to say:

While consistent with our well established and overarching capital management strategy, today’s adjustment to our dividend policy is designed to better align it with Deterra’s targeted longer-term balance between capital growth and income returns.

Importantly, our discipline to return capital when not required for investment or balance sheet management remains unchanged.

Deterra has returned more than $480 million to shareholders as dividends since its listing towards the end of 2020.

The post ASX 200 stock nosedives 10% on new lithium play appeared first on The Motley Fool Australia.

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• Buy these ASX dividend shares with 5% and 7% yields

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

In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to end the week in the red. At the time of writing, the benchmark index is down 0.3% to 7,726.9 points.

Four ASX shares that are not letting that hold them back today are listed below. Here’s why they are rising:

Boss Energy Ltd (ASX: BOE)

The Boss Energy share price is up 3% to $4.21. This morning, this uranium miner announced that production has started at its US-based Alta Mesa In-Situ Recovery (ISR) Central Processing Uranium Plant and Wellfields. Boss Energy’s managing director, Duncan Craib, said: “The start of production at the Alta Mesa Project is another key milestone in the implementation of our strategy to be a global uranium supplier with a diversified production base in tier-one locations.”

Judo Capital Holdings Ltd (ASX: JDO)

The Judo Capital share price is up 4% to $1.36. Investors have been buying this small business lender’s shares this week after S&P Dow Jones Indices announced that it will be added to the ASX 200 index next week. Judo Capital will replace building materials company CSR Ltd (ASX: CSR) when it is removed from the index. Though, this remains subject to shareholder and final court approval of the scheme of arrangement which will see CSR acquired by Compagnie de Saint-Gobain.

Life360 Inc (ASX: 360)

The Life360 share price is up 5% to $15.01. This follows a strong night of trade for the location technology company’s Nasdaq listed shares. After a reasonably lukewarm start to life on Wall Street, the company’s shares finally took off overnight and rose by 6%. The good news is that there could still be plenty more gains to come. Earlier this week, Bell Potter put a buy rating and $17.00 price target on its shares. This implies potential upside of 13% for investors from current levels.

Paladin Energy Ltd (ASX: PDN)

The Paladin Energy share price is up over 1% to $14.30. This appears to have been driven by the release of a broker note out of Citi. According to the note, the broker feels that recent share price weakness due to a pullback in uranium prices has created an attractive entry point for investors. As a result, its analysts have reaffirmed their buy rating and $17.00 price target on the uranium miner’s shares. This suggests that Paladin Energy’s shares could rise by approximately 19% over the next 12 months.

The post Why Boss Energy, Judo Capital, Life360, and Paladin Energy shares are pushing higher appeared first on The Motley Fool Australia.

More reading

• Brokers name 3 ASX shares to buy now
• Why is ASX 200 uranium stock Boss Energy flying higher on Friday?
• Here are the top 10 ASX 200 shares today
• 2 ASX 200 shares with ex-dividend dates next week
• Why Bubs, Codan, Life360, and Sayona Mining shares are charging higher

Motley Fool contributor James Mickleboro has positions in Life360. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360. 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.