Category: Stock Market

In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is out of form again and sinking into the red. At the time of writing, the benchmark index is down 0.55% to 7,711.5 points.

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

Arafura Rare Earths Ltd (ASX: ARU)

The Arafura Rare Earths share price is down almost 3% to 17.5 cents. This may have been driven by news that Rare Earths Norway has just discovered Europe’s largest proven deposit of rare earth elements. Trond Watne, Chief Geologist of Rare Earths Norway, said: “We have now, through an independent third party, confirmed that we have a significant Mineral Resource at Fen. This is a milestone for us that could be extremely important for the local community in Nome, but also Norway and Europe for generations.”

Bigtincan Holdings Ltd (ASX: BTH)

The Bigtincan share price is down 14% to 12 cents. This follows the completion of a $10 million institutional entitlement offer and news that Vector Capital has formally withdrawn its non-binding indicative proposal to acquire the company. Though, in respect to the latter, it has requested ongoing engagement with the company with a view of making a new offer to acquire the struggling tech company.

Evolution Mining Ltd (ASX: EVN)

The Evolution Mining share price is down 1.5% to $3.70. This morning, this gold miner warned that its Cowal and Mt Rawdon operations have been impacted by continued high levels of rainfall. Restrictions to open-pit operations at Cowal and Mt Rawdon have necessitated the processing of lower grade stockpile ore at various stages during the past two months to maintain full processing feed rates. The good news is that the Cowal underground operation has not been impacted by weather and has continued its planned ramp up following successful commencement of commercial production in April. In addition, material handling systems at Red Lake have been disrupted by localised seismic events at the Balmer and Cochenour areas.

Galileo Mining Ltd (ASX: GAL)

The Galileo Mining share price is down 5.5% to 25 cents. This is despite the release of an update which reveals that its Mineral Resources Ltd (ASX: MIN) farm-in agreement is now complete. Managing director, Brad Underwood, commented: “With completion of the MinRes lithium joint venture agreement, lithium exploration will now begin at the Norseman project. MinRes have an incredible depth of experience in the lithium business and have secured the rights to work on our untested lithium potential at Norseman.”

The post Why Arafura Rare Earths, Bigtincan, Evolution Mining, and Galileo Mining shares are dropping appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday
• 5 things to watch on the ASX 200 on Friday
• Top brokers name 3 ASX shares to buy today
• 5 things to watch on the ASX 200 on Wednesday

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 Bigtincan. 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.

Imagine waking up without the need to rush to work, having the freedom to spend your days as you wish, and pursuing passions that bring you joy.

This dream of early retirement has become increasingly popular, spurred by the Financial Independence, Retire Early (FIRE) movement. The FIRE movement is gaining traction as more people seek to take control of their financial future and achieve retirement well before the traditional age of 60 plus.

But how much money do you really need to make this dream a reality?

Average spending in retirement

One of the first questions that comes to mind when planning for retirement is how much money you need to cover daily living costs. The answer can vary depending on your lifestyle and neighbourhood, but the Association of Superannuation Funds of Australia (ASFA) provides a general guide.

According to ASFA’s latest report, published in March 2024, an individual will need around $51,630 per year to live comfortably in Australia, and this figure rises to $72,660 for a couple. This amount is based on maintaining a good standard of living and being able to afford occasional luxuries, including dining out, domestic travel, an international trip once every seven years, and leisure activities.

If you consider yourself a frugal person, you can benchmark modest lifestyle budgets. In the same report, ASFA advises that a single person with a modest lifestyle needs to spend $32,915 a year, while a couple would want to spend $47,387 a year.

The above figures are based on retired people aged 65 to 84. They assume no dependent child is in the household, that the retirees own their own home, and that the figures relate to household expenditures.

However, these figures are just a starting point. The actual amount you need can vary based on personal lifestyle choices, healthcare needs, and other individual factors. It’s essential to assess your own retirement goals and consider how much you’ll need to support your desired lifestyle in retirement.

The 4% rule

Once the spending requirement is assessed, it’s time to think about how to get there.

A common strategy for determining how much money you’ll need to retire is the 4% rule. This rule suggests that you can withdraw 4% of your nest egg each year without running out of money. But bear in mind that it is a theoretical exercise rather than a hard-and-fast rule.

The 4% rule is based on historical market performance and assumes a balanced portfolio of stocks and bonds. This approach assumes the investment portfolio can earn more than 4%, adjusting for inflation. That is based on the average annual return over a long period of time, so note there will be year-to-year fluctuations in the market.

Using these two figures, we can estimate a single retired person in Australia needs roughly $1.29 million to continue living comfortably, spending $51,630 per year.

Do we really need that much money to retire?

This appears to be a jaw-dropping number to reach by saving during our working lives. However, remember that this is a hypothetical number, and you can live off the capital gains without needing to work.

There are also other ways to reach your retirement goal, as summarised below.

1. Save more through superannuation. As my colleague Tristan explained in this article, superannuation is a tax efficient vehicle for Australians saving for retirement. All workers receive superannuation payments from their employers at 11% of their earnings. Not just that, you can make an additional concessional contribution of up to $30,000 per year, including employer contribution, according to ATO.
2. Maximise the benefits of dividend investing using franking credits. The required capital size will reduce if we can increase investment returns. But this has to be achieved without increasing the risk profile of the investment portfolio. One way to consider is investing your money in stable dividend stocks with high franking credits as my colleague Sebastian explained. This will help you save tax, as the Federal Government acknowledges partial or full tax payment for this income is already paid by the company.
3. Spend less. If you wish to retire early, you may consider lowering your living costs and settling for a slightly less luxurious lifestyle. Maybe international travel could be replaced with domestic trips. Perhaps eat out less frequently. Using the same calculation, the required seed money will be reduced to $822,875 by changing to a modest lifestyle.

Foolish takeaway

Planning for retirement requires careful consideration and a clear understanding of your financial goals. Whether you’re inspired by the FIRE movement or simply aiming for a comfortable retirement at the traditional age, knowing how much money you need and understanding strategies like the 4% rule and the power of compounding can help you achieve your retirement dreams.

Start by assessing your lifestyle needs, setting realistic savings goals, and regularly reviewing your financial plan to stay on track. With the right preparation, you can look forward to a secure and fulfilling retirement.

The post How much money do you need to retire? appeared first on The Motley Fool Australia.

More reading

• Why Arafura Rare Earths, Bigtincan, Evolution Mining, and Galileo Mining shares are dropping
• Why Bapcor, Botanix, Judo Capital, and Woodside shares are rising today
• 1 ASX share on the cusp of profitability
• Guess which ASX All Ords stock just rocketed 9% after being added to the ASX 200
• BHP share price slips as union takes legal action

The S&P/ASX 200 Index (ASX: XJO) is having another disappointing session. In afternoon trade, the benchmark index is down 0.65% to 7,705.1 points.

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

Bapcor Ltd (ASX: BAP)

The Bapcor share price is up a further 3.5% to $5.14. Investors have been scrambling to buy the auto parts retailer’s shares this week after it received an unsolicited, indicative, conditional and non-binding takeover proposal from Bain Capital. This would see Bapcor shareholders receive $5.40 cash per share from the private equity giant. As things stand, the Bapcor board is currently considering the offer and has warned that “there is no guarantee that the Indicative Proposal put forward by Bain Capital will result in a binding offer or that any transaction will eventuate.” The offer price is well short of Bapcor’s 52-week high of $7.09, so some shareholders may feel short-changed if it is accepted.

Botanix Pharmaceuticals Ltd (ASX: BOT)

The Botanix Pharmaceuticals share price is up 2% to 28 cents. This morning, this clinical dermatology company announced that it has submitted the last label materials to the US Food & Drug Administration (FDA) for Sofdra. It is a pending prescription treatment for excessive underarm sweating. Management notes that label discussions are the final step for Botanix before the anticipated FDA approval of Sofdra. They have involved discussions with the FDA on product carton design and wording of information that is provided to patients and physicians about the product.

Judo Capital Holdings Ltd (ASX: JDO)

The Judo Capital share price is up 7% to $1.39. Investors have been buying this business lender’s shares today amid news that it will be added to the ASX 200 index next week. After the market close on Tuesday, S&P Dow Jones Indices announced that it will replace building materials company CSR Ltd (ASX: CSR) when it is removed from the index week. 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.

Woodside Energy Group Ltd (ASX: WDS)

The Woodside Energy share price is up 2.5% to $27.73. This appears to have been driven by a broker note out of Macquarie this morning. According to the note, the broker has upgraded the energy giant’s shares to an outperform rating with a $32.00 price target. Macquarie made the move on valuation grounds, believing that the market was valuing Woodside on a long term oil price significantly below even its own lower than consensus forecasts.

The post Why Bapcor, Botanix, Judo Capital, and Woodside shares are rising today appeared first on The Motley Fool Australia.

More reading

• Guess which ASX All Ords stock just rocketed 9% after being added to the ASX 200
• These 3 ASX 200 shares were just rerated by top brokers
• Why analysts love Woodside and these ASX blue chip shares
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today

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

The ASX share Tuas Ltd (ASX: TUA) is expanding so quickly that it could soon be making a profit rather than a loss.

Tuas is a Singapore mobile business rapidly becoming a sizeable player in the Asian country. Despite being on the ASX for just four years, its market capitalisation has grown to more than $1.8 billion.

The company is led by executive chair David Teoh, who helped TPG Telecom Ltd (ASX: TPG) grow into a significant competitor in the Australian telco space by providing good value offerings. Tuas appears to be following the same playbook.

Rapidly approaching profit

The business reported a net loss after tax of $13.3 million in the second half of FY22, a net loss of $7.8 million in the second half of FY23 and a net loss of $3.5 million in the first half of FY24. With this rate of progress, I think Tuas will likely generate a profit in the first half of FY25.

The ASX growth share is achieving a significant increase in its active mobile services every reporting period. In the HY24 result, it reported 938,000 subscribers, up 35.7% from 691,000 in HY23. It had 487,000 subscribers in HY22, which has grown over 90% in two years.

In a sign of its low costs for customers, its average revenue per user (ARPU) per month was $9.56 in HY24 (up from $9.37 in FY23)

One of the most compelling aspects of the company’s growth is that it’s showing good signs of operating leverage, with profit margins rising. HY24 revenue rose 38% to $54.7 million, and EBITDA jumped 56% to $22.4 million.

If Tuas’ subscriber base can continue growing at a solid double-digit rate, the profit metrics could improve at a very satisfactory rate. The company explained that its expanded plan range catered to an array of customers’ needs.

Pleasingly, the business has already reached positive cash flow status – in HY24, it generated $27.5 million of operating cash flow while only using $23.9 million of that for its investing activities and $0.3 million for its financing activities.

Growth plans

Tuas is benefiting from the 5G rollout, which allows it to offer customers a better service. I think 5G could be key for the future.

The ASX growth share is also working on its fibre broadband offering, which could enable it to capture more value from existing and new mobile subscribers.

The company is expecting “continued subscriber growth” in the second half of FY24, which I think is very promising for the company’s shorter-term profit growth prospects.

It’s planning to spend between $45 million and $50 million on capital expenditure in its mobile and broadband divisions, which I think can help accelerate growth and improve its offering in the next few years.

Tuas share price snapshot

The Tuas share price is up 3.75% at the time of writing, trading at $4.15. The company’s shares have rocketed 30% since the start of 2024 and are up 120% over the past 12 months.

The post 1 ASX share on the cusp of profitability appeared first on The Motley Fool Australia.

More reading

• Why Arafura Rare Earths, Bigtincan, Evolution Mining, and Galileo Mining shares are dropping
• How much money do you need to retire?
• Why Bapcor, Botanix, Judo Capital, and Woodside shares are rising today
• Guess which ASX All Ords stock just rocketed 9% after being added to the ASX 200
• BHP share price slips as union takes legal action

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

This ASX All Ords stock is enjoying a tremendous run today after investors learned it was graduating from the All Ordinaries Index (ASX: XAO) and will soon be joining the S&P/ASX 200 Index (ASX: XJO).

Shares in the bank stock, which specialises in business lending, closed yesterday trading for $1.30. As we head into the Wednesday lunch hour, shares are changing hands for $1.42 apiece, up 9.2%.

For some context, the All Ordinaries and the ASX 200 are both down 0.7% at this same time.

Any guesses?

If you said Judo Capital Holdings Ltd (ASX: JDO), go to the head of the virtual class.

Here’s what’s happening with the soon-to-be-relisted ASX All Ords stock.

ASX All Ords stock soars on index upgrade

In an announcement released after market close yesterday, S&P Dow Jones Indices said that it would remove building products company CSR Ltd (ASX: CSR) from the ASX 200 as the company is being acquired by Compagnie de Saint-Gobain.

That takeover unfolded in late February when Saint-Gobain offered $9.00 a share to acquire all of CSR’s stock. The takeover, and CSR’s removal from the ASX, remains subject to shareholder and final court approval of the scheme of arrangement.

This is proving to be good news for Judo shareholders, as the ASX All Ords stock will replace CSR in the ASX 200 effective prior to the open of trading on Thursday, June 20.

Stocks often benefit when they’re moved to the more prominent indexes, like the ASX 200. That’s because these companies tend to get more media and broker coverage. There are also a lot of fund managers who can only invest in larger companies listed on the ASX 200. And, as of next week, Judo will meet that requirement.

What’s been going right for Judo shares?

The ASX All Ords stock is joining the ASX 200 following a tremendous 41% share price surge in 2024. That gives Judo a market cap of almost $1.6 billion, which sees it move into the group of top 200 listed companies in Australia.

In its most recent market update on 9 May, the bank reported $93.1 million in profit before tax for the nine months ending 31 March amid ongoing lending growth.

Looking ahead, the ASX All Ords stock (soon to be ASX 200 stock) forecast FY 2024 profit before tax, excluding non-recurring items, of $107 million to $112 million. FY 2025 guidance is targeting 15% year on year profit before tax growth.

The post Guess which ASX All Ords stock just rocketed 9% after being added to the ASX 200 appeared first on The Motley Fool Australia.

More reading

• Why Bapcor, Botanix, Judo Capital, and Woodside shares are rising today
• 5 things to watch on the ASX 200 on Wednesday

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.

The BHP Group Ltd (ASX: BHP) share price jolted in early trading on Wednesday and is now drifting 0.85% lower at $43.37 apiece.

While the miner has no company-specific news out today, the Mining and Energy Union (MEU) reports it has filed a series of applications in the Fair Work Commission regarding three of BHP’s coal mines.

Here’s a closer look at what this means for investors and the BHP share price.

BHP share price drifts as union files suit

The MEU says it has launched a legal battle against BHP with the Fair Work Commission. It is aiming to increase the pay of 1700 labour-hire workers at three of BHP’s sites from $10,000 to $40,000 annually.

The union filed applications with the commission on Wednesday for “same job, same pay” orders covering such workers at BHP’s Peak Downs, Saraji, and Goonyella Riverside coal mines. These assets are a part of the BHP-Mitsubishi Alliance (BMA) but are operated solely by BHP.

BMA operates five coal mines in Queensland, including the three mentioned above. Its enterprise agreement, constructed in 2022, governs rates of pay for those workers directly employed at the site.

It does not cover labour-hire workers at the site, however. The “same job, same pay” orders argue against this. The total of 10 applications covers labour-hire workers employed by WorkPac, Chandler Macleod, and BHP subsidiary Operations Services.

The MEU alleges that BHP’s current labour hire practices drive down wages and job security, labelling it a “labour-hire rort”.

MEU Queensland president Mitch Hughes had this to say:

BHP has driven the casual labour hire model that has spread like a cancer throughout coal mining…

Today’s applications are a major step towards stamping out this model and closing the loopholes that have allowed BHP to avoid paying fair rates in site enterprise agreements. 

BHP must accept that using labour hire purely to cut pay is out of step with community standards and is now out of step with the law.

There is no talk on whether the union’s move could potentially disrupt BHP’s operations and increase labour costs. BHP has yet to respond to the applications at the time of publication.

Implications for BHP

The MEU says it plans to expand its “same job, same pay” campaign across the coal industry, targeting other BHP operations and potentially affecting thousands of workers. This could set a precedent impacting labour hire practices industry-wide.

Despite the legal challenges, I think the BHP share price will likely remain resilient, as nothing has changed fundamentally for the company at this stage.

Goldman Sachs recently reinstated coverage of BHP shares with a buy rating and a price target of $49.00. This suggests a potential upside of 13% over the next 12 months. Goldman highlights BHP’s robust position as Australia’s largest miner, underpinned by strong fundamentals and favourable market conditions.

BHP shares have traded within a tight range in the last 12 months and are down 2% in that time. This year to date, as the S&P/ASX 200 Index (ASX: XJO) has lifted around 1.5%, the BHP share price is 14% in the red.

The post BHP share price slips as union takes legal action appeared first on The Motley Fool Australia.

More reading

• Buy Rio Tinto and these 4 ASX mining stocks in June
• 4 top ASX 200 stocks to buy now for the AI revolution
• Here’s the iron ore price forecast through to 2027
• Guess which popular ASX 200 mining stock could crash over 30%
• 3 ASX stocks Warren Buffett could buy today

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.

Three S&P/ASX 200 Index (ASX: XJO) just got rerated by leading brokers.

One had its outlook cut.

The other two received boosted forecasts.

Read on for the details.

(Broker data courtesy of The Australian.)

One ASX 200 share getting downgraded

First, we turn to the ASX 200 share getting its rating cut today, software designer Altium Ltd (ASX: ALU).

Altium shares are down 0.1% in early trade today, changing hands for $67.48 apiece. That sees the Altium share price up 45% in 2024. The stock also trades on a partly franked trailing dividend yield of 0.9%.

Much of this year’s strong performance stems from February’s $9.1 billion takeover offer lobbed by Japan’s Renesas Electronics Corporation. An offer the board supports and one that’s headed for a shareholder vote.

The takeover offer values Altium at $68.50 per share.

That also happens to be Citi’s price target for the stock. The broker doesn’t appear to see any further upside from there and has cut this ASX 200 share’s rating to neutral.

Two large caps getting upgrades

Moving onto the ASX 200 shares earning upgrades, we kick off with iron ore miner Champion Iron Ltd (ASX: CIA).

The Champion Iron share price is up 0.9% in morning trade today at $6.66. But following on this year’s slide in iron ore prices, Champion Iron share remain down 22% in 2024. The stock also trades on an unfranked trailing dividend yield of 2.3%.

Macquarie believes that the sell-off has been overdone.

The broker raised Champion Iron to an outperform rating with a $7.90 price target. That represents a potential upside of almost 19% from current levels.

The miner released some promising FY 2024 results on 31 May. Among the highlights, the company achieved all-time high earnings before interest, taxes, depreciation and amortisation (EBITDA) of C$553, an 11% increase from the prior year.

Which brings us to the second ASX 200 share getting a broker upgrade, Aussie oil and gas giant Woodside Energy Group Ltd (ASX: WDS).

The Woodside share price is up 1.4% today, at $27.46 a share. That still leaves the stock down 13% in 2024. And it sees Woodside shares trading at a fully franked trailing yield of 7.9%.

According to Macquarie equities analyst Mark Wiseman, Woodside shares are now trading at bargain levels. Macquarie raised Woodside shares to an outperform rating with a $32.00 price target (unchanged). That represents a potential upside of almost 17% from current levels.

According to Wiseman, Woodside shares have been oversold based on excessive concerns over the company’s project and climate risks.

On the project risk front, yesterday the ASX 200 share reported it had achieved its first oil from the offshore Sangomar project in Senegal. Sangomar is one of the company’s major growth projects that’s come under scrutiny following government elections in the African nation in March.

According to Wiseman (quoted by The Australian):

We see upside potential from the ramp-up of the Sangomar project, ability to book additional reserves. In 12 to 24 months Woodside can determine whether a phase 2 project is viable.

The post These 3 ASX 200 shares were just rerated by top brokers appeared first on The Motley Fool Australia.

More reading

• Why analysts love Woodside and these ASX blue chip shares
• 5 things to watch on the ASX 200 on Wednesday
• Why is the Woodside share price racing ahead of the benchmark today?
• Should you load up on Woodside shares?
• 3 ASX 200 shares with ex-dividend dates next week

Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 Altium and Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Now that we are halfway through the calendar year, many investors may be rethinking the kind of ASX 200 stock they need for their portfolios.

The ASX share market has shifted dynamics since the beginning of January. The S&P/ASX 200 Index (ASX: XJO) has climbed less than 2%, but many stocks have outperformed.

Treasury Wine Estates Ltd (ASX: TWE) has seen its shares rise by almost 12% year-to-date, trading at $12.04 apiece at the time of publication.

This strong performance and broker confidence make it a standout ASX 200 stock to consider this June, in my opinion. Let’s explore why it is on the rise and what this means for potential investors.

Why is this ASX 200 stock performing well?

Investors have been lifting the bid on Treasury Wine Estates shares following a number of positive updates.

For one, it recently reaffirmed its guidance for FY 2024. Management is projecting an upper estimate of growth in pre-tax income to $228 million. Recent acquisitions of Frank Family and DAOU have grown earnings, it says.

The company also aims to expand the global reach of its premium Penfolds brand and increase its market share in the US, according to my colleague James.

Earlier in the year, a boost of confidence came when the Chinese Ministry of Commerce announced that China had fully lifted all tariffs on Australian wines. This enabled the company to “commence partnering with its customers in China” and continue its growth route.

Broker confidence

Goldman Sachs is bullish on the ASX 200 stock, too, reiterating its buy rating with a price target of $13.40 in a note last week. This implies a potential return of 12% and nearly 15%, including projected dividends.

The broker is positive on the wine merchant given a more attractive growth outlook and its consumer advantages in the luxury segment.

This might be positive for bottom-line growth, analysts say.

[W]e reiterate buy given the positive delivery of the strategy reset as well as attractive double-digit EPS growth at an attractive valuation. The stock is trading at 1yr forward [price-to-earnings ratio] of 20x. The key catalyst for the stock will now be its June 20 Business Update focused on China.

Goldman also touched on the “continued global expansion of Penfolds, especially post the removal of China import tariffs”.

The broker expects nearly 15% sales growth from the company each year until FY 2026. This while “reinventing itself as the number 1 US luxury wine company” after the “growth and margin accretive” acquisitions of Frank Family and DAOU.

What’s next for Treasury Wine Estates?

Goldman reckons investors should keep an eye on the ASX 200 stock’s upcoming business update, which is scheduled for June 20 and will focus on China.

This update should provide further insights into the company’s strategy and potential growth opportunities in the Chinese market. The company outlined its strategy in its interim results back in February.

Analysts also anticipate improvements in return on invested capital (ROIC) over the next two years, further positioning the company for growth.

Top ASX 200 stock for June

Treasury Wine Estates has demonstrated robust performance in 2024, with shares outperforming the benchmark. With the potential for further growth – particularly in the North American and Chinese markets – it could be well-positioned, in my opinion.

Strong guidance, strategic expansions, and broker confidence are three reasons that highlight the company as a top ASX 200 stock to watch this June.

The post Up 12% in 2024, this ASX 200 stock is a top pick for June appeared first on The Motley Fool Australia.

More reading

• Analysts say these 5 ASX 200 growth shares are top buys
• Brokers name 3 ASX shares to buy now
• Goldman Sachs names 2 ASX 200 shares to buy now
• 5 things to watch on the ASX 200 on Friday
• 3 ASX 300 shares just rerated by leading brokers

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 recommended Treasury Wine Estates. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Owning BHP Group Ltd (ASX: BHP) shares is popular for passive income, but it’s not the only ASX dividend stock that can provide a sizeable dividend yield.

The ASX mining share generates strong cash flow and usually decides on a generous dividend payout ratio, but we don’t want to put all of our investment eggs in one basket. I think it’s worthwhile owning a variety of businesses that can offer strong dividends.

I like BHP’s commodity diversification, including iron ore, copper, and potash, and the two stocks below could be useful additions.

Coles Group Ltd (ASX: COL)

Coles is one of the largest supermarket businesses in Australia. We all need to eat, so I think the business is capable of producing defensive earnings. It could provide a more consistent earnings and dividend profile than BHP shares, in my opinion.

If I’m investing for passive income, ideally the payouts can continue even if there’s an economic downturn.

The ASX dividend stock has managed to keep increasing its annual payout each year since it demerged from Wesfarmers Ltd (ASX: WES) and became its own business in late 2018.

The supermarket business continues to see solid sales performance – in the third quarter of FY24, supermarket revenue rose 5.1% to $9.06 billion. If it can continue growing at this pace, it could outperform Woolworths Group Ltd‘s(ASX: WOW) sales.

According to the estimates on Commsec, owners of Coles shares could receive a grossed-up dividend yield of 5.5% in FY24 and 6.7% in FY26.

Step One Clothing Ltd (ASX: STP)

Step One is a direct-to-consumer online retailer of ‘innerwear’. Its exclusive range is, according to the company, “high quality, organically grown and certified, sustainable, and ethically manufactured innerwear”.

I think the company offers a compelling product. There is a certain level of demand for ‘greener’ products in a world that aims for net zero emissions in 2050.

The company currently makes a majority of its revenue in Australia, but excitingly it’s growing in the UK and the US, which are much larger markets. In the FY24 first-half result, UK revenue rose 38% to $14.6 million and US revenue increased 256% to $4.1 million. This helped total revenue increase 25.5% to $45 million in HY24.

The HY24 result also saw increasing profit margins, with net profit after tax (NPAT) rising by 34.7% to $7.1 million.

The ASX dividend stock is pursuing several growth initiatives, such as expanding its women’s product lines, forming partnerships with retailers and organisations, entering the US market with its women’s product lines, and diversifying its sales channels and marketplaces.

It currently has a grossed-up dividend yield of 8%, which is a solid starting yield, in my opinion.

The post Overinvested in BHP shares? Here are two alternative ASX dividend stocks appeared first on The Motley Fool Australia.

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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 Wesfarmers. The Motley Fool Australia has positions in and has recommended Coles Group and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The COVID-19 pandemic transformed our lives in many ways. Some changes were temporary, but others have stayed with us.

One significant change is the shift in consumer behaviour. The surge in online shopping and demand for faster delivery times have added extra pressure on inventory supply and logistics. In response, many retailers are seeking options to enhance their warehouses and logistics centres.

In this article, we’ll see two ASX-listed companies benefitting from this global trend.

Why are industrial properties doing well?

Ideally, these logistics centres should be located near metropolitan areas to provide quick access to large consumer markets and minimise transportation costs and delivery times.

However, the availability of land surrounding these strategic locations is limited, with competing priorities for residential and other commercial uses exacerbating the shortage in land supply. Colliers elaborates on this dynamic in its report, saying:

Demand for Australian industrial and logistics assets remains significant, with an unprecedented amount of capital seeking to expand or enter the sector.

Record infrastructure spending on transport projects, coupled with the continued growth of e-commerce and low cost of debt has underscored demand, particularly along the east coast states where 78% of the Australian population resides.

As reported by The Sydney Morning Herald, industrial properties are also benefiting from other factors. For example, there’s a big increase in data centres powered by artificial intelligence (AI). In addition, property investors are moving their interest away from offices, which don’t have much demand right now.

Which ASX shares are ways to capitalise on this trend?

Goodman Group (ASX: GMG) is a global integrated commercial and industrial property group. The company particularly specialises in owning, developing, and managing industrial real estate assets.

In May, the company reported strong 3Q FY24 results, led by 4.9% like-for-like net property income growth and 98% occupancy across its partnerships. The robust business results led management to raise the company’s full-year guidance, expecting operating earnings per share growth of 13% in FY24.

As my colleague James highlighted here, Goodman CEO Greg Goodman remains optimistic about the company’s future outlook. He said:

The Group continues to execute on its strategy. The challenge of the uncertain interest rate environment, persistent inflation, combined with slowing economic growth, is prolonging volatility in global markets and increased cost of capital.

In the near term, we believe aggregate logistics demand is likely to remain at more moderate levels compared to that experienced in the pandemic period. However, supply has been significantly reduced globally, and is generally very constrained in our markets.

Our customers remain focused on maximising productivity from their space, preferring infill locations and increasing their investments in technology and automation. Combined with the scarcity of available assets in the markets we operate, should support rental growth and high occupancy.

The Goodman share price is up 77% over the last 12 months.

Brickworks Ltd (ASX: BKW) is a building materials provider on the surface but an industrial property developer at the heart. As I highlighted in this earlier article, much of Brickworks’ net tangible asset (NTA) worth $5.6 billion comes from its investments in listed shares and property ventures, which the company estimates to be worth $3.3 billion and $2 billion, respectively.

In fact, its building material business accounts for less than 15% of its NTA, with the remainder comprising the company’s large stake in Washington H Soul Pattinson & Company (ASX: SOL) and property development joint ventures with Goodman group.

Brickworks owns many parcels of land in prime locations around metropolitan areas, previously utilised for manufacturing building materials. Brickworks partnered with Goodman Group to develop its land holdings. Over time, the partnership has evolved, leading to Brickworks’ property division now managing two 50%/50% joint venture property trusts.

One of its important land holdings is in Oaklands Estate located in Western Sydney, which is partially developed. Brickworks’ current rent in this area is well below the market rate, leaving room for rental income growth in the future. The company explained this in a recent investor presentation by saying:

Theses structural trends, along with land supply issues, have driven up rent for prime industrial property in western Sydney by 55% in the past two years. We estimate that the current passing rent within the Industrial JV Trust of $147/m2 is now 35% below average market rent of $225/m2.

Including the Brickworks Manufacturing Trust, the current annualised rent across our portfolio is $172 million. At market rates, the rent potential of Property Trust assets once fully developed is around $340 million. This includes an additional $88 million in rent from completion of our development estates (Oakdale West and Oakdale East) in western Sydney over the next five years.

The Brickworks share price is up just 1.45% over the last 12 months.

The post 2 ASX companies that could benefit from warehouse shortages appeared first on The Motley Fool Australia.

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