Category: Stock Market

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

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

Coles Group Ltd (ASX: COL)

This supermarket giant could be an ASX share to buy this month according to the broker. It believes the company’s investment in its supply chain and online business will help strengthen its position in the market. It said:

Costs are expected to remain elevated but should moderate through FY24 and FY25 as general inflation tapers off. In the medium term, 1) higher immigration should support grocery spending, and 2) Coles is entering a period of elevated capex intensity as it reinvests to modernise its supply chain and to catch up to competitors on online and digital offerings, which should help Coles maintain its market position.

Bell Potter has a buy rating and $19.00 price target on Coles’ shares.

Mineral Resources Ltd (ASX: MIN)

If you don’t mind investing in the mining sector, then it could be worth looking at this mining and mining services company. Bell Potter likes Mineral Resources due to its diverse operations and strong growth outlook. It explains:

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

The broker has a buy rating and $85.00 price target on the ASX share.

Regal Partners Ltd (ASX: RPL)

A final ASX share that could be a buy is investment company Regal Partners. The broker highlights its strong investment performance and believes that the market is undervaluing this. It commented:

We continue to favour RPL, given its strong organic & inorganic growth potential, and entrepreneurial culture. In the last six months, and following the recent acquisition of PM Capital and Taurus (50%), the firm has shown an acceleration of inflows, strong investment performance (which will give rise to performance fees) and success in marketing new funds. We feel this strong performance is not reflected in the share price and see considerable upside

Bell Potter has a buy rating and $4.02 price target on its shares. It also expects a 6%+ dividend yield.

The post Bell Potter names the best ASX shares to buy in June appeared first on The Motley Fool Australia.

More reading

• Would I be crazy to buy Coles shares at $16?
• Mineral Resources is joining forces with this micro-cap lithium share
• Forget NAB and buy these ASX dividend shares
• Top brokers name 3 ASX shares to buy next week
• Here’s how the ASX 200 market sectors stacked up last week

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

Medibank Private Ltd (ASX: MPL) shares have been on form over the last six months.

During this time, the private health insurer’s shares have risen almost 8%.

This leaves them trading at $3.75, which is just a stone’s throw away from their 52-week high of $3.94.

But can this run continue or have Medibank shares now peaked for the time being? Let’s take a look at what analysts at Goldman Sachs are saying about the company.

What is Goldman Sachs saying about Medibank shares?

Well, there’s good news and bad news for Medibank shareholders.

The good news is that Goldman doesn’t believe you should be rushing out to sell your shares. The bad news is that it does feel that they are now fully valued.

According to a note from late last month, the broker has reaffirmed its neutral rating and $3.70 price target. This is marginally lower than where they currently trade.

But thanks to dividends, Goldman expects a positive but modest total return over the next 12 months.

It is forecasting fully franked dividends of 16 cents per share in FY 2024 and 17 cents per share in FY 2025. This equates to dividend yields of 4.25% and 4.5%, respectively.

Goldman likes Medibank due to its defensive earnings and favourable operating conditions. However, due to its current valuation, it isn’t able to recommend its shares as a buy right now.

Instead, it prefers rival NIB Holdings Limited (ASX: NHF). It commented:

MPL is one of the largest private health insurers in Australia. We are Neutral rated on the stock. We like MPL given: 1) it offers defensive exposure to the private health insurance sector which is experiencing favourable operating trends, 2) the claims environment (utilisation / inflation) remains manageable, 3) policyholder give backs are supporting retention, 4) strong recovery in non-resident volumes – international students, workers and visitor arrivals. However, we are Neutral reflecting: 1) MPL’s policyholder growth vs NHF, 2) Valuation, 3) Some risk related to cyber security legal cases and investigations.

Goldman Sachs currently has a buy rating and $8.10 price target on NIB’s shares. This implies a potential return of 9.5% over the next 12 months before dividends and approximately 13.5% including them. It said:

We currently have a preference for NHF in this space reflecting strong underlying top line growth through policyholder growth and premium rate increases, greater diversity of earnings outside of regulated resident health insurance and valuation appeal.

The post What is Goldman Sachs saying about Medibank shares in June? appeared first on The Motley Fool Australia.

More reading

• 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
• Here are 3 reliable ASX shares I’d buy instead of the big four banks right now
• With $1,000 to invest, should I buy ASX growth stocks or income shares?
• Why I’d buy high-yield ASX dividend shares for superannuation in retirement

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has 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 banking sector has been a great place to invest over the last six months.

During this time, a number of Australian banks have significantly outperformed, delivering big returns for investors.

For example, Commonwealth Bank of Australia (ASX: CBA) shares are up 16% and Westpac Banking Corp (ASX: WBC) shares are up 25%.

Regional bank Bank of Queensland Ltd (ASX: BOQ) has also been on form, rising by 9% over the six months.

However, the team at Goldman Sachs has just reiterated its view that investors should be locking in their gains and moving out of the banking sector.

What is Goldman saying at the banks?

It notes that bank valuations in Australia have always been higher than their global peers. And this has been somewhat justifiable given their higher returns on equity (ROE). But the latter no longer is the case. It explains:

In CY15A, the Australian banks earned the second highest average ROTE/ROE of global comparable banks, slightly below that of the Canadian banks. However, between 2015 and 2023, Australian bank ROTE/ROE underperformed global comparable banks by c. 50%, such that Australian banks now actually earn the lowest ROTE of global comparable banks, and among the lowest ROE.

Unfortunately, Goldman doesn’t believe this trend will change any time soon. It adds:

Interestingly, the underperformance on returns can largely be attributed to NIM and the exit from sources of low capital intensive non-interest income, neither of which we expect to improve over the forecast period. Furthermore, we note that balance sheet gearing has actually been a relative returns tailwind for Australian bank returns.

ASX banks look expensive

Despite the above, Australian investors have been prepared to buy CBA and other ASX bank shares even though they are the most expensive in the world. It adds:

Despite this relatively poor ROTE/ROE performance, the fall in Australian bank price-to-book multiples has largely matched that of their global comparable peers, such that they collectively remain the most expensive global banks (1.9x P/BV for 11% ROE vs. global comparable banks 1.3x P/BV for 13% ROE). With all this in mind, we estimate the Australian banks, relative to global comparable peers, on a ROE vs. price-to-book multiples basis, are currently trading at the 96th percentile versus history (95th percentile ex-CBA).

Sell Westpac, Bank of Queensland, and CBA shares

In light of the above, it will come as no surprise to learn that Goldman has put sell ratings on CBA, Bank of Queensland, and Westpac.

It has a sell rating and $82.61 price target on CBA’s shares, a sell rating and $24.10 price target on Westpac’s shares, and a sell rating and $5.44 price target on Bank of Queensland’s shares.

The post Why you should sell CBA, Westpac, and Bank of Queensland shares in June appeared first on The Motley Fool Australia.

More reading

• 2 high-yield ASX shares I’d buy right now for dividends
• Are ASX 200 bank shares a good investment right now?
• Here are the top 10 ASX 200 shares today
• How the CBA share price defied the bears to surge in May
• Is the Westpac share price at a stretched valuation right now?

Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. 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.

Investors searching for passive income could do very well with high-yield ASX shares. In fact, one of the advantages of buying companies for dividends is that there is a second source of investment return other than capital gains – income.

And in a world of high inflation, high interest rates, and geopolitical instability – cash remains king in my view.

Here are two standout options to consider in the dividend debate: Bank of Queensland Ltd (ASX: BOQ) and Westpac Banking Corp (ASX: WBC). Let’s take a look.

Why Bank of Queensland is a high-yield ASX share

BOQ serves around 1.4 million customers and holds a 2.73% share of the Australian residential mortgage market.

Bank of Queensland is currently trading at $5.93 per share, boasting a trailing dividend yield of 6.41% from dividends of 38 cents per share in the last 12 months.

This yield is among the highest in the ASX banking sector, making it an attractive option for income-focused investors, in my opinion.

Despite varying economic environments over the years, BOQ has maintained stable, robust dividend payouts. A $10,000 investment in BOQ stock today would yield approximately $660 annually based on its trailing dividend rate (no franking credits considered). If the dividend yield drops however – so too would this yield.

For comparison, the iShares Core S&P/ASX 200 ETF (ASX: IOZ) – an ETF tracking the Australian benchmark index – currently pays dividends at a trailing yield of 3.59%.

Westpac – another top high-yield ASX share

Westpac is another high-yield ASX share worth noting. At the time of publication, its trailing dividend yield is 5.5%.

Westpac, one of Australia’s “big four” banks, has a strong track record of paying solid, fully-franked dividends, making it a reliable choice for dividend-seeking investors, in my view.

The bank has also demonstrated resilience in a number of economic cycles, maintaining strong net interest margins along with the broad sector, according to my colleague Bernd. This performance, coupled with ongoing share buybacks, is a vote of confidence in my estimation.

If Westpac continues to pay dividends at the same yield of around 5.5%, a $10,000 investment would return around $560 in passive income annually (not considering any franking credits).

Conclusion

Both Bank of Queensland and Westpac offer attractive high yields for ASX investors. BOQ’s 6.41% trailing yield and Westpac’s 5.5% trailing yield could make them compelling options for those seeking strong, consistent dividends, in my view.

As a precaution – even though the banks are tipped to continue paying strong dividends moving forward, past performance is no guarantee of future results.

The post 2 high-yield ASX shares I’d buy right now for dividends appeared first on The Motley Fool Australia.

More reading

• Are ASX 200 bank shares a good investment right now?
• Here are the top 10 ASX 200 shares today
• Is the Westpac share price at a stretched valuation right now?
• Here’s the average wealth of Aussies who manage their own superannuation
• Buy one, sell the other: Goldman’s take on these 2 ASX bank shares

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.

On Tuesday, the S&P/ASX 200 Index (ASX: XJO) had an underwhelming session and dropped into the red. The benchmark index fell 0.3% to 7,737.1 points.

Will the market be able to bounce back from this on Wednesday? Here are five things to watch:

ASX 200 expected to edge lower

It looks set to be another subdued day for the Australian share market on Wednesday despite a reasonably positive session in the United States. According to the latest SPI futures, the ASX 200 is expected to open the day 11 points or 0.15% lower. On Wall Street, the Dow Jones climbed 0.35%, the S&P 500 rose 0.15% higher, and the Nasdaq pushed 0.2% higher.

Oil prices drop again

ASX 200 energy shares Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) could have another tough session after oil prices dropped again overnight. According to Bloomberg, the WTI crude oil price is down 1.2% to US$73.30 a barrel and the Brent crude oil price is down 1% to US$77.56 a barrel. Oil prices have been under pressure this week after OPEC+ announced an end to voluntary production cuts.

Treasury Wine update

The Treasury Wine Estates Ltd (ASX: TWE) share price will be on watch today. That’s because the wine giant released an update after the market close on Tuesday. As well as talking up its sizeable opportunity in North America, the Penfolds owner reaffirmed its guidance for FY 2024. Treasury Wine continues to expect mid-high single digit EBITS growth for the year. This excludes the EBITS contribution from DAOU in the second half, which is expected to be US$24 million. This is in line with management’s expectations.

Gold price tumbles

ASX 200 gold shares Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could have a difficult day after the gold price tumbled overnight. According to CNBC, the spot gold price is down 1% to US$2,346.6 an ounce. A stronger US dollar put pressure on the precious metal.

Xero’s notes offering

Xero Ltd (ASX: XRO) shares will be in focus today after the cloud accounting platform provider launched a new convertible notes offering. Xero is raising US$850 million (A$1.28 billion) through fixed coupon guaranteed senior unsecured convertible notes due in 2031. Management advised that the net proceeds will be used to repurchase its existing notes, for potential acquisitions and strategic investments, and for general corporate purposes.

The post 5 things to watch on the ASX 200 on Wednesday appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• Why is the Woodside share price tumbling on Tuesday?
• Buying shares? Don’t fall prey to this commonly disastrous mistake
• This ASX index is up 13% in 2024. Is there more up its sleeve?
• 4 high quality ASX 200 growth shares to buy in June

Motley Fool contributor James Mickleboro has positions in Treasury Wine Estates, Woodside Energy Group, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Xero. 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.

The Telstra Group Ltd (ASX: TLS) share price has been sluggish over the past year, falling by 20%. This leading telco stock has underperformed the S&P/ASX 200 Index (ASX: XJO), which is up 7% during the same period. At the time of writing, the Telstra share price is trading at $3.48.

Telstra offers a dividend yield of 5.03%, surpassing the Reserve Bank of Australia’s official cash rate of 4.35%. Can this be a good investment opportunity for dividend-focused investors? 

Telstra’s valuation has become cheaper

The declining share price has made Telstra cheaper in terms of the price-to-earnings ratio. According to S&P Cap IQ, the Telstra share price is now valued at 19x FY24’s estimated earnings, down from 24x a year ago and near the midpoint of its historical trading range of 10x to 28x. 

Telstra generates a robust operating cash flow of approximately $7 billion annually, supporting its substantial cash dividend payments. As mentioned above, Telstra offers a fully-franked dividend yield at the current price.

How about Telstra’s business outlook?  

The telecommunications industry necessitates continuous investment in capital assets to ensure a high quality of service. Telstra spends nearly $4 billion annually on capital expenditures (capex), leaving approximately $3 billion of free cash flow, which is the cash left after accounting for cash outflows to support operations and capex.

While Telstra’s free cash flow of $3 billion is sufficient to cover its current annual dividend payments of $2.3 billion, future earnings growth is crucial for raising its dividend payments. 

Unfortunately, Telstra faces growing competition from more affordable alternatives, driven by consumer efforts to manage living costs. Additionally, as the largest player in the Australian market, Telstra has limited domestic growth opportunities. 

With that said, Telstra is proactively finding ways to optimise its cost structure, as highlighted in its recent market update in May 2024. 

Foolish Takeaway

The Telstra share price has been disappointing this year. However, the company’s valuation has become more attractive, trading at 19 times, and it offers a dividend yield of 5%. 

With limited revenue growth opportunities, Telstra’s focus on cost optimisation is a promising strategy for enhancing net profits and sustaining future dividend payments.

The execution of Telstra’s cost optimisation and growth strategies will be critical going forward.

The post Are Telstra shares now a brilliant bargain? appeared first on The Motley Fool Australia.

More reading

• ‘Undervalued’: 3 ASX 300 shares to buy following significant share price falls
• Buy Rio Tinto and these ASX dividend stocks for 5%+ yields
• Here is the earnings forecast through to 2026 for Telstra shares
• How I’d try to turn an empty portfolio into $300k by buying cheap ASX shares, starting now
• How UBS expects Telstra shares to gain 27% and deliver dividend growth

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

If you’re looking for new additions to your investment portfolio in June, then it could be worth considering QBE Insurance Group Ltd (ASX: QBE) shares.

That’s because analysts at Goldman Sachs believe that big returns could await investors that buy the insurance giant’s shares at current levels.

Why are QBE shares a buy?

Goldman has named a few reasons why it thinks that investors should be buying the company’s shares today.

The first reason is that “QBE has the strongest exposure to the commercial rate cycle.” Given the momentum that is being seen in the commercial premium rate cycle, Goldman expects QBE to benefit greatly.

Another reason that the broker is bullish on the insurer is that “QBE’s achieved rate increases continue to be strong & ahead of loss cost inflation.”

And a third reason is that its “valuation [is] not demanding.” Goldman estimates that its shares are changing hands for just 9.8x estimated FY 2024 earnings of US$1.22 per share (A$1.84 per share).

Big returns expected

Goldman has a buy rating and $20.90 price target on QBE’s shares. This implies potential upside of 16% for investors over the next 12 months.

In addition, the broker is forecasting a 62 US cents per share (93.3 Australian cents per share) dividend in FY 2024. This represents a 5.2% dividend yield based on its current share price and boosts the total potential return beyond 20%. A slightly larger 63 US cents per share dividend is then expected in FY 2025.

Is anyone else bullish?

Goldman isn’t alone with its view that QBE’s shares are good value at current levels.

UBS currently has a buy rating and $21.00 price target on its shares. Whereas the team at Citi has a buy rating and $20.00 price target on its shares and Morgans has an add rating with a $20.00 price target. These all imply double-digit upside from where its shares trade today.

Commenting on its add recommendation, Morgans said:

With strong rate increases still flowing through QBE’s insurance book, and further cost-out benefits to come, we expect QBE’s earnings profile to improve strongly over the next few years. The stock also has a robust balance sheet and remains relatively inexpensive overall trading on 8x FY24F PE.

Overall, the broker community appears to believe that the insurance giant could be a quality option for investors. Especially those looking for a source of income from the share market given its 5%+ dividend yields.

The post 3 reasons to buy QBE shares right now appeared first on The Motley Fool Australia.

More reading

• 2 top ASX income shares that analysts love
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Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has 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.

Looking to supersize your stage three tax cuts by investing in S&P/ASX 200 Index (ASX: XJO) shares?

With history as our guide, that could prove to be a great road towards building your wealth.

As you’re likely aware, the stage three tax cuts take effect this financial year. Meaning from 1 July 2024, everyone earning more than $18,200 a year should expect to pay less of their hard-earned paycheques back to the ATO.

But what you choose to do with the extra cash in hand could make a tremendous difference to your financial well-being.

Why invest your tax cuts in ASX 200 shares?

The pending stage three tax cuts will see most Aussies significantly better off than they were before.

Especially if they opt to invest that extra cash in ASX 200 shares.

“While this will provide much-needed cost of living for many, others will be intending to splurge the extra cash, or stash it away in savings, which could easily be invested instead,” Brendan Doggett, Sharesies AU country manager, told the Motley Fool.

According to Doggett:

For example, if you earn the average national salary of $90,000 a year, you’ll get $160 back in tax cuts each month from 1 July. This could be turned into $11,396 in five years’ time if invested every month to buy ASX stocks, thanks to compound interest.

That figure assumes there are no changes to future tax rates and is based on the 6.8% average return posted by the ASX 200 over five years.

As you’d expect, for higher income earners the benefits of investing those stage three tax cut returns will be greater.

“For those who earn even higher, say $150,000, this would look more like $310 extra each month, and could result in a healthy $22,079 in stocks by 2029,” Doggett said. “Building this extra cash into your monthly investment routine is a simple way to add to your portfolio without much of a lift.”

And the longer your investment horizon, the better your returns from ASX 200 shares are likely to be.

According to Doggett:

For investors with a long-term gaze, $160 invested every month could turn into $31,493 in 10 years. When added to your super balance and any existing investments you may have, that’s a more-than-healthy contribution to a retirement fund that can be easily set aside monthly and forgotten about.

The figures here are based on the average ASX 200 rate of return of 9.3% over 10 years.

Which is not to say investors can’t reap some benefits with a shorter-term horizon.

“As for younger investors whose sights are more set on milestone ‘firsts’ such as getting on the property ladder or starting a family, fantastic returns can still be made in the short-term,” Doggett said.

“If you invest your extra income every month, you’d have $6,046 in three years’ time. Not bad for what could otherwise be splashed on a monthly grocery shop or trip to the pub!”

This figure is based on the average ASX 200 rate of return of 3.3% over three years.

The benefits of dollar-cost averaging

Now if you’re set to receive a sizeable tax refund from the stage three cuts, you might be tempted to invest it all in ASX 200 stocks in one go.

While that may not be a bad idea, Doggett told us that dollar-cost averaging can help investors form a lifetime wealth-building habit.

“In addition to seeing more in their pockets each month, many Australians are also preparing to receive a large tax refund, which could also be invested,” he said.

Doggett added:

While investing this as one lump sum might give you a higher return, quicker, it won’t turn investing into a habit, which is really what’s needed to make long-term gains.

Even though investing little and often every month (via dollar-cost averaging) might feel slower, this ‘set and forget’ mindset will help you maintain momentum and grow your money in the long-run.

The post How to turn your stage 3 tax cuts into $11,396 buying ASX 200 shares appeared first on The Motley Fool Australia.

More reading

• 3 reasons to buy QBE shares right now
• 2 excellent ASX income stocks to buy this month
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• Here are the top 10 ASX 200 shares today
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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.

Are you looking for ASX income stocks to buy this month? If you are, it could be worth looking at the two in this article.

That’s because they have recently been named as buys by Morgans and tipped to offer attractive dividend yields.

Here’s what the broker is saying about them:

Cedar Woods Properties Limited (ASX: CWP)

Morgans thinks that this property company could be an ASX income stock to buy. In fact, the broker rates the company high enough to have it on its best ideas list with an add rating and $5.60 price target on its shares.

It believes company’s shares are undervalued and deserve to trade on higher multiples. It said:

CWP is a volume business and the demand for lots looks to be improving, with margins to invariably follow. CWP’s exposure to lower priced stock in higher growth markets sees further potential to drive earnings. On this basis, we see every reason for CWP to trade at NTA and potentially at a premium, were the housing cycle to gain steam through FY25/26.

As for dividends, Morgans is forecasting dividends per share of 18 cents in FY 2024 and then 20 cents in FY 2025. Based on the current Cedar Woods Properties share price of $4.48, this will mean dividend yields of 4% and 4.5%, respectively.

Dexus Industria REIT (ASX: DXI)

Another ASX income stock that Morgans rates highly is Dexus Industria. It is a real estate investment trust with a focus on industrial warehouses.

The broker currently has an add rating and $3.18 price target on its shares.

Morgans thinks that Dexus Industria is well-placed thanks to strong demand for industrial property and its development pipeline. It explains:

The portfolio is valued at $1.6bn across +90 properties with 89% of the portfolio weighted towards industrial assets (WACR 5.38%). The portfolio’s WALE is around 6 years and occupancy 97.5%. Across the portfolio 50% of leases are linked to CPI with the balance on fixed increases between 3-3.5%. While we expect cap rates to expand further in the near term, DXI’s industrial portfolio remains robust with the outlook positive for rental growth. The development pipeline also provides near and medium-term upside potential and post asset sales there is balance sheet capacity to execute.

In respect to income, the broker is forecasting dividends per share of 16.4 cents in FY 2024 and then 16.6 cents in FY 2025. Based on the current Dexus Industria share price of $2.97, this will mean dividend yields of 5.5% and 5.6%, respectively.

The post 2 excellent ASX income stocks to buy this month appeared first on The Motley Fool Australia.

More reading

• Best ASX real estate shares to buy right now
• 2 of the best ASX dividend stocks for income investors to buy in June
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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.

Despite the Australian share market currently trading within sight of its record high, not all ASX shares are faring so well right now.

In fact, there are a large number of ASX shares that are currently at or around their 52-week lows.

And while not all of these are buys and some deserve to be down there, a couple that could be in the buy zone are listed below. Here’s what analysts at Morgans are saying about them:

Karoon Energy Ltd (ASX: KAR)

The Karoon Energy share price dropped to a 52-week of $1.71 today.

The team at Morgans is likely to see this as a buying opportunity. It has the ASX energy share on its best ideas list at present. It commented:

Unique as a reasonable scale pure conventional oil producer, benefitting directly from rising oil prices. Karoon has significant net cash and is fully funded through a doubling of production over the next 12 months. There are also potential catalysts just around the corner with Karoon flagging at its recent result that it plans to shortly update the market with more detail on its growth plans, Bauna’s outlook, and its ESG approach.

Morgans has an add rating and $2.80 price target on its shares. This implies potential upside of over 60% for investors.

Tyro Payments Ltd (ASX: TYR)

The Tyro Payments share price sank to a 52-week low of 77 cents on Tuesday before ultimately ending the day at 77.5 cents.

In recent years Tyro has built a significant presence in the Australian payments industry. In fact, with around 70,000 merchants on its network, it is only behind the big four banks in respect to number of terminals in the market.

And while investors don’t appear enamoured with the ASX share right now, a good number of brokers are positive on Tyro and see it as a buy. One of those is Morgans, which has it on its best ideas list. It said:

TYR sold off heavily in 2023 affected by the broad pull back in technology stocks and overall concerns regarding its earnings trajectory. However, we believe FY24 will show significantly improved business momentum, importantly driven by a much greater focus on lifting overall profitability. TYR still trades at a significant discount to valuation.

Morgans has an add rating and $1.47 price target on its shares. This suggests that the ASX share could double in value over the next 12 months.

The post 2 ASX shares to buy that are near 52-week lows appeared first on The Motley Fool Australia.

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