Category: Stock Market

For some investors, a stable dividend stream is the holy grail – the key is to invest in companies that can sustain their payouts going forward.

I’ve had a look at three companies which appear to fit the bill pretty well.

Let’s take a look.

Atlas Arteria Ltd (ASX: ALX)

This toll road company is exactly the sort of business that I think most dividend investors are searching for.

Infrastructure companies such as Atlas Arteria tend to have long-term, stable contracts, with good visibility out over potentially several years, especially on the cost front.

Atlas Arteria is currently paying a trailing dividend yield of 8.67%, which is high, but investors can take heart from what the company said when announcing its full-year results in February.

The company not only reaffirmed its final dividend of 20 cents per share but also said it would target future full-year distributions of at least 40 cents per share, “supported by free cash flow”.

While that’s not an ironclad guarantee, it’s a strong indication that the company will continue paying out strong returns.

Helloworld Travel Ltd (ASX: HLO)

Helloworld makes the list for both strong returns and potential upside in its share price.

Shaw and Partners issued a research note this week saying that strong traveller arrival and departure numbers for January boded well for the travel operator, and they set a price target of $2.80 on the stock, compared with $1.47 currently.

The broker is predicting a dividend yield of 7.5% for the current financial year, rising to 8.2% over the subsequent two years.

Helloworld shares have been sharply sold off since the conflict in the Middle East began, and are not far off their 12-month lows of $1.30.

Perpetual Ltd (ASX: PPT)

Financial stock Perpetual is paying a 7% dividend yield, and just this week announced the $500 million sale of its wealth business to Bain Private Equity, in a move that will simplify the business.

The company said the money raised would be used to retire debt and foster organic growth in its two remaining business divisions. This surely puts the company in a good position to maintain its dividend flows.

Macquarie had a look at the wealth deal this week and put out a research note to its clients forecasting a dividend yield of 7% this financial year, which would then fall to 6.7% in FY27 and 6.4% in FY28.

The analyst team at Macquarie also has a bullish share price target of $24.60 for the stock, compared with $15.99 currently.

The post These 3 ASX stocks are paying better than 7% dividend yields appeared first on The Motley Fool Australia.

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• How high does Macquarie think this ASX 200 stock will go after its wealth sale?
• ASX travel shares are hovering near yearly lows – time to buy?
• Why Lifestyle Communities, Perpetual, Reliance Worldwide, and Woodside shares are rising today
• This ASX financial stock just struck a $500 million deal
• Perpetual sells Wealth Management business to Bain Capital for $500m

Motley Fool contributor Cameron England 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.

Investors are facing fresh warnings that the economic fallout from the ongoing Middle East war could linger well after fighting ends.

Australian Prime Minister Anthony Albanese said the conflict may have a “long economic tail”, raising concerns about what could come next for global markets, inflation, and interest rates.

Let’s unpack what this could mean for investors.

Leaders warn the economic impact could last for years

According to The Australian, the Prime Minister said the current situation could create economic shockwaves similar to those seen after COVID and Russia’s invasion of Ukraine.

Albanese described the situation as another major disruption to the global economy during a decade already marked by shocks.

He warned that even if the fighting ends quickly, the economic effects could continue to flow through supply chains, trade routes, and energy markets.

One of the biggest concerns is oil.

The Middle East remains the world’s most important energy-producing region. Any disruption to shipping routes or oil production can quickly push prices higher.

Why markets are getting nervous

Financial markets tend to react quickly to geopolitical shocks, particularly those involving energy supplies.

Higher oil prices can make things more difficult for central banks such as the Reserve Bank of Australia (RBA), which has been trying to bring inflation back within its 2% to 3% target band.

If energy costs rise quickly, inflation may stay higher for longer. That could force central banks to keep interest rates elevated or even raise them again.

Policymakers have already warned that inflation risks remain tilted to the upside.

And this is one reason why investors are watching developments in the Middle East very closely.

What it means for the ASX 200

Despite the uncertainty, the S&P/ASX 200 Index (ASX: XJO) has held up relatively well so far.

At the time of writing, the index is up around 0.1% today to about 8,621 points.

However, the broader trend has been weaker.

Over the past month, the ASX 200 has fallen by almost 4%, reflecting growing caution among investors amid rising global risks.

The pullback highlights how sensitive markets remain to geopolitical developments and interest rate expectations.

Energy stocks have generally been among the beneficiaries when oil prices surge. But other sectors, such as technology, consumer discretionary, and property, often face pressure when borrowing costs remain high.

That mix of winners and losers is likely to continue if volatility persists.

What to watch next

The biggest factor now is how the conflict develops and whether it continues to disrupt the global energy supply.

Markets will also be watching oil prices closely. If crude prices push back well over US$100 per barrel, inflation fears could intensify quickly.

The key takeaway is that these types of world events rarely stay contained.

They tend to ripple through markets, supply chains, and central bank policy.

And if this latest crisis carries on, the effects could be felt on the ASX for some time yet.

The post Markets brace for the next shock as global tensions flare up appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras 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.

4DMedical Ltd (ASX: 4DX) shares are trading 2% higher in afternoon trade on Wednesday. At the time of writing, the shares are trading at $3.87 each. The shares are now down 14.10% year to date.

The decline might look concerning on the surface, but it has barely dented the company’s gains over the past 12 months. At the time of writing, 4DMedical shares are trading an enormous 950% higher than this time last year.

What has happened to the ASX tech stock’s shares?

4DMedical is a healthcare technology company that develops imaging software for healthcare providers to analyse airflow through the lungs. It helps identify and treat lung and respiratory diseases ranging from asthma to lung cancer.

The company saw its share price explode in 2025 after its flagship product, CT:VQ, received regulatory approvals. It was quickly implemented and adopted through partnerships and commercial contracts with healthcare organisations.

4DMedical has already signed contracts with hospitals and medical providers, primarily across the US. Stanford University, the University of Miami, Cleveland Clinic and UC San Diego Health have all rolled out the technology at their centres.

In short, 4DMedical moved from a research and development business trialling new technology, to a globally commercial business within a very short period of time.

There is no price-sensitive news out of the company to explain the softening share price in 2026. But after such an enormous price tally in 2025, it’s likely that investors are taking their gains off the table.

What’s next for the company in 2026?

Development and rapid adoption of the company’s technology also mean 4DMedical has smashed its milestone goals. 

In 2026, 4DMedical will focus on accelerating the rollout of its newly FDA-approved CT:VQ imaging product through more strategic partnerships and new contracts. 

Approvals have been secured in Canada and New Zealand. The company is now actively progressing commercialisation plans in Europe and Australia.

This month, 4DMedical was also added to the All Ordinaries Index (ASX: XAO) and the S&P/ASX 300 Index (ASX: XKO).

Is it too late to buy the ASX tech stock, or is there more upside to come?

Despite the strong rally over the past year and the 2026 sell-off, most analysts remain very bullish on the stock’s outlook.

TradingView data shows that two out of three analysts have a strong buy rating on the shares, while one has a strong sell stance on the stock.

The maximum target price is $4.90, implying another 27% upside for investors at the time of writing. 

The post Up over 900%: Is it too late to buy this incredible ASX tech stock? appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies 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 record a modest gain. At the time of writing, the benchmark index is up 0.2% to 8,631.7 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are falling:

Brightstar Resources Ltd (ASX: BTR)

The Brightstar Resources share price is down 4% to 41.7 cents. This appears to have been driven by the gold miner issuing almost 245 million new shares this morning. Last month, Brightstar Resources announced a strategic $180 million capital raising to fund a material increase in production. Brightstar’s managing director, Alex Rovira, said: “To emerge with all the equity funding required to build our Goldfields Hub, as well as a substantial budget that enables accelerated pre-development activities at Sandstone and to fully fund Sandstone to FID, is an amazing opportunity for Brightstar that enables us to maintain the momentum of de-risking our portfolio of advanced gold projects.”

EQ Resources Ltd (ASX: EQR)

The EQ Resources share price is down 6.5% to 29 cents. This is despite the tungsten producer releasing an investor presentation this morning. Within the presentation, management stated: “EQR is one of the largest producers of tungsten outside of restricted countries, with spot-priced offtake agreements in place, supplying Europe, North America and Asian markets.”

Novonix Ltd (ASX: NVX)

The Novonix share price is down almost 5% to 26.2 cents. This has been driven by news that the battery technology company’s NASDAQ-traded shares could be delisted due to its weak share price. It advised: “The notice states that, for the previous 30 consecutive business days, the closing bid price of the Company’s American Depositary Receipts (ADRs) listed on the Nasdaq has been below the minimum requirement of US$1.00 per ADR. In accordance with Nasdaq Listing Rules, the Company has 180 calendar days from the date of the notice to regain compliance (compliance period). To regain compliance, the closing bid price of the Company’s ADR’s must be at least US$1.00 per ADR for a minimum of 10 consecutive business days during the compliance period.”

Pro Medicus Ltd (ASX: PME)

The Pro Medicus share price is down a further 2% to $125.40. This is despite there being no news out of the health imaging technology company. However, Pro Medicus’ shares have been under pressure this year amid concerns over AI disruption. This has seen the Pro Medicus share price lose over 40% of its value since the turn of the year.

The post Why Brightstar, EQ Resources, Novonix, and Pro Medicus shares are falling today appeared first on The Motley Fool Australia.

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Life360 Inc (ASX: 360) shares are charging higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) location-sharing software developer closed yesterday at $18.94. In early afternoon trade on Wednesday, shares are changing hands for $19.55 apiece, up 3.2%.

For some context, the ASX 200 is up 0.2% at this same time.

Despite today’s welcome outperformance, the ASX tech stock remains down a sharp 39.8% since the opening bell sounded on 2 January.

Among the headwinds, Life360 shares have been caught up in the broader tech stock sell-off amid investor concerns that artificial intelligence (AI) could replace many of the services these companies currently offer.

Which brings us back to our headline question.

Should you buy Life360 shares today?

Baker Young’s Toby Grimm recently ran his slide rule over Life360 shares (courtesy of The Bull).

“Life360 is a leading family safety and location sharing platform operating across the US, UK and Australia,” he said.

Life360 released its results for the full 2025 calendar year on 3 March. Commenting on those results, Grimm noted:

The company delivered better-than-expected full year results in 2025, highlighted by subscription revenue increasing 33%. Hardware remains an important long term growth option, as it helps lock users into paid subscriptions.

Despite reporting solid growth metrics for 2025, Life360 shares crashed 17.6% on 3 March.

But Grimm doesn’t believe investors should sell their shares. Explaining his hold recommendation, he concluded:

We believe the magnitude of the recent share price decline has been excessive given the strength across most of Life360’s core subscription business. Accordingly, we remain comfortable holding this high quality, fast growing and profitable company at current levels.

What’s the latest from the ASX 200 tech stock?

As mentioned, Life360 shares plunged a sharp 17.6% on the day the company reported its full-year results.

On top of the 33% year on year lift in revenue to US$489.5 million that Grimm pointed out above, sales came despite the company achieving 105% growth in its adjusted earnings before interest, taxes, depreciation and amortisation EBITDA to US$93.2 million.

Commenting on the results on the day, Life360 CEO Lauren Antonoff said, “For the first time in company history, we achieved annual net income, reflecting both the fundamental strength of our freemium model and the operating discipline we’ve built over the past several years.”

As for the rapid advancement of AI, Antonoff added:

We are deep into the transition to become an AI-first company. Organization-wide active AI adoption has grown to over 95%, accelerating our execution and expanding what’s possible for families on our platform.

We see AI as an opportunity to accelerate our path and deepen our moat. Our core use case is durable because it is anchored in real people moving through the physical world, generating data that further deepens our advantage.

The post Down 40% in 2026, should you buy the big dip in Life360 shares? 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 Life360. The Motley Fool Australia has positions in and has recommended Life360. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

On Tuesday, as was widely expected, the Reserve Bank of Australia (RBA) delivered another blow to mortgage holders by increasing interest rates for the second month in a row.

The central bank lifted the cash rate by 25 basis points to 4.1% at March’s meeting.

The RBA explained:

A wide range of data over recent months have confirmed that inflationary pressures picked up materially in the second half of 2025. While part of the pick-up in inflation is assessed to reflect temporary factors, the Board judged that the labour market has tightened a little recently and capacity pressures are slightly greater than previously assessed. Developments in the Middle East remain highly uncertain, but under a wide range of possible scenarios could add to global and domestic inflation.

In light of these considerations, the Board judged that inflation is likely to remain above target for some time and that the risks have tilted further to the upside, including to inflation expectations. It was therefore appropriate to increase the cash rate target.

What’s next for interest rates?

Last year, the RBA changed its meeting schedule from monthly to eight times a year.

One of the months that doesn’t have a meeting is April, which means the central bank has a bit of time to observe economic data, run its numbers, and ultimately make its decision on where interest rates are going next.

At present, the RBA Rate Indicator, which is based on the ASX 30 Day Interbank Cash Rate Futures May 2026 contract, suggests that there is a good probability of a rate increase at the May meeting.

The RBA Rate Indicator currently sits at 57% in favour of an increase to 4.35%. If this proves accurate, it will mean three meetings in a row of hikes to interest rates, much to the dismay of borrowers.

Will the RBA hike?

Unfortunately, the economics team at Westpac Banking Corp (ASX: WBC) appears to believe that the market is onto something with its prediction.

Australia’s oldest bank believes the RBA will increase interest rates in May, before pausing at 4.35% for the foreseeable future.

Westpac’s senior economist, Mantas Vanagas, commented:

Domestically, focus was on the RBA – as anticipated, the central bank raised the cash rate by 25bp for the second time this year, bringing it to 4.10%. The narrow 5–4 vote in favour of tightening highlighted significant differences of opinion within the Monetary Policy Board, however, Governor Bullock clarified at the press conference that these differences concerned the timing of the hike, not the direction of policy. We continue to expect another interest rate increase in May, though it will likely depend on developments in the Middle East conflict.

After a rate hike in May, Westpac expects rates to stay at 4.35% until late 2027. It then expects rates to fall to 3.6% by March 2028.

The post Why the RBA could increase interest rates again in May 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.

Brainchip Holdings Ltd (ASX: BRN) shares have recouped their earlier intraday losses, trading flat at 14 cents apiece during the Wednesday lunch hour.

This sees shares in the S&P/ASX 300 Index (ASX: XKO) artificial intelligence (AI) stock down about 43% over the past 12 months.

Nuix Ltd (ASX: NXL) shares have had an even tougher year.

Shares in the ASX 300 investigative analytics and intelligence software provider are down 1% at the time of writing, changing hands for $1.53 each. This puts the Nuix share price down 53.5% over 12 months.

For some context, the ASX 300 has gained 9.9% since this time last year.

And if Peak Asset Management’s Niv Dagan has it right, Nuix and Brainchip shares could have further to fall (courtesy of The Bull).

Time to sell Brainchip shares?

“Brainchip is a commercial producer of neuromorphic artificial intelligence (AI),” said Dagan, who has a sell recommendation on Brainchip shares.

If you’re not familiar with what that means, the company’s neuromorphic processor, Akida, is intended to mimic the human brain and keep machine learning local to the chip, independent of the cloud.

“The company operates across Australia, the US and Europe and had a market capitalisation of about $349.17 million during trading on March 12,” Dagan said.

Explaining his sell recommendation, Dagan said:

The broader AI hardware landscape is increasingly dominated by big players, such as Nvidia. The AI sector is intensively competitive. The company substantially lifted revenue in full year 2025 but reported a loss from continuing operations after tax.

Full-year revenue of US$1.9 million was up 374% from 2024. The loss from continuing operations came in at US$20.4 million.

“Brainchip shares have fallen from 24.5 cents on October 9, 2025, to trade at 14 cents on March 12. Other stocks appeal more at this stage of the cycle,” Dagan concluded.

Also on the selling block

Apart from Brainchip shares, Dagan also recommends selling Nuix.

“Nuix is an investigative analytics software provider,” he said. “It enables customers to process and search large data sets of unstructured information, including emails, documents and communications records.”

Despite the sizeable one-year losses, Nuix shares are up 12.1% since the company reported its half-year results on 23 February.

Which could make today a good day to think about taking some profits, according to Dagan. He noted:

The company earns most of its revenue from licence and maintenance fees. Revenue of $121.2 million in the first half of fiscal year 2026 was up 15.2% on the prior corresponding period. Annualised contract value of $234.4 million was up 8.4%.

Investors may want to consider taking a profit as we believe gains are priced in following the half year result. We see limited scope for upside amid increasing competition.

The post Sell alert! Why this expert is calling time on Nuix and Brainchip shares appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Nuix. 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 on track to record a small gain on Wednesday. In afternoon trade, the benchmark index is up 0.2% to 8,629.7 points.

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

Electro Optic Systems Holdings Ltd (ASX: EOS)

The EOS share price is up 7% to $9.52. Investors have been buying this defence and space company’s shares after a major sell-off on Tuesday. That sell-off was triggered by news that the company’s CEO, Dr Andreas Schwer, was given approval to sell 2.5 million EOS shares on-market following the exercise of options that were granted under a long-term incentive plan. Some investors may believe the selling was an overreaction, especially after its CEO committed to retain a shareholding well above the minimum levels required under its recently announced shareholding policy.

Humm Group Ltd (ASX: HUM)

The Humm share price is up 5.5% to 69.2 cents. This is despite the financial services company revealing that the Takeovers Panel made a declaration of unacceptable circumstances. It said: “[T]he Panel considered that the following statements in Humm’s 17 December 2025 announcement of the conditional, non-binding indicative offer from Credit Corp Group Limited (Credit Corp) to acquire control of Humm (Credit Corp Proposal) were misleading and contrary to an efficient, competitive and informed market.” The Panel advised that it is still considering whether it should make final orders.

New Hope Corporation Ltd (ASX: NHC)

The New Hope share price is up 6% to $5.27. This may have been driven by a broker note out of Bell Potter this morning. In response to its half-year results, Bell Potter has upgraded the coal miner’s shares to a hold rating with a $4.50 price target. It said: “We upgrade to a Hold recommendation and apply a 5% premium to our sum of the parts valuation with energy security concerns exacerbated by recent geopolitical issues. NHC’s low-cost operations will continue to underpin margins through the coal price cycle, funding capital expenditure commitments and supporting shareholder returns.”

Sims Ltd (ASX: SGM)

The Sims share price is up 8% to $20.37. This morning, this global leader in metal recycling and the provision of circular solutions for technology released a trading update. Sims revealed that it expects FY 2026 underlying EBIT to be in the range of $350 million to $400 million. This will be at least double the underlying EBIT of $174.9 million that the company reported in FY 2025.

The post Why EOS, Humm, New Hope, and Sims shares are storming higher today 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 positions in and has recommended Electro Optic Systems. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

There are many exchange-traded funds (ETFs) on the ASX for Australian investors to choose from.

If I were putting money into the market today, these are a few Vanguard ETFs I’d be happy to buy for my portfolio.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

The VGS ETF could be a great pick for Australian investors wanting global exposure.

It provides access to a wide range of developed-market companies, particularly in the United States, but also across Europe and other major economies.

What I like about it is that it captures many of the world’s most dominant businesses in one place. These are companies with global reach, strong margins, and the ability to keep growing regardless of what’s happening in any single country.

Rather than trying to pick which global winners will outperform, this ETF lets you own a broad slice of them.

It also reduces reliance on the Australian market, which traditionally is heavily concentrated in banks and miners. And while that concentration is good when the banks and miners are charging higher, it can be bad when the cycle turns. As a result, the VGS ETF’s diversification alone could make it a valuable building block in a portfolio.

Vanguard FTSE Asia Ex-Japan Shares Index ETF (ASX: VAE)

The VAE ETF adds an entirely different dimension.

It provides exposure to some of the world’s fastest-growing economies. This includes countries like China, India, and Taiwan.

These markets don’t always move in line with the US or Australia. That can create periods of volatility, but it also opens the door to growth that isn’t available in more mature economies.

What stands out to me is the long-term story. Rising middle classes, increasing digital adoption, and ongoing industrial development are powerful forces that could drive growth for many years.

It’s not the smoothest ride, but that’s part of the trade-off when investing in developing regions.

Vanguard Diversified High Growth Index ETF (ASX: VDHG)

Lastly, the VDHG ETF also takes a different approach.

Instead of targeting a specific region, it bundles together a diversified portfolio of growth assets, including Australian shares and international equities.

To me, this is one of the simplest ways to invest.

It’s essentially a ready-made portfolio that is designed for long-term growth. There’s no need to constantly rebalance or decide how much to allocate to each market. That’s handled within the fund.

What I find appealing is how it combines convenience with diversification. For investors who don’t want to spend time managing multiple positions, it offers a straightforward way to stay invested in global growth.

Foolish Takeaway

I think ETFs are one of the easiest ways to invest in the market. But with so much choice, it can be hard to decide which funds to buy.

The VGS, VAE, and VDHG ETFs each offer a slightly different way to invest, but all provide broad exposure and long-term growth potential.

For me, they’re simple options I’d be happy to buy and hold.

The post Why I’d buy VGS and these Vanguard ETFs right now appeared first on The Motley Fool Australia.

More reading

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Motley Fool contributor Grace Alvino 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 Vanguard Msci Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Perpetual Ltd (ASX: PPT) had some big news this week, announcing the sale of its wealth management business to Bain Capital Private Equity for $500 million.

The analyst team at Macquarie have run the ruler over the sale, and has upgraded their price target for Perpetual shares as a result.

Major deal

We’ll get to that later; let’s first look at what was announced.

Perpetual will sell the Perpetual Wealth business to Bain for $500 million, plus a potential $50 million payment depending on the performance of the business.

Perpetual Chief Executive Officer Bernard Reilly said regarding the sale:

Following a thorough sale process, we believe we have achieved the right outcome for our shareholders, clients and people, and one that reflects Wealth Management’s longstanding reputation as a premium provider of high net worth advisory, fiduciary, philanthropic and not-for-profit offerings in the Australian market. “This is a pivotal step in our strategy to simplify and transform Perpetual. Following completion, Perpetual will have a stronger balance sheet and more simplified business, focused on two core businesses, asset management and corporate trustee services, while also enhancing its ability to invest for future growth and deliver improved shareholder returns over the longer term. We believe we have found the right owner for the Wealth Management business to help it continue to grow and deliver high quality products and services to its clients.

The money raised will be used to retire debt and support investment in Perpetual’s asset management and corporate trust divisions.

Perpetual shares looking cheap

The Macquarie team said the sale, which followed a 12-month process, was conducted at a multiple which appeared reasonable.

They noted that Perpetual must overcome several regulatory hurdles to complete the transaction and that separating the wealth business would be complex.

They added:

However, Perpetual expects no ‘material’ stranded costs post-completion, reflecting an effective carve-out while generating revenue to offset any lingering costs during this process.

Macquarie raised its price target on Perpetual from $23.85 to $24.60 on the back of the deal. This compares to Perpetual’s current share price of $16.02.

They added:

Despite continued outflows, we reiterate our Outperform rating, with the Wealth sale to simplify the business and unwind some of the some of the parts discount, while we see scope for further cost out above current plans with Perpetual’s cost-to-income ahead of global peers.  

Perpetual is also expected to pay a 7% dividend yield this financial year. Perpetual was valued at $1.86 billion at the close of trade on Wednesday.   

The post How high does Macquarie think this ASX 200 stock will go after its wealth sale? appeared first on The Motley Fool Australia.

More reading

• Why Lifestyle Communities, Perpetual, Reliance Worldwide, and Woodside shares are rising today
• This ASX financial stock just struck a $500 million deal
• Perpetual sells Wealth Management business to Bain Capital for $500m
• 32 ASX shares about to go ex-dividend
• Perpetual posts higher earnings and tight cost control for 1H26

Motley Fool contributor Cameron England 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 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.