Category: Stock Market

Some ASX tech shares delivered huge returns in FY24, with triple-digit percentage gains. Given that the All Ordinaries (ASX: XAO) climbed by 8.3% during FY24, these All Ords tech stocks did remarkably well.

Some industries have advantages when it comes to growth, and tech may be the most advantaged of all. Many companies within the sector offer software that can achieve strong profit margins because of the software’s intangible nature. They also may be able to deliver strong revenue growth because software can be instantly replicated, whereas physical goods require manufacturing, shipping, and storage.  

Below are three of the best-performing ASX tech shares in FY24 within the All Ords. As always, remember that past performance is not a guarantee of future performance.

Gentrack Group Ltd (ASX: GTK)

Over the 12 months to 30 June 2024, Gentrack shares rose by 140%. It’s important to note Gentrack’s 2024 financial year finishes on 30 September 2024, there are still a few months to go.

Gentrack provides software to energy and water utility companies, as well as airports.

The company is benefiting from a return passenger volume to airports, with the airports spending on projects and improvements. Gentrack is also winning customers and seeing customers upgrade.

In the recent FY24 first-half result, Gentrack reported revenue growth of 21% to $102 million and also upgraded its guidance. For FY24, it previously expected revenue of at least $170 million, and now its guidance is around $200 million of revenue for the current financial year.

The company also upgraded its earnings before interest, tax, depreciation and amortisation (EBITDA) guidance range to between $23.5 million and $26.5 million, up from the previous range of between $20.5 million and $25.5 million.

DUG Technology Ltd (ASX: DUG)

In the 12 months to 30 June 2024, DUG Technology shares rose by 136%.

This company specialises in “analytical software development, big-data services and reliable, green, high-performance computing (HPC)”.

The market usually pays the most attention to a company’s most recent update. For the FY24 third quarter, the ASX tech share’s total revenue grew 39% year over year to US$17.6 million, and EBITDA rose 24% to US$4.6 million.

DUG Technology also reported US$14.6 million of new service projects were awarded in the three months to 31 March 2024, taking the total services order book at 31 March 2024 to US$43.1 million, an increase of 6% compared to 31 December 2023.

In addition, the company revealed plans to start a new business unit in the Middle East after unearthing a “great deal of opportunity” in Abu Dhabi.

Bravura Solutions Ltd (ASX: BVS)

The Bravura Solutions share price has soared 130% in the 12 months to 30 June 2024.

Bravura describes itself as a leading provider of software solutions for the wealth management, life insurance and funds administration industries.

The ASX tech share reported growth and a recovery in the FY24 first-half result, which showed revenue increased 7.4% to $127 million. EBITDA grew 11.5% to $7.9 million and cash EBITDA returned to profitability with $0.3 million of positive cash EBITDA generation. Adjusted net profit after tax (NPAT) rose $12.6 million to a loss of $1.7 million.

Bravura is forecasting that FY24 revenue to be around the same as FY23, while its transformation plan is now expected to deliver $40 million in gross cost-out savings.

The post 3 best ASX tech shares of FY24 appeared first on The Motley Fool Australia.

More reading

• Bell Potter names the best ASX tech stocks to buy in FY25
• 3 of the best growth-focused ASX shares to buy in June
• This fund returned 30% per annum for 3 years. Here are the ASX shares it’s buying now.

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 Bravura Solutions, Dug Technology, and Gentrack Group. The Motley Fool Australia has positions in and has recommended Gentrack Group. The Motley Fool Australia has recommended Dug Technology. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Adairs Ltd (ASX: ADH) share price has sunk 60% since June 2021 and is almost 30% lower since March 2024.

With such a massive fall over the past few years, could the ASX dividend stock be capable of providing solid passive income?

When a share price falls, it can increase the prospective dividend yield. For example, if a company had a share price of $10 and paid a dividend per share of 60 cents, it’d have a dividend yield of 6%. If the share price fell 50% to $5, and the dividend payment was still 60 cents per share, the dividend yield would become 12%.

However, it’s common for a dividend payment to be reduced during a period of heavy share price decline because the sinking valuation is a sign that profits are under pressure.

But, it’s still possible to find cyclical ASX dividend stocks that can deliver recovering profit and a resurgent dividend.

Adairs may be one of those cyclical businesses that could recover over the next couple of years.

Is recovery on the way?

The trading environment for discretionary ASX retail shares has been tough, with many households having less money to spend amid this inflationary environment. Expensive mortgages and soaring rent have certainly made things challenging for the retail sector.

The company’s latest earnings results did not indicate booming trading conditions. In February, Adairs said it continued to see “significantly lower” customer traffic than the same period last year. Consumers remained “value-orientated, with conversion declining notably when offers are reduced”.

In weeks 27 to 34 of FY24, group sales were down 9.6% year over year, with Adairs sales down 9.5%, Focus on Furniture sales down 14.1%, and Mocka sales up 4%.

However, there were some silver linings. Due to the material decline in sales that occurred in May 2023, Adairs management expects that the group’s comparative sales performance will improve across the second half of FY24. It’s also focused on managing the gross profit margin, which was up 200 basis points (2.00%) year over year.

Adairs expects trading to remain subdued, but initiatives could help profit recover, such as its product range, supply chain improvements, the Adairs-operated national distribution centre, cost of doing business (CODB) management and a store rollout.

The broker UBS suggests Adairs could generate net profit after tax (NPAT) of $36 million in FY24, $44 million in FY25 (up 22%) and $52 million in FY26 (up 18%).

Large dividends predicted

UBS has forecast that Adairs could pay an annual dividend per share of 18 cents in FY25, which would be a grossed-up dividend yield of 14%.

The broker has suggested Adairs could then pay an annual dividend per share of 21 cents per share in FY26 — a grossed-up dividend yield of 16%.

Dividends are not guaranteed, but if the company can reset its profitability, it could be a significant dividend payer in the coming years. However, it can’t be ruled out that tough trading conditions could continue throughout FY25.

The post 1 ASX dividend stock to buy that’s down 60% 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 Adairs. The Motley Fool Australia has positions in and has recommended Adairs. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Vanguard Australian Shares High Yield ETF (ASX: VHY) may be best known for its high level of passive income. But there’s more to consider about the ASX exchange-traded fund (ETF) than that.

ETFs pass on the dividends they receive to their shareholders, so the higher the dividend yield from an underlying holding, the stronger the yield collected by the EFT.

This is why the VHY ETF focuses on ASX stocks with a high dividend yield, investing in companies that have “higher forecast dividends relative to other ASX-listed companies.”

It achieves diversification by (regularly) restricting the proportion invested in any one industry to 40% of the total ETF and 10% in any one company. Australian real estate investment trusts (REITs) are excluded from the fund.

Which ASX shares are in the VHY ETF portfolio?

The largest positions in the portfolio are some of the biggest companies on the ASX.

At the end of May 2024, these were the biggest weightings in descending order:

• Commonwealth Bank of Australia (ASX: CBA)
• BHP Group Ltd (ASX: BHP)
• National Australia Bank Ltd (ASX: NAB)
• Wesfarmers Ltd (ASX: WES)
• Westpac Banking Corp (ASX: WBC)
• ANZ Group Holdings Ltd (ASX: ANZ)
• Woodside Energy Group Ltd (ASX: WDS)
• Macquarie Group Ltd (ASX: MQG)
• Rio Tinto Ltd (ASX: RIO)
• Telstra Group Ltd (ASX: TLS)

Looking at the overall portfolio’s balance, more than 60% of the sector allocation is to financial and mining shares, with weightings of 42.8% and 21.3%, respectively. ASX energy shares have a 10.4% position in the portfolio. These sectors typically have high dividend yields.  

Vanguard Australian Shares High Yield ETF dividend yield

This fund will undoubtedly produce a high level of passive dividend income each year. But how much?

Each ASX position in the portfolio influences the overall yield of the VHY ETF. Vanguard uses forecast dividend figures from Factset to tell investors the fund’s overall forecast yield.

According to the fund’s monthly update for May 2024, the Vanguard Australian Shares High Yield ETF has a forecast partially franked dividend yield of 4.9% and a forecast grossed-up dividend yield of 6.6%.  

Is this fund a good long-term buy?

For investors entirely focused on passive dividend income, I think it can be an effective option. Its annual management fee is only 0.25%.

However, I believe almost everyone should want to see earnings growth and capital growth from their invested businesses.

The sectors that the VHY ETF is invested in are typically slower-growing, compared to technology for example. To have a high dividend yield, businesses typically pay out a lot of their profit, so they do not retain much profit to reinvest for growth. This dynamic has resulted in the Vanguard Australian Shares High Yield ETF producing little capital growth.

In the last three years, the VHY ETF has returned an average of 8.8% per annum, but only 3% per annum of that was capital growth. In the past 10 years, it has returned an average of 6.9% per annum and the capital growth has been a paltry 0.6% per annum.

This ETF can provide good cash flow. However, it may be useful to invest in other ASX ETFs that focus on globally growing businesses, which can produce stronger overall returns due to their earnings and capital growth.

Examples of global ETFs include Vanguard MSCI Index International Shares ETF (ASX: VGS) and VanEck MSCI International Quality ETF (ASX: QUAL), which have track records of total long-term returns of more than 10% per annum. However, past performance is not a guarantee of future performance.

The post Is the Vanguard Australian Shares High Yield ETF (VHY) a good long-term buy? appeared first on The Motley Fool Australia.

More reading

• Want the latest Vanguard Australian Shares Index ETF dividend? Here’s what to do
• Buy these ASX ETFs in July for passive income
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• Top ASX passive income shares to buy before June 30
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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 Macquarie Group and Wesfarmers. The Motley Fool Australia has positions in and has recommended Macquarie Group, Telstra Group, and Wesfarmers. The Motley Fool Australia has recommended Vanguard Australian Shares High Yield ETF and 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.

Information technology shares and financial stocks were the best performers among the 11 market sectors comprising the S&P/ASX 200 Index (ASX: XJO) in FY24.

The S&P/ASX 200 Information Technology Index (ASX: XIJ) rose by 27.99%, and the S&P/ASX 200 Financials Index (ASX: XFJ) ascended 23.11%, in FY24.

The laggards among the sectors were consumer staples and materials shares. This may be surprising given staples are usually defensive during periods of high inflation.

Materials shares were affected by mixed commodity price performances, with silver, gold, and copper rising strongly over the financial year while iron ore was volatile and lithium tanked.

The S&P/ASX 200 Consumer Staples Index (ASX: XSJ) tumbled 6.89% and the S&P/ASX 200 Materials Index (ASX: XMJ) fell 6.4% in FY24.

Let’s delve deeper.

Technology led the market sectors in FY24

Overall, the S&P/ASX 200 Index (ASX: XJO) booked a 7.83% gain over the FY24 trading year.

The index rose from 7,203.3 points on 30 June 2023 to 7,767.5 points last Friday.

As the chart below shows, the ASX 200 gradually fell over the first four months of FY24. Then, in early November, an early Santa Rally began amid speculation that interest rates would be cut in 2024.

The ASX 200 was volatile after reaching a record 7,910.5 points on 2 April. Hope for potential rate cuts faded over the next three months as inflation proved stickier than expected.

Why did technology lead the ASX market sectors?

The hype around artificial intelligence (AI) and its potential to meaningfully move the dial on global productivity growth after many sluggish years is certainly a factor in this sector’s success.

US semiconductor company NVIDIA Corp was the poster child of global AI stocks in FY24.

Nvidia stock rose by close to 200% in FY24 and is up 2,900% over five years. Such is the excitement over AI and its potential to spur innovation in businesses across many market sectors in the future.

The technology-dominated NASDAQ Composite Index, where Nvidia and its fellow Magnificent Seven stocks live, outperformed the S&P 500 in FY24, and AI was a driving factor in its approximate 30% surge.

This enthusiasm rubbed off on ASX tech shares in FY24, especially those most closely connected to the AI tailwind.

The CEO of data centre-as-a-service operator Nextdc Ltd (ASX: NXT), Craig Scroggie, described AI as “the fourth industrial revolution” in a recent interview published on asx.com.au.

Scroggie said:

It is significantly shaping the data centre industry, particularly in environments where AI workloads are managed, whether for training or inference purposes.

Although the full impact of AI on the Australian market is still unfolding, the trends observed globally, specifically in the US, combined with our active engagements with global customers, suggest a massive increase in demand for data centre services driven by AI applications. 

The NextDC share price ascended 41.72% in FY24 to close at $17.63 per share on Friday. It was the sixth-best performer for price growth among ASX 200 technology shares in FY24.

5 best ASX 200 shares of the tech sector in FY24

The tech sector’s top performer in FY24 was social networking app provider Life360 Inc (ASX: 360).

Life 360 shares rose 122.72% over FY24 to close at $16.37 last Friday.

Here are the others making up the top 5 ASX 200 tech stocks for share price growth in FY24.

Rank	ASX 200 technology stock	Share price on Friday	FY24 growth
1	Life360 Inc (ASX: 360)	$16.37	122.72%
2	Altium Ltd (ASX: ALU)	$68.03	84.26%
3	Megaport Ltd (ASX: MP1)	$11.22	55.4%
4	Codan Ltd (ASX: CDA)	$12.03	49.81%
5	Macquarie Technology Group Ltd (ASX: MAQ)	$94.57	38.42%

The post Leaders and laggards of the ASX market sectors in FY24 appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• 3 fantastic ASX growth shares to buy in July
• Here’s how the ASX 200 market sectors stacked up last week
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• $20,000 invested in NextDC and these ASX shares 10 years ago is worth how much?

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium, Life360, Megaport, and Nvidia. The Motley Fool Australia has recommended Megaport and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Income investors have a lot of options on the Australian share market. So much so, it can be hard to decide which ASX income shares to buy above others.

But don’t worry, to narrow things down for you, listed below you will find three options with good dividend yields that are rated highly by analysts. Here’s what they are saying about these shares:

GDI Property Group Ltd (ASX: GDI)

Bell Potter is tipping this property company as an ASX income share to buy.

Its analysts highlight “GDI calling out that following recent leasing success it sees much higher Property FFO on a LFL basis in FY25.”

The broker believes this leaves GDI Property well-positioned to pay some big dividends in the coming years. It is forecasting dividends per share of 5 cents across FY 2024, FY 2025, and FY 2026. Based on the current GDI Property share price of 56 cents, this implies dividend yields of 8.9% for the next three financial years.

It has a buy rating and 75 cents price target on its shares.

SRG Global Ltd (ASX: SRG)

Bell Potter also thinks that SRG Global could be an ASX income share to buy right now.

It is a diversified industrial services group that provides multidisciplinary construction, maintenance, production drilling and geotechnical services.

The broker believes “SRG’s short-to-medium term outlook is reinforced by Government-stimulated construction activity in the Infrastructure and Non-Residential sectors and increased development and sustaining capital expenditures in the Resources industry.”

It expects this to underpin fully franked dividends of 4.7 cents in FY 2024 and then 6.7 cents in FY 2025. Based on its current share price of 84 cents, this will mean dividend yields of 5.6% and 8%, respectively.

Bell Potter has a buy rating and $1.30 price target on its shares.

Super Retail Group Ltd (ASX: SUL)

Over at Goldman Sachs, its analysts think that Super Retail could be an ASX income share to buy right now. It is retail company behind popular store brands BCF, Macpac, Rebel, and Super Cheap Auto.

Its analysts “believe SUL will display resilience in a softer economic environment that is built upon its competitive advantage of high loyalty (~11.0m active members accounting for >75% of sales) and this will be further bolstered as the company launches the Rebel loyalty program and continues to build personalisation capabilities.”

Goldman is expecting the retailer to offer attractive dividend yields in the near term. It is forecasting fully franked dividends per share of 67 cents in FY 2024 and then 73 cents in FY 2025. Based on the latest Super Retail share price of $13.95, this will mean good yields of 4.8% and 5.2%, respectively.

The broker currently has a buy rating and $17.80 price target on its shares.

The post 3 ASX income shares to buy this month appeared first on The Motley Fool Australia.

More reading

• Bell Potter names the best ASX real estate shares to buy in FY25
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• Here are the top 10 ASX 200 shares today
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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 Goldman Sachs Group and Super Retail Group. The Motley Fool Australia has positions in and has recommended Super Retail Group. The Motley Fool Australia has recommended Srg Global. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Investors that are on the lookout for big gains and a generous dividend yield may want to check out the ASX 200 stock in this article.

That’s because analysts at Bell Potter think this dividend-payer could be undervalued by the market.

Which ASX 200 stock?

The stock in question is Inghams Group Ltd (ASX: ING). It is the largest integrated poultry producer across Australia and New Zealand.

According to the note, the broker has been looking at industry data and feels it is supportive of its forecasts and its bullish view.

In respect to feed cost indicators, the broker said:

Since our Mar’24 update feed pricing indicators have been volatile, with a 7-9% firming. In light of ING’s forward purchasing arrangements, we see FY25e feed cost indicators (CY24TD pricing flows into FY25e assumptions) down an implied -12% relative FY24e levels. Note that the spot feed index is broadly consistent with the CY24TD average. With ABARE and CSIRO Wheatcast models favouring an above average yield outcome for the 2024-25 harvest, we would see the reversion to negative basis as a potential tailwind for ING in 2H25-1H26e.

Together with other factors, Bell Potter has trimmed its profit forecast for this year but boosted its medium term estimates. It explains:

We have reviewed our forecasts and updated them for channel mix, feed cost indicators, FX, interest rate movements and inflation data in ING core markets. The net impact is NPATL changes of -3% in FY24e, unchanged in FY25e and +4% in FY26e.

Big returns

In light of the above, Bell Potter has retained its buy rating and $4.35 price target on the ASX 200 stock.

Based on its current share price of $3.62, this implies potential upside of 20% for investors over the next 12 months.

In addition, the broker is forecasting fully franked dividends per share of 23 cents in FY 2024 and 24 cents in FY 2025. This equates to 6.35% and 6.6% dividend yields, respectively.

Bell Potter believes recent avian flu related share price weakness has created a buying opportunity. It said:

The ING share price has retraced ~10% following the discovery of avian flu in the Golden Plains and in NSW. While it may serve as a reminder of the inherent agricultural risks facing free range operations it has at this time had no impact on the ING business. We see the current weakness as a buying opportunity, noting similar bio risks in the almond industry (varroa mite) has had limited lasting impact on SHV. Feed cost indicators remain lower than a year ago and if 2024-25 crops develop as projected then this will likely emerge as a key earnings driver in 2H25-1H26e.

The post Buy this ASX 200 stock for 20% upside and a 6% dividend yield 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.

At the start of each week, I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Pilbara Minerals Ltd (ASX: PLS) is still the most shorted ASX share with short interest of 20.7%. This is down slightly week on week. Short sellers appear to believe that lithium prices will remain at low levels for years.
• IDP Education Ltd (ASX: IEL) has 13.3% of its shares held short, which is down slightly week on week. This language testing and student placement company has warned that student visa changes in a number of key markets are going to weigh on its near term performance.
• Liontown Resources Ltd (ASX: LTR) has 11.4% of its share held short, which is up week on week again. This lithium developer’s shares lost almost 70% of their value in FY24. Short sellers appear to believe they can fall further.
• Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest rebound to 10.3%. Concerns over weak consumer spending and revenue margin headwinds could be behind this.
• Sayona Mining Ltd (ASX: SYA) has short interest of 9.9%, which is up since last week. This lithium miner is currently paying more to produce lithium than it receives from buyers.
• Syrah Resources Ltd (ASX: SYR) has short interest of 9.7%, which is down week on week. This graphite miner is currently battling production suspensions and further cash burn due to weak battery material prices.
• Chalice Mining Ltd (ASX: CHN) has short interest of 9.7%, which is up week on week. Short sellers aren’t letting up on this mineral exploration company’s shares despite them being down almost 80% over the last 12 months.
• Westgold Resources Ltd (ASX: WGX) has short interest of 9.3%, which is down sharply week on week. This short interest may be due to doubts over the gold miner’s proposed merger with Canada-based Karoa Resources.
• Australian Clinical Labs Ltd (ASX: ACL) has short interest of 9.2%, which is up since last week. This health imaging company warned that is expecting to report another sizeable decline in profits in FY 2024.
• Lynas Rare Earths Ltd (ASX: LYC) is a new entry in the top ten with short interest of 8.5%. Weak rare earths prices are likely to be why short sellers are targeting the miner.

The post These are the 10 most shorted ASX shares appeared first on The Motley Fool Australia.

More reading

• 3 fantastic ASX growth shares to buy in July
• These were the five worst ASX 200 shares to own in FY24
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• Here are the top 10 ASX 200 shares today
• These were 3 of the worst-performing ASX 200 stocks in June. Time to buy the dip?

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 Idp Education. The Motley Fool Australia has recommended Flight Centre Travel Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Fortunately for income investors, there are plenty of ASX dividend shares for them to choose from on the Australian share market.

But which ones could be top options for investors in July?

Let’s take a look at four top dividend shares that analysts are tipping as buys. They are as follows:

APA Group (ASX: APA)

APA Group could be an ASX dividend share to buy. It is an energy infrastructure company that owns, manages, and operates a portfolio of gas, electricity, solar and wind assets.

Macquarie sees its shares as a buy. The broker currently has an outperform rating and $9.40 price target on them.

As for dividends, the broker is forecasting dividends per share of 56 cents in FY 2024 and 57.5 cents in FY 2025. Based on the current APA Group share price of $7.99, this equates to 7% and 7.2% dividend yields, respectively.

Charter Hall Retail REIT (ASX: CQR)

Citi thinks that the Charter Hall Retail REIT could be an ASX dividend share to buy. It is a property company focusing on supermarket-anchored neighbourhood and sub-regional shopping centres.

The broker has a buy rating and $4.00 price target on its shares.

Citi expects inflation-linked rental increases to underpin dividends of 28 cents per share in both FY 2024 and FY 2025. Based on the current Charter Hall Retail REIT share price of $3.25, this will mean very large yields of 8.6%.

Rio Tinto Ltd (ASX: RIO)

Analysts at Goldman Sachs think Rio Tinto could be a top option for income investors. It likes the mining giant due to its “compelling relative valuation” and its forecast for “strong production growth in 2024 & 2025.”

The broker has a buy rating and $138.90 price target on the miner’s shares.

Goldman expects fully franked dividends per share of US$4.29 (A$6.41) in FY 2024 and then US$4.55 (A$6.80) in FY 2025. Based on the latest Rio Tinto share price of $119.00, this will mean yields of approximately 5.4% and 5.7%, respectively.

Universal Store Holdings Ltd (ASX: UNI)

A final ASX dividend share that could be a buy in July is youth fashion retailer Universal Store.

Bell Potter is feeling bullish about the company and recently put a buy rating and $6.15 price target on its shares.

It is forecasting fully franked dividends per share of 24 cents in FY 2024 and then 31 cents in FY 2025. Based on its current share price of $4.97, this will mean yields of 4.8% and 6.2%, respectively.

The post Buy Rio Tinto and these ASX dividend shares in July appeared first on The Motley Fool Australia.

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Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor James Mickleboro has positions in Universal Store. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Macquarie Group. The Motley Fool Australia has positions in and has recommended Apa Group and Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

On Friday, the S&P/ASX 200 Index (ASX: XJO) finished the week on a relatively positive note. The benchmark index rose 0.1% to 7,767.5 points.

Will the market be able to build on this on Monday? Here are five things to watch:

ASX 200 expected to fall

The Australian share market looks set to fall on Monday following a poor finish on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 35 points or 0.45% lower. In the United States, the Dow Jones was down 0.1%, the S&P 500 was 0.4% lower, and the Nasdaq dropped 0.7%.

Oil prices soften

It looks like ASX 200 energy shares Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) could have a subdued start to the week after oil prices softened on Friday. According to Bloomberg, the WTI crude oil price was down 0.25% to US$81.54 a barrel and the Brent crude oil price was down 0.3% to US$85.00 a barrel. This couldn’t stop US crude oil from recording its third weekly gain amid rising tensions in the Middle East.

Buy TechnologyOne shares

Goldman Sachs thinks that TechnologyOne Ltd (ASX: TNE) shares are in the buy zone right now. After looking at the enterprise software provider’s opportunity in the UK market, the broker has reiterated its buy rating with an improved price target of $19.70 (from $18.85). It said: “The UK addressable market is 2-3x ANZ, with minimal current penetration (<1% wallet share) and a similar competitive dynamic to ANZ, creating a significant long-term growth runway for TNE.”

Gold price edges higher

It could be a relatively positive start to the week for ASX 200 gold shares including Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) after the gold price edged higher on Friday. According to CNBC, the spot gold price was up 0.1% to US$2,339.6 an ounce. This was driven by rate cut optimism after US inflation came in as expected.

IGO’s lithium dividend

IGO Ltd (ASX: IGO) shares will be on watch today after the battery materials miner released an update on its lithium business. According to the release, the company has received $159.3 million in dividend payments from Tianqi Lithium Energy Australia (TLEA) for the June 2024 quarter. This brings total dividends received from TLEA during FY 2024 to $761.4 million. IGO CEO, Ivan Vella, commented: “The substantial dividend IGO has received from TLEA during FY24, during a period of heightened market volatility and complexity, is testament to the value our lithium business can generate through the cycle.”

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

More reading

• 3 fantastic ASX growth shares to buy in July
• Retirement planning guide: 710,000 Aussies to retire over next 5 years
• These were the five worst ASX 200 shares to own in FY24
• Here’s how the ASX 200 market sectors stacked up last week
• These were the best performing ASX 200 shares in June

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

Happy new financial year!

If, like many investors, you took the end of FY24 as an opportunity to shake up your ASX share portfolio, you may now be looking to fill some holes in it.

Whether you cashed in some gains, offloaded a loser or two, or are simply looking to further diversify, right now could be the perfect time to usher in a few new investments.

We asked our Foolish writers which ASX shares they think deserve pride of place in your portfolio in FY25 and beyond.

Here is what they came up with:

7 best ASX shares for July 2024 (smallest to largest)

• Betashares Global Uranium ETF (ASX: URNM), $130.96 million
• Step One Clothing Ltd (ASX: STP), $253.92 million
• PWR Holdings Ltd (ASX: PWH), $1.10 billion
• Corporate Travel Management Ltd (ASX: CTD), $1.94 billion
• Betashares Nasdaq 100 ETF (ASX: NDQ), $4.95 billion
• Transurban Group (ASX: TCL), $38.34 billion
• ResMed Inc (ASX: RMD), $42.75 billion

(Market capitalisations as of market close 28 June 2024).

Why our Foolish writers love these ASX stocks

Betashares Global Uranium ETF

What it does: URNM is intended to track the performance of a basket of Australian and international uranium miners. The ETF provides instant diversification with exposure to 38 leading uranium producers across the globe.

By Bernd Struben: I believe the nuclear renaissance sweeping across the world is still in its early days. If that proves true, then this uranium-focused ASX ETF is well-placed for long-term outperformance.

Aussie investors will recognise two of URNM’s top 10 holdings: Paladin Energy Ltd (ASX: PDN) and Boss Energy Ltd (ASX: BOE).

Over the past 12 months, the Betashares Global Uranium ETF has gained more than 54%. With shares having slipped 15% since late May, this could be an opportune entry point. The ETF paid out 40 cents per share in unfranked dividends in 2023.

Furthermore, it was only in December that 22 nations – including the United States, Japan, and France – pledged to triple their nuclear power capacity by 2050. And the US Government recently said it would invest up to US$900 million to accelerate the development of nuclear energy.

As with most commodities, it takes a lot of time to bring new uranium mines into production. And with demand looking like it will keep rising sharply, I expect uranium supplies will be playing catchup for some years yet.

Motley Fool contributor Bernd Struben does not own units of the Betashares Global Uranium ETF.

Step One Clothing Ltd

What it does: Step One Clothing is a direct-to-consumer online retailer of underwear. According to the company, it offers “high quality, organically grown and certified, sustainable, and ethically manufactured innerwear”. It has a presence in Australia, the United Kingdom, and the United States.

By Tristan Harrison: The Step One Clothing share price has dropped by around 25% since 12 April 2024, making it look pretty cheap to me.

The business is gaining traction across its core markets – in the FY24 first-half period, total revenue rose 25.5% to $45 million, with 8.9% growth in Australia, 38% growth in the UK, and 256% growth in the US.

The HY24 result also delivered rising profit margins, which is a great sign for future profit growth as revenue builds. The company’s gross profit margin increased 0.5 percentage points to 81.2% and its earnings before interest, tax, depreciation, and amortisation (EBITDA) margin increased 1.7 percentage points to 22.5%. Net profit after tax (NPAT) rose by 34.7% to $7.1 million.

If Step One can grow its presence in the UK and the US, including expanding the distribution of its women’s lines, then I think the company’s future is very bright.

According to Commsec estimates, the Step One share price is valued at 21x FY25’s estimated earnings and it could pay a grossed-up dividend yield of 6.6% in that year. 

Motley Fool contributor Tristan Harrison does not own shares of Step One Clothing Ltd. 

PWR Holdings Ltd

What it does: PWR Holdings is a leading provider of advanced cooling solutions for motorsports and automotive industries worldwide.

By Kate Lee: PWR Holdings ticks many boxes for me, as I recently covered here. 

It is a global market leader in cooling systems, initially recognised for supporting Formula 1 racing teams, but its expertise extends far beyond motorsports. 

Notably, its aerospace and defence segment is growing rapidly, contributing 12% of revenue in 1H FY24. 

Additionally, PWR Holdings is a founder-led company with high insider ownership and superior return on equity (ROE) ratios, consistently above 20%.

The PWR Holdings share price has dropped 15% from its peak in February, placing its price-to-earnings (P/E) ratio at 34x based on FY25 earnings estimates by S&P Capital IQ. This is at a mid-point of its historical trading range of between 20x and 52x.

Despite its relatively high multiple, the company offers a robust growth outlook, led by a trustworthy management team, in my view.

PWR Holdings shares offer a dividend yield of around 1.25% at Friday’s closing price of $10.98.    

Motley Fool contributor Kate Lee does not own shares of PWR Holdings Ltd. 

Corporate Travel Management Ltd

What it does: Founded by Jamie Pherous 30 years ago, Corporate Travel Management has grown into a global travel management solutions provider, serving customers in the United States, Australia, New Zealand, Europe, and Asia.

By Mitchell Lawler: Corporate Travel Management has all the makings of a great company: it’s founder-led, financially disciplined, and has a large opportunity for further growth. Yet, shares in this profitable business are back to 2016 levels. 

Corporate Travel has grown its net earnings by 136% since 2016 despite the turbulence caused by COVID-19. Specifically, the travel management company recorded $111.1 million in net profits after tax (NPAT) for the 12 months ended 31 December 2023, recovering from $27.7 million in the prior year.

As economic weakness weighs, the market has punished Corporate Travel stock this year, down almost 33%. Personally, I see it as a rare chance to build a position in a proven and profitable business with a good margin of safety.

Motley Fool contributor Mitchell Lawler does not own shares of Corporate Travel Management Ltd.

Betashares Nasdaq 100 ETF

What it does: The NDQ ETF tracks the performance of the NASDAQ 100 Index (NASDAQ: NDX) (before fees and expenses). 

By Bronwyn Allen: The NDQ ETF gives Aussie investors exposure to the 100 largest companies listed on the NASDAQ. The NASDAQ is full of innovation stocks. These are typically global businesses that are leaders in their fields and bring world-changing products and services to the fore. These include the Magnificent Seven stocks of Meta Platforms, Amazon, Apple, Alphabet, Nvidia, Microsoft, and Tesla.

Secondly, the NDQ ETF is highly complementary for ASX 200 ETF investors because it provides geographical earnings diversification (Fun fact: 50% of earnings are non-US), and its sector composition is the opposite of the ASX 200.

The NDQ ETF is overweight in tech stocks with very minor exposure to financials and materials, while the ASX 200 is overweight in banking and mining shares. And while past performance is no guarantee of future performance, it’s hard to ignore the 137% NDQ ETF price lift over five years compared to an approximate 16% gain for the ASX 200. 

Motley Fool contributor Bronwyn Allen does not own units of the Betashares Nasdaq 100 ETF.

Transurban Group

What it does: Transurban is the ASX’s largest toll road stock, operating several arterial tolled routes across Brisbane, Melbourne, and Sydney.

By Sebastian Bowen: In these uncertain times, I’m increasingly looking for stability and defensiveness in my ASX share portfolio. With that in mind, few companies fit the bill better than toll-road operator Transurban.

If you’ve ever driven in Sydney, Melbourne, or Brisbane and paid a toll, chances are you’ve been a Transurban customer. Traffic volumes tend to be highly stable and predictable, which in turn makes the earnings (and dividends) of this company relatively easy to anticipate. 

What’s more, Tranurban has negotiated very generous contracts for most of its tolled roads. It is often able to raise its tolls every quarter by either the rate of inflation or by an annualised 4%, whichever is higher. 

That bodes well for any income investor looking for a reliable stream of cash flow from their portfolios. This July, Transurban shares are trading on a dividend yield of close to 5%. As such, this is a stock that I would happily add to my portfolio right now.

Motley Fool contributor Sebastian Bowen does not own shares of Transurban Group.

ResMed Inc

What it does: ResMed is a medical device company that primarily provides cloud-connectable devices for the treatment of sleep apnoea, chronic obstructive pulmonary disease, and other respiratory conditions.

By James Mickleboro: ResMed shares have been very volatile over the last 12 months. This has been driven by concerns over the emergence of weight loss wonder drugs like Ozempic and Mounjaro. The latter caused a sharp selloff during the final week of June when trial results revealed it was effective at treating sleep apnoea in obese people.

However, it is worth noting that the strongest results were achieved with a combination of Mounjaro and a continuous positive airway pressure (CPAP) device. In light of this, while weight loss drugs are likely to negatively impact ResMed’s total addressable market (TAM), they are unlikely to be category killers. I think this makes June’s underperformance a great buying opportunity for investors in July.  

Ord Minnett certainly does, too. Last week, it put a buy rating and a $33.50 price target on RedMed shares.

Motley Fool contributor James Mickleboro owns shares of ResMed Inc.

The post Top ASX shares to buy in July 2024 appeared first on The Motley Fool Australia.

More reading

• Could these be the best ASX tech ETFs to buy for FY25?
• Here’s how the ASX 200 market sectors stacked up last week
• 4 of the best ASX ETFs to buy in July
• 3 ASX dividend stocks to buy with 5% to 7% yields
• Here are the top 10 ASX 200 shares today

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, Apple, BetaShares Nasdaq 100 ETF, Corporate Travel Management, Meta Platforms, Microsoft, Nvidia, PWR Holdings, ResMed, Tesla, and Transurban Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF, Corporate Travel Management, PWR Holdings, and ResMed. The Motley Fool Australia has recommended Alphabet, Amazon, Apple, Betashares Global Uranium Etf, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.