Category: Stock Market

If you’re an income investor looking for dividend shares to buy for your portfolio, then you may want to read on.

That’s because named below are two top ASX dividend shares that brokers are recommending as buys.

Here’s what you need to know about these income options:

ANZ Group Holdings Ltd (ASX: ANZ)

The team at Ord Minnett thinks this banking giant could be an ASX dividend share to buy despite its strong run in recent months.

The broker is feeling positive on the bank partly due to its proposed acquisition of Suncorp Bank. It notes that the deal is nearing completion after the Australian Competition Tribunal overturned the ACCC’s decision to block it. Ord Minnett believes the acquisition will add scale to areas where ANZ currently trails the other big four banks.

Ord Minnett currently has an accumulate rating and $31.00 price target on its shares.

As for dividends, the broker is forecasting fully franked dividends per share of $1.62 in FY 2024 and $1.65 in FY 2025. Based on the current ANZ share price of $29.26, this will mean dividend yields of 5.5% and 5.6%, respectively.

Dexus Convenience Retail REIT (ASX: DXC)

Another ASX dividend stock that could be a buy for income investors is Dexus Convenience Retail REIT.

The team at Bell Potter thinks the convenience retail and service station property company could be a good option right now.

Its analysts note that “DXC trades at a circa 34% discount to stated NTA which we think is overly punitive for a sub-sector where there is clear price discovery, and investors for commercial real estate have a clear preference for smaller cheque size assets.”

Bell Potter has a buy rating and $3.00 price target on its shares.

In respect to income, the broker is forecasting dividends per share of 20.9 cents in FY 2024 and 20.7 cents in FY 2025. Based on its current share price of $2.73, this equates to yields of 7.7% and 7.6%, respectively.

The post Buy ANZ and this ASX dividend share now appeared first on The Motley Fool Australia.

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More reading

• Shares vs. property: How to generate $500 passive income per month
• These 5 high-quality companies are now paying a better income than CBA shares
• ANZ shares charge higher on $57.5 million class action settlement news
• Analysts say these excellent ASX income shares are buys
• Here’s the ANZ dividend forecast through to 2026

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.

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On Wednesday, the S&P/ASX 200 Index (ASX: XJO) was back on form and pushed higher. The benchmark index rose 0.5% to 7,819.6 points.

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

ASX 200 expected to storm higher

The Australian share market looks set for a very positive session on Thursday following a great night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 41 points or 0.5% higher this morning. In late trade on Wall Street, the Dow Jones is up 0.1%, the S&P 500 has risen 0.45%, and the Nasdaq is 0.6% higher.

Oil prices flat

ASX 200 energy shares such as Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) could have a subdued session after oil prices traded flat overnight. According to Bloomberg, the WTI crude oil price is steady at US$81.59 a barrel and the Brent crude oil price is flat at US$86.24 a barrel. A rise in US crude stockpiles held back oil prices.

Dividend payday

Today is a big day for dividends with billions of dollars being paid out to Aussie investors. Among the many ASX 200 shares paying their latest dividends today are giants BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), and Telstra Group Ltd (ASX: TLS).

Gold price rises

It could be a good session for ASX 200 gold shares Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) after the gold price rose overnight. According to CNBC, the spot gold price is up 0.55% to US$2,211.6 an ounce. Traders were optimistically buying gold ahead of the release of US inflation data.

Westpac rated as neutral

The Westpac Banking Corp (ASX: WBC) share price is fully valued according to analysts at Goldman Sachs. This morning, the broker has responded to the bank’s technology simplification update by retaining its neutral rating with a slightly trimmed price target of $23.41. Goldman said: “WBC’s technology simplification plan has been a long time coming, and we believe it does, over time, have the potential to materially improve WBC’s relative productivity positioning.”

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

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More reading

• Invest $12,000 in Woodside stock and get $5,700 in passive income
• Here are the top 10 ASX 200 shares today
• Down 14% in 2024, why is the BHP share price sliding again today?
• Expert: This is where the S&P 500 is going next
• Why ASX 200 investors are celebrating today’s Aussie inflation print

Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation and Woodside Energy Group. 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 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.

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I recently decided to sell half of my Temple & Webster Group Ltd (ASX: TPW) stock, yet I’m still optimistic about its outlook and growth potential.

This e-commerce ASX share has delivered big gains for shareholders – it’s up more than 740% in the past five years and it has climbed over 280% in the past year.

Why I sold Temple & Webster shares

I was fortunate enough to invest at the end of October 2023. Since then the Temple & Webster share price soared more than 120% – I wasn’t expecting to make that much that quickly.

In my opinion, no business is a buy at any price.

Temple & Webster is doing a lot of good things to grow its underlying value, but the size of the gain made me want to take some profit off the table.

I decided to sell half, rather than all my holding, because I still want exposure to the company. By selling half, I’d have recovered (more than) my initial investment and what’s left is pure profit.

What I still like about the ASX share

The business is growing revenue at an impressive rate, which is one of the driving factors of the rising Temple & Webster stock price, and what attracted me to the business.

Revenue rose by 23% to $254 million in the first half of FY24, and it had increased by 35% year over year in the period between 1 January 2024 to 11 February 2024.

The company is demonstrating good profit margin potential. Its HY24 earnings before interest, tax, depreciation and amortisation (EBITDA) margin was 2.9%, at the top end of its full-year guidance of between 1% to 3%.

It aims to grow its revenue significantly in the next three to five years. I expect it can grow even more by 2030 (and beyond). The expansion into the home improvement and trade and commercial categories can help with its revenue potential.

Having an online model means it doesn’t need a store network like its competitors, reducing costs and increasing margins. Many products are shipped directly by suppliers, so it doesn’t need to hold much inventory.

If the business can keep capturing market share, then the ongoing adoption of online shopping is a powerful tailwind.

The company is expecting profit margins to grow as it scales, with particular scaling benefits relating to its fixed costs.

While I have sold half of my Temple & Webster stock, I’m hoping to buy plenty more in the future. In the meantime, I’m planning to put my sale proceeds to work in different ASX shares.

The post Why I just sold half my shares in this ASX 300 stock even though I still love it! appeared first on The Motley Fool Australia.

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More reading

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• 1 secretly cheap ASX 200 stock I’m buying for the long run
• Here’s why I think the Resmed share price should be 18% higher

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

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If I had $3,000 to invest in ASX blue-chip shares, I’d go for businesses with strong operations and a good long-term outlook.

I like companies that have a good market position and are able to keep expanding their footprint.

After looking at the biggest companies on the ASX, these two are among my favourites, along with Wesfarmers Ltd (ASX: WES) and Telstra Group Ltd (ASX: TLS).

Macquarie Group Ltd (ASX: MQG)

The business has four main segments: asset management, banking and financial services (BFS), commodities and global markets (CGM) and investment banking.

Macquarie generates around two-thirds of its earnings outside of the local economy, which implies the business has impressive geographic diversification.

The ASX blue-chip share has the flexibility to invest and expand in any division, wherever it sees opportunities across the world. That’s a big reason why, in my opinion, the Macquarie share price has been able to rise around 50% in the past five years.

While the short-term may not see strong operating profit growth, I think the business has a good long-term outlook. While the dividend yield isn’t huge, it can provide a useful bonus.

According to the estimates on Commsec, the Macquarie share price is valued at 17 times FY25’s estimated earnings and a partially franked dividend yield of 3.5%.

Coles Group Ltd (ASX: COL)

Coles is one of the largest supermarket businesses in Australia. We all need food, and Coles has a strong market position, including defensive earnings in my opinion.

Australia’s ongoing population growth is a useful boost for the ASX blue-chip share, as it can lead to more consumers buying from Coles.

The FY24 second half stated strongly – in the first eight weeks of the third quarter, supermarket revenue was up 4.9%, underpinned by volume growth. This growth was stronger than what Woolworths Group Ltd (ASX: WOW) achieved.

While expensive, I like that the company is investing heavily in advanced, automated warehouses which can help decrease operating costs and improve efficiencies once they’re all fully operational.

Long-term profit growth combined with a good dividend yield could be a winning combination for this ASX blue-chip share.

According to the estimates on Commsec, the Coles share price is valued at 20 times FY25’s estimated earnings.

The post 2 ASX blue-chip shares I’d buy with $3,000 right now appeared first on The Motley Fool Australia.

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• Here are the top five ASX 200 shares in Macquarie’s model growth portfolio
• $19 billion in ASX dividends is being paid out this week. Are you getting your share?
• 4 defensive ASX shares to own in a greedy market: Macquarie
• Buy Coles and this ASX 300 dividend share
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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 Coles Group, Macquarie Group, Telstra Group, and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It may surprise the average punter, but only $12,000 can send you on your way to receiving thousands of dollars of annual passive income.

Allow me to use reliable ASX dividend stock Woodside Energy Group Ltd (ASX: WDS) as an example.

Put a little bit on Woodside stock

Assume that you use your $12,000 to buy a batch of Woodside shares.

Currently 10 out of 17 analysts surveyed on broking platform CMC Invest reckons the ASX energy giant is a buy.

We all know past performance is never an indicator of the future. But just to demonstrate the power of compounding, let’s use the numbers we have.

Woodside shares currently hand out an excellent 7.1% fully franked dividend yield.

Then conservatively assume there will be zero capital gain in the coming years, and that the distributions are the only source of returns.

If you can keep those shares growing at 7.1% per year while adding in $400 monthly, chunky passive income is not too far away.

Then reinvest for 9 years

Nine years of that investment regime will see the nest egg grow to $79,981.

After that, instead of reinvesting the dividends, just put the cash in your bank account.

That means from that point you pocket an average of $5,678 of passive income each year.

How good is that!

The point of this hypothetical was to show how starting with just a small amount to invest can quickly grow to an income generating machine.

In reality, you will want to diversify your portfolio, rather than buy only Woodside shares.

Fortunately, there are plenty of excellent shares out there that can deliver you a 7% yield, or 7% growth — or even more.

And don’t forget, the above scenario was based on your shares not seeing any capital gains over those nine years.

If you manage the portfolio properly, that will also be unlikely.

Good luck out there.

The post Invest $12,000 in Woodside stock and get $5,700 in passive income appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Wednesday
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• Buy Woodside shares for a 20% gain and 4.5% dividend yield
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Motley Fool contributor Tony Yoo 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.

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On Wednesday, Block Inc (ASX: SQ2) shares continued their positive run and recorded another solid gain.

The payments company’s shares rose almost 2% to $128.96.

This is just the latest in a long run of gains that have been recorded by the Afterpay and Square owner, much to the delight of its shareholders after a long period of underperformance.

In fact, things have been so good in recent months, that Block shares have reached new two-year highs multiple times in the past few weeks thanks largely to a strong performance in the final quarter of 2023.

This means that if you had invested late last year, you would be laughing all the way to the bank now.

Investing $5,000 into Block shares

To demonstrate just how well Block shares have been performing recently, let’s take a look at what a $5,000 investment five months ago would be worth now.

At the end of October, I could have picked up Block shares at a multi-year low of $60.56.

This means that for an investment of $5,026.48, I could have bought 83 units.

If we now fast-forward to today, with Block shares changing hands for $128.96, those units have a market value of ~$10,700.

That’s a return on investment of approximately $5,700 or 113% in just five months.

Can its shares keep rising?

The team at Seaport Research in the United States is feeling very positive about the company.

It recently upgraded Block’s US listed shares to a buy rating with a US$95 price target.

Based on current exchange rates, this price target works out to be approximately $145.69 for the Cash App owner’s ASX listed shares. This suggests that its shares could still rise 13% from current levels.

The post If I’d put $5,000 in Block shares 5 months ago, here’s what I’d have now appeared first on The Motley Fool Australia.

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• Why are these ASX tech shares getting smashed 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 Block. The Motley Fool Australia has positions in and has recommended Block. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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When an S&P/ASX 200 Index (ASX: XJO) stock outperforms all and sundry one year but then suddenly dips, you need to at least check out what’s happening.

Neuren Pharmaceuticals Ltd (ASX: NEU) was the highest climber in the ASX 200 last year, gaining an insane 214% over the calendar year.

But a reality check has been delivered for investors this year, with an 18.6% tumble so far.

So what’s doing? Is this a bargain just waiting to be bought?

Why has Neuren become a cheap ASX stock?

Neuren develops treatments for rare neurological conditions. 

While it’s developing and testing future products, it already has a drug called Daybue on sale through its US licensee Acadia Pharmaceuticals Inc (NASDAQ: ACAD).

The analysts at Blackwattle explained in a memo that the main reason why Neuren shares have plunged in 2024 lies in this relationship.

“The underperformance resulted from a ‘short report’ released on Neuren’s US distributor, questioning the efficacy of NEU’s therapy and the retention rate of patients.”

The author of the report, Culper Research, claimed that Daybue has been “a total flop”.

“The sell-side sell calls for over $800 million in peak Daybue revenues, but our research suggests that Daybue new patient starts already topped this past summer, peak revenues will be a mere fraction of sell-side estimates, and Daybue’s flop will have knock-on effects as ACADIA remains a cash-burning machine.”

Ouch.

Should you buy Neuren Pharmaceuticals?

So is this a value trap or a golden opportunity to buy into a fast-growing company for dirt cheap?

Multiple Australian investment houses disagree with the short report.

The Blackwattle memo admitted the damaging claims have “impacted sentiment towards the stock” in the near term, but the short report is “at odds with trial data and the real-life experience of medical specialists, patients, and their carers”.

The team at the Elvest Fund is also keeping the faith.

“Our thesis for Neuren Pharmaceuticals is unchanged,” it said in its memo to clients.

“New CY24 Daybue sales guidance of US$370 to US$420 million (+120%) underpins another solid year of royalty and milestone revenue for Neuren.”

Broking platform CMC Invest shows unanimous agreement, with all six analysts surveyed there still rating the stock as a buy.

So it seems this “cheap” ASX stock could be a genuine bargain for those willing to hold on for the long run.

The post 1 secretly cheap ASX 200 stock I’m buying for the long run appeared first on The Motley Fool Australia.

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• 3 ASX stocks boasting better margins than Nvidia
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Motley Fool contributor Tony Yoo 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.

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The Resmed CDI (ASX: RMD) share price has made an impressive recovery since its October 2023 depths. The medical equipment maker’s shares are up 41% from their lowest lows, crawling from $21.14 to their current $29.90 level.

It’s true, Resmed shares are not at the bargain basement prices they once were. Now trading on a price-to-earnings (P/E) ratio of 32 times FY2024 earnings, putting it on par with the global medical equipment industry average. There is hardly any upside from here, some might say…

I could be blowing some minds here. But I’m still invested in Resmed shares and expecting considerable gains to come.

Drug disruption overdone

A quick refresher. Resmed provides respiratory devices used to treat obstructive sleep apnea (OSA). It is suggested that around 70% of people suffering from OSA are obese. One would then assume the two are somewhat linked.

Then glucagon-like peptides (GLP-1) agonists came along — a medication found to reduce weight rapidly. People have flocked to the drug, with its promise of effortless weight loss with a single injection per week.

As it stands, some research indicates GLP-1s may improve sleep apnea. United States pharmaceutical giant Eli Lilly and Co (NYSE: LLY) is studying how its GLP-1 variant affects sleep apnea, with results anticipated in the coming months.

I’m speculating here, though, I suspect the drug will help reduce the severity of OSA but not eliminate it. Complete elimination might occur for those small numbers of people who experience minor sleep apnea to begin with.

This is supported by Resmed’s internal estimates, as shown above. Under the most impactful scenario, GLP-1s may reduce the global market opportunity in 2050 from 1.4 billion people to 1.2 billion.

My Resmed share price estimate

I believe Resmed is an exceptional company with quality products in a growing industry.

Although this company already looks large, the enormous market for sleep apnea devices provides a long runway for expansion. For this reason, it seems completely feasible — in my opinion — that Resmed continues to increase its revenue by 10% to 12% each year.

Based on this, I expect Resmed to generate A$9.34 billion in revenue in FY2027. Likewise, net profits after tax (NPAT) of A$1.96 billion seems achievable. That would peg the market capitalisation at A$41.46 billion at a reasonable P/E ratio of 28 times — approximately 18% above the current Resmed share price.

You might say, “But Mitchell, that is three years away…” And yes, you’re right. However, with connected devices expected to increase more than fourfold between now and 2050, I doubt the growth will stop there.

By FY2029, I think Resmed could pull in A$2.63 billion in after-tax profits. I believe a market cap of around $70 billion would be possible then. That would equate to about $47.80 for the Resmed share price.

The post Here’s why I think the Resmed share price should be 18% higher appeared first on The Motley Fool Australia.

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

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The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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

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I’m a big fan of ASX index fund investing. The inherent qualities of an index fund – mainly instant diversification and a guaranteed return at the rate of the market – make it a perfect investment for almost anyone in my view.

But thanks to the explosive growth in popularity of index investing in recent years, the ASX is now awash with index ETFs. As such, choosing one that works for you can get a little overwhelming. So today, I’m going to discuss three ASX index funds that I think are a buy today.

3 ASX index funds I’d happily buy today

iShares S&P 500 ETF (ASX: IVV)

To start off with, let’s discuss an ASX index fund endorsed by the legendary Warren Buffett himself. The S&P 500 Index is the most widely tracked and invested index in the world.

It is a barometer of the entire US stock market and represents the largest 500 companies listed on the American markets. That’s everything from Apple and Amazon to Coca-Cola and McDonald’s.

Warren Buffett has recommended an S&P 500 index fund as the perfect investment for “most people”, calling it a slice of America. I think this ASX index fund contains most of the world’s highest-quality companies. As such, it’s a no-brainer.

iShares MSCI Japan ETF (ASX: IJP)

This ASX index fund is a little exotic. It gives investors exposure to an index that reflects most companies on the Japanese stock exchange.

I think Japan houses some of the world’s best companies outside of the United States. Through this ETF, investors will gain exposure to the likes of Toyota, Nintendo, Sony, Honda, Softbank and Mitsubishi Heavy Industries.

In my view, this is a great investment for any Australian to consider, given the healthy diversification it can add to any portfolio. This ASX index fund has gained more than 30% over the past year. But I think there is plenty of upside going forward.

VanEck Australian Equal Weight ETF (ASX: MVW)

Finally, we have an unconventional investment to discuss. Most index funds on the ASX, including the most popular choices, are weighted by market capitalisation.

This means that the larger companies command more weight and influence within each fund than the smaller ones. It’s why a typical ASX fund is more heavily influenced by the movements of the Commonwealth Bank of Australia (ASX: CBA) share price than JB Hi-Fi Ltd (ASX: JBH).

As such, a normal ASX index fund is very heavily tilted towards the big four banks and the large miners like BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO). That might be great for dividend lovers. But this doesn’t sit well with other investors. That’s where the VanEck Equal Weight ETF comes in.

Instead of giving the lion’s share of the ETF to the largest stocks, the index fund gives the largest 75 or so shares on the ASX equal treatment within the ETF. Because of this, CBA stock has just as much influence here as JB Hi-Fi shares.

This approach has worked well for this ETF in recent years. Current data shows MVW units outperforming a standard ASX 200 index fund over the last three years on average.

The post 3 top ASX index funds to buy now appeared first on The Motley Fool Australia.

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More reading

• The pros and cons of buying the iShares S&P 500 ETF (IVV) right now
• 12 ASX ETFs breaking the mould to hit 52-week highs today
• 4 top ASX exchange-traded funds smashing record highs on Wednesday
• 3 Australian shares to buy and hold forever in your ASX portfolio
• Can you buy Nvidia shares on the ASX?

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen has positions in Amazon, Apple, Coca-Cola, and McDonald’s. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, Apple, and iShares S&P 500 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Nintendo. The Motley Fool Australia has recommended Amazon, Apple, Jb Hi-Fi, and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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