Category: Stock Market

Deciding which ASX dividend shares to buy can be a gruelling process.

Luckily for income investors, analysts have done a lot of the hard work for you and picked out two they think are buys.

Here’s what they are saying about these dividend shares:

Acrow Ltd (ASX: ACF)

The team at Morgans thinks that Acrow could be an ASX dividend share to buy. It provides the construction sector with engineered formwork, scaffolding, and screen systems solutions.

Morgans has an add rating and $1.43 price target on its shares. The broker likes the company due to its positive outlook, attractive valuation, and generous forecast dividend yield. It said:

ACF is a well-managed business with leverage to growing civil infrastructure activity over the long term, especially on the east coast. Momentum remains strong and recent acquisitions will provide new avenues for growth, especially in the more stable and less cyclical Industrial Services segment. We believe the valuation remains attractive (~7.5x FY25F PE and ~5.5% yield) with potential positive catalysts from further meaningful contract wins.

Morgans is forecasting fully franked dividends of 5.5 cents per share in FY 2024 and then 5.9 cents per share in FY 2025. Based on the current Acrow share price of $1.16, this will mean dividend yields of 4.75% and 5%, respectively.

GUD Holdings Limited (ASX: GUD)

Analysts at Bell Potter think that this auto parts company would be a good ASX dividend share to buy.

The broker has the company on its favoured list with a buy rating and $12.80 price target on its shares. Its analysts believe the company is well-positioned to benefit from supply constraints and the resilience of the legacy auto business. It commented:

The company recently reported an impressive FY23 result with NPAT of $119 million beating Citi forecast by 3% and consensus by 14%. This was driven by the better-than-expected APG performance (the highest-quality business in GUD, in our view) and the improvement in gearing. We see GUD as well-placed to benefit from the ongoing improvement in OEM supply constraints into FY24. Overall, our Buy rating for GUD is predicated on the relative resilience of the legacy auto business and improving momentum in new car sales, which should be favourable for APG’s earnings.

As for income, Bell Potter is forecasting fully franked dividends per share of 38.5 cents in FY 2024 and then 40.4 cents in FY 2025. Based on the current GUD share price of $10.57, this equates to dividend yields of 3.65% and 3.8%, respectively.

The post Analysts name 2 ASX dividend shares to buy now appeared first on The Motley Fool Australia.

More reading

• These ASX 200 shares could rise 15% to 50%
• Here are the top 10 ASX 200 shares today
• Why Credit Corp, GUD, Race Oncology, and Spartan Resources shares are rising
• Why this $1.5 billion ASX 200 stock just surged 10%
• 9 ASX All Ords shares elevated to ‘strong buy’ status in April

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

It has been a volatile 12 months for Pilbara Minerals Ltd (ASX: PLS) shares.

During this time, the lithium miner’s shares have been as high as $5.43 and as low as $3.10. From top to bottom, that’s a decline of approximately 43%. This has been driven by a sharp decline in lithium prices.

The Pilbara Minerals share price is currently trading closer to its low than its high at $3.89. Does this make it a good time to buy? Or could its shares go lower from here? Let’s see what analysts are forecasting.

Where next for Pilbara Minerals shares?

Unfortunately, the general consensus is that the company’s shares are heading lower from here.

For example, UBS and Citi have sell ratings on Pilbara Minerals’ shares with price targets of $2.70 and $3.60, respectively. This implies potential downside of 31% and 7.5% for investors over the next 12 months.

Over at Morgan Stanley, its analysts have an underweight rating and $3.35 price target on its shares. This suggests that they could fall 14% from current levels.

And finally, analysts at Goldman Sachs are arguably among the biggest bears out there. The broker currently has a sell rating and $2.80 price target on its shares.

It believes its shares are expensive despite pulling back materially from recent highs. Goldman commented:

We see near-term FCF continuing to decline on lithium prices and increasing growth spend (c. -10% FCF yield in FY24E, and c.0% in FY25-27E). Overall, we see PLS spending ~A$0.85bn on P1400, taking total capex spend from FY24E to FY28E on current and P1400 expansions to ~A$3bn, ~A$0.9bn ahead of consensus which already prices further expansion. Furthermore, we see PLS’ net cash declining to ~A$0.8-0.9bn (though still a relatively strong position vs. some peers and defensive into a declining lithium price), where with the stock trading at ~1.2x NAV (peer average ~1.05x), or pricing ~US$1,300/t spodumene (including a nominal value of A$1.1bn for growth) vs. peers at ~US$1,210/t (lithium pure-plays ~US$1,110/t; GSe US$1,150/t LT real), we see PLS as relatively expensive on fundamentals.

It’s not all doom and gloom, though. The team at Macquarie is a little more positive on Pilbara Minerals’ shares. The broker currently has a neutral rating on them with a price target of $4.20. This implies potential upside of 8% for investors.

Time will tell which broker makes the right call. Though, it seems quite likely that the direction its shares take will be dictated less by broker price targets and more by lithium prices. If there is a surprise rebound in prices, it could put a rocket under lithium stocks.

The post Higher or lower: Where next for Pilbara Minerals shares? appeared first on The Motley Fool Australia.

More reading

• Here is the latest lithium price forecast through to 2027
• These are the 10 most shorted ASX shares
• ASX 200 shares vs. property: Which has performed better since the COVID crash?
• This top broker says the Pilbara Minerals share price is going to crash 35%
• These are the 10 most shorted ASX shares

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Pro Medicus Limited (ASX: PME) shares overcame the market weakness on Tuesday and pushed higher.

The ASX 200 tech stock rose 1% to end the day at $114.31.

Why did this ASX 200 tech stock rise?

Investors were bidding the health imaging technology company’s shares higher after it announced five new contracts with a combined minimum contract value of $45 million.

These contracts will be fully cloud deployed and are expected to be completed within the next six months.

The contracts are as follows:

• A $9.5 million, five-year contract with Consulting Radiology, a private radiology group in Minnesota.
• An $11.5 million, seven-year contract with Nationwide Children’s Hospital. It is a leading paediatric hospital in Columbus, Ohio.
• A $6.5 million, five-year contract with Nicklaus Childrens Hospital, a leading paediatric hospital in Miami, Florida.
• A $9 million, eight-year contract with Moffitt Cancer Center in Tampa, Florida.
• An $8.5 million, five-year contract with US Radiology Specialists. It is a partnership of physician owned radiology practices.

These contract wins bring the company’s minimum total contract value (TCV) for new sales this financial year to $245 million.

Broker reaction

This morning, analysts at Goldman Sachs have responded very positively to the news.

According to the note, the broker has reiterated its buy rating with a slightly improved price target of $136.00.

Based on where the ASX 200 tech stock currently trades, this implies potential upside of 19% for investors over the next 12 months.

Commenting on the contract wins, the broker said:

PME continues to demonstrate Visage’s compelling product offering and value proposition to a broadening range of customers across different sizes and specialties (i.e. children’s hospitals and private radiology groups where the market is evolving, with more tenders coming to market). This provides a platform for further growth (direct validation & referral effect), supporting a positive TAM runway for Visage which currently commands c.7% market share of US imaging volumes (GSe +13% in FY30E) – a key component of our Buy Initiation in April; (2) All contracts to be fully cloud-based, and we believe Visage is the only solution available that can be fully cloud-deployed at this scale, and hence represents a tangible competitive advantage, as highlighted today; and (3) the announced contract sizes contain no direct component from either AI or Cardiology, which should present upside optionality through the mid-term.

‘Industry leading’

All in all, this news reinforces the broker’s bullish view on the ASX 200 tech stock and its “industry leading” technology. It concludes:

In our view, PME is well positioned into FY25 given a full year benefit of some large and high profile contracts, in addition to the accelerating frequency and size of new contract wins. We see PME’s software Visage 7 as an industry leading solution with two distinct advantages relative to peers — speed and cloud capabilities — that have influenced the choice of PACS vendor. Given this, PME is benefiting from an industry network effect, and we forecast share gains to 13% in FY30E (c.7% today) as more hospitals move to modern systems. PME is expanding into adjacent solutions including AI and Cardiology which could provide significant upside given we believe PME is the incumbent technology leader in radiology, and is well-placed to take share in both markets.

The post Why you should buy this ‘industry leading’ ASX 200 tech stock appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today
• 4 ASX growth shares to buy to supercharge your portfolio in June
• Why Playside Studios, Pro Medicus, Strike Energy, and Winsome shares are charging higher
• Here’s the new Telstra dividend forecast through to 2026

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

Woodside Energy Group Ltd (ASX: WDS) shares are a popular option for investors looking for passive income.

And it isn’t hard to see why.

Each year, the energy giant shares a portion of its ample profits with its lucky shareholders.

For example, in FY 2023, the company paid out fully franked dividends of 140 US cents per share. This represented approximately 80% of Woodside’s underlying net profit after tax of US$1,660 million, which was the top end of its targeted dividend payout range.

But those dividends have long since been paid to shareholders. What’s next for Woodside shares and its dividend?

Let’s take a look at what income investors could receive if they picked up 1,000 shares in Australia’s leading energy producer.

Buying 1,000 Woodside shares

Firstly, to purchase 1,000 Woodside shares you would need to make a fairly large investment in the company.

At yesterday’s close, the company’s shares were changing hands for $27.63.

This means that you would need to invest $27,630 in order to snap up 1,000 Woodside shares.

But it sure could be worth the investment according to analysts at Morgans. That’s because the broker has the company on its best ideas list with an add rating and $36.00 price target.

If the Woodside share price were to rise to that level, it would value those 1,000 shares at $36,000. That’s 30% higher than the current market value of those units. Morgans commented:

A tier 1 upstream oil and gas operator with high-quality earnings that we see as likely to continue pursuing an opportunistic acquisition strategy. WDS’s share price has been under pressure in recent months from a combination of oil price volatility and approval issues at Scarborough, its key offshore growth project. With both of those factors now having moderated, with the pullback in oil prices moderating and work at Scarborough back underway, we see now as a good time to add to positions.

Passive income

But let’s now focus on the main event – passive income.

Morgans thinks that Woodside shares could generate a nice source of passive income this year and next.

The broker is currently forecasting a fully franked dividend of approximately A$1.25 per share in FY 2024. This equates to a dividend yield of 4.5% and would generate approximately A$1,250 in passive income.

And if you’re willing to be patient, you will be rewarded with a bigger dividend in FY 2025 according to Morgans. It is forecasting a fully franked dividend of approximately A$1.57 per share for the next financial year.

This equates to a 5.7% dividend yield and would mean passive income of approximately $1,570 from your 1,000 Woodside shares.

In summary, that’s passive income of:

• $1,250 in FY 2024
• $1,570 in FY 2025

Overall, this could make Woodside shares worth considering if you’re not averse to investing in the energy sector.

The post If I buy 1,000 Woodside shares, how much passive income will I receive? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• The pros and cons of buying Woodside shares right now
• Buy these ASX 200 dividend shares for passive income in June
• 5 things to watch on the ASX 200 on Monday
• Here are the top 10 ASX 200 shares today

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

The Australian share market typically provides investors with a 4% dividend yield.

And while that it undoubtedly attractive, you don’t have to settle for that.

That’s because there are ASX shares out there that have been tipped to provide investors with above-average yields.

For example, listed below are two ASX shares that are forecast to provide dividend yields of 5% and 6.5% this year. Here’s what you need to know about them:

HomeCo Daily Needs REIT (ASX: HDN)

Analysts at Morgans think that HomeCo Daily Needs would be a great ASX share to buy for dividends.

It is an Australian REIT with a mandate to invest in convenience-based assets across the target sub-sectors of neighbourhood retail, large format retail and health and services.

Morgans currently has an add rating and $1.37 price target on its shares. It believes the company’s high quality tenants and development pipeline mean it is well-placed for the future. The broker said:

HDN’s $4.7bn portfolio is focused on daily needs assets (Large Format Retail; Neighbourhood; and Health & Services) across +50 properties with the top 3 tenants Bunnings, Coles and Woolworths. 70% of leases are fixed; 21% linked to CPI; and 9% based on supermarket turnover. The portfolio has resilient cashflows and continues to be a beneficiary of accelerating click & collect trends. +80% of tenants are national and ~75% of tenants offer click & collect reinforcing the importance of assets being able to support ‘last mile logistics’. Sites are also in strategic locations with strong population growth (+80% metro). HDN offers an attractive distribution yield and the development pipeline provides growth opportunities.

The broker expects HomeCo Daily Needs to pay dividends per share of 8 cents in FY 2024 and then 9 cents in FY 2025. Based on the current HomeCo Daily Needs share price of $1.23, this will mean yields of 6.5% and 7.3%, respectively.

Telstra Group Ltd (ASX: TLS)

Another ASX share that could offer above-average dividend yields is Telstra. It is of course Australia’s largest telecommunications company.

Goldman Sachs is positive on the company and sees a lot of value in its shares at current levels. It has a buy rating and $4.25 price target on them. The broker also sees opportunities for Telstra to unlock further value down the line. It explains:

Telstra is the incumbent telecom operator in Australia. We believe the low risk earnings (and dividend) growth that Telstra is delivering across FY22-25, underpinned through its mobile business, is attractive. We also believe that Telstra has a meaningful medium term opportunity to crystallise value through commencing the process to monetize its InfraCo Fixed assets – which we estimate could be worth between A$22-33bn. Although there is some debate around the strategic benefits, we see a strong rationale for monetizing the recurring NBN payment stream, given its inflation-linked, long duration cash flows could be worth $14.5bn to $17.9bn, with no loss of strategic benefit.

In respect to dividends, Goldman is forecasting fully franked dividends of 18 cents per share in FY 2024 and then 18.5 cents per share in FY 2025. Based on the current Telstra share price of $3.51, this will mean yields of 5.1% and 5.3%, respectively.

The post Buy these ASX shares and get 5% and 6.5% dividend yields appeared first on The Motley Fool Australia.

More reading

• 3 top ASX 300 dividend shares to buy now for $3,000 a month in passive income
• Here’s the new Telstra dividend forecast through to 2026
• Joining the revolution: How I’d invest in ASX AI shares right now
• Beat the bank! 2 ASX stocks worth buying to make more money than interest on savings
• With a dividend yield over 7%, are Telstra shares a buy for income?

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

When looking for successful stock market investors for inspiration, there is arguably no better figure to turn to than the legendary Warren Buffett.

Over his exceptionally long investing career, Buffett has achieved astonishing returns, turning his company Berkshire Hathaway Inc (NYSE: BRK.A)(NYSE: BRK.B) from a failing textiles mill into the US$881 billion behemoth it is today.

Fortunately for every single investor on the planet, Buffett has always been generous with his wisdom and guidance. His annual letters to the shareholders of Berkshire Hathaway, as well as his famous shareholder meetings, are typically jam-packed with advice, tips and cautionary tales.

So today, let’s discuss how Warren Buffett’s advice is guiding my own ASX share investing in 2024.

How Waren Buffett is helping my 2024 stock market investing

Buffett: Keeping it simple

The investing world is perpetually in the grips of the latest fad. Whether it be lithium stocks, uranium shares or cryptocurrency miners, there always seems to be a sector or corner of the market that is booming as investors flood in to try and grab a piece of the next big thing.

But Buffett has never been a trendjumper or setter for that matter. In fact, he typically warns investors to stay in their lane. Here are two quotes that best sum up Buffett’s attitude:

Beware the investment activity that produces applause; the great moves are usually greeted by yawns.

Never invest in a business you cannot understand.

As such, I’ll be staying away from the hot stocks in 2024, sticking to businesses that I can easily understand. That’s why I’ll be far more likely to buy shares of say Coles Group Ltd (ASX: COL) than Arcadium Lithium plc (ASX: LTM).

Look for ASX shares with something special

Disciples of Warren Buffett would be well aware of the man’s love of what he calls an economic moat. A moat is a durable competitive advantage that a company can possess, which helps it stave off competition:

The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage.

This could come in the form of a strong brand, a product that investors find difficult to stop using, or a cost advantage that ensures a company’s products are the cheapest available.

We can see this reflected in Buffett’s own portfolio at Berkshire. Most of Berkshire’s holdings have an obvious moat – Coca-Cola‘s universally known brand or Apple‘s reputation for quality products are two such examples.

Using this principle, I’m hopeful that my next ASX share buy in 2024 will be a company with a strong moat. It might be Transurban Group (ASX: TCL) for its network of almost unavoidable toll roads across Australia or perhaps Lottery Corp Ltd (ASX: TLC) for its exclusive rights to run lotteries and Keno in most Australian states.

Foolish takeaway

In my view, there is no one better than Warren Buffett if you want investing advice and inspiration. As such, my next ASX buy will hopefully be one that Buffett would approve of.

The post How Warren Buffett’s advice is guiding the ASX shares I’m buying in 2024 appeared first on The Motley Fool Australia.

More reading

• Safeguarding against inflation: A defensive share strategy
• ASX investors may choose supermarkets over Wesfarmers shares after ACCC inquiry: broker
• Forget lottery tickets, I’d buy these ASX shares instead
• Leading brokers name 3 ASX shares to buy today
• Here is the latest lithium price forecast through to 2027

Motley Fool contributor Sebastian Bowen has positions in Apple, Berkshire Hathaway, and Coca-Cola. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple, Berkshire Hathaway, Lottery, and Transurban Group. The Motley Fool Australia has positions in and has recommended Coles Group. The Motley Fool Australia has recommended Apple and Berkshire Hathaway. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

On Tuesday, the S&P/ASX 200 Index (ASX: XJO) had a subdued session and dropped into the red. The benchmark index fell 0.3% to 7,766.7 points.

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

ASX 200 expected to fall

It looks set to be another subdued day for the Australian share market on Wednesday following a mixed start to the week in the United States. According to the latest SPI futures, the ASX 200 is expected to open the day 49 points or 0.6% lower. On Wall Street, the Dow Jones fell 0.55%, the S&P 500 was flat, and the Nasdaq pushed 0.6% higher. The latter hit a record high and rose beyond 17,000 points for the first time.

Oil prices surge

ASX 200 energy shares such as Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) could have a great session after oil prices surged overnight. According to Bloomberg, the WTI crude oil price is up 3.1% to US$80.15 a barrel and the Brent crude oil price is up 1.65% to US$84.47 a barrel. Traders were feeling confident ahead of the highly anticipated OPEC+ meeting.

Santos supply agreement

The Santos Ltd (ASX: STO) share price will be on watch today. That’s because after the market close on Tuesday, the energy company announced a binding long-term LNG supply and purchase agreement with Hokkaido Gas. The long-term agreement will supply up to approximately 0.4 million tonnes per annum of LNG for 10 years, commencing in 2027, from Santos’ LNG portfolio on a delivered ex-ship basis.

Gold price races higher

ASX 200 gold shares Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could have a good day after the gold price raced higher overnight. According to CNBC, the spot gold price is up 1.1% to US$2,359.2 an ounce. A softer US dollar boosted the precious metal.

Buy Pro Medicus shares

Pro Medicus Limited (ASX: PME) shares are good value according to analysts at Goldman Sachs. In response to news that the health imaging technology company has won five new contracts worth $45 million, the broker has reiterated its buy rating with an improved price target of $136.00. This implies potential upside of 19% from current levels. It commented: “In our view, PME is well positioned into FY25 given a full year benefit of some large and high profile contracts, in addition to the accelerating frequency and size of new contract wins.”

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

More reading

• Here are the top 10 ASX 200 shares today
• 4 ASX growth shares to buy to supercharge your portfolio in June
• Why Playside Studios, Pro Medicus, Strike Energy, and Winsome shares are charging higher
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX 200 shares today

Motley Fool contributor James Mickleboro has positions in Pro Medicus 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 Pro Medicus. The Motley Fool Australia has recommended Pro Medicus. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Whilst one in four Australians rank superannuation as the most important investment vehicle for retirement and long-term wealth building, 85% are actively investing outside their super funds.

So, how are Australians investing their spare cash?

In this article, we take a look at the most popular investment options identified in a new survey.

What are the most popular investments outside superannuation?

Research by financial advisory Findex shows the most common investments Australians have outside their superannuation are bank savings (64%), property (38%), cash (35%), and shares (34%).

Other investments include exchange-traded funds (ETFs) (17%), cryptocurrency (17%) and bonds (6%).

Findex says the range of investment options adopted indicates “not only nuanced preferences and risk appetites but a preference for liquidity and risk aversion among a significant portion of the population”.

When the data is broken down by generation, we see different investment strategies at work.

Generational differences in preferred investments

Here is a summary of how investment choices outside superannuation differ between the generations.

Baby Boomers (born 1945-1964)

Baby Boomers prefer to invest in bank savings (60%), property (50%) and shares (46%).

Gen Xers (born 1965-1980)

Gex Xers like bank savings (57%), property (43%) and shares (36%).

Millennials (born 1981-1996)

Millennials prefer bank savings (70%), property (41%), cash (35%) and shares (33%). Interestingly, the survey shows this age group is the biggest player in five different categories of investments. They are bank savings, as stated; cryptocurrency (22%), ETFs (21%), managed funds (15%), and bonds (8%).

Gen Zs (born 1997-2009)

Gen Z is the biggest investor in cash (42%) and the second biggest investor in bank savings (66%). They also like shares (22%), ETFs (17%), property (14%) and cryptocurrency (13%).

Investing in ASX shares during retirement

Most superannuation funds primarily invest in ASX shares and international equities like US shares.

Individual Australians can do the same thing outside their super by setting up a brokerage account and buying shares with their own funds.

Investors in retirement typically want to maximise their passive income by owning preferably fully franked ASX dividend shares.

Some of the most popular ASX dividend shares include the big bank shares, such as National Australia Bank Ltd (ASX: NAB) and Westpac Banking Corp (ASX: WBC). Income investors also like the big mining stocks, such as Fortescue Ltd (ASX: FMG) and BHP Group Ltd (ASX: BHP).

Ray David from Blackwattle Partners says ASX 200 mining stocks present more of a buying opportunity today than bank stocks, which have had a significant run of share price growth since last November.

The post Planning your retirement? Here are the most popular investments outside superannuation appeared first on The Motley Fool Australia.

More reading

• How much could $10,000 invested in Fortescue shares be worth next year?
• 3 top ASX 300 dividend shares to buy now for $3,000 a month in passive income
• Are CBA share buyers getting the highest growth in return for being the most expensive?
• BHP share price marching higher amid fast approaching $75 billion takeover deadline
• Nvidia shares are now worth more than 17 times the market cap of BHP. What’s next?

Motley Fool contributor Bronwyn Allen has positions in BHP Group. 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.

We’d all like to be ‘set up for life’. That’s probably the main reason most of us make the trek to work every day and save where we can, when we can. But if you want to fast-track your financial independence and truly be set up for life, just padding out your savings account might not be enough to cut the mustard. That’s why I believe investing in ASX shares is essential for a comfortable retirement.

However, investing in the share market can be a risky venture. Sure, those who stick to passively investing in index funds and similar investments are probably going to be just fine, as long as they don’t do silly things like sell in a market crash.

But if you want to buy your own shares and establish a bespoke portfolio, you can run into all kinds of issues that might prevent you from establishing financial independence. So today, let’s discuss two ASX shares that I think can help anyone get their finances set up for life.

2 ASX shares to set you up for life

Goodman Group (ASX: GMG)

First up is a real estate investment trust (REIT) in Goodman Group. Goodman has made a name for itself over the past few years as one of the ASX’s most successful REITs. Goodman units have risen by a whopping 157% or so over just the past five years. But I think there is plenty of growth left in Goodman’s tank. I particularly like this REIT’s focus on data centres and other future-facing industrial property.

Unlike most REITs, Goodman does not normally pay a substantial dividend. Today, its units are sitting on a trailing yield of just 0.88%. But even so, this investment has more than made up for that in the past with its stunning capital growth. I think this REIT would be great to hold in any ASX share portfolio today.

BetaShares Global Cybersecurity ETF (ASX: HACK)

Next up we have an investment that’s not technically an ASX share, but an exchange-traded fund (ETF). HACK delivers pretty much what it says on the tin – a portfolio made up of the largest and most successful cybersecurity companies in the world. These include CrowdStrike, Cisco, Palo Alto and Broadcom.

I think an investment in this trend is a pretty good bet. For one, there is little doubt that cybersecurity spending is only going to continue to rise quickly in the years ahead as businesses, governments and individuals pay up to prevent damaging data breaches and hacks.

But HACK has proven its worth as an investment in the past. Since its inception in 2016, this ETF has returned an average of 17.21% per annum (as of 30 April). Past performances are never a guarantee of future returns. However, given the ever-increasing importance of cybersecurity to everyone on the planet, I think this is a trend worth investing in.

The post 2 ASX shares that could help set you up for life appeared first on The Motley Fool Australia.

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It is fair to say that Fortescue Ltd (ASX: FMG) shares have been a great place to invest over the last 12 months.

During this time, the iron ore miner’s shares have outperformed the market significantly with a gain of over 33%.

This would have turned a $10,000 investment into approximately $13,300.

In addition, over this period the mining giant has paid out total fully franked dividends of $2.08 per share. This boosts the total return to approximately 44% and means a $10,000 investment would have become $14,400 including dividends.

But those returns are now firmly behind us. So, let’s take a look at what could happen in the future with another $10,000 investment.

Investing $10,000 in Fortescue shares

Firstly, with Fortescue shares currently trading at $26.51, a $10,000 investment (plus an extra $20.78) would lead to you owning 378 units.

Let’s now see what those units could be worth in 12 months.

Unfortunately, analysts at Goldman Sachs don’t believe that history will repeat itself for investors between now and this time next year. In fact, the broker thinks that Fortescue shares are overvalued and could be destined to crash deep into the red.

According to a recent note, Goldman has a sell rating and $16.90 price target on the company’s shares.

If this recommendation proves accurate, it will give those 378 Fortescue shares a market value of $6,388.20. That’s approximately 36% less than you started with.

And Goldman isn’t expecting the Fortescue dividend to be anywhere near as generous in FY 2024 and FY 2025.

The broker is forecasting a fully franked FY 2024 final dividend of 83 cents per share and then total dividends of 93 cents per share in FY 2025.

If we assume the usual second-half weighting for its dividend payments, this could mean an interim dividend of 39 cents per share for FY 2025.

This brings its total estimated dividends for the next 12 months to $1.22 per share. Based on its current share price, this would mean a 4.6% dividend yield. And for those 378 shares, it would generate $461.16 in dividends.

This leaves us with a holding valued at $6,849.36 including dividends, well short of our initial investment of $10,000.

Commenting on its sell rating, Goldman said:

We continue to rate FMG a Sell on: 1. Relative valuation: the stock is trading at a premium to RIO & BHP on our estimates; 1.4x NAV vs. BHP at c. 0.9x NAV and RIO at 0.9x NAV, ~7.0x NTM EV/EBITDA (vs. BHP/RIO on c. 5.5x/4.5x), and c. 2% FCF vs. BHP/RIO on c. 6%/7%.

Though, it is worth acknowledging that Goldman has been calling Fortescue shares overvalued for well over a year and this didn’t stop them smashing the market over the past 12 months. So, it certainly isn’t set in stone that this miner’s shares are about to crash. But don’t be surprised if they do.

The post How much could $10,000 invested in Fortescue shares be worth next year? 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 Goldman Sachs Group. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.