Category: Stock Market

The average age at retirement among Australia’s existing 4.2 million retirees in FY23 was 56.9 years, according to new figures from the Australian Bureau of Statistics (ABS).

However, the average age at which most people intend to hang up their boots is 65.4 years.

If we dig a little deeper, we find that the average age at which people intend to retire differs between industries.

Let’s find out more.

Average age of retirement in Australia

The ABS Retirement and Retirement Intentions report reveals that 130,000 people retired in 2022.

The average age of those 130,000 new retirees was 64.8 years. For men, the average age was higher at 66.9 years. For women, it was lower at 63.2 years. 

Women typically take up retirement sooner than men, however it seems they are doing so a bit later now.

In FY21, the average age of the entire female retiree community was 54 years. This had increased to 54.7 years by FY23.

Men are also retiring a bit later. The average age of all male retirees in FY21 was 59.3 years, and in FY23, it was 59.4 years.

Top 3 reasons for retirement

Over the next five years, 710,000 Australians intend to retire, and 226,000 intend to do so over the next two years.

Australians’ motivations for retirement differ, and two of the three top reasons are beyond their control.

The most common reason for choosing retirement was access to financial support (31% of respondents).

This includes reaching retirement age, which is the age at which Australians are eligible to receive the age pension. Currently, it’s 67 years old. Either that or becoming eligible to access their superannuation (i.e., reaching or being older than their preservation age).

Preservation ages vary depending on when a person was born. For those born after 30 June 1964, it’s 60 years.

Currently, the age pension is the main income source for most Australians in retirement. Superannuation is the second most common main income source.

Bjorn Jarvis, ABS head of labour statistics said:

In 2022-23, a Government pension or allowance was still the main source of personal income at retirement for 43 per cent of retirees. This was followed by Superannuation, an annuity or private pension at 27 per cent.

The second most common reason for retirement was sickness, injury or disability (13% of respondents).

The third most common was being retrenched, dismissed or not being able to find employment (5%).

Other reasons included to care for an ill, disabled or elderly person (4% of women and 3% of men).

How does the average age of retirement vary across industries?

People working in agriculture, forestry and fishing have the highest intended age of retirement of 68.3 years. This is followed by those working in real estate at 67.1 years and manufacturing at 66.1 years.

At the other end of the scale, mining workers have the earliest intended age of retirement at 63.7 years.

Information media and telecommunications workers are next at 64 years, then financial and insurance services workers at 64.3 years.

Average superannuation balance at retirement

The average superannuation balance of Australians aged 65 to 69 years is $428,738, according to the Australian Taxation Office. The median balance is $207,540.

The average superannuation balance for men is $453,075 and the average for women is $403,038. The median for men is $213,986 and the median for women is $201,233.

According to the AFSA Retirement Standard, these amounts plus a part pension are more than enough to fund a modest retirement lifestyle for homeowners.

ASFA defines a modest lifestyle as having money for daily essentials, basic health cover, and occasional leisure activities.

To fund a modest lifestyle, both singles and couples need $100,000 in superannuation at age 67, plus a part-pension, to cover annual living expenses of $46,944 for couples and $32,666 for singles.

The post What’s the average age of retirement in Australia? appeared first on The Motley Fool Australia.

More reading

• ‘All-growth’ superannuation funds return nearly 10% in 10 months
• 2 no-brainer ASX 200 shares to buy next week
• Here’s how the ASX 200 market sectors stacked up last week
• Are AMP shares a significantly underrated buy right now?
• Analysts say these small cap ASX shares can deliver big returns

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 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.

Superannuation funds focused on growth investments are delivering the best returns for investors in FY24.

A new report from research, data, and analytics provider Chant West shows ‘all growth’ superannuation funds have returned 9.8% over the 10 months ending 30 April within the 2024 financial year (FY24).

All growth funds invest 96% to 100% of funds in growth assets such as ASX shares and international shares.

The next best performer is ‘high-growth’ superannuation funds, with 81% to 95% of monies invested in growth assets. They’re sitting on returns of 8.4% in FY24 to 30 April.

Chant West says median ‘growth’ superannuation funds, which comprise 61% to 80% growth assets, have returned 6.9% over the first 10 months of FY24.

Balanced funds, which invest 41% to 60% of monies in growth assets, have earned 5.7% returns.

Conservative funds, with just 21% to 40% in growth assets, have delivered a more modest 4.2% return on investment.

Balanced and conservative funds have more exposure to defensive assets such as cash and bonds. They are popular with investors who are near retirement and, thus, more focused on capital preservation.

Younger workers tend to go for growth fund options because they have longer runways to retirement, and can therefore withstand more volatility and take on more risk for higher returns.

What factors are affecting superannuation returns?

Chant West Senior Investment Research Manager Mano Mohankumar says both shares and bonds fell in April as the likelihood of interest rate cuts by the US Federal Reserve in the first half of 2024 diminished.

Mohankumar said:

Over the month, Australian shares fell 2.9%. International shares slipped 3.2% and 3.3% in hedged and unhedged terms, respectively. Bonds too had a disappointing month as Australian and international bonds fell 2% and 1.7% respectively, as bond yields rose.

However, the big story is the healthy return over the financial year to date, despite all of the uncertainty around inflation and expectations of when the Fed will start cutting rates, not to mention ongoing geopolitical tensions.

Mohankumar said superannuation investors should “put short-term noise aside and focus on the long game”.

He said:

Over the long term, super funds continue to meet their return and risk objectives and our estimate of 8% for FY24 puts super funds on pace for a 13th positive return out of 15 years.

If you’re thinking of boosting your superannuation with extra funds before the end of the financial year, Vanguard Australia provides 5 tips on how to get more money into your super by 30 June.

As we recently covered, there were two changes to superannuation in the recent Federal Budget.

The post ‘All-growth’ superannuation funds return nearly 10% in 10 months appeared first on The Motley Fool Australia.

More reading

• 2 no-brainer ASX 200 shares to buy next week
• Here’s how the ASX 200 market sectors stacked up last week
• Are AMP shares a significantly underrated buy right now?
• Analysts say these small cap ASX shares can deliver big returns
• Top brokers name 3 ASX shares to buy next week

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 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.

There are a lot of quality companies for investors to choose from on the Australian share market.

But two excellent ASX 200 shares that stand out as no-brainers for me are listed below. Here’s why analysts think they could be top buys:

ResMed Inc. (ASX: RMD)

ResMed could be a no-brainer ASX 200 share to buy now. It is one of the world’s leading sleep disorder treatment companies.

This certainly is a great market to lead. For example, analysts estimate that obstructive sleep apnoea (OSA) could afflict over a billion people globally. And with the vast majority of these sufferers undiagnosed, there’s a huge growth runway ahead for ResMed, its technology, and software solutions.

Bell Potter rates the company highly and has it on its favoured list with a buy rating and $36.00 price target. It commented:

The market for OSA and chronic obstructive pulmonary disease (COPD) remains under penetrated, and we expect industry volume growth to continue in the 6-8% range for the foreseeable future. In this regard, the competitive dynamics are very much in favour of RMD due to the Philips recall and improving semiconductor availability. Looking ahead, ResMed continues to expect device sales to be sequentially higher throughout CY2023. Furthermore, ResMed is well-positioned to build on its dominant share even after Philips returns to the global market, with the launch of its latest continuous positive airway pressure (CPAP) device, the Air Sense 11.

Xero Ltd (ASX: XRO)

Another no-brainer ASX 200 share for investors to consider buying is cloud accounting platform provider Xero.

It has been growing at a rapid rate in recent years thanks to the shift online and the quality and popularity of its platform. At the last count, the company had 4.16 million subscribers globally.

The good news is that Goldman Sachs believes its growth still has a very long way to go and estimates its market opportunity to be 100 million+ small businesses. In response to its full year results last week, the broker has reiterated its conviction buy rating with an improved price target of $164.00. The broker commented:

We see Xero as very well-placed to take advantage of the digitisation of SMBs globally, driven by compelling efficiency benefits and regulatory tailwinds, with >100mn SMBs worldwide representing a >NZ$100bn TAM. Given the company’s pivot to profitable growth and corresponding faster earnings ramp, we see an attractive entry point into a global growth story with Xero our preferred large-cap technology name in ANZ – the stock is Buy rated.

The post 2 no-brainer ASX 200 shares to buy next week appeared first on The Motley Fool Australia.

More reading

• Here’s how the ASX 200 market sectors stacked up last week
• Top brokers name 3 ASX shares to buy next week
• Could the Xero share price leap a further 35% as profits begin to flow?
• Brokers name 3 ASX shares to buy now
• 5 things to watch on the ASX 200 on Friday

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

Tech shares led the ASX 200 market sectors last week with a 2.8% gain over the five trading days.

Meantime, the S&P/ASX 200 Index (ASX: XJO) lost 1.69% to finish the week at 7,727.6 points.

Only four of the 11 market sectors finished the week in the green.

Let’s review.

Technology shares led the ASX sectors last week

The big news among ASX 200 tech stocks last week was the full-year FY24 results of Xero Limited (ASX: XRO).

The company reported a 22% year-over-year increase in operating revenue to NZ$1.71 billion and 419,000 new subscribers, which gives it a total subscriber base of 4.16 million.

Xero’s gross margin moved up from 87.3% to 88.2%, and the company reported a net profit after tax (NPAT) of NZ$174.6 million, up from a loss of NZ$113.5 million in FY23.

Xero shares lifted 7.83% over the week to finish on Friday at $131.19 per share.

TechnologyOne Ltd (ASX: TNE) shares also had a great week, rising 12.11% to finish at $17.78 apiece on Friday.

TechnologyOne released its half-year results, revealing a 16% rise in profit after tax to $48 million. Investors will share in its success via a record interim dividend of 5.08 cents per share franked at 65%.

The biggest ASX tech stock Wisetech Global Ltd (ASX: WTC) moved 1.22% higher last week to close at $98.67 on Friday. Nextdc Ltd (ASX: NXT) shares lifted 0.69% to $17.59 apiece.

In global tech news, Nividia Corp revealed yet another jaw-dropping set of financial results last week, sending the share price above US$1,000 for the first time.

The artificial intelligence (AI) hardware manufacturer’s 1Q FY25 earnings report revealed a 262% revenue increase to US$26 billion year over year, with expectations of US$28 billion next quarter. On an adjusted basis, earnings per share (EPS) went from $1.09 to $6.12, beating consensus analyst estimates of $5.59.

Nvidia also announced a 10-for-1 forward stock split. Shareholders on the record on 6 June will receive nine extra Nvidia shares for each one they already own after the market close on Friday, 7 June.

Nvidia’s amazing results helped the NASDAQ reach a new all-time high of 16,996.39 points last week. The popular Betashares Nasdaq 100 ETF (ASX: NDQ) rode the momentum to reach a record $43.23 per share.

ASX 200 market sector snapshot

Here’s how the 11 market sectors stacked up last week, according to CommSec data.

Over the five trading days:

S&P/ASX 200 market sector	Change last week
Information Technology (ASX: XIJ)	2.8%
Utilities (ASX: XUJ)	2.34%
Energy (ASX: XEJ)	1.23%
Industrials (ASX: XNJ)	0.91%
Financials (ASX: XFJ)	(0.85%)
Healthcare (ASX: XHJ)	(0.89%)
Consumer Staples (ASX: XSJ)	(1.27%)
Materials (ASX: XMJ)	(1.49%)
A-REIT (ASX: XPJ)	(2.47%)
Communication (ASX: XTJ)	(3.71%)
Consumer Discretionary (ASX: XDJ)	(4.34%)

The post Here’s how the ASX 200 market sectors stacked up last week appeared first on The Motley Fool Australia.

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• Buy and hold these ASX ETFs for 10 years
• Could the Xero share price leap a further 35% as profits begin to flow?

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 BetaShares Nasdaq 100 ETF, Nvidia, Technology One, WiseTech Global, and Xero. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF, WiseTech Global, and Xero. The Motley Fool Australia has recommended Nvidia and Technology One. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The AMP Ltd (ASX: AMP) share price has had its fair share of challenges in recent years. It’s trading 3% higher than it was 12 months ago but is down a hefty 50% in the last five years.

The ASX financial share has suffered, as we can see in the graph below, but the company may be showing signs of a possible turnaround.

Of course, an occasional positive update doesn’t mean AMP is on track for sustained recovery, but the last quarterly numbers are the latest evidence investors can analyse.

Let’s recap how the ASX financial share performed in the first three months of 2024.

Quarterly update

AMP reported that its total deposits at AMP Bank grew to $21.4 billion at 31 March 2024, up from $21.3 billion at 31 December 2024. However, the bank’s total loan book fell to $23.5 billion, down from $24.4 billion at the end of the 2023 final quarter.

AMP’s platforms’ net cash flows were $201 million, up 32% year over year from $152 million in the first quarter of 2023. North inflows from independent financial advisers (IFAs) increased 22%, compared to the first quarter of 2023, to $544 million.

This led to platforms’ assets under management (AUM) increasing to $74.3 billion at 31 March 2024, up from $71.1 billion at 31 December 2023. Superannuation and investments’ AUM increased to $54.1 billion at 31 March 2024, up from $51.9 billion in the previous quarter.

AMP CEO Alexis Goerge said:

We are navigating the headwinds faced by AMP Bank by carefully managing our loan and deposit books, to help address margin pressures.

We are making good progress on the development of our digital small business and consumer bank offer, launching in Q1 25, to lessen funding risks over the medium term by broadening the customer base and introducing a compelling transaction account offer that will help diversify and build deposits.

Is the AMP share price a buy?

One of the most important share price drivers is whether company earnings are growing or predicted to grow.

If AMP’s AUM and/or loan book grows, this would be a tailwind for profit.

The broker UBS has forecast the company’s net profit after tax (NPAT) could rise to $220 million in FY24, up 12% from FY23. NPAT is then forecast to grow to $253 million in FY25, $255 million in FY26, $259 million in FY27 and $263 million in FY28.

If those predictions prove accurate, profit is expected to grow by around 20% between FY24 and FY28. However, a significant majority of the improvement of profit over that period is forecast to happen in FY25.

The broker UBS rates AMP as a sell, with a price target of 98 cents. That implies a possible fall of more than 10% from its current level.

UBS believes AMP has a “weak earnings outlook” following the reduction in banking lending as it sought to defend its lending margins. AMP’s wealth and bank flows were below UBS’ forecasts for the first quarter of 2024.

Based on the UBS forecast, the AMP share price is valued at 14x FY24’s estimated earnings.

The post Are AMP shares a significantly underrated buy right now? appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• Here is the dividend forecast to 2026 for AMP shares
• Here are the top 10 ASX 200 shares today
• Why AMP says interest rates won’t rise next week

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 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.

If you have a high risk tolerance, then it could be worth adding some small cap ASX shares to your portfolio.

But which small caps could offer a compelling risk/reward?

Listed below are two small caps that analysts are very bullish on right now. Here’s what they are saying about them:

AVITA Medical Inc (ASX: AVH)

The first small cap ASX share that could be a buy according to analysts is AVITA Medical.

It is a regenerative medicine company with a focus on wound care management and skin restoration with its RECELL technology.

Morgans is positive on the company and sees significant value in its shares at current levels. It commented:

AVH is a regenerative medicine company focusing on the acute wound care market. It has recently expanded its indication into full thickness skin defects and Vitiligo (US$5bn TAM). The expanded indication in full thickness skin defects has the required reimbursement in place and sales have started. AVH has provided revenue guidance for FY24 of growth of ~64% and importantly has guided to achieving profitability by 3QCY25. At the same time, the company is seeking approval by the FDA for its automated device RECELL Go, which if successful will launch 1 June 2024, and will be a meaningful driver of rapid adoption by clinicians.

The broker has an add rating and $6.40 price target on its shares. Based on the current AVITA Healthcare share price of $2.50, this suggests that the company’s shares could more than double in value over the next 12 months.

Universal Store Holdings Ltd (ASX: UNI)

Another small cap ASX share that could be a buy is Universal Store. It is the youth fashion retailer behind the eponymous Universal Store brand, as well as the Perfect Stranger and Thrills brands.

Bell Potter sees the company as a small cap to buy right now thanks to its store rollout and margin expansion opportunities. It said:

Management execution remains a key strength for UNI and we see good growth trajectory for the name given the building of core brands while growing its store rollout. In our view, the higher margin sales from the majority private label sales should become a major driver of margin improvement and earnings growth, in an expanded store footprint. While we remain cautious on the overall consumer sentiment, given the return to positive comps while cycling elevated pcp through Jan-Feb, we think UNI is well placed as comps become supportive through the 2H.

The broker currently has a buy rating and $6.15 price target on its shares. This implies potential upside of approximately 28% for investors over the next 12 months. The broker also expects 5%+ dividend yields from its shares this year and next.

The post Analysts say these small cap ASX shares can deliver big returns appeared first on The Motley Fool Australia.

More reading

• Buy these ASX dividend stocks for passive income
• Buy these ASX dividend stocks for a passive income boost
• Morgans says these ASX stocks can rise 20% (and pay big dividends!)
• Buy BHP and these ASX dividend stocks
• 2 ASX healthcare shares rocking higher on big news

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

It has been another busy week for Australia’s top brokers. This has led to the release of a number of broker notes.

Three broker buy ratings that you might want to know more about are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

James Hardie Industries plc (ASX: JHX)

According to a note out of the Macquarie equities desk, its analysts have upgraded this building materials company’s shares to an outperform rating with a trimmed price target of $55.00. Although Macquarie concedes that James Hardie’s fourth quarter update and FY 2025 guidance was softer than expected, it believes the selloff of its shares was overdone. Particularly given the broker’s belief that the company’s competitive position is not weakening. In light of this, Macquarie believes that investors should be taking advantage of the weakness by snapping up its shares while they are out of favour. The James Hardie share price was trading at $47.26 on Friday.

Telstra Group Ltd (ASX: TLS)

A note out of Goldman Sachs reveals that its analysts have retained their buy rating on this telco giant’s shares with a lowered price target of $4.25. According to the note, the broker was a disappointed with Telstra’s guidance for FY 2025. Its analysts note that the mid point of Telstra’s underlying EBITDA guidance of $8.4 billion to $8.7 billion was below its expectations. Goldman was also not a fan of management’s decision to scrap its inflation-linked price increases. In response, it has trimmed its earnings and dividend estimates accordingly. However, despite this, the broker sees plenty of value in the company’s shares at current levels and has reaffirmed its buy rating. The Telstra share price was fetching $3.45 at Friday’s close.

Xero Ltd (ASX: XRO)

Another note out of Goldman Sachs reveals that its analysts have retained their conviction buy rating on this cloud accounting platform provider’s shares with an improved price target of $164.00. This follows the release of Xero’s full year results for FY 2024. Goldman notes that Xero achieved sales marginally ahead of expectations and earnings comfortably ahead of them. The broker was also pleased to see Xero exceed its Rule of 40 (41%) and record EBIT margins. This is being underpinned by its strong revenue growth, cost controls, and much lower than expected capex. In response to the result, Goldman has upgraded its earnings estimates through to FY 2026 and lifted its valuation. The Xero share price ended the week at $131.19.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

More reading

• Could the Xero share price leap a further 35% as profits begin to flow?
• Brokers name 3 ASX shares to buy now
• Is the Telstra share price too cheap?
• 2 of the best passive-income-focused ASX shares to consider buying in June
• 5 things to watch on the ASX 200 on Friday

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

If you’re hoping to retire with the support of some handy extra passive income, you may want to consider the benefits of owning S&P/ASX 200 Index (ASX: XJO) dividend shares.

Particularly those companies that pay fully franked dividends. This can make a sizeable difference to the amount of passive income you get to hold onto at tax time. Especially once you’ve retired.

We’ll look at four top ASX 200 dividend shares below that I’d buy for passive income heading into retirement.

Do note, however, that a properly diversified income portfolio should contain a larger number of stocks to reduce the overall investment risk. While there’s no magic number, 10 is a decent yardstick, ideally operating in various sectors and locations.

Also, remember that the yields you generally see quoted are trailing yields. Future yields may be higher or lower, depending on a range of company-specific and macroeconomic factors.

With that said…

Four ASX 200 dividend stocks for passive income in retirement

The first company I’d buy for passive income if I were hoping to retire is ASX 200 bank stock Bendigo and Adelaide Bank Ltd (ASX: BEN).

Over the past 12 months, Bendigo Bank paid a fully franked final dividend of 32 cents per share on 29 September and an interim dividend of 30 cents per share on 26 March. This equates to a full year’s payout of 62 cents per share.

At Friday’s closing price of $10.89 a share, this ASX dividend stock trades on a fully franked trailing yield of 5.69%. The Bendigo share price is up 24.74% over 12 months.

The second ASX 200 dividend stock I’d buy for passive income to boost my retirement is mining giant BHP Group Ltd (ASX: BHP).

BHP’s dividends have come down from the all-time highs we saw in 2021 and 2022 amid a retrace in iron ore prices. But I think the future income potential from the miner looks strong, regardless of what happens with its ongoing takeover efforts of Anglo American (LSE: AAL).

BHP paid a final fully franked dividend of $1.251 a share on 28 September and an interim dividend of $1.096 on 28 March. That works out to $2.347 per share for the full year.

At Friday’s closing price of $44.64, BHP shares trade on a fully franked trailing yield of 5.26%. The BHP share price is up 4.25% over 12 months.

Which brings us to the third ASX 200 dividend share I’d buy for passive income to boost my retirement, bank stock Commonwealth Bank of Australia (ASX: CBA).

Australia’s biggest bank paid a final fully franked dividend of $2.40 per share on 28 September. That was up 14% from the prior final dividend. CBA increased its interim dividend by 2.4% to $2.15 per share. Eligible investors will have seen that hit their bank account on 28 March.

All told then, CBA paid a total of $4.55 in dividends over the full year. At Friday’s closing price of $118.87, CBA shares trade on a fully franked trailing yield of 3.83%. The CBA share price is up 18.95% over 12 months.

Which brings us to the fourth ASX 200 dividend share I’d buy for passive income now in preparation for retirement, coal stock New Hope Corp Ltd (ASX: NHC).

Although coal prices have come off the boil from their own record highs, I believe strong global demand should support prices at current levels and potentially see them tick higher approaching northern winter this year.

As for the past 12 months, New Hope paid a final fully franked dividend of 30 cents per share on 7 November and an interim dividend of 17 cents per share on 1 May for a full-year passive income payout of 47 cents per share.

At Friday’s closing price of $4.98 a share, New Hope shares trade on a fully franked trailing yield of 7.63%. The New Hope share price is down 5.14% over 12 months.

The post Hoping to retire? I’d buy these ASX 200 dividend shares for passive income appeared first on The Motley Fool Australia.

More reading

• What are brokers saying about BHP shares following the miner’s quarterly results?
• ASX 200 coal stocks sink amid ‘very negative message’ from Queensland government
• Global companies just paid a record $512 billion in Q1 dividends. Here’s how ASX 200 shares stacked up
• ASX 200 bank shares: How dividends offset poor capital growth over 10 years
• Should you buy BHP shares after recent weakness?

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Bendigo And Adelaide Bank. 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.

This can make it hard to decide which ASX dividend shares to buy above others.

But never fear, listed below are four options that are highly rated by brokers. They are as follows:

Coles Group Ltd (ASX: COL)

The first ASX dividend share that could be a buy is supermarket giant Coles.

That’s the view of analysts at Morgans, which have an add rating and $18.70 price target on its shares.

As for dividends, the broker is forecasting fully franked dividends of 66 cents per share in FY 2024 and 69 cents per share in FY 2025. Based on the current Coles share price of $16.11, this implies dividend yields of approximately 4.1% and 4.3%, respectively.

Dexus Convenience Retail REIT (ASX: DXC)

Another ASX dividend share that analysts are positive on is Dexus Convenience Retail REIT. It owns a portfolio of service station and convenience retail assets across Australia.

Morgans is also feeling positive about this company. It has an add rating and $3.23 price target on its shares.

As for income, the broker is expecting its shares to provide income investors with some very big yields in the coming years. It has pencilled in dividends per share of 21 cents in both FY 2024 and FY 2025. Based on its current share price of $2.67, this implies yields of 7.9%.

Rural Funds Group (ASX: RFF)

Another ASX dividend share that has been given the thumbs up by analysts is Rural Funds. It is an agricultural property company that owns a portfolio of assets across several categories. This includes orchards, vineyards, cattle, and poultry.

The team at Bell Potter thinks income investors should be buying its shares. The broker has a buy rating and $2.40 price target on them.

In respect to income, the broker is forecasting dividends per share of 11.7 cents in both FY 2024 and FY 2025. Based on the current Rural Funds share price of $2.02, this will mean yields of 5.8% for income investors across both financial years.

Super Retail Group Ltd (ASX: SUL)

A fourth and final ASX dividend share that could be a buy according to analysts is Super Retail. It is the owner of retail brands BCF, Macpac, Rebel, and Super Cheap Auto.

Goldman Sachs rates the company as a buy and has a $17.80 price target on its shares.

As well as plenty of upside, Goldman is expecting the retailer to offer attractive dividend yields. 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 $12.74, this will mean good yields of 5.25% and 5.7%, respectively.

The post Analysts say these 4 ASX dividend shares are buys appeared first on The Motley Fool Australia.

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• Top ASX stock to buy as a thrifty investor (the old Warren Buffett way)

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 Coles Group, Rural Funds Group, and Super Retail Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Most readers probably wouldn’t say no to owning a seven-figure investment portfolio. But getting to a $1,000,000 portfolio of ASX shares is no easy feat. It requires years of patience and discipline to be sure. However, the most important factor that will determine if one can get to a million-dollar portfolio is the harnessing of the power of compounding.

Compound interest was not called the eighth wonder of the world by Einstein for nothing. It refers to earning interest on already-earned interest, and is the only real way most of us can effectively and efficiently build wealth on the share market outside of getting lucky on a moonshot investment.

Even the legendary investor Warren Buffett almost entirely credits compounding as the reason why he is worth ~US$130 billion today. Buffett once said “My wealth has come from a combination of living in America, some lucky genes, and compound interest”.

It also explains how his company Berkshire Hathaway Inc (NYSE: BRK.A)(NYSE: BRK.B) is worth US$876 billion right now.

It isn’t too difficult to understand how the powers of compounding can exponentially grow your wealth over time.

Let’s take a simple ASX index fund like the Vanguard Australian Shares Index ETF (ASX: VAS) to demonstrate. Since its ASX inception in 2009, this exchange-traded fund (ETF) has returned an average of 8.97% per annum (assuming dividends are reinvested).

Compounding: How to get to a $1,000,000 portfolio of ASX shares

Let’s say this index fund returns that same rate over the next 40 years (which one should never bank on, as past returns are no guarantee of future success). If one invested just $500 a month into this fund at that rate of return and reinvested all dividend distributions, they would have $97,815 after ten years. Not bad.

But if they just kept at it for another ten years, that $97,815 would grow to $335,660. After another ten, they would have $916,970, which would hit $2.34 million if yet another ten years go by.

That’s compounding in action—earning interest on interest on interest. The more time it has, the faster your wealth grows. So, using a simple ASX index fund generating a fairly standard return, you can see how this power of compounding, as well as patience and discipline, can get anyone to a seven-figure ASX share portfolio.

Of course, you can do a few things to juice up your returns as well.

It always helps to invest more. If you can stretch from investing $500 a month to $800, you’d end up with $3.74 million after those four decades instead of $2.34 million.

If you learn about active share market investing and manage to pick out a portfolio of individual shares that return a collective 12% per annum instead of 8.97%, you’d have almost $6 million in shares after those 40 years, rather than $2.34 million.

As such, you can see how this one simple concept of compound interest can work wonders for anyone’s wealth and can even get you a $1,00,000 portfolio.

The post $1,000,000 portfolio: One way to achieve 7-figure wealth appeared first on The Motley Fool Australia.

More reading

• Here’s what $10,000 invested in the Vanguard Australian Shares Index ETF (VAS) at the start of 2023 is worth now
• Could buying the Vanguard Australian Shares Index ETF (VAS) at under $100 help me retire early?
• How I plan to invest my tax cuts
• How much money should I put in one ASX ETF?
• 3 things about Vanguard Australian Shares Index ETF (VAS) every smart investor knows

Motley Fool contributor Sebastian Bowen has positions in Berkshire Hathaway and Vanguard Australian Shares Index ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Berkshire Hathaway. The Motley Fool Australia has recommended Berkshire Hathaway. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.