Owning BHP Group Ltd (ASX: BHP) shares is popular for passive income, but it’s not the only ASX dividend stock that can provide a sizeable dividend yield.

The ASX mining share generates strong cash flow and usually decides on a generous dividend payout ratio, but we don’t want to put all of our investment eggs in one basket. I think it’s worthwhile owning a variety of businesses that can offer strong dividends.

I like BHP’s commodity diversification, including iron ore, copper, and potash, and the two stocks below could be useful additions.

Coles Group Ltd (ASX: COL)

Coles is one of the largest supermarket businesses in Australia. We all need to eat, so I think the business is capable of producing defensive earnings. It could provide a more consistent earnings and dividend profile than BHP shares, in my opinion.

If I’m investing for passive income, ideally the payouts can continue even if there’s an economic downturn.

The ASX dividend stock has managed to keep increasing its annual payout each year since it demerged from Wesfarmers Ltd (ASX: WES) and became its own business in late 2018.

The supermarket business continues to see solid sales performance – in the third quarter of FY24, supermarket revenue rose 5.1% to $9.06 billion. If it can continue growing at this pace, it could outperform Woolworths Group Ltd‘s(ASX: WOW) sales.

According to the estimates on Commsec, owners of Coles shares could receive a grossed-up dividend yield of 5.5% in FY24 and 6.7% in FY26.

Step One Clothing Ltd (ASX: STP)

Step One is a direct-to-consumer online retailer of ‘innerwear’. Its exclusive range is, according to the company, “high quality, organically grown and certified, sustainable, and ethically manufactured innerwear”.

I think the company offers a compelling product. There is a certain level of demand for ‘greener’ products in a world that aims for net zero emissions in 2050.

The company currently makes a majority of its revenue in Australia, but excitingly it’s growing in the UK and the US, which are much larger markets. In the FY24 first-half result, UK revenue rose 38% to $14.6 million and US revenue increased 256% to $4.1 million. This helped total revenue increase 25.5% to $45 million in HY24.

The HY24 result also saw increasing profit margins, with net profit after tax (NPAT) rising by 34.7% to $7.1 million.

The ASX dividend stock is pursuing several growth initiatives, such as expanding its women’s product lines, forming partnerships with retailers and organisations, entering the US market with its women’s product lines, and diversifying its sales channels and marketplaces.

It currently has a grossed-up dividend yield of 8%, which is a solid starting yield, in my opinion.

The post Overinvested in BHP shares? Here are two alternative ASX dividend stocks appeared first on The Motley Fool Australia.

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

The COVID-19 pandemic transformed our lives in many ways. Some changes were temporary, but others have stayed with us.

One significant change is the shift in consumer behaviour. The surge in online shopping and demand for faster delivery times have added extra pressure on inventory supply and logistics. In response, many retailers are seeking options to enhance their warehouses and logistics centres.

In this article, we’ll see two ASX-listed companies benefitting from this global trend.

Why are industrial properties doing well?

Ideally, these logistics centres should be located near metropolitan areas to provide quick access to large consumer markets and minimise transportation costs and delivery times.

However, the availability of land surrounding these strategic locations is limited, with competing priorities for residential and other commercial uses exacerbating the shortage in land supply. Colliers elaborates on this dynamic in its report, saying:

Demand for Australian industrial and logistics assets remains significant, with an unprecedented amount of capital seeking to expand or enter the sector.

Record infrastructure spending on transport projects, coupled with the continued growth of e-commerce and low cost of debt has underscored demand, particularly along the east coast states where 78% of the Australian population resides.

As reported by The Sydney Morning Herald, industrial properties are also benefiting from other factors. For example, there’s a big increase in data centres powered by artificial intelligence (AI). In addition, property investors are moving their interest away from offices, which don’t have much demand right now.

Which ASX shares are ways to capitalise on this trend?

Goodman Group (ASX: GMG) is a global integrated commercial and industrial property group. The company particularly specialises in owning, developing, and managing industrial real estate assets.

In May, the company reported strong 3Q FY24 results, led by 4.9% like-for-like net property income growth and 98% occupancy across its partnerships. The robust business results led management to raise the company’s full-year guidance, expecting operating earnings per share growth of 13% in FY24.

As my colleague James highlighted here, Goodman CEO Greg Goodman remains optimistic about the company’s future outlook. He said:

The Group continues to execute on its strategy. The challenge of the uncertain interest rate environment, persistent inflation, combined with slowing economic growth, is prolonging volatility in global markets and increased cost of capital.

In the near term, we believe aggregate logistics demand is likely to remain at more moderate levels compared to that experienced in the pandemic period. However, supply has been significantly reduced globally, and is generally very constrained in our markets.

Our customers remain focused on maximising productivity from their space, preferring infill locations and increasing their investments in technology and automation. Combined with the scarcity of available assets in the markets we operate, should support rental growth and high occupancy.

The Goodman share price is up 77% over the last 12 months.

Brickworks Ltd (ASX: BKW) is a building materials provider on the surface but an industrial property developer at the heart. As I highlighted in this earlier article, much of Brickworks’ net tangible asset (NTA) worth $5.6 billion comes from its investments in listed shares and property ventures, which the company estimates to be worth $3.3 billion and $2 billion, respectively.

In fact, its building material business accounts for less than 15% of its NTA, with the remainder comprising the company’s large stake in Washington H Soul Pattinson & Company (ASX: SOL) and property development joint ventures with Goodman group.

Brickworks owns many parcels of land in prime locations around metropolitan areas, previously utilised for manufacturing building materials. Brickworks partnered with Goodman Group to develop its land holdings. Over time, the partnership has evolved, leading to Brickworks’ property division now managing two 50%/50% joint venture property trusts.

One of its important land holdings is in Oaklands Estate located in Western Sydney, which is partially developed. Brickworks’ current rent in this area is well below the market rate, leaving room for rental income growth in the future. The company explained this in a recent investor presentation by saying:

Theses structural trends, along with land supply issues, have driven up rent for prime industrial property in western Sydney by 55% in the past two years. We estimate that the current passing rent within the Industrial JV Trust of $147/m2 is now 35% below average market rent of $225/m2.

Including the Brickworks Manufacturing Trust, the current annualised rent across our portfolio is $172 million. At market rates, the rent potential of Property Trust assets once fully developed is around $340 million. This includes an additional $88 million in rent from completion of our development estates (Oakdale West and Oakdale East) in western Sydney over the next five years.

The Brickworks share price is up just 1.45% over the last 12 months.

The post 2 ASX companies that could benefit from warehouse shortages appeared first on The Motley Fool Australia.

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• 2 cheap ASX property shares I’d buy in retirement
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• Down 17% in 3 months, is it time to buy this ASX 200 dividend superstar?
• Leading brokers name 3 ASX shares to buy today

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

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Shares of Apple (NASDAQ: AAPL) were on a tear Tuesday morning, with the stock adding as much as 6.7%. As of 1:53 p.m. ET, the stock was still up 6.2%.

The catalyst that sent the iPhone maker higher was the company’s big artificial intelligence (AI) reveal to kick off Apple’s Worldwide Developer Conference (WWDC).

The long-awaited announcement

Investors have been waiting since early last year for insight into Apple’s plans to join the AI revolution. At the WWDC keynote yesterday, CEO Tim Cook finally detailed the company’s plans, and Wall Street’s response was extremely bullish.

The biggest revelation was the debut of Apple Intelligence, which will provide on-device generative AI processing across the company’s entire product line while also maintaining Apple’s famous emphasis on security.

Siri will get a long-awaited AI upgrade and have a greater ability to interact with other iPhone apps. ChatGPT will also be integrated into the iPhone, giving users the option to engage the chatbot for specific topics. Apple also unveiled a host of other AI-powered features that will debut with iOS 18, which will be released this fall.

Wall Street is once again bullish on Apple

Many investors had taken a “wait and see” approach with Apple, worried about waning sales of its flagship iPhone. However, in the wake of the company’s presentation, Wall Street has turned decidedly bullish.

Wedbush analyst Dan Ives expressed the prevailing sentiment, suggesting the addition of these new tools to the iPhone will spark “an AI-driven iPhone upgrade cycle starting with iPhone 16.” The analyst also suggested AI will add $30 to $40 per share to Apple’s growth story.

Even as big tech has staged a significant rally over the past year, Apple’s stock has been the outlier, up just 7%, compared to 25% gains for the S&P 500. A laundry list of AI-powered features will likely mark the dawn of the next upgrade cycle, boosting the company’s results and putting Apple back in investors’ good graces. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Apple stock popped Tuesday morning appeared first on The Motley Fool Australia.

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

Having a superannuation account with $2 million sitting in it is a prospect that many Australians would find both equally tantalising and sobering.

Tantalising because $2 million in super is enough to fund not just a comfortable retirement, but a lavish one. It would imply that one could enjoy an annual income of at least $80,000 (using the 4% rule) without even drawing down on the principal of that $2 million balance.

But it is also sobering because, as we’ve discussed many times here at the Motley Fool, most Australians’ current superannuation balances are not nearly adequate to get them to $2 million before they hit the age of 67. As we discussed just last month, the average superannuation balance for someone aged between 70 and 74 in Australia was recently pinpointed at just $481,483.

But even if you’re on a salary that is decidedly not in the 1% of income earners in Australia, I think getting to a superannuation balance of $2 million is possible for many of us. Here’s how I would plan it.

How to hit $2 million in your superannuation fund

I would start by making sure your superannuation contributions are being invested in the most efficient manner possible. Most super funds put your cash into what’s known as a ‘balanced’ fund. It is called that because it balances the aim for maximising returns with the desire of many Australians to minimise volatility in their super funds.

Your fund walks this tightrope by investing your money into a range of different asset classes, all with different historical rates of return and levels of volatility. There are ASX and international shares to maximise portfolio growth. But there are also bonds and cash investments that trade lower long-term returns for volatility protection.

Not all things should be balanced

This might be good for your peace of mind, but it can be deleterious to your retirement.

We don’t need to access our super until we’ve reached retirement age. So if you’re in your 20s, 30s, or 40s, you should arguably be prioritising portfolio returns over reducing volatility. Opting for a shares-only ‘growth’ option in your super fund can, therefore, make a big difference to one’s final superannuation balance.

AustralianSuper tells us that their ‘Balanced’ option has returned an average of 8.16% per annum over the ten years to 30 June 2023. But their share-based ‘High Growth’ portfolio has achieved a 9.62% return.

That might not seem like much, but it would make a huge difference over decades. Let’s say someone started off investing $400 into a super fund every month (for argument’s sake, we’ll disregard the superannuation guarantee) and got a return of 8.16%. After 40 years, they would have a balance of approximately $1.31 million (not taking into account fees and taxes).

But if they instead achieved that higher return of 9.62% per annum, they would instead have $1.93 million to their name.

There’s no guarantee that those rates of return will be consistent going forward. However, I think most Australians under 50 should opt for a higher-growth option for their super. It is arguably an essential step if you ever wish to get to a $2 million retirement fund over your career.

A little extra superannuation goes a long way

Another way you can potentially boost your super fund to hit $2 million is by making extra superannuation contributions. The Australian Taxation Office (ATO) allows most Australians to make both before- and after-tax super top-ups, which can be a very tax-efficient way to build wealth.

So, let’s say our investor from earlier increases their super contributions from $400 a month to $500. Instead of ending up with $1.93 million after 40 years, they would have a nest egg worth $2.31 million.

Of course, finding extra cash to put into super is a tough ask for many, given the current cost-of-living crisis. But we can’t ignore the fact that this is probably going to be essential if you want to boost your super fund to $2 million.

Foolish takeaway

Everyone’s financial circumstances are different. As such, it is essential you speak to a financial adviser or tax expert before you start fiddling with your superannuation or making extra contributions. You don’t want to end up paying extra taxes in the pursuit of a $2 million super fund.

However, I think most people have a shot at this pot of gold if they prioritise building up their super funds and ensuring they are getting the best return for their buck.

The post Want a $2 million superannuation fund? Here’s how I’d aim to build one with exactly $400 per month appeared first on The Motley Fool Australia.

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• 2 top ASX 200 passive income stocks I’d buy now to boost my retirement

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 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 BetaShares Australia 200 ETF (ASX: A200) is one of the cheapest exchange-traded funds (ETFs) that Aussies can choose.

Being the cheapest doesn’t necessarily mean being the best, but it should be one factor that investors consider when choosing Australian shares.

Investing is all about making investment returns, after all. Net returns are more important than gross returns because investment costs, like management fees, need to be factored in. If two funds achieve identical gross returns, then fees may be the deciding factor.  

How cheap is the A200 ETF annual management fee?

BetaShares, the provider of the A200 ETF, charges just 0.04% per year.

According to Bloomberg, this is the world’s lowest-cost Australian shares index ETF.

In comparison, The Vanguard Australian Shares Index ETF (ASX: VAS) has an annual management fee of 0.07%. There’s only a three basis point (0.03%) difference between the two, but the VAS ETF fee is close to double what A200 charges.

On the cost side of things, the A200 ETF wins.

What about the returns?

Past performance is not a guarantee of future performance, but I think it can be useful to compare the VAS and A200 ETFs. Their portfolios are similar, but they also have differences.

They both own many of the same businesses, though Betashares A200 has 200 holdings and VAS has 300 holdings. In other words, A200 focuses on the 200 biggest businesses that make up the S&P/ASX 200 Index (ASX: XJO), while VAS owns the next 100 businesses after that as well.

Over the past three years, the A200 ETF has delivered an average annual return of 7.5%, which is more than the VAS ETF’s return of 7.06%.

In the last five years, the VAS ETF has delivered an average annual return of 8%, compared to 8.2% for the A200 ETF.

A200’s larger allocations to the bigger 200 businesses have helped deliver outperformance, though that’s not guaranteed to continue. Sometimes, smaller businesses can deliver outperformance.

Is the A200 a buy?

I think the A200 ETF is worth owning for investors who want exposure to the broad Australian share market or specifically to the largest ASX blue chip shares, such as Commonwealth Bank of Australia (ASX: CBA) and BHP Group Ltd (ASX: BHP).

The A200 ETF has the lowest costs and provides exposure to similar names as the VAS ETF.

Australia’s biggest companies have the financial firepower to deliver scale benefits, which could be why they have outperformed. However, the global share market also delivers strong overall performance thanks to names like Nvidia and Microsoft, so I’d want to ensure I had exposure to those stocks, too.

The post Should you buy the cheapest ASX share ETF? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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.

Aussies understandably love property – it is a large and growing asset class. As such, ASX property shares could be a strong pick for retirement.

Residential property is an expensive investment, with significant transaction costs to buy ( such as stamp duty) and sell (including agent fees). Houses usually don’t come with an appealing net income yield either.

Commercial property could provide the right mix of passive income and growth in value. However, not every property sector is generating good growth, so I’d be selective about office or physical retail opportunities right now.

Industrial property is one of the most exciting areas, which is why I like the two investment ideas below.

Centuria Industrial REIT (ASX: CIP)

Centuria Industrial is a real estate investment trust (REIT), which is a business that owns a portfolio of properties. It is the largest domestic pure-play industrial option, with high-quality assets situated in important urban locations throughout Australia.

The ASX property share is benefiting from its exposure to land-constrained ‘last mile’ locations, which, according to the business, is delivering “robust” rental growth. Tailwinds for industrial property include the continued adoption of e-commerce by Australians and the onshoring of supply chains by companies.

In the first nine months of FY24, the business achieved re-leasing spreads of approximately 50%. In other words, its properties are seeing huge increases in rental income when new leases are signed.

The REIT expects to pay a distribution per unit of 16 cents for FY24, which translates into a distribution yield of 5%.

Brickworks Limited (ASX: BKW)

Brickworks offers multiple ways to get exposure to Australian property, including an investments division that owns approximately a quarter of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL). But I’m going to focus on the property aspects today.

Brickworks produces various building materials, including bricks, paving, masonry, stone, roofing, specialised building systems, cement, and timber battens.

While it doesn’t own residential property, the building materials division allows retired investors to gain exposure to the growing demand for Australian property due to population growth.

Furthermore, Brickworks owns various commercial property assets, including a 50% stake in an industrial property trust. This trust is building huge warehouses on excess land that the ASX property share previously owned.

The completed warehouses are increasing the value of the real estate and unlocking significant rental cash flow for Brickworks.

It currently has a grossed-up dividend yield of 3.5% and hasn’t cut its dividend for almost 50 years. Although future dividends aren’t guaranteed, this could be appealing for investors in retirement.

The post 2 cheap ASX property shares I’d buy in retirement appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The S&P/ASX 200 Index (ASX: XJO) offers a range of attractive passive income stocks that could help boost your retirement outlook.

In building a retirement income portfolio, I’d aim to invest in around 10 ASX dividend shares, with a preference for companies offering franking credits. Those credits should enable me to hold onto more of that passive income when it comes time to pay the ATO its annual dues.

I’d also be sure to buy a diversified mix of ASX 200 stocks operating in various sectors and, ideally, different geographic locations. That will help lower the overall risk to my portfolio.

Below, I look at two top companies I’d buy now in hopes of a wealthier retirement.

Both ASX 200 stocks have long track records of paying out two dividends a year. While their dividend payouts have declined recently, so too have their share prices. That leaves them trading at attractive trailing yields.

And I believe that following the 2024 sell-down, the shares in both companies are now trading at levels that will continue to see them offer market-beating passive income over the longer term.

With that said…

Two ASX 200 passive income stocks to sweeten my retirement

The first company I’d tap to help boost my retirement is ASX 200 funds manager Magellan Financial Group Ltd (ASX: MFG).

The Magellan share price is down by around 10% so far in 2024, having come under selling pressure amid fund outflows in April and May.

While it may be too early to call a bottom, the Magellan share price has orchestrated a solid turnaround in June. Shares closed at $8.46 apiece yesterday, putting the financial stock up 3.55% for the month so far.

I think that should represent an attractive longer-term entry point for passive income investors.

On that front, Magellan paid a final dividend of 69.8 cents a share, franked at 85%, on 7 September. The interim dividend of 29.4 cents a share, franked at 50%, was delivered on 6 March.

That equates to a full-year payout of 99.2 cents a share.

At yesterday’s closing price, Magellan shares trade on a partly franked trailing yield of 11.7%.

This brings us to the second ASX 200 passive income stock I’d buy now to boost my retirement prospects, mining giant Fortescue Ltd (ASX: FMG).

Excepting the bumper year of 2021, Fortescue’s past two dividends remain near historic highs.

And with the Fortescue share price down 19.7% in 2024, closing yesterday at $23.60 a share, I think the big Aussie miner is also now trading at an attractive long-term level.

As for that retirement-lifting passive income, Fortescue paid a fully franked final dividend of $1.00 a share on 28 September. The ASX 200 miner paid its interim dividend of $1.08 a share on 27 March.

That works out to a full-year payout of $2.08 a share.

At yesterday’s closing price, this sees Fortescue shares trading on a fully franked trailing yield of 8.8%.

If I were to invest an equal amount in each company, I’d be eyeing a trailing yield of 10.3%.

Or enough to produce $2,060 in annual passive income from a $20,000 investment portfolio.

The post 2 top ASX 200 passive income stocks I’d buy now to boost my retirement appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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.