If you’re lucky enough to have $8,000 burning a hole in your pocket, then it could be worth looking at putting it to work in the share market.

After all, history shows that you could turn it into something significant over the long-term.

For example, based on an average total return of 10% per annum, a single $8,000 investment would turn into approximately $21,000 in 10 years.

And if you’re able to keep adding to your investments, you could really supercharge your returns thanks to the power of compounding.

Starting with an $8,000 investment and then adding $500 per month would grow to a massive $121,000 in 10 years, all else equal.

But where could be a good place to invest that first $8,000? Listed below are three ASX shares to consider:

Where to invest $8,000?

The first ASX share to look at putting some of the money into is ResMed Inc. (ASX: RMD). It is the world’s leading sleep disorder treatment company with industry-leading hardware and software.

Citi is very bullish on its long-term outlook and has put a buy rating and $34.00 price target on its shares. This implies almost 15% upside for investors.

Where else could investors put their money to get good returns? Well, the team at Goldman Sachs sees plenty of value in Woolworths Group Ltd (ASX: WOW) shares at current levels.

The broker has a conviction buy rating and $40.40 price target, which suggests potential upside of 23% for investors.

Finally, another ASX share that could be a good option for investors is Qantas Airways Limited (ASX: QAN).

Analysts at Morgans think that Australia’s flag carrier airline is severely undervalued at the current level. Last month the broker put an add rating and $6.75 price target on its shares. This implies potential upside of 26% for investors over the next 12 months.

The post Where to invest $8,000 in April 2024 appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Qantas or Telstra share price: Which will climb higher in 2024?
• A ‘once in a lifetime’ opportunity for Qantas shares?
• Buy these ASX 200 blue chip shares for big returns
• 4 defensive ASX shares to own in a greedy market: Macquarie
• Top brokers name 3 ASX shares to buy next week

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

from The Motley Fool Australia https://ift.tt/USQl3v0

The APM Human Services International Ltd (ASX: APM) share price has become an immovable object today as shares enter a trading halt.

Stationary at $1.63 apiece, the employment and health services provider’s shares are locked down until the company responds to the latest development in its pursuit by a private equity firm.

Currently, APM shares are up 29.4% for the year. Meanwhile, the S&P/ASX 300 Index (ASX: XKO) — which APM is a member of — is up a meagre 2.2%.

Pulling the plug

CVC Asia Pacific is now walking away from acquiring APM after serving up a more generous bid on 28 February of $2.00 per share.

Details are sparse right now. All that was said in this morning’s trading halt request was APM had been advised, by way of letter, that it is ‘unable to proceed to finalise a transaction on terms consistent with their non-binding offer as disclosed to the ASX on 28 February 2024’.

This doesn’t give investors much insight into why CVC has chosen to walk back its takeover intentions. One would hope that APM will give clarity when it delivers its response to the decision. However, there is also a chance the private equity firm didn’t elaborate to APM either.

CVC outlined several conditions for its revised takeover bid in February. These included key APM personnel accepting most of the payment as shares. Furthermore, the deal was subject to due diligence and debt financing.

At this stage, it is unclear which of the above items (if any) were the stumbling block for the takeover.

What could it mean for the APM share price?

APM shareholders could be slightly worried about how the share price fares once trading resumes. For context, APM shares were hovering around 84 cents before rumours of an approach surfaced last month.

If the company’s shares were to head back to 84 cents it would represent a 48% fall from its current stature.

However, at that price, APM would trade on a trailing price-to-earnings (P/E) ratio of 10.5 times. Meanwhile, the average P/E ratio for the global professional services industry sits at 21.3 times earnings.

The post APM share price placed on ice as $1.8 billion deal goes dud appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• These 2 ASX 300 shares were just upgraded by brokers
• APM share price leaps 16% on enhanced takeover bid and results
• Why APM, DroneShield, EOS, and NextDC shares are charging higher

Motley Fool contributor Mitchell Lawler 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 APM Human Services International. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/ZVXFDln

The Brainchip Holdings Ltd (ASX: BRN) share price is having a tough session.

In morning trade, the struggling semiconductor company’s shares were down as much as 7.5% to 30.5 cents.

They have since recovered a touch but remain down 6% at the time of writing.

What’s going on with the Brainchip share price?

This morning’s weakness has been driven by another capital call notice from Brainchip this morning.

Unlike most listed companies that raise funds though capital raisings, Brainchip has a put option agreement with a company called LDA Capital.

According to the release, the company has submitted a capital call notice to LDA Capital to subscribe for up to 40 million shares.

Under the Third Amendment of its Put Option Agreement, Brainchip is obligated to advance these shares to LDA no later than 31 March 2024.

The issue price for the shares will be 91.5% of the higher of the average daily volume weighted average price of shares over the pricing period and the undisclosed minimum price notified to LDA Capital by the company.

The pricing period for the Capital Call Notice will begin on 28 March 2024 and will end on the sooner of 7 June 2024 or when the shares have been fully subscribed by LDA Capital. The agreement also allows extensions to the pricing period upon request in the event unsold shares remain at the pricing period ending date.

Brainchip advised that as of the date of the capital call notice, available funding under the agreement amounts to $50.2 million. It is committed to drawing down a minimum of $12 million no later than 31 December 2024.

The company’s underfire CEO, Sean Hehir, commented:

The proceeds raised from the capital call will be used to solidify our go-to-market capabilities by augmenting our machine learning personnel and solution architects who are necessary to support accelerating market adoption of the Akida 2.0 IP offerings.

The company will also bolster the CTO function, enabling radical innovation required to bring large language models, multi-modal operation and other state of art AI to the edge and ensure we remain the industry leaders in hyper-efficient Edge AI.

Investors appear to believe this is an indication that meaningful revenue generation is still some way off (if at all).

The Brainchip share price is down 34% over the last 12 months.

The post Why is the Brainchip share price sinking over 7% today? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why Amcor, Arafura, Brainchip, and South32 shares are tumbling today
• Why BHP, Brainchip, Lake Resources, and Yancoal shares are sinking today
• The Nasdaq just hit a fresh all-time high. What could it mean for Aussie investors?
• 3 no-brainer ASX shares to buy under $30

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

from The Motley Fool Australia https://ift.tt/gbvP6o8

Platinum Asset Management Ltd (ASX: PTM) shares are having a day to forget.

In morning trade, the ASX 300 share is down almost 23% to $1.01.

Why is this ASX 300 share crashing?

Investors have been hitting the sell button in a panic today in response to the release of an announcement out of the fund manager after the market close on Tuesday.

While that announcement was focused on its turnaround program, the company sneaked in a bombshell at the bottom.

According to the release, Platinum Investment Management expects to receive partial redemptions of at least $1.4 billion from its institutional and wholesale business over the coming month. In addition, one large client is indicating that it intends to rebalance its exposure away from benchmark agnostic global equity managers.

The company advised that it does not expect the account to close, instead it expects to see a reduction in mandate size. But how big the reduction and how much is currently under management is unclear.

These events, together with some other institutional account changes that are anticipated to take place over the coming months, are likely to result in a reduction in annualised fee revenue for the company of approximately $18 million.

During the first half of FY 2024, Platinum recorded fee revenue of $92.4 million. This annualises to $184.8 million, which means that the company is about to take an approximate 10% hit to its annualised fee revenue.

Productivity update

In other news, Platinum revealed that an initial review of its turnaround program has now been completed.

It has identified at least $25 million in targeted annualised run rate savings. This represents a 26% reduction in the company’s annualised half year expense base of approximately $96 million.

Due to the timing of these savings, they are unlikely to generate a material impact on the ASX 300 share’s reported FY 2024 profit. Management expects the bulk of savings to be progressively realised during FY 2025.

These savings will include both people and non-people costs, with one-off restructuring charges to be separately identified in its results.

It also highlights that expense reductions will come from the expected simplification of the company’s product range, including the rationalisation of Platinum’s offshore distribution efforts.

The ASX 300 share’s CEO, Jeff Peters, said:

In late February we outlined a strategy to reset and position the business for future growth. I am pleased to be able to report that we are acting swiftly to implement the changes required as part of the reset phase. I would like to reiterate my firm belief that Platinum will emerge from this challenging phase as a revitalised business that is better able to leverage its strong brand and talented team for the benefit of its clients.

The post Why is this ASX 300 stock crashing 23% today appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 7 ASX small-cap shares that are cheaper than the ASX 200 in March 2024
• 11% yield? 2 strikingly cheap ASX shares ‘primed for recovery’
• Why Camplify, Platinum, Rio Tinto, and Woodside shares are dropping today
• Why DroneShield, Magellan, Platinum, and Zip shares are rising today
• Why this ASX 300 share is leaping 14% despite being branded a ‘sell’

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

from The Motley Fool Australia https://ift.tt/rhdaMjH

The CSL Ltd (ASX: CSL) share price is charging higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) biotech stock closed yesterday trading for $282.47. In morning trade on Wednesday, shares are swapping hands for $286.33, up 1.4%.

For some context, the ASX 200 is just about flat at this same time.

Investors may be bidding up the CSL share price after the company announced it has issued a pair of long-dated bonds totalling US$1.25 billion (AU$1.91 billion).

CSL share price lifts on refinancing news

According to the release, the corporate bonds will be issued by CSL Finance Plc and guaranteed by the parent company, CSL Limited, and some of its subsidiaries.

The principal amount, tenor and coupon for the notes are:

• US$500 million, 10-year at a fixed rate coupon of 5.106%
• US$750 million, 30-year at a fixed rate coupon of 5.417%

The CSL share price could be catching some tailwinds on the news, as the company will use some of the AU$1.9 billion in new funds to refinance higher interest existing bank debt. Management said the rest of the funds will be used “for general corporate purposes”.

CSL expects settlement to occur next Wednesday, 3 April, subject to customary closing conditions.

What’s been happening with the ASX 200 biotech stock?

CSL reported its half-year results on 13 February.

Highlights included an 11% year on year increase in revenue (in constant currency terms) to US$8.05 billion.

And net profit after tax in constant currency was up 20% to US$1.94 billion.

Despite those strong results, the CSL share price closed down 2.8% on the day.

Investors may have been a bit jittery about the 32% year on year increase in net finance costs, which came in at US$234 million. The increase was driven by debt taken on in the company’s acquisition of Vifor Pharma alongside higher interest rates.

However, the ASX 200 biotech’s balance sheet looks solid, with net assets of US$19.16 billion.

The CSL share price has had a strong run recently, up 14% in six months.

The post CSL share price leaping higher amid $1.9 billion funding news appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 3 ASX shares to buy in 2024 and hold for the next 10 years
• 2 of the best ASX 50 shares to buy now
• Here are the top 10 ASX 200 shares today
• 2 ASX shares that could help set you up for life
• Are CSL shares a must-buy in March?

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

from The Motley Fool Australia https://ift.tt/k4ELoDb

The Commonwealth Bank of Australia (ASX: CBA) share price has done very well for shareholders – it’s up 4% in 2024 to date and it has gone up 18% in the last six months. The S&P/ASX 200 Index (ASX: XJO) has only risen by 10% in the past six months.

A lot of ASX stocks have gone up in the last few months, but there may be an explanation for the rally.

Reasons for the rise

MST Marquee analyst Brian Johnson was speaking at the Australian Financial Review Banking Summit.

Earlier in the month, the CBA share price reached above $121. The banking analyst acknowledged CBA is “the best bank”, but there’s more to it than that.

He said there has been more buying than selling since October when ASX bank shares were unloved – credit growth was slow, net interest margins (NIM) were falling and banks were agreeing to sizeable pay rises which would increase labour costs. Johnson said he had never seen a time of a worsening revenue outlook while costs were also going up.

Then, in November, it seemed that the US Federal Reserve was pivoting and was starting to think about cutting interest rates.

This change meant global funds which had a smaller position of ASX bank shares decided to rethink their weighting, and they bought (CBA) shares because of the rising Australian dollar and the easing fears about Australian house prices. This also created a squeeze for CBA shares, leading to short sellers needing to cover their positions.

On top of that, according to Johnson, there were growing fears about the Chinese economy earlier this year, which meant Asian investors decided to look at markets outside of China, such as Australia and India. They also decided to buy ASX bank shares, like CBA.

CBA itself reportedly added to the buying by buying CBA shares for the dividend re-investment plan (DRP).

While there was a big increase in buying, there weren’t many sells thanks to CBA’s “sticky” share register, with some long-term investors not wanting to trigger a capital gains tax bill.

Johnson was quoted by the AFR who said:

CommBank has always been expensive – best management, generates the most capital and no one owns it which means you perpetually get in these periods where people have to buy it and get squeezed up.

If you think about every single one of those drivers, has anything changed?

The credit growth outlook is still slow, we still see outrageous competition coming through on both sides [mortgages and deposits]. Not much has really changed except the share prices are a lot higher.

CBA share price valuation

Using the independent estimates on Commsec, the CBA share price is valued at 21 times FY25’s estimated earnings. This is a very high price/earnings (P/E) ratio for a bank, and I think it has brought forward capital growth. It could be difficult to deliver much more increases in the next year or two.

Considering CBA’s profit is expected to fall in FY24 and FY25, I’d be looking at other ASX shares for value.

The post Are CBA shares really worth $120? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• $19 billion in ASX dividends is being paid out this week. Are you getting your share?
• These 5 high-quality companies are now paying a better income than CBA shares
• Own CBA shares? Here’s the tech stock the banking giant just invested in
• Better buy: CBA or Westpac stock?
• How I’d generate a $20,000 second income from CBA shares

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.

from The Motley Fool Australia https://ift.tt/MNbcwpS

Westpac Banking Corp (ASX: WBC) shares are on the move on Wednesday.

In morning trade, the banking giant’s shares are up 0.3% to $26.33.

Why are Westpac shares rising?

Investors have been buying Westpac shares today after the bank released an update on its technology simplification program.

That update revealed a number of initiatives that are underway that it believes will deliver growth and improve returns.

According to the release, the program’s ultimate ambition is for Westpac “to be our customers’ #1 bank and partner through life.”

There are four pillars to its strategy. These are:

• Customer care at the heart
• Easy to do business with
• Expert solutions and tools
• Advocate for positive change

Management believes it is well-placed to accelerate its strategy now that its portfolio simplification is complete. This follows the divestment of a number of non-core businesses in recent years.

One of the keys to its technology simplification will be its Unite plan. This involves simplifying existing processes, reducing technology complexity, and decommissioning duplicated systems.

For example, it highlights that by consolidating its Australian collections platforms, it will go from 7 systems to just 1 system. It plans to start with Australian consumer finance and mortgages.

In addition, it will consolidate its Australian customer masters from 3 to 1. This will mean one common solution for all Australian customers. It will also be API enabled.

What will this all cost?

Westpac advised that its technology simplification will come at a significant cost.

The total investment spend is expected to be ~$1.8 billion in FY 2024 and then ~$2 billion annually from FY 2025 to FY 2028. That’s a total spend of ~$9.8 billion.

But it believes it will be well worth the investment. The bank highlights that the Unite plan will help close the cost to income ratio gap to peers. It also expects run cost efficiency benefits and a reduction in the cost of change.

The post Westpac shares push higher on $9.8b technology simplification plan appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Shares vs. property: How to generate $500 passive income per month
• Forget term deposits and buy these ASX dividend shares
• Better buy: CBA or Westpac stock?
• Buy Westpac and this ASX dividend giant
• How much dividend income would I get from a $20k investment in Westpac shares?

Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. 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.

from The Motley Fool Australia https://ift.tt/rbzL13B

There are a good number of blue chip ASX shares to choose from on the Australian share market.

But one that could be a standout pick for investors right now is listed below.

Let’s see why it is a best idea according to the team at Morgans.

Which blue chip ASX share is a strong buy?

The ASX blue chip share in question is Penfolds, Wolf Blass, and 19 Crimes owner Treasury Wine Estates Ltd (ASX: TWE).

Morgans believes it could be a strong buy at current levels. Particularly if its recent blockbuster acquisition of DAOU Vineyards delivers the goods for the wine giant.

In addition, with Chinese tariffs on Australian wine imports looking likely to be lifted in the near term, the broker is very positive on Treasury Wine’s outlook. The broker commented:

It may take some time for the market to digest TWE’s acquisition of Paso Robles luxury wine business, DAOU Vineyards (DAOU) for US$900m (A$1.4bn) given it required a large capital raising. The acquisition is in line with TWE’s premiumisation and growth strategy and will strengthen a key gap in Treasury Americas (TA) portfolio. Importantly, DAOU has generated solid earnings growth and is a high margin business. It consequently allowed TWE to upgrade its margins targets. While not without risk given the size of this transaction, if TWE delivers on its investment case, there is material upside to our valuation. The key near-term share price catalyst is if China removes the tariffs on Australian wine imports.

Morgans currently has an add rating and $14.03 price target on its shares. This offers 15% potential upside from current levels.

Let’s also not forget that Treasury Wine is a dividend payer. Morgans expects partially franked dividends per share of 36.4 cents in FY 2024 and then approximately 45 cents in FY 2025.

Based on its current share price of $12.20, this will mean dividend yields of 3% and 3.7%, respectively, for investors.

Overall, if Morgans’ recommendation proves accurate, it would mean a very attractive total return of approximately 18%.

The post Why this could be one of the best blue chip ASX shares to buy right now appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• $2.1 million! Who are the highest paid ASX 200 directors?
• Wake up! 3 stocks to watch RIGHT NOW
• Top brokers name 3 ASX shares to buy today
• Treasury Wine share price races higher on Chinese tariffs news
• 5 things to watch on the ASX 200 on Wednesday

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

from The Motley Fool Australia https://ift.tt/ejyEKlz

Cheap ASX dividend shares could be exactly what someone about to retire could benefit from. There are lots of ASX shares paying good passive income.

I’m not going to say that investors should go for a large ASX bank share like Commonwealth Bank of Australia (ASX: CBA) or ANZ Group Holdings Ltd (ASX: ANZ). The banking sector faces the possibility of rising arrears and heightened competition for the foreseeable future. I prefer other stocks.

There are some great businesses on the ASX, but they don’t always reflect the underlying value of the business.

I like the idea of being able to buy a share that’s worth $1 for 80 cents (or less). Of course, dividends are not guaranteed payments, and share prices do move down. But in my mind, volatility can open up some appealing investments.

Don’t forget franking credits

Owning Australian companies comes with the added bonus of franking credits, which are refundable tax credits. Receiving fully franked dividends can boost the after-tax dividend returns.

For example, receiving $70 of fully franked dividends means that’s $100 of grossed-up dividend income.

A 7% fully franked dividend yield becomes 10%, grossed up.

A 3.5% fully franked dividend yield becomes 5% when grossed up.

For an Aussie or superannuation fund with a 0% tax rate, it’s a very helpful boost to annual cash flow after completing the tax return.

Where are there cheap ASX dividend shares?

Share prices are always changing, so that can alter what dividend yield we’re going to receive and change the ‘value’ on offer.

For me, there are a few different categories and industries I like to monitor.

I like to look at cyclical ASX shares when they’re at a weaker point in the cycle, such as ASX mining shares and ASX retail shares. Last year and 2022 were great years to go hunting for ASX retail shares, while the last quarter of 2021 was a good time to look at ASX iron ore shares such as Fortescue Ltd (ASX: FMG) and Rio Tinto Ltd (ASX: RIO).

I’m a big fan of businesses that have a track record of consistently growing their dividend payouts. This shows those ASX dividend shares want to look after their shareholders, and they can provide some protection against inflation.

Finally, I like looking at businesses with relatively high dividend yields, if there is a good prospect they can deliver revenue growth, underlying profit growth and increase the value of the business over time.

I’ll talk about two examples.

Rural Funds Group (ASX: RFF) is a real estate investment trust (REIT) that owns a farm portfolio across Australia, including almonds, cattle, macadamias and vineyards.

In the FY24 first-half result, the business said it had an underlying net asset value (NAV) of $3.07 (an increase of 4.8%). The Rural Funds share price is at a 32% discount to this NAV, making it seem like a very cheap ASX dividend share.

It’s currently paying an annualised distribution yield of 5.6%.

Telstra Group Ltd (ASX: TLS) is the market-leading telco in Australia, with the biggest customer base and the mobile network with the most coverage.

It continues to win new mobile subscribers and this is helping drive the Telstra profit dividend higher. It currently offers an annualised grossed-up dividend yield of 6.8%. It looks cheap to me because the Telstra share price is at a 52-week low.

The post Almost ready to retire? I’d buy cheap ASX dividend shares for income appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Qantas or Telstra share price: Which will climb higher in 2024?
• $19 billion in ASX dividends is being paid out this week. Are you getting your share?
• Why Telstra and these ASX 300 stocks just hit 52-week lows
• Telstra is paying 18 cents per share in dividends: Time to buy the stock?
• 3 high-quality ASX retirement shares to buy this week

Motley Fool contributor Tristan Harrison has positions in Fortescue and Rural Funds 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 positions in and has recommended Rural Funds Group and Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/kcg2ZXK

I’m a fan of finding undervalued ASX dividend shares that have been sold down and offer a potentially large dividend yield. I’m going to talk about three S&P/ASX 300 Index (ASX: XKO) shares that are materially down from their highs.

One of the benefits of a lower share price is that when a share price falls, it boosts the dividend yield of the future dividend payments. For example, if a business with a 6% dividend yield falls 10%, the yield would become 6.6%.

With that in mind, below are three beaten-up names I’m looking at.

APA Group (ASX: APA)

APA is the owner and operator of a large gas pipeline in Australia – it carries half of the nation’s natural gas usage. The business also owns or has stakes in a number of other energy assets including renewable energy generation, electricity transmission, gas storage, gas processing and gas-powered energy generation.

The APA share price is down around 30% from August 2022, despite the business continuing to grow its distribution and having most of its organic revenue (growth) linked to inflation.

It has grown its annual distribution each year since 2004. The ASX 300 share is expecting to pay a distribution per security of 56 cents in the current financial year, which translates into a FY24 yield of 6.7%.

Metcash Ltd (ASX: MTS)

Metcash supplies a number of independent food and liquor retailers including IGA, Cellarbrations, The Bottle-O, IGA Liquor, Porters Liquor, Thirsty Camel, Big Bargain Bottleshop and Duncans.

The most attractive part of the business, in my eyes, is the hardware division, which includes Mitre 10, Home Hardware and Total Tools. It also recently announced the planned acquisition of Bianco Construction Supplies (a SA and NT business) and Alpine Trust (a large frame and truss operator).

In my opinion, the ASX 300 share has a compelling future in hardware, with Australia’s ongoing population growth and the likely ongoing need for construction for the years ahead.

I like the company’s plans to move into foodservice distribution, with the acquisition of Superior Food. It’s a large market, with potential for Metcash to grow its market share. This is a logical expansion of its existing food business.  

The company has a dividend payout ratio of 70% of underlying net profit after tax (NPAT). The projection on Commsec suggests a grossed-up dividend yield of 7.4%.

Adairs Ltd (ASX: ADH)

Adairs is an ASX 300 share that operates through three different businesses – Adairs, Mocka and Focus on Furniture.

Sales and foot traffic are down amid the high cost of living, which is also hurting profitability. The company is looking to upsize its Adairs stores and roll out additional stores to boost its network’s earning power. It has recently taken over operation of its new national distribution centre, which will hopefully lead to lower costs and better efficiencies.

However, I don’t think the weak retail conditions will last forever, particularly if interest rates start coming down. The Adairs share price is down around 50% from mid-2021, which makes the future dividend payments compelling.

According to Commsec, the grossed-up dividend yield for FY25 could be around 8% and in FY26 it could be 11%.

The post Dividend yields up to 8%! Which of these cheap ASX 300 shares should I buy? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 2 ASX 200 shares just upgraded by Macquarie
• Top ASX shares to buy instead of a term deposit in March 2024
• Where I’d invest $30,000 in ASX shares for passive income
• 1 ASX dividend stock down 30% to buy right now
• Here’s how the ASX 200 market sectors stacked up last week

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

from The Motley Fool Australia https://ift.tt/mu7b4IB