The Metcash Ltd (ASX: MTS) share price is climbing again on Wednesday.

In morning trade, the wholesale distributor’s shares are up 2% to a 52-week high of $4.06.

Why is the Metcash share price rising again?

Investors have been buying the company’s shares today after brokers responded positively to its trading update.

In case you missed it, on Tuesday Metcash revealed that total group sales for the ten months to 25 February increased 0.9% compared to the prior corresponding period.

This reflects a 1.6% increase in Liquor sales, a 2.4% lift in Hardware sales, and flat Food (including tobacco) sales. If you exclude tobacco, food sales were up by a solid 5% for the 10 months.

One broker that was particularly pleased with the update was Macquarie.

According to a note out of the investment bank this morning, its analysts have upgraded the company’s shares to an outperform rating with a $4.30.

Based on the current Metcash share price, this implies potential upside of 6% for investors from current levels.

Macquarie is also expecting a 21 cents per share dividend in FY 2024. This equates to a 5.2% dividend yield, which boosts the total potential return to approximately 11%.

Elsewhere, the team at UBS has retained its buy rating with an improved price target of $4.25, and Jefferies has reaffirmed its buy rating with a higher price target of $4.30.

What else is being said?

One broker that isn’t feeling as bullish is Goldman Sachs. This morning it held firm with its neutral rating with an improved price target of $3.70.

Its analysts remain neutral given “intense competition in both Food and Hardware” and “higher interest expense” concerns. The broker also notes there are execution risks “as the business navigates significant organic and inorganic change.”

The post Metcash share price hits 52-week high on broker upgrade: Time to 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

• Metcash shares push higher on trading update
• Here are the top 10 ASX 200 shares today
• 2 ASX shares I’ve been buying!
• Should you buy this ASX 200 stock for its 5%+ dividend yield?
• Seeking retirement income from ASX bank shares at 52-week highs? What I’d buy instead

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool 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/KY42xrA

Shares in the S&P/ASX 200 Index (ASX: XJO) stock New Hope Corporation Ltd (ASX: NHC) have fallen significantly since October 2023. Down more than 28% over that period, is the ASX 200 stock a smart, unloved buy?

Some investors may not buy into this company because it’s an ASX coal share.

For others interested in New Hope’s prospects ahead of its half-year result announcement next Tuesday (19 March), let’s look at whether now is a good time to invest.

Operational performance

The last major update we heard from the ASX 200 stock was its quarterly activities report for the three months to 31 January 2024. Performance and profitability are key for the ASX 200 stock.

New Hope advised it produced underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $179.9 million for the quarter, down 26.5% on the previous quarter primarily due to “realised pricing”. In other words, the coal price has been falling.

The FY24 first-half underlying EBITDA of $424.8 million was 59.1% lower compared to HY23’s figure of $1.04 billion.

The miner achieved an average realised sales price of A$180.64 per tonne for the quarter, compared to A$211.40 in the three months to October 2023.

It reported total saleable coal production was 2mt for the three months to January 2024, the same as the previous quarter. HY24 saleable coal production of 4.1mt was up 29.4% year over year.

The ASX 200 stock also revealed it generated an operating cash flow of $130.6 million for the first half, and it ended with available cash of $480.4 million after paying its dividends and FY23 income tax liability.

New Hope also recently took part in a capital raising in Malabar Resources. This increased its ownership to 19.9% of the business.

Is the ASX 200 stock a buy?

The fall of the New Hope share price has been accompanied by (or caused by) a drop in the coal price. Its profitability has decreased, which may justify the decline.

Analysts and brokers don’t seem to think it’s a buy. According to Factset, there are four hold ratings and two sell ratings on the business. However, the miner is still valued at a very low price/earnings (P/E) ratio.

According to Commsec, the New Hope share price is valued at 8x FY24’s estimated earnings and FY25’s estimated earnings. It’s projected to pay a grossed-up dividend yield of 10.5% in FY24 and FY25.

Even so, there may be plenty of other ASX shares that could be a more rewarding investment.

The post Is this ASX 200 stock a shrewd buy ahead of the upcoming half-year result? 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

• Buying Soul Patts shares? Here’s what you’re really buying
• Why Lendlease, New Hope, Nuix, and Orora shares are dropping today

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/nCrLQxZ

Core Lithium Ltd (ASX: CXO) shares are under pressure again on Wednesday.

In morning trade, the lithium miner’s shares are down 9% to 20 cents.

This leaves the company’s shares trading within touching distance of their record low.

Why are Core Lithium shares sinking?

Investors have been hitting the sell button today in response to the miner’s half-year results.

After the market close on Tuesday, Core Lithium revealed first-half revenue of $134.8 million and a loss after tax of $167.6 million.

This reflects a 75% decline in its spodumene concentrate realised price to US$2,098 per tonne and its decision to suspend production.

In addition, its loss after tax includes a non-cash impairment of $119.6 million and provisions for onerous contracts of $27.6 million.

Commenting on the half, the company’s CEO, Gareth Manderson, said:

I am pleased to be able to report that together with my team we have responded rapidly to the changing market conditions and taken the action required to put the business in the best position possible to weather the current market conditions. While this has meant suspending our mining activity, the processing of ore stockpiles provides an opportunity to generate revenue and puts the business in the best cash position possible to pursue the options available and realise value for our shareholders.

Though, Manderson won’t be sticking around to see how Core Lithium fares in the future. The CEO also announced his exit with these results. Doug Warden, Core Lithium’s current CFO, will assume the role as interim CEO while an executive search is undertaken.

Outlook

Core Lithium’s production will remain suspended for the foreseeable future and it will instead continue to process its existing ore stockpiles to produce spodumene concentrate.

In light of this, it has reaffirmed its revised guidance for FY 2024 production of 90,000 tonnes to 95,000 tonnes of 4.77% spodumene concentrate production and sales of 80,000 tonnes to 90,000 tonnes.

In addition, the miner’s exploration team is reviewing the local and regional prospectivity of its lithium tenements and gold, uranium, and base metal projects.

Core Lithium shares are now down almost 80% since this time last year.

The post Core Lithium shares crash 9% after posting massive half-year loss 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

• 5 things to watch on the ASX 200 on Wednesday
• Core Lithium share price on watch amid $167m half-year loss and CEO exit
• Here are the top 10 ASX 200 shares today
• Why are short sellers shifting into ASX blue chips and out of lithium losers?
• These are the 10 most shorted ASX shares

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/htu1R3k

The Liontown Resources Ltd (ASX: LTR) share price is charging higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) lithium stock closed yesterday trading for $1.32. At the time of writing on Wednesday, shares are swapping hands for $1.45, up 10.3%.

For some context, the ASX 200 is up 0.1% at this same time.

Here’s what’s happening.

ASX 200 lithium miner lifts off on funding agreement

The Liontown share price is racing ahead after the miner announced it has entered into a $550 million debt facility agreement.

The money will be used to ensure the Kathleen Valley Lithium Project, located in Western Australia, is funded through to its first production and the ramp-up to the company’s three million tonnes per year (Mtpa) base case.

The debt facility has flexible terms that enable refinancing prior to maturity if drawn.

The miner said there were no scheduled repayments and interest capitalised during the term of the debt facility, with a bullet payment due on maturity on 31 October 2025.

Liontown will use the proceeds drawn to refinance existing Ford debt, as well as fund construction and ramp-up of the Kathleen Valley Lithium Project. The debt facility will also provide working capital and liquidity.

Commenting on the $550 million funding that’s boosting the Liontown share price today, CEO Tony Ottaviano said, “Having this funding in place provides strong endorsement for our project and a platform of financial certainty from which to move forward.”

Ottaviano added, “We are consequently well-positioned to deliver the remaining milestones to first production mid-year and ramp-up towards anticipated positive cashflows.”

Liontown expects to initially draw down on the debt facility in early Q3 CY 2024.

Liontown share price snapshot

With today’s intraday moves factored in, the Liontown share price is down 15% year to date.

Over the past month, however, shares in the ASX 200 lithium miner have now soared 41%.

The post Liontown share price leaps 10% on fresh $550 million funding 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

• Here are the top 10 ASX 200 shares today
• Liontown shares rocket 30% in a month ahead of Friday’s results
• Here are the top 10 ASX 200 shares today
• Is the Liontown share price ready for next week’s numbers?
• Why Coles, Liontown, Lovisa, and Wildcat shares are dropping today

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.

from The Motley Fool Australia https://ift.tt/p2nTYC5

Commonwealth Bank of Australia (ASX: CBA) is the biggest ASX bank share in Australia. What is the predicted profit for CBA shares for the next few years? In this article, we’re going to look at some estimates which may justify, or warn us about, the current CBA share price.

With how the CBA share price has soared 16% in six months, you’d think that good profit growth is forecast. Let’s have a look.

Challenging FY24

On a cash basis, the company generated $6.01 of continuing operations earnings per share (EPS) in FY23.

However, the business is seeing rising arrears and a fairly competitive environment in the banking sector. Credit growth is quite low, too. In the FY24 first-half result, it reported cash profit fell 3% to $5.02 billion and the net interest margin (NIM) fell 11 basis points year over year to 1.99%.

The broker UBS thinks very optimistic assumptions are required to justify the recent run-up in bank share prices.

Commsec has independent estimates that suggest owners of CBA shares could see EPS of $5.77 in FY24, which could mean a 4% fall in EPS year over year.

This would put the CBA share price at over 20 times FY24’s estimated earnings.

Subdued FY25

Things may not get much better in FY25 as it’s possible that interest rates may still be high and arrears/bad debts could be elevated, depending on what happens with the economy.

The estimate is that CBA’s EPS could fall again to $5.63, which would be a drop of around 2.5% in FY25.

It implies the CBA share price is valued at 21 times FY25’s estimated earnings.

Recovery to start in FY26?

The FY26 projected profit is still predicted to be below FY23.

The current forecast is that the ASX bank share might generate $5.77 in FY26. That’s the same as FY24, so it would put the bank at 20 times FY26’s estimated earnings.

Foolish takeaway

The major bank has seen its share price soar to all-time highs, yet the profit is expected to be lower than FY23 for a number of years.

To me, it’s clear that CBA shares have become significantly more expensive and its profit growth doesn’t justify that. I’d be cautious at this level and look to other ASX shares as potential ideas.

The post Here is the profit forecast to 2026 for CBA shares 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

• How much passive income will I get from shares vs. property?
• Should you wait for a dip to buy ASX 200 bank shares?
• Why are short sellers shifting into ASX blue chips and out of lithium losers?
• Here’s how the ASX 200 market sectors stacked up this week
• Forget CBA and buy this ASX bank stock for big returns

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/UsVb4rD

The Treasury Wine Estates Ltd (ASX: TWE) share price is charging higher on Wednesday.

In morning trade, the wine giant’s shares are up 4% to $12.80.

Why is the Treasury Wine share price charging higher?

Investors have been buying the company’s shares after it revealed that the Chinese Ministry of Commerce (MOFCOM) has released an interim draft determination relating to tariffs on Australian wine.

As a reminder, back in 2020, the company was hit hard when MOFCOM applied a deposit rate of 169.3% to the imported value of its wine in containers of two litres or less. This effectively shut its luxury wine out of the country.

But these tariffs could now be a thing of the past. According to its announcement, MOFCOM’s interim draft determination has outlined a proposed removal of the current tariffs on Australian wine imports into China.

Though, the company warned that the interim draft determination is not a final determination and is subject to change by MOFCOM. Treasury Wine anticipates that the Ministry will release a final determination in the coming weeks.

What impact could this have?

Treasury Wine has a plan in place that it will pursue should the tariffs be removed.

However, given the timing of this development, it only expects an incremental EBITS contribution from the re-establishment of its Australian country of origin portfolio in China in FY 2024.

Broker reaction

Goldman Sachs was pleased with the news. It commented:

Despite a minimal impact to FY24e EBITS, if the import tariffs are indeed removed, we see it as a positive catalyst for TWE as it signals the reopening of a significant, high profit market, where Penfolds still hold strong brand equity.

The Treasury Wine share price is now in positive territory on a 12-month basis.

The post Treasury Wine share price races higher on Chinese tariffs 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

• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Wednesday
• Best ASX growth stocks to consider buying in March
• 34 ASX 200 shares with ex-dividend dates next week
• Here are 2 high-quality ASX 200 blue chip shares that analysts are bullish on

Motley Fool contributor James Mickleboro has positions in Treasury Wine Estates. 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 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/lKhu2dq

Appen Ltd (ASX: APX) shares are crashing after returning from a trading halt.

In morning trade, the artificial intelligence data services company’s shares are down 21% to 85 cents.

Why are Appen shares crashing?

Investors were fighting to get hold of the company’s shares on Tuesday on the back of takeover speculation. This led to the Appen share price rising a massive 30% to $1.08 before being slammed into its trading halt.

Well, it turns out that there’s no smoke without fire.

After the market close, Appen responded to a price query from the Australian stock market operator and revealed that it has been in takeover discussions with Innodata Inc (NASDAQ: INOD).

However, the market may be disappointed to learn that the price being discussed is significantly lower than where Appen’s shares were trading yesterday. It states:

Appen recently received a highly conditional, confidential, non-binding, indicative proposal from Innodata, a New Jersey based NASDAQ listed entity, in relation to a potential combination of the two companies through a stock-for-stock transaction (the Indicative Proposal). The Indicative Proposal contemplates offer consideration of A$0.70 worth of Innodata shares per Appen share (which equated to a premium in excess of 100% to the Appen share price at the time the Indicative Proposal was provided).

The Appen board is now seeking to understand the potential value to Appen shareholders from the proposed combination and has agreed to a limited exchange of non-public information on both businesses to occur on a non-exclusive basis.

It also notes that it has made no determination as to whether the indicative consideration proposed by Innodata would be acceptable.

Appen’s shares are now down 65% since this time last year.

The post Why are Appen shares crashing 21% 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

• Appen share price on watch following takeover offer
• Big news about to drop: Appen share price put on ice following 41% surge
• Appen share price tumbles amid ongoing losses for the ASX AI stock
• Guess which beaten-up ASX 300 tech stock is rocketing 15% today

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 Appen. 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/bdeUOcL

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

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

Nvidia (NASDAQ: NVDA) jumped again on Tuesday, adding to its ongoing winning streak this year. The stock gained ground as the trading day wore on and by the time the market closed, the stock was up 7.2%.

The broader market was decidedly mixed today, looking for direction, but the catalyst that helped send the chipmaker higher was strong quarterly results by Oracle (NYSE: ORCL). The company cited strong demand for AI-centric cloud services with demand far outstripping supply. Oracle also cited a recent cloud-infrastructure contract with Nvidia and hinted at more to come, saying “We expect to have some very nice joint announcements with Nvidia next week,” at the company’s GPU Technology Conference (GTC), which begins on Monday.

Is Nvidia stock still a buy?

This announcement adds to the growing mountain of evidence that the demand for generative AI is just getting started. Nvidia has nabbed the pole position by supplying the graphics processing units (GPUs) equipped to handle the rigors of AI processing. Furthermore, rivals have been unable to come up with a better solution, allowing Nvidia to dominate the field — in two ways.

First, Nvidia is the leading provider of the GPUs used in data centers, with a dominant 98% of the market, according to Wells Fargo analysts. Since the vast majority of AI computing is done in the cloud and data centers, this benefits Nvidia. Second, the company is also the go-to for processors used in machine learning — an earlier branch of AI — controlling a 95% share of that market as well. This gives Nvidia an entrenched position, a clear advantage over would-be challengers.

As a result, Nvidia has delivered three consecutive quarters of record-setting growth, highlighted by triple-digit, year-over-year revenue and profit growth, with another triple-digit quarter on tap.

This leads to the quintessential investing question: Is Nvidia stock a buy. After the company’s recent blockbuster earnings, Nvidia’s valuation dropped significantly, currently trading for 36 times forward earnings. While that’s a premium compared to a price-to-earnings (P/E) ratio of 28 for the S&P 500, Nvidia’s track record of blockbuster growth illustrates that its deserving of a premium.

It seems clear that the demand for AI will continue, with Nvidia sitting at the toll gate. This, in turn, will profit the company — and investors. 

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

The post Nvidia shares surged (again) today. Is it too late to buy the red-hot artificial intelligence (AI) growth stock? 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

• Can you buy Nvidia shares on the ASX?
• This trend could signal more gains for Nvidia shares
• Is the surging Nvidia share price causing a stock market bubble?
• Should I buy Nvidia stock as an Australian investor?
• 1 ASX stock I think is just as hot as Nvidia (without all the hype)

Danny Vena has positions in Nvidia. Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Nvidia and Oracle. The Motley Fool Australia has recommended Nvidia. 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.

from The Motley Fool Australia https://ift.tt/HWvTk60

The great thing about exchange-traded funds (ETFs) is that they cater to all investment groups.

It doesn’t matter whether you’re a growth investor or an income investor, there will be an ETF out there for you.

With that in mind, let’s now take a look at two ASX ETFs that could be quality options for income investors. They are as follows:

Vanguard Australian Shares High Yield ETF (ASX: VHY)

The Vanguard Australian Shares High Yield ETF could be a top option for income investors.

This fund gives you exposure to a portfolio filled with many of the biggest payers on the Australian share market.

The good news is that it has been built with diversity in mind. In order to stop you from owning purely banks and miners, Vanguard limits how much it invests in any particular industry or company.

Among its ~70 holdings are BHP Group Ltd (ASX: BHP), Coles Group Ltd (ASX: COL), Commonwealth Bank of Australia (ASX: CBA), Fortescue Ltd (ASX: FMG), Transurban Group (ASX: TCL), and Wesfarmers Ltd (ASX: WES).

The ASX ETF currently trades with a dividend yield of 5.1%. Based on this yield, a $10,000 investment would generate $510 of income.

Vanguard Australian Shares Index ETF (ASX: VAS)

Another ASX ETF for income investors to consider buying is the popular Vanguard Australian Shares Index ETF.

It is a low-cost index-based exchange traded fund that aims to track the ASX 300 index. This means that you will be buying a slice of Australia’s leading 300 listed companies.

Among this very diverse group of shares are dividend payers such as Lovisa Holdings Ltd (ASX: LOV), Macquarie Group Ltd (ASX: MQG), Origin Energy Ltd (ASX: ORG), and Woodside Energy Group Ltd (ASX: WDS).

At present, it trades with a dividend yield of 3.9%. This means that a $10,000 investment would yield second income of $390.

The post Buy these ASX ETFs for a second 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

• How much would I have now if I’d invested $10,000 in Vanguard Australian Shares Index ETF (VAS) a year ago?
• With a spare $500, here’s how I’d start buying ASX shares this March
• 5 ASX shares to buy for an effortless path to financial freedom
• Buy these ASX ETFs for easy passive income
• 3 reasons to buy another ASX ETF over the Vanguard Australian Shares Index ETF (VAS)

Motley Fool contributor James Mickleboro has positions in Lovisa and Woodside Energy Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Lovisa, Macquarie Group, Transurban Group, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Coles Group, Macquarie Group, and Wesfarmers. The Motley Fool Australia has recommended Lovisa and Vanguard Australian Shares High Yield ETF. 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/HdS5ntF

The S&P/ASX 200 Index (ASX: XJO) stock Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), AKA Soul Patts, is soon going to report its FY24 first-half result. All eyes are going to be on Soul Patts shares later this month.

There are a lot of moving parts to the business – it owns sizeable stakes in numerous businesses including TPG Telecom Ltd (ASX: TPG), New Hope Corporation Ltd (ASX: NHC), Brickworks Limited (ASX: BKW), Tuas Ltd (ASX: TUA), Pengana Capital Group Ltd (ASX: PCG) and Apex Healthcare.

It also has an ASX large-cap share portfolio, with names like Macquarie Group Ltd (ASX: MQG), BHP Group Ltd (ASX: BHP), CSL Ltd (ASX: CSL), Wesfarmers Ltd (ASX: WES) and Commonwealth Bank of Australia (ASX: CBA).

Other segments of the business include a private equity portfolio, an emerging companies portfolio, a structured yield portfolio and a property portfolio.

What I’m expecting to see from Soul Patts shares

Over the six months to 31 January 2024, the Soul Patts share price (which rose by 4.4%) outperformed the ASX 200 (which climbed by 3.6%). It seems the ASX 200 stock will be able to report another good period of shareholder returns compared to the market.

I also expect that Soul Patts’ board will decide to increase the dividend. It has increased its annual ordinary dividend each year since 2000, and I think that will continue. FY23 saw the ordinary dividend increase by around 20%.

One of the biggest positives in the result may be the amount of interest income that it generates from its cash and loans. The company has allocated a lot more to its structured yield portfolio over the last couple of years and it’s generating a much stronger yield now.

A year ago, in the FY23 first-half result, we learned that New Hope accounted for $103 million of the $240.2 million total dividend and distribution income that Soul Patts made. However, the coal price has dropped heavily and New Hope’s latest dividend – special and ordinary – was cut by nearly half to 30 cents per share.

We’ve also seen cuts from names like Macquarie and BHP.

But, other names like Brickworks, CBA and Wesfarmers have grown their dividend.

We don’t know how the ASX 200 stock’s private equity portfolio has performed, so that will be interesting to see.  

Any new investments?

The business may provide some more detail about where it has been putting its money.

At the AGM in December, it said it had made some investments across its agriculture, credit and emerging companies.

It said it acquired one of the most advanced fruit packing and processing plants globally to its agriculture portfolio. Soul Patts also revealed that it had made a major investment in ASX uranium miner Nexgen Energy (Canada) CDI (ASX: NXG), which is reportedly developing the largest low-cost producing uranium mine globally.

The post Own Soul Patts shares? Here’s the ASX 200 stock’s result preview 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

• Are you investing or gambling?
• Is it too late to buy Soul Patts stock?
• 5 ASX shares to buy for an effortless path to financial freedom
• 2 ASX shares I’ve been buying!
• Seeking retirement income from ASX bank shares at 52-week highs? What I’d buy instead

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, CSL, Macquarie Group, Washington H. Soul Pattinson and Company Limited, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Brickworks, Macquarie Group, Washington H. Soul Pattinson and Company Limited, and Wesfarmers. 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/PO1eH0i