When cyclical stocks are discussed, one cannot go past ASX mining shares.

Because of the brutal nature of commodity prices, the resources sector is highly liable to cycle up and down over the years.

That’s why, even if you intend to buy only the highest quality mining companies, grabbing them at a low point is critical.

Some experts this week named two stocks precisely in that position right now:

‘First commodity to bottom and then the first to recover’

Lynas Rare Earths Ltd (ASX: LYC) shares are in some strife.

The minerals stock is 47% down from its April 2022 peak. That’s a halving of value over just 22 months.

According to Catapult Wealth portfolio manager Tim Haselum, the market’s latest worry was the financial figures.

“Revenue of $112.5 million in the second quarter of fiscal year 2024 was down [in] the first quarter in response to lower production levels and weaker rare earths prices,” Haselum told The Bull.

However, all that matters is what happens from here, and Haselum is bullish.

“First feed of material from Mt Weld was introduced to the Kalgoorlie rare earths processing facility.

“The company’s amended operating licence in Malaysia is valid to March 2, 2026.”

He added that in the mining industry, rare earths tended to be “the first commodity to bottom and then the first to recover”.

Haselum is far from the only professional loving Lynas as a bargain buy right now.

CMC Invest shows that 10 out of 12 analysts rate the mining shares as a buy, with nine of them recommending strongly.

13% dividend yield!

New Hope Corporation Ltd (ASX: NHC) shares have had a similar journey to Lynas stocks, diving 28.7% since October 2022.

Even since October, the thermal coal miner has shaved 18.2% from its valuation.

Seneca Financial Solutions investment advisor Tony Langford reckons the numbers look fine from here.

“The company delivered a net profit after tax of $1.087 billion in fiscal year 2023, up 11% on the prior corresponding period. 

“New Hope finished the year with a healthy $731 million in net cash.”

The slump in the New Hope stock price has meant the dividend yield is now at a stunning 13.2%.

“Continuing demand for quality thermal coal makes New Hope particularly attractive for investors searching for yield at value.”

The post Down 47%: 2 ASX mining shares that could be on the way back up appeared first on The Motley Fool Australia.

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More reading

• Lynas shares rise on US merger talks
• 5 things to watch on the ASX 200 on Monday
• Here’s why I’d snap up this 13% yielding ASX 200 dividend stock in a heartbeat!
• Here are the top 10 ASX 200 shares today
• Goldman Sachs says these ASX 200 mining shares can rise 20%+

Motley Fool contributor Tony Yoo 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.

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Are you looking for ASX dividend shares for your income portfolio?

If you are, then you could check out the three listed below that have been tipped as buys.

Here’s what analysts are saying about these shares:

Accent Group Ltd (ASX: AX1)

Accent Group could be an ASX dividend share to buy this month.

It is the company behind a large number of footwear focused retail store brands such as The Athlete’s Foot, Stylerunner, HYPEDC, and Sneaker Lab.

The team at Bell Potter is bullish on the company and has a buy rating and 2.50 price target on its shares.

As for income, the broker is forecasting fully franked dividends per share of 12 cents in FY 2024 and then 14.1 cents in FY 2025. Based on the current Accent share price of $2.09, this represents dividend yields of 5.75% and 6.75%, respectively.

Aurizon Holdings Ltd (ASX: AZJ)

Another ASX dividend share that has been given the thumbs up by analysts is Aurizon.

It is Australia’s largest rail freight operator, moving more than 250 million tonnes of Australian commodities each year across its network.

Analysts at Ord Minnett are positive on the company and have an accumulate rating and $4.70 price target on its shares.

As for dividends, the broker is forecasting partially franked dividends of 17.9 cents per share in FY 2024 and then 20.4 cents per share in FY 2025. Based on the latest Aurizon share price of $3.76, this will mean yields of 4.75% and 5.4%, respectively.

Healthco Healthcare and Wellness REIT (ASX: HCW)

A final ASX dividend share that could be a buy is the Healthco Healthcare and Wellness REIT.

It is a leading health and wellness focused real estate investment trust with exposure to attractive megatrends.

Bell Potter is feeling positive about the company’s outlook. It has a buy rating and $1.75 price target on its shares.

In respect to income, it is forecasting dividends per share of 8 cents in FY 2024 and 8.3 cents in FY 2025. Based on the current Healthco Healthcare and Wellness REIT unit price of $1.35, this will mean yields of 5.9% and 6.15%, respectively.

The post 3 ASX dividend shares for income investors to buy now appeared first on The Motley Fool Australia.

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More reading

• Are Accent shares a good buy right now?
• Brokers say these ASX dividend shares are buys next week
• The ASX dividend dream: 18% returns to fuel your income goals
• Morgans says these ASX dividend shares are buys this month
• ASX domination: The 5.5% dividend stock to watch

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

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On Monday, the S&P/ASX 200 Index (ASX: XJO) started the week deep in the red. The benchmark index sank 0.95% to 7,625.9 points.

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

ASX 200 expected to fall again

The Australian share market is expected to fall again on Tuesday following a poor start to the week on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 30 points or 0.4% lower. In late trade in the United States, the Dow Jones is down 0.6%, the S&P 500 is down 0.25%, and the NASDAQ is 0.2% lower.

RBA meeting

All eyes will be on the Reserve Bank of Australia (RBA) today when the central bank holds its cash rate meeting. While the RBA is not expected to cut rates at this meeting, the market is likely to be looking for confirmation that the rate hike cycle is now over.

Oil prices charge higher

ASX 200 energy shares including Beach Energy Ltd (ASX: BPT) and Karoon Energy Ltd (ASX: KAR) could have a great session after oil prices charged higher overnight. According to Bloomberg, the WTI crude oil price is up 1.3% to US$73.22 a barrel and the Brent crude oil price is up 1.25% to US$78.30 a barrel. Middle East tensions gave prices a boost.

Fletcher Building remains a buy

Goldman Sachs believes that investors should be snapping up Fletcher Building Ltd (ASX: FBU) shares following yesterday’s tumble. In response to its update, the broker has retained its buy rating with a trimmed $4.65 price target. Goldman said: “[W]e believe cyclical risks are more than adequately reflected in FBU’s current valuation.”

Gold price falls

ASX 200 gold shares including Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) could have a subdued session after the gold price fell overnight. According to CNBC, the spot gold price is down 0.55% to US$2,042.6 an ounce. Higher bond yields put pressure on the precious metal.

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

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• History shows 2024 could be a big year for ASX 200 shares. Here are 3 to look at now
• Here are the top 10 ASX 200 shares today
• Why Core Lithium, Fletcher Building, Silver Lake, and Silver Mines shares are sinking
• Stocks on the rocks: Why the ASX 200 is backtracking from record highs today
• 5 things to watch on the ASX 200 on Monday

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

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If you’re looking for some new exchange traded funds (ETFs) to add to your portfolio, then read on.

That’s because listed below are three excellent ASX ETFs that could be top options for investors in February and beyond.

Here’s what you need to know about them:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

It’s almost the Lunar New Year, so what better time to check out the BetaShares Asia Technology Tigers ETF. This ASX ETF gives investors easy access to the best tech stocks in the Asian region (but excluding Japan). This means you’ll be buying a slice of world class companies such as e-commerce giant Alibaba, search engine leader Baidu, iPhone manufacturer Taiwan Semiconductor Manufacturing Company, and WeChat owner Tencent.

VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)

If you’re a fan of Warren Buffett and his investment style, then the VanEck Vectors Morningstar Wide Moat ETF could be for you. This hugely popular ASX ETF has been designed to provide investors with access to a portfolio of approximately 40 high-quality shares that have sustainable competitive advantages and fair valuations. These are the type of qualities that the Oracle of Omaha looks for when making investments.

Vanguard MSCI Australian Small Companies Index ETF (ASX: VSO)

If small caps are your thing then the Vanguard MSCI Australian Small Companies Index ETF could be worth considering. Especially with many analysts tipping small caps to boom this year if interest rates fall. This ASX ETF gives investors access to almost 200 quality mid and small-caps and not just the tail end of the stock market. Among its holdings are companies such as online travel agent Webjet Limited (ASX: WEB) and metal detector company Codan Limited (ASX: CDA).

The post Don’t miss out on these 3 excellent ASX ETFs in February appeared first on The Motley Fool Australia.

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• How I’m investing in ASX shares for my child
• The ultimate ASX growth shares I’d buy with $7,000 right now
• 3 excellent ASX ETFs to buy and hold in February
• Got $5,000? These are 2 of the best ASX growth stocks to buy right now
• Here are 10 ASX shares I’d buy in 2024

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 Baidu, Taiwan Semiconductor Manufacturing, and Tencent. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Alibaba Group. The Motley Fool Australia has recommended Betashares Capital – Asia Technology Tigers Etf and VanEck Morningstar Wide Moat ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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There’s nothing sweeter in investing than buying ASX shares before they’ve had the majority of their rally.

The great news is that, at any given time, opportunities abound for such thrilling rides.

Right now, here are three ASX shares I think are well placed to head upwards:

Internal and external factors lining up nicely

Lovisa Holdings Ltd (ASX: LOV) shares had an up-and-down 2023.

And it’s no wonder, with 13 interest rate rises deliberately distressing consumers and the consumer discretionary sector.

Through all this though, the budget jewellery retail business has been expanding.

Only a couple of months ago, the company revealed that its first stores in mainland China and Vietnam respectively were imminent.

Rates could stabilise this year and even come down, providing much-needed relief for cash-strapped consumers.

So after spending the middle majority of last year not knowing which way to go, it seems Lovisa shares are ready to trend upwards again.

The shares have now gained close to 30% since the start of November, as they inch closer back to their all-time highs achieved last May.

Professional investors are bullish on Lovisa from this point on.

According to CMC Invest, eight out of 12 analysts rate the stock as a buy.

The ASX shares that haven’t yet broken out

Over in the mining sector, Firefly Metals Ltd (ASX: FFM) is grabbing the attention of many fund managers.

Argonaut dealer Harrison Massey explained the excitement last week.

“FireFly, formerly known as AuTECO Minerals, completed the acquisition of the Green Bay Copper-Gold project in Newfoundland, Canada, in October 2023,” Massey told The Bull.

“The asset includes a significant ready-to-go underground copper deposit, which, in our view, offers considerable upscale potential amid a history of high-grade copper production.”

Aside from Massey’s team, CMC Invest indicates all three of Canaccord Genuity, Euroz Hartleys, and Shaw & Partners analysts believe Firefly shares are a strong buy.

This is why, after a flat period over December and January, the stock could break out for a rally soon.

Calming market fears

Healthcare stock Resmed CDI (ASX: RMD) looks poised for a bullish 2024 after putting last year’s Ozempic market panic behind it.

The concern was that such GLP-1 type of weight loss drugs could reduce obesity substantially around the world, thereby cutting down a major precursor of sleep apnoea.

ResMed makes devices that treat respiratory issues during sleep, so investors sold off in droves last reporting season.

But after a boom quarterly update last month that showed the worries were overstated, the ResMed share price is already 15% up this year.

Plenty of pros are backing a 2024 rally for the stock, with 18 out of 25 analysts surveyed on CMC Invest recommending buying right now.

The post Don’t look now, but these 3 ASX shares look poised for a nice rally appeared first on The Motley Fool Australia.

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More reading

• ‘Appealing outlook’: 2 ASX 200 shares that just started their latest rally
• Hoping to bag the ResMed dividend? You better be quick!
• Top brokers name 3 ASX shares to buy next week
• Buy these ASX growth shares for market-beating returns
• Why Lovisa could become one of the top ASX 200 shares for dividend income

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

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Shaver Shop Group Ltd (ASX: SSG) is a compelling ASX dividend stock that is expected to pay big dividends in the coming years. Those payouts could lead to a grossed-up dividend yield, which includes franking credits of more than 10%.

Considering the global share market has returned an average of around 10% per annum, getting that level of return from just the dividends could be very appealing (if the share price doesn’t go down over the long term).

How big is the Shaver Shop dividend going to be?

Shaver Shop paid an annual dividend per share of 10.2 cents in FY23. It has increased its dividend each year since 2017 when it first started paying a dividend.

The current estimate on Commsec suggests the business could pay an annual dividend per share of 10.3 cents, which would be a cash yield of 8.7% or a grossed-up dividend yield of 12.5%. That would be a huge yield, but at this stage, it’s just a forecast.

The dividend per share is forecast to be 10.4 cents in FY25, which would be a grossed-up dividend yield of 12.6%.

Shaver Shop’s dividend per share is forecast to jump in FY26 to 10.9 cents, which would be a grossed-up dividend yield of 13.2%!

Let me reiterate, analyst estimates are not guaranteed to happen.

Why is the ASX dividend stock’s yield so big?

I’d point to two reasons why this company is projected to pay such a large yield.

First, the dividend payout ratio is high, in FY24 it’s expected to be 86.5%. While that’s generous, it would also leave a little bit of profit in the business to re-invest for growth and/or improve the balance sheet.

Second, the business trades on a low multiple of its earnings, with a low price/earnings (P/E) ratio. While a low P/E ratio isn’t necessarily a good sign, it does have the effect of boosting the dividend yield. Retail businesses tend to trade on lower earnings multiples, compared to other sectors like ASX tech shares.

According to the estimate on Commsec, the Shaver Shop share price is valued at 10 times FY24’s estimated earnings.

Can the payout be maintained and keep growing?

I believe that demand for shaving products could remain fairly consistent – our body hair keeps growing, whether we want it to or not.

Pleasingly, a large amount of Shaver Shop’s earnings come from exclusive products, which means customers have to shop there if they want that particular product.

The ASX dividend stock can keep growing its network of stores, which can support total sales, even if same-store sales are challenged during 2024.

It is also growing its digital presence, with an expanded social media presence and a recent launch on TikTok. In the first four months of FY24, just over a fifth of its total sales were online.

If the profit can be stable and grow over time, then there’s a good chance the dividend can rise as well.

The post Should you buy this ASX dividend stock for its 12% yield? appeared first on The Motley Fool Australia.

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• Why I think these 2 ASX shares are steals

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.

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Passive income is one of the most pleasing things about ASX shares. Investors can use ASX stocks to gain $1,000 of passive income a month and perhaps more.

There are a variety of different ways to gain passive income, and we can find them on the ASX. Each of these methods can create income, though I’d suggest ASX companies will deliver the biggest yields.

Interest from cash

Typically you would have to go to a bank or credit union to get a financial product that pays interest from a cash deposit. But, on the ASX, there’s an option that takes investor money and spreads it across a number of term deposits at financial institutions in Australia.

Betashares Australian High-Interest Cash ETF (ASX: AAA) is the ASX investment that does just that. Its bank holdings include National Australia Bank Ltd (ASX: NAB), Bendigo and Adelaide Bank Ltd (ASX: BEN) and Bank of Queensland Ltd (ASX: BOQ).

The ETF pays the income monthly. At the moment, the interest rate is 4.45%.

Bonds

Owning bonds can be another form of passive income. Bonds are basically debt from a government or business. The borrower pays interest to the investors.

While investors can probably get a higher return from bonds focused on businesses, I’d prefer to focus on government bonds because, typically, they are safer.

Vanguard Australian Government Bond Index ETF (ASX: VGB) invests in Australian government bonds. The yield to maturity for this was around 4% on 31 December 2023.

Property

Property is a favourite asset class of many Aussies – and we can buy ASX shares that give exposure to property.

Real estate investment trusts (REITs) allow us to buy pieces of a business that have a portfolio of commercial property.

They pay out a large proportion of the net rental profit each year, creating a pleasing source of annual passive income.

I’ll mention the yields of a couple of my favourite REITs based on the projected payouts on Commsec.

For example, farm REIT Rural Funds Group (ASX: RFF) could pay a distribution yield of 5.7% and Centuria Industrial REIT (ASX: CIP) might pay a distribution yield of 4.9%.

Shares in ASX companies

One of the best things about ASX companies is that when they pay fully franked dividends, the franking credits boost the yield. For example, a 3.5% normal dividend yield becomes a grossed-up dividend yield of 5%, or a 7% yield can become a grossed-up dividend yield. Investors get the benefit of the credits when they do a tax return.

There are a number of larger ASX shares that have a history of paying sizeable and attractive dividends, such as Telstra Group Ltd (ASX: TLS), Wesfarmers Ltd (ASX: WES) and Coles Group Ltd (ASX: COL).

Some companies have grown their dividends for many years in a row, including Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), Brickworks Limited (ASX: BKW) and Sonic Healthcare Ltd (ASX: SHL).

I’ll also point out that listed investment companies (LICs) – which own a diversified portfolio of shares – can make investment returns and pay dividends to shareholders.

One of the most attractive things to me is that companies can both pay good dividends and achieve profit growth as they invest for more long-term growth. For example, Wesfarmers is a much bigger business than it was 15 years ago, and it’s paying a much bigger dividend.

Organic growth of dividends means that, over time, companies can deliver higher passive income than interest options and achieve capital growth.

$1,000 per month of passive income

Earning $1,000 per month translates into an annual passive income of $12,000 per year.

It depends on the yield for how much we’d need to make that much. With an 8% dividend yield, it’d take a portfolio value of $150,000.

A 5% yield would need a portfolio value of $240,000, and a 4% dividend yield would take a value of $300,000. But, lower yields may be safer and/or deliver stronger growth over time.

It might take a fair bit of time to reach a portfolio value of those amounts, so investing in ASX shares that could deliver good growth along with dividends would be prudent, particularly for younger Aussies.

The post How can I make $1,000 a month from ASX shares? appeared first on The Motley Fool Australia.

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• Retirees: 2 Top ASX dividend shares I’d buy now for passive income in 2024
• Why I’m buying Soul Patts shares over the Vanguard Australian Shares Index ETF (VAS)
• Got $15,000? How I’d invest for a bulletproof ASX passive-income portfolio
• Top 5 most profitable ASX large-cap shares of 2023
• This ASX 300 stock is my favourite way to invest in Australian farmland

Motley Fool contributor Tristan Harrison has positions in Brickworks, Rural Funds Group, 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, Washington H. Soul Pattinson and Company Limited, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Bendigo And Adelaide Bank, Brickworks, Coles Group, Rural Funds Group, Telstra Group, Washington H. Soul Pattinson and Company Limited, and Wesfarmers. The Motley Fool Australia has recommended Sonic Healthcare. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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When is the best time to buy ASX shares? It’s when everyone else hates them!

It sounds obvious, but buying a stock when it’s cheap provides the best returns later. 

You’d be surprised how many people insist on grabbing shares when everyone else loves them and they’re already expensive.

In the bargain-hunting spirit, the team at QVG Opportunities Fund recently named two ASX shares that had a pretty ordinary January that they’re still backing for long-term gains:

Is this stock severely under-priced?

It’s been a sorry tale for real estate classified provider Domain Holdings Australia Ltd (ASX: DHG).

In the midst of 13 interest rate rises dampening the property market, the Domain share price has plunged almost 39% since the start of 2022.

The slide continued last month as the company kept struggling against the market leader REA Group Ltd (ASX: REA).

“Domain continued to soften after a poorly-received AGM update which showed listing volumes were tracking behind their major competitor,” stated the QVG analysts in a memo to clients.

“This listings volume discrepancy is largely explained by geographic mix, but given Domain’s patchy historic financial performance the market is disinclined to give them the benefit of the doubt.”

But as far as the QVG team is concerned, the Domain share price has slid too much considering the bullish business prospects from this point on.

“Domain has opened a very wide valuation gap between itself and REA Group. This gap is even wider than it first appears if you believe Domain can expand its margins over the next few years.”

The ASX shares with catalysts imminent

The Aussie Broadband Ltd (ASX: ABB) has lost a painful 35% since April 2022.

However, the market has been positive over the past four months since revealing its proposed acquisition of business telco Symbio Holdings Ltd (ASX: SYM).

It did have to go to market with a cap in hand though.

“Aussie Broadband continues to digest the large placement it made in November.”

The QVG Opportunities Fund retains Aussie Broadband shares as its fifth largest holding because the business simply has too many tailwinds coming to ignore.

“Aussie has a number of upcoming catalysts the most imminent of which is the completion of its acquisition of Symbio and articulation of the synergies associated with this purchase.”

The post Why one fund is backing these 2 hammered ASX shares from now on appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX 200 shares today

Motley Fool contributor Tony Yoo 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 Aussie Broadband, REA Group, and Symbio. The Motley Fool Australia has recommended Aussie Broadband, REA Group, and Symbio. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Have you got $20,000 saved up that you could invest?

Many of you reading this will, because comparison site Finder last year found the average Australian has double that amount saved in their bank account.

ASX shares can turn that into a nice passive income that could pay you thousands of dollars each month in return for no labour.

Curious? Read on.

Growth vs dividend

Hypothetically let’s construct that $20,000 into a well diversified stock portfolio.

The first step is to do your best to not take any money out of the investment and let it grow. If anything, you should be adding to the nest egg as much as you can.

Does this growth phase call for ASX growth shares, or can it be implemented with a bunch of dividend stocks?

Honestly, it doesn’t matter.

As long as you have done the research to satisfy yourself that the stocks will return a satisfactory compound annual growth rate (CAGR) over the long term, go for whatever you want.

Because both capital growth and dividend income contribute towards yearly growth if the latter is immediately reinvested.

How much could I gain each year?

So what kind of performance is realistic in the long run?

Let’s check out some examples.

Johns Lyng Group Ltd (ASX: JLG) and Cettire Ltd (ASX: CTT) are two growth stocks that have done pretty well in recent years, and experts reckon have a bright future.

The past has nothing to do with what might happen in the future, but let’s analyse their track record for the purposes of working out realistic return expectations.

Over the past five years, Johns Lyng shares have returned an amazing 524%. In just a tick over three years on the ASX, Cettire has gained 521%.

Even if we conservatively assume Cettire has been around for five years, it equates to a CAGR of about 44%.

Over in dividend land, Woodside Energy Group Ltd (ASX: WDS) and Growthpoint Properties Australia Ltd (ASX: GOZ) are pumping out excellent income.

The former is handing out a stunning 10.5% fully franked dividend yield, while the latter is paying 8.4% unfranked.

With these types of stocks, I think it’s not outrageous to imagine your portfolio could average out to 12% CAGR in the long run.

Ten years for the good times to roll

Going back to that $20,000 portfolio you constructed, let’s say you can afford to add $400 a month to the pot.

Let that brew with 12% CAGR, and after 10 years, it will have grown to $146,350.

From the 11th year, instead of reinvesting the returns, try cashing it in.

That will be $17,562 of passive income annually, on average.

This means $1,463 of cash landing in your bank account each month for the rest of your life.

That’s one way you can turn $20,000 into thousands of dollars of regular extra income.

The post $20,000 in savings? Here’s how I’d try to turn that into $1,463 a month of passive income appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Why Atlantic Lithium, Johns Lyng, Pro Medicus, and WiseTech shares are rising today
• 5 things to watch on the ASX 200 on Monday
• Buy these ASX growth shares for market-beating returns
• Australian first: Why Woodside shares are making news this week

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

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Living off dividend income in retirement sounds like a great life to me. But retirees who don’t work any more need to look after their portfolio dollars because if something goes really wrong, it’s not like they can easily replace that money.

Hence, there are some ASX dividend shares that I would want to buy for retirement because of their passive income, dividend yields and stability. The two dividend shares I’m going to write about below also offer a good rate of growth and a defensive profit profile.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Pattinson is one of the leading ASX dividend shares in my opinion. It has the best dividend growth record on the ASX – it has grown its annual ordinary dividend every year since 2000. It’s not guaranteed to keep going, but I think it has a very good chance.

The company operates as an investment house, meaning it invests in other businesses and assets. Some of its longest-held assets have been its best performers because of how small those companies were when Soul Pattinson first invested. I’m talking about Brickworks Limited (ASX: BKW), New Hope Corporation Limited (ASX: NHC) and TPG Telecom Ltd (ASX: TPG).

Some of its other largest investments include Tuas Ltd (ASX: TUA), Apex Healthcare, BHP Group Ltd (ASX: BHP), Macquarie Group Ltd (ASX: MQG), CSL Ltd (ASX: CSL), BKI Investment Company Ltd (ASX: BKI) and Commonwealth Bank of Australia (ASX: CBA).

Other investments include farms, structured yield (credit/bonds), financial service businesses, swimming schools, an electrical and electronic business (called Ampcontrol) and more.

The portfolio pays investment cash flow up to Soul Pattinson, and then the investment house sends a lot of that cash to shareholders. Its investments can grow their own payouts to Soul Pattinson and the investment house can also reinvest retained cash flow into new opportunities.

Based on the last 12 months of dividends, it has a grossed-up dividend yield of 3.7%.

Centuria Industrial REIT (ASX: CIP)

This is a real estate investment trust (REIT) and reportedly Australia’s largest domestic pure-play industrial property investment vehicle.

Its properties are located in very useful locations which are close to key infrastructure.

At the end of the FY24 first quarter, the ASX dividend share had a weighted average lease expiry (WALE) of 7.8 years, which means it has a lot of rental income baked in. The business also had a portfolio occupancy rate of 98.6%, showing its portfolio is in high demand.

Its organic rental income growth is also showing signs of industrial property being in high demand. In the FY24 first quarter, it achieved a 48% positive re-leasing spread, meaning the rate for the new rental contracts was 48% higher than the old rental contracts. This level of rental growth can help send distributions higher in future years.

In FY23, its biggest tenants by rental income were Telstra Group Ltd (ASX: TLS), Woolworths Group Ltd (ASX: WOW), Arnotts, AWH, Visy and Fantastic Furniture.

Centuria Industrial REIT is expected to generate funds from operations (FFO), or net rental profit, of 17 cents per security and pay a distribution per security of 16 cents for FY24. This would suggest a forecast forward distribution yield of 5%.

The post Retirees: 2 Top ASX dividend shares I’d buy now for passive income in 2024 appeared first on The Motley Fool Australia.

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More reading

• Why I’m buying Soul Patts shares over the Vanguard Australian Shares Index ETF (VAS)
• Got $15,000? How I’d invest for a bulletproof ASX passive-income portfolio
• Top 5 most profitable ASX large-cap shares of 2023
• Brokers say buy these ASX 200 dividend stocks with juicy yields
• Are Brickworks or Soul Patts shares a better ASX buy? Here’s my take

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, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks, Macquarie Group, Telstra Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended CSL and Tpg Telecom. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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