The S&P/ASX 200 Index (ASX: XJO) had a fairly decent month last month. Over April, the ASX 200 rose from 7,177.8 points to 7,309.9 points – a rise of 1.8%. But let’s talk about the Coles Group Ltd (ASX: COL) share price. 

Coles shares started last month at $18.02 a share. But by the close of trading on 28 April, the Coles share price was up to $18.20. That’s a gain of exactly 1%. Not a bad return, all things considered. But it still leaves Coles as a market loser over April:

So what happened with Coels shares last month that might explain why the ASX 200 came out on top?

Why did the Coles share price lose out to the ASX 200 in April?

Well, there were a few developments that are worth covering. Firstly, in early April, Coles announced that it would be acquiring two automated milk processing facilities, one in New South Wales, and one in Victoria. It announced the $105 million purchase from Saputo Dairy Australia on 3 April. Investors responded positively at the time.

Coles was also the beneficiary of some ASX broker love last month. On 19 April, we took a look at broker Morgans’ positive view on the Coles share price. The broker gave Coles an add rating, with a 12-month share price target of $19.60. It also predicted that the grocery giant will continue to lift its dividends well into FY2024.

But perhaps the biggest piece of news out of Coles in April was the third-quarter sales report that the company revealed on 28 April.

As we covered, this saw Coles announce that total group sales revenue for the period between 2 January and 26 March rose 6.5% over the previous year to $9.67 billion. Coles’ supermarket, liquor and eCommerce sales all grew over the period too, with an impressive 28.9% rise in online liquor sales.

All in all, it looks like it was all good news for Coles over April. So why were investors hesitant to push Coles shares to a market-beating position last month? Well, there’s no easy answer. But consider that the Coles share price remains up around 10% year to date in 2023 so far.

In stark contrast, the ASX 200 has only gained around 3.3% this year. Since Coles has tripled the gains of the broader market in 2023, investors might forgive the small market underperformance it recorded last month.

At the current Coles share price, this ASX 200 blue chip share has a market capitalisation of $24.18 billion, with a dividend yield of 3.65%.

 

The post Why did the Coles share price underperform the ASX 200 Index in April? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Coles 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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The AGL Energy Ltd (ASX: AGL) share price has dropped by around 60% since February 2020. It has been one of the worst S&P/ASX 200 Index (ASX: XJO) stocks over that period.

AGL is an ASX energy share that is facing turbulent times as it looks to succeed in a world that is decarbonising.

It’s a tricky situation for the business because not only is it planning to close its coal power plants, but it’s also planning to invest heavily in renewable energy and batteries to replace that lost power generation, which could take a lot of capital.

But, sometimes the market can be overly pessimistic about a company, which could mean the AGL share price is a contrarian opportunity.

Low earnings expected in FY23

AGL reported a statutory loss of $1.08 billion in the first half of FY23, including $706 million of impairment charges (after tax) because of its accelerated decarbonisation plan.

The FY23 half-year underlying earnings before interest, tax, depreciation and amortisation (EBITDA) was $604 million, down 16%. Underlying net profit after tax (NPAT) dropped 55% to $87 million.

In FY23, the ASX 200 stock is expecting underlying EBITDA to be between $1.25 billion to $1.375 billion while underlying NPAT is guided to be between $200 million to $280 million.

But, AGL has provided commentary that the outlook beyond FY23 remains positive.

The company recently said with its HY23 result that wholesale electricity pricing “remains elevated compared to prior periods with AGL expected to benefit as historical contract positions are reset in FY24 and FY25. Additional, sustained periods of higher wholesale electricity prices are expected to flow through to retail pricing outcomes, and the Torrens Island and Broken Hill batteries are anticipated to commence operations in mid-2023.”

Is the AGL share price good value considering future earnings?

Earnings per share (EPS) could soar in FY24 and FY25, according to the current estimates.

Forecasts on Commsec currently suggest possible EPS of 83.5 cents in FY24 and 97 cents in FY25.

Those estimates put the AGL share price at 10 times FY24’s estimated earnings and 9 times FY25’s estimated earnings.

For a defensive sector like energy retailing, I think the above price/earnings (P/E) ratios look quite low for the ASX 200 stock. It wouldn’t surprise me to see the AGL share price rise by at least another 20% over the next 15 months.

On top of that, the business is expected to pay an annual dividend per share of 56.3 cents in FY24, according to Commsec, which would be a dividend yield of 6.5%. The dividend could then grow to 70 cents per share, which would be a dividend yield of 8.1%.

The business is advancing its planned 500 MW Liddell battery and 250 MW, 8-hour storage for Muswellbrook pumped hydro.

I think the promising earnings rebound in the short term and the plan to invest in renewable energy generation make AGL a compelling contrarian idea.

The post Are AGL shares the most underrated ASX 200 stock opportunity? appeared first on The Motley Fool Australia.

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• 6 excellent ASX 200 dividend shares that aren’t banks or miners
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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National Australia Bank Ltd (ASX: NAB) shares are plummeting on Thursday. In fact, the big four bank’s stock is trailing the entire S&P/ASX 200 Index (ASX: XJO) right now.

It follows the release of the bank’s first-half earnings, wherein it revealed a record profit. Though, its performance didn’t live up to expectations.

The NAB share price is currently down 7.6% at $26.38.

Now, one top broker reportedly expects consensus forecasts on NAB’s earnings per share (EPS) to be revised downwards.

NAB shares trail ASX 200 on earnings release

NAB shares are suffering on the release of the bank’s earnings for the six months ended 31 March. As my Fool colleague James reported earlier, its results disappointed Goldman Sachs.

Now, UBS has weighed in, saying the bank posted a “weaker than expected” net interest margin (NIM) for the period, as per The Australian.

NAB’s NIM climbed to 1.77% last half – helped by a barrage of interest rate hikes put forward by the Reserve Bank of Australia (RBA). However, an increase in home lending competition and higher funding costs offset some of the benefits.

Meanwhile, its statutory net profit rose to around $4 billion and its dividend was upped to 83 cents per share.

The publication quoted UBS analyst John Storey as saying:

The standout for us was NIM only rising 10 basis points versus the previous half year with NAB calling out peaking NIM in Dec22 of 1.79%, with a [second quarter] exit NIM of 1.76%.

This result in our view confirms consensus is likely to revise EPS down further.

But it wasn’t all bad news. NAB noted consumption and growth in the Australian economy are starting to soften, with inflation also appearing to moderate – meaning interest rates are likely at or around their peak.

It also stated that it looks more and more likely that Australia could dodge a “pronounced economic correction”.  

The NAB share price is now 10% lower than it started the year. It has also fallen 18% since this time last year. Comparatively, the ASX 200 has risen 3% year to date and has fallen 2% over the last 12 months.

The post NAB shares dive 8% as EPS downgrades expected appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper 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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S&P/ASX 200 Index (ASX: XJO) shares are taking a tumble today, down 0.6% in late morning trade, having earlier posted losses of 0.9%.

Unless there’s a turnaround later in the day, this will mark the third straight day of losses for the benchmark index.

The ASX 200 first came under renewed pressure on Tuesday following another boost in interest rates from the RBA that caught the market by surprise.

Today’s pressure also looks to come largely from higher interest rates. Only this time, we have the United States Federal Reserve to thank.

US Fed adds more pressure to the ASX 200

While most of us were sleeping in Australia, the Federal Open Market Committee (FOMC) opted to boost the official US interest rate by another 0.25%. That brings the Fed’s target rate to a range of 5.00% to 5.25%. You’d need to head back to 2007 to find rates any higher in the US.

The ASX 200 looks to be following the lead of US markets, where all the major indexes tumbled more than 1% following the Fed’s announcement.

On the plus side of this ledger, the Fed has eased back on its hawkish tone.

Where before the central bank had said it anticipated that some additional interest rate increases might be required, that was left out of the FOMC’s statement yesterday.

A pause in the tightening cycle next month would offer some fresh tailwinds for US equities as well as ASX 200 shares.

“A decision on a pause was not made today,” Fed chair Jerome Powell said before highlighting the dovish shift in language.

“That’s a meaningful change that we’re no longer saying that we anticipate” more rate increases, he said (quoted by Bloomberg).

Instead the FOMC “will closely monitor incoming information and assess the implications for monetary policy”.

“So we’ll be driven by incoming data, meeting by meeting, and we’ll approach that question at the June meeting,” Powell said.

As for a looming recession in the world’s top economy that could further pressure US equities and the ASX 200?

“It’s possible that we will have, what I hope, will be a mild recession,” Powell said.

“The case of avoiding a recession is, in my view, more likely than that of having a recession. But the case of having a recession, I don’t rule that out either.”

What are the experts saying?

Many investors continue to price in likely rate cuts from the Fed later in 2023. While that would be welcomed by global share markets, including the ASX 200, most experts don’t see that happening.

Here’s what some of the top thinkers are saying (courtesy of The Australian Financial Review).

“Although we too think the Fed is likely done with further rate hikes, we think September is too early for cuts,” TD Securities stated.

“Given the lagged effects of the Fed’s past rate hikes and recent tightening in financial conditions, we think rate cuts are more likely to start at the very end of 2023 or early 2024.”

According to Morgan Stanley:

With the range now at the Fed’s projected peak of 5.00% to 5.25%, we expect it to remain on hold before making the first 25bp cut in March 2024. Like the Fed, we see the effects of banking stresses on the economy as highly uncertain and will hone our expectations for the economy and monetary policy as incoming data evolves.

And for ASX 200 investors still hoping to see the US Fed bring down rates this year, here’s what Schwab’s Liz Ann Sonders said:

The Fed is already suffering a credibility problem—a pivot to rate cuts with inflation still well above their target, and in the absence of significant deterioration in its other mandate (employment), would really damage what remains of their inflation-fighting cred.

With the ASX 200 now down 2.9% from Monday’s intraday highs, I’d say most Aussie investors, retail and professional, have already priced in another year of high rates from both the RBA and the Fed.

In fact, now might be a great time to hunt for companies trading at bargain prices.

The post The US Fed just lifted rates again. Here’s how the ASX 200 is responding today appeared first on The Motley Fool Australia.

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

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The share price of S&P/ASX 200 Index (ASX: XJO) lithium producer Allkem Ltd (ASX: AKE) is rising after the company announced it has discovered a new high grade zone.

An additional swarm of spodumene-bearing pegmatite dykes have been uncovered at the James Bay Project, located in Canada.

Right now, Allkem shares are swapping hands for $12.03 apiece – 0.3% higher than the stock’s previous close.

Meanwhile, the ASX 200 is currently down 0.74%.

Let’s take a closer look at today’s news from the ASX 200 lithium share.

ASX 200 lithium share gains on new high grade zone

The Allkem share price is moving upwards on the announcement of what managing director and CEO Martin Perez de Solay called “outstanding” drill results.

The company’s winter drilling program uncovered the find, which is located directly northwest of known mineralisation at the project. It includes intercepts including:

• 125 metres at 1.7% lithium oxide from 68 metres in drill hole JBL-23-048
• 72 metres at 1.89% lithium oxide from 11 metres in drill hole JBL-23-024

Such results represent downhole thicknesses. True thicknesses are estimated to be 60% to 80% of downhole thicknesses.

Additionally, drilling in the eastern portion of the deposit confirmed both the continuity and lithium grade of spodumene-bearing pegmatite dykes.

Perez de Solay commented on the news driving the Allkem share price today, saying:

The significant grade and thickness of these drill results is outstanding and the addition of a new zone of mineralisation to the [northwest] of the current resource provides scope for potential additions to resources and reserves as we further drill out this area.

The company’s winter drilling program, which concluded last month, saw 130 drill holes completed for a total of 29,164 metres. Around 6,700 assays from the program have been received, with a further 2,400 still to come.

Allkem plans to update James Bay’s mineral resource estimate following the receipt of all assays. It’s also preparing to undergo further work to better understand the new find.

The company has been busy increasing its tenement holdings in and around the James Bay project over the last six months. It has staked 29 new claims and acquired another 131 claims.

Allkem share price snapshot

The Allkem share price has been outperforming the ASX 200 for some time now.

The stock has risen 9% so far this year. It’s also currently 1% higher than it was this time last year.

Meanwhile, the ASX 200 has lifted 4% year to date and has slumped 1% over the last 12 months.

The post ASX 200 lithium share Allkem lifts on ‘outstanding’ find appeared first on The Motley Fool Australia.

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• What’s the forecast for the lithium price in May?
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• These are the ASX 200 lithium shares to buy due to a new ‘game changing’ technology
• Here are the top 10 ASX 200 shares today
• Making it rain: Could this signal a boom for ASX 200 lithium stocks?

Motley Fool contributor Brooke Cooper 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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ASX 200 lithium shares have been gaining popularity in the last couple of years, but only some of them pay a dividend.

Two ASX 200 lithium shares that could be buys for passive income are Pilbara Minerals Ltd (ASX: PLS) and Mineral Resources Ltd (ASX: MIN).

Let’s take a look at these two ASX 200 lithium shares in more detail.

Mineral Resources

Mineral Resources is not just an ASX 200 lithium share, the company also produces iron ore. The company has part ownership of two lithium mines – the Mt Marion Lithium Project and the Wodgina Lithium Project, both in Western Australia.

Mineral Resources delivered a dividend of $1.20 in the first half of this year and $1 in the second half of last year.

This means in the past year, Mineral Resources has delivered $2.20 worth of dividends to investors. This represents a trailing dividend yield of 3.06% based on the company’s last closing price of $71.93.

On this basis, I could have earned $100 a month ($1200 yearly) if I had invested $39,216 in Mineral Resources shares in the last year.

Mineral Resources shares have risen 28.26% in the past 52 weeks but have fallen nearly 7% in the last month.

Looking ahead, analysts at Morgans are tipping Mineral Resources to pay a fully franked dividend of $5.79 in the 2024 financial year. This represents a forward dividend yield of 8.05% based on the current share price.

If this was to eventuate, I would only need to invest $14,907 a year or $1,242 a month over 12 months to achieve a monthly passive income of $100 (or yearly income of $1,200) from this ASX 200 lithium share.

Pilbara Minerals

Pilbara Minerals announced a maiden interim dividend in the first half of this year of 11 cents per share.

However, analysts are tipping Pilbara’s dividend could increase in the future.

Macquarie is tipping Pilbara to pay fully franked dividends per share of 42 cents in total in FY23.

Looking at this forecast, a 42 cents per share dividend for the financial year would equate to a dividend yield of 10% based on Pilbara’s last closing share price of $4.20.

On this basis, you could achieve $100 income a month ($1,200 annually) from Pilbara shares if you invested $12,000 a year (or $1,000 each month for a year) in the company’s share price.

Pilbara shares have returned 58% in the last year and are currently fetching $4.20.

Pilbara produced 148,131 dry metric tonnes (DMT) of spodumene concentrate in the March quarter of 2023. This was down 9% on the March quarter. However, the company’s cash balance increased 21% on the previous quarter to $457 million.

The post 2 ASX 200 lithium shares to buy for $100 monthly passive income each appeared first on The Motley Fool Australia.

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• Guess who has just downgraded Mineral Resources shares to a sell rating
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• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• What’s the forecast for the lithium price in May?

Motley Fool contributor Monica O’Shea 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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The Lake Resources N.L. (ASX: LKE) share price failed to gain traction in April despite the company releasing numerous exciting updates.

After closing March at 44.5 cents, the stock soared to its April peak of 56 cents on 17 April.

Sadly, its gains weren’t to last. Shares in the lithium hopeful plummeted to a 52-week low of 40.5 cents on 27 April before recovering slightly to close the month at 42 cents.

That marks a 5.6% fall for the 30-day period.

For comparison, the S&P/ASX 200 Index (ASX: XJO) climbed 1.8% last month.

So, what got the Lake Resources share price down in April? Let’s take a look.

Lake Resources share price slumps amid Kachi milestones

The Lake Resources share price slumped last month despite a barrage of news of the company’s flagship Kachi Project.

First up, the lithium hopeful revealed independent testing found lithium produced at the project had purity grades of over 99.8%. Stock in the company jumped 8% on the news.

It marked a major win for both the project and the direct lithium extraction technology (DLE), developed by partner Lilac Solutions, used there.

The technology was previously slammed by short sellers who were sceptical that it would work to make the process of extracting lithium from brine more sustainable.

And that wasn’t all. Lake Resources announced the project’s maiden production just two weeks later, sending its share price soaring 18%.

Kachi’s lithium pilot plant produced 2,500 tonnes of lithium carbonate equivalent using Lilac’s DLE technology. In a joint statement, both companies’ CEOs said:

Today, we’ve proven that it is possible to produce high-purity lithium faster and without evaporation ponds – all while protecting surrounding communities and ecosystems.

Finally, the ASX 200 lithium up-and-comer dropped its report for the March quarter on the final trading day of April.

The market remained unfazed by the $113 million of cash and $206 million of unused financing facilities found on the company’s balance sheet as of 31 March.

Lake Resources stock underperforms ASX 200

Unfortunately, last month’s slump was just the latest experienced by the Lake Resources share price.

The stock is currently 38% lower than it was at the start of 2023. It has also fallen 72% since this time last year. Meanwhile, the ASX 200 has risen 4% year to date and has fallen 1% over the last 12 months.

Not to mention, the lithium stock remains one of the most shorted on the ASX. It had a short position of 8.57% as of 27 April.

The post The Lake Resources share price dumped another 6% in April. Here’s the lowdown appeared first on The Motley Fool Australia.

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• What’s the forecast for the lithium price in May?
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• Here are the 10 most shorted ASX shares
• 2 ASX lithium shares this US institutional investor is buying up big (and one it’s selling)
• Making it rain: Could this signal a boom for ASX 200 lithium stocks?

Motley Fool contributor Brooke Cooper 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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If you’ve been to an airport over the past six months, you would hardly think that Australia and the world are at the brink of economic calamity.

There are travellers climbing over each other to pay a fortune for plane tickets, desperate to fly off for a trip.

Who would even know mortgage holders have copped 11 interest rate rises in the space of just one year?

The team at Elvest Fund this week revealed that it’s taking full advantage of this theme through its holdings in two ASX travel shares:

‘Rapid recovery in leisure travel’

Helloworld Travel Ltd (ASX: HLO) shares have, believe it or not, already rocketed 124% so far this year. 

But Elvest analysts reckon there’s plenty more where that came from, as the travel agent seems to have underplayed its prospects for the current quarter.

“The new guidance range of $38 to $42 million implies EBITDA slows during the seasonally strong June quarter — an unlikely scenario given the upward trajectory of travel activity,” they said in a memo to clients.

The last quarter was admittedly extremely strong.

“Third quarter FY23 EBITDA came in at $14.2 million, up from a $4.9 million loss in the prior corresponding period,” read the memo.

“Helloworld upgraded FY23 EBITDA guidance by a further 33% (at the midpoint), driven by the continued rapid recovery in leisure travel during the March quarter.”

The wider professional community concurs with the Elvest analysts. Five out of six analysts currently surveyed on CMC Markets rate Helloworld shares as a buy.

Huge contract win

Corporate Travel Management Ltd (ASX: CTD) shares haven’t quite doubled like Helloworld, but have still served investors pretty well with a 39.3% hike year to date.

The big catalyst came last month.

“Corporate Travel announced a large two-year travel management contract with the UK Home Office,” read the Elvest memo.

“Estimated at $3 billion of total transaction value, the contract is for the management of accommodation and travel for asylum seekers.”

In fact, the share price soared more than 10% on the morning of the announcement.

The team has the same confidence in Corporate Travel as it does with Helloworld, although the former’s business-orientated clientele might mean the performance boost is delayed.

“The broader outlook for Corporate Travel is improving,” read the memo.

“Though we expect Corporate Travel’s post-COVID recovery will lag by six to 12 months as airline capacity normalises.”

Elvest’s peers are more divided on Corporate Travel than Helloworld, with nine analysts on CMC Markets rating it as a buy versus seven saying hold. One holdout is urging a strong sell.

The post 2 ASX travel shares poised for a massive 2023 appeared first on The Motley Fool Australia.

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• 5 top ASX shares that would have more than doubled your money in 2023
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Motley Fool contributor Tony Yoo has positions in Corporate Travel Management. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Helloworld Travel. The Motley Fool Australia has positions in and has recommended Helloworld Travel. The Motley Fool Australia has recommended Corporate Travel Management. 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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ASX dividend shares can unlock some good passive income. But, there are a few that have particularly high dividend yields which could be worth knowing about.

Businesses that have a low price/earnings (P/E) ratio and/or have a particularly high dividend payout ratio can have a large dividend yield.

Investors should ensure that if they’re going for a dividend yield, the underlying business has a good future and the valuation makes sense. The following two names could pay large yields in FY23 and beyond.

Adairs Ltd (ASX: ADH)

Adairs is a business that sells furniture and homewares through three different brands – Adairs, Mocka and Focus on Furniture.

The business is expected to pay a very large dividend yield in FY23. Estimates on Commsec suggest that the ASX dividend share could pay an annual dividend per share of 16.8 cents in FY23 and 19 cents per share in FY24. This could mean the grossed-up dividend yield for FY23 may be 10.6% and the FY24 grossed-up dividend yield might be 12%.

This business has seen plenty of volatility over the past two years. But, after dropping around 50% since June 2021, the business is now on a very low valuation in terms of its P/E ratio.

It might generate 27.2 cents of earnings per share (EPS) in FY23 and then 30 cents of EPS in FY24, according to Commsec. These forecasts put the Adairs share price at 8 times FY23’s estimated earnings and under 8 times FY24’s estimated earnings.

The ASX dividend share is aiming to grow its profit through opening new stores, upsizing some stores to bigger locations (which are more profitable), growing its loyalty member base and increasing its online sales.

Pacific Current Group Ltd (ASX: PAC)

Pacific Current describes itself as a multi-boutique asset management business. It uses its strategic resources, including capital, institutional distribution capabilities and operational expertise to help its partners excel.

In other words, it invests in fund managers around the world to help them grow. One success story has been GQG Partners Inc (ASX: GQG) which grew into one of the biggest fund managers on the ASX. Some of the fund managers that it’s invested in include Aether, Banner Oak, Carlisle, Proterra and Victory Park.

Pacific Current has grown its dividend each year since 2018 and dividends are expected to keep rising for the years to come, according to Commsec. The FY23 dividends per share could be 41 cents and 46.5 cents per share in FY24.

These estimates suggest that the ASX dividend share could pay a grossed-up dividend yield of 8.1% in FY23 and 9.2% in FY24.

The underlying fund managers are seeing growth of funds under management (FUM), which can then help revenue, earnings and the dividend. In the three months to 31 March 2023, aggregate FUM grew 6.9% in Australian dollar terms. It continues to make the occasional investment into another fund manager, opening up another avenue of growth for the business.

Assuming asset markets keep growing over the long term, as they have in the past, this is a useful organic boost for the ASX dividend share’s ability to make a profit and pay dividends.

The post 2 ASX dividend shares with seriously huge payouts appeared first on The Motley Fool Australia.

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More reading

• Investing 15% of my salary could yield $500 in a monthly second income
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Adairs. The Motley Fool Australia has positions in and has recommended Adairs. 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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The Zip Co Ltd (ASX: ZIP) share price declined in the month of April but it was not the only buy now, pay later (BNPL) share to fall.

Zip shares fell 8.9% from 56 cents at market close on 30 March to 51 cents at market close on 28 April.

Let’s take a look at what weighed on the Zip share price during the month of April.

What went on?

Zip outperformed multiple ASX BNPL shares during the month. For example, Block Inc (ASX: SQ2) shares declined 11% in April, while Sezzle Inc (ASX: SZL) shares plunged 18%.

Market sentiment for the BNPL sector appeared to be bearish in April amid wider market turmoil and ongoing US recession talk.

ASX BNPL shares including Zip followed in the footsteps of US counterparts. Affirm Holdings Inc (NASDAQ: AFFM) slid 12.51% in the month of April, while Block’s US listing Block Inc (NYSE: SQ) slid 11.24%.

Zip’s major announcement to the market during the month was a quarterly update on 20 April. On the day of this announcement, Zip shares climbed nearly 2%.

Group quarterly revenue lifted 15% on the prior corresponding quarter, transaction volume also jumped by 9% to $2.2 billion.

The company’s cash transaction margin also rose to 2.8% for the quarter, up from 2.5% in the third quarter of FY22. Revenue margin also leapt to 8.3%, up from 7.9% in the prior corresponding quarter.

Zip said its US business is experiencing “solid momentum” and is on track to end FY23 EBTDA positive. Zip’s CEO and co-founder Larry Diamond moved to the USA in October, stating at the time “there is still a significant opportunity for fintech in the US”.

Commenting on Zip’s outlook, CEO, managing director and founder Larry Diamond said:

We recognise that many household budgets are under pressure, whether it be inflation or
the rising cost-of-living, which means our mission and purpose has never been more
relevant.

Also during the month, Zip became the new partner of the fitness platform Peloton Australia. ZIP ANZ CEO Cynthia Scott said this will offer Zip customers “a flexible and transparent financing option for Peloton’s products”. She added:

This is also incredibly timely, with shifts in spending habits and preferences in a post-pandemic world becoming the new norm. 

Zip share price snapshot

The Zip share price has declined 56% in the last year.

Zip has a market cap of about $388.3 million based on the last closing price.

The post Why did the Zip share price dump 9% in April? appeared first on The Motley Fool Australia.

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More reading

• Short sellers reveal 4 ways to spot dud ASX shares
• Here are the 10 most shorted ASX shares
• The Zip share price is down 49% in a year. Here’s why I still won’t buy
• These are the 10 most shorted ASX shares this week
• Why Bank of Queensland, Link, Silk Laser, and Zip shares are pushing higher

Motley Fool contributor Monica O’Shea 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 Zip Co. 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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