The Qantas Airways Limited (ASX: QAN) share price hit a spot of turbulence on Tuesday.

The airline operator’s shares dropped 3% to end the day at $6.54.

This followed the announcement that Qantas’ long-serving CEO, Alan Joyce, would be retiring from the role later this year. Joyce will be replaced by the company’s current chief financial officer, Vanessa Hudson.

When Joyce finally departs in November, he will have been at the helm for approximately 15 years. Investors appear concerned what this change could mean for the company and ultimately their investment.

Well, the good news is that one leading broker appears to believe it will be business as usual for Qantas. As a result, it has retained its buy rating on Qantas’ shares.

What is being said about the Qantas share price?

According to a note out of Goldman Sachs, its analysts have retained their buy rating and $8.30 price target on its shares.

Based on the current Qantas share price, this implies potential upside of 27% for investors over the next 12 months. Goldman commented:

QAN has announced that Vanessa Hudson will succeed Alan Joyce as CEO of QAN from November 2023. Ms. Hudson is QAN’s current CFO and has held a number of roles (commercial, customer and finance) at the company since 1994. QAN highlighted that Ms. Hudson has been directly involved in shaping/executing the current strategy, including the fleet selection process for the renewal of the domestic aircraft fleet.

We are Buy-rated on QAN, and the shares are on our Conviction List. Our 12-month target price of A$8.30 is based on a 50%/50% weighted blend of our DCF and EV/EBITDA (QAN’s pre-COVID multiple and is discounted at QAN group WACC for a 12m fwd valuation) valuations. […] Our estimated FY24e EPS sits 65% above pre-COVID levels. Despite this, QAN’s market capitalisation is only 10% above pre-COVID levels (EV 8% lower).

The post Here’s what this broker is saying about the Qantas share price appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• How might Qantas shares perform under Vanessa Hudson?
• Brokers name 3 ASX 200 blue chip shares to buy
• Why Beach, Computershare, Endeavour, and Qantas shares are dropping today
• Qantas share price falls on CEO succession news

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.

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New Hope Corporation Limited (ASX: NHC) shares have dropped 12% in the last month as market sentiment about the ASX coal share wanes.

Coal prices shot up enormously after the Russian invasion of Ukraine triggered countries to look for alternative sources of energy.

Higher coal prices led to enormous profit generation for New Hope. Indeed, the business is still making considerable profit and directors have been buying up New Hope shares. So is this a good time to be considering the ASX mining share?

Director buying

New Hope chair Rob Millner and his son have been buying a lot of shares in the coal miner.

Another investment was made by the Millners in late April 2023.

T G Millner Holdings Pty Limited bought another 100,000 New Hope shares at a price of $5.542 for a total cost of $554,200. This was an on-market trade, so ordinary investors like you and I would be able to copy this move — if we wanted to.

The New Hope share price has dropped another 4% since that investment, so people can grab a slice of New Hope today at a cheaper price.

Indeed, the Millners have significant money invested in New Hope shares. According to the latest ASX announcement, Rob Millner has direct interests in 279,559 shares and indirect interest in another 5,743,215 New Hope shares. That means that the total exposure is now $32 million.

Of course, the Millners have even more exposure to New Hope through their holding of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shares. Soul Pattinson is a substantial shareholder of New Hope shares.

Is the New Hope share price a buy?

A couple of months ago, we got to see New Hope’s FY23 half-year result for the six months to 31 January 2023.

It saw net profit after tax (NPAT) rise by 102.4% to $668.6 million while operating cash flow improved by 117.3% to $983.5 million.

The business declared an ordinary dividend of 30 cents per share and a special dividend per share of 10 cents. The total payout of 40 cents per share represented an increase of 33% year over year.

Using the current estimates on Commsec, New Hope is valued at just 4x FY23’s estimated earnings. The annual payout could be 75 cents per share, which equates to a grossed-up dividend yield of 20%.

For almost any business, those would be attractive metrics. But the coal price may not stay as high as it is. New Hope earnings are expected to fall in FY24 and then FY25, according to Commsec forecasts. The ASX coal share is valued at 5x FY25’s estimated earnings, which is still very low.

The Millners think the current New Hope share price is good value. If New Hope can continue to generate good earnings then it may well be cheap, and the dividends could continue to be rewarding. It may also be some time before enough alternative energy is available to replace coal.

However, I’d rather invest in a business where earnings are more likely grow over the longer term. As well, coal is certainly not a popular investment when it comes to investing with ESG considerations in mind.

The post Directors are still buying the dip in New Hope shares. Should you? appeared first on The Motley Fool Australia.

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More reading

• How I’d invest $1,000 in May to make easy passive income
• ASX 200 dividend stocks: Here’s a diamond in the rough yielding 18%!
• 12 ASX dividend shares with yields over 10%. Are they too good to be true?
• Here are the top 10 ASX 200 shares today
• How to mine $100 a month in passive income from 2 ASX 200 coal stocks

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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It looks like it’s going to be another busy month for investors and the ASX 200 index.

Three ASX 200 stocks that I will be watching like a hawk this month are named below. Here’s why they could be worth keeping a close eye on in May:

Brainchip Holdings Ltd (ASX: BRN)

This struggling semiconductor company will be an ASX 200 stock to watch this month (before it is likely kicked out of the index in June). I’ve been warning people off this meme stock for some time, and with its shares down 60% over the last 12 months, I’m feeling somewhat vindicated. Though, it still appears wildly overvalued, but that’s a story for another day.

On 23 May, BrainChip will be holding its annual general meeting. I will be watching very closely at the shareholder votes on the remuneration report and the proposed issue of stock to its executives and directors.

In respect to the latter, despite its share price decline, the company’s admittance that its Akida platform was not good enough, and its pitiful cash receipts (US$40k in Q1), the $700 million company wants shareholders to approve the issue of 2,264,493 restricted stock units to its CEO, Sean Hehir, for nil cost. I’m interested to see if disgruntled shareholders will approve this and other generous share issues.

REA Group Ltd (ASX: REA)

Another ASX 200 stock that I will be watching closely is realestate.com.au owner and operator REA Group.

There’s no disputing the fact that the cash rate hikes have put pressure on the housing market. However, REA has managed to overcome this so far in FY 2023 and delivered solid top line growth during the first half.

On 12 May, we will be able to see if this positive form has continued for the ASX 200 stock. That’s because REA is scheduled to release its quarter results before the market open on that day.

Westpac Banking Corp (ASX: WBC)

Australia’s oldest bank will be an ASX 200 stock to watch this month. That’s because it is one of three big four banks that will be releasing their half-year results in May.

Westpac will be the third of the three to report, but arguably has more to look out for than its peers.

For example, the market will be looking for an update on its cost reductions plans. There are a lot of doubts that it will be able to cut costs as much as hoped in the current inflationary environment. If it can prove the doubters wrong, it could be a big boost to its share price.

In addition, its margins will be a key focus for investors. Goldman Sachs recently revealed what it is watching out for. It said:

WBC’s 2H22 NIM was up 5 bp hoh to 1.90% (ex Treasury & Markets at 1.80%) and we note that WBC’s exit NIM (ex Treasury & Markets) for the month of Sep-22 was 1.85%. WBC expects the 1H23 NIM (ex-Treasury and Markets) to be higher than the Sep-22 exit and higher again in 2H23 albeit with a moderating hoh increase.

With deposit competition currently being a key area of focus, we will be keen to get an update on how current levels of deposit repricing have impacted mix shifts, and what WBC’s expectations are around competition going into 2H23. We currently forecast 1H23E NIMs to increase +13 bp hoh to 2.03%

The post 3 ASX 200 stocks I’ll be watching like a hawk in May appeared first on The Motley Fool Australia.

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More reading

• Should I buy Westpac shares ahead of next week’s half-year results?
• What’s happening with ASX 200 banks today as First Republic teeters on the brink of collapse?
• Investing in ASX 200 shares? Here’s what to expect from the RBA tomorrow
• Why Aeris, Brainchip, Pointsbet, and Syrah shares are falling today
• Why did the BrainChip share price crash 16% today?

Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended REA Group and Westpac Banking Corporation. 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 some ASX dividend shares to buy for your income portfolio? If you are, then the two listed below could be worth considering.

Both have been named as buys and tipped to provide investors with good yields. Here’s what you need to know about them:

HomeCo Daily Needs REIT (ASX: HDN)

The first ASX dividend share that has been named as a buy is HomeCo Daily Needs.

As its name implies, this is a property company with a focus on properties that serve daily needs. These are convenience-based assets found in metro locations such as large format retail and health and services.

Morgans is very positive on the company. This is due to its exposure to daily needs assets and “large development pipeline.”

The broker also expects some very big dividend yields in the near term. It is forecasting dividends per share of 8.3 cents in FY 2023 and 8.4 cents in FY 2024. Based on the current HomeCo Daily Needs share price of $1.18, this will mean dividend yields of 7% and 7.1%, respectively.

Morgans has an add rating and $1.50 price target on HomeCo Daily Needs’ shares.

National Australia Bank Ltd (ASX: NAB)

Another ASX dividend share that has been named as a buy is NAB. It is of course one of Australia’s big four banks.

Goldman Sachs is positive on the bank and has named it one of only two to buy right now. This is due largely to the bank’s exposure to commercial lending, which it believes will fare better than home lending in the near term and its belief that NAB “provides the best exposure to this thematic.”

In respect to dividends, Goldman is expecting this to support fully franked dividends of $1.68 per share both FY 2023 and FY 2024. Based on the current NAB share price of $29.09, this implies yields of 5.8% for income investors.

Goldman Sachs has a buy rating and $33.06 price target on its shares.

The post Buy NAB and this ASX dividend share: analysts appeared first on The Motley Fool Australia.

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More reading

• What’s happening with ASX 200 banks today as First Republic teeters on the brink of collapse?
• Investing in ASX 200 shares? Here’s what to expect from the RBA tomorrow
• Why did the NAB share price smash the ASX 200 in April?
• Analysts say these ASX 200 dividend stocks are top buys
• Should I buy NAB shares ahead of next week’s half-year results?

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.

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TPG Telecom Ltd (ASX: TPG) landed on the ASX in July 2020 as a result of the merger between Vodafone Australia and TPG. 

The combined business instantly became the third-largest telecommunications provider in Australia.

So after three years of public trading, are TPG shares now worth buying into?

Why TPG shares could be a good buy

By Tristan Harrison: The TPG share price has been on a solid run over the past month, rising by around 10%. That compares favourably to the S&P/ASX 200 Index (ASX: XJO) which has only gone up by 1%. I think its total returns can keep outperforming over the next few years.

The ASX telco share has steadily grown its dividend each year since it was listed a few years ago and is expected (according to Commsec numbers) to keep growing the dividend to FY25. That FY25 payment could be 21 cents per share, which would be a grossed-up dividend yield of 5.5%. 

The earnings per share (EPS) is also predicted to increase in FY24 and FY25, which could be a positive factor for the TPG share price.

A lot of the smaller competitors have been acquired, or merged, with the larger players in recent years. This may be why Telstra Corporation Ltd (ASX: TLS) is willing to increase prices significantly. If rivals are increasing prices, TPG may be able to attract customers with better value. Or TPG could keep increasing prices to improve its profit margins. 

TPG is seeing an increase in subscribers, gaining 300,000 subscribers in the 2023 financial year. It’s also working on reducing costs as part of the synergies between the merger of TPG and Vodafone Australia.

While it may not be the strongest performer in the next 12 months, I think it can beat the returns of the ASX 200 thanks to its growing subscribers and defensive earnings. 

Motley Fool contributor Tristan Harrison does not own shares in TPG Telecom Ltd.

Heading down while rivals are heading up

By Tony Yoo: TPG Telecom shares have, unfortunately, been nothing but a disappointment since they listed on the ASX.

The stock price is down more than 36% since its first-day closing price, even though industry conditions have become more favourable.

The telco sector has consolidated over the past few years, meaning the days of loss-leading sales are largely over. Many of the smaller players have been bought out by the bigger fish, such as when Optus acquired Amaysim.

The merger between Vodafone and TPG itself was part of this trend.

Don’t get me wrong – mobile phone and broadband retailing are still very commoditised. The services are almost a utility these days, similar to water and electricity.

But it’s a far more rational market now than it was a few years ago, when telcos went broke to sign up customers.

TPG Telecom, however, has failed to take advantage of the better business environment, losing market cap while the Telstra share price has rocketed more than 30%.

Speaking of Telstra, investors must take note that the telco industry is one that is capital-intensive.

This places smaller players at a more pronounced disadvantage than other sectors. Telstra and Optus simply have deeper pockets than TPG to invest in and maintain infrastructure.

Finally, the man who founded TPG and grew it from a small computer shop to a telco giant, David Teoh, exited the merged entity in 2021. An executive with that type of growth experience is not easy to replace, and the company is no longer a “founder-led business”.

Hence I would not buy TPG shares right now.

Motley Fool contributor Tony Yoo does not own shares in TPG Telecom Ltd.

The post TPG shares showdown: To buy, or not to buy? appeared first on The Motley Fool Australia.

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More reading

• Buy NAB and this ASX dividend share: analysts
• 79% upside: The ‘frustrating’ ASX share waiting to take off
• What’s the forecast for the lithium price in May?
• Should I buy Westpac shares ahead of next week’s half-year results?
• Get rich slowly! The 3 keys to building wealth with ASX shares

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 Telstra Group. The Motley Fool Australia has recommended 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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The efficient market hypothesis says share prices always reflect all available information about the businesses.

However, veteran ASX investors would know that in reality that’s not necessarily true.

Sometimes the market just fails to fully appreciate the merits or the cons of a company and the stock becomes under- or overpriced.

Shrewd investors can take advantage of this “inefficiency”, assuming that eventually the rest of the market wakes up and the stock price will “catch up”.

‘A lot more value’ in business than the current valuation

One such candidate is diagnostic imaging provider ​​Capitol Health Ltd (ASX: CAJ).

The share price has fallen almost 17% over the past 12 months, and is actually trading at 21% below what it was in the middle of 2018.

However, Sequoia Wealth senior wealth manager Peter Day noted last month that Capitol Health reported pleasing results.

“First half 2023 revenue of $98.1 million was up 3.4% on the prior corresponding period,” said Day.

“In the near term, we forecast a recovery in face-to-face general practitioner consultations as a catalyst for improving imaging volumes.”

Shaw and Partners portfolio manager James Gerrish acknowledged that life as a Capitol Health investor hasn’t been easy.

“I know Capitol Health has been a frustrating position,” he said on a Market Matters Q&A.

“However, we do think there is a lot more value in their business than is being ascribed by the market, something more like 45, 50 cents.”

Compared to the Tuesday trading price of 28 cents, a rise to 50 cents would represent a whopping 78.5% upside.

“For that reason, we are remaining patient — pardon the pun!”

The stock pays out a dividend yield of 3.64%, which could soothe the pain while you wait for the share price to climb.

Day also thinks the stock is a prudent buy.

“We believe Capitol Health is well positioned relative to peers given strong specialist recruitment and exposure to recovery locations in Victoria.”

The post 79% upside: The ‘frustrating’ ASX share waiting to take off appeared first on The Motley Fool Australia.

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More reading

• 2 ASX shares to buy that no one talks about

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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The lithium price has declined from the glory days of 2022, but could it recover in the future?

ASX shares impacted by the price of lithium include Pilbara Minerals Ltd (ASX: PLS), Core Lithium Ltd (ASX: CXO), Allkem Ltd (ASX: AKE), and Lake Resources (ASX: LKE).

Let’s check the outlook for the lithium price.

What could happen?

Lithium prices are in the spotlight again amid Chile’s plan to nationalise its lithium industry. This could certainly impact lithium supply globally.

China-based research company Antaike is forecasting lithium carbonate prices to average 220,000 yuan (US$33,828) a tonne this year. That’s 54% less than 2022, Asia Financial reported. However, this is still higher than the current lithium carbonate price.

Battery-grade lithium carbonate is currently up 0.81% to US$27,065.28 a tonne on the Shanghai Metals market.

Commenting on the outlook for the lithium price, CRU head of battery rare materials Martin Jackson said:

Demand was showing softness early in the year, but we’re still expecting a relatively tight market for the year on average and that’s because of much stronger demand from EV sales later in the year.

Meanwhile, ANZ commodity strategists Daniel Hynes and Soni Kumari are optimistic about the lithium price amid supply risks from resource nationalism. The strategists highlighted lithium prices are down nearly 75% from a recent record high.

Hynes and Kumari noted Chile’s policy will require state involvement for “all new lithium projects” and the use of environmentally friendly processing that is “still unproven on a commercial scale”. In a research report released Thursday, they added:

This could delay the delivery of its pipeline of projects. Other producers also have their issues. Increasing resource nationalism, particularly in Africa could limit growth in supply.

The outlook for the EV sector remains strong. We expect these latest supply side issues to reignite supply concerns, leading to a rebound in prices.

Share price snapshot

It’s been a mixed bag for the ASX’s major lithium shares. Pilbara shares have returned 54% in the last year.

Core Lithium shares have lost 28% in the past 52 weeks.

Allkem shares have shed 2% in the past year.

Meanwhile, Lake Resources shares have descended 74% in the last 12 months.

The post What’s the forecast for the lithium price in May? appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• 7 reasons why Core Lithium says you should buy its shares
• Short sellers reveal 4 ways to spot dud ASX shares
• 2 ASX 200 mining shares to buy for big dividends: analysts

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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Westpac Banking Corp (ASX: WBC) shares have had a tough time over the last 12 months.

During this time, the banking giant’s shares have lost 6.5% of their value, as you can see on the chart below.

In light of this weakness, some investors may be tempted to pick up Westpac shares before it releases its results next week. But should they wait?

Should you buy Westpac shares ahead of its results?

Buying shares before they release their results is a risky move. A strong result could see a share rocket higher, but a weak result could see the opposite happen.

In light of this, it may make sense to buy a share in two stages. Half before the results and half after the release. This limits your downside if things go awry and also allows you to benefit from any gains if things go well.

But is Westpac a buy? Well, it is according to Goldman Sachs. It is expecting a strong result from Australia’s oldest bank and is recommending investors snap up its shares.

Goldman recently reiterated its conviction buy rating and $25.86 price target on the bank’s shares. Based on the current Westpac share price of $22.55, this implies potential upside of 15% for investors over the next 12 months.

And with the broker forecasting a $1.44 per share fully franked dividend in FY 2023, which represents a 6.5% yield, the total potential return on offer here is approximately 21%.

What is Goldman expecting from the half-year result?

If you are planning to buy Westpac shares, you will no doubt want to keep an eye on its results.

Goldman Sachs is expecting Westpac to report cash earnings (before one-offs) of $3,781 million, which is just a touch short of the consensus estimate of $3,788 million. It also represents a sizeable 22.2% increase on the prior corresponding period.

This is expected to be supported by a net interest margin of 2.03% and underpin a fully franked interim dividend of 72 cents per share. The latter will be an 18% increase from FY 2022’s interim dividend of 61 cents per share.

The post Should I buy Westpac shares ahead of next week’s half-year results? appeared first on The Motley Fool Australia.

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More reading

• What’s happening with ASX 200 banks today as First Republic teeters on the brink of collapse?
• Investing in ASX 200 shares? Here’s what to expect from the RBA tomorrow
• Don’t get duped: Why cheap ASX shares can still rip you off
• Which is the best ASX 200 bank share to buy right now?
• First Republic Bank shares just crashed 50%. Here’s how ASX 200 bank stocks are responding

Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Westpac Banking Corporation. 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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Everyone, or at least everyone reading The Motley Fool, wants to achieve financial freedom.

But investing isn’t easy. Otherwise everyone would be rich!

Although the biggest headlines are for stories of people who strike gold overnight, the reality is that most of the truly wealthy built up their assets over a long period of time.

So how does one do this?

Don’t try to time the market

Timing the market is fraught with danger because no one knows what will happen later today, let alone tomorrow, next week, or next year.

If you sell too many shares then you risk holding useless cash when the market recovers from a dip. That’s when the most money is made.

A remarkable table from Betashares earlier this year showed how the 20 biggest single-day rallies on the ASX since 1 June 1992 all occurred in the aftermath of horrible market crashes.

“The more of those big rallies that you miss out on, the lower your gains over the long term,” said Betashares executive Annabelle Dickson.

“An overwhelming body of research finds that [a] passive buy-and-hold, long-term approach to owning shares produces better long-term results.”

Pick quality, rather than risky stocks

We’ve all heard the stories at the BBQ about acquaintances that watched their stock become a 10-bagger over just two years.

That’s fantastic, but ASX shares that do that are usually risky propositions before they have grown 10-fold. 

For every one of those that returned 1,000%, there will be a whole bunch of similar ones that burned a hole in their investors’ pockets.

Becoming wealthy slowly involves buying stocks that might not explode or crash like that but will more reliably produce smaller annual returns.

Those stocks more often represent larger, more mature companies that already have a decent customer base.

And over time, a string of years with positive returns will see your asset grow handsomely.

Save and invest often

Adding to the portfolio, unsurprisingly, is an excellent way of building wealth in the long run.

There are two ways of achieving this: saving a portion of your regular income to put towards investing, and ploughing any dividends back into shares.

Earlier this year, stock expert Brian Feroldi revealed how an investor’s saving rate is far more important than a high income or investment returns.

Sure, having a high income makes it easier to put some aside for investing, but it in itself doesn’t make you wealthy.

“Just ask some of the highly-paid celebrities and athletes who [end] up filing for bankruptcy protection — Mike Tyson, Nicholas Cage, Lindsay Lohan,” he said.

High investment returns are also lovely. But if you haven’t saved enough to invest then you won’t be able to get any returns — let alone big ones.

“This is why your savings rate is so important. It’s the small input that can [reliably] predict your ability to become wealthy.”

The post Get rich slowly! The 3 keys to building wealth with ASX shares appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• ASX 200 plunges as RBA surprises investors with another interest rate boost
• Qantas share price falls on CEO succession news

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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The world is a scary place at the moment.

The Reserve Bank of Australia this week raised interest rates yet again, adding tens of thousands of dollars to the annual burden for home loan holders.

Inflation continues to rage, taking the cost of living through the roof.

The war in Ukraine continues, causing bottlenecks in the energy market.

Who knows if Australia or other developed economies might fall into recession. At the very least, consumers and businesses will suffer greatly.

Is this all too much?

In times like these, it could be worth your sanity to buy some “safe” ASX dividend stocks so that you can switch off the news.

So what are the ASX shares that you could lock away, then come back three years later to see how well they have grown?

Here are two suggestions:

Big but not immobile

Although the mining sector is notoriously cyclical, BHP Group Ltd (ASX: BHP) has managed to smooth out the fluctuations admirably.

Over the past five years, the share price has climbed 38.6%, with it only dipping below the starting point during the COVID-19 crash of March 2020.

This is all while paying out a chunky dividend yield of 8.8%.

The Big Australian has recently shown a willingness to adapt to a changing global environment.

In 2021, it sold off its oil and gas business to Woodside Energy Group Ltd (ASX: WDS). At the same time, BHP flagged its intention to focus on minerals that are critical to the global transition to zero carbon emissions.

This year it completed a takeover of major copper producer Oz Minerals, which will cash in from demand for the mineral in electronics and batteries.

With China ramping up its economy after three years of harsh COVID-19 lockdowns, BHP could continue to enjoy robust demand for its products.

BHP shares closed Tuesday at $43.63 apiece.

Morgans, Goldman Sachs, and Macquarie analysts all have price targets in excess of $50 for the mining giant.

Dividend increased every year for 23 years

Washington H Soul Pattinson and Co Ltd (ASX: SOL), at 2.5%, doesn’t have a stunning dividend yield to speak of.

But its adaptability and track record of increasing dividends makes it an attractive proposition.

In fact, the market has recognised this, with the share price recently hitting 52-week highs.

As an investment company, Soul Pattinson can switch up its investments to whatever looks attractive at any given time. More than once, experts have described the business as Australia’s answer to Warren Buffet’s company Berkshire Hathaway Inc (NYSE: BRK.A).

Impressively, Soul Pattinson has hiked its dividends each year since the year 2000. That’s through the dot-com crash, the global financial crisis, and the COVID-19 pandemic.

Shaw and Partners portfolio manager James Gerrish is one expert who would still buy Soul Pattinson at current levels due to its 37% ownership of New Hope Corporation Limited (ASX: NHC).

“We would be accumulating Soul Pattinson now if we were looking for some additional quasi-coal exposure.”

The post Worried about the market? 2 ASX dividend stocks that could help you sleep at night appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 energy shares to fall after oil prices collapse
• Worried about a recession? Here’s why these investors are backing Warren Buffett
• Dalio says US and China ‘on brink of war’. Which ASX shares could be impacted?
• How I’d invest $1,000 in May to make easy passive income

Motley Fool contributor Tony Yoo has positions in Macquarie 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 Berkshire Hathaway, Goldman Sachs Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Macquarie Group and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Berkshire Hathaway. 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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