Today is a good day to own BHP Group Ltd (ASX: BHP) shares for a couple of reasons.

The first reason is that the mining giant’s shares are on course to end the shortened week in a positive fashion.

At the time of writing, the Big Australian’s shares are up almost 2% to $44.48.

This follows a strong showing for BHP’s US listed shares on the New York Stock Exchange despite a pullback in iron ore prices.

Why else is it a great day to own BHP shares?

The other reason it is a great day to have BHP shares in your portfolio is that today is pay day for shareholders.

Last month, BHP released its half-year results and reported a 6% increase in revenue to US$27.2 billion and flat underlying earnings of US$6.6 billion for the half.

This allowed the miner to declare an interim dividend of 72 US cents (A$1.10) per share, which represents a total payout of US$3.6 billion and a payout ratio of 56%.

Today is the day that the Big Australian is paying eligible shareholders this dividend, much to their delight.

Especially given that at yesterday’s close price, this interim dividend equates to a very attractive 2.5% dividend yield.

What’s next for the BHP dividend?

According to a note out of Goldman Sachs, its analysts expect a similar dividend to be paid for the second half of FY 2024.

The broker has pencilled in a fully franked final dividend of 73 US cents (111.7 Australian cents) per share. This will mean another 2.5% dividend yield for shareholders.

Looking further ahead, Goldman expects the BHP dividend to come in at US$1.28 (A$1.96) per share in FY 2025 and US$1.25 (A$1.91) per share in FY 2026. Based on where BHP shares currently trade, this will mean yields of 4.5% and 4.4%, respectively.

The post Why it’s a great day to own BHP shares appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Thursday
• Down 14% in 2024, why is the BHP share price sliding again today?
• $19 billion in ASX dividends is being paid out this week. Are you getting your share?
• Shares vs. property: How to generate $500 passive income per month
• Here’s how the ASX 200 market sectors stacked up last week

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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I think ASX tech shares can be very exciting investments because of their ability to expand quickly and generate strong margins.

The nature of software usually means it’s very cheap and very quick to sign up a new client or subscriber – the company doesn’t need to wait for more cars or tables to be manufactured.

Being able to replicate new software for a very low cost is exciting because additional revenue can come with a high gross profit margin and add a lot to the company’s cash flow and earnings before interest, tax, depreciation and amortisation (EBITDA) profit margins.

With that in mind, there are three ASX tech shares I want to talk about.

TechnologyOne Ltd (ASX: TNE)

TechnologyOne describes itself as Australia’s largest enterprise software company, with locations globally. It provides global software as a service (SaaS) enterprise resource planning (ERP) solution which is available on any device, anywhere, any time and is “incredibly easy to use).

It has more than 1,200 corporations, government agencies, local councils and universities using its software. The business continues to win new clients, boosting its scale.

One of the most pleasing elements of the business is that existing clients continue to pay more for the software as the company invests more in the software offering.

In FY23 the business grew its profit before tax by 15%, cash flow generation rose 36% to $104.6 million and the board increased the dividend per share by 15%.

It’s making strong progress in the UK, which is a bigger market than Australia. UK annual recurring revenue (ARR) increased by 52% to $26.5 million, which is a very strong increase.

The company is expecting to double in size in five years, which is an impressive compounding rate.

Airtasker Ltd (ASX: ART)

Airtasker offers a platform that enables people who need work to connect with people and businesses willing to do that work. Examples of tasks include removalists, furniture assembly, photography, food delivery and many other categories.

The company has a gross profit margin of more than 90%, so the more volume it can generate the better its operating profit margins will be.

The ASX tech share has made great progress in its profitability. In the recent FY24 first-half result, it reported positive free cash flow of $0.1 million, an improvement of $4.7 million. The company also achieved positive EBITDA of $2 million, which represented growth of $7.1 million.

Reaching breakeven, and positive profitability, can be an important milestone for ASX tech shares because profit can jump higher in subsequent years if revenue keeps growing.

Despite the challenging economic conditions amid inflation and high interest rates, the company reported that Airtasker marketplaces revenue increased 10.3% to $18.9 million

It has a small presence in the UK and an even smaller position in the US. While the international segment of the business is currently small, it’s growing quickly – in HY24 international revenue jumped 35.3% to $0.6 million.

If Airtasker can keep growing its revenue and the number of tasks posted over the long term then I think it has a very promising future.

Siteminder Ltd (ASX: SDR)

Siteminder provides software that can help hotels unlock their full revenue potential. It also has Little Hotelier, an all-in-one hotel management software offering for small accommodation providers. It generates more than 115 million reservations worth over $70 billion in revenue for hotel customers.

The ASX tech share is benefiting from the ongoing digitalisation of transactions, how people book accommodation and a growing market share. In the HY24 result, Siteminder saw total revenue growth of 27.9% to $91.7 million, with subscription revenue rising 18.5% and transaction revenue growing 30.5%.   

Siteminder saw its cash flow, underlying EBITDA and statutory net loss all make strong progress towards breakeven, with margins significantly improving. I think it has a promising future if revenue keeps climbing at a double-digit pace.

The post 3 of the best ASX tech shares to buy and hold until 2030 appeared first on The Motley Fool Australia.

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More reading

• Bell Potter names 2 exciting ASX tech shares to buy now
• Here’s why analysts love these buy-rated ASX 200 growth shares
• Why these ASX 200 growth shares could be top buys now
• Why Bannerman Energy, Cettire, TechnologyOne, and Zip shares are charging higher
• Guess which ASX 200 tech stock has just been upgraded

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 SiteMinder and Technology One. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Airtasker. The Motley Fool Australia has positions in and has recommended SiteMinder. The Motley Fool Australia has recommended Technology One. 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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Owners of Commonwealth Bank of Australia (ASX: CBA) shares may feel a little richer today because the dividend is headed your way.

CBA likes to send dividend payments to shareholders every six months, and this latest payout is the FY24 interim dividend for the six months to 31 December 2023.

Dividend details

For investors that didn’t know, in the FY24 first-half result the CBA board of directors decided to declare a half-year payout of $2.15 per share. If someone owned 50 CBA shares, they would receive a fully franked payment of $107.50.

This payout was 2% bigger than last year’s payment per share. It represents a dividend payout ratio of 72% of cash net profit after tax (NPAT). As a reminder, CBA’s dividend policy is to target a full-year payout ratio of between 70% to 80% of cash NPAT. The payout ratio has been climbing since the worst of the COVID-19 pandemic – it was 68% of the first half of FY23 NPAT and 62% of HY22’s NPAT.

The bank also said it was to maximise the use of its franking account by paying fully franked dividends and “sector leading cash dividends at sustainable levels”.

The ASX bank share said it was expecting the dividend reinvestment plan (DRP) to be satisfied through the on-market purchase of shares.

CBA’s balance sheet is in a strong position to be able to fund this dividend. Its common equity tier 1 (CET1) ratio was 12.3% at December 2023, up from 11.7% at December 2019 (pre-COVID).

Dividend reinvestment plan price

For investors that did take up the DRP, the DRP price is $117.19. This was calculated as the average of the daily volume weighted average market price of all CBA shares sold on the ASX during the 20 trading days between 26 February 2024 and 22 March 2024, with no discount.

The bank revealed that participation in the 2024 interim dividend was approximately 13.4% of CBA shares on issue.  

CBA share price snapshot and payout projection

Over the last six months, the CBA share price has risen around 20%.

According to the (third party) projections on Commsec, the bank is expected to pay an annual dividend per share of $4.55 in both FY24 and FY25, which translates into a forward grossed-up dividend yield of 5.4%.

The dividend is then predicted to rise by 1.3% to $4.61 per share in FY26, which would be a grossed-up dividend yield of 5.5%.

The post Own CBA shares? It’s payday for you! appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Thursday
• Are CBA shares really worth $120?
• $19 billion in ASX dividends is being paid out this week. Are you getting your share?
• These 5 high-quality companies are now paying a better income than CBA shares
• Own CBA shares? Here’s the tech stock the banking giant just invested in

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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Telstra Group Ltd (ASX: TLS) stock has been a rather disappointing investment in recent months at first glance.

At the current stock price of $3.78, Telstra is down 4.66% year to date and down 10.1% over the past 12 months.

This ASX 200 telco and blue-chip share even hit a new 52-week low of $3.73 this week.

The company is also down close to 14% from its last 52-week high of $4.46 that we saw last May.

Check all of that out for yourself below:

Telstra stock has been a constant presence on the ASX for decades and is one of the most widely-held ASX 200 shares. As such, there are no doubt more than a few investors out there who have been left disappointed with this recent performance.

That’s despite more recent wins for investors. In February, Telstra announced its third hike for its interim dividend in a row. Telstra will be paying out its interim dividend of 9 cents per share (fully franked of course) today, as it happens. That’s up from 8.5 cents this time last year and 8 cents in 2022.

Despite these hikes, investors still don’t seem placated.

So it might be a good time to ask whether Telstra stock is a buy, hold or sell today.

Telstra stock: Buy, hold or sell?

Well, more than one ASX expert seems united on this one.

Last week, my Fool colleague James looked at the buy rating that ASX broker Goldman Sachs has given Telstra. Goldman named the telco as a ‘buy’, and gave Telstra shares a 12-month share price target of $4.55. That would obviously result in some huge gains for investors if realised.

Goldman named Telstra’s “low risk earnings (and dividend) growth… underpinned through its mobile business” as the primary reason behind its bullish outlook. It has also pencilled in further dividend pay rises every financial year until FY2026.

But Goldman isn’t the only Telstra bull out there right now. Earlier this month, we also took stock of what another ASX broker in Bell Potter thinks about Telstra shares.

Bell Potter stated that Telstra stock is “starting to look reasonable value”, and as such, upgraded the telco from a hold to a buy. That came alongside a share price target of $4.25.

This broker is also expecting rising dividends from Telstra over the next few years.

So that’s what a pair of ASX experts think about Telstra stock today. No doubt shareholders won’t be complaining about these assessments. But, as always, we’ll have to wait and see who’s on the money.

The post Is Telstra stock a buy, sell, or hold? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Thursday
• Almost ready to retire? I’d buy cheap ASX dividend shares for income
• Qantas or Telstra share price: Which will climb higher in 2024?
• $19 billion in ASX dividends is being paid out this week. Are you getting your share?
• Why Telstra and these ASX 300 stocks just hit 52-week lows

Motley Fool contributor Sebastian Bowen has positions in Telstra Group. 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 positions in and has recommended Telstra 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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With the ASX 200 index likely to hit a record high on Thursday, you would be forgiven to think that there are no bargain ASX 200 stocks currently trading on the bourse.

However, that may not be the case according to analysts at Goldman Sachs.

The broker has identified one ASX 200 stock that could be well and truly in the bargain bin right now and have major upside potential.

That stock is Australia’s flag carrier airline Qantas Airways Limited (ASX: QAN).

Is Qantas a bargain ASX 200 stock?

As with most airlines, Qantas had an incredibly tough time during the pandemic.

But it certainly didn’t waste the crisis. It worked hard to cut costs materially and make its operations leaner and more profitable.

So much so, the company was able to deliver a huge profit in FY 2023 and then followed this up with another bumper profit during the first half of FY 2024.

However, despite this structurally improved profitability, Qantas shares are still trading on a lower valuation than pre-COVID times.

This hasn’t gone unnoticed by analysts at Goldman Sachs, who believe the market is seriously undervaluing this ASX 200 stock, potentially making it a real bargain at current levels. The broker recently commented:

Notwithstanding a decline in unit revenues (and group capacity still at 95% of pre-COVID) our estimated FY24e EPS sits 52% above pre-COVID levels. Despite this, QAN’s market capitalisation and EV is 17% and 24% lower than pre-COVID levels. We acknowledge broader macro uncertainty at this point in the cycle, but believe the current share price does not reflect the group’s improved earnings capacity.

Big returns to come?

Goldman currently has a buy rating and $8.05 price target on Qantas shares.

Based on its current share price of $5.41, this implies potential upside of almost 50% for investors.

The broker concludes:

[W]e believe QAN is not priced for a generic recovery, let alone prospects for improved earnings capacity. We continue to see upside associated with substantially improved MT earnings capacity.

The post Is Qantas a bargain ASX 200 stock today? appeared first on The Motley Fool Australia.

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• Where to invest $8,000 in April 2024
• Qantas or Telstra share price: Which will climb higher in 2024?
• A ‘once in a lifetime’ opportunity for Qantas shares?
• Buy these ASX 200 blue chip shares for big returns
• $2.1 million! Who are the highest paid ASX 200 directors?

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 not keen on stock picking but want to build an income portfolio, then ASX exchange-traded funds (ETFs) could be the answer.

Instead of having to pick individual stocks to buy, ETFs allow investors to snap up large groups of income shares in one fell swoop.

This can provide near instant diversification for a portfolio, reducing risk and removing the stress of deciding which shares to buy.

But which ASX ETFs would be good for income? Two quality options to consider buying are listed below:

BetaShares S&P 500 Yield Maximiser (ASX: UMAX)

The BetaShares S&P 500 Yield Maximiser could be worth a closer look.

This income ETF has been designed to squeeze out as much income as possible from the top 500 companies listed on Wall Street. This includes giants such as Apple, Johnson & Johnson, Microsoft, and Walmart.

It does this through a covered call strategy, which aims to earn quarterly income that is significantly greater than the dividend yield of the underlying share portfolio over the medium term.

At the last count, its units were trading with a 12-month trailing 4.8% distribution yield.

Vanguard Australian Shares Index ETF (ASX: VHY)

Another ASX ETF for income investors to consider buying is the Vanguard Australian Shares High Yield ETF.

This popular fund offers investors low-cost exposure to a group of 72 ASX shares that have higher forecast dividends relative to the market average (based on broker research).

But don’t worry, you won’t just be buying miners and banks such as BHP Group Ltd (ASX: BHP) and Commonwealth Bank of Australia (ASX: CBA). The Vanguard Australian Shares Index ETF restricts the proportion invested in any one industry to 40% and 10% for any one company.

This ensures that investors have a nicely balanced group of holdings and aren’t overexposed to any one side of the market. In addition, Australian Real Estate Investment Trusts are excluded from the index, which means there’s no material exposure to the property market.

The ETF currently trades with a trailing dividend yield of 5.2%.

The post Why these ASX income ETFs could be top options appeared first on The Motley Fool Australia.

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• Here are the next distribution dates for your Vanguard ETFs
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• Buy these ASX ETFs for a second income
• Buy these ASX ETFs for easy passive income

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 Apple, Microsoft, and Walmart. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Johnson & Johnson and has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has positions in and has recommended BetaShares S&P 500 Yield Maximiser Fund. The Motley Fool Australia has recommended Apple and Vanguard Australian Shares High Yield ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Woolworths Group Ltd (ASX: WOW) is a solid business, but it’s not my top pick in the food industry. Instead, I went for the S&P/ASX 200 Index (ASX: XJO) stock Metcash Ltd (ASX: MTS).

I’m not saying that Metcash’s food operations are stronger or that it has a better growth outlook than Woolworths. But, the overall Metcash company seems more compelling to me.

Three pillars

There are three main segments to the Metcash business – food, liquor and hardware.

The food business is best known for supplying over 1,600 independent stores across Australia, with IGA and Foodland supermarkets being two of the main customers.

The ASX 200 stock is the largest supplier of liquor to independently owned liquor retailers. It supplies Cellarbrations, The Bottle-O, IGA Liquor, Porters Liquor, Thirsty Camel, Big Bargain Bottleshop and Duncans.

Metcash’s third pillar is hardware. It owns a number of brands and businesses including Mitre 10, Home Timber & Hardware and Total Tools. It supports independent operators under the small format convenience banners Thrifty-Link Hardware and True Value Hardware, as well as a number of unbannered independent operators.

Acquisitions

A few weeks ago, the company announced it had entered into binding agreements for some acquisitions.

One of the businesses it’s buying is Superior Food, a leading Australian foodservice distribution business, which it described as a logical extension of the food strategy, partly because it can benefit from and enhance Metcash’s core food wholesale and distribution capabilities. Foodservice is described as a large and growing market.

The second acquisition was Bianco Construction Supplies, a construction and industrial supplies business servicing South Australia and the Northern Territory.

Thirdly, it said it was going to buy Alpine Truss, one of the largest frame and truss operators in Australia.

Metcash is expecting to achieve annualised synergies of around $19 million and add to Metcash’s margins.

Why I decided to invest in the ASX 200 stock

There are three main things that attracted me to Metcash.

First, the strength and profitability of its hardware business are impressive in my opinion. When interest rates start coming down and the outlook for the economy improves, I think the profitability of the business can grow. The inclusion of Bianco and Alpine Truss is a useful boost for the ASX 200 stock as well.

Second, it has a much lower price/earnings (P/E) ratio than other ASX shares. According to Commsec, Metcash shares are valued at 14 times FY24’s estimated earnings and 13 times FY25’s estimated earnings. In comparison, Woolworths shares are valued at 23 times FY24’s estimated earnings and Wesfarmers Ltd (ASX: WES) – owner of Bunnings – is priced at 30 times FY24’s estimated earnings.

I think Metcash is priced attractively for its hardware’s growth outlook for the long term. Third, the dividend yield is appealing. Metcash targets a dividend payout ratio of 70% of underlying net profit after tax (NPAT). The FY24 grossed-up dividend yield is projected to be 7.3%.

The post Why I bought this ASX 200 stock instead of Woolworths appeared first on The Motley Fool Australia.

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• Dividend yields up to 8%! Which of these cheap ASX 300 shares should I buy?
• Top ASX shares to buy instead of a term deposit in March 2024
• Where I’d invest $30,000 in ASX shares for passive income
• Metcash share price hits 52-week high on broker upgrade: Time to buy?
• Metcash shares push higher on trading update

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

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If you’re an income investor looking for dividend shares to buy for your portfolio, then you may want to read on.

That’s because named below are two top ASX dividend shares that brokers are recommending as buys.

Here’s what you need to know about these income options:

ANZ Group Holdings Ltd (ASX: ANZ)

The team at Ord Minnett thinks this banking giant could be an ASX dividend share to buy despite its strong run in recent months.

The broker is feeling positive on the bank partly due to its proposed acquisition of Suncorp Bank. It notes that the deal is nearing completion after the Australian Competition Tribunal overturned the ACCC’s decision to block it. Ord Minnett believes the acquisition will add scale to areas where ANZ currently trails the other big four banks.

Ord Minnett currently has an accumulate rating and $31.00 price target on its shares.

As for dividends, the broker is forecasting fully franked dividends per share of $1.62 in FY 2024 and $1.65 in FY 2025. Based on the current ANZ share price of $29.26, this will mean dividend yields of 5.5% and 5.6%, respectively.

Dexus Convenience Retail REIT (ASX: DXC)

Another ASX dividend stock that could be a buy for income investors is Dexus Convenience Retail REIT.

The team at Bell Potter thinks the convenience retail and service station property company could be a good option right now.

Its analysts note that “DXC trades at a circa 34% discount to stated NTA which we think is overly punitive for a sub-sector where there is clear price discovery, and investors for commercial real estate have a clear preference for smaller cheque size assets.”

Bell Potter has a buy rating and $3.00 price target on its shares.

In respect to income, the broker is forecasting dividends per share of 20.9 cents in FY 2024 and 20.7 cents in FY 2025. Based on its current share price of $2.73, this equates to yields of 7.7% and 7.6%, respectively.

The post Buy ANZ and this ASX dividend share now appeared first on The Motley Fool Australia.

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More reading

• Shares vs. property: How to generate $500 passive income per month
• These 5 high-quality companies are now paying a better income than CBA shares
• ANZ shares charge higher on $57.5 million class action settlement news
• Analysts say these excellent ASX income shares are buys
• Here’s the ANZ dividend forecast through to 2026

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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On Wednesday, the S&P/ASX 200 Index (ASX: XJO) was back on form and pushed higher. The benchmark index rose 0.5% to 7,819.6 points.

Will the market be able to build on this on Thursday? Here are five things to watch:

ASX 200 expected to storm higher

The Australian share market looks set for a very positive session on Thursday following a great night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 41 points or 0.5% higher this morning. In late trade on Wall Street, the Dow Jones is up 0.1%, the S&P 500 has risen 0.45%, and the Nasdaq is 0.6% higher.

Oil prices flat

ASX 200 energy shares such as Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) could have a subdued session after oil prices traded flat overnight. According to Bloomberg, the WTI crude oil price is steady at US$81.59 a barrel and the Brent crude oil price is flat at US$86.24 a barrel. A rise in US crude stockpiles held back oil prices.

Dividend payday

Today is a big day for dividends with billions of dollars being paid out to Aussie investors. Among the many ASX 200 shares paying their latest dividends today are giants BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), and Telstra Group Ltd (ASX: TLS).

Gold price rises

It could be a good session for ASX 200 gold shares Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) after the gold price rose overnight. According to CNBC, the spot gold price is up 0.55% to US$2,211.6 an ounce. Traders were optimistically buying gold ahead of the release of US inflation data.

Westpac rated as neutral

The Westpac Banking Corp (ASX: WBC) share price is fully valued according to analysts at Goldman Sachs. This morning, the broker has responded to the bank’s technology simplification update by retaining its neutral rating with a slightly trimmed price target of $23.41. Goldman said: “WBC’s technology simplification plan has been a long time coming, and we believe it does, over time, have the potential to materially improve WBC’s relative productivity positioning.”

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

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More reading

• Invest $12,000 in Woodside stock and get $5,700 in passive income
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Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation and Woodside Energy Group. 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 positions in and has recommended Telstra 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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I recently decided to sell half of my Temple & Webster Group Ltd (ASX: TPW) stock, yet I’m still optimistic about its outlook and growth potential.

This e-commerce ASX share has delivered big gains for shareholders – it’s up more than 740% in the past five years and it has climbed over 280% in the past year.

Why I sold Temple & Webster shares

I was fortunate enough to invest at the end of October 2023. Since then the Temple & Webster share price soared more than 120% – I wasn’t expecting to make that much that quickly.

In my opinion, no business is a buy at any price.

Temple & Webster is doing a lot of good things to grow its underlying value, but the size of the gain made me want to take some profit off the table.

I decided to sell half, rather than all my holding, because I still want exposure to the company. By selling half, I’d have recovered (more than) my initial investment and what’s left is pure profit.

What I still like about the ASX share

The business is growing revenue at an impressive rate, which is one of the driving factors of the rising Temple & Webster stock price, and what attracted me to the business.

Revenue rose by 23% to $254 million in the first half of FY24, and it had increased by 35% year over year in the period between 1 January 2024 to 11 February 2024.

The company is demonstrating good profit margin potential. Its HY24 earnings before interest, tax, depreciation and amortisation (EBITDA) margin was 2.9%, at the top end of its full-year guidance of between 1% to 3%.

It aims to grow its revenue significantly in the next three to five years. I expect it can grow even more by 2030 (and beyond). The expansion into the home improvement and trade and commercial categories can help with its revenue potential.

Having an online model means it doesn’t need a store network like its competitors, reducing costs and increasing margins. Many products are shipped directly by suppliers, so it doesn’t need to hold much inventory.

If the business can keep capturing market share, then the ongoing adoption of online shopping is a powerful tailwind.

The company is expecting profit margins to grow as it scales, with particular scaling benefits relating to its fixed costs.

While I have sold half of my Temple & Webster stock, I’m hoping to buy plenty more in the future. In the meantime, I’m planning to put my sale proceeds to work in different ASX shares.

The post Why I just sold half my shares in this ASX 300 stock even though I still love it! appeared first on The Motley Fool Australia.

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More reading

• 2 ASX blue-chip shares I’d buy with $3,000 right now
• Invest $12,000 in Woodside stock and get $5,700 in passive income
• If I’d put $5,000 in Block shares 5 months ago, here’s what I’d have now
• 1 secretly cheap ASX 200 stock I’m buying for the long run
• Here’s why I think the Resmed share price should be 18% higher

Motley Fool contributor Tristan Harrison has positions in Temple & Webster Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Temple & Webster Group. The Motley Fool Australia has recommended Temple & Webster 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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