With earnings season kicking off this morning with the release of the Credit Corp Group Limited (ASX: CCP) half year result, investors may be wondering which ASX shares could be buys before they report.

Well, the team at Morgans has been busy looking at the companies it has under coverage and has picked out a few cyclical ASX shares that it finds “interesting” right now.

These are construction services company Acrow Ltd (ASX: ACF), airline operator Alliance Aviation Services Ltd (ASX: AQZ), baby products retailer Baby Bunting Group Ltd (ASX: BBN), fund manager GQG Partners Inc (ASX: GQG), and energy producer Santos Ltd (ASX: STO).

What did the broker say about these cyclical ASX shares?

Commenting on the market and these ASX shares, the broker said:

We see the S&P/ASX 200 index rangebound in 2024. FY24 EPS is forecast to decline 5% before rebounding 5% in FY25, leaving the heavy lifting down to P/E multiple expansion, but at 16x vs the 14.5x 20-year historical average, there is limited scope for further expansion barring a sharp retreat in interest rates.

While we do not expect the index to do much at the headline level, high-level numbers conceal significant variation across sectors. Cyclicals including consumer and commercial services, media, retail and capital goods offer mid-to-high EPS growth into FY24 at lower relative valuations. Cyclical stocks that look interesting include Acrow, GQG Partners, Alliance Aviation, Baby Bunting and Santos.

What about ratings?

Morgans has price targets of $1.22 on Acrow shares, $5.20 on Alliance Aviation shares, $2.05 on GQG shares, $2.00 on Baby Bunting shares, and $7.80 on Santos shares.

For all but Santos, the broker has add ratings and valuations on these ASX cyclical shares that imply at least 10% upside from current levels.

And in the case of Alliance Aviation, its price target suggests upside of over 50% from current levels. This could make it worth watching very closely during earnings season.

The post Morgans names the ASX cyclical shares to buy for earnings season appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Wednesday
• How US-Iran tensions will support oil prices: CBA analyst
• Could this be jump-starting ASX energy shares today?
• Are ASX growth shares back? How these fundies delivered over 20% upside in 2023
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Acrow and Alliance Aviation Services. 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 a growth investor and have room in your portfolio for some new additions, then it could be worth checking out the two named below.

Goldman Sachs is feeling very positively about both of these ASX growth shares and is tipping them as top buys.

Here’s what the broker is saying:

TechnologyOne Ltd (ASX: TNE)

Goldman Sachs is a big fan of this enterprise software provider and sees it as a great longer term option.

This is because it believes the company can deliver mid to high teens earnings per share growth through to at least FY 2026. The broker explains:

In our view, the company is well placed to meet its A$500mn FY26 ARR target through a combination of SaaS flip uplift, net expansion and new customer growth. We see margin expansion resuming from FY24E onwards, which in combination with robust revenue growth should drive a mid-high teens EPS CAGR to FY26E, providing strong earnings visibility. TNE’s share price has historically been driven by its strong rate of compound earnings growth underpinned by its leading market position, high R&D investment and defensive public sector end markets.

In addition, its analysts feel that “TNE’s current valuation does not account for its above-trend earnings growth outlook, nor the defensiveness of its earnings in a more challenging macro environment.”

Goldman has a buy rating and $18.05 price target on its shares.

Webjet Limited (ASX: WEB)

Another ASX growth share that has been given the thumbs up by Goldman Sachs is online travel booking company Webjet.

Its analysts are very positive on the company’s WebBeds business and expect it to benefit greatly from structural growth opportunities. It also feels that the overall business is significantly stronger compared to pre-COVID times. It said:

Our Buy thesis on WEB is premised on 1) WEB demonstrating strong cash generation as the market recovers while current valuation continues to be impacted by macro concerns 2) We believe WEB’s Bedbanks business offers a structural growth opportunity and expect it to drive scale benefits, underpinned by system changes and ERP upgrades as WEB goes through the recovery cycle. 3) We believe the OTA business is exposed to the right channels with the ongoing shift towards digital bookings likely to aid WEB in growing its TAM as well as market share.

Goldman has a buy rating and $8.10 price target on the ASX growth share.

The post Why Goldman Sachs rates these ASX growth shares as strong buys appeared first on The Motley Fool Australia.

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More reading

• Webjet stock: 3 reasons it’s on my buy list
• 3 ethical ASX shares poised to outperform in 2024
• Tripled since COVID: 2 rocketing ASX 200 stocks not too late to buy
• Want $1 million in retirement? 3 ASX shares I think could make it happen
• Here’s how the ASX 200 market sectors stacked up this 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 and Technology One. 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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There’s a cheap S&P/ASX 200 Index (ASX: XJO) stock on my radar to tap for some market-beating passive income.

To be clear, when I say ‘cheap’ ASX 200 stock, I don’t mean there’s anything shoddy about the company itself. Or its outlook for ongoing, strong future dividend payments.

Instead, I mean that the company’s share price has dropped 16.11% over the past six months, due to circumstances mostly outside of its control.

And I mean that it trades on a price-to-earnings (P/E) ratio of less than six times.

So, without further ado, the cheap ASX 200 stock in question is oil and gas company Woodside Energy Group Ltd (ASX: WDS).

What’s been happening with Woodside shares?

Woodside shares have faced headwinds over the past six months, mostly from a big retrace in energy prices.

The Brent crude oil price, for example, is currently at US$84 per barrel. While that’s up from the mid-December lows of US$73 per barrel, it’s well down from the US$97 per barrel Brent crude oil was fetching at the end of September.

Still, I’m not overly concerned about the retrace in energy prices that have helped put Woodside on my cheap ASX 200 shares list. I’m pretty confident oil and gas prices will tick back up along with the global economic growth outlook once interest rates begin to come off the boil.

This should see Woodside continue to offer passive income investors an outsized yield.

And let’s not forget that the energy giant’s full-year 2023 production ramped up by 18.7% year on year to reach 187.2 million barrels of oil equivalent (MMboe).

With this mind, let’s turn to that very handy $100 a month (or $1,200 a year) in passive income I’m after.

A cheap ASX 200 stock for regular passive income

Over the past 12 months, Woodside shares paid out a total of $3.40 in fully franked dividends. That included the all-time high final dividend of $2.154 per share.

Eligible shareholders will have seen that record passive income hit their bank accounts on 5 April. The interim dividend was paid on 28 September.

At yesterday’s closing price of $31.87 a share, that sees this cheap ASX 200 stock trading at a juicy trailing yield of 10.66%.

Now Woodside’s future dividend yields may be higher or lower, depending on a range of company-specific and macroeconomic factors.

But based on this trailing yield, and my expectations of a rebound in energy prices, I’d need to buy 353 shares of this cheap ASX 200 stock to earn a $100 monthly passive income.

And, of course, I’ll be hoping the Woodside share price delivers some gains as well.

The post I’d buy 353 shares of this cheap ASX 200 dividend stock for $100 in monthly passive income appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Wednesday
• How US-Iran tensions will support oil prices: CBA analyst
• How investing $100 per week can create $1,500 in annual ASX dividend income
• Could this be jump-starting ASX energy shares today?
• Why Bapcor, Domino’s, Santana Minerals, and Woodside shares are charging higher

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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Are you looking for some juicy dividend yields to boost your income portfolio?

If you are, then it could be worth checking out the buy-rated ASX 200 dividend shares named below.

Here’s what analysts are expecting from them:

Suncorp Group Ltd (ASX: SUN)

According to analysts at Goldman Sachs, insurance giant Suncorp could be an ASX 200 dividend share to buy.

Its analysts currently have a buy rating and $15.00 price target on the insurance giant’s shares.

The broker believes that trading conditions are very favourable for the company at present. It explains:

We are favourably disposed to Suncorp, noting in large part the tailwinds that exist in the general insurance market – i.e., very strong renewal premium rate increases and the benefit of higher investment yields. We think the strong rate momentum that SUN is getting should offset any volume pressures. SUN’s underlying margins are also expected to stay within 10-12% for FY24 despite higher reinsurance costs, increased perils allowances and lower reserve release assumptions at 1% as SUN benefits from significant price increases. Further, we note that we could start to see more meaningful benefits to margin from underlying claims inflation abating into FY24E.

In addition, the broker sees “possible catalysts on the horizon for SUN including capital return post the pending bank sale, if approved, and the possibility of a whole of account quota share arrangement similar to IAG.”

As for income, the broker is expecting fully franked dividends per share of 75 cents in FY 2024 and 82 cents in FY 2025. Based on the current Suncorp share price of $13.92, this will mean yields of 5.4% and 5.9%, respectively.

Transurban Group (ASX: TCL)

Another ASX 200 dividend share that brokers are positive on its toll road giant Transurban.

The team at Citi is feeling very positive about the CityLink and Cross City Tunnel owner and sees potential for it to pay dividends ahead of guidance. It said:

We believe TCL’s FY24 DPS guidance of 62c is conservative and we forecast DPS of 63.4c given strong toll price growth, traffic growth on new road completions and a slower increase in debt costs in FY24 given a small proportion (c. 3%) of the debt book is maturing this year TCL is currently trading in-line with historic EV/EBITDA multiples at 22.5x, but we see upside given the strong EBITDA growth outlook (c.12% CAGR between Fy24-FY26). Retain Buy

Its analysts have pencilled in dividends per share of 63 cents in FY 2024 and then 65 cents in FY 2025. Based on the current Transurban share price of $13.36, this will mean yields of 4.7% and 4.9%, respectively.

Citi currently has a buy rating and $15.90 price target on its shares.

The post Brokers say these ASX 200 dividend shares are buys appeared first on The Motley Fool Australia.

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More reading

• 3 world-class ASX retirement shares to buy now
• Retirees: 2 Top ASX dividend shares I’d buy now for passive income in 2024
• How I’d build a backup superannuation fund with $10,000 and 5 ASX shares
• Goldman Sachs says these ASX 200 mining shares can rise 20%+
• ANZ shares breach 52-week record amid merger expectations

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On Tuesday the S&P/ASX 200 Index (ASX: XJO) was on form again and neared a record high. The benchmark index ended the day 0.3% higher at 7,600.2 points.

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

ASX 200 expected to fall

The Australian share market looks set to end its winning streak on Wednesday following a poor night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 12 points or 0.15% lower. In late trade on Wall Street, the Dow Jones is up 0.3%, but the S&P 500 has fallen 0.1% and the Nasdaq is 0.8% lower.

Oil prices rise

It could be a decent session for ASX 200 energy shares Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) after oil prices rose overnight. According to Bloomberg, the WTI crude oil price is up 1.3% to US$77.80 a barrel and the Brent crude oil price is up 0.6% to US$82.92 a barrel. This was driven by news that the IMF has upgraded global economic growth forecasts.

Credit Corp update

As per tradition, Credit Corp Group Limited (ASX: CCP) shares will be on watch on Wednesday when the debt collector kicks off earnings season. Credit Corp has been having a tough time over in the United States due to a sustained deterioration in collection conditions. This is expected to result in a $45 million impairment for the first half. Investors may also want to look out for any changes to its underlying NPAT guidance for FY 2024, which was reduced by $10 million in October to between $80 million and $90 million.

Gold price rises

ASX 200 gold shares such as Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) could have a good session on Wednesday after the gold price rose overnight. According to CNBC, the spot gold price is up 0.4% to US$2,52.4 an ounce. The precious metal hit a two-week high ahead of the US Federal Reserve’s interest rate meeting.

IGO update

Also on watch on Wednesday will be IGO Ltd (ASX: IGO) shares when the battery materials miner releases its quarterly update. The market will no doubt be keen to see how its low cost lithium operations are performing in the current environment. Liontown Resources Ltd (ASX: LTR) is also releasing its quarterly update.

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

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More reading

• Here are the top 10 ASX 200 shares today
• ASX 200 record! Here’s why Aussie shares are on the cusp of a new all-time high
• How US-Iran tensions will support oil prices: CBA analyst
• 5 things to watch on the ASX 200 on Tuesday
• How investing $100 per week can create $1,500 in annual ASX dividend income

Motley Fool contributor James Mickleboro has positions in Woodside Energy Group. 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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FOMO. Fear of missing out. 

It’s a driver of stock buying more than what people are willing to admit.

You see a hot tip or a tempting bargain in the S&P/ASX 200 Index (ASX: XJO), then wonder if you don’t act now whether you’ll be foregoing easy money.

It’s never a good idea to buy on emotion. 

But if you do proper research into the business and it fits your investment criteria, then yes, you do need to pounce on it! Don’t ignore the low-hanging fruit.

There is one ASX 200 growth stock that, right now, many investors are agonising over.

A rollercoaster 2023

Shares for sleep apnoea device maker Resmed CDI (ASX: RMD) dropped a terrifying 37% last reporting season.

Investors were concerned about narrowing margins, but the major catalyst for the slide were fears that new GLP-1 weight loss drugs like Ozempic would dramatically reduce obesity around the world.

Obesity is a contributing factor towards sleep apnoea, so the logic went that it would severely dent ResMed’s addressable market.

However, many experts both in the investment and medical worlds insisted at the time those fears were overstated.

And maybe now the market is listening, because the ResMed share price has rocketed 33% since its September trough.

But is it worth pouncing on now?

A rejuvenated ASX 200 growth stock

ResMed has been a star performer for many investors for more than a-decade-and-a-half.

Even after the Ozempic crash last year, the stock has returned a handsome 117% over the past five years.

The company was one of the first cabs off the rank in the coming reporting season, last Thursday revealing its second quarter numbers.

And the market was pleased to see ResMed exceed expectations on pretty much every metric. Revenue, gross margin, and operating profit were all up.

All that Ozempic anxiety now seems like history.

With the shares rocketing 6.4% on that day, investors are now wondering whether they have missed out.

Professional investors are suggesting that their FOMO is justified.

According to CMC Invest, an overwhelming 18 out of 24 analysts believe that ResMed shares are a buy at the moment. Twelve of those rate the ASX 200 growth stock as a strong buy.

The post Will you miss out if you don’t buy more of this superstar ASX 200 growth stock? appeared first on The Motley Fool Australia.

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More reading

• ResMed shares rise on major Philips news
• Leading brokers name 3 ASX shares to buy today
• Why it isn’t too late to buy ResMed shares
• 5 things to watch on the ASX 200 on Monday
• Here’s how I’m targeting a generous ASX passive income in retirement!

Motley Fool contributor Tony Yoo has positions in ResMed. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ResMed. The Motley Fool Australia has positions in and has recommended ResMed. 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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BHP Group Ltd (ASX: BHP) shares not only offer the potential for capital gains, but the S&P/ASX 200 Index (ASX: XJO) iron ore miner is also well known for its reliable, fully franked dividend payouts.

With the iron ore price racing above US$215 per tonne in mid-2021, so too did the passive income the miner paid its shareholders.

The final 2021 dividend of $2.715 per share set a new all-time high that still stands today.

And BHP shares paid a record interim dividend of $2.081 in 2022, topping it off with a final dividend of $2.552 a share. That one was second only to 2021’s final payout.

During the first half of 2022, the iron ore price broadly traded in the US$130 to US$150 per tonne range.

You likely recall that the industrial metal then plunged to lows of around US$85 per tonne by the end of October 2022 amid slumping demand from China.

As for 2023, the iron ore price hit lows of just under US$100 per tonne in late May, before momentum turned once more and prices began to rise.

As you’d expect, with iron ore the biggest revenue earner for BHP shares, the 2023 dividends also dropped significantly.

BHP paid an interim dividend of $1.364 per share on 30 March and a final dividend of $1.251 on September.

That still sees the ASX 200 mining stock trading at a fully franked yield of 5.6%.

But that yield could see a big boost in 2024.

What’s the passive income outlook for BHP shares in 2024?

Turning to 2024, as of Tuesday afternoon, iron ore was trading for US$136 per tonne.

According to Andrew Fraser, co-portfolio manager Merlon Capital, that’s good news for BHP shareholders looking forward to some welcome passive income.

“The iron ore pricing environment is [a] much more significant contributor to the cash flows, than some of the other commodities like nickel or copper,” Fraser said (quoted by The Australian Financial Review).

“BHP and Fortescue have reasonably strong grounds to maintain their dividends, especially since the iron ore price has risen in the past six months,” he added.

While Fraser is talking about the ASX 200 miners maintaining their dividends, there are reasons to believe the 2024 payouts could be significantly higher.

Namely, if the iron ore price continues to march higher from here to levels not seen since the first half of 2022.

And that’s precisely what the analysts at Citi are forecasting.

Based on increasing stimulus measures from the Chinese government and People’s Bank of China (PBoC) to spur the nation’s sluggish economy and steel-hungry property markets, Citi forecasts the iron ore price will surge back to US$150 per tonne during the first three months of 2024.

Commenting on China’s increasing stimulus measures, Citi analyst Wenyu Yao said:

We see these measures as positive and can see this risk rally continuing over the coming month on the back of further details regarding urban village redevelopment and anticipated strong total social financing figures.

And BHP shares, along with the ASX 200 miner’s dividends, could see tailwinds continuing into the second quarter.

“As policy momentum could gather speed ahead of the National People’s Congress in March, we see rising upside catalysts into the second quarter,” Yao added.

The post Why the dividends from BHP shares could surge in 2024 appeared first on The Motley Fool Australia.

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More reading

• Buying ASX 200 mining shares? Here’s Citi’s 2024 prediction for the iron ore price
• BHP share price tumbles amid reported $14.8 billion Brazil dam disaster hit
• Are ASX blue-chip shares actually safe investments?
• How to generate $10,000 of passive income from BHP shares
• ASX mining stock doubles in value in 30 minutes on news of BHP deal

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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There is arguably nothing more fun in investing than picking up a stock when no one else is interested, then watching it rocket to the moon.

If you missed out on the ride, then the consolation prize is imagining how much money you would have if you did invest early enough.

Regular readers would know that ASX uranium stocks have been on fire lately, but even by those standards there is one stock that had a particularly excellent 2023.

Let’s check it out:

Who’s the Boss?

Boss Energy Ltd (ASX: BOE)’s main business is the Honeymoon Uranium Mine in South Australia.

Under the previous owner the mine started producing in 2011. But rock-bottom global prices for uranium after the Fukushima disaster forced suspension of operations in late 2013.

Boss Energy bought the mine in 2015 but it lay dormant, meaning for many years the share price languished in penny stock hell.

In June 2021, the company announced it would conduct an Enhanced Feasibility Study (EFS) to see whether Honeymoon was sufficiently viable to restart mining.

The results of that study recommended changes to the processing plant to improve the economics for every kilogram of uranium produced.

Wonderful timing for this uranium stock

All this work came along at an incredibly fortunate time.

In February 2022, Russia invaded Ukraine. Almost immediately the world’s energy market plunged into crisis.

Nuclear power, which had been out of favour for 11 years since Fukushima, all of a sudden looked attractive to nations seeking energy security.

Uranium prices soared for much of 2023 due to this surge in demand.

Dormant mines around the world scrambled to resume production, but it’s a significant task requiring time and money.

Boss Energy was a step ahead of the rest, thanks to conducting that feasibility study in 2021.

How one winner can carry a bunch of losers

In July 2019, you could still buy Boss Energy shares for 36 cents apiece.

Let’s say you had the foresight to buy $40,000 worth back then. 

Over the last couple of years the market has recognised the huge potential and advantage for Boss Energy.

On Tuesday Boss Energy shares were trading around $5.44.

This means that the $40,000 you put in not even five years ago would now be $604,444.

Remember, this case study isn’t to encourage you to go for get-rich-quick schemes.

It’s to point out that one or two winners can make all the difference in your ASX stock portfolio. You don’t have to aim for perfection.

Consider this. 

At the time you bought Boss Energy shares, you might have bought nine other stocks for $40,000 each to diversify your investments.

Even if all nine of those somehow went to $0, your portfolio would still be 75% in the black.

Crazy, but that’s maths for you.

The post If you’d put $40,000 in this ASX uranium stock 5 years ago, you’d have $600,000 now appeared first on The Motley Fool Australia.

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More reading

• Why Boss Energy, Calix, Frontier Digital, and Gold Road shares are falling today
• Guess which ASX 200 uranium stock was just downgraded
• Up 124% and 52% in a year, why are these 2 ASX 200 uranium shares gaining again today?
• Why Boss Energy, Cooper Energy, Judo Capital, and Polynovo shares are racing higher
• If I’d invested $20,000 in Boss Energy shares one month ago here’s what I’d have today

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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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This Tuesday’s session has been an especially lucrative one for the S&P/ASX 200 Index (ASX: XJO) and most ASX 200 shares. The ASX 200 got painfully close to breaking its all-time record high this morning, and remains up 0.23% at the time of writing at 7,596.3 points. But let’s talk about what is happening with ASX 200 bank shares like National Australia Bank Ltd (ASX: NAB).

NAB shares have had a wild day. The ASX 200’s second-largest bank stock by market capitalisation had a strong start his morning, rising as high as $32.34 a share – a new 52-week high for NAB. However, soon after, NAB shares lost steam. The bank is currently in the red zone, down 0.16% for the day at $32.09 a share at present.

Even so, the new 52-week high still counts.

NAB wasn’t the only ASX 200 bank stock to close in on a new high today. This Tuesday also saw ANZ Group Holdings Ltd (ASX: ANZ) shares clock a new 52-week high of $26.99 a share. This bank is now up around 18% since June last year.

But Commonwealth Bank of Australia (ASX: CBA) has done one better. CBA shares hit not just a new 52-week high today, but a fresh all-time, record high. Yep, CBA shares clocked a new high watermark of $116.94 earlier this morning – the highest this ASX 200 bank has ever traded at. CBA is now up more than 20% since only late October.

Westpac Banking Corp (ASX: WBC) investors might be feeling a little left out right about now. They shouldn’t get too envious though. Westpac may not have broken any new highs today. But Westpac shares did get as high as $24.04 this morning, just a touch off this bank’s reigning 52-week high of $24.10.

Why are ASX bank shares like NAB and CBA at new highs today?

Unfortunately, there’s no obvious catalyst for these new highs from NAB shares and the other ASX 200 bank stocks. Earlier today, we did cover why the overall ASX stock market was nearing its own record high. Those same factors – falling inflation, strong economic growth with low unemployment, and the expectations of interest rate cuts this year – are probably also at play with the banks today.

It’s worth noting that earnings season is almost upon us though. Only CBA is scheduled to give investors a complete half-year earnings report next month (14 February). It seems that the markets are anticipating quite the Valentine for investors on that day.

However, we are still in line to receive quarterly trading updates from the other big banks in February. So perhaps investors are… banking… on some good numbers coming out. Perhaps even a CBA dividend hike.

As such, it will interesting to see how the share prices of NAB, CBA and the other banks react to these reports. Until then, let’s see if we get any more 52-week (or all-time) highs from our bank stocks.

The post Breaking! NAB shares (and CBA) just hit a new 52-week high appeared first on The Motley Fool Australia.

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More reading

• Top 5 most profitable ASX large-cap shares of 2023
• ASX 200 record! Here’s why Aussie shares are on the cusp of a new all-time high
• Buy Westpac and these ASX 300 dividend shares now: analysts
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Sebastian Bowen has positions in National Australia Bank. 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 wise and wealthy Warren Buffett, CEO and co-founder of Berkshire Hathaway Inc, has previously insisted investors ought to “Look for companies with high profit margins”. A high margin is typically linked to some form of competitive advantage, enabling a company to generate above-normal returns.

Excess earnings can be beneficial for businesses and shareholders in many ways. Firstly, it can fortify the balance sheet to insulate against black swan events. Alternatively, the capital can be redeployed by the company to fuel growth. Another option is to turn on the dividend tap, passing on those lucrative profits to shareholders.

In 2023, the five most profitable ASX large-cap shares (market capitalisation above $10 billion) all scored net margins greater than 35%. Meanwhile, the collective net margin of the S&P/ASX 200 Index (ASX: XJO) — Australia’s top 200 listed companies — hovers around 11%.

The ASX large-cap shares with magnificent margins

Here are the Aussie companies that raked in monumental margins last year.

5. Commonwealth Bank of Australia

Australia’s biggest bank is also its most profitable. Beating out the other three members of the big four, the Commonwealth Bank of Australia (ASX: CBA) posted a net profit margin of 38.6% last year, its best since FY2017 — a time before the banking Royal Commission.

As with most banks in 2023, CommBank basked in the glory of higher interest rates. As rates rose, so did the lender’s net interest margin — a key determinant of overall profit margins.

The CBA share price rallied 9% in 2023 — beating all the other big four banks bar ANZ Group Holdings Ltd (ASX: ANZ).

4. Pro Medicus Limited

Dialling it up a notch, this next ASX large-cap share achieved its highest net profit margin on record last year. Medical imaging software provider Pro Medicus Limited (ASX: PME) profited 48.6 cents from every dollar of revenue it generated in FY23.

The company’s margin benefits from the innate unit economics of its software. Pro Medicus can onboard additional healthcare customers onto its products at a negligible cost, increasing margins as the company scales.

The Pro Medicus share price surged 73% throughout 2023.

3. Goodman Group

Now we’re into the 50-plus club. Australian integrated commercial and industrial property company Goodman Group (ASX: GMG) took home a 52.1% net profit margin in 2023. Despite increased property investment and development income, the lofty figure declined from the 71% margin in the prior year.

The year saw Goodman retain an occupancy rate of 99% across its property portfolio with growing rents. Notably, the business holds $81 billion in assets under management and $13 billion of work in progress while maintaining a debt-to-equity ratio below 20%.

Goodman shares gained a glamorous 46% during the year.

2. Washington H Soul Pattinson and Company Ltd

At 121 years old, the investment house known as Washington H Soul Pattinson and Company Ltd (ASX: SOL) and its earnings margin is no worse off for its age. The large-cap ASX share takes the runner-up position in 2023 with an impressive 58.4% net margin.

The period provided improved net cash flows from Soul Patts’ investments ($118.5 million versus $116.9 million) despite a reduced weighting toward ASX large-cap shares in FY23 (21% versus 31%). A greater allocation towards diversified financials, industrials, and materials may have helped.

Reclaiming lost ground from 2022, the Soul Patts share price climbed 19% in 2023.

1. Pilbara Minerals Ltd

Despite holding the mantle as the most shorted ASX share for too many weeks to recall, Pilbara Minerals Ltd (ASX: PLS) was the most profitable large-cap of 2023. The lithium miner earned 58.8 cents from every dollar of revenue, as per its last full-year result.

It was a completely different landscape for lithium shares in the year leading up to FY2023 results. Prevailing prices for the commodity were far beyond even some of the highest-cost producers, minting money for those capable of mining lithium cheaply.

The company’s latest quarterly update paints a slightly different picture.

Shares in this ASX large-cap share lifted 5% in 2023, ironically the smallest return among the five.

The post Top 5 most profitable ASX large-cap shares of 2023 appeared first on The Motley Fool Australia.

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More reading

• ‘Remarkable position’: Why Pilbara Minerals shares are still a top pick
• Are ASX blue-chip shares actually safe investments?
• These are the 10 most shorted ASX shares
• Are ASX growth shares back? How these fundies delivered over 20% upside in 2023
• If I invested $10,000 into Pilbara Minerals shares 10 years ago, I would have…

Motley Fool contributor Mitchell Lawler has positions in Commonwealth Bank Of Australia and Pro Medicus. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Berkshire Hathaway, Goodman Group, Pro Medicus, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Berkshire Hathaway, Goodman Group, and Pro Medicus. 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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