The Commonwealth Bank of Australia (ASX: CBA) share price has put on a stellar performance over the last five years.

It’s gained 45.8% in that time. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) has lifted just 29%.

Today, CBA shares trade for $111.15 each – mere cents off their all-time high of $111.43 hit on Friday.

Glancing to the past, however, an investor could have bought 65 CBA shares for $5,000 in February 2018, paying $76.25 apiece and walking away with nearly $44 in change.

That holding would now be worth $7,224.75. But what about the big four bank’s dividends?

Let’s consider the total return those invested in the ASX 200 bank share have likely seen over the last five years.

All the dividends CBA shares have offered since 2018

Here are all the dividends on offer from CBA shares over the last half-decade:

CBA dividends’ pay date	Type	Dividend amount
September 2022	Final	$2.10
March 2022	Interim	$1.75
September 2021	Final	$2
March 2021	Interim	$1.50
September 2020	Final	98 cents
March 2020	Interim	$2
September 2019	Final	$2.31
March 2019	Interim	$2
September 2018	Final	$2.31
March 2018	Interim	$2
Total:		$18.95

As the chart above shows, CBA shares have each yielded $18.95 in passive income since early 2018.

That means a 65-share-strong parcel probably would have handed an investor $1,231.75 in dividends over that time – bumping the potential return on investment (ROI) to a notable 70.6%.

And that’s before we consider the compounding benefits those dividends may have brought had they been reinvested, perhaps through the bank’s dividend reinvestment plan (DRP).

Not to mention, the franking credits attached to each of the bank’s offerings during that time. Certainly, they may have brought some shareholders extra benefits come tax time.

Right now, CBA shares trade with a 3.46% dividend yield.

The post If you stocked up on $5,000 of CBA shares 5 years ago, here’s how much dividend income you’ve made appeared first on The Motley Fool Australia.

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More reading

• 3 of the safest ASX 200 dividend stocks in Australia
• Investing in ASX 200 dividend shares? Here’s what to look for in 2023: fund manager
• ASX 200 investors are selling off CBA shares! What should I do?
• Top ASX dividend shares to buy in February 2023
• 5 ASX 200 shares smashing new 52-week highs on Wednesday

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

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One of the main attractions of investing in stocks is how easy it is to receive passive income from ASX dividend shares without having to do any work.

Once we own the shares and have directed where we want the dividends to be paid, we can just watch the dividends roll into the bank account.

Some businesses on the ASX have been going for decades. Having strong and stable operations means they can reward shareholders with dividend payments regularly each year.

While dividends aren’t guaranteed, I think the three ASX dividend shares I’m going to talk about are likely to keep paying good dividends for a very long time.

Telstra Group Ltd (ASX: TLS)

Telstra is the largest telecommunications business in Australia, and it has been known for paying a decent dividend yield since the GFC.

I am confident Australia will continue to use telecommunications beyond the foreseeable future. Indeed, they may become even more integral.

The capabilities of 5G could mean that the technology may replace the fixed cables of the NBN as a household’s preferred way to connect to the internet at some point. If it could win over households, this would be a very useful boost for Telstra’s profit margin.

Telstra’s profit outlook seems more positive these days as the telco works on lowering costs and increasing revenue, as well as diversifying its operations. Expectations of a higher profit have meant the ASX dividend share has started to increase its dividend.

According to Commsec, the grossed-up dividend yield in FY23 could be 5.8%.

Macquarie Group Ltd (ASX: MQG)

Macquarie is the most impressive bank on the ASX, in my opinion. It’s an investment bank, not just a bank in the lending and savings accounts business.

It has a number of divisions, including asset management. This provides it with a consistent source of solid earnings. Macquarie also has a commodities and global markets (CGM) division which has been making a bucketload of money amid the volatility in energy markets over the last 12 months.

The ASX dividend share generates more than two-thirds of its earnings away from Australia and New Zealand. As such, it’s a global business.

Its ability to invest and grow anywhere, across a number of financial segments, gives me confidence it can weather any downturn and perform in the long term. One example is its leading role in financing green energy developments.

According to Commsec, Macquarie could pay a grossed-up dividend yield of around 4% in FY23.

Metcash Ltd (ASX: MTS)

Metcash is a diversified business that has three segments. It supplies independent supermarkets, such as IGAs, around Australia. Metcash supplies a number of independent liquor retailers like Cellarbrations, The Bottle-O, IGA Liquor, Thirsty Camel, Duncans, and Porters Liquor.

The business also has a hardware division, which owns the brands Mitre 10, Home Timber & Hardware, and Total Tools.

COVID-19 seems to have changed the way some people shop, with more people preferring their local supermarkets and liking what they’re seeing. The company’s food revenue continues to grow, liquor is performing well, and hardware has started FY23 strongly.

With hardware now generating the largest part of the company’s profit, I think the business has more growth potential.

The ASX dividend share has committed to a dividend payout ratio of 70% of underlying net profit after tax (NPAT).

According to Commsec, Metcash could pay an annual dividend of around 22 cents in FY23, translating into a grossed-up dividend yield of 7.6%.

The post 3 ASX dividend shares for lazy investors appeared first on The Motley Fool Australia.

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More reading

• Top ASX value shares to buy in February 2023
• Top brokers name 3 ASX shares to buy next week
• Here’s how I’d start building a second income this February, for $30 a week
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Investing in ASX 200 dividend shares? Here’s what to look for in 2023: fund manager

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 positions in and has recommended Macquarie Group and Telstra Group. 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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At the start of each week, I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Flight Centre Travel Group Ltd (ASX: FLT) continues its long run as the most shorted ASX share after its short interest rose gain to 14.2%. Short sellers appear to believe that the market is too optimistic on Flight Centre’s revenue margins.
• Betmakers Technology Group Ltd (ASX: BET) has seen its short interest remain flat at 12.7%. Valuation concerns may be weighing on this betting technology company’s shares.
• Megaport Ltd (ASX: MP1) has seen its short interest remain at 9.8%. Short sellers will have been pleased to see this network as a service provider’s shares crash last week after a disappointing quarterly update. Operational trends were far weaker than expected.
• Sayona Mining Ltd (ASX: SYA) has 9.2% of its shares held short, which is down week on week once again. Short sellers appear to be targeting Sayona and other lithium shares on the belief that lithium prices have peaked.
• Core Lithium Ltd (ASX: CXO) has short interest of 9%, which is down slightly week on week. Goldman Sachs believes this lithium developer’s shares are vastly overvalued compared to peers.
• Liontown Resources Ltd (ASX: LTR) is another lithium share being targeted by short sellers. It has short interest of 7.8%, which is up week on week. Lithium price concerns and project cost blow outs may be behind this.
• Lake Resources N.L. (ASX: LKE) has 7.2% of its shares held short, which is down week on week. J Capital has gone public with why it is shorting this lithium developer. It has concerns over its DLE technology and project funding.
• ARB Corporation Limited (ASX: ARB) has entered the top ten with short interest of 6.9%. A soft start to FY 2023 and uncertainty in the US market appear to be behind this.
• Zip Co Ltd (ASX: ZIP) is back in the top ten with short interest of 6.9%. Short sellers may believe the market is being too optimistic on Zip’s profitability target.
• Brainchip Holdings Ltd (ASX: BRN) has rejoined the top ten with short interest of 6.7%. Yet another disappointing quarterly performance from this meme stock appears to have given short sellers even more confidence in their bearish views.

The post These are the 10 most shorted ASX shares appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy next week
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Core Lithium: An ASX 200 share to buy in February? 
• Brokers name 3 ASX shares to buy now

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 ARB Corporation, Betmakers Technology Group, Megaport, and Zip Co. The Motley Fool Australia has recommended ARB Corporation, Betmakers Technology Group, Flight Centre Travel Group, and Megaport. 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 share market starting to rebound, I think it’s a great time to be looking at ASX shares with good growth potential.

Inflation seems to be peaking in the US and Australia. Although it’s still a long road to a low and healthy inflation rate, progress has been made and this could be a positive thing for investors and shares.

I think the ASX tech shares that have been hit hard but have impressive financials are ones to get excited about. Their long-term outlooks seem very compelling.

Xero Limited (ASX: XRO)

The Xero share price is up by 17% since the start of the year. But, it’s still down around 47% from November 2022.

This ASX tech share provides accounting software for business owners, accountants, bookkeepers, and the like.

With the business still growing, I think the much lower valuation is far more appealing. With a gross profit margin of 87%, any growth the business achieves adds value to Xero.

In the FY23 first-half result to 30 September 2022, the number of subscribers increased 16% to almost 3.5 million, average revenue per user (ARPU) grew 13% to $35.30, and operating revenue surged 30% to $658 million.

Thanks to the growth in the financial measures I just mentioned, Xero’s annualised monthly recurring revenue (AMRR) had reached $1.48 billion at September 2022, suggesting that some growth is already baked in for the next 12 months.

I think it won’t be too long until the Xero share price gets back to above $90 as investor sentiment returns.

Volpara Health Technologies Ltd (ASX: VHT)

This is one of my favourite ASX healthcare shares. It provides software that enables advanced breast screening analysis, with a focus on risk for the patient. Volpara also has operational software for medical professionals to improve their workflow and efficiency.

In the company’s half-year result for the six months to 30 September 2022, it said that 40.5% of US women who had breast screenings had at least one Volpara product applied on their images and data.

Its HY23 gross profit margin was almost 92% – so this is another example of where revenue growth can be a very useful thing for the company’s financials.

In the three months to 31 December 2022, Volpara saw record quarterly cash receipts of NZ$11.2 million. This was an increase of 42% in constant currency terms and enabled the business to achieve its first positive net cash flow quarter on record.

Since the start of 2023, Volpara shares have soared an impressive 49%. Despite that, the ASX share is still down by around 35% since October 2022. With the progress the business is making, I think there’s more to come in the next few years.

The post Sitting on cash? These 2 ASX shares are great buys today but won’t be forever appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• These could be the best ASX 200 growth shares to buy: analysts
• I’m listening to Warren Buffett and buying ASX shares on sale
• Why Centuria Office, Deep Yellow, Newcrest, and Xero shares are racing higher today
• Xero share price jumps 9% to four-month high

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 Volpara Health Technologies and Xero. The Motley Fool Australia has positions in and has recommended Volpara Health Technologies and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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If you’re looking for dividend shares to buy to boost your passive income, then you may want to look at the two listed below.

Here’s why analysts at Goldman Sachs rate these growing ASX dividend shares highly:

Universal Store Holdings Ltd (ASX: UNI)

The first ASX dividend share that has been tipped as a buy is Universal Store. It is a growing retailer focused on youth fashion through the Universal Store and Thrills brands.

Goldman Sachs is a fan of the company due to the company’s exposure to younger consumers, which it expects to continue spending in 2023. It explained:

We believe the young Australian consumer is uniquely resilient to inflationary and broader economic pressures given (1) a high proportion live at home; (2) more than two-thirds are working; (3) high and increasing minimum wage entitlements and; (4) a heavy skew towards discretionary spending.

In respect to dividends, the broker is expecting fully franked dividends of 27.2 cents in FY 2023 and 29.9 cents in FY 2024. Based on the latest Universal Store share price of $5.87, this equates to yields of 4.6% and 5.1%, respectively.

Goldman Sachs currently has a buy rating and $7.55 price target on its shares.

Woolworths Limited (ASX: WOW)

Another ASX dividend share that Goldman Sachs thinks investors should buy is Woolworths.

Its analysts are positive on the retail giant due to its strong market position, customer loyalty, and omni-channel advantage. It explained:

We are Buy rated (on Conviction List) on the stock as we believe the business has one of the highest consumer stickiness and loyalty among peers, and hence has strong ability to drive market share gains via its omni-channel advantage, as well as pass through any cost inflation to protect its margins, beyond market expectations.

As for dividends, Goldman is forecasting fully franked dividends of $1.02 per share in FY 2023 and $1.13 per share in FY 2024. Based on the current Woolworths share price of $36.51, this will mean yields of 2.8% and 3.1%, respectively.

Goldman currently has a conviction buy rating and $41.20 price target on the company’s shares.

The post Buy these growing ASX dividend shares for passive income: Goldman appeared first on The Motley Fool Australia.

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More reading

• Analysts name 2 strong ASX 200 shares for a retirement portfolio
• Goldman reveals the ASX shares that could surprise to the upside (and downside) this reporting season
• Experts say these ASX dividend shares are top buys right now
• ASX shares investors rejoice! RBA says inflation has now peaked
• Here are the top 10 ASX 200 shares today

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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After a brutal 2022, it’s no surprise investors are still anxiously obsessed with inflation, interest rates and geopolitics.

But the team at QVG Capital is urging investors to forget all that, because there is only one thing that matters this year.

“2023 will be all about earnings,” stated a QVG memo to clients this week.

“We think future returns will be dictated by earnings. Worrying about rates and valuation, risks fighting the last war.”

The secret sauce for buying stocks right now

To demonstrate how critical earnings are, the QVG analysts took the example of OFX Group Ltd (ASX: OFX).

The share price for the currency exchange tanked 18% in just one week in January after its latest financial results.

“The update showed softness in the consumer portion of OFX’s revenues,” read the memo.

“Even minor misses, such as OFX Group [last] month, will be punished.”

The QVG team’s secret sauce in buying ASX shares this year is to seek out businesses that have a very specific set of attributes.

“We believe the job to be done then is to own the relatively small number of companies run by motivated insiders that produce growing free cash flows,” read the memo.

“If we are right on our earnings forecasts on the durable growers and pay a low enough price for the through-the-cycle cyclical growers, then 2023 ought to look a lot different to 2022.”

Two ASX shares set to grow earnings

Two examples of such ASX companies expanding their cash flows and earnings are Imdex Limited (ASX: IMD) and Hub24 Ltd (ASX: HUB).

Imdex, in fact, has the opposite month to OFX, enjoying a 13.1% boost in its share price after a well-received quarterly update.

The mining technology provider also has an acquisition in progress.

“Imdex announced a large capital raise to fund the acquisition of a complementary Norwegian business called Devico. 

“Devico is a higher margin, higher growth business than Imdex and increases the skew of earnings to higher intellectual property drilling tools from more commoditised drilling fluids.”

The QVG team admitted Imdex was not usually its cup of tea, but the current tailwinds were too hard to resist.

“We typically have little interest in commodity-exposed businesses, given their low through-cycle returns,” the memo read.

“However, Imdex is atypical in this regard. Its products have significant intellectual property, can sustain above-industry growth rates and also sustain above-industry returns on capital.”

As for Hub24, its share price remains flat for the year, but QVG absolutely loved the inward flows update released last month.

“We were — quietly — bracing ourselves for a soft flows number, given investor sentiment was awful in the December quarter and seemed to deteriorate as the quarter went on,” read the memo.

“As it turned out, Hub24 added $2.8 billion of net inflows – a great effort and one that looked even better when Netwealth Group Ltd (ASX: NWL) and Praemium Ltd (ASX: PPS) subsequently released their flows.”

This market positioning will serve them well in the coming years, according to QVG analysts.

“Part of our thesis on HUB is that they’ll grow earnings faster than revenues in the future as they benefit from scale.”

The post Fund reveals the type of ASX shares to buy for 2023, with 2 examples appeared first on The Motley Fool Australia.

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More reading

• The ASX 200 is still full of cheap shares despite this year’s surge and I’m ready to buy more
• Why Coronado Global, Mincor, OFX, and Zip shares are dropping today
• Which ASX fintech stock is hot to buy right now?
• Why HUB24, Lovisa, Redbubble, and Warrego shares are sinking today

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Hub24, Imdex, Netwealth Group, Ofx Group, and Praemium. The Motley Fool Australia has positions in and has recommended Hub24, Imdex, and Netwealth Group. The Motley Fool Australia has recommended Ofx Group and Praemium. 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 S&P/ASX All Technology Index (ASX: XTX) has incredibly rocketed 14.8% upwards in less than five weeks this year.

But if you’re looking to ride this wave, you still need to be selective about which ASX technology shares to buy.

With much economic gloom and more interest rate rises to come, investors still need to back businesses that have solid long-term prospects, rather than speculative cash burners.

With this in mind, the team at Elvest this week mentioned two tech shares in a memo to clients that are going places and are likely to reward investors for years to come:

‘Materially benefit Aussie Broadband’s margins’

The Aussie Broadband Ltd (ASX: ABB) share price has gained 15% so far this year, which the Elvest analysts attributed to NBN Co’s newly proposed wholesale pricing plans.

“Under the proposal, subject to ACCC approval, NBN Co will reduce wholesale prices for ultra-high speed tiers, where Aussie Broadband specialises.”

The Victorian company has risen to take an almost 7% share of the NBN market, admirably playing against far bigger telcos with much deeper pockets.

Aussie Broadband markets itself as a premium provider, admitting it’s not the cheapest but boasting of an all-Australian call centre and superior broadband speeds.

NBN Co’s new pricing scheme will be a huge boost to the business and its investors once it passes all the bureaucratic steps.

“The changes will materially benefit Aussie Broadband’s margins, assuming rational industry pricing thereafter.”

The Aussie Broadband share price has halved since April last year.

ASX company ‘demonstrably adding value’

Digital lotteries retailer and software maker Jumbo Interactive Ltd (ASX: JIN) has also enjoyed a happy new year.

The stock price has risen 6% since the champagne popped on new year’s day.

According to the Elvest team, the company signed a big client contract during January.

“Jumbo Interactive announced a six-year extension of its software licence agreement with leading charity operator Mater during the month,” read the memo.

“This continues a highly successful partnership between the two groups, with Jumbo Interactive demonstrably adding value for one of Australia’s most prominent healthcare focused charities.”

Despite its software operations, Jumbo’s involvement in the lotteries sector seems to have kept it somewhat shielded from the broader tech sell-off.

The stock has lost just 16.7% over the past 12 months.

Lotteries are seen to be a defensive business that provides reasonably consistent earnings through different parts of the economic cycle.

With Australia and the world expected to suffer from an economic slowdown, this defensive quality could once again come into play.

The post Tech’s back! Fund names 2 ASX shares to ride the resurgence appeared first on The Motley Fool Australia.

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More reading

• Morgans names the best ASX growth shares to buy in February
• Here are 2 excellent ASX growth shares to buy now: experts

Motley Fool contributor Tony Yoo has positions in Aussie Broadband. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Aussie Broadband and Jumbo Interactive. The Motley Fool Australia has recommended Aussie Broadband and Jumbo Interactive. 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 Friday, the S&P/ASX 200 Index (ASX: XJO) finished the week on a strong note. The benchmark index rose 0.6% to 7,558.1 points.

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

ASX 200 expected to rise

The Australian share market looks set to rise slightly on Monday despite a poor finish to the week on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 12 points or 0.15% higher this morning. On Wall Street, the Dow Jones was down 0.4%, the S&P 500 fell 1%, and the NASDAQ dropped 1.6%.

Oil prices sink

It could be a tough start to the week for ASX 200 energy shares including Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) after oil prices sank on Friday. According to Bloomberg, the WTI crude oil price was down 3.3% to US$73.39 a barrel and the Brent crude oil price fell 2.7% to US$79.96 a barrel. Oil prices fell on recession concerns.

Newcrest a takeover target?

The Newcrest Mining Limited (ASX: NCM) share price will be one to watch today amid speculation that the gold miner could be a takeover target. According to the AFR, Newcrest is rumoured to have received an early stage offer from a North American giant. Barrick Gold and Newmont are thought to be the likely suitors.

Janus Henderson downgraded

The Janus Henderson Group (ASX: JHG) share price surged higher on Friday following the release of the fund manager’s quarterly update. The team at Bell Potter now believe that its shares are close to being fully valued and have downgraded them to a hold rating with a $43.81 price target. It said: “The 12% rise in the share price since the results announcement means the expected return on the shares comes down to 10.3%, which under our ratings structure means the recommendation moves to HOLD (from buy).”

Gold price tumbles

Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could have a difficult start to the week after the gold price dropped on Friday. According to CNBC, the spot gold price fell 2.8% to $1,876.6 per ounce. A robust US jobs report sparked fears that the Federal Reserve might have to remain aggressive with its rate hikes.

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

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More reading

• Top ASX value shares to buy in February 2023
• Which ASX 200 shares are rebounding fastest in 2023?
• 20+ years of growing dividends. Why I plan to buy more of this ASX 200 stock in 2023
• Morgans names 2 high yield ASX dividend shares to buy this month
• Why is the Newcrest share price fizzling out on Friday?

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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We all love buying things on sale! And why would you pay full price for an item if you can get it at a discount?

The theory of value investing is that sometimes the market’s assessment of what a company is worth is inaccurate. And this presents opportunities for savvy bargain hunters to swoop in and buy quality ASX shares for less than their true value.

But, naturally, the key to successful value investing is learning to differentiate between truly great-value companies and those that may not be as cheap as they appear.

So, we asked our Foolish writers which ASX shares they reckon have been mispriced by the market and offer compelling buying for value investors in February. Here is what they said:

6 best ASX value shares for February 2023 (smallest to largest)

Adore Beauty Group Ltd (ASX: ABY), $104.01 million

Temple & Webster Group Ltd (ASX: TPW), $681.14 million

HomeCo Daily Needs REIT (ASX: HDN), $2.8 billion

Metcash Limited (ASX: MTS), $4.0 billion

Whitehaven Coal Ltd (ASX: WHC), $7.31 billion

Woodside Energy Group Ltd (ASX: WDS), $67.65 billion

(Market capitalisations as at market close on 3 February 2023)

Why our Foolish writers love these ASX value stocks

Adore Beauty Group Ltd

What it does: Adore Beauty claims to be the leader of online beauty retailing in Australia. It sells around 12,000 products from more than 270 brands. The company has recently launched two of its own private brands – Viviology and AB Labs.

By Tristan Harrison: I think this ASX All Ords share now looks great value after falling 75% since the beginning of 2022.

In the first quarter of FY23, returning customers increased by 14% year over year, and were up 85% over two years. The business is growing sales numbers through its app, and continues to onboard more brands (such as Dior).

Adore is expanding into New Zealand and is also working on delivering scale benefits, which should help with earnings before interest, tax, depreciation and amortisation (EBITDA) margin expansion over time.

I also think consumers will continue increasing the amount they shop online over time, which should be a tailwind for Adore Beauty in the coming years.

Motley Fool contributor Tristan Harrison does not own shares in Adore Beauty Group Ltd.

Temple & Webster Group Ltd

What it does: Temple & Webster is Australia’s leading online furniture and homewares retailer.

By James Mickleboro: Although it has rebounded strongly from its lows, I still see a lot of value in the Temple & Webster share price for patient, long-term investors. That’s because, despite this rebound, the online retailer’s shares are still trading at an almost 50% discount to its long-term-average-enterprise value to gross-profit multiple.

I believe this makes Temple & Webster shares great value given the company’s exceptionally strong, long-term growth potential, thanks to its leadership position in a retail category that is still in the early stages of shifting online.

Goldman Sachs agrees and is forecasting a +22% 10-year EBITDA compound annual growth rate (CAGR).

Motley Fool contributor James Mickleboro does not own shares in Temple & Webster Group Ltd.

HomeCo Daily Needs REIT

What it does: HomeCo Daily Needs is a real estate investment trust (REIT) holding properties that house the retailers and services Aussies turn to in their day-to-day lives. Its $4.6 billion portfolio boasts a 99% occupancy rate with Woolworths Group Ltd (ASX: WOW), Wesfarmers Ltd (ASX: WES), and Coles Group Ltd (ASX: COL) among its largest tenants.

By Brooke Cooper: The HomeCo Daily Needs unit price tumbled 19% over the course of 2022 despite the REIT posting a 30% lift in funds from operations last financial year. While the stock has recovered slightly in 2023, I believe it still offers great value.

It currently boasts a 6.1% dividend yield and a price-to-earnings (P/E) ratio of 10.96, according to CommSec data.

But it’s not just those figures catching my eye. I like the strategic positioning of many of this ASX 200 stock’s assets and its exposure to discretionary retail.

Morgans also has an add rating and a $1.52 price target on the REIT – a potential 10.5% upside at the time of writing.

Motley Fool contributor Brooke Cooper does not own units in HomeCo Daily Needs REIT.

Metcash Limited

What it does: Metcash is the supermarket and hardware distribution company behind the famous chains IGA, Mitre 10 and Bottle-O.

By Sebastian Bowen: When it comes to ASX 200 consumer staples shares, Metcash is often overlooked in favour of its peers like Woolworths. But I think this has resulted in some significant value.

Metcash shares currently trade on an earnings multiple far lower than either Woolworths or Coles. This has resulted in a substantial, fully-franked dividend yield of more than 5% today.

Back in December, Metcash announced that it had grown revenue by almost 8%, profit by more than 9% and dividends by 9.5%. I think these are all great signs and prove that Metcash is still a compelling value share in February 2023.

Motley Fool contributor Sebastian Bowen does not own shares in Metcash Limited.

Whitehaven Coal Ltd

What it does: ASX 200-listed Whitehaven Coal explores for and produces high-quality thermal coal (primarily used to generate electricity) and metallurgical coal (primarily used for steel making).

By Bernd Struben: The Whitehaven share price has slipped 11% so far in 2023, making it a top ASX value stock, in my opinion. Shares hit all-time highs in October but have dipped as coal prices retraced from their own records. Yet, I expect global demand for quality Aussie coal to remain strong as the Ukraine war drags on.

And don’t forget the record half-year Whitehaven reported last month, with an all-time high of $2.6 billion in earnings before interest, tax, depreciation and amortisation (EBITDA) over six months.

Whitehaven pays a trailing dividend yield of 5.8%. The share price is up 202% over 12 months.

Motley Fool contributor Bernd Struben does not own shares in Whitehaven Coal Ltd.

Woodside Energy Group Ltd

What it does: Woodside is an Australian oil and gas company and the largest energy business listed on the ASX. It is a global, top-10 producer of liquefied natural gas (LNG) and hydrocarbon.

By Bronwyn Allen: It might seem odd to pick an ASX share trading at close to its 52-week high as a value buy. But this oil and gas giant is only trading on a price-to-earnings (P/E) ratio of 8.4!

Woodside is also riding a wave of high commodity prices right now. It’s just reported record full-year production and revenue for 2022, beating its own production guidance with full-year revenue up 142% compared to 2021.

This reflects not only high oil and gas prices but also the value of Woodside’s merger with the petroleum business of BHP Group Ltd (ASX: BHP). This was finalised on 1 July 2022. So, these full-year results represent only half a year’s worth of production from these new assets.

That’s what has me excited about Woodside’s future earnings potential. It’s also a good dividend payer, and the company has hinted at special dividends and share buy-backs post-merger, too.

Motley Fool contributor Bronwyn Allen owns shares in Woodside Energy Group Ltd.

The post Top ASX value shares to buy in February 2023 appeared first on The Motley Fool Australia.

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More reading

• How to create a million-dollar ASX share portfolio in two decades
• A new bull market is coming: 3 ASX shares I’d load up on before it gets here
• Did you buy $1,000 of Whitehaven shares 10 years ago? If so, here’s how much passive income you’ve received
• 5 things to watch on the ASX 200 on Friday
• Up 37% in 12 months: Here’s why this fundie still sees value in Woodside shares

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Temple & Webster Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group. The Motley Fool Australia has positions in and has recommended Coles Group and Wesfarmers. The Motley Fool Australia has recommended Adore Beauty Group, Metcash, and 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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The ASX share market can be the ticket to becoming a millionaire in two decades — or even quicker if things go well.

Now, I’m not about to say that investors should jump in and buy the next hottest thing to get rich. That has the potential to turn out badly.

However, investors may be wondering about the best way to become wealthy. Personally, I prefer investing in ASX shares because of how little groundwork is required, and unlike property investment, you don’t have to take on piles of debt to participate.

These days, people can get a decent return from savings accounts. But I don’t think they’re the best choice for growing wealth. Saving is good, but it could take a lot of money to become a millionaire through a savings account.

Let’s say we use a savings account with an interest rate of 3.5%. Someone would need to save around $3,000 per month to get to approximately $1 million after 20 years.

How ASX shares can accelerate wealth

Here’s an example of how ASX shares can produce good returns for investors.

At 31 December 2022, Vanguard Australian Shares Index ETF (ASX: VAS) had returned an average of 8.5% per annum over the prior 10 years. The average has now increased given the exchange-traded fund’s (ETF) recent performance, up around 9% since the start of 2023.

If someone put $2,900 per month into the ASX share market and that investment returned an average of 9% per annum over the next 20 years, this would become $1.78 million.

But, we’re not aiming for $1.78 million.

To get to $1 million, we’d only need to invest $1,650 per month if our investments returned 9% per annum.

What to look out for

The ASX share market is a good place to invest. However, it’s dominated by large bank and mining shares such as Commonwealth Bank of Australia (ASX: CBA), ANZ Group Holdings Ltd (ASX: ANZ), BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO).

These giants are very good at what they do, but they’re already huge, so I’m not sure how much more some of these names can grow.

Smaller companies or those targeting the global economy could have better growth potential over the long term. They have a longer growth runway and more room to re-invest.

I think we can see this with the returns generated by Vanguard MSCI Index International Shares ETF (ASX: VGS), which has returned an average of 10.6% since its inception in November 2014. If this ETF were to achieve the same returns over the next two decades, with its portfolio of global shares, investors would only need to invest $1,370 per month.

Which investment options could outperform?

I believe that there are some ASX growth share investments that can achieve stronger returns than 10%.

Smaller businesses could deliver a lot of growth. I think names like Airtasker Ltd (ASX: ART), Temple & Webster Group Ltd (ASX: TPW), Adore Beauty Group Ltd (ASX: ABY), Lovisa Holdings Ltd (ASX: LOV) and Healthia Ltd (ASX: HLA) could grow a lot over the next decade.

But, there are also some other options that could deliver outperformance. ETFs such as VanEck Morningstar Wide Moat ETF (ASX: MOAT), VanEck MSCI International Quality ETF (ASX: QUAL) and Betashares Nasdaq 100 ETF (ASX: NDQ) could deliver good growth from the current valuations.

The post How to create a million-dollar ASX share portfolio in two decades appeared first on The Motley Fool Australia.

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More reading

• Buying ASX shares as a beginner? Here are 3 things I wish I’d known
• A new bull market is coming: 3 ASX shares I’d load up on before it gets here
• Why did the Vanguard Australian Shares Index ETF lag the ASX 200 in January?
• Need passive income? Turn $5,000 into $800 every month
• Goldman reveals the ASX shares that could surprise to the upside (and downside) this reporting season

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 BetaShares Nasdaq 100 ETF, Healthia, Lovisa, Temple & Webster Group, and Vanguard Msci Index International Shares ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group and Airtasker. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Adore Beauty Group, Healthia, Lovisa, Temple & Webster Group, VanEck Morningstar Wide Moat ETF, and Vanguard Msci Index International Shares 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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