The S&P/ASX 200 Index (ASX:XJO) bank share sector has numerous examples of high-yielding names.

But, some are expected to produce more dividend income than others, in yield terms.

While dividend income isn’t the only thing we should pay attention to, it can be particularly rewarding from Australian companies because of the yield-boosting effect of franking credits.

With that in mind, the higher-yielding ones could be particularly enticing.

ANZ Group Holdings Ltd (ASX: ANZ)

ANZ is the biggest bank on this list with a market capitalisation of around $75 billion, according to the ASX.

One of the beneficial factors for banks is that they trade on low price/earnings (p/e) ratios, which boosts the dividend yield on offer.

Commsec numbers suggest that ANZ shares could pay an annual dividend per share of $1.54. At the current ANZ share price, this translates into a forward grossed-up dividend yield of 8.9%.

Not only is ANZ hoping to pay a good dividend to shareholders, but it also wants to grow profit by acquiring the banking division of Suncorp Group Ltd (ASX: SUN), which will add scale and allow the ASX 200 bank share to better compete in Queensland.

At the current ANZ share price, it’s valued at 10x FY23’s estimated earnings, according to Commsec.

Bank of Queensland Limited (ASX: BOQ)

BOQ has a market capitalisation of $4.6 billion, according to the ASX.

This regional bank may be a fraction of the size of ANZ, but its potential dividend yield is even bigger.

Commsec numbers suggest that BOQ could pay an annual dividend per share of 52 cents. This equates to a projected grossed-up dividend yield of 10.6%.

The banking sector is currently benefiting from the rising interest rate environment. Banks are passing on interest rates quicker to borrowers than to savers, which is helping push up lending profitability. This can enable bigger profits and larger dividends for the ASX 200 bank shares.

At the current BOQ share price, it is valued at 9x FY23’s estimated earnings according to Commsec.

Bendigo and Adelaide Bank Ltd (ASX: BEN)

Bendigo Bank is another of the smaller but still sizeable banks in Australia. According to the ASX, it has a market capitalisation of $5.7 billion.

The ASX 200 bank share is expected to generate more profit in FY23, thanks to a mix of lending growth and stronger profitability due to the higher interest rates.

However, there is a danger for all banks that some households could run into trouble if they can’t afford the much higher interest rates.

But, at the moment, the Bendigo Bank share price is valued at 11x FY23’s estimated earnings with a possible grossed-up dividend yield of 8.5%.

The post Dividends, dividends, dividends! 3 ASX 200 bank shares forecasting yields over 8% appeared first on The Motley Fool Australia.

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More reading

• What could we expect for ASX 200 bank shares this earnings season?
• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today
• The Suncorp share price is on fire today. Should you buy?
• Here are the 3 most heavily traded ASX 200 shares on Thursday

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 Bendigo And Adelaide Bank. 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 Whitehaven Coal Ltd (ASX: WHC) share price is on the move on Friday.

At the time of writing, the coal miner’s shares are up 5% to $9.38.

This follows the release of the company’s quarterly update, which revealed another three months of strong cash generation.

Whitehaven share price charges higher on record half

For the three months ended 31 December, Whitehaven Coal delivered managed run-of-mine (ROM) production of 4.8Mt, up 21% on the previous quarter and 50% on prior corresponding period.

This underpinned managed sales of produced coal of 4.3Mt, up 16% on the September quarter and 21% on the prior corresponding period.

And while prices softened a touch to an average of A$527 per tonne for the quarter, down from A$581 per tonne in the previous quarter, this was still more than double what it was commanding a year earlier. As a result, the company delivered a record average first half coal price of A$552 per tonne.

And with total managed sales coming in at 8Mt for the half, management revealed that the company expects to post record half year EBITDA of $2.6 billion. This will be more than quadruple the $0.6 billion reported in the prior corresponding period.

Combined with its strong cash generation, the company finished the half with a net cash position of $2.5 billion.

Management commentary

Whitehaven Coal’s CEO, Paul Flynn, was pleased with the company’s performance given the wet weather. He said:

During the December quarter, we maintained strong operational performance at our Narrabri underground mine which helped offset the impact of continued wet weather on volumes from our open cut mines.

Strong ongoing demand for high CV coal, coupled with supply constraints, underpinned high prices, a solid December quarter and an exceptional first half result. We generated $2.5 billion of cash from operations in the half year, including $1.0 billion in the December quarter. At the end of December, we held a net cash position of $2.5 billion.

The Company is performing well and delivering strong returns for our shareholders including buying back $593 million of shares in the first half of FY23. Energy security remains a key imperative for our customers throughout Asia, and we are continuing to supply high quality coal through the energy transition for the benefit of all stakeholders.

Outlook

No change has been made to the company’s full year guidance.

Management advised that it remains on track to deliver within the range of its overall production, sales, and cost guidance for FY 2023.

This includes managed ROM coal production of 19 to 20.4Mt, managed coal sales of 16.5Mt to 18Mt, and unit costs of $95 to $102 per tonne.

The post Whitehaven Coal share price charges higher on record half appeared first on The Motley Fool Australia.

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More reading

• 3 ASX 200 companies brimming with cash right now
• Why is the Whitehaven share price flaming out today?
• Can ASX 200 coal shares really deliver dividend yields of over 10% in FY24?
• Attention income investors! These 7 ASX 200 dividend shares are projecting yields of 7%+ in FY24
• Burning hot: The outlook for ASX 200 energy shares in 2023

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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It’s safe to say that passive income-focused investors are spoilt down under. The S&P/ASX 200 Index (ASX: XJO) – home to many of Australia‘s most influential companies – also houses dozens of dividend-paying shares.

In fact, 84% of ASX 200 companies that released earnings in the August 2022 reporting season paid a dividend, according to CommSec data.

But there’s one stock I would pay particular attention to if I were seeking $1,000 of annual passive income for a relatively small weekly investment.

The ASX 200 coal share boasting an 11% dividend yield

Recently minted ASX 200 share Coronado Global Resources Inc (ASX: CRN) has likely pricked the ears of income investors over the last 12 months.

The metallurgical coal producer’s profits rocketed a huge 685% year-on-year in the first half of 2022, reaching US$562 million. Meanwhile, its average realised coal price surged 193% to US$292.80 a tonne amid soaring demand for the black rock.

Such whopping profits saw the ASX 200 share payout two ordinary dividends and three special dividends – worth a grand total of 59.75 cents.

Of course, one can’t bank on special dividends in the future. So, the company’s ordinary offerings came in at a combined 23.05 cents last year.

And its payouts have been tipped to grow in the coming years.

How I’d aim for $1,000 of passive income with $97 a week

Analyst consensus forecasts Coronado to pay 24.1 cents per share next financial year, as my Fool colleague James reports.

At that rate, an investor would need to buy 4150 shares in the ASX 200 coal miner to bank $1,000 of passive income annually.

Such a parcel would set them back $8,756.50 at the stock’s current share price of $2.11.

Now, it’s unlikely I could afford to invest such a hefty sum right away. Fortunately, it doesn’t all need to be invested in a single transaction.

Instead, I’d likely aim to invest $97 a week in the ASX 200 share, thereby reaching my targeted stake by October 2024 if I started today.

More optimistically, Bell Potter predicts Coronado will pay out 45.5 cents per share in financial year 2024.

At that rate, I would only need 2,198 shares – worth $4,638 – to receive $1,000 of annual passive income next fiscal year. Such a stake would likely take me just under a year to build if I invested $97 a week.

No doubt the share price will move in that time. However, sticking to my weekly plan should help mitigate any ups and downs.

Risk versus reward

Like most mining stocks, Coronado’s earnings are largely dependent on commodity prices. Thus, the company doesn’t have all that much control over its future profits and, in turn, its dividends.

For that reason, I’d argue it carries more risk than some other shares on the ASX 200.

And, of course, no investment can be guaranteed to provide returns, be they passive income or share price gains. Additionally, past performance doesn’t guarantee future performance.

The post I’d put $97 a week into this ASX 200 share for $1,000 a year in passive income appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Will Lake Resources become profitable in 2023?
• Can income investors bank on CBA growing its dividend yield by 18%?

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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The S&P/ASX 200 Index (ASX: XJO) mining shares saw as many ups and downs as a rollercoaster last year. Hence, investors may be wondering what 2023 has in store after a crazy year.

Just look at the BHP Group Ltd (ASX: BHP) share price graph below. Investor sentiment swung all over the place.

Some ASX blue chips don’t see that level of volatility, such as Telstra Group Ltd (ASX: TLS). Deep declines give investors the opportunity to buy mining leaders at a much cheaper price.

But, how are ASX 200 mining shares going to perform from here?

Firstly, I want to acknowledge the difficulty of trying to forecast what resource prices are going to do. With how linked the company share prices are to the resource prices, it’s hard to judge.

Predicting the resources sector may be a fool’s errand, but I’m a Fool – so here are my thoughts.

Big dividends

The current state of affairs seems to be pretty good for ASX 200 mining shares. The iron ore price is recovering, and so is the copper price. Indonesia is looking to ban exports of some key commodities like nickel, which could boost the Australian miners involved in those commodities, such as BHP.

I think the dividends from names like BHP, Rio Tinto Limited (ASX: RIO), Fortescue Metals Group Limited (ASX: FMG) and South32 Ltd (ASX: S32) will still be very sizeable, though not as big as a couple of years ago.

ASX lithium shares like Pilbara Minerals Ltd (ASX: PLS) and Mineral Resources Limited (ASX: MIN) could also pay decent dividends.

Strong commodity prices

With China being a key purchaser of many commodities and the fact that lockdowns have ended in the country is a very positive step for a number of resources. I think that’s the main reason why resource prices, like iron, have already jumped.

Will the rally keep going? Ultimately, time will tell. If I had to bet on it, I’d guess it will rise a bit higher from here – but not a lot higher – because there could be a bit of a lag between the end of lockdowns, and the stimulus and unleashed Chinese consumer fully flowing through the economy. It could take time before the 2023 peak for iron ore demand from China is reached.

While the global economy may be facing a difficult situation, with a potential recession after higher interest rates, I think the outlook is good for many commodities.

I think that demand for decarbonising resources, like lithium, copper and nickel, will be resilient as I believe the world will keep investing for a greener future, even if global GDP growth isn’t firing on all cylinders.

ASX coal shares continue to benefit from the strong coal prices following the Russian invasion of Ukraine. I think this will mean ongoing good dividends for the rest of the year from coal miners, and possibly into 2024 as well.

Foolish takeaway

As long as the demand from China remains solid, I think it’s going to be a good year for many of the ASX 200 mining shares. However, at these elevated levels, I’m not sure there are many miners that look like a steal right now.

The post My top predictions for ASX 200 mining shares in 2023 appeared first on The Motley Fool Australia.

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More reading

• Pilbara Minerals share price on watch following Q2 update
• 2 December winners ready to rocket further in 2023: expert
• 2 December losers ready to turn it around in 2023: expert
• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Tristan Harrison has positions in Fortescue Metals 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 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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The Pilbara Minerals Ltd (ASX: PLS) share price will be on watch on Friday.

This follows the release of the lithium giant’s quarterly update after the market close yesterday.

Pilbara Minerals share price on watch

For the three months ended 31 December, Pilbara Minerals delivered a 10% quarter on quarter increase in spodumene concentrate production to 162,151 dry metric tonnes (dmt).

This was achieved with a unit operating cost of A$579 per dmt, which was down 5% from the previous quarter and lower than its full year guidance range.

Pilbara Minerals shipped 148,627 dmt of spodumene concentrate during the period (up 8% quarter on quarter) at an average realised sales price of US$5,668 per dmt. The latter was up 33% from the last quarter.

The higher pricing was achieved from a combination of stronger market pricing and improved pricing outcomes following the completion of price reviews with major offtake customers. These new prices came into effect in December, allowing the company to benefit from them for one month during the quarter.

This saw Pilbara Minerals record spodumene concentrate sales of A$1.135 billion for the period, which led to the company ending the period with a ballooning cash balance of A$2.226 billion, up from $1.375 billion at the end of September. No wonder it plans to pay its maiden dividend this year!

Guidance

No changes have been made to its guidance at this stage.

However, management stated that it “expects to provide any update to its FY2023 Guidance with the release of its FY2023 half year result in late February 2023.”

As things stand, it is still targeting production of 540,000 to 580,000 dmt with a unit operating cost of A$635 to A$700 dmt.

The post Pilbara Minerals share price on watch following Q2 update appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Friday
• How much profit will Pilbara Minerals shares make in 2023?
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Can Pilbara Minerals shares really deliver an 8% dividend yield in 2023?

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 are quickly barrelling towards yet another ASX earnings season in February. The landslide of reports will give investors a peek into how prepared Aussie companies are for possible economic weakness. An area that will no doubt attract plenty of interest is the bank shares of the S&P/ASX 200 Index (ASX: XJO).

The big four banks embraced multiple interest rate rises throughout the second half of 2022. Swiftly increasing rates on loans while gradually upping rates on deposits have helped the banks secure bigger net interest margins. In turn, ASX bank shares are in a far better position than six months ago:

• Commonwealth Bank of Australia (ASX: CBA) up 13.1%
• Westpac Banking Corp (ASX: WBC) up 16.7%
• National Australia Bank Ltd (ASX: NAB) up 7.1%
• ANZ Group Holdings Ltd (ASX: ANZ) up 13.4%

But, could the music be about to stop for these banking beasts?

Fortunately, the biggest of the US bank shares released their latest quarterly results last week. This gives us the chance to get a sense of what might be ahead of us and our local counterparts.

Easy money comes and goes

The biggest of the big spilled the beans last week, with JPMorgan Chase & Co (NYSE: JPM), Bank of America Corp (NYSE: BAC), Citigroup Inc (NYSE: C), and Wells Fargo & Co (NYSE: WFC) providing their latest numbers.

Below is a brief snapshot of how the bank’s fourth-quarter numbers panned out.

Metric	JPMorgan	Bank of America	Citigroup	Wells Fargo
Revenue growth	17%	11%	6%	-6%
Earnings growth	6%	1%	-25%	-51%
Worst-performing segment	Corporate and investment banking	Global markets	Legacy/franchises	Wealth and investment management
Best-performing segment	Commercial banking	Global banking	Personal banking and wealth management	Commercial banking
Credit loss provision	$2.3 billion	$1.1 billion	$1.88 billion	$1.0 billion
Increase in provision (QoQ)	49%	23%	38%	22%

There are three key takeaways from the above summary in my view…

Firstly, revenue growth was fairly solid — aside from Wells Fargo — with all the major banks reporting a benefit from increased net interest income. We’ll likely see a similar trend from ASX 200 bank shares this reporting season following the RBA’s actions.

Secondly, Aussie banks with more exposure to markets and investment banking could come under pressure. In terms of equity investments, it will depend on what the banks are invested in. However, the more ‘risk-on’, the more detrimental it might be. Wells Fargo took a $1 billion impairment charge mostly tied to venture capital.

Furthermore, investment banks such as Morgan Stanley (NYSE: MS) and Goldman Sachs Group Inc (NYSE: GS) suffered brutal profit falls. The lack of market activity in the subdued environment largely contributed to the lacklustre results. This is an area that our own Macquarie Group Ltd (ASX: MQG) is exposed to — making it one to keep an eye on.

The final takeaway is the unnerving increases in credit loss provisions across the board. We could see similar this season if ASX 200 banks are likewise anticipating a weaker outlook.

When do ASX bank shares report?

At this stage, we know that Macquarie will possibly be one of the first with its third quarter trading update on 7 February. From there, CBA and NAB will follow up back-to-back on 15 and 16 February.

In addition, we might see trading updates from Westpac and ANZ sometime in February. However, neither has provided a specific date yet on their financial calendars.

The post What could we expect for ASX 200 bank shares this earnings season? appeared first on The Motley Fool Australia.

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• Own NAB shares? Now you also own crypto
• 2 high-dividend shares to buy today for early retirement
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• Are NAB shares a good investment ahead of earnings season?
• These ASX dividend shares have been tipped as buys by analysts

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Bank of America is an advertising partner of The Ascent, a Motley Fool company. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Mitchell Lawler has positions in Commonwealth Bank Of Australia and Macquarie Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bank of America, Goldman Sachs Group, and JPMorgan Chase. The Motley Fool Australia has recommended Macquarie Group and Westpac Banking. 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 waiting to pounce on ASX shares that have turned their fortunes around after a terrible 2022?

Why wait when there are already some stocks that fit that bill exactly?

Glenmore Asset Management portfolio manager Robert Gregory revealed two such ASX shares in a memo to clients this week.

Both his examples soared in value over December, but Gregory is convinced that the party has only just started.

Back from the wilderness

Most investors who have held Retail Food Group Ltd (ASX: RFG) in the past would have likely long expunged it from their portfolios.

The stock price, over the past five years, has lost an eye-watering 96% of its value.

The franchisor for brands like Donut King and Michel’s Patisserie had been in deep trouble with legal and regulatory issues arising from its relationships with its franchisees.

But then in December, the bleeding suddenly stopped. The share price amazingly rose 21.2%.

“Late in the month, RFG announced the resolution to the long running investigation by the ACCC into misconduct by previous management,” said Gregory.

“The outcome was that RFG must pay $8 million to franchisees that were the subject of the misconduct. In addition, RFG agreed to waive $1.8 million of debt to certain franchisees.”

Gregory reckoned that the penalties were “broadly in line with investor expectations”.

The case had been “a major headwind” for Retail Food with an uncertain timeframe for resolution. But Gregory’s team long believed the outcome would not be as severe as how dramatic the decline in share price suggested.

“RFG had been trading on a FY23 PE of ~7x before this announcement,” he said.

“With the ACCC investigation now behind it, we believe RFG is well positioned to grow earnings from multiple internal growth initiatives, as well as being better placed to attract new franchisees and commercial partners, which has been impacted by the shadow of the ACCC investigation.”

The December stock price surge now has it trading at a P/E ratio of 10, but that’s still dirt cheap, as far as Gregory is concerned.

“We continue to see [it] as attractive, given [the] quality of its earnings base and growth prospects.”

Still ‘cheap valuation’ even after tripling stock price

Thermal coal producer Stanmore Resources Ltd (ASX: SMR) enjoyed an 8.1% rise last month.

There were no official announcements from the company to the ASX, but Gregory has a theory.

“The stock was likely assisted by the +21% rally in the benchmark hard coking coal price, as well as growing investor awareness of Stanmore Resources’ material free cash flow generation and cheap valuation.”

In November, the Glenmore team visited Stanmore’s site in Queensland.

The trip assured them that the stock is worth holding onto, even after a phenomenal 235% return over the past 12 months.

“The assets acquired from BHP Group Ltd (ASX: BHP) were operating well, with clear scope to be expanded, albeit any material production increases are likely to be in the medium term.”

The post 2 December winners ready to rocket further in 2023: expert appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• BHP share price higher amid record first half iron ore production
• Should I buy BHP shares in 2023?
• 5 things to watch on the ASX 200 on Thursday
• 4 ASX All Ordinaries shares hitting new 52-week highs 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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If you’re looking for dividend shares to buy, then it could be worth listening to what analysts at Morgans are saying about the two listed below.

These dividend shares are on the broker’s best ideas list and are forecast to provide attractive dividend yields in the near term.

Here’s what you need to know about them:

QBE Insurance Group Ltd (ASX: QBE)

The first ASX dividend share to consider buying is insurance giant QBE.

Morgans currently has an add rating and $15.05 price target on this insurance giant’s shares.

The broker believes that QBE has done relatively well in FY 2022 given the very volatile year for weather. In light of this, it remains positive and believes the company is well-placed to earnings growth.

It highlights that “tailwinds such as rising bond yields, premium rate increases and cost out will drive an improved earnings profile for QBE over the next few years.”

In respect to dividends, the broker is expecting a 40 cents per share dividend in FY 2022 and then a 76 cents per share dividend in FY 2023. Based on the latest QBE share price of $13.44, this equates to yields of 3% and 5.7%, respectively.

Wesfarmers Ltd (ASX: WES)

Another ASX dividend share that Morgans has on its best ideas list is Wesfarmers.

Wesfarmers is the conglomerate behind a range of businesses such as Bunnings, Covalent Lithium, Kmart, and Officeworks.

Morgans believes that Wesfarmers’ retail businesses are well-placed in the current environment due to their value offering. It points out that “Kmart is well-placed to benefit with the average price of an item at around $6-7.”

In respect to dividends, the broker is forecasting fully franked dividends per share of $1.82 in FY 2023 and $1.89 in FY 2023. Based on the current Wesfarmers share price of $49.32, this will mean yields of 3.7% and 3.8%, respectively.

Morgans has an add rating and $55.60 price target on Wesfarmers’ shares.

The post 2 of the best ASX dividend shares to buy right now: analysts appeared first on The Motley Fool Australia.

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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 positions in and has recommended Wesfarmers. The Motley Fool Australia has recommended Accent 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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Investors read every day about ASX shares that have risen spectacularly… or fallen off a cliff.

But what they don’t hear so much about are the stocks that have just gone nowhere. Not even for the most patient long-term investor.

It might be that the business is very cyclical. Or the stock has an image problem, where past performance or trauma has just put potential investors off buying into it.

But if circumstances for the company have changed, it could be a golden buying opportunity before the rest of the market wakes up.

Airlie Funds portfolio manager Emma Fisher reckons she’s found exactly that, revealing a stock that she bought just within the past month:

Fisher has no fear about this business

Building materials maker CSR Limited (ASX: CSR) has disappointed investors in recent times, with its share price only rising 9.18% over the past five years.

The lack of capital growth, Fisher said in an Airlie video, is because investors are always nervous about the cyclical nature of its clientele — the housing market.

“You might be thinking, ‘Emma, you idiot, you’re buying a building products company. Haven’t you seen that building activity is about to fall off a cliff?’”

But this does not worry her one bit.

This is because she and her team feel like the business is now at a point where its fortunes are less exposed to the volatility of the housing sector.

“Everyone’s really worried about the cycle. No one wants to touch it,” said Fisher.

“But if you work through it, it’s got a lot of reasons why it’s going to be quite a resilient business.”

The landscape has changed for CSR

The first reason why the Airlie team thinks CSR will be less volatile is that the dynamics of the markets that it competes in have changed somewhat recently.

“Their worst business was their glass business, and they’ve exited that,” said Fisher.

“They’ve had Boral Limited (ASX: BLD) exit as a competitor in two of their main businesses — plasterboard and bricks.”

Not having to compete with Boral is significant relief for CSR, as the rival was famous for undercutting.

The second reason why Fisher is bullish on CSR is the significant “surplus” real estate holdings that the company possesses.

“They own a big chunk of land in western Sydney, for example, and they’ve had that property  independently valued at $1.5 billion. That compares to [CSR’s] market cap of $2.2 billion,” she said.

“You’re actually not paying that much for the building products part of the business.”

These assets mean that CSR’s balance sheet is net cash, which Fisher favours in turbulent times.

And therein lies the opportunity. CSR’s current stock price reflects the fear of volatility, but Fisher reckons that sentiment is no longer justified.

“While it’s still cyclical, we think a lot of that cyclicality might be smoothed from here.”

The post I just bought this ASX share that ‘no one wants to touch’: fundie appeared first on The Motley Fool Australia.

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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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To say that the Adairs Ltd (ASX: ADH) share price has been heavily sold off of late is a bit of an understatement.

Adairs shares have had a fairly depressing 18 months or so. Back in mid-2021, stocks in the company were flying, having just hit a new record high of almost $5 a share. Yesterday, the ASX 300 retailer closed at $2.80 a share. That’s a plunge of more than 40% from those highs we saw just a year and a half ago:

But have Adairs shares been oversold? That’s a very different question. Clearly, the market thought that they were oversold, given the recovery Adairs has embarked upon of late.

Back in June last year, Adairs shares hit a new 52-week low of $1.65 each. At the share price of $2.80 that the company closed at yesterday, Adairs is almost 70% above that low.

But are Adairs shares still oversold and thus have further room to climb?

Is ASX 300 retailer Adairs still undersold today?

Well, one ASX broker thinks so. As my Fool colleague James covered yesterday, Adairs has been rated as a buy by ASX broker Jarden. Jarden has given the homewares retailer a 12-month share price target of $3.28. That would give investors a further upside of 17% from today’s pricing if realised.

Jarden liked what it saw in Adairs’ annual general meeting last year, in which the company announced that its sales over the first four months of FY2023 were up by 7.6% compared to the same period in FY2022.

The broker is also expecting Adairs to jack its dividends back up over the next two financial years. Adairs forked out 18 cents per share in FY2022 (down from 24 cents in FY2021), which Jarden expects to be repeated in FY2023.

However, by FY2024, the broker reckons Adairs will be in a position to fork out 22 cents per share.

Today, Adairs has a trailing, fully franked dividend yield of 6.43%. But if the company does pay out 22 cents per share in FY2024, it would have a forward yield of 7.86% at the current share price. That could well make this ASX 300 dividend share worth buying at today’s pricing.

The post One oversold ASX 300 dividend share (with a 6% yield) to buy now appeared first on The Motley Fool Australia.

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

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