It has been another busy week for Australia’s top brokers. This has led to the release of a large number of broker notes.

Three broker buy ratings that you might want to know more about are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Domino’s Pizza Enterprises Ltd (ASX: DMP)

According to a note out of UBS, its analysts have retained their buy rating on this pizza chain operator’s shares with a trimmed price target of $78.00. The broker has reduced its earnings per share estimates to reflect dilution from Domino’s capital raising. However, it remains bullish on the investment opportunity here and was pleased to see management reaffirm guidance for FY 2023. The Domino’s share price is trading at $66.04 on Friday.

Rio Tinto Ltd (ASX: RIO)

A note out of Morgan Stanley reveals that its analysts have retained their overweight rating and $121.00 price target on this mining giant’s shares. This follows the release of the company’s investor day update. Morgan Stanley was pleased with the update and particularly the miner’s focus on technology. It also notes that the top end of Rio Tinto’s iron ore shipments guidance for FY 2023 was in line with its own estimate. The Rio Tinto share price is fetching $111.63 this afternoon.

Temple & Webster Group Ltd (ASX: TPW)

Analysts at Goldman Sachs have retained their buy rating but trimmed their price target on this online furniture retailer’s shares to $7.50. While the broker has reduced its earnings estimates slightly following Temple & Webster’s trading update, it remains bullish. The broker believes that the company has one of the strongest long term structural growth opportunities under coverage and forecasts a 22% EBITDA CAGR over the next 10 years. The Temple & Webster share price is trading at $5.02 on Friday.

The post Brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

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More reading

• Why Coronado, IDP, Mayne Pharma, and Rio Tinto shares are dropping today
• Rebound: I’m finding cheap ASX shares to buy before it’s too late!
• Why Appen, Evolution Mining, Rio Tinto, and Xero shares are racing higher
• Why CogState, Downer, Temple & Webster, and Woodside shares are dropping
• Domino’s share price halted amid $165 million cap raise

Motley Fool contributor James Mickleboro has positions in Domino’s Pizza Enterprises. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Temple & Webster Group. The Motley Fool Australia has recommended Domino’s Pizza Enterprises 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 S&P/ASX 200 Index (ASX: XJO) is on course to end the week in the red. In late trade, the benchmark index is down 0.65% to 7,306.8 points.

Four ASX shares that are not letting that hold them back today are listed below. Here’s why they are charging higher:

Bigtincan Holdings Ltd (ASX: BTH)

The Bigtincan share price is up 12% to 76.5 cents. Investors have been buying this sales enablement automation platform provider’s shares after it received a takeover approach. Bigtincan has received an unsolicited, indicative, conditional and non-binding proposal from SQN Investors to acquire it for $0.80 cash per share. This represents a 17.6% premium to the where the tech share ended yesterday’s session.

Bubs Australia Ltd (ASX: BUB)

The Bubs share price is up 3% to 32 cents. This is despite the infant formula company’s shares copping a downgrade from Citi this morning. The broker has downgraded Bubs’ shares to a hold rating and slashed their price target by over 50% to 32 cents. Citi suspects that the company’s US sales are softer than expected.

St Barbara Ltd (ASX: SBM)

The St Barbara share price is up almost 11% to 69.2 cents. This follows a strong rise by the gold price last night. Investors appear to be betting that interest rates won’t rise as much as feared, which would be good news for gold. St Barbara isn’t the only gold miner rising today. The S&P/ASX All Ordinaries Gold index is up 2.3% this afternoon.

Warrego Energy Ltd (ASX: WGO)

The Warrego Energy share price is up almost 10% to 28.5 cents. Investors have been buying this energy explorer’s shares this week after a bidding war broke out for it. Beach Energy Ltd (ASX: BPT) has outbid Hancock Energy’s 23 cents per share offer with a bid of 25 cents per share plus any net proceeds received from the sale of Warrego’s Spanish assets.

The post Why Bigtincan, Bubs, St Barbara, and Warrego shares are charging higher appeared first on The Motley Fool Australia.

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More reading

• 3 ASX shares soaring on takeover bids today
• Guess which ASX All Ords tech share is soaring 12% on takeover news
• 5 things to watch on the ASX 200 on Friday
• Warrego Energy share price rockets 80% in a month amid clash of the takeover titans
• Why Bubs, Collins Foods, Dusk, and Mayne Pharma shares are falling 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 positions in and has recommended Bigtincan. The Motley Fool Australia has positions in and has recommended Bigtincan. The Motley Fool Australia has recommended Bubs Australia. 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 no secret the ASX loves a takeover target, and these three shares have proven to be just that. They’ve each been hurled acquisition bids on Friday and they’re gaining as much as 26% on their suitors’ attention.

Meanwhile, the broader market is in the red today. The All Ordinaries Index (ASX: XAO) is down 0.6% at the time of writing while the S&P/ASX 200 Index (ASX: XJO) has slumped 0.66%.

So, without further ado, let’s take a look at the ASX shares soaring on merger and acquisition activity on Friday.

3 ASX shares taking off on takeover attention

First off the bat, the Bigtincan Holdings Ltd (ASX: BTH) share price is soaring 12.5% to 76.5 cents right now after the company announced it’s received a takeover bid.

SQN Investors has offered 80 cents per share to snap up the AI-powered sales enablement automation platform provider. So far, the company hasn’t accepted the proposal. It also noted SQN Investors isn’t the only suitor to have shown its acquisition interest recently.

Joining Bigtincan in the takeover frenzy is Mayfield Childcare Ltd (ASX: MFD). The ASX childcare share is surging 25.9% to $1.215 on the back of its own takeover offer.

Its largest shareholder Genius Education Holdings has put forward a $1.28 per share bid.

Like Bigtincan, Mayfield Childcare will consider Genius Education’s bid against other, albeit lower and more conditional, proposals to maximise shareholder value. In the meantime, however, it has granted its major shareholder exclusive due diligence.

Finally, today brought more news of the ongoing battle for control of Warrego Energy Ltd (ASX: WGO). Shares in the ASX gas explorer are to lifting 9.6% to trade at 28.5 cents right now.

Today, ASX 200 oil giant Beach Energy Ltd (ASX: BPT) upped its previous 20-cent per share bid for the company to 25 cents per share, plus any proceeds from the sale of Warrego’s Spanish assets.

Its improved offer comes after it was outbid by Gina Rinehart’s Hancock Prospecting. Hancock offered Warrego investors 23 cents per share earlier this week.

No doubt all eyes will be on the ASX takeover targets, and their share prices, in the coming weeks to see how the three acquisition offers progress.

The post 3 ASX shares soaring on takeover bids today appeared first on The Motley Fool Australia.

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More reading

• Guess which ASX All Ords tech share is soaring 12% on takeover news
• Warrego Energy share price rockets 80% in a month amid clash of the takeover titans

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 positions in and has recommended Bigtincan. The Motley Fool Australia has positions in and has recommended Bigtincan. 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 looking like the S&P/ASX 200 Index (ASX: XJO) is about to give investors a rather disappointing end to the trading week this Friday. At the time of writing, the ASX 200 has slipped by a sad 0.67%, dragging the index down to just under 7,310 points. Even so, at this point, the ASX 200 remains handily up for the week, so it’s not all bad.

But let’s now dig a little deeper into today’s market falls by checking out the ASX 200 shares currently at the peak of the share market’s trading volume charts, according to investing.com.

The 3 most traded ASX 200 shares by volume this Friday

South32 Ltd (ASX: S32)

Our first stock of the day is the ASX 200 mining share South32. So far this Friday, a hefty 12.46 million South32 shares have been traded on the stock exchange. There hasn’t been any news or announcements from the company so far today.

So we can likely blame the nasty share price fall this company is enduring today for this high volume. At present, the south32 share price has lost 1.63%, putting the company at $4.22 a share.

Evolution Mining Ltd (ASX: EVN)

ASX 200 gold miner Evolution is next up today. So far this session, a sizeable 13.11 million Evolution shares have changed owners. Again, it looks like we can thank a share price movement for this volume.

Fortunately for Evolution investors, the company’s shares are going the right way. Evolution is presently up a healthy 2.54% at $21.18 a share. Like most ASX gold shares today, Evolution seems to be benefitting from a surging gold price.

Pilbara Minerals Ltd (ASX: PLS)

Our third, final and most traded ASX 200 share today is the lithium leader Pilbara Minerals. This Friday has seen a notable 17.93 million Pilbara shares bought and sold so far. All is quiet on the official news front for Pilbara today as well.   

But luckily for investors, Pilbara shares also seem to be bucking the market’s pessimistic mood. After briefly dipping into negative territory this morning, Pilbara has recovered over the afternoon and is currently up a reasonable 0.74% at $4.80 a share. It’s this gain, and bouncing share price, that is probably the cause of the elevated volumes we are seeing.

The post Here are the 3 most heavily traded ASX 200 shares on Friday appeared first on The Motley Fool Australia.

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More reading

• Wondering how the Coles share price fared over November? Here’s how
• These 3 ASX 200 dividend shares led the pack in November. Here’s why
• Here are 10 years of ASX 200 historical returns
• The ASX 200 mining shares to buy for big dividends in 2023: analysts
• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor Sebastian Bowen 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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to end the week on a disappointing note. At the time of writing, the benchmark index is down 0.7% to 7,300.5 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

Coronado Global Resources Inc (ASX: CRN)

The Coronado share price is down 3% to $2.02. This follows the release of a market update from the coal miner this morning. That update revealed that ongoing wet weather in the Bowen Basin in Queensland has impacted its previously communicated production and cost guidance.

IDP Education Ltd (ASX: IEL)

The IDP Education share price is down 3% to $28.48. This appears to have been driven by a broker note out of Morgans. This morning the broker downgraded the language testing and student placement company’s shares to a hold rating with a $30.75 price target. The broker made the move on valuation grounds.

Mayne Pharma Group Ltd (ASX: MYX)

The Mayne Pharma share price is down 3.5% to 23.2 cents. Investors have been selling this pharmaceutical company’s shares this week following the release of a disappointing trading update. Mayne Pharma revealed that for the four months ended 31 October, its revenue from continuing operations came to $59 million. This is down 29.5% over the prior corresponding period.

Rio Tinto Ltd (ASX: RIO)

The Rio Tinto share price is down 1.5% to $111.74. This may have been driven by a broker note out of Citi. According to the note, the broker has downgraded the mining giant’s shares to a neutral rating with a $115.00 price target. This follows the release of lower than expected iron ore guidance for FY 2023.

The post Why Coronado, IDP, Mayne Pharma, and Rio Tinto shares are dropping today appeared first on The Motley Fool Australia.

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More reading

• Why Appen, Evolution Mining, Rio Tinto, and Xero shares are racing higher
• Rio Tinto share price lifts despite lukewarm iron ore outlook
• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX 200 shares today
• Why Bubs, Collins Foods, Dusk, and Mayne Pharma shares are falling 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 positions in and has recommended Idp Education. 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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Since we’ve just welcomed in a new month, it’s a good time to look back and see how some of the ASX’s most prominent shares fared over the month just gone. So today, let’s check out the Coles Group Ltd (ASX: COL) share price.

ASX shares, as a whole, had a very pleasing November. The S&P/ASX 200 Index (ASX: XJO) rose from 6,862.5 points to 7,284.2 points over the month, a gain worth a hefty 6.1%. But how did Coles shares do?

Well, the supermarket share opened the month at a price of $16.33 a share. By the end of November, the Coles share price had risen to $16.95. That’s a gain worth 3.8% for November. Not quite as generous as the returns of the overall market, but still, a gain is a gain.

Today, Coles is going for $16.84 a share at the time of writing. So not a great start to the festive season for Coles. At this share price, Coles shares remain down by 5.95% year to date, and down 4.6% over the past 12 months.

So recent history hasn’t been too kind to Coles shares.

Is the Coles share price a buy this December?

But one ASX broker reckons investors might want to shop for Coles shares this Christmas.

As my Fool colleague James covered this week, ASX broker Morgans is currently bullish on Coles.

The broker has just given Coles shares an add rating, with a 12-month share price target of $19.50. That implies a substantial 15.8% upside over the coming year. Morgans noted that Coles has just had a strong quarter, and reckons its shares are still cheap.

It commented that “we continue to see COL as offering good value with the company’s solid balance sheet and defensive characteristics putting it in a good position to navigate through a weaker economic environment”.

Morgans is also expecting Coles to keep raising its dividends. It has pencilled in 64 cents per share in dividends for FY 2023, and 66 cents per share for FY 2024.

At the current Coles share price, this ASX 200 supermarket share has a trailing and fully franked dividend yield of 3.74%.

The post Wondering how the Coles share price fared over November? Here’s how appeared first on The Motley Fool Australia.

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More reading

• Here are 10 years of ASX 200 historical returns
• 5 things to watch on the ASX 200 on Friday
• So, has inflation peaked or not?
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Investing in ASX shares? Here’s what the experts expect for RBA rate hikes in 2023

Motley Fool contributor Sebastian Bowen 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 Coles 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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A brand new ASX lithium share is due to hit ASX boards very soon.

Patriot Battery Metals Inc is due to trade on the ASX next week under the ticker PMT.

The company is led by CEO Blair Way, an experienced international executive. Former Pilbara Minerals CEO Ken Brinsden is the non-executive chairman and a director of Patriot Battery Metals.

Patriot is already listed overseas in Canada on the TSX Venture Exchange as (TSX-V: PMET). Patriot shares soared 8.81% to CAD $8.15 overnight. The company also has two further listings: (OTCQB: PMETF) and (FSE: R9GA).

Lithium explorer

Patriot Battery Metals is exploring the 100% owned Corvette Property in the James Bay region of Quebec.

Corvette says this land hosts “significant lithium potential”. Six distinct clusters of lithium pegmatite have been discovered at the property to date.

Earlier this month, Patriot advised the first hole of the 2022 drill program was completed on 24 October. Another drill program will start in early January 2023. Drill rigs are already at the site.

Patriot also owns the Freeman Creek Gold Property in Idaho, USA. This is said to host two prospective gold prospects.

Other assets include the Pontax Lithium-Gold property and a 40% stake in the Hidden Lake Lithium Property.

Brinsden joined the Patriot team in August. He said:

There is so much to like about the Corvette property, with work to-date demonstrating both local and regional potential for a large-scale project ideally placed within the emerging Nth American lithium raw materials supply chain.

Initial Public Offering

Patriot advised yesterday it has completed an initial public offering on the ASX of 7,000,000 CHESS Depository Interests priced at 60 cents per share. This has raised $4.2 million. The company said it has received approval, subject to usual conditions, to list on the ASX.

The company said:

Patriot is working with ASX to meet the listing conditions and it is expected that trading in Patriot’s CDIs (assigned a code of “PMT”) on the ASX will commence on a normal settlement basis on December 7, 2022.

Patriot is expecting to receive and analyse assay results from its exploration projects after the ASX listing. The company plans to make further announcements in the coming weeks.

The post New ASX lithium share chaired by ex-Pilbara Minerals boss to debut next week appeared first on The Motley Fool Australia.

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More reading

• These 3 ASX 200 dividend shares led the pack in November. Here’s why
• Why CSL shares are this fundie’s top ASX 200 healthcare pick
• Could our dividends now be too reliant on ASX 200 oil shares?
• Why did the Flight Centre share price take a flogging in November?
• Is this a red flag for Wesfarmers shares?

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

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S&P/ASX 200 Index (ASX: XJO) dividend shares have been drawing increasing investor interest this year.

With inflation and interest rates on the rise, more investors are after quality income stocks.

The Holy Grail for any dividend stock is not only one that pays a reliable dividend, but also one that offers share price growth.

Below, we look at three stocks that more than fit that bill in November.

Copper and gold shining bright

Kicking off the list is Evolution Mining Ltd (ASX: EVN).

Evolution pays a 2.2% yield, fully franked, and the ASX 200 dividend share gained 29.3% in November.

Evolution enjoyed some solid tailwinds over the month from rebounding gold and copper prices, two of its primary focuses.

The miner trended higher throughout the month and received another big leg up on 24 November. That’s when it reported intersecting â€œsignificant new copper-gold extensions” at its wholly owned Ernest Henry mine, located in Queensland.

This ASX 200 dividend share leapt 36% higher last month

Next up is Canadian iron ore miner Champion Iron Ltd (ASX: CIA).

Champion Iron has a current market cap of $3.3 billion and pays a trailing dividend yield of 3.5%, unfranked.

The ASX 200 dividend share rocketed 35.9% in November without releasing any price-sensitive news. Its stellar performance looks to have been driven by a big increase in the iron ore price.

The industrial metal was trading for approximately US$81 per tonne on 1 November and closed the month at US$103 per tonne.

Which brings us to…

November’s best-performing ASX 200 dividend share

The best share price gains by any ASX 200 income stock in November were delivered by Origin Energy Ltd (ASX: ORG).

The energy stock pays a 3.7%, partly franked trailing yield and gained a whopping 41.1% over the month.

Origin got a huge boost on 10 November, when the company announced it had received an indicative, conditional, and non-binding proposal from Brookfield Asset Management and MidOcean Energy.

The acquisition proposal valued Origin at $9.00 per share, to be paid in cash. That was 54.9% higher than the Origin share price on 10 November, which saw the ASX 200 dividend share close 34.8% higher on the day.

The post These 3 ASX 200 dividend shares led the pack in November. Here’s why appeared first on The Motley Fool Australia.

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More reading

• Why did the Origin share price rocket 41% in November?
• Here are the top 10 ASX 200 shares today
• Why Appen, Evolution Mining, Rio Tinto, and Xero shares are racing higher
• These were the best performing ASX 200 shares in November
• 5 things to watch on the ASX 200 on Thursday

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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The CSL Limited (ASX: CSL) share price has closed above the $300 threshold all week, and today it’s currently trading at $302.17, up 1.2% for the day so far.

Meantime the S&P/ASX 200 Index (ASX: XJO) is down 0.65%.

In an interview with Livewire this week, Wilson Asset Management equity analyst Anna Milne said CSL was her top ASX healthcare share pick for 2023.

Why this expert backs CSL ahead of other ASX 200 options

Milne joins a bunch of other brokers who are also tipping CSL shares for growth next year.

When asked about her top healthcare stock pick for 2023, Milne said:

I know it probably feels like a consensus call but it’s got to be CSL.

Earnings are set to grow almost 30% next year, 15% the year after that and 10% in FY 2025 and beyond.

Seqirus is also set up for a strong year from flu season, and Vifor is a compelling medium-term growth lever. It’s a stock that’s hard to fault.

Who else is tipping growth for the CSL share price in 2023?

Wilsons is tipping a 12-month share price target of $327 for CSL shares and has an overweight rating.

As my colleague James reports, Citi has reaffirmed its buy rating with a share price target of $340. Macquarie retains its outperform rating but recently upped its price target by 4.1% to $343.

Tribeca portfolio manager Jun Bei Liu says CSL shares are among the best ASX shares to buy and hold for several years. Liu says: “Even if we have a US recession or a global recession, it’s not going to slow down. It will grow double digits for the next three years.”

Blake Henricks, portfolio manager at Firetrail Investments, said CSL is a defensive share that can ride out any future market volatility. He says: “It’s large, it’s liquid, it’s healthcare. So to me, it ticks all the defensive boxes. It’s in a defensive growth category.”

What’s been happening with CSL lately?

The big news of late has been the approval of CSL’s unique haemophilia B treatment, called Hemgenix, by the United States Food and Drug Administration.

This drug is a big deal because it’s the first and only one-time gene therapy to become available for adults with haemophilia B. A commercial launch is expected in FY24.

According to the Australian Financial Review (AFR), Hemgenix will be priced at US$3.5 million per dose.

Um, what?

Yes, indeed. It will be the world’s most expensive drug, according to the article.

Of course, this isn’t the price that US patients will pay. It’s what health insurers and government programs like Medicare will pay in exchange for the greater cost savings the treatment will deliver to them.

CSL head of research and development Bill Mezzanotte told the AFR the cost to CSL of bringing Hemgenix to market after more than 10 years in development was more than $US1 billion.

He also argues the enormous value to the healthcare system given the patient population size and the long-term efficacy of a single dose, which will replace multiple doses of other drugs per patient, per week.

Dr Mezzanotte said:

You can’t even measure the difference in a person’s life taking one treatment and not need to think about it for at least 10 to 20 years [versus multiple times a week].

It’s not just their convenience, it’s their sense of mental security, and of course, it saves the healthcare system a lot of money in both the cost of therapy, rescue therapies, the cost of treating a bleed and also the lost productivity of these patients.

According to the article, a 2021 study published in the Journal of Medical Economics found it cost the healthcare system more than US$20 million to treat a moderate to severe haemophilia B patient over their lifetime.

CSL share price snapshot

CSL shares crossed the $300 mark for only the third time in 2022 last week.

Immediately before COVID-19 hit the Australian share market, the CSL share price was about $340.

The post Why CSL shares are this fundie’s top ASX 200 healthcare pick appeared first on The Motley Fool Australia.

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More reading

• Why did the CSL share price leap 7% in November?
• ‘Buy it for 5 years’: Jun Bei Liu’s 3 best ASX shares for 2023
• ‘Back a winner’: Expert names his 3 best ASX shares for 2023
• 2 high quality blue chip ASX 200 shares named as buys by analysts
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Motley Fool contributor Bronwyn Allen has positions in Csl. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Csl. 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 there has been a winner from the global energy shortage, it would have to be oil shares. Energy elites of the S&P/ASX 200 Index (ASX: XJO) have enjoyed enormous profits as conflicts crimp the supply of the commodity.

For shareholders, it has meant a plentiful year for dividends. According to Janus Henderson’s latest Global Dividend Index report, the recent third quarter was a record for global payouts — rising 7% to $415.9 billion thanks largely to oil producers.

However, it begs the question: could the delectable dividends that are being injected into Australian portfolios from oil, gas, and energy companies pose a risk to future income? After all, the commoditised sector is known for its cyclical habits.

How much of ASX 200 dividends are from oil and gas?

In the third quarter of the calendar year, oil producer dividends surged 75% to a record $46.4 billion globally. This was a byproduct of elevated oil prices compared to the prior corresponding period, as shown below.

Locally, our biggest energy company increased its interim dividend by nearly four-fold to US$1.09 per share amid the amplified prices. As a result, Woodside Energy Group Ltd (ASX: WDS) became one of the top five dividend-payers on the ASX.

Sourcing data from S&P Market Intelligence, oil and gas companies constituted approximately 8% of the total $28.45 billion in Aussie payouts in Q3, the majority of which was delivered by Woodside.

The energy sector’s contribution was bolstered by large cash drops from the likes of Santos Ltd (ASX: STO), APA Group (ASX: APA), and Ampol Ltd (ASX: ALD). In total, oil and gas companies served up more than $2.2 billion in divvies to shareholders.

Notably, one in five Australian companies sliced their dividends in the third quarter. Comparatively, only one in ten companies globally reduced their payouts.

Is it too much?

Many investors rely on the dividends from the ASX 200 via index-tracking passive exchange-traded funds (ETF). Any material changes to large contributors to the index could impact future income. So, could oil and gas payouts put a dent in your next payday?

The short answer is yes, but the more nuanced answer is: it depends… At around 8% of total ASX 200 dividends, oil and gas companies are far from the most important sector when it comes to income.

Instead, banks and mining companies are responsible for the majority of income generated by an investment in the index. At least that was the case in the third quarter.

According to S&P Global, banks made up roughly 21% of payouts. Meanwhile, mining companies took the number one spot in Q3 with 45% of all dividends delivered.

It would seem the risk of falling oil and gas dividends pose a minor risk to the total ASX 200 yield. The benchmark index remains heavily exposed to other areas of the market.

The post Could our dividends now be too reliant on ASX 200 oil shares? appeared first on The Motley Fool Australia.

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More reading

• Why did the Flight Centre share price take a flogging in November?
• Is this a red flag for Wesfarmers shares?
• 10 ASX dividend shares paying more than 10% yield right now
• The pessimists were wrong. Again.
• Should you buy yourself Webjet shares for Christmas?

Motley Fool contributor Mitchell Lawler 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 Apa 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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