The Healius Ltd (ASX: HLS) share price is defying the market weakness and pushing higher on Monday.

At the time of writing, the healthcare company’s shares are up 7% to $2.97.

Why is the Healius share price pushing higher?

Investors have been bidding the Healius share price higher today after the company received a takeover proposal from a smaller rival.

In an incredibly bold move by $700 million Australian Clinical Labs Ltd (ASX: ACL), $1.58 billion Healius has received an all-scrip off-market takeover approach.

According to the release, Australian Clinical Labs is offering 0.74 shares for every Healius share. This represents a nil-premium offer based on the Healius share price on the day of its half-year results release and the last close price for the Australian Clinical Labs share price.

Is this a terrible offer?

While this offer may look incredibly unattractive at first glance, the value is expected to be unlocked through merger synergies and a valuation uplift.

The release highlights that the potential merged group is forecast to have pro forma FY 2023 EBIT of $361 million including cost synergies and operational improvement benefits.

Australian Clinical Labs believes that this would deliver a value uplift of approximately $2.1 billion if the merged group trades at the current blended forward EV/EBIT multiple of 17.5x.

This equates to a 90% increase in the value per Healius share implied by the offer consideration. Australian Clinical Labs also believes the merged group could be a candidate for ASX 100 inclusion in time.

Take no action

Healius has responded to the offer this morning. It said:

The Board of Healius advises shareholders to take no action in respect of ACL’s takeover offer. The Board will evaluate the offer and ACL’s bidder’s statement and provide shareholders with a recommendation in due course. Until then, there is no need for shareholders to take any action. Healius will keep its shareholders fully informed of any further developments.

The post Healius share price jumps 7% on takeover approach from smaller rival 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 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 A2 Milk Co Ltd (ASX: A2M) share price is down 1.7% in early morning trade on Monday, while the S&P/ASX 200 Index (ASX: XJO) is down 0.9%.

Shares in the ASX 200 dairy stock are currently trading for $6.26 after closing Friday at $6.37. 

This comes as the company reports the completion of its NZ$149 (AU$139 million) on-market share buyback program.

What happened with the share buyback?

A2 Milk first announced its intention for an on-market share buyback of up to NZ$150 million on 29 August, when the company released its full-year results.

The A2 Milk share price closed up 10% on the day.

The buyback was enabled by some strong results. Those included a 20% year-on-year increase in revenue to NZ$1.45 billion and a 42% leap in net profit after tax (NPAT) to NZ$115 million.

Commenting on the share buyback at the time, A2 Milk CEO David Bortolussi said, “Our on-market buyback of up to NZ$150 million demonstrates effective capital management and the improved confidence we have in our strategy, execution and outlook.”

Today that buyback is complete.

The company reported that it acquired a total of just under 21.7 million shares. That works out to 2.9% of issued capital.

Excluding brokerage costs, the average price was NZ$6.87 per A2 Milk share, for a total consideration of approximately NZ$149 million.

As part of the buyback, those shares have been cancelled. That leaves A2 Milk with a total of 721,976,214 outstanding ordinary shares.

With the buyback complete, A2 Milk reported it has further reduced its share capital in its statement of financial position. The company expects to report share capital of around NZ$100,000 for FY23.

A2 Milk share price snapshot

As you can see in the chart below, the A2 Milk share price has been a strong performer over the past full year, up 15% despite today’s retrace.

The post A2 Milk share price slides amid $139 million buyback completion appeared first on The Motley Fool Australia.

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• At almost $7, can the A2 Milk share price go any higher?
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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 recommended A2 Milk. 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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Investing is one of the best things households can do to improve their financial positions, in my opinion. I think if people avoid investing then they could be missing out.

Of course, there are some investments that may go wrong. There are always risks. ASX shares regularly suffer from volatility. Some of the riskiest ASX shares can fall heavily, or even drop to $0.

But, I think there’s a big difference between a high-risk biotech, or a mining exploration business, compared to an investment like a blue chip or a diversified exchange-traded fund (ETF).

As long as households stick with growing, resilient businesses, I think they can do well.

Having said that, here are three great reasons why it makes sense to invest rather than keeping all the hard-earned cash in the bank, or under the mattress.

Save for retirement

Building a nest egg could be one of the most important financial goals for a family. But, building a large portfolio doesn’t happen overnight. It could take many years. But, households have a good chance of creating pleasing finances by going for it. If we never attempt to grow our money, there’s 0% chance we’ll have an adequate retirement fund.

Each household’s finances are different. Spending goals in retirement can also influence the picture significantly.

As noted by the Motley Fool’s retirement guide, according to the Association of Superannuation Funds of Australia’s Retirement Standard, “to have a ‘comfortable’ retirement, a couple who own their own home will need an income of about $67,000. A single person will need an annual income of more than $47,000”.

I’d rather build my own portfolio and be able to rely on my own source of retirement funding, rather than hope the pension is as generous in 35 years time as it is now.

If I invested $1,000 a month for the next couple of decades, my portfolio could be worth over $1 million, thanks to the returns the share market typically produces.

Good long-term returns

The share market has done exceptionally well at growing wealth for investors over the long term.

Of course, each individual business has produced a different performance over the years.

However, we can look at the whole ASX share market return. Over the ultra-long term, it has produced an average return per annum of around 10%. Achieving that return would double an investment’s value in less than eight years.

While past performance is not a guarantee of future returns, there are some investments that have done even better. Compared to a term deposit, I’d rather go with the return of the share market.

For example, over the past five years, the iShares S&P 500 ETF (ASX: IVV) has returned an average of 12.7% per year and the Vaneck Morningstar Wide Moat ETF (ASX: MOAT) has returned an average of 15%.

Inflation

Inflation devalues the value of a dollar over time. We’ve just seen a huge period of inflation, which is hopefully over.

But, the Reserve Bank of Australia (RBA) is targeting inflation to be between 2% to 3% in the medium term. While it has some work to do to get to that level, it shows that unless investors are earning a return of at least inflation over time, their money’s value is slowly being eaten away.

I think that investing in businesses involved in increases prices – adding to the inflation situation – can help mitigate this erosion and even help investors benefit from inflation.

Having $10,000 is a solid amount of cash. But, in ten or twenty years, that $10,000 may not be able to buy as much as it does today.

Even if a household isn’t bothered about saving for retirement, I think protecting against inflation is one of the best reasons to invest.

The post 3 reasons not investing at all could be riskier than trying to invest appeared first on The Motley Fool Australia.

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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 recommended VanEck Morningstar Wide Moat ETF and iShares S&p 500 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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While it’s all good and well to pick ASX shares on a “bottom up” basis, no investor can afford to entirely ignore economic conditions.

After all, no business operates in a complete vacuum. External forces will have a bearing on the success of any company.

And with ten consecutive months of interest rate rises burdening both consumers and businesses, the looming economic downturn cannot be discounted when currently deciding on shares to buy.

As such, finance expert John-Louis Judges this week set out to find a pair of S&P/ASX 200 Index (ASX: XJO) stocks that might make the perfect base for a portfolio starting from scratch:

‘A solid foundation for any portfolio’

The insurance industry is seen by many investors as one that can thrive through tougher parts of the economic cycle.

That’s because the sector provides a service that’s seen as essential. Plus higher interest rates mean better returns on the premiums that insurance companies invest in.

So it’s not a long bow to draw that a business that has insurance companies as its clients might also do okay.

That’s the enviable position claims repairer Johns Lyng Group Ltd (ASX: JLG) finds itself in.

“Johns Lyng’s strong financial results, opportunities for growth through acquisitions, relatively recession-resistant industries, and paid dividends make this stock a solid foundation for any portfolio,” Judges said on The Bull.

“JLG has a highly experienced management team with a proven track record of successfully growing and managing businesses. The team has demonstrated the ability to execute its growth strategy while maintaining strong financial discipline.”

With the share price 26.7% lower than it was 12 months ago, there is arguably a buying window open now as well.

Judges acknowledged the building industry is under pressure with supply cost inflation and a declining economy. But Johns Lyng’s business model seems to shield it from the stress.

“At least 20 large construction companies folded in 2022. More closures are expected in 2023. Contractually agreed rates were not enough to offset the sharp rises in prices and wages following COVID, sending many to the wall,” he said.

“Johns Lyng’s focus on shorter-duration projects in the renovation and reconstruction sector has shielded its balance sheet from the worst price hikes.”

‘Ample opportunities for growth’

On the other end of the supply chain is Steadfast Group Ltd (ASX: SDF), which is an insurance broker network that’s enjoyed a 17% rise in its share price over the past year.

Judges sees Steadfast as “an attractive investment”, operating in a recession-resistant industry and a “robust regulatory environment”.

“Insurance is an essential industry that is unlikely to be significantly impacted by economic downturns,” he said.

“Rising interest rates provide an opportunity for higher returns on their collected premiums.”

The last financial year saw a 20% increase in revenue, according to Judges. 

“And the present trailing twelve-month [period] has a climb of 9% in revenues.”

The dynamics of the brokerage market is also alluring for Steadfast investors.

“Steadfast Group operates in a highly fragmented market, which provides the company with ample opportunities for growth through acquisitions,” said Judges.

“Its history of successful acquisitions has allowed the company to expand its customer base and geographical reach.”

According to CMC Markets, seven out of 12 analysts currently rate Steadfast shares as a strong buy.

The post 2 ‘recession-resistant’ ASX 200 shares to start a strong portfolio: expert appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo has positions in Johns Lyng Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Johns Lyng Group and Steadfast Group. The Motley Fool Australia has positions in and has recommended Steadfast Group. The Motley Fool Australia has recommended Johns Lyng 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 BHP Group Ltd (ASX: BHP) share price has sunk to below $44. We haven’t seen the price go this low since November 2022. So, after such a significant fall, is the ASX mining share now worth digging into?

I think one of the most important things to note is that the business has gone ex-dividend. That means BHP shares are no longer trading with an entitlement to the FY23 half-year dividend of 90 US cents per share — or AU$1.363.

Certainly, this can justify some of the fall in share price. But, it’s actually down by 10.3% since 6 March 2023.

There has been considerable volatility over the past month, with plenty for investors to ponder.

BHP produces a number of different commodities including iron, coal, copper, and nickel. While the BHP share price, dividend, and profit are influenced by commodity prices, investors can also decide to push down share prices if it seems there is reason to worry about the Australian, or global, economy.

What’s going on with the global markets?

Investors recently had to digest the news that two mid-tier US banks were being taken over by authorities. The prospect of a potential banking collapse would, unsurprisingly, be concerning for investors. There are also concerns about Credit Suisse in Europe.

Less global demand in the economy could mean less demand for commodities, hurting the profits of ASX mining shares like BHP.

The slower-than-hoped Chinese economic growth in 2023, so far, may also be weighing on investor attitudes toward the business.

Overall, things aren’t looking as good as they were in January.

Is the BHP share price a buy?

While things certainly do look a bit wobbly, I think this is the type of environment that opens up opportunities for brave investors.

Keep in mind that the iron ore price is still healthily above US$120 per tonne, meaning that BHP should be making good profit at these levels. That’s good news for dividend-focused investors. Shareholders can endure short-term volatility if they’re still getting large dividends.

I like the company’s plans to unlock further logistical improvements across its network, which would allow it to ship more iron.

As well, BHP’s plans to grow in copper, nickel, and potash looks attractive to me as the world turns greener. It could also mean that BHP is less reliant on China to buy all of its commodities.

However, while today may be a decent time to invest in BHP shares, remember that it’s a huge business, so there may not be a lot of capital growth in the long term. Certainly, I wouldn’t rely on share price growth to achieve great riches – it’s more about buying at the right time in the cycle and collecting dividends, in my opinion.

According to Commsec, the BHP share price is valued at 10x FY24’s estimated earnings with an FY24 grossed-up dividend yield of 10%.

The post Could buying BHP shares under $44 make me rich? appeared first on The Motley Fool Australia.

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• Is it time to buy ASX 200 iron ore shares right now?
• Why Bendigo and Adelaide Bank, BHP, IPH, and Woodside shares are dropping
• Why is the BHP share price tumbling 4% today?
• ‘Not sure if that’s the way we should go’: Why BHP shares are making news today
• How to make $50,000 of retirement income with ASX shares

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

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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) remains the most shorted ASX share even though its short interest eased week on week to 11.3%. Short sellers may have concerns over revenue margin headwinds.
• Megaport Ltd (ASX: MP1) has seen its short interest jump to 10.2%. Slowing growth and the shock departure of its CEO has been weighing on this network as a service provider’s shares.
• Betmakers Technology Group Ltd (ASX: BET) has seen its short interest ease again to 10.2%. Competition and cash burn concerns have been weighing on its shares.
• Core Lithium Ltd (ASX: CXO) has short interest of 9.9%, which is up week on week. Falling lithium prices seem to be behind this.
• Zip Co Ltd (ASX: ZIP) has short interest of 9.9%, which is up week on week. Short sellers seem to be doubting Zip’s ability to achieve its profitability goals. Though, management appears confident it will get there as planned.
• Sayona Mining Ltd (ASX: SYA) has 8.9% of its shares held short, which is down week on week. Short sellers appear to believe the lithium industry is overvalued as a whole.
• Liontown Resources Ltd (ASX: LTR) has short interest of 8.2%, which is down week on week. Cost blow outs at the Kathleen Valley Lithium Project and lithium price weakness are likely to be behind this.
• Brainchip Holdings Ltd (ASX: BRN) is back in the top ten with short interest of 7.6%. Short sellers don’t appear to believe this struggling semiconductor company warrants such a lofty valuation given its lack of revenue and intense competition from companies that spend billions on R&D each year.
• JB Hi-Fi Limited (ASX: JBH) has seen its short interest rise to 7.1%. This could be due to fears over the impact of the cost of living crisis on consumer spending.
• Nextdc Ltd (ASX: NXT) has short interest of 7.1%, which is up slightly week on week. This may be due to concerns that the tough economic environment could delay major contracts.

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

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Motley Fool contributor James Mickleboro has positions in Nextdc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Betmakers Technology Group, Megaport, and Zip Co. The Motley Fool Australia has recommended Betmakers Technology Group, Flight Centre Travel Group, Jb Hi-Fi, 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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The All Ordinaries (ASX: XAO), or All Ords, ASX share Universal Store Holdings Ltd (ASX: UNI) could pay a very large dividend yield in FY25.

I think the retailer has already proven that it’s a leading ASX dividend share. Looking at its latest two dividends, the business has a grossed-up dividend yield of 7.1%. This has been boosted thanks to the Universal Store share price falling by 20% since 30 January 2023.

Universal Store describes itself as the owner of a portfolio of “premium youth fashion brands and omni-channel retail and wholesale businesses”. Its core businesses are Universal Store and CTC, which trades as the THRILLS brand. It is currently trialling the Perfect Stranger brand as a standalone retail concept. It operates more than 93 physical stores.

Those businesses sell “on-trend apparel products” to fashion-focused customers aged between 16 to 35.

Strong recent performance

During the FY23 first half, the ASX All Ords share opened four new Perfect Stranger stores, bringing the total number of stores to seven. Despite Perfect Stranger being the largest-selling brand within Universal Store, the performance of those seven stores has had “little to no impact on nearby Universal Store locations”.

Perfect Stranger’s positive early results from its move into New South Wales have bolstered confidence in a potential “nationwide rollout”. I think this is very promising and suggests there could be years of growth ahead for this brand.

The acquired THRILLS business has also been sustaining its sales growth.

Overall, excluding Cheap Thrills, group total sales increased 28.6% in HY23. Including Cheap Thrills, sales grew 34.5% to $145.7 million.

Underlying earnings before interest and tax (EBIT) went up 43.2% to $28.5 million, while statutory net profit after tax (NPAT) increased by 31.7% to $17.8 million. In summary, the business is profitable and rapidly growing.

This profit growth is funding the attractive, growing dividend. The HY23 dividend went up by 27% to 14 cents per share.

In the second half of FY23, it’s expecting to open four to six new Universal Store locations, along with three to four new Perfect Stranger stores and one new THRILLS stores. It’s aiming to have more than 100 stores by 30 June 2023.

The company is also aiming to control costs, as well as improve productivity and efficiencies amid the current environment of rising costs.

Dividend yield expectations for the All Ords ASX share

The ASX All Ords share’s earnings per share (EPS) is expected to grow each year to FY25, according to Commsec, helped by its growth plans and increasing scale. The dividend is expected to rise each year as well, to 35 cents per share in FY25.

This dividend would translate to a grossed-up dividend yield of 10.2% for the 2025 financial year.

I think Universal Store is a very intriguing investment and could deliver compelling market-beating total returns for investors over the next few years, though there could be volatility.

The post This All Ords ASX share could pay a 10% dividend yield in 2025 appeared first on The Motley Fool Australia.

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• 7 ASX shares flying under the radar to buy now: Goldman Sachs
• Buy these ASX dividend shares with big yields today: experts
• Buy these ASX dividend shares before it’s too late: brokers
• Top ASX small-cap shares to buy in March 2023
• Why Brainchip, Lynas, Megaport, and Universal Store shares are dropping today

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

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If you’re looking for a passive income boost, then you may want to check out the ASX dividend shares listed below.

Analysts have named these ASX shares as buys and tipped them to pay their shareholders attractive dividends this year and next. Here’s what you need to know::

Healthco Healthcare and Wellness REIT (ASX: HCW)

The first ASX dividend share for income investors to consider is the Healthco Healthcare and Wellness REIT.

It is a health and wellness focused real estate investment trust that invests in properties such as hospitals, aged care, childcare, government, life sciences and research, and primary care and wellness properties.

Morgans is positive on the company and continues to forecast attractive dividend yields from its shares.

For example, Morgans is expecting in dividends per share of 7.5 cents in FY 2023 and 7.8 cents FY 2024. Based on the current Healthco Healthcare and Wellness REIT unit price of $1.47, this will mean yields of 5.1% and 5.3% for investors.

Morgans has an add rating and $2.06 price target on its shares.

Rio Tinto Ltd (ASX: RIO)

Another ASX dividend share for income investors to look at is mining giant Rio Tinto.

It could be a top option for investors that are happy to invest in the mining sector. Particularly given the very attractive dividend yields its shares are tipped to provide in the coming years.

Goldman Sachs is very bullish and believes that Rio Tinto is a great option due to its “compelling valuation” and “return to production growth in 2023.”

Combined with strong iron ore prices, its analysts are expecting this to lead to fully franked dividends per share of US$5.33 in FY 2023 and then US$5.98 in FY 2024. Based on current exchange rates and the latest Rio Tinto share price of $114.80, this will mean yields of 6.9% and 7.7%, respectively.

Goldman Sachs has a conviction buy rating and price target of $140.40.

The post Buy these ASX dividend shares with 5%+ yields: analysts appeared first on The Motley Fool Australia.

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• How to generate $500 of monthly income from Rio Tinto shares
• Is it time to buy ASX 200 iron ore shares right 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 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 three ASX mining shares I’m going to talk about in this article look like compelling buys for the long term, in my opinion. I particularly like the outlook for the copper miners.

Commodity prices are usually volatile. We don’t know what will happen next year, next month, or even next week. If we did, it’d be much easier to value the miners.

But, I think it’s safe to say that when resource prices go down, it typically leads to lower share prices for mining companies. That’s understandable considering the profit and possible dividends from the miners will also be lower.

However, I think that lower share prices are a buying opportunity when it comes to commodities that are typically cyclical, such as copper.

It’s worth keeping in mind, in the long term, copper demand is expected to rise as the world focuses more on decarbonisation.

Copper is essential for a variety of applications such as the power grid, renewable energy, electric vehicles, and so on. According to S&P Global, copper demand will double by 2035, which has the potential to open up a supply gap.

The copper price was below US$4 per pound last week, according to Commsec. Indeed, this lower price may have contributed to some of the declines in the ASX mining shares below.

Sandfire Resources Ltd (ASX: SFR)

Sandfire Resources has a market capitalisation of $2.5 billion, according to the ASX. The Sandfire share price has fallen 13% from 21 February 2023.

The business is expecting to benefit from the US$1.86 billion acquisition of the MATSA copper operations in Spain in February 2022, as well as the ramping up of the new Motheo mine in Botswana.

Sanfire’s earnings per share (EPS) is projected to soar by FY25, with a current projection of 42 cents, according to Commsec. If that happens, the Sandfire Resources share price could be valued at 13x FY25’s estimated earnings and an FY25 grossed-up dividend yield of 3%.

Aeris Resources Ltd (ASX: AIS)

Aeris Resources has a market capitalisation of $373 million, according to the ASX. The Aeris Resources share price is down around 30% since 22 February 2023.

The company describes itself as a mid-tier metals producer, with a copper-dominant portfolio, comprising four operating assets, a long-life development project, and a “highly prospective exploration portfolio” across the country.

This ASX mining share is generating positive cash flow and is expected to generate earnings before interest, tax, depreciation and amortisation (EBITDA) of $80 million to $110 million in FY23.

In FY25, the business is predicted to make 17.4 cents of EPS. This puts the Aeris Resources share price at just 3x FY25’s estimated earnings.

Rio Tinto Limited (ASX: RIO)

Rio Tinto is a massive ASX mining share. It has a market capitalisation of more than $42 billion. The Rio Tinto share price is down almost 10% since 3 March 2023.

This business produces a number of different commodities. Rio Tinto says that global demand is set to grow by between 1.5% to 2.5% per year.

Its Kennecott mine is located in Utah, in the US. The business is working on studies to expand the open-pit mine, as well as a possible underground mine below the existing open pit.

Rio Tinto also owns two-thirds of the Oyu Tolgoi mine, with the Mongolian government owning the other third. Rio Tinto manages the operations at Oyu Tolgoi which is one of the largest known copper and gold deposits in the world. When the mine is fully operational, it will be the fourth-largest copper mine in the world.

According to Commsec, Rio Tinto shares are trading at 12x FY25’s estimated earnings with a possible FY25 grossed-up dividend yield of 7.7%.

The post 3 top ASX mining shares I’d buy right now appeared first on The Motley Fool Australia.

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More reading

• These ETFs could be top options for buy and hold investors
• How I’d aim to retire rich enough to live on passive income from my ASX dividend shares
• How to generate $500 of monthly income from Rio Tinto shares
• Is it time to buy ASX 200 iron ore shares right now?
• Why is the Rio Tinto share price diving 5% 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 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 insurance industry is, fairly or unfairly, perceived as a boring sector to invest in.

But in turbulent economic times like this, investing in ASX insurance shares is not a bad idea.

The thesis is that it’s a service that consumers and businesses will see as essential even through tougher periods. Moreover, insurance companies earn better returns on all the collected premiums when interest rates are higher.

The team at Ophir holds a couple of insurance positions that experienced vastly different reporting seasons. But they have long-term faith in both S&P/ASX 200 Index (ASX: XJO) stocks:

Strong February, strong future

In a letter to clients, Ophir portfolio managers Steven Ng and Andrew Mitchell revealed that insurance broking giant AUB Group Ltd (ASX: AUB) reported one of the portfolio’s best results last month.

“It beat its half-year result and upgraded full-year earnings guidance,” the letter read.

“Even more importantly, the insurer upgraded its medium-term margin expectations for most business lines.”

The market responded in kind, sending the stock price 14.55% higher during February.

Ng and Mitchell like how AUB’s management is running the business.

“The CEO Mike Emmett has been doing a great job turning around underperforming brokers and integrating their large acquisition last year of the UK-based Tysers business.”

It seems the Ophir team is not the only one bullish on AUB. According to CMC Markets, 11 out of 12 analysts that currently cover the stock recommend it as a buy.

Stunningly, 10 of those professionals deem the shares as a strong buy.

The AUB share price has gained 18.5% over the past 12 months while paying out a 2.16% dividend yield.

Short-term bumps on a long-term journey

On the other side of the coin, NIB Holdings Limited (ASX: NHF)’s financial update was not as impressive.

“NIB Holdings, the private health insurer, clocked a small miss on its earnings result,” read the Ophir letter.

“Its core private health insurance business was a little behind as claims continue to normalise post-COVID.”

Ng and Mitchell noticed that a side business was doing pretty well, though.

“Uptake of their travel insurance business is performing well on the back of continued economic reopening.”

Unfortunately, the NIB share price has declined almost 10% year to date.

The Ophir portfolio managers reminded investors that a long-term investment view is critical for a business like NIB.

“Long term, we continue to like management’s ability to deploy capital into new areas, such as its recent acquisition of plan managers who administer the National Disability Insurance Scheme (NDIS).”

Mitchell and Ng’s peers aren’t quite as convinced about NIB. Eight out of 13 analysts surveyed on CMC Markets rate the stock as a hold. 

The post Turbulence insurance: Fund names 2 ASX 200 shares for long-term riches appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Thursday
• 3 ASX 200 shares defying the market following earnings announcements
• Is the NIB share price a bargain buy following Monday’s dive?

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 recommended Aub Group and NIB Holdings. 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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