It has been a better day of trade for ASX 200 bank shares on Friday.

In morning trade, all of the big four banks are on course to end the week on a positive note.

Here’s the state of play currently:

• The ANZ Group Holdings Ltd (ASX: ANZ) share price is up 1%
• The Commonwealth Bank of Australia (ASX: CBA) share price is up almost 1%
• The National Australia Bank Ltd (ASX: NAB) share price is up 1.5%
• The Westpac Banking Corp (ASX: WBC) share price is up 1%

The key driver of this has been a stunning gain by the Credit Suisse share price overnight.

What happened to the Credit Suisse share price?

The Credit Suisse share price rocketed 19% higher on the Swiss stock exchange overnight after it announced a major funding package to shore up its finances.

According to the release, the struggling bank is borrowing up to CHF 50 billion (A$81 billion) from the Swiss National Bank (SNB) under a covered loan facility and short-term liquidity facility. These are fully collateralised by high quality assets.

Credit Suisse CEO, Ulrich Koerner, appears confident that it is onwards and upwards now. He said:

These measures demonstrate decisive action to strengthen Credit Suisse as we continue our strategic transformation to deliver value to our clients and other stakeholders. We thank the SNB and FINMA as we execute our strategic transformation. My team and I are resolved to move forward rapidly to deliver a simpler and more focused bank built around client needs.

This news seems to have eased investor nerves in the sector and given ASX 200 bank shares like Commonwealth Bank a boost this morning.

The post ASX 200 bank stocks lift after Credit Suisse share price soars 19% appeared first on The Motley Fool Australia.

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More reading

• The CBA share price is on a rollercoaster today. Is Credit Suisse to blame?
• ASX 200 bank shares are deep in the red on Thursday. Here’s why
• Is now the time to be bold and snap up cheap ASX 200 dividend shares?
• How much would I need to invest in ASX income shares to earn $500 a month?
• Are NAB shares a buy following the SVB-induced dip?

Motley Fool contributor James Mickleboro has positions in Westpac Banking. 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 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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Last month was reporting season. Now it’s ex-dividend time for numerous S&P/ASX 200 Index (ASX: XJO) shares over the next week.

Going ex-dividend means that investors that buy shares on the ex-dividend date aren’t entitled to that recently-declared dividend.

So, if investors are interested in getting the dividend then they need to invest before that date.

With that in mind, let’s have a look at some of those incoming ex-dividend dates.

Carsales.Com Ltd (ASX: CAR)

Last month the automobile classifieds business announced that it would pay a dividend of 28.5 cents per share.

The ex-dividend date for this dividend is 17 March 2023, meaning today. Investors will need to wait another six months for the next dividend from this ASX 200 share.

The payment date for this dividend is 18 April 2023.

Credit Corp Group Limited (ASX: CCP)

In February, the debt-collecting business revealed that it was going to pay a dividend per share of 23 cents.

The ex-dividend date is 21 March 2023, which is next Tuesday. That means that investors have until 20 March 2023 to buy shares.

The payment date for this dividend is 31 March 2023.

Cochlear Limited (ASX: COH)

In mid-February, Cochlear reported that its latest interim dividend was $1.55 per share.

The ex-dividend date for the upcoming dividend is 21 March 2023 as well, which is next Tuesday. Investors have until 20 March 2023 to buy stock of this ASX 200 share as well.

Cochlear’s interim dividend will be paid on 14 April 2023.

Hub24 Ltd (ASX: HUB)

The financial technology business decided to bump up its dividend to 14 cents per share.

Hub24’s ex-dividend date is 20 March 2023, which is Monday. That means investors only have today to snap up shares if they want to receive that dividend.

The ASX 200 share is going to pay its dividend on 18 April 2023.

Reece Ltd (ASX: REH)

Bathroom supplier Reece announced that its interim dividend was going to be 8 cents per share.

Reece’s ex-dividend date is 21 March 2023, which is Tuesday. Investors will have up to the end of trading on 20 March 2023 to invest in this ASX 200 share if they want the dividend.

The payment date for the ASX 200 share’s dividend is 5 April 2023.

SEEK Limited (ASX: SEK)

Employment website operator SEEK is planning to pay a dividend of 24 cents per share.

SEEK’s ex-dividend date is 22 March 2023, which is next Wednesday. That means investors have until 21 March 2023 to invest if they want to receive the dividend.

The ASX 200 share’s payment date is 5 April 2023.

The post 6 ASX 200 shares with ex-dividend dates in the next week appeared first on The Motley Fool Australia.

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More reading

• The one ASX share we’re holding onto for dear life: experts
• Top brokers name 3 ASX shares to buy today
• Top ASX 200 tech shares to buy right now: Morgans
• Why is the Carsales share price sinking 7% today?
• Brokers name 3 ASX shares to buy now

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Cochlear and Hub24. The Motley Fool Australia has positions in and has recommended Hub24. The Motley Fool Australia has recommended Carsales.com, Cochlear, and Seek. 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 Life360 Inc (ASX: 360) share price is on course to end the week on a very positive note.

In morning trade, the location technology company’s shares are up 7% to $5.19.

This follows the release of the company’s full-year results.

Life360 share price higher on results

• Total revenue up 103% to US$228.3 million
• Monthly active users up 36.9% to 48.6 million
• Gross profit up 65.3% to US$148.6 million
• Operating expenses up 100% to US$243 million
• Adjusted EBITDA loss of US$40.1 million
• Cash of US$90.4 million
• Outlook: Positive adjusted EBITDA from Q2 of FY 2023

What happened in FY 2023?

For the 12 months ended 31 December, Life360 reported the doubling of its revenue to US$228.3 million. This was driven by a 77% jump in subscription revenue to US$153.3 million, a material contribution from hardware revenue of US$47.9 million, and a modest lift in other revenue to US$27.1 million.

Management also highlights that its revenue growth was supported by an increase in paying circles and 19% higher average revenue per paying circle (ARPPC). At the end of the period, the company had 48.6 million monthly active users and 1.5 million paying circles. This was an increase of 36.9% and 23%, respectively.

And while its gross profit grew slightly slower than revenue at 65.3% to US$148.6 million, this is still a growth rate that the majority of ASX listed companies would be envious of.

Management advised that this reflects its strong revenue growth, offset by lower gross margins on its hardware sales. Positively, subscription margins increased in FY 2022 by 60 basis points to 80%.

Outlook

Looking ahead, management is guiding to further strong growth in FY 2023.

It is forecasting core Life360 subscription revenue growth (excluding Tile and Jiobit) in excess of 50% and modest hardware revenue growth of 0% to 5%. The latter reflects the continuing current challenges in the category. Whereas the former will be supported by price increases, which have already boosted its ARPPC materially in January.

This is expected to lead to consolidated revenue of US$300 million to US$310 million, which represents total growth of 31.4% to 35.8%.

Importantly, the cash burn will soon be coming to an end. Management expects positive adjusted EBITDA and operating cash flow on a quarterly basis beginning with second quarter and for the full year.

Broker reaction

Goldman Sachs has been looking over the result and was pleased with what it saw. It commented:

The result was broadly in line with expectations, as pre guided in January. FY23 guidance came in line with our expectations with the key highlights (1) >50% core Life360 subscription revenue growth (vs +54% GSe); and (2) quantification of full-year EBITDA guidance, expected to be US$5-10mn (vs US$9mn GSe/consensus).

We believe investors will respond positively to Life360’s strong subscription growth outlook (the key long-term value driver), supported by tangible metrics including US ARPPC (Jan-23 US$138, +42% y/y), subscriber growth returning to the US in Jan-Feb (helping ease concerns on payer conversion), and pushing price rises through the Android back-book in 2Q23.

The post Life360 share price higher on 100% revenue surge appeared first on The Motley Fool Australia.

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More reading

• 3 ASX All Ords tech shares rebounding strongly from the SVB fallout (and 2 still tumbling)
• Top brokers name 3 ASX shares to buy today
• Why Atlantic Lithium, Life360, Neuren, and Whitehaven Coal shares are charging higher
• This ASX 200 tech share is ‘materially undervalued’: Goldman Sachs
• These ASX tech shares are buys: Goldman Sachs

Motley Fool contributor James Mickleboro has positions in Life360. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360. 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 fund manager Wilson Asset Management (WAM) has recently identified some S&P/ASX 200 Index (ASX: XJO) shares that it owns (or owned) in one of its biggest portfolios.

WAM operates several listed investment companies (LICs), including WAM Capital Limited (ASX: WAM) and WAM Research Limited (ASX: WAX).

There’s also one called WAM Leaders Ltd (ASX: WLE) that looks at the larger companies on the ASX, often referred to as ASX blue-chip shares.

WAM says WAM Leaders actively invests in the highest quality Australian companies. But does WAM have a good reputation for picking stocks?

The WAM Leaders portfolio has delivered gross returns (before fees, expenses, and taxes) of 14.8% per annum since its inception in May 2016. This compares to the S&P/ASX 200 Accumulation Index’s average return of 8.8% over the same period.

These are two ASX 200 shares that the WAM Leaders investment team picked out.

Medibank Private Limited (ASX: MPL)

WAM Leaders revealed that it added Medibank Private shares to its portfolio late last year after the “cyber breach incident” and subsequent earnings guidance downgrade.

The large Australian private health insurer suffered from a share price decline. But, after the negative news flow “dissipated” and the share price still hadn’t recovered, the WAM Leaders team thought that the negative sentiment was “overdone”.

WAM noted that the result released in February 2023 was “strong”, with health insurance claims remaining “subdued” because the healthcare system is “capacity constrained” due to the lack of staff, while industry growth remains “buoyant”, driven by net migration and new participants domestically.

The fund manager also pointed out that the ASX 200 share noted its policyholder numbers had “stabilised” and the outlook has “improved for the year ahead.”

Brambles Limited (ASX: BXB)

The WAM investment team described Brambles as a business that specialises in the pooling of unit-load equipment. The ASX share has been in the WAM Leaders portfolio for over 12 months.

WAM said that Brambles’ half-year result in February was “strong”, which was driven by “significant pricing increases.”

Brambles is expecting its cash flow to remain in outflow this year. But, it upgraded its earnings guidance and noted cash flow pressures will “ease into next year as capital expenditure slows.”

The fund manager finished its bullish case on the ASX 200 share with the following:

Going forward, we expect profitability to be a key focus, with pricing increases in a tight market continuing while pallet efficiencies improve. The impact of pallet destocking as the economy slows should help bring more balance to the pallet market globally.

The post 2 leading ASX 200 shares to buy that could keep outperforming in 2023: fund manager appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• 6 ASX 200 shares trading ex-dividend today
• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX 200 shares 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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I have to say, the events of the last 8 or so days weren’t exactly on my bingo card for March 2023…

Trouble for a bunch of bankers

Three US bank failures last Friday, followed by Credit Suisse on life support by yesterday, and news overnight that another $50 billion was being guaranteed for yet another US bank, this time First Republic.

(Now, a quick plug: this afternoon, around 4.30pm AEDT, the latest episode of our podcast, Motley Fool Money, comes out. We dedicate the whole episode to the collapse of Silicon Valley Bank, but in the context of the overall system. And not in a boring way! So, if you’re keen, make sure you subscribe, now, so the episode drops straight into your feed when it’s available!)

But I want to take a slightly different angle, which is to call for much more, and better, regulation for our nation’s (and the world’s!) banks. It is clear that the regulators – correctly – have decided that they need to backstop a potential bank run at almost any bank, given the catastrophic contagion that would follow, plunging the world into what would likely be a deep and long recession.

I have sympathy for the ‘moral hazard’ argument, but we’re looking for ‘least worst’ outcomes here, societally-speaking, and that means ensuring confidence in the financial system.

Which means?

Which means if you’re essentially going to make the government (and the taxpayer) the last line of defence for almost every bank, you’re morally obliged to make sure that defence is very, very rarely needed.

You don’t have to be Einstein to know that if there were 5 banks – this week alone! – needing support, the regulations aren’t working.

Here’s a quick list of what I’d change:

– Back in 1933 the ‘Glass Steagall’ act in the US separated ‘commercial’ banking (the borrowing and lending stuff) from ‘investment’ banking. It was repealed in 1999. It should be re-enacted. And the same distinction should be enacted/retained in all other countries.

– If banks are ‘systemically too big to fail’ – and they are – their activities should be both curtailed and overseen more significantly. These should be ultra-low-risk entities, whose balance sheets should reflect that fact, and whose regulators should ensure that basic risk management processes are in place and functioning properly. And yes, it’d mean lower returns for shareholders. But that’s better than being wiped out… just as SVB shareholders.

– We learned during the GFC that banks were taking silly positions with ‘derivatives’ – essentially making complex financial bets that, as we know, went very, very badly. Banks’ derivatives contracts should be limited to managing the inherent risks of commercial banking – ensuring their lending and borrowing is matched off. If you want to do more than that, give up your banking licence and become a hedge fund.

– And the last one is one that I don’t want to be true. But I can’t escape it. It’s time to break up the largest banks. Globally, but here in Australia, too. Competition itself would be improved, but that’s not why (in this case) I think it should happen. We know that no bank can be truly ring-fenced in an inherently interconnected financial world. But the exposure of – and cost of fixing – a bank failure would be meaningfully reduced if the entities themselves were smaller. They’d also be infinitely easier to manage and oversee.

The vested interests will hate every single one of those ideas. Which is a sign that I’m on the right track.

The idealists will hate it because they don’t think that’s how the world should work. But it does.

We live in a world of picking ‘least worst’ outcomes, in terms of the impact on the economy and our society. I think my suggestions go part of the way to delivering that.

A tough call for the RBA

What does the RBA do now? Until this week, it had to balance inflation and economic growth on either end of the seesaw. But this week has changed the game. Increasing rates to bring down inflation has also worsened the pressure on potential bank collapses. So now the international calculus is ‘inflation versus bank collapses’.

How hard can the world’s central banks afford to go to curb inflation, when they risk damaging (freezing up?) the financial system?

And on the other hand, unemployment fell again this week, suggesting the economy is still very strong.

They find themselves in a very tough spot.

Everyone has a view, but the consequences of getting this wrong will be significant.

The other C word

The word of the week, this week, has been Confidence. It’s essential for the functioning of the financial system, and it’s what regulators have been working overtime to retain and restore.

But I hope all this news has also prompted many people to think about another C-word: Concentration.

How many Australians have 20%, 40% or 60% of their portfolios in the Big 4 banks?

Add in the regionals, and how exposed are some investors to the financial sector, writ-large?

To be clear, I am not expecting any trouble for Australian banks. But then, who expected trouble for US banks at the beginning of last week.

But even without that example, it makes no sense to be over-exposed to any individual sector of the economy, or to have your portfolio so correlated to one specific set of risks.

It is taking an unnecessary risk with your own portfolio.

Maybe use this weekend to ask yourself how diversified your portfolio truly is. And maybe plan to make some changes if the answers are uncomfortable.

Quick takes

Overblown: Growth? Value? The idea that these are discrete categories is silly. And each relies on the other. And then there’s one more factor: price. People usually talk about ‘themes’ to dumb down the market… or because they’re trying to sell something.

Underappreciated: The long term. I’m regularly asked ‘What should investors do now?’. It suggests that we should do something different today, compared to last week or last month. My answer is usually a version of: The same thing investors should always do: buy shares of a business when the price undervalues the company’s long term potential.

Fascinating: The next version of ‘ChatGPT’ – the artificial intelligence program that’s taking the world by storm – was released this week. It apparently made a whole website based on a drawing, and passed, with flying colours, a whole stack of standardised tests. The pace of improvement is astronomical, and it’s going to continue.

Where I’ve been looking: There’s a lot of pressure on bank share prices at the moment. Which, as a sometime-contrarian, means I’ve been looking. ANZ Group Holdings Ltd (ASX: ANZ), with a P/E under 10, could be a bargain, particularly if margins continue to increase. Or not, if they don’t, and mortgage defaults rise meaningfully. But it’s a tempting idea.

Quote: “People calculate too much and think too little.” – Charlie Munger

Fool on!

The post Another day, another bank in trouble appeared first on The Motley Fool Australia.

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More reading

• The CBA share price is on a rollercoaster today. Is Credit Suisse to blame?
• ASX 200 oil stocks are tanking. Is now the time to buy?
• ASX 200 bank shares are deep in the red on Thursday. Here’s why
• Investing in ASX 200 shares? Here’s what to expect from the US Fed next week
• Is the Westpac share price a buy below $22?

SVB Financial provides credit and banking services to The Motley Fool. Motley Fool contributor Scott Phillips 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 SVB Financial. The Motley Fool Australia has recommended SVB Financial. 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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Wesfarmers Ltd (ASX: WES) shares typically pay investors a good dividend yield. With that in mind, could it be used as a key way to generate a monthly passive income of $150?

Wesfarmers may not be a household name for many Aussies, but the company does own a number of leading retailers including Bunnings, Kmart, Officeworks, Target and Priceline.

The company summarises its operations as being the following: home improvement and outdoor living, apparel and general merchandise, office supplies, health, beauty and wellbeing, chemicals, energy and fertilisers (WesCEF), and industrial and safety products.

Wesfarmers aims to provide long-term shareholder returns to investors. With that in mind, the company says:

With a focus on generating strong cash flows and maintaining balance sheet strength, the group aims to deliver satisfactory returns to shareholders through improving returns on invested capital. As well as share price appreciation, Wesfarmers seeks to grow dividends over time commensurate with performance in earnings and cash flow. Dependent on upon circumstances, capital management decisions may also be taken from time to time where this activity is in shareholders’ interests.

How to generate $150 of monthly income

Wesfarmers doesn’t pay a dividend every month, so it can’t technically produce ‘monthly income’. But, investors can think of the annual total as an amount that can be split up into 12 equal payments.

For a monthly income of $150, investors would need to receive $1,800 of annual dividends. That’s a fair amount of cash, but achievable.

According to Commsec, Wesfarmers is expected to pay an annual dividend per share of $1.87 in FY23 and $2.20 in FY25.

Using the FY23 payment level, investors would need 963 Wesfarmers shares to get the required level of monthly income. This would come at a cost of around $47,000.

But, if the goal is to receive $1,800 of annual income by 2025, meaning $150 of monthly income, then using the projected FY25 dividend per share of $2.20, investors would only need to buy 819 Wesfarmers shares. This would come at a cost of $40,000.

Of course, I would suggest that diversification is a useful strategy. If $40,000 represents an investor’s portfolio, then I’d suggest adding other (ASX) shares to lower concentration risk. An effective exchange-traded fund (ETF) could provide that diversification.

Foolish takeaway

Wesfarmers is a very effective ASX dividend share in my opinion, I think it’s one of the best choices for dividends out of the large ASX blue-chip shares.

The post Here’s how much I’d need to invest in Wesfarmers shares to generate a $150 monthly income appeared first on The Motley Fool Australia.

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• Morgans names the best ASX dividend shares to buy now
• How much would I need to invest in ASX income shares to earn $500 a month?
• 2 ASX passive income stocks for the next 10 years and beyond
• Is right now the time to buy Wesfarmers shares for passive income?
• How can I hope to retire rich when the share market is falling?

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Pro Medicus Limited (ASX: PME) shares have been pushing higher this week.

This means that since this time last week, the ASX 200 health imaging technology company’s shares have risen 3.5%.

That’s despite the market selloff and news that insiders have been selling a large number of shares.

Insiders sell $125 million of this ASX 200 stock

Yesterday, Pro Medicus revealed that its co-founders Dr Sam Hupert and Anthony Hall have each sold 1 million shares during the current trading window.

Dr Hupert, who is also the CEO of the ASX 200 healthcare stock, received an average of $62.22 per share. This represents a total consideration of $62.22 million.

Anthony Hall, who is an executive director, received the same price and consideration for his parcel of shares.

The good news is that the two co-founders still have a considerable shareholding leftover. In fact, these sales accounted for less than 4% of their individual holdings.

Furthermore, their remaining shareholdings combined equate to over 50% of Pro Medicus’ shares on issue. Clearly, their interests remain firmly aligned with shareholders.

It is a similar story for the ASX 200 stock’s chairman, Peter Kempen AM, who earlier this week revealed the sale of 50,000 shares. He has been left with 629,082 shares.

Why are they selling?

No explanation was given for the co-founders’ sales. The company merely stated:

The sale, to local institutions, was done at market (0% discount), reflecting strong demand by institutional investors. Dr Hupert and Mr Hall are actively engaged in the company as executives and board members and are committed to its future. They remain the two key stake holders in the company with their combined holding post this recent sale in excess of 50%.

The ASX 200 stock also revealed that “Dr Hupert and Mr Hall re-affirmed that they do not intend to sell any further shares in PME in the foreseeable future.”

Pro Medicus’ chair did explain the reason for his sale. He advised:

The sale was part of a rebalancing of the superannuation fund’s portfolio interests. No further sales by interests associated with Mr. Kempen are contemplated in the foreseeable future.

Should you be concerned?

While insider selling is often something to be concerned about, this doesn’t appear to be the case this time.

Given how large their shareholdings remain and how institutional investors were more than happy to snap up shares at market prices, it could be argued that this is a net positive outcome.

The post Founders sell off $125 million worth of this ASX 200 company’s stock. What’s going on? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Thursday
• 2 ASX 300 directors who’ve each sold over $3 million of their company shares in a week
• Investing as little as $25 a week could help me retire with $104,000 a year in passive income!
• 2 ASX 200 healthcare shares just upgraded by Citi analysts

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

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Ask A Fund Manager

The Motley Fool chats with the best in the industry so that you can get an insight into how the professionals think. In this edition, Discovery Fund portfolio manager Chris Bainbridge and Mark Devcich name the ASX share they’d back for years, and why PE ratios are not as important as you think.

The ASX share for a comfortable night’s sleep

The Motley Fool: If the market closed tomorrow for four years, which stock would you want to hold?

Chris Bainbridge: Our answer here is we won’t take you literally that the market was going to close, because if the market was going to close, it wouldn’t be great news for the stock. 

So the company that we believe is a great hold for the next four years is Hub24 Ltd (ASX: HUB), but appreciate that if the market truly closed down, it really wouldn’t get business.

MF: I totally know what you mean. The scenario itself would be bad for the company, but if the question wasn’t meant to be taken literally, that would be your pick.

CB: Yeah, absolutely. So what does Hub do? It’s an investment and superannuation platform. What does that actually mean? As everyone’s probably aware, Hub allows its advisors to manage their clients’ interests, whether that’s onboarding a client, buying and selling shares on a platform, or doing back-end reporting, whatever you like.

Hub was 30 cents back in 2015 and $28 today. We still believe it’s a buy for a number of reasons. One, the platform industry is over $1 trillion. Hub only has a 5% market share of that industry, but is actually taking 11% of all gross flows and along with their key competitor, Netwealth Group Ltd (ASX: NWL), we believe that flows will continue to move towards the independent platform providers.

The second tailwind is the right[s] to managed accounts. So advisors, post the Royal Commission, have been [seeking] efficiency from their business, and one of the ways of doing that is utilising managed accounts. Now Hub’s the leading provider of managed accounts and again, it’s another strong tailwind for their business. 

Hub’s revenue is reasonably predictable. They pop an administration fee on, that’s 3,700 advisors who use the platform. People are absolutely key in terms of the process… We look at key management at Hub, whether it’s [chair] Bruce Higgins or [chief executive] Andrew Alcock or financial CO called Jason Entwistle, they all have long tenure and they all have, certainly, skin in the game — so gives you confidence. That’s what we like to see.

Finally, it’s just the earnings they’ve reached. Hub was moving $4.4 million in 2015 and in the most recent half, the platform business for Hub made over $80 million of annualised EBITDA and still growing strongly, so it’s trading sub-20 times FY24, growing over 20%. Highly sticky recurring revenues and there’s upsides from transitions, so we believe that Hub will continue to take share and continue to compound.

Looking back

MF: Is there a move that you regret from the past? For example, a missed opportunity or buying a stock at the wrong timing or price.

Mark Devcich: I guess the biggest missed opportunity is probably not starting Discovery 10 years ago! 

There has been this massive tailwind from equity for the last decade of compressing interest rate, and it has made sense to be fully invested in great stock over that time, and that if I was to probably put the biggest mistake I’ve made is not adhering to that kind of positioning and thinking about timing markets in the short term, which is very difficult to do.

MF: Anything regrets for you, Chris?

CB: The biggest mistake probably that I’ve made is not buying Premier Investments Limited (ASX: PMV) at 50 cents because the P/E multiple was too high.

[Editor’s note: Premier shares are trading around $26 now.]

There were definitely no issues with the company at the time, ticked a lot of the boxes we had, founder-led management team, high market leader, high growth in international markets, operating leverage, and we purely got hung up on the multiple. I guess we have learned that lesson. 

A lot of people in the past have pointed out companies like Hub are expensive, but obviously you can see they’ve continued to compound for good reason. So just about being able to take a bit of a longer-term view rather than getting hung up on a one-year of good P/E.

The post The one ASX share we’re holding onto for dear life: experts 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 positions in and has recommended Hub24 and Netwealth Group. The Motley Fool Australia has positions in and has recommended Hub24 and Netwealth Group. The Motley Fool Australia has recommended Premier Investments. 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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When it comes to dividends, Rio Tinto Ltd (ASX: RIO) shares are a popular option for investors.

And it isn’t hard to see why.

Every year, the mining giant shares a decent portion of its earnings with shareholders in the form of dividends. This has led to tens of billions of dollars being returned shareholders in recent years.

The good news for investors is that Goldman Sachs is forecasting some big dividend payments in the years to come.

It expects fully franked dividends per share of US$4.23 (A$6.35) in FY 2023 and then US$5.46 (A$8.20) in FY 2024. Based on the latest Rio Tinto share price of $114.73, this will mean yields of 5.5% and 7.15%, respectively.

In light of the above, investors may be wondering what it would take to generate monthly passive income of $500 from Rio Tinto’s shares. Let’s take a look.

How to make $500 of monthly income from Rio Tinto shares

Firstly, like most ASX shares, Rio Tinto shares don’t pay monthly dividends to shareholders.

Instead, the miner pays an interim dividend in September and a final dividend in April. So, investors are going to have to be disciplined and take their bi-annual dividends and redistribute them into monthly instalments.

Let’s get started. $500 of monthly income is the equivalent of $6,000 per year.

Based on Goldman Sachs’ estimates above, in order to generate $6,000 in dividends, you would need to own approximately 945 Rio Tinto shares. This is the equivalent of an investment of $108,420.

What about future income?

The good news is that if Goldman is on the money with its estimates, your pay check would rise to approximately $646 per month or $7750 per year in FY 2024 thanks to a dividend increase.

Another positive is that the broker believes that Rio Tinto shares are undervalued at the current level. It has a buy rating and $131.70 price target on them.

If it were to rise to that level, your 945 shares would have a market value of almost $125,000. That’s over $16,000 greater than your original investment.

All in all, this mining giant could be a top option for income investors to consider thanks to the combination of big dividends and bigger potential capital gains.

The post How to generate $500 of monthly income from Rio Tinto shares appeared first on The Motley Fool Australia.

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More reading

• Is it time to buy ASX 200 iron ore shares right now?
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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 fortunes of ASX shares of iron ore producers very much correlate to the prospects for the global economy.

Although western economies are looking pretty sick (or at least uncertain) at the moment, China’s post-COVID reopening since late last year has many experts thinking demand could soar for iron ore.

One keen-eyed investor noted that last week the Chinese Communist Party set, by its historical standards, a modest 5% economic growth target for this year.

He, therefore, wondered whether iron ore miners are still attractive to buy at the moment.

Shaw and Partners portfolio manager James Gerrish set out to answer this conundrum:

Not hitting the panic button yet

The short answer is that Gerrish’s team would still buy into iron ore producers.

“The economic news flow hasn’t been kind over the last week, but we aren’t hitting the panic buttons yet!” Gerrish said in a Market Matters Q&A.

However, he would look to buy them at the best short-term price.

“We still like iron ore miners into dips,” he said.

“BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO), for example, are still trading well above last week’s low even after trading ex-dividend 90c and $3.26 fully franked.”

The wild volatility in the current market should not detract from the long-term bullishness, he added.

Since Gerrish made those comments, BHP, Rio Tinto and Fortescue Metals Group Limited (ASX: FMG) shares have all fallen, to perhaps open up a buying opportunity.

Goldman Sachs is rating Rio Tinto shares as a buy, predicting a juicy 5.35% and 6.9% dividend yield in each of the coming two financial years.

“Goldman Sachs has a buy rating and price target of $131.70 on the miner’s shares,” reported The Motley Fool’s James Mickleboro.

“This is due to their ‘compelling valuation’ and the company’s ‘return to production growth in 2023.’”

The Rio Tinto share price is up 7.6% over the past 12 months.

BHP, which is 3.3% lower than where it was a year ago, is currently rated as a buy by just seven out of 25 analysts surveyed on CMC Markets.

But that’s not as bad as Fortescue, which is currently recommended as a sell by 13 out of 17 analysts.

The Fortescue share price is now actually 21% higher than it was a year ago.

The post Is it time to buy ASX 200 iron ore shares right now? appeared first on The Motley Fool Australia.

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More reading

• Why Bendigo and Adelaide Bank, BHP, IPH, and Woodside shares are dropping
• Why is the BHP share price tumbling 4% today?
• Why is the Rio Tinto share price diving 5% on Thursday?
• Brokers name 2 high yield ASX 200 dividend shares to buy now
• Fortescue share price marching higher as green hydrogen plans heat up

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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