If you’re building a retirement portfolio, then you may be on the lookout for quality ASX dividend shares to buy. Two unstoppable ASX dividend shares that could act as the foundation of a portfolio are named below.

Both of these ASX dividend shares have bright long term growth prospects and provide investors with attractive yields. Another positive is that analysts believe they are trading at levels that offer meaningful upside potential for investors.

Here’s what analysts are saying about them:

Transurban Group (ASX: TCL)

The first ASX dividend share that could be a top option for an retirement portfolio is Transurban.

Transurban is one of the world’s leading toll road operators. It owns a portfolio of integral roads such as CityLink in Melbourne, the Cross City Tunnel in Sydney, and AirportlinkM7 in Brisbane. It also has a lucrative pipeline of development projects that look likely to be supportive of growth over the next decade and beyond.

Analysts at JP Morgan are positive on the company and have a buy rating and $15.00 price target on its shares. The broker has been pleased with improving traffic trends and highlights the company’s positive exposure to inflation.

As for dividends, JP Morgan expects dividends per share of 60 cents in FY 2023 and then 63 cents in FY 2024. Based on the current Transurban share price of $13.69, this implies yields of 4.4% and 4.6%, respectively.

Woolworths Limited (ASX: WOW)

Another ASX 200 dividend share for investors to consider for a retirement portfolio is retail giant Woolworths.

It is the company behind the eponymous supermarket chain, Countdown supermarkets in New Zealand, and Big W. In addition, the company has been boosting its exposure to the pet accessories and food market through recent acquisitions.

Goldman Sachs is a fan of the company and appears to see it as a great option for a portfolio. So much so, it has a conviction buy rating and $41.70 price target on the company’s shares.

The broker likes Woolworths due to its belief that it is on a “pathway to deliver ~3% sales and ~9% NPAT FY22-25e CAGR.” It also feels that share price weakness this year is “providing a value entry point to a quality player.”

As for dividends, the broker is forecasting fully franked dividend yields of 3% in FY 2023, 3.3% in FY 2024, and 3.5% in FY 2025.

The post Building a retirement income portfolio? Buy these unstoppable ASX dividend shares – analysts appeared first on The Motley Fool Australia.

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More reading

• Little downside protection for popular ASX 200 shares as 2023 looms a much tougher year for blue chip stocks
• Bought $1,000 of Woolworths shares 10 years ago? Here’s how much dividend income you’ve received
• Brokers name 2 ASX dividend shares to buy next week
• Shopping spree: What happened to the Woolworths share price today?
• Brokers name 3 ASX shares to buy today

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

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The ASX share market has seen plenty of volatility this year. After such a rocky year, investors are now turning attention. How are things going to go?

‘Invest for the long term’ is an often-advised suggestion when it comes to ASX shares. But, it can be easy to get wrapped up in what’s going to happen next month or even next year.

I’d guess that many people aren’t investing with a one-year timeline in mind, so why do people focus so much on the short-term forecast?

Investors that can see through the noise of short-term thoughts and volatility may be able to identify long-term opportunities.

Don’t predict, but 2023 could be bumpy

The Motley Fool’s Scott Phillips was recently asked about what might happen in 2023. His response was full of wise words. Phillips’ initial response was:

Let me start with a quote from JP Morgan himself, not JP Morgan, the investment bank, JP Morgan, John Pierpont Morgan himself. When asked what the market will do, he gave the very best answer. He said it will fluctuate. So that’s my prediction for 2023.

My prediction is, people are going to keep predicting. But my advice is, don’t try to predict what’s going to happen next.

But what I would say about 2023, is a bit like I talked about in 2022, prepare for what’s likely to be a bumpy ride. I say bumpy ride economically, but also on the market because we simply don’t know what’s coming next.

But, he did point out that national savings is declining, which could mean there’s “less money going to be spent”.

Phillips also suggested that the RBA rate rises to reduce inflation could put pressure on discretionary spending and on the economy in general.

He suggested that the combination of headwinds that are happening right now raises “the rise of a potential recession in Australia over the next six months”. However, for now, the RBA is not predicting an official recession – it thinks the economy could grow 1.5% in 2023 and 2024.

We have seen the fall of the share prices of some ASX retail shares in anticipation of a downturn, such as Wesfarmers Ltd (ASX: WES).

Think about ASX shares for the long term

Phillips also said that investors are trying to focus on the little things, rather than being largely correct about the big picture.

He pointed out that it’s not the short term, but the long term that counts with ASX shares. Look at the great businesses that can keep getting stronger:

People are so desperately trying to get the little things right. And maybe missing the opportunities. Just get the big thing, right.

My broad point is, businesses that are going to be meaningfully bigger and better in five or 10, 15 years time, it doesn’t matter what happens to the next year, it’s just completely irrelevant. As long as they make it through without going broke. You need to make sure they’re not going to go broke — so careful of debt — and be a business that’s going to be able to maintain a lead in front of their competitors. Whether it’s product or price or brand or cost or something, whatever separates them from the rest. The best businesses tend to keep getting better.

The post Don’t try to predict where ASX shares go in 2023, do this instead: Scott Phillips appeared first on The Motley Fool Australia.

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More reading

• Why this blue-chip stock is a no-brainer buy for dividend growth investors
• Bought $1,000 of Wesfarmers shares 10 years ago? Here’s how much dividend income you’ve received
• If I was 40 and had never invested, here’s how I’d aim to build a $500,000 ASX share portfolio
• Should you buy Wesfarmers stock before it pops?
• Morgans names 2 of the best ASX 200 dividend shares to buy in December

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

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On Wednesday, the S&P/ASX 200 Index (ASX: XJO) was back on form and charged notably higher. The benchmark index rose 1.3 % to 7,115.1 points.

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

ASX 200 expected to rise

The Australian share market looks set to rise again on Thursday following a strong night of trade on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 52 points or 0.75% higher this morning. In late trade in the United States, the Dow Jones is up 1.6%, the S&P 500 has risen 1.55%, and the NASDAQ has climbed 1.7%.

Oil prices charge higher

Energy shares Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a solid day after oil prices charged higher on Wednesday night. According to Bloomberg, the WTI crude oil price is up 2.75% to US$78.33 a barrel and the Brent crude oil price is up 2.85% to US$82.26 a barrel. Oil prices climbed after data showed a larger-than-expected draw in U.S. crude stockpiles.

Goldman retains its neutral rating on Pilbara Minerals

Despite recent weakness in the Pilbara Minerals Ltd (ASX: PLS) share price, Goldman Sachs has retained its neutral rating with an improved price target of $4.70. The broker said: “While near-term prices support a strong c.10-20% FCF yield over and above planned incremental capex spend, we see this as priced in trading at ~1x NAV on GSe LT US$1,000/t spodumene (peer average ~1x).”

MinRes rated as a buy

The Mineral Resources Ltd (ASX: MIN) share price could be good value according to analysts at Morgans. This morning, the broker initiated coverage on the miner and mining services company with an add rating and $94.00 target price. It said: “MIN is a business that is transforming from being primarily leveraged to high-cost / shortlife iron ore operations to low-cost / long-life iron ore and lithium assets.”

Gold price edges higher

Gold miners Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) could have a mildly positive day after the gold price edged higher overnight. According to CNBC, the spot gold price is up 0.1% to US$1,826.5 an ounce. A firmer US dollar stopped the precious metal from rising further.

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

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More reading

• Could ASX 200 gold shares be ‘at another pivot point’?
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Why are ASX 200 gold shares having such a stellar run today?
• Why European Lithium, Evolution, Medadvisor, and REA shares are charging higher

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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ASX 200 gold shares soared on Wednesday, but could a ‘pivot point’ for the gold price be on the way?

Gold producers on the ASX 200 include Evolution Mining Ltd (ASX: EVN), Newcrest Mining Ltd (ASX: NCM), and Northern Star Resources Ltd (ASX: NST).

Evolution shares surged 8.1% yesterday, while Newcrest Mining shares leapt 6.49%. The Northern Star Resources share price gained 3.99%.

It follows a rise in the spot price of gold which is hovering around its highest level in six months.

Let’s check the outlook for the gold price.

What’s ahead for gold?

Evolution Mining, Newcrest Mining, and Northern Star Resources are all major gold producers. Certainly, the price of gold can impact their cash inflows from gold sales.

Now ANZ commodity strategists Daniel Hynes and Soni Kumari contend gold appears to be at another “pivot point” amid easing inflation.

Hynes and Kumari noted lower-than-expected inflation in the US is putting downward pressure on the US dollar. In an ANZ research report, analysts commented:

This, along with lower real yields, is allowing gold to retest USD1,800/oz. Tactical positioning is largely driving investment demand, but strategic buying of gold ETFs hasn’t emerged. Central bank purchases are robust.

The strategists also noted gold performs predictably around recessions “with some exceptions”. Hynes and Kumari said:

We expect the US to enter a recession in 2023, with GDP falling to 0.2% y/y and contracting by 0.8% q/q in Q3. The economic growth outlook is compounded by weakness in Europe as it faces ongoing geopolitical risks and energy shortages.

This backdrop is typically positive for gold. Gold prices tend to come under pressure ahead of recessions, with returns over the six months before a recession averaging 2%. It then tends to outperform equities during recessions, with average returns of 16%. For the six months after a recession, gold continues to deliver decent gain.

Meanwhile, City Index senior market analyst Matt Simpson has estimated a gold price in 2023 of between US$1600 and US$1900. In comments to the Motley Fool, he noted central banks in China and India are forecast to “continue providing support” for gold in 2023. However, he added:

Yet with the Fed likely to go above 5% interest rates and hold them there, it should cap upside potential for gold.

We therefore expect a ‘below average’ high-to-low range next year. Cycles suggest gold may have printed an important low in September, and enjoy buying pressure in the first half of 2023.

Our estimate range for gold in 2023 is $1600-$1900.

The post Could ASX 200 gold shares be ‘at another pivot point’? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Why are ASX 200 gold shares having such a stellar run today?
• Why European Lithium, Evolution, Medadvisor, and REA shares are charging higher
• 5 things to watch on the ASX 200 on Wednesday

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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Are we heading for a global recession in 2023 or is the worst already behind us? With so many conflicting expert opinions floating around, it’s impossible to know with any certainty.

But what we do know for sure is that the stock market has never NOT bounced back to reach new record highs following its down periods.

Whilst a rebound might not happen next week or next month, if history is anything to go by, it will definitely happen.

So, we asked our Foolish contributors which ASX growth shares they think are worth jumping on now to make the most of the coming bounce back.

Here is what the team came up with:

7 ASX growth shares for a bounce back (smallest to largest)

• Temple & Webster Group Ltd (ASX: TPW), $516.22 million
• Jumbo Interactive Ltd (ASX: JIN), $887.81 million
• Life360 Inc (ASX: 360), $1.02 billion
• Webjet Limited (ASX: WEB), $2.34 billion
• Altium Limited (ASX: ALU), $4.61 billion
• Domino’s Pizza Enterprises Ltd (ASX: DMP), $5.67 billion
• Xero Limited (ASX: XRO), $10.3 billion

(Market capitalisations as of 21 December 2022)

Why our Foolish writers love these ASX shares

Temple & Webster Group Ltd

What it does: Temple & Webster is Australia’s largest pure-play online retailer of furniture and homewares. It sells over 200,000 products from hundreds of suppliers, and it also has a drop-ship model, where products are sent directly to customers by suppliers. This enables “faster delivery times, reduces the need to hold inventory, and allows for a larger product range”.

The company also has a private label range and a website called The Build that is focused on home improvement products like flooring, cabinets, plumbing, lighting, curtains, and so on.

By Tristan Harrison: The Temple & Webster share price has sunk by over 60% in 2022 which, in my opinion, makes it look like pretty great value.

While lockdowns 12 months ago make it difficult for the company to beat its year-over-year numbers, it is expecting to return to “double-digit growth during this financial year”.

Temple & Webster is also focused on unit economics and profitability. It’s expecting an earnings before interest, tax, depreciation and amortisation (EBITDA) profit margin of between 3% and 5%. Longer term, margins could improve thanks to more private label sales, marketing and variable cost efficiencies, and scale benefits for key costs like freight and cost of goods.

Adoption of digital shopping for home items in Australia is predicted to rise from its current level of 17% of the whole market. In the United Kingdom, online shopping for furniture and homewares was around 30% of the entire market in 2021. This suggests considerable potential upside for online retailers like Temple and Webster over time.

Motley Fool contributor Tristan Harrison does not own shares of Temple & Webster Group Ltd.

Jumbo Interactive Ltd

What it does: Jumbo Interactive operates an online platform for the sale of lottery tickets and fundraising activities. The company’s platforms are now active across Australiasia, the United Kingdom, and Canada – reaching 4 million active players.

By Mitchell Lawler: This year has not been kind to the Jumbo Interactive share price, despite rather solid results. Since the beginning of 2022, shares in the online lottery operator have tumbled by around 26%.

But, in my mind, Jumbo is in the strongest position it has ever been. The company completed its acquisition of StarVale in November, further strengthening its position in the UK. The deal marks another display of management’s ability to deploy its profits to make earnings-accretive acquisitions globally.

This is a company that generates post-tax profits at a 30% margin and holds nil debt. If the Jumbo management team can continue to efficiently use capital to expand operations, today’s share price could look cheap in the event of a market rebound.

Motley Fool contributor Mitchell Lawler owns shares of Jumbo Interactive Ltd.

Life360 Inc

What it does: Life360 is the technology company behind the eponymous Life360 freemium mobile app, which boasts 47 million monthly active users. It offers users features that range from communications to driving safety and location sharing.

By James Mickleboro: It has been a tough year for the Life360 share price. The market’s sudden aversion to loss-making tech companies means that the company’s shares are down almost 50% year to date. This is despite Life360 expecting to more than double its revenue to between US$225 million and US$240 million this calendar year.

The good news is that its loss-making days are almost over, with management expecting the company to be cash flow positive next year. In the meantime, Life360’s cash balance of approximately US$85 million is materially more than needed to get it through to breakeven.

In light of this, I think now is the time to focus on the company’s very strong, long-term growth potential in a huge US$12 billion total addressable market, globally. I also suspect a re-rating of Life360 shares could happen when the market rebounds and the company achieves positive cash flow.

Motley Fool contributor James Mickleboro owns shares of Life360 Inc.

Webjet Limited

What it does: Most Australians likely know Webjet as an online travel agency, but the company’s business covers much more ground than that. Perhaps its most notable additional foray is its WebBeds business-to-business offering – a provider of accommodation services to the travel industry.

By Brooke Cooper: The Webjet share price has outperformed in 2022, rising almost 20% year to date to trade at $6.18 at the time of writing. However, that’s still around 37% lower than it was prior to the onset of the COVID-19 pandemic.

Fortunately, Goldman Sachs has tipped the stock to regain notable ground. The broker believes Webjet is a conviction buy, recently slapping it with a $6.90 price target.

Such confidence comes as the company exits the pandemic far larger than it entered. And that growth might just be the start.

As my Fool colleague reported last week, Goldman Sachs expects Webjet’s earnings to boast a six-year compound annual growth rate (CAGR) of 15.3%.

Motley Fool contributor Brooke Cooper does not own shares of Webjet Limited.

Altium Limited

What it does: Altium is a multinational software company that focuses on electronics design systems for 3D printed circuit board (PCB) design and embedded system development.

By James Mickleboro: Another ASX growth share I think could be a buy right now is Altium. Although its shares have fared a lot better than some other tech stocks in 2022, they are still down meaningfully compared to the benchmark S&P/ASX 200 Index (ASX: XJO).

And when the market rebounds, I think Altium could rebound along with it. Particularly given the company’s very bright long-term growth prospects.

Thanks to Altium’s leadership position in the industry, and favourable tailwinds such as growth in demand for the Internet of Things and artificial intelligence, management is aiming to grow revenue to US$500 million by 2026 with an EBITDA margin of 38% to 40%.

This will be more than double FY2022’s revenue of US$220.8 million and an improvement on FY2023’s EBITDA margin guidance of 35% to 37%. I expect this to underpin strong profit growth over the coming years, which could help drive Altium shares higher.

Motley Fool contributor James Mickleboro owns shares of Altium Limited.

Domino’s Pizza Enterprises Ltd

What it does: Domino’s is Australia’s largest pizza chain, offering delivery, takeaway, and dine-in restaurant services nationally. It also operates internationally, with a total of over 2,800 stores across 10 markets.

By Matthew Farley: The Domino’s Pizza share price has dropped almost 45% year to date, but some experts believe this lower price now offers great value for investors.

This includes one broker from Morgans who slapped Domino’s shares with a price target of $90 earlier this month. That makes for a potential 38% upside from the current share price, at the time of writing.

The broker went on to say that Domino’s has been battling with the headwinds of lower sales and a higher cost basis for its products. However, these issues were described as being “transitory in nature”. If this proves to be correct, the company’s revenues and margins could be poised to improve significantly, moving forward.

Motley Fool contributor Matthew Farley does not own shares of Domino’s Pizza Enterprises Ltd.

Xero Limited

What it does: Xero is a provider of cloud-based accounting software. The platform helps small-business users efficiently manage the financial and regulatory requirements of running their companies.

By Sebastian Bowen: Xero shares have had a very rough year or so. This was an ASX 200 stock that was trading at more than $150 a share back in November 2021, more than double the current price. So, you’d think that Xero’s business has been facing some kind of calamity.

Well, not quite. Back in May, Xero reported that it had grown subscribers by 19%, revenues by 29% and earnings by 11% over the 12 months to 31 March 2022.

More recently, Xero reported a 30% rise again in revenues covering the six months to 30 September 2022, with earnings up 11% and subscribers growing by 16%.

If there is a stock market rebound next year, I think it’s likely that investors will find a new appreciation for this ASX growth share.

Motley Fool contributor Sebastian Bowen does not own shares of Xero Limited.

The post Top ASX growth shares to buy for a stock market rebound appeared first on The Motley Fool Australia.

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More reading

• 2 cheap ASX dividend shares to buy now: brokers
• Here’s how I’d invest $10,000 in ASX shares for 2023
• Top brokers name 3 ASX shares to buy next week
• Would you be rich if you’d invested in these ASX shares 10 years ago?
• Why are ASX 200 tech shares being fried on Friday?

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium, Jumbo Interactive, Life360, Temple & Webster Group, and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Domino’s Pizza Enterprises, Jumbo Interactive, 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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If you’re looking to boost your passive income with some dividend shares, then you might want to look at the two listed below.

Both dividend shares are rated as buys and expected to provide investors with attractive yields in the near term. Here’s what you need to know about them:

Healthco Healthcare and Wellness REIT (ASX: HCW)

The first ASX dividend share to look at is the Healthco Healthcare and Wellness REIT.

Goldman Sachs is a fan of this health and wellness focused real estate investment trust. This is due to its strong balance sheet, positive tenant mix, and the resilient valuations in the healthcare sector. It commented:

[T]he REIT remains one of our top picks in the sector given 1) its net cash position with over $450mn of liquidity, providing flexibility for near term opportunities, 2) its diversified mix of strong tenant covenants in sub-sectors that are majority government-backed across the care spectrum, mitigating potential tenant credit risks, 3) Healthcare and childcare assets valuations have remained resilient, 4) the expansive forecast future demand for assets across the care spectrum, underpinning development opportunities, and 5) inexpensive valuation.

Goldman has a conviction buy rating and $2.05 price target on its shares.

In addition, the broker is forecasting dividends per share of 7.5 cents in both FY 2023 and FY 2024. Based on the current Healthco Healthcare and Wellness REIT unit price of $1.69, this will mean yields of 4.4% for income investors.

Rural Funds Group (ASX: RFF)

Another ASX dividend share that could be a buy is Rural Funds.

It is an agricultural focused real estate investment trust (REIT) that owns a portfolio of assets across a number of agricultural industries. These include orchards, vineyards, water entitlements, cropping, and cattle farms.

Bell Potter is positive on the company and believes its shares are trading at a very inviting level. It recently commented:

Discounts of this magnitude to adjusted NVA have only been seen in the period after its compliance listing (2014-15) and following the issue of the Bonitas short report (in Aug-Sep’19). To this end the current discount to adjusted NAV reflects what historically would be considered an attractive entry point and we upgrade our rating from Hold to Buy.

The broker currently has a buy rating and $2.75 price target on Rural Funds shares.

As for dividends, it is forecasting an 11.7 cents per share dividend in FY 2023 and then a 12.7 cents per share dividend in FY 2024. Based on the current Rural Funds share price of $2.46, this represents yields of 4.75% and 5.15%, respectively.

The post Buy these ASX dividend shares for a passive income boost: analysts appeared first on The Motley Fool Australia.

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More reading

• Brokers name 2 ASX dividend shares to buy next week
• Near a 52-week low, this enticing ASX dividend share could be bottoming out
• Boost your passive income with these ASX dividend shares: analysts
• 2 ASX dividend shares that have raised their payouts by 20% in 5 years
• 40% sale! 2 cheap ASX shares to buy for a better 2023: fundie

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Rural Funds 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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Exchange-traded funds (ETFs) on the ASX have become increasingly popular in recent years, as they offer a simple way for investors to diversify their portfolios in a single transaction. However, with so many ETFs available, it can be difficult to know if you’re paying too much.

As the late and great investor, Benjamin Graham said, “A great company is not a great investment if you pay too much for the stock.” While an ETF isn’t just one company — rather a basket of companies — the message still applies.

What our resident expert suggests

The most obvious cost when it comes to investing in ETFs is the management expense ratio, also known as the management fee. This fee is charged by the issuer of the product to remunerate themselves for conducting the activities involved with managing the funds in the ETF.

Luckily, Motley Fool Australia chief investment officer Scott Phillips discussed this during a recent Sharesies webinar. Speaking with Sharesies’ Australia manager, Brendan Doggett, Phillips explained how the management fee is typically determined, stating:

Depending on what index it is, in which countries, and how difficult or easy it is for the fund manager to buy those shares — it can [vary]. I think the lowest one I’ve seen is 0.03%. I’m pretty sure that’s the Vanguard S&P 500 or total market index. That’s like 30 cents for every $1,000… really, really small.

On the other hand, you will see some are more than 1% and that might be, I don’t know, the Botswana clean energy and oil index, or something, right. So the harder it is to get that market, the more you have to pay, the less liquidity, the fewer people are investing in it the more you have to pay. 

The management fee is part and parcel of investing in ASX ETFs. However, there are ways to make sure you’re not paying more than necessary. Phillips provided one way to investigate the costs associated with an ETF, suggesting:

The best thing to do is if you find an index you like — you want to track the ASX 200 or 300, for example — then find the ETF providers that do that index and compare those providers if you want to get the cheapest price you can for the investment strategy you want to follow.

More ways to assess the costs of an ASX ETF

While the management fee is typically the most important expense for an ETF, there are other factors to consider. These additional traits of an ETF aren’t necessarily classed as costs, but they can impact your returns.

• Trading price versus net asset value
• Bid-ask spread — usually dependent on the level of liquidity for the ETF
• Size of the ETF — larger ETF can mean lower fees than a smaller ETF

Because an ETF is simply a collection of shares in other companies, the unit price should approximately reflect the total sum of securities allotted to each share in the ETF. This value is referred to as the net asset value.

However, sometimes the demand for the ETF can be greater than the underlying assets. While it shouldn’t necessarily make or break an investment, it’s worth looking at whether the ASX ETF is trading at a discount or premium to its net assets.

The post How do you know if you’re paying too much for an ASX ETF? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Here’s a dirt-cheap ASX 200 share with a 7% dividend yield
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• 2 reasons to buy CBA shares before 2023 (and 2 reasons to sell)
• I’m buying JB Hi-Fi stock now while it’s under $44

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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With the returns on cash nearing 4% and heightened economic uncertainty, investors are raising the bar on what they require when investing in ASX 200 shares.

Gone are the days when a 2% or 3% dividend yield was considered adequate. A decent risk-free return from cash parked at the bank means the criteria to invest elsewhere is more stringent. Especially when we could be hurling toward a recession.

The share market sell-off has produced plenty of high-yielders across the S&P/ASX 200 Index (ASX: XJO). Though, as earnings potentially take a hit from tightened budgets, some of these companies might be forced to cut their dividends to a more sustainable level. There’s a good chance ASX-listed retailers will be some of the hardest hit in a recessionary environment.

The 15% year-to-date fall in the Super Retail Group Ltd (ASX: SUL) share price would suggest investors are already anticipating poorer performance. Looking at the company’s recent margins, the concern could be warranted.

A concern for the Super Retail share price?

Trading at a price-to-earnings (P/E) ratio a touch more than 10 times, Super Retail Group looks dirt-cheap compared to the Australian market average of 14.5 times. But the company’s share price isn’t trading at a discount for no reason.

At the annual general meeting, Super Retail management highlighted the segment results of Supercheap Auto, Rebel, BCF, and Macpac. Notably, the company experienced reductions in its gross margins across all segments compared to the previous year, as follows:

• Supercheap Auto: 60 basis point decline in gross margin
• Rebel: 80 basis point decline in gross margin
• BCF: 38% decline in profit before tax
• Macpac: undisclosed decline in gross margin

For the most part, the deteriorating margins were labelled a consequence of increased supply chain costs and a normalisation in promotional activity.

It appears investors are worried that profits could fall further, and this concern might be justified. Between 2016 and 2019, Super Retail Group’s profit margin floated between 2.6% and 5.1%. In FY22, the company’s margin remained above historical levels at 6.8%.

If the company were to return to a margin of say 3.85% (on the same revenue), for example, Super Retail Group would be trading on a P/E of around 17 times based on the current market capitalisation.

Is the dividend yield maintainable?

The all-important question for investors that are assessing whether Super Retail shares are worth buying for the income is: can it stay at these levels?

In FY22, the company coughed up 70 cents per share in dividends. As depicted above, this is around 40% more than its payouts pre-pandemic. There is a chance that dividends could fall from here as profits normalise.

However, as recently reported, Morgans believes there is potential for a special dividend in the future. The broker pointed out that Super Retail Group has accumulated over $250 million worth of franking credits.

The post Here’s a dirt-cheap ASX 200 share with a 7% dividend yield appeared first on The Motley Fool Australia.

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More reading

• Morgans has put these ASX shares on its Christmas wishlist
• Why did ASX 200 retail shares lead the market to fresh 25-week highs today?

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 positions in and has recommended Super Retail Group Limited. The Motley Fool Australia has positions in and has recommended Super Retail Group Limited. 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) has shaken off the malaise that has been gripping it this week and posted a strong gain at this point of Wednesday’s trading session. At the time of writing, the ASX 200 has gained a very healthy 1.35%, which lifts the index to just under 7,120 points.

Hooray. Let’s now dig a little deeper into these market moves by checking out the shares currently at the top of the ASX 200’s share trading volume charts, according to investing.com.

The 3 most traded ASX 200 shares by volume this Wednesday

Evolution Mining Ltd (ASX: EVN)

First up today is ASX 200 gold miner Evolution. So far this Wednesday, a decent 13 million Evolution shares have found a new ASX home. This looks like a consequence of the stellar day Evolution shares are enjoying today.

The gold miner, like its peers, is lifting dramatically after a strong rise in the price of gold overnight. Evolution shares are up a pleasing 7.75% so far today to $3.06 a share.

Liontown Resources Ltd (ASX: LTR)

Next up this session, we have ASX 200 lithium share Liontown Resources. A hefty 14.4 million Liontown shares have traded hands as it currently stands. With no fresh news out of Liontown so far, this volume could be in response to the significant volatility we have seen in Liontown shares on the markets.

Liontown initially started out with a bang this morning, rising as high as $1.40 a share (up almost 2.5%). But investors seem to have gotten cold feet as the day has progressed, with Liontown now down to $1.32 a share, a loss of 2.22% for the session.

Pilbara Minerals Ltd (ASX: PLS)

Third and finally today, we have another ASX 200 lithium share in Pilbara Minerals. This Wednesday has seen a notable 25.38 million Pilbara shares bought and sold on the share market. A very similar situation to Liontown seems to be at work here.

Pilbara also opened strongly this morning, shooting up to a high of $4.02 soon after market open (up more than 3%). But again, investors have had a change of heart as the day has progressed, and Pilbara shares are now down to $3.83 each, a loss of 0.91%.

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

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More reading

• Why are ASX 200 gold shares having such a stellar run today?
• Why European Lithium, Evolution, Medadvisor, and REA shares are charging higher
• Pilbara Minerals share price leaps on positive lithium price update
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today

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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Commonwealth Bank of Australia (ASX: CBA) shares are one of the most popular investments on the ASX. But does this mean that investors should automatically put CBA shares in their share portfolios? Probably not, at least not without some further analysis.

Today, the CBA share price is sitting at $104.89 at the time of writing. That’s only a few dollars off of this ASX 200 bank’s all-time high share price.

So let’s talk about two reasons why you might want to buy CBA shares before 2023, and two reasons why you might not want to.

2 reasons to buy CBA shares right now

Quality

Commonwealth Bank is a business of unquestionable quality. Not only is it the largest bank in Australia by market capitalisation, it is also the most popular financial institution that Australians bank with. CBA has an unrivalled pedigree.

It used to be a government-owned bank before it was privatised in the 1990s, which probably lends it some goodwill from customers. This brand strength can only be a good thing for a long-term investment.

Banks are inflation-resistant investments

ASX bank shares like CBA are often touted as some of the best investments during periods of high inflation. That’s because banks can easily adapt to changing interest rates by almost instantly passing on cash rate changes to their loan products like mortgages.

Rising interest rates also tend to attract more customer deposits as investors put cash in the bank to take advantage of the higher yields on offer from savings accounts and term deposits.

All of this is good news for banks like CBA. And given right now we have some of the highest inflation figures that the economy has seen for decades as we start 2023, a bank like CBA could prove to be a prudent choice. Especially considering the hefty, fully-franked dividends that investors also tend to enjoy from bank shares, which also helps offset the effects of inflation.

2 reasons not to buy CBA shares today

The shares aren’t cheap

By most conventional metrics, CBA shares are not looking cheap right now. The bank has long been able to command a share pricing premium over the other ASX 200 banks. That’s arguably thanks to its quality (see above) and its past share price performance:

But past returns don’t guarantee future profits. Right now, Commonwealth Bank has a price-to-earnings (P/E) ratio of 19.57.

Compare that to National Australia Bank Ltd (ASX: NAB) on 14.45, Westpac Banking Corp (ASX: WBC) on 15.29 and Australia and New Zealand Banking Group Ltd (ASX: ANZ) on 10.1. We can see that CBA is certainly priced more richly than the other banks. A higher P/E ratio can give a share more room to fall in a downturn, so keep that in mind today.

Brokers rate CBA as a sell right now

It’s quite hard to find an ASX broker who is wildly bullish on the CBA share price today. As my Fool colleague James covered earlier this month, Goldman Sachs has recently rated CBA as a sell, with a 12-month share price target of $90.98.

If that turns out to be accurate (not guaranteed, of course) it would certainly not be a prudent move to buy CommBank before 2023.

Brokers at Macquarie agree. Macquarie analysts excised CBA from their model portfolios last month in favour of ANZ. Fellow broker Wilsons has also recently reduced its exposure to all ASX bank shares, including CBA.

The post 2 reasons to buy CBA shares before 2023 (and 2 reasons to sell) appeared first on The Motley Fool Australia.

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More reading

• Is there something strange going on with ANZ shares today?
• Here are the top 10 ASX 200 shares today
• I’d buy these 3 ASX 200 shares in 2023 and hold them for a decade
• Little downside protection for popular ASX 200 shares as 2023 looms a much tougher year for blue chip stocks
• Should I buy NAB shares for 2023?

Motley Fool contributor Sebastian Bowen has positions in National Australia Bank Limited. 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 Macquarie 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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