Investors who own OZ Minerals Limited (ASX: OZL) shares may like to know the company is still open to takeover talks after it rejected a recent offer from BHP Group Ltd (ASX: BHP).

Readers may remember that in August, BHP offered $25 per share to buy the entire OZ Minerals business. However, its board unanimously decided that the proposal “significantly undervalues” the company.

At the time, the OZ Minerals managing director and CEO Andrew Cole said that the miner has a unique set of copper and nickel assets, all with “strong long-term growth potential in quality locations”.

Is a takeover still on for OZ Minerals shares?

While there reportedly haven’t been any more talks between OZ Minerals and BHP, according to The Australian sources, management said the company’s leadership team is still happy to talk.

Speaking to The Australian, the OZ Minerals boss Cole said:

We remain open to in-bounds. We always are happy to talk to third parties but for us today we are continuing to invest in the company and create value for our stakeholders.

It’s a very exciting future for us and we’re stepping now into the age of decarbonisation and electrification. So that puts these assets into a very sought after place, if you like. I feel like we’re very lucky to have this portfolio and we’re going to keep investing in it.

The newspaper asked Cole if he expects BHP to come back with a bigger bid. His response was:

We’re expecting companies to be interested in our portfolio. So the best thing we can do is to create value for our stakeholders and if and when people want to come and talk to us, we’re happy to.

Of course, there’s more to a successful takeover than just talks. BHP seemingly needs to come in with a higher bid to buy all of OZ Minerals’ shares — and it’d need to be good enough for OZ Minerals to accept.

New project to drive value?

Last week, the company announced it had made a final investment decision on the West Musgrave project. The plan is that it will be one of the world’s largest, lowest-cost, lowest-emission copper-nickel projects.

The first concentrate is targeted for the second half of 2025, which is aligned with the beginning of the forecast nickel market deficit.

OZ Minerals says that it has the capacity to fully fund West Musgrave with a new $1.2 billion facility supported by banks, subject to final binding agreements. It is also exploring the potential for a strategic partnership with a minority interest.

In the first five years, the average annual production is expected to be around 35,000 tonnes per annum of nickel and 41,000 tonnes per annum of copper.

OZ Minerals share price snapshot

Despite the boost from the takeover offer, OZ Minerals is down around 5% over the past six months.

The post Why BHP might still have a chance at acquiring OZ Minerals shares appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• BHP shares: Boring or beautiful?
• 5 things to watch on the ASX 200 on Monday
• Why Apollo Tourism, OZ Minerals, SSR Mining, and Whitehaven Coal shares are rising
• 2022 hasn’t been kind to BHP shares. Here’s why I’m holding tight
• OZ Minerals share price higher following $1.7 billion thumbs up

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.

from The Motley Fool Australia https://ift.tt/NHRshza

The Santos Ltd (ASX: STO) share price is starting the week deep in the red.

In morning trade, the energy producer’s shares are down almost 5% to $7.07.

Why is the Santos share price tumbling lower?

Investors have been selling down the Santos share price on Monday following a broad market selloff and significant weakness in oil prices.

In respect to the latter, according to Bloomberg, the WTI crude oil price plunged 5.7% to US$78.74 a barrel and the Brent crude oil price dropped 4.75% to US$86.15 a barrel on Friday night.

This led to the fourth consecutive week of declines for both benchmarks, which is the first time this has happened since December of last year. It means that both WTI and Brent are now trading at their lowest levels since mid-January.

What’s going on?

Traders were selling down oil amid concerns that a global recession could weigh heavily on demand.

Edward Moya, senior market analyst at data and analytics firm OANDA, commented:

Oil tanks as global growth concerns hit panic mode given a chorus of central bank commitments to fight inflation. It seems central banks are poised to remain aggressive with rate hikes and that will weaken both economic activity and the short-term crude demand outlook.

While Santos is highly profitable still with oil prices at these levels, it just won’t be as profitable as many in the market were forecasting if prices don’t rebound.

This could lead to consensus downgrades to earnings estimate and valuations in the near future.

The post Why is the Santos share price sinking 5% today? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 5 things to watch on the ASX 200 on Monday
• 2 surprising ASX shares to buy for the energy transition: Wilsons
• Own Santos shares? Get ready to receive your dividends
• Is the Santos share price ‘starting to resume its uptrend’?
• $18 billion of ASX dividends are being paid out this week. Here’s the lowdown

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.

from The Motley Fool Australia https://ift.tt/0Wd7FI2

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Google’s parent company Alphabet Inc. (NASDAQ: GOOG)(NASDAQ: GOOGL) may be considering an acquisition of image-browsing platform Pinterest (NYSE: PINS). And that’s because Pinterest possesses something extremely valuable that Alphabet would definitely like to have in a changing advertising economy.

Don’t be fooled by a stock price that’s down more than 70% from its all-time high. Here’s the case for Pinterest and its potential suitor.

Where did this crazy rumor even come from?

Alphabet CEO Sundar Pichai spoke at the Code Conference earlier this month. He talked about many things going on with the company, including developments in the advertising market and concerns over artificial intelligence. Late in the talk, however, the interviewer turned the conversation toward mergers and acquisitions (M&A).

When asked if Pinterest was an acquisition target, Pichai stammered, “Look, I can’t comment on a few, on any M&A deals.” He then smiled sheepishly at the interviewer’s suggestion that he could comment if he wanted to do so.

Perhaps Pichai was simply uncomfortable with the entire interview and struggled for an answer regarding Pinterest for this reason. However, the interviewer had just asked Pichai the same question regarding Twitter, Inc.(NYSE: TWTR), which he seemingly answered with ease. Alphabet isn’t looking to buy Twitter, he said. The drama unfolding with Elon Musk has Pichai simply watching with “popcorn.”

Pichai answered the question on acquiring Twitter. He didn’t with Pinterest. And that leads some to believe that Alphabet has indeed reached out to Pinterest about a potential acquisition. 

Why Pinterest is a valuable acquisition target

Pichai’s comments at the Code Conference is just circumstantial evidence. However, it wouldn’t be the first time a big tech company would be interested in buying out Pinterest. PayPal Holdings, Inc.(NASDAQ: PYPL) was reportedly trying to buy Pinterest for $45 billion last year. PayPal’s market capitalisation was around $300 billion at the time compared to Pinterest’s then market cap of around $35 billion.

Both market caps have fallen mightily — PayPal is down to about $105 billion whereas Pinterest is worth about $16 billion. And when it comes to Pinterest, its stock has been crushed because of slumping user metrics. It was once believed that Pinterest could potentially attract billions of users like Meta Platforms, Inc.(NASDAQ: META). However, the company peaked at 478 million monthly active users way back in the first quarter of 2021 and has since steadily declined to where it is today at just 433 million monthly active users.

On the surface, Pinterest’s relevance is dwindling, which hardly seems like a platform worthy of PayPal and Alphabet’s attention. However, Pinterest has steadily increased its monetization, going from $1.04 in average revenue per active user (ARPU) in Q1 2021 to $1.54 in Q2 2022. That’s substantial.

Here’s what Alphabet and PayPal are likely interested in: Pinterest has steadily increased its monetization thanks to its truly unique perspectives and insights into consumer behaviors. Year after year, the company proves it knows what people want with its annual Pinterest Predicts report — the report was proven to be 80% correct in 2021.

For Alphabet’s part, it generates most of its revenue through advertising. But the game is changing for advertising stocks. Consumers are increasingly concerned about privacy, and governments are regulating more. For this reason, Alphabet intends to do away with third-party cookies in 2024. But that risks making its ads less effective, and that would consequently lead to lower ad rates. 

Acquiring Pinterest and its consumer insights could dramatically help it remain more effective at advertising while also doing away with tracking. 

For PayPal, investors often forget it has a merchant side of its business — 35 million active merchant accounts as of the second quarter of 2022, up from 32 million in the same quarter of 2021. Part of the company’s strategy is to provide data on consumer intent to merchants so they can better know what to prioritize. This is exactly what Pinterest could have provided had the deal gone through.

Pinterest is still a valuable company

In the end, we don’t know for sure if Alphabet is really intent on acquiring Pinterest or whether we’ll never hear rumblings of this rumor again. However, I believe we have seen that Pinterest’s business has value even if it’s struggled to create value for shareholders since going public in 2019.

That said, I believe Pinterest is still a stock worth buying today despite its user struggles. Its ARPU growth demonstrates its value to advertisers, likely due to its perspectives on consumer trends. That could make Pinterest an even more attractive platform if the global economy goes into a recession; advertisers would likely decrease spending overall and concentrate spending on platforms where returns are the best. And Pinterest would be a top contender for those concentrated dollars.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Is Google really trying to buy Pinterest? appeared first on The Motley Fool Australia.

(function() { function setButtonColorDefaults(param, property, defaultValue) { if( !param || !param.includes(‘#’)) { var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0]; button.style[property] = defaultValue; } } setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’); setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’); setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’); })()

More reading

• Why buying PayPal is a genius move right now
• Here’s why splitting up Amazon could mean huge returns for shareholders
• Got $1,000? 2 top Warren Buffett stocks to buy for the long term
• Should you really buy stocks now or wait a while longer?
• Could Canva spoil the party of these giant tech stocks?

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Jon Quast has positions in PayPal Holdings and Pinterest. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Alphabet (C shares), Meta Platforms, Inc., PayPal Holdings, Pinterest, and Twitter. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Meta Platforms, Inc., PayPal Holdings, and Pinterest. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

from The Motley Fool Australia https://ift.tt/lEVnXgZ

The Link Administration Holdings Ltd (ASX: LNK) share price is falling again on Monday.

In early trade, the administration services company’s shares are down 11% to $2.93.

This means the Link share price has now dropped 33% since this time last month.

Why is the Link share price falling?

Investors have been selling down the Link share price for a couple of reasons.

One is the broad market weakness following another selloff on Wall Street on Friday. This has seen the ASX 200 index fall 1.5% today.

In addition, the Link share price has come under pressure after its takeover by Dye & Durham finally collapsed.

On Friday evening, Link revealed that three conditions precedent necessary to implement the scheme of arrangement have not been satisfied.

These were the Woodford Matters condition, the UK Financial Conduct Authority condition, and the Luxembourg Commission de Surveillance du Secteur Financier condition.

And with the time for satisfaction of the outstanding conditions now expired and no expectation that they will be satisfied, at the second court hearing, the court declined to make orders approving the scheme and dismissed the proceedings.

As a result, the takeover at $4.81 per share that was approved by shareholders in August will not go ahead.

What’s next?

Link advised that it will pay shareholders a fully franked special dividend of $0.08 per share. The record date for the special dividend will be 30 September, with a payment date of 14 October.

The company also intends to evaluate alternatives for the business, including an in specie distribution of a minimum of 80% of its shareholding in PEXA Group Ltd (ASX: PXA), in order to maximise value for shareholders

Finally, management reaffirmed its guidance for FY 2023. It continues to expects low single digit percentage revenue growth and EBITDA growth of 8%-10%.

The post Link share price crashes 11% after takeover collapse appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 5 things to watch on the ASX 200 on Monday
• Why is the Link share price frozen on Friday?
• Why Imugene, Link, Newcrest, and Zip shares are dropping
• Link share price sinks again amid takeover doubts
• Why Clinuvel, EML, Infomedia, and Link shares are dropping today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Link Administration Holdings Ltd. 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.

from The Motley Fool Australia https://ift.tt/inPxv3A

Shares of mining giant BHP Group Ltd (ASX: BHP) have been on an interesting journey this year to date.

After rallying hard from lows of $31 on November 2021, shares in the miner thrust to a 52-week high of $47.34 on 19 April, before markets took a turn for the worse.

BHP shares then made a swift recovery following some sharp downside. After peaking again at the same yearly high, BHP has swung back into the range shown from August to date on the chart below.

BHP shares – a fair view of fundamentals

Here we have a $193 billion company by market value that trades on a price-to-earnings (P/E) ratio of just 6.4x before the open on Monday.

That’s well behind the GICS Metals & Mining Industry’s median of 10.4x. Meaning BHP trades at a discount to peers.

Assume a hypothetical where BHP paid 100% of earnings to shareholders as a dividend – it would take just 6.5 years to pay back our investment on BHP’s current P/E.

Whereas the industry median would take 10.5 years. That’s what the discount tells us.

In addition, current shareholders enjoy a 12.2% trailing dividend yield, while recognising a 15.6% earnings yield from the company’s $3.99 in trailing earnings per share (EPS).

It was a prosperous three years up to the company’s FY22 results as well. The company booked revenue of more than $65 billion, with annual operating income of $33.44 million on this turnover.

Meanwhile, it produced net cash flow from operations of $29.2 billion, and brought this down to a mammoth free cash flow (FCF) of $23 billion, its highest on record.

The strong performance has the consensus of analyst estimates predicting a $2.25 per share annual dividend for BHP in FY23, with another c.$1.90 per share in FY24, per Refinitiv Eikon data.

This represents forward yields of $5.9% and 4.9% respectively. And with a company of BHP’s stature, there’s good reason to believe it will live up to its name and continue returning capital to shareholders via this route.

It’s also projected to generate $3.09 in EPS for the coming 12 months, with $2.72 in EPS forecast for the following year.

What’s the verdict?

In any sense, these are hardly ‘boring’ numbers.

With the prospects of buying the world’s largest mining company at a discount to peers at just 6.5x earnings – a company that is tipped to return c.6 cents in every dollar in dividends for FY23, and has $23 billion in the last 12 months’ FCF – it’s numbers, not narrative, winning this one.

Despite the optimism from the previous 12 months’ numbers, things seem to cool off a bit when looking ahead.

The share price has pulled back markedly from former peaks along with many other names in the sector.

Exactly 11 out of 20 analysts have it rated as a hold right now, while the other nine still rate it a buy, according to Refinitiv Eikon data. This is up from nine holds and 10 buys in June, respectively.

With BHP shares trading in sideways territory since August, they have still held a 13.6% gain over the past 12 months to date.

The post BHP shares: Boring or beautiful? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 5 things to watch on the ASX 200 on Monday
• 2022 hasn’t been kind to BHP shares. Here’s why I’m holding tight
• How do investors decide which ASX 200 mining shares to buy?
• The history-making BHP dividend is being paid out today. Here’s the lowdown
• Why is the BHP share price lagging the ASX 200 today?

Motley Fool contributor Zach Bristow 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.

from The Motley Fool Australia https://ift.tt/Z6ctjHG

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

Here’s why these ASX dividend shares have been rated as buys:

Centuria Industrial REIT (ASX: CIP)

The first ASX dividend share to look at is Centuria Industrial.

It is the largest domestic pure play industrial REIT on the Australian share market and the owner of a high quality portfolio of in-demand properties.

Demand has been so strong that last month the company revealed that its occupancy rate increased to ~99% with a weighted average lease expiry of 8.3 years. This helped underpin a 22% increase in funds from operations to $111.7 million.

Analysts at Macquarie were pleased with its performance and appear confident on its outlook. The broker currently has an outperform rating and $3.69 price target on its shares.

As for dividends, Macquarie is expecting dividends per share of approximately 16 cents in FY 2023 and FY 2024. Based on the current Centuria Industrial share price of $2.70, this will mean yields of 5.9% for investors.

Medibank Private Ltd (ASX: MPL)

Another ASX dividend share that has been tipped as a buy is Medibank.

It is of course one of Australia’s leading private health insurers, operating the Medibank and AHM brands.

The team at Citi is positive on the private health insurer and recently put a buy rating and $4.00 price target on its shares.

Citi was pleased with Medibank’s full year results and expects more of the same in the coming years. Particularly given its positive exposure to higher interest rates.

In light of this, the broker is expecting Medibank’s shares to provide attractive yields in the near term. It is forecasting fully franked dividends of 15.9 cents per share in FY 2023 and 16.3 cents per share in FY 2024. Based on the current Medibank share price of $3.47, this will mean yields of 4.6% and 4.7%, respectively.

The post Boost your income with these ASX dividend shares: experts appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• What is the outlook for the Medibank dividend in FY23?
• The biggest threats and opportunities for ASX industrial REITs revealed: fund manager
• How this ASX 200 REIT is delivering 5% plus dividend yields: fund manager
• What’s the outlook for the Medibank share price in FY23?
• ‘Sweet spot’: Citi names 2 ASX 200 shares that are ‘inexpensive’ 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.

from The Motley Fool Australia https://ift.tt/iO7BZVe

It’s been a rough year so far for shares in S&P/ASX 200 Index (ASX: XJO) iron ore (and green energy) favourite, Fortescue Metals Group Limited (ASX: FMG).

The stock has slumped around 16% year to date while the iconic index has dumped 13%.

The Fortescue share price last traded at $16.76. So, could it be about to embark on the path to recovery?

Most brokers think not. Let’s take a look at what experts are predicting for the future of the Fortescue share price.

What might the future hold for Fortescue shares?

Fortescue shares – like those of its fellow ASX 200 materials giants – are often heralded as a dividend haven. Indeed, the company is currently trading with a 12.36% yield, having offered investors $2.07 of dividends per share over the last 12 months.

On top of that, the company has likely garnered interest on the back of its green energy leg, Fortescue Future Industries.

But its apparent commitment to decarbonisation and the energy transition may dint its dividends, according to experts.

Goldman Sachs expects the company’s recently announced plan to decarbonise its Pilbara operations at a cost of US$6.2 billion to likely see its payout ratio drop from 75% to 50% from financial year 2024. Though, the company believes the move will deliver US$3 billion of cost savings by 2030 and payback of capital by 2034.

The broker has a sell rating and a $12.10 price target on Fortescue shares. That represents a potential 28% downside.

Macquarie and Morgan Stanley share similar concerns about the company’s dividends, The Australian reports.

They’re said to have respectively slapped the stock with underperform and underweight ratings and price targets of $14.30 and $15.15.

Meanwhile, UBS analysts are reportedly worried about iron ore prices, leading the broker to tip Fortescue as a sell and hit its shares with a $15.80 price target.

But not all experts are so bearish on the future of the Fortescue share price.

Morgans apparently believes the stock is trading at a decent price right now. It has a hold rating and a $17.30 price target on the company’s shares, as my Fool colleague James reports.

Though, the broker also offers a potentially disappointing outlook for Fortescue’s dividends. It’s expecting the company’s full-year payout to slip to 37 US cents by financial year 2026.

The post Fortescue shares: Buy, hold, or fold? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Broker gives its verdict on the Fortescue share price
• The Fortescue share price has outpaced the ASX 200 today. Could green dreams be why?
• Is the Fortescue dividend at risk from the miner’s $9b decarbonisation strategy?
• Why has the Fortescue share price been having such a rough trot lately?
• This is how I found a 15-bagger ASX share: fund manager

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

from The Motley Fool Australia https://ift.tt/sSr5nYd

The ASX share market is going through plenty of volatility. On Friday, the S&P/ASX 200 Index (ASX: XJO) dropped by another 1.9%.

At the time of writing, the ASX 200 is down 11% over the past six months.

That feels like a big drop. Of course, it was a lot worse during the COVID-19 crash in early 2020 when it fell by more than 30%.

But, the ASX 200’s movements are dictated by a few large blue chips like Commonwealth Bank of Australia (ASX: CBA) and BHP Group Ltd (ASX: BHP).

There’s a lot more pain than the index would suggest. For example, the Xero Limited (ASX: XRO) share price is down over 20% since mid-August and it has fallen around 50% in 2022 to date.

What’s causing the latest volatility?

This year we can probably put the declines down to a mixture of inflation, rising interest rates and the tailwind of COVID-19 impacts on things like the supply chain.

But, today’s drop could be due to what’s going on in the United Kingdom. While its economy is not quite as big as it used to be, it’s still a member of the G8, a group of eight of the largest economies in the world.

There has recently been a change of prime minister in the UK, as well as a new economic strategy implemented to grow the economy.

As reported by various media, including the Financial Times, the UK’s new chancellor announced plans to cut taxes and increase debt. It will reportedly add 72 billion pounds of borrowing to fund tax cuts and economic growth. Taxes will be cut to the tune of 45 billion pounds, with wealthier households being key beneficiaries.  

What will this do to the UK economy, inflation and interest rates? The market tends not to like uncertainty.

According to a quote by the Financial Times, chancellor Kwasi Kwarteng said:

What I was worried about was low growth. The danger is in choking growth — that’s the danger. The only way we deal with that is by growing the economy.

Markets move all the time. It’s very important to keep calm and focus on the longer-term strategy.

Is this a time to worry?

The thing is, there is always something to worry about on the ASX share market.

Inflation and rising interest rates are influential. So are the effects of the Russian invasion of Ukraine. There are regular concerns about China.

The COVID-19 pandemic was a huge thing to worry about.

Brexit.

Greece.

The GFC.

The dot com crash.

All of these things have unsurprisingly caused a bit of volatility.

Valuations would go through the roof if there were nothing to worry about. Then valuations would be something to worry about.

It’s human nature to have concerns and want to protect yourself.

But, I think it’s moments like this are when it’s best to invest, if we have the funds to do it. Ideally, we’d want to buy shares for the lowest price possible – that normally comes during a bear market, when investors become fearful.

It’s true that it is painful to see your ASX shares fall 20%, 50% or even more. However, for good investments, volatility is the price of entry. Good businesses have historically recovered to former heights, even if it takes a while.

That’s why I think it’s worth always investing in assets I’d want to buy more of in a crash or economic recession. It’s easier to know if it’s an opportunity.

I have been investing during the last few weeks and I’m planning to make multiple investments today/this week. I believe it will help accelerate my long-term wealth-building.

The post ‘Markets move all the time. It’s very important to keep calm and focus on the longer-term strategy’ appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Here’s how I’d invest $2,000 in ASX shares if I’d just turned 18
• Xero share price is tumbling 5%, but could it be worth a buy?
• Goldman Sachs names 2 ASX tech shares to buy now
• 5 things to watch on the ASX 200 on Tuesday
• Why I’m seriously considering buying these ASX shares following today’s market crash

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

from The Motley Fool Australia https://ift.tt/6zOFilW

ASX dividend shares could be a good area to go hunting for investment income opportunities.

Businesses can decide to pay out a sizeable amount of their profit each year to investors. This way, shareholders get to enjoy ‘real’ cash returns each year while, hopefully, also benefiting from the long-term profit growth and capital growth of those companies.

While many of the biggest ASX shares are known for being dividend payers, there are other smaller businesses that could be better long-term picks in my opinion. This is because of their ability to grow. At the same time, some can also be rated as higher quality.  That’s because it’s much harder for a huge business to keep growing at a good pace due to its size to begin with.

That said, I think the following two ideas could be appealing income picks.

VanEck Morningstar Australian Moat Income ETF (ASX: DVDY)

This is an exchange-traded fund (ETF) based on a portfolio that aims to generate income from quality Australian companies.

The ETF is designed to track the performance of the 25 highest paying ASX dividend shares, excluding real estate investment trusts (REITs), that meet the fund’s required moat ratings and its ‘distance to default’ measures.

An “economic moat” is a way of describing a business’s ability to maintain its competitive advantages and defend its long-term profitability. Some moats include switching costs for customers, intangible assets (like brand power or patents), network effects, cost advantages, and efficient scale.

The Moat Income ETF has a management fee of 0.35% per annum. Some of its biggest positions include IPH Ltd (ASX: IPH), AUB Group Ltd (ASX: AUB), Ansell Limited (ASX: ANN), National Australia Bank Ltd (ASX: NAB), Medibank Private Limited (ASX: MPL), and Wesfarmers Ltd (ASX: WES).

Metcash Limited (ASX: MTS)

Metcash is a supplier to food and liquor shops around Australia. Indeed, it supplies more than 1,600 independently owned supermarket stores, including the IGA and Foodland brands.

In the company’s liquor division, it supplies brands such as Cellarbrations, The Bottle-O, IGA Liquor, Porters Liquor, Thirsty Camel, Big Bargain Bottleshop, and Duncans.

The business also has a hardware segment which includes Mitre 10, Home Timber & Hardware, and Total Tools.

Metcash has a target dividend payout ratio of 70% of underlying net profit after tax (NPAT). In FY22, it increased its dividend per share by 23% to 21.5 cents. It also recently completed a share buyback of $200 million.

At the current Metcash share price, the ASX dividend share has a FY22 grossed-up dividend yield of 7.7%.

In a trading update for the 17 weeks to 28 August, it said that group sales had increased 8.9% with growth in all pillars.

According to CMC Markets, Metcash is expected to pay a dividend per share of 22 cents in FY23. This would translate into a grossed-up dividend yield of 7.9%.

I think that Metcash can continue to grow its business over the longer term, particularly in its hardware division.

The post Building up income: 2 ASX dividend shares I believe are a buy appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Top brokers name 3 ASX shares to buy today
• 5 things to watch on the ASX 200 on Wednesday
• 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 recommended IPH Ltd. The Motley Fool Australia has positions in and has recommended Wesfarmers Limited. The Motley Fool Australia has recommended Ansell Ltd., Austbrokers Holdings Limited, and IPH Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/xmOTEUa

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

As the highest-valued company in the world with a market cap of $2.5 trillion, Apple Inc. (NASDAQ: AAPL) regularly makes headlines. However, public scrutiny often increases around September, when Apple regularly announces its updated lineup of iPhones and other products. 

This year has been no different as analysts attempt to gauge the success of 2022’s iPhone 14 series. The launch has had highs and lows, with the costlier models seemingly outselling the base versions for the first time in years. 

Regardless of what might play out with Apple’s latest iPhones, the company has consistently proven its resiliency in the market — and that the MacBook manufacturer is an asset to any portfolio looking for long-term gains. 

Combating stagnation 

As smartphone technology advances, devices are becoming more powerful every year, offering more storage and longer battery life. As a result, tech companies are having an increasingly difficult time convincing consumers that a yearly upgrade is necessary. Apple has remained chiefly unscathed by smartphone stagnation as its ecosystem of interconnected products keeps consumers returning to the iPhone. However, its newest lineup of smartphones is the company’s biggest push to stave off the phenomenon.  

On Sept. 7, Apple unveiled its 2022 lineup of smartphones, including a base model iPhone 14, a larger Plus version, the 14 Pro, and the 14 Pro Max. The smartphones saw Apple widen the gap between the base versions and Pros, pushing consumers toward the more expensive options. For instance, the Pro models received a 48-megapixel camera, up from 12 the previous year, a software update that integrates the camera cut-out into a helpful user interface tool called Dynamic Island, a faster A16 Bionic chip, and a new always-on display feature. 

Meanwhile, the iPhone 14 saw marginal improvements on 2021’s 13, primarily including one extra core in its A15 Bionic chip, an extra hour of battery life, and satellite connectivity in the case of emergencies. As a result, consumers have flocked to the Pro models, with Apple analyst Ming-Chi Kuo reporting that 85% of iPhone 14 orders have opted for the Pro models.

However, not all headlines have been rosy concerning the costlier Pro models. Some users have experienced an issue that makes the rear-facing camera physically shake in third-party apps. Bloomberg reported on Sept. 19 that Apple would release an update to resolve the problem next week, but it remains to be seen whether it is a software or hardware issue. The company’s stock doesn’t seem to be affected by the reports so far, but Apple will be working hard to resolve the problem through a software update as a hardware issue would be costly. 

A winning business model

Apple’s current strategy of pushing consumers toward its Pro models is excellent if it succeeds; however, it does pose some risks. In the second quarter of 2022, Apple sold about 37% more of the base model iPhone 13 and 13 Mini than the two Pro versions in the lineup. The difference is not uncommon, as the iPhone 11 also sold about 80% more than the Pro versions in the first half of 2020. Judging by previous years, the current iPhone 14 Pro models will need to sell significantly more than previous years to make up for the loss of base model sales. 

Despite a slightly questionable iPhone launch, Apple remains a company investors can count on. Its powerful ecosystem of products means that even in the case of poor iPhone sales, the company is likely to continue pulling revenue in from alternate sources. Apple’s walled garden of products makes it easy to draw consumers in with just one product. For instance, iPhone users who upgrade their smartphones every three years are still likely to turn to products such as the MacBook or AirPods to fill other needs because of their connectivity with the iPhone.

That’s also before mentioning Apple’s Services business that includes monthly subscriptions for video streaming, music, a fitness platform, cloud storage, and more. The booming segment saw year-over-year revenue rise 12% in the third quarter of 2022, hitting $19.8 billion, and has become the company’s second-biggest revenue stream after the iPhone.

So is Apple’s stock a buy?

As one of the most innovative companies in the world, Apple is one of the top stocks to invest in for the long-term. In 2022, tech stocks have suffered considerably on the back of inflation rises and declines in consumer demand. The effects are evident in the Nasdaq 100 Technology Sector index’s decline of 36% since January. However, Apple’s more modest fall of 15% in the same time frame proves its stability and resiliency under strenuous conditions. 

September has been a busy month for Apple with a slightly chaotic iPhone launch, but the company remains a safe buy for investors in it for the long haul. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why is everyone talking about Apple stock? appeared first on The Motley Fool Australia.

(function() { function setButtonColorDefaults(param, property, defaultValue) { if( !param || !param.includes(‘#’)) { var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0]; button.style[property] = defaultValue; } } setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’); setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’); setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’); })()

More reading

• Should you really buy Apple stock?
• Where will Apple be in 5 years?
• Why investors found Apple stock tempting today
• 60% of Warren Buffett’s portfolio is invested in these 3 stocks
• 5 reasons I wouldn’t touch Shiba Inu with a 10-foot pole

Dani Cook 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 Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

from The Motley Fool Australia https://ift.tt/nSPc1VJ