Looking for some blue chip additions to your portfolio? Listed below are a couple of ASX 200 blue chip shares that have been given buy ratings by analysts

Here’s why its analysts rate them highly right now:

ResMed Inc. (ASX: RMD)

The first blue chip ASX 200 share that has been named as a buy is ResMed.

It is a medical device company with a focus on sleep treatment and respiratory products. These products treat disorders such as sleep apnoea and chronic obstructive pulmonary disease (COPD).

These certainly are great markets to be in.  For example, in respect to the former, the company estimates that upwards of 1 in 5 people are believed to suffer from sleep apnoea.

And with the vast majority currently undiagnosed, this provides a significant long term growth runway. Particularly given its industry-leading products, high level of investment in research and development each year, and wide distribution network.

Goldman Sachs is bullish on ResMed. It currently has a buy rating and $36.80 price target on its shares. This compares to the latest ResMed share price of $32.04.

Treasury Wine Estates Ltd (ASX: TWE)

Another blue chip ASX 200 share that is highly rated is Treasury Wine. It the global wine giant behind a range of popular brands including Penfolds.

Treasury Wine certainly has been through a lot in recent years but has come out of it looking arguably stronger.

In fact, the team at Morgans believe “the foundations are now in place for TWE to deliver strong earnings growth” in the coming years.

In light of this, Morgans has named Treasury Wine as a “key pick” and put an add rating and $13.93 price target on its shares. This compares to the current Treasury Wine share price of $12.55.

The post Experts names the blue chip ASX 200 shares to 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

• Experts name 2 outstanding ASX 200 shares to buy right now
• Looking to buy ASX shares? Expert reveals ‘one metric to assess the quality of a business’
• I regret not buying 2 ASX shares that became 10-baggers: fundie
• Why experts say these ASX growth shares are buys
• Analysts name 2 excellent blue chip ASX 200 shares to buy 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 positions in and has recommended ResMed Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia has positions in and has recommended ResMed Inc. The Motley Fool Australia has recommended Treasury Wine Estates 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/09rqXtL

I’ve added Wesfarmers Ltd (ASX: WES) shares to my ASX share portfolio in the last year. At more than a century old, the ASX 200 retail and industrial conglomerate is one of the oldest companies in Australia.

So why have I chosen this old giant of the ASX? Let’s discuss four reasons…

Why I have added Wesfarmers shares to my ASX portfolio

1. Wesfarmers is one of the most diversified ASX blue chip shares

Although Wesfarmers is just one company, in reality, it is more like a dozen. Wesfarmers has so many operations, it’s hard to give them all credit. There are the retailing powerhouses of Bunnings, OfficeWorks, Kmart and Target to consider.

But Wesfarmers also owns Covalent Lithium, Klenheat Gas, the Workwear Group, Wesfarmers Chemicals, Energy & Fertilisers, and most recently, the old API Group, which owns the Priceline pharmacy chain.

I think this disparate group of companies gives Wesfarmers an incredible edge when it comes to diversification.

2. Performance

When we boil down investing, it’s really only performance that matters in the long run. And in this respect, I have been heartened by Wesfarmers’ long history of delivering returns to its shareholders. Just take the past five years.

Since September 2017, the Wesfarmers share price has appreciated by just over 46%. In stark contrast, the S&P/ASX 200 Index (ASX: XJO) has only gained around 15.6% over the same period. Thus, I’d have much rather owned Wesfarmers over the past five years than an ASX 200 index exchange-traded fund (ETF).

3. Wesfarmers shares are dividend heavyweights

ASX investors love their dividends, and so do I. That further adds to my attraction for Wesfarmers shares. This company has a long and proud history of paying its shareholders hefty and fully franked dividend payments.

The $1.80 per share in dividends investors will enjoy in 2022 comes in above the $1.78 paid out last year. That again was greater than the $1.70 total for 2020. That’s a streak I’m happy to be a part of.

4. A stellar management team

In my view, Wesfarmers’ management has proven time and time again that they are a steady hand on the tiller.

From the successful spinoff of Coles Group Ltd (ASX: COL) in 2018 to the entry into lithium, before it was cool, Wesfarmers’ management has clearly got a clue as to how to run a successful conglomerate. Again, we can also point to the company’s share price performance for further proof.

The post 4 reasons I added Wesfarmers shares to my portfolio 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

• Experts name 2 top ASX dividend shares to buy next week
• Own Wesfarmers shares? Here’s where the health business is heading
• Down 23% in 2022, are ASX investors throwing Wesfarmers shares out with the bathwater?
• 2 excellent ASX dividend shares experts rate as buys
• Wesfarmers shares: Buy, hold, or fold?

Motley Fool contributor Sebastian Bowen has positions in Wesfarmers. 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 COLESGROUP DEF SET and Wesfarmers 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/1X78akl

The transition of energy sources from fossil fuels to renewables is one of the big investment themes of the current generation.

In a recent memo to clients, Wilsons analysts recognised the massive amount of capital required for this momentous change.

“Getting to net-zero over the next three decades requires approximately US$130 trillion in clean energy investment from now until 2050, according to the International Renewable Energy Agency,” said Wilsons equity strategist Rob Crookston.

“The transition involves more energy storage and a higher uptake of electric vehicles, both of which will create a higher demand for batteries, specifically lithium-ion batteries.”

So when most people think of ASX shares to invest in this theme, they think of green energy producers and lithium miners.

But Wilsons implored investors to think outside the square.

‘An essential commodity in the coming decades’

Wilsons analysts reminded investors that lowering carbon emissions is “a complex long-term global issue”.

“The outlook for turning emissions around is likely to be a mix of energies, not one solution.”

Therefore natural gas, according to Wilsons analysts, will be an essential commodity in the coming decades as the world transitions to renewables. 

“Gas burns more efficiently than coal or oil and emits significantly fewer greenhouse gases than other fossil fuels while being a reliable source of energy,” said Crookston.

“According to the International Energy Agency (IEA), natural gas will have a greater share of the global energy mix in the future as oil and coal’s relative share declines and renewables increase.”

Even though it is still a fossil fuel, natural gas will “play a key role” as a baseload power source while solar and wind generators — and energy storage technology — improve their reliability.

Crookston cited IEA projections that natural gas will end up replacing coal as the world’s second most critical energy source by the mid-2030s.

“Typically, global infrastructure is better prepared to transition to gas than renewables at present, making it more cost-effective for countries in the short-term,” he said.

“Thus, it can play a crucial role in supporting the transition to renewable energy.”

Gas prices will remain elevated

So which ASX shares is the Wilsons team favouring to play on the gas thematic?

In their focus portfolio, Crookston mentioned that the key exposures are through Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS).

“We think the current demand-supply dynamics are favourable for oil and gas prices over the medium-term, especially in an environment where demand can remain steady through the transition.”

He forecasts that, at current spot prices, Woodside has a 71% upside in earnings per share to consensus forecasts for the 2024 financial year. Santos has a 56% premium for the same period.

The Santos share price is up 13.5% year to date, while paying out a 2.6% dividend yield. Woodside shares are more than 40% higher than where they started 2022, while providing a whopping 9.6% yield.

The post 2 surprising ASX shares to buy for the energy transition: Wilsons 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

• Could this nation-first action make an investment in Woodside shares cleaner?
• 5 things to watch on the ASX 200 on Friday
• Own Santos shares? Get ready to receive your dividends
• Could international demand keep boosting Woodside shares for the next 20 years?
• 5 things to watch on the ASX 200 on Wednesday

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.

from The Motley Fool Australia https://ift.tt/l5EZTB3

Are you wanting to add some new dividend shares to your income portfolio? If you are, then the two listed below could be good options.

Analysts have recently rated these dividend shares as buys. Here’s what you need to know about them:

Baby Bunting Group Ltd (ASX: BBN)

The first ASX dividend share for income investors to look at is Baby Bunting.

It is a baby products retailer which has carved out a dominant position in this less discretionary category over the last decade.

But management isn’t settling for that. It continues to see opportunities to expand its network and also its offering.

The team at Morgans likes what it sees and is very positive on the company. So much so, it has an add rating and $5.00 price target on its shares. It commented:

As the only specialist retailer in the baby category with a national omni-channel presence, we see potential for BBN to increase its 14% share of a $3.5bn market over the medium to long-term.

The broker believes this leaves Baby Bunting well-placed for further earnings and dividend growth in the coming years.

For example, the broker is forecasting fully franked dividends per share of 17 cents in FY 2023 and 19 cents in FY 2024. Based on the current Baby Bunting share price of $3.85, this will mean yields of 4.4% and 4.9%, respectively.

Bank of Queensland Limited (ASX: BOQ)

Another ASX dividend share for income investors to consider is Bank of Queensland.

Thanks to the recent acquisitions of ME Bank and Virgin Money Australia, it is now one of the largest banks outside the big four.

Analysts at Citi are fans of Bank of Queensland. The broker expects cost synergies from the ME Bank acquisition to be supportive of earnings growth even if mortgage loan growth slows as rates rise.

Citi has a buy rating and $8.75 price target on the bank’s shares.

As for dividends, the broker is forecasting fully franked dividends per share of 46 cents in FY 2022 and then 50 cents per share in FY 2023. Based on the current Bank of Queensland share price of $6.75, this will mean big yields of 6.8% and 7.4%, respectively.

The post Here’s why experts say these ASX dividend shares are buys 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

• Down 17% so far this year, is the Bank of Queensland share price a cheap buy?
• 2 bargain finance ASX shares to buy (not big banks): experts
• Down 7% in a month, are Bank of Queensland shares a bargain buy?
• I think these 2 high-yield All Ords ASX dividend shares are buys in September
• Do Bank of Queensland shares pay better dividends than the ASX 200 big four?

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 recommended Baby Bunting. 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/yW6tA5c

If you’re looking for an easy way to invest in certain themes, then exchange traded funds (ETFs) could be the answer.

But which ETFs should you look at? Listed below are a couple of excellent ETFs that give investors access to exciting investment thematics.

Here’s what you need to know about them:

BetaShares Global Cybersecurity ETF (ASX: HACK)

The first ASX ETF for investors to consider is the BetaShares Global Cybersecurity ETF. This ETF gives investors exposure to the leading companies in the global cybersecurity sector.

This week the Optus cyberattack outlined just how important cybersecurity is for businesses and consumers. With sensitive information being accessed by hackers, Optus is facing major reputational damage, as well as potential penalties and compensation.

But Optus isn’t alone. This month Rockstar and Uber have also been hit by attacks and you can bet that countless smaller companies have also fallen victim to hackers as well.

In light of this, it wouldn’t be surprising if the already strong and growing demand for cybersecurity services went up a gear.

This bodes well for companies included in the fund such as Accenture, Cloudflare, Crowdstrike, Okta, and Palo Alto Networks.

VanEck Vectors Video Gaming and eSports ETF (ASX: ESPO)

Another ETF for ASX investors to look at is the VanEck Vectors Video Gaming and eSports ETF.

This ETF gives investors access to a portfolio of the largest companies involved in video game development, hardware, and esports.

This is a market that benefits from the billions of gamers globally that reach for their PlayStations, PCs, or mobile devices each day.

According to PwC’s Global Entertainment and Media Outlook, it expects the market to be worth US$321 billion by 2026. This is up from US$214 billion in 2021.

This is good news for the quality companies you’ll be owning with this ETF. This includes Activision Blizzard, AMD, Electronic Arts, Nintendo, Nvidia, Roblox, and Take-Two.

The post 2 excellent ETFs for ASX investors to buy now 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

• Could the HACK ETF provide a hedge against future cyber fallout?
• These could be 2 of the most exciting ETFs for ASX investors to buy
• 2 high quality ETFs for ASX investors in September
• Don’t miss out on these high quality ASX ETFs
• 2 excellent ETFs for ASX investors to buy this month

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 BETA CYBER ETF UNITS. The Motley Fool Australia has positions in and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia has recommended VanEck Vectors ETF Trust – VanEck Vectors Video Gaming and eSports ETF. 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/gSzamnq

If you ask any ASX investor what the most interesting share on the S&P/ASX 200 Index (ASX: XJO) might be, I’d wager that Telstra Corporation Ltd (ASX: TLS) wouldn’t come up. Telstra is one of the bluest blue chip shares on the ASX. But this mature telco might be described as ‘boring’ by many investors.

This is understandable. The Telstra share price has been remarkably stable in recent years. In fact, you could have picked up Telstra shares for a similar price today to way back in early 2018. 

But I still hold Telstra shares. And I don’t plan on getting rid of them any time soon.

Why? Well, it’s not because I think Telstra shares are boring for one. Sure, the telco might be stable, far more stable than many other ASX blue chip shares, for that matter. But I don’t think that makes a company boring. Quite the contrary.

Why I still hold ‘boring’ Telstra shares

The fact is that Telstra is an incredibly dominant company in its sector. It carries a brand that is a relic of a bygone era when Telstra was the government-owned monopolistic provider of almost all telecommunications services in the country. I think this is a good thing, as customers arguably still assign a certain premium to the Telstra brand as a result.

Telstra is by far the market leader when it comes to both mobile and fixed-line internet services in this country. It’s also well-known for having the widest service coverage. Many customers are forced to use Telstra due to a lack of alternatives.

Further, the services that Telstra sells are incredibly inelastic in our modern age. How bad would a recession have to be before customers give up their home internet, phones or mobile data plans?

So we have a highly recession-resistant company that is dominant in its sector. Boring? I don’t think so.

I was fortunate enough to pick up Telstra shares back when the company was trading well under $3 a share. As such, I continue to enjoy a dividend yield of well over 6% on my original capital, plus the franking, of course.

Remember, this is a company that continued to maintain its dividend through the COVID-ravaged years of 2020 and 2021. Telstra then raised its dividend for the first time in years this year as well, further adding to my returns.

So some investors may find this company boring. But I’m certainly not put to sleep by the returns I have had and continue to enjoy from Telstra. I might sell Telstra one day if its share price gets to a silly level. But until then, I will happily sit pretty and watch the dividends keep rolling in.

The post Some investors think Telstra shares are boring. I beg to differ 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

• Here are the 3 most heavily traded ASX 200 shares on Friday
• Here’s how ASX telco shares are faring following Optus hack
• Here are the top 10 ASX 200 shares today
• 3 ASX 200 shares paying out ‘special’ dividends in 2022
• The Telstra dividend is being paid today. Here’s the latest

Motley Fool contributor Sebastian Bowen has positions in Telstra Corporation 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 positions in and has recommended Telstra Corporation 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/UZvuyBP

If you’re looking to diversify your portfolio with some exposure to the mining sector might, you may want to check out the ASX mining shares listed below.

Both have been tipped as top options in the sector with significant upside potential. Here’s what you need to know about these mining shares:

Iluka Resources Limited (ASX: ILU)

The first ASX mining share for investors to consider is this mineral sands and rare earths miner.

Iluka owns a number of quality projects across South Australia and Western Australia, including the exciting Eneabba project. At Eneabba, the company is developing a fully integrated rare earths refinery, which will be only the third of its kind outside China.

Goldman Sachs is very bullish on Iluka. The broker has the company on its highly regarded conviction list. It explained:

We are positive on ILU’s project pipeline and forecast >40% production growth in mineral sands volumes, c.18ktpa of Rare Earths (~3.5-4ktpa of high value NdPr). We think ILU’s Eneabba RE refinery is a strategic asset considering it will be only the third western world RE refinery

Goldman Sachs has a conviction buy rating and $13.30 price target on Iluka’s shares.

South32 Ltd (ASX: S32)

Another ASX mining share that has been named as a buy is South32.

Morgans is positive on the miner due to the recent transformation of its portfolio to give it exposure to metals that will be important to the decarbonisation megatrend.

The broker believes that this leaves South32 well-placed for the long term and expects attractive dividends along the way. It explained:

S32 has transformed its portfolio by divesting South African thermal coal and acquiring an interest in Chile copper, substantially boosting group earnings quality, as well as S32’s risk and ESG profile. Unlike its peers amongst ASX- listed large-cap miners, S32 is not exposed to iron ore. Instead offering a highly diversified portfolio of base metals and metallurgical coal (with most of these metals enjoying solid price strength). We see attractive long-term value potential in S32 from de-risking of its growth portfolio, the potential for further portfolio changes, and an earnings- linked dividend policy.

Morgans has an add rating and $5.50 price target on South32’s shares.

The post Experts say these are the ASX mining shares to 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

• Experts name 2 ASX dividend shares for income investors to buy
• Analysts name 2 ASX 200 mining shares to buy
• Morgan Stanley just boosted its outlook for aluminium. Here’s which ASX shares have exposure
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Why Lake, Pushpay, South32, and Tyro shares are dropping

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/ruUpHW0

The Fortescue Metals Group Limited (ASX: FMG) share price was out of form last week.

The mining giant’s shares lost over 5% of their value to end the period at $16.76.

Investors were selling down the Fortescue share price amid the market volatility and concerns over its decarbonisation plans.

Will the Fortescue share price bounce back?

Opinion remains divided on where the Fortescue share price is heading from here.

As I covered here, analysts at Goldman Sachs see nothing put downside for its shares over the next 12 months.

Whereas the team at Morgans is sitting on the fence right now and feel the miner’s shares are about fair value.

According to a note, the broker has responded to Fortescue’s decarbonisation plans by retaining its hold rating with a modestly increased price target of $17.30. This implies potential upside of 3.2% for investors.

But like Goldman Sachs, Morgans is forecasting a series of big dividend cuts from FY 2024. It has pencilled in a 79.5 US cents per share dividend that year and then 60.8 US cents per share and 37 US cents per share in the following years.

This will mean yields of approximately 6.4%, 4.8%, and 2.9%, respectively.

Morgans highlights that these dividend cuts are being driven by materially lower free cash flow expectations. It commented:

Given the uncertain nature of the spend, with big portions attributed to innovation, there is material risk of FMG’s decarbonisation budget slipping as the scope of work required evolves. FMG has also not baked any inflation assumptions into its capex budget, another realistic source of slippage.

While an adjustment to our assumptions, we expect this guidance to trigger a more material change for consensus – which does not appear to have any decarb capex factored in. We expect peak decarbonisation spend to come at a time of more moderate long-term iron ore prices.

One thing seems certain, FMG will generate materially lower FCF over the next decade versus the previous decade. FMG’s aggressive decarbonisation push, combined no doubt with additional FFI projects, only acts to further increase FMG’s dependence on the iron ore price by materially restricting its FCF profile. Although if FMG can successfully decarbonise it will unlock sustainable and material opex savings while vastly lifting its ESG profile.

The post Broker gives its verdict on the Fortescue share price 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

• 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
• Are ASX hydrogen shares worth buying 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/Vmh9ZF5

The Qantas Airways Limited (ASX: QAN) share price has been beating the broader market over the past month.

Shares in the iconic Australian airline are soaring 13.22% over this period. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is down at a 6.05% loss. The Qantas share price closed at $5.14 on Friday.

There has been a lack of news from Qantas over this time to support its market-beating performance, but some positive developments have occurred. Let’s cover the highlights.

Qantas’s passenger numbers recover

Figures released by the Bureau of Infrastructure and Transport Research Economics (BITRE) show that the airline’s total number of passengers increased by 27,990 to 351,988 from July last year to July 2022. This represents almost full passenger capacity.

Another reason Qantas’s shares could outperform the ASX 200 is that investors feel more bullish on Qantas compared with the aggregate of its peers in the index. Headwinds of rising inflation and interest rate hikes have hit some sectors more severely than others, particularly the tech and consumer discretionary sectors.

Earnings improve for chief rival

Higher passenger numbers mean potentially more cash hitting Qantas’s coffers. This effect is already observed with Air New Zealand Limited (ASX: AIZ) posting a positive half-year earnings guidance for FY23.

Air NZ notes that it saw “strong forward sales” for the first three months of this financial year and is operating at approximately 70% of its capacity for FY19. The bottom line is that it expects its earnings before taxes and other significant items to be between $200 million and $275 million.

These expected results are a significant improvement, as the airline reported a loss before other significant items and taxation of $440 million ending FY21.

So if Air NZ’s results are anything to go by as a closely related peer company, then Qantas’s shares could be kept buoyant by the expectation that its fundamentals will also improve in the future.

Qantas share price snapshot

The Qantas share price is up 2.59% year to date. Meanwhile, the S&P/ASX 200 Index is down 11.68% over the same period.

The company’s market capitalisation is $9.69 billion.

The post Why is the Qantas share price flying higher than the ASX 200 this month? 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 Air New Zealand, Cronos, Soul Patts, and Viva Energy shares are pushing higher
• Air New Zealand share price soars 9% on guidance update
• Qantas share price dips despite performance lift
• Qantas share price outperforms as Virgin eyes merger opportunities
• How this fundie is beating the ASX 300 without fossil fuels

Motley Fool contributor Matthew Farley 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/uAGUhCf

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.

Apple Inc. (NASDAQ: AAPL) is one of the most innovative companies to date. Investing in Apple has felt like a no-brainer as its consistently successful products seem to make the company unstoppable. Even as the Nasdaq-100 Technology Sector index is down 35% year to date, thanks to inflation and slowing consumer spending, Apple’s stock is down a more modest 17% in the same period. 

Immensely popular products such as the iPhone, MacBook, iPad, and Apple Watch have grown Apple’s market cap to $2.4 trillion, making it the world’s highest valued company. As a result, investors such as Warren Buffett have heartily vouched for the tech manufacturer, consigning 41% of Berkshire Hathaway’s portfolio to Apple.

The iPhone titan has proven time and time again that its business is consistent and able to weather most storms. However, sales for its latest iPhone may not be as positive as some have reported. If true, the company’s biggest segment could take a significant hit in its current quarter.

Apple’s bread and butter

For the last decade, iPhone sales have made up at least 40% of Apple’s revenue, with some quarters seeing the smartphones hit almost 70%. For instance, in the third and most recent quarter of 2022, Apple reported iPhone sales had made up 49% of its revenue. Meanwhile, the rest of its revenue went as follows: 8.7% to iPads, 8.8% to Macs, 9.7% to Wearables, Home and Accessories, and 23.6% to Services.  

Like clockwork, Apple announces its newest lineup of iPhones almost every September, with sales remaining consistent throughout the year. However, Apple has made a significant push into services over the last few years. The introduction of apps such as its streaming service Apple TV+, Music, Fitness+, and iCloud has pushed consumers further into the company’s ecosystem of products and boosted revenue.

In the fourth quarter of 2021, services made up 15.7% of the company’s revenue versus 23.6% in Apple’s latest quarter. The rise of services is positive as it can aid in safeguarding the company in the event of poor iPhone sales, which look to be a real possibility in Apple’s latest lineup. 

A potential dip 

On Sept. 7, Apple unveiled its latest series of iPhones with the iPhone 14, Plus, Pro, and Pro Max. The lineup saw a return to the “Plus” model for the lower-tiered phones, which hadn’t surfaced since the iPhone 8 Plus in 2017. Since then, the largest option has only been available in the Pro models under the label “Pro Max.”

While multiple media outlets have reported record-breaking sales for Apple’s iPhone 14 Pro and Pro max, a recent report from Apple analyst Ming-Chu Kuo has shown poor sales for the iPhone 14 and 14 Plus. Kuo explained that the Pro models are currently showing delivery wait times of more than four weeks, which suggests good demand. However, the iPhone 14 and 14 Plus have been available in retail stores from their launch dates, which “reflects lackluster demand.”

Weak pre-sales for the non-Pro models are concerning as they are usually the highest-selling iPhones in the yearly lineup. In 2019, the base model iPhone 11 was the top-selling version every week in the year’s last quarter. Then, in the first half of 2020, the iPhone 11 sold 79% more units than the Pro Max version and 82% more than the smaller Pro model. As the lower-priced base models, the iPhone 14 and the bigger Plus version would normally be outselling the Pro versions, but that doesn’t seem to be the case in 2022.

Kuo surmised that current sales indicate the iPhone 14 and Plus are selling worse than last year’s iPhone 13 mini, which Apple cut production on in the first half of 2022 because of low demand. As a result, Apple could do the same to the iPhone 14 and Plus and slim down production as soon as November, according to Kuo.

In the latest iPhone 14 lineup, Apple worked to widen the gap between the base and the Pro models, offering far more new features and tweaks in design to the more expensive versions. However, the result meant incremental differences between last year’s iPhone 13 and 2022’s 14, and price hikes abroad have caused far worse iPhone sales than in previous years.

Is Apple’s stock a buy?

According to Bloomberg, analysts expect Apple sales to rise 6% in its current quarter, down from 29% the previous year, which was primarily fueled by “pandemic-bound consumers” pumping up demand for technology. The company has bet on its Pro models this year, which have so far reached record numbers. However, the question is, will the higher-end versions sell enough to offset slower sales from the base model iPhone 14s?

Only time will tell, but regardless, Apple continues to be an excellent investment in the long term. While a potential dip is concerning, the company has proven itself as an innovative company worth investing in over time. The stock may be even more of a buy in the case of a dip as it is unlikely to be down for long, suggesting current investors would do well to hold until shares rise again. 

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

The post Should you really buy 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

• 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
• Why you should buy Block stock (and it’s not Bitcoin)

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/MGXdJQn