The Whitehaven Coal Ltd (ASX: WHC) share price is shrugging off the broader market weakness to soar another 5% today.

This comes as the S&P/ASX 200 Index (ASX: XJO) is tumbling by 1.5% following losses on Wall Street overnight.

The Dow Jones Industrial Average Index (DJX: .DJI) receded 1.01% along with the tech-heavy Nasdaq Composite (NASDAQ: .IXIC) down 0.85%, and the S&P 500 Index (SP: .INX) losing 1.13%.

At the time of writing, Whitehaven shares are up 5.21% to $9.08 after reaching an all-time high of $9.165 earlier on.

Let’s take a look at why the coal producer’s shares are outperforming the ASX today.

Whitehaven seeks extended buyback program

Investors are bidding up the Whitehaven share price after the company made an announcement regarding its share buyback program.

According to its release, Whitehaven advised it is seeking shareholder approval to extend its $550 million share buyback.

The on-market buyback commenced on 8 March this year, through which Whitehaven set out to acquire up to 10% of shares over 12 months.

The company has bought a total of 93.5 million shares or roughly 9% at an average price of $5.40 per share as of 20 September 2022.

In total, Whitehaven has spent $504.3 million on the buyback and expects to complete it before its annual general meeting. The AGM is scheduled for 26 October.

The company is hoping to get 50% shareholder approval for an on-market buyback, or 75% for an off-market tender buyback.

If the resolutions are passed, this will allow the board to acquire up to 240 million shares (25% of issued shares) under any on-market or off-market tender buyback for a 12-month period to 26 October 2023.

Whitehaven CEO and managing director Paul Flynn said:

The share buyback programme is proving to be an efficient way of returning capital to our shareholders. It supports Whitehaven’s ambition to deliver sustainable benefits for shareholders who continue to hold shares in the Company. With fewer shares on issue, the buyback is improving return on equity, earnings per share and dividends per share at the same time that underlying earnings have grown substantially.

Whitehaven share price summary

Since the start of 2022, Whitehaven shares have rocketed nearly 250% on the back of favourable coal prices.

In comparison, the S&P/ASX 200 Energy Index (ASX: XEJ) is up 35% over the same time period.

Based on today’s price, Whitehaven presides a market capitalisation of approximately $8.25 billion and has around 956.27 million shares outstanding.

The post Why is the Whitehaven share price soaring another 5% on Wednesday? appeared first on The Motley Fool Australia.

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More reading

• Why is the Whitehaven Coal share price having such a top run on Tuesday?
• Analysts name 2 ASX dividend shares to buy this month
• 3 ASX energy stocks up more than 100% so far this year
• 5 ASX energy shares powering portfolios with the highest dividend yields
• Own Whitehaven shares? Here’s some good news on your dividends

Motley Fool contributor Aaron Teboneras 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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Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a large number of broker notes this week.

Three ASX shares brokers have named as buys this week are listed below. Here’s why they are bullish on them:

CSL Limited (ASX: CSL)

According to a note out of Morgan Stanley, its analysts have retained their overweight rating and $323 price target on this biotherapeutics company’s shares. This follows reports that Mexicans will be able to continue crossing the US border to donate plasma. Morgan Stanley estimates that approximately 10% of CSL’s collections come from centres close to the US-Mexico border, so this is positive news. The CSL share price is trading at $282.55 today.

IDP Education Ltd (ASX: IEL)

Another note out of Morgan Stanley reveals that its analysts have retained their overweight rating and $35.00 price target on this language testing and student placement company’s shares. This follows the announcement of a deal to acquire Intake Education for $83 million. Morgan Stanley expects the deal to be earnings per share accretive and notes that it should boost IDP’s presence in the high-growth African market. The IDP Education share price is fetching $27.64 on Wednesday.

Pilbara Minerals Ltd (ASX: PLS)

Analysts at Macquarie have retained their outperform rating and $5.60 price target on this lithium miner’s shares. According to the note, the broker was pleased with the results of Pilbara Minerals’ latest battery material exchange auction. It notes that the company commanded a price that was up 10% month on month. It feels this reflects the current tightness in the lithium market. The Pilbara Minerals share price is trading at $4.95 today.

The post Top brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

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More reading

• Could the CSL share price be set for a boost before the year’s end?
• Looking to buy ASX shares? Expert reveals ‘one metric to assess the quality of a business’
• Pilbara Minerals share price hits record high following lithium auction
• Pilbara Minerals share price on watch following BMX lithium auction
• 5 things to watch on the ASX 200 on Wednesday

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 CSL Ltd. and Idp Education Pty 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.

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The Macquarie Group Ltd (ASX: MQG) share price is trading lower with the market on Wednesday afternoon.

At the time of writing, the investment bank’s shares are down over 1% to $170.90.

This means the Macquarie share price is now down almost 20% since the start of the year.

Is the Macquarie share price in the buy zone now?

One leading broker that sees plenty of value in the Macquarie share price is Morgans.

According to a recent note, the broker has an add rating and $215.00 price target on the company’s shares.

This implies potential upside of almost 26% for investors over the next 12 months. And that’s before dividends!

Morgans is expecting a partially franked $7.07 per share dividend in FY 2023. This equates to a 4.1% dividend yield, which stretches the total potential return to a very attractive 30%.

Why is it bullish?

The note reveals that Morgans is bullish on the investment bank due to its exposure to a number of long term structural growth areas and its ongoing market share gains in Australian mortgages.

Its analysts explained:

We continue to like MQG’s exposure to long-term structural growth areas such as infrastructure and renewables. The company also stands to benefit from recent market volatility through its trading businesses, while it continues to gain market share in Australian mortgages.

And while the broker acknowledges that it will be hard for Macquarie to cycle FY 2022’s impressive performance, it thinks investors should look beyond this and focus on the future.

In our view, it was hard to fault MQG’s FY22 result, which benefitted from strong performances in CGM and Macquarie Capital. The only real negative, in our view, is it will be difficult for MQG to cycle such a standout performance in FY23. We anticipate some near-term earnings volatility over FY23 but we like MQG’s favourable longer-term growth profile and consistent history of delivering strong returns (~15% average ROE over time).

The post This expert tips 25% upside for the Macquarie share price appeared first on The Motley Fool Australia.

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More reading

• Analysts name 2 excellent blue chip ASX 200 shares to buy now
• Macquarie shares bear the brunt of bank sell-off amid inflation bomb
• Top ASX dividend shares to buy in September 2022
• I shouldn’t have sold this ASX share two years ago: fund
• Is the Macquarie dividend going to beat a bank savings account?

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 Macquarie 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 Commonwealth Bank of Australia (ASX: CBA) share price is down 1.31% in afternoon trading.

Shares of the big bank closed yesterday trading for $96.53 and are currently fetching $95.27 apiece.

But it’s not just the CBA share price in the red today.

All of the big four banks are down roughly 1%, slightly outperforming the 1.4% loss posted by the S&P/ASX 200 Index (ASX: XJO) at this same time.

Why is the CBA share price sliding today?

The CBA share price, alongside the broader market, is under pressure following another day of selling in US markets yesterday (overnight Aussie time).

Investors have been repositioning their portfolios ahead of tonight’s interest rate announcement from the US Federal Reserve. Economists are broadly predicting a 0.75% rate hike from the world’s most influential central bank. But with inflation running hotter than expected in the US, a growing number of analysts think the Fed might go with a full 1.00%.

Banks can weather higher rates better than growth stocks. And gradual rate increases can even help push the CBA share price higher, as it enables the bank to increase its net interest margins.

But if central banks lift rates aggressively, those benefits can be overshadowed by negative impacts on new mortgage loans and an increase in bad debts.

That’s today’s price action.

More branch closures

In other news that’s seeing CBA in the headlines today, the Finance Sector Union (FSU) has lashed management for closing 14 of its Bankwest branches across New South Wales, Queensland, South Australia, and Victoria. CBA has also reduced trading hours at 29 regional outlets in Western Australia.

Commenting on the closures, FSU national secretary Julia Angrisano said:

The FSU believes banking is an essential service and that all Australians, no matter where they live, have the right to access banking services in the manner they choose, in particular by being able to walk into a local branch…

Banks like the CBA and BankWest promote the lie that large numbers of customers are migrating to digital banking, when the truth is that the banks are actively pushing customers into digital banking.

As reported by The Australian, Bankwest executive general manager Jason Chan said the bank is investing in areas like online and mortgage broker services where customers prefer to engage. Foot traffic in the branches being shuttered was said to be too low to justify keeping the doors open.

CBA share price snapshot

With today’s intraday losses factored in, the CBA share price is down 7.1% in 2022. That compares to an 11.6% year-to-date loss posted by the ASX 200.

The post What’s with the CBA share price on Wednesday? appeared first on The Motley Fool Australia.

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More reading

• Here’s why I decided to buy each of the big 4 ASX 200 bank shares
• Looking to buy CBA shares? Here’s how the bank’s balance sheet stacks up
• Which ASX 200 bank share will win the great tech battle?
• CBA share price edges higher amid acquisition rumours
• ASX 200 shares dump $60 billion in horror session. Here’s how Wednesday unfolded

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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 BHP Group Ltd (ASX: BHP) share price is lagging behind the ASX 200 on Wednesday.

This comes despite the company not releasing any new announcements to the ASX.

At the time of writing, the mining giant’s shares are down 2.63% to $38.15.

In contrast, the S&P/ASX 200 Index (ASX: XJO) is down 1.45% to 6,707.4 points.

What’s dragging BHP shares lower?

There are a couple of reasons as to why the BHP share price is trading in negative territory today.

First and foremost, investors are heading for the hills following a strong sell-off on Wall Street yesterday.

The S&P/ASX 300 Metals and Mining Index (ASX: XMM) is currently the worst performing sector across the ASX, down 2.56%.

The market appears to be keeping a close eye on the crucial US Federal Reserve meeting tomorrow.

Economists are predicting the central bank to lift interest rates by up to 100 basis points to combat inflation.

Previously, US Fed chair Jerome Powell made hawkish comments about keeping a tight leash on inflation. He reiterated the goal to bring down annual inflation levels to 2% compared to the 8.3% recorded last month.

In addition, iron ore futures are falling 0.19% to US$98.80 per tonne.

After trading above the psychological $100 barrier for the past two weeks, the steel-making ingredient is struggling amid concerns about Chinese demand.

The country’s strict zero-COVID policy and weakened property sector is keeping demand subdued despite news about easing border restrictions.

BHP share price summary

Since the beginning of the year, the BHP share price has moved in circles to register a gain of 3%.

Over the past 12 months, the company’s shares are up 13%.

Based on the current price, BHP presides a market capitalisation of approximately $193 billion.

The post Why is the BHP share price lagging the ASX 200 today? appeared first on The Motley Fool Australia.

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More reading

• This is how I found a 15-bagger ASX share: fund manager
• $18 billion of ASX dividends are being paid out this week. Here’s the lowdown
• Here’s what this top broker is saying about the BHP share price
• Why China’s slowdown isn’t as bad as it looks for ASX 200 mining shares
• BHP share price gains amid improved Oz Minerals takeover rumours

Motley Fool contributor Aaron Teboneras 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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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.

The stock market suffered a setback on Tuesday, giving back gains from Monday’s session amid renewed fears about what the Federal Reserve might do when it concludes its two-day monetary policy meeting on Wednesday. Losses for the Dow Jones Industrial Average (DJINDICES: ^DJI), S&P 500 (SNPINDEX: ^GSPC), and Nasdaq Composite (NASDAQINDEX: ^IXIC) amounted to roughly 1%, with small-cap stocks taking relatively larger hits than their large-cap counterparts.

Index	Daily Percentage Change	Daily Point Change
Dow	(1.01%)	(313)
S&P 500	(1.13%)	(44)
Nasdaq	(0.95%)	(110)

Data source: Yahoo! Finance.

As the stock market becomes more volatile, investors are increasingly appreciating companies that reward them with predictable and growing streams of dividend income. Today, Microsoft (NASDAQ: MSFT) announced that it would boost its quarterly payout to shareholders. The tech giant pays a relatively modest yield, but some other dividend-stock stalwarts are also in line to pay more to their investors in the near future. Read on to learn more about Microsoft as well as three other companies that could give similar rewards to shareholders soon.

A higher payout for Microsoft

Microsoft stock didn’t do all that well on Tuesday, losing almost 1% in the regular trading session. However, long-term investors will get a little bit more from  the software giant in the form of higher dividend checks.

Microsoft’s board of directors declared a quarterly dividend of $0.68 per share. Shareholders of record as of Nov. 17 will receive the higher payout, which will show up in investors’ accounts on Dec. 8. The payout is $0.06 higher than the previous $0.62 per-share quarterly dividend.

With a dividend yield of only about 1%, most investors don’t think much about Microsoft as a dividend stock. Yet the company has developed a solid track record of boosting dividend payouts over time, with the latest move making 2022 the 20th straight year in which Microsoft has paid more in annual dividends than in the previous year.

These companies could be next

Many companies have even longer track records than Microsoft in paying higher dividends. For instance, the following three companies typically announce their dividend increases around this time of year:

• Emerson Electric (NYSE: EMR) has an impressive 65-year track record of paying higher dividends to its shareholders. The company’s most recent increase came last November when it announced a 2% boost to $0.515 per share on a quarterly basis.
• Fast-food giant McDonald’s (NYSE: MCD) made a larger payout boost late last year, increasing quarterly dividends by $0.09 to $1.38 per share. The Golden Arches chain has a 47-year streak of paying higher dividends for long-term shareholders.
• ExxonMobil (NYSE: XOM) has a 40-year dividend-increase streak on the line as it enters the final months of the year. Last year’s most recent payout boost added just a single penny to the quarterly payout, with shareholders receiving $0.88 per share each quarter.

There’s no guarantee that these companies will follow through with dividend increases. Every year, there are often at least a few long-paying dividend stocks that have to make payout cuts or even suspend their payouts temporarily.

However, all three of these blue chip stocks have strong businesses underlying them, and they’ve had the ability to weather difficult economic times in the past and still give their shareholders higher payouts over time. At a time when many investors are feeling increasingly uncomfortable with how much the prices of their stocks have fallen, the extra confidence of knowing that they can receive a quarterly check from these companies is especially valuable.

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

The post Microsoft just hiked its dividend. Who’s next? appeared first on The Motley Fool Australia.

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• Is Alphabet stock a buy after Q2 earnings?

Dan Caplinger has positions in Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Microsoft. 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.

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

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For Telstra Corporation Ltd (ASX: TLS) shareholders, surely the two most important dates on the calendar are the days that investors receive their cherished dividend payments.

As the dominant telco in Australia, Telstra shares have been famous for their dividends ever since the company was first listed on the ASX back in the 1990s.

The company’s dividend payments have had a lot of ups and downs over the company’s long history. But the telco undoubtedly remains one of the favourite ASX blue chip shares when it comes to dividend income.

So it goes without saying that today would be a very happy day for Telstra shareholders. That’s because it’s dividend payday.

When Telstra revealed its FY22 full-year earnings last month, it contained a bit of a surprise. For several years now, Telstra has doled out two fully franked dividend payments worth eight cents per share every year.

Telstra shares pay out with a dividend raise

But this year, Telstra revealed that its investors would be treated with a dividend pay raise. It’s the first investors have enjoyed since 2016. Yes, Telstra’s final payout for FY22 will come in at a fully franked 8.5 cents per share instead of the usual eight cents.

And this dividend is coming shareholders’ way today. That’s after Telstra shares traded ex-dividend on 24 August last month.

The dividend was originally scheduled to be paid out tomorrow. But in light of the public holiday commemorating the passing of Queen Elizabeth II, this has been changed. Telstra announced last week that the payment would be brought forward by one day so as not to fall on the public holiday.

Investors will either be receiving a cash payment today. Or else receiving additional Telstra shares if investors opt for the optional dividend reinvestment plan (DRP).

At the current Telstra share price of $3.80 (at the time of writing), this dividend payment brings the company’s dividend yield to 4.34%. That’s 6.2% grossed up with the full franking credits.

The post The Telstra dividend is being paid today. Here’s the latest appeared first on The Motley Fool Australia.

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• Looking to buy ASX shares? Expert reveals ‘one metric to assess the quality of a business’
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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.

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The CSL Limited (ASX: CSL) share price is in the red today, down 0.42% at the time of writing to $281.83.

CSL shares have been sluggish in recent times, down 5.1% in the past month and down 5.2% overall in 2022.

The company hasn’t announced any price-sensitive news since its FY22 results on 17 August. But there have been some good developments in the CSL lab of late, as reported by The Age today.

New drug could boost earnings

EtranaDez is a gene therapy that CSL is developing to treat haemophilia B.

Patients with haemophilia B don’t have the blood clotting protein Factor-IX. According to the article, EtranaDez instructs the patient’s cells to produce Factor-IX, thereby negating the need for regular and time-consuming intravenous treatments.

The drug is currently in Phase III of its development. According to the article, the US Food and Drug Administration is expected to decide whether to approve the drug later this year.

CEO Paul Perreault hopes to put EtranaDez into the market before the year is out.

Whether this could boost the CSL share price remains to be seen.

What do the experts think?

The Institute for Clinical and Economic Review (ICER) has just published a draft report on the potential financial benefits of EtranaDez for CSL.

The ICER assumes a “placeholder price” of $2.5 million in the United States market.

In a note to clients, Wilsons analyst Dr Shane Story said the report “frames the potential benefit of a one-time prophylactic injection which could stabilise the [haemophilia B] for years”.

The Wilsons equities team says the drug will enhance CSL’s existing haemophilia treatments. It expects “at least 10 per cent in incremental share from the currently underserved young adult patient segment”.

Macquarie and Credit Suisse analysts think EtranaDez will benefit CSL’s earnings pipeline into 2024.

In a note to clients, Credit Suisse said it forecasts “peak sales of $US400 million with $US200 million upside to CSL’s FY34 earnings”.

CSL began developing the drug in a $655 million partnership with the NASDAQ-listed genomic medicine company UniQure in 2020.

A quick history on the CSL share price

Before the pandemic hit the ASX, the CSL share price was as high as $336.40 in February 2020. It came crashing down with the rest of the market to an initial low of $270.88 in March 2020.

Since then, CSL shares have been rangebound between the mid-$200s and about $315.

The CSL share price has not risen above $300 since December 2021.

The post Could the CSL share price be set for a boost before the year’s end? appeared first on The Motley Fool Australia.

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• Looking to buy ASX shares? Expert reveals ‘one metric to assess the quality of a business’
• The CSL share price has been struggling of late. Is this because it’s fully valued?
• Leading brokers name 3 ASX shares to buy today
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Motley Fool contributor Bronwyn Allen has positions in CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL 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.

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We’re entering a period of heightened uncertainty with strong inflation and higher interest rates. Businesses with debt on their balance sheet could face higher interest expenses. Those ASX dividend shares that have debt could see their net profit come under pressure.

But, there are some names out there that don’t have any debt. Not only does this mean that they don’t have to contend with interest costs, but it could mean the overall business is in a stronger position.

Paying down debt could be a smart move for some management teams.

Let’s have a look at some of the names that have strong balance sheets and are dividend payers.

New Hope Corporation Limited (ASX: NHC)

New Hope is one of the largest coal miners in Australia. It’s currently benefiting from strong coal prices and this has meant the business can pay big dividends while also paying off its debt.

On 28 October 2021, the ASX share fully repaid the debt drawn under its syndicated debt facility of $310 million and then terminated that facility in July 2022. Its modelling indicates it doesn’t require any funding for general corporate purposes and advances the execution of a broader strategy.

With its FY22 result, it declared a final dividend of 31 cents per share and a special dividend of 25 cents per share. At the current New Hope share price, those two dividends equate to a grossed-up dividend yield of 13.3%.

Deterra Royalties Ltd (ASX: DRR)

Deterra Royalties owns royalties, including the Mining Area C royalty that is used by BHP Group Ltd (ASX: BHP). It’s looking for more opportunities to add to the portfolio.

The business is committed to paying out 100% of its net profit after tax (NPAT) as a dividend to investors.

Its FY22 dividend per share of 33.76 cents was an 89% increase, which represents a grossed-up dividend yield of 11.5%.

Alumina Limited (ASX: AWC)

The company says that its strategy is to “invest world-wide in bauxite mining, alumina refining and selected aluminium smelting operations through our 40% ownership of Alcoa World Alumina & Chemicals (AWAC), the western world’s largest alumina business.”

In its recent FY22 half-year result, the ASX share announced that its underlying NPAT went up 73% to $119.6 million. It also grew its interim dividend by 24% to 4.2 cents per share.

The last two dividends amount to a grossed-up dividend yield of 10.2%.

Michael Hill International Ltd (ASX: MHJ)

Michael Hill is one the largest jewellery businesses in Australia. It also has operations in Canada and New Zealand.

The company’s recent FY22 result saw the business grow revenue by 7% and net profit increased 13.9% to $46.7 million. The dividend was grown by 66% to 7.5 cents per share. At the current Michael Hill share price, the dividend yield is 6.7%. It had $95.8 million of cash at the year end.

Super Retail Group Ltd (ASX: SUL)

The Super Retail business is made up of a few retailing brands including Supercheap Auto, Rebel, BCF and Macpac.

While there may be a bit more economic uncertainty, the ASX share has started FY23 strongly, with group like for like sales rising by 17% in the first six weeks of FY23.

In FY22 it paid a full-year dividend of 70 cents per share, which equates to a grossed-up dividend yield of 10.4%.

The post Dividend beasts: 5 ASX shares with monster yields and no debt appeared first on The Motley Fool Australia.

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• Macquarie tips even more upside for New Hope share price
• Here are the top 10 ASX 200 shares today
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• Everything you need to know about the monster New Hope dividend
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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 Firefinch Ltd (ASX: FFX) share price has been out of action for almost three months.

However, a long-awaited return to trade could now be in sight following the release of an announcement this morning.

What’s going on with the Firefinch share price?

Just days after spinning off its lithium operations as a separate listing, Leo Lithium Ltd (ASX: LLL), in June, Firefinch suspended its shares, announced the sudden exit of its managing director, and released a shocking operational update.

In respect to the latter, gold production at the Morila Gold Project fell well short of expectations during the June quarter due largely to poor equipment availability. This meant its production ramp up was behind schedule and its calendar year guidance was withdrawn.

In addition, the company revealed that it experienced significant cost pressures in the last quarter. This included material increases in diesel prices, the cost of explosives, and other consumables.

This left Firefinch in an incredibly precarious financial position, which brings us to today.

What’s the latest?

This morning Firefinch announced a recapitalisation package. According to the release, the company will raise $90 million via a two-tranche placement.

The first tranche will raise approximately $10.4 million, whereas the second tranche, which is subject to shareholder approval, is set to raise $79.6 million.

However, the bad news for existing shareholders is that this will dilute their holdings materially. These funds will be raised at a massive 70% discount of 6 cents per new share.

In addition, the company’s current mining services contractor, MEIM Morila, has agreed to convert approximately US$23.4 million of outstanding debt and future liabilities into equity. Once again, this is subject to shareholder approval.

Additional trade creditors have followed suit and agreed to convert at least US$4.89 million of outstanding debt to equity.

Management notes that upon settlement of both tranches of the placement, Firefinch will have a pro-forma 31 August 2022 cash balance of $126 million before costs.

It may even have a touch more. That’s because Firefinch plans to launch a share purchase plan for retail shareholders of up to $10 million.

Management commentary

Firefinch’s non-executive chairman, Brett Fraser, commented:

The agreement of the recapitalisation package, together with the alignment of key stakeholders, represents a significant milestone and provides a strong balance sheet to enable the Company to continue the Morila production ramp up under the Company’s Stage 1 and Stage 2 production plan through to 2024.

Under Scott Lowe’s new leadership, the Company plans to complete its review of the Morila life of mine plan, to release an update to the Company’s ore reserve estimates based on the August update to the Morila Deposit’s Mineral Resources and to continue to implement its revised mining, capital expenditure and operational plans to ensure that Morila’s operations are more cost-effective and efficient. We appreciate the strong support that each of MEIM, Morila’s other service providers and the Company’s new and existing institutional shareholders have given the Company in order to implement the recapitalisation strategy.

The Firefinch share price is expected to return to trade “shortly after announcement of the Placement results and when Firefinch lodges its financial statements for the half year ending 30 June 2022.”

The post What’s happening with the Firefinch share price? appeared first on The Motley Fool Australia.

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More reading

• Firefinch share price remains on ice following key ex-BHP hire

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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