The Cochlear Limited (ASX: COH) share price is heading south on Wednesday morning.

This comes amid the S&P/ASX 200 Index (ASX: XJO) falling wayside today after global markets dipped on the expectation that the United States Federal Reserve will lift interest rates by 75 basis points.

At the time of writing, the hearing solution company’s shares are down 1.5% to $203.84.

Why are Cochlear shares falling on Wednesday?

Investors are offloading the Cochlear share price as it trades ex-dividend today.

This means if you purchased the company’s shares yesterday or before, you will be eligible for the latest dividend.

However, when a company’s shares trade ex-dividend, the share price tends to fall in proportion to the dividend paid out. This can also vary on how the market is tracking for the day, as well as investor sentiment.

For those eligible for Cochlear’s final dividend, shareholders will receive a payment of $1.45 per share on 17 October.

The dividend is 40% franked.

Are Cochlear shares a buy now?

Following the company’s financial scorecard, a number of brokers weighed in on the Cochlear share price.

As reported by ANZ Share Investing, analysts at Morgan Stanley raised its price target by 4.1% to $202 for Cochlear shares.

In addition, the team at Wilsons raised its target by 4% to $245 apiece. Based on the current share price, this implies an upside of roughly 20%.

On the other hand, Macquarie cut its rating to underperform from neutral and slashed its price target by 1.5% to $194.

This indicates a downside of 5% from where Cochlear shares trade today.

Cochlear share price summary

The Cochlear share price has dropped 13.8% over the past 12 months.

In comparison, the S&P/ASX 200 Health Care Index (ASX: XHJ) is down around14% for the same period.

Based on today’s price, Cochlear commands a market capitalisation of roughly $13.61 billion, and has a dividend yield of 1.4%.

The post Why is the Cochlear share price slipping on Wednesday? appeared first on The Motley Fool Australia.

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More reading

• Here’s how to grab your piece of the latest Cochlear dividend
• Here are 3 ASX 200 shares turning ex-dividend tomorrow
• ASX 200 better buy: Cochlear or CSL shares?
• Goldman Sachs says these ASX shares are flying under the radar post-results
• How do CSL shares stack up against Cochlear following earnings season?

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 positions in and has recommended Cochlear Ltd. The Motley Fool Australia has recommended Cochlear Ltd. 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 Sezzle Inc (ASX: SZL) share price is holding up well in early trade.

Sezzle shares closed yesterday trading for 59 cents and are currently trading for, well, 59 cents apiece.

This comes after the ASX buy now, pay later (BNPL) share released its August business update before market open this morning.

It also comes amid wider selling pressure in the leadup to tonight’s US Federal Reserve rate decision. This sees the All Ordinaries Index (ASX: XAO) down 0.93% at this same time, with rival ASX BNPL stocks down significantly more.

So, a flat share price is a win today.

What was reported for August?

The Sezzle share price is outperforming after the company reported underlying merchant sales (UMS) edged 1.1% higher month on month to US$142.8 million.

Despite that, the BNPL stock reported a 4.8% decrease in total income in August from the prior month to US$9.7 million. While down from July, total income increased 1.7% year on year.

The Sezzle share price could be receiving some tailwinds after the company reported its key revenue and cost initiates are proceeding and expected to generate US$40 million in annualised revenue and cost savings. While the company’s cash burn is declining significantly, the average monthly burn in 3Q22 (through to 31 August) still stands at US$1.9 million.

Commenting on the performance, Sezzle CEO Charlie Youakim said:

In 2022, we have not pursued growth for the sake of growth, and this has been reflected in our recent monthly results, which have shown year on year improvement in total income despite lower UMS. We have had opportunities to pursue significant growth that would be unprofitable, but we believe it is not the right time or environment for us to pursue such activities

Regarding Sezzle’s revenue and cost savings plans, Youakim added, “We are just getting started and are excited to announce we are embarking on another US$20 million in annual revenue and cost saving initiatives.”

Sezzle share price snapshot

There’s no beating around the bush on this one. It’s been an absolute horror year for the Sezzle share price, down 90% over 12 months. That compares to a full-year loss of 8% posted by the All Ordinaries.

The post Why is the Sezzle share price outperforming on Wednesday? appeared first on The Motley Fool Australia.

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More reading

• August’s RBA rate hike saw investors favour Macquarie and BHP shares. Here’s what to expect in September: expert
• Why is the Sezzle share price sinking on Monday?
• Why has the Sezzle share price exploded 128% in a month?
• Why is the Block share price tumbling 6% today?

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 National Australia Bank Ltd (ASX: NAB) share price has been outperforming the broader market this year.

The NAB share price is trading at $30.14 right now. That’s 2.8% higher than it started out 2022.

Meanwhile, the S&P/ASX 200 Index (ASX: XJO) has dumped 10% year to date. That leaves the banking major having outperformed the market by around 13%.

Does it still have a bright future ahead of it? Top brokers appear to think so.

Is now a good time to snap up NAB shares?

According to brokers, the NAB share price is gearing up to post further gains in the near future. But not everyone is bullish.

Morgan Stanley had a rating similar to a hold on NAB and a $27.20 price target on its shares, as my Fool colleague Tristan reported earlier this month. That implies a potential 10% downside on its current level.

However, the broker’s cynicism is overshadowed by others’ optimism.

Citi recently upgraded the big four bank’s stock to a buy rating and slapped it with a $32.75 price target – representing a potential 8% upside.

It likes NAB’s growing business lending and tips it to benefit from rising net interest margins, Tristan reports.

Finally, Goldman Sachs is more bullish still. It also expects the bank’s business lending to drive its growth as rate hikes boost its bottom line, as my Fool colleague James reports.

It tips the NAB share price to rise as high as $34.63, implying a potential 15% upside.

The broker is also expecting NAB to up its dividends to $1.50 per share in financial year 2023 and $1.70 per share in financial year 2024.

If those predictions come true, NAB’s dividends will have lifted 18% on its financial year 2021 levels next fiscal year and by 34% in financial year 2024.

The post NAB shares: Buy, hold, or fold? 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
• NAB shares: Boring or beautiful?
• Looking to buy CBA shares? Here’s how the bank’s balance sheet stacks up
• The NAB share price has gained 10% in 3 months. Too late to buy?
• Which ASX 200 bank share will win the great tech battle?

Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 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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Shares of Woolworths Group Ltd (ASX: WOW) have been cyclical these past 12 months, having entered and exited a number of peaks and troughs.

Woolworths had also narrowed its dividend payment earlier in 2022. Although upped its final dividend to 53 cents per share (cps). This brought the FY22 payment to 92cps.

However, what’s the health score of Woolworths’ dividend, and is it in jeopardy of continuing?

Coverage potentially at risk?

Woolworths increased its full-year payout by around 1.1% on the previous year. It currently trades on a trailing yield of 2.65%.

The total amount paid for the FY22 dividend is expected to be just over $1 billion. And there’s also the option for investors to participate in the company’s dividend reinvestment plan.

However, it’s relevant to know that Woolworths also converted around the same amount in free cash flow (FCF) for the 12 months to 26 June 2022.

Judging from these numbers, it might appear the sustainability of the Woolworths dividend might be at risk.

However, as dividend investors, one critical piece of information we need to obtain is the company’s dividend policy. That is, where does it pay dividends from?

This is relevant as some companies choose to pay dividends from profits, whilst others choose to do it from cash flows.

Where does Woolworths pay its dividend from?

Looking at the latter, the conglomerate paid around 115% of its free cash flow in dividends for FY22.

Thankfully, Woolworths doesn’t pay dividends from this pile of cash earnings.

According to its annual report, the company says that “[d]ividends are distributions of the group’s profit after tax before significant items and assets to its shareholders”.

That means it pays dividends from its profit ‘pile’, versus the remaining free cash it has after obligations.

In that vein, the payout is well covered. Approximately 72.5% of the payout figure is covered by the $1.55 billion in after-tax earnings Woolworths booked in FY22.

Despite this, there’s one disadvantage of covering the dividend payout figure from profits versus cash flow, and that’s the volatility in dividend payment and yield that can result.

We’ve seen this in the food and retail giant’s dividend stream over the past few years, coming off a high of $1.39 in FY15, and remaining lumpy since.

Meanwhile, the Woolworths share price has slipped more than 8% into the red this year to date.

The post Could the current Woolworths dividend be in jeopardy? appeared first on The Motley Fool Australia.

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More reading

• How many Woolworths shares does the CEO hold after his $8.4 million sell-down?
• Are these ASX blue-chip shares losing their defensive benefits?
• Attention Endeavour shareholders: Here’s some news on your dividends
• Have Woolworths shares ‘got their mojo back’?
• Supermarket shakeup: Do Coles shares offer better dividends than Woolworths?

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.

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The Pilbara Minerals Ltd (ASX: PLS) share price has climbed to a new record high on Wednesday after some good news offset the market selloff.

At the time of writing, the lithium miner’s shares are up almost 3% to a new high of $5.03.

This compares very favourably to the ASX 200 index, which is down a disappointing 1.2% in early trade following weakness on Wall Street overnight.

Why is the Pilbara Minerals share price rising?

The Pilbara Minerals share price is rising today following the release of a positive update relating to the company’s latest battery material exchange (BMX) auction.

After the market close on Tuesday, the company revealed the that its BMX auction had been another big success.

According to the release, Pilbara Minerals has commanded another increase in the price it commanded from the BMX auction.

After accepting bids of US$6,188 per dmt in July and US$6,350 per dmt in August, the company accepted the highest bid of US$6,988 per dmt in September.

This is for 5,000 dmt at a target grade of ~5.5% lithia and represents a decent 10% increase month on month. On a pro rata basis for lithia content (and adjusted to be inclusive of freight costs), this equates to a price of ~US$7,708 per dmt (SC6.0, CIF China basis).

This strong pricing appears to demonstrate that the insatiable demand for lithium is not cooling despite concerns about the potential for a global recession in the coming months.

Following today’s gain, the Pilbara Minerals share price is now up an impressive 40% in 2022.

The post Pilbara Minerals share price hits record high following lithium auction appeared first on The Motley Fool Australia.

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More reading

• Pilbara Minerals share price on watch following BMX lithium auction
• 5 things to watch on the ASX 200 on Wednesday
• Is this prediction great news for ASX lithium shares?
• Is this the new frontier for ASX lithium shares?
• Pilbara Minerals share price racks up ninth all-time high for September

Motley Fool contributor James Mickleboro has positions in Allkem 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 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 S&P/ASX 300 Index (ASX: XKO) is built from shares in most of the market’s biggest names. But, in an interesting turn of events, a fair chunk of them are currently unprofitable.

Indeed, nearly a sixth of the entire index is said to be trading on red balance sheets.

So, which of the market’s favourites are operating at a loss? Let’s take a look.

Do you own unprofitable ASX 300 shares?

The ASX 300 is reportedly housing a higher-than-normal number of unprofitable companies right now.

Research by MST Marquee, cited by the Australian Financial Review, found 48 of the 300 shares making up the index are currently operating at a loss.

That’s said to be 30% more unprofitable companies than is historically housed by the index.

And some may well be filling a spot in many investors’ portfolios.

Of course, market watchers are probably aware that the likes of Zip Co Ltd (ASX: ZIP) is yet to post a profit.

The buy now, pay later (BNPL) favourite posted a $1.1 billion loss for financial year 2022. As my Fool colleague Tony pointed out, that figure is greater than the company’s market capitalisation.

Looking to Zip’s tech peers, ASX 300 icon Novonix Ltd (ASX: NVX) is also unprofitable. As is Life360 Inc (ASX: 360).

Other non-profitable stocks that garner plenty of attention from investors are those operating in the lithium space.

Core Lithium Ltd (ASX: CXO), for instance, isn’t yet producing. Thus, it has nothing to profit from. It’s a similar story for Core Lithium’s peer, Lake Resources NL (ASX: LKE).

All up, the 48 ASX 300 shares yet to turn a penny are worth around $200 billion combined, the AFR reports.

Is there hope for unprofitable ASX favourites?

MST Marquee senior research analyst Hasan Tevfik dubbed unprofitable companies “birds without wings”, courtesy of the publication.

He reportedly said for every stock that evolves from a loss-maker to a market champion, there are likely to be several that miss out on such happy endings.

However, as Tevfik reportedly noted, Amazon.com Inc (NASDAQ: AMZN) was, for the years leading up to the early 2000s, an unprofitable tech stock.

And ASX 300 lithium share Pilbara Minerals Ltd (ASX: PLS) announced its maiden profit just last month, perhaps proving the journey can sometimes be worth it.

The post Guess how many companies in the ASX 300 actually make no money appeared first on The Motley Fool Australia.

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• Is this prediction great news for ASX lithium shares?
• Could this be a red flag or false alarm for Novonix shares?
• Here are 3 ASX growth shares analysts rate as buys
• Here are the top 10 ASX 200 shares today
• Why Lake Resources, Life360, Pilbara Minerals, and PolyNovo shares are storming higher

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. 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 Amazon and ZIPCOLTD FPO. The Motley Fool Australia has recommended Amazon. 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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Warren Buffett is one of the world’s greatest investors. He has an extraordinary record of identifying businesses with strong compounding potential and owning them for the long term. But he isn’t known for being an exchange-traded fund (ETF) investor.

Sure, he hasn’t gotten every single investment right, such as Tesco or airlines. But, he has made enough right decisions over the decades to make Berkshire Hathaway into one of the world’s biggest and greatest businesses.

I like the approach that Warren Buffett has taken with many of his investments.

But, I think that as one of the world’s leading stockpickers, it’s worthwhile looking into what his opinion on ETFs is considering the passive nature of many ETFs.

Buffett’s advice for the public about ETFs

According to commentary by my American Foolish colleague, Keith Speights:

In Buffett’s 2013 letter to Berkshire Hathaway’s shareholders, he wrote about how he and his longtime business partner Charlie Munger evaluate stocks. After this discussion, though, he noted that most investors don’t need to do what he and Munger do.

Buffett rightly pointed out, “In aggregate, American business has done wonderfully over time and will continue to do so (though, most assuredly, in unpredictable fits and starts).” He stated that non-professionals should simply invest in a cross-section of businesses and that “a lost-cost S&P 500 index fund will achieve this goal.” An index fund, as the name implies, simply holds all of the assets in the index that it attempts to track.

How serious was Buffett about this recommendation? He even put similar instructions in his will for how his cash should be invested for the benefit of his family. Buffett revealed that his will stipulates that 90% of the money should be invested in a low-cost S&P 500 index fund with 10% in short-term government bonds.

For investors on the ASX, the type of investment that would be the equivalent on the Australian Stock Exchange would be iShares S&P 500 ETF (ASX: IVV).

What’s in the iShares S&P 500 ETF?

Blackrock, the provider of this ETF, touts three compelling reasons to consider the fund.

First, it provides exposure to large, established US companies.

Next, the investment access it provides to the top 500 US stocks in a single fund.

Finally, it can be used to diversify internationally and seek long-term growth opportunities in a portfolio.

It owns names like Apple, Microsoft, Amazon, Tesla, Alphabet¸ Berkshire Hathaway, Johnson & Johnson, PayPal, Adobe, Visa, Mastercard and Home Depot.

What does Warren Buffett think about investing at times like this?

In 2001 Warren Buffett said the following:

To refer to a personal taste of mine, I’m going to buy hamburgers the rest of my life. When hamburgers go down in price, we sing the ‘Hallelujah Chorus’ in the Buffett household. When hamburgers go up in price, we weep. For most people, it’s the same with everything in life they will be buying — except stocks. When stocks go down and you can get more for your money, people don’t like them anymore.

In other words, I think he’d be very interested in looking at investing in shares on the ASX because of the selloff.

The post What does Warren Buffett think about investing in ETFs? appeared first on The Motley Fool Australia.

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• 3 excellent ETFs for beginner investors to buy
• Does the iShares S&P 500 ETF (IVV) pay dividends?
• 3 quality ETFs for ASX investors in September
• How does VGS stack up against other ASX index funds?

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. 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 Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Home Depot, Mastercard, Tesla, and Visa. 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 Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Mastercard, and iShares Trust – iShares Core S&P 500 ETF. 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 Syrah Resources Ltd (ASX: SYR) share price won’t be tumbling lower with the market today.

That’s because prior to the market open, the graphite producer requested a trading halt.

Why is the Syrah share price halted?

This morning Syrah requested that its shares be placed into a trading halt until Monday 26 September.

According to the release, the trading halt is requested pending an announcement by the company to the market regarding a labour-related operational interruption at Balama Graphite operation.

The Balama Graphite operation is in the Cabo Delgado Province of Mozambique.

What is the operational interruption?

No further information has been provided in relation to this “labour-related operational interruption.”

However, it is worth noting that several months ago the Syrah share price was sold off after the company revealed that there had been a security incident near to its operation.

Syrah advised at the time that there was an insurgent attack at a mine project site near Ancuabe, approximately 200km from the Balama Project.

As this and another incident occurred close to the N1 road, which is the primary transport route between Balama and both Nacala and Pemba, Syrah and its logistics service provider suspended all personnel and logistics movements through the route section.

There have been reports of further insurgent attacks in the province in recent weeks, so it isn’t inconceivable that the “labour-related operational interruption” relates to these. Though, until Syrah releases an announcement and confirms the reason for the halt, it is only speculation.

The Syrah share price is down 1% in 2022 after rebounding 25% since this time last month.

The post Why is the Syrah share price halted? appeared first on The Motley Fool Australia.

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More reading

• Investors are obsessed with ASX lithium shares, but what about this other critical battery metal?
• Batteries and water: Experts name 2 ASX shares you can’t ignore

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

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The Vanguard MSCI Index International Shares ETF (ASX: VGS) has seen its fair share of volatility in 2022.

At the time of writing, the exchange-traded fund (ETF) has fallen by around 15% since the beginning of the year.

Inflation and higher interest rates are seemingly the cause of the difficulties that the share markets are facing.

As The Motley Fool’s Bruce Jackson recently commented about the situation:

At this stage, it’s a guessing game, both as to what the inflation number might be and how the stock market might react.

What should investors do now?

Keep buying stocks. Keep regularly putting money to work, ideally each month, like clockwork. Invest more money into your favourite holdings, and/or into a broad-based ETF, like my favourite, the Vanguard MSCI Index International Shares ETF.

There’s a great Warren Buffett quote for times like this. “Be fearful when others are greedy and greedy when others are fearful.”

In other words, it’s good to invest when uncertainty is high and share prices are low. But be careful when market sentiment is strong and share prices are high.

Is this a good time to buy the Vanguard MSCI Index International Shares ETF?

I believe that businesses, collectively, will become worth more over time as they grow profitability, launch new products and services, expand geographically and so on.

I wouldn’t expect this Vanguard ETF to fall as much as others, such as the tech-focused Betashares Nasdaq 100 ETF (ASX: NDQ). The NDQ ETF has dropped around 25% in 2022. The Vanguard ETF is made up of a portfolio of businesses from a range of different industries.

While technology businesses are seeing valuation difficulties, others such as energy and financials are holding up quite well. That’s because they can benefit from higher energy prices and higher interest rates.

I think that it is a good time to invest in Vanguard MSCI Index International Shares ETF.

In my opinion, this ETF has a globally diversified portfolio, it’s managed for a low cost of 0.18% per annum, with businesses that have attractive long-term potential. For example, I am optimistic about a number of the ETF’s top holdings including Apple, Microsoft, Alphabet, Amazon.com and Nvidia.

There are a total of 1,470 positions in the portfolio, so it has a very good amount of underlying diversification in my view.

I believe that some of its financial metrics are impressive, including a return on equity (ROE) ratio of 18.3% and an earnings growth rate of 16.8%, according to Vanguard.

Foolish takeaway

I think the current volatility has made it the right time to invest in this ETF, for the long term. I’d prefer to buy shares of quality businesses at a lower price, with which we’re currently being presented.

The post Could right now be the perfect time to buy the Vanguard Index International Shares ETF? appeared first on The Motley Fool Australia.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. 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 Amazon, Apple, BETANASDAQ ETF UNITS, Microsoft, Nvidia, and Vanguard MSCI Index International Shares ETF. 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 positions in and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended Amazon, Apple, Nvidia, and Vanguard MSCI Index International Shares ETF. 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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It’s a big week for ASX dividend investors as BHP Group Ltd (ASX: BHP) gears up to pay a whopping US$8.9 billion in fully franked dividends to eligible shareholders tomorrow.  

BHP shares have already past their ex-dividend date, so these dividends are no longer on the table.

But there are other companies in the S&P/ASX All Ordinaries Index (ASX: XAO) that are yet to turn ex-dividend.

In particular, two ASX All Ords shares will be going ex-dividend on Friday. Since the ASX is closed tomorrow, today will be the final day to pick up the latest dividends from these ASX All Ords shares.

Both of these ASX All Ords shares are flashing sizeable trailing dividend yields. So, don’t be surprised to see their share prices in the red on Friday as the value of their respective dividends leaves their share prices.

Latitude Group Holdings Ltd (ASX: LFS)

First up, consumer finance business Latitude will be trading on Friday without a fully franked interim dividend of 7.85 cents per share.

Investors on the company’s share registry when the market closes today should receive this payment on 26 October.

Alternatively, shareholders have the option to forgo this cash payment in favour of participating in the company’s dividend reinvestment plan (DRP). Those who wish to participate must elect to do so by 27 September.

The market doesn’t appear pleased with Latitude’s first-half 2022 results, with shares down 9% in the last month.

Volumes came in at $3.7 billion, up 2% from the prior corresponding period (pcp) of 1H21, led by the personal and auto loans divisions.

Risk-adjusted income fell by 70 basis points from the pcp to 9.46%, weighed down by lower product pricing and higher funding costs. 

Given that Latitude makes the bulk of its revenue from interest on its products, other challenges during the half included excess consumer savings and elevated repayment rates.

Overall, the company’s cash net profit after tax (NPAT) dropped by 11% on the pcp to $93 million. On a statutory basis, which includes non-cash items such as amortisation and impairments, NPAT tumbled 66% to $31 million.

Despite the reduction in profits, Latitude held its interim dividend steady at 7.85 cents. This is in line with the company’s last two (and only) dividend payments since listing in mid-2021.

This means that Latitude shares are currently spinning up a sizeable trailing dividend yield of 11.5%. Including franking credits, this yield cranks up to 16.4%.

However, broker Macquarie believes Latitude could slash its dividends in the future, forecasting FY23 dividends of 8 cents per share. Based on current prices, this equates to a prospective forward dividend yield of 5.8%.

BSP Financial Group Ltd (ASX: BFL)

Also going ex-dividend on Friday is BSP Financial, the leading bank in the South Pacific.

Like Latitude, BSP recently released its first-half 2022 results. The group cut its unfranked interim dividend by 13% to 34 Papua New Guinean Kina (K).

ASX investors will receive this dividend in Aussie dollars on 14 October. 

The exchange rate will be finalised next week. But based on current spot prices, this dividend could land at around 14 Australian cents. 

Economic conditions in BSP’s markets improved in 1H22, leading to a 13% lift in net operating income to K1,144 million. More specifically, this was driven by increased lending activities in Papua New Guinea and Fiji, and higher transactional volumes now that borders have re-opened.

On the bottom line, BSP delivered 30% growth in underlying NPAT, which reached K586 million. However, the company was slugged with an additional company tax of K190 million as part of new legislation that came into effect earlier this year. 

BSP has filed an application to the Supreme Court to declare the additional company tax unconstitutional and invalid.

Circling back to dividends, we’ll have to wait for the confirmed exchange rate next week. But BSP Financial shares could be trading on a trailing 12-month dividend yield of around 13% at current levels.  

That said, between fluctuating exchange rates, foreign operations, and a different regulatory environment, BSP shares could be more complicated than your ordinary ASX investment.

The post 2 high-yielding ASX All Ords shares trading ex-dividend on Friday appeared first on The Motley Fool Australia.

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Motley Fool contributor Cathryn Goh 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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