I like buying shares as cheaply as possible. The 2.6% fall of the S&P/ASX 300 Index (ASX: XKO) yesterday has opened up plenty of opportunities to buy some shares at a cheaper price that have long-term growth potential. I’m looking at the Temple & Webster Group Ltd (ASX: TPW) share price and believe it’s worth buying.

What does it do?

Temple & Webster is a large online retailer of furniture and homewares. Indeed, it sells more than 200,000 products from hundreds of different suppliers. Products are sent directly to customers by suppliers, enabling faster delivery times and reducing the need for the company to hold inventory, allowing for a larger product range. The business also has a private label range sourced from overseas suppliers.

Why is the Temple & Webster share price falling?

The Temple & Webster share price fell around 4% yesterday and it’s down almost 50% in 2022. A lot of that decline could be attributed to investor uncertainty relating to inflation and rising interest rates.

FY22 was a solid year for the business. Its revenue increased by 31% to $426.3 million. The earnings before interest, tax, depreciation and amortisation (EBITDA) margin was 3.8%, which was at the top end of its 2% to 4% target range.

That EBITDA margin includes an investment of $1.7 million in its new home improvement site, The Build. Temple & Webster points to a large, addressable market of $16 billion in the home improvement area. The expansion means customers can buy items like tools and equipment, gardening, paint, flooring, plumbing fixtures, and so on.

The Build is on track to achieve revenue of between $10 million to $15 million in the first 12 months of operation. Home improvement revenue across the company grew by 61% year over year, contributing 5% of FY22’s total revenue.

However, when the company gave its trading update for FY23, it said that the timing of lockdowns in FY22 will make year-over-year growth comparisons “volatile”. July trading was down 21% year over year, while August trading (to 14 August) was down 17%.

Why I’m optimistic about the Temple & Webster share price

Importantly, Temple & Webster said that its early FY23 trading was ahead of internal estimates. It’s expecting to return to double-digit revenue growth during FY23 once it has finished lapping lockdowns from the prior year.

I’m excited by the potential of the home improvement side of the business. I think investing in ‘The Build’ will pay off.

The ASX 300 share is also focused on growing its trade and commercial division, which saw revenue growth of 39% in FY22.

Its customer metrics for the long-term are looking very promising my opinion. In FY22, active customers grew by another 21% to 940,000, while revenue per active customer increased 6% — this was the eighth consecutive quarter of growth.

I believe that the ongoing adoption of digital shopping will be a useful tailwind for the business. In 2021, online market penetration of furniture and homewares was between 15% to 17% in Australia, compared to 25% to 27% in the US.

In the long-term, it’s expecting that its EBITDA margin can increase to more than 15% as it benefits from scale, repeat customer orders and investment. The fact that it’s “targeting an increase in our unit economics each year” is a positive sign.

With no debt and a strong growth outlook, I think the Temple & Webster share price looks attractive.

The post I think this exciting ASX 300 share is a buy in the sell-off appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy today
• 2 ASX growth shares analysts rate as buys right now
• Top brokers name 3 ASX shares to buy next week
• Why did the Kogan share price leap 5% on Friday?
• ‘Material runway’: Goldman Sachs says Temple & Webster share price is a buy

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 Temple & Webster Group Ltd. The Motley Fool Australia has recommended Temple & Webster Group 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 Woolworths Group Ltd (ASX: WOW) share price hasn’t been spared from the current market rout.

Against a backdrop of soaring food inflation, Woolies shares have slipped 8.4% so far this year to sit at $35.23.

This has been enough to outperform the S&P/ASX 200 Index (ASX: XJO), which has backpedalled 10% since the start of the year.

But over the last month, Woolies shares have lagged the broader market. They’ve dropped by 7.7% compared to the ASX 200’s more palatable 3.3% fall.

So, what’s going on with Woolies shares? Let’s take a closer look.

Woolies’ FY22 results recap

Woolies delivered 9.2% revenue growth in FY22, with the core Australian food business growing its top line by 4.5%.

Earnings before interest and tax (EBIT) came in 2.7% lower across the group as Woolies battled store and supply chain disruptions throughout the year.

Commenting on current trading conditions, CEO Brad Banducci noted that the supermarket is seeing a gradual change in consumer behaviour as inflation puts pressure on household budgets. He noted:

While still very difficult to separate from the COVID-related impacts of the last two and a half years, we are seeing some customers trade down from beef into more affordable sources of protein and trade across from fresh vegetables into more affordable frozen and canned offerings.

In other news, Woolies’ acquisition of MyDeal.com.au Ltd (ASX: MYD) became legally effective yesterday.

The supermarket has picked up an 80% stake in the online marketplace at an enterprise value of $243 million.

MyDeal’s key management shareholders have retained a minority 20% stake, with MyDeal shares now suspended from trading. 

Have Woolworths shares got their mojo back?

David Wilson from First Sentier thinks so. In an episode of Livewire’s Buy Hold Sell, Wilson noted Woolies had a “terribly poor result” in the December half. 

But he thinks the tide could be turning for Woolies:

We think that they’ve actually got their mojo back, they’re taking out costs, they’re growing their market share, and they’re really well placed from an online point of view. So for us, it’s a buy.

What do brokers think about Woolies shares?

Wilson isn’t alone in his bullish view on Woolies shares.

After digesting Woolies’ FY22 results, analysts at Goldman Sachs reiterated their conviction buy rating on Woolies shares with an improved price target of $44.10. This implies potential upside of 25% over the next 12 months.

In a recent broker note, Goldman said it continues to prefer Woolworths shares as the top pick in the Australian consumer space. The broker highlighted Woolies’ digital and omnichannel advantage to drive further market share and margin gains.

The broker concluded:

Despite the softer topline environment, we believe that WOW’s reducing COVID costs, strong Cartology growth as well as careful execution will result in EBIT margin expansion.

Goldman believes the key downside risks for Woolies include worse Australian food volumes, an increase in competitive intensity, online sales underperformance, and poor management of cost inflation.

The post Have Woolworths shares ‘got their mojo back’? appeared first on The Motley Fool Australia.

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More reading

• Supermarket shakeup: Do Coles shares offer better dividends than Woolworths?
• Down 6% in a month, is September a good time to buy Woolworths shares?
• Why this top broker is tipping 23% upside for the Woolworths share price
• How do Endeavour’s dividends stack up against its old parent Woolworths?
• Brokers name 2 ASX 200 shares to buy for a retirement portfolio

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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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.

What happened

The market rout that drove the value of nearly all risk assets lower on Tuesday appears to have paused for stocks on Wednesday, but it’s continuing in the world of cryptocurrencies. The Bureau of Labor Statistics delivered its August consumer price index report Tuesday, and the inflation rate clocked in at a higher-than-expected 8.3% year over year. That was lower than July’s 8.5% result, but it still hit most major tokens hard. Continued selling pressure has resulted in declines in top tokens Bitcoin (CRYPTO: BTC) and Solana (CRYPTO: SOL) of 3.5% and 4.1%, respectively, over the past 24 hours, as of 11:15 a.m. ET Wednesday.

For investors in Terra Luna Classic (CRYPTO: LUNC), some disheartening token-specific news has driven a 21.6% decline over this same period. On Wednesday, a South Korean court issued arrest warrants  for Terraform Labs founder Do Kwon and five other involved individuals. It may be the last nail in the coffin for this embattled project, which had previously seen speculative buying pressure from traders.

So what

Nearly all talk about the potential for low-beta exposure to risk assets via cryptocurrencies is over. There has been an impressive degree of correlation between digital assets and equities over the past two years, which has been very unfavorable to crypto investors during this year’s sell-off. While this correlation has diminished from its all-time peak, generally speaking, the same macroeconomic forces that drive equities higher or lower appear to have significant influence over the price action of many top tokens.

Bitcoin and Solana are both attracting a significant amount of institutional investor interest. Accordingly, during this period of de-risking, these assets could continue to see outflows until the rhetoric around monetary policy shifts. In general, more expensive money means less liquidity searching for growth. For these high-upside, higher-risk assets, that could spell continued downward pressure, at least over the near term.

For investors in Terra’s ecosystem of tokens, word that arrest warrants have been issued is probably the last thing they wanted to hear. Whether one is involved in LUNC or other Terra-related assets, the advance of the regulatory probe to this degree is just the latest in a barrage of negative catalysts. Investors have reason to be concerned about the viability of the Terra ecosystem following this news, particularly given the turmoil within the Terra community.

Now what

Whether investors are considering quality crypto projects or more speculative options, it’s a tough time to be an investor right now. Macro headwinds abound, providing a bearish backdrop for all digital assets. And when it comes to those with token-specific issues such as LUNC, now does not seem like the time to throw good money after bad.

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

The post Why Bitcoin and Solana are sinking today appeared first on The Motley Fool Australia.

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More reading

• Why Bitcoin plunged on Tuesday
• Why Crypto stocks plunged today
• The Bitcoin price has tumbled 50% in 2022 but this expert says crypto ‘is here to stay’
• What’s supporting the Dogecoin price in September?
• Why Bitcoin and Solana jumped on Monday

Chris MacDonald has positions in Solana. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin and Solana. 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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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.

What happened

Shares of Apple (NASDAQ: AAPL) climbed higher Wednesday, adding as much as 2.1%. As of the close, the stock was still up by 0.96%.

Strong presale data for the iPhone 14 no doubt boosted the stock, but not everyone is convinced. One Wall Street analyst is suggesting that the tech giant’s iPhone revenue will actually be lower in fiscal 2023, curtailing the stock’s gains.

So what

Apple investors have been flooded with reports of strong iPhone 14 presales, which have historically been a good indicator of continuing consumer demand for the device. Earlier this week, numerous analysts read the digital tea leaves and concluded that strong pre-order data suggests resilient demand for the iPhone, even in the face of macroeconomic headwinds.

Just yesterday, Evercore ISI analyst Amit Daryanani was the latest to jump on the bandwagon, suggesting that longer lead times pointed to robust demand for the latest version of Apple’s flagship device, according to The Fly. He was particularly bullish regarding strong user interest in the iPhone 14 Pro, Pro Max, and Plus, the higher-priced models.

But not everyone is convinced. Bernstein analyst Toni Sacconaghi is generally more cautious about Apple’s prospects. The analyst suggested iPhone revenue could fall between 3% and 4% next year, a far cry from analysts’ consensus estimates, which are calling for an increase of 2%. Sacconaghi worries that after two years of strong sales, upgrade adoption will slow and the remaining buyers will opt for lower-priced devices. It’s worth noting that the analyst has a market perform (hold) rating and a price target of $170, which still suggests gains of 11% for investors over the coming year.

Now what

It’s important to remember that this is mostly just “fun with numbers.” No one knows for sure how many iPhones Apple will sell in a given year or what the product mix will be.

That said, Apple reached an important new milestone in the second quarter, with the iPhone accounting for more than 50% of all smartphones used in the U.S., overtaking Alphabet‘s Android for the first time.

Given its increasing share, continuing strong demand, and dominance of the high-end smartphone market, Apple stock remains a buy.

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

The post Why Apple stock popped Wednesday appeared first on The Motley Fool Australia.

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More reading

• Why Amazon and Apple stocks slumped Tuesday
• With most investors thinking the next big move in the stock market is down, Warren Buffett says times like these are your friend
• Why Apple stock popped on Monday
• Why the Apple share price fell today
• 6 reasons to buy Apple stock now and never sell

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Danny Vena has positions in Alphabet (A shares) and Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Alphabet (C shares), and 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 Alphabet (A shares), Alphabet (C shares), and 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.

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Wanting some ASX small caps in your portfolio? If you are, check out the two listed below that Morgans rates as buys.

Here’s what the broker is saying about these small caps:

Acrow Formwork and Construction Services Ltd (ASX: ACF)

The first small cap ASX share that Morgans is tipping as a buy is Acrow Formwork and Construction Services. It is a leading provider of engineered formwork, scaffolding, and screen systems solutions as well as in-house engineering and industrial labour supply services to the construction sector.

Last month, Acrow released its full year results and revealed a 40% increase in revenue to $148.3 million and the doubling of its net profit after tax to $17.8 million.

Morgans was impressed and believes the company is well-placed for further growth. It also highlights that its shares trade on very low multiples despite this positive form. The broker commented:

ACF is a well-managed business with leverage to growing civil infrastructure activity over the long-term, especially on the east coast. We believe the valuation remains attractive (~6x FY23F PE and ~6.5% yield) with potential positive catalysts from further meaningful contract wins.

Morgans has an add rating and 80 cents price target on Acrow’s shares.

Mach7 Technologies Ltd (ASX: M7T)

Another small cap ASX share that the broker is a fan of is Mach7. It is a medical imaging systems provider that develops innovative image management and viewing solutions for healthcare organisations.

As with Acrow, it was in fine form in FY 2022. For the 12 months, Mach7 reported a 42% increase in revenue to $27.1 million and a 253% jump in EBITDA to $2.8 million.

The good news is that Morgans expects this solid growth to continue in the coming years. The broker commented:

Mach 7 is a provider of enterprise image management systems that allow hospitals to identify, connect and share image and patient care data. Revenue growth of at least 20% pa is expected over the next three years.

Morgans has an add rating and $1.34 price target on Mach7’s shares.

The post Broker names 2 small cap ASX shares to buy now appeared first on The Motley Fool Australia.

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More reading

• Broker names 2 small cap ASX shares to buy in September

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 MACH7 FPO. The Motley Fool Australia has recommended MACH7 FPO. 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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Ask A Fund Manager

The Motley Fool chats with the best in the industry so that you can get an insight into how the professionals think. In this edition, Elvest Co portfolio manager Adrian Ezquerro explains how he launched a new small-cap fund at the bottom of the market this year.

Investment style

The Motley Fool: How would you describe your fund to a potential client?

Adrian Ezquerro: My name’s Adrian Ezquerro. I’ve been in the industry for a good period of time now and worked at Clime Investment Management for the best part of 15 years before branching out with Jonathan Wilson to establish Elvest Co this year. 

Elvest Co, the name itself points to our focus — it’s an abbreviation of ’emerging leaders investment company’. Everything that we do is focused on emerging leaders in small caps. 

Elvest Co, of course, is the manager of the Elvest Fund, so that’s our initial flagship fund and that’s a small cap Australian equities fund that basically invests in 20 to 40 companies that are outside the S&P/ASX 100 (ASX: XTO) at the time of initial inclusion.

Ultimately we’re just seeking to build a portfolio full of really high quality, undervalued emerging leaders with strong long term growth potential. I’ll probably also add that we have an approach that is based around fundamentals. 

When we’re assessing potential investments, we generally look for five key characteristics — emerging industry leadership, strong balance sheets, healthy cash generation, what we call aligned management team, so we invest alongside a lot of founder led or owner manager type businesses. 

And lastly we look for what we call large opportunity sets — so that basically means we’re looking for companies with really significant long-term growth potential.

MF: Would it be fair to say it’s been a tough time this year for small cap and emerging company investors like yourselves?

AE: Yeah, it’s certainly been a tough market for small caps. You can observe that small caps have fallen by even more than your large cap indices. And that’s particularly prevalent here in Australia and you can also see it with the performance of the Russell 2000 Index (RUSSELL: RUT) in the United States, so that’s replicated across geographies. 

In our view, of course, therein lies part of the opportunity and some of the context for that is, from our viewpoint at least, is that we were effectively out of market [at the] start of the year, so that was good luck more than anything else.

We launched the fund on 1 June and that was interesting in that we were launching a fund with 100% cash coming into a month that proved to be the second worst month since the GFC. It was down over 13% in June. In a sense, that provided us with an opportunity to, to a degree, deploy some cash into a depressed market and we’ve continued to do that with all the volatility we’ve seen. 

Having said that though, we’re still sitting on cash of close to 30%, so we feel we’re pretty well positioned to continue taking advantage of any drawdowns or significant volatility that may yet still come our way.

MF: That’s great. Many people would be, myself included, very envious that you had 100% cash in June. That’s great timing.

AE: Yeah, well I can’t take credit for that. I think that luck was on our side. But I think over time in markets, these things even themselves out and really, if you pick high quality companies and you’re sensible with your entry prices, then returns over time will take care of themselves.

MF: Where do you see the market heading in the near future?

AE: Well, it’s interesting, right? I wouldn’t say that we’re heavily macro driven but it would be foolish to ignore some of the headwinds that economies and markets are currently facing. I think it’s really well known, of course, that inflation has surged much higher in major economies and we’ve just seen surprisingly high [inflation] from the US and of course it’s impacted markets. 

In more recent times we’ve seen long bonds normalised. We’ve had a multi-decade bond rally. That’s now certainly over. We’ve got a period of interest rate normalisation. I think the one significant X factor in this calendar year, we’ve seen the invasion of Ukraine and of course that’s had flow-on effects for energy markets and it’s been a significant impost in terms of its impact on inflation and what that therefore means for consumers and businesses.

There are certainly some headwinds. To a significant extent that is reflected in equity pricing. But I think, looking ahead, there is a chance that we remain in a pretty choppy environment and that therefore it remains really important to focus on high quality companies that have high levels of profitability, margin, defendable business, and pricing power. 

At a portfolio level, as I’ve already said, I think it’s important to keep some dry powder as well so that you can deploy into these sorts of oppressed opportunities when you see good value on offer.

The post High quality ASX shares beat timing the market every time: fundie appeared first on The Motley Fool Australia.

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More reading

• Experts say these high yield ASX dividend shares are buys
• Why Tesla shares popped today
• This ASX company with 190% profit growth pays a MASSIVE dividend yield
• Analysts name 2 excellent blue chip ASX 200 shares to buy now
• 5 things to watch on the ASX 200 on Thursday

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.

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If you’re looking to boost your income portfolio this month, then you may want to look at the shares listed below.

Here’s why these ASX dividend shares could be worth considering right now:

Charter Hall Social Infrastructure REIT (ASX: CQE)

The first ASX dividend share that analysts have named as a buy is the Charter Hall Social Infrastructure REIT.

It is a real estate investment trust that owns a portfolio of social infrastructure properties. These are properties that provide social and community services such as council buildings and early learning centres.

Analysts at Goldman Sachs are very positive on the company. They highlight the Charter Hall Social Infrastructure REIT’s solid like for like rental growth, 100% occupancy rate, and a weighted average lease expiry of 14.6 years.

The broker is expecting this strong form to continue and is forecasting dividends per share of 17.3 cents in FY 2023 and 18 cents in FY 2024. Based on its current share price of $3.45, this will mean yields of 5% and 5.2%, respectively.

Goldman currently has a conviction buy rating and $4.35 price target on its shares.

HomeCo Daily Needs REIT (ASX: HDN)

Another ASX dividend share that analysts have tipped as a buy is the HomeCo Daily Needs REIT.

It is a property company with a mandate to invest in convenience-based assets across the target sub-sectors of Neighbourhood Retail, Large Format Retail and Health & Services.

It has the aim of providing shareholders with consistent and growing distributions and appears well-placed to deliver on this according to analysts at Morgans.

Its analysts like the company partly due to its significant development pipeline. They note that this development pipeline is valued at over $500 million, which should underpin solid future growth.

As for dividends, the broker is forecasting dividends per share of 8.3 cents in FY 2023 and 8.7 cents in FY 2024. Based on the current HomeCo Daily Needs share price of $1.25, this will mean dividend yields of 6.6% and 7%, respectively.

Morgans has an add rating and $1.56 price target on its shares.

The post Experts say these high yield ASX dividend shares are buys appeared first on The Motley Fool Australia.

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More reading

• Why these 3 ASX shares could be in for a massive boost this month
• Boost your income with these ASX dividend shares: analysts
• Analysts say these ASX dividend shares are buys right now
• 2 excellent ASX dividend shares with big yields that analysts rate as buys
• Brokers name 2 ASX dividend shares to buy

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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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.

What happened

Tesla (NASDAQ: TSLA) shares popped nearly 5% Wednesday morning after details surfaced from an invite-only investor conference. Shares were still 3.6% higher as of 1:37 p.m. ET. 

So what

The stock dropped yesterday when one electric vehicle (EV) sector analyst presented a case for why a formidable competitor might surprise investors. But those sentiments reversed today after reports started coming out on what Tesla’s head of investor relations said at the Goldman Sachs technology conference in San Francisco Monday. 

Martin Viecha provided attendees of the tech conference with a five-year plan on Monday that has been shared by Yahoo! Finance. The big takeaway for investors is the company continues to focus on cutting costs, which should lead to a new, low-cost EV model down the road. 

Now what

Viecha recalled how it cost Tesla $86,000 to manufacture a car in 2017, and that cost per vehicle is now down to $36,000. The company plans to continue to focus on cost-cutting. It recently revealed it is considering building a lithium refining plant in either Texas or Louisiana that could be in commercial production by the end of 2024. This follows comments by CEO Elon Musk earlier this year that constraints in the refining process are a major reason for the quickly rising costs of lithium-ion batteries. 

But it’s not just the discussion on cost-cutting that garnered investor attention today. It’s more the fact that it could lead to Tesla offering a low-priced entry-level vehicle like a hatchback. This also doesn’t come as a surprise, since Musk has talked about that in the past. But a more concrete plan for getting to a mass-market vehicle offering has investors boosting Tesla shares today. 

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

The post Why Tesla shares popped today appeared first on The Motley Fool Australia.

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• Why Tesla shares dropped today

Howard Smith 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 Tesla. 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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Growth and dividends are stereotypically seen as qualities that are incompatible within the same stock.

ASX shares considered high growth usually represent companies that plough their spare cash back into the business to fuel expansion. 

On the other hand, companies that are high dividend payers can afford to do that because they’re not reinvesting it back into growth.

So what happens when you come across a business that’s both growing and handing out a fat yield?

You buy it and hold on for dear life.

ASX share with ‘impressive financial results’

That’s exactly what Cyan Investment Management is doing with construction materials provider Big River Industries Ltd (ASX: BRI).

Portfolio managers Dean Fergie and Graeme Carson told their clients in a memo that Big River’s reporting season update was pleasing.

“Building products manufacturer and distributor Big River was… [a] holding that produced impressive financial results, with FY22 revenues rising 45% to $409 million and underlying profitability up 191% to $22.7 million.”

The market pushed the stock price up 11% over August.

Then came the cream on top.

“Shareholders were rewarded with a final dividend of 10.0 cents per share, taking the full year payout to 15.5 cents, which equates to a ~7% fully franked yield.”

Despite this August party, the Cyan portfolio managers are holding onto the stock for further growth.

“After meeting with Big River this week, the company does not consider FY22 to be a ‘one-off’ with business momentum and margin expansion continuing into FY23.”

Strength in a volatile year

In a year when most non-mining stocks have been hammered, the Big River share price has shown remarkable resilience. The stock is flat over the past 12 months.

Analyst coverage of the company, with a market capitalisation of $178 million, is sparse. 

But according to CMC Markets, at least the team at Moelis Australia agree with Fergie and Carson, rating Big River as a strong buy.

The post This ASX company with 190% profit growth pays a MASSIVE dividend yield appeared first on The Motley Fool Australia.

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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.

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If you’re wanting to strengthen your portfolio with some ASX 200 blue chip shares, you may want to look at the two listed below.

Both have recently been named as buys by leading brokers. Here’s why they could be buys:

Macquarie Group Ltd (ASX: MQG)

The first blue chip ASX 200 share that analysts rate as a buy is investment bank Macquarie.

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.

The broker currently has an add rating and $215.00 price target on Macquarie’s shares. This implies potential upside of 22% for investors over the next 12 months.

Morgans commented:

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.

ResMed Inc (ASX: RMD)

Another highly rated ASX 200 blue chip share for investors to look at is ResMed.

It is a global leader in the development, manufacturing, distribution, and marketing of medical devices and cloud-based software for the diagnosis, treatment, and management of respiratory disorders.

The team at Credit Suisse are very positive on the company. They believe ResMed is well-placed to grow its market share in the lucrative sleep treatment market due to a product recall from arch rival Philips. Particularly if US regulators require Philips’ quality control systems to be approved before allowing it to return to market again.

Credit Suisse currently has an outperform rating and $40.00 price target on the company’s shares. This suggests potential upside of 15% for investors over the next 12 months.

The post Analysts name 2 excellent blue chip ASX 200 shares to buy now appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Macquarie shares bear the brunt of bank sell-off amid inflation bomb
• Top ASX dividend shares to buy in September 2022
• Top brokers name 3 ASX shares to buy next week
• I shouldn’t have sold this ASX share two years ago: fund

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 has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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