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.

Are you looking for a way to turn a little bit of money now into a lot of money later? If you’re reading this, you probably are. You’re also looking in the right place to make it happen. The stock market is one of the few means of building significant wealth within one lifetime, even if you’re starting out with next to nothing. Indeed, a modest sum of $20,000 could become as much as $350,000 (or more) if you handle things smartly. Here’s how to make it happen.

Yes, from here all the way to there

Sounds too good to be true? It isn’t. A proverbial down payment of $20,000 on a comfortable future funded by a nest egg of $350,000 is not only possible but also likely. There is a catch, however.

But first things first.

Just for the sake of simplicity, let’s use the S&P 500 Index (SP: .INX) as our proxy for the broad stock market. It’s obviously possible to own individual stocks en route to riches, but it’s easier — and often just as productive — to simply plug into a basket of stocks like the S&P 500.

Let’s also assume the future will more or less look like the past. That is to say, let’s assume the S&P 500 will grow by an average of 10% per year as it has for the past several decades. Some years are better than others; occasionally, the market even logs a loss for the full year. Given enough time, though, yearly 10% returns are a reasonable expectation.

Given these two assumptions, a $20,000 investment in an S&P 500 index fund today should be worth somewhere around $350,000 in 30 years from now.

However, there are two catches to achieving this sort of success with stocks.

The two big keys to success

One of these catches is how your investment is managed once it’s initially been made. Once you’re invested, any gains should be reinvested into the market right away. Ditto for any dividends collected.

It’s called compounding. This approach ensures you’ve got as much money as possible working for you for as long and as often as possible, as you’re earning future gains on prior gains and not just on your initial principle. Without reinvesting your gains, your average annual return on an S&P 500 index fund is cut nearly in half.

The other (related) catch is that you really need to give yourself a full 30 years to achieve this sort of long-term gain. Anything less, and you won’t do nearly as well.

Take another look at the progress chart of a $20,000 investment above. Half of the $330,000 net gain was achieved only in the final seven years of the 30-year stretch. In other words, if you sat on a $20,000 investment for 23 years, you’d only end that timeframe with a little over $160,000. That’s a huge difference, particularly if your nest egg will fund most of your retirement spending.

Of course, this means you’ll want to put your initial money to work as early as you can in life.

Doing something small is better than nothing at all

To be clear, the example above assumes you’ll make only a one-time investment of $20,000 in the stock market and never add new capital. You likely will be able to contribute fresh cash along the way, though. Even a tiny additional annual investment can make a big impact over a period of 30 years. For instance, in the example above, adding just another $2,000 to your holdings at the end of every year would ratchet your eventual nest egg up to a sum of nearly $680,000.

The underlying lesson is the same in both scenarios, though. That is, getting into the stock market as soon as possible and staying as fully invested as possible the whole time — even when it’s uncomfortable to do so — is well worth the time and effort. A relatively small stash can become a surprisingly big one when you earn increasingly more money on your past gains and dividends.

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

The post Investing in the stock market could turn your $20,000 into $350,000. Here’s how appeared first on The Motley Fool Australia.

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• Rio Tinto share price shrugs off latest blow to Turquoise Hill deal
• Why are ASX 200 tech shares having such a cracking start to the week?
• Why is the Link share price frozen today?
• What could rising interest rates mean for the Bendigo Bank share price?

James Brumley 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.

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

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The Atlas Arteria Group (ASX: ALX) share price has started the session down on Monday and now trades in the red.

At the time of writing, shares in the toll road operator and developer are trading at $7.87 apiece, extending losses over the past month to more than 1.6%.

What’s up with the Atlas Arteria share price?

Shares have traded flat this morning following a company update regarding Atlas’ potential takeover of a new toll road.

In an announcement to the ASX, the company confirmed it was in the running to potentially acquire the Chicago Skyway toll road, in no certain terms.

“ALX regularly reviews growth opportunities and strategic options available to ALX,” it said in the statement.

“ALX confirms that it is participating in the sale process for Chicago Skyway. However, there is no certainty that a transaction will eventuate,” it added.

“[The company] does not propose to make further comment on this transaction until an outcome is known or it ceases to be involved in the sale process.”

Meanwhile, the Atlas Arteria share price has been somewhat of a steady performer this year.

It comes as investors seek out potential hedging plays to overcome the eroding impacts of inflation on their portfolios.

The share had been snaking higher across the year to date. That was until news surfaced it was a potential takeover target from IFM Investors back in June.

Investors sent it in a vertical uptrend, harpooning a new 52-week high onto the chart in the process.

It has held the line since, as seen on the chart below.

In the last 12 months, the Atlas Arteria share price is up 18% after a nearly 14% gain this year to date.

The post Why is the Atlas Arteria share price hitting the headlines on Monday? appeared first on The Motley Fool Australia.

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• Atlas Arteria share price drives higher on record dividend guidance
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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 Rio Tinto Limited (ASX: RIO) share price is in the green in morning trade, up 0.9%.

Rio Tinto shares closed on Friday trading for $94.26 and are currently trading for $95.19 apiece.

Investors don’t appear overly concerned about the latest hiccup standing in the way of the S&P/ASX 200 Index‘s (ASX: XJO) latest acquisition.

Turquoise Hill may not be quite in the bag after all

The Rio Tinto share price has been in focus as the company pursues its acquisition of listed Canadian resource explorer, Turquoise Hill. Rio wants to acquire 49% of the issued and outstanding shares of Turquoise Hill that it doesn’t already own, with an eye on expanding its copper footprint.

Turquoise Hill co-owns the Oyu Tolgoi project in Mongolia, which Rio Tinto says is one of the largest known copper and gold deposits in the world. But there’s a lot of work to be done to get into production. According to estimates from Turquoise Hill, some US$3.6 billion of funding is required to complete the project.

With Rio delivering certainty for those financing needs, that acquisition looked to be in the bag last Tuesday.

Rio Tinto had upped its already improved non-binding proposal of C$40 cash per share for the Canadian miner to C$43 cash per share on 1 September, with an agreement made in principle.

As The Motley Fool reported on Tuesday 6 September, Rio Tinto and Turquoise Hill had progressed the deal to enter into a definitive arrangement agreement. The Turquoise Hill board unanimously recommended shareholders vote in favour of the improved offer.

Rio Tinto CEO Jakob Stausholm said last week that, “After extensive negotiations, the terms of the transaction are final and there will be no further price increase.”

But on Friday, Pentwater Funds, which holds some 11.7% of Turquoise Hill shares, stated Rio’s offer “significantly undervalues” the company.

According to Pentwater (courtesy of Reuters):

The proposed price implies an equity value of $8.65 billion CAD, which is a fraction of the free cash flow that Pentwater expects Turquoise Hill to generate over the next decade. Pentwater expects Turquoise Hill to generate over $10.5 billion CAD of free cash flow through 2030.

Pentwater expects that as the world continues to move towards electrification, copper demand will outpace supply, resulting in strong copper prices over the coming decade.

Stay tuned…

Rio Tinto share price snapshot

While it hasn’t shot the lights out, the Rio Tinto share price has outperformed in 2022, down 4.5% compared to the 8.5% loss posted by the ASX 200.

The post Rio Tinto share price shrugs off latest blow to Turquoise Hill deal appeared first on The Motley Fool Australia.

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• Top ASX dividend shares to buy in September 2022
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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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Tech shares are outperforming the S&P/ASX 200 Index (ASX: XJO) on Monday.

The S&P/ASX 200 Information Technology Index (ASX: XIJ) has lifted 1.6% compared to the broader index’s 0.99% rise at the time of writing.

That makes it the market’s second-best performing sector, behind only the S&P/ASX 200 Materials Index (ASX: XMJ).

Further, the S&P/ASX All Technology Index (ASX: XTX) has lifted 1.21% right now.

So, what’s driving tech shares higher on Monday and which ASX 200 constituents are leading the sector? Let’s take a look.

Why are ASX 200 tech shares outperforming today?

ASX 200 tech shares have started the week out on the right foot following a strong session on Wall Street.

The tech-heavy Nasdaq Composite Index (NASDAQ: .IXIC) lifted 2.11% to post its third consecutive gain on Friday after dumping 8.6% between 25 August and 6 September. The index ultimately gained 4.14% over the course of last week.

And ASX 200 tech stocks are following its lead. The tech sector gained 3.8% last week, while today’s rise has boosted it to a three-week high.

It appears that one of the most embattled stocks is posting the biggest gains today. The best performing ASX 200 tech share right now is EML Payments Ltd (ASX: EML), having gained 6.5% to trade at $1.065 at the time of writing.

It plummeted 11% on 24 August after the company revealed it identified fraudulent activity within its debt processing business.

The Block Inc (ASX: SQ2) share price is also posting a notable gain today, rising 4.9% to $109 right now.

Meanwhile, in third place is the Life360 Inc (ASX: 360) share price. It’s currently up 5.5% at $5.73.

Its fellow market favourites Megaport Ltd (ASX: MP1) and NextDC Ltd (ASX: NXT) are also pushing higher, gaining 3.1% and 2.8% respectively.

However, the ASX 200 tech sector has a long way to go to catch up with the broader market. It has dumped 28% year to date, while the All Tech Index has slumped 27%.

For context, the ASX 200 has lost 8% since the start of this year.

The post Why are ASX 200 tech shares having such a cracking start to the week? appeared first on The Motley Fool Australia.

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• Here are the 10 most shorted ASX shares
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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 Block, Inc., EML Payments, Life360, Inc., and MEGAPORT FPO. The Motley Fool Australia has positions in and has recommended Block, Inc. and EML Payments. The Motley Fool Australia has recommended MEGAPORT 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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The Link Administration Holdings Ltd (ASX: LNK) share price isn’t going anywhere on Monday.

This morning the company requested its shares be placed in a trading halt before market open.

At the end of last week’s closing bell, the administration services company’s shares finished at $4.48 apiece. It’s worth noting the company’s shares have gained more than 7% in value in the past week.

Why is the Link share price halted?

Prior to the market open, the company requested the Link share price be halted while it prepares an announcement.

The company says it is planning to release a statement on or before Wednesday 14 September.

The request for the voluntary trading halt is in regards to an “update on the regulatory approvals which are conditions precedent to the scheme of arrangement with Dye & Durham Corporation.”

Last week, the Australian Competition and Consumer Commission (ACCC) gave the go-ahead for Canadian-listed Dye & Durham to acquire Link.

The latest offer comprises of $4.81 per share which Link shareholders accepted with a 98% majority in late August.

In addition, Link shareholders will receive a net consideration of up to 13 cents per share from the sale of its Banking and Credit Management (BCM) business. Although, this is provided that the business is sold and proceeds are received up to 12 months after the implementation of the revised scheme.

About the Link share price

Over the past 12 months, the Link share price has moved in circles to return relatively nil gains for the period.

However, in 2022, the company’s shares are down 20%.

Based on its last traded price, Link commands a market capitalisation of roughly $2.3 billion.

The post Why is the Link share price frozen today? appeared first on The Motley Fool Australia.

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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 Link Administration Holdings Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Bendigo and Adelaide Bank Ltd (ASX: BEN) share price has started the day off in the green on Monday.

At the time of writing, shares in the bank are swapping hands less than 1% higher at $8.61 apiece on no news.

In broad sector news, the Vaneck Australian Banks ETF (ASX: MVB) – an exchange-traded fund (ETF) tracking the banking basket – is up around 1% on the day.

Rising rates and the Bendigo Bank share price

ASX-listed banks started the calendar year off well as a basket in 2022 before turning sharply and underperforming since May.

Bendigo shares lagged somewhat before capitulating from highs of $10.68 on 3 June to reach lows of $8.68 seventeen days later.

It then reclaimed the entire down-leg of this move and thrust to 52-week highs on 12 August before racing to its 52-week lows less than a month later, seen below.

The rapid succession of highs-lows-highs and then back again might be mistaken for the failed results of a lie-detector test, but rest assured, there is plenty of truths in the pressures Bendigo faces.

Chief to the investment debate for Bendigo and its banking counterparts looking ahead is the talk around the Reserve Bank (RBA), interest rates, and inflation.

Ultimately the three are intertwined but what’s set to impact Bendigo most – either positively or negatively – are key interest rates set by the RBA.

Theoretically, an increase in the level of commercial interest rates is a positive for banks, seeing an increase in banking net interest margins (NIMs), resulting in higher cash earnings.

However, as noted last week, banking shares have underperformed in spite of this perceived sector specific tailwind.

Further, the Australian residential mortgage market is tremendously overcrowded with many, many players involved – both banking, and non-banking.

The result is a more competitive pricing environment as interest rates increase, which makes it difficult for those with weaker loan and/or deposit books to outperform.

When it will return to a more benign pricing environment – no one knows, especially as the near to mid-term outlook for the real economy is equally as unknown.

Nevertheless, analysts at Macquarie are constructive on the sector and believe the new interest rate regime could provide a “sugar hit” for the industry.

This is surely to be for the short-term, they say. The outcome of this could be less rosy however, especially if “credit growth is going to be slow for a long period of time”. It would have a “substantial impact on the earnings outlook and the valuation of banks”.

Meanwhile, the Bendigo Bank share price is down more than 5% this year to date, having slipped nearly 11% into the red in the past 12 months.

The post What could rising interest rates mean for the Bendigo Bank share price? appeared first on The Motley Fool Australia.

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More reading

• Why rising rates are a ‘sugar hit’ for ASX 200 bank shares: Macquarie
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• Hoping to deposit the latest Bendigo Bank dividend? Here’s what you need to know
• Reason for hope as ‘worst month of the year’ starts off badly

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 positions in and has recommended Bendigo and Adelaide Bank 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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There are a select few S&P/ASX 200 Index (ASX: XJO) shares that have delivered strong returns over the long term. This has come through in the underlying profit and earnings per share (EPS).

It is often said that share prices follow profit. If a business can grow its core profit over the long term, then this can be a real boost for investor sentiment about the business.

While past performance is not a guarantee of future performance, it can be interesting to study and recognise what a business has achieved.

Let’s look at some of these growth numbers:

Altium Limited (ASX: ALU)

Altium is a software business that provides the tools for engineers to design electronic printed circuit boards. It also offers other services such as an electrical parts search engine called Octopart.

The ASX 200 tech share recently returned to a high level of growth in its FY22 result after revealing revenue growth of 23% to US$220.8 million and EPS growth of 57% to US 42.2 cents.

According to S&P Capital IQ, Altium has grown its diluted EPS before ‘extraordinary items’ at a compound annual growth rate (CAGR) of 21% over the past decade.

For FY23, Altium said it’s expecting to grow its revenue by between 15% to 20% to between US$255 million to US$265 million.

Magellan Financial Group Ltd (ASX: MFG)

Magellan is a fund manager that offers a few different investment strategies across global shares, infrastructure shares, and Australian shares.

When the ASX 200 share reported its FY22 result, Magellan had delivered significant profit growth over the prior decade. Magellan’s diluted EPS before extraordinary items had grown at a CAGR of 37.6% over the prior ten years.

However, while Magellan’s average funds under management (FUM) fell by 9% to $94.3 billion in FY22, its total FUM had fallen to just $57.6 billion as at 31 August 2022.

Brickworks Limited (ASX: BKW)

Brickworks is a large building products manufacturer in Australia. It makes, as the name implies, bricks as well as paving, masonry, precast items, and more. It also has other investments in things like industrial property.

The development of industrial properties within the trust has helped the ASX 200 share’s EPS grow. According to S&P Capital IQ, the diluted EPS before extraordinary items has grown at a CAGR of 24.7% per annum over the prior decade.

Brickworks is planning to release its FY22 result on Wednesday, 21 September 2022. Investors will be able to see how its EPS has performed during the latest reporting period.

The post Steady compounders: 3 ASX 200 shares that have delivered over a decade appeared first on The Motley Fool Australia.

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More reading

• How I’d invest $10,000 in ASX shares if I were saving for a house
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Motley Fool contributor Tristan Harrison has positions in Altium and Brickworks. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium and Brickworks. The Motley Fool Australia has positions in and has recommended Brickworks. 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 saw numerous companies in the S&P/ASX 200 Index (ASX: XJO) declare lucrative dividends throughout ASX reporting season in August.

Now, these ASX 200 shares are finalising which investors are entitled to the payments.

To do so, they set a cut-off date, which is also known as the ex-dividend date. This is the date that a company’s shares no longer trade with the upcoming dividend payment attached to it.

Tomorrow, there are three ASX 200 shares going ex-dividend. This means that today will be the last day to secure the latest dividends from these ASX 200 shares. Let’s check them out.

TPG Telecom Ltd (ASX: TPG)

TPG shares will be trading tomorrow without a fully franked interim dividend of 9 cents.

Investors who own TPG shares by the closing bell today can pencil in a payment date of 12 October.

The ASX 200 telco recently reported soft first-half results, impacted by restructuring and rising cost pressures.

TPG reported an adjusted net profit after tax (NPAT) of $331 million, up 4% from the prior year. According to a note from Goldman Sachs, TPG’s profits missed expectations by 15%.

Nonetheless, TPG lifted its interim dividend by 13% compared to the prior year.

TPG shares are currently printing a 12-month trailing dividend yield of 3.4%, which grosses up to 4.8% including franking credits.

News Corporation (ASX: NWS)

News Corp is another ASX 200 share going ex-dividend tomorrow.

The group recently declared an unfranked final dividend of 10 US cents. Like TPG, it will also be paid on 12 October.

The ASX 200 share delivered record results in FY22. Revenue climbed 11% to US$10.4 billion while net income nearly doubled to US$760 million.

This reflected improved performances across each of its segments, particularly news media and Dow Jones, along with the contributions from recent acquisitions. 

Despite the profit surge, News Corp left its dividend payments unchanged. The group has held its interim and final dividends steady at 10 US cents since FY16.

Based on current prices, this puts News Corp shares on a stable dividend yield of 1.2%.

Inghams Group Ltd (ASX: ING)

ASX 200 poultry business Ingham’s will also be going ex-dividend tomorrow, trading without a fully franked final dividend of 0.5 cents per share. Eligible shareholders will receive this payment on 5 October.

FY22 was littered with challenges for Ingham’s, including COVID disruptions, rising input costs, the war in Ukraine, and floods in parts of Australia.

Despite this, the company managed to grow its core poultry sales volume by 4% while revenue dropped just 2% to $2.7 billion.

However, the impact of the difficult trading environment was reflected below the revenue line, with rising costs of sales leading to a 44% fall in underlying NPAT.

Across the financial year, Ingham’s declared total dividends of 7 cents, down 58% from FY21. This equates to a dividend payout ratio of 62% of underlying NPAT, coming in at the lower end of the company’s target range of between 60% and 80%.

Whilst its dividend payments have fluctuated over the years, Ingham’s shares are currently dishing up a trailing dividend yield of 2.8%. With the benefit of franking credits, this yield grosses up to 4.0%.

The post 3 ASX 200 shares trading ex-dividend tomorrow appeared first on The Motley Fool Australia.

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More reading

• ‘Good value’: Expert names 2 ASX dividend shares to pounce on next dip
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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 recommended TPG Telecom 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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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.

It’s been a rough year so far for the stock market and the past few weeks have been especially shaky.

After a brief bear market rally, the S&P 500 has fallen more than 7% since mid-August. The tech-heavy Nasdaq is also down more than 10% in that time frame and many investors are concerned that this could be the beginning of a market crash.

There is a chance that stock prices could continue falling, and we may be headed toward a more significant downturn. But the good news is that it doesn’t necessarily matter whether the market crashes. Here’s why.

What history shows about market crashes

Nobody can predict exactly how the market will perform in the short term. Stock prices can be erratic, and even the experts can’t say for certain what will happen in the coming weeks or months.

What we do know, though, is that over the long term, the market is incredibly consistent. And if history shows us anything, it’s that there is good reason to be optimistic about the market’s future.

Since 1980 alone, the S&P 500 has fallen by at least 10% on 20 separate occasions. Some of those crashes were severe, too. During the Great Recession [2007-2008], for instance, the S&P 500 lost nearly 57% of its value at its lowest point. In the dot-com bubble burst in the early 2000s, it fell by close to 50%.

However, the S&P 500 has also earned returns of nearly 3,600% in that same time frame. Despite all this volatility, the stock market has an incredible track record of recovering from even the worst crashes.

^SPX data by YCharts

This isn’t to say that market crashes aren’t nerve-wracking. Nobody wants to see their portfolio plummet in value, and these downturns can be difficult to stomach even for the most experienced investors.

Over time, though, the market is much safer than it may seem. Even if a crash is looming, by sticking it out and staying invested, you can take advantage of those long-term gains.

The secret to making money in the stock market

While it can be intimidating, one of the best ways to maximize your earnings is to continue investing during downturns.

Again, stock market crashes aren’t easy. But they are one of the best opportunities to buy. Stock prices are significantly lower during a downturn, which means you can load up on solid investments at a fraction of the cost.

Then, when the market inevitably rebounds, you’ll reap the rewards. Case in point: Between 2009 and 2010 during the recovery phase of the Great Recession, the S&P 500 saw returns of close to 70%. If you had invested during the lowest point of that downturn, you likely would have seen substantial gains in a relatively short time.

It’s uncertain whether a market crash is looming, but the future isn’t as grim as it may seem. By continuing to invest and keeping a long-term outlook, it’s possible to make a lot of money in the stock market.

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

The post Will the stock market crash? It doesn’t matter as much as you might think appeared first on The Motley Fool Australia.

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 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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One of the most popular options for income investors on the Australian share market is the BHP Group Ltd (ASX: BHP) dividend.

And it isn’t hard to see why. The mining giant has been rewarding its shareholders handsomely with big dividend payments in recent years.

This continued in FY 2022, with BHP declaring a fully franked full year dividend of US$3.25 (A$4.75) per share. Based on the latest BHP share price of $39.18, this equates to a very generous 12% dividend yield.

In light of this, investors may be wondering what is next for the BHP dividend. Let’s take a look at what one broker is expecting from the Big Australian.

How big will the BHP dividend be in FY 2023?

According to a recent note out of Morgans, its analysts are expecting the company’s dividend to be trimmed a touch in FY 2023. The broker is currently forecasting a US$2.84 (A$4.15) per share fully franked dividend over the next 12 months.

However, this still equates to a double-digit yield of approximately 10.5% for investors, which is among the best you’ll find on the local share market.

In addition, the broker sees plenty of upside potential for the BHP share price. It currently has an add rating and $48.00 price target on the company’s shares.

The company also made another appearance on Morgans’ best ideas list for September. It commented:

We view BHP as relatively low risk given its superior diversification relative to its major global mining peers. The spread of BHP’s operations also supplies some defence against direct COVID-19 impact on earnings contributors. While there are more leveraged plays sensitive to a global recovery scenario, we see BHP as holding an attractive combination of upside sensitivity, balance sheet strength and resilient dividend profile.

The post How big will the BHP dividend be in 2023? appeared first on The Motley Fool Australia.

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