Woodside Energy Group Ltd (ASX: WDS) shares seem like a better pick compared to Santos Ltd (ASX: STO) in my opinion.

Both are ASX oil and gas share giants.

Woodside has a market capitalisation of $61.7 billion according to the ASX. Santos has a market capitalisation of $23.8 billion.

I’m not picking Woodside because of its size, but scale does come with some economic advantages that can help with profit margins. That was one of the reasons for the merger with the oil and gas division of BHP Group Ltd (ASX: BHP).

While I’m not the world’s biggest fan of oil and gas businesses, I think Woodside shares can make the better pick because of these two factors:

Dividends

Woodside has typically paid investors a solid dividend, but thanks to the help of higher energy prices, Woodside is expected to pay a large dividend in the next couple of financial years.

First, let’s look at the expected dividends from Santos.

According to CMC Markets, Santos is expected to pay an annual dividend of 37.7 cents per share in 2022 and 40.5 cents per share in 2023. Using those projections (and a franking rate of 70% as per the last dividend paid by Santos), Santos is estimated to pay a grossed-up dividend yield of 6.8% for FY22 and 7.3% in FY23.

Let’s compare that to Woodside. The CMC Markets estimate for the 2022 dividend is $3.60 per share and $2.72 for 2023. That translates into a grossed-up dividend yield of 15.8% in FY22 and 12% in FY23 at the current Woodside share price.

While dividends aren’t everything, I think the bigger dividend yield from Woodside can help provide stronger returns.

$5 billion investment target

Woodside has a plan to invest billions in green energy. I think this is an important part of the company’s plan to future-proof itself.

There’s H2Perth, which has a flexible design for hydrogen or ammonia. The initial phase is targeting around 110,000 tonnes per annum of hydrogen production, including a 250MW electrolysis component. It has a future capacity of up to 550,000 tonnes per annum of hydrogen for export.

H2TAS is targeting 200,000 tonnes per annum of ammonia and a 300MW electrolysis. It has completed studies with potential customers for ammonia export to Japan.

H2OK is targeting around 33,000 tonnes per annum of liquid hydrogen including a 290MW electrolysis component.

Heliogen is another project, which is described as “breakthrough solar technology”. The initial phase is targeting 5MW. It’s a concentrated solar energy system with a power supply that could work nearly all day and all night. It’s targeting construction to begin in 2022. It’s working towards a joint marketing arrangement for technology in the US and Australia.

It’s also working on a large-scale solar farm with an initial phase targeting up to 100MW capacity. This will deliver electricity through the North West Interconnected System in WA. The maximum capacity will be up to 500MW.

Foolish takeaway

Woodside shares are paying investors more in the short-term and the company is starting to invest in green energy for the long-term as well. While I wouldn’t call it a great buy today, I think it could be a better long-term pick than Santos.

The post 2 reasons why I’d pick Woodside shares over Santos appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Thursday
• 5 things to watch on the ASX 200 on Wednesday
• Why is the Santos share price lagging the ASX 200 on Tuesday?
• Why Appen, Credit Corp, Fortescue, and Santos shares are dropping
• Looking to buy Woodside shares? Here’s why the energy giant faces a fresh legal battle from climate activists

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 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) will hold its annual shareholder meeting Thursday, when investors will find out if the company’s proposed 3-for-1 stock split has been approved. Anticipation of that had Tesla shares trading 2.2% higher as of 2 p.m. ET Wednesday. 

So what

Wednesday’s gains came despite escalating tensions between the U.S. and China that potentially could directly impact the businesses of U.S. electric vehicle (EV) manufacturers. But investors seemed more focused on Tesla’s annual meeting, which will be the final chance for shareholders to vote on the proposed stock split. 

Now what

The company has offered two main reasons to support the stock split.

“We believe the stock split would help reset the market price of our common stock so that our employees will have more flexibility in managing their equity,” management said. “…[T]he stock split will also make our common stock more accessible to our retail shareholders.”

Tesla last split its shares in a 5-for-1 transaction in August 2020. The stock is up about 80% since that time. While stock splits don’t change anything about a business or its valuation, a lower per share price can make a stock more accessible for some retail investors and options traders. 

Shareholders also hope the meeting will provide more details on how the company plans to meet its battery needs as it continues to rapidly increase production volumes. Tensions between the U.S. and China have been on the increase with U.S. House Speaker Nancy Pelosi visiting Taiwan this week. Chinese EV battery maker CATL was rumored to be postponing its plans to expand its manufacturing to North America. But Reuters subsequently reported that the world’s largest battery maker will move forward with those plans.

Given that it has a major manufacturing facility in Shanghai, Tesla would benefit from stability between the two countries. Both China and the U.S. want to expand the use of electric vehicles, and investors seem to be seeing good news on that front, beyond their optimism about the upcoming stock split vote.

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

The post Why Tesla shares bounced ahead of its stock-split vote appeared first on The Motley Fool Australia.

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More reading

• Why the Tesla share price jumped on Monday
• Tesla Q2 earnings call: 3 must-see quotes from Elon Musk
• Tesla beats earnings estimates and sells Bitcoin — Is the stock a buy?
• Why is the Vulcan Energy share price leaping 7% on Thursday?
• Tesla sells 75% of Bitcoin holdings. Here’s why Elon Musk is unloading

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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The AMP Ltd (ASX: AMP) share price has pushed its way over the past month of trade as financial shares retain their position as one of the best performing sectors in H1 FY23.

The S&P/ASX 200 Financials (ASX: XFJ) index has ticked more than 9% higher in the past month of trade, ahead of the benchmark S&P/ASX 200 Index (ASX: XJO)’s return of around 6% in the same time.

Can the AMP share price keep up the pace?

After a string of capital budgeting moves that saw AMP sell off underperforming business segments, AMP has reshuffled its operations.

Consequently, AMP is now focused on growing its numbers and in the 2022 first quarter, it reported a total loan book increase of $500 million to $22.6 billion.

In addition, Inflows from external financial advisers increased by more than 50% to 342 million, prompting CEO Alexis George to remark on the company’s “strong and sustainable future”.

The other fact to consider is the effect of rising policy rates on the ASX financial shares bucket.

Rising interest rates are typically a net positive for companies within the financial services sector, seeing as a portion of income is tied to net interest income (NII). An industry benchmark is also the net interest margin (NIM) to compare between companies.

In other words, with the increase in interest rates comes the prospects of increasing NII and lifting NIMs to potentially increase profits. That’s the thinking anyway.

As seen in the chart below, along with a surge in the Australian cash rate and the yields on the Australian Government 10-year note, the AMP share price has pushed its way north as well.

The question now becomes if AMP can sustain the pace of growth on the chart.

Brokers are positioned such to say this might be a challenge. According to Refinitiv Eikon data, there is just 1 buy call on the share, with the remaining coverage split evenly between sell and hold.

The consensus price target from this list is $1.06 per share, suggesting the AMP share price could pull back to this level if the brokers are correct.

The post Up 13% in July, can the AMP share price maintain its momentum? appeared first on The Motley Fool Australia.

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More reading

• Here’s the good news about bear markets
• The AMP share price has surged 9% so far this month. Can it keep going?
• ‘Ready to compete’: Will AMP seek out new opportunities or stick to its knitting?
• Own AMP shares? CEO touts its ‘digital bank’ status in competitive landscape
• ‘CBA and Westpac are too big’: One fund manager’s take on the future of ASX 200 bank shares

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 metaverse is a term that’s marched into the zeitgeist the last couple of years, helped by Facebook boss Mark Zuckerberg’s constant references to it.

The term describes what used to be referred to as ‘virtual reality’. The metaverse concept elevates that old idea to a broader base that, in the future, might represent the entire internet as a massive unified virtual world.

Zuckerberg is so sure the world is destined for the metaverse that in October last year he renamed Facebook Meta Platforms Inc (NASDAQ: META).

“The metaverse is the next frontier in connecting people, just like social networking was when we got started,” he wrote in a letter at the time.

“Our hope is that within the next decade, the metaverse will reach a billion people, host hundreds of billions of dollars of digital commerce, and support jobs for millions of creators and developers.”

So how can investors buy ASX shares for exposure to this trend?

A new ETF to take advantage of the theme

The answer to this question became a whole lot easier this week as BetaShares launched a new exchange-traded fund (ETF) that represents a global basket of Metaverse stocks.

The BetaShares Metaverse ETF (ASX: MTAV) will start trading on the ASX on Thursday.

BetaShares chief executive Alex Vynokur said the metaverse is “a powerful megatrend” forecast to “shake up” how the world communicates.

“This secular trend is expected to revolutionise the way we engage with sport, live music and other ways of staying connected.”

He added that the industry is still “in the early stages of evolution”.

“We are proud to provide investors with access to this investment opportunity,” he said. 

“This innovative new fund will form part of our leading suite of thematic funds that offer investors exposure to the megatrends that are changing the world around us.”

Which stocks will be in the MTAV ETF?

The BetaShares Metaverse ETF will track the Bloomberg Metaverse Select Index, which currently contains 32 stocks from around the world.

The contributing companies are from a variety of industries — not just software. Examples include NVIDIA Corporation (NASDAQ: NVDA), Roblox Corp (NYSE: RBLX), and Apple Inc (NASDAQ: AAPL).

BetaShares stated the fund exposes investors to “both large, profitable technology and entertainment companies, as well as more specialised companies”.

The fund is the “the first exchange traded fund of its kind in Australia”, it added.

The ETF will charge investors 0.69% per year of its net asset value.

The post How to buy ASX shares exposed to the metaverse appeared first on The Motley Fool Australia.

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More reading

• What Warren Buffett can teach you from his top 3 holdings
• 2 Nasdaq growth stocks that could turn $100,000 into $1 Million by 2030
• Why are ASX 200 tech shares having such a lousy start to the week?
• What’s in store for the BetaShares NASDAQ 100 ETF in the next 12 months?
• Why Apple stock is down 17% so far this year

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Motley Fool contributor Tony Yoo has positions in Roblox Corporation. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple, Meta Platforms, Inc., Nvidia, and Roblox Corporation. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple, Meta Platforms, Inc., and Nvidia. 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 AGL Energy Limited (ASX: AGL) share price lifted slightly last month, but not enough to mirror the gains posted by the broader market.

The energy producer and retailer’s stock rose from $8.25 at the end of June to close July trading at $8.38, representing a 1.58% gain over the course of the month.

The S&P/ASX 200 Index (ASX: XJO), on the other hand, surged 5.74% while the S&P/ASX 200 Utilities Index (ASX: XUJ) rose 3.13% in that time.

So, why did the AGL share price lag the ASX 200 and its sector in July? Let’s take a look.

What drove the AGL share price last month?

The reason behind the AGL share price’s underperformance last month is tough to pinpoint. Particularly as the company has been notably quiet lately.

In fact, the last time the market heard price-sensitive news from AGL was on 30 June.

Then, the energy giant revealed its former suitor Brookfield Asset Management sneakily snapped up a 2.5% stake in the company’s shares.

Off the market, the company announced it will be investing $40 million over five years into the Clover hydro power station, part of the Kiewa Hydro Scheme, last month.

The money will go towards upgrading the station – a move that will see the scheme’s output increase by 14 megawatts, the equivalent of powering Victoria’s Alpine region.

Finally, a notable broker revealed its expecting big things from the AGL share price last month.

JP Morgan is said to be bullish on wholesale electricity prices and, as a result, it believes AGL could be a winner.

The broker slapped AGL’s shares with an overweight rating and a $10.60 price target, as my Fool colleague Bronwyn reports.

Morgans also has an add rating and a $9.67 price target on the stock.   

The post Why was the AGL share price undercooked in July? appeared first on The Motley Fool Australia.

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More reading

• ‘Massive untapped demand’: The $3 trillion opportunity ASX 200 energy shares could be missing
• Can the AGL dividend bounce back this earnings season?
• What’s been impacting the AGL share price this week?
• ‘Elevated prices’ give AGL share price a shot at 26% upside: JP Morgan
• These were the best (and worst) performing ASX 200 sectors of FY22

JPMorgan Chase 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 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 lifted in the last month, but could it go higher?

The major bank’s share price has jumped 12% in the past month. In Wednesday’s trade, NAB’s shares fell 0.58%.

Let’s examine the outlook for the NAB share price.

What is ahead?

The ASX bank share will report important financial results next week, but what are analysts predicting?

Morgan Stanley analyst Richard Wiles is forecasting a “sweet spot” for the bank with “robust volume growth, margins tracking ahead of consensus, strong credit quality and healthy capital”.

He is predicting an underlying cash profit of $1.8 billion with 5% revenue growth and 4% expense growth.

In comments cited by The Australian, he added:

Any commentary on the impact of higher rates and the margin outlook should be positive.

Sharing his thoughts on his outlook for the NAB share price in light of these forecast results, Wiles said:

The current share price reflects this and factors in a 15 per cent probability of recession in 2023, so we stay equal weight.

The Reserve Bank of Australia (RBA) boosted the official cash rate by 0.5% on Tuesday, as my Foolish colleague Bernd reported. Australia’s official cash rate is now 1.85%.

NAB is due to provide its third-quarter trading update on 9 August.

Share price snapshot

The NAB share price has lifted 17% in the past year and nearly 7% year to date.

For perspective, the S&P/ASX 200 Financials Index (ASX: XFJ) has descended more than 3% in the past year.

NAB has a market capitalisation of nearly $98 billion based on its current share price.

The post Is the NAB share price a buy ahead of next week’s quarterly update? appeared first on The Motley Fool Australia.

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More reading

• How are ASX 200 bank shares responding to the RBA rate increase?
• ‘The great reallocation’: The $4 trillion financing opportunity in front of NAB
• Experts say these ASX dividend shares are buys right now
• ‘Raises a whole lot of issues’: Which ASX 200 banks are still funding new fossil fuel projects?
• The NAB share price is up 20% from its YTD low. Is now the time to buy?

Motley Fool contributor Monica O’Shea 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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Growth shares have been hammered this year after investors turned their backs on them due to rising interest rates.

But for a decade before that, growth ruled over value stocks.

So what style of ASX shares are the best going forward from now?

Perhaps fittingly for unprecedented conditions like we’re seeing in 2022, Wilsons head of investment strategy David Cassidy has nominated a third way to go.

“Quality-focussed investment strategies arguably receive less attention than growth and value investing, yet the quality factor has an impressive long-term track record,” he said in a memo to clients.

“The outlook for quality is particularly attractive at the current juncture in the global business cycle.”

What is quality?

Cassidy expects the global economy and earnings growth to “slow significantly” over the next 12 months.

“As a result, companies with high quality, resilient earnings streams should be increasingly sought after by the market.”

But what exactly makes a stock or a company “quality”?

There is no universal definition of what a quality stock is, but Cassidy mentioned a few quantifiable attributes that most investors would find hard to argue against:

• High return on equity or return on invested capital
• Resilient earnings streams
• Strong balance sheets with modest level of debt

On top of this, he added, more active investors can consider these more subjective qualities:

• Management quality
• Industry positioning

Cassidy said a high quality business typically has a wide moat, which is a measure of competitive advantage.

“These competitive strengths can include: superior product or service quality, a strong brand, superior scalability, distribution strength, or proprietary technology.”

How does quality investing work in real life?

“Highly active” investors with a quality strategy will often exclude entire sectors. For example, mining and financials might be completely ignored due to the earnings volatility.

Quality shares often display a “risk asymmetry”, as Cassidy calls it.

“This risk asymmetry, with decent performance in rising markets but superior performance in falling or sluggish markets, that gives quality its outperformance trend over the long-term.”

He added that there is “a large body” of academic research that shows low volatility and high quality portfolios outperform their high volatility and low quality rivals. 

“This perhaps flies in the face of traditional portfolio theory, which holds that higher risk portfolios will generate higher returns in the long run.”

‘Free lunch’ for investors

So with so much going for it, Cassidy said buying up quality shares might be considered a “free lunch” for investors of ASX shares.

But the catch is that the outperformance only comes over a long duration.

In fact, quality has actually underperformed over the past two years.

“The growth stock rally entered a speculative phase last year with many high-growth (pre-earnings) stocks being bid up aggressively. More recently, a big first quarter commodity rally, led by energy in particular, saw quality indices lag again.”

But in 2022 high-growth stocks have definitely been humbled and commodity prices are starting to cool.

“Quality has begun to show signs of outperformance. With earnings slower and downgrades increasing, resilient high-quality companies look set to outperform in our view.”

The post ‘Free lunch’: Forget growth or value, Wilsons is hunting these ASX shares appeared first on The Motley Fool Australia.

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More reading

• Is the NAB share price a buy ahead of next week’s quarterly update?
• Looking to buy BHP shares? Here’s how the miner is gearing up to secure its share of booming EV demand
• Brokers name 2 top ASX dividend shares to buy
• Winner winner chicken dinner: Expert names 2 ASX shares to buy now
• Own A2 Milk shares? Here’s how the company is battling to rebuild lost daigou sales

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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The BHP Group Ltd (ASX: BHP) share price has historically been influenced by the price for iron ore. But another commodity could soon have an important role to play.

BHP may be best known as an iron ore miner, however, it has exposure to other commodities such as copper and nickel.

According to reporting by the Australian Financial Review, BHP Nickel West (owned by BHP) is going to spend more on exploration than it has in the past 15 years.

The reason for the ramp-up is the strong demand for electric vehicles. This could mean good things for nickel.

Untapped resource

The asset president of BHP Nickel West, Jessica Farrell, made some promising comments at the Diggers and Dealers mining conference this week.

Farrell said:

We have a large nickel sulphide resource with in excess of 7.4 million tonnes of nickel in the Agnew-Wiluna belt that still remains largely unexplored.

That’s exciting. We have budgeted a significant uplift in exploration spend over the next two years, which we expect will advance many of our targets. To underscore this point, this year will be the highest annual spend for exploration in Nickel West since BHP acquired the WMC assets in 2005, a testament to the focus and commitment BHP has to its nickel business right now.

According to reporting by the AFR, BHP has 120,000 hectares of tenements within the Agnew-Wiluna belt in WA. Farrell continued:

This is a highly prospective strip, approximately 150 kilometres long … and has a number of deposits that we are looking to understand further and potentially mine.

Our acquisition of the Honeymoon Well and Albion Downs tenements in 2020 continues to drive our growth plans and drilling to inform our mine studies.

Global outlook

Some of the major car companies like Tesla and Ford have reportedly signed agreements with some Australian miners, including BHP. The company has also signed agreements with Toyota.

The AFR reported that Russia supplies around a fifth of battery-grade nickel globally, with its supply disrupted due to the invasion of Ukraine.

Yet, the demand for nickel is expected to keep rising. This could be helpful for the BHP share price.

Farrell said:

Electrification of autos is gathering pace, and we expect that by 2030, around 60 per cent of all car sales will be electric. We expect that by 2040, 90% of car sales will be electric. The dominant battery chemistry powering this global fleet is expected to rely on nickel.

Latest nickel update

BHP said that in the three months to 30 June 2022, nickel production was up 1% to 18.8kt. There was higher volume due to reduced COVID-19 labour impacts.

The resources giant also said that the nickel price in FY22 was 43% higher than FY21.

Production in FY23 is expected to be between 80kt to 90kt, weighted to the second half of the year due to planned smelter maintenance in the first half.

BHP share price snapshot

Over the last month, the BHP share price has fallen around 3%.

The post Looking to buy BHP shares? Here’s how the miner is gearing up to secure its share of booming EV demand appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy today
• Broker names 3 of the best ASX shares to buy in August
• Is the iron ore price entering a bear market?
• Why did the BHP share price slump 6% in July when the ASX 200 leapt higher?
• Why is the Fortescue share price sliding on Tuesday?

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 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 for ASX dividend shares to buy, then the two listed below could be worth considering.

Here’s what you need to know about these dividend shares:

Accent Group Ltd (ASX: AX1)

The first ASX dividend share to look at is this footwear focused retailer.

Accent, which owns a growing collection of store brands such as Athlete’s Foot, HYPEDC, Platypus, Sneaker Lab, and Stylerunner, is having a tough time in FY 2022. This has led to its shares being hammered since the start of the year.

While this is disappointing, the team at Bell Potter appear to believe this could be a buying opportunity. They recently put a buy rating and $1.90 price target on the retailer’s shares. The broker commented:

We rate AX1 Buy with a PT of $1.90. AX1’s strategic focus has moved from acquisition and integration, to innovation in its core business and expansion through new concepts. AX1 has a leading omni-channel capability with TAF, Platypus, Skechers, Hype, The Trybe, Stylerunner and Glue Store as its key retail footwear or youth apparel platforms. Through a “high service & more tailored” market position, AX1 seeks to achieve greater differentiation vs peers as well as create perceived value across its retail platforms.

As for dividends, Bell Potter is forecasting fully franked dividends of 5.7 cents per share in FY 2022 and then 9 cents per share in FY 2023. Based on the current Accent share price of $1.33, this will mean yields of 4.3% and 6.8%, respectively.

QBE Insurance Group Ltd (ASX: QBE)

Another ASX dividend share that could be in the buy zone is QBE.

After a difficult period, this insurance giant’s outlook is starting to look very positive again, This is thanks to rising rates, premium increases, and its cost cutting plans.

Morgans is very positive on QBE and recently retained its add rating and $14.76 price target on the company’s shares. It commented:

With strong rate increases still flowing through QBE’s insurance book, and further cost-out benefits to come, we expect QBE’s earnings profile to improve strongly over the next few years. The stock also has a robust balance sheet and remains relatively inexpensive overall trading on ~9.1x FY23F PE.

In respect to dividends, the broker is forecasting 41.6 cents per share in FY 2022 and 66.6 cents per share in FY 2023. Based on the current QBE share price of $11.76, this will mean yields of 3.5% and 5.7%, respectively.

The post Brokers name 2 top ASX dividend shares to buy appeared first on The Motley Fool Australia.

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More reading

• Morgans names 3 more of the best ASX shares to buy in August
• I think these 2 ASX dividend shares are buys for income in August
• 2 quality ASX dividend shares rated as buys by brokers
• 5 ASX 300 shares this fundie has been buying at bargain prices
• Expert prediction: 3 ASX 200 shares that can ‘do well’ in volatile times

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Accent Group. 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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So interest rates have spiked up for the fourth consecutive month this week.

This means Australians will be locking up their wallets and cutting out any unnecessary spending.

In such times, investors understandably turn to ASX shares of companies that produce consumer staples.

And the very prototypes of necessities are food and drinks.

But Shaw and Partners portfolio manager James Gerrish warns that one can’t just blindly buy all consumer staple ASX shares and expect success.

You still need to look at the company’s performance and prospects.

Firstly, the stock to stay away from

Gerrish took United Malt Group Ltd (ASX: UMG) as an example.

“As an investor it’s easy to use the old throwaway line ‘people have to eat’ when considering some defensive positions within a portfolio,” he said in a Market Matters newsletter.

“But like all stocks a company needs to grow earnings to deliver results to shareholders.”

United Malt has been a bitter disappointment to shareholders in recent times.

“UMG has failed to deliver, resulting in its shares trading well below its panic COVID lows whilst the S&P/ASX 200 Index (ASX: XJO) has rallied ~60% over the same period.”

The malt maker put out an earnings upgrade on Monday that saw its share price plunge a painful 13% that morning.

“The company has struggled with poor quality/high-cost North American barley which is flowing down into higher production costs and falling margins — never a good combination,” said Gerrish.

“The business is optimistic about an improvement in H2. But hope doesn’t pay the bills!”

The Market Matters team would avoid United Malt shares like the plague.

So which are the consumer staple stocks that they would go for?

Chicken dinners for everyone

Shares for chicken producer Inghams Group Ltd (ASX: ING) haven’t performed that much better recently than United Malt.

The stock has plunged more than 20% year to date, and has lost 14.5% over the past five years.

But it’s a winner winner for Australians about to tighten their belts, according to Gerrish.

“Poultry business Inghams fell to fresh all-time lows in June courtesy of rising fuel and feed costs plus labour shortages have also weighed on the cost and scale of production,” he said.

“We like the company’s position into tougher economic times with chicken providing a cheaper protein alternative to say steak. Plus a forecasted yield in excess of 5% fully franked over the next 12-months is attractive in most interest rate environments.”

His team suggests accumulating Ingham shares on dips.

Some drinks to forget tough times

Gerrish went cold on winemaker Treasury Wine Estates Ltd (ASX: TWE) earlier this year, but his team is having second thoughts.

“In hindsight this move is starting to feel average to wrong especially as the alcohol industry usually enjoys tough economic times.”

Treasury Wine went through a difficult period in 2020 as Australia’s request for an investigation into the origins of COVID-19 triggered a diplomatic spat with China.

“China has been the thorn in the company’s side courtesy of heavy-handed tariffs out of Beijing but this has forced the company to reposition itself which we feel leaves it well-structured for the coming years.”

The share price remains well below its pre-pandemic high, but Gerrish feels this could attract some merger interest.

“The stock is not overly cheap but solid year-on-year growth looks achievable to justify an FY23 PE of 22x,” he said.

“We like Treasury Wine Estates plus it remains a potential takeover target although tight money markets may delay any action out of Europe.”

Gerrish’s team suggests buying into Treasury Wines at around the $12 mark. The stock closed Wednesday at $12.27.

The post Winner winner chicken dinner: Expert names 2 ASX 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
• Why Aussie Broadband, Temple & Webster, United Malt, and Zip shares are dropping
• United Malt share price plunges 13% on earnings downgrade
• Morgans name 3 of the best ASX shares to buy in August
• Top ASX shares to buy in August 2022

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 recommended Treasury Wine Estates Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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