Today could be a big one for the Genex Power Ltd (ASX: GNX) share price after the company received a takeover bid worth more than $300 million.

The 23 cents per share bid for the company was posted by a consortium including Atlassian co-founder and co-CEO Scott Farquhar’s Skip Capital.

The Genex share price was 13.5 cents at its previous close.

Let’s take a closer look at the takeover proposal announced by the company this morning.

Genex share price on watch following takeover bid

The Genex share price could be about to take off after the company confirmed a previously-speculated takeover bid on Monday. Additionally, the company released its quarterly results today.

A consortium made up of the Skip Essential Infrastructure Fund and Stonepeak Partners has placed a 23 cent per share bid for Genex, representing a total valuation of more than $300 million and a 70% premium on the company’s previous close.

Skip Capital – headed by Farquhar’s wife, former Hastings Funds Management director Kim Jackson – snapped up a 19.99% interest in the renewable energy company’s stock last week.

Genex’s portfolio of renewable energy generation and storage projects is worth more than $1 billion.

Commenting on the bid, Jackson said, courtesy of The Australian:

Skip Essential Infrastructure Fund and Stonepeak bring the experience and insight required to allow Genex to play a substantially larger role in Australia’s energy transition.

The Genex board hasn’t promised it will engage with the takeover bid. It noted a potential acquisition would be subject to its recommendation, due diligence, and regulatory approvals. Notably, it would need the approval of the Foreign Investment Review Board.

And in other news likely to move the Genex share price today, the company achieved record revenue and its maiden full-year positive cash flow last financial year.

Its solar farms brought in $26.1 million of revenue (unaudited) over financial year 2022. Meanwhile, its net operating cash flow reached $4 million.

The post Genex share price in focus amid Atlassian co-founder’s $300m takeover bid appeared first on The Motley Fool Australia.

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• Here’s why ASX renewable shares slipped in June

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 Atlassian. 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 Breville Group Ltd (ASX: BRG) share price has risen by around 17% since 23 June 2022.

After that sizeable rise in the company’s shares, investors may be wondering whether the business is still worth pursuing.

Sometimes a share price can move quickly, making it more (or less) attractive to brokers.

Let’s have a look at some of the latest broker ratings.

Expert opinion on the Breville share price

There are many brokers that currently believe Breville is a buy.

Indeed, UBS thinks it is a buy with a reduced price target of $25. It acknowledges the outlook is looking less promising but it’s still expecting a small amount of revenue growth in FY23, with a return to better growth in FY24 and a good longer-term outlook.

Morgans also rates the company as a buy with a price target of $25. It also noted that inflation could cause problems on both the revenue and cost side for Breville, but a small amount of growth is still expected in FY23.

Similarly, Morgan Stanley also rates the ASX share a buy with a price target of $25. The broker said the decline in the Breville share price makes it seem attractive, partly because of its global growth potential. It also said the customers that Breville sells to could be less hard hit by inflationary pressure.

Macquarie is yet another broker with a positive rating on the business, though the price target is a little lower at $23.35. Still, that implies a potential upside of around 15%. The broker thinks that Breville can deliver attractive growth over the longer term.

In a recent presentation to investors, Breville noted that it has a “long way to go” and is presented with a “large, untapped opportunity”.

Most recent result

For the first six months of FY22, Breville said that revenue was up 23.6% to $878.7 million and net profit after tax (NPAT) increased by 25.1% to $77.7 million. Its dividend was boosted to 15 cents per share, an increase of 15.4%.

It said that there was strong demand across all regions and categories underpinning revenue growth, despite ongoing logistical challenges. Margins were “well managed” with price rises and restrained promotional spending.

Further, the company committed to continue investing in research and development, marketing, and technology to support growth in FY23 and beyond.

In FY22, it’s expecting to generate earnings before interest and tax (EBIT) of approximately $156 million.

The company also recently completed the acquisition of LELIT, an Italian business that designs, manufactures, and sells premium ‘prosumer’ home coffee equipment in Europe and throughout the world. This deal was for a total cost of $140 million.

Breville share price snapshot

Since the beginning of 2022, the Breville share price has dropped by 37%.

The post The Breville share price has surged 17% in around a month. Is it too late to buy? appeared first on The Motley Fool Australia.

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

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Northern Star Resources Ltd (ASX: NST) is one of Australia’s largest gold mining shares. But does it offer one of the biggest dividend yields?

Resource businesses can pay attractive dividends to investors if they pay an attractively-high dividend payout ratio. In other words, do they pay out a large amount of net profit after tax (NPAT) as a dividend?

Dividends can also flow when the relevant resource price rises because it essentially costs the same to dig up a resource out of the ground, whether that commodity price is US$10 higher or lower. Therefore, higher commodity prices can largely turn into profit.

Let’s look at the potential Northern Star dividend yield, on current predictions.

Dividend expectations

Looking at the dividend estimates on CMC Markets, Norther Star is expected to pay an annual dividend per share of 22.5 cents in FY22.

Following that, CMC Markets estimates suggest a dividend increase to 25.4 cents per share in FY23.

Finally, in FY24, Northern Star is projected to pay an annual dividend per share of 28 cents.

Furthermore, the ASX gold mining share attaches franking credits to its dividends.

Let’s look at each of the expected yields.

In FY22, Northern Star could pay a grossed-up dividend yield of 4.5%.

This could grow to a grossed-up dividend yield of 5.1% in FY23.

By FY24, the Northern Star grossed-up dividend yield could rise to 5.6%.

What this says is that the business is expected to pay a starting yield of more than 4% and keep growing the dividend from there.

Is the Northern Star share price worth buying?

There is more to a potential investment or asset than just how much income it could produce in the shorter term.

Investors should also consider earnings growth and other compelling factors.

Let’s look at whether experts believe the gold mining ASX share is an opportunity to buy right now or not.

Credit Suisse rates the business as buy, with a target price of $9.50.

Citi rates Northern Star as a buy, with a price target of $10.80.

Macquarie rates the ASX gold mining share as a buy, with a price target of $10.

The broker Ord Minnett rates Northern Star as a buy, with a price target of $11.10.

Morgans rates the business as a buy, with a price target of $8.50.

So, there are plenty of brokers positive on the miner, at the moment.

The post What’s the dividend yield on Northern Star shares in July? appeared first on The Motley Fool Australia.

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• Why is the Northern Star share price trading at near 4-year lows?
• 5 things to watch on the ASX 200 on Monday

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Are you looking for dividend shares to add to your income portfolio? Then the two listed below could be top options.

Here’s why analysts rate these dividend shares highly:

Charter Hall Social Infrastructure REIT (ASX: CQE)

The first ASX dividend share for income investors to look at is the Charter Hall Social Infrastructure REIT.

This real estate investment trust is focused on investing in social infrastructure properties. This includes a growing number of childcare centres, government sites, and healthcare buildings. The latter includes healthcare property owned by Healius Ltd (ASX: HLS) that was acquired in FY 20222.

Goldman Sachs is a big fan of the company and has a conviction buy rating and $4.24 price target on its shares.

In respect to dividends, the broker is expecting a 17.2 cents per share dividend in FY 2022 and a 18.3 cents per share dividend in FY 2023. Based on the current Charter Hall Social Infrastructure REIT share price of $3.67, this implies a dividend yield of 4.7% and 5%, respectively, for investors.

DEXUS Property Group (ASX: DXS)

Another ASX dividend share to look at is Dexus. It is an Australian real estate company focused on office, industrial and retail properties.

LIke the Charter Hall Social Infrastructure REIT, it also continued to add to its high quality portfolio in FY 2022 with the acquisition of the Collimate RE and domestic infrastructure business from AMP Limited (ASX: AMP) and some industrial assets. The latter includes Jandakot Airport in Perth and a logistics centre leased to Australia Post. This appears to have left Dexus well-placed for growth in the coming years.

Ord Minnett is bullish and recently upgraded the company’s shares to a buy rating with a $11.50 price target.

As for dividends, the broker is forecasting dividends per share of 53 cents in FY 2022 and 55 cents in FY 2023. Based on the latest Dexus share price of $9.34, this will mean yields of 5.7% and 5.9%, respectively.

The post Analysts rate these ASX dividend shares as buys now appeared first on The Motley Fool Australia.

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

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The A2 Milk Company Ltd (ASX: A2M) share price has gone up by around 10% since 22 June 2022. That compares favourably to the S&P/ASX 200 Index (ASX: XJO), which has risen by just over 4%.

That’s quite a bit of outperformance over a short period.

A2 Milk is a large dairy business that sells infant formula, protein-free milk, and other milk products.

Let’s have a look at what may be affecting things, aside from just the wider market climbing.

Strong demand

One of A2 Milk’s main competitors, Bubs Australia Ltd (ASX: BUB), recently reported that it’s experiencing a lot of growth, which may (or may not) be a positive indicator for A2 Milk.

For the three months to 30 June 2022, Bubs revealed that gross revenue had increased by 278% to $48.1 million. Half-year gross revenue of $65.7 million was up by 71% half on half.

It also reported it had seen sustained growth momentum across all key product segments (including its A2 product) and all key markets (including Australia, China and the United States).

While some of this growth came about from Bubs’ activities in the US, it also reported promising signs in Australia and China.

Australian domestic retail sales revenue of infant formula saw growth of 31% year on year.

Bubs’ Chinese sales were up 523%, largely due to corporate daigou sales. However, cross-border e-commerce sales were up 20%.

A2 Milk expecting to report growth in the second half

When A2 Milk announced its FY22 half-year result, the company said that the revenue growth outlook for the business in FY22 had improved.

However, it also said the expected improvement in revenue is not likely to translate into higher earnings in FY22 as it increases its investment to drive growth.

Even so, revenue in the second half of FY22 is still expected to be “significanly higher” than the second half of FY21, with anticipated growth compared to the first half of FY22 and FY22 being ahead of initial expectations mainly because of growth in infant formula sales.

However, it did warn that COVID-19 impacts on the supply chain have increased and are/were a key risk in the second half.

Is the A2 Milk share price a buy?

Some recent broker opinions are neither optimistic nor pessimistic.

For example, the broker Credit Suisse has a price target of $5.15 on the business, with a neutral rating. That implies a possible rise of more than 10%. The company notes recent sales strength in China.

Citi is also neutral on the business, with a price target of $4.64. So, the broker isn’t expecting much movement from here over the medium-term.

The post The A2 Milk share price has bubbled 10% higher in a month. What’s going on? appeared first on The Motley Fool Australia.

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Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 recommended A2 Milk and BUBS AUST 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 St Barbara Ltd (ASX: SBM) share price has accelerated in July while its peers are falling by the wayside.

After hitting a multi-year low of 75 cents on 30 June, the gold miner’s shares are up 20% this month. This makes it one of the best performers across the sector.

In comparison, the Newcrest Mining Ltd (ASX: NCM) share price is down 8% while Northern Star Resources Ltd (ASX: NST) is up 4% over the same period.

Let’s take a look at what’s driving St Barbara shares higher lately.

What’s driving the St Barbara share price higher?

As reported by my Foolish colleague Monica, St Barbara appears to be in discussions with Genesis Mining regarding a merger.

The news has prompted investors to jump on board and take advantage of the recent St Barbara share price weakness.

Genesis Mining is apparently seeking to consolidate operations in the Leonora Province in Western Australia. Ultimately, this would give it access to the flagship Gwalia gold mine which accounts for a large slice of St Barbara’s profits.

In addition, it’s rumoured St Barbara might sell its overseas assets which would boost its coffers by up to $100 million. Another Foolish colleague Brooke noted the reasons here.

If the deal does go ahead, St Barbara shareholders could be set for a big payday.

Furthermore, St Barbara released its FY22 production update earlier this month.

This sent its shares almost 10% higher on the day as the gold miner finished the fourth quarter strongly.

Total gold production stood at around 86.4koz for the June quarter, up 40% over the previous comparable period. Full-year gold production came to 281koz.

What do the brokers think?

A number of brokers have rated the St Barbara share price with different price points in the past month.

The team at Macquarie upgraded its outlook on the company’s shares to “outperform” from “neutral”. The broker also raised its 12-month price target by 10% to $1.10 per share.

Based on the current share price, this implies an upside of 23% for investors.

On the other hand, Citi analysts reduced their rating on St Barbara shares by 28% to $1.15. Despite the cut, its analysts believe that the company’s shares still have some room to bounce higher.

At Friday’s market close, the St Barbara share price finished at 89.5 cents.

The post Why has the St Barbara share price leapt 20% so far this month? appeared first on The Motley Fool Australia.

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• Why Pro Medicus, St Barbara, Vulcan, and Whitehaven Coal are pushing higher

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

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The CSL Limited (ASX: CSL) share price has risen by almost 10% in July. But can the ASX healthcare share keep rising?

Despite gaining around 15% since mid-June, it’s still down around 8% from its 52-week high in November.

During July, the S&P/ASX 200 Index (ASX: XJO) has gone up more than 3%. So, while the performance of just a few weeks is a very short-term timeframe in investing, CSL has beaten the index.

The healthcare giant claims to be the number one global player in protein therapies, a $37 billion industry. It also says it’s the number two in influenza vaccines, which is a $6 billion industry. CSL generates revenue of more than $10 billion across more than 100 countries.

It has spent billions of dollars on research and development to create the next generation of treatments and vaccines.

Pathway back to growth

In a recent investor presentation, CSL noted that COVID-19 has been a tailwind for its vaccine business, but a headwind for its blood plasma business.

However, CSL outlined a number of areas where the business can get back to growing after the effects of COVID-19. As such, these factors could be useful for boosting the CSL share price over time.

The ASX healthcare share said that its plasma collections are improving and are now around pre-COVID levels.

To date, product demand has been limited by supply, but this is expected to improve.

CSL’s gross profit margin is expected to return to pre-COVID levels over time. Improved efficiencies will also help, while an improvement in plasma volume will reduce the fixed cost per unit.

The company also said that a digital transformation is underway. Plasma donation pre-screening can be done through an app and people will know the value of their next donation.

CSL also outlined changes that will improve flow for donors and efficiencies in the future. Namely, all testing will be done bedside and a continuous nomogram, or graphic calculation, will increase the yield per donor while also improving donor safety. CSL pointed out that the total donation time will be reduced by more than 30%.

CSL is continuing to invest in capacity expansion. There is also a cluster of late-stage research and development (R&D) programs.

Finally, its Vifor Pharma acquisition could also be a boost for the business.

Reasoning behind the acquisition

CSL is buying Vifor Pharma for US$11.7 billion. Vifor was described as a world leader in the discovery, development, manufacturing, and marketing of pharmaceutical products for the treatment of kidney disease and iron deficiency.

CSL management said this acquisition would add a durable and growing business to its portfolio, across complementary and adjacent franchises. It builds a significant renal franchise, while CSL’s global reach, R&D, capabilities, and financial scale will help global expansion, according to the company.

The acquisition is also expected to enhance CSL’s scale and free cash flow. Cash flow is one of the main ways that investors can evaluate a business.

Can the CSL share price keep rising?

A price target is where a broker thinks the share price will be in 12 months from the time of the opinion.

Morgan Stanley has a price target of $312 on CSL with an ‘overweight’ rating — a positive rating.

Macquarie has an ‘outperform’ rating on the company, with a CSL share price target of $312.

Citi is one of the most optimistic, with a price target of $330 and a ‘buy’ rating. That implies a possible share price rise of more than 10%.

The post Up 10% so far in July, is the CSL share price heading back above $300? appeared first on The Motley Fool Australia.

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Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 CSL Ltd. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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ASX shares involved in infrastructure are back in vogue due to the current macroeconomic and geopolitical climate.

That’s according to ClearBridge Investments portfolio manager Charles Hamieh, who said investors are turning to such stocks to counter rapid interest rate rises and rampant inflation.

“This is because infrastructure returns are driven by investment plans in essential services, which span 10 or more years into the future, accelerate over time, and provide considerable predictability compared to more volatile equities,” he said.

“The relative predictability of infrastructure returns is delivered by regulated and contracted assets, which are our focus as we build infrastructure portfolios.”

Two attractive features of infrastructure shares

Hamieh reckons infrastructure offers a couple of advantages that are well-suited to the current global environment.

“First, infrastructure works as an inflation hedge,” he said.

“Infrastructure’s pricing power comes from the essential nature of its assets: even at times of economic weakness, consumers continue to use water, electricity and gas; drive cars on toll roads, and use other essential infrastructure services.”

Even better is that infrastructure providers often have long-term contracts with their clients.

The second attractive feature is the role infrastructure plays in the global decarbonisation trend.

“Infrastructure and utilities are at the forefront of this effort and can offer investors a stable return on equity without taking technology risk,” said Hamieh.

“Annual power sector capital spending is expected to increase from US$760 billion in 2019 to US$2.5 trillion (in 2019 dollars) by 2030, with approximately half spent on solar, wind and other renewable energy generation and a third on modernising and extending electricity networks.”

As well as electrical infrastructure, there is infrastructure involved with electric vehicles, public transport, hydrogen and carbon capture.

“So there are several areas of infrastructure benefiting from decarbonisation tailwinds, not to mention other secular trends like 5G driving investment in communication towers.”

Three ASX shares going gangbusters

In its quarterly report, ClearBridge named three infrastructure ASX shares it holds that have performed well in recent months.

Atlas Arteria Group (ASX: ALX) is a toll road operator that has 75% of its business in France.

“Atlas Arteria has an experienced management team with a long track record in toll road and infrastructure investment, making them well placed to further optimise the Atlas Arteria portfolio,” read the report.

ClearBridge analysts have especially high hopes for the APRR concession in eastern France.

“We expect APRR to continue to negotiate network enhancements resulting in concession extensions or toll increases.”

Atlas shares performed well after pension fund IFM Investors snapped up 15% of the stocks last month.

There is a possibility that IFM will want to take over the entire company, the ClearBridge report read.

Gas and energy operator APA Group (ASX: APA) also contributed significantly to ClearBridge last quarter.

“Most of APA’s assets consist of gas transmission pipelines that are regulated or have long-term contracts,” read the report.

“Average contract tenor at APA is in excess of 12 years.”

According to the analysts, APA generates “attractive” return on investments from its contracted gas assets, above the cost of capital.

“Following a period of heavy investment (organic and acquisition-based), APA is generating high levels of operating cash flow and returning strong dividend growth to investors.”

ClearBridge also holds Transurban Group (ASX: TCL), which dominates toll road ownership in Sydney and Melbourne.

“Transurban is an attractive company due to its increasing free cash flow profile driven by traffic growth, toll increases linked to CPI and strong cost control resulting in their ability to increase dividends,” read the report.

“Transurban has a high-quality management team and actively manages assets through its owner/operator model to extract cost savings and synergies, which maximises margins and returns on capital.”

The company has contracts that allow for price increases at or above inflation.

“As the dominant toll road owner in the regions it operates, Transurban has significant optionality in the network for future enhancement projects and a proven track record of working with government partners.”

ClearBridge analysts also like Transurban’s “attractive yield with growth potential”.

The post 3 ASX shares for ‘predictability’ through tough times: expert 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 positions in and has recommended APA 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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The Bank of Queensland Limited (ASX: BOQ) share price is in focus as Australia and New Zealand Banking Group Ltd (ASX: ANZ) seeks to buy the banking division of Suncorp Group Ltd (ASX: SUN).

BOQ may be best known as the regional bank based in Queensland. But it recently bought ME Bank which decreased its focus on Queensland and increased its exposure to other states like Western Australia, Victoria, and so on.

Now ANZ is making a similar move. By buying Suncorp’s banking operations for $4.9 billion, ANZ would increase its market share in Queensland.

Why is Queensland attractive?

The ANZ CEO Shayne Elliott explained why the big four ASX bank wants to increase its exposure to the sunshine state:

ANZ is committed to making a meaningful contribution to the economic and social prosperity of Queensland and today’s announcement will see ANZ increase its presence, and we believe improve competition, in one of Australia’s most important regions.

Since March 2020, Queensland has recorded better economic growth, better workforce participation and more interstate migration than any other state or territory in Australia. It contributes 18% to Australia’s GDP and we believe we can use the resources at our disposal to further contribute to its continued success.

What will this mean for ANZ’s business?

The bank believes that, as the smallest of the major banks, a stronger ANZ will be able to “compete more effectively” in Queensland. It thinks this would offer better outcomes for customers.

Based on the FY22 net profit after tax (NPAT) of approximately $355 million from Suncorp’s banking operations, ANZ is buying it at a price/earnings (p/e) ratio of 13.8 times.

It’s partly funding this deal through a fully underwritten pro rata accelerated renounceable entitlement offer to raise $3.5 billion. In other words, it’s launching a capital raising.

ANZ said, for Suncorp team members, it will be business as usual with no net job losses for Suncorp bank for at least three months after completing the deal. There will also be no changes to the total number of Suncorp Bank branches in Queensland for at least three years after completion.

The Suncorp banking operations come with $47 billion of home loans, $45 billion in “high-quality” deposits, and $11 billion in commercial loans.

How will this impact BOQ shares?

Bank of Queensland is obviously a smaller bank than ANZ, so the sound of a stronger competitor may not be helpful for the bank.

Yet, on the other hand, it reduces the amount of competition for BOQ.

Competition has been one of the main factors driving down margins in recent times for banks.

In its FY22 half-year result, BOQ said that its net interest margin (NIM) was 1.74% for the half, representing a decline of 12 basis points in that period. This included seven basis points of an underlying decline primarily due to “industry dynamics including ongoing competition”.

Faster loan growth from here for ANZ (and the Suncorp banking operations) could come at the expense of growth for another bank. After all, a person or business has to pick which bank to get their loan from.

In the last result, BOQ reported housing loan growth momentum, with $2.6 billion of growth in the half across all brands. BOQ and Virgin Money Australia saw growth of 1.8 times the system, while ME Bank returned to growth at 0.3 times the system.

Is the BOQ share price a buy?

The broker Morgan Stanley rates BOQ as a buy, with a price target of $8.10. That implies a possible rise of around 10%.

The post What might the ANZ deal mean for Bank of Queensland shareholders? appeared first on The Motley Fool Australia.

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More reading

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• Why did the ANZ share price smash the other ASX 200 banks today?
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• ASX 200 midday update: ANZ’s capital raising, Link jumps, Zip’s Q4 update
• ANZ share price edges lower after capital raising

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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The current Brickworks Limited (ASX: BKW) share price looks like a leading buying opportunity in my opinion.

I don’t own any Brickworks shares in my portfolio at present, but I already have sizeable indirect exposure through my holding of Washington H. Soul Pattinson and Co Ltd (ASX: SOL) shares.

In my opinion, after the recent Brickworks update, I think it looks very attractive as a long-term pick. As long as the Brickworks share price doesn’t shoot higher over the next few days, it’s likely I could buy shares when Fool’s trading rules allow me to.

There are a number of different reasons why I like the business, which I’ll outline below:

Dividends

Businesses that are able to keep sustainably growing their dividends are appealing to me. Brickworks’ normal dividend has been increased or maintained every year since 1976. In other words, it has been 46 years since the normal dividend was last decreased.

Dividends aren’t everything, but I like the cash rewards that shareholders can receive from the company every few months.

Soul Pattinson investment

Brickworks has a 26.1% holding of the investment business Soul Pattinson. According to the ASX, Soul Pattinson has a market capitalisation of $9 billion. Brickworks has a market capitalisation of $3.05 billion, according to the ASX.

The diversified investment has “delivered strong returns over many years” for Brickworks.

Soul Pattinson has a portfolio across a number of sectors including telecommunications, resources, agriculture, building products, financial services, and healthcare.

This investment can provide a level of consistent earnings and growing dividends for Brickworks, while its building products divisions’ performance can be variable. The Soul Pattinson shares can smooth out Brickworks’ profit year to year.

Industrial property trust

I think this is a key part of the picture for the Brickworks share price.

This trust is owned in partnership with Goodman Group (ASX: GMG). These properties are “prime” industrial or logistics buildings which are tenanted by third party customers. The estates are across Sydney and Brisbane.

Development land already held within the trust will provide “significant” further growth for both the capital value and rental profit.

Brickworks’ net asset value of this industrial trust is estimated (by the company) at $1.5 billion at 31 July 2022. This could grow over the next few years as more properties are completed.

The growing rental profit from this trust can help fund higher dividends for investors in the coming years.

Manufacturing trust

Brickworks has launched its manufacturing trust. The business is retaining 50.1% and Goodman will own the other 49.9%.

Initially, this trust will have 15 sites with a gross asset value of $416 million. Brickworks will get net cash proceeds of $193 million, which will be used to reduce debt.

With this sale, Brickworks has been able to ‘realise’ value after a strong run-up in industrial real estate prices.

The initial net rent is $17.75 million, with annual increases of 2.5% for most properties.

Brickworks said there are some opportunities to develop sites to improve utilisation, with development opportunities in the medium-term. Some of the sites have potential for industrial development in the long-term.

Additional building product land may be sold into the trust in future years.

Future new plant developments may be funded within the manufacturing trust structure.

Extra land

Brickworks building products division retains 100% ownership of around 5,300 hectares of operational and surplus land across Australia and North America. Brickworks said that “some of these assets have significant valuation upside if/when developed”.

Land holdings include operational brick sites, quarries, clay lands, sales centres, and surplus land.

Based on independent market valuations, there are four particular owned sites that Brickworks listed that have a combined current “as is” value of $0.8 billion and a rezoned value of $1.3 billion, according to Brickworks.

Brickworks share price snapshot

Over the last month, the Brickworks share price has risen by around 10%.

The post Why I think the Brickworks share price is a great buy right now appeared first on The Motley Fool Australia.

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More reading

• Why Brickworks, Ioneer, Telix, and Zip shares are charging higher
• ASX 200 midday update: Brickworks higher, IAG drops on prelim results, Zip rockets
• Brickworks share price higher on record earnings, Goodman deal
• Why has the Brickworks share price leapt 10% in a month?
• Why cheap hamburgers could give beginner ASX share investors food for thought

Motley Fool contributor Tristan Harrison has positions in Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company 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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