Looking for new ASX shares to buy? If you are, then you may want to check out the two listed below that are highly rated by the team at Goldman Sachs.

In fact, its analysts rate them so highly that they have them on their conviction list. Here’s what you need to know:

Iluka Resources Limited (ASX: ILU)

Goldman Sachs is a big fan of this mineral sands and rare earths company and has named it as an ASX share to buy.

Last week the broker retained its conviction buy rating and lifted its price target to $14.40. This implies potential upside of over 40% for investors over the next 12 months.

Goldman likes Iluka due to its attractive valuation and “compelling Mineral Sands and Rare Earth growth potential.” It commented:

Trading at ~0.6x NAV (A$15.04/sh). We think the market is ascribing only some value to ILU’s Wimmera and Eneabba RE projects and the high grade zircon Balranald development project. We think ILU is undervalued (on just c.3.5x EBITDA NTM) vs. key rare earth (c.13x) and mineral sands/pigment (c.5x) industry peers.

Compelling Mineral Sands and Rare Earth growth potential: We are positive on ILU’s project pipeline and forecast >40% production growth in mineral sands volumes, c.18ktpa of Rare Earths (~3.5-4ktpa of high value NdPr).

Lifestyle Communities Limited (ASX: LIC)

Another ASX share that Goldman rates highly is retirement communities company Lifestyle Communities.

Last week Goldman Sachs retained its conviction buy rating with a slightly trimmed price target of $24.30. This implies potential upside of over 50% for investors over the next 12 months.

Its analysts believe the company is well-placed to benefit from Australia’s ageing population and structural growth in demand for land lease. The broker commented:

LIC is well-placed to provide supply to a growing cohort of over 50’s with limited savings outside the family home seeking to free up equity. In the near term, we see potential modest house price declines offset by LIC’s favourable pipeline and inventory position, coupled with a strong value proposition for incoming home-owners, with the cost of an LIC home currently sitting at c.65% of the median house price (vs. company feasibility of up to 80%), thus providing pricing support.

The post Goldman Sachs names 2 ASX shares as conviction buys appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX shares today
• Here are the top 10 ASX shares today
• Why Iluka, JB Hi-Fi, Megaport, and Zip shares are racing higher
• Iluka share price leaps 6% on increased mineral sands production
• Can the Lifestyle Communities share price recover in FY23?

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

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

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

If your portfolio is teetering amid a turbulent bear market — as pretty much everyone’s is at the moment — you need a plan to come out ahead, and you need to act on it.

Fruitful investments made today could have the benefit of a very long run-up once the bear market subsides, and mistakes made out of fear could have consequences for a long time, too. 

With those consequences in mind, let’s look at three quick steps you can take to make the best out of the market as it is right now. 

1. Build on your high-confidence positions

The first thing to do when the market gets rough is to use it as an opportunity to gobble up shares of companies in your portfolio you think will continue to appreciate in value for a long time, even if their stock price is falling in the short term.

Think about a business like Pfizer (NYSE: PFE), which has seen its shares fall by 11% so far this year despite widespread successes with hit products like Comirnaty, its coronavirus vaccine, and Paxlovid, its antiviral pill for COVID.

If you have a position in it and the recent drop scares you off from adding more, you’re missing out on a sale — assuming that you actually believe it’ll eventually recover. 

So, especially for an investment like Pfizer, which is steadily growing its sales and net income, it makes more sense to be buying shares than sitting on the sidelines. The real trick is to keep investing even when high-confidence picks get rocked.

And as long as your investing thesis is still as valid as when you started buying the shares, you’ll be getting the biggest discounts when things look like they’re crashing the hardest. Just be aware that you might need to wait a few years before your spending starts to pay off with outsized returns.

2. Set up a dividend reinvestment plan

Another great action to take to weather the bear market is to enable a dividend reinvestment plan (DRIP) for your dividend-paying stocks. Take the returns from AbbVie (NYSE: ABBV) over the last 10 years, for example:

ABBV data by YCharts

As the chart shows, the price returns from AbbVie shares are nowhere near the total return that’s possible by retaining and reinvesting each of its quarterly dividend payments. When you reinvest your dividends instead of accepting them in cash and spending them elsewhere, your position compounds in value much faster.

And when share prices dip during a bear market, the stock’s dividend yield increases accordingly, meaning that if you aren’t reinvesting your dividends at that moment, you’re missing out on securing some higher-yield shares for the remaining years of your long hold. 

Plus, biopharma companies like AbbVie often have significant cash flows that are enough to keep hiking their dividend even when there’s a bear market, recession, or other economic issues.

That means if you don’t set your shares to reinvest their dividends now, then by the time the bear market is over, you might have missed out on quite a bit of compounding at a very attractive rate. And it would be a shame to lose out on this bonus that’s there for the taking. 

3. Talk yourself out of panic selling (or buying)

Perhaps the most important step to take during a bear market or market crash is to take a deep breath and talk yourself out of selling your shares in a panic. (It’s also helpful to avoid frantically buying the dip on stocks you aren’t fully confident in but seem priced like a bargain.)

Selling your shares locks in whatever losses you’ve sustained, regardless of whether there is a valid business reason for the underlying company to experience additional headwinds. 

In the current market, it’s true that there are quite a few economic headwinds making things difficult, but it’s also true that buying high and selling low is a losing strategy.

Eventually, the market will recover, and when it does, the stock you’re itching to sell could easily come back with a vengeance. Therefore, when you get tempted to pull the plug on some of your investments, you’ll regret not stepping back, especially if you don’t have a need for the money you invested anytime soon.

When I get tempted to sell due to market chaos, I find that it’s often helpful to simply close my browser tab displaying my portfolio and take a walk outside. 

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

The post 3 steps you’ll regret not taking during this bear market appeared first on The Motley Fool Australia.

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More reading

• Running out of cash in retirement? 4 better options than taking on debt
• How might China’s $6b Mineral Resources Group impact the iron ore price?
• Analysts name 2 ASX dividend shares to buy next week
• Have ASX shares bottomed yet?
• Analysts rate these ASX 200 blue chip shares as buys

Motley Fool contributor Alex Carchidi 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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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.

Inflation is making life tough on everyone right now, but it’s especially hard for retirees who have to make their nest eggs last an indefinite amount of time without a job bringing in steady income.

When your financial accounts are dwindling, borrowing money to tide you over can feel like your only option. But it often leads to longer-term problems, especially if you wind up with high-interest debt.

You may have other choices available to you, though. Here are four options to consider before you apply for a loan or charge a bunch to your credit card.

1. Get a job

Yeah, I know. Retirement is supposed to mean not working, but if you’re in serious financial trouble, getting a job can be one of the surest ways to get out of it. You’ll have a steady paycheck again, and you may even be able to add to your retirement accounts over time.

Getting a job doesn’t have to mean going back to some corporate cubicle you hate, either. You can choose something that’s a little more laid-back or in line with your interests. You can even start your own business.

2. Sell items you no longer want

If you have a lot of unused possessions, consider selling them to make a quick buck. This might not help you out long-term, unless you own valuable artwork, antiques, or something similar. But it could help you make ends meet for a little while until you can work out a better long-term plan.

It’s pretty easy to sell most items these days. Just create a profile on a marketplace website or post the item on social media and await offers.

3. Look into government assistance programs

You might qualify for government assistance programs that can help you cover your essential costs. For example, blind, disabled, and low-income seniors may qualify for supplemental income from the federal government. If you’re not sure if you qualify, check out the government’s eligibility screening tools.

Explore the resources available to you at state and local levels as well. You may be able to get help paying for food, housing, medical care, and more.

4. Consider a reverse mortgage

A reverse mortgage is a kind of debt, but it might be a better choice for some than other types of debt, like credit card debt. Essentially, a reverse mortgage allows homeowners aged 62 or older to borrow against the equity they have in their homes. They can receive the cash as a lump sum, monthly payments, or a line of credit. And they don’t have to repay the loan as long as they’re alive and living in the home.

But there are a few catches. First, you need substantial equity in your home in order to be able to do a reverse mortgage. Also, when you die or permanently move out of your home, the balance of the loan comes due. This could make it impossible to pass your home on to your heirs if they’re not able to pay it off.

You will still face fees and interest with a reverse mortgage, but you don’t need an income or decent credit to get one. So it could be a good option if you don’t think you could affordably borrow money elsewhere.

Sometimes, borrowing money might actually be a smart option for you. But don’t rule out these other income sources without checking them out.

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

The post Running out of cash in retirement? 4 better options than taking on debt appeared first on The Motley Fool Australia.

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More reading

• How might China’s $6b Mineral Resources Group impact the iron ore price?
• Analysts name 2 ASX dividend shares to buy next week
• Have ASX shares bottomed yet?
• Analysts rate these ASX 200 blue chip shares as buys
• Own Westpac shares? Why the major bank could soon make a crypto splash

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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There’s a new global iron ore player on the circuit. Chinese authorities have officially established a new, nationalised iron-ore company called China Mineral Resources Group.

The group was established this week with a paid-up capital of $US4.3 billion ($6.2 billion), according to Bloomberg,

The new company is set to become China’s central purchaser of iron ore. Chinese steel mills would then source iron ore from the group.

The move could see China tighten its control on the global steel market – at least, that is the intention.

What does this mean for the iron ore price?

Well, apparently not much, although it’s early days.

The price of iron ore didn’t budge on the news and was trading sideways at US$100 per tonne at the time of writing, back at its December 2021 levels. It remains 51% down on the year.

Meanwhile, large Aussie miners don’t appear too fazed by the news either. For instance, BHP Group Ltd (ASX: BHP) CFO David Lamont said the mining giant isn’t too convinced the entity will influence price action.

Speaking at The Australian’s Strategic Business Forum, Lamont believes “markets will sort out where prices need to be based on supply and demand”.

“[O]bviously [we] will meet what overall prices the overall economy and the world puts forward, so we’re not worried about that,” he added.

Meanwhile, Fortescue Metals Group Limited (ASX: FMG) non-executive director Penny Bingham-Hall was more upbeat on the news.

Bingham-Hall said the industry “has got a new customer”.

“I’m a great believer that markets are defined by supply and demand and China is an incredibly important market for Australia,” she added.

A spokesman for Rio Tinted Limited (ASX: RIO) said the company looked forward to ­“engaging with the new China Mineral Resources Group, government and our customers to understand more”.

Looking forward, it will be interesting to see where the iron ore price heads from here.

The post How might China’s $6b Mineral Resources Group impact the iron ore price? appeared first on The Motley Fool Australia.

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• What’s going wrong for the Fortescue share price on Thursday?
• ‘We remain cautious’: Could the BHP share price be heading south?
• Why did the Fortescue share price leap 5% on Wednesday?
• Own BHP shares? Here’s why the miner just partnered with one of the world’s biggest steelmakers
• Top brokers name 3 ASX shares to buy today

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 Australian share market is home to a good number of shares offering attractive dividend yields.

But which ones should you buy over others? Here are two that analysts rate as buys right now:

Bapcor Ltd (ASX: BAP)

The first ASX dividend share to look at is Bapcor. It is the company behind the Autobarn, Burson Auto Parts and Midas brands and Asia Pacific’s leading provider of vehicle parts, accessories, equipment, service and solutions.

The team at Citi is positive on Bapcor despite the tough operating environment. In fact, its analysts see little risk around its FY 2022 earnings and upside to consensus FY 2023 net profit estimates of $140 million. This is due to its belief that Bapcor should benefit from DC efficiencies, cost outs, and acquisitions.

As for dividends, its analysts are forecasting fully franked dividends of 22 cents per share in FY 2022 and then 24 cents per share in FY 2023. Based on the current Bapcor share price of $6.68, this will mean yields of 3.3% and 3.6%, respectively.

The broker currently has a buy rating and $8.03 price target on the company’s shares.

South32 Ltd (ASX: S32)

Another ASX dividend share to look at is this mining giant. It could be a top option for income investors that are not averse to investing in the resources sector.

This is due to the company’s attractive valuation, strong free cash flow generation, and positive dividend outlook.

In respect to the latter, thanks to its exposure to a number of in-demand commodities such as aluminium, the team at Macquarie believe South32’s shares will provide investors with big fully franked dividend yields in the coming years.

It is forecasting dividends per share of 34.5 cents in FY 2022 and 40.6 cents in FY 2023. Based on the current South32 share price of $3.53, this will mean yields of 9.8% and 11.5%, respectively.

Macquarie has an outperform rating and $6.00 price target on the miner’s shares.

The post Analysts name 2 ASX dividend shares to buy next week appeared first on The Motley Fool Australia.

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More reading

• Analysts name 2 top ASX 200 dividend shares to buy
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• ‘We have clearly seen the peak’: Sector veteran gives earnings season warning for ASX mining shares
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Can the South32 share price bounce back in FY23?

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 Bapcor. 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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After a turbulent 2022 with wars, inflation and interest rate rises, it might surprise you that the S&P/ASX 200 Index (ASX: XJO) has actually risen 5% since 20 June.

So some investors are asking now whether we have passed a trough? Are there brighter times from here onwards?

After all, everything outside of the energy sector has been savagely sold off. Surely it gets to a point where selling is exhausted?

Ophir Asset Management co-founders Steven Ng and Andrew Mitchell set out to answer this question in their latest letter to investors.

More declines could come, but for how long?

The first point to note, according to Ng and Mitchell, is that no one knows for sure whether the market has bottomed.

But their hunch at the moment is “not yet”.

“Why? Because we have not yet seen the earnings downgrades caused by central banks, most notably the [US] Fed, seeking to suppress demand through rapid rate hikes,” read the letter.

“It would be highly unusual if earnings growth were not materially revised down because of the Fed likely compressing most rate hikes for this cycle into 2022.”

They cited Goldman Sachs research showing that historically stock prices started their recovery about six to nine months before earnings pick up.

“The market is forward looking and attempts to price in the coming earnings fall. This is essentially what we have seen so far in 2022,” said Ng and Mitchell.

“But what happens next? This is where the great mystery lies.”

Hard vs soft landing

From here there are two possible scenarios, according to the Ophir team.

Steep rises in interest rates could bring along a recession, which means significant falls in company earnings. This would mean stock prices have further falls coming.

The alternative is that central banks miraculously achieve a “soft landing”, which would see just “minor revisions” downwards in earnings. That would bring a stock price recovery reasonably soon.

“The reality is no one knows which it will be. Not the Fed, not your favourite economist and certainly not the press,” read the Ophir letter.

“Take Goldman Sachs themselves. Early in July, its non-recessionary year-end forecast for the S&P 500 Index (SP: .INX) index is 4,300 (+14%), while its recessionary scenario forecast would see the index fall to 3,150 (-17%). Such a wide range as to be almost useless to anyone!”

The trick is to remain vigilant of opportunities and to practise dollar-cost averaging.

Veye director Varun Ratra said this week to “never give up in bear markets”.

“Biggest gains are made in the early stages of the new uptrend,” he said. 

“The smartest opportunities appear in the young bull markets.”

The post Have ASX shares bottomed yet? appeared first on The Motley Fool Australia.

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• Analysts rate these ASX 200 blue chip shares as buys
• Is Adairs considered an ASX 300 dividend share?
• Own Westpac shares? Why the major bank could soon make a crypto splash
• Amazon is bowing to regulators. Here’s what it means for shareholders
• Guess which ASX 200 share this fundie tips to outperform

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

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If you’re looking for blue chip ASX 200 shares to buy, then you may want to consider the two listed below that brokers are bullish on.

Here’s what you need to know about these blue chips:

Australia and New Zealand Banking Group Ltd (ASX: ANZ)

The first blue chip ASX 200 blue chip share that analysts are positive on is big four bank ANZ Bank.

It was recently tipped as a buy by analysts at Citi. The broker appears to believe the acquisition of the banking operations of Suncorp Group Ltd (ASX: SUN) could be a boost if everything goes to plan.

If integrated successfully, we believe the deal looks to represent fair value, with the acquisition PE of 13.8x offset by substantial cost synergies (~35% of SUN Bank cost base), funding cost benefits (due to ANZ’s AA rating) and lower capital intensity (a move to AIRB accreditation) over time.

The broker currently has a buy rating and $29.00 price target on the bank’s shares. This compares very favourably to the latest ANZ share price of $22.59 and suggests potential upside of 28% for investors.

Woolworths Group Ltd (ASX: WOW)

Another ASX 200 blue chip share that could be in the buy zone is retail giant Woolworths.

The team at Goldman Sachs is bullish on the company and believes it is well placed in the current environment to deliver solid sales growth and even stronger earnings growth. The broker recently commented:

We forecast [a sales] CAGR of 6.6% and underlying NPAT of 14.1% over FY22-24e, with key driver being market share gain of AU Foods business at comp sales growth of FY23/24 8.8% and 6.6% respectively driven by effective cost-price pass through and additional mix improvement with relatively stable volume growth.

Goldman has a buy rating and $40.50 price target on its shares. Based on the current Woolworths share price of $37.25, this implies potential upside of 9% before dividends and 12% including its forecast FY 2023 dividend.

The post Analysts rate these ASX 200 blue chip shares as buys appeared first on The Motley Fool Australia.

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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
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• 5 things to watch on the ASX 200 on Thursday

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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Shares in Westpac Banking Corp (ASX: WBC) experienced a green end to the week. However, it isn’t the share price that may have caught the attention of investors in the big four bank this week.

While Westpac might be Australia’s oldest banking institution, it has proven that age is merely a number. Potentially catching a few onlookers off guard this week, the 205-year-old bank has been caught advertising a job involving cryptocurrency.

Let’s take a look at what it might mean for Westpac shares.

Looking to be a leader in crypto

In the last seven days, many crypto assets have partially rebounded in value. Take for instance the two largest names in the market, Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH). These two crypto assets have increased 12% and 32% in value respectively.

Amid this current resurgence, reporting has spread on Westpac putting out the feelers for a ‘Principal Architect in Digital Assets and Cryptocurrency’. However, according to the LinkedIn job posting, this role was first published three weeks ago.

Interestingly, the expression of interest in the crypto sector comes amid some of the greatest scepticism since the dramatic fall in price back in 2018. The developing industry has come under pressure following several collapses of both crypto tokens and institutions — such as the recently publicised Three Arrows Capital debacle.

The evaporation of capital as a result of this undoing has accelerated falls across crypto assets since the beginning of the year. In turn, Bitcoin is now down 49% on a year-to-date basis. In contrast, Westpac shares have slipped a slight 3%.

According to the Westpac job listing, the major bank’s new role includes:

• Helping drive Westpac’s emerging digital assets business, with the goal of entering the market and achieving a leadership position
• Translating emerging trends from the cryptocurrency and digital assets world into the opportunities for Westpac and our customers
• Developing and maintaining the strategic technology roadmap for digital assets, cryptocurrency and blockchain technologies

Based on the information above, it seems Westpac is quite serious about getting involved in crypto.

Westpac shares in review

While 20% price swings in the space of a couple of weeks are customary in the crypto world, few would expect to see such a move among the big four. However, that is exactly what occurred in the front half of June as the Westpac share price reacted to rate hikes.

At the current $21.07 price tag, Westpac is offering a dividend yield of 5.7%.

The post Own Westpac shares? Why the major bank could soon make a crypto splash appeared first on The Motley Fool Australia.

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• Why did the ANZ share price smash the other ASX 200 banks today?
• RBA in the spotlight; and Westpac hikes fixed rates. Scott Phillips on Nine’s Late News
• How high will the RBA hike rates in 2022? Here’s what the ASX 200 banks are forecasting
• This is what analysts are forecasting for the Westpac dividend through to FY24
• ‘CBA and Westpac are too big’: One fund manager’s take on the future of ASX 200 bank shares

Motley Fool contributor Mitchell Lawler has positions in Bitcoin and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. and The Motley Fool Australia has positions in and has recommended Bitcoin and Ethereum. The Motley Fool Australia has recommended Westpac Banking Corporation. 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 Adairs Ltd (ASX: ADH) share price has been in focus for a few months now for many ASX investors. That’s what happens when a company’s shares fall almost 60% over 2022 thus far (as of a few weeks ago). But, more recently, Adairs shares have been bouncing back with a vengeance.

Since hitting a new 52-week low of $1.65 a share in mid-June, the Adairs share price has now recovered by an impressive 43%, going off the $2.36 price it is commanding at the time of writing.

Many investors watching this rollercoaster ride might be wondering if Adairs is an ASX 300 dividend share. Well, let’s answer that today.

So, first things first. Adairs is an ASX 300 share, by virtue of its presence on the S&P/ASX 300 Index (ASX: XKO). Its market capitalisation of just over $400 million isn’t enough to have Adairs qualify for the more popular and widely-used S&P/ASX 200 Index (ASX: XJO).

But it does make the cut for the ASX 300, which means an ASX 300 ETF like the Vanguard Australian Shares Index ETF (ASX: VAS) has Adairs shares in its portfolio.

But what of dividends?

Is ASX 300 retailer Adairs a dividend share?

The answer to that question is also a resounding yes. Adairs is indeed a dividend share and has been paying out dividends to its shareholders for years now. This has been the case ever since Adairs listed on the ASX boards back in 2015.

Since the company’s inaugural dividend payment in April 2016, Adairs has only missed a biannual dividend payment once – the period covering the first six months of COVID-ravaged 2020. Adairs resumed paying out dividends in the second half of 2020 and has been doing so ever since.

Adairs’ last dividend payment arrived on 14 April this year. This was an interim dividend worth a fully franked 8 cents per share. The previous final dividend that investors saw in September last year came to a fully franked 10 cents per share.

Together, the 18 cents per share that Adairs has paid out over the past 12 months gives this retail share a trailing dividend yield of 7.36% (or 10.9% grossed-up) at the current Adairs share price of $2.36.

Now those (objectively impressive) metrics are past-facing. We do not yet know what kind of dividends Adairs will pay in the future. If the company trims its next two dividends, then investors won’t be enjoying a 7.36% dividend yield going forward.

But if Adairs maintains or even increases its dividends over the next year, then income investors will no doubt be a very happy lot.

But we shall just have to wait and see what happens with this ASX 300 retail share.

The post Is Adairs considered an ASX 300 dividend share? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in ADAIRS FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ADAIRS FPO. The Motley Fool Australia has positions in and has recommended ADAIRS 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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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.

Like some other big tech companies, Amazon.com Inc (NASDAQ: AMZN) has been in the antitrust hot seat for several years now. The company has a huge presence in U.S. e-commerce, controlling roughly 40% of a fast-growing market, and it’s also the leading cloud infrastructure provider.

Amazon has no direct rival in e-commerce as no other company has more than single-digit market share in the category, and Amazon has used that dominant position to its advantage, launching businesses like its third-party marketplace and advertising embedded on its product pages.

Both of those deliver high margins. In fact, Amazon’s marketplace is so successful that it generates more in sales volume than the company’s first-party business (that is, direct sales).

The online retail giant has taken note of the success of individual products in the marketplace, at times launching its own similar private-label products. Former Amazon CEO Jeff Bezos said Amazon policy forbids using third-party data in making first-party product decisions, but he also told a congressional panel that he couldn’t guarantee that that policy had never been violated.

Developing house brands is a tried-and-true strategy for brick-and-mortar retailers, and Amazon has followed suit and ramped up its private-label business over the years. It has reached nearly 250,000 private-label products across 45 different owned brands.

However, The Wall Street Journal is now reporting that Amazon is cutting back on that business due to a combination of regulatory pressure and weak sales in some of the product categories.

Bezos, who is now executive chairman, has been a big backer of the private-label business, but it hasn’t lived up to his expectations.

Amazon’s owned brands, which span categories like batteries, clothes, and baby-care products, account for just 1% of total retail sales, falling well short of a goal Bezos had set of capturing 10% of Amazon’s total sales by 2022.

Two steps forward, one step back

While there is no talk of shuttering the private-label business, the Journal said that Amazon is significantly reducing the number of private-label goods on its site, eliminating several weak sellers to focus instead on fast-moving consumer goods like batteries whose sales it can more easily forecast and fulfill.

The regulatory threat may also be a factor. Amazon is the world’s second-biggest company by revenue, and it could pass No. 1 Walmart as soon as next year.

Senators like Elizabeth Warren and antitrust regulators have become wary of the company’s power and have suggested potential moves like splitting the marketplace from the first-party business or cleaving Amazon Web Services from the e-commerce division. Those antitrust attacks don’t help Amazon’s reputation, and the company is already dealing with a unionization push at some of its warehouses.

The decision to curtail its private-label business might also reflect the company’s realization that its greatest strength in e-commerce is as a facilitator rather than a direct seller. The recent launch of Buy with Prime, allowing online shoppers to shop directly on non-Amazon websites and get Prime delivery for the first time, could juice sales by leveraging the company’s logistics network.

What it means for investors

It’s easy to forget that Amazon has had its share of failures over its history, including the Fire Phone, the Amazon Webstore (a competitor to Shopify), and Amazon Destinations, its online travel agency. Given the company’s overall success, it’s unusual for some of its initiatives to flop.

It’s too early to call the private-label business a failure, but it clearly hasn’t lived up to Bezos’s expectations, and Amazon lags behind brick-and-mortar competitors whose owned brands have thrived. Costco, for example, is nearly synonymous with Kirkland, the private-label brand that comprises everything from peanuts to underwear, and Target has 10 of its own billion-dollar brands, each bringing in $1 billion or more in annual revenue, meaning its private-label business is bigger than Amazon’s even though its overall revenue is much lower.

Brick-and-mortar chains, for a number of reasons, might have an advantage over Amazon in selling private-label goods.

Costco, for example, has far fewer stock keeping units (SKUs), or individual items for sale, than Amazon, making the private-label business less complicated. The regulatory criticism also seems a good reason for Amazon to pull back in an area that has already sparked ire from government officials.

While this looks like a minor defeat, it’s worth remembering that experimentation and failure are core parts of the company’s culture, and Amazon doesn’t expect every new idea to pan out. Though it’s pulling back on private labels, programs like Buy with Prime and Amazon Go seem to be gaining momentum.

That’s a reminder that the company still has plenty of levers to pull in order to grow the business, even if private-label products aren’t delivering as expected.

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

The post Amazon is bowing to regulators. Here’s what it means for shareholders appeared first on The Motley Fool Australia.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, Costco Wholesale, Shopify, Target, and Walmart Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

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