An uplift in energy prices led the Woodside Energy Group Ltd (ASX: WDS) share price to post-COVID highs in 2022.

The Russian war in Ukraine sparked oil prices to touch US$120 a barrel last month before retracing to US$100 today.

Woodside shares have moved in sync with the price of oil, reaching a year-to-date high of $35.77 in early June.

Subsequently, the company paid its biggest-ever dividend to shareholders after reporting robust growth in its full-year results.

This is in sharp contrast to the previous dividends paid by Woodside over the years, given the market’s volatility since COVID-19.

A quick recap on the Woodside dividend history

Here’s a quick look at the Woodside dividends distributed to shareholders over the last five years.

• September 2017 – 61.95 cents (interim)

• March 2018 – 62.61 cents (final)

• September 2018 – 72.80 cents (interim)

• March 2019 – 127.06 cents (final)

• September 2019 – 53.24 cents (interim)

• March 2020 – 83.13 cents (final)

• September 2020 – 36.24 cents (interim)

• March 2021 – 15.29 cents (final)

• September 2021 – 41.03 cents (interim)

• March 2022 – 146.15 cents (final)

In total, Woodside has paid $6.99 in dividends to shareholders from this time in 2017.

At yesterday’s closing price of $31, the company has a trailing dividend yield of 6.03%.

How does this compare with the Santos dividend?

Like Woodside, the Santos Ltd (ASX: STO) share price has also surged recently.

In fact, Australia’s second-largest energy company by market capitalisation is up 10% year to date, and up around 140% since 2017.

When looking at the dividend history, Santos has distributed a total of 58.5 cents to shareholders since 2017.

Although this may seem minuscule, it’s worth noting that Santos shares fetch considerably lower than its peer at $6.97 apiece.

However, when comparing the energy giants against each other, the Woodside dividend offers better value.

Currently, Santos has a trailing dividend yield of 2.79%.

Woodside share price snapshot

The Woodside share price is up 32% over the last 12 months and more than 40% in 2022.

The company has a price-to-earnings (P/E) ratio of 16.50 and commands a market capitalisation of roughly $58.58 billion.

The post How does the Woodside dividend compare to Santos over the last 5 years? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 5 things to watch on the ASX 200 on Wednesday
• What’s the outlook for ASX 200 energy shares in FY23?
• Worley shares dip despite deal with Santos
• 5 things to watch on the ASX 200 on Tuesday
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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.

from The Motley Fool Australia https://ift.tt/c782EhV

A prominent fund manager has revealed the latest ASX share that she has bought for her fund.

The share price for insurance building repairer Johns Lyng Group Ltd (ASX: JLG) has dropped almost a quarter year to date.

And Tribeca portfolio manager Jun Bei Liu this week disclosed that her fund took advantage of this price weakness.

“I really like this company,” she told Switzer TV Investing.

“It recently got into my portfolio.”

Bad weather is not bad news for this ASX share

Unfortunately, Australia’s east coast has been battered with excessive rain for much of this year.

But for a company whose clients are insurance companies, this provides a surge of business.

“No analyst [can] forecast those natural disasters,” said Liu.

“Once you have the natural disaster, it takes a couple of years to build.”

This has a snowball effect on Johns Lyng’s financial performance.

“It’s a constant upgrade cycle. Last year it upgraded 12 times, and this year it’s already done it three or four times.”

The market has appreciated Johns Lyng’s worth in recent times, sending the stock price up a stunning 450% over the past five years.

But this year’s sell-off has made it cheaper than it has been for quite some time.

“The share price cratered because it was expensive. But now it looks pretty good value.”

More tailwinds: acquisition and strata

Many of Liu’s peers agree with her assessment. According to CMC Markets, seven out of eight analysts are rating the stock as a strong buy.

QVG Capital analysts, in a memo to clients last week, boasted that they hold Johns Lyng shares.

They said:

Looking forward into FY23, Johns Lyng Group will benefit from a full year contribution of their US acquisition Reconstruction Experts and a full pipeline of ‘cat’ [catastrophe] work, given the sequence of extreme weather events experienced over this financial year.

As well as all the rain, Liu identified another tailwind that could boost performance even further.

“They just recently got into strata, as well, for the large buildings,” she said.

“It’s just been incredibly consistent in terms of earnings.”

The post I just bought this ASX company enjoying ‘a constant upgrade cycle’: fundie appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 2 ASX shares you never heard of ready to make hay
• These 2 ASX shares are ‘compelling opportunities’: fund manager
• Why is the WAM Capital share price down 20% in June?

Motley Fool contributor Tony Yoo has positions in Johns Lyng Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Johns Lyng Group Limited. The Motley Fool Australia has recommended Johns Lyng Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/TcS1beW

Fears of rising interest rates have really taken their toll on growth and small-cap ASX shares.

That’s because smaller, rapidly expanding businesses are typically the ones who have taken on debt to fuel their growth.

And when a company borrows funds to operate, investors revise down its valuation as interest rates rise. This is because every dollar of future earnings will cost more to produce.

As such, during frightening times for small cap and growth shares, it could be worthwhile checking out the businesses that have plenty of cash on their books.

This theoretically means rate hikes don’t affect their future performance. If anything, it can help them marginally, as they can earn a better return on their cash.

And of course, not needing to do equity raising rounds means existing shareholders don’t have their investments diluted.

Small caps with so much cash they gave some back

In a shocking month, small-cap specialist fund Cyan C3G saw almost every stock in its portfolio suffer a freefall in June.

But portfolio managers Dean Fergie and Graeme Carson feel especially comfortable about their holdings that boast useful cash reserves.

In fact, two of those companies actually implemented a share buyback to return some of that excess capital back to investors.

“Touch Ventures Ltd (ASX: TVL) holds almost all of its current market capitalisation in cash — $74 million market cap vs $67 million in cash, plus investment assets valued in May 2022 at over $120 million!” Fergie and Carson said in a memo to clients.

“And, quite prudently, has activated an aggressive share buyback, repurchasing over 1 million shares in June.”

Despite this, Touch shares lost 24% in June.

ReadCloud Ltd (ASX: RCL) suffered even more, shaving 29% off its valuation last month.

“Digital textbook company ReadCloud holds $5.4 million on its balance sheet, made a net profit of over $1 million in 1H22 and has also announced a share buy-back.”

Price crashes don’t make sense

The memo also named three other cashed-up businesses that Cyan is keeping the faith in.

“Other companies that hold significant net cash balances include Alcidion Group Ltd (ASX: ALC) $18 million; Raiz Invest Ltd (ASX: RZI) $19 million; and Vita Group Limited (ASX: VTG) $20 million.”

The portfolio managers spoke of their angst in seeing great businesses like Alcidion and Raiz respectively lose 21% and 22% of their valuation last month.

“With Alcidion having a strong balance sheet, significant recurring revenues derived from government and private domestic and international hospitals and health care providers, there are numerous reasons to expect this stock could be a strong performer again in FY23,” read the memo.

“With almost 300,000 active and engaged financial customers in Australia, Raiz is generating strong recurring revenues and is likely to garner the interest of a myriad of local financial institutions.”

The post 5 small-cap ASX shares sitting on a pile of cash: experts appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 2 ASX shares we’re sticking with after 60% falls: fund managers
• ‘Frustrating’: Fund backs 3 great ASX shares with plunging prices

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 positions in and has recommended Alcidion Group Ltd and ReadCloud Limited. The Motley Fool Australia has recommended Alcidion Group Ltd and ReadCloud Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/hFi2qMR

On Tuesday, the S&P/ASX 200 Index (ASX: XJO) gave back the majority of its intraday gains to finish the day a fraction higher. The benchmark index rose 4.1 points to 6,606.3 points.

Will the market be able to build on this on Wednesday? Here are five things to watch:

ASX 200 expected to edge lower

The Australian share market looks set to edge lower on Wednesday following a poor night of trade in the United States. According to the latest SPI futures, the ASX 200 is expected to open the day 3 points lower this morning. On Wall Street, the Dow Jones fell 0.6%, the S&P 500 dropped 0.9%, and the Nasdaq tumbled 0.95%. Investors were selling stocks ahead of the release of a key US inflation report.

Oil prices crash

Energy producers such as Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a tough day after oil prices crashed overnight. According to Bloomberg, the WTI crude oil price is down 8.1% to US$95.64 a barrel and the Brent crude oil price has sunk 7.5% to US$99.10 a barrel. Demand concerns weighed heavily on prices.

IDP Education rated as a buy

The IDP Education Ltd (ASX: IEL) share price has major upside potential according to analysts at Goldman Sachs. This morning the broker reiterated its buy rating with a $35.50 price target. It commented: “We view this as a structural growth story as international student markets open up. India is a key driver of this trend.”

Gold price tumbles

Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could have a difficult day after the gold price tumbled lower again overnight. According to CNBC, the spot gold price is down 0.5% to US$1,723.2 an ounce. Looming rate hikes are weighing on the safe haven asset.

South32 sells royalties

The South32 Ltd (ASX: S32) share price will be on watch today after the miner announced the sale of four non-core base metals royalties to Anglo Pacific Group for US$185 million. This comprises US$103 million in cash and US$82 million in scrip. The latter will leave South32 with a ~16.9% interest in Anglo Pacific. These royalties are from third party interests in copper and nickel projects in Australia, USA and Chile.

The post 5 things to watch on the ASX 200 on Wednesday appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• What are experts predicting will be the best-performing ASX sectors in FY23?
• Here are the top 10 ASX shares today
• What’s the outlook for ASX 200 energy shares in FY23?
• Has a turnaround already begun for ASX tech shares? Experts reveal the outlook for FY23
• Here are the 3 most heavily traded ASX 200 shares on Tuesday

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

from The Motley Fool Australia https://ift.tt/UMlo3zj

Are you interested in adding some ASX shares to your portfolio this month?

Three ASX 200 shares that could be worth considering are listed below. Here’s what you need to know about them:

NextDC Ltd (ASX: NXT)

The first ASX 200 share to look at is data centre operator NextDC. With more and more services shifting to the cloud, demand for data centre space has been growing at a rapid rate in recent years. The good news is that the shift to the cloud is still a work in progress, which bodes well for demand over the next decade. And with NextDC owning some of the highest quality data centres in the world, it appears well-placed to capture this demand. In addition, the company is constructing new centres in regional markets and looking at the Asian market.

Goldman Sachs is positive on the company and has a buy rating and $14.20 price target on its shares.

Seek Limited (ASX: SEK)

Another ASX 200 share that could be in the buy zone is this leading job listings company. Seek has been tipped to continue its solid growth over the long term thanks to its leadership position in the ANZ market and its international operations.

Credit Suisse is a fan of Seek. Last month, its analysts put an outperform rating and $36.90 price target on its shares. It expects Seek to outperform its guidance in FY 2022.

TechnologyOne Ltd (ASX: TNE)

A final ASX 200 share to look at is enterprise software provider TechnologyOne. It has been tipped to deliver strong earnings growth over the coming years thanks to its transition to a software-as-a-service (SaaS) focused business. As of its last update, management believes it is on track to almost double its annual recurring revenue (ARR) to $500 million by FY 2026.

The team at Goldman Sachs is also very positive on Technology One. The broker currently has a buy rating and $13.30 price target on its shares.

The post Experts name 3 ASX 200 shares to buy now appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Has a turnaround already begun for ASX tech shares? Experts reveal the outlook for FY23
• Here’s why experts are tipping these ASX growth shares as buys
• Why experts rate these ASX growth shares as buys
• Here are the top 10 ASX shares today
• Top broker picks two ASX 200 tech shares for today’s economy

Motley Fool contributor James Mickleboro has positions in NEXTDC Limited and SEEK 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 recommended SEEK Limited and TechnologyOne Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/DR32M4x

ASX uranium shares broadly benefited in the first part of the 2022 financial year (FY22) amid fast rising prices for the metal.

What happened with uranium prices in FY22?

Uranium prices tracked higher over the first nine months, reaching more than US$64 per pound in mid-April, according to data from Trading Economics. Since then, prices have fallen back to US$48 per pound, though that’s still well above the US$30 per pound on 30 June 2021.

Global interest in the metal, used in nuclear reactors to generate electricity, was rekindled in 2021 amid increased focus on slashing carbon emissions. Whilst nuclear energy entails having to deal with the radioactive waste post electricity production, it essentially produces no greenhouse gases.

Soaring energy prices in 2022, spurred higher by Russia’s invasion of Ukraine, has also seen more political interest in using uranium to provide baseload power.

So, how did all this impact ASX uranium shares?

ASX uranium shares broadly beat the benchmark

All up, it was a mixed bag for investors of ASX uranium shares in FY22, though most beat the benchmark index.

Here’s how some of the top producers and explorers stacked up against the All Ordinaries Index (ASX: XAO) over the 12 month period.

• All Ordinaries Index(ASX: XAO) lost 11.1%
• Paladin Energy Ltd (ASX: PDN) closed FY21 trading for 52 cents and finished FY22 at 58 cents, a gain of 11.5%
• Deep Yellow Limited (ASX: DYL) kicked off FY221 at 72 cents and finished at 60 cents, a loss of 16.7%
• Bannerman Energy Ltd (ASX: BMN) opened and closed the 2022 financial year at 17 cents per share, for a change of 0.0%
• Boss Energy Ltd (ASX: BOE) finished FY21 at 18 cents and closed FY22 at $1.77, a gain of 22%

Looking over that list you’ll see that three of the four ASX uranium shares handily outperformed the All Ordinaries in FY22.

You may also be questioning our maths.

If the Boss Energy share price went from 18 cents to $1.77, surely that’s a gain of 833%, not 22%?

The discrepancy there is in the share consolidation that Boss Energy carried out back in November. That saw every eight Boss Energy shares consolidated into one ‘new’ share. With that in mind, the FY22 closing price for this ASX uranium share in relatable terms to its FY21 closing price needs to be divided by eight.

So instead of $1.77, we get 22 cents.

Still, an impressive 22% year-on-year gain for Boss Energy.

The post The ups and downs for ASX uranium shares in the 2022 financial year appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Here are the top 10 ASX shares today
• Lake Resources shares are the most traded today. What’s going on?
• Here are the top 10 ASX shares today
• Why the Paladin share price fell 25% in June
• Here are the top 10 ASX shares today

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

from The Motley Fool Australia https://ift.tt/PBxNQZ9

With the new financial year underway, it’s time for investors to think about positioning their portfolios for the new macroeconomic regime.

The benchmark S&P/ASX 200 Index (ASX: XJO) has recently bounced from a low on 20 June. It closed the day on Tuesday at 6,606.3, 0.06% higher.

Themes of inflation, central bank tightening, surging interest rates, and – even after two long years – COVID-19 continue to dominate the narrative for ASX shares.

In FY22, energy and mining shares were the dominant players and, by all accounts, look set to perform into the new financial year.

The chart below shows the returns for each of the ASX’s major sector indices this year to date. Energy and utilities have outperformed whilst all other sectors are in the red.

What sectors will perform in FY23?

According to a blend of its global macro models and analyst expectations, Trading Economics expects the S&P/ASX 200 Index to trade around 6,500 points by the end of this quarter.

“Looking forward, we estimate it to trade at 6079.65 in 12 months time,” it added.

It’s a bold prediction that points to further downside, but it may have some merit, according to some experts.

Analyst Chris Savage at Bell Potter is cautious on the technology sector in FY23 due to the shifting interest rates cycle. He wrote in a recent note:

We remain cautious on the outlook for the tech sector in the second half of 2022 given the likelihood that interest rate rises will continue both domestically and offshore due to inflation remaining stubbornly high.

With this in mind we are more attracted to stocks in the tech sector with reasonable cash flows/earnings.

Meanwhile, energy shares look set to continue flourishing in FY23, with a number of tailwinds still behind the sector.

Analysts at JP Morgan note there’s still plenty of uptake of fossil fuels forecast into the next decade. It’s a view shared by Lazard Asset Management.

It says that the energy sector, being so crucial to the economy’s functioning, could continue to rate higher in FY23.

Healthcare shares could also be set to catch a bid in FY23, with the sector already showing signs of recovery in July.

Recent Deloitte analysis found that the “health care sector [had] a powerful opportunity to accelerate innovation and reinvent itself” after battling through COVID-19.

Analysts at Goldman Sachs reckon the average earnings per share (EPS) could grow by around 30% in H2 FY22, suggesting health care could offer some upside this year.

Bringing all the opinions and information together, it appears that cash-rich, fundamentally sound ASX sectors trading at respectable valuations will be the net performers in FY23.

This aligns with the stage in the current macroeconomic cycle whereby investors are increasingly pricing in a number of macro-risks, namely inflation, recession fears, and surging interest rates.

The post What are experts predicting will be the best-performing ASX sectors in FY23? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Here are the top 10 ASX shares today
• What’s the outlook for ASX 200 energy shares in FY23?
• Has a turnaround already begun for ASX tech shares? Experts reveal the outlook for FY23
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• These were the best (and worst) performing ASX 200 sectors of FY22

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.

from The Motley Fool Australia https://ift.tt/QDkgh3s

At the current Fortescue Metals Group Limited (ASX: FMG) share price, the company is expected to pay a huge dividend yield. But is this enough to make it attractive?

Firstly, let’s look at how much income Fortescue is actually expected to pay.

Considering FY22 has finished, we’ll look at the projected dividend yield for FY23 and FY24.

Using the numbers on CMC Markets, Fortescue could pay a grossed-up dividend yield of 16% in FY23 and 9.8% in FY24.

Compared to most other ASX dividend shares, those projected yields are much larger than what many other businesses are expected to pay over the next couple of financial years. Fortescue has a dividend policy to pay out between 50% to 80% of full-year net profit after tax (NPAT).

So, on the income side of things, it looks like Fortescue is going to be a ‘gold mine’ for dividends.

There’s more to returns than dividends

Getting cash dividends can be very rewarding. Fortescue dividends are very generous – I’m a shareholder myself, so I am getting the benefit of those dividends.

But, I’ll acknowledge that dividends are only part of the picture. The share price returns are important too. It could be pointless to get a 10% dividend yield but suffer a 10% fall of the share price.

The Fortescue share price has, indeed, fallen by 14% over the past month and 22% since 8 June 2022.

I think it’s important to remember that Fortescue’s current NPAT and investment sentiment is tied to the iron ore price because that’s where nearly all of its profit currently comes from.

The iron ore price has been falling. It’s down around US$25 per tonne since the start of June 2022.

Fortescue’s profit potential can change quickly, which is why the Fortescue share price can move so quickly as well. The iron ore price and Fortescue profit are expected to settle at a lower level over the next couple of financial years.

The price of iron ore is highly dependent on China buying vast quantities of the commodity. For people reliant on dividend income, it may not be helpful that Fortescue relies on China for its profit generation. That demand can change.

The dividends are definitely an attractive feature of Fortescue shares. But, for me, there is another reason to be interested in the business, particularly at this lower Fortescue share price.

Fortescue Future Industries (FFI)

FFI is a green energy and green technology company. It is being allocated 10% of Fortescue’s NPAT each year to help develop a global portfolio of renewable energy and green industry opportunities.

Fortescue Future Industries has a goal of making green hydrogen the most globally traded seaborne commodity in the world. FFI wants to produce 15mt of green hydrogen per annum by 2030. E.ON has agreed to purchase up to a third of that production – five million tonnes.

Another exciting area is Williams Advanced Engineering (WAE), which is described as a leading provider of high-performance battery and electrification technology. FFI says that WAE has already demonstrated a track record of success in advanced engineering in premium automotive and motorsports sectors.

WAE has an important part to play in Fortescue’s decarbonisation. For example, it’s helping Fortescue create an ‘infinity train’. This promises zero emissions by using a regenerating battery, utilising gravitational energy to fully recharge its battery electric systems without any additional charging requirements for the return trip to reload. It will also reportedly lower operating costs and create maintenance efficiencies

Foolish takeaway

Fortescue’s dividends are attractive but are expected to reduce in the coming years. I’m cautious about the outlook for the iron price. However, the green FFI division has a very promising outlook in my opinion, which is why I like the business.

The post Should investors buy Fortescue shares for dividends? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Investors were seeking out ASX shares in June. Here’s why
• ASX 200 mining shares glide lower as expert reduces commodity targets
• Is this a good time to go digging for ASX 200 mining shares for FY23?
• Where is the Fortescue share price headed in 2023?
• Own BHP shares? Top broker warns of looming oversupply of iron ore in 2H 2022

Motley Fool contributor Tristan Harrison has positions in Fortescue Metals Group 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.

from The Motley Fool Australia https://ift.tt/pchbAQ6

For ASX investors, June wasn’t exactly a great month to have money tied up in the share market. Over the month just gone, the S&P/ASX 200 Index (ASX: XJO) ended up losing a painful 8.9%. That looks more like a one-year loss than a one-month loss, but that’s just life on the ASX.

With a one-month loss like that, you might be forgiven for thinking that investors were staying well away from ASX shares in June. But new data shows that was not the case.

According to a new report from global managed fund network Calastone, it was a tough quarter for Australian managed funds, with net outflows of $2.05 billion across all asset classes. That represents the largest quarterly outflow since Calastone began collecting records in 2019.

However, despite these outflows, inflows into ASX shares were positive, the only sector to stay in the green. Here’s some of what the report said:

Investors were negative on every category of equity fund in June, except Australian equities. Funds focused on all different regions of the world, sector–focused funds, even ESG, all saw outflows in June. Global funds bore the brunt of the selling, with outflows of A$120m, while specialist sector funds, which mainly focus on infrastructure assets were also hard hit…

By contrast, Australian equities were a beacon of relative stability. Net inflows in June totalled
A$36m, though this was around one tenth of the average monthly inflow over the last two years.

So why were investors selling everything from ethical investments and infrastructure to bonds and international shares, but not ASX shares?

Why were investors chasing ASX shares in June?

Here’s how Calastone managing director Teresa Walker explained it:

The relative resilience of Australian equities reflects the commodity and banking bias on the
market. The Australian stock market is one of the highest yielding in the world and that has proven a big draw in times of rising inflation and interest rates.

So it’s dividends that have kept investors coming back to ASX shares, it seems. This isn’t hard to understand. There’s arguably no time that investors appreciate the certainty of yield in the form of direct cash payments more than when volatility is spiking and share prices are jittery.

That certainly describes the ASX investing environment rather accurately over the past few months.

There are also the unique benefits of franking that our ASX dividend shares offer too that might have further enticed investors.

The past 12 months have also seen many ASX dividend shares up their game when it comes to their payouts. We’ve seen big dividend increases from ASX banks like Commonwealth Bank of Australia (ASX: CBA) for one. In CBA’s case, this ASX bank paid out a total of $2.75 in dividends per share over FY2022. That was a pleasing increase over the $2.48 it doled out in FY2021.

Not only have the banks been upping their dividends, but so have the ASX’s biggest miners. Both BHP Group Ltd (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG) forked out the largest annual dividends in their history over FY2022. Even today, Fortescue shares have a trialling dividend yield of 17.58% on current pricing.

So considering all of that, it’s perhaps no surprise that investors were looking to ASX shares above other asset classes last month.

The post Investors were seeking out ASX shares in June. Here’s why appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Are falling BNPL shares pushing the ASX banks higher today?
• Down 9%, can CBA shares bounce back in FY23?
• Where is the BHP dividend heading through to FY25?
• Here are the 5 best ASX 200 bank shares of FY22
• ASX 200 mining shares glide lower as expert reduces commodity targets

Motley Fool contributor Sebastian Bowen 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.

from The Motley Fool Australia https://ift.tt/F1Gu3n0

The Zelira Therapeutics Ltd (ASX: ZLD) share price was put on ice in mid-afternoon trading on Tuesday after it rocketed 28.57%.

It followed the company’s request that its shares be placed in an immediate trading halt.

Shares in the medicinal cannabis company were frozen at $1.98 apiece.

Why is the Zelira share price halted?

In a statement to the ASX, Zelira advised it is preparing to make an important announcement to investors.

This is in relation to the receipt of results from Germany’s health regulator, BfArM.

Zelira requested the trading halt remain in place until Thursday 14 July or when the announcement is made, whichever comes first.

A brief rundown on Zelira

Founded in 2003, Zelira is a biopharmaceutical company focused on researching, developing, and commercialising clinically-validated cannabinoid medicines.

The company has a pipeline of cannabinoid-based medicines undergoing clinical development that are waiting for access to the German market.

This includes two products that Zelira launched in 2020, both of which are available in Australia.

The first is its HOPE product which aims to improve the health of people with autism spectrum disorder.

And the other product is Zenivol which helps people with chronic sleep disorder (insomnia).

Zelira share price snapshot

Despite today’s euphoric gains, Zelira shares have lost almost 80% since this time last year.

When looking at year-to-date, the company’s shares are down around 65%.

Notably, Zelira shares hit a multi-year low of 90 cents apiece last month before storming higher.

Based on valuation grounds, the company presides a market capitalisation of roughly $18.9 million.

The post Zelira shares rocket 28% before being placed on ice. Here’s the latest. appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Investors were seeking out ASX shares in June. Here’s why
• Why did ASX coal shares leap today?
• Here’s the outlook for the Rio Tinto share price in FY23
• Here are the top 10 ASX shares today
• Own Telstra shares? Here are details on the telco’s 2,000 new Australian call centre workers

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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.

from The Motley Fool Australia https://ift.tt/rsylzCv