Australia and New Zealand Banking Group Ltd (ASX: ANZ) shares currently boast a higher dividend yield than its S&P/ASX 200 Index (ASX: XJO) ‘big four’ peers.

The smallest big four bank by market capitalisation offers those invested in its stock a dividend yield of more than 6% right now.

Let’s take a closer look at the bank’s significant yield and how it stacks up to those offered by its peers.

ANZ shares boast a 6.3% dividend yield

The ANZ share price is $22.70 as of Friday’s close. That leaves the bank’s stock trading with an impressive 6.3% dividend yield.

Each share in the bank has handed investors $1.44 in dividends over the last 12 months.  

That pay-out was made up of a 72-cent final dividend for financial year 2021 – paid out in December. Another 72-cent interim dividend for the first half of financial year 2022 – offered to investors earlier this month – topped it off.

Additionally, both dividends were fully franked, meaning they could provide extra benefits to some shareholders at tax time.

Here’s how the other big four bank’s dividend yields stack up to that of ANZ:

• Westpac Banking Corp (ASX: WBC)
  • Offers a dividend yield of around 6%
• National Australia Bank Ltd (ASX: NAB)
  • Offers a dividend yield of nearly 5%
• Commonwealth Bank of Australia (ASX: CBA)
  • Offers a dividend yield of around 4%

Unfortunately, however, the ANZ share price has posted a worse performance than its big four peers in 2022. It has tumbled nearly 19% year to date.

For comparison, the ASX 200 has slipped 12% this year while the S&P/ASX 200 Financials Index (ASX: XFJ) has fallen 11.3%.

Meanwhile, the CBA share price has fallen around 9.7% and those of Westpac and NAB are posting losses of 7.9% and 4.4% respectively.

The post ANZ shares offer the best dividend yield of the big four in July appeared first on The Motley Fool Australia.

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More reading

• Why did the ANZ share price plunge 22% in FY22?
• Here are 2 ASX 200 dividend shares analysts rate as buys
• What’s the outlook for ASX 200 dividend shares in FY23?
• Could rising rates hurt ASX 200 bank shares in the longer run?
• ASX 200 midday update: Chalice Mining jumps, Zip sinks on bearish broker note

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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 Dusk Group Ltd (ASX: DSK) share price has been very volatile in recent months. As an ASX retail share, it is exposed to the Aussie consumer.

The business has seen its share price drop by around 50% over FY22, marking one of the more painful drops on the ASX in the 2022 financial year.

Dusk describes itself as an Australian specialty retailer of home fragrance products. It aims to provide a range of “branded premium quality products at competitive prices from its physical stores and online store.”

Some of the products that it sells include candles, ultrasonic diffusers, reed diffusers and essential oils. It also sells fragrance-related homewares.

Lockdown start to FY22

Near the beginning of the 2022 financial year, Dusk reported a strong year of growth compared to FY20. It showed total sales growth of 47.4% to $148.6 million and net profit after tax (NPAT) growth of 225.5% to $26.8 million.

When it released its trading update for the first seven weeks of FY22, it said that it had been disrupted with around 35% of potential trading days because of COVID-19 related restrictions and store closures. As a result of that, top line sales went down 28%, or $4.4 million in dollar terms.

However, Dusk said that in the stores that were open or had reopened, it was seeing “strong customer conversion rates and elevated average transaction value.”

It noted that November and December trading were key because of the seasonality of its sales. In other words, Christmas trading could be an important factor for the Dusk share price.

Potential acquisition subsequently terminated

In mid-December 2021, Dusk announced that it was planning to buy Eroma Group – Australia’s leading supplier of candle making inputs, including fragrance oils, waxes, packaging, containers and candle making kits, according to Dusk.

The deal was priced at an enterprise value of $28 million, which was around five times the FY21 earnings before interest and tax (EBIT) and a lower multiple than the FY22 forecast of EBIT. The acquisition was expected to add over 20% to earnings per share (EPS) before synergies.

However, that deal was only a conditional agreement. Dusk said not all of those conditions had been achieved, so the transaction wouldn’t be proceeding.

FY22 first result and trading update

The latest that investors have heard from the business was in late February 2022 during reporting season.

It said that in the FY22 first half result, total sales were down 12% year on year, but up 36.5% over a two-year period. The ‘pro forma’ gross profit margin was 68%, up from 67.7% in the prior corresponding period.

Dusk said that it generated pro forma EBIT of $21.3 million, compared to $28 million in the first half of FY21 and $9.6 million in the first half of FY20. Profitability can have a key influence on the Dusk share price.

The ASX retail share also gave a trading update for the first eight weeks of the second half of FY22. It said that total sales were down 11.8% year on year, though up 28.4% over two years. Online sales were up 19.4% year on year.

Dusk noted that consumer sentiment “continued to be soft and shopping entre foot traffic was sharply down.” However, in what may be a positive signal, Dusk said that its sales conversion rates and average transaction value remained up against the prior corresponding period.

The company wants to keep growing its store network. It noted it was going to open four new stores in time for Mother’s Day.

The post Why did investors go dark on the Dusk share price in FY22? appeared first on The Motley Fool Australia.

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More reading

• Why did the Dusk share price flame out 16% in June?
• Sniffing out an opportunity: Why I think the Dusk share price could be a buy
• Do Dusk shares really have a 12% dividend yield right now?

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 Dusk 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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The Fortescue Metals Group Limited (ASX: FMG) share price has fallen 19% over the past month.

After such a rough time, can things get better over the 2023 financial year?

Commodity prices can change really quickly, which can hurt or help investor sentiment. The iron ore price has fallen by around US$20 per tonne since the beginning of June 2022, so perhaps it’s not surprising that the Fortescue share price has dropped.

The company can’t do much about what happens with the iron ore price. However, there are other things that the company is doing which could.

Iron Bridge

The costly Iron Bridge Magnetite project will deliver 22 million tonnes (mt) per year of high grade iron. This could help the Fortescue share price.

Fortescue says this is a strategic project because it will enable Fortescue to provide an “enhanced product range” and increase its production and shipping capacity.

The company said that the project has made significant progress while managing the challenges relating to COVID-19, supply chain constraints and inflation.

The capital estimated cost is for a range of between US$3.6 billion to US$3.8 billion, with Fortescue’s share being between US$2.7 billion to US$2.9 billion.

First production is expected in the three months to March 2023, a bit later than the previously scheduled date of December 2022.

Fortescue Future Industries (FFI)

FFI is the Fortescue division that is aiming to take a global leadership position in green energy and energy technology. It’s committed to ‘zero-carbon green hydrogen’.

An important part of its green ambitions is Gladstone, Queensland’s green energy manufacturing centre. Construction has already started, but making progress on this facility could help build investor confidence in the company’s abilities to deliver on its plans. The first stage development is an electrolyser manufacturing facility with an initial capacity of two gigawatts per annum and an investment of up to US$83 million.

FFI has signed important partnerships recently, including with E.ON to supply up to 5mt of green hydrogen to Europe by 2030. It has also established a working alliance with Airbus to facilitate the decarbonisation of the aviation industry with green hydrogen.

If Fortescue signs more deals that take up more of its future green hydrogen production, that could help the Fortescue share price.

Broker price targets

A price target is where a broker believes the Fortescue share price will be in 12 months from now.

Let’s have a look at some of those.

Macquarie is neutral on the business, with a price target of $18.

The broker Ord Minnett has a hold rating on the business, with a price target of $18 as well.

Morgan Stanley is a lot less optimistic. It has an underweight rating, which is similar to a sell. The price target is $14.20, which implies a fall of around 18%.

However, the ASX mining share is expected to pay a large dividend yield in FY23. Ord Minnett currently has pencilled in a grossed-up dividend yield of 14.8%.

The post Where is the Fortescue share price headed in 2023? appeared first on The Motley Fool Australia.

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More reading

• Own BHP shares? Top broker warns of looming oversupply of iron ore in 2H 2022
• What’s the outlook for ASX 200 dividend shares in FY23?
• Here are the top 10 ASX shares today
• Fortescue share price lifts with Australia’s record high trade surplus
• Is now the time to be buying beaten down ASX 200 mining shares?

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. 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 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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The S&P/ASX 200 Index (ASX: XJO) has a number of ASX travel shares within its ranks.

There are a few different players, including travel agents and an airline. Readers may have used some of their services including Qantas Airways Limited (ASX: QAN), Webjet Limited (ASX: WEB), Corporate Travel Management Ltd (ASX: CTD) and Flight Centre Travel Group Ltd (ASX: FLT).

The last two and a half years have obviously been all about COVID-19 for the travel sector. International travel went into hibernation and domestic travel plunged.

But since the rollout of national and global vaccination initiatives, those barriers to travel have started coming down.

Let’s look at how the share prices of the ASX 200 travel shares travelled during the last financial year.

Mixed returns for ASX 200 travel shares in FY22

The Webjet share price went up by 8.75%.

The Flight Centre share price rose by 16.9%.

The Qantas share price dropped 4%.

The Corporate Travel Management share price fell 14%.

Of course, those returns are just for a specific 12-month period. The returns are different over different periods including since the start of COVID, compared to the last five years, and so on.

Each of these businesses has different elements contributing to their recovery. For example, Corporate Travel’s recovery is with a focus on business customers. Flight Centre benefits from consumers going on holidays again, while also making the most of a COVID-19 ‘reopening’ factor.

People fly on Qantas planes for both corporate and leisure reasons, but there are also costs that investors have to factor in. Oil prices have soared since the start of 2022 amid the Russian invasion of Ukraine, which caused uncertainty and impacted the global supply and demand balance for oil.

Recovery comments

The share prices of the ASX 200 travel shares (and most shares) are usually forward-looking. So let’s see what the companies recently said.

After releasing its FY22 result, Webjet said:

Trading continues to improve on the back of demand and opening borders. First quarter trading for the group is currently tracking well ahead of FY22 fourth quarter at bookings, TTV [total transaction value], revenue and EBITDA [earnings before interest, tax, depreciation and amortisation] levels. April was our most profitable month since the pandemic began with all our businesses delivering profits. May’s profitability is expected to significantly exceed that of April.

In May 2022, Corporate Travel Management said it expects to be more than 75% larger than 2019 at full recovery. The company is expecting “strong” revenue and EBITDA momentum going into FY23. And it is expecting FY22 fourth-quarter revenue to beat 2019 levels.

In June 2022, Qantas said that travel demand remains strong across all categories. However, it recently announced a reduction of 15% in domestic capacity in the short term to assist with the recovery of sustained high fuel prices. However, there were no changes announced to its international capacity plans. The airline expects capacity to be 70% of pre-COVID levels by the end of the FY23 first quarter. By the FY23 fourth quarter, it expects to reach 90% of pre-COVID levels.

In May 2022, Flight Centre said its recovery is well underway and that it generated an EBITDA profit in March 2022. It also said that TTV is rebounding “strongly” globally as it gains market share.

In August, we’ll hear results from ASX 200 travel shares Flight Centre, Qantas and Corporate Travel Management, and probably trading updates as well.

The post How did ASX 200 travel shares go in FY22? appeared first on The Motley Fool Australia.

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More reading

• These are the 10 most shorted ASX shares
• The NAB share price outperformed the ASX 200 by 16% over 12 months
• Expert names ASX share that could fly 67% higher
• 5 things to watch on the ASX 200 on Monday
• Top broker names the ASX travel shares to buy before it’s too late

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 Corporate Travel Management Limited, Flight Centre Travel Group Limited, and Webjet Ltd. 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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Once a week I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Flight Centre Travel Group Ltd (ASX: FLT) continues to be the most shorted ASX share despite its short interest easing to 15.6%. There are concerns that higher airfares and rising living costs could impact consumer spending on leisure travel.
• Nanosonics Ltd (ASX: NAN) has short interest of 12.3%, which is flat week on week. This medical device company’s shares have come under pressure amid concerns over a major and disruptive sales model change in the key United States market.
• Betmakers Technology Group Ltd (ASX: BET) has seen its short interest remain flat at 11.8%. Short sellers aren’t giving up on this betting technology company despite it recently announcing a share buyback.
• Block Inc (ASX: SQ2) has short interest of 10%, which is down slightly week on week. This mirrors the short interest of the payment company’s shares on Wall Street.
• Lake Resources N.L. (ASX: LKE) has entered the top ten with short interest of 8.9%. The sudden exit of the lithium developer’s CEO without comment appears to have spooked the market.
• PolyNovo Ltd (ASX: PNV) has seen its short interest rise to 8.8%. This medical device company’s mixed performance over the last 12 months appears to be behind this.
• EML Payments Ltd (ASX: EML) has short interest of 8.6%, which is down week on week. Short sellers appear to believe this payments company’s underperformance in the third quarter could continue into the fourth.
• Regis Resources Limited (ASX: RRL) has short interest of 8.5%, which is down week on week. Short sellers will have been disappointed to see this gold miner’s shares surge higher last week following a record quarter.
• Kogan.com Ltd (ASX: KGN) is back in the top ten with short interest of 8.4%. Inventory mismanagement, supply chain headwinds, higher marketing costs, and Amazon’s growing presence in Australia appear to be behind this short interest.
• Webjet Limited (ASX: WEB) has short interest of 8%, which is down slightly week on week. Cost of living pressures appear to have investors concerned that the travel market recovery could take longer than expected.

The post These are the 10 most shorted ASX shares appeared first on The Motley Fool Australia.

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More reading

• Top broker names the ASX travel shares to buy before it’s too late
• Why did some ASX BNPL shares plummet more than 90% in FY22?
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Flight Centre share price fails to lift-off amid recovering aircraft engine demand
• Why Block, Bubs, Infomedia, and Zip shares are dropping

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 Betmakers Technology Group Ltd, Block, Inc., EML Payments, Kogan.com ltd, Nanosonics Limited, and POLYNOVO FPO. The Motley Fool Australia has positions in and has recommended Block, Inc., EML Payments, Kogan.com ltd, and Nanosonics Limited. The Motley Fool Australia has recommended Betmakers Technology Group Ltd, Flight Centre Travel Group Limited, and Webjet Ltd. 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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It has been an encouraging past couple of weeks for the Metcash Limited (ASX: MTS) share price.

Since the release of the company’s full-year results on 27 June, the wholesale distributor’s shares are up 4.4%.

In contrast, the S&P/ASX 200 Index (ASX: XJO) has gained around 1.5%.

Let’s take a look below at what’s driving Metcash shares forward lately.

Ex-dividend around the corner for Metcash shares

Despite the recent volatility on the ASX, Metcash shares have continued to climb following the company’s outstanding financial scorecard.

This has led investors to take up positions in Metcash shares as the upcoming ex-dividend date approaches.

At Friday’s market close, Metcash shares finished at $4.31.

Investors will need to buy the company’s shares before market close today to be eligible for the final dividend. The ex-dividend date falls on Tuesday 12 July (tomorrow).

Historically, when a company reaches its ex-dividend day, its shares tend to fall after shareholders lock in the latest dividend.

When can Metcash shareholders expect payment?

For those eligible for Metcash’s final dividend, shareholders will receive a payment of 11 cents per share on 10 August.

This brings its full-year dividend to 21.5 cents, which represents a 22.9% improvement from the previous financial year.

For context, the final FY21 dividend came to 9.5 cents per share.

Management noted that the company’s strong FY22 underlying earnings led to the board’s decision to increase the shareholder distributions.

The dividend is fully franked which means that you’ll receive franking credits to put towards your next tax bill.

Metcash share price summary

Over the last 12 months, the Metcash share price is up 10% after registering wild price swings on the ASX.

The company’s shares reached a 52-week high of $4.90 in early May, before sharply declining in the following weeks.

Metcash commands a market capitalisation of roughly $4.16 billion and has a dividend yield of 4.67%.

The post Time is running out to secure the Metcash dividend. Here’s what you need to do appeared first on The Motley Fool Australia.

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More reading

• 4 ASX dividend shares to buy that aren’t banks or miners: expert
• Here are the top 10 ASX shares today
• Why Liontown, Metcash, Star, and Weebit Nano shares are charging higher
• Why Imugene, Link, Metcash, and Sayona shares are racing higher
• ASX 200 midday update: Metcash and Imugene jump, Evolution downgrades guidance again

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.

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The ASX All Technologies Index (ASX: XTX) fell hard in FY22, dropping by around 35%. That’s a big fall for a whole group of ASX tech shares.

Some of the names in the index include Block Inc (ASX: SQ2), REA Group Limited (ASX: REA), WiseTech Global Ltd (ASX: WTC), Xero Limited (ASX: XRO), Computershare Limited (ASX: CPU), SEEK Limited (ASX: SEK), Carsales.com Ltd (ASX: CAR), NextDC Ltd (ASX: NXT), Pro Medicus Limited (ASX: PME) and Altium Limited (ASX: ALU).

The return of an index is dictated by the performance of the underlying holdings – like Block, REA, WiseTech and so on.

Technology business valuations were running hot near the end of the 2021 calendar year. However, things have certainly come back down with a bump.

It is common for share prices to move up and down in shorter periods. That’s a key function of the share market. Not every buyer and seller is going to want to transact at the same price as last week or last month.

However, the falls we’ve seen since the beginning of 2022 have been savage for some ASX tech shares.

Inflation and interest rates could be key contributors to the volatility and valuation changes we’ve seen this year.

Interest rates

Investing is not always easy. Knowing how much to pay for a business that is growing quickly, or is expected to grow quickly, can be tricky.

For some investors, the interest rate has a major impact on the premium they’re willing to pay on today’s earnings with regard to how large future earnings are expected to be. In other words, the valuation of the ASX All Technologies Index can be significantly influenced by interest rate changes.

I think that Warren Buffett has previously explained this concept very well:

The value of every business, the value of a farm, the value of an apartment house, the value of any economic asset, is 100% sensitive to interest rates because all you are doing in investing is transferring some money to somebody now in exchange for what you expect the stream of money to be, to come in over a period of time, and the higher interest rates are the less that present value is going to be. So every business by its nature… its intrinsic valuation is 100% sensitive to interest rates.

Interest rates are now rapidly climbing higher. The Reserve Bank of Australia (RBA) has increased the interest rate by 100 basis points (or 1.00%) since the beginning of June with two hikes of 50 basis points.

The United States Federal Reserve increased its interest rate by 75 basis points (0.75%) in June. The next increase, whatever size it is, is due soon.

However, the market is largely expecting further interest rate increases over the rest of 2022. So they won’t be a surprise, unlike the scale of the first few increases.

Only time will tell how high central banks have to push interest rates to control inflation. If inflation calms down quicker than expected, that could be beneficial for the ASX All Technologies Index.

The post Why did the ASX All Technologies Index have such a dire FY22? appeared first on The Motley Fool Australia.

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More reading

• Broker names 2 ASX 200 dividend shares to buy in July
• The NAB share price outperformed the ASX 200 by 16% over 12 months
• Expert names ASX share that could fly 67% higher
• 5 things to watch on the ASX 200 on Monday
• Broker names 2 blue chip ASX 200 shares to buy this month

Motley Fool contributor Tristan Harrison has positions in Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium, Block, Inc., Pro Medicus Ltd., WiseTech Global, and Xero. The Motley Fool Australia has positions in and has recommended Block, Inc., Pro Medicus Ltd., WiseTech Global, and Xero. The Motley Fool Australia has recommended REA Group Limited, SEEK Limited, and carsales.com 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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If you’re looking for ASX 200 dividend shares to buy, then you may want to check out the two listed below.

Both have recently been named as buys by the team at Morgans. Here’s why its analysts rate them highly this month:

BHP Group Ltd (ASX: BHP)

The first ASX 200 dividend share to look at is mining giant BHP. Morgans rates the Big Australian very highly due to its diverse operations, strong balance sheet, and resilient dividend profile. The broke currently has an add rating and $48.30 price target on its shares.

It commented:

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

In respect to dividends, the broker has pencilled in a $3.99 per share dividend in FY 2022 and then a $3.22 per share dividend in FY 2023. Based on the latest BHP share price of $39.22, this equates to yields of 9.8% and 8.2%, respectively.

Macquarie Group Ltd (ASX: MQG)

Another ASX 200 dividend share that could be in the buy zone is investment bank Macquarie. Morgans believes Macquarie is well-placed for growth over the long term thanks to structural tailwinds. It currently has an add rating and $215.00 price target on the company’s shares.

The broker said:

We continue to like MQG’s exposure to long-term structural growth areas such as infrastructure and renewables. The company also stands to benefit from recent market volatility through its trading businesses, while the company continues to gain market share in Australian mortgages.

As for dividends, the broker is forecasting partially franked dividends of $7.07 per share in FY 2023 and $7.47 per share in FY 2024. Based on the current Macquarie share price of $170.69, this will mean yields of 4.1% and 4.4%, respectively.

The post Broker names 2 ASX 200 dividend shares to buy in July 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 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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The end of the 2022 financial year for most individuals and businesses could be a good time to assess the performance of the National Australia Bank Ltd (ASX: NAB) share price.

NAB doesn’t have a financial year end date of 30 June 2022. September 2022 is the last month of NAB’s financial year.

At the time of writing, over the prior 12 months, the NAB share price has gone up 8% while the S&P/ASX 200 Index (ASX: XJO) has fallen by 8%. That’s outperformance of 16%.

NAB is one of the big four ASX bank shares along with Commonwealth Bank of Australia (ASX: CBA), Australia and New Zealand Banking Group Ltd (ASX: ANZ) and Westpac Banking Corp (ASX: WBC).

However, NAB has been executing on its strategies to try to grow profit.

Making profit and growing profit can be a key influence on the NAB share price, so let’s look at how the latest profit update went.

FY22 half-year result

A couple of months ago, NAB told investors about how it had performed for the six months to March 2022.

It said that it generated $3.48 billion of cash net profit after tax (NPAT). This was an increase of 4.1% year on year. Revenue rose by 4.6%, benefiting from “pricing discipline and strong growth in lending and deposits” which increased by 10% and 12% respectively.

The big four ASX bank said that focused investment was key for the performance in the result.

NAB said that the recent shift to a higher growth outlook provides greater scope to keep investing while continuing to deliver productivity benefits.

However, the investing and higher inflation environment means that it’s now expecting costs to rise by between 2% to 3% over the year. This is to drive growth opportunities while maintaining cost discipline.

The bank has enacted share buybacks totalling $5 billion. This had the effect of lowering the capital held to a more effective level and improving shareholder return statistics such as earnings per share (EPS).

The company also decided to increase its interim dividend per share by 21.7% to 73 cents per share.

FY22 projections

In FY22, NAB is expected to generate $2.17 of EPS according to CMC Markets. The annual dividend per share is predicted to be $1.48 per share.

At the current NAB share price, this means that it’s valued at 13x FY22’s estimated earnings with a projected grossed-up dividend yield of 7.5%.

The post The NAB share price outperformed the ASX 200 by 16% over 12 months appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Monday
• Experts say these ASX dividend shares are buys this month
• Here are the top 10 ASX shares today
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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 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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Pessimism has never been more rife than in share markets right now.

High inflation, surging fuel prices, rising interest rates, a war in Ukraine and the threat of recession are all conspiring to make investors pretty anxious.

“Investors will have to navigate a period where economic and earnings growth could be vulnerable to downward revisions,” Wilsons head of investment strategy David Cassidy said in a memo to clients.

“We have already seen a downward revision in the S&P/ASX 300 (ASX: XKO) in June, and we think this will continue as we get closer to reporting season in August.”

In this type of macroeconomic climate, you might want to “turn down the noise” for a bit.

If you put the economy aside, one thing you may have noticed is that airports in Australia and the US have been jam-packed.

In fact, both the April and current school holidays have seen such long, chaotic queues at Sydney Airport that travellers are actually missing their flights.

When a particular industry is enjoying such pent-up demand, surely it has to be worth a look.

Qantas shares are dirt cheap compared to a month ago

Despite the massive thirst for travel, the fear of a recession has really pulled back the share price for Qantas Airways Limited (ASX: QAN).

This ASX airline share has lost more than 18% over the past month.

Cassidy reckons this presents “good value” to buy right now.

“Despite Qantas being a high beta stock, we believe near-term demand will be bolstered by pent-up leisure and corporate demand and outweigh the impacts of an economic slowdown,” he said.

“We think Qantas will be more resilient to a decline in economic conditions with its leaner cost base, stronger balance sheet, and higher loyalty contribution than in previous cycles.”

Besides, Cassidy personally thinks the market is now overestimating the risk of an economic downturn.

“Our view is that the outlook is not as bleak as what the market has priced in,” he said.

“As a result, we believe that in the broadening market sell-off, investors now have a good opportunity to buy quality stocks that are well priced.”

With the travel industry surging, the Wilsons team reckons the airline’s price-to-earnings (P/E) ratio based on the 2024 financial year could rise to 10. It currently trades at 6.

That’s a 67% upside.

“If Qantas can achieve consensus earnings of $0.68 per share in FY24 (which we think it can) then the stock should be priced at the end of June 2023 at $6.80 using a 12-month forward PE multiple of 10,” he said.

“As the market gets more focused on the FY24 earnings over the next 12 months we think the stock can rerate towards this price target.”

Qantas shares closed Friday down 0.22% at $4.44.

The post Expert names ASX share that could fly 67% higher appeared first on The Motley Fool Australia.

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More reading

• Qantas share price slides as engineers plan strike action
• How did the Vanguard Australian Shares Index ETF perform in June?
• Why did the Qantas share price outperform the ASX 200 in FY22?
• How did ASX travel shares perform in June?
• ASX 200 travel shares leap as Australia scraps COVID-19 vaccine mandates for international arrivals

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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