Looking for some dividend shares to add to your income portfolio? If you are, you may want to look at the two listed below.

Both have been rated as buys by analysts and tipped to provide investors with big dividends. Here’s what you need to know about these ASX dividend shares:

HomeCo Daily Needs REIT (ASX: HDN)

The first ASX dividend share to look at is the HomeCo Daily Needs REIT.

It is a property company that invests in convenience-based assets across target sub-sectors of neighbourhood retail, large format retail, and health and services.

The team at Goldman Sachs are positive on its outlook and believe its shares are undervalued at current levels. The broker commented:

We believe HDN is undervalued at its current valuation given its diversified tenant base, and see it as well positioned to benefit from the shift to omni channel retailing, with additional external growth opportunities to drive earnings growth over the medium-term.

Goldman has a buy rating and $1.70 price target on its shares.

In respect to dividends, the broker is forecasting dividends per share of 8 cents in FY 2022 and 9 cents in FY 2023. Based on the current HomeCo Daily Needs share price of $1.34, this will mean dividend yields of 6% and 6.7%, respectively.

South32 Ltd (ASX: S32)

Another ASX dividend share that is rated as a buy is South32.

It is diversified mining and metals company producing a range of commodities. This includes green metals such as aluminium, copper, and nickel.

Morgans is a big fan of the company following changes to its portfolio. It commented:

We see attractive long-term value potential in S32 from de-risking of its growth portfolio, the potential for further portfolio changes, and an earnings-linked dividend policy.

The broker currently has an add rating and $6.10 price target on the miner’s shares.

As for dividends, Morgans is forecasting fully franked dividends in the region of 26 cents per share in FY 2022 and 35 cents per share in FY 2023. Based on the current South32 share price of $3.99, this equates to yields of 6.5% and 8.8%, respectively.

The post Experts name 2 ASX dividend shares with big yields to buy appeared first on The Motley Fool Australia.

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More reading

• Here are 2 ASX 200 dividend shares to buy according to analysts
• Down 40% Tuesday, up 21% today, what’s going on with this ASX coal share?
• How big will the South32 dividend be in 2023?
• Here are 2 ASX dividend shares experts say are buys
• Here are the 3 most heavily traded ASX 200 shares on Friday

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 positions in and has recommended Wesfarmers 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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On Friday, the S&P/ASX 200 Index (ASX: XJO) finished the week with a very strong day. The benchmark index fell 1.75% to 6,474.8 points.

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

ASX 200 expected to jump

The Australian share market looks set to start the week on a very positive note after a particularly strong night on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 103 points or 1.6% higher this morning. On Wall Street, the Dow Jones was up 2.7%, the S&P 500 rose 3.1%, and the Nasdaq jumped 3.3%.

Oil prices rebound

Energy producers Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) could have a good start to the week after oil prices rebounded on Friday. According to Bloomberg, the WTI crude oil price rose 3.2% to US$107.62 a barrel and the Brent crude oil price climbed 2.7% to US$113.12 a barrel. However, this couldn’t stop oil prices from recording a second weekly decline on recession fears.

Metcash results

The Metcash Limited (ASX: MTS) share price will be on watch on Monday when the wholesale distributor releases its full year results. According to a note out of Goldman Sachs, its analysts expect Metcash to report a 1.8% increase in revenue to $16.6 billion and a 6% lift in underlying net profit to $268 million. The latter is lower than the consensus estimate of $279 million.

Gold price flat

Gold miners Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) could have a soft start to the week after the gold price traded flat on Friday night. According to CNBC, the spot gold price ended the week at US$1,830.3 an ounce. This led to gold recording a small weekly decline amid a stronger US dollar.

NAB shares rated as a buy

The National Australia Bank Ltd (ASX: NAB) share price is great value according to analysts at Goldman Sachs. This morning the broker has retained its conviction buy rating with an improved price target of $34.26. Goldman has amended its “FY22/23/24E EPS by +0.6%/+2.0%/+2.3% post the completion of NAB’s acquisition of Citigroup’s Australian Consumer business.”

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

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More reading

• Top brokers name 3 ASX shares to buy next week
• ‘Need to see cash’: Why these fundies tip big things for the Santos share price
• Brokers name 2 ASX dividend shares to buy next week
• 4 reasons to stick with battered small-cap ASX shares
• Here are the top 10 ASX shares today

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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There are a growing number of exchange traded funds (ETFs) for investors to choose from on the Australian share market.

Three that could be worth getting better acquainted with this weekend are listed below. Here’s what you need to know about them:

BetaShares Global Banks ETF (ASX: BNKS)

The first ETF for investors to look at is BetaShares Global Banks ETF. As its name implies, this ETF gives investors exposure to many of the world’s largest banks (excluding Australian banks). Due to weakness in the global banking sector, this ETF is down 23% from its high and trading at a 52-week low. This could make it an opportune time to make an investment with a long term view. Among the banks included in the fund are Bank of America, Barclays, Citigroup, HSBC, JPMorgan and Wells Fargo.

iShares Global Consumer Staples ETF (ASX: IXI)

Another ETF for investors to look at is the iShares Global Consumer Staples ETF. This fund provides investors with exposure to large global consumer staples companies. These are companies that produce essential products such as food, tobacco, and household items. Given that demand for this type of products is relatively consistent whatever happens in the economy, this ETF could be a good option in the current environment. Among its holdings are giants such as Coca-Cola, Nestle, PepsiCo, Procter & Gamble, Unilever, and Walmart.

VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)

A final ETF for investors to look at is the VanEck Vectors Morningstar Wide Moat ETF. This popular ETF has generated strong returns for investors in recent years thanks to its focus on companies with attractive valuations and sustainable competitive advantages. There are around 50 companies included in the fund with these desirable qualities. These include Gilead Sciences, Kellogg Co, Microsoft, Philip Morris, and Walt Disney.

The post 3 quality ETFs for ASX investors to buy next week appeared first on The Motley Fool Australia.

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• 2 fantastic international ETFs for ASX investors to buy
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• Own the BetaShares Global Banks ETF? Here’s what you’re invested in
• 2 ASX growth shares I’d buy right away with $2,000
• 3 high quality ETFs for ASX investors to buy this month

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 BetaShares Global Banks ETF – Currency Hedged. The Motley Fool Australia has positions in and has recommended iShares Global Consumer Staples ETF. The Motley Fool Australia has recommended VanEck Vectors Morningstar Wide Moat ETF. 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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Everyone is bearish but one expert has revealed he’s personally started buying ASX shares.

Montgomery Investment Management chief investment officer Roger Montgomery is detecting wholesale pessimism in the industry at the moment.

“Talking to brokers, other fund managers and economists, I don’t find many people who are very bullish at all. In fact, most of them expect another leg lower in the stock market,” he said on a Montgomery vlog.

“Bearishness pervades almost every corner of the market at the moment.”

But to Montgomery, such unanimous despair means the opposite.

“For me, that starts to become optimistic because if everyone’s already bearish, there’s not many others left to become bearish,” he said.

“Those who are bearish have already sold, there’s not many people left to sell, and so it may be that prices are now on the cusp of a bounce.”

What can happen from here?

Putting aside sentiment, Montgomery analysed what could logically happen to the economy and stock markets from here.

He explored two different scenarios that could come true.

The first option is that interest rates stabilise without sending the economy into strife.

“If rates stop rising, and if economies don’t go into a recession, and we don’t get a financial crisis, then there’s a very real possibility that the indiscriminate selling that we’ve witnessed recently becomes something more discerning,” he said.

“And buyers return to the market to look for downtrodden, high-quality growth companies.”

The second possibility is that by the time rate hikes are done, the unemployment queues have lengthened.

“If that happened, then we would get a much more significant decline in economic growth, and then the possibility of a recession goes up.”

I’m buying ASX shares. Are you?

Montgomery thinks the first scenario is much more likely, as he doesn’t foresee a recession or financial crisis hitting Australia.

“Then we’re in a situation where we’ve had indiscriminate selling, pushing PE ratios very, very low, and that of course means the possibility of better returns in the future,” he said.

“So if indiscriminate selling gives way to more discerning buying, we’ll get an expansion of PEs again, and that will increase the return that would normally be available just from the earnings growth.”

Montgomery said that he’s now started to buy for his personal portfolio.

“My suggestion now is to start dipping your toe back in.”

Montgomery doesn’t pretend to know whether stock prices will head lower, higher or flatline for the rest of the year.

But that doesn’t matter for a long-term investor.

“It could be that the rest of my peers in the market are absolutely correct and we get another leg down. I just don’t know,” he said.

“But I do know that there are some mouthwatering opportunities already appearing, and rather than try and predict what prices are going to do next, I’d rather start filling my portfolio with wonderful businesses at rational prices.”

The post ‘Dip your toe back in’: Expert reveals why he’s buying ASX shares now appeared first on The Motley Fool Australia.

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• Top brokers name 3 ASX shares to buy next week
• How much have CSL shares paid in dividends over the last 5 years?
• Experts say investors should buy these top blue chip ASX shares
• 2022 has seen a record first half for ASX mergers and acquisitions. Here’s the lowdown
• Why I think the Adore Beauty share price is a great buy today

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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Last week saw a number of broker notes hitting the wires once again. Three buy ratings that investors might want to be aware of are summarised below.

Here’s why brokers think investors ought to buy them next week:

Pilbara Minerals Ltd (ASX: PLS)

According to a note out of Ord Minnett, its analysts have retained their buy rating and $4.25 price target on this lithium miner’s shares. This follows news that the company has received and accepted the equivalent of a US$7,000 per tonne offer for its lithium ahead of its BMX auction. The broker believes that this is a positive indicator for lithium prices and expects them to remain elevated in the medium term. Overall, the broker feels this makes Pilbara Minerals’ shares cheap at the current level. The Pilbara Minerals share price was fetching $2.23 on Friday.

REA Group Limited (ASX: REA)

A note out of Citi reveals that its analysts have retained their buy rating and $153.50 price target on this property listings company’s shares. This follows news that the New South Wales government is making changes to stamp duty rules. Citi sees the changes as a positive for the property market and suspects that other states could follow suit in the future. The REA share price was trading at $114.07 at the end of the week.

Woodside Energy Group Ltd (ASX: WDS)

Analysts at Morgan Stanley have retained their overweight rating and $40.00 price target on this energy producer’s shares. While the broker acknowledges that there are risks of a recession, it also reminds investors that there’s no guarantee that we will enter one. Furthermore, the broker believes that structural tailwinds and its attractive valuation would offset any weakness in oil prices caused by one. The Woodside share price ended the week at $30.61.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX shares today
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• Brokers name 3 ASX shares to buy today
• Is the Woodside share price a buy for its 13% dividend yield?
• What’s going on with the Woodside Energy share price today?

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 REA 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 CSL Limited (ASX: CSL) share price continues to struggle this year, but what about the company’s dividends?

After falling to a 52-week low of $240.10 in February, shares in the global biotech leader have travelled sideways.

On Friday, CSL shares closed 1.4% higher at $271.25 apiece.

This is in stark contrast to when the company’s share price registered double-digit gains year-on-year before COVID-19.

Nonetheless, the CSL board has continued to pay dividends to shareholders in times of economic uncertainty.

Let’s dive in to see if the CSL dividends have provided meaningful returns to shareholders over the past five years.

What is CSL’s dividend history?

Here’s a short list I have put together on CSL’s most recent dividend history.

• October 2017 – 92 cents (final)

• April 2018 – 101 cents (interim)

• October 2018 – 128 cents (final)

• April 2019 – 120 cents (interim)

• October 2019 – 145 cents (final)

• April 2020 – 147 cents (interim)

• October 2020 – 147 cents (final)

• April 2021 – 135 cents (interim)

• September 2021 – 159 cents (final)

• April 2022 – 142 cents (interim)

When adding the above amounts, CSL has paid a total dividend of $13.16 per share over the past five years.

However, investors have also seen the CSL share price rise by around 87% during that time.

This means that even a small investment in the global biotech leader’s shares would have reaped some serious benefits.

Currently, CSL has a trailing dividend yield of 1.15%.

CSL share price summary

Despite being one of the best places to park your money over the long term, CSL shares have lost around 8% year to date.

Volatility across global markets due to high inflation levels and rate hikes has been the norm in 2022.

Based on valuation grounds, CSL presides a market capitalisation of approximately $126.09 billion.

The post How much have CSL shares paid in dividends over the last 5 years? appeared first on The Motley Fool Australia.

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• Why this broker is tipping ‘strength in the CSL share price’
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• CSL share price ‘will be significantly bigger from this point’: fundie

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 positions in and has recommended CSL 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.

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If you’re looking for blue chip 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:

Cochlear Limited (ASX: COH)

The first ASX blue chip share for investors to look at is Cochlear. It is one of the world’s leading hearing solutions companies.

Goldman Sachs is positive on the company, particularly given its improving outlook. In fact, the broker suspects that Cochlear could outperform its guidance in FY 2022.

Goldman commented:

We believe the steady declines in [COVID] hospitalisation rates across key markets, supportive backlog volumes and improved margin trajectory support a much improved picture from here.

As such, we believe current targets for FY22 offer the best chance in several years for COH to deliver at/above the top-end of its guided range (GSe: A$297m).

The broker currently has a buy rating and $237.00 price target on Cochlear’s shares. Based on the current Cochlear share price of $195.16, this implies potential upside of 21% for investors.

Domino’s Pizza Enterprises Ltd (ASX: DMP)

Another blue chip ASX share that brokers say investors should buy is pizza chain operator Domino’s.

Analysts at Morgans are particularly bullish on the company due to its bold store rollout plan. This sees Domino’s aiming to increase its store network to 6,650 stores by 2033, which will be more than double its current network.

Morgans also likes the company due to its defensive qualities in tough times. Though, it concedes that that the near term could be challenging. It explained:

Demand for DMP’s product is likely to remain resilient in times of inflation and slower economic growth. Takeaway food has been one of the most resilient categories of consumer spending during periods of rising inflation. The engine of DMP’s growth is the rollout of new stores.

Although near-term store rollout may be slower than DMP would like, the medium-term opportunity is absolutely undiminished, as evidenced by the reiteration of the 2033 outlook today. DMP has developed a solid platform for inorganic expansion.

The broker has an add rating and $93.00 price target on its shares. Based on the current Domino’s share price of $66.15, this suggests potential upside of 40% for investors.

The post Experts say investors should buy these top blue chip ASX shares appeared first on The Motley Fool Australia.

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• Own Domino’s shares? Here’s how the company plans to grow through tough times
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• Analysts name 2 top ASX 200 shares to buy today
• Down 20% in a year, is the Cochlear share price a bargain buy?
• Experts rate these ASX 200 blue chip shares as buys

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 Cochlear Ltd. The Motley Fool Australia has recommended Cochlear Ltd. and Dominos Pizza Enterprises 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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While ASX equity and credit markets deal with one of the worst starts to the year on record, it’s been an entirely different story over in investment banking land.

Mergers and acquisitions (M&A) activity has nudged past a number of records in the first half of 2022, according to data compiled by Refinitiv.

Fees alone are up 78% on the prior corresponding period, and deal volume was the highest on record.

Crunching the record numbers

M&A activity blew to new heights in the first half of 2022, according to data presented in the Australia Investment Banking Review First Half 2022 from Refinitiv.

There have been at least four deals announced so far above US$5 billion with a cumulative value of $52 billion, as of June 21.

Data compiled by Refinitiv showed it was a record period for Australia on many fronts.

Overall Australian involvement announced M&A activity amounted to US$103.5 billion in the first half of 2022, a 25.4% increase compared to the first half of last year, making it the highest first-half period since records began in 1980.

The ASX healthcare sector accounted for 23% market share of the deal-making activity by value and totalled US$24.2 billion.

This was underlined by the US$22.1 billion takeover bid for Ramsay Health Care Limited (ASX: RHC) by a consortium led by private equity giant KKR.

It is currently the biggest-ever healthcare deal in Australia, Refinitiv notes.

The energy and power sector followed with 16.6% market value, booking US$17.2 billion of deals, up 26.3% from H1 FY21.

What the report calls “high technology” saw the most number of deals, but captured 13.6% of deal market share.

“Based on preliminary data, Barclays currently leads the Australian involvement announced M&A league tables, with US$36.1 billion in related deal value capturing 34.9% market share,” Refinitiv also said.

Inbound M&A activity is also up 74% from last year, primarily from capital flows from the US. Meanwhile, there are several deals still pending, with only two showing completed on the data provider’s slide deck.

Nevertheless, it shows there’s been a spike in deal-making in Australia at the top end of town, suggesting the outlook for Australia might be quite robust, all things considered.

The post 2022 has seen a record first half for ASX mergers and acquisitions. Here’s the lowdown appeared first on The Motley Fool Australia.

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• Why I think the Adore Beauty share price is a great buy today
• ‘Need to see cash’: Why these fundies tip big things for the Santos share price
• Brokers name 2 ASX dividend shares to buy next week
• Here’s why brokers rate these ASX growth shares as buys
• Why this broker is tipping ‘strength in the CSL share price’

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 recommended Ramsay Health Care 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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In my opinion, the Adore Beauty Group Ltd (ASX: ABY) share price is too good to ignore at its current level.

The beauty e-commerce business has seen a very large sell-off – it’s down by more than 70% in 2022.

Plenty of ASX growth shares have seen valuation pain amid inflation and interest rate rises.

While higher interest rates do theoretically pull down on asset prices, I think Adore Beauty has been punished too hard.

I believe there’s a beautiful opportunity here, not just because of the decline but also due to a number of positives for the company.

Revenue

While revenue isn’t the same as profit, I think it’s important to recognise that Adore Beauty is processing a lot of online orders these days, particularly after the e-commerce adoption arising from the COVID-19 lockdowns.

In the latest quarter alone (the FY22 third quarter), Adore Beauty achieved $42.7 million of revenue. This was up 9% year on year.

While the growth rate has slowed, it did still achieve good year-on-year growth in my opinion.

There’s an argument that Adore Beauty’s products could be more defensive than some discretionary spending items. The Adore Beauty CEO Tennealle O’Shannessy said:

Beauty, especially skincare, is unique within the broader retail market and is resilient to economic challenges. Our products are used daily by customers, who consider these items essential and frequently re-purchase. The nature of premium beauty means our customers spend more as they mature on the platform, with returning customers typically contributing more than 70% of total revenue.

Growth initiatives

Over the long term, I think Adore Beauty can continue to grow. It’s the potential growth of the business that makes me believe that it’s currently undervalued.

Firstly, the number of active customers keeps rising. If it can increase its customer base, retain customers, and encourage them to spend more (on Adore Beauty’s website) over a year then that will benefit the ASX share.

In the FY22 third quarter, the company said active customers went up 7% year on year to 880,000, while returning customers increased 47%.

In the FY22 half-year result, annual revenue per active customer rose 5% year on year to $224. I think returning customers spending more will be a key factor for the Adore Beauty share price over time.

Its mobile app now accounts for 10% of revenue and continues to deliver “elevated levels” of engagement, conversion and average order values, according to the company. The launch of its “first” private label products can also help grow, which will hopefully come with higher gross profit margins as well.

The company has a number of podcasts to connect with customers, for a cheaper cost than paid market channels. It also has its own YouTube channel.

Adore Beauty points to successful partnerships with Temple & Webster Group Ltd (ASX: TPW) and 7-Eleven to increase brand awareness.

It’s operating in a “large and growing $11 billion market”, giving a large addressable market to work with.  In 2020, 11.4% of the Australian beauty market was online. That compares to 18.4% in the UK in 2020, so there is potential for a large increase in online adoption.

Increasing scale to help operating leverage

The company is aiming to invest heavily to achieve above-market growth. That’s why its earnings before interest, tax, depreciation and amortisation (EBITDA) margin is expected to be between 2% and 4% in the shorter term.

Adore Beauty itself said that:

In the longer-term, as the business grows, scale benefits are expected to increase operating leverage and deliver further EBITDA margin expansion.

In HY22, the business saw its gross profit margin increase 0.6 percentage points to 33.1% thanks to product margin expansion and brand funding.

The company said that as it grows it will be able to slow its investment in fixed costs, it can forge closer relationships with brands to optimise terms and increase brand funding, and it plans to grow its margin-accretive private label.

The post Why I think the Adore Beauty share price is a great buy today appeared first on The Motley Fool Australia.

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More reading

• What Adore Beauty, Bubs, Eagers Automotive, and Renascor shares are storming higher
• Why the Adore Beauty share price is jumping but Kogan is falling
• Waiting to start investing in ASX shares? Today could be a brilliant time to do it
• 2 ASX growth shares I’d buy right away with $2,000
• Why is the Adore Beauty share price sliding 6% on Monday?

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Temple & Webster Group Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia has recommended Adore Beauty Group Limited and Temple & Webster Group 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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The Santos Ltd (ASX: STO) share price closed down 1.77% at market close on Friday on no news. It now rests at $7.22.

In broad market news, the S&P/ASX 200 Energy Index (ASX: XEJ) finished 1.45% down on Friday, extending its losses to 6% for the past week.

Fundies still say Santos is a buy

The oil and gas trade continues to wind up and those managing investor capital are bullish on Santos.

“It’s a buy from us,” said Luke Smith from Ausbil Investment Management when speaking to Livewire.

“We’re bullish on both oil and gas. Santos, for us, is the preferred way to play that in the Australian space. [It] has lagged the commodity for some time,” he added.

He reckons the market should start to appreciate Santos’ free cash flow growth and reflect that in share price gains.

“I [also] think ultimately the capital management will force the market to take heed to how much cash is being generated by this business,” he remarked.

Meanwhile, Tom Richardson from Paradice Investment Management is bullish on Santos as well.

Richardson said he was surprised at “how little this stock had done” with being an oil and gas play, also speaking to Livewire.

“[I]t’s just they need to see the cash,” he added. “I think that’s inevitable with Santos. As much as development optionality they’ve got, there’s going to be a lot of cash coming back to shareholders and the share price will reflect it.”

The Santos share price has spiked 14% this year to date despite reversing down 12% in the past month of trade. Over the past year, it is flat.

The post ‘Need to see cash’: Why these fundies tip big things for the Santos share price appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Thursday
• How attractive is the Santos dividend right now?
• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday
• Why did the Santos share price sink 6% 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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