If you’re looking for dividend shares to buy then you may want to look at the two below that brokers are recommending.

Here’s what brokers are saying about these ASX dividend shares:

National Australia Bank Ltd (ASX: NAB)

The first ASX dividend share to look at is banking giant NAB. It could be a top option for investors after recent weakness in the sector.

Particularly given its strong position in business banking, which is expected to perform far better than retail banking in the current environment. It is for this reason that analysts at Goldman Sachs currently have a conviction buy rating and $34.26 price target on its shares.

Its analysts said: “NAB’s balance sheet mix provides the best exposure to the domestic system growth we foresee over the next 12-18 months, which should favour commercial over mortgage lending.”

As for dividends, the broker has pencilled in fully franked dividends per share of 151 cents in FY 2022 and then 168 cents in FY 2023. Based on the current NAB share price of $27.02, this equates to yields of 5.6% and 6.2%, respectively.

Transurban Group (ASX: TCL)

Another ASX dividend share to consider is toll road operator Transurban.

Morgans is positive on Transurban and currently has an add rating and $14.42 price target on its shares. Its analysts are expecting the company’s dividends to recover quickly from the pandemic as traffic returns to its key roads.

It commented: “Watch for rapid recovery in DPS alongside traffic recovery and WestConnex acquisition prospects.”

For now, Morgans is forecasting dividends per share of 37 cents in FY 2022 and then 60 cents in FY 2023. Based on the current Transurban share price, this implies yields of 2.6% and 4.3%, respectively.

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

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More reading

• Here’s 3 popular ASX shares that are trading ex-dividend next week
• Are NAB shares really offering a dividend yield above 5%?
• Should you ‘buy the dip’ in ASX 200 bank shares?
• What’s the outlook for ASX 200 bank dividends?
• Is the NAB share price about to hit the comeback trail?

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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Looking for growth shares to buy next week? Well, listed below are two growth shares that have recently been named as buys and tipped to have major upside potential.

Here’s what you need to know about them:

Dicker Data Ltd (ASX: DDR)

Dicker Data could be a growth share to buy. It is a leading technology hardware, software, and cloud distributor.

The company has been a quiet achiever over the last decade, delivering consistently solid earnings and dividend growth without much fanfare. Pleasingly, this positive form has continued this year with Dicker Data delivering a 50.5% increase in revenue to $673.6 million and a 22.7% lift in profit before tax to $23.8 million during the first quarter.

One leading broker that appears to believe this strong form can continue is Morgan Stanley. Last month, the broker retained its overweight rating and $16.00 price target on its shares. Based on the current Dicker Data share price, this implies potential upside of over 40%.

Treasury Wine Estates Ltd (ASX: TWE)

Treasury Wine could be another ASX growth share to buy. It is of course the wine giant behind popular brands such as 19 Crimes, Penfolds, and Wolf Blass.

After taking a big hit from being kicked out of China, Treasury Wine has returned to form in FY 2022. This has been driven largely by the success of its North American business.

The good news is that analysts at Morgans expect this positive form to continue. In fact, the broker said that it believes the “foundations are now in place for TWE to deliver strong double-digit growth from 2H22 over the next few years.”

Morgans has an add rating and $13.93 price target on the company’s shares. Based on the current Treasury Wine share price of $11.30, this implies potential upside of 23% for investors.

The post Here’s why brokers rate these ASX growth shares as buys appeared first on The Motley Fool Australia.

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• What I love about these 2 ASX growth shares
• Experts name 2 ASX growth shares to buy with major upside potential
• 2 blue chip ASX 200 shares Morgans rates as buys
• Despite recent volatility, brokers are bullish on the Treasury Wine share price
• The Dicker Data share price is trading at YTD lows. Here’s why

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 Dicker Data Limited. The Motley Fool Australia has positions in and has recommended Dicker Data Limited. The Motley Fool Australia has recommended Treasury Wine Estates 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 has tumbled lower with the market in 2022.

Since the start of the year, the biotherapeutics giant’s shares have lost 8% of their value.

In light of this, investors may be wondering if the CSL share price is now trading at an attractive enough level to start an investment.

Is the CSL share price in the buy zone?

According to a note out of Citi, its analysts believe that CSL’s shares are great value at the current level.

The note reveals that the broker has retained its buy rating but trimmed its price target slightly to $330.00.

This implies potential upside of 22% for investors over the next 12 months.

What did the broker say?

Citi has been looking at the plasma industry again and was pleased with what it saw.

This includes strong underlying demand for plasma products and much-improved plasma collection conditions. In light of the latter, the broker feels that the market will move on from its collections focus, which has been weighing on the CSL share price, and focus more on demand.

Citi’s analysts explained:

Recently, there have been several data points influencing our view on the plasma sector. US CMS data indicates continued price increases in immunoglobulin products. This is consistent with our expectation, as donor fees continue to remain elevated.

Underlying demand for plasma products remains strong but supply is constrained due to low plasma collection volume. With plasma collections now back to pre-pandemic levels, we expect the market to shift its focus to the strong underlying plasma product demand.

The broker expects the above to “lead to strength in the CSL share price.” Which could bode well for investors in the near future.

The post Why this broker is tipping ‘strength in the CSL share price’ appeared first on The Motley Fool Australia.

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• Brokers name 3 ASX shares to buy today
• Why did the CSL share price beat the ASX 200 on Wednesday?
• Broker names 2 of the best ASX 200 shares to buy now
• CSL share price ‘will be significantly bigger from this point’: fundie
• Top brokers name 3 ASX shares to buy next week

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 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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The BHP Group Ltd (ASX: BHP) share price has come under pressure this week following a pullback in the iron ore price.

This means the mining giant’s shares are now trading at their lowest levels in 2022.

Is the BHP share price a buying opportunity?

The team at Goldman Sachs are likely to see the pullback in the BHP share price as a buying opportunity.

Last week, the broker reiterated its buy rating with a $49.40 price target. This implies potential upside of 23% for investors over the next 12 months.

And sweetening the deal even further, the broker is forecasting a fully franked dividend yield of over 12% in FY 2022.

This stretches the total potential return on offer with the Big Australian’s shares to approximately 35% for investors.

What is Goldman saying?

Goldman Sachs has named three key reasons for its positive view on the BHP share price. This includes its current valuation relative to peers, its production growth pipeline, and its strong free cash flow generation.

Goldman explained:

1. Relative valuation: BHP to continue trading at a premium to global mining peers (~0.5x premium to global mining peers over 10-yrs) which we believe can be maintained

2. ~US$20bn copper pipeline to drive production growth and value: BHP’s major opportunity (and challenge) is offsetting copper reserve depletion and grade decline through investing in copper reserves/resources (largest globally).

3. Attractive FCF and capital returns outlook: BHP is trading on an attractive FCF/DPS yield of c. 11%/8% over the next 12-m. BHP’s minerals capex increasing to US$8-9bn by mid-decade (but below peer RIO at US$9-10bn).

All in all, this could make BHP shares a great option if you’re looking for exposure to the mining sector.

The post Broker sees 23% upside and a huge yield for BHP shares appeared first on The Motley Fool Australia.

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• Why are ASX 200 mining shares having such a dire week?
• Own BHP shares? ‘Almost unbelievable’ breakthrough could be key to miner’s climate strategy
• Here’s the BHP dividend forecast through to 2024
• Here’s why the BHP share price is in the red today
• ASX 200 midday update: Pilbara Minerals’ lithium price update, BHP tumbles

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 Goldman Sachs. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Shares in Domino’s Pizza Enterprises Ltd (ASX: DMP) have been killed in 2022. The Domino’s share price has fallen 60% from a 52-week high of $167.15 in September 2021 to $66.15 at market close on Friday.

Domino’s was among the pandemic winners on the ASX. Immediately before the crash, the Domino’s share price was trading at about $62 — a few dollars lower than today’s share price.

Then people were put into lockdown. Takeaway and delivery meals became extremely popular. Brands like Domino’s actively leveraged the pandemic to grow their business through measures such as a ‘zero contact delivery service’ to entice more customers.

Now that lockdowns are over, has the Domino’s share price simply come back down to Earth?

Domino’s grew alongside its share price during COVID-19

In a recent presentation, Domino’s outlined its growth during the pandemic and plans for future growth.

Domino’s has franchises all over the world. According to its presentation, there are currently 3,327 stores across 10 markets. Six are in Europe and four are in the Asia-Pacific region.

Over the two years of the pandemic, network sales increased by 29.5%. EBIT increased by 25.2% and the network’s store count increased by 24.3%. They’re the stats for H122 compared to H120.

What Domino’s is going to do next…

Over the long term, Domino’s is aiming for 3,600 stores in Asia-Pacific (83.8% growth) and 3,050 stores in Europe (123% growth).

The presentation described the “engine of our growth” as digital sales, with a compound annual growth rate (CAGR) of 26.75% since FY14. Online sales accounted for $557 million in sales in FY14 compared to $2.93 billion in FY21.

Customers are increasingly wanting their food delivered. In Domino’s markets, online food delivery orders in the quick service restaurant (QSR) sector are forecast to rise 46.9% by 2026, according to Statista.

The challenge of this rising trend is finding enough staff to meet the increasing demand for delivery. So, growing the labour pool is a priority.

Domino’s intends to grow its customer base by spending more on advertising, particularly television, and growing its store network.

The company says it’s also possible to reduce delivery costs by a third in every market. One way to do this is to reduce the reliance on cars to deliver food and instead use bicycles.

Domino’s acknowledged current global economic headwinds in its presentation.

“We face historic headwinds, including inflation, conflict in Europe, and currency movements, but we are focused on the long-term”.

The post Own Domino’s shares? Here’s how the company plans to grow through tough times appeared first on The Motley Fool Australia.

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More reading

• 2 beaten down ASX shares named as buys by experts
• 3 ASX shares to buy for scary times: experts
• 2 ASX growth shares to buy for when the market rebounds
• 2 top ASX growth shares with major upside potential
• Leading brokers name 3 ASX shares to buy today

Motley Fool contributor Bronwyn Allen has positions in Dominos Pizza Enterprises 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 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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It’s been a very bumpy ride for the Corporate Travel Management Ltd (ASX: CTD) share price in recent months.

This ASX 200 travel share has lost 16% of its value over June and remains down by 19% in 2022. Like many ASX travel shares, the pandemic has given this company a lot of grief over the past few years. Corporate Travel Management is still struggling with the aftershocks today.

We can see this evident in Corporate Travel’s dividend history.

This travel share used to be a strong dividend-payer on the ASX. In 2019, the company paid out 40 cents per share in dividends. That would equate to a yield of over 2% on today’s share price. But the company only doled out 18 cents per share in 2020 before cancelling its dividend entirely. As of June 2022, it has yet to resume paying dividends.

So when will Corporate Travel Management re-enter the fray as an ASX dividend share?

When will Corporate Travel shares start paying dividends again?

Well, it’s hard to say. But going off the company’s update last month, there’s a chance it could be sooner rather than later.

Last month, Corporate Travel told investors that it is anticipating its monthly revenue could reach 2019 levels by the fourth quarter of this year.

The company is aiming for earnings before interest, tax, depreciation, and amortisation (EBITDA) of $265 million when the travel industry fully recovers from COVID-19.

For a business to be able to pay out sustainable dividends, it must first be sustainably profitable. If the company’s own predictions turn out to be accurate, it could be in a place to resume dividend payments soon.

But saying that, management could instead decide to reinvest its earnings back into the business for the next few years — even if it could afford to resume dividends. Remember, a dividend comes with an opportunity cost for every business.

But we shall have to wait and see what the company does next to be sure.

In the meantime, the current Corporate Travel Management share price gives this ASX 200 travel share a market capitalisation of $2.7 billion.

The post When might Corporate Travel shares start paying dividends again? appeared first on The Motley Fool Australia.

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• Board for take-off: Brokers rate the Corporate Travel Management share price a buy
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• Down 15% in a month, is the Corporate Travel share price a bargain?

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 recommended Corporate Travel Management 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 Australian share market is home to a good number of shares that have the potential to grow strongly in the future. But is it home to any 20-baggers?

A 20-bagger is a share that provides a return 20 times greater than your original investment.

This means that if you were able to find one of these shares and invest $5,000 into it, you would turn that investment into a massive $100,000.

Whilst they are quite rare, there are plenty of examples of 20-baggers trading on the ASX today.

Chalice Mining Ltd (ASX: CHN), Race Oncology Ltd (ASX: RAC), and Vulcan Energy Resources Ltd (ASX: VUL) are three ASX shares that have generated returns of more than 2,000% over the last three years, much to the delight of their shareholders.

But that was then, and this is now. So, which ASX shares could be the next 20-baggers? While I think three years might be far too soon for this level of return, I believe the two ASX shares listed below have the potential to turn a $5,000 investment into $100,000 over the long term. Here’s why:

Life360 Inc (ASX: 360)

What it does: Life360 operates in the digital consumer subscription services market with a focus on products and services for digitally native families. Its key offering is the Life360 app, which provides location-based services, including sharing and notifications.

How it could become a 20-bagger: Life360 currently has a market capitalisation of just under $500 million. This means that its market capitalisation would grow to be $10 billion if the Life360 share price were to rise 2,000%.

While this sounds like a lot, I believe this is possible over the long term based on its leadership position in an enormous market. For example, management recently reiterated its belief that its serviceable addressable market is $55 billion globally. This comprises location sharing, crash and roadside assistance, identity theft protection, and pets and children location sharing verticals. It doesn’t include the item tracking market which the company recently entered with the acquisition of Tile.

Goldman Sachs currently values Xero Limited (ASX: XRO) at 16 times EBITDA. If we were to ascribe the same multiple to Life360, it would need to achieve EBITDA of $625 million to command a market capitalisation of $10 billion. This is a big ask but with ~38 million monthly active users (and growing) and such a huge market opportunity, I believe it is a possibility over the long term.

Nitro Software Ltd (ASX: NTO)

What it does: Nitro Software is a software company aiming to drive digital transformation in organisations around the world. Its key solution is the Nitro Productivity Suite, which provides integrated PDF productivity and electronic signature tools to customers in a market benefiting from structural tailwinds such as remote work and digitisation.

How it could become a 20-bagger: Nitro Software currently has a market capitalisation of approximately $300 million. If its shares were to rise 20 times over, this would take its market capitalisation to $6 billion.

Unlike Life360, Nitro doesn’t have a leadership position in its market. However, it is a worthy challenger to industry giant Docusign. Nitro has over 3 million licensed users and 13,000+ business customers across 157 countries. This includes over 67% of the Fortune 500 and three of the Fortune 10, which I believe is a testament to the quality of its offering.

Goldman Sachs estimates that the company has a “US$34bn TAM [total addressable market] across PDF, e-signing and workflows.” Furthermore, it highlights that “Nitro can increase its TAM penetration from 0.15% to 1.4% by FY40 implying 9 times uplift to Nitro’s current revenue base.” I believe this is achievable. And combined with the benefits of scale, I feel Nitro’s earnings have the potential to grow even quicker.

Nine times current revenue would be ~US$500 million or A$720 million. From this revenue, I believe a profit margin of at least 28% is possible, which would underpin a net profit of A$200 million and could justify a market capitalisation of $6 billion based on a P/E ratio of 30 times earnings.

Whether these forecasts prove accurate, only time will tell. However, I believe the risk/reward is favourable for long-term investors right now. Especially after 2022’s weakness in the tech sector.

The post Why I think these two ASX shares could turn $5,000 into $100,000 appeared first on The Motley Fool Australia.

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• Why ASX 200 tech shares are outperforming the market on Friday
• ASX 200 midday update: Qantas’ market update, lithium shares rebound
• Experts have named these top growth shares as buys
• 2 ASX tech shares Goldman Sachs rates as buys
• Brokers name 2 exciting small cap ASX shares to buy with 80%+ upside

Motley Fool contributor James Mickleboro has positions in Life360, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs, Life360, Inc., and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Nitro Software 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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Looking for dividend shares to buy when the market reopens? If you are, then you might want to look at the shares listed below.

Here’s why these ASX 200 dividend shares are rated as buys by analysts at Morgans:

AGL Energy Limited (ASX: AGL)

The first ASX 200 dividend share that Morgans rates highly right now is AGL. It currently has an add rating and price target of $9.92 on its shares.

The broker commented: “Despite the challenges facing the company we still see potential for strong earnings growth supported by the legacy assets and retain our ADD rating.”

And while Morgans isn’t expecting a big yield this year due to the pressures the energy company is facing, it is tipping a big rebound in FY 2023.

Morgans is forecasting fully franked dividends per share of 19 cents in FY 2022 and 65 cents in FY 2023. Based on the current AGL share price if $8.19, this will mean yields of 2.3% and 7.9%, respectively, for investors.

Macquarie Group Ltd (ASX: MQG)

Another ASX 200 dividend share that has been rated as a buy is investment bank Macquarie. Morgans has an add rating and $215.00 price target on its shares.

Although it suspects that the bank’s earnings may have peaked after a stellar performance in FY 2022, it doesn’t think this should put investors off.

Morgans commented: â€œWe anticipate some near-term earnings volatility over FY23 but we like MQG’s favourable longer-term growth profile and consistent history of delivering strong returns (~15% average ROE over time).”

As for dividends, the broker is forecasting a $7.07 per share dividend in FY 2023 and then $7.47 per share dividend in FY 2024. Based on the current Macquarie share price of $165.33, this will mean yields of 4.3% and 4.5%, respectively.

The post 2 ASX 200 dividend shares analysts rate highly appeared first on The Motley Fool Australia.

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• Can Macquarie shares deliver an attractive dividend yield AND 30% upside in 2022?
• What’s with the AGL share price today?
• What’s the outlook for ASX 200 bank dividends?
• ASX utilities shares electrifying the market as suspension begins to unwind
• Analysts name 2 top ASX 200 dividend shares to buy now

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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In this era of volatility and uncertainty, going for diversified investments like exchange-traded funds (ETFs) could make a lot of sense.

It’s hard to know which sector is going to perform next, or when the declines are going to stop.

ETFs give investors the ability to buy a whole group of shares across different sectors or different countries, depending on the particular ETF.

ETFs could be useful investments, particularly at the current lower prices. Here are two:

iShares S&P 500 ETF (ASX: IVV)

This is one of the most popular ETFs on the ASX, with a fund size of around $5 billion.

As the name suggests, it’s about investing in the S&P 500 – an index of 500 of the biggest and most profitable names that are listed in the US.

Readers may recognise many of the biggest names in the portfolio including Apple, Microsoft, Amazon.com, Alphabet, Tesla, Berkshire Hathaway, Johnson & Johnson, UnitedHealth, Nvidia, Exxon Mobil, Meta Platforms, Proctor & Gamble and Visa.

While past performance is not a reliable indicator of future performance, I think an average return per annum of around 14% over the past five years demonstrates the collective quality of the underlying businesses.

One of the attractive features of the ETF is its low management fee of just 0.03%, meaning nearly all of the returns are left in the portfolios of investors.

After a 17% drop in the iShares S&P 500 ETF unit price in 2022, it’s now at a materially cheaper price.

VanEck Video Gaming and Esports ETF (ASX: ESPO)

This is an investment focused on the video gaming and e-sports sector.

There aren’t many holdings in the portfolio – 24 at the last count – so it’s quite a concentrated portfolio. The top ten positions make up 64% of the overall weighting.

Those largest ten positions are: Tencent, Nvidia, Netease, Advanced Micro Devices, Activision Blizzard, Take-Two Interactive Software, Electronic Arts, Nintendo, Nexon and Sea.

VanEck has a bullish take on what makes this ETF attractive:

E-sports reflect the convergence of entertainment, video gaming, sports and media businesses. With an active, engaged and relatively young demographic, the stage is set for sustainable long-term growth.

By 2023, the competitive video gaming audience is expected to reach 646 million people globally.

The underlying businesses within this portfolio are generating ongoing revenue growth. VanEck says that e-sports revenue growth has increased by an average of 28% per year since 2015. The broader video gaming revenue has increased by an average of 12% per annum since 2015.

One of the ways that these businesses are collectively growing is by creating new revenue streams with e-sports through game publisher fees, media rights, merchandise, ticket sales and advertising.

According to VanEck materials, global games revenue is expected to grow by approximately 33% from US$150 billion in 2019 to US$200 billion in 2023

The post 2 quality ETFs to buy for the long-term appeared first on The Motley Fool Australia.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. 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 Activision Blizzard, Advanced Micro Devices, Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Berkshire Hathaway (B shares), Microsoft, Nvidia, Tesla, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Electronic Arts, Johnson & Johnson, NetEase, and UnitedHealth Group and has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Activision Blizzard, Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Berkshire Hathaway (B shares), Nvidia, VanEck Vectors ETF Trust – VanEck Vectors Video Gaming and eSports ETF, and iShares Trust – iShares Core S&P 500 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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The S&P/ASX 200 Index (ASX: XJO) closed up a robust 0.77% on Friday at 6,578.7 points.

In 2022, the index has dropped by around 13%, presenting ASX investors with potential new opportunities.

Top broker Goldman Sachs says new value is emerging. In a new note, the broker names its best ASX 200 picks as the market correction continues.

ASX 200 P/E ratio now 15% below 20-year average

The broker says the ASX 200 is trading at a 12.2x forward price-to-earnings (P/E) ratio, according to reporting in the Australian Financial Review (AFR).

Goldman Sachs analysts Matthew Ross, Bill Zu, and Tony Wu say that’s 15% below the 20-year average.

According to the note:

From a valuation perspective, our global strategists believe that market pricing is more consistent with a mild recession than an average or deep recession, a view we share in the context of the Australian market.

While we expect multiples on most ‘growth’ stocks to continue to unwind, a growing number of these names have now de-rated so significantly that they have fallen out of our “High P/E” screen and now trade at significant discounts to their five-year averages.

So, which ASX 200 shares does Goldman like?

Goldman’s picks of the ASX 200 are A2 Milk Company Ltd (ASX: A2M), Aristocrat Leisure Limited (ASX: ALL), ARB Corporation Limited (ASX: ARB), Blackmores Limited (ASX: BKL), Breville Group Ltd (ASX: BRG), Domain Holdings Australia Ltd (ASX: DHG), EML Payments Ltd (ASX: EML), Pinnacle Investment Management Group Ltd (ASX: PNI), and Reece Ltd (ASX: REH).

Goldman notes that the impact of higher interest rates and slowing economic growth are yet to feed into consensus earnings revisions.

The broker said investors should keep in mind that while long-duration growth assets have de-rated, they remain expensive relative to the current level of interest rates.

Goldman says commodity stocks are trading well below all prior valuation troughs, and they comprise a uniquely large component of the ASX 200.

It also said ASX shares offer slightly less value than bonds compared to before the sell-off.

The post 9 ASX 200 shares now trading at ‘significant discounts’: broker appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX shares today
• 2 cheap ASX 200 shares to buy that no one talks about: Glenmore
• Experts have named these top growth shares as buys
• 3 high-quality ASX 200 shares trading at 52-week lows right now
• Why Blackmores, Lake Resources, St Barbara, and Zip shares are dropping

Motley Fool contributor Bronwyn Allen 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 EML Payments, Goldman Sachs, and PINNACLE FPO. The Motley Fool Australia has positions in and has recommended EML Payments and PINNACLE FPO. The Motley Fool Australia has recommended A2 Milk, ARB Corporation Limited, and Blackmores 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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