Fund manager Wilson Asset Management (WAM) recently identified two top small-cap ASX shares in one of the portfolios it manages that look promising.

WAM operates several listed investment companies (LICs). Some focus on larger companies like WAM Leaders Ltd (ASX: WLE) and WAM Capital Limited (ASX: WAM).

There’s also one called WAM Microcap Limited (ASX: WMI) which focuses on small-cap ASX shares with a market capitalisation under $300 million at acquisition.

WAM says WAM Microcap targets “the most exciting undervalued growth opportunities in the Australian microcap market”.

These are the two small-cap ASX shares the fund manager outlined in its most recent monthly update:

Ridley Corporation Ltd (ASX: RIC)

Ridley is described as Australia’s largest commercial provider of high-performance animal nutrition solutions.

The fund manager said that in June, Ridley Corporation attracted attention from other companies looking to purchase its shares after speculation that AGR Partners, a substantial shareholder of the business, is looking to exit.

At the end of May, Ridley Corporation announced its FY23 to FY25 growth plan which supports the ongoing earnings momentum of the business.

WAM said the framework for Ridley Corporation’s capital allocation under its growth plan is expected to “allow the company to deliver a total shareholder return (TSR) of over 15% per annum” and an increase in the indicative dividend payment ratio from between 40% to 60%, to 50% to 70% of net profit after tax (NPAT).

The fund manager said that it remained “confident” in the outlook for Ridley Corporation and its CEO Quinton Hildebrand who, in WAM’s view, has “executed strongly” to date by divesting unprofitable business units and structurally lowering costs, helping organic growth.

It must be noted that WAM recently sold shares on 19 July 2022, but it has been regularly buying (and selling) shares of Ridley during 2022.

Close The Loop Inc (ASX: CLG)

This ASX small cap share is described as an end-to-end solutions provider from design and manufacturing through to the collection and recycling of waste products across a variety of markets.

WAM noted that the company provided a trading update ahead of its first investor day and presentation. In that trading update, the company upgraded its FY22 revenue forecast to $82 million and increased its earnings before interest, tax, depreciation and amortisation (EBITDA) forecast to $13.6 million.

What caused this upgrade? The fund manager explained it was due to “strong organic growth across all divisions”, particularly in the US and Europe packaging and recycling segment.

WAM pointed out that there is a “strong outlook” for the small-cap ASX share, with an annual revenue run-rate of over $100 million. Growth is expected to be further increased through add-on acquisitions. Non-binding term sheets had been signed for three acquisitions. The company recently announced the acquisition of Alliance Paper.

The fund manager said Close The Loop is “under-researched with no broker coverage and over time, this provides a catalyst to drive a further share price re-rating.”

The post 2 small-cap ASX shares this fund manager is ‘confident’ about appeared first on The Motley Fool Australia.

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More reading

• Here’s why I think these ASX shares are top ideas to buy right now
• Broker gives its verdict on the Xero share price following new product launch
• These are the 10 most shorted ASX shares
• ‘Recession-like levels’: Why ASX retail shares could still be in for a bumpy ride
• Why did the Zip share price rocket 159% in July?

Motley Fool contributor Tristan Harrison has positions in WAM MICRO FPO. 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 Xero Limited (ASX: XRO) share price was on form last week and pushed higher.

This appears to have been driven by a rebound in the tech sector and the launch of new offering from the cloud accounting platform provider.

In respect to the latter, Xero has announced the launch of Xero Go.

What is Xero Go?

Xero Go is a new freemium mobile app in the UK that has been designed to serve the increased number of sole traders over the last two decades.

Xero notes that there are approximately 2.6 million sole traders in the UK. Its new freemium app will make it easier for them to access accounting software, expanding Xero’s offering to provide a more cost-effective entry point into cloud accounting and digital record-keeping.

Xero’s chief product officer, Anna Curzon, explained:

This is a product that caters to the entry-level accounting needs of the self-employed – a growing area of demand. So we wanted to offer early access to a product that caters to the basic accounting needs of self-employed businesses in the UK, the number of which has increased over the last 20 years, and also those of their advisors.

Xero Go helps businesses streamline the manual, time-consuming elements of being self-employed, while also providing accountants with accurate, clean financial data they need to service these clients.

The company also notes that Xero Go will support the self-employed to get ready for one of the largest changes to the UK tax system — Making Tax Digital for Income Tax Self Assessment. That is due to commence in April 2024 and will require self-employed individuals earning above £10,000 to keep digital records of income and expenses on compatible software.

Broker reaction

The team at Citi has been looking at the launch and see both positives and risks from it. Citi commented:

A key question post the announcement of Xero’s new product aimed at sole traders, Xero Go, is whether it represents upside or downside to UK revenue forecasts given it is a lower ARPU offering.

Our analysis suggests that Xero Go represents upside to subscriber forecasts but is neutral from a revenue perspective when compared to current consensus forecasts due to the lower ARPU. However, there could be downside risk to long-term/terminal ARPU assumptions from a mix perspective but would depend on attach rates of add-ons.

Nevertheless, Citi remains bullish on the Xero share price. It has retained its buy rating and $108.00 price target.

This implies potential upside of ~16% for investors over the next 12 months.

The post Broker gives its verdict on the Xero share price following new product launch appeared first on The Motley Fool Australia.

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More reading

• 2 excellent ASX tech shares experts say are buys
• How are ASX 200 tech shares performing on Wednesday?
• Top broker rates Xero share price a buy with 20% upside
• Why are ASX 200 tech shares having such a lousy start to the week?
• Is the Xero share price heading back over $100?

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 Xero. The Motley Fool Australia has positions in and has recommended Xero. 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) stays as the most shorted ASX share with 15.5% of its shares held short. This was down slightly week on week. Flight Centre upgraded its guidance last week, much to the disappointment of short sellers.
• Betmakers Technology Group Ltd (ASX: BET) has seen its short interest rebound to 12%. Valuation concerns appear to be driving this high level of short interest.
• Nanosonics Ltd (ASX: NAN) has short interest of 11.6%, which is down slightly week on week once again. Last week, this infection prevention company’s shares tumbled following the release of a business update.
• Block Inc (ASX: SQ2) has short interest of 11.5%, which is up slightly week on week once again. This payments company’s shares have been hit hard this year as investors sell out of unprofitable tech stocks. Short sellers appear to believe they can fall further.
• Lake Resources N.L. (ASX: LKE) has short interest of 10.4%, which is up meaningfully week on week. Short interest appears to have been building since the sudden exit of its CEO and the short attack from J Capital.
• EML Payments Ltd (ASX: EML) has short interest of 9.5%, which is up week on week. Last week this payments company’s shares sank deep into the red following a disappointing update on regulatory issues facing its European operations.
• Regis Resources Limited (ASX: RRL) has short interest of 9%, which is down slightly week on week. Short sellers have been targeting this gold miner’s shares due to production issues.
• Zip Co Ltd (ASX: ZIP) has seen its short interest rise to 8.3%. Some of the newer short sellers may have regrets about targeting this buy now pay later provider. Its shares more than doubled during July.
• PolyNovo Ltd (ASX: PNV) has seen its short interest ease to 8.2%. This medical device company’s shares jumped at the end of last week after naming a new and experienced CEO.
• Kogan.com Ltd (ASX: KGN) has seen its short interest soften again to 8.2%. Short sellers will have been devastated to see this ecommerce company’s shares shoot ~50% higher on Thursday last week following the release of a trading update. That update may have even caused a short squeeze judging by the volume of trades.

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

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More reading

• ‘Recession-like levels’: Why ASX retail shares could still be in for a bumpy ride
• Why did the Zip share price rocket 159% in July?
• These were the best performing ASX 200 shares in July
• These were the worst performing ASX 200 shares in July
• Here are the top 10 ASX 200 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 positions in and has recommended Betmakers Technology Group Ltd, Block, Inc., EML Payments, Kogan.com ltd, Nanosonics Limited, POLYNOVO FPO, and ZIPCOLTD 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 and Flight Centre Travel 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 ASX retail share sector is coming under increasing scrutiny as inflation ramps up and households start to feel the bite.

There are various diverse retailers on the ASX, such as Wesfarmers Ltd (ASX: WES), JB Hi-Fi Limited (ASX: JBH), Universal Store Holdings Ltd (ASX: UNI), Adairs Ltd (ASX: ADH), Nick Scali Limited (ASX: NCK), Temple & Webster Group Ltd (ASX: TPW), Kogan.com Ltd (ASX: KGN), Premier Investments Limited (ASX: PMV), and City Chic Collective Ltd (ASX: CCX).

However, all are exposed to how much Australian consumers are deciding to spend at their stores and on their websites.

Recent analysis from AMP Limited (ASX: AMP), looking at Australian Bureau of Statistics (ABS) data, shows Australian retail spending growth slowed in June to just 0.2% for the month. AMP’s expectations were for a 0.3% lift. The figure also missed consensus forecasts for growth of 0.5%.

However, AMP noted that annual growth in retail spending still remains high at 12%, though that reflects strong spending in previous months, especially in late 2021 and early 2022.

AMP said that annual retail spending is expected to slow from here as it weakens compared to high levels over 2021 and 2022. A pullback to the long-term trend growth rate was “inevitable”, it said, especially as interest rates increase.

Why is retail spending slowing?

AMP named five factors contributing to slowing growth that could impact many ASX retail shares.

First, interest rate hikes could be a factor. The June data reflects two interest rate hikes totalling 0.75% from the Reserve Bank of Australia — a 0.25% rise in May and a 0.5% increase in June.

Next, strong retail spending over the past two years brought forward demand.

Third, consumers are spending money on services rather than retail goods as the economy and borders have opened up.

AMP also noted “poor consumer sentiment”. According to a Westpac Banking Corp (ASX: WBC) and Melbourne Institute survey, consumer confidence is at “recession-like levels”.

Finally, a high level of inflation is leading to a fall in consumer purchasing power.

What next?

AMP suggests that the above factors will persist in the coming months. In turn, this means more potential downside for consumer spending, affecting ASX retail shares.

It said retail volumes “will start to decline as spending slows and inflation is high”. At last report, CPI inflation for June was 1.8%.

Recent share price performances

Movements in share prices have been mixed for businesses in recent times.

Since the beginning of 2022, many ASX retail shares have fallen heavily, yet they have recovered notable ground over the past month.

As an example, the Temple & Webster share price is down 50% this year, but up 59% in the past month (albeit from a low point).

Meantime, the Adairs share price is down 42% for the year, but up 26% in the last month.

Similarly, the Kogan share price is down almost 48% for 2022, yet up 66% over the last month.

Following the pattern, the Wesfarmers share price is down 22% this year, but it is up 11% over the past month.

Some numbers may seem dramatic, but if a share price falls from $100 to $10, it has dropped 90%. If it then goes from $10 to $15, that counts as a rise of 50%.

Investors who have been buying may be thinking the bottom of the decline was too pessimistic about the future for ASX retail shares.

The post ‘Recession-like levels’: Why ASX retail shares could still be in for a bumpy ride appeared first on The Motley Fool Australia.

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More reading

• Top ASX shares to buy in August 2022
• From Cotton On to Catch: Wesfarmers’ plans to put its acquisition back on track
• 3 ASX All Ords shares having a stellar end to the week
• Could ASX online retail shares be getting a boost out of inflation?
• 3 ASX 300 retail shares majorly cashing in on Thursday

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 ADAIRS FPO, Kogan.com ltd, and Temple & Webster Group Ltd. The Motley Fool Australia has positions in and has recommended ADAIRS FPO, Kogan.com ltd, and Wesfarmers Limited. The Motley Fool Australia has recommended Premier Investments Limited, Temple & Webster Group Ltd, and 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 Zip Co Ltd (ASX: ZIP) share price was an incredible performer last month.

During the month of July, the buy now pay later (BNPL) provider’s shares rocketed a whopping 159% higher.

What happened to the Zip share price?

There appear to have been a few catalysts for the stellar rise by the Zip share price.

One was news that the company has decided to pay an US$11 million break fee to scrap its merger with rival Sezzle Ltd (ASX: SZL).

The market was never quite sure about the deal and with management expecting that going solo will help it become profitable sooner, the Zip share price unsurprisingly reacted positively to the news.

What else?

Also giving the company’s shares a boost was a rebound in the tech sector.

While the benchmark ASX 200 index rose an impressive 5.7% last month, the S&P ASX All Technology index vastly outperformed this with its gain of 16.2%.

Investors appear to have rotated back into the sector on the belief that tech shares like Zip had been oversold.

And so with the Zip share price still down 74% in 2022 even after last month’s heroics, it wasn’t overly surprising to see the company outperform its peers. Especially with its outlook improving following the Sezzle merger termination.

Quarterly update

Finally, the release of a reasonably solid quarterly update also gave its shares a lift.

For the three months ended 30 June, Zip reported a 27% increase in quarterly revenue over the prior corresponding period to $160.1 million. This was driven by strong results across its consumer operations in the United States, Australia, New Zealand and Rest of World despite growth being tempered by a deterioration in consumer sentiment and adjustments to risk settings.

This means that for the full-year, Zip delivered a 54% increase in revenue to approximately $621.5 million.

Management also revealed further steps that it believes will help reduce its global cost base. This includes closing down Zip Business and the Pocketbook app, as well putting its planned crypto and investment products on the back-burner. It may even exit the UK and other Rest of the World businesses.

All in all, a great month for shareholders. Here’s hoping that August is just as kind to Zip’s shares.

The post Why did the Zip share price rocket 159% in July? appeared first on The Motley Fool Australia.

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More reading

• These were the best performing ASX 200 shares in July
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Why BrainChip, Fortescue, PointsBet, and Zip shares are dropping
• ASX 200 midday update: Zip crashes, PointsBet tumbles
• The big dipper: Zip share price dives 24% in wild end-of-week ride

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 ZIPCOLTD FPO. 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 AGL Energy Limited (ASX: AGL) dividend will be in focus this reporting season. After dividend cuts in the last years, could there be a turnaround in the upcoming result?

AGL’s profit has been hurting. Dividends usually track the direction of net profit after tax (NPAT), as a dividend is funded by previous profit generation.

Dividends can be an attractive way to reap the rewards of a company’s profit each year.

But, let’s look at what energy giant AGL’s dividend is expected to be.

Dividend projections

In the FY22 half-year result, AGL paid an interim dividend of 16 cents per share. That was a reduction from the 41 cents per share FY21 interim dividend.

The FY21 final dividend from AGL was 34 cents per share. The total dividend per share for FY21 was 75 cents per share.

On CMC Markets, the estimate for the total FY22 dividend per share is 23.9 cents. That implies a final dividend in the single-digit cents, which would be a very large decrease.

A total dividend per share of 23.9 cents would be a decrease of almost 70%.

Plenty of brokers like Morgans and UBS have somewhat similar estimates for the dividend from the energy business.

However, Credit Suisse thinks the final FY22 dividend could be similar to the interim dividend.

AGL dividend growth expected

All the brokers mentioned above are expecting AGL to increase its annual dividend per share in FY23.

The dividend estimate on CMC Markets implies that the dividend could more than double in FY23. The projected dividend in FY23 is 48.5 cents per share, which would be a dividend yield of 5.8% at the current AGL share price.

Another AGL dividend increase is expected in FY24. That estimate is 64.6 cents per share, which would be a dividend yield of 7.7%.

Is the AGL share price a buy?

Morgans rates the energy business as a buy, with a price target of $9.67 as profit is expected to recover. That implies a possible rise of around 15% over the next 12 months.

UBS is neutral on the business, with a price target of $8.35. That implies they expect the AGL share price to be flat over the next year.

Credit Suisse has an outperform rating on AGL, with a price target of $10.80. That suggests a possible rise of almost 30% after price rises for customers were more than expected.

AGL share price snapshot

Since the beginning of 2022, AGL shares are up 33% as the company became a takeover target.

At the current share price, AGL has a market capitalisation of $5.63 billion.

The post Can the AGL dividend bounce back this earnings season? appeared first on The Motley Fool Australia.

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• What’s been impacting the AGL share price this week?
• ‘Elevated prices’ give AGL share price a shot at 26% upside: JP Morgan
• These were the best (and worst) performing ASX 200 sectors of FY22
• Own ASX 200 energy shares? Retailers could hit back on AEMO fees
• Top brokers name 3 ASX shares to buy next week

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 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 to boost your income with some dividend shares, then the two listed below could be worth considering.

Analysts have recently named these ASX 200 dividend giants as buys. Here’s what you need to know about them:

BHP Group Ltd (ASX: BHP)

BHP could be an ASX 200 dividend share to buy if you’re not averse to investing in the resources sector.

It is of course one of the world’s largest mining companies with a collection of world class operations across a number of commodities and geographies.

The team at Citi are very positive on BHP and have previously highlighted the significant free cash flow it is generating from its operations.

It expects this free cash to underpin fully franked dividends per share of $4.32 in FY 2022 and then $3.77 in FY 2023. Based on the current BHP share price of $38.68, this implies yields of 11.1% and 9.7%, respectively.

Citi also sees decent upside for the Big Australian’s shares. It currently has a buy rating and $44.50 price target on them.

Westpac Banking Corp (ASX: WBC)

Another ASX 200 dividend share that could be a quality option for income investors is banking giant Westpac.

That’s the view of the team at Morgan Stanley which retained its outperform rating and $22.30 price target on the bank’s shares last week.

And while this price target means only minimal upside for the shares of Australia’s oldest bank, it doesn’t stop the dividends from being any less attractive.

Morgan Stanley is expecting Westpac to pay fully franked dividends per share of $1.25 in FY 2022 and $1.30 in FY 2023. Based on the current Westpac share price of $21.51, this will mean yields of 5.8% and 6%, respectively, over the next two years.

The post Experts name 2 ASX 200 dividend giants to buy appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Monday
• ‘Raises a whole lot of issues’: Which ASX 200 banks are still funding new fossil fuel projects?
• Guess which ASX 200 bank has been revealed as the world’s longest dividend-paying share
• Why is the BHP share price gaining ground today?
• Why this ASX investment company dumped NAB for Westpac shares

Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. 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 Rio Tinto Limited (ASX: RIO) share price has been falling in recent weeks. It’s down by around 18% since 8 June 2022.

The ASX mining share earns a dominant portion of its profit from iron ore.

Like most other commodity ASX shares, Rio Tinto shares are heavily affected by changes in the resource price because this can have sizeable impacts on the potential profitability of the business.

Indeed, the iron ore price has been falling in recent weeks as well.

One of the main factors that may have been catching investor attention has been the formation of a Chinese entity, the China Mineral Resources Group. The concern is that this body may seek to bulk buy iron ore for a number of major players in China, exerting influence to purchase iron ore at a lower price. This could certainly affect many ASX mining shares.

But it seems Rio Tinto isn’t particularly concerned by this development.

Rio Tinto boss responds

Rio Tinto CEO Jakob Stausholm commented on the China Mineral Resources Group during an earnings call about the company’s 2022 second quarter:

Look, I think we need to step back and figure out what is facts and what is rumours. I mean, we all know that there was an inaugural meeting of this entity, the day before yesterday. How they will act in the market is rumours. And, and I don’t want to speculate on that. I have no particular concern. We have worked for the last 50 years successfully with China for the benefit of Rio Tinto and I believe we have also been helpful in China developing the steel industry. So, I’m very confident that will continue.

But, it’s not as though Rio Tinto, BHP Group Ltd (ASX: BHP), and Fortescue Metals Group Limited (ASX: FMG) are tiny businesses with no market power and no ability to alter their plans.

Responding to whether the formation will lead Rio Tinto to change its strategy and invest more heavily in Australia, Stausholm said:

We are not changing the thinking position within Rio Tinto based upon the market rumours about this, so, no, I cannot see that linkage.

FY22 half-year earnings recap

Rio Tinto delivered its report for the six months to 30 June 2022.

It said that net cash generated from operations fell 23% to US$10.5 billion. Free cash flow dropped 30% to US$7.15 billion. The underlying earnings before interest, tax, depreciation and amortisation (EBITDA) declined 26% to US$15.6 billion.

As a result of the profit decline, the ordinary dividend was reduced to US$2.67 per share, a drop of 29%.

Rio Tinto share price snapshot

Over the last month, the Rio Tinto share price has dropped 2.5%. However, over the past six months, Rio Tinto shares have shed 12%.

The post Own Rio Tinto shares? Why CEO has ‘no particular concern’ over China and iron ore price appeared first on The Motley Fool Australia.

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More reading

• ‘Not immune’: How Rio Tinto shares are feeling the sting of inflation
• Broker tips 26% upside for Rio Tinto share price post-results
• ASX 200 midday update: Rio Tinto drops, tech shares jump, Macquarie impresses
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Motley Fool contributor Tristan Harrison has positions in Fortescue Metals Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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ASX dividend shares could be the answer for income-seeking people who want to boost their investment income.

Many companies are able to pay a dividend and invest in their businesses for more growth over the long term.

However, dividends are definitely not guaranteed. Share prices can up and down during periods of volatility. Profit can also move quite a bit year to year, depending on what’s happening in the economy and what’s happening within the company.

I like that with that cash dividend payments, we can decide to do whatever we want with the money. We can take up a dividend reinvestment plan (DRP), use the cash to invest in other ASX shares, save it, or spend it.

Let’s have a look at a couple of ideas that could be attractive for dividends in the next few years.

Accent Group Ltd (ASX: AX1)

Accent is one of the leading footwear retailers in Australia. It sells brands it owns as well as ones where it acts as the distributor.

Some of the brands it’s responsible for include CAT, Dr Martens, Glue Store, Hoka, Henleys, Nude Lucy, Skechers, The Athlete’s Foot, and Vans.

Let’s look at the potential dividends for the next couple of financial years, according to estimates on CMC Markets.

In FY22, which has already finished (but the final dividend hasn’t been declared), Accent is expected to pay an annual dividend of 5 cents per share. That translates into a potential grossed-up dividend yield of 5.4%.

Accent is expected to achieve dividend growth in FY23 and FY24.

In FY23, the business is expected to pay an annual dividend per share of 9.2 cents, translating into a grossed-up dividend yield of 10%.

In FY24, the ASX dividend share is expected to pay a dividend of 11.2 cents per share. That would be a grossed-up dividend yield of 12.2%.

The business is hoping to grow its profit through store rollouts for different brands, grow its online sales, work with quality brands, and so on.

I think longer-term dividend growth and profit growth could make it an attractive option at this price.

Duxton Water Ltd (ASX: D2O)

Duxton Water is a pretty unique business on the ASX. It owns a portfolio of water entitlements which it can then provide to Australian farmers. Water leases can be for various lengths of time, including for the long term as well as forward allocation contracts and spot allocation supply.

The business says that 67% of its permanent water value is leased to Australian farming businesses. That accounts for 86% of the company’s high-security portfolio. The weighted average lease expiry is 1.8 years, or 4.9 years including renewal options.

Duxton Water recently paid its tenth consecutive and increasing dividend to shareholders of 3.2 cents per share. It’s also paying a dividend every six months.

The ASX dividend share said “with the company’s high percentage of leased entitlements and visible revenue streams”, it is able to provide growing dividends.

It’s expecting to pay dividends of 6.7 cents per share for FY22 (which, for Duxton, is based on the calendar year) and 7.1 cents per share in FY23.

That means the 2022 grossed-up dividend yield is expected to be 5.7% while, in 2023, the grossed-up dividend yield is expected to be 6%.

I like this business as it provides interesting diversification, a good yield, and growing income.

The post I think these 2 ASX dividend shares are buys for income in August appeared first on The Motley Fool Australia.

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More reading

• Leading brokers name 3 ASX shares to buy today
• Why Accent, Humm, IAG, and Webjet shares are dropping
• Why is the Accent share price sinking 7% today?
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• Analysts name 2 ASX dividend shares to buy with 4%+ yields

Motley Fool contributor Tristan Harrison has positions in DUXTON FPO. 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 Accent Group. 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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Brokers are always on the lookout for ASX shares that could be opportunities to buy. And, certainly, August could be the month to pounce on the ideas that have just been named as buys.

Share prices are always changing and updates are regularly flowing from businesses. This can change whether experts think they are a buy, hold, or sell.

No one can truly know what a share price is going to do next week or next month. But, investors can make a judgement of whether they believe a share price is undervalued or not.

Brokers like to put a ‘price target’ on a business. That’s where the broker thinks the share price will be in 12 months’ time.

Audinate Group Ltd (ASX: AD8)

Audinate is a business that offers the Dante IP networking solution. It’s described as the worldwide leader and is “used extensively in the professional live sound, commercial installation, broadcast, public address and recording industries”. Dante replaces traditional analogue cables by transmitting synchronised AV signals across large distances to multiple locations at once, using just an ethernet cable.

The broker Morgan Stanley currently rates Audinate as a buy, with a price target of $9. It also wants to see the company’s full FY22 result.

But it noted the preliminary numbers for FY22 from the ASX share and believes this bodes well for FY23.

Audinate reported that revenue was up 33.4% to US$33.4 million. The gross profit margin was 74.7%. FY22 earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to be between A$3.8 million to $4.3 million (up from $3 million in FY21).

Improved chip supplies allowed unmet demand from the FY22 third quarter to be delivered in the FY22 fourth quarter, the company said.

Corporate Travel Management Ltd (ASX: CTD)

Corporate Travel is one of the world’s largest businesses specialising in corporate travel.

The broker Macquarie recently rated the ASX share as ‘outperform’ with a price target of $20.80. That’s a potential upside of around 10%.

Macquarie recognises the sector is recovering from COVID-19 impacts. However, there are also some issues such as more expensive plane tickets and airlines reducing their number of flights.

The broker thinks that the ASX share has a significant number of clients, such as in healthcare and government, that should continue to need the company’s services.

Macquarie thinks that Corporate Travel Management’s earnings are going to jump in FY23.

Based on the profit estimate for the 2023 financial year, the Corporate Travel share price is valued at 25 times FY23’s estimated earnings, according to Macquarie.

The post Brokers just rated these 2 ASX shares as buys for August appeared first on The Motley Fool Australia.

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More reading

• Audinate share price soars 5% as revenue thrives
• Top brokers name 3 ASX shares to buy today
• Here are the top 10 ASX 200 shares today
• Why are Flight Centre, Webjet, and other ASX travel shares sinking today?
• ASX 200 midday update: Brickworks higher, IAG drops on prelim results, Zip rockets

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 AUDINATEGL FPO. The Motley Fool Australia has positions in and has recommended AUDINATEGL FPO. The Motley Fool Australia has recommended Corporate Travel Management Limited and 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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