Although the tech sector has rebounded recently, it is still down materially since the start of the year. For example, the S&P ASX All Technology index remains down 30% in 2022.

While this is disappointing, it has dragged a number of ASX tech shares down to very attractive levels.

Two such shares are listed below. Here’s why experts rate them highly at present:

Life360 Inc (ASX: 360)

The first ASX tech share to look at is Life360. It is the company behind the world’s leading real time, location-sharing app which is used by over 30 million users.

In addition, the company has bolstered its offering with acquisitions of companies involved with wearables and items tracking. This provides Life360 with cross-selling opportunities to its massive user base.

And while Life360 isn’t yet profitable, it does have a hefty cash balance which is expected to be more than sufficient to support it through to breakeven.

Bell Potter is bullish on Life360. It has a buy rating and $7.50 price target on the company’s shares. The broker commented:

Life360 develops and delivers a mobile app for families – called Life360 – that provides communications, driving safety and location sharing. The company adopts a freemium model to attract customers but has been successfully converting a portion of these customers to paying subscribers over the last several years by providing valuable features. The company has also recently made two acquisitions – Jiobit and Tile – so that now it not only connects and protects people but also pets and things. Yes Life360 is currently not profitable but is expected to be operating cash flow positive from 4Q2023 and has more than sufficient cash to fund its operations till then.

Xero Limited (ASX: XRO)

Another ASX tech share that could be a top option for investors is Xero.

It is a cloud accounting platform provider which has been growing its subscriber base at a strong rate for many years. But despite now having ~3.3 million subscribers globally, this is only a fraction of its estimated market opportunity of 45 million subscribers.

The team at Goldman Sachs is very positive on Xero and believes it is well-placed to deliver strong gross profit growth in the coming years. Even in this tough operating environment. As a result, it has a buy rating and $113.00 price target on its shares. The broker commented:

While noting that the near term remains robust, we do acknowledge the risk of higher churn from SME business challenges and recent price increases. Nevertheless, we see Xero as well-placed to navigate this uncertainty given the stickiness & importance of its software, and lower levels of churn vs. AU overall. We revise FY23-25 GP [to 22%] to reflect FX and higher churn/ARPU growth (price increases).

The post 2 excellent ASX tech shares experts say are buys appeared first on The Motley Fool Australia.

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

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

More reading

• 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?
• 2 ASX growth shares that analysts love
• Is the Xero share price heading back over $100?

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 Life360, Inc. and 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.

from The Motley Fool Australia https://ift.tt/beIvLC0

ASX bank shares have been turbulent so far this year. After starting in the green, a wave of macroeconomic crosscurrents weighed on the sector, resulting in widespread losses.

For Westpac Banking Corporation (ASX: WBC), the story has been no different. Its share price has gained less than 1% year to date, since falling off highs of $24 early in June. The bank closed on Wednesday at $21.41 a share.

For fellow ‘big four’ banking giant, National Australia Bank Ltd (ASX: NAB), the picture is a little more positive. Its share price has climbed more than 11% this past month, extending gains to around 4.6% this year to date.

Investment manager makes the switch

Yet, portfolio managers at Amcil Ltd (ASX: AMH) recently dumped their NAB position, according to the investment company’s preliminary annual results.

Amcil is a listed investment company (LIC) that manages a concentrated equity investment portfolio of ASX shares.

The company made a switch in its allocation of ASX banks. It said the “…transaction saw a switch in our major bank investments, with Westpac replacing National Australia Bank, primarily for reasons of relative valuation”.

Westpac trades at 15.36 times trailing P/E whereas NAB is priced at 14.93 times trailing P/E. Each share has an earnings yield of roughly 6.5%.

Amcil realised $14.7 million in proceeds from the transaction, whereas it purchased $14.07 million in Westpac equity.

Those weren’t the only changes the portfolio managers made. They added seven new companies throughout the period, including names such as Netwealth Group (ASX: NWL) and Domino’s Pizza Enterprises Ltd (ASX: DMP).

They also disposed of Xero Ltd (ASX: XRO), Sydney Airport (ASX: SYD), and Ramsay Healthcare Ltd (ASX: RHC).

As for its projections moving forward, Amcil notes the impending headwinds looming on the horizon:

The equity market impact of higher inflation and interest rates is moving from a focus on valuation multiples, to concern over the outlook for corporate earnings. Cost-of-living pressure for consumers is driving many economic indicators sharply lower, a necessary condition for bringing inflation back to more sustainable levels.

The ability of companies to grow their market share against weaker competitors, pass on cost inflation in higher prices to preserve profit margins and rely on balance sheet strength to navigate volatile trading conditions will be particularly important in the year ahead.

Amcil is down almost 17% this year to date and 12% lower for the year.

The post Why this ASX investment company dumped NAB for Westpac shares appeared first on The Motley Fool Australia.

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

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

More reading

• Westpac share price on watch following market update
• Should investors buy NAB shares for the dividends? Here’s what I think
• Here are 2 ASX 200 dividend shares to buy according to experts
• Brokers rate these ASX dividend shares as buys
• Own Westpac shares? Why the major bank could soon make a crypto splash

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 positions in and has recommended Netwealth and Xero. The Motley Fool Australia has positions in and has recommended Netwealth and Xero. The Motley Fool Australia has recommended Dominos Pizza Enterprises Limited, Ramsay Health Care Limited, 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.

from The Motley Fool Australia https://ift.tt/7Nyjmn3

As difficult as this year has been for ASX shares, other assets have suffered greatly too.

Whether you possess cryptocurrency, real estate, or even bonds, the chances are you’ve suffered losses in 2022.

Even for long-term investors, this is undoubtedly distressing.

But there is a bright side to the bear market, according to one expert.

Potential returns have actually risen in 2022

Applying some conservative assumptions, the team at AMP Ltd (ASX: AMP) projected what returns would be like for ASX shares and other assets over the next five to 10 years.

And the findings were surprising.

Using this model, the return potential dipped below 5% in late 2020. But this year, in troubled times, that has risen to 7% per annum.

“This is partly due to a 1% higher medium-term inflation assumption, but the rest is due to the rise in interest rates, bond yields and yields on assets including shares over the last year,” said AMP chief economist Dr Shane Oliver in a blog post.

“This is the silver lining to the cloud — or rather storm — that has hit investment markets.”

This goes to show how a dip in ASX shares presents excellent buying opportunities.

“Bear markets are painful and are hard to predict, but they do push up the medium-term return potential of shares and so provide opportunities for investors.”

It seems a minority of Australian investors are taking advantage of the current downturn.

According to research from comparison site Finder, 7% of Australians are investing “more adventurously” than they were six months ago.

According to Finder stock expert Kylie Purcell, for many younger investors, this could be their first experience of a bear market.

“Investing in shares during a market downturn can be daunting, especially for people with more aggressive portfolios or who have high-growth super funds,” she said.

“[But] Warren Buffet said that it is wise for investors to be ‘fearful when others are greedy, and greedy when others are fearful’.”

ASX shares are winners

Oliver surmised that ASX shares, due to their high dividend yields, stacked up well for the coming few years. Asian stocks were his pick for capital growth potential.

Return from bonds would remain poor and real estate would remain depressed due to rising interest rates.

He did have a caveat for his return projections.

“The main downside risk to our medium-term projections is that inflation trends even higher driving a further trend rise in interest rates, bond yields and yields on other assets (including property & infrastructure), resulting in an ongoing drag on capital growth.”

Oliver implored investors to “have reasonable return expectations” for the coming period.

“Interest rates and investment yields are still historically low so [it’s] unreasonable to expect sustained double-digit returns.”

Investors should concentrate on acquiring investments with a certain characteristic, he added.

“Focus on assets with decent sustainable income flow as they provide confidence regarding future returns.”

The post Here’s the good news about bear markets appeared first on The Motley Fool Australia.

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

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

More reading

• The AMP share price has surged 9% so far this month. Can it keep going?
• ‘Ready to compete’: Will AMP seek out new opportunities or stick to its knitting?
• Own AMP shares? CEO touts its ‘digital bank’ status in competitive landscape
• ‘CBA and Westpac are too big’: One fund manager’s take on the future of ASX 200 bank shares
• AMP share price in focus as Mirvac wins control of $7.7 billion office fund

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.

from The Motley Fool Australia https://ift.tt/yJrFaz4

Ask A Fund Manager

The Motley Fool chats with the best in the industry so that you can get an insight into how the professionals think. In this edition, Alto Capital investment advisor Tony Locantro talks about why he loves three ASX shares in particular and his biggest regret in investing.

Cut or keep?

The Motley Fool: You’ve mentioned Radiopharm Theranostics Ltd (ASX: RAD) in the past, but it has now dropped about 40% year-to-date. How do you feel about it now? Would you still buy it?

Tony Locantro: Yeah, it was one of the first to lift its head off the canvas during tax loss selling. It was a 60 cent IPO that was poorly supported — fell to a ridiculous low of 13 cents during the last week of tax loss selling. It’s since recovered to 23 cents. 

It is in radiopharmaceuticals. They’ve also added brain tumour technology. It has one of the richest pipelines of any ASX by a technology company, with multiple phase one trials for the remainder of this year and multiple trials next year.

I have bought heavily personally. I am currently underwater and really need to see the stock recover. It has been building a world-class management team, but the stock just fell out of favour as the Nasdaq Composite (INDEXNASDAQ: .IXIC) and US biotech indices underwent a significant correction. 

So the answer to that is yes, it is still great value, but was even better value a few weeks ago… No change to the fundamental view or my faith in management or the company.

The ASX share for a comfortable night’s sleep

MF: If the market closed tomorrow for four years, which stock would you want to hold?

TL: Proteomics International Laboratories Ltd (ASX: PIQ).

I just think from a biotech, it’s got everything going for it. It’s already had a test that’s proven it’s now a sales exercise. They do have the upcoming pipeline and yeah, that’s the one.

There is another one, but you only want one don’t you?

MF: By all means, please tell us.

TL: From a mining perspective, I think Aurumin Ltd (ASX: AUN).

That’s a gold company with ex-key personnel from Northern Star Resources Ltd (ASX: NST). They have purchased the sandstone project. It’s about a 794,000 ounce resource. 

So they purchased a gold resource. They’re looking to grow through exploration and/or acquisition. The company share price has been punished due to drilling for lithium which failed to deliver significant results, combined with tax loss selling. 

I back management to undergo a decent growth profile in those four years. They’re currently undergoing a 15 cent rights issue on a one-for-seven basis with a one-for-one, 25 cent option for existing shareholders.

So I think the company has undergone some issues recently and I think these can be overcome, and I’d certainly back [the] management team to deliver. 

And one of the key aspects, I think, with any gold company that’s looking to grow, sometimes you need to set the weakness to look at picking up assets that the majors don’t want, and that’s how Northern Star was built.

[Northern Star] was a s***ty one-cent company that went to about $15, but during the time that Northern Star grew, the Australian gold index lost two-thirds of its value.

Looking back

MF: Is there a move that you regret from the past? For example, a missed opportunity or buying a stock at the wrong timing or price.

TL: Oh, I regret not being more aggressive with selling.

I think once you start seeing multiples, we all get delusions of grandeur and the dopamine levels increase and we think that the stock’s going to continue running. But history has shown that you need to take profits along the way.

You need to work out if your company would be racing in the Golden Slipper or the Melbourne Cup. Once you can classify your company, then you’re going to take profits in better fashion.

But I always have the regret that I should be more assertive, and assertive with my profit taking.

MF: It’s difficult for the human mind to figure out, isn’t it, knowing when to sell? People find buying a lot easier than selling.

TL: Oh, geez, yeah, yeah, yeah. I’ve had stuff that’s gone 10, 20 times, and a lot of clients won’t sell because they think it’s going higher. Then I try to get them to sell, and then… Yeah. 

But I guess in my sector of the market, they’re exposed to abnormal gains that you wouldn’t get in more conservative stocks.

The post ‘Richest pipeline’ in ASX: Expert names 3 small-cap shares to buy appeared first on The Motley Fool Australia.

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

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

More reading

• Gold is at multi-year lows. What does this mean for Northern Star shares?
• 2 ‘outstanding’ small-cap ASX shares that could explode: expert
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today
• What’s the dividend yield on Northern Star shares in July?

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.

from The Motley Fool Australia https://ift.tt/TUmw0Z4

On Wednesday, the S&P/ASX 200 Index (ASX: XJO) was a positive performer despite news that inflation has climbed again. The benchmark index rose 0.2% to 6,823.2 points.

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

ASX 200 expected to storm higher

The Australian share market is expected to storm higher on Thursday following a stellar night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 52 points or 0.8% higher this morning. On Wall Street, the Dow Jones was up 1.4%, the S&P 500 rose 2.6%, and the NASDAQ stormed a massive 4.1% higher.

Rio Tinto half-year result falls short of expectations

The Rio Tinto Limited (ASX: RIO) share price could come under pressure today after the mining giant’s half-year results fell short of consensus estimates. Rio Tinto reported a 10% decline in revenue to US$29,775 million and a 26% reduction in underlying EBITDA to US$15,597 million. This compares to the market consensus estimate of US$30,785 million and US$16,813 million, respectively. The miner’s interim dividend was also well short of expectations at US$2.87 per share.

Oil prices jump

Energy shares including Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) could have a good day after a strong night of trade for oil prices. According to Bloomberg, the WTI crude oil price is up 3.4% to US$98.20 a barrel and the Brent crude oil price is up 2.9% to US$107.43 a barrel. Oil prices jumped after Russia cut its gas supply.

US Fed raises rates

As was widely expected, the US Federal Reserve has lifted interest rates again. The central bank elected to increase rates by 0.75% for the second meeting in a row. This took the benchmark overnight borrowing rate up to a range of 2.25% to 2.5%. The big news, though, was that the Fed has hinted that it could slow the pace of its hiking campaign. This sent US equities hurtling higher.

Gold price rises

Gold miners Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) could have a decent day after the gold price pushed higher. According to CNBC, the spot gold price is up 0.9% to US$1,733.5 an ounce. News that the Fed could slow its future rate hikes boosted the precious metal.

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

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

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

More reading

• Do Woodside shares really have a 6% dividend yield right now?
• Rio Tinto share price on watch after half-year earnings miss
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Why I think Coles shares are a compelling buy 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.

from The Motley Fool Australia https://ift.tt/UieA7x1

The Dicker Data Ltd (ASX: DDR) share price has descended slightly in the past month, but could it go ahead in the future?

The company’s share price has lost 1.41% in the last month and is currently trading at $11.19. In today’s trading, the company’s share price closed 2.01% lower.

So what is the outlook for the Dicker Data share price?

What is ahead?

Dicker Data is an Australian technology company that supplies software, cloud, and computer hardware products to major international companies.

Morgan Stanley analysts have recently placed a $16 price target on the company’s shares and maintained an overweight rating. At its current level, this represents nearly 43% upside for the Dicker Data share price.

Further, Morgan Stanley is predicting Dicker Data could provide a fully franked dividend of 48.5 cents in FY 2023. In FY 2022, the broker forecasts a 41.4 cent dividend.

Meanwhile, Airlie Funds Management analysts have recently predicted Dicker Data’s prospects “should remain strong”. Portfolio manager Matt Williams said:

No matter the upcoming economic conditions, we think the path to digitisation won’t be affected… [O]ver the past seven years, sales and profits have compounded annually at 16% and 20% respectively.

Dicker Data recently updated the market on its unaudited results for H1 2022. According to the report, revenue growth is up 36% on the prior corresponding period.

Earnings before interest, tax, depreciation and amortisation (EBITDA) has also grown 20% in the same timeframe from $51 million to $61 million.

The company will hold a webcast of its F22 half-year results on 30 August.

Share price snapshot

The Dicker Data share price slumped nearly more than 24% in the year to date but lost just 0.53% in the past year.

For perspective, the S&P/ASX All Technology Index (ASX: XTX) has shed nearly 26% in a year and almost 29% year to date.

Dicker Data has a market capitalisation of more than $1.9 billion based on the current share price.

The post Down 1% in a month, what’s next for the Dicker Data share price? appeared first on The Motley Fool Australia.

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

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

More reading

• Dicker Data share price powers down despite record first-half profit
• Brokers rate these ASX dividend shares as buys
• Top ASX dividend shares to buy in July 2022
• Why Dicker Data shares are among this fund manager’s favourites
• Here’s why brokers rate these ASX dividend shares as buys

Motley Fool contributor Monica O’Shea 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 has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/FKt6urJ

Few ASX 200 shares have had as dramatic a year as the Woodside Energy Group Ltd (ASX: WDS) share price. For one, over the past 12 months, Woodside shares have gained an impressive 40.25%. That certainly looks good against the 8.3% loss that the S&P/ASX 200 Index (ASX: XJO) recorded over the same period.

But then there’s also the blockbuster merger with BHP Group Ltd (ASX: BHP)’s petroleum division to consider as well. Back in May, the old Woodside Petroleum Ltd became Woodside Energy after BHP spun out its petroleum division. All BHP shareholders at the time received one new Woodside Energy share for every 5.534 BHP shares owned.

As we covered at the time, this tie-up saw Woodside become a “top 10 global energy producer with over two billion barrels of proven and probable reserves and annual EBITDA approaching US$5 billion”.

So as it stands today, the ‘new’ Woodside has a market capitalisation of $59.8 billion. But is Woodside’s trailing dividend yield of 5.94% too good to be true?

Well, this trailing yield comes from the last two dividend payments this oil share has doled out. These were the $1.46 per share final dividend investors received in March as well as the interim dividend of 41 cents that was paid out last September.

Both of these payments were fully franked, which means that the trailing yield of 5.94% grosses up to an even more impressive 8.49% with the value of that franking.

But that represents the past. So what of the future?

Are Woodside shares’ dividend yield of 6% a floor or a ceiling?

Well, any company’s trailing dividend yield comes from its past dividend payments. So no investor should automatically assume Woodside shares will continue to pay a near-6% yield.

Saying that, many ASX experts are indeed predicting Woodside will be able to keep doling out large dividend payments going forward.

One is broker Ord Minnet. As my Fool colleague Tristan covered last month, this broker reckons Woodside’s next interim divided will bring its dividend yield up to 13.6% for FY2022. However, Ord Minnet is also predicting the dividends Woodside will pay that cover FY2023 will be lower, and will equate to a forward yield of 8.1%.

Even so, if Ord Minnet is to be believed, it looks as though Woodside’s trailing dividend yield of almost 6% might be a floor, rather than a ceiling, over the next 12 months. But we shall have to wait and see what happens.

The post Do Woodside shares really have a 6% dividend yield right now? appeared first on The Motley Fool Australia.

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

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

More reading

• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Why I think Coles shares are a compelling buy today
• ASX 200 shares lift as inflation hits highest level in 20 years
• Looking for value: The ASX shares this fundie is holding amid rising inflation

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

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

The Vanguard MSCI Index International Shares ETF (ASX: VGS) invests in a global portfolio of shares. But could it be a good idea for dividends?

It’s one of the more popular index funds. It is invested in more than 1,470 businesses in the portfolio, spread across a number of different countries including the US (70.2% of the portfolio), Japan (6.3%), the UK (4.5%), Canada (3.7%), France (3.2%), Switzerland (3%) and so on.

The ASX is known for being a dividend-friendly share market. Other share markets typically don’t have as large of a dividend yield. The ASX’s largest businesses mostly have low price/earnings (p/e) ratios and high dividend payout ratios, leading to a higher yield for the S&P/ASX 200 Index (ASX: XJO).

How good is the VGS ETF dividend yield?

The Vanguard MSCI Index International Shares ETF is invested in a whole range of different businesses.

Exchange-traded funds (ETFs) simply pass through to investors the dividends that they receive. The biggest positions have the biggest influence on the dividend yield.

Let’s look at the top 10 holdings in the VGS ETF: Apple, Microsoft, Alphabet, Amazon.com, Tesla, UnitedHealth, Johnson & Johnson, NVIDIA, Meta Platforms and Exxon Mobil.

Some of those names don’t even pay dividends, like Tesla, Amazon and Alphabet. Others, like Apple and Microsoft, do pay dividends but their p/e ratios are so high that the subsequent dividend yield is very low.

According to Vanguard, the VGS dividend yield at 30 June 2022 was 2.1%. This has been pushed a bit higher after a 16% decline in the unit price of the Vanguard MSCI Index International Shares ETF in 2022.

Dividend growth

ETFs can distribute both capital gains and dividends to investors. While capital gain distributions are somewhat unpredictable, the dividends/distributions are more predictable and can be more consistent.

Businesses like Microsoft, Apple and Johnson & Johnson have been growing their dividends over the past decade. Plenty of other businesses within the VGS ETF have also grown their dividend.

So, the underlying dividend income from Vanguard MSCI Index International Shares ETF can steadily grow. The typically good earnings growth of the underlying VGS ETF portfolio names can help fund dividend growth and also hopefully lead to decent capital growth as well, over the longer term.

The post Is the Vanguard VGS ETF a good idea for dividends? appeared first on The Motley Fool Australia.

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

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

More reading

• 3 popular ASX ETFs for investors to buy
• Is VGS the best international shares ETF on the ASX?
• I think the 16% drop in 2022 makes this Vanguard ETF a buy
• Here are 2 top ETFs to boost your portfolio
• Here are 2 top ETFs for ASX investors next week

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. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, 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 Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Meta Platforms, Inc., Microsoft, Nvidia, Tesla, and Vanguard MSCI Index International Shares ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Johnson & Johnson and UnitedHealth Group and has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Meta Platforms, Inc., Nvidia, and Vanguard MSCI Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

The Rio Tinto Limited (ASX: RIO) share price will be one to watch on Thursday.

This follows the release of the mining giant’s half-year results after the market close today.

Rio Tinto share price on watch following earnings miss

• Revenue down 10% to US29,775 million
• Underlying EBITDA down 26% to US$15,597 million
• Free cash flow down 30% to US$7,146 million
• Dividend of 276 US cents per share
• No special dividend

What happened during the half?

For the six months ended 30 June, Rio Tinto reported a 10% decline in revenue to US$29,775 million and a 26% reduction in underlying EBITDA to US$15,597 million.

This was driven by a softer iron ore price, which led to the company’s iron ore EBITDA falling 35% to US$10,395 million for the half. This was partially offset by a 49% lift in aluminium EBITDA to US$2,866 million.

How does this compare to expectations?

Unfortunately for the Rio Tinto share price, this result appears to have fallen a touch short of expectations.

For example, a recent note out of Goldman Sachs reveals that its analysts were expecting revenue of US$29,655 million and underlying EBITDA of US$15,671 million.

Furthermore, the market consensus estimate was for revenue of US$30,785 million and underlying EBITDA of US$16,813 million.

Also falling short of expectations was its dividend of 276 US cents per share. Not only did this come in short of estimates, but there was no special dividend this time around.

Goldman was pencilling in total dividends of US$3.68 per share, whereas the consensus estimate was for US$3.97 per share. Both estimates included special dividends of 50 US cents and 67 US cents, respectively.

Though, it is worth highlighting that this was the second largest interim dividend in the company’s history.

Management commentary

Rio Tinto’s chief executive, Jakob Stausholm, commented:

We remain focused on delivering on our long-term strategy, with a steady improvement in operating performance and some notable advances in our growth agenda. We continue to strengthen our partnership with the Mongolian government following commencement of underground mining at Oyu Tolgoi, delivered first iron ore from the Gudai-Darri mine and approved early works funding at the Rincon lithium project.

Stausholm spoke cautiously about the second half. He notes that the “market environment has become more challenging at the end of the period.”

Nevertheless, the chief executive remains optimistic on the longer term.

We are committed to making lasting, long-term change to our culture, including to our workplace culture, and to building better relationships with Indigenous peoples, communities and partners. The progress we are making will ensure we continue to deliver attractive returns to shareholders, invest in sustaining and growing our portfolio, and make a broader contribution to society in the drive to netzero carbon emissions.

The post Rio Tinto share price on watch after half-year earnings miss appeared first on The Motley Fool Australia.

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

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

More reading

• Top broker issues new warning on outlook for iron ore price
• 5 things to watch on the ASX 200 on Wednesday
• Rio Tinto share price climbs ahead of tomorrow’s earnings update. Here’s what to watch
• Guess how much Rio Tinto shares have paid in dividends over the last 5 years
• Why Leo Lithium, Rio Tinto, Santos, and Woodside shares are dropping 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.

from The Motley Fool Australia https://ift.tt/MDL47rm

The AMP Ltd (ASX: AMP) share price has risen by 9.3% over the past month.

This compares to an 0.94% gain for the S&P/ASX 200 Index (ASX: XJO) and a 5.5% bump for the S&P/ASX 200 Financial Index (ASX: XFJ).

AMP has even outdone the big four ASX bank shares, with the best performers there being National Australia Bank Ltd (ASX: NAB) and Westpac Banking Corp (ASX: WBC), both up around 8%.

What’s driving the AMP share price up?

As my Fool colleague Tristan recently reported, AMP is seeing growth in some parts of its remaining business.

The company has sold off other segments of its business to raise cash. AMP will use the proceeds to fund share buybacks and capital returns for its long-suffering shareholders.

At a recent webinar hosted by the fund manager, Allan Gray, the AMP CEO Alexis George had this to say:

We really had to reposition the businesses we had, which is the bank and wealth management. They weren’t competitive. They couldn’t really compete against the players in the market. I think we’ve done that now on most of those businesses, in fact, all of the businesses in wealth management and they’re ready to compete.

I think we really need to explore some new revenue opportunities into new ancillary revenue and I think we’ve really committed to the retirement space.

Q1 FY22 update

The AMP share price jumped 1.7% on 5 May when the company released its Q1 FY22 AUM and cashflows update.

AMP told the market it had increased its total loan book by $500 million to $22.6 billion. Total deposits increased by $1.7 billion to $19.5 billion.

Australian wealth management assets under management decreased by $5.8 billion to $136.5 billion with net cash outflows of $1.3 billion. This was an improvement on the $2 billion outflows in the prior corresponding period.

AMP Capital assets under management on a ‘normalised’ basis declined by 0.6% to $52.5 billion.

Could AMP be taken over?

The hot topic in the banking sector right now is the announcement from Australia and New Zealand Banking Group Ltd (ASX: ANZ) that it is buying the banking division of Suncorp Group Ltd (ASX: SUN).

The potential for AMP to be taken over was raised at the Allan Gray webinar.

Allan Gray owns AMP shares in its Australia Stable Fund, representing 1.9% of the funds invested.

Allan Gray portfolio chief investment officer Simon Mawhinney said “there’s less chance of it being taken over by a big four bank than perhaps it merging with a non-big four regional bank”.

Mawhinney added:

Sure, there is some scope to merge with another bank. It might happen. I hope that if someone came to AMP and said, ‘Here’s 1.3 times NTA for AMP Bank, do you want it or not?’ I hope they would take it because we would be delighted with that outcome.

The post The AMP share price has surged 9% so far this month. Can it keep going? appeared first on The Motley Fool Australia.

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

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

More reading

• ‘Ready to compete’: Will AMP seek out new opportunities or stick to its knitting?
• Own AMP shares? CEO touts its ‘digital bank’ status in competitive landscape
• ‘CBA and Westpac are too big’: One fund manager’s take on the future of ASX 200 bank shares
• AMP share price in focus as Mirvac wins control of $7.7 billion office fund
• Why interest rates need to rise despite ASX carnage: economist

Motley Fool contributor Bronwyn Allen has positions in Australia & New Zealand Banking Group Limited and 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.

from The Motley Fool Australia https://ift.tt/7WKeQah