The Macquarie Group Ltd (ASX: MQG) share price has taken a tumble with the market in 2022.

Since the start of the year, the investment bank’s shares have dropped a sizeable 22% to $164.67.

Is the Macquarie share price weakness a buying opportunity?

Although the weakness in the Macquarie share price this year has been disappointing for shareholders, it could be a buying opportunity for non-shareholders.

That’s the view of the team at Morgans, which recently reiterated its add rating and $215.00 price target on the company’s shares.

Based on the current Macquarie share price, this implies potential upside of 30% for investors over the next 12 months.

In addition, the broker is forecasting 4%+ dividend yields from Macquarie’s shares in FY 2022 and FY 2023 based on where its shares are currently trading.

This stretches the total return on offer with the company’s shares to almost 35% between now and this time next year.

What did the broker say?

According to the note, Morgans is a fan of the company due to its exposure to long-term structural growth markets. The broker explained:

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

And while its analysts acknowledge that it will be hard for Macquarie to build on FY 2022’s stellar earnings, it thinks investors should look beyond this. Particularly given its long track record of delivering strong returns. Morgans concludes:

We 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).

The post Top brokers tips 30% upside for the Macquarie share price appeared first on The Motley Fool Australia.

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More reading

• Why Macquarie shares could be set for a $570m tailwind
• ASX 200 bank shares tumble: Citi says time to buy
• Macquarie shares are beating the other ASX 200 banks again today. What’s going on?
• Why is Macquarie the only ASX 200 bank share in the green today?
• 2 ASX 200 financials shares named as buys

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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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If you’re looking to invest in exchange traded funds (ETFs), then it could be worth considering the three listed below.

These three ETFs are popular with investors and it isn’t hard to see why. Here’s what you need to know about them:

BetaShares Global Energy Companies ETF (ASX: FUEL)

You only need to look at the price you are paying for petrol to know that oil prices are booming right now. And with supply likely to remain tight for a while to come due to the blacklisting of Russian oil, companies producing the black gold look set to generate big profits. In light of this, the BetaShares Global Energy Companies ETF could prove to be a great option for investors. This ETF provides investors with easy access to many of the largest energy producers in the world. This includes the likes of BP, Chevron, ExxonMobil, and Royal Dutch Shell.

BetaShares NASDAQ 100 ETF (ASX: NDQ)

The BetaShares NASDAQ 100 ETF and the index this fund tracks are having a very tough year. And while they may not yet have found a bottom, each decline is making the BetaShares NASDAQ 100 ETF more attractive. After all, this ETF is home to many of the world’s greatest companies. This includes giants such as Alphabet, Amazon, Apple, Facebook, Microsoft, Netflix, and Tesla. In a few years, we may look back on this period as being one of the best buying opportunities we’ve had in a long time.

VanEck Vectors Video Gaming and eSports ETF (ASX: ESPO)

A final ETF for ASX investors to look at is the VanEck Vectors Video Gaming and eSports ETF. As with the BetaShares NASDAQ 100 ETF, this ETF has been hammered this year. This could also prove to be a fantastic buying opportunity, especially given the strong growth potential of the companies included in this fund. These are many of the biggest companies in a global video game market estimated to comprise 2.7 billion active gamers. Among the shares that are included in the fund are AMD, Electronic Arts, Nintendo, Nvidia, Roblox, and Take-Two.

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

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More reading

• Here’s why the NDQ ETF is down almost 30% in 2022
• Here are 3 top ETFs for ASX investors to buy now
• I think these 2 ASX shares are buys in this volatility
• 3 popular ETFs for ASX investors to buy now
• 3 ASX ETFs for investors 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 BETANASDAQ ETF UNITS and BetaShares Global Energy Companies ETF – Currency Hedged. The Motley Fool Australia has positions in and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended VanEck Vectors ETF Trust – VanEck Vectors Video Gaming and eSports 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

In the midst of a down market, shares of EV leader Tesla (NASDAQ: TSLA) tumbled more than most, falling 7.2% through noon ET on Thursday after Reuters reported that Tesla is once again raising prices on its electric cars. 

Citing the rising cost of raw materials and continuing problems getting auto parts with which to build its cars efficiently, Reuters noted that Tesla has raised the price on its popular Model Y crossover by about 4.8%, to $65,990 for the “long-range” version.  

So what

Tesla isn’t stopping there, though. Digging into the details on Tesla’s website, Electrek reported last night that the prices are as follows:

• The Model 3 Long Range price is up the most in percentage terms, rising 6.4% to $57,990.
• The Model X Dual Motor All-Wheel Drive Long Range price increased 5.2% to $120,990.
• The Model S Dual Motor All-Wheel Drive Long Range’s price rose a similar 5% to $104,990.
• The Model Y Performance crossover inched up only 2.9% to $69,990.
• “Plaid” versions of both the Model S and the Model X held steady at $135,990 and $138,990, respectively — no change in price.

Skimming the changes, there’s no discernible pattern to where Tesla is hiking prices more and where less. While “Plaid” pricing is already the highest for both the S and X and is not budging, Tesla’s other Model X doesn’t cost much less, yet its price was hiked significantly.

The biggest change in pricing came to the Model 3, and raising the price on Tesla’s entry-level EV may be a move to encourage customers to skip past the Model 3 and pay just a little more to get an even better, bigger car instead. Similarly, the price changes in the Model Y tighten the price differential between the lower-end and higher-end models — which might likewise be aimed at persuading shoppers to buy a little more car than they had intended.

Now what

To that extent, therefore, it almost seems as if raising prices might be good news for Tesla, and that investors who are selling the stock on today’s news are making a mistake — but for one thing.

Just two days ago, Elon Musk was quoted telling his audience at the Tesla Silicon Valley Owners Club that he thought electric rival Rivian (NASDAQ: RIVN) made a mistake when it tried to raise prices on its electric trucks and SUVs back in March. When you raise prices, commented Musk, you “reduce the number of people who can afford the vehicles exponentially,” as Electrek reported.  

If that’s true for Rivian, though, then shouldn’t it also be true for Tesla? By raising his own prices, doesn’t Musk run the risk of depressing demand for new Teslas — at the very moment when rivals such as Hyundai and Ford and GM — and yes, Rivian, too — are bringing new and occasionally cheaper alternative EV models to market?

Because if that’s the case, then it might be a good reason Tesla stock is going down today. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Tesla stock sold off 7% today appeared first on The Motley Fool Australia.

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More reading

• Why Tesla stock jumped 5% today
• Why Tesla shares were rising today
• Tesla Looks to Reinforce Its Battery Supply Chain: Why That Matters
• More likely to 5x first: Tesla vs. Ford?
• Why Tesla stock enjoyed a rally today

Rich Smith 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 Tesla. 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.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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A hot topic in the lithium space — does the Pilbara Minerals Ltd (ASX: PLS) share price represent good value?

Since the release of Goldman Sachs’ bearish analysis on the battery metals market, the lithium miner’s shares have tumbled.

In the past week, Pilbara Minerals shares are down 7%, despite finishing 3.90% higher at $2.13 yesterday. This is in stark contrast to when its shares were trading as high as $3.89 in January this year. They are now down 33% this year to date.

Nonetheless, here are my reasons below why I think the company’s shares are undervalued at the current price.

Is now the time to buy Pilbara Minerals shares?

While the Pilbara Minerals share price has tanked recently, the company has been busy progressing its Pilgangoora Operation in Western Australia.

The flagship project is targeting an expanded combined production capacity across two processing plants. This means roughly 560-580,000 tonnes per annum of spodumene concentrate will be produced from the September quarter of 2022.

That’s no small potatoes, particularly with lithium prices nearing an all-time high of around US$72,000 per tonne.

Year on year, the price for the battery-making ingredient has soared 430% as demand projections are far exceeding future supply to market.

Furthermore, the company’s Battery Material Exchange (BMX) auction has become highly successful.

A broad range of buyers has continued to show strong interest by bidding online for Pilbara Minerals’ spodumene concentrate.

Last month, the results of the fifth auction represented the fourth consecutive increase in spodumene spot sales. This translates to a lucrative additional revenue stream for the company.

However, with Pilbara Minerals shares falling more than 33% in 2022, I believe this could be an attractive investment.

A number of brokers also remain bullish on the company’s share price.

According to ANZ Share Investing, the team at Macquarie put a price target of $3.50 on Pilbara Minerals shares.

In addition, Citi analysts also weighed in, giving their rating of $3.50 per share as well.

Based on the last closing price, this represents an upside of 64% for investors.

Pilbara Minerals share price snapshot

Regardless of the tough month of trade, the Pilbara Minerals share price is up 60% in the past 12 months.

When looking further back, the company’s shares have rocketed from a humble price of 15 cents apiece in March 2020.

On valuation grounds, Pilbara Minerals presides a market capitalisation of roughly $6.10 billion.

The post Why I think the Pilbara Minerals share price is currently undervalued appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Why is the Pilbara Minerals share price surging 5% on Thursday?
• Here are the 3 most traded ASX 200 shares on Wednesday
• Here are the 3 most traded ASX 200 shares on Tuesday
• Why is the Pilbara Minerals share price down 6% on Tuesday?

Motley Fool contributor Aaron Teboneras has positions in Pilbara Minerals Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The National Australia Bank Ltd (ASX: NAB) share price is down 16% over the last month. This big four ASX bank has suffered a decline like a lot of fellow S&P/ASX 200 Index (ASX: XJO) shares.

However, one fund manager thinks big four ASX banks are good opportunities after the recent decline. Will Riggall, the chief investment officer from Clime Investment Management, thinks the sell-off in ASX bank shares after the June interest rate increase may have been overdone.

What’s attractive about the NAB share price?

Riggall explained that the big four ASX banks have been hurt due to increased concern that “higher interest rates will see a sharp property downturn”.

“We believe house prices are set to decline,” he said. “However, given the amount of savings held by consumers, we are unlikely to see the sharp increase in defaults that would be needed to offset the positive impact that higher variable rates have on bank earnings.”

With that in mind, the fund manager is “selectively” increasing its position in bank shares in this period of volatility.

In fact, it’s the dividends from the banks which are seen as a “key attraction”. Clime sees the dividends as having a “high and sustainable” dividend outlook.

The fund manager is expecting this period to likely be a lower-return period.

The fall in the NAB share price has also pushed up the prospective dividend yield.

Clime currently prefers to own ASX shares that have exposure to corporate and government spending, with the Australian consumer “likely to remain under pressure”.

On NAB, the fund manager said it had been a “stellar performer” for the portfolio this year, mostly driven by the “exceptional’ turnaround under the new CEO Ross McEwan.

How is the bank performing?

The last the market heard from the big bank was the release of its FY22 half-year result on May 5. It said it generated $3.55 billion of statutory net profit after tax (NPAT) and $3.48 billion of cash earnings, representing a 4.1% increase year on year.

Revenue rose 4.6%, benefiting from “pricing discipline and strong growth in lending and deposits which were up 10% and 12% respectively versus March 2021″.

It made a cash return on equity (ROE) of 11.3% in that result. Looking at its balance sheet, the big bank said its group common equity tier 1 (CET1) ratio was 12.48% at the end of the period.

The NAB share price fell 0.5% the day the results were released and 1.9% the following day.

NAB dividend

As the fund manager said, the bank dividends can form a sizeable part of the total returns. In HY22, NAB decided to declare an interim dividend of 73 cents per share, which was a double-digit increase compared to the FY21 interim dividend.

Looking at the last 12 months of dividends from NAB, it has a grossed-up dividend yield of 7.6% at the current NAB share price.

The post ‘Stellar performer’: Why this fundie is buying the dip in the NAB share price appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• Is a recession coming to Australia this year?
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• ASX 200 bank shares languish on Thursday despite market lift
• Despite rising bond yields, here’s why I’ll keep investing in ASX shares

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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Elders Ltd (ASX: ELD) shareholders will have something to cheer about today as the company pays out its latest dividend.

The agribusiness company is rewarding eligible investors with a partially franked interim dividend of 28 cents per share.

At Thursday’s market close, the Elders share price finished 0.16% higher at $12.72.

Despite being in the green, it has been a tough period for Elders shares, which have fallen 5% in a week and 9% in the past month.

Let’s take a look at all the details regarding the Elders dividend.

Elders pays out record dividend

Elders delivered an outstanding performance across key metrics in its first half results for the 2022 financial year.

In summary, management reported sales revenue of $1,514.8 million which reflected a 38% increase on the prior comparable period.

Furthermore, earnings before interest and tax (EBIT) accelerated by 80% to $132.8 million

On the bottom line, this led to a net profit after tax (NPAT) of $91.2 million, up 34% on H1 FY21.

Elders noted the robust financial scorecard was underpinned predominantly by its rural products business. Demand surged for fertiliser and crop protection products on the back of favourable seasonal conditions in key cropping regions.

However, the biggest win for shareholders came in the form of the board’s decision to ramp up the interim dividend.

For context, the first half dividend for FY22 represented a 40% jump on the 20 cents declared in H1 FY21.

Notably, this is now the highest Elders dividend ever paid to shareholders in the history of the company.

When calculating against the last closing share price, Elders is trailing on a forecast dividend yield of 3.94%.

Elders share price snapshot

Over the past 12 months, the Elders share price has risen by 8%. It is also up by 3% this year to date.

It was only in March this year that the company’s shares accelerated following a positive trading update.

Just two months later on 23 May, Elders shares reached a decade high of $15.32.

The company presides a price-to-earnings (P/E) ratio of 11.51 and commands a market capitalisation of roughly $1.99 billion.

The post Guess which ASX 200 share is paying its biggest-ever dividend today? appeared first on The Motley Fool Australia.

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More reading

• 3 ASX shares to buy for scary times: experts
• Why is the GrainCorp share price racing higher today?
• Why Appen, Elders, Predictive Discovery, and Yancoal shares are dropping
• Why is the Elders share price in reverse today?
• Experts name 2 top ASX dividend shares to buy now

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

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If you’re investing in ASX gold shares, then we hope you’re aware of how they’re leveraged to the price of gold.

By that we mean that gold miners’ costs for pulling an ounce of the yellow metal out of the ground are fairly fixed. So, any change in the price of gold goes straight to the bottom line.

For a simplified example, if it costs an ASX gold share $800 to mine one ounce, and gold is selling for $1,000 per ounce, the company is booking a profit of $200 per ounce. Now if our hypothetical gold price increases by 20% to $1,200, the gold miner’s profit leaps to $400 per ounce, up 100%, or five times more than the gold price climbed.

The same is true in reverse, should gold prices fall.

What can we expect from the gold price?

Gold prices (briefly) reached multi-year highs of US$2,050 per ounce on 8 March. Since then, the yellow metal has retraced to the current US$1,830 per ounce, which is still high by historic levels.

Some gold proponents believe the bullion will rocket to new records as inflation soars and investors seek a haven asset amid rising geopolitical tensions.

Tom Palmer, CEO of Newmont Mining Corp (NYSE: NEM), the world’s top gold producer, isn’t among them.

As reported by Bloomberg, Palmer believes gold prices will remain near the current levels, or move up slightly as inflation and global uncertainties remain in play.

However, Palmer does see the lower end of the gold price, the support price, increasing from some US$1,200 to the US$1,500 to US$1,600 range.

That higher support price would certainly be welcomed by investors in ASX gold shares.

“I see no reason why you wouldn’t, over the next year or two, see it around current levels. But more importantly sitting on top of a floor that has fundamentally moved given the events of the last couple of years,” he said.

As for Bitcoin (CRYPTO: BTC) serving as digital gold, Palmer added, “I focus on gold being a store of wealth for millennia in a transparent and highly regulated market. Gold is a different investment decision than crypto.”

How have these three ASX gold shares been performing?

With gold prices having retreated back to their early January levels, ASX gold shares have given back the sizeable year-to-date gains they were sitting on in mid-April.

Since the opening bell on 4 January, the S&P/ASX All Ordinaries Gold Index (ASX: XGD) is down 8%.

Looking at three leading ASX gold shares, the Northern Star Resources Ltd (ASX: NST) share price has lost 14% over that time, while shares in Evolution Mining Ltd (ASX: EVN) are down 15%.

The Newcrest Mining Ltd (ASX: NCM) share price has fared better, down 3%.

For some broader context, the S&P/ASX 200 Index (ASX: XJO) has dropped 13% in 2022.

The post Investing in ASX 200 gold shares? Here’s the latest on the gold price forecast appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• Why is the Newcrest share price glittering on Thursday?
• 5 things to watch on the ASX 200 on Thursday
• What’s with the Northern Star share price on Wednesday?
• Evolution Mining share price dips 8% in a week as Macquarie flags ‘earnings risk’ from energy crisis

Motley Fool contributor Bernd Struben 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 Bitcoin. The Motley Fool Australia has positions in and has recommended Bitcoin. 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 has fallen heavily in 2022. I think it looks like a good long-term opportunity at these levels.

How much has Xero dropped? It’s down 46% in this calendar year. Considering the business still has a market capitalisation of $11.6 billion (according to the ASX), the drop represents a hefty fall in the valuation.

However, while the Xero share price has almost halved, operationally it’s the biggest it has ever been in terms of revenue and subscribers. That’s one of the main reasons why I think the Xero share price is good value.

Ongoing growth

Every result that Xero reports includes impressive growth statistics.

It seems that investors are now getting better value when comparing the Xero share price to revenue. In FY22, Xero reported that operating revenue increased by 29% to NZ$1.1 billion, while annualised monthly recurring revenue (AMRR) grew by 28% to NZ$1.2 billion.

The business reported solid growth in its subscriber numbers as well. Subscribers increased by 19% to 3.27 million, while the net subscribers added was 16% higher at 530,000 (up from 456,000).

Despite heavily investing for growth, Xero’s FY22 earnings before interest, tax, depreciation and amortisation (EBITDA) managed to increase by 11% to NZ$212.7 million.

As Xero says, it will “continue to focus on growing its global small business platform and maintain a preference for reinvesting cash generated, subject to investment criteria and market conditions, to drive long-term shareholder value”.

While it’s not focused on making big profit in the short term, the gross profit margin of 87.3% signals that Xero can make good profit in the long term when it’s not so heavily focused on growth spending such as marketing.

With its global growth plans, I think the lower Xero share price is even more compelling.

Price increases

In FY22, Xero achieved a 7% increase in average revenue per user (ARPU) to NZ$31.36.

FY23 (and FY24) could see another increase with mid-to-high single-digit price increases planned for most customers in September 2022 in Australia, the UK, and New Zealand. This increase will come roughly halfway through Xero’s 2023 financial year, so it should help growth in both FY23 and FY24.

For example, ‘standard’ UK subscribers will see a 7.7% rise to £28 per month. ‘Premium’ subscribers will experience a 9% rise to £36 per month. Even if Xero weren’t to add many subscribers in the UK in FY23, the price increases could help revenue grow nicely over the subsequent 12 months.

Unless Xero’s costs rise by a similar rate, the price increases could lead to stronger profit margins for the business.

Strong loyalty

There could be a danger of losing subscribers because of the price increases.

However, Xero has displayed a high level of customer loyalty and the ‘churn’ has been decreasing. The FY22 subscriber churn/loss rate was just 0.66%. This was an improvement from 0.73% in FY21 and 0.84% in FY20.

I think the useful time-saving and efficient tools that Xero offers business owners and accountants will mean subscribers want to stick around, even with a higher subscription fee.

The length of time that subscribers are sticking with Xero is helping grow its total lifetime value (LTV) of subscribers. FY22 LTV rose 43% to NZ$10.9 billion.

Foolish takeaway

When combining the above factors, I think the Xero share price looks attractive for the next 12 months and beyond. I’d happily add it to my portfolio today.

The post Why I think the Xero share price is now too compelling to ignore appeared first on The Motley Fool Australia.

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• Top brokers name 3 ASX shares to buy today
• Down 45% in 2022, is the Xero share price in the buy zone?
• ASX 200 midday update: ResMed’s US$1bn acquisition, tech shares continue to sink
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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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It’s been a turbulent week in markets, to say the least.

US investors panicked on Monday night after awful inflation numbers were revealed, which the Australian market replicated on Tuesday.

Then Wednesday night the US Federal Reserve ratcheted up interest rates by an eye-watering 75 basis points.

That added to the pain here in Australia from a 50-point hike just a fortnight ago.

So what will happen to ASX shares from here?

T Rowe Price Group Inc (NASDAQ: TROW) head of Australian equities Randal Jenneke took a stab at how it could play out over the next few months.

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Although the markets agreed that inflation is out of control and central banks are right to try to tame it, the magnitude of action required without triggering a recession is notoriously difficult to judge.

“In 75% of rate hiking cycles since the 1950s, a US recession has followed,” said Jenneke.

“Australia, as a small, open economy, was only able to avoid following suit in three out of the last 11 US recessions.”

The bright side for ASX shares is that Jenneke expects it to outperform other markets for the rest of this year.

“Australia will likely benefit from increased exports of liquid natural gas and coal to Europe due to tighter sanctions on Russian energy,” he said.

“At the same time, more fiscal stimulus to support growth in China could help to support the price of iron ore, even as the global economy slows.”

The Australian market “currently looks cheap”, according to Jenneke, so global capital has been flowing into the ASX.

“Australia’s cheapness partly reflects its composition and the greater share of value sectors in the index. It also reflects the fact that the RBA was less enamoured with quantitative easing policies after the global financial crisis and more recently in response to the coronavirus pandemic,” he said.

“As a result, Australia has created less excess local liquidity to distort domestic equity valuations.”

ASX growth shares to make a comeback

Growth shares have suffered greatly over the past six months as investors turned away from them due to the prospect of rising interest rates.

But Jenneke feels like the tables will turn in the second half of the year.

“As the year unfolds and recession fears multiply, value stocks are likely to feel the most pressure,” he said.

“For the second half, we expect quality growth stocks to perform better in the face of a continuing earnings slide.”

Specifically, the T Rowe Price team has increased its investment in “defensive growth”, which typically is seen in sectors like consumer staples and healthcare.

The revival of ASX growth shares will come as markets move on from the current obsession with inflation and interest rates.

“After a period of stagflation, we believe recession risks will come to dominate equity markets in 2023,” said Jenneke.

“We believe it is better to prepare for what is likely to come in 2023 — slowing growth and rising recession risks — rather than to dwell on what stares us in the face today.”

Even though net interest margins for the big banks will increase as interest rates head north, Jenneke would stay away from those ASX shares.

“Their earnings may look reasonable now, but they have the potential to weaken sharply in six to 12 months’ time when rising non-performing loans as a result of slower growth outweigh the benefits of wider net interest margins.”

The post This is what will happen with ASX shares for the rest of 2022: expert appeared first on The Motley Fool Australia.

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

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If you’re in the market for some dividend shares and are looking for defensive options, then you may want to look at the two listed below.

Both these dividend shares have defensive qualities and are rated as buys by analysts. Here’s what you need to know about them:

Charter Hall Social Infrastructure REIT (ASX: CQE)

The first defensive ASX dividend share to look at is the Charter Hall Social Infrastructure REIT.

The Charter Hall Social Infrastructure REIT is a real estate investment trust with a focus on social infrastructure properties. These are assets such as bus depots, police and justice services facilities, and childcare centres.

These are all in demand with end users and command very long leases. In fact, at the last count the company had a 100% occupancy rate and a weighted average lease expiry of 14.6 years.

This caught the eye of Goldman Sachs, which has put a conviction buy rating and $4.20 price target on its shares

Goldman is also expecting some generous dividends. It is forecasting dividends per share of 17.2 cents in FY 2022 and 18.3 cents in FY 2023. Based on its current share price of $3.19, this implies yields of 5.4% and 5.7%, respectively.

Coles Group Ltd (ASX: COL)

Another defensive ASX dividend share for investors to consider is retail giant, Coles.

It is one of Australia’s largest retailers with a growing network of supermarkets, liquor stores, and convenience stores across the country.

Unlike most retailers, Coles looks well-placed to benefit from rising inflation. Particularly given how the supermarket giant’s recent quarterly update showed no signs of consumers trading down in response to inflation.

Analysts at Citi noted this, commenting: “Coles provided its 3Q22 trading update with sales in line with our expectations. There were no observable signs of trading down or lower volumes in response to higher food inflation.”

In light of this, the broker has put a buy rating and $19.30 price target on its shares.

As for dividends, the broker is forecasting fully franked dividends of 63 cents per share in FY 2022 and then 72 cents per share in FY 2023. Based on the current Coles share price of $16.81, this will mean yields of 3.75% and 4.3%, respectively.

The post 2 defensive ASX dividend shares with good yields that analysts rate as buys appeared first on The Motley Fool Australia.

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More reading

• Why are these ASX 200 retail shares lagging the market today?
• Analysts name 2 ASX dividend shares to buy to combat inflation
• Is the Coles share price a bargain buy right now?
• 2 ASX dividend shares that experts rate as buys
• Where next for the Coles share price?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended COLESGROUP DEF SET. 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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