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.

There’s no question the $4 trillion energy sector has been home to the best-performing stocks on the market recently.

Over the past year, energy stocks have gained 72% on average while the next closest sector, utilities, rose less than 15%. In comparison, the broad market S&P 500 Index (SP: .INX) index lost 1%, and that started long before Russia invaded Ukraine.

It hasn’t been much different in 2022 either, with the oil and gas stocks, in particular, leading the way. Energy is again on top with a 58% gain as utilities again ranked second with a less than 5% increase in value.

Yet over longer periods, the high cost of exploration and resource exploitation has made the energy sector a lagging sector for investors.

Technology stocks were the market darlings only until recently and over the past decade energy stocks ranked dead last with simple double-digit increases when virtually every other sector was sporting triple-digit gains. 

Oil and gas stocks are the stars these days, but is now the time to buy them?

Beating up on big oil

President Joe Biden recently said he hoped Americans could come out of the current energy crisis less dependent on fossil fuels. Alternative energy sources are already a rising component of the world’s energy consumption, about 30% of the total, and that number is continuously growing.

Where the energy sector accounted for 29% of the stocks weighted in the S&P 500 in 1980, today they represent just 3.7%. Back then, seven of the top 10 stocks in the popular index were oil and gas stocks, led by ExxonMobil (NYSE: XOM); today there are none. 

And in a sign of how the world is further changing, Exxon was booted out of the Dow Jones Industrial Average in 2020 — a spot it has held for nearly 100 years — leaving only Chevron (NYSE: CVX) to represent the industry. Oil and gas stock investing isn’t what it used to be.

Oil, oil everywhere

Yet that doesn’t mean you shouldn’t invest in the energy sector. It is simply too ingrained in the global economy to disappear.

For example, the U.S. Energy Information Association forecasts global “conventional” light-duty vehicles will nearly double from 1.31 billion in 2020 to 2.21 billion at their peak in 2038, but that will still far outstrip electric vehicle usage.

General Motors (NYSE: GM) has said it wants to produce only electric vehicles (EVs) by 2035 while Ford Motor Company (NYSE: F) is shooting for 40% of its fleet.

Tesla (NASDAQ: TSLA), in contrast, says it wants to sell 20 million EVs by 2027. However, the EIA predicts EV usage will grow from just 0.7% of the global LDV fleet to 31% in 2050, or just 672 million vehicles. Not an insignificant number, but still trailing gas-powered vehicles.

Petroleum products account for about 90% of all energy usage in the U.S. transportation sector, with gasoline accounting for 56% of the total.

Distillates, primarily diesel fuels, accounts for another 24%, and jet fuel, 9%. And jet fuel usage is growing rapidly with the EIA expecting consumption to increase at a faster rate than any other liquid transportation fuel through 2050.

And fossil fuels are in almost every product consumers use today, with petroleum appearing in everything from cosmetics and personal care products, to everyday items such as smartphones, computers, TVs, shoes, sporting goods, flooring, furniture, and medical supplies.

Grand View Research estimates the global petrochemicals market size was valued at $556.1 billion in 2021 will grow at a 6.2% compound annual rate through 2030, driven primarily by construction, pharmaceuticals, and automotive needs, as well as our industrial economy.

And though petroleum itself is not as important of a component for plastics manufacturing, natural gas and natural gas processing is. 

Still a gusher of an opportunity

The chances that alternative energy replaces fossil fuels for the foreseeable future are incredibly low. That’s why I think the energy sector generally, and oil stocks in particular, are great buys, even today at their elevated levels.

Fossil fuels will be around for a long, long time meaning investors are to look very closely at some of the best energy stocks in the space as a long-term growth investment.

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

The post Is now the time to buy oil stocks? appeared first on The Motley Fool Australia.

More reading

• Why did the Tesla share price just dump 9%?
• Why Tesla stock did a U-turn today
• The Tesla share price has rallied 18% in less than a fortnight. What’s going on?
• Why Tesla stock is still falling today
• Why the Tesla share price stalled on Tuesday

Rich Duprey has positions in Chevron and ExxonMobil. 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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The Yancoal Australia Ltd (ASX: YAL) share price is in the green after the company condemned a potential takeover bid.

Chinese state-owned entity Yankuang Energy Group – Yancoal’s parent company and controlling shareholder – recently flagged its intention to put forward a bid for the ASX-listed company.

It’s expected to offer $5.07 apiece for all Yancoal shares it doesn’t already control.  

At the time of writing, the Yancoal share price is $5.56, 2.39% higher than its previous close.

Let’s take a closer look at the latest on the potential takeover talks.

Yancoal share price on the rise

The Yancoal share price is gaining this morning after an independent board committee deemed Yankuang’s potential acquisition offer wouldn’t be in the best interest of the company’s minority shareholders.

Thus, the company won’t be supporting a $5.07 per share bid or recommending it to shareholders.

However, Yankuang has a large holding in Yancoal – its stake makes up more than 62% of the company.

That means it might only need the support of a few other major shareholders to get a takeover bid across the line.

It’s also worth noting Yancoal hasn’t yet received an official takeover offer or proposal from its major shareholder.

The potential offer was previously expected to be made up of convertible bonds issued by Yankuang Energy. Yancoal noted, that if successful, the offer could see the company de-listed from the ASX and the Hong Kong Stock Exchange.

The independent board committee behind today’s news was appointed by the ASX-listed coal producer. Its advisors included Gilbert + Tobin, advising on Australian legal matters; Freshfields Bruckhaus Deringer, advising on Hong Kong legal matters; and Deloitte Corporate Finance, advising on strategic and commercial matters.

News of a potential takeover bid comes amid a particularly good period for Yancoal and its share price.

Strong energy prices saw the coal company recording record revenue in 2021. On top of that, demand for the black rock has surged in 2022.

The Yancoal share price is currently 99% higher than it was at the start of this year. It has also gained 168% since this time last year.

The post Yancoal share price lifts as potential takeover slammed appeared first on The Motley Fool Australia.

More reading

• Here are the best performing ASX dividend shares so far this year
• Why Appen, Elders, Predictive Discovery, and Yancoal shares are dropping
• Why these ASX coal shares could be ‘bigger than Ben-Hur’: fundie
• Here’s why the Yancoal share price is crashing 15% lower today
• Why are ASX coal shares sliding today?

Motley Fool contributor Brooke Cooper 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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The lithium industry has been under pressure in recent weeks amid concerns over the supply-demand balance.

In recent times, demand has been outstripping supply, supporting sky high prices for the white metal.

However, a growing number of analysts now believe that supply will soon catchup and potentially even lead to a lithium surplus in the next couple of years. This would put significant pressure on lithium prices.

Whether or not this materialises is difficult to say. Lithium supply has a habit of disappointing. But, nevertheless, it is perhaps best to consider investing on the assumption that prices will start to fade.

But which lithium shares would be good options in this scenario? Two that have been rated as buys this morning are listed below. Here’s what analysts are saying about them:

Allkem Ltd (ASX: AKE)

According to a note out of Morgans, its analysts have retained their add rating but trimmed their price target on this lithium miner’s shares to $16.38.

The broker notes that Allkem has just reported higher than expected lithium carbonate prices for the June quarter. And while this has been offset somewhat by softer production at Mt Cattlin, it remains bullish.

Morgans recently commented: “We don’t think spot prices are likely to remain at current levels forever but we think there is still plenty of scope for contract prices to increase further before settling down into a long term average.”

Liontown Resources Limited (ASX: LTR)

Analysts at Macquarie remains bullish on this lithium developer. It notes that the company has just signed a binding offtake agreement with electric vehicle giant Tesla. This complements its existing agreement with LG Energy Solution.

And with management in talks with other parties regarding a third and final offtake agreement, Macquarie feels this could be a boost to the Liontown share price if/when announced.

And with Macquarie putting an outperform rating and $2.50 price target on the company’s shares, there certainly is a lot of room for them to climb.

The post Analysts have just named these 2 ASX lithium stocks as buys appeared first on The Motley Fool Australia.

More reading

• Here are the 3 most traded ASX 200 shares on Monday
• ASX 200 midday update: Magellan smashed, Liontown signs Tesla deal
• Liontown share price drops despite Tesla deal
• Allkem share price falls on mixed lithium update
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor James Mickleboro has positions in Allkem 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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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.

Back in March, e-commerce giant Amazon (NASDAQ: AMZN) announced that it would conduct a 20-for-1 stock split, and in May, shareholders voted to approve it. The split has now officially taken effect, but what has actually changed?

For every Amazon share that previously existed, 20 have taken its place. In turn, the price of each Amazon share has shrunk in proportion. One share of Amazon traded at $2,447 last Friday prior to the split, so dividing that number by 20 means the new share price is $122.35. But the market valuation of Amazon has remained the same, at $1.2 trillion, which makes the stock split entirely cosmetic.

Companies like Amazon do this because it makes their stock more accessible to smaller investors, and the hope is that their shareholder base broadens with some of these new buyers. But fundamentally, the case for buying shares in Amazon stays exactly the same, and here’s what it is.

Finding success in diverse businesses

Amazon was founded in 1994 by Jeff Bezos, who set out to leverage a concept called e-commerce to sell books online. His idea was met with plenty of skepticism, but by 1997 the company had over 1 million customers and opted to list publicly on the tech-focused Nasdaq. It is now the largest online seller in the world.

But Amazon owes its success to its aggressive expansion into new markets, which is a strategy it still maintains today. It has driven lightning-fast growth to the point where even the world’s most famous investor, Warren Buffett, regrets not buying Amazon stock in the early days. Beyond e-commerce, the company now leads the entire cloud services industry through its Amazon Web Services (AWS) division, which has become the company’s profit engine.

It also boasts an advertising business that trumped the world’s largest video platform, Alphabet‘s YouTube, for revenue in 2021 with $31 billion. The company has a great opportunity to grow its ad segment thanks to its exciting assets like Amazon Music and the Amazon Prime streaming platform, which now holds the exclusive rights to the NFL’s Thursday Night Football. That’s not to disregard the contribution from Amazon’s flagship website, which still generates over 2 billion hits per month.

But Amazon continues to look forward. In 2019, it purchased a stake in up-and-coming electric vehicle maker Rivian Automotive, grabbing a piece of what could be a multi-trillion-dollar industry in the coming decades. The Rivian investment has been a double-edged sword so far, though, dealing volatile results to Amazon’s bottom line. 

A financial powerhouse

Amazon’s operational success has certainly flowed through to its sales and its bottom line. The company has generated over $477 billion in total revenue in the last 12 months across all of its business units, and it was also soundly profitable for the period, with $41.43 in earnings per share. 

Though with the stock split now in effect, investors should divide the earnings-per-share number by 20 to equal $2.07, bringing it in line with the higher number of shares outstanding. 

One segment, AWS, is punching above its weight as a contributor to Amazon’s profits. The cloud platform offers its customers hundreds of online services from data storage to artificial intelligence, and despite accounting for just 14% of Amazon’s total revenue in the past year, it’s responsible for all of its operating income. In fact, without AWS, Amazon would’ve incurred an operating loss for the period.

Since AWS revenue jumped by 36.5% year over year in the recent first quarter of 2022, it’s outgrowing the company’s total revenue, which increased by just 7.3%. It means AWS continues to become a larger piece of Amazon, indicating the company could become more profitable overall as time goes on.

The stock split might be a net positive

If Amazon’s shrunken share price results in a cohort of smaller investors flocking to buy the stock, it could help to lift the company’s valuation. That would be especially helpful in the current market environment where the Nasdaq-100 index trades in a bear market, having declined 25% from its all-time high.

Amazon stock is faring even worse with a 35% loss over a similar period. Investors are currently reconsidering their growth expectations across most technology stocks because of rising interest rates and geopolitical tensions, which could hurt consumer spending. 

But regardless, any effect from the stock split will be short-term in nature. Investors who jump into Amazon should do so with the intention of holding for a five- to 10-year period. After all, investors who have held onto the stock since the company went public in 1997 have earned 1,630 times their money. 

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

The post Amazon’s stock split has taken effect. Now what? appeared first on The Motley Fool Australia.

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• Amazon stock rallied today — here’s why now might be the time to buy
• 3 reasons to buy Amazon and 1 reason to hesitate
• 2 reasons Amazon stock is slumping today

Anthony Di Pizio has no position in any of the stocks mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Alphabet (C shares), and Amazon. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), and Amazon. 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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The Sky Network Television Limited (ASX: SKT) share price is tumbling in morning trade, down 6.3%.

Sky Network shares closed yesterday trading for $2.38 apiece and are currently at $2.23.

The early morning selling comes after the dual-listed, New Zealand-based satellite TV provider confirmed media speculations over a potential acquisition.

What acquisition is in the pipeline?

The Sky Network share price has come under pressure after the company confirmed recent speculation that it is in exclusive negotiations to acquire MediaWorks Holdings Limited’s radio and out-of-home advertising business.

Rumours began to circulate when Sky Network last month said it would hold off releasing any additional capital allocation and strategy updates until reporting its full-year financial results in August with an eye on “investment opportunities”.

MediaWorks radio networks include Today FM, Mai-FM, The Rock, and The Edge. The company is privately owned by Oaktree Capital Management and Quadrant Private Capital.

Sky Network stated: “The likelihood of a transaction proceeding is still highly uncertain with discussions and due diligence ongoing and incomplete.”

The company said that should the acquisition of Mediaworks proceed, it would not need to raise additional equity. However, the deal would need to be approved by an ordinary resolution by shareholders at an extraordinary shareholder meeting.

When it reported its half-year results on 24 February, Sky said it was “assessing opportunities to invest capital to accelerate the growth of the business, generate new revenue streams, and deliver improved returns for shareholders”.

Today the company’s board said it believes acquiring MediaWorks is in line with that strategy.

Sky Network share price snapshot

Following some difficult years, the Sky Network share price has rebounded over the past 12 months, up 44% despite this morning’s retrace. That compares to a 1% full-year loss posted by the All Ordinaries Index (ASX: XAO).

The company has a market cap of $403 million.

The post Sky Network share price tumbles 6% on acquisition news appeared first on The Motley Fool Australia.

More reading

• 2 ‘quality defensive’ ASX shares to see out rising interest rates: Wilsons
• Why is the Galileo share price soaring 9% on Tuesday?
• Appen shares still an attractive acquisition target: Citi
• Here are the best performing ASX dividend shares so far this year
• Investing is hard enough…

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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One thing is certain right now: uncertainty.

No one knows how long high inflation will last, when interest rates will stop rising, when the war in Ukraine will end — or if Australia, the US or the world will end up in recession.

Wilsons head of investment strategy David Cassidy said in a recent memo that the chaos will clear in the medium term. But in the meantime it might be an idea to bunker down.

“While we do not think the global economy will go into recession or inflation will remain elevated, we believe having an above-average allocation to quality defensives during this period is sensible until we get more clarity on the global economy.”

Ideally such “quality defensive” ASX shares shouldn’t just be about minimising downside risk.

“Quality defensives should also outperform in a slow-growth environment — not just in recessions — have pricing power in inflationary environments, and outperform over the long-term.”

So what sort of attributes does the Wilsons team look for in their definition of “quality defensive”?

Cassidy mentioned four characteristics that they target:

• Ability to compound earnings over time
• Low beta to the market (less volatility)
• Monopolistic position in the market or a clear market leader
• High return on equity

Two ASX shares in particular are excellent examples right now, which Wilsons currently lists on its Australian Equity Focus target list:

A giant in a recession-proof industry

Health and biotechnology giant CSL Limited (ASX: CSL) is the prototype of a stock that investors should hold right now, according to Cassidy.

“CSL is the definition of a quality defensive — with resilient earnings, high ROE and the ability to positively surprise the market.”

The idea is that consumers always need healthcare, regardless of what the economy is doing or how much they’re weighed down by their mortgages.

“Recessions rarely disrupt the need for medical care or medications,” said Cassidy.

“Many of these companies also have a competitive advantage through R&D capabilities or patents for their products/services.”

The CSL share price is down more than 8% for the year-to-date and in excess of 19% from its pre-COVID highs.

Poor performer ready to turn it around

According to Cassidy, another industry that doesn’t suffer from waning demand is insurance. 

“Households and businesses need insurance, whatever the economic conditions.”

And his pick in that sector is Insurance Australia Group Ltd (ASX: IAG).

Cassidy admits the company has had its issues in recent times.

“IAG has traditionally been a high-quality insurer, although this has been tested over the past 2 years with COVID, bushfires and perils.” 

In fact, in recent years IAG shares have turned out to be a poor investment even over the long term. The stock had dived 33.6% over the past five years.

But Cassidy is convinced its worst days are behind it.

“We think IAG’s turnaround is on track, and this should lead to strong earnings growth over the next 12 months.”

Many analysts agree with Cassidy. Six out of twelve analysts surveyed on CMC Markets currently rate IAG shares as a strong buy, with one other recommending it as a moderate buy.

The post 2 ‘quality defensive’ ASX shares to see out rising interest rates: Wilsons appeared first on The Motley Fool Australia.

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• 3 ASX shares to buy now (and one bonus): fund manager
• Brokers name 3 ASX shares to buy today
• 3 ASX 200 shares swimming in billions, besides banks and miners
• What’s in store for the CSL share price in June?

Motley Fool contributor Tony Yoo has positions in CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd. The Motley Fool Australia has positions in and has recommended Insurance Australia 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 Galileo Mining Ltd (ASX: GAL) share price is having a positive session on Tuesday.

In early trade, the cobalt and nickel explorer’s shares were up as much as 9% to $1.74.

The Galileo Mining share price has since pulled back but remains up 3% to $1.64.

Why did the Galileo Mining share price jump 9%?

Investors were bidding the Galileo Mining share price higher this morning amid speculation that the company could be a takeover target.

According to the AFR, the company has been tipped by fund managers to be a target of battery metals miner IGO Ltd (ASX: IGO).

This wouldn’t be an overly big surprise given that IGO currently owns an 8.9% stake in the company. It also has previously worked closely with Galileo Mining’s largest shareholder – mining magnate Mark Creasy.

In addition, IGO is understood to be looking for ways to offset declining production from its Nova mine, which is in relatively close proximity to Galileo Mining’s Norseman project.

Though, IGO is unlikely to make a move until drilling results are released. So, investors may have to wait patiently to see if anything materialises.

What is the Norseman project?

Galileo Mining’s 100%-owned Norseman project is 10km from the Western Australian town of Norseman.

It contains a cobalt-nickel JORC resource and additional prospects with potential for copper, nickel and cobalt mineralisation. Galileo notes that its tenure at Norseman comprises exploration and prospecting licenses covering a total area of 306 km2.

Yesterday the company revealed that it has started reverse circulation drilling at the Callisto discovery at Norseman, with a 4,000-metre program planned to run for approximately five weeks.

Galileo’s Managing Director, Brad Underwood, appears very optimistic on these drilling activities. He said:

The current drilling aims to expand on the early results with drilling designed at a 50 metre spacing across strike to be followed by drill lines along strike to the north.

The extensive prospective strike, combined with the thick and consistent mineralisation drilled to date, indicates the potential for a large mineralised system. Approximately 20 holes will be undertaken in this round of drilling and we look forward to updating the market with results from this exciting new discovery.

All eyes will be on these results in the coming weeks and months.

The post Why is the Galileo share price soaring 9% on Tuesday? appeared first on The Motley Fool Australia.

More reading

• Galileo share price dips 7% despite project milestone
• One broker’s outlook for lithium supply and demand and what it could mean for ASX lithium shares
• Why Bubs, IGO, Strike Energy, and Woodside shares are pushing higher
• Which ASX lithium shares are rebounding on Thursday, and which are not?
• Galileo Mining share price shrugs off market pressure, soars 16%

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

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The Appen Ltd (ASX: APX) share price has continued to be sold down by investors this week.

On Monday, the artificial intelligence data services company’s shares reached a new multi-year low of $6.08.

This was driven by weakness in the tech sector, its eviction from the ASX 200 index, and a broker note out of Citi.

What is Citi saying about the Appen share price?

On Monday, Appen lost one of its only remaining bulls when Citi downgraded its shares to a neutral rating and slashed their price target on them by 28% to $6.60.

The broker made the move in response to the company’s weaker than expected start to FY 2022. It notes that this “weakness was primarily due to one customer.” Citi believes that customer is likely to be Facebook based on its analysis.

In light of this poor start to FY 2022, the broker notes that Appen will need to have a very strong second half to have any chance of achieving its full year earnings guidance. This is something which Citi isn’t overly confident will materialise.

What about the takeover?

Citi also notes that Appen recently received a takeover approach from Telus International that was swiftly withdrawn once the details were made public.

While disappointing for short term shareholders, the broker suspects that it may not be the end of the story.

Citi highlights that Appen’s takeover approach demonstrates that demand for human labelled artificial intelligence training data still exists. And given its strong market position and share price collapse since 2020, it remains an attractive takeover target for a bigger player.

The Appen share price is having a better day on Tuesday. In early trade, the company’s shares are trading slightly higher at $6.23.

The post Appen shares still an attractive acquisition target: Citi appeared first on The Motley Fool Australia.

More reading

• Expert reveals what to do with 4 ASX shares in trouble
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• Appen and PolyNovo tumble after being kicked out of the ASX 200 along with these shares
• These are the 10 most shorted ASX shares

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

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If you are looking for ASX dividend shares that offer both capital appreciation and steady dividends, then this recap is a good place to start.

There is something magical about ASX shares that provide both dividends and capital appreciation. One without the other can still deliver great returns, but the power of compounding is in full force when the two are put together.

However, it can be hit and miss when scouting out companies that can consistently deliver on both avenues of wealth creation. Today, we are taking a look at the best performing ASX dividends shares in terms of share price performance so far this year.

High-yielding dividend shares delivering this year

New Hope Corporation Limited (ASX: NHC)

Making an appearance in the top three best performing ASX dividend shares so far this year is Australian coal producer, New Hope. The company easily beats out its next closest competition, Woodside Energy Group Ltd (ASX: WDS), by 28% — rising by 78% so far in 2022.

The stellar performance of this $3.3 billion coal mining company has coincided with a sizeable 147% lift in the fossil fuel commodity price. As a result, the trailing 12 months ending 31 January 2022 witnessed record revenues of $1.67 billion.

Currently, the company trades on a dividend yield of 6.2%, above the industry average of 4.6%.

Yancoal Australia Ltd (ASX: YAL)

Unfortunately for the ESG investors out there, the second-best performing ASX dividend share so far this year is another coal producer. Sporting a market capitalisation more than twice that of New Hope’s, Yancoal has captured the support of investors looking to cash in on the global energy crisis.

The Yancoal share price has skyrocketed 109% since the start of the year. For context, the S&P/ASX 200 Index (ASX: XJO) is 5% weaker than where it was before 2022.

A bounce back in profits has enabled juicier dividends from Yancoal over the past year. At present, the company is displaying a dividend yield of 9.2%.

Grange Resources Limited (ASX: GRR)

Finally, the ultimate best performing ASX dividend share of 2022 so far is none other than Grange Resources. While it may be relatively small compared to its iron ore producing peers, such as BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO), it hasn’t skimped out on returns.

The Grange Resources share price is up an astonishing 121% since the year began. Notably, the price of iron ore has had a less impressive run than coal, gaining 24% in the first five months of the year. Yet, that hasn’t stifled the excitement for this ASX dividend share.

Currently, Grange Resouces trades on a dividend yield of 7.1%.

The post Here are the best performing ASX dividend shares so far this year appeared first on The Motley Fool Australia.

More reading

• Why GrainCorp, New Hope, Tabcorp, and Woodside shares are pushing higher
• Appen and PolyNovo tumble after being kicked out of the ASX 200 along with these shares
• Why Appen, Elders, Predictive Discovery, and Yancoal shares are dropping
• Why these ASX coal shares could be ‘bigger than Ben-Hur’: fundie
• Here’s why the Yancoal share price is crashing 15% lower today

Motley Fool contributor Mitchell Lawler 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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You already know this, but investing can be hard.

And the higher your ambition, the harder it becomes.

At a base level, investing is working hard, spending less than you earn, and socking the surplus away.

Simple? Sure. But not easy.

We live in a consumer society. There’s always something else to buy.

There are the Jones’ to be kept up with.

An endless stream of marketing on telly, radio and online.

Instagram influencers to envy (and, they hope, to copy).

The kids want stuff. We want stuff.

And marketers specialise in making us want stuff.

(If Toyota is reading this, I’d love a brand new 79 Series LandCruiser, please. You know, just for research purposes.)

I don’t need a LandCruiser (despite what I tell my wife).

Our Hilux is perfectly capable (and probably more comfortable).

But I want one.

What the economists refer to as ‘delaying consumption’ isn’t easy.

And of course, the money I’d use to buy one is far, far better off invested, instead.

So that’s what I do.

Simple. But not easy.

But investing gets harder from there.

See, once you’ve saved a couple of bob, you need to work out what to do with it.

The simplest option is to just invest it in a market-matching low-cost exchange-traded fund (ETF).

But even that’s not easy.

Some years, you’ll lose money.

You work hard, invest regularly, keep costs low, and still end some years with less money than you had when you started.

That’s hard to stomach.

And hard to stick to.

But, of course, we have to.

Because, over time, the stock market has bad years, but more good years.

And the good years have added more than the bad years have taken away.

So, it makes sense to just keep going.

Again, simple. But not easy.

Let’s amp it up again.

Let’s say you want to try to do better than average.

You need to try to build a portfolio of individual companies that you think are likely to be market-beating.

And you know what?

You’ll be wrong, sometimes.

Some companies will just be duds.

Others will zig when the market zags.

And you won’t know, at the time, which is which.

So you do your research, carefully select your companies, and thoughtfully build your portfolio… knowing the whole time that you could just be dead wrong, but hoping you won’t be.

Simple, but not easy.

This time, it’s harder because of the basic maths. Everyone else who is picking stocks is trying to do precisely the same thing you are.

But, averages being averages, someone is going to lose for every person who has a win.

If the average is 10% and you manage to get 12%, someone else is getting 8%

(I know, fellow maths nerds… the weight of money means it’s not quite that simple, but just know that I know, and let’s move on, huh?)

And then there’s the impact of fees and taxes.

Don’t get me wrong – the endeavour of ‘stock picking’ can be truly worthwhile for those who get it right. A bloke called Buffett has done pretty well at it, over the years.

But, well, it can be hard. And not for everyone.

So, wondering why I’m telling you all this?

A couple of reasons.

First, I want you to know the game you’re playing, and to either help you mentally prepare, or to encourage you to play a different game. If you’re not cut out for stock picking – you don’t have the stomach for volatility, or the time and inclination to pick your own companies – then a low-cost, broad, index-based ETF is a wonderful option for many people.

But second, to then think about how much harder it would be if you (perhaps unwittingly) ratcheted up the degree of difficulty even further.

Imagine all of the above being true, and then trying to time the market on top of that?

Imagine trying to be a short–term trader, basing your buying and selling on what you think other people are thinking, and going to do?

I mean, it’s hard enough to work out whether today’s Woolworths Group Ltd (ASX: WOW) share price, for example, fairly values that business’ long term cash flows.

But imagine trying to guess what other traders might think about Woolies in a day, a week, a month or a year.

Will they be optimistic or pessimistic about the market next March?

Will they be chasing dividends or growth at that point?

Will they like Woolies’ next strategy update? (No, I’m not asking whether that strategy will be the right one… I’m asking how people will feel about the announcement itself!)

Doesn’t that sound like a bridge too far, difficulty-wise?

Now think about some of the high flyers (and huge losers) of the past few months.

It’s easy, in hindsight, to ascribe reasons to the things that happened.

But how many people truly expected them, before they happened?

And before you give yourself too much of a wrap, remember that if everyone knew those things, the share price would already have priced those things in!

Now let me ask you the most important question:

If you knew that, for example, the ASX would turn $10,000 into $160,000 between 1991 and 2021, would you have wasted time trying to ‘time the market’ or trade in and out, knowing that you risked making even less if you got the trades wrong?

Actually, I’ll add another, similar question:

If you knew Amazon.com, Inc. (NASDAQ: AMZN) (I own shares, for the record) was going to rise from $3 to over $2,000 over the first 25-odd years of its life as a public company, would you have worried about the 20-odd times the company’s shares fell 50% during the journey?

Of course those are easy answers in hindsight.

But doesn’t it make the overtrading and stress look, well, a little pointless?

And worse, a waste of time and effort?

No, not every company will be Amazon. And no, I can’t promise the ASX will deliver the same result in the next 30 years as it did in the last 30.

But trying to trade in and out of shares for a few percentage points seems like a pretty tough way to make a quid, doesn’t it?

And worrying about short-term volatility in either case feels a little silly, no?

There will be some people reading this, who disagree violently.

They want to watch their portfolios, trading in and out of positions regularly.

Good luck to them.

And I mean that both sincerely and as a warning.

I don’t wish anyone ill, financially or otherwise.

But I reckon they’re up against it.

Riding the waves of market volatility isn’t much fun.

But I reckon it’s the ‘ticket to the dance’ of long term wealth creation – annoying, sometimes frightening, but the occasional storms we have to sail through to get to our destination.

I don’t know of a better way to get there. But I do reckon that risking disaster to try to get there slightly faster or slightly earlier is a bad bet.

Fool on!

The post Investing is hard enough… appeared first on The Motley Fool Australia.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Scott Phillips has positions in Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon. The Motley Fool Australia has recommended Amazon. 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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