The Zip Co Ltd (ASX: ZIP) share price is finally heading in the right direction again on Thursday.

In morning trade, the buy now pay later (BNPL) provider’s shares are up over 4% to $1.06.

Why is the Zip share price storming higher?

Investors have been bidding the Zip share price higher today despite there being no news out of the company.

However, it is worth noting that the tech sector is performing a lot more positively today. For example, the S&P/ASX All Technology Index is up 0.4% at the time of writing.

And while the tech focused Nasdaq index was flat during overnight trade, futures contracts are pointing to a much-improved night of trade on Thursday. According to CNBC, futures are currently pointing to the Nasdaq index opening 1.2% higher.

This appears to have been driven by the release of a stronger than expected quarterly update by Meta (Facebook), which has boosted investor sentiment.

What else could be boosting Zip’s shares?

With the Zip share price falling to a new multi-year low on Wednesday, it’s possible that some investors believe its shares have been oversold and are buying them today.

Especially given that many of the most bearish brokers have price targets in or around the current level. While price targets are liable to change, as we see quite often, there may be some investors that finally believe a bottom has been found for the Zip share price.

Time will tell if that is the case.

The post Zip share price finally rebounds with its first positive session in 5 days appeared first on The Motley Fool Australia.

More reading

• Zip share price slides another 5% to new multi-year low of $1
• These are the 10 most shorted ASX shares
• Is the Zip share price set to sink below the $1 mark for the first time since 2018?
• Have ASX tech shares finally reached the bottom?
• Is the Zip share price weakness a buying opportunity?

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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/XLzl87J

The Paladin Energy Ltd (ASX: PDN) share price is in retreat, down 3%

Paladin closed yesterday at 83 cents per share and is currently trading for 80 cents.

Below we look at the highlights from the ASX uranium explorer and producer’s quarterly report for the 3 months ending 31 March.

What happened during the quarter?

The Paladin Energy share price is dipping after the company updated the market on its ongoing works to restart the Langer Heinrich Mine, which remained on care and maintenance during the quarter.

To that end, Paladin executed a fully underwritten $200 million institutional placement during the past quarter to fund the restart and recommence uranium production at the mine, located in Namibia.

On 31 March the company also announced a share purchase plan intended to raise another $15 million. The share purchase plan closed this past Tuesday, 26 April.

The mine restart project is slated to formally commence in July with early works activities to kick off right away. Paladin expects the mine to return to uranium production in 2024.

On other fronts, the company said it is continuing to progress with its “significant exploration portfolio” in Australia and Canada. It also continues to engage with global nuclear energy utilities.

As at 31 March Paladin Energy held cash of US$38.8 million, not including the proceeds from its institutional placement.

What did management say?

Commenting on the quarter gone by, Paladin Energy’s CEO, Ian Purdy said:

With the strength of the company’s existing uranium sales offtake with CNNC combined with the recent successful tender award and the continuing strong uranium market fundamentals, Paladin can now confidently work towards a formal commencement of the Langer Heinrich Mine Restart Project.

The extensive workstreams we have conducted reinforce our confidence in Langer Heinrich as a low risk, robust, long-life operation that is poised to take advantage of the improving uranium market conditions and deliver sustainable value creation for all of our stakeholders.

Paladin has an offtake agreement with CNNC Overseas Uranium Holding Limited for up to 25% of the Langer Heinrich future life-of-mine production.

Paladin Energy share price snapshot

The Paladin Energy share price was a strong performer over the past 12 months, gaining 112%. By comparison, the All Ordinaries Index (ASX: XAO) is up 4% over the past year.

The post Paladin Energy share price dips as investors await restart of uranium mine appeared first on The Motley Fool Australia.

More reading

• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• These were the worst performing ASX 200 shares last week
• Here are the 3 most traded ASX 200 shares on Friday
• What happened to the Paladin Energy share price on Tuesday?
• These were the best performing ASX 200 shares last week

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 Bruce Jackson.

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

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

After a massive 12% sell-off Tuesday, shares of leading electric vehicle maker Tesla (NASDAQ: TSLA) were slightly rebounding Wednesday morning. Tuesday’s crash came as investors processed the news that the board of Twitter (NYSE: TWTR) had agreed to sell the social media company to Tesla CEO Elon Musk for $44 billion.

That news rattled Tesla investors initially, but they appear to be regaining some of their optimism about the EV stock again. As of noon ET, Tesla shares were up by about 2.7%.

So what 

Some investors appear to be concerned that Musk — who also leads the space exploration company SpaceX and is deeply involved in other start-ups — could divert too much of his attention away from Tesla and toward Twitter. 

They are also likely concerned about the way the EV company’s stock will be tangled up with the Twitter deal: Musk will put up tens of billions of dollars worth of Tesla shares as collateral for the loan he’s taking out to partially finance the purchase. Wedbush analyst Daniel Ives highlighted this issue in an investor note Wednesday, and said that the Twitter transaction “was never ideal” for Tesla investors. 

Given all that, it’s possible that bargain-hunting investors picking up shares on the dip are driving Tesla’s moderate share price rise Wednesday. 

Now what 

While it’s not surprising that some traders have been concerned about what Musk’s Twitter purchase will mean for Tesla, I think investors are right to be ignoring some of the harshest takes on the stock right now. 

Musk is clearly committed to the EV company, and even as he’s put time into launching and managing other businesses, Tesla has still grown at a rapid pace. While it’s likely that Musk will assert considerable influence over Twitter, he’s also said that he won’t join the social media company’s board. 

All of which means that investors probably shouldn’t be too concerned that too much of Musk’s attention will be taken away from Tesla. 

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

The post Why Tesla stock is bouncing back today appeared first on The Motley Fool Australia.

More reading

• Why Tesla stock just crashed 7%
• Why Dogecoin is rising today
• Why Tesla shares dropped on Monday
• Tesla stock: Bull vs. Bear
• Is it too late to buy Tesla shares?

Chris Neiger 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 and Twitter. 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 Bruce Jackson.

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

from The Motley Fool Australia https://ift.tt/NzI1Oav

The fund management business BetaShares has come out with some suggestions for exchange-traded funds (ETFs) that could protect against inflation.

BetaShares chief economist David Bassanese notes there has been a shift in global interest rate expectations since last year, with interest rates in the United States now expected to reach 1.9% by the end of the year and 2.8% by the end of 2023.

With global inflation spurred on by the Russian invasion of Ukraine, Mr Bassanese has pointed to some ASX ETFs in the commodities sector that may be of interest to investors in this inflationary environment.

Commodity ETFs

The four ETFs that BetaShares refer to relate to global energy, gold and food producers, and Australian resource companies.

They include:

• BetaShares Global Energy Companies ETF (ASX: FUEL)
• BetaShares Australian Resources Sector ETF (ASX: QRE)
• BetaShares Global Gold Miners ETF (ASX: MNRS)
• BetaShares Global Agriculture Companies ETF (ASX: FOOD)

Mr Bassanese said these ETFs had been performing thanks to the strength of oil, gold, food, and iron ore prices. More broadly, many commodity shares were performing well.

BetaShares said that valuations were “still attractive” when looking at price to earnings (p/e) ratios compared to long-run averages.

However, commodities aren’t the only industry that BetaShares said could benefit in the current environment.

Global banking ETF

The other high-performance area was the global banking sector.

Mr Bassanese said that the banking sector “tended to do relatively well in an environment of rising interest rates”, referring to the BetaShares Global Banks ETF (ASX: BNKS) for these inflationary times.

The BetaShares chief economist said:

This is because rising rates tend to be associated with stronger profits margins as medium-term bank lending rates tend to widen by more than the cost of short-term funding costs. Rising credit demand due to strong economic growth also tends to be supportive of global banks.

Mr Bassanese wrote that the same attractive valuation argument was also broadly held for the financial sector.

Australian interest rates to increase?

Mr Bassanese said that he expected Australian interest rates to rise by 15 basis points next week, which is early May 2022. He said it made sense for the RBA to “start off slow”, with another 25 basis point increase expected in June.

Interest rates are being increased by several central banks around the world, including the US Federal Reserve.

The post 5 ASX ETFs to combat inflation: fund manager appeared first on The Motley Fool Australia.

More reading

• Which ASX 200 shares have historically performed well during rising inflation?
• 3 high quality ETFs for ASX investors to buy today
• ASX 200 commodities players were the major winners in March. Take a look
• Here are the 5 best-performing ASX exchange-traded funds over the March quarter
• What sent ASX mining shares flaming higher in March?

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. owns and has recommended BetaShares Global Banks ETF – Currency Hedged and BetaShares Global Energy Companies ETF – Currency Hedged. 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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/ArPCZH0

The Cochlear Limited (ASX: COH) share price is trading lower on Thursday morning.

At the time of writing, the hearing solutions company’s shares are down 1% to $228.92.

Why is the Cochlear share price falling?

Investors have been selling down the Cochlear share price on Thursday following the release of an acquisition announcement after the market close yesterday.

According to the release, Cochlear has agreed to pay A$170 million to acquire cochlear implants and bone conduction hearing solutions provider Oticon Medical from Denmark-based hearing health care company Demant. This follows Demant’s decision to exit its hearing implants business activities.

As part of the transaction, Cochlear has agreed to provide ongoing support for Oticon Medical’s base of more than 75,000 hearing implant recipients, which includes cochlear and acoustic implants.

Though, the deal still has a few closing conditions to satisfy before it completes. These include customary closing conditions and the receipt of competition approvals in jurisdictions where the transaction meets relevant notification thresholds.

If all goes to plan, the acquisition will be funded from its existing cash balances and is expected to close in the second half of 2022.

What’s has been the reaction?

According to a note out of Goldman Sachs, its analysts appear to believe the deal could be a good one. And while it won’t make much of a difference to its market share, the broker highlights that it provides greater scale and supports industry pricing.

Goldman commented: “[G]reater scale would allow COH to further re-invest into product development (as it has traditionally done) which would further entrench the company’s market position. The acquisition of Oticon would likely also be supportive of industry pricing, given that Oticon was previously considered to be one of the market challengers with below industry average pricing.”

Management commentary

The market doesn’t appear as convinced based on the Cochlear share price performance. Particularly given that the acquired business is currently operating at a loss.

Nevertheless, Cochlear’s CEO and President, Dig Howitt, is very positive on the deal. He said:

“The acquisition of Oticon Medical will provide us with greater scale and will enable us to increase our investments in R&D and market growth activities. While Cochlear is a market leader in implantable hearing, we are a small player in the hearing loss segment where hearing aids remain the primary treatment option.

Our goal is to improve the penetration of implantable hearing solutions, building customer awareness and confidence, and offering more patients hearing solutions best suited to their individual needs.”

Mr Howitt also addressed the lack of profits from Oticon Medical. He added:

“Oticon Medical is expected to add AUD75‐80 million to annual revenue. The business is currently loss making. Our priority post‐closing of the transaction will be to determine and implement a plan that returns the business to profitability as quickly as possible. Integration costs, which include the development of compatible next generation sound processors, are yet to be determined and could range from $30‐60 million. We continue to target a long‐term net profit margin of 18%.”

The post Cochlear share price falls on ‘loss making’ Oticon Medical acquisition appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• The Cochlear dividend is being paid today. Here’s what you need to know
• The Cochlear share price has shaved 13% from its all-time high. Is now the time to pounce?
• ASX 200 healthcare shares were chronically ill last quarter. Take a look
• What’s the outlook for the Cochlear share price in April?

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 Cochlear Ltd. The Motley Fool Australia has recommended Cochlear Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/gjl8Jqm

The Fortescue Metals Group Limited (ASX: FMG) share price is rising on Thursday morning.

In early trade, the iron ore miner’s shares are up 3% to $20.75 following the release of a mixed third quarter update.

Fortescue share price higher on Q3 update

• Iron ore shipments up 10% year on year to 46.5 million tonnes (mt)
• Average revenue up 34% quarter on quarter to US$99.52 per dry metric tonne (dmt)
• C1 costs up 3% quarter on quarter to US$15.78 per wet metric tonne (wmt)
• Net debt of US$2.4 billion
• Shipments guidance upgraded to between 185mt and 188mt
• C1 costs guidance increased to between US$15.75 and US$16.00 per wmt

What happened during the quarter?

For the three months ended 31 March, Fortescue reported a 10% year on year increase in shipments to 46.5mt. This means that shipments for the first nine months of FY 2022 have now reached a record high of 139.5mt.

Pleasingly, this shipments growth comes at a time of higher prices, with Fortescue commanding an average of US$99.52 per dmt during the quarter. This represents a revenue realisation of 70% of the Platts 62% CFR Index, which is up from 68% during the second quarter.

Partially offsetting this was a 3% quarter on quarter increase in Fortescue’s C1 costs to US$15.78 per wmt. This was driven largely by inflation across key inputs.

Management commentary

Fortescue’s Chief Executive Officer, Elizabeth Gaines, was very pleased with the company’s quarterly performance.

She said: “Fortescue’s excellent operating performance continues to drive strong results, with shipments of 46.5mt in the third quarter contributing to record shipments in the nine months to 31 March 2022. This strong performance is underpinned by the successful delivery and ramp up of the Eliwana project, and execution of our integrated operations and marketing strategy, resulting in the upgrade to FY22 shipment guidance to 185 – 188mt.”

“Against the backdrop of a record performance in our iron ore business and our focus on decarbonisation and green energy, Fortescue is well placed to finish the financial year strongly, as we continue to meet demand from our customers and deliver on our strategic priorities,” Ms Gaines added.

Outlook

As mentioned above, the company has increased its shipments guidance to between 185mt and 188mt. This compares to its previous guidance of 180mt to 185mt.

However, taking some of the shine off this was an increase to its costs guidance. Fortescue now expects its C1 costs to between US$15.75 and US$16.00 per wmt. This is up from US$15.00 to US$15.50 per wmt previously, reflecting inflation across key input costs.

And while the company has narrowed its FY 2022 capital expenditure guidance (excluding FFI) down to US$3 billion to US$3.2 billion from US$3 billion to US$3.4 billion, it has increased its Iron Bridge Magnetite project capital estimate.

The latter has been revised to US$3.6 billion to US$3.8 billion, up from its previous estimate of US$3.3 billion to US$3.5 billion. This has been driven by delays caused by ongoing supply chain issues. First production is now planned for the March 2023 quarter, instead of its previous guidance of December 2022.

The post Fortescue share price charges higher on Q3 update and shipments guidance upgrade appeared first on The Motley Fool Australia.

More reading

• Cash generation among ASX 200 iron ore shares will ‘be significant’ in 2022: expert
• Why is the Fortescue share price outperforming today?
• 3 ASX 200 mining shares defying today’s sell-off to surge higher
• Own the Vanguard Australian Shares High Yield ETF? Here’s what you’re invested in
• Here are the 3 most heavily traded ASX 200 shares on Tuesday

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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/Ll0kVnz

Market watchers would be forgiven for not knowing Qantas Airways Limited (ASX: QAN) is a dividend share.

It’s been a long time since the iconic ‘flying kangaroo’ paid out a portion of its earnings to investors.

So, why has the S&P/ASX 200 Index (ASX: XJO) staple been holding out on its dividends? Let’s take a look.

As of Wednesday’s close, the Qantas share price is $5.45. It has gained 5.8% year to date.

Meanwhile, the ASX 200 has slipped 4.33%.

When was Qantas’ last dividend?

The last time those invested in Qantas shares received a dividend from the company was way back in financial year 2019.

That year saw them banking a 12-cent interim dividend and a 13-cent final dividend, both fully franked.

It’s worth noting that Qantas ended financial year 2019 in the red. It recorded a 6.5% year-on-year fall in statutory profit after tax.

Readers might be able to guess what happened next. The COVID-19 pandemic took hold in Australia in March 2020, to the detriment of the travel sector.

As borders slammed shut and demand nose-dived, Qantas deferred the payment of its 13.5-cent interim dividend, promised in February 2020. However, come June 2020, the dividend had been revoked entirely.

On cancelling the dividend, Qantas stated:

This uncertainty has now crystallised into a significant detrimental impact on the group’s earnings and cash position.

Further, the fully franked nature of the interim dividend was based on franking credits expected from taxable profits in the second half, which will now not materialise.

Accordingly, the board has decided to revoke the interim dividend, avoiding the outflow of $201 million of cash and helping to maintain strong liquidity in the face of this unprecedented crisis.

Qantas also cancelled a planned off-market buyback, underwent a $1.9 billion capital raise to boost its bottom line, and stood down the majority of its staff in 2020.

Sadly, Qantas’ COVID-19 challenges didn’t end there.

In fact, the airline recorded a $1.28 billion underlying loss before tax for the 6 months ended 31 December 2021, mainly due to the pandemic.

Perhaps unsurprisingly, there’s been no sign of a dividend from the company since the onset of COVID-19.

But with restrictions easing and demand for travel returning, the future might be brighter for Qantas, its shares, and its dividends.

The post When did Qantas last pay a dividend? appeared first on The Motley Fool Australia.

More reading

• Qantas share price climbs 3% as international travel garners speed
• Why are ASX 200 travel shares taking off on Wednesday?
• Qantas share price slides following Easter travel woes
• Here are the 5 best performing ASX travel shares of 2022 so far
• These were the best performing ASX 200 shares last week

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 Bruce Jackson.

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

CSL Limited (ASX: CSL) shares have had a woeful couple of weeks, dragged down by the broader ASX market.

Despite navigating its way through challenging market conditions caused by COVID-19, the company posed a solid set of numbers from its half year results.

At Wednesday’s market close, CSL shares finished 1.28% lower to $265.89. For context, the S&P/ASX 200 Index (ASX: XJO) fell 0.78% to 7,261.20.

Below, we take a look at CSL’s most recent financial update and how brokers are viewing the global biotech’s shares.

How did CSL perform for the first half?

For the first half of FY22, CSL reported that COVID-19 tampered the performance of CSL Behring while boosting its Seqirus business.

In particular, revenue from CSL Behring stood the same when compared to the prior corresponding period. However, its Seqirus business delivered robust growth, achieving a 17% increase in revenue over H1 FY21.

The company stated that global demand for its therapies remain strong, particularly with significant growth in seasonal influenza vaccines. The latter is due to the COVID-19 pandemic driving high rates of people getting protected from the flu.

Despite the difference, both segments contributed to a 4% lift in revenue to US$6,041 million.

Nonetheless, group earnings before interest and tax (EBIT) fell 8% to US$2,215 million caused by a number of increased costs. This included research and development expenses as trials resumed post COVID-19 pause. Management is forecasting these costs to take up estimated FY22 revenue of between 10% to 11%.

Overall, the company to recorded a 2.8% drop in in net profit after tax (NPAT) to US$1,760 million.

What were the challenges?

While the results themselves were in line with expectations, CSL revealed that it also continues to face some challenges.

It stated that its core franchise, the immunoglobulin portfolio, has been impacted by industrywide constraints on collecting plasma in FY21.

Nonetheless, CSL responded by implementing multiple initiatives across its plasma collections network. This has given rise to significant improvement in plasma volumes collected.

It noted that plasma numbers were 18% higher than H1 FY21, but still slightly down on 2019 levels.

CSL opened 18 new facilities in the first half of FY22 to attract lapsed and new donors through its doors.

For the remainder of the financial year, the company plans to open another 35 centres, expanding its presence, mostly across the United States.

What do the brokers think?

After reporting its first half results, a number of brokers rated the company with varying price points.

The team at Morgans cut its price target for CSL shares by 2.1% to $327.60.

In addition, Macquarie had a similar outlook, raising its rating by 0.8% to $327.50.

Based on both brokers, this implies a potential upside of around 23% based on the current CSL share price.

However, on the other side of the scale, Morgan Stanley raised it price target by 7.9% to $302.00.

Furthermore, RBC Capital Markets slashed it view by 1% to $296.00 apiece.

The most recent broker note came from RBC Capital Markets earlier this month, slashing its view by 1% to $296.00. In contrast, this still implies an upside of about 11.3% from where CSL shares trade.

CSL share price review

Over the past 12 months, the CSL share price has seesawed following mixed investor sentiment across the market.

The company’s shares touched a 52-week high of $319.78 in November, before falling to a 52-week low of $240.10 in February.

Based on current valuations, CSL has a market capitalisation of roughly $128.08 billion.

The post Is the CSL share price a bargain heading into May? appeared first on The Motley Fool Australia.

More reading

• Here’s what the 5 biggest companies on the ASX 200 today were worth in 2000
• How does the CSL dividend compare to its competitors?
• Analysts name 2 of the best blue chip ASX 200 shares to buy now
• Why Morgan Stanley says the CSL share price can hit $400 by 2025
• Why Bellevue Gold, CSL, Endeavour, and Serko shares are pushing higher today

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. owns and has recommended CSL Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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

The price of gold has fallen in recent memory despite the current turmoil impacting the global markets. In times of uncertainty and volatility, the yellow metal is traditionally seen as a safe haven.

During March 2022, the spot price of gold has spike above the psychological US$2,000 per ounce barrier before quickly retracing.

In that brief moment, gold hit a multi-year high of US$2,070.13, as investors reallocated their portfolio assets.

At the time of writing, the price of gold is fetching for US$1,890.57 per ounce. This means that the precious metal has lost 4.13% since the start of this year.

What’s weighing down the price of gold?

If history is anything to go by, gold should be gleaming to record highs today.

Changes in interest rates, inflation and demand for gold jewellery and bullion along with Russia’s invasion of Ukraine should be valid reasons. However, the price of gold has dropped almost 3% in the past month.

For example, China is a key market for gold purchases, particularly gold jewellery.

While the Asian giant is under tough COVID-19 restrictions, with shops remaining closed, this is expected to severely weaken demand.

And should the situation persist and disposable incomes of consumers are affected, then depressed demand may remain. Low demand in a key market such as China or India can drag down the price of gold.

In addition, with interest rates likely to lift, this can also drive investors away from the yellow metal.

There is a correlation as when interest rates are low, this reduces the opportunity cost of holding non-yielding bullion. On the other hand, when interest rates rise, investors begin to shift from gold to bonds.

Can gold break the psychological US$2,000 barrier?

The current environment is extremely fluid, given the number of macro factors that are occurring on the world stage.

Inflation, rate hikes, geopolitical tensions and the unpredictability of global markets is influencing the price of gold.

Although, it appears the market has already priced in potential interest rate rises, gold could surge yet again. This is because of the extremely high levels of inflation which could dent economic growth, leading to slower-than-expected rates hikes.

Looking at the two largest ASX gold mining companies, Newcrest Mining Ltd (ASX: NCM) and Northern Star Resources Ltd (ASX: NST), their shares have dipped 6.45%, and 15.85%, respectively in the past week.

For gold prices to break the US$2,000 barrier, an escalation in the Russian war or drawn-out rate hikes are needed.

The post Can the gold price surge above US$2,000 again this year? appeared first on The Motley Fool Australia.

More reading

• Why Appen, Block, Life360, and Northern Star shares are dropping
• Why aren’t ASX gold shares performing better in these uncertain times?
• ASX 200 midday update: Coronado has record quarter, Life360 and Northern Star sink
• Northern Star share price tumbles on guidance update
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Aaron Teboneras has positions in Northern Star Resources 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 Bruce Jackson.

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

In February, the AGL Energy Ltd (ASX: AGL) board cut its interim dividend by 60% as the energy company released its first-half results. This prompted a short slump in the company’s shares at the time before the AGL share price rebounded and headed north again.

At Wednesday’s market close, AGL shares were trading at $8.30 apiece.

Below, we dive into the AGL dividend policy and its payout ratio.

A look at AGL’s dividend history

On 30 March, the company paid out an FY22 interim dividend of 16 cents — considerably lower than the 41 cents declared in the prior corresponding period.

Management noted the lower payout would enable AGL Australia and Accel Energy to manage capital for future growth, and maintain debt.

However, when measuring up against prior dividend payments, we need to go back to 2007 to see a lower dividend from AGL.

In addition, the last three AGL dividends paid to shareholders have been unfranked, in contrast to the previous eight years. This means those eligible for any recent dividends missed out on the tax credits.

The FY21 full-year dividend stood at 75 cents, which compares to the 98 cents recorded in the 2020 financial year.

And with FY22’s interim dividend at 16 cents, the final dividend is unlikely to match FY21’s full-year dividend.

More on AGL’s dividend payout ratio

In its H1 FY22 results, AGL delivered net cash from operating activities of $661 million, up 9% on H1 FY21. This increase was largely due to an uptick in working capital, which included a positive movement in green certificate assets and a large inflow from margin calls.

AGL said that this largely offset a reduction in earnings.

On the bottom line, underlying net profit after tax (NPAT) dropped to $194 million, down 41% from the prior comparable period.

The company had approximately $700 million in cash and undrawn debt facilities at the end of December.

The interim dividend was in line with AGL’s dividend policy to target a payout ratio of 75% of underlying profit after tax. The payout ratio is essentially the amount of a company’s earnings per share (EPS) that it pays out in dividends.

Following AGL’s upcoming demerger, the board proposes the respective dividend policies for each entity. They are as follows:

• AGL Australia: 60% to 75% of underlying NPAT
• Accel Energy: 80% to 100% of free cash flows after servicing net finance costs

AGL share price summary

In 2022, the AGL share price has continued to rise in value, gaining more than 35% for investors.

However, when factoring in the last 12 months, its shares are in the red, down almost 5%.

AGL has a trailing dividend yield of 6.02%, and a market capitalisation of roughly $5.58 billion.

The post How much is the AGL dividend payout ratio? appeared first on The Motley Fool Australia.

More reading

• Why is the AGL share price outperforming today?
• Own AGL shares? Experts weigh in on outage fallout
• Why AGL, Hub24, Rio Tinto, and Zip shares are dropping
• Faults and financials: Why is the AGL share price getting zapped 6% today?
• ASX 200 midday update: Ramsay rockets and Rio Tinto disappoints

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 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 Bruce Jackson.

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