The Fortescue Metals Group Ltd (ASX: FMG) share price is in the green today.

Fortescue shares are currently trading at $20.10, a 1.72% gain. In contrast, the S&P/ASX 200 Index (ASX: XJO) is 0.68% lower.

Let’s take a look at what could be impacting Fortescue today.

Why is Fortescue rising?

Fortescue is not the only ASX 200 mining giant on the rise today, but it is outperforming its peers. The Rio Tinto Ltd (ASX: RIO) share price is 0.37% in the green today, while BHP Group Ltd (ASX: BHP) is 1.12% higher.

Improving iron ore prices could be helping Fortescue and fellow iron ore explorers. The iron ore price climbed 0.37% to US$137 a tonne, Trading Economics data shows. This follows iron ore prices plunging 9.7% ahead of yesterday’s trade, sending the Fortescue, BHP, and Rio Tinto share prices lower.

However, Commonwealth Bank Australia (ASX: CBA) mining and energy commodities research director Vivek Dhah is optimistic about iron ore profits in the future. He places a US$120 to US$160 price target on the commodity in 2022. In comments reported by ABC, he said:

When it comes to the profitability of Australia’s iron ore sector, it is still very very strong. We sit very fortunately as the lowest cost producers of iron ore and, together with some Brazilian operations, I think that’s going to be very profitable.

The cash generation is going to be significant.

In other news, Fortescue Future Industries is on a trademark push, the Australian Financial Review reported. The company has filed 54 green energy-related trademarks in Australia. Fortescue Future Industries is the green hydrogen-related subsidiary of FMG.

Fortescue is due to release its quarterly production report tomorrow, 28 April.

Share price snapshot

The Fortescue share price has climbed nearly 5% year to date, although it is 12% lower in the past year.

In contrast, the benchmark ASX index has returned about 3% in the last year.

Fortescue commands a market capitalisation of about $61.9 billion.

The post Why is the Fortescue share price outperforming today? appeared first on The Motley Fool Australia.

More reading

• 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
• Sinking iron ore price sends ASX 200 mining shares tumbling
• ASX 200 stocks dive 2.4% in worst trading day since Ukraine crisis hit

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.

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Shares of Core Lithium Ltd (ASX: CXO) are gaining steam in afternoon trade on Wednesday following the release of its quarterly activities and cash flow update.

At the time of writing, the Core Lithium share price is trading 1% higher at $1.35 after ratcheting up from a low of $1.27 at the open of trade.

The S&P/ASX 300 Metals & Mining Index (ASX: XMM) is also tracking higher today after a shaky start and is now 63 basis points higher. Whilst it’s quite difficult to establish a causal relationship between moves in the index and the Core Lithium share price, it is leading the broader sector at the time of writing.

Core Lithium advances on Finnis project

Key highlights for the quarter ended 31 March 2022 include:

• Core Lithium reached a landmark binding Term Sheet with US electric vehicle maker Tesla
• Also advanced construction activities at the Finniss Project
• Completed the acquisition of highly prospective Mineral Leases adjacent to Finniss
• Reported significant drill results at BP33 and Carlton deposits
• Announced the resignation of managing director, Stephen Biggins
• Joined the ASX 300 Index

What else happened for Core Lithium last period?

Core Lithium advised that construction and mining activities commenced at the Finnis site in late 2021. During the period, it instilled a 7km water pipeline whilst starting works on draining control and sediment control infrastructure.

“Development of the Finniss Lithium Project continues to run according to schedule with site activities during the current quarter to focus on the pre-strip needed to uncover ore by about mid-year and the erection of the DMS plant,” the company remarked.

Core Lithium also came to an accord with US electric vehicle maker Tesla for the supply of up to 110,000 tonnes of lithium spodumene concentrate from its Finnis project over a term of 4 years.

Pricing will be referenced to the market price of spodumene concentrate under the agreement, with ceiling and floor caps in place.

It doesn’t end there with Tesla either. In addition to the commitment, Tesla has agreed to potentially “assist with the assessment and possible development of Core’s Stage 3 expansion”, subject to conditions.

Core Lithium also reported positive results and assays from drilling at its BP33 and Carton deposits, both of which were completed during the 2021 season.

The company also joined the ASX 300 index during the period as well after its market capitalisation saw extensive gains.

What’s next for Core Lithium?

Works at the Finnis project are continuing full steam ahead with earthworks currently on schedule, Core Lithium says.

“[T]he establishment of access roads and water pipelines, while water management infrastructure, administration areas and communication facilities are well advanced,” it notes.

Upon pad completion, construction of the dense media separation (DMS) plant will start, due for April 2022.

“[That] will pave the way for Primero Group to commence plant construction activities,” Core Lithium noted.

Core Lithium also completed the acquisition of tenements forming the Shoebridge Project for $250,000 plus a royalty of 2%. The company has the option to buy back the royalty for $10 million.

Core Lithium share price snapshot

In the last 12 months, the Core Lithium share price has soared by more than 428% and is now up 133% this year to date.

During the previous month of trade, shares have curled up by another 13%.

The post Core Lithium share price charges higher amid quarterly update appeared first on The Motley Fool Australia.

More reading

• Why is it such a mixed day of trade for ASX lithium stocks?
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• Why is the Core Lithium share price powering up 7% today?

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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.

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Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a large number of broker notes this week.

Three ASX shares brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Airtasker Ltd (ASX: ART)

According to a note out of Morgans, its analysts have retained their add rating but trimmed their price target on this small jobs marketplace provider’s shares to $1.15. Morgans was pleased with Airtasker’s quarterly update, which revealed further solid growth in gross marketplace volume. In addition, the broker was pleased with the traction it is gaining in the UK and US markets. The Airtasker share price is trading at 52 cents this afternoon.

Nufarm Ltd (ASX: NUF)

A note out of Bell Potter reveals that its analysts have retained their buy rating and lifted their price target on this agricultural chemicals company’s shares to $7.85. This follows the release of a half year trading update which revealed earnings well ahead of the broker’s expectations. Nufarms expects underlying EBITDA of $320 million to $340 million for the half, compared to Bell Potter’s $241 million estimate. The broker remains positive on the future, particularly given the creation of new revenue streams in oils and biofuels. The Nufarm share price is fetching $6.80 on Wednesday.

South32 Ltd (ASX: S32)

Analysts at Citi have retained their buy rating and $5.50 price target on this mining giant’s shares. According to the note, South32’s quarterly update was reasonable but marginally weaker than it was expecting. And while Citi has trimmed its FY 2022 estimates to reflect higher costs, this has been offset by increases to future period earnings from raised commodity price assumptions. Outside this, the broker highlights that South32 remains the cheapest of the large cap Australian miners. The South32 share price is trading at $4.58 today.

The post Top brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

More reading

• Own the Vanguard Australian Shares High Yield ETF? Here’s what you’re invested in
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• Why Jumbo, Nufarm, Pushpay, and Vulcan Steel charged higher

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 recommended Airtasker Limited. 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.

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The Pointsbet Holdings Ltd (ASX: PBH) share price is flopping today.

It is currently 7.62% lower than its previous close, with stock in the bookmaker swapping hands for $2.79.

That’s a slight improvement on earlier today, however, when the PointsBet share price plunged to a new 52-week low of $2.76 – the lowest it’s been since March 2020.

But it’s not alone in the red today. Right now, the All Ordinaries Index (ASX: XAO) and the S&P/ASX 200 Index (ASX: XJO) are both struggling. They’ve fallen 0.5% and 0.51% respectively.

So, what might be weighing on Pointsbet’s stock on Wednesday? Let’s take a look.

What’s going on with the PointsBet share price?

The Pointsbet share price is suffering on Wednesday despite no news from the company.

The last time the market heard a word from the bookmaker was on 13 April, when it released an update on its iGaming operations.

However, its home sector – the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) – is also falling today.

The sector has slipped 0.89% at the time of writing, with Pointsbet’s stock coming in as its biggest weight.

 While there’s no obvious reason for its movements today, that might change come Friday when PointsBet is expected to release its results for the three months ended 31 March 2022.

Today’s fall leaves the PointsBet share price 19% lower than at the end of last Wednesday’s session. It has also dropped 60% in 2022 and 77% since this time last year.

The post The Pointsbet share price is tumbling 7% on Wednesday. What’s going on? appeared first on The Motley Fool Australia.

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• Here’s why the PointsBet share price is charging higher today
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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. owns and has recommended Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Macquarie share price is suffering today amid a fall in global bank shares.

The Macquarie Group Ltd (ASX: MQG) share price is currently trading at $200.66, a 1.72% fall. For perspective, the S&P/ASX 200 Financials Index (ASX: XFJ) is down 1.19%.

Let’s take a look at what could be impacting this banking giant today.

Global bank shares slide

The Macquarie share price is falling amid a global downturn in bank shares in United States and European markets overnight.

Wells Fargo & Co (NYSE: WFC) slid 2.75%, Bank of America Corp (NYSE: BAC) dropped 2.25% and JPMorgan Chase & Co (NYSE: JPM) fell 2.94% in the United States. Bank stocks suffered amid US Treasury yields declining, CBS reported. Global economy fears including the COVID-19 situation in China and Ukraine war are also dampening risk appetite.

European banks suffered as well, with the major bank index STOXX Europe 600 Index (SX7P: STX) dropping 2.25%. This was despite strong earnings from Swiss Bank, Reuters reported.

Macquarie appears to be feeling this pinch slightly more than other ASX banking shares today. The National Australia Bank Ltd (ASX: NAB) share price is down 1.24% while Commonwealth Bank of Australia (ASX: CBA) is falling 1.23%. Meanwhile, the Australian and New Zealand Banking Group Ltd (ASX: ANZ) is sliding 1.74%, and Westpac Banking Corp (ASX: WBC) is down 1.46%.

However, looking ahead, brokers are predicting the Macquarie share price has upside in the future. JP Morgan has a $227 price target on the company’s share price, while Jefferies and Morgan Stanley recently valued the company at $245.

Macquarie share price snapshot

The Macquarie share price has surged 26% in the past year, but it is down 2.3% year to date.

For comparison, the ASX 200 Financials Index has climbed 7% in a year.

Macquarie has a market capitalisation of nearly $77 billion.

The post Why is the Macquarie share price getting hammered today? appeared first on The Motley Fool Australia.

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• Why is the Macquarie share price underperforming today?

Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Bank of America is an advertising partner of The Ascent, a Motley Fool company. 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 and Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Bank of Queensland Ltd (ASX: BOQ) share price has lost more than 30% over the past five years.

From late 2017, the bank’s shares continued on a slow and gradual decline until the global pandemic hit.

Impacted by the heavy fallout from COVID-19, Bank of Queensland shares dropped to a multi-year low in March 2020.

Since then, the Bank of Queensland share price has recovered to pre-pandemic levels, before giving away its gains over the last six months.

On 27 April 2017, the company’s shares were trading at $11.64 per share. Today, you can pick up the same shares for $7.88, more than 32% cheaper than they were five years ago.

Most people assume the company’s strong bi-annual dividend payout makes up for any potential loss in share price growth.

Further strengthening that argument, the Bank of Queensland board traditionally pays fully-franked dividends.

Franking credits, otherwise known as imputation credits, are highly regarded in the investing world. This is a type of tax credit passed onto shareholders when dividend payments are made by a company. Essentially, the company is paying the tax on the dividends received by the shareholders.

So, have Bank of Queensland shares provided value over the last five years? Below, we take a closer look to see if it has been worth investing in the company’s shares solely for its dividends.

Bank of Queensland’s dividend history

Here’s a list below of the company’s historical dividends paid out to shareholders in the past five years.

• May 2017 – 38 cents

• November 2017 – 46 cents

• May 2018 – 38 cents

• November 2018 – 38 cents

• May 2019 – 34 cents

• November 2019 – 31 cents

• November 2020 – 12 cents

• May 2021 – 17 cents

• November 2021 – 22 cents

• May 2022 – 22 cents

How much money would an investor make?

For argument’s sake, let’s say an investor bought $10,000 worth of Bank of Queensland shares exactly five years ago. They would have received approximately 859 shares. If we take that figure and multiply it by the current Bank of Queensland share price, the investor’s holding would be worth $6,768.92.

This means that an investor would have made a paper loss of $3,231,08, without factoring in the accumulated dividends since May 2017.

However, when calculating the above dividends, our investor would have gotten a total of $2.98 for every Bank of Queensland share owned. Multiply this by the current holding of 859 shares, this equates to $2,559.82.

Add this to the $6,768.92 that is the present value, and the investors would have a total of $9,328.74.

In essence, this means our investor would be down 6.7% having bought Bank of Queensland shares from April 2017.

Bank of Queensland share price snapshot

Looking at a much shorter time frame, Bank of Queensland shares have lost 14% in the past 12 months.

Year to date, the company’s share price is also in negative territory, down 2%.

Bank of Queensland presides a market capitalisation of roughly $5.08 billion, making it the 98th largest company on the ASX.

The post The Bank of Queensland share price has lost 30% in 5 years. Have the dividends been worth it? appeared first on The Motley Fool Australia.

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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.

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The Coronado Global Resources Inc (ASX: CRN) share price is gaining momentum today following its quarterly report.

Ticking past midday, the Australian metallurgical coal producer’s shares are pushing 3.7% higher to $2.22. As a result, the company’s share price is now only 7% away from its recent 52-week high.

Let’s dive into the latest quarterly report from Coronado.

Coronado share price heats up on record quarter

Highlights for the period ending 31 March 2022 include:

• Record quarterly revenue of US$947 million, up 22.3% from the December quarter
• Group run-of-mine production of 6.7 million tonnes, increasing 5% from the prior quarter
• Saleable production of 4.2 million tonnes, up 3.5% from the prior quarter
• Record quarterly realised metallurgical coal price of US$267 per tonne
• Mining cost per tonne for the March quarter of US$76.3 per tonne
• Closing net cash position at the end of the quarter of US$257 million

What else happened during the quarter?

As the Coronado share price suggests today, it was a strong three-month period for the coal producer. The combination of record coal prices and a sustained production level helped Coronado achieve its highest revenue in a quarter to date.

According to the report, the Russia/Ukraine conflict provided a tailwind for the company. Disruptions to Russia’s coal supply have boosted demand across the board. In addition, steel production in China recovered swiftly during the quarter after the lifting of restrictions imposed during the Winter Olympics.

Another positive for the Coronado share price, the company is initiating a fixed dividend to shareholders in light of its strong financial position. This dividend is expected to be paid biannually, providing US 0.5 cents per CDI to investors.

What did management say?

Reminiscing on the past quarter, Coronado CEO Gerry Spindler wrote:

The first quarter of 2022 was a quarter marked by a series of records for Coronado. We achieved record safety results in our US operations, record Group revenues, record realised pricing and record liquidity.

In addition, Coronado completed the first quarter with higher ROM production, higher saleable production, and higher sales volumes than the prior quarter.

Spindler added:

Coronado was one of the first pure-play coal operators in the world to return to a net cash position following the impacts of COVID-19 and lower price cycle. Our balance sheet is strong, and we are delivering on our capital management plans as promised.

What’s next?

Today’s Coronado share price rally might not solely be a product of its past performance. Adding to the optimism, the company highlighted the positive future outlook for the coal market.

While coal prices have fallen from their mid-March highs, they have managed to hold steady at a level still twice as high as historical averages. Notably, Coronado is witnessing elevated interest from new European customers amid concerns Russia will cut its gas supply.

Coronado share price snapshot

Investors would be hard-pressed to find an ASX share that has performed better than the Coronado share price over the last year.

While the S&P/ASX 200 Index (ASX: XJO) has returned a mediocre 3.5%, the coal producer is up 270%. Once accounted for dividends, the total return figure goes north of 300%.

The post Coronado share price brings the energy amid the best quarter in its history appeared first on The Motley Fool Australia.

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• ASX 200 midday update: Coronado has record quarter, Life360 and Northern Star sink
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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 Bruce Jackson.

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The Santos Ltd (ASX: STO) share price is pushing higher on Wednesday thanks to rising oil prices.

In afternoon trade, the energy producer’s shares are up 1% to $7.88.

This means the Santos share price is up 19% since the start of the year.

Can the Santos share price keep rising?

The good news for investors is that one leading broker believes there’s still plenty of upside ahead for the Santos share price.

According to a note out of Morgans, its analysts have put an add rating and $10.00 price target on the company’s shares.

Based on the current Santos share price, this implies potential upside of almost 27% for investors over the next 12 months.

What did the broker say?

Morgans notes that the company has announced a US$250 million share buyback. While it is not overly sure about the decision, it points out that this appears to indicate that management believes the Santos share price could be cheap. It said:

“It is good to see STO prioritising shareholder returns, particularly during periods of elevated earnings. In particular linking returns to FCF strength while leaving plenty of capacity for management to flex distributions.

Although it is harder to see the value proposition of the on-market share buyback at current prices. Other than a brief spike in early 2020 (pre COVID), STO is trading at its highest share price since 2014. This increases risk around the assumption that the buyback adds value. History has taught us that buybacks typically struggle to add value when conducted at cycle highs.”

Nevertheless, the broker remains very positive on the investment opportunity here and believes its “growing earnings should ease any lingering market concerns around STO’s balance sheet.”

It has also recently stated that it expects “the resilience of STO’s growth profile and diversified earnings base [to] see it best placed to outperform against a backdrop of a broader sector recovery.”

The post Broker says Santos share price could storm 27% higher appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Wednesday
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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.

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Shares in City Chic Collective Ltd (ASX: CCX) are tracking higher on Wednesday following the release of its trading update for H2 FY22 to date.

This represents the 17 trading weeks from 27 December 2021 to 24 April 2022, per the company. City Chic is releasing the update ahead of the Goldman Sachs Emerging Leaders Conference (hosted today), and the Macquarie Australia Conference on 3 May 2022, where it will be presented at both events.

At the time of writing, the City Chic share price is trading 115 basis points higher at $2.63 apiece just after midday on Wednesday.

City Chic share price jumps on earnings momentum

Key highlights for the company this period, per its release were:

• Sales of $178 million, a 46% year on year (YoY) growth
• Robust earnings with $23.5 million underlying EBITDA and $14 million net profit after tax (NPAT)
• Second half to date (H2 FY22 to date) – strong total sales growth at 25% YoY
• USA total sales growth of 47%
• Evans performing at pre-acquisition levels
• Australian sales performing above last year, with online channels up 13%
• Global partner sales growth of 465%

What else happened this quarter for City Chic?

The company says it posted a solid 46% YoY growth in sales and printed $178 million during the period. Of this result, there was a 71% jump in global traffic growth and 64% growth in active customers from half-to-half.

After expenses and tax, City Chic saw earnings of $14 million resulting in a net profit margin of approximately 8%, whilst a little higher up the income statement it printed underlying EBITDA of $23.5 million, 1% up YoY.

The company also saw substantial growth in its Americas markets, observing flow of 34.3 million annually plus adding another 582,000 customers in the year. Similar trends were observed in Australia too.

City Chic mentioned that USA growth has widened to 47% in FY22 to date, whilst European, Middle East and Africa (EMEA) sales have jumped 69%.

It also says that global partnerships are currently growing, with sales growth up 465% in H2 FY to date – 27 December to 24 April.

Meanwhile, Australia & New Zealand sales have curled up by 3% in the same time, “against a strong [H2 FY21] and in a challenging market due to the continued impact of the COVID-19 Omicron variant in the first few months of the second half.”

What’s next for City Chic?

The company appears optimistic based on projections in its presentation today. It expects H2 FY22 EBITDA “to exceed 1H FY22 EBITDA, subject to ongoing consumer demand in the key trading months of May and June”.

City Chic mentioned it has also produced a formidable counter-attack to the global supply chain disruptions through its proactive management of inventory.

“We have the inventory ready, and in market, to drive growth in all regions, protecting demand in the balance of 2H and into Q1 FY23,” it remarked.

“Consistent with comments made at the 1H result, our inventory position will continue to build in [the second half].”

Net debt position, as at financial year end, is expected to be in the range of $6-12m, subject to demand and supply chain volatility. Post the Northern Hemisphere peak sales period, and as the supply chain challenges ease, we expect to release inventory and deliver strong positive cash flows in FY23.

City Chich share price snapshot

In the last 12 months, the City Chic share price has collapsed more than 42% and is now down 52% for the year to date. Across all major time frames, City Chic shares are down.

The post City Chic share price jumps on 25% sales lift appeared first on The Motley Fool Australia.

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Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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.

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The Dexus Property Group (ASX: DXS) share price is climbing on news the company is acquiring AMP Ltd (ASX: AMP)’s real estate and domestic infrastructure business.

The acquisition could cost the real estate investment company $1 billion.

After spending most of this morning in the red, the Dexus share price has recovered to gain 1.44%. Right now, the company’s stock is swapping hands for $10.94 apiece.

Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is slumping 0.58% and the S&P/ASX 200 Real Estate Index (ASX: XRE) is up 0.48%.

Let’s take a closer look at the acquisition announced today.

About the potential $1b acquisition

The Dexus share price has shaken off its early tumble to trade higher following news it’s set to buy Collimate Capital’s real estate and domestic infrastructure equity business.

Collimate Capital was managing $21 billion of real estate assets and $10 billion of infrastructure assets at the end of financial year 2021. For context, Dexus had $45.3 billion of assets under management (AUM) as of 31 December.

Dexus expects to pay up to $1 billion through three separate expenses for the transaction.

First, it will provide AMP with a $250 million upfront cash payment for the business.

It could also be liable to pay AMP a $300 million earn-out agreement. AMP will receive the full earn-out if the company’s AUM is retained for nine months following the sale.

It’s worth noting that AMP is not expecting to receive the full value of the earn-out, instead predicting AUM will fall by around $3 billion.

Finally, Dexus has agreed to acquire co-investment stakes in the platform for approximately $450 million in cash. That expense is subject to discussions with investors, pre-emptive rights processes, and relevant consents.

Around $270 million of that $450 million is earmarked to buy a greater stake in the AMP Capital Wholesale Office Fund (AWOF).

As The Motley Fool Australia recently reported, the AWOF’s management is being challenged by Mirvac Group (ASX: MGR).

Dexus plans to retain Collimate’s “key people” following the takeover.

It noted that the investment aligned with its fund management business’s expansion and diversification strategy. It also expected to power growth through the combination of the two platforms.

Dexus’ previously given guidance won’t change due to the acquisition. That’s because it won’t be completed until the next financial year.

What did management say?

Dexus CEO Darren Steinberg commented on the news, saying:

I am excited to announce this opportunity which positions Dexus as a leading real asset manager, with new capabilities and an expanded product offering, underpinned by our best practice governance and risk management framework.

It delivers on our strategic objectives of being a real estate partner of choice and delivering resilient income streams, while enhancing our ability to leverage the key megatrends benefiting real assets …

Infrastructure is a logical next step for Dexus’s funds management business, underpinned by compelling sector fundamentals and a positive growth outlook.

Dexus share price snapshot

Today’s gains haven’t been enough to boost the Dexus share price back into the year-to-date green.

Right now, the company’s stock is 3% lower than it was at the start of the year. However, it has gained 10% since this time last year.

The post Dexus share price in the green after $1b AMP deal confirmed appeared first on The Motley Fool Australia.

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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.

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