There’s a mixed bag of broker opinions on the Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price. A few of them have published notes this month summarising their perceptions of the big four bank and whether they recommend a buy, hold, or sell.

First, let’s take a look at the ANZ share price compared to the other big four banks. ANZ closed on Friday at $27.78, down 0.79% in the session and down 0.7% year to date.

By comparison:

• Westpac Banking Corp (ASX: WBC) $24.21, down 1.22% on Friday and up 11.8% year to date

• National Australia Bank Ltd (ASX: NAB) $33.14, down 1.37% on Friday and up 12.6% year to date

• Commonwealth Bank of Australia (ASX: CBA) $105.37, down 2.75% on Friday and up 3% year to date

The price-to-earnings (P/E) ratios lay out like this: ANZ 13.52 times, Westpac 17.56 times, NAB 17.6 times, and CBA 19.8 times.

So, with the figures out of the way, let’s see what a couple of experts think.

Citi backs ANZ and lifts 12-month target

Citi analysts have upgraded ANZ to a buy with a higher share price target of $30.75. They think ANZ shares are cheap compared to CBA shares and NAB shares.

As my Fool colleague James wrote last week: “Citi believes the Reserve Bank’s rate hikes will reshape the banking sector’s earnings profile over the next few years and take net interest margins to levels that are materially higher than consensus estimates. Particularly given its belief that the impact on asset quality won’t be as great as some fear.”

Morgan Stanley downgrades ANZ share price target

Morgan Stanley has downgraded ANZ to equal-weight from overweight. The broker reckons revenue will keep falling. It cut its 12-month price target for ANZ from $30.30 per share to $28.60 per share.

The broker thinks costs are likely to exceed ANZ’s expectations over the near and medium-term due to inflation and the bank’s ongoing need for investment. It’s also worried that ANZ might be losing market share in both the mortgage and business banking categories.

Morgan Stanley said:

We expect ANZ’s revenue to decline again this year due to market share loss, falling margins and lower non-interest income. “Its 3-yr revenue CAGR is also likely to be below the major bank average, given weaker volume growth and more headwinds from increasing competition for deposits in Australia and New Zealand.

ANZ share price summary

ANZ is down 3% over the past 12 months and 15% over the past five years.

The bank has a market capitalisation of $78.23 billion with 2.79 billion shares outstanding.

The post What predictions are being made for the ANZ share price in April? appeared first on The Motley Fool Australia.

More reading

• Is the ANZ share price too cheap to ignore?
• Own ANZ shares? Here’s why this broker is predicting ‘revenue headwinds’
• Do CBA shares offer the highest big bank dividend yield?
• Is the ANZ share price a smart idea for dividend income?
• Why are ASX 200 bank shares having such a stellar start to the week?

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Bronwyn Allen owns Australia & New Zealand Banking Group Limited, Commonwealth Bank of Australia, and Westpac Banking Corporation. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/O6BNu0Q

South32 Ltd (ASX: S32) is one of the S&P/ASX 200 Index (ASX: XJO)’s many dividend paying resource shares.

In fact, the diversified mining and metals company started paying dividends shortly after it was spun out of BHP Group Ltd (ASX: BHP) in 2015.

At market close on Friday, the South32 share price closed at $4.84, 4.91% lower than its previous close.

While that’s a significant drop, it’s far from alone in the red. The ASX 200 also finished in the red, down 15.7%.

Additionally, the S&P/ASX 200 Resources Index (ASX: XJR) had a bad day, plunging 3.40%.

Let’s take a look at South32’s dividends and the yield the ASX 200 share is currently trading on.

A breakdown of South32’s dividend history and yield

South32 shares hit the market in May of 2015, taking many of BHP’s alumina, aluminium, coal, manganese, nickel, silver, lead, and zinc assets with it.

Though, the company didn’t pay a dividend for the first 12 months of its listed life. The first payout handed to South32’s investors came at the end of financial year 2016.

Then, shareholders were given an unfranked dividend worth approximately 1.3 cents per share. In the company’s defence, its share price was trading at around $2 at that point.

Fortunately, both the company’s dividends and share price have all risen since then. Not to mention, it started offering franked dividends in financial year 2017.

The most recent payout investors received from South32 was its interim dividend for financial year 2022.

That saw shareholders handed a fully franked dividend worth approximately 11.9 cents for each South32 share they owned.

Previous to that, its final dividend for financial year 2021 and accompanying special dividend totalled around 7.4 cents per share, fully franked.

That means the company was trading with a trailing dividend yield of 3.79% at Thursday’s close.

And, if there is to be a silver lining to Friday’s tumble, at its current share price, South32 has a dividend yield of 4.01%.

The post Is South32 an ASX dividend stock? appeared first on The Motley Fool Australia.

More reading

• Here are the 3 most traded ASX 200 shares on Friday
• Mining and tech: Experts name 2 ASX 200 shares to buy now
• Goldman Sachs names 3 ASX 200 mining shares to buy today
• The South32 share price is closing in on its all-time high. Here’s why
• 2 strong ASX 200 dividend shares analysts love

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/rRc37D9

If you’re looking to bolster your portfolio with some blue chip shares, you may want to look at the two listed below.

Here’s why these blue chip ASX 200 shares are highly rated right now:

CSL Limited (ASX: CSL)

The first ASX 200 blue chip share that analysts are saying investors should buy is biotherapeutics giant, CSL. Over the last century, the company has developed a range of lifesaving and lucrative plasma therapies and vaccines. It is also in the process of acquiring Vifor Pharma, which is focused on iron deficiency, nephrology and cardio-renal therapies.

Morgans is positive on the company and believes it is on the verge of returning to form after dificulties during the pandemic. Morgans commented:

“Promisingly, plasma collections continue to improve, although remain slightly below pre-pandemic levels, and while industry wide issues remain (eg Omicron; staffing; increase costs), the worst appears behind us.”

“While near term challenges remain, the ongoing recovery in plasma collections, coupled with management’s confidence, paints a favourable earnings picture.”

Morgans has an add rating and $327.60 price target on its shares.

Goodman Group (ASX: GMG)

Another ASX 200 blue chip share to consider is Goodman. It is an integrated property company with operations across the globe.

Goodman has been growing at a solid rate for well over a decade and the team at Citi expect this trend to continue.

“GMG’s 1H22 EPS of 41.9c was 12% ahead of Visible Alpha consensus (37.3c) and 6% ahead of Citi (39.5c). FY22 EPS guidance was upgraded for the 2nd time in 6 months to 20% growth, or EPS of 78.7c, +1.5% ahead of ingoing consensus of 77.5c. FY22 DPS guidance was retained at 30c.”

“We continue to see guidance as conservative, with our EPS estimates rising 5% in FY22 and c. 6% thereafter. We now forecast c. 23% EPS growth in FY22 and c. 19% EPS CAGR from FY21-FY24. Our TP increases 5% on higher asset values and higher earnings. GMG remains OUR top pick in the sector.”

Citi has a buy rating and $29.50 price target on its shares.

The post Analysts name 2 of the best blue chip ASX 200 shares to buy now appeared first on The Motley Fool Australia.

More reading

• 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
• CSL share price lifts amid US$4b debt raise
• Why has the CSL share price struggled in the past month?
• Should ASX investors buy the dip in the CSL share price?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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/2RBWoAr

Despite recently falling on hard times, the Polynovo Ltd (ASX: PNV) share price been a star performer over the long-term.

Arguably, investing your money in businesses that are either new to market or emerging can reap some serious rewards. Of course, there is an inherent risk, particularly given the medical device company was outside the S&P/ASX 200 Index (ASX: XJO).

Below, we calculate how much you would have made if you’d bought $5,000 worth of Polynovo shares five years ago.

How much would your initial investment be worth now?

If you’d invested $5,000 into Polynovo shares in 2017, you would have picked them up for approximately 23.5 cents apiece. This equates to about 21,276 shares without topping up along the way during the retracement periods.

Fast-forward to today, Polynovo shares closed at $1.035 on Friday. This means those 21,276 shares would be worth a staggering $22,020.66.

When looking at percentage terms, this implies a gain of 340% or an average yearly return of 34.52%.

In comparison, investing the same amount in an ASX 200 index-tracking fund would have given back 26.33% over 5 years. This equates to average of 4.97% per year.

If you are wondering about Polynovo dividends, the company has chosen not to pay a percentage of its profits to date. Instead, it has decided to expand its geographical spread and increase brand investment to drive consumer demand.

Polynovo share price snapshot

Over the past 12 months, the Polynovo share price has travelled 66% lower and is down 31% year to date.

The company’s shares hit a 52-week low of 83.5 cents in March before moving in a sideways channel of late.

Polynovo presides a market capitalisation of roughly $686.5 billion and has more than 661.68 million shares on its registry.

The post Despite a recent rough trot, you’ll be amazed to know what $5,000 of Polynovo shares bought 5 years ago is worth now appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• Why does the Polynovo share price remain one of the most shorted on the ASX?
• 3 beaten up shares you might be surprised to learn are still part of the ASX 200
• These are the 10 most shorted ASX shares
• March was a stellar month for the Polynovo share price. Here’s why

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 POLYNOVO FPO. 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/6WXytoT

The high level of inflation is getting global attention. It’s affecting ASX shares in various ways. But it might not be all bad for every business.

Some businesses have contracts with their clients or tenants where the revenue is linked to inflation. Therefore, a higher inflation rate could mean that revenue rises faster.

According to the Australian Financial Review, Deutsche Bank’s chief Australian economist, Phil O’Donaghoe, has predicted that Australian CPI inflation in the first quarter will be up 1.7% quarter on quarter and up 4.6% year on year.

Here are two businesses that could see income growth because of inflation:

Rural Funds Group (ASX: RFF)

Over the last six months, the Rural Funds share price has risen by close to 9%.

Rural Funds is an agricultural real estate investment trust (REIT) that owns a diversified portfolio across five sectors: cattle, almonds, cropping (sugar and cotton), vineyards, and macadamias.

How could the ASX share benefit from rising inflation?

Rural Funds says that growth in lease revenue is supported by annual indexation and market rent reviews. It noted that most lease revenue is sourced from listed and corporate food-producing businesses. Rural Funds said with its FY22 half-year result that, broadly, agricultural operators are currently experiencing “good seasons and commodity prices”.

In terms of inflation-linked contracts, 44% of lease income is based on CPI.

APA Group (ASX: APA)

Over the last six months, the APA share price has risen by around 34%.

APA is a large energy infrastructure business. Its market capitalisation is more than $13 billion, according to the ASX. It owns a large gas pipeline – it supplies around half of the country’s natural gas usage. APA also has investments in wind farms, solar farms, gas storage, gas processing, and gas power stations.

How could it benefit from rising inflation?

In the ASX share’s FY22 half-year result, the business said that it’s “favourably exposed to rising inflation with almost 100% of contracted revenues linked to inflation indices”.

APA claims that “gas will play a critical role in Australia’s energy system as an essential companion to renewables and a critical industrial energy source”.

In Australia, gas reportedly accounts for 27% of primary energy consumption and 21% of electricity generation. APA also said gas is typically around half the emissions intensity of coal.

The ASX share is looking to grow its electricity footprint with a strategic investment to acquire 100% of the Basslink senior secured debt at a discount to the face value. Basslink is the energy cable link between Tasmania and the mainland.

APA intends to work constructively with the receivers and managers, and Hydro Tasmania and the State of Tasmania, to “put Basslink on a stable footing and ultimately convert it into a regulated asset”.

The post 2 ASX shares that could benefit from rising inflation appeared first on The Motley Fool Australia.

More reading

• 3 ASX 200 stocks smashing 52-week highs today
• The APA share price just powered to a 52-week high
• 2 top ASX dividend shares to think about
• 2 ASX dividend shares with great yields to beat inflation
• 3 ASX 200 shares hopping to new 52-week highs today

Motley Fool contributor Tristan Harrison owns RURALFUNDS STAPLED. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended APA Group and RURALFUNDS STAPLED. 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/rV9HIWd

The S&P/ASX 200 Index (ASX: XJO) was on course to record a decent gain until a selloff on Friday. This led to the benchmark index falling 0.7% over the shortened week to 7,473.3 points.

Thankfully, not all shares tumbled with the market. Here’s why these were the best performers on the ASX 200 last week:

Ramsay Health Care Limited (ASX: RHC)

The Ramsay Health Care share price was far and away the best performer on the ASX 200 last week with a massive 31% gain. The catalyst for this was news that the private hospital operator has received a takeover approach. According to the release, a consortium led by KKR has tabled a non-binding $88 cash per share offer to acquire the private hospital operator. This will be reduced by any dividends paid. Ramsay has granted the consortium due diligence access.

Brambles Limited (ASX: BXB)

The Brambles share price was some distance behind as the next best performer with an 8.2% gain. Investors were buying this logistics solutions company’s shares after it released a trading update. That update revealed that year to date sales were up 7% to US$4,067 million during the first three quarters of FY 2022. This was stronger than the company was expecting, leading to management upgrading its full year sales and earnings guidance.

GrainCorp Ltd (ASX: GNC)

The GrainCorp share price was on form and charged 5.9% higher over the four days. This was despite there being no news out of the grain exporter. Though, it is worth noting that its shares have been on a roll since it upgraded its earnings guidance earlier this month.

United Malt Group Ltd (ASX: UMG)

The United Malt share price wasn’t far behind with a gain of 5.2%. Once again, this gain was made despite there being no news out of the world’s fourth largest maltster. Though, United Malt, which was part of GrainCorp until it was spun off in 2020, has been touted as a potential takeover target in recent months.

The post These were the best performing ASX 200 shares last week appeared first on The Motley Fool Australia.

More reading

• These were the worst performing ASX 200 shares last week
• Own Westpac shares? Here’s why the bank has just copped a further $100m in fines
• Can the Graincorp dividend really triple in 2022?
• Here are the top 10 ASX shares today
• Here are the 3 most traded ASX 200 shares on Friday

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ramsay Health Care Limited. 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/Dr7Gdo9

A poor finish to the week led to the S&P/ASX 200 Index (ASX: XJO) posting a disappointing decline over the four days. The benchmark index dropped 0.7% to 7,473.3 points.

While a good number of shares dropped with the market, some fell more than most. Here’s why these were the worst performers on the ASX 200 last week:

Megaport Ltd (ASX: MP1)

The Megaport share price was the worst performer on the ASX 200 last week by some distance with a 28.1% decline. Investors were selling off the network as a service provider’s shares after its third quarter update disappointed. For the three months ended 31 March, Megaport reported modest quarter on quarter revenue growth of 5% to $27.9 million. This was well short of the market’s expectations and led to consensus estimate downgrades.

Paladin Energy Ltd (ASX: PDN)

The Paladin Energy share price was the next worst performer with a decline of 11.7%. A good portion of this decline was made on Friday during the market selloff. Given that the uranium miner’s shares have more than doubled in value over the last 12 months, it appears that some investors decided to take a bit of profit off the table.

OZ Minerals (ASX: OZL)

The OZ Minerals share price was a poor performer and dropped 11.5% over the period. Investors were selling this copper producer’s shares after its quarterly update disappointed. OZ Minerals revealed that its gold and copper production was down 6% and 16%, respectively, over the previous quarter. OZ Minerals also reported an increase in its all-in sustaining costs for the period.

Regis Resources Limited (ASX: RRL)

The Regis Resources share price wasn’t far behind with an 11.2% decline over the four days. A number of gold miners were sold off last week amid rising bond yields and a softening gold price. This was caused by comments out of the US Federal Reserve, which appears to indicate that interest rates will increase even quicker than expected.

The post These were the worst performing ASX 200 shares last week appeared first on The Motley Fool Australia.

More reading

• Own Westpac shares? Here’s why the bank has just copped a further $100m in fines
• Here are the top 10 ASX shares today
• Here are the 3 most traded ASX 200 shares on Friday
• The Megaport share price just tumbled another 10%. Is it now a super bargain?
• How much were Fortescue shares when they first listed on the ASX?

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. owns and has recommended MEGAPORT FPO. The Motley Fool Australia has recommended MEGAPORT FPO. 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/FdU1kPj

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.

Twitter (NYSE: TWTR) and Netflix (NASDAQ: NFLX) recently became two of the market’s most talked-about tech stocks.

Twitter’s stock went on a wild ride after Elon Musk launched a hostile takeover bid for the company on April 14. The $43 billion bid, which values Twitter at $54.60 per share, came after Musk already bought 9.2% of the company but declined to take a seat on its board of directors.

Netflix’s stock sank to its lowest levels in over four years after the company released its dismal first-quarter earnings report on April 19. The streaming media giant lost 200,000 subscribers, marking its first sequential decline since 2011, and predicted it would lose another two million subscribers in the second quarter.

Should investors who can stomach the near-term volatility consider buying either of these divisive stocks right now? 

What happened to Twitter?

Despite being widely used by news outlets, public figures, and brands, Twitter’s active user base remains small relative to its cultural influence. Its monetizable daily active users (mDAUs) rose 13% to 217 million in 2021, but it’s still smaller than Snap‘s Snapchat, which ended last year with 319 million DAUs.

Last February, Twitter claimed it could reach 315 million mDAUs by the end of 2023, which implies its year-over-year growth will accelerate to more than 20% over the following two years. It also claimed it would more than double its annual revenue from $3.7 billion in 2020 to $7.5 billion in 2023 by gaining new users, selling higher-value ads, and launching new products.

But a mere nine months after setting those ambitious goals, then CEO Jack Dorsey resigned and was succeeded by controversial CTO Parag Agrawal, who previously declared Twitter should “focus less on thinking about free speech” in a 2018 interview. Under Agrawal, Twitter quickly banned more controversial accounts and ramped up its spending on new features.

Analysts expect Twitter’s revenue to rise 18% this year, but for its earnings to remain in the red as it increases its headcount by 20%. Twitter’s messy outlook, its mediocre long-term returns, and Agrawal’s views likely all brought Musk — a vocal critic of Twitter’s censorship policies — to the table.

Twitter recently adopted a poison pill plan to fend off the takeover bid, but Musk could still team up with other investors or launch a tender offer to directly buy more shares from its existing investors. It’s unclear how this ongoing drama will end, but Twitter’s current price of $46 suggests the market isn’t too optimistic about Musk closing the deal at $54.60 a share.

What happened to Netflix?

Netflix is still the largest paid streaming video platform in the world with 221.6 million paid subscribers. But over the past few years, well-funded competitors like Disney, Amazon, Apple, and Warner Bros. Discovery carved up the market. 

Newer ad-supported challengers like the Roku Channel and Comcast‘s Peacock also provide free alternatives to Netflix and other premium platforms. The saturation of this market throttled Netflix’s growth.

Netflix was initially dismissive of these threats, but it started to cite competition as a major headwind over the past two quarters. Co-CEO Reed Hastings also said Netflix would finally develop a new tier for “ad-tolerant” viewers during its latest conference call, which reversed his previous opposition to adding any advertisements to the platform. That change of heart suggests that Netflix is running out of ways to gain new viewers.

Netflix also blamed its slowdown on users sharing their passwords to an additional 100 million households worldwide. COO Gregory Peters said Netflix would start asking members to “pay a bit more to share the service with folks outside their home” to monetize those viewers — but that jarring change could also alienate its core audience. 

Netflix’s abrupt slowdown and seemingly desperate changes prompted Pershing Square’s Bill Ackman, who took a $1.1 billion stake in Netflix after its previous post-earnings plunge in late January, to liquidate his firm’s entire position for a loss of more than $400 million.

Analysts expect Netflix’s revenue to rise 9% this year as its rising content costs reduce its net income by 3%. Its business isn’t doomed yet, but its high-growth days certainly seem to be over.

Is either stock worth buying?

Twitter trades at more than 50 times its adjusted earnings estimate for 2022, which excludes its big stock-based compensation expenses. For reference, Meta Platforms trades at just 16 times forward earnings following its massive pullback over the past several months.

Netflix trades at 20 times forward earnings, but that’s still not a low valuation for a company with slowing growth and rising costs. If Netflix traded at multiples similar to those of more diversified media companies like WBD or Paramount, its stock could still be cut in half.

I’m not a fan of either stock right now. But if I had to pick one over the other, I’d stick with Twitter because it’s merely treading water instead of sinking. The recent takeover interest in the company, while chaotic, also indicates it has more near-term upside potential than Netflix in this challenging market. 

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

The post Better buy: Netflix vs. Twitter appeared first on The Motley Fool Australia.

More reading

• Is Elon Musk really going to buy Twitter?
• Netflix looks to 100 million existing viewers to boost revenue
• Why Netflix stock flopped again today
• Is Netflix Stock a buy after its spectacular fall from grace?
• Why Netflix stock crashed and burned Wednesday

Leo Sun owns Amazon, Apple, Meta Platforms, Inc., Walt Disney, and Warner Bros. Discovery, Inc. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Amazon, Apple, Meta Platforms, Inc., Netflix, Roku, Twitter, and Walt Disney. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Comcast and has recommended the following options: long January 2024 $145 calls on Walt Disney, long March 2023 $120 calls on Apple, short January 2024 $155 calls on Walt Disney, and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Amazon, Apple, Meta Platforms, Inc., Netflix, and Walt Disney. 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/Zw0Db9U

It wasn’t a great day for the S&P/ASX 200 Index (ASX: XJO) this Friday, to say the least. The ASX 200 ended up closing the day down a nasty 1.57% at 7,473.3 points. That was its largest one-day fall in months. As you might expect, the Westpac Banking Corp (ASX: WBC) share price didn’t do too much better. Westpac shares ended up finishing down by 1.22% at $24.21.

This comes amid news that the ASX 200 big four banking giant is in line to pay another corporate fine. Westpac already holds the dubious distinction of being on the hook for Australia’s largest-ever corporate fine. That was a whopping $1.3 billion penalty that the bank had to pay back in 2020. This was in response to contraventions of the Anti-Money Laundering and Counter-Terrorism Financing Act.

Well, today, Westpac has been issued with another fine. Albeit one not quite as large. According to the Australian Securities and Investments Commission (ASIC), Westpac has been ordered by the Federal Court to pay a $113 million penalty. According to the watchdog, this was for “widespread compliance failures across multiple businesses, including Westpac’s banking, superannuation, wealth management and insurance brands”.

Westpac fined for multiple offences

Here’s some of what ASIC deputy chair Sarah Court had to say on this announcement:

The breaches found by the Court in these six cases demonstrate a profound failure by Westpac over many years and across many areas of its business to implement appropriate systems and processes to ensure its customers were treated fairly. Westpac, like all licensees, has an obligation to be honest and fair in its provision of financial services. Despite this, Westpac failed to prioritise and fund the systems upgrades necessary to help fulfil this obligation…

Over the course of 13 years, more than 70,000 customers have been affected by these failures, either by being incorrectly charged or given the wrong information. The sheer scale of this impact suggests that, at the time, Westpac had a culture that did not prioritise compliance.

What did the bank do?

The alleged offences that Westpac has been fined for include:

• ‘Fees for no service’ charged to deceased customers
• Issuing duplicate insurance policies
• Inadequate fee disclosures for financial advice
• Allowing accounts of deregistered companies to remain open and active
• Onselling consumer credit card and flexi-loan debt with incorrect interest rates
• Including banned commission payments in superannuation insurance premium charges.

According to the release, Westpac has “admitted to the allegations in each of the proceedings and will remediate more than $80 million to customers”.

The post Own Westpac shares? Here’s why the bank has just copped a further $100m in fines appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX shares today
• Here are the 3 most traded ASX 200 shares on Friday
• How much were Fortescue shares when they first listed on the ASX?
• The future looks bright: Here’s why this investment firm is doubling down on ASX shares in April
• Why is the Wesfarmers share price having such a rough trot in April?

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Westpac Banking Corporation. 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/jQsWX42

Graincorp Ltd (ASX: GNC) sure is harvesting some big ASX investor support of late. Its shares hit an all-time record price of $10.17 today before retracing to finish the session at $10.10, up 1.1%.

Why is the Graincorp share price reaching new heights?

Earlier this month, the agribusiness excited the market with an FY22 earnings guidance upgrade and trading update on 8 April.

Here’s what managing director and CEO Robert Spurway told the market:

… We are seeing high global demand for Australian grain and oilseeds and strong supply chain margins for grain exports. This has been driven by two consecutive bumper crops in east coast Australia (ECA), coupled with supply shortages in the northern hemisphere.

The conflict in Ukraine and resulting trade disruptions in the Black Sea region have created uncertainty in global grain markets, with buyers looking for alternate sources of supply. This has further increased both the demand for Australian grain and oilseeds and export supply chain margins.

Spurway added that the current La Nina weather cycle is benefitting the company, too.

Recent weather patterns and continued La Nina conditions have provided excellent planting conditions for the 2022 winter crop to date, building confidence in grain supplies from ECA and further supporting export sales and supply chain margins.

So what will all that do for earnings?

In short, really good things. Graincorp is now expecting underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $590 million to $670 million — up from previous guidance of $480 million to $540 million. They reckon that will convert to net profit after tax (NPAT) of $310 million to $370 million — up from $235 million to $280 million.

ASX investors loved that and sent the Graincorp share price hurtling about 9% higher on the day.

Then came the broker upgrade. As my Fool colleague Brooke reported last week, Wilsons has increased its earnings expectations. According to the Australian Financial Review, the broker said:

While global demand is unlikely to diminish quickly, new crop grain price spreads will depend on the size of the Australian winter crop and exporters’ ability to secure supply chain access.

The outcome of this dynamic will likely have a significant impact on [financial year 2023] earnings. While we continue to assume volumes and margins normalise, GrainCorp’s balance sheet will benefit from the significant cash flow, with core net cash forecast at $333 million in [financial year 2023].

Could the Graincorp dividend really triple?

Wilsons anticipates $1.52 in earnings per share (EPS) and 62 cents per share in dividends.

Hold up, what was that?

Yes, indeed. The broker reckons all this additional income could add up to triple the annual dividend that was paid out in 2021. That was 18 cents, by the way. You do the math — 62 cents is actually more than triple!

Graincorp pays its dividends in July and December. According to the company’s website, Graincorp will release its HY22 earnings results on 11 May.

Wilsons has a $7.80 price target on Graincorp. Based on that price, 62 cents in dividends would represent a 7.95% dividend yield.

Based on today’s closing price of $10.10, the yield is lower at 6.2%. But wait, there’s more. Graincorp dividends usually have 100% franking on top. That equates to a grossed-up total yield of 8.85%.

The post Can the Graincorp dividend really triple in 2022? appeared first on The Motley Fool Australia.

More reading

• Could these ASX shares be the new FAANG stocks on the block?
• Why is the GrainCorp share price leaping 6% today?
• 3 ASX All Ordinaries shares rocking new all-time highs today
• Why Boss Energy, GrainCorp, Pro Medicus, and Select Harvests are pushing higher
• ASX 200 lunch update: GrainCorp jumps on earnings upgrade, Pro Medicus signs $32m deal

Motley Fool contributor Bronwyn Allen 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/LBT6v7F