If you’re looking for growth shares, then look no further. Listed below are four ASX growth shares which have been tipped for strong growth in the future.

Here’s why analysts have rated them as buys:

Altium Limited (ASX: ALU)

The first ASX growth share to look at is Altium. It is a printed circuit board (PCB) design software provider that has carved out a leading position in a growing electronic design market thanks to the quality of its technology. But the company isn’t settling for that and is now aiming to dominate this market with its cloud-based Altium 365 product. Analysts at Jefferies are positive on its future. The broker currently has a buy rating and $48.83 price target on its shares.

Breville Group Ltd (ASX: BRG)

Another growth share that could be a buy is Breville. It is a leading appliance manufacturer responsible for a number of popular brands. These include the Kambrook, Sage and Breville brands. The team at Morgan Stanley is very positive on the company. This is due partly to its global expansion, burgeoning product pipeline, and favourable consumer trends. Last week the broker retained its overweight rating and $36.00 price target on Breville’s shares.

Hipages Group Holdings Ltd (ASX: HPG)

A third ASX growth share to look at is Hipages. This leading Australian-based online platform and software as a service (SaaS) provider connects consumers with trusted tradies. While its recent quarterly update was disappointing due to the impact of lockdowns on its tradie subscriptions, Goldman Sachs remains confident that a post-lockdown rebound is coming. After which, it believes Hipages is well-placed for strong long term growth as it grows its ecosystem into a huge addressable market. The broker currently has a buy rating and $4.60 price target on its shares.

NEXTDC Ltd (ASX: NXT)

A final growth share that could be a buy is NEXTDC. It is a leading data centre operator which appears well-placed to benefit from the structural shift to the cloud. Particularly given its world class network of centres and expansion into edge centres. The company also has its eyes on the Asia market and has opened up offices in Singapore and Tokyo. These markets could provide NEXTDC with a long growth runway.

Citi is a fan and currently has a buy rating and $15.40 price target on NEXTDC’s shares.

The post 4 fantastic ASX growth shares to buy appeared first on The Motley Fool Australia.

More reading

• 2 sold-off ASX tech shares that are opportunities: experts
• Why did ASX 200 tech shares get annihilated today?
• 2 ASX shares that could be great buys in February 2022
• Top ASX shares to buy in February 2022
• Leading brokers name 3 ASX shares to buy today

Motley Fool contributor James Mickleboro owns NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Hipages Group Holdings Ltd. and Temple & Webster Group Ltd. The Motley Fool Australia owns and has recommended Hipages Group Holdings Ltd. The Motley Fool Australia has recommended Temple & Webster Group 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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Are you looking for ASX dividend shares to buy? If you are, then you may want to look at the shares listed below.

Here’s why these ASX dividend shares could be in the buy zone right now:

Accent Group Ltd (ASX: AX1)

The first ASX dividend share to look at is this footwear focused retailer which owns and operates a range of brands such as HYPE DC, Platypus, and The Athlete’s Foot.

While its performance in FY 2022 has disappointed because of lockdowns, this is only expected to be a short term headwind. In light of this, the future remains very bright for Accent and the team at Bell Potter has urged investors to “buy on current weakness.”

The broker has a buy rating and $2.75 price target. This compares favourably to the current Accent share price of $2.10.

In addition, Bell Potter is expecting fully franked dividends per share of 5.4 cents in FY 2022 and then 11 cents in FY 2023. This equates to yields of 2.6% and 5.2%, respectively.

Westpac Banking Corp (ASX: WBC)

This banking giant could be a dividend share to buy according to the team at Morgans.

In response to the bank’s first quarter update, its analysts have reiterated their add rating and $29.50 price target.

For some time now the broker has been stating its belief that the market was being too negative on the bank’s outlook. It feels this view has been justified with its latest update.

Morgans commented: “We believe the trading update supports the view that the challenges facing WBC are not unsurmountable and that the stock should not be priced like a value trap. We believe the update particularly serves to alleviate investor concerns around the cost outlook.”

As for dividends, the broker has pencilled in fully franked dividends per share of $1.19 in FY 2022 and then $1.60 in FY 2023. Based on the current Westpac share price of $21.52, this will mean yields of 5.5% and 7.4%, respectively.

The post 2 quality ASX dividend shares for income investors to buy appeared first on The Motley Fool Australia.

More reading

• Brokers name 3 ASX shares to buy today
• Hunting for ASX shares? Experts say to avoid this sector in 2022
• Is the Westpac (ASX:WBC) share price good value after its first quarter update?
• 5 things to watch on the ASX 200 on Friday
• What can the Westpac results tell us about the outlook for ASX 200 bank shares?

Motley Fool contributor James Mickleboro owns 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 Accent Group 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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Key points

• ASX tech shares are capable of producing a high level of growth
• Bailador is a tech investment fund with holdings of several leading, private businesses with global aspirations
• Audinate is a leader in the AV space. It’s widely recognised for its audio services and it’s working hard on the video side of the strategy

ASX tech shares have the ability to grow quickly and achieve good profit margins because of the underlying nature of the business.

The recent sell-off in recent weeks and months has opened up some potential opportunities for investors to jump on.

With that in mind, here are two under-the-radar ASX tech share ideas:

Bailador Technology Investments Ltd (ASX: BTI)

This business is a growth capital fund. It is focused on the technology sector, actively managed by an investment team. Bailador gives investors exposure to a portfolio of IT businesses with global addressable markets.

The companies that are within the portfolio are in the ‘expansion stage’. Some of the businesses in the portfolio are Siteminder Ltd (ASX: SDR), Straker Translations Ltd (ASX: STG), Instaclustr, Rezdy, Access Telehealth, Standard Media Index and Nosto.

• Siteminder is a world leader in hotel management and distribution for online accommodation bookings.
• Instaclustr is an open source data platform for cloud-based solutions that require very large scale.
• Straker is one of the world’s fastest growing digital language translation service providers.
• Rezdy is an online channel manager and booking platform for tours and activities.
• Access Telehealth is a telehealth platform for Aussies to get access to healthcare services.
• Standard Media Index is a big data aggregation and analysis platform with exclusive access to advertising expenditure data.
• Nosto is an AI-powered e-commerce personalisation platform.

Bailador remains committed to a portfolio of around 10 to 12 investments and will be patient in waiting for the right opportunities and rigorous in assessing opportunities.

The ASX tech share typically invests $5 million or more in businesses that are usually run by the founders, are two to six years old, with a proven business model and attractive unit economics, have international revenue generation, are exposed to a huge market opportunity and can generate repeat revenue.

Audinate Ltd (ASX: AD8)

Audinate is a business focused on improving the audio visual experience for clients.

It offers the Dante audio over IP networking solution, which the company boasts is the worldwide leader. It’s used by sectors such as professional live sound, commercial installation, broadcast, public address and recording industries.

How does it work? Dante replaces traditional analogue cables by transmitting audio signals to multiple locations at once, using just an ethernet cable.

The ASX tech share is also heavily focused on building up the video side of the business because then it will be able to offer the full AV package to win over clients.

Audinate recently announced the acquisition of the Silex Insight video business. Silex produces video networking products for manufacturers of AV equipment. It has an experienced team of eight engineers, an existing revenue base of approximately US$2.5 million and intellectual property.

Silex’s team will complement the UK video team in Cambridge.

In the first quarter of FY22, Audinate made revenue of US$7.6 million, up 46.1% year on year. Demand is at a record high, with backlog orders for chips, cards and modules. However, component shortages are expected in the second half of FY22.

The post Tech investors should put these 2 top ASX shares on the watchlist appeared first on The Motley Fool Australia.

More reading

• Audinate (ASX:AD8) share price edges higher on acquisition update
• 2 exciting ASX growth shares tipped as buys

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 AUDINATEGL FPO, Bailador Technology Investments Limited, and SiteMinder Limited. The Motley Fool Australia owns and has recommended AUDINATEGL FPO. The Motley Fool Australia has recommended Bailador Technology Investments Limited and Straker Translations. 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 S&P/ASX 200 Index (ASX: XJO) returned to form last week after a major a selloff a week earlier. This led to the benchmark index rising 1.9% over the five days to end it at 7,120.2 points

While a good number of shares pushed higher with the market, some rose more than most. Here’s why they were the best performers on the ASX 200 over the period:

Nufarm Ltd (ASX: NUF)

The Nufarm share price was the best performer on the ASX 200 last week with a 26% gain. Investors were bidding the agricultural chemicals company’s shares higher following the release of a very upbeat trading update. According to the release, Nufarm’s first quarter revenue grew 36% over the prior corresponding period. Management advised that this was supported by favourable weather conditions.

News Corp (ASX: NWS)

The News Corp share price was on form and charged 11.7% higher over the week. Investors were buying the media giant’s shares following the release of its second quarter and half year update. In respect to the second quarter, News Corp delivered a 13% increase in revenue and an 18% jump in EBITDA. This led to the company reporting a first half operating profit of almost US$1 billion, which is up 30% over the same period a year earlier.

QBE Insurance Group Ltd (ASX: QBE)

The QBE share price wasn’t far behind with a 10% gain. There may have been a couple of drivers of this gain. One is the insurance giant being named one of Morgans’ best shares to buy in February. The broker has an add rating and $14.32 price target on its share. In addition to this, the company became a member of the United Nations-convened Net Zero Insurance Alliance last week.

Flight Centre Travel Group Ltd (ASX: FLT)

The Flight Centre share price was a positive performer and rose 10% last week. A number of travel shares were on form over the five days despite there being no news out of them. However, with COVID-19 case numbers easing in Australia, investors may be optimistic that the travel market recovery is coming now.

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

More reading

• Why top brokers see further upside to the Nufarm (ASX:NUF) share price
• Here are the top 10 ASX shares today
• Freaky Friday: Why was the ASX 200 so indecisive today?
• Expert sounds the warning bell on ASX ETFs… Here’s why
• These 3 ASX 200 shares are topping the volume charts 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 Flight Centre Travel Group Limited. 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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Key points

• Investors will probably want to know about the great ASX dividend shares revealed below
• Sonic Healthcare has a progressive dividend policy and is steadily expanding its operations with acquisitions
• Inghams has a policy of a high dividend payout ratio and it’s expecting poultry sales to grow in the long-term

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ASX dividend share investors will want to know about the two businesses that are about to be revealed.

They are businesses that have been paying dividends for a while and aim to reward shareholders.

These are companies that have long-term growth plans and could also pay solid dividends:

Sonic Healthcare Ltd (ASX: SHL)

Sonic Healthcare is one of the world’s leading pathology businesses. It also offers imaging services.

It operates in a number of countries including Australia, the UK, Germany, the USA and New Zealand.

Sonic Healthcare has increased its dividend every year in a row for about a decade. It has a progressive dividend policy, meaning the ASX healthcare share looks to grow the dividend every year if possible. It grew the FY21 dividend by 7.1% after a 149% increase in net profit to $1.32 billion.

That strong FY21 result demonstrated operating leverage in both laboratory and imaging divisions, with significant profit margin expansion.

A significant part of the ASX dividend share’s profit growth has been due to COVID testing. In August 2021 it reported that it had conducted around 30 million COVID PCR tests from the start of the pandemic. It’s also the largest non-government COVID vaccination provider.

In the first four months of FY22 to October 2021, it had grown revenue by 5% to $3.09 billion and earnings before interest, tax, depreciation and amortisation (EBITDA) had risen by 16% to $991 million. That was before the huge surge of Omicron cases.

Sonic Healthcare is rated as a buy by Morgan Stanley and expected to pay a dividend yield of 3.5% in FY22.

Inghams Group Ltd (ASX: ING)

Inghams is one of the largest poultry businesses in Australia.

It’s currently rated as a buy by the broker Citi with expectations of a grossed-up dividend yield of 8%.

The broker is expecting Inghams sales will have been significantly impacted because of the labour shortage due to the widespread outbreak of the Omicron variant.

Sales are/were being impacted by the fact that the lower levels of staff were hurting production volumes and operational efficiency.

Another issue for the ASX dividend share is that feed costs continue to remain elevated.

However, the Federal Government and State Government have made changes to isolation rules for close contacts in the food sector which should assist in alleviating some of the staff shortages. As operating conditions begin to stabilise, the company is expecting production capacity to recover quickly to meet customer and consumer demand.

Investors may want to know that in FY21, the business increased its total dividend by 17.9% to 16.5 cents per share.

Inghams has a policy of paying out “reliable dividends” to shareholders, with a dividend payout ratio of between 60% to 80% of underlying net profit after tax. It also wants to keep investing in growth opportunities and major projects.

The post 2 ASX shares every dividend investor needs to know about appeared first on The Motley Fool Australia.

More reading

• These were the best performing ASX 200 shares last week
• Top broker just rated these 3 ASX shares as buys
• Why BWX, PolyNovo, Sandfire, and Sonic shares are tumbling today
• ASX 200 (ASX:XJO) midday update: Crown jumps, miners rally, Sonic sinks
• 2 cheap ASX shares for value investors

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Sonic Healthcare Limited. 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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Last week was a positive one for the S&P/ASX 200 Index (ASX: XJO) at last. The benchmark index rebounded from a selloff a week earlier to rise 1.9% over the period to end it at 7,120.2 points.

Unfortunately, not all shares were able to climb with the market. Here’s why these shares were the worst performers on the ASX 200 over the period:

Boral Limited (ASX: BLD)

The Boral share price was the worst performer on the ASX 200 last week with a massive 36.1% decline. However, this decline was not driven by anything bad. Quite the opposite! This decline relates to Boral returning a total of $3 billion to shareholders following a series of asset sales. This led to Boral’s shares trading ex-capital return on Friday for a total cash distribution of $2.72 per share. This comprises a $2.65 per share capital reduction and an unfranked dividend of 7 cents per share.

Ansell Limited (ASX: ANN)

The Ansell share price was a very poor performer and sank 16.8% over the five days. Investors were  selling this health and safety products company’s shares after it downgraded its earnings guidance. Due to softening demand and COVID-related operational challenges, Ansell now expects its FY 2022 earnings per share to be between 125 US cents to 145 US cents. This is down materially from its previous guidance of 175 US cents to 195 US cents.

Hub24 Ltd (ASX: HUB)

The HUB24 share price was out of form and dropped 5.8% last week. This was despite there being no news out of the investment platform provider. One broker that would see this as a buying opportunity is Macquarie. A week earlier it upgraded HUB24’s shares to an outperform rating with a $32.40 price target. This implies potential upside of over 25% for investors.

Codan Limited (ASX: CDA)

The Codan share price wasn’t far behind with a 4.3% decline over the five days. This decline may have been driven by profit taking from some investors after a very strong gain in the previous week. That week, the Codan share price stormed higher despite the market selloff thanks to a very positive trading update.

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

More reading

• Why Boral, Magellan, REA, and SEEK shares are falling today
• ASX 200 (ASX:XJO) midday update: REA and News Corp impress, Boral plummets
• Did the Boral (ASX:BLD) share price really just collapse 40%?
• Down 20% in 2022, is the Ansell (ASX:ANN) share price a bargain buy?
• Why Amcor, Boral, Nufarm, and Westpac shares are rising today

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 Hub24 Ltd. The Motley Fool Australia has recommended Ansell Ltd. and Hub24 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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Key points

• The buy now, pay later (BNPL) sector could be in for a tough time in 2022 according to one expert
• 2022 has already seen a big decline for many of the players, including the Zip share price which is down 30% this year
• Brad Kelly points out that almost none of the BNPL ASX shares are making a profit, which will make it harder to raise capital

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The buy now, buy later (BNPL) ASX shares could be in for a “tough time” according to one of the experts of the payments industry.

There are plenty of BNPL businesses on the ASX like Zip Co Ltd (ASX: Z1P), Block Inc (ASX: SQ2), Sezzle Inc (ASX: SZL), Splitit Ltd (ASX: SPT), Laybuy Holdings Ltd (ASX: LBY), Openpay Group Ltd (ASX: OPY) and Ioupay Ltd (ASX: IOU).

Big declines

Investors have already seen major declines of the share prices of plenty of the buy now, pay later players.

In 2022, the Zip share price has fallen 30% so far. Over the past six months it has slumped 60%.

Since listing on the ASX a couple of weeks ago, the Block share price has fallen 17%. Block is the American company that recently acquired Afterpay.

In the calendar year to date, the Sezzle share price has fallen 27%. The past half-year has seen a 71% capitulation of Sezzle shares.

And so on. There has been a huge deterioration since the last reporting season.

‘Tough time’ coming

According to reporting by News.com.au, an expert of the payments sector called Brad Kelly has some negative expectations for the industry.

Mr Kelly, the managing director of Payment Services, said:

They are very good at marketing spin and PR, good at using the services of highly paid consultants to get around the Consumer Credit Act and are able to offer credit without it appearing as credit.

The reality is the BNPL provider’s bad debts are astronomical, none of them have made a profit, none of them have paid a dividend and share prices are down 70% to 80% to even 90% in some cases.

Mr Kelly points out that nearly all of the companies in the buy now, pay later sector are reporting annual accounting losses.

Another, expert, Grant Halverson, the founder and chief executive of payments consultancy McLean Roche, thinks there is a danger that the buy now, pay later sector could see rising bad debts and the ASX shares could end up with a ‘junk’ rating regarding their debt.

Mr Halverson warned that the BNPL sector could suffer from rising interest rates, which would make it trickier to make a profit and raise money. Speaking to the Australian Financial Review, he said:

They’re going to have to try to raise a lot of money.

It partly depends on how quickly interest rates go up, because if they go up quickly there could be carnage. If there’s a slower uptick then obviously the carnage will be slower in my view.

What are some of the issues?

The experts point out that several large financial players have entered the BNPL space including Commonwealth Bank of Australia (ASX: CBA), Suncorp Group Ltd (ASX: SUN) and Citibank. PayPal is another player that now offers a buy, pay later option.

News.com.au reported that Mr Kelly believes that with no profit and none being sustainably profitable yet, it’s likely that there will be consolidation in the sector.

There is also the longer-term risk of regulation and interest rate rises, which could impact growth too.

The post BNPL ASX shares in for a ‘tough time’: expert appeared first on The Motley Fool Australia.

More reading

• Some BNPL shares finished a horror week on a high. Why?
• Tech stocks crash, while Nufarm soars. Scott Phillips on Nine’s Late News
• Why did ASX 200 tech shares get annihilated today?
• Why Cettire, Novonix, Serko, and Zip shares are sinking today
• Is Zip (ASX:Z1P) the Titanic of ASX tech shares? It just keeps sinking

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 Block, Inc. and ZIPCOLTD 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.

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The top-10 crypto assets by market cap are all in the green today.

The Bitcoin (CRYPTO: BTC) price edged higher over the past 24 hours, up 1% to US$37,272 (AU$51,766).

Moving further down the list, not every crypto is gaining.

Bitcoin Cash, the number 28 token by market valuation, is flat over the 24 hours, trading at US$277.

While every crypto investor will be well familiar with Bitcoin, not everyone is up to speed on Bitcoin Cash.

With that in mind, The Motley Fool reached out to Ray Brown, market analyst at Australian cryptocurrency exchange CoinSpot.

What brought about Bitcoin Cash? 

First, we wanted to know how Bitcoin Cash came into being.

Brown told us:

Whilst Bitcoin Cash holds a number of similarities to the original Bitcoin, it’s an entirely independent form of cryptocurrency which was ‘forked’ from Bitcoin.

It was created in 2017 by a segment of the Bitcoin community who had the intention of leveraging the successful elements of Bitcoin, whilst solving some of the drawbacks such as limited scalability.

Bitcoin Cash has seen some success and has become a formidable contender to other cryptos. However, it hasn’t come close to matching the popularity of Bitcoin.

Why the push for crypto scalability?

So why did the Bitcoin community want to increase the world’s first crypto’s scalability?

According to Brown:

Bitcoin was originally created with the intention of being a digital currency. However, as more and more people invested, the slower the processing of transactions became. This is due, in part, to the size of the blocks being limited to just 1MB which allows very little room for scalability. Because of this, Bitcoin has become somewhat of a store of value as opposed to a way for people to easily make daily transactions.

So, has Bitcoin Cash managed to overcome these shortcomings?

“Bitcoin Cash was created to amend these limitations and has somewhat achieved this by incorporating a maximum block size of 32MB,” Brown said.

He continued:

This allows for faster transactions and increases the amount of people that can use it at one time. So much so, the team behind Bitcoin Cash claim it’s capable of 200 transactions per second, while Bitcoin averages just seven. As a result of this, the cost per transaction of Bitcoin Cash has decreased and the ability to scale has increased.

Bitcoin Cash has underperformed Bitcoin in 2022

Despite the decreased cost per transaction and increased ability to scale, Bitcoin Cash has underperformed Bitcoin in 2022. While BTC is down 22%, BCH has tumbled 38% in the New Year.

Brown told The Motley Fool:

Most altcoins, including Bitcoin Cash, have been underperforming so far in 2022. However, many are starting to now stabilise since the major crypto selloff in January 2022. This selloff wiped out $1 trillion in market cap from the industry. Bitcoin and Ethereum also lost up to half of their value from the peak.

As most altcoins are impacted by the movements of Bitcoin, this means they felt more pain.

 What should crypto investors take into account?

Finally, we asked Brown what crypto investors should take into account before deciding which of the tokens to potentially invest in.

“Bitcoin Cash doesn’t currently have the level of consumer trust that Bitcoin does and therefore doesn’t have nearly as many investors, just yet,” he said. “This means that, at the time of writing, Bitcoin Cash in a ‘real-world’ scenario is lessened.”

Brown ended with this investor caveat, “Although the market is showing Bitcoin to be more popular than Bitcoin Cash right now, you should always do your own research to determine which crypto asset is right for you.”

The post Battle of the crypto assets: Bitcoin versus Bitcoin Cash appeared first on The Motley Fool Australia.

More reading

• Is Bitcoin a good way to diversify an ASX share portfolio?
• Cryptocurrency crash fails to put a dampener on cash-raising fiesta
• Is Bitcoin using lots of energy actually a good thing?
• Bitcoin price slides again. Here’s what crypto investors are watching
• Why these five cryptos could leave Bitcoin in the dust in 2022

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns Bitcoin and Ethereum. The Motley Fool Australia owns Bitcoin and Ethereum. 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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If you’re wanting to build a strong portfolio, then having a few blue chips in there could be a good starting point.

But which blue chips should you buy? Two highly rated blue chip shares are listed below. Here’s why they could be in the buy zone right now:

Goodman Group (ASX: GMG)

The first blue chip ASX 200 share to look at is Goodman Group. It is a leading integrated commercial and industrial property company with a portfolio of warehouses, large scale logistics facilities, and business and office parks.

It has been experiencing very strong demand for these properties in recent years, which is underpinning solid earnings and distribution growth.

Goodman’s CEO, Greg Goodman, recently commented: “The results of the deliberate positioning of our portfolio over the last decade to adapt to and leverage the changes in the digital economy, are now being realised. Customer demand for high-quality properties close to consumers has never been greater.”

But it gets better. Goodman has $12.7 billion of development work in progress, which is expected to underpin further growth over the coming years.

Citi is a fan of Goodman. It currently has a buy rating and $28.00 price target on the company’s shares. The broker believes that Goodman’s earnings per share guidance for FY 2022 is conservative.

ResMed Inc. (ASX: RMD)

Another blue chip ASX 200 share to look at is ResMed. It is a sleep treatment-focused medical device company with a portfolio of industry-leading products that are improving the lives of sufferers of conditions such as sleep apnoea.

The good news is that this is a huge market with just an estimated one fifth of sufferers currently diagnosed. This gives ResMed a long runway for growth in the future.

For example, ResMed’s CEO, Mick Farrell, recently reaffirmed his expectation for the company to improve a quarter of a billion lives by 2025.

He commented: “Despite constantly evolving market dynamics, we remain focused on our goal to improve 250 million lives in the year 2025; supporting patients with the sleep apnea therapy, respiratory care therapy, and digital health solutions they need as we deliver value for all of our customers.”

The team at Morgans is very positive on ResMed. It has an add rating and $40.46 price target on the company’s shares. The broker believes ResMed is “well-placed as it builds a unique, patient-centric, connected-care digital platform that addresses the main pinch points across the healthcare value chain.”

The post 2 highly rated blue chip ASX 200 shares to buy appeared first on The Motley Fool Australia.

More reading

• Morgans names 4 more of the best ASX shares to buy in February
• 3 fantastic ASX shares to buy this month
• Leading brokers name 3 ASX shares to buy today
• ASX 200 (ASX:XJO) midday update: Ansell crushed, ResMed upgraded
• Broker upgrade sends ResMed (ASX:RMD) share price charging 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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended ResMed Inc. 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 roll into the new year of 2022 has been one for the ages for global equities markets, with this January’s performance firmly on the podium as the 8th worst on record, and the worst since 2008.

The benchmark S&P/ASX 200 Index (ASX: XJO) has fallen 500 points off its previous highs in January and is down 4% for the month, whereas the S&P/ASX Small Ordinaries Index (ASX: XSO) is down 7%.

ASX shares have been hit hard so far in 2022 as shifting yields on long dated bonds and the inflation narrative play havoc on stocks throughout the globe.

That’s important seeing as there tends to be an inverse correlation in the benchmark index and the yields on long duration bonds, as seen in the chart below. The chart shows this relationship, by plotting the return on the benchmark ASX 200 index (left hand side) versus the yield on the Australian Commonwealth Government 10 year bond (right hand side) going back to 1985.

As can be seen, bar a few anomalies in the data (the global financial crisis in 2007-09′ and the COVID-19 crash in 2020), long-term correlations have been negative for these two asset classes. In fact, this tends to be one of the many reasons portfolio managers include bonds into their allocations, to help smooth portfolio returns.

Over the past few months, these correlations have manifested heavily in the small cap domain of the market. Yields on longer bonds are rising, hurting the valuations on speculative assets as investors flock to more quality corners of the market. This activity has erased much of the gains that smaller ASX shares have earned in 2022. The same effect is observed on the chart below, although with the US Treasury 10 year yield.

Hence, any stock that offers long-term upside potential with additional features such as an attractive dividend yield to cover the downside is a key standout in this current market.

According to Investors Mutual Limited (IML) portfolio manager Simon Conn, wholesale distribution and marketing company Metcash Limited (ASX: MTS) might just fit that bill. Let’s take a look.

Why’s this ASX share a standout?

Conn is bullish on Metcash given his firm’s concentration and focus on the Australian mid and small cap sector.

Speaking to an episode of “Buy Hold Sell” on Livewire Markets on Friday, Conn stated his posture on Metcash is that it is “an underappreciated franchise, and a business that’s no doubt benefited from COVID, but [one] that’s delivered enduring benefits to their food business”.

“But also their liquor business has been growing and is a very resilient business. But really its the hardware business, where they position themselves as the second player in the hardware, retail and wholesale markets that we think is underappreciated by investors”, he said.

“Their acquisition of Total Tools looks really well priced. They bought that prior to COVID, effectively on about three-and-a-half times EBITDA”.

Conn also reckons that Metcash has grown exceptionally well after navigating its way throughout the COVID-19 landscape.

As such, the portfolio manager believes that local vendors and franchisees will continue reinvesting into their own stores with profits generated, leading local consumers to spend more in their local communities. This cycle looks set to play on repeat as well, according to the expert.

Not only that, but Conn is impressed by Metcash’s current valuation, its balance sheet and the total return prospects it offers investors with its current dividend yield of over 5%.

These are imperative characteristics for chasing quality names within the current investing climate – especially with the pullback in small cap stocks, Conn argues.

“The thing about Metcash is it’s really attractively priced on 13 times [earnings], and a yield of over 5%, with a really strong balance sheet. For us, it looks like a standout in the market, where a lot of stocks look pretty fully priced”.

Metcash shares finished Friday less than 1% up at $4.16, marking an impressive gain on the week.

Metcash share price snapshot

In the last 12 months, the Metcash share price has gained 22% after a strong performance in 2021. This year to date it has pared gains and is now down 7%, just in behind the broad indices.

However, investors are showing support once more and shares have gained around 7% in the past week of trading.

The post Well priced with a dividend yield over 5%, this ASX share ‘is a standout’: expert appeared first on The Motley Fool Australia.

More reading

• These 3 ASX 200 shares held up the best in the last market crash
• Are ASX consumer staples shares really ‘safe’ to hold in a market selloff?
• 2 underrated ASX dividend shares to think about: analysts
• 2 big-name ASX shares to buy right now
• Why Domino’s, Fortescue, Medibank, and Metcash shares are falling

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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