The investment team from WAM Leaders Ltd (ASX: WLE) has named big-four ASX bank National Australia Bank Ltd (ASX: NAB) as the preferred pick in the banking sector.

Wilson Asset Management acknowledged that two banks were useful contributors to the investment performance of the listed investment company (LIC) WAM Leaders in February 2022.

The fund manager said the February reporting season was “strong overall”. More companies beat expectations and earnings outlooks were more positive than expected.

Westpac Banking Corp (ASX: WBC) was one bank that delivered a “sound result” that led to a large increase in the Westpac share price. That rise was 12% over the month.

But it’s NAB that remains the top ASX bank share pick for WAM Leaders.

Why is the NAB share price attractive to WAM?

The fund manager said NAB’s result demonstrated “strong” revenue growth and constrained cost growth.

NAB’s net interest margin (NIM) deterioration was less than the market was expecting, according to WAM.

The fund manager believes the bank’s results demonstrated a turning point for investors to focus on the positives of the Reserve Bank of Australia’s interest rate increases, which are expected to start in 2022.

WAM believes the banking sector will continue to perform in the coming months thanks to valuation support and earnings momentum.

What did NAB report?

NAB has a different reporting cycle from most other ASX shares. In February 2022, it reported its first-quarter numbers for the three months to December 2021.

In that quarterly result, NAB revealed $1.8 billion of cash earnings. That represented 9.1% growth year on year. Compared to the quarterly average of the second half of FY21, the cash earnings were up 12%.

However, the cash earnings before tax and credit impairment charges were up 6%.

NAB noted that revenue increased 8% in the quarter, reflecting higher volumes across housing and business lending.

Excluding impacts from markets and treasury, and higher ‘liquids’, the net interest margin (NIM) fell two basis points due to competitive pressures and housing lending mix, partly offset by lower funding and deposit costs.

However, while revenue grew 8%, expenses only increased by 2% in the quarter.

NAB CEO Ross McEwan commented on the numbers the bank revealed:

These results reflect an ongoing focus on executing our strategy, making the bank simpler for customers and colleagues. This is evident in our improving customer net promoter scores in consumer and business over FY22’s first quarter, which are pleasingly no longer negative. There is more work to do but we are moving in the right direction.

NAB share price valuation and expected dividend yield

WAM didn’t reveal what profit and dividends it’s expecting from NAB in FY22.

However, CommSec numbers for the bank show a forecast for FY22 earnings per share (EPS) of $2.09. That implies the NAB share price is valued at 15x FY22’s estimated earnings.

Commsec’s forecast includes a potential FY22 grossed-up dividend yield of 6.7%.

The post Expert: NAB is the ‘top pick’ in banking sector appeared first on The Motley Fool Australia.

More reading

• 2 compelling blue chip ASX shares to buy: top fund manager
• ‘Cut-throat’: Why did NAB make headlines today?
• Why ASX 200 bank shares are storming higher today
• 2 buy-rated ASX 200 dividend shares with top yields
• Is the NAB (ASX:NAB) share price a buy? Top broker expects sector-leading earnings growth

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 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 Vulcan Energy Resources Ltd (ASX: VUL) share price is having a tough time in 2022.

Since the start of the year, the lithium developer’s shares are down 17%.

Is the Vulcan share price weakness a buying opportunity?

One broker believes the Vulcan share price could be dirt cheap following its recent weakness.

According to a note out of Germany-based Alster Research, its analysts have a buy rating and $20.00 price target on the company’s shares.

Based on the current Vulcan share price of $8.95, this implies potential upside of over 120% for investors over the next 12 months.

What did the broker say?

Alster has noted that “crude oil and natural gas have seen steep price increases” in recent weeks.

Its analysts believe that these sky high energy prices are likely to be a boost to the transition to renewable energies, which bodes well for Vulcan and its massive Zero Carbon Project in Germany.

It commented: “Much likely, the push into renewable energies is about to accelerate as energy policy is reevaluated. Going in the same direction, the Fraunhofer Institute sees geothermal energy as a viable substitute for fossil energy sources and recommends action by policymakers and industry for an accelerated penetration. Overall, we expect the conditions for Vulcan to receive a further impetus not only due to the conflict, but also due to the fulfillment of climate targets. We confirm our PT with AUD 20.00, equivalent to EUR 13.22. We reiterate to BUY.”

All in all, the broker remains “confident about Vulcan’s operational development and improvement in becoming a provider of renewable energy and lithium with a zero-carbon footprint” and appears to see it as a great option for investors seeking exposure to the white metal and decarbonisation theme.

The post Renewable energy shift ‘is about to accelerate’ making Vulcan (ASX:VUL) shares a buy: Broker appeared first on The Motley Fool Australia.

More reading

• Vulcan (ASX:VUL) investors don’t bite after earnings, shares down 13% YTD
• 2 ASX lithium shares that brokers rate as buys with huge upside potential
• Why did the Vulcan Energy (ASX:VUL) share price plunge 6% on Monday?
• How have Vulcan Energy (ASX:VUL) shares been faring since their dual listing?

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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Like many blue-chip ASX shares on the S&P/ASX 200 Index (ASX: XJO), the Woolworths Group Ltd (ASX: WOW) share price has had its fair, er, share of both good times and bad in recent years.

If you had bought Woolworths shares at any time in 2020 after March, chances are you’ve been doing very well on your investment. But if you bought Woolies last New Year’s Eve, you’d be down around 5% on your investment.

Although using ‘points in time’ to judge your investing success like this, you can conjure up all sorts of possible scenarios. But some realities still bite hard. The fact remains that back in April 2014, roughly eight years ago, Woolies was going for just under $32 a share. Yesterday, the ASX 200 grocery giant closed at $36.60 a share. That means the Woolworths share price had put on just over $4… over eight years. That’s a fairly uninspiring return of 14.5% or so over that eight years.

But this rather sobering statistic hides some important factors to consider.

How much do Woolworths dividends matter?

The first is, of course, dividends. As a long-standing ASX 200 blue chip, Woolies has a long history of doling out substantial, fully franked dividends. So what difference do the dividends investors have received between April 2014 and today make to Woolworths investors’ total returns?

Let’s start with our capital. If an investor bought $10,000 worth of Woolworths shares back then, they would have gotten 313 shares, with some change left over. Today, those 313 shares would be worth $11,455.80 on yesterday’s close.

But we will also add the dividends that Woolworths has paid out since then. And Since April 2014, Woolworths has paid out a total of $8.34 in ordinary dividends per share, as well as one special dividend of 10 cents per share. That’s a total of $8.44 in dividends per share. We’ll add Woolworths’ upcoming interim dividend too, since it effectively left the company’s share price earlier this month when the shares traded ex-dividend.

That means the 313 Woolworths shares would have produced $2,763.79 in dividend income.

Add that to our principal capital and we have a total of $14,219.59. That stretches our total return to 42.2%. That works out to be a compounded annual growth rate of… 4.5% per annum.

But we have another factor to consider outside the dividends. No, it’s not franking, although with all of Woolworths’ dividends being fully franked, we can probably throw on an extra 2-3% per annum to account for this.

Forgetting a certain Endeavour?

Let’s talk Endeavour Group Ltd (ASX: EDV). Woolworths spun out Endeavour, the stable of Woolies’ old bottle shop and liquor businesses. It houses names like BWS and Dan Murphy’s. These all used to be a part of Woolworths, but the group was kicked out of the nest last year.

Woolworths shareholders received one Endeavour share for every Woolworths share owned back in June. So an investor who has held 313 shares of Woolworths since 2014 would now also own 313 shares of Endeavour. Yesterday, Endeavour closed at $6.98 a share, so let’s add another $2,184.74 to our total returns.

Endeavour has also paid out one dividend since its ASX listing, which was a payment of 7 cents per share. Plus, it will also pay out another dividend too, which has again already traded ex-dividend from the Endeavour share price. So that means we need to add another $61.04.

So our grand total for our Woolworths investment (plus principal) over the past eight years is $16,465.38. That works out to be a return of 64.65%, or 6.43% per annum.

So that’s a lot better than what you might first assume. But again, perhaps not as much as one might expect. Saying that, this is just two points in time, so take it all with a grain of salt.

At the last Woolworths share price, this ASX 200 grocery giant had a market capitalisation of $43.05 billion, with a dividend yield of 2.57%.

The post The Woolworths (ASX:WOW) share price has only added $4 in 8 years. Have the dividends been worth it? appeared first on The Motley Fool Australia.

More reading

• 2 compelling blue chip ASX shares to buy: top fund manager
• 5 things to watch on the ASX 200 on Thursday
• If you invested $10,000 in Macquarie (ASX:MQG) shares a decade ago, here’s what it would be worth now
• Is the CSL share price heading back over $300 in 2022?
• Does the AFIC (ASX:AFI) dividend beat the ASX 200?

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 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 high-performing fund manager Wilson Asset Management (WAM) has recently identified some ASX blue-chip shares that it owns (or owned) in one of its leading portfolios.

WAM operates several listed investment companies (LICs). Two of those LICs are WAM Capital Limited (ASX: WAM) and WAM Research Limited (ASX: WAX).

There’s also one called WAM Leaders Ltd (ASX: WLE) which looks at the larger businesses on the ASX, which investors can call ASX blue-chip shares.

WAM says WAM Leaders actively invests in the highest quality Australian companies.

The WAM Leaders portfolio has delivered gross returns (that’s before fees, expenses, and taxes) of 15.5% per annum since its inception in May 2016. That is superior to the S&P/ASX 200 Accumulation Index average return of 9.1%.

These are the blue-chip ASX shares that WAM outlined in its most recent monthly update:

Endeavour Group Ltd (ASX: EDV)

Endeavour Group is described as a leading hospitality and liquor business.

WAM said the company posted a very strong interim result, which showed a combination of “earnings resilience and disciplined management execution”.

It was noted that the half-year report revealed little impact from COVID-19-related interruptions on the retail business with momentum “continuing to build” in the hotels business as the Omicron COVID-19 variant impact subsides.

In the interim result, Endeavour reported group sales of $6.34 billion (down 0.3%), online sales of $603 million (up 24.8%) and net profit after tax (NPAT) of $311 million (up 15.6%).

The fund manager likes both the retail and hotel divisions of the ASX blue-chip share, which are benefiting from increased leisure and entertainment spending by households.

WAM believes there is a compelling capital expenditure investment profile and multiple growth avenues for Endeavour Group to pursue including its data strategy, the digital arm called ‘Endeavour X’, and private label brands.

Computershare Limited (ASX: CPU)

Computershare is another business that is liked by the investment team at Wilson Asset Management.

This company operates share registries and provides software specialising in financial and share markets. WAM says that it’s one of the most interest-rate exposed companies on the ASX because it earns interest on cash balances.

It was noted that Computershare’s management quantified the exact exposure in its recent half-year result. A 100 basis point increase in average rates would lead to improved annualised earnings by 26 cents per share.

WAM clarified that Computershare generated $0.51 of earnings per share (EPS) in the 2021 financial year.

The fund manager pointed out that six rate rises are predicted for the US over the next 12 months.

It was only last month that Goldman Sachs raised its Federal Reserve forecast to be seven consecutive 25 basis point rate hikes in 2022.

For WAM, the Computershare earnings trajectory is “compelling”.

The post 2 compelling blue chip ASX shares to buy: top fund manager appeared first on The Motley Fool Australia.

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• Up 10% in a month, why the Endeavour (ASX:EDV) share price has still ‘got legs’: fundie
• Own Endeavour (ASX:EDV) shares? Here’s how the company is responding to the Ukraine crisis
• Party pooper? Why the Endeavour (ASX:EDV) share price is slumping today
• Here’s what you need to know about the Woolworths (ASX:WOW) dividend
• 4 ASX shares that love rising interest rates: report

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 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 Webjet Limited (ASX: WEB) share price has been a relatively positive performer in 2022.

Since the start of the year, the online travel agent’s shares have risen by 4.5% to $5.67.

This compares favourably to a 5.5% decline by the ASX 200 index over the same period.

Where next for the Webjet share price?

While opinion remains largely divided on the Webjet share price, one leading broker believes it is great value at the current level.

According to a recent note out of Goldman Sachs, its analysts have a buy rating and $6.90 price target on the company’s shares.

Based on the current Webjet share price, this implies potential upside of almost 22% over the next 12 months.

What did the broker say?

Goldman Sachs is positive on Webjet and believes investors should choose it ahead of rival Flight Centre Travel Group Ltd (ASX: FLT). The broker has a neutral rating and $19.50 price target on the latter.

It commented: “We are Buy rated on WEB, which we expect to come out stronger on the other side of the pandemic with growth potential both in the B2B and B2C spaces. WEB also maintains a strong balance sheet with c. 24 months of runway (from September 2021) at zero activity levels.”

Whereas for Flight Centre, the broker said: “We remain positive on the longer-term outlook for corporate recovery being ahead of pre-COVID levels driven by new contract wins, but more conservative on the leisure outlook. The stock remains fairly valued vs. global travel peers. We maintain our Neutral rating with a 12m Target Price of A$19.50.”

All in all, this could make Webjet a share to consider if you’re looking for exposure to the travel sector right now.

The post Goldman Sachs tips Webjet (ASX:WEB) share price to rise over 20% appeared first on The Motley Fool Australia.

More reading

• Why is the Flight Centre share price lifting off today?
• Why are ASX travel shares taking off today?
• ASX 200 (ASX:XJO) midday update: Magellan jumps on buyback news, travel shares take off
• The Webjet (ASX:WEB) share price has fallen 10% in a month
• Flight Centre (ASX:FLT) share price climbs amid technology investment

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 and Webjet 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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Most investment articles you read are focused on which ASX shares you might like to buy, with The Motley Fool no exception.

However, many experts warn knowing how and when to sell is just as, if not more, important than buying.

After all, it’s when you dispose of your shares you actually make a loss or a return on your initial investment.

You can rely on technical indicators — watching how the stock price behaves to determine if and when you should sell.

But what about qualitative factors? When you buy a share, how and what the business is doing is an important motivator in taking on the investment.

Fidelity Global Demographics Fund portfolio manager Oliver Hextall offered some ideas recently.

The qualitative signals to sell

Hextall told a Fidelity event in Sydney this week that retesting the original investment thesis is an important determinant in whether his team sells a stock.

“When a stock does well, we’ll review the thesis in light of whatever’s driven the outperformance and we’ll have another think about the valuation,” he said.

“If we think at that new price all of the attractions that we’re looking for are fairly valued, then we would sell, because we think there’s better opportunities out there.”

What about if the stock price has fallen?

“Again, we would review the thesis in light of whatever’s driven the underperformance and we’ll have a look at the valuation,” said Hextall.

“If we think nothing’s changed or potentially it’s more attractive, we might add to it and keep the stock. But if we think the thesis is broken or fundamentally challenged, then we would sell out.”

Selling can be ‘painful’

Hextall admitted selling an investment at a loss is psychologically “painful”, even for professionals.

He recalled the time when his fund owned shares in European software giant SAP SE (NYSE: SAP).

“Around the end of 2020, there was a disappointing update… There were execution issues. And when we reviewed that we felt the thesis was challenged and actually broken. So we decided to sell,” he said.

“On the day, the stock was down maybe 20%, so we crystallised a loss and that was quite painful.”

But in retrospect it was the right decision. SAP shares have fallen a further 15% since the end of 2020.

The post This is when to sell your ASX shares appeared first on The Motley Fool Australia.

More reading

• Goldman Sachs tips Webjet (ASX:WEB) share price to rise over 20%
• 3 high-dividend ASX shares that are TRAPS: expert
• Busted: 3 common ‘myths’ about crypto
• 2 dividend shares analysts rate as buys with big yields and even bigger upside
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended SAP SE. 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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With all the calamity in the world — a war in Europe, rising interest rates, skyrocketing oil prices — dividend ASX shares have really come back into vogue.

Growth shares that rely on future earnings have been heavily dumped in favour of more stable and profitable companies that return earnings to shareholders via dividends or buybacks.

Combine that with the S&P/ASX 200 Index (ASX: XJO) dropping almost 4% for the year, and there are many stocks out there now paying stunningly high yields.

However, an income fund manager has warned investors to not fall prey to dividend “traps”.

When a 15% return is not as good as it sounds

Plato Investment Management senior portfolio manager Dr Peter Gardner took Magellan Financial Group Ltd (ASX: MFG) as a prime example in the current market.

The dividend yield for the fund manager now sits at an outrageous 15.34%, according to Google Finance, after its share price halved since 17 December.

“We think their ability to earn fee revenue and performance fee revenue, given their performance hasn’t been great over the last year… their dividend going forward is likely to be cut in the next result,” he told a client webinar.

“That’s a dividend trap that we think investors should be wary of.”

Magellan shares closed Wednesday at $14.40.

Dividends cut already, but more potentially coming

Two other traps Gardner pointed out were AGL Energy Limited (ASX: AGL) and Lendlease Group (ASX: LLC).

At the end of last year, AGL had a yield of 10.6% and LendLease gave out 2.7%.

But such high starting points meant brutal cuts came along during reporting season, according to Gardner, and it might not be the end of it.

“We had forecast AGL especially as a strong dividend cut candidate,” he said.

“When they announced a significant cut in their dividends, the actual dividend received was 2.6%.”

Similarly, LendLease is now down to 0.5%.

And to rub salt into the wound, both ASX shares provide zero franking credits.

“We think those continue to remain dividend traps.”

AGL shares finished Wednesday at $7.21, while LendLease finished the session at $10.62.

The post 3 high-dividend ASX shares that are TRAPS: expert appeared first on The Motley Fool Australia.

More reading

• Why Arafura, Block, Magellan, and Qantas shares are storming higher
• ASX 200 (ASX:XJO) midday update: Magellan jumps on buyback news, travel shares take off
• Magellan (ASX:MFG) share price on watch after announcing share buyback
• Leading brokers name 3 ASX shares to sell today
• Top broker gives its verdict on the Magellan (ASX:MFG) share price

Motley Fool contributor Tony Yoo 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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Balmoral Asset Management director Angus Crennan is a trailblazer in the Australian investment community.

He might be the first fund manager in the country who shut down his global shares fund then immediately launched a new digital assets investment product.

“We’re all in on digital assets,” he told The Motley Fool.

“There’s 300 million digital assets users now. We fully expect that to be a billion by 2026. This is like double the speed of the uptake of the internet.”

While many of his former clients have been keen to jump into the world of cryptocurrencies, non-fungible tokens and the like, some are more conservative.

They worry about the risks that have been mentioned in financial media for many years.

Crennan reckons that those anxieties, while reasonable to have, are overblown. 

“It’s dispelling some of these misconceptions and these legacy issues that people are worried about,” he said.

“They’re very valid concerns. It’s just that the technology and the evolution in this space means that they’re being addressed.”

He picked out 3 of the biggest stereotypes about digital assets and explained why they’re untrue:

Myth 1: Crypto is used by criminals

Some old clients have expressed concern about how cryptocurrencies can be used by crime groups or terrorist organisations to launder their money.

Crennan admitted the anonymous nature of blockchain technologies, on which crypto and NFTs are implemented, might have meant criminals could hide many years ago.

But the whole point of blockchain is that the entire ledger is publicly viewable, and there are now third-party services like Chainalysis that track every transaction.

“They increasingly map the blockchains, and that’s really developing AML [anti-money laundering] within this digital ecosystem,” he said.

“If you think of a bank’s database of who owns what, that’s unique to the bank — Whereas the blockchain is publicly available. Everyone can see it. So that concern around AML and terrorism financing, there’s very valid arguments that’s actually a lot more overblown than people realise.”

Myth 2: Crypto destroys the environment

Another concern Crennan hears is how cryptocurrencies like Bitcoin (CRYPTO: BTC) are not environmentally friendly, as the computers that mine the coins and administer the network require huge amounts of energy.

The fund manager admitted Bitcoin itself is problematic as it uses a “proof of work” system to administer its blockchain. But most currencies implement transactions on a “proof of stake” basis, which are far more efficient.

“Proof of work is kind of like, imagine 10 people starting a race and running all the way to the end of the race, but only one of them is allowed through the gate. So then the other 9 runners have to go back to the start, and all that energy and time is wasted,” he said.

“Whereas most of the cryptocurrencies operate on a proof of stake basis and what happens there is that there’s a selection process of who’s going to do the reconciliations. What that means is modern cryptocurrencies like Solana (CRYPTO: SOL) use less energy to do a transaction than it does to do a Google search.”

Myth 3: Risk management is impossible for digital assets

Retail investors often hear of the wild volatility involved in crypto and digital assets.

Crennan would dispute the myth that risk management is impossible with a digital-only investment portfolio.

Firstly, he pointed out that the risks inherent in digital are not different to ones present in traditional investments.

“I’d add that it doesn’t matter what type of investing you do, you’re going to have counterparty and cyber risk,” he said.

“Even if you are using Macquarie Group Ltd (ASX: MQG) as your broker. It is feasible that Macquarie Group could cease to exist, right?”

Second, Crennan insisted he’s very careful about the choice of exchanges he uses.

“Some of the things that we look at are things like, how are their algorithms going to work to protect us?” he said.

“Has that exchange ever had a liquidation event where the lender has not been able to get their money back, or the counterpart has not been able to get their money back? We look at their infrastructure.” 

The Balmoral team also assesses how the exchange meets industry standards for cybersecurity and systems design.

“Do they hold everything in cold wallets? This is really important. Have they passed multiple security audits?

“Do they have an active bug bounty program where they employ white hat hackers scoping their systems for vulnerabilities on a consistent basis? And then also we look at the liquidity.”

The post Busted: 3 common ‘myths’ about crypto appeared first on The Motley Fool Australia.

More reading

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• ‘Significant step’: What’s boosting the Telstra share price this week?

Motley Fool contributor Tony Yoo owns Bitcoin, Macquarie Group Limited, and Solana. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Bitcoin. The Motley Fool Australia owns and has recommended Bitcoin. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool Australia owns and recommends Bitcoin. 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 in the market for some dividend shares, then look no further. Listed below are two highly rated ASX dividend shares that analysts have recently rated as buys with yields greater than 5%.

Here’s what you need to know about them:

Bank of Queensland Limited (ASX: BOQ)

The first ASX dividend share for investors to consider is Bank of Queensland. It could be a good option for investors that don’t already have meaningful exposure to the banking sector. Particularly at the current level, which the team at Morgans sees as very attractive.

Its analysts said: “We see exceptional value in Bank of Queensland’s stock. The Company has been executing well on its transformation program, it continues to grow its home loan book at above-system levels, we don’t expect its NIM to fare worse than the industry-wide trend, and cost synergies associated with the ME Bank acquisition are being realised at a faster rate than originally anticipated.”

Morgans is expecting fully franked dividends per share of 48 cents in FY 2022 and then 55 cents per share in FY 2023. Based on the current Bank of Queensland share price of $8.27, this will mean yields of 5.8% and 6.7%, respectively. The broker also sees plenty of upside for its shares with its $11.00 price target.

HomeCo Daily Needs REIT (ASX: HDN)

Another ASX dividend share to look at is the HomeCo Daily Needs REIT. This property company, which recently merged with Aventus, invests in convenience-based assets across target sub-sectors of neighbourhood retail, large format retail, and health and services.

HomeCo Daily Needs has been a strong performer so far in FY 2022. During the first half, it delivered a 38% increase in funds from operation (FFO) per share to 4 cents, which led to management upgrading its full year guidance. This and recent share price weakness appear to have caught the eye of Goldman Sachs.

It commented: “We believe HDN is undervalued at its current valuation given its diversified tenant base, and see it as well positioned to benefit from the shift to omni channel retailing, with additional external growth opportunities to drive earnings growth over the medium-term.”

Goldman has a buy rating and $1.70 price target on its shares. And based on the current HomeCo Daily Needs share price of $1.36, it is expecting dividend yields of 6% in FY 2022 and 6.6% in FY 2023.

The post 2 dividend shares analysts rate as buys with big yields and even bigger upside appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy today
• Bargain buy? Broker tips Bank of Queensland (ASX:BOQ) share price to rise 37%
• The Bank of Queensland (ASX:BOQ) share price has lost half its value in 15 years. How is the bank’s turnaround strategy going?
• Is the Westpac (ASX:WBC) share price the cheapest bank to buy right now?
• 3 reasons why Soul Pattinson (ASX:SOL) is a strong ASX dividend share idea

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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On Wednesday, the S&P/ASX 200 Index (ASX: XJO) had a good day and stormed notably higher. The benchmark index rose 1.1% to 7,175.2 points.

Will the market be able to build on this on Thursday? Here are five things to watch:

ASX 200 expected to rise again

The Australian share market is poised to rise again on Thursday following a strong night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 75 points or 1% higher this morning. In late trade on Wall Street, the Dow Jones is up 1%, the S&P 500 is up 1.6%, and the Nasdaq has jumped 2.9%.

US Fed raises rates

The US Federal Reserve has elected to increase interest rates for the first time in more than three years. The central bank revealed that it made its 0.25% increase in an effort to address rising inflation without stunting economic growth. This brings the rate into a range of 0.25%-0.5%. But it won’t stop there. According to CNBC, the Fed intends to lift rates at each of the six remaining meetings this year.

Oil prices fall

It could be a subdued day for energy shares including Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) after oil prices dropped overnight. According to Bloomberg, the WTI crude oil price is down 1.1% to US$95.40 a barrel and the Brent crude oil price is down 1.6% to US$98.31 a barrel. Russian-Ukraine optimism and the release of US inventory data weighed on prices.

Westpac shares rated as a hold

Westpac Banking Corp (ASX: WBC) shares are a hold according to the team at Bell Potter. According to a note, the broker has retained its hold rating but lifted its price target on Australia’s oldest bank to $25.00. The broker notes that Westpac has appointed a Chief Transformation Officer, Yianna Papanikolaou. However, its analysts said: “it remains to be seen if this is a wise move in de-risking the bank’s overall change and investment thesis – and especially if cutting costs purely to $8.0bn in FY24e is the only thing that matters to date.”

Gold price drops

It could be a poor day for gold miners Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) after the gold price dropped again. According to CNBC, the spot gold price is down 0.4% to US$1,921.8 an ounce. The precious metal came under pressure after the Fed increased rates.

The post 5 things to watch on the ASX 200 on Thursday appeared first on The Motley Fool Australia.

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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 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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