One increasingly popular way to invest is using exchange traded funds (ETFs). And it isn’t hard to see why. ETFs provide investors with opportunities that were unattainable a decade ago.

With that in mind, listed below are two ETFS that are popular with investors right now. They are as follows:

BetaShares Global Cybersecurity ETF (ASX: HACK)

The first ETF to look at is the BetaShares Global Cybersecurity ETF. This popular ETF gives investors exposure to the leading companies in the growing cybersecurity sector. This includes Accenture, Cisco, Cloudflare, Crowdstrike, Okta, Palo Alto Networks, and Splunk. These companies appear well-placed for growth over the 2020s due to increasing demand for cybersecurity services.

One of the companies you’ll be owning a slice of is Palo Alto Networks. It is the global leader in cybersecurity solutions. It offers advanced firewalls and cloud-based products that extend firewalls to cover other aspects of security. It has over 85,000 customers across over 150 countries. From these customers it generated US4.3 billion of revenue in FY 2021, which was up 25% year on year.

Over the last five years, the ETF has delivered a 23% per annum return for investors. This would have turned $10,000 into $28,000.

VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)

Another ETF for ASX investors to consider is the VanEck Vectors Morningstar Wide Moat ETF.

This ETF gives investors easy access to a diversified portfolio of companies that are fairly priced and have sustainable competitive advantages. This mirrors the investment approach of legendary investor Warren Buffett. And given the returns that he has generated over several decades, it could be a great approach to follow.

At present, there are a total of 46 US based stocks in the fund. This includes Amazon, Bank of America, Berkshire Hathaway, Intel, Mercado Libre, Microsoft, Philip Morris, Walt Disney, and Wells Fargo.

The index the VanEck Vectors Morningstar Wide Moat ETF tracks has beaten the market and generated a return of 21.5% per annum over the last 10 years. This would have turned $10,000 into $70,000.

The post 2 popular ETFs for ASX investors in 2022 appeared first on The Motley Fool Australia.

More reading

• 2 excellent ETFs for ASX investors to buy this month
• 2 market-beating ETFs for ASX investors in January
• Here are 2 ASX tech ETFs to buy after recent weakness
• How did the VanEck Morningstar Wide Moat ETF (ASX:MOAT) more than double the ASX 200’s returns in 2021?
• 2 ETFs for ASX investors to check out this month

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 BETA CYBER ETF UNITS. The Motley Fool Australia owns and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia has recommended VanEck Vectors Morningstar Wide Moat ETF. 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 Pilbara share price is in focus after some bad news for one of its competitors in the lithium space
• Rio Tinto has had its permits revoked for the lithium project in Serbia called Jadar
• Supply and demand could have an influence on future lithium prices

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The Pilbara Minerals Ltd (ASX: PLS) share price will be under the spotlight after the latest decision in Serbia regarding the Rio Tinto Limited (ASX: RIO) Jadar project.

Pilbara is one of the largest lithium miners with a market capitalisation of $11.3 billion according to the ASX.

Rio Tinto is by far the larger miner of the two. But it has intentions to grow its exposure to the battery material lithium.

Supply and demand is a very important factor when it comes to commodity prices. In theory, the more supply there is the more pressure there is on the price. However, the opposite can also be true. If there’s less supply then prices could improve.

Over the last 12 months there has been strong demand for lithium, pushing up the price.

Pilbara said in December that, lithium market conditions were strong, with high demand and constrained supply leading to record product pricing, which was still trending higher.

But in future years, more lithium projects are scheduled to come online.

What has happened with Rio Tinto?

According to reporting by the Sydney Morning Herald, the Serbian Prime Minister Ana Brnabic has revoked Rio Tinto’s permits.

There has been sustained campaigning by locals about the Rio Tinto Jadar project because of concerns regarding the potential environmental impacts of the mine.

The Serbian Prime Minister said according to the Sydney Morning Herald:

We are listening to our people and it is our job to protect their interests even when we think differently.

All decisions [linked to the lithium project] have been annulled. As far as project Jadar as concerned, this is an end.

What is Rio Tinto going to do about this? A spokesman said:

Throughout our work on the Jadar project we have always operated in compliance with the laws of the Republic of Serbia.

Rio Tinto is reviewing the legal basis of this decision and the implications for our activities and our people in Serbia.

How important was Jadar for the lithium market?

Jadar was expected to be a big project. Rio Tinto recently committed $2.4 billion to the lithium-borates project. It said it was one of the world’s largest greenfield lithium projects. It was expected to be one of the largest industrial investments in Serbia, contributing 1% directly and 4% indirectly to GDP.

Rio Tinto said it could supply enough lithium to power over one million electric vehicles per year. Full production was expected to be around 58,000 tonnes of lithium carbonate per year.

As Rio Tinto points out, lithium demand is expected to grow by between 25% to 35% per annum over the next decade.

If the Jadar project does not go ahead, then all of that lithium supply will not happen. There would be less total global supply, which may assist Pilbara.

Analyst rating on the Pilbara share price

Despite going up by around 200% over the past year, Pilbara is still rated as a buy by Macquarie with a price target of $3.70. The thought is that demand for electric vehicles can continue to keep the lithium price high.

The post Here’s why the Pilbara (ASX:PLS) share price is on watch appeared first on The Motley Fool Australia.

More reading

• Can lithium charge the Rio Tinto (ASX:RIO) share price higher?
• Why were Rio Tinto (ASX:RIO) and BHP (ASX:BHP) shares in the green today?
• Here are the 3 most heavily traded ASX 200 shares this Thursday
• Top brokers name 3 ASX shares to sell today
• 5 best shares to bet on electric cars right now

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 Macquarie 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

• Altium and Bapcor are both seen as industry leaders, but are these ASX shares buys?
• Bapcor is the automotive parts experts with multiple brands. However, it recently lost its boss
• Altium is a global leader in the electronics PCB design world. But, the business is getting caught up in the tech sell-off

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There are some strong ASX shares that are leaders in the industries that they work in.

Sometimes it can be a bit difficult to know which business is the sector leader. But others can point to much larger market shares like REA Group Limited (ASX: REA) and Telstra Corporation Ltd (ASX: TLS).

It can also be telling which business is improving its competitive position when it comes to the direction of the company’s market share or customer preference. Is that strength growing?

The below two ASX shares are industry leaders. Are they buys?

Bapcor Ltd (ASX: BAP)

Bapcor describes itself as Australasia’s premier provider of automotive aftermarket parts, accessories, automotive equipment, and services in trade, retail, wholesaling and so on.

Some businesses it operates includes Burson Auto Parts, Autobarn, Autopro, BNT, Truckline and Midas.

Over the past two months the Bapcor share price has fallen by 16.5%.

Two months ago, investors learned that the retirement of CEO and managing director Darryl Abotomey was being accelerated because of a marked deterioration in the relationship between the board and Mr Abotomey, making his position untenable.

The ASX share’s board said that the leadership transition would enable Bapcor to install a more contemporary leadership and management approach to drive the company’s growth while also ensuring consistency with changing stakeholders’ expectations, an appropriate governance and oversight framework remains in place.

The Bapcor share price is currently rated as a buy by the broker Credit Suisse. This broker thinks the decline is an opportunity, though the loss of Mr Abotomey does reduce the fair value of the business. But it thinks Bapcor can go through a recovery.

Credit Suisse puts Bapcor shares at 18x FY22’s estimated earnings. Bapcor is planning to add hundreds of more outlets across its different brands over the next few years to grow its scale, whilst also becoming more efficient. It also has plans to keep growing in Asia through its Burson network and the Tye Soon investment.

Altium Limited (ASX: ALU)

Altium is one of the world leaders when it comes to electronic PCB design. It also has other divisions including the electronic part search engine business called Octopart.

The business has been a takeover target in the past year, but it then went on to an even higher share price. However, Altium has been caught up in the recent tech sell-off – it’s down 15% this year, which is only three weeks old.

This ASX share is benefiting from the growth of the internet of things, where there is a large rise in the number of ‘intelligent’ products and the wide increase of electronics. That trend is being accelerated by 5G and edge computing.

A key part of the company’s planned growth is Altium 365, its cloud software platform. It’s benefiting from those electronic growth trends.

Altium is targeting $500 million of revenue in the next few years, whilst also looking to grow profit margins. In FY22, it’s expecting to grow revenue by 16% to 20% whilst increasing annualised recurring revenue (ARR) by 23% to 27%. The first four months of FY22 have been strong “across the entire Altium group”. Octopart is apparently outperforming and Altium 365 adoption is accelerating. China and Nexus are also performing well.

By 2025, it’s expecting to be in a position where it’s transforming the global industry.

Altimade is expected to be launched in the first quarter of 2022, which is being built on top of Altium 365 and incorporates the delivery of a design to realisation experience – the whole process – which has never been seen before in electronics.

Management are confident about the future. The broker Citi rates Altium as a buy, noting the strong performance by Octopart and the compelling future of Altimade. However, the price target is only $35.40, which is 6% lower than where it is today.

Citi thinks the current Altium share price is valued at 64x FY23’s estimated earnings.

The post Are these 2 industry-leading ASX shares too good to ignore and now buys? appeared first on The Motley Fool Australia.

More reading

• 2 explosive ASX growth shares analysts love right now
• Why did the Altium (ASX:ALU) share price gain 33% in a year?
• 2 ASX shares with growing fully franked dividends
• Here’s why ASX 200 tech shares (ASX:XTX) outperformed today
• Down 10% already in 2022. Is the Altium (ASX:ALU) share price now a buy?

Motley Fool contributor Tristan Harrison owns Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Altium. The Motley Fool Australia owns and has recommended Telstra Corporation Limited. The Motley Fool Australia has recommended Bapcor and REA 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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If you’re a fan of growth shares like I am, then you may want to look closely at the two shares listed below.

Here’s why these could be growth shares to buy:

Breville Group Ltd (ASX: BRG)

The first ASX growth share to look at is Breville. is one of the world’s leading appliance manufacturers behind a range of brands including the eponymous Breville brand and Sage. Breville has been consistently solid performer over the last decade and has generated strong returns for investors. The good news is that it looks well-placed to continue this trend over the next decade. This is thanks to the popularity of its brands, its international expansion, acquisitions, favourable consumer trends, and its continued investment in R&D.

Morgans is very positive on the company’s future. Its analysts have an add rating and $34.00 price target on Breville’s shares. This compares to the latest Breville share price of $26.99.

Domino’s Pizza Enterprises Ltd (ASX: DMP)

Another ASX growth share to look at is this pizza chain operator. Like Breville, Domino’s has also been growing at a consistently solid rate for over a decade. This is thanks to the popularity of its offering and the expansion of its footprint. And also like Breville, this positive trend looks set to continue over the next decade thanks to its bold expansion plans, strong offering, and equally strong balance sheet. The latter provides opportunities for further strategic acquisitions. And while food inflation could be weighing on costs at present, this is only likely to be temporary. In light of this, investors may be best being patient and focusing on the bigger picture.

Goldman Sachs is positive on Domino’s. It currently has a buy rating and $147.00 price target on the pizza chain operator’s shares. This compares to the latest Domino’s share price of $100.88.

The post 2 stellar ASX growth shares analysts rate as buys appeared first on The Motley Fool Australia.

More reading

• 2 consumer ASX shares ready to pop
• 3 buy-rated ASX shares
• Analysts name 2 excellent ASX growth shares to buy right now
• Why Domino’s, Fortescue, Medibank, and Metcash shares are falling
• ASX 200 (ASX:XJO) midday update: Afterpay-Block deal approved, Fortescue downgraded

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 Dominos Pizza Enterprises 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

• Westpac is the first major bank to increase its interest rate in 2022
• Its fixed rate has been increased by up to 0.20% for owner-occupiers and investors
• Brokers think that the Westpac share price can benefit from rising rates

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The Westpac Banking Corp (ASX: WBC) share price is in focus after the big four bank decided to raise its interest rate again.

Westpac and its other major peers – Commonwealth Bank of Australia (ASX: CBA), Australia and New Zealand Banking Group Ltd (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB) – have been increasing interest rates.

But Westpac has decided to be first move and raise its interest rate first in 2022.

How much has Westpac increased the interest rate?

According to reporting by Ratecity.com.au, Westpac decided to increase its fixed interest rate by up to 0.20%. The increases were for owner-occupiers as well as investors. It apparently includes all of Westpac’s divisions including the Bank of St George, Bank of Melbourne and BankSA.

Different time periods of loan lengths saw different increases.

The one-year fixed rate saw an increase of 5 basis points from 2.34% to 2.39%, the two-year fixed rate saw an increase of 10 basis points from 2.49% to 2.59%, the three-year fixed rate rose by 15 basis points to 3.04%, the four-year fixed rate increased 15 basis points to 3.34% and the five-year fixed rate went up 20 basis points to 3.59%.

Why did the interest rate increase?

Ratecity explained that Westpac decided to increase the interest rate because of the rising cost of fixed rate funding and expectations that the Federal Reserve in the United States is going to increase interest rates “faster and more aggressively” than previously thought.

The financial site is expecting many more lenders to increase interest rates this year.

Ratecity’s Research director, Sally Tindall, said:

Westpac is the first big four bank to hike fixed rates in 2022 but certainly won’t be the last.

The cost of fixed-term funding is rising with inflation in the US hitting its fastest pace in nearly four decades.

We expect other banks to follow within days on the back of sharp increases to the cost of wholesale funding.     

Mortgage holders who were fortunate enough to lock in a record-low fixed rate over the last couple of years are immune to these hikes, but only for the duration of their fixed rate term.

Anyone who fixed at the start of the pandemic for two years should start thinking about what their next step might be. When they come off their fixed rate, they’ll be looking at a very different market.

What could this mean for the Westpac net interest margin (NIM)?

When Westpac released its FY21 result, it said that its margins were being challenged in a competitive, low-rate environment.

Margins were being pushed lower to attract and retain customers. It was also being impacted by the portfolio mix – with more people choosing the lower-costing fixed rate loans.

In terms of the outlook, given in November 2021, it said that loan growth was expected to be sound as the economy rebounds, although net interest margins would be under pressure from the low interest rates and competition.

However, with banks now quickly increasing rates, it will be interesting to see how that plays out with wholesale costs rising too.

Westpac share price rating

One of the latest brokers to have their say on Westpac was Morgan Stanley. It currently rates the bank as a hold/’equal-weight’ with a price target of $22.70. It thinks that higher interest rates could be a positive for Westpac.

The post Westpac (ASX:WBC) share price in focus after raising loan interest rates again appeared first on The Motley Fool Australia.

More reading

• Does the NAB (ASX:NAB) share price make it the best value bank right now?
• Westpac (ASX:WBC) share price wobbles, bank predicts 5 rate hikes in 2022-24
• How are ASX bank shares performing today?
• What to expect from Westpac (ASX:WBC) during earnings season
• Is the NAB (ASX:NAB) share price an undervalued smart buy for dividends?

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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If you’d like to invest in a large number of shares but aren’t sure which ones to buy, you could look at the two exchange traded funds (ETFs) listed below instead.

These ETFs allow investors to buy and collection of shares through a single investment. Here’s what you need to know about them:

VanEck Vectors Video Gaming and eSports ETF (ASX: ESPO)

The first ETF to consider is the VanEck Vectors Video Gaming and eSports ETF. This ETF gives investors exposure to many of the largest companies involved in video game development, eSports, and gaming related hardware and software.

Among the companies you’ll be owning are game developers Activision Blizzard (which Microsoft is hoping to acquire), Take-Two, and Electronic Arts, as well as graphics processing unit (GPU) developer Nvidia. These companies appear well-placed for

growth thanks to the popularity of video games and eSports.

One of the companies in the fund is Take-Two. It is the game developer behind the Grand Theft Auto (GTA) and Red Dead franchises. These games, and GTA in particular, continue to generate significant revenues long after their releases thanks to micro transactions on their online versions.

As for Nvidia, it is the world’s leading GPU developer and sits at the forefront of modern technologies. Its GPU deep learning ignited modern artificial intelligence and is used by cryptocurrency miners.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

Another ETF to look at is the Vanguard MSCI Index International Shares ETF. This ETF provides investors with exposure to many of the world’s largest listed companies.

In fact, the ETF currently has a total of ~1500 shares in its portfolio. These include companies from all sectors and almost all geographies. This allows investors to participate in the long-term growth potential of the global economy.

Among its holdings are the likes of Amazon, Apple, Berkshire Hathaway, Facebook (Meta), Johnson & Johnson, Nestle, Shopify, Tesla, and Toyota.

Vanguard believes this ETF would be suitable for “buy and hold investors seeking long-term capital growth, some income, international diversification, and with a higher tolerance for the risks associated with share market volatility.”

In respect to income, the ETF currently provides investors with a dividend yield of 1.5%.

The post Why Vanguard MSCI Index International Shares and this ETF could give your portfolio a boost appeared first on The Motley Fool Australia.

More reading

• 2 ASX ETFs with strong growth potential
• The VanEck Video Gaming and Esports ETF (ASX:ESPO) looks set for a major shakeup. Here’s why
• 2 market-beating ETFs for ASX investors in January
• Here are 2 ASX tech ETFs to buy after recent weakness
• Is the Vanguard MSCI Index International Shares ETF (ASX:VGS) the most diversified ETF on the market?

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 Vanguard MSCI Index International Shares ETF. The Motley Fool Australia has recommended VanEck Vectors ETF Trust – VanEck Vectors Video Gaming and eSports ETF and Vanguard MSCI Index International Shares ETF. 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 REA Group share price has fallen 14% since 4 January 2022
• Property listings are booming, which is adding to REA Group’s revenue and earnings.
• Ord Minnett currently rates the business as a buy

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The REA Group Limited (ASX: REA) share price has fallen 14% in less than three weeks.

ASX share market volatility might be opening up some opportunities according to some analysts.

Whilst share prices do move around week to week, it has been both a painful week and painful month for plenty of the leading ASX growth shares.

Ord Minnett reckons that REA Group is one of the best businesses on the Australian Stock Exchange and it’s worth taking a look at the company after these recent declines.

REA Group share price target

Brokers regularly release notes and price targets on businesses. The note tells investors their latest thoughts on a business and the price target reflects where the broker thinks the share price could be trading in 12 months.

Broker Ord Minnett has a price target of $165 on the business.

How is the property market going?

REA Group’s profit is not directly correlated to how house prices are going.

There are two key inputs for the owner of realestate.com.au. First, what price is it able to charge for property owners to advertise on the website? Then, how many property listings are on the site?

Whilst REA Group does regularly increase the prices that it charges for advertising, the number of listings is significantly increasing.

In the first quarter of FY22, REA Group reported that revenue (excluding acquisitions) increased by 22% year on year. National listings increased 11% for the quarter, with Melbourne up 79%. Australian residential revenue increased for the quarter, benefiting from increased depth and ‘premiere’ penetration, listings growth, the contracted price rise from 1 July 2021 and continued growth in add-on products.

Quarterly free cashflow was up 29%, excluding acquisitions, to $49 million.

When telling investors about trading in October, it revealed that national residential listings were up 16% year on year.

In reporting regarding the number of homes expected to go under the hammer this weekend, the Australian Financial Review noted that 461 properties were scheduled for auction for the week ending 23 January 2022, an increase of 40% from a year ago as sellers look to capture remaining buyer demand and get ahead of competition.

The AFR quoted CoreLogic head of research Tim Lawless who said that volumes could remain high for the rest of the year:

If you’ve owned a property over the past couple of years you’ve seen a lot of equity created, so now is probably be a good time to cash out.

So, I wouldn’t be surprised if we do see an elevated number of auctions being held this year, which means clearance rates won’t hit those frothy highs in the early-to-mid-80 per cent or 70 per cent that we saw in the last quarter.

We might see demand diminishing further due to affordability and the prospect of interest rate hike this year and further tightening of credit policies.

REA Group share price valuation

After the recent declines, Ord Minnett puts the REA Group share price at 48x FY22’s estimated earnings and 40x FY23’s estimated earnings.

As a reminder, Ord Minnett has a price target of $165 with a buy rating on REA Group.

The post Is the REA Group (ASX:REA) share price a clear buy after dropping 14% in less than 3 weeks? appeared first on The Motley Fool Australia.

More reading

• Analysts name 2 excellent ASX 200 shares to buy
• Are these 2 top ASX growth shares buys?
• 2 outstanding ASX 200 blue chip shares to buy
• 3 five-star ASX shares to buy in 2022

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 REA 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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It certainly was a week to forget for the S&P/ASX 200 Index (ASX: XJO). A major selloff on Friday led to the benchmark index dropping 2.9% over the period to 7,175.8 points.

Fortunately, some shares were able to avoid the selloff and record gains last week. Here’s why these were the best performers on the ASX 200:

HUB24 Ltd (ASX: HUB)

The HUB24 share price was the best performer on the ASX 200 last week with a 7.9% gain. Investors were buying the investment platform provider’s shares following the release of its second quarter update. According to the release, HUB24 achieved record second quarter platform net inflows of $3.6 billion. This led to an increase in its total funds under administration (FUA) to $68.3 billion, which is up 118% compared to the prior corresponding period. HUB24’s strong quarter was driven by a combination of organic growth and flows from the Xplore acquisition.

Silver Lake Resources Limited (ASX: SLR)

The Silver Lake share price wasn’t far behind with a 6.6% gain over the five days. Investors were fighting to get hold of gold miners following a rise in the precious metal and demand for safe haven assets. Fellow gold miners Westgold Resources Ltd (ASX: WGX) and Gold Road Resources Ltd (ASX: GOR) recorded similar gains during the week.

JB Hi-Fi Limited (ASX: JBH)

The JB Hi-Fi share price was on form and charged 5.8% over the period. This follows the release of a better than expected trading update from the retail giant. JB Hi-Fi recorded modest sales growth during the second quarter, which led to sales falling just 1.6% during the first half despite cycling a very strong prior period. On the bottom line, its first half net profit of $287.9 million was down 9.4% year on year but 12.4% ahead of the consensus estimate.

Worley Ltd (ASX: WOR)

The Worley share price was the next best non-gold miner with a gain of 3.9%. This was despite there being no news out of engineering company. Though, a recent note out of UBS reveals that its analysts believe the company’s shares are great value. They have a buy rating and $13.20 price target on Worley’s shares.

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
• Does the NAB (ASX:NAB) share price make it the best value bank right now?
• 2 cheap ASX 200 shares rated as top buys
• These 3 ASX retail shares have grossed-up dividend yields over 8% right now
• ASX 200 (ASX:XJO) midday update: Whitehaven sinks, BHP to unify

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 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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Are you looking for dividend shares to add to your income portfolio when the market reopens next week? If you are, then the two listed below could be worth considering.

Both of these dividend shares have been rated as buys and tipped to provide income investors with attractive and growing yields in the coming years. Here’s what you need to know about them:

Adairs Ltd (ASX: ADH)

The first dividend share to look at is Adairs. It is a leading homewares and furniture retailer with a presence online and offline through three brands. These are the eponymous Adairs brand, its online-only brand Mocka, and the newly acquired Focus on Furniture brand.

Morgans is positive on its outlook and has an add rating and $4.80 price target. it is also forecasting fully franked dividends of 23 cents per share in FY 2022 and 29 cents per share in FY 2023. Based on the current Adairs share price of $3.81, this will mean yields of 6% and 7.6%, respectively.

National Australia Bank Ltd (ASX: NAB)

Another ASX dividend share to look at is NAB. This banking giant could be a top option for income investors that don’t already have meaningful exposure to the sector. This is due to its strong position in business banking and its acquisition of Citi’s Australian consumer business. The latter fills a gap in its offering which bodes well for its future growth.

Bell Potter is bullish on NAB and has a buy rating and $32.00 price target on its shares. It is also expecting attractive yields in the coming years, with fully franked dividends per share of 132.5 cents in FY 2022 and 134.5 cents in FY 2023. Based on the current NAB share price of $28.32, this will mean yields of 4.7% and 4.75%, respectively, over the next couple of years.

The post 2 ASX dividend shares with large and growing yields appeared first on The Motley Fool Australia.

More reading

• Does the NAB (ASX:NAB) share price make it the best value bank right now?
• These 3 ASX retail shares have grossed-up dividend yields over 8% right now
• 2 buy-rated ASX dividend shares with generous yields
• NAB (ASX:NAB) share price target raised at Morgan Stanley. So, is it a buy?
• 2 buy-rated ASX dividend shares with fully franked yields

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 ADAIRS FPO. The Motley Fool Australia owns and has recommended ADAIRS FPO. 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 NAB share price has performed strongly over the last year
• NAB is investing in technology and efficiencies to improve customer service and lower loan processing times
• Institutional investors like the quality that the bank is displaying

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The National Australia Bank Ltd (ASX: NAB) share price has gone up by 17% over the last year. This is sound outperformance of the S&P/ASX 200 Index (ASX: XJO) which has only risen 5.5% in the last year.

NAB has been going through a turnaround strategy with a fairly new leadership duo in place, both the CEO and chair.

What is helping the NAB share price deliver outperformance?

The bank is focused on improving both its business banking and home lending.

It’s investing in its small and medium business banking segment, as well as its business and private banking division, to grow by delivering differentiated and better banking experiences for customers and colleagues.

One of the things it’s doing in the business banking side is embedding performance disciplines. It’s also increasing its focus on simplifying, automating and digitising to provide faster, more seamless banking experiences. It is also leveraging data and analytics to provide insights, more personalised experiences and faster decisioning.

In FY21, small and medium business lending increased by 7%. Its market share in both SME and agricultural lending improved over the year.

In home lending it’s a similar story where it is increasingly simplifying and digitising the experience. During FY21, it simplified and streamlined its home lending policies, rollout digital application and decisioning tools and improved the ability for customers to self-serve through the NAB app.

These initiatives are delivering quicker, better outcomes for customers and colleagues despite there being a significant increase of application volumes. Unconditional approval times are approximately 30% faster.

In FY21, NAB delivered $6.56 billion of cash earnings, an increase of 76.8%. This was up 38.6% compared to FY20 excluding the FY20 large notable items.

After such a big profit increase, is the NAB share price now the best value bank?

Bank valuations

To keep the comparable bank valuations simple, these are the following estimates for FY23 on Commsec.

The Commonwealth Bank of Australia (ASX: CBA) share price is valued at 18x FY23’s estimated earnings.

The Westpac Banking Corp (ASX: WBC) share price is priced at 11x FY23’s estimated earnings.

NAB shares are valued at 13x FY23’s estimated earnings.

The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price is valued at 12x FY23’s estimated earnings.

So, whilst NAB may have a fairly low price/earnings ratio for FY23, it is not quite as low as Westpac and ANZ.

However, some investors are fans of the work that NAB is doing.

Is the NAB share price the best value bank?

Being the cheapest may not necessarily mean the best value.

Ord Minnett rates NAB as its favourite in the banking sector and rates it as a buy with a price target of $31.50. That’s more than 10% higher than where it is now.

The managers of WAM Leaders Ltd (ASX: WLE) also prefer NAB as the choice for big bank exposure due to its capital management team, a sector-leading business bank taking market share, further progressed cost management initiatives than peers, and its strong capital position.

The post Does the NAB (ASX:NAB) share price make it the best value bank right now? appeared first on The Motley Fool Australia.

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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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