The Pilbara Minerals Ltd (ASX: PLS) share price is having yet another positive day.

So much so, the lithium miner’s shares have hit a record high of $3.65 on Wednesday.

This means that Pilbara Minerals’ shares are now up a massive 35% in the space of a month.

Why is the Pilbara Minerals share price charging higher today?

Investors have been bidding the Pilbara Minerals share price higher on Wednesday following the release of a note out of Citi.

According to the note, although the broker has only retained its neutral (high risk) rating, it has lifted its price target by a sizeable 44% to $3.60.

This is broadly in line with where the Pilbara Minerals shares price is trading this afternoon.

What is the broker saying?

While Citi isn’t recommending investors buy the company’s shares, it also believes that it is “too early to sell”. This is due to its belief that lithium prices will remain higher for longer.

The broker explained: “We expect demand to remain strong amid mild supply growth over the next six months, resulting in pricing staying higher for longer through the first half of 2022.”

“We maintain Neutral/High Risk rating on PLS and believe the recent share price performance largely captures expected favorable earnings momentum,” Citi has also stated.

What are other brokers saying?

The team at Macquarie Group Ltd (ASX: MQG) believe the Pilbara Minerals share price is also trading close to fair value now.

The broker recently put an outperform rating and $3.70 price target on its shares. It is predicting lithium prices to remain at record levels for the next four years, which led to its analysts making significant upgrades to their earnings estimates for Pilbara Minerals and other lithium miners.

The post Pilbara Minerals (ASX:PLS) share price hits record high as Citi says ‘too early to sell’ appeared first on The Motley Fool Australia.

More reading

• Why is the Pilbara Minerals (ASX:PLS) share price having such a stellar start to 2022?
• These were the best performing ASX 200 shares last week
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Here are the 5 best performing ASX 200 mining and resource shares of 2021
• Here are the 3 most heavily traded ASX 200 shares this Thursday

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 Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3nf2QCz

Looking back on 2021, it was certainly an eventful year filled with ups and downs. The prolongation of impacts from COVID-19 impeded some companies, while others managed to march onwards and upwards. To understand exactly how it played out, we’re reviewing the best and worst ASX sectors of last year.

The placing of sectors might be a surprise to investors. Likewise, the sheer scale of returns from some of the market’s sectors in a single 12-month period is mindblowing.

Let’s dive into the breakdown.

What were the best ASX sectors of 2021?

Out of the 11 sectors that make up the S&P/ASX 200 Index (ASX: XJO), only two finished the year in the negative. This helped the benchmark index achieve a 13% return, which is well above the historical average.

However, there were three sectors that did a fair chunk of the heavy lifting when it came to last year’s gains. These were telecommunications, consumer discretionary, and financials. All three of these sectors conjured up a remarkable 20%-plus return in 2021.

Zeroing in on telecommunications, this quiet-achieving ASX sector rocketed 28.5% higher last year. Thunderous rallies in Telstra Corporation Ltd (ASX: TLS) and Uniti Group Ltd (ASX: UWL) put this segment of the market out in front.

The next best sector, consumer discretionary, served up a 21.3% return at the end of 2021. Major contributors to this market-beating performance included Domino’s Pizza Enterprises Ltd. (ASX: DMP), Idp Education Ltd (ASX: IEL), Aristocrat Leisure Limited (ASX: ALL), and ARB Corporation Limited (ASX: ARB).

Financials was the third-best ASX sector of the previous year. A rebounding economy and strong demand for home lending boosted the share prices of major banks. The big four all cemented solid gains last year, however, it was Macquarie Group Ltd (ASX: MQG) with a 48% return that bumped up the sector.

In the 2021 doghouse

Not every sector was as fortunate as the ones mentioned above. The two segments of the share market finishing in the negative last year were energy and information technology.

Firstly, energy suffered a challenging year with large oil and gas companies, such as Woodside Petroleum Limited (ASX: WPL) and Santos Ltd (ASX: STO), dragging. Despite the price per barrel of crude oil increasing 55% in 2021, these giants struggled as they both underwent separate merger deals. The energy sector fell 2% over the 12-month timeframe.

Secondly, tech shares lost favour among investors as fears of rising interest rates loomed. This once high-flying sector shed 2.8% in 2021. Two shares falling from their prior market darling status were Afterpay Ltd (ASX: APT) and Appen Ltd (ASX: APX).

Why this year could be different?

While there are circulating fears of rising interest rates, one expert has offered calm to the concerns. In a possibly contrarian take, Chris Demasi of Montaka Global Investments highlighted his expectation for rates to stay lower for longer.

In conversation with Livewire, Demasi said:

We’ve got populations that are ageing, we’ve got the use of technology that’s intensifying and that boosts productivity, and then on top of that, we’ve got very, very high loads of debt around in the world. And all three of those things say interest rates are going to be lower for longer. 

Based on this, we could potentially see a reversal in the ASX tech sector if rates turn out to be less of a fear than first thought.

The post The best and worst ASX sectors of 2021. Why this year could be different appeared first on The Motley Fool Australia.

More reading

• Here are the 5 best performing ASX ETFs of 2021
• ASX 200 (ASX:XJO) midday update: Afterpay-Block deal approved, Fortescue downgraded
• 2 ASX 200 shares that could be top buys for dividends
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX shares today

Motley Fool contributor Mitchell Lawler owns Afterpay Limited, Appen Ltd, and Macquarie Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Afterpay Limited, Appen Ltd, and Idp Education Pty Ltd. The Motley Fool Australia owns and has recommended Afterpay Limited, Appen Ltd, and Telstra Corporation Limited. The Motley Fool Australia has recommended ARB Corporation Limited, Dominos Pizza Enterprises Limited, Macquarie Group Limited, and Uniti Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/31Sjhxq

Although the ASX share market has had a rather rocky start to 2022, remember that 2021 was a pretty decent year for ASX shares overall. In the year that has just passed us by, the S&P/ASX 200 Index (ASX: XJO) returned roughly 13% (plus dividends and franking). That, in turn, means that any ASX index exchange-traded fund (ETF), which are perenially the most popular ETFs on the market, would have more or less matched that return.

But some ETFs managed a 2021 performance far exceeding that benchmark. So here are the ASX’s best performing ETFs of 2021.

The 5 best performing ASX ETFs of 2021

iShares S&P 500 ETF (ASX: IVV)

This ETF from BlackRock’s iShares is our first high flyer to check out today. IVV is a rather simple ETF, covering the most-tracked index in the world, the US S&P 500. This index tracks 500 of the largest companies on the US markets. These include everything from the US tech giants like Apple Inc (NASDAQ: AAPL) and Amazon.com Inc (NASDAQ: AMZN) to Warren Buffett’s Berkshire Hathaway Inc (NYSE: BRK.A)(NYSE: BRK.B), Adobe Inc (NASDAQ: ADBE) and Ford Motor Company (NYSE: F).

IVV returned 36.36% in 2021, making it the ASX’s fifth best-performing ETF.

iShares Core MSCI World ex Australia ESG Leaders ETF (ASX: IWLD)

Another iShares ETF, this fund comes in next. IWLD is an ETF that focuses on mid- and large-cap companies from outside Australia, selected for “leading ESG practices within their industry”. At the time of writing, this ETF has 720 holdings, the largest mostly coming from the US markets. We have Apple and Microsoft Corporation (NASDAQ: MSFT), as well as Tesla Inc (NASDAQ: TSLA), Mastercard Inc (NYSE: MA) and Toyota Motor Corp (NYSE: TM).

IWLD returned just over 38% for the 2021 calendar year.

SPDR Dow Jones Global Real Estate Fund (ASX: DJRE)

Our third top-performing ETF of 2021 is a little different. Rather than racking large baskets of shares, this ETF only holds real estate investment trusts (REITs) and other property-linked companies and funds from around the world. The ASX’s Goodman Group (ASX: GMG) is a large holding here, as well as other shares like Prologis Inc (NYSE: PLD) and Public Storage (NYSE: PSA). Over 2021, DJRE returned 38.56%, of which 4.05% came from dividend distributions.

BetaShares Crude Oil Index ETF (ASX: OOO)

A whole different kettle of fish again, this EFT from BetaShares takes the silver medal for 2021 performance. OOO is a pure-play commodities fund. It tracks an index that reflects the performance of crude oil futures. As you may be aware, oil had a dramatic 2021, rising to levels we haven’t seen for years. This is reflected in this ETF’s performance, which gave investors a healthy return of 47.8% over the year just gone.

BetaShares Geared US Equity Fund (ASX: GGUS) and ETFS Ultra Long Nasdaq 100 Hedge Fund (ASX: LNAS)

In a 2-for-1 special, these two ETFs were the best performing of the entire ASX last year. We’ll look at them together since they largely operate in a similar manner, and track similar markets. These two ETFs are ‘leveraged’ (or geared) which means they use borrowing to potentially magnify the gains (or losses) of the indexes they track.

BetaShares’ GGUS covers the S&P 500 Index, while ETFS’ LNAS covers the Nasdaq 100. Fortunately for investors, last year was a lucrative one for both of these indexes, which means that these ETFs recorded larger gains again due to their leveraged nature. LNAS returned a total of 64.7% in 2021, while GGUS gave back a very pleasing 66.25%, making it the best ASX ETF on the market.

The post Here are the 5 best performing ASX ETFs of 2021 appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Afterpay-Block deal approved, Fortescue downgraded
• 2 ASX 200 shares that could be top buys for dividends
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX shares today
• ASX 200 retail shares slump despite higher-than-expected sales

Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen owns Ford, Mastercard, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Microsoft. The Motley Fool Australia has recommended Adobe Inc., Amazon, Apple, Berkshire Hathaway (B shares), Mastercard, and iShares Trust – iShares Core S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3GoLQ4w

The Openpay Group Ltd (ASX: OPY) share price is soaring today on the back of record quarterly results in Australia and news the company will be prioritising growth in the US market.

Openpay shares are currently trading at 75 cents each, an 19.05% gain on yesterday’s close.

Let’s take a look at what else might be impacting the company’s share price today.

What did Openpay announce?

Investors are likely responding to a big announcement from the buy now, pay later company. Firstly, Openpay will be making growth in the US market its major priority, working with its key partners in North America.

Openpay believes it can monetise what it describes as a “significant and unique opportunity”. The company said it has support from major partners including American Express, Worldpay from FIS, Goldman Sachs, Cross River, Experian, PatientNow, ezyVet, and Kyriba.

The company has also onboarded dentists, vets, car dealers, and a US healthcare insurance provider to its platform across the country.

Significantly, Openpay also announced today its managing director and group CEO Michael Eidel will be leaving the company. The board has appointed Ed Bunting as interim group CEO, effective immediately.

As well, non-executive director Kelly Bayer Rosmarin, the chief executive officer at Optus, advised the company she will be leaving the board. Openpay will now look to fill her shoes with a US-based non-executive director.

Today’s news comes on the same day as significant news from BNPL competitor Afterpay Ltd (ASX: APT). The Bank of Spain has approved it being taken over by Block. With Afterpay soon to leave the ASX, Openpay will have more market share in Australia. The Afterpay share price is up 4.76% at the time of writing.

Record transactions

As well as outlining its US goals, Openpay will also speed up its road to profitability in Australia on the back of record Q2 FY22 results.

The Openpay Australian business achieved its best-ever quarterly total transaction value (TTV) of $87 million. This included the highest ever TTV of $35 million in December, leading to $2.4 million in revenue. Year to date, the company achieved a TTV of $160 million, a 44% boost year on year.

The company plans to implement “efficiency measures” to help speed up profitability in the Australian market. An update on the Q2 financial results will be provided on 25 January.

UK update

Finally, Openpay confirmed it will no longer acquire Pay Assist in the United Kingdom. This potential acquisition target was touted to investors in June.

Instead, Openpay announced today it will enter a strategic partnership and revenue-sharing arrangement with the company in the UK market.

Management comment

Speaking on the Openpay change in direction, non-executive chairman Patrick Tuttle said:

This enhanced strategic focus in the US, in addition to bringing forward planned profitability in Australia and entering into a partnership agreement with Payment Assist in the UK market, will ensure the Group’s capital and resources are best focused on those opportunities which the Board believes can deliver the strongest financial returns and long-term commercial success.

On behalf of the board, I want to thank Michael for his strong leadership and contributions to the company’s achievements over the last three years, including highlights such as its listing on the ASX in 2019, successfully navigating the business through the various COVID pandemic lockdowns, driving substantial growth in all key business metrics, and establishing the solid platform to enable us to pursue a more streamlined regional strategy

Commenting on his exit, departing CEO Michael Eidel said:

It is the right time for the company to write the next chapter of its success story. The team can be proud of the great achievements over the last three years, and I wish them all the very best and great continued success.

Openpay share price recap

The Openpay share price has fallen nearly 67% in the past 12 months and 22% in the past month. However, it’s managed to claw back just over 2% in the past week.

In comparison, the S&P/ASX 200 Index (ASX: XJO) has returned nearly 12% to investors in the past year.

The company commands a market capitalisation of roughly $97 million based on the current share price.

The post Why is Openpay (ASX:OPY) up 19% today? appeared first on The Motley Fool Australia.

More reading

• These were the 5 worst performing ASX BNPL shares of 2021
• 2 ASX shares hitting 52-week lows
• Openpay (ASX:OPY) share price sinks 6% in grim day for ASX BNPL shares

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Afterpay Limited. The Motley Fool Australia owns and has recommended Afterpay Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3I01pQn

Shares in industrial minerals company Andromeda Metals Ltd (ASX: ADN) are surging 18% higher today and now trade at 22.5 cents apiece.

Whilst there’s nothing price-sensitive out of Andromeda’s camp today, its share price has crept up gradually after bouncing off a 15 cent low in December.

Why’s the Andromeda share price soaring today?

In the absence of any market-moving information or news, it’s not abundantly clear on exactly what is behind the monstrous jump in the Andromeda share price today.

However, investors have been piling into the company these past few weeks, such that shares have exploded more than 32% in the last month.

That’s a huge step ahead of the S&P/ASX 200 Index (ASX: XJO)’s return of less than 1% over the past month.

Underpinning the growth is a pair of market updates released in the back end of 2021. Firstly, the company announced its pending merger with Minotaur Exploration Ltd (ASX: MEP) last year. If the merger is given the green light, Andromeda would then be the 100% owner of the Great White kaolin project.

The proposal of 1.15 new Andromeda shares for each Minotaur share will close on 31 January after Minotaur directors unanimously recommended its shareholders to accept the offer.

Aside from this, South Australian Energy and Mining Minister Dan van Holst Pellekaan, granted mining leases for the Great White kaolin project last month as well.

The decision marks another step closer to becoming a “world-class” producer of kaolin minerals, according to managing director James Marsh at the time.

“Once in production a whole range of new and significant halloysite-kaolin opportunities will open up for us, and I would like to thank the whole Andromeda team for their dedication and professionalism”, Marsh said.

Andromeda share price snapshot

Despite the recent strengths, the Andromeda share price has fallen more than 23% in the last 12 months.

Yet, it has climbed over 32% in the past month and is now up almost 22% for the year to date.

So far, this year to date, Andromeda is outpacing the broad index’s loss of less than 1%.

The post Why is the Andromeda Metals (ASX:ADN) share price leaping another 18% today? appeared first on The Motley Fool Australia.

More reading

• Why has the Andromeda (ASX:ADN) share price rocketed 26% in a month?

The author has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3thOghw

The party has seemingly gone sour for the Endeavour Group Ltd (ASX: EDV) share price so far in 2022.

The new year has seen the company’s stock fall 5.6% – wiping out most of its gains for the last 6 months.

At the time of writing, the Endeavour share price is $6.41, 1.54% lower than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is up 0.5% today and down 2% year to date.

Let’s take a look at what might be weighing on the retail drinks and hospitality company’s stock lately.

What’s dragging on the Endeavour share price?

While there’s been no news out of Endeavour to explain its recent falls, many of the company’s peers have also been suffering.

The S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) has slipped 5% year to date, with some of its constituents’ performances making Endeavour’s drop look like a walk in the park.

For instance, the ARB Corporation Limited (ASX: ARB) share price has tumbled 12% year to date.

In the same time frame, that of Collins Foods Ltd (ASX: CKF) has slipped nearly 10% while shares in JB Hi-Fi Limited (ASX: JBH) are down 7%.

But the Endeavour share price was suffering before New Year’s Eve. It had a turbulent December and ultimately fell 1.6% over the course of last month.

That’s despite no news having been released to the ASX since August. There also hasn’t been much news of the company hitting headlines.

Though, its brand, Langston’s, did help break a new record recently. It held an auction in December wherein a bottle of Penfolds Grange from 1951 sold for a whopping $157,624, making it the most expensive bottle of Australian wine ever sold.

Fortunately, the Endeavour share price is still 6% higher than it was at its first close on the ASX following its demerger from Woolworths Group Ltd (ASX: WOW) in June 2021.

The post What’s causing headaches for the Endeavour (ASX:EDV) share price in the new year? appeared first on The Motley Fool Australia.

More reading

• The stories that rocked the ASX 200 in 2021 revisited

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended ARB Corporation Limited and Collins Foods Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/31NnSRk

In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on form and charging higher. At the time of writing, the benchmark index is up 0.5% to 7,427.5 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are racing higher:

Afterpay Ltd (ASX: APT)

The Afterpay share price is up 5% to $77.07. This morning the Bank of Spain approved Block’s takeover of the buy now pay later provider. This means the deal can now complete and Afterpay’s shares will be suspended from trade next week. They will then be replaced with ASX-listed Block CDIs which will trade under the SQ2 ticker code.

Appen Ltd (ASX: APX)

The Appen share price is up 5% to $10.25. Investors have been buying this artificial intelligence data services company’s shares and other tech shares following a strong night of trade on the tech-focused Nasdaq index. The Appen share price is still down almost 8% in 2022 following today’s gain.

Liontown Resources Limited (ASX: LTR)

The Liontown share price is up 5% to $1.62. Investors have been buying this lithium developer’s shares after it announced its first offtake agreement. Liontown will supply one of the world’s premier battery manufacturers, LG Energy Solution (LGES), with 150,000 dry metric tonnes (dmt) per annum of spodumene concentrate when production commences at Kathleen Valley. This is almost a third of its start up production of 500,000 dmt.

Nickel Mines Ltd (ASX: NIC)

The Nickel Mines share price is up 6% to $1.54. The catalyst for this was a strong rise in the nickel price overnight. According to CommSec, the nickel prices rose by a sizeable 5.5% to US$21,986 per tonne. This was driven by news that Tesla is moving to secure future supplies of the battery metal from Talon Metals.

The post Why Afterpay, Appen, Liontown, Nickel Mines shares are surging higher appeared first on The Motley Fool Australia.

More reading

• How is the Appen (ASX:APX) share price performing so far this year?
• ASX 200 (ASX:XJO) midday update: Afterpay-Block deal approved, Fortescue downgraded
• Here’s why the Liontown (ASX:LTR) share price is rocketing 13% higher
• Afterpay-Block takeover approved: Here’s what happens to your shares
• 5 things to watch on the ASX 200 on Wednesday

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 Afterpay Limited and Appen Ltd. The Motley Fool Australia owns and has recommended Afterpay Limited and Appen Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3K6pd75

Listed investment company (LIC) WAM Capital Limited (ASX: WAM) has won the battle to acquire fellow LIC PM Capital Asian Opportunities Fund (ASX: PAF), confirmed in an announcement today.

WAM’s success comes after PAF’s largest shareholder, PM Capital Global Opportunities Fund Ltd (ASX: PGF), reluctantly accepted its revised offer.

Despite the victory, shares in WAM Capital are flat in today’s session, currently trading at $2.24 apiece.

The win follows a long saga that played out across 2021 and saw several speed bumps along the way, prompting WAM to increase its offer back in September last year.

Here are the details.

WAM to finally acquire PAF

In December 2021, PAF issued a supplementary target statement recommending its shareholders accept WAM’s revised offer.

Just prior to this, on 13 December, PAF shareholders rejected the scheme. Today’s update is a victory for WAM that now controls the $64 million LIC by market capitalisation.

Yesterday, WAM announced an increase in the consideration provided under its offer of 1 WAM share for every 1.95 PAF shares held. This upped the offer from every 1.99 PAF shares held.

According to a previous update, WAM noted the revised offer signified a 3.5% premium to the closing price of PAF shares on 11 January and an 18.4% premium to PAF’s closing price before the scheme was announced.

In a release today, PM Capital says that it is “disappointed that the Scheme of Arrangement that it had proposed for PAF did not proceed”.

The fellow LIC reluctantly accepted the offer. However, it noted the updated offer “provides PGF with the ability to exit its investment at a solid premium to [net tangible assets] NTA to the benefit of all PGF shareholders”.

What’s next?

Now the offer is concrete, the “governance protocols” that were established in connection with the scheme have come to an end.

Under the offer, the directors will have them moved to PGF’s custodial account – which is under the control, and day-to-day management, of PGF’s Investment Manager, according to the release.

Now the deal is complete, WAM’s voting power in PAF will increase to 69.07%, up from 36.08% previously.

However, it seems investors have been largely unmoved by WAM’s success today. It’s surprising considering the takeover accounted for much of the LIC’s news in 2021.

At present, WAM shares are trading sideways and are flat on the day. Also, the volume of shares traded today is just 20% of the company’s 4-week average with a paltry 141,254 shares changing hands at the time of writing.

The WAM share price is also flat on its previous 12 months of trading and has climbed less than 1% in the past month.

The post WAM (ASX:WAM) share price unmoved despite victory in PAF acquisition fight appeared first on The Motley Fool Australia.

More reading

• Own WAM Capital (ASX:WAM) shares? Here’s how the share price performed in 2021
• Westoz (ASX:WIC) share price surges 9% on ASX WAM merger
• Green light? WAM Capital (ASX:WAM) share price lifts as PM Capital board says just do it
• Invested in WAM Capital (ASX:WAM) shares? Here’s what to watch in 2022

The author has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3zQxzLx

The Irongate Group (ASX: IAP) share price is in the red on Wednesday after the company rejected a takeover offer for the third time.  

360 Capital Group Ltd (ASX: TGP) and 360 Capital REIT (ASX: TOT) – together, 360 Capital ­– posed its most recent takeover bid of $1.72 in cash per share in mid-December.

It previously posed bids of $1.65 and $1.70, discounting a 4.5 cent dividend paid to Irongate shareholders in early December.

The market appears disappointed by today’s rejection. At the time of writing, the Irongate share price has dropped 1.46% to trade at $1.69.

Let’s take a look at what’s driving the real estate investment trust’s (REIT) share price down today.

Irongate share price slips on another rejected takeover bid

The Irongate share price is slumping after the trust rejected yet another takeover bid, stating it didn’t “reflect [its] underlying value”.

It said the bid didn’t appreciate its office and industrial real estate portfolio, its portfolio’s value-add upside potential, and the potential of its third-party funds management business.

Finally, the REIT commented if it believed a proposal did reflect maximum value for its shareholders, it would consider it.

Assumedly, that statement lands the ball squarely back in 360 Capital’s court.

Each bid so far has been rejected for the same reason. Additionally, according to Irongate, each bid didn’t come with any changed conditions.

In fact, the company didn’t even announce the second bid to its shareholders. The wannabe acquiree criticised that decision at the time. And perhaps investors are responding now, considering the direction of Irongate shares today.

In response to its second rejection, 360 Capital commented:

360 Capital is disappointed the IAP board has again chosen not to engage with 360 Capital despite the Improved Indicative Proposal representing an attractive premium across a number of valuation metrics…

On top of that, the company’s managing director Tony Pitt noted:

360 Capital remains committed to working with the board and management of Irongate Group for a period of time, but will remain disciplined in its investment approach to assets, particularly given current uncertainties in this rising interest rate environment.

Since 360 Capital pitched its first bid, the Irongate share price has gained 12%. It is also currently nearly 5% higher than it was this time last month.

The post Irongate (ASX:IAP) share price slides as takeover rejected again appeared first on The Motley Fool Australia.

More reading

• Is the Telstra (ASX:TLS) dividend going to grow in 2022?
• Leading brokers name 3 ASX shares to sell today
• How is the Appen (ASX:APX) share price performing so far this year?
• Australasian Metals (ASX:A8G) share price leaps 20% on big lithium news
• 61% spike: This just caused the Pacgold (ASX:PGO) share price to hit new peaks

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3GjmO6Y

Telstra Corporation Ltd (ASX: TLS) is known as an ASX dividend share. But, after a few years of stagnant payouts, will Telstra increase the dividend in 2022?

The telco has been paying investors a relatively high dividend yield (in relation to the Telstra share price) for many years.

However, the annual Telstra dividend per share of $0.16 is now much lower than it was a few years ago. In 2017, the telco actually paid an annual dividend per share of $0.31 per share.

It has been quite a while since the telco last grew its dividend.

Is there a dividend increase coming from Telstra?

For a number of years, Telstra had been suffering from falling profit as margins were squeezed due to the shift to the NBN for its home broadband connections.

But now the leadership are hinting at future dividend increase.

In September 2021, Telstra released its T25 strategy. Investors may remember that the T22 strategy involved cutting costs, becoming more efficient and monetising some of its assets.

Within that T25 strategy are a number of new focuses. It’s looking to extend its 5G network coverage to 95% of the population. Regional coverage is going to be expanded by 100,000sq km of 4G and 5G coverage. It’s aiming to increase its customer satisfaction across all of its segments, whilst growing its Telstra Plus membership to 6 million by FY25.

In terms of financial goals, Telstra is looking to find another $500 million of net fixed costs between FY23 to FY25. This could help the business with its target of a compound annual growth rate (CAGR) of mid-single digits for earnings before interest, tax, depreciation and amortisation (EBITDA), and high-teens for underlying earnings per share (EPS), to FY25.

For income-focused investors, the most interesting goal might be that Telstra is looking to maximise its fully franked dividends and “seek to grow over time”.

When will those juicy dividends grow?

Telstra’s management recognise the importance of the fully franked dividend. The company’s intention is to return as much cashflow to shareholders that can be sustainably supported by earnings and franking, whilst also balancing the objectives and principles of the capital management framework.

It’s confident in maintaining a minimum payout of $0.16 per share. However, the franking credit balance is low.

Telstra said that in FY21 it reported 15.6 cents of EPS and underlying EPS of 9.7 cents. The managing director Andrew Penn said about the dividend:

We need to grow underlying earnings with our financial ambitions, and grow our franking balance in order to grow fully franked dividends.

This replaces our previous principle to pay fully franked ordinary dividends of 70% to 90% of underlying earnings.

We have replaced this principle because we expect our cashflow to remain ahead of accounting earnings, and we are focused on growing underlying earnings into our total dividend.

On top of paying dividends to shareholders, Telstra wants to invest for growth. Organic growth opportunities could be a long-term or nation-building infrastructure investment, or a major customer project. The telco said it’s exploring opportunities in those areas.

So what about 2022?

Currently, Commsec estimates show that the dividend is expected to be $0.16 per share in both FY22 and FY23.

Indeed, multiple brokers have also pencilled in a dividend of $0.16 per share for the current financial year and FY23, including Morgans, Credit Suisse and Ord Minnett.

However, looking at FY24, Commsec’s estimate for FY24 is $0.17 per share. That would represent growth of 6.25% compared to the current dividend.

At the current Telstra share price, an annual dividend of $0.17 per share would be a grossed-up dividend yield of 5.8%.

The post Is the Telstra (ASX:TLS) dividend going to grow in 2022? appeared first on The Motley Fool Australia.

More reading

• Broker names 2 ASX dividend shares to buy in January
• 4 reasons the Telstra (ASX:TLS) share price could be great value
• 2 ASX dividend shares to buy this month: experts
• Here are the 3 most heavily traded ASX 200 shares this Thursday
• These 3 ASX 200 shares are topping the volume charts on Wednesday

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 owns and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3tnPXtU