In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is back on form and charging higher. At the time of writing, the benchmark index is up 1.25% to 7,449.7 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are dropping:

Australian Pharmaceutical Industries Ltd (ASX: API)

The API share price is down almost 13% to $1.51. Investors have been selling the pharmacy chain operator’s shares after Woolworths Group Ltd (ASX: WOW) withdrew its takeover proposal. Woolworths was offering $1.75 per share but advised that its due diligence revealed that the financial returns from the proposal were not sufficient. Wesfarmers Ltd (ASX: WES) is now in pole position with its lower offer of $1.55 per share.

James Hardie Industries plc (ASX: JHX)

The James Hardie share price is down 5% to $51.17. This morning the building products company announced the exit of its chief executive officer (CEO), Jack Truong, with immediate effect. According to the release, Mr Truong has had his employment terminated after employees raised concerns about his work-related interactions.

Magellan Financial Group Ltd (ASX: MFG)

The Magellan share price is down 3% to $19.76 following the release of its funds under management update. According to the release, Magellan’s total FUM was $95,491 million at the end of December. This was down 18% (or $21,000 million) from $116,413 million at the end of November. The fund manager also revealed that it is entitled to performance fees of only $11 million for the first half of FY 2022.

St Barbara Ltd (ASX: SBM)

The St Barbara share price is down 2.5% to $1.32. This appears to have been driven by a pullback in the gold price overnight. Traders were selling the precious metal amid the release of hawkish minutes out of the US Federal Reserve.

The post Why API, James Hardie, Magellan, and St Barbara shares are dropping appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO): Woolworths withdraws API proposal, tech shares rebound
• API (ASX:API) share price crashes 12% after Woolworths withdraws takeover offer
• Wesfarmers (ASX:WES) share price higher after receiving API takeover boost
• Magellan (ASX:MFG) share price falls after revealing $21bn funds decline
• James Hardie (ASX:JHX) share price on watch after CEO kicked out

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 owns and has recommended Wesfarmers 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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This week is proving to be a good one for the Critical Resources Ltd (ASX: CRR) share price. The company has released more news to the market this morning, boosting its stock once more.

At the time of writing, Critical Resources’ stock is trading at 5.3 cents, 10.4% higher than its previous close. That brings the company’s gains this week to 39%.

Let’s take a look at the news that’s been driving the miner’s stock on the ASX lately.

Critical Resources share price rockets higher on Friday

The Critical Resources share price is in the green again today after the company announced a drilling program at its Halls Peak base metal project in New South Wales has restarted.

The company is back to work at the project’s Gibson prospect, where it plans to drill around 2,500 metres. Of that, around 650 metres have already been completed.

Previously, visual massive sulphide intervals and disseminated sulphide mineralisation have been intersected at the prospect.

Critical Resources managing director Alex Biggs commented on the restart, saying:

The drill campaign has so far provided excellent results and we continue to gain an increased understanding of the deposit. We look forward to completing the outstanding drill holes and updating the market with further results in due course.

Today’s news appears to have rounded off a strong week’s performance.

The Critical Resources share price was boosted 19.5% on Wednesday after the company completed the acquisition of a Canadian lithium project.

The Mavis Lake lithium project cost the company $3 million, which it bought with 50% cash and 50% scrip. The purchase also involves up to $3 million of milestone considerations.

Additionally, Critical Resources welcomed Alex Cheeseman to its board this week. Cheeseman has worked in leadership and management roles for more than 20 years and spent the last 10 years in the lithium and iron ore sector.

Today’s gains included, the Critical Resources share price is 116% higher than it was this time last year.

The post Why has the Critical Resources (ASX:CRR) share price surged 39% this week? appeared first on The Motley Fool Australia.

More reading

• Here’s why the Critical Resources (ASX:CRR) share price is rocketing 20%

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.

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As most ASX investors would know, ASX bank shares have a very pervasive reputation for providing rivers of dividend income. For decades, Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd. (ASX: NAB) and Australia and New Zealand Banking Group Ltd (ASX: ANZ) have been some of the most consistent and highest-paying ASX blue-chip shares.

Of all the ASX banks, CBA is arguably the most popular. Not only is Commonwealth Bank the largest ASX share on the share market by market capitalisation, but it’s also arguably the most revered. That’s going off the significant price-to-earnings (P/E) ratio premium that CBA commands compared to the other big banks.

But if we check out how the CBA share price looks today, something might stand out.

At the current CBA share price (at the time of writing) of $102.54 a share, Commbank shares are offering a trailing dividend yield of 3.41%. That’s objectively not a bad yield. But it’s not quite as high as some ASX banking investors might expect.

And it certainly doesn’t look too good against CBA’s banking peers.

For example, NAB shares currently offer investors a trailing yield of 4.32% on current pricing. ANZ goes even higher, breaking the 5% mark with the current yield of 5.02%. And Westpac comes out on top with its yield of 5.5% as it stands today.

Why do CBA shares have the lowest big four bank dividends?

So why is CBA the laggard when it comes to ASX banking dividends? Surely, as the largest bank and the market leader, it should be first out the gate when it comes to yield?

Well, it doesn’t quite work that way. Ironically perhaps, CBA’s success is its own worst enemy when it comes to the yield it can offer. If investors regarded all of the ASX banks as worthy of the same P/E ratio, then CBA’s dividend would be far higher. But as it stands today, CBA shares trade on a P/E ratio of 21.8. Westpac, in stark contrast, only commands a P/E ratio of 15.72.

If CBA were to descend to a P/E ratio of 15.72, it would have a share price of approximately $74 (by this writer’s rough calculations). At that share price, and keeping the same 2021 dividends that CBA paid out, it would instead have a trailing dividend yield of 4.73%.

But in the real world, investors, for any number of possible reasons, have decided that CBA deserves to trade at a premium share price to its banking brethren. And as such, investors have to put up with a lower dividend yield from their shares. Sometimes, you can’t have it all!

At the current CBA share price, this ASX bank has a market capitalisation of $170.6 billion.

The post Here’s why CBA (ASX:CBA) shares have the lowest big four bank dividend right now appeared first on The Motley Fool Australia.

More reading

• Does the prospect of higher rates make ASX 200 bank shares more attractive?
• Own Westpac (ASX:WBC) shares? Top broker says ‘there is still a lot of work to be done’
• Could NAB (ASX:NAB) shares be a dividend gold mine this year?
• Is the Bank of Queensland (ASX:BOQ) share price a better buy than CBA? Here’s what top brokers say
• Here’s why the ANZ (ASX:ANZ) share price had such a great run in 2021

Motley Fool contributor Sebastian Bowen owns National Australia Bank Limited. 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 All Ordinaries Index (ASX: XAO) gained 13% in 2021. A banner year for ASX shares, by historical standards.

Of course, not all shares are created equal. Some gained far more than the benchmark and some finished 2021 deep in the red.

Below we look at the 2 best and 2 worst performers on the All Ordinaries in the year just past.

2021’s worst 2 performing All Ordinaries shares

The unwelcome prize for the worst performing All Ordinaries share in 2021 goes to buy now, pay later (BNPL) company Laybuy Holdings Ltd (ASX: LBY).

Investors broadly sold off BNPL shares in the latter half of the year, and the selling for Laybuy began in earnest back in February. Laybuy commenced trading in 2021 at $1.30 per share. By the closing bell on 31 December it was trading at 24 cents, down 82%. At the current share price, Laybuy has a market cap of $57 million.

Coming in a close second in the unwanted worst performing All Ordinaries category is fellow BNPL player, Splitit Ltd (ASX: SPT).

Splitit also fell prey to the shifting sentiments hitting the pay by instalment sector. The company kicked off the year just past trading at $1.30 and finished at 25 cents, down a painful 81%.

Investors likely also had an eye on the company’s bottom line, which revealed FY21 losses of US$35.2 million, up from US$26.6 million in losses posted in FY20. At the current share price, Splitit has a market cap of $127 million.

Moving on to the biggest gainers on the All Ordinaries…

2021’s top 2 performing ASX shares

Turning to the positive, the second best All Ordinaries share you could have held in 2021 was Cettire Ltd (ASX: CTT).

Which brings us to the best performing All Ordinaries share of 2021, Novonix Ltd (ASX: NVX).

Involved in graphite exploration and mining, battery technology, and battery materials, the company was a clear winner in the booming growth witnessed in the lithium-ion battery industry.

Novonix kicked off 2021 trading for $1.21 per share and finished the year at $9.19 per share for an eye-popping gain of 660%. At the current share price, the best All Ordinaries performer of 2021 has a market cap of $4.8 billion.

The post Can you guess the best and worst All Ordinaries performers of 2021? appeared first on The Motley Fool Australia.

More reading

• Are Novonix (ASX:NVX) shares a bargain after tumbling 18% since early December?
• These are the 5 worst performing ASX shares of 2021
• These are the 5 best performing ASX shares of 2021
• The 5 best ASX lithium stocks of 2021
• Here are the top 10 ASX shares today

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Cettire Limited. The Motley Fool Australia has recommended Cettire 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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The upcoming listing of Block Inc (NYSE: SQ), previously called Square, could be one of the most important ever listings for the ASX. The Australian Stock Exchange is run by ASX Ltd (ASX: ASX).

Why is Block listing onto the ASX?

The reason why Block is listing onto the ASX is the proposed takeover of the buy now, pay later (BNPL) business Afterpay Ltd (ASX: APT).

Block is on track to take over Afterpay. The offer is 0.375 new Block/Square shares for each Afterpay share. When the New York Stock Exchange closed on 29 October 2021, the implied offer was A$126.39 per Afterpay share, which was a 30.8% premium to the undisturbed Afterpay share price on 30 July 2021 before the proposed takeover was announced.

Block shares are going to trade in Australia as a secondary listing, to allow Afterpay shareholders to trade Square shares via CHESS Depositary Interests (CDIs) on the ASX.

The takeover is legally effective and Afterpay anticipates that the implementation will occur in the first quarter of the 2022 calendar year.

What makes it so important for the ASX?

As reported by the Australian Financial Review, the ASX’s group executive for listings, Max Cunningham, said:

It could be the most important listing on the ASX since BHP in 1885 and I don’t say that lightly.

We’ve been talking for years about attracting a combination of local and foreign tech listings. They could have found other ways to fund this, so for them to consciously list here is really, really significant.

The Block share price has fallen around 40% since the end of October 2021. Despite that, Block’s current market capitalisation is still US$66.7 billion. It will be one of the biggest businesses on the ASX.

But the ASX believes it could be an opportunity to encourage other large businesses to have a dual listing on the ASX as well.

The AFR quoted Mr Cunningham about this:

Hopefully it will demonstrate to other Australian multinationals either already listed overseas or hoping to list overseas, you can be dual-listed on the ASX as well.

For all the great tech we’ve had, we don’t have anything like a Spotify listed here. Certainly, having a company like Atlassian or Canva list here would be great and help offset some of those carbon-intensive stocks. I think it’s really, potentially, an important pivot point.

Will more businesses list here?

There is a hope that more tech and non-tech businesses will list. As mentioned, Atlassian and Canva are two of the biggest targets.

There is apparently a pipeline of potential opportunities according to the comments made by Mr Cunningham.

In terms of more potential listings, the AFR reported he said:

We’re definitely hoping there may be some $1 billion-plus tech companies in the pipeline. We’re still getting good quality, larger tech companies coming and the pipeline for tech companies is better than it’s ever been. There’s some good prospects out there.

BHP Group Ltd (ASX: BHP) will soon unify its structure onto the ASX, so the Australian Stock Exchange is hoping balance that out with other non-resource companies..

Once international travel resumes as normal, the ASX is confident that as face to face meetings return, it will be able to win more international businesses as well.

The post ASX says Block listing is ‘most important since BHP’. Here’s why appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO): Woolworths withdraws API proposal, tech shares rebound
• How did the S&P/ASX All Technologies Index (XTX) perform in 2021?
• 5 things to watch on the ASX 200 on Friday
• 6 ASX shares involved with green metals
• Why BHP, Clinuvel, Latitude, and Peet shares are pushing higher

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

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The Andromeda Metals Ltd (ASX: ADN) share price has been enjoying a stellar run over recent weeks.

Shares in the mining company have soared from 15.5 cents to 19.5 cents in the past four weeks, up 26%. By comparison, the S&P/ASX 200 Index (ASX: XJO) is up around 3% over the past month.

Let’s take a look at what may be weighing on the minds of investors.

New mining lease

Andromeda is a South Australian explorer aiming to supply high-quality industrial minerals to the global market. The company’s flagship project is the Great White kaolin project on the state’s Eyre Peninsula.

Two significant factors weighed on the Andromeda Metals share price in the past month. The first is the pending merger with Minotaur Exploration Ltd (ASX: MEP). If approved, it would provide Andromeda with 100% ownership of the Great White kaolin project.

Andromeda is offering 1.15 new Andromeda shares for each Minotaur share. This offer opened on 8 December and will close on 31 January. Minotaur Directors unanimously recommended shareholders accept the Andromeda offer in a statement released to the market on 8 December. Shares in Andromeda increased 13% between the close on 7 December and 10 December.

The second major event to help the Andromeda share price was the South Australia Minister for Energy and Mining Dan van Holst Pellekaan granting a mining lease and two supporting licences for the Great White kaolin project. Andromeda released a statement to the market on 17 December describing this approval as a “significant positive step forward” for the project. Shares in the company soared nearly 6% between market close on 16 December and 17 December.

Commenting on this approval, managing director James Marsh said:

This really is a fantastic success for all Andromeda stakeholders and a crucial milestone in the evolution of the company. It will allow us to progress with full confidence into a very exciting 2022 and become a sustainable, world-class producer of kaolin minerals.

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.

Andromeda share price snapshot

The Andromeda share price has fallen 34% over the past year but is up more than 5% this week.

For comparison, the S&P/ASX 200 Index (ASX: XJO) has returned nearly 11% to investors in the past year.

This ASX share commands a market capitalisation of around $484 million based on its current share price.

The post Why has the Andromeda (ASX:ADN) share price rocketed 26% in a month? appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO): Woolworths withdraws API proposal, tech shares rebound
• The only 2 profitable ASX BNPL players are merging. Now what?
• How did the AFIC (ASX:AFI) share price manage to outperform in 2021?
• Why the South32 (ASX:S32) share price jumped 62% in 2021
• Why has the Megaport (ASX:MP1) share price tumbled 14% in a month?

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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At lunch on Friday, the S&P/ASX 200 Index (ASX: XJO) is rebounding from yesterday’s selloff. The benchmark index is currently up 1.6% to 7,473.7 points.

Here’s what is happening on the ASX 200 today:

Woolworths withdraws API takeover offer

The Australian Pharmaceutical Industries Ltd (ASX: API) share price is crashing lower today after Woolworths Group Ltd (ASX: WOW) pulled out of the race to acquire the pharmacy chain operator. This means that rival Wesfarmers Ltd (ASX: WES) is now in pole position to acquire API. However, its offer of $1.55 per share is notably lower than the $1.75 per share that Woolworths was offering. Woolworths advised that its due diligence revealed that the financial returns from the proposal were not sufficient.

Tech shares bounce back

The Australian tech sector is bouncing back on Friday after yesterday’s meltdown. At the time of writing, the S&P ASX All Technology index is up 1.3%. Among the best performers in the sector are Afterpay Ltd (ASX: APT) and Megaport Ltd (ASX: MP1) shares.

James Hardie kicks out its CEO

The James Hardie Industries plc (ASX: JHX) share price has tumbled today after it announced the exit of its chief executive officer (CEO), Jack Truong, with immediate effect. According to the release, Mr Truong has had his employment terminated with immediate effect after employees raised concerns about his work-related interactions.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Friday has been the Medibank Private Ltd (ASX: MPL) share price with a gain of almost 6% on no news. Going the other way, the worst performer has been the James Hardie share price with a 3.5% decline. This follows the surprise exit of the building products company’s CEO this morning.

The post ASX 200 (ASX:XJO): Woolworths withdraws API proposal, tech shares rebound appeared first on The Motley Fool Australia.

More reading

• Why has the Megaport (ASX:MP1) share price tumbled 14% in a month?
• If supermarkets are ‘COVID winners’, why is the Woolworths (ASX:WOW) share price sliding into 2022?
• API (ASX:API) share price crashes 12% after Woolworths withdraws takeover offer
• Wesfarmers (ASX:WES) share price higher after receiving API takeover boost
• How did the S&P/ASX All Technologies Index (XTX) perform in 2021?

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

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Over the last few years, it has almost seemed as though ‘profitable‘ was a dirty word when discussing ASX buy now, pay later (BNPL) companies. However, that might be set to change as the sector struggles to gather the same hype that it once had, and competition continues to build.

Latitude and Humm deal puts emphasis on profits

Yesterday, Latitude Group Holdings Ltd (ASX: LFS) drew a figurative line in the sand with its $335 million offer to acquire the BNPL services business of Humm Group Ltd (ASX: HUM). The deal stands as a monument for valuing ASX BNPL shares on a more traditional basis.

For context, Block Inc (NYSE: SQ) (formerly Square) made its offer to acquire Afterpay Ltd (ASX: APT) last year, valuing the company at approximately 42 times its 2021 revenue. Whereas, the Latitude deal reflects a price-to-earnings (P/E) ratio of roughly 6 on Humm’s FY21 profits.

While Humm may not be growing at the same pace as some of its younger peers, the deal has reinvigorated doubts for the future profitability of other ASX BNPL shares.

Both Latitude and Humm are already producing considerable profits, which is ultimately what the end goal is for any investor. Meanwhile, larger names in the sector such as Afterpay and Zip Co Ltd (ASX: Z1P) are widening their losses as they fight for greater market share.

Here’s a quick comparison of earnings/losses among the big ASX BNPL players:

• Afterpay: $156.3 million loss in FY21, widening from a $19.8 million loss in FY20
• Zip: $658.8 million loss in FY21, widening from a $19.9 million loss in FY20
• Latitude: $101 million profit (no comparable)
• Humm: $57.1 million profit in FY21, increasing from $21 million in FY20

Point of difference to other ASX BNPL shares

Profitability isn’t the only difference Latitude can count against its competitors. In discussing the future of instalment payments, CEO Ahmed Fahour highlighted his belief that the company will benefit as regulation seeps into the BNPL sector.

At a minimum, they’re going to say this is credit, and you need to do a credit assessment. It’s no different to any other things. We believe that’s where it’s going to go.

Ahmed Fahour, Latitude CEO

The potential merging of Latitude and Humm comes at a time when the likes of Afterpay are touching 52-week lows. Fears of central banks lifting rates in the near future have put unprofitable growth shares under pressure.

The post The only 2 profitable ASX BNPL players are merging. Now what? appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX shares today
• Why BHP, Clinuvel, Latitude, and Peet shares are pushing higher
• Latitude (ASX:LFS) share price higher on $335m Humm BNPL acquisition
• Humm (ASX:HUM) share price shoots 8% higher after BNPL takeover approach
• These were the 5 top performing ASX BNPL shares of 2021

Motley Fool contributor Mitchell Lawler owns Afterpay Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Afterpay Limited and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended Afterpay Limited. The Motley Fool Australia has recommended Humm 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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As we’ve established here at the Motley Fool, 2021 was a decent year for ASX shares. Over the year just gone, the S&P/ASX 200 Index (ASX: XJO) managed a gain of roughly 13%. That’s not including the extra percentage points we can assume from dividend and franking returns. But how did the Australian Foundation Investment Co Ltd (ASX: AFI) go?

The year that was for the Australian Foundation Investment Company

The Australian Foundation Investment Company (or AFIC for short) is one of the oldest and most popular listed investment companies (LICs) on the ASX. It was founded way back in 1928, decades before anyone had even heard of an index fund. AFIC is designed to give its investors a broad and simple investment across the ASX share market.

It holds a large basket of close to 100 shares. The most prominent of these are mostly the blue-chip shares we all know and love. As of 30 November 2021, these included (in order of portfolio weighting) Commonwealth Bank of Australia (ASX: CBA), CSL Limited (ASX: CSL), BHP Group Ltd (ASX: BHP), Macquarie Group Ltd (ASX: MQG), and Wesfarmers Ltd (ASX: WES).

So let’s see how AFIC fared across 2021 compared to the ASX 200, and an index exchange-traded fund (ETF) that tracks the ASX 200. After all, there’s arguably not much point in investing in a company like AFIC (or by extension, any company) if it can’t beat the market’s return.

AFIC started the year off at a share price of $7.30. It finished up on New Year’s Eve at $8.46 a share. That’s a capital gain of 15.9%.

So far, so good. But we also have AFIC’s fully franked dividends to consider as well. Last year, AFIC paid out two dividends. There was a February interim paycheque of 10 cents per share, as well as the final August dividend of 14 cents per share. These 24 cents per share in dividends equate to a yield of 2.84% on AFIC’s last share price of 2021. Grossed-up with AFIC’s full franking and that yield grows to roughly 4.06%. And that pulls AFIC’s returns for 2021 up past 19%.

By comparison, the ASX 200-tracking iShares Core S&P/ASX 200 ETF (ASX: IOZ) managed a return of 17.11% for the year just gone. So AFIC was a definite market beater over 2021.

How did AFIC beat the ASX 200?

So how did this LIC manage this outperformance? Well, it’s likely that it mostly comes down to how AFIC held different shares from the ASX 200 in 2021, and in different weightings. You can see how those top 5 holdings listed above differ from the ASX 200’s, which includes National Australia Bank Ltd (ASX: NAB) and Westpac Banking Corp (ASX: WBC), for example.

So no doubt AFIC shareholders will be pleased with the year they’ve just enjoyed from this LIC. Let’s see if it can offer a repeat performance in 2022.

At the current AFIC share price of $8.62 (at the time of writing), this LIC has a market capitalisation of $10.5 billion, with a trailing dividend yield of 2.8%.

The post How did the AFIC (ASX:AFI) share price manage to outperform in 2021? appeared first on The Motley Fool Australia.

More reading

• Index killer? Here’s how AFIC (ASX:AFI) shares stack up to the ASX 200
• Invested in AFIC (ASX:AFI) shares? Here’s what to watch in 2022
• Why has the AFIC (ASX:AFI) share price had such an average start to December?

Motley Fool contributor Sebastian Bowen owns National Australia Bank Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended CSL Ltd. The Motley Fool Australia owns and has recommended Wesfarmers Limited. The Motley Fool Australia has recommended Macquarie Group Limited and Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The South32 Ltd (ASX: S32) share price was one of the best performers among the large cap miners in 2021.

Over the 12 months, the mining giant’s shares rose a sizeable 62%.

Why did the South32 share price charge higher in 2021?

Investors were buying South32’s shares last year thanks partly to its strong performance in FY 2021.

For the 12 months ended 30 June, South32 reported a 4% increase in revenue to US$6,337 million and a 32% lift in EBITDA to US$1,564 million.

This strong result was underpinned by record production at Worsley Alumina, Brazil Alumina, and Australia Manganese.

Positive outlook

Also giving the South32 share price a boost was its increasingly positive outlook.

This is largely due to its exposure to aluminium and the recent acquisition of a stake in the Sierra Gorda copper mine in Chile.

Goldman Sachs is particularly positive on South32’s aluminium exposure.

It recently commented: “S32 is positive on aluminium over the medium to long run and is seeing positive sign posts on China production caps with greater focus on environmental issues, positively impacting price. Even with recent pullback in pricing over the last month, pricing remains at strong levels, with S32 expecting demand to continue to grow and inventories to shrink.”

The broker expects this to lead to very strong free cash flow generation, which it believes will underpin very big dividends.

Goldman said: “We forecast a FCF yield of c. 16-18% in FY22 & FY23 (over 20% at spot), driven mostly by exposure to base metals (aluminium & alumina c. 50% of FY22 EBITDA, zinc/nickel c. 20%). We assume the buyback continues to be extended (at US$250mn p.a) and S32 continues to pay out 70% of earnings (40% ordinary, 30% special dividend component). On our estimates, S32 is on a dividend yield of c. 11-12% in FY22 & FY23 [~9-10% at today’s levels].”

In light of the above, the broker believes the South32 share price can keep rising from here. It has put a conviction buy rating and $4.40 price target on its shares, which implies potential upside of 11%.

The post Why the South32 (ASX:S32) share price jumped 62% in 2021 appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Afterpay sinks again, BHP and Rio rise
• Why the South32 (ASX:S32) share price is pushing higher again today
• 2 ASX 200 mining shares to buy in January
• Brokers name 3 ASX shares to buy
• Why has the South32 (ASX:S32) share price surged another 14% in December?

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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