If you’re wanting to boost your income with some dividend shares, then you might want to consider the ones listed below.

Both of these dividend shares are expected to provide investors with attractive yields in 2022. Here’s what you need to know about them:

Adairs Ltd (ASX: ADH)

The first ASX dividend share for investors to look at this week is Adairs. It is one of Australia’s leading furniture and homewares retailers. As well as the core Adairs brand, it owns the online-only Mocka brand and recently acquired the Focus on Furniture brand.

And while FY 2022 has been tough so far due to COVID-19 headwinds, this weakness is only expected to be temporary. Which could make the recent selloff of its shares a buying opportunity for patient income investors.

Morgans certainly believes this to be the case. In response to the update, the broker has retained its add rating but cut its price target to $3.70. In addition, it is now forecasting fully franked dividends of 19 cents per share in FY 2022 and 26 cents per share in FY 2023.

Based on the current Adairs share price of $3.25, this will mean yields of 5.8% and 8%, respectively, over the next couple of years.

Centuria Industrial REIT (ASX: CIP)

Another ASX dividend share to look at is this leading property company with a focus on high quality industrial assets.

Thanks to strong demand for its properties, Centuria Industrial recently reported a weighted average lease expiry (WALE) of 8.9 years with a 99.2% portfolio occupancy rate. This is underpinning stronger than expected funds from operations (FFO) growth in FY 2022. So much so, last month management upgraded its FFO guidance to no less than 18.2 cents per share.

This is expected to underpin a distribution of 17.3 cents per share in FY 2022. Based on the current Centuria Industrial share price of $3.87, this will mean a yield of 4.5%.

Morgan Stanley is a fan of the company. In response to its guidance upgrade, the broker retained its overweight rating and lifted its price target to $4.35.

The post 2 ASX dividend shares with big yields to buy appeared first on The Motley Fool Australia.

More reading

• Got money to invest for dividends? Here are 2 ASX shares that could be buys
• Could this be the biggest issue faced by ASX retail shares heading into earnings season?
• Analysts name 2 ASX dividend shares to buy
• 2 ASX dividend shares with grossed-up yields over 8% right now
• Centuria Industrial (ASX:CIP) share price climbs amid upgraded guidance

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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On Friday the S&P/ASX 200 Index (ASX: XJO) finished the week in a positive fashion. The benchmark index rose 0.6% to 7,120.2 points.

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

ASX 200 expected to fall

The Australian share market looks set to start the week in the red despite a positive finish on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 41 points or 0.6% lower this morning. On Wall Street, the Dow Jones fell 0.05%, the S&P 500 rose 0.5%, and the Nasdaq stormed 1.6% higher.

Oil prices push higher

Energy producers such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could have a strong start to the week after oil prices pushed higher on Friday. According to Bloomberg, the WTI crude oil price rose 2.25% to US$92.31 a barrel and the Brent crude oil price rose 2.4% to US$93.27 a barrel. Oil prices hit seven-year highs after a winter storm in Texas heightened supply concerns.

ANZ Q1 update

The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price will be on watch this morning when it becomes the latest big four bank to release its first quarter update. All eyes will be on the bank’s net interest margin (NIM) amid the aggressive competition for home loans. Also worth looking out for will be ANZ’s cost growth. Goldman expects the bank’s costs to grow 0.9% over the 12 months.

Gold price edges higher

Gold miners Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) could start the week in the green after the gold price rose on Friday night. According to CNBC, the spot gold price rose 0.2% to US$1,807.8 an ounce. The gold price pushed higher after inflation concerns offset higher US treasury yields.

Pro Medicus shares upgraded to buy rating

The Pro Medicus Limited (ASX: PME) share price could be in the buy zone according to the team at Bell Potter. This morning the broker has upgraded the health imaging technology company’s shares to a buy rating with a $55.00 price target. Bell Potter believes recent weakness has created a buying opportunity.

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

More reading

• Why analysts rate these ASX dividend shares as buys
• 2 ASX 200 shares that could be top buys for growth
• The Macquarie (ASX:MQG) share price is down 10% in 2022, time to jump on it?
• These were the best performing ASX 200 shares last week
• Here are the top 10 ASX shares today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Pro Medicus Ltd. The Motley Fool Australia owns and has recommended Pro Medicus 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 some exchange traded funds (ETFs) to add to your portfolio? If you are, it could be worth taking a closer look at the three ETFs listed below.

These ETFs include some of the highest quality companies on offer globally across the banking, healthcare, and tech sectors. Here’s what you need to know about them right now:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

If you’re wanting to gain exposure to the growing Asian economy, then the BetaShares Asia Technology Tigers ETF could be a way to do this. This ETF gives investors access to a number of the most promising tech shares in the Asian market. These are the Apples, Googles, and Amazons of Asia such as e-commerce leaders Alibaba and JD.com, search engine company Baidu, and WeChat owner Tencent.

iShares Global Healthcare ETF (ASX: IXJ)

Another ETF to look at is the iShares Global Healthcare ETF. This ETF provides investors with easy access to many of the biggest and brightest healthcare companies in the world. This includes Australia’s CSL Ltd (ASX: CSL) and Ramsay Health Care Limited (ASX: RHC), as well as a host of global giant such as Astra Zeneca, Johnson & Johnson, Moderna, Novartis, Pfizer, and Sanofi.

VanEck Vectors Australian Banks ETF (ASX: MVB)

Finally, if you’re wanting exposure to the banking sector, then you might want to look at the VanEck Vectors Australian Banks ETF. This ETF allows you to own a slice of all the big four banks, the regionals, and investment bank Macquarie Group Ltd (ASX: MQG) through a single investment. As these bank shares are traditionally big dividend payers, this ETF could prove to be a good source of income for investors.

The post 3 top ETFs for ASX investors to look at this month appeared first on The Motley Fool Australia.

More reading

• Are these 2 ASX tech shares good buys in February?
• 3 of the best ETFs for ASX investors this month
• 3 high quality ETFs for ASX investors in February
• 2 top international ETFs for ASX investors
• 2 excellent ETFs for ASX investors to buy 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. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BetaShares Asia Technology Tigers 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

• ASX dividend shares can be very effective at boosting investment income
• Adairs is a retail stock that sells homewares and furniture. Rolling out more stores and increasing online sales are key strategies
• GQG is steadily growing its FUM and has committed to a fairly high dividend payout ratio

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ASX dividend shares could be an excellent place to look for income for investors wanting to boost their investment yield.

When a share price drops, it can have the added bonus of increasing the prospective dividend yield for investors that buy shares.

The recent ASX share market correction could make these two options very attractive for dividends

Adairs Ltd (ASX: ADH)

Adairs is a retail stock that sells a wide range of furniture and furnishings. It has the Adairs network of stores, but it also has online furniture business Mocka, and also Focus on Furniture after making an acquisition.

The business is working hard at ensuring customers can buy however they want to – online or in-store. It has recently invested in a new national distribution centre which is expected to save costs as well as being able to ensure it can fulfil orders faster and provided stores with better stock flow.

Another of the ASX dividend share’s key profit-boosting tactics is to open more large-format stores. They are substantially more profitable than smaller ones as it allows the company to sell more of its products in a single location. An upsized store is approximately 60% more profitable according to Adairs.

With Focus, Adairs also has plans to roll-out a national store network, expand its product offerings and grow online sales. It also increases Adairs’ exposure to the ‘bulky furniture’ category.

It’s currently rated as a buy by Morgans with a projected grossed-up dividend yield of 8.3% in FY22 and 11.4% in FY23.

GQG Partners Inc (ASX: GQG)

GQG is one of the largest fund managers on the ASX. It is a US-based fund manager, though it does have ambitions of growing funds under management in different places like Australia.

This fund manager offers a few different investment strategies such as US share funds, international share funds and dividend share funds.

One of the main ways that GQG Partners, and any fund manager, can grow profit, is by growing funds under management (FUM). On 30 September 2021, the FUM was US$85.8 billion. By 31 December 2021, FUM had grown to be $91.2 billion. In the three months to December 2021, quarterly net inflows were US$3 billion.

The ASX dividend share seeing business momentum across multiple geographies and channels. Its recently launched strategies and products continue to achieve “strong adoption”.

Not only are GQG’s management fees lower than many active fund managers, but its management fees comprise the vast majority of its net revenue, as opposed to performance fees.

The management team is “highly aligned” with all shareholders as the largest shareholders in GQG. Management are “acutely focused on and committed” to GQG’s future.

It’s currently rated as a buy by Morgans, with a price target of $2.40. The broker thinks it has compelling long-term potential with solid earnings.

The broker projects that GQG will pay a dividend yield of 7.4% in FY22 and 8.6% in FY23.

The post Got money to invest for dividends? Here are 2 ASX shares that could be buys appeared first on The Motley Fool Australia.

More reading

• Could this be the biggest issue faced by ASX retail shares heading into earnings season?
• 2 ASX dividend shares with grossed-up yields over 8% right now
• 2 buy-rated ASX dividend shares for February
• Are these 2 ASX dividend shares buys in February 2022?
• Why analysts are bullish on these 2 ASX dividend shares

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 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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Once again, a large number of broker notes hit the wires last week. Some of these notes were positive and some were bearish.

Three sell ratings that investors might want to hear about are summarised below. Here’s why top brokers think investors ought to sell these shares next week:

AMP Ltd (ASX: AMP)

According to a note out of UBS, its analysts have retained their sell rating and 90 cents price target on this embattled financial services company’s shares. UBS notes that consensus estimates for AMP’s results have been lowered. Despite this, it feels the market continues to expect too much from the struggling company and is forecasting a result well short of expectations. The AMP share price was trading at 96 cents on Friday.

ARB Corporation Limited (ASX: ARB)

A note out of Credit Suisse reveals that its analysts have retained their underperform rating but lifted their price target on this 4×4 parts manufacturer’s shares to $40.60. While Credit Suisse was pleasantly surprised to see ARB outperform its estimates during the first half of FY 2022, it isn’t enough for a change of rating. Credit Suisse still believes ARB’s shares are overvalued at the current level and has concerns that its margins are unsustainable. The ARB share price was fetching $44.33 at Friday’s close.

Commonwealth Bank of Australia (ASX: CBA)

Analysts at Morgans have retained their reduce rating and $74.00 price target on this banking giant’s shares. According to the note, the broker continues to believe that CBA’s shares are overvalued at the current level and don’t deserve to trade at such a premium to the rest of the big four banks. Morgans is expecting first half cash earnings of $4.320 billion and a fully franked interim dividend of $1.74 per share. CBA will no doubt need to deliver something significantly better than this to change Morgans’ mind about its shares. The CBA share price was trading at $94.10 at Friday’s close.

The post Top brokers name 3 ASX shares to sell next week appeared first on The Motley Fool Australia.

More reading

• Own CBA (ASX:CBA) shares? Here’s how the bank is investing in BNPL-style home loans
• Hunting for ASX shares? Experts say to avoid this sector in 2022
• What can the Westpac results tell us about the outlook for ASX 200 bank shares?
• Top brokers name 3 ASX shares to sell today
• Why these brokers think that the CBA (ASX:CBA) share price is a sell

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 ARB Corporation 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 have room for a share or two in your portfolio then take a look at the excellent ASX 200 shares listed below.

Analysts have recently tipped these shares as ones to buy. Here’s what you need to know:

CSL Limited (ASX: CSL)

The first ASX 200 share for investors to look at is CSL. It is one of the world’s leading biotechnology companies and the name behind the CSL Behring and Seqirus businesses. Both are leaders in their respective fields of plasma therapies and vaccines.

In addition, the company is in the process of making a major acquisition. It is aiming to acquire Vifor Pharma, which is a leader in iron deficiency, nephrology and cardio-renal therapies, for $16.4 billion.

Citi is a fan of CSL. It recently upgraded the company’s shares to a buy rating with a $340.00 price target.

It was pleased with the acquisition of Vifor, commenting: “Because of the large difference in the earnings multiples of both companies and the low cost of debt, we expect the transaction to be double digit NPATA accretive (although ROIC dilutive). The key positive from the transaction is that it expands the CSL late stage R&D pipeline, which we have noted for some time was limited for a company the size of CSL.”

Wesfarmers Ltd (ASX: WES)

Another ASX 200 share to look at is Wesfarmers. It is the conglomerate behind several popular retail brands such as Bunnings and Kmart. It also has a diverse portfolio of industrial businesses.

While FY 2022 has been a tough year because of lockdowns and other COVID headwinds, the company looks well-placed for the future thanks to its strong brands, diverse operations, and balance sheet strength. The latter looks set to support M&A activity and the potential expansion into the healthcare sector.

Morgans is very positive on the company. It currently has an add rating and $60.80 price target on its shares.

The broker recently commented: “The company is run by a highly regarded management team and the balance sheet is healthy. While COVID-related staff shortages are proving to be a challenge, the core Bunnings division (>60% of group EBIT) remains a solid performer as consumers continue to invest in their homes. We see the recent pullback in the share price as a good entry point for longer term investors.”

The post 2 fantastic ASX 200 shares to buy right now appeared first on The Motley Fool Australia.

More reading

• Could this be the biggest issue faced by ASX retail shares heading into earnings season?
• Can the CSL (ASX:CSL) share price crack the $300 mark in 2022?
• Do any ASX lithium shares pay dividends?
• Morgans names 4 more of the best ASX shares to buy in February
• The Wesfarmers (ASX:WES) share price is 20% off its all-time high. Is it a buy?

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 CSL Ltd. 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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Last week saw a number of broker notes hitting the wires once again. Three buy ratings that investors might want to be aware of are summarised below.

Here’s why brokers think investors ought to buy them next week:

Macquarie Group Ltd (ASX: MQG)

According to a note out of Morgan Stanley, its analysts have retained their overweight rating but trimmed their price target on this investment bank’s shares to $235.00. The broker is expecting a solid update from Macquarie next week thanks largely to its private markets and commodities exposure. And while it has cut its price target after adjusting the multiples used its valuation method, the potential upside remains sufficient to main its overweight rating. The Macquarie share price ended the week at $192.34.

National Australia Bank Ltd (ASX: NAB)

A note out of UBS reveals that its analysts have resumed coverage on this banking giant’s shares with a buy rating and $30.50 price target. UBS believes NAB is well-placed for a recovery in its earnings thanks to stronger than average new business growth and improving net interest margins. The broker also appears optimistic that NAB’s business banking operations will return to form after losing market share recently. The NAB share price was fetching $27.91 at Friday’s close.

Nufarm Ltd (ASX: NUF)

Analysts at Morgans have retained their add rating and lifted their price target on this agricultural chemicals company’s shares to $7.20. This follows the company’s investor day which revealed a strong start to FY 2022 and aspirational growth targets that were far greater than the market was expecting. All in all, Morgans is confident that material value will be unlocked over the coming years. The Nufarm share price ended the week at $5.52.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

More reading

• The Macquarie (ASX:MQG) share price is down 10% in 2022, time to jump on it?
• These were the best performing ASX 200 shares last week
• Why top brokers see further upside to the Nufarm (ASX:NUF) share price
• Tech stocks crash, while Nufarm soars. Scott Phillips on Nine’s Late News
• Looking to buy NAB (ASX:NAB) shares? Read what this broker says first

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.

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If you’re interested in bolstering your income portfolio with some new dividend shares, then the two listed below could be worth considering next week.

Here’s what analysts are saying about these dividend shares right now:

Baby Bunting Group Ltd (ASX: BBN)

The first ASX dividend share to consider is Baby Bunting. It is a baby products retailer with a strong and growing presence both online and through its collection of 60 national superstores across Australia. Combined, this makes Baby Bunting the clear leader in the category.

One broker that is a fan of the company and sees significant growth ahead is Citi. It currently has a buy rating and $6.11 price target on its shares.

Citi commented: “We reiterate our Buy rating and see the company having a range of multi-year growth strategies including rollout (target of 110+ stores, with 68 expected by end of FY22e), exclusive/private label growth and supply chain efficiencies.”

As for dividends, Citi has pencilled in fully franked dividends per share of 16 cents in FY 2022 and 20 cents in FY 2023. Based on the current Baby Bunting share price of $5.19, this will mean yields of 3.1% and 3.85%, respectively.

Woodside Petroleum Limited (ASX: WPL)

Another ASX dividend share to look at is Woodside. This energy producer could be a top option thanks to strong oil prices and its upcoming merger with the petroleum assets of BHP Group Ltd (ASX: BHP).

The team at Morgans is a fan of the company and the merger. In fact, the broker believes Woodside is getting the better part of the deal.

It commented: “From an economic standpoint we think WPL is clearly getting the better of the deal, with synergies not baked into deal metrics and BHP willing to accept a discount. The deal is transformative, lifting WPL into being a top 10 global E&P with +2 billion barrels of 2P reserves, with EBITDA of US$4.7bnpa and growth options.”

Morgans has an add rating and $30.55 price target on its shares. It is also forecasting dividends per share of $1.26 in FY 2021 and then $1.29 in FY 2022. Based on the current Woodside share price of $26.27, this will mean yields of 4.8% and 4.9%, respectively.

The post Why analysts rate these ASX dividend shares as buys appeared first on The Motley Fool Australia.

More reading

• Could US producers spoil the party for ASX 200 energy shares?
• 5 things to watch on the ASX 200 on Friday
• Morgans names the best ASX resources shares to buy in February
• Own ASX 200 energy shares? Here’s what OPEC’s been up to
• 5 things to watch on the ASX 200 on 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 Baby Bunting. 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

• These two ASX 200 tech shares have global growth plans, giving them very large addressable markets
• Altium is one of the world-leading electronic PCB software businesses. It’s making electronic design more convenient for clients and more profitable for the ASX share
• Xero is one of the leaders of cloud accounting software

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The S&P/ASX 200 Index (ASX: XJO) may not be known for its technology shares, but there are some wonderful examples of ASX 200 growth shares in the software sector here.

Businesses that are looking to become world leaders at what they do could be attractive ideas to consider.

The recent ASX share market correction has given us the opportunity to look at strong businesses with plenty of potential:

Altium Limited (ASX: ALU)

Altium is a leading business in the electronic PCB design space. It has several products and services that the global electronics design industry can use, such as Altium Designer and Octopart. The company serves teams of all sizes from large design teams down to just one-person operations.

This business is looking to dominate and transform the industry. It’s looking to capture enough market share to be able to dictate how the sector will look going forwards – like Microsoft did with its office software.

Altium is also looking to shift to cloud operations with its Altium 365 offering so that engineers can collaborate from anywhere. This could be useful in today’s home-working revolution. The ASX 200 tech share continues to see more clients move onto Altium 365.

It claims to already have the most widespread PCB design tool – Altium Designer – and PCB designers will be able to connect to the wider engineering ecosystem using the company’s Altium 365 and Nexar offerings.

The company continues to grow revenue and has a longer-term goal of US$500 million of revenue. Scale and recurring revenue will help it earn higher margins and it’s also paying shareholders with bigger dividends every year.

Xero Limited (ASX: XRO)

Xero is one of the largest technology businesses listed in Australia, with a market capitalisation of $16.3 billion (according to the ASX).

This ASX 200 software share provides leading cloud accounting software. The aim is for accountants and business owners to be able to collaborate easily and that the accounting/business functions are easy to use, whilst also saving tons of time.

Xero has not had the success in the US that it was probably hoping for, but it’s quickly growing in many other places including the UK, Australia, New Zealand, South Africa and Singapore. Xero recently carried out a bolt-on acquisition to boost its prospects in Canada.

One of the main strengths of Xero is that it has a very high profit margin, which increased from 85.7% to 87.1% in the FY22 half-year result. This strong margin allows most of the revenue to turn into gross profit, enabling the business to re-invest heavily for more long-term growth.

The total lifetime value of Xero’s subscribers continues to grow thanks to subscriber growth, strong customer retention and growth in the average revenue per user (ARPU). The HY22 ARPU rose by 5% to $31.32, subscribers increased 23% and the total lifetime value of subscribers soared 61% to $9.94 billion.

The post 2 ASX 200 shares that could be top buys for growth appeared first on The Motley Fool Australia.

More reading

• The Macquarie (ASX:MQG) share price is down 10% in 2022, time to jump on it?
• These were the best performing ASX 200 shares last week
• Here are the top 10 ASX shares today
• Freaky Friday: Why was the ASX 200 so indecisive today?
• Expert sounds the warning bell on ASX ETFs… Here’s why

Motley Fool contributor Tristan Harrison owns Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Altium and Xero. The Motley Fool Australia owns and has recommended Xero. 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

• Since the start of 2022, the Macquarie share price has fallen by approximately 10%
• In the first half of FY22, its profit doubled to approximately $2 billion
• Macquarie is expecting to deliver more long-term performance. Is it a buy?

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The Macquarie Group Ltd (ASX: MQG) share price has dropped by around 10% from the start of the year, with a decline of 9%. That compares to the S&P/ASX 200 Index (ASX: XJO) which has dropped 6.2% from the start of the year.

Global investment bank Macquarie has a market capitalisation of $72.7 billion according to the ASX. Despite the short-term weakness, it has actually gone up by 43% in the past year.

What’s going on with the Macquarie share price?

Like most ASX shares, and global shares, the Macquarie share price has fallen amid concerns about inflation and what that could mean for interest rates in FY22 and beyond.

It was only a few months ago that the investment bank reported that profit had soared in the first half of FY22.

Macquarie’s net profit after tax surged 107% to $2.04 billion year on year for the six months to 30 September. However, it was in-line with the second half of FY21. The result saw a significant increase in net profit contribution from all four operating groups compared to the first half of FY21.

The business is becoming increasingly globally-focused, with international income making up 72% of total income in the first half of FY22.

A core driver of profitability is the amount of assets under management (AUM) that Macquarie has. It was managing $737 billion of AUM at the end of 30 September 2021, up 31% from March 2021. This may be able to assist is growing the Macquarie share price. 

Macquarie’s balance sheet was in a strong position with $8.4 billion of surplus capital and a bank CET1 capital ratio of 11.7%.

The investment bank also raised $1.5 billion to provide additional flexibility to invest in new opportunities where the expected risk-adjusted returns are attractive, while maintaining an appropriate capital surplus.

Macquarie acknowledged that it has experienced period of sustained and material growth in capital requirements, across its ‘annuity-style’  and market-facing activities. Management still see a strong pipeline of opportunities.

Dividend

The global investment bank decided to pay an interim dividend of $2.72 per share.

Macquarie outlook

The ASX share is continuing to maintain a cautious stance, with a conservative approach to capital, funding and liquidity that positions the investment bank “well to respond to the current environment”.

Macquarie’s CEO, Ms Wikramanayake, said:

Macquarie remains well-positioned to deliver superior performance in the medium-term. This is due to our deep expertise in major markets; strength in business and geographic diversity and ability to adapt the portfolio mix to changing market conditions; an ongoing program to identify cost saving initiatives and efficiency; a strong and conservative balance sheet and a proven risen management framework and culture.

Macquarie share price rating

Morgan Stanley currently rates the Macquarie share price as a buy, with a price target of $235. That’s more than 20% higher than where it is now.

While plenty of ASX shares may face challenges with interest rates rising, the broker points out that whilst parts of Macquarie will also suffer, other parts could benefit. So, rising interest rates would not be a total negative for the business.

Based on the current Macquarie share price, it’s valued at 18x FY22’s estimated earnings according to Morgan Stanley.

The post The Macquarie (ASX:MQG) share price is down 10% in 2022, time to jump on it? appeared first on The Motley Fool Australia.

More reading

• These were the best performing ASX 200 shares last week
• Here are the top 10 ASX shares today
• Freaky Friday: Why was the ASX 200 so indecisive today?
• Expert sounds the warning bell on ASX ETFs… Here’s why
• These 3 ASX 200 shares are topping the volume charts on Friday

Motley Fool contributor 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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