The Insurance Australia Group Ltd (ASX: IAG) share price has been pushing higher this month.

This is despite CMC Hospitality filing an application starting a representative proceeding against IAG in the Federal Court.

It appears investors are willing to put the company’s FY21 woes aside and are focusing on the FY22 financial outlook.

At Friday’s market close, the IAG share price finished the day up 1.33% to $5.33. This added to its gain of 2.5% in September so far.

During the week, IAG peaked at $5.49 — not far off its 52-week high of $5.51 reached on 13 August.

What’s driving IAG higher lately?

A likely catalyst is that investors are bullish on the company’s anticipated performance for FY22.

In its full-year results, IAG highlighted that it achieved a mostly solid scorecard, with growth across key metrics.

The biggest downside of the report was the company’s bottom line, registering a net loss after tax of $427 million.

However, it was the result of significant one-off corporate expenses, mainly relating to business interruption, customer refunds, and payroll remediation.

Looking ahead, IAG reintroduced its guidance, given its sound underlying financial numbers in FY21.

Gross written premium (GWP) is expected to produce “low single-digit growth” and an insurance margin of between 13.5% and 15.5% for FY22.

The company said the guidance aligns with its aspirational goal to achieve a 15% to 17% insurance margin over the medium term. IAG believes an insurance profit of at least $250 million is achievable over the next 3 to 5 years.

IAG managing director and CEO, Nick Hawkins commented:

The strength of our core business and its sound underlying performance in FY21, our new operating model with clear, embedded executive responsibilities, as well as greater certainty in the economic outlook, mean that we are confident that IAG’s underlying performance will continue to improve.

IAG share price summary

Over the past 12 months, IAG shares have moved about 10% higher, with year-to-date gains of close to 15%.

The IAG share price has underperformed the S&P/ASX 200 Index (ASX: XJO), which is 26% higher over the 12 months and almost 11% higher year to date.

Based on today’s price, IAG has a market capitalisation of roughly $13.11 billion, with 2.46 billion shares on its registry.

The post Is the IAG (ASX:IAG) share price bouncing back in September? appeared first on The Motley Fool Australia.

More reading

• Why the IAG (ASX:IAG) share price has underperformed the ASX 200 in the last year
• How have ASX financial shares performed during the August 2021 earnings season?
• Here’s why the IAG (ASX:IAG) share price is slumping today
• Here’s why the IAG (ASX:IAG) share price is up 10% in a month
• Here’s why the IAG (ASX:IAG) share price is down 3% in a week

Motley Fool contributor Aaron Teboneras 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 shares of and has recommended Insurance Australia 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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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 caught my eye are summarised below. Here’s why top brokers think investors ought to sell these shares next week:

A2 Milk Company Ltd (ASX: A2M)

According to a note out of Credit Suisse, its analysts have retained their underperform rating and $5.50 price target on this infant formula company’s shares. Although the broker notes that infant formula prices were stable in August and channel inventory is heading in the right direction, it isn’t enough for a change of rating. The broker continues to be concerned with its market position and China’s slowing birth rate. Credit Suisse fears its weak Stage 1 formula sales could impact future Stage 2 and Stage 3 sales. The A2 Milk share price ended the week at $5.51.

Fisher & Paykel Healthcare Corp Ltd (ASX: FPH)

A note out of Citi reveals that its analysts have retained their sell rating and NZ$27.00 (A$26.11) price target on this medical device company’s shares. Citi notes that lower COVID-related hospitalisations in Europe and North America are weighing on demand for its products in FY 2022. This has led to a decline in sales financial year to date. In light of this, the broker appears to believe its shares are overvalued at the current level. The Fisher & Paykel Healthcare share price was fetching $31.62 at Friday’s close.

Macquarie Group Ltd (ASX: MQG)

Another note out of Citi reveals that its analysts have retained their sell rating and lifted their price target on this investment bank’s shares to $153.00. The broker notes that Macquarie is guiding to a better than expected first half performance in FY 2022. However, this isn’t enough for a change of rating. Particularly given the broker’s belief that the second half will be tougher. As a result, the broker continues to believe that Macquarie’s shares are expensive at the current level and retains its sell rating. The Macquarie share price ended the week at $174.23.

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

More reading

• September is not being kind to the BHP (ASX:BHP) share price
• How have ASX healthcare shares performed during the August 2021 earnings season?
• How does the A2 Milk (ASX:A2M) share price compare to the ASX 200 today?
• Top brokers name 3 ASX shares to sell today
• The Macquarie (ASX:MQG) share price has gained 3 times that of CBA over 5 years

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 shares of and has recommended Macquarie Group Limited. The Motley Fool Australia has recommended A2 Milk. 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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ASX resources shares had a booming August 2021 earnings season. Commodity prices were strong for much of FY21, boosting returns for resources shareholders.

The iron ore price rose above US$220 a tonne earlier this year benefitting major miners such as BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO), and Fortescue Metals Group Limited (ASX: FMG). The gold price has also been elevated, boosting incomes for gold miners such as Newcrest Mining Ltd (ASX: NCM).

This translated into strong cash flows and record profits for ASX resources shares. Shareholders were rewarded with outsize dividends, many of which may flow back into the share market given current low interest rates.

COVID-19 did not cause serious disruptions to resource production, and government stimulus measures increased demand for raw inputs, leading to higher commodity prices. 

How have ASX resources shares performed against the market?

ASX resources shares have underperformed the broader market recently, possibly on fears that higher commodity prices won’t last.

The All Ordinaries Index (ASX: XAO) is up 10% over 2021. However, the BHP share price has fallen 4.3% since January and the Rio Tinto share price is down 7.5%. Shares in Fortescue Metals have plummeted 26.3% over 2021, while the Newcrest Mining share price is down 11%.

This month, iron ore prices fell to their lowest level since December last year, while gold prices have also backed away from recent highs.

Who are the winners this earnings season? 

Despite the recent withdrawal in commodity prices, ASX resources shares benefited from strong prices for most of FY21, leading to plenty of earnings season winners.

Rio Tinto and Fortescue achieved record financial results in the period to 30 June — Rio Tinto’s earnings before interest, tax, depreciation and amortisation (EBITDA) for the half-year grew 118% to $21,037 million while Fortescue’s earnings (EBITDA) for the full year grew 96% to US$16.4 billion.

Government stimulus in response to COVID-19 pressures has driven strong demand at a time of constrained supply resulting in a spike in prices. Rio Tinto reported free cash flow of $10.2 billion, with underlying earnings per share of 751.9 US cents, a 156% increase on FY20. The miner declared an interim dividend of 561 US cents per share, representing 75% of underlying earnings. 

Fortescue achieved record shipments, revenue, earnings, and cash flow in FY21, reflecting strong performance across the supply chain and heightened customer demand. Shareholders were rewarded with a $2.11 final dividend, bringing FY21 dividends to A$3.58 per share, a 103% increase on the previous year. This represented an 80% payout of net profit after tax, which was US$10.3 billion, up 117%. 

Fortescue finished the financial year with cash on hand of US$6.9 billion and net cash of US$2.7 billion. Delivering its second consecutive year of record performance, Fortescue is investing in its iron ore operations as well as pursuing opportunities in renewable energy. 

Newcrest also delivered record profits and free cash flows, delivering on full-year guidance. The gold miner produced 2.1 million ounces of gold and 142.7 thousand tonnes of copper (a record) in FY21.

The company has kept costs low, allowing for record margins even as the gold price has increased across the year.

This translated to record statutory and underlying profits for Newcrest of $1.2 billion, up 80% and 55% respectively. Annual free cash flow was a record $1.1 billion. Newcrest declared a fully franked final dividend of US 40 cents per share, 129% higher than the prior year. This brought full-year dividends to a record US 55 cents per share, equal to a 41% payout of FY21 free cash flow. 

And the losers? 

There were no real losers amongst resources shares this earnings season — BHP also delivered strong financial results and a record full-year dividend. BHP’s earnings (EBITDA) increased 69% to US$37.4 billion, with free cash flow up 140% to US$19.4 billion.

Iron ore accounted for the bulk of earnings, at US$26.3 billion, followed by copper with earnings of US$8.5 billion. Earnings per share increased 88% to US 337.7 cents per share assisted by a strong underlying performance across the portfolio of assets. A final dividend of US 200 cents per share was declared. This brings full-year dividends to US 301 cents per share, a 151% increase on FY20. 

Simultaneously with the release of its full-year results, BHP announced plans to enter a merger with Woodside Petroleum Limited (ASX: WPL). The companies plan to combine their respective oil and gas portfolios in an all-stock merger, creating a global top 10 energy company by production.

BHP’s oil and gas business would merge with Woodside, with Woodside issuing new shares to BHP shareholders. The expanded Woodside would be owned 52% by existing Woodside shareholders and 48% by existing BHP shareholders. The merger is intended to maximise the value of BHP’s oil and gas assets through increased operating scale and synergies. 

What is the outlook for ASX resources shares?

Fortescue has provided guidance for iron ore shipments of 180 — 185 million tonnes in FY22. This would be on par with the 182.2 million tonnes of ore shipped in FY21. Capital expenditure in FY22 is projected at US$2.8 — US$3.2 billion, slightly below the US$3.6 billion spent in FY21.

Rio Tinto has provided guidance for iron ore shipments of 325 to 340 million tonnes over 2021. Capital expenditure is expected to be ~$7.5 billion a year for each of FY22 and FY23. 

Newcrest is in a strong financial position with net cash of $176 million as at 30 June 2021 and significant liquidity. This enables investment in attractive growth projects. The gold miner will fund a pipeline of organic growth options from expected cash flow generation as well as the strong balance sheet.

Newcrest has provided guidance for gold production of 1,800 — 2,000 million ounces in FY22 and copper production of 125 – 130 thousand tonnes of copper. 

BHP is focused on executing the merger with Woodside, which it says will provide shareholders with a choice to weight exposure between BHP and petroleum via Woodside. The combined entity will have a greater scale and diversity of geographies, products, and markets. A more diversified product portfolio is intended to support energy transition. 

The post How have ASX resources shares performed during the August 2021 earnings season? appeared first on The Motley Fool Australia.

More reading

• September is not being kind to the BHP (ASX:BHP) share price
• These were the worst performing ASX 200 (ASX:XJO) shares last week
• Brokers name 3 ASX shares to buy today
• These ASX 200 dividend shares are about to dish out $40bn to shareholders
• 2 of the best ASX share ideas according to this leading broker

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

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The Star Entertainment Group Ltd (ASX: SGR) share price has hit it big.

At the close of trade on Friday, shares in the casino operator were trading for $4.25 – up 1.19%. The S&P/ASX 200 Index (ASX: XJO) ended the day 0.38% higher.

While the company hasn’t made any market sensitive announcements since 19 August, something has clearly got investors excited.

Let’s take a closer look.

It’s a royal flush

The start of the Star’s monumental rise through August and early September occurred when the company confirmed reports it was in negotiations with the NSW government to increase the amount of poker machines at its Sydney casino.

Previously, it was reported the Star could almost double its poker machine numbers at the resort. These would apparently come from rural regional pubs and clubs across the state. The impetus for such a move is an alleged concern of the government that money laundering is too easily facilitated at smaller venues as opposed to the Star. In its statement, Star pointed out it has about 1,000 fewer gaming machines at its Sydney venue than compared to facilities run by Crown Resorts Ltd (ASX: CWN).

The next day, the company released its full-year results and the momentum from this seems to really be carrying the Star share price higher and higher.

For FY21, Star Entertainment reported a revenue fall on the prior corresponding period (pcp) of 21%. It also recorded flat earnings before interest, tax, depreciation and amortisation (EBITDA) of $430 million. The company did not pay a dividend.

COVID-19 affected Star’s performance for the worse during the financial year. Management said reduced operational capacity, particularly across Sydney and Brisbane, weighed heavily on earnings.

Looking forward, Star says the first half of this financial year will be negatively impacted by current restrictions in place in Sydney. It said persistent and uncertain restrictions “could materially impact revenues and earnings”.

Despite these headwinds, investors might be confident the days of lockdown are drawing to a close and business will return for Star.

Star share price snapshot

Over the past 12 months, the Star share price has increased 37.1%. Year-to-date it is 13.3% higher. The company’s 52-week high is $4.32 and its 52-week low is $2.97.

Star Entertainment has a market capitalisation of approximately $4 billion.

The post The Star (ASX:SGR) share price is up 26% in a month appeared first on The Motley Fool Australia.

More reading

• How does the Crown Resorts (ASX:CWN) earnings result compare to Star Entertainment (ASX:SGR)?
• ASX 200 midday update: Treasury Wine results, Origin’s $2bn loss, Star impresses
• Star Entertainment (ASX: SGR) share price up 5% despite revenue slump
• How did the Star (ASX:SGR) share price respond last earnings season
• Which ASX shares are the biggest movers on the ASX 300 today?

Motley Fool contributor Marc Sidarous owns shares of Star Entertainment Group Ltd. 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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If you’re wanting to add some growth shares to your portfolio in September, then you may want to check out the two listed below.

Here’s why analysts are tipping these ASX shares as buys:

IDP Education Ltd (ASX: IEL)

The first ASX growth share to look at is IDP Education. It is a provider of international student placement and English language testing services.

While trading conditions have been difficult because of the pandemic, the company appears well-positioned for growth once trading conditions normalise. Particularly given its recent acquisition of the British Council’s Indian International English Language Testing System for A$240 million. This transaction is expected to be approximately 13% earnings per share accretive (pre-synergies) on a pro forma calendar year 2019 basis.

Goldman Sachs is very positive on the company and believes it has strong long term growth potential.

It commented: “The long term growth opportunity for IEL is compelling. The company is reinvesting in digital capability that will increase its competitive advantage and strengthen its relationship with tertiary education institution clients. We estimate IEL to have <5% market share of the Canada and UK markets, with significant opportunity to gain share in a highly fragmented and under-penetrated market.”

The broker currently has a buy rating and $34.00 price target on its shares.

Nitro Software Ltd (ASX: NTO)

Another ASX growth share to look at is Nitro Software. It is a software company that is aiming to drive digital transformation in organisations around the world via its Nitro Productivity Suite. This product provides integrated PDF productivity and electronic signature tools to customers.

Demand for its offering continues to grow thanks to its quality and a number of positive industry tailwinds. This includes the global shift to remote and digital work, which is being accelerated by the pandemic.

During the first half of FY 2021, the company delivered a 56% increase in its annualised recurring revenue (ARR) to US$33.8 million. This puts it on track to achieve its FY 2021 guidance for ARR of between US$39 million and US$42 million.

Bell Potter is very positive on the company. It is the broker’s “number one pick given the slight pullback in share price following the 1H2021 result – which was good but not great – and our expectation the next few results (i.e. 2H2021, 1H2022 and 2H2022) will all show strong top line growth on the back of the increase in sales staff in 1H2021 and also the recent commencement of charging for eSigning.”

Bell Potter has a buy rating and $4.00 price target on its shares.

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

More reading

• Brokers name 2 ASX 200 shares to buy
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• Here are the top 10 ASX 200 shares on Monday
• 3 top ASX growth shares for investors in September

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 shares of and has recommended Idp Education Pty Ltd. The Motley Fool Australia has recommended Nitro Software 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 looking to add some exchange traded funds (ETFs) to your portfolio, then you may want to read on.

Listed below are two popular ETFs that are very popular with investors right now. Here’s what you need to know about them:

BetaShares NASDAQ 100 ETF (ASX: NDQ)

The first ETF to look at is the BetaShares NASDAQ 100 ETF. It aims to track the performance of the NASDAQ-100 Index before fees and expenses. This index comprises 100 of the largest non-financial companies listed on the NASDAQ market, and includes many companies that are at the forefront of the new economy.

BetaShares notes that this area of the market is underrepresented on the ASX. As a result, the ETF may benefit local investors that often have a large allocation to financials and mining companies and little exposure to technology.

Among the companies you’ll be buying a slice of are global giants such as Amazon, Apple, Facebook, Microsoft, Nvidia and Tesla.

In respect to the latter, Tesla appears well-placed for growth over the long term thanks to the ongoing adoption of electric vehicles and its energy storage business. In respect to the former, the company notes that public sentiment and support for electric vehicles are at a never-before-seen inflection point.

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

If you already own the BetaShares NASDAQ 100 ETF, then you may want to consider complementing it with the VanEck Vectors Video Gaming and eSports ETF. This ETF gives investors exposure to a portfolio of the largest companies involved in video game development, eSports, and related hardware and software globally.

VanEck notes that these companies are in a position to benefit from the increasing popularity of video games and eSports. Furthermore, it notes that the fund gives investors the option to diversify their portfolio by providing opportunities away from tech giants Apple, Amazon, Facebook, Google and Microsoft.

Among its major holdings are graphics processing units (GPU) giant Nvidia and games developers Take-Two Interactive (GTA, Red Dead), Electronic Arts (FIFA, Sims, Apex Legends), and Activision Blizzard (Call of Duty).

The post 2 popular ETFs for ASX investors to buy appeared first on The Motley Fool Australia.

More reading

• 3 top quality ETFs for ASX investors
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• 2 top ETFs that might be buys in September 2021
• 3 high quality ETFs for ASX investors in September
• A2 Milk and Zip were among the most traded ASX shares last week

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 shares of and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia owns shares of and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended VanEck Vectors ETF Trust – VanEck Vectors Video Gaming and eSports 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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At the current Woolworths Group Ltd (ASX: WOW) share price, could it be a good one to consider for dividends?

What did Woolworths do with the dividend in FY21?

The Woolworths board decided to increase the final dividend by 14.6% to 55 cents. That brought the full year dividend to $1.08 per share, an increase of 14.9%. That came after continuing operations earnings per share (EPS) increased 20.2% to 119.6 cents.

How big will the dividend be in FY22 and FY23?

There are a number of estimates for the Woolworths dividends over the next couple of years.

Macquarie Group Ltd (ASX: MQG) is one of the analysts that has estimated how big the dividend could be. In FY22, Macquarie is expecting Woolworths to pay an annual dividend of $0.93 per share, which would be a grossed-up dividend yield of 3.3%.

In FY23, Macquarie is expecting the dividend to be $1.03 per share, which would be a grossed-up dividend yield of 3.7%.

Commsec’s projections for the Woolworths dividend is for a little bit higher. In FY22, Commsec numbers suggest a 3.6% grossed-up dividend yield and in FY23 the forecast suggests a 3.75% grossed-up dividend yield.

How are Woolworths earnings going?

Woolworths reported in FY21 that continuing net profit increased 20.1% to $1.5 billion after continuing sales grew by 4.9% to $55.7 billion. FY21 continuing earnings before interest and tax (EBIT) before (significant items) rose 11.1% to $2.76 billion.

Breaking that down into the divisions, Australian food EBIT was up 9% to $2.43 billion, New Zealand food EBIT fell 6.4% to $336 million and Big W EBIT jumped 344.9% to $172 million.

Looking to the outlook, Woolworths plans to open 10 to 25 new full range supermarkets annually.

Australian food total sales for the first eight weeks have increased by 4.5%, cycling growth of 11.9% in the prior year. Woolworths attributed this growth to lockdowns across the country, particularly in NSW. More people are shopping online.

In New Zealand food, Woolworths said that two-year average growth momentum has continued to improve in FY22, with sales benefiting from recent lockdowns.

However, Big W sales were down 15.1% in the first eight weeks of FY22 due to the impact of lockdowns and cycling sales growth of 21.1%.

Group COVID costs have been $41 million in the first eight weeks, or 0.5% of sales.

Is the Woolworths share price a buy?

Macquarie currently rates the Woolworths share price as neutral, with a price target of $41.50.

However, Credit Suisse thinks that the Woolworths share price is a sell with a price target of $31.02. The broker doesn’t think that Woolworths is going to generate much growth over the next couple of years.

The post Is the Woolworths (ASX:WOW) share price a buy for dividends? appeared first on The Motley Fool Australia.

More reading

• It hasn’t been a great week for the Woolworths (ASX:WOW) share price
• Woolworths (ASX:WOW) share price on watch after its big green promise
• Woolworths (ASX:WOW) share price lower after selling stake in meal box company
• Marley Spoon (ASX:MMM) share price sinks 8% after Woolworths sells its stake
• Here’s why the Woolworths (ASX:WOW) share price is in focus today

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

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The Woodside Petroleum Limited (ASX: WPL) share price is having a rough trot this month despite no news having been released by the company.

The hard slog for Woodside has also come despite relatively steady oil prices.

Since the end of August, the Woodside share price has fallen just 1.2%. However, it fell more than 3% over the past week.

The Woodside share price finished Friday’s session trading at $19.27. It gained 0.36% over the course of the day.

Let’s take a look at what’s been driving Woodside lower on the ASX.  

What’s up with Woodside?

The Woodside share price has been struggling this week despite oil prices remaining relatively steady.

The month started off well for the price of oil, and while it’s been up and down since, it ultimately hasn’t moved much.

The steady oil price comes despite reports China attempted to debase the oil market on Friday. According to reporting by Bloomberg, China released crude oil from its strategic reserve in an attempt to cool oil prices.

While today’s news hasn’t noticeably affected Woodside’s stock or the price of oil today, it may soon dent confidence in the sector.

Other news that might be weighing on the Woodside share price is its planned merger with BHP Group Ltd‘s (ASX: BHP) oil assets. The two companies announced their intent to merge in August.

Under the proposal, Woodside will onboard BHP’s oil assets while BHP would walk away with a 48% holding in the newly expanded Woodside.

Another potential weight on Woodside’s shares is the company’s competitors, Santos Ltd (ASX: STO) and Oil Search Ltd (ASX: OSH), which have been inundated with expectation recently.

The market’s anticipation ended with Friday’s announcement that the pair will be merging to create a $21 billion competitor for Woodside.

However, the confirmation of the Santos-Oil Search merger didn’t seemingly hurt the Woodside share price on Friday.

Woodside share price snapshot

Last week’s slip was just the latest fall faced by Woodside’s stock.

It is currently 16% lower than it was at the start of 2021. However, it has gained 5% since this time last year.

The post September is not being kind to the Woodside (ASX:WPL) share price appeared first on The Motley Fool Australia.

More reading

• How have ASX energy shares performed during the August 2021 earnings season?
• 5 things to watch on the ASX 200 on Friday
• The Woodside (ASX:WPL) share price could be worth $28: broker
• 5 things to watch on the ASX 200 on Thursday
• The Woodside Petroleum share price is up just 2.5% in a year. Here’s why

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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The BHP Group Ltd (ASX: BHP) share price has fallen by around 10% in September 2021. We’re only a third of the way through of the way through the month.

What could be causing this difficulty for BHP?

There have been a couple of things that may be on investor’s minds.

The dividend?

A few weeks ago, BHP declared a very big dividend for FY21. The board decided to increase the annual dividend by 151% to US$3.01. This came after a big year of profit growth and cashflow.

The final dividend for FY21 was US$2 per share, in Australian dollar terms it was AU$2.715 per share.

The ex-dividend date for that final dividend was 2 September 2021. That means investors on or after 2 September 2021 are no longer entitled to that final dividend, meaning investors could say the BHP share price is worth AU$2.72 less in the short-term.

China turns the screw?

It has been reported by various media, including the Australian Financial Review, that China is reducing its steel production, telling steel producers to cut the amount they’re making.

The AFR reported that China’s Ministry of Industry and Information Technology and the Ministry of Ecology and Environment said production cuts in key steel making cities in the country’s north would be extended until March next year.

This drop in Chinese demand may be an important factor for why the iron ore price has fallen from above US$230 per tonne to below US$140 per tonne.

How important is iron ore for the BHP share price?

In overall terms, BHP’s FY21 result showed a lot of profit. The profit from operations rose 80% to US$25.9 billion, attributable profit increased 42% to US$11.3 billion and net operating cashflow grew 73% to US$27.2 billion.

Looking at the underlying numbers, underlying attributable profit rose 88% to US$17 billion, and underlying earnings before interest, tax, depreciation and amortisation (EBITDA) grew 69% to US$37.4 billion.

BHP’s underlying EBITDA from the iron ore segment was US$26.3 billion, being 70% of the total. The big miner’s iron ore underlying EBITDA rose 80.6% compared to FY20. BHP’s FY20 iron ore underlying EBITDA was 65.9% of the total. Iron ore has clearly been important in the last two financial years.

Is the BHP share price worth looking at?

One of the only brokers that rate the BHP share price is a buy is Macquarie Group Ltd (ASX: MQG) with a price target of $54. One of the things that Macquarie is focused on is higher expectations for oil prices as the world recovers from COVID-19.

However, there are brokers such as Credit Suisse and Morgans that rate BHP as a hold with lower earnings expectations for its iron ore business.

The post September is not being kind to the BHP (ASX:BHP) share price appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and 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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Are you looking for some quality ASX dividend shares to add to your income portfolio this month?

Then you might want to look at the ones listed below. Here’s what you need to know about these dividend shares:

Stockland Corporation Ltd (ASX: SGP)

The first ASX dividend share to look at is Stockland. It is a property company which owns, manages and develops a diverse range of property assets. These include retirement villages, retail centres, business parks, offices, and logistics centres.

It was back on form in FY 2021, reporting a statutory profit of $1.1 billion. This was up from a $21 million loss in FY 2020.

The team at Citi were pleased with Stockland’s performance. In response, the broker put a buy rating and $5.03 price target on the company’s shares.

In addition, its analysts are forecasting dividends per share of 28 cents in FY 2022 and 28.5 cents in FY 2023.

Based on the current Stockland share price of $4.49, this will mean yields of 6.2% and 6.3%, respectively.

Transurban Group (ASX: TCL)

Another ASX dividend share to consider is Transurban. This leading toll road operator has a portfolio of important roads in Melbourne, Sydney and Brisbane, Greater Washington, United States and Montreal, Canada.

Analysts at Ord Minnett remain very positive on the company. Although they acknowledge that the near term will be impacted by lockdowns, they appear confident that its road will bounce back swiftly once restrictions ease.

Longer term, the broker believes Transurban is well-placed for the next phase of its growth thanks to a significant pipeline of opportunities.

As a result, its analysts have a buy rating and $15.50 price target on its shares at present.

In addition, Ord Minnett is forecasting dividends of 36.5 cents per share in FY 2022 and then 48.4 cents per share in FY 2023. Based on the latest Transurban share price of $13.98, this will mean yields of 2.6% and 3.5%, respectively.

The post Analysts name 2 ASX dividend shares to buy now appeared first on The Motley Fool Australia.

More reading

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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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