There are some really good ASX tech shares out there that are rated as buys by brokers.

Brokers (hopefully) have a good understanding of the merits of the businesses and have given thought to whether, at the current share price, a business is a buy, hold or sell right now.

These two businesses are ones that brokers think are buys in the technology space at the moment:

FINEOS Corporation Holdings PLC (ASX: FCL)

FINEOS is a software provider for the employee benefits and life, accident and health industry. Its technology aims to improve operational efficiency, increase effectiveness and provide excellent customer care.

The ‘FINEOS AdminSuite’ is designed to manage the modern complex structures and relationships of group and individual insurance processing to optimise the plan, coverage and data management, operational processing and business intelligence.

It’s currently rated as a buy by at least three brokers including Macquarie Group Ltd (ASX: MQG). The price target from Macquarie is $4.63, which suggests a potential upside of around 20% over the next 12 months if the broker is right.

Macquarie believes that FINEOS looks good value when looking at its peers, yet the business continues to make good operational progress. The broker thinks that it has a good future.

The ASX tech share is expecting organic subscription revenue growth of 30% for FY21. Management said this demonstrates strong and consistent software as a service (SaaS) revenue growth. Around 71% of its revenue is cloud-based.

It’s also looking for strategic bolt on acquisitions to enhance the FINEOS platform, such as Spraoi which is a provider of machine learning capabilities for the employee benefits and life industry.

Temple & Webster Group Ltd (ASX: TPW)

Temple & Webster is an online furniture and homewares business which sells many thousands of products through its website.

It’s currently rated as a buy by at least two brokers including Morgan Stanley. The broker has a price target on the ASX tech share of $15.

The broker likes the tailwind for the business of the e-commerce growth story. There also continues to be good demand for the products that Temple & Webster sells. Morgan Stanley thinks that Temple & Webster can become much more profitable in the future.

A few months ago, Temple & Webster told the market that it’s going to invest heavily over the next few years to increase its market presence, improve its offering to customers and make the business even more efficient. During this scale-up period, it expects that revenue will increase by “strong double digit” amounts whilst the earnings before interest, tax, depreciation and amortisation (EBITDA) margin would be between 2% to 4%.

But the ASX tech share’s management believes that with scale it can achieve operating leverage and higher levels of profitability. That will include improved supplier terms, more repeat customers which will reduce marketing expenses, a slowing of investment in fixed costs and a higher percentage of exclusive products with higher gross profit margins.

Temple & Webster CEO and co-founder Mark Coulter has said:

You only need to look at the US to see how the e-commerce market is playing out, and why we remain bullish about the shift from offline to online. We are at the start of this once in a generation shift, and now is the time to put our foot down to secure market leadership and ensure we are the brand for the next generation of furniture shopper.

The post 2 top ASX tech shares rated as buys by brokers appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• Why is the Temple & Webster (ASX:TPW) share price up over 3% today?
• 3 ASX shares growing at a rapid rate
• Brokers name 3 ASX shares to buy today
• 3 ASX growth shares named as buys

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 shares of and has recommended Temple & Webster Group Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended FINEOS Corporation Holdings plc. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia has recommended FINEOS Corporation Holdings plc and Temple & Webster Group 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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Australian energy shares such as Beach Energy Ltd (ASX: BPT), Oil Search Ltd (ASX: OSH), and Santos Ltd (ASX: STO), and Woodside Petroleum Limited (ASX: WPL) could come under pressure on Tuesday morning.

This follows a sharp decline in oil prices during overnight trade on Wall Street.

What happened?

While energy shares were out of form on Monday, particularly the Oil Search share price after the exit of its CEO, these declines look likely to be extended during today’s session after oil prices sank as much as 8% overnight.

According to Bloomberg, the WTI crude oil price has sunk 7.6% to US$66.34 a barrel and the Brent crude oil price has tumbled 6.9% to US$68.52 a barrel.

Why are oil prices sinking?

Traders have been selling oil after a surprise announcement out of OPEC on Sunday. That announcement revealed that the oil cartel has agreed to remove all production cuts by September 2022.

According to CNBC, the group of 23 nations have agreed to increase production by 400,000 barrels per day each month from August. This means that by September 2022, the entirety of the almost 6 million barrels per day of oil being withheld will be back on the market.

Bullish analysts

Some analysts believe the news isn’t as bad as it appears. RBC’s Helima Croft told CNBC: “This was a renewal of OPEC+ vows. We think the market can absolutely absorb the additional 400,000 barrels per month…this is a constructive agreement.”

Goldman Sachs commented: “We view [Sunday’s] deal as supportive to our constructive oil price view with supply increasingly becoming the source of the bullish impulse and evidence of non-OPEC supply shortfalls likely in the coming months.”

In addition to this, the report reveals that the team at Credit Suisse has raised its oil price forecasts for the year. Its analysts are now expecting Brent crude oil to average US$70 per barrel in 2021, up from US$66.50 per barrel previously. It also boosted its WTI crude oil price forecast by US$5 per barrel to an average of US$67 per barrel in 2021.

Citi is even more positive, it said: “The summer season for petroleum markets should be stronger than usual this year on pent-up leisure demand.” It expects Brent and WTI to climb to US$85 per barrel or higher this year.

In light of the above, the recent weakness in energy shares could yet prove to be a buying opportunity for investors.

The post ASX energy shares on watch after oil prices sink 8% appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• Why Altium, Evolution, Oil Search, & SEEK shares are tumbling lower
• Oil Search (ASX:OSH) share price slides on shock leadership change
• ASX 200 midday update: Altium sinks, Oil Search CEO resigns
• ASX energy shares in focus as OPEC+ strikes deal to lift oil production

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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On Monday the S&P/ASX 200 Index (ASX: XJO) started the week on a disappointing note. The benchmark index finished the day 0.85% lower at 7,286 points.

Will the market be able to bounce back from this on Tuesday? Here are five things to watch:

ASX 200 expected to sink again

The Australian share market looks set to sink again this morning. According to the latest SPI futures, the ASX 200 is expected to open the day 70 points or 1% lower. This follows a very poor start to the week on Wall Street, which saw the Dow Jones crash 2.1%, the S&P 500 drop 1.6%, and the Nasdaq fall 1.1%. The Dow had its worst day since October amid concerns rising COVID-19 cases could stifle global economic growth.

Oil prices crash

Energy producers such as Beach Energy Ltd (ASX: BPT) and Woodside Petroleum Limited (ASX: WPL) could come under significant pressure today after oil prices crashed overnight. According to Bloomberg, the WTI crude oil price is down 7.6% to US$66.34 a barrel and the Brent crude oil price has tumbled 6.9% to US$68.52 a barrel. News that OPEC plans to remove its production limits hit oil prices very hard.

BHP fourth quarter update

The BHP Group Ltd (ASX: BHP) share price will be one to watch on Tuesday when it releases its fourth quarter update. Goldman Sachs is expecting a decent quarter and strong iron ore prices. It said: “June H realised pricing – Fe could be higher on better lump premium, but Jimblebar discounts may partly offset, expect coal discounts on pricing lags.”

Gold price softens

Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) will be on watch after the gold price softened. According to CNBC, the spot gold price is down 0.15% to US$1,812.1 an ounce. A strong US dollar put pressure on the precious metal.

ANZ capital return

The Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price could be given a boost today by news that it is returning funds to shareholders. After the market close, ANZ announced that it will buy-back up to $1.5 billion of shares on-market as part of its capital management plan. The bank may not stop there, though. It advised that its capital position may allow future capital returns to be considered.

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

More reading

• ASX 200 drops, Telstra falls, Altium declines
• Here are the 3 most heavily traded ASX 200 shares this Monday
• Why Altium, Evolution, Oil Search, & SEEK shares are tumbling lower
• 2 defensive ASX 200 shares that brokers rate as ‘buys’ this Monday
• ASX 200 midday update: Altium sinks, Oil Search CEO resigns

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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The Insurance Australia Group Ltd (ASX: IAG) share price will be one to watch on Tuesday morning.

This follows the release of an announcement late this evening relating to a potential asset sale.

Why is the IAG share price on watch?

The IAG share price could be on the move tomorrow amid news that it could be selling its 49% interest in Malaysian business, AmGeneral Holdings Berhad.

According to the release, AmGeneral Holdings Berhad has signed an implementation agreement for the proposed sale of its insurance business to Liberty Insurance Berhad.

AmGeneral Holdings Berhad is the general insurance arm of the AMMB Group (AmBank), which owns the remaining 51% interest. Its wholly-owned subsidiary AmGeneral Insurance Berhad sells general insurance products under the AmAssurance and Kurnia brands.

Agreement terms

The reasonably complex implementation agreement will see Liberty Insurance Berhad acquire 100% of the shares in AmGeneral, with AmBank then holding a 30% interest in the insurance operations of both Liberty Insurance and AmGeneral. IAG isn’t sticking around, though, and intends to exit its investment in AmGeneral.

The release explains that completion will be conditional on the Malaysian High Court approving a capital reduction and distribution of the sale proceeds to IAG.

At this stage, IAG’s share of the sale proceeds will be $340 million. This will be payable in cash and subject to post-close adjustments.

What’s next?

Pending regulatory processes and approvals, the transaction is expected to complete during IAG’s financial year ending 30 June 2022.

IAG expects to incur a loss on sale of approximately $901 million. This will be recognised in its FY 2021 results as part of amortisation and impairment. This is due to the asset now being recognised as held-for-sale.

The sale is expected to result in an increase in IAG’s regulatory capital position of approximately $150 million at completion.

The post IAG (ASX:IAG) share price on watch following asset sale update appeared first on The Motley Fool Australia.

More reading

• Brokers using the lockdown to upgrade earnings forecasts on these ASX 200 shares
• What’s weighing down the IAG (ASX:IAG) share price lately?
• It’s been a tough month for the IAG (ASX:IAG) share price so far
• 5 outperforming ASX dividend shares unmasked

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 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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The Telstra Corporation Ltd (ASX: TLS) share price was out of form and dropped lower with the market on Monday.

The telco giant’s shares ended the day 0.3% lower at $3.76 even though it responded to media speculation.

What happened to the Telstra share price?

The Telstra share price came under pressure despite the telco giant confirming that it was in discussions regarding an acquisition.

This morning Telstra revealed that it has been in talks to acquire South Pacific telecommunications company Digicel Pacific in partnership with the Australian Government.

Digicel Pacific was founded in 2006 and is a leading provider of communications services across Papua New Guinea, Fiji, Nauru, Samoa, Tonga and Vanuatu. It has a strong market position and an extensive network coverage in the region. In calendar year 2020 it generated EBITDA of US$235 million and strong margins.

The release explains that if Telstra were to proceed with a transaction, it would be with financial and strategic risk management support from the Government. As well as significant Government funding and support package, any investment would have to be within certain financial parameters. This would mean that Telstra’s equity investment is the minor portion of the overall transaction.

Reaction

In response to the news, analysts at Goldman Sachs have retained their buy rating and $4.20 price target on the Telstra share price.

This implies potential upside of ~12% over the next 12 months excluding dividends. Including them, it stretches to ~16%.

At this stage, it is too soon for any changes to its estimates. However, the broker doesn’t appear to be objecting to the move.

Goldman commented: “Any acquisition would be in partnership with the Australian Government, with Telstra to only have a minor portion of the equity, and the Government would also provide Telstra with a significant funding, support, and risk management package (i.e. media reports suggest that Telstra has asked Digicel to underwrite its 3Y revenue.”

“Telstra noted that Digicel Pacific generated EBITDA of US$235mn in CY20, with a strong margin and extensive network coverage. We currently value Telstra International at 7.0X EBITDA. Using a similar multiple range for Digicel of 6-8X EBITDA, this implies a potential EV for Digicel of A$1.9-2.5bn. Assuming 3X gearing (vs. 1.9x for TLS but factoring in government support), the equity would then be worth A$1.0-1.6bn. This would imply that the speculated $200-300mn equity investment would represent 15-30% equity ownership,” it added.

The post Is the Telstra (ASX:TLS) share price good value amid acquisition news? appeared first on The Motley Fool Australia.

More reading

• ASX 200 drops, Telstra falls, Altium declines
• 2 defensive ASX 200 shares that brokers rate as ‘buys’ this Monday
• ASX 200 Weekly Wrap: ASX shakes off lockdowns to rise higher
• Telstra (ASX:TLS) share price in focus after confirming Digicel Pacific acquisition talks
• Why Telstra (ASX:TLS) and this ASX dividend share could be buys

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 Telstra 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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Looking for growth shares to buy? Then you might want to consider one of the ASX shares listed below.

Here’s why they have been tipped as growth shares to buy:

NEXTDC Ltd (ASX: NXT)

The first ASX growth share to look at is this leading data centre operator. NEXTDC has been benefiting greatly from the structural shift to the cloud. While this accelerated during the pandemic, it has been going on for years and still has a long way to go.

In light of this, NEXTDC continues to experience growing demand for data centre capacity. In fact, a significant amount of future capacity is under option, giving the company great visibility on its future earnings.

This could be supported by management’s plan to expand into the Asia market. It has its eyes initially on the Singapore and Tokyo markets, where it would have huge opportunities to grow into in the future.

Goldman Sachs is very positive on the company. It currently has a buy rating and $14.80 price target on its shares.

The broker commented: “We remain high-conviction on the growth profile ahead, forecasting +37MW contract wins across FY22-23E (=65% conversion of options). Combined with recent share price underperformance, this gives an attractive growth adjusted valuation. We reiterate our Buy (on CL) on NXT, the most compelling growth story in our coverage.”

PointsBet Holdings Ltd (ASX: PBH)

Another ASX growth share to look at is PointsBet. It is a leading sports betting company with operations in both the ANZ and US markets.

These operations are currently generating significant revenue thanks to the growing popularity of mobile sports betting and innovative products.

However, despite this, the company is still only scratching at the surface of its massive US market opportunity. For example, Goldman Sachs notes that the US sports betting market is forecast to grow at a compound annual growth rate of 40% out to 2033.

In light of this and its strong market position, Goldman has a buy rating and $17.20 price target on its shares.

Goldman said: “We like PBH due to i) PBH’s leverage to the burgeoning US Sports Betting and iGaming market which we forecast to be a US$53 bn TAM opportunity at maturity, ii) our view that PBH is well-placed to achieve 10% share in states it operates in, iii) upside risk to long-run sustainable margins in Aus and the US which was reaffirmed by the strong margin result in 3Q21.”

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

More reading

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• These ASX shares are the latest buy ideas from top brokers
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• Why Afterpay, PointsBet, Webjet, & Zip shares are sinking
• Is BlueBet or Pointsbet the better bet right now?

Motley Fool contributor James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings 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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The S&P/ASX 200 Index (ASX: XJO) fell by around 0.9% to 7,286 points.

Here are some of the highlights from the ASX:

Telstra Corporation Ltd (ASX: TLS)

The Telstra share price dropped by around 0.3% today. However, this was less than the drop of the ASX 200.

In a response to a story in The Age/Sydney Morning Herald, Telstra confirmed it has been in discussions about a potential deal to make an investment in a telecommunications company, Digicel Pacific in the South Pacific region in partnership with the Australian Government.

Digicel is a leading provider of communications services across Papua New Guinea, Fiji, Nauru, Samoa, Tonga and Vanuatu. In the 2020 calendar year, Digicel Pacific made earnings before interest, tax, depreciation and amortisation (EBITDA) of $235 million.

Telstra said the discussions are incomplete and there is no certainty that a transaction will proceed.

The ASX 200 telco said that it was initially approached by the Australian Government to provide technical advice about Digicel Pacific which is a commercially attractive asset and critical to telecommunications in the region. The company said that if Telstra were to proceed with a transaction it would be with financial and strategic risk management support from the government.

In addition to a significant government funding and support package any investment would also have to be within certain financial parameters with Telstra’s equity investment being the minor portion of the overall transaction.

Altium Limited (ASX: ALU)

The Altium share price dropped by more than 4% today on takeover talk.

In an official ASX release, the ASX 200 electronic PCB software business said that in response to media speculation, it hadn’t received any further offer from Autodesk.

That media reporting, such as by the Australian Financial Review, said that Autodesk had come back to Altium to talk about an offer of $40 per share. But those discussions at $40 per share was still reportedly not enough for Altium to be interested.

The AFR reported that an Altium spokesman said:

We are not commenting on matters with Altium but can confirm that acquisition discussions have ceased at this time.

Nick Scali Limited (ASX: NCK)

The Nick Scali share price went up more than 4% today on speculation news regarding a potential acquisition.

It confirmed that it’s in non-exclusive discussions with Greenlit Brands regarding a potential deal to buy Plush, the furniture business.

Nick Scali pointed out that it’s actively considering acquisition growth opportunities from time to time. Management are thinking about the strategic rationale, available synergies, financial impact and the long-term value created for Nick Scali shareholders.

The company said there is no certainty that these discussions, which are ongoing, will result in a transaction for Plush.

If the deal were to go ahead, Nick Scali said it expects it would fund this deal with a combination of cash on hand and debt.

The post ASX 200 drops, Telstra falls, Altium declines appeared first on The Motley Fool Australia.

More reading

• Here are the 3 most heavily traded ASX 200 shares this Monday
• Why Altium, Evolution, Oil Search, & SEEK shares are tumbling lower
• Altium (ASX:ALU) share price bounces back after responding to media speculation
• 2 defensive ASX 200 shares that brokers rate as ‘buys’ this Monday
• Why the Nick Scali (ASX:NCK) share price is going gangbusters

Motley Fool contributor Tristan Harrison owns shares of Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Altium. The Motley Fool Australia owns shares of and has recommended Altium and Telstra 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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Long-term investing usually involves taking advantage of short-term market weakness. Though, sometimes shareholders want to hedge against a possible stock market crash. Considering the S&P/ASX 200 Index (ASX: XJO) finished 0.85% lower to 7,286 points, now might be a good time to discuss how investors can profit during market weakness with an ASX-listed exchange-traded fund (ETF).

Short-term market volatility can wreak havoc on investors who were looking to sell in the near future, or rely on the market for an income. For those reasons and others, an avenue to capitalise on the ASX stock market falling can be appealing.

Let’s look at how BetaShares Australian Equities Bear Hedge (ASX: BEAR) offers this to its investors.

Turn that stock market crash upside down

The BEAR hedge ETF seeks to generate returns that are negatively correlated to the returns of the Australian stock market. Generally, a 1% fall in the market will result in a 0.9% to 1.1% gain in the ETF.

In order to achieve this outcome, BetaShares sells index futures contracts. This act of selling a contract before buying is known as short selling. The objective for investors to make a profit is to buy the contract back at a lower price and pocket the difference.

However, it is important to know that the opposite is true as well. For example, if the Australian stock market rallied, rather than crashed, investors would be losing money.

Another important piece of information is the management fee for this actively managed fund. Investors can expect to incur a 1.38% management cost per annum with the BEAR ETF.

The intended scenario for this investment is a short-term position. For example, between 21 February 2020 and 20 March 2020, investors could have made a 40.18% return during the COVID-19 crash.

Finally, it’s worth keeping in mind that the ASX stock market has always gone up over the long term.

The post How this ASX ETF lets investors cash in on a stock market crash appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler 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 oOh!Media Ltd (ASX: OML) share price is tumbling as the effects of the pandemic on its business are becoming increasingly apparent.

Shares in oOh!Media closed today’s trade at $1.51 – 1.95% lower than Friday’s close.

The oOh!Media share price has also fallen 18.55% in just 30 days.

The significant fall has occurred despite the out-of-home advertising company not releasing any price-sensitive news since May.

Let’s take a look at what might be driving the oOh!Media share price down lately.

COVID-19 taking its toll

As most would assume, as people stay at home while lockdowns rage, less money is put into outdoor advertising. And that’s exactly what’s happened to oOh!Media.

It reported a 34% drop in revenue in its results for the 2020 calendar year. The oOh!Media share price also fell 46% over 2020.

PwC’s Australian Entertainment. & Media Outlook 2021- 2025 found the media and marketing landscape has shifted considerably since the beginning of the pandemic, with out-of-home advertising one of the hardest-hit segments.

However, it reports it’s starting to see “green shoots” from the segment, driven by demand for roadside billboards.

Unfortunately, over the last month, Australia has experienced the greatest number of people in lockdown since early 2020.  

Since this time last month, areas of Queensland, Perth, Western Australia’s Peel region, Darwin, and Alice Springs have had lockdowns imposed and lifted again.

Meanwhile, Sydney has been enduring a 3 week ‘soft’ lockdown and has another 11 days of hard lockdown to get through in an attempt to shake the COVID-19 Delta strain.

Similarly, Victoria entered what was a 5-day lockdown last Thursday. Today, it was extended for an indefinite period.

Additionally, oOh!Media has reportedly decided to sell Junkee Media by the end of the year. The decision may be another weight on the oOh!Media share price lately.

It seems it might get tougher for the oOh!Media share price, Sydney, and Victoria before it gets better.

oOh!Media share price snapshot

The company’s poor performance over the past month has pushed the oOh!Media share price into the ASX red.

It’s currently 8.7% lower than it was at the start of 2021. However, it has gained 81.4% since this time last year.

The company has a market capitalisation of around $906 million, with approximately 598 million shares outstanding.

The post Why the oOh!Media (ASX:OML) share price has dropped 18% in a month appeared first on The Motley Fool Australia.

More reading

• The oOh!Media (ASX:OML) share price is falling today. Here’s why
• Pssst… here’s a cheap COVID-recovery ASX share
• COVID-19 lockdown hits oOh!Media (ASX:OML) share price

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. 

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended oOh!Media 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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The Fortescue Metals Group Limited (ASX: FMG) share price has been a very impressive performer over the last 12 months.

Since this time in 2020, the iron ore producer’s shares have risen by an impressive 55%.

The good news is that despite the strong rise in the Fortescue share price, analysts still believe investors will be rewarded with incredibly generous dividends in the near term.

The Fortescue dividend

One leading broker that believes the Fortescue dividend will be enormous in the near term is Bell Potter.

According to a note out of the broker, its analysts note that the iron ore price has remained stronger than expected. As a result, it has revised its iron ore forecasts upwards and adjusted its earnings and dividend estimates accordingly.

Bell Potter said: “Our FY21 dividend increases 1.3% to A409cps, inclusive of a fully franked final dividend payment of A262cps (from A257cps), a 10.2% yield on its own. Our forecast prospective 12-month dividend payouts lift 5.7% to A460cps (from A435cps) as 1HFY22 captures our higher iron ore price forecast, for an interim payment of A198cps and forecast 17.9% fully franked yield.”

However, despite this sizeable yield, Bell Potter is only recommending Fortescue as a hold with a $24.06 price target.

Is anyone more positive on the Fortescue share price?

One leading broker that is more positive on the Fortescue share price is Macquarie. Its analysts have an outperform rating and $27.00 price target on its shares at present.

The broker is forecasting fully franked dividends of $3.45 per share in FY 2021 and then $2.45 per share in FY 2022.

Based on the latest Fortescue share price of $25.42, this will mean yields of 13.6% and 9.6%, respectively, over the next two years. Macquarie believes current spot iron ore prices pose significant upside risk to earnings and dividend estimates.

The post How big will the Fortescue (ASX:FMG) dividend be over the next 12 months? appeared first on The Motley Fool Australia.

More reading

• ASX 200 Weekly Wrap: ASX shakes off lockdowns to rise higher
• July’s been a great month so far for the Fortescue Metals (ASX:FMG) share price
• Guess which sector this week’s top performing ASX 200 shares all come from
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• These 2 ASX dividend shares are offering trailing yields of 10% 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. 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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