S&P/ASX 200 Index (ASX: XJO) has repeatedly smashed records for all-time highs in the past month.

But one expert warned investors to stop thinking that this is normal.

“We always think the booms are normal. They aren’t,” said Marcus Today director Marcus Padley.

“What we are seeing now is a seemingly anomalous/illogical/inappropriate stock market boom. It is a moment, part of the cycle, but let’s not pretend that making money this easily, that the ASX 200 going up 73% in a straight line, is normal.”

Padley has been a stockbroker since 1982, and always has a rough boom-bust cycle in his mind.

“I know the industry has good periods (usually), boom periods (occasionally), and terrible periods — once every 3 years there’s a standard 10-15% correction and once a decade a crash,” he wrote on his blog.

“At the moment we think that this bull market is normal, but it’s not — it’s great.”

So what will turn the boom into bust?

The unfortunate thing is that the share market boom can come crashing down from a very minor event as much as it can from a major catastrophe.

This is because booms end due to market sentiment. That is, emotions, not facts.

“When the herd turns, it turns, and it can do so without planning or logic. It could happen for the most subtle of reasons, or the most obvious, so let us not sit complacently by,” Padley said.

“We all have to recognise that we are in the hands of an animal and it is not driven by logic or science. All we can do is watch for it and react to it.”

How do we prepare for the market turn?

Padley’s strategy is to stay invested and only react after the share market has actually hit the ceiling.

“Sell early and you and I could miss an infinite upside. Sell when the top has started, not before, and make decisions based on how much downside we can take,” he said.

“‘But what if it crashes?’ I hear you ask. The market very rarely gaps down without warning. We just have to hope we are attuned to the signs and do something about the sell-off before it turns into mainstream panic.”

For now, he advised investors to not fear the end of the boom too much.

“This could go on for years… Turn on our screens every day and continue to make decisions based on all the things that happen in fact, rather than making decisions on all the things we can imagine but cannot possibly know.”

In the meantime, he’s looking forward to the occasional correction, so that he can buy up discounted shares.

And once we’re in the bust phase? Same as waiting for the top, keep your monitor on to see when the bottom arrives.

And be prepared to act.

“You’ll need a watchlist of stocks you want to buy, and you might as well start that now. It is the same as the list of stocks you wish you had bought already but didn’t.”

The post Warning: This is when the share market will turn appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 rises, Harvey Norman falls, Mesoblast sinks
• 2 excellent ASX 200 shares named as buys for September
• These 3 ASX 200 shares are the most traded this Tuesday
• Here are the top 10 ASX 200 shares on Tuesday

Motley Fool contributor Tony Yoo 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 Telstra Corporation Ltd (ASX: TLS) share price has rebounded strongly in the past 12 months. Shares in the Aussie telco have surged 35.7% higher over the period to Tuesday’s closing price of $3.84 per share.

That’s better than the 26.6% gains from the S&P/ASX 200 Index (ASX: XJO) over the same period.

Why the Telstra share price has beaten the ASX 200 in the last year

2021 has been a strong year after a disappointing run for shareholders in recent years. Telstra has long promised a turnaround of operations and a return to growth which hasn’t really been seen since the arrival of NBN Co.

However, the telco appears to be finally turning things around if its full-year results are anything to go by.

The Telstra share price climbed higher following the result despite the company reporting a 9.7% decline in underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to $6.7 billion.

The key is looking at the growth Telstra expects to see in FY22. The Aussie telco is forecasting underlying EBITDA of $7 billion to $7.3 billion in the current financial year with hopes of $7.5 billion to $8.5 billion in FY23.

A continued focus on cost control, as well as easing impacts from NBN, have things looking brighter for Telstra.

There’s also the reduced threat of new market entrants as a result of the recent merger to create TPG Telecom Ltd (ASX: TPG) as a third, large-scale telco.

These factors appear to have helped boost the Telstra share price higher in 2021. On the flipside, the ASX 200 has had some big-name shares weighing on growth.

Some of the biggest names within the index in previous years have fallen heavily in 2021. Among them are energy giants like AGL Energy Limited (ASX: AGL), currently at an 18-year low, AMP Ltd (ASX: AMP) and A2 Milk Company Ltd (ASX: A2M).

That, combined with signs of growth for the Aussie telco, has enabled the Telstra share price to outperform the benchmark index in the past 12 months.

Foolish takeaway

The Telstra share price is now up 35.7% in the past 12 months and outperforming many of its ASX 200 peers. Investors will be hoping that the promised growth is delivered upon in the years to come.

The post Why the Telstra (ASX:TLS) share price has beaten the ASX 200 in the last year appeared first on The Motley Fool Australia.

More reading

• Top broker names 3 ASX 200 shares to buy
• ASX 200 Weekly Wrap: A mixed bag of earnings dominates ASX
• It hasn’t been a great week for the Telstra (ASX:TLS) share price
• Here are the 3 most traded ASX 200 shares today
• Telstra (ASX:TLS) and this dividend share have been named as buys

Motley Fool contributor Ken Hall 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 Australia has recommended A2 Milk and TPG Telecom 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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How exactly does one value the Afterpay Ltd (ASX: APT) share price? That’s a question that has vexed ASX investors for years now. This ‘guessing’ has resulted in Afterpay’s share price (or valuation) being infamously volatile.

It’s easy to forget at today’s pricing, but in March last year, Afterpay shares got down to a price of roughly $8 a share. Less than a year later, the company hit a share price of $160.05, giving investors a gain of more than 1,100% in the process.

As is evident, exploiting how other investors (aka ‘the market’) value a company at a particular point can be highly lucrative if you have a better understanding of what something is worth. Of course, it’s that ‘understanding’ that is the hard part, or we’d all be billionaires.

Put oversimply, investors may have assumed at the onset of the coronavirus pandemic last year that Afterpay was worth very little, seeing as the country was about to face a recession.

But when it became apparent that the coronavirus wouldn’t be bringing widespread economic destruction with it (the awful economic costs of lockdown notwithstanding), investors decided to quickly revalue the Afterpay share price.

As the legendary investor, Benjamin Graham once said, ‘The share market is a voting machine in the short run, and a weighing machine in the long run’.

P/E ratio? Computer says no

So how does one ‘weigh’ the value of Afterpay? we’ve already established that this is a difficult task. But why? Well, the most common way investors tend to value a share is by using the price-to-earnings (P/E) ratio. By comparing each dollar a company makes to its share price, we can easily compare different companies just based on their respective profitabilities.

This P/E method works very well with companies with established cash flows and mature businesses. For example, we can look at Commonwealth Bank of Australia‘s (ASX: CBA) current P/E ratio of 21.3 and say that investors are valuing each CBA share at a higher rate than those of its rival Australia and New Zealand Banking Group Ltd (ASX: ANZ). ANZ only has a P/E ratio of 16.9.

However, that doesn’t work so well with Afterpay. Why? Well, because Afterpay doesn’t officially make any money yet. Sure, it brings in a seemingly ever-expanding pile of revenue. But in its earnings report for FY21 which Afterpay released last week, the company reported a statutory loss of $159.4 million. It’s hard to rate Afterpay’s earnings against its share price when it doesn’t officially have any to speak of just yet.

That’s why you won’t see a P/E ratio for Afterpay floating around.

So the P/E is out, what else can we use to value this buy now, pay later (BNPL) pioneer Afterpay?

How exactly do investors value the Afterpay share price?

Well, there is another metric that some investors like to use for companies facing this predicament. That would be the price-to-sales (P/S) ratio. The P/S ratio works similarly to the P/E ratio, but uses ‘sales’, or revenues, instead of earnings.

So Afterpay does have a P/S ratio, it’s currently 46.8. Using this metric, we can see that Afterpay, for example, is being priced with a far higher P/S ratio than its BNPL rival Zip Co Ltd (ASX: Z1P). Zip presently has a P/S ratio of 9.53.

Just for comparison, Woolworths Group Ltd (ASX: WOW) currently has a P/S ratio of 0.95.

The P/S ratio is no silver bullet when it comes to valuing companies like Afterpay. But it can give a very useful indication of exactly what you’re paying for when you buy Aferpay shares today.

But now Square Inc (NYSE: SQ) has decided to buy out all Afterpay shares for the price of 0.375 shares of Square per Afterpay share, there might be an even easier way to value this company.

At yesterday’s closing Afterpay share price of $134.59, the company has a market capitalisation of $38.32 billion.

The post How do you value the Afterpay (ASX:APT) share price? appeared first on The Motley Fool Australia.

More reading

• Why you should NOT use stop-loss orders
• Afterpay (ASX:APT) share price rises amid Amazon’s BNPL move
• ASX 200 Weekly Wrap: A mixed bag of earnings dominates ASX
• Afterpay (ASX:APT) share price slips as CEO spruiks company’s new direction
• How does Afterpay (ASX:APT) earnings result compare to Zip?

Motley Fool contributor Sebastian Bowen owns shares of Square. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, Square, and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T 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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The National Australia Bank Ltd (ASX: NAB) dividend is worth talking about. Australia’s third largest lender is currently trading on a forward dividend per share of 120 cents.

That comes after a 60 cent per share interim dividend announced in May 2021 after a conservative 2020 due to COVID-19 impacts and regulatory restrictions.

This NAB payout estimate means the bank’s shares are trading on a 3.26% dividend yield right now. So, how does that compare to other ASX banking shares?

How does the NAB dividend compare to its sector?

Let’s start with the largest of the Aussie banks — Commonwealth Bank of Australia (ASX: CBA). CBA recently announced a $2.00 per share final dividend for the year ended 30 June 2021 (FY21).

The fully-franked distribution gives CBA shares a 3.50% forward dividend yield right now. That’s based on Tuesday’s closing price of $100.12 per share and assumes an unchanged $1.50 per share interim payment.

Westpac Banking Corp (ASX: WBC) announced a fully-franked, 58 cents per share interim dividend on 3 May. The group’s shares are currently trading on a forward 89 cents dividend (assuming December’s dividend remains unchanged) for a 3.42% dividend yield.

The NAB dividend also trails the smallest of the Big Four banks by market capitalisation — Australia and New Zealand Banking Group Ltd (ASX: ANZ).

ANZ announced a 70 cents per share interim dividend in May 2020 and is trading on an assumed 1.37 cents per share forward dividend.

That gives the Aussie bank a 3.62% forward dividend yield at the time of writing.

Foolish takeaway

So, all of NAB’s peers have higher dividend yields — what does it all mean?

For one thing, NAB hasn’t announced its full-year results yet and November’s update will be one to watch. There’s also the $2.5 billion share buyback program announced in July to return surplus capital to investors.

That means the NAB dividend isn’t the only way that investors can gain returns from their shares at the moment.

The post How does the NAB dividend compare to its sector? appeared first on The Motley Fool Australia.

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• Australia’s rising delta recession risk could hit these ASX 200 shares badly

Motley Fool contributor Ken Hall 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 Crown Resorts Ltd (ASX: CWN) share price has gone through some tough months during the calendar year. Since reaching a 52-week high of $13.32 in May, its shares have fallen 30% on the back of regulatory enquiries and COVID-19 impacts.

On the other hand, Star Entertainment Group Ltd (ASX: SGR) has also faced challenging market conditions from snap lockdowns. Its share price hasn’t suffered the same fate though, surging since the release of the company’s full year results.

Let’s see if there are any similarities between the two companies’ reporting numbers.

A recap on the Crown Resorts earnings result

Crown posted its full-year result for the 2021 financial year on Monday, revealing expected losses across the board.

Here’s a summary of the financial details that Crown posted for the full year ending 30 June 2021.

• Statutory revenue of $1,536.8 million, down 31.3% on the prior corresponding period;
• Reported earnings before interest, taxes, depreciation and amortisation (EBITDA) of $114.1 million, down 77.4%;
• Reported net loss after tax of $261.6 million, down 429.1%; and
• No final dividend declared.

The weak result came as Crown faced a challenging year, with severe restrictions weighing down on business performance. The Royal Commission and multiple inquiries have also led the company into uncertain times.

At Tuesday’s market close, Crown shares finished the day flat at $9.31.

How does this compare to Star Entertainment?

Star Entertainment revealed its own numbers on August 19, highlighting the struggling casino and gaming market. Here’s a peek at the company’s performance for the 12 months ending 30 June 2021:

• Gross revenue of $1,561.1 million, down 20.9% on the prior corresponding period;
• Normalised EBITDA of $429.7 million, unchanged;
• Normalised net profit after tax of $116.4 million, down 5.2%; and
• No final dividend declared.

Star Entertainment also took a hit due to severe disruptions throughout the year. This came from a reduction in operational capacity, particularly in Sydney and Brisbane.

Nonetheless, the group continued to execute its strategy in firming up its balance sheet for a post-COVID-19 world. Star Entertainment also highlighted that it had a number of valuable long-term licences in attractive locations, underscoring its competitive portfolio.

Investors reacted positively to the news, sending the company’s shares within sight of breaking its 52-week high of $4.30. At yesterday’s closing bell, the Star Entertainment share price finished 0.99% higher at $4.08.

Comparing the earnings reports, it’s evident that COVID-19 has caused revenue losses of between 20% to 30% for both companies. However, Star Entertainment has fared better on the bottom line, managing its operating costs and capital expenditure.

Crown share price snapshot

Investors would be disappointed by the 12-month return of the Crown share price, up just 3%. Year to date has fared no better, down 3% following a sharp sell-off during the May to July.

On valuation grounds, Crown presides a market capitalisation of roughly $6.3 billion, with more than 677 million shares outstanding.

The post How does the Crown Resorts (ASX:CWN) earnings result compare to Star Entertainment (ASX:SGR)? appeared first on The Motley Fool Australia.

More reading

• Crown Resorts (ASX:CWN) share price slumps amid dividend suspension
• Crown (ASX:CWN) share price wobbles as profit slumps 429%
• The Crown (ASX:CWN) share price lifted last time the company reported
• Crown (ASX:CWN) share price lifts as controversial chair retires
• 10 ASX shares we’re overweight in right now: fund

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 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 reporting season can make or break the fortunes of ASX shares.

Not only is the company’s performance for the 2021 financial year important, but the outlook for the current and future years will also set the tone for the stock price.

Here are 3 August results season winners that Shaw and Partners senior investment advisor Adam Dawes picked out this week:

Technology and market dominance will keep the pizzas hot

Shares for pizza chain Domino’s Pizza Enterprises Ltd (ASX: DMP) went gangbusters in August.

The stock has gained more than 30% in the past month after it pleased the market with a boost in sales, earnings, profit and dividend.

And Dawes reckons the upward movement has plenty of legs.

“Domino’s Pizzas has certainly done really well,” he told Switzer TV Investing. 

“Mainly because everyone’s stuck at home… People are sick and tired of cooking, and they may as well keep the kids happy by buying a couple of pizzas.” 

The business has strategically placed itself as a “no contact” and low-cost takeaway option, according to Dawes.

But if it’s such a COVID beneficiary, wouldn’t Domino’s shares plummet once Australia’s vaccination coverage is up and society re-opens?

After all, this ASX share has already more than doubled in the past 5 years.

While Dawes acknowledged that as a risk, he pointed out a couple of positive forces to cancel out any sales slowdown from Australians getting out of the house more.

“These guys are very technology-driven and I think that’s what’s separated them from a lot of the other pizza delivery people,” he said.

“Also, it’s the store dominance that they’ve got — they’re around most corners. They actually place themselves quite comfortably in lower socio-economic areas, also, because their pizzas are quite cheap.”

Wilson Asset Management portfolio managers Catriona Burns, Matthew Haupt, and Oscar Oberg last week were also glowing about Domino’s prospects.

“We remain positive on Domino’s Pizza, with key growth markets such as Japan, Germany, and France reaching an inflection point underpinning a robust organic growth profile, while latent capacity remains for further earnings accretive acquisitions.”

‘Standout business’

Construction materials business James Hardie Industries plc (ASX: JHX) has seen its shares rise by more than 14% over the past month, breaking all-time highs.

Hinting at its history of making asbestos, Dawes acknowledged James Hardie has “a chequered past”. But the August results revealed a booming US arm that was going too well to ignore.

“An upgrade that came from the US building and manufacturing business there has absolutely kicked a lot of goals,” he said.

“We’ve seen other companies like Boral Limited (ASX: BLD) try to go overseas and come back with their tail between their legs.”

Dawes noted that several Australia-only companies in the construction and materials sector had downgraded this August.

“So I think James Hardie is a really standout business, especially for that US growth and especially for the ability for them to run their business.”

Great results, ESG-proof and excellent business

Stocks for small-cap technology company Calix Ltd (ASX: CXL) have risen more than 31% in value in the past month.

According to Dawes, the business’ flagship technology removes the heat out of cement manufacturing to recycle into energy.

He admitted this ASX share is a riskier bet than James Hardie and Domino’s — but the $630 million business has much going for it.

“We’ve got a ‘buy’ [rating] on it at Shaw and Partners,” said Dawes.

“The ESG [environmental, social and governance] theme plus the royalties they’ll get from some of these European operations, I think, is a fantastic one… It’s a great business.”

It’s not just in August that Calix shares have had a good time. They’ve more than quadrupled in value in the 12 months.

The post 3 tempting ASX shares that rocketed after their results appeared first on The Motley Fool Australia.

More reading

• Why the Domino’s (ASX:DMP) share price is up 27% in August
• NIB and Ampol share prices fall, new record for Domino’s. Scott Phillips on Nine’s Late News
• 10 ASX shares we’re overweight in right now: fund
• 2 ASX shares shining this results season
• Revealed: The biggest shocker from results season

Motley Fool contributor Tony Yoo 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 Dominos Pizza Enterprises 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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With the end of winter and yet another earnings season now firmly behind us, we asked our Foolish contributors to compile a list of some of the ASX shares experts are saying to buy in September.

Bernd Struben: Smartgroup Corporation Ltd (ASX: SIQ)

Smartgroup Corporation is a salary packaging and fleet management solutions provider.

Not-for-profit organisations, healthcare, education and the public service sectors make up roughly 96% of Smartgroup’s salary packaging customers. The company is well established in Australia and trades at a relatively modest price-to-earnings (P/E) ratio of 20.5 times.

It delivered strong half-year results, with a 53% boost in net profit after tax (NPAT). Smartgroup also declared a 7.5 cent interim dividend, fully franked. That brings its trailing dividend yield to around 6.2% based on the current share price. The company has a market capitalisation of just under $1.1 billion.

The Smartgroup share price has climbed by around 16% year to date and around 38% over the past twelve months.

Motley Fool contributor Bernd Struben does not own shares of Smartgroup Corporation Ltd.

Sebastian Bowen: VanEck Video Gaming and Esports ETF (ASX: ESPO)

Video games and e-sports are sectors without too much presence on our own S&P/ASX 200 Index (ASX: XJO). And yet these are two of the fastest-growing industries in these modern times. Luckily, this ASX exchange-traded fund (ETF) gives investors an easy way to access some of the companies that are benefitting the most from the growth of gaming and e-sports.

Some of its largest holdings include names like Activision Blizzard, Tencent Holdings, Nintendo Co and Nvidia Corporation. The VanEck Video Gaming and Esports ETF charges a management fee of 0.55% per annum. It has delivered a return of almost 12% since its inception in September last year.

Motley Fool contributor Sebastian Bowen does not own shares of the VanEck Vectors Video Gaming and Esports ETF.

Mitchell Lawler: Jumbo Interactive Ltd (ASX: JIN)

Jumbo Interactive is an online lottery operator with roots dating back to 1995. Since then, it has grown to become an international online lottery retailer, processing transactional volume of $487 million in FY21.

Following its recent full-year results release, the Jumbo share price has taken a ride to the downside. This is despite growth across revenue and underlying profits as well as the announcement of another acquisition.

The latest acquisition opens the Canadian lottery market to this ASX share. Based on its full-year earnings, Jumbo is currently trading on a P/E ratio of around 35 times.

The Jumbo Interactive share price has climbed almost 10% year to date and around 15% over the past twelve months. That’s despite falling by around 14% in the past week.

Motley Fool contributor Mitchell Lawler owns shares of Jumbo Interactive Ltd.

James Mickleboro: NextDC Ltd (ASX: NXT)

NextDC is a leading data centre operator that has been benefitting greatly from the cloud computing boom. Thanks to the ever-increasing amount of data being generated by consumers and businesses, demand for capacity in its data centres has been increasing strongly.

This led to NextDC reporting a 23% increase in revenue to $246.1 million and a 29% lift in earnings before interest, taxes, depreciation and amortisation (EBITDA) to $134.5 million in FY21. Pleasingly, more of the same is expected in FY22, with management guiding to EBITDA growth of 19% to 23%.

Goldman Sachs remains very positive on this ASX share. It currently has a conviction ‘buy’ rating and a $14.40 price target for NextDC shares.

At Tuesday’s close, the NextDC share price was trading at $13.24.

Motley Fool contributor James Mickleboro owns shares of NextDC Ltd.

Tristan Harrison: VanEck Morningstar Wide Moat ETF (ASX: MOAT)

This is an ETF invested in businesses that are deemed to have strong economic moats which are expected to endure for many years into the future.

These businesses are selected by analysts from Morningstar. Companies only make it into the portfolio if the analysts believe they are trading at an attractive price compared to their estimates of fair value.

At the latest disclosure, some of the biggest positions held by the Wide Moat ETF were Salesforce.com, Corteva, Dominion Energy, Emerson Electric, Facebook, General Dynamics, Gilead Sciences and Alphabet (Google).

The Wide Moat ETF share price has rallied by around 30% so far in 2021.

Motley Fool contributor Tristan Harrison does not own shares of the VanEck Morningstar Wide Moat ETF.

Brendon Lau: NextDC Ltd (ASX: NXT)

The market didn’t react well to the data centre operator’s latest profit results. The NextDC share price fell by 5.4% last Friday on the day the company released its FY21 earnings. But most brokers are sticking to their ‘buy’ recommendation on the shares.

While NextDC’s FY21 revenue was at the low end of guidance, Macquarie Group Ltd (ASX: MQG) believes the company’s structural growth story remains intact.

The broker sees further potential upside for this ASX share from enterprise and government market segments, while development activity continues to accelerate. Macquarie reiterated its ‘outperform’ recommendation and its 12-month price target on the stock is $14.05. This represents an upside of around 6% on the current NextDC share price.

Motley Fool contributor Brendon Lau does not own shares of NextDC Ltd.

The post Top ASX shares to buy in September 2021 appeared first on The Motley Fool Australia.

More reading

• 2 ASX tech shares that could be buys in September 2021
• Have money to invest? 2 ASX shares that could be buys
• Leading brokers name 3 ASX shares to buy today
• ASX 200 flat, Wesfarmers drops, Nextdc declines
• Why Integral Diagnostics, Mayne Pharma, NEXTDC, & Wesfarmers are dropping

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Activision Blizzard, Alphabet (A shares), Alphabet (C shares), Facebook, Jumbo Interactive Limited, Nvidia, and Salesforce.com. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Dominion Energy, Inc and Gilead Sciences. The Motley Fool Australia owns shares of and has recommended Jumbo Interactive Limited, Macquarie Group Limited, and SMARTGROUP DEF SET. The Motley Fool Australia has recommended Activision Blizzard, Alphabet (A shares), Alphabet (C shares), Facebook, Nvidia, Salesforce.com, VanEck Vectors ETF Trust – VanEck Vectors Video Gaming and eSports ETF, and VanEck Vectors Morningstar Wide Moat 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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If you’re in the process of building an income portfolio, then you might want to look at the shares listed below.

Here’s why these ASX dividend shares could be in the buy zone right now:

Adairs Ltd (ASX: ADH)

The first ASX dividend share to look at is this leading retailer of homewares and home furnishings.

Adairs has been a fantastic performer over the last 12 months, leading to the recent release of a very strong FY 2021 result. For example, Adairs reported a 28.5% increase in sales to $499.8 million and the almost doubling of its EBIT to $109.1 million.

Analysts at Morgans remain positive on the company. In response to its full year results, the broker has upgraded its shares to an add rating with a $4.20 price target.

Morgans is also expecting generous dividends from the retailer in the next couple of years. It has pencilled in fully franked dividends of 22 cents in FY 2022 and 27 cents in FY 2023.

Based on the current Adairs share price of $4.01, this will mean yields of 5.5% and 6.7%, respectively

Westpac Banking Corp (ASX: WBC)

Another ASX dividend share to consider is Australia’s oldest bank. It has also been a positive performer over the last 12 months after rebounding strongly from the pandemic.

For example, during the first half, Westpac reported cash earnings of $3,537 million. This was a 256% increase over the prior corresponding period and a 119% increase over the second half of FY 2020.

One broker that has been impressed with its recovery is Goldman Sachs. Its analysts currently have a buy rating and $29.93 price target on the bank’s shares.

Goldman is also expecting generous dividends of 116 cents in FY 2021 and 128 cents in FY 2022. Based on the latest Westpac share price of $25.82, this implies yields of 4.5% and 5%, respectively.

In addition, the broker has tipped the bank to return $5 billion to shareholders in the near future due to its surplus capital and franking credits.

The post 2 buy-rated ASX dividend shares with big fully franked yields appeared first on The Motley Fool Australia.

More reading

• Australia’s rising delta recession risk could hit these ASX 200 shares badly
• ASX 200 Weekly Wrap: A mixed bag of earnings dominates ASX
• How has the Westpac (ASX:WBC) share price performed against the banking sector in August?
• 2 excellent ASX dividend shares analysts rate as buys
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Motley Fool contributor James Mickleboro owns shares of Westpac Banking Corporation. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ADAIRS FPO. The Motley Fool Australia owns shares of 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 Tuesday the S&P/ASX 200 Index (ASX: XJO) was on form again and pushed higher. The benchmark index rose 0.4% to 7,534.9 points.

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

ASX 200 expected to fall

The Australian share market is expected to end its winning streak on Wednesday. According to the latest SPI futures, the ASX 200 is expected to open the day 37 points or 0.5% lower this morning. This follows a subdued night of trade on Wall Street, which saw the Dow Jones fall 0.1%, the S&P 500 drop 0.1%, and the Nasdaq edge 0.05% lower.

PointsBet shares rated as a buy

The PointsBet Holdings Ltd (ASX: PBH) share price could be in the buy zone according to analysts at Goldman Sachs. This morning the broker reiterated its buy rating but trimmed its price target slightly to $14.75 following the release of its full year results. Goldman believes PointsBet is well-placed to achieve a 10% share in the US states it operates in.

Oil prices fall

It could be a tough day for energy producers such as Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) after oil prices softened. According to Bloomberg, the WTI crude oil price is down 1% to US$68.50 a barrel and the Brent crude oil price is down 0.6% to US$72.96 a barrel. Oil prices fell after the US urged OPEC to pump more oil.

Shares going ex-dividend

A number of ASX 200 shares are going ex-dividend today and could trade lower this morning. This includes dairy company Bega Cheese Ltd (ASX: BGA), drinks business Endeavour Group Ltd (ASX: EDV), financial technology company IRESS Ltd (ASX: IRE), wine giant Treasury Wine Estates Ltd (ASX: TWE), and conglomerate Wesfarmers Ltd (ASX: WES).

Gold price edges higher

Gold miners Evolution Mining Ltd (ASX: EVN) and Newcrest Mining Limited (ASX: NCM) could have a decent day on Wednesday after the gold price edged higher. According to CNBC, the spot gold price is up 0.3% to US$1,817.3 an ounce. A weaker US dollar supported the precious metal’s gain.

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

More reading

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• 2 excellent ASX 200 shares named as buys for September
• ASX reporting wrap-up: Harvey Norman, Cettire, PointsBet
• These 3 ASX 200 shares are the most traded this Tuesday
• Here are the top 10 ASX 200 shares on Tuesday

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 Pointsbet Holdings Ltd. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates Limited and Wesfarmers Limited. 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) went up by 0.4% today to 7,535 points.

Here are some of the highlights from the ASX:

Harvey Norman Holdings Limited (ASX: HVN)

Harvey Norman reported its FY21 result today. It said that total aggregated company operated and franchisee sales revenue increased by 15.3% to $9.5 billion.

The earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 54.2% to $1.46 billion. Reported profit before tax rose 78.8% to $1.18 billion, though excluding net property revaluations it increased 66.4% to $1.04 billion.

Reported net profit increased 75.1% to $841 million and excluding net property revaluations it increased 63% to $743.1 million.

Harvey Norman decided to pay an annual dividend of 35 cents per share, which was a 45.8% increase over FY20.

In the first few weeks of FY22, the ASX 200 share has seen growth across almost all countries (except Malaysia) compared to FY19. However, the Australian franchisees, New Zealand, Northern Ireland and Malaysia have seen aggregated sales decline in local currency terms compared to FY20.

Harvey Norman also said that subsequent to the year end, in August 2021, all of the wages support and assistance received in Australia totalling $6.02 million was repaid to the federal government via the ATO.  

Webjet Limited (ASX: WEB)

The Webjet share price increased by 3.5% after the ASX 200 travel share gave a trading update.

It announced that it’s going to be cashflow positive for the first half of FY22 (excluding investing and debt repayments) and that the WebBeds business has been profitable since July 2021.

Webjet managing director John Guscic explained further:

We have seen strong demand as travel restrictions ease in North America and Europe, suggesting significant upside as more international markets reopen.

Webjet OTA (online travel agency) was profitable for April to July but has been subsequently impacted by the current lockdowns in Australia and New Zealand. Online Republic was profitable in April and May, but like the Webjet OTA, has been impacted by lockdowns. However, we are confident that both businesses will return to profitability as soon as the domestic Australia and New Zealand markets reopen.

The company believes it has the potential to grow market share by expanding into new market segments and benefiting from the shift to online purchasing of travel. Webjet believes it will have greater profitability once conditions normalise.

Mesoblast Limited (ASX: MSB)

The Mesoblast share price dropped around 16% after the business released its FY21 result. It was the worst performer in the ASX 200.

In terms of financial highlights, the company said it had US$136.9 million of cash on hand at 30 June 2021.

Revenue from TEMCELL royalties increased by 10% to US$7.2 million.

It made a loss after tax for FY21 of US$98.8 million, compared to US$77.9 million last year.

Mesoblast also said that it met with the US FDA, which told Mesoblast that an additional clinical study in COVID acute respiratory distress syndrome would be required for remestemcel-L which could provide a dataset in conjunction with the recently completed 222 patient clinical study that might be sufficient to support an emergency use authorisation.

It also continues to be in discussion with the FDA about remestemcel-L for the treatment of steroid-refractory acute graft versus host disease in children. This may include a resubmission with a six month review.

 

The post ASX 200 rises, Harvey Norman falls, Mesoblast sinks appeared first on The Motley Fool Australia.

More reading

• 2 excellent ASX 200 shares named as buys for September
• ASX reporting wrap-up: Harvey Norman, Cettire, PointsBet
• These 3 ASX 200 shares are the most traded this Tuesday
• Here are the top 10 ASX 200 shares on Tuesday
• Mesoblast (ASX:MSB) share price crashes 16% to 52-week low on cash concerns

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 Webjet Ltd. The Motley Fool Australia has recommended Harvey Norman 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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