If you are nearing retirement, it may be time to start focusing on capital preservation. This means investing in lower risk shares rather than fledgling growth shares.

But which shares might be good options for a retirement portfolio? Listed below are a couple of shares that could be worth considering for a well-balanced retirement portfolio. They are as follows:

Lifestyle Communities Limited (ASX: LIC)

The first ASX share for retirees to look at is Lifestyle Communities. It builds, owns, and operates land lease communities which provide affordable housing options to Australians over 50. Lifestyle Communities’ land lease model allows working, semi-retired, and retired people to downsize their family home to free up equity in retirement whilst enjoying resort style living.

Goldman Sachs is very positive on the company due to strengthening demand for land lease options. This is being driven by the ageing population, with older Australians increasingly looking to enhance retirement by releasing equity from the family home.

According to Goldman’s analysis, it estimates that 2% to 3% of people over 65 are living in a land lease community. However, it believes this could rise to 5% over the medium term. As a result, it believes Lifestyle Communities is well-placed for growth in the coming years.

In light of this, the broker recently retained its conviction buy rating and lifted its price target on the company’s shares to $21.60. This compares to the latest Lifestyle Communities share price of $19.40. Goldman is also forecasting consistent dividend growth over the next few years. Though, due to its strong share price gains in recent years, the yields will be on the low side in the near term.

Suncorp Group Ltd (ASX: SUN)

Another ASX share to consider for a retirement portfolio is Suncorp. It is one of Australia’s leading insurance and banking companies. As well as the eponymous Suncorp brand, it also owns the AAMI, Apia, Bingle, GIO, Shannons, and Vero brands.

It was a positive performer again in FY 2021, delivering a 42.1% jump in cash earnings to $1,064 million. This strong form not only allowed the insurance giant to declare a special dividend, it was also able to announce a $250 million on-market share buyback.

The team at Macquarie responded positively to the news. Following Suncorp’s full year results, the broker retained its outperform rating and lifted its price target to $13.60.

Macquarie is forecasting fully franked dividends of 58 cents per share in FY 2022 and then 66 cents in FY 2023. Based on the current Suncorp share price of $12.45, this will mean 4.7% and 5.3% yields, respectively.

The post 2 excellent ASX shares for a retirement portfolio appeared first on The Motley Fool Australia.

More reading

• Suncorp (ASX:SUN) share price on watch amid $350m capital raising
• How does the IAG (ASX:IAG) earnings result compare to Suncorp?
• 2 high yield ASX dividend shares named as buys
• Why Baby Bunting, Galan Lithium, Suncorp, & Vulcan shares are sinking
• 2 quality ASX shares for a retirement portfolio

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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If you’re looking for blue chips to buy in September, then you may want to look at the ones listed below.

Here’s why the team at Morgans are positive on these ASX 200 shares:

CSL Limited (ASX: CSL)

The first ASX 200 share to look at is CSL. It is one of the world’s leading biotechnology companies, manufacturing and developing a portfolio of leading therapies and vaccines. This includes flu vaccines, immunoglobulins, and countless other plasma-based products. And while COVID-19 is weighing on plasma collections and is expected to lead to a decline in earnings in FY 2022, its long term future looks very positive.

Morgans remains positive on the company despite these headwinds. It currently has an add rating and $324.40 price target on its shares.

ResMed Inc. (ASX: RMD)

Another ASX 200 share to look at is ResMed. It is one of the world’s leading sleep treatment-focused medical device companies. Over the last decade, ResMed has been growing its revenue and earnings at a very strong rate. This has been underpinned by its industry-leading products, growing software business, the increasing awareness of sleep disorders, and its investment in R&D.

Morgans appears confident this positive form will continue over the medium term. It currently has an add rating and $41.34 price target on ResMed’s shares.

Telstra Corporation Ltd (ASX: TLS)

A final ASX 200 share to look at is Telstra. It could be a blue chip to buy thanks to its attractive valuation and the positive progress it is making with its T22 strategy. This strategy is creating a much leaner business and one which is expected to return to growth in the not so distant future. In fact, the company’s CEO, Andy Penn, is targeting mid to high single digit operating earnings growth in FY 2022. He is then targeting further growth in FY 2023.

Morgans currently has an add rating and $4.34 price target on the company’s shares. It also expects 16 cents per share fully franked dividends in FY 2022 and FY 2023.

The post Top broker names 3 ASX 200 shares to buy appeared first on The Motley Fool Australia.

More reading

• 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
• 2 ASX 200 shares that are rated as buys
• August has been a great month so far for the CSL (ASX:CSL) share price
• Here are the 3 most traded ASX 200 shares today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia owns shares of and has recommended Telstra Corporation Limited. The Motley Fool Australia has recommended ResMed Inc. 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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Motley Fool Australia Chief Investment Officer Scott Phillips joined Peter Overton for Nine’s Late News on Sunday night to discuss the big week of economic news ahead, with GDP figures out this week and worse news expected in the months ahead.

The post A big week ahead as GDP released with worse on the way. Scott Phillips on Nine’s Late News appeared first on The Motley Fool Australia.

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• The investment metric you won’t find on the balance sheet
• Why this leading broker sees value in the Webjet (ASX:WEB) share price
• ASX 200 rises, Altium sinks, Fortescue climbs
• Poseidon (ASX:POS) share price advances on Share Purchase Plan update
• ASX 200 miners dominate most traded shares on Monday

Motley Fool contributor Scott Phillips 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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I hope you’ll excuse my somewhat less frequent ramblings in this space over the past couple of weeks.

It is, as you might have guessed, a relatively direct result of my somewhat new role as part-time supervisor and sometime problem-solver for my 8yo, who is, like many kids around the country, learning from home at the moment.

I won’t say I have a new appreciation for the work of teachers — my wife is a teacher and trainer, so I have first-hand experience of what she does for her kids — but I certainly have a very new and fuller understanding of just what they do for our kids each day.

And, I should add, with remarkable energy, grace and good humour. (Thank you, Mrs. Rasheed, if you’re reading this.)

Indeed, we have been extraordinarily fortunate with the high quality of all of his teachers, thus far.

We’re fortunate to be financially able to have the choice to send our son to a local independent school, should we choose. And by all reports, the public schools around us are excellent, but when we arrived in the area 8 months out from the beginning of his first year of school, we visited what was to become his current school and were blown away not by the facilities, grounds etc, but by the passion of the principal and the quality — as much as you can know, from a couple of short visits — of the staff.

So we sent him there.

Happily, that early assessment seems to have been spot on.

Across the school — from the four classroom teachers he’s had, to the executive, the support staff, and the rest — we’ve been struck with the common dedication, care and effort they bring to their work. We couldn’t ask for a better group of people with whom to entrust him during school hours.

And it got me to thinking about investing.

(To be frank, as you might know by now, most things do!)

My thoughts turned to both the individuals involved, but also to the staff as a group.

One great person is a wonderful find. A few is fantastic.

But almost all?

That’s more than mere coincidence.

Yes, it could be money. Maybe the teachers at my young bloke’s school are paid more than teachers at similar schools. Maybe the best people simply end up at the place that pays the most.

It’s possible.

It could well be the case.

But I don’t think that’s it.

Even if it attracted those most motivated by the cash, and even if it meant the school had a high quality cohort to choose from, I don’t reckon that’s enough.

Some people will work for the highest bidder.

But most of us want more than that.

We want to be satisfied by the work.

A great workplace.

Supportive managers.

The opportunity for development.

Great colleagues.

In short, a great culture.

It’s not, by itself, enough.

Money matters.

So does purpose.

And fulfilment.

But culture goes a long way.

It is why, as Peter Drucker so famously maintained, ‘Culture eats strategy for breakfast’.

Culture leads to discretionary effort.

It leads to better teamwork, which almost always leads to better work, overall.

It is more likely to attract — and retain — quality people who want to work for the best businesses.

It doesn’t need to be overhauled when the competition introduces a new product or pricing strategy.

And it’s more than a single product, a single team member or a single idea.

Now, I’m the first to admit it’s not the only answer, or an all-encompassing one.

I’m sure there are businesses with bad cultures that have thrived.

I’m sure there are businesses with wonderful cultures that have gone broke.

But whereas most corporate strategies are relatively fixed responses to past-, current and expected future challenges and opportunities, cultures are more like living organisms that change, adapt and grow as they meet their circumstances.

They don’t need expensive capital investment. They don’t need to be pulled out and replaced when they are past their useful lives. They do need to be carefully tended and fed, of course, but the effort there is cumulative and if it goes bad, usually does so slowly, giving an attentive manager plenty of time to recognise, diagnose and fix the problem.

Lastly, for investors, it is a trait that’s not obviously apparent in financial statements or ASX releases. And at a time when there have never been more computers trying to compete away the more easily measurable traits of listed businesses, being able to recognise a great culture can be a great advantage for us mere mortals.

It is, perhaps one of the more important tasks a CEO can have. And cultures invariably come from the top — good or bad.

It is objectively all-but impossible to measure, but I’m almost certain that if you could rank the companies on the S&P/ASX 200 Index (ASX: XJO) by culture, the top quartile would beat out the bottom group by a margin of two or three times, over the long term.

So, by all means, read the ASX earnings releases this month. Spend time with the financials, and understanding a company’s market, competitors and strategy. But while you’re doing that, look for evidence that might give you some insight into a company’s culture.

I reckon, like schools, ASX-listed companies with a good one have outsized odds of rising to the top.

Fool on!

The post The investment metric you won’t find on the balance sheet appeared first on The Motley Fool Australia.

More reading

• Why this leading broker sees value in the Webjet (ASX:WEB) share price
• ASX 200 rises, Altium sinks, Fortescue climbs
• Poseidon (ASX:POS) share price advances on Share Purchase Plan update
• ASX 200 miners dominate most traded shares on Monday
• Here’s why the IAG (ASX:IAG) share price is up 6% in the last 3 months

Motley Fool contributor Scott Phillips 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 Webjet Limited (ASX: WEB) share price has been a strong performer over the last 12 months.

Since this time in 2020, the online travel agent’s shares have risen a sizeable 48%.

This is despite the Webjet share price trading 13% lower than its March high.

Can the Webjet share price keep rising?

The good news is that the team at Goldman Sachs still sees a lot of value in the Webjet share price.

According to a recent note, the broker has retained its buy rating and $6.40 price target on its shares.

Based on the current Webjet share price of $5.50, this implies potential upside of 16% over the next 12 months.

What did the broker say?

Goldman Sachs has amended its earnings estimates to reflect the current outbreak of COVID-19 across Australia.

While this has resulted in some sizeable downgrades in the near term, the broker remains very positive on its longer term outlook.

Its analysts commented: “While short term headwinds persist, we note that our Buy thesis on Webjet remains based on the longer term positives of its exposure to a subsegment within travel which is likely to benefit beyond the recovery from the pandemic and improved operating margins.”

“We see no changes to this outlook. In the meanwhile, we note that the balance sheet remains strong following the issue of convertible notes in April and we expect the group to maintain a net cash position despite the short term headwinds,” it added.

What about its valuation?

Although Goldman notes that the Webjet share price looks expensive based on current multiples, it highlights that its valuation looks much more reasonable on longer term forecasts.

It explained: “Valuation stretched on short term earnings, but outlook remains strong. Using Jan 2020 as a pre-pandemic peak reference period, the absolute enterprise valuation of WEB is up 9.7%. On an FY24 P/E basis, WEB trades at a 19.8x multiple, in line with the pre-pandemic 3 year average while at the same time ASX index multiples have expanded from 20.2x to 29.9x. We expect the group to emerge a more efficient organization with a broader addressable market (due to the faster growth of OTAs) at the other end of the pandemic.”

Overall, it feels this makes Webjet a great option for investors today.

The post Why this leading broker sees value in the Webjet (ASX:WEB) share price appeared first on The Motley Fool Australia.

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• What could Sydney Airport’s results mean for Webjet (ASX:WEB) shares?

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 Webjet 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 Poseidon Nickel Ltd (ASX: POS) share price finished higher at the end of today’s market session. This comes after the mining company provided an update on its Share Purchase Plan (SPP) in late afternoon trade.

At the closing bell, Poseidon shares were up 4.35% to 12 cents apiece. In comparison, the All Ordinaries Index (ASX: XAO) finished 0.37% higher to 7,788 points.

What did Poseidon announce?

In a statement to the ASX, Poseidon advised it has completed its SPP, receiving overwhelming support from retail investors.

Originally, the company was targeting to raise $3 million following its successful $22 million private placement. However, after collecting approximately $13.5 million in valid applications, the board of directors increased the offer to $6 million. A scale-back of applications on a pro-rata basis based on amounts applied is being undertaken.

The SPP offered the same terms as the private placement, with its shares priced at 11 cents apiece. This equates to about 54.5 million new ordinary shares under the SPP.

It’s expected that the newly created shares will be issued and allotted this Wednesday.

Poseidon’s managing director, Peter Harold commented:

The funds raised will support the Company on our strategy to build high-grade nickel inventory at our Black Swan project and progress the Black Swan project toward a potential recommencement of operations in 2022.

The funds raised will be used to continue exploration activities at Golden Swan and across the Southern Terrace, undertake drilling to convert additional Silver Swan mineral resources to ore reserves, further test for extensions to the known Silver Swan mineralisation and complete mining and production studies at Black Swan.

Funds will also be allocated to reviewing the exploration potential of our Lake Johnston and Windarra nickel projects.

About the Poseidon share price

Over the past 12 months, Poseidon shares have rallied almost 100% higher, reflecting positive investor sentiment. Since the start of 2021, the company’s share price is up around 80% alone.

On valuation grounds, Poseidon presides a market capitalisation of roughly $346 million, with massive 3 billion shares outstanding.

The post Poseidon (ASX:POS) share price advances on Share Purchase Plan update appeared first on The Motley Fool Australia.

More reading

• Why the Poseidon (ASX:POS) share price surged 9% today
• The Poseidon Nickel (ASX:POS) share price has sunk 10% today. Here’s why

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 S&P/ASX 200 Index (ASX: XJO) went up by 0.2% to 7,505 points.

Here are some of the highlights from the ASX:

Altium Limited (ASX: ALU)

The Altium share price dropped more than 14% today after delivering its FY21 result.

The ASX 200 share, which specialises in electronic PCB software, said it wasn’t able to release its audited accounts because of an audit delay which had been amplified by COVID-19 in NSW. It expects to release its audited result within a week. It’s not expecting there to be any material difference between the two sets of financial statements.

Altium said that it delivered revenue growth of 16% in the second half of FY21 to achieve full year guidance of US$191.1 million for FY21.

Recurring revenue now accounts for 65% of total revenue, up from 59% from a year ago. There was “strong” growth in term-based licenses, which management described as a positive for future recurring revenue.

Annual recurring revenue (ARR) revenue grew by 29%. Management pointed to strong adoption of Altium 365 during the year with almost 13,000 monthly active users and over 6,000 monthly active accounts. Altium’s total subscription base grew 7% to 54,394.

The Octopart division generated 42% revenue growth to US$27 million. China saw second half growth of 47%, to deliver double digit growth for the full year.

Altium’s board declared a final dividend of AU$0.21 per share, bringing the total for the year to AU$0.40 – an increase of 3%.

In FY22, Altium is expecting revenue to grow by a range of 16% to 20%, to a range of US$209 million to US$217 million. ARR growth is expected to be between 23% to 27%. Altium’s underlying earnings before interest, tax, depreciation and amortisation (EBITDA) margin is expected to be between 34% to 36%.

Altium was the worst performer in the ASX 200.

Fortescue Metals Group Limited (ASX: FMG)

The Fortescue share price went up more than 6% after the company released its FY21 result.

Fortescue reported that its revenue increased by 74% to US$22.3 billion. This helped increase the net profit after tax by 117% to US$10.3 billion.

The iron ore miner’s board decided to grow its total FY21 dividend by 103% to $3.58 per share. Fortescue’s final dividend was increased by 111% to $2.11 per share.

Fortescue ended the period with net cash of US$2.7 billion, after the ASX 200 miner generated almost US$9 billion of free cashflow over FY21.

The ASX 200 business allocated US$1 billion to Fortescue Future Industries in FY21, which is the miner’s green initiative business. FFI spent US$122 million in FY21. In FY22, FFI is expected to spend between US$400 million to US$600 million, with key activity areas being green fleet development and decarbonisation technologies.

Fortescue is expecting to shop 180 mt to 185 mt of iron ore shipments. C1 costs are also expected to increase to a range of between US$15 per wet metric tonne to US$15.50 per wet metric tonne.

Temple & Webster Group Ltd (ASX: TPW)

The Temple & Webster share price jumped 11% after the business released its audited financial statements and another trading update.

It told the market that there had been no changes to the FY21 result it released last month. Full year revenue increased by 85% to $326.3 million and underlying net profit after tax (NPAT) increased 165% to $14 million.

In the FY22 update, it said that the current financial year had started strongly with year on year revenue growth of 49% for the period of 1 July 2021 to 27 August 2021.

The post ASX 200 rises, Altium sinks, Fortescue climbs appeared first on The Motley Fool Australia.

More reading

• ASX 200 miners dominate most traded shares on Monday
• Why Altium, BlueBet, Healius, & HUB24 shares are tumbling lower
• Which ASX companies are starting off the week as the top movers in the ASX 300 today?
• The materials sector is leading ASX 200 shares today
• Why Adore Beauty, Fortescue, InvoCare, & Temple & Webster are charging higher

Motley Fool contributor Tristan Harrison owns shares of Altium and Fortescue Metals Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Altium and Temple & Webster Group Ltd. The Motley Fool Australia owns shares of and has recommended Altium. The Motley Fool Australia has recommended 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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The S&P/ASX 200 Index (ASX: XJO) has finished this Monday’s trading slightly in the green.The ASX 200 closed up 0.37% to 7,788.6 points. So let’s dig a little deeper into the ASX 200 shares that topped the trading volume charts today. As you’ll soon see, today it was all about ASX materials shares:

ASX 200 miners top trading volumes on Monday

Pilbara Minerals Ltd (ASX: PLS)

ASX 200 lithium producer Pilbara Minerals is often at the top of this list. But, today, it has to contend with the number 3 spot. This Monday has seen a hefty 18.37 million Pilbara shares bought and sold.

Since there are no major news or developments out of the company today, we can safely assume this high trading volume is the result of Pilbara’s sizeable share price jump today. Pilbara shares finished up a healthy 6.28% to $2.20 a share. As my Fool colleague Kerry covered earlier today, this seems to be the result of a sector-wide appetite for ASX lithium shares.

Alumina Limited (ASX: AWC)

Aluminium and alumina producer Alumina Limited is our next ASX 200 share to check out today. This Monday has seen a substantial 20.86 million Alumina shares swap hands.

Again, we didn’t seen any major news out of this company. However, Alumina is another ASX share that rose swiftly today, closing up 5.67% to $1.77 a share. It’s probably this lift in valuation that is behind so many shares flying around the markets.

South32 Ltd (ASX: S32)

Diversified ASX miner South32 is our most traded ASX 200 share today, with a massive 31.87 million shares changing owners. Like the above shares, South32 has also enjoyed a massive revaluation from investors this Monday.

At close of trade, the South32 share price finished up a robust 6.21% to $3.08 a share. That pretty much hits the company’s 52-week high of $3.09. It’s probably the result of this big move upward that we saw so many S32 shares traded today.

The post ASX 200 miners dominate most traded shares on Monday appeared first on The Motley Fool Australia.

More reading

• ASX 200 rises, Altium sinks, Fortescue climbs
• Why the Pilbara Minerals (ASX:PLS) share price is surging 7% today
• Why ASX lithium shares are having a bumper start to the week
• The materials sector is leading ASX 200 shares today
• Australia’s rising delta recession risk could hit these ASX 200 shares badly

Motley Fool contributor Sebastian Bowen 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 has not had a great start to the trading week this Monday. At market close, IAG shares finished down 0.74% to $5.34 a share.

Zooming out a little, and the picture improves somewhat for IAG shareholders. Over 2021 so far, IAG shares are up 13.14%. That includes a 6.6% gain over just the past 3 months. In contrast, the S&P/ASX 200 Index (ASX: XJO) is ‘only’ up around 12.27% year to date so far. As well as up ‘just’ 4.8% over the past 3 months. So IAG has been a market-beating investment across both the past 3 months and in 2021 so far.

The more attuned ASX investors out there might point to IAG’s recent earnings report as a potential catalyst. IAG’s 2021 financial year (FY21) earnings were delivered earlier this month .

On 11 August, IAG reported that its cash earnings were up a substantial 170% to $747 million, with a 100% boost to its final dividend to 20 cents a share. However, those pleasing metrics had to be digested with IAG’s $427 million net loss after tax.

Even though the company was bullish on its FY2022 prospects in this earnings report, with management stating “IAG’s underlying performance will continue to improve,” initially investors weren’t entirely on board. As we reported at the time, the IAG share price dropped after the release of these earnings.

Saying that, IAG shares have risen around 1.33% between the day before these earnings were released and today. But they are certainly not enough to explain the company’s performance over the past 3 months.

New executive gives IAG share price a boost

Another development seems to have supported IAG over this period though. Back on 20 July IAG announced that Tim Plant had been appointed as chief insurance and strategy officer, a newly created role. Plant is a former CEO of Zurich Insurance Group.

Here’s what IAG managing director and CEO Nick Hawkins said of the appointment at the time:

Tim brings a considerable depth of underwriting and insurance experience, as well as a deep understanding of customer needs through his leadership roles in the Australian and New Zealand general insurance markets. Tim’s experience will further bolster IAG’s leadership and I look forward to welcoming Tim to the team.

Since this news became public, the IAG share price has rallied more than 10.5%. So it seems this move has been at least somewhat accretive to the IAG share price.

At the current IAG share price, the company has a market capitalisation of $13.26 billion and a dividend yield of 2.62%.

The post Here’s why the IAG (ASX:IAG) share price is up 6% in the last 3 months appeared first on The Motley Fool Australia.

More reading

• If you invested $1,000 in IAG (ASX:IAG) shares a decade ago, here’s what it would be worth now
• 10 ASX shares we’re overweight in right now: fund
• How does the IAG (ASX:IAG) earnings result compare to Suncorp?
• IAG (ASX:IAG) share price falls as competitor raises $200 million
• How does the IAG (ASX:IAG) dividend compare to its sector?

Motley Fool contributor Sebastian Bowen 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 Oil Search Ltd (ASX: OSH) share price has edged lower in the days following the company’s FY21 half-year scorecard. The energy producer recorded a solid operational performance as well as strengthened market conditions.

Meanwhile, Santos Ltd (ASX: STO) reported its FY21 earnings on 17 August, also announcing a robust result. However, its share price had a few mixed trading days based on fluctuations in the spot price of oil.

Comparing the financial figures of the two companies can give investors a clearer picture of how the industry is travelling.

Let’s take a look at how the Oil Search earnings result stacks up against Santos’ numbers.

A recap on the Oil Search earnings result

Here’s a summary of the financial details that Oil Search posted for the 6 months ending 30 June 2021.

• Total sales revenue of US$667.7 million, up 7% on the prior corresponding period;
• Earnings before interest, tax, depreciation and amortisation and exploration (EBITDAX) of US$488.8 million, down 8%;
• Net profit after tax (NPAT) of US$139 million (H1 FY20 net loss after tax of US$266.2 million), and
• Interim dividend declared of US3.3 cents per share (no dividend declared in H1 FY20).

The sound result benefited from a price recovery in oil and liquified natural gas (LNG) predominately in Asia. Higher realised prices coupled with management’s focus on reducing costs led to a significant improvement in the company’s financial health.

How does this compare to Santos?

Santos revealed its own FY21 earnings, highlighting record production of 47.3 mmboe (million barrels of oil equivalent). Let’s see how it stacked up against Oil Search’s result.

• Total sales revenue of US$2,040 million, up 22% on the prior corresponding period;
• Earnings before interest, tax, depreciation and amortisation and exploration (EBITDAX) of US$1,231 million, up 24%;
• Net profit after tax of US$354 million, up 222%, and
• Interim dividend declared of US5.5 cents per share, up 162%.

Santos turned its fortunes around with higher oil prices realised in the first half coupled with record sales volumes of 53.8 mmboe.

In addition, higher oil prices were realised but were offset by lower LNG (liquified natural gas) prices due to long-term, fixed-price offtake contracts.

Comparing Oil Search’s earnings with those of its rival, there are somewhat softer similarities in terms of revenue growth. Although when it comes to EBITAX and NPAT, Santos is far ahead of Oil Search in both numbers and percentage increases.

Oil Search share price snapshot

It has been a modest 12 months for Oil Search shares, posting a gain of almost 20% over the period. Year to date, the company’s share price is relatively flat, up 1% though.

Oil Search commands a market capitalisation of roughly $7.8 billion, with more than 2 billion shares on its books.

The post How does the Oil Search (ASX:OSH) earnings result compare to Santos (ASX:STO)? appeared first on The Motley Fool Australia.

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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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