Fortescue Metals Group Limited (ASX: FMG) has been an S&P/ASX 200 Index (ASX: XJO) favourite for investors over the last year or so. At the time of writing, the Fortescue share price is trading at $20.06.

Buoyed by rising iron ore prices, Fortescue shares have risen by more than 90% over the past 12 months. And that’s after falling 22% since early January.

But it gets even better for long-term investors. Over the past 5 years, Fortescue shares are up a staggering 683%. Not bad for a blue-chip iron miner.

But even after the massive run up of the past year, Fortescue today offers a trailing dividend yield of 12.31%. And that comes fully franked to boot. If you include the value of these franking credits, this dividend grosses-up to an almost-inconceivable 17.59%.

So let’s, er, dig a little deeper here.

An ASX dividend giant

Fortescue’s last two dividend payments were a $1.47 per share interim dividend that was paid on Wednesday, and a $1 per share final dividend that was paid out on 2 October 2020. For some context, the two dividends before that were an interim dividend of 76 cents per share, and a final dividend of 24 cents per share.

So there has been a massive ramp up over the past 2 years. This large gap can be easily explained by looking at Fortescue’s policy when it comes to dividends.

Fortescue has what’s called a ‘payout ratio’ dividend policy. Its official position, which the company reiterated in its latest earnings report, is to payout 50% to 80% of full-year net profits after tax (NPAT), targeting the top end of the range. For the first half of the 2021 financial year (1H21), Fortescue’s NPAT came in at US$4.08 billion, which was a massive increase on 1H20’s figure of US$2.45 billion.

The dividend of $1.47 per share represented 80% of that NPAT figure for 1H21. So right at the top of the range. It was also the highest dividend Fortescue has ever paid its shareholders.

Will the Fortescue dividend survive?

So, some takeaways here. Firstly, as an iron ore miner, Fortescue is completely at the mercy of the iron ore price. The monstrous dividend of $1.47 a share was possible because of historically high iron ore prices over the past year. As this dividend was at the upper range of Fortescue’s payout ratio, it will need to bring in at least a very similar level of profits in the future to maintain a dividend near this level.

But this might not be a challenge for the company, at least in the short term. In its earnings report, Fortescue told us that its average realised price per dry metric tonne was US$114. Today, the iron ore price is US$155.60 a tonne, which is actually on the lower end of its recent range. It was over US$172 a tonne as recently as 8 March.

In all likelihood, the current heights of the Fortescue dividend won’t last forever, given how volatile the price of iron ore has historically been. But on the other hand, the dividend looks pretty safe in the short- to medium-term, judging by the metrics we have discussed. This is certainly an interesting ASX dividend share to keep an eye on!

More reading

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• Where to reinvest your Fortescue (ASX:FMG) dividends
• 5 things to watch on the ASX 200 on Wednesday
• The Fortescue (ASX:FMG) share price is down 20% in March
• An important lesson from today’s Fortescue (ASX:FMG) share price

Motley Fool contributor Sebastian Bowen 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 Australian Strategic Materials Ltd (ASX: ASM) share price is gaining today, up 2.2% in late morning trade.

Below, we take a look at the ASX resource shares capital raising announcement.

What did the company report?

The Australian Strategic Materials share price is moving higher after the company reported it had received firm commitments to raise $65 million via the placement of 13.5 million shares.

The company will issue the new shares for $4.80 per share. That’s 5.7% below the current share price of $5.09 per share. The placement is scheduled to settle on 1 April.

The company also said it plans to raise an additional $41 million by undertaking a “1 for 14 pro-rata non-underwritten, non-renounceable entitlement offer to eligible shareholders”. The company expects the entitlement offer, also at $4.80 per share, to open on 7 April and close on 16 April.

Australian Strategic Materials intends to use the new funds for the final stage of engineering and construction of its proposed Korean Metals Plant and additional engineering work at its New South Wales Dubbo Project.

Words from management

Commenting on the capital raising, ASM managing director David Woodall said:

The funds raised significantly bolster our balance sheet, placing the company in a strong position as we progress key workstreams which include development of the proposed Korean Metals Plant and advancing key FEED workstreams on the Dubbo Project in New South Wales.

Importantly, we continue to advance our strategy for sustainable growth, with a primary focus on developing ASM into a globally relevant, independent and integrated metals producer by 2022.

Australian Strategic Materials share price snapshot

Australian Strategic Materials is a relative newcomer to the ASX, having first listed on 30 July 2020.

Since then, the ASX resource share has provided shareholders with a good run, with shares up 265% over the past 12 months. By comparison, the All Ordinaries Index (ASX: XAO) is up 37% over that same time.

Year-to-date, the Australian Strategic Materials share price is down 23%.

More reading

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Motley Fool contributor Bernd Struben 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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An ASX share fund has revealed 3 stocks that it holds and loves, which are currently in a price dip.

Aberdeen Standard told clients in a monthly update that Australian stocks are now “in something of a sweet spot”.

“The central bank remains committed to a dovish stance, with interest rates expected to remain low until 2024 at least. Meanwhile, commodity prices could rise further as the global growth outlook improves amid the wider rollout of Covid-19 vaccines,” the memo read.

“In addition, rosier macro conditions and more upbeat company updates strengthen hopes of a rebound in corporate earnings.”

In light of this, it picked out 3 shares in its portfolio that have an optimistic future:

Fisher & Paykel Healthcare Corp Ltd (ASX: FPH)

The New Zealand healthcare player has had a rough few weeks. From $32.94 on 27 January, its shares tumbled to as low as $25.46 this month. They’re currently trading at $29.90 early Friday afternoon, so is still in a dip.

Aberdeen noted Fisher & Paykel stocks descended because demand for its respiratory hardware was boosted by COVID-19 last year.

“With the global vaccine rollout underway, we expect hospitalisation rates to moderate and resultant hardware sales to reverse from current elevated levels.”

But the investment house deemed this to be a temporary dip in earnings.

“We continue to view Fisher and Paykel Healthcare as an attractive holding exposed to longer-term structural growth drivers,” the memo read.

“We remain upbeat on the longer-term opportunity to increase higher-margin consumables sales. This will be driven by both a larger number of devices now in circulation, as well as changes.”

Mercury NZ Ltd (ASX: MCY)

Another Kiwi business listed on the ASX, the electricity company’s stocks are currently in a price dip, having lost almost 19% since 8 January.

But Aberdeen’s Ex-20 Australian Fund went as far as selling down its Afterpay Ltd (ASX: APT) shares to get a piece of the action.

“We re-invested these proceeds into Mercury New Zealand, a 100% renewable electricity generator, with the recent share-price pullback offering an attractive entry point.”

The 100% green energy business model, according to Aberdeen, is what makes the company compelling.

Wesfarmers Ltd (ASX: WES)

Shares for the conglomerate have come down to $52.48 since they hit a 52-week high of $56.40 back in early February.

And that’s caught the eye of Aberdeen’s Australian Equities Fund. 

It all has to do with Australia’s escalating real estate prices.

“Our investment in Wesfarmers reflects our view that the domestic housing recovery will continue to underpin robust earnings at household hardware chain Bunnings over the medium term,” Aberdeen told clients.

“Furthermore, we think it will benefit from its recent investment in lithium processing.”

More reading

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• Why the Mercury (ASX:MCY) share price is surging today

Motley Fool contributor Tony Yoo owns shares of AFTERPAY T FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO and Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Cimic Group Ltd (ASX: CIM) share price is up this morning after the company announced it had signed a new performance bond facility.

Shares in the ASX 200 construction, mining, and services company opened higher this morning and are currently trading up 1.32% at $18.00.

Let’s take a closer look at the news driving the CIMIC share price.

The importance of the bond facility

In today’s release, Cimic advised that its new $1.4 billion bond facility was a 3-year syndicated performance bond.

A performance bond is issued to one party in a contract as security against another party’s ability to perform. It offers an alternative to upfront guarantees for contract security and performance pledges. As it doesn’t always tie assets or cash as collateral, it can be a useful, flexible financing tool.  

As a large corporation operating in the mining and construction fields, CIMIC is a prime candidate for such bond facilities. The company is an engineering-led construction, mining, services and public-private partnerships corporation, which works across the lifecycle of assets, infrastructure and resources projects.

Commentary from management

CIMIC Group CEO Juan Santamaria said:

The facility reflects CIMIC’s strong financial position and supports our ability to meet the significant number of projects coming through the pipeline.

Access to bonding is an advantage for the group, ensuring we can provide our clients the required surety for our contractual obligations.

Cimic share price snapshot

The CIMIC share price has had a poor start to 2021, down 27.51% year to date. It has also fallen by 25.23% over the last 12 months.

The company has a market capitalisation of around $5.3 billion, with approximately 311 million shares outstanding. 

More reading

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• Why is the Woolworths (ASX:WOW) share price up 5% in a week?

Motley Fool contributor Brooke Cooper 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 Paradigm Biopharmaceuticals Ltd (ASX: PAR) share price is charging higher on Friday.

In early afternoon trade the biopharmaceutical company’s shares are up a sizeable 6% to $2.55.

Why is the Paradigm share price charging higher today?

Investors have been fighting to get hold of Paradigm’s shares on Friday after the release of an announcement this morning.

According to the release, Paradigm has submitted its Investigational New Drug (IND) application to the US Food and Drug Administration (FDA). This is for the planned pivotal study and extension study with PPS (Zilosul) for the treatment of patients with Knee Osteoarthritis (OA). The company believes the submission of its IND application marks a significant milestone.

Management revealed that in preparation for the IND submission and commencement of the pivotal clinical program, Paradigm conducted meetings with key regulatory bodies. This was to ensure the clinical trial design would be acceptable on a global platform and meet all obligations required for registration upon successful trial results.

One of these was a pre-IND meeting in February last year with the FDA. At this meeting the two parties discussed the clinical trial protocol. Paradigm also received feedback from a Type-C meeting in December 2020, where the written response to questions posed by Paradigm was received from the FDA on the proposed clinical trial design.

In Europe, regulatory engagement with the EMA was also achieved via a virtual Scientific Advice meeting in September 2020.

Management commentary

Paradigm’s Chairman and CEO, Paul Rennie, commented: “It has been incredibly pleasing watching all modules of the IND submission come together and I am very thankful for the highly experienced and skilled Paradigm team for achieving this significant milestone on time for all of our stakeholders.”

“We believe that a harmonised clinical trial program that satisfies the requirements for registration with multiple global regulatory agencies will save Paradigm time and money as we approach registration and commercialisation of Zilosul.”

Mr Rennie also believes that the IND will give the company’s profile a boost and bring it into the radar of investors and potential partners.

“We anticipate the IND opening will provide further exposure to global investors and partners with the company already receiving an increase in global interest in our Phase 3 clinical program during our attendance this week at the 2021 BIO-Europe Spring Partnering conference where the company has participated in several partnering meetings.”

“We look forward to providing further detail on the final study design and timing once the IND has been opened following the 30-day review period with the FDA.”

More reading

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Motley Fool contributor James Mickleboro 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 Oneview Healthcare PLC (ASX: ONE) share price is rocketing in late morning trade following its ISO 27001 certification award.

At the time of writing, the healthcare technology solutions company’s shares are swapping hands for 35.5 cents, up 14.7%. It’s worth noting that at market open, its shares reached an intraday high of 41 cents.

Founded in 2007, Oneview is an Irish software company that provides interactive healthcare technologies for patients, families and caregivers. The business operates in the United States, Australia, and the Middle East.

What’s driving the Oneview share price higher?

The Oneview share price is on the move as investors seem pleased with the company’s latest update.

According to its release, Oneview advised that it has surpassed a key milestone for the transition to Cloud Enterprise. The company was granted ISO 27001 certification, which is the international standard on best practices to manage information security. In laymen’s terms, it proves to clients that their data is safely managed at all times.

Certification Europe, a globally accredited certification body, conducted a thorough independent audit of Oneview’s systems, facilities and processes. It found that the company’s Information Security Management System (ISMS) protected the confidentiality, integrity, and availability of customer data.

Management commentary

Oneview information security head Richard Eibrand commented:

Information security is especially critical in healthcare and we are very proud of our 13-year unblemished track record protecting the data of our world-class customers.

Cyber security is a top priority for healthcare CIOs and having ISO 27001 certification provides industry-recognised assurance of our good custodianship of highly sensitive healthcare data.

Oneview CEO James Fitter added:

Our journey to ISO certification began in May 2019 as we were developing a complex cloud hosted care management solution for the aged care industry. Our strategic decision to move our hospital solution to the Cloud in 2020 saw us accelerate this initiative in recent months.

The Oneview share price has jumped more than 800% in the past 12 months, with most of these gains coming year-to-date. It’s worth noting that the company’s shares reached a 52-week high of 48.5 cents on Monday.

More reading

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Motley Fool contributor Aaron Teboneras 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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Creso Pharma Ltd (ASX: CPH) shares are falling today after the company received firm commitments to raise A$18 million. At the time of writing, the Creso share price has slumped 6.52% to 21.5 cents.

The funds raised will be deployed to undertake psychedelic clinical trials upon the completion of the company’s Halucenex acquisition. Halucenex is a life sciences company focused on researching novel psychedelic compounds and developing and licensing products for the emerging global psychedelic medicines market. 

Creso share price falls on capital raise 

The Creso share price is on the slide today after the company advised it has secured firm commitments from institutional, professional and sophisticated investors to raise up to A$18 million. The funds will be raised via the issue of approximately 94.7 million new shares at an issue price of 19 cents per share. 

The company notes that the placement was heavily oversubscribed and strongly supported by a range of local and international groups including leading Australian businessman John Langley Hancock, S3 Consortium Holdings Pty Ltd and independent global fund manager L1 Global Master Opportunities Fund, among others. 

Funds to advance clinical trials and nutraceutical offerings 

Creso Pharma has recently focused its attention on its “transformational” psychedelics acquisition, Halucenex. Its phase II and phase III clinical trials will explore the efficacy of psychedelic molecules on a range of mental health conditions, such as depression and post-traumatic stress disorder, and open up another potentially lucrative vertical. 

The company will also deploy funds to expand its current nutraceutical offerings via its wholly-owned Canadian subsidiary, Mernova Medicinal Inc. On 19 March, Mernova received three purchase orders valued at C$177,122.40 (A$183,019.551). These included the company’s first purchase order for its pre-roll joint range, sold under the Ritual Sticks brand. 

Non-executive chair Adam Blumenthal was pleased with the strong interest in the placement and believes it will position Creso to explore greater opportunities in the near-term. He said:

The Placement was very well bid and leaves Creso Pharma well funded to progress a number of near term revenue generating initiatives. Key short-term focus will include finalising the acquisition of Halucenex and undertaking clinical trials. Importantly, the acquisition provides the Company with access to another lucrative vertical and potential revenue stream. We will also be ramping up our nutraceutical division and preparing for the anticipated legalisation of cannabis in the US through our Canadian operations.

The Creso share price has increased by more than 250% over the past 12 months.

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Motley Fool contributor Kerry Sun 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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There are a few little known small cap ASX shares that could be worth looking into and may be able to generate long-term returns.

Smaller shares have the potential to generate larger returns because they’re starting from a smaller base. Those large cap ASX blue chips have already done a lot of their growing.

These two small cap ASX shares may be worth considering:

Healthia Ltd (ASX: HLA)

This business is a rapidly growing healthcare company that is now operating with three different divisions.

It has a market share of around 1.5% in Australia, with a market share of more than 2.5% in ‘feet and ankles’, more than 1.5% in ‘bodies and minds’ and more than 1.5% in ‘eyes and ears’. Healthia believes each segment has a total addressable market of a few billion dollars.

The company is successfully employing an acquisition strategy to growing its networks of businesses.

During the first half of FY21 alone, the small cap ASX share acquired 55 allied businesses, including The Optical Company (41 optical stores and eyewear frame distributors), seven feet and ankle businesses and six bodies and minds businesses.

The business is rapidly growing both its revenue and profitability. In the HY21 result, revenue increased by 38.9% to $61.5 million, the underlying earnings before interest, tax, depreciation and amortisation (EBITDA) margin improved by 486 basis points, underlying EBITDA surged 90.7% to $11 million, the underlying net profit after tax (NPATA) margin improved 194 basis points to 7.72% and underlying earnings per share (EPS) grew 78.2% to 6.86 cents.

Healthia also declared a dividend of 2 cents per share, showing the confidence of the board.

The business is going to try to acquire a minimum of $20 million of new businesses each year through a combination of bank debt, free cash flow and clinic class shares.

Volpara Health Technologies Ltd (ASX: VHT)

Volpara is a small cap ASX share that specialises in breast screening technology and administration. It utilises AI to improve the early detection of breast cancer by analysing images and associated patient data to provide

The company is making progress on several fronts. It now has a market share of around 30% of US screenings, meaning that around 12.5 million US screenings are using at least one of its products. There is the potential for Volpara to cross-sell and up-sell more of its offerings to its US clients over time.

Volpara is seeing low levels of churn with its annual recurring revenue (ARR) and an increasing average revenue per user (ARPU) – now around US1.40.

The gross margins are particularly strong – one of the highest on the ASX – at more than 86% and rising.

CRA Health is an important acquisition for the small cap ASX share because it increases the ARPU, it’s integrated with large electronic health record systems and it can analyse the images and data even better. Indeed, Volpara just won its biggest contract thanks to CRA Health.

There is the potential for growth into other countries and regions, such as Europe, which would significantly increase the total addressable market. Volpara has signed up key luminaries across both Europe and Asia.

More reading

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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 recommends VOLPARA FPO NZ. The Motley Fool Australia has recommended HEALTHIA FPO and VOLPARA FPO NZ. 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 Centuria Industrial REIT (ASX: CIP) share price is edging higher in morning trade, up 2.22% to $3.23.

The real estate investment trust (REIT) is Australia’s largest domestic pure-play industrial REIT. Below we take a look at the S&P/ASX 200 Index (ASX: XJO) listed company’s latest announcement on its portfolio valuation.

What did the REIT report?

The Centuria Industrial REIT share price is gaining after the company reported the value of its portfolio of industrial assets increased by 8.1% or $192 million on a like-for-like basis from prior book values.

Centuria completed external valuations on 56 of its 61 industrial properties, which the company reports represents around 93% of its total portfolio by value, as at 31 March.

The new valuation brings Centuria Industrial’s total portfolio value to $2.6 billion.

The company pointed to its leasing success and capitalisation rate compression in Australia’s industrial market as key factors driving the increased valuation.

The REIT’s Telstra Corporation Ltd (ASX: TLS) data centre in Clayton, Victoria led the charge higher, with its value increasing by $28.3 million.

Commenting on the revaluation, Centuria Industrial fund manager Jesse Curtis said:

Australia’s industrial property market is currently experiencing a substantial re-rate, attracting significant investment demand from both domestic and international capital. Major transactions in the market continue to show capitalisation rate compression, complemented by strong tenant demand from e-commerce and a scarcity of investment grade assets.

Curtis added, “The CIP portfolio remains in an extremely strong position holding occupancy of 97.7%, WALE [weighted average lease expiry] of 9.8 years and portfolio capitalisation rate of 4.96%.”

So far in the 2021 financial year, Centuria Industrial has transacted $757 million worth of industrial assets. The REIT reported that these new assets contributed to $64 million of its total portfolio revaluation gain.

Centuria Industrial pays a 5.6% annual dividend yield, unfranked.

Centuria Industrial REIT share price snapshot

Over the past 12 months, Centuria Industrial REIT shares have gained nearly 17%. That trails the 33% gains posted by the ASX 200.

Year to date, the Centuria Industrial REIT share price is up 4.5%, outpacing the 2.2% gains from the ASX 200.

More reading

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra 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 Maca Ltd (ASX: MLD) share price is edging higher this morning after the company announced a contract win. At the time of writing, the mining and civil construction company’s shares are trading at $1.06, up 1.92%.

Let’s take a closer look and see what Maca updated the ASX with.

What’s pushing the Maca share price higher?

Investors are pushing the Maca share price higher after digesting the company’s latest update.

In its announcement, Maca advised that it has secured a ‘Hire and Maintenance’ contract for CITIC Pacific Mining Management (CPM). This will see Maca provide a number of services at CPM’s Cape Preston Sino Iron magnetite project. Situated 100km south-west of Karratha in the Pilbara region, the project is the largest magnetite mining and processing operation in Australia.

Depending on the number of works completed, the contract is expected to generate $200 million in revenue for Maca. Services are scheduled to commence in April 2021 and will run over a 36-month term.

Maca highlighted that its work-in-hand position stands at $3.4 billion as of February this year.

What did the CEO say?

Maca CEO Mike Sutton welcomed the deal, saying:

Maca is very pleased to continue working with CITIC Pacific Mining at the Sino Iron magnetite project, and we value the long-standing relationships we have with our clients at this pioneering megaproject.

The current CPM contract was novated from Downer to Maca, following the acquisition of the Mining West business, and it’s pleasing to have now secured this three-year extension.

About the Maca share price

The Maca share price has surged by around 80% in the past 12 months. Year to date, however, Maca shares are down around 12%.

Based on the current share price, Maca has a market capitalisation of around $355.3 million, with 341.7 million shares outstanding.

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Motley Fool contributor Aaron Teboneras 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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