Are you hunting for some ASX dividend shares to add to your income portfolio next week?

If you are, then take a look at the three listed below that brokers rate as buys.

Here’s what they are expecting from them in the near term:

Challenger Ltd (ASX: CGF)

Analysts at Goldman Sachs think that this annuities company could be an ASX dividend share to buy. The broker currently has a buy rating and $7.50 price target on its shares.

It likes “CGF because: 1) it has exposure to the growing superannuation market across Life and Funds Management; 2) higher yields should drive a favorable sales environment for retail annuities as well as an improvement in margins; 3) its annuity book growth looks well supported through a diversified distribution strategy.”

As for income, the broker is forecasting fully franked dividends of 26 cents per share in FY 2024, 27 cents per share in FY 2025, and then 28 cents per share in FY 2026. Based on the current Challenger share price of $6.74, this will mean dividend yields of 3.85%, 4%, and 4.15%, respectively.

Dexus Industria REIT (ASX: DXI)

Another ASX dividend share that has been named as a buy is Dexus Industria. It is a real estate investment trust with a focus on industrial warehouses.

Morgans is a fan of the company. This is due to its belief that “DXI’s industrial portfolio remains robust with the outlook positive for rental growth.”

The broker expects this to support dividends per share of 16.4 cents in FY 2024 and then 16.6 cents in FY 2025. Based on the current Dexus Industria share price of $3.02, this will mean dividend yields of 5.4% and 5.5%, respectively.

Morgans has an add rating and $3.18 price target on its shares.

Transurban Group (ASX: TCL)

A third ASX dividend share that could be a buy for income investors according to brokers is Transurban. It manages and develops urban toll road networks in Australia and the United States.

Citi is bullish due to its positive exposure to inflation. It has a buy rating and $15.50 price target on its shares.

Its analysts are also expecting some good yields from its shares in the near term. Citi is forecasting dividends per share of 63.6 cents in FY 2024 and then 65.1 cents in FY 2025. Based on the current Transurban share price of $12.55, this will mean yields of 5.1% and 5.2%, respectively.

The post Brokers name 3 ASX dividend shares to buy appeared first on The Motley Fool Australia.

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Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 positions in and has recommended Goldman Sachs Group and Transurban Group. The Motley Fool Australia has recommended Challenger. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

There are 4.2 million retirees in Australia today, and according to new research by life insurer TAL, 28% of them wish they’d spent their money more freely and enjoyed the early years of their retirement more.

A further 16% wished they’d worried less about saving their superannuation for a rainy day.

TAL has just released a research paper documenting what retirees wish they’d known before retiring.

Let’s delve deeper and discover the lessons this provides for pre-retirees still in the workforce today.

Retirement regret 1: Not planning well enough

The research shows 22% of current retirees are concerned their superannuation monies will run out. This has led to financial stress among 32% of retirees aged over 80 years as they draw down their savings.

The AFSA Retirement Standard provides guidance on how much Australians need for retirement.

It says Australian couples need $690,000 in superannuation, and singles need $595,000, plus full home ownership and a part-pension, to afford a ‘comfortable retirement’.

Alternatively, just $100,000 in superannuation for couples and singles, plus a part-pension and full home ownership, is enough for a ‘modest retirement’.

These figures assume retirees draw down their super capital and invest it with a return of 6% per annum.

According to the Australian Bureau of Statistics (ABS), superannuation is the main source of income for more than one in four retirees and at least one source of income for almost 40% of retirees.

Retirement regret 2: You may be forced to retire early

Many people expect to retire between the ages of 65 and 69 but 59% retired earlier, according to TAL.

This reinforces the need to plan ahead financially, as you may not have until your 60s to get organised.

A new report from the ABS reveals four of the top five reasons for retirement involve unforeseen circumstances. Examples include redundancy, injury, or having to care for someone else.

Ashton Jones, General Manager of Growth, Retirement & Wealth Partnerships at TAL, said:

When retirement arrives sooner than expected, it can derail a person’s ability to prepare as much as they’d like to.

Some common themes that emerged for retirees were that many wish they’d put more into superannuation when they had the chance, or that they’d started salary sacrificing earlier.

Financial advisory Findex says more than one in two Australians are unaware of the significant tax savings available through salary sacrificing or making extra personal contributions to their superannuation.

Retirement regret 3: Not expecting to live this long!

The TAL report reveals one-third of retirees expect to live longer than they anticipated when they first retired. TAL says this highlights the benefits of retirement products that pay an income for life.

Upon retiring, Australians typically take one of five actions with their superannuation nest eggs.

The most popular choice is converting super into a regular income stream via a pension account (34%). A further 27% left their money in their existing super account. A lump sum was taken by 15%. Finally, 18% moved some or all of their super monies into a lifetime retirement income stream, like an annuity.

Were retirees happy with the decisions they made?

With the benefit of hindsight, it seems many people would have made different financial choices in retirement.

The research showed 56% of retirees who withdrew all or most of their super were happy with that decision.

By contrast, 87% of retirees who moved their money into a lifetime income stream or pension account were happy with that call.

The post Retirement regret: What 1 in 4 Aussies wish they’d done after quitting work appeared first on The Motley Fool Australia.

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• How to turn your savings account into a gold mine starting with $10,000

Motley Fool contributor Bronwyn Allen 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 Scott Phillips.

PWR Holdings Ltd (ASX: PWH) is a leader in advanced cooling systems, supplying Formula 1 teams, automotive and other tech industries.

Its shares have consistently delivered good returns to their holders. However, since hitting its all-time high of $12.98 in February following its robust 1H FY24 results, the shares have traded weaker, down more than 15%.

Is this recent drop a good time to buy this ASX growth share?

A global leader in cooling systems

Established in 1997 by its current CEO, Kees Weel, PWR Holdings designs, develops, and manufactures advanced cooling systems.

But it’s more than just a radiator producer. The company is a global leader in this niche, delivering high-performance products across the motorsport, automotive, aerospace and defence sectors. In 1H FY24, the company reported a 22% growth in its revenue to $64.2 million.

The motorsport sector is the largest business unit, representing 47% of its 1H FY24 revenue. The company is renowned for its cutting-edge cooling systems used in high-performance motorsports, including Formula 1. PWR’s products are designed to withstand the extreme conditions of competitive racing.

In the automotive sector, representing 22% of its revenue, PWR provides bespoke cooling solutions for high-end and luxury vehicles. Its products are designed to enhance the performance and reliability of supercars and luxury automobiles.

The aerospace and defence sector is relatively new but growing rapidly, with its revenue contribution rising to 12% in 1H FY24 from just 7% a year ago.

PWR Holdings serves a diverse customer base across multiple continents. For the last 12 months to December 2023, PWR generated approximately 90% of its total revenue overseas, mainly in the United Kingdom and the United States.

Superior margins and return on investment

Its precision-focused product portfolio contributed to superior profit margins. PWR Holdings consistently delivers gross margins of 77% to 80%. Operating profit margins have a wider range but are still well above 20%. This level of profitability is exceptional for a manufacturer.

Such high margins flow down to its returns on equity (ROE) of approximately 29%. Impressively, the company maintained such high ROEs over the past decade, with the lowest point being 24% in FY20 during the COVID-19 pandemic.

Are PWR Holdings shares too expensive?

PWR Holdings has demonstrated robust financial performance, driven by its diversified revenue streams and strong market position.

But, some investors may find its current valuations too lofty.

PWR Holdings shares are currently traded at 34x FY25 earnings estimates by S&P Capital IQ. While this is high compared to other manufacturers on the ASX, this is actually not too bad relative to its own price-to-earnings (P/E) ratio history of 20x to 52x.

The market anticipates PWR Holdings’ earnings per share to increase by more than 20% each year in FY25 and FY26. If the company can meet these expectations, the current multiple may still be justified.

The PWR Holdings share price closed flat at $10.96 on Friday. At the current price, the shares offer a dividend yield of 1.25%.

The post Down 15% in 4 months, is it time to buy this ASX growth stock? appeared first on The Motley Fool Australia.

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Motley Fool contributor Kate Lee has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended PWR Holdings. The Motley Fool Australia has positions in and has recommended PWR Holdings. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Last week, the Reserve Bank of Australia (RBA) held its latest monetary policy meeting to decide on interest rates.

As was widely expected by the market, the RBA board decided to leave the cash rate unchanged at 4.35%.

The central bank noted that inflation remains above target and is proving persistent. As a result, the board “expects that it will be some time yet before inflation is sustainably in the target range.”

What does this mean for interest rates? Will they be going higher before they go lower? Let’s see what the economics team at Westpac Banking Corp (ASX: WBC) is saying following the RBA meeting.

What is Westpac saying about interest rates?

Besa Deda, the Chief Economist from Westpac Business Bank, has been running the rule over the RBA’s remarks.

According to the latest Westpac Weekly economic report, Deda notes that the central bank doesn’t sound overly confident that inflation will fall to its target range. The chief economist said:

Governor Bullock’s remarks, together with the changes to the accompanying Board statement, reveal the RBA has become more alert to upside inflation risks. Additionally, the Board appears less confident inflation is moving sustainably towards the inflation target within a reasonable timeframe.

In perhaps one of the more telling remarks of the press conference, Bullock said “we need a lot to go our way if we are going to bring inflation down to the 2–3% target” and the economy’s narrow path is “getting a bit narrower.”

However, the good news for borrowers is that Deda doesn’t believe the RBA will take interest rates higher from here. This is because Australia’s oldest bank continues to believe that the next quarterly inflation reading will come in lower than what the RBA is forecasting.

In light of this, Westpac remains confident that the next move by the central bank will be to lower interest rates in November. She added:

Our inflation forecasts for the upcoming June quarter report are below that of the RBA’s, leaving us comfortable with our view that the next move in the cash rate will be down and arrive in November. But we acknowledge there’s a greater risk of rate relief slipping into next year. Swap markets have no rate cuts priced for this year and two rate cuts priced in for 2025. The timing of the first rate cut has been pushed out from February to April next year after today’s meeting.

Westpac is forecasting interest rates to fall to 4.1% in November, 3.85% by March 2025, 3.35% by September 2025, and then 3.1% by December 2025.

The post Here’s when Westpac says the RBA will now cut interest rates appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. 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 Scott Phillips.

If you have $10,000 sitting in a savings account and no plans for it, then it could be worth putting it to work in the share market.

That’s because the potential returns on offer in the share market could turn your savings into a gold mine if you are willing to be patient.

Turn $10,000 into a gold mine

If you leave $10,000 in a Commonwealth Bank of Australia (ASX: CBA) saving account, it will grow. But at a much slower rate compared to what would be expected from ASX shares.

For example, let’s imagine you are able to average a 4% interest rate on your savings account over the next 20 years. This would turn your $10,000 into approximately $22,000.

Now let’s imagine that you also add an extra $10,000 to your account each year. Doing this for 20 years with an average 4% interest rate would lead to your savings account growing to be worth $330,000.

That’s a bit of a gold mine itself, but just wait until you see what could happen with the share market.

Share market vs savings accounts

Over the long term, the share market has generated an average total return of approximately 10%.

And while there’s no guarantee that this will happen again in the future, I think it is reasonable to base our assumptions on this return.

If you were to invest your $10,000 into ASX shares and averaged a 10% per annum return, your investment portfolio would compound to be worth $67,000 in 20 years.

That’s $45,000 more than if you had just left it in your savings account for two decades.

Now let’s see what would happen if you put an additional $10,000 into the share market each year over the 20 years.

If you did this and achieved a 10% per annum return, your investment would grow materially and become worth approximately $700,000.

That is $370,000 greater than what would have happened if you just stayed with your savings account.

And while it is worth remembering that savings accounts are risk free and ASX shares carry risk, I believe the potential rewards are compelling enough to justify choosing stocks.

Which ASX shares should you buy?

Rather than risking your money in speculative stocks, investors may want to consider buying companies that have strong business models, sustainable competitive advantages, and fair valuations.

This is a strategy that Warren Buffett has used for decades. And given that he has smashed the market return since the 1950s, it’s fair to say the strategy has its merits.

The post How to turn your savings account into a gold mine starting with $10,000 appeared first on The Motley Fool Australia.

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

The Woolworths Group Ltd (ASX: WOW) share price has fallen significantly over the past year, as the chart below shows. Currently, it has declined 16% over the past 12 months.  

However, the Woolworths share price has lifted more than 10% since I called it out as a solid buy in early May.

I believe it’s still an attractive opportunity, with more upside in its recovery and longer-term growth.

Ongoing sales growth

The strong sales tailwinds of COVID-19 demand and inflation appear to have subsided. However, the company continues to deliver revenue growth.

In the third quarter of FY24, Australian food sales increased 1.5% to $12.6 billion, while Australian business-to-business (B2B) sales rose 3.2% to $1.1 billion. Total third-quarter sales (including New Zealand and BIG W) sales rose 2.8% to $16.8 billion.

Despite cycling against a very strong FY23 third quarter, where Australian food sales rose 7.6%, Woolworths’ supermarkets were still able to report growth.

It also reported that adjusted’ sales growth in April was “broadly in line” with the third quarter, with inflation continuing to moderate and the number of items sold showing “ongoing modest growth”.

Considering the current economic conditions, I think Woolworths’ recent resilient sales performance has demonstrated its strong market position.

Strong e-commerce results

Woolworths is achieving excellent growth with its e-commerce sales, and if this growth could continue, it could play a more significant role in accelerating growth and helping support the Woolworths share price.

In the FY24 third quarter, WooliesX (which includes e-commerce) grew 17.8% to $1.63 billion.

Woolworths said its e-commerce sales penetration reached 12.4%, an increase of 178 basis points (1.78%) over the prior year.

With the ongoing digitalisation of the economy, Woolworths is leading the way when it comes to online food shopping. Coles Group Ltd (ASX: COL) reported $856 million of e-commerce sales in the FY24 third quarter, much less than Woolworths.  

I think Woolworths’ digital sales can be an important driver of earnings in the coming years.

Solid long-term earnings growth projected

I don’t believe Woolworths is the type of business that will deliver extraordinary earnings growth — supermarket retailing is usually consistent year to year. However, Woolworths is projected to deliver net profit after tax (NPAT) of $1.63 billion in FY24 and $1.64 billion in FY25.

However, after FY25, the broker UBS predicts that Woolworths’ earnings will rise at a good pace in the next few years.

UBS suggests the company’s net profit could rise 7.4% to $1.76 billion in FY26, lift 11.6% to $1.96 billion in FY27 and then rise 10.8% to $2.18 billion.

Those numbers suggest the Woolworths share price is valued at 25x FY24’s estimated earnings and 19x FY28’s estimated earnings.

It’s also projected to pay a grossed-up dividend yield of 4% in FY24 and 5.5% in FY28.

With good profit growth projected in the coming years, I’d say the Woolworths share price is a solid buy at the current level.  

The post The Woolworths share price is down 16%: Time to buy the stock? appeared first on The Motley Fool Australia.

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