If you’re keeping an eye on the Australian stock market, you’re likely familiar with the fantastic companies, Brickworks Limited (ASX: BKW) and Washington H Soul Pattinson & Company Ltd (ASX: SOL).

Both companies boast strong, shareholder-friendly cultures and have a unique circular shareholding structure where they own each other’s shares.

Brickworks, a renowned name in the building materials sector, has a history of consistent performance. Its diversified portfolio, including property and investments, provides a solid foundation for its earnings.

On the other hand, Soul Patts, with its investments spread across various industries such as telecommunications, mining, and agriculture, presents a unique proposition for investors looking for wide-ranging exposure.

Now, the big question is, if you had to pick just one company to invest in, would you go for Brickworks or Soul Patts shares today?

Financial health

Brickworks has consistently maintained a robust balance sheet with low debt levels. As at December 2023, Brickworks has a net debt of $1.2 billion compared to equity of $3.48 billion.

This positions it well to navigate any economic downturns and capitalise on growth opportunities without the pressure of high-interest payments.

Soul Patts has a net cash position of $285 million compared to its equity of $9 billion. The company boasts a strong financial position, with diversified income streams providing a buffer against sector-specific downturns.

Growth outlook

Regarding growth prospects, both companies have demonstrated their capability to adapt and thrive.

For Soul Patts, the focus has been on strategic investments in industries with high growth potential. Its ability to identify and capitalise on such opportunities has historically resulted in impressive returns for shareholders.

Brickworks has been expanding its presence in the US, opening new avenues for growth beyond the Australian market. This international expansion could significantly impact its bottom line in the coming years.

In addition to the US potential, Brickworks is well-positioned to benefit from the ongoing shortages in industrial properties. The most exciting one for me is its land holdings in Western Sydney, but the company also owns many other parcels of land in Australia and the US.

Dividends

Soul Patts shares offer a dividend yield of 2.73% compared to Brickworks’ 2.44%.

While the difference in yields is very little, Soul Patts has demonstrated faster dividend growth recently. Over the past five years, Soul Patts has raised its dividends at around 9% per year, higher than approximately 3% for Brickworks.

Which shares are cheaper?

The Brickworks share price appears slightly cheaper than Soul Patts on a price-to-earnings ratio (P/E) and price-to-book (P/B) ratio basis. Using FY25 earnings estimates by S&P Capital IQ:

• Soul Patts shares are trading at a P/E ratio of 24x and a P/B ratio of 1.2x
• Brickworks shares are trading at a P/E ratio of 19x and a P/B ratio of 1.1x

Foolish takeaway

While I like both of these ASX dividend shares for their stability and track records, my pick would go to Brickworks shares because they have a better growth prospect and slightly cheaper valuations today.

The post Should you buy Brickworks or Soul Patts shares today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Kate Lee has positions in Brickworks. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Santos Ltd (ASX: STO) shares are outperforming the benchmark today.

In late afternoon trade, shares in the S&P/ASX 200 Index (ASX: XJO) energy stock are up 0.7%, swapping hands for $7.40 apiece.

That compares to a 0.2% loss posted by the ASX 200 at this same time.

Over the full year, however, Santos has underperformed the benchmark. Santos shares are down 2.3% over 12 months compared to a 6.4% gain posted by the ASX 200.

This doesn’t include the 40.2 cents a share in unfranked dividends Santos delivered over the year. That sees that stock trading on a trailing yield of 3.8%.

Now, that’s all water under the bridge today.

Looking ahead, are Santos shares a good investment right now?

Time to buy Santos shares?

The answer to that question is somewhat dependent upon who you ask.

Catapult Wealth’s Dylan Evans isn’t a big fan of Santos shares at the moment, with a sell recommendation on the stock.

According to Evans (courtesy of The Bull), “We prefer to have limited exposure to oil and gas given developed countries are beginning to transition from fossil fuels to cleaner energy, albeit slowly.”

Evans added:

There’s little doubt LNG will continue to be an important energy solution for years to come. However, gas prices are closely linked to oil markets, which were recently showing signs of oversupply as demand falls. OPEC is reluctant to cut supplies to support prices as it doesn’t want to run the risk of losing market share.

Goldman Sachs has a decidedly more bullish take on Santos shares.

Following Santos’ full-year results, reported on 21 February, the broker reinstated Santos as a buy, citing “significant valuation discount with strong production growth to offset global gas price weakness.”

Goldman placed a $8.60 price target on Santos shares. That’s more than 16% above current levels.

Goldman noted:

We expect 2024 to be the trough for STO production and earnings as Barossa and Pikka start up over 2025-2026 and support a ~10% production CAGR over the next 3 years, offsetting the impact from softening global gas prices as the LNG market moves back into material oversupply.

With key growth project Barossa materially de-risked following the Federal Court’s Jan 15 Judgment to lift the injunction halting pipeline installation and a lack of challenges to NOPSEMA project approvals, we see attractive valuation with STO trading at ~0.8x NAV.

As for the oil price, Brent crude oil reversed a lengthy slide on 4 June, when Brent was trading for US$77.52 per barrel. Today that same barrel is worth US$85.32, up 10.1%.

And in what could offer some tailwinds for Santos shares over the coming months, Aldo Spanjer, a senior commodities strategist at BNP Paribas, has a bullish outlook for oil in the quarter ahead.

“I’m comfortable being bullish for Q3 still,” Spanjer said (quoted by Bloomberg).

“While June looks weak, I think demand comes up for diesel, gasoline and particularly jet. That’s a pretty strong demand increase over the next two to three months.”

The post Are Santos shares a good investment right now? appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben 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.

National Australia Bank Ltd (ASX: NAB) shares may get a boost from a recent cryptocurrency investment if it can better serve institutional investors. The ASX bank share has just bought a stake in a business called Zodia Custody.

Being able to provide a full service to institutions is important because a lot of NAB’s earnings come from its business clients.

In the FY24 half-year result, the business generated $1.67 billion of cash earnings in the business and private banking, $899 million from corporate and institutional banking, while just $553 million came from personal banking and NZ$750 million from New Zealand banking. Being able to provide everything that clients want can help win and retain institutions.

NAB’s crypto industry investment

According to reporting by the Australian Financial Review, NAB has bought a stake in Zodia Custody, which is part of the bank’s cryptocurrency strategy to safeguard digital assets held by institutional investors rather than launch its own stablecoin.

Zodia Custody is a competitor to Coinbase and has other major investors, including UK bank Standard Chartered, US custody giant Northern Trust and Japanese lender SBI Holdings.

The AFR reported that clients will be able to hold cryptocurrencies such as bitcoin and ether, as well as tokenised real-world assets, including commodities or property.

How much was invested? NAB and Zodia did not want to reveal the size of the investment or the valuation of Zodia Custody, according to the newspaper.

This is not an exclusive arrangement between NAB and the cryptocurrency holding business – Zodia will look to serve a wide array of investors, which includes other banks. NAB is hoping this partnership will put it ahead of the ‘regulatory curve’ and lead to partnerships that could link NAB institutional customers to Zodia. Zodia is also applying for a licence in Japan.

What’s so special about Zodia?

The AFR reported that Australian cryptocurrency laws could lead to requirements that crypto assets are separated from the internet, stored on hard drives and stored in physical bank vaults – this is called cold storage.

The Zodia technology was reportedly originally developed by the UK military which allows communication from a cold storage vault to the internet, but doesn’t allow communications to flow back, enabling offline assets to be traded at close to real-time.

 The AFR reported NAB Ventures managing director Amanda Angelini explained the bank aimed to focus on providing simple, safe and secure services:

This is particularly important in newer fields where technology continues to evolve quickly.

NAB Venture’s investment in Zodia was based on their innovative approach, institution-grade safety and strong work with regulators.

NAB share price snapshot

Since the start of 2024, the NAB share price has climbed more than 16%, as shown on the chart below, while the S&P/ASX 200 Index (ASX: XJO) has only risen around 2%.

The post Own NAB shares? The bank just made an important crypto investment 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 positions in and has recommended Bitcoin, Coinbase Global, and Ethereum. The Motley Fool Australia has positions in and has recommended Bitcoin and Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

S&P/ASX 200 Index (ASX: XJO) gold stocks enjoyed a blistering rally from late February through to late May this year.

That rally was driven by a surge in the gold price.

On 28 February, the yellow metal was trading for US$2,030 per ounce. Amid fast-growing demand and relatively fixed short-term supplies, the gold price then went ballistic, hitting all-time highs of US$2,450 on 21 May.

As you’d expect, this came as good news for leading Aussie gold producers like Northern Star Resources Ltd (ASX: NST), Newmont Corp (ASX: NEM), Gold Road Resources Ltd (ASX: GOR), and Evolution Mining Ltd (ASX: EVN).

How good a news?

Well, from 28 February through to market close on 20 May, the S&P/ASX All Ordinaries Gold Index (ASX: XGD) – which also contains some smaller miners outside of ASX 200 gold stocks – rocketed 31%.

For some context, the ASX 200 gained around 3% over this same period.

Now with the gold price having since retraced to US$2,331 (still near historic highs), ASX 200 gold stocks have given back some of those outsized gains. Indeed, the ASX All Ords Gold Index is down 8% since 20 May.

But that trend could be about to reverse once more, with global central banks potentially supporting a new rally in the gold price.

Here’s how.

ASX 200 gold stocks could get a boost from central banks

There are really two tailwinds that central banks could offer for ASX 200 gold stocks.

First, by cutting interest rates.

Gold, which pays no yield itself, tends to perform better in a low or falling interest rate environment.

Perhaps more importantly, central banks also buy a significant amount of bullion to hold in their vaults. The more they buy, the less there is for everyone else to acquire, which tends to drive prices higher.

Now the past two years have both seen central banks purchasing record amounts of the yellow metal.

And in what should be good news for investors in ASX 200 gold stocks, the World Gold Council’s 2024 Central Banks Gold Reserves survey revealed that four in five respondents expect reserve managers will continue to increase their gold holdings in the next 12 months

The survey collected data from 70 global central banks. And it found that nearly 30% of central banks also plan to add to their own gold reserves within the next year.

The top three reasons to hold gold now, according to the surveyed reserve managers, are:

• Gold’s long-term value (88%)
• Gold’s performance during a crisis (82%)
• Gold’s role as an effective portfolio diversifier (76%)

Commenting on the survey results that could rekindle investor interest in ASX 200 gold stocks, Shaokai Fan, global head of central banks & head of Asia-Pacific, said, “Extraordinary market pressure, unprecedented economic uncertainty and political upheavals around the world have kept gold front of mind for central banks.”

Fan added:

Many of these institutions have become more aware of the asset’s value as a way to manage risks and diversify their portfolios.

What has been remarkable is that despite record demand from the official sector in the last two years coupled with climbing gold prices, many reserve managers still maintain their enthusiasm for gold.

The post How central banks are primed to drive a new ASX 200 gold stock rally appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben 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.

Over the last 12 months, a number of ASX tech stocks have delivered sensational returns for their shareholders.

The likes of Life360 Inc (ASX: 360), Nextdc Ltd (ASX: NXT), Pro Medicus Limited (ASX: PME), and Xero Ltd (ASX: XRO) have all smashed the market with strong gains.

But one ASX tech stock has outperformed them all. So much so, you would have more than tripled your money if you bought its shares a year ago.

Which ASX tech stock?

The ASX tech stock in question is Nuix Ltd (ASX: NXL).

Since this time last year, its shares have rallied an incredible 260%. To put that into context, a $10,000 investment 12 months ago would be worth $36,000 today.

Nuix is a leading provider of investigative analytics and intelligence software. It notes that this software empowers customers to be a force for good by finding truth in the digital world.

It can help users collect, process, and review massive amounts of structured and unstructured data, making it searchable and actionable at scale and speed, with forensic accuracy.

Earlier this month, it updated its guidance for FY 2024. It revealed that based on the receipt of funds relating to an insurance claim made for non-operational legal costs associated with litigation, it now expects its statutory EBITDA to be in the range of $55 million to $60 million in FY 2024. This compares to its previous guidance of $47 million to $52 million for the year.

Is it too late to invest?

The ECP Growth Companies Fund remains positive on the ASX tech stock. It is a high conviction Australian equities portfolio designed to deliver alpha above benchmark.

And it has done this over the last five years, outperforming the S&P/ASX 300 Accumulation Index by 1.6% over the period.

Commenting on Nuix, the fund manager said:

Nuix outperformed in May following a positive trading update to the market, in which the company guided higher on statutory revenue and provided EBITDA guidance. There remains a significant growth opportunity ahead of Nuix, driven by continued growth in unstructured data and the shift to consumption based contracts

This could make it well worth keeping a close eye on this soaring tech stock.

The post The ASX tech stock with ‘a significant growth opportunity ahead’ appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Life360, Nextdc, Pro Medicus, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360, Pro Medicus, and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Pro Medicus. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Nvidia Corp (NASDAQ: NVDA) shares have again made history overnight.

The chip-designing company no longer plays second fiddle to other tech titans, such as Apple Inc (NASDAQ: AAPL) and Microsoft Corp (NASDAQ: MSFT). Rising a further 3.5% to a record US$135.58 per share, Nvidia is now the most valuable company in the world.

While Nvidia has pipped its peers, the lead is narrow. Apple, Microsoft, and Nvidia all hover around the US$3.3 trillion mark. A measly 1.6% gain in Apple shares would put it back in the pole position from the third spot.

AI powerhouse takes the throne

Artificial Intelligence (AI) is the term on everyone’s lips this year. Tens of billions of dollars have been spent upgrading data centres worldwide with AI-enabling hardware to meet AI-powered productivity, product optimisation, and performance.

No one has benefitted more from this spending than Nvidia. Recent data suggests the company, led by Jensen Huang, holds a market share of between 70% and 95% in AI chips. A feat that has delivered incredible growth in Nvidia’s revenue, profits, and shares in recent years.

For the 12 months ending April 2024, Nvidia recorded revenue of US$79.8 billion and net profits after tax (NPAT) of US$42.6 billion, respectively, an increase of 208% and 789%. Yet, the appetite for AI hardware appears to be as strong as ever.

In the company’s first-quarter 2024 earnings call last month, Nvidia chief financial officer Colette Kress said:

Demand for H200 [an accelerated computing graphics processing unit] and Blackwell is well ahead of supply, and we expect demand may exceed supply well into next year.

Such a strong outlook has pushed earnings estimates among analysts for FY25 to around US$63 billion. For context, Apple earned US$100 billion in net profits during its last four quarters, while computer giant Microsoft generated US$86 billion.

However, some investors see Nvidia as the backbone of AI for years to come.

What are analysts saying about Nvidia shares?

Despite being the most expensive company in the US$3 trillion league based on the price-to-earnings (P/E) ratio, several analysts still see blue skies ahead for the green graphics card company.

Rosenblatt, a New York-based broker, remains bullish on Nvidia shares after its newfound number-one status. Last night, the broker upgraded the shares’ price target to US$200. The improved target rides on Nvidia obtaining greater market share in high-margin areas with its Blackwell, Rubin, and Hopper lineup.

The beefed-up Nvidia price target suggests an additional 47.5% upside.

However, Oliver Pursche of Wealthspire Advisors warns of what a slipup would entail:

Nvidia has been getting a lot of positive attention and has been doing a lot of things very correctly, but a small misstep is likely to cause a major correction in the stock, and investors should be careful.

Nvidia shares are up 181.5% in 2024 alone.

The post Nvidia shares reach world’s most valuable milestone. Where to now? appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler has positions in Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple, Microsoft, and Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Apple, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

It’s been a fairly miserable day for the S&P/ASX 200 Index (ASX: XJO) and many ASX 200 shares so far this Wednesday. At the time of writing, the ASX 200 has retreated by 0.1% after briefly rising into green territory this morning. But let’s talk about what’s going on with ASX uranium shares.

Unlike the broader market, ASX uranium shares are well and truly in demand this session. Take the Boss Energy Ltd (ASX: BOE) share price. Boss Energy shares are currently outperforming the broader market, up a healthy 0.7% at $4.13 each so far.

Paladin Energy Ltd (ASX: PDN) shares are doing even better, presently up a rosy 1.14% at $13.73 each.

But ahead of the pack is the Deep Yellow Limited (ASX: DYL) share price. Deep Yellow stock has rocketed a hefty 3.3% at this point of the trading day. That puts the company at $1.47 a share.

The BetaShares Global Uranium ETF (ASX: URNM) is also doing well. It’s currently enjoying a 1.68% lift up to $9.70 a unit.

So what’s going on here? Why are these ASX uranium shares outperforming the ASX 200 so comprehensively this Wednesday?

Why are ASX uranium shares going gangbusters today?

Well, there’s been no major news or announcements out of any of the shares listed above that might easily explain this bullishness we see from ASX investors.

However, another development could be a factor here.

This morning, the Federal Opposition gave the Australian public some concrete details about its plans to establish a domestic nuclear energy industry.

Nuclear energy has been banned in Australia for decades. The only reactor on Australian soil is currently used to produce nuclear medicines. There are no nuclear power plants in the country.

But if the Opposition has its way, this is set to change. This morning, Liberal Opposition Leader Peter Dutton outlined a plan to build up to seven new nuclear reactors on the sites of decommissioned (or soon-to-be-decommissioned) coal-fired power plants.

Dutton revealed two sites in New South Wales, two in Queensland and one each in Victoria, South Australia and Western Australia. They include NSW’s Liddell Station, the Loy Lang site in Victoria and the Tarong Station in Queensland.

Here’s some of what Dutton said in the press release today:

And today, we announce seven locations, located at a power station that has closed or is scheduled to close, where we propose to build zero-emissions nuclear power plants…

Each of these locations offer important technical attributes needed for a zero-emissions nuclear plant, including cooling water capacity and transmission infrastructure, that is, we can use the existing poles and wires, along with a local community which has a skilled workforce.

A key advantage of modern zero-emissions nuclear plants is they can be plugged into existing grids. This means they can effectively replace retired or retiring coal plants…

Dutton’s plan would see the first nuclear plants operational from 2035 to 2037. This could be characterised as optimistic, given that a recent CSIRO report found that it would take at least 15 years for Australia to build and fire up a nuclear plant. That would make for a 2040 start at the earliest.

A nuclear Australia

But putting that aside, it’s unlikely that Dutton’s announcement today will herald any new significant business opportunities for ASX uranium shares. Stocks like Boss Energy and Deep Yellow already have eager markets for their uranium across North America, Europe and Asia.

As my Fool colleague Bernd put it back in March:

Now even if Australia opts to eventually embrace nuclear power, ASX uranium shares are unlikely to see any domestic demand for their product for many years yet.

But even so, it’s entirely possible that Dutton’s announcement today is what is giving investors a sentiment boost.

There is arguably already an expectation that global uranium demand will only grow in the years ahead as other countries around the world swap coal for uranium. Today’s announcement from the Liberal Party does nothing to dent this narrative.

The post Here’s why ASX uranium shares like Deep Yellow are running hot today appeared first on The Motley Fool Australia.

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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 recommended Betashares Global Uranium Etf. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Over the last 12 months, Woolworths Group Ltd (ASX: WOW) shares have underperformed the market

During this time, the supermarket giant’s shares have lost 16% of their value. As a comparison, the ASX 200 index is up 6.5% over the same period.

So, unless there’s a significant rally over the remainder of this month, it’s looking like FY 2024 is going to be one to forget for shareholders.

But will things be better in FY 2025? Let’s have a look.

Will Woolworths shares perform better in FY 2025?

The next financial year looks set to be an eventful one for Woolworths and its shares.

This is because the supermarket industry is currently being looked at by regulators due to price gouging allegations.

It’s fair to say that the outcome of these inquiries could have a major say in the performance of Woolworths shares.

In fact, the bullish analysts at Goldman Sachs have named it as a risk factor for investors to consider. They said:

Key downside risks: Worse AU food volumes, increase in competitive intensity, online sales underperformance, retail media benefits not materializing, poor management of cost inflation. Worse than feared ACCC inquiry outcomes.

But if all goes to plan, Goldman sees big returns on the cards for investors in FY 2025.

Big return potential

According to a recent note out of the investment bank, its analysts have a conviction buy rating and $39.40 price target on its shares.

If Woolworths shares were to end the financial year where they currently trade and then rise to that level in FY 2025, it would mean a very attractive return of 18% for investors. In addition, a ~3% dividend yield is expected over the next 12 months.

Goldman thinks the company’s shares are great value right now. Especially given its defensive qualities. It said:

WOW is the largest supermarket chain in Australia with an additional presence in NZ, as well as selling general merchandise retail via Big W. We are Buy rated on the stock as we believe the business has among the highest consumer stickiness and loyalty among peers, and hence has strong ability to drive market share gains via its omni-channel advantage, as well as its ability to pass through any cost inflation to protect its margins, beyond market expectations. The stock is trading below its historical average (since 2018), and we see this as a value entry level for a high-quality and defensive stock.

The post Could Woolworths shares beat the market in FY25? appeared first on The Motley Fool Australia.

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• How much could a $10,000 investment in Woolworths shares become in one year?

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. 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.