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Woodside Energy Group Ltd (ASX: WDS) shares are a popular option for investors looking for passive income.

And it isn’t hard to see why.

Each year, the energy giant shares a portion of its ample profits with its lucky shareholders.

For example, in FY 2023, the company paid out fully franked dividends of 140 US cents per share. This represented approximately 80% of Woodside’s underlying net profit after tax of US$1,660 million, which was the top end of its targeted dividend payout range.

But those dividends have long since been paid to shareholders. What’s next for Woodside shares and its dividend?

Let’s take a look at what income investors could receive if they picked up 1,000 shares in Australia’s leading energy producer.

Buying 1,000 Woodside shares

Firstly, to purchase 1,000 Woodside shares you would need to make a fairly large investment in the company.

At yesterday’s close, the company’s shares were changing hands for $27.63.

This means that you would need to invest $27,630 in order to snap up 1,000 Woodside shares.

But it sure could be worth the investment according to analysts at Morgans. That’s because the broker has the company on its best ideas list with an add rating and $36.00 price target.

If the Woodside share price were to rise to that level, it would value those 1,000 shares at $36,000. That’s 30% higher than the current market value of those units. Morgans commented:

A tier 1 upstream oil and gas operator with high-quality earnings that we see as likely to continue pursuing an opportunistic acquisition strategy. WDS’s share price has been under pressure in recent months from a combination of oil price volatility and approval issues at Scarborough, its key offshore growth project. With both of those factors now having moderated, with the pullback in oil prices moderating and work at Scarborough back underway, we see now as a good time to add to positions.

Passive income

But let’s now focus on the main event – passive income.

Morgans thinks that Woodside shares could generate a nice source of passive income this year and next.

The broker is currently forecasting a fully franked dividend of approximately A$1.25 per share in FY 2024. This equates to a dividend yield of 4.5% and would generate approximately A$1,250 in passive income.

And if you’re willing to be patient, you will be rewarded with a bigger dividend in FY 2025 according to Morgans. It is forecasting a fully franked dividend of approximately A$1.57 per share for the next financial year.

This equates to a 5.7% dividend yield and would mean passive income of approximately $1,570 from your 1,000 Woodside shares.

In summary, that’s passive income of:

• $1,250 in FY 2024
• $1,570 in FY 2025

Overall, this could make Woodside shares worth considering if you’re not averse to investing in the energy sector.

The post If I buy 1,000 Woodside shares, how much passive income will I receive? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• The pros and cons of buying Woodside shares right now
• Buy these ASX 200 dividend shares for passive income in June
• 5 things to watch on the ASX 200 on Monday
• Here are the top 10 ASX 200 shares today

Motley Fool contributor James Mickleboro has positions in Woodside Energy Group. 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 Australian share market typically provides investors with a 4% dividend yield.

And while that it undoubtedly attractive, you don’t have to settle for that.

That’s because there are ASX shares out there that have been tipped to provide investors with above-average yields.

For example, listed below are two ASX shares that are forecast to provide dividend yields of 5% and 6.5% this year. Here’s what you need to know about them:

HomeCo Daily Needs REIT (ASX: HDN)

Analysts at Morgans think that HomeCo Daily Needs would be a great ASX share to buy for dividends.

It is an Australian REIT with a mandate to invest in convenience-based assets across the target sub-sectors of neighbourhood retail, large format retail and health and services.

Morgans currently has an add rating and $1.37 price target on its shares. It believes the company’s high quality tenants and development pipeline mean it is well-placed for the future. The broker said:

HDN’s $4.7bn portfolio is focused on daily needs assets (Large Format Retail; Neighbourhood; and Health & Services) across +50 properties with the top 3 tenants Bunnings, Coles and Woolworths. 70% of leases are fixed; 21% linked to CPI; and 9% based on supermarket turnover. The portfolio has resilient cashflows and continues to be a beneficiary of accelerating click & collect trends. +80% of tenants are national and ~75% of tenants offer click & collect reinforcing the importance of assets being able to support ‘last mile logistics’. Sites are also in strategic locations with strong population growth (+80% metro). HDN offers an attractive distribution yield and the development pipeline provides growth opportunities.

The broker expects HomeCo Daily Needs to pay dividends per share of 8 cents in FY 2024 and then 9 cents in FY 2025. Based on the current HomeCo Daily Needs share price of $1.23, this will mean yields of 6.5% and 7.3%, respectively.

Telstra Group Ltd (ASX: TLS)

Another ASX share that could offer above-average dividend yields is Telstra. It is of course Australia’s largest telecommunications company.

Goldman Sachs is positive on the company and sees a lot of value in its shares at current levels. It has a buy rating and $4.25 price target on them. The broker also sees opportunities for Telstra to unlock further value down the line. It explains:

Telstra is the incumbent telecom operator in Australia. We believe the low risk earnings (and dividend) growth that Telstra is delivering across FY22-25, underpinned through its mobile business, is attractive. We also believe that Telstra has a meaningful medium term opportunity to crystallise value through commencing the process to monetize its InfraCo Fixed assets – which we estimate could be worth between A$22-33bn. Although there is some debate around the strategic benefits, we see a strong rationale for monetizing the recurring NBN payment stream, given its inflation-linked, long duration cash flows could be worth $14.5bn to $17.9bn, with no loss of strategic benefit.

In respect to dividends, Goldman is forecasting fully franked dividends of 18 cents per share in FY 2024 and then 18.5 cents per share in FY 2025. Based on the current Telstra share price of $3.51, this will mean yields of 5.1% and 5.3%, respectively.

The post Buy these ASX shares and get 5% and 6.5% dividend yields appeared first on The Motley Fool Australia.

More reading

• 3 top ASX 300 dividend shares to buy now for $3,000 a month in passive income
• Here’s the new Telstra dividend forecast through to 2026
• Joining the revolution: How I’d invest in ASX AI shares right now
• Beat the bank! 2 ASX stocks worth buying to make more money than interest on savings
• With a dividend yield over 7%, are Telstra shares a buy for income?

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 positions in and has recommended Telstra Group. The Motley Fool Australia has recommended HomeCo Daily Needs REIT. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

When looking for successful stock market investors for inspiration, there is arguably no better figure to turn to than the legendary Warren Buffett.

Over his exceptionally long investing career, Buffett has achieved astonishing returns, turning his company Berkshire Hathaway Inc (NYSE: BRK.A)(NYSE: BRK.B) from a failing textiles mill into the US$881 billion behemoth it is today.

Fortunately for every single investor on the planet, Buffett has always been generous with his wisdom and guidance. His annual letters to the shareholders of Berkshire Hathaway, as well as his famous shareholder meetings, are typically jam-packed with advice, tips and cautionary tales.

So today, let’s discuss how Warren Buffett’s advice is guiding my own ASX share investing in 2024.

How Waren Buffett is helping my 2024 stock market investing

Buffett: Keeping it simple

The investing world is perpetually in the grips of the latest fad. Whether it be lithium stocks, uranium shares or cryptocurrency miners, there always seems to be a sector or corner of the market that is booming as investors flood in to try and grab a piece of the next big thing.

But Buffett has never been a trendjumper or setter for that matter. In fact, he typically warns investors to stay in their lane. Here are two quotes that best sum up Buffett’s attitude:

Beware the investment activity that produces applause; the great moves are usually greeted by yawns.

Never invest in a business you cannot understand.

As such, I’ll be staying away from the hot stocks in 2024, sticking to businesses that I can easily understand. That’s why I’ll be far more likely to buy shares of say Coles Group Ltd (ASX: COL) than Arcadium Lithium plc (ASX: LTM).

Look for ASX shares with something special

Disciples of Warren Buffett would be well aware of the man’s love of what he calls an economic moat. A moat is a durable competitive advantage that a company can possess, which helps it stave off competition:

The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage.

This could come in the form of a strong brand, a product that investors find difficult to stop using, or a cost advantage that ensures a company’s products are the cheapest available.

We can see this reflected in Buffett’s own portfolio at Berkshire. Most of Berkshire’s holdings have an obvious moat – Coca-Cola‘s universally known brand or Apple‘s reputation for quality products are two such examples.

Using this principle, I’m hopeful that my next ASX share buy in 2024 will be a company with a strong moat. It might be Transurban Group (ASX: TCL) for its network of almost unavoidable toll roads across Australia or perhaps Lottery Corp Ltd (ASX: TLC) for its exclusive rights to run lotteries and Keno in most Australian states.

Foolish takeaway

In my view, there is no one better than Warren Buffett if you want investing advice and inspiration. As such, my next ASX buy will hopefully be one that Buffett would approve of.

The post How Warren Buffett’s advice is guiding the ASX shares I’m buying in 2024 appeared first on The Motley Fool Australia.

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• Forget lottery tickets, I’d buy these ASX shares instead
• Leading brokers name 3 ASX shares to buy today
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Motley Fool contributor Sebastian Bowen has positions in Apple, Berkshire Hathaway, and Coca-Cola. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple, Berkshire Hathaway, Lottery, and Transurban Group. The Motley Fool Australia has positions in and has recommended Coles Group. The Motley Fool Australia has recommended Apple and Berkshire Hathaway. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

On Tuesday, the S&P/ASX 200 Index (ASX: XJO) had a subdued session and dropped into the red. The benchmark index fell 0.3% to 7,766.7 points.

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

ASX 200 expected to fall

It looks set to be another subdued day for the Australian share market on Wednesday following a mixed start to the week in the United States. According to the latest SPI futures, the ASX 200 is expected to open the day 49 points or 0.6% lower. On Wall Street, the Dow Jones fell 0.55%, the S&P 500 was flat, and the Nasdaq pushed 0.6% higher. The latter hit a record high and rose beyond 17,000 points for the first time.

Oil prices surge

ASX 200 energy shares such as Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) could have a great session after oil prices surged overnight. According to Bloomberg, the WTI crude oil price is up 3.1% to US$80.15 a barrel and the Brent crude oil price is up 1.65% to US$84.47 a barrel. Traders were feeling confident ahead of the highly anticipated OPEC+ meeting.

Santos supply agreement

The Santos Ltd (ASX: STO) share price will be on watch today. That’s because after the market close on Tuesday, the energy company announced a binding long-term LNG supply and purchase agreement with Hokkaido Gas. The long-term agreement will supply up to approximately 0.4 million tonnes per annum of LNG for 10 years, commencing in 2027, from Santos’ LNG portfolio on a delivered ex-ship basis.

Gold price races higher

ASX 200 gold shares Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could have a good day after the gold price raced higher overnight. According to CNBC, the spot gold price is up 1.1% to US$2,359.2 an ounce. A softer US dollar boosted the precious metal.

Buy Pro Medicus shares

Pro Medicus Limited (ASX: PME) shares are good value according to analysts at Goldman Sachs. In response to news that the health imaging technology company has won five new contracts worth $45 million, the broker has reiterated its buy rating with an improved price target of $136.00. This implies potential upside of 19% from current levels. It commented: “In our view, PME is well positioned into FY25 given a full year benefit of some large and high profile contracts, in addition to the accelerating frequency and size of new contract wins.”

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

More reading

• Here are the top 10 ASX 200 shares today
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• 5 things to watch on the ASX 200 on Tuesday
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Motley Fool contributor James Mickleboro has positions in Pro Medicus and Woodside Energy Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Pro Medicus. 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.

Whilst one in four Australians rank superannuation as the most important investment vehicle for retirement and long-term wealth building, 85% are actively investing outside their super funds.

So, how are Australians investing their spare cash?

In this article, we take a look at the most popular investment options identified in a new survey.

What are the most popular investments outside superannuation?

Research by financial advisory Findex shows the most common investments Australians have outside their superannuation are bank savings (64%), property (38%), cash (35%), and shares (34%).

Other investments include exchange-traded funds (ETFs) (17%), cryptocurrency (17%) and bonds (6%).

Findex says the range of investment options adopted indicates “not only nuanced preferences and risk appetites but a preference for liquidity and risk aversion among a significant portion of the population”.

When the data is broken down by generation, we see different investment strategies at work.

Generational differences in preferred investments

Here is a summary of how investment choices outside superannuation differ between the generations.

Baby Boomers (born 1945-1964)

Baby Boomers prefer to invest in bank savings (60%), property (50%) and shares (46%).

Gen Xers (born 1965-1980)

Gex Xers like bank savings (57%), property (43%) and shares (36%).

Millennials (born 1981-1996)

Millennials prefer bank savings (70%), property (41%), cash (35%) and shares (33%). Interestingly, the survey shows this age group is the biggest player in five different categories of investments. They are bank savings, as stated; cryptocurrency (22%), ETFs (21%), managed funds (15%), and bonds (8%).

Gen Zs (born 1997-2009)

Gen Z is the biggest investor in cash (42%) and the second biggest investor in bank savings (66%). They also like shares (22%), ETFs (17%), property (14%) and cryptocurrency (13%).

Investing in ASX shares during retirement

Most superannuation funds primarily invest in ASX shares and international equities like US shares.

Individual Australians can do the same thing outside their super by setting up a brokerage account and buying shares with their own funds.

Investors in retirement typically want to maximise their passive income by owning preferably fully franked ASX dividend shares.

Some of the most popular ASX dividend shares include the big bank shares, such as National Australia Bank Ltd (ASX: NAB) and Westpac Banking Corp (ASX: WBC). Income investors also like the big mining stocks, such as Fortescue Ltd (ASX: FMG) and BHP Group Ltd (ASX: BHP).

Ray David from Blackwattle Partners says ASX 200 mining stocks present more of a buying opportunity today than bank stocks, which have had a significant run of share price growth since last November.

The post Planning your retirement? Here are the most popular investments outside superannuation appeared first on The Motley Fool Australia.

More reading

• How much could $10,000 invested in Fortescue shares be worth next year?
• 3 top ASX 300 dividend shares to buy now for $3,000 a month in passive income
• Are CBA share buyers getting the highest growth in return for being the most expensive?
• BHP share price marching higher amid fast approaching $75 billion takeover deadline
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Motley Fool contributor Bronwyn Allen has positions in BHP Group. 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.

We’d all like to be ‘set up for life’. That’s probably the main reason most of us make the trek to work every day and save where we can, when we can. But if you want to fast-track your financial independence and truly be set up for life, just padding out your savings account might not be enough to cut the mustard. That’s why I believe investing in ASX shares is essential for a comfortable retirement.

However, investing in the share market can be a risky venture. Sure, those who stick to passively investing in index funds and similar investments are probably going to be just fine, as long as they don’t do silly things like sell in a market crash.

But if you want to buy your own shares and establish a bespoke portfolio, you can run into all kinds of issues that might prevent you from establishing financial independence. So today, let’s discuss two ASX shares that I think can help anyone get their finances set up for life.

2 ASX shares to set you up for life

Goodman Group (ASX: GMG)

First up is a real estate investment trust (REIT) in Goodman Group. Goodman has made a name for itself over the past few years as one of the ASX’s most successful REITs. Goodman units have risen by a whopping 157% or so over just the past five years. But I think there is plenty of growth left in Goodman’s tank. I particularly like this REIT’s focus on data centres and other future-facing industrial property.

Unlike most REITs, Goodman does not normally pay a substantial dividend. Today, its units are sitting on a trailing yield of just 0.88%. But even so, this investment has more than made up for that in the past with its stunning capital growth. I think this REIT would be great to hold in any ASX share portfolio today.

BetaShares Global Cybersecurity ETF (ASX: HACK)

Next up we have an investment that’s not technically an ASX share, but an exchange-traded fund (ETF). HACK delivers pretty much what it says on the tin – a portfolio made up of the largest and most successful cybersecurity companies in the world. These include CrowdStrike, Cisco, Palo Alto and Broadcom.

I think an investment in this trend is a pretty good bet. For one, there is little doubt that cybersecurity spending is only going to continue to rise quickly in the years ahead as businesses, governments and individuals pay up to prevent damaging data breaches and hacks.

But HACK has proven its worth as an investment in the past. Since its inception in 2016, this ETF has returned an average of 17.21% per annum (as of 30 April). Past performances are never a guarantee of future returns. However, given the ever-increasing importance of cybersecurity to everyone on the planet, I think this is a trend worth investing in.

The post 2 ASX shares that could help set you up for life 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 positions in and has recommended BetaShares Global Cybersecurity ETF, Cisco Systems, CrowdStrike, Goodman Group, and Palo Alto Networks. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Broadcom. The Motley Fool Australia has positions in and has recommended BetaShares Global Cybersecurity ETF. The Motley Fool Australia has recommended CrowdStrike and Goodman Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

It is fair to say that Fortescue Ltd (ASX: FMG) shares have been a great place to invest over the last 12 months.

During this time, the iron ore miner’s shares have outperformed the market significantly with a gain of over 33%.

This would have turned a $10,000 investment into approximately $13,300.

In addition, over this period the mining giant has paid out total fully franked dividends of $2.08 per share. This boosts the total return to approximately 44% and means a $10,000 investment would have become $14,400 including dividends.

But those returns are now firmly behind us. So, let’s take a look at what could happen in the future with another $10,000 investment.

Investing $10,000 in Fortescue shares

Firstly, with Fortescue shares currently trading at $26.51, a $10,000 investment (plus an extra $20.78) would lead to you owning 378 units.

Let’s now see what those units could be worth in 12 months.

Unfortunately, analysts at Goldman Sachs don’t believe that history will repeat itself for investors between now and this time next year. In fact, the broker thinks that Fortescue shares are overvalued and could be destined to crash deep into the red.

According to a recent note, Goldman has a sell rating and $16.90 price target on the company’s shares.

If this recommendation proves accurate, it will give those 378 Fortescue shares a market value of $6,388.20. That’s approximately 36% less than you started with.

And Goldman isn’t expecting the Fortescue dividend to be anywhere near as generous in FY 2024 and FY 2025.

The broker is forecasting a fully franked FY 2024 final dividend of 83 cents per share and then total dividends of 93 cents per share in FY 2025.

If we assume the usual second-half weighting for its dividend payments, this could mean an interim dividend of 39 cents per share for FY 2025.

This brings its total estimated dividends for the next 12 months to $1.22 per share. Based on its current share price, this would mean a 4.6% dividend yield. And for those 378 shares, it would generate $461.16 in dividends.

This leaves us with a holding valued at $6,849.36 including dividends, well short of our initial investment of $10,000.

Commenting on its sell rating, Goldman said:

We continue to rate FMG a Sell on: 1. Relative valuation: the stock is trading at a premium to RIO & BHP on our estimates; 1.4x NAV vs. BHP at c. 0.9x NAV and RIO at 0.9x NAV, ~7.0x NTM EV/EBITDA (vs. BHP/RIO on c. 5.5x/4.5x), and c. 2% FCF vs. BHP/RIO on c. 6%/7%.

Though, it is worth acknowledging that Goldman has been calling Fortescue shares overvalued for well over a year and this didn’t stop them smashing the market over the past 12 months. So, it certainly isn’t set in stone that this miner’s shares are about to crash. But don’t be surprised if they do.

The post How much could $10,000 invested in Fortescue shares be worth next year? appeared first on The Motley Fool Australia.

More reading

• 3 top ASX 300 dividend shares to buy now for $3,000 a month in passive income
• Are Fortescue shares a dividend trap?
• Own Fortescue shares? Here’s why you now own an ASX tech stock!
• ASX 200 mining stocks flying higher on ‘most relaxed’ Chinese stimulus ever
• Top ASX dividend shares to buy in May 2024

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.

The Australian stock market has the potential to generate a second income of $2,000, $10,000 or even more. I believe it’s possible to unlock that investment cash flow by saving a small amount each week.

ASX dividend shares have the capability to provide a good dividend yield, growing dividends and capital growth.

Businesses don’t need to have a dividend payout ratio of 100%, paying out all of their profit, to deliver a good dividend yield. Franking credits can be a big boost to the after-tax dividend yield from Australian companies because of their refundable nature.

If I were trying to deliver a second income of $2,000 by saving $35 a week, I’d pursue one of two strategies.

High-yield ASX dividend shares

Choosing stocks with a large dividend yield can mean investors don’t need to grow their investment balance as high.

For example, if someone had a portfolio with a 2% dividend yield, they’d need a portfolio worth $100,000 to generate $2,000 of annual dividend income. However, if that portfolio had a 6% dividend yield, an investor would only need a portfolio worth $33,333 to generate $2,000 of dividend income.

Using the Moneysmart calculator, if I saved/invested $35 per week and that portfolio made returns of 10% per annum, it would take 11 years to reach a balance of $33,727, assuming all the dividends are re-invested. Meanwhile, it would take 20 years to reach a portfolio value of over $100,000.

For a portfolio of high-yield ASX dividend shares, I’d want to own businesses with good longer-term earnings drivers that operate in appealing industries. A high yield alone is not enough to make a good investment.

Examples of high-yield stocks I’ve written about recently include Metcash Ltd (ASX: MTS), GQG Partners Inc (ASX: GQG), Rural Funds Group (ASX: RFF), Medibank Private Ltd (ASX: MPL), Bailador Technology Investments Ltd (ASX: BTI) and Charter Hall Long WALE REIT (ASX: CLW).

However, these stocks usually have a lower earnings growth rate, partly because they are not re-investing as much profit as they could.

Dividend growth stocks

Another way to invest for a second income is to choose growing businesses that tend to increase their payouts for investors. Owning those ASX shares means our dividend income is increasing organically, hopefully at a pleasing rate.

These growing stocks typically start with a lower dividend yield because the market is taking into account the potential earnings growth in the coming years. Over time, those stocks can keep hiking the dividend, leading to a stronger yield on cost.

I look to buy these types of businesses for my dividend portfolio because earnings growth can promote share price growth. The market usually values a business based on its profit.  

In terms of specific examples, I’ve invested in Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), Brickworks Limited (ASX: BKW), Collins Foods Ltd (ASX: CKF) and Johns Lyng Group Ltd (ASX: JLG).

As I mentioned, the dividend yield is usually lower with these stocks. If we assume a grossed-up dividend yield of 3.5%, we would need a portfolio of $57,000.

Ultimately, I think the dividend growth stock method is a better choice for a second income because of the compounding effects of earnings growth and capital growth. The amount of dividends is important, but capital growth dollars are rewarding too, particularly if/when you sell shares.

The post Here’s how I’d target a $2,000 second income by investing $35 a week appeared first on The Motley Fool Australia.

More reading

• ASX investors may choose supermarkets over Wesfarmers shares after ACCC inquiry: broker
• 3 ASX shares with a long history of increasing dividends
• 2 cheap ASX dividend shares I’d buy in retirement
• If I had to own only one ASX 200 share forever, this would be it
• 2 of the best ASX 200 blue chip shares that money can buy

Motley Fool contributor Tristan Harrison has positions in Bailador Technology Investments, Brickworks, Collins Foods, Johns Lyng Group, Metcash, Rural Funds Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bailador Technology Investments, Brickworks, Johns Lyng Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks, Rural Funds Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Bailador Technology Investments, Collins Foods, Johns Lyng Group, and Metcash. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Woolworths Group Ltd (ASX: WOW) shares have been having a tough time over the last 12 months.

During this time, the supermarket giant’s shares have lost about 18% of their value.

This means that a $10,000 investment in Woolworths would now be worth approximately $8,200.

Whereas over the same period, the ASX 200 index has risen by almost 8%. This would have turned a $10,000 investment into $10,800.

That’s a disappointing opportunity cost of $2,600 from investing in Woolworths shares.

But could the worst be over? Is now the time for investors to snap up the retailer’s shares while they are cheap?

Well, Goldman Sachs certainly thinks it is. The broker sees significant value in its shares at the current level and has named a few reasons why it thinks investors should be investing today.

3 reasons Woolworths shares could be cheap

One of the reasons that Goldman Sachs believes investors should be buying the company’s shares is its customer loyalty.

It notes that Woolworths has some of the highest consumer stickiness and loyalty among its peers. The broker expects this to drive market share gains.

Another reason it is positive is the company’s ability to pass on cost inflation. It believes this will protect Woolworths’ margins more than the market currently anticipates.

Finally, the broker highlights that Woolworths shares are trading at levels well below historical averages. Given its positive sales growth outlook, it feels this is unwarranted and has created a compelling buying opportunity. Goldman summarises:

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 broker currently has a conviction buy rating and $39.40 price target on its shares. Based on its current share price of $31.54, this implies potential upside of 25% for investors over the next 12 months.

In addition, the broker is forecasting 3.4%+ dividend yields from Woolworths shares through to at least FY 2026.

The post 3 reasons this broker thinks Woolworths shares are a cheap buy 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 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.

The post Here are the top 10 ASX 200 shares 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 positions in and has recommended Pro Medicus. The Motley Fool Australia has recommended Pro Medicus and Treasury Wine Estates. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.