Tag: Fool

On Thursday, the S&P/ASX 200 Index (ASX: XJO) had a poor session and dropped into the red. The benchmark index fell 0.45% to 7,811.8 points.

Will the market be able to bounce back from this on Friday and end the week on a high? Here are five things to watch:

ASX 200 poised to sink

The Australian share market looks set to end the week deep in the red following a poor session on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open 89 points or 1.1% lower this morning. On Wall Street, the Dow Jones was down 1.5%, the S&P 500 fell 0.75%, and the NASDAQ was 0.4% lower.

Oil prices fall

ASX 200 energy shares such as Beach Energy Ltd (ASX: BPT) and Karoon Energy Ltd (ASX: KAR) could have a tough finish to the week after oil prices dropped again overnight. According to Bloomberg, the WTI crude oil price is down 1% to US$76.81 a barrel and the Brent crude oil price is down 0.7% to US$81.30 a barrel. This was the fourth session in a row of declines for oil prices.

Buy Xero shares

The Xero Ltd (ASX: XRO) share price surged higher on Thursday following the release of the cloud accounting platform provider’s full year results. Despite its strong gain, Goldman Sachs believes that Xero shares are still great value. According to a note, the broker has reiterated its conviction buy rating with an improved price target of $164.00. This implies almost 22% upside for investors over the next 12 months. It commented: “Our 12m TP is +5% to A$164, reflecting earnings and roll-forward to FY26E base-year (multiple reduced to 33X, from 40X). Stay Buy rated (on CL).”

Gold price sinks

ASX 200 gold shares Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could have a difficult finish to the week after the gold price sank overnight. According to CNBC, the spot gold price is down 2.4% to US$2,335.3 an ounce. This was driven by hawkish comments out of the US Federal Reserve.

Nufarm shares rated hold

Nufarm Ltd (ASX: NUF) shares remain close to being fully valued despite a heavy decline on Thursday. In response to the agricultural chemicals company’s half year results, Bell Potter has retained its hold rating and cut its price target down to $5.10 (from $6.35). The broker said: “We see FY24e as an abnormally difficult year and believe the beyond yield earnings story is compelling. However, we struggle to see the catalyst to drive a ~20% upward movement in ag-chem prices by FY26e (which is required to achieve group revenue targets), in the context of 9yr highs of exports exChina, while pricing remains subdued.”

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

More reading

• What are analysts saying about Xero shares following its blockbuster results?
• Here are the top 10 ASX 200 shares today
• Beaten-up ASX 200 stock surges 12% on buyout rumour
• Why Australian Ethical, Cromwell Property, Smartpay, and Xero shares are surging
• ASX 200 shares vs. property: Which has performed better since the COVID crash?

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

Xero Ltd (ASX: XRO) shares certainly were in fine form on Thursday.

The cloud accounting platform provider’s shares ended the day almost 9% higher at $134.84.

This compares favourably to a 0.45% decline by the ASX 200 index.

Why did Xero shares rocket?

Investors were scrambling to buy the company’s shares after being impressed with its FY 2024 results.

For the 12 months ended 31 March, Xero reported a 22% increase in operating revenue to NZ$1.71 billion. This was driven by a 419,000 increase in subscribers to 4.16 million and a 14% lift in average revenue per user to NZ$39.29.

At the end of the period, the company’s annualised monthly recurring revenue reached almost NZ$2 billion, which is up 26% year on year.

Also increasing strongly were Xero’s earnings. Its adjusted EBITDA jumped 75% to NZ$526.5 million and its net profit swung from a loss of NZ$133.5 million to positive NZ$174.6 million.

Also catching the eye was the company’s free cash flow generation. Xero’s free cash flow was NZ$342.1 million for the 12 months. This is more than triple the NZ$102.3 million the company recorded in FY 2023.

Broker reaction

Analysts at Goldman Sachs were impressed with the result and appear to feel vindicated for having Xero shares on their conviction list.

Commenting on the company’s results, the broker said:

Key positives: (1) Rule of 40 exceeded (41%) and record EBIT margins delivered (2H24 of 21% vs. 10% in 1H24, 8% 2H23) as XRO benefits from strong revenue growth, cost controls and much lower than expected capex. However we do note some delayed product investment and associated CAC contributed to the lower than expected expense ratio (i.e. 73% vs. c.75% guidance that was re-iterated in February); (2) Revenue trends into FY25 are much stronger than anticipated, given better exit-ARPUs, particularly in the International segment. (3) Subscriber growth in the key UK (+17k) & NA (+3k) markets was stronger than GSe.

In light of the above, its analysts have reiterated their conviction buy rating and lifted their price target to $164.00. Based on the current Xero share price of $134.84, this implies potential upside of almost 22% for investors over the next 12 months. Goldman concludes:

We revise XRO FY25-26 EBIT +2% to +1%, to reflect a stronger revenue outlook (+4% across FY25-26) partly offset by higher costs (72.9% ratio in FY25). Our 12m TP is +5% to A$164, reflecting earnings and roll-forward to FY26E base-year (multiple reduced to 33X, from 40X). Stay Buy rated (on CL).

The post What are analysts saying about Xero shares following its blockbuster results? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today
• Why Australian Ethical, Cromwell Property, Smartpay, and Xero shares are surging
• Xero share price leaps 8% on staggering earnings upheaval
• 5 things to watch on the ASX 200 on Thursday

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

The world is currently going through a major transition to clean energy.

And while there are many ways to gain exposure to this megatrend, one that investors may be overlooking is Worley Ltd (ASX: WOR).

That’s the view of analysts at Goldman Sachs, which have just upgraded the ASX 100 stock on the belief that it will benefit greatly from the energy transition.

What is Worley?

Worley is a global engineering company that provides engineering design and project delivery services. This includes providing maintenance, reliability support services, and advisory services to the energy, chemical and resources sectors.

It is the ASX 100 stock’s exposure to the energy sector that is getting Goldman most excited. It explains:

WOR remains well-placed to benefit from the energy transition. Notwithstanding some near term deceleration in our estimates, we believe WOR’s outlook remains positive supported by customer capex with investments in 1) Energy security; 2) Energy affordability; and 3) Sustainability.

WOR noted that in some cases energy transition project economics were currently challenged, but overall customer capex is still being deployed and WOR is able to capture spend in its traditional business. Our assessment of consensus (Factset) forecast for select customer capex forecasts shows continued upgrades and importantly, peer margin forecasts have also been revised higher.

Buy this ASX 100 stock

In light of the above and with the ASX 100 stock down 14% year to date, Goldman feels now is the time to pounce on Worley’s shares.

According to the note, the broker has upgraded its shares to a buy rating with a $17.50 price target. Based on its current share price of $15.07, this implies potential upside of 16% for investors over the next 12 months.

In addition, the broker is expecting dividend yields of 3.5% in FY 2024 and then 3.9% in FY 2025.

Commenting on the upgrade, the broker said:

WOR’s average NTM premium to peers is now back in line with the 3yr average of 11% (noting that our 12m TP is based on this relativity sustaining for NTM+1 earnings). Vs the S&P/ASX 200, WOR is trading broadly in line with market vs a 3yr average premium of 26% (5yr average of 9%). We view the recent decline in WOR’s share price (-6% over the last 6 months vs +11% for ASX200) relative to the market as a buying opportunity, without an impact to our fundamental valuation. Our DCF & EV/EBIT based TP (methodology unch.) increases 1% to $17.50 which provides 16% potential upside vs our coverage median of ~9%.

Overall, this could make it a good option if you’re wanting exposure to the clean energy thematic.

The post Upgraded: Buy this ASX 100 stock to leverage the energy transition megatrend appeared first on The Motley Fool Australia.

More reading

• Why Boss Energy, Meteoric Resources, Pantoro, and Worley shares are falling today
• 2 ASX 200 shares to buy at ‘attractive levels’
• Why Aeris Resources, Mesoblast, Pointsbet, and Worley shares are sinking today
• Guess which ASX 200 stock is crashing 11% after its largest shareholder dumped $1.4b of shares

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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.

I regularly invest in ASX dividend shares for my portfolio because they offer the potential for appealing passive income and capital growth.

Businesses that are growing earnings or increasing their underlying value can raise their payouts for shareholders.

Here are two S&P/ASX 300 Index (ASX: XKO) shares that have built an impressive history of paying reliable dividends while investing in long-term growth within their businesses.

Rural Funds Group (ASX: RFF)

This real estate investment trust (REIT) owns various types of farmland, including almonds, macadamias, cattle, vineyards and cropping.

Since starting to pay a distribution in 2014, the business has grown or maintained its distribution each year. In the longer term, it aims to grow its distribution by 4% per annum.

Rural Funds invests in its farms to make them more productive and valuable to tenants. One key project currently is transforming some cropping farms into macadamia farms, which are expected to generate more rent as capital is deployed.

Rural Funds is benefiting from some lease contracts with rental growth linked to inflation, which has been elevated in the last couple of years. A significant portion of its remaining rent has fixed annual rental increases.

The passive income machine pays its distribution quarterly — currently an annualised amount of 5.8%. The Rural Funds share price is trading at a 34% discount to its stated adjusted net asset value (NAV) at 31 December 2023.

Brickworks Limited (ASX: BKW)

I have invested in Brickworks shares multiple times over the past year, including recently, due to the compelling assets it owns.

Brickworks is the largest brickmaker in Australia. It also manufactures stone and masonry, roofing, cement, timber battens, and other products.

The ASX dividend share has a 50% stake in a large and growing industrial property trust that is steadily building and completing massive logistics warehouses on excess land Brickworks owned solely before it was sold to the trust.

There is a large demand for industrial properties as companies look to onshore more of their supply networks. The growth of e-commerce is also a good tailwind for warehouse demand, which is driving the rental and capital value of these properties.

Brickworks also owns around a quarter of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL). Soul Patts is an investment house that owns a diversified portfolio of defensive assets, which is growing its dividend and the underlying portfolio value over the long term.

The Soul Patts investment provides stability to Brickworks’ earnings during a downturn in Australian demand for building products.

The rental distributions from Brickworks’ property investment and the dividends from Soul Patts are enough to fund the Brickworks dividend.

Brickworks has grown its passive income payment yearly since 2014 and hasn’t cut its dividend for almost 50 years. The ASX dividend share currently has a grossed-up dividend yield of 3.5%.

The post Why I keep loading up on these 2 ASX passive income machines appeared first on The Motley Fool Australia.

More reading

• Top ASX stock to buy as a thrifty investor (the old Warren Buffett way)
• 4 ASX income stocks to buy for 4% to 8% dividend yields
• 2 cheap ASX 200 shares I’d buy in May
• 2 cheap ASX dividend shares I’d buy for income
• Here are 3 reliable ASX shares I’d buy instead of the big four banks right now

Motley Fool contributor Tristan Harrison has positions in Brickworks, 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 Brickworks 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 has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Are you on the hunt for some big dividend yields? If you are, then read on.

That’s because the three ASX dividend shares listed below have been named as buys and tipped to offer yields of 6%+.

Here’s what you need to know about them:

APA Group (ASX: APA)

APA Group owns and operates energy infrastructure assets and businesses, including energy infrastructure, comprising gas transmission, gas storage and processing, and gas-fired and renewable energy power generation businesses.

These businesses have been generating growing income over the last couple of decades. This has allowed the company to consistently increase its dividend for almost 20 years.

The good news is that this trend is expected to continue in the coming years. For example, Macquarie expects an increase to 56 cents per share in FY 2024 and then 57.5 cents per share in FY 2025. Based on the current APA Group share price of $8.74, this equates to 6.4% and 6.6% dividend yields, respectively.

Macquarie has an outperform rating and $9.40 price target on its shares.

Dalrymple Bay Infrastructure Ltd (ASX: DBI)

Another ASX dividend share that could provide income investors with big dividend yields is Dalrymple Bay Infrastructure. As its name implies, it is the long-term operator of the Dalrymple Bay Coal Terminal in Queensland.

Analysts at Morgans are feeling positive about Dalrymple Bay Infrastructure’s outlook and believe the company is well-placed to pay some big dividends. They are forecasting dividends per share of 22 cents in FY 2024 and then 22.9 cents in FY 2024. Based on the latest Dalrymple Bay Infrastructure share price of $2.97, this will mean very generous yields of 7.4% and 7.7%, respectively.

Morgans has an add rating and $3.05 price target on its shares.

HomeCo Daily Needs REIT (ASX: HDN)

Morgans is also a big fan of HomeCo Daily Needs and sees it as an ASX dividend share to buy.

It is a property company that invests predominately in metro-located, convenience based assets, across the target sub-sectors of neighbourhood retail, large format retail, and health and services.

Morgans likes the company due to its resilient cashflows. It also sees it as a beneficiary of accelerating click and collect trends.

As for dividends, the broker is forecasting 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 $1.25, this will mean yields of 6.4% and 7.2%, respectively.

Morgans has an add rating and $1.37 price target on its shares.

The post These ASX dividend shares offer 6%+ yields right now appeared first on The Motley Fool Australia.

More reading

• Buy these ASX shares and get 6% and 7% dividend yields
• Morgans says these ASX dividend shares are top buys
• 4 ASX income stocks to buy for 4% to 8% dividend yields
• Looking to retire? Buy these ASX dividend shares for passive income
• 2 high-yield ASX dividend shares to buy as they bounce

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 Macquarie Group. The Motley Fool Australia has positions in and has recommended Apa Group and Macquarie 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.

If you’re wanting to build a strong portfolio, then having a few blue chip ASX 200 shares in there could be a good idea.

They can make a good foundation to build from due to their strong and established business models, experienced management teams, and robust cash flows.

But which blue chips could be buys for investors right now? Four that analysts are positive on are listed below. Here’s what you need to know about them:

Coles Group Ltd (ASX: COL)

Analysts at Bell Potter think that Coles could be a blue chip ASX 200 share to buys. It is of course one of the big two supermarket operators in the Australian market. In addition, Coles has a sprawling liquor store network across brands such as First Choice and Liquorland.

Bell Potter believes the company is well-positioned for growth thanks to the benefits of immigration and its supply chain improvements. In light of this, the broker recently named Coles on its favoured list with a buy rating and $19.00 price target on its shares.

Flight Centre Travel Group Ltd (ASX: FLT)

Another ASX 200 blue chip share that has been given the thumbs up by analysts is Flight Centre. It is a travel agent giant with operations across the world.

The team at Morgans is feeling very positive about the company’s outlook. It notes that “FLT has the greatest risk, reward profile of our travel stocks under coverage.

The broker has add rating and $27.27 price target on its shares.

Qantas Airways Limited (ASX: QAN)

Analysts at Goldman Sachs thinks that this airline operator’s shares are great value at current levels. In fact, its analysts highlight that they “believe QAN is not priced for a generic recovery, let alone prospects for improved earnings capacity.”

The broker currently has a buy rating and $8.05 price target on the Flying Kangaroo’s shares.

Treasury Wine Estates Ltd (ASX: TWE)

Finally, the team at UBS thinks that Treasury Wine could be an ASX 200 blue chip share to buy right now. It is the wine giant behind brands such as Penfolds, DAOU Vineyards, 19 Crimes, Lindeman’s, and Blossom Hill.

UBS thinks the company’s shares are undervalued currently. Especially now that China has just removed its tariffs from Australian wine. It believes this larger market opportunity means that its shares deserve to trade on higher multiples.

As a result, the broker has put a buy rating and $15.25 price target on them.

The post 4 super ASX 200 blue chip shares to buy appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• Here’s the Coles share price I would buy at
• How much could a $10,000 investment in Qantas shares be worth in 12 months?
• Broker says these ASX dividend shares are top buys
• 5 ASX 200 blue chip shares to buy now

Motley Fool contributor James Mickleboro has positions in Treasury Wine Estates. 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 Coles Group. The Motley Fool Australia has recommended Flight Centre Travel Group 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.

Paying $80 for a $100 note… sounds too good to be true. Yet, that’s essentially how Warren Buffett made market-beating returns early in his investing career. Do these opportunities still exist among Australian companies? I believe so… and I’ve found what could be the top ASX stock to buy for this ‘deep value’ approach.

The $788 million company is a candidate for the legendary billionaire’s old investment strategy, but it also might be an improvement. While most of Buffett’s picks under this approach were good for a quick buck, this S&P/ASX All Ordinaries Index (ASX: XAO) company could have long-term legs.

Warren Buffett’s highly profitable, old-school strategy

You might be wondering… what is the investing strategy that the co-founder of Berkshire Hathaway Inc (NYSE: BRK.A) (NYSE: BRK.B) used to apply—and if it were so good, why is it the old Warren way? Wouldn’t the great Buffett still be putting it to work?

Well, the approach is referred to as ‘cigar butt investing’. It’s a value investing strategy at its core. You want to find a company that has been discarded — like a cigar butt — that still has more puffs of smoke in it. In other words, the company still has more value than investors give it credit for.

Looking at a business’s book value is a simple way to identify companies that may fall into this category.

In a worst-case scenario, a business can be liquidated, selling its assets to erase debts and provide any leftover case to investors. A company’s book value can roughly estimate its liquidation value. A price-to-book (P/B) ratio below 1 might indicate that there’s some value to be realised.

How profitable was this way of investing for Buffett? Take a look for yourself at the returns under the Buffett Partnership compared to the Dow Jones below:

Year	Buffett Partnership	Dow Jones
1957	10.4%	-8.4%
1958	40.9%	38.5%
1959	25.9%	20.0%
1960	22.8%	-6.2%
1961	45.9%	22.4%
1962	13.9%	-7.6%
1963	38.7%	20.6%
1964	27.8%	18.7%
1965	47.2%	14.2%
1966	20.4%	-15.6%
1967	35.9%	19.0%
1968	58.8%	7.7%

The Oracle from Omaha closed down this fund after 1968. Buffett later justified this by saying the fund had become too large to find cigar butt investing stocks big enough to move the needle at its size. However, that shouldn’t be an issue for people like you and me — unless you’ve won the lotto…

ASX stock to buy with plenty of puff

Rural Funds Group (ASX: RFF) is a perfect candidate for cigar butt investing. The Australian real estate investment trust (REIT) owns a mix of agricultural assets across the country and trades on a P/B ratio of 0.7 times book value.

As I said, this company is valued at nearly $790 million. Yet Rural Funds Group holds $1.045 billion in net assets when you subtract the liabilities. In my opinion, this suggests a straightforward path to a 32% upside for this ASX stock.

It’s not without its risks. The value of its properties can fluctuate depending on weather conditions, natural disasters, and leasing arrangements. However, land is in high demand and short supply. As such, I’m confident land prices are more likely to appreciate than depreciate.

Lastly, I think this top ASX stock to buy is better than a traditional cigar butt pick because of one key reason…

Buffett was looking for one puff to boost a company’s share price before offloading. In contrast, I believe Rural Funds Group could be the cigar that keeps on giving in the long run. Developing and managing land for various intensive activities is critical. Rural Funds has the know-how and capital to keep acquiring land and adding value.

The post Top ASX stock to buy as a thrifty investor (the old Warren Buffett way) appeared first on The Motley Fool Australia.

More reading

• 4 ASX income stocks to buy for 4% to 8% dividend yields
• 2 cheap ASX dividend shares I’d buy for income
• Here are 3 reliable ASX shares I’d buy instead of the big four banks right now
• 3 ASX shares that look way too cheap to ignore right now
• Why I think this ASX 300 stock is a fantastic pick for dividend income

Motley Fool contributor Mitchell Lawler 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 Rural Funds Group. 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.

More reading

• Beaten-up ASX 200 stock surges 12% on buyout rumour
• Why Australian Ethical, Cromwell Property, Smartpay, and Xero shares are surging
• ASX 200 shares vs. property: Which has performed better since the COVID crash?
• Why these 4 ASX 200 shares just got downgraded by top brokers
• Xero share price leaps 8% on staggering earnings upheaval

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 Reliance Worldwide and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Aub Group, Challenger, Collins Foods, Sonic Healthcare, 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.

If you’re wanting a passive income boost, then it could be worth checking out the ASX dividend stocks listed below.

All three have been named as buys and tipped to provide investors with attractive dividend yields in the coming years.

Here’s what you need to know about these dividend stocks:

Dexus Convenience Retail REIT (ASX: DXC)

The first ASX dividend stock that could be in the buy zone is Dexus Convenience Retail REIT. It owns a portfolio of service station and convenience retail assets located across Australia and concentrated on the eastern seaboard.

Morgans is positive on the company and has put an add rating and $3.23 price target on its shares.

As for dividends, the broker is expecting its shares to provide income investors with some very big yields in the coming years. It has pencilled in dividends per share of 21 cents in both FY 2024 and FY 2025. Based on its current share price of $2.69, this equates to yields of 7.8%.

Transurban Group (ASX: TCL)

A second ASX dividend stock that could be in the buy zone according to analysts is Transurban. It is a toll road operator with a high quality portfolio of roads across Australia and North America.

Citi believes that Transurban could be a top option for income investors right now and sees scope for some strong returns over the next 12 months. The broker currently has a buy rating and $15.60 price target on its shares.

As for income, Citi is expecting dividends per share of 63 cents in FY 2024 and 65 cents in FY 2025. Based on the current Transurban share price of $13.46, this will mean yields of 4.7% and 4.8%, respectively.

Universal Store Holdings Ltd (ASX: UNI)

A final ASX dividend stock that analysts think could be a buy is Universal Store. It is the youth fashion retailer behind the Universal Store, Perfect Stranger, Thrills, and Worship brands.

Morgans is also a fan of the company. It highlights that “UNI’s focus on offering high quality, fashionable apparel in a well presented store environment with high levels of service is paying off.”

The broker has an add rating and $6.50 price target on its shares.

As for dividends, Morgans is expecting fully franked dividends per share of 26 cents in FY 2024 and 29 cents in FY 2025. Based on the current Universal Store share price of $5.00, this will mean yields of 5.2% and 5.8%, respectively.

The post Buy these ASX dividend stocks for passive income appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• 5 ASX 200 blue chip shares to buy now
• Buy these ASX dividend stocks for a passive income boost
• Morgans says these ASX stocks can rise 20% (and pay big dividends!)
• Forget term deposits and buy these ASX dividend shares

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor James Mickleboro has positions in Universal Store. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Transurban 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.

Investors have pummelled ASX 200 stock Fletcher Building Ltd (ASX: FBU) over FY24, but the building materials company shot the lights out today.

The Fletcher Building share price hit an intraday high of $3.06, up 12.5% on yesterday’s closing price. It retraced some of its gains to close the session at $2.96, up 8.82%.

However, even with today’s gains included, the ASX 200 stock is down a whopping 35.7% over the past 12 months.

The stock was the second-biggest mover among ASX 200 shares behind Xero Ltd (ASX: XRO) today.

What pushed Fletcher Building shares higher on Thursday?

The share price gain follows a report in The Australian that US-based global investment firm Platinum Equity may be interested in buying the New Zealand-based company, which also has operations here.

The Australian reported that Gresham Advisory Partners, Platinum’s financial advisor, is investigating a buyout of all or parts of the Fletcher Building business.

Platinum describes itself as an “alternative asset management firm that invests institutional capital from around the globe”.

It owns 50 companies and specialises in private equity buyouts and investing in the private and public debt of underperforming and undervalued companies.

Platinum already owns other building materials companies. They include Cabinetworks Group, the largest independently owned manufacturer and distributor of kitchen and bathroom cabinets in the United States.

Last year, Platinum also bought the Australasia windows, doors and building products business of JELD-WEN Holding, Inc. (NYSE: JELD) for approximately US$461 million.

ASX 200 stock tumbles 36% in 12 months

As you can see from the chart below, Fletcher Building has had a rough 12 months.

In 2024, the ASX 200 stock has suffered two hefty share price tumbles.

The first was an 8.65% fall on 14 February, when the company emerged from a trading halt and released its 1H FY24 report.

Fletcher Building revealed a net loss after tax of NZ$120 million compared to a net profit after tax (NPAT) of $92 million in 1H FY23. The dividend was suspended.

The company issued FY24 Group EBIT guidance in the range of $540 million to $640 million. It said the mid-point assumed a continuation of materially weaker market conditions for the rest of FY24.

The company said market weakness was especially apparent in the New Zealand residential sector where volumes had declined 20%.

Management also said it would sell its Australian Tradelink business after deciding that “further ownership of the business is not in line with the strategic objectives of Fletcher Building.”

This followed a full review of the business and a $122 million non-cash impairment and write-down in Tradelink’s carrying value.

The company also announced that its CEO, Ross Taylor, had decided to retire and its chair, Bruce Hassall, would be standing down.

The next significant fall for the ASX 200 stock was on 13 May, when the company released a disappointing trading update and downgraded guidance.

The company said it expected to fall short of its EBIT (before significant items) guidance of NZ$540 million to NZ$640 million and now expected EBIT in the range of NZ$500 million to NZ$530 million.

The post Beaten-up ASX 200 stock surges 12% on buyout rumour appeared first on The Motley Fool Australia.

More reading

• ASX 200 shares vs. property: Which has performed better since the COVID crash?
• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX 200 shares today
• These 2 ASX shares could win big time in the long term
• 5 things to watch on the ASX 200 on Wednesday

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