Tag: Fool

The ASX dividend stock Step One Clothing Ltd (ASX: STP) has drifted lower over the last several weeks, as the chart below shows. I’m going to examine whether it’s the right time to invest in this business.

Step One describes itself as a leading direct-to-consumer online retailer of innerwear. It says its underwear is “high quality, organically grown and certified, sustainable, and ethically manufactured”.

The Step One share price’s decline of more than 20% started around the time that Step One founder and CEO Greg Taylor sold 313,500 shares to bring James Spithill (a winner of two Americas Cups) onto the share register.

Is this a good time to invest in the ASX dividend stock?

I love investing in growing ASX dividend shares that are priced cheaper, just like we’re seeing with Step One.

The FY24 first-half result showed a number of good financial metrics. Revenue grew by 25.5% to $45.1 million, while earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 35.6% to $10.1 million.

The gross profit margin grew from 80.7% to 81.2%, and the average order value (AOV) increased by 4.7% to $94.47.

Step One’s balance sheet is in a good state, with a closing cash balance of $43.9 million and no debt.

One of the most compelling things about the business’s future is that it’s growing rapidly in the UK and the US, which have much bigger populations than Australia (where it generates most of its revenue). HY24 UK revenue increased 38% to $14.6 million, and US revenue jumped 256% to $4.1 million.

If Step One can keep growing in the UK and US, then the business looks like it has a very exciting future.

The company is working on a number of things in FY24, including growing the women’s line, expanding its partnerships with retailers and other organisations, taking the women’s lines to the US, investing in its capabilities and products, and continuing to improve the customer experience.

ASX dividend stock valuation and yield

The Step One share price is still up more than 300% over the past year, so it’s not exactly trading at a 52-week low.

However, the company is at a reasonable valuation in my opinion, considering how much global potential it has. It’s valued at 21x FY25’s estimated earnings with a forecast FY25 grossed-up dividend yield of 6.7%.

This seems like the type of business that can deliver significant economies of scale benefits. I’m expecting profit margins to grow over the longer term. I also think Step One can easily expand to other countries, such as Canada, giving it a longer growth runway.

I think the ASX dividend stock is a good long-term buy at this level.

The post Is now the time to buy this high-yielding ASX dividend stock? appeared first on The Motley Fool Australia.

More reading

• How ASX growth shares can become top dividend stocks

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

If you’re building a retirement portfolio, then owning some ASX dividend shares that provide a decent source of passive income is always a good idea.

But which ones could be quality options this month? Let’s take a look at three for income investors to consider now:

APA Group (ASX: APA)

When looking for ASX passive income options, it’s always good to find stable businesses with the ability to grow their earnings and dividends.

Well, energy infrastructure company certainly ticks these boxes. Its strong business model has allowed the company to increase its dividend each year for almost 20 years.

The good news is that Macquarie feels confident this trend will continue. It is forecasting dividend increases to 56 cents per share in FY 2024 and 57.5 cents per share in FY 2025. Based on the current APA Group share price of $8.82, this equates to 6.3% and 6.5% dividend yields, respectively.

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

Aurizon Holdings Ltd (ASX: AZJ)

Another ASX passive income stock for investors to consider buying is Aurizon.

It plays a key role in Australia’s supply chain. It transports more than 250 million tonnes of Australian commodities, connecting miners, primary producers and industry with international and domestic markets.

Ord Minnett thinks it would be a great option for income investors. Particularly given that a sizeable dividend increase could be on the cards next year.

It is forecasting partially franked dividends of 17.8 cents per share in FY 2024 and then 24.3 cents per share in FY 2025. Based on the latest Aurizon share price of $3.74, this will mean yields of 4.75% and 6.5%, respectively.

Ord Minnett currently has an accumulate rating and $4.70 price target on the company’s shares.

Endeavour Group Ltd (ASX: EDV)

As the leading company in alcohol retail, Dan Murphy’s owner Endeavour Group could be a great option for passive income from the ASX.

Goldman Sachs certainly believes this is the case. It likes its market leadership position and the defensive nature of the alcohol retail market.

As for income, it is forecasting fully franked dividends of approximately 22 cents per share in both FY 2024 and FY 2025. Based on the current Endeavour share price of $5.21, this will mean dividend yields of 4.2% for both years.

The broker also sees plenty of room for its shares to charge higher from where they trade today, It currently has a buy rating and $6.20 price target on them.

The post Looking to retire? Buy these ASX dividend shares for passive income appeared first on The Motley Fool Australia.

More reading

• 2 high-yield ASX dividend shares to buy as they bounce
• Buy Telstra and these ASX dividend stocks for income
• How to choose ASX shares for passive income
• These ASX dividend shares offer 6%+ yields
• Here’s how the ASX 200 market sectors stacked up last week

Motley Fool contributor James Mickleboro has positions in Endeavour Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Macquarie Group. The Motley Fool Australia has positions in and has recommended Apa Group and Macquarie Group. The Motley Fool Australia has recommended Aurizon. 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 while since I initiated a new position in my ASX share portfolio. Sure, I’ve topped up a couple of my favourite existing positions in the past few months. But I haven’t found any new investments I’ve liked in a while now. At least not enough to prompt enough conviction to part with my own money.

However, that might change very soon. Two investments on the ASX have caught my eye in recent weeks, and there’s a good chance that my next ASX buy will be one of them.

The 2 ASX shares that I might buy next

Infratil Ltd (ASX: IFT)

Infratil is a rather unusual ASX share. It is a New Zealand-based conglomerate similar to Washington H. Soul Pattinson and Co Ltd (ASX: SOL) in that it owns a vast portfolio of underlying assets that it manages on behalf of its shareholders. In Infratil’s case, these are mostly private investments in the renewable energy, infrastructure and healthcare spaces.

Infratil has been around for a very long time (120 years). Over this period, it has consistently brought it home for shareholders, targeting a total return rate of 11-15% per annum.

It has also delivered on this, with the company reporting that investors have enjoyed a total return (assuming dividends are reinvested) of 21.4% per annum over the 10 years to 29 February 2024.

This track record, combined with Infratil’s defensive yet diverse portfolio of investments, indicates a high level of quality to me. As such, I can see myself adding this company to my ASX share portfolio in the near future.

Regal Investment Fund (ASX: RF1)

The Regal Investment Fund is a listed investment trust (LIT) on the ASX. It’s a fairly complicated setup comprising stakes in a number of other investments provided by its owner, Regal Partners Ltd (ASX: RPL).

These investments mostly consist of ‘alternative assets’, including water entitlements, a long-short strategy, private credit and resources royalties.

This LIT is designed to deliver meaningful, risk-adjusted returns with limited correlations to the broader share market. It has notched up some impressive performance wins since listing in 2019, achieving an average of 27.2% per annum over the four years to 30 April and 19.3% per annum since inception.

I like this investment from a diversification view and appreciate its rather stunning past returns. Whilst this LIT doesn’t come cheap (charging 1.5% per annum in fees as well as a performance levy on returns above the cash rate), it’s still on my watchlist right now.

If the Regal Investment Fund can keep up its impressive performance track record, it might find itself in my ASX share portfolio.

The post Here are the 2 ASX shares I might buy next appeared first on The Motley Fool Australia.

More reading

• Buy Rio Tinto and these ASX 200 dividend shares
• 2 of the best ASX 200 blue chip shares to buy in May
• Buy one, sell the other: Goldman’s verdict on these 2 ASX 200 travel shares
• 5 things to watch on the ASX 200 on Friday
• How much could a $10,000 investment in Woodside shares be worth in 12 months?

Motley Fool contributor Sebastian Bowen has positions in Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended 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.

Investors that are on the lookout for some ASX 200 dividend shares to buy for their income portfolio may want to consider the three listed below.

They have been named as buys and tipped to offer above-average dividend yields in the near term. Here’s what you need to know about them:

IPH Ltd (ASX: IPH)

The first ASX 200 dividend share to look at is IPH. It is an international intellectual property (IP) services group with a network of member firms working throughout ten IP jurisdictions and servicing clients in more than 25 countries.

The team at Goldman Sachs is positive on the company. It believes it has a positive outlook thanks to organic growth and defensive earnings.

Its analysts are expecting this to support the payment of fully franked dividends per share of 34 cents in FY 2024 and 37 cents in FY 2025. Based on the current IPH share price of $6.11, this represents yields of 5.55% and 6%, respectively.

Goldman has a buy rating and $8.70 price target on its shares.

Rio Tinto Ltd (ASX: RIO)

Another ASX 200 dividend share that could be a buy right now according to Goldman Sachs is Rio Tinto.

It is of course one of the world’s largest miners. It produces metals and minerals that are found everywhere in everyday life. This includes aluminium for cars, copper for renewable energy technologies, iron ore for the steel, and lithium for electric vehicles.

Goldman Sachs sees value in the miner’s shares at current levels and expects some great dividend yields.

In respect to the latter, the broker is expecting fully franked dividends per share of US$4.29 (A$6.42) in FY 2024 and then US$4.55 (A$6.81) in FY 2025. Based on the latest Rio Tinto share price of $130.39, this will mean yields of approximately 4.9% and 5.2%, respectively.

Goldman has a buy rating and $138.90 price target on its shares.

Transurban Group (ASX: TCL)

A third ASX 200 dividend share that could be a buy is Transurban.

It is one of the world’s leading toll road operators, building and operating toll roads in Melbourne, Sydney and Brisbane, as well as in North America. This includes CityLink, Cross City Tunnel, and AirportlinkM7.

Citi is feeling positive about the company and is expecting some good yields from its shares in the near term. It is forecasting dividends per share of 63.6 cents in FY 2024 and then 65.1 cents in FY 2025. Based on the current Transurban share price of $12.48, this will mean yields of 5.1% and 5.2%, respectively.

Citi has a buy rating and $15.50 price target on Transurban’s shares.

The post Buy Rio Tinto and these ASX 200 dividend shares appeared first on The Motley Fool Australia.

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• What’s the outlook for ASX iron ore shares after the federal budget?
• 3 bargain Australian shares with over 5% dividend yields
• Brokers name 4 ASX 200 dividend shares to buy
• Why is the Transurban share price lagging the market today?
• How ASX growth shares can become top dividend stocks

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Transurban Group. The Motley Fool Australia has recommended IPH. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

There are plenty of blue chip shares on the ASX 200 index. But which ones could be buys in May?

Let’s take a look at two shares that are rated as best buys by a couple of leading brokers right now. They are as follows:

Coles Group Ltd (ASX: COL)

Analysts at Morgans think that this supermarket giant would be a great ASX 200 blue chip share to buy this month. So much so, the broker has added it to its best ideas list in May.

It believes that recent share price weakness has created a buying opportunity for investors. The broker said:

In our view, the ongoing scrutiny on the supermarkets has affected short term sentiment in the sector, which we believe creates a good buying opportunity in COL. While Liquor sales remain soft, we expect the core Supermarkets division (~92% of earnings) to continue to be supported by further improvement in product availability, reduction in total loss, greater in-home consumption due to cost-of-living pressures, and population growth.

Morgans currently has an add rating and $18.95 price target on the company’s shares. This implies potential upside of 15% for investors over the next 12 months. The broker also expects a ~4% fully franked dividend yield from its shares.

ResMed Inc. (ASX: RMD)

The team at Bell Potter has named this sleep disorder treatment company as an ASX 200 blue chip share to buy. Its analysts have ResMed on their Australian Equities Panel. These are the broker’s favoured Australian equities that offer attractive risk-adjusted returns over the long term.

Bell Potter likes the company due to its significant opportunity as a leader in obstructive sleep apnoea (OSA) and other sleep disorders. It said:

The market for OSA and chronic obstructive pulmonary disease (COPD) remains under penetrated, and we expect industry volume growth to continue in the 6-8% range for the foreseeable future. In this regard, the competitive dynamics are very much in favour of RMD due to the Philips recall and improving semiconductor availability. Looking ahead, ResMed continues to expect device sales to be sequentially higher throughout CY2023. Furthermore, ResMed is well-positioned to build on its dominant share even after Philips returns to the global market, with the launch of its latest continuous positive airway pressure (CPAP) device, the Air Sense 11.

The broker has a buy rating and $36.00 price target on its shares. This suggests potential upside of 9% is possible over the next 12 months.

The post 2 of the best ASX 200 blue chip shares to buy in May appeared first on The Motley Fool Australia.

More reading

• Why Goldman Sachs just upgraded Coles shares
• Brokers name 4 ASX 200 dividend shares to buy
• 3 reasons ResMed shares ‘are just too cheap!’
• 4 founder-led ASX 300 shares that have helped this fund outperform
• 3 easy ways to reduce your ASX share portfolio’s volatility right now

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

Top broker Goldman Sachs reckons one of these ASX 200 travel shares could deliver 30% share price growth in just one year.

Let’s review the broker’s latest analysis on Australia’s national carrier and ASX airline share Qantas Airways Limited (ASX: QAN) and global travel agency Flight Centre Travel Group Ltd (ASX: FLT).

Why ASX 200 travel share Qantas is a buy

Goldman has a buy rating on Qantas with a 12-month share price target of $8.05.

The ASX 200 airline share closed at $6.15 on Thursday, down 0.49% for the day.

So, Goldman’s price target implies a potential 31% upside for investors who buy Qantas shares today.

The Qantas share price has lost 2.5% over the past 12 months.

The last piece of price-sensitive news out of Qantas was on 6 May, when the company announced a settlement with the Australian Competition and Consumer Commission (ACCC) over misleading conduct.

Qantas admitted it misled customers by advertising tickets for tens of thousands of flights it had already decided to cancel and cancelling other flights without informing ticketholders in a timely manner.

Qantas will pay a civil penalty of $100 million plus $20 million to more than 86,000 affected customers.

Goldman analysts Niraj Shah and Joseph Kusia say the ASX 200 travel stock is a key beneficiary of the post-pandemic travel recovery.

They expect the airline’s traffic capacity to return to 95% of pre-COVID levels by FY24, with its earnings capacity to exceed pre-COVID levels by about 52%.

They also forecast an approximate 24% FY19-24e cumulative uplift in unit revenues (c. 4.4% pa) and about a 50% drop-through of the company’s $1 billion structural cost-out program.

The analysts concluded the ASX 200 travel share was not appropriately priced by the market, commenting:

QAN’s current market capitalisation and enterprise value are 10% below and 11% below pre-COVID levels. As such, we believe QAN is not priced for a generic recovery, let alone prospects for improved earnings capacity.

We continue to see upside associated with substantially improved MT earnings capacity. 

Some hedge funds have recently targeted the ASX 200 travel stock, driving short-selling to multi-year highs.

Shah and Kusia outline some downside risks for Qantas:

Slower-than-expected traffic recovery; structurally reduced travel demand post-pandemic; irrational domestic market pricing; higher than expected fuel prices and unfavourable fx.

Why Flight Centre shares are a sell

Goldman has a sell rating on Flight Centre with a 12-month share price target of $18.30.

The ASX 200 travel share closed at $20.70 on Thursday, up 0.39% for the day.

So, Goldman’s price forecast implies a potential 11.6% downside for investors who buy Flight Centre shares today.

The Flight Centre share price has lost 3.3% over the past 12 months.

The last price-sensitive news from Flight Centre came on 8 May. The company delivered a new investor presentation and trading update at the Macquarie Conference.

Goldman analysts Lisa Deng and James Leigh said:

FLT provided its trading update for 3Q24 and reiterated group underlying PBT guidance of A$300-340mn for FY24 (A$270 – A$310mn excluding Convertible Note amortisation).

While our calculation of implied 3Q24 numbers suggests that there is slightly below-expectations run-rate in Corporate, this will likely be offset by above-expectations run-rate in Leisure.

Net net, we continue to see recovery and competitive risks in Corporate per our downgrade in March 2024 and our thesis remains unchanged.

However, the analysts can see some upside risks for Flight Centre, including:

Higher Leisure revenue margin on business mix; 2) better-than-expected Corporate traveller and Corporate cost management; and 3) better-than-expected Corporate on market share gains.

The post Buy one, sell the other: Goldman’s verdict on these 2 ASX 200 travel shares appeared first on The Motley Fool Australia.

More reading

• These ASX 200 blue chip shares could rise 10% to 30%
• Here are the top 10 ASX 200 shares today
• Short sellers up the ante on Qantas shares
• These are the 10 most shorted ASX shares
• These ASX shares could rise 30% to 60%

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 Goldman Sachs Group. The Motley Fool Australia has recommended Flight Centre Travel Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

On Thursday, the S&P/ASX 200 Index (ASX: XJO) had a day to remember after softer than expected US inflation put a rocket under the share market. The benchmark index rose 1.65% to 7,881.3 points.

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

ASX 200 poised to fall

The Australian share market looks set to end the week in the red following a subdued session on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open 35 points or 0.45% lower this morning. On Wall Street, the Dow Jones was down 0.1%, the S&P 500 fell 0.2%, and the NASDAQ was 0.25% lower. The Dow Jones briefly hit 40,000 points for the first time before giving back its gains.

Oil prices rise

ASX 200 energy shares Beach Energy Ltd (ASX: BPT) and Karoon Energy Ltd (ASX: KAR) could have a good finish to the week after oil prices edged higher overnight. According to Bloomberg, the WTI crude oil price is up 0.8% to US$79.60 a barrel and the Brent crude oil price is up 0.7% to US$84.19 a barrel. Traders have been bidding oil higher in response to falling US inventories and signs that inflation is easing.

Buy Graincorp shares

The Graincorp Ltd (ASX: GNC) share price could be good value according to analysts at Bell Potter. In response to the grain exporter’s half year results, the broker has reaffirmed its buy rating with an improved price target of $9.50. This implies potential upside of almost 17% for investors. In addition, the broker expects a 3.9% dividend yield from its shares. Commenting on the result, it said: “GNC reported a 1H24 underlying NPAT modestly ahead of our expectations at $56.5m (BPe $54.8m).”

Gold price falls

ASX 200 gold shares Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could have a poor finish to the week after the gold price tumbled overnight. According to CNBC, the spot gold price is down 0.45% to US$2,383.8 an ounce. This may have been driven by profit taking following a strong gain this week.

Incitec Pivots shares are a buy

Incitec Pivot Ltd (ASX: IPL) shares can keep climbing according to analysts at Goldman Sachs. In response to its well-received half year results, the broker has reaffirmed its buy rating on the fertiliser and commercial explosives company’s shares with an improved price target of $3.35. It commented: “Solid APAC pricing momentum, Fertiliser sale process ongoing & Transformational program flagged.”

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

More reading

• Buying ASX 200 energy shares? Here’s the latest IEA oil forecast
• Here are the top 10 ASX 200 shares today
• Why is this ASX 200 stock surging despite a $500 million writedown?
• Why Aristocrat Leisure, Graincorp, Incitec Pivot, and Patriot Battery Metals are rising today
• Graincorp share price lifts off as dividend is maintained and debts plunge

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.

Woodside Energy Group Ltd (ASX: WDS) shares have been out of form this year.

So much so, with the energy giant’s shares down 18% since this time last year and currently changing hands for $27.92, they are trading within sight of their two-year low of $27.03.

While this is disappointing for shareholders, could it prove to be a great time to buy for non-shareholders?

To find out, let’s see what a $10,000 investment in Woodside shares could become in one year based on what a leading broker is saying about the country’s leading energy producer.

Investing $10,000 into Woodside shares

Firstly, with the company’s shares fetching $27.92, you would need to invest $10,023.28 to end up with 359 units.

According to a note out of Morgans, its analysts believe that Woodside’s shares are extremely undervalued and big returns could be on the cards over the next 12 months.

The note reveals that the broker has the company on its best ideas list with an add rating and $36.00 price target.

If its shares were to rise to that level, it would value those 359 units at a sizeable $12,924. That’s almost 30% or $3,000 greater than what you started with.

Already it is looking like a very fruitful investment. But there’s still more to come according to the broker.

Morgans is forecasting fully franked dividends of $1.25 per share in FY 2024 and then $1.57 per share in FY 2025. This represents attractive dividend yields of 4.5% and 5.6%, respectively.

This will add income of $448.75 this year and then $563.63 in 2025. The former boosts the total 12-month return to approximately $3,350, which represents a return on investment of around 33%.

Why is the broker bullish on Woodside?

Morgans thinks that recent share price weakness has created a buying opportunity for investors. Especially given the quality of its earnings and an improving outlook for a key growth project. It explains:

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. Increasing our conviction in our call is the progress WDS is making through the current capex phase, while maintaining a healthy balance sheet and healthy dividend profile. WDS still has to address long-term issues in its fundamentals (such as declining production from key projects NWS/Pluto), but will still generate substantial high-quality earnings for years to come.

The post How much could a $10,000 investment in Woodside shares be worth in 12 months? appeared first on The Motley Fool Australia.

More reading

• Buying ASX 200 energy shares? Here’s the latest IEA oil forecast
• 5 things to watch on the ASX 200 on Thursday
• 2 of the best ASX 200 dividend giants to buy in May
• 5 things to watch on the ASX 200 on Wednesday
• Is the Woodside share price at a stretched valuation right now?

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.

Owning Wesfarmers Ltd (ASX: WES) shares for dividends is a good tactic because of its long-term history of payouts and the board’s commitment to growing the passive income.

But, there’s more to being a good ASX dividend share than simply paying a dividend. Ideally, it offers a good dividend yield which can also grow thanks to the ability of companies to re-invest their profits into growing their operations.

Wesfarmers has done a wonderful job of growing Bunnings, Kmart and Officeworks into the businesses they are today. Those retail businesses and other Wesfarmers subsidiaries are responsible for paying some of the biggest dividend payouts in Australia.

Passive income payout

To work out what the dividend yield is, we first need to know what the Wesfarmers dividend is.

The last two dividend payments from the business amount to $1.94 per share. However, that’s the trailing two dividends. How much could the next two dividends be?

The estimate on Commsec suggests the Wesfarmers dividend per share could be $1.95 for FY24, while the FY25 payout could be $2.16 per share (which would be a year over year increase of 7.7%).

Wesfarmers dividend yield

To calculate the dividend yield, we divide the dividend by the Wesfarmers share price. To get to the grossed-up dividend yield, we add the franking credits.

At the current Wesfarmers share price, the FY24 grossed-up dividend yield could be 4%.

If we look ahead to FY25, the company could pay a grossed-up dividend yield of 4.4%.

These aren’t the biggest yields in the world, but it means investors are getting a yield that’s competitive with savings accounts, while also offering organic growth.

Plus, the business is projected to retain a sizeable amount of profit each year to re-invest for more growth and hopefully grow the dividend in future years.

In FY24, the business is projected to have a dividend payout ratio of 86% in FY24 and 88% in FY25. If the company paid a 100% dividend payout ratio, it would have a grossed-up dividend yield of 4.6% in FY24 and 5% in FY25.

Are dividends everything?

For Wesfarmers, the dividend hasn’t been the key part of the returns. It has been capital growth.

According to CMC Markets, Wesfarmers shares have generated an average total shareholder return of 14.1% per annum over the past decade, compared to 7.7% for the Vanguard Australian Shares Index ETF (ASX: VAS) over the same period.

Time will tell what the future Wesfarmers dividends will be, but the future is promising with the strength and value of the consumer offering from the key businesses of Bunnings and Kmart.

The post What is the dividend yield of Wesfarmers shares? appeared first on The Motley Fool Australia.

More reading

• With $1,000 to invest, should I buy ASX growth stocks or income shares?
• 5 things to watch on the ASX 200 on Wednesday
• Inherited a substantial sum of money? Here’s how I’d spend it (including the ASX stocks I’d buy)
• Is Wesfarmers stock a good long-term investment?
• 3 ASX 200 shares I want to buy if the stock market crashes again

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

The two best ASX exchange-traded funds (ETFs) for price growth in April each rose by more than 10%.

Both of them give ASX investors exposure to one of the great megatrends of the moment.

That megatrend is the green energy transition.

Let’s take a look at these 2 top-performing ASX ETFs.

2 best ASX ETFs for price growth last month

According to the Australian ETF Review published by leading exchange-traded products (ETPs) provider Betashares, the following two ASX ETFs recorded the best share price growth last month.

Global X Copper Miners AUD ETF (ASX: WIRE)

The Global X Copper Miners AUD ETF gained 10.5% in new value over the month of April.

The ASX ETF closed at $15.08 per unit on Thursday, down 1.70% for the day. Over the past 12 months, the Copper Miners ETF has risen by 31.70%.

According to provider Global X, the Copper Miners AUD ETF provides access to a global basket of copper miners with exposure to major areas of innovation, including technology, infrastructure, and clean energy.

Among its top holdings are Canadian miners First Quantum Minerals Ltd (TSE: FM) and Lundin Mining Corp (TSE: LUN), as well as Polish miner KGHM Polska Miedz SA (WSE: KGH).

ASX copper stocks are also held by this ETF. They include BHP Group Ltd (ASX: BHP), Sandfire Resources Ltd (ASX: SFR), and WA1 Resources Ltd (ASX: WA1) shares.

Copper is set to play a key role in the green energy transition. An excellent conductor of electricity, it is used in the construction of electric vehicles, wind turbines, solar energy systems, and data centres.

Right now, global supply is constrained, and this has seen the copper price rise as part of a broader global commodities upswing that is also propelling the prices of other metals like iron ore, gold, tin and zinc.

At the time of writing, copper is trading at US$4.95. It’s up 32.5% year over year and up 14.6% over the past 30 days alone.

Betashares Energy Transition Metals ETF (ASX: XMET)

The Betashares Energy Transition Metals ETF gained 10.4% in new value over the month of April.

The ASX ETF closed at $8.54 per unit on Thursday, down 1.04% for the day. Over the past 12 months, the Energy Transition Metals ETF has lifted 0.59%.

According to provider Betashares, the Energy Transition Metals ETF provides investors with exposure to global producers of copper, lithium, nickel, cobalt, graphite, manganese, silver and rare earths.

First Quantum and Lundin Mining are also among its top holdings. It also holds US miner Freeport-McMoRan Inc (NYSE: FCX) and another Canadian miner, Ivanhoe Mines Ltd (TSE: IVN).

ASX stocks are also part of this ETF. They include Lynas Rare Earths Ltd (ASX: LYC), Pilbara Minerals Ltd (ASX: PLS), and Nickel Industries Ltd (ASX: NIC).

The post These were the 2 best ASX ETFs for price growth in April appeared first on The Motley Fool Australia.

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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.