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There have been a lot of rumours surrounding the secret stock Warren Buffett has been pouring billions of dollars into since 2023.

Today, we have our answer.

United States-listed insurance giant Chubb Ltd (NYSE: CB).

Why did Warren Buffett keep the investment under wraps?

Aged 93, Warren Buffett is still actively managing Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B), though succession processes are in place.

Yesterday, overnight Aussie time, Berkshire’s filing with the US Securities and Exchange Commission (SEC) revealed the company had bought some 26 million Chubb shares for roughly US$6.7 billion (AU$10 billion) over the first quarter.

Although the Chubb shares were bought over a period of months, Berkshire had requested its share purchases were kept confidential from prior filings with the SEC.

Why?

Well largely because investors the world over tend to copy Warren Buffett’s investments. That can see the share price of companies he’s buying rise simply on the news of his interest. And that makes it harder for him to abide by one his golden rules, “Never overpay for anything.”

The Oracle of Omaha, after all, started his investing life with almost nothing and is now worth more than US$136 billion (AU$205 billion), according to Forbes.

Indeed, the Chubb share price has soared 8.3% in after-hours trading since the news of Berkshire’s investment hit the wires.

“Millions of people follow what Buffett does,” David Kass, a finance professor at the University of Maryland said (quoted by Bloomberg). “Warren Buffett would be more sensitive to the issue than others.”

And the $10 billion investment in Chubb aligns well with another Buffett investing nugget, “You don’t have to be smart, as long as you stick to what you know.”

The billionaire is indeed quite familiar with the insurance business, with Berkshire owning a number of insurance companies, including Geico.

“Chubb is an attractive equity investment for Berkshire because it operates in a business Berkshire knows well: property-casualty insurance,” Cathy Seifert, a CFRA Research analyst said (quoted by Reuters).

Despite the Chubb investment, Berkshire’s cash holdings hit an all-time high of US$189 billion at the end of March.

Are there similar ASX shares to invest in?

Investors looking to mimic Warren Buffett on the ASX will need to look at some smaller companies.

Chubb, a property-casualty insurance business, operates in 54 countries and has a market cap of US$103 billion (AU$154 billion).

With that said, if I were aiming to mimic Warren Buffett today on the ASX, I’d look at buying shares in QBE Insurance Group Ltd (ASX: QBE).

The S&P/ASX 200 Index (ASX: XJO) insurance company has a market cap of $27 billion and has been a very strong performer in 2024. Year to date, the QBE share price is up 22%.

Atop the potential for further share price gains, the ASX insurance stock trades on a partly franked dividend yield of 3.5%.

Going by these stats, this ASX share ticks at least one box for Warren Buffett.

Namely his mantra that, “The greatest protection against inflation is ownership in a business that goes up in value.”

The post The secret stock Warren Buffett just spent $10 billion on (and finding similar ASX shares) appeared first on The Motley Fool Australia.

More reading

• 2 reasons to buy Berkshire Hathaway shares today (and one not to)
• Buy BHP and these ASX dividend stocks
• If I were Warren Buffett, I’d buy these 3 ASX shares
• Leading brokers name 3 ASX shares to buy today
• What could $10,000 invested in QBE shares be worth in 12 months?

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

The new record-breaking run on the S&P 500 (INDEXSP: .INX) overnight is helping fuel another big day on the S&P/ASX 200 Index (ASX: XJO).

The S&P 500 closed up 1.2% in the US market yesterday, finishing the day for a new closing high of 5,308.2 points.

The benchmark US index has been on a tear this year, with the new closing high marking the 23rd new record close in 2024.

In late morning trade on Thursday here in Australia, the ASX 200 is up 1.34% at 7,857.6 points. That puts the ASX 200 within a whisker of its own record closing high of 7,896.9 points, set on 28 March.

As for the big US tech stocks, the Nasdaq Composite Index (INDEXNASDAQ: .IXIC) closed up 1.4% yesterday.

What’s sending the S&P 500 and the ASX 200 soaring?

The biggest tailwinds helping lift the S&P 500 overnight and the ASX 200 today look to be more good news on the inflation front out of the United States.

The US consumer price index (CPI) increased 0.3% in April, down from 0.4% in March. That saw the annual inflation rate retreat to 3.4%, down from 3.5% a month earlier.

Core CPI, which excludes volatile items like food and energy prices, was also up 0.3% for an annual rate of 3.6%. That’s the lowest core inflation level recorded by the world’s top economy in three years.

As you’d expect, this is fuelling renewed hopes of earlier interest rate cuts from the US Federal Reserve, which should prove a boon for equities.

What are the experts saying?

Commenting on the US inflation data that sent the S&P 500 to new all-time highs and is seeing the ASX 200 rocket today, National Australia Bank Ltd (ASX: NAB) said (quoted by The Australian Financial Review), “US CPI was in line with expectations, but came as a relief for markets after a string of upside surprises.”

NAB added, “Pricing for a September start to Fed easing firmed, the US dollar showed broad-based declines, and equities rose to fresh all-time highs.”

CIBC Private Wealth’s Gary Pzegeo said (quoted by Bloomberg):

The market likes it. The news on core inflation was better than expected. Retail sales also showed some deceleration from the previously hot consumer sector. Taken together, this supports a Fed rate-cut in the fall.

Nationwide’s said Mark Hackett added:

Equity markets continue to show impressive resilience. The sustainability of the recent rally will rely on the belief that we are heading for a ‘soft landing’, with easing inflation and moderate growth.

So, with the S&P 500 at new record levels and the ASX 200 close to setting its own new record, can equities continue to rally in 2024?

According to Infrastructure Capital Advisors’ Jay Hatfield, very much so.

Hatfield said:

We continue to believe that our 5,750 target on the S&P will prove to be conservative as global rate cuts and AI propel global stock and bond markets higher after global cuts commence, with the ECB to act in early June.

Hatfield’s “conservative” end of 2024 target represents a potential upside of more than 8% for the S&P 500 over the next seven months.

One ASX share to capture the S&P 500 performance

There’s a surprisingly simple way for Aussie investors to mirror the performance of the S&P 500 without buying all 500 large-cap companies in the US index. Namely, via an index-tracking ASX-listed exchange-traded fund (ETF), like the SPDR S&P 500 ETF Trust (ASX: SPY).

The ETF provides exposure to those 500 stocks with a single investment, aiming to track the performance returns of the S&P 500. Management costs come to just under 0.10% per year.

Over the past 12 months the ASX ETF is up 28%.

The post ASX 200 rockets higher on Thursday as S&P 500 smashes record highs appeared first on The Motley Fool Australia.

More reading

• Graincorp share price lifts off as dividend is maintained and debts plunge
• 2 high-yield ASX dividend shares to buy as they bounce
• 3 reasons to buy Nvidia stock before May 22 (and 1 reason to sell)
• 3 excellent ASX ETFs I think are a buy right now
• How Fortescue shares could gain from the Federal budget

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

The Graincorp Ltd (ASX: GNC) share price is charging higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) agribusiness and processing company closed yesterday trading for $8.07. In morning trade on Thursday, shares are swapping hands for $8.27 apiece, up 2.5%.

For some context, the ASX 200 is up 1.3% at this same time.

This comes following the release of Graincorp’s half year results for the six months ending 31 March (1H FY 2024).

Here’s what ASX 200 investors are mulling over today.

Graincorp share price lifts amid falling debt and swelling cash

• Underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) of $164 million, down 57% from $383 million in 1H 2023
• Net profit after tax (NPAT) of $50 million, down 75% from $200 million in 1H FY 2023
• Underlying NPAT: $57 million, down 72.5% year on year
• Core cash of $495 million, up from $349 million year on year
• Fully franked interim dividend of 24 cents per share, in line with last year

What else happened during the half year?

The big earnings hit that’s failing to dampen the Graincorp share price rally today was driven in part by a $125 million dollar half year EBITDA decline in the company’s Agribusiness, which came in at $101 million for the six months.

The company said global grain market conditions hit its Agribusiness segment amid increasing global production, commodity prices decline and moderating global trade flow risks.

Graincorp’s Nutrition and Energy segment reported EBITDA of $76 million, down from $131 million in 1H 2023. The fall in earnings came as improved volumes were offset by moderated crush margins, with the company citing a lower supply of canola seed and weaker vegetable oil prices year on year.

The ASX 200 stock’s strong core cash position of $495 million was up $146 million year on year. That’s partly thanks to the company’s $104 million post tax take from the sale of its stake in United Malt Group in November.

Net debt at 31 March was $765 million, down from $1.42 billion a year earlier.

Eligible investors can expect to receive the interim dividend payout on 18 July.

What did management say?

Commenting on the results boosting the Graincorp share price today, CEO Robert Spurway said:

Graincorp delivered a resilient result in 1H 2024, as grain and oilseed markets normalise following three extraordinary years for the industry.

As expected, we have experienced a decline in overall production across East Coast Australia  and lower supply chain and crush margins relative to 1H 2023. Strong volumes in Southern New South Wales and Victoria have been offset by below average conditions in Queensland and Northern NSW.

Now what?

Looking to what could impact the Graincorp share price in the months ahead, the company maintained its FY 2024 guidance provided earlier this month, stressing this “remains subject to a range of variables”. The company forecasts underlying EBITDA of $25 million to $280 million and underlying NPAT of $60 million to $80 million.

“Despite the moderation in industry conditions in FY24, the long-term fundamentals of the agriculture sector remain strong,” Spurway said.

He added:

The industry plays a pivotal role in human and animal nutrition, and as a feedstock source for global decarbonisation efforts.

We remain confident in our average earnings through-the-cycle EBITDA, which we have increased by $10 million to $320 million, following the acquisition of XF Australia

Graincorp share price snapshot

With today’s intraday gains factored in, the Graincorp share price is up 14% so far in 2024.

The post Graincorp share price lifts off as dividend is maintained and debts plunge appeared first on The Motley Fool Australia.

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• Guess which ASX 200 stock just dived 8% on a profit downgrade

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

The ASX dividend shares we’ll explore in this article look cheap to me. They offer big dividend yields, and they’re starting to rise again.

When dividend stocks are trading lower, they can boost their dividend yield. For example, if a business has a 5% dividend yield and its share price falls 10%, then the dividend yield becomes 5.5%. However, if a business has a 5% yield and its share price rises 10%, then the yield drops to 4.55%.

Therefore, it can be a smart strategy to buy quality undervalued dividend stocks before they rise too far in a recovery. With that in mind, here are two ASX dividend shares that I think are passive income opportunities.

Charter Hall Long WALE REIT (ASX: CLW)

This is a real estate investment trust (REIT) that owns commercial property. What I particularly like about this ASX share is that its property portfolio is diversified, and it has a long weighted average lease expiry (WALE).

Its portfolio includes buildings across industrial and logistics, social infrastructure, office, service stations, pubs, agri-logistics and retail.

The WALE of more than 10 years means the business has strong rental income visibility and resilience. Almost all (99%) of the tenants are blue-chip players, including the Australian Government, Telstra Group Ltd (ASX: TLS) and BP.

The ASX dividend share’s rental income is steadily growing, with some leases on fixed annual increases and other contracts linked to inflation.

As we can see on the chart below, the Charter Hall Long WALE REIT share price has climbed around 5% since 26 April. I think this could be a good time to buy while it offers a guided FY24 distribution yield of 7.4%.

APA Group (ASX: APA)

APA owns and operates Australian energy infrastructure worth billions of dollars, including huge gas pipelines, electricity transmission assets, renewable energy generation and gas storage, processing and energy generation.

Impressively, the business has grown its distribution every year for 20 years, meaning it has one of the best records for long-term passive income growth on the ASX, though that’s not guaranteed to continue forever.

APA keeps growing its asset base – it’s working on new pipelines right now. It also recently acquired Alinta Energy Pilbara. This means APA can be a leading provider of renewable energy infrastructure solutions for remote regions in Australia (with miners as major customers).

The ASX dividend share expects to pay a distribution per security of 56 cents in FY24, which is a forward distribution yield of more than 6.2%.

The chart below shows that the APA share price has risen more than 7% in the last month, so now could be a good time to invest.

The post 2 high-yield ASX dividend shares to buy as they bounce appeared first on The Motley Fool Australia.

More reading

• How to choose ASX shares for passive income
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• 1 compelling ASX dividend share I’d buy for its big yield

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

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

If you’re an Nvidia (NASDAQ: NVDA) or any type of artificial intelligence (AI) investor, then May 22 is a day you must have circled on your calendar. That’s when Nvidia reports Q1 FY 2025 results, which will give investors some clues as to how strong the market is for Nvidia’s class-leading GPUs (graphics processing units).

With how big of a move Nvidia’s stock has made after previous earnings releases, it may be wise to consider buying (or selling) some shares before then. I’ve analyzed Nvidia and come up with three reasons to buy and one to sell. So what should you do before May 22?

1. Reason to buy: Other companies are still talking about AI infrastructure demand

Nvidia’s primary product, the GPU, is vital for AI model development and training. GPUs allow parallel processing, giving them the ability to do multiple tasks at the same time. This is crucial for training AI models, as multiple iterations must occur before an AI model is usable.

Nvidia’s GPUs are the best on the market for AI training, and its customers are buying thousands of them at a time to outfit their servers with the best technology possible.

This caused Nvidia’s initial boom last year, but some investors (including myself) were worried that there would be little demand for more capacity once initial demand is satisfied. However, that isn’t the case.

Meta Platforms raised its long-term capital expenditure guidance to build more computing power to capture the massive AI opportunity it sees. On its conference call, Tesla CEO Elon Musk mentioned that they have about 35,000 Nvidia H100 GPUs active, with another 85,000 slated to be up and running by the end of this year.

The demand for Nvidia’s products is still there, which should bode well for it this quarter.

2. Reason to buy: The stock isn’t as expensive as investors might think

One gripe about Nvidia’s stock has been how expensive it is. That’s true if you look at the trailing-price-to-earnings (P/E) ratio. At 76 times earnings, it could be considered outrageously expensive. But that doesn’t do the stock justice. Nvidia is undergoing a massive transformation and is expected to post another massive quarter of growth (Wall Street projects 250% growth in Q1).

As a result, looking at trailing earnings does investors no good. Instead, they should utilize the forward P/E to value Nvidia.

NVDA PE Ratio (Forward) data by YCharts

At 36 times forward earnings estimates, Nvidia is far from cheap. However, it’s undergoing a massive shift, and this figure could be incredibly off the mark if Nvidia’s growth continues. Furthermore, it’s not far off from Microsoft, which trades at 35 times forward earnings despite growing much slower.

If valuation is a top reason to avoid Nvidia’s stock, you may need to rethink that, as many other stocks trade in a similar range as Nvidia despite not having the growth.

3. Reason to buy: New product launches could drive another demand wave

Although Nvidia may have some of the best products on the market, it isn’t resting on its laurels. Nvidia has launched a few new upgraded GPUs, like the Blackwell GPU. But what investors (and many companies) are waiting for is the H200.

This system is expected to launch in the second quarter of 2024 and is a massive upgrade over the already popular H100. Some companies may be holding out until the H200 is launched to future-proof their servers, as they don’t want to upgrade in a couple of years when the H100s become obsolete.

Although that’s speculation, the H200 will undoubtedly drive new demand, especially from companies willing to pay top dollar to have the best products available.

These are great reasons to buy Nvidia’s stock before its Q1 earnings date, but there’s also a reason to sell.

Reason to sell: Anything short of perfection could ignite a sell-off

While I mentioned that Nvidia’s stock isn’t as expensive as many think, it’s still priced for perfection. If Nvidia misses the mark in any way this quarter, there will likely be a heavy sell-off.

I think that’s unlikely because the heavy demand for Nvidia’s GPUs is still present. However, the company’s execution is unknown until investors see the financials.

Should Nvidia report a less-than-perfect quarter, investors must examine the situation more closely to determine whether the sell-off is warranted or a buying opportunity.

Although the odds of this happening are pretty low, something as simple as a slip-up or a tone on a conference call can make or break a stock.

With how the industry currently looks, I see no problem with buying Nvidia’s stock before Q1 results, as it’s slated to be another quarter of incredibly strong growth. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post 3 reasons to buy Nvidia stock before May 22 (and 1 reason to sell) appeared first on The Motley Fool Australia.

More reading

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• Is it too late to buy Nvidia stock?
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Keithen Drury has positions in Meta Platforms and Tesla. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The ASX-listed exchange-traded funds (ETFs) I’m going to talk about all have very compelling futures.

There are plenty of good businesses on the ASX, but not to the same size and growth potential that we can find overseas. We can’t directly buy these global companies on the ASX, but there are plenty of different ways to get exposure to quality businesses through diversified funds.

With that in mind, these are three of my favourites.

Global X Fang+ ETF (ASX: FANG)

For investors wanting exposure to the big US tech companies like Alphabet, Apple, Amazon.com, Nvidia, Microsoft and Meta Platforms, this could be the best way to do it. These businesses are some of the strongest in the world, with strong balance sheets and incredibly strong market positions.

There are only 10 positions in this ASX ETF portfolio, with the weightings currently ranging between 9.09% to 11.63%, so the allocations are largely even.

Not only are the weightings to those businesses huge, but the FANG ETF actually has a fairly low management fee of 0.35%, compared to an annual fee of 0.48% for the Betashares Nasdaq 100 ETF (ASX: NDQ).

Past performance is not a reliable indicator of future performance with the FANG ETF, but it has returned an average of 23.7% per annum over the past three years. The underlying businesses are doing well.

With the ongoing technology developments, I think the FANG ETF portfolio holdings could continue growing profit for the long term.  

Betashares Global Quality Leaders ETF (ASX: QLTY)

I like owning businesses that meet quality metrics because, over time, I believe those metrics can help a business keep reinvesting profit at a good rate of return. Growing profits can push share prices higher, as that’s normally what investors focus on.

Companies only make it into the QLTY ETF portfolio if they rank well on four metrics: return on equity (ROE), debt-to-capital, cash flow generation ability and earnings stability. Putting those metrics together, it results in a list of very strong investments for the ASX ETF.

At the moment, the biggest positions of the 150-name portfolio are Alphabet, Texas Instruments, Unitedhealth, Coca Cola and Microsoft.

Considering the diversification across different industries (not just technology), I think the QLTY ETF has done very well since inception, with an average return per annum of 14.7%. Again, it’s not guaranteed to keep doing that well, but the quality metrics are compelling.

Betashares Global Cybersecurity ETF (ASX: HACK)

Cybersecurity is one of the most compelling industries because of the ongoing digitalisation around the world and the rise of cybercrime.

Businesses, governments and households need to protect themselves from the bad guys, even in a downturn, so the earnings of the businesses in the portfolio are quite defensive.

The ASX ETF’s portfolio of 30 names includes global leaders and smaller players, including Broadcom, Crowdstrike, Cisco Systems, Palo Alto Networks, Infosys, Darktrace, Cloudflare, Okta, and Zscaler.

Over the past five years, the HACK ETF has delivered an average return per annum of 15.2%, which is impressive in my opinion. If earnings keep growing, then I think this ASX ETF can keep performing.

The post 3 excellent ASX ETFs I think are a buy right now appeared first on The Motley Fool Australia.

More reading

• Why these ASX ETFs could be fantastic buy and hold options
• How much money should I put in one ASX ETF?
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. 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 Alphabet, Amazon, Apple, BetaShares Global Cybersecurity ETF, BetaShares Nasdaq 100 ETF, Cisco Systems, Cloudflare, CrowdStrike, Meta Platforms, Microsoft, Nvidia, Okta, Palo Alto Networks, Texas Instruments, and Zscaler. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Broadcom and UnitedHealth Group and has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has positions in and has recommended BetaShares Global Cybersecurity ETF and BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Alphabet, Amazon, Apple, CrowdStrike, Meta Platforms, Microsoft, Nvidia, and Okta. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Fortescue Metals Group Ltd (ASX: FMG) shares closed up 0.5% yesterday, trading for $25.94 apiece.

That was roughly in line with the 0.4% gains posted by the S&P/ASX 200 Index (ASX: XJO).

This came amid an overall positive reaction from investors to the new Federal budget.

And while Fortescue shares didn’t widely outperform the benchmark index yesterday, the ASX 200 miner could catch sustained tailwinds from some of the spending measures unveiled by Treasurer Jim Chalmers.

Among those measures, the budget contains $6.7 billion in tax incentives for green hydrogen production and an additional $1.7 billion to spur innovation in producing green iron production along with low emissions fuels.

And Andrew Forest’s Fortescue is leading its rivals in these sustainable ventures.

As the miner states on its website:

Fortescue is leading the green industrial revolution by developing the technologies to decarbonise hard-to-abate sectors (like our iron ore operations) while building a global portfolio of renewable energy projects.

We’ll help our planet step beyond fossil fuels by harnessing the world’s renewable energy resources to produce renewable electricity, green hydrogen, green ammonia and other green industrial products such as green iron.

How Fortescue shares are embracing green hydrogen

Green hydrogen, if you’re not familiar, is produced by splitting the oxygen atoms from hydrogen atoms in water using sustainable energy sources like solar, wind or thermal.

Gray hydrogen, on the other hand, makes use of gas to split up water molecules.

Green iron, then, is iron produced using green hydrogen as an energy source.

And Fortescue shares already have a sizeable footprint in the green hydrogen space.

In November, the company reported it had approved a Final Investment Decision (FID) on its Phoenix Hydrogen Hub, located in the United States; its Gladstone PEM50 Project, located in Queensland; and its Green Iron Trial Commercial Plant, located in Western Australia.

Commenting on the FID decision and Fortescue’s green iron ambitions at the time, CEO Dino Otranto said, “Fortescue is taking a proactive approach to green iron, including embracing innovative technologies that will help us step away from the use of fossil fuels.”

When the ASX 200 miner reported its half-year results, Fortescue Energy CEO Mark Hutchinson said:

Over the half we also continued to make important progress across the four verticals now established within our Energy business – green energy production, battery technology development, hydrogen systems and capital.

And in April, Fortescue shares got a lift after the miner announced a joint venture with OCP Group.

Hutchinson noted:

The pipeline of green energy projects continues to develop, and Fortescue entered a landmark joint venture with OCP Group in Morocco which aims to supply green hydrogen and ammonia for use as sources of green energy and in the manufacture of carbon-neutral and customised fertilisers.

With Fortescue shares having gotten a head start over much of the competition in this space, the ASX 200 miner looks well-placed to benefit from the Federal budget’s multi-billion-dollar green hydrogen and green iron tax incentives.

The post How Fortescue shares could gain from the Federal budget appeared first on The Motley Fool Australia.

More reading

• Which ASX shares could be set to benefit from the federal budget?
• What the federal budget means for interest rates and ASX shares
• 5 things to watch on the ASX 200 on Wednesday
• Should you buy Fortescue shares for that fat 8% dividend yield?
• Here are 2 top ASX 200 shares I’d buy now for passive income

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

Income investors have a lot of options on the Australian share market.

So much so, it can be hard to decide which ASX dividend stocks to buy above others.

But don’t worry, to narrow things down I have picked out three options that are rated highly by brokers right now. They are as follows:

Eagers Automotive Ltd (ASX: APE)

Bell Potter thinks that this automotive retailer could be a top ASX dividend stock to buy this month.

According to a note from this week, the broker has reiterated its buy rating on its shares with a slightly trimmed price target of $14.75. This is notably higher than its current share price, which means market-beating returns could be on the cards.

In addition, Bell Potter expects Eagers Automotive to pay 74 cents per share fully franked dividends in FY 2024, FY 2025, and FY 2026. Based on its current share price of $12.50, this represents 5.9% dividend yields each years.

Inghams Group Ltd (ASX: ING)

Over at Morgans, its analysts think that Inghams could be an ASX dividend stock to buy. It is Australia’s leading poultry producer.

The broker believes that its shares are cheap at current levels. Especially for a company that has a market leadership position and looks set to provide investors with big dividend yields in the near term.

Morgans currently has an add rating and $4.40 price target on the company’s shares.

As for dividends, the broker is forecasting fully franked dividends of 22 cents per share in FY 2024 and then 23 cents per share in FY 2025. Based on the current Inghams share price of $3.87, this equates to dividend yields of 5.7% and 5.95%, respectively.

Sonic Healthcare Limited (ASX: SHL)

Another ASX dividend stock that Morgans is positive on is Sonic Healthcare. It is a leading medical diagnostics company with operations across the world.

The broker believes that now could be a good time to pounce on the company’s shares after a tough period. It highlights that “management remains confident in a turnaround, outlining numerous near/medium term drivers supporting underlying profitability and reflected in guidance, which we view as achievable.”

Morgans has an add rating and $34.94 price target on its shares.

As for income, the broker is forecasting dividends per share of $1.04 in FY 2024 and then $1.16 in FY 2025. Based on the current Sonic share price of $26.69, this will mean yields of 3.9% and 4.3%, respectively.

The post Guess which ASX dividends stocks analysts think are top buys appeared first on The Motley Fool Australia.

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

BHP Group Ltd (ASX: BHP) shares are a popular option for passive income investors.

That’s because the mining giant returns a good portion of its bumper profits each year to its shareholders. This often sees tens of billions of dollars lining shareholders’ pockets.

But what sort of passive income could be coming your way if you were to buy BHP shares today? Let’s have a look and see what could be on the cards for investors.

Passive income from BHP shares

Let’s imagine that you were to pick up 300 shares in the Big Australian.

With BHP shares currently changing hands for $44.09, this would mean an investment of $13,227 is needed.

This is a fairly large investment, but would it be worth it?

Goldman Sachs appears to believe it could be. Firstly, the broker currently has a buy rating and $49.00 price target on its shares.

This means that if the mining giant’s shares were to rise to that level, your 300 units would have a market value of $14,700. That’s approximately 11% or $1,473 greater than your original investment, which means you are off to a great start.

Now let’s look at what passive income BHP shares could provide for investors.

According to a note out of Goldman Sachs, its analysts are forecasting a fully franked US$1.45 (A$2.17) per share dividend in FY 2024. This means that those 300 units would generate passive income of A$651.

But the dividends won’t stop there, so let’s keep going and see what future years could bring.

As I covered here recently, Goldman then expects a fully franked US$1.26 (A$1.88) per share dividend in FY 2025. This will mean passive income of A$564 for that year.

Moving on, in FY 2026 the broker expects another small cut to US$1.22 (A$1.82) per share, fully franked. If this proves accurate, it will lead to passive income of A$546 for investors.

Goldman then expects fully franked dividends per share of US$1.12 (A$1.67) in FY 2027 and US$1.07 (A$1.60) in FY 2028. This would generate income of A$501 and A$480, respectively.

Commenting on its buy recommendation, the broker said:

BHP is currently trading at ~6.0x NTM EBITDA, (25-yr average EV/EBITDA of ~6-7x) vs. RIO on ~5.5x. BHP is trading at 0.9x NAV (A$49.2/sh), vs. RIO at ~0.9x NAV. That said, we believe this premium vs. peers can be partly maintained due to ongoing superior margins and operating performance (particularly in Pilbara iron ore where BHP maintains superior FCF/t vs. peers), high returning copper growth, and lower iron ore replacement & decarbonisation capex.

The post How much passive income would I make from 300 BHP shares? 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.

It has been a busy period for the banking sector, with ANZ Group Holdings Ltd (ASX: ANZ), Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB), and Westpac Banking Corp (ASX: WBC) all releasing their latest updates this month.

The market reaction to the results has been overwhelmingly positive, with CBA and the other big four banks seeing their shares charge higher (before some traded ex-dividend).

Let’s now see what analysts at Wilsons are saying about the banks after it ran the rule over their results and outlooks.

What is Wilsons saying about ANZ, CBA, NAB, and Westpac shares?

Unfortunately, the broker hasn’t seen anything in the results to change its view on the banks. It revealed that its “sector view remains unchanged with the Focus Portfolio retaining an underweight exposure to sector.”

Wilsons acknowledges that the “banks reported sound results for 1H24, which were generally a touch ahead of consensus expectations across key line items.” However, this doesn’t hide the fact that “the sector’s medium-term earnings outlook still remains challenged.”

It also feels that CBA shares (and the rest of the big four) look overvalued based on current multiples and this challenging outlook. The broker said:

Following modest forward upgrades, consensus forecasts still point to negative EPS growth for the ASX 200 Banks Index in both FY24e and FY25e. In this context, the sector’s valuation premium relative to history remains excessive and unjustified at the headline level, albeit with pockets of relative value within the sector.

What else did the broker say?

Wilsons notes that the banks are returning capital with share buybacks. However, it has described this as a “temporary sugar hit.” It also believes it “fails to address the still lacklustre medium and long-term EPS growth outlook facing the sector.”

The broker then summaries its view on CBA and the rest of the banks’ shares. It said:

In the context of a weak earnings growth outlook, on the whole bank valuations remain highly uncompelling. The ASX 200 Banks Index trades on a forward PE multiple of 16x (skewed by CBA where we have zero weight), representing a ~13% premium to the 5-year average, and a forward price to book (PB) ratio of 1.6x, which is 14% above the 5-year average.

The current sector valuation (forward PE of 16x) implies the market is pricing in ~20% EPS growth in FY25 (if we assume a mean reversion to the 10-year avg PE of ~13x occurs) , compared to consensus of -1%. This is highly unlikely to eventuate in our view without a dramatic shift in RBA policy rate expectations and the economic outlook, demonstrating the extent of the sector’s current valuation excesses at current levels.

The post Here’s what Wilsons is saying about ANZ, CBA, NAB, and Westpac shares appeared first on The Motley Fool Australia.

More reading

• Is the CBA share price heading back to $100?
• If I buy 1,000 Westpac shares, how much passive income will I receive?
• Inherited a substantial sum of money? Here’s how I’d spend it (including the ASX stocks I’d buy)
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• Here’s the ANZ dividend forecast through to 2026

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