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There’s a good reason many ASX dividend investors own National Australia Bank Ltd (ASX: NAB) shares.

The S&P/ASX 200 Index (ASX: XJO) bank stock has a lengthy track record of delivering reliable passive income. In fact, NAB shares have delivered two annual, fully franked dividends every year for more than 10 years running now.

Over the past 12 months, the ASX 200 bank paid a final 84 cents per share dividend on 15 December and an 84 cents per share interim dividend, which will be paid on 3 July.

At Friday’s closing price of $33.81, that sees NAB shares trading on a fully franked trailing yield of 4.97%.

Now that’s an attractive yield. Especially as the NAB share price has also gained 29% over the past 12 months.

But there’s another ASX dividend stock I’d add to my passive income portfolio before NAB.

Namely ASX 200 utility Origin Energy Ltd (ASX: ORG).

Here’s why.

Why I’d buy this ASX dividend star for 2024

The Origin share price has also outperformed over the past 12 months.

At Friday’s closing price of $9.93 a share, the ASX dividend stock is up 18% since this time last year.

As for that passive income, Origin paid a final dividend of 20 cents per share on 29 September. Origin paid out the interim dividend of 27.5 cents per share on 28 March for a full-year payout of 47.5 cents per share, fully franked.

Based on Friday’s closing price, that works out to a fully franked trailing yield of 4.78%.

Now, I know what you may be thinking.

Not only has the NAB share price outpaced the Origin share price over the past year, but NAB shares also trade at a slightly higher yield.

Indeed.

But it’s the future we’re eyeing here. Not the past.

While I believe 2024 and 2025 will continue to see NAB pay out healthy dividends, I think Origin shares will surpass those.

And I think the ASX dividend stock could also see continued strong share price gains.

Among the reasons for my bullish assessment is the rapid evolution of artificial intelligence.

As with the rise of cryptocurrencies over the past decade, AI is forecast to see a massive surge in electricity demand. And I believe utilities like Origin are well-placed to benefit from that surging growth, which could boost the income from this ASX dividend stock.

So, what kind of demand growth are we talking about here?

In April, NextDc Ltd (ASX: NXT) CEO Craig Scroggie said that AI-capable data centres will require 10 times as much juice as traditional data centres.

And amid the explosive growth of AI, a raft of those new AI data centres is expected to come online over the next few years, both from NextDc and others.

Manju Naglapur, general cloud manager at Unisys Corp, recently noted:

Power demand from data centres has already been humongous, then came the AI hype and the need for power skyrocketed. With all the money spent on data centres, the power consumption will increase massively.

That massive increase should bode well for Origin’s dividends in 2024 and beyond.

As always, before buying any ASX dividend stock or any other company, be sure to do your own research first. Or simply reach out for some expert advice.

The post An ASX dividend giant I’d buy over NAB shares for 2024 appeared first on The Motley Fool Australia.

More reading

• Here’s how the ASX 200 market sectors stacked up last week
• It was huge week for ASX 200 bank shares. Here’s why
• How much passive income would I make from 200 NAB shares?
• 3 ASX 200 shares I want to buy if the stock market crashes again
• Why Judo Capital, NAB, Paladin Energy, and Perpetual shares are falling today

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.

ASX utilities shares led the ASX 200 market sectors last week with an impressive 4.79% gain over the five trading days. ASX energy stocks also put in an outstanding performance with a 4.34% gain over the week.

Meantime, the S&P/ASX 200 Index (ASX: XJO) booked a 1.19% lift to finish the week at 7,749 points.

Ten of the 11 market sectors finished the week in the green.

Let’s recap.

Utilities shares led the ASX sectors last week

AGL Energy Limited (ASX: AGL) was this week’s best-performing major utilities stock. The AGL share price swooshed 10.19% higher to $10.27 on news of the company upgrading its FY24 earnings guidance.

AGL now expects its underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA) to be between $2,120 million and $2,200 million. This compares to its previous guidance of $2,025 million and $2,175 million. This represents a 56% to 61.5% jump on the FY23 underlying EBITDA of $1,361 million.

APA Group (ASX: APA) shares lifted 4.28% over the week to $8.78. Origin Energy Ltd (ASX: ORG) shares gained 3.55% to finish at $9.93. Meridian Energy Ltd (ASX: MEZ) lost 1.1% to end the week at $5.39.

Among the major ASX 200 energy stocks, Woodside Energy Group Ltd (ASX: WDS) outperformed with a 4.24% gain over the week to finish at $28.63 per share.

Fellow oil and gas producer Santos Ltd (ASX: STO) lifted 4.94% over the week to finish at $7.86 per share.

Both stocks were buoyed by the Federal Government talking up the role of gas in Australia’s future.

Oil and gas commodity prices also rose this week. Brent crude oil rose 1.59% and WTI crude oil rose 2.07% following news of a surprise stockpile decline in the United States. The natural gas price shot 8.87% higher as well over the week.

Yancoal Australia Ltd (ASX: YAL) was the best performer of the major coal shares, gaining 3.84% over the five trading days to finish on Friday at $5.95 per share.

It was a big week for the ASX 200 with three major constituents releasing earnings reports.

For the six months to 31 March, Westpac Banking Corp (ASX: WBC) reported a net profit before one-offs of $3.51 billion, down 8%, Its net interest margins (NIMs) declined 0.07% to 1.89%. The bank will pay a fully franked dividend of 90 cents per share. It also announced an additional $1 billion share buyback.

Westpac shares fell 0.39% over the five trading days to finish at $26.66 apiece on Friday.

Australia and New Zealand Banking Group Ltd (ASX: ANZ) reported a statutory profit after tax of $3.41 billion for the half, down 4%. Its NIM also declined by 0.02% to 1.63%. The bank will pay an interim dividend of 83 cents per share, franked at 65%. ANZ also announced a $2 billion on-market buyback.

The ANZ share price closed the week at $29.09, up 1.01% over the five trading days.

Commonwealth Bank of Australia (ASX: CBA) delivered its third-quarter update, revealing an unaudited statutory net profit after tax (NPAT) of $2.4 billion, down 5% year over year.

CBA shares closed on Friday at $117.54, up 1.28% over the week.

Also this week, AMP chief economist Dr Shane Oliver revealed where he thinks the ASX 200 will finish the year. He also discussed the best and worst months to buy ASX shares based on historical patterns.

ASX 200 market sector snapshot

Here’s how the 11 market sectors stacked up last week, according to CommSec data.

Over the five trading days:

S&P/ASX 200 market sector	Change last week
Utilities (ASX: XUJ)	4.79%
Energy (ASX: XEJ)	4.34%
A-REIT (ASX: XPJ)	2.48%
Information Technology (ASX: XIJ)	2.4%
Communication (ASX: XTJ)	1.7%
Materials (ASX: XMJ)	1.67%
Financials (ASX: XFJ)	1.5%
Industrials (ASX: XNJ)	1.35%
Consumer Staples (ASX: XSJ)	0.86%
Healthcare (ASX: XHJ)	0.79%
Consumer Discretionary (ASX: XDJ)	(0.52%)

The post Here’s how the ASX 200 market sectors stacked up last week appeared first on The Motley Fool Australia.

More reading

• An ASX dividend giant I’d buy over NAB shares for 2024
• Why I’d buy high-yield ASX dividend shares for superannuation in retirement
• 1 compelling ASX dividend share I’d buy for its big yield
• Telstra shares and 4 other defensive income stocks to buy now
• 4 ASX retirement shares to buy in May

Motley Fool contributor Bronwyn Allen has positions in Anz Group, Commonwealth Bank Of Australia, and 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 positions in and has recommended Apa Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

I think high-yield ASX dividend shares can be a very effective pick for superannuation in retirement because of cash flow requirements and potential taxation advantages.

Superannuation is usually one of the most valuable assets for a lot of Aussies. In retirement, it may be the main (or supplementary) source of income, depending on whether someone gets the age pension or if they have other non-superannuation assets to generate income.

What makes dividend income appealing in retirement?

What assets are good choices for superannuation in retirement? I think high-yield ASX dividend shares are effective. First, I’ll point out that people need cash flow to pay for their life expenses.

It’d be a good idea to consult with a financial planner to understand the ins and outs of withdrawing money from superannuation. However, many people need to adhere to a minimum withdrawal percentage of their superannuation balance. A good dividend yield could help with that requirement.

The taxation in superannuation is also appealing, the retiree’s taxation rate on investment earnings and withdrawals is designed to be lower than it otherwise would have been in someone’s own personal name. It could be a 0% tax rate, depending on certain factors.

ASX dividend shares can pay a high yield. If someone has a high personal income and is in a high tax bracket, they would lose a fair chunk of the dividend (income) return to tax, depending on their marginal tax rate. Dividend returns from a retirement-phase superannuation account may see very little friction in getting into the hands of a retiree.

But, just because a high-yield ASX dividend share pays a pleasing amount of cash flow, it doesn’t automatically make it a good investment.

Which high-yield ASX dividend shares I’d invest in for superannuation in retirement

I’d still look for investments that want to grow the payouts to investors, or seem they have a good chance of doing so. Some listed investment companies (LICs) may be appealing, but I’m going to talk about specific S&P/ASX 200 Index (ASX: XJO) shares.

For example, Telstra Group Ltd (ASX: TLS) shares currently have an annualised grossed-up dividend yield of 7%. The business has said it wants to grow the payout for shareholders. It’s growing net profit, which gives it more funding to enable dividend hikes. The projections on Commsec suggest the business can grow its dividend in FY25 and FY26.

Medibank Private Ltd (ASX: MPL) shares are benefiting from the ongoing growth of policyholder numbers. Australia’s ageing population and growing population could mean policyholder numbers keep growing for some time. Medibank has grown its annual dividend payout each year since 2021 and currently has a grossed-up dividend yield of 6%.

APA Group (ASX: APA) transports half of Australia’s gas usage through its vast national pipelines. It also has a growing portfolio of renewable energy and electricity transmission assets. It has grown its annual payout every year for 20 years, though this isn’t guaranteed to continue. It’s expecting to pay an annual distribution yield of 6.5% based on the FY24 distribution guidance.

The post Why I’d buy high-yield ASX dividend shares for superannuation in retirement appeared first on The Motley Fool Australia.

More reading

• 1 compelling ASX dividend share I’d buy for its big yield
• Telstra shares and 4 other defensive income stocks to buy now
• Top ASX shares to buy for your superannuation fund in May 2024
• 4 ASX retirement shares to buy in May
• Are Telstra shares a top buy for dividend income?

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.

If you are searching for some big returns to boost your portfolio, then look no further.

That’s because listed below are three ASX shares that have been named as buys and tipped to rise 30% to 60%.

Here’s what analysts are saying about them:

Arcadium Lithium (ASX: LTM)

Analysts at Bell Potter think that this miner would be a great way to gain exposure to the lithium industry before it rebounds.

The broker currently has a buy rating and $9.50 price target on its shares. This implies potential upside of 32% for investors from current levels. It commented:

LTM provides the largest, most diversified exposure to lithium in terms of mode of upstream production, asset locations, downstream processing and customer markets. It is a key large-cap leverage to lithium prices and sentiment, which we expect to improve over the medium term. In supportive markets, LTM’s growth pipeline could see the company more than double production over the next three years.

Flight Centre Travel Group Ltd (ASX: FLT)

Morgans is feeling very bullish about this travel agent giant. So much so, the broker has it on its best ideas list again this month.

Its analysts have an add rating and $27.27 price target on the company’s shares. This implies potential upside of almost 34% for investors over the next 12 months. It commented:

FLT has the greatest risk, reward profile of our travel stocks under coverage. The risk is centred around execution given its changed business model, while the reward is material if FLT delivers on its 2% margin target. If achieved, this would result in material upside to consensus estimates and valuations. FLT is targeting to achieve this margin in FY25. With greater confidence in the travel recovery and the benefits of Flight Centre’s transformed business model already emerging, we think the company is well placed over coming years.

Tyro Payments Ltd (ASX: TYR)

Analysts at Morgans are also feeling very positive about this payments company and sees significant value in its shares at current levels. Particularly given its belief that its performance will rebound this year. The broker has an add rating and $1.50 price target on its shares, which suggests potential upside of over 60% for investors. It said:

TYR sold off heavily in 2023 affected by the broad pull back in technology stocks and overall concerns regarding its earnings trajectory. However, we believe FY24 will show significantly improved business momentum, importantly driven by a much greater focus on lifting overall profitability. TYR still trades at a significant discount to valuation.

The post These ASX shares could rise 30% to 60% appeared first on The Motley Fool Australia.

More reading

• Forget Pilbara Minerals and buy this ASX 200 lithium stock instead
• Why Flight Centre, Nine Entertainment, Polynovo, and QANTM shares are pushing higher
• Flight Centre share price lifts off amid record full year sales prediction
• Bell Potter names more of the best ASX 200 stocks to buy
• These are the 10 most shorted ASX 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 Tyro Payments. The Motley Fool Australia has recommended Flight Centre Travel Group and Tyro Payments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Fortunately for Australian income investors, there are a lot of dividend-payers to choose from on the Australian share market.

To narrow things down, I have picked out four ASX dividend shares that brokers are bullish on right now. Here’s what sort of yields they are forecasting from them:

Aurizon Holdings Ltd (ASX: AZJ)

The first ASX dividend share that could be a buy is Australia’s largest rail freight operator, Aurizon.

The team at Ord Minnett is bullish on the company and has an accumulate rating and $4.70 price target on its shares.

As for dividends, its analysts are 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 $3.81, this will mean dividend yields of 4.7% and 6.4%, respectively.

BHP Group Ltd (ASX: BHP)

Mining giant BHP could be another ASX dividend share to buy according to analysts at Goldman Sachs.

The broker thinks its shares are good value at current levels and is expecting some attractive yields in the near term.

It is forecasting fully franked dividends of US$1.42 (A$2.14) per share in FY 2024 and then US$1.26 (A$1.90) per share in FY 2025. Based on the current BHP share price of $42.91, this equates to dividend yields of 5% and 4.4%, respectively.

Goldman currently has a buy rating and $49.00 price target on the miner’s shares.

HomeCo Daily Needs REIT (ASX: HDN)

Another ASX dividend share that could be a buy is HomeCo Daily Needs. It is a neighbourhood retail and large format retail focused property company.

Morgans likes the company. This is due to its resilient cashflows and its belief that HomeCo Daily Needs will be a beneficiary of accelerating click and collect trends.

In respect to income, Morgans expects 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.

The broker has an add rating and $1.37 price target on the

IPH Ltd (ASX: IPH)

A final ASX dividend share that could be a buy is IPH. It is an intellectual property solutions company with operations across the world.

Goldman Sachs thinks its shares are good value at current levels, particularly given the company’s defensive qualities and organic growth potential.

The broker expects 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 $5.82, this represents yields of 5.8% and 6.35%, respectively.

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

The post 4 excellent ASX 200 dividend shares to buy for your income portfolio appeared first on The Motley Fool Australia.

More reading

• Should you buy BHP stock on a pullback?
• Buying BHP shares for the Anglo takeover? Here’s why it might be a ‘crazy’ move
• Is it too late to buy surging ASX copper shares like Sandfire?
• ASX 200 stock slips after joining takeover contest with $250 million bid
• How important is copper for the future of BHP 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 recommended Aurizon, HomeCo Daily Needs REIT, and IPH. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Just because the market may be trading within sight of a record high doesn’t mean there aren’t any cheap ASX shares out there for value investors to buy.

For example, the three listed below have been named as buys and described as cheap by analysts. Here’s what you need to know about them:

Inghams Group Ltd (ASX: ING)

This poultry company could be undervalued according to analysts at Morgans. Particularly given its market leadership and low price to earnings multiple. It recently said:

ING remains undervalued trading on a low PE multiple, especially for what is a market leader, with a vertically integrated operating model and assets that are difficult and costly to replicate. It is also leveraged to poultry – the affordable, healthy, sustainable and growth protein. Additionally, ING offers an attractive fully franked dividend yield.

Morgans has an add rating and $4.40 price target on its shares. The broker also expects 5.5%+ fully franked dividend yields from its shares in the coming years.

Rural Funds Group (ASX: RFF)

Another ASX share that could be cheap is Rural Funds. That’s the view of analysts at Bell Potter. They believe the market is undervaluing the rural property company’s shares given their significant discount to net asset value (NAV). The broker explains:

RFF continues to trade at a material 26% discount to 1H24 reported NAV and 35% discount to 1H24 market NAV, with the disconnect between private and public asset values at historically high levels. In the near term disposing of assets at or around market value is a positive catalyst for NAV confirmation and debt reduction, while recovering commodity values benefits farm related earnings and counterparty profitability.

Bell Potter has a buy rating and $2.40 price target on its shares. It also expects dividend yields of approximately 5.8% in FY 2024 and FY 2025.

Woolworths Limited (ASX: WOW)

Finally, Goldman Sachs thinks Woolworths is a cheap ASX share to buy following recent share price weakness. The broker highlights that the supermarket giant’s shares are trading on multiples materially lower than recent averages. This is despite having a positive outlook. It explains:

We forecast WOW 2-yr sales CAGR FY24-26e of +3.2% and EBIT growth of +4.8%. The stock is trading at FY24E P/E of 20x vs 2-yr EPS CAGR of 6% and against an average of 26x since 2018.

Goldman currently has a buy rating and $39.40 price target on its shares. It also expects 3.4%+ dividend yields in the coming years.

The post 3 ASX shares that look way too cheap to ignore right now appeared first on The Motley Fool Australia.

More reading

• Telstra shares and 4 other defensive income stocks to buy now
• Which of these ASX 200 shares is the better bargain in May?
• 4 ASX retirement shares to buy in May
• Here’s the current ASX dividend yield on Woolworths shares
• 3 buy-rated ASX 200 dividend stocks with 5% to 8% yields

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has positions in and has recommended 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 BHP Group Ltd (ASX: BHP) stock price has suffered a 15% fall this year, as the chart below shows. Is it time to dig into the ASX mining share? I’ll give my view on the business.

What’s going on with the BHP share price?

I think three main dynamics are at play with the recent BHP share price movements – the takeover play for Anglo American, changing commodity prices and costly write-offs.

Before the FY24 first-half result, BHP reported it was going to recognise impairment charges amounting to US$6.6 billion (pre-tax) relating to its nickel mining in Australia and the Samarco disaster in Brazil.

According to Trading Economics, the key commodity iron ore has declined from US$140 per tonne at the start of the year to around US$117 per tonne.

BHP launched an audacious bid for Anglo American, with an all-share offer for the UK-listed miner. While that business owns good copper assets, with a quality iron ore segment, it also comes with several other assets that BHP doesn’t want (eg, Anglo Platinum and Kumba), which complicates the deal.

Anglo American has already rejected the initial offer, so BHP would need to up the bid to gain interest.

Are there positives for the ASX mining share?

The BHP stock price is close to its 2024 low and 52-week low, yet conditions seem to be improving for the business.

The iron ore price has bounced upwards from around US$100 per tonne at the start of April 2024 to US$117 now – it’s going in the right direction. That is boosting BHP’s potential profitability, which is usually what investors focus on.

Copper prices are near a two-year high of around US$4.7 per pound, which is good for BHP. According to Trading Economics:

Official trade data from China showed that imports of copper ore jumped by 11.8% from the previous year to 2.35 million tonnes in April, indicating that the world’s top producer of refined copper continued to take in large volumes of inputs despite the sharp increase in prices.

The figures were in line with the pickup in factory activity indicated by the country’s PMIs during the period.

My 2 cents on the BHP stock price

The BHP share price is still almost 20% higher than its 2022 low, so it’s not as cheap as it has been. But, with the increasing copper and iron ore prices, the company’s profitability is more compelling.

The Samarco costs are large and necessary but are proposed to be payable over more than a decade.

I think the company’s focus on decarbonisation commodities like potash and copper is a good move. Diversifying profit away from just selling iron ore to China is also good.

Because of the above issues, the dividend payments may be smaller in the short term, so I’d be in no rush to buy it for dividends.

I have a goal of trying to beat the market, so I don’t think it’s cheap enough yet to invest. However, if the BHP stock price did fall — say to below $40 — then that could be the right time to pounce.

The post Should you buy BHP stock on a pullback? appeared first on The Motley Fool Australia.

More reading

• 4 excellent ASX 200 dividend shares to buy for your income portfolio
• Buying BHP shares for the Anglo takeover? Here’s why it might be a ‘crazy’ move
• Is it too late to buy surging ASX copper shares like Sandfire?
• How important is copper for the future of BHP shares?
• Buy BHP and these ASX dividend shares in May

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.

Baby Boomers and Gen X Australians both consider superannuation and property as the top investment options for lifetime wealth-building, according to a survey by financial advisory company Findex.

The survey showed that 40% of Baby Boomers and 29% of Gen X rated superannuation as their no. 1 investment option.

Property also scored highly, with 37% of Boomers and 28% of Gen Xers rating it their preferred investment asset class.

Varying approaches to retirement savings

While both age cohorts valued superannuation highly, Findex investment relations head Matthew Swieconek said they typically took different approaches to growing their retirement savings.

Swieconek said Baby Boomers often had a more passive approach.

Having benefited from a strong jobs market and the longest access to compulsory superannuation contributions, they “may prioritise capital preservation and income generation in their investment choices”, Swieconek said.

Generation X might feel less confident about their retirement security whilst juggling higher living costs, stagnant long-term wages growth and large mortgage repayments due to higher interest rates.

“They may be more risk-averse and seek a balance between growth and stability in their super investments,” he said.

Let’s talk superannuation

The Baby Boomers were born between 1946 and 1965, and Gen X was born between 1966 and 1980.

Superannuation was introduced in Australia in 1992. Most superannuation funds are primarily invested in ASX shares and international equities.

Younger Australians may choose to invest in more aggressive ‘growth’ super funds to maximise their earnings. With a longer runway to retirement, they can tolerate higher risk for higher rewards.

In 2023, Chant West figures showed the standard growth superannuation fund (61% to 80% growth assets like ASX shares), returned a median 9.9%. ‘High growth’ funds (81% to 95% growth assets) returned 11.4%.

Baby Boomers may switch from growth to ‘balanced’ or ‘conservative’ funds to preserve more of their capital. According to Chant West, the standard ‘balanced’ superannuation fund (41% to 60% growth assets) returned 8.1% in 2023, and conservative funds returned 6.2%.

Key actions to ensure a secure retirement

Findex recommends the following key investment actions for Baby Boomers and Gen X Australians to take now to ensure an excellent retirement down the track.

Baby Boomers  

Findex recommends the following five actions for Baby Boomers to retire well:

1. Pre-retirement super boost: Maximize your superannuation balance before retirement by utilising catch-up contributions and considering strategies like downsizing contributions.  
2. Legislative changes: Stay informed about changes in superannuation and retirement income policy to adjust your strategy accordingly.  
3. Retirement income planning: Engage with a financial advisor to develop a sustainable retirement income strategy, considering the transition to retirement pensions or annuities.
4. Prepare the next generation: Consider introducing your kids to a trusted financial advisor to help make financial advice more affordable and accessible for them.
5. Legacy planning: Focus on estate planning and how your superannuation benefits will be managed and distributed.  

Gen X 

Findex recommends the following actions for Gen Xers to retire well:

1. Maximising superannuation contributions: Enhancing both concessional and non-concessional super contributions can be a great way to build retirement savings toward the peak earning years.  
2. Review your super investments: Seek advice to refine your superannuation strategy, focusing on investment selection within super, tax planning, and retirement income streams.  
3. Healthcare and insurance: Review your insurance needs within superannuation to ensure adequate coverage, as health concerns may become more prominent.  
4. Consider borrowing to invest: Known as gearing, borrowing money to invest can help boost your portfolio. However, due to its high-risk nature, talk to a financial advisor to ensure this is right for you.
5. Estate planning: Start planning for your wealth transfer to ensure your super and other assets are distributed according to your wishes.  

The post Key actions for Baby Boomers and Gen X to take now for an excellent retirement appeared first on The Motley Fool Australia.

More reading

• 1 compelling ASX dividend share I’d buy for its big yield
• Telstra shares and 4 other defensive income stocks to buy now
• $20,000 invested in these ASX 200 shares 10 years ago is worth…
• Here’s the Westpac dividend forecast through to 2027
• Top ASX shares to buy for your superannuation fund in May 2024

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 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.

ASX dividend shares can be really appealing to investors looking for cash flow via passive income. There are plenty of stocks with a high dividend yield, but I’m going to write about one particular name in this article: APA Group (ASX: APA).

The business is not exactly a household name. It has a huge gas pipeline across the country which transports half of the country’s usage. APA owns gas storage, processing and gas-powered energy generation facilities. The business also owns electricity transmission, solar and wind assets.

There are a few compelling reasons why the ASX dividend share could be a compelling high-yield investment.

Appealing dividend yield and track record

The APA share price has declined by 16% in the last year, as we can see on the chart below.

APA already had a solid dividend yield before the drop and it has been boosted by having a cheaper valuation. For example, if a business has a 6% dividend yield and then the share price falls 10%, the yield becomes 6.6%.

The energy infrastructure giant has guided its distribution is expected to be 56 cents per security in FY24, which translates into a dividend yield of 6.4%.

APA has grown its distribution every year for the past 20 years, which is one of the best consecutive payout growth streaks on the ASX.

The estimate on Commsec suggests the business could grow its distribution to 57.5 cents per security in FY25, which would be a distribution yield of 6.6%.

Investing for growth

The ASX dividend share is benefiting from the fact that it has stable and growing revenue. Over 90% of its revenue is linked to inflation, which has obviously been elevated in recent years.

But it’s not just sitting there with its existing assets. The distributions to investors are paid from cash flow, which is steadily growing as more of its projects are finished and become operational. It has a distribution payout target of 60% to 70% of free cash flow.

In the recent Macquarie Australia Conference, the business said it had a “strong pipeline” of growth opportunities between FY24 to FY26, totalling more than $1.8 billion.

Increasing energy demands

I’m not exactly sure how Australia’s energy situation is going to evolve in the coming decades, but Labor recently said that gas will be part of the picture in 2050 and potentially beyond.

As a major pipeline owner, the ASX dividend share has an important role in the future of gas in the country. But it’s investing in other areas too, including a growing portfolio of renewable energy generation and electricity transmission assets. APA is also investigating the potential for pipelines to carry hydrogen, though that’s not a core part of the thesis for me.

Australia’s energy demands are growing, with data centres expected to be a major contributor to that. This could be another help for overall energy demand.

I’m not expecting explosive growth for APA, but the business could continue to play an important part in Australia’s energy mix, enabling ongoing shareholder payouts.

The post 1 compelling ASX dividend share I’d buy for its big yield appeared first on The Motley Fool Australia.

More reading

• Telstra shares and 4 other defensive income stocks to buy now
• 4 ASX retirement shares to buy in May
• Buy Rio Tinto and these ASX 200 dividend stocks for a passive income boost
• 3 safe ASX dividend shares to own for the next 10 years
• Brokers say these high yield ASX 300 dividend shares are top buys

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

Telstra Group Ltd (ASX: TLS) shares are among five ASX defensive stocks that Shaw and Partners portfolio manager James Gerrish recommends amid today’s share market volatility.

As the chart below shows, the S&P/ASX 200 Index (ASX: XJO) has weakened since hitting its all-time peak of 7,910.5 points on 2 April.

In a recent Market Matters newsletter, Gerrish said he was still bullish on equities but pointed out that ASX defensive shares were a good way to hedge your bets (just in case your plans go pear-shaped!)

Gerrish said:

As equities have struggled over recent weeks, we’ve been asked several times whether this was a good time to allocate additional capital into the market …

… we are still bullish towards equities over the medium term primarily because we see interest rate cuts unfolding over the next 12-18 months, a very bullish backdrop for stocks.

However, Gerrish said successful investing required preparation for good and bad eventualities.

… obviously, not all stocks/sectors move as one, and if we are wrong and stocks are going to enter a tough few years, the defensive end of town should, in theory, outperform.

Fundie backs Telstra shares and 4 other defensive stocks

Gerrish and his Market Matters funds management team have provided an update on how they view the following five well-known ASX defensive shares. They are listed below in order of the team’s preference.

AGL Energy Ltd (ASX: AGL) shares

Market Matters is long and bullish on AGL shares. The team likes AGL for its future yield expansion and potential capital gain. Market Matters holds AGL shares in the Active Income Portfolio.

APA Group (ASX: APA) shares

Market Matters is also long and bullish on APA shares and holds the stock in the same portfolio. The team believes the risk vs. reward is attractive below $8.50 per share for this infrastructure stock.

Gerrish says:

The infrastructure stock has been under pressure for almost two years, falling over 36% from its lofty 2022 high above $12.

The stock has been weighed down by several headwinds, but if we are correct and central banks start cutting rates in 2024/5, it will finally enjoy a macro tailwind that should support it.

We continue to see value in APA as a defensive infrastructure holding, supported by its sustainable and growing yield in the 6-7% region.

Metcash Ltd (ASX: MTS) shares

Gerrish says his team’s positive view on Metcash shares is predicated on the company’s growing proportion of earnings coming from higher growth areas such as hardware.

Market Matters is also long and bullish on Metcash shares. The team reckons it is cheap compared to its peers and offers good value around the $3.80 mark.

Telstra Group Ltd (ASX: TLS) shares

The Market Matters team likes Telstra shares for yield and holds a long position in its Active Income Portfolio.

Gerrish explains their view on the ASX 200 telco:

We bought TLS at good levels in 2021, and it has been delivering a solid yield since.

TLS has been nudging 12-month lows over recent weeks, which is rarely a good sign. As it approaches $3.50, we believe value is returning to the telco, but … TLS needs to address costs to regain investor confidence.

Woolworths Group Ltd (ASX: WOW) shares

Market Matters is “cautiously bullish” on Woolworths shares at about the $31 per share mark.

Gerrish said the market had lost confidence in the company, with CEO Brad Banducci’s recently exiting.

He said:

The supermarkets find themselves in the unenviable political crosshairs ahead of a tight election. They are accused of price gouging when the cost of living pressures are extreme.

New CEO Amanda Bardwell may have inherited WOW at a good time to turn the company’s fortunes around. Their 1H24 result in February was a disappointment, and the stock hasn’t recovered since.

Over the past 5-years, WOW has traded on average PE multiple of 23.85x, but has seen extremes of 31x and 19x.

Currently, WOW trades on 21x earnings making it 11% ‘cheap’ vs. history, and we believe it is likely to be a decent turnaround story in 2025.

Foolish takeaway

Gerrish concludes by saying it’s too early in the cycle to be aggressively overweight in ASX defensive stocks.

However, some value is presenting itself with Telstra shares and the other four ASX shares listed above.

The post Telstra shares and 4 other defensive income stocks to buy now appeared first on The Motley Fool Australia.

More reading

• Which of these ASX 200 shares is the better bargain in May?
• 4 ASX retirement shares to buy in May
• Are Telstra shares a top buy for dividend income?
• Here are the top 10 ASX 200 shares today
• Buy Rio Tinto and these ASX 200 dividend stocks for a passive income boost

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