Tag: Fool

ASX-listed exchange-traded funds (ETFs) can provide Aussie investors with exposure or strategic allocation to sectors and companies that their portfolios may lack.

Many Aussies may be shareholders in the largest individual stocks of BHP Group Holdings Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), CSL Ltd (ASX: CSL), National Australia Bank Ltd (ASX: NAB), Westpac Banking Corp (ASX: WBC), and ANZ Group Holdings Ltd (ASX: ANZ).

Plenty of other Aussies may have investments in ETFs like Vanguard Australian Shares Index ETF (ASX: VAS), SPDR S&P/ASX 200 ETF (ASX: STW), iShares Core S&P/ASX 200 ETF (ASX: IOZ) and BetaShares Australia 200 ETF (ASX: A200). These ETFs provide the same heavy weighting as those large ASX blue-chip shares I mentioned above.

I believe Aussies would benefit by investing in ASX ETFs that provide exposure to quality businesses from different sectors, listed in different countries. That’s why I like the below two options.

VanEck Morningstar Wide Moat ETF (ASX: MOAT)

The idea of this fund is to invest in competitively advantaged US companies at good prices.

It only considers businesses with an economic moat that are expected almost certainly to endure for the next decade and more. Competitive advantages can come in many forms, including cost advantages, brand power, patents, switching costs, network effects, etc.

With a shortlist of these quality US businesses, the Morningstar analyst team only buys shares when they believe a stock is trading at an attractively below-fair price for that company.

Past performance shouldn’t be viewed as a reliable indicator of future performance, but over the past five years, the MOAT ETF has returned an average of 16.2% per annum.

At the moment, the portfolio has three holdings with a weighting of more than 3%: Teradyne, Alphabet, and International Flavors & Fragrances.

VanEck MSCI International Quality ETF (ASX: QUAL)

There are a number of ways to create a quality international portfolio. This ASX ETF applies a number of quality scores based on different financial metrics, leading to a group of high performers with a strong combined score.

To make it into this portfolio of 300 holdings, businesses must have a high return on equity (ROE), earnings stability and low financial leverage. This means that these companies typically do not experience drops in profits. They are able to generate substantial profits relative to the amount of shareholder money (equity) invested in the business and maintain low levels of debt.

These are the businesses inside the portfolio with a weighting of at least 2%: Nvidia, Apple, Microsoft, Meta Platforms, Alphabet, Eli Lilly, Novo Nordisk, ASML and Visa.

Over the past five years the QUAL ETF has returned an average return per annum of 17.6%, though this shouldn’t be relied upon to predict future returns.

The post 2 of my favourite ASX ETFs for Australian investors appeared first on The Motley Fool Australia.

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• Why these strong ASX ETFs could be top long term picks
• Records tumble! Hot ASX ETFs smash all-time highs again on Friday
• 16% per annum: What is the VanEck Wide Moat ETF’s secret sauce?
• Looking for ASX growth shares? I rate these 2 as buys
• 3 popular ASX ETFs smashing record highs today

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. 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. 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 ASML, Alphabet, Apple, CSL, Meta Platforms, Microsoft, Nvidia, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Novo Nordisk and Teradyne 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 recommended ASML, Alphabet, Apple, CSL, Meta Platforms, Microsoft, Nvidia, and VanEck Morningstar Wide Moat ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Today is a historic day for Aussie cryptocurrency investors. Bitcoin (CRYPTO: BTC) will be available via the ASX for the first time as the Australian Securities Exchange welcomes the VanEck Bitcoin ETF (ASX: VBTC) to its bourse.

Other exchange-traded fund (ETF) providers have launched Bitcoin ETFs in Australia before. In May 2022, Global X Management — in partnership with 21Shares — opened the door to its Bitcoin ETF on Cboe Australia (formerly known as Chi-X).

However, today’s milestone marks the first of its kind for the largest stock exchange in Australia.

The original cryptocurrency is up 143% over the last year, fetching US$65,453 for one Bitcoin. Investors pushed the price higher in anticipation of its fourth ‘halving’ in April this year, reducing its further supply by 50%.

Breaking Bitcoin barriers with ASX debut

According to the 2024 Finder Consumer Cryptocurrency Report, approximately a quarter of Australians have owned or are interested in owning crypto. However, obtaining it can prove difficult for some.

VanEck Australia aims to make the journey to investing in Bitcoin easier by making the cryptocurrency available through a traditional financial product. Being an ASX-listed ETF is another important facet of the launch.

Through its own research, the asset manager discovered that 33% of surveyed advisers would include a Bitcoin ETF in their portfolios for clients if it were available on the ASX.

In describing the appeal of the spot Bitcoin ETF, VanEck Asia Pacific CEO Arian Neiron explained:

VBTC also makes Bitcoin more accessible by managing all the back-end complexity. Understanding the technical aspects of acquiring, storing and securing digital assets is no longer necessary.

Moreover, the new crypto investment option is being marketed as ‘the most cost-effective Bitcoin fund exposure in Australia’. VanEck’s product disclosure statement outlines an annual management fee of 0.59%. The Global X Bitcoin ETF carries a 1.25% management fee for comparison.

What is a ‘spot’ Bitcoin ETF?

The term ‘spot’ is derived from the spot price of an asset. In other words, spot Bitcoin ETFs give the investor exposure to the underlying value of Bitcoin at market prices. Meanwhile, other ‘non-spot’ Bitcoin ETFs can use derivatives, such as futures contracts, to mimic the underlying asset’s returns.

VanEck is not alone in its pursuit of bringing Bitcoin to the ASX.

Reportedly, DigitalX Ltd (ASX: DCC) is hot on the heels of VanEck. The alternative wholesale fund manager is also evaluating an ASX-listed spot Ether ETF down the track.

The post Bitcoin ETF hits the ASX. Here’s what you need to know appeared first on The Motley Fool Australia.

More reading

• Can anyone topple Nvidia as the king of artificial intelligence investments?
• Here are the top 10 ASX 200 shares today
• We see patterns everywhere. That’s not always helpful.
• It’s only a day until ASX investors can buy Guzman y Gomez shares
• 3 ASX healthcare shares smashing new 52-week highs today

Motley Fool contributor Mitchell Lawler has positions in Bitcoin and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin and Ethereum. The Motley Fool Australia has positions in and has recommended Bitcoin and Ethereum. 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.

You would be hard-pressed to find an investor who doesn’t consider Nvidia (NASDAQ: NVDA) the pinnacle of artificial intelligence (AI) companies. Its graphics processing units (GPUs), which crunch AI workloads, are best in class by a wide margin and have been used by practically every company interested in AI. 

But are there any companies that could dethrone Nvidia?

Nvidia’s direct competitors aren’t even close

Part of the fear of investing in Nvidia is wondering what will happen if and when the music stops. Right now, the company is firing on all cylinders. But the question remains: What happens when enough GPUs have been purchased to satisfy AI demand?

There are some factors influencing the answer to that question, such as the average lifespan of a GPU used for server computing. That is estimated to be around three to five years, which would mean there will be a replacement cycle. But if the demand for Nvidia GPUs is met, then the next round of AI technology might look somewhat different.

If that happens, which company could take the spot atop the AI mountain? Some might point to Advanced Micro Devices as a potential successor. AMD competes directly with Nvidia in the data center GPU space but has been getting smoked.

However, AMD has recently generated momentum with various cloud-computing providers starting to add its GPUs as an alternative. They don’t want to be devoted solely to Nvidia hardware because that would give it too much pricing power over them. But because Nvidia still has much better technology, AMD will likely only be considered as an alternative.

Another candidate is Taiwan Semiconductor, (TSMC for short), the chip foundry that supplies Nvidia and thereby makes its products possible. But TSMC also supplies chips to AMD and other companies, which makes it a neutral factor in the AI investment race.

Besides, TSMC expects massive growth driven by AI demand over the next few years. In its latest conference call, management said, “For the next five years, we forecast [AI revenue] to grow at 50% [compound annual growth rate] and increase to higher than 20% of our revenue by 2028.” That’s strong growth, but it also means Nvidia could continue its dominance since it’s a key customer for TSMC.

The companies applying AI depend on Nvidia

But all of the above is just the hardware side; what about application and use?

Microsoft and Alphabet are both massive customers for Nvidia’s GPUs. Not only do they have internal uses for them, but they also buy them to power their respective cloud computing services.

They also started designing their own AI chips, so they don’t have to buy them from Nvidia. However, these chips are highly workload-specific, so general-purpose GPUs like Nvidia’s will still account for the lion’s share of computing power.

Software companies like Palantir are also bringing AI capabilities to the masses. Its clients still need plenty of computing power to run its models, and it gives them the tools to create them. This could make the company a potential successor to Nvidia as a leading AI investment, since it will continue to see demand for its platform long after AI computing capacity is built out.

But all roads lead back to Nvidia, which is why it has been and will continue to be the most popular AI investment. Nvidia is on top of the AI world right now, and there currently doesn’t appear to be any company that can dethrone it. 

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

The post Can anyone topple Nvidia as the king of artificial intelligence investments? appeared first on The Motley Fool Australia.

More reading

• We see patterns everywhere. That’s not always helpful.
• Nvidia shares reach world’s most valuable milestone. Where to now?
• Is it too late to buy Nvidia stock?
• Insiders are selling Nvidia stock. Should you?
• Nvidia jumped 27% after its stock split announcement. Can Broadcom beat it?

 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Keithen Drury has positions in Alphabet and Taiwan Semiconductor Manufacturing. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Advanced Micro Devices, Alphabet, Microsoft, Nvidia, Palantir Technologies, and Taiwan Semiconductor Manufacturing. 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 Advanced Micro Devices, Alphabet, 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 post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Light & Wonder, Pro Medicus, and Telix Pharmaceuticals. The Motley Fool Australia has recommended Light & Wonder, Pro Medicus, Telix Pharmaceuticals, and Treasury Wine Estates. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Well, there’s been a bit going on this week… and it’s only Wednesday.

We’ve had an interest rate decision, a new ‘largest company’ in the US, and the unveiling of a new energy policy from the federal Coalition.

No, I’m not going to wade into the climate/energy wars. At least not here and now (though I have a fascinating episode of our podcast, The Good Oil, coming out on that… Subscribe to the podcast feed here so you don’t miss it!).

But I do want to address the other two. Let’s do it in reverse order.

Computer chip company, Nvidia, became the new king: the largest US company, measured by market capitalisation (the total value of all of its shares). Its value hit $5 trillion overnight, now leading Microsoft and Apple.

If you haven’t been following the story, Nvidia’s chips are in hot, hot, demand as the chip du jour to power artificial intelligence. Sales and profits are going through the roof.

So… is the company’s share price.

In fact, get this: in the last 5 years, the share price has gone from US$3.79 to US$135.58 – that’s a 35-fold increase in half a decade.

But also, get this: America’s most valuable company has a price-earnings ratio of… 80 times.

Now, the average across the market usually runs between 15 and 20 times. So 80 is… a lot. A lot of future growth from a company that’s already the largest one in the US!

Which doesn’t mean, for a second, that it can’t happen. People said Amazon was overpriced at 1% of the current share price (I own shares, for the record, but I bought much later than that!). People said Apple’s run was done more than 50% ago.

So, I’m not writing off Nvidia’s chances. Just… flagging that a lot is expected of a company whose shares are already at the top of the heap.

And so to interest rates.

Well, not the rates themselves – we know they’ve been kept on hold. But the commentary that came with it. Foremost was the strongest words yet from a Reserve Bank Governor, to the effect that Federal and State Treasurers are adding stimulus to the economy at the very time the RBA is desperately trying to cool it down.

And, as we all know, there are income tax cuts and energy rebates to come, federally, Queensland’s government is throwing an extraordinary amount of money around, and NSW has announced new spending.

Which… makes for a very difficult environment for the Australian economy, with plenty of people doing it very tough, and a lot who are doing very nicely.

No, I don’t have a magic wand, or a simple answer. But I do know that when the RBA has its foot on the brake while governments have theirs on the accelerator, something isn’t working.

And, ideology aside, I think it’s likely that electoral temptations are overwhelming the better advice for governments to do more to cool the economy, using the scores of tools at their disposal. They should do the right thing… not the popular thing.

Why, you ask, am I mentioning all of this?

Well, in part because the more things change, the more they stay the same: there’s always something to worry about, some clouds on the horizon, and some company that’s supposed to be the next big thing (or already is, and is going to get bigger).

But in part because there are false positives (apparent correlations that really aren’t) and false negatives (the reverse) all the time. Is Nvida going to prove the doubters wrong, a la Amazon, or be more like Cisco, the dot.com darling that is still 40% below its all-time high, set back in early 2000? Will rates keep rising? Fall? Will we have or avoid a recession?

I’ve lost track of the number of times people tell me that ‘It’s just like back in…’, or ‘This is just like [Company X]’.

Sometimes, of course, it is. But sometimes it’s not.

As investors, we need to be very, very careful of noticing an historical similarity, and assuming it’ll be instructive… or that it won’t.

Which you know is logically true. And yet… we humans are pattern-seeking machines. It’s an enormous evolutionary advantage, but it can mislead us when it comes to our portfolios.

What happens next, for Nvidia, and for rates?

I have no idea. Nor do you. (And if you think you know for sure, can I suggest you allow for a little more uncertainty?)

What I do know is that long term compound returns have been earned through, and in, all sorts of markets, with all sorts of headlines and all sorts of fears. There have been all sorts of companies at the top of the market-cap pops.

And I’ll make one fearless prediction – that reality will be with us for as long as there are sharemarkets!

We might as well make our peace with it, invest regularly, prepare for volatility, and keep our eyes on the long term.

Fool on!

The post We see patterns everywhere. That’s not always helpful. appeared first on The Motley Fool Australia.

More reading

• Nvidia shares reach world’s most valuable milestone. Where to now?
• Is it too late to buy Nvidia stock?
• Insiders are selling Nvidia stock. Should you?
• Nvidia jumped 27% after its stock split announcement. Can Broadcom beat it?
• 3 reasons to buy Nvidia like there’s no tomorrow (Hint: The stock split Isn’t 1 of them)

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 Scott Phillips has positions in Amazon and Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, Apple, Cisco Systems, Microsoft, and Nvidia. 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 Amazon, Apple, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Time is ticking down to one of the biggest initial public offerings (IPOs) the ASX has seen in years. Tomorrow, Guzman y Gomez shares will join the ASX boards, giving all Australian investors the opportunity to buy shares in this Mexican-themed fast food chain.

As we’ve covered extensively here at the Fool, Guzman’s ASX IPO has been long in the making. After years of rumours, the company will make its ASX debut tomorrow when its shares begin trading on the public markets on a deferred settlement basis from midday – 11.1 million Guzman shares, to be precise.

Yep, the company hopes to float 11.1 million shares on the ASX, with an IPO price of $22 a pop. If all goes to plan, that would value the business at around $2.2 billion. The restaurant chain’s ticker code is set to be the easily-memorable GYG.

As we’ve also covered this month, this valuation could be described as ‘optimistic’. My Fool colleague James recently went through the views of Tamim Asset Management’s Ron Shamgar. There was an extract of what the fund manager had to say on Guzman’s “eye-watering” $22 IPO price:

The IPO values GYG at an enterprise value to operating earnings multiple of 32.5 times, significantly higher than Domino’s Pizza at around 18 times and Collins Foods Limited at just over 14 times…

While GYG’s growth ambitions are impressive, investors would be wise to approach this IPO with caution. The rich valuation in comparison to other QSR players raises questions about whether the hype surrounding the offering is justified…

History has shown that many high-profile IPOs struggle to live up to their lofty expectations once the initial excitement fades. Rather than getting caught up in the frenzy, prudent investors may be better served by waiting on the sidelines to see how GYG’s growth story unfolds as a public company.

Guzman y Gomez shares primed for ASX IPO

This is notable. If Guzman does command a market capitalisation of $2.2 billion, it would slide right between KFC operator Collins Foods Ltd (ASX: CKF) and Domino’s Pizza Enterprises Ltd (ASX: DMP). Domino’s and Collins Foods currently boast market caps of $1.09 billion and $3.3 billion respectively.

Interestingly, when Collins Foods debuted on the ASX boards back in 2011, it floated at a stock price of $2.50. But only a few months later, early investors were nursing a nasty burn when the company fell down to less than $1.20 per share.

Of course, those who held on have done well, given that Collins Foods stock was asking $9.26 at Wednesday’s close. But no doubt, those investors who buy Guzman shares when they list on the ASX will be hoping for a different outcome.

Potential Guzman investors might find confidence in the fact that management and the company’s largest investors will be in their bunker, financially speaking. Even after Guzman’s IPO, senior management (including founder Steven Marks) and existing substantial investors will still hold 62% of the company’s outstanding stock.

No doubt these big fish will be the ones watching tomorrow’s Guzman IPO with the most anticipation. Let’s see how it goes.

The post It’s only a day until ASX investors can buy Guzman y Gomez shares appeared first on The Motley Fool Australia.

More reading

• 5 top ASX growth shares to buy in June
• I’d use the Warren Buffett method and buy these 2 ASX shares
• Is Guzman y Gomez stock too expensive?
• 5 things to watch on the ASX 200 on Wednesday
• This ASX 200 share still looks cheap to me. But don’t just take my word for it!

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Domino’s Pizza Enterprises. The Motley Fool Australia has recommended Collins Foods and Domino’s Pizza Enterprises. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

With the S&P/ASX 200 Health Care Index (ASX: XHJ) dipping slightly into the red on Wednesday, it’s been a different story for three individual ASX healthcare shares.

Pro Medicus Limited (ASX: PME), Race Oncology Ltd (ASX: RAC), and Regis Healthcare Ltd (ASX: REG) have all hit fresh 52-week highs in trading today.

Here’s a look at what’s driving investor confidence within each company.

Pro Medicus continues strong performance

Pro Medicus shares nudged its new 52-week high of $135.67 this afternoon. This continues the ASX healthcare share’s impressive gain of more than 97% over the past year — and outperforming the healthcare sector by more than 88%.

The recent surge follows several positive developments. For example, Pro Medicus’ US subsidiary, Visage Imaging, recently secured five new customer contracts valued at $45 million, as my colleague Bernd reported.

Goldman Sachs values the ASX healthcare stock as a buy with a $136.00 per share price target.

In a note from May, the broker said Pro Medicus was “well positioned into FY25 given a full year benefit of some large, high-profile contracts”. It also liked the “accelerating frequency and size of [the company’s] new contract wins”.

CommSec shows the ASX healthcare share rated as a moderate buy from the consensus of analyst estimates.

Race Oncology leaps on FDA news

Race Oncology also hit a new 52-week high of $2.09 on Wednesday, continuing its buying trend from Tuesday.

This came after the company announced that the US Food and Drug Administration (FDA) had extended the Rare Paediatric Disease Designation (RPDD) of its novel drug compound, RC220 bisantrene.

The compound is indicated for treating childhood subtypes of acute myeloid leukaemia (AML).

“US FDA RPDD is granted for new treatments of serious or life-threatening diseases which affect fewer than 200,000 people in the US and which primarily affect individuals less than 18 years of age”, the announcement read.

This designation qualifies Race Oncology to receive a “highly valuable” Priority Review Voucher (PRV). Recent PRV sales “to third parties on the open market” have fetched around US$110 million.

The news has benefitted the ASX healthcare share, which now stands around 49% higher over the past 12 months.

Regis Healthcare on a high

Regis Healthcare was the third ASX healthcare stock to reach a 52-week high today, touching $4.36 in morning trade. The company is a healthcare giant and one of Australia’s largest providers.

Analysts at Macquarie recently upgraded Regis Healthcare’s rating to outperform, with a price target of $5.50. This upgrade follows favourable recommendations from the Aged Care Taskforce, which looks at innovation in the healthcare sector.

The company’s recent acquisition of CPSM, completed in December, added five high-quality aged care homes to its portfolio. As reported by my colleague Tristan, it now boasts 68 residences with a combined total of 7,604 beds.

Regis Healthcare shares are up 96% in the past 12 months.

The post 3 ASX healthcare shares smashing new 52-week highs today appeared first on The Motley Fool Australia.

More reading

• 2 top ASX growth shares to buy today and hold for 10 years
• Why Capitol Health, Infratil, Newmont, and Race Oncology shares are charging higher
• ASX healthcare stock surges 11% on ‘incredibly valuable’ FDA news
• 3 reasons to be positive on ASX 200 shares in FY25 (and 3 to be wary)
• Top ASX AI stocks to buy in June 2024

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

If you’re keeping an eye on the Australian stock market, you’re likely familiar with the fantastic companies, Brickworks Limited (ASX: BKW) and Washington H Soul Pattinson & Company Ltd (ASX: SOL).

Both companies boast strong, shareholder-friendly cultures and have a unique circular shareholding structure where they own each other’s shares.

Brickworks, a renowned name in the building materials sector, has a history of consistent performance. Its diversified portfolio, including property and investments, provides a solid foundation for its earnings.

On the other hand, Soul Patts, with its investments spread across various industries such as telecommunications, mining, and agriculture, presents a unique proposition for investors looking for wide-ranging exposure.

Now, the big question is, if you had to pick just one company to invest in, would you go for Brickworks or Soul Patts shares today?

Financial health

Brickworks has consistently maintained a robust balance sheet with low debt levels. As at December 2023, Brickworks has a net debt of $1.2 billion compared to equity of $3.48 billion.

This positions it well to navigate any economic downturns and capitalise on growth opportunities without the pressure of high-interest payments.

Soul Patts has a net cash position of $285 million compared to its equity of $9 billion. The company boasts a strong financial position, with diversified income streams providing a buffer against sector-specific downturns.

Growth outlook

Regarding growth prospects, both companies have demonstrated their capability to adapt and thrive.

For Soul Patts, the focus has been on strategic investments in industries with high growth potential. Its ability to identify and capitalise on such opportunities has historically resulted in impressive returns for shareholders.

Brickworks has been expanding its presence in the US, opening new avenues for growth beyond the Australian market. This international expansion could significantly impact its bottom line in the coming years.

In addition to the US potential, Brickworks is well-positioned to benefit from the ongoing shortages in industrial properties. The most exciting one for me is its land holdings in Western Sydney, but the company also owns many other parcels of land in Australia and the US.

Dividends

Soul Patts shares offer a dividend yield of 2.73% compared to Brickworks’ 2.44%.

While the difference in yields is very little, Soul Patts has demonstrated faster dividend growth recently. Over the past five years, Soul Patts has raised its dividends at around 9% per year, higher than approximately 3% for Brickworks.

Which shares are cheaper?

The Brickworks share price appears slightly cheaper than Soul Patts on a price-to-earnings ratio (P/E) and price-to-book (P/B) ratio basis. Using FY25 earnings estimates by S&P Capital IQ:

• Soul Patts shares are trading at a P/E ratio of 24x and a P/B ratio of 1.2x
• Brickworks shares are trading at a P/E ratio of 19x and a P/B ratio of 1.1x

Foolish takeaway

While I like both of these ASX dividend shares for their stability and track records, my pick would go to Brickworks shares because they have a better growth prospect and slightly cheaper valuations today.

The post Should you buy Brickworks or Soul Patts shares today? appeared first on The Motley Fool Australia.

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• 3 winning tips both Warren Buffett and Peter Lynch recommend
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Motley Fool contributor Kate Lee has positions in Brickworks. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Santos Ltd (ASX: STO) shares are outperforming the benchmark today.

In late afternoon trade, shares in the S&P/ASX 200 Index (ASX: XJO) energy stock are up 0.7%, swapping hands for $7.40 apiece.

That compares to a 0.2% loss posted by the ASX 200 at this same time.

Over the full year, however, Santos has underperformed the benchmark. Santos shares are down 2.3% over 12 months compared to a 6.4% gain posted by the ASX 200.

This doesn’t include the 40.2 cents a share in unfranked dividends Santos delivered over the year. That sees that stock trading on a trailing yield of 3.8%.

Now, that’s all water under the bridge today.

Looking ahead, are Santos shares a good investment right now?

Time to buy Santos shares?

The answer to that question is somewhat dependent upon who you ask.

Catapult Wealth’s Dylan Evans isn’t a big fan of Santos shares at the moment, with a sell recommendation on the stock.

According to Evans (courtesy of The Bull), “We prefer to have limited exposure to oil and gas given developed countries are beginning to transition from fossil fuels to cleaner energy, albeit slowly.”

Evans added:

There’s little doubt LNG will continue to be an important energy solution for years to come. However, gas prices are closely linked to oil markets, which were recently showing signs of oversupply as demand falls. OPEC is reluctant to cut supplies to support prices as it doesn’t want to run the risk of losing market share.

Goldman Sachs has a decidedly more bullish take on Santos shares.

Following Santos’ full-year results, reported on 21 February, the broker reinstated Santos as a buy, citing “significant valuation discount with strong production growth to offset global gas price weakness.”

Goldman placed a $8.60 price target on Santos shares. That’s more than 16% above current levels.

Goldman noted:

We expect 2024 to be the trough for STO production and earnings as Barossa and Pikka start up over 2025-2026 and support a ~10% production CAGR over the next 3 years, offsetting the impact from softening global gas prices as the LNG market moves back into material oversupply.

With key growth project Barossa materially de-risked following the Federal Court’s Jan 15 Judgment to lift the injunction halting pipeline installation and a lack of challenges to NOPSEMA project approvals, we see attractive valuation with STO trading at ~0.8x NAV.

As for the oil price, Brent crude oil reversed a lengthy slide on 4 June, when Brent was trading for US$77.52 per barrel. Today that same barrel is worth US$85.32, up 10.1%.

And in what could offer some tailwinds for Santos shares over the coming months, Aldo Spanjer, a senior commodities strategist at BNP Paribas, has a bullish outlook for oil in the quarter ahead.

“I’m comfortable being bullish for Q3 still,” Spanjer said (quoted by Bloomberg).

“While June looks weak, I think demand comes up for diesel, gasoline and particularly jet. That’s a pretty strong demand increase over the next two to three months.”

The post Are Santos shares a good investment right now? appeared first on The Motley Fool Australia.

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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.

National Australia Bank Ltd (ASX: NAB) shares may get a boost from a recent cryptocurrency investment if it can better serve institutional investors. The ASX bank share has just bought a stake in a business called Zodia Custody.

Being able to provide a full service to institutions is important because a lot of NAB’s earnings come from its business clients.

In the FY24 half-year result, the business generated $1.67 billion of cash earnings in the business and private banking, $899 million from corporate and institutional banking, while just $553 million came from personal banking and NZ$750 million from New Zealand banking. Being able to provide everything that clients want can help win and retain institutions.

NAB’s crypto industry investment

According to reporting by the Australian Financial Review, NAB has bought a stake in Zodia Custody, which is part of the bank’s cryptocurrency strategy to safeguard digital assets held by institutional investors rather than launch its own stablecoin.

Zodia Custody is a competitor to Coinbase and has other major investors, including UK bank Standard Chartered, US custody giant Northern Trust and Japanese lender SBI Holdings.

The AFR reported that clients will be able to hold cryptocurrencies such as bitcoin and ether, as well as tokenised real-world assets, including commodities or property.

How much was invested? NAB and Zodia did not want to reveal the size of the investment or the valuation of Zodia Custody, according to the newspaper.

This is not an exclusive arrangement between NAB and the cryptocurrency holding business – Zodia will look to serve a wide array of investors, which includes other banks. NAB is hoping this partnership will put it ahead of the ‘regulatory curve’ and lead to partnerships that could link NAB institutional customers to Zodia. Zodia is also applying for a licence in Japan.

What’s so special about Zodia?

The AFR reported that Australian cryptocurrency laws could lead to requirements that crypto assets are separated from the internet, stored on hard drives and stored in physical bank vaults – this is called cold storage.

The Zodia technology was reportedly originally developed by the UK military which allows communication from a cold storage vault to the internet, but doesn’t allow communications to flow back, enabling offline assets to be traded at close to real-time.

 The AFR reported NAB Ventures managing director Amanda Angelini explained the bank aimed to focus on providing simple, safe and secure services:

This is particularly important in newer fields where technology continues to evolve quickly.

NAB Venture’s investment in Zodia was based on their innovative approach, institution-grade safety and strong work with regulators.

NAB share price snapshot

Since the start of 2024, the NAB share price has climbed more than 16%, as shown on the chart below, while the S&P/ASX 200 Index (ASX: XJO) has only risen around 2%.

The post Own NAB shares? The bank just made an important crypto investment appeared first on The Motley Fool Australia.

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