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The Cronos Australia Ltd (ASX: CAU) share price is lifting today amid the company’s FY22 results.

Cronos shares are currently trading at 36 cents, a 4.35% lift. In contrast, the S&P/ASX 200 Index (ASX: XJO) is falling 1.94% today.

Let’s take a look at what this ASX cannabis share reported today.

Net profit surges by 324%

Highlights of Cronos Australia’s FY22 results include:

• Net profit after tax (NPAT) surged 324% on previous financial year to $6 million
• EBITDA lifted 390% on FY21 to $10.5 million
• Revenue rose 208% to $67 million
• Fully franked dividend of 1 cent per share

What else did the company report?

Cronos reported average gross margins between 35% to 40% on its products.

Receipts from customers lifted 245% on the previous year, while net cash flows from operations soared 1,164% to more than $13.5 million.

Cronos said it is the only ASX medicinal cannabis company to declare a dividend. The company is also inviting shareholders to take part in a dividend reinvestment plan.

Cronos now has $16.1 million cash at the bank and no debt aside from standard leases.

The company’s medicinal cannabis patients have lifted from nearly zero in 2018 to 100,000 in 2022.

The dividend will be paid on 11 October.

Management commentary

Commenting on the results and dividend, executive director Rodney Cocks said:

Cronos Australia is very pleased to be able to declare a dividend to its shareholders at 1.0 cent
per share, fully franked.

This is, yet again, another first for Cronos Australia, being the first ASX-listed medicinal cannabis company to report a profit and now, the first to declare a dividend.

The Company has achieved record growth during the 2022 financial year and it is
gratifying that the Company can share its success with its shareholders in a very tangible way.

What’s next?

This ASX cannabis share is predicting revenue in FY21 to be more than $100 million, based on current sales and growth.

Cronos said the Australian medicinal cannabis market is expected to be more than $400m by the end of the 2022 calendar year, nearly 74% higher than the 2021 calendar year.

Cronos believes it is well positioned for “sustainable, scalable growth” in FY23 and the years ahead.

Cronos share price snapshot

The Cronos Australia share price has soared 227% in a year, while it has climbed 80% year to date.

In the past month alone, this ASX cannabis share has lifted 24%.

For perspective, the benchmark ASX 200 Index has lost nearly 7% in the past year.

The post Guess which company just became the first ASX cannabis share to pay a dividend appeared first on The Motley Fool Australia.

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More reading

• Can ASX cannabis shares ever fully recover?

Motley Fool contributor Monica O’Shea 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.

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The S&P/ASX 200 Index (ASX: XJO) is off to a shocking start to the trading week so far this Monday. At the time of writing, the ASX 200 has lost a depressing 1.92% at just under 6,970 points. Ouch.

But rather than letting that make a Monday even worse, let’s instead delve a little deeper into this market pain and take a look at the ASX 200 shares currently topping the market’s trading volume charts, according to investing.com.

The 3 most traded ASX 200 shares by volume this Monday

South32 Ltd (ASX: S32)

First up today we have mining giant South32. This ASX 200 resources share has had a notable 13.43 million shares trade hands on the markets thus far. In this case, it seems a nasty share price fall is behind this volume. There’s been no major news out of the company today.

But that has not stopped South32 from getting caught up in the market’s selloff, with the miner currently down a painful 3.19% at $4.095 a share.

Telstra Corporation Ltd (ASX: TLS)

Next up today is ASX 200 telco Telstra. A hefty 13.64 million Telstra shares have found a new caller as it currently stands this Monday. There has been nothing new out of Telstra during this ASX session.

So these falls are probably the result of the tumble Telstra shares have been enduring during this session. The telco is currently nursing a loss of 0.99% at $3.99 a share.

Pilbara Minerals Ltd (ASX: PLS)

ASX 200 lithium producer Pilbara Minerals is our final share to check out today. In PIlbara’s case, a sizeable 24.92 million shares have been bought and sold on the share markets this Monday.

Again, with no news out of Pilbara, we can probably thank the falls in the company’s shares themselves. In Pilbara’s case, this lithium stock has lost a chunky 2.11% to $3.475 a share.

The post Here are the 3 most heavily traded ASX 200 shares on Monday appeared first on The Motley Fool Australia.

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More reading

• Are Pilbara Minerals shares better value than Allkem right now?
• How much income will Telstra shares pay for FY22 after this month’s dividend hike?
• What’s the outlook for the South32 share price following the miner’s latest results?
• Top brokers name 3 ASX shares to buy next week
• ASX 200 reporting season weekly wrap: Top risers and fallers

Motley Fool contributor Sebastian Bowen has positions in Telstra Corporation Limited. 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 Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) is having a day to forget on Monday. In afternoon trade, the benchmark index is down 1.9% to 6,967.1 points.

Four ASX shares that have managed to avoid the selloff and push higher are listed below. Here’s why they are rising:

A2 Milk Company Ltd (ASX: A2M)

The A2 Milk share price is up 9% to $5.36. Investors have been buying this infant formula company’s shares after its full year results impressed. Not only did A2 Milk deliver a net profit after tax ahead of expectations, it decided to return some of its huge cash pile to investors. A2 Milk intends to return NZ$150 million via an on-market share buyback.

Lovisa Holdings Ltd (ASX: LOV)

The Lovisa share price is up 5% to $19.61. This morning the fashion jewellery retailer released its full year results and revealed a 59.3% increase in revenue to $458.7 million and a 116.3% jump in net profit after tax to $59.9 million. Management also advised that price increases introduced during the third quarter to combat inflation delivered sales growth with minimal impact to volumes.

McMillan Shakespeare Limited (ASX: MMS)

The McMillan Shakespeare share price has jumped 14% to $14.60. This follows the release of the salary packaging company’s full year results for FY 2022. The company reported 9.2% increase in revenue to $594.3 million and a 16.5% increase in underlying profit to $83.8 million. This and its strong balance sheet have allowed an off market share buyback to be announced.

Tyro Payments Ltd (ASX: TYR)

The Tyro share price has risen 6% to $1.06 following the release of the payments company’s full year results. Tyro reported a 39% increase in revenue to $229.2 million but a loss after tax of $29.6 million. The company finished the period with a total of 109,248 terminals, which was up 4% year over year.

The post Why A2 Milk, Lovisa, McMillan Shakespeare, and Tyro are storming higher appeared first on The Motley Fool Australia.

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More reading

• Everything you need to know about the latest A2 Milk share buyback
• A2 Milk share price soars 8% as company regains money-making mojo
• McMillan Shakespeare share price revs 9% higher on bumper final dividend
• Tyro Payments shares surge as gross profit lifts 34% in FY22
• Lovisa share price lifts as full-year profit surges 116%

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 A2 Milk, Lovisa Holdings Ltd, and Tyro Payments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Woodside Energy Group Ltd (ASX: WDS) share price is in the red alongside the broader market on Monday as the company gears up to post its half-year earnings tomorrow.

No doubt all eyes will be on the S&P/ASX 200 Index (ASX: XJO) energy giant on Tuesday morning.

In the meantime, however, it’s trading in the red. The Woodside share price is currently $35.405, 1.52% lower than its previous close.

For context, the ASX 200 has slumped 1.92% so far today while the S&P/ASX 200 Energy Index (ASX: XEJ) has slipped 1.45%.

Let’s take a closer look at what’s going on with Woodside on Monday and what the market might expect from the company tomorrow.

Woodside share price slips ahead of half-year results

The Woodside share price is sinking despite oil prices having closed higher last week.

The Brent crude oil price rose 1.7% to US$100.99 a barrel on Friday, leaving it 4.4% higher than it finished the previous week. Meanwhile, the US Nymex crude oil price lifted 0.6% to US$93.06 a barrel, ending the week 2.5% higher.

But that’s not translating to gains in the energy sector. It’s being weighed down by shares in Worley Ltd (ASX: WOR) and Paladin Energy Ltd (ASX: PDN) – they’re falling 4.8% and 4.1% respectively right now.

But that might all turn around tomorrow as Woodside reports for the first time since it absorbed BHP Group Ltd (ASX: BHP)’s petroleum business.

Prior to the merger, Woodside expected to produce between 92 million barrels of oil equivalent (MMboe) and 98 MMboe over the whole of 2022. More recently, that was upped to between 145 MMboe and 153 MMboe.

On top of that, oil prices surged in the first half of 2022 following Russia’s invasion of Ukraine. That may have helped to bolster the ASX 200 giant’s bottom line.

Despite today’s downturn, the Woodside share price is still boasting huge gains. It has lifted 56% since the start of 2022. It’s also trading 77% higher than it was this time last year.

The post Woodside share price slumps ahead of tomorrow’s earnings update appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Monday
• Earnings preview: Here are 3 ASX 200 shares reporting next week
• 5 things to watch on the ASX 200 on Friday
• Why did the Woodside share price hit a 2-year high on Thursday?
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Brooke Cooper 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.

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The BWX Ltd (ASX: BWX) share price won’t be going anywhere on Monday.

This comes as the company requested the ASX that its shares be suspended from quotation immediately.

Currently, the personal care products company shares are frozen at 63 cents apiece.

Why is the BWX share price suspended?

The company requested the BWX share price to be suspended as it requires additional time to prepare its full-year results.

Previously, BWX had been scheduled to release its audited FY 2022 results to the market tomorrow.

However, due to irregularities in its financial reports, the company has asked the ASX for the suspension to last until 30 September.

BWX stated that it “anticipates the suspension will cease on it lodging an Appendix 4E and audited accounts with ASX in relation to its FY22 full financial year.”

What does this mean?

Management provided some further insight in regards to why it needed more time to collate its FY 2022 results.

It said that “certain revenue recognition issues for FY21 and FY22 and the likely impairment of its intangible assets to a level significantly below their carrying value as previously foreshadowed to the market on 28 June 2022.”

This means that BWX could fall short of its previously stated full-year guidance for FY 2022.

Following its trading update and capital raise announcement in June, the company forecasted revenue to be approximately $206 million (before significant items).

FY22 forecast of earnings before interest, tax, depreciation and amortisation (EBITDA) (before significant items) was projected to be around $6 million to $10 million.

And on the bottom line, net profit after tax (NPAT) (before significant items) was forecasted to come at a loss of roughly $10 million to $14 million.

About the BWX share price

Since this time last year, BWX shares have headed on a downhill trend to hit an all-time low of 61 cents on 23 August.

Ultimately, this led the company’s shares to register a loss of 88% for the period.

Based on today’s price, BWX has a market capitalisation of around $125.99 million.

The post Why is the BWX share price on ice today? appeared first on The Motley Fool Australia.

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More reading

• Nitro Software share price plunges 7% amid $25 million loss
• How does the BHP dividend stack up against the latest Fortescue payment?
• Everything you need to know about the latest Northern Star dividend
• Here’s why the Bitcoin price just dipped back below US$20,000
• What makes ‘Dividend Aristocrats’ a great investment for you?

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

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The Nitro Software Ltd (ASX: NTO) share price has taken a hit today amid the company releasing its half-year results for the first half of FY2022.

Shares of the document solutions software as a service (SaaS) startup are currently trading for $1.12 each, down 7.05% on Friday’s closing price.

Let’s go over the highlights of the company’s results for the half year ending 30 June 2022.

What did Nitro Software report?

• Operating earnings before interest, taxes, depreciation, and amortisation (EBITDA) down 107% year over year (yoy) to a $US6.3 million ($AU9.18 million) loss
• Net loss up 101% yoy to US$17.3 million ($AU25.22 million)
• Annual recurring revenue (ARR) up 52% yoy to $US51.5 million ($AU75.09 million)
• $US35.2 million ($AU51.32 million) in cash holdings and no debt
• No dividend declared

Nitro reported higher operating expenses during the reporting period. Research and development (R&D) accounted for the largest increase, growing 58% yoy.

The company also recorded a significant depreciation and amortisation (D&A) line item. This figure jumped 265% yoy to $US3.3 million ($AU4.81 million), affecting Nitro’s net loss.

On the positive side, the company reported a strong compound annual growth rate (CAGR) for its ARR and subscription revenue. They grew 54% and 60% respectively from June 2020 to June 2022. Another win for the company was its high-quality earnings, with 67% of revenue coming from Fortune 500 companies.

What else happened?

Nitro Software has accelerated its transition to subscription revenue since FY2017 for its business sales channel. Subscription revenue increased to 90% in 1H2022, up from just 14% in FY2017.

The company also landed a couple of marquee clients in the first half of 2022, including a US insurer that gave the platform an additional 10,000 users. Another client in the Fortune 100 index purchased 9,000 Nitro PDF licenses in 2017.

What did management say?

Nitro Software co-founder and CEO Sam Chandler said:

Although the first half did not meet all our expectations for performance, it was still a period of growth in which ending ARR grew by 52% and scaled to over US$51 million after more than doubling in the two years to June 30. Subscription revenue also grew fast, increasing 55% year-on-year. But macroeconomic conditions have been challenging, and sales cycles lengthened towards the end of the period. As a result, we revised our plan for the second half including restructuring our Go-to-Market organisation for improved performance and efficiency, reducing costs by US$5 million, and accelerating the pathway to cash flow positive.

What’s next?

The e-signing global spend is set to grow at a CAGR of 9% over the next decade and 44% through to 2025. This will be buoyed by growth in signing for high-value transactions as consumers elevate their needs for a trusted solution, the company said.

Nitro Software intends to be cash flow positive by 2H2023. As for guidance, the company expects to make a US$10-$13 million ($AU14.57-18.94 million) loss for the remaining year, with ARR falling in the range of US$57-60 million ($AU83.05-87.43 million).

Nitro Software share price snapshot

The Nitro Software share price is down 54% year to date. Its losses are far greater than the broader market’s with the S&P/ASX 200 Index (ASX: XJO) down roughly 7% over the same period.

The company’s current market capitalisation is around $276 million.

The post Nitro Software share price plunges 7% amid $25 million loss appeared first on The Motley Fool Australia.

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More reading

• Here are 2 exciting ASX growth shares tipped as buys by analysts
• 2 exciting small cap ASX shares to buy according to brokers
• Goldman Sachs names 2 small cap ASX shares to buy with 80%+ upside

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

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Fortescue Metals Group Limited (ASX: FMG) shares are suffering after the company’s latest dividend was slashed by 43% this morning, leaving many wondering how it stacks up against BHP Group Ltd (ASX: BHP)’s most recent payout.

The smaller of the two S&P/ASX 200 Index (ASX: XJO) iron ore giants has offered investors a $1.21 final dividend per share they hold. Meanwhile, BHP will pay a US$1.75 per share final dividend next month.

Obviously, the latter is offering a larger payout per share, but is it really superior to that of Fortescue? Keep reading as we compare the pair.

Is the BHP dividend better than that of Fortescue?

Fortescue revealed its $1.21 final dividend for financial year 2022 on Monday and, while the company’s share price is being weighed down by its results, its payout might actually compete with that of BHP.

Fortescue’s latest dividend brings its full-year offerings to $2.07. Considering the Fortescue share price at the time of writing – $18.98 – it’s trading with a dividend yield of 10.9%.

The offering also represents a payout ratio of 75% of net profit after tax (NPAT) and comes fully franked. That means it could bring additional benefits for some investors at tax time.

Meanwhile, the true value of BHP’s latest dividend in Australian Dollars will be revealed next week. However, US$1.75 represents $2.55 Aussie bucks at today’s exchange ratio – which would bring BHP’s full-year dividends to $4.63.

Considering that figure and the BHP share price right now – $42.08 – the materials giant could arguably boast a dividend yield of 11% – a fraction higher than that of Fortescue.

On top of that, its final dividend represents a 77% payout ratio and also comes fully franked.

Both companies offer a dividend reinvestment plan (DRP), allowing investors to receive dividends in the form of new shares.

All in all, both companies are offering a decent dividend at a strong yield. But that of BHP represents slightly better value right now.

Investors wanting to get on board for BHP’s upcoming final dividend better do so quickly. The stock will trade ex-dividend on Thursday, meaning Wednesday will be the last chance for new investors to secure the payout.

The post How does the BHP dividend stack up against the latest Fortescue payment? appeared first on The Motley Fool Australia.

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More reading

• Everything you need to know about the trimmed-down Fortescue dividend
• Fortescue share price backtracks as final dividend is slashed by 43%
• 5 things to watch on the ASX 200 on Monday
• 2 ASX 200 dividend shares to buy now according to analysts
• Earnings preview: Here are 3 ASX 200 shares reporting next week

Motley Fool contributor Brooke Cooper 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.

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It’s been a brutal day for ASX shares and the S&P/ASX 200 Index (ASX: XJO) so far this Monday. At the time of writing, the ASX 200 has lost a nasty 1.9% and is back to around 6,970 points. It’s a similar story for the Northern Star Resources Ltd (ASX: NST) share price.

Northern Star shares have not escaped the bad mood of the markets today. The gold miner is presently down by 2.1% at $7.42 a share, underperforming the broader market.

This move comes after the ASX gold share reported its full-year earnings for the 2022 financial year this morning.

As we covered at the time, this saw Northern Star report a 35% lift in revenues to $3.735 billion. Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) also rose, by 31% to $1.517 billion. But underlying net profit after tax (NPAT) dropped 27% to $273 million.

The company also announced an on-market share buyback program worth up to $300 million.

Everything you need to know about Northern Star’s dividend

But let’s talk about Northern Star’s dividend announcement. The gold miner declared a final dividend of 11.5 cents per share, fully franked.

This is a 15% improvement on the interim dividend of 10 cents per share the gold miner paid out back in March. It’s also a big increase over FY2021’s final dividend of 9.5 cents per share.

It brings Northern Star’s total dividend payments for FY22 to 21.5 cents per share, again an improvement on the 19 cents per share of FY21.

NorthernStar shares will trade ex-dividend for this payment on 6 September, which means investors have until that date to buy Northern Star shares if they want to receive this dividend. It will then be paid out on 29 September.

Northern Star is running a dividend reinvestment plan (DRP), so investors also have the option of receiving additional shares instead of a cash payment if they so choose.

As it stands today, Northern Star shares have a dividend yield of 2.61%.

The post Everything you need to know about the latest Northern Star dividend appeared first on The Motley Fool Australia.

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More reading

• Northern Star share price backtracks despite revenue lifting 35% to $3.7b
• 5 things to watch on the ASX 200 on Monday
• Can the gold price outshine sticky inflation?
• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Monday

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 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.

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The Bitcoin (CRYPTO: BTC) price has fallen back below the psychologically important US$20,000 level.

The world’s original crypto is currently trading for US$19,773 (AU$28,775).

That sees Bitcoin down 2% over the past 24 hours, 8% since this time last week, and down a painful 59% year-to-date, according to data from CoinMarketCap.

And it’s not just the Bitcoin price in retreat.

Ethereum (CRYPTO: ETH), the world’s number two crypto by market cap, is trading for US$1,448, also down 2% today and 10% over the past week.

Why is the Bitcoin price dropping?

Bitcoin, and indeed the vast majority of top cryptos, have all lost significant ground since US Fed chair Jerome Powell addressed his fellow global central bankers at the Jackson Hole financial summit in Wyoming. Powell made his speech on Friday morning (Friday night Aussie time).

In the lead-up to the Fed chair’s speech, the Bitcoin price was trading for US$21,761.

Investors hoping to hear the world’s most influential central bank might be approaching the end of its tightening cycle were left wanting.

“Restoring price stability will likely require maintaining a restrictive policy stance for some time,” Powell said. “The historical record cautions strongly against prematurely loosening policy.”

Powell said that “higher interest rates, slower growth, and softer labour market conditions will bring down inflation”, adding that “they will also bring some pain to households and businesses”.

Crypto investors watching the Bitcoin price dip back below US$20,000 will be feeling some of that pain today as risk assets have sold off across the board.

On Friday, the NASDAQ closed down 3.9%. And so far in 2022, cryptos have moved in line with growth shares.

Could this be a buying opportunity?

However, not everyone is bearish following the latest retrace in the Bitcoin price.

Mark Newton, technical strategist at Fundstrat, believes the token’s recent trading pattern presents a buying opportunity.

According to Newton (courtesy of Bloomberg):

Friday’s break looks important and negative in the short run but should line up with buying opportunities into early September as cycles remain bullish and project higher prices into November 2022.

The post Here’s why the Bitcoin price just dipped back below US$20,000 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 positions in and has recommended Bitcoin and Ethereum. 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.

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

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

From time to time, you might read about the S&P 500 Dividend Aristocrats. These companies are S&P 500 index members that have paid and raised a dividend for at least 25 consecutive years.

Those looking for total returns might scoff at dividend stocks as mature companies that have left their best growth days in the rearview mirror. But consider that the Dividend Aristocrats have collectively outperformed the S&P 500 index by an average of 0.74% annually, which creates a significant margin over the course of decades.

What’s the secret to their success and what can that mean for your portfolio? Here is why every investor should at least consider adding some Aristocrats to their long-term investment strategy.

The anatomy of a dividend

Most investors know what a dividend is: Companies that have available cash will sometimes share it with shareholders. But many investors skip over the anatomy of a dividend and how it impacts a business.

For example, a dividend is a cash expense. Accounting rules can twist a lot of the financial jargon and metrics you see in a company’s financials. A company like Netflix can show a bottom-line profit but generate little free cash flow simultaneously because accounting rules can affect how companies report their earnings.

NFLX net income (TTM). Data by YCharts. TTM = trailing 12 months.

A company can only pay a dividend in cash; it can borrow money to pay a dividend, but that’s a losing game that never lasts long. A business that can not only pay you part of its cash profits but also keep increasing its annual payout can only do so if it’s growing over the long term. You can’t fake it.

Successful investing can be as simple as buying quality businesses and letting them do their magic over time. A Dividend Aristocrat often fits that bill simply because of what is entailed with paying and raising a cash expense like a dividend.

An additional level of compounding

A steadily growing business will generate capital gains as earnings grow over time, but what you can do with dividends propels Aristocrats as investments. Dividends are essential to investment returns; they made up 31% of total returns from the S&P 500 from 1926 to 2021.

You can also reinvest dividends, taking the cash and buying more shares. Those new shares don’t cost you any out-of-pocket money beyond your initial investment, and will pay dividends of their own, creating a compounding effect.

PG data by YCharts.

This can have a considerable impact on your total investment returns over time. Consider a stock like Procter & Gamble, a Dividend King with 66 consecutive years of dividend increases. Investors have earned 4,720% in lifetime returns from capital appreciation since the early 1970s. That’s great, but that would have nearly tripled to 12,120% by reinvesting the dividends to take advantage of compounding!

You don’t need home runs to win the game

Ultimately, you don’t need to find the next Amazon to have a lucrative investment journey. Derek Jeter is one of baseball’s greatest players because he could consistently hit the ball year in and year out, even if it didn’t often go out of the park.

The same applies to investing. A Dividend Aristocrat probably won’t make you rich overnight, but you can become wealthy by buying and holding Aristocrats as part of a diversified portfolio with a long-term outlook.

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

The post What makes ‘Dividend Aristocrats’ a great investment for you? appeared first on The Motley Fool Australia.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Justin Pope 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 Amazon and Netflix. The Motley Fool Australia has recommended Amazon and Netflix. 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.

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