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The A2 Milk Company Ltd (ASX: A2M) share price is having a day to forget on Wednesday.

This comes after the embattled company provided an update regarding its FDA application to import products into the United States.

During the first few minutes of market open, shares in the infant formula company dropped to an intraday low of $4.60.

However, since then, its shares have moved in circles to currently trade at $4.71, down 7.83%.

Why did the A2 Milk share price fall?

The notice from the US Food and Drug Administration (FDA) to defer further requests to import infant milk formula (IMF) products into the United States is impacting the A2 Milk share price today.

The shock news appears to have caught investors off guard after A2 Milk shares rose more than 10% in the past week.

This followed the recent media speculation that the company was nearing FDA approval, in which management dismissed the report thereafter.

Nonetheless, A2 Milk would have been hoping to receive a similar outcome to its smaller rival, Bubs Australia Ltd (ASX: BUB). The latter secured a deal with the Biden Administration to import 1.25 million tins of baby formula into the United States.

An article from The Australian reported that Wilsons analyst James Ferrier said the FDA decision “could suggest US authorities are becoming more comfortable with the supply situation.”

Earlier this year, US consumers faced an infant formula shortage following potential contamination at one of its largest manufacturing plants.

Ferrier also went on to add:

This is obviously a disappointing outcome for A2 Milk in regards to short-term earnings potential or an opportunity to build brand awareness in the US.

It also creates uncertainty for those who have secured temporary market access, in relation to prospects for more permanent market access beyond November, which is the end date of the policy.

It is worth noting though that while the update may leave a sour taste in investors’ mouths, the revenue outlook remains the same.

Management is expecting to achieve revenue growth this year after reporting a 2.5% decline to $661 million in H1 FY22.

A2 Milk is scheduled to report its full year results on Tuesday 30 August.

Is the A2 Milk share price a buy despite its latest woes?

Despite the setback, a couple of brokers believe that the A2 Milk share price is currently trading at a bargain price.

Wilsons has a market weight rating and a $5.98 price target on the company’s shares. Based on the current price, this implies an upside of around 27%.

Furthermore, Morgans believes A2 Milk shares are worth $6.39 apiece according to its last valuation.

While more bullish than Wilsons’ price target, this implies an upside of 35% for investors.

The post Why is the A2 Milk share price spilling 8% today? appeared first on The Motley Fool Australia.

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More reading

• A2 Milk share price on watch amid FDA update
• Own A2 Milk shares? Here’s how the company is battling to rebuild lost daigou sales
• Here are the top 10 ASX 200 shares today
• Why A2 Milk, Qualitas, Telix, and Ventia shares are pushing higher today
• Here’s why the A2 Milk share price just popped then stopped

Motley Fool contributor Aaron Teboneras has positions in A2 Milk. 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 A2 Milk and BUBS AUST FPO. 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 GrainCorp Limited (ASX: GNC) share price is surging today amid the company announcing it has increased its earnings guidance for this year.

Shares in the integrated grain agribusiness currently trade for $8.17 each, 6.94% higher after hitting an intraday high of $8.43 a share this morning. That was a jump of more than 10% on yesterday’s closing price.

For context, GrainCorp’s home sector, the S&P/AXS 200 Consumer Staples Index (ASX: XSJ), is currently up 0.9% while the benchmark S&P/AXS 200 Index (ASX: XJO) is down 0.07%.

Let’s find out what the company announced to the market today.

What happened?

GrainCorp upgraded its earnings guidance this morning for the period until September 30 this year.

Estimates for earnings before interest, taxes, depreciation, and amortisation (EBITDA) have been raised to $680-$730 million, well up from the earlier guidance of $590-$670 million.

As well, the company’s net profits after tax (NPAT) guidance was also boosted to $365-$400 million, up from $310-$370 million.

GrainCorp Managing Director and CEO Robert Spurway said: 

We are operating our supply chains at close to full capacity and our teams have done an outstanding job in overcoming disruptions relating to weather and COVID to export 7.9 million tonnes of grain year-to-date. This positive outlook is driving an increase in fourth quarter activity and supporting export volumes, forward contracted grain sales and supply chain margins.

GrainCorp said it will invest in additional bunker storage and grain handling equipment in preparation for the upcoming winter harvest. They are also recruiting additional people to help harvest crops.

GrainCorp share price snapshot

The GrainCorp share price has gained more than 52% in the past 12 months although it is still 1.3% lower year to date.

Its shares are outperforming the benchmark index which contracted around 7% in the last year and 5.6% in 2022 so far.

At the current share price, GrainCorp’s market capitalisation is $1.8 billion.

The post Why is the GrainCorp share price up 7% today? appeared first on The Motley Fool Australia.

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More reading

• The CBA share price looks downright expensive
• These were the worst performing ASX 200 shares in July
• ASX 200 supermarket shares lead as household spending jumps

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 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 Global Lithium Resources Ltd (ASX: GL1) share price is taking off on the back of a record find at the company’s Manna Lithium Project.

Drilling at the project has uncovered the largest single intercept of lithium bearing pegmatite in its history.

The Global Lithium share price is leaping to trade at $1.93 following the company’s announcement. That’s 13.2% higher than it was at Tuesday’s close.

Let’s take a closer look at the news that’s got the market bidding the lithium share higher.

What’s driving the Global Lithium share price today?

The Global Lithium share price is surging on news of the company’s Manna Project.

Reverse circulation drilling at the project returned a major lithium find while further assays have extended the project’s northern strike by 220 metres.

On top of that, ground mapping has identified more large outcropping pegmatites.

The drill program is now focusing on drilling out the extended area so to include results in an updated mineral resources estimate. That estimate is expected to hit the market in the December quarter.

Global Lithium general manager of exploration Stuart Peterson commented on the findings driving the company’s share price higher today, saying:

The Manna Project is continuing to impress with these exceptional results. The north/eastern extension of the deposit is proving to be very encouraging.

It’s been a busy year or so for the company. After floating on the ASX in May 2021, Global Lithium snapped up its 80% hold in the Manna Project for $33 million in December.

Investors who jumped on board the company during its initial public offering (IPO) will be laughing. The stock is currently trading 865% higher than its IPO offer price of 20 cents per share.

It has also gained 69% since the start of 2022 and 408% over the last 12 months.

The post Why is the Global Lithium share price rocketing 13% on Wednesday? appeared first on The Motley Fool Australia.

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More reading

• Why are ASX lithium shares having such a top run on Wednesday?
• 2 ASX lithium shares lifting on new discoveries today
• ‘Great results’: Here’s why the Global Lithium share price is leaping 6% today

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 Lake Resources N.L. (ASX: LKE) share price has extended its gains at midday on Wednesday.

At the time of writing, the Lake share price is trading 6.86% higher at $1.33, down off its intraday high of $1.35 early in the session.

What’s pushing Lake Resources shares higher today?

While there’s been no market-sensitive information released by the company today, investors continue to rally the Lake Resources share price.

This extends gains to almost 85% over the past month of trade for the lithium miner, after reaching six-month lows of 60 cents on 15 July.

The price of lithium is also a weighting factor, as prices for the battery metal still command a premium and are up more than 406% year on year.

Demand for the metal surged in recent weeks following the reopening of Shanghai in China following weeks of lockdowns.

The reopening saw a 129% and 63% annual and monthly increase in electric vehicle sales demand during June.

In addition, metals and mining shares have caught a bid since rolling into the new financial year.

The benchmark S&P/ASX 300 Metals and Mining Index (ASX: XMM) has gained more than 6% this past month.

This momentum has no doubt spilled over onto the Lake Resources share price, as seen in the chart below, along with the price of lithium for the past 12 months.

The post Up 85% in a month, Lake Resources share price extends gains on Wednesday appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Why Coronado Global, Lake, Megaport, and REA shares are storming higher
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Could this development further energise ASX lithium shares in FY23?
• Why is the Lake Resources share price powering up 17% today?

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 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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1) The Commonwealth Bank of Australia (ASX: CBA) share price has fallen 1% to around $100 after the banking giant reported cash profits growth of 11% and a full year fully franked dividend up 10% to $3.85 per share.

Volume growth was especially impressive, with double-digit gains in household and business deposits. Net interest margin, a measure of profitability, fell to 1.90%, but CBA expects it to increase in a rising interest rate environment. 

Looking ahead, CEO Matt Comyn expects consumer demand to moderate as cost of living pressures increase, saying it’s a “challenging time.” 

With the CBA share price trading at $100, CBA shares trade on a price-to-earnings ratio (P/E) of 18 times and a fully franked dividend yield of 3.85%. 

Down just 5% in the past 12 months, CBA shares have been a beneficiary of the rush to so-called value stocks and safety.

Yet at today’s valuation, CBA shares look downright expensive, especially given the competitive environment and economic outlook. 

There’s better value elsewhere. 

2) CBA’s premium valuation hasn’t stopped leading listed investment company Australian Foundation Investment Company (ASX: AFI) holding CBA shares as its largest position, with a weighting of 9.2%.

In their defence, given the $8.8 billion size of their portfolio, AFIC has little option but to hold large licks of the largest ASX 200 companies. 

After falling 2% to around $8 in Wednesday trade, the AFIC share price trades at a 12% premium to its net asset value, and trades on a rather paltry 3% fully franked dividend yield. 

Popular amongst retirees, the AFIC is another beneficiary of the so-called flight to safety. There’s much better value elsewhere.

3) GrainCorp (ASX: GNC) shares are definitely cheap.

The integrated grain and edible oils business once more upgraded its earnings guidance, saying for the 12 months ending 30 September 2022, GrainCorp is expecting underlying net profits to be in the range of $365 to $400 million.

Even after the Graincorp share price jumped 7% higher to $8.20 in Wednesday trade, the company is trading on a P/E of less than five times earnings.

A cyclical company that’s dependent on the prevailing weather conditions deserves to trade at a discount. But less than fives times earnings, and a 4.1% fully franked dividend yield? Maybe it’s a little too cheap.

4) In Australian dollar terms, the gold price has had a reasonably good run over the past five years, up around 60%, handily outperforming the very modest 23% gain in the ASX 200 index over the same period.

Despite that, those decent gains in the gold price have not been reflected in the share price of gold mining company St Barbara Limited (ASX:SBM), down 8% today to $1.11 and down a whopping 78% from its 2018 peak.

Gold miners are perennially plagued by lower grades and higher costs, with St Barbara no exception. Why anyone would invest in this unpredictable, capital-intensive industry is beyond me. 

Warren Buffett is not a fan of gold, once saying “what motivates most gold purchasers is their belief that the ranks of the fearful will grow”. 

If I were a shareholder of St Barbara, given its track record of disappointments, I’d be fearful of further downgrades in the future.

5) Speaking of Buffett, Bloomberg reports his Berkshire Hathaway as pouncing on the stock market slump to buy equities.

“Berkshire was a net buyer of equities in 2Q by $US3.8 billion, or $US45.2 billion in 2022, versus a $16 billion net seller in 2020-21.”

It’s typical Buffett, buying the dip. That said, Buffett is hardly going all-in, with Berkshire Hathaway sitting on over $US105m net cash.

Slow and steady wins the race, as do compounding returns. The 91-year-old Buffett has a net worth of over $US100 billion, with over 90% of his wealth amassed since he turned 65 years old. 

Who says you can’t get really rich when you’re old?

The post The CBA share price looks downright expensive appeared first on The Motley Fool Australia.

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More reading

• CBA share price slides today despite an 11% FY22 earnings leap
• Here’s everything you need to know about the latest CBA dividend
• How to play ASX bank shares for dividends this reporting season: expert
• CBA share price on watch after FY22 cash earnings jump to $9.6bn
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Bruce Jackson has positions in Berkshire Hathaway (B shares). The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Berkshire Hathaway (B shares). The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), and short January 2023 $265 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has recommended Berkshire Hathaway (B shares). 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 Imugene Limited (ASX: IMU) share price is soaring on Wednesday.

This comes after the company provided an update on its clinical trial of its oncolytic virotherapy candidate, Checkvacc.

The novel treatment aims to activate the immune system of cancer patients to treat and eradicate tumours.

In late morning trade, shares in the immuno-oncology company are up 11.11% to 30 cents.

What did Imugene announce to the ASX?

In its release, Imugene advised that City of Hope has dosed the first patient from the third group of participants in the Checkvacc phase 1 clinical trial.

City of Hope is one of the largest cancer research and treatment organisations in the United States.

The Checkvacc study is recruiting patients who suffer from triple negative breast cancer (TNBC).

Further, the primary goal of the study is to determine safety limits and decide on the optimal dosage of Checkvacc against metastatic TNBC.

Imugene noted that the current trial design involves a dose escalation. Thereafter, an expanded group of 12 patients will receive the final dose.

Commenting on the update, Imugene managing director and CEO Leslie Chong said:

We are pleased with the continued progress being made in this trial as we dose the first patient in cohort 3.

From cohorts 1 & 2 we’ve continued to see early positive results in oncolytic virus infection and replication in the TNBC tumours and importantly there remains no observed toxicity.

Checkvacc has the potential to improve clinical response and survival in this indication where there are currently no meaningful treatments, and we are eager to deliver on that.

Imugene share price snapshot

Despite climbing 30% in the past month, the Imugene share price has fallen 25% in 2022.

The company’s shares hit a 52-week low of 13 cents on 14 June, before gradually moving higher.

Imugene presides a market capitalisation of approximately $1.58 billion.

The post Imugene share price lifts 11% on clinical trial update appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Why Appen, Imugene, OZ Minerals, and Paradigm shares are charging higher
• Here are the top 10 ASX 200 shares today
• Up 22% in a month, can the Imugene share price extend its rally?
• Here are the top 10 ASX 200 shares today

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 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 iSelect Ltd (ASX: ISU) share price has skyrocketed on news that the company has received a takeover offer.

In early morning trading, the iSelect share price is up 75% to 28 cents.

The iSelect board is unanimously recommending that shareholders vote in favour of the deal.

The offer has come from Innovation Holdings Australia (IHA), which owns https://ift.tt/bGpyok5.

IHA is also an investment of the international private investor group, Reef Investment Consortium.

iSelect announced it has entered into a Scheme Implementation Agreement before the market open today.

IHA already holds 26% of iSelect shares. It proposes to acquire all other shares by way of a scheme of arrangement.

What’s the offer to iSelect shareholders?

IHA is offering to buy iSelect at a price of 30 cents per iSelect share held. The iSelect share price closed yesterday’s session at 16 cents.

In its statement, iSelect pointed out that the offer represents an 87.5% premium to that closing price.

The deal is subject to an independent analysis to ensure the deal is in the best interests of shareholders. It will also need approval from the Australian Competition and Consumer Commission.

iSelect anticipates scheduling a shareholder vote in November.

Major shareholders back the buyout

Major iSelect shareholders Thorney Investment Group and Microequities Asset Management Group Ltd (ASX: MAM) are in favour of the deal.

Thorney is a private investment group run by stock picker Alex Waislitz. It owns 14.34% of the iSelect shares on issue and Microequities Asset Management owns 9.5%.

iSelect shareholders do not need to take any action yet. They will receive a scheme booklet in October.

What did management say?

The Chair of iSelect, Brodie Arnhold, said: “The Scheme provides an opportunity for shareholders to realise a significant premium to market value for their shares and provides the certainty of an all-cash offer.”

If all conditions are satisfied, iSelect expects the scheme to be completed between December this year and March 2023.

iSelect will release its FY22 full-year results during earning season on Tuesday 23 August.

The post iSelect share price explodes 75% on takeover news appeared first on The Motley Fool Australia.

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More reading

• ASX 200 better buy: Wesfarmers or Woolworths?
• Guess which ASX 200 share just upped its dividend by 25%
• CBA share price slides today despite an 11% FY22 earnings leap
• Computershare share price plunges 6% following FY22 results
• Here’s everything you need to know about the latest CBA dividend

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.

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It’s been a wild ride on the ASX this year and no corner of the market has been spared. 

As interest rates rise and inflation soars, consumer-facing businesses, in particular, have been feeling the heat.

While these businesses come in all different shapes and sizes, there are two at the pointy end of the S&P/ASX 200 Index (ASX: XJO) that often draw comparisons: Woolworths Group Ltd (ASX: WOW) and Wesfarmers Ltd (ASX: WES).

Let’s see how these two ASX blue-chip shares stack up.

Comparing apples and oranges

Before we dig into which of these ASX stalwarts might be a better buy, let’s first set the scene.

Both Wesfarmers and Woolies are conglomerates comprising many different brands. Wesfarmers owns a large and diverse stable of household names, including Bunnings, Kmart, Target, and Officeworks. More recently, it acquired formerly ASX-listed Australian Pharmaceuticals Industries which owns the Priceline network of pharmacy stores across the country.

Woolies, on the other hand, is more concentrated after spinning off its retail drinks and hotels arm last year. Nowadays, an investment in Woolies predominantly has exposure to the eponymous supermarket chain. The group’s Australian and New Zealand food segments generated 86% of revenue and nearly all of its earnings in the first half of FY22. 

So, despite sharing similar roots, various divestments and acquisitions on both parts have seen the two conglomerates’ operations drift apart over the years.

The case to put Woolies shares in your shopping trolley

Inflation has stolen the spotlight in recent months as the cost of living heads north and consumers feel the pinch.

Along with eye-watering prices at the petrol bowser, the other category of most concern to consumers is food inflation. 

Just one look at the price of lettuce and it’s clear to see food inflation is out in full force. A combination of factors has been driving this, including higher input costs, supply chain issues, floods, and labour shortages.

Rising inflation is leading to higher prices on supermarket shelves as the likes of Woolies and Coles Group Ltd (ASX: COL) pass on cost increases. Meanwhile, demand typically holds steady as consumers shift their spending away from discretionary items, such as clothes and electronics, toward essentials.

What’s more, an inflationary environment usually sees budget-conscious consumers turn their backs on dining out in favour of buying food to cook at home. With value being front of mind for shoppers, sales for Woolies’ higher-margin homebrand products will likely receive a boost. That said, this could be offset by lower sales for the supermarket’s more premium Macro brand, which also attracts juicier margins.

On the whole, rising inflation could be a net benefit for supermarkets like Woolies, which are expected to post robust sales growth this ASX reporting season. 

Looking out into the longer term, Woolies shares offer a defensive earnings profile due to the non-discretionary nature of groceries. Management has been delivering on its strategy to reinvest in the high-returning core business, demonstrating sound capital allocation to balance shareholder returns and growth.

The case to add Wesfarmers shares to your toolkit

While its supermarket chain makes up the lion’s share of Woolies’ sales and profits, Wesfarmers’ operations are more diverse. Here, the driver is Bunnings, with the beloved home improvement store raking in 52% of group revenue and 70% of group earnings in the first half of FY22. 

But Wesfarmers also has meaningful contributions from Kmart; Officeworks; Catch; its chemicals, energy, and fertilisers business; its industrial and safety business; and, more recently, a foray into health via its acquisition of API.

This diversification adds to Wesfarmers’ resilience while also providing the group with multiple growth levers. Beyond the household names, it has exposure to lithium through the Mt Holland project and also has its sights set on a further multi-billion-dollar push into the health, wellness, and beauty markets.

In my eyes, the beauty of Wesfarmers lies in its portfolio of market-leading brands. The likes of Bunnings, Kmart and Officeworks are top of mind (and hearts) for consumers, making a name for offering the lowest prices and widest ranges. With this strong brand power comes hefty sales, which allows these businesses to continue to reap the benefits of scale. 

These high-quality brands are led by none other than Bunnings, a powerhouse in the Wesfarmers portfolio. In the first half of FY22, Bunnings boasted returns on capital of 79%. The business isn’t resting on its laurels either, with plans to further expand in household categories and take a greater share of the commercial market.

So which is the better ASX 200 buy?

Both Woolies and Wesfarmers have a history of market-beating returns and could be worthy of a spot in a diversified portfolio.

So far this year, Woolies shares have come out on top as Wesfarmers’ retail arms have been exposed to COVID lockdowns and the health of the Aussie consumer.

While the defensive nature of Woolies shares is attractive, over the long term I’d be leaning towards Wesfarmers for its optionality and exposure to the jewel in its crown, Bunnings.  

The post ASX 200 better buy: Wesfarmers or Woolworths? appeared first on The Motley Fool Australia.

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More reading

• I think these ASX 200 dividend shares look like good income picks after reporting
• 2 excellent ASX dividend shares experts rate as buys
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Tuesday

Motley Fool contributor Catherine Goh 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 COLESGROUP DEF SET and Wesfarmers 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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Owners of shares in S&P/ASX 200 Index (ASX: XJO) online real estate advertising company REA Group Limited (ASX: REA), rejoice!

Your investment just announced its largest dividend ever, boosting its full year payout by 25%.

Sadly, the stock is in the red today after surging 7% on the back of its full year results, released yesterday.

The REA share price is $127.44 right now, 3.69% lower than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is also down, falling 0.12% at the time of writing.

But a day in the red likely won’t be enough to wipe the smile off shareholders’ faces. Let’s take a look at the record dividend announced by the ASX 200 share this week.

Which ASX 200 share just announced a record dividend?

Financial year 2022 was good to ASX 200 share REA, and now the company is passing a chunk of its takings to shareholders.

The company’s revenue lifted 26% last financial year compared to that of financial year 2021.

Its earnings before interest, tax, depreciation, and amortisation (EBITDA) also rose 19% while its net profit jumped 25%.

And much of that profit is now up for grabs.

REA announced a record 89 cent per share fully franked final dividend, bringing its full year dividends to $1.64 – up 25% year-on-year.

That means the stock is currently trading with a dividend yield of 1.28%.

And would be investors have a few weeks to decide whether they’ll pursue the payout. The ASX 200 share doesn’t trade ex-dividend until 25 August.

The dividend is then expected to begin landing in shareholders’ accounts in mid-September.

REA share price snapshot

Despite posting strong earnings, the REA share price has been underperforming in 2022.

The company’s shares have slumped 26% since the start of the year while the ASX 200 has dumped around 8%.

It’s also been underperforming over the longer term, falling 18% in the last 12 months. Meanwhile, the index has slipped 7%.

The post Guess which ASX 200 share just upped its dividend by 25% appeared first on The Motley Fool Australia.

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More reading

• 2 ASX 200 blue chip shares brokers rate as buys
• 2 ‘high quality’ ASX shares now going for a discount: Elvest
• Here are the top 10 ASX 200 shares today
• Why Coronado Global, Lake, Megaport, and REA shares are storming higher
• REA share price marches higher on record final FY22 dividend

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 recommended REA Group 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 Commonwealth Bank of Australia (ASX: CBA) share price is sliding in morning trade.

CBA shares closed yesterday trading for $101.28 and are currently trading for $100.41, down 0.9%.

This comes after the S&P/ASX 200 Index (ASX: XJO) listed bank, Australia’s largest, released its full-year results for the 12 months ending 30 June this morning (FY22).

Among the highlights reported by The Motley Fool earlier today…

What did CommBank report?

The CBA share price is in the red in early trade despite reporting some strong results.

Those included a 3% year-on-year increase in revenue, which reached $25.14 billion in FY22.

Cash earnings of $9.60 billion were up 11% from FY21.

The big bank managed to increase its revenue and cash earnings while trimming its operating expenses, which were down 1.5% year on year to $11.19 billion.

On the negative side of the ledger, net interest margins (NIM) dropped 0.18% from FY21 to 1.9%. The bank pointed to lower margins on its home loans along with a spike in lower-yielding liquid assets for the decline.

With the Reserve Bank of Australia on a rate-hiking path, however, CBA forecast its NIM would improve.

CommBank also declared a final fully-franked dividend of $2.10 per share. For the full year, it’s paying a dividend of $3.85 per share. That’s a trailing yield of 3.8% at the current CBA share price.

Yet none of the past year’s results, nor the healthy dividend look to be enough to boost the bank’s shares today.

Why is the CBA share price sliding today?

The CBA share price is the only one of the ASX 200 banks in the red today.

Macquarie Capital analyst Victor German pointed to the continuing price-to-earnings (P/E) ratio premium that CommBank demands over its peers as likely to throw up headwinds for the bank.

At the current share price, CBA trades at a P/E ratio of 19 times.

“While we recognise the appeal of the franchise in the rising rate environment, the current multiple is difficult to justify, in our view,” he said (courtesy of The Australian). “With pre-provision profit broadly flat in 2H22, we see CBA’s premium as too demanding.”

German said the decline in NIM was “arguably the key area of disappointment”.

German continued:

While most of the margin decline came through in the third quarter, it appears that June quarter margins were broadly flat versus peers being slightly up. Elsewhere, marginally better expense management resulted in a small pre-provision beat, however, we note that CBA wrote off about $445 million of capitalised expenses, which continues to support its expense performance.

CBA share price snapshot

While it hasn’t exactly shot out the lights, the CBA share price has outperformed the benchmark this year, down 2% in 2022 compared to a year-to-date loss of 8% posted by the ASX 200.

The post CBA share price slides today despite an 11% FY22 earnings leap appeared first on The Motley Fool Australia.

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More reading

• Here’s everything you need to know about the latest CBA dividend
• How to play ASX bank shares for dividends this reporting season: expert
• CBA share price on watch after FY22 cash earnings jump to $9.6bn
• 5 things to watch on the ASX 200 on Wednesday
• Why Block, CBA, Mesoblast, and NAB shares are dropping 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.

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