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Owners of Pilbara Minerals Ltd (ASX: PLS) shares saw considerable profit generation in 2022. But things have gone downhill since then as the lithium price slumped — it’s no wonder the Pilbara Minerals share price has dropped around 30% since November 2022, as we can see on the chart below.

The tricky thing about estimating profit generation for ASX mining shares is that it’s quite dependent on what happens with the commodity price. ASX lithium shares have taken a battering recently because investors are now expecting lower profitability and smaller cash flow.

But how much lower could profit be in future results compared to FY23? Could reality be better than what the market is fearing? Let’s take a look at one set of forecasts.

FY24 estimates

In its FY24 half-year result, the ASX lithium share reported that its statutory net profit after tax (NPAT) plunged 82% to $220 million after its realised price for lithium production sank 67% to US$1,645 per tonne.

Broker UBS has forecast that Pilbara Minerals might make $264 million of net profit in FY24 on revenue of $1.1 billion. The broker isn’t expecting the ASX lithium share to pay a dividend in FY24.

FY25 projection

Owners of Pilbara Minerals shares may be disappointed to hear that the FY25 profit projection is even worse than FY24.

UBS has forecast that net profit could halve again to $131 million amid the low lithium prices and the large investment program that Pilbara Minerals is working on to increase its exposure to the lithium supply chain. The FY25 revenue is projected to be $962 million, according to the broker.

FY26 forecast

The 2026 financial year might be the year that the ASX lithium share sees a sizeable increase in profit.

According to UBS, the business could generate A$1.8 billion of revenue and make $582 million of net profit, which would translate into earnings per share (EPS) of 19 cents. If it achieves this forecast, the Pilbara Minerals share price will be valued at around 20x FY26’s estimated earnings.

The business is also projected to start paying a dividend again. In FY26, the annual pay might be 7 cents per share, which would be more than 70% smaller than the FY23 payout.

Interestingly, UBS thinks that the P1000 project, where the miner wants to reach 1mt of production, will become P1100 based on mining rates, grades, recoveries and a targeted grade for the production of between 5.2% to 5.3%.

Pilbara Minerals said it was not looking to slow any progress in response to low lithium prices.

The post Here is the earnings forecast to 2026 for Pilbara Minerals shares appeared first on The Motley Fool Australia.

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More reading

• The best ASX shares to buy with $1,000 right now
• The ASX 200 lithium stock this fundie is backing for the global lithium comeback
• These are the 10 most shorted ASX shares
• When will Pilbara Minerals resume paying dividends?
• Own ASX 200 mining shares? Here’s the 5-year forecast for commodity prices

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

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Wildcat Resources Ltd (ASX: WC8) shares were on form again on Monday.

The ASX 300 lithium explorer’s shares ended the day with a gain of 3% to 63 cents.

This was despite there being no news out of the company.

Has this ASX 300 lithium share been a good place to invest $1,000?

It sure has.

One year ago, you could have picked up the company’s shares for an average of 3 cents per unit.

This means that a very brave $1,000 investment would have led to you picking up 33,333 shares in the micro cap at the time.

If you held tightly to them, today your 33,333 shares would have a market value of approximately $21,000.

That’s 20 times your original investment!

Why has it been rocketing?

Investors have been buying this ASX 300 share due to the excitement around its Tabba Tabba Lithium Project near Port Hedland in Western Australia.

Interestingly, the Tabba Tabba project was one of four significant lithium-cesium-tantalum (LCT) pegmatite projects in Western Australia that were previously owned by the now defunct Sons of Gwalia. The others were Greenbushes, Pilgangoora, and Wodgina, which are all now tier-1 hard-rock lithium mines.

It is also worth noting that Tabba Tabba is near to these lithium mines. For example, it is 47km from the 414Mt Pilgangoora Project owned by Pilbara Minerals Ltd (ASX: PLS) and 87km from the 259Mt Wodgina Project owned by Mineral Resources Ltd (ASX: MIN).

In addition, it is only 80km by road to Port Hedland’s port, which would make the potential exporting of lithium in the future a breeze.

Tabba Tabba excitement

Clearly there is a lot of potential from the Tabba Tabba Lithium Project. But does the exploration back this up?

So far, the company has delivered impressive results from drilling.

For example, the company highlights that the exciting Leia Pegmatite is one of six significant prospects (Leia, Boba, Chewy, Tabba Tabba Ta, Han and The Hutt) within the 3.2km long outcropping LCT pegmatite field.

At the end of last year, the Leia pegmatite was over 2.2km long, with mineralisation from surface and continuing at depth with the thickest intercept to date 180m @ 1.1% Li2O.

In light of these results, the company is undertaking a huge drilling program during the first half of 2024.

In January, Wildcat’s managing director, AJ Saverimutto, commented:

XRD has confirmed that spodumene is the dominant lithium mineral at our Leia discovery. The geology team has been able to utilise the information to prioritise its exploration concepts and we are eager to commence drilling additional targets whilst simultaneously progressing Leia, with 100,000m of drilling planned at Tabba Tabba over the next six months to rapidly advance our understanding of the project’s geology and scale. Leia is still open along strike and at depth and is the first of six pegmatites with exploration potential.

Time will ultimately tell whether it is another major lithium asset, but the early signs are positive.

The post $1,000 in this ASX 300 share a year ago would be worth $20,000+ now appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Tuesday
• The BHP share price is down 12% in 2024. What’s next for the iron ore price?
• With its 7% yield, is this recovering ASX 200 stock a passive income earner’s dream?
• Why I’d confidently buy these 3 ASX blue-chips while others grow fearful
• The best ASX shares to buy with $1,000 right now

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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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On Monday, the S&P/ASX 200 Index (ASX: XJO) started the week with a small gain. The benchmark index rose 0.2% to 7,789.1 points.

Will the market be able to build on this on Tuesday? Here are five things to watch:

ASX 200 expected to rise again

The Australian share market is expected to rise again on Tuesday despite a flat start to the week on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 33 points or 0.4% higher. In the United States, the Dow Jones and the S&P 500 were down slightly and the NASDAQ edged ever so slightly higher.

Life360 shares can keep rising

Life360 Inc (ASX: 360) shares started the week with a bang on Monday. They ended yesterday’s session 17% higher thanks to the release of a quarterly update which revealed a record three months. Life360 reported 4.9 million net adds to monthly active users during the quarter, bringing its total beyond 66 million. Bell Potter was impressed with the update. In response, it has reiterated its buy rating and lifted its price target to $16.25. It said: “Life360 provided a positive and unexpected market update with two key metrics in 1Q2024 materially exceeding both our and market expectations.”

Oil prices fall

ASX 200 energy shares Santos Ltd (ASX: STO) and Karoon Energy Ltd (ASX: KAR) could have a subdued session on Tuesday after oil prices fell overnight. According to Bloomberg, the WTI crude oil price is down 0.45% to US$86.51 a barrel and the Brent crude oil price is down 0.7% to US$90.50 a barrel. Traders were selling oil after Middle East tensions eased.

Flight Centre shares downgraded

The Flight Centre Travel Group Ltd (ASX: FLT) share price could be overvalued according to analysts at Goldman Sachs. This morning, the broker has downgraded the travel agent’s shares to a sell rating with a trimmed price target of $18.30. This implies potential downside of approximately 15% for investors from current levels. Goldman Sachs has warned that “moderating corporate travel and intensifying SME competition could lead to margin disappointment.”

Gold price rises

ASX 200 gold shares including Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) could have a good session after the gold price pushed higher again on Monday. According to CNBC, the spot gold price is up 0.5% to US$2,357.4 an ounce. Demand from Asian central banks helped take the gold price to a new record high during Monday night’s session.

The post 5 things to watch on the ASX 200 on Tuesday appeared first on The Motley Fool Australia.

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More reading

• The best ASX shares to buy with $1,000 right now
• Here are the top 10 ASX 200 shares today
• Why Life360, Qantas, Qoria, and Silver Lake shares are racing higher today
• Why one broker thinks the gold price could glisten 9% brighter
• Why is the Life360 share price rocketing 22% to a record high?

Motley Fool contributor James Mickleboro has positions in Life360. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Life360. The Motley Fool Australia has recommended Flight Centre Travel Group. 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 BHP Group Ltd (ASX: BHP) share price soared from late October through to the end of 2023.

Between 23 October and 28 December, shares in the S&P/ASX 200 Index (ASX: XJO) iron ore miner rocketed 17% to $50.72 apiece.

This came amid a surge in the iron ore price, BHP’s largest revenue earner.

Iron ore leapt from US$114 per tonne in late October to trade for US$140 per tonne at the beginning of 2024.

Since then, it’s been mostly downhill for the steel-making metal, with iron ore futures dropping to US$98 per tonne on Thursday before rebounding to US$102.80 per tonne earlier today.

As you’d expect, the big drop in 2024 has also put pressure on the BHP share price. Shares in the ASX 200 miner are down 12.4% in 2024.

While BHP also derives significant revenue from copper, alongside other important revenue streams from coal and uranium, the miner’s share price performance – and future dividend payouts – are clearly closely linked with the iron ore price.

With that said, what can ASX 200 investors expect from the iron ore price in the year ahead?

How will iron ore impact the BHP share price next?

For the six months to 31 December, BHP produced 129 million tonnes of iron ore, selling it for an average realised price of US$103.70 per wet metric tonne. That saw the miner rake in earnings before interest, taxes, depreciation, and amortisation (EBITDA) of US$9.7 billion from its iron ore division, up 27% year on year.

With that in mind, the BHP share price could continue to struggle to match its late 2023 performance if iron ore prices remain near current levels.

Which is precisely what Caroline Bain, chief commodities economist at Capital Economics, is forecasting.

“Given subdued demand, regional steel prices are likely to come under downward pressure this year. We expect prices in China to fall as supply continues to outstrip domestic and foreign demand,” Bain said (quoted by The Australian Financial Review).

Capital Economics forecasts the industrial metal will trade for US$100 per tonne at the end of the current quarter, where Bain also expects it to end the year.

Correction territory ahead

2025 could be an even tougher year for the BHP share price to deliver outperformance, with Bain forecasting iron ore will fall to US$85 per tonne by the end of next year.

That’s largely based on her expectations of ongoing weak demand for steel from China and much of the rest of the world.

She said of the world’s largest economy: “In the US, steelmakers plan to expand output, but we think demand will be weaker than they expect.”

As for Europe, Bain said: “Lower interest rates will only offer scant support to prices in Europe as economic growth remains weak.”

She believes that China, the world’s largest iron ore importer, is unlikely to offer any relief as the nation’s steel-hungry property sector continues to struggle.

According to Bain (quoted by the AFR):

The correction in the construction sector and steel demand is inevitable and is only delayed through policy support.

Property activity is likely to halve by the end of the decade, with average annual falls of 10%, causing similar falls in construction inputs like steel. Overall, we expect steel consumption to be flat in 2024 and fall by 0.5% in 2025.

At the current BHP share price, the ASX 200 miner trades on a fully franked 5.3% dividend yield.

The post The BHP share price is down 12% in 2024. What’s next for the iron ore price? appeared first on The Motley Fool Australia.

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More reading

• Why I’d confidently buy these 3 ASX blue-chips while others grow fearful
• The pros and cons of buying BHP shares right now
• Top brokers name 3 ASX shares to buy next week
• Own ASX 200 mining shares? Here’s the 5-year forecast for commodity prices
• 5 things to watch on the ASX 200 on Friday

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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S&P/ASX 200 Index (ASX: XJO) stock Charter Hall Long WALE REIT (ASX: CLW) looks to me like a compelling ASX dividend share paying excellent passive income.

High interest rates have hurt the share prices of the real estate investment trust (REIT) sector. Most REITs carry a lot of debt on their balance sheets, so higher rates translate into heightened interest costs.

Here’s why this particular property business could be worth owning to build investment cash flow.

Diversified

Most REITs focus on one type of commercial property, such as retail, office or industrial.

A big positive about this ASX 200 stock’s portfolio is how diversified it is. Charter Hall Long WALE REIT owns landmark city offices, well-connected industrial and logistics facilities, service stations, Bunnings Warehouse properties and so on.

What links them together is the long-term rental contracts, resulting in a weighted average lease expiry (WALE) of more than 10 years. This gives a lot of visibility (and stability) of the rental income.

In the FY24 first-half result, it achieved a 4.3% weighted average rent review, which is a pleasing rate of rental growth in the current economic circumstances.

Big dividend yield

The ASX 200 stock typically pays out 100% of its rental profit each year as a distribution, creating a large distribution yield.

With the contracted rental growth (fixed or inflation-linked annual increases, depending on the property), it doesn’t need to retain earnings to deliver growth for investors.

For FY24, it has guided operating earnings per security (EPS) and a distribution per security of 26 cents. At the current Charter Hall Long WALE REIT share price, that represents a distribution yield of 7%.

Large discount?

It’s challenging to say what the ASX 200 stock’s property portfolio is actually worth today amid the high interest rates. The only way to truly know would be to try to sell all of its properties, which is not likely to happen.

Interestingly, the Charter Hall Long WALE REIT share price has risen 17% in the past six months, as the chart below shows, despite the high interest rates.

At 31 December 2023, the business had 94% of its portfolio independently valued, resulting in a $306 million, or 4.5%, decrease compared to the prior balance sheet values. In other words, it has accounted for a slight reduction in its property values.

With that reduction, the net tangible assets (NTA) came to $5.14 at December 2023. The Charter Hall Long WALE REIT share price is at a discount of close to 30% to the NTA figure.

If interest rates start coming down sooner rather than later, this ASX 200 stock may be able to provide a mixture of a good passive income yield and capital growth.

The post With its 7% yield, is this recovering ASX 200 stock a passive income earner’s dream? appeared first on The Motley Fool Australia.

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More reading

• 2 ASX shares I’d buy to quickly add diversification
• Shares vs. property: Which Australian states and ASX stocks are delivering the best passive income?

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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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A little fear in the markets can be a good thing when you’re buying ASX blue-chip shares.

As legendary investor Warren Buffett famously said, “Be greedy when others are fearful.”

Indeed, while investors aren’t close to the point of bunkering down in fright, the CBOE Volatility Index has leapt to highs not seen since early November 2023.

You may have heard this referred to as the VIX. Commonly used to gauge the level of fear in the markets, the VIX measures the expected volatility of the S&P 500 Index (INDEXSP: .INX). It’s currently sitting at 16.03 points, the highest level of market fear since 1 November.

But that wouldn’t put me off from confidently buying these three ASX blue-chip shares.

All three of these companies have existed for many years, offering a long historical performance track record to study. And their large size provides various benefits, including the ability to often secure financing at lower rates than small-cap stocks.

With that said …

Three ASX blue-chips to buy when others are fearful

Starting with the biggest company on the ASX, we have iron ore miner BHP Group Ltd (ASX: BHP). The mining giant has a portfolio of high-quality mines in production and under development in Australia, North America, and South America.

Although this ASX blue-chip derives the bulk of its revenue from iron ore, its earnings are diversified among other resources, including copper, coal, nickel, and uranium.

The BHP share price is down some 13% in 2024 amid a sizeable slump in iron ore prices, while a global oversupply of nickel has seen the miner temporarily shutter its nickel operations.

While these woes won’t disappear overnight, I believe the year-to-date retrace in the BHP share price offers an excellent long-term entry point.

Atop potential share price gains in the year ahead, BHP shares trade on a fully franked trailing dividend yield of 5.3%.

The next ASX blue-chip share I’d buy with confidence despite rising market fear is bank stock Commonwealth Bank of Australia (ASX: CBA).

Australia’s biggest bank, and the second biggest stock listed on the ASX, provides a diversified range of integrated financial services.

Some analysts believe CBA is overvalued compared to its peers. But the big bank continues to perform strongly, reporting a 0.2% uptick in its half year operating income to $13.65 billion.

The CBA share price is up around 4% in 2024 and up 18% over six months. Despite that big share price surge, the ASX 200 bank stock still trades at a solid, fully franked dividend yield of 3.9%.

Which brings us to the third ASX blue-chip share I’d buy as others grow fearful: Biotech juggernaut CSL Ltd (ASX: CSL). The company’s operating arms include CSL Behring, CSL Vifor, and its Seqirus businesses.

The CSL share price is down 2% in 2022, with shares up 11% over the past six months.

There’s much to like about CSL, including its growth trajectory.

The third biggest stock on the ASX reported an 11% increase in half-year revenue (in constant currency) to US$8.05 billion.

And net profit after tax (in constant currency) leapt 20% year on year for the six-month period to US$1.94 billion. This saw the interim dividend boosted by 12% to AU $1.81 per share.

While this ASX blue-chip is not one to buy just for the dividends, CSL shares trade on a partly franked yield of 1.3%.

The post Why I’d confidently buy these 3 ASX blue-chips while others grow fearful appeared first on The Motley Fool Australia.

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More reading

• Leading brokers name 3 ASX shares to buy today
• The pros and cons of buying BHP shares right now
• Top brokers name 3 ASX shares to buy next week
• 5 ASX 200 shares for trying to build wealth after 50
• Own ASX 200 mining shares? Here’s the 5-year forecast for commodity prices

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 CSL. The Motley Fool Australia has recommended CSL. 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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If you have $1,000 burning a hole in your pocket, then it could be worth putting it to work in the share market.

But which ASX shares could be a good destination for these funds? Let’s take a look at three shares to buy according to analysts:

Nextdc Ltd (ASX: NXT)

The first ASX share to buy according to analysts is data centre operator NextDC.

Goldman Sachs is a big fan of the company and believes it is well-placed to deliver strong long-term earnings growth thanks to the increasing demand for data centre capacity.

It has a buy rating and $18.80 price target on the company’s shares. The broker said:

We believe the company has a compelling growth profile and a proven and profitable business model, noting it trades on a growth-adjusted discount vs. peers, which we view as unjustified.

Pilbara Minerals Ltd (ASX: PLS)

Analysts at Morgans think that Pilbara Minerals would be a great option for investors looking for exposure to the lithium industry.

The broker currently has an add rating and $4.30 price target on the lithium miner’s shares. It said:

We view PLS as a fundamentally strong and globally significant hard-rock lithium miner. The company has successfully executed on ramping up the expansion of Pilgangoora, while progressing plans to expand output (P680 and P1000). Supported by a strong balance sheet, with net cash at ~A$2.1bn at the end of December, PLS’ expansion plans remain uniquely undeterred by the significant weakness in lithium prices. For PLS, the best form of defence against lithium prices is to stay on the attack, with its medium-term plans to continue expanding its production aimed primarily at building greater economies of scale and a more defensive margin.

Regis Resources Ltd (ASX: RRL)

If you would prefer to invest in the booming gold sector, then Regis Resources could be the ASX share to buy with your $1,000. Bell Potter is feeling very positive about the gold miner due to its all-Australian asset base and takeover appeal.

It has a buy rating and $2.60 price target on the company’s shares. The broker explains:

As one of the largest ASX listed gold producers, we are attracted to its allAustralian asset portfolio and organic growth options which are unique at this scale. Furthermore, we see key opportunities in the fundamental, medium-term outlook and, in our view, these may also make RRL an appealing corporate target in the current conducive M&A environment.

The post The best ASX shares to buy with $1,000 right now appeared first on The Motley Fool Australia.

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More reading

• The ASX 200 lithium stock this fundie is backing for the global lithium comeback
• These are the 10 most shorted ASX shares
• 5 ASX 200 shares for trying to build wealth after 50
• Here are the top 10 ASX 200 shares today
• When will Pilbara Minerals resume paying dividends?

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

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Coles Group Ltd (ASX: COL) stock represents one of the largest companies on the ASX, with a market capitalisation of around $22 billion. But there’s more to the supermarket giant’s investment case than that it simply sells food and drink staples.

Don’t get me wrong, being a defensive ASX share is one of the main reasons to like the business. The fact that the Coles share price has risen 33% over the past five years (see below) – through all the difficult times – is a sign of its ability to perform over time.

In my view, there are some underrated reasons why Coles stock can make a good investment right now, including the following three.

Excellent dividend record

Many variables outside the company help decide what happens with the Coles share price. However, the board of directors has a lot of decision-making power regarding shareholder payouts.

And many retirees may be counting on Coles to deliver a resilient form of passive income.

The supermarket business has grown its annual dividend every year since it was separated from Wesfarmers Ltd (ASX: WES) in late 2018.

There’s a chance it may maintain its annual dividend in FY24, seeing as the HY24 dividend was maintained, but having a record of no cuts is admirable for people wanting income stability.

If it does pay 66 cents per share for FY24, that’s a grossed-up dividend yield of around 5.75%.

The estimates on Commsec suggest it could pay a grossed-up dividend yield of 6.1% in FY25 and 7% in FY26.

Outperforming Woolworths Group Ltd (ASX: WOW)

Coles’ main rival is Woolworths Group Ltd (ASX: WOW). Knowing how each of them is performing and who is taking market share can be very useful.

Over the last several years, Woolworths has won most performance metrics, but the latest numbers show that Coles may be winning the battle to offer customers more choices, more sustainability, and perhaps better value. For whatever reason, Coles’ recent trading update was stronger than Woolworths’.

When Coles reported its FY24 first-half result, it revealed that in the first eight weeks of the third quarter, its supermarket sales revenue grew by 4.9%, underpinned by “volume growth from strong execution” of its “value campaigns and improvements in availability compared to this time last year.”

The Woolworths update said its Woolworths food retail sales increased 1.5% for the first seven weeks of the second half of FY24, and it was impacted by “a further moderation in inflation and lower item growth”.

The significant outperformance could help Coles stock in the coming periods if outperformance can continue compared to Woolworths.

Strong e-commerce performance

The world is becoming increasingly digital and Coles is doing a great job of tapping into that trend.

In the first half of FY24, Coles’ e-commerce sales increased by 29.2% to $1.8 billion (with a 33.5% rise in the second quarter), resulting in e-commerce penetration of 9.1% of the total sales. Woolworths’ e-commerce sales increased 21.3%.

Coles attributed the strong online sales growth to a strong performance in seasonal events, particularly Christmas and Black Friday, improvements in availability, enhancements to the customer experience and continued network expansion.

A range of artificial intelligence and technology automotive initiatives were also successfully implemented in customer call centres, while pick optimisation initiatives improved efficiency, according to Coles.

Coles stock valuation snapshot

According to the estimates on Commsec, Coles stock is valued at less than 21x FY24’s estimated earnings and at around 17x FY26’s estimated earnings.

The post 3 things smart investors know about Coles stock appeared first on The Motley Fool Australia.

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• 2 ASX dividend shares to beat inflation
• Bell Potter names the best ASX 200 shares to buy in April
• Buy Coles and these ASX 200 dividend shares now

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 Wesfarmers. The Motley Fool Australia has positions in and has recommended Coles Group and Wesfarmers. 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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Inflation is an insidious, wealth-devouring monster that can erode fortunes if left unchecked. Some will turn to gold to ward off this threat, but I’d opt for top-quality ASX shares.

Gold has long been seen as a store of value. The precious metal’s scarcity and appealing physical traits make it a go-to among many for wealth preservation. Its gradually growing supply makes it a popular asset for those hedging against inflation.

Yet, if beating inflation is the goal, I’d argue investing in shares is a much better choice.

Going for ‘better than’ gold

The price of gold — in Aussie dollars — is up 18.9% over the past year, as depicted below. Yes, that’s 12.4% more than what the S&P/ASX 200 Index (ASX: XJO) has increased. However, a single year of performance is hardly definitive.

To maintain your money’s purchasing power between 1 July 1993 and 30 June 2023, it would have needed to grow in value by 120%. Put simply, $10,000 in 1993 had to become $21,979 — otherwise, your wealth went backwards.

The gold bugs out there can breathe a sigh of relief AS gold has indeed outpaced inflation over the last 30 years. A $10,000 hoard of gold in 1993 is now worth about $29,150 based on today’s price. But that’s only a ‘real return’ of about 1% per annum above inflation.

Comparatively, Australian shares have generated a real return of 6.5% per annum above inflation. In dollar terms, that’s the difference between having $29,150 (gold) or $138,778 (Australian shares) left at the end of investing for 30 years.

My top ASX shares to fight inflation

Simply buying the Aussie index with an exchange-traded fund (ETF) is where I’d start to give inflation the boot — either the BetaShares Australia 200 ETF (ASX: A200) or the Vanguard Australian Shares Index ETF (ASX: VAS) are my preferences for diversification.

From there, I’d sprinkle in quality businesses that I believe will perform even better than the index.

Right now, several Australian companies come to mind. The first two are ASX retail shares, Accent Group Ltd (ASX: AX1) and Super Retail Group Ltd (ASX: SUL).

Accent is known for its extensive footwear store presence, including Athletes Foot, Platypus, and Hype DC. Super Retail Group’s familiar faces are Supercheap Auto, BCF, Rebel, and Macpac. Both companies have a long history of successfully executing their growth ambitions, and neither looks at all expensive at their price-to-earnings (P/E) ratios of 15 and 13.

My other top ASX shares to give inflation the flick are NIB Holdings Limited (ASX: NHF) and Deterra Royalties Ltd (ASX: DRR). In my opinion, both companies are insulated from inflation to a certain extent.

NIB, a private health insurer, can increase its premiums on what is a fairly sticky product. Meanwhile, Deterra, a collector of iron ore royalties, has minimal expenses that could rise from inflation.

The post Forget gold! I’d buy these top ASX shares to beat inflation appeared first on The Motley Fool Australia.

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More reading

• Is the Vanguard Australian Shares Index ETF (VAS) a good long-term investment?
• These high-yield ASX dividend stocks can rise 15% to 20%
• Is the Vanguard Australian Shares ETF (VAS) just a big ASX bet on banks and miners?
• Want an income boost? Buy ANZ Bank and these ASX dividend stocks
• $10,000 invested in these ASX 300 dividend shares would generate this much passive income

Motley Fool contributor Mitchell Lawler 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 NIB Holdings and Super Retail Group. The Motley Fool Australia has recommended Accent Group. 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 post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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More reading

• Why Life360, Qantas, Qoria, and Silver Lake shares are racing higher today
• Why one broker thinks the gold price could glisten 9% brighter
• Qantas share price takes off on ‘biggest ever expansions’ of core loyalty program
• Why is the Life360 share price rocketing 22% to a record high?
• These top ASX 200 growth shares can rise 10% to 50%

Motley Fool contributor Sebastian Bowen has positions in Newmont. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360, Megaport, and Nanosonics. The Motley Fool Australia has positions in and has recommended Nanosonics. The Motley Fool Australia has recommended Megaport. 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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