Tag: Motley Fool

I’m typing this at 9.20am on Friday, before the ASX opens.

It’ll probably be down. Perhaps by a couple of percentage points, if the futures are correct (they’re less accurate than you might think, by the way).

The falls will be, in large part, a domino effect after the US S&P 500 fell 3.25% overnight.

But I don’t want to talk about that, today.

In part because I’ve done so this week a couple of times already, including in a video I hope you’ll have a look at, if you haven’t, already.

[youtube https://www.youtube.com/watch?v=-5aBpiGMx3Q?feature=oembed&w=500&h=281]

And while I could do it again, sometimes you have to lift your head above the ‘here and now’.

In part, that’s precisely the message I’ve been trying to send this week – that the ‘here and now’ can blind us to the long-term potential of investing in shares if we let it.

(It can also blind us to irrational exuberance if we let it, too.)

So let’s look up, just a little…

Can you imagine what a little bit of long-term thinking might be worth today if it was done – and the ideas implemented – in 2012, 2002, 1992, 1982 or 1972?

Which is not to say there has been no wonderful long-term thinking in the past.

The countless hours of medical research that have saved millions (tens of millions?) of lives.

The technological breakthroughs that have given us the medium you’re reading this through right now.

The vision that set apart public spaces in our cities for parks and other recreational activities.

The invention of the index fund for investors.

And yes, even government policies, including Medicare, deregulation, superannuation, the GST, our modern gun laws… and so much more.

So much more, in fact, that I’ve certainly missed some wonderful past decisions and actions that we benefit from today.

Those people could have been consumed with the day-to-day, and not bothered to imagine what a better world or better country might look like.

They could have just obsessed over that day’s issues, or – in our case – that day’s market movements.

And they – and we – would be much poorer for it.

I’ve told you before, for example, about Vanguard’s numbers showing that a $10,000 investment in the ASX in 1991 would have been worth $160,000 30 years later.

There were a lot of ‘today’s worries’ in the three decades between those two amounts.

And yet, there was a 16-fold return in the offing. We just had to look up a little.

And so I want to do a little of that today.

I want to imagine a better future.

There are a lot – and I mean a LOT – of things that I might change were I to become the Grand Benevolent Dictator of Australia at some point.

I’d probably ban penalty shoot-outs in soccer, and zero-carb beer, for starters.

But I’ll restrict myself to just one financial change today.

And it’s something I’ve been on the record about for a long time but which came up again in a question from a listener to the Motley Fool Money podcast I host.

He asked me to have a look at Norway’s sovereign wealth fund – something I’ve been a fan of for a long, long time.

In doing so, I read the fund’s own explainer, in full, for the first time.

And, well, it got my blood up again.

We are one of the most resource-rich countries on Earth. Perhaps (and I haven’t done the research!) the most resource-rich per head of population.

In any event, we have a LOT of the stuff.

Oil. Gas. Iron. Gold. Copper. And more.

Assets that were in the ground when our fathers’ fathers’ fathers were still millennia away from being born.

And assets that both Australian and foreign companies pull out of the ground and sell, mostly overseas.

The proceeds from which… go into general revenue and get spent on whatever the government of the day fancies.

These are millions of years old. Our national inheritance.

Which we harvest, sell and spend, leaving bugger-all for the kids, and their kids and their great, great, great, great grandkids.

Oh sure, a small amount of it might go into infrastructure, and that might last a few decades.

But most of it? Spent on getting a politician elected or re-elected, enabled by a population (that’s us!) who’ll happily swallow the ‘poor you’ routine that the pollies give us to make us feel sorry for ourselves and then happily vote for them to fix the problems they’ve convinced us we have.

And sure, some of those problems are real.

But isn’t it just a little bit selfish to help ourselves to the rocks, liquids and gasses left to us by generations of our forebears and flog ‘em off to pay today’s bills with nary a thought for those who come after us?

Is that really to be our legacy?

Or, we have Norway’s example to follow.

In Norway, all fossil fuel royalties go into their sovereign wealth fund.

The government of the day – by, in their words ‘broad political consensus’… just imagine that! – gets to spend the returns of the fund, but the capital is preserved.

And – how great is this – the contribution of the sovereign wealth fund pays for a full 20% of the Norwegian government budget these days.

Can you imagine how flush our government coffers would be today if that structure was put in place here in the 70s, 80s or 90s?

We wouldn’t know what to do with all of that money.

And so, with that example from Norway, what are our politicians doing?

Nothing.

To their credit, the Coalition under John Howard, and with Peter Costello as Treasurer, put some of the Telstra privatisation proceeds into the Future Fund – a very narrow but welcome imitation — so that sort of thing is not without precedent here.

We have not one blueprint but two – Norway’s fund and our own.

And, so, with both of those examples, what are our politicians doing?

Still nothing.

There are some people who couldn’t care less about the legacy we leave to future generations. They’ve probably already stopped reading.

But if you’ve got this far, I reckon you care about the country we leave to our kids, and their kids and grandkids.

(And that’s more than just finances, by the way, but let’s stick to the topic today.)

We look back and wonder ‘what if’ the government had done something similar to Norway in the 70s or 80s.

Just as our descendants will wonder, in 2052 or 2062, what might have happened if we’d followed Norway’s example, today.

Isn’t it time we stopped frittering away the proceeds of our national inheritance?

Isn’t it time we turned some all-but eternal resources into an all-but eternal national income stream?

I think so.

It’s time for an Australian sovereign wealth fund – The Australia Fund.

It just requires the political will.

Over to you, Canberra.

(And the market? It’ll be more than okay, I reckon. No promises and no guarantees, but we can have our own, personal, Australia Fund – by investing regularly and staying the course, just like Norway’s Sovereign Wealth Fund, even when things get choppy in the short term. That’s the lesson of history, for governments and individuals alike!)

Have a great weekend!

Fool on!

The post Our greatest national financial legacy? appeared first on The Motley Fool Australia.

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More reading

• Despite recent volatility, the Beach Energy share price has still gained over the past 3 weeks. Here’s why
• Bubs share price avoids market selloff thanks to guidance upgrade
• Humm share price sinks 11% following termination of $250m BNPL sale to Latitude
• What is the current dividend yield on Brickworks shares?
• Top brokers tips 30% upside for the Macquarie share price

Motley Fool contributor Scott Phillips 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 Bubs Australia Ltd (ASX: BUB) share price has avoided the market selloff so far on Friday.

In early trade, the infant formula company’s shares are up 2.5% to 62 cents.

Why is the Bubs share price rising?

The Bubs share price is rising today in response to the release of an announcement relating to its guidance for FY 2022.

According to the release, Bubs has unsurprisingly revealed that its deal with the US government means it is going to outperform the FY 2022 guidance it provided to the market with its half year results.

At that point, the company was expecting “modest” half on half growth from the $38.5 million gross revenue it recorded during the first half.

Bubs now expects gross revenue to be over $100 million for FY 2022, subject to scheduled operations occurring without disruption. This will be more than double the gross revenue of $46.8 million it reported in FY 2021.

What about earnings?

While the upgrade to its revenue was unsurprising, the company’s distinct lack of operating leverage could be a surprise to the market. In fact, its margins appear to be narrowing rather than expanding despite the higher volumes.

Management is guiding to underlying EBITDA of at least $2.4 million for FY 2022. This is despite the company recording underlying EBITDA of $1.2 million during the first half on much lower revenue.

This could be an indication that the margin on these US-bound products is very small.

Management commentary

Bubs Founder and CEO, Kristy Carr, commented:

Due to a strong momentum in China and the unanticipated volume of sales in the USA, complemented by Bubs’ demonstrated agility and speed to respond to the call for action with first mover advantage, Fourth Quarter turnover is likely to be higher than originally anticipated.

And while there are concerns that Bubs could be a one-hit wonder in the US, Carr doesn’t see it that way. She appears confident that the company will not be ousted out of the key market when supply shortages end and the big players start restocking.

It has been an extraordinary journey for Bubs to have had over 12 months of in-market experience to provide the first response to USA’s infant formula shortage, which is likely to change the industry landscape in the USA.

This has significantly accelerated our entry to one of the largest infant formula markets in the world, and we look forward to introducing more American families to Bubs’ full range of products.

The post Bubs share price avoids market selloff thanks to guidance upgrade appeared first on The Motley Fool Australia.

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More reading

• What Adore Beauty, Bubs, Eagers Automotive, and Renascor shares are storming higher
• Bubs share price jumps 10% on Walmart agreement
• Is there still money to be made from Bubs shares?
• Why Breville, Bubs, Terracom, and Xero shares are pushing higher today
• Bubs share price lifts as the brand readies for debut on 4,000 US shelves

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 recommended 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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In morning trade, the Humm Group Ltd (ASX: HUM) share price has continued its slide.

At the time of writing, the financial services company’s shares are down 11% to a new multi-year low of 51 cents.

This means the Humm share price is now down 31% this week.

What’s going on with the Humm share price?

Investors have been selling down the Humm share price today after the company revealed that the $250 million sale of its buy now pay later business to Latitude Group Holdings Ltd (ASX: LFS) has been terminated.

The Latitude share price is up slightly on the news in early trade.

According to the release, the two parties mutually agreed to terminate the proposed Humm Consumer Finance (HCF) transaction due to current major disruption in financial markets.

This is a big blow for Humm, which has been trying to offload the struggling business to focus on its profitable and positive performing Humm Commercial business.

In fact, yesterday Humm released a trading update and stated that HCF’s performance remains under significant pressure. So much so, that at the end of May, the business had recorded a financial year to date cash net profit after tax decline of 61%.

While it was likely that Humm was highlighting this poor performance to gain support for its sale amid criticism from a major shareholder, it’s possible that this raised a few eyebrows at Latitude.

In fact, reports yesterday suggested that Latitude could have been looking to back out from the deal for HCF due to its deteriorating performance. So, today’s termination isn’t a complete surprise.

This morning the Humm Board tried to save a bit of face by talking up the business again now that it is stuck with it. The release states:

The Board of Humm continues to believe that HCF is a high-quality business and intends to review HCF’s strategic direction to focus on its core products and markets in order to restore profitability. The Board and Management remain excited about flexicommercial’s prospects. Humm remains in a strongly capitalised position with surplus unrestricted cash and no drawn corporate debt.

The post Humm share price sinks 11% following termination of $250m BNPL sale to Latitude appeared first on The Motley Fool Australia.

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More reading

• Why Humm, Inghams, Link, and Smartgroup shares are falling
• ‘A dud deal’: Why is the Humm share price falling on Thursday?
• Hmmm… Why is the Humm share price lagging its sector on Friday?

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 recommended Humm 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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Brickworks Limited (ASX: BKW) shares are an ASX staple. The company’s been listed in Australia for around 60 years and is housed in the S&P/ASX 200 Index (ASX: XJO). Brickworks shares are also a favourite among dividend investors.

But is it currently trading with an eye-catching dividend yield? Let’s take a look.

Do Brickworks shares offer a 3.5% dividend yield?

As of Thursday’s close, the Brickworks share price is $17.61. That’s almost 29% lower than it was at the start of 2022 and 26% lower than it was this time last year.

But despite the company’s falling share price, its dividends have remained strong over the last 12 months.

Brickworks paid investors a 40-cent final dividend for financial year 2021 in November.

It also handed shareholders a 22-cent interim dividend in April after the first half of this financial year saw its profits surge 269%.

Additionally, the company’s dividends are fully franked. That means some investors might see additional benefits from the payouts at tax time.

So, as the company has paid out 62 cents of dividends over the last 12 months, it’s currently trading with a trailing dividend yield of 3.52%.

For those wondering, Brickworks no longer hosts a dividend reinvestment plan (DRP).

It introduced a DRP in 2020 to preserve liquidity during the onset of the COVID-19 pandemic but dropped it in March 2021.

So, what else might pique investors’ interest in the company? Here’s a brief rundown of how it operates.

Brickworks’ revenue comes from its four segments: Building products Australia, building products North America, property, and investments.

The first two are easy to explain. They manufacture building materials for the Australian and North American markets.

Simultaneously, Brickworks’ property division looks to maximise the value of land previously used to craft building products. Sometimes, the land is rezoned and sold for residential property. Other times, it’s transferred to the company’s 50%-owned Joint Venture Industrial Property Trust.

Finally, the company’s investments segment houses Brickworks’ 39.4% interest in fellow ASX 200 dividend share Washington H Soul Pattinson and Co Ltd (ASX: SOL).

The post What is the current dividend yield on Brickworks shares? appeared first on The Motley Fool Australia.

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More reading

• Here’s why I think the Brickworks share price is a top buy
• 3 high-quality ASX 300 shares trading at 52-week lows today
• I’d buy these two ASX dividend shares in June 2022
• Could now be a great time to start investing in ASX shares?
• 2 ASX dividend shares I’d buy for passive income

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 positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Macquarie Group Ltd (ASX: MQG) share price has taken a tumble with the market in 2022.

Since the start of the year, the investment bank’s shares have dropped a sizeable 22% to $164.67.

Is the Macquarie share price weakness a buying opportunity?

Although the weakness in the Macquarie share price this year has been disappointing for shareholders, it could be a buying opportunity for non-shareholders.

That’s the view of the team at Morgans, which recently reiterated its add rating and $215.00 price target on the company’s shares.

Based on the current Macquarie share price, this implies potential upside of 30% for investors over the next 12 months.

In addition, the broker is forecasting 4%+ dividend yields from Macquarie’s shares in FY 2022 and FY 2023 based on where its shares are currently trading.

This stretches the total return on offer with the company’s shares to almost 35% between now and this time next year.

What did the broker say?

According to the note, Morgans is a fan of the company due to its exposure to long-term structural growth markets. The broker explained:

We continue to like MQG’s exposure to long-term structural growth areas such as infrastructure and renewables. The company also stands to benefit from recent market volatility through its trading businesses, while the company continues to gain market share in Australian mortgages.

And while its analysts acknowledge that it will be hard for Macquarie to build on FY 2022’s stellar earnings, it thinks investors should look beyond this. Particularly given its long track record of delivering strong returns. Morgans concludes:

We anticipate some near-term earnings volatility over FY23 but we like MQG’s favourable longer-term growth profile and consistent history of delivering strong returns (~15% average ROE over time).

The post Top brokers tips 30% upside for the Macquarie share price appeared first on The Motley Fool Australia.

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More reading

• Why Macquarie shares could be set for a $570m tailwind
• ASX 200 bank shares tumble: Citi says time to buy
• Macquarie shares are beating the other ASX 200 banks again today. What’s going on?
• Why is Macquarie the only ASX 200 bank share in the green today?
• 2 ASX 200 financials shares named as buys

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 recommended Macquarie 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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If you’re looking to invest in exchange traded funds (ETFs), then it could be worth considering the three listed below.

These three ETFs are popular with investors and it isn’t hard to see why. Here’s what you need to know about them:

BetaShares Global Energy Companies ETF (ASX: FUEL)

You only need to look at the price you are paying for petrol to know that oil prices are booming right now. And with supply likely to remain tight for a while to come due to the blacklisting of Russian oil, companies producing the black gold look set to generate big profits. In light of this, the BetaShares Global Energy Companies ETF could prove to be a great option for investors. This ETF provides investors with easy access to many of the largest energy producers in the world. This includes the likes of BP, Chevron, ExxonMobil, and Royal Dutch Shell.

BetaShares NASDAQ 100 ETF (ASX: NDQ)

The BetaShares NASDAQ 100 ETF and the index this fund tracks are having a very tough year. And while they may not yet have found a bottom, each decline is making the BetaShares NASDAQ 100 ETF more attractive. After all, this ETF is home to many of the world’s greatest companies. This includes giants such as Alphabet, Amazon, Apple, Facebook, Microsoft, Netflix, and Tesla. In a few years, we may look back on this period as being one of the best buying opportunities we’ve had in a long time.

VanEck Vectors Video Gaming and eSports ETF (ASX: ESPO)

A final ETF for ASX investors to look at is the VanEck Vectors Video Gaming and eSports ETF. As with the BetaShares NASDAQ 100 ETF, this ETF has been hammered this year. This could also prove to be a fantastic buying opportunity, especially given the strong growth potential of the companies included in this fund. These are many of the biggest companies in a global video game market estimated to comprise 2.7 billion active gamers. Among the shares that are included in the fund are AMD, Electronic Arts, Nintendo, Nvidia, Roblox, and Take-Two.

The post 3 high quality ETFs for ASX investors to buy now appeared first on The Motley Fool Australia.

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More reading

• Here’s why the NDQ ETF is down almost 30% in 2022
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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 BETANASDAQ ETF UNITS and BetaShares Global Energy Companies ETF – Currency Hedged. The Motley Fool Australia has positions in and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended VanEck Vectors ETF Trust – VanEck Vectors Video Gaming and eSports ETF. 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.

What happened

In the midst of a down market, shares of EV leader Tesla (NASDAQ: TSLA) tumbled more than most, falling 7.2% through noon ET on Thursday after Reuters reported that Tesla is once again raising prices on its electric cars. 

Citing the rising cost of raw materials and continuing problems getting auto parts with which to build its cars efficiently, Reuters noted that Tesla has raised the price on its popular Model Y crossover by about 4.8%, to $65,990 for the “long-range” version.  

So what

Tesla isn’t stopping there, though. Digging into the details on Tesla’s website, Electrek reported last night that the prices are as follows:

• The Model 3 Long Range price is up the most in percentage terms, rising 6.4% to $57,990.
• The Model X Dual Motor All-Wheel Drive Long Range price increased 5.2% to $120,990.
• The Model S Dual Motor All-Wheel Drive Long Range’s price rose a similar 5% to $104,990.
• The Model Y Performance crossover inched up only 2.9% to $69,990.
• “Plaid” versions of both the Model S and the Model X held steady at $135,990 and $138,990, respectively — no change in price.

Skimming the changes, there’s no discernible pattern to where Tesla is hiking prices more and where less. While “Plaid” pricing is already the highest for both the S and X and is not budging, Tesla’s other Model X doesn’t cost much less, yet its price was hiked significantly.

The biggest change in pricing came to the Model 3, and raising the price on Tesla’s entry-level EV may be a move to encourage customers to skip past the Model 3 and pay just a little more to get an even better, bigger car instead. Similarly, the price changes in the Model Y tighten the price differential between the lower-end and higher-end models — which might likewise be aimed at persuading shoppers to buy a little more car than they had intended.

Now what

To that extent, therefore, it almost seems as if raising prices might be good news for Tesla, and that investors who are selling the stock on today’s news are making a mistake — but for one thing.

Just two days ago, Elon Musk was quoted telling his audience at the Tesla Silicon Valley Owners Club that he thought electric rival Rivian (NASDAQ: RIVN) made a mistake when it tried to raise prices on its electric trucks and SUVs back in March. When you raise prices, commented Musk, you “reduce the number of people who can afford the vehicles exponentially,” as Electrek reported.  

If that’s true for Rivian, though, then shouldn’t it also be true for Tesla? By raising his own prices, doesn’t Musk run the risk of depressing demand for new Teslas — at the very moment when rivals such as Hyundai and Ford and GM — and yes, Rivian, too — are bringing new and occasionally cheaper alternative EV models to market?

Because if that’s the case, then it might be a good reason Tesla stock is going down today. 

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

The post Why Tesla stock sold off 7% today appeared first on The Motley Fool Australia.

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More reading

• Why Tesla stock jumped 5% today
• Why Tesla shares were rising today
• Tesla Looks to Reinforce Its Battery Supply Chain: Why That Matters
• More likely to 5x first: Tesla vs. Ford?
• Why Tesla stock enjoyed a rally today

Rich Smith 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 Tesla. 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.

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

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A hot topic in the lithium space — does the Pilbara Minerals Ltd (ASX: PLS) share price represent good value?

Since the release of Goldman Sachs’ bearish analysis on the battery metals market, the lithium miner’s shares have tumbled.

In the past week, Pilbara Minerals shares are down 7%, despite finishing 3.90% higher at $2.13 yesterday. This is in stark contrast to when its shares were trading as high as $3.89 in January this year. They are now down 33% this year to date.

Nonetheless, here are my reasons below why I think the company’s shares are undervalued at the current price.

Is now the time to buy Pilbara Minerals shares?

While the Pilbara Minerals share price has tanked recently, the company has been busy progressing its Pilgangoora Operation in Western Australia.

The flagship project is targeting an expanded combined production capacity across two processing plants. This means roughly 560-580,000 tonnes per annum of spodumene concentrate will be produced from the September quarter of 2022.

That’s no small potatoes, particularly with lithium prices nearing an all-time high of around US$72,000 per tonne.

Year on year, the price for the battery-making ingredient has soared 430% as demand projections are far exceeding future supply to market.

Furthermore, the company’s Battery Material Exchange (BMX) auction has become highly successful.

A broad range of buyers has continued to show strong interest by bidding online for Pilbara Minerals’ spodumene concentrate.

Last month, the results of the fifth auction represented the fourth consecutive increase in spodumene spot sales. This translates to a lucrative additional revenue stream for the company.

However, with Pilbara Minerals shares falling more than 33% in 2022, I believe this could be an attractive investment.

A number of brokers also remain bullish on the company’s share price.

According to ANZ Share Investing, the team at Macquarie put a price target of $3.50 on Pilbara Minerals shares.

In addition, Citi analysts also weighed in, giving their rating of $3.50 per share as well.

Based on the last closing price, this represents an upside of 64% for investors.

Pilbara Minerals share price snapshot

Regardless of the tough month of trade, the Pilbara Minerals share price is up 60% in the past 12 months.

When looking further back, the company’s shares have rocketed from a humble price of 15 cents apiece in March 2020.

On valuation grounds, Pilbara Minerals presides a market capitalisation of roughly $6.10 billion.

The post Why I think the Pilbara Minerals share price is currently undervalued appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Why is the Pilbara Minerals share price surging 5% on Thursday?
• Here are the 3 most traded ASX 200 shares on Wednesday
• Here are the 3 most traded ASX 200 shares on Tuesday
• Why is the Pilbara Minerals share price down 6% on Tuesday?

Motley Fool contributor Aaron Teboneras has positions in Pilbara Minerals 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 recommended Macquarie 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 National Australia Bank Ltd (ASX: NAB) share price is down 16% over the last month. This big four ASX bank has suffered a decline like a lot of fellow S&P/ASX 200 Index (ASX: XJO) shares.

However, one fund manager thinks big four ASX banks are good opportunities after the recent decline. Will Riggall, the chief investment officer from Clime Investment Management, thinks the sell-off in ASX bank shares after the June interest rate increase may have been overdone.

What’s attractive about the NAB share price?

Riggall explained that the big four ASX banks have been hurt due to increased concern that “higher interest rates will see a sharp property downturn”.

“We believe house prices are set to decline,” he said. “However, given the amount of savings held by consumers, we are unlikely to see the sharp increase in defaults that would be needed to offset the positive impact that higher variable rates have on bank earnings.”

With that in mind, the fund manager is “selectively” increasing its position in bank shares in this period of volatility.

In fact, it’s the dividends from the banks which are seen as a “key attraction”. Clime sees the dividends as having a “high and sustainable” dividend outlook.

The fund manager is expecting this period to likely be a lower-return period.

The fall in the NAB share price has also pushed up the prospective dividend yield.

Clime currently prefers to own ASX shares that have exposure to corporate and government spending, with the Australian consumer “likely to remain under pressure”.

On NAB, the fund manager said it had been a “stellar performer” for the portfolio this year, mostly driven by the “exceptional’ turnaround under the new CEO Ross McEwan.

How is the bank performing?

The last the market heard from the big bank was the release of its FY22 half-year result on May 5. It said it generated $3.55 billion of statutory net profit after tax (NPAT) and $3.48 billion of cash earnings, representing a 4.1% increase year on year.

Revenue rose 4.6%, benefiting from “pricing discipline and strong growth in lending and deposits which were up 10% and 12% respectively versus March 2021″.

It made a cash return on equity (ROE) of 11.3% in that result. Looking at its balance sheet, the big bank said its group common equity tier 1 (CET1) ratio was 12.48% at the end of the period.

The NAB share price fell 0.5% the day the results were released and 1.9% the following day.

NAB dividend

As the fund manager said, the bank dividends can form a sizeable part of the total returns. In HY22, NAB decided to declare an interim dividend of 73 cents per share, which was a double-digit increase compared to the FY21 interim dividend.

Looking at the last 12 months of dividends from NAB, it has a grossed-up dividend yield of 7.6% at the current NAB share price.

The post ‘Stellar performer’: Why this fundie is buying the dip in the NAB share price appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• Is a recession coming to Australia this year?
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• ASX 200 bank shares languish on Thursday despite market lift
• Despite rising bond yields, here’s why I’ll keep investing in ASX shares

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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Elders Ltd (ASX: ELD) shareholders will have something to cheer about today as the company pays out its latest dividend.

The agribusiness company is rewarding eligible investors with a partially franked interim dividend of 28 cents per share.

At Thursday’s market close, the Elders share price finished 0.16% higher at $12.72.

Despite being in the green, it has been a tough period for Elders shares, which have fallen 5% in a week and 9% in the past month.

Let’s take a look at all the details regarding the Elders dividend.

Elders pays out record dividend

Elders delivered an outstanding performance across key metrics in its first half results for the 2022 financial year.

In summary, management reported sales revenue of $1,514.8 million which reflected a 38% increase on the prior comparable period.

Furthermore, earnings before interest and tax (EBIT) accelerated by 80% to $132.8 million

On the bottom line, this led to a net profit after tax (NPAT) of $91.2 million, up 34% on H1 FY21.

Elders noted the robust financial scorecard was underpinned predominantly by its rural products business. Demand surged for fertiliser and crop protection products on the back of favourable seasonal conditions in key cropping regions.

However, the biggest win for shareholders came in the form of the board’s decision to ramp up the interim dividend.

For context, the first half dividend for FY22 represented a 40% jump on the 20 cents declared in H1 FY21.

Notably, this is now the highest Elders dividend ever paid to shareholders in the history of the company.

When calculating against the last closing share price, Elders is trailing on a forecast dividend yield of 3.94%.

Elders share price snapshot

Over the past 12 months, the Elders share price has risen by 8%. It is also up by 3% this year to date.

It was only in March this year that the company’s shares accelerated following a positive trading update.

Just two months later on 23 May, Elders shares reached a decade high of $15.32.

The company presides a price-to-earnings (P/E) ratio of 11.51 and commands a market capitalisation of roughly $1.99 billion.

The post Guess which ASX 200 share is paying its biggest-ever dividend today? appeared first on The Motley Fool Australia.

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More reading

• 3 ASX shares to buy for scary times: experts
• Why is the GrainCorp share price racing higher today?
• Why Appen, Elders, Predictive Discovery, and Yancoal shares are dropping
• Why is the Elders share price in reverse today?
• Experts name 2 top ASX dividend shares to buy now

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 Elders 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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