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When it comes to ASX dividend shares, a few names stand out. If you asked a randomly selected investor to name three ASX dividend shares, chances are you will get a bank, a miner and maybe Telstra Corporation Ltd (ASX: TLS) or Woolworths Group Ltd (ASX: WOW).

On one level, this is fair enough. Most of the ASX 200 blue chip miners have spent the past year or two doling out record dividend payments. And most of the ASX banks like Commonwealth Bank of Australia (ASX: CBA) have been paying dividends for decades.

But the ASX is full of dividend-paying shares, making an income investors’ universe far larger than a collection of banks and miners. So let’s check out three ASX dividend shares that you might not even realise pay dividend income to their owners.

3 ASX dividend shares you might not know about

Harvey Norman Holdings Limited (ASX: HVN)

Chances are you’ve heard of the hardly normal Harvey Norman. This famous Aussie retailer has been around for decades. But what you might now know is that Harvey Norman shares are pretty consistent when it comes to dividends.

This company hasn’t missed a dividend payment in over a decade. Indeed, it has recently paid out some of the largest dividends in its history, with investors enjoying the payment of a 20 cents per share fully franked interim dividend earlier this month. Over the past year, Harvey Norman’s dividends give its shares a fully franked trailing yield of 7.7%.

JB Hi-Fi Ltd (ASX: JBH)

JB Hi-Fi is another famous Australian retail name. You’ve probably seen its yellow branding and advertising pop up regularly. But what you might not have seen yet is this company’s own impressive history when it comes to funding dividends.

The company only started doling out the cash in 2014. But since then, JB has grown its payments from 29 cents a share to the $2.87 investors received last year. Like Harvey Norman, JB’s dividends usually come fully franked as well. At current pricing, JB Hi-Fi offers a trailing dividend yield of 5.67%.

Super Retail Group Ltd (ASX: SUL)

Unlike the other two names on this list, Super Retail Group is not a company with widespread name recognition. However, it’s a different story with the businesses and brands this company owns. They include Supercheap Auto, BCF, Rebel, and Macpac. Ringing a bell now?

Super Retail is a company that has a strong, if recently rather erratic, history of paying its investors large dividends. Between 2009 and 2019, Super Retail raised its annual dividend every year bar one. 2020 saw COVID take a big toll on investors’ incomes, with the company only paying out 19.5 cents per share in contrast to the 50 cents investors enjoyed in 2019. However, the company arguably made it up to shareholders last year when it treated investors to 88 cents per share in dividends. At current pricing, Super Retail Group has a trailing and fully franked dividend yield of 8.28%.

The post 3 ASX shares you might be surprised to learn pay dividends appeared first on The Motley Fool Australia.

More reading

• Is the Telstra share price cheap compared to other ASX 200 shares?
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• 2 ASX 200 shares smashing multi-year highs today
• ASX 200 midday update: Brambles takeover talks end, resources shares charge higher
• Oz Minerals share price rallies on potential $200m acquisition

Motley Fool contributor Sebastian Bowen has positions in Telstra Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Harvey Norman Holdings Ltd. and Super Retail Group Limited. The Motley Fool Australia has positions in and has recommended Harvey Norman Holdings Ltd., Super Retail Group Limited, and Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Shares in AGL Energy Limited (ASX: AGL) are among the most traded on the market on Tuesday, leading media to point to Mike Cannon-Brookes once more.

A 5% stake in the company – worth just under $300 million – was reportedly traded through JPMorgan on Tuesday.

The Atlassian Corporation (NASDAQ: TEAM) CEO and activist against the company’s demerger might be the face behind it.

The tech billionaire also sent a letter to AGL shareholders earlier today, urging them to vote against the plan.

As of Tuesday’s close, the AGL share price is $8.62, 2.25% higher than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) finished 0.27% higher.

Let’s take a closer look at the latest on Cannon-Brookes’ battle to block AGL’s planned split.

Is Cannon-Brookes behind a major trade of AGL shares?

Cannon-Brookes has stepped up the fight against AGL’s demerger as he reportedly prepares to march into the voting booth.

The Atlassian boss is exchanging AGL derivatives – which helped his investment vehicle, Grok Ventures, pick up an 11.28% stake earlier this month – for physical shares in the company, reports the Australian Financial Review.

It’s reportedly a swap that needs to happen before the tech mogul can vote on the demerger at AGL’s upcoming scheme meeting.

Cannon-Brookes makes no secret of his plan to vote his stake against the split that aims to see AGL Energy become energy retailer, AGL Australian, and energy generator, Accel Energy.

And today he is urging fellow shareholders to do the same on 15 June.

In a letter sent to shareholders, AGL’s new major investor dubbed the demerger “deeply flawed” and “globally irresponsible”:

When a worker lit Sydney’s first gas lamp in 1841, AGL Energy was a company excited to embrace the future – not one that was afraid of it.

Today, after overseeing a share price decline of nearly 70% over 5 years, the AGL Energy board, which owns less than 0.02% of the company, is asking us to vote on whether to split AGL Energy into two companies …

If the demerger is voted down … we intend to work with the board to listen to shareholders and set a more ambitious plan for the company. A plan that attracts capital and customers. A plan that ensures that AGL Energy’s workers and communities are beneficiaries of this economic opportunity. One that delivers dividends and shareholder value.

Mike Cannon-Brookes in a letter to AGL shareholders

Cannon-Brookes claims demerging will cost shareholders approximately $400 million to $500 million.

He also said AGL Energy hasn’t invested a dime in the direct development of renewable energy generation over the last five years.

The post Why have AGL shares been getting so much love on Tuesday? appeared first on The Motley Fool Australia.

More reading

• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• AGL share price bounces back amid latest demerger opposition
• How dependant on coal closure is the AGL share price?
• AGL share price lifts despite Greenpeace accusing leadership of being ‘caught with their pants down’
• Is Cannon-Brookes getting ready to pitch a third takeover bid for AGL shares?

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. 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 Atlassian. 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 another turbulent month for the Zip Co Ltd (ASX: ZIP) share price, shedding 25% over the past four weeks.

At the close of trading on Tuesday, the buy now, pay later (BNPL) company’s shares were fetching 92 cents, down 3.16% for the day. This means its shares are trading at multi-year lows.

What’s been happening with Zip?

It’s been a hard pill to swallow for investors as they have watched their Zip holdings plummet in value.

The company reported top-line growth across its global operating markets for the third quarter of FY22 on April 21. However, its credit losses which increased over the quarter did not resonate well with shareholders.

During this time the company’s shares slumped for five consecutive trading days, amounting to a fall of almost 20%.

Furthermore, the ASX was heavily sold off earlier this month which continued the Zip share price onslaught.

The company acknowledged a shift in the external environment, arguably quicker and more severe than first forecasted.

In response, management refined its strategy but it is still too early to tell if this will pay off.

Not helping matters is the fall of the S&P/ASX All Technology Index (ASX: XTX), which has dropped 30% year to date.

Additionally, the Reserve Bank of Australia raising interest rates for the first time since 2010 doesn’t bode well for Zipsters.

What this means is that consumers are less likely to spend on discretionary items when interest rates are picking up.

The cost of debt such as credit cards as well as personal loans will require extra payments, affecting consumer spending habits.

How has the Zip share price performed?

Following today’s losses, the Zip share price has dived 86% over the past 12 months.

It’s a long way from when the company’s shares reached an all-time high of $14.53 in early 2021.

Based on today’s prices, Zip presides a market capitalisation of approximately $628.85 million.

The post Why is the Zip share price down almost 25% in a month? appeared first on The Motley Fool Australia.

More reading

• Why did the Zip share price just pop then drop?
• Blast off! Why is the Zip share price zooming on Friday?
• Zip share price tumbles 5% to another multi-year low
• ASX 200 tech shares are staging a remarkable recovery today
• It’s happened: Zip share price tumbles below $1 for first time since 2018

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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Once again ASX lithium stocks amped up their shareholders as the sector fired off another green day.

Taking a glance at the market, shares in some of the biggest lithium players such as Mineral Resources Limited (ASX: MIN) and Pilbara Minerals Ltd (ASX: PLS) finished up 5.71% and 5% respectively. Likewise, the slightly smaller end of town posted commendable gains. For example, Core Lithium Ltd (ASX: CXO) and Sayona Mining Ltd (ASX: SYA) closed 9.28% and 5.88% higher.

But what’s fuelling the excitement?

Checking in on ASX lithium stocks

To start with a baseline reading, the S&P/ASX 200 Index (ASX: XJO) inched 0.27% ahead on Tuesday. Clearly, there was something going on for ASX lithium stocks to be 5% or stronger while the rest of the market had an average day.

For a couple of these companies, the rally can be explained by announcements made to the market today that were well received by investors.

For starters, Pilbara Minerals published two notable news items today. This included word of a $20 million government grant alongside Calix Ltd (ASX: CXL) to further develop a decarbonised hard-rock lithium supply chain. Secondly, the lithium producer agreed to sell a base metal exploration tenement for $300,000 plus 2.5% royalties.

Another ASX lithium stock making waves today was Core Lithium. The company released a development update this morning regarding its Finniss Lithium Project located near Darwin.

According to the release, it is anticipating the commencement of ore crushing next month. As such, Core remains on track for production to commence by the end of the year. The development marks an important step in the right direction for the pre-revenue mining company.

As for the remaining ASX lithium stocks, it appears a rising tide lifted all boats. Prices of the all-important battery commodity have remained elevated with forecasts still indicating a future deficit in supply.

The post Lighting up the market: ASX lithium stocks surge again on Tuesday appeared first on The Motley Fool Australia.

More reading

• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Why BlueScope, OFX, Pilbara Minerals, and Step One shares are pushing higher
• Here’s why the Core Lithium share price is racing higher today
• ASX 200 midday update: Brambles takeover talks end, resources shares charge higher
• Why is the Pilbara Minerals share price climbing today?

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 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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I like to keep an eye on substantial shareholder notices. This is because these notices give you an idea of which shares large investors, asset managers, and investment funds are buying or selling.

Two notices that have caught my eye are summarised below. Here’s what this fund manager has been buying:

Bigtincan Holdings Ltd (ASX: BTH)

According to a change of interests of substantial holder notice, Australian Ethical Investment Limited (ASX: AEF) has taken advantage of recent weakness in the Bigtincan share price to increase its stake.

The notice reveals that the fund manager has picked up over 8.5 million shares since its last notice. This has lifted its holding in the sales enablement platform provider to a total of ~55.8 million shares, which is the equivalent of a 10.15% stake.

With the Bigtincan share price down by almost 50% since the start of the year, it appears as though Australian Ethical sees this as a buying opportunity.

The fund manager’s last purchase was made on Thursday when it picked up shares at an average of 51.4 cents per share.

Nitro Software Ltd (ASX: NTO)

Another change of interests of substantial holder notice reveals that Australian Ethical has also been buying this document productivity software company’s shares.

The fund manager has increased its stake by ~2.5 million shares to a total of just over 17.7 million shares. This represents a stake of 7.29%.

Australian Ethical’s last purchase was made on Thursday when it picked up shares at an average of $1.176 per share.

Once again, with the Nitro share price down 46% in 2022, its analysts appear to believe this has created a buying opportunity.

The team at Goldman Sachs would agree with this. The broker recently reiterated its buy rating and $2.35 price target on the company’s shares.

The post A top fund manager has been buying these ASX tech shares after the market selloff appeared first on The Motley Fool Australia.

More reading

• Why is the Nitro Software share price rallying 5%?
• 3 ASX tech shares we’re sticking with: Forager
• Here’s why the Bigtincan share price is jumping 10% today
• Analysts say these top ASX growth shares are buys
• 2 highly rated small cap ASX shares that analysts say have huge potential

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 Australian Ethical Investment Ltd. and BIGTINCAN FPO. The Motley Fool Australia has positions in and has recommended BIGTINCAN FPO. The Motley Fool Australia has recommended Australian Ethical Investment Ltd. and Nitro Software Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Since its gradual privatisation in the 1990s and 2000s, Telstra Corporation Ltd (ASX: TLS) has been one of the bluest blue-chip shares on the S&P/ASX 200 Index (ASX: XJO). From its days as Telecom Australia, this company has never experienced any other life than a mature telecommunications company with a dominant market share. But that isn’t to say that the Telstra share price (and investors) hasn’t had a few ups and downs along the way. After all, Telstra is a company that has had a share price of $8.75 and $2.66 at various points of its life.

Today, Telstra shares are trading at $3.92, down 0.25% for the day. So at this level, could you call the Telstra share price expensive or cheap compared to other ASX shares? Let’s check it out.

Is the Telstra share price cheap right now?

One of the best ways of measuring an ASX share’s valuation is by using the price-to-earnings (P/E) ratio. This is especially true for a mature company like Telstra.

Telstra’s current share price gives it a P/E ratio of 31.95. This means that at the current share price, investors are paying the equivalent of $31.95 for every $1 Telstra makes in earnings.

So is this expensive for Telstra shares? Well, arguably yes, compared to some other ASX 200 blue chips at least. Take Commonwealth Bank of Australia (ASX: CBA). It currently has the highest P/E ratio out of the big four ASX bank shares. But this is still only at around 17.3. The largest share on the ASX 200 is BHP Group Ltd (ASX: BHP). But BHP shares currently have a P/E ratio of just 9.36.

But that’s banks and miners. These two sectors often tend to trade at lower P/E multiples than the rest of the market. CSL Limited (ASX: CSL) currently has a P/E ratio of 38.17. Woolworths Group Ltd (ASX: WOW) has an even higher metric of 42.92. Now that’s getting closer to Telstra shares.

So ultimately, Telstra’s valuation can be rather subjective. Looking at a P/E ratio of 31.95 for Telstra alone may lead some investors to think the telco is overvalued.

A dividend investor might just find out that Telstra is currently offering a fully franked dividend yield of more than 4% right now and not need to know anything else. Others might say it’s cheaper than Woolies and thus worth a look. ASX broker Morgan Stanley is one who thinks the Telstra share price is a buy today.

In the meantime, the current Telstra share price gives this ASX 200 telco a market capitalisation of $45.6 billion.

The post Is the Telstra share price cheap compared to other ASX 200 shares? appeared first on The Motley Fool Australia.

More reading

• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Why CSL shares are ‘going to deliver’ in 2022: fund manager
• 2 ASX 200 shares smashing multi-year highs today
• ASX 200 midday update: Brambles takeover talks end, resources shares charge higher
• ‘Future-proof your portfolio’: experts pick 3 quality growth ASX shares to buy

Motley Fool contributor Sebastian Bowen has positions in Telstra Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd. The Motley Fool Australia has positions in and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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When you think of S&P/ASX 200 Index (ASX: XJO) shares to buy in today’s era of rising interest rates, growth shares might not be the first to spring to mind.

That’s because most ASX shares falling into the growth category have suffered some hefty losses in 2022.

What’s been happening with ASX 200 shares in 2022?

The sell-off began early in the year as investors cottoned on to the reality that fast-rising inflation figures weren’t so transitory after all. And that rock bottom interest rates, forecast to remain in the basement until 2024, would in fact begin ratcheting higher this year to rein in that inflation.

As investors repositioned their portfolios, that pressured many ASX 200 shares, with the index slipping 6.3% year-to-date.

As a metric for growth shares, we can compare that to S&P/ASX All Technology Index (ASX: XTX), which has dropped 32.2% this calendar year.

So, with growth shares under heavy pressure, are there any ASX 200 shares in that category that look promising amid rising rates?

Mature growth stocks in the spotlight

Certainly, according to Ben Clark, portfolio manager at TMS Capital, who told Livewire that he’s been buying “quite a few” growth stocks recently.

Chief among those that Clark singled out is Seek Limited (ASX: SEK), which owns and operates Australia’s dominant online job advertising website.

Addressing the lingering uncertainty as to the scale of pending interest rate hikes and rising bond yields, Clark said:

To me the safe area at the moment, just while you’re trying to assess where bond yields do top out or where the terminal interest rate plays to, is probably the more mature growth stocks that you want to look at.

One of the vital things to look for in ASX 200 growth shares, he said, is “a lot of certainty around the earnings”.

“Seek might be a business that I’d single out there and the multiple compression isn’t going to be too violent from this stage,” he said.

As for which ASX 200 shares you may wish to avoid for now?

“You still want to avoid businesses that need the share market to fund their future growth,” Clark advised. “That is not where you want to be at the moment.”

Seek share price snap shot

The Seek share price has underperformed the average of all the ASX 200 shares in 2022, falling 28.5%. That compares to the year-to-date loss of 6.3% posted by the ASX 200.

Seek pays a 1.7% trailing dividend yield, fully franked.

The post The ASX 200 share this fund manager singles out amid rising interest rates appeared first on The Motley Fool Australia.

More reading

• Why Brambles, James Hardie, Seek, and Sezzle shares are sinking
• Leading brokers name 3 ASX shares to sell today
• ‘Future-proof your portfolio’: experts pick 3 quality growth ASX shares to buy
• 5 things to watch on the ASX 200 on Tuesday
• 3 ASX shares destined for greatness: Firetrail

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 SEEK 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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Back in 2020, Westpac Banking Corporation (ASX: WBC) accepted an enforceable undertaking to “remediate significant risk governance shortcomings”.

Today, Westpac released the 4th and 5th Independent Reviewer reports on its efforts for the December 2021 and March 2022 quarters.

The report outlined “progress of its Integrated Plan to improve risk culture, governance, and accountability,” Westpac says, whilst covering a raft of other data points.

Latest update to Westpac’s remediation plan

The report covered Westpac’s delivery of its three-year Customer Outcomes and Risk Excellence (CORE) program as at 31 March 2022.

According to Westpac, “the program comprises 19 workstreams, 82 deliverables with 343 activities. When an activity is complete, it is submitted to [independent reviewer] Promontory for assessment and their reports outline that progress.”

Findings from the reports note Westpac has “recently consolidated and refined its approach to
measuring program outcomes across the Group,” according to Promontory Australia.

The reviewer found:

The changes to these measures are designed in part to bring a greater quantitative approach to the assessment of program progress and business outcomes. Westpac is in the process of operationalising these measures throughout the Group.

In terms of progress, the report notes Westpac has embarked on a considerable effort to ensure the design of the program was suitable.

“Nonetheless,” the reviewer continued, “the Bank must remain mindful that successfully achieving a significant uplift in risk governance will continue to require substantial work and a rigorous focus on execution.”

“The Bank’s difficulty in ‘staying the course’ during major projects, which has been identified as one of Westpac’s cultural weaknesses in the past, will need to be overcome.”

One of the challenges Westpac will need to address is dampening any disruption from its organisational restructure, Promontory Australia says.

According to its findings, it is important the bank stays focused and maintains momentum earned throughout the process.

Management commentary

Commenting on the report, Westpac CEO Peter King said that delivering on the program “remains a top priority”. He added:

With strong foundations established, we are beginning to see the change reflected across the company. Our focus is on implementing and embedding sustainable change in our management of risks so we can deliver better outcomes for customers.

Westpac shares have clipped a 3% loss over the last 12 months but are trading 15% higher this year to date.

The post Latest Westpac review notes progress but flags ‘bank’s difficulty in staying the course’ appeared first on The Motley Fool Australia.

More reading

• Brokers name 2 ASX 200 blue chip shares to buy
• This is the best ASX bank share to buy in a rising rate environment: Citi
• Hoping to bag the next Westpac dividend? Read this
• Top ASX dividend shares to buy in May 2022
• Is the Westpac share price a smart bank buy 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 recommended Westpac Banking Corporation. 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 leading investors from Wilson Asset Management (WAM) have told investors about two compelling All Ordinaries Index (ASX: XAO) ASX shares that are liked.

WAM operates several listed investment companies (LICs). Some, like WAM Leaders Ltd (ASX: WLE), focus on larger companies.

WAM Capital Limited (ASX: WAM) targets “the most compelling undervalued growth opportunities in the Australian market”.

Does WAM have a claim of stock picking pedigree? The WAM Capital portfolio has delivered an investment return of 15.7% per annum since its inception in August 1999, before fees, expenses, and taxes. This gross return outperformed the All Ordinaries Total Accumulation Index (ASX: XAOA) return of 8.6% per annum over the same timeframe.

These are the two ASX shares that WAM Capital outlined in its most recent monthly update:

GUD Holdings Limited (ASX: GUD)

WAM describes GUD as a business that owns a portfolio of companies in the automotive aftermarket and water products sectors with the “principal” markets being Australia and New Zealand.

The fund manager pointed out that the All Ordinaries ASX share released a trading update last month at an investor day.

The company revealed that revenue had recovered strongly in March as COVID-19 disruptions receded.

GUD showed that the backlog in dealer sales was at a historically high level, which is expected to support revenue growth in the shorter term. New vehicle sales are expected to return to pre-COVID levels in the medium term.

However, the company did say that inflationary pressure in the costs of freight, supply, and materials will increase prices in the first half of FY23.

WAM noted that despite the cost pressures being experienced by the business, it reaffirmed its guidance for FY22 that underlying earnings before interest, taxes, and amortisation (EBITA) will be in the range of between $155 million and $160 million.

The fund manager said its outlook for the All Ordinaries ASX share is “strong” and it’s confident the company can deliver on its FY22 guidance.

Credit Corp Group Limited (ASX: CCP)

Credit Corp is the other All Ordinaries ASX share that WAM referred to in the WAM Capital portfolio.

The fund manager said Credit Corp is Australia’s largest provider of “sustainable financial services” in the credit impaired consumer segment.

WAM pointed out that last month the Credit Corp share price dropped on the news that the recovery in credit card spending among Australians is taking longer than expected since the decline experienced during the lockdowns.

The slower-than-expected recovery has meant there has been a delay in the recovery of purchased debt ledger (PDL) volumes, which WAM points out is a core driver of earnings growth for Credit Corp.

But, WAM is confident thanks to a resumption of “typical” spending patterns in the US, which it thinks means that credit card spending will return in the Australian market.

The fund manager says the All Ordinaries ASX share continues to leverage the strength of its balance sheet to “tactfully” acquire a number of assets, which will help keep earnings momentum going within the business.

Last month, Credit Corp confirmed that it had completed the deal to buy the New Zealand ledger book of Collection House Limited (ASX: CLH) after buying the Australian ledgers in December 2020.

WAM is “positive” on the outlook of the business, with a number of medium-term growth drivers for its US PDL and global lending businesses.

The post 2 compelling All Ordinaries ASX shares this fund manager likes appeared first on The Motley Fool Australia.

More reading

• WAM Capital’s ASX founder has been buying shares. Here’s what we know
• 13%? Why some ASX LICs have such high dividend yields
• 2 ASX shares rated ‘buy’ by this top fund manager

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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The South32 Ltd (ASX: S32) share price is pushing higher on Tuesday.

In afternoon trade, the mining giant’s shares are up 1.5% to $4.46.

This means that South32’s shares are now up 50% since this time last year.

Can the South32 share price keep rising?

While the South32 share price has been flying over the last 12 months, one leading broker still sees scope for it to keep rising from here.

According to a recent note out of Goldman Sachs, its analysts have a conviction buy rating and $5.70 price target on the company’s shares.

Based on the current South32 share price, this implies potential upside of 28% for investors over the next 12 months.

But it gets better. Goldman believes South32’s free cash flow generation will be strong, allowing it to pay big dividends in the coming years. It is forecasting a fully franked 27.5 US cents per share dividend in FY 2022 and then a 47.3 US cents per share dividend in FY 2023.

Based on current exchange rates, this equates to 40 cents per share and 67 cents per share dividends, which represent yields of 9% and 15%, respectively.

Why is Goldman bullish?

Goldman Sachs has named three reasons why it is bullish on the South32 share price.

It commented:

Valuation: The stock is trading at c. 0.95x NAV (A$5.10/sh) including the completion of the acquisition of a 45% stake in the Sierra Gorda copper mine in Chile.

Strong FCF outlook: We forecast a FCF yield of c. 18% in FY23 (over 25% at spot), driven mostly by exposure to base metal price momentum.

Increased capital returns: We assume the buyback continues to be extended (at ~US$200mn p.a) and assume S32 resets its balance sheet metrics (we think targeting US$0-800mn net debt through the cycle based on our view of suitable balance sheet leverage) pays out 60% of earnings (40% ordinary, 30% special dividend component) with the FY22 result. On our estimates, S32 is on a dividend yield of c. 8-13% in FY22-FY24.

The post Broker names 3 reasons the South32 share price could be cheap appeared first on The Motley Fool Australia.

More reading

• 2 high-yield ASX 200 dividend shares to fight inflation according to brokers
• 2 ASX 200 dividend shares to buy according to a top broker
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Why did the South32 share price beat the other ASX 200 miners today?
• Broker says South32 share price is great value and one of the ‘best’ options for investors

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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