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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

The crypto sell-off continued today, as investors continued to shun riskier assets amid high levels of inflation and the Federal Reserve’s ongoing tightening of its monetary policy. The entire cryptocurrency market recently lost $200 billion in a single day.

Over the last 24 hours, the price of the world’s largest cryptocurrency, Bitcoin (CRYPTO: BTC), traded down roughly 2.5% as of 12:57 p.m. ET. The price of Bitcoin is currently hovering below $30,000. The world’s second-largest cryptocurrency, Ethereum (CRYPTO: ETH), had fallen more than 9%, with the price of one token now around $2,000. Finally, the meme token Dogecoin (CRYPTO: DOGE) traded about 5% lower.

So what

The Fed has now raised its overnight benchmark lending rate, the federal funds rate, by roughly 0.75% in just two meetings, including a full half-point move at its latest meeting. When interest rates rise, so do the yields on safer assets like U.S. Treasury bills, which are backed by the U.S. government. This leads investors to demand higher returns from riskier assets and turn away from riskier assets if they don’t see a path to those higher returns.

Additionally, the Fed has indicated that it will begin reducing its $9 trillion asset balance sheet and will eventually ramp up to running off $95 billion of bonds by September. This will effectively remove liquidity for the markets, which means there could be less money to support riskier assets and higher valuations. Although many believe Bitcoin could be a hedge for inflation given its finite supply of 21 million tokens, the thesis has not played out so far and Bitcoin has acted similarly to tech and growth stocks, taking an absolute beating this year. The price of Bitcoin is down close to 55% over the last six years, and some think more difficulties lie ahead.

“My chart picture is calling for a fall to the $17,000 region and Bitcoin would need to close above $33,000 to give pause for thought,” said Oanda analyst Jeffrey Halley, according to Barron’s.

Broader crypto concerns have also arisen due to issues with stablecoins, which are digital assets pegged to some kind of commodity or fiat currency. One of the more notable ones, TerraUSD (CRYPTO: UST), which is pegged to the U.S. dollar and is therefore supposed to trade around $1, has seen its price plunge to below $0.30 per token, which is a huge red flag.

TerraUSD is an algorithmic stablecoin, meaning it is not actually backed by any real-world assets but uses complex technology, coding, and algorithms to maintain its price of around $1. TerraUSD’s sister token, Terra (CRYPTO: LUNA), which is important for helping it maintain its peg to the dollar, has billions of reserves in Bitcoin.

“I think the market is expecting some forced selling [of Bitcoin] here on the part of Terra and the reserve,” Nic Carter, co-founder of Coin Metrics, told CNBC earlier this week. “It is a calamity but very expected. No algorithmic stablecoin has ever succeeded and this is no exception.”

Now what

Whether it’s inflation, the Fed’s unwinding of its balance sheet, or the chaos with TerraUSD and Terra, the crypto market is in a very precarious state right now and investors are rushing to safety.

While I have no idea how low the crypto market will go, I definitely expect Bitcoin and Ethereum to survive and be good long-term buys, given that these are the two most important cryptocurrencies and that crypto adoption continues to move forward.

I suspect Dogecoin will be around as well but have never seen it as a good investment and do not recommend it. 

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

The post Crypto crash: Why Bitcoin, Ethereum, and Dogecoin are struggling again appeared first on The Motley Fool Australia.

More reading

• Is this the start of a long crypto winter?
• How are Australia’s Ethereum and Bitcoin ETFs faring on their first day?
• Why Dogecoin and Shiba Inu are tumbling today
• Bitcoin price plunges below US$30,000. What’s going on?
• Why Ethereum, Solana, and Cardano all plunged today

Bram Berkowitz has positions in Bitcoin and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin and Ethereum. The Motley Fool Australia owns and has recommended Bitcoin, Ethereum and Luna. 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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The Bigtincan Holdings Ltd (ASX: BTH) share price is on the rise on Friday morning.

At the time of writing, the sales enablement automation platform provider’s shares are up 10% to 57.5 cents.

Why is the Bigtincan share price jumping?

Investors have been bidding the Bigtincan share price higher today after the company released a business update.

That update reveals that the company has signed a deal with tech giant Oracle, has set itself a cash flow breakeven target, and is on track to achieve its guidance in FY 2022.

In respect to the former, Bigtincan has signed a partnership with Oracle to join the Oracle Partner Network. This this program allows Bigtincan to create new technology offerings that work on the Oracle Cloud and integrate with existing Oracle solutions including Oracle CRM.

The release notes that the integration with Oracle allows sales reps to view client information from Bigtincan, create custom presentations, and send data to Oracle systems for updates.

This adds to Bigtincan’s Salesforce partnership and increases its addressable market to 24% of the global CRM market.

Cash flow target

Given how hard unprofitable tech shares have been hit during recent market volatility, news that management believes it can reach cash flow breakeven in the near future is likely to have been a boost to the Bigtincan share price.

Bigtincan has set a target of being cash flow breakeven in the FY 2023 year. And with a cash balance of $45.5 million at the end of March, it appears to have more than enough funds to see it through to that point.

FY 2022 guidance

Based on current planned new product releases, continuing logo wins, and upselling to its expanded existing customer base in the fourth quarter, Bigtincan believes it is on track to meet or exceed its FY 2022 guidance of $119 million in annual recurring revenue.

It also highlights that there are encouraging signs of increased cross sell and upsell opportunities in the Brainshark customer base.

The company’s CEO and Co-Founder, David Keane, said:

Building on the strong Q3 results, and with Bigtincan’s recurring revenue business continuing to grow in Q4, based on our multi-hub product strategy, and together with scale gained from the Brainshark acquisition we are seeing ongoing benefits for the short and longer term outlook.

The post Here’s why the Bigtincan share price is jumping 10% today appeared first on The Motley Fool Australia.

More reading

• Cash bonanza: Here’s why the Bigtincan share price is leaping 8%
• Is this opportunity knocking? 3 ASX shares hitting 52-week lows today

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

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The Xero Limited (ASX: XRO) share price is rebounding this morning following a savage selloff on Thursday.

At the time of writing, the cloud accounting platform provider’s shares are up 4% to $80.11.

Why is the Xero share price rebounding?

The Xero share price is rebounding on Friday amid a recovery in the tech sector and the release of a bullish broker note.

According to a note out of Goldman Sachs, its analysts have retained their buy rating but trimmed their price target on the company’s shares by 11% to $118.00.

Based on the current Xero share price, this implies potential upside of 47% for investors over the next 12 months.

What did the broker say?

Goldman notes that Xero’s full-year results fell a touch short of its expectations on nearly all key metrics.

However, it still saw enough in the result to remain positive on the future. For example, its analysts highlight that price rises have not had a negative impact on churn levels.

Xero continues to scale in all markets, with +17% annualized sub growth and positive momentum in all geographies (albeit slightly weaker than GSe). Despite recent price rises, Xero also delivered a better than expected churn outcome, highlighting the stickiness of the customer (and pricing power that Xero has).

The broker also note the strong organic growth the company is delivering and the early progress with its app store. The latter is something which Goldman has previously suggested could be a big boost to future revenues.

Organic growth in platform revenues accelerated (+37%/+49% in 1H/2H22) driven by increased invoice payments (Mar-22 +41% vs. PcP), Payroll & initial app store fees (although still small). We estimate +$14mn of organic platform revenue was added in 2H, which if sustained, will contribute +2.1% of ARPU growth into FY23.

Finally, Goldman was pleased to see that management is guiding to improved margins in FY 2023. This is despite investing for growth.

Despite the companies global growth aspirations, positive FCF and $1.1bn of liquidity, Xero still guided to an improved margin in FY23 of c.300-400bps. Although needing to ensure an adequate ROI (particularly in the Americas – we estimate +21% underlying growth in 2H22 vs. +15% in 1H22) we are comfortable with this balance between short & long term focus, and note: (1) XRO proved its strong operating leverage in 1H21; (2) Positively, R&D spend is now in-line with marketing; (3) Improvement in all cost lines is expected over time.

Foolish takeaway

Based on the above, Goldman appears to see the recent weakness in the Xero share price as a buying opportunity. I would have to agree given its strong long-term growth outlook and the points outlined by the broker.

The post Xero share price rebounds: Is now the time to invest? appeared first on The Motley Fool Australia.

More reading

• Why Block, IDP Education, Monash IVF, and Xero shares are dropping
• Thursday thrashing: ASX tech shares tumble
• ASX 200 midday update: CBA’s Q3 update impresses, Xero and Block crash
• Xero share price sinks 10% to 52-week low following FY22 results miss
• Xero share price in focus amid strong FY22 revenue growth but full-year loss

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Some ASX growth shares are now looking really good value, according to some experts.

Volatility continues to be elevated on the ASX share market. Lower prices can mean investors get to buy businesses at a better value.

Here are two that experts now think offer large upside:

Airtasker Ltd (ASX: ART)

Airtasker describes itself as Australia’s leading online marketplace for local services, “connecting people and businesses who need work done with people who want to work”.

The company’s main customer base is currently in Australia. However, it’s rapidly growing in the UK and the US as well.

In the third quarter of FY22, Airtasker saw US marketplace-posted task growth of 90%, quarter on quarter. It is focused on four key cities in the US: Atlanta, Dallas, Kansas City, and Miami. However, it’s also seeing other marketplaces emerging in non-core cities.

In the UK, the ASX growth share’s third-quarter gross marketplace volume (GMV) increased 138% year on year.

Overall, the business saw third-quarter GMV growth of 24.9% to $51.5 million.

In the first half of FY22, the company saw a gross profit margin of 93%. A high gross profit margin means the business can re-invest most additional revenue into further growth initiatives.

How good value is the Airtasker share price? It has fallen by 60% over the last six months to 41 cents. Morgans rates it as a buy with a price target of $1.15. That implies a possible rise of around 180% over the next year. It likes that the company is managing to keep growing despite the wider economic issues that are happening.

City Chic Collective Ltd (ASX: CCX)

This ASX growth share specialises in retailing plus-size clothing, footwear, and accessories to women.

The company may be best known for its City Chic brand, which has a local store network. City Chic also has partnerships with various businesses in the northern hemisphere.

However, the company also has a large and growing presence in the northern hemisphere with businesses that it has acquired over time. In the UK, it owns the Evans brand. Avenue is its main business in the US. In Europe, City Chic wants to grow the Navabi business.

City Chic has a focus on growing its business through online channels. In the first half of FY22, the company said that 77% of its sales over the prior 12 months were online. In the actual half-year period, online comparable sales rose by 52.5%, with an 83% online penetration rate.

The ASX growth share points to a US$180 billion total global plus-size market, with a forecast that it will grow by around 7% annually. City Chic says there are increasing rates of plus-size women globally and the average annual spend on ‘plus-size’ is currently “materially less” than the rest of the women’s apparel market.

For the first 17 weeks of the second half of FY22, it reported “strong” total sales growth of 25% year on year, with US total sales growth of 47%. Australian online sales were up 13%. Second-half earnings before interest, tax, depreciation, and amortisation (EBITDA) is expected to be higher than the first half.

It’s currently rated as a buy by the broker Macquarie, with a price target of $6.70. That implies a possible rise of around 160%. That’s after the City Chic share price has fallen almost 60% over the past six months to $2.55. Macquarie likes the growth that the business is achieving and things seem good for the longer term.

According to Macquarie, the City Chic share price is valued at 14x FY23’s estimated earnings.

The post Buy these great value 2 ASX growth shares: experts appeared first on The Motley Fool Australia.

More reading

• Why is the Airtasker share price edging higher today?
• Airtasker share price dives 6% as trading resumes
• Analysts say these small cap ASX shares have big futures
• Airtasker share price on ice amid major acquisition news
• Best ASX shares to buy in May 2022

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 recommended Airtasker Limited. 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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Iron ore giant Rio Tinto Limited (ASX: RIO) is likely to cut its 2022 dividend after paying a whopping $5.3 billion payout to shareholders in the last financial year.

But the miner will remain one of the best dividend yielding shares on the S&P/ASX 200 Index (ASX: XJO), according to brokers’ forecasts.

Conditions were perfect for Rio Tinto to pay a record regular and special dividend of US$10.40 ($14.23) a share in FY2021. This is thanks to high iron ore prices and relatively low capex requirements.

Rio Tinto’s 2022 dividend cut

Many of the tailwinds remain and cash is still spilling out of its coffers – although at a slower pace. This means Rio Tinto’s dividends have probably peaked – at least for the next few years.

The analysts at Macquarie Group Ltd (ASX: MQG) are forecasting a dividend payment of US$9.38 for the financial year.

While that represents a close to 10% cut to the FY2021 dividend, the 20% tumble by the Rio Tinto share price means its shares are sitting on a dividend yield of around 13% for financial year 2022 (on today’s exchange rate).

Throw in franking credits and this lifts its gross yield to 19%.

Will Rio Tinto appeal to income investors?

But ASX mining shares don’t typically make good income shares as their dividends can be volatile.

This is certainly the case for Rio Tinto. The expected easing in the iron ore price from its current elevated levels will see its dividend continue to fall.

Macquarie is forecasting Rio Tinto’s dividend to come in at US$6.52 per share in FY2023 and US$5.58 in the following year.

Varying dividend forecasts

However, Credit Suisse is more cautious in its assumptions. The broker is tipping the 2022 Rio Tinto dividend of US$7.72 a share. This puts the miner’s dividend yield at 10.7% if franking credits are included.

Credit Suisse’s lower dividend estimate is based on its more sombre outlook for Rio Tinto’s earnings. The broker is forecasting adjusted earnings per share (EPS) of US$9.58 when consensus is standing at US$12.08.

Is Rio Tinto a good dividend share to buy in 2022?

Nonetheless, the Rio Tinto share price still represents good value, according to Credit Suisse. It is recommending the shares as outperform with a 12-month price target of $138 a share.

Macquarie is also upbeat about the miner. It too rates the Rio Tinto share price as outperform with a 12-month price target of $140 a pop.

The post How big will the Rio Tinto dividend be in 2022? appeared first on The Motley Fool Australia.

More reading

• Why are ASX 200 mining shares in the green today?
• Why are ASX 200 mining share prices slipping today?
• The Rio Tinto share price has dumped 8% in a week. Is it now cheap?
• Which ASX 200 mining shares were the worst-performing on Friday?
• Why is the Rio Tinto share price stretching down a further 3% on Friday?

Motley Fool contributor Brendon Lau has positions in Macquarie Group Limited and Rio Tinto Ltd. 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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Commodity prices may be rocky lately, but could this S&P/ASX 200 Index (ASX: XJO) mining share go higher?

The Nickel Mines Ltd (ASX: NIC) share price has dropped 12% in the past week. For perspective, the S&P/ASX 200 Resources Index (ASX: XJR) has slid 5% in a week.

Let’s take a look at the outlook for this ASX 200 mining share.

Undervalued share

The Nickel Mines share price is undervalued, according to Fidelity Australian Opportunities Fund portfolio manager Kate Howitt.

In comments reported by the Australian Financial Review, Howitt said:

The company’s output will roughly triple over the next few years, making it one of the few resources companies not needing commodity prices to do the heavy lifting of earnings growth. 

The company’s latest quarterly showed a great outcome on both production and margins; a few more quarterlies like that and the risk discount in the shares will be squeezed out.

The Nickel Mines share price jumped in late April amid the company’s quarterly results. Nickel Mines shares leapt 6% on 28 April after the company reported record earnings before interest, taxes, depreciation, and amortisation (EBITDA) of US$81.7 million, an 18.7% rise.

The company also sold US$7,386 per tonne of nickel, a 22.5% increase on the previous quarter.

Nickel Mines shares were turbulent in March during the “nickel squeeze”, as my Foolish colleague Zach reported.

However, on 24 March, the team at Bell Potter predicted the Nickel Mines share price could rise 40% in the next 12 months.

Nickel Mines share price snapshot

The Nickel Mines share price has climbed 6% over the past 12 months, but it has descended 22% year to date.

For perspective, the ASX 200 Resources Index has lost almost 4% in the past year but gained roughly 2% year to date. The benchmark ASX 200 has lost less than 1% over the past year.

Nickel Mines has a market capitalisation of about $3 billion based on the current share price.

The post Is this ASX 200 mining share set to surge, regardless of commodity prices? appeared first on The Motley Fool Australia.

More reading

• These were the best performing ASX 200 shares last week
• Here are the top 10 ASX shares today
• Nickel Mines share price lifts following record quarter
• What’s happening to ASX nickel shares today?

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

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It has been a tough couple of weeks for the Macquarie Group Ltd (ASX: MQG) share price, falling by 15%.

The financial service provider released its full year results on 6 May, reporting double-digit increases across its key metrics. However, this wasn’t enough to stop the bloodshed with its shares falling 7.78% on the day.

Nonetheless, the board opted to increase its upcoming final dividend to eligible investors.

Let’s take a look below at what you need to know in regards to the latest dividend.

What’s the deal with the Macquarie final dividend?

The Macquarie share price has backtracked recently as investor vented out their disappointment following the company’s financial scorecard.

The company is set to pay out $3.50 per share to wrap up the FY22 year ending 31 March 2022. That’s 4.5% higher than last year’s final dividend of $3.35 per share paid to shareholders.

Furthermore, the payout ratio for the latest dividend is at 50% (in line with the target range of 50% – 70% of the company’s profit).

The higher dividend came on the back of the company recording a 56% lift in net profit after tax (NPAT) to $4,706 million. In the previous period (FY21), the group achieved NPAT of $3,015 million.

When can shareholders expect to be paid?

Macquarie will pay the final dividend to eligible shareholders on 4 July.

However, to be eligible you’ll need to own Macquarie shares before the ex-dividend date which falls on Monday 16 May. This means if you want to secure the dividend, you will need to purchase the company’s shares by the close of business today.

It is worth noting that on the ex-dividend day, the share price traditionally falls in proportion to the dividend amount.

In addition, the dividend is 40% franked which means that investors will receive some tax credits for this.

Currently, Macquarie has a dividend trailing yield of 3.37% and a market capitalisation of roughly $69.87 billion.

The post Hoping to bag the next Macquarie dividend, here’s what you need to do appeared first on The Motley Fool Australia.

More reading

• Time is running out to secure dividends from these 3 ASX 200 shares
• Leading brokers name 3 ASX shares to sell today
• Leading brokers name 3 ASX shares to buy today
• Macquarie share price tumbles 4% to 9-week low. Is it time to pounce?
• Why Macquarie, REA, Temple & Webster, and Xero shares are sinking

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 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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Washington H Soul Pattinson & Co Ltd (ASX: SOL) shareholders will have something to cheer about today as the company pays out its latest dividend.

The investment house is rewarding eligible investors with a fully franked interim dividend of 29 cents per share.

At Wednesday’s market close, the Soul Patts share price finished 3.27% lower to $26.34.

For context, the S&P/ASX 200 Index (ASX: XJO) also headed south yesterday with a 1.75% loss to 6,941 points.

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

Soul Patts pays out interim dividend

Soul Patts delivered a solid performance for its first-half results for the 2022 financial year in March.

In summary, Soul Patts reported strong numbers despite its statutory net profit after tax (NPAT) recording a loss of $643 million.

Major contributors to the top line result were New Hope Corporation Limited (ASX: NHC), Brickworks Limited (ASX: BKW), and Round Oak Metals as well as higher dividends from the large-cap equities portfolio. The latter increased by roughly $2.7 billion due to the Milton acquisition which was completed on 5 October 2021.

The biggest win for shareholders came from the board’s decision to increase the interim dividend by 11.5% over H1 FY21.

Net cash flow from investments stood at $182.6 million, up 114% on the prior corresponding period which supported the higher dividend.

Notably, this reflected one of the highest first-half dividends in the history of Soul Patts.

When calculating against the current share price, the company is trailing on a forecast dividend yield of 2.35%.

Soul Patts share price snapshot

This year to date, the Soul Patts share price has fallen 11% on the back of weakened investor sentiment. It is also down around 10% over the past 12 months.

A series of market shocks such as the Omicron lockdown, the war in Ukraine, and steep inflationary movements haven’t helped the company.

Nonetheless, the group previously noted it has ample firepower on its balance sheet to purchase attractive investments during market downturns.

Soul Patts has a price-to-earnings (P/E) ratio of 23.53 and commands a market capitalisation of roughly $9.5 billion.

The post The Soul Patts dividend is being paid today. Here’s what you need to know appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Friday
• Why did the South32 share price beat the other ASX 200 miners today?
• 2 ASX 200 shares clocking multi-year highs on Thursday
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Blockdown! Why is the Block share price crashing by 16% today?

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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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Are you interested in adding some ASX growth shares to your portfolio this month? If you are, you may want to look at the two listed below that have recently been named as buys.

Here’s what you need to know about these ASX growth shares:

Breville Group Ltd (ASX: BRG)

The first ASX growth share to look at is Breville. It is a leading appliance manufacturer behind a range of brands that have been very popular with consumers for many years. Combined with its investment in research and development and its global expansion, this has helped underpin consistently solid sales and earnings growth.

The good news is that this is expected to continue in FY 2022. In fact, a recent presentation reveals that Breville expects its earnings before interest and tax (EBIT) in FY 2022 “to be consistent with the markets’ consensus forecast of ~$156m.” This will be a 14.3% increase from FY 2021’s EBIT of $136.4 million.

Morgans is a very positive on Breville. The broker currently has an add rating and $32.00 price target on its shares.

Webjet Limited (ASX: WEB)

Another growth share for investors to look at is online travel agent, Webjet. For obvious reasons, it has been hit incredibly hard by the pandemic. The good news, though, is that it has started to bounce back as the travel market recovers.

In fact, Goldman Sachs expects the company to report a small EBITDA profit when it releases its FY 2022 results next week. Goldman has forecast FY 2022 revenue of $143.6 million and EBITDA of $1.5 million.

After which, with the wind firmly back in its sails, the broker is expecting a material lift in EBITDA to $155.4 million in FY 2023 and then a 32.8% jump to $206.4 million in FY 2024.

In light of this, its analysts believe investors should be buying the company’s shares now with a long term view. Goldman currently has a buy rating and $6.90 price target on Webjet’s shares.

The post Here are 2 ASX growth shares experts have named as buys appeared first on The Motley Fool Australia.

More reading

• Broker says Webjet share price is a buy ahead of its FY22 results
• Own Webjet shares? Here’s what to expect from next week’s FY22 results
• Will Webjet pay a dividend in 2022?
• Are ASX 200 travel shares already fully valued in May?
• These are the 10 most shorted ASX shares

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 Webjet Ltd. 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 Fortescue Metals Group Limited (ASX: FMG) share price could be a consideration given how large of a potential dividend yield the ASX mining share is going to pay in FY22.

Fortescue is one of the world’s largest iron ore miners, alongside BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO). It has a few different mining hubs in Australia including Chichester, Solomon, and Western.

The relatively high dividend payout ratio of the business and relatively low price-to-earnings (p/e) ratio means that it normally has a large dividend yield.

How big is the Fortescue dividend going to be in FY22?

Each analyst has a different view on how large the Fortescue dividend yield will be in the current financial year.

Based on the forecast on Commsec, Fortescue could pay a grossed-up dividend yield of 14%.

However, one of the latest brokers to have their say on Fortescue has been Credit Suisse, which has estimated a grossed-up dividend yield of 16% in FY22 and then 18.4% in FY23.

One of the reasons for the large dividend expectations is that the iron ore price has been higher than at the end of 2021.

Credit Suisse is expecting the iron ore price to remain stronger for longer because of lower production by the large miners, which is affecting the relationship between global supply and demand. The broker thinks Fortescue’s lower grade iron ore will see a smaller discount compared to higher grade iron in the coming months.

In the first half of FY22, Fortescue declared a fully franked interim dividend of 86 cents per share, representing a dividend payout ratio of 70% of the net profit after tax (NPAT).

Is the Fortescue share price a buy?

For Credit Suisse, the broker is currently ‘neutral’ on the business, with a price target of $20. That implies a small potential rise over the next year on the current price of $19.01.

Other brokers have less optimistic price targets. For example, Morgan Stanley currently has an ‘underweight’ rating on the business with a price target of just $15.95. It noted the increasing cost of Iron Bridge – this is the project Fortescue is involved in that will produce high-grade iron ore.

Some analysts are also focusing on the large potential cost of the projects that Fortescue Future Industries (FFI) is working on, including green hydrogen. FFI is the green segment of Fortescue that is trying to decarbonise Fortescue and help reduce emissions in sectors that are hard to decarbonise. The uncertainty of the costs is seen as a negative.

FFI also recently acquired a high-performance battery business called Williams Advanced Engineering. Fortescue said this business “provides critical technology and expertise in high-performance battery systems and electrification to increase Fortescue’s operational efficiency, lower maintenance costs, and accelerate the decarbonisation of its mining operations”.

WAE will also be a “significant” new global battery growth business for Fortescue, according to the company.

Fortescue share price snapshot

The Fortescue share price has fallen by 4% since the start of the 2022 calendar year and by 19% over the past 12 months.

The post Is the Fortescue share price a buy for its 16% dividend yield? appeared first on The Motley Fool Australia.

More reading

• Is the Fortescue Future Industries hydrogen dream more fantasy than feasible?
• Why is the Fortescue share price rebounding today?
• Why are ASX 200 mining shares in the green today?
• Why are ASX 200 mining share prices slipping today?
• Fortescue share price dives another 3%, down 12% in a week

Motley Fool contributor Tristan Harrison has positions in Fortescue Metals Group 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 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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