Tag: Motley Fool

Ask a Fund Manager

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In part 2 of this edition, Michael Steele, co-portfolio manager at Yarra Capital Management, unveils his two top ASX small-cap share picks at the outperforming Yarra Australian Small Companies Fund.

Motley Fool: What are the best ASX small-cap shares to buy right now?

Michael Steele: Those would also be the two biggest holdings in the UBS Yarra Australian Small Companies Fund, which are Austbrokers [AUB Group Ltd (ASX: AUB)] and Auckland International Airport Ltd (ASX: AIA).

MF: Why do you like Austbrokers?

MS: Austbrokers is an Australian and New Zealand insurance broking business. Its insurance broking market is highly attractive. You’ve got constant increases in premiums and the demand for the services is there because people need to manage complex risks.

In addition to that, Austbrokers has the benefit that they can take a greater share of industry profit. And that profit pool is large. They’re getting better pricing with underwriters; they’re reducing their costs by consolidating businesses; and they’re looking to add extra businesses to source product and get more of a vertical margin.

They’ve also got technology that’s really innovative. They’ve got some hidden value in one of their technology businesses, called BizCover. It’s a technology company that does the full SME insurance process online. So, it’s a digital disruptor with higher growth.

Austbrokers also has a strong track record executing on acquisitions and adding value.

MF: Auckland Airport shares took a hammering with the pandemic travel restrictions. Why is that a top ASX small-cap share recommendation and holding for you now?

MS: We are really quite positive on travel. If you think about the background for travel, everyone’s been effectively at home for at least two years, not being able to travel internationally, so there’s a lot of pent-up demand. Also, consumers have saved up a lot of cash during the COVID-19 period; savings rates are quite high.

If you put those two fundamentals together, we think there’s going to be a really strong period for travel over the next three to four years. We see significant demand coming through both across corporate and leisure. That will benefit Auckland Airport.

Auckland Airport really is an amazing asset. This is a monopoly asset in the north of New Zealand.

Effectively there are two parts to the business.

First, there are the aeronautical assets that have that recovery from travel. This also has a large opportunity to increase the earnings from their regulated asset base. So, they’ll see price increases and they can invest a lot of capital in expanding the airport. This is a great infrastructure investment where you keep investing and you keep getting a guaranteed return in addition to that cyclical recovery.

The second component of the business is their property portfolio, an amazing property portfolio adjacent to the airport. They’ve got industrial and they’ve got retail. But arguably they can add the most value through developing new properties. They have an undeveloped property portfolio of 180 hectares.

The company also has a strong balance sheet. If we see further disruptions and delays with the COVID recovery, they are able to see their way through that. More importantly, they can fund this capex property redevelopment from their balance sheet.

MF: If the market closed tomorrow for four years, which ASX small-cap share would you want to hold?

MS: We’d be happy to hold both of these companies if the market closed for four years.

Auckland Airport has the type of characteristics that you really can set and forget. You could say the same thing for this business with a 10-year view. That’s probably the one that would stand out the most.

We try to invest in every company for three to five years. We think there’s a time frame inefficiency within the market. A lot of people are focused on what’s happening in the next 12 months. If we think more about the next three to five years, we’re going to think differently to a lot of people in the market, resulting in outperformance.

We really do see that inefficiency with people chasing the short-term, which is why we stay long-term focused. That’s been a notable factor that’s supported our outperformance over the last six years.

**

Be sure to tune in tomorrow for part three of our interview with Yarra Capital’s Michael Steele. If you missed part one, you can find that here.

(You can find out more about the UBS Yarra Australian Small Companies Fund here.)

The post 2 compelling ASX small-cap shares to buy today: fund manager appeared first on The Motley Fool Australia.

More reading

• Why AUB, Block, BrainChip, and Pushpay shares are sinking
• Here’s why the AUB share price is tumbling 16% today
• AUB share price halted amid $880 million acquisition
• 2 ASX shares to buy you haven’t thought of: expert

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 Austbrokers Holdings Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/b4lzwo3

Are you looking for dividend shares to buy? If you are, then you might want to look at the shares listed below.

Here’s why these ASX dividend shares could be worth considering in May:

Dexus Industria REIT (ASX: DXI)

The first ASX dividend share that could be in the buy zone is Dexus Industria.

Dexus Industria, formerly known as APN Industria, is an industrial and office property company with a focus on properties that provide functional and affordable workspaces for businesses.

Morgans is very positive on the company and appears to believe it well-placed to deliver sustainable income and capital growth prospects for shareholders over the long term.

Its analysts are forecasting attractive dividends per share of 17.3 cents in FY 2022 and 17.6 cents in FY 2023. Based on the current Dexus Industria share price of $3.09, this will mean yields of 5.6% and 5.7%, respectively.

Morgans has an add rating and $3.65 price target on the company’s shares.

Westpac Banking Corp (ASX: WBC)

Another ASX dividend share that could be in the buy zone is Westpac.

Australia’s oldest bank has just released its half-year results for FY 2022 and revealed an 8% decline in revenue to $10,230 million, a 12% reduction in cash earnings to $3,095 million, and a 61 cents per share interim dividend. While on paper this doesn’t look great, it was actually ahead of the market’s expectations.

Another big positive from the result was that management continues to target a cost base of $8 billion by FY 2024. This was despite two of its peers admitting defeat on their own targets this month because of inflation.

This went down well with analysts at Citi and has them forecasting Westpac “delivering the strongest EPS growth in the sector” in the coming years. This is likely to bode well for dividends.

For example, Citi is forecasting fully franked dividends of 123 cents per share in FY 2022, 155 cents per share in FY 2023, and 180 cents per share in FY 2024. Based on the current Westpac share price of $24.65, this will mean yields of 5%, 6.3%, and 7.3%, respectively.

The broker also sees plenty of upside for the bank’s shares, with its buy rating and $29.00 price target.

The post 2 top ASX dividend shares experts rate as buys appeared first on The Motley Fool Australia.

More reading

• Westpac share price is a buy: Broker tips ‘strongest EPS growth in the sector’
• What’s the outlook for ASX 200 bank shares amid rising interest rates?
• 2 ASX dividend shares to buy this month: experts
• Here are the top 10 ASX shares today
• 3 ASX All Ordinaries shares that managed to post decent gains on Monday

Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. 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.

from The Motley Fool Australia https://ift.tt/sJU7CQv

On Tuesday, the S&P/ASX 200 Index (ASX: XJO) was out of form again and sank deep into the red. The benchmark index fell 1% to 7,051.2 points.

Will the market be able to bounce back from this on Wednesday? Here are five things to watch:

ASX 200 expected to edge lower

The Australian share market looks set for a subdued day on Wednesday following a mixed night in the US. According to the latest SPI futures, the ASX 200 is expected to open the day 7 points or 0.1% lower this morning. On Wall Street, the Dow Jones fell 0.25%, the S&P 500 climbed 0.25%, and the Nasdaq stormed 1% higher.

TechnologyOne rated as a buy

The TechnologyOne Ltd (ASX: TNE) share price could be great value according to analysts at Bell Potter. According to a note, the broker has retained its buy rating with a trimmed price target of $12.50. Later this month, Bell Potter expects the company to report software-as-a-service annual recurring revenue (ARR) growth of 38% to $215 million for the first-half of FY 2022.

Oil prices fall again

Energy producers such as Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a difficult day after oil prices tumbled again. According to Bloomberg, the WTI crude oil price is down 3.2% to US$99.76 a barrel and the Brent crude oil price has fallen 3.3% to US$102.45 a barrel. Economic worries and a strong US dollar weighed on prices.

AVZ Minerals shares to return

The AVZ Minerals Ltd (ASX: AVZ) share price is due to return from a trading halt this morning. This lithium developer requested the halt on Monday pending “the release of an announcement in relation to it’s (sic) mining and exploration rights for the Manono Lithium and Tin Project.” This announcement is likely to address concerns over its level of ownership of the project.

Gold price falls

Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could have a poor day after the gold price dropped overnight. According to CNBC, the spot gold price is down 1% to US$1,839.4 an ounce. The precious metal fell after the US dollar strengthened.

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

More reading

• Analysts name 2 profitable ASX growth shares with 40%+ upside
• Here are the top 10 ASX shares today
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• The Novonix share price just rebounded 13%. Is it a buy?
• Pendal share price surges as profit soars 60%

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.

from The Motley Fool Australia https://ift.tt/m0p9VsP

If you’re interested in adding some growth shares to your portfolio, then the two listed below could be top candidates.

Both these ASX growth shares are highly profitable and have been tipped to continue their strong growth long into the future.

Here’s what you need to know about them:

ResMed Inc. (ASX: RMD)

The first ASX growth share to look at is this sleep treatment focused medical device company.

Over the last decade, ResMed has been growing its sales and profits at a consistently strong rate thanks to increasing demand and its growing addressable market.

The good news is that the company still has a significant market opportunity to grow into, with the majority of sleep apnea sufferers still undiagnosed. In addition, the company has a large opportunity with its connected-care digital platform.

It is partly because of the latter than Morgans is very bullish on ResMed. It commented:

While we believe the next few quarters will likely be volatile, as Covid-related demand for ventilators continues to slow and core sleep apnoea volumes gradually lift, nothing changes our medium/longer term view that the company remains well-placed as it builds a unique, patient-centric, connected-care digital platform that addresses the main pinch points across the healthcare value chain.

Morgans currently has an add rating and $40.46 price target on its shares. Based on the current ResMed share price of $27.86, this implies potential upside of 45% for investors.

TechnologyOne Ltd (ASX: TNE)

Another ASX growth share that could be a quality option for investors is TechnologyOne. It is an enterprise software provider servicing the government, financial services, health and community services, education, and utilities and managed services markets.

TechnologyOne has recently shifted its focus to its software-as-a-service (SaaS) ERP solution, which delivers the TechnologyOne enterprise suite as a service through the cloud to customers.

This shift of focus has been going well, with the company reporting SaaS annual recurring revenue (ARR) growth of 43% to $192.3 million during the first-half. But management doesn’t expect it to stop there. It reiterated that it expects its annual recurring revenue (ARR) to reach $500 million by FY 2026.

Analysts at Goldman Sachs suspect that TechnologyOne could even outperform this target, noting that the risks are to the upside. It said:

In our view, TNE is well-placed to meet its A$500mn FY26 ARR target and we are more constructive than consensus and the market (as implied by TNE’s current share price). SaaS flip uplift, elevated inflation (via contractual CPI pass-through) and underlying business growth underpin our A$505mn FY26 ARR estimate, and we think risks are skewed to the upside with our estimates assuming modest organic growth ex-flip (~10%).

Goldman has a buy rating and $14.00 price target on the company’s shares. Based on the current TechnologyOne share price of $9.95, this implies potential upside of 40% for investors.

The post Analysts name 2 profitable ASX growth shares with 40%+ upside appeared first on The Motley Fool Australia.

More reading

• Broker names 2 of the ‘best’ blue chip ASX 200 shares to buy now
• Hoping to bag the Resmed dividend? Read this
• Guess which ASX 200 shares are defying today’s sell-off to climb higher
• Here’s why ASX 200 tech shares are having such a disastrous run on Friday
• 2 ASX 200 shares that analysts say are 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 recommended ResMed. The Motley Fool Australia has recommended ResMed Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/sopWD9U

On Tuesday, the Westpac Banking Corp (ASX: WBC) share price was a relatively positive performer.

While the banking giant’s shares only edged a modest 0.2% higher to $24.65, this was notably better than a 1% decline by the ASX 200 index.

Why did the Westpac share price defy the market selloff?

Investors were bidding the Westpac share price higher today after a number of brokers responded positively to the bank’s half-year results.

In case you missed it, on Monday Westpac reported an 8% decline in revenue to $10,230 million, a 12% reduction in cash earnings to $3,095 million, and a 61 cents per share interim dividend.

This compares favourably to the Visible Alpha consensus estimate for first-half cash earnings of $2.8 billion and an interim dividend of 59 cents per share.

Are its shares good value?

One leading broker that sees plenty of value in the Westpac share price is Citi.

In response to the bank’s half-year result, its analysts retained their buy rating and $29.00 price target.

Based on the current Westpac share price, this implies potential upside of 17.5% for investors. And if you throw in the 5% dividend yield the broker is forecasting in FY 2022 (rising to 6.3% in FY 2023), the total potential return stretches beyond 22%.

While Citi was pleased with the result, its main reason to celebrate was management’s decision to stick with its bold cost cutting target. Particularly at a time when its peers are abandoning their own.

Citi commented:

WBC surprised the Market by delivering 1H22 cash earnings of $3,095, representing a ~5% pre-provision profit beat. The feature of this result was the solid cost print driven by a ~2,500 reduction in permanent FTEs.

Unlike peers, management haven’t walked away from its FY24 cost base target of $8bn, as they had already incorporated 2.5% inflation. WBC’s revenue challenges also appear to moderating as the 2Q22 NIM (ex. Markets & Treasury) stabilised at 1.69%. A sharply higher 3 year swap rate will start to become a strong NIM tailwind from 2H22.

We have moved our FY22/23 EPS estimates up ~2-4% on this higher swap cost, but we have reduced our FY24 EPS by ~4% due to higher BDDs. We see the combination of higher revenue growth, as the cash rate rises, combined with a reducing absolute cost base, as delivering the strongest EPS growth in the sector. Maintain Buy.

The post Westpac share price is a buy: Broker tips ‘strongest EPS growth in the sector’ appeared first on The Motley Fool Australia.

More reading

• What’s the outlook for ASX 200 bank shares amid rising interest rates?
• Here are the top 10 ASX shares today
• 3 ASX All Ordinaries shares that managed to post decent gains on Monday
• Why BrainChip, PolyNovo, TPG, and Westpac shares are pushing higher
• These ASX shares pay you to own them

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. 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.

from The Motley Fool Australia https://ift.tt/wo8xGbM

Today, the S&P/ASX 200 Index (ASX: XJO) cemented its third straight day of consecutive losses. Unrest within the local share market followed another brutal fall in US equities on Wall Street last night. At the end of the session, the benchmark index finished 0.98% lower at 7,051.2 points.

Instead of tech shares being the main victim on the receiving end today, it was time for energy and mining companies to cop the brunt of selling pressure. Both oil and gold prices fell to the wayside overnight. Inevitably, companies associated with these commodities suffered during today’s showing.

However, the question is: which shares delivered the biggest returns to investors on the ASX today? Here are the top ten stocks that came through for investors:

Top 10 ASX shares countdown today

Looking at the top 200 listed companies, Iress Ltd (ASX: IRE) was the biggest gainer today. Shares in the financial services software company surged 5.66% despite there being no news or announcements. Find out more about Iress here.

The next best performing ASX share across the market today was REA Group Ltd (ASX: REA). The online real estate platform strengthened 5.48% with Citi analysts retaining their buy rating on the company yesterday. Uncover the latest REA Group details here.

Today’s top 10 biggest gains were made in these ASX shares:

ASX-listed company	Share price	Price change
Iress Ltd (ASX: IRE)	$11.20	5.66%
REA Group Ltd (ASX: REA)	$113.16	5.48%
Idp Education Ltd (ASX: IEL)	$25.52	5.06%
Xero Ltd (ASX: XRO)	$87.85	4.16%
WiseTech Global Ltd (ASX: WTC)	$40.96	4.14%
Seek Ltd (ASX: SEK)	$25.51	3.70%
GQG Partners Inc (ASX: GQG)	$1.42	3.65%
Dominos Pizza Enterprises Ltd (ASX: DMP)	$70.04	3.61%
Meridian Energy Ltd (ASX: MEZ)	$4.33	3.10%
Carsales.com Ltd (ASX: CAR)	$19.25	2.67%

Our top 10 ASX shares today countdown is a recurring end-of-day summary to ensure you know which companies were making big moves on the day. Check-in at Fool.com.au after the market has closed during weekdays to see which stocks make the countdown.

The post Here are the top 10 ASX shares today appeared first on The Motley Fool Australia.

More reading

• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• The Novonix share price just rebounded 13%. Is it a buy?
• Pendal share price surges as profit soars 60%
• Technophobia? Why ASX 200 tech shares are getting hammered again
• ASX shares are tumbling, but is it an actual stock market crash?

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 positions in and has recommended Idp Education Pty Ltd, WiseTech Global, and Xero. The Motley Fool Australia has positions in and has recommended WiseTech Global and Xero. The Motley Fool Australia has recommended Dominos Pizza Enterprises Limited, REA Group Limited, SEEK Limited, and carsales.com Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/fgT1mVJ

The S&P/ASX 200 Materials Index (ASX: XMJ) index may have suffered on the market today but one ASX battery metals share had a better day.

The Group 6 Metals Ltd (ASX: G6M) share price soared 20% to close trading at 21 cents today. In contrast, the ASX 200 Materials Index fell 2.38%.

Let’s take a look at why this ASX battery metals share could be having such a great day.

What’s happening at Group 6 Metals?

Group 6 Metals shareholders may be reacting to recent media coverage on the company. Group 6 revealed its tungsten mine is garnering interest from the United States. Tungsten is a critical rare metal with future application in anode materials in lithium-ion batteries.

Speaking to Four Corners, executive chairman Johann Jacobs said the company has had three meetings with the US embassy in 12 months. He added:

…and those discussions are continuing. At this stage, they don’t have any financial interest, but they certainly are very keen to see us progress and develop the mine because it’s another supply chain… from a friendly nation. 

The United States is taking interest amid China’s global dominance of the tungsten market, the ABC noted.

Group6 is planning to produce tungsten from the Dolphin Tungsten Mine on King Island, Tasmania. Construction at the mine commenced in late January. The company is redeveloping the mine and targeting first concentrate sales in the first quarter of 2023.

In a presentation to investors in May, the company said the mine is a “world-class quality deposit” that ranks better than its peers.

The company changed its ticker code on the ASX to G6M from King Island Scheelite Limited (ASX: KIS) in late November.

Share price snapshot

The Group 6 Metals share price exploded 45% year to date but it is down 4.55% in the past month.

In contrast, the benchmark S&P/ASX 200 Index (ASX: XJO) has shed 5% in the year to date.

This ASX battery metals share has a market capitalisation of more than $132 million.

The post This ASX battery metals share is rocketed 20% today. What’s going on? appeared first on The Motley Fool Australia.

More reading

• 3 quality ASX All Ordinaries shares that defied today’s sell-off
• Why does the Bendigo Bank share price often fare worse than the ASX big four in downturns?
• Do CSR shares have a dividend reinvestment plan?
• Why did the Hawsons Iron share price stage such a stunning comeback today?
• Guess which 2 ASX All Ordinaries shares smashed 52-week highs amid today’s carnage

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.

from The Motley Fool Australia https://ift.tt/wIzpFAd

Earlier this morning, the All Ordinaries Index (ASX: XAO) was down as much as 2.5%. Fortunately, some of those losses receded this afternoon. However, the vast majority of companies in the All Ords still ended in the red.

While days like today are painful to witness, it can be intriguing to see which companies are able to hold their ground against a wave of pessimism.

Interestingly, not all of the companies firmly in the green are large and established blue chips. However, there is one characteristic in common out of the ASX All Ordinaries shares that we are about to cover. Each of them is boasting a mound of cash and not a cent of debt — exactly what you might want in a rising interesting rate environment.

Serving up a few quality ASX All Ordinaries shares

Adore Beauty Group Ltd (ASX: ABY)

Go shopping online for some beauty or skincare products in Australia and Adore Beauty is a name that will pop up towards the top of the list.

The company has been growing rapidly on the top line over recent years, increasing 37% year over year to $196.22 million at the end of last year. However, the share price hasn’t followed the same trajectory since listing in October 2020.

This ASX All Ordinaries share is down 58% from a year ago. Though, investors might be cutting it some slack now thanks to its immaculate balance sheet with shares finishing 5.3% higher today. At the end of 2021, Adore Beauty recorded $25.07 million in cash and zero debt.

Temple & Webster Group Ltd (ASX: TPW)

Next in line is a once darling stock of the e-commerce sector, Temple and Webster. This company has built itself up since 2011 by being the pre-eminent Aussie online store for homewares and furniture. Unfortunately, falling profitability in the last year has stolen the wind behind the sails of the Temple and Webster share price.

However, investors were willing to forgive the company for this shortcoming today as the share price surged 6.6%. Much like Adore, this ASX All Ordinaries share has a stack of cash at its disposal for a rainy day. By the last count, the company held $105.5 million in cash and cash equivalents with no debt.

Aussie Broadband Ltd (ASX: ABB)

Aussie Broadband is another company that held onto the green side of the market today. The popular internet provider has been experiencing plenty of volatility lately but managed to climb 5.8% higher on Tuesday.

Investors found safety in the small-cap ASX All Ordinaries share today despite other telcos falling. Interestingly, this enthusiasm is on the back of a significant fall in the Aussie Broadband share price that occurred on 2 May. This was in response to reduced guidance shared by the company, knocking down previous expectations.

Once again, this is a company flush with cash. At the end of December 2021, Aussie Broadband held $168.2 million in cash with a clean slate in terms of debt.

The post 3 quality ASX All Ordinaries shares that defied today’s sell-off appeared first on The Motley Fool Australia.

More reading

• 2 quality ASX shares to buy in this volatility: experts
• 3 quality ASX All Ordinaries shares tumbling 10% or more today
• Why Macquarie, REA, Temple & Webster, and Xero shares are sinking
• The Temple & Webster share price is being crushed, down 14%
• 2 ASX growth shares that could be buys in May 2022

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 positions in and has recommended Aussie Broadband Limited and Temple & Webster Group Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia has recommended Adore Beauty Group Limited, Aussie Broadband Limited, and Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/78me63X

The Bendigo and Adelaide Bank Ltd (ASX: BEN) share price finished 0.87% lower to $10.28 at market close today.

In comparison, shares in National Australia Bank Ltd (ASX: NAB) and Westpac Banking Corp (ASX: WBC) gained 0.31% and 0.20% respectively.

Meanwhile, Commonwealth Bank of Australia (ASX: CBA) and Australia and New Zealand Banking Group Ltd (ASX: ANZ) fell 0.93% and 0.92% respectively.

The Bendigo Bank hasn’t released any price-sensitive news since its half-year results in mid-February. However, we take a look at what could be impacting the bank’s shares along with the latest broker notes.

Why did Bendigo Bank shares end up lower?

With heavy losses on Wall Street impacting the ASX today, the Bendigo Bank share price has not been spared.

It’s feared United States interest rate hikes to curb inflation could trigger a slowdown in global economic growth.

The US Federal Reserve is trying to limit inflation that is soaring at multi-decade highs.

Last week, the Federal Reserve announced its sharpest interest rate rise, 0.5%, in more than 20 years. It came on the back of a 0.25% hike in March.

In addition, the Russian war in Ukraine, as well as a Chinese slowdown, is piling on more pressure.

Bendigo Bank is much smaller in terms of market capitalisation compared to the big four. It can mean the company’s shares are more susceptible to wild price swings.

Indeed, shares in the regional bank spent much of the day faring worse than those of the ASX big four, trading as low as $10.03 at one stage, 3.28% lower than yesterday’s close.

However, Bendigo’s share price rallied later in the day to finish mid-pack among the big four today.

It’s also worth noting that in the company’s half-year results, management pointed to the following outlook:

Challenges in the form of margin compression and non-recurring other income are expected to drive revenue lower in the second half. Costs will need to decline for us to continue driving the cost-to-income ratio lower. Delivering positive jaws remains the intent of our executive team.

With the Reserve Bank of Australia also raising its interest rates, this could put pressure on costs for the regional bank.

What do the brokers think?

Following its results, a number of brokers weighed in on the Bendigo Bank share price.

The team at Goldman Sachs lifted its price target by 5.1% to $10.53 for the company’s shares.

Morgan Stanley upgraded its outlook to “equal-weight” from “underweight”. Furthermore, the broker improved its rating on Bendigo Bank shares by 1.1% to $9.60.

The last broker note came from Citi. Its analysts raised the Bendigo price target by 13% to $11. Based on the current share price, this implies a potential upside of around 7%, according to Citi’s assessment.

Bendigo Bank share price snapshot

Since the beginning of the year, the Bendigo Bank price has risen by almost 13%.

The bank’s shares were heavily sold off from August 2021 after reaching a 52-week high of $11.27. Since then, its shares hit a 52-week low of $8.43 in December 2021 before surging back up again.

On valuation grounds, Bendigo Bank commands a market capitalisation of around $5.8 billion.

The post Why does the Bendigo Bank share price often fare worse than the ASX big four in downturns? appeared first on The Motley Fool Australia.

More reading

• If you’d bought $10,000 of Bendigo Bank shares 10 years ago, guess how much you’d have now
• How big will the Bendigo Bank dividend be in 2022?
• How has the Bendigo Bank share price outperformed its ASX peers by 10% in 2022?

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 positions in and has recommended Bendigo and Adelaide Bank Limited. 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.

from The Motley Fool Australia https://ift.tt/qpznvM2

CSR Limited (ASX: CSR) has been a very long and steady presence on the S&P/ASX 200 Index (ASX: XJO). After all, this company was founded back in 1855. It is also known as a bit of an ASX dividend heavyweight since it has paid a biannual dividend every year since at least 1990 (with the exception of the COVID-dominated 2020).

As it stands today, CSR shares offer investors a substantial trailing dividend yield of 4.91%. That comes with full franking credits too, so that yield grosses up to an impressive 7%.

But for CSR shareholders, is receiving dividends in cash the only option? After all, many ASX 200 dividend shares also offer a dividend reinvestment plan (DRIP) to their investors. A DRIP means shareholders have the option of receiving their dividend in the form of new shares rather than cash. Many investors prefer this, as it can help to remove the hassle of organising a reinvestment of funds received in cash. Instead, the investment is put on ‘autopilot, and compounds away in the background.

Most ASX 200 blue-chip shares offer a DRIP. But does CSR?

Cash or cheque: Do CSR shares allow a dividend reinvestment plan?

Well, the answer is yes. At least it has been until this point. CSR currently does run a DRIP. The company last paid out a dividend back in December last year. At the time, investors were given the option to receive the interim dividend in cash, or to “reinvest all or part of their dividend entitlements in more shares”. Like most DRIPs, this reinvestment was not available with a discount.

Given CSR’s DRIP has been in operation for almost all of the past decade (again, with that 2020 exception), we can probably assume investors will continue to enjoy its availability into the future.

CSR shares have closed at $5.69 each, down 2.4%, today. At this share price, CSR has a market capitalisation of $2.76 billion.

The post Do CSR shares have a dividend reinvestment plan? appeared first on The Motley Fool Australia.

More reading

• Is the CSR share price fully valued in April 2022?
• How big will the CSR dividend be in 2022?
• Top broker warns this ASX 200 share may be next to issue a profit warning

Motley Fool contributor Sebastian Bowen 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.

from The Motley Fool Australia https://ift.tt/l6EUR1y