Tag: Motley Fool

ASX dividend stock KMD Brands Ltd (ASX: KMD) has suffered heavily. It’s down 13% this year, 36% in the last year and 60% from October 2021.

That’s painful for the ASX retail share. It’s interesting to me that this retail company is down so much when various others have risen strongly in the last few weeks or months like Wesfarmers Ltd (ASX: WES), JB Hi-fi Limited (ASX: JBH), Lovisa Holdings Ltd (ASX: LOV), Myer Holdings Ltd (ASX: MYR), Premier Investments Limited (ASX: PMV) and Temple & Webster Group Ltd (ASX: TPW).

Still, I think KMD Brands could pay significant passive income in a year or two.

KMD Brands is the business behind the businesses of Kathmandu, Rip Curl and Oboz. In other words, its products are for the outdoors when it’s cold, the outdoors when it’s hot and for hiking.

What’s going wrong?

KMD Brands reported in December 2023 a trading update that group sales were down 12.5% year over year, reflecting “ongoing weakness in consumer sentiment”.

The ASX dividend stock has had trouble beating its comparable sales after record sales in FY23. Wholesale sales for Rip Curl and Oboz have declined, with retailers reducing inventory holdings in the short term.

At the time of the update, the company said its group underlying earnings before interest, tax, depreciation and amortisation (EBITDA) for FY24 to date was $16 million lower than last year.

One of the positives from that update was that the overall gross profit margin improved, with “operating costs well controlled and actively managed”.

It also advised that its group working capital had decreased 10.2% year over year – it’s making progress towards its target of 18% of sales for the full year, which the company is expecting to drive strong cash flow generation in the second half.

How big could the dividends be?

When the share price of an ASX dividend stock falls, it boosts the prospective dividend yield. For example, when an ASX share with a 5% dividend yield falls 10%, the yield becomes 5.5%. A company can avoid this becoming a potential dividend trap as long as its fundamentals are sound.

I think KMD’s earnings can rebound in FY25 and beyond when retail conditions hopefully improve, particularly if interest rates fall. Demand for KMD’s products may not be as consistent as food demand at Woolworths Group Ltd (ASX: WOW), but I think KMD Brands can still make a decent profit in FY24 and then recover in the subsequent years.

Commsec forecast numbers suggest it can make earnings per share (EPS) of 6.5 cents in FY25 and 8.3 cents in FY26, putting it at 9.5x FY25’s estimated earnings and 7.5x FY26’s estimated earnings.

The low price/earnings (P/E) ratio means the future payouts could be huge. At the current KMD share price, it could pay dividend yields of 7.6% in FY25 and 9% in FY26, according to Commsec.

If the company’s earnings can rebound (in the next couple of years) I think there’s a good chance the ASX dividend stock could deliver strong outperformance at these levels.

The post 1 ASX dividend stock down 60% to buy right now appeared first on The Motley Fool Australia.

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More reading

• 6 oversold ASX shares to buy in February 2024

Motley Fool contributor Tristan Harrison has positions in Lovisa and Temple & Webster Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Lovisa, Temple & Webster Group, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Wesfarmers. The Motley Fool Australia has recommended Jb Hi-Fi, Lovisa, Premier Investments, and Temple & Webster Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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I love investing in ASX shares that have lots of growth potential. Of course, we’d love all of our investments to be big winners. There’s one factor that I think can really help.

When I look at some of the better performers in the S&P/ASX 100 (ASX: XTO) over the last decade, I’m thinking about names like CSL Ltd (ASX: CSL), Macquarie Group Ltd (ASX: MQG), Aristocrat Leisure Limited (ASX: ALL), WiseTech Global Ltd (ASX: WTC), Cochlear Limited (ASX: COH), Xero Ltd (ASX: XRO), Goodman Group (ASX: GMG) and Altium Limited (ASX: ALU).

There’s one element they all have in common.

International growth

The one thing that ties all of those businesses together is that they have significant international growth earnings and can grow a lot more globally.

Australia and New Zealand are great countries, but we’re talking about a total population of around 32 million. There are billions more potential customers in other countries, or lots of other businesses and governments, for ASX shares to tap into.

Xero would probably be a lot smaller without its northern hemisphere subscribers and the possibility of more growth there.

Macquarie would likely be a much smaller investment bank without its operations in other regions.

WiseTech would probably be a smaller software business if it only dealt with the Australian and New Zealand divisions of the global logistics businesses.

Goodman would probably be smaller without the ability to build warehouses beyond the domestic markets it’s in here.

Businesses that have a good product or service, and can successfully take that overseas, give themselves a much bigger growth runway because of the larger total addressable market.

Look for the next ASX share winners

The market is very aware of the growth story of the ASX 100 share names that I’ve already talked about. They can continue to do well, but they’re certainly priced for the success they’re expected to achieve in the short term.

I think some of the next big winners will be ones that have smaller market capitalisations but the ability to become much larger thanks to their addressable market and the trajectory they’re headed in.

That’s why I like names like Lovisa Holdings Ltd (ASX: LOV), Johns Lyng Group Ltd (ASX: JLG), Frontier Digital Ventures Ltd (ASX: FDV), Airtasker Ltd (ASX: ART), Siteminder Ltd (ASX: SDR) and Close The Loop Ltd (ASX: CLG).

But there are plenty of others that could deliver on their international growth potential.

The post I think this ONE factor gives ASX shares a huge chance to make big returns appeared first on The Motley Fool Australia.

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More reading

• ASX passive income: How much should you invest to earn $1,000 every month?
• Top brokers name 3 ASX shares to buy next week
• ASX dividend shares: What’s better, growth or consistency?
• 2 sizzling-hot ASX stocks to buy right now
• CBA could be eyeing record profits if first-half results echo the past

Motley Fool contributor Tristan Harrison has positions in Altium, Close The Loop, Johns Lyng Group, and Lovisa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium, CSL, Cochlear, Frontier Digital Ventures, Goodman Group, Johns Lyng Group, Lovisa, Macquarie Group, SiteMinder, WiseTech Global, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Airtasker. The Motley Fool Australia has positions in and has recommended Macquarie Group, SiteMinder, WiseTech Global, and Xero. The Motley Fool Australia has recommended CSL, Close The Loop, Cochlear, Frontier Digital Ventures, Goodman Group, Johns Lyng Group, and Lovisa. 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 Pinnacle Investment Management Group Ltd (ASX: PNI) share price has climbed more than 40% from 27 October 2023.

Happily, I invested at around that time and have shared in this sizeable 40% return from the S&P/ASX 200 Index (ASX: XJO) stock.

I’ll admit that part of me – the part that wants to avoid potential losses (loss aversion) – has been wondering whether to take profits off the table. Locking in 40% in three months is an excellent annualised return.

But I think the company has a lot more long-term growth potential. Plus, there’s no need to pay capital gains tax prematurely.

For readers unfamiliar with this ASX 200 stock, it helps quality fund managers start their own funds management businesses.

Pinnacle takes a stake in a new funds business (affiliate) and then helps with a variety of services, including seed funds under management (FUM) and working capital, distribution and client services, middle office and fund administration, compliance, finance, legal, technology and more.

What’s left for the fund managers to do? The most important thing: investing for clients.

The company’s recent FY24 first-half result highlighted a number of reasons why I’m staying invested and why I think it’s a buy.

Continuing outperformance

Pinnacle says that 81% of affiliate 5-year strategies had outperformed their respective benchmarks as at 31 December 2023, which is underpinning ongoing performance fee contributions. That shows the quality of the underlying managers.

In the HY24 result, performance fees contributed $12.3 million of Pinnacle’s net profit (up from $0.9 million in the FY23 first half).

Ongoing dividend strength

The ASX 200 stock has increased its dividend payouts almost every year since 2016, apart from COVID-impacted 2020, when it maintained its dividend.

Pinnacle also it maintained its dividend payout in its HY24 results, though I expect dividend growth in the annual result if it continues the level of performance it’s achieving.

FUM growth

Aggregate affiliate FUM rose 9% to $100.1 billion over the six months to 31 December 2023, which was an increase of $8.2 billion in dollar terms.

In HY24, it experienced net inflows of $4.5 billion (compared to outflows of $1.5 billion in HY23), with $1.8 billion of retail inflows.

As FUM rises, it can lead to growing management fees, which are more consistent than performance fees.

Growth initiatives

The ASX 200 stock is seeing ongoing international expansion in both affiliates and distribution. Newer affiliates in both the United Kingdom and North America are experiencing “early success”.

Adding new affiliates, existing affiliates starting new funds, and growing its distribution presence into new areas – these activities expand the growth runway and increase the FUM potential.

When I add all of that together, I think Pinnacle shares can keep growing from here over the longer term.

The post I’ve made 40% in 3 months on this ASX 200 stock, I still think it’s a buy appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Monday
• Here’s how the ASX 200 market sectors stacked up this week
• Here are the top 10 ASX 200 shares today
• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Tristan Harrison has positions in Pinnacle Investment Management Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Pinnacle Investment Management Group. The Motley Fool Australia has positions in and has recommended Pinnacle Investment Management Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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There are a lot of ASX-listed exchange-traded funds (ETFs) that investors can choose from. iShares Global 100 ETF (ASX: IOO) is one way to gain diversification and own global winners.

I think Aussies need a certain amount of international exposure in their portfolios. The Australian share market is great, but there are a lot of other great businesses out there.

Some ASX ETFs provide enormous diversification, owning more than 1000 holdings. We don’t necessarily need to own a huge amount — just enough for good diversification but not to reduce the potential return performance.

100 leaders

The iShares Global 100 ETF invests in 100 of the biggest companies in the world. I think 100 businesses is a good number for strong diversification.

We’re talking about businesses like Microsoft, Apple, Nvidia, Amazon.com, Alphabet, Eli Lilly, Mastercard, ASML, Samsung, Toyota, Walmart, LVMH, Caterpillar, BHP Group Ltd (ASX: BHP), HSBC, Siemens and Unilever.

Many are the best in the world, or among the best, at what they do.

Pleasingly, the ETF’s biggest allocation is to the IT sector, which I think has the strongest potential for returns due to margins and no physical limitations to software.

Geographic diversification

It’s good to see some geographic spread of holdings beyond the United States in the iShares Global 100. Countries with a weighting of more than 2% include the United Kingdom, Switzerland, France, Japan and Germany.

Of course, there’s more to it than just where the business is listed. The underlying companies within this ASX ETF don’t just generate revenue in one country, such as the US. They make money globally, which means they offer global earnings diversification.

For example, Apple and Microsoft are company giants that generate revenue in almost every country.

Strong returns

The iShares Global 100 ETF has performed very strongly over the longer term, though past performance is no guarantee of future returns.

The IOO ETF has returned an average of 16.7% per annum over the past five years, which is a very pleasing rate of wealth-building.

The names within the portfolio are likely to keep changing over time, but as a group, I think they can keep doing well. These are the biggest businesses in the world making the biggest profits. I believe can keep making returns from their economic moats and large scale.

Ultimately, investing is about making returns, and this is a good option, in my opinion.

The post Want to invest in global winners? I’d buy this ASX ETF appeared first on The Motley Fool Australia.

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More reading

• The pros and cons of buying ANZ shares right now
• Why Bell Potter says these ASX small cap shares are buys
• 3 ASX shares that could soar thanks to the RBA
• Brokers say these ASX mining shares are strong buys in February
• 16% gross yield: The 3 hottest high-dividend ASX stocks to buy right now

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. HSBC Holdings is an advertising partner of The Ascent, a Motley Fool company. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ASML, Alphabet, Amazon, Apple, Mastercard, Microsoft, Nvidia, and Walmart. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended HSBC Holdings and Unilever Plc and has recommended the following options: long January 2025 $370 calls on Mastercard and short January 2025 $380 calls on Mastercard. The Motley Fool Australia has recommended ASML, Alphabet, Amazon, Apple, Mastercard, and Nvidia. 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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ANZ Group Holdings Ltd (ASX: ANZ) shares have gone on an impressive run in the last month, rising by 7%. In the same time period, the S&P/ASX 200 Index (ASX: XJO) has lifted 2%.

It seems that 2024 has been kind to ASX bank shares so far. Is this a good time to invest in ANZ?

Positives about investing in ANZ shares

Inflation in Australia is heading in the right direction, which could lead to benefits in a number of ways.

Lower inflation typically reduces the spending burden of other expense categories for household and business borrowers, making it more likely they can afford their repayments.

If inflation continues to fall, it will hopefully prompt the Reserve Bank of Australia (RBA) to cut interest rates. If that happens, it could reduce the risk of borrowers defaulting on their mortgage payments.

Lower interest rates could also have the positive impact of boosting the price/earnings (P/E) ratio at which investors are willing to buy ASX shares, including ANZ stock. Interest rates are meant to act like gravity on asset prices, so if rates go lower, asset prices could generally go higher.

ANZ shares could still pay an impressive dividend yield because the P/E ratio is still quite low compared to other sectors. According to Commsec, the ANZ share price is valued at 13x FY24’s estimated earnings. And it could pay a grossed-up dividend yield of 8.4%.

And the negatives

The ANZ share price has jumped despite a projection that net profit after tax (NPAT) is going to fall in FY24.

It’s still facing a lot of competition from non-bank lenders and other ASX bank shares, including Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB) and Macquarie Group Ltd (ASX: MQG). Heightened competition could continue to push down on margins.

Banks are also having to compete hard for customer funds with appealing savings accounts for households. They are having to pay back the cheap COVID-era funding that was prompted by the RBA.

Due to its size and the nature of the industry, I’m not sure how quickly ANZ may be able to grow its profit from here.

Income-seekers may like the bank, but it’s not the sort of company I’m looking to buy for strong growth returns in my portfolio.

The post The pros and cons of buying ANZ shares right now appeared first on The Motley Fool Australia.

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More reading

• 3 ASX 200 dividend shares to buy with great yields
• How to build a bulletproof ASX 200 passive income portfolio with just $10,000
• Which Big Four ASX bank share will pay the biggest dividend this year?
• Buy ANZ and these ASX dividend stocks now
• Better ASX bank buy: ANZ or NAB shares?

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

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Investors with a higher than average tolerance risk might want to check out the ASX small cap shares listed below.

That’s because they have been tipped as buys with potential to rise strongly from current levels. Here’s what you need to know about them:

Cettire Ltd (ASX: CTT)

This rapidly growing online luxury products retailer’s shares could be in the buy zone still despite more than doubling in value over the last 12 months.

That’s the view of analysts at Bell Potter, which responded to the ASX small cap share’s half year results by retaining their buy rating with an improved price target of $4.80. This implies potential upside of 15% for investors over the next 12 months. The broker said:

We think CTT’s ability to outperform their peer group far outweighs others given the ~0.9% market share and further supported by the current consolidation the luxury ecommerce market. We also view CTT’s current EBITDA margins ahead of other ecommerce players with minimum risk associated with the drop-ship inventory model. We retain our BUY recommendation.

IPD Group Ltd (ASX: IPG)

Bell Potter is also feeling bullish about this small cap ASX share.

IPD is a distributor of compliant and innovative electrical infrastructure products with value-add custom-made solutions. Bell Potter believes it has a major long-term opportunity with electric vehicle charging and data centres. It said:

Electrification is emerging as a dominant market narrative and IPD Group is strongly leveraged to this growth trend through its supply of ‘low voltage’ electrical equipment that reduces the energy use of buildings and infrastructure. IPD has delivered two years of 15-20% organic growth since listing and we think 2024 is shaping up to be another strong year driven by continued ABB market share wins and a growing presence in data centres

Bell Potter has a buy rating and $5.75 price target on its shares. This implies potential upside of 19% for investors from current levels.

The post Why Bell Potter says these ASX small cap shares are buys appeared first on The Motley Fool Australia.

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More reading

• Bell Potter says this rocketing small cap ASX share can keep climbing
• Why Cettire, Dexus Industria, Pilbara Minerals, and Zip shares are jumping today
• Cettire share price rockets 40% on ‘exceptional result’
• 2 ASX growth stocks that could turn $10,000 into $30,000 by 2030
• $20,000 in savings? Here’s how I’d try to turn that into $1,463 a month of passive income

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 Ipd Group. The Motley Fool Australia has recommended Cettire and Ipd Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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High interest rates have impacted demand for a number of companies. I’m going to write about three ASX shares that I think could see a recovery if and when the Reserve Bank of Australia (RBA) starts cutting interest rates.

Some ASX companies have done remarkably well despite the headwinds they’re facing. I think a fall in the interest rates may mean earnings are boosted and investors are willing to pay for a higher price/earnings (P/E) ratio.

Here’s why I’m optimistic about these three ASX shares.

Beacon Lighting Group Ltd (ASX: BLX)

Beacon Lighting describes itself as a leading national and international provider of innovative, technologically advanced and energy-efficient lighting and cooling solutions. It may be best known for lighting, but it also claims to have the largest range of fans in Australia. Many of the company’s product ranges are exclusive to Beacon.

I think lower interest rates could spur demand for household renovation and construction, which could flow into demand for Beacon products.

Beacon also has a sizeable and growing international division – this is exciting because of the scale of the markets in North America and Asia. If Australian rates fall, it could weaken the Australian dollar, which would increase the value of those international sales in Australian dollar terms.  

According to the forecast on Commsec, the Beacon Lighting share price is valued at 19x FY24’s estimated earnings.

Reece Ltd (ASX: REH)

Reece claims to be Australia’s largest plumbing and bathroom supplies business. It has an expansive network of showrooms in Australia, and it also has a growing presence in the United States after an acquisition a few years ago. Reece is also involved in irrigation, pools, HVAC and civil works in Australia.

The ASX share is another name that could benefit from a recovery in renovation and construction activity in Australia (and the US) if central bank interest rates fall.

Reece is planning to open between 10 to 15 branches per year in the US, which could be a useful tailwind for earnings (and be boosted by a weaker Australian dollar if rates fall). The company is working on non-plumbing network expansion in Australia and New Zealand.

From the outside, Reece appears to be well-managed, and in three to five years, I think the business could be making a lot more profit.

According to the forecast on Commsec, the Reece share price is valued at 42x FY24’s estimated earnings.

Metcash Limited (ASX: MTS)

Metcash is a diversified business with food, liquor and hardware earnings. It supplies independent retailers around the country including IGA supermarkets, Cellarbrations, The Bottle-O, IGA Liquor, Porters Liquor, Thirsty Camel, Big Bargain Bottleshop and Duncans.

What excites me most about this business is the hardware division, which includes Total Tools, Home Timber & Hardware and Total Tools. It also supports independent operators under the small format convenience banners Thrifty-Link Hardware and True Value Hardware. I believe this division can benefit substantially if interest rates are cut by the RBA.

While the hardware operations aren’t as strong as Bunnings, I think they are worthy competitors. The Metcash share price is only trading at 13x FY24’s estimated earnings, according to Commsec. I think this is a low P/E ratio for the quality of the business.

The ASX share also recently announced the acquisitions of Superior Food (a leading Australian foodservice distribution business), Bianco Construction Supplies (a business operating in SA and NT), and Alpine Truss (one of the largest frame and truss operators in Australia). These companies can help diversify and grow earnings.

The post 3 ASX shares that could soar thanks to the RBA appeared first on The Motley Fool Australia.

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More reading

• Why Champion Iron, Core Lithium, Metcash, and West African shares are sinking
• These 3 ASX 200 shares just got some big broker upgrades!
• Why are Metcash shares tumbling today?
• Metcash shares paused for $325m capital raising to fund Superior Food acquisition
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor Tristan Harrison has positions in Metcash. 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 Metcash. 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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There are a lot of options for investors to choose from in the Australian mining sector.

So much so, it can be hard to decide which ones to buy over others.

To narrow things down, I’ve picked out two ASX mining shares that are highly rated by brokers right now. Here’s what they are saying about them:

Chrysos Corporation Ltd (ASX: C79)

While Chrysos isn’t a miner, it works closely with mining giants as a provider of novel assay services.

Bell Potter is very positive about its technology, PhotonAssay, highlighting its competitive advantage over traditional assaying techniques. The broker has a buy rating and $8.50 price target on its shares. It commented:

We believe C79’s disruptive PhotonAssay technology will command a significant foothold within the large gold assaying market (BPe 25% market penetration by FY30), with current lease agreements providing good near-term deployment visibility. These lease agreements with some of the largest gold miners and international laboratory businesses provide third-party technical and commercial validation for PhotonAssay technology adoption, which we expect to support further industry take-up.

South32 Ltd (ASX: S32)

This diversified miner could be a top option for investors according to analysts at Morgans.

Its analysts see major upside potential for the ASX mining share over the next 12 months with their add rating and $4.75 price target. The broker commented:

S32 has transformed its portfolio by divesting South African thermal coal and acquiring an interest in Chile copper, substantially boosting group earnings quality, as well as S32’s risk and ESG profile. Unlike its peers amongst ASX-listed large-cap miners, S32 is not exposed to iron ore. Instead offering a highly diversified portfolio of base metals and metallurgical coal (with most of these metals enjoying solid price strength). We see attractive long-term value potential in S32 from de-risking of its growth portfolio, the potential for further portfolio changes, and an earnings-linked dividend policy.

The post Brokers say these ASX mining shares are strong buys in February appeared first on The Motley Fool Australia.

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More reading

• ‘Start building a position’: 3 ASX shares to pounce on right now
• Why did this ASX All Ords stock sink 6% after a high growth quarter?
• Why Adriatic Metals, Chrysos, Coronado, and Nanosonics shares sinking today
• Here are the top 10 ASX 200 shares today
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Chrysos. The Motley Fool Australia has positions in and has recommended Chrysos. 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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Australia is blessed with many quality dividend stocks, with a bunch of shares on the ASX right now paying up more than 10% yield.

That’s some pretty handy passive income.

However, investors do need to do their research and be careful about stock selection.

IG Australia market analyst Hebe Chen warned that a high dividend yield doesn’t automatically make a stock a worthy investment.

“A ‘yield trap’ to avoid is parking your money in a stock that offers a seemingly attractive yield despite having weak financial fundamentals, which can erode the total value of your capital,” Chen told The Motley Fool.

“When a company either increases its dividend beyond the norm or experiences a rapid decline in share price, it can create the illusion of a high yield.”

Keeping this in mind, Chen named three dividend stocks on the ASX that she would be tempted to buy at the moment:

The geese laying golden dividends

Helia Group Ltd (ASX: HLI) is a finance company that provides lenders’ mortgage insurance.

The business has been going well, with the half-year ending last June showing a 32% improvement in the underlying net profit after tax (NPAT).

And it shows in the stock performance.

“Helia offers a 16% gross dividend yield, while its stock prices have delivered a 72% one-year return and a remarkable 223% three-year return,” said Chen.

Helia’s 2023 full-year results will be revealed on 27 February.

Fortescue Ltd (ASX: FMG) has been making hay with the global iron ore price surprisingly buoyant over the past year.

“Fortescue offers an 8.91% gross dividend yield, with its stock prices recently reaching an all-time high,” Chen said.

“FMG’s share price [has] increased by 27% in the past 52 weeks and an astonishing 600% since 2019.”

BSP Financial Group Ltd (ASX: BFL) is a name rarely discussed, but it is a $3 billion player on the ASX.

The business is, in fact, the largest bank in Papua New Guinea, and the dividend stock has been very rewarding to its investors in recent times.

“BSP Financial’s gross dividend yield was 9.75% in the past financial year, with its stock price jumping 32% from early last year and 51% over the past two years.”

Chen reminded investors that harvesting high dividends is “a balancing act”. 

“For investors seeking sustainable passive income and a stress-free investment journey, it’s crucial not only to check the dividend yield but also to consider the stock’s past performance as the essential criteria.”

The post 16% gross yield: The 3 hottest high-dividend ASX stocks to buy right now appeared first on The Motley Fool Australia.

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More reading

• How to build a bulletproof ASX 200 passive income portfolio with just $10,000
• Shares vs. property: Beginner investors choosing Aussie shares, ASX ETFs and rentvesting
• Which major ASX mining share will pay the biggest dividend this year?
• Are investors underestimating ASX iron ore big-wigs this earnings season?
• Up by 55%, is it too late to buy Fortescue shares?

Motley Fool contributor Tony Yoo 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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Are you an income investor looking for ASX 200 dividend shares to buy? If you are, then you might want to read on.

That’s because listed below are three top income shares that analysts are recommending as buys.

Here’s what you need to know about them:

ANZ Group Holdings Ltd (ASX: ANZ)

If you’re wanting exposure to the banking sector then ANZ could be a top ASX 200 dividend share to buy.

Goldman Sachs is very positive on ANZ due to its strong-performing institutional operations. It currently has a buy rating and $27.85 price target on its shares.

As for dividends, the broker is forecasting fully franked dividends per share of $1.62 in both FY 2024 and FY 2025. Based on the current ANZ share price of $27.68, this will mean dividend yields of 5.9%.

Centuria Industrial REIT (ASX: CIP)

Another ASX 200 dividend share that has been given the seal of approval by analysts is Centuria Industrial.

It is Australia’s largest domestic pure play industrial property investment vehicle with a portfolio of high-quality industrial assets.

UBS is positive on the company and last week retained its buy rating and $3.71 price target on its shares.

In respect to income, the broker is expecting Centuria Industrial to pay dividends per share of 16 cents in both FY 2024 and in FY 2025. Based on the current Centuria Industrial share price of $3.35, this represents yields of 4.8% in both years.

Telstra Group Ltd (ASX: TLS)

A final ASX 200 dividend share that analysts are bullish on is telco giant Telstra.

Goldman Sachs has a buy and $4.65 price target on its shares. It likes the company’s low risk earnings and dividend growth over the coming years.

Speaking of the latter, Goldman is forecasting fully franked dividends of 18 cents per share in FY 2024 and then 19 cents per share in FY 2025. Based on the current Telstra share price of $3.98, this equates to fully franked yields of 4.5% and 5%, respectively.

The post 3 ASX 200 dividend shares to buy with great yields appeared first on The Motley Fool Australia.

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More reading

• 3 things ASX investors should watch this week
• How to build a bulletproof ASX 200 passive income portfolio with just $10,000
• 10 time-wasters that could destroy your ASX investments
• 5 ASX shares to buy and hold forever in your investment portfolio
• This tiny ASX tech share is leaping 25% after striking a deal with Telstra

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

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