“Users tend to stick with the product. The business is capital-light and scalable,” Bromley said last week.
“The [share] price discount is attractive.”
This is not an energy stock, but will do well when oil prices surge
Lee nominated Incitec Pivot Ltd(ASX: IPL) as the other attractive stock at the moment.
The business makes chemical products like fertilisers and explosives. For Lee, the prospect of energy prices rising will give Incitec shares a handy catalyst.
“You know I’ve been a fan of fertiliser for a while, and one of the major costs of fertiliser is energy prices,” she said.
“As oil prices rise, you usually see fertiliser prices rising.”
Most other analysts agree with Lee. According to CMC Markets, eight out of 10 fund managers are rating the stock as a “strong buy”.
Incitec Pivot shares are already up 16% for the year so far, which is completely opposite to where the rest of the market has been heading.
Just this month, the share price has gained more than 24%.
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Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.
Motley Fool contributor Tony Yoo owns Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Xero. The Motley Fool Australia owns and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In this edition, Marcus Today portfolio manager Ben O’Leary reveals the lesson he learnt from the pandemic panic.
The ASX share for a comfortable night’s sleep
The Motley Fool: If the market closed tomorrow for four years, which stock would you want to hold?
Ben O’Leary: There’s one that jumps out to us here, and we unanimously love it here, and that is Macquarie Group Ltd (ASX: MQG).
It’s a pretty simple answer — they just have a track record of making money in almost any environment.
We can’t predict the future, we don’t know what will happen in the next four years. We can take educated guesses, but if you take us back in time to 2018, there’s no way you’d guess that we’d be where we are now after a pandemic and the [US Federal Reserve] rates being where they are and whatnot.
So rather than trying to guess the future, I’d rather invest in a company that will adapt for you and do the hard work.
BO: Yeah. They really do look at the landscape, and their sole goal is to make money. So if the environment changes and they’re not going to be as successful, then they change their tactic. They don’t just ride out waves, which I think if you’re talking about something that you can have your money in and not be able to get it out for a few years, that’s the kind of team that I’d want paying my money.
Looking back
MF: Is there a move that you regret from the past? For example, a missed opportunity or buying a stock at the wrong timing or price.
BO: I think probably everyone learned a lot throughout the COVID period. Unprecedented was the key word that everyone was talking about.
The thing that we learned was not trying to catch trends in the short term. The volatility that came through the market was just enormous. And, honestly, it looked like there was a lot of opportunity to get some quick gains on things as they were rotating around. But in the market, things were literally rotating in a matter of days and weeks, rather than months and years, like they normally do. So things like travel and retailers running giant swings on the back of health numbers and then government incentives.
We know now that it’s better to look through that short term and let the peaks and troughs play out, rather than trying to catch them and getting burnt if your timing is slightly off. In the really fast market, you don’t have time to set yourself properly. And then by the time you have set yourself, the tide’s turned and you’ve ended up blowing the top.
So it was just a really good lesson of just let the short-term stuff fly by, keep that long-term focus. Well, for us, that’s what it is. If you’re a trader, it’s different. But we’ve got a three to five year timeline, so keep that focus, look through the short-term and stick to the investment process. Don’t try and catch the latest trend.
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Motley Fool contributor Tony Yoo owns Macquarie 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 recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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On Wednesday, the S&P/ASX 200 Index (ASX: XJO) had another good day and stormed higher. The benchmark index rose 0.7% to 7,514.5 points.
Will the market be able to build on this on Thursday? Here are five things to watch:
ASX 200 expected to rise
The Australian share market looks set to edge higher on Thursday despite a poor night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 15 points or 0.2% higher this morning. In late trade on Wall Street, the Dow Jones is down 0.5%, the S&P 500 is down 0.9%, and the Nasdaq has tumbled 1.4%.
Ramsay rated as a buy
The Ramsay Health Care Limited (ASX: RHC) share price could be in the buy zone according to Goldman Sachs. This morning the broker retained its buy rating and $74.00 price target on the private hospital operator’s shares. Goldman said: “With restrictions continuing to ease across all major markets, RHC is seeing a stronger, albeit uneven, volume development through 2H22 to date.”
Oil prices rebound
It could be a good day for energy shares including Santos Ltd (ASX: STO) and Woodside Petroleum Limited(ASX: WPL) after oil prices charged higher overnight. According to Bloomberg, the WTI crude oil price is up 3.25% to US$107.63 a barrel and the Brent crude oil price is up 2.45% to US$112.92 a barrel. Tight supply and the prospect of new Russian sanctions boosted prices.
Shares going ex-dividend
The shares of auto retailer Eagers Automotive Ltd(ASX: APE) and retail giant Harvey Norman Holdings Limited(ASX: HVN) are going ex-dividend this morning and are likely to trade lower. Eligible shareholders can now look forward to receiving their fully franked dividends of 42.5 cents per share and 20 cents per share, respectively, on 20 April and 2 May.
Gold price rises
It could be a good day for gold miners Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) after the gold price pushed higher. According to CNBC, the spot gold price is up 1% to US$1,937.4 an ounce. A weaker US dollar gave the precious metal a boost.
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Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.
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. owns and has recommended Harvey Norman Holdings Ltd. The Motley Fool Australia owns and has recommended Harvey Norman Holdings Ltd. The Motley Fool Australia has recommended Ramsay Health Care Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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ASX 200 bank shares had a ripping day, all closing in the green a day after the federal budget.
The Macquarie Group Ltd (ASX: MQG) share price climbed 2.1% today, while National Australia Bank Ltd(ASX: NAB) hiked 0.84%.
Let’s take a look at what may have impacted ASX banking shares today.
ASX 200 bank shares rise
ASX bank shares all closed higher today. The Westpac Banking Corp(ASX: WBC) share price gained 0.91% while Commonwealth Bank of Australia (ASX: CBA) finished up 0.66%. Meanwhile, Bendigo and Adelaide Bank Ltd(ASX: BEN) climbed 0.39% and Bank of Queensland Ltd (ASX: BOQ) closed 0.35% higher. The Australia and New Zealand Banking Group Ltd(ASX: ANZ) share price rise was more modest at 0.04%.
Accordingly, the S&P/ASX 200 Financials Index (ASX: XFJ) also had a positive day on the ASX today, jumping 0.88%.
The team at Switzer predicted the federal budget would be a positive for banks in a video recorded last night. Commenting on the outlook for banks, Peter Switzer said:
If you’ve got a strong spending consumer, it’s going to be good for our banks as well. So the momentum we’ve seen in the banks in recent times will also be helped by this budget.
However, the federal budget has also sparked fears of inflation due to the high government debt. But, as my Foolish colleague Zach recently reported, the prospect of rising interest rates could be “a huge positive” for the banks.
Certainly, expectations of future high interest rates policies have increased, Reserve Bank of Australia governor Philip Lowe said recently.
Meantime, financial regulators have warned banks to not let lending standards fall amid predicted interest rate rises.
The Council of Financial Regulators is concerned about high-risk mortgage lending, the Sydney Morning Herald reported.
The Council said:
It is important that lending standards are maintained and that borrowers have adequate buffers, especially in an environment in which housing loan interest rates are at historically low levels and are expected to rise over time in line with the economic recovery
ASX 200 bank shares snapshot
NAB shares have surged nearly 25% in the past year while Commonwealth Bank shares have also gained around 25%. ANZ shares have slipped 0.78% in that time while the Macquarie share price has increased nearly 38%. However, Westpac shares have improved only marginally in the past 12 months by 0.62%.
In comparison, the S&P/ASX 200 Financials Index (ASX: XFJ) has pulled ahead almost 14% in the past year. Meantime, the benchmark S&P/ASX 200 Index (ASX: XJO) has gained around 12%.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and wasn’t one of them.
The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Bendigo and Adelaide Bank 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 Bruce Jackson.
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The first ASX growth share to look at is Lovisa. It is a fast-fashion jewellery retailer which has been growing at a rapid rate over the last decade. Pleasingly, this strong growth looks unlikely to stop any time soon. This is due to management’s bold global expansion plans, which has analysts at Morgans very excited.
Morgans has an add rating and $24.00 price target on its shares. It believes that “LOV may just prove to be one of the biggest success stories in Australian retail.”
Another growth share to look at is the global leading provider of elastic interconnection services. Using software defined networking (SDN), Megaport’s global platform allows users to rapidly connect their network to other services across the Megaport Network. Services can then be directly controlled by customers via mobile devices, their computer, or its open API.
Goldman Sachs is very bullish on Megaport and has a buy rating and $19.90 price target on its shares. The broker believes Megaport’s “opportunity for further growth is immense (GSe A$129bn p.a. spent on fixed enterprise networking across MP1 geographies).”
A final ASX growth share to look at is document productivity software company Nitro Software. It is aiming to drive digital transformation with its Nitro Productivity Suite, which provides integrated PDF productivity and electronic signature tools to customers big and small.
Goldman Sachs is also a very big fan of Nitro and has a buy rating and $2.60 price target on its shares. It commented: “We estimate Nitro can increase its TAM penetration from 0.15% to 1.4% by FY40 implying 9x uplift to Nitro’s current revenue base.”
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Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.
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. owns and has recommended Goldman Sachs and MEGAPORT FPO. The Motley Fool Australia has recommended Lovisa Holdings Ltd, MEGAPORT FPO, and Nitro Software Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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Markets are rangebound today with the benchmark S&P/ASX 200 Index (ASX: XJO) trading 79 basis points higher at 7,523.
Brent Crude has levelled off and now trades at US$110.87 a barrel whereas the world’s safe haven, gold, has climbed 3.75 points to US$1,922/t.oz.
Investors often use these kinds of macro indicators to stipulate the present nature and future direction of both financial markets and the real economy.
One other leading indicator is known as the yield curve, a graphical representation of the interest rates (yields) on government bonds.
What is the yield curve?
Governments around the world finance their budgets and large capital works by issuing various types of debt in the capital markets.
The instruments are either known as bills, notes or bonds, depending on the maturity lengths of this debt. These range from 1-month bills, 10-year notes, all the way up to 30-year bonds, just to name a few.
Each of these government bonds has a quoted yield – or return – that investors will realise depending on the bond’s price. There is an inverse relationship between price and yield.
The yield curve simply plots the current yield of all these bonds, at their various maturities. When talking about US Treasury Bonds, it is known as the US yield curve, same in Australia, and so on.
Take a look at the current shape of the yield curve, by plotting the current yields against their maturities, below (reference, one is to ignore the x-axis).
Slope of the yield curve
The shape, or slope, of the yield curve is incredibly important information for investors in the quest to understand ‘what could come next’.
Ideally, the curve is sloping upwards, as seen above, because investors expect economic conditions to be better in the future – hence they will accept a lower yield today, in exchange for a higher yield in the future.
That’s why, in the chart above, we see the US 10-year yield higher than the 2-year, and the yield on 30-year bonds higher than the 10-year, and so on.
A steepening curve generally is a sign of stronger economic conditions, meaning higher inflation and potentially higher interest rates to accompany it.
Whereas a flattening curve generally indicates the opposite – a slowing of the economy. Hence, the outlook – or yield – into the future looks less promising in this scenario.
Why’s that even matter?
Market pundits analyse certain portions of the curve to make informed decisions about the economy, sectioning it into the short end, the belly (middle), and the long-end of the curve.
They also look at the spreads between two bonds – most commonly, the yield on US 10-year minus 2-year issues – known as the US 2s/10s spread. There are many others.
Which brings us to an inverted yield curve. When the yield curve inverts, it slopes downwards, meaning investors reckon the future looks less bright than it does today.
Fixed income expert Frank Fabozzi notes that market pundits pay particularly close attention to the US 2yr/10yr spread as a leading indicator of a potential economic recession, in his book, The Handbook of Fixed Income Securities.
According to Reuters, “the 2s/10s part of the curve inverted, meaning yields on the 2-year Treasury were actually higher than the 10-year Treasury,” on Tuesday.
“That is a warning light to investors that a recession could follow,” it added.
“The last time the 2s/10s part of the yield curve inverted was in 2019. The following year, the United States entered a recession – albeit one caused by the global pandemic”.
Bloomberg Intelligence adds more flavour, noting that in every recession since 1955, the US yield curve has inverted each time just beforehand.
“The 2s/10s inversions, on the other hand, preceded the last eight recessions, including 10 of the last 13, according to BoFA Securities in a research note,” Reuters also commented. On around 80% of occasions, a recession followed between 6–24 months.
Meanwhile, Alfonso Peccatiello, former portfolio manager of the $20 billion fixed income portfolio at ING Markets, and editor of The Macro Compass newsletter, suggests that the US Overnight Index Swaps (OIS) curve might be a cleaner and more useful measure.
“Basically, OIS swaps tell you where the fixed income market consensus expects Fed Funds rates to move over a fixed period of time,” he recently wrote in a note to subscribers.
“The most recent [interest rate] hiking cycles have lasted on average around 2-5 years (1986-1989, 1994-2000, 2004-2007, 2015-2019) and traders’ expectations are therefore reflected in 2 to 5 years OIS rates,” he added.
“That makes 2s/10s, 5s/30s or similar OIS curve slope combinations pretty decent and forward looking macro indicators”.
Not all are convinced on the downbeat view of things
Which brings us to why people are talking about an inverted yield curve.
Given its somewhat ‘predictive power’, when the yield curve inverts, it spells trouble for the economy and financial markets, some claim.
But things are different this time, experts also say – and boy they are. Given the US Fed’s mammoth QE programs over the last 2 years, the US treasury market is now in uncharted territory.
“[The Fed’s QE program] has resulted in an undervalued U.S. 10-year yield that will rise when the central bank starts shrinking its balance sheet, steepening the curve,” Reuters wrote, summarising analyst sentiment.
Meanwhile, Timothy Graf, head of European, Middle East and Africa (EMEA) macro strategy at State Street said “I suspect we will get a growth slowdown but will it lead to recession? It may be next year’s story.”
“Households will want to see the fuel prices coming down but generally household balance sheets are in pretty good shape”.
With all the calamity going on in the world, it remains to be seen what the next moves in the economy will be, but rest assured, it’s not as rosy as it was in pre-COVID times.
Should you invest $1,000 in Yield curve inversion right now?
Before you consider Yield curve inversion, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Yield curve inversion wasn’t one of them.
The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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 Bruce Jackson.
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ASX shares are well known for their collective dividend prowess. Looking at the largest companies on the S&P/ASX 200 Index (ASX: XJO), five of the top six shares by market capitalisation currently have dividend yields above 3%. BHP Group Ltd(ASX: BHP) has a yield of above 9% right now. So it goes without saying that investors in a broad-based ASX shares exchange-traded fund (ETF), say, the Vanguard Australian Shares Index ETF (ASX: VAS), would expect some heavy dividends too.
Well, said investors won’t be too disappointed. Vanguard’s VAS ETF tracks the S&P/ASX 300 Index (ASX: XKO) rather than the ASX 200. But it is still more or less dominated by the same shares. Those dividend heavy hitters in BHP and the big four banks are at the top of the pile.
An index ETF like VAS works by holding a portfolio of shares mirroring the index the ETF is tracking. In VAS’s case, that is the ASX 300. But an ETF, as a trust structure, also has to pass on any dividends the portfolio received through to its investors relatively quickly.
The VAS ETF is about to hit the cash button
So let’s look at VAS’s dividend distributions, which include an upcoming payment.
Unlike most ASX shares, VAS pays out a quarterly dividend distribution. These occur to coincide with the quarters of the financial year. Since we are about to end the third quarter of FY2022 (on 31 March), the next payment is heading investors’ way. Let’s dig in.
So Vanguard has just released its upcoming dividend distribution schedule. It revealed that VAS investors will receive a quarterly dividend distribution of 199.8517 cents per unit on 20 April. The ex-distribution date for this payment is 1 April (no joke), so that means investors will have to own VAS units before this date if they wish to receive this payment.
Once this distribution is doled out in April, it will bring VAS’s annual dividend distribution to $4.66 per unit. On the current Vanguard Australian Shares ETF unit price of $97.42, that gives VAS a trailing yield of 4.79%.
Before you consider VAS, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and VAS wasn’t one of them.
The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
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 Bruce Jackson.
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The Boral Limited (ASX: BLD) share price closed Wednesday’s trade up 2.62%. The construction materials business may be in focus after the release of the federal budget last night.
Boral describes itself as the largest integrated construction materials company in Australia, producing and selling a broad range of construction materials including quarry products, cement, concrete, asphalt and recycled materials.
What was in the federal budget?
There were a number of measures announced to boost the economy and help people with the increased cost of living, such as a fuel excise cut.
The government said that it was committing an additional $17.9 billion to priority rail and road projects across Australia.
That included $3.1 billion for Melbourne Intermodal Terminals and related infrastructure, which aims to increase the efficiency and capacity of the national and Victorian freight industry.
The government also committed $3.7 billion for faster rail projects in New South Wales and Queensland.
Another budget item was $500 million for local councils to maintain and deliver priority road and community infrastructure projects.
There was a commitment of $678 million to seal 1,000km of roads on the Outback Way.
An amount of $880 million was committed for “roads of strategic importance”, $385.4 million for the Northern Australia roads program, and $150 million for the inland rail interface improvement program.
The government said it would provide another $5.4 billion to build the Hells Gates Dam, subject to the completion of the final stage of the business case. In total, it allocated $7.4 billion for 13 water infrastructure projects that aim to increase water security and build drought resilience.
In summary, many billions of dollars are being put towards infrastructure in Australia over the coming years.
What does this mean for Boral?
There was no mention of Boral in the federal budget, nor has the company issued an official update that may have impacted the Boral share price. But it does produce materials that will likely be used in these infrastructure projects.
However, in the company’s recent FY22 half-year result, it said that there was a strong pipeline of major transport projects and it is prioritising projects that complement its network.
Boral said that “the construction sector is aware of the challenges the significant infrastructure pipeline poses.”
The ASX share referred to Infrastructure Australia’s Infrastructure Market Capacity report from October 2021 which expects major infrastructure activity to double over the next three years, with New South Wales, Queensland and Victoria to account for 87% of spending. This is expected to lead to shortages in materials, skills and labour as peak demand occurs.
Boral expects delays on some projects to continue due to labour and supply chain constraints and cost inflation impacting the timeframe to execution. That’s why it is prioritising projects that don’t strain the existing network and enable it to deliver to customers.
Boral share price snapshot
After recent market movements, the Boral market capitalisation is now $3.8 billion, according to the ASX. Over the past month, Boral shares have fallen 2.5%.
Before you consider Boral, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Boral wasn’t one of them.
The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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The federal budget has, understandably, been the talk of the town today, with many market watchers questioning which shares will be budget winners and which might be less fortunate. And while ASX stocks in the retail, fuel, and automotive sectors have been in focus for various reasons, one broker is flagging a win for healthcare shares.
So, why are ASX healthcare shares Sonic Healthcare Limited(ASX: SHL), Healius Ltd(ASX: HLS), and Australian Clinical Labs Ltd(ASX: ACL) in the post-budget spotlight? Let’s take a look.
These 3 ASX healthcare shares might benefit from the budget
Broker RBC Capital Markets believes ASX healthcare shares could get a boost from extra spending on Medicare announced in the 2022/23 budget, as reported by the Australian Financial Review.
The broker is keeping an eye on ASX pathology giants on the back of a $546 million commitment to Medicare Benefits Schedule items used to conduct PCR tests.
The funding is intended to support Australia’s pandemic response. However, it surprised the broker. RBC Capital Markets was quoted as saying:
The Government has extended the Medicare schedule for COVID testing.
However, the amount budgeted for 2022-23 suggests upside to our [financial year 2023] COVID testing forecasts if the budget assumptions eventuate.
Of course, more testing is likely good news for the pathology giants. Though, it might be slightly offset by more free Rapid Antigen Tests (RATs).
The government has also committed to spend another $1.6 billion to ensure all Australians have equitable access to RATs.
The broker’s rose-coloured prediction didn’t manage to boost the ASX healthcare giants’ share prices on Wednesday.
None of the three pathology stocks significantly beat the S&P/ASX 200 Index (ASX: XJO)’s 0.67% gain.
At market close, the Sonic Healthcare share price is 0.17% higher at $35.79.
Meantime, Australian Clinical Labs ended the day in the green, gaining 0.2% to close at $5.11.
Finally, the Healius share price slightly outperformed the ASX 200 today. It rose 0.68% to finish at $4.43.
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When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.
Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Australian Clinical Labs Limited and Sonic Healthcare Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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The Fortescue Metals Group Ltd(ASX: FMG) share price closed higher amid the company’s shareholders receiving a gift today.
The mining company’s shares finished the day up 1.59% to $19.80 apiece. This means Fortescue shares have lifted by almost 5% in the past week.
In context, the S&P/ASX 200 Index (ASX: XJO) also closed higher on Wednesday. The benchmark index finished 0.67% ahead at 7,514.5 points.
Fortescue pays out interim dividend
Last month, Fortescue reported mixed numbers across key metrics in its results for the first half of the 2022 financial year.
In summary, total revenue fell 13% to US$8.1 billion over the prior corresponding period (H1 FY21 $9.33 billion). This was driven by a decline in the price realisation of iron ore to US$96/dmt (H1 FY21 US$114/dmt).
Management noted that despite the loss of revenue, the company achieved record shipments for the six-month period ending 31 December 2021.
However, this wasn’t enough for the miner to improve its bottom line. As such, net profit after tax (NPAT) came to $2.8 billion, down 32% on the first half of FY21.
Nonetheless, the board declared a fully franked interim dividend of 86 cents per share to be paid on 30 March (today). This represents a 41% decrease on the H1 FY21 dividend of $1.47 per share.
When calculating against the current share price, Fortescue is trailing on a forecast fully franked dividend yield of 15.01%.
In addition, the current payout ratio is calculated to be 70% of the mining outfit’s profits.
This is consistent with management’s capital allocation framework and dividend policy to pay out between 50% to 80% of full-year NPAT.
Fortescue share price summary
Despite being in the green today, the Fortescue share price is relatively flat over the past 12 months.
When looking at 2022 alone, its shares are up around 3%.
Before you consider Fortescue, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Fortescue wasn’t one of them.
The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
from The Motley Fool Australia https://ift.tt/pgnjIOc
