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Shares in Grange Resources Ltd (ASX: GRR) are charging higher today after the company released its financial results for the full-year ended 31 December 2021 on late Friday afternoon.

At the time of writing, the Grange Resources share price is trading at $1.01, a 37% spike from the open on Monday.

Grange Resrources share price jumps on earnings growth

Key takeouts from the company’s earnings results on Friday include:

• Revenues from operations of $781.7 million compared to $526.3 million for the prior year
• Pellet production of 2.60 million tonnes for the year compared to 2.35 million tonnes for the prior year
• Total iron ore product sales of 2.62 million tonnes for the year compared to 2.49 million tonnes for the prior year
• Profit after tax of $321.6 million for the year compared to $203.2 million for the prior year
• Average realised product price of $276.17 per tonne for the year compared to $196.77 for the prior year
• Unit C1 cash operating costs of $99.73 per tonne for the year compared to $99.77 for the prior year
• Cash and cash equivalents position of $443.9 million at the end of year compared to $183.4 million at the end of the prior year
• Fully franked special dividend for year ended 31 December 2021 of 10 cents per share

What happened this period for Grange Resources?

Grange noted that total sales for the year were 2.62 million tonnes, up from 2.49 million tonnes in 2022. The gain reflects “sustained production from maintaining access to high grade ore”.

This enabled Grange to recognise total revenue of $782 million for the year, a mammoth 144% gain from the previous year.

As a result, the company grew its after-tax profit from $203 million to over $321 million in 2021 and the company left the year with $444 million in cash on the balance sheet.

Curiously, Grange reports no impact to its earnings profile from COVID-19 lockdowns, a clear distinction from most other ASX players in 2021.

“To date, the Company has had no material production impact due to COVID-19”, it said. “The impact of the pandemic continues to be well managed across our operations”.

Grange also announced it has adopted an “Environmental, Social, and Governance (ESG) framework with 21 core metrics and disclosures as created by the World Economic Forum (WEF)”.

It has subsequently engaged “impact monitoring technology platform Socialsuite” to streamline the process.

“The Company’s goal is to demonstrate commitment and progress on making ESG disclosures, but more broadly, aims to progress a range of ESG benchmarks as set out by the WEF’s ESG White Paper”, Grange said.

What’s next for Grange Resources?

Grange says that its focus is to “generate shareholder value by safely producing high quality iron ore products from its Savage River and Port Latta operations in Tasmania”.

Not only that, but it is also going to “assess the feasibility of a major iron ore development project at Southdown, near Albany in Western Australia”.

It also intends to manage its business risks with prudence by focusing on fluctuations in the iron ore market, monitoring geotechnical risks and “optimise timing of sales to the fluctuations in iron ore prices and demands from different markets”.

Grange Resources share price snapshot

In the last 12 months, the Grange Resources share price has spiked 124% and is up 34% year to date.

During the past month of trading, shares have jumped 34% and hence Grange is thus leading the broad indexes this year.

The post $120m profit jump sends Grange Resources (ASX:GRR) share price 37% higher appeared first on The Motley Fool Australia.

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• Which ASX 200 shares have delivered the biggest dividend payout increases this earnings season?
• What’s keeping this top broker neutral on Westpac (ASX:WBC) shares?
• Top broker says CBA (ASX:CBA) is ‘on its way back’
• Why is this leading ASX ETF suddenly in the spotlight?

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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With this earnings season all but wrapped up, it’s probably a good time to survey the spoils and dig deeper into what the ASX’s most-watched shares have given investors.

For a large chunk of the investing community, all eyes were undoubtedly on what kind of dividend payments will be arriving in the metaphorical mailbox in coming weeks.

Since we saw some dramatic dividend announcements indeed over the past month or so, let’s check out the ASX dividend shares that have delivered the biggest payout increases this earnings season.

BHP Group Ltd (ASX: BHP)

BHP made headlines with its monster dividend announcement when it reported its earnings back on 15 February. 

Most investors expected another hefty interim dividend from BHP after the rebound in iron ore prices we have seen over the past few months. But it’s probably fairly safe to say not too many investors were anticipating the largest interim dividend in BHP’s history.

The miner announced a whopping payout of US$1.50 per share, fully franked. As my Fool colleague covered at the time, broker Goldman Sachs was expecting a dividend worth US$1.27, so this one was a very pleasant surprise for income investors. At today’s pricing, BHP shares offer an eye-popping dividend yield of 10.62%

Rio Tinto Limited (ASX: RIO)

BHP’s resources rival Rio also impressed with its own dividend announcement when this miner delivered its earnings report last week. Rio announced a record final dividend of US$4.17 a share that will be distributed to investors in April. On top of that, shareholders will also receive a special dividend worth 62 US cents per share at the same time.

That takes Rio’s full-year dividends to US$10.40 per share, including last year’s interim dividend of US$2.76 per share and the accompanying special payout of US$1.85. On the latest pricing, Rio shares now have a dividend yield of 9.26%.

Commonwealth Bank of Australia (ASX: CBA)

It might be remiss to mention ASX dividends without including at least one ASX bank share. CBA was one of the first ASX blue-chip shares to report this earnings season when it dropped its results on 9 February.

And income investors weren’t disappointed. CBA announced an interim dividend of $1.75 per share. Fully franked of course. This payment will be sent out on 30 March. The $1.75 per share payment is a 17% increase from last year’s interim payout of $1.50 per share.

However, this one was far from being a record high payment for Commbank. Its March 2020 interim dividend of $2 per share. However, CBA also complemented this dividend with the announcement of a $2 billion on-market share buyback program. At the current pricing, CBA shares have a dividend yield of 4%. 

The post Which ASX 200 shares have delivered the biggest dividend payout increases this earnings season? appeared first on The Motley Fool Australia.

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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 Westpac Banking Corp (ASX: WBC) share price is marching downwards in afternoon trade today.

At market open, Westpac shares walked out of the gate and peaked at a daily high of $23.03 before retreating. At last check, Westpac shares are trading at $22.68.

After a strong start to the year and even healthier gain over the past month, Westpac is now outpacing most of its ASX banking peers in 2022 so far.

However, not all are rosy on Westpac shares. Let’s take a look.

Why is this top broker neutral on Westpac?

JP Morgan is uncertain on the outlook of Westpac shares amid a wave of headwinds the bank is set to face in 2022.

According to JP Morgan analysts, Westpac’s “outlook is highly uncertain, with weak customer franchise metrics and
revenue under pressure driven by compression on mortgage margins.”

“Westpac’s FY24 cost plan ($8 billion target ex Specialist) is highly ambitious given it requires an approximate 20% reduction from the FY21 cost base, but we expect the market to remain skeptical [sic] on achieving this,” the broker said.

Even the bank’s strong capital surplus is not enough to differentiate it from other names in the banking basket. That’s because all banks are in a similar position, JP Morgan notes.

The broker is forecasting earnings per share (EPS) of 78 cents in 2022 and then 85 cents in 2023. And dividends per share of $1.20 and $1.23 per Westpac share modelled in FY22 and FY23 respectively.

Should this play out, these payouts represent a 5% and 5.2% dividend yield respectively. This is not unattractive in the current yield climate.

However, too many uncertainties exist for the broker to get fully on board with Westpac’s case. Especially now that the bank’s collective provision coverage is at the bottom end of the peer range in JP Morgan’s eyes.

The broker is also folding in a substantial downstep to net interest income for FY22 from $16.714 billion to $16.022 billion. And it sees a decline to net interest margins (NIMs) by 25 basis points in FY22 and then another 4 basis points in FY23.

“In this context, and given our long-term concerns about the sustainability of mortgage margins across the industry (where Westpac has a heavy exposure) we see the risk/reward as unattractive,” the broker remarked.

As such, it values Westpac at $23.30 per share whilst retaining its neutral stance on the direction of its share price.

Summary of Westpac shares

In the last 12 months the Westpac share price has fallen 4.8%. Although, it has gained 6.2% this year to date.

During the past month of trading, Westpac shares have spiked over 12%. The bank is leading the broad index so far this year.

The post What’s keeping this top broker neutral on Westpac (ASX:WBC) shares? appeared first on The Motley Fool Australia.

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• The Bank of Queensland (ASX:BOQ) share price has leapt 10% in 3 weeks. How does this compare to the other big banks?

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Commonwealth Bank of Australia (ASX: CBA) share price has started the week in the red.

In afternoon trade, the banking giant’s shares are down almost 1% to $93.20.

Is the weakness in the CBA share price a buying opportunity?

One leading broker that is likely to see the weakness in the CBA share price as a buying opportunity is Bell Potter.

Earlier this month, in response to the bank’s half year results, the broker upgraded its shares to a buy rating with a $108.00 price target.

Based on the current CBA share price, this implies potential upside of 16% for investors over the next 12 months.

And if you include the fully franked dividend of $3.87 per share Bell Potter is expecting in FY 2022, the total return increases by an additional 4.1% to over 20%.

‘On its way back’

Bell Potter is positive on the CBA share price due to its belief that the banking giant is on its way back to delivering revenue growth again.

The broker commented: “Despite the misgivings of the market and especially COVID-19’s Omicron strain, CBA sees FY22 as a strong year. The unemployment (and underemployment rate) are the lowest since 2008 and Australian household accumulated savings are stronger than ever (likewise the rate at which wage growth in anticipated). Inflation is likely to increase in due course (and that’s a good thing for all banks) while non-mining investment including infrastructure continue to hold up reasonably well. The bank has again bounced back from its lows and is on its way back to its usual top line growth potential.”

Bell Potter expects this to underpin growing dividend payments in the coming years. It has pencilled in fully franked dividends per share of 387 cents in FY 2022, 407 cents in FY 2023, and 423 cents in FY 2024.

All in all, this could make the CBA share price a good option for investors looking for exposure to the banking sector.

The post Top broker says CBA (ASX:CBA) is ‘on its way back’ appeared first on The Motley Fool Australia.

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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 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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There are a broad and growing range of ASX exchange traded funds (ETFs) for investors to choose from.

Today, we home in on one ASX ETF that’s been thrown into the spotlight in the wake of Russia’s invasion of neighbouring Ukraine.

While Russia has yet to unleash its full cyber attack capabilities, the invaders have already been working to cripple Ukraine’s digital infrastructure.

And that puts leading ASX ETF Betashares Global Cybersecurity ETF (ASX: HACK) squarely in the spotlight.

The HACK share price is up 1.33% in intraday trading, after gaining 7% on Friday.

What does this ASX ETF do?

If you’re not familiar with this ASX ETF, HACK offers investors exposure to 35 leading global cyber security shares. The fund’s top four holdings are Cisco Systems, Palo Alto Networks, Accenture, and Crowdstrike Holdings.

You can run through the entire list of 35 holdings and you won’t find any Aussie companies among them. That’s because the ASX cybersecurity shares don’t, as of yet, have large enough market caps to be included.

Why is this ASX ETF suddenly in the spotlight?

As mentioned, Russia has begun to unleash some of its world leading cyber warfare capabilities against Ukraine. This could see demand for the services of many of the cybersecurity companies held by this ASX ETF surge.

As Bloomberg reports, citing three inside sources:

In the build-up to Russia’s invasion, hackers detonated powerful data-destroying software on the network of Ukraine’s Ministry of Internal Affairs, and they siphoned off large amounts of data from the country’s telecommunications network…

Commenting on Russia’s attack, Jean-Ian Boutin, head of threat research at cybersecurity company ESET LLC, said:

This was not a widespread attack. They pinpointed specific organisations and then went in and deployed the malware. The fact that this happened a few hours before the full-scale invasion, it leads us to believe these organizations were targeted for a reason.

And Ukraine is fighting back.

As the Sydney Morning Herald notes, “Ukraine has called on its own hacking underground to shore up critical infrastructure like power grids.”

But Ukraine is doing more than just buffering its own cyber-defences. Russia is now increasingly finding itself on the receiving end of cyber attacks:

Russia has already been hit by cyber counter-strikes itself. Cyber citizens around the world, including some in Russia who oppose their government’s invasion of Ukraine, have been sharing resources in an effort to launch disruptive attacks against the Kremlin…

What happens in Eastern Europe could spread

While these attacks are currently focused in Eastern Europe, cyber warfare, like shooting wars, can potentially spread across borders.

And companies hoping they can insure against cyber attacks may find it increasingly difficult, and costly, to do so.

The Australian points to a report from professional services consultancy Aon that shows “policy costs for cybersecurity insurance leapt more than 113% across its portfolio in the past year”.

Notably, that was before Russia’s land invasion and wave of new cyber attacks against Ukraine.

According to Aon cyber insurance practice leader Michael Parrant:

The average Australian organisation is probably no worse off in the current environment, as the major criminal groups are likely being subverted for nation state actions. But critical infrastructure is clearly not your average organisation and they are more likely to find themselves being targeted in the current environment.

It is possible that collateral damage may emanate from these global issues, and all organisations would be well advised to operate within a heightened risk environment.

We can only hope that wiser heads prevail. And that Russia’s major escalations against Ukraine – both cyber and its military invasion – are short lived, minimising the need for the security services offered by the companies held by HACK.

But so long as cyber criminals – state sponsored and private – roam the virtual world, companies like the ones held by this leading ASX ETF will remain in demand.

The post Why is this leading ASX ETF suddenly in the spotlight? appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia owns and has recommended BETA CYBER ETF UNITS. 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 Dicker Data Ltd (ASX: DDR) share price is moving higher today.

During midday trade, the company delivered its FY21 results to the market.

At the time of writing, the IT distributor’s shares are up 2.76% to $14.17 each, after earlier reaching an intraday high of $14.27.

Dicker Data share price edges higher on double-digit growth across all key metrics

The Dicker Data share price is advancing following the company’s full-year result for the 12 months ending 31 December 2021. Here are some of the key highlights:

• Total revenue of $2,484.5 million, up 24.2% year on year (FY20 $2,000.1 million)
• Earnings before interest, tax, depreciation and amortisation (EBITDA) of $118.7 million, up 29.9% (FY20 $91.4 million)
• Net profit after tax (NPAT) of $73.6 million, up 28.6% (FY20 $57.2 million)
• Final dividend of 15 cents per share, bringing total dividends paid for the year to 42 cents.

What happened in FY21 for Dicker Data?

Investors are buying up Dicker Data shares as the company registered a solid scorecard for the FY21 period.

Dicker Data maintained its upwards revenue trajectory, despite logistics constraints, COVID-19, and the global chip shortage.

At a national level, Australia grew revenues by $300.3 million, up 16.3%, and New Zealand by $184.1 million, up 128.7%.

Throughout the year, the company added nine new vendors which accounted for incremental revenue of $54.7 million.

Dicker Data continued its diversification strategy with its top five vendors contributing 49% of revenue in FY21. By comparison, in FY12, the company’s top five vendors accounted for 90% of Dicker Data’s earnings base.

What did management say?

Dicker Data chair and CEO David Dicker commented on the solid achievement, saying:

Our FY21 result represents over 43 years of experience and a significant growth trajectory.

Since being listed on the ASX on 24 January 2011 at an initial market cap of $25 million, today shares have recently traded around $14 with a market cap of just under $2.5 billion. This solidifies the company’s status as a true Australian success story and a fast growing and high-returning stock.

The commitment of our people and the focus of the company over the last twelve months has demonstrated the flexibility of our business. We continue to excel in a challenging environment and deliver a service to our vendors and reseller partner community that they value and is unmatched in the local market.

What’s instore for the Dicker Data share price in FY22?

Looking ahead, Dicker Data advised that FY22 is expected to be a bumper year as the digital transformation era accelerates.

The company noted that demand for its technology and value-added services remains robust. This is expected to be underpinned by its software portfolio which represents the highest growth opportunity for Dicker Data in FY22.

Context Research is predicting more than 25% year-on-year growth in software for all distributors globally, driven predominantly by hybrid cloud adoption.

In addition, the work from anywhere trend, professional audiovisual, and its infrastructure business are forecast to deliver another strong year.

Supply constraints are expected to remain until mid-2022, however, this is unlikely to have an adverse impact. Dicker Data highlighted its resilience and experience in navigating and performing in a disruptive environment.

The post ‘Significant growth trajectory’: Dicker Data (ASX:DDR) share price rises following strong full year results appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras owns Dicker Data Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Dicker Data Limited. The Motley Fool Australia owns and has recommended Dicker Data 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 Limited (ASX: FMG) share price has started the week deep in the red.

In early afternoon trade, the iron ore giant’s shares are down almost 5% to $17.72.

Why is the Fortescue share price falling today?

The good news for shareholders is that the weakness in the Fortescue share price today has nothing to do with the iron ore price or concerns over its Fortescue Future Industries (FFI) business.

Rather, this weakness has been caused by the company’s shares trading ex-dividend this morning for its latest dividend.

When a share trades ex-dividend, it means that the rights to an upcoming dividend payment stay with the seller of shares and don’t transfer to the buyer. As a result, a share price will more often than not drop in line with the dividend to reflect this. After all, you wouldn’t want to pay for something that you won’t receive.

The Fortescue dividend

Earlier this month when Fortescue released its half year results, the company reported a 28% decline in earnings before interest, tax, depreciation and amortisation (EBITDA) to US$4,762 million and a 32% reduction in underlying net profit after tax to US$2,779 million.

This, combined with a lowered payout ratio, led to the Fortescue Board declaring a fully franked interim dividend of 86 cents per share, down 41% on last year’s interim dividend.

This compares to an 88 cents per share decline in the Fortescue share price today. Which means that if you take the dividend out of the equation, the company’s shares are actually trading largely flat.

What’s next?

Eligible shareholders can now look forward to receiving this 86 cents per share dividend in their bank accounts next month.

Fortescue is scheduled to make its payment on 30 March.

The post Why is the Fortescue (ASX:FMG) share price falling 5% today? appeared first on The Motley Fool Australia.

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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 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 Damstra Holdings Ltd (ASX: DTC) share price is falling following the release of its FY22 first-half results.

At the time of writing, shares in the workplace management solutions provider are trading 7.4% lower at 25 cents. Earlier in trade, the Damstra share price reached 24 cents apiece, representing a fall of 11%.

Damstra share price tumbles as the business resets

• Revenue up 9.2% over prior corresponding period to $13.2 million
• Annual recurring revenue of $27.8 million, representing a 15% increase
• Net client retention fell to 104% compared to 114% in previous first half
• Net loss after tax of $56 million, deepening from $5.49 million
• Held $18.7 million in cash and cash equivalents as at 31 December 2021
• Reaffirmed revenue guidance between $30 million and $34 million for FY22

What else happened during the half?

The six months ending 31 December 2021 presented a challenging period for Damstra, having lost one of its major clients — Newmont. In combination with COVID-19 impacts, the client loss resulted in earnings before interest, tax, depreciation, and amortisation (EBITDA) coming in at a loss of $200,000.

Following this, the company tried to offset some of the pressure on the bottom line by implementing cost optimisations. To date, this has led to more than $1 million in savings across the business.

However, parts of Damstra’s operations still incurred notable expenses during the half. For example, general and administration expenses increased to ~43% of revenue from ~25%.

While not as drastic, sales and marketing expenses also jumped to ~36% of revenue versus its previous ~32%. Likely, these increased costs are weighing on the Damstra share price today.

During the half, Damstra acquired Sydney-based workplace safety and compliance company TIKS Solutions. The total consideration involved a mix of cash and shares worth $18 million.

According to today’s report, the company is focused on three key areas: geographic expansion, verticals, and product. A $20 million capital raise in December last year will be used to push forward with these targeted items.

What did management say?

CEO Christian Damstra commented on the results:

Excluding Newmont, our business grew by 16% during the first half, and while our EBITDA performance was below our expectations, the second quarter was EBITDA positive. With COVID restrictions continuing to ease across our clients’ operations, activity accelerated towards the end of Q2, and we believe this trend will continue for the rest of the financial year. We see our key metrics improving in many areas of the business and this, along with the capital raise we successfully completed in December, provides a strong foundation for growth in the second half and beyond.

What’s next?

In a positive sign, Damstra has reaffirmed its forward guidance for FY22. Although, the same couldn’t be said for its EBITDA margin guidance. Previously, the company anticipated an EBITDA margin of 15% to 20% — but now it is guiding for 2% to 5%.

There are signs that “positive trends” are emerging, according to the Damstra CEO. In addition, no contract renewals are coming due in FY22, providing some near-term stability.

Damstra share price snapshot

The performance of the Damstra share price has been hellacious over the past year, tumbling 75%. In light of the sell-off, ASX-listed Damstra now holds a market capitalisation of $68 million.

If the company were to be valued on a forward-looking price-to-sales (P/S) ratio, based on its own revenue guidance for FY22, it would be between 2 to 2.26 times sales.

The post Damstra (ASX:DTC) share price stoops 11% amid downgraded margins appeared first on The Motley Fool Australia.

More reading

• Here’s why the Damstra (ASX:DTC) share price is surging 13% today

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Damstra Holdings Ltd. The Motley Fool Australia owns and has recommended Damstra Holdings Ltd. 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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Shares in Australia and New Zealand Banking Group Ltd (ASX: ANZ) are walking south in Monday’s session and now trade less than 1% in the red at $26.02 apiece.

The bank has lagged the other majors on the chart so far in 2022 and is currently trading down 5% since trading kicked off on January 4.

Who is bullish on ANZ shares?

Despite the weakness in its share price, ANZ is well poised to deliver upside in 2022 and 2023 according to analysts at JP Morgan.

The broker is overweight on ANZ and values the bank well ahead of its current market price. More visibility around ANZ’s earnings profile has JP Morgan constructive on the bank moving forward.

“Our Overweight recommendation reflects our greater certainty in ANZ’s top line. ANZ offers the greatest exposure to rising offshore rates, stemming from its NZ franchise, and its large Institutional business” the broker said in a recent note.

“It also has a large relative exposure to business lending, which should provide some protection from the severe short-term pressure on mortgage margins”.

Whilst ANZ has faced challenges in its mortgage segment in recent periods, the broker expects these to lift overtime “in line with improved cost efficiencies”.

Analysts at the firm forecast net interest income of $14.113 billion in FY22 for the bank, growing to $14.69 billion the year after. It also tips ANZ’s net interest margin (NIM) to hold firm at 1.5% during this time.

Meanwhile, JP Morgan is also estimating ANZ to pay $1.44 in dividends per share for FY22 then growing to $1.56 per share in FY23. This signifies a growth of 1.4% for both years, less than the level of headline inflation.

Capital management potential is also “at the upper end of the major banks” according to JP Morgan analysts, and the firm expects ANZ will return to out-cost in FY23.

As a result, analysts are positioning ANZ towards the top of the mantlepiece with respect to the broker’s banking universe, valuing the bank at $30.50 per share.

“Our December 2022 price target of $30.50 reflects the aggregate of the present value of the dividend stream paid to shareholders through to FY24E and the present value of a multiple of FY24E tangible book value”, it remarked.

Quick summary of ANZ shares

In the last 12 months, ANZ shares have fallen less than 1% into the red. However, they are down 6% this year to date.

During the past month of trading, shares have collapsed another 4%, and ANZ is thus trailing the broad indexes this year.

The post Greater Certainty: Why this top broker is bullish on ANZ (ASX:ANZ) shares in 2022 appeared first on The Motley Fool Australia.

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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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The past two years have been nothing short of a phenomenon. Amid COVID-19, inflationary pressures, supply chain issues, threats of interest rate hikes – and, now, geopolitical conflict in Europe – Australia’s economy still looks as if it will grow in the coming years.

The unemployment rate is hovering around 4%, its lowest point in more than 10 years, and if it reaches below 3%, we could be heading for the lowest levels of unemployment on record.

Australian wages have grown over the past 10-plus years, outpacing the increase in Australian labour costs and the producer price index in that time (as shown below).

But now, with the labour force heading towards full capacity, how will this impact company earnings moving forward? And how can investors navigate the predicted ‘jobs boom’? Let’s take a look at two potential winners below.

Xref Limited (ASX: XF1)

Having peaked at 52-week highs of 80 cents in January, shares in software-as-a-service player Xref have since corrected to trade at 59 cents apiece.

Xref claims to automate the employment reference checking process, offering a 24-hour turnaround service. According to the author of the Switzer Report, Tony Featherstone, Xref could be a buy for those investors with a longer-term horizon in mind.

“In a January trading update, Xref said sales of $10 million in the first half of FY22 were up 96% on the same period a year earlier,” he said.

“That is a good result: the first half of the financial year is usually the weakest for Xref due to financial year-end.”

Featherstone notes that Xreft could be one for the long-term.

“My interest is longer-term. I like Xref’s technology, platform and business model. It’s a globally scalable model that solves an obvious problem for customers,” Feathorstone noted.

“The challenge is attracting companies and cross-selling other products so that the platform has higher margins and more ‘touchpoints’ with customers who find it harder to leave.”

CV Check Limited (ASX: CV1)

Another potential ‘jobs boom’ play, according to Featherstone, is CV Check, the provider of pre-employment screening services for individuals and companies.

The company has expertise in providing a 12-24 hour turnaround on police checks. It recognised  $6.5 million in revenue for the second quarter of FY22 – a gain of 83% on the same period last year.

“Like Xref, CV Check has rising revenue growth, off a low base,” Featherstone remarked. “Its products are well placed for this market and it has a reasonably large retail and SME [small to medium enterprise] customer base for its size.”

According to Featherstone, the jobs market might be under-appreciating how valuable CV Check’s offering is, especially given the digitising of onboarding processes.

“I doubt enough job candidates realise how technology algorithms are cross-checking their CV against published data – and the risks of providing false job information,” he added.

However, CV Check has underperformed the market substantially in the last 12 months. It is down 26% this year to date, well behind the major indices.

It is now trading at 11.5 cents per share at the time of writing, having collapsed another 4% during last week’s trading.

As for his favourite, Featherstone is crystal clear on which of the two companyies he prefers.

“Of the two stocks, I prefer Xref,” he said. “I like emerging software-as-a-service companies that demonstrate they can rapidly scale their opportunity by adding more products and services for global markets.”

“It’s early days, but Xref is making good progress.”

Featherstone believes CV Check hasn’t done enough since listing. “Recent signs are promising…[b]ut if resume and reference checkers can’t do well in this jobs market, they never will,” he added.

The post Expert reveals 2 small-cap ASX shares for the jobs boom appeared first on The Motley Fool Australia.

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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. owns and has recommended Xref Limited. The Motley Fool Australia has recommended CV Check Ltd and Xref 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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