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Key points

• A few ASX tech shares look good value after recent declines
• Xero is rated as a buy by Citi. It’s growing revenue and subscribers rapidly
• Airtasker is rated as a buy by Morgans. It’s generating resilient growth

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Some ASX tech shares have suffered quite sizeable sell-offs in the last few weeks. They could be attractive opportunities for investors to consider. That’s what analysts think.

Businesses in the technology sector have the ability to achieve high profit margins and grow quickly thanks to the intangible nature of software.

Investment ideas can open up quite quickly if the share price drops falls rapidly.

These two are rated as buys:

Xero Limited (ASX: XRO)

Xero is one of the world’s largest cloud accounting software businesses with a market capitalisation of more than $18 billion according to the ASX.

Since the start of the year, the Xero share price has fallen more than 18%. It’s currently rated as a buy by the broker Citi which has a price target of $160. That’s a potential increase of more than 30% over this year if the broker is right.

Xero is one of the ASX tech shares with the highest gross profit margins. For the six months to 30 September 2021, the gross profit margin increased from 85.7% to 87.1%. This turns a lot of revenue into gross profit for the business to spend on further growth.

The company says that it’s committed to delivering the world’s most insightful and trusted small business platform to make life better for people in small business, their advisors and communities around the world. To support that, Xero is going to continue to prioritise investing in product development and partnerships, and execute on its strategy to meet its customers’ evolving needs in both the short and long term.

Xero continues to grow both its subscriber numbers and average revenue per user (ARPU). In the six months to September 2021, its ARPU grew by 5% to NZ$31.32. There is revenue growth built into its annualised monthly recurring revenue (AMRR). The AMRR increased 29% to NZ$1.13 billion. But the Xero share price is the lowest it has been since May 2021.

Airtasker Ltd (ASX: ART)

Airtasker is another ASX tech share that has seen a decline in recent weeks. The Airtasker share price has fallen 11% in 2022 to date.

The task marketplace continues to see more growth as more jobs are done through the platform.

It’s currently rated as a buy by the broker Morgans with a price target of $1.27. That suggests a potential upside of more than 60% this year if the broker is right. Morgans was impressed by the first quarter in FY22.

In the three months to September 2021, the ASX tech share’s gross marketplace volume (GMV) rose 6.2% year on year to $35 million.

It’s achieving rapid growth of its international GMV, which was up more than 100% driven by strong growth in the UK in the first quarter. In the USA, it’s looking to expand in Dallas, Kansas City and Miami.

According to Airtasker, people are becoming increasingly comfortable in using the ASX tech share’s services as they get more used to the service. It’s investing in a ramping up of international marketing to drive its growth in the future.

It has a very high gross profit margin of more than 93%.

The post 2 beaten-up ASX tech shares analysts rated as quality picks appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• An ASX XI to take on the world
• Down 14% in 10 days, is the Xero (ASX:XRO) share price now an undervalued buy?
• 2 exciting small cap shares named as buys
• The Xero (ASX:XRO) share price has already dumped 13% so far this year. What’s next?

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. owns and has recommended Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Airtasker Limited. 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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With the S&P/ASX 200 Index (ASX: XJO) dropping 3% over the past 5 months, investors are at a crossroads.

Do you hold off to see which direction the market wants to head this year, or buy the dip now?

Celeste Funds Management provided some commentary to its clients recently, which may sway you to the latter for 2 particular consumer-focused ASX shares. 

‘Further selling appears unwarranted’

Shares for women’s fashion retailer City Chic Collective Ltd (ASX: CCX) actually dropped 25.6% since the start of December, before a massive 11.6% recovery on Friday to finish the week at $4.99.

It seems the market has woken up to the faith that Celeste Funds holds in the business.

“Further selling appears unwarranted,” Celeste’s memo read.

“With major marketplace partners Amazon.com Inc (NASDAQ: AMZN), eBay Inc (NASDAQ: EBAY) and The Iconic, we believe City Chic is ripe with opportunity as supply chain pressures ease.”

Like most retailers, City Chic has been under pressure due to global supply chain disruption and exorbitant cargo costs.

But Celeste believes these concerns were flagged by the business well in advance and the share price has very much priced in those hurdles.

“City Chic advised they were well-stocked for the peak trading period, and with no physical store presence in the US they are also sheltered from the wage inflation and lockdown concerns impacting [rival] Torrid Holdings Inc (NYSE: CURV)’s 3Q.”

Seven out of 9 analysts currently rate City Chic shares as a buy, according to CMC Markets.

‘Ability to raise prices’

Breville Group Ltd (ASX: BRG) boasted a nice 5.4% return last month but has given all of that back plus more this month, to trade 4.1% down since the start of December.

The home appliance maker has been, like City Chic, hit by supply chain issues. But the Celeste team believes it has an ace up its sleeve.

“We believe Breville has the ability to raise prices, as it has done in the past,” its memo to clients read. 

“Longer term, we believe Breville has a significant opportunity to grow revenue supported by further penetration into new and existing markets, combined with the pandemic’s impact on augmenting BRG’s addressable market.”

Other analysts are split on Breville, with 3 out of 6 rating the stock as a buy on CMC Markets.

Breville shares finished Friday down 1.44% at $28.84.

The post 2 consumer ASX shares ready to pop appeared first on The Motley Fool Australia.

More reading

• Why AnteoTech, BrainChip, City Chic, and ResMed shares are charging higher
• Why did the City Chic (ASX:CCX) share price just drop then pop 13%?
• Analysts name 2 excellent ASX growth shares to buy right now
• 3 fantastic ASX growth shares rated as buys
• The City Chic (ASX:CCX) share price tumbled 8% today. What’s happening?

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Tony Yoo owns Amazon. 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 Amazon. 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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If you’re looking for some ASX dividend shares to help you overcome low interest rates, then you might want to look at the ones listed below.

Here’s what you need to know about these highly rated dividend shares:

Australia and New Zealand Banking GrpLtd (ASX: ANZ)

The first dividend share to consider is ANZ. It could be a top option for investors with limited exposure to the bank sector thanks to its strong position in business banking. This gives ANZ some protection from the aggressive competition in retail banking for home loans.

The team at Morgans continues to be very positive on the bank. At present, the broker has an add rating and $31.00 price target on its shares. This compares to the current ANZ share price of $28.39.

As for dividends, Morgans is forecasting solid growth in its payouts over the coming years. It has pencilled in fully franked dividends per share of $1.47 in FY 2022 and then $1.64 in FY 2023. This implies yields of 5.2% and 5.8%, respectively.

Centuria Industrial Reit (ASX: CIP)

Another ASX dividend share to look at is Centuria Industrial. It is the largest domestic pure play industrial REIT with a portfolio of high-quality assets across key locations throughout Australia.

This includes the recent acquisition of eight freehold urban infill industrial assets for $351.3 million. These acquisitions expand Centuria Industrial’s exposure across attractive industrial sub-sectors including distribution centres, cold storage, and transport logistics.

Macquarie is positive on the company and has put an outperform rating and $4.16 price target on its shares. In addition, the broker is forecasting a 17.3 cents per share distribution in FY 2022 and an 18.7 cents per share distribution in FY 2023. 

Based on the current Centuria Industrial share price of $3.90, this will mean yields of 4.4% and 4.8%, respectively

The post Analysts name 2 ASX dividend shares to buy appeared first on The Motley Fool Australia.

More reading

• 2 ASX shares with growing fully franked dividends
• ANZ (ASX:ANZ) will lag other majors on this key growth metric in 2022 says top broker
• Is Westpac (ASX:WBC) going to be the best big 4 bank for dividends in 2022?
• Could this impact the performance of ASX 200 banks more than interest rates in 2022?
• These were the top 5 ASX 200 bank shares in 2021

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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On Friday the S&P/ASX 200 Index (ASX: XJO) finished the week on a disappointing note. The benchmark index fell 1.1% to 7,393.9 points.

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

ASX 200 expected to rise

The Australian share market looks set to start the week in a positive fashion. According to the latest SPI futures, the ASX 200 is expected to open the day 28 points or 0.4% higher this morning. This follows a mixed end to the week on Wall Street, which saw the Dow Jones fall 0.55%, the S&P 500 rise 0.1%, and the Nasdaq storm 0.6% higher.

Oil prices charge higher

Energy producers such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) will be on watch after oil prices charged higher on Friday. According to Bloomberg, the WTI crude oil price rose 2.1% to US$83.82 a barrel and the Brent crude oil price pushed 1.9% higher to US$86.06 a barrel. Oil prices rose despite speculation that China will release some of its reserves.

Tech shares on watch

It could be a good day for tech shares such as Appen Ltd (ASX: APX) and Xero Limited (ASX: XRO) today after tech shares rebounded on Wall Street on Friday night. As they tend to follow the Nasdaq’s lead, its 0.6% gain bodes well for trade today. However, with the Block share price continuing its slide, the Afterpay Ltd (ASX: APT) share price may not fare as well as others.

Gold price falls

Gold miners Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) could start the week in the red after the gold price dropped on Friday night. According to CNBC, the spot gold price fell 0.3% to US$1,787.40 an ounce. The gold price dropped amid rises in US bond yields and the US dollar.

Iron ore prices soften

BHP Group Ltd (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG) shares will be in focus today after a pullback in the iron ore price. According to Metal Bulletin, the benchmark iron ore price fell 0.9% to US$126.75 a tonne. Market sentiment is being weighed down by most mills finishing the restocking of iron ore at China’s ports ahead of the upcoming Lunar New Year.

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

More reading

• Top brokers name 3 ASX shares to sell next week
• These were the worst performing ASX 200 shares last week
• These were the best performing ASX 200 shares last week
• Here are the top 10 ASX shares today
• Why this expert sees an opportunity for ASX property shares in 2022

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 Afterpay Limited, Appen Ltd, and Xero. The Motley Fool Australia owns and has recommended Afterpay Limited, Appen Ltd, and 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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If you’re not yet invested in exchange traded funds (ETFs), you could be missing out.

For example, you only need to look at the market beating returns from these ETFs to see how they could have complemented your portfolio.

Here’s what you need to know about these ETFs:

VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)

The first market-beating ETF for investors to look at is the VanEck Vectors Morningstar Wide Moat ETF. This fund aims to invest in a group of companies with sustainable competitive advantages and attractive valuations.

Among the ~50 companies included in the fund are the likes of Alphabet, Amazon, American Express, Boeing, Coca-Cola, McDonalds, Microsoft, Philip Morris, Pfizer, and Salesforce.

Companies with competitive advantages have historically generated strong returns for investors. It is for this reason that Warren Buffett looks for these advantages when choosing his investments.

Over the last five years, the index the fund tracks has generated a return of 18.7% per annum. This would have turned a $10,000 investment into almost $23,500.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

Another market-beating ETF to consider is the Vanguard MSCI Index International Shares ETF. This ETF provides investors with exposure to the world’s largest listed companies.

Vanguard notes that this ETF provides Australian investors with exposure to many of the world’s largest companies listed in major developed countries. It also offers low-cost access to a broadly diversified range of stocks that allows them to participate in the long-term growth potential of international economies outside Australia.

Among its 1529 holdings are the likes of Apple, Johnson & Johnson, JP Morgan, Nestle, Procter & Gamble, and Visa.

Over the last five years, the index the fund tracks has generated a return of 15.2% per annum. This would have turned a $10,000 investment into almost $20,300.

The post 2 market-beating ETFs for ASX investors in January appeared first on The Motley Fool Australia.

More reading

• How did the VanEck Morningstar Wide Moat ETF (ASX:MOAT) more than double the ASX 200’s returns in 2021?
• Is the Vanguard MSCI Index International Shares ETF (ASX:VGS) the most diversified ETF on the market?
• 2 excellent ETFs for ASX investors to buy and hold
• 2 ETFs for ASX investors to check out this month
• 3 ASX ETFs for smart investors in 2022

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 Vanguard MSCI Index International Shares ETF. The Motley Fool Australia has recommended VanEck Vectors Morningstar Wide Moat ETF and Vanguard MSCI Index International Shares ETF. 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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Key points

• ASX real estate shares can provide exposure to the property market
• Charter Hall Long WALE REIT owns a large portfolio of commercial properties with long rental contracts
• Brickworks is a leader in the building products industry, whilst also owning other assets with growth potential

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Financial experts often talk about different asset classes like shares and property. But there are a number of ASX real estate shares out there that might be better options than property.

In other words, the ASX share market can provide exposure to real estate investments so investors can directly or indirectly profit from property.

With that in mind, here are two ideas:

Charter Hall Long WALE REIT (ASX: CLW)

This is a real estate investment trust (REIT) which owns commercial properties. Those properties are predominately leased to corporate and government tenants on long-term leases.

It’s invested in a number of core sectors like office, industrial and logistics and retail.

At the latest count its portfolio amounts to around 550 properties, with an occupancy rate of more than 98% and a property value of $7 billion. Its weighted average lease expiry (WALE) is more than 12 years, providing substantial income visibility and stability.

It has in-built growth with its rental contracts, providing growth for its rental profit and distributions.

The ASX real estate share is experiencing ongoing valuation growth thanks to the current environment, including the low interest rate. In its December 2021 update, the business saw an 8.1% rise of the property valuations on paper.

This update meant the net tangible assets (NTA) per unit grew 14.4% to $5.85. The current Charter Hall Long WALE REIT share price is around 15% less than the NTA.

Ord Minnett currently rates it as a buy with a price target of $5.46. It’s expecting the business to pay a distribution yield of 6.3% in FY23.

Brickworks Limited (ASX: BKW)

This real estate ASX share provides domestic housing exposure through its Australian building products business. It has a number of businesses including Austral Bricks, concrete products and Bristle Roofing. It has 28 manufacturing sites and more than 45 design centres and studios across the country.

Brickworks is a 50% shareholder in an industrial property trust with gross assets of more than $2.5 billion and a long development pipeline. One project, which is scheduled to essentially be done by now, is a big new distribution warehouse for Amazon in Sydney.

The company has expanded to North America and has established itself as the largest brickmaker in the northeast of the US.

It also has a major shareholding in Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), which is a leading listed investment conglomerate.

The real estate ASX share’s normal dividend has been maintained or increased every year since 1976. That’s 45 years of stability. Brickworks says it’s proud of its long history of dividend growth, and the stability this provides to shareholders.

Brickworks recently announced it had purchased 121 hectares of land at Bringelly in South West Sydney to be used as a clay resource to support Austral Bricks. Brickworks is also selling 75 hectares of land at Oakdale East where a brick plant is located into the property trust. This will extend the development pipeline in order to meet the unprecedented demand for industrial development.

It’s rated as a buy by the broker Ord Minnett, with a price target of $26.20.

The post These 2 ASX real estate shares could be the best way to invest in property appeared first on The Motley Fool Australia.

More reading

• An ASX XI to take on the world
• Why Brickworks (ASX:BKW) shares are an ASX dividend favourite
• Citi rates these 2 ASX dividend shares as buys
• What’s the outlook for the Brickworks (ASX:BKW) share price in 2022?
• Are these 2 excellent ASX dividend shares buys in January?

Motley Fool contributor Tristan Harrison owns Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Lake Resources N.L. (ASX: LKE) share price has been on fire over the last 12 months.

Since this time last year, the lithium developer’s shares have risen 900%.

This makes the Lake Resources share price one of the best performers on the Australian share market over the period.

Where next for the Lake Resources share price?

The good news is that one leading broker believes the Lake Resources share price still has plenty of gas in its tank and could drive even higher.

According to a recent note out of Bell Potter, its analysts have a speculative buy rating and $1.37 price target on its shares.

Based on the current Lake Resources share price of $1.00, this implies potential upside of 37% over the next 12 months.

Why is Bell Potter bullish?

The note reveals that Bell Potter is positive on Lake Resources due to its lithium exposure and strategic appeal. The latter is because of its uncommitted product offtake and independent share register.

Its analysts explained: “LKE is developing the Kachi lithium brine project located in north western Argentina. A March 2021 prefeasibility study evaluated a 25.5ktpa lithium carbonate project with average annual EBITDA of $260m and a post-tax NPV8 of US$1,580m.”

“Kachi is unique in that LKE is aiming to employ direct lithium extraction through ion exchange technology to recover lithium from its brine Resource. The key advantages of this technology are a smaller environmental footprint, lower carbon emissions and greater process control. A definitive feasibility study for Kachi is due by mid-2022. With uncommitted product offtake and an independent share register, LKE has strategic appeal,” the broker concluded.

If Bell Potter is on the money with its recommendation, it could be another year of market beating returns for the Lake Resources share price in 2022.

The post Why this ASX lithium share could be heading 37% higher appeared first on The Motley Fool Australia.

More reading

• Bell Potter names 2 ASX mining shares to buy in 2022
• The ASX share market coverage that captivated readers in 2021

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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Key points

• The fund manager Wilson Asset Management has revealed 2 small cap ASX shares that it likes
• Packaging business Pro-Pac Packaging is rated as a buy due to its good valuation
• DGL Group is liked thanks to the large rise in demand of Adblue and the company’s high barriers to entry

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The fund manager Wilson Asset Management (WAM) has recently identified two top small cap ASX shares that it owns in its portfolio that could be buy ideas.

WAM operates several listed investment companies (LICs). Some focus on larger companies like WAM Leaders Ltd (ASX: WLE) and WAM Capital Limited (ASX: WAM).

There’s also one called WAM Microcap Limited (ASX: WMI) which targets small cap ASX shares with a market capitalisation typically under $300 million at the time of acquisition.

WAM says WAM Microcap targets the most exciting undervalued growth opportunities in the Australian microcap market.

The WAM Microcap portfolio has delivered gross returns (that’s before fees, expenses and taxes) of 24.6% per annum since inception in June 2017, which is superior to the S&P/ASX Small Ordinaries Accumulation Index average return of 12%.

These are the two small cap ASX shares that WAM outlined in its most recent monthly update:

Pro-Pac Packaging Limited (ASX: PPG)

The Pro-Pac Packaging share price has been falling in recent months, however WAM still likes the business.

The fund manager attributed the poor performance to pressures from the Omicron COVID variant.

What does Pro-Pac Packaging do? It supplies a wide range of packaging products and services into industries such as primary produce, food and food processing, agriculture and fast moving consumer goods.

In the small cap ASX share’s December trading update, it noted it was experiencing labour shortages, inflationary pressures and ongoing global supply chain problems that are impacting the business.

WAM invested in the business because the fund manager was attracted by the valuation and management’s plan to reinvigorate revenue growth.

It’s expected that the COVID-19 impacts will eventually subside and WAM remains holders of the company within the portfolio based on its attractive valuation.

DGL Group Ltd (ASX: DGL)

One of the small cap ASX shares that featured in the WAM Microcap portfolio as a top 20 position was DGL Group.

This small cap ASX share was described as a founder-led company offering specialty chemical formulation and manufacturing, warehousing and distribution, waste management and environmental solutions to over 3,100 customers across Australia and New Zealand.

WAM noted that DGL Group recently held its first annual general meeting (AGM) where management confirmed that the business was on track to exceed its earnings expectations that were outlined in the prospectus with its initial public offering (IPO) in May 2021.

After the acquisition of AUSblue in October 2021, DGL Group has seen a surge in demand in the past month for diesel exhaust fluid AdBlue. This fluid reportedly removes nitrous oxides, which helps reduce harmful emissions and should provide a positive tailwind for earnings in the near-term.

The fund manager said that it invested in DGL Group due to its strong barriers to entry and its ability to pursue strategic and acquisitions that add to earnings, both of which “will underpin its growth profile over the years to come.”

The post 2 exciting small cap ASX shares to buy: experts appeared first on The Motley Fool Australia.

More reading

• 3 ASX shares giving the gift of gains heading into Christmas
• Wilson Asset Management believes these 2 leading small cap shares are a buy

Motley Fool contributor Tristan Harrison owns WAM MICRO FPO. 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 DGL 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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Investors that are interested in boosting their income portfolio with some dividend shares might want to look at the ones listed below.

Here’s what you need to know about these top dividend shares:

Accent Group Ltd (ASX: AX1)

The first ASX dividend share to look at is this footwear focused retailer. It owns a number of brands including The Athlete’s Foot, Platypus, and HypeDC, to name just three.

Accent has been growing at a strong rate over the last decade thanks to the popularity of these brands, the launch of new ones, and its expanding footprint. Pleasingly, all three drivers remain in place for the future.

And while FY 2022 is going to be a tough year because of lockdowns, Accent has been tipped to bounce back and resume its growth in FY 2023. For example, a recent note out of Bell Potter reveals that it expects the company’s profits to fall 25% to $57.3 million in FY 2022 before rebounding to $91.5 million in FY 2023. This is expected to lead to fully franked dividends per share of 9.1 cents and 13.5 cents, respectively.

Based on the current Accent share price of $2.19, this will mean yields of 4.15% and 6.15%, respectively. Bell Potter also sees plenty of upside potential with its price target of $3.05.

Telstra Corporation Ltd (ASX: TLS)

Another ASX dividend share to consider is telco giant Telstra. Although its shares have been in fine form over the last 12 months, a number of leading brokers don’t believe it is too late to invest.

This is due to the success of its transformational T22 strategy and the recent unveiling of its new T25 strategy. Analysts believe the latter will drive solid growth in the coming years, potentially putting Telstra in a position to increase its dividend for the first time in many years.

Goldman Sachs is very positive on the company. It currently has a buy rating and $4.40 price target on its shares. In respect to dividends, the broker is forecasting fully franked dividends per share of 16 cents in FY 2022 and FY 2023 before increases to 18 cents in FY 2024 and then 19 cents in FY 2025.

Based on the current Telstra share price of $4.22, this will mean yields of 3.8% for two years and then 4.25% and finally 4.5%.

The post 2 top ASX dividend shares to buy next week appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy next week
• Are these 2 cheap ASX shares undervalued?
• Here are the 3 most heavily traded ASX 200 shares this Friday
• The Telstra (ASX:TLS) share price has already hit multiple 52-week highs this year. What’s happening?
• Here are the 3 most heavily traded ASX 200 shares on Thursday

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 owns and has recommended Telstra Corporation Limited. The Motley Fool Australia has recommended Accent Group. 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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Key points

• Many leading ASX growth shares have seen price declines in recent weeks
• The REA Group share price has dropped 10% in 2022, but it’s seeing strong property listings
• The TechnologyOne share price has fallen around 15% in 2022, though its margins and cloud business continues to grow

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Some of Australia’s leading ASX growth shares have seen their share prices fall in recent weeks. Could that make them opportunities?

The operational performance of a business can be very different to how its share price performs year to year. Sometimes, investors can go from overly optimistic to being too pessimistic. The entire value of a company’s cashflows normally doesn’t change that abruptly in a short amount of time.

But volatility can open up opportunities for great businesses.

This is how analysts currently see the situation with these ASX growth shares:

REA Group Limited (ASX: REA)

The REA Group share price has fallen by around 10% since the start of the year.

REA Group is the owner of several digital real estate platforms in Australia including realestate.com.au, realcommercial.com.au and flatmates.com.au. It’s also invested in other areas other of the real estate world including mortgage broking with Smartline and property data with PropTrack.

It also has invested in property sites in other regions such as North America, South East Asia and India.

Citi currently rates the ASX growth share as a hold/’neutral’ with the volume of property listings returning. The broker’s price target is $175, which offers a potential rise of more than 10% over the next year. There is a concern that listings could fall back in the medium-term as interest rates rise.

However, there are other brokers that are a bit more positive on the business. For example, Macquarie rates REA Group as a buy with a price target of $192. That suggests a possible upside of more than 20%.

Based on Macquarie’s numbers, the REA Group share price is valued at 42x FY23’s estimated earnings.

TechnologyOne Ltd (ASX: TNE)

TechnologyOne is Australia’s largest enterprise software company with a global software as a service (SaaS) enterprise resource planning (ERP) offering. It has over 1,200 large corporations, government agencies, local councils and universities as clients.

Since the start of the year, the TechnologyOne share price has fallen by around 15%.

However, the business continues to see earnings growth and in November reported its FY21 result. It showed profit before tax increased by 19% to $97.8 million.

Total annual recurring revenue (ARR) rose 16% to $257.5 million, whilst SaaS ARR surged 43% to $192.3 million. In the UK, its SaaS ARR grew 20% to $9 million and it delivered a profit before tax of $1.6 million compared to a breakeven result last year. It sees “significant opportunities in the coming years.”

The ASX growth share says that it’s on track to reach $500 million of ARR by FY26.

The profit before tax margin increased to 31% during the year, with expectations that margins can rise to at least 35% in the coming years driven by the “economies of scale” of its ERP solution. TechnologyOne says that it’s on track to double the size of the business in the next five years.

TechnologyOne continues to invest in research and development. It invested $77 million in FY21, which was up 13%, as it invests in “new and exciting areas”.

Opinions are mixed on this technology company. Morgans rates it as a buy, with a price target of $13.73 – that’s a potential rise of more than 20%. The broker puts the current valuation at 40x FY23’s estimated earnings.

However, Macquarie thinks that TechnologyOne looks/looked expensive compared to others in the industry. That’s why it has a sell rating on the business with a price target of $11.

The post Are these 2 top ASX growth shares buys? appeared first on The Motley Fool Australia.

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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 recommended REA 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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