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The Insurance Australia Group Ltd (ASX: IAG) share price has been suffering lately amid lawsuits, weather events, and business interruption claims.

In fact, the company’s stock is only 3% higher than its 52-week low of $4.21.

As of Tuesday’s close, the IAG share price is $4.34. And at that price, one expert believes the company is in a prime position to be acquired.

Here’s why Joseph Koh, portfolio manager of Schroders’ Australian equities team, has reportedly picked the company has “an appealing takeover target”.

Could the IAG share price herald takeover offers?

According to Koh, the IAG share price has been damaged by numerous happenings, but it’s not beyond repair.

That means it might be a tempting takeover target for other businesses.  

Koh told the Australian Financial Review (AFR) court decisions from business interruption cases that have plagued the company were “at worst mixed”. He continued:

[E]ven in cases where IAG may be liable, damages may well be quite limited given the large government handouts that supported businesses during COVID-19 lockdowns. On top of all that, IAG has already set aside a sizeable provision for potential business interruption claims.

The New South Wales Court of Appeal ruled that insurance companies have to pay businesses claims for pandemic related disruptions last year.

Additionally, a class action is being brought against the company for its handling of the business interruption case. Its subsidiary is also facing court action brought about by the Australian Securities and Investments Commission (ASIC).

Finally, the IAG share price was dragged 7% lower in early November when the company announced that severe weather events had put a bigger than anticipated dint in its bottom line. The AFR quoted Koh as saying:

On weather-related claims costs, it’s clear that some years will be worse than others, and over time this should either even out, or premiums in the industry will rise to reflect more disruptive weather patterns.

Right now, the IAG share price is 7.6% lower than it was at the start of 2021. It has also fallen 1.3% over the last 30 days.

The post It’s trading at around 9-year lows, could the IAG (ASX:IAG) share price be a takeover target? appeared first on The Motley Fool Australia.

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• Broker says sell: IAG (ASX:IAG) share price slumps 3.5%
• ASX 200 (ASX:XJO) midday update: CSL acquisition talks, Charter Hall guidance upgrade

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 owns and has recommended Insurance Australia 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 team at Bell Potter has been busy this week looking at its top ASX share picks for 2022.

On this occasion, I’m going to look at what the broker is saying about the banking sector. Here are its top picks in the sector:

Which ASX bank shares are buys?

Bell Potter notes that its top picks in the sector possess proven risk management capabilities, defensive qualities, strong growth prospects, and health balance sheets. The latter includes surplus capital that could eventually be returned to shareholders.

Those top picks are Australia and New Zealand Banking GrpLtd (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB). The broker has a buy rating and $30.00 price target on ANZ’s shares and a buy rating and $31.00 price target on NAB’s shares.

Based on the current ANZ share price, this implies potential upside of 9.2%. Whereas based on the latest NAB share price, Bell Potter’s price target suggests upside of 9%.

Don’t forget the dividends

The broker is expecting the banks to provide attractive fully franked dividend yields next year. Its analysts are forecasting a fully franked 4.7% yield for ANZ’s shares and a fully franked 5.1% yield for NAB’s shares.

This brings the total return on offer for both bank shares to approximately 14% over the next 12 months.

Bell Potter Analyst TS Lim, commented: “Our 2022 top picks once again possess proven risk management capabilities, defensive qualities including healthy balance sheets and surplus capital that could be returned to shareholders in due course, and strong growth prospects.”

“These companies have undergone massive transformation since the GFC to improve earnings quality and consistency. Our selection comprises two major banks. The longer term operating environment post COVID-19 remains positive for ANZ and NAB. Both are well-provisioned and well-placed to capitalise on post-pandemic opportunities in retail and SME banking,” Lim added.

The post Leading broker names the ASX bank shares to buy in 2022 appeared first on The Motley Fool Australia.

More reading

• What is the outlook for the ANZ (ASX:ANZ) share price in 2022?
• December has been a great month so far for the NAB (ASX:NAB) share price
• Could the CBA share price peak have been and gone?
• 2 ASX 200 dividend shares to buy
• 5 things to watch on the ASX 200 on Friday

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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Since the beginning of 2021, the Telstra Corporation Ltd (ASX: TLS) share price has risen from its past state of hibernation. Fuelled by the telco’s first net profit increase in five years, investors are hopeful of a return to growth.

The renewed optimism in one of Australia’s most recognisable blue chips has landed the company a 34.8% increase in value in 2021. This places the telecommunications giant as the fifth best-performing ASX-listed company in the S&P/ASX 20 Index (ASX: XJO).

While one good year is good, long-term shareholders would be wondering if this outperformance has the potential to continue. To determine what next year could look like for the Telstra share price, we review what analysts are expecting.

But first, let’s look into the company’s own roadmap for 2022.

What does Telstra have planned for the year ahead?

The plan for Telstra’s future was laid out for all to see at its T25 investor day on 16 November. While the event focused on a longer-term strategy around the company achieving a compound annual growth rate in the high-teens for its earnings per share during FY 2021 and FY 2025, it also touched on next year’s goals.

In short, Telstra plans to come good on six key priorities by the end of FY22, these include:

• Complete digitisation
• Group restructure
• 5G leadership
• Return Enterprise to growth
• Grow services business
• Deliver on cost reduction

These aims are on top of already drastic overhauls of the business since the introduction of the T22 plan. Since 2018, Telstra has been reshaped with a consolidation of its products from 1,800 to 20, removal of a third of its workforce, and $2.3 billion stripped from the company’s costs.

In speaking with The AFR, Telstra CEO Andy Penn has described his plans for the company loud and clear.

Penn said:

I’d say three things – one is that it’s absolutely front and centre about continuing to transform customer experience and just taking that to the next level. Secondly, it’s about growth, both within the core but also some of our new business investments are really starting to help to get some traction.

Making a call on the Telstra share price in 2022

One fund manager that is bullish on Telstra for the upcoming year is Pengana Capital’s Rhett Kessler. The experienced fundie recently labelled the telco a buy for the fund, naming Telstra one of its biggest holdings in the portfolio.

In describing his case for why Telstra is still appealing at its current share price, Kessler said:

We like the fact that the two main assets are the mobile phone network, and let’s face it, mobile data is the new oxygen. I have four kids. Try and take it away from them. So that’s a very good business, and they’re obviously good engineers, because they’ve got the best network, and they’re very good marketers because they managed to get a 15-20% premium for the same data that their competitors sell.

Dividend investors might also be gravitating towards the Telstra share price in 2022. According to analysts at Goldman Sachs, the company looks well-placed to grow its dividend in the coming years.

The post Is the Telstra (ASX:TLS) share price set to dial in another big year in 2022? appeared first on The Motley Fool Australia.

More reading

• 2 excellent ASX 200 dividend shares to buy
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Here’s why the Charter Hall (ASX:CHC) share price is leaping another 5% today
• These 3 ASX 200 shares are topping the volume charts this Monday
• Telstra (ASX:TLS) just rejoined this exclusive, top-10 club

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Telstra Corporation 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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With the S&P/ASX 200 Index (ASX: XJO) down more than 1% in the past month, there are some bargains out there as Santa once again prepares for his epic international package delivery gig.

Two experts this week named 3 ASX shares that they think are ready to rally.

Some sectors have been hit harder than others in recent weeks, so it’s no wonder one of the picks is projected to rocket up 41%.

Insurance ASX share with ‘pricing tailwinds’

Shares for QBE Insurance Group Ltd (ASX: QBE) have fallen about 7% since its mid-August peak.

Morgans investment advisor Jabin Hallihan still likes the look of the insurance giant though.

“QBE has increased insurance rates over the past year, which is likely to increase margins and underlying profit into 2022,” he told TheBull.

“Pricing tailwinds are evident.”

QBE shares closed Tuesday at $11.67, up 0.86%.

The dip in price over the past few months has now made QBE shares historically cheap.

“The stock is relatively inexpensive as it was recently trading on a forecast price/earnings multiple of 12.8 times for fiscal year 2022.”

Morgans has a price target of $13.70 for QBE, along with a juicy dividend yield of 4.2%.

Retailer with ‘brighter’ outlook

After an up-and-down year, Harvey Norman Holdings Limited (ASX: HVN) shares are currently up 6.6% for the year.

Burman Invest chief investment officer Julia Lee reckons the retail giant will leave its COVID-19 troubles behind as it heads into 2022.

“The retail giant sells big ticket items that shoppers want to see before buying,” she said.

“The outlook is brighter now that News South Wales and Victoria have emerged from lockdowns.”

Australian households have plenty of money saved up from staying home the past 18 months, which bodes well for Harvey Norman.

“Increased household savings is positive for Harvey Norman during the crucial Christmas shopping period. Internationally, all regions except Malaysia are generating growth.”

The Harvey Norman share price ended Tuesday at $5.06, down 1.56%.

‘Compelling valuation’: ASX share set to rise 41%

Major bank shares have had a terrible time the past few weeks.

Westpac Banking Corp (ASX: WBC) is no different, seeing its stock price fall more than 20% since late October.

But it’s the favourite among the big four, as far as Morgans is concerned.

“We believe WBC offers the most compelling valuation of the major banks,” said Hallihan.

“Our 12-month price target is $29.50 and we’re forecasting a dividend yield of 6.3 per cent.”

That target is a stunning 41% above the Tuesday afternoon price of $20.94.

Hallihan reckons Westpac has a significant advantage above the other 3 big banks.

“We prefer Westpac to the other major banks because it’s positioned relatively defensively due to its loan book skewed more towards Australian home lending,” he said. 

“The recently announced off market buyback is positive for shareholders, and is earnings accretive.”

The post 3 ASX shares to buy before Xmas (hint: one predicted to rise 41%) appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Is it a buy? Leading brokers analyse the Westpac (ASX:WBC) share price
• Could Harvey Norman (ASX:HVN) shares be a Christmas cracker of a buy?
• Could the CBA share price peak have been and gone?
• Goldman Sachs names 2 ASX 200 shares to buy

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Harvey Norman Holdings Ltd. 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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If you’re looking for income, then the ASX 200 could be a great place to start. The benchmark index is filled with quality companies that share a good portion of their profits with shareholders.

Two ASX 200 dividend shares that have been tipped as buys are listed below. Here’s what you need to know about them:

South32 Ltd (ASX: S32)

The first ASX 200 dividend share to consider is South32. It is a diversified mining and metals company producing alumina, aluminium, bauxite, energy and metallurgical coal, lead, manganese, nickel, silver, and zinc. It has also just added copper to its portfolio via a key earnings accretive acquisition in Chile.

Thanks partly to its exposure to aluminium, which is believed to be in the early stages of a multi-year bull market, analysts are expecting South32 to generate significant free cash flow over the coming years.

So much so, the team at Goldman Sachs is forecasting double-digit, fully franked dividend yields through to at least FY 2026. In light of this, the broker has a conviction buy rating and a $4.40 price target on its shares. This compares favourably to the latest South32 share price of $3.81.

Telstra Corporation Ltd (ASX: TLS)

Another ASX 200 dividend share to consider is Telstra. Thanks to the successful execution of its T22 strategy and the recently announced T25 strategy, it is expecting to return to growth at long last in the near future.

Telstra’s CEO, Andrew Penn, recently highlighted that T22 was based on transforming the company, whereas T25 will be about driving growth. He is targeting high-teens underlying earnings per share (EPS) compound annual growth rates (CAGR) from FY 2021 to FY 2025.

Morgans is very positive on Telstra. It currently has an add rating and a $4.55 price target on the company’s shares. The broker also expects fully franked dividends per share of 16 cents in FY 2022 and FY 2023.

Based on the latest Telstra share price of $4.11, this will mean 3.9% yields for investors.

The post 2 excellent ASX 200 dividend shares to buy appeared first on The Motley Fool Australia.

More reading

• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Here’s why the Charter Hall (ASX:CHC) share price is leaping another 5% today
• Where next for the South32 (ASX:S32) share price after rising 54% in 2021?
• These 3 ASX 200 shares are topping the volume charts this Monday
• Telstra (ASX:TLS) just rejoined this exclusive, top-10 club

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 has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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BHP Group Ltd (ASX: BHP) is getting the band back together! Well, sort of. At present, BHP is a dual-listed company. It’s Australia’s biggest mining company and one of the largest in the world. BHP has extensive iron ore operations, as well as interests in copper, coal and oil.

Ever since its merger with Billiton plc two decades ago, investors have had the option of buying the original ASX-listed BHP shares here in Australia. Or else BHP Group plc (LON: BHP) shares that are listed directly on the London Stock Exchange (LSX) in the United Kingdom. Other investors from South Africa and the United States also have the option of secondary shares. For example, the New York Stock Exchange’s BHP ADR (American Depository Receipt) listings.

The Big Australian comes home

But back in August, the ‘Big Australian’ announced that it would be going back to its roots. It confirmed that it will scrap its London dual listing. Here’s what BHP’s management had to say on why the company is pursuing ‘unification’:

We have regularly sought to streamline and improve our corporate and governance processes. Unification would further simplify the BHP corporate structure and shareholder registers, reduce duplication and streamline our governance and internal processes. 

Unification will enable one market capitalisation and one global pool of liquidity, with the same share trading via the Group’s listings on the Australian, London and Johannesburg stock exchanges and its NYSE listed ADR program.

So what does this mean for investors?

What happens to BHP shares after unification?

Well, for any British investors, the consequences are more apparent. With the delisting, BHP will be removed from London’s share market, and by extension, form the UK’s flagship FTSE 100 Index. But, as BHP clarified above, British investors will still be able to own BHP shares on the LSX via a secondary listing. That’s similar to what already exists for American investors. They will also be given the option of receiving 1 ASX BHP share for every LSX BHP share owned.

For ASX investors, it means a whole lot of not much. There will simply be more shares available on the ASX to compensate for the lack of primary shares on the LSX. But, all other things remaining equal, BHP’s market capitalisation (a.k.a. share price) will not change. Nor will its dividends, earnings or any other fundamental trait of its business. BHP has told investors that “If approved, unification is expected to occur in the first half of the 2022 calendar year”.

So pencil that into your 2022 investing calendar!

The post What will happen to BHP (ASX:BHP) shares after the dual listing is axed? appeared first on The Motley Fool Australia.

More reading

• What’s boosting the BHP (ASX:BHP) share price 2% higher today?
• These are the 10 most shorted ASX shares
• Analysts say these high yield ASX dividend shares are buys
• Evergrande officially defaults, downgraded by Fitch. What next?
• BHP (ASX:BHP) share price in focus amid unification proposal

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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Looking for some small cap shares to buy? Then have a look at the ones listed below.

Here’s why they could be worth getting better acquainted with:

Ai-Media Technologies Ltd (ASX: AIM)

The first small cap to watch is Ai-Media Technologies. Its cloud-based technology platform provides live and recorded captioning, transcription, subtitles, translation and speech analytics to customers across the ANZ, North American, EMEA and Asia markets. These customers range from universities, schools, government and non government organisations, SMEs and individual content producers, events, global and domestic broadcasters and OTT streaming services.

Bell Potter is positive on the company. It currently has a buy rating and $1.50 price target on its shares. This compares to the latest Ai-Media Technologies share price of 72.5 cents.

Bigtincan Holdings Ltd (ASX: BTH)

Another small cap to watch is Bigtincan. It is a provider of enterprise mobility software that allows sales and service organisations to improve mobile worker productivity through smart devices. The company notes that global businesses including Nike, Guess, Prudential, and Starwood Hotels trust Bigtincan to enable customer-facing teams to intelligently prepare, engage, measure and continually improve the buying experience for their customers.

Morgan Stanley is a fan of Bigtincan and has an overweight rating and $2.10 price target on its shares. This is notably higher than the current Bigtincan share price of 98.5 cents.

Serko Ltd (ASX: SKO)

A final small cap to watch is this online travel booking and expense management provider. Serko recently raised NZ$75 million to support its growth strategy. This includes Serko’s global marketplace strategy, which is aiming to transform the company from an online booking tool into a distributed marketplace.

Ord Minnett appears pleased with these plans. It recently retained its buy rating and lifted its price target on Serko’s shares to $8.10. This compares to the current Serko share price of $6.49.

The post 3 buy-rated small cap ASX shares with major upside potential appeared first on The Motley Fool Australia.

More reading

• 2 small cap ASX shares to get excited about
• 2 exciting small cap ASX shares named as buys
• Why Creso Pharma, Hansen, Life360, and Serko shares are falling
• Here’s why the Serko (ASX:SKO) share price is crashing 10% lower today
• Serko (ASX:SKO) share price halted amid H1 FY22 results and cap raise

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 BIGTINCAN FPO and Serko Ltd. The Motley Fool Australia has recommended BIGTINCAN FPO and Serko 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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Ask A Fund Manager

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In this edition, Eley Griffiths portfolio manager Nick Guidera picks 3 ASX shares that are ready to shoot up in 2022.

Hottest ASX shares

The Motley Fool: What are the 3 best stock buys right now?

Nick Guidera: One that might be less familiar to your readers is Tuas Ltd (ASX: TUA). 

Following the merger between TPG Telecom and Vodafone in June 2020, the Singapore mobile business that TPG owned at the time was demerged from the broader group and transferred into a business known as Tuas. 

That listed entity now is a significantly growing telco… going after the Singapore mobile market. 

If investors can cast their mind back to the early days of TPG, TPG came in to disrupt the core telcos of Telstra Corporation Ltd (ASX: TLS) and Optus — and Vodafone to a lesser extent — offering cheap plans and good coverage, and an affordable solution for [an] area of the market that perhaps wasn’t being looked after. 

That playbook is effectively being rolled out in Singapore by the former TPG team. As they look to take share in that market, they’ve spent the last few years building out their coverage.

They recently reached EBITDA break-even, and in their most recent quarterly update at their AGM last week, they indicated that they were making money at the EBITDA line, as well as growing subscribers. 

Probably the most interesting thing about the business is the plans that they’re offering, I’ve been told, they’re at least one-tenth of the price of some of the competitors out there. It’s no wonder they’re taking share, but they’re doing it in a profitable way as demonstrated by [their] last quarter. 

I think that’s a really interesting one and one that while it’s had a good run, there’s a long way to go in that story.

MF: Your second one?

NG: The second one is a sector that has struggled this year, but I think is particularly interesting, and that is DDH1 Ltd (ASX: DDH). DDH1 is a drilling business based out of Perth, WA. They have a significant amount of market share across hard rock commodities, and they provide drilling services for the likes of Fortescue Metals Group Limited (ASX: FMG), Rio Tinto Limited (ASX: RIO), BHP Group Ltd (ASX: BHP) and gold mining companies as well. 

They have had a very positive start to FY 22. Their utilisation of their drilling rigs has picked up substantially and they are also continuing to increase their pricing because of the demand for their drilling services across miners, who are looking to expand production, as they look to recycle mines. 

They recently announced the acquisition of Swick Mining Services Ltd (ASX: SWK), which is another mining company, to expand their fleet and to in-house some of the maintenance that they’re currently outsourcing.

If you look at the competitors globally, like Major Drilling Group International Inc (TSE: MDI), they’re saying quotes like “given the history of a mine cycle and the projected near term supply deficit for many mining commodities, I believe we’re in the early stages of a significant mining industry upcycle” — and that’s come from the CEO of Major Drilling, which is one of the largest drillers globally, listed in Canada. 

Given this is the exposure to Australian mining, and I think the sector’s ripe for attention as miners who have made a lot of money through the iron ore booms and lithium booms and the gold booms from recent years, look to restock that production. The easiest way they do that is through incremental drilling and these guys are very well placed.

MF: And your final pick?

NG: The third one is Wisr Ltd (ASX: WZR). Wisr is an interesting small company that is one of the fastest-growing consumer finance fintechs. They have a highly automated digital lending and wellness platform that services prime borrowers. They’ve got really compelling unit economics, in terms of they continue to lower their funding costs, which will ultimately drive improved EBITDA margins. They’ve got a really big runway for growth as they take share away from the incumbent banks who are focusing less on personal loans. 

They’ve done it in a way where they’re not just trying to gouge the customer with high interest rates. They’re actually trying to encourage customers to look at their financial wellness through their tools that they’re offering. They’ve got, I think, more than 450,000 users in their financial wellness ecosystem which they can then use to sell their lending products to. And as the world opens up, there should be some good demand for personal credit to go on holidays, to deal with life events like weddings, and to purchase new cars.

With a really strong management team and a growing loan book — and this stock has been knocked about not dissimilarly for the last 3 or 4 weeks on the fact that it is relatively early stage — I think it looks pretty interesting.

MF: Wisr shares were headed up earlier this year, but it’s come down a little bit in recent weeks, hasn’t it?

NG: It has. I think it’s one of those stocks that were probably subject to some profit-taking. Little fundamentally wrong with the business, just a market that’s a little bit more conservative and people wanting to allocate capital differently.

MF: Do you ever worry with these lending businesses about the amount of ongoing capital they require?

NG: Well, the beauty of Wisr’s model is they have a warehouse arrangement with a number of the large major banks. Because the major banks can’t access the personal loan market as efficiently as perhaps some of these new fintech digital offerings, they’re partnering with these emerging companies like Wisr and offering their balance sheet to help with that funding requirement. 

In a way, the actual funding requirement from Wisr specifically is less than what it would be, not having these warehouse funding arrangements. Should the financial system melt down or there be a credit crunch of sorts then, yes, certainly these businesses are vulnerable. But for the moment, with a growing appetite for banks to expand how they lend, I think businesses like Wisr are pretty well-positioned.

The post 3 obscure ASX shares ready to rocket: expert appeared first on The Motley Fool Australia.

More reading

• 5 ASX telco shares this expert loves right now
• Here’s why the Tuas (ASX:TUA) share price is leaping 10% to a record high on Friday
• Tuas (ASX:TUA) share price surges again, up almost 30% this week. Here’s why
• Why Bellevue Gold, South32, Starpharma, and Tuas shares are pushing higher
• Tuas (ASX:TUA) share price jumps 5% on acquisition news

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Telstra Corporation 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 Macquarie Group Ltd (ASX: MQG) share price is in focus because its Green Investment Group (GIG) is going to work with Nobian to form an industrial green hydrogen player called Hydrogen Chemistry Company, or HyCC for short.

GIG is the green finance institution of Macquarie that is involved in things like development, finance, investment and advice for clients and partners.

Hydrogen Chemistry Company (HyCC)

The goal of HyCC is to provide safe, reliable, and affordable green hydrogen solutions to help decarbonise industrial sectors such as aviation, steel, chemicals and refineries.

This business will specialise in producing green hydrogen from renewable power at an industrial scale.

GIG and Nobian will each get a 50% share in HyCC and the deal is expected to close in March 2022, subject to regulatory approvals.

The Green Investment Group outlined that when combining Nobian’s experience in large-scale electrolysis and GIG’s resources and project development experience, HyCC will be able to accelerate investments and the development of more large-scale projects.

GIG said in a statement that HyCC will have a pipeline of more than 400 MW of electrolysis projects.

One of the planned projects is a 60 MW facility in the north of the Netherlands to supply green hydrogen for renewable methanol and aviation fuels

Next, is a 100 MW project near Amsterdam to enable sustainable steel production, and a 250 MW project in Rotterdam to replace fossil-based hydrogen.

The deal will allow HyCC to grow this pipeline and expand further into the European market.

GIG and Macquarie expect that there will be a rapid acceleration in the energy transition, so the chance to invest alongside Nobian is “exciting” and will help industries to become more sustainable.

Leadership commentary

Michael Koenig, the CEO of Nobian said:

We have a strong technical and commercial team and a healthy pipeline of large green hydrogen projects. The backing of these two leading companies allows us to further scale-up our portfolio to become a leader in the safe and reliable supply of green hydrogen and make a critical contribution to the EU’s target of realizing 40 GW of hydrogen electrolysers by 2030.

The managing director of HyCC, Marcel Galjee, said:

GIG has already announced hydrogen partnerships in a number of different geographies with a focus on supporting the industrial transition and the move to cleaner fuels. Nobian already operates multiple large-scales electrolysis facilities in the Netherlands and Germany for the production of chlor-alkali, using a technology similar to that of water electrolysis.

Macquarie share price snapshot

The Macquarie share price has risen 46% in 2021 to over $200. 

The post Macquarie (ASX:MQG) share price on watch with GIG green hydrogen strategy appeared first on The Motley Fool Australia.

More reading

• Why is the Macquarie (ASX:MQG) share price having such a good month so far?
• Is the CSL (ASX:CSL) share price great value? Here’s what analysts think
• 2 ASX shares that tick all the right boxes for the long term: expert
• How did the Macquarie (ASX:MQG) share price stack up in November?
• Did the Rio Tinto (ASX:RIO) share price start a recovery in November 2021?

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 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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S&P/ASX 200 Index (ASX: XJO) dividend shares could be a fertile ground for investors look for income.

Businesses with strong market positions and attractive dividend payout ratios can translate into being good ASX dividend shares.

These two businesses have a focus on cash payouts to shareholders:

Coles Group Ltd (ASX: COL)

Coles is one of the biggest supermarket businesses in Australia. It generates earnings from Coles Express service stations as well as other businesses like the 900 liquor stores it operates across Liquorland, Vintage Cellars, First Choice Liquor and First Choice Liquor Market.

The COVID-19 period has been a significant period of demand and sales, though lockdowns have now seemingly ended, certainly in the Australian states with the biggest populations. The Coles share price has dropped around 5% since 23 November 2021, boosting the potential dividend yield on offer.

Citi thinks that Coles is currently rated as a buy because the broker feels that it will take longer than expected for supermarket demand to reduce to a more normal level.

The broker is expecting Coles to grow its dividend materially over the next couple of years. The projected FY23 grossed-up income yield from the ASX 200 dividend share is expected to be 5.9%.

Despite the large growth of supermarket sales in FY21, FY22 has (or had) continued to showed growth in the first quarter. In the FY22 first quarter, supermarket sales were up 1.8% to $8.6 billion and up 11.9% over two years.

In the first four weeks of the second quarter, supermarket sales were broadly in-line, whilst COVID-19 related costs were said to be reducing over the last couple of months.

Brickworks Limited (ASX: BKW)

Brickworks is a leading ASX 200 dividend share.

The company says that there are two assets that fund its dividend, which hasn’t been cut for over four decades.

The first asset is its large holding of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shares. This investment conglomerate owns shares in a number of different ASX shares including Brickworks, TPG Telecom Ltd (ASX: TPG), New Hope Corporation Limited (ASX: NHC), Pengana International Equities Ltd (ASX: PIA), Clover Corporation Limited (ASX: CLV) and Tuas Ltd (ASX: TUA). It also owns unlisted businesses too, providing more diversification.

Brickworks’ other asset that funds its dividend is the joint venture industrial property trust.

Those properties are experiencing strong valuation increases as more businesses look for key logistics and distribution properties.

In a recent update, Brickworks said that it is expecting to report record earnings for its property business.

Construction of the huge Amazon facility is due for completion at the end of December 2021, which should lead to a material increase of rental profit and the valuation. The property trust is also building a huge warehouse for Coles.

It also announced the purchase of 121 hectares in South West Sydney, which will be used as a clay resource to support Austral Bricks operations in Sydney, effectively replacing the existing clay resource at Oakdale East. This will allow 75 hectares of land to be released at Oakdale East, which will be sold into the property trust, resulting in a sale profit and extending the development pipeline to meet the unprecedented demand for industrial development.

At the current Brickworks share price, it has a trailing grossed-up dividend yield of 3.5%.

The post 2 top ASX 200 dividend share picks for income appeared first on The Motley Fool Australia.

More reading

• Is the Brickworks (ASX:BKW) share price a buy? Leading brokers weigh in
• Why is the Coles (ASX:COL) share price sinking 4% today?
• Why AVZ, Brickworks, Charter Hall, and Senex shares are storming higher
• Brickworks (ASX: BKW) share price lifts 3% on record forecast property earnings
• ASX 200 (ASX:XJO) midday update: CSL acquisition talks, Charter Hall guidance upgrade

Motley Fool contributor Tristan Harrison owns Pengana International Equities Limited and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Brickworks and Clover Corporation Limited. The Motley Fool Australia owns and has recommended Brickworks, COLESGROUP DEF SET, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended TPG Telecom 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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