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Are you on the lookout for generous dividend yields? Well, I have good news if you are!

Two ASX dividend stocks that have been named as buys and are expected to provide big yields are named below. Here’s what analysts are forecasting:

Healthco Healthcare and Wellness REIT (ASX: HCW)

Healthco Healthcare and Wellness could be an ASX dividend stock to buy according to analysts at Morgans.

It is a real estate investment trust that invests in healthcare and wellness assets such as hospitals, aged care, childcare, and primary care properties.

Morgans is a fan of the company and is forecasting some attractive dividend yields in the coming years. It expects dividends per share of approximately 8 cents in both FY 2023 and FY 2024. Based on the current Healthco Healthcare and Wellness REIT unit price of $1.36, this will mean yields of 5.9% for investors.

Morgans has an add rating and $2.05 price target on its shares.

National Australia Bank Ltd (ASX: NAB)

Another ASX dividend stock that has been named as a buy is big four bank, NAB.

The team at Goldman Sachs is positive on the bank in the current environment. Its analysts note that this is because they see “volume momentum over the next 12 months as favouring commercial volumes over housing volumes and we believe NAB provides the best exposure to this thematic.”

Overall, the broker is expecting this exposure to underpin fully franked dividends of $1.66 per share in FY 2023 and FY 2024. Based on the current NAB share price of $26.19, this implies yields of 6.3% in both years.

Goldman Sachs has a buy rating and $30.69 price target on its shares.

The post These ASX dividend stocks have been tipped to offer big yields appeared first on The Motley Fool Australia.

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More reading

• Is it time to be a bull or a bear on NAB shares?
• Warren Buffett is dumping bank stocks. Should you?
• 2 ASX 200 dividend stocks brokers rate as top buys
• Bank of Queensland is offering the highest savings interest rate of any ASX bank. What might this mean for shareholders?
• NAB share price up amid following the leader on cashbacks

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 Scott Phillips.

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It turned out to be a fairly depressing Wednesday for ASX shares and the All Ordinaries Index (ASX: XAO) thus far. After bouncing around a fair bit over the course of the session, the All Ords ended the day’s trading in the red, recording a loss of 0.47%.

But let’s talk about one All Ords share that experienced something rather different.

Cettire Ltd (ASX: CTT) shares had a cracking day. This All Ords online luxury retail share closed at $1.78 a share yesterday. But this Wednesday saw the company add a pleasing 13.17% and finish up at $2.02 a share.

So what happened with Cettire that prompted investors to flood into this company today, all while flooding out of most other All Ords shares?

Why is the Cettire share price rocketing 13% today?

Well, it’s probably down to a couple of factors. The first is the trading update that Cettire released yesterday.

As we covered at the time, this revealed that the company was able to bring in sales worth $141.4 million over the first four months of 2023, up 122% on its 2022 numbers for the same period. April sales alone delivered a 160% rise over the same month last year. The company also reported adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) of “at least” $7 million.

Investors didn’t seem too impressed with these figures yesterday, though, and sent the Cettire share price down by 4.28%. That was despite the company being up by 11% at one point yesterday.  Perhaps the market had a change of mind today.

But the other factor that we have to consider was the ASX announcement Cettire released today.

It was short and sweet, so here it is in its entirety:

Cettire Limited… refers to recent press speculation in The Australian on 16 May 2023 relating to a potential sale of shares in the company by Founder and CEO Dean Mintz.

The Board has been informed by Mr Mintz that this speculation is unfounded and that he does not have any intention to sell shares in the company at the current time.

So perhaps investors were spooked by the prospect of the company’s CEO selling shares yesterday afternoon. With this statement, the market certainly seems to have gotten its mojo back regarding the Cettire share price.

The post All Ords share surges 13% after founder confirms no intention to sell stock appeared first on The Motley Fool Australia.

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More reading

• Guess which ASX All Ords share is rocketing 16% following a doubling in sales?

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

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The S&P/ASX 200 Index (ASX: XJO) had yet another day in the red on Wednesday. After only eking out a 0.1% gain on Monday and falling 0.4% yesterday, the ASX 200 recorded another loss for ASX investors today.

At market close, the Index finished down by a notable 0.49% at just under 7,200 points.

But let’s not allow that to get us down! It’s time for a distraction with a look at the shares that dominated the ASX 200’s share trading volume charts on Wednesday, according to investing.com.

The 3 most traded ASX 200 shares by volume this Wednesday

Sayona Mining Ltd (ASX: SYA)

First up today is the ASX 200 lithium stock Sayona Mining. This hump day has seen a decent 26.33 million Sayona shares swapped on the ASX.

There wasn’t any news out of Sayona itself this session that might easily explain why so many shares were flying around. However, there was a big move in the lithium stock’s share price that might explain it.

Sayona suffered a nasty fall today, dropping 4.44% to 21.5 cents a share. That’s despite the company making gains at one point today This drop, as well as the volatility we have seen, probably explains the high volume.

Pilbara Minerals Ltd (ASX: PLS)

Next up we have another ASX 200 lithium share in Pilbara Minerals. Sayona’s stablemate saw a sizeable 27.77 million of its shares change hands. Again, this looks like a byproduct of some serious volatility in the Pilbara share price.

Pilbara didn’t fare as badly as Sayona though but still nursed a 1.04% loss to $4.74 a share. However, Pilbara dropped as low as $4.70 a share this morning, before briefly rising into positive territory around midday. No wonder so many shares have been flying around.

Incitec Pivot Ltd (ASX: IPL)

Finally this Wednesday, let’s take a look at ASX 200 explosives and fertiliser manufacturer Incitec Pivot. A whopping 30.28 million Incitec shares were bought and sold on the ASX share market today.

This is almost certainly a result of the nasty share price drop we saw Incitec shares suffer. The company lost a meaty 7.84%, finishing the day at $2.94 a share. Incitec even got down to a new 52-week low of $2.86 earlier in the day as well.

This dramatic crash comes after Incitec Pivot released its latest half-year earnings. As we covered this morning, these earnings revealed an 8% slump in net profits and a 6% slide in earnings per share (EPS). It’s clear investors weren’t too impressed.

 

The post Here are the 3 most heavily traded ASX 200 shares on Wednesday appeared first on The Motley Fool Australia.

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More reading

• Why Appen, Best & Less, Incitec Pivot, and Weebit Nano shares are falling
• Incitec Pivot results: Here’s why this ASX 200 share is sinking 10% today
• Are ASX 200 lithium shares approaching a ‘tipping point’ for ripper revenues?
• 5 things to watch on the ASX 200 on Wednesday
• Here are the 3 most heavily traded ASX 200 shares on Tuesday

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 Scott Phillips.

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Rio Tinto Ltd (ASX: RIO) shares not only offer the potential for capital gains, but they can provide a pretty handy passive income stream to boot.

On the capital gains front, Rio Tinto shares are up 2% over the past 12 months. That compares to a one-year gain of 1% for the S&P/ASX 200 Index (ASX: XJO).

Of course, the above chart doesn’t include the passive income shareholders will have received from dividends.

Rio Tinto shares delivered a fully franked interim dividend of $3.837 per share, paid out on 22 September. Rio’s final dividend of $3.265 landed in shareholders’ bank accounts on 20 April.

At the current share price of $108.59, the ASX 200 miner trades at a trailing yield of 6.5%.

Or $327 in passive income from a $5,000 investment at today’s share price.

But what if you’d bought late in February 2022, shortly before Rio Tinto traded ex its final dividend for the year?

How much passive income have Rio Tinto shares delivered since February 2022?

Rio Tinto shares traded without rights to the final dividend on 10 March 2022.

On the back of soaring iron ore prices and frothy profits, passive income investors were rewarded with a record high final dividend of $6.628 per share. That was paid out on 21 April 2022.

If you’d bought $5,000 worth of shares a few weeks before the miner traded ex-dividend you would have banked that passive income as well.

On 25 February, the stock closed at $108.59.

That would have enabled you to buy 46 shares with enough change left over for some coffee.

You would also be eligible for all three dividend payments made over the past 16 months.

So, let’s work the numbers.

Each Rio Tinto share will have delivered a total of $13.73 in dividends.

So, your $5,000 investment last February would have returned a very tidy $631.58 in passive income already, with potential tax benefits from the franking credits.

The post Bought $5,000 worth of Rio Tinto shares last February? Guess how much passive income you’ve already grabbed? appeared first on The Motley Fool Australia.

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More reading

• How does the Fortescue dividend stack up against BHP and Rio?
• How big will the Rio Tinto dividend be next year?
• Could the iron ore price slide below $100 US dollars in 2023?
• Why are ASX 200 mining stocks having such a shocking end to the week?
• This ASX small-cap lithium share is leaping 13% on a deal with Rio Tinto

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

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record another decline. At the time of writing, the benchmark index is down 0.45% to 7,202.5 points.

Four ASX shares that are not letting that stop them from rising today are listed below. Here’s why they are racing higher:

Life360 Inc (ASX: 360)

The Life360 share price is up 3.5% to $6.70. Investors have been buying this location technology company’s shares after brokers responded positively to its first-quarter update. One of those was Bell Potter, which reiterated its buy rating with an improved price target of $9.00.

Pointsbet Holdings Ltd (ASX: PBH)

The Pointsbet share price is up 4% to $1.42. This appears to have been driven by a positive broker note out of Ord Minnett. According to the note, the broker has upgraded this sports betting company’s shares to a buy rating with a $1.70 price target. This follows news that the company is selling its US business to Fanatics Betting and Gaming for US$150 million.

Serko Ltd (ASX: SKO)

The Serko share price is up 29% to $2.73. This has been driven by the release of the travel technology company’s full-year results. Serko reported a 154% increase in total income to NZ$48 million. Pleasingly, another strong year is expected in FY 2024, with management guiding to total income of NZ$63 million to NZ$70 million. This represents an increase of 31% to 46% year over year.

Temple & Webster Group Ltd (ASX: TPW)

The Temple & Webster share price is up over 18% to $4.48. Investors have been buying this online furniture retailer’s shares following the release of a trading update. Temple & Webster revealed that its sales were up 10% over the prior corresponding period during the last four weeks. This is a big improvement on recent sales trends.

The post Why Life360, Pointsbet, Serko, and Temple & Webster shares are racing higher appeared first on The Motley Fool Australia.

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More reading

• 3 ASX 300 shares just upgraded by top brokers
• Guess which ASX tech share is rocketing 28% on huge full-year results
• 2 ASX All Ordinaries shares making big moves on trading updates
• Could ASX shares turn a $10,000 investment into $2,000,000?
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor James Mickleboro has positions in Life360. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360, PointsBet, Serko, and Temple & Webster Group. The Motley Fool Australia has recommended PointsBet, Serko, and Temple & Webster Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Tyro Payments Ltd (ASX: TYR) share price is in the green today.

Tyro shares are up 1%, currently fetching $1.515 each. For perspective, the S&P/ASX 200 Financials Index (ASX: XFJ) share price is 0.83% lower in afternoon trading.

Let’s take a look at what’s been happening at Tyro and the news out of Apple Pay today.

What’s going on?

Tyro is a fintech company developing payment solutions for businesses — online or in person.

ASX fintech companies are slightly up or down today, but not making any groundbreaking moves. For example, EML Payments Ltd (ASX: EML) shares are down 0.79%, while Zip Co Ltd (ASX: ZIP) shares are up 0.91%. Block Inc (ASX: SQ2) shares are sliding 1.08% at the time of writing.

In news today, Apple has introduced Tap to Pay for iPhone in Australia.

Local businesses — from market stall holders to retail stores and hospitality companies — will now be able to take in-person contactless payments via iPhones.

Apple vice president Jennifer Bailey said:

The convenience of Tap to Pay on iPhone empowers Australian businesses to offer easy, secure, and private contactless payment experiences to their customers, and help them run and grow their business.

Tyro Payments and Westpac Banking Corporation (ASX: WBC) are the first payment platforms delivering Tap to Phone on iPhone to customers.

Commenting on the news, Tyro CEO Jon Davey said:

Tap to Pay on iPhone is a fantastic, simple, and secure way for new or existing Tyro customers to accept payments using only their iPhone, anytime, anywhere — without the need for additional hardware.

We are excited to introduce this new offering to our customers, providing greater flexibility when staff are working onsite or are on the move. It couldn’t be simpler. Just download the Tyro BYO App to start accepting customer payments on your iPhone in minutes.

In December last year, Westpac pulled out of a takeover bid for Tyro, saying at the time: “Westpac has now undertaken due diligence on Tyro and has decided that submitting an offer is not in the best interests of Westpac shareholders at this time”.

However, Tyro said at the time it was still open to takeover talks provided it “represents compelling value”.

Tyro upgraded its full-year profit and earnings before interest, tax, depreciation and amortisation (EBITDA) guidance earlier this week. The company is now forecasting gross profit of between $192 million and $194 million for financial year 2023. The company’s EBITDA is tipped to be between $41 million and $43 million.

Share price snapshot

The Tyro share price has soared nearly 44% in the last 12 months. In the last week, it has dropped around 3.5%.

Tyro has a market capitalisation of about $783 million based on the latest share price.

The post Tyro share price leaps amid Apple Pay news appeared first on The Motley Fool Australia.

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More reading

• Tyro share price slumps despite cost reductions delivering earnings guidance upgrade

Motley Fool contributor Monica O’Shea has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple, EML Payments, Tyro Payments, and Zip Co. The Motley Fool Australia has recommended Apple, Tyro Payments, and Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Over the past few years, Fortescue Metals Group Limited (ASX: FMG) shares have built up a reputation as one of the heavy hitters on the ASX when it comes to dividends. Fuelled by record iron ore prices, Fortescue was able to raise its annual dividend from $1.14 per share in 2019 to a record $3.58 per share in 2021.

If Fortescue kept up that level of dividend generosity, this ASX 200 miner would have a trailing dividend yield of 17.76% right now.

Alas, 2022 and 2023 so far have not been quite as kind to Fortescue investors as 2021 was.

So today, let’s check out how the Fortescue dividend compares to the company’s mining rivals in BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO).

As we’ve previously flagged, the Fortescue dividend has come back to earth since the highs of 2021. In 2022, the company paid out a total of $2.07 in dividends per share. And in 2023 so far, Fortescue’s March interim dividend came to 75 cents per share, down from last year’s interim dividend of 86 cents.

That 75 cents per share dividend, combined with last year’s final dividend of $1.21 per share, gives the Fortescue share price a trailing dividend yield of 9.72% on current pricing. That comes fully franked too, as is typical with Fortescue’s payouts.

How does the Fortescue dividend stack up against BHP and Rio?

Let’s compare all of that to ‘the Big Australian’, BHP. BHP’s dividend trajectory over the past few years has been similar to that of Fortescue. In 2019, BHP shares paid out $3.33 worth of dividends per share. This rose to $4.03 per share in 2021 and then to a record $4.63 in 2022.

However, BHP’s interim dividend for 2023 was a major downstep from the previous year, with the miner only forking out $1.36 per share, as opposed to the $2.08 investors bagged in March 2022.

Today, BHP shares have a trailing dividend yield of 8.95%, fully franked.

Like Fortescue, Rio Tinto’s dividends also peaked in 2021. We saw a similar path trodden by this ASX 200 miner, with dividends ramping up from $8.97 per share in 2019 to a record $12.77 per share by 2021 (that includes Rio’s special dividends).

But 2022 saw this decline somewhat, with the miner doling out a total of $10.47 in payouts last year. 2023’s final dividend also saw a drop, falling from $5.77 ($6.63 including the special dividend) in 2022 to the $3.26 we saw last month.

Today, Rio shares offer a trailing and fully-franked yield of 6.55%.

Foolish takeaway

So Fortescue is clearly the winner today when it comes to raw dividend yield. However, remember that a company’s dividend yield always reflects what it has paid out in the past, not what it will pay out in the future. It’s entirely possible that 2023’s remaining dividends push BHP over the top of Fortescue in terms of dividend yield.

Fortescue is also far more reliant on iron ore for its earnings, whereas BHP (and Rio to a lesser extent) have a more diversified earnings base of other metals.

But there’s no doubt that Fortescue, as well as BHP and Rio, have been absolute cash machines for ASX dividend chasers in recent years. It will be interesting to see what the rest of 2023 and 2024 hold in store for income investors.

The post How does the Fortescue dividend stack up against BHP and Rio? appeared first on The Motley Fool Australia.

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More reading

• Why the BHP dividend forecast has caught my attention!
• How big will the Rio Tinto dividend be next year?
• This fund manager thinks the BHP share price could reach $100!
• Is the Fortescue share price a buy for its 2024 dividend yield?
• Could the iron ore price slide below $100 US dollars in 2023?

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 Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) is having a disappointing session on Wednesday. In afternoon trade, the benchmark index is down 0.45% to 7,199 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

Appen Ltd (ASX: APX)

The Appen share price is down 8% to $2.12. This has been driven by the completion of the institutional component of the artificial intelligence data services company’s equity raising. Appen is raising a total of $60 million to fund its cost reduction program, provide balance sheet flexibility, and general working capital to support Appen’s return to profitability. The funds were raised at a 19.6% discount of $1.85 per new share.

Best & Less Group Holdings Ltd (ASX: BST)

The Best & Less share price is down over 4% to $1.86. This morning, this discount retailer released a trading update which revealed that its profits will be lower than expected in the second half. Based on results to date, management now expects to deliver pro forma net profit after tax of between $10 million and $12 million for half. This is down from its previous guidance of between $18 million and $20 million.

Incitec Pivot Ltd (ASX: IPL)

The Incitec Pivot share price is down 9% to $2.91. Investors have been selling this chemicals company’s shares after its half-year results fell short of expectations. Goldman Sachs notes that Incitec Pivot’s “1H23 Adj NPAT of A$353m was -8% lower yoy and -22% vs GSe and -23% vs Visible Alpha Consensus Data.”

Weebit Nano Ltd (ASX: WBT)

The Weebit Nano share price is down a further 3.5% to $5.88. This meme stock has started to catch the eye of short sellers with its sky high market capitalisation and lack of revenue. In addition, the company operates in a market which is dominated by tech giants with R&D budgets many times larger than the value of Weebit Nano.

The post Why Appen, Best & Less, Incitec Pivot, and Weebit Nano shares are falling appeared first on The Motley Fool Australia.

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More reading

• Incitec Pivot results: Here’s why this ASX 200 share is sinking 10% today
• 2 ASX All Ordinaries shares making big moves on trading updates
• Deja vu! Why is the Appen share price crashing 17% today?
• 5 things to watch on the ASX 200 on Wednesday
• Why Elders, Northern Star, Pointsbet, and Weebit Nano shares are sinking

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

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Stock in S&P/ASX 200 Index (ASX: XJO) maltster and takeover target United Malt Group Ltd (ASX: UMG) is defying the market’s downturn despite the company scrapping its interim dividend.

Right now, shares in United Malt are trading 1.61% higher at $4.42 on the release of the company’s first-half earnings.

Meanwhile, the ASX 200 is down 0.5%.

Stock in ASX 200 maltster soars despite binned dividend

Here are the key takeaways from United Malt’s half-year results:

• Revenue lifted 16% to $756.6 million
• Earnings before interest, tax, depreciation, and amortisation (EBITDA) slumped 17% to $38.3 million
• Underlying EBITDA came in at $52.7 million – a 1% improvement
• Posted an after-tax loss of $13.8 million – down from the prior period’s $6 million profit
• Basic earnings per share (EPS) came to a 4.6 cent loss
• Interim dividend scrapped

The company’s costs climbed over the six months ended 31 March. It recorded $5.6 million of costs from closing out ineffective currency hedges and exchange rate movements, as well as $2 million of one-off restructuring costs, and $6.8 million of software-as-a-service (SaaS) costs.

Meanwhile, lower demand for beer saw its processing segment’s sales disappoint in the first quarter. Though, higher barley prices and improved commercial terms saw the segment’s revenue rise 23% to $612.7 million.

What else happened last half?

Of course, the big news from the company last half was the takeover bid posed by Mallteries Soufflet. The French maltster offered $5 per stock to acquire its ASX 200 peer.

United Malt granted the suitor due diligence in March. As foretold in a trading update last month, it realised $3 million of one-off costs associated with the $1.5 billion takeover bid.

Its net debt increased 41% last half to $639.2 million, bringing its net debt-to-EBITDA ratio to 9.8 times. The company has received covenant amendments from its banks to accommodate the temporarily higher ratio.

Meanwhile, its net finance costs more than tripled to $16.4 million on the back of rising interest rates, higher barley inventory costs, and the cost of barley required for its new Inverness facility. The Scottish facility officially kicked off production in late March.  

What did management say?

Commenting on the news seemingly bolstering the ASX 200 stock today, United Malt managing director and CEO Mark Palmquist said:

While the first quarter of FY23 included a continuation of the challenges experienced in the prior year, our financial performance improved markedly during the second quarter.

As we indicated previously, our gross margins have also improved from the progressive implementation of enhanced pricing and commercial terms with our customers which came into effect from 1 January.

We expect this rate of financial improvement to continue into the second half as our contracts better reflect our improved commercial terms.

What’s next?

Looking forward, United Malt expected its underlying EBITDA to come in at $140 million to $160 million this financial year.

The ASX 200 stock will return dividends as its earnings improve. It continues to aim to distribute around 60% of its underlying net profit after tax (NPAT) to investors.

Meanwhile, Malteries Soufflet is continuing its due diligence. United Malt will keep investors in the loop on the prospective takeover.

United Malt stock outperforms the ASX 200

The United Malt share price has rocketed 26% since the start of 2023, compared to the ASX 200’s 4% lift.

The stock is also trading 11% higher than it was this time last year while the ASX 200 has risen just 1% in that time.

The post This ASX 200 stock is gaining after its dividend was binned. Here are all the details appeared first on The Motley Fool Australia.

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The AGL Energy Limited (ASX: AGL) share price is outperforming the S&P/ASX 200 Index (ASX: XJO) today amid one top broker raising its price target significantly on the ASX utilities share.

The AGL share price is $8.94 in early afternoon trading on Wednesday, up 1.13%.

Meanwhile, the ASX 200 is down 0.5%.

As reported in The Australian today, UBS has raised its share price target on AGL by 19% to $9.60.

A price target is a broker’s estimate of where an ASX share will be trading in 12 months’ time.

The new price target implies a potential upside of 7.4% over the next 12 months.

What’s the latest with the AGL share price?

It’s been one hell of a slog for AGL shares investors in recent years.

The stock has lost almost 60% of its value over five years, while the ASX 200 has climbed almost 20%.

That’s really tough to watch.

But big fluctuations in the share price are to be expected when a company is going through turmoil.

To recap, AGL generates and retails electricity and gas for residential and commercial use.

Last year, AGL’s previous management wanted to divide the company in two. It planned to siphon off AGL’s coal power stations and other high-carbon assets into a separate company.

A shareholder revolt followed, led by environmentalist and entrepreneur Mike Cannon-Brookes.

In 2023, the AGL share price is doing better, up 10.7% in the year to date.

What’s new with the company?

AGL is among the first ASX 200 companies forced to begin a significant business restructure to meet the challenges of global decarbonisation.

The world wants cleaner energy supplies, and meeting that demand is going to cost AGL a lot of money.

It’s hard to make a profit in such difficult times.

The last piece of price-sensitive news out of AGL was in February when it reported its 1H FY23 results.

The company revealed a 55% fall in its underlying net profit after tax (NPAT) to $87 million.

Argh, so painful.

AGL also reported a statutory loss of $1.08 billion, including $706 million of impairment charges (after tax) due to its accelerated decarbonisation plan.

But my Fool colleague Tristan points out that the price/earnings (P/E) ratio now looks quite low based on where the AGL share price is today.

He says he wouldn’t be surprised if the AGL share price rises by at least 20% over the next 15 months.

Plus, higher electricity prices could lead to improved dividends for long-suffering shareholders in FY24 and FY25.

AGL insiders also appear to be optimistic. Why else would nine directors be topping up their AGL shares?

The post Top broker upgrades AGL share price by 19% appeared first on The Motley Fool Australia.

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More reading

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• 4 ASX 200 directors buying and selling their company shares in the past week

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Bronwyn Allen has positions in James Hardie Industries Plc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended PointsBet. The Motley Fool Australia has recommended PointsBet. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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