Tag: Motley Fool

Evolution Mining Ltd (ASX: EVN) shares have performed steadily over the last five years. The gold miner’s stock has risen 21.5% since May 2018.

An investor sinking $5,000 into the stock back then likely would have snapped up 1,607 shares, paying $3.11 apiece.

Today, that holding would be worth $6,074.46. The Evolution Mining share price last traded at $3.78.

For comparison, the S&P/ASX 200 Index (ASX: XJO) has gained 19.2% over that time.

In the meantime, the gold miner has been a regular provider of dividends. Let’s dive into the dividend income realised by shareholders over the last five years.

All dividends paid to those holding Evolution Mining shares since 2018

Here are all the dividends offered to those invested in Evolution Mining shares over the last five years:

Evolution dividend pay date	Type	Dividend amount
August 2022	Final	3 cents
March 2022	Interim	3 cents
September 2021	Final	5 cents
March 2021	Interim	7 cents
September 2020	Final	9 cents
March 2020	Interim	7 cents
September 2019	Final	6 cents
March 2019	Interim	3.5 cents
September 2018	Final	4 cents
Total:		47.5 cents

As the chart above shows, each Evolution Mining share has yielded 47.5 cents in dividend income since May 2018. That means our figurative investment has brought in $763.32 over its life.

Considering both share price gains and dividend income, the stock has likely provided a total return on investment (ROI) of around 37%.

And that’s before factoring in any possible tax benefits brought about by franking credits or potential compounding returns if one were to have reinvested their dividends.

Evolution shareholders also have their next payment to look forward to. The ASX 200 miner will send out its 2-cent per share, fully franked interim dividend next month.

Right now, Evolution Mining shares offer a 1.32% dividend yield.

The post Did you invest $5,000 in Evolution Mining shares in 2018? If so, here’s how much dividend income you’ve earned appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Monday
• What’s the gold price forecast for the remainder of 2023?
• 5 things to watch on the ASX 200 on Thursday
• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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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One leading broker appears to believe that the REA Group Ltd (ASX: REA) share price could have peaked for the time being.

As a result, its analysts have downgraded the ASX 200 stock to a hold rating this morning.

Why has this ASX 200 stock been hit with a downgrade?

According to a note out of Morgans, its analysts have downgraded this property listings company’s shares to a hold rating on valuation grounds.

Although the broker responded to REA Group’s third-quarter update by increasing its price target by 9% to $145.00, this is only modestly higher than where the ASX 200 stock currently trades.

As a result, the broker feels that its shares are about fair value and investors ought to wait for a more attractive entry point.

What did the broker say?

Morgans highlights that REA’s third-quarter update revealed that trading conditions have got tougher. It commented:

REA has released its 3Q23 trading update. It was broadly a tougher quarter overall for the group, as it cycled a very strong pcp with volumes continuing to be impacted by the challenging macro. 3Q23 revenue of A$269m was down 3% on pcp with a weaker Aus resi (revenue -6% on pcp) partially offset by a strong India performance (revenue +63% on pcp).

As a result of the above, the broker feels the company is unlikely to achieve consensus expectations in FY 2023. It adds:

For the 9 months FY23TD, group revenue is A$887m (+2% on pcp), which implies a ~15% 4Q23 sequential growth performance is needed to meet current FY23 Visible Alpha consensus of ~A$1.2bn. Group operating expenses of A$133m for the quarter are up 9% on pcp (largely related to planned REA India investment and tech costs), with core Australia operating cost growth relatively constrained at +3% for the quarter. Operating EBITDA (ex assoc.) of A$136m is down 13% on the pcp.

Still a high quality company

It is worth noting that Morgans still believes that REA Group is one of the highest quality ASX 200 stocks around, despite its downgrade. However, it just feels that its valuation is getting full now. The broker concludes:

REA remains one of the highest quality franchises in our coverage with a management team that continues to execute well. However, with near term listings headwinds impacting topline growth and the stock now on ~39x FY24F PE (~1 standard deviation above its 10-year average), we believe the stock to be closer to fair value. We move to a Hold recommendation.

The post Why did Morgans just downgrade this popular ASX 200 stock? appeared first on The Motley Fool Australia.

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More reading

• REA shares fall as costs take a bite out of bottom line
• 5 things to watch on the ASX 200 on Friday
• Top broker tips 7 ASX 200 property-related shares to cash in on the 2023 budget
• 3 ASX 200 stocks I’ll be watching like a hawk in May
• Don’t get duped: Why cheap ASX shares can still rip you off

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 recommended REA 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 Woolworths Group Ltd (ASX: WOW) share price has been a strong performer since the start of the 2023 calendar year, gaining 17%. It has soundly beaten the S&P/ASX 200 Index (ASX: XJO), which has risen by 4.5% in the year to date.

For an ASX blue chip share to outperform the ASX 200 by more than 12% in a relatively short period of time is an impressive performance in my opinion.

The market typically pays the most attention to a company’s most recent update and outlook commentary, so what happened in 2022 is old news. Let’s start by looking at what Woolworths reported in the third quarter of FY23 and then decide if its current valuation makes investment sense.

Sales recap

Woolworths saw Australian food sales increase by 7.6% to $12.3 billion, while total sales increased 8% to $16.3 billion. Other parts of the business include its New Zealand food sales (up 7%), BIG W sales (up 5.7%), and business-to-business sales (up 16.4%).

It was a very solid quarter of growth for the business. However, it’s worth noting that Woolworths supermarkets got a boost from the 5.8% change in average prices. It blamed this inflation on supplier cost price increases.

There was positive news, however, with improved fruit and vegetable growing conditions and lower livestock prices. Woolworths also said the cycling of inflation in the prior year contributed to its slowdown in the third quarter compared to the second quarter rate of 7.7%.

The ASX share market is usually forward-focused, so the outlook is likely what investors are paying attention to the most when it comes to the Woolworths share price.

Outlook

Woolworths CEO Brad Banducci revealed in the first weeks of the fourth quarter of FY23, sales trends had “been in line with Q3 with solid sales growth” in the supermarkets, with growth moderating in BIG W.

It’s seeing signs of overall food inflation “moderate” but in many areas, inflation remains “frustratingly elevated”, according to Banducci.

Woolworths said that it’s going to continue to work hard to provide customers with “great value” across the shopping basket, including affordable protein, leveraging its own and exclusive brands, among other strategies.

My verdict on the Woolworths share price

I don’t think it’s too surprising that Woolworths has been a strong performer because its sales (and presumably profit) have benefited from inflation — and that inflation seems to be continuing.

With the economic outlook uncertain, given the run of interest rate increases and inflation, investors appear to be seeking the safety of defensive ASX shares.

Also, Australia’s population continues to grow, which is a helpful tailwind for Woolworths’ earnings in the coming months and years in my view as there are simply more potential customers to feed.

According to estimates on Commsec, the Woolworths share price is valued at 28 times FY23’s estimated earnings. The projections also suggest that earnings per share (EPS) could rise by 16% to FY25. Over the long term, share prices usually follow profit, so profit growth is a promising prospect for Woolworths shareholders.

However, with the business close to its 52-week high, as we can see on the chart below, it’s possible that there could be a cheaper share price later this year if investors are prepared to be patient.

The post Up 17% in 2023, are Woolworths shares still worth buying? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Monday
• Green skies ahead: These 2 ASX 200 stocks upgraded their earnings guidance this week
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Friday
• What’s the 5-year forecast for commodity prices and ASX 200 mining shares?

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

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The leading investors from Wilson Asset Management (WAM) have shared thoughts on two S&P/ASX 200 Index (ASX: XJO) shares.

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

Meanwhile, WAM Capital Limited (ASX: WAM) targets “the most compelling undervalued growth opportunities in the Australian market”.

But does WAM have a claim of stock-picking pedigree? The WAM Capital portfolio has delivered an investment return of 15% per annum since its inception in August 1999. That’s before fees, expenses, and taxes. This gross return outperformed the All Ordinaries Accumulation Index (ASX: XAOA) return of 9% per annum over the same timeframe.

With that in mind, here are the two ASX 200 shares WAM Capital has outlined in its recent monthly update.

Nextdc Ltd (ASX: NXT)

WAM described Nextdc as an independent data centre operator which builds and delivers the infrastructure platform for the digital economy.

The Nextdc share price went up around 10% in April, as we can see on the below chart.

WAM pinpointed the rise for the ASX 200 share on its announcement that its contracted utilisation had increased by 43% since 31 December 2022.

The fund manager also pointed out that the company announced that it had successfully secured further contract wins and its new S3 data centre is now at 46% of total planned capacity.

In explaining why it was a top 20 position in the WAM Capital portfolio and the positive view on the business, WAM said:

We are pleased to see Nextdc’s customer growth and we look forward to the progressive realisation of revenue from these new customer contract wins from late FY2024 to FY2029.

HMC Capital Ltd (ASX: HMC)

WAM described HMC Capital as a diversified alternative asset manager which “invests in high conviction and scalable real asset strategies.”

The fund manager noted that in April HMC Capital successfully completed its oversubscribed $30 million share purchase plan (SPP) as well as its fully underwritten $125 million institutional placement.

The HMC Capital share price went up by around 9% in April, as can be seen in the chart below.

The ASX 200 share is planning to use the raised money to fund its commitment to the capital raising announced by one of its funds, Healthco Healthcare and Wellness REIT (ASX: REIT), which is a real estate investment trust (REIT). Some of the money will also be used to “provide an equity backstop for the new unlisted fund.”

The investment team explained why they were impressed by the HMC Capital business:

These accomplishments showcase HMC Capital’s ability to secure capital amidst challenging market conditions and support the company’s goal to achieve $10 billion in assets under management by December 2023, and subsequently $20 billion thereafter.

The post 2 ASX 200 shares this fund manager is backing with major growth plans appeared first on The Motley Fool Australia.

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More reading

• Brokers name 3 ASX shares to buy now
• NextDC share price halted amid $618 million cap raise
• Goldman Sachs just added this ASX All Ords tech share to its conviction list
• Wesfarmers share price on watch amid $169m Silk Laser takeover offer
• Why this fund manager thinks these 2 outperforming ASX shares can keep beating the market

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

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The QBE Insurance Group Ltd (ASX: QBE) share price was out of form on Friday.

The insurance giant’s shares dropped almost 4% to end the week at $14.61.

Investors were selling down the QBE share price after the company’s first-quarter trading update revealed a couple of items that overshadowed an otherwise strong start to the year.

In light of this, investors may be wondering if a buying opportunity has opened up. Let’s find out.

Should you buy the QBE share price dip?

The team at Morgans remains positive on QBE following its update.

And while the broker described the quarter as a “blip”, its analysts “still see the fundamental story of QBE’s earnings improving strongly over the next few years as intact.”

According to the note, the broker has retained its add rating with a trimmed price target of $16.50.

Based on the current QBE share price, this suggests potential upside of 13% for investors over the next 12 months.

And of course, QBE is traditionally a big dividend payer. Pleasingly, Morgans doesn’t expect this to be any different this year. It is forecasting a 5.8% dividend yield for investors, boosting the total potential return to almost 19%.

What did the broker say?

Morgans remains positive and sees plenty of value in the QBE share price despite the mixed quarter. It explained:

QBE has given a 1Q23 performance update. Overall FY23 GWP growth guidance has been increased to +10% on the pcp (up from mid-to-high single digit growth previously), but disappointingly combined operating ratio guidance has also been lifted to 94.5% (previously 93.5%) due to higher CAT claims and a prior year reserve top up. We downgrade QBE FY23F/FY24F EPS by 3%-5% reflecting higher current year claims forecasts and more conservative outer year earnings estimates. Our PT is set at A$16.50.

Whilst higher claims than expected impacted QBE’s 1Q23 performance, we still see the fundamental story of QBE’s earnings improving strongly over the next few years as intact. We maintain our ADD recommendation, with the stock trading on an undemanding ~10x FY23F PE multiple.

The post Broker urges investors to buy the QBE share price dip appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Monday
• Green skies ahead: These 2 ASX 200 stocks upgraded their earnings guidance this week
• I’m following Warren Buffett and preparing for a stock market crash
• QBE shares plunge 3% as floods, cyclones, and storms take their toll
• QBE share price on watch following strong Q1 update

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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S&P/ASX 200 Index (ASX: XJO) lithium shares have been the talk of the investing town for years now. The battery-making material is generally touted as critical for the future of energy security.

Interestingly, however, companies producing (or aiming to produce) the white metal appear far more popular with everyday investors than with the wealthiest among us.

That’s according to new data from investing platform Selfwealth Ltd (ASX: SWF).

Just over 1,200 portfolios housed on the platform are worth more than $1 million. That’s less than 1%.

And their top investments differ to those of the average portfolio in one particularly noticeable way: They own far fewer ASX 200 lithium shares.

Millionaire investors avoid ASX 200 lithium shares

Take a stab at the most popular ASX 200 share among all Selfwealth investors, by volume. I’ll give you a second to lock in a guess.

If you said Lake Resources NL (ASX: LKE), pat yourself on the back. It comes in as the top stock and the fourth most popular ASX investment overall, behind three exchange-traded funds (ETFs).

In second place is Core Lithium Ltd (ASX: CXO). Meanwhile, Pilbara Minerals Ltd (ASX: PLS), Sayona Mining Ltd (ASX: SYA), and Liontown Resources Ltd (ASX: LTR) are all found within the platform’s 20 most popular investments.

But what about the wealthiest 1% of investors?

Well, only one ASX 200 lithium share appears in the 20 most popular investments found within portfolios worth more than $1 million.

That is S&P/ASX 20 Index (ASX: XTL) giant Pilbara Minerals. The $14 billion ASX 200 lithium share holds the seventeenth spot among millionaires’ largest holdings.

So, what are Aussie millionaires investing in instead? Many appear to turn to ASX 200 blue chips, as my Fool colleague Tony reports.

The most popular ASX investment among the largest 1% of portfolios is Fortescue Metals Group Limited (ASX: FMG). Its iron ore peer BHP Group Ltd (ASX: BHP) comes in third place.

Big four banks Westpac Banking Corp (ASX: WBC), ANZ Group Holdings Ltd (ASX: ANZ), and Commonwealth Bank of Australia (ASX: CBA) also make the top 10.

The post Power portfolios: Millionaire investors shun ASX 200 lithium shares appeared first on The Motley Fool Australia.

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More reading

• Here are the 10 most shorted ASX shares
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Friday
• What’s the 5-year forecast for commodity prices and ASX 200 mining shares?
• Are Pilbara Minerals shares a ‘lower-risk’ ASX lithium buy right now?

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended 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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The BrainChip Holdings Ltd (ASX: BRN) share price has more than halved in the last year.

The artificial intelligence (AI) company’s share price has dropped 59% from $1.115 at market close on 13 May to its current share price of 45.5 cents. For perspective, the S&P/ASX All Technology Index (ASX: XTX) has risen nearly 12% in the same time frame.

Let’s take a look at what’s been weighing on the BrainChip share price.

What’s been going on?

A $5,000 investment in BrainChip shares 12 months ago would now only be worth $2,050 based on the company’s last closing price.

BrainChip shares appear to have tumbled amid multiple financial reports showing cash receipts far lower than the company’s market capitalisation.

In April, BrainChip shares tanked amid a quarterly update showing cash inflows of US$40,000. This was when Brainchip’s market cap was $804 million.

BrainChip also attracted considerable attention from short sellers in April and March, as my Foolish colleague James reported at the time.

However, early in March, BrainChip delivered some positive news to the market. The company launched its Akida platform. This technology drives edge devices for the Artificial Intelligence of Things (AIoT) solutions and services market.

Commenting on the new technology at the time, CEO Sean Hehir said:

This new generation of Akida allows designers and developers to do things that were not possible before on an Edge device. By inferring and learning from raw sensor data, we take a substantial step toward a cloudless Edge AI experience.

With this launch, we have significantly extended our competitive advantage in neuromorphic AI.

It was welcome news after BrainChip shares also fell in February. This was when the company revealed it delivered only US$250K in revenue in the second half of 2022. The company’s loss after tax was US$22.1 million.

Earlier, in January, the company’s share price dropped amid another quarterly update. BrainChip delivered cash receipts of US$1.164 million in the three months to the end of December. This compared to a market cap of $1.2 billion at the time.

In early December, BrainChip’s CEO sold 917,025 ordinary shares worth between $664,843 and $701,524. The company’s statement at that time said this was “for the purpose of meeting taxation obligation as a result of previous vesting of restricted stock units”.

In November, BrainChip director Antonio Viana sold 125,000 ordinary shares at 63 cents each for the same stated reason. Directors selling off shares can sometimes be a red flag for investors who like to see insider confidence in the company.

Meanwhile, in October, BrainChip shares also descended amid a quarterly update. The company reported cash receipts of only $118,000 in the September quarter, or $39,000 per month.

BrainChip share price snapshot

The BrainChip share price has slid 39% in 2023 so far.

In the past month, BrainChip shares have lost 3%. However, in the last week, the company’s share price has gained 15%.

The post $5,000 invested in BrainChip shares a year ago is now worth around $2000. What went wrong? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Here are the top 10 ASX 200 shares today
• Here are the top 10 ASX 200 shares today
• Just how much further can BrainChip shares fall?
• Here are the top 10 ASX 200 shares today

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 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 has been a disappointing period for Paladin Energy Ltd (ASX: PDN) shares.

Since the start of February, the uranium developer’s shares have lost 20% of their value to end Friday’s session at 66.5 cents.

This is despite a recent rebound, which has seen its share price rise 19% since falling as low as 56 cents in late March.

Are Paladin Energy shares now good value?

With some analysts suggesting that a bull market is starting for uranium, investors may be wondering whether its shares are good value.

Well, the good news is that one leading broker sees huge amounts of value in its shares at the current level. Though, it is worth noting that its recommendation comes with a speculative warning.

According to a recent note out Bell Potter, its analysts have a speculative buy rating and 99 cents price target.

Based on where Paladin Energy shares are currently trading, this implies potential upside of approximately 49% for investors over the next 12 months.

The broker commented:

PDN is in a good position leading into the restart of operations at Langer Heinrich Mine (LHM), with production largely covered for CY24 and CY25 we believe. Over 1HFY23 PDN executed three additional offtake contracts, with another awaiting finalisation. This, including the previously announced Duke contract and the offtake with JV partner Chinese National Nuclear Corp (CNNC), brings the total number of offtake parties to six.

In 2QFY23 PDN announced the improvement of payment terms and increase in offtake volumes with CNNC, which provides greater spot price leverage over CY24 & CY25 and speedier cash receival. Details pertaining to volumes of the four additional contracts will be released once the final contract is executed.

The post Down 20% since February, should I buy the dip on Paladin Energy shares? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Here are the top 10 ASX 200 shares today
• Here are the top 10 ASX 200 shares today
• 3 ASX 200 shares making big moves following quarterly updates

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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Aristocrat Leisure Ltd (ASX: ALL) could be a must-buy ASX 200 share according to analysts at Goldman Sachs.

And with the gaming technology company’s half-year results on the horizon, the broker is urging investors to buy its shares before it’s too late.

What is Goldman saying about this ASX 200 share?

According to a note out of the investment bank this morning, its analysts have reiterated their buy rating and $45.70 price target. Importantly, the broker has also kept Aristocrat on its coveted conviction list.

These are the shares that Goldman feels have a combination of big potential returns and a high likelihood of realising this potential. It said:

Based on the current Aristocrat share price of $38.69, this implies potential upside of 18.1% for investors over the next 12 months. And if we throw in the expected 2% dividend yield, the total potential 12-month return stretches beyond 20%.

Why is the broker so bullish?

Goldman has been looking at how this ASX 200 share’s rivals have been performing and believes it points to a strong first-half in the key Americas region. It said:

Key listed gaming peers in the US have reported 1Q23 results across the land-based space over the past couple of weeks. Common themes across all results were continued strength in topline growth and shipments, i.e. flagging strong industry growth for the quarter, except where company specific factors were in play. For ALL, we expect the Americas division to report c. 18.2% growth yoy for 1H23.

And while the broker acknowledges that there are some short-term concerns over the performance of its Pixel United (digital) business, it isn’t enough to put Goldman off. Particularly given its diverse business and attractive valuation. It concludes:

Feedback from recent investor conversations shows that there remains strong interest in the name, especially on the iGaming opportunity, although there remains divided opinions on how quickly this becomes a meaningful part of the business. Outlook for Pixel United continues to be the key area of concern for investors.

We view ALL as offering the most diversified growth opportunities in the ANZ Gaming space with a strong balance sheet and at attractive valuation multiples. We are Buy rated (On CL) on ALL with a 12m Target Price of A$45.70 and offering a total return of +20.6%.

The post Buy this ASX 200 share for a 20% return before it’s too late: Goldman Sachs appeared first on The Motley Fool Australia.

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

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CSL Limited (ASX: CSL) shares are backed by some of the biggest ASX companies in Australia.   

The ASX healthcare share is a biotech giant with a market capitalisation of around $145 billion according to the ASX.

It has done incredibly well for long-term shareholders. Over the past decade, the CSL share price has risen by around 400%. Plus its (relatively small) dividends boost the 10-year return even more.

Despite CSL now being a large company, some of the ASX’s biggest businesses also hold a sizeable position in the healthcare giant, which may suggest they’re confident about its future.

Which ASX companies own CSL shares?

There are four names within the twenty largest shareholders that I’m going to tell you about: Netwealth Group Ltd (ASX: NWL), Australian Foundation Investment Co Ltd (ASX: AFI) (AFIC), Argo Investments Limited (ASX: ARG), and Washington H. Soul Pattinson and Co. Ltd (ASX: SOL).

Argo and AFIC are two of the ASX’s largest and oldest listed investment companies (LICs). They focus on ASX blue chip shares that can provide a mixture of dividends and capital growth.

At the end of April, CSL shares were the third largest position in the AFIC portfolio, with an 8.1% weighting. CSL was also the third largest position in the Argo portfolio, with a 5.2% holding at the end of April.

Soul Pattinson is the largest investment business on the ASX, with part of its investment strategy focused on large ASX shares. Of its large-cap portfolio, worth $2.9 billion at 31 January 2023, CSL was the third-largest holding with a 6.6% weighting.

Netwealth is slightly different to the other three ASX companies I’ve mentioned. It’s a fintech business that offers ‘wrap’ services for self-managed super funds (SMSFs) and high net worth clients where they can manage their investments (including buying and selling).

It seems Netwealth holds these CSL shares on behalf of other investors, rather than a Netwealth fund manager deciding to become one of the largest CSL shareholders.

Could the biotech giant keep delivering healthy returns?

As I mentioned above, the CSL share price has done very nicely over the last decade. The past five years have been solid, with a rise of around 70% as we can see on the chart below. That’s despite the impacts of the COVID-19 pandemic.

The dividend has also grown from around $1.05 per share in 2013 to $3.18 per share in 2022.

Estimates on Commsec suggest the ASX healthcare share is expected to grow its profit and dividend over the next few years. Certainly, this could be helpful support for the CSL share price.

Using FY23 projections, it’s valued at 38 times FY23’s estimated earnings and could pay a dividend per share of $3.42.

Over the next two years to FY25, it could grow profit by 46%. This would mean the CSL share price is only valued at 26 times FY25’s estimated earnings.

With the business pumping billions of dollars into research and development, it could continue to grow earnings as it launches new health products for patients and healthcare institutions.

The post 4 ASX companies that own CSL shares (and lots of them!) appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy next week
• Turning ASX shares into a $40,000 annual passive income generator
• It’s still rare to find a term deposit paying over 5%. Why not buy ASX dividend shares instead?
• The top 10 ASX shares held by millionaires
• Why did the Washington H Soul Pattinson share price just smash a new 52-week high?

Motley Fool contributor Tristan Harrison has positions in Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, Netwealth Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Netwealth Group 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 Scott Phillips.

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