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If you don’t already have exposure to the banking sector in your income portfolio, then now could be the time to do it.

That’s because there are some very big dividend yields being forecast in the sector by analysts.

But which ASX 200 bank shares should you buy for dividends? Here are two that come highly recommended:

ANZ Group Holdings Ltd (ASX: ANZ)

Following its half-year results, the team at Citi continues to believe that ANZ is the best big four bank share to buy now.

This is largely due to its institutional business, which Citi believes is the key differentiator between it and the rest of the big four. The broker said:

We see ANZ’s unique capabilities as set to deliver relative outperformance in the current market conditions. ANZ is our preferred Major Bank exposure.

Citi currently has a buy rating and $26.50 price target on its shares.

As for dividends, Citi is forecasting fully franked dividends of 164 cents per share in FY 2023 and then 166 cents per share in FY 2024. Based on the current ANZ share price of $24.50, this will mean yields of 6.7% and 6.8%, respectively.

Westpac Banking Corp (ASX: WBC)

Over at Goldman Sachs, its analysts believe that Westpac is the ASX 200 bank share to buy. In response to its half-year results release, the broker has retained its conviction buy rating with a $24.67 price target.

Goldman was reasonably pleased with the results, noting:

WBC’s 1H23 cash earnings (GS basis ex-notables) from continued operations were up significantly hoh and +8% above GSe. 

And while Westpac unfortunately abandoned its cost cutting goals, the broker still expects flat expenses to drive outperformance. It adds:

[D]espite WBC walking away from its FY24E cost target of A$8.6 bn, we expect a broadly flat cost trajectory over the next two years, which will see WBC outperform peers in this relatively difficult inflationary environment.

In respect to dividends, Goldman now expects fully franked dividends of 140 cents per share in both FY 2023 and FY 2024. Based on the current Westpac share price of $21.09, this equates to yields of 6.6% in both years.

The post These are the best ASX 200 bank shares to buy now: analysts appeared first on The Motley Fool Australia.

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More reading

• Broker warns that ‘our conviction has waned’ on Westpac shares
• How to invest $10,000 in ASX dividend shares in May
• Bank of Queensland is offering the highest savings interest rate of any ASX bank. What might this mean for shareholders?
• 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?

Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. 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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It was another busy week for Australia’s top brokers. This led to the release of a large number of broker notes.

Three ASX broker buy ratings that you might want to know more about are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

CSL Limited (ASX: CSL)

According to a note out of Morgan Stanley, its analysts have retained their overweight rating and $339.00 price target on this biotherapeutics company’s shares. Morgan Stanley notes that one of CSL’s rivals has reported a sharp reduction in its plasma collection costs. While the broker has not adjusted its estimates just yet, it points out that if CSL reported the same, its earnings could be higher than it is forecasting.  The CSL share price ended the week at $306.36.

Coles Group Ltd (ASX: COL)

A note out of Citi reveals that its analysts have retained their buy rating and $20.20 price target on this supermarket giant’s shares. This follows an investor tour of the company’s new Witron automated distribution centre at Redbank in Queensland. Citi was pleased with what it saw and expects the new centre to support more flexible range management and lower stock losses. It also sees opportunities for Coles to leverage the centre to provide a cost advantage over rivals. The Coles share price was fetching $18.21 on Friday.

Life360 Inc (ASX: 360)

Analysts at Bell Potter have retained their buy rating and $8.75 price target on this location technology company’s shares. Ahead of the release of Life360’s first-quarter update, the broker appears to believe that a strong update could be coming. In fact, it is suggesting that Life360 could reveal that it has achieved positive cash flow ahead of expectations. The Life360 share price was trading at $5.82 at the end of the week.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

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More reading

• How to invest $10,000 in ASX dividend shares in May
• I’m following Warren Buffett and preparing for a stock market crash
• Turning ASX shares into a $40,000 annual passive income generator
• The top 10 ASX shares held by millionaires
• How big will the Coles dividend be in 2024?

Motley Fool contributor James Mickleboro has positions in CSL and Life360. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL and Life360. The Motley Fool Australia has positions in and has recommended Coles 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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Plenty of Aussies turn to the ASX to build wealth, but the vast majority invest quite differently to the richest among them. Though there is one similarity between the portfolios of millionaires and those of the average investor – the Vanguard Australian Shares Index ETF (ASX: VAS).

New data from Australian investing platform Selfwealth Ltd (ASX: SWF) provides insight into 1,200 portfolios worth more than $1 million, and the popular exchange-traded fund (ETF) sits in pride of place.

Units in the Vanguard Australian Shares Index ETF closed Friday’s session trading at $90.45.

So, what is it about the VAS ETF that might have caught the eye of Australian millionaires? Let’s take a look.

Millionaires snap up Vanguard Australian Shares Index ETF (VAS)

Interestingly, there’s generally a clear difference between the average portfolio and those worth more than $1 million. Notably, millionaire investors appear more likely to own individual stocks, with one clear exception.

The Vanguard Australian Shares Index ETF is the second most popular investment among millionaire shareholdings on the platform by volume and the most popular among the entire cohort.

And there are plenty of potential reasons for its popularity.

The ETF is the only one of its kind to track the S&P/ASX 300 Index (ASX: XKO) – thereby offering plenty of diversity. It also takes a small 0.1% annual management fee.

Interestingly, VAS is the only ETF in the 10 most popular holdings of Selfwealth’s $1 million-plus portfolios. The vast majority are blue-chip stocks, with Fortescue Metals Group Limited (ASX: FMG) taking out the top spot.

Further down the list sits the Vanguard MSCI Index International Shares ETF (ASX: VGS) – the 12th most popular holding among millionaire investors.

Meanwhile, Betashares Australian Equities Strong Bear Hedge Fund (ASX: BBOZ) and the Betashares Nasdaq 100 ETF (ASX: NDQ) are the 15th and 20th most popular investments, respectively.

Comparatively, the top three most popular investments among Selfwealth’s entire cohort are all ETFs – the VAS ETF, the Vanguard Diversified High Growth Index (ASX: VDHG), and the VGS ETF.

The post Millionaire magnet: Why are wealthy investors pouncing on the Vanguard Australian Shares Index ETF (VAS)? appeared first on The Motley Fool Australia.

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More reading

• The top 10 ASX shares held by millionaires
• Why is the Vanguard Australian Shares Index ETF (VAS) still below its pre-COVID high?
• Better investment: Vanguard Australian Shares ETF (VAS) or a term deposit?
• My 5-step plan to achieving $500 in monthly passive income
• If you’d invested $5,000 in the Vanguard Australian Shares Index ETF (VAS) after the COVID crash, here’s much you’d have 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 positions in and has recommended BetaShares Nasdaq 100 ETF and Vanguard Msci Index International Shares ETF. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Vanguard Msci Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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If you’re looking for an easy way to invest your hard-earned money next week, then exchange traded funds (ETFs) could be the way to do it.

But which ETFs might be top options right now?

Depending on your investment objective, one of the two ASX ETFs below could be top options to buy next week:

VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)

If you’re interested in buy and holding investing, then the VanEck Vectors Morningstar Wide Moat ETF could be the one for you.

This ETF has been a great place to invest over the last decade. Even after accounting for recent volatility, the index it tracks has generated an average annual return of 19.1% since 2013.

This strong performance has been underpinned by its focus on fairly priced US companies with sustainable competitive advantages. These are qualities that Warren Buffett looks for when he invests. And given his track record, it’s hard to dispute that this investment strategy works.

The fund changes its constituents periodically and removes stocks when they become overvalued. But there are usually approximately 50 shares in the fund at any given time. At present, this includes Alphabet, Amazon, Meta Platforms, Microsoft, and Walt Disney.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

Investors that are more interested in generating income from their investments might want to consider the Vanguard Australian Shares High Yield ETF.

That’s because this ETF provides investors with exposure to a diverse group of ASX listed shares that have higher forecast dividends relative to the rest of the market.

At present, the Vanguard Australian Shares High Yield ETF is trading with an estimated forward dividend yield of 5.3%. This would mean that a $10,000 investment provides $530 of passive income.

There are many dividend-paying blue chip ASX shares held by the ETF. This includes BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), Telstra Corporation Ltd (ASX: TLS), and Woodside Energy Group Ltd (ASX: WDS).

The post 2 high-quality ASX ETFs for income and buy and hold investors appeared first on The Motley Fool Australia.

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More reading

• How to invest $10,000 in ASX dividend shares in May
• 3 of the best ETFs for ASX investors to buy this month
• Buy these ASX ETFs for big dividend income
• Invest like Warren Buffett with this ASX share to grow your wealth enormously
• 2 top ASX ETFs I’d buy with the goal of long-term capital growth

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 positions in and has recommended Telstra Group. The Motley Fool Australia has recommended VanEck Morningstar Wide Moat ETF and Vanguard Australian Shares High Yield ETF. 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 iron ore price has tumbled from its March peak this year but is still trading higher than November lows.

ASX 200 shares impacted by the iron ore price include Fortescue Metals Group Ltd (ASX: FMG), BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO).

Let’s take a look at what could be weighing on the iron ore price so far in 2023.

What’s going on?

Iron ore has been on a roller coaster in the last 12 months. The commodity hit a yearly high of US$147 a tonne on 8 June last year, trading economics data shows. From this high, iron ore slumped nearly 45% to US$81.50 on 1 November.

Following the November lows, iron ore made a major comeback, rising 65% to US$134.50 on 15 March 2023.

However, iron ore then tumbled below US$99.50 on 5 May before bouncing back to US$107. However, iron ore has again retreated nearly 4% in a day and is priced at US$103 a tonne at the time of writing.

Iron ore is the major ingredient of steel. And China is the world’s largest importer of steel. This means data and activity out of China can weigh on the iron ore price.

ANZ commodity strategists Daniel Hynes and Soni Kumari are watching China’s steel demand closely. In a research note on Thursday, they noted iron ore has “been under pressure” amid “weak demand from China’s steel industry”. In a research report, they added:

Initial hopes of strong demand have evaporated as the real estate market chips away at a mountain of debt.

China’s steel industry PMI hit 45 in April, its lowest level since December 2022.

Exports are now rising amid the softness in the domestic market. Without additional fiscal stimulus, growth in steel demand is likely to remain weak.

The strategists see iron ore prices “finding a floor” near US$95 per tonne.

A Hong Kong trader, quoted by the Financial Times this week, highlighted the market was expecting China’s steel demand to lift more than it has this year. He said:

The demand for steel has collapsed since the start of April.

The market was expecting a 10 per cent increase in steel demand for infrastructure [this year], but our most optimistic estimate is 2 per cent.

Share price snapshot

The BHP share price closed on Friday at $43.48, an 8.6% leap over the past year. Fortescue shares closed at $20.10, up 5.7% in 12 months, while Rio Tinto shares are 107.96 apiece, 43% higher than this time a year ago.

The post Could the iron ore price slide below $100 US dollars in 2023? appeared first on The Motley Fool Australia.

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More reading

• How to invest $10,000 in ASX dividend shares in May
• Why are ASX 200 mining stocks having such a shocking end to the week?
• What’s the 5-year forecast for commodity prices and ASX 200 mining shares?
• This ASX small-cap lithium share is leaping 13% on a deal with Rio Tinto
• Why are BHP shares sliding 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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Last week, banking giant Westpac Banking Corp (ASX: WBC) released its half-year results.

Investors didn’t respond overly positively to the release, with Westpac shares losing almost 3% of their value over the week.

But one leading broker remains positive. Well, just about!

According to a note out of Morgans, its analysts have been a little shaken by the result but have seen enough to retain their add rating with a new lowered price target of $24.22.

Based on the current Westpac share price of $21.09, this implies potential upside of 15% for investors over the next 12 months.

In addition, the broker is expecting a $1.49 per share fully franked dividend in FY 2023 and then a $1.52 per share fully franked divided in FY 2024. This boosts the total potential return to approximately 22% over the next 12 months.

What did the broker say about Westpac shares?

While the broker was pleased with the bank’s earnings, it was disappointed with a couple of items. It explains:

WBC delivered solid 1H23 earnings growth, a lift in ROE, a step-up in DPS, and finished the period with a strong capital and liquidity position. The NIM leverage and stepping away from the FY24 cost target were the disappointments.

Nevertheless, Morgans sees enough value in Westpac shares to overlook this. It said:

Potential 12 month TSR at current prices is c.18% [now 22%] so still justifies an ADD. However, our conviction has waned given some of the potential upside to ROE that we had been targeting has either fallen away (eg. cost target) or been proven (eg. CET1 ratio increase). Positives are the relatively low risk asset and funding mix and undemanding valuation. Concerns are the ability to continue to deliver transformation and grow its loan book at value accretive rates.

The post Broker warns that ‘our conviction has waned’ on Westpac shares appeared first on The Motley Fool Australia.

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More reading

• How to invest $10,000 in ASX dividend shares in May
• Bank of Queensland is offering the highest savings interest rate of any ASX bank. What might this mean for shareholders?
• 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?
• Snapped up $5,000 worth of Westpac shares on the June dip? Here’s the passive income you’re earning now

Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. 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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Maybe you are sick of hearing this, but it doesn’t make it any less true: it’s a turbulent time for ASX shares at the moment.

With much of the world still struggling with both high inflation and steep interest rate rises, it’s touch-and-go whether some of the largest economies will fall into recession.

In such a time, Bell Direct market analyst Grady Wulff suggests targeting three specific ASX sectors to buy into: energy, retail and healthcare.

“For energy, there is one specific stock in there that we have a really high outlook on,” Wulff said at the Australian Shareholders Association conference this week.

“Investors have fled retail stocks… but there’s value in this space when you look for value shopping.”

Healthcare has outperformed the market over the last decade, she added, but there are still “quite a few opportunities” right now.

So here are three ASX shares from those industries that Wulff and the Bell Direct team rate as buys:

The three best buys in the three best ASX sectors

From the retail sector, Wulff’s team likes the look of Accent Group Ltd (ASX: AX1), which is best known for operating the ubiquitous shoe chain The Athlete’s Foot.

The share price has already done pretty well. It’s risen 74% over the past five years, a whopping 266% since the COVID-19 market crash, and it has doubled since September.

Wulff told investors to not let that put them off.

“This company continues to go from strength to strength. There’s no reason not to consider it for your portfolio.”

She noted how sales are still growing year-on-year, even though customers are now grappling with interest rates that are 3.75 percentage points higher.

“The fact that they’re able to weather tougher economic conditions says they’re up to something really special.”

In the health space, Bell Direct’s current darling is Telix Pharmaceuticals Ltd (ASX: TLX), which produces cancer diagnostic and treatment products.

The company entered into a revenue-making phase last year after its diagnostic imaging tracer Illucix started selling commercially.

Wulff told the Sydney audience that while diagnostic products bring some money in, the real margins are still coming in the treatment products that are currently jumping through bureaucratic hoops.

“Imaging agents make around US$5,000 revenue… per dose,” she said.

“The therapy drug for prostate cancer and kidney cancer is US$250,000 per dose per patient.”

So Telix has these potentially massive catalysts coming, all while the diagnostic products are bringing in revenue to keep its research and development running without needing to raise capital.

Telix shares have rocketed 62% year to date.

Wulff’s pick in the energy sector is uranium producer Boss Energy Ltd (ASX: BOE).

Uranium prices were at rock bottom over the 2010s after nuclear power generation went out of fashion following the Fukushima disaster.

But Russia’s invasion of Ukraine last year and the subsequent global energy crisis have prompted many countries to reactivate their reactors.

“The company’s project is the Honeymoon mine, which has been in care-and-maintenance since 2013… because uranium prices have been so low,” said Wulff.

“We’ve now seen the price of uranium come off the low last year.”

She recently spoke to the Boss Energy managing director Duncan Craib, who is confident of digging up the nuclear fuel very soon.

“He’s very optimistic that they’re on track, on time and on budget for first production in December 2023, first sales in 2024, and sales to double by 2025.”

The Boss Energy share price has already climbed 35% so far this year.

The post 3 shares to buy from the 3 hottest ASX sectors right now 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
• 3 ASX 300 shares that turned $5,000 into $59,000 or much more in 5 years
• Which ASX retail shares could be ‘most impacted’ by Amazon’s rapid growth?
• Why these ASX 300 retail shares could be immune to rising interest rates

Motley Fool contributor Tony Yoo has positions in Telix Pharmaceuticals. 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 Accent 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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Just because we’re smack-bang in the middle of two reporting seasons doesn’t mean there’s no exciting earnings news to be found among S&P/ASX 200 Index (ASX: XJO) shares.

Plenty of stocks dropped updates over the week just been. And some of those updates saw companies upping their forecasts for the entire financial year 2023. We love to see it.

So, without further ado, let’s dive into two ASX 200 stocks that made moves amid guidance upgrades this week.

2 ASX 200 stocks upgrading their earnings guidance this week

Graincorp Ltd (ASX: GNC)

First off the bat was Graincorp. The ASX 200 agriculture company saw its stock leap 10% on Thursday on the back of a notable guidance upgrade.

Graincorp posted $383 million of earnings before interest, tax, depreciation, and amortisation (EBITDA) for the first half and a $200 million net profit after tax (NPAT).

On the back of what managing director and CEP Robert Spurway called “an excellent result”, the company upped its full-year earnings forecast.

It now expects to bring in between $500 million and $560 million of EBITDA and between $220 million and $260 million of NPAT in the financial year 2023.

That’s up from previous forecasts of $470 million to $530 million of EBITDA and $180 million to $220 million of NPAT.

QBE Insurance Group Ltd (ASX: QBE)

Unfortunately, the market didn’t respond so well to a guidance upgrade from ASX 200 insurance stock QBE on Friday. Though, there was one detail in the company’s quarterly report that might have worried investors.

QBE posted a 14% jump in gross written premiums on a constant currency basis. Additionally, its group-wide renewable rate increases came in at an average of 10%.

Looking forward, it expects its full-year gross written premium growth to come in at around 10% on a constant currency basis – up from its previous guidance of mid-to-high single digits.

However, the ASX 200 insurer also revealed natural catastrophes over the first four months of 2023 had cost it US$480 million – nearly 90% of its first-half catastrophe allowance. It also disclosed US$130 million of adverse development on natural catastrophe events occurring in late 2022.

The ASX 200 insurance stock plunged 3.76% to $14.59 at market close on Friday.

The post Green skies ahead: These 2 ASX 200 stocks upgraded their earnings guidance this week 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 Friday
• What’s the 5-year forecast for commodity prices and ASX 200 mining shares?
• I’m following Warren Buffett and preparing for a stock market crash
• QBE shares plunge 3% as floods, cyclones, and storms take their toll

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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So you’d like to invest in ASX dividend shares this May? Excellent idea. Dividend shares provide many wealth-building benefits. They enable an investor to participate in the wealth creation of Australian businesses, all while securing a stream of passive income in the form of the regular payments that the best dividend shares pay their investors regularly.

But deciding to invest is the easy part. Choosing which investments to put your hard-earned money into is where the rubber hits the road.

So here are some ideas on the best places to invest for dividend cash flow this May.

Where to spend $10,000 on ASX dividend shares this May

I would start by deploying $2,500 each into Coles Group Ltd (ASX: COL) and Telstra Group Ltd (ASX: TLS). Both Coles and Telstra are the bluest of ASX blue chip shares. Both companies have a long and proud history of delivering robust dividends to their ASX investors.

Sure, both companies offer solid, fully franked yields today. On recent pricing, Coles can boast of a dividend yield of 3.63%, while Telstra has 3.94% on the table. 

But the primary reason to consider these two companies is their defensiveness. Coles and Telstra were two of the few ASX dividend shares that held their dividend payments steady throughout the COVID-ravaged years of 2020 and 2021. For anyone worried about a recession this year, this should provide a lot of comfort.

Let’s now turn to Westpac Banking Corp (ASX: WBC). Banks tend to be a little more cyclical than the likes of Coles or Telstra, evidenced by Westpac’s patchy dividends over 2020 and 2021. But fundamentally, Westpac is a strong and robust business and is heavily entrenched in the Australian financial landscape as a big four bank.

Additionally, Westpac’s current dividend yield of more than 6.3% (also fully franked) is too large to ignore. For immediate and robust cash flow, Westpac could be another great choice for an additional $2,500.

Rounding out with an income ETF

Finally, let’s consider an exchange-traded find (ETF) for our final $2,500 in the Vanguard Australian Shares High Yield ETF (ASX: VHY). ETFs are a great way of obtaining instant diversification with one easy investment. This can be especially useful in building an income portfolio.

The three shares named above are all great companies. But they only cover small corners of the ASX. What about retail shares or mining giants? Healthcare shares or energy stocks? That’s where this ETF can come in.

It is specifically designed to only hold ASX shares that offer significant dividend income to investors. At present, its portfolio comprises around 60 ASX dividend shares. These include everything from miner BHP Group Ltd (ASX: BHP) and retailer JB Hi-Fi Ltd (ASX: JBH) to health insurance kingpin Medibank Private Ltd (ASX: MPL) and energy titan Woodside Energy Group Ltd (ASX: WDS).

This ETF currently has a trailing yield of 5.81%.

As such, the Vanguard High Yield ETF could be a great way to spend the remaining $2,500 we have earmarked for ASX dividend shares this May.

The post How to invest $10,000 in ASX dividend shares in May appeared first on The Motley Fool Australia.

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• Bank of Queensland is offering the highest savings interest rate of any ASX bank. What might this mean for shareholders?
• Why are ASX 200 mining stocks having such a shocking end to the week?
• What’s the 5-year forecast for commodity prices and ASX 200 mining shares?
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Motley Fool contributor Sebastian Bowen has positions in Telstra Group and Vanguard Australian Shares High Yield ETF. 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 positions in and has recommended Coles Group and Telstra Group. The Motley Fool Australia has recommended Jb Hi-Fi, Vanguard Australian Shares High Yield ETF, 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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One of the most popular options out there for investors seeking passive income is Commonwealth Bank of Australia (ASX: CBA).

The banking giant’s shares are found in countless income and super portfolios across the country. And this is for good reason. CBA is arguably one of the highest quality banks in the world and its shares more often than not provide investors with a generous dividend yield.

But will that be the case if you were to invest $10,000 into CBA shares right now? Or have you missed the boat on this one?

How much passive income will CBA shares generate?

If you are lucky enough to have $10,000 at your disposal and decided to put it to work with CBA shares, based on its current share price, it would result in you owning 101 shares.

While that might not sound like a big holding, don’t let the numbers fool you. This is a decent investment and could provide you with a nice passive income boost.

For example, according to a recent note out of Morgans, its analysts are forecasting fully franked dividends per share of $4.26 in FY 2023 and then $4.20 in FY 2024. Based on the current CBA share price of $98.96, this will mean dividend yields of 4.3% and 4.25%, respectively.

It will also mean that your $10,000 investment would yield passive income of approximately $430 in FY 2023 and $424 in FY 2024.

Should you invest?

Morgans appears to be Australia’s largest bank could be a decent option for investors. The broker has CBA on its best ideas list again this month. It commented:

The second largest stock on the ASX by market capitalisation. We view CBA as the highest quality bank and a core portfolio holding for the long term, but the trade-off is it is the most expensive on key valuation metrics (including the lowest dividend yield). Amongst the major banks, CBA has the highest return on equity, lowest cost of equity (reflecting asset and funding mix), and strongest technology. It is currently benefitting from the sugar hit of both the rising rate environment and relatively benign credit environment.

The post If I invest $10,000 in CBA shares how much passive income will I receive? appeared first on The Motley Fool Australia.

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More reading

• Bank of Queensland is offering the highest savings interest rate of any ASX bank. What might this mean for shareholders?
• Three reasons the CBA share price made news this week
• How much would I need to invest in ASX shares for a retirement income of $65,000 per year?
• 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

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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