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Shares in Pilbara Minerals Ltd (ASX: PLS) have rocketed out of the starting blocks on Wednesday and set a new all-time high.

At the time of writing, the Pilbara Minerals share price is up 10.18% trading at $2.49, after hitting a record high of $2.53.

That means it’s gained around 185% this year to date, well ahead of the S&P/ASX 200 index (ASX: XJO)’s return of 12% since January 1.

Let’s investigate what’s been driving this outsized return over the last few months.

What’s been fuelling the Pilbara Minerals share price lately?

The Pilbara Minerals share price has marched northwards since January 1 this year, along with many of its ASX resources peers.

Interestingly, investors continue to reward the lithium miner, despite it posting a net loss of $51 million in FY21, alongside a 37% year on year decrease in earnings before interest, tax, depreciation and amortisation (EBITDA) in its FY21 results last month.

However, a number of external drivers appear to have fuelled momentum for Pilbara’s share price over the last few months.

Most recently, on 6 September, Pilbara announced a “further substantial increase” in the mineral resource at its flagship 100% owned Pilganogoora Lithium-Talium project in the Pilbara region, Western Australia.

The company advised that the 39% mineral resource boost brought the updated tonnage to 308.9 million tonnes, reinforcing the project’s position “as the world’s premier hard rock lithium operation”.

Pilbara shares have climbed a further 16% since this announcement.

Cool – but how can Foolish investors interpret this?

Because Pilbara Minerals is an ASX resource share that produces commodities, it is considered a price taker. That means its share price is sensitive to fluctuations in prices in the broader commodity markets – lithium in particular for this case.

The price of lithium has soared to 24-month highs this year, having jumped off the springboard in a 90% gain from January to April.

Since then, the spot price of lithium has only edged higher and maintained a level of above CNY90,000/Tonne (T) (AU19,100/T) to date.

With lithium continuing to fetch these high prices in the market, and with the company’s newfound payload, it begins to make sense why the Pilbara Minerals share price reached an all-time high today. Investors want in on the potential good fortunes of the company.

Over the last week alone, the Pilbara Minerals share price has climbed a further 16% into the green, as lithium prices crawl higher also.

What else could be behind Pilbara Mineral’s share price?

Recall that Pilbara completed the inaugural auction on its Battery Metals Exchange (BMX) platform in July. The BMX outlay is a platform in which Pilbara can sell its unallocated spodumene inventory, to drive additional sales volumes.

The results of its second BMX auction were released on Tuesday, and the company advised that there was “strong interest in both BMX platform participation and bidding within the auction”.

And Pilbara’s not done there, with the company already eyeing in on its next moves with its latest innovation to generate sales. “Given the strong margins yielded through the BMX trading platform to date, Pilbara Minerals expects to channel more concentrate through the platform,” the company said today.

The post Pilbara Minerals (ASX:PLS) share price rockets 10% to all-time high. Here’s why appeared first on The Motley Fool Australia.

More reading

• ASX lithium shares are rallying across the board today. Here’s why.
• Pilbara Minerals (ASX:PLS) share price on watch as lithium prices boom
• Here are the 3 most heavily traded ASX 200 shares so far today
• Lithium surge, Sydney Airport takeover, ACCC torches Qantas deal. Scott Phillips on Nine’s Late News
• Here are the 3 heaviest trading ASX 200 shares on Monday

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Metalstech Ltd (ASX: MTC) share price is surging today following news of a $2 million strategic investment.

The company has signed a strategic investment agreement with Chifeng Jilong Gold Mining that will see Chifeng subscribing to buy more than 5.8 million Metalstech shares for 34 cents apiece.

At the time of writing, the Metalstech share price has boomed to 42.5 cents, 19.72% higher than its previous close. Additionally, the Metalstech share price hit a new all-time high of 44.5 cents earlier today.

Let’s take a closer look at today’s news from the lithium and gold exploration company.

Metalstech’s new investor

The Metalstech share price is soaring this morning following its announcement of a significant strategic investment.

China’s Chifeng will be investing in Metalstech via its subsidiary Chijin International.

Metalstech will issue approximately 5.8 million shares to Chifeng before its planned spinout of Winsome Resources.

Winsome is to take over Metalstech’s lithium resources. The split will allow Metalstech to focus on its gold assets.

Metalstech shareholders will receive $9 million worth of Winsome shares – valued at 20 cents apiece – as part of the demerger.

After Chifeng receives its allocated new shares, Metalstech shareholders will get 1 Winsome share for (approximately) every 3.66 Metalstech shares they already hold.

That would see Chifeng with around 1.6 million shares in Winsome after the spinout. It is scheduled for 7 October and is subject to shareholder approval.

Additionally, Metalstech plans for Winsome Resources to float on the ASX after the spinout. Details of Winsome’s potential initial public offering (IPO) are yet to be announced.

Commentary from management

Metalstech chair Russell Moran commented on the news driving the company’s share price higher today:

Chifeng is widely considered to be one of the most succesful precious metals investors in China… We hope that this recent interest from Chifeng is a sign of growing interest in out broader development plans for [the Sturec Gold Mine].  

Metalstech share price snapshot

Today’s gains have seen the Metalstech share price well and truly in the green.

It is currently 107% higher than it was at the start of 2021. And it has gained 97% since this time last year.

The post Metalstech (ASX:MTC) share price surges 20% on $2 million investment appeared first on The Motley Fool Australia.

More reading

• Metalstech (ASX:MTC) share price jumps 15% on lithium spin out update
• Why Metalstech, Mineral Resources, TechnologyOne, & Webjet are storming higher
• Why the Metalstech (ASX:MTC) share price is rocketing 16% on Friday
• Why the MetalsTech (ASX:MTC) share price is soaring 15% today

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 Bruce Jackson.

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The Wesfarmers Ltd (ASX: WES) share price has kicked off to a poor start today. At the time of writing, Wesfarmers shares are trading at $56.25, down 0.85%.

Wesfarmers is now down close to 15% over the past month or so. Just last month, this company was clocking new all-time highs, eventually peaking at $67.20 a share around 20 August. But it has been a rather steep slide since then.

Although lower share prices can be disappointing for existing investors, they also mean a higher starting dividend yield for new investors. So let’s take a look at how the Wesfarmers dividend stacks up today.

When Wesfarmers reported its FY21 earnings report last month, it included a final dividend of 90 cents per share. This will be paid out on 7 October. That brought Wesfarmers’ full-year dividend to $1.78 per share for FY21, an increase of 17.1% over FY20’s payouts.

This full-year dividend of $1.78 a share gives Wesfarmers a dividend yield of 3.16% on current pricing, or 4.51% grossed-up with Wesfarmers’ full franking credits.

Those are some pretty healthy numbers, especially considering that interest rates remain at essentially zero.

But how do they compare to Wesfarmers’ peers? Let’s check out how this dividend stacks up against Wesfarmers’ old flame Coles Group Ltd (ASX: COL) as well as Coles’ arch-rival Woolworths Group Ltd (ASX: WOW).

How does the Wesfarmers dividend compare to Coles and Woolworths shares?

So Coles also announced a dividend increase in its FY21 earnings report last month. Coles announced a final dividend of 28 cents per share, to be paid out on 28 September. This will bring Coles’ dividends for FY21 up to 61 cents per share, a 6.1% increase on FY20.

This would, in turn, give Coles shares a dividend yield of 3.55%, or 5.07% grossed-up with Coles’ full franking. That’s slightly ahead of Wesfarmers, at least on today’s prices.

Let’s see how these two yields compare to that of Woolworths today.

Woolworths, not to be left behind, also increased its dividend last month during earnings season. It announced a final payout of 55 cents a share, to be paid on 8 October. That brought Woolies’ FY21 dividends to $1.08 per share, a 14.9% increase on FY20’s shareholder payments.

That would give Woolworths a dividend yield of 2.76% on current pricing, or 3.94% grossed-up with Woolworths’ full franking.

So out of Wesfarmers, Woolworths and Coles today, it seems that Coles shares offer the largest starting dividend yield based on the latest share prices.

At the current Wesfarmers share price of $56.25, the company has a market capitalisation of $63.78 billion, and a price-to-earnings (P/E) ratio of 26.75.

The post How does the Wesfarmers (ASX:WES) dividend compare to Woolworths? appeared first on The Motley Fool Australia.

More reading

• Why has the Wesfarmers (ASX:WES) share price tumbled 14% in a month?
• Why this analyst sees 15% upside for the Coles (ASX:COL) share price
• Own Wesfarmers (ASX:WES) shares? It’s about to be payday…for you and the CEO
• Coles (ASX:COL) share price on watch amid latest push to Kmart market
• Why the Woolworths (ASX:WOW) share price has outperformed Wesfarmers so far this year

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 owns shares of and has recommended COLESGROUP DEF SET and Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The lithium sector is green across the board on Wednesday, with many ASX lithium shares marking fresh all-time record highs.

Lithium boom continues

Pilbara Minerals Ltd (ASX: PLS) is making headlines following the results of its second lithium spodumene concentrate digital auction.

The company said that it intends to accept the highest bid of US$2,240/dry metric tonne (spodumene concentrate 5.5%, free on board Port Hedland basis) for the intended 8,000/dmt cargo.

Just two months ago, Pilbara Minerals held its inaugural digital auction, with the highest bid coming in at US$1,250/dmt for a 10,000 dmt cargo of spodumene concentrate.

According to S&P Global, a China-based bidder said, “We started [bidding] at slightly over $1,100/dmt and we were expecting the price to hit a maximum of $2,000/mt. This [closing price] is a really crazy high one.”

With lithium prices rising rapidly in a short span of time, this could only mean good news for ASX lithium shares.

ASX lithium shares climb higher

Pilbara Minerals is leading the lithium sector on Thursday, jumping 9.73% to record highs of $2.48.

The Orocobre Ltd (ASX: ORE) share price is also basking in Pilbara Minerals’ success, adding 3.24% to $9.87.

Prospective explorers including Piedmont Lithium Inc (ASX: PLL), Liontown Resources Ltd (ASX: LTR) and Firefinch Ltd (ASX: FFX) are also pushing higher, up 3.31%, 3.39% and 3.76% respectively.

The Core Lithium Ltd (ASX: CXO) share price jumped the gun yesterday, rallying 27% on no news. It was pulled over by the ASX this morning in a price query.

In response, Core Lithium pointed to Pilbara Minerals’ auction results, saying:

Significantly, Core notes that yesterday, a spodumene concentrate cargo from another Australian producer sold for an approximate equivalent price of USD$2,500/dmt (SC6.0, CIF China). Core is the only Australia-focused, ASX-listed company forecast to join the ranks of new spodumene producers between now and the end of 2022.

It seems Pilbara Minerals’ auction results have added more fuel to the already booming industry and driving buying activity across ASX lithium shares on Thursday.

The post ASX lithium shares are rallying across the board today. Here’s why. appeared first on The Motley Fool Australia.

More reading

• Pilbara Minerals (ASX:PLS) share price on watch as lithium prices boom
• 2 ASX 200 (ASX:XJO) shares that analysts love
• Here are the 3 most heavily traded ASX 200 shares so far today
• Lithium surge, Sydney Airport takeover, ACCC torches Qantas deal. Scott Phillips on Nine’s Late News
• Which ASX 300 shares are the biggest winners and losers today?

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

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Motley Fool Australia Chief Investment Officer Scott Phillips joined Nine’s Late News on Tuesday night to discuss the wide-ranging speech by RBA Governor Philip Lowe — covering house prices, interest rates and more — plus a big fall in the Brambles Limited (ASX: BXB) share price and consumer and business confidence in focus.

The post RBA calls a spade a spade. Brambles falls. Confidence in focus. Scott Phillips on Nine’s Late News appeared first on The Motley Fool Australia.

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• ASX 200 rises, Zip falls, Brambles sinks
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• Which ASX 300 shares are the biggest winners and losers today?
• Brambles (ASX:BXB) share price slides 11% after investor day presentation
• ASX 200 (ASX:XJO) midday update: Westpac asset sale blocked, Zip crypto update

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

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Facebook (NASDAQ: FB) has made its first move into everyday wearable technology. Last week, the company announced Ray-Ban sunglasses called Ray-Ban Stories that will integrate Facebook technology. 

On the surface, the glasses with cameras, a microphone, and speakers seem aimed directly at Snap’s (NYSE: SNAP) Spectacles, which really pioneered the wearable glasses concept. And given that both companies are interested in augmented reality (AR), they might be moving in the direction of AR. But the reality is that today’s Facebook glasses are more of a competitor to Apple‘s (NASDAQ: AAPL) AirPods, and they show why wearables may be a bigger lift than the tech stock giant would like. 

The Facebook Ray-Bans

The Stories sunglasses made by Ray-Ban will cost $299 and include a number of technology features. Users can: 

• Capture pictures and video.
• Make phone calls.
• Play music.
• Use voice control with Facebook Assistant.

The glasses need to connect to the Facebook View app, which is a separate app specifically for the glasses that can connect to Facebook, Instagram, Messenger, and WhatsApp. 

It’s worth noting that these are not AR glasses as some have been anticipating (including myself). Looking at the features list, I’d say they’re probably more comparable to AirPods integrated into sunglasses than AR glasses. 

Facebook’s biggest problem

The challenge Facebook faces going from a social media software app to a hardware company is that it doesn’t own the core operating system. Whether you’re setting up a virtual reality (VR) headset or a pair of Ray-Ban Stories glasses, you need a smartphone to get started. That makes Apple’s iOS or Alphabet’s (NASDAQ: GOOG) (NASDAQ: GOOGL) Android a key cog in the ecosystem. 

This is most evident when Facebook wants to add features like a voice assistant to glasses. It requires another app to operate (and presumably, the app has to be open). AirPods, on the other hand, work with Siri as soon as they’re connected. 

Facebook is clearly trying to create its own ecosystem in virtual reality, and that could eventually extend to augmented reality glasses. But for now, glasses are dependent on iOS and Android operating systems to function, and that will hamper some of the user experience. 

Facebook is playing the long game

As much as I’m skeptical of this iteration of Facebook glasses, this isn’t the end for Facebook. The company is leveraging what it’s learned in video, audio, and voice from other products like VR headsets and put them into a pair of glasses. I expect the company will continue building on that knowledge and adding technology like AR over the next few years. 

I don’t see Ray-Ban Stories being a big seller for Facebook; it’s more of a starting line for everyday wearables. The big unknowns are whether or not customers want a product like this and if any other big tech companies will join the glasses market. For now, Facebook has a first-mover advantage, and a compelling video and audio product with Ray-Ban. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Facebook’s path into wearables will be an uphill climb appeared first on The Motley Fool Australia.

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Travis Hoium owns shares of Apple and Snap Inc. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Alphabet (A shares), Alphabet (C shares), Apple, and Facebook. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Apple, and Facebook. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Kuniko Ltd (ASX: KNI) share price is heading underground at the opening of trade on Wednesday. This is after the company released an exploration progress update this morning.

Kuniko shares are now trading at $2.25 each, a 2.16% drop from the open.

Let’s investigate what Kuniko announced and what this could mean for investors.

What did Kuniko announce?

Kuniko advised it has achieved a number of progress points at its prospective copper and cobalt projects in Norway.

Specifically, it states that field explorations at the company’s Skuterud Cobalt and Vangrofa Copper projects are now complete.

Kuniko also explains that an “airborne geophysics program” is now underway at these two sites. The airborne program is also operating at the Undal project site.

The company collected a total of 1,202 soil samples from these field explorations, according to the announcement.

Investors can expect the “initial laboratory analysis” from these sampling programs “during September and October”. Whereas data from the airborne surveys is “to be available in October 2021”.

And yet, the Kuniko share price isn’t reflecting the positive news.

What did management say?

Speaking on the announcement, Kuniko CEO Antony Beckmand said:

The launch of the airborne geophysics program is a milestone for Kuniko as we commence delivering on our commitment to apply modern exploration methods to historical battery metals resources at our project sites.

Regarding the upcoming results, Beckmand added:

We are also pleased with the progress made by our exploration field team who have been working efficiently and effectively on completing the geochemical survey programs… We look forward to sharing the results of our geophysics and geochemical surveys across September and October.

Kuniko share price snapshot

The Kuniko share price has shot up over 1,060% since listing in August, much to the delight of investors that subscribed to its initial public offering (IPO).

That return is well ahead of the Australian broad indices, including the All Ordinaries Index (ASX: XAO) loss of 2.4% over the last month.

The post Kuniko (ASX:KNI) share price drops following production update appeared first on The Motley Fool Australia.

More reading

• The Kuniko (ASX:KNI) share price is surging 20%. What’s next?
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• Kuniko (ASX:KNI) share price soars 15% amid new CEO’s unveiling
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The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Polynovo Ltd (ASX: PNV) share price has been on a disappointing run over the past few months. The medical device company’s shares have dropped 13% in the past month and by 50% in 2021 alone.

At the time of writing, Polynovo shares are adding on their losses, down 2.27% to $1.94 in early trading today.

What’s happened to Polynovo recently?

In late August, Polynovo released its full-year results for FY21, highlighting mostly strong numbers across the board.

Total group revenue increased by 32% to $29.3 million over the prior corresponding period, underpinned by growth in key markets. This included the United States and Europe, up 49% and 53% in sales, respectively.

However, on the bottom line, Polynovo achieved a net loss after tax of $4.6 million when factoring in non-cash items. This consisted of $2.6 million in share-based payments (expensing of share options).

The overall result fell short of market expectations, leading the company’s shares to fall 4% on the day. At the end of that week, its shares had sunk around 11%.

Further weighing down the Polynovo share price was a market update last Friday.

According to the announcement, the company’s chief operating officer, Dr Anthony Kaye, resigned from his position.

Polynovo managing director Paul Brennan commented:

Anthony joined Polynovo at a critical time to help complete our new manufacturing facility, oversee the commissioning of new machinery and put in place a team to deliver best practice production processes and costs.

We are disappointed to see him go. However, Polynovo is now in an excellent “business as usual” position thanks to the structural changes and team established by Anthony.

Dr Kaye joined Polynovo from CSL Limited (ASX: CSL) and is returning to CSL in a more senior position.

Polynovo share price summary

Over the last 12 months, Polynovo shares have treaded more than 13% lower, with their year-to-date performance down by 50%.

The company presides a market capitalisation of roughly $1.3 billion with approximately 661 million shares on its books.

The post The Polynovo (ASX:PNV) share price has halved this year. What’s going on? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras owns shares of CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended CSL Ltd. and POLYNOVO FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Fenix Resources Ltd (ASX: FEX) share price is a strong performer on Wednesday after the iron ore producer released its annual results and maiden dividend.

At the time of writing, Fenix shares are 8.62% higher than yesterday’s closing price, trading for 31.5 cents a share.

Fenix Resources share price rises on profit and dividend boom

Fenix Resources hit the ground running this year, dispatching its maiden shipment of Iron Ridge product in February 2021. Some key highlights from FY21 include:

• Total iron ore sales of 0.501 million wet metric tonnes (Mwmt), comprising of 0.242 Mwmt of lump and 0.259 Mwmt of fines
• Net profit after tax of $49.0 million
• Cash of $69.0 million at 30 June 2021
• Successful development of the Iron Ridge iron ore project, with first shipment in mid-February
• Maiden fully-franked dividend of 5.25 cents per share

What happened to Fenix Resources in FY21?

The Fenix Resources share price has rallied almost 36% year-to-date after its successful transition from explorer to producer.

Following a successful final investment decision in September 2020, Fenix Resources began producing iron ore in December 2020.

Lump and fines products were stockpiled at the Port of Geraldton in preparation for its first shipment which took place in February this year.

Following the maiden shipment, an additional 8 ships were successfully loaded in the reporting period, amounting to more than half a million tonnes of product shipped from the Iron Ridge project.

A 16% dividend payment is on the horizon

Despite boasting a market capitalisation of just $147 million, Fenix Resources managed to turn over a net profit of $49 million in addition to $69.0 million cash in the bank.

The company declared a 5.25 cents per share dividend, equating to approximately 51% of its net profit after tax.

At today’s prices, this represents a dividend yield of approximately 16.6%.

The Fenix Resources share price will go ex-dividend on Monday, 20 September with a payment date of Tuesday, 5 October.

The post Fenix Resources (ASX:FEX) share price eyes 16% maiden dividend appeared first on The Motley Fool Australia.

More reading

• Worried about iron ore prices? This ASX share has prices locked in at A$230/tonne
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Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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At the time of writing, the Wesfarmers Ltd (ASX: WES) share price was down 14% over the past month.

This comes at a time of when the S&P/ASX 200 Index (ASX: XJO) has only fallen by 2.6% over that same time.

What has happened in the last month that could possibly explain this decline?

Wesfarmers goes ex-dividend

Dividends and ex-dividend dates can have an impact on short-term business valuations.

An ex-dividend date is when a new shareholder is no longer entitled to the dividend. If an investor owns shares before the ex-dividend date then they are entitled to that dividend. If the investor buy shares on or after the ex-dividend date then they’re not entitled to the declared dividend.

The Wesfarmers ex-dividend date was 1 September 2021. That means that new investors in September are not going to get the $0.90 per share final dividend. On 1 September 2021, the Wesfarmers share price actually fell around $2, or 3.3% in percentage terms.

There may also have been another catalyst. The diversified retail and industrial business reported its result and gave a trading update on 27 August 2021.

FY21 result

The actual FY21 report showed double digit growth for the company.

Excluding significant items, the continuing operations saw revenue rise 10% to $33.94 billion, earnings before interest and tax (EBIT) increased 18.8% to $3.78 billion and net profit after tax (NPAT) rose 16.2% to $2.42 billion. The underlying continuing earnings per share (EPS) also grew 16.2% to 214.1 cents.

Statutory profit, including the discontinued operations and significant items, rose by 40.2% to $2.38 billion.

There were two divisions that drove most of the increase in profit. Excluding significant items, Bunnings saw earnings before tax (EBT) increase 19.7% to $2.19 billion and Kmart Group EBT surged 69% to $693 million.

The above numbers and growth gave the board the confidence to increase the full year dividend by 17.1% to $1.78 per share.

The board has also decided it wants Wesfarmers to return capital to shareholders. The recommendation is a $2 capital return per share.

FY22 trading update

Whilst there was growth in FY21, the first weeks of FY22 saw a decline in sales.

Wesfarmers reported that in the 2022 financial year to date, Bunnings total sales were down 4.7%, Kmart and Target sales were down 14.3%, Catch’s gross transaction value was down 8.5% and Officeworks sales were down 1.5%.

This may or may not be a key factor for investor thoughts about the Wesfarmers share price.

Management said sales in those retail divisions are being impacted by lockdowns and have required store closures and restricted trading in multiple regions.

However, there has been a variance in performance across regions. The company said that there was solid customer demand and trading results in areas less affected by lockdowns.

Not only are the sales being impacted, but there are also higher COVID costs relating to higher picking and fulfillment costs.

Looking at the biggest division, Bunnings, management said that solid growth from commercial customers has somewhat offset a decline in consumer sales as Bunnings is now cycling against strong demand in the prior period.

Management said that the retail divisions are well positioned for the resumption of normal trading as lockdowns and restrictions ease. It’s going to continue to look for acquisition and expansion opportunities, whilst also developing its digital offering and efficiencies across the supply chain.

Is the Wesfarmers share price an opportunity?

Brokers aren’t convinced it is yet. Analysts at UBS rate Wesfarmers as a hold, with a price target of $62.

UBS isn’t sure that consumer demand will be as strong after the lockdowns as it was before these lockdowns in NSW and Melbourne.

At the current Wesfarmers share price, UBS believes that Wesfarmers is valued at 28x FY22’s estimated earnings.

The post Why has the Wesfarmers (ASX:WES) share price tumbled 14% in a month? appeared first on The Motley Fool Australia.

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

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