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The ASX growth share part of the market has been punished over the last year and a half as investors worried about the effects of inflation and higher interest rates on the underlying value of businesses.

Interest rates can act like gravity on asset valuations – the higher they go, the harder it pulls down (in theory) on share prices.

The share prices of both of the businesses that I’m going to talk about have dropped at least 18% from their peaks in 2021, yet the businesses have a really strong, profitable outlook.

Xero Limited (ASX: XRO)

Xero is a leading cloud accounting software business. The business has done very well at growing into a global business. At the end of September 2022, it had 3.5 million subscribers (which was a 16% rise year over year).

In the FY23 half-year result, Australia saw 126,000 net subscriber additions to reach a total of 1.47 million subscribers. New Zealand saw 24,000 net subscriber additions to reach a total of 536,000, the UK experienced 44,000 net subscriber additions to reach 894,000 subscribers, North America saw 15,000 net subscriber additions to reach 354,000 subscribers and the ‘rest of the world’ saw 16,000 net subscriber additions to reach 242,000 subscribers.

It’s clear that the business is seeing success around the world. I think its time-saving and automation tools will continue to attract new subscribers for years to come.

The business has an extremely high retention rate, which is a good sign that these new subscribers will stay for a long time. It also continues to see a rise in the average revenue per user (ARPU), which rose 13% year over year in HY23.

The ASX growth share has recently committed to becoming more profitable, balancing growth and increasing margins.

By 2030, I think the ASX growth share could be making a very large amount of profit, and I believe this will translate into good shareholder returns for Xero as the market recognises how profitable the underlying business is.

Altium Limited (ASX: ALU)

Altium is an electronic PCB software developer. It also has a few other growing segments, such as Octopart – a search engine for electrical parts.

The company’s growth rate slowed during the COVID-19 period, but it has bounced back strongly. In the first half of FY23, it saw revenue growth of 17% and net profit after tax (NPAT) growth of 30% to US$29.6 million. For FY23 as a whole, it’s expecting total revenue growth of 15% to 20%.

By FY26, it’s targeting total revenue of US$500 million and an underlying earnings before interest, tax, depreciation and amortisation (EBITDA) margin of between 38% to 40%. In the HY23 result, the underlying EBITDA margin was 36.2%.

A growing proportion of the company’s revenue is recurring revenue, which is good for longer-term profit margins and earnings visibility.

There is a growing amount of advanced electronics in the world, such as cars, robot vacuum cleaners, phones and so on. I think this sets up Altium for long-term future success.

Management is aiming for Altium to become the world’s largest ‘manufacturer’ of electronics but without owning any factories, in the same way that Uber is a taxi company that doesn’t own taxis and Airbnb is the world’s largest accommodation provider but owns no real estate.

As it grows, I think the business can become even more profitable, have an even more loyal subscriber base and continue to pay growing dividends.

The post 2 exciting ASX growth shares I’d buy and hold to 2030 appeared first on The Motley Fool Australia.

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More reading

• Morgans names more of the best ASX 200 stocks to buy in May
• These fantastic ASX 200 tech shares have been named as buys by analysts
• ‘Under the radar success’: 3 quality ASX 200 growth shares to buy right now
• Top ASX shares to buy in May 2023
• Top brokers name 3 ASX shares to buy next week

Motley Fool contributor Tristan Harrison has positions in Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Airbnb, Altium, Uber Technologies, and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Airbnb. 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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Many small-cap ASX shares don’t get a lot of attention, but they may be able to achieve stronger returns than blue-chip ASX shares.

A business that goes from a market capitalisation of $200 million to $500 million represents an impressive gain. But $500 million would still count as a relatively small business compared to names like Telstra Group Ltd (ASX: TLS) and Commonwealth Bank of Australia (ASX: CBA).

Certainly, it can be a much harder task for a business worth $20 billion to grow to $50 billion.

Yet just because a business is small, it doesn’t automatically mean that it’s going to grow significantly. However, I think the following two can generate market-beating returns over the next three to five years.

Dusk Group Ltd (ASX: DSK)

Dusk describes itself as a specialist in home fragrance products, offering “a range of Dusk branded premium quality products at competitive prices”. Dusk designs its product range which is exclusive to the company.

Its offerings include candles, ultrasonic diffusers, reed diffusers, and essential oils, as well as fragrance-related homewares. The goal of the company is to be “customers’ preferred destination for home fragrance products and for their gifting needs”.

I think the dividend income from the small-cap ASX share alone could be very attractive. Certainly, if the dividend income can beat the returns of the ASX share market, then we don’t need to rely on strong capital gains.

Commsec numbers suggest the dividend per share could be 14 cents, which would be a grossed-up dividend yield of 13%. By FY25, the business could pay a dividend per share of 18 cents per share which would be a grossed-up dividend yield of 16.8%.

The business could generate earnings per share (EPS) of 19.9 cents in FY23, which suggests the Dusk share price is valued at under eight times FY23’s estimated earnings. At the end of the first half of FY23, it had net cash of $32.9 million, meaning its balance sheet is in a strong position.

The business is planning to grow by launching new products, expanding its store network, increasing benefits of scale, and long-term growth of online sales.

Universal Store Holdings Ltd (ASX: UNI)

This small-cap ASX share owns a portfolio of “premium youth fashion brands and omni-channel retail and wholesale businesses”. Those brands include Universal Store, THRILLS, and Perfect Stranger. It has more than 90 physical stores with a target market of 16 to 35-year-olds.

The retail business may be less impacted by higher interest rates because not many of its customers may have (large) mortgages.

Universal Store is seeing increasing profit margins as it grows, which is promising as it becomes larger. In the first half of FY23, group sales grew by 34.5% to $145.7 million and underlying earnings before interest and tax (EBIT) increased 43.2% to $28.5 million.

By the end of FY23, it’s looking to have between 101 to 103 group stores across the three brands.

Commsec numbers suggest Universal Store earnings and its dividends are going to keep rising between FY23 to FY25. It’s valued at less than 11 times FY23’s estimated earnings and under eight times FY25’s estimated earnings – suggesting 34% growth between FY23 to FY25.

The dividends could also be impressive in the coming years. The small-cap ASX share’s grossed-up dividend yield in FY23 could be 8.3%, while the FY25 grossed-up dividend yield could be 11.4%.

The post I think these 2 ASX small cap shares could make big returns appeared first on The Motley Fool Australia.

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More reading

• Morgans names 2 of the best small cap ASX shares to buy
• Follow the free cash flow: Could these unloved ASX shares be worth buying?
• Why these ASX 300 retail shares could be immune to rising interest rates
• Expect big yields from these buy-rated ASX dividend stocks: brokers
• This ASX share could pay a 16% dividend yield by 2025

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 positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Dusk 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 Westpac Banking Corp (ASX: WBC) dividend has just been declared and the bank’s FY23 half-year result announced.

The ASX bank share had a pleasing six months to 31 March 2023, with the bank benefiting from slightly lower operating costs and stronger lending profitability. Net profit after tax (NPAT) jumped by 22% to $4 billion.

Westpac’s stronger profit allowed the bank to pay a larger dividend to shareholders.

Westpac dividend

The ASX bank share’s board decided to declare a fully franked dividend per share of 70 cents. This represents an increase of 15% year over year. It also represents an increase of 9.4% compared to the final dividend of FY22.

Westpac’s dividend has an ex-dividend date of 11 May 2023. This means if investors want to receive the dividend, they need to own the shares before this date. With that cut-off only a few days away, interested investors need to be quick and grab shares before the end of trading on Wednesday, 10 May 2023.

The payment date for the 70 cents per share Westpac dividend is 27 June 2023, so shareholders will only need to wait for about six weeks to get their payout.

If shareholders want to use the dividend reinvestment plan (DRP), the election cut-off date is Monday, 15 May 2023 at 5pm (Sydney time).

Can the payment to shareholders keep growing?

There are a couple of positive signs to forecast the Westpac FY23 final dividend could be bigger than the FY22 final dividend.

The bank’s balance sheet is strongly positioned. Its common equity tier 1 (CET1) capital ratio was 12.3%, which was above its target range of 11% to 11.5%. In dollar terms, it has $3.6 billion of capital above the top end of its target range.

This is what the bank said regarding its outlook:

It’s been one year since the RBA announced the first rate rise of the current tightening cycle. This has been difficult for many customers and more are calling us to discuss their situation. The bank is in a good position to help.

At a macro level, our loan portfolios remain healthy. Most mortgage customers are ahead on repayments. Offset balances were little changed and mortgage delinquency levels are low.

Interest rates are now closer to their forecast peak, but we are focused on how long they stay high and what this means for household budgets and discretionary spending. We expect to see more stress in the period ahead, particularly in small business.

While the Australian economy remains resilient with low unemployment and high population growth, it is expected to slow over the remainder of 2023. Credit growth – both housing and business – will ease. Intense mortgage competition is expected to negatively impact industry and Westpac’s margins in the next half.

Westpac enters this environment from a position of strength. We’ve set the balance sheet for the tougher outlook. We continue to run the bank conservatively, with the flexibility to support growth and handle the more challenging conditions.

So, while the competitive pressures may be a headwind, Westpac’s business continues to be strong, which could be good news for the next Westpac dividend.

The post Here’s what you need to know about the 70 cents Westpac dividend appeared first on The Motley Fool Australia.

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More reading

• Westpac share price on watch amid $4bn half-year profit
• 5 things to watch on the ASX 200 on Monday
• Morgans names the best ASX 200 dividend shares to buy in May
• Banking crisis continues: What’s up (and down) with ASX 200 bank shares today?
• 4 reasons to buy ASX 200 banks stocks right now

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended 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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Lynas Rare Earths Ltd (ASX: LYC) shares are soaring after the company announced a major win for its Malaysian facility.

It’s now allowed to keep operating the facility’s cracking and leaching plant until the start of 2024.

However, the rare earths producer’s battle to remove the recently-imposed restrictions entirely is still ongoing.

Right now, Lynas shares are trading at $7.37 apiece, 12.01% higher than the stock’s previous close.

Let’s take a closer look at what’s going on with the S&P/ASX 200 Index (ASX: XJO) rare earths stock on Monday.

Lynas announces extension on Malaysian ban

The Lynas share price is taking off on news the company will be allowed to continue importing and processing lanthanide concentrate in Malaysia until 1 January 2024. That’s six months later than its previous cut-off – 1 July 2023.

That means a shutdown of the entire Malaysian plant will be avoided, with the company using the extra time to secure new feedstock.

Lynas’s Malaysian facility is the world’s largest single rare earths processing plant.

The company’s licence to operate in Malaysia was renewed by the country’s Department of Atomic Energy in February. However, a condition that it may not import and process lanthanide concentrate – announced in 2020 – remained. The ban was imposed amid concerns about radioactive waste.

The rare earths producer previously said the ban would force it to temporarily shut down the entire Malaysian facility from July as it transitioned to using feedstock from its up-and-coming Kalgoorlie Rare Earths Processing Facility.

Lynas appealed to the Malaysian Minister of Science, Technology, and Innovation (MOSTI) to overturn the ban in February. Aside from extending the cut-off date, the MOSTI Minister has dismissed the company’s appeals.

Lynas notes Malaysia offers legal avenues to review the licence conditions. It plans to seek a review into such avenues to ensure it’s “treated fairly and equitably as a Foreign Direct Investor and as a significant employer and contributor to the Malaysian economy”.

Lynas Rare Earths share price snapshot

The Lynas share price is having a rough slog as of late.

Even with today’s big jump, the stock has slumped 6% so far this year. It’s also 18% lower than it was this time last year.

For comparison, the ASX 200 has risen 4% year to date and 2% over the last 12 months.

The post Why is ASX 200 share Lynas Rare Earths leaping 12% on Monday? appeared first on The Motley Fool Australia.

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More reading

• Dalio says US and China ‘on brink of war’. Which ASX shares could be impacted?
• Here are the top 10 ASX 200 shares today
• Why Link, Lynas, Telix, and Whitehaven Coal shares are pushing higher today
• Lynas share price gains despite quarterly revenue taking a 28% dive
• Why have investors fallen out of love with Lynas shares?

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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Baby Bunting Group Ltd (ASX: BBN) is an All Ordinaries (ASX: XAO) stock, or ASX All Ords stock, that has a significant valuation decline. But, it’s projected to make a big earnings recovery over the next few years, which could also mean a strong dividend yield by FY25.

Baby Bunting is a retailer that sells a variety of products for young children including prams, car seats, furniture, toys, clothes and so on.

It has been facing heightened competition, which hurt the gross profit margin and overall profitability. Over the past year, the Baby Bunting share price has dropped by around 50%.

But, this could be an opportunistic time to consider the business when investors are feeling pessimistic.

Baby Bunting dividend yield expectations

Commsec projections currently suggest that the ASX All Ords stock could pay an annual dividend per share of 11.2 cents, which would be a grossed-up dividend yield of 7.4%.

In FY24, the Baby Bunting annual payout could increase to 13.4 cents, which would equate to a grossed-up dividend yield of 8.9%.

By FY25, the All Ords ASX stock might pay an annual dividend per share of 16.1 cents. This would be a grossed-up dividend yield of 10.6%.

Earnings per share (EPS) are also expected to rise, which will be key for funding those larger dividends.

Commsec numbers suggest that the business might generate EPS of 16.3 cents this year, putting it at 13 times FY23’s estimated earnings. But, by FY25, EPS could jump to 24.2 cents. This would mean the current Baby Bunting share price is valued at just 9 times FY25’s estimated earnings.

What could drive the All Ords ASX stock’s earnings higher?

The business has outlined its strategy and future initiatives, including growing its market share from its core business, investing in digital, growing in new markets and profit margin improvement.

The All Ords ASX stock continues to roll out new stores. When it announced its FY23 half-year result, it said it had 69 stores in Australia and two in New Zealand. The company thinks it can reach 110 stores in Australia and 10 in New Zealand.

Baby Bunting is working on its marketplace offering, which presents a “significant revenue opportunity”. It’s working with a number of suppliers and plans to have 1,000 additional products as part of the new curated marketplace.

The business was already seeing the gross profit margin in January 2023 being in line with its recovery plans and “up” on the prior year.

If it’s successful at turning things around, it would presumably help the Baby Bunting share price and the dividend. So, it could achieve good capital growth and good dividends from here.

The post This ASX All Ords stock could pay an 11% dividend yield by FY25 appeared first on The Motley Fool Australia.

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More reading

• After big falls, these ASX 300 shares look dirt-cheap!
• Down 60% in 12 months, I’d buy these 2 ASX All Ords shares for the turnaround

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 positions in and has recommended Baby Bunting Group. The Motley Fool Australia has recommended Baby Bunting 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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Investors on the lookout for historically reliable passive income may wish to revisit Australia and New Zealand Banking Group Ltd (ASX: ANZ) shares.

On the capital gains front, ANZ shares are up 3.4% since the opening bell on 3 January. However, the S&P/ASX 200 Index (ASX: XJO) bank stock remains down 7.8% over the past full year.

Of course, that’s not including the two fully franked dividends ANZ delivered over those 12 months.

Which brings us to how much passive income you could earn if you invested $10,000 in ANZ shares today.

How much passive income could ANZ shares provide?

Before diving into the answer, it’s important to note that some of the dividend yields we discuss here are trailing yields. Meaning they’re based on the dividend payments already made over the prior 12 months.

Now, with the exception of the pandemic-addled year of 2020, the passive income delivered by ANZ shares has been quite consistent. But future dividend payments could be higher or lower than what was paid over the year just past.

With that said, ANZ paid a final dividend of 74 cents per share on 15 December.

When the big four bank delivered its half-year results on Friday, the board declared an interim dividend of 81 cents per share. That’s up 9.5% from last year’s interim dividend, driven by all-time high cash earnings. Cash earnings for the six months were up 12% to $3.82 billion.

ANZ shares trade ex-dividend next Monday. Meaning investors who want to score the 81 cents per share in passive income need to own the bank stock by market close this Friday, 12 May to be eligible. That fully franked dividend will hit shareholders’ bank accounts on 3 July.

All told then, ANZ has paid (or declared) a total of $1.55 per share in dividends over a year.

At Friday’s market close share price of $23.80, that works out to a yield of 6.5%, with potential tax benefits.

Meaning that for a $10,000 investment, ANZ shares can offer $651 a year in convenient passive income.

The post If you invest $10,000 in ANZ shares here’s how much passive income you’ll earn appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Monday
• Is it time to buy ANZ shares after its strong results?
• Why ANZ, Block, Pilbara Minerals, and SSR Mining shares are storming higher
• Banking crisis continues: What’s up (and down) with ASX 200 bank shares today?
• Everything you need to know about the 81 cents ANZ dividend

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

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If you’re looking to add some mining sector exposure to your portfolio, then it could be worth checking out the two ASX 200 mining shares listed below.

Here’s why these could be top options in the sector right now:

Chalice Mining Ltd (ASX: CHN)

The first ASX 200 mining share that could be a buy is Chalice Mining.

It is the mineral exploration company behind the 100%-owned, globally significant Julimar project in Western Australia. This project is on course to become one of the largest PGE-NiCu deposits in the world based on recent drilling. This is a huge positive given how important these metals will be for the decarbonisation of the planet.

Bell Potter is a big fan of the company. It recently said:

CHN’s 100%-owned Julimar project is a globally significant PGE-NiCu deposit. Located 70km north of Perth in WA, it represents a unique opportunity to establish new strategic PGE and base metals supply in a top mining jurisdiction.

The broker has a speculative buy rating and $11.73 price target on its shares.

Rio Tinto Ltd (ASX: RIO)

Another ASX 200 mining share that has been named as a buy is Rio Tinto.

It is of course one of the world’s largest miners with a diverse portfolio of operations and projects across a number of commodities and geographies.

The team at Goldman Sachs is very positive on the mining giant at the moment. This is due partly to its attractive valuation, strong free cash flow generation, and production growth outlook. It explains:

We are Buy rated (on CL) on RIO due to: (1) compelling relative valuation vs. peers, (2) Strong FCF and dividend yield with our bullish view on iron ore, aluminium and copper prices, (3) Strong production growth in 2023 & 2024, (4) Pilbara turnaround (~50% of group NAV), (5) Compelling high margin low emission aluminium exposure.

Goldman has a buy rating and $136.20 price target on its shares.

The post Brokers say these ASX 200 mining shares are top buys appeared first on The Motley Fool Australia.

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More reading

• Why the iron ore price is ‘not out of the danger zone’
• Top ASX passive income shares to buy in May 2023
• The Rio Tinto share price dumped 7% in April. Here’s why
• 2 ASX 200 mining shares to buy for big dividends: analysts
• Rio Tinto shares: Buy, hold or fold in May?

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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If you’re searching for ASX dividend stocks to buy for passive income, then the two listed below could be worth looking at.

Both have been tipped as buys with meaningful upside potential and big forecast yields.

Here’s what you need to know about them:

Rural Funds Group (ASX: RFF)

The first ASX dividend stock that has been named as a buy is Rural Funds.

It is a real estate investment trust (REIT) with a focus on agricultural properties. Its portfolio comprises assets including orchards, vineyards, water entitlements, cropping, and cattle farms.

Analysts at Bell Potter are positive on Rural Funds. In fact, they believe its shares could be cheap based on where they trade relative to its net asset value. The broker has previously commented that this discount to adjusted NAV reflects what would historically be considered “an attractive entry point for investors.” It has a buy rating and $2.65 price target on Rural Funds shares.

As for dividends, the broker is expecting an 11.7 cents per share dividend in FY 2023 and then a 12.2 cents per share dividend in FY 2024. Based on the current Rural Funds share price of $1.97, this represents yields of 5.9% and 6.2%, respectively.

South32 Ltd (ASX: S32)

Another ASX dividend stock that could give your passive income a lift is diversified miner South32.

Goldman Sachs recently became positive on the company for a number of reasons. It explained:

We rate S32 a Buy based on: (1) Attractive valuation, (2) Improving FCF outlook on higher production & commodity prices (base metals and met coal), (3) Supportive share buyback and dividend yield, (4) Upside potential from base metal growth projects.

The broker is expecting the above to result in fully franked dividends of 12 US cents per share in FY 2023 and then 28 US cents per share in FY 2024. Based on the current South32 share price of $4.13 and the latest exchange rates, this will mean yields of 4.3% and 9.9%, respectively.

Goldman Sachs also sees decent upside for its shares with its buy rating and $4.80 price target.

The post Here’s why brokers say these ASX dividend stocks with big yields are buys appeared first on The Motley Fool Australia.

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More reading

• Want $200 in weekly passive income? Buy 85,200 shares of this ASX 300 stock
• Top ASX passive income shares to buy in May 2023
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Analysts say income investors should buy ANZ and these ASX dividend shares

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 Rural Funds 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 IGO Ltd (ASX: IGO) share price has nearly tripled over the last five years.

The stock was trading at just $4.92 in May 2018. That means a $3,000 investment at that point in time would have seen a buyer walking away with 609 IGO shares.

Today, that holding would be worth an eye-popping $8,757.

The IGO share price last traded at $14.38, marking a 192% gain for the period.

For comparison, the S&P/ASX 200 Index (ASX: XJO) has lifted just 18% since May 2018.

While the ASX 200 critical metals producer outperformed the index 10 times over, it also continued to post regular dividends.

Let’s take a look at all the passive income our figurative investment in IGO shares has provided over its life.

All dividends paid to those invested in IGO shares since 2018

Here are all the dividends the ASX 200 company has provided over the last five years:

IGO dividends’ pay date	Type	Dividend amount
March 2023	Interim	14 cents
September 2022	Final	5 cents
March 2022	Interim	5 cents
September 2021	Final	10 cents
September 2020	Final	5 cents
February 2020	Interim	6 cents
September 2019	Final	8 cents
March 2019	Interim	2 cents
September 2018	Final	2 cents
Total:		57 cents

As the chart shows, each IGO share has yielded 57 cents of passive income since May 2018. That means our $3,000 investment has brought in $347.13 over its life.

Factoring in both the company’s share price gains and dividends, an investment in the stock five years ago has likely provided a total return on investment (ROI) of nearly 204%.

And that’s before considering the potential compounding an investor might have realised if they were to have reinvested their dividends, using them to buy more IGO shares.

Not to mention, the franking credits offered alongside many of the company’s dividends might have provided further benefits for some shareholders at tax time.

Right now, IGO shares are trading with a 1.3% dividend yield.

The post Snapped up $3,000 of IGO shares 5 years ago? Here’s how much passive income your investment has brought in appeared first on The Motley Fool Australia.

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More reading

• Buy this ASX 200 lithium share in May: Goldman Sachs
• ASX lithium shares: Short-term pain for long-term gain?
• IGO share price lifts on news of record quarterly profit
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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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There are plenty of ASX shares that have gone through significant pain in recent times. But it’s worth noting when something has fallen heavily, it could present an excellent buying opportunity.

I like the look of investments that are delivering underlying growth of their businesses while their share prices are a lot cheaper.

In my opinion, investing $5,000 into the following ASX shares could lead to that amount growing to $15,000. That would represent growth of 200%.

Australian Ethical Investment Ltd (ASX: AEF)

This ASX share has dropped by 78% since November 2021 when it was trading at around $14.70. It’s currently $3.21 per share. The share price would only need to recover to around $9.60 to deliver that sort of capital growth.

The business is focused on providing people with investment options in businesses that are trying to provide a more sustainable, low-carbon future.

Despite the difficult operating conditions with volatile markets, the business is seeing growth in its funds under management (FUM). It also recently took on $1.93 billion of FUM from Christian Super members, boosting its scale.

It’s expanding in a number of different ways, such as increasing its presence in the financial adviser channel and working on its product development pipeline.

This ASX share can benefit from regular superannuation contributions into the funds. The company is targeting revenue of more than $100 million and the business is expecting operating leverage to emerge.

Fund managers can be very scalable in that the same-size investment team can manage $7 billion almost as easily as $6 billion. This means profit margins can rise as the ASX share grows.

Betashares Asia Technology Tigers ETF (ASX: ASIA)

This is an exchange-traded fund (ETF) that gives investors exospore to the largest 50 Asian technology companies outside of Japan. Since June 2021, the ETF unit price has fallen by more than 40%.

It has been a difficult period for Asian businesses, with uncertainties in China, higher interest rates, and global inflation impacts.

But this lower price for the overall group of businesses could mean it’s a good time to invest in names like Samsung, Tencent, Taiwan Semiconductor Manufacturing, Alibaba, PDD, and Infosys.

Over the past ten years, the index that this ETF tracks has returned an average of 15% per annum. But, of course, past performance is not a reliable indicator of future performance

I think, generally, technology shares are very promising. Certainly, the large technology businesses in Asia could perform well in the long term as the Asian economy continues to digitalise.

The post Why I believe these 2 appealing ASX shares could turn $5,000 into $15,000 appeared first on The Motley Fool Australia.

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More reading

• 3 fantastic ETFs for ASX investors to buy in May
• 3 quality ASX ETFs for investors to buy for the long term
• Why I think it’s a great time to start buying ASX growth shares
• Here are a couple of high-quality ETFs to add some oomph to your portfolio
• Down 60% in 12 months, I’d buy these 2 ASX All Ords shares for the turnaround

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 positions in and has recommended Australian Ethical Investment, Taiwan Semiconductor Manufacturing, and Tencent. The Motley Fool Australia has recommended Australian Ethical Investment and Betashares Capital – Asia Technology Tigers 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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