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This article is about some ASX dividend shares that could be good ideas to think about in September 2021.

Businesses that are paying relatively high dividend yields may be options to boost the level of investment income from a portfolio.

Not every business has a high dividend yield. Also, just because a business has a high yield doesn’t automatically make it worth owning.

However, these two ASX dividend shares could be options:

Adairs Ltd (ASX: ADH)

Adairs is a leading home furnishings business that has a large store network as well as an impressive (and expanding) online presence with both its Adairs and Mocka brands.

Looking at the dividend, Adairs paid an annual dividend of 23 cents in FY21. That equates to a grossed-up dividend yield of 8.3% at the current Adairs share price.

According to Commsec, in FY23 it’s expected to pay an annual dividend of 26 cents per share, which is a grossed-up dividend yield of 9.4%.

Adairs says that store floor space is a key driver of store sales. Each square metre supposedly adds around $4,000 of store sales. It expects to add 8% of gross lettable area (GLA) in FY22 and then at least 5% per annum for the next five years after that with new and upsized stores.

Its linen lover membership program accounts for more than 80% of sales. Each new member adds around $400 to total sales. It’s aiming to continue to grow its linen lover membership by 10% to 15% per annum.

The number of customers shopping across both online and stores is 25% higher than FY19. Multi-channel customers are between 40% to 110% more valuable than store-only or online-only customers.

According to Commsec, the Adairs share price is valued at 10x FY23’s estimated earnings.

Magellan Financial Group Ltd (ASX: MFG)

Magellan is one of the largest fund managers in Australia. In the latest disclosure, the ASX dividend share said that its funds under management (FUM) was $117 billion.

In FY21, Magellan paid an interim and final dividend per share totalling 199.7 cents – that was an increase of 8.2%. That came after a 9% increase in average FUM to $103.7 billion. FUM growth helped management and service fee revenue grow by 7% to $635.4 million, and profit before tax and performance fees of the funds management business grew 10% to $526.6 million.

However, a drop in performance fees led to the total dividend decreasing by 2% to 211.2 cents per share.

The ASX dividend share has been launching new products and investing in external businesses like Barrenjoey to diversify the business and add more earnings streams.

Magellan is currently rated as a buy by Morgans, with a price target of $54.85. Morgans is expecting Magellan to generate higher profit in FY22 and FY23.

Magellan’s FY21 annual partially franked dividend of 211.2 cents equates to a partially franked dividend yield of 4.85% today. Morgans predicts a FY23 dividend of $2.54 per share, which would be a (presumably partially franked) yield of 5.8%.

According to the broker, the Magellan share price is valued at 16x FY23’s estimated earnings.

The post 2 ASX dividend shares that could be buys in September 2021 appeared first on The Motley Fool Australia.

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• Leading brokers name 3 ASX shares to buy today

Motley Fool contributor Tristan Harrison owns shares of Magellan Financial Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ADAIRS FPO. The Motley Fool Australia owns shares of and has recommended ADAIRS FPO. 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 BHP Group Ltd (ASX: BHP) share price has come under significant pressure on Thursday morning.

In early trade, the mining giant’s shares are down 7% to $41.71.

This means BHP’s shares are now down 21% since this time last month.

Why is the BHP share price sinking today?

There are a couple of reasons why the BHP share price is underperforming today.

One of those is further weakness in the iron ore price after curtailed steel production in China hit demand for the base metal.

According to CommSec, the spot iron ore price fell 5.9% or US$9.05 overnight to US$143.55 a tonne.

It is for this reason that the shares of fellow mining giant Rio Tinto Limited (ASX: RIO) are trading lower today.

What else is weighing on its shares?

But arguably the biggest weight on the BHP share price today is the fact that it is trading ex-dividend this morning.

This means that the company’s shares are now trading without the rights to its upcoming dividend. As a result, new buyers of BHP shares will not be entitled to this dividend and its share price has fallen to reflect this.

Eligible BHP shareholders can look forward to receiving the Big Australian’s record fully franked final dividend of 273.6 cents per share later this month on 21 September.

Is this a buying opportunity?

One leading broker that sees a lot of value in the company’s shares at the current level is Macquarie.

In the middle of last month, the broker retained its outperform rating but trimmed its price target slightly to $58.00.

Based on the latest BHP share price, this implies potential upside of 39% over the next 12 months. Macquarie is also forecasting generous dividends in FY 2022 and FY 2023.

The post Here’s why the BHP (ASX:BHP) share price is down 7% today appeared first on The Motley Fool Australia.

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

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The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price has faced some headwinds over the past week.

Whereas the S&P/ASX 200 index (ASX: XJO) has slipped 0.5% in the red over the past week, ANZ shares are down 1.3% over this time.

However, in early trade today, ANZ shares are up 0.43% to $28.10.

What’s been happening with ANZ lately?

In a positive for the ANZ share price, the company finished the month well. This came after it reported its half-year results back in May, where it recognised a 45% year-over-year (YoY) gain in statutory profit after tax.

ANZ also increased its interim dividend from 35 cents to 70 cents per share over the year. Despite this, the group’s underlying profit decreased 4% YoY to $4.9 billion.

Another factor that could weigh in on the ANZ share price is the company’s intention to repurchase up to $1.5 billion of its own shares from investors in its capital budgeting plan.

ANZ’s decision to do so is in line with the posture of other banks such as Commonwealth Bank of Australia (ASX: CBA)’s intention for a $6 billion off-market buyback.

Leading brokers also hold a positive sentiment on ANZ shares. For instance, a recent note out of Morgans reveals the firm has a belief the ANZ share price is attractive “on a valuation basis”.

As such, it has assigned a price target of $35.50 on the company’s shares, and forecasts a dividend of $1.65 per share in FY22.

Despite this apparent sentiment, ANZ shares have struggled lately, and are just over 1% in the green over the month, having come off a high of $29.53 on 13 August. That’s a 4.8% dip to this morning’s price of $28.10.

ANZ share price snapshot

The ANZ share price has posted a year-to-date return of 23%. It is also up 55% over the past 12 months.

These results have outpaced the broad index’s return of around 25% over the past year.

The post It hasn’t been a great week so far for the ANZ (ASX:ANZ) share price appeared first on The Motley Fool Australia.

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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 Flight Centre Travel Group Ltd (ASX: FLT) share price is edging lower on Thursday morning.

At the time of writing, the travel agent’s shares are down 1% to $16.75.

Why is the Flight Centre share price edging lower?

Investors have been selling down the Flight Centre share price despite the release of a positive announcement. This may be due to broad market weakness today.

In respect to the announcement, Flight Centre has revealed plans to launch its leading FCM travel management business in Japan via a joint venture (JV) with Tokyo-based NSF Engagement Corporation.

Given that the Japanese market is the world’s fourth largest corporate travel market, this is a sizeable opportunity for the company. It also means the FCM network now stretches to 97 counties.

Flight Centre’s Managing Director, Graham Turner, believes the expansion into Japan is significant.

He said: “Japan is a key corporate market because of its size and importance within the global economy as a business hub for multi-national companies. By securing an equity position in this crucial market, we will enhance our ability to win new local, regional and multi-national accounts, while also gaining greater control over and enhancing the service we provide to our existing customers with operations in Japan.”

“We believe this will become a very significant business and a valuable addition to our Asian network, which also includes businesses in China including SAR Hong Kong, India Singapore and Malaysia,” he added.

The joint venture

The release explains that FCM Japan will operate from January 2022 and will be headed by general manager Kenichi Shiraishi. He is currently the leader of NSF Engagement’s corporate travel business.

NSF Engagement Corporation’s CEO and President, Shigeru Hiromatsu, commented: “We see considerable synergy between NSF Engagement Corporation and FCM.

“FCM’s unconventional, innovative and flexible DNA resonates deeply with NSF Engagement Corporation’s belief that it is possible to use New Standards for Engagement to break through conventional concepts through technological capabilities while building a strong business with sustainable growth.”

“We are excited to partner with FCM to leverage the business’s technology and global expertise to facilitate expansion and penetrate the high potential Japanese business travel sector,” he added.

The Flight Centre share price is up 35% over the last 12 months.

The post Flight Centre (ASX:FLT) share price falls despite expansion news appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel Group 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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August marked a V-shape recovery for the Qantas Airways Limited (ASX: QAN) share price.

Shares in the Aussie airline staged an almost vertical recovery after sliding to a 10-month low of $4.24 by 20 August.

The Qantas share price surged in the lead up to its FY21 results on 26 August and continued to rally despite posting major losses for the year ended 30 June 2021.

Qantas share price rallies despite posting $1.7bn loss

The Qantas share price managed to close out the month of August 10.89% higher to a 4-month high of $5.09.

This is despite its FY21 results revealing a statutory loss after tax of $1.72 billion.

Qantas flagged that total revenue loss from COVID-19 amounted to $16 billion as “the full year impact of minimal international travel and multiple waves of domestic border restrictions continued to hit travel demand”.

Encouragingly, the company said that the periods of open domestic borders in the second half saw significant cash generation by Qantas and Jetstar. Perhaps signalling that there is a light at the end of the tunnel for the Qantas share price.

The Group’s domestic capacity steadily recovered to a peak of 92% of pre-COVID levels in May 2021, until outbreaks of the Delta variant triggered a series of lockdowns across major cities.

Any positive takeaways?

Qantas Group CEO Alan Joyce was optimistic about the outlook in the tourism industry, saying that the company is “geared to recover quickly, in-line with a national vaccine rollout that is speeding up.”

“Despite the uncertainty that’s still in front of us, we’re in a far better position to manage it than this time last year. We’re able to move quickly when borders open and close. We’re a leaner and more efficient organisation.”

“When Australia reaches those critical vaccination targets later this year and the likelihood of future lockdowns and border closures reduces, we expect to see a surge in domestic travel demand and a gradual return of international travel,” Joyce said.

Joyce’s optimistic outlook might have taken the spotlight away from the company’s $1.72 billion loss. Surprisingly, the Qantas share price rallied 3.49% on the day of its full year results announcement.

Looking ahead, Qantas expects vaccination rates to reach 70% of the eligible population by November, enabling domestic knockdowns and border restrictions to be steadily eased.

The company’s key assumptions for FY22 include a strong uplift in Group domestic capacity, from 38% of pre-COVID figures in the first quarter of 2022 to 53% in the second quarter of 2022, as well as a rise to 110% in the second half of FY22.

The post Here’s why the Qantas (ASX:QAN) share price rallied 10% in August appeared first on The Motley Fool Australia.

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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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The past week has not been kind to the Insurance Australia Group Ltd (ASX: IAG) share price.

Shares in the insurer have sunk more than 3% from an opening price of $5.46 on 25 August to $5.29 at the closing bell yesterday.

Let’s take a look at why the IAG share price has taken a tumble.

What’s weighing down the IAG share price?

There are several catalysts that could explain why IAG shares have struggled this past week.

Since the company hasn’t released any price-sensitive news during this period, it’s important to consider the overall price action.

Leading into the past week, shares in IAG had surged more than 12% for the month of August. As a result, it could be assumed that investors might be cashing in their profits.

In addition, the IAG share price could be under pressure after its competitor Steadfast Group Ltd (ASX: SDF) raised $200 million to expand its presence.

Investors could also be re-rating the IAG share price following its full-year results.  

How did IAG perform in FY21?

For the year ending 30 June 2021, IAG reported a statutory loss of $427 million for the full year.

Other notables from the insurer’s full-year report included:

• Gross written premium (GWP) increased 3.8% to $12,135 million
• Insurance profit up 35.9% to $1,007 million
• Underlying insurance margin down 130 basis points to 14.7%
• Reported insurance margin up 340 basis points to 13.5%
• Cash earnings up 170% to $747 million
• Full-year dividend doubled to 20 cents per share.

IAG highlighted a 35.9% increase in its reported insurance profit of $1,007 million. The insurer cited lower natural perils costs, positive credit spreads and lower motor claims for the improved margins.

However, IAG noted that significant one-off corporate expenses had resulted in the company reporting a net loss for the year.

Snapshot of the IAG share price

Despite struggling this past week, shares in IAG have enjoyed a strong year thus far. Since the start of 2021, shares in the insurer are trading about 12% higher.

However, shares in IAG are lagging far behind the broader S&P/ASX 200 Financials Index (ASX: XFJ), which is up more than 21% year to date.

Following a disastrous 2020, several catalysts have made it tough for the IAG share price to recover.

Of note, IAG was on the receiving end of an unsuccessful court case in New South Wales last year. The landmark court case sought to exclude pandemic lockdowns from business interruption policies.

The post Here’s why the IAG (ASX:IAG) share price is down 3% in a week appeared first on The Motley Fool Australia.

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Motley Fool contributor Nikhil Gangaram 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 Insurance Australia Group Limited. The Motley Fool Australia has recommended Steadfast Group Ltd. 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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You know, there are two ways to try to build a business:

You can pull a Steve Jobs, and offer customers something they didn’t know they wanted.

That’s how we got the iPhone.

It’s also how we got the Laser Disc, so there’s that.

If you can tap into something deep — or create that ‘something’ with a great product and great marketing, you’re set.

Afterpay Ltd (ASX: APT) might be perhaps the best recent Australian example.

It’s a high-wire act, but it’s possible for a special few.

The other way?

You can ask customers what they want, then build it.

Bonus points if the customer will pay you to build it, and you can sell that same thing to even more customers.

Unlikely?

For the most part, yes.

Woolworths Group Ltd (ASX: WOW) can’t ask each customer what they want, then stock just those things.

And even if they did, it’s not a great way to run a high volume, wide-range business.

Ah, but if you’re a software company?

Well, that’s different.

Not only can you design something by working with current or prospective customers, but they’ll likely pay you for doing the work.

No, not ‘Build it and they will come’, but rather ‘They’ll come, and then you can build it’.

Sounds good huh?

And, as I intimated above, the great thing about software is that it’s completely replicable.

Write the code for one customer, and you can sell the resulting software to tens, hundreds, and thousands of others.

It’s so good that it’s almost unfair.

No business is quite that straightforward, of course, but it beats many of the alternatives.

You don’t have to put cars on the lot.

You don’t have to build the apartment building and hope the buyers come.

You don’t have to tool up the factory, hoping they’ll want your widgets.

Being able to build something, to meet a customer’s needs, who then commits to take the end result… well, that’s a pretty good start.

Then sell a copy. And another one. And another.

Good huh?

(A quick aside: it’s one of the benefits of studying company business models. Knowing how and when the cash flows, plus the assets and liabilities involved in running a business can be a big advantage. It doesn’t always lead to outsized investment returns, but can help swing the odds in your favour).

Investing doesn’t need to be super-complex.

But knowing a little about how a company makes its money, as well as the advantages and disadvantages of its business model, can really make a big difference.

Fool on!

The post Another reason software wins appeared first on The Motley Fool Australia.

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• The CBA (ASX:CBA) share price is now trading on a 3.46% fully-franked dividend yield
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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. owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. 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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August was a big month for ASX 200 dividend shares. The latest earnings season saw some surprise income boosts but it wasn’t all good news for shareholders of the S&P/ASX 200 Index (ASX: XJO) constituents.

Here are some of the notable names that slashed payouts to shareholders in the most recent reporting season.

ASX 200 dividend shares that slashed dividends in August

1. AGL Energy Limited (ASX: AGL)

AGL Energy Limited (ASX: AGL) was one of the big names to slash payouts. The decision came after a difficult 2021 for shareholders as the pandemic continued to weigh on energy shares. The AGL share price is down 45.6% in 2021 and the group’s FY21 results didn’t provide great news for shareholders.

AGL reported a 10% drop in revenue as underlying net profit slumped 33.5% to $537 million. The Aussie energy generator and retailer slashed its final dividend by 23.5% to 75 cents per share and ultimately slid lower in August.

2. Origin Energy Ltd (ASX: ORG)

Perhaps unsurprisingly, another ASX energy giant also trimmed its payout in August. Origin, another of the Big 3 Aussie energy companies, slashed its final dividend from 10 cents in FY20 to 7.5 cents in FY21.

The ASX 200 dividend share slumped lower following the news after Origin reported a $2.2 billion net loss. Investors weren’t pleased with the 20% decline in the full-year dividend payout after a tough year for ASX energy shares marred by COVID-19 restrictions and lower energy prices.

3. Carsales.Com Ltd (ASX: CAR)

Carsales.Com Ltd (ASX: CAR) was another notable ASX 200 dividend share to slash payouts in August.

The Aussie online automotive and marine classifieds business cut its final dividend by 10% to 22.5 cents per share. That came despite Carsales reporting an 11% jump in net profit after tax to $153 million and “excellent free cash flow generation”, according to its media statement.

The post These ASX 200 dividend shares slashed their payouts in August appeared first on The Motley Fool Australia.

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• AGL Energy (ASX:AGL) hits record low, slides a further 12% in August
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Motley Fool contributor Ken Hall 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 carsales.com 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 Pilbara Minerals Ltd (ASX: PLS) share price was on form again in August.

During the month, the lithium miner’s shares smashed the market with a sizeable gain of 25%.

This means that Pilbara Minerals shares are now up over 150% since the start of the year.

Why did the Pilbara Minerals share price race higher in August?

There were a number of catalysts giving the Pilbara Minerals share price a boost last month.

This includes strong lithium prices, the release of its full year results for FY 2021, positive broker notes, and the results of the lithium miner’s inaugural battery materials exchange (BMX) auction.

In respect to its results, in FY 2021 Pilbara Minerals reported a 142% increase in shipments to 281,440 dry metric tonnes (dmt). This underpinned a 108.9% increase in revenue to $175.8 million.

Management’s forecast for the year ahead also appears to have given investor sentiment a lift. It is forecasting shipments of 440,000 to 490,000 dmt for the year. This will be a 56.3% to 74.1% increase on FY 2021’s shipments. Which bodes well for its sales in FY 2022, especially given how strong lithium prices have been this year.

Bullish brokers

Also helping drive the Pilbara Minerals share price higher last month was a bullish broker note out of Macquarie.

That note reveals that its analysts have retained their outperform rating and lifted their price target on the company’s shares to $2.70.

Based on the latest Pilbara Minerals share price, this implies potential upside of almost 22% over the next 12 months.

Macquarie is very positive on the company due to its favourable outlook for lithium prices and Pilbara Minerals’ long term production growth potential. The broker believes the company can grow its production by an average of 20% per annum over the next seven years.

The post Here’s why the Pilbara Minerals (ASX:PLS) share price is up 25% in a month appeared first on The Motley Fool Australia.

More reading

• ASX 200 miners dominate most traded shares on Monday
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• When was the best ever day on the Pilbara Minerals (ASX:PLS) share price chart?

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 Bruce Jackson.

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The Commonwealth Bank of Australia (ASX: CBA) share price has enjoyed robust returns over the past year.

In fact, investors were treated with the company’s full year results on 11 August, underlining growth across key metrics.

At Wednesday’s market close, CBA shares finished the day up 0.88% to $101.

What’s happened to CBA recently?

Investors have been bidding on the CBA share price in 2021 as the company continues to impress the market.

According to its latest scorecard, CBA achieved almost a 20% increase of statutory net profit after tax to $8,843 million. An improvement in Australia’s economic conditions and outlook resulted in lower loan impairment expenses of $554 million, down 78% on FY20.

In addition, net interest margin came to 2.03%, down 4 basis points due to higher liquid assets. The impact of a low-rate environment had been largely offset by management actions, lower wholesale funding costs and favourable funding mix.

It’s worth noting that CBA is conducting a $6 billion off-market share buy-back to reduce surplus capital and increase shareholder value. The capital management program will see about a 3.5% reduction of its total shares on the registry.

Basically, this means that when CBA buys back its shares, the number of shares on its registry will decrease. With a lesser amount, this effectively increases the value of each share as the revenue and profits remain the same.

Traditionally, when this occurs, a company’s share price tends to rise over time.

CBA shares are just 7.3% off their all-time high of $109.03, which was reached on the day the company reported in August.

How much is CBA paying in dividends?

CBA is scheduled to pay a fully-franked dividend of $2 per share to eligible shareholders on 29 September. Coupled with the interim dividend of $1.50, the full year dividend for FY21 is $3.50 per share. This represents a 17% increase on FY20’s dividend, and a payout ratio of 71% on the bank’s cash earnings.

When factoring in the current CBA share price along with its full year dividend, CBA’s dividend yield rises to 3.46%.

About the CBA share price

In 2021, the CBA share price gained around 20% in value for investors. However, when looking at this time last year, its shares are up roughly 50%, highlighting significant returns for a blue-chip company.

On valuation grounds, CBA is the biggest company on the ASX with a market capitalisation of approximately $179.1 billion.

The post The CBA (ASX:CBA) share price is now trading on a 3.46% fully-franked dividend yield appeared first on The Motley Fool Australia.

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• Is the CBA (ASX:CBA) share buyback a sign of limited growth potential?
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Motley Fool contributor Aaron Teboneras 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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