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Insider buying is usually regarded as a bullish indicator, as few people should know a company better than its own directors.

The theory is that if they have the confidence to buy shares, it could be interpreted as a sign that things are going well and they expect them to appreciate in value.

Conversely, when directors sell shares, it is often regarded as a bearish indicator. After all, you would be unlikely to sell your shares if you felt they were about to increase in value.

With that in mind, let’s now take a look at three ASX All Ords shares that have recently reported meaningful insider selling:

Audinate Group Ltd (ASX: AD8)

The first ASX All Ords share that has reported some major insider selling is audio-visual networking solutions provider Audinate.

A change of director’s interest notice reveals that its chair, David Krall, offloaded a total of 100,000 Audinate shares through a series of on-market trades between 22 March and 27 March.

Krall received prices of between $20.70 to $22.36 per share for his sales, which equates to a total consideration in the region of $2.1 million.

Audinate explained that the chairman’s sale was undertaken to fund an investment and for personal reasons. It said:

The disposal of 20% David Krall’s shareholding in the Company is to allow an investment in a family asset and will be utilised for personal reasons. Following the sale, David Krall will retain 402,308 ordinary shares in the Company, representing approximately 0.5% of shares on issue.

Lycopodium Ltd (ASX: LYL)

This engineering and project delivery services provider is another ASX All Ords share that has experienced insider selling recently.

According to a change of director’s interest notice, the company’s founder and executive director, Bruno Ruggiero, offloaded a total of 1.35 million shares through off-market trades on 22 March and 25 March.

The release notes that Ruggiero received a total consideration of approximately $16 million from the sale.

Despite the large sale, the executive director still holds 1,650,520 Lycopodium shares.

Sovereign Metals Ltd (ASX: SVM)

Finally, one of this Africa based mineral exploration company’s non-executive directors has been selling shares recently.

A change of director’s interest notice reveals that Julian Stephens sold 3 million shares between 26 March and 27 March through a special crossing trade. The ASX All Ords share’s director received $1.43 million from the sale.

The release notes that Stephens made the sale in order to settle outstanding personal tax obligations. He is left owning a sizeable 13,557,518 shares.

The post 3 ASX All Ords insiders selling over $1 million worth of their company shares appeared first on The Motley Fool Australia.

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More reading

• 3 small-cap ASX shares with ‘long runways for growth’
• Popular ASX All Ords shares with ex-dividend dates next week
• $9,000 in savings? Here’s how I’d try to turn that into $516 a month of passive income
• 2 ASX 200 shares smashing 52-week highs that are STILL BUYS
• Guess which 4 shares are being dumped from the ASX 200 index

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 positions in and has recommended Audinate Group. The Motley Fool Australia has positions in and has recommended Audinate 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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S&P/ASX 200 Index (ASX: XJO) mining shares have built a reputation in the last few years for paying large dividends thanks to helpful commodity prices. But, one expert fears that the generous payouts may be finished, for now at least.

The broker Morgan Stanley has outlined why smaller dividends could be coming.

Smaller dividends projected for iron ore miners

According to reporting by the Australian Financial Review, Morgan Stanley thinks payouts from ASX iron ore shares BHP Group Ltd (ASX: BHP), Rio Tinto Ltd (ASX: RIO) and Fortescue Ltd (ASX: FMG) are all in line for sizeable cuts because of a much lower iron ore price and higher capital expenditure.

The broker suggested BHP’s dividend is particularly at risk because it has a large debt on the balance sheet due to the Samarco mining disaster in Brazil.

Morgan Stanley has suggested the dividend payout ratio could be 55% for the second half of FY24 and drop to 50% in FY25. That would mean BHP would be at the bottom of its minimum payout policy of at least 50% of earnings.

The broker is expecting a smaller dividend from BHP even though it has forecast that iron ore prices could return to US$120 per tonne in the third quarter as China utilises the stockpile of iron ore in the country and new supply is limited, according to the newspaper’s reporting.

Morgan Stanley suggests the iron ore price could remain supported on the supply and demand side of things, at least until the large African iron ore project called Simandou is operational.

Of the large ASX 200 iron mining shares, the broker prefers Rio Tinto because of its stake in Simandou.

The broker also likes commodity royalty business Deterra Royalties Ltd (ASX: DRR) and it has an underweight/sell rating on Fortescue shares.

Lithium payouts may also power down

Morgan Stanley is also pessimistic about dividends from ASX lithium shares.

The broker reportedly noted a concern about the Mineral Resources Ltd (ASX: MIN) balance sheet with its guidance of significant capital expenditure. Morgan Stanley suggests Mineral Resources’ dividend payout ratio may be reduced to 20% for FY24 and FY25, which is below the current policy of paying out 50% of underlying net profit.

IGO Ltd (ASX: IGO) is one ASX share that’s predicted to see a relatively low dividend payout ratio. IGO is forecast to pay 20 cents per share and 25 cents per share in the next two financial years, which would be at the lower end of its policy to pay between 20% to 40% of free cash flow.

For owners of Pilbara Minerals Ltd (ASX: PLS) shares, the broker is suggesting the ASX lithium company won’t pay a dividend in FY24 or FY25 at all because of the lower lithium price and its growth plans (which come with a large price tag).

Morgan Stanley doesn’t think the lithium price is going to fall much further in the short term. However, an ongoing increase in lithium supply could mean lithium prices won’t significantly increase.

In the ASX lithium share sector, Morgan Stanley likes Mineral Resources the most.

The post Are your big ASX 200 mining dividends in for a chop? appeared first on The Motley Fool Australia.

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More reading

• Why are Rio Tinto shares outperforming the market on Wednesday?
• What is the outlook for Pilbara Minerals shares in April?
• Why has the lithium price quietly risen 20% in 2024?
• 3 ASX shares I think will lead the next bull market charge
• 3 top ASX 200 dividend shares to buy now for $2,000 a month in passive income

Motley Fool contributor Tristan Harrison has positions in Fortescue. 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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Today, let’s discuss an ASX 300 stock that was one of the hottest shares on the market until very recently. This ASX 300 stock rose more than 120% between April and November last year, and added another 40% between November and February 2024. 

Between April 2023 and February 2024, this company returned a whopping 215% or so in share price gains. It doesn’t get much hotter than that.

And yet this company has gone from hot to cold very quickly since February. Just six weeks ago, you could have bought or sold this share for roughly $4.66 each. But today, you can trade those same shares for just $3.36 at the time of writing. That’s a fall worth almost 31%.

Why has this hot ASX 300 stock taken a cold bath?

The ASX 300 stock in question is none other than online retailer Cettire Ltd (ASX: CTT). Yes, shareholders of Cettire were enjoying a very hot investment in terms of share price gains until February. But things have dramatically come off the boil since then.

Check that all out for yourself below:

The catalyst for these most recent falls appears to be the monster $127 million stock sale by Cettire founder and CEO Dean Mintz.

In early March, we covered how Mintz managed to execute a 27.5 million block sale (representing 7.2% of all of Cettire’s outstanding shares). Mintz bagged a cool $127.3 million from this trade, which he managed to secure at a price of $4.63 per share.

Even after this sale, Mintz retains a rough 30% stake of this ASX 300 stock, and remains its largest single shareholder.

But still, investors were not impressed with this news, with the sale arguably sparking the share price slump investors have been enduring ever since. Allegations that came out around the same time, alleging that Cettire wasn’t pricing its products to correctly include shipping, duties and taxes, didn’t help either.

Is Cettire a buy right now?

So investors who enjoy adopting a ‘buy-the-dip’ mentality might be sitting up and taking note of this recent ASX 300 stock sell-off. After all, successful companies that undergo a pullback often offer up lucrative buying opportunities with the benefit of hindsight.

But let’s see what ASX experts reckon about Cettire shares right now.

Last month, we looked at one fund manager’s view on Cettire. Analysts at Wilson Asset Management (WAM) told investors they were indeed buying the dip, and heavily:

When the article [regarding the customs duties] came out, we knew the stock was going to fall a lot… so we took the liberty to buy more stock, and we’ve been buying more stock every day since.

But WAM isn’t the only one eyeing Cettire off. Last month, my Fool colleague James also covered ASX broker Bell Potter’s views on this ASX 300 stock.

Bell Potter told investors that they should indeed be buying the dip with Cettire in the wake of its stock price collapse.

The broker retained a buy rating on the company, with a 12-month share price target of $4.14. That would result in a strong recovery from where the shares are today if accurate.

Here’s some of what the broker said on its call:

We think CTT’s ability to outperform their peer group far outweighs others given the ~0.9% market share and further supported by the ongoing consolidation in the luxury e-commerce market. We also view CTT’s current EBITDA margins ahead of other e-commerce players with minimum risk associated with the drop-ship inventory model. We retain our BUY rating.

So it seems that at least these two ASX experts are united on their views of Cettire as an undervalued ASX 300 stock today. Let’s see if they’re right.

The post This hot ASX 300 stock is down 30% since February. Is it a buy? appeared first on The Motley Fool Australia.

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More reading

• Why Cettire, Harvey Norman, Orora, and ResMed shares are sinking today
• Why Baby Bunting, Bellevue Gold, Cettire, and New Hope shares are rising today
• Why Cettire shares are continuing to rebound today
• Why Bannerman Energy, Cettire, TechnologyOne, and Zip shares are charging higher
• Ignore the noise and buy this hot ASX growth stock

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 has recommended Cettire. 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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Rio Tinto Ltd (ASX: RIO) shares are edging higher on Wednesday.

At the time of writing, the mining giant’s shares are up 0.5% to $123.04.

This compares favourably to the performance of the ASX 200 index, which is currently down a disappointing 1%.

Why are Rio Tinto shares outperforming?

Today’s gain appears to be largely down to a positive night of trade for commodity prices, which has helped lift Rio Tinto and rival BHP Group Ltd (ASX: BHP).

In addition, there has been some news that could have caught the eye of investors today.

That news involves uranium developer Energy Resources Of Australia Ltd (ASX: ERA), which Rio Tinto has an 86.3% ownership.

Energy Resources of Australia has been one of Australia’s largest uranium producers and operated Australia’s longest continually producing uranium mine. However, after the closure of the Ranger Mine in 2021, it is now committed to creating a positive legacy and achieving world-class, sustainable rehabilitation of former mine assets.

This brings us to today’s announcement. According to the release, Energy Resources Of Australia has appointed Rio Tinto to manage the Ranger Rehabilitation Project under a new Management Services Agreement (MSA).

The release notes that Energy Resources of Australia’s Independent Board Committee (IBC) carefully considered the potential MSA and whether it was in the best interests of shareholders.

It concluded that there was significant value for the company, and potential cost savings, in directly leveraging Rio Tinto’s mine rehabilitation, project management experience and capability to support the safe and efficient delivery of the Ranger Rehabilitation Project.

Management commentary

Energy Resources of Australia’s Chairman, Rick Dennis, said:

We are pleased to have appointed Rio Tinto to manage the Ranger Rehabilitation Project. The Ranger Rehabilitation Project is a complex and globally significant rehabilitation and after extensive consideration the IBC has concluded that there would be significant value for ERA in directly leveraging Rio Tinto’s mine rehabilitation, project management experience and capabilities.

Rio Tinto’s Chief Executive of Australia, Kellie Parker, adds:

With the signing of this agreement, we are pleased to be able to directly provide more closure and project delivery experience and know-how to this critical task. We look forward to working in partnership with the Mirarr Traditional Owners and other stakeholders to complete the project.

In light of the appointment, an updated rehabilitation timeline for the Ranger project will be disclosed once finalised.

Rio Tinto shares are now up approximately 4% over the last 12 months.

The post Why are Rio Tinto shares outperforming the market on Wednesday? appeared first on The Motley Fool Australia.

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More reading

• Buy Coles and these ASX 200 dividend shares now
• 5 things to watch on the ASX 200 on Tuesday
• Brokers say these ASX 200 dividend stocks are buys
• What is the current lithium price?
• Here’s how the ASX 200 market sectors stacked up last week

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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The amount of money in our superannuation account when it’s time to retire will dictate whether we see out our days comfortably, modestly, or minimally.

Without a shadow of a doubt, our super balance is the most important factor for a successful retirement for the average Australian. Yet, many of us will take our employer’s contribution and call it a day, hoping it will work out in the wash. Unfortunately, hope alone is not a sound retirement strategy.

A little extra effort towards planning retirement can go a long way. Most of the hard work is taken care of by compounding. Compounding is the secret ingredient to turning $10,000 into $434,000 of superannuation.

Imagine how much more living could be had with an extra $434,000 in retirement.

1 simple step to boosting superannuation by $434,000

The power of compounding is truly remarkable. Its powerful effect on wealth creation is most potent when applied as early as possible. In the superannuation context, this point of highest potency begins at 18 years old — when super becomes mandatory irrespective of hours worked.

Here’s the trick to supercharging a super balance — using pre-tax or after-tax contributions.

If an additional $10,000 were invested at 18 years old, this amount would have compounded to $434,000 by retirement age (assuming an 8% compounded return).

For some perspective, the average Australian superannuation balance in FY21 for people aged between 65 and 69 was $428,738. That means a single investment could surpass the current 65 to 69-year-old demographic’s super balance before any employer contributions.

The boost to superannuation extends beyond the age of 18. While compounded returns are not quite as sweet, they can still make a noticeable difference.

The same approach taken at 25 can boost retirement savings by $252,395 when compounded at 8% per annum, as shown above. Likewise, a $10,000 contribution to a super balance at the age of 30 can bump the balance by $172,456 when retirement rolls around.

What if retirement is just around the corner? It’s arguably still a worthwhile investment.

$10,000 added to superannuation at 60 can grow to $17,138 by 67 if an 8% compound return is achieved. I wouldn’t turn my nose up at $7,138 extra in retirement.

The post How to turn $10,000 into $434,000 worth of superannuation with this ONE move appeared first on The Motley Fool Australia.

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More reading

• 2 ASX shares that look absurdly cheap to me
• Guess which ASX healthcare stock is rocketing 110% on US product launch
• Guess which ASX 200 gold stock is rocketing 12% on record production
• Why I think these 2 ASX dividend shares are ideal for income investors
• Novonix shares fall despite Lithium Energy merger and IPO plans

Motley Fool contributor Mitchell Lawler 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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I love finding ASX shares that are trading at appealing discounts to what they may be worth.

Being able to buy a business at a good price can give us a good margin of safety, which can give us a better chance of achieving a positive return.

A lot of businesses have seen their share prices rise in the last six months, so I’m going to talk about two other stocks that I normally don’t highlight.

Abacus Storage King (ASX: ASK)

This business is a fully integrated owner and manager of a portfolio of self-storage properties located across Australia and New Zealand.

In the recent FY24 first-half result, the business said self-storage operating conditions remained “robust” despite global inflationary and cost of living pressures. In HY24, revenue per available metre increased by 4.8% to $324 and the occupancy rate was 90.4%.

The ASX share points to a number of helpful structural demand factors for its future such as population growth, the rise of e-commerce and increasing household awareness of self-storage as an option.

The business reported it has net tangible assets (NTA) of $1.52 per security as at December 2023, and the Abacus Storage King share price is at a 19% discount to this. It’s expecting to pay a distribution of 6 cents per security, which is a distribution yield of 4.9%.

Collins Foods Ltd (ASX: CKF)

Collins Foods is the operator of a large number of KFC franchisees in Australia, as well as a growing number of KFCs in Europe. The company is also responsible for Taco Bells in Australia.

As we can see on the chart, the Collins Foods share price is down around 20% from 9 January 2024, making it much cheaper.

In the FY24 first-half result, it revealed its Australian KFC footprint had reached 275 nationally, with management expecting the company to open nine to 12 new restaurants in Australia in FY24. It had 72 outlets as at HY24, with plans for a further three net new locations in the Netherlands in the second half of FY24. The ASX share now has 27 Taco Bells across Australia.

HY24 saw a good improvement from the ASX share’s KFCs and Taco Bells, with revenue up 14.3% to $696.5 million, underlying earnings before interest, tax, depreciation and amortisation (EBITDA) increasing by 16.7% to $109.9 million and underlying net profit after tax (NPAT) up by 28.7% to $31.2 million.

That profit growth was impressive and shows the operating leverage in the business where profit can rise faster than revenue. It’s the profit growth that usually drives the Collins Foods share price and dividend growth higher.

Based on the profit projections on Commsec, Collins Foods is valued at just 13 times FY26’s estimated earnings with a possible grossed-up dividend yield of 5.8%. I may buy some myself when Fool’s trading rules allow, if Collins Foods stays at this valuation.

The post 2 ASX shares that look absurdly cheap to me appeared first on The Motley Fool Australia.

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More reading

• Guess which ASX healthcare stock is rocketing 110% on US product launch
• Guess which ASX 200 gold stock is rocketing 12% on record production
• Why I think these 2 ASX dividend shares are ideal for income investors
• Novonix shares fall despite Lithium Energy merger and IPO plans
• After a tepid March can the Woodside share price reignite in April?

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 Collins Foods. 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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Acrux Ltd (ASX: ACR) shares are avoiding the market weakness and rocketing higher on Wednesday.

In morning trade, the ASX healthcare stock was up as much as 110% to 9.9 cents.

To put that into context, a $10,000 investment yesterday afternoon would have grown to be worth $21,000 in less than a day.

The topical pharmaceuticals products developer’s shares have eased back a touch since then but remain up 70% to 8 cents at the time of writing.

Why is this ASX healthcare stock rocketing?

Investors have been scrambling to buy the company’s shares this morning after it announced the launch of a new product in the United States market.

According to the release, Acrux and its partner TruPharma have launched a generic version of Dapsone 5% Gel.

Dapsone 5% Gel is a prescription medicine which is used on skin (topical) to treat acne vulgaris. Annual market sales for Dapsone 5% Gel products for the 12 months ending October 2023 exceeded US$15 million according to data from IQVIA.

The ASX healthcare stock’s CEO and managing director, Michael Kotsanis, was pleased with the news. He said:

We are excited to partner with TruPharma to launch this topical prescription product in the United States. This is another product from the Acrux pipeline that is being commercialised. We look forward to announcing additional regulatory approvals and launches in the future.

What else is in the pipeline?

As mentioned above, the company is working towards additional regulatory approvals and launches.

This includes its Nitroglycerin 0.4% Ointment, which was accepted for review by the FDA in July 2023. This product treats moderate to severe pain associated with chronic anal fissure and has an annual addressable market of US$21.6 million according to IQVIA.

Another product in the pipeline is a generic version of cold sore treatment Acyclovir Cream, 5%. The reference listed drug for this treatment is Zovirax Cream, 5%, which is marketed by Bausch Health in the United States. The annual addressable market for the product exceeds US$29 million according to IQVIA data.

In total, it currently has three products under review by the FDA and seven products in development. But management isn’t resting on its laurels. A further two topical generic projects have been identified for commencement in 2024 and thereafter two new topical generic projects are intended to be added each year.

Despite today’s impressive gain, the ASX healthcare stock is only up 33% since this time last year.

The post Guess which ASX healthcare stock is rocketing 110% on US product launch appeared first on The Motley Fool Australia.

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More reading

• Guess which ASX 200 gold stock is rocketing 12% on record production
• Why I think these 2 ASX dividend shares are ideal for income investors
• Novonix shares fall despite Lithium Energy merger and IPO plans
• After a tepid March can the Woodside share price reignite in April?
• Where I’d instantly invest $10,000 in ASX shares for passive income

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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An already soaring S&P/ASX 200 Index (ASX: XJO) gold stock is shooting higher again today after reporting record quarterly gold production.

Shares in the ASX 200 gold miner closed yesterday, trading at $1.81. In early morning trade on Wednesday, shares are swapping hands for $2.03 apiece, up 12.2%.

For some context, the ASX 200 is down 0.5% at this same time.

And to better compare golden apples with golden apples, the S&P/ASX All Ordinaries Gold Index (ASX: XGD) – which also contains some smaller miners outside of ASX 200 gold stocks – is up 1.0% amid another uptick in the gold price to US$2,282 per ounce.

With today’s big intraday gain factored in, this sees the gold miner’s shares up a whopping 48.2% since the recent lows on 23 February.

Any guesses?

If you said Ramelius Resources Ltd (ASX: RMS), go to the head of the virtual class.

Here’s what’s spurring ASX investor interest today.

ASX 200 gold stock achieves record production

Investors are bidding up the Ramelius Resources share price today after the miner announced it achieved an all-time high gold production of 86,928 ounces in the March quarter.

This tops the implied gold production guidance Ramelius gave for the quarter of 70,000 to 77,500 ounces. And it handily exceeds the prior record quarterly production of 86,516 ounces of gold, achieved in the June 2020 quarter.

The miner’s Mt Magnet (including Penny) project produced 45,927 ounces of gold over the quarter, while Edna May (including Tampia, Marda & Symes) produced 41,001 ounces.

Ramelius Resources’ current H2 FY2024 production guidance stands at 140,000 ounces to 155,000 ounces at an all-in-sustaining cost (AISC) of AU$1,700 per ounce to AU$1,800 per ounce.

The ASX 200 gold stock is also likely grabbing investor attention today after reporting its balance sheet “strengthened considerably” over the period.

Following record free cash flow of $125.3 million (exceeding the previous record free cash flow of $69.4 million in the June 2020 quarter), Ramelius Resources held net cash and gold of $407.1 million.

The company said that as a result, its AISC for the quarter is expected to be “well below” guidance for H2 FY 2024 of AU$1,700 to AU1,800 per ounce. The miner now expects AISC to fall in the range of AU$1,375 to AU$1,475 per ounce.

The company noted that it would provide additional details in its quarterly report, out later this month. That will include a review of how the March quarter’s outperformance will “positively impact” its full-year FY 2024 gold production and AISC guidance.

The post Guess which ASX 200 gold stock is rocketing 12% on record production appeared first on The Motley Fool Australia.

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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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ASX dividend shares can be a great source of passive income for investors looking for investment cash flow.

Those seeking dividend income will likely prefer businesses that can provide predictable cash flow rather than risky investments with volatile payouts. Ideally, these companies would deliver dividend growth that can offset inflation over time.

Sonic Healthcare Ltd (ASX: SHL)

Sonic provides pathology services in a number of countries. In the first six months of FY24, it made more than $300 million of revenue in Australia, the United States, Germany, Switzerland and the United Kingdom.

In that HY24 report, the ASX healthcare share advised it had maintained its progressive dividend strategy, growing its interim dividend by 2% to 43 cents per share.

Sonic Healthcare has boosted its dividend most years over the past three decades, with just a couple of years in the early 2010s where it maintained the dividend payout.

In FY23, it grew the dividend by 4%. In FY22, it grew the dividend by 9.9%, and in FY21 the dividend was hiked by 7%.

There are a few different reasons I think Sonic can keep increasing its dividend. There’s a good organic revenue growth rate – in HY24, it grew by 6%. Revenue is an important driver of profit. The company continues to make acquisitions, boosting scale and unlocking potential synergies.

The ASX dividend share has invested in new technology that could help with pathology, including artificial intelligence (AI) and microbiome testing.

According to Commsec, Sonic Healthcare is projected to pay a dividend yield of 3.7%, excluding franking credits, in FY25.  

Brickworks Limited (ASX: BKW)

Brickworks is best known for being the largest brickmaker in Australia, with one of its leading brands being Austral Bricks. It has other building product businesses, including Austral Masonry, Bristle Roofing, Southern Cross Cement, Bowral Bricks, Daniel Robertson and Nubrik.

The company also has a presence in North America with its Glen Gery business.

It’s the other two areas of the business that excite me most about Brickworks’ dividend potential. Its property division and investments division are providing the cash flow needed to fund the company’s growing dividend.

Brickworks has increased its interim dividend payout for 10 years in a row. And it’s been 48 years since investors saw a decrease in the full-year dividend.

The ASX dividend share owns a large stake in investment house Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), which provides Brickworks with a growing dividend from its diversified portfolio.

The company also owns a large array of properties, including a 50% stake in an industrial property trust that is steadily building more large-scale warehouses on excess land that Brickworks used to wholly own.

These industrial properties are generating development profits and creating strong rental growth. In the HY24 result, rental income grew by 17%. Brickworks’ 50% share of the net trust income was $25 million.

According to the projection on Commsec, Brickworks could pay a fully-franked dividend yield of 2.4% in FY25 or a grossed-up dividend yield of 3.5%.

The post Why I think these 2 ASX dividend shares are ideal for income investors appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Sonic Healthcare. 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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Novonix Ltd (ASX: NVX) shares are edging lower on Wednesday despite some big news.

In morning trade, the battery materials and technology company’s shares are down 0.5% to 93 cents.

What’s going on with Novonix shares?

Novonix shares are falling today after broad market weakness appeared to offset the release of an announcement.

That announcement reveals that Novonix has signed an agreement with Lithium Energy Ltd (ASX: LEL) to merge their adjoining Queensland Graphite Assets into a spin-out company through an initial public offering (IPO).

The spin-out will be known as Axon Graphite Limited and will be a dedicated ASX-listed vertically-integrated mine to battery anode material (BAM) product manufacturing company.

The release highlights that Novonix’s Mt Dromedary Graphite Project is directly adjoining to Lithium Energy’s Burke Graphite Project, and by merging the two it will create a substantial, world class inventory of high-grade natural graphite.

It also notes that the combination of the two adjoining high grade graphite deposits creates the potential for significant operational synergies and economies of scale.

IPO details

Axon Graphite plans to raise $20 million through the IPO, with a minimum subscription of $15 million and oversubscriptions of up to $5 million at an issue price of $0.20 per share. Eligible Lithium Energy and Novonix shareholders will be entitled to participate in a pro-rata priority offer.

If everything goes to plan, Lithium Energy and Novonix will each hold a 25% cornerstone equity holding in Axon Graphite.

Management commentary

Novonix’s CEO, Dr Chris Burns, believes the merger and IPO will highlight the value of its graphite assets. He said:

The growth opportunity in the electric vehicle and energy storage systems battery markets for anode materials and high-grade graphite products is significant over the next decade. We believe the combination of the Mt Dromedary and Burke assets will enhance the scale and economics of these resources and provide the focus for the development of a substantial natural graphite mine and business.

We believe a stand-alone vehicle provides the opportunity to attract new development capital to enable the development of the resource and production of highly refined grade natural graphite for EVs and ESS. It will also highlight the value of these assets for NOVONIX shareholders.

This sentiment was echoed by Lithium Energy’s executive chair, William Johnson. He adds:

The consolidation of the adjacent high quality Burke and Mr Dromedary graphite deposits will create a world-class inventory of high-grade graphite to support plans to develop an Australian-based, vertically integrated battery anode material (BAM) business. We expect significant operational synergies and economies of scale will be gained from the consolidation of these adjacent graphite deposits.

The prospectus for the Axon Graphite IPO is expected to be lodged within the next 6 to 8 weeks.

The post Novonix shares fall despite Lithium Energy merger and IPO plans appeared first on The Motley Fool Australia.

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

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