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The Woodside Energy Group Ltd (ASX: WDS) share price declined for much of the first half of March before reversing course to climb for most of the second half.

Shares in the S&P/ASX 200 Index (ASX: XJO) energy stock ended February trading for $30.36. When the closing bell sounded on March, shares were swapping hands for $30.50 apiece, up a tepid 0.05% for the month.

Of course, that’s not factoring in Woodside’s 92 cents per share, fully franked dividend.

The stock traded ex-dividend on 7 March. Eligible investors can expect that passive income payout to hit their bank accounts tomorrow, 4 April.

If we add that back into the Woodside share price, the accumulated value of the ASX 200 energy stock gained 3.5% in March.

What happened over the month?

On the energy front, the Woodside share price enjoyed some tailwinds from a fast-rising oil price.

Brent crude kicked off March trading for US$84 per barrel. At the end of the month, that same barrel was trading for US$89, up 6%.

March also saw the company hold a presentation on its Climate Transition Action Plan (CTAP).

CEO Meg O’Neill told investors the CTAP aims to steer Woodside profitably through the global energy transition.

“I firmly believe Woodside is built to thrive through the energy transition,” O’Neill said.

She added, “Our climate strategy is integrated throughout our corporate strategy as we provide the energy our customers need today and into a lower carbon future.”

What’s next for the Woodside share price?

Barring any new significant energy project updates or potential acquisition news, the biggest factors impacting the Woodside share price in the month ahead will be oil and gas prices.

And not just the spot prices. The medium-term outlook for energy prices will also have an influence on ASX 200 investors’ decisions on whether or not to buy Woodside stock.

Despite Brent crude oil prices up 17% in 2024 and running at five-month highs, I believe that the energy bull run has a way to go yet.

Why?

First, we’re almost certainly at the end of the rate-tightening cycle in both Australia and the United States.

The US, the world’s top economy, is the biggest player here. With the Federal Reserve eyeing at least two interest rate cuts this year, that could spur the economy and energy demand.

And that increased demand would come at a time of likely reduced supply, with the Organization of the Petroleum Exporting Countries (OPEC+) and its allies’ production cuts expected to be extended at least through the middle of this year.

Adding to that, we have Ukrainian drones attacking Russian oil refineries atop the escalating conflict in the oil-rich Middle East.

Any supply disruptions on either front could also send energy prices, and the Woodside share price, significantly higher.

The post After a tepid March can the Woodside share price reignite in April? appeared first on The Motley Fool Australia.

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More reading

• Is now the time to invest in these ASX 200 energy shares?
• 3 ASX dividend stocks with good yields to buy now
• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday
• 5 top ASX dividend shares to buy right now

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 shares that can provide investors with attractive passive income are appealing. I’m going to talk about three ideas that I’d buy with $10,000.

Savings accounts can now offer a much better rate of return, but they don’t offer organic growth of the dividend payments or offer capital growth. It’s growth over time that can help offset inflation, which is why I prefer ASX dividend shares over term deposits.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

This company likes to be called Soul Patts – it’s an investment house that owns a variety of listed or unlisted assets. Some of its biggest equity investments include New Hope Corporation Ltd (ASX: NHC), Brickworks Limited (ASX: BKW), TPG Telecom Ltd (ASX: TPG) and Tuas Ltd (ASX: TUA). Some of its unlisted assets include swimming schools, agriculture and credit.

The ASX share has grown its annual ordinary dividend per share every year since 2000, which is a great record of passive income stability, but isn’t guaranteed to continue forever.  

It’s invested in a portfolio of assets that generate appealing, fairly defensive cash flow, which is helping the business pay that dividend consistently. Each year it re-invests excess cash flow (after paying expenses) into more opportunities.

Using the last two declared dividends, it has a grossed-up dividend yield of 3.8%.

Rural Funds Group (ASX: RFF)

This is a real estate investment trust (REIT) that owns a portfolio of farmland across different food types including almonds, macadamias, cattle, vineyards and cropping.

Commercial property can provide a useful mix of good distribution yield and hopefully long-term capital growth.

Farmland can provide investors with good passive income thanks to solid rental profits. Rural Funds is benefiting from ongoing rental income growth, with some farms having fixed annual increases and some linked to inflation, plus market reviews.

It’s investing a lot in its farms, including changing some farms to macadamias, to improve its rental potential.

Its objective is to grow its distribution payout by 4% each year, though it hasn’t achieved that recently amid its investing and higher interest rates.

Rural Funds is expecting to pay a distribution that equates to a yield of 5.6% for FY24. It’s currently trading at a large discount to its stated net asset value (NAV) – I think it could be undervalued with potential interest rate cuts on the horizon.

Metcash Ltd (ASX: MTS)

Metcash is a large wholesaler and hardware business.

It supplies a number of large food and liquor businesses including IGA, Foodland, Cellarbrations, The Bottle-O, IGA Liquor, Porters Liquor, Thirsty Camel, Big Bargain Bottleshop and Duncans.

Metcash also has a number of hardware businesses including Mitre, Home Timber & Hardware and Total Tools. It also supports independent operators under the small format convenience banners Thrifty-Link Hardware and True Value Hardware, as well as a number of unbannered independent operators.

It also recently announced it’s buying a foodservice distribution business called Superior Food. Metcash is also buying Bianco Construction Supplies (which it operates in South Australia and Northern Territory) and Alpine Truss (a large frame and truss operator).

The company aims to pay a dividend payout ratio of 70% of underlying net profit after tax (NPAT). It’s expected to pay a grossed-up passive income yield of 7.3% in FY24, according to Commsec.

The post Where I’d instantly invest $10,000 in ASX shares for passive income appeared first on The Motley Fool Australia.

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More reading

• 1 ASX dividend stock down over 34% to buy right now
• 2 of my top ASX 200 shares to consider buying before April
• Why I bought this ASX 200 stock instead of Woolworths
• 3 ASX 300 dividend shares to buy in April
• Why is the Rural Funds share dropping today?

Motley Fool contributor Tristan Harrison has positions in Brickworks, Metcash, Rural Funds Group, 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, Rural Funds Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Metcash. 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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Owners of CSL Ltd (ASX: CSL) shares can feel a bit richer today because a dividend is on its way.

It was recently ASX reporting season and CSL was one of the companies to release its FY24 half-year report.

In that result, we learned that revenue increased by 11% to US$8.05 billion in constant exchange rate terms.

Companies pay their dividends from the net profit after tax (NPAT) they generate. CSL reported that its statutory NPAT rose 17% to $1.9 billion, underlying net profit (NPATA) rose by 11% to $2.02 billion and NPATA earnings per share (EPS) increased by 11% to $4.18.

With that double-digit profit growth, CSL’s board felt confident enough to deliver a pleasing increase to the interim dividend.

CSL dividend

The ASX healthcare share decided to declare an interim dividend per share of US$1.19. When converted into Australian dollars, the CSL half-year dividend is going to be AU$1.799 per share.

This dividend is entirely unfranked, so there are no franking credits attached to the dividend.

At the current CSL share price, that payment translates into a dividend yield of around 0.6%.

Of course, we shouldn’t think about the dividend yield as just one payment – shareholders usually receive two dividends over the course of 12 months.

According to the forecast on Commsec, owners of CSL shares are predicted to receive an annual dividend of $4 per share, which translates into a dividend yield of 1.4%.

That’s not exactly a huge yield, but it’s small partly because the dividend payout ratio is only expected to be 42.7% – that means the ASX healthcare share is forecast to retain a majority of its net profit generated.

The company has a history of investing billions of dollars into research and development to create the next vaccines and treatments.

Profit guidance

CSL is expecting its underlying profit (the NPATA) to be in the range of US$2.9 billion to US$3 billion in current exchange rate terms. That profit would represent year over year growth of between 13% to 17% compared to FY23.

Management said CSL is in a “strong position to deliver annualised double-digit earnings growth over the medium-term.”

The company also said the strong growth of its immunoglobulins franchise is “expected to continue as patient demand remains strong”. CSL also has a number of initiatives underway in plasma collections that are “improving efficiencies and processing times, supporting continued expansion in CSL Behring’s gross margin“.

CSL share price snapshot

Over the last six months, CSL shares have risen around 15%.

The post Own CSL shares? You’re receiving a healthy dividend boost today! appeared first on The Motley Fool Australia.

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More reading

• Got $5,000? 5 ASX shares to buy for lasting wealth
• 5 things to watch on the ASX 200 on Wednesday
• CSL share price lower despite US FDA boost
• Buy these fantastic blue chip ASX 200 shares in April
• Here are the top five ASX 200 shares in Macquarie’s model growth portfolio

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 CSL. The Motley Fool Australia has recommended CSL. 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 wanting some exposure to the uranium industry, then read on!

That’s because analysts at Bell Potter are tipping strong returns from the ASX 200 uranium stock listed below.

Which ASX 200 uranium stock is a buy?

The company in question is uranium miner Paladin Energy Ltd (ASX: PDN).

As a reminder, on Tuesday, the ASX 200 uranium stock released an update on its Langer Heinrich Mine (LHM) in central western Namibia.

Paladin Energy advised that both uranium concentrate production and drumming were achieved at LHM on 30 March 2024. This is a big positive as it means that Paladin Energy will now be able to capitalise on the sky high prices that uranium is commanding.

This has caught the eye of analysts at Bell Potter. In response to the news, the broker has changed its rating from speculative buy to just buy and increased its price target to $1.65.

Based on its current share price of $1.44, this implies potential upside of almost 15% for investors over the next 12 months.

Commenting on the news, Bell Potter said:

PDN announced it had produced the first drums of uranium concentrate (U3O8) from its uranium restart operation, Langer Heinrich Mine (LHM), in-line with its March quarter guidance. The announcement marks an important milestone in returning LHM to production and the first step towards targeting a 6Mlb pa run-rate. PDN will build inventory for approximately 3-months we estimate, putting them in a position to begin shipments at the end of 4QFY24 or beginning 1QFY25.

No longer a speculative buy

As I mentioned above, Bell Potter has now removed its speculative tag from its recommendation. It explains:

Our target price for PDN lifts slightly to $1.65/sh (previously $1.60/sh) on the restart of production. With a line-of sight to first revenue and cashflow we have removed the speculative rating and maintain our Buy recommendation.

Its analysts have then laid out three key reasons why it thinks that Paladin Energy is an ASX 200 uranium stock to buy right now. It concludes:

We reiterate our investment thesis on PDN being 1) LHM is a proven asset in a known uranium mining jurisdiction with a comparatively low restart risk, 2) At full capacity LHM will be a top ten producer supplying 6Mlbs pa by FY26 (BPe), and 3) uranium market fundamentals remain robust, with ~140Mlbs in global long-term offtake contracted over CY23 (124Mlbs CY22), adding to a tight short and mid-term market and continual growth in reactor adoption increasing demand over the long term.

Paladin Energy’s shares are up 120% since this time last year.

The post Why now is the time to buy to buy this ASX 200 uranium stock appeared first on The Motley Fool Australia.

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More reading

• How much would I have now if I’d invested $10,000 in Betashares Global Uranium ETF (URNM) a year ago?
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today
• Why Austal, Mesoblast, Novonix, and Paladin Energy shares are racing higher
• Paladin Energy share price storms higher on big uranium production news

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 Vanguard US Total Market Shares Index ETF (ASX: VTS) is one of the most popular ASX-listed exchange-traded funds (ETFs). It has also been one of the very good performers over the last decade.

For readers who haven’t heard of this fund before, it’s an ETF that enables investors to get access to most of the market capitalisation of the US stock market.

Past performance is definitely not a guarantee of future performance. But, for the below three reasons, I think it still has a very good future.

Strong businesses

A lot of the performance of the US share market is driven by the biggest companies.

Its top holdings are really impressive companies, including Microsoft, Apple, Alphabet, Nvidia, Amazon.com, Meta Platforms, Berkshire Hathaway and Eli Lilly.

In my eyes, great businesses keep winning over the long term, particularly if they have a strong offering and a great economic moat. I think it would be almost impossible for a new competitor to challenge those US giants – they are in a very strong market position.

Vanguard has revealed a number of impressive metrics about its portfolio. It has a return on equity (ROE) of 24%, while the trailing earnings growth rate was 15.6%.

Diversification

The VTS ETF can provide excellent diversification for portfolios.

It has a large number of holdings – at the end of January 2024, it had 3,747 positions in the portfolio. That’s a huge amount of diversification and is very good for reducing the risk of any individual company.

Another form of diversification is the allocation between sectors. It has the most allocated to the most attractive industry which is generating a lot of growth, but all of the eggs aren’t in one basket.

At the end of January 2024, these were the sector weightings in the VTS ETF:

Technology – 31.9%

Consumer discretionary – 14%

Industrials – 12.9%

Healthcare – 12.2%

Financials – 10.9%

Consumer staples – 4.7%

Energy – 4%

Real estate – 2.9%

Utilities – 2.5%

Telecommunications – 2.1%

Basic materials – 1.9%

Very low management fees

One of the best things about the Vanguard US Total Market Shares Index ETF is its very low annual management costs.

The lower the fees, the more of the money that stays in the hands of the investor, so it helps the net returns.

The VTS ETF has an annual cost of 0.03%, which is one of the lowest on the ASX.

Foolish takeaway

The Vanguard US Total Market Shares Index ETF had returned an average of around 15% per annum. We can’t expect that level of return to occur in the short-term or the long-term, but the quality of the underlying businesses is good enough that could enable it to continue to beat the S&P/ASX 200 Index (ASX: XJO), even from the high current valuation.  

The post 3 reasons the Vanguard US Total Market Shares Index ETF (VTS) is still a top buy appeared first on The Motley Fool Australia.

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More reading

• Which ASX ETFs give Aussie investors access to US stocks?
• Buy and hold these ASX ETFs until 2034
• 12 ASX ETFs breaking the mould to hit 52-week highs today
• 4 top ASX exchange-traded funds smashing record highs on Wednesday

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. 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 Alphabet, Amazon, Apple, Berkshire Hathaway, Meta Platforms, Microsoft, and Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Alphabet, Amazon, Apple, Berkshire Hathaway, Meta Platforms, and Nvidia. 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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From time to time, Aussie companies will decide to try their luck at opening their doors in new markets. Analysts at Sydney-based Wilsons Advisory think an ASX All Ords stock could be eyeing the United Kingdom for expansion.

Hot on the heels of a successful local acquisition, Australia’s prominent furniture retailer Nick Scali Limited (ASX: NCK) may soon look further afield for its next bolt-on business, according to Wilsons’ equity research analyst Tom Camilleri.

Nick Scali shares have rallied 62% in the last year, but could a new growth avenue pave the way to greater heights?

A bigger market beckons

Done well, acquisitions can help a company grow beyond what is possible organically. That might mean breaking into a country like the UK, which touts a population of 67 million compared to Australia’s 26 million — two and a half times the size.

Speaking with The Australian, Camilleri described the UK sofa market with three key points:

• Fragmented market with similar consumer tastes
• 19.1% less sofa spend than Australian consumers per capita; and
• Greater online penetration of 20.5% versus 13.7% in Australia

Adding further clarity, Camilleri elaborated on the benefit of branching into the UK, stating:

We believe these market nuances do not act as a barrier for Nick Scali, and can present opportunities to bring strategies back to Australia and New Zealand (with digital platforms being an example).

Wilsons’ research into the UK sofa/furniture market postulates that a weakened economy could also paint a near-term risk of insolvencies. This might create an opportunity for this ASX All Ords stock to scoop up a UK furniture business at a discount.

This brings us to the next question… what can Nick Scali afford to acquire? As of 31 December 2023, the company carried $68.3 million in cash and $71.7 million in debt.

The company’s debt-to-equity ratio reached 72% in 2021. All else being equal, Nick Scali could tap another $74.6 million worth of debt, assuming lenders are comfortable with a similarly leveraged balance sheet today.

The risk for this ASX All Ords stock

Australian corporations and international expansions have a checkered past. Who can forget Wesfarmers Ltd‘s (ASX: WES) push to take Bunnings to the UK? A move that ended in retreat and a pricey $1 billion write-down.

Acquisitions can also be fraught with danger. Overpaying for the acquired assets, hidden legal problems, poorly executed strategies, cultural differences — the list goes on. Yet, the team at global consultancy McKinsey challenges this default belief.

As shown above, McKinsey research indicates ASX 100 companies that experienced the largest increases in international revenue also provided the greatest shareholder returns. However, according to McKinsey, this is predicated on having the right business model.

Looking at DFS Furniture (a listed UK furniture retailer), some differences appear. Most notably, DFS generated A$2.03 billion in revenue for the 12 months ended December 2023 with only 174 stores. Meanwhile, Nick Scali operates through 108 stores and raked in $450 million, equating to:

• $11.67 million per store for DFS
• $4.17 million per store for Nick Scali

I am concerned this suggests Nick Scali is behind the ball in online sales compared to UK competitors. For this reason, I’d hold off on buying this ASX All Ords stock if it were to make a sudden UK push.

The post Would I buy this ASX All Ords stock if it flies the nest for the UK? appeared first on The Motley Fool Australia.

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More reading

• 7 ASX small-cap shares that are cheaper than the ASX 200 in March 2024
• 3 great ASX shares I want to buy in the next bear market
• Fund manager rates these 2 undervalued ASX All Ords shares as buys
• I think they can! 3 ASX shares that can keep chugging higher
• 2 ASX companies with the firepower to raise their dividends

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 positions in and has recommended Wesfarmers. The Motley Fool Australia has positions in and has recommended Wesfarmers. The Motley Fool Australia has recommended Nick Scali. 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 Betashares Global Uranium ETF (ASX: URNM) has been a great place to invest over the last 12 months.

Thanks to supply concerns and growing demand, the price of the chemical element has been surging. This has put a rocket under uranium stocks across the globe.

This includes companies held by the URNM ETF such as Boss Energy Ltd (ASX: BOE), Cameco Corp (NYSE: CCJ), NexGen Energy Ltd (NYSE: NXE), and Paladin Energy Ltd (ASX: PDN).

Supply concerns as demand grows

Last year, traders were bidding uranium prices higher and higher after the world’s largest uranium miner, Kazatomprom, warned that it would fall short of its production targets.

This was being driven by shortages of sulphuric acid, which is a key ingredient in the production process for some uranium mills.

This couldn’t have come at a worse time, with demand for uranium growing rapidly due to global governments seeing nuclear energy as a way to achieve key decarbonisation goals.

But it gets even better for the companies included in the Betashares Global Uranium ETF. In light of the above, SP Angel mining analyst John Meyer, believes that uranium prices could be on a very long upwards trajectory. According to Reuters, he said:

The market has been slowly building higher prices as mining costs rise and nuclear generators look to build stocks to guard against increasingly risky supply-side issues. We see prices rising year-on-year for next 10-20 years or till the world finds another source for large scale un-interruptible base load power with a low carbon footprint.

The World Nuclear Association was forecasting demand from nuclear reactors to be 65,650 tonnes of elemental uranium (tU) in 2023 and then almost double to 130,000 tU by 2040.

Investing $10,000 in the Betashares Global Uranium ETF URNM

If I had invested in the Betashares Global Uranium ETF a year ago, I would be smiling widely today.

During this time, the fund has absolutely smashed the market with a return many times the average for the period.

For example, if I had invested $10,000 into the URNM ETF in April 2023, I could have picked it up for $5.63 per unit. This means I could have snapped up 1,777 units for a total investment of $10,004.51.

Today, the Betashares Global Uranium ETF is fetching $9.81. This is 74.2% higher than the price I would have paid a year ago.

So, my 1,777 units would now have a market value of $17,432.37. That’s a sizeable $7,427.86 more than my original investment in the URNM ETF after just 12 months. Impressive!

The post How much would I have now if I’d invested $10,000 in Betashares Global Uranium ETF (URNM) a year ago? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today
• Why Austal, Mesoblast, Novonix, and Paladin Energy shares are racing higher
• Paladin Energy share price storms higher on big uranium production news
• Uranium is set to boom, and this is the ‘premium’ ASX stock to buy

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 recommended Cameco. The Motley Fool Australia has recommended Betashares Global Uranium 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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S&P/ASX 200 Index (ASX: XJO) energy shares could be set to regain some sizzle in 2024.

Having seen their share prices and dividend payouts surge in 2022 and into 2023 on the back of oil prices north of US$140 per barrel, the big energy stocks came under increasing pressure as oil tumbled below US$75 per barrel by June 2023.

2024 has been a decidedly different story, with the oil price trending steadily higher.

On 2 January, international benchmark Brent crude oil was trading for US$76 per barrel.

At market close yesterday, that same barrel was worth US$87.84.

That’s up 15.6% year to date, and the highest level in five months.

Interestingly, only one of the big three ASX 200 energy shares focused on oil and gas has enjoyed a big share price lift so far from the oil price rebound.

Namely Beach Energy Ltd (ASX: BPT), whose shares are up by around 14% so far in 2024. Beach also trades on a fully franked dividend yield of 2.1%.

Santos Ltd (ASX: STO) shares have gained a much more modest 2% year to date. Santos shares trade on a fully franked dividend yield of 3.6%.

And Woodside Energy Group Ltd (ASX: WDS) shares have lost ground in 2024, down 3% despite the big lift in oil prices. Woodside shares trade on a fully franked dividend yield of 7.1%.

For some context, the ASX 200 is up a bit more than 3% this year.

Now, here’s why I think the rest of 2024 could see these ASX 200 energy shares playing some catchup.

Why now could be an opportune time to buy ASX 200 energy shares

While ASX 200 energy shares should enjoy higher revenues and higher profits amid higher oil and gas prices, energy markets are notoriously fickle.

And I believe many investors have been hesitant to pull the trigger and get back into the sector after the big retrace in 2023.

However, I think the rally we’re seeing in global oil prices this year has some legs. Meaning I expect Brent crude won’t dip too far below current levels and could well march above US$90 per barrel.

On the demand side, global oil demand is forecast to grow modestly this calendar year. While that may not be great news for the world’s carbon reduction aims, it should help support the oil price and ASX 200 energy shares.

On the supply side, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) announced in early March that it would extend its production cuts, at least through to the end of June. And those cuts are more than offsetting near-record production in the United States and several other non-OPEC nations.

OPEC+ will make its next production announcement overnight tonight, with most analysts expecting the cartel to stick to its current reduced levels.

According to Bloomberg, that move will lead to an oil deficit through the end of 2024.

Commenting on the outlook, Warren Patterson, head of commodities strategy for ING Groep said (quoted by Bloomberg):

An escalation in tension in the Middle East has coincided with firmer oil fundamentals. The market is tightening thanks to OPEC+ supply cuts, which is evident with the strength we have seen in timespreads.

Patterson mentions another potentially strong tailwind for ASX 200 energy shares. Though not one we hope to see come to fruition.

Should the ongoing conflicts in the oil-rich Middle East erupt into a broader war, Brent crude could easily sail past US$100 per barrel amid global supply disruptions.

The post Is now the time to invest in these ASX 200 energy shares? appeared first on The Motley Fool Australia.

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More reading

• 3 ASX dividend stocks with good yields to buy now
• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday
• 5 top ASX dividend shares to buy right now
• Why is the Beach Energy share price racing higher on Thursday?

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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Woolworths Group Ltd (ASX: WOW) stock has fallen significantly over the past year, as we can see on the chart below. Between 21 June 2023 and 1 April 2024, the Woolworths share price has dropped over 17%.

Woolworths is best known for its supermarkets in Australia and New Zealand (called Countdown). I’m sure most readers already knew it was a supermarket business, so I’m going to talk about three elements of the ASX share that investors should know.

Growing profit margins

When it comes to profit margins, ideally we’ll see a quality growing business deliver increasing economies of scale benefits over time.

The supermarket business’ Australian food division has indeed been achieving stronger profit margins. In the FY24 first-half result, Australian food sales increased 5.4% to $25.9 billion, earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 9.2% to $2.5 billion and earnings before interest and tax (EBIT) grew by 9.9% to $1.57 billion.

However, Woolworths’ profit margins have come under scrutiny in recent months, so its margins may not remain this strong if the ASX share decides to help customers.  

Online growth and Everyday Rewards

WooliesX represents the online operations of Woolworths. In the HY24 result, WooliesX total sales increased by 27.5% as it provided more convenient options with ‘direct to boot’ and ‘same day’ propositions.

Improvement in fulfilment capabilities led to business to consumer same day fulfilment mix reaching 43% in the second quarter of FY24, with 85% of orders fulfilled within 24 hours of order placement.

Over time, I think more Aussies are going to do more of their food shopping (and other retail shopping) online. E-commerce sales represented 12.2% of total sales in HY24, compared to 10.8% in HY23. Online sales could have a growing impact on Woolworths stock as time goes on.

Its food and everyday digital platforms saw average weekly traffic of 19.5 million in the second quarter of FY24, 17.5 million in the FY24 first quarter, 16.3 million in the FY23 fourth quarter and 15.7 million in the FY23 third quarter.

One of the most important initiatives for retail businesses these days seems to be the loyalty program. Woolworths’ loyalty program is called Everyday Rewards, which can be useful for building customer loyalty and providing benefits.

At the end of Woolworths’ HY24, it had 9.4 million members, which was a rise of 4.4% over the six month period.

The tag rate of sales attributed to Everyday Rewards continues to grow – it was 71.3% in the FY24 second quarter, 70% in the FY24 first quarter, 69.2% in the FY23 fourth quarter and 68.8% in the FY23 third quarter.

Diversified earnings

The business makes a large majority of its sales from supermarkets in Australia, but it has a number of other segments that are providing contributions.

Obviously, there’s the New Zealand supermarkets, but it also has a business-to-business food distribution segment, the large retailer BIG W and various retail platforms.

The ASX share also recently announced it was acquiring a majority stake in the business that owns PETstock.

Foolish takeaway

According to the estimates on Commsec, the Woolworths stock price is valued at 23x FY24’s estimated earnings.

The post 3 things about Woolworths stock every smart investor knows appeared first on The Motley Fool Australia.

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More reading

• Are Woolworths shares a buy or a sell at under $33?
• Buy these fantastic blue chip ASX 200 shares in April
• Where to invest $8,000 in April 2024
• Top brokers name 3 ASX shares to buy next week
• Top ASX shares to buy instead of a term deposit in March 2024

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 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 want to grow your wealth, then buy and hold investing with ASX shares could be the way to do it.

That’s because the longer you hold onto ASX shares, the more you benefit from the power of compounding.

For example, if you were to invest $5,000 per year into ASX shares and generated a 10% per annum return, your portfolio would grow to be worth over $900,000 in 30 years.

But which ASX shares could be great options for that first $5,000 investment? Let’s take a look at five ASX shares that could generate lasting wealth.

5 ASX shares to buy for lasting wealth

Firstly, when picking ASX shares to buy and hold for the long term, you’ll want to focus on quality and the sustainability of competitive advantages.

Companies like CSL Ltd (ASX: CSL) and ResMed Inc. (ASX: RMD) in the healthcare sector immediately spring to mind. Both companies are leaders in their field and have very bright long term growth outlooks.

The team at Morgans is very positive on both companies. It has an add rating and $315.40 price target on CSL’s shares and an add rating and $32.82 price target on ResMed’s shares.

A couple more ASX shares that could be destined to generate lasting wealth for their shareholders are in the tech sector. They are rapidly growing location technology company Life360 Inc (ASX: 360) and cloud accounting platform provider Xero Ltd (ASX: XRO).

Goldman Sachs is a big fan of both companies and has a buy rating and $14.20 price target on Life360 shares and a buy rating and $152.00 price target on Xero’s shares.

A fifth and final ASX share for investors to consider as a buy and hold investment is Lovisa Holdings Ltd (ASX: LOV). It is a fashion jewellery retailer with a fast-growing global store network.

Morgans has been very impressed with the company’s growth in recent years and believes this positive form can continue. In fact, last year, the broker spoke very positively about its long-term growth outlook. It said:

“LOV continues to impress us with the rate at which it opens new stores and expands into new markets. As we have said before, LOV may just prove to be one of the biggest success stories in Australian retail. LOV is showing every sign of becoming a global brand.”

In light of the above, the broker recently put an add rating and $35.00 price target on the ASX share.

The post Got $5,000? 5 ASX shares to buy for lasting wealth appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Wednesday
• Why Cettire, Harvey Norman, Orora, and ResMed shares are sinking today
• How ASX shares vs. property performed in March
• CSL share price lower despite US FDA boost
• Top ASX shares to buy in April 2024

Motley Fool contributor James Mickleboro has positions in CSL, Life360, Lovisa, ResMed, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, Goldman Sachs Group, Life360, Lovisa, ResMed, and Xero. The Motley Fool Australia has positions in and has recommended ResMed and Xero. The Motley Fool Australia has recommended CSL and Lovisa. 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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