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Just because you’re investing in ASX dividend shares doesn’t mean that you want to lose capital.

Sure, your priority might be the income, but if the share price tanks then it cancels out all the sweet dividends. Or worse.

So here are two S&P/ASX 200 Index (ASX: XJO) shares that Catapult Wealth portfolio manager Tim Haselum would buy for a balance of dividends and capital growth:

Huge yield with reliable tenants

Charter Hall Long WALE REIT (ASX: CLW) is currently paying out a juicy dividend yield of 6.58%.

And with the share price down 0.9% year to date, now is the time to buy.

“The trust was recently trading at a discount to net tangible assets,” Haselum told The Bull.

“We believe the price offers an attractive entry point, and distribution yields also appeal.”

He added that the real estate the Charter Hall holds in this trust is exceptionally reliable.

“This trust invests in quality real estate assets that are mostly leased to corporate and government tenants,” said Haselum.

“It enjoys an occupancy rate of 99%. A portfolio weighted average lease expiry of 11.8 years provides long term income security.”

The Charter Hall Long WALE REIT is somewhat divisive among the professional community.

According to CMC Markets, five out of 10 analysts currently rate the stock as a hold, while two reckon it’s a buy, and three urge a sell.

A minor hiccup that’s presented a buying window

At just over 2%, the dividend yield from waste processor Cleanaway Waste Management Ltd (ASX: CWY) isn’t massive.

And to add that, the latest results weren’t super flattering.

“A statutory net profit after tax of $49 million in the first half of fiscal year 2023 was down 6.7% on the prior corresponding period,” said Haselum.

“The fall largely reflected increasing costs following a fire at its Victorian mill. Acquisition and integration costs also contributed.”

The lacklustre performance is reflected in the share price, which has fallen almost 5% year to date.

Haselum, though, reckons the troubles are temporary.

“We believe cost issues will subside and expect the company’s earnings to be boosted from acquisitions,” he said.

“In our view, the company offers an attractive entry point.”

It seems many of Haselum’s peers agree. CMC Markets shows seven out of 13 analysts currently rate Cleanaway shares as a buy.

The post ‘Attractive entry point’: 2 ASX 200 dividend shares to pounce on right now appeared first on The Motley Fool Australia.

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More reading

• Passive income alert! Experts say buy these ASX dividend shares with big and growing yields
• Buy Woolworths and this ASX share for your retirement portfolio: experts
• Want passive income? Forget term deposits and buy these high yield ASX dividend shares: brokers
• Are these ASX All Ords shares ready to buy at fundamentally fire sale prices?
• Need passive income? Turn $5,000 into $25 every month with these ASX shares

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

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If you’re wanting a source of passive income, then you’re not alone! The good news is that it is possible to achieve this with ASX dividend stocks.

However, there’s a fair bit to consider before buying any old stock. Investors might want to look for one that offers an attractive yield and has room to grow.

One ASX dividend stock that might tick a lot of boxes here is Accent Group Ltd (ASX: AX1).

Why is Accent an ASX dividend stock to consider?

Accent could be a solid choice for passive income seekers if you’re looking for long-term growth. This is because the footwear and athleisure focused retailer owns a growing stable of hugely popular retail brands that have significant expansion potential.

Chances are, one of the company’s growth drivers of the future won’t even exist today. Accent regularly tests the water with new concepts. If they are successful, it will then run with them and take them nationally. There’s also the potential for an overseas expansion in time for certain existing brands.

It’s no wonder then that a host of brokers are bullish on the company and have the equivalent of buy ratings on this ASX dividend stock.

One of those is Bell Potter, which has a buy rating and $2.80 price target on its shares. This compares to the latest Accent share price of $2.54.

But what about the passive income?

Bell Potter is expecting Accent to pay fully franked dividends of approximately 16 cents per share in FY 2023 and then 12 cents per share in FY 2024. This represents dividend yields of 6.3% and 4.7%, respectively.

But what about the future, I hear you ask. Well, over the last 10 years, Accent has generated an average total return of 18% per annum.

If we are conservative and presume that the total returns slow to 9% per annum (not a guarantee) for the next 10 years (and its dividend grows in line with this using FY24 as a baseline), investors would be looking at a fully franked dividend of 28.4 cents per share in FY 2034. This represents a sizeable 11.1% yield based on today’s price.

If this forecast proves accurate, owning 16,900 shares of this ASX dividend stock would provide you with $4,800 of passive income that year. If you then divide this up and distribute the funds monthly, you would have your $400 of monthly passive income.

At today’s share price, you would need to make an investment of approximately $43,000 into Accent shares in order to have the required amount.

And while that is a large number, it certainly could prove to be worth it. If you were to reinvest your dividends until 2034 and this ASX dividend stock generates a 9% per annum return, the value of your investment would have more than doubled to approximately $110,000.

So, there you are. In 2034 you could have an investment worth $110,000 that provides you with $400 of passive income each month. Not bad!

The post Buy 16,900 shares in this top ASX dividend stock for $400 per month in passive income appeared first on The Motley Fool Australia.

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More reading

• These ASX dividend shares have big yields
• Get a passive income boost from these ASX dividend shares: analysts
• The Accent share price has soared 100% in 6 months. Is it still a buy?
• Leading brokers name 3 ASX shares to buy today
• Invest in this 6% yielding ASX 300 dividend stock 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 recommended Accent 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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If you’re looking for a passive income boost, then you may want to check out the ASX dividend stocks listed below.

Brokers have tipped these stocks to offer investors big dividend yields this year and next. Here’s what you need to know about them:

Healthco Healthcare and Wellness REIT (ASX: HCW)

The first ASX dividend stock to consider is the Healthco Healthcare and Wellness REIT.

As you might have guessed from its name, it is a health and wellness focused real estate investment trust. It invests in properties such as hospitals, aged care, childcare, government, life sciences and research, and primary care and wellness properties.

The team at Morgans is positive on the company and is expecting some attractive dividend yields from its shares in the near term.

The broker is forecasting dividends per share of 7.5 cents in FY 2023 and then 7.8 cents FY 2024. Based on the current Healthco Healthcare and Wellness REIT unit price of $1.35, this will mean yields of 5.55% and 5.8% for investors.

Morgans also sees plenty of upside for its shares. It currently has an add rating and $2.06 price target on them.

Universal Store Holdings Ltd (ASX: UNI)

This youth fashion retailer could also be an ASX dividend stock to buy. That’s the view of analysts at Goldman Sachs, which are particularly positive on the investment opportunity here.

The broker is bullish due to Universal Store’s expansion opportunities and exposure to younger consumers, which it expects to continue spending largely as normal in the current environment. This is because a “high proportion [of its customer base] live at home” and stand to benefit from “high and increasing minimum wage entitlements.”

As for dividends, the broker is forecasting fully franked dividends of 24 cents in FY 2023 and 31 cents in FY 2024. Based on the latest Universal Store share price of $4.70, this equates to yields of 5.75% and 7.2%, respectively.

This morning, Goldman Sachs reiterated its buy rating with a $7.45 price target. This implies material upside for its shares.

The post Expect big yields from these buy-rated ASX dividend stocks: brokers appeared first on The Motley Fool Australia.

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More reading

• Top ASX shares to buy in May 2023
• Buy these ASX shares with big dividend yields: brokers
• How I’d invest $20k in ASX stocks today to target serious wealth
• Want passive income? Forget term deposits and buy these high yield ASX dividend shares: brokers
• 2 ASX stocks with a dividend bump coming

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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On Monday, the S&P/ASX 200 Index (ASX: XJO) started the week with a decent gain. The benchmark index rose 0.35% to 7,334.6 points.

Will the market be able build on this on Tuesday? Here are five things to watch:

ASX 200 expected to edge higher

The Australian share market looks set for a subdued session after a mixed start to the week on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 8 points or 0.1% higher. In the United States, the Dow Jones was down 0.15%, the S&P 500 edged 0.05% lower, and the NASDAQ fell 0.1%.

Oil prices drop

Energy shares Beach Energy Ltd (ASX: BPT) and Karoon Energy Ltd (ASX: KAR) could have tough session after oil prices tumbled overnight. According to Bloomberg, the WTI crude oil price is down 1.4% to US$75.69 a barrel and the Brent crude oil price is down 1.2% to US$79.34 a barrel. Oil prices tumbled on global economic growth concerns.

RBA meeting

The Reserve Bank of Australia is meeting again this afternoon to decide on the cash rate. The good news for borrowers is that the market is pricing in a zero probability of a rate increase at this meeting based on current cash rate futures. Though, should one come, expect a volatile afternoon of trade on the ASX 200 index.

Gold price falls

It could be a poor day for gold miners Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) after the gold price dropped overnight. According to CNBC, the spot gold price is down 0.5% to US$1,988.9 an ounce. A stronger US dollar put pressure on the precious metal.

Graincorp shares upgraded to buy

The Graincorp Ltd (ASX: GNC) share price could have plenty of upside according to analysts at Bell Potter. This morning, the broker has upgraded the grain exporter’s shares to a buy rating with an $8.00 price target. It commented: “El Niño events can undermine near term earnings (i.e. FY24e), however, we see the current share price as beginning to reflect value on a through the cycle basis.”

The post 5 things to watch on the ASX 200 on Tuesday appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Monday
• Why Scott Phillips is begging you to buy ASX shares right now!
• How did the AMP share price manage to surge 8% in April?
• Why did the BHP share price dive 6% in April?
• Why did the NAB share price smash the ASX 200 in April?

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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Insurance Australia Group Ltd (ASX: IAG) shares were strong performers in April.

During the month, the insurance giant’s shares rose a sizeable 6.6%.

This means that IAG shares are now up over 10% since this time last year, which compares favourably to the 0.2% decline recorded by the ASX 200 index over the same period.

Why did IAG shares have a strong month?

Interestingly, IAG shares smashed the market last month despite there being no news out of the company.

However, it is worth noting that IAG wasn’t the only insurance share rising. It seems that investors were piling into the industry on the belief that higher interest rates will support strong earnings in the near term.

For example, QBE Insurance Group Ltd (ASX: QBE) shares were also on form and rose 6% in April.

Can IAG keep rising?

Brokers appear somewhat unsure on where IAG shares are heading from here.

Citi and Macquarie see scope for IAG to keep rising. They both have the equivalent of buy ratings and $5.50 and $5.60 price targets, respectively, on its shares. This suggests that they could rise by ~10% from current levels.

Citi believes “the story of building top line momentum and expanding margins is intact.”

Over at UBS, its analysts are far less positive. Last month, the broker retained its sell rating and $4.30 price target on the company’s shares. This implies potential downside of approximately 14% for investors.

The broker believes that recent stormy weather will push claims up and weigh on its earnings. In addition, the broker believes IAG shares are expensive at the current level.

Time will tell which broker makes the right call on this insurance giant.

The post Why were IAG shares such a good investment in April? appeared first on The Motley Fool Australia.

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More reading

• Are dark clouds gathering over the IAG share price?
• Did you buy $4,000 of IAG shares 5 years ago? Here’s how much passive income you’ve earned
• Why the IAG share price outperformed the ASX 200 in March
• Is IAG stock a good defensive ASX 200 buy right now?

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 Coles Group Ltd (ASX: COL) share price ended last week in a disappointing fashion.

In response to the supermarket giant’s quarterly update, the company’s shares fell 1.5% on Friday to end the week at $18.20.

Where next for the Coles share price?

Opinion is divided on where the Coles share price is heading following the company’s update.

For example, the team at Goldman Sachs was reasonably pleased with Coles performance. However, not enough to become more positive on its shares due to the higher than normal multiples they trade on. The broker has reiterated its sell rating and $15.80 price target on Coles shares. It commented:

COL reported 3Q23 sales largely in-line with total continuing group sales of A$9.4B, comprised of A$8.6B supermarket (+1.4% vs GSe) and Liquor A$801mn (+0.4% vs GSe).

Our valuation and TP remains unchanged at A$15.80/sh, implying -11% TSR. COL is trading at 12mth fwd P/E of 24x vs TP implied ~21x. Our 24/25e NPAT remains 9%/8% below consensus, largely due to lower margins. Reiterate Sell.

There are plenty of bulls

Conversely, over at Morgans, its analysts remain bullish on the supermarket giant and see value in its shares. They responded by retaining their add rating and lifting their price target to $19.85. Morgans commented:

Coles Group’s 3Q23 sales trading update overall was above our expectations. 3Q22 LFL sales growth (yoy): Supermarkets +6.5% (vs MorgansF +3.0%) and Liquor +1.5% (vs MorgansF +2.5%). Management said Supermarkets sales growth has continued into 4Q23 with volumes remaining modestly positive, while supplier input cost inflation is expected to continue to moderate.

It is a similar story for Citi, which has reiterated its buy rating and $20.20 price target.

Citi notes that Coles delivered sales growth a touch ahead of its forecasts. It believes that the company’s private label offering was a key driver of this outperformance and appears to believe the trend can continue.

The post  Is the Coles share price good value after the supermarket giant’s Q3 update? appeared first on The Motley Fool Australia.

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More reading

• Leading brokers name 3 ASX shares to buy today
• 5 things to watch on the ASX 200 on Monday
• Coles share price wobbles despite 7% sales revenue growth
• 5 things to watch on the ASX 200 on Friday
• How Coles shares could help ‘recession proof’ your portfolio

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Coles 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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With so many shares to choose from on the ASX, it can be hard to decide which ones to buy. The good news is that brokers across the country are doing a lot of the hard work for you.

Three top ASX shares that leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Coles Group Ltd (ASX: COL)

According to a note out of Citi, its analysts have retained their buy rating and $20.20 price target on this supermarket operator’s shares. This follows the release of a quarterly update from Coles last week, which came in a touch ahead of Citi’s forecasts. The broker believes that the company’s private label offering has been a key driver of this outperformance and appears to believe the trend can continue. The Coles share price is fetching $18.29 this afternoon.

Coronado Global Resources Inc (ASX: CRN)

A note out of Goldman Sachs reveals that its analysts have retained their buy rating on this coal miner’s shares with an increased price target of $2.20. This follows the release of a quarterly update that was in-line with expectations. Goldman continues to see Coronado as a great option due to its strong free cash flow and dividend yield, as well as a supportive met coal market on supply risks and China’s reopening. The Coronado Global share price is trading at $1.68 today.

ResMed Inc. (ASX: RMD)

Analysts at Goldman Sachs have also retained their buy rating on this sleep treatment company’s shares with an improved price target of $39.60. This follows the release of a solid quarterly update from ResMed last week. Goldman was pleased with what it saw and has upgraded its revenue and earnings estimates through to FY 2026. The broker also continues to see a long-duration runway of HSD organic growth and highlights that its shares trade on lower than normal multiples. The ResMed share price is trading at $35.84 on Monday.

The post Leading brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

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More reading

• Why Perenti, Pointsbet, ResMed, and Telix shares are rising today
• 5 things to watch on the ASX 200 on Monday
• Coles share price wobbles despite 7% sales revenue growth
• ResMed share price higher on Q3 ‘solid beat’
• Better ASX 200 healthcare share: CSL vs. Resmed

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 ResMed. The Motley Fool Australia has positions in and has recommended Coles Group and ResMed. 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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What a start to the week it has been for the S&P/ASX 200 Index (ASX: XJO) today. After a shaky week of trading last week, the ASX 200 has come back from the weekend with a bit of a spring in its step. At the time of writing, the ASX 200 has recorded a healthy gain of 0.43%, raising the index to just over 7,340 points. 

Another happy Monday, it seems. But let’s dive a little deeper into these promising market moves by taking a look at the shares that are sitting at the top of the ASX 200’s share trading volume charts at present, according to investing.com. 

The 3 most traded ASX 200 shares by volume this Monday

Pilbara Minerals Ltd (ASX: PLS)

First, let’s examine ASX 200 lithium stock Pilbara Minerals. This Monday has seen a chunky 17.98 million PIlbara shares exchanged on the share market as it currently stands. There hasn’t been much in the way of news from Pilbara either.

But we are still seeing this lithium producer endure a heavy sell-off, despite the gains of the broader market. After rising more than 7% on Friday, Pilbara shares have offloaded 3.18% so far this session, pulling the company down to $4.10 a share at the current time.

That’s despite a new positive rating from an ASX broker that we covered this morning. With a sell-off of that size, we don’t need much more explanation for this elevated volume.

Telstra Group Ltd (ASX: TLS)

Next up today is the ASX 200 telecommunications giant Telstra. So far this session, a decent 19.1 million Telstra shares have changed owners on the ASX. We haven’t seen any fresh news from the telco today. But that hasn’t stopped the Telstra share price from having a stellar session.

The company has gained a happy 0.7% so far today to $4.40 a share, a new 52-week high. With that to celebrate, it’s not much of a surprise to see this level of volume here with Telstra.

Sayona Mining Ltd (ASX: SYA)

Last, but certainly not least when it comes to trading volume, let’s check out another ASX 200 lithium share in Sayona Mining. Sayona has had a whopping 52.5 million of its shares bought and sold on the ASX thus far.

This looks like a result of the intense volatility we have seen with this company’s shares today. Sayona started out on a sad note this morning, dropping close to 4% by around midday to 19.2 cents a share.

But the shares then staged a dramatic recovery, rising as high as 20.5 cents (up 2.5%) before settling to the current 20-cent level we are now seeing. All of this bouncing around probably explains the massive trading volumes on display here.

The post Here are the 3 most heavily traded ASX 200 shares on Monday appeared first on The Motley Fool Australia.

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More reading

• Dalio says US and China ‘on brink of war’. Which ASX shares could be impacted?
• Why Scott Phillips is begging you to buy ASX shares right now!
• How did the AMP share price manage to surge 8% in April?
• Here are the 10 most shorted ASX shares
• These ASX 200 shares could be top options for your retirement portfolio: experts

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

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a decent gain. The benchmark index is currently up 0.5% to 7,343.3 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why these ASX shares are falling:

Best & Less Group Holdings Ltd (ASX: BST)

The Best & Less share price is down almost 3% to $1.93. This morning, this retailer confirmed the receipt of a takeover offer at a discount to its prevailing share price. BBRC International has offered $1.89 cash per share to acquire the company. Two major shareholders have revealed that they are willing to accept the offer.

Deep Yellow Limited (ASX: DYL)

The Deep Yellow share price is down almost 4% to 51.5 cents. Investors have been selling this uranium developer’s shares following the release of an update on drilling activities at Alligator River. The market may have been expecting stronger results from its drilling program.

Mirvac Group (ASX: MGR)

The Mirvac share price is down 1% to $2.37. This appears to have been driven by a broker note out of Citi this morning. According to the note, the broker has downgraded this property company’s shares to a neutral rating with a $2.50 price target. The broker made the move in response to Mirvac’s earnings guidance downgrade from last week.

Syrah Resources Ltd (ASX: SYR)

The Syrah Resources share price has continued its slump and is down a further 10% to $1.04. Investors have been selling off this graphite producer’s shares since its quarterly update last week. Syrah revealed that its unit costs were higher than the price received for its graphite. This led to management reducing its production plans and raising $150 million through the issue of new convertible notes to AustralianSuper.

The post Why Best & Less, Deep Yellow, Mirvac, and Syrah shares are falling today appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Why Appen, Megaport, Mirvac, and Pilbara Minerals shares are pushing higher today
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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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The Rio Tinto Limited (ASX: RIO) share price has fallen more than 8% since 19 April 2023. When ASX blue-chip shares drop that much, it’s worth asking whether they’re good value. So is now a buying opportunity?

As one of the world’s biggest iron ore miners, changes in the iron ore price can have a noticeable impact on how much profit Rio Tinto makes. Profit is usually one of the most important things that investors judge a business on.

If Rio Tinto gets more revenue for the same amount of production, then a higher iron ore price largely adds to profit because mining costs don’t typically change much from month to month. But a fall in the iron price largely reduces profit.  

What has happened to the iron ore price?

The iron ore price was above US$120 per tonne for most of January 2023 to mid-April.

But in the final week of April, the iron ore price rapidly dropped to US$105. Like many other commodities, the price of iron ore can be affected by the balance between supply and demand.

The Australian Financial Review recently reported on comments from investment bank Liberum Capital. Liberum said there hasn’t been this level of trade and price weakness in China’s ore-to-steel cycle this early in the season since 2012. In a note, Liberum said:

Back then, the trade was being rattled by an incoming President Xi [Jinping], who was busily rolling out a surprise national ‘political reform’ program.

This year, bearish drivers are more fundamental than political; turns out, there was no post-lockdown bounce like 2020; it was just a good old-fashioned seasonal uptick. And compared to those of the last decade, it was actually pretty weak.

The AFR reported five reasons cited by Liberum that could mean iron ore prices are weakening and could be set to stay this low. They are weak industry demand, 2023 inventory restocking ending, China steel production being capped, Chinese authorities continuing efforts to limit price speculation, and a recovery in supply from miners.

What could happen next for the Rio Tinto share price?

On top of that, Liberum Capital thinks the iron ore price is going to keep falling in the months and years ahead.

It’s expecting iron ore to be US$89 per tonne in 2024, US$85 in 2025, and US$71 in 2026.

The AFR also reported on a price forecast from Citi. Its three-month iron ore price outlook is US$100 per tonne – a bit lower than where it is today. Citi also suggested that there is the “possibility of further downside risk towards US$90 a tonne” where there is “meaningful cost support”.

I think if the iron ore price keeps slipping towards US$90 per tonne then the Rio Tinto share price could come under further pressure. But time will tell whether the price of the commodity will go higher or lower from here.

Is the Rio Tinto share price a buy?

The broker Goldman Sachs thinks Rio Tinto shares are a buy because of the company’s exposure to lithium.

However, on The Bull, Tim Haselum from Catapult Wealth said that Rio Tinto shares were a sell with the iron ore price under pressure. Haselum said that shareholders may want to “consider locking in some profits”.

However, I think the lower the iron ore price and the Rio Tinto share price go, the more attractive the ASX iron ore share becomes.

I believe the iron ore price will only fall so far and then hopefully recover again. Iron ore demand has gone through cycles before and this could be the latest cycle. Personally, I like Rio Tinto’s increasing exposure to copper so I think it’s getting closer to a buy – but I’d prefer to buy at a share price of under $105 for a better margin of safety.

The post Rio Tinto shares: Buy, hold or fold in May? appeared first on The Motley Fool Australia.

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Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 Goldman Sachs Group. 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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