Tag: Motley Fool

Are you looking to bolster your income portfolio with some new dividend stocks this month?

If you are, you may want to look at the two listed below that have been forecast to provide attractive yields. Here’s what you need to know about these buy-rated ASX 200 dividend stocks:

National Australia Bank Ltd (ASX: NAB)

The first ASX 200 dividend stock that has been named as a buy is big four bank, NAB.

Goldman Sachs is positive on the bank in the current environment. This is due to NAB’s exposure to commercial lending and its belief that “volume momentum over the next 12 months as favouring commercial volumes over housing volumes.”

In respect to dividends, the broker is expecting this to underpin fully franked dividends of $1.68 per share in FY 2023 and FY 2024. Based on the current NAB share price of $28.84, this implies yields of 5.8% in both years.

Goldman Sachs has a buy rating and $33.06 price target on its shares.

Stockland Corporation Ltd (ASX: SGP)

Another ASX 200 dividend stock that could be a buy is Stockland. It is a residential and land lease developer and retail, logistics, and office real estate property manager.

Citi is a fan of the company and recently named it as its top pick in the sector. The broker believes the market is being too negative on Stockland and doesn’t expect property prices to fall as much as feared.

Its analysts are also forecasting some big dividend yields in the near term. Citi expects dividends per share of 27 cents in FY 2023 and FY 2024. Based on the current Stockland share price of $4.45, this will mean sizeable yields of 6.1% in both financial years.

The broker currently has a buy rating and $4.70 price target on its shares.

The post Analysts say these ASX 200 dividend stocks are top buys appeared first on The Motley Fool Australia.

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More reading

• Should I buy NAB shares ahead of next week’s half-year results?
• Which is the best ASX 200 bank share to buy right now?
• Here are the top 10 ASX 200 shares today
• First Republic Bank shares just crashed 50%. Here’s how ASX 200 bank stocks are responding
• Lowest ASX bank yield: Are CBA shares still worth it?

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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Watch out for a possible shock to your portfolio of ASX shares on Tuesday afternoon.

According to a survey conducted by comparison site Finder, 55% of economists are tipping the Reserve Bank of Australia to increase its cash rate again after giving Australians a rest over Easter.

That’s despite the latest annual inflation rate cooling to 7%, down from 7.8% for the 2022 calendar year.

Impact Economics and Policy economist Dr Angela Jackson is one expert that reckons that’s not enough relief, so the Reserve Bank will be forced to act at 2:30pm Tuesday.

“The latest inflation figures will provide enough justification for the RBA board to move again on rates, with services inflation in particular likely to weigh heavily on their decision.”

The S&P/ASX 200 Index (ASX: XJO) has risen 5% since the start of the year, but a resumption of interest rate hikes could deal it a blow, as it will further dent already-low consumer and business confidence.

In fact, multiple experts last week predicted share markets could cop a 10% correction in the coming weeks as collateral damage from the ongoing fight against inflation.

Interest rates could be CUT later this year

However, that does mean a significant 45% of the surveyed economists think rates will stay the same this week.

Finder head of consumer research Graham Cooke admitted that’s the most divided sample in 12 months.

“This month’s result is the tightest we’ve seen since the RBA started hiking the cash rate, highlighting the difficulty of managing inflationary pressures without breaking too many household budgets.”

The economists at AMP Ltd (ASX: AMP) are in the optimistic camp.

“Inflation has now peaked and is falling a bit faster than the RBA expected,” said AMP chief economist Dr Shane Oliver.

“Although it’s a close call, this bolsters the case – along with increasing evidence of slowing growth and a cooling labour market – for the RBA to leave rates on hold in May.”

In encouraging words for long-term investors willing to hold onto their portfolios, his colleague Diana Mousina predicted inflation would “surprise to the downside” as 2023 unfolds.

“Given the slowing in goods inflation, signs of a weakening in job openings and employment demand and high recession/downturn risks, services inflation should weaken this year,” Mousina said on the AMP blog.

“We anticipate that inflation will be lower than most are expecting by the end of the year.”

Indeed, a whopping 76% of economists on the Finder survey are tipping that the Reserve Bank will leave rates alone in June.

Stock markets could even be provided with a nice boost later, according to Oliver, with “an eventual cut in rates to support struggling economic growth from later this year and through 2024”.

The post Why ASX shares could be rocked on Tuesday appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Monday
• Top ASX shares to buy in May 2023
• Here’s what brokers are saying about Pilbara Minerals shares
• These ASX dividend shares have big yields
• Top brokers name 3 ASX shares to buy next week

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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On Friday, the S&P/ASX 200 Index (ASX: XJO) finished the week on a positive note. The benchmark index rose 0.2% to 7,309.2 points.

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

ASX 200 expected to rise again

The Australian share market looks set to rise on Monday thanks to a strong finish to last week on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 54 points or 0.75% higher this morning. In the United States, the Dow Jones rose 0.8%, the S&P 500 climbed 0.8%, and the NASDAQ pushed 0.7% higher.

Oil prices jump

It could be a strong start to the week for ASX 200 energy shares such as Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) after oil prices jumped on Friday. According to Bloomberg, the WTI crude oil price was up 2.7% to US$76.78 a barrel and the Brent crude oil price rose 2.7% to US$80.33 a barrel. Oil prices rose after U.S. data showed crude output was declining while fuel demand was growing.

Pilbara Minerals named as a buy

The Pilbara Minerals Ltd (ASX: PLS) share price could be good value according to analysts at Citi. That’s despite its quarterly update being softer than it had hoped. This is because the broker believes that we are probably at the end of the downstream destocking cycle. Citi has retained its buy rating and $4.60 price target on the lithium giant’s shares.

Gold price relatively flat

ASX 200 gold shares including Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could have a subdued start to the week after the gold price traded broadly flat on Friday night. According to CNBC, the spot gold price edged a fraction higher to $1,999.4 per ounce. Improving risk sentiment appears to have weighed on the safe haven asset.

Coles rated as a sell

Coles Group Ltd (ASX: COL) shares could be overvalued according to analysts at Goldman Sachs. In response to the supermarket giant’s quarterly update, the broker has retained its sell rating and $15.80 price target. The broker said: “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.”

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

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More reading

• Top ASX shares to buy in May 2023
• Here’s what brokers are saying about Pilbara Minerals shares
• Top brokers name 3 ASX shares to buy next week
• Want $300 in monthly passive income? Buy 24,300 shares of this ASX 200 stock
• These were the best-performing ASX 200 shares 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 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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As we rocket faster than a speeding bullet to the halfway mark of 2023, we asked our Foolish writers which ASX shares they reckon could be set to soar up, up and away!

Here is what the team came up with:

7 best ASX shares for May 2023 (smallest to largest)

• Universal Store Holdings Ltd (ASX: UNI), $360.59 million
• Beach Energy Ltd (ASX: BPT), $3.35 billion
• Altium Limited (ASX: ALU), $5.02 billion
• Allkem Ltd (ASX: AKE), $7.81 billion
• Treasury Wine Estates Ltd (ASX: TWE), $10.06 billion
• James Hardie Industries Plc (ASX: JHX), $14.80 billion
• Telstra Group Ltd (ASX: TLS), $50.49 billion

(Market capitalisations as of market close 28 April 2023).

Why our Foolish writers love these ASX stocks

Universal Store Holdings Ltd

What it does: Universal Store is a retailer focused on premium youth apparel. It operates three different brands – Universal Store, Thrills and Perfect Stranger.

By Tristan Harrison: I think this ASX All Ords share could deliver good returns over the next few years.

In its FY23 half-year result, the company delivered statutory profit growth of 31.7% and declared an interim dividend of 14 cents per share.

Using the forecast numbers on Commsec, Universal Store shares are valued at just 11x FY23’s estimated earnings with a potential grossed-up dividend yield of 8.1%.

I believe the business can continue to grow as it opens more stores, expands the Perfect Stranger brand nationally, benefits from increased scale and achieves greater efficiencies through its new distribution centre.

Motley Fool contributor Tristan Harrison does not own shares in Universal Store Holdings Ltd.

Beach Energy Ltd

What it does: Beach Energy is an oil and gas producer based in South Australia. The company has numerous onshore and offshore projects in New Zealand and Australia. It’s a key gas supplier to Australia’s east coast markets.

By Bernd Struben: Beach Energy shares are down 6% in 2023, which I think presents a good entry point.

Oil and gas prices have come off the boil, but I believe energy prices will rebound once global interest rates peak and recession fears ebb.

While Beach reported a 5% decline in third-quarter production, that was mostly due to expected and unexpected outages, and the company did maintain its guidance.

Looking ahead, Beach has significant potential to increase production, with first gas from its Waitsia Gas Plant targeted by the end of 2023.

The company’s balance sheet is strong, with total liquidity of $504 million as at 31 March.

Beach pays a trailing dividend yield of 2.0%, fully franked.

Motley Fool contributor Bernd Struben does not own shares in Beach Energy Ltd.

Altium Limited

What it does: Founded in 1985, Altium provides software for designing printed circuit boards (PCBs). Think of the company as the digital toolkit for designing the technology responsible for powering modern-day devices – from electric vehicles to smart vacuum cleaners.

By Mitchell Lawler: Despite Altium making strides in growing the business over the past few years, the share price is still fluctuating between $25 and $40. This is probably due to the lack of earnings growth over this period. However, I believe this could be set to change. 

Earnings margins ultimately come down to pricing power. In the PCB design space, there are two big names: Altium and Cadence. Both companies are growing their revenue aggressively and maintaining profit margins above 20%. 

This leads me to think there could be a duopoly forming in the industry, which would allow both companies to lift their prices. Mastercard and Visa are prime examples of this, now touting margins greater than 40%.

Motley Fool contributor Mitchell Lawler does not own shares in Altium Limited.

Allkem Ltd

What it does: Allkem is the lithium mining giant formed by the merger of Galaxy Resources and Orocobre in 2021.

By James Mickleboro: Although lithium prices have taken a tumble in recent months and look likely to keep falling for some time, I’m still positive on Allkem shares. This is due to the company’s production growth plans for its massive projects across the Americas and Australia.

Management aims to grow Allkem’s lithium carbonate equivalent (LCE) production by >4x over the five years to FY 2028. I expect this production growth to help offset lithium price declines and keep the company’s profits strong for the foreseeable future.

Another reason I would buy Allkem stock is its valuation. At 0.9x net asset value (NAV), the ASX 200 share looks meaningfully cheaper than rivals, which trade on a peer average of ~1.3x NAV. It is partly for this reason that Goldman Sachs currently has a buy rating and a $12.90 price target on Allkem shares.

Motley Fool contributor James Mickleboro owns shares of Allkem Ltd.

Treasury Wine Estates Ltd

What it does: Treasury Wine is the company behind iconic Australian wine labels such as Penfolds, Wolf Blass, and 19 Crimes.

By Brooke Cooper: The Treasury Wine share price has been on a roll lately.

It’s lifted more than 50% from the lows it reached in 2021 amid wine tariffs imposed by China in response to political tensions. And I think it has scope to continue gaining.

Treasury Wine reported a 17% jump in earnings before interest, tax, SGARA, and material items for the first half of the financial year.  Not to mention, there looked to be positive news on the tariff front last month.

I’m not alone in my bullishness. Goldman Sachs has a buy rating and a $14.70 price target on Treasury Wine shares.

Motley Fool contributor Brooke Cooper does not own shares in Treasury Wine Estates Ltd.

James Hardie Industries Plc

What it does: James Hardie is the world’s leading producer and marketer of fibre-cement wall and floor products used in new residential, commercial, and industrial construction.

By Bronwyn Allen: James Hardie shares steadily tumbled throughout 2022.

This was due to rising inflation and interest rates, as well as global supply disruptions and labour shortages that created significant delays in housing construction activity.

But, it appears all that could be now turning around, providing tailwinds for an ASX 200 share that many experts believe has been oversold.

Brokers have been recommending James Hardie as a buy since the start of 2023, and its share price is now up by almost 30% in the year to date.

It may not be too late to buy, though. Citi says the company is trading on an attractive FY24 “trough earnings” multiple of 19, and the stock price is still a long way off its historical peak of $58.07, reached in December 2021.

Motley Fool contributor Bronwyn Allen owns shares in James Hardie Industries Plc.

Telstra Group Ltd

What it does: Telstra is a company almost all Australians would be familiar with. It is the largest and most dominant telco in Australia, offering a range of mobile and fixed-line internet and telephony services.

By Sebastian Bowen: I believe Telstra is an ASX 200 share worth a second look in May. This telco has been on a bit of a tear this year, rising from under $4 a share at the start of the year to the $4.30 range we are seeing more recently. Telstra also hit several new 52-week highs at the end of April too.

I like Telstra because of its inelastic customer demand and strong brand. This is a blue-chip stock that should do well in all economic climates.

Many brokers think Telstra stock has further to run as well. Last month, Morgans had Telstra on its best buys list, with a share price target of $4.70.

Motley Fool contributor Sebastian Bowen owns shares in Telstra Group Ltd.

The post Top ASX shares to buy in May 2023 appeared first on The Motley Fool Australia.

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More reading

• 6 excellent ASX 200 dividend shares that aren’t banks or miners
• These are the ASX 200 lithium shares to buy due to a new ‘game changing’ technology
• Bought Telstra shares last June? Guess what kind of dividend yield you’re earning today
• Here are the top 10 ASX 200 shares today
• Nasdaq rebound! Brokers say these ASX 200 tech shares are buys

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium, Cadence Design Systems, Mastercard, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2025 $370 calls on Mastercard and short January 2025 $380 calls on Mastercard. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Mastercard and Treasury Wine Estates. 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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Pilbara Minerals Ltd (ASX: PLS) shares had a strong finish to the week.

The lithium miner’s shares rose 7.5% on Friday to end the period at $4.24.

This followed the release of the company’s third-quarter update, which went down well with investors despite falling short of the market’s expectations.

What are brokers saying about Pilbara Minerals shares

A number of brokers have been looking over the company’s update and have given their verdict on it and Pilbara Minerals’ shares.

Let’s start with Citi, which wasn’t expecting the market to respond positively to the release. However, with the broker believing that we could be at the end of the downstream destocking cycle, it remains positive and reiterated its buy rating and $4.60 price target. It said:

PLS reported operating cashflow of ~$920m, down 3% QoQ but better than SepQ. Cash now A$2.68bn, +0.46bn QoQ. Average selling price down 15% QoQ to US$4840/t or US$5,522 on a SC6 basis vs spot US$4671/t. PLS expects softening prices into JunQ until chemicals pricing stabilises. Production guidance is maintained with costs nudged up. Conference call is tomorrow at 9AM AEST and will likely focus on downstream strategy, pricing environment and ramp up of plant throughput. We expect a market reaction to the downside. Maintain Buy on our view that we are probably at the end of the downstream destocking cycle.

Over at Goldman Sachs, its analysts weren’t overly impressed with the update. However, they retained their neutral rating with a new $4.10 price target. The broker commented:

Pilgangoora achieved an average realised price of US$4,840/t (US$5,522/t SC6.0 CIF China), down ~15% QoQ and ~10% below GSe/consensus, including a spot sale of 15kt based on a new pricing model linked to tolling lithium hydroxide. PLS anticipates continued softening of spodumene prices into the June quarter until pricing for lithium chemicals stabilises, including domestic pricing in China, with this expected to continue in the short term with pricing potentially strengthening in 2H as restocking of inventory levels in China occurs across the supply chain.

‘Softer than we’d hoped’

Morgans was also disappointed but believes there’s value on offer with Pilbara Minerals shares. It has retained its add rating with a reduced price target of $5.00. It said:

3Q production met expectations (-1% on forecast) but pricing was softer than we’d hoped (-5% on forecast, -15% qoq). Realised prices will continue to soften in the coming quarters and we have reduced our forecasts given weak chemical pricing. This reduces our price target to $5ps (- 6%). We still see upside to our DCF valuation and there is the potential for short-term price momentum when the Chinese market strengthens.

The post Here’s what brokers are saying about Pilbara Minerals shares appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy next week
• 2 ASX lithium shares this US institutional investor is buying up big (and one it’s selling)
• 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

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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Are you searching for big dividend yields? If you are, then read on because listed below are two ASX dividend shares that offer investors big yields.

Here’s what you need to know about these ASX dividends shares:

Accent Group Ltd (ASX: AX1)

This retailer could be an ASX dividend share to buy for income investors. It is the fashion and footwear retailer behind brands including Hype DC, The Athlete’s Foot, Glue, and Platypus.

The team at Goldman Sachs is very positive on the company. In fact, it believes the market is overlooking just how positive its outlook is. The broker highlights its expansion potential and exposure to younger consumers as reasons to buy. Particularly given how the latter have less exposure to rising rates and stand to benefit from increases to the minimum wage.

Goldman currently has a buy rating and $3.10 price target on its shares.

As for dividends, Goldman is forecasting a fully franked dividend of 15 cents per share in FY 2023. Based on the current Accent share price of $2.54, this will mean a generous yield of 5.9%.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

Another option for income investors to consider is actually an ETF. The Vanguard Australian Shares High Yield ETF gives investors with exposure to ASX dividend shares that have higher than average forecast dividends based on broker research.

But rather than just loading up on banks and miners, the ETF has a diverse group of holdings and restricts the proportion invested in any one industry to 40% and 10% for any one company.

Among the ASX dividend shares that you’ll be owning a slice of with this ETF are giants such as BHP Group Ltd (ASX: BHP), Coles Group Ltd (ASX: COL), Commonwealth Bank of Australia (ASX: CBA), and Telstra Corporation Ltd (ASX: TLS).

At present, the Vanguard Australian Shares High Yield ETF trades with an estimated forward dividend yield of 5.5%.

The post These ASX dividend shares have big yields appeared first on The Motley Fool Australia.

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More reading

• Is the Vanguard Australian Shares High Yield ETF (VHY) a strong ASX buy for passive income?
• Get a passive income boost from these ASX dividend shares: analysts
• 2 fantastic ETFs for ASX investors to buy next week
• 5 steps to bring in $1,000 per month in passive income
• The Accent share price has soared 100% in 6 months. Is it still a 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 no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Coles Group and Telstra Group. The Motley Fool Australia has recommended Accent Group and Vanguard Australian Shares High Yield 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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Last week saw a number of broker notes hitting the wires once again. Three buy ratings that investors might want to be aware of are summarised below.

Here’s why brokers think investors ought to buy them next week:

Mineral Resources Ltd (ASX: MIN)

According to a note out of Morgans, its analysts have retained their add rating on this mining and mining services company’s shares with a trimmed price target of $103.00. Although the broker was a touch underwhelmed with Mineral Resources’ quarterly performance, the result does not impact its very positive longer-term investment view on the company. As a result, it continues to see plenty of value in its shares at the current level. The Mineral Resources share price ended the week at $73.68.

Pilbara Minerals Ltd (ASX: PLS)

A note out of Citi reveals that its analysts have retained their buy rating and $4.60 price target on this lithium miner’s shares. This follows the release of a quarterly update that was short of expectations, particularly in regard to lithium pricing. However, Citi is overlooking this on the belief that we are probably at the end of the downstream destocking cycle. The Pilbara Minerals share price was fetching $4.24 at Friday’s close.

Xero Limited (ASX: XRO)

Analysts at UBS have upgraded this cloud accounting company’s shares to a buy rating with an improved price target of $109.00. According to the note, UBS believes that Xero is well-placed to deliver stronger than expected free cash flow in the coming years. This is due to its belief that the company’s strong growth will continue despite its recent cost reductions initiative. The Xero share price was trading at $93.34 on Friday afternoon.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

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More reading

• 2 ASX lithium shares this US institutional investor is buying up big (and one it’s selling)
• Here are the top 10 ASX 200 shares today
• Nasdaq rebound! Brokers say these ASX 200 tech shares are buys
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Why Appen, Megaport, Mirvac, and Pilbara Minerals shares are pushing higher today

Motley Fool contributor James Mickleboro has positions in Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Xero. 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) stock Inghams Group Ltd (ASX: ING) could be the source of appealing passive income in the form of dividends. It could play a part in an investor’s nest egg.

Inghams is the largest integrated poultry producer in Australia and New Zealand. While chickens are the core part of the business, it’s also involved with the production of turkey and stock feed.

The ASX agriculture share has been through a lot of volatility over the last few years as it suffers from inflation impacts.

Inghams earnings recap

Inghams’ recent FY23 half-year result showed some of the pain that the business has gone through over the prior 12 months. While core poultry volume was only down 0.6% year over year, the underlying earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 12.2% to $210.2 million and the underlying net profit after tax (NPAT) fell 13.1% to $26.6 million.

But, the comparison to the FY22 second half numbers shows how much the business has already started showing an improvement. Half-over-half, underlying EBITDA rose 32.7% and underlying NPAT was up 885.2%.

Consumer demand returns

Inghams said in the result that poultry demand was seeing “healthy growth” as consumer activity returned to pre-COVID patterns. An industry-wide reduction of chicken volume for sale has underpinned a “favourable pricing environment”. That sounds positive for its ability to pay passive income in the coming periods.

While it was still seeing cost inflation, the company said it was “focused on ensuring customer pricing levels appropriately reflect these ongoing feed and inflationary cost pressures and will pass on further price increases as required.” The company added:

The poultry sector remains a growing sector, holding a significant and growing affordability advantage over red meat and seafood alternatives which is particularly attractive in the current inflationary environment.

Importantly, ongoing discussions with key customers highlights their strategic focus on the poultry segment, reaffirming our optimism for the category over the medium to longer term.

It’s with that in mind that there are projections for good dividends in the next few years from Inghams.

$300 goal of monthly passive income from the ASX 200 stock

In FY24, the business could generate 21.6 cents of earnings per share (EPS) and pay a dividend per share of 14.8 cents (according to Commsec), which would equate to a forward grossed-up dividend yield of 7.5%.

If we think about the monthly $300 target, Inghams doesn’t actually pay monthly. But, we can think of the target of a $3,600 goal which is then divided into 12 equal amounts.

Investors would need 24,325 Inghams shares to get $3,600 of annual passive income in FY24. This many shares would currently come at a cost of around $68,000.

But, that cost could be reduced if we think further ahead to the FY25 payout. Commsec numbers suggest that the ASX 200 stock could pay a total dividend per share of 17.4 cents per share. To achieve $3,600 of annual dividend income with that goal in mind, we’re talking about 20,690 Inghams shares for a cost of around $58,000.

Diversification is a good idea in a passive income portfolio, I wouldn’t put all my eggs in one basket with Inghams, But, I think it can deliver good dividends and growth over the next few years.

The post Want $300 in monthly passive income? Buy 24,300 shares of this ASX 200 stock appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Friday

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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When it comes to making an investment, it is always best to understand why some investors are bullish on an ASX share and why others are bearish.

Failure to do this could leave you nursing a heavy loss because of something you had not even considered to be a risk.

To give you an example of this, let’s take a look at BHP Group Ltd (ASX: BHP) shares.

Bullish and bearish factors

Fortunately, in a recent note from Morgans, its analysts have laid out three bull points and three bear points for investors to consider.

Let’s start with its bull points. These include its exposure to China’s reopening, its production growth plans, and its relative safety. In respect to the former, it commented:

BHP’s quality and robust fundamentals positions it as a key way to play a recovery in China’s COVID-impacted growth. We also see this fueled by BHP’s basket of commodity exposures. This could also benefit from an improvement in ex-China world fears of a global recession.

As for production growth, the broker said:

BHP is alone amongst the major iron ore miners in planning meaningful production growth. We expect it will get the required approvals to expand to 330mtpa in the medium term. While Jansen (potash) continues to shape up as a solid fifth pillar.

Finally, another reason to be bullish on BHP shares is the broker’s view that the Big Australian is a safer than average option in the mining sector. It adds:

BHP’s operational performance has shown considerable resilience against current sector headwinds. While its balance sheet and dividend profiles are supportive.

Bearish points

A few bearish points for investors to consider before buying BHP shares include a potential turn in the mining cycle, M&A appetite, and cost pressures. On the first point, it commented:

Every cycle is different, and the changing of cycle phases is only usually obvious when it is in the rear vision mirror. A significant slowdown in China, combined with the risk of a global recession, should not be taken lightly, and could materially impact BHP’s earnings if metal prices weaken.

And while its point about M&A activity isn’t as relative now its acquisition of OZ Minerals is signed and sealed, it is food for thought for future deals. It said:

BHP may increase its offer for OZL, but there is a risk it continues to get more aggressive in layering in new growth into its business.

Finally, the broker feels investors should consider cost inflation and how that could impact its operations. It concludes:

Inflationary pressures across BHP’s global business have proven volatile over the last 6 months, and may not moderate the way we had hoped, impacting margins.

Should you buy?

Based on the sum of the above and the current valuation of BHP shares, Morgans believes the risk/reward is favourable for investors.

As a result, it has given BHP shares the equivalent of a buy rating with a $50.40 price target.

The post Bull and bear factors impacting BHP shares appeared first on The Motley Fool Australia.

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More reading

• Looking to buy ASX 200 iron ore shares? Here are 5 reasons not to
• Top brokers predict BHP shares to surge past $50 again in 2023
• Morgans says ‘attractive buying opportunity’ coming for BHP shares
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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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Warren Buffett is one of the richest people on earth, commanding a net worth of nearly US$115 billion today, according to Forbes.

But that wasn’t always the case. Indeed, he famously amassed 99% of his wealth after his fiftieth birthday.

The billionaire behind Berkshire Hathaway made the most of his fortune by investing in the stock market – earning him the title ‘Oracle of Omaha’ and admiration from value investors everywhere.

That’s why I’d turn to Buffett wisdom if I had no savings and an ambition to build wealth.

First things first

If I had absolutely nothing in the bank and a desire to invest in the stock market, the first thing I’d do is assess my financial situation. That means making a budget.

From there, I’d commit to setting aside a certain amount each week or month, even if it doesn’t seem like much.

Initially, that cash would go towards paying off high-interest debt and building a safety net in case of emergency.

Only after that would I use my spare money to consistently invest in ASX shares capable of growing over the years and decades to come.

Warren Buffett looks to the horizon

You’ve likely heard the phrase ‘money doesn’t grow on trees’. Similarly, wealth is rarely built overnight.

It makes sense, then, that Buffett is famously a long-term investor. In fact, he’s held some of his best investments for two decades. He once said:

I buy on the assumption that they could close the market the next day and not reopen it for five years.

That means buying shares in companies you truly believe can outperform over the long term when they’re trading at attractive prices.

To follow in Buffett’s footsteps, I’d personally look for stocks that offer competitive advantages over their peers, boast a strong balance sheet, and have the potential to grow.

Diversification is key

But, since investing in just one such share brings some major risks, I’d also aim to build a portfolio of diverse ASX shares.

That way, if a single company or sector experiences a major downturn, it won’t drag my whole portfolio down with it.

It’s the same idea for the winners. By investing in a variety of shares, I stand more of a chance to find myself holding the market’s next big success story. As Buffett said earlier this year:

The weeds wither away in significance as the flowers bloom. Over time, it takes just a few winners to work wonders.

Finally, Warren Buffett takes advantage of compounding

Albert Einstein is widely quoted as having dubbed compound interest “the eighth wonder of the world” and Buffett has attributed his fortune, in part, to the phenomenon.

Compound interest (or compounding) is, to put it simply, realising gains on your gains.

By reinvesting your earnings – or dividends – back into the stock market, it’s possible to realise more returns without forking out additional cash.

It’s a powerful wealth-building tool that requires a decent degree of patience. Indeed, the final quote I’ll leave you with comes not from Buffett, but from Berkshire Hathaway vice chair Charlie Munger, who once said:

The first rule of compounding: Never interrupt it unnecessarily.

The post No savings? I’m using the Warren Buffett method to build wealth from scratch appeared first on The Motley Fool Australia.

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More reading

• 6 excellent ASX 200 dividend shares that aren’t banks or miners
• 3 top quality ETFs for ASX investors to buy and hold for 10 years
• These were the best-performing ASX 200 shares in April
• Dividend income beasts: 2 ASX 200 shares offering big yields
• Looking to buy ASX 200 iron ore shares? Here are 5 reasons not to

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Berkshire Hathaway. The Motley Fool Australia has recommended Berkshire Hathaway. 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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