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The S&P/ASX 200 Index (ASX: XJO) went up by 0.9% to 7,327 points.

Here are some of the highlights from the ASX today:

Challenger Ltd (ASX: CGF)

The Challenger share price went up 8.8% today in response to shareholder news.

It was announced today that Athene, a leading international retirement services company, as well as strategic partner Apollo Global Management, have agreed to buy a 15% minority interest in Challenger from an existing approval. It requires regulatory approval for 3%.

When combined with other Challenger shares acquired by Athene and Apollo, the acquisition of the 15% equity interest will result in a total expected minority economic interest of 18% of the ASX 200 share for approximately US$540 million.

Athene and Apollo said they see attractive long-term attractive opportunities in partnering with and supporting Challenger’s continued growth as minority shareholders.

Challenger’s managing director and CEO Richard Howes said:

Today’s announcement by Athene is a strong endorsement of Challenger’s market position and long-term growth prospects from a leading international retirement services provider. We look forward to working with Athene and Apollo as we continue to pursue our shared purpose of providing customers financial security for a better retirement.

The Athene CEO Jim Belardi said:

Investing in Challenger represents an exciting opportunity for us to support a well-established platform within the Australian market, a geography we have been studying given the current economic conditions and compelling demographic fundamentals.

In many ways, Challenger is the perfect partner for us – the company is led by an experienced management team, has a strong market position, attractive growth prospects, and shares our deep commitment to retirees. Together, we believe we can help Challenger continue to build long-term value, similar to what we’ve been able to achieve in building Athene’s business in the US and supporting the growth of our sister company Athora in Europe, where we are also minority shareholders.

Popular ASX shares

Some of the ASX 200’s most followed ASX shares saw the most share price growth today.

The Zip Co Ltd (ASX: Z1P) share price went up 6.5%. The buy now, pay later company was one of the strongest performers within the ASX 200.

Other businesses that also were among the leading gains included A2 Milk Company Ltd (ASX: A2M), which rose by around 6%, and the Pointsbet Holdings Ltd (ASX: PBH) share price rose by around 4.8%.

Outside of the top five performers, the Afterpay Ltd (ASX: APT) share price rose around 4.5% and the Xero Limited (ASX: XRO) share price climbed around 4%.

Magellan Financial Group Ltd (ASX: MFG)

The Magellan share price rose by around 0.2% today after giving investors an update.

The ASX 200 fund manager said that for the quarter ending 30 June 2021, its total funds under management (FUM) increased to $113.9 billion, up from $106 billion at 31 March 2021.

For the last quarter of FY21, Magellan experienced net outflows of $351 million, which comprised of net retail outflows of $260 million and net institutional outflows of $91 million.

Magellan funds will pay distributions (net of reinvestment) of approximately $438 million in July, which will be reflected in the FUM figures in next month’s announcement.

The fund manager also said it’s entitled to estimated performance fees of approximately $30 million for the year ended 30 June 2021.

Average FUM for FY21 was $103.7 billion, up from $95.5 billion for the year ended 30 June 2020.

The post ASX 200 rises, Challenger soars, Zip jumps appeared first on The Motley Fool Australia.

More reading

• The Afterpay (ASX:APT) share price stormed 5% higher today
• Here are 3 of the most traded ASX 200 shares today
• Magellan (ASX:MFG) share price is see-sawing today
• These ASX 200 tech shares are beating the broader market today
• The AFIC (ASX:AFI) share price just hit an all-time high

Motley Fool contributor Tristan Harrison owns shares of Magellan Financial Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, Pointsbet Holdings Ltd, Xero, and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO, Challenger Limited, and Xero. The Motley Fool Australia has recommended A2 Milk and Pointsbet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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If you’re wanting to invest in the small side of the Australian share market, then the three small caps listed below could be worth a closer look.

While there is certainly still a lot of work to be done, they could have very bright futures ahead of them. Here’s why they could be worth adding to your watchlist:

Alcidion Group Ltd (ASX: ALC)

The first small cap share to watch is this informatics solutions company. It is aiming to transform healthcare with proactive, smart, intuitive technology solutions that improve the efficiency and quality of patient care in healthcare organisations, worldwide. Alcidion appears well-positioned for growth thanks to the shift to a paperless environment in the healthcare sector and other favourable industry tailwinds.

Over The Wire Holdings Ltd (ASX: OTW)

Another small cap to watch is Over The Wire. It is a telecommunications, cloud, and IT solutions provider which has been growing at a solid rate in recent years. Positively, this has continued in FY 2021, with the company reporting a 17% increase in revenue to $50.3 million and a 28% jump in EBITDA to $10.5 million. Positively, almost all its revenue is now recurring, with recurring revenue growing 25% to $45.9 million. And while a recent update reveals that a major new contract is expected to close in FY 2022 instead of FY 2021, management is still forecasting half on half recurring revenue growth of 7% in the second half.

Volpara Health Technologies Ltd (ASX: VHT)

A final small cap to watch is Volpara. It is a healthcare technology company that uses artificial intelligence to assist with the early detection of breast cancer. Demand for its software has been growing strongly in recent years, leading to impressive market share gains in the United States. This has underpinned solid recurring revenue growth. However, despite this, Volpara still has a significant runway for growth in the future. It estimates that it has a US$750 million annual recurring revenues (ARR) opportunity in breast cancer screening alone. This compares to its current ARR of ~US$18.6 million.

The post 3 growing small cap ASX shares to watch appeared first on The Motley Fool Australia.

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• 2 buy-rated small cap ASX shares tipped for strong growth
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• Why has the Alcidion (ASX:ALC) share price rocketed 20% in the last month?

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. owns shares of and has recommended Alcidion Group Ltd, Over The Wire Holdings Ltd, and VOLPARA FPO NZ. The Motley Fool Australia owns shares of and has recommended VOLPARA FPO NZ. The Motley Fool Australia has recommended Alcidion Group Ltd and Over The Wire Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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ASX 200 oil shares were falling today amid infighting within OPEC+ — the 23-member group of the world’s largest oil-producing nations.

For example, the Woodside Petroleum Limited (ASX: WPL) share price finished the day down by 1.87% and Oil Search Ltd (ASX: OSH) shares were 2.45% lower. Other ASX 200 energy shares that were down by around 2% included Ampol Ltd (ASX: ALD) and Beach Energy Ltd (ASX: BPT). These falls came within the context of a rising market. The S&P/ASX 200 Index (ASX: XJO) ended Wednesday’s session 0.9% higher.

OPEC+ quarrels hit oil prices

Today’s falls in ASX 200 oil shares came after OPEC+ nations cancelled their scheduled meeting due to an inability to agree on supply levels, as reported by Reuters.

OPEC+ (consisting of the 13 OPEC nations like Saudi Arabia and 10 other oil-producing nations including Russia) ministers abandoned discussions after Saudi Arabia and the United Arab Emirates could not reconcile their differing views.

Reuters reported analysts and traders fear the rift may lead to the UAE ‘going it alone’ and massively increasing its production. They also fear other OPEC nations may then follow suit. If the supply of oil increases, then its price will decrease.

ASX 200 oil shares, along with oil prices, boomed earlier this week as investors initially thought the breakdown in talks would be beneficial for the sector.

OPEC+ derives its market power from its ability to suppress production to inflate the price of the black liquid. The OECD defines the group as an anti-competitive cartel.

The current price of Brent crude oil is at US$74.50 per barrel. That’s a 0.15% fall from last week. In April last year, for the first time ever, crude oil was selling at an astonishing minus US$40.32 per barrel. Despite increasing climate change awareness, oil is still the most consumed energy product globally.

More on ASX 200 oil shares

Over the past 12 months, the abovementioned ASX 200 oil shares have fluctuated from +26% (Oil Search) to -14% (Beach Energy). The Woodside share price is around 11% higher and Ampol shares are 1.25% higher over the same period.

By market capitalisation, the largest of these companies is Woodside with a valuation of nearly $23 billion. The smallest is Beach Energy, which is valued at almost $3 billion.

The post ASX 200 oil shares tumble as OPEC+ nations squabble appeared first on The Motley Fool Australia.

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• Why Nanosonics, Oil Search, Opthea, & Piedmont Lithium are tumbling
• ASX 200 up 0.55%: Challenger jumps, Nanosonics sinks
• Woodside (ASX:WPL) share price lower despite acquisition update
• 5 things to watch on the ASX 200 on Wednesday
• Here are 3 ASX 200 shares that were on the move today

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

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Are you looking for some attractive dividend yields to boost your income? Then look at the ones listed below.

Here’s why these dividend shares have been tipped as great options for income investors right now:

National Australia Bank Ltd (ASX: NAB)

If you don’t already have exposure to the banking sector, then NAB could be a dividend share to consider. Due to improving trading conditions, its cost management initiatives, its position as the largest business bank, and its strong capital position, things are looking very positive for NAB.

It is for this reason that NAB remains Goldman Sachs’ preferred sector exposure. Goldman currently has a conviction buy rating and $29.97 price target on the bank’s shares.

The broker believes NAB is in a position to grow its dividend at a solid rate over the coming years. It is forecasting fully franked dividends per share of 124 cents in FY 2021, 133 cents in FY 2022, and $1.38 in FY 2023.

Based on the current NAB share price of $26.31, this represents yields of 4.75%, 5%, and 5.25% respectively.

Super Retail Group Ltd (ASX: SUL)

Another ASX dividend share to consider is Super Retail. It is the retail group behind the BCF, Macpac, Rebel, and Super Cheap Auto retail brands.

Super Retail’s businesses have been performing strongly in FY 2021 thanks to a favourable redirection in consumer spending. This led to the company reporting a 23% increase in half year sales to $1.78 billion and a 139% increase in underlying net profit after tax to $177.1 million.

Credit Suisse is bullish on Super Retail. It believes the market is underestimating the company’s strong position in the retail market. The broker currently has an outperform rating and $14.45 price target on its shares. Credit Suisse is forecasting dividend of 71.7 cents per share in FY 2021 and then 49.2 cents per share in FY 2022.

Based on the latest Super Retail share price of $12.49, this will mean fully franked yields of 5% and 3.4%, respectively.

The post 2 buy-rated ASX dividend shares for income investors appeared first on The Motley Fool Australia.

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• ASX 200 Weekly Wrap: ASX finishes FY21 on a high
• Broker names 2 ASX dividend shares to buy
• These high yield ASX dividend shares could be buys
• Why the NAB (ASX:NAB) share price remained flat in June
• Is your money safe in Commonwealth Bank (ASX:CBA) shares 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 owns shares of and has recommended Super Retail Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The BetMakers Technology Group Ltd (ASX: BET) share price ended today’s session higher. The betting technology company announced a partnership for British and Irish horseracing in the minutes after market open.

At the closing bell, BetMakers shares travelled 4.52% higher to $1.155.

What did BetMakers announce?

The BetMakers share price lifted off during late market trade, with investors rallying up in the final hour.

In its release, BetMakers advised it signed a multi-year live streaming agreement with Sports Information Services and Racecourse Media Group.

The partnership will see live horseracing vision and wagering content from Britain and Ireland to approved corporate bookmakers in Australia. BetMakers will be the authorised supplier of the vision and content held under the rights of Sports Information Services and Racecourse Media Group. This gives licenced rights to more than 50 racecourses from both companies.

BetMakers CEO and managing director, Todd Buckingham touched on the milestone agreement, saying:

The model of a global racing network, importing and exporting live vision and wagering-related data and content to promote racing across regulated jurisdictions across the world 24/7, is something BetMakers has been successfully promoting. We are delighted to partner with SIS and RMG to bring British and Irish racing to as many punters as we can through our partner operators in Australia. This deal also supports British and Irish racing by increasing commercial returns for the sport.

Sports Information Services commercial director, Paul Witten went on to add:

This is an important step in driving greater access for British and Irish horseracing content in Australia where we know it is popular with punters.

And Racecourse Media Group commercial director, Nick Mills also said:

We are pleased to see this deal eventuate with BetMakers…

The deal results in a bigger audience within Australia, driving new digital revenues for our racecourses through increased returns generated by wagering turnover growth.

About the BetMakers share price

Over the last 12 months, BetMakers shares have risen by more than 180% and over 70% in 2021 alone. The company’s share price recorded a strong upwards trajectory before falling in late May on the Tabcorp Holdings Limited (ASX: TAH) proposed takeover.

At today’s price, BetMakers has a market capitalisation of roughly $938 million, with approximately 812 million shares outstanding.

The post Why the BetMakers (ASX:BET) share price finished the day 4% higher appeared first on The Motley Fool Australia.

More reading

• Why A2 Milk, Airtasker, BetMakers, & Sydney Airport shares are storming higher
• Why the BetMakers (ASX:BET) share price is up 5% at lunchtime
• ASX 200 up 0.1%: Sydney Airport takeover, Tabcorp demerger, a2 Milk jumps
• Tabcorp (ASX:TAH) share price drops on demerger news
• BetMakers (ASX:BET) builds out tech with more acquisitions

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Betmakers Technology Group Ltd. The Motley Fool Australia has recommended Betmakers Technology Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Afterpay Ltd (ASX: APT) shares stormed higher on Wednesday’s session. At market close, the Afterpay share price finished the day up 4.55% to $120.01.

Let’s take a look at today’s share price action from the buy now, pay later (BNPL) giant.

What fuelled the Afterpay share price?

Afterpay did not release any price-sensitive news to justify today’s bullish price action. And as reported by The Motley Fool earlier today, Afterpay shares have been the subject of some varied broker coverage of late.

But as we also covered today, Afterpay shares weren’t the only ASX tech shares feeling the love. The S&P/ASX 200 Info Tech Index (ASX: XIJ) finished the day 2.82% higher which followed a solid night of trading over on the tech-heavy Nasdaq Composite (NASDAQ: .IXIC).

What else has been happening?

Despite being a market darling last year, the Afterpay share price has had a paltry start to 2021.

Since the start of the year, shares in the company have jumped around in a wide trading range. As a result of the volatility, the Afterpay share price is currently only slightly up on the $119 at which it started the year.  

Having been sold-off in May, Afterpay shares enjoyed somewhat of a comeback during June and have gained 27% over the past month. Included in these gains was a boost late last month after the company announced further expansion into the US.

Afterpay advised that its ‘one-time’ card will be extended for US customers. As a result, customers will be able to shop at retailers such as Amazon.com, Inc. (NASDAQ: AMZN), Nike Inc (NYSE: NKE) and Target Corporation (NYSE: TGT).

The post The Afterpay (ASX:APT) share price stormed 5% higher today appeared first on The Motley Fool Australia.

More reading

• These ASX 200 tech shares are beating the broader market today
• Why Afterpay, Challenger, MyDeal, & St Barbara shares are charging higher
• Here’s what leading brokers are saying about the Afterpay (ASX:APT) share price in July 2021
• ASX 200 up 0.55%: Challenger jumps, Nanosonics sinks
• Got Sezzle (ASX:SZL) shares? What’s in store for FY22?

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, Amazon, and Nike. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia has recommended Amazon and Nike. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Healius Ltd (ASX: HLS) shares finished today’s session in the green, after setting a new 5-year high during intraday trading. The Healius share price jumped to an intraday high of $4.73, before retracing back down to close at $4.67 — 1.74% higher for the day.

Let’s take a look at some of today’s share price action for the Australian healthcare company.

Market insights from today’s session

The Healius share price climbed more than 3% from the open during today’s session, beating the previous 52-week high it set on 30 June.

Trading was flat in the first hour of activity, however, the share price action began around 11:00 a.m, with a move from $4.59 to $4.73 intraday, before trending sideways and then slightly lower at the close.

Today’s gains marked the highest level for Healius shares since mid-2015.

Trading volume today came in at around 2.5 million shares exchanging hands, which was well above the 20-day average volume-at-time (AVAT).

What could be behind today’s gains?

Whilst there was no market-sensitive information specific to the company released today, on 5 July investment banking giant Macquarie increased its price target by ~3% to $4.85 in an equity research report.

The ratings upgrade came following a similar update from JP Morgan on 30 June. In that report, the broker called for a $4.75 price target, which Healius shares almost hit today.

Further, a block trade of 2.14 million Healius shares, which equals 0.4% of the float, was traded today at a value of $10.1 million.

This caps off two block trades for Healius shares over the last two weeks. Block trades can impact a company’s share price through their large volume and order flow.

Healius share price snapshot

Finishing in the green over the previous 5 days, the Healius share price has extended its run year to date, posting gains of 25% since the start of the year.

Over the past 12 months, Healius shares have returned around 51%, outpacing the 22% returns of the S&P/ASX 200 Index (ASX: XJO) over the same period.

At the current market price, Healius has a market capitalisation of around $2.9 billion with a dividend yield of around 1.95%.

The post The Healius (ASX:HLS) share price hit a new 5-year high today appeared first on The Motley Fool Australia.

More reading

• How these top ASX biotech shares performed in FY21
• 2 ASX healthcare shares analysts rate highly
• 2 ASX shares hitting record highs this week

Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Burley Minerals Ltd (ASX: BUR) share price has hit the ASX boards running on Wednesday.

Earlier today, the iron ore and base metals explorer and developer’s shares rocketed as much as 105% to a high of 41 cents.

The Burley Minerals share price eventually closed the day 87.5% higher than its listing price at 37.5 cents.

Why did the Burley Minerals share price rocket higher?

Investors were bidding its shares higher today following the completion of its initial public offering (IPO). They appear to see a lot of potential in the company’s Yerecoin Project in Western Australia.

The Yerecoin Project comprises two exploration licenses that cover 105.5 km2 of land close to the exciting Julimar Project owned by Chalice Mining Ltd (ASX: CHN).

According to its prospectus, exploration activities to date have defined significant JORC-compliant magnetite resources within the project totalling 247 Mt @ 29.9% Fe producing a 68.1% Fe concentrate.

In addition, it notes that a number of historical studies have also been completed and the potential for “Julimar Style” PGE-Cu-Ni mineralisation has also been established.

Given how the Chalice Mining share price is up 650% over the last 12 months thanks largely to successful exploration at Julimar, investors appear optimistic the same could happen to the company’s shares if it has similar successes.

The Burley Minerals IPO

Burley Minerals raised $6 million via the issue of 30,000,000 shares at a price of $0.20 each. This gave it a market capitalisation of $12.2 million.

However, with the Burley Minerals share price charging higher today. Its market capitalisation has now climbed to almost $23 million.

The funds raised from the IPO will support current drilling of the western limb of Yerecoin Main. Management notes that there is immediate potential to extend and upgrade magnetite resources at Yerecoin Main and Yerecoin South.

There is also the potential for discovery of additional magnetite resources. Management highlights that there is an eye-shaped magnetic feature requiring investigation for presence of ultramafics and magnetite mineralisation.

This could make it one to watch in the coming months.

The post Burley Minerals (ASX:BUR) share price rockets 105% after IPO appeared first on The Motley Fool Australia.

More reading

• Why did the Austco Healthcare (ASX:AHC) share price rocket 15% today?
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• 2 excellent ASX tech shares named as buys
• Here are 3 of the most traded ASX 200 shares today
• Neometals (ASX:NMT) share price slips 8% following project review

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

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Shares in Austco Healthcare Ltd (ASX: AHC) were soaring today following a recommendation by Andrew Page, founder of share market research business Strawman. By market close, the Austco share price was trading at 15.5 cents – 14.81% higher than yesterday’s close.

However, earlier this afternoon, Austco shares were up by more than 18%, swapping hands for a 52-week high of 16 cents apiece intraday.

Austco is a microcap creating healthcare communication solutions. One of its major solutions is a nurse call system which it believes is the most advanced of its kind. It also provides a reporting and analytics platform for nurse call data and a mobile platform for its nurse call solution.

Let’s take a look at what Page had to say about Austco Healthcare today.

ASX pile-in

This afternoon, Page appeared on television program ausbiz stating he believed Austco shares could be a “‘life-changing stock”.

According to a Twitter Inc user, after Page’s appearance, the number of trades involving Austco shares increased 15 times over.

Really silly for people to pile in like that

— Andrew Page (@sage_simian) July 7, 2021

https://platform.twitter.com/widgets.js

Page replied to the Twitter user saying it was “really silly for people to pile in like that”.

In the program, Page commented on the risks associated with investing and noted the additional risks involved with investing in small companies. Of his recommendation, he said:

[picking a ‘life-changing’ stock] is a game that you have to go to the risky end of the spectrum… It’s an area where you only get 3 or 4 out of 10 [recommendations] right.

He went on to explain why he believes Austco shares make a solid investment for his own portfolio, saying:

This is a profitable company. They’re making about $3 million in profit. No debt. $6 million in cash. High inside ownership…. I think they’ve got a lot of potential here. If they can keep implementing these solutions [and] continuing to win, there’s a lot of upsides.

Those interested can watch the entire segment here.

Austco Healthcare share price snapshot

Thanks in part to today’s gains, the Austco share price is sitting more than 56% higher than it was at the beginning of 2021. It has also gained around 96% since this time last year.

The company has a market capitalisation of around $44 million, with approximately 284 million shares outstanding.

The post Why did the Austco Healthcare (ASX:AHC) share price rocket 15% today? appeared first on The Motley Fool Australia.

More reading

• Here’s why the Austco (ASX:AHC) share price is rocketing 12% today

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. owns shares of and has recommended Twitter. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Commonwealth Bank of Australia (ASX: CBA) share price is currently trading at around $100. Could the major ASX bank be worth looking at after its strong run?

Over the last 12 months the CBA share price has risen by 41% and the last six months has seen a share price rise of 16% over the last six months.

What’s the latest from the bank?

The last price sensitive announcement from the big four ASX bank was the news of the sale of its general insurance business, CommInsure General Insurance, to the Hollard Group. It has established an exclusive 15-year strategic alliance with Hollard for the distribution of home and motor vehicle insurance products to CBA’s retail customers in Australia.

The consideration includes $625 million of upfront consideration, together with deferred payments. CBA will also continue to earn income on the distribution of home and motor insurance products. A pre-completion dividend is also expected to be received.

This sale is expected to increase its common equity tier 1 (CET1) capital by approximately $400 million, or 9 basis points. It’s estimated to result in a post-tax gain on sale of approximately $90 million, which includes estimated post-tax separation and transaction costs of approximately $130 million.

In terms of the actual CET1 ratio, it was 12.7% at the end of the quarter ending 31 March 2021.

The third quarter of FY21 saw the bank generate $2.4 billion of statutory net profit after tax (NPAT). It also saw cash net profit from continuing operations of $2.4 billion in the quarter, up 24% from the FY21 first half quarterly average, mainly driven by lower loan impairment expenses.

CBA saw income up 2% with above system core volume growth, improved margins and higher non-interest income partly offset by the impact of two fewer days. However, expenses were up 1% excluding remediation costs (and 2% including remediation costs).

Profit was significantly helped by a lower loan expense. An improved economic outlook resulted in a reduction in collective provisioning levels. However, CBA said that provision coverage remains strong and continues to reflect a cautious approach to managing risks as the economic recovery from COVID-19 continues.

Should investors look at the CBA share price?

Morgans doesn’t think that CBA shares represent good value when compared to the other big four banks of Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group Ltd (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB).

Whilst the broker is positive on the improving outlook for the major banks and strengthening financials, the CBA share price has risen too far. That’s why its price target is $76, which implies that the CBA share price could fall by over 20% over the next 12 months if Morgans is right.

Looking ahead to FY22, Morgans thinks that CBA will pay a dividend of $4.17 per share, equating to a forward grossed-up dividend yield of 6%.

On Morgans’ numbers, CBA is valued at 18x FY22’s estimated earnings.

The post Is the CBA (ASX:CBA) share price worth buying at $100? appeared first on The Motley Fool Australia.

More reading

• CBA (ASX:CBA) economists expect inflation sooner than RBA
• Forget CBA! Here are the 5 best performing ASX bank shares of FY21
• Leading brokers name 3 ASX shares to sell today
• Here’s what leading brokers are saying about the Commonwealth Bank of Australia (ASX:CBA) share price in July 2021.
• PEXA (ASX:PXA) share price jumps to new heights on first ‘normal’ trading day

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 Bruce Jackson.

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