Tag: Motley Fool

The A2 Milk Company Ltd (ASX: A2M) share price could come under pressure on Wednesday.

This is because the infant formula company has just released an update, which reveals that trading conditions have not been favourable in the daigou channel.

A2 Milk share price on watch following shock update

This morning, A2 Milk responded to the release of an update from its dairy processing partner, Synlait Milk Ltd (ASX: SM1).

That update revealed that Synlait Milk has downgraded its full-year earnings guidance by NZ$20 million less than a month after releasing it to the market. It now expects its earnings to be in the range of a NZ$5 million loss to a NZ$5 million profit.

Management blamed this largely on “further advanced nutrition demand reductions, mostly from one of Synlait’s customers, which impact consumer-packaged infant formula volumes and base powder production.”

A2 Milk response

In response to this announcement, A2 Milk has revealed that it has lowered its total forecast production volume needs for English label consumer-packaged infant milk formula by ~1,650 metric tonnes for the period March through to June.

There were three reasons for this reduction. These are significant daigou weakness, inventory buildup, and distribution model adjustments. It explained:

This is mainly due to: continued weakness in the ANZ Daigou / reseller market which is down 49% in the most recently reported quarter from Kantar; the impact of significant cumulative delays in English label consumer-packaged IMF deliveries from Synlait to a2MC over an extended period expected to be fulfilled in 4Q234 resulting in a material amount of inventory arriving within a relatively short period which needs to be managed; and ongoing refinement of the Company’s English label distribution model resulting in more customers and distributors being supplied directly out of Hong Kong and China leading to lower future a2MC and channel inventory requirements.

Guidance unchanged

Despite the above, A2 Milk has reaffirmed its previous guidance for FY 2023.

It continues to expect FY 2023 revenue growth in the low-double digits, with softer English label infant formula sales to be partially offset by continued strong double-digit growth in China label revenue. Though, it does concede that its revenue growth is likely to be at the low end of its previous expectations (ie 10% growth).

Finally, A2 Milk’s EBITDA margin as a percentage of sales is still expected to be similar to FY 2022.

The question now, though, is what will demand look like in FY 2024 and is its inventory buildup a sign of tough times and inventory write-offs ahead? Time will tell.

The post A2 Milk share price on watch following worrying update appeared first on The Motley Fool Australia.

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More reading

• The A2 Milk share price has fallen 16% in around two months: Time to buy?
• Here are the top 10 ASX 200 shares today
• Why have A2 Milk shares come off the boil again?
• Why did the A2 Milk share price crash 12% in March?
• Why is the A2 Milk share price underperforming on Tuesday?

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 A2 Milk. 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 downfall of ASX growth shares over the past 18 months has meant many investors have flocked to the safety of dividend stocks.

However, a high yield does not necessarily make a great investment.

This is because a stock might offer outstanding dividend yields because its valuation has fallen. And a point-in-time yield percentage does not say anything about the future prospects of the business.

So in order to pick an income-producing stock that also has sound business fundamentals, the yield might need to come down a tad from the highest on offer.

8% dividend with excellent growth? Yes, please

SG Fleet Group Ltd (ASX: SGF) is not a name often spoken about, but the company currently offers a chunky dividend yield of 8.15%.

The Sydney company, with a market capitalisation of around $660 million, provides fleet management services.

With a resurgence in private transport since the emergence of COVID-19, the company has posted an impressive performance in recent times.

In fact, during February’s reporting season, SG Fleet shares rocketed 10% in just a couple of hours after posting a 41% leap in half-year profit.

“We have demonstrated the strength of our competitive position and our ability to turn the steady stream of new business opportunities into further customer wins and vehicle orders,” the company announced at the time.

Add to that a 100% franked dividend stream, and you have yourself a handsome income stock in your portfolio.

Another bonus is that currently, the share price is trading about 23% lower than it was a year ago, presenting a tempting buying opportunity.

On CMC Markets, all four analysts covering the fleet manager rate the stock as a buy.

Rules are changing for more efficient vehicles 

Earlier this month, finance expert and accountant John-Louis Judges named SG Fleet as a stock that’s set to benefit from a changing Australian economy.

“Recent changes to the fringe benefits tax for electric and low-emission vehicles in Australia have made it more attractive to lease rather than buy these vehicles, benefiting SGF’s business model,” Judges said in The Bull.

“There is an expected increase in demand for SGF’s services following [a] global… shift towards environmentally friendly vehicles.”

He noted how the company operates in Australia, New Zealand, and the United Kingdom.

“SGF’s global spread indicates a diversified revenue stream, and allows them to weather any economic downturns or market volatility,” he said.

“SGF’s ability to adapt to changing market conditions and strong financial performance make it a sound investment choice for investors who may be looking for long-term growth.”

The post My top high-yield ASX dividend stock to buy in 2023 appeared first on The Motley Fool Australia.

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More reading

• A2 Milk share price on watch following worrying update
• Pro Medicus shares: Bull vs. Bear
• 5 things to watch on the ASX 200 on Wednesday
• Analysts say income investors should buy ANZ and these ASX dividend shares
• Goldman Sachs says buy these ASX 200 shares for passive income

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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Growing shareholder wealth by 50 times in a single lifetime is something very few listed companies can attest to. Believe it or not, ASX healthcare share Pro Medicus Limited (ASX: PME) has achieved this since listing back in the year 2000.

Fast forward to the past year, and the medical imaging software company is still putting the S&P/ASX 200 Index (ASX: XJO) to shame. Shares in the ASX 200 member have flown 27.2% higher, while the benchmark has climbed a lesser 5.5%.

Nevertheless, let’s put the past in the past and focus on what matters most… the future. Assigned with painting the possible path forward, two of our writers have gone to town on whether investing now in Pro Medicus shares makes sense.

Priced to perfection despite a huge rise in interest rates

By Tristan Harrison: Pro Medicus is one of the best businesses on the ASX, in my opinion. Clients seem to love the software offering, it has excellent margins, and recent contract wins have been impressive. I wish I’d bought it a while ago.

Having said that, however, I think a company’s valuation can be a major risk to the investment case. As investors, we’re trying to buy a piece of the profit/cash flow for a price that will reward us in the future.

According to Commsec, Pro Medicus could generate 55.5 cents of earnings per share (EPS) in FY23 and 87.6 cents in FY25. This would put its share price at 113x FY23 and 71x FY25’s estimated earnings.

In a low-interest environment, those would be pricey valuation numbers. Interest rates have shot higher, yet the Pro Medicus share price is where it was at the end of 2021.

But other high-quality ASX shares have fallen hard. Shares in Xero Limited (ASX: XRO), for example, have plunged 35% over the same period, while the Altium Limited (ASX: ALU) share price is down 15% since December 2021.

Arguably, I don’t think the Pro Medicus share price reflects the higher interest rate considering how much growth is priced in.

While I believe the business has a very promising future, there is little room for error when it comes to the share price. That may mean that anything less than perfection is treated harshly by investors. Future success is not guaranteed.

With Pro Medicus having such high profit margins, it could attract competition from other software providers over time, which could slow growth or mean that clients are considering price comparisons. I think this would be bad news for Pro Medicus’ longer-term growth prospects. 

Motley Fool contributor Tristan Harrison does not own shares in Pro Medicus Limited and owns shares in Altium Limited.

What are the bears overlooking in Pro Medicus shares?

By Mitchell Lawler: Let’s address the elephant in the room… there’s no denying that Pro Medicus looks expensive at an earnings multiple of around 130 times. For comparison, the average price-to-earnings (P/E) ratio for the global healthcare services industry is approximately 39 times.

However, Pro Medicus is not your average healthcare services company. Scratch that… Pro Medicus is not your average company, period. When it comes to earnings growth and return on capital, the medical imaging software provider ranks among the top tier — both locally and against US-listed businesses.

Over the past five years, earnings per share have grown at a compound annual growth rate (CAGR) of 45.6% — the ninth highest of all ASX and US-listed companies. Furthermore, its return on capital of 40.7% places it as the 24th most efficient with capital — making it a truly world-class company.

Based on the attractive unit economics of Pro Medicus’ software product, earnings should be able to grow faster than revenue. As such, the all-important metric for the company’s future success is the number of customer deals and deal size.

Historically, the annual value of total deals (in dollar terms) with healthcare groups has followed an upward trajectory of 22% growth per annum, as pictured above.

I believe there is the possibility of Pro Medicus accelerating beyond this rate over the coming five years if it can negotiate contract renewals at an enlarged deal size while also adding new customers.

On top of this, the company has yet to meaningfully develop its presence in the European market, offering another avenue of growth once established.

Lastly, Pro Medicus has built up a sizeable war chest of cash in recent years. The amount tallied up to $94.2 million at the end of 2022.

Although the company’s thick margins are surely attracting competition, its balance sheet should give it the option to either invest in maintaining its leadership or acquire upcoming competitors.

Motley Fool contributor Mitchell Lawler owns shares in Pro Medicus Limited.

The post Pro Medicus shares: Bull vs. Bear appeared first on The Motley Fool Australia.

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More reading

• Why I think it’s a great time to start buying ASX growth shares
• Top brokers name 3 ASX shares to buy next week
• Brokers say these ASX growth shares could generate big returns for investors
• Why ASX tech shares are so much more attractive than US stocks
• Which stocks does Warren Buffett own (and what can ASX 200 investors learn from this)?

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium, Pro Medicus, and Xero. The Motley Fool Australia has positions in and has recommended Pro Medicus and 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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On Monday, the S&P/ASX 200 Index (ASX: XJO) started the week with a small decline. The benchmark index fell 0.1% to 7,322 points.

Will the market be able to bounce back from this on Wednesday? Here are five things to watch:

ASX 200 expected to fall

The Australian share market looks set to fall on Wednesday following a difficult night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 22 points or 0.3% lower this morning. On Wall Street, the Dow Jones was down 1%, the S&P 500 fell 1.6% and the Nasdaq sank 2%. Investors were hitting the sell button after US-based First Republic Bank’s earnings release reignited concerns about the sector.

Oil prices tumble

It could be a tough session for ASX 200 energy shares such as Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) after oil prices tumbled overnight. According to Bloomberg, the WTI crude oil price is down 2.1% to US$77.11 a barrel and the Brent crude oil price has fallen 2.4% to US$80.72 a barrel. This was driven by concerns that rising interest rates could slow economic growth, impacting oil demand.

BHP named as a buy

The team at Morgans has responded reasonably positively to the BHP Group Ltd (ASX: BHP) quarterly update. Its analysts have retained their add rating with a slightly trimmed price target of $50.40. They commented: “3Q23 operational result that was in-line with our estimates while trailing consensus in some areas. Already in accumulate territory, further market jitters could uncover an attractive buying opportunity.”

Gold price edges higher

Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) will be on watch after the gold price edged higher overnight. According to CNBC, the spot gold price is up 0.5% to US$2,009.4 an ounce. The precious metal rose on banking sector concerns.

Buy Telstra shares: Goldman Sachs

The Telstra Group Ltd (ASX: TLS) share price could be great value according to Goldman Sachs. This morning, the broker has reiterated its buy rating with an improved price target of $4.70. Goldman has boosted its earnings estimates to reflect its belief that postpaid mobile plan prices will increase by the full CPI rate (7%), which is more than Goldman was expecting.

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

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More reading

• Lowest ASX bank yield: Are CBA shares still worth it?
• Leading brokers name 3 ASX shares to buy today
• How anyone can turn $20k into $1 million with ASX shares
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Monday

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 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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There are plenty of options for income investors on the Australian share market. This can make it hard to decide which ASX dividend shares to buy for your portfolio.

To narrow things down, I have picked out a couple of dividend shares that analysts are very positive on. Here’s what you need to know:

ANZ Group Holdings Ltd (ASX: ANZ)

The first ASX dividend share for income investors to consider buying is banking giant ANZ.

Thanks partly to its institutional business, the team at Citi believe the bank is on course to deliver a stronger than expected result during the first half.

In light of this, the broker recently put a buy rating and $29.25 price target on its shares. It also named ANZ as its top pick in the banking sector.

Another positive is that Citi expects some big dividend yields from its shares in the near term. It is forecasting fully franked dividends of 166 cents per share in FY 2023 and then 168 cents per share in FY 2024. Based on the current ANZ share price of $24.22, this will mean yields of 6.85% and 6.9%, respectively.

Rural Funds Group (ASX: RFF)

Rural Funds could be another dividend share for income investors to consider buying. It is an agriculture-focused real estate property trust.

With Australia the food bowl of Asia, Rural Funds appears well-positioned for growth over the long-term. Especially given its long-term leases and periodic rental increases.

Bell Potter is positive on the company and has a buy rating and $2.65 price target on its shares.

As for dividends, the broker is forecasting an 11.7 cents per share dividend in FY 2023 and then a 12.2 cents per share dividend in FY 2024. Based on the current Rural Funds share price of $1.97, this represents yields of 5.9% and 6.2%, respectively.

The post Analysts say income investors should buy ANZ and these ASX dividend shares appeared first on The Motley Fool Australia.

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More reading

• Lowest ASX bank yield: Are CBA shares still worth it?
• Why ANZ shares are Citi’s ‘top pick’ in the ASX 200 banking sector
• Building wealth through dividend investing: 5 ASX shares to boost your income
• Passive income plan: I’d invest $100 a week in ASX 200 shares to earn $7,500 of annual dividends
• 5 reasons I’m still positive about this ASX 300 share despite the 40% drop

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 Rural Funds 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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Are you looking for ASX 200 dividend shares to buy? If you are, you may want to check out the two listed below that Goldman Sachs has tipped to provide attractive yields.

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

Elders Ltd (ASX: ELD)

The first ASX 200 dividend share that Goldman rates as a buy is agribusiness company, Elders.

Its analysts are very positive on the company’s outlook and feel that recent weakness has created a buying opportunity for investors. Particularly given its belief that “the fundamentals of this company remain unchanged, and strong” and that “ELD is very well positioned to grow through the cycle.”

The broker currently has a buy rating and $13.20 price target on the company’s shares at present.

As for dividends, Goldman is forecasting fully franked dividends per share of 47 cents in FY 2023 and 52 cents in FY 2024. Based on the current Elders share price of $8.39, this will mean yields of 5.6% and 6.2%, respectively.

Westpac Banking Corp (ASX: WBC)

Another ASX 200 dividend share that has been named as a buy by Goldman Sachs is banking giant Westpac.

Its analysts highlight that “while NIM pressures are accelerating across the sector, WBC’s shorter-duration replicating portfolio, and current balance sheet performance, should see its NIM outperform peers.”

The broker currently has a conviction buy rating and $25.86 price target of the banking giant’s shares. This compares very favourably to the latest Westpac share price of $22.25.

In addition, it is forecasting some very attractive fully franked dividend yields in the coming years.

For example, Goldman Sachs expects fully franked dividends of 144 cents per share in FY 2023 and then 150 cents per share in FY 2024. This equates to yields of 6.5% and 6.75%, respectively.

The post Goldman Sachs says buy these ASX 200 shares for passive income appeared first on The Motley Fool Australia.

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More reading

• Lowest ASX bank yield: Are CBA shares still worth it?
• Building wealth through dividend investing: 5 ASX shares to boost your income
• Brokers name 3 ASX shares to buy now
• Can Westpac shares really deliver 15% upside AND a 6% dividend yield?
• These are the best ASX 200 bank shares to buy: brokers

Motley Fool contributor James Mickleboro has positions in Westpac Banking. 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 Elders and Westpac Banking. 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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Commonwealth Bank of Australia (ASX: CBA) shares have been one of the ASX’s most popular constituents ever since the bank was privatised in the 1900s. Today, CBA is the undisputed king of the pile when it comes to ASX 200 bank shares.

With its market capitalisation of almost $170 billion, only BHP Group Ltd (ASX: BHP) can boast of beating CBA when it comes to Australia’s largest listed company.

But one thing stands out when comparing CBA to its fellow ASX 200 bank shares. And it’s the first metric most ASX investors look at when analysing an ASX bank: the dividend yield.

Right now, CBA shares have a trailing dividend yield of 4.2%. That’s fully franked, of course. This yield stems from CBA’s last two dividend payments, which together came to $2.10 per share.

Now 4.2% is nothing to turn one’s nose up against, of course. But it is decidedly on the smaller end of the ASX financial sector yield curve.

For instance, the next ASX 200 bank on the scale is National Australia Bank Ltd (ASX: NAB). It currently offers a dividend yield of 5.24%. Westpac Banking Corp (ASX: WBC) stands at 5.62%, while ANZ Group Holdings Ltd (ASX: ANZ) is sitting at a meaty 6%.

Outside the big four, things get even more interesting still. Bendigo and Adelaide Bank Ltd (ASX: BEN) currently has a trailing yield of 6.36%. And Bank of Queensland Ltd (ASX: BOQ) is sitting on a whopping 7.31% (although this might be in jeopardy).

All in All, CBA’s yield looks a little diminutive compared to all of its peers.

So with that in mind, should ASX investors even bother with CBA shares right now?

Are small-yield CBA shares still a buy today?

Yesterday, the CBA share price closed at $100.11.

As my Fool colleague Bronwyn comprehensively covered last week, that sits fairly close to what the majority of ASX brokers reckon the shares will be in a year’s time.

ASX broker UBS currently has a neutral rating on the CBA share price, with a 12-month price target of $100. Morgans is even less optimistic, with a target of just $96.11.

So not a lot of enthusiasm for CBA from ASX brokers right now.

In fact, many brokers are recommending investors go with one of CBA’s big four stablemates. UBS is buy-rated on ANZ shares at the moment, with a $25 share price target instead.

Morgans prefers Westpac and has an add rating on those shares, with a share price target of $25.80. Whereas fellow ASX broker Goldman Sachs picks NAB as its favourite, with a buy rating and a $35.42 share price target.

Not too many ASX experts appear to like the CBA share price right now. But only time will tell whose picks prove to be on the money. 

The post Lowest ASX bank yield: Are CBA shares still worth it? appeared first on The Motley Fool Australia.

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More reading

• Leading brokers name 3 ASX shares to buy today
• Why BHP, InvoCare, Lake Resources, and South32 shares are dropping today
• Better ASX blue-chip share to buy for safe returns: CBA vs. Telstra
• Are Bank of Queensland shares a buy following the latest results?
• Are BHP shares a buy following the ASX 200 miner’s latest update?

Motley Fool contributor Sebastian Bowen has positions in National Australia Bank. 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 Bendigo And Adelaide Bank. The Motley Fool Australia has recommended Westpac Banking. 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:

Bapcor Ltd (ASX: BAP)

According to a note out of Ord Minnett, its analysts have retained their buy rating and $8.40 price target on this auto parts company. The broker has been looking at the recent results of rival Genuine Parts, which owns Repco, and believes it points to strong trading conditions for Bapcor. Particularly given that Genuine Parts revealed that its strong quarter was not driven by promotions or discounts. The Bapcor share price was trading at $6.66 at Monday’s close.

BHP Group Ltd (ASX: BHP)

A note out of Macquarie reveals that its analysts have retained their outperform rating on this mining giant’s shares with a trimmed price target of $52.00. Macquarie felt that BHP’s quarterly update was a touch on the mixed side. Iron ore and metallurgical coal were strong, but copper and nickel were soft. Nevertheless, the broker still sees plenty of value in its shares and expects the OZ Minerals acquisition to give its copper operations a major boost. The BHP share price was fetching $44.17 yesterday.

Whitehaven Coal Ltd (ASX: WHC)

Analysts at Morgans have retained their add rating on this coal miner’s shares with a slightly lowered price target of $9.60. Morgans believes that all the bad news is now priced into Whitehaven Coal shares, making this a very attractive buying opportunity for investors. Particularly given its expectation for 8% dividend yields this year and next. The Whitehaven Coal share price closed yesterday’s session at $7.22.

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 BHP, InvoCare, Lake Resources, and South32 shares are dropping today
• Are BHP shares a buy following the ASX 200 miner’s latest update?
• 5 things to watch on the ASX 200 on Monday
• What is this broker saying about the BHP share price following the miner’s update?
• Here are the top 10 ASX 200 shares 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 recommended Corporate Travel Management. 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 iShares S&P 500 ETF (ASX: IVV) is one of the largest exchange-traded funds (ETF) on the ASX and offers plenty of the things that investors might look for. But, is this a good option for dividend passive income?

For readers that don’t know what the ETF does, it provides investors exposure to the US share market. It is invested in 500 of the largest and most profitable businesses in the US.

The provider of the ETF, Blackrock, charges a management fee of just 0.04%. That enables investors to receive almost all of the returns as net returns. Some active fund managers can charge quite substantial fees which reduces the net returns.

Which US stocks does it own?  

The ETF is invested in many of the world’s strongest and most recognised businesses.

We’re talking about global juggernauts including Apple, Microsoft, Amazon.com, Nvidia, Alphabet, Berkshire Hathaway, Tesla, Meta Platforms¸ Exxon Mobil, Johnson & Johnson, Visa, Procter & Gamble, Mastercard, PepsiCo, Coca-Cola, Pfizer, Costco, McDonald’s and Walmart.

While all of these businesses are listed in the US, I think it’s important to recognise that they generate their earnings globally. But, iShares S&P 500 ETF could be a better way to get exposure to regions like Asia and South America than owning businesses from those regions because the businesses within the ETF are extremely strong.

I think these US stocks are great.

But, we need to remember the way that an ETF acts as a trust structure means that all of the dividends they receive are passed onto investors of the ETF’s units. So, the ETF’s underlying dividend yield is influenced by the dividend yield of the businesses.

The distributions from iShares S&P 500 ETF can be boosted by capital gains within the portfolio if there are any sales that made a profit.

But, fundamentally, the passive income of an ETF relates to the dividend yields of the businesses involved.

Is the dividend yield of iShares S&P 500 ETF good for passive income?

The long-term return of the ETF has been very good as these businesses have grown earnings and re-invested a healthy amount of that profit back into more growth.

Some of the biggest businesses don’t pay a dividend at all, such as Amazon.com, Alphabet and Berkshire Hathaway.

Most of the US businesses that I mentioned above don’t typically have a high dividend payout ratio, and most of them have a relatively high price/earnings (P/E) ratio, so the dividend yield for those businesses is lower.

This results in the iShares S&P 500 ETF having a relatively low dividend yield. According to Blackrock, the 12-month trailing dividend yield as at 31 March 2023 was 1.31%.

So, while I think the ETF offers investors plenty of positives, the passive dividend income is not one of the standouts at all. It would probably be better to go for ASX dividend shares for income-seeking investors.

The post I’m a dividend investor. Should I buy the iShares S&P 500 ETF (IVV)? appeared first on The Motley Fool Australia.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon.com, Apple, Berkshire Hathaway, Costco Wholesale, Mastercard, Meta Platforms, Microsoft, Nvidia, Pfizer, Tesla, Visa, and Walmart. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Johnson & Johnson and has recommended the following options: long January 2024 $47.50 calls on Coca-Cola, long January 2025 $370 calls on Mastercard, and short January 2025 $380 calls on Mastercard. The Motley Fool Australia has recommended Alphabet, Amazon.com, Apple, Berkshire Hathaway, Mastercard, Meta Platforms, Nvidia, and iShares S&p 500 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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A world leader in its field and an 18% rise in the share price already this year.

Sounds pretty good, right? According to multiple experts, it’s still not too late to catch some of that sweet action from Brambles Limited (ASX: BXB).

Wilson Asset Management equity analyst Anna Milne said that the pallet provider is truly an international business.

“Brambles operates in approximately 60 countries with around 360 million pallets, crates and containers in operation.”

She is bullish on the S&P/ASX 200 Index (ASX: XJO) stock after a recent visit to Europe.

“Recent channel checks on an investor trip in London suggest momentum in the business has continued, while opportunities for step-changes in efficiencies should drive growth over the medium term.”

Brambles is reaching a Sliding Doors moment

Milne recognised that in the past the company had struggled to generate positive cash flow. But it could be turning a corner.

“We believe Brambles is nearing an inflection point,” she said in a memo to clients.

“Customer contracts are being repriced significantly higher, lumber pricing has retreated from record levels, customer slowdowns and destocking have been limited in nature and competitors are behaving rationally.”

This change is the potential positive catalyst coming up despite already a steep rise in the share price this year.

“With sentiment towards the name still broadly negative, we don’t expect the stock to reach its full potential until this free cash flow recovery story is confirmed through its reported earnings.”

It’s not just 2023 that the Brambles share price has been climbing. The stock is almost 30% higher than where it was 12 months ago. 

IML portfolio manager Daniel Moore agrees with Milne, last week naming Brambles as one of the hot stocks that can thrive in a high inflation climate.

He said that it and other ASX 200 stocks that are going gangbusters have a couple of attributes in common.

“All those businesses are market leaders,” said Moore.

“And they’re all managing this inflationary environment very well, either exercising pricing power or managing their costs or winning market shares.”

The post ‘Nearing inflection point’: The ASX 200 stock that Wilson’s backing to go to the moon appeared first on The Motley Fool Australia.

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• 3 ASX 200 shares making big moves following quarterly updates
• 4 ASX 200 shares going gangbusters in high inflation (and what they have in common)
• Blue chip beat-down: 5 huge ASX 200 shares cementing new 52-week highs today
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• 3 ASX 200 shares cracking multi-year highs on Tuesday

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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