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If you’re looking for exposure to the banking sector, then Westpac Banking Corp (ASX: WBC) shares could be worth considering.

That’s the view of analysts at Goldman Sachs, which believe the banking giant’s shares could provide investors with strong gains and big dividends.

What’s on offer with Westpac shares?

According to a note released this morning, the broker believes that Westpac shares are trading at a level that makes them very cheap.

In fact, its analysts estimate that “the stock is trading at a 24% 12-month forward PER discount to peers (historically a 3% discount).”

As a result, it sees scope for a significant re-rating from current levels and has retained its conviction buy rating on its shares with a slightly trimmed price target of $25.86.

Based on the current Westpac share price of $22.57, this implies potential upside of 15% for investors over the next 12 months.

But wait, there’s more!

Don’t forget the dividends

Goldman is also expecting the bank’s full-year dividends to increase from $1.25 per share in FY 2022 to $1.44 per share in FY 2023 (and then to $1.50 per share in FY 2024).

This equates to a fully franked 6.4% dividend yield this year based on where Westpac shares are currently trading.

Goldman commented:

We reiterate our Buy recommendation (on CL) on WBC given: i) 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; ii) despite WBC recently revising its FY24E cost target to A$8.6 bn (from A$8.0 bn), the bank’s performance on cost management remains strong in this inflationary environment, and we forecast a 9% step down in underlying costs over the next two years; iii) on our estimates, the stock is trading at a 24% 12-month forward PER discount to peers (historically a 3% discount), and iv) our TP of A$25.86 offers 23% TSR.

The post Can Westpac shares really deliver 15% upside AND a 6% dividend yield? appeared first on The Motley Fool Australia.

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More reading

• These are the best ASX 200 bank shares to buy: brokers
• Which is the best ASX 200 bank share to buy today?
• 2 ASX stocks with a dividend bump coming
• I’d buy 12,000 Westpac shares for $150 in monthly passive income
• Harnessing the power of dividend investing: 2 high-yield ASX shares analysts say are buys

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 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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The BHP Group Ltd (ASX: BHP) share price will be one to watch on Friday.

That’s because the mining giant has just released its third-quarter update.

BHP share price on watch following soft quarter

For the three months ended 31 March, BHP reported the following production:

• Copper production of 405.9kt
• Iron ore production of 59.8Mt
• Metallurgical coal production of 6.9Mt
• Energy coal production of 3.9Mt
• Nickel production of 19.6kt

How does this compare to expectations?

According to a note out of Goldman Sachs, its analysts were expecting quarterly copper production of 435kt, iron ore shipments of 64.7Mt, met coal production of 7Mt, and nickel production of 21.1Mt.

Whereas the consensus estimate was for 432kt, 67.9Mt, 7.4Mt, and 21.7Mt, respectively.

This means BHP has fallen short of what both Goldman and the market were expecting from the Big Australian. This may not bode well for the BHP share price on Friday.

FY 2023 guidance

However, potentially giving the BHP share price some support today was its full-year guidance, which is largely unchanged for both production and costs.

BHP revealed that its production guidance for the 2023 financial year remains unchanged for iron ore, metallurgical coal, and energy coal. Pleasingly, Olympic Dam and Pampa Norte are expected to be toward the upper end of their guidance ranges. Though, BHP Mitsubishi Alliance (BMA) is expected to be at the bottom of its range.

Over at Escondida, its production guidance has been lowered to between 1,050 and 1,080 kt (from between 1,080 and 1,180 kt). However, given the strong performance at the other copper assets, full year total copper production guidance remains unchanged at between 1,635 and 1,825 kt. One slight negative, though, is that full year nickel production has been lowered to between 75 and 85 kt (from between 80 and 90 kt).

As for costs, BHP’s full-year unit cost guidance remains unchanged. Though, Escondida and WAIO are expected to be at the top of their respective ranges.

BHP’s CEO, Mike Henry, spoke positively about demand. He commented:

Recent engagements with customers in China and India have reaffirmed our positive outlook for commodity demand, with China’s economic rebound and solid momentum in India’s steelmaking growth helping to offset the impact of slowing growth in the US, Japan and Europe

Finally, the Big Australian revealed that it has identified a new copper porphyry mineralised system, Ocelot, in the Miami-Globe copper district in Arizona, United States.

The post BHP share price on watch following third-quarter update appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• Which stocks does Warren Buffett own (and what can ASX 200 investors learn from this)?
• ASX 200 mining shares sink as iron ore price nears 2023 low
• BHP shares: Bull vs. Bear
• Why this broker just upgraded BHP shares to a buy rating

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.

from The Motley Fool Australia https://www.fool.com.au/2023/04/21/bhp-share-price-on-watch-following-third-quarter-update/

If you’re looking for dividend shares to buy this week, then the two listed below could be worth checking out.

Both are from very different sides of the market but have a couple of things in common – buy ratings from brokers and attractive forecast dividend yields.

Here’s what you need to know about them:

Macquarie Group Ltd (ASX: MQG)

This investment bank could be an ASX 200 dividend share to buy right now according to analysts at Morgans.

The broker currently has an add rating and $222.80 price target on the company’s shares, which implies potential upside of over 22% for investors from current levels.

Morgans believes Macquarie is a top pick for investors and has it on its best ideas list again this month. This is due to its long term growth potential, with the broker commenting:

We continue to like MQG’s exposure to long-term structural growth areas such as infrastructure and renewables. The company also stands to benefit from recent market volatility through its trading businesses, while it continues to gain market share in Australian mortgages.

In respect to dividends, the broker is expecting partially franked dividends of $8.28 per share in FY 2023 and $7.64 per share in FY 2024. Based on the current Macquarie share price of $181.63, this will mean yields of 4.55% and 4.2%, respectively.

South32 Ltd (ASX: S32)

Another ASX 200 dividend share that has been named as a buy is South32.

It is one of Australia’s largest miners with exposure to a range of commodities including aluminium, copper, manganese, and nickel.

Goldman Sachs is positive on South32 and has a buy rating and $4.90 price target on the mining giant’s shares. It highlights the company’s “improving FCF outlook on higher production & commodity prices (base metals and met coal).” It adds:

We assume the share buyback continues (at ~US$250mn p.a) and S32 pays out 50% of earnings (40% ordinary, 10% special dividend component) with the FY23 full year result. On our estimates, S32 is on a supportive dividend yield of c. 5% in FY23, increasing to 14% in FY24.

In respect to dividends, as mentioned above, Goldman is expecting fully franked yields in the region of 5% in FY 2023 and then 14% in FY 2024.

The post Banking and mining: Analysts say these ASX 200 dividend shares are buys appeared first on The Motley Fool Australia.

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More reading

• 5 reasons Macquarie shares could be a great investment today
• Get big gains and huge dividends from these ASX 200 mining shares: brokers
• ‘Buying opportunity’: 2 ASX 200 shares to grab before they rocket
• Best ASX dividend share to buy now: Rio Tinto vs. Macquarie Group
• Buy these ASX dividend shares now: analysts

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 Macquarie 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 has been only one group of investors doing well with Brainchip Holdings Ltd (ASX: BRN) shares in recent times – short sellers.

As readers may be aware from our weekly updates, short interest in this struggling semiconductor company has been increasing in 2023.

So much so, earlier this week we reported that it was the 10th most shorted ASX share with 7% of its shares in the hands of investors.

Unfortunately for shareholders, short sellers have since increased their interest to 7.15% since then according to data provided by ASIC.

This appears to indicate that short sellers don’t believe Brainchip shares have bottomed out yet. That’s despite them being down almost 60% over the last 12 months, as you can see on the chart below.

Why are short sellers targeting Brainchip shares?

While short sellers haven’t gone public with their short thesis, it isn’t hard to see why they may be licking their lips when they see Brainchip’s shares and its almost $800 million market capitalisation.

Here is a company that has promised the world for years and delivered nothing but a ballooning share count from capital raisings and overly generous performance rights.

According to CommSec, back in 2014, the company had 220 million shares outstanding. As per an update this week, this number has increased to just under 1.8 billion shares.

But it won’t stop there! Brainchip has just announced the date of its annual general meeting and will ask shareholders to vote on the granting of further restricted stock units and performance rights. This includes approximately 2.3 million units to its CEO, Sean Hehir, who has helped Brainchip deliver less revenue than a cafe in the Melbourne CBD since joining the company.

And this won’t be the first time he has been granted shares. Last year he was granted 2 million shares and then sold almost half of them soon after, as covered here.

Will Brainchip’s revenue ever justify its market cap?

While Brainchip certainly has a large addressable market, it has been struggling to turn discussions into sales. It also recently admitted, in many respects, that its previous Akida platform was not good enough for its market.

Management advised that it listened to customer feedback and launched a new platform last month. If this one doesn’t generate meaningful revenue, maybe the company never will.

Especially given the fierce competition it faces in an industry where tech giants spend billions on research and development each year.

And while Brainchip claims to have the leading technology in the edge AI industry, you have to wonder if a major customer would truly trust something largely unproven and without a significant support network? Could Brainchip deal with a mass recall, for example? It could be more likely that a major customer would rather settle for a slightly inferior product from a trusted tech giant like IBM or Nvidia than a risky proposition like Akida.

Time will tell if this is the case, but the smart money is clearly betting against this meme stock.

The post How ASX short sellers have been cashing in on BrainChip shares in 2023 appeared first on The Motley Fool Australia.

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More reading

• Why Brainchip, Domain, Star, and Tietto shares are dropping today
• Capital deities and destroyers: The best and worst at putting money to work among ASX 200 shares
• These are the 10 most shorted ASX shares this week
• Why did the Brainchip share price crash 36% in the first quarter of 2023?
• These are the 10 most shorted ASX shares this week

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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S&P/ASX 200 Index (ASX: XJO) coal stocks are trading at some very attractive trailing dividend yields.

Which means investors looking to build up some handy passive income shouldn’t ignore this sector.

Today we’ll examine two leading coal shares I’d look to tap for $100 a month in passive income.

Namely New Hope Corp Ltd (ASX: NHC) and Whitehaven Coal Ltd (ASX: WHC).

Now before moving on, there are a few things to bear in mind.

Cyclical stocks pay cyclical yields

First, the yields we’re discussing stem from the dividend payments of the past 12 months. Future years could see the ASX 200 coal stocks trading at higher or lower yields.

That will in large part depend on the price of coal.

Which is the second thing to bear in mind.

New Hope and Whitehaven, and their shareholders, have benefited enormously from rocketing coal prices. Thermal coal traded at all-time highs in September last year. The coal price has retraced since those highs but remains well above historic levels.

Now, global demand for coal is widely forecast to remain strong relative to supplies over the coming years. But ASX 200 coal stocks do operate in a cyclical market. Meaning the annual passive income they deliver will likely fluctuate as well.

With that said…

How I’d mine $100 a month in passive income from these ASX 200 coal stocks

On the back of rocketing revenues and profits, Whitehaven Coal paid out an all-time high final and all-time high interim dividend over the past 12 months, both fully franked.

Eligible Whitehaven stockholders will have received 40 cents per share on 16 September and another 32 cents per share in passive income on 10 March. That’s a total dividend payment of 72 cents per share.

At Whitehaven’s closing share price of $6.97 per share on Thursday, that works out to a trailing yield of 10.3%.

Atop those dividend payouts, the Whitehaven share price is up 45% over the past 12 months.

Which brings us to rival ASX 200 coal stock, New Hope.

Like Whitehaven, New Hope also enjoyed a big lift in revenue and profits. And the coal miner also paid out a record-high final and interim dividend, also 100% franked.

Eligible New Hope shareholders will have received a final dividend of 56 cents per share on 8 November. New Hope’s interim dividend of 40 cents per share will hit stockholders’ bank accounts on 3 May. The miner’s shares traded ex-dividend on Monday, 17 April.

At New Hope’s closing share price of $5.21 yesterday, the total dividend payout of 96 cents per share equates to a juicy trailing yield of 18.4%.

Atop that passive income, the New Hope share price is up 56% over the past 12 months.

How much to invest?

Assuming I buy the same number of shares in both ASX 200 coal stocks, my average yield works out to 14.4%.

That means for $100 a month in passive income (or $1,200 per year) I’d need to invest $8,362 and change.

Alternatively, I could invest $697 a month over the year across the two ASX 200 coal stocks.

Both strategies will get me towards my goal.

The post How to mine $100 a month in passive income from 2 ASX 200 coal stocks appeared first on The Motley Fool Australia.

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More reading

• Capital deities and destroyers: The best and worst at putting money to work among ASX 200 shares
• Broker names 2 high yield ASX dividend shares to buy
• Here are the top 10 ASX 200 shares today
• Guess which ASX 200 energy stock insiders have been buying up big in April
• Leading brokers name 3 ASX shares to buy today

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

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After rocketing up the last few years, ASX lithium shares have struggled over the past six months or so.

However, Liontown Resources Ltd (ASX: LTR) seems to be an outlier, rising by a phenomenal 120% year to date.

Liontown shares closed Thursday at $2.72 a piece after starting the year at $1.23 a share.

So is it too late to buy? Has it had its run or is there more to come?

Let’s take a look at what’s happening.

Suitor rejected twice, but could be back

The most significant driver behind the spectacular ascent of Liontown shares is the takeover interest from Albemarle Corporation (NYSE: ALB).

It was revealed in late March that the US company made several takeover approaches to Liontown, making bids for $2.20 and $2.35 per share in October and March respectively.

The Liontown board rejected the proposal both times, calling them “opportunistic”.

But the mere demand for the business sent the shares exploding 59% higher on 28 March.

Investors apparently think this story is not over yet and that there could be further bids from a frustrated Albemarle.

Even if the takeover doesn’t eventuate, the fact that another corporation was willing to buy Liontown at almost double the undisturbed share price indicates what sort of future it thinks the lithium miner has.

Long-term demand for lithium

So is it worth joining in this chorus of enthusiasm for Liontown?

The professional investment community is divided.

According to CMC Markets, three out of nine analysts currently covering the stock reckon it’s not just a buy, but a strong buy.

However, the remaining six analysts think it’s best to hold Liontown.

UBS is one team that’s bullish on the lithium stock. This week it raised its target share price to $2.80.

Despite the waning commodity price for the battery ingredient, eToro market analyst Josh Gilbert reckons the long-term thirst for lithium cannot be denied.

“Electric vehicle adoption has really only just begun and has a long runway, with lithium demand only set to increase in the years ahead,” he said earlier this month.

“According to Bloomberg, lithium-ion battery demand is expected to more than double in 2023 from 2020 levels, whilst EV sales look set to increase by more than 30% in 2023.”

The post After more than doubling this year, can the Liontown share price keep rising? appeared first on The Motley Fool Australia.

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More reading

• Why did Pilbara Minerals shares charge higher today?
• Here’s the latest forecast for ASX 200 lithium stocks from UBS
• Here are the top 10 ASX 200 shares today
• Up 80% in a month, Liontown share price smashes all-time high on Tuesday
• Morgans says the Pilbara Minerals share price can rise 40%

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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It certainly has been a tough 12 months for Core Lithium Ltd (ASX: CXO) shares.

Despite the company graduating from lithium developer to miner, its shares have been hammered and are down 30% over the period. This can be seen on the chart below.

Is this a buying opportunity or will Core Lithium shares keep falling?

Opinion remains divided on where Core Lithium shares are going from here. This makes it a risky proposition for investors.

For example, over at Goldman Sachs, its analysts believe the Core Lithium share price could fall as low as 80 cents. So, with its shares currently fetching 98 cents, this implies potential downside of just over 18% for investors.

The broker believes its share price “remains ahead of fundamentals despite the recent resource increase, in our view, trading at 1.3x NAV or pricing ~US$1,470/t LT spodumene (peer average ~US$1,100/t).”

The team at Macquarie don’t agree with this view. In response to last week’s mineral resource upgrade, its analysts retained their outperform rating with an improved price target of $1.20. This suggests that Core Lithium shares could rise over 22% from current levels.

Finally, over at Morgans, its analysts are sitting on the fence and believe the lithium miner’s shares are fairly valued now. The broker has a hold rating and $1.00 price target, which is just a touch ahead of where they trade today.

In addition, its analysts recently looked into whether Core Lithium could be a takeover target along with Liontown Resources Ltd (ASX: LTR). However, it feels this is unlikely. The broker thinks “a takeover bid is less likely given the smaller resource size, higher EV / resource and likely higher cost operations.”

Time will tell which broker makes the right call on Core Lithium shares.

The post Should I buy the 30% dip on Core Lithium shares or have they got further to fall? appeared first on The Motley Fool Australia.

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• Why did Pilbara Minerals shares charge higher today?
• Here are the top 10 ASX 200 shares today
• Top brokers name 3 ASX shares to buy today
• Here’s the latest forecast for ASX 200 lithium stocks from UBS
• 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Fortescue Metals Group Ltd (ASX: FMG) share price is ahead of the benchmark over the past year, but is it still worth buying?

Shares in the Australian iron ore miner are 4.3% better off than this time last year, as shown below. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is down roughly 3%. The return from the Andrew Forrest-led company is also healthier than similar ASX-listed peers.

After diverging from the market’s trajectory, is Fortescue primed to run further — or could it be time to look elsewhere for outperformance?

We took this question to two of our team to gather some perspective on both sides of the tape. Read on to find out where this instalment’s bull and bear agree and disagree on the path forward for Fortescue.

Carving out a spot in the portfolio for Fortescue shares

By Tristan Harrison: Fortescue shares have performed well over the last six months. Certainly, it would have been much better to buy half a year ago at a price under $18 compared to today’s valuation. Fortescue shares closed on Thursday at $22.42 a share.

However, I believe the business can perform better than expected from here.

Firstly, no one knows what iron ore prices are going to do next month or next year. If we went back 12 months and looked at where brokers thought the Fortescue share price would be or what the dividend payout ratio could fall to we’d see that some of those predictions haven’t eventuated.

Undoubtedly, Fortescue has been helped by the stronger iron ore price, which is currently sitting at around US$120 per tonne, displayed below.

The iron ore price could continue to be stronger than expected, partly helped by improving Australia-China relations. A better-than-expected iron ore price could mean stronger profits, stronger dividends, and enable more funding for Fortescue Future Industries (FFI).

Fortescue is also close to production for the Iron Bridge project. This could add millions of tonnes to its total output, which would boost earnings. In the longer term, it’s looking to diversify its production by expanding into African iron.

The ASX mining share is also looking to produce green hydrogen and green ammonia, which would be emission-free fuel for heavy machinery, boats, and perhaps planes.

It’s progressing a number of potential green energy projects around the world, with multiple projects expected to advance this year. FFI has already signed multiple agreements with prospective energy customers, with Europen energy giant E-ON being the biggest so far.

The price tag of its green energy efforts may be less intimidating when we take into account comments by FFI boss Mark Hutchinson to the Australian Financial Review. Hutchinson said that FFI could/”will” sell equity stakes in its green hydrogen projects, which would reduce the amount of capital Fortescue needs to set aside. I think this could enable a better-than-expected dividend payout ratio.

Fortescue boss Andrew Forrest has previously revealed investment banks have suggested that FFI could already be worth US$20 billion if it were listed, and that potential value isn’t recognised on Fortescue’s balance sheet. 

Motley Fool contributor Tristan Harrison owns shares in Fortescue Metals Group Ltd.

Why be a bear about it?

By Brooke Cooper: To begin, I agree with Tristan; Fortescue’s hydrogen and green energy efforts could lead to a dazzling future for the company. However, I believe its planned transformation could come at a high cost for both it and new investors.

While hydrogen and green energy offer mountains of potential, becoming a leader in the space also demands mountains of cash.

Fortescue has in place a $9 billion plan to decarbonise its Pilbara operations by 2030. Most of that investment is slated to be spent between financial year 2024 and financial year 2028. Key to the scheme is Fortescue Future Industries (FFI).

The operation can be allocated up to 10% of the iron ore miner’s net profit after tax (NPAT). It’s expected to demand between US$500 million and US$600 million of operating expenditure and US$230 million of capital expenditure this financial year.

What might this spending mean for investors? Well, such transformational growth will take time. Meanwhile, the company’s dividends could bear the brunt of its green ambitions.

Indeed, Goldman Sachs expects the ASX 200 iron ore miner to drop its dividend payout ratio and raise additional debt to fund its green ambitions.

Looking forward, the broker forecasts the company will hand out US$1.82 per share in dividends this fiscal year, US$1.10 next fiscal year, and 79 US cents in fiscal year 2025.

At that rate, Fortescue’s dividend yield could more than halve over the next two financial years, considering its current share price and today’s exchange rate.

But the company is, of course, an iron ore miner at heart. On that front, the broker recently found it’s more expensive on a price-to-net-asset-value (NAV) ratio than its major peers.

Take a look:

ASX 200 iron ore miner	Price to NAV
BHP Group Ltd (ASX: BHP)	0.95 times
Rio Tinto Ltd (ASX: RIO)	0.85 times
Fortescue Metals Group	1.44 times

All in all, I think Fortescue’s green ambitions have the potential to provide strong returns in the future. However, I don’t think the risk-to-reward ratio currently on offer is worthwhile.

Motley Fool contributor Brooke Cooper does not own shares in Fortescue Metals Group Ltd, BHP Group Ltd, or Rio Tinto Ltd.

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

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• Passive income in Australia: How I’d invest in ASX 200 shares to easily earn $20 per day

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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With share prices notoriously volatile and economic uncertainty striking fear into investors, it’s no surprise many people are seeking the comfort of dividend shares.

But with the ASX packed with dividend payers, which one to choose?

You won’t want to end up with a “dividend trap” that only has a high yield because of a falling share price, or a flailing business that could suddenly cut its distributions.

Here is one suggestion that could avoid all those pitfalls:

How does $350 monthly income sound?

New Zealand company Fletcher Building Ltd (ASX: FBU) is a construction materials provider that’s listed on the ASX.

The stock is currently paying out a handy dividend yield of 8.4%.

Not only that, the latest reporting season showed that the business seems to be heading in the right direction.

“The company reported revenue of $4.3 billion, up 5% on the pcp of 1H FY22,” said The Motley Fool’s Bronwyn Allen in February.

“Earnings before interest and tax before significant items totalled $360 million, up 8%, with an improved EBIT margin of 8.4%.”

Being a foreign company, no franking credits are given.

But even with an unfranked 8.4% yield, a $50,000 investment would provide shareholders with a $350 monthly income.

The outlook for construction stocks

Amid worries about rising interest rates impacting the construction industry, the Fletcher Building stock price has admittedly dropped 3.7% year to date.

However, Wilsons equity strategist Rob Crookston said last week the negative sentiment towards housing could make it a perfect contrarian play right now.

“The macro is starting to shift in the US and in Australia, with central banks looking close to the end of tightening cycles,” he said.

“There are strong structural tailwinds behind the US and Australian housing markets.”

There is even speculation that Fletcher could buy out Australian rival CSR Limited (ASX: CSR)

The Kiwi stock is a hit among professional investors at the moment.

Ten out of 14 analysts currently surveyed on CMC Markets rate Fletcher Building shares as a buy. Nine of those reckon it’s a strong buy.

CMC Markets is predicting that Fletcher Building will maintain its dividend yield above 8% for the next year or two at least.

The post This 8.4% ASX dividend stock is my top pick for immediate income appeared first on The Motley Fool Australia.

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More reading

• If house prices have bottomed, should I buy property-related ASX shares?
• Building industry woes and ASX 200 materials shares: What investors need to know
• How I’d invest $20k in ASX 200 shares to earn a second income of $140 a month

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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Looking for an ASX 200 growth share or two to buy? Two that analysts rate as buys this month are listed below.

Here’s what the brokers are saying about them:

Lovisa Holdings Limited (ASX: LOV)

The first ASX 200 growth share that has been named as a buy is this rapidly growing fast fashion jewellery retailer.

When Lovisa released its half-year results in February, it blew the market away with its impressive performance. The company reported a 44.8% increase in revenue to $315.5 million and a 31.9% jump in net profit after tax to $253.2 million.

The good news is that the team at Morgans expects this strong form to continue in the coming years. As a result, the broker has its shares on its best ideas list with an add rating and $28.50 price target. It recently commented:

With ambitious and well-incentivised new leadership in place, we think now is the time LOV steps up to become a global force. [..] Investment will be needed to expand LOV’s network in the US and Europe and to take it into new markets, but the returns could be stellar. We think LOV’s products fill an underserved niche, offering fast fashion jewellery at prices that are attainable to a resilient target demographic.

ResMed Inc. (ASX: RMD)

Another ASX 200 growth share that has been tipped as a buy is ResMed. It is a medical device company with a focus on sleep treatment solutions.

Goldman Sachs is a fan of ResMed and has a buy rating and $38.00 price target on its shares.

Its analysts like ResMed due to its strong position in the sleep treatment market, its huge addressable market, and the benefits of a major competitor product recall. It commented:

The timing/nature of Philips’ re-entry into the market remains an important debate, but under most realistic scenarios we continue to expect an excess demand dynamic through end-2023. Whilst supply shortages and cost inflation mitigated the tailwind from these competitor challenges through FY22, we believe the benefits to RMD are significant, and could continue to accrue over many years. As operational pressures continue to ease we see margin/cost dynamics improving, supporting a favourable earnings trajectory through the long term. We currently model an EPS CAGR of +11% (FY23-26E), with potential upside depending on how competitive/regulatory dynamics develop.

The post These world-class ASX 200 growth shares are buys according to brokers appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• CSL shares dip despite new FDA approval
• ‘Resilient earnings’: Buy 3 ASX 200 shares to win through troubled times
• Which ASX 200 retail share is performing best during high inflation?
• Brokers say these defensive ASX 200 healthcare shares are buys

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

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