Tag: Motley Fool

If you’re a regular reader of The Motley Fool you might be sick of hearing the instruction “buy then hold for the long term”.

But boring you to death with repetition doesn’t make it any less true — especially in volatile times like these.

So you might be surprised that many fund managers and investment advisors like to make short-term predictions much more than long-term forecasts.

That’s because they are measured on their performance on a monthly, quarterly, and yearly basis. They can’t afford to be patient — otherwise they’ll lose customers!

However, one prominent member of the industry recently stuck his neck out.

Nucleus Wealth chief investment officer Damien Klassen this month examined what could happen in the years beyond the current economic downturn.

He then extrapolated those trends into specifically what type of ASX shares investors should buy now to reap massive gains in those years.

Back to the future 

So what will the world look like after the current down cycle?

Klassen, writing on the Nucleus blog, reckons the major deciding factor will be government responses to the coming global recession, downturn, or credit crunch.

“If there are significant direct fiscal interventions, as we saw during the pandemic, then inflation might return.”

But the chances are, according to Klassen, the 2020s will end up “a replay of the 2010s” with low inflation.

“High levels of inequality mean not much demand — the rich save extra income,” he said. 

“Central banks cut interest rates, hoping already leveraged consumers could take out even greater loans. Productivity gains don’t end up in wages.”

Unfortunately, Klassen forecasts that inequality is set to “stay for a while”. 

“In Australia, a left-wing government is increasing tax on low and middle-income earners while cutting the tax paid by the top brackets. It is similar globally. There are no signs of any broad backlash.”

Regardless of the macroeconomics, Klassen reckons there will be a major “game changer” for ASX companies in the next decade.

“The biggest potential positive for earnings is coming through artificial intelligence breakthroughs,” he said.

“The sudden introduction of artificial intelligence to hundreds of millions of people is bound to have significant productivity gains.”

Whether this is seen as a positive or a negative revolution is somewhat subjective.

“The difference vs the 2010s, for an investor, is that this time it is the service industries that look like they will benefit the most from the productivity gains,” said Klassen.

“Or lose the most from job losses, depending on how you want to frame it.”

Not value, not growth, but…

So what does all this mean in selecting ASX shares to buy right now?

Keeping in mind that Klassen is referring to long-term prospects, he advised staying away from value stocks.

“They tend to be the stocks with the least pricing power. Productivity gains will be competed away for most value stocks.”

But that doesn’t mean it’s a wholesale flight to growth either.

“It will be hit-and-miss with this group due to changing business models,” he said.

“But, given we are talking about stocks to buy as economies recover from the recession, it will be worth having some growth in your sights for at least the initial stages of the recovery.”

The common denominator for the stocks Klassen would pick up are that they all represent quality businesses.

“These are the stocks with pricing power, higher margins and better returns on equity.”

There are definitely businesses he would avoid at all costs.

“I would be careful buying intermediaries or wholesalers,” he said.

“The internet has spent the last 20 years trying to disintermediate these companies. Any surviving companies should be worried that improved access to artificial intelligence will finish the job.”

As for sectors, there are a bunch that will benefit from paying for fewer humans in return for the same production: information technology, media, legal, transport, healthcare, and finance.

“Advertising and [copywriting] will have their staff numbers halve for the same output. Media creation will become cheaper and easier,” said Klassen.

“Finance will continue to see job losses in customer service roles. In corporate finance, stock broking and funds management, the rainmakers will be more productive and need less support staff.”

Klassen reminded, though, that there is still plenty of volatility to swim through before these long-term predictions will hit the mark.

“We have a credit crunch to navigate first,” he said.

“But we can clearly see where the next wave of productivity enhancements comes from. And they will likely underpin reasonably significant earnings growth after the credit crunch.”

The post The ASX shares that will win in the long term appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX 200 shares today
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Should I invest in the ASX 200 or the S&P 500?

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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Mineral Resources Ltd (ASX: MIN) shares could offer big returns to investors that aren’t averse to investing in the mining sector.

That’s the view of analysts at Morgans, which have named the mining and mining services company as one of their top picks from this side of the market.

Iron ore looking good

According to the note, the broker believes that iron ore has come out of its slump in great shape. It commented:

While the market remains concerned with comments from the Chinese government around capping steel output at 2022 levels, we note that those levels are quite healthy – particularly when coupled with iron ore supply risks. The pullback in Chinese steel production has not matched the level of market pessimism around China growth, with monthly steel production still around a solid base of 80mt.

China iron ore stockpiles at port remain at healthy levels, suggesting increased iron ore imports are being consumed. On the back of these evolving fundamentals, with iron ore prices demonstrating a higher watermark than we previously expected, we have upgraded our forecasts.

Mineral Resources share price could leap higher

Morgans sees a lot of value in Mineral Resources shares at the current level.

It has an add rating and $106.00 price target, which, based on its current share price of $84.31, implies potential upside of almost 26% for investors.

Making things even better, Morgans is expecting some big fully franked dividend yields in the near future. It estimates that its shares will provide yields of 4.4% in FY 2023 and 8% in FY 2024.

The broker explained why the company is its top pick right now:

MIN is our top pick amongst the iron ore sector, where we see growth from its Onslow Iron project as likely to increase materiality of iron ore to earnings. MIN’s share price has ‘shrugged off’ the disappointing news around the recent gas appraisal well (Lockyer-2). Perhaps suggesting investors do not attribute material value to MIN’s energy prospects (at least relative to the sell-side).

We continue to see MIN as a business that is over half way through a material transformation. Now delivering on its lithium growth objectives, and progressing construction of its Onslow Iron project, we expect MIN to grow group production at 10% CAGR over the next 3 years.

The post Why Mineral Resources shares are a ‘top pick’ for this broker appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Here’s the latest forecast for ASX 200 lithium stocks from UBS
• Get big gains and huge dividends from these ASX 200 mining shares: brokers
• Why Core Lithium, Neuren, Norwest, and Pilbara Minerals shares are pushing higher
• A ‘new entry point’ just opened for 2 ASX 200 shares with strong outlooks

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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Today is a good day to be a Rio Tinto Ltd (ASX: RIO) shareholder.

That’s because, if you’re an eligible shareholder, today you will be receiving the mining giant’s latest dividend payment.

The Rio Tinto dividend

In February, Rio Tinto released its full-year results for the 12 months ended 31 December.

Due to weaker commodity prices and inflationary pressures, the miner reported a 13% decline in revenue to US$55,554 million and a sizeable 41% reduction in net profit after tax to US$12,420 million.

As you might expect, this profit decline put pressure on the Rio Tinto dividend for FY 2022. The mining giant’s board elected to cut its fully franked final dividend by 46% to US$2.25 per share.

This brought the miner’s dividend to a total of US$4.92 per share in FY 2022, which is a 38% reduction on what was paid in FY 2021. Nevertheless, it still equates to a massive total payout of US$8 billion (A$11.9 billion) for the year. To put that into context, this is larger than the market capitalisation of Medibank Private Ltd (ASX: MPL).

That US$2.25 (A$3.35) per share dividend will be landing in bank accounts. Of course, that’s unless you decided to take advantage of the Rio Tinto dividend reinvestment plan.

What’s next?

The good news for shareholders is that Goldman Sachs believes stronger commodity prices and production growth will lead to a rebound in the Rio Tinto dividend in FY 2023.

Its analysts are forecasting a fully franked US$5.39 (A$8.00) per share dividend this year. Based on the current Rio Tinto share price of $123.19, this will mean a hefty 6.5% dividend yield for investors.

The post The latest Rio Tinto dividend is being paid today. Here’s what you need to know appeared first on The Motley Fool Australia.

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More reading

• Why are ASX 200 mining shares like Fortescue smashing the index today?
• Here’s how much I would need to invest in Rio Tinto shares to generate a $100 monthly income
• Lithium, iron ore, and copper: Experts say these ASX 200 mining shares are buys
• Best ASX dividend share to buy now: Rio Tinto vs. Macquarie Group
• 3 reasons the 6% Rio Tinto dividend yield looks safe to me

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

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On Wednesday, the S&P/ASX 200 Index (ASX: XJO) fought hard and recorded the smallest of gains. The benchmark index rose 5.3 points to 7,365.5 points.

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

ASX 200 expected to edge lower

The Australian share market is expected to have a subdued session on Thursday after a mixed night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 1 point lower this morning. In the United States, the Dow Jones fell 0.25%, and the S&P 500 and NASDAQ ended largely flat.

Bank of Queensland results

The Bank of Queensland Ltd (ASX: BOQ) share price will be one to watch today. That’s because the regional bank will be releasing its half-year results this morning. While aspects of its results have been pre-released, the market will be looking for more colour on its margins and outlook. A 20 cents per share interim dividend is expected to be declared.

Oil prices ease

ASX 200 energy shares such as Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a tough session after oil prices pulled back on Wednesday night. According to Bloomberg, the WTI crude oil price is down 2.2% to US$79.10 a barrel and the Brent crude oil price is down 2% to US$83.06 a barrel. A stronger US dollar and recession fears offset news of a large decline in US crude inventories.

Allkem quarterly

The Allkem Ltd (ASX: AKE) share price could be one to watch closely. This morning, the lithium miner is due to release its quarterly update. According to a note out of Goldman Sachs, it expects the company to report a realised spodumene price of US$5,589 a tonne and a lithium carbonate price of US$48,371 a tonne. Goldman expects the latter will be from sales of 4.6kt, which is ahead of the consensus estimate of 4.4kt.

Gold price falls

ASX 200 gold shares Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) could have a poor session after the gold price edged dropped overnight. According to CNBC, the spot gold price is down 0.65% to US$2,006.3 an ounce. Gold fell after bond yields climbed and doubts grew about the US Fed’s rate-hike pause.

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

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More reading

• Why did Pilbara Minerals shares charge higher today?
• Here are the top 10 ASX 200 shares today
• Here’s the latest forecast for ASX 200 lithium stocks from UBS
• Bought $6,000 of Santos stock in 2018? If so, here’s how much dividend income you’ve earned
• 5 things to watch on the ASX 200 on Wednesday

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

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If you’re looking to boost your passive income, then you may want to check out the ASX dividend shares listed below.

Both of these ASX shares have been tipped to provide their shareholders with very attractive dividend yields this year and next. Here’s what they are forecasting:

Dexus Industria REIT (ASX: DXI)

Dexus Industria could be an ASX dividend share to buy this week.

Morgans is positive on the industrial and office property company due to its expectation of solid rental growth backed by strong tenant demand. In addition, the broker highlights that its development pipeline provides near and medium term upside potential.

All in all, the broker expects this to lead to Dexus Industria paying dividends per share of 16.5 cents in FY 2023 and then 16.8 cents in FY 2024. Based on the current Dexus Industria share price of $2.76, this will mean yields of 6% and 6.1%, respectively.

Morgans also sees decent upside ahead for its shares with its add rating and $3.37 price target.

Rural Funds Group (ASX: RFF)

Another ASX dividend share that could be in the buy zone right now is Rural Funds.

It is a property company operating at a very different side of the market to Dexus Industria. Rural Funds owns a portfolio of high quality assets across a number of agricultural industries such as orchards, vineyards, water entitlements, cropping, and cattle farms.

Bell Potter is positive on its outlook and expects some attractive dividend yields in the coming years. It 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 $1.95, this represents yields of 6% and 6.25%, respectively.

Bell Potter has a $2.65 price target on its shares.

The post Analysts say these ASX shares will give you a passive income boost appeared first on The Motley Fool Australia.

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More reading

• Need passive income? Turn $5,000 into $25 every month with these ASX shares
• How I’d invest $5,000 today for long-term passive income
• Add these ASX shares to your retirement portfolio for growing passive income: analysts
• Top ASX dividend shares to buy in April 2023
• 7 ASX dividend shares you can buy for under $10

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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Exchange traded funds (ETFs) continue to grow in popularity and it isn’t hard to see why.

That’s because ETFs allow you to invest easily in groups of shares that give you exposure to sectors, countries, indices, or even themes.

One theme that is popular with investors right now is the defensive theme. This is due to the global economic uncertainty that rising interest rates is causing.

In fact, Betashares’ chief economist, David Bassanese, believes investors should consider adding defensive shares to their portfolio because of this. He commented:

This year has already presented many unexpected challenges for investors. Some, such as a potential US-led global recession, are already obvious and firmly in the sights of investors. Others – such as the recent spate of US bank failures – can catch investors off guard, remaining obscured until the very last moment. For investors who have positioned their portfolios appropriately, the impact might not be quite so severe

With that in mind, listed below are a couple of defensive ETFs that have recently been recommended by Bassanese as great options in the current environment. They are as follows:

Betashares Australian Quality ETF (ASX: AQLT)

The first ETF for investors to consider is the Betashares Australian Quality ETF. As you might have guessed from its name, this ETF provides investors with exposure to a group of high-quality ASX shares.

Betashares notes that the ETF’s holdings are selected on ‘quality’ metrics of high return on equity, low leverage, and relative earnings stability. This currently includes companies such as CSL Limited (ASX: CSL) and Telstra Group Ltd (ASX: TLS).

Betashares Global Quality Leaders ETF (ASX: QLTY)

Another option is the Betashares Global Quality Leaders ETF. This is the international equivalent of the Betashares Australian Quality ETF, giving investors exposure to a portfolio of approximately 150 global companies (excluding Australia).

As with the other ETF, to be included in this one a company needs to rank highly on four key metrics. These are return on equity, debt-to-capital, cash flow generation ability, and earnings stability. The ETF includes giants such as Alphabet, Microsoft, and Nvidia.

The post Here are 2 ‘quality’ ETFs that this expert is recommending right now appeared first on The Motley Fool Australia.

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More reading

• Why I think this ASX ETF is a top pick for global diversification
• Expert names the ETFs to buy this month
• Analysts name 2 strong ASX shares to buy for a retirement portfolio
• Betashares names 6 ‘defensive’ ASX ETFs to consider for a possible recession

Motley Fool contributor James Mickleboro has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. 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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The Pilbara Minerals Ltd (ASX: PLS) share price had a top run on the market today.

Pilbara shares rose 3.28% to close at $4.09. For perspective, the S&P/ASX 200 Index (ASX: XJO) edged just 0.07% higher.

So what boosted the Pilbara Minerals share price today?

What’s going on?

Pilbara was not the only ASX lithium share to rise today. Core Lithium Ltd (ASX: CXO) shares gained 3.05%, while Allkem Ltd (ASX: AKE) shares jumped 1.82%.

The S&P/ASX 200 Materials Index (ASX: XMJ) finished the day up 1.1%.

On the New York Stock Exchange, lithium shares Sociedad Quimica y Minera de Chile (NYSE: SQM) rose 0.81% while Livent Corp (NYSE: LTHM) jumped 0.57%. The Albermarle Corporation (NYSE: ALB) share price slipped 0.32% but is up 0.26% in after-hours trade.

Lithium sentiment appeared to be strong on the ASX today. It may have been fuelled by the federal government releasing Australia’s “first Electric Vehicle (EV) Strategy” today. Lithium is a key component used in electric vehicle (EV) batteries.

Under the strategy, the government announced efficiency standards on car pollution will be introduced for new cars with the aim of pushing electric vehicle uptake.

Climate Change and Energy minister Chris Bowen said:

This strategy provides the coordination and leadership to drive down costs and improve infrastructure so that we get more affordable and accessible electric vehicles on the market.

The minister also announced $70 million in funding for new EV charging stations in Australia. The funding will be available to businesses, local government, councils, and state and territory-owned corporations.

Currently, Australia’s EV sales are “four times lower than the global average”.

Also today, the price of lithium fell lower. Lithium carbonate (99.5% battery grade) on the Shanghai Metals market has fallen 3.23% to US$26,189.06.

Conversely, Pilbara shares have risen 8% over the past two days. On Tuesday, UBS upgraded the company’s shares to a “buy” with a $4.60 price target. UBS is optimistic lithium prices can rise in the long term, despite a short-term drop in demand.

Share price snapshot

Pilbara Minerals shares have lifted more than 40% in the last year. In the past month alone, the Pilbara share price has gained 11%.

Pilbara Minerals has a market capitalisation of about $12.3 billion based on the latest share price.

The post Why did Pilbara Minerals shares charge higher today? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Top brokers name 3 ASX shares to buy today
• Why AMP, EML, Pilbara Minerals, and Telix shares are racing higher today
• Capital deities and destroyers: The best and worst at putting money to work among ASX 200 shares
• Here’s the latest forecast for ASX 200 lithium stocks from UBS

Motley Fool contributor Monica O’Shea 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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BHP Group Ltd (ASX: BHP) shares had a solid session on Wednesday.

The mining giant’s shares rose 1.5% to end the day at $47.27.

Why did BHP shares push higher?

One potential reason why investors were bidding BHP shares higher on Wednesday was the release of a broker note out of Morgans.

According to the note, the broker has upgraded the Big Australian’s shares to an add rating (the equivalent of a buy rating) with an improved price target of $51.10.

Based on the current BHP share price, this implies potential upside of 8.1% for investors from current levels.

In addition, the broker is expecting BHP to pay fully franked dividends of 203 US cents per in FY 2023 and then 271 US cents per share in FY 2024. This equates to yields of 6.4% and 8.5%, respectively.

What did the broker say?

The broker made the move on the belief that iron ore has come out of a slump in great shape. It commented:

Despite notable pessimism across consensus, we also have observed gradual but consistent upgrades to iron ore price forecasts from the street, leaving sentiment receptive to any contrary signs of firming demand or supply fundamentals.

While the market remains concerned with comments from the Chinese government around capping steel output at 2022 levels, we note that those levels are quite healthy – particularly when coupled with iron ore supply risks. [..] China iron ore stockpiles at port remain at healthy levels, suggesting increased iron ore imports are being consumed.

In light of the above, the broker believes that “BHP remains in the best shape, with the fewest hurdles, with attractive cash flow and dividend profile.”

Overall, this could make BHP worth considering if you’re looking for exposure to the mining sector. Morgans recommends “accumulating the big miner on any weakness.”

The post Why this broker just upgraded BHP shares to a buy rating appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy today
• Why are ASX 200 mining shares like Fortescue smashing the index today?
• How much to invest in ASX shares to get $500 in dividends every month
• Here’s the forecast for popular ASX 200 mining shares from UBS
• BHP clears final hurdle to acquire all OZ Minerals shares. What’s next for investors?

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 S&P/ASX 200 Index (ASX: XJO) had a rocky session on Wednesday, ultimately closing 0.07% higher at 7,365.5 points.

Today’s top-performing sector was the S&P/ASX 200 Materials Index (ASX: XMJ). It soared 1.1%. Unfortunately, it was alone in posting a significant gain.

The Aussie bourse was dragged down by the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ), which flopped 1.1% today.

Shares in Star Entertainment Group Ltd (ASX: SGR) were the sector’s biggest weight. They tumbled 7% after the company downgraded its full-year guidance and announced it will axe 500 jobs.

It was also a rough session for the S&P/ASX 200 Energy Index (ASX: XEJ) and the S&P/ASX Real Estate Index (ASX: XRE), they fell 0.3% and 0.6% respectively.

So, with all that covered, let’s take a look at Wednesday’s top-performing ASX 200 shares.

Top 10 ASX 200 shares countdown

The Telix Pharmaceuticals Ltd (ASX: TLX) share price soared once more today, gaining 5.4% to close at $9.37.

The stock has been on a roll since the company released its quarterly earnings earlier this week.

These shares made today’s biggest gains:

ASX-listed company	Share price	Price change
Telix Pharmaceuticals Ltd (ASX: TLX)	$9.37	5.4%
IGO Ltd (ASX: IGO)	$14.45	3.96%
Gold Road Resources Ltd (ASX: GOR)	$1.855	3.92%
AMP Ltd (ASX: AMP)	$1.135	3.65%
De Grey Mining Limited (ASX: DEG)	$1.64	3.47%
Pilbara Minerals Ltd (ASX: PLS)	$4.09	3.28%
Core Lithium Ltd (ASX: CXO)	$1.015	3.05%
Mineral Resources Ltd (ASX: MIN)	$84.31	2.68%
Virgin Money UK CDI (ASX: VUK)	$2.83	2.54%
AUB Group Ltd (ASX: AUB)	$27.24	2.41%

Our top 10 shares countdown is a recurring end-of-day summary to let you know which companies were making big moves on the day. Check in at Fool.com.au after the weekday market closes to see which stocks make the countdown.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy today
• Why AMP, EML, Pilbara Minerals, and Telix shares are racing higher today
• Why is ASX 200 stock Telix Pharmaceuticals suddenly so hot?
• Capital deities and destroyers: The best and worst at putting money to work among ASX 200 shares
• AMP share price marching higher as net outflows ebb

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Aub 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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Macquarie Group Ltd (ASX: MQG) shares have had a good run in 2023.

The diversified S&P/ASX 200 Index (ASX: XJO) financial stock is up 9.5% year to date, despite coming under selling pressure in May. That handily outpaces the 6.0% gains posted by the ASX 200 over this same period.

And there may well be more outperformance to come.

Here are five good reasons why Macquarie shares could still be a great investment today.

Five reasons the ASX 200 financial share could be one to buy today

Fairmont Equities managing director Michael Gable has a buy rating on Macquarie shares.

According to Gable (courtesy of The Bull), “Share price weakness in March brought the stock back to a strong level of support.”

Gable pointed to the fallout from the banking crisis in the United States and Europe following the collapse of Silicon Valley Bank as driving that weakness. But Fairmont Equity believes Aussie investors “over-reacted to overseas events”.

“Consequently, we believe MQG can be considered a buying opportunity for a company with a strong track record of performance,” Gable said.

Which gives us our first two reasons why Macquarie shares could be a great investment today:

One, the current share price weakness looks to be driven by investor overreaction to the international banking turmoil.

And two, the company’s strong performance track record.

Anthony Paterno senior investment adviser at Ord Minnett, has a hold rating on Macquarie shares.

However, Paterno sounded some bullish notes on the ASX 200 financial stock.

“The commodities and global markets division, a key driver of earnings growth in recent years, is again exceeding our expectations,” Paterno said (quoted by The Bull).

“Management continues to invest in technology, and, with excess surplus capital, is well placed to continue taking market share,” he added.

Which gives us reasons three and four why Macquarie could be a great investment today:

Three, one of its key earnings growth drivers is exceeding expectations.

And four, the company is well situated to increase its market share.

To finish off that list I’ll add one of my own reasons why I think Macquarie shares could be a great investment right now.

Reason number five, the company can provide a handy passive income stream, with a lengthy history of making two annual dividend payments.

At the current share price, Macquarie trades on a partly franked trailing dividend yield of 3.6%.

How have Macquarie shares been tracking longer-term?

As you can see in the chart below, Macquarie shares have slipped 12% over the past full year. Investors who bought shares five years ago will be sitting on gains of 72%.

These figures don’t include the company’s dividend payouts.

The post 5 reasons Macquarie shares could be a great investment today appeared first on The Motley Fool Australia.

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More reading

• ‘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
• Could buying Macquarie shares at under $180 make me rich?
• Why ASX shares in 2023 are eerily similar to 2019 (and what you should do)

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 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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