Tag: Motley Fool

The Vitalharvest Freehold Trust (ASX: VTH) share price has been on fire in 2021. Shares in the Aussie agricultural real estate investment trust (REIT) have surged 23% higher so far this year amid a takeover tug of war.

Investors will be keeping an eye on the REIT early next week. The Vitalharvest share price could be one to watch after the company shared news of an update on the takeover offer received from private equity group Roc Partners on 15 April 2021.

Why is the Vitalharvest share price worth watching?

Vitalharvest this morning provided an offer on the binding Roc proposal to acquire all units for $1.18 per share or $333.3 million. This is the fourth Roc proposal received and represents a superior offer to the fourth Macquarie Agricultural Funds Management Limited (MAFM) proposal received on 14 April 2021, according to the Vitalharvest Board.

Both the fourth Roc proposal and fourth MAFM proposal will permit the payment of 2.5 cents per unit interim distributed from rent received to 31 December 2020.

The Vitalharvest share price is worth watching as the takeover bid continues. Vitalharvest’s Board has notified MAFM that it has 5 business days to match. That means MAFM has until 22 April 2021 to provide a matching or superior proposal to the Fourth Roc Proposal.

The Vitalharvest share price is currently trading at $1.21 per share. That’s above the $1.18 per share fourth Roc proposal price but also reflects the 2.5 cents permitted distribution.

There may not be much movement in the agricultural REIT’s valuation until a response from MAFM is received. That could be either an update offer or withdrawal of interest.

If MAFM decides not to exercise its matching right, Vitalharvest intends to enter into the Roc Scheme of Implementation Deed.

Foolish takeaway

The Vitalharvest share price has been surging higher in 2021 as investors scramble to acquire the agricultural REIT. 

While the REIT’s unit price remained unchanged today, investors will be waiting for a response from MAFM ahead of the April 22 deadline.

More reading

• ASX 200 rises above 7,000, Resolute Mining soars, Galaxy jumps
• Why the Vitalharvest (ASX:VTH) share price is up 21% in 2021
• ASX 200 climbs 1%, Westpac rises, Western Areas jumps
• ASX 200 drops, Webjet reveals B2B plan, Cimic wins again

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

The post Why the Vitalharvest (ASX:VTH) share price is on watch next week appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3soSxM0

The S&P/ASX 200 Index (ASX: XJO) is home to a good number of shares with true blue chip status. But given the many options that investors have, it can be hard to decide which ones to include in your portfolio.

In order to narrow things down, I have picked out two blue chip ASX 200 shares which are highly rated right now. They are as follows:

Cochlear Limited (ASX: COH)

The first blue chip ASX 200 share to look at is Cochlear. It is a global leader in the development, manufacture, and distribution of cochlear implantable devices for the hearing impaired.

Cochlear was impacted greatly by the pandemic, but has bounced back incredibly quickly. For example, in February the company released its half year results and revealed an underlying net profit of $125.3 million.

This was down only 4% in constant currency from its record first half profit in the prior corresponding period. That period was before anyone had even heard of COVID-19.

Positively, given favourable tailwinds such as ageing populations, Cochlear looks well-placed to resume its growth in the second half and throughout the 2020s. This could make it a great buy and hold option.

Macquarie is a fan of Cochlear. Its analysts have an outperform rating and $245.00 price target on its shares.

Sonic Healthcare Limited (ASX: SHL)

Another blue chip ASX 200 share to buy could be Sonic Healthcare. It is a leading healthcare provider with specialist operations in laboratory medicine, pathology, diagnostic imaging, radiology, general practice medicine, and corporate medical services.

Sonic has been a very strong performer in FY 2021. During the first half of FY 2021, the company delivered a 33% increase in revenue to $4.4 billion and a 166% jump in first half net profit to $678 million.

A key driver of this growth was COVID-19 testing services. In fact, Sonic revealed that by the end of December, it had performed more than 18 million COVID-19 PCR tests across ~60 Sonic laboratories globally.

Positively, the rest of the business has been recovering strongly from the pandemic. The company revealed that global base business revenue (ex-COVID testing) was down 1% versus the prior corresponding period. It is worth noting that the prior period was of course pre-pandemic.

Morgan Stanley is positive on the company. It currently has an overweight rating and $39.80 price target on its shares. It expects Sonic to benefit from ongoing COVID testing and a recovery in base business volumes.

More reading

• 2 high quality ASX dividend shares that smash term deposits
• 2 of the best ASX shares to buy now
• 2 high-growth ASX COVID-19 shares
• Aussie dollar tipped to weaken and this ASX share stands to gain the most
• 2 ASX 200 shares to buy for growth

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

The post 2 compelling ASX 200 blue chip shares to buy in April appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3gfMo2w

Treasure hunters seeking dividend gems might find this ASX share particularly enticing as it could be the last of the large caps with a gross yield that’s close to 10%.

The ASX share in question is the underperforming Aurizon Holdings Ltd (ASX: AZJ) share price. The rail operator has been under a cloud due to earnings worries.

But this is no dividend trap, at least not according to the analysts at Macquarie Group Ltd (ASX: MQG).

Aurizon’s dividend set to rise

If anything, the broker is forecasting Aurizon to lift dividends for the next three years, if not longer.

As it stands, the company is tipped to pay a 28 cents distribution in FY20, which will be 70% franked. This means the current Aurizon share price of $3.95 is sitting on a yield of 9.2% if franking is included!

The dividend increases to 29.2 cents in FY22 and 30.4 cents the year after, based on Macquarie’s projections.

The Aurizon share price is a rare find on the ASX

You would be hard pressed to find another large cap with a grossed-up yield that’s this close to double-digit. This is particularly so now that the Telstra Corporation Ltd (ASX: TLS) share price has rallied hard.

It’s the same story among the ASX big banks. These ASX shares, such as the Westpac Banking Corp (ASX: WBC) share price and National Australia Bank Ltd. (ASX: NAB) share price, have rebounded to multi-year highs.

That same can’t be said for the Aurizon share price. That slumped close to 11% over the past year when the S&P/ASX 200 Index (Index:^AXJO) surged by nearly 30%.

Coal drags on the Aurizon share price

Just as with climate change, you can blame coal for Aurizon’s misfortunes. The amount of the commodity that Aurizon had been hauling crashed due to bad weather and equipment failure.

It also doesn’t help that an increasing number of investors are turning their backs on ASX shares that are exposed to the environmentally unfriendly fuel.

However, Aurizon also hauls iron ore in Western Australia and is well placed to seek out opportunities to transport crops.

Opportunities for growth outside coal

“Export volumes remain strong with Esperance/Geraldton up ~20% on pcp ie 1mt for the quarter,” said Macquarie.

“AZJ highlighted they have started some haulage for CBH, and the opportunity is to tender for the haulage work commencing May 22 (Watco holds contract currently).

“CBH has ~$110m of locomotives and rolling stock, which is an opportunity for AZJ to expand the offering, leveraging the iron ore locomotives and maintenance facilities.”

Macquarie is recommending the Aurion share price as “outperform” with a 12-month price target of $4.40 a share.

More reading

• Housing prices outpace the Commonwealth Bank (ASX:CBA) share price
• ASX 200 edges higher, Origin crunched, Mineral Resources falls
• Why these 3 ASX 200 gold shares are racing higher today
• COVID recovery “far better than expected” says NAB (ASX:NAB) CEO
• The Monadelphous (ASX:MND) share price surges as Rio Tinto (ASX:RIO) overhang lifts

Motley Fool contributor Brendon Lau owns shares of National Australia Bank Limited, Telstra Limited, and Westpac Banking. Connect with me on Twitter @brenlau.

The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia has recommended Aurizon Holdings Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post This underperforming ASX large cap is sitting on a ~10% dividend yield appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3ahiVBj

The recent performance of Appen Ltd (ASX: APX) shares would likely be a tough pill for investors to swallow. The S&P/ASX 200 Index (ASX: XJO) tech company and go-to AI stock has slumped some 60% from its August 2020 highs of $43.66 following multiple weak earnings reports and business headwinds. 

An Appen share price comeback? 

Citi has made a bold call on Friday, rating the Appen share price as a buy with a $30.90 target price. This represents an upside of approximately 82% from its current level of $16.97. 

The upside and valuation re-rate comes after the recent capital raising by Appen peer, Scale AI. Citi believes that this is an overall positive for Appen, showing solid growth in the AI training data industry. 

What is Scale AI? 

Founded in 2016, Scale AI is a private, San Fransisco-based company that “accelerates the development of AI applications by helping machine learning teams generate high-quality ground truth data”.

To add a bit more context to exactly what Scale AI does, a self-driving car developer, for example, might have a significant amount of data collected from testing its autonomous vehicles. 

Scale AI could play a role in labelling the collected data images. In simple terms, this involves labelling what objects are appearing so the autonomous car can then learn how to safely maneuver on the roads. If a data labeller was to consistently label cars as people, then the vehicle might get into very confusing situations.

The company has an impressive client list with notable customers such as PayPal, SAP, General Motors Co, Nvidia Corp and Lyft. 

The recent US$325 million funding round for Scale AI now values the company at US$7.3 billion. Scale AI has said that it is currently on track to earn US$100 million in revenue within a 12 month period and that sales have doubled in the past year. 

What does this mean for Appen? 

Scale AI has a similar model to Appen in terms of its data labeling and training services. Arguably, the recent good news for Scale could be compared to Afterpay Ltd (ASX: APT) benefiting from a strong Zip Co Ltd (ASX: Z1P) quarterly result. 

However, Citi has called out increasing competition in the space given the number of competitors raising money. The broker believes Appen may need to step up its research and development (R&D) investment in order to remain competitive and grow market share. 

While Scale AI highlights its revenue doubling in the past year, Appen’s revenue had only increased 12% for the full year ended 31 December 2020. 

More reading

• Brokers name 3 ASX shares to buy now
• 2 highly rated ASX shares to buy now
• Is the Appen (ASX:APX) share price a cheap buy?
• 5 things to watch on the ASX 200 on Friday
• These oversold ASX tech shares are ripe for the picking

Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends NVIDIA and PayPal Holdings. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Appen Ltd and ZIPCOLTD FPO and recommends the following options: long January 2022 $75 calls on PayPal Holdings. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended NVIDIA and PayPal Holdings. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Broker calls 80% upside on beaten up Appen (ASX:APX) share price appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3mSGF43

The Commonwealth Bank of Australia (ASX: CBA) share price closed at $87.80 today, down 0.13%.

The S&P/ASX 200 Index (ASX: XJO), meanwhile, closed 0.07% higher as the index managed to maintain its afternoon rally.

Why CBA isn’t concerned about rising house prices

The Commonwealth Bank share price is up 5% so far this year. While that’s a solid result for the big four bank, a company with a market cap of $156 billion, Aussie home prices have risen even faster, up 6.2%.

Should we be concerned?

Not according to Commonwealth Bank CEO Matt Comyn.

Addressing the House of Representative economics committee in Canberra yesterday on the rapid increase in Australia’s home prices, Comyn said (quoted by the Australian Financial Review), “We are not overly concerned with what we are seeing at the moment in the context of broader financial stability.”

Comyn said rising home prices tie into the strength of Australia’s economic rebound, with the unemployment rate ticking down another 0.2% in March and GDP forecasts improving. He called the recovery in Australia’s labour market “miraculous”.

As the AFR reported:

CBA expected unemployment for the March quarter to come in at 5.7 per cent, just missing the actual result of 5.6 per cent. The bank expects unemployment to fall to 5 per cent by December 31, and to further decline to 4.7 per cent by the end of 2022.

As for dwelling prices, CBA has upped its forecast for 2021 from 8% growth to 10% for the full calendar year. “We expect house prices to continue to grow through this year and next, but not at the rapid levels we have seen in the first two months of the year.”

Comyn also highlighted the falling number of deferred loans on the bank’s books since the onset of the pandemic. He said that the 158,000 home loans CBA had deferred at the height of the crisis had now fallen to 3,000–4,000 deferred loans.

Commonwealth Bank share price snapshot

Though the average Australian house price may have outpaced the Commonwealth Bank share price so far in 2021, over the past 12 months that’s certainly not true.

CBA shares have lifted 43% over the past full year, compared to a gain of 29% on the ASX 200.

More reading

• ASX 200 edges higher, Origin crunched, Mineral Resources falls
• Why these 3 ASX 200 gold shares are racing higher today
• The Monadelphous (ASX:MND) share price surges as Rio Tinto (ASX:RIO) overhang lifts
• Why you should buy these 2 defensive ASX shares today
• Eagers Automotive (ASX:APE) share price edges higher on trading update

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

The post Housing prices outpace the Commonwealth Bank (ASX:CBA) share price appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3x27QxZ

The S&P/ASX 200 Index (ASX: XJO) went up slightly by 0.07% to 7,064 points.

These are some of the highlights from the ASX today:

Origin Energy Ltd (ASX: ORG)

The Origin share price fell around 9% today after announcing its price review outcome and update on FY21 guidance.

The energy business has been engaged in a price review for gas purchased from Beach Energy Ltd’s (ASX: BPT) Otway Basin fields, which was referred to arbitration.

Origin said that the arbitrator has now issued a partial award and on the basis of that decision the new gas price is likely to be materially above Origin’s expectations and recent comparable wholesale contracts. The outcome is expected to result in an increase in Origin’s cost of supply of $30 million to $40 million for FY21, increasing further to $60 million to $80 million in FY22 consistent with an expected increase in volume.

The pricing outcome is binding over FY21 to FY23, with limited rights to appeal. The ASX 200 share will now assess the timing and extent to which this increased cost of supply can be mitigated.

Origin CEO Frank Calabria said:

We are disappointed in this decision which we believe is wrong, and entirely inconsistent with our prior experience in the gas market. This will result in a gas price that does not reflect market prices, and it is therefore a very poor outcome.

Origin has revised its energy markets underlying earnings before interest, tax, depreciation and amortisation (EBITDA) guidance for FY21 to be in a range of $940 million to $1.02 billion.

Mineral Resources Limited (ASX: MIN)

The ASX 200 mining company said that total mining production during the third quarter of FY21 was consistent with the second quarter and up more than 44% on the prior corresponding period. This was in line with mine plans.

Mineral Resources reported that its average realised iron ore price was US$144.8 per dry metric tonne (dmt), which was 5% higher than the previous quarter.

Iron ore shipments were 4.1 million wet metric tonnes (wmt), consistent with the second quarter of FY21 and up 51% compared to the prior corresponding period.

The mining business said that it has produced 10.1 million wmt but has shipped 8.5 million wmt. It has experienced haulage constraints caused by a shortage of truck drivers, resulting from the unplanned sudden state border closers, implemented following COVID-19 outbreaks around the country.

That shortage meant that, on average, hauling capacity of approximately 10,000 wmt per day was sitting idle that could have otherwise been used by Mineral Resources.

Management are not sure when these haulage issues will be resolved and so iron ore shipment guidance for FY21 is now expected to be in the 17.4 million wmt to 18 million wmt range.

The Mineral Resources share price dropped 5.3%. 

Monadelphous Group Limited (ASX: MND)

The Monadelphous share price was one of the best performers in the ASX 200 today, rising around 6%.

The engineering business announced a settlement of claim today.

In August 2020, Rio Tinto Limited (ASX: RIO) filed a writ of summons against a Monadelphous business regarding a fire at Rio Tinto’s iron ore processing facility at Cape Lambert, Western Australia, in January 2019.

Monadelphous announced that a confidential out-of-court settlement has been reached, with the settlement being covered by the proceeds of insurance. Both parties consider the matter closed.

The engineering company said it highly valued its long term business relationship with Rio Tinto and it’s pleased that this matter has been resolved amicably.

More reading

• Why these 3 ASX 200 gold shares are racing higher today
• Why Mineral Resources, Origin, Strike, Whitehaven shares are sinking
• The Monadelphous (ASX:MND) share price surges as Rio Tinto (ASX:RIO) overhang lifts
• Why you should buy these 2 defensive ASX shares today
• Why Eagers Auto, Mayne Pharma, Monadelphous, & Newcrest are pushing higher

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

The post ASX 200 edges higher, Origin crunched, Mineral Resources falls appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3afUunI

The Medusa Mining Limited (ASX: MML) share price is moving higher in late afternoon trade. This comes after the company announced its ‘Tigerway’ decline project is set to begin at the Co-O Gold Mine.

At Friday’s market close, the Australian-based gold producer’s shares are swapping hands for 85 cents, up 3.03%.

Co-O Gold Mine Decline Project Approved

Investors are pushing the Medusa share price higher on the back of the company’s latest positive developments.

According to its release, Medusa advised through its affiliate Philsaga Mining Corporation (PMC), it has signed a blasting contract with Mount Rock Powder Corporation (MRPC). The works carried out will be undertaken for the ‘Tigerway’ Decline Project at the Co-O Gold Mine.

MRPC is a leading Philippine underground mining and blast contractor, which has conducted services at the Co-O mine since 2008. Over the past decade, the group has completed more than 18,000 meters of underground mining, civil tunnel and decline projects.

Medusa noted that a comprehensive study was finalised in early 2020 to look at the long-term infrastructure of the site. It found that constructing a decline was the best option to attain the most efficient production when operating at deeper levels. While the project was formally approved in January 2020, the arrival of COVID-19 delayed selecting an Australian-based underground mining contractor. However, since the end of last year, the company moved to choosing a Philippines-based contractor, reducing the risk of operational restrictions and cost impacts.

Benefits of Co-O Gold Mine Decline

Building a decline at the Co-O mine is expected to provide a number of safety and operational benefits. This includes:

• More flexibility and capacity to extend underground mining infrastructure;
• Increased efficiency of installed shafts;
• Ability to increase mechanised mining techniques and increase productivity; and
• Better exploration flexibility from more optimal in-mine and near-mine exploration positions

Time and Cost of Project

Medusa stated that during the construction period, gold production will continue at the unaffected levels. The project plans to extend infrastructure below level 12 and onwards, remaining open at depth.

The total cost of the Decline project is estimated to be US$54 million. This comprises of US$43 million of box cut excavation and underground development, and US$11 million in mining infrastructure and equipment. The company will use its existing cash reserves and future operational cash flows to fund the project.

Medusa expects the construction period to be completed sometime within the next 3 years.

What did the managing director say?

Medusa managing director, Andrew Teo commented:

The Co-O Gold Mine has been in production for 13 years and has been a consistent producer which continues to replace reserves as the orebody extends at depth. While the hoisting and shaft infrastructure has served the mine well over its life to date, we believe this is an important investment in the future efficiency of the operation.

The decline will be constructed by a dedicated contract workforce and we do not expect this activity to have any impact on ongoing operations. Our strong financial position means the project will be funded from our existing cash balance and future cash flows while maintaining flexibility to consider future dividend payments, dependent on the performance of the operation and the prevailing gold price.

Medusa Mining share price snapshot

The Medusa Mining share price has jumped over 60% in the past year, before moving in circles since late September. The company’s shares are sitting just below 20% from its multi-year high of $1.065 reached mid-August 2020.

On valuation grounds, Medusa commands a market capitalisation of roughly $178.7 million.

More reading

• Medusa Mining (ASX:MML) share price drags lower on leadership change

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

The post Medusa Mining (ASX:MML) share price climbs on Co-O Mine progress appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3x0ftVG

The Pursuit Minerals Ltd (ASX: PUR) share price rose by as much as 5% in intraday trade before closing up 2.5% at 8.1 cents per share. Over the past month, the Pursuit share price is up more than 15%.

We take a look at recent news from the miner, including the completion of an $8 million placement and the expedition of work in its Warrior Exploration nickel mine, to see what might be impacting its share price performance.

Pursuit is a mineral exploration and project development company with a strong focus in Europe. It explores projects including the Koitelainen project and Karhujupukka project located in Finland, Central Sweden projects and the Airijoki project located in Sweden.

Pursuit’s $8 million placement

Pursuit confirmed on 9 April that it had completed the placement of 119,565,217 shares to CPS Capital. The placement shares were issued with an issue price of $0.069 per share, raising $8,250,000 (before costs).

Pursuit says the placement will enable the Company to advance its projects in Warrior, Combatant and Gladiator Projects, together with providing working capital and funding for potential new opportunities.

Pursuit CEO, Mark Freeman, said “the company is delighted with the strong support for the placement. This raising will provide critical
funding to conduct our inaugural drilling.”

Pursuit’s expedited MLEM and sampling

Pursuit also announced on 6 April that the company is commencing Moving-loop ground EM (“MLEM”) surveys to track anomalys (potential mineral deposits) that have been found in its Wubin and Wubin South Project Areas.

Pursuit also announced that its soil sampling program was completed over what it calls the “highly conductive” Phil’s Hill Prospect, on the Calingiri East tenement. This has been undertaken along with follow-up soil sampling over all lines, with MLEM line results expected within 4 weeks.

The company is drilling for high-grade, platinum rich nickel and copper in the region.

Freeman noted the progress Pursuit have made in progressing from aerial surveys this month.

The company is extremely pleased with the progress of the Phil’s Hill Prospect, with the company continuing to aggressively fast track its activity. Soil sampling results are in progress over the interpreted EM targets and we expect results back from the laboratory within the next 3-4 weeks.

The MLEM Surveys at Wubin and Wubin South should provide additional drilling targets for our upcoming inaugural drilling program. We are currently liaising with drilling contractors and expect to be able to announce commencement of drilling within the next 2-3 months once all government and Aboriginal Cultural Heritage approvals are in place.

Pursuit share price snapshot

The Pursuit share price has returned 2,076% over the past 12 months. It’s down 3% this week and started April badly, but has risen by 15.71% in the past month. It has a market capitalisation of $73 million.

More reading

• Why the Pursuit (ASX:PUR) share price is plummeting today
• Here’s why the Pursuit Minerals (ASX:PUR) share price is frozen
• Pursuit Minerals (ASX:PUR) share price rockets 22% higher today. Here’s why

Motley Fool contributor Lucas Radbourne-Pugh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post What’s been moving the Pursuit (ASX:PUR) share price this month? appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3toPwNf

Maybe it’s the political climate.

Maybe it’s a government that is trying to fight on fewer fronts.

I like to think it’s because they’ve seen the light.

In any case, assuming it’s true, the news in today’s papers is good for every single working Australian.

That news, if you haven’t caught up yet, is that the Federal Government is apparently dropping its potential opposition to increasing the Superannuation Guarantee (SG) levy (that is, the contribution our employers make to our Super accounts).

The SG is currently 9.5% of our take-home pay, a level we reached back in 2015.

The current legislation has it going to 10% from July 1 this year, then increasing by 0.5% per year, between now and 2025.

But some government backbenchers had been agitating for the increase to be cancelled or delayed.

They’d also been arguing for us to be allowed to raid our retirement (sorry, ‘utilise our super balances’) for things like housing.

Because you know what house prices need? More stimulus from more money chasing the same housing stock…

But I digress.

Super shouldn’t be — isn’t — a lump sum to be pilfered every time someone has a brilliant idea.

It’s not there to pay for housing.

It’s not there to replace the social safety net.

It’s not there for infrastructure building.

Say it with me: Super is for retirement.

Assuming the reports in today’s media are true, and the government doesn’t lose its nerve in the meantime, the SG will finally increase to 10% of salary.

And, hopefully, continue on from there, to 12%, without delay.

Why is that important?

Because that’s the level that most people agree is (roughly) required to ensure a comfortable retirement.

Yes, there’s an argument about what standard of living we should assume, as well as what contributions are made, and what earnings rate we should assume on those retirement savings.

But most people agree that 12% is a pretty decent level.

It allows lower income workers to amass a decent nest egg.

It allows people who take career breaks (think: caring for kids or parents) to do the same.

Of course any blanket rule is imperfect for a dozen reasons.

But it seems, to me at least, that 12% is a pretty good point at which to peg our Superannuation system.

For retirees. 

And for the federal budget, which otherwise needs to carry the can on supporting retirees.

Now, I should say that I’d make other changes, too.

Super shouldn’t just be a tax minimisation scheme.

It shouldn’t be able to be splurged, in retirement, before falling back on the pension.

And it shouldn’t unduly undermine the tax system, thanks to its 0% tax rate on earnings — no matter how high — in pension phase.

Those are problems to be addressed.

But they shouldn’t be addressed by limiting contributions, especially for lower- and middle-income earners who aren’t the ones actually causing those problems.

And, thankfully, it seems they won’t be.

At least not this time around.

We’ll see whether that’s what happens.

And, by rights, hopefully we won’t be back here again in 12 months’ time.

(I wouldn’t bet on it, but a bloke can hope, right?)

For now, I’m chalking it up as, as my father would say ‘one for the good guys’.

An acceptance that Super matters and that, as a cog in our financial system, it’s pretty much world’s-best, and something we should celebrate, rather than dismantle.

We’ll keep an eye on it, though. 

Just in case.

And we’ll keep campaigning for the steady rise from 9.5% now to 12% by 2025.

Thank you to those of you who shared our message.

We all made our voices heard!

We’ll keep fighting, too.

And our message will be simple:

— Australians deserve a 12% Superannuation Guarantee

— Super is for retirement, not a piggy bank to be raided whenever special interests want to

In other words, #HandsOffSuper

Fool on!

More reading

• 2 ASX dividend shares with massive yields over 8% today
• Why is the EMvision (ASX:EMV) share price surging 12% this week?
• Top brokers name 3 ASX small cap shares to buy
• Why these 3 ASX 200 gold shares are racing higher today
• What happened with the Betmakers (ASX:BET) share price this week?

The post A win for the good guys! appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3aeNDet

Finding an ASX dividend share offering a yield of 4% or more today is not too difficult. You can look to Telstra Corporation Ltd (ASX: TLS), JB Hi-Fi Limited (ASX: JBH) or Super Retail Group Ltd (ASX: SUL) for that kind of dividend.

But an 8% yield or higher? That is a far rarer creature. Often when an ASX share gets priced with a dividend of more than 8%, it can be a cause of concern. After all, most investors wouldn’t leave a yield like that on the vine without good cause. But the following 2 ASX dividend shares indeed offer a yield of that magnitude. So let’s dig into what’s on offer here.

2 ASX dividend shares with yields of 8% today

Fortescue Metals Group Limited (ASX: FMG)

After an incredible 2020 which saw the Fortescue share price run-up more than 100%, 2021 has been a bit of a disappointment for this ASX mining giant. Since the start of the year, Fortescue shares have lost around 16% of their value. But that loss has pushed the trailing dividend yield on Fortescue shares to new heights. It is currently standing at 11.88%, or a whopping 16.97% grossed-up.

While that gigantic number sinks in, let’s remember that Fortescue’s last 2 dividends came in at $1.47 per share (paid out on 24 March) and $1 per share (paid out on 2 October 2020) respectively. That was a gargantuan increase on the previous two payouts of 76 cents (April 2020) and 24 cents (October 2019).

The massive increase in dividends has been funded by sky-high iron ore prices, which even today are sitting above US$170 a tonne. As an iron ore miner, Fortescue might only be able to keep the floodgates open as long as the iron price holds up. So it will be interesting to see where Fortescue’s 2021 final dividend lands later this year.

AGL Energy Limited (ASX: AGL)

AGL has been one of the ASX’s worst-performing blue chips over the past 5 or so years. Back in 2017, AGL shares were trading as high as $27.70 each. Today, AGL is currently sitting at $9.23, 66.7% off of those highs, after falling to a new 16-year low of $9.15 earlier today. Ouch. Investors have evidently not reacted well to AGL’s recently announced plans to separate its electricity generation and retailing businesses. 

However, that share price fall has also pushed AGL’s trailing dividend yield to a substantial 8.88%. Dividend investors might be comforted that AGL last year committed to paying out 100% of its earnings as dividends until FY2023. If the company keeps this commitment, it should continue to ensure a robust yield going forward. But with AGL’s substantial writedowns last year, and ongoing uncertainly over the economics of the Australian electricity market, it’s no surprise investors don’t seem to be in much of a hurry with this one. 

More reading

• The Monadelphous (ASX:MND) share price surges as Rio Tinto (ASX:RIO) overhang lifts
• Why the Tilt Renewables (ASX:TLT) share price is in focus
• Top brokers name 3 ASX shares to sell today
• Origin (ASX:ORG) share price edges higher after hydrogen update
• Why the Fortescue (ASX:FMG) share price is slipping today

Motley Fool contributor Sebastian Bowen owns shares of Telstra Limited. The Motley Fool Australia owns shares of and has recommended Super Retail Group Limited and Telstra Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post 2 ASX dividend shares with massive yields over 8% today appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3x21mPF