Tag: Motley Fool

The last month has brought turmoil to the international banking sphere, ultimately dredging up concerns about the ASX’s own financial sector. Amid the carnage, the Commonwealth Bank of Australia (ASX: CBA) share price has plunged 11% from its February high. But has the tumble produced a major buying opportunity?

So much has happened among international banks over the last 30 days. But the chaos had been building for some time prior.

Many central banks began hiking rates in response to rampant inflation in 2022. This, in turn, dropped the price of bonds, leaving some international US and European banks facing liquidity challenges.

The first casualty came with the collapse of the US Silvergate Bank. Days later, a bank run saw Silicon Valley Bank suffer the same fate, with Signature Bank closed by regulators soon after.

Meanwhile, over the pond, Swiss giant Credit Suisse was on the brink of collapse when peer UBS stepped in to acquire it.

Understandably, all this appeared to wobble investor sentiment for S&P/ASX 200 Index (ASX: XJO) bank shares – the S&P/ASX 200 Financial Index (ASX: XFJ) tumbled 5.1% last month. And CBA wasn’t shielded from the downturn.

The CBA share price is trading at $99.17 right now. Should investors be taking advantage of its recent share price weakness? Let’s take a look.

Is the CBA share price cheap right now?

If all the disruption has shaken your confidence in ASX 200 bank shares, you might find comfort in Goldman Sachs’ recent findings.

The top broker ran its ruler over the sector last month, finding Aussie financial institutions have solid liquidity coverage and strong capital positions, as my Fool colleague James reports. Additionally, CBA might be the safest of its kind to be invested in, judging from a few key measures.

And while its valuation is higher than that of its big four peers, UBS doesn’t appear too concerned.

The broker recently downgraded its outlook for many ASX 200 bank shares, dropping its price target for CBA shares by just 1% to $100 with a neutral rating – a potential 1% upside. Meanwhile, Morgans has a hold rating and a $96.11 price target on the biggest big four bank stock – marking a predicted 3% downside.

Fairmont Equities founder and managing director Michael Gable also rates the stock as a (seemingly optimistic) hold, telling The Bull:

Although CBA is the most expensive bank, we believe the price premium is justified because of its quality. Over the longer term, it outperforms the other major banks.

My Foolish takeaway

So, all that considered, I don’t think the CBA share price’s current level represents a massive, once-in-a-decade opportunity. Though, the stock could still be a safe place for wary investors to park their cash or, potentially, a rewarding long-term investment.

It’s also worth noting that there’s still potential for more international bank crashes.

I’ll be watching the ASX 200 bank sector closely over the coming weeks and months in case another tumble brings about a more solid buying opportunity.

The post Is right now a once-in-a-decade opportunity to buy CBA shares? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• With inflation peaking, I’m using the Warren Buffett method to buy shares
• How I would retire rich with ASX shares
• 5 things to watch on the ASX 200 on Wednesday
• Why are ASX 200 lithium shares having such a miserable week?
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. 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://ift.tt/WazdFEf

The Core Lithium Ltd (ASX: CXO) share price is outperforming multiple ASX lithium shares today.

Core Lithium shares just soared 7% to 85.5 cents. However, they have now pulled back slightly and are up 5% on yesterday’s close, fetching 84.5 cents. For perspective, the S&P/ASX 200 Index (ASX: XJO) is sliding 0.04% today.

Let’s take a look at what’s going on with the Core Lithium share price.

What’s happening?

Firstly, ASX lithium shares are having a mixed day on the market today. The Allkem Ltd (ASX: AKE) share price is down 1.49%, while Sayona Mining Ltd (ASX: SYA) shares are climbing 1.28%. Pilbara Minerals Ltd (ASX: PLS) shares are sliding 0.41%, Piedmont Lithium Inc (ASX: PLL) shares are 3.57% in the red and Lake Resources N.L. (ASX: LKE) shares are down 0.54%.

Lithium carbonate (99.5% battery grade) fell 2.88% to US$31,878.19 a tonne on the Shanghai Metals Market on Tuesday.

This morning, Core Lithium provided an update on the company’s Finniss Lithium Operation in the Northern Territory.

A maiden 3,500 tonne shipment of spodumene concentrate (5.6% lithium oxide) is ready for export to Yahua in China.

Core Lithium has achieved this export milestone ahead of schedule, having previously advised the shipment would be ready by the end of April.

The company is now working on production of a 15,000 tonne parcel of spodumene concentrate, also set for delivery to Yahua in the future.

Commenting on today’s news, Core Lithium CEO Gareth Manderson said:

Australia’s newest lithium mine has delivered its first cargo of spodumene
concentrate to the Darwin Port ready for shipping. The product presents well, with
moisture and grade within contractual specifications.

Production of the first concentrate from the Finniss Lithium Operations ahead of
schedule is a significant milestone. I would like to commend the Core Lithium team
for the work they have done to safely start operations and produce concentrate
during this wet season.

Core Lithium is now planning to focus on the “regular delivery of high-quality, reliable volumes of lithium concentrate”.

Broker JP Morgan this week upgraded its rating on Core Lithium to neutral.

Core Lithium share price snapshot

The Core Lithium share price has declined nearly 42% in the last year. However, in the past two years, it has exploded 272%.

Core Lithium has a market capitalisation of about $1.6 billion based on the current share price.

The post Why is the Core Lithium share price soaring 6% today? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why are ASX 200 lithium shares having such a miserable week?
• 4 ASX 200 shares just upgraded by brokers, one with 18% upside
• Could this further cloud the outlook for ASX 200 lithium shares?
• What on earth happened to the Core Lithium share price in March?
• These are the 10 most shorted ASX shares this week

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.

from The Motley Fool Australia https://ift.tt/1I7HNL8

The Magellan Financial Group Ltd (ASX: MFG) share price is falling hard today, down 8% at the time of writing.

Shares in the S&P/ASX 200 Index (ASX: XJO) funds manager closed yesterday trading for $8.63. Shares are currently changing hands for $7.94.

This comes following the release of the company’s latest funds under management update.

More large outflows in March

The Magellan share price is tumbling after the funds manager reported net outflows of $3.9 billion over the month of March.

Net retail outflows came in at $500 million, while net institutional outflows were $3.4 billion.

As at 31 March, Magellan had $43.2 billion in total funds under management, down from $45.4 billion on 28 February. (Figures adjusted for a declining AUD/USD exchange rate over the month.)

The sizeable outflows continue an unfortunate trend for the company, which also saw $6.2 billion of outflows in February.

When Magellan released its half-year results for the six months ending 31 December, it reported a 52% year on year decrease in average funds under management, to $53.8 billion.

The stock has been hit with headwinds from high inflation and interest rates, creating challenging market conditions.

Magellan share price snapshot

As you can see in the chart below, the Magellan share price has had a year to forget, down 46% over the past 12 months.

The post Magellan share price dives 8% on $4 billion outflows appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 7 ASX dividend shares you can buy for under $10
• 3 dividend stocks with the biggest ASX 200 yields. Time to buy?
• Here’s how much passive income Magellan shares could pay to 2025
• Here are the top 10 ASX 200 shares today
• Here are the top 10 ASX 200 shares 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.

from The Motley Fool Australia https://ift.tt/07imZfa

The dividend for shareholders of biotechnology company CSL Ltd (ASX: CSL) is set to hit bank accounts today.

CSL shares are up 1.33% in late morning trading and are currently fetching $295.34 apiece. For perspective, the S&P/ASX 200 Index (ASX: XJO) is down 0.5%.

So what are the details of the CSL dividend?

CSL dividend due today

Eligible CSL investors, rejoice! You are due to receive an interim dividend of US$1.07 per share today, unfranked.

In Australian dollars, this will deliver a dividend of $1.621458 based on an exchange rate of US65.99 cents. This exchange rate was specified in a CSL dividend update, released on 14 March.

Today’s interim dividend is 2.9% higher than the US$1.04 per share delivered in the first half of 2022.

However, it is less than the final dividend of US$1.18 per share, 10% franked, paid out at the end of 2022.

CSL reported a net profit after tax (NPAT) of US$1.62 billion in the first half of FY23. The company delivered record levels of plasma collections. This result included acquisition costs for Vifor Pharma.

The dividend equates to about 32% of the company’s earnings per share (EPS) of US$3.37 for the half.

Commenting on these results, CSL CEO and managing director Paul Perreault said:

CSL delivered a solid performance in the first half of the financial year demonstrating the strong fundamentals of the company and the disciplined execution of our patient focused strategy.

CSL’s dividend history shows the interim dividend has been increasing steadily in recent years.

In 2017, CSL delivered an interim dividend of US 64 cents per share. This increased to 79 cents in 2018 and then US 85 cents in 2019.

In 2020, CSL delivered a half-year dividend of US 95 cents per share.

And then in 2021, CSL provided shareholders with an interim dividend of US$1.04 per share.

Back in 2013, CSL’s interim dividend was US 50 cents per share, up from 36 cents in 2012.

Share price snapshot

The CSL share price has returned more than 10% in the past year. In the past month, it has climbed 1.2%.

CSL has a market capitalisation of more than $143 billion based on the current share price.

The post The record interim CSL dividend is being paid today. How much is it? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• How I would build a Warren Buffett-style portfolio with ASX 200 shares
• The ASX sector set to boom no matter what happens this year
• 5 things to watch on the ASX 200 on Wednesday
• Top broker says buy CSL stock while trading on ‘cheapest multiple in a long time’
• Passive income: How much to invest to get $800 per month

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 positions in and has recommended CSL. 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://ift.tt/M16vYLF

The good news for income investors is that there are a large number of quality ASX 200 dividend shares to choose from on the Australian share market.

Two that have been tipped as best buys by analysts at Morgans in April are listed below. Here’s what the broker is saying about them:

Santos Ltd (ASX: STO)

The first ASX 200 dividend share that Morgans has on its best ideas list is energy producer Santos. The broker currently has an add rating and $8.60 price target on its shares.

It believes Santos is a great option due to its growth potential and diversified earnings. The broker explained:

The resilience of STO’s growth profile and diversified earnings base see it well placed to outperform against the backdrop of a broader sector recovery. While pre-FEED, we see Dorado as likely to provide attractive growth for STO, while its recent acquisition increasing its stake in Darwin LNG has increased our confidence in Barossa’s development.

Morgans is expecting this to underpin dividends per share of 28.4 US cents in FY 2023 and 29.9 US cents in FY 2024. Based on the current Santos share price of $7.18, this will mean yields of 5.8% and 6.15%, respectively.

Westpac Banking Corp (ASX: WBC)

Another ASX 200 dividend share that Morgans has on its best ideas list this month is Australia’s oldest bank, Westpac. It has an add rating and $25.80 price target on its shares.

Morgans feels that Westpac is well-placed to deliver the best return on equity improvement in the sector and appears to believe this could underpin some big dividends in the coming years. It commented:

We view WBC as having the greatest potential for return on equity improvement amongst the major banks if its business transformation initiatives prove successful. The sources of this improvement include improved loan origination and processing capability, cost reductions (including from divestments and cost-out), rapid leverage to higher rates environment, and reduced regulatory credit risk intensity of non-home loan book. Yield including franking is attractive for income-oriented investors, while the ROE improvement should deliver share price growth.

The broker is forecasting fully franked dividends per share of $1.53 per share in FY 2023 and $1.59 per share in FY 2024. Based on the current Westpac share price of $21.74, this will mean yields of 7% and 7.3%, respectively.

The post Morgans names the best ASX 200 dividend shares to buy in April appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• These are the best ASX sectors to invest your money into this quarter: Morgans
• Investing $10k in Westpac shares could generate substantial passive income
• Could buying Westpac shares at under $22 make me rich?
• ‘Strong demand’: The 2 ASX 200 shares to pounce on right now
• 3 Warren Buffett tips on how to invest in ASX 200 banks

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.

from The Motley Fool Australia https://ift.tt/YH7oP8z

S&P/ASX 200 Index (ASX: XJO) gold shares are charging higher today.

In morning trade on Wednesday, the ASX 200 is up 0.2%.

Not bad. But well behind the 3.3% gain posted by the S&P/ASX All Ordinaries Gold Index (ASX: XGD), which also contains some smaller miners outside of ASX 200 gold shares.

Here’s how some of the biggest gold stocks are tracking at the time of writing:

• Northern Star Resources Ltd (ASX: NST) shares are up 3.5%
• Newcrest Mining Ltd (ASX: NCM) shares are up 2.8%
• Evolution Mining Ltd (ASX: EVN) shares are up 3.1%
• Gold Road Resources Ltd (ASX: GOR) shares are up 4.2%

Here’s what’s driving investors’ interest.

What’s driving investor interest in ASX 200 gold shares?

ASX 200 gold shares are outperforming again today after the gold price edged higher overnight.

Bullion is currently trading for US$2,022 per ounce.

That’s up 11.5% from the US$1,813 per ounce the yellow metal was fetching on 7 March. And the gold price is now up a whopping 24.9% since the recent lows of US$1,629 posted on 3 November.

With gold miners’ costs essentially fixed regardless of the price of the precious metal they dig from the ground, any increase in the gold price tends to go straight to the bottom line.

Should bullion prices remain elevated or even march higher from here, it should offer some healthy tailwinds for the ASX 200 gold shares. And investors might see some bigger dividend payouts ahead alongside any potential uplift in the miners’ profits.

Is the gold price headed for new all-time highs?

The gold price has been marching higher in large part due to the metal’s historic haven status.

Just as gold shot higher following Russia’s invasion of Ukraine, the yellow metal also benefited from investor fears driven by the recent wave of bank failures in the United States and Europe.

Gold, and ASX 200 gold shares, also look to be benefiting from market perceptions that central banks may be nearing the end of their tightening cycle, despite inflation remaining above their target ranges.

A climate of above-average inflation amid softer central bank policies is historically good for gold, which pays no yield itself but is often turned to as an inflation hedge.

At the current US$2,022 per ounce, gold is now just 2.6% below its all-time high of US$2,075, reached on 7 August 2020.

With gold priced in US dollars, experts are particularly focused on the US Federal Reserve, as any easing there is likely to pressure the greenback.

According to Warren Patterson, head of commodities strategy at ING (quoted by The Australian Financial Review):

Fed policy is likely to be key for gold over the medium term. The Fed is likely approaching a peak in the Fed funds rate, and we could see a pivot over the second half of this year. We would expect real yields to follow policy rates lower later in the year, which should prove supportive for gold prices.

Broker Citi sees the gold price heading to new all-time highs over the year. A move that would surely be welcomed by ASX 200 gold shares.

Aakash Doshi, senior commodities strategist at Citi said, “We are structurally bullish gold … into end-2023. It appears the price floor … is now higher and buttressed by an evolving central bank narrative, the compression in real yields at the belly of the US rates curve, and potential US dollar peak.”

Citi’s 12-month price target for the yellow metal is US$2,300 per ounce.

The post ASX 200 gold shares are rallying. Is the yellow metal set for new all-time highs? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today
• Why Aeris Resources, Evolution, Li-S Energy, and Race Oncology shares are charging higher
• 5 things to watch on the ASX 200 on Tuesday
• 5 things to watch on the ASX 200 on Monday

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.

from The Motley Fool Australia https://ift.tt/liBwpfX

What would you say if I offered you $500 a month to do absolutely nothing? I’d bet your answer would be a reverberating ‘yes’. Fortunately, there’s a way to establish a $500 monthly passive income stream by investing in ASX shares – and it needn’t break the bank.

Here are the five steps I’d take to begin building a rewarding dividend income portfolio in 2023.

Step 1: A long-term approach to an ASX passive income portfolio

Assuming a 4% dividend yield, a $500 monthly passive income will demand a portfolio worth around $150,000. That’s certainly not pocket change.

Before I even start creating a passive income stream, I will first contemplate the fact that doing so will take time.

Fortunately, I believe I can speed up the process by consistently investing in quality shares and reinvesting any dividends I receive – thereby compounding my gains.

Over the years, my passive income portfolio could grow with very little time or energy invested on my part.

Here are three ASX shares I’d buy to kick-start my portfolio.

Step 2: Simplicity in diversification

Washington H Soul Pattinson and Co Ltd (ASX: SOL) is one ASX share I believe would deserve a place in my portfolio.

By investing in the investment house, I would gain instant diversification. Further, the company has an impressive track record for paying dividends – having grown its offerings every year since 2000.

The stock currently offers a 2.3% dividend yield.

Step 3: Add an ASX REIT

Investing in ASX real estate investment trusts (REITs) is another way to diversify a portfolio. Doing so offers an alternative to buying an investment property.

One REIT I think could be a great passive income opportunity is the Charter Hall Long WALE REIT (ASX: CLW).

The trust holds $7.2 billion of real estate assets with a weighted average lease expiry (WALE) of 11.8 years – half of which are linked to CPI while the other half face an average annual increase of 3.1%.

It currently boasts a 6.7% dividend yield, having paid out 28.6 cents per unit over the last 12 months.

Step 4: Turn to defensive ASX shares

Since we’re looking at building passive income over the long term, I’d also consider buying a handful of defensive ASX shares. They’re stocks that have the potential to perform well even in economic downturns.

One such defensive company is Wesfarmers Ltd (ASX: WES).

The conglomerate operates retailers like Bunnings, Kmart, and Priceline, as well as energy, chemicals, and industrials businesses.

And the ASX blue chip stock also offers healthy dividends. It currently trades with a 3.65% dividend yield.

Step 5: Sit back and watch your passive income stream grow

After I take the time to set up my passive income portfolio, I’d keep regularly and consistently adding to it and use any dividends I receive to buy more shares. I’d also periodically review my investments to make sure they’re still working in my favour.

Though, even if I follow my own advice to the letter, there’s no guarantee my strategy will go to plan. Investing comes with risk, and even the most considered investment can result in a loss.

Fortunately, I think I have a good chance of growing a $500 monthly passive income using the three shares mentioned above. Here’s how much a $150,000 investment split across the trio would have yielded over the last 12 months:

Company	Price	Number of Shares	Dividends	Total annual payout
Soul Patts	$30.83	1,621	$0.72	$1,167.12
Charter Hall Long WALE REIT	$4.25	11,764	$0.286	$3,364.50
Wesfarmers	$51.50	970	$1.88	$1,823.60

That equals $6,355.22 over the last 12 months, or $529.60 each month.

But, of course, past performance isn’t an indication of future performance.

The post 5 steps to making $500 in monthly passive income in 2023 appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Buy NAB and this excellent ASX 200 dividend share for passive income: brokers
• 7 ASX 200 stocks smashing new 52-week highs on Monday
• 2 leading ASX 200 dividend shares I’d buy for long-term passive income
• Top ASX shares to buy in April 2023
• Why did the Wesfarmers share price outperform the ASX 200 in March?

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 positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited and Wesfarmers. 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://ift.tt/I8F9L4V

It’s a good day to be an owner of Woodside Energy Group Ltd (ASX: WDS) shares.

That’s because it is payday for eligible shareholders, with the energy giant’s monster dividend hitting bank accounts today.

The Woodside dividend

In February, Woodside released its full-year results for FY 2022. These were the first set of results since its merger with the petroleum assets of BHP Group Ltd (ASX: BHP).

Thanks to a combination of merger benefits (increased volumes), higher realised prices, and a strong operational performance, Woodside reported a 142% increase in operating revenue to US$16,817 million.

Things were even better on the bottom line, with Woodside’s profits more than tripling over the 12 months. It posted a 223% increase in underlying net profit after tax to a record of US$5,230 million.

However, given its increased share count from the BHP merger, its dividends per share didn’t grow as quickly as its earnings. Though, that doesn’t mean it didn’t pay a bumper final dividend!

The Woodside final dividend came in 37% higher year over year at a record of US$1.44 per share. This brought its full-year dividend to US$2.53 per share, which was an increase of 87% year over year and represents a total distribution of US$4,804 million.

The US$1.44 (A$2.154) per share final Woodside dividend that is being paid today equates to a sizeable 6.3% yield based on its current share price. Not bad at all!

What’s next?

The good news is that the Woodside dividend looks set to remain a very attractive option for income investors in the coming years.

According to a note out of Citi, it is forecasting the following fully franked dividends:

• FY 2023: $2.63 per share
• FY 2024: $2.56 per share
• FY 2025: $2.21 per share

This will mean dividend yields of 7.7%, 7.5%, and 6.5%, respectively, over the next three financial years.

The post The whopper Woodside dividend is being paid today. Here’s the lowdown appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• How I would build a Warren Buffett-style portfolio with ASX 200 shares
• 5 things to watch on the ASX 200 on Wednesday
• How much would I need to invest in Woodside shares for a $500 monthly income?
• Why EOS, Lake Resources, Tyro, and Woodside shares are racing higher today
• Why are ASX 200 energy shares off to such a great start on Monday?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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://ift.tt/gy1CiMj

Over decades, Warren Buffett has constructed a portfolio of some of the greatest long-term compounders in modern America. The monumental success has attracted countless aspiring investors who wish to emulate his vast fortunes by uncovering Buffettesque investments.

The legendary stock picker has amassed a fortune of more than US$100 billion by diligently applying a value investing approach at Berkshire Hathaway — the conglomerate holding company of which he is chair and CEO.

But, what if you wanted to build a similar portfolio with shares from within the S&P/ASX 200 Index (ASX: XJO)?

Whether the reason behind a domestic desire is grounded in taxes, fees, area of competence, or something else entirely — here’s how I would go about building an Aussie version of the Berkshire portfolio.

What does Warren Buffett hold in the Berkshire portfolio?

The initial step in taking inspiration from an existing portfolio is to first find the blueprint. Fortunately, this isn’t difficult due to Berkshire Hathaway being required to report its holdings to the US Securities and Exchange Commission on a regular basis.

Based on currently available information (as of 4 April 2023), the US$682 billion investment company holds the following listed investments.

Top 20 Berkshire Hathaway holdings	Percent of portfolio
Apple Inc (NASDAQ: AAPL)	44.3%
Bank of America Corp (NYSE: BAC)	8.7%
Chevron Corporation (NYSE: CVX)	8.0%
American Express Company (NYSE: AXP)	7.3%
Coca-Cola Co (NYSE: KO)	7.3%
Occidental Petroleum Corporation (NYSE: OXY)	3.9%
Kraft Heinz Co (NASDAQ: KHC)	3.7%
Moody’s Corp (NYSE: MCO)	2.2%
Activision Blizzard Inc (NASDAQ: ATVI)	1.3%
BYD	1.1%
HP Inc (NYSE: HPQ)	1.0%
Itochu Corp	0.9%
Davita Inc (NYSE: DVA)	0.9%
Verisign Inc (NASDAQ: VRSN)	0.8%
Citigroup Inc (NYSE: C)	0.8%
Kroger Co (NYSE: KR)	0.7%
Paramount Global (NASDAQ: PARA)	0.6%
Visa Inc (NYSE: V)	0.5%

It should be noted that the above list does not include businesses that are solely owned by Berkshire Hathaway. Examples of such companies are GEICO and Berkshire Hathaway Primary Group, among many others.

Berkshire’s top 20 largest positions make up 94% of the total portfolio. I have disregarded the 34 smaller investments given their near-negligible overall impact.

Furthermore, owning 54 positions as an individual investor is a daunting and unnecessary undertaking in my opinion. Hence, my objective of an Aussie alternative will be centred around the 20 main contributors.

Building an alternative with ASX 200 shares

Now that we know what we’re aiming for, it’s time I put in the leg work and find worthy ASX-listed replacements… which is easier said than done in some cases.

Nevertheless, here’s how I would apply the fundamentals of the Warren Buffett curated portfolio to stocks residing in the land down under.

Structuring the portfolio

Buffett is quoted as saying, “Diversification is a protection against ignorance. It makes very little sense for those who know what they’re doing.”

It appears the Oracle from Omaha practices as he preaches — holding roughly 75% of Berkshire’s portfolio in just five companies.

Selecting the top 5 heavy lifters

It goes without saying, the ASX 200 stand-ins need to be some of the highest-quality listed businesses Australia can offer to earn such a substantial weighting. Especially the top holding, Apple, which alone accounts for a 44.3% portion.

In my opinion, there simply isn’t an ASX share of the same calibre as the US tech giant. It wields the strongest and most recognisable brand on the planet; is highly profitable; attracts wealthy customers; and sells extremely sticky products and services.

However, consider the graphic below:

As shown above, I landed on CSL Limited (ASX: CSL) as the most fitting Australian substitute for Apple. While the two companies are worlds apart in what they do, there are similiarities. The overlap exists in their hard-to-disrupt nature, thick profit margins, diverse product offerings, and future growth potential.

The second-largest position I would award to ANZ Group Holdings Ltd (ASX: ANZ). Like Bank of America, ANZ has a similar degree of operating leverage to its peers, yet trades at a discounted earnings multiple to the other big four banks.

Moving along, the third, fourth, and fifth largest positions would go to Woodside Energy Group Ltd (ASX: WDS), Block Inc CDI (ASX: SQ2), and Treasury Wine Estates Ltd (ASX: TWE). The reasons are as follows:

• Woodside holds the financial firepower to conduct share buybacks if it so chooses. A likely reason for Warren Buffett adding Chevron to the Berkshire portfolio.
• Block, formerly Square, is pioneering modern financial solutions with a loyal and growing customer base. Not too dissimilar to the origins of the American Express card in the late 1950s.
• Treasury Wine Estates owns a variety of established and recognisable brands, commanding premium margins over its peers. The ASX 200 alcoholic beverage maker offers a dividend yield of 2.6%.

That’s three-quarters complete already.

What about the rest?

There are still another 15 ASX companies as part of this investing mimicry. Though, I would probably need to write a book to explain the reasoning behind all the selections. So, let’s concentrate on one of the more obscure picks.

In place of Occidental Petroleum, I would opt for the fertiliser and chemicals manufacturer — Incitec Pivot. Both companies operate in cyclic industries but have demonstrated hefty operating leverage in the past year.

Additionally, both companies are trading on earnings multiples of six times or less. If the commodities boom can be sustained for even a few more years, current valuations might appear cheap in hindsight. That’s a frame of thinking that might explain Warren Buffett’s large positions in Occidental and Chevron.

Which Warren Buffett picks I think are irreplaceable

I’d like to think I’ve picked a handful of reasonable alternatives among our ASX 200 shares. However, there are some US counterparts that I’d insist are simply unmatchable in what they offer investors.

From my perspective, companies that fall into this category include Moody’s, Verisign, and Visa. All three command breathtakingly wide moats, mindblowing free cash flows (see above), and returns on equity that would make your head spin.

For those reasons, if I were to make a few exceptions from staying within the confines of Australia, those would be the three Warren Buffett finds I’d happily duplicate.

The post How I would build a Warren Buffett-style portfolio with ASX 200 shares appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• The ASX sector set to boom no matter what happens this year
• 5 things to watch on the ASX 200 on Wednesday
• Could ANZ shares cash in on the recent international bank collapses?
• Top broker says buy CSL stock while trading on ‘cheapest multiple in a long time’
• ANZ share price higher amid Suncorp Bank takeover news

Citigroup is an advertising partner of The Ascent, a Motley Fool company. American Express is an advertising partner of The Ascent, a Motley Fool company. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Mitchell Lawler has positions in Apple, Block, Macquarie Group, and Sonic Healthcare. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ARB Corporation, Activision Blizzard, Apple, Bank of America, Block, CSL, HP, Harvey Norman, Moody’s, Netwealth Group, Vanguard Msci Index International Shares ETF, VeriSign, Visa, Washington H. Soul Pattinson and Company Limited, and WiseTech Global. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Kraft Heinz and has recommended the following options: long January 2024 $47.50 calls on Coca-Cola. The Motley Fool Australia has positions in and has recommended Block, Coles Group, Harvey Norman, Macquarie Group, Netwealth Group, Washington H. Soul Pattinson and Company Limited, and WiseTech Global. The Motley Fool Australia has recommended ARB Corporation, Activision Blizzard, Apple, Nine Entertainment, REA Group, Sonic Healthcare, Treasury Wine Estates, and Vanguard Msci Index International Shares ETF. 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://ift.tt/VIhKCO1

The Coles Group Ltd (ASX: COL) share price beat the S&P/ASX 200 Index (ASX: XJO) return quite significantly in the first quarter of 2023.

Coles shares have risen by around 10.6% in the first three months, while the ASX 200 has gone up by 4.2%.

It has been a strong start for the company, more than doubling the performance of the index.

What has happened to the Coles share price?

The most important thing that the company has announced since the start of the year was its FY23 half-year announcement.

Investors often like to value a business based on how much profit it’s generating and expected to make. The business was able to reveal a good amount of growth for the first six months of the financial year.

Sales revenue increased 3.9% to $20.8 billion, earnings before interest, tax, depreciation and amortisation (EBITDA) rose 7.6% to $1.81 billion, earnings before interest and tax (EBIT) grew 9.9% to $1.06 billion, net profit after tax (NPAT) increased by 11.4% to $616 million and earnings per share (EPS) went up 11.6% to 46.3 cents. The dividend was also grown by 9.1% to 36 cents per share.

Seeing growth in all of those financial metrics is a good sign for the business and it also showed that each of the profit lines grew faster than the profit level above it – EBIT grew faster than EBITDA, NPAT grew faster than EBIT. It’s helpful to see scale benefits coming through for the company.

The business has managed to get through this period of high inflation – Coles’ supermarkets gross profit margin improved by 43 basis points (0.43%) to 26.5%.

Coles also revealed that in terms of the outlook, that supermarket volume growth returned to “modestly positive” from mid-January. That’s a positive sign for earnings growth in the second half of the year.

What is the outlook?

Investors are very future-focused, so commentary about the rest of the year could have been influential for the Coles share price.

It said that supplier input cost pressures “remain”, but inflation is “expected to moderate from the peak levels”. Coles is expecting more customers will be “value conscious” as cost of living pressures increase.

In the liquor division, it’s expecting earnings growth when it’s no longer competing against the COVID period and it’s focusing on building sales momentum.

The company is expecting to see the benefits of the automated distribution centres, with store deliveries starting in the fourth quarter of FY23 from the Queensland facility and ramping up from that date.

The business said that it’s well positioned and that it’s expecting population growth and moderation in out-of-home dining. These could help investor sentiment about the business.

Coles share price snapshot

While Coles has been rising in recent months, interestingly it is close to the same price that it was a year ago.

The post Why did the Coles share price smash the ASX 200 in the first quarter of 2023? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Passive income: How much to invest to get $800 per month
• Coles share price climbs following $100 million acquisition
• ASX shares are paying out $19 billion in dividends this week. Are you getting a piece?
• Analysts say buy these growing ASX 200 dividend shares for passive income
• The record Coles dividend is being paid today. Here’s the lowdown

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Coles Group. 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://ift.tt/0PxZw4d