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Are you searching for ASX dividend shares to buy? If you are, then the two named below could be worth checking out.

Both have been named as buys by analysts and tipped to provide attractive yields. Here’s what you need to know about them:

Dicker Data Ltd (ASX: DDR)

The first ASX dividend share to look at is Dicker Data. It is one of the largest technology hardware, software, cloud, cybersecurity, access control and surveillance distributors in Australia and New Zealand.

It could be a top option for income investors thanks to its long track record of earnings and dividend growth and its positive long-term outlook.

The latter is being underpinned by the digital transformation megatrend, recent acquisitions, and the expansion of its warehouse.

Morgan Stanley remains positive on the company and recently retained its outperform rating and $10.00 price target on its shares.

As for dividends, its analysts are forecasting fully franked dividends per share of 43.8 cents in FY 2022 and 48.8 cents in FY 2023. Based on the latest Dicker Data share price of $8.19, this will mean yields of 5.3% and 6%, respectively.

Telstra Group Ltd (ASX: TLS)

Another ASX dividend share to buy could be telco giant Telstra.

The team at Morgans is positive on the company due to its successful turnaround, positive outlook, and attractive valuation. In respect to the latter, the broker feels Telstra’s “high quality long life assets like InfraCo are worth substantially more” than the market is valuing them.

And with management considering divestments, this value could soon be unlocked.

It is partly for this reason that Morgans has an add rating and $4.70 price target on its shares.

As for dividends, the broker is forecasting fully franked dividends per share of 17 cents in both FY 2023 and FY 2024. Based on the current Telstra share price of $4.19, this will mean yields of 4.05%.

The post Analysts name 2 ASX dividend shares to buy right now appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Monday
• Telstra shares: Bull vs. Bear
• ‘Safer than houses’: 2 ASX 200 shares that are pumping out the dividends
• Buy these ASX 200 dividend shares for income: Goldman Sachs
• Why Goldman Sachs is bullish on the Telstra share price

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Dicker Data. The Motley Fool Australia has positions in and has recommended Dicker Data and 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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One ASX company that was a huge “COVID beneficiary” is holding onto those customers as Australia moves past the pandemic.

That’s the opinion of Shaw and Partners portfolio manager James Gerrish, who revealed that consumer goods conglomerate Metcash Limited (ASX: MTS) is sitting comfortably in his income portfolio.

“Metcash definitely dominates in the rural market place but it also performed strongly in the major cities during COVID as people shifted from large supermarkets to the more convenient community supermarkets of IGA,” he said in a Market Matters Q&A.

But the post-pandemic slowdown is much slower and shallower than expected.

“This transition is slowly being reversed as COVID takes a backseat to almost all news stories,” said Gerrish.

“However, the original transition to Metcash has been pretty resilient despite the economic reopening over the last 24 months, highlighting the stickiness of the consumer.”

Cheap with big dividend payouts

This stickiness is reflected in the Metcash share price, with it remaining almost flat over the past 6 months, even as recession fears buffet other consumer goods stocks.

This is all while paying out a chunky 5.7% dividend yield.

Both the stock price and income are genuine lures for investors, according to Gerrish.

“Current expectations have the stock trading on a 12.1x FY23 valuation while it [is] estimated to pay a dividend yield of around 6.7% fully franked over the next 12-months,” he said.

“These attractive numbers are why it resides in our Market Matters Income Portfolio.”

The Motley Fool’s Tristan Harrison is also a fan of Metcash shares as a cheaper alternative to its giant supermarket rivals.

“Metcash can benefit from ongoing store rollouts, improvements in its logistics and online offerings, and scale advantages,” he said earlier this month.

“I think that Metcash’s earnings — like food and liquor — can be resilient even in a downturn, so I think it could be a smart pick at today’s price.”

The broader professional investment community is somewhat divided on Metcash shares.

According to CMC Markets, three out of six analysts currently rate the stock as a buy.

The post ‘Attractive numbers’: Expert names ASX dividend share to buy right now appeared first on The Motley Fool Australia.

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More reading

• Investing as little as $25 a week could help me retire with $104,000 a year in passive income!
• 5 things to watch on the ASX 200 on Friday
• How I’d aim to replace an entire salary with passive income from ASX dividend shares
• I think value investors would love to buy these 2 cheap ASX shares

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 recommended Metcash. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Looking for dazzling dividend shares on the ASX without stepping into a yield trap can be a challenge, but there are some companies out there that offer high yields and strong growth potential.

One such company that I believe could be flying under the radar is Motorcycle Holdings Ltd (ASX: MTO).

Sitting at a market capitalisation of roughly $115 million, the motorcycle dealership operator rarely features in headlines. However, I’d rather invest based on performance metrics than attention metrics. After all, it’s the profits that will determine long-term returns, not the number of mentions.

The company’s shares have experienced a landslide over the past year, falling 46% amid crimped spending due to higher interest rates.

Now at $1.59 apiece, touting a tantalising dividend yield of more than 10%, and a solid history of top-line growth, could Motorcycle Holdings be one the best-kept secrets among ASX dividend shares?

Understanding the business

Motorcycle Holdings started its life as a single dealership in 1989. Today, the company owns and operates more than 40 locations across Australia and New Zealand — capturing nearly 14% of the national market.

The company is taking a roll-up approach to a heavily fragmented industry. According to its 2022 annual report, Motorcycle Holdings estimates there to be around 700 dealerships across Australia. Aside from itself, there are only three operators that own more than four locations.

A prime example of this approach to growth is the most recent acquisition of Mojo Motorcycles, completed in October last year. The deal brings several new brands under the Motorcycle Holdings umbrella, increasing its exposure to agriculture and scooter markets.

On 27 February, the company posted revenue of $277.5 million for the first half of FY23 — up 17% on a statutory basis. Growth was aided by a $27.7 million contribution from the Mojo acquisition with only two months of being on the company’s books.

However, net profit after tax (NPAT) sank 17% to $10.5 million and shareholders raised concerns as national unit sales declined.

Could it be a cheap ASX dividend share?

I like to look at an investment from several different angles when assessing whether or not a company is ‘cheap’. Firstly, how does it compare to its peers on trailing fundamental metrics?

While there may not be other listed motorcycle dealers, car dealership operators are a close match.

As noted below, Motorcycle Holdings currently commands the highest gross margins, lowest earnings multiple, and highest dividend yield.

ASX-listed company	Gross margins	Price-to-earnings (P/E) ratio	Price-to-book (P/B) ratio	Dividend yield
Motorcycle Holdings	27%	5	0.6	10.1%
Eagers Automotive Ltd (ASX: APE)	19%	11	2.8	5.3%
Peter Warren Automotive Holdings Ltd (ASX: PWR)	19%	7	0.9	9.4%
Autosports Group Ltd (ASX: ASG)	21%	6.4	1.0	8.3%

Secondly, I want to explore the future potential of this ASX dividend share. This due diligence can help avoid stumbling into a dividend trap.

Ultimately, I want to gain an understanding of the company’s potential future earnings profile. If earnings suddenly fall away, there is a greater risk of dividends getting slashed — turning that generous yield into a piddly payout.

Based on my assumptions, I think Motorcycle Holdings will be able to grow its NPAT to approximately $27 million by FY28 and generate more than $680 million in revenue (shown above).

I personally believe these estimates are conservative. Though, as a base case, it gives me confidence in future dividends.

Furthermore, if the company can achieve this and trade on a P/E ratio of roughly eight times, its future valuation could be 75% higher.

Where there could be flaws

No sound investment is made without considering how it could come apart at the seams. While my above projections may look rosy, there are risks that could turn those numbers into mush.

The most obvious risk to Motorcycle Holdings and its ASX dividend share status is a weak economic environment. The Harley-Davidson quickly moves down the priority list if Aussies need to hunker down for some tough financial times — hurting the company’s sales in the process.

Another risk factor is the razor-thin margins associated with the dealership industry.

The projections above assume 4.5% profit margins in FY23 and 4% for each year after. Even a small variation of 1% can drastically change earnings, leaving the company susceptible to dividend cuts.

Would I buy this ASX share for the dividends?

I must admit, the tight margins are not akin to what I would normally look for in a long-term, marketing-beating investment. It tends to indicate a lack of pricing power and/or a highly competitive industry.

In saying that, Motorcycle Holdings’ management holds a lengthy track record of successful growth through consolidation. The co-founder and CEO, David Ahmet, has substantial skin in the game with a 16% stake and comes across as an extremely passionate and intelligent operator.

Personally, I do like the prospects of this ASX dividend share given the headroom for growth.

The post Could this high-yielding dividend share be the best-kept secret on the ASX? appeared first on The Motley Fool Australia.

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More reading

• 3 dividend stocks with the biggest ASX 200 yields. Time to buy?
• Why the outlook for these ASX 200 lithium shares could be ‘very favourable’
• Fundie says buy these 2 ASX 200 shares that have the planets aligned
• Stay away from this ASX sector (and buy this one instead): expert
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Mitchell Lawler 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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Many S&P/ASX 200 Index (ASX: XJO) dividend stocks have paid very large dividend yields for investors. But, are some just yield traps, or will they be dividend machines?

A dividend yield is simply the last year of dividends compared to the share price, expressed in percentage terms.

It’s rare to find dividend yields of more than 10%. Remember, the ultra-long-term average return of the share market is 10% per annum. Getting a 10% return with just dividends could be attractive, if the dividends continue at that level and earnings can sustain that payment.

However, some high yields could be dividend traps. This term implies that the next 12 months of dividends may not be as good as the last 12 months. With that in mind, here are three of the largest yields from ASX 200 dividend stocks. 

New Hope Corporation Limited (ASX: NHC)

New Hope is one of the largest coal ASX shares in Australia. It has capitalised on the higher price for thermal coal in the wake of the Russian invasion of Ukraine as nations looked for alternative sources of energy away from Russia.

The business has generated an enormous amount of profit over the past 12 months. In the FY23 half-year result, it generated $669 million of net profit after tax (NPAT), up 103%, and paid a total dividend per share of 40 cents. The last two dividends amount to a grossed-up dividend yield of 24%.

According to Commsec, the ASX 200 dividend stock is expected to pay a dividend of $1 in FY23, which will give a grossed-up dividend yield of 25%.

However, the dividend could fall in FY24 and FY25. The FY25 grossed-up dividend yield could be 17.7%. The dividend income could continue to be market-beating, but the dividend may not be as strong in the coming years.

So, is the New Hope share price a buy? I think it depends what the coal price is going to do, but that’s hard to predict. It’s certainly not a prediction that I’d want to make to base an investment decision on.

Latitude Group Holdings Ltd (ASX: LFS)

Latitude is an ASX financial share that offers a number of products including credit cards, personal lending, white label capabilities for retailers, and so on.

The Latitude share price is down around 35% since June 2022. While volumes have increased, the business is also dealing with much higher funding costs. That’s partly why the FY22 second half continuing cash net profit after tax sank 37% to $60.5 million.

Latitude is now also dealing with a cybercrime incident that has led to the details of millions of customers being stolen.

The company’s trailing grossed-up dividend yield is 14.6%. However, the FY23 grossed-up dividend yield is only meant to be 10%, according to Commsec. But, if the company can get through this difficult period, the dividend could then bounce back to 11 cents per share in FY24, which would represent a grossed-up dividend yield of 13.5%.

Such times of difficulty could be a good time to consider an ASX 200 dividend stock like this. The company could grow over the longer term. But, it’s not the sort of business I’d buy for my own passive income-focused portfolio.

Magellan Financial Group Ltd (ASX: MFG)

Magellan is a fund manager, but poor investment performance has meant that many investors have pulled out funds. This has resulted in lower funds under management (FUM), revenue, and earnings.

The last 12 months of dividends amount to a grossed-up dividend yield of around 18%. However, those payments were based on higher FUM. Magellan’s FUM had dropped to $45.4 billion at 28 February 2023, with $0.8 billion of FUM outflows over the month.

Commsec estimates currently suggest the FY23 grossed-up dividend yield could be 12.7% and in FY24, it could be 9.4%.

In other words, at the moment, Magellan’s dividend is expected to keep falling over the next few financial years.

If the ASX 200 dividend stock can turn its investment performance around for investors, then this could stop outflows and lead to growth of FUM, earnings, and dividends.

At this stage, I don’t think Magellan is worth buying because outflows keep chipping away at the FUM.

The post 3 dividend stocks with the biggest ASX 200 yields. Time to buy? appeared first on The Motley Fool Australia.

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More reading

• How I’d invest $20k in ASX 200 shares to earn a second income of $140 a month
• BHP share price dips as coal mines catch attention
• Why Lake Resources, Latitude, Synlait, and Woodside shares are falling today
• Here’s how much passive income Magellan shares could pay to 2025
• Top brokers name 3 ASX shares to buy next week

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 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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ASX 200 lithium shares had an amazing day in the sun yesterday on the back of a takeover offer from global lithium giant Albemarle (NYSE: ALB) for Liontown Resources Ltd (ASX: LTR).

The Liontown share price roared an astonishing 68.5% higher to close at an all-time record of $2.57.

Fellow ASX 200 lithium shares benefitted from the market’s excitement.

Other top-performing ASX 200 lithium shares yesterday included Core Lithium Ltd (ASX: CXO), which went 21% higher to hit its intraday peak of 94.5 cents per share.

The Allkem Ltd (ASX: AKE) share price peaked at $11.65, up 15%; while the Pilbara Minerals Ltd (ASX: PLS) share price went as high as $3.99, up 16%.

Liontown rejected Albemarle‘s $2.50 per share offer, which was the third offer within six months. Albemarle offered $2.20 in October 2022 and $2.35 per share earlier this month.

4 ASX 200 lithium shares with a ‘very favourable’ outlook

Yesterday, Westpac Banking Corp (ASX: WBC) hosted a webinar discussing the future of lithium investing.

Among the presenters was Matthew Frydman, a senior research analyst specialising in metals and mining at MST Financial.

Frydman noted that lithium prices have been volatile and falling of late, but said “the medium-term outlook is still very favourable for Australia’s established producers”.

Frydman singled out four “globally significant” lithium producers and shares listed on the ASX 200.

They are Mineral Resources Ltd (ASX: MIN), IGO Ltd (ASX: IGO), Pilbara Minerals, and Allkem.

Frydman said Australia has forged a “very strong position” on the global lithium stage at a time of rapidly rising demand and scarce supply.

He estimates the world needs between 50 and 70 new lithium mines to meet projected demand in 2030. The problem is, mines tend to take longer than that to get established.

This means incumbent producers like these four ASX 200 lithium shares have a significant advantage.

Mineral Resources boss Chris Ellison has made the same point. In 2022, Ellison said: “If we’ve got seven years in the sun, we’re gonna have a lot of fun.”

Frydman said all four lithium miners are at the bottom end of the global cost curve.

All have high-quality assets and “good growth optionality”, and should enjoy very attractive margins.

He said all of them are investing in their downstream processing capabilities. This will enable them to have two bites of the lithium cherry — digging it up and processing it.

Why this expert backs these lithium producers

ASX 200 lithium shares Mineral Resources, IGO, and Pilbara Minerals are based in Australia. In contrast, most of Allkem’s assets are in the lithium-rich South American continent, particularly Argentina.

This presents a degree of sovereign risk. However, Allkem has the advantage of being a brine producer. Frydman points out that brine operations are easier to expand than hard-rock lithium operations.

He said all four companies were expanding their production and increasing their higher-margin processing operations.

He added that these four ASX 200 lithium shares have management teams that have proven themselves.

This is an important advantage, as it can take years for newer companies to garner the same level of investor confidence as established companies.

The post Why the outlook for these ASX 200 lithium shares could be ‘very favourable’ appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• 8 ASX 300 lithium stocks surging over 10% today
• Why Chalice Mining, Core Lithium, Liontown, and United Malt shares are racing higher

Motley Fool contributor Bronwyn Allen has positions in Allkem, Core Lithium, and Westpac Banking. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Westpac Banking. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Ask A Fund Manager

The Motley Fool chats with the best in the industry so that you can get an insight into how the professionals think. In this edition, Chester Asset Management portfolio manager Rob Tucker explains why he reckons two particular ASX 200 shares are the best buys currently.

Hottest ASX shares

The Motley Fool: What are the two best stock buys right now?

Rob Tucker: It’s a good question because I look at the 35 stocks in my portfolio and I think they’re all quite interesting. That’s why I own them! We’re optimistic by nature. 

I think Brambles Limited (ASX: BXB) is still a really interesting company. Because we’re focused on assets that are really difficult to replicate, and I think Brambles has proven itself to have 360 million pallets, and a replacement cost to a pallet would be about $50 Australian. That would say the replacement cost of their asset base is about $18 billion, which is where the market cap is.

They’ve had competitors that in a lower interest rate environment have had access to capital and been competing on price. But now no longer, because interest rates have gone up, so their competitors are actually struggling. 

Brambles has actually raised prices by 14% the last 12 months, and their customers need Brambles pallets because they’re the only one that can supply them reliably with full service to every jurisdiction. This is the Walmart Inc (NYSE: WMT) and the Home Depot Inc (NYSE: HD) of the world in America. I think Brambles just has a pricing lever to play out over the next 12 months.

Now, the free cash generation of Brambles has always been tricky because of the capEx spend with the pallets. But the lumber prices have fallen 60% or 70% in the last 12 months, so I think there’s a really strong free cash flow story to emerge with Brambles over the next 12-18 months.

MF: Are you worried about the US Dollar exposure at all?

RT: Again, I’ve been doing this for 22 years or so, so over that period of time, I’ve worked out you can’t ever try and be too beholden to currency fluctuations. So I just try and say, “Well, I’m just trying to buy the best companies I can find.” 

The currency might sort itself out eventually. The US Dollar might be stronger in the short term for various terms. It might be weaker in the longer term because the US government has too big a fiscal deficit and expanding forever. I’ve got various thoughts about what happens to the US Dollar, but I’m not a currency expert. I’m not going to try and sit here and say I’m not going to have US currency exposure. I think Brambles is a good company.

MF: Your second best buy ASX share right now?

I would say the same thing for CSL Limited (ASX: CSL). 

The last result, CSL’s collection volumes increased by 36%. The working capital cycle says there’s about 12 to 18 months, so that says to me there’s a really clear line of sight to what their selling volumes can be in the next 12 to 18 months. As collections recover, the demand is still very strong so they’ll have more product to sell over the next 12 to 18 months in their core business. 

The Vifor acquisition will add certain products into their product suite and they’ve got a really impressive R&D portfolio, led by a product called CSL112. CSL112 is a — this might get a bit technical — a reconstituted, high-density lipoprotein, or RHDL. It is a waste product of the plasma fractionation process.

They have been trialling RHDL in humans for about the last eight years, and they’re at the end of a phase three trial through about 1500 patients. What it does is if you’ve had a heart attack, because your cholesterol and your arteries [are] too high, this RHDL actually removes a lot of the cholesterol in your arteries. It’s reducing the physical significance of having another heart attack if you’ve already had one. 

It’s an untapped market and it could be a material increase to CSL’s earnings over the next three to five years, should this phase three trial be successful. But we’ve been speaking to a couple of cardiologists that say the statistical success rate is looking increasingly likely that this will end up being a commercial product. I think that’s another leg of earnings growth over the next three to five years for CSL, which is probably not necessarily baked into the share price.

MF: Yeah, CSL’s great that way, isn’t it? It has the existing businesses that maintain its earnings momentum but also has these side projects going on that make it seem like a biotech startup.

RT: Yeah, and they’ve always had very conservative accounting. Full expense every bit of R&D they’ve ever spent. The headline PE you see for CSL, I think, is inflated.

They could easily cut $600 million out of their expense base because it could be capitalised. Because that’s R&D spend on future products like CSL112. Their accounting standards are very, very conservative, which I think overstates the PE ratio.

The post Fundie says buy these 2 ASX 200 shares that have the planets aligned appeared first on The Motley Fool Australia.

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More reading

• Does the CSL share price fall finally make it a no-brainer buy?
• 3 ASX 200 shares cracking multi-year highs on Tuesday
• Why these 3 ASX 200 shares could be leading picks for dividends and growth
• Top brokers name 3 ASX shares to buy next week
• Want to boost your portfolio with ASX blue chips? Analysts say buy these shares

Motley Fool contributor Tony Yoo has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, Home Depot, and Walmart. 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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Even before the recent failures of US banks and Credit Suisse, the team at DNR Capital collectively felt funny in their tummy about the industry.

For them, even the Australian banks, which are well-shielded from the chaos overseas, showed several red flags in their latest results.

“Firstly, reporting season also highlighted that the tailwind from higher interest rates now appears to be coming to an end, or at least the end is nigh,” said DNR Capital Australian Equities Income Portfolio and Fund portfolio manager Scott Kelly.

“Commonwealth Bank of Australia (ASX: CBA)’s result in particular showed that monthly net interest margins may have actually peaked last October.”

The second alarm bell was that home loan growth is slowing. 

“[This] is a function of the uncertainty in the property market, and in response, banks pricing competition appears to be stepping up as well,” said Kelly.

“We are already seeing the big banks offer discounts and attempt to match competitors in mortgages.”

So many red flags for the banks

Since interest rates have become more palatable for deposit holders, competition in that area has really heated up.

“That will unwind some of the funding cost gains that the banks have benefited from over the last few years.”

Moreover, cheap federal government capital lent out during the COVID-19 pandemic is all due to mature soon.

“The majority of this becomes due over the June, September, and December quarters this year. That’ll need to be replaced with more expensive wholesale funding,” Kelly said.

“Inflationary pressures will continue to put pressure on the cost base, and people still account for two-thirds of the bank’s cost base, so that remains a significant headwind.”

Another dark cloud is that bad debts are a genuine worry for banks for the first time in many years.

“Asset quality will come under pressure as consumers struggle. In our view, the risk of high bad debts is rising, and that could be a negative surprise for many.”

Lastly, regulatory and political pressure could mount on the banks.

“There remains the likelihood of increased political scrutiny, particularly as consumers face increased challenges through higher cost of debt, broader increase in living expenses, and also the potential for unemployment.”

Here’s where to invest your money instead

So it would be no surprise to hear Kelly say that his team has reduced its exposure to the banking sector.

“Overall, we see better risk-return opportunities elsewhere and more attractive dividend yields on offer elsewhere, particularly companies that are growing their dollar income over time.”

Then where are they putting their money instead?

“Relative to the banks, we prefer the insurers and we think they provide a meaningful offset to our underweight bank’s position.”

He added that specifically the DNR team prefers QBE Insurance Group Ltd (ASX: QBE) and Suncorp Group Ltd (ASX: SUN).

“Operationally, domestic and international premium rate increases continue to be strong. We are seeing moderate volume growth and benign customer churn,” said Kelly.

“Both also benefit from higher interest rates through higher yields on their investment books.”

Both those insurance stocks are going for cheap, too.

“They’re low double-digit PE multiples and attractive dividend yields of over 6%,” Kelly said.

“In addition, we expect balance sheets to provide capital management opportunities on a two to three year view.”

The post Stay away from this ASX sector (and buy this one instead): expert appeared first on The Motley Fool Australia.

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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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On Tuesday, the S&P/ASX 200 Index (ASX: XJO) was in fine form and stormed higher. The benchmark index rose 1.05% to 7,034.1 points.

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

ASX 200 expected to tumble

The Australian share market looks set to tumble on Wednesday following a poor night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 29 points or 0.4% lower this morning. In late trade on Wall Street, the Dow Jones is down 0.35%, the S&P 500 is down 0.4% and the Nasdaq is 0.8% lower.

Oil prices rise

ASX 200 energy shares Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) could have a decent session after oil prices rose overnight. According to Bloomberg, the WTI crude oil price is up 0.65% to US$73.29 a barrel and the Brent crude oil price has risen 0.7% to US$78.68 a barrel. Kurdish supply risks boosted prices again.

Liontown shares are still a buy

The Liontown Resources Ltd (ASX: LTR) share price may have rocketed 68% higher on Tuesday following a takeover approach, but one broker believes it can keep rising. Bell Potter believes Albemarle’s offer is fair but not full and has retained its buy rating with an improved price target of $3.35.

Gold price rises

Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could have a good day after the gold price rose overnight. According to CNBC, the spot gold price is up 1.1% to US$1,975.6 an ounce. US dollar weakness gave the precious metal a lift.

Dividend payday

A large number of ASX 200 shares will be paying their latest dividends on Wednesday. This includes stock exchange operator ASX Ltd (ASX: ASX), iron ore giant Fortescue Metals Group Ltd (ASX: FMG), gold miner Northern Star, energy producer Santos Ltd (ASX: STO), and engineering company Worley Ltd (ASX: WOR).

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

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More reading

• Fortescue share price lifts on production update
• Here are the top 10 ASX 200 shares today
• How I’d invest $20k in ASX 200 shares to earn a second income of $140 a month
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• 8 ASX 300 lithium stocks surging over 10% today

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

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A new month is upon us, so what better time to look at making some new portfolio additions.

If exchange traded funds (ETFs) are on your radar in April, then you might want to look at the three listed below.

Here’s what you need to know about these popular ETFs:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The BetaShares Asia Technology Tigers ETF could be a top option for investors to look at in April. This ETF tracks the performance of the largest technology companies in Asia (ex. Japan). It could be a top pick for long term focused investors due to the quality on offer in the Asian tech sector and its huge addressable market. Among the tigers you’ll be owning are Alibaba, JD.com, Pinduoduo, Samsung, Taiwan Semiconductor, and Tencent Holdings.

BetaShares Global Cybersecurity ETF (ASX: HACK)

Another ETF that investors may want to check out is the BetaShares Global Cybersecurity ETF. It provides investors with exposure to the rapidly growing global cybersecurity sector. BetaShares notes that with cybercrime on the rise, demand for cybersecurity services is expected to grow strongly for the foreseeable future. This means the fund’s holdings, which includes Accenture, Cisco, and Cloudflare, Okta, Palo Alto Networks, and Trend Micro, could experience strong demand for their services over the next decade.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

A final ETF for investors to look at is the extremely popular Vanguard MSCI Index International Shares ETF. This ETF is a great option for investors that are looking to diversify their portfolio. That’s because it provides investors with access to around 1,500 of the world’s largest listed companies. This offers significant diversity and also allows investors to take part in the long term growth potential of international economies. Among its holdings are the likes of Amazon, Apple, Nestle, Nvidia, Procter & Gamble, Tesla, and Visa.

The post 3 fantastic ETFs for ASX investors to buy in April appeared first on The Motley Fool Australia.

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• Invested $1,000 in the Vanguard MSCI Index International Shares ETF (VGS) in 2018? Here’s how much dividend income you’ve received
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• Want to invest in cybersecurity but don’t know how? Try this ASX ETF

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended BetaShares Global Cybersecurity ETF and Vanguard Msci Index International Shares ETF. The Motley Fool Australia has positions in and has recommended BetaShares Global Cybersecurity ETF. The Motley Fool Australia has recommended Betashares Capital – Asia Technology Tigers Etf 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.

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The Fortescue Metals Group Ltd (ASX: FMG) share price closed 1.18% higher on Tuesday.

Shares in the S&P/ASX 200 Index (ASX: XJO) iron ore stock finished the day at $20.56 apiece after closing at $20.32 a share on Monday.

Here’s what helped push the Fortescue share price higher today.

What are ASX 200 investors considering?

Fortescue looks to be receiving some tailwinds from an increase in the iron ore price.

The critical steel-making metal gained 0.5% overnight to US$118.85 per tonne.

And it was not just the Fortescue share price that marched higher today. The S&P/ASX 300 Metals & Mining Index (ASX: XMM) closed up 2.45%.

ASX 200 investors were also likely poring over Fortescue’s non-price sensitive production update, released this morning.

Fortescue reported that first production at its Western Australia Iron Bridge Magnetite Project has been revised to the second half of April. First production had previously been planned to commence in the March quarter.

The project is an unincorporated joint venture between Fortescue’s subsidiary, FMG Magnetite (69%) and Formosa Steel (31%).

The miner said that despite inclement weather impacting activity and associated infrastructure at Iron Bridge, crews continue to make “significant progress”. Amid that progress, Fortescue reported the entire steel concentrate and return water pipelines have been welded and buried.

Once fully operational, Iron Bridge will produce 22 million tonnes of high-grade 67% iron magnetite concentrate every year.

According to the release, the project’s capital estimate won’t be affected by the revised production date. Capex remains estimated at US$3.9 billion. Fortescue’s share of that investment works out to approximately US$3 billion.

Fortescue share price snapshot

As you can see in the chart below, the Fortescue share price has gained 6% over the past 12 months. This compares to a loss of 5% posted by the ASX 200 over that same period.

The post Fortescue share price lifts on production update appeared first on The Motley Fool Australia.

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More reading

• How I’d invest $20k in ASX 200 shares to earn a second income of $140 a month
• Guess which ASX All Ords stock is lifting on a $55m deal with Fortescue
• Fortescue share price marching higher amid green iron ‘major breakthrough’
• Why did the Fortescue share price slide today?
• How big will the Fortescue dividend be in 2024?

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

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