Tag: Motley Fool

The Home Consortium Ltd (ASX: HMC) share price isn’t going anywhere on Friday after it requested a trading halt.

Why is the Home Consortium share price in a trading halt?

The property company requested a trading halt this morning so it could undertake an equity raising to fund a number of new acquisitions.

According to the release, Home Consortium is aiming to raise a total of $125 million via a fully underwritten placement at an issue price of $3.80 per new share.

This represents a discount of just 2.6% to its last close price of $3.90.

What is Home Consortium acquiring?

The company has agreed terms to acquire a portfolio of 6 health, education, and Government services properties for a total initial investment of $62 million. This will increase to $131 million including fund-through contributions.

Management notes that the acquisitions are consistent with its strategy to increase its exposure to health, wellness, and Government assets.

In addition to this, Home Consortium has entered into an agreement to acquire Gregory Hills Home Centre in New South Wales. The company has agreed to acquire the centre for a total consideration of $32 million. Management notes that this increases its exposure to the Western Sydney growth corridor.

These acquisitions increase Home Consortium’s Health, Wellness, and Government exposure to over $400 million of assets. Management also believes they provide the scale to establish a second standalone fund which will be managed by the company in the first half of 2021.

Home Consortium’s Executive Chairman & CEO, David Di Pilla, commented: “The acquisitions announced today are an exciting step for HomeCo and increases our exposure to the opportunity rich Health, Wellness & Government sectors. Importantly, the establishment of the HealthCo REIT in early 2021, today’s $125 million placement and HomeCo’s newly formed Capital Partnerships Group will set the foundation for HomeCo to accelerate growth in assets under management.”

More reading

• HomeCo Daily Needs REIT (ASX:HDN) on debut today as largest IPO in 2020
• Why BlueScope, Home Consortium, IAG, & Kogan shares are dropping lower

Motley Fool contributor James Mickleboro 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 Here’s why the Home Consortium (ASX:HMC) share price is in a trading halt appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/2VC4bVW

The Creso Pharma Ltd (ASX: CPH) share price has been rocketing higher over the last few days of trading, driven by positive updates. These included an announcement yesterday that the United Nations (UN) will reclassify cannabis as a less dangerous drug. 

The Creso share price has risen by 200% since 27 November, including a 65% price rise yesterday, and today’s increase of 8.25%. At the time of writing, Creso shares are trading at 10.5 cents.

UN landmark announcement

Creso announced yesterday that it is set to benefit from a landmark UN decision to reclassify cannabis as a less dangerous drug.

The vote was cast by the UN on 2 December 2020, after a series of recommendations were put forward by the World Health Organisation (WHO).

The decision will see the UN Commission on Narcotic Drugs withdraw cannabis from Schedule IV classification. Schedule IV substances are considered the most dangerous and addictive drugs.

The UN says that cannabis will now be reclassified as a Schedule I substance, which is the least restrictive drug classification.

Creso said its business is extremely well positioned to benefit from this ruling, which will unlock multiple near-term opportunities.

What else is driving the Creso share price higher?

Two days ago, Creso announced it has received three new purchase orders from Europe for its anibidiol line of animal health products. 

According to Creso, the new orders take total purchase orders generated through the company’s animal health segment to around $975,000 for 2020, reflecting the strong demand for its products.

Creso said these purchase orders are a major achievement for the company during the challenging regulatory situation and COVID-19 pandemic. The company expects to receive more orders over the next few months from the growing European animal health market.

In another positive development last month, Creso reported it was waiting for a Therapeutic Goods Administration (TGA) decision in late December that will be a game-changer for cannabidiol (CBD) products.

The TGA is making a decision that could see CBD products sold over the counter at pharmacies without the need for a prescription.

Creso said this decision could potentially open up a significant, new opportunity for the company, with the Australian market estimated to be worth around $200 million every year.

How has the Creso share price performed in 2020?

With its recent stellar gains, the Creso share price has almost regained its losses in 2020 and is now down 8.5% for the year. After a fantastic few days of trading for Creso, the company currently commands a market capitalisation of around $65 million.

More reading

• Elixinol (ASX:EXL) share price tumbles on capital raising update

Motley Fool contributor Eddy Sunarto 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 Creso Pharma (ASX:CPH) share price up 8% today, 200% in a week appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/39I2UF8

The Elixinol Global Ltd (ASX: EXL) share price tumbled after management issued an update to its share purchase plan (SPP) today.

The EXL share price lost 7.6% to 24 cents in after lunch trade when the S&P/ASX 200 Index (Index:^AXJO) gained 0.5%.

Other ASX medicinal cannabis stocks are faring better. The Creso Pharma Ltd (ASX: CPH) share price gained 10.3% to 11 cents and the Auscann Group Holdings Ltd (ASX: AC8) share price stayed flat at 17 cents at the time of writing.

Elixinol share price well above offer price

But Elixinol shareholders may not be too perturbed as the stock is still up 33% since the company emerged from a trading halt.

The trading halt was called as management undertook an $8.2 million placement and launched a SPP to raise another $2 million.

Management said today that its SPP has secured $1.3 million ahead of the 11 December closing date for the SPP.

Unusual SPP update

It’s quite unusual for management to issue an update to the SPP, but I take it that management is very eager to get the cash.

This was evident as the ASX statement “strongly encourages” shareholders who haven’t put in their applications to do so before next week’s deadline.

The fact is, there is no incentive for shareholders to lock in bids for the raise so far out from the SPP closing date.

Why it’s better to wait

Between now and then, the Elixinol share price could drop below the offer price of 17 cents a share. If that were to happen, it would be cheaper for shareholders to purchase shares on market instead.

If management really wanted shareholders to consider applying to the SPP earlier instead of later, it would have offered a discount to the five-day volume weighed average price (VWAP).

This means SPP applicants will either pay 17 cents or the small discount to the VWAP, whichever is lower.

Foolish takeaway

The update also worked against the company, in my view. Shareholders now know they are likely to get their full allocation.

If they thought that there is a good chance they will be scaled back (meaning they only get part of what they applied for), shareholders may be tempted to apply for more than what they really wanted.

Of course, there could be a late surge in applications as there normally is to such programs, but today’s update puts the oversubscription theory in doubt.

Sometimes more is less.

More reading

• Are ASX stocks about to get an earnings upgrade boost in the new year?
• Why the Woodside (ASX:WPL) share price is edging higher today
• ASX 200 up 0.3%: Premier Investments update, big four banks rise, gold miners tumble
• Goldman says buy the Metcash (ASX:MTS) share price ahead of next week’s results
• Will ASX kick out companies that don’t have board diversity?

Motley Fool contributor Brendon Lau 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 Elixinol (ASX:EXL) share price tumbles on capital raising update appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/2VApuqV

Australia’s top brokers have been busy adjusting their estimates and recommendations again, leading to the release of a large number of broker notes this week.

Three broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

CSL Limited (ASX: CSL)

According to a note out of UBS, its analysts have retained their buy rating and $346.00 price target on this biotherapeutics giant’s shares. The broker has been looking at its plasma collection openings and is confident CSL will achieve its target of 20 to 30 new centres in FY 2021. It expects this to offset a portion of the decline it is facing with collections from COVID-19. And while these COVID headwinds are not easing, the broker notes that trading conditions are not as bad as they were at the peak of the pandemic. Overall, it appears comfortable CSL will achieve its forecasts this year. The CSL share price is trading at $294.51 this afternoon.

Healius Ltd (ASX: HLS)

Analysts at Credit Suisse have retained their outperform rating and $4.00 price target on this healthcare company’s shares. This follows the completion of its Medical Centre sale to private equity firm, BGH Capital. The broker believes that the company could return some of the proceeds to shareholders in the form of a special dividend and an increase in its payout ratio. It also sees potential for margin expansion in the near future thanks to favourable industry conditions. The Healius share price is changing hands for $3.62 on Friday.

Kogan.com Ltd (ASX: KGN)

Another note out of Credit Suisse reveals that its analysts have upgraded this ecommerce company’s shares to an outperform rating with an improved price target of $20.60. The broker made the move after Kogan announced the $122 million acquisition of online retailer Might Ape. It believes this is a quality acquisition and expects its to boost its private label offering. It also envisages notable synergies from the deal. The Kogan share price trading at $17.32 this afternoon.

More reading

• Why Cashrewards, Doctor Care Anywhere, Kogan, & Treasury Wine are pushing higher
• Why Flight Centre, Fortescue, Kogan, & Telix shares are racing higher
• Kogan (ASX:KGN) share price storms higher on $122m Mighty Ape acquisition
• After a record November, what’s next for ASX 200 shares?
• CBA (ASX:CBA) and the ASX banks just had an amazing month

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 CSL Ltd. and Kogan.com ltd. The Motley Fool Australia has recommended Kogan.com ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Brokers name 3 ASX shares to buy right now appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3oq2Spk

The spectacular 10% jump in the S&P/ASX 200 Index (Index:^AXJO) in November prompted doomsayers to predict an imminent violent crash.

The ASX 200 is trading at around 20 times forward price-earnings (PE) compared to its historical average of around 16 times.

Some experts believe a day of reckoning is just around the corner as too much good news is priced into the market.

ASX stocks about to receive an earnings upgrade

But there’s one thing that these pessimists aren’t counting on. This is a consensus profit upgrade as the economy tries to escape the pull of the COVID‐19 recession.

I know it sounds a little far fetched but the ASX being in a cum-upgrade cycle may not be such a crazy thought, according to Macquarie Group Ltd (ASX: MQG).

“We still suspect analyst forecasts are too conservative, as ASX 200 earnings rose just 1% even as stock prices rose 10%,” said the broker.

“All else being equal, by bringing forward the end of the pandemic, we think the positive vaccine news should have led to earnings upgrades for the December half of Calendar 2021.

“The PE spike in Covid-19 losers is likely the market signalling that EPS [earnings per share] upgrades are coming.”

ASX COVID losers on an earnings upgrade path

The COVID-19 losers refer to ASX stocks that have taken the brunt of the market sell-off since the pandemic.

These include the Webjet Limited (ASX: WEB) share price, the Flight Centre Travel Group Ltd (ASX: FLT) and the Unibail-Rodamco-Westfield CDI (ASX: URW) share price.

Why ASX miners will also get upgraded

Another group of ASX stocks that is almost certain to be upgraded is mining. The price of iron ore spiked yesterday after Vale SA downgraded its 2020 and 2021 production guidance.

The supply shortfall is a boon to the BHP Group Ltd (ASX: BHP) share price, Rio Tinto Limited (ASX: RIO) share price and Fortescue Metals Group Limited (ASX: FMG).

Analysts had been expecting the iron ore price to weaken from current levels. But the new demand-supply imbalance means this view will need to be revisited. This spells earnings upgrades for our iron ore producers.

Other tailwinds supporting the Santa Rally

But earnings upgrades aren’t the only reasons to feel bullish about the near-term performance of ASX stocks.

“After the strong returns last month, there is a fear of a near-term pullback, but we could still see a Christmas rally,” added Macquarie.

“Australia is well positioned with RBA QE on automatic pilot (i.e. at least $5bn per week), plus fiscal stimulus and a lack of domestic Covid-19 cases.”

Ho Ho Ho, fellow Fools!

More reading

• Why the Woodside (ASX:WPL) share price is edging higher today
• ASX 200 up 0.3%: Premier Investments update, big four banks rise, gold miners tumble
• Goldman says buy the Metcash (ASX:MTS) share price ahead of next week’s results
• What do big brokers think about soaring commodity prices and ASX mining shares?
• Will ASX kick out companies that don’t have board diversity?

Motley Fool contributor Brendon Lau owns shares of BHP Billiton Limited, Rio Tinto Ltd., and Webjet Ltd. Connect with me on Twitter @brenlau.

The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Are ASX stocks about to get an earnings upgrade boost in the new year? appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/36BKKmA

In afternoon trade the S&P/ASX 200 Index (ASX: XJO) looks set to end the week on a strong note. At the time of writing, the benchmark index is up 0.5% to 6,646.2 points.

Four shares that have failed to follow the market higher today are listed below. Here’s why they are dropping lower:

BetMakers Technology Group Ltd (ASX: BET)

The BetMakers share price is down 10% to 64 cents. Investors have been selling the company’s shares after an update on its potential game-changing acquisition of assets from Sportech. This morning BetMakers revealed that Sportech has received a takeover offer from Standard General. It has granted Standard General due diligence in the hope of receiving a firm offer.

Medical Developments International Ltd (ASX: MVP)

The Medical Developments International share price is down 4.5% to $6.61 following the release of a trading update. The healthcare company revealed that it has been struggling with COVID-19 related headwinds. As a result, its first half result is expected to be softer than the prior corresponding period.

Qantas Airways Limited (ASX: QAN)

The Qantas share price is down 3.5% to $5.29. This may be due to profit taking after some strong gains by the airline operator over the last 30 days. In fact, even after today’s gain, the Qantas share price is up a sizeable 16% since this time last month. The reopening of domestic borders and positive COVID-19 vaccine news has given its shares a big boost.

Zip Co Ltd (ASX: Z1P)

The Zip share price has fallen almost 3% to $5.61. Investors have been selling the buy now pay later provider’s shares since the release of its November update on Wednesday. Zip reported a record result across all regions. This led to record transaction value of $577.1 million in November, up 44% on October and over 100% year on year. It appears as though investors were expecting even more from the company.

More reading

• REX Airlines (ASX:REX) share price rockets up 13%, smashing 52-week high
• Why the BetMakers (ASX:BET) share price is crashing 15% lower today
• Medical Developments International (ASX:MVP) share price on watch after trading update
• Top brokers name 3 ASX shares to sell today
• Qantas (ASX:QAN) share price in focus after market update

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 Medical Developments International Limited and ZIPCOLTD FPO. The Motley Fool Australia has recommended Medical Developments International Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why BetMakers, Medical Development International, Qantas, & Zip are dropping lower appeared first on The Motley Fool Australia.

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

The Regional Express Holdings Ltd (ASX: REX) share price is soaring again today, up 13.24 to $1.94 and smashing its 52-week high. 

Let’s take a look at what’s lifting the Rex share price this month.

What happened in December?

Shares in the airline have gained ground by more than 27% in December, following Rex’s announcement that it will start flying the Sydney-Melbourne route in March 2021.

The airline plans to extend that service to Brisbane by Easter, effectively opening the ‘golden triangle’ routes for the company and putting Rex’s business head-to-head with the major airlines. 

The Sydney-Melbourne route was the second busiest domestic route in the world prior to the coronavirus pandemic, with the Seoul-Jeju route in South Korea taking the number one spot. 

The Sydney-Melbourne-Brisbane routes meanwhile, are collectively known as the ‘golden triangle’, as they are the busiest and most lucrative domestic routes in Australia. 

Analysts see the entry of Rex into the domestic capital cities market as one of the biggest shake-ups in Australian aviation history. 

To celebrate the launch of the new route, Rex has offered 100,000 promotional fares for its Sydney-Melbourne services. Sales in the special fares started on 2 December, with prices from $79 for travel within 12 months.

More about Rex Airlines and its competition

Rex has been in business for 18 years, founded by former Ansett Australia employees who acquired Hazelton Airlines and Kendell Airlines and merged the two companies into Rex Airlines.

In the early years, Rex only operated a small fleet of turboprops to provide essential regional connectivity. 

The recent announcement will pit Rex’ business against major low-carrier competitors, as its prices are cheaper than a Virgin Airlines (which is currently delisted from the ASX) flight at a similar time slot.

The post-administration Virgin 2.0 has said that it plans to target ‘value-conscious’ customers after a strategic review of its business-class offering, inflight Wi-Fi and entertainment.

Rex’ prices are more in line with Qantas Airways Limited (ASX: QAN)’s budget offshoot Jetstar, which also announced its own sales promotion billed as ‘the biggest airfare sale of the year’, two weeks ago. Jetstar’s popular ‘Return for Free’ sale went live on 17 November, with 400,000 return trips across 51 domestic routes up for grabs.

About the Rex share price in 2020

The Rex share price has gained 60% this year. In March, the share price dropped more than 60% after the COVID-19 lockdown closed most of Australia’s state borders. 

Rex was severely affected by the lockdowns in the first half of the year, and received $62 million in government aid. It also signed a deal with the private Asian investment company PAG for $150 million to fund its expansion, which could see PAG eventually own half of Rex.

Rex currently commands a market cap of $187 million.

More reading

• Qantas (ASX:QAN) share price in focus after market update
• Why this fund manager believes Qantas (ASX:QAN) could emerge “larger and more valuable”
• REX Airlines (ASX:REX) share price flies as promotional fares go on sale
• Flight Centre and Mesoblast were among the most traded shares on the ASX last week
• Which ASX travel shares performed the best in November? 

Motley Fool contributor Eddy Sunarto 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 REX Airlines (ASX:REX) share price rockets up 13%, smashing 52-week high appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/2JyZxWq

The Nuix Limited (ASX: NXL) share price has surged higher on Friday after completing its highly anticipated initial public offering (IPO).

The analytics software provider’s shares are up a massive 47% to $7.80 at the time of writing.

At one stage, the Nuix share price was up as much as 69.5% to $9.00.

What is Nuix?

Nuix is a leading provider of investigative analytics and intelligence software with a vision of “finding truth in a digital world.”

It helps customers from around the world in many different industry verticals process, normalise, index, enrich, and analyse data from a multitude of different sources.

Its software has been used in a number of important investigations over the last decade and a half. This includes the Panama Papers, the Banking Royal Commission, organised crime rings, corporate scandals, and terrorist activities.

In FY 2020, Nuix reported a 25.9% increase in total revenue to $175.9 million. This revenue is largely from subscriptions, with subscription revenues now accounting for 88.7% of its total revenue.

This led to gross profit of $155.2 million and earnings before interest, tax, depreciation and amortisation (EBITDA) of $55.5 million.

Looking ahead, in FY 2021, management is forecasting total revenue of $193.5 million, gross profit of $166.7 million, and EBITDA of $63.6 million. This represents growth of 10%, 7.4%, and 14.6%, respectively.

The Nuix IPO.

Nuix was able to raise approximately $953 million through the issue of 179.5 million shares at an offer price of $5.31 per share.

It also raised proceeds of approximately $677.4 million for existing shareholders, such as Macquarie Group Ltd (ASX: MQG), through the sale of approximately 127.6 million shares at the same price.

These funds will be used to repay existing debt and provide funding and financial flexibility to support its growth strategy and future growth opportunities.

Chairman Jeff Bleich commented: “Nuix’s growth strategy seeks to expand its presence across geographies and in targeted industry verticals by winning new customers, employing an industry‑centric “land and expand” strategy across industry verticals, continued investment in functionality of the Nuix platform, and improvements in overall operating efficiency and extracting potential benefits of increased scale.”

“In addition, Nuix believes that growth can be accelerated by focusing on building a network of strategic partners to provide complementary delivery and market expansion capabilities, as well as through a considered approach to value accretive mergers and acquisitions,” he concluded.

More reading

• ASX 200 rises on Thursday
• Macquarie (ASX:MQG) share price lags on $2.3bn takeover
• $1.7 billion Aussie tech company finally lists on ASX
• CBA (ASX:CBA) and the ASX banks just had an amazing month
• Here’s when your ASX bank dividends are being paid in December

The post The Nuix (ASX:NXL) share price zoomed 69% higher following its IPO appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/2Ia1vvD

The Woodside Petroleum Limited (ASX: WPL) share price is edging higher, up 0.57% in early afternoon trading. This morning’s gains bring Woodside’s share price up 31% since crude oil prices started to rally on 1 November. That compares to a 12% gain for the broader S&P/ASX 200 Index (ASX: XJO).

Woodside shareholders have 2 new developments to analyse today.

First, Woodside has opted to pre-empt independent oil and gas explorer Far Ltd‘s (ASX: FAR) sale of its stake in the Sangomar asset in Senegal. (Note, FAR shares have been suspended since 14 September.)

Second, OPEC+ has reached an interim decision on its 2021 output levels.

We’ll look at both below. But first…

What does Woodside do?

Woodside Petroleum is the largest operator of oil and gas production in Australia and also Australia’s largest independent dedicated oil and gas company.

Founded in 1954 and headquartered in Perth, Woodside also has a portfolio of offshore platforms, oil floating production storage and off-loading vessels. It holds operating assets both in Australia and internationally. Woodside shares first listed on the Australian exchange in 1971.

What did Woodside announce about FAR’s Sangomar transaction?

In an announcement to the ASX this morning, Woodside revealed it is exercising its right to pre-empt the sale of FAR’s entire participating interest in the Rufisque, Sangomar and Sangomar Deep (RSSD) joint venture in Senegal to India’s ONGC Videsh Vankorneft Pte Ltd.

FAR has a 13.67% interest in the Sangomar exploitation area and a 15% interest in the remaining RSSD evaluation area.

Woodside will match the terms of the pre-empted transaction. That includes a payment of $45 million and the reimbursement of FAR’s share of working capital from 1 January 2020 through to completion. FAR may also be entitled to certain contingent payments, with those payments capped at US$55 million.

Woodside is funding the acquisition from its current cash reserves.

Commenting on the transaction, Woodside CEO Peter Coleman said:

Sangomar is an attractive, de-risked asset in execute phase, offering near-term production. The acquisition is value accretive for Woodside shareholders and results in a streamlined joint venture which will assist in our targeted sell-down in 2021.

We plan to commence development drilling next year as we progress the project to targeted first oil in 2023.

FAR shareholders and the Senegal government still need to approve the acquisition before it’s finalised.

OPEC+ opts for small increase

In other developments with the potential to impact Woodside’s share price, OPEC+ reached a belated decision yesterday (overnight Aussie time) on its production levels for 2021.

The group, which includes Russia, agreed to up total crude production by 500,000 barrel per day commencing in January. Acknowledging the crimp in demand from the ongoing pandemic, OPEC will meet monthly to determine future production levels.

Brent crude edged higher overnight and is up 2.7% since 1 December, trading for US$48.71 per barrel.

Any further rises in the price of oil should add a welcome tailwind to the Woodside share price.

More reading

• ASX 200 up 0.3%: Premier Investments update, big four banks rise, gold miners tumble
• Goldman says buy the Metcash (ASX:MTS) share price ahead of next week’s results
• Will ASX kick out companies that don’t have board diversity?
• 5 things to watch on the ASX 200 on Friday
• ASX 200 rises on Thursday

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 Why the Woodside (ASX:WPL) share price is edging higher today appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3qrGzl5

The Bank of Queensland Limited (ASX: BOQ) share price is on the rise today, up 1.22% at the time of writing to $7.88 a share. 

Bank of Queensland shares are now up more than 25% over the past month alone, up more than 37% over the past 6 months, and up more than 70% since 14 May. The Bank of Queensland share price is also up 7.8% year to date.

So what’s the latest from this ASX banking share?

Just before the market open this morning, we got a market announcement from Bank of Queensland regarding a dividend payment.

This dividend is scheduled to be paid on 15 February 2021, and will go ex-dividend on 28 January. It will be for the sum of 56.41 cents a share. That would translate into a hefty 7.85% dividend yield on the current BOQ share price – quite a haul, one might think. If this was a normal dividend. Which it is not.

BOQ dividend announced, but it’s not for everyone

No, the dividend announced this morning is not one for ordinary shareholders. Bank of Queensland has already paid its final dividend for 2020, which was dished out last month on 25 November. That dividend was worth 12 cents a share (worth a yield of 1.53%, or 3.06% annualised on current pricing).

Instead, the announcement this morning was for a specific type of shareholder, specifically those owning “CAP NOTE 3-BBSW+3.80% PERP NON-CUM RED T-05-27”.

In other words, those owning Bank of Queensland capital notes. Capital notes are a form of loan, or bond. They don’t necessarily represent ownership of the company itself like an ordinary share does, although there are such things as ‘convertible notes’.

In this way, these assets have a different risk profile and regulatory structure. Think of the payment announced today as interest for a loan, rather than a share of the company’s profits, i.e. a normal dividend. That’s why it appears to have such a large yield.

But these capital notes trade independently of the BOQ share price itself. This particular batch has the ticker symbol of ‘BOQPF’ and were issued just a few days ago on 30 November.

Bank of Queensland initiated this traunch of capital notes back in October in order to raise additional funds for the business. The bank was able to rake in $260 million from the program. The announcement today could be behind the Bank of Queensland share price’s slight outperformance today. But this announcement was not entirely unexpected, so it’s difficult to know for sure.

More reading

• Why Adore Beauty, Bank of Queensland, Bega Cheese, & McPherson’s are dropping lower
• Bank of Queensland (ASX:BOQ) issues Capital Notes 2 as bank shares fall
• Here’s the ASX bank share rated as a conviction buy

Motley Fool contributor Sebastian Bowen 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 The Bank of Queensland (ASX:BOQ) share price is lifting today. Here’s why appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/33FyrUc