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The investment world has completely changed over the past year with interest rates in the US and Australia now much higher than before. In turn, term deposits are offering much better rates. But, ASX dividend shares can offer much bigger dividend yields.

While it’s pleasing that safe assets, like term deposits and high-interest savings accounts, do offer stronger returns, they don’t offer the potential for self-funded growth.

But, when an ASX dividend share has a high dividend payout ratio and/or a low price/earnings (P/E) ratio, it can end up in a very big dividend yield.

We’re almost three-quarters of the way through FY23, so I’m going to focus on what the dividend yields might be in FY24, which includes current expectations of any economic slowdown.

According to Canstar, the best rate of offer from a 12-month term deposit is 4.5%. So let’s check the returns on the following shares:

Shaver Shop Group Ltd (ASX: SSG)

Shaver Shop is one of the leaders in retail products related to hair removal. It has a national network across Australia, as well as a growing presence in New Zealand. Shaver Shop also sells items like oral care, grooming products, and so on.

The business trades on a low price-to-earnings (P/E) ratio, enabling the share to have a very high dividend yield.

According to Commsec, the business is expected to pay a dividend per share of 10.7 cents in FY24.

At the current Shaver Shop share price, that translates into a grossed-up dividend yield of 13.9%, with further growth expected in FY25.

JB Hi-Fi Limited (ASX: JBH)

JB Hi-Fi is one of the largest retailers in Australia with its national networks of JB Hi-Fi stores as well as its network of The Good Guys stores. While the business sells items such as TVs, it also sells products that many households may view as essential such as fridges, phones, and computers.

During the COVID-19 period, and even in the first half of FY23, the ASX dividend share sold elevated levels of items to consumers as spending was redirected.

That’s why the JB Hi-Fi dividend is expected to drop by almost 25% to around $2.28 per share in FY24, according to Commsec.

At the current JB Hi-Fi share price, that translates into a grossed-up dividend yield of 7.5%.

Adairs Ltd (ASX: ADH)

Adairs is a furniture and homewares retailer. It sells through three different brands – Adairs, Focus on Furniture, and Mocka. The business is trying to grow through a combination of a store rollout, membership growth, larger stores, and improved efficiencies.

The ASX dividend share is another that saw a big earnings boost during the COVID-19 period.

In FY24, its dividend is predicted to be 19 cents per share, according to Commsec.

At the current Adairs share price, that works out to be a grossed-up dividend yield of 11.7%. As well, further dividend growth is expected in FY25.

The post The highest-paying term deposit right now offers 4.5% interest. Here are 3 ASX dividend shares paying way more appeared first on The Motley Fool Australia.

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More reading

• These 3 ASX 300 shares are dividend dynamos!
• Top ASX small-cap shares to buy in March 2023
• I’d aim for $1 million, thanks to just a few ASX shares
• Invest in this 7%+ ASX 300 dividend stock for passive income
• Should I target $1,000 of annual dividends by investing $10,000 today?

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 positions in and has recommended Adairs. The Motley Fool Australia has positions in and has recommended Adairs. The Motley Fool Australia has recommended Jb Hi-Fi. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) share Brickworks Limited (ASX: BKW) could be a good contender for unlocking pleasing monthly passive income in the form of dividends.

However, the business doesn’t pay dividends every single month. It dishes out a payment to investors every six months. So, I think it’s best to think of a monthly total as an annual figure that’s divided into twelve equal parts.

Brickworks is a diversified business with a number of different segments, including Australian building products (it is Australia’s biggest brickmaker), US building products, industrial property, and investments.

The ‘investments’ refers to owning a large chunk of investment conglomerate Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shares and robotic bricklayer business FBR Ltd (ASX: FBR) shares.

Monthly dividend income goal

To make $1,000 a month of dividend passive income, we’re talking about $12,000 of annual income.

The current estimate on Commsec is that Brickworks is going to pay an annual dividend per share of 65 cents.

For investors to receive $12,000 of annual passive income, they’d need 18,462 Brickworks shares.

The Brickworks dividend could then increase to 67 cents per share in FY24 and 69 cents per share in FY25. If investors focused on the FY25 annual payment, investors would only need 17,392 shares to get the annual passive dividend income goal of $12,000.

What is the yield?

Brickworks isn’t the highest-yielding ASX dividend share around but with the steady dividend growth, it can steadily increase the yield-on-cost for investors.

Based on the forecast FY23 dividend, the forward grossed-up dividend yield could be 3.9%. By FY25, the Brickworks grossed-up dividend yield is predicted to be 4.1%.

Brickworks says that its dividend is essentially funded by dividends from its Soul Pattinson shares and the net rental income from the industrial property trusts that it owns alongside Goodman Group (ASX: GMG).

Dividend reliability

Brickworks says that it has a long history of dividend growth. Indeed, the company says it has been 46 years since normal dividends were last decreased – in 1976.

Brickworks said it’s “proud” of its long history of dividend growth and the “stability” it provides to shareholders.

Over the prior 20 years, it has increased its dividend at a compound annual growth rate (CAGR) of 7.1% per annum.

The post $1,000 in monthly passive income? Buy 18,462 shares of this ASX 200 stock appeared first on The Motley Fool Australia.

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More reading

• 3 ASX shares I own for passive income
• Should I target $1,000 of annual dividends by investing $10,000 today?
• If inflation has peaked, these are the ASX 200 shares I’ll snap up
• ASX investors: 3 of the best Aussie dividend stocks to buy this year
• Banking on term deposits to retire rich? I’d buy ASX 200 dividend shares instead

Motley Fool contributor Tristan Harrison has positions in Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Goodman Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The dust has settled on the February earnings season, giving us the opportunity to now reflect on the ASX shares that reported.

Unlike a typical recap of the standout winners and losers, I wanted to do something a little different — maybe more valuable — than other reporting season post-mortems.

While it can be useful to know which companies smoked expectations and which left their shareholders bitterly disappointed, often those exceptional reports are met with similarly exceptional moves in the share price (either positive or negative).

I’m more interested in the ASX shares with solid numbers that were maybe underappreciated. In my eyes, these could be companies that the broader market is disregarding for reasons outside of the fundamentals. But, in the long run, those fundamentals become rather hard to ignore.

So, here are the companies that failed to attract the level of attention I believe would be commensurate with their results.

The ASX shares working hard when no one is watching

Netwealth Group Ltd (ASX: NWL)

Netwealth brings wealth management to the twenty-first century with its cloud-based software platform. As its management attests, it is the fastest-growing financial services platform with $11.9 billion of net fund inflows for the 12 months to September 2022.

In my opinion, the Netwealth team delivered on all key objectives in the first half. Funds under administration (FUA) and funds under management (FUM) grew by 12.2% and 10.4% respectively. In turn, the company was able to increase its total revenue by 18.9% to $102.8 million and deliver a statutory net profit after tax (NPAT) of $30.6 million — up 12.9%.

Netwealth is executing its mission to provide a better platform than the big wealth-managing incumbents, as demonstrated by the image above. The company continues to nibble away at the market share of competitors.

How did investors react to the release? The Netwealth share price finished 2.7% higher on 15 February… hardly a move to write home about. Although the ASX share trades on a price-to-earnings (P/E) ratio of 56 times, I think there is a level of underappreciation for the extent of growth that could still lie ahead for Netwealth.

DGL Group Ltd (ASX: DGL)

The next company I believe the market could be sleeping on is chemicals manufacturer, transporter, storer, and processor, DGL Group. Shares in this ASX small-cap share finished flat after the company released its first-half results to the market on 28 February.

After a string of acquisitions during the half, DGL reported a 52% increase in sales revenue compared to the prior corresponding period. Impressively, the company notched up its earnings before interest, taxes, depreciation, and amortisation (EBITDA) by 35%.

I have a suspicion that the market may have written off DGL’s growth as purely a byproduct of acquisitions. However, as noted in the presentation, 69% of EBITDA growth was organic. Morgans also highlighted that the result showed an ability to grow organically. The broker currently has a buy rating on the ASX share.

What I find enticing about this company, that I think others are overlooking, is the moat it is building through its geographic footprint. Its operations are widely spread across Australia and New Zealand through its network of warehouses (see here). Such a network is difficult to replicate without significant capital.

In my opinion, the expanded network could give DGL an edge in terms of beating competitors on price for transport and product (due to scale) and time for delivery fulfilment (due to proximity).

Supply Network Limited (ASX: SNL)

The last ASX share that I think the market snubbed upon the release of its results during the earnings season is Supply Network. This company sells after-market parts primarily for trucks and buses within Australia and New Zealand.

Simply put, Supply Network’s results were extremely strong. Shares lifted a dismal 0.3% on the day of the company’s reporting. The half-year filing left a bit to be desired in terms of commentary and added details.

However, the numbers speak to a period of continued demand for parts. In quantifiable terms, revenue increased by 23.6% to $119.2 million, while net profits surged 34.1% to $12.7 million. These figures add to a consistent growth trend over the past five years, as depicted below.

Furthermore, analysts at Ord Minnet think the outlook is still solid for Supply Network with the broker holding an accumulate rating on the ASX share.

Personally, I share a similar perspective. Cost pressures could linger for a year or two, nudging the average tenure of truck ownership higher. As a result, replacement parts could be in higher demand.

Aside from this, the company’s balance sheet is in the strongest position its been in years, opening the door to additional growth avenues.

The post Underappreciated: 3 ASX shares I believe were the quiet achievers of earnings season appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Wake up! Buy 5 ASX shares that are reporting season gems: Morgans
• 7 ASX 200 growth shares to buy for possible takeovers: expert
• 3 ASX 200 shares on the move amid strong earnings updates
• Why Cochlear, GUD, Netwealth, and Wesfarmers shares are charging higher

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 positions in and has recommended DGL Group, Netwealth Group, and Supply Network. The Motley Fool Australia has positions in and has recommended Netwealth Group and Supply Network. The Motley Fool Australia has recommended DGL 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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Consumers, businesses and the share market are all, understandably, worried about an economic slowdown after ten consecutive months of interest rate rises.

But the recent reporting season showed how one industry is defying the odds, with Australians throwing cash at it like it’s going out of fashion.

Wilsons equity strategist Rob Crookston was impressed.

“While a number of services businesses performed admirably in 1H23, none have quite measured up to the strength of those leveraged to the rebound in travel,” he said in a memo to clients.

“[Travel companies] reported exceptional results as the significant pent-up demand following years of restrictions continued to be unleashed by consumers.”

Travel stocks have done pretty well, but there’s more to come

Despite many travel shares in the S&P/ASX 200 Index (ASX: XJO) taking off in price the past year, Crookston’s team is convinced the boom will continue this year.

In fact, he reckons the market still hasn’t fully woken up to how profitable the industry will be.

“We have been positive on the ‘re-opening thematic’ for some time on the view that the market has underestimated the significant amount of pent-up demand for travel, which has helped keep air passenger volumes elevated, even in the face of elevated prices and the broader consumer slowdown,” said Crookston.

“The reopening still has legs.”

The hot demand will last well into the 2024 financial year, according to Crookston, who said consumers were prioritising travel costs over other non-discretionary expenses.

“China’s recent re-opening from lockdown provides another tailwind for the sector.”

The best ASX travel shares to buy right now

As for which specific ASX shares are the best exposures to this trend, Crookston’s team is recommending investors go “overweight” on Qantas Airways Limited (ASX: QAN) and IDP Education Ltd (ASX: IEL).

The Qantas share price has already rocketed more than 32% over the past 12 months.

“We still believe Qantas is an attractive investment opportunity, given its discount to US peers, the ongoing strength in travel volumes, its leaner cost base post-pandemic, and the attractive industry structure with Virgin and Qantas operating as an effective duopoly.”

The Wilson team had its bullish thesis confirmed with Qantas’ first-half results.

“Qantas guided that travel demand is expected to remain strong into FY24, while group capacity continues to increase strongly and airfares are still elevated.”

International education placement provider IDP is a recent addition to Wilson’s focus portfolio, according to Crookston.

The Chinese government’s recent ruling that its students must attend face-to-face classes to have credentials from Australian universities recognised is a major coup for IDP Education.

“Longer term, IDP Education is exposed to significant secular tailwinds, including the rise of India’s middle class, increased university participation rates and rising international student mobility.”

The reporting season update showed off some incredible numbers.

“IDP Education’s 1H23 update demonstrated the ongoing acceleration in student placement volumes which increased +53% vs the prior comparable period.”

IDP shares are currently trading 6.2% lower than they were a year ago.

The post ‘Still has legs’: Not too late to buy these 2 stellar ASX 200 shares, says expert appeared first on The Motley Fool Australia.

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• 7 ASX All Ordinaries shares smashing new 52-week highs today
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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 positions in and has recommended Idp Education. The Motley Fool Australia has recommended Idp Education. 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 Friday, the S&P/ASX 200 Index (ASX: XJO) finished the week on a very disappointing note. The benchmark index sank 2.3% to 7,144.7 points.

Will the market be able to bounce back from this on Monday? Here are five things to watch:

ASX 200 expected to fall again

The Australian share market looks set to start the week in the red following a poor finish to the last one on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 39 points or 0.55% lower this morning. On Wall Street, the Dow Jones was down 1.1%, the S&P 500 fell 1.45%, and the NASDAQ dropped 1.8%.

Oil prices rise

ASX 200 energy shares including Santos Ltd (ASX: STO) and Beach Energy Ltd (ASX: BPT) could have a decent start to the week after oil prices rose on Friday. According to Bloomberg, the WTI crude oil price was up 1.3% to US$76.68 a barrel and the Brent crude oil price rose 1.45% to US$82.78 a barrel. A solid US payrolls update gave prices a boost.

Bank shares on watch

Bendigo and Adelaide Bank Ltd (ASX: BEN), Commonwealth Bank of Australia (ASX: CBA), and other ASX 200 banks will be on watch today after a bank run led to the collapse of Silicon Valley Bank (SVB) on Friday. In addition, investors will be waiting to hear if any ASX 200 tech stocks had any cash held in one of the US bank’s uninsured savings accounts.

Gold price charges higher

Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could have a great start to the week after the gold price stormed higher on Friday night. According to CNBC, the spot gold price rose 1.8% to $1,867.20 per ounce. Strong demand for safe haven assets boosted the precious metal.

Core Lithium shares remain a sell

The Core Lithium Ltd (ASX: CXO) share price remains overvalued despite recent weakness. That’s the view of analysts at Goldman Sachs, who have reiterated their sell rating and 90 cents price target. Goldman has been looking at the lithium market and nots continued weakness in spot prices.

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

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More reading

• Guess which ASX 200 stock has landed 3 substantial shareholders in a week
• Here’s how I would secure monthly dividends in the 2024 financial year with these ASX stocks
• Here are the 3 most heavily traded ASX 200 shares on Friday
• ASX 200 sinks to 2-month low on US market jitters
• Why are ASX 200 lithium shares falling so hard 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 positions in and has recommended Bendigo And Adelaide Bank. 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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Last month’s ASX reporting season was “a mixed bag” — but one massive trend was clear to everyone.

That’s according to Wilsons equity strategist Rob Crookston, who is in no doubt that ten consecutive months of interest rate rises is causing immense pain for Australians.

“Reporting season provided further evidence that consumers are paring back their expenditure on discretionary goods and big-ticket items, as pulled-forward demand from COVID unwinds and cost of living pressures eat into household budgets,” he said in a memo to clients.

Crookston noted how sales have fallen for many retailers, compared to a year earlier.

This is starting to cause a pile-up in warehouses, which can trigger multiple negative effects.

“The moderating consumer demand backdrop has driven a rise in inventory levels for some names,” he said.

“Not only is sitting on elevated inventories often a forward indicator of softening demand, it can also create additional costs (e.g. warehousing) while it weighs on free cash flows and increases the risk of product obsolescence, which can necessitate an increase in promotional activity to clear stock.”

The tightening of wallets is even impacting businesses that sell essential goods.

“There has also been increasing commentary that consumers are ‘trading down’, with Woolworths Group Ltd (ASX: WOW) CEO Brad Banducci saying consumers were eating more at home rather than dining out, for example.”

The stocks to avoid and one to buy right now

So what does this mean for ASX share investors?

The most straightforward tip from Crookston is to avoid buying into the sectors that are directly hurt by a decline in shoppers.

“The focus portfolio has no exposure to the retail or consumer goods sectors, which we think are close to peak (cyclical) earnings.”

However, there is an opportunity to buy ASX shares of businesses that provide consumer services.

These companies are “continuing to benefit from the shift of spending from goods to services and have attractive long-term earnings growth potential”. 

Crookston’s top buy in this category is Lottery Corporation Ltd (ASX: TLC), which boasts “predictable, infrastructure-like cash flows that are underpinned by its long-dated licences”.

“The Lottery Corporation had a stellar 1H23 result, which included EBITDA growth of +15.8% as lottery sales were resilient,” he said.

“At the same time, margins benefitted from an increasing penetration of the digital channel.”

The great tailwind for the company is the “defensive nature of lottery demand”, which has shown resilience in the past through tough economic conditions.

The post Big lesson from reporting season: STAY AWAY from these ASX shares, says expert appeared first on The Motley Fool Australia.

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More reading

• ‘A rocky road ahead’: Expert names 2 ASX 200 shares to thrive in a tough 2023
• Here’s how I would secure monthly dividends in the 2024 financial year with these ASX stocks
• Goldman Sachs says buy Woolworths stock for reliable dividends AND 10% share price growth
• How can I hope to retire rich when the share market is falling?
• Buy these ASX 200 dividend shares for passive income: analysts

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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If you’re a growth investor looking for some new options, then you might want to consider exchange traded funds (ETFs).

There are a number of ETFs out there that allow investors to buy a slice of some high quality growth shares through a single investment.

Two such ETFs that will allow you to achieve this are listed below:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The first ETF for growth investors to look at is the BetaShares Asia Technology Tigers ETF.

This ETF gives investors exposure to approximately 50 of the most promising tech companies in the Asian market (excluding Japan). Among the fund’s top holdings you will find tigers such as Alibaba, Baidu, Infosys, JD.com, Kuaishou Technology, Meituan Dianping, Pinduoduo, Samsung, Tencent.

In respect to Pinduoduo, it is a leading ecommerce platform that connects distributors with consumers directly through an interactive shopping experience. This allows the latter to team up to buy items in bulk at lower prices. At the last count, the company had a massive 875 million active customers.

BetaShares Global Cybersecurity ETF (ASX: HACK)

Another ETF for growth investors to look at is the BetaShares Global Cybersecurity ETF.

This ETF gives investors exposure to the leading companies in the global cybersecurity sector.

Among the companies you’ll be buying a piece of are Accenture, Cisco, Cloudflare, Crowdstrike, Okta, and Splunk. These all look well-positioned to benefit from the increasing demand for cybersecurity services as cyber attacks increase and more infrastructure moves to the cloud.

In respect to CrowdStrike, it is a provider of incident response and forensic analysis services via its Falcon platform. Its services are designed to help businesses understand whether a breach has occurred. It then allows the user to respond and recover from a breach with speed and precision to remediate the threat.

The post 2 top ETFs for ASX growth investors to buy next week appeared first on The Motley Fool Australia.

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More reading

• 3 excellent ETFs for ASX investors to sink their money into this month
• 3 ETFs for smart ASX investors in March
• Why I’m not investing in ASX index ETFs (yet)
• 2 ASX ETFs I’d buy as a beginner investor
• 2 exciting ETFs for ASX growth investors to buy next week

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. 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. 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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Last week saw a number of broker notes hitting the wires once again. Three buy ratings that investors might want to be aware of are summarised below.

Here’s why brokers think investors ought to buy them next week:

Pilbara Minerals Ltd (ASX: PLS)

According to a note out of Citi, its analysts have retained their buy rating and $4.80 price target on this lithium miner’s shares. Although it expects that lithium prices may remain under pressure in the immediate term, Citi suspects that they could rebound in the coming months as restocking takes place in the Chinese battery materials market. The Pilbara Minerals share price ended the week at $3.98.

Rio Tinto Ltd (ASX: RIO)

A note out of Goldman Sachs reveals that its analysts have put a conviction buy rating on this mining giant’s shares with an improved price target of $140.40. Goldman is bullish due to Rio Tinto’s iron ore production growth outlook and its potential free cash flow per tonne improvements. It also believes that iron ore prices could be heading to US$150 a tonne in the near term thanks to supply deficits and restocking. The Rio Tinto share price was fetching $117.28 at Friday’s close.

Xero Limited (ASX: XRO)

Analysts at Goldman Sachs have also retained their conviction buy rating on this cloud accounting platform provider’s shares with an improved price target of $116.00. This follows news that Xero is making major cost reductions. Goldman was pleased with the news and has upgraded its earnings estimates for the coming years to reflect the changes. The Xero share price ended the week at $86.73.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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If you’re searching for dividend shares to buy when the market reopens, then it could be worth checking out the two listed below.

Here’s why they have been tipped as buys:

Accent Group Ltd (ASX: AX1)

The first ASX dividend share to consider buying is Accent Group. It is the fashion and footwear retailer behind brands including Hype DC, The Athlete’s Foot, Glue, Platypus, Sneaker Lab, and Stylerunner.

Despite the cost of living crisis, the company has been performing very strongly. This has been driven thanks to the popularity of its brands and its exposure to younger consumers, which have less exposure to rising rates and more exposure to increases in the minimum wage.

Goldman Sachs is fan of the company and has a buy rating and $2.90 price target on its shares. It commented:

We believe AX1 offers an attractive exposure to a young Australian consumer that is uniquely resilient to inflationary and broader economic pressures given (1) a high proportion live at home; (2) more than two-thirds are working; (3) high and increasing minimum wage entitlements and; (4) a heavy skew towards discretionary spending.

As for dividends, the broker is forecasting a fully franked dividend of 15 cents per share in FY 2023. Based on the current Accent share price of $2.32, this will mean a yield of 6.5%.

Westpac Banking Corp (ASX: WBC)

Another ASX dividend share to buy according to analysts is Westpac.

It is Australia’s oldest bank and the name behind the eponymous Westpac brand and a number of regional brands such as Bank SA and St George.

Morgans is a fan of the company and has an add rating and $25.80 price target on its shares. 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.

Morgans is expecting this to lead to a fully franked dividend 153 cents per share in FY 2023. Based on the current Westpac share price of $21.79, this will mean a sizeable 7% yield.

The post Buy Westpac and this ASX dividend share next week: analysts appeared first on The Motley Fool Australia.

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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 Accent Group and 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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The A2 Milk Company Ltd (ASX: A2M) share price has performed admirably in the last year, rising by around 25% and almost reaching $7.

It’s a bit of a redemption story for A2 Milk considering the company was trading at around $20 during mid-2020.

The infant formula business is recovering from COVID-19 impacts when there was a huge disruption to daigou buyers.

With the business now reporting positive signs of a turnaround, can things get even better?

Earnings turnaround

A2 Milk reported in the FY23 half-year result that total revenue rose by 18.6% to $783.3 million. There was a very mixed performance within that overall number, though.

While China and other Asian sales increased 54% and sales in the United States went up 61.8%, it was a different story in Australia and New Zealand where sales decreased by 24.6%.

Pleasingly, the company said it reached historical highs in China brand awareness, trial and loyalty metrics. It also achieved record market shares in Chinese label infant formula in ‘mother and baby stores’ and domestic online channels.

The English label infant formula share improved in cross-border e-commerce and daigou channels.

A2 Milk’s earnings before interest, tax, depreciation and amortisation (EBITDA) increased 10.5% to $107.8 million and the net profit after tax (NPAT) increased by 22.1% to $68.5 million. Earnings per share (EPS) jumped 24.1% to 10 cents.

The company said that its share buyback of up to $150 million, which started in the FY23 first half, was 60.1% complete.

Things were good in the first half, but the share market can be very focused on the future, which would then influence the A2 Milk share price.

FY23 growth expected

A2 Milk is expecting FY23 revenue to show growth of low double digits, with an EBITDA margin similar to FY22.

However, there is a negative for the business in terms of the industry dynamics.

The Chinese infant formula market dynamics are “increasingly challenging” due to fewer births in the 2022 calendar year and the rolling impacts from fewer births in prior years on later-stage infant formula products.

A2 Milk also expects that the English label market will “continue to be impacted by the evolving channel dynamics and a further shift towards the China label market.”

My thoughts on the A2 Milk share price

I think A2 Milk has done a really good job of turning things around.

Commsec numbers suggest that A2 Milk is going to generate EPS of 18.9 cents, with further profit growth in FY24 and FY25.

At the current A2 Milk share price, that suggests that it’s valued at 35x FY23’s estimated earnings.

While that isn’t as expensive as a number of ASX growth shares, I think the market now reflects the much-improved outlook, so I’d be less excited to buy today than a year ago. But I still think that it could outperform from here because of the necessary nature of infant formula and international growth.

The post At almost $7, can the A2 Milk share price go any higher? appeared first on The Motley Fool Australia.

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More reading

• What caused the A2 Milk share price to spill almost 6% in February?
• ‘Result was incredible’: 3 ASX 200 shares Jun Bei Liu would buy now
• Why A2 Milk, Altium, Cogstate, and Ingenia shares are sinking today
• Is the A2 Milk share price good value after its post-results selloff?
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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 recommended A2 Milk. 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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