Tag: Motley Fool

Telstra Group Ltd (ASX: TLS) shares are in the green, up 0.61% to $4.13 at the time of writing.

The communications sector is leading the market today. The S&P/ASX 200 Index (ASX: XJO) is down 0.94% while the S&P/ASX 200 Communication Index (ASX: XTJ) is up 0.3%.

Telstra shares are the top stock in the communications services sector by market capitalisation.

Why buy Telstra shares for passive income?

Telstra is known as an ASX dividend stock, not an ASX growth stock. Let’s look at why.

If we look back 20 years, Telstra closed at $4.06 on 7 March 2003. That means they’re up by a measly 1.35% over that entire two-decade period. So yeah, growth ain’t why people buy Telstra shares.

Instead, investors buy for dividends, or in other words, passive income.

This is why Telstra shares have been a classic cornerstone holding in retirees’ portfolios for decades.

It’s an obvious yield share to own because the company provides essential services that Australians will always want. That means it has relative stability in terms of income, making it a great inflation hedge.

Here is a 20-year chart showing the 12-month trailing dividend yield of Telstra shares.

Remember, the dividend yield is always expressed as a percentage of the share price at the time.

The yield is shown in aqua blue and the Telstra share price is shown above in navy blue.

Telstra pays two dividends per year, so about 40 separate 12-month trailing yield points are shown.

As of 31 December 2022, Telstra was paying an annual dividend yield of 4.29%.

But it’s worth noting that Telstra has paid much higher dividends at many points.

The highest dividend yield during this 20-year period was 9.69% back in 2011.

Telstra also paid 8.4% in 2018.

Those are very appealing levels of passive income for a non-ASX mining share and a non-ASX bank share.

What are the brokers forecasting for Telstra dividends?

As we recently reported, top broker Macquarie has put Telstra shares at the top of its example income portfolio for new investors.

Macquarie’s ‘model portfolio’ only includes ASX stocks that provide higher comparative earnings certainty, strong cash flows, and “tax-effective” dividend income, which means franking credits.

Telstra dividends are 100% franked, which means investors get the full 30% company tax benefit.

So, this is clear evidence that Macquarie likes Telstra shares for passive income above all other ASX shares. In fact, Telstra has an 8.8% weighting, which is a very big chunk of the model portfolio.

Will the Telstra dividend go higher?

Macquarie forecasts that Telstra shares will pay a fully franked full-year dividend of 17 cents per share in FY23. Another top broker, Goldman Sachs, is tipping the same for FY23.

Based on the current Telstra share price, this represents a dividend yield of 4.11%.

Looking ahead, Goldman thinks the Telstra dividend will go 5.9% higher in FY24 to 18 cents per share (cps).

It also tips an 11.1% boost to the Telstra dividend in FY25 to 20 cps.

Morgans is tipping 16.5 cps worth of passive income for Telstra investors in both FY23 and FY24.

Telstra shares went ex-dividend last Wednesday. The company will pay investors 8.5 cps on 31 March. This was up from 8 cps last year and ahead of consensus estimates of 8.2 cps.

Is there any share price growth on the horizon?

As discussed, growth is not why people buy Telstra shares. Having said that, there’s some good news on this front.

Morgans has an add rating on Telstra shares and a 12-month price target of $4.70. That means a potential 13.8% capital gain for investors who buy today.

Macquarie has an outperform rating on Telstra with a 12-month price target of $4.64.

Goldman also has a buy rating on Telstra shares with a price target of $4.60.

The post Is now the time to buy Telstra shares for passive income? appeared first on The Motley Fool Australia.

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More reading

• 3 good reasons I’m avoiding CBA shares at all costs!
• Why is the ASX 200 taking a tumble today?
• Why is the Woodside share price wilting 7% on Wednesday?
• ASX 200 bank shares slump could continue: Morgan Stanley
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Bronwyn Allen has positions in Macquarie Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has positions in and has recommended Macquarie Group 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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The S&P/ASX 200 Index (ASX: XJO) has followed Wall Street’s lead and sunk deep into the red. In afternoon trade, the benchmark index is down 1% to 7,295.1 points.

Four ASX shares that aren’t letting that hold them back today are listed below. Here’s why they are charging higher:

Mesoblast Ltd (ASX: MSB)

The Mesoblast share price is up 18% to $1.09. This morning, this biotech company revealed that the US FDA has accepted its Biologics License Application resubmission for remestemcel-L in the treatment of children with steroid-refractory acute graft versus host disease (SR-aGVHD). This isn’t approval but does guarantee that the FDA will make a decision on the treatment by 2 August.

Polynovo Ltd (ASX: PNV)

The PolyNovo share price is up 3% to $2.29. This is despite there being no news out of the medical device company today. However, it is worth noting that S&P Dow Jones Indices recently announced that PolyNovo will be added to the ASX 200 index on 20 March.

Pushpay Holdings Ltd (ASX: PPH)

The Pushpay share price is up 3% to $1.16. This morning, the payments company revealed that Pegasus Bidco is looking into making a new takeover offer after shareholders rejected a NZ$1.34 per share proposal at a recent scheme meeting.

Weebit Nano Ltd (ASX: WBT)

The Weebit Nano share price is up 6% to $7.88. Investors have been buying this memory technology company’s shares this week after it announced the availability of its resistive RAM (ReRAM) IP in SkyWater Technology’s 130nm CMOS process. This means that SkyWater customers can now integrate Weebit’s non-volatile memory in their system-on-chip designs, if they wanted to.

The post Why Mesoblast, PolyNovo, Pushpay, and Weebit Nano shares are charging higher appeared first on The Motley Fool Australia.

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More reading

• Mesoblast share price rockets 23% on FDA news
• Why InvoCare, Pentanet, Sayona Mining, and Weebit Nano shares are storming higher
• Weebit Nano share price just surged 7% on product commercialisation news
• These ASX shares are being dumped from the ASX 200 index this month
• These 4 ASX shares could rocket this month: Here’s why

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 PolyNovo and Pushpay. The Motley Fool Australia has positions in and has recommended Pushpay. 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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When it comes to ASX shares, bigger doesn’t necessarily mean better. Take ANZ Group Holdings Ltd (ASX: ANZ), for example. With a market capitalisation of over $73 billion, this S&P/ASX 200 Index (ASX: XJO) big-four bank has seen its share price dwindle by more than 14% over the past five years.

Of course, that’s not to say stocks at the small end of town don’t also carry risk of major downside. In fact, most would argue small-cap shares bring with them considerably more risk than their ASX large-cap counterparts.

But, chosen carefully, small-cap stocks also have the potential to grow significantly, delivering eye-watering gains for their investors along the way (hello, Afterpay!).

So, if you’re keen to add some pint-sized companies to your investment portfolio in March, here are a few to consider. Because we asked our Foolish writers which ASX small-cap shares they reckon are worth buying right now. Here is what they said:

6 best ASX small-cap shares for 2023 (smallest to largest)

Shaver Shop Group Ltd (ASX: SSG), $146.73 million

Duxton Water Ltd (ASX: D2O), $212.03 million

Universal Store Holdings Ltd (ASX: UNI), $411.99 million

Nick Scali Limited (ASX: NCK), $773.95 million

Nanosonics Ltd (ASX: NAN), $1.34 billion

PSC Insurance Group Ltd (ASX: PSI), $1.73 billion

(Market capitalisations as at 2pm on 8 March 2023)

Why our Foolish writers love these ASX small-cap stocks

Shaver Shop Group Ltd

What it does: Shaver Shop has more than 120 stores across Australia and New Zealand. It sells a wide range of male and female personal grooming products. The retailer aims to be the market leader in “all things related to hair removal”. But it also sells items across oral care, hair care, massage, air treatment, and beauty categories.

By Tristan Harrison: I think Shaver Shop stock could be more defensive in a downturn than some investors are giving it credit for, based on its price-to-earnings (P/E) ratio.

Australian population growth should be a useful tailwind for the business, while ongoing new product launches exclusive to Shaver Shop can also drive earnings.

The business continues to expand its store network, with growth in New Zealand being a focus.

The small-cap ASX share has no debt and continues to pay a very attractive dividend.

Commsec estimates currently suggest that earnings per share (EPS) and dividends could grow each year in FY24 and FY25. The FY23 estimates put the Shaver Shop share price at 9x projected earnings with a grossed-up dividend yield of 12.7%.

Motley Fool contributor Tristan Harrison does not own shares in Shaver Shop Group Ltd.

Duxton Water Ltd

What it does: This small-cap company provides direct exposure to an unusual asset – water. Duxton manages a portfolio of more than 83.6 gigalitres of water entitlements across various regions of Australia. By owning these entitlements, Duxton can lease them out for a fee to farmers requiring flexible water arrangements.

By Mitchell Lawler: The last few years have not been optimal for water leasing. 

A triple La Niña, combined with a Negative Indian Ocean Dipole, has produced years of wet conditions – reducing the demand for Duxton’s portfolio of entitlements. In turn, revenue and earnings have fallen off a cliff while debt on the Duxton balance sheet has increased. 

However, forecasts suggest a return to drier conditions by June this year. If this were to materialise, Duxton could soon see an uptick in the percentage of its water portfolio leased, driving increased revenue and earnings. 

Lastly, the company’s debt level is toward the higher end of what I’d normally be comfortable with. However, there is $114 million worth of unrealised gains on its entitlements that, theoretically, could be used if Duxton was caught in a pinch.

I personally believe this company has solid prospects for growing into a sturdy dividend payer. Currently, shareholders are getting a dividend yield of around 3.7%, with payments guided to grow over the next three halves. 

Motley Fool contributor Mitchell Lawler owns shares in Duxton Water Ltd.

Universal Store Holdings Ltd

What it does: Universal Store is a specialty retailer of youth casual apparel through its Universal Store, Perfect Stranger, and Thrills brands.

By ​​James Mickleboro: I think Universal Store could be a small-cap ASX share worth buying in March. This is due to its attractive valuation, generous dividend yield, and favourable outlook.

The latter is being underpinned by the expansion of the company’s store network and the popularity of its brands with younger consumers, who are less impacted by rising interest rates and have continued to spend largely as normal despite the cost of living crisis.

As for its valuation and yield, Goldman Sachs is forecasting earnings per share of 39 cents and a fully franked 27 cents per share dividend in FY 2023. Based on the current Universal Store share price of $5.37, this means a forward P/E ratio of under 14x and an estimated dividend yield of 5%.

In light of this, it won’t come as a surprise to learn that Goldman has a buy rating and an $8.00 price target on Universal Store shares.

Motley Fool contributor James Mickleboro does not own shares in Universal Store Holdings Ltd.

Nick Scali Limited

What it does: Nick Scali is a growing furniture retailer with a proud 60-year history. It is one of Australia’s largest importers of high-quality furniture direct from manufacturers around the world.

By Bronwyn Allen: Early last month, Nick Scali released its 1H FY23 results. The highlights included a 70% increase in net profit after tax (NPAT), a 53% increase in earnings before interest, tax, depreciation, and amortisation (EBITDA), and a 14% bump to its interim dividend.

That’s all pretty positive, right? Well, guess what the market did to the company’s share price? Killed it. Absolutely smashed it. The Nick Scali share price has dropped by 25% since. And why? Because the company said the outlook was uncertain and it couldn’t provide formal guidance for the next half.

I reckon this is a classic buy-the-dip opportunity. Investing should be for the long term, and I believe the next half – and even this current economic period – will be a blip on the radar in 10 years’ time.

Nick Scali shares are currently trading on a P/E ratio of 7.35x. That’s nuts! (A P/E of 15x is considered cheap.)

Australians are obsessed with property, lifestyle, and home design, so I think Nick Scali is a great stock to add to your portfolio while it’s trading in the mid-$9 range. 

Motley Fool contributor Bronwyn Allen owns shares in Nick Scali Limited.

Nanosonics Ltd

What it does: Nanosonics is an ASX 200 healthcare company specialising in medical disinfection in hospitals and other medical centres.

By Sebastian Bowen: Nanosonics is an exciting ASX small-cap healthcare share. The company specialises in sterilisation techniques, mostly through its flagship Trophon device. This machine delivers leading disinfectant technology for medical equipment.

Nanosonics employs a successful ‘razor-and-blades’ business model of supplying the Trophon device to hospitals and medical centres, but also its high-margin consumable disinfectant and maintenance services.

The company recently posted its latest half-year results. This saw revenues jump by 35% and operating profits before tax surge by a whopping 245%.

Following these numbers, ASX broker Morgans came out with an add rating on Nanosonics shares, complete with a 12-month share price target of $5.24. At the time of writing, the Nanosonics share was sitting at $4.65.

Motley Fool contributor Sebastian Bowen does not own shares in Nanosonics Ltd.

PSC Insurance Group Ltd

What it does: PSC Insurance provides diversified insurance products and services in Australia, New Zealand, Hong Kong, and the United Kingdom. The company has a portfolio of more than 40 trading businesses across its group.

By Bernd Struben: PSC Insurance has an established acquisition-for-growth strategy, which has seen it build a portfolio of businesses ranging from start-ups to mature companies. Its leadership team has a proven track record, and the company provides a vital service that’s in demand in both good economic times and bad.

PSC’s half-year results saw a 19% year-on-year increase in underlying EBITDA to $48.6 million. NPATA increased 27% to $35.2 million, and the dividend of 5.2 cents per share was up 16%.

Pleasingly, management upgraded full-year underlying EBITDA guidance to a range of $104-$108 million (from $101-$105 million) and an underlying NPATA range of $72-$75 million (from $70-$73 million).

The stock trades on a trailing dividend yield of 2.5%, partly franked.

Motley Fool contributor Bernd Struben does not own shares in PSC Insurance Group Ltd.

The post Top ASX small-cap shares to buy in March 2023 appeared first on The Motley Fool Australia.

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More reading

• Why Brainchip, Lynas, Megaport, and Universal Store shares are dropping today
• Morgans names 3 of the best ASX shares to buy in March
• Making the first $1,000 in passive income: These are the ASX shares I would buy first
• 3 ASX shares I own for passive income
• Buy Rio Tinto and this ASX dividend share: Goldman Sachs

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Nanosonics and PSC Insurance Group. The Motley Fool Australia has positions in and has recommended Nanosonics. The Motley Fool Australia has recommended PSC Insurance 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 Zip Co Ltd (ASX: ZIP) share price could be great value at the current level.

That’s the view of the team at Shaw and Partners, which see significant upside potential in its shares.

What is the broker saying about the Zip share price?

According to the note, the broker has responded to the buy now pay later (BNPL) provider’s half-year results by retaining its buy rating with an ever so slightly trimmed price target of $2.02.

Based on the current Zip share price of 53 cents, this implies staggering potential upside of 280% for investors over the next 12 months.

Though, it is worth noting that given the incredibly high reward, the broker’s recommendation comes with a high risk rating.

Why is the broker bullish?

Firstly, Shaw and Partners was impressed with Zip’s performance during the first half. It notes that its results support its investment thesis and provides “evidence towards the turnaround occurring.”

The broker also notes that this was achieved despite operating in a tough economic environment. It commented:

ZIP delivered 1H23 cash NTM’s of 3.5% and gross profit of $122m, which was 35% of revenues and increased YoY ahead of revenues. This is a strong result in the context of the yield (funding/interest rate) and macro (BDD) environment.

Its analysts also appear to see scope for Zip to ease back on its risk settings in the US market given its extremely low credit losses. They add:

We suspect TV has been throttled slightly too much in the USA with credit losses at a measly 1.4%, noting that APT back in the day was targeting NTL of ~2%.

In addition, the broker also believes that this is a clear demonstration of the way that Zip can manage its credit losses (and other factors) better than the market was expecting. It appears to see this as something which could help drive the Zip share price towards its price target over time. It concludes:

Importantly over time we expect recognition to emerge that ZIP can control yields, credit (BDD) and cost base better than the market is currently giving credit towards. Furthermore, ZIP’s product construct is attractive to strategic acquirers in our view with Australia leading the way towards BNPL moving towards credit legislation.

The post Broker tips 280% upside for Zip share price appeared first on The Motley Fool Australia.

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More reading

• Here are the 10 most shorted ASX shares this week
• Zip share price gains amid global asset sale
• Why did the Zip share price crash 26% in February?
• Why is Choice gunning for ASX BNPL companies like Zip?
• Are Zip shares finally cheap enough to buy following last week’s 12% dive?

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 Zip Co. 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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Four S&P/ASX 200 Index (ASX: XJO) mining shares are on the verge of trading ex-dividend.

Investors wanting to receive one or more of those payouts will need to own the stocks by market close today.

So, without further ado, here are the four ASX 200 mining shares going ex-dividend tomorrow.

Four ASX 200 mining shares trading ex-dividend on Thursday

First up we have industry giant, BHP Group Ltd (ASX: BHP).

BHP reported its half-year results on 21 February. Pressured by lower commodity prices during the first months of the reporting period, the miner saw profits from operations drop 27% year on year. That saw the interim dividend reduced by 40%.

Still, eligible investors will receive a fully franked dividend of $1.31 per share.

If you own BHP shares at market close today, you can expect that payment on 30 March.

The next ASX 200 mining share trading ex-dividend tomorrow is Rio Tinto Ltd (ASX: RIO).

Rio Tinto reported its full-year results on 22 February. Like BHP, the miner faced lower iron ore prices and rising labour and energy costs. This saw its net profit after tax (NPAT) fall 41% from the prior year to US$12.4 billion.

This was reflected in the 46% reduction in Rio Tinto’s fully franked final dividend of $3.27 per share. Payment is due on 20 April.

Also trading ex-dividend tomorrow is South32 Ltd (ASX: S32).

The ASX 200 mining share reported its half-year results on 16 February. As with its competitors, lower commodity prices saw profits after tax tumble 34% year on year to US$685 million.

This also resulted in a 44% reduction in the fully franked interim dividend, to 7.1 cents per share. If you own South32 shares at the closing bell today, that payment should hit your bank account on 6 April.

And the fourth ASX 200 mining share trading ex-dividend tomorrow is Mineral Resources Ltd (ASX: MIN).

Mineral Resources reported its half-year results on 24 February. Unlike the three miners above, the company saw underlying NPAT soar 1,175% to $387 million, driven by record earnings from its lithium segment.

Mineral Resources didn’t pay an interim dividend last year. But with rocketing profits this year, the board declared an interim fully franked dividend of $1.20 per share.

Eligible shareholders can expect that payment on 30 March.

Happy income investing!

The post Last chance to snag the next dividend from these 4 ASX 200 mining shares appeared first on The Motley Fool Australia.

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More reading

• 10 ASX 200 stocks trading ex-dividend tomorrow
• 2 ASX shares offering both growth and nice dividends: expert
• Hoping to collect the latest CSL dividend? Here’s how
• Mineral Resources share price slides as Norwest takeover bid heats up
• It’s time to buy Rio Tinto shares: Goldman Sachs

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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It’s been a pretty disappointing hump day for the S&P/ASX 200 Index (ASX: XJO) and ASX shares so far this Wednesday At the time of writing, the ASX 200 has slipped by a nasty 0.86%, putting the Index at just over 7,300 points.

But that doesn’t mean that all ASX 200 shares are having a bad day today. In fact, there are two that just smashed both 52-week and multi-year highs. Let’s dig in.

2 ASX 200 shares at new highs today

QBE Insurance Group Ltd (ASX: QBE)

First up is ASX 200 insurance giant QBE. The QBE share price has had a cracker of a session so far. The company opened modestly at $15.27 a share this morning but has climbed higher as the day has progressed, and touched a new high of $15.48 a share just after midday today.

Not only is that a new 52-week high for QBE, but the highest the company has traded at since way back in 2013.

Investors have been flocking to QBE shares ever since the insurer released its latest earnings report last month. As we covered at the time, these earnings saw the company announce a huge increase to its dividend, built on a 5.2% rise in profits after tax.

Since these earnings were released, QBE has risen by almost 15%:

Origin Energy Ltd (ASX: ORG)

This Wednesday has also been exceptionally kind to ASX 200 energy generator and retailer Origin. Origin shares opened at $8.11 this morning before rising as high as $8.19 soon after market open.

That’s a new 52-week high for the company, but also the highest Origin shares have traded at since the pre-pandemic days of early 2020.

In Origin’s case, investors have been swarming into this share ever since a consortium led by Brookfield Asset Management made a revised takeover offer for the company last month.

The consortium offered $8.90 a share following Origin’s latest earnings, which have seen the company rise more than 12% over the past month:

The post 2 ASX 200 shares smashing new multi-year highs on Wednesday appeared first on The Motley Fool Australia.

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More reading

• Buy these ASX 200 shares now for big dividend yields: brokers
• Why you need defensive ASX shares in your portfolio right now: WAM
• Passive income watch: Here are the ASX 200 shares that delivered some of the biggest dividend boosts this earnings season
• 5 high-profile ASX 200 shares that will trade ex-dividend on Monday
• Why did the Origin share price just hit a 3-year high?

Motley Fool contributor Sebastian Bowen 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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Commonwealth Bank of Australia (ASX: CBA) shares are some of the most popular investments on the S&P/ASX 200 Index (ASX: XJO). For many years, CBA was the biggest share on the ASX 200 by market capitalisation. And it remains the largest ASX 200 bank on our share market.

As such, CBA is one of the most common shares to find in an ASX share portfolio. But that doesn’t mean it’s automatically a good investment.

So today, let’s discuss three reasons why I’m personally avoiding CBA shares for my portfolio.

3 reasons why I’m avoiding CBA shares in 2023

The property market

CBA is one of the banks most heavily exposed to residential property. According to the bank’s own numbers, it had a 25% share of Australian home lending as of 31 December 2022, well above its closest competitor’s 20%. But with greater market share comes greater risk.

And it’s no secret that property prices are facing a lot of pressure right now, thanks to rising interest rates. If rates keep rising and disposable incomes fall further, then CBA might be faced with a spike in loan arrears.

This leads me to believe that CBA might not enjoy the same kinds of prosperity it has in the past from residential property, at least for the next year or two.

CBA shares are expensive

Investors have a special affinity with the CBA share price, thanks to its dominance of the Australian banking sector. But this affinity comes at a cost – investors routinely price this ASX bank share at a premium against its competitors. Let’s use a simple metric to demonstrate – the price-to-earnings (P/E) ratio.

At present, CBA’s big four competitors all have lower P/E ratios than CBA does itself. Right now, ANZ Group Holdings Ltd (ASX: ANZ) has a P/E ratio of 10.2

National Australia Bank Ltd (ASX: NAB) is at 13.85, while Westpac Banking Corp (ASX: WBC) is sitting at 14.27.

But CBA is perched atop this pole with a current P/E of 16.92. Now some might argue that Commonwealth Bank deserves to trade at a premium. But this is a steep one. This indicates to me that this bank’s share price is still elevated and doesn’t have much of a cushion for any future falls.

You can get better dividends elsewhere

Many ASX investors, especially retirees, love holding CBA shares for their fully franked dividends. And sure, right now, the bank is offering a decent dividend yield of 4.28%.

But you can get far better yields elsewhere. For example, CBA’s fellow big bank ANZ currently has a trailing dividend yield above 6%. Its smaller banking rival Bank of Queensland Ltd (ASX: BOQ) has a yield of 6.65% right now. Both come fully franked too.

And even an index exchange-traded fund (ETF) like the Vanguard Australian Shares Index ETF (ASX: VAS) has a higher trailing yield than CBA. Vanguard Australian Shares ETF units are currently sitting on a trailing yield of 7%.

So I think there are better places to go than CBA if dividend income is your primary motivation for owning this bank share.

The post 3 good reasons I’m avoiding CBA shares at all costs! appeared first on The Motley Fool Australia.

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More reading

• Why is the ASX 200 taking a tumble today?
• Why is the Woodside share price wilting 7% on Wednesday?
• ASX 200 bank shares slump could continue: Morgan Stanley
• 3 ASX shares to avoid like the plague (and one to buy for the next 4 years): expert
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Sebastian Bowen has positions in National Australia Bank, Bank of Queensland and Vanguard Australian Shares Index ETF. 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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Last month, a large number of ASX 200 shares released their latest results and decided to share some of their profits with shareholders in the form of dividends.

Once a company declares its dividend, it names a date in which its shares will trade ex-dividend.

This is essentially when the rights to the dividend payment have been finalised. If you buy its shares on the ex-dividend date, you’re too late to the party and the seller will be the one that receives the dividend even though you may be holding the shares on the dividend payment date.

In light of this, a share will more often than not fall in line with the amount of its dividend to reflect this.

A number of ASX 200 shares are going ex-dividend today are trading lower for this reason. Listed below are six such examples:

Blackmores Ltd (ASX: BKL)

The Blackmores share price is down 1.5% after trading ex-dividend for the company’s 87 cents per share fully franked interim dividend. This will be paid to eligible shareholders on 28 March.

Brambles Limited (ASX: BXB)

The Brambles share price is dropped almost 1% to $13.19. It will be paying eligible shareholders a partially franked 17.7 cents per share interim dividend on 13 April.

Costa Group Holdings Ltd (ASX: CGC)

The Costa share price is down 1.5% this afternoon. Its shares have gone ex-dividend for its partially franked 5 cents per share interim dividend. This will be paid to shareholders on 6 April.

Smartgroup Corporation Ltd (ASX: SIQ)

The Smartgroup share price has sunk almost 7% after trading ex-dividend for the company’s 29 cents per share fully franked final dividend. Eligible shareholders can look forward to receiving this dividend on 23 March.

Super Retail Limited (ASX: SUL)

The Super Retail share price is down almost 4%. This retailer will be paying its fully franked 34 cents per share interim dividend on 14 April.

Woodside Energy Group Ltd (ASX: WDS)

The Woodside share price has tumbled 7.5% after going ex-dividend for the energy giant’s massive 211.3 cents per share fully franked final dividend. It will be paid to eligible shareholders in just under a month on 5 April.

The post 6 ASX 200 shares trading ex-dividend today appeared first on The Motley Fool Australia.

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More reading

• Why is the Woodside share price wilting 7% on Wednesday?
• 5 things to watch on the ASX 200 on Wednesday
• Why did the Woodside CEO just sell off over $200,000 worth of shares?
• Woodside share price gains as Albanese supports gas in energy ‘wake-up call’
• Hoping to bank the supersized Woodside dividend? You’d better hurry

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 Super Retail Group. The Motley Fool Australia has positions in and has recommended Smartgroup and Super Retail Group. The Motley Fool Australia has recommended Blackmores and Costa 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 Harvey Norman Holdings Limited (ASX: HVN) share price is down 0.5% to $3.85 amid news its founder has just dropped $8 million in an epic ‘buy-the-dip‘ exercise.

A change of directors interest notice lodged with the ASX reveals Gerry Harvey bought 270,000 Harvey Norman shares last Thursday. He bought a further 1,865,000 shares on Friday.

When company insiders spend big money on their shares, that implies a lot of confidence in the stock.

Does this mean you should buy, too? Let’s hash this out together.

What was the Harvey Norman share price when Gerry bought?

Firstly, let’s look at the price Harvey paid, which indicates where he sees good value.

The 270,000 Harvey Norman shares purchased on Thursday were bought at an average price of $3.71. Point of interest: Harvey has already made a capital gain of $37,800 on this parcel of shares.

The shares purchased on Friday were nabbed at an average price of $3.7478. So the capital gain there is already $190,603. Smart move, Gerald!

The total consideration paid for both lots of shares is $7,993,785.17. Both purchases were indirect interest buys through various trusts.

Why did the retail legend buy?

Well, the timing is relevant here.

The purchases took place a few days after the company reported its 1H FY23 results.

The retailer revealed a 15.1% decline in reported net profit after tax (NPAT) to $365.9 million. It also slashed its interim dividend by 35% to 13 cents per share fully franked.

Investors didn’t react well. As we reported, the Harvey Norman share price was smashed by 12% at its intraday low.

Harvey criticised the market response, calling it a “total overreaction”. But then he did what all smart long-term investors should do — he took advantage of it and bought the dip.

Harvey said last week:

Harvey Norman is on a 6 per cent dividend yield, or better, at $4 a share and we only paid out half (our earnings) in dividend; if we paid out the lot it would be a 12 per cent dividend fully franked. We have a wonderful record of paying dividends over 35 years.

We’ve got a long record that’s very, very good and so the market … should be delighted, not disappointed.

Another director follows the same path

Harvey Norman’s chief financial officer Chris Mentis also got in on the action last week.

According to a separate notice lodged with the ASX, Mentis purchased 40,000 shares on market for $147,164 on Thursday. The purchase was an indirect interest buy through his super fund.

Mentis also serves as an executive director and the company secretary.

Should you buy Harvey Norman at today’s share price?

So, the Harvey Norman share price is still in ‘buy the dip’ territory. At $3.85, it is still down significantly — about 8% — since the 1H FY23 results were released last Tuesday.

We know from Harvey’s purchases that he sees value in his ASX retail share at the $3.70-ish mark.

But what do the brokers think?

According to my Fool colleague James, Goldman Sachs has retained its buy rating on Harvey Norman shares. It has trimmed its 12-month price target to $4.70.

Based on where the Harvey Norman share price is trading at the time of writing, that implies a very healthy potential 22% upside for investors who buy today.

Although Goldman was disappointed with the 1H FY23 results, it believes the half represented the peak cash drag on franchisee support. It also sees a lot of value in the company’s property holdings.

Excluding those property assets, Goldman notes that Harvey Norman shares are trading at a price-to-earnings (P/E) ratio of 6 times FY24 estimated earnings.

Generally speaking, the market considers any established stock on a P/E lower than 15 times as cheap.

So, the Harvey Norman share price could be considered a value buy at this time.

The post Gerry Harvey just bought $8 million worth of Harvey Norman shares. Should you buy? appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy next week
• Give yourself a passive income boost with these ASX dividend shares: experts
• Top brokers name 3 ASX shares to buy today
• Buying opportunity? Harvey Norman boss says share slump is a ‘total overreaction’
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Bronwyn Allen has positions in Harvey Norman. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Harvey Norman. The Motley Fool Australia has positions in and has recommended Harvey Norman. 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) is having a day to forget.

As we head into the lunch hour the benchmark index is down 0.7%, having earlier posted losses of 1%.

This comes after the ASX 200 rallied on the back of the RBA’s 0.25% interest rate hike announcement yesterday, closing the day up 0.6%. (Full story here.)

So, why the reversal today?

Why is the ASX 200 falling today?

Somewhat ironically, today’s woes on the ASX 200 also have to do with inflation, interest rates and central bank policy. Not the RBA though. This time it’s the United States Federal Reserve investors are eyeing.

The ASX 200 is following in the footsteps of US markets, which all closed sharply lower yesterday (overnight Aussie time). The Dow Jones Industrial Average Index (DJX: .DJI) led the charge down, sliding 1.7%.

This came on the heels of a hawkish tone set by Fed chair Jerome Powell as he addressed the Senate Banking Committee.

Powell stated:

The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated. If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes.

Markets are now pricing in the likelihood that the world’s most influential central bank will raise interest rates by another 0.50% when the Federal Open Market Committee meets again later this month. That could pressure US markets, which in turn would throw up some headwinds here for the ASX 200.

Commenting on Powell’s speech, Anna Wong and Stuart Paul, Bloomberg economists, said, “We now expect the dots tracing Powell’s expected path of policy rates – and those of multiple other committee members – to shift higher and stay higher for longer.”

LH Meyer/Monetary Policy Analytics economists noted, “Powell’s comments make it sound as though they need to be convinced not to speed the pace up. The presumption that’s been established is that they will hike 50 [basis points] in March, unless they are convinced otherwise.”

Judging by Powell’s words, the Fed may take a fair bit of convincing before easing back on their tightening path.

“Although inflation has been moderating in recent months, the process of getting inflation back down to 2% has a long way to go and is likely to be bumpy,” he said.

With the ASX 200 looking to be pricing in another outsized rate hike from the Fed, we may already be experiencing the next bump in the road today.

The post Why is the ASX 200 taking a tumble today? appeared first on The Motley Fool Australia.

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More reading

• Why is the Woodside share price wilting 7% on Wednesday?
• ASX 200 bank shares slump could continue: Morgan Stanley
• 5 things to watch on the ASX 200 on Wednesday
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Owners of this ASX 200 share are soon going to receive a bigger dividend

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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