Tag: Motley Fool

The Sayona Mining Ltd (ASX: SYA) share price has returned from its trading halt and is pushing higher.

In morning trade, the lithium developer’s shares are up 4% to 25 cents.

Why is the Sayona Mining share price rising?

Investors have been buying the company’s shares this morning after it announced the completion of a capital raising.

While a capital raising would usually have the opposite effect on a share price, things are different this time because Sayona Mining managed to raise the funds at a premium.

According to the release, the company has entered into a subscription agreement with PearTree Securities for the issue of 174,459,177 flow-through shares at a price of 31.5 cents per share for aggregate gross proceeds of $54.9 million.

The issue price of 31.5 cents per share represents a 34% premium to the Sayona Mining share price at Friday’s close.

Management notes that the funding will help advance exploration efforts while the company continues to progress the restart of its North American Lithium (NAL) operation, together with Sayona’s other growth projects in Quebec, including its emerging northern lithium hub.

How did the company manage to raise funds at a premium?

Firstly, all is not quite what it seems with this capital raising. This is because the shares that PearTree have subscribed to are Canadian flow-through shares (FTS).

The Canadian government explained their usage. It says:

Junior resource corporations often have difficulty raising capital to finance their exploration and development activities. Moreover, many are in a non-taxable position and do not need to deduct their resource expenses. The FTS mechanism allows the issuer corporation to transfer the resource expenses to the investor.

The FTS program provides tax incentives to investors who acquire FTSs by allowing: deductions for resource expenses renounced by eligible corporations; and investment tax credits for individuals (excluding trusts) on resource expenses in the mining sector that qualify as flow-through mining expenditures.

Nevertheless, Sayona’s Managing Director, Brett Lynch, believes this is a good outcome for shareholders. He commented:

Sayona has made significant progress in developing the leading hard rock lithium resource base in North America, with the pending restart of production at NAL set to mark our progression from explorer to producer. This funding will provide an added boost to our expansion plans, with the FTS provisions allowing us to raise capital at a premium to the current share price, thereby minimising dilution for the benefit of our shareholders.

The post Sayona Mining share price charges higher following $55m cap raise appeared first on The Motley Fool Australia.

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More reading

• Here are the 10 most shorted ASX shares this week
• Why has the Sayona Mining share price just been halted?
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Here are the 3 most heavily traded ASX 200 shares on Tuesday

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

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The Mineral Resources Ltd (ASX: MIN) share price is down 1.86% in early morning trading.

Shares in the S&P/ASX 200 Index (ASX: XJO) resources producer closed yesterday at $89.11 each. They are currently changing hands for $87.45 apiece.

This comes as Mineral Resources’ takeover of Norwest Energy NL (ASX: NWE) looks to be entering the final lap.

What’s happening with the Norwest takeover?

Mineral Resources first announced its plans for an off-market takeover bid of Norwest –  its minority joint venture partner in the Lockyer Deep gas project in the Perth Basin – on 16 December.

On the day of the announcement, the Mineral Resources share price retreated, pressured by broader market weakness.

Commenting on the takeover at the time, MinRes managing director Chris Ellison highlighted the massive potential of Lockyer Deep.

“The significant conventional gas discovery we made at Lockyer Deep last year, which we believe may be the largest onshore gas find in Australia, is driving us to develop and commercialise this high-quality energy source as quickly as possible,” Ellison said.

In today’s announcement (released after market close yesterday), the company reported that as at 2 March, it had voting power in Norwest of approximately 70%.

Adding some pressure on shareholders who’ve yet to accept the offer, Mineral Resources noted that if it acquires 80% of Norwest shares, shareholders “may be eligible for rollover tax relief”.

Norwest shareholders who take up the deal will receive one MinRes share for every 1,300 Norwest shares held. At the current Mineral Resources share price, that represents a premium of just under 1% to the current Norwest share price (down 1.47% at the time of writing).

The company stressed the offer was final and would not be increased.

It added that if it’s entitled to proceed to compulsory acquisition, Norwest shareholders not accepting the offer will receive the same consideration, but at a later date than if they’d accepted.

Mineral Resources said if it is not entitled to proceed to compulsory acquisition, it may apply to de-list Norwest from the ASX, “in which case it may become more difficult for Norwest shareholders to sell their Norwest shares”.

Commenting on the final stages of the takeover, Ellison said:

I’m encouraged that so many Norwest shareholders have accepted our Offer and now have exposure to MinRes’ world-class portfolio of diversified assets. Norwest shareholders will receive extraordinary value by accepting our offer and joining us in one of Australia’s fastest growing companies.

In a separate release this morning that was marked as potentially having an impact on the Mineral Resources share price, the company provided a detailed report on its JP Morgan, Global High Yield Conference presentation.

Mineral Resources share price snapshot

Despite today’s dip, the Mineral Resources share price remains a strong outperformer, up an impressive 85% since this time last year.

The post Mineral Resources share price slides as Norwest takeover bid heats up appeared first on The Motley Fool Australia.

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More reading

• Which ASX All Ords shares would be on my watchlist for generating massive dividends?
• Want passive income? These are the ASX dividend shares to buy according to experts
• What’s happening with ASX 200 lithium stocks this week?
• Why Block, Liontown, MMA, and Norwest Energy shares are charging higher today
• Buy Minerals Resources shares for 21% upside: broker

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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Rio Tinto Limited (ASX: RIO) shares are a leading opportunity, according to top broker Goldman Sachs.

The large ASX mining share has seen quite a lot of volatility over the past year, and the broker thinks that the business could rise from here.

A large part of Rio Tinto’s net profit comes from iron ore, so changes in the iron ore price can have a big impact on the rest of the underlying short-term value of the business and its profitability.

Rio Tinto has received backing from Goldman Sachs, suggesting it could have another good year.

Iron ore prices to go higher?

Goldman Sachs’ commodity team recently increased its iron ore price forecast to US$120 per tonne for 2023, up from US$100 per tonne, with a three-month target of US$150 per tonne, compared to the current price of around US$125 per tonne.

The broker has an expectation that the seaborne market should swing into a “significant deficit” of 43 million tonnes in the first half of 2023 because of “lower seasonal supply from Australia and Brazil and an expected recovery in Chinese steel volumes.”

Goldman Sachs pointed out that recently there is an ongoing recovery in Chinese property sales and an uptick in Chinese blast furnace utilisation, steel production and rebar prices. It noted that, generally, property lead starts driving higher steel demand.

Another factor that could help the iron ore price is that all of the above is happening while Chinese steel mills have their lowest inventories since 2016, with mills starting to restock in recent weeks.

Goldman Sachs finished its positive commentary for the iron ore market with this:

An improvement in Chinese steel prices and mill margins should also be positive for high grade iron ore.

Will this boost Rio Tinto shares?

The broker noted that Rio Tinto’s Pilbara iron ore business produced 324 mt in 2022, and Goldman Sachs thinks it will produce 335 mt in 2023 because of the ramp-up of the new 45mt Gudai-Darri mine by mid-year and the strong start with shipments.

Developing Rhodes Ridge “has the potential to be significant” for its Pilbara businesses as it could lift the mine system capacity by more than 10% to more than 360 mt per annum, utilise spare rail and port infrastructure, and help close the more than US$10 free cash flow per tonne gap with BHP Group Ltd (ASX: BHP) by US$6 to US$8 by the end of the decade.

Goldman Sachs said that Rio Tinto shares have a compelling valuation compared to peers. It could generate “strong” free cash flow and dividends, with the broker having a bullish view on iron, aluminium and copper prices. The broker is also expecting strong production growth of iron and copper. The high-margin, low-emission aluminium business could also be a positive.

$15 million fine

It was announced this morning that the ASX mining share has resolved an investigation by the US Securities and Exchange Commission (SEC) into some contract payments made to a former consultant in 2021, relating to the Simandou project in the Republic of Guinea.

Without admitting to or denying the SEC’s findings, Rio Tinto has agreed to pay a $15 million civil penalty for violations of the books and records and internal control provisions of the law.

The miner said it has taken “significant actions” to enhance its compliance programme. Dominic Barton, Chairman of Rio Tinto said:

We are glad to have resolved this matter related to events that occurred over a decade ago on appropriate and reasonable terms.

When Rio became aware of the issue, an internal investigation was immediately launched, and we
proactively notified the appropriate authorities.

Since becoming aware, Rio Tinto has taken significant actions to enhance our compliance
programme based on best practices. Under current leadership we are taking action to build a culture
guided by our values of care, courage and curiosity; an environment where every team member
feels comfortable to speak up if something is not right. We remain committed to conducting business
to the highest standards of integrity, and ensuring that our projects benefit communities, host
governments, shareholders, and customers.

Rio Tinto share price target

Goldman Sachs lifted its price target by 7% to $140.40. That implies a possible rise of more than 10% over the next 12 months.

The post It’s time to buy Rio Tinto shares: Goldman Sachs appeared first on The Motley Fool Australia.

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More reading

• Hoping to pocket the next Rio Tinto dividend? Read this
• Leading brokers name 3 ASX shares to buy today
• Strong buy: Why Goldman Sachs just added Rio Tinto shares to its conviction list
• 5 things to watch on the ASX 200 on Monday
• Have BHP shares always paid better dividends than Rio Tinto?

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 Goldman Sachs Group. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Ask A Fund Manager

The Motley Fool chats with the best in the industry so that you can get an insight into how the professionals think. In this edition, Red Leaf Securities chief executive John Athanasiou reveals how he’s in favour of picking up bargains in one particular sector.

Investment style

The Motley Fool: How would you describe your services to a potential client?

John Athanasiou: My name’s John Athanasiou from Red Leaf Securities. I’m the CEO of the organisation. We’re an investment firm. 

Now, we don’t have a fund. We manage, we give advice on our clients’ stock — stock-specific advice. We specialise in finding undervalued Australian-listed companies that we believe will outperform the market. 

Typically, we find these opportunities in the small-cap space. They’re very under-researched, which provides you the opportunity to generate alpha returns.

MF: The past 12 months haven’t been pleasant for small caps. How do you see the market moving from here?

JA: I’m actually relatively bullish. I think the worst of the inflation scare is behind us. 

Not many people have realised all the positive things that’ll come out now in relation to inflation easing. Recently we saw inflation easing and China’s reopening their economy, which is quite positive for equities. In terms of all the negative news, i.e. high inflation, I think that’s starting to come under control. 

We’re very bullish in the technology sector. I think a lot of people haven’t realised that the S&P/ASX All Technology Index (ASX: XTX) is up circa 9.87% for the year, while the S&P/ASX 200 Index (ASX: XJO) is up 4.5%. So we’re very bullish on equities, particularly technology stocks that were severely beaten last year.

Hottest ASX shares

MF: What are the two best stock buys right now?

JA: My first pick is BlueBet Holdings Ltd (ASX: BBT). They’ve got a cash position of circa $30 million, [with] the market cap at $60 million. 

Now the reason why we like it is that it’s severely undervalued in our opinion. It’s been unfairly tarnished with the other tech stocks from last year. 

Management has bought stock, so they’re putting their money where their mouth is. And we’re really excited about their opportunities in America. In America, they’re growing in a very conservative capital-like fashion. What I mean by that is they build relationships with existing bricks-and-mortar operators and casino gambling operations over there, and they supply their technology. 

Because in the States, each state’s different in terms of their gambling laws. That’s a better way of doing it as opposed to its competitors that are just spending cash hand-over-fist to buy customers, essentially. 

So we’re very bullish on BlueBet. We think that’s probably a very solid recovery story going forward.

My second pick, it’s outside of the tech space, is Northern Star Resources Ltd (ASX: NST). 

This gold producer announced an interim dividend payment despite their EBITDA declining by 12% to $633 million. It declined essentially because of inflationary pressures like everyone else is facing. Now we see inflation easing, so those cost pressures will decrease as a result. 

On top of that, gold actually performs well when things deflate, people kind of forget that. Because there’s an opportunity cost of owning gold. If you own gold, you’re giving up the opportunity to earn interest or get paid a dividend. 

Now that inflation’s easing, we see central banks around the world will start calming down with their cash rate rises. We see [it’s] very positive for gold going forward.

MF: The Northern Star share price dipped 17.4% in February. Was that just the gold price cooling off?

JA: It was just the gold price, just natural fluctuations in the market. People got a little bit ahead of themselves. There were scares of inflation not coming down as quickly as anticipated… There was a bit of fluctuation in gold prices.

The post I’m bullish on this sector and 2 ASX shares right now: expert appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Tuesday
• 5 things to watch on the ASX 200 on Monday
• Did you buy $1,000 of Northern Star shares 10 years ago? If so, here’s how much dividend income you’ve earned
• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BlueBet. 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 aiming to retire rich, then the Australian share market could be the place to do it.

But how would you go about achieving this goal? One way could be to search for dividend-paying ASX shares to buy and hold for the long term.

That’s because if you can find ASX shares that have the potential to increase their dividends each year, by the time it comes to retirement, you could be getting some very big dividend payments.

Growing dividends

A good example of this is Treasury Wine Estates Ltd (ASX: TWE). Over the last 12 months, the wine giant has paid out fully franked dividends totalling 34 cents per share. While this only offers a 2.5% dividend yield if you buy its shares today, it is a very different situation for longer-term shareholders.

If you had bought Treasury Wine shares a little over a decade ago when they were trading at $3.11, you would be receiving a yield on cost of 10.9%.

This means that a $50,000 investment back then would be providing you with an income of approximately $5,500 now. Whereas if you invested $50,000 at today’s price you would only receive $1,250 in dividends.

And let’s not forget the capital gains! Despite some tough times in recent years, the wine giant’s shares have generated strong returns for investors over the last decade. This means that your $50,000 investment would have grown to become almost $220,000 today.

So, not only are you getting a very welcome paycheck each year, but you’re also sitting on a sizeable portfolio.

Switch to income?

The latter provides investors with a couple of options. One is that they can keep doing what they’re doing and let compounding work its magic. The other is switching your portfolio to a focus on income.

For example, according to a note out of Goldman Sachs, its analysts expect a $1.47 per share dividend from Westpac Banking Corp (ASX: WBC) this year. This equates to a 6.65% fully franked dividend yield at current prices.

If investors were to put that $220,000 into this big four bank’s shares, they would boost their income to almost $15,000. And with Goldman then expecting Westpac to increase its dividend to $1.56 per share in FY 2024, another paycheck worth $15,500 potentially awaits a year later.

That’s $30,000 in dividends from an original $50,000 investment in under 15 years.

And while past performance is no guarantee of future returns, Treasury Wine’s returns are largely in line with historical market averages. So, it certainly is achievable for investors if they can identify the right ASX shares to buy.

The post How I would invest in ASX shares to retire rich appeared first on The Motley Fool Australia.

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More reading

• These are the ASX 200 shares to buy in March: experts
• Buy Westpac and this high-yield ASX dividend share: analysts
• 3 ASX 200 shares trading ex-dividend on Friday
• 5 things to watch on the ASX 200 on Friday
• Top ASX dividend shares to buy in March 2023

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 Treasury Wine Estates 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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When it comes to dividends, there are few larger than the Rio Tinto Ltd (ASX: RIO) dividend.

In light of this, it is no surprise that the mining giant is a big favourite of income investors.

But if you want to receive its next dividend payment, you will have to get a wriggle on.

Rio Tinto’s FY 2022 results

Last month, the mining giant released its full-year results for FY 2022.

In case you missed it, for the 12 months ended 31 December, the miner reported a 13% decline in revenue to US$55,554 million and a 41% reduction in net profit after tax to US$12,420 million.

This reflects the unfavourable movement in commodity prices, the impact of higher energy and raw materials prices on its operations, and higher rates of inflation on operating costs and closure liabilities.

The Rio Tinto dividend

Unfortunately, with Rio Tinto’s profits under pressure, the miner was forced to slash its dividend.

The Rio Tinto board elected to cut its fully franked final dividend by 46% to US$2.25 per share, bringing its full-year dividend to a total of US$4.92 per share in FY 2022.

Rio Tinto’s full-year dividend is a 38% reduction on what was paid a year earlier and equates to a total payout of US$8 billion. This represents a payout ratio of 60% of underlying earnings.

While the miner’s interim dividend has been and gone, it isn’t too late to receive its final dividend, which currently equates to a ~2.7% yield.

Rio Tinto’s shares will trade ex-dividend on Thursday 9 March. This means that investors have today and tomorrow’s session to buy shares if they want to be eligible to receive it on the payment date of 20 April.

Goldman Sachs would approve of buying Rio Tinto’s shares. As covered here, yesterday the broker added Rio Tinto to its conviction list with a buy rating and $140.40 price target.

The post Hoping to pocket the next Rio Tinto dividend? Read this appeared first on The Motley Fool Australia.

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More reading

• Leading brokers name 3 ASX shares to buy today
• Strong buy: Why Goldman Sachs just added Rio Tinto shares to its conviction list
• 5 things to watch on the ASX 200 on Monday
• Have BHP shares always paid better dividends than Rio Tinto?
• Buy Rio Tinto and this ASX dividend share: Goldman Sachs

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

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If you’re an income investor looking for dividends to boost your income, then you may want to consider the ASX shares listed below.

Both of these ASX dividend shares have been rated as buys and tipped to provide investors with attractive yields in the coming years.

Here’s what you need to know about these shares:

Dexus Industria REIT (ASX: DXI)

Morgans is tipping this industrial and office property company as a dividend share to buy.

That’s because it believes Dexus Industria is well-placed for growth thanks to strong demand in the industrial market.

The broker currently has an add rating and $3.37 price target on the company’s shares. It commented:

DXI’s key industrial markets remain robust with the outlook for solid rental growth backed by strong tenant demand. The development pipeline also provides near and medium term upside potential.

As for dividends, the broker is forecasting dividends per share of 16.5 cents in FY 2023 and 16.8 cents in FY 2024. Based on the current Dexus Industria share price of $2.97, this will mean yields of 5.6% and 5.7%, respectively.

Healthco Healthcare and Wellness REIT (ASX: HCW)

Another ASX dividend share for income investors to consider is the Healthco Healthcare and Wellness REIT.

This health and wellness focused real estate investment trust invests in properties including hospitals, aged care, childcare, government, life sciences and research, and primary care and wellness properties.

Analysts at Morgans are also positive on Healthco Healthcare and Wellness REIT and have an add rating and $2.06 price target on its shares. The broker was pleased with its performance during the first half. It commented:

1H23 result highlights included solid operational performance of the existing portfolio; completion of the George Private Hospital; a new accretive acquisition of a life sciences asset; stable net valuation movements (NTA $2.00); as well as a 4% upgrade to FY23 FFO guidance.

As for dividends, Morgans is expecting in dividends per share of 7.5 cents in FY 2023 and 7.8 cents FY 2024. Based on the current Healthco Healthcare and Wellness REIT unit price of $1.58, this will mean yields of 4.75% and 4.9%, respectively, for investors.

The post Grow your passive income with these ASX dividend shares: brokers appeared first on The Motley Fool Australia.

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More reading

• Leading brokers name 3 ASX shares to buy today
• Get 5%+ yields from these top ASX dividend shares: experts

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

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It won’t be long until BHP Group Ltd (ASX: BHP) shares pay the FY23 half-year dividend to shareholders. But, investors only have a very short amount of time to get their hands on the payment.

BHP is one of the world’s biggest dividend payers thanks to its huge iron ore operations, as well as its coal and copper earnings.

BHP ex-dividend date imminent

After a company declares its dividend with the result, the business has to decide when the dividend is going to be paid and what the cut-off date is for the entitlement.

The ex-dividend date is when a new investor buying shares is no longer entitled to the dividend. Investors need to own shares before this date to be entitled to the dividend.

For BHP, the ex-dividend date is 9 March 2023. That means investors need to own BHP shares by the end of trading on 8 March 2023 if they want to receive the dividend.

The payment date for the dividend is 30 March 2023, so it’s only a few weeks ago.

BHP’s dividend is going to be 90 US cents per share, which represents a dividend cut of 40% compared to the FY22 interim dividend.

This came after a 16% drop in revenue, a 27% fall in profit from operations and a 41% plunge in operating cash flow. The earnings per share (EPS) declined 32% to US$1.275. This translates to a dividend payout ratio of around 70%.

Outlook

The BHP share price and dividend could be significantly impacted by how commodity demand changes in China and the global economy.

BHP CEO Mike Henry said:

We are positive about the demand outlook in the second half of FY23 and into FY24, with strengthening activity in China on the back of recent policy decisions the major driver. We expect domestic demand in China and India to provide stabilising counterweights to the ongoing slowdown in global trade and in the economies of the US, Japan and Europe. The long-term outlook for our commodities remains strong given population growth, rising living standards and the metals intensity of the energy transition, including for steel making raw materials.

BHP share price snapshot

Over the past six months, BHP shares have gone up around 30%.

The post Keen to bag the latest BHP dividend? You’ll need to be quick appeared first on The Motley Fool Australia.

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More reading

• Own BHP shares? Here’s what the ASX 200 miner wants from the government
• BHP share price stumbles amid super-profit tax fears
• Why I don’t own BHP shares (yet)
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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 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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The All Ordinaries index (ASX: XAO) can be a great place to find All Ords ASX shares that could pay large dividends in the coming years.

I understand why investors are attracted to names like Commonwealth Bank of Australia (ASX: CBA) and Woodside Energy Group Ltd (ASX: WDS). But, I’m looking for businesses that can provide much more growth in the coming years.

It’s much easier to grow a business from $5 billion to $10 billion, than $50 billion to $100 billion, in my opinion.

With that in mind, I think these two ASX All Ords shares are very interesting with their growth plans.

Pacific Current Group Ltd (ASX: PAC)

Pacific Current describes itself as a multi-boutique asset management business that applies strategic resources, including capital, institutional distribution capabilities and operational expertise to help partners. As of February 2023, it had investments in 15 asset managers globally.

Some of its investments include Banner Oak, Astarte, ROC, Victory Park and GQG Partners Inc (ASX: GQG).

In the first half of FY23, the company saw its boutiques’ funds under management (FUM) rise by 3.5% to $175 billion. It boasted that its boutiques have had 24 consecutive quarters of positive net flows. Management fee-related revenue increased 52%.

The All Ords ASX share is expecting management fee revenue and performance fee revenue. Additional investments are “likely” in the second half of FY23.

By FY25, the business could be paying an annual dividend of 47 cents per share. That would be a grossed-up dividend yield of close to 10%.

Mineral Resources Ltd (ASX: MIN)

Mineral Resources is one of the larger All Ords ASX mining shares. It offers mining services, while also being a sizeable iron ore miner and lithium miner itself.

While the business is already making profits thanks to its current mining operations, the company’s expansion efforts in both iron and lithium are expected to unlock larger profit and cash flow generation.

Using the estimates on Commsec, the business is expected to generate earnings per share (EPS) of $7.32 in FY23.

In FY24, the business is expected to more than double its EPS. The current estimate for the 2024 financial year is $15.82 in EPS. That means Mineral Resources shares are valued at around 6 times FY24’s estimated earnings.

The business is only expected to pay around a third of its earnings out as a dividend in FY24. The dividend per share could be $5.46, which would be a grossed-up dividend yield of 8.7%.

However, future dividends could be dependent on how commodity prices change from here.

The post Which ASX All Ords shares would be on my watchlist for generating massive dividends? appeared first on The Motley Fool Australia.

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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 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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When investors choose between growth and value shares, the former is pretty easy to identify.

They’re companies that are rapidly growing, and the stock price reflects the future potential of this expansion. Buying such ASX shares is a vote of confidence that the business will be larger in a few years than it is now.

But what about value shares? 

The definition of value shares are more ethereal and subjective. They’re stocks that the investor believes are undervalued, so the share price would rise once the market wakes up to how well the business is doing.

As such, there can sometimes even be an overlap between growth and value. They’re not mutually exclusive groups.

Tyndall Asset Management portfolio manager Jason Kim is a professional at picking out value shares.

In a recent video, he revealed the ASX shares he would be targeting in 2023:

Looking for ‘intrinsic value’

According to Kim, his team looks for what they call “intrinsic value” when picking stocks to buy.

“It’s all about determining sustainable earnings that each company generates on a mid-cycle basis and applying the right multiple to that stock,” he said.

“Value is about identifying stocks that we believe trade at a big discount to its net worth.”

Using measures like price-to-earnings ratio is too simplistic — Kim’s team calls that a “naive academic” approach.

“Some stocks deserve to trade at low price-to-earnings.”

By taking a more sophisticated approach using mid-cycle earnings, the Tyndall team can calculate what the deserved valuation for each business is. 

“We have a large team of analysts that go out and kick the tires to talk to management, talk to competitors, suppliers and customers.”

Don’t be fooled by low or high PE ratios

The difference from the naive academic approach is that this “par” valuation can be vastly different between stocks, depending on context.

For example, Kim named supermarkets as businesses that have excellent defensive earnings.

Therefore investors can pay a bit more for them, and they may still be great value.

“They do deserve to trade at a higher multiple for that safety they offer,” he said.

“The extent that they trade at a discount to that, they may well be still above the [average] share market multiple. To us, that’s an intrinsic value opportunity.”

On the other end of the spectrum, there are stocks that have wildly inconsistent or cyclical earnings.

“They do deserve to trade at a discount to the market,” said Kim.

“They may seem cheap on the surface but, to us, they could be fair value or actually expensive.”

This filter has served the Tyndall team well over the last three decades, he added.

“The conditions we see right now, we believe, means that our approach will outperform for quite some time.”

The post Expert reveals secret to spotting the best ASX value shares to buy appeared first on The Motley Fool Australia.

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

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