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The EML Payments Ltd (ASX: EML) share price has come under significant pressure again on Friday.

In morning trade, the embattled payments company’s shares dropped 15% to 49 cents.

This means the EML share price is now down 80% over the last 12 months, as you can see below.

Why is the EML share price crashing today?

Investors have been selling down the EML share price on Friday after the company released an update on its European operations.

These operations, which are overseen by its PFS Card Services Ireland business, have come under fire from regulators over the last 18 months amid concerns over its anti-money laundering and counter-terrorism financing (AML/CFT) compliance.

According to the latest update, PFS Card Services Ireland has received further damning correspondence from the Central Bank of Ireland.

The central bank has stated that it considers that PFS Card Services Ireland has made limited remediation progress to date with significant and ongoing deficiencies remaining in its AML/CFT control framework. The bank also advised that it is not satisfied with PCSIL’s remediation plan and timetable for completion.

In light of this, EML now believes there is a risk that its remediation program and third-party assessment may not be completed as planned by the end of 2023.

Potential penalties

As a result of its lack of progress, the Central Bank of Ireland has informed PFS Card Services Ireland that it is “minded to issue a direction” that growth in total payment volumes for the period 31 March 2023 to 30 March 2024 be restricted to 0% above annualised baseline volumes in the year January to December 2022.

This would be a change from the previous 10% growth restriction imposed until 8 December 2023.

Though, it is worth noting that the central bank has not yet made this direction and has provided PFS Card Services Ireland with an opportunity to provide it with submissions by 10 March 2023 for its consideration. Management advised that work has already commenced in that regard.

The company estimates that the proposed growth restrictions would reduce its EBITDA by $2 million in FY 2023.

Strategic review

EML has revealed that it disappointed with the news and is now looking at a strategic review of the PFS Card Services Ireland business. It commented:

The Board is disappointed with this development. The reconstituted Board is taking the concerns of the CBI very seriously. It is committed to remediating the issues that are of concern to the CBI and engaging constructively with the CBI in relation to the remediation. In that context, the Board has established a new dedicated subcommittee (chaired by new non-executive director, Peter Lang) charged with oversight of the remediation program. The Board has also resolved to immediately commence a strategic review of the business with the assistance of global investment banking advisors. The Board will provide an update on the strategic review in due course.

The post EML share price tumbles 15% as the walls close in even further appeared first on The Motley Fool Australia.

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More reading

• Here’s why the EML share price is on ice today
• EML share price crashes 18% on half-year results but quickly rebounds

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 EML Payments. The Motley Fool Australia has positions in and has recommended EML Payments. 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 Block Inc (ASX: SQ2) share price is shooting higher on Friday.

In morning trade, the payments company’s shares are up 7% to $116.73.

Investors have been buying the Afterpay owner’s shares following the release of its fourth quarter update.

Block share price jumps on strong quarter

• Net revenue up 14% to US$4.65 billion
• Net revenue (excluding crypto) up 33% to US$2.82 billion
• Gross profit up 40% to US$1.66 billion
• Adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) up 53% to US$281 million
• Net loss widened to US$114 million
• Adjusted net earnings per share of 22 US cents

What happened during the quarter?

For the three months ended 31 December, Block reported a 40% increase in gross profit to US$1.66 billion. This was driven by a 22% increase in Square gross profit and a 64% jump in cash app gross profit.

Block also revealed that excluding its buy now pay later (BNPL) platform, gross profit was US$1.46 billion. This appears to indicate that Afterpay contributed US$200 million of gross profit during the quarter.

But the real star of the show was the Cash App business, which delivered gross profit of $848 million, an increase of 64% year over year. This reflects a 16% year over year increase in monthly active users to 51 million, with two out of three transacting each week on average.

How does this compare to expectations?

According to data from Bloomberg, the market was expecting revenue of US$4.57 billion, gross profit of US$1.63 billion, and adjusted earnings per share of 28 US cents.

This means that Block has beaten on the top line and with its gross profit but has fallen short of expectations with its earnings per share.

Outlook

Management revealed that it has started FY 2023 positively.

It estimates that it will deliver Block gross profit growth of 33% and combined company gross profit growth of 25% in January and February based on current trends.

Management believes the latter is more representative of underlying growth trends. That’s because the Afterpay business was acquired at the end of January 2022 and the latter numbers assume the acquisition completed on 1 January and contributed $51 million gross profit in the prior corresponding period.

The post Block share price jumps 7% on Q4 profit beat appeared first on The Motley Fool Australia.

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More reading

• Earnings preview: Here are the ASX shares reporting on Friday
• ASX BNPL shares deep in the red as ASIC turns up the regulatory heat
• Here are the top 10 ASX 200 shares today
• Why did the ASX 200 leap higher on rising unemployment data?
• Why are ASX 200 tech stocks like Xero having such a cracking run 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 positions in and has recommended Block. The Motley Fool Australia has positions in and has recommended Block. 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 Qantas Airways Limited (ASX: QAN) share price suffered a 7% sell-off in reaction to the airline’s FY23 half-year result. Is this a good time to buy shares?

While the airline has seen a rough initial response to its numbers, it’s important to remember that it has risen substantially over the last six months.

Investors can get more and more optimistic about the business, but then become too positive in the short term.

That may have happened here, even though Qantas revealed a very strong set of numbers considering what has happened over the last three years.

Earnings recap

The airline revealed that it achieved underlying profit before tax of $1.43 billion and statutory net profit after tax (NPAT) of $1 billion. In statutory earnings per share (EPS) terms, the amount made was 53.9 cents.

After such a strong recovery of earnings, Qantas saw its net debt reduce to $2.4 billion.

With the balance sheet in such rapidly-improving shape, the company decided to launch a $500 million share buyback.

It outlined a “material improvement” in operational performance and customer satisfaction, while also pointing to ongoing investment in lounges, technology and customer experience.

Qantas also said that it has an updated fleet plan, including turning nine purchase right options into firm orders for Airbus A220s.

How is the outlook shaping up?

The Qantas boss Alan Joyce said:

Fares have risen because of higher fuel costs, but also because supply chain and resourcing issues meant capacity hasn’t kept up with demand. Now those challenges are starting to unwind, we can add more capacity and that will put downward pressure on fares.

In terms of overheads, we expect the costs we’re carrying from the extra operational buffer will start unwinding from this half and into next financial year.

Returning to profit means we can get back to reinvesting for our customers, which is clear from the network, fleet and lounge announcements we’ve made, and from the Project Sunrise cabins we’re previewing. Importantly for our investors, this also sets us up to deliver long term shareholder value.

That investment includes $100 million spent on expanding domestic and international lounges over three years.

The average fare price is around 20% higher than in 2021. The Qantas share price is benefiting from the strength of the revenue that it’s generating from each flight.

But, the business is expecting travel demand to remain strong over the current financial year and into FY24.

Qantas’ domestic capacity is expected to increase from 94% to 103% through the second half of FY23. Meanwhile, international capacity is expected to increase from 60% to 81% through the second half of FY23.

It stated in its outlook guidance that fares are expected to moderate as capacity increases, but will remain “significantly above FY19 levels.” The fuel cost for FY23 is “expected to be $4.8 billion” with hedging in place.

My views on the Qantas share price

It was unfortunate for shareholders that the market didn’t like what the airline reported.

However, I thought there were a number of positives including a return to making major profit, net debt reduction and launching another share buyback, which theoretically improves the value of each remaining share.

With capacity still returning, I think that’s a good sign for Qantas’ earnings in the second half of FY23 and at least for the start of FY24.

I don’t think Qantas will deliver massive outperformance from here in the shorter term, but I like what the airline is doing and I think that it can keep making good profits now that the pandemic effects are wearing off.

With the bigger profits, Qantas can keep paying shareholder returns, like share buybacks and possibly dividends in the future. I think Qantas is a long-term buy.

The post Should I buy the dip on Qantas shares? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Why Platinum, Qantas, Red 5, and Zip shares are dropping today
• Why is Qantas buying back shares instead of paying dividends?
• Qantas share price falls 4% despite huge profits and major share buy-back

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 Mineral Resources Ltd (ASX: MIN) share price is falling on Friday.

At the time of writing, the mining and mining services company’s shares are down 4% to $81.61.

This follows the release of the company’s half-year results.

Mineral Resources share price falls despite incredible earnings growth

• Revenue up 74% to $2,350 million
• Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) up 503% to $939 million
• Net profit after tax up 1,890% to $390 million
• Operating cash flow up 333% to $281 million
• Interim dividend of 120 cents per share

What happened during the half?

For the six months ended 31 December, Mineral Resources reported a 74% increase in revenue to $2,350 million.

The was driven largely by a huge increase in lithium revenue, which was supported by modest increases in iron ore and mining services revenue. Mineral Resources’ lithium revenue came in at $997.2 million, up from $143 million a year earlier.

It was a similar story for the company’s EBITDA, which came in 503% higher at $939 million. Management notes that this reflects record lithium earnings from the conversion of both Mt Marion and Wodgina spodumene concentrate into lithium battery chemicals. It was also supported by consistent mining services earnings and an improved contribution from iron ore business on the back of higher achieved prices.

However, as strong as this earnings growth was, it has fallen short of expectations. The consensus estimate was for EBITDA of $1.06 billion. This may explain the weakness in the Mineral Resources share price today.

Nevertheless, this ultimately allowed the company to bring back its interim dividend. It declared a fully franked interim dividend of $1.20 per share, which represents a $233 million return.

Management commentary

Mineral Resources’ Managing Director, Chris Ellison, commented:

MinRes had a strong and stable first half, with solid earnings set to deliver shareholders a $1.20 fully franked interim dividend. We are well set-up for an excellent year, with our balance sheet and performance across all areas in a great position.

Our first half was headlined by record lithium earnings from conversion of Mt Marion and Wodgina spodumene concentrate into lithium battery chemicals. This was underpinned by consistent mining services earnings and a return to positive iron ore earnings due to improved product discounts.

Over the past 12 months, the business has been restructured for growth in each of our four business pillars. We have locked in substantial growth in each of these business divisions for the next five years and built the foundations that will set up MinRes for the next 50 years. This half has seen us take the business from a mining services contractor and upstream miner to a leading downstream supplier of lithium to global auto manufacturers.

Outlook

Looking ahead, Mineral Resources’ guidance for FY 2023 is unchanged. It has also provided guidance on its lithium operations. It expects:

• 7 to 7.3Mt iron ore at Yilgarn
• 5Mt to 11.5Mt iron ore at Utah Point
• 160k to 180k dmt of spodumene from Mt Marion
• 19kt to 21.3kt lithium battery chemicals from Mt Marion
• 150k to 170k dmt of spodumene from Wodgina
• 5kt to 12.5kt of lithium battery chemicals from Wodgina
• Mining services volumes of 270Mt to 280Mt

The post Mineral Resources share price drops despite incredible earnings growth appeared first on The Motley Fool Australia.

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More reading

• 4 ASX 200 mining shares to buy for takeover potential: expert
• Mineral Resources share price lower despite plan to be a ‘world-leader in lithium mining’
• Here’s the latest ‘bearish news’ from brokers on ASX 200 lithium stocks
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• Why is the Core Lithium share price rebounding 5% 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 Rio Tinto Limited (ASX: RIO) share price has seen plenty of volatility over the past year. But the dividend has just gone completely south.

Rio Tinto is one of the biggest miners in the world. Last year, it paid one of the largest dividends on the ASX. But this year, it’s paying a much smaller dividend.

But, this year, the S&P/ASX 200 Index (ASX: XJO) mining share decided to cut its final dividend by 46% to US$2.25 per share.

This brought Rio Tinto’s total dividend for the year to US$4.92 per share. That represented a 53% cut compared to 2021, though last year included a special dividend. The total ordinary dividend per share was cut by 38%.

Why was the Rio Tinto dividend cut by so much?

The key reason for the dividend cut was that the ASX 200 mining share’s profit sank.

Revenue dropped by 13% to US$55.6 billion. Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) declined by 30% to US$26.3 billion. Operating cash flow jumped by 36% to US$16.1 billion. Underlying earnings per share (EPS) declined 38% to US$8.20 while free cash flow sank 49% to US$9 billion.

Rio Tinto said it saw significant movement in pricing for its commodities due to “growing recession fears and a decline in consumer confidence”.

Those movements in commodity prices caused a US$8.1 billion decline in underlying EBITDA compared to 2021. That was “primarily from lower iron ore prices” to the tune of US$9.2 billion. It also suffered from lower copper prices and a negative provisional pricing impact.

A key iron ore price index was 25% lower on average in 2022 compared to 2021.

Is this a disaster?

Resource prices change all the time. Positive changes to the resource price can really boost profit, while negative movements are detrimental to short-term profitability. That’s why the Rio Tinto share price moves so much.

Compared to 2020, the 2022 operating cash flow was up 2%, underlying EBITDA was up 10%, and underlying EPS was up 6%. The dividend was 6% higher in 2022 than in 2020.

So, it was hard to beat that incredible 2021 year. But that doesn’t mean 2022 was a bad year. It would be a mistake to think that 2021 levels of profit were going to continue every year.

Bear in mind too, the Rio Tinto share price is close to its 2021 highs.

Is the Rio Tinto share price a buy?

I like Rio Tinto’s moves to own more of the Oyu Tolgoi copper mine in Mongolia. I also like its move into lithium, starting with the Rincon project in Argentina.

The ASX 200 mining share has a very long-term future. However, I just don’t think it can achieve a lot of capital growth considering the nature of changing commodity prices and given how mines run out of resources at some point. But a rise in the iron ore price could help boost sentiment this year.

If I were trying to achieve market-beating returns, I’d wait for a lower Rio Tinto share price because of the cyclical nature of markets. But, it could continue to pay good enough dividends, so shareholders may wish to hang on if they bought at a lower price.

The post Should I buy Rio Tinto shares given the ASX 200 miner just slashed its dividend by 46% appeared first on The Motley Fool Australia.

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More reading

• Why is the Rio Tinto share price tumbling today?
• Everything you need to know about the latest Rio Tinto dividend
• 5 things to watch on the ASX 200 on Thursday
• Rio Tinto share price on watch amid FY22 results
• Goldman tips 20% surge in iron ore price. Should I buy ASX 200 mining shares?

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 Accent Group Ltd (ASX: AX1) share price has raced to a 52-week high on Friday.

In morning trade, the youth fashion and footwear retailer’s shares are up 10% to $2.36.

This follows the release of a strong half-year result from Accent.

Accent share price jumps on strong earnings growth

• Total sales up 39% to $825 million
• Earnings before interest, tax, depreciation and amortisation (EBITDA) up 70.9% to $170.2 million
• Net profit after tax up 290% to $58.3 million
• Fully franked interim dividend up 380% to 12 cents per share
• Net debt down 30% to $63.6 million

What happened during the half?

For the six months ended 31 December, Accent reported a 39% increase in sales to $825 million.

This reflects strong in-store sales, softer online sales, the opening of 53 new stores, significant store closures in the prior corresponding period, and one extra trading week.

On the bottom line, Accent posted a 290% increase in net profit after tax to $58.3 million. Management advised that this was driven by stronger gross margins, lower costs, and improved earnings from its online business. Although the latter posted a decline in sales, its earnings were stronger year over year.

This ultimately allowed the Accent board to increase its interim dividend by 380% to a fully franked 12 cents per share.

Management commentary

Accent’s CEO, Daniel Agostinelli, was very pleased with the half. He said:

I am delighted with the results achieved in H1 FY23. The continued focus on customers, new product, full margin sales and return on investment has delivered a terrific H1 result. What is most pleasing is the strength and consistency of performance across our large core banners, including Skechers, Platypus, Hype DC, The Athlete’s Foot (TAF), Vans and Dr Martens, along with the progress that we have made in our new banners now that trading conditions have normalised.

One of the key initiatives for H1 was driving the profitability of the Accent Group digital business. Overall online sales have grown 160% to $134 million compared to FY20. Whilst sales were down on last year due to the lockdowns in 2021, we have improved our digital business and online EBIT was ahead of last year.

Outlook

While no guidance has been provided for the second half, management notes that trading has been strong. Like for like sales were up 16% for the first seven weeks of the half.

Pleasingly, management appears optimistic that this positive form can continue thanks to its focus on younger consumers. Mr Agostinelli concludes:

Whilst we recognise that there is some uncertainty in the economic outlook, to this point we have not yet seen any significant change to consumer spending in our categories. Many of our brands target a younger customer demographic who tend to be less impacted by interest rates and cost of living pressures.

In conclusion, I am pleased with the ongoing progress that has been made on our key growth strategies as we continue to build a strong, defensible business in Australia and New Zealand. Our portfolio of global distributed brands, owned vertical brands, integrated digital capability and large store network are core assets of the Group and position the Company well for growth into the future.

The post Accent share price races 10% higher after half-year profits triple appeared first on The Motley Fool Australia.

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More reading

• 6% dividend yield! An ASX share to buy in February and hold for 10 years
• These are the growing ASX dividend shares to buy now: analysts
• Buy these ASX passive income shares with 5%+ yields today: experts
• Buy Pilbara Minerals and this ASX dividend share: experts
• 3 ASX All Ordinaries stocks hitting new 52-week highs 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 recommended Accent 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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Well ASX 200 earnings season is in full swing, and we have certainly seen some dramatic reports so far. Some of the most watched metrics when an ASX share reveals its earnings is what kind of dividend income is coming investors’ way in the next few weeks.

Not only does a dividend give an insight into the financial health of a company, but investors just like to see that passive income in their hands.

Some ASX 200 shares have given investors a dividend pay cut this season, such as BHP Group Ltd (ASX: BHP) and AGL Energy Limited (ASX: AGL). But let’s discuss four ASX 200 shares that have gone the other way and ramped up their dividend payments for investors.

4 ASX 200 dividend shares upping their payouts in 2023

Woolworths Group Ltd (ASX: WOW)

ASX 200 blue chip Woolworths is first up. Woolies delighted its investors with its latest dividend announcement on Wednesday. The grocery giant will be forking out a fully-franked 46 cents per share in April.

That’s a good 17.9% higher than the interim dividend of 39 cents that investors received last year. But it comes in at the same level as Woolies’ interim dividend from 2021. At yesterday’s close, Woolworths stores now have a dividend yield of 2.49%.

Coles Group Ltd (ASX: COL)

And that brings us to Woolworths’ arch-rival Coles. Coles also upped its dividend game this earnings season. The supermarket operator announced its own earnings on Tuesday this week, and these also included a dividend boost for investors.

Coles paid out an interim dividend of 33 cents per share in 2022, but announced a hike of its own this week, with investors now in line to bag a fully-franked 36 cents per share interim dividend in 2023. That’s the largest dividend Coles has paid out since listing on the ASX in 2018.

That’s a 9.1% boost though, which isn’t quite as large of an increase as Woolies managed. Coles now trades on a dividend yield of 3.69%.

Ramsay Health Care Limited (ASX: RHC)

Another ASX 200 share giving investors a pay rise this earnings cycle is the healthcare heavyweight Ramsay. This company used to have one of the best dividend streaks on the ASX, raising its payouts every single year between 2000 and 2019. Alas, the pandemic sadly brought this to an end in 2020.

But Ramsay seems to be getting back on that horse, and just yesterday announced a fully-franked interim dividend of 50 cents per share for 2023. That’s a 3% increase over 2022’s corresponding dividend of 48.5 cents per share. Ramsay shares are yielding 1.43% right now.

Medibank Private Ltd (ASX: MPL)

Our final ASX 200 share worth checking out today is another healthcare share in Medibank Private. Medibank was another ASX stock that reported yesterday. In these earnings, the insurer revealed an interim dividend of 6.3 cents per share, fully franked.

That’s a rise of 3.28% over 2022’s interim dividend of 6.1 cents per share. Medibank is another ASX 200 share that is building up a solid dividend streak. It paid out 12 cents per share in total in 2020, 12.7 cents per share in 2021 and 13.4 cents in 2022.

With this latest dividend, it is on track to raise its annual total in 2023 as well. Medbank shares have a dividend yield of 4.09% today.

The post Passive income watch: 4 ASX 200 shares that announced boosted dividends this week appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Why Lovisa, Medibank, Qube, and Smartgroup shares are charging higher
• I’d invest my first $500 in this high-dividend-yield ASX stock today
• Ramsay share price jumps on 22% profit boost 
• Medibank share price charges higher amid profit boost

Motley Fool contributor Sebastian Bowen has positions in Ramsay Health Care. 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 Coles 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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It’s been 10 years since Evolution Mining Ltd (ASX: EVN) introduced its revenue-linked dividend policy, and it’s provided those invested in its shares with more than 20 payouts since. In the meantime, stock in the gold producer has risen 122%.

Indeed, a $1,000 investment in Evolution Mining shares in February 2013 likely would have bought 800 securities at $1.25 apiece.

Today, that parcel would be worth $2,224. The Evolution Mining share price last closed at $2.78.

For comparison, the S&P/ASX 200 Index (ASX: XJO) has gained around 45% in that time.

But how much have long-term Evolution Mining investors made when it comes to dividends? Let’s take a look.

Own Evolution Mining shares? Here are all the company’s dividends

Here are all the dividends that have been paid to those invested in Evolution Mining shares since 2013:

Evolution dividends’ pay date	Type	Dividend amount
August 2022	Final	3 cents
March 2022	Interim	3 cents
September 2021	Final	5 cents
March 2021	Interim	7 cents
September 2020	Final	9 cents
March 2020	Interim	7 cents
September 2019	Final	6 cents
March 2019	Interim	3.5 cents
September 2018	Final	4 cents
March 2018	Interim	3.5 cents
September 2017	Final	3 cents
March 2017	Interim	2 cents
September 2016	Final	2 cents
March 2016	Interim	1 cent
October 2015	Final	1 cent
March 2015	Interim	1 cent
October 2014	Final	1 cent
March 2014	Interim	1 cent
September 2013	Maiden	1 cent
Total:		64 cents

As the chart above shows, each Evolution Mining share has yielded 64 cents of dividends since the company’s maiden payout.

That means our figurative $1,000 parcel has probably provided $552 of passive income over its life – bringing its return on investment (ROI) to 178%.

And, of course, if an investor were to have reinvested their dividends, they could have realised further gains through the power of compounding.

Not to mention, all Evolution Mining dividends since September 2017 have been fully franked. Thus, they’ve had the potential to bring tax benefits.

Right now, Evolution Mining shares boast a 2.16% dividend yield.

The ASX 200 company also declared its next dividend last week. It comes in at 2 cents per share and will be paid in June.

The post Invested $1,000 in Evolution Mining shares in 2013? Here’s how much dividend income you’ve received appeared first on The Motley Fool Australia.

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

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ASX dividend stocks have a very useful ability of being able to pay dividends and grow both the underlying value of the business plus the payout over time. Investing $1,500 a month could turn into $1 million.

There are some ASX shares that have been very generous dividend payers over the last decade, like BHP Group Ltd (ASX: BHP) and Commonwealth Bank of Australia (ASX: CBA). But, with how large they are, I don’t believe they have enormous capital growth potential.

However, businesses that have more growth potential could be an excellent choice to deliver a steady stream of dividends as well as compound growth in the coming years.

I wouldn’t advocate putting all of someone’s money into just one business. However, some investments do have a lot of underlying diversification. While there are a number of exchange-traded funds (ETFs) that offer compelling diversification in just one investment, many don’t provide good dividend yields.

But, there are a few different ASX dividend stocks that could provide that diversification, good dividends instantly and long-term growth. Today, I’m going to tell you about Washington H. Soul Pattinson and Co. Ltd (ASX: SOL).

It’s an ‘investment conglomerate’. It’s like Warren Buffett’s Berkshire Hathaway because Soul Pattinson invests in listed businesses and private businesses/assets.

Dividend yield

One of the most important aspects of an ASX dividend stock is the income we’re going to get. I like large dividends, but I’m happy to receive a smaller yield if it gives a better chance of dividend growth each year and more re-investment.

Soul Pattinson grew its FY22 full-year dividend by 16.1% to 72 cents. At the current Soul Pattinson share price, that translates into a trailing grossed-up dividend yield of 3.6%.

While dividend growth is not guaranteed, the company has grown its dividend every year since 2000, so I think the future yield-on-cost will be even more compelling.

The dividend is funded by the cash flow that Soul Pattinson receives from its portfolio of investments. As its investments grow profit and pay larger dividends, that means Soul Pattinson can fund higher dividends too.

Long-term growth

Soul Pattinson aims to find resilient investments that it believes can grow both the dividends and capital value over time.

That has resulted in a portfolio of names like TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), Macquarie Group Ltd (ASX: MQG), as well as private investments like agriculture and an electrical parts business called Ampcontrol.

At the company’s annual general meeting (AGM) it said that over the prior 20 years, the ASX dividend stock had delivered an average total shareholder return (TSR) per annum of 12.5%.

Past performance is certainly not a reliable indicator of future performance. However, investing $1,500 per month and achieving an average return per annum of 12.5% would take 18 years to reach a $1 million portfolio. If the returns going forwards are lower than 12.5% per annum then it will take longer to achieve the $1 million goal.

‘Revolving diversification’

I think one of the most underrated factors that makes a good investment is longevity.

It seems somewhat inevitable that many companies and technologies are replaced over time. Kodak, Blackberry and IBM are not the giants they used to be.

There are very few companies that we can hold, own forever and likely see good returns.

What I like about ETFs and Soul Pattinson is that their portfolios can change, removing the losers and investing in the current/future winners. I think it’s this ability that will help the ASX dividend stock continue to be a solid performer for the next 10 to 20 years.

The post Invest $1,500 each month in this ASX dividend stock to actually create a $1 million portfolio appeared first on The Motley Fool Australia.

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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 Berkshire Hathaway, Brickworks, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks, Macquarie Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Berkshire Hathaway and Tpg Telecom. 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 pretty incredible, but there is actually a technology stock in the S&P/ASX 200 Index (ASX: XJO) that’s risen 46% over the past year.

This is a pretty remarkable effort during a time when the S&P/ASX All Technology Index (ASX: XTX) lost 7.8%. If you go back to November 2021, the tech index has lost a third of its value.

That outlier is Brisbane’s TechnologyOne Ltd (ASX: TNE).

“TechnologyOne is Australia’s largest enterprise resource planning (ERP) software-as-a-service (SaaS) provider,” Fairmont Equities managing director Michael Gable said in a blog post.

The reason for its outperformance compared to its industry peers is the demographics of its clients.

“Around 85% of revenue is generated from the government, education and health sectors, which are highly defensive. The company has a customer retention rate of +99% and [a] very low customer churn rate.”

‘Consistent performance’ and ‘highly attractive’ fundamentals

According to Gable, TechOne’s “fundamentals are highly attractive”, citing the business’ 90%+ recurring revenue profile, a less than 1% churn rate, “a highly cash generative business model” and a clean balance sheet.

The software provider has a history of “consistent performance”, and currently has “achievable medium-term targets”.

That includes a profit before tax margin of 35% by the 2026 financial year and a three-year earnings growth profile of +14% per annum.

Although the TechOne share price has gone sideways for the past month, Gable expects it to resume its climb.

“With the shares currently trading on a one-year forward P/E multiple of ~44x, which is above the upper end of the trading range over the last four years (35 to 43x), we consider that the market is starting to factor in TechOne’s medium-term targets.”

About 18 months ago, the company acquired UK software vendor Scientia in an effort to gain clientele in the education sector.

Gable is looking forward to seeing what impact that has on TechOne’s performance.

“Evidence of a step-change in ARR performance in the UK following the Scientia acquisition, as well as maintaining a higher rate of additional customers per year onto the SaaS platform are two key factors that would support a more positive view on the shares.”

Gable’s peers are somewhat divided on TechOne shares.

According to CMC Markets, seven out of 12 analysts currently reckon the stock is a hold. Two rate it a buy and three urge a sell.

The post Up 45% in a year! But this boom ASX 200 tech share is still a buy: expert appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Technology One. 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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