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The S&P/ASX 200 Index (ASX: XJO) stock could be a very effective choice for passive income. I’m going to talk about Macquarie Group Ltd (ASX: MQG) shares.

The ASX financial share has done a good job at growing earnings and the dividend since the GFC by diversifying and growing segments of the business that can deliver consistent earnings.

Higher earnings have helped grow the Macquarie share price – over the past five years it’s up 85%.

How to make $1,000 of monthly income from Macquarie shares

There are very few ASX stocks that pay monthly. I think it’s better to think of a monthly income as an annual amount that can be divided equally into 12.

To make $1,000 a month, we need to generate $12,000 of annual dividend income.

In FY23, according to Commsec, Macquarie is expected to pay an annual dividend per share of $6.78, not including the effect of franking credits. That’s a cash dividend yield of 3.6%.

If we owned 1,770 Macquarie shares, then we’d receive $12,000 of annual passive income of dividends in cash. The franking credits would be a bonus on top of that.

The current Commsec forecasts for Macquarie suggest that the dividend could be increased to $6.80 per share in FY24. At the current Macquarie share price, that suggests the ASX 200 stock could pay an FY24 cash dividend yield of 3.6%.

There could be another dividend increase in FY25. Commsec numbers currently predict a dividend per share of $7.20. That’s a possible forward cash dividend yield of 3.8%.

If we think about FY25’s payout, investors would only need to own 1,667 Macquarie shares to get $12,000 of annual dividends.

How is the ASX 200 stock performing?

The latest update that investors have seen was the quarterly update for the three months to 31 December 2022.

It said that varied conditions for its diverse businesses resulted in a good quarter.

Macquarie said that net profit after tax (NPAT) for the nine months to 31 December 2022 was “slightly up” on the nine months to 31 December 2021.

The cause for the profit increase was that its commodities and global markets (CGM) business profit was “up substantially” in the latest quarter, driven by commodities, including gas and power contributions across all regions.

Macquarie remains well capitalised, with a group surplus of $12.5 billion.

At the current Macquarie share price, the ASX 200 stock is valued at under 15 times FY23’s estimated earnings.

The post For $1,000 in monthly passive income, buy 1,770 shares of this ASX 200 stock appeared first on The Motley Fool Australia.

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More reading

• Buy these ASX dividend shares next week: experts
• 5 ASX 200 shares I would buy if I was starting from scratch: expert
• Forget term deposits! I’d listen to Warren Buffett and invest $250 a month to try to retire rich
• Macquarie has these ASX 200 dividend shares in its income portfolio
• These ASX 200 shares are top picks in Macquarie’s growth portfolio

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

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

Bapcor Ltd (ASX: BAP)

According to a note out of Citi, its analysts have retained their buy rating on this auto parts retailer’s shares with an improved price target of $9.18. This follows the release of the company’s half year results. Citi was happy with the results but is particularly positive on Bapcor’s transformation program and believes it will offset any short term performance risks. It also feels that any inventory concerns are unnecessary and expects levels to moderate in the second half. The Bapcor share price ended the week at $6.33.

CSL Limited (ASX: CSL)

A note out of Morgans reveals that its analysts have retained their add rating and lifted their price target on this biotherapeutics company’s shares to $337.92. Morgans was pleased with CSL’s results and believes that its strong plasma collections and ongoing demand across both Behring and Seqirus, coupled with Vifor’s added breadth, suggests strong growth and momentum ahead. The CSL share price was fetching $298.40 at Friday’s close.

Endeavour Group Ltd (ASX: EDV)

Another note out of Morgans reveals that its analysts have upgraded this drinks giant’s shares to an add rating with an improved price target of $7.80. This follows the release of Endeavour’s half year result, which was comfortably ahead of expectations. And while Morgans acknowledges that the regulatory environment remains uncertain, it feels that the risks are to the upside with the underlying business performing well. The Endeavour share price ended the week at $6.78.

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

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More reading

• How to generate passive income the Warren Buffett way with ASX shares
• Brokers name 3 ASX shares to buy now
• Why did the ASX 200 leap higher on rising unemployment data?
• Why Bapcor, Magellan, Sonic Healthcare, and Telstra shares are charging higher
• Bapcor share price surges 5% on record half

Motley Fool contributor James Mickleboro has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia has recommended Bapcor. 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 looking for dividend shares to buy when the market reopens, then the two listed below could be worth a look.

Both have been named as buys by experts recently and tipped to provide attractive yields. Here’s why they are bullish on them:

Macquarie Group Ltd (ASX: MQG)

The first ASX dividend share that could be in the buy zone is this investment bank.

Morgans is a fan and spoke very positively about the company following its recent quarterly update. It said:

MQG is a quality franchise, exposed to structural growth areas, and the company has performed exceptionally well in a more difficult FY23 environment. MQG has also consistently delivered attractive returns over time (~15% average ROE) and with >10% share price upside to our price target (A$214), we maintain our ADD recommendation.

Morgans has an add rating and $214.51 price target on the company’s shares.

In respect to dividends, the broker is expecting partially franked dividends of $7.41 per share in FY 2023 and $7.13 per share in FY 2024. Based on the current Macquarie share price of $189.00, this will mean yields of 3.9% and 3.8%, respectively.

Universal Store Holdings Ltd (ASX: UNI)

Another ASX dividend share that has been named as a buy is youth fashion retailer Universal Store.

Goldman Sachs recently named it as a key pick in the retail sector due to its exposure to younger consumers, which it expects to continue spending in 2023. The broker commented:

In addition to a strong outlook for Gen-Z spending, we see an opportunity for ongoing store roll-out for UNI which is the market leader in youth multi-brand apparel. Relative to youth footwear, the youth apparel category is under-penetrated in terms of store footprint; we forecast an additional 22 Universal stores will be rolled out in the next three years.

Goldman Sachs has a buy rating and $7.55 price target on its shares.

As for dividends, the broker is expecting fully franked dividends of 27 cents in FY 2023 and 31 cents in FY 2024. Based on the latest Universal Store share price of $5.45, this equates to yields of 5% and 5.7%, respectively.

The post Buy these ASX dividend shares next week: experts appeared first on The Motley Fool Australia.

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More reading

• These ASX dividend shares have big yields and bigger upside potential: experts
• Why Challenger, SG Fleet, Sims, and Universal Store shares are rising
• 5 ASX 200 shares I would buy if I was starting from scratch: expert
• Forget term deposits! I’d listen to Warren Buffett and invest $250 a month to try to retire rich
• If I had a spare $1,000, here’s where I’d invest in the stock market now

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Macquarie 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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There are a lot of quality shares for investors to choose from on the ASX 200 index.

In order to narrow things down for investors, listed below are three ASX 200 shares that are rated highly by analysts and could be quality buy and hold options.

Here’s what you need to know about them:

Goodman Group (ASX: GMG)

The first ASX 200 share that could be a great buy and hold option is Goodman Group. It is a leading integrated commercial and industrial property group that owns a high quality portfolio of assets. Given that a good portion of its portfolio has exposure to structural tailwinds such as ecommerce and the digital economy, they look likely to be in demand with customers for a long time to come. This should be supportive of strong rental income and distribution growth over the next decade.

Citi is a fan of Goodman and has a buy rating and $24.00 price target on its shares.

Ramsay Health Care Limited (ASX: RHC)

Another ASX 200 share to consider as a buy and hold investment is Ramsay Health Care. It is a leading private healthcare company with operations across the world. After struggling during the pandemic, Ramsay has started to bounce back and looks set to benefit from a backlog in surgeries in the near term. Looking further ahead, the company appears well-placed for long term growth thanks to increasing demand for healthcare services due partly to ageing populations and increased chronic disease.

Morgans is positive on the company and has an add rating and $74.41 price target on its shares.

ResMed Inc. (ASX: RMD)

A final ASX 200 share to buy and hold could be ResMed. It is a medical device company with a focus on the sleep treatment market. Thanks to its industry-leading products, wide distribution network, and successful acquisitions, ResMed has been growing at a solid rate for years. The good news is that thanks to its significant market opportunity and the growing prevalence of sleep disorders, it has been tipped to continue this trend long into the future.

Citi is also bullish on ResMed and has a buy rating and $39.00 price target on its shares.

The post 3 excellent ASX 200 shares to buy and hold for a decade: analysts appeared first on The Motley Fool Australia.

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More reading

• How to generate passive income the Warren Buffett way with ASX shares
• 2 ASX 200 stocks on the move following earnings updates
• Why experts say these ASX 200 blue chip shares are buys
• This ASX 200 share is one of my top ideas to rake it in on a recovery
• How do I cash in my Newcrest shares if US giant Newmont takes over?

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 ResMed. The Motley Fool Australia has positions in and has recommended ResMed. The Motley Fool Australia has recommended Goodman Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Lake Resources NL (ASX: LKE) share price closed Friday’s session down 3.8% to 63.5 cents.

This caps off a hideous month for the ASX lithium share, which has slid 22% over this short period.

Why is the Lake Resources share price falling so much?

So, let’s get a bit of context here. Lake Resources is not the only ASX lithium share that has been falling over the past month.

Take a look:

• Sayona Mining Ltd (ASX: SYA) shares are down 13%
• Core Lithium Ltd (ASX: CXO) shares are down 7%
• Allkem Ltd (ASX: AKE) shares are down 2.9%
• Liontown Resources Ltd (ASX: LTR) shares are down 10%
• IGO Ltd (ASX: IGO) shares are down 5%.

But you see the problem, right?

It’s the scale of the Lake Resources share price fall at 22% that stands out.

Most of these ASX lithium shares are down, at least partly, due to some bearish outlooks for lithium prices. But that’s a common factor affecting all lithium stocks. Why is Lake Resources down so much more?

Short seller attack

A few lithium stocks are being targeted by short sellers right now, and Lake Resources is one of them.

Short-selling is a trading strategy where investors try to profit from a fall in the share price. They borrow, then sell the shares, with the intention of buying them back later when they fall in value to make a profit.

As my colleague James reported this week, Lake Resources remains among the ASX’s 10 most shorted stocks with 7.6% of its capital currently shorted. But there are a few lithium stocks on that list.

Core Lithium actually has a higher short interest than Lake Resources with 9.6% of its shares shorted. But as James points out, the reason for that shorting is valuation concerns. A bunch of investors think the Core Lithium share price is too high right now, so they’re betting on a correction.

The unique element of the short activity on Lake Resources is that it’s being directly attacked by a United States short-selling activist group called J Capital.

In July last year, J Capital released a report questioning operational matters relating to Lake Resource’s technology and project funding.

Lake Resources responded at the time saying the report “puts forth incorrect information on technical matters and inaccurate assertions … “.

J Capital has issued further reports since then, with the latest report released in December.

In short, J Capital doesn’t believe Lake Resources can achieve what it says it can, and they’re proactively hassling them on the details.

Should you buy Lake Resources?

This sort of thing is pretty confusing for ordinary investors. Many people don’t even understand what short selling is because it’s not a trading strategy that is typically available to retail investors. It’s the domain of institutional and sophisticated investors, like hedge fund managers.

To state the obvious, buying an ASX share that is the subject of a short attack is pretty gutsy. You need to really understand the ins and outs of the Lake Resources business and what J Capital is saying about it.

In order to decide whether to buy Lake Resources shares or not, prospective investors would have to do an enormous amount of research to satisfy themselves that what J Capital is saying isn’t right.

And that research is on top of the usual fundamental analysis that every investor should do on every ASX share they are considering investing in.

So, we’re talking about a serious time commitment here, and this might be one reason why the Lake Resources share price isn’t trading so well at the moment.

The post Down 22% in a month, is it time to dive in and buy Lake Resources shares? appeared first on The Motley Fool Australia.

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More reading

• Two ASX shares with bucketloads of growth potential: experts
• Why has the Sayona Mining share price crashed 20% in 2 weeks?
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Why this US$1 trillion milestone matters for ASX 200 lithium shares
• Down 38% since mid-November, is it time to bag some Liontown shares?

Motley Fool contributor Bronwyn Allen has positions in Allkem and Core Lithium. 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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Last week, Commonwealth Bank of Australia (ASX: CBA) released its half year results and revealed just how much rising interest rates are boosting its profits.

For the six months ended 31 December, CBA reported a 12% increase in operating income to $13,593 million and a 9% lift in cash earnings to $5,153 million.

This allowed the CBA board to increase its interim dividend by 20% year over year to a fully franked $2.10 per share.

The good news is that its final dividend is forecast to be even larger. According to a note out of Morgans, its analysts expect a fully franked final dividend of $2.40 per share, bringing the total dividends to $4.50 per share.

Based on where CBA shares are currently trading, this will mean a fully franked 4.5% yield for investors.

How to generate a $20,000 second income from CBA shares

If Morgans is on the money with its forecast, for a $20,000 second income you would need to own approximately 4,444 CBA shares.

Unfortunately, this would come at some cost for investors.

CBA shares are currently fetching $100.97. This means you would need to invest approximately $450,000 to yield the desired amount.

The long way

What if you don’t have $450,000 to invest? Well, don’t rule out being able to achieve this goal in the future.

The share market has generated a return of 10% per annum historically. With that in mind, making consistent investments into a balanced portfolio of high quality ASX shares could get you to $450,000 sooner than you might think.

The market is of course not guaranteed to generate a 10% per annum return in the future, but if it were to deliver returns in line with historical averages and your portfolio matched it, investing $10,000 per year would grow into $450,000 in 17 years.

Once it gets to that point, you could then switch your focus to income and build a portfolio yielding 4.5% to receive a $20,000 second income without lifting a finger.

The key is to have a plan, stick to it, and let compounding work its magic.

The post How I’d generate a $20,000 second income from CBA shares appeared first on The Motley Fool Australia.

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More reading

• CBA shares ‘do not look cheap’ despite recent selloff: broker
• Passive income watch: 3 ASX 200 shares that announced boosted dividends this week
• Is the CBA share price a buy following Wednesday’s 5% fall?
• Earnings preview: Here are the ASX shares reporting on Thursday
• 5 things to watch on the ASX 200 on Thursday

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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There are many exchange-traded funds (ETFs) to choose from on the ASX, both active and passive.

Although the funds themselves are traded on the ASX, many of these contain overseas stocks.

The situation then gets complicated because the buying and selling price for these shares becomes dependent on the exchange rate of the Australian dollar.

Some ETF providers have provided a solution around this by providing currency-hedged funds.

Hedged funds will use financial instruments to smooth out the effects of any exchange rate fluctuations over time.

So when should you buy into a currency-hedged ETF, and when should you go for the unhedged ETF?

Shaw and Partners portfolio manager James Gerrish gave his thoughts recently on this dilemma:

The Australian dollar is a risk currency

Gerrish took the example of Betashares Nasdaq 100 ETF (ASX: NDQ) and BetaShares NASDAQ 100 ETF-Currency Hedged (ASX: HNDQ).

“These are ASX listed ETFs yet they are holding US assets such as Microsoft Corp (NASDAQ: MSFT), Apple Inc (NASDAQ: AAPL) and Amazon.com Inc (NASDAQ: AMZN),” he said on a Market Matters Q&A.

“NDQ is not hedged whereas the HNDQ ETF is currency hedged.”

He explained that if the NASDAQ-100 (NASDAQ: NDX) rises by 10%, HNDQ is designed to do the same.

“NDQ is also exposed to the vagaries of the Australian dollar,” said Gerrish.

“If the Aussie falls by 10% your gains on the underlying stock could be wiped away and, of course, vice versa.”

The conventional wisdom is to buy the hedged ETF when the Australian dollar is low, and buy the unhedged version when the Aussie is high against other currencies.

However, Gerrish’s insight is that the difference is not as significant as one might think.

“Unhedged exposures generally have a smoothing effect on returns for Australian investors given the Australian dollar is a risk currency,” he said.

“When markets fall, the Australian dollar generally falls as well, cushioning the decline.”

Over the past year, NDQ has fallen 11.5% while the currency-hedged HNDQ has lost 17%.

The post Hedged or unhedged: Which ASX ETF do I buy? appeared first on The Motley Fool Australia.

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More reading

• Here are 3 quality ETFs for ASX investors to buy right now
• This ASX tech share’s rallied 16% in 2 months. Here’s why
• Does the BetaShares Nasdaq 100 ETF share price fall make it a no-brainer buy?
• These top ETFs could be great options for beginner ASX investors
• Top ASX ETFs to buy in February 2023

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Tony Yoo has positions in Amazon.com, BetaShares Nasdaq 100 ETF, Betashares Nasdaq 100 ETF – Currency Hedged, and Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon.com, Apple, BetaShares Nasdaq 100 ETF, and Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Amazon.com, Apple, and Betashares Nasdaq 100 ETF – Currency Hedged. 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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Right now share markets are witnessing a battle royale between Goldilocks and the bears.

That’s according to Wilsons head of investment strategy David Cassidy, who this week evoked the fairytale to describe the delicate balance challenging ASX shareholders.

“Investors still appear skittish as uncertainty oscillates between fears of a too hot (inflation) and too cold (recession) macro backdrop,” he said in a memo to clients.

“These bear case scenarios have been interspersed with what appears to be the market’s central case view, ‘benign disinflation’ (the goldilocks scenario), leading to good performance from both equities and bonds so far this year.”

So will Goldilocks or the bears win? Where will ASX shares end up after this year is done?

ASX stocks will be watching both US and Australia

Firstly, whether the US economy falls into recession will be a big factor as to how Australian shares will do.

Cassidy is optimistic that America will avoid the worst.

“The labour market does remain an area of resilience and is central to our view that the US can avoid a genuine hard landing,” he said.

“Our core view remains for falling inflation over the year and slowing but not recessionary growth trends.”

This will mean the US Federal Reserve could even cut rates later this year, which would put an absolute rocket under stocks.

Secondly, Cassidy is also positive about how Australia might navigate the battle against inflation.

“We think inflation can come down faster than the RBA is suggesting, given global trends and the likely slowing in domestic demand that is set to unfold,” he said.

“However, residual stickiness in inflation in coming months does raise the risk that the RBA ‘overtightens’ this year.”

The do-or-die number

The crucial threshold for Cassidy is whether the Reserve Bank will push its cash rate higher than 4%. 

It’s currently at 3.35%.

“If the RBA is forced to move above 4% and hold rates there, the risks of an economic hard landing undoubtedly rise, despite the resilience of the economy to date,” he said.

“We still see a move above 4% as unlikely, and we still see the inflation and growth dynamics as likely to allow the RBA to ease by year end.”

Cassidy is in no doubt much volatility is to come this year, similar to last year.

But he urged investors to not “let the bears get you”.

“Our core view remains constructive,” he said.

“While acknowledging how the strong start to the year for equities has crimped near-term return prospects, we think 12-month prospects for equities remain respectable.”

So how should investors take advantage? What should they buy?

“We continue to emphasise high quality, earnings-resilient equity portfolios as inflation ebbs and growth slows.”

The post ‘Don’t let the bears get you’: Where will ASX shares end up in 2023? appeared first on The Motley Fool Australia.

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More reading

• Should you dig into Rio Tinto shares before the ASX 200 miner reports next week?
• How to generate passive income the Warren Buffett way with ASX shares
• Here are the top 10 ASX 200 shares today
• Two ASX shares with bucketloads of growth potential: experts
• If I invest $1,000 in AGL shares now, what could my return be this year?

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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Rio Tinto Limited (ASX: RIO) shares have been on a tear since 1 November.

On the back of a big surge in the price of iron ore and copper, shares in the S&P/ASX 200 Index (ASX: XJO) listed miner have gained a whopping 41% since the closing bell on 31 October.

Atop the share price gains, Rio Tinto also pays a fully franked trailing dividend yield of 7.7%.

Of course, that’s all water under the bridge.

With the miner reporting its full-year results next Wednesday, 22 February, many ASX 200 investors are wondering, is it a good time to buy shares before those results are released?  

To buy or not to buy?

Buying Rio Tinto shares before it releases the full-year results is not without risk.

Shares could see a significant move lower, as well as higher, on the day.

One of the things investors will be keeping a close eye on is the earnings guidance provided by management, alongside any forward-looking statements, particularly involving its growth projects. If guidance comes with growth expectations, Rio Tinto shares could gain on the day.

Another key factor will be whether the company exceeds or falls short of consensus expectations. Any outperformance will offer headwinds for the share price while falling short of market forecasts could usher in some selling on the day.

What kind of profit is the market expecting from Rio Tinto shares?

According to the latest research from Goldman Sachs, consensus estimates forecast full-year underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) of US$26.7 billion.

That’s down 29% from the underlying EBITDA of US$37.7 billion reported last year. But as the decline is widely expected, much of that fall will already be priced in.

Goldman has a slightly higher EBITDA forecast of US$26.8 billion for FY23, believing Rio’s copper and minerals segment will outperform.

Profits will be another metric that could send Rio Tinto shares higher or lower next Wednesday.

Consensus expectation forecast net profit after tax (NPAT) of US$13.7 billion. Goldman believes NPAT will fall short of that and come in at US$12.9 billion, citing higher than expected depreciation and amortisation, rehab costs and tax.

Then there’s the dividend payout.

Consensus forecasts are for Rio Tinto to pay a full year, 100% franked dividend of US$4.92 per share, a steep drop from the US$7.93 per share paid out last year. Goldman believes the market is being optimistic here. Its analysts forecast a final payout of US$4.64 per share.

Which brings us back to the question, should investors snap up some Rio Tinto shares before the ASX 200 miner reports next week?

Well, as a longer-term investor, I know that timing the market is no easy thing. I also know that longer-term the world is going to need a lot more iron ore, copper and aluminium.

And with Goldman Sachs issuing a target price of $132 on Rio Tinto shares – some 6% above Friday’s closing price – I’d say Rio Tinto shares are well worth considering adding to your long-term portfolio.

Before, or after, the company reports.

The post Should you dig into Rio Tinto shares before the ASX 200 miner reports next week? appeared first on The Motley Fool Australia.

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More reading

• Why experts say these ASX 200 blue chip shares are buys
• Here’s the iron ore price forecast for 2023: CBA
• Own Rio Tinto shares? Here’s what the market is expecting from its FY 2022 results
• How I’d generate a $50,000 retirement income from Rio Tinto shares
• With interest rates heading higher again, the risk is to the downside for these popular blue chip ASX shares

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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When it comes to generating a passive income from ASX shares, investors could learn a lot from Warren Buffett.

The Oracle of Omaha receives huge pay checks from his investments each year and there’s nothing to stop you from doing the same.

Passive income the Buffett way

Warren Buffett has a penchant for making buy and hold investments in high quality companies with positive long term outlooks that are trading at fair prices and pay sustainable dividends.

A prime example of this is Buffett’s long term investment in Coca-Cola Co, which comprises approximately 400 million shares.

In 2022, his Berkshire Hathaway business received a whopping US$704 million in dividend income from Coca-Cola Co.

But what makes this particularly impressive is that these dividends come from an original investment of US$1.3 billion.

This means the Buffett earned more than half his original investment back in dividends last year.

And if you include the many dividends that have been paid since he bought his shares in the late 1980s, Buffett has received approximately US$10 billion from Coca-Cola Co’s shares alone.

That’s almost seven times his original investment and you can bet that there’s plenty more to come.

But don’t worry if you don’t have US$1.3 billion down the back of the sofa to invest! Smaller investments would still have been very rewarding.

For example, had you invested a more modest $10,000 at the same time as Warren Buffett, you would have received $5,400 in dividends last year. You would also have received almost $70,000 in dividends in total during your investment period. All from sitting patiently on a single $10,000 investment!

What about ASX shares?

While we may not have Coca-Cola on the Australian share market (anymore), there are plenty of ASX shares that have characteristics that Buffett looks for when making investments.

A few for investors to look closely at include energy infrastructure company APA Group (ASX: APA), drinks company Endeavour Group Ltd (ASX: EDV), industrial property company Goodman Group (ASX: GMG), and wine giant Treasury Wine Estates Ltd (ASX: TWE).

The post How to generate passive income the Warren Buffett way with ASX shares appeared first on The Motley Fool Australia.

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More reading

• 2 ASX 200 stocks on the move following earnings updates
• 3 ASX 200 shares that could drive strong returns in an inflationary world: expert
• Should I buy Endeavour shares following the ASX 200 company’s stellar results?
• Why CBA, Corporate Travel Management, Treasury Wine, and Westpac shares are dropping
• Treasury Wine share price sinks 7% despite solid earnings growth

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 Berkshire Hathaway. The Motley Fool Australia has positions in and has recommended Apa Group. The Motley Fool Australia has recommended Berkshire Hathaway, Goodman Group, and Treasury Wine Estates. 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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