Tag: Motley Fool

The Fortescue Metals Group Limited (ASX: FMG) share price is steady in early trade. 

The S&P/ASX 200 Index (ASX: XJO) iron ore miner closed yesterday trading for $22.52 per share. Thirty minutes after the opening bell, shares are changing hands for $22.52. (We’ll let you do the maths there.)

This comes as rumours of a potential big round of pending layoffs are making the rounds in the financial media.

What’s this about redundancies?

The Fortescue share price is steady in morning trade as ASX 200 investors mull over the implications of the job cuts. 

According to sources cited by The Australian, the miner is eyeing cutting 1,000 jobs or more.

Employees facing the axe include those at environmentally-focused Fortescue Future Industries (FFI).

The cited sources indicated Fortescue has been considering a significant round of layoffs since last year. Some said that up to 500 FFI employees may lose their jobs, out of a total of just over 1,100 employed at the green energy company.

Reductions may also take place among the Fortescue’s head office, finance and IT staff.

Fortescue releases its half-year financial results (1H FY23) on 15 February. It was reported that the board, including chair Andrew Forrest, will debate the merits of the job cuts before then.

The miner has not yet released any statements clarifying its intentions, however, a spokeswoman stated, “People and performance are always our focus.”

“We are always looking for opportunities for continuous business improvement,” she added. “That is how we retain our status as the lowest cost producer in the world.”

At the end of FY22, Fortescue directly employed 11,693 people.

Fortescue share price snapshot

The Fortescue share price, as you can see in the chart below, is up 1% over the past 12 months.

2023 has offered some strong tailwinds for the miner, with shares up 10% year to date.

The post Fortescue share price shrugs off layoff rumblings appeared first on The Motley Fool Australia.

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More reading

• Fortescue share price edges higher on ‘potentially massive’ news
• Is the 9%+ Fortescue dividend yield safe for passive income investors?
• Why are ASX 200 iron ore shares being hammered hard on Friday?
• Why are ASX 200 iron ore shares like Rio Tinto sliding lower today?
• Here’s the Fortescue dividend forecast through to 2025

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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The Appen Ltd (ASX: APX) share price is racing higher again on Friday.

At the time of writing, the artificial intelligence (AI) data services company’s shares are up 13.5% to $3.35.

This means the Appen share price is now up 29% since Monday’s close.

Why is the Appen share price on fire this week?

With no news out of Appen or broker notes relating to the company, it is difficult to say for sure why its shares are on fire this week.

However, it is worth noting that the emergence of OpenAI’s ChatGPT last year has been a game changer for the AI industry.

While companies have been spending billions on AI activities for years, the arrival of ChatGPT has been leaps and bounds ahead of anything that has been developed before. All in all, it appears that AI is now at an inflection point.

This has led to companies such as Google parent Alphabet and China’s search engine giant Baidu scrambling into action to compete with OpenAI.

This could prove to be very good news for Appen, which has been struggling over the last few years and seen its share price head lower and lower.

How Appen could benefit

Appen provides tech companies with AI data services. It ensures that they have high quality data that companies can then use to train their machine learning models. Without high quality data, it is unlikely that their models would be able to come close to ChatGPT.

So, with Google and Baidu now believed to be upping their investments on AI activities materially, investors appear to believe that Appen could be well-positioned to benefit from increased demand for data services.

Though, it is worth remembering that this is not guaranteed. There’s plenty of competition out there and some companies have taken such activities in-house.

The good news is that investors won’t have to wait long until they get an update from Appen. It is scheduled to release its full year results later this month.

The post Appen share price soars again, up 29% since Monday appeared first on The Motley Fool Australia.

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More reading

• Beaten-up ASX 300 tech share Appen is booming 10% today
• Why Appen, Janus Henderson, Lithium Energy, and Pinnacle shares are charging higher
• Why Appen, Gold Road, Healius, and Pinnacle shares are dropping today
• Why is the Block share price surging 6% 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 positions in and has recommended Appen. 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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Stock in electric vehicle (EV) icon Tesla Inc (NASDAQ: TSLA) has had an astonishing start to 2023, recovering much of its 2022 losses within six weeks.

It tumbled 65% last year as soaring inflation drove interest rates higher and celebrity CEO (read: Technoking) Elon Musk staged a dramatic US$44 billion takeover of Twitter.

Tesla stock last traded at US$207.32.

That’s a far cry from its final close of 2021 – US$352.26 – but a whopping 68% higher than it ended 2022 – US$123.81.

So, what’s been bolstering the tech giant’s share price so far this year? Let’s take a look.

Why has Tesla stock soared into the new year?

The first six weeks of 2023 haven’t been entirely easy for those invested in Tesla stock. Though, it’s ultimately been a fruitful year so far.

The company started the year out on arguably the wrong foot, announcing it had delivered a potentially eye-popping 1.3 million EVs in 2022. But, despite marking a new record, that figure fell short of Musk’s previous pledge to increase deliveries by 50% annually.

Musk also faced a legal challenge in recent weeks, with a group of Tesla shareholders taking the billionaire to court on allegations he misled investors by tweeting that he was taking the company private in 2018. A jury cleared Musk of any wrongdoing, the Guardian reports.

Am considering taking Tesla private at $420. Funding secured.

— Elon Musk (@elonmusk) August 7, 2018

https://platform.twitter.com/widgets.js

But it wasn’t the win that’s seemingly sent Tesla stock rocketing in 2023. It’s leapt nearly 44% since the company dropped its quarterly results on 25 January.

Tesla posted US$1.19 of adjusted earnings per share (EPS) for the three months ended December, beating average analyst expectations of US$1.13, The Motley Fool reports. Meanwhile, its revenue for the quarter leapt 37% year-on-year to US$24.3 billion.

That saw its full-year unaudited adjusted EPS come in at US$4.07 while its revenue soared 51% to around US$81.5 billion. Its profits also nearly doubled to reach US$12.6 billion.

Not to mention, investors are likely looking forward to Tesla’s next earnings release after it announced it’s cutting 20% from the cost of its Model 3 and Model Y in the United States and Europe last month, my Fool colleague Mitch reports.

The post Boom! Why has Tesla stock rocketed 68% so far in 2023? appeared first on The Motley Fool Australia.

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More reading

• ‘Lifetime lows’: Expert reckons these shares are ‘screaming buys’ right now
• If I’d bought $5,000 of Tesla stock 3 years ago, what would my investment be worth now?
• Aussie investors are buying Tesla shares in droves. Should you?
• Should I buy Tesla stock for 2023 or not?

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 positions in and has recommended Tesla. 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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Some ASX shares are about to give investors a much bigger payout in FY23. In this period of economic uncertainty, more dividends could be very welcome.

While other businesses are facing trickier economic conditions, which may mean a lower payment to investors.

However, there are others that could be on course to pay very pleasing cash flow to investors this year.

Let’s have a look at two that could increase their payouts in the coming months.

APA Group (ASX: APA)

APA operates over 15,000km of natural gas pipelines around the country, which connects sources of supply with end markets across Australia. It delivers half of the country’s natural gas usage. The business also owns or has an interest in gas storage facilities, gas-fired power stations and renewable energy generation (wind and solar farms).

The business has been growing its distribution each year for over a decade and a half. It funds its distribution from the growing cash flow of its portfolio of assets.

It’s currently investing in more pipelines which can unlock further cash flow. The ASX share is also investing in electrification assets, such as the cable that connects Tasmania and the mainland called Basslink.

APA has provided guidance that it’s going to grow its FY23 distribution per security by 3.8% to 55 cents. That works out to be a distribution yield of 5.1%.

Westpac Banking Corp (ASX: WBC)

Westpac is one of the biggest ASX bank shares and it’s benefiting from the rising interest rates. The bank is passing on interest rate rises to borrowers but not so quick to savers (or at all, in February).

This has the effect of boosting the net interest margin (NIM) of the bank. Higher lending profits are expected to mean stronger overall profits.

Indeed, Morgans suggests that Westpac offers the greatest return on equity (ROE) improvement potential. The major ASX bank share is working on reducing its costs, which could also be a boost for earnings.

According to Commsec, Westpac could grow its annual dividend per share by 10% to $1.38. That suggests the bank could pay a grossed-up dividend yield of 8.25% in the current financial year.

Dividend growth is also forecast for FY24 and FY25. By the 2025 financial year, it could pay a grossed-up dividend yield of 9.1%.

The post 2 ASX shares with a dividend boost coming appeared first on The Motley Fool Australia.

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More reading

• ASX 200 investors: A big bank stock that pays 5% dividend income
• Expect big yields from these ASX 200 dividend shares in 2023: analysts
• NAB shares: A top tip for passive income?
• How I’d invest $300 a month in ASX shares to target an extra income of $20,000 per year
• Should I buy Westpac shares for the big dividend?

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 Apa Group. The Motley Fool Australia has recommended Westpac Banking. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The REA Group Limited (ASX: REA) share price is on course to end the week in the red.

In morning trade, the property listings company’s shares are down 3% to $120.52.

This follows the release of the realestate.com.au operator’s half year results this morning.

REA share price falls on half year results

• Revenue up 5% to $617 million
• EBITDA down 2% to $359 million
• Net profit after tax down 9% to $205 million
• Interim dividend flat at 75 cents per share

What happened during the half?

For the six months ended 31 December, REA reported a 5% increase in revenue to $617 million. This was driven by 3% growth in Australia, with yield growth across advertising products more than offsetting the challenging market environment. The company’s India business also supported its top line growth, delivering a 48% increase in revenue year over year.

However, with the company’s core operating costs increasing 7%, REA reported a 2% reduction in EBITDA to $359 million. The increased costs reflect higher employee costs from wage inflation and continued investment to deliver strategic initiatives, and increased marketing and travel costs.

And although its net profit fell 9% to $205 million, that didn’t stop the REA board from maintaining its interim dividend at 75 cents per share.

How does this compare to expectations?

According to a note out of Goldman Sachs, its analysts were expecting REA to report a 3% decline in revenue to $606 million and a 6% decline in net profit to $208 million.

So, with REA reporting revenue of $617 million and net profit after tax of $205 million, it has beaten on the top line but missed on the bottom line.

The latter may explain the weakness in the REA share price today.

Management commentary

REA’s CEO, Owen Wilson, appeared pleased with the company’s performance given the tough operating conditions. He commented:

The Australian property market was heavily impacted during the first half by unprecedented consecutive interest rate hikes. While underlying demand remained healthy, uncertainty around future interest rate movements caused some sellers to pause and buyers to re-calibrate as borrowing capacities fell.

Despite these conditions, REA continued to deliver revenue and yield growth during the half. This performance underscores the strength of our products and audience, with customers increasingly relying on our premium products to maximise the impact of their campaigns.

Mr Wilson also revealed that its flagship site, realestate.com.au, maintained its leadership position during the half. He adds:

In a challenging market, the value of realestate.com.au’s unparalleled audience, engaging consumer experiences, and rich data-driven insights becomes increasingly important. We are the number one property portal in each of our markets and remain keenly focussed on building the engagement and loyalty of consumers throughout their property journey.

The release reveals that 12.1 million people visited each month on average, or 55% of Australia’s adult population. Furthermore, its average monthly visits of 117.6 million is 3.3 times more than its nearest competitor.

Outlook

REA has warned that rapid successive interest rate increases and softening consumer sentiment have significantly impacted property prices and volumes in the Australian residential property market.

This saw January national residential new listings falling 9% year over year.

And while REA expects its Australian operating costs to decline in the second half, it has warned that its target of positive operating jaws may not be achieved. Group operating costs are expected to increase in the high-single digits.

Mr Wilson concludes:

REA is focussed on delivering value to our customers at every point in the property cycle. We are continuing our investment in innovation and the growth of our product portfolio. “The uncertainty caused by rising interest rates is likely to continue in the coming months but we do expect that when interest rates stabilise we will see increased activity in the property market. The Australian economy is strong, unemployment is low and immigration is increasing. Each of these underpin our property market.

The post REA share price tumbles on half year earnings miss appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• Brokers say these quality ASX 200 blue chip shares are buys
• Need passive income? Turn $5,000 into $800 every month
• The Nasdaq just had its best January in over 20 years. Are ASX tech shares back?
• ‘Incredible value’: 3 ASX 200 shares expert would buy now for long-term 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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended REA Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) share Wesfarmers Ltd (ASX: WES) is a top-quality business in my opinion, which is why I’m watching it closely.

There are few businesses on the ASX that are as old as Wesfarmers. It has a number of businesses within its portfolio, including Bunnings, Kmart, Priceline, Officeworks, Target, Catch, a chemicals, energy and fertiliser division (WesCEF) and industrial businesses.

There are a number of reasons why I think Wesfarmers is one of the best ASX 200 shares around, and why I’d like to talk about it.

At the current Wesfarmers share price, these are some of the reasons why I like it so much.

Diversification

Wesfarmers is known for having a number of retail businesses such as Bunnings, Kmart and Catch.

But, I like that the business has been working on diversifying itself.

It wasn’t too long ago that Wesfarmers acquired Australian Pharmaceutical Industries (API), the owner of Priceline and a couple of other businesses. I think that healthcare could provide defensive earnings for Wesfarmers, enabling it to hold up well.

Wesfarmers has also been seeing a strong performance in its WesCEF business. In FY22, WesCEF generated earnings before tax (EBT) of $540 million (up 40.6%), which was more than $418 million from Kmart Group and more than $181 million from Officeworks.

I like that the ASX 200 share is looking to diversify its portfolio further, such as the lithium projection at Mt Holland which is progressing.

Quality earnings

I think that Wesfarmers shares have high-quality earnings.

Bunnings is the leader in the hardware sector. Kmart is a leading major retailer. Officeworks seems to be the category leader for office products. And so on.

Being the biggest in a sector gives the scale advantages of buying power and other profit margin benefits. This enables Wesfarmers to sell products either at a cheaper price than competitors or sell at the same price and earn more profit.

The biggest contributor to Wesfarmers’ profit is usually Bunnings. Not only does it make the most profit, but it’s very effective at making the profit. For example, in FY22 Bunnings generated $2.2 billion of EBT. Its return on capital was 77.2%, which was enormous. It was even higher in FY21 at 82.4%.

Wesfarmers makes very good returns on the money that it has allocated to its businesses. If the ASX 200 share keeps re-investing then I think it gives it a very good chance of producing good profit growth.

Expected resilient performance

One of the main reasons why I think the Wesfarmers share price is looking more attractive is because it has dropped 25% since its peak in August 2021.

But, I don’t think its profit is going to drop by 25%.

Wesfarmers points out that names like Kmart and Bunnings are seen as leaders in low-cost retail. They could perform well relative to competitors during 2023 and beyond.

I think it’s possible that WesCEF could produce another good result in FY23.

At the moment, the forecast on Commsec suggests that Wesfarmers’ earnings per share (EPS) could rise from $2.08 to $2.22 in FY23 and then $2.27 in FY24. In other words, it’s expected not to even see a decline in profit.

Strong dividend

Whatever happens over the next year or two, the ASX 200 share could keep growing its dividend.

Commsec numbers suggest that Wesfarmers could pay an annual dividend per share of $1.83 in FY23 and $1.93 in FY24. The cash returns could be solid, even if the share price moves up and down.

In FY23, the grossed-up dividend yield could be 5.3%.

I think that the combination of potential long-term profit growth and dividends could mean Wesfarmers is a solid long-term contender.

The post The top ASX 200 share on my watch list right now appeared first on The Motley Fool Australia.

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More reading

• Analysts say these growing ASX 200 dividend shares are top buys for income investors
• 2 ASX stocks I’ll be buying hand over fist in 2023
• Why right now is a once-in-a-decade opportunity to make passive income from ASX shares
• Wesfarmers share price drops on Catch news
• Which ASX 200 shares are rebounding fastest in 2023?

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 Wesfarmers. 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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S&P/ASX 200 Index (ASX: XJO) dividend stocks can be a great way to earn passive income.

But not every blue-chip, dividend-paying company is created equal.

If I was 35 with little to no savings, I’d be sure to run my slide rule across the range of ASX 200 dividend stocks to avoid any potential dividend traps.

That’s because the yields you see commonly quoted are trailing yields. Meaning they’re derived from the past 12 months of dividend payouts and calculated at the current share price.

One way you can stumble into a dividend trap is if the share price has taken a big fall in recent months. That will make the yield from the past year’s payouts look more impressive than it may be.

Dividend traps often arise when a company’s earnings and profits come under pressure. In that case, it may well slash its dividend payouts in the year ahead, atop seeing its share price retrace.

Which, of course, we want to avoid.

With that said…

I’d buy this ASX 200 dividend stock to start earning monthly passive income

Commonwealth Bank of Australia (ASX: CBA) has long been high on the list of investors seeking passive income from their ASX 200 dividend stocks.

And for good reasons.

CommBank is the biggest bank stock, with a lengthy track record of share price gains and twice-yearly, fully franked dividend payouts. Even during the pandemic addled year of 2020.

On the share price front, as you can see in the graph below, CBA has managed to deliver a healthy 11% gain over the past full year. Longer term, shares in the big four bank are up 49% over five years.

The share price outlook is important because I’d want to avoid investing in an ASX 200 dividend stock that’s losing value over time.

As for the income stream, CBA shares currently pay a trailing dividend yield of 3.6%, fully franked.

And that yield could well increase in the year ahead.

According to analysts at Morgan Stanley, CBA looks set to increase its dividend payouts in the year ahead to $4.50 per share.

That’s up 17% from the $3.85 per share paid out in the year gone by. It’s also the biggest boost in dividend payouts the analysts foresee from any of the big four banks.

If I were to invest at yesterday’s closing price, that works out to a forecast, fully franked yield of 4.1%.

Which is why this is the ASX 200 dividend stock I’d be buying at 35 to start earning monthly passive income and build up some savings.

The post With no savings at 35, I’d buy this ASX 200 dividend stock to start earning monthly passive income appeared first on The Motley Fool Australia.

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More reading

• I’m listening to Warren Buffett and buying ASX shares at deep discounts
• With interest rates heading higher again, the risk is to the downside for these popular blue chip ASX shares
• Should I buy CBA shares for 2023 dividend potential?
• ASX 200: Buy high and sell higher
• Own CBA shares? Here’s the bank’s half-year results preview

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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On Thursday, ANZ Group Holdings Ltd (ASX: ANZ) shares had a relatively flat session after the release of the bank’s first quarter update.

And while the big four bank had a solid quarter, it appears that broad market weakness overshadowed this.

What did brokers say about the update?

Goldman Sachs has been running the rule over the ANZ update and was pleased with what it saw. It notes that the update implies that the banking giant is performing ahead of expectations in FY 2023. It commented:

ANZ released its Pillar 3 disclosure for the quarter ended 31-Dec-22. Overall the update was slightly stronger that what was implied by prior 1H23 forecasts, driven by better volumes and asset quality remaining strong. 1Q23 CET1 ratio of 12.2% was 12 bp ahead of what was implied by our prior our forecasts.

This has led to Goldman bumping its earnings forecasts higher for the coming years. It explained:

We move our FY23E/FY24E/FY25E EPS by +4.5%/+2.5%/+2.4%, driven by i) stronger balance sheet momentum particularly in Australian housing and offshore institutional, ii) improved other operating income, and ii) and lower BDDs, partially offset by iv) higher expenses.

Should you buy ANZ shares?

While Goldman sees value in ANZ shares at the current level, it isn’t enough for a buy rating. Its analysts have responded to the update by retaining their neutral rating with an improved price target of $27.23.

Based on the latest ANZ share price, this implies potential upside of 5% for investors over the next 12 months.

Though, let’s not forget that ANZ is a big dividend payer. As a result, the total potential return increases by 6.3% to 11.3% if you include the $1.62 per share fully franked dividend the broker is now forecasting in FY 2023.

Not bad for a neutral rating!

The post Are ANZ shares a buy after the bank’s Q1 update? appeared first on The Motley Fool Australia.

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More reading

• Expect 6%+ dividend yields from these ASX 200 shares: analysts
• ANZ share price falls on Q1 update
• Invest $20,000 in ASX 200 shares and get $1,500 each year without lifting a finger
• NAB shares: A top tip for passive income?
• ANZ share price slips amid $50m acquisition

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 IGO Ltd (ASX: IGO) share price has had a ripper decade, surging 208% since February 2013. But how much has the mining giant returned if we also factor in its dividends?

If one were to have bought $1,000 of IGO shares 10 years ago, they probably would have ended up with 210 shares, paying $4.75 apiece.

The value of that parcel has exploded over the years. The IGO share price currently trades at $14.64, leaving a 210-strong-parcel with a value of $3,074.40.

For comparison, the S&P/ASX 200 Index (ASX: XJO) has risen around 51% in that time.

But how much have those invested in the ASX 200 mining share received in dividends? Let’s take a look.

All the dividends offered by IGO shares since 2013

Here are all the dividends offered by IGO since early 2013:

IGO dividends’ pay date	Type	Dividend amount
September 2022	Final	5 cents
March 2022	Interim	5 cents
September 2021	Final	10 cents
September 2020	Final	5 cents
February 2020	Interim	6 cents
September 2019	Final	8 cents
March 2019	Interim	2 cents
September 2018	Final	2 cents
March 2018	Interim	1 cent
September 2017	Final	1 cent
March 2017	Interim	1 cent
September 2016	Final	2 cents
October 2015	Final	2.5 cents
March 2015	Interim	6 cents
September 2014	Final	5 cents
March 2014	Interim	3 cents
September 2013	Final	1 cent
March 2013	Interim	1 cent
Total:		66.5 cents

As the chart above shows, those invested in IGO stock have likely received 66.5 cents of passive income per share they’ve held over the decade just been.

That means our figurative $1,000 investment has probably yielded $129.15 of dividend income – a minuscule amount compared to the capital gains on the table in that time.

Though, it is enough to boost our imaginary investor’s total return on investment (ROI) to around 221%, before considering any tax benefits potentially brought about by franking credits.

Still, it’s likely little surprise that IGO shares aren’t typically heralded for their dividends. The stock currently offers a mere 0.68% dividend yield.

The post Did you buy $1,000 of IGO shares 10 years ago? If so, here’s how much dividend income you’ve earned 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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With the travel market rebounding strongly from the pandemic, many investors may be keen to add some travel and tourism exposure their portfolio.

If that’s something that you want to do, then it could be worth looking at the ASX 200 travel shares that Morgans believes are the best ones to buy right now. Here’s what it is saying:

Corporate Travel Management Ltd (ASX: CTD)

The first ASX 200 travel share to consider is this corporate travel booker.

Morgans has named it has a key pick in the travel sector and believes it is well-placed for growth in a post-pandemic world. Particularly given recent acquisitions and structural cost savings.

The broker also sees plenty of value in the Corporate Travel Management share price with its add rating and $25.65 price target. The broker explained:

Taking a longer term view, CTD remains as a key pick for the travel sector. We see substantial upside in its share price as the company recovers from the COVID affected travel downturn. In fact, CTD should be a materially larger business post COVID given it has made two highly accretive acquisitions during the downturn. The company has also won a lot of new business, implemented structural cost out opportunities and continued to develop its market leading technology offering which means that it will require less staff in the future. CTD is well managed and has a strong balance sheet (no debt).

Qantas Airways Limited (ASX: QAN)

Another ASX 200 travel share that could be in the buy zone is Qantas. In fact, the broker has named it as its top pick in the sector with an add rating and $8.50 price target.

Morgans believes Qantas is well-placed in the current environment and sees a lot of value in its shares at the current level. It commented:

QAN is now our preferred pick out of our travel stocks under coverage given it has the most near-term earnings momentum. Looking across travel companies globally, airlines are now in the sweet spot given demand is massively exceeding supply. QAN is trading at a material discount compared to pre-COVID multiples, despite having structurally higher earnings, a much stronger balance sheet, a better domestic market position, a higher returning International business and more diversification (stronger Loyalty/Freight earnings).

The post These are the best ASX 200 travel shares to buy right now: broker appeared first on The Motley Fool Australia.

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More reading

• 4 top ASX 200 shares to pounce on for reporting season: Wilsons
• Why Morgans just added these ASX 200 shares to its best ideas list
• What’s going on with the Qantas share price today?
• Why experts say these ASX 200 blue chip shares are buys
• 10 ASX stocks to buy before they report this earnings season: Goldman

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 Corporate Travel Management. 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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