Tag: Motley Fool

The Dicker Data Ltd (ASX: DDR) share price is having a difficult time on Thursday.

At one stage today, the wholesale computer hardware and software distributor’s shares dropped 8% to a multi-year low of $8.55.

This means Dicker Data shares have now lost 40% of their value over the last 12 months, as you can see on the chart below.

Why is the Dicker Data share price under pressure?

Investors have been selling down the Dicker Data share price this week after the company’s unaudited full year results disappointed the market.

For the 12 months ended 31 December, Dicker Data reported a 25% increase in revenue to $3.1 billion but a small decline in net profit after tax to $73.4 million.

In response to the result, Goldman Sachs commented:

DDR’s FY22 trading update was a relatively small miss to consensus (-3% on NPAT), which we previously flagged as a risk. […] however in our view the more pertinent issue is the risk of persistent cost headwinds heading into FY23.

The broker also spoke cautiously about Dicker Data’s outlook due to a number of potential headwinds impacting demand. It said:

In our view demand headwinds may be the next risk for DDR based on (1) pull-forward of PC demand through COVID; (2) commentary from PC OEMs including Microsoft, HP and Dell suggesting a challenging FY23 demand backdrop; and (3) potential slowdown in consumer electronics spending as the impact of higher interest rates is felt in the economy.

Is this a buying opportunity?

The good news is that Goldman Sachs appears to believe that all this and more is now factored into the Dicker Data share price.

And while it has held firm with its neutral rating, its revised price target of $11.35 implies material upside potential for its shares of almost 33%.

Furthermore, it isn’t the only broker that sees plenty of value in its shares. Morgan Stanley has retained its overweight rating with a $13.00 price target this morning. This represents over 50% upside over the next 12 months from current levels.

The post Dicker Data share price tumbles to multi-year low. Is it too cheap to miss? appeared first on The Motley Fool Australia.

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More reading

• Why AGL, Dicker Data, Megaport, and Suncorp shares are dropping
• ASX 300 tech stock Dicker Data dives 10% on full-year results
• Why Amcor, Dicker Data, Elders, and Healius shares are dropping today
• Brokers name 3 ASX shares to buy 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 positions in and has recommended Dicker Data. The Motley Fool Australia has positions in and has recommended Dicker Data. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://www.fool.com.au/2023/02/09/dicker-data-share-price-tumbles-to-multi-year-low-is-it-too-cheap-to-miss/

As mentioned here earlier, Morgans removed BHP Group Ltd (ASX: BHP) shares from its best ideas list this month. This is the first time it hasn’t been on the list in three years.

Morgans’ best ideas are those that it thinks offer the highest risk-adjusted returns over a 12-month timeframe. They are supported by a higher-than-average level of confidence and are the broker’s most preferred sector exposures.

Replacing the miner was mining and mining services company Mineral Resources Ltd (ASX: MIN).

But that wasn’t the only change. Listed below are the ASX 200 shares that joined the list in February.

CSL Limited (ASX: CSL)

Morgans sees this ASX 200 share as a key pick for a portfolio. It added the biotherapeutics giant to its best ideas list with an add rating and $312.20 price target. The broker commented:

A key portfolio holding and key sector pick, we believe CSL is poised to break-out this year, a COVID exit trade, offering double-digit recovery in earnings growth as plasma collections increase, new products get approved and influenza vaccine uptake increases around ongoing concerns about respiratory viruses, with shares offering good value trading around its long term forward multiple of 31.5x.

Megaport Ltd (ASX: MP1)

This network as a service provider’s shares were added to list with an add rating and $8.25 price target. The broker explained:

MP1 is the world leader in Network as a Services (NaaS). They have first mover advantage, scale and technical expertise which means they are well placed to grow rapidly and maintain a healthy competitive advantage.

Mineral Resources

As mentioned above, Mineral Resources was added to list in the place of BHP this month. Morgans has an add rating and $99.40 price target on the ASX 200 miner’s shares. It commented:

We see MIN’s lithium / iron ore market exposures as an ideal combination to benefit from the China re-opening increase in demand during 1H’CY23. We also see MIN as well placed to grow into its valuation, even if we see unexpected metal price volatility, given the magnitude of organic growth in the pipeline.

Qantas Airways Limited (ASX: QAN)

A final ASX 200 share that has been added to the list is airline operator Qantas. The broker has an add rating and $8.50 price target on the flying kangaroo’s shares. It said:

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.

The post Why Morgans just added these ASX 200 shares to its best ideas list appeared first on The Motley Fool Australia.

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More reading

• Why AGL, Dicker Data, Megaport, and Suncorp shares are dropping
• ASX 200 tech stock Megaport leaps on open then plunges on half-year results
• What’s going on with the Qantas share price today?
• These ASX 200 shares are top picks in Macquarie’s growth portfolio
• Can the BHP share price keep rising or has it peaked?

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

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The All Ordinaries Index (ASX: XAO) is in the red today, down 0.6% in afternoon trade.

But these two ASX lithium shares are marching higher after reporting promising exploration and production news.

Here’s what the lithium stocks announced.

Major new lithium target

The Zenith Minerals Ltd (ASX: ZNC) share price is up 2.2% at the time of writing after the ASX lithium share reported on “a major” new lithium geochemical target at its Split Rocks Lithium Project, located in Western Australia.

Split Rocks is being explored as part of the Zenith’s JV with EV Metals Group.

Zenith said its auger soil geochemical sampling had outlined a lithium target (Cielo) that’s nine kilometres long and two kilometres wide. The miner reported a peak auger soil value of 117 parts per million (ppm) of lithium.

The target, which has not been drill tested before, is located in proximity to several proven significant lithium deposits, including the Mt Holland Lithium Deposit.

Commenting on the progress helping boost the ASX lithium share today, executive chair David Ledger said:

We are delighted to announce a major new lithium target at Split Rocks which has come about through 12 months of hard work from our soil geochemical teams. I look forward to providing further updates on this exciting new drill target – Cielo – and the additional new lithium anomalies generated in 2022.

Which brings us to…

ASX lithium share gains on high-grade spodumene production

The Critical Resources Ltd (ASX: CRR) share price is up 3.6% at the time of writing, having posted gains of more than 10% in early morning trading.

Investor interest in the ASX lithium share was spurred by the company’s announcement that its Mavis Lake Lithium project, located in Ontario, Canada, has produced high-grade, low-impurity, coarse spodumene concentrate (Li2O).

Using Heavy Liquid and Magnetic Separation processes, the concentrate results delivered results up to 6.42% Li2O.

The company noted that impurity levels were “extremely low” at 0.37% Fe2O3.

Commenting on those results, Critical Resources managing director Alex Cheeseman said:

Metallurgical test work is a key step in advancing Mavis Lake along the development pathway. The results show that the high-grade mineralisation at Mavis Lake, readily converts to high-grade, low impurity concentrate.

Concentrate with this type of specification, commands a premium in the market. This has been achieved through a very simple flowsheet that has the potential to enhance project development and delivery opportunities by being low impact, low risk and low cost.

Both ASX lithium shares will update the market regarding any further progress.

The post 2 ASX lithium shares marching higher on promising news appeared first on The Motley Fool Australia.

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More reading

• Which agricultural share is leading the ASX 200 today?
• 2 ASX 200 REITs on the rise following earnings updates
• Macquarie has these ASX 200 dividend shares in its income portfolio
• 2 ASX stocks I’ll be buying hand over fist in 2023
• Guess which ASX biotech stock is rocketing 28% on ‘extremely encouraging’ Alzheimer’s data

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 Elders Ltd (ASX: ELD) share price is among the top performers of the S&P/ASX 200 Index (ASX: XJO) at the time of writing.

The Elders share price is currently up 1.81% to $8.99 in late afternoon trading.

Earlier today, it reached an intraday high of $9.21, up 4.3%.

Hang on, didn’t Elders stock crash yesterday?

Yes, it did. The ASX 200 agricultural share fell 7.4%, and the dramatic dip even prompted an ASX query.

Elders responded quickly, saying it didn’t know why its share price had dropped so far, nor why its trading volume had spiked.

The company didn’t release any price-sensitive news to the ASX yesterday.

However, Elders did note in its response to the ASX that it had held two institutional investor briefings on Tuesday.

While no price-sensitive information was discussed at the briefings, a bunch of sector-wide issues were covered, the company said.

This included current livestock prices declining but remaining well above historical averages.

They also discussed unseasonably wet conditions being likely to impact competitors, softer real estate sales activity, and a strong outlook for winter cropping due to good soil moisture and water availability.

Elders said these factors “suggest that ELD’s second half performance will be stronger than first
half performance in FY23″.

So, the cause of the drop in the Elders share price to a two-year low of $8.69 remains a mystery.

What’s got the Elders share price rising today?

Well, there’s probably some buying the dip action afoot, for starters.

In addition, Elders released an investor presentation to the ASX today.

This presentation was delivered to investors at an event hosted by top broker Goldman Sachs today.

Goldman is bullish on Elders and currently has a buy rating on the ASX 200 agricultural share. It also expects the Elders share price to more than double to $18.40 over the next 12 months.

The presentation includes a chart documenting how Elders has continued to grow its underlying earnings before interest and taxes (EBIT) despite major natural disasters and world events.

For example, during the COVID pandemic period, which includes the Russian invasion of Ukraine and rising inflation and interest rates, Elders has grown its EBIT from $74 million in FY19 to $121 million in FY20 (Black Summer fires), $167 million in FY21 (NSW and Queensland floods), and $232 million in FY22 (more floods in NSW and Queensland, and 45% of Queensland in drought).

Such information is useful and likely comforting to investors in ASX 200 agricultural shares. One of the key risks of investing in ag shares is the unpredictable nature of the weather and its impact on crops.

The post Which agricultural share is leading the ASX 200 today? appeared first on The Motley Fool Australia.

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More reading

• Why De Grey, Elders, Maas, and Nuix shares are charging higher today
• Bargain alert? 3 high-quality ASX shares that just hit 52-week lows
• Why Amcor, Dicker Data, Elders, and Healius shares are dropping today
• Earn passive income with these ASX 200 dividend shares – experts
• Here are some top ASX dividend share ideas according to experts

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has recommended Elders. 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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Earlier today, I looked at the top ASX 200 growth shares that Macquarie Group Ltd (ASX: MQG) has in its growth portfolio. You can read about those shares here.

The investment bank also has an income version that it notes represents a starting point to form a portfolio with income characteristics.

It also highlights that this portfolio is created with a focus on a higher degree of earnings certainty, backed by strong cash flows, and highly tax effective dividend income.

Among its top ASX 200 dividend share picks right now are the shares listed below:

Telstra Group Ltd (ASX: TLS)

This telco giant takes the top spot in Macquarie’s income portfolio with a weighting of 8.8%. It currently has an outperform rating and $4.50 price target on Telstra’s shares. The broker is also forecasting a fully franked 17 cents per share dividend in FY 2023. Based on the current Telstra share price of $4.11, this represents a 4.1% dividend yield.

National Australia Bank Ltd (ASX: NAB)

The next biggest holding in the portfolio with a weighting of 8.4% is this ASX 200 banking share. However, it is worth noting that on this occasion, the broker only has a neutral rating and $31.00 price target on its shares. Nevertheless, with Macquarie forecasting a $1.61 per share fully franked dividend in FY 2023, which yields 5%, its analysts appear to believe NAB still deserves a spot in the portfolio.

Suncorp Group Ltd (ASX: SUN)

Another top holding in its income portfolio is Suncorp with a 7.1% weighting. Macquarie has an outperform rating and $16.30 price target on the banking and insurance giant’s shares. As for dividends, it is forecasting an 81 cents per share fully franked dividend in FY 2023. This represents a 6.35% dividend yield based on the current Suncorp share price of $12.75.

The post Macquarie has these ASX 200 dividend shares in its income portfolio appeared first on The Motley Fool Australia.

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More reading

• Why AGL, Dicker Data, Megaport, and Suncorp shares are dropping
• These ASX 200 shares are top picks in Macquarie’s growth portfolio
• 5 things to watch on the ASX 200 on Thursday
• Yields of up to 8%! Should I buy these ASX 200 dividend stocks in February?
• Here are the top 10 ASX 200 shares 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 positions in and has recommended Macquarie Group and Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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We’re only one and a bit months into 2023, but I can already tell you how I’m going to be investing this year. I’ll be doing the same thing I did in 2021 and 2020 – buying as many ASX stocks as I can, hand over fist.

Since ASX shares tend to go up over time, I usually try to live by the philosophy that the best time to invest was yesterday. Sure, the markets have periods of irrational exuberance, and times where investors can’t wait to get out fast enough. But although these events tend to get the most headlines, they are rare events.

So I tend to just invest any cash that I have into the markets sooner rather than later. That way, the stress of trying to ‘time the markets’ is taken out of the equation. Now, let’s now talk about two ASX stocks that I plan to keep buying in 2023.

2 ASX stocks I want to buy more of in 2023

Wesfarmers Ltd (ASX: WES)

Wesfarmers isn’t a hugely well-known company in Australia (outside the investing world, anyway). But the myriad of companies and brands that Wesfarmers owns certainly are. There’s the company’s crown jewel, Bunnings, of course.

However, Wesfarmers also owns a rather staggering number of other companies too. The most well-known are the likes of Kmart, OfficeWorks, and Target. But Wesfarmers also owns businesses ranging from mines, gas, and lithium to clothing, e-commerce, and pharmacies.

This company has a long and proud record of delivering strong capital growth and solid dividends to its investors. With Wesfarmers shares still down around 25% from their 2021 all-time highs, this is an ASX stock that I’ll be hoping to top up on this year.

Vanguard MSCI Australian Small Companies Index ETF (ASX: VSO)

This exchange-traded fund (ETF) from provider Vanguard is another ASX investment I’d like to have more of by the end of 2023. This ETF is an index fund. But it doesn’t mirror the popular S&P/ASX 200 Index (ASX: XJO). Instead, it holds a basket of shares sourced from the bottom end of the market.

So instead of the big ASX bank shares and BHP Group Ltd (ASX: BHP), the largest shares in this ETF are the likes of Carsales.com Ltd (ASX: CAR), OZ Minerals Ltd (ASX: OZL), and Cleanaway Waste Management Ltd (ASX: CWY). I like this ETF for the diversified exposure to the ASX it gives.

The Vanguard Small Companies ETF has returned an average of 8.15% per annum over the past five years (as of 31 January). It also currently has a trailing dividend distribution yield of 5.59%:

The post 2 ASX stocks I’ll be buying hand over fist in 2023 appeared first on The Motley Fool Australia.

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More reading

• 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?
• Buying ASX shares as a beginner? Here are 3 things I wish I’d known
• Here’s how I’d start building a second income this February, for $30 a week

Motley Fool contributor Sebastian Bowen has positions in Wesfarmers and Vanguard MSCI Australian Small Companies Index ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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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ASX biotech stock Argenica Therapeutics Ltd (ASX: AGN) is off to the races today.

Shares in the biotechnology company closed yesterday trading at 41 cents and are currently swapping hands for 52 cents apiece, up 28.4%.

Here’s what’s piquing ASX investor interest today.

What did the ASX biotech stock report?

Argenica Therapeutics shares are rocketing after the ASX biotech stock reported promising results with its lead neuroprotective peptide candidate, ARG-007, in an in vitro preclinical study.

According to the company’s release, the preclinical results indicated ARG-007 “significantly inhibits the aggregation of human recombinant Amyloid-Beta (Abeta) in a cell-free Abeta aggregation assay model”.

That could prove to be great news for patients suffering from Alzheimer’s Disease, which accounts for 60% to 70% of all cases of dementia. Abeta aggregation is believed to be one of the main causes of Alzheimer’s, with the Abeta accumulation in senile plaques causing memory loss and confusion.

Argenica reported that Abeta aggregation was reduced by more than 50% compared to vehicle controls 16 hours following a 25 µM dose of ARG-007.

Commenting on the results sending the ASX biotech stock soaring today, Argenica managing director Liz Dallimore said:

This is extremely encouraging data showing a potential new indication for ARG-007. It is well recognised that Abeta aggregation in the brain plays a key role in initiating Alzheimer’s Disease, and therefore a safe therapeutic drug that can reduce Abeta aggregation is a huge opportunity.

We look forward to continuing to progress this exciting opportunity into further animal studies.

Argenica noted that the global Alzheimer’s Disease therapeutics market size was valued at some US$4 billion in 2021. That’s expected to increase at a compound annual growth rate (CAGR) of 16.2% from 2022 to 2030.

Argenica Therapeutics share price snapshot

Today’s big leap has put the Argenica Therapeutics share price back in the green for 2023, up 16%. As you can see in the chart below, the ASX biotech stock remains down 28% over the past 12 months.

The post Guess which ASX biotech stock is rocketing 28% on ‘extremely encouraging’ Alzheimer’s data appeared first on The Motley Fool Australia.

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More reading

• Why AGL, Dicker Data, Megaport, and Suncorp shares are dropping
• ASX 200 investors: A big bank stock that pays 5% dividend income
• Why De Grey, Elders, Maas, and Nuix shares are charging higher today
• 2 ASX All Ords shares smashing new 52-week highs on Thursday
• The AGL dividend has just been slashed. Here’s what you need to know

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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) has followed Wall Street’s lead and dropped into the red. At the time of writing, the benchmark index is down 0.4% to 7,498.1 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

AGL Energy Limited (ASX: AGL)

The AGL share price is down 11% to $7.04. This follows the release of a disappointing half year result this morning. For the six months ended 31 December, AGL reported underlying net profit after tax of $87 million, which is a 55% decline on the prior corresponding period. This led to AGL slashing its dividend by half to 8 cents per share.

Dicker Data Ltd (ASX: DDR)

The Dicker Data share price is down a further 6.5% to $8.70. Investors have been selling the shares of this wholesale computer hardware and software distributor since the release of its unaudited full year results yesterday. Dicker Data reported a 25% increase in revenue to $3.1 billion but a small decline in net profit after tax to $73.4 million.

Megaport Ltd (ASX: MP1)

The Megaport share price is down 6% to $5.83. This has been driven by the release of the network as a service provider’s half year results. Megaport reported a loss of $9.2 million and a reduction in its cash balance from $56.9 million to $39.2 million.

Suncorp Group Ltd (ASX: SUN)

The Suncorp share price is down 2.5% to $12.74. That’s despite a large number of brokers responding positively to the banking and insurance giant’s half year results from yesterday. For example, Morgans has retained its add rating and lifted its price target to $14.44, whereas Macquarie reaffirmed its outperform rating and increased its price target to $16.40.

The post Why AGL, Dicker Data, Megaport, and Suncorp shares are dropping appeared first on The Motley Fool Australia.

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More reading

• The AGL dividend has just been slashed. Here’s what you need to know
• ASX 200 tech stock Megaport leaps on open then plunges on half-year results
• AGL share price sinks following 55% profit dive
• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX 200 shares 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 Dicker Data and Megaport. The Motley Fool Australia has positions in and has recommended Dicker Data. The Motley Fool Australia has recommended Megaport. 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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This year might be an interesting ride for those invested in S&P/ASX 200 Index (ASX: XJO) stocks. The market could face plenty of volatility, with recessions tipped to occur in major global economies and the Reserve Bank of Australia (RBA) continuing its battle against inflation.

Fortunately, blue chip shares – like big four bank Westpac Banking Corp (ASX: WBC) – could offer some reprieve from the chaos. Not to mention, the ASX 200 staple is also a dividend powerhouse.  

Are Westpac shares a winning dividend income buy?

The Westpac share price has been on a roll lately, gaining 5% so far this year and 7% over the last 12 months to trade at $23.91 today. Meanwhile, both its earnings and dividends have remained strong.

The bank posted a near-$5.7 billion profit for financial year 2022 – a 4% year-on-year improvement.

That led it to declare a fully franked 64 cent per share final dividend – marking a 6% jump on that of the prior financial year.

That brought its full-year offerings up to $1.25 per share – leaving it with a 5.2% dividend yield at the time of writing.

At such a level, a $5,000 investment in the ASX 200 big bank stock would pay out $261 of passive income annually.

The only ASX 200 big bank to best that yield is ANZ Group Holdings Ltd (ASX: ANZ). It currently offers a 5.6% dividend yield.

And Westpac’s offerings are on track to grow, according to experts.

ASX 200 big four bank tipped to grow dividends in FY23

Both Goldman Sachs and Morgans believe Westpac shares are a buying opportunity amid plenty of hope for the bank’s dividends.

The former tips the stock as the best ASX 200 big four bank to buy. It also expects it to pay out $1.484 in dividends this fiscal year.

Factoring in Goldman Sachs’ target price of $27.68, Westpac could soon trade with a 5.36% dividend yield.

The latter broker, meanwhile, is less bullish on the Westpac share price but more hopeful of the bank’s dividends.

It tipped the ASX 200 bank to pay $1.53 per share in dividends this financial year, while its share price has been slapped with a $25.80 price target.

If both of Morgans’ forecasts come to fruition, Westpac shares could offer a whopping 5.9% dividend yield. That’s what I’d call an opportunity!

The post ASX 200 investors: A big bank stock that pays 5% dividend income appeared first on The Motley Fool Australia.

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• 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?
• Buy Westpac and this ASX 200 income share: experts

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 Goldman Sachs 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 AGL Energy Ltd (ASX: AGL) dividend that management just declared is likely to leave investors feeling underwhelmed.

The S&P/ASX 200 Index (ASX: XJO) energy provider reported its half-year results for the six months ending 31 December this morning (1H FY23).

With the company struggling with plant closures amid what CEO Damien Nicks called “challenging energy market conditions”, AGL saw its underlying net profit after tax (NPAT) fall 55% from the prior corresponding half year (1H FY22) to $87 million.

And that big drop in profits was reflected by a much lower AGL dividend payout.

What’s happening with the AGL dividend?

The AGL board declared an interim unfranked dividend of 8 cents per share.

That’s half the 16 cents per share dividend the company paid out in 1H FY22. And, if you’re keeping track, it’s 74% less than the 31 cents per share interim dividend paid in 1H FY21.

Management said the interim dividend is consistent with its policy to target a full-year payout ratio of 75% of underlying profit after tax.

Indeed, with 672.75 million shares outstanding and NPAT of $87 million, it falls close to that ratio.

The AGL dividend will be paid on 24 March.

The company’s dividend reinvestment plan (DRP) is available to shareholders as an alternative to receiving cash payments. Investors wishing to participate in the DRP need to do so by 24 February.

Factoring in the intraday 10.7% fall in the AGL share price to $7.09 per share, the stock currently pays a trailing, unfranked dividend yield of 2.5%.

The post The AGL dividend has just been slashed. Here’s what you need to know appeared first on The Motley Fool Australia.

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More reading

• AGL share price sinks following 55% profit dive
• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX 200 shares today
• Why I think AGL shares could double an investor’s money in four years
• ‘Massive job ahead’: Should you buy AGL shares now or wait?

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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