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The S&P/ASX 200 Index (ASX: XJO) isn’t having a crash-hot start to the trading week so far this Monday. At present, the ASX 200 has lost a slim 0.16% and is back to just under 7,550 points. But it’s a different story when it comes to the Magellan Financial Group Ltd (ASX: MFG) share price. Well, at least it was.

Magellan shares had a cracking start to the trading day. The ASX 200 investment manager closed at $9.23 a share last week but opened at $9.53 this morning before rising as high as $9.79 – a gain of more than 6%.

But alas, it wasn’t to last. This cracking gain turned out to be a flash in the pan. Soon after market open, Magellan shares lost steam and dropped into the red. At the time of writing, the company has scraped back into the green, up 0.11% at $9.24 a share:

So what has caused this rather dramatic volatility this Monday?

Well, it appears we have Magellan’s latest funds under management (FUM) figures to thank.

Magellan share price swings as latest FUM figures come out

This morning before market open, Magellan announced its latest FUM figures in an ASX release to the markets.

It was a bit of a mixed bag for Magellan over January 2023. Overall, total FUM rose from $45.3 billion on 30 December 2022 to $46.2 billion as of 31 January. That’s a rise worth just under 2%.

However, it wasn’t all roses. The company still experienced net outflows of $0.5 billion for the month. This was made up of $0.3 billion from retail investors and $0.2 billion from institutional investors.

Rising markets in January saved Magellan’s overall FUM from recording a fall. Magellan’s Global Equities division rose from $20.6 billion to $20.8 billion. Infrastructure Equities lifted from $16.2 billion to $16.4 billion, while Australia Equities surged from $8.5 billion to $9 billion.

Magellan has been dealing with falling FUM for months now, so investors would have been waiting for this latest report with great anticipation. Judging from the erratic reaction from the Magellan share price today, it seems to have disappointed investors. 

The Magellan share price still remains up a healthy 5.5% in 2023 to date though. However, it remains down by a painful 37% over the past 12 months, and by more than 85% since early 2020.

The post Magellan share price pops then drops on ASX FUM update appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Monday
• Which ASX 200 shares are rebounding fastest in 2023?
• 20+ years of growing dividends. Why I plan to buy more of this ASX 200 stock in 2023
• Here are the 3 most heavily traded ASX 200 shares on Friday
• A rare day in the green: Magellan share price soars 5%

Motley Fool contributor Sebastian Bowen 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 ASX share market is entering into an interesting time. After all the talk of interest rates and inflation, we’re now going to get insights into how companies have performed with ASX reporting season.

With the relative strength of the economy, some businesses have been reporting solid results.

For example, this morning Nick Scali Limited (ASX: NCK) reported a 70% increase in net profit and grew the dividend by 14%. January 2023 trading was “better than the group’s expectations”. However, the Nick Scali share price fell over 10% in response.

Will earnings hold up in this ASX reporting season?

As reported by ABC, Andrew Tang from Morgans said:

We are going through a period where it’s expected that economic fundamentals are going to deteriorate from rising interest rates, so how companies perform through that period is of critical importance to a lot of investors.

We’re looking for some pretty strong results from some of the Aussie retailers defying expectations of an imminent slowdown and a collapse in earnings expectations.

We saw some really great updates from Super Retail Group Ltd (ASX: SUL), the owner of BCF as well as Rebel Sports, do particularly well, which shows you just how resilient the Australian consumer is.

So we do think that that will continue to play out over the course of February when companies provide results.

However, the tricky thing to factor in for ASX retail shares is that the latest Australian Bureau of Statistics (ABS) showed a 4% decline in sales in December.

What’s the outlook for ASX dividends?

A lot of the Australian economy’s strength relates to the strength of households.

There are the banks like Commonwealth Bank of Australia (ASX: CBA), ANZ Group Holdings Ltd (ASX: ANZ), Westpac Banking Corp (ASX: WBC) and National Australia Bank Ltd (ASX: NAB).

Retailers are part of the picture, with names like Wesfarmers Ltd (ASX: WES), JB Hi-Fi Limited (ASX: JBH) and Harvey Norman Holdings Limited (ASX: HVN).

There are plenty of businesses that are related to property and goods, like CSR Limited (ASX: CSR), Brickworks Limited (ASX: BKW), Temple & Webster Group Ltd (ASX: TPW), Beacon Lighting Group Ltd (ASX: BLX), Stockland Corporation Ltd (ASX: SGP), Mirvac Group (ASX: MGR) and so on.

A weaker economy could mean difficulties for ASX shares and dividends.

ABC reported that Morgans’ Tang said:

We are a little bit more cautious around dividends, the environment, I guess.

Unless you’re a corporate that is very confident on the outlook for your company and the demand profile, then I think a lot of corporates will tend to reserve some of that capacity for the full-year results.

I think there’s a lot of concerns that the mortgage cliff, with a lot of fixed-rate mortgages rolling off in the second half of the year, will really come down on earnings.

We’re certainly not in that camp but I think just think the general fear and confidence around the outlook for the economy may keep a lot of corporates on the sidelines when it comes to paying out dividends.

Foolish takeaway

Readers will be able to catch all the ASX reporting season headlines as results are reported on the Motley Fool website.

With a number of retail businesses reporting their FY23 first-half result, comparing against a locked-down FY22 first-half, I think it could be another positive month of growth in those results. However, the outlook statements could be the most influential for some time for various sectors.

The post Could your dividends be at risk this ASX reporting season? appeared first on The Motley Fool Australia.

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More reading

• 2 ASX All Ords shares going gangbusters on Monday
• ASX lithium shares today: Two explorers that are thriving
• Should I buy Westpac shares for the big dividend?
• ANZ share price slips amid $50m acquisition
• Nick Scali share price plummets despite 70% profit boost

Motley Fool contributor Tristan Harrison has positions in Brickworks. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks, Harvey Norman, Super Retail Group, and Temple & Webster Group. The Motley Fool Australia has positions in and has recommended Brickworks, Harvey Norman, Super Retail Group, and Wesfarmers. The Motley Fool Australia has recommended Jb Hi-Fi, Temple & Webster Group, and Westpac Banking. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The All Ordinaries (ASX: XAO) may be starting the week in the red, but that hasn’t stopped a couple of shares from hurtling higher.

Here’s why these ASX All Ords shares are on form on Monday:

Incannex Healthcare Ltd (ASX: IHL)

The Incannex share price is up 14% to 20.5 cents. This is despite there being no news out of the cannabis and psychedelics company today.

Though, it is worth noting that the company recently announced that the PsiGAD1 clinical trial has achieved its interim milestone of 29 patients completing primary endpoint assessments, and independent analysis of the interim study data has commenced.

This trial is assessing Incannex’s psilocybin-assisted psychotherapy for the treatment of generalised anxiety disorder (GAD). The company notes that the treatment of GAD with currently accepted medications and therapies remains inadequate, with less than half of patients achieving remission. Positively, psilocybin-assisted psychotherapy has shown promise in the treatment of several mental health conditions.

Mesoblast Ltd (ASX: MSB)

The Mesoblast share price has jumped 11% to $1.16. Once again, this is despite there being no news out of the regenerative medicine company this morning.

However, investors have been fighting to get hold of the company’s shares in recent sessions thanks to a promising announcement from last week. That announcement revealed that it has resubmitted its Biologics License Application (BLA) to the U.S. Food and Drug Administration (FDA).

This is for the approval of remestemcel-L in the treatment of children with steroid-refractory acute graft versus host disease (SR-aGVHD). The resubmission contains substantial new information as required by the FDA. Investors appear optimistic that this might be enough to finally get the thumbs up from the regulator.

The post 2 ASX All Ords shares going gangbusters on Monday appeared first on The Motley Fool Australia.

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More reading

• Why Argosy Minerals, Credit Corp, Flight Centre, and Mesoblast shares are racing higher
• Guess which ASX All Ords biotech share is rocketing 13% on FDA news
• Why Brainchip, Core Lithium, Deterra Royalties, and Mesoblast shares are falling

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’s been plenty of activity in the ASX lithium industry on Monday.

For example, the two ASX lithium shares listed below are on the move after the release of announcements.

Here’s what’s happening with these lithium shares:

Battery Age Minerals Ltd (ASX: BM8)

The Battery Age Minerals share price is fetching 49 cents at the time of writing. This represents a 22% increase on the lithium explorer’s listing price of 40 cents.

Battery Age Minerals was formerly known as Pathfinder Resources. It was removed from listing in 2020 after a period of two years of continuous suspension from trading. Today, it has returned under its new name after completing a public offer which raised $6.5 million at 40 cents per share.

The company secured a diversified project portfolio last year to reposition as an international explorer focused on future-facing commodities with the acquisition of three premium assets in Tier-1 locations. This includes the Falcon Lake Lithium Project in the Thunder Bay mining jurisdiction of north-western Ontario, Canada.

Patriot Battery Metals Inc (ASX: PMT)

The Patriot Battery Metals share price is up almost 19% to $1.97. This follows the release of promising drilling results from the wholly owned Corvette Property in the James Bay Region of Quebec.

The ASX lithium share reported that the first eight drill holes have intersected various widths of spodumene pegmatite, ranging from approximately 8m to 132m. This has extended the strike length of the CV5 Pegmatite body by an additional 400m along strike eastwardly.

Patriot Battery Metals’ President, CEO and Director, Blair Way, commented:

We are off to a great start with drilling at the CV5 Pegmatite in 2023. We are collaring at wide step-outs of 100 m on this first series of holes to the east and have now extended the principal spodumene pegmatite body at least another 400 m (drill hole CV22-093 to CV23-108), based on geological logging of drill core. With four drill rigs now active on site, and earlier than anticipated, we will continue to advance aggressively as we look ahead to an initial mineral resource estimate targeted for the first half of 2023.

The post ASX lithium shares today: Two explorers that are thriving appeared first on The Motley Fool Australia.

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More reading

• Guess which ASX lithium share is rocketing 13% on new finds
• Guess which ASX lithium share is soaring another 12% today
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• ‘Hard to find words’: Why this ASX lithium share is rocketing 22%

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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As an ASX 200 bank share, investors are always going to expect big things when it comes to dividends from Westpac Banking Corp (ASX: WBC) shares. Westpac, along with the other members of the big four banks, has been paying relatively large dividends for decades.

As of today, this holds firm. Over the past 12 months, Westpac shares have given investors two dividend payments. The bank paid out an interim dividend worth a fully franked 61 cents per share back in June 2022.

Then, a fully franked final dividend worth 64 cents per share followed in December, for an annual total of $1.25 for 2022.  Both of these payments were healthy increases over the interim and final dividends from 2021.

Together, these last two dividends give Westpac shares a trailing dividend yield of 5.22% right now (or 7.46% grossed-up with that full franking). That’s based on the current Westpac share price of $23.94 (at the time of writing).

So is this dividend enough to make Westpac shares a buy today?

Is a big ASX 200 dividend enough to buy Westpac shares?

Well, for an income investor, that yield alone might be enough to get over the line. 5.22% is a relatively high yield by ASX standards (especially including the full franking).

And Westpac has always been one of the more solid dividend payers on the ASX. So, barring unforeseen events, investors probably don’t have to worry about a massive cut to Westpac’s dividend going forward.

But let’s see what one of the ASX’s expert investors reckons.

As my Fool colleague James covered last week, ASX broker Goldman Sachs has recently named Westpac as “the best big bank to buy right now”. Goldman gave Westpac shares a buy rating, with a 12-month share price target of $27.6, largely thanks to optimism over Westpac’s bold cost-cutting plan.

If realised over the next year, this would mean an upside of more than 15% in capital growth alone from the current price. That’s pretty good news, considering Westpac shares have already risen by 11% over the past year:

But Goldman is also expecting Westpac to keep raising its dividend over the coming year or two as well. It is predicting a total of $1.484 in dividends per share for FY2023, rising to $1.60 per share in FY 2024.

This would indicate an interim dividend of 84.4 cents per share in June this year, and two dividends worth 80 cents per share following that.

So that’s a lot of upside to look forward to if broker Goldman is on the money. We can’t be certain if this is the case right now, of course. But this ASX expert clearly thinks Westpac shares are a buy today for the big dividend.

The post Should I buy Westpac shares for the big dividend? appeared first on The Motley Fool Australia.

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More reading

• Buy Westpac and this ASX 200 income share: experts
• Investing in ASX 200 dividend shares? Here’s what to look for in 2023: fund manager
• Westpac shares are ‘attractive for income-oriented investors’: analyst
• Investing in ASX 200 bank shares? Here’s the dividend outlook for 2023
• Forget gold! ASX 200 blue-chip shares could be the new safe-haven asset

Motley Fool contributor Sebastian Bowen 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 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 ANZ Group Holdings Ltd (ASX: ANZ) share price is in the red this morning amid news of a $50 million investment.

The smallest of the big four banks is buying a minority stake in Australian property media and technology company View Media Group (VMG) and is aiming for exclusive benefits.

Right now, the ANZ share price is $25.615, 0.52% lower than its previous close.

For comparison, the S&P/ASX 200 Index (ASX: XJO) is currently slipping 0.07%. Meanwhile, the S&P/ASX 200 Financials Index (ASX: XFJ) – housing the market’s biggest banks – is down 0.41%.

Let’s take a closer look at the banking giant’s latest buy.

ANZ share price sinks despite $50m real estate tech investment

ANZ is making a foray into realty technology, snapping up a stake in real estate digital media and technology services company VMG.

The stake is expected to bolster the bank’s strategy to establish a suite of services making it easier to buy, rent, or own property.

It’s also planning to create an exclusive financial services partnership on some of VMG’s key offerings. They include property-listing platform realestateview.com.au, AI-powered real estate service Propic, and comparison service Beevo.

The acquisition might help boost ANZ’s hold in the Aussie mortgage market. It will also see it with a seat on VMG’s board.

VMG launched last year. It was established by former Domain Holdings Australia Ltd (ASX: DHG) boss Antony Catalano and Aussie billionaire Alex Waislitz.

It counts Seven West Media Ltd (ASX: SWM) as a strategic investor.

Catalano and Waislitz’s Thorney Investment Group also bought Australian Community Media (ACM) from Nine Entertainment Co Holdings Ltd (ASX: NEC) in 2019.

The bank’s $50 million investment was officially announced today. However, a real estate media venture appears to have been on its mind for some time now.

And it might not be the first time ANZ and Catalano were involved in such talks.

ANZ considered buying a 20% stake in Domain for $600 million in 2018, the Australian Financial Review reports.

The post ANZ share price slips amid $50m acquisition appeared first on The Motley Fool Australia.

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More reading

• ANZ shares have been on a roll in 2023. Can it last?
• Top ASX dividend shares to buy in February 2023
• ‘Attractive stock’: Fundie names one ASX share to buy, one to watch, one to avoid
• Is the ANZ share price cheap right now?
• Investing in ASX 200 bank shares? Here’s the dividend outlook for 2023

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 recommended Nine Entertainment. 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 Nick Scali Ltd (ASX: NCK) share price is taking a beating on Monday, tumbling 12.4% in morning trade.

Shares in the ASX furniture retailer closed at $12.42 each on Friday and are currently swapping hands for $10.88 apiece.

This comes following the release of the company’s half-year results for the six months ending 31 December (H1 FY23).

Here are the highlights.

Profit boost fails to lift Nick Scali share price

The Nick Scali share price is deep in the red despite the company reporting some very positive metrics for the half year.

Those include a 70% increase in net profit after tax (NPAT) from to $60.6 million, up from $35.6 million in H1 FY22*.

(*Note, the H1 FY22 reported results were underlying. In H1 FY23, there were no adjustments from statutory to underlying results.)

Revenue for the half year came in at $283.9 million, up 57.4% from the prior corresponding period.

The company said the higher revenues were driven by “record deliveries due to the large outstanding order bank at the end of the previous half year”. Reported revenues for the period also included six months of revenue contribution from Plush-Think Sofas, which Nick Scali acquired on 1 November.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) leapt 53.4% from the corresponding half year to $112.2 million, up from $73 million.

Meanwhile, costs fell with the company reporting a drop in its cost of doing business (expenses as a percentage of sales), down 2.9% to 32.1% during the half year.

And management declared a 40 cents per share, fully franked dividend. That’s up 14.3% from the 35 cents per share paid in H1 FY22.

What did management say?

Commenting on the strong half-year results that are failing to lift the Nick Scali share price today, managing director Anthony Scali, said:

The integration of Plush is now complete with IT and distribution operations integrated during the half and we are well placed to grow our store network under both brands.

In 2H FY23 we are commencing a twelve-month program of refurbishment of over 40 Plush stores with new and improved product, image and store appeal to customers. We are excited about the potential to improve foot traffic and conversion in the current Plush store network.

Now what?

The Nick Scali share price could be under some pressure as the company reported its January 2023 written sales orders were 12.1% less than January 2022. Though that exceeded the company’s expectations.

Nick Scale said it expects to open four new stores during the current half year (2H FY23). That’s atop the two new stores it opened during the reported half year.

As for what investors can expect in the current half year, the company said, “The 2H FY23 result will depend upon trading during February to April and at this point it is difficult to provide further guidance.”

That uncertainty may be spooking investors today.

Nick Scali share price snapshot

Despite today’s big selloff, the Nick Scali share price remains up 3% in 2023.

As you can see in the chart below, shares in the furniture retailer have slid 18% over the past 12 months.

The post Nick Scali share price plummets despite 70% profit boost appeared first on The Motley Fool Australia.

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• Top ASX dividend shares to buy in February 2023
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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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Late Friday, Australia became the first country in the world to recognise ecstasy and magic mushrooms as medical treatments.

Officially, the drugs approved for use are 3,4-methylenedioxy-methamphetamine (MDMA) and psilocybin. 

The Therapeutic Goods Administration made the surprise announcement that both would be allowed to be prescribed by psychiatrists from July onwards to treat mental disorders.

The milestone triggered investors to pile onto one particular ASX stock on Monday morning.

‘The only ASX company’ in position to take advantage of TGA decision

Furious demand saw the share price for neuroscience and mental health biotech Emyria Ltd (ASX: EMD) rocket 47.4% upwards after just 38 minutes of trading on Monday.

The company itself had recognised the TGA announcement before the session, calling it a “landmark” decision in a statement to the ASX.

“Emyria… is well positioned to accelerate patient access to MDMA-assisted therapies following recent TGA regulation changes.”

While the TGA was mulling over the decision, Emyria had set up “a network of clinical partners”, formed a supply chain and “developed a comprehensive Phase 2B clinical trial protocol for MDMA-assisted therapy”.

According to Emyria managing director Dr Michael Winlo, the “mental health crisis” globally continues to bear tremendous social and monetary costs.

“Which is why the TGA’s move to reschedule MDMA and psilocybin is timely and world-leading,” he said.

“Emyria is well-prepared to support the safe provision of MDMA-assisted therapies under this new change as the only ASX company with a clinical service specialising in unregistered medicines and real-world data generation.”

He added that the company has “also developed a comprehensive MDMA-assisted therapy protocol that can now support specialists”.

Drug discovery program

Emyria also has fires burning for related products. It has launched an “MDMA-inspired drug discovery” program in conjunction with the University of Western Australia.

“The partnership has now developed, screened and filed IP for over 140 proprietary, neurologically active and novel MDMA-like compounds with the potential to become registered treatments for a range of neuropsychiatric disorders and new psychedelic treatments.”

The Emyria board stated that the TGA decision would create a pathway for “registration and reimbursement for MDMA and its analogues”.

“We believe the TGA’s decision will allow Emyria – and its partners – to build a stronger evidence base for treating mental health conditions with psychedelics and make a large and positive impact for patients globally,” said Winlo.

The post ASX biotech share rockets 47% on ‘landmark decision’ appeared first on The Motley Fool Australia.

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More reading

• Nick Scali share price plummets despite 70% profit boost
• Would Core Lithium shares be dirt cheap if lithium prices remain strong?
• Why BHP shares are poised to continue delivering strong dividends in 2023: expert
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Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Core Lithium Ltd (ASX: CXO) shares are having a poor start to the week.

In morning trade, the lithium developer’s shares are down 4% to $1.08.

Why are Core Lithium shares falling?

The weakness in the Core Lithium share price today appears to have been driven by ongoing concerns over the future direction of lithium prices.

This follows the release of a note out of Goldman Sachs, which reveals where its analysts expect the price of the battery making ingredient to be heading in the coming years.

And with Goldman continuing to believe that prices are heading sharply south, it has reaffirmed its sell rating and 95 cents price target on its shares. This implies potential downside of 12% from current levels.

But what if lithium prices didn’t fall, would Core Lithium shares be fairly priced or even cheap?

If lithium prices remained strong

While Goldman Sachs continues to forecast major declines in lithium in the coming years, it has provided investors with an idea of what could happen if they didn’t.

Firstly let’s take a look at the forecasts and current spot prices.

According to the note, the broker expects spodumene prices to average US$4,330 a tonne in 2023, US$800 a tonne in 2024 and 2025, before settling at a long term average of US$1,000 a tonne. This compares unfavourably to the current spot spodumene price of US$5,970 a tonne.

Based on these forecasts, Goldman expects Core Lithium to post an underlying net profit after tax of $340 million in FY 2024 and just $50 million in FY 2025.

However, if the spodumene price remained at current spot levels through to 2025, Goldman believes Core Lithium would deliver an underlying net profit after tax of $720 million in FY 2024 and just $830 million in FY 2025.

That’s more than double in FY 2024 and approximately 16 times greater in FY 2025, which goes some way to demonstrating why Core Lithium shares are so volatile. If you’re bearish on lithium prices then Core Lithium is expensive, if you’re bullish on lithium then Core could prove to be dirt cheap based on its potential profits.

Time will tell which is the case.

The post Would Core Lithium shares be dirt cheap if lithium prices remain strong? appeared first on The Motley Fool Australia.

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More reading

• These are the 10 most shorted ASX shares
• Top brokers name 3 ASX shares to buy next week
• Core Lithium: An ASX 200 share to buy in February? 
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Why was the Lynas share price hit so hard on Tuesday?

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

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BHP Group Ltd (ASX: BHP) shares have become increasingly popular among investors seeking passive income from their ASX stocks.

At this morning’s opening price of $49.91, BHP shares pay a noteworthy 9.3% fully franked trailing dividend yield.

The S&P/ASX 200 Index (ASX: XJO) mining giant made headlines this time last year with a record interim dividend payout of $2.08 per share. That was paid on 28 March.

Adding in the September final dividend of $2.55 per share, we arrive at that 9.3%, inflation-beating, yield.

Of course, we are talking about trailing yields here.

The question for ASX 200 income investors now is, can the good times continue?

For some insight into the outlook for dividends from BHP shares in 2023, we turn to managing director at Plato Investment Management Don Hamson.

What to expect in 2023?

The Motley Fool published our interview with Hamson on the broader outlook for ASX 200 dividend shares last week.

Overall, he was quite positive on what to expect from the ASX mining stocks.

“Despite the naysayers, Australian miners have continued to deliver strong dividends, hence why many have remained in our portfolio,” he told us.

“Broadly speaking, we think this will continue into 2023. Income from the sector will remain strong, but we may not see the record dividends and special dividends seen in recent years.”

Hamson said that BHP shares were a “a good example here”.

According to Hamson:

In FY22, it posted net profits of US$22.4 billion. That was up 64% on 2021 when many thought it was the peak for the ‘Big Australian’ because it was the top of the iron ore cycle. But last year, it was coal that provided a windfall, generating about US$9.5 billion for the company. A great demonstration of diversified revenues.

Hamson noted that when franking credits are accounted for, BHP shares offer a double-digit yield.

“BHP is now trading on a double-digit grossed-up yield, with an incredibly strong balance sheet,” he said. “In its FY22 financials, it had US$300 million worth of debt – it can make that up in about a week.”

How have BHP shares been performing?

As you can see on the chart below, BHP shares are up 6% so far in 2023. Over the past 12 months, the ASX 200 miner is up 1%. But remember, those figures don’t include the juicy dividend payouts.

The post Why BHP shares are poised to continue delivering strong dividends in 2023: expert appeared first on The Motley Fool Australia.

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More reading

• BHP share price jumps as Oz Minerals acquisition clears major hurdle
• Why are ASX 200 iron ore shares being hammered hard on Friday?
• Investing in ASX 200 dividend shares? Here’s what to look for in 2023: fund manager
• Why are ASX 200 iron ore shares like Rio Tinto sliding lower today?
• Two ‘top prospect’ ASX 200 dividend shares for 2023 revealed: fund manager

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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