Tag: Motley Fool

The ASX share market has plenty of options for investors to choose from to build wealth. An adult can start investing at any age – 20, 30, or even 70.

One of the most powerful tools we can use to help grow our finances is compounding. Albert Einstein, once supposedly said:

Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it.

The longer we give compounding to work, the easier it is. But that doesn’t mean it’s not worth doing if we haven’t started as early in life as we’d like.

Wealth-building examples

I think one of the easiest ways of showing how ASX shares can build wealth is with a compound interest calculator.

If someone was 30, had $0 invested, and decided to invest $500 a month, with a share portfolio returning an average of 10% per annum, it would grow into $343,650 after 20 years and almost $1 million after 30 years.

Investing $1,500 a month grows into $1.03 million after 20 years and $2.96 million after 30 years if it compounded at 10% per annum.

Don’t forget that employees are meant to receive superannuation contributions which can play a big part in wealth building. Indeed, superannuation contributions could make up the majority of the necessary money needed to build someone’s net worth to more than $1 million.

However, which ASX shares to invest in is an entirely different question.

One of the easiest investment options is an exchange-traded fund (ETF). An ETF allows investors to buy a whole group of shares at once, rather than having to buy one investment at a time. It can save a lot of time and brokerage fees, as well as enabling investors to track the market return for a low fee.

The Vanguard MSCI Index International Shares ETF (ASX: VGS) is one of the most diversified ETFs with more than 1,400 holdings across the world. The US has by far the biggest allocation of any country because that’s where many of the world’s global leaders are based, such as Apple, Microsoft, Alphabet, Amazon.com, Johnson & Johnson, Exxon Mobil, Berkshire Hathaway, and Nvidia.

Since its inception in November 2014, the ETF has returned an average of 10.6% per annum, though the past is not a guarantee of future results.

Which other ASX shares could generate good returns?

I think the best investment strategy is to invest for the long term. In terms of which ASX shares could be good investments for at least a decade or longer, names like VanEck Morningstar Wide Moat ETF (ASX: MOAT), Wesfarmers Ltd (ASX: WES), and Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) could make good returns for investors in my opinion.

It’s never too late to start investing. I would love to build a $1 million portfolio myself but it’s going to take a lot of work to get there.

The post With almost no investments at 30, can ASX shares still make me rich? appeared first on The Motley Fool Australia.

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More reading

• Is Wesfarmers a ‘safe’ ASX 200 share to buy for dividends?
• Experts say these top ASX dividend shares are buys right now
• Are ASX 200 retail shares on sale in 2023?
• I think these two ASX ETFs are great buys as inflation cools
• 3 of the best ASX ETFs for investors to buy in January

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Tristan Harrison has positions in Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Apple, Berkshire Hathaway, Microsoft, Nvidia, Vanguard Msci Index International Shares ETF, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Johnson & Johnson and has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, and short March 2023 $130 calls on Apple. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited and Wesfarmers. The Motley Fool Australia has recommended Alphabet, Apple, Berkshire Hathaway, Nvidia, VanEck Morningstar Wide Moat ETF, and Vanguard Msci Index International Shares ETF. 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 JB Hi-Fi Limited (ASX: JBH) share price is trouncing the broader market on Tuesday following the release of its preliminary first-half results.

Around midday, shares in the retailing powerhouse are 0.4% stronger than yesterday at $47.29 apiece. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is swimming in the red with a 0.12% downward move today.

Earlier today, JB Hi-Fi shares reached an 8-month high of $49.72. Excitement is swirling around the company amid a shockingly good set of numbers. Unsurprisingly, the retailer is one of the best-performing shares in the index today.

What is bolstering the JB Hi-Fi share price today?

The market might have expected a weak result from one of Australia’s most prominent retailers. After all, the COVID-19-induced shopping frenzy has mostly fizzled out, inflation has increased costs, and interest rate rises have stifled consumer spending.

Despite all the headwinds, JB Hi-Fi revealed record sales and earnings in the first half of FY23. Preliminary results show group sales increasing 8.6% year-over-year to $5,278.5 million. Even sweeter, net profit after tax (NPAT) surged 14.6% to $329.9 million.

According to the release, the stupendous figures were a byproduct of continued elevated customer demand for consumer electronics and home appliances. Additionally, management attributed ‘well-executed’ Black Friday and Boxing Day promotions as contributors to the blockbuster result.

Breaking it down

Picking apart the metrics, the largest increase in sales came from the company’s New Zealand operations — increasing 16.1% year-on-year. However, in terms of earnings before interest and tax (EBIT), JB Hi-Fi’s New Zealand EBIT fell 26.5% — the worst of the bunch.

This didn’t impact the group’s overall EBIT growth due to most of the company’s EBIT being derived from its Australian operations. The Aussie segment’s pre-tax earnings jumped by 16.7% to $341.3 million during the half.

The JB Hi-Fi share price is up nearly 14% since the start of 2023. Signs of inflation possibly easing has spurred on a renewed taste for ASX retail shares as the outlook starts to turn more optimistic.

The post Here’s why the JB Hi-Fi share price is smashing the ASX 200 today appeared first on The Motley Fool Australia.

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More reading

• Are ASX 200 retail shares on sale in 2023?
• Still shopping, share price not dropping: Lovisa shines among 3 best ASX 200 retail shares of 2022
• Falling inflation! Could the party be back on for ASX 200 retail shares?
• 3 ASX All Ords shares forecasting dividend yields of at least 7% in FY24
• My plan to turn $5 a day into a passive income in 2023

Motley Fool contributor Mitchell Lawler 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 Jb Hi-Fi. 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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Are you looking for growth shares to buy? If you are, then you may want to check out the two listed below that experts rate as buys.

Here’s what analysts are saying about these ASX growth shares right now:

Jumbo Interactive Ltd (ASX: JIN)

According to analysts at Morgans, this online lottery ticket seller could be an ASX growth share to buy right now.

The broker appears confident on Jumbo’s outlook thanks to its defensive qualities, low capital expenditures, and its global opportunity with the Powered by Jumbo software-as-a-service (SaaS) platform. It explained:

We believe JIN offers excellent strategic growth opportunities, both in Australia and overseas, supported by a steadily expanding domestic market for digital lottery retailing. The business is cash generative and has a low requirement for ongoing capex. Lottery sales are resilient to economic cyclicality. They do not represent a large proportion of the personal budgets, hovering around 0.5% of household discretionary income in Australia. Although near-term sales are affected by the frequency of large jackpots, over time growth is steady.

Morgans currently has an add rating and $17.50 price target on the company’s shares. This compares to the latest Jumbo share price of $15.48.

Temple & Webster Group Ltd (ASX: TPW)

Another ASX growth share that experts say investors should buy is Temple & Webster. It is Australia’s leading pure-play online retailer of furniture and homewares.

One of the most bullish brokers is Goldman Sachs, which is tipping the company to grow at a rapid rate long into the future. It expects this to be underpinned by the company’s leadership position in a retail category that is still in the early stages of shifting online. The broker explained:

Our Buy thesis is predicated on the following key drivers: (1) we believe TPW is well positioned in the upcoming cycle to continue to grow market share, despite a weaker macro environment; (2) in our view TPW is best placed to be a winner in a category that favours scale players, requires a specialised approach to e-commerce, and has higher barriers to entry vs. other retail categories; and (3) greater focus on costs is a sensible strategy to balance near-term profitability with growth.

Goldman has a buy rating and $7.50 price target on the company’s shares. The Temple & Webster share price is currently fetching $5.23.

The post Here are 2 excellent ASX growth shares to buy now: experts appeared first on The Motley Fool Australia.

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More reading

• Waiting for ASX shares to bottom? Why you could miss out on a stock market rally
• Goldman Sachs names 3 ASX growth shares to own in 2023
• These beaten down ASX shares are cheap buys: experts
• 3 ASX growth shares to buy with huge upside potential – analysts
• 2 excellent ASX growth shares that analysts say are buys in January

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 Jumbo Interactive and Temple & Webster Group. The Motley Fool Australia has recommended Jumbo Interactive and Temple & Webster 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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is fighting hard to get into positive territory but has fallen a touch short. At the time of writing, the benchmark index is down slightly to 7,385.6 points.

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

Baby Bunting Group Ltd (ASX: BBN)

The Baby Bunting share price is down a further 2% to $2.63. Investors have been selling this baby products retailer’s shares this week following the release of another disappointing trading update. In response to the update, Morgans has just downgraded Baby Bunting’s shares to a hold rating and slashed the price target on them to $2.80.

Origin Energy Ltd (ASX: ORG)

The Origin share price is down 3% to $7.42. This may have been driven by concerns over its takeover by private equity. This morning, the energy giant revealed that the consortium looking to acquire it for $9.00 per share has requested more time for its due diligence.

Rio Tinto Ltd (ASX: RIO)

The Rio Tinto share price is down 1% to $121.00. Investors have been selling this mining giant’s shares amid broad weakness in the resources sector and the release of its fourth quarter update. That update revealed that Rio Tinto delivered the low end of its iron ore shipments guidance in FY 2022. However, its costs were slightly ahead of guidance due partly to inflationary pressures.

South32 Ltd (ASX: S32)

The South32 share price is down 3% to $4.56. This appears to have been driven by a spot of weakness in the copper price. According to CNBC, overnight the base metal dropped 1.55% to US$4.150 per pound. Broad weakness in the resources sector could also be impacting its shares.

The post Why Baby Bunting, Origin, Rio Tinto, and South32 shares are dropping today appeared first on The Motley Fool Australia.

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More reading

• Buy ‘underappreciated’ Origin Energy shares for 20% upside: Morgan Stanley
• Rio Tinto share price falls on Q4 update
• Why did iron ore shares lag the ASX 200 on Monday?
• Here are the 3 most heavily traded ASX 200 shares on Monday
• Why did this ASX 300 share just crash 12%?

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 Baby Bunting Group. The Motley Fool Australia has recommended Baby Bunting 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 US-listed electric battery and vehicle manufacturer Tesla Inc (NASDAQ: TSLA) remains one of the most controversial stocks on the US markets.

After a blistering run up over 2020 and 2021, Tesla shares had a shocker last year. The company started 2022 at US$352.26 a share, but ended the year down a nasty 65% at US$123.18:

 

So investors have taken one mightily cold bath on this one.

But for fans of Tesla, perhaps these lower prices are drawing some eyes. So could this be the moment to jump into this future-facing company?

Elon Musk…

Well, the first thing to note is that it’s very possible that Tesla’s woeful performance last year wasn’t entirely the fault of the company’s performance itself. Tesla CEO Elon Musk is a highly controversial character. Musk has been an eyebrow-raiser for years. But his antics in 2022 were certainly divisive.

Most pressingly, many investors began to worry that Musk’s quest to purchase the social media giant Twitter compromised Tesla.

Not only is Musk now running Twitter in addition to Tesla and his other companies like SpaceX, but he has sold down significant chunks of his Tesla holdings to fund the US$44 billion purchase.

If you don’t like Musk, his antics or his… unique way of running his companies, then perhaps Tesla is not an investment for you. Musk remains Tesla’s largest single shareholder, and it’s likely that he will remain at the helm of the company for as long as he wants to.

So everyone knows that Tesla is a leading provider of fully electric vehicles. Many countries, such as the United Kingdom, have already passed laws that will outlaw the sale of internal combustion-powered vehicles over the next two decades.

And there is significant pressure around the world to move vehicle fleets to electric power in order to combat climate change. This is a powerful tailwind behind Tesla.

The company is also expanding its vehicle range to cater for more customers. Its most popular models are the mass-marketed Model 3 and Model Y. But the company is working on bringing out its ‘cybertruck’ ute. It has also recently begun rolling out the Tesla Semi.

So I think there is plenty of growth left in Tesla’s future.

But let’s get down to some numbers now.

Is Tesla stock a buy or a sell today?

Elon Musk stated that he has set a goal for Tesla increasing its vehicle deliveries by 50% in 2022. The company did not quite achieve that, announcing recently that total deliveries grew by 40% in 2022 to 1.31 million.

Still, I consider that to be a very impressive figure, especially for such a capital-intensive business.

At the current Tesla stock price, the company has a price-to-earnings (P/E) ratio of 37.71. For a company that just grew its sales by 40%, I personally think that P/E ratio is quite reasonable.

If I was thinking about buying Tesla stock today, considering these metrics, the final question I would ask myself is this: ‘Is this company going to be larger and more profitable in 10 years’ time than it is today?’. If the answer to that question is yes, then the current pricing might be your best chance to buy Tesla shares.

The post Should I buy Tesla stock for 2023 or not? appeared first on The Motley Fool Australia.

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More reading

• Tesla share price correction: A chance to get rich?
• What can ASX lithium share investors learn from Tesla discounting its cars?

Motley Fool contributor Sebastian Bowen has positions in Tesla. 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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The Origin Energy share price has soared 30% in the last year but it could still have more upside, according to Morgan Stanley.

Today, Origin shares are currently down 3.53%, fetching $7.38 apiece. For perspective, the S&P/ASX 200 (ASX: XJO) is 0.04% in the green at the time of writing.

Let’s check the outlook for the Origin Energy share price.

What’s ahead?

Analysts at Morgan Stanley have upgraded the Origin Energy share price to “overweight”.

The broker has placed an $8.88 price target on Origin shares. This implies an upside of 20.3% based on today’s price.

Morgan Stanley believes Origin Energy, along with its utilities peer AGL Energy Ltd (ASX: AGL), is “underappreciated”, The Australian reported.

The broker now has “higher conviction in the company’s access to capital, and its ability to monetise the opportunities” amid the energy transition towards decarbonisation.

However, the broker is wary of fuel price volatility, natural disasters, unpredictable weather, and government policy intervention, the publication noted.

Update on potential acquisition

Meanwhile, a consortium conducting due diligence ahead of a potential takeover of Origin Energy now has more time.

Origin received a non-binding proposal from the consortium to acquire all of Origin’s shares at a price of $9 cash per share in November.

The consortium is made up of Brookfield Asset Management and affiliates, along with Mid Ocean Energy — an LNG company formed by EIG Partners.

Origin advised today the consortium is “working to complete its due diligence and has requested additional time to do so”. Exclusivity will now end on 24 January, a week from today.

Origin said:

At this stage shareholders do not need to take any action. Origin will continue to keep shareholders updated in accordance with its continuous disclosure obligations as its engagement with the Consortium continues.

In December, Origin Energy granted the consortium an extension on the exclusivity to 16 January to complete due diligence over the holiday period.

Share price summary

The Origin Energy share price has slid 3.95% this year so far, but it has climbed 2.42% in the last month.

In the past week, Origin shares have lost 3.7%.

Origin has a market capitalisation of about $12.8 billion based on the current share price.

The post Buy ‘underappreciated’ Origin Energy shares for 20% upside: Morgan Stanley appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Monday
• BHP share price hits milestone $50 mark on Monday
• Guess which ASX All Ords tech share is soaring 8% on boosted forecast earnings

Motley Fool contributor Monica O’Shea 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 Leo Lithium Ltd (ASX: LLL) share price has defied weakness in the lithium industry today and is charging higher.

At the time of writing, the lithium developer’s shares are up 6% to 59 cents.

Why is this ASX All Ords lithium share racing higher?

Investors have been buying this lithium share on Tuesday morning following the release of a positive update.

According to the release, the company has substantially upgraded the mineral resource estimate (MRE) for the Goulamina Lithium Project in Mali.

A resource definition drilling campaign was undertaken during the second half of 2022 on pegmatite dykes in the Danaya Domain at the south-west of the project. Pleasingly, the recently completed assessment of drilling results and the updated MRE for Danaya has increased the Danaya MRE by 152%, from 22.3 Mt to 56.1 Mt.

As a result, the total Goulamina resource base has increased by 31% from 108.5 Mt at 1.45 % Li2O to 142.3 Mt @ 1.38% Li2O.

‘Outstanding scale’

Leo Lithium’s managing director, Simon Hay, was pleased with the results and notes the project’s “outstanding scale.” He commented:

We are pleased to report a considerable resource upgrade which confirms the outstanding scale, high-grade nature, and further growth potential of the Goulamina Project. An increase in Danaya of 33.8 Mt from a moderate drilling campaign of approximately 12,700 metres, is a fantastic outcome. These results continue to reveal high-grade, thick intercepts and confirm our expectations of multiple, wide mineralised pegmatite zones.

Also, the deposit remains open at depth and along strike, creating new drilling targets for the team. This significant upgrade also supports the possible extension of the 23-year mine life of the Goulamina Project. Resource definition drilling continues on the Northeast Domain with drilling results to be announced shortly, and a Mineral Resource estimate subsequently set to be restated in the current half year. These results are also encouraging ahead of first spodumene concentrate product in Q2 2024 and the early revenue opportunity from the targeted export of direct shipped ore in H2 2023.

The post Why is this ASX All Ords lithium share shooting higher today? appeared first on The Motley Fool Australia.

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More reading

• Top broker says this little-known ASX lithium share has 150% upside
• 2 ASX lithium shares to buy, and 1 to avoid: broker

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 ANZ Group Holdings Ltd (ASX: ANZ) share price has been rising. After rising 5% in a month and 13% in six months, is the ASX bank share still an opportunity to invest in?

It’s about to be reporting season for many of the companies on the ASX, though not for ANZ. The bank is planning to release its half-year result on 4 May 2023. However, we may see some interesting details announced in its quarterly update which should be released in the next few weeks.

However, investors will be able to get a good look at the banking sector with updates from ASX bank shares like Commonwealth Bank of Australia (ASX: CBA), Bendigo and Adelaide Bank Ltd (ASX: BEN), Suncorp Group Ltd (ASX: SUN) and Mystate Ltd (ASX: MYS). We could also get insights from non-banks such as Pepper Money Ltd (ASX: PPM).

Are ANZ shares a good opportunity?

Using the estimates on Commsec, the ANZ share price is valued at under 11 times FY23’s estimated earnings. However, the profit projections show that the big ASX bank share’s earnings could remain virtually flat over the following two financial years to 2025.

The potential dividend income could be very promising.

Commsec numbers suggest that ANZ could pay an annual dividend per share of $1.54 in FY23. This would translate into a grossed-up dividend yield of 8.8%.

An even bigger dividend is expected in FY24 of $1.60 per share, which would translate into a grossed-up dividend yield of 9.2%.

Regardless of what the ANZ share price does, I think the dividend income alone could provide a good return for the bank.

Improvement of banking performance

Over the last few years, ANZ has reportedly lagged behind its major peers in terms of how quickly it is able to process a loan application. If a prospective borrower has the choice between two identical loans, one that takes three weeks and one that takes five weeks, I’d guess that they would choose the quicker one.

ANZ has been investing in technology to get back up to speed. In its 2022 annual report, it said that operational improvements have resulted in home loan processing times being back in line with the market.

Perhaps even more importantly, the business is benefiting from a rising net interest margin (NIM).

With the Reserve Bank of Australia (RBA) increasing interest rates, this is boosting how much interest-related profit the ASX bank share is able to generate. Not only does a higher interest rate mean more income, but it can result in more profit because banks are passing on rate hikes to borrowers at a stronger pace than savers.

Higher interest rates are certainly a short-term net benefit for banks, though it’ll be interesting to see how this impacts arrears in the longer term.

ANZ expects to earn $1.5 billion more net interest income in FY23 and over $3 billion in FY25 because of higher interest rates.

Time to buy ANZ shares?

The ASX bank share does look cheap, particularly compared to a bank like CBA. But, I’m keeping in mind that acquiring the banking division of Suncorp could be a distraction from improving the core banking division.

According to Commsec, ANZ is rated as a buy by seven analysts, it’s rated as a hold by seven analysts and it is rated as a sell by three analysts.

I think it would be a decent long-term buy at this level, though I prefer others in the ASX bank share sector.

The post Should I buy ANZ shares before earnings season? appeared first on The Motley Fool Australia.

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More reading

• Up 20% in 6 months, is the Westpac share price now fully valued?
• Buy ANZ shares now for 19% upside AND generous dividend income: broker
• Which ASX 200 bank shares are the ones to buy in 2023?
• Top ASX dividend shares to buy in January 2023
• Top brokers name 3 ASX shares to buy today

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 Bendigo And Adelaide Bank. 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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Super Retail Group Ltd (ASX: SUL) shares have been strong performers this week.

Investors have been scrambling to buy the retailer’s shares thanks to the release of a strong trading update.

That update revealed that Super Retail expects to report an 11% increase in like for like sales during the first half, taking its revenue to $1.96 billion. This is expected to underpin normalised profit before tax of $212 million and $218 million, which will mean a big improvement in its margins despite inflationary pressures hitting many retailers.

Is it too late to buy Super Retail shares?

The good news is that a couple of leading brokers believe Super Retail shares can keep rising from here.

According to a note out of Goldman Sachs, its analysts have reiterated their buy rating with an improved price target of $14.20.

Based on where its shares are currently trading, this implies potential upside of 16%. Goldman commented:

SUL is our preferred pick in discretionary apparel/footwear space given outdoor/functional category resilience as well as the company’s focus on driving consumer experience via loyalty (~70% of sales) and unique omni-channel experience. Our valuation methodology and multiples are unchanged. SUL trades at 12mths fwd P/E of 13.2x vs our new TP implied P/E of 15.2x. Reiterate Buy.

Who else is bullish?

Over at Morgans, its analysts also responded positively to Super Retail’s update by retaining their add rating and increasing their price target to $14.00.

This suggests that Super Retail shares could rise approximately 15% from current levels.

While the broker suspects that this could be as good as it gets for the company, it remains positive due to its attractive valuation. Morgans explained:

Is this as good as it gets for SUL? We expect LFL sales to turn negative from this point (including in the month of January) and we continue to see next year (FY24) as a down year both in terms of sales and margins. We are keeping SUL on an ADD rating, however, as multiples remain attractive and to reflect the possibility of further positive earnings surprises and maybe even capital management by way of a special dividend. Our target price increases from $13 to $14.

Finally, both brokers are expecting a fully franked dividend yield of approximately 5.1% in FY 2023, making the total potential returns even sweeter.

The post Should I buy Super Retail shares following Monday’s stellar update? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX 200 shares today
• This ASX 200 retail share is booming 10% on an ‘outstanding first-half result’
• Are ASX 200 retail shares on sale in 2023?
• My plan to turn $5 a day into a passive income in 2023

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 Super Retail Group. The Motley Fool Australia has positions in and has recommended Super Retail 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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As well as providing investors with exposure to sectors and indices, exchange-traded funds (ETFs) can be used to support certain investment strategies.

For example, if you’re not a fan of stock picking but want to build an income portfolio, there are a number of ETFs that you could consider such as the BetaShares S&P 500 Yield Maximiser (ASX: UMAX) and the Vanguard Australian Shares High Yield ETF (ASX: VHY)

The former uses a clever equity income investment strategy over a portfolio of shares comprising the S&P 500 Index on Wall Street to generate a greater-than-average dividend yield from the constituents of the index.

At last count, the BetaShares S&P 500 Yield Maximiser was providing investors with a dividend yield of 9.2%.

Whereas the latter, as you might have guessed from its name, gives investors exposure to a collection of the highest-yielding ASX shares. Though, it is worth noting that it does this with diversification in mind so that you don’t end up with a portfolio filled with coal and iron ore miners.

According to Vanguard, it currently trades with a forecast dividend yield of 5.4%.

How much would I need to invest for $4,000 of income?

If you were aiming for $4,000 of monthly passive income from these ETFs, you would need to invest a sizeable sum across them both.

That’s because to earn this level of income per month, you’ll need to generate $48,000 in dividends over 12 months.

From the Vanguard Australian Shares High Yield ETF, you would need to put a sizeable $444,000 into the fund to earn $24,000 annually ($444,000 * 5.4% = $24,000).

Fortunately, you wouldn’t need to make as great an investment in the BetaShares S&P 500 Yield Maximiser ETF right now thanks to its huge yield. An investment of approximately $260,000 would yield $24,000 in dividends annually for investors ($260,000 * 9.2% = $24,000).

That means a total investment of just over $700,000 could potentially yield you $48,000 annually and $4,000 monthly in passive income.

What if you don’t have $700,000?

Unfortunately, very few people are lucky enough to have this amount of money free to invest in the share market.

But if you have time on your side, you have the potential to get there by making consistent investments into the share market over the long term.

While past performance is no guarantee of future returns, according to Fidelity, the Australian share market has returned 9.6% per annum over the last 30 years. I would be disappointed if it didn’t achieve similar returns over the next three decades.

This means that if you invested $4,200 per annum over 30 years and earned the market return, your investments would have grown to $700,000. After which, you could switch your focus to income, and sit back and watch the dividends flow in!

The post How I’d generate a $4,000 monthly passive income using only ASX ETFs appeared first on The Motley Fool Australia.

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More reading

• Top ASX dividend shares to buy in January 2023
• Here are the ASX ETFs to buy for a passive income boost in 2023
• 2 excellent ETFs for ASX investors in January
• 2 of the best ETFs for ASX investors to own in 2023

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 BetaShares S&p 500 Yield Maximiser Fund. The Motley Fool Australia has recommended Vanguard Australian Shares High Yield ETF. 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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