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The team at Morgans regularly picks out its best ASX share ideas. These are the ASX shares that the broker thinks offer the highest risk-adjusted returns over a 12-month timeframe supported by a higher-than-average level of confidence.

On the list at the moment are the two ASX 100 shares listed below. Here’s why the broker believes these are among the best shares to buy right now:

Aristocrat Leisure Limited (ASX: ALL)

The first ASX 100 share that Morgans is tipping as a best buy is gaming technology company Aristocrat Leisure.

The broker likes the company due to its strong balance sheet, leadership position, and real money gaming opportunity. It explained:

ALL is a global market leader in the rapidly-growing land-based gaming and mobile gaming industries. It has delivered revenue growth of 17% pa over the past five years and 80% of revenue in FY21 was recurring. We expect ALL to continue to take market share in all its product segments. Demand for its gaming machines and digital games is resilient to economic cycles, though has slowed in recent months, leading the share price down. ALL’s 1-year forward P/E has derated to less than 20x from a high of 30x last September. With $3.3bn of currently available liquidity, ALL has significant funding capacity for growth, even after the buyback. It has a stated ambition to build a meaningful presence in the rapidly-growing online real money gaming segment, which we believe may be achieved both through organic investment and inorganic acquisitions.

Morgans has an add rating and $43.00 price target on Aristocrat’s shares.

Westpac Banking Corp (ASX: WBC)

Another ASX 100 share making the list is Australia’s oldest bank, Westpac.

The broker rates this banking giant highly due to its return on equity potential. It also sees Westpac as a top option for income investors due to its fully franked dividend yield. Its analysts said:

We view WBC as having the greatest potential for return on equity improvement amongst the major banks if its business transformation initiatives prove successful. The sources of this improvement include improved loan origination and processing capability, cost reductions (including from divestments and cost-out), rapid leverage to higher rates environment, and reduced regulatory credit risk intensity of non-home loan book. Yield including franking is attractive for income-oriented investors, while the ROE improvement should deliver share price growth.

Morgans has an add rating and $25.80 price target on Westpac’s shares. It also expects a fully franked 6%+ dividend yield in FY 2023.

The post Morgans names 2 of the best ASX 100 shares to buy now 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?
• Top brokers name 3 ASX shares to buy next week
• Here are the top 10 ASX 200 shares today
• How I’d invest my very first $500 in ASX shares in 2023
• Which ASX 200 bank shares are the ones to buy in 2023?

Motley Fool contributor James Mickleboro has positions in Westpac Banking. 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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Iron ore shares struggled against the ASX 200 on Monday.

Fortescue Metals Group Ltd (ASX: FMG), Rio Tinto Ltd (ASX: RIO) and BHP Group Ltd (ASX: BHP) trailed the benchmark index at market close.

Fortescue shares slid 2% today, while Rio Tinto shares slipped 0.1%. The BHP share price was up just 0.1% at the market close after hitting a milestone $50 per share high earlier today. The S&P/ASX 200 (ASX: XJO) jumped 0.82% to finish at 7,388.2 points at today’s close.

Let’s take a look at what may have weighed on iron ore shares on the ASX 200 today.

What happened?

News emerged yesterday that China’s economic planning agency would seek to crack down on surging iron ore prices by heightening its supervision, according to Bloomberg.

All three iron ore-producing giants — Fortescue, Rio and BHP — are impacted by the iron ore price, which can weigh on potential earnings and, therefore, investor sentiment.

China’s National Development and Reform Commission advised on Sunday it was interviewing companies relating to iron ore. In a statement (translated into English), the commission said:

The National Development and Reform Commission will continue to pay close attention to changes in the iron ore market and prices, and work with relevant departments to further study and take measures to severely crack down on illegal activities such as fabricating and disseminating information on price increases, hoarding, and price gouging, so as to effectively ensure the smooth operation of the iron ore market.

Iron ore futures on the Singapore Exchange have fallen 4.50% to US$119.85 at the time of writing.

The ASX 200 iron ore shares also produce other metals and minerals, including copper, nickel, zinc and aluminium. Aluminum is currently up 1.82%, while zinc is 2.74% higher, according to trading economics. Copper is down 1.16%, while nickel is sliding 0.85%.

Share price snapshot

The BHP share price has gained nearly 20% in the last 12 months.

Fortescue shares have climbed 4% in the past year.

The Rio Tinto share price has jumped 10% in the last 52 weeks.

The post Why did iron ore shares lag the ASX 200 on Monday? appeared first on The Motley Fool Australia.

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More reading

• BHP share price hits milestone $50 mark on Monday
• Why is the Fortescue share price being hammered on Monday?
• Is the BHP share price about to crack $50?
• 6 ASX mining shares just upgraded by brokers
• 4 ASX 200 shares celebrating Friday with new, 52-week highs

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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It has been a fruitful time to own Westpac Banking Corp (ASX: WBC) shares over the last six months. The Westpac share price has lifted by around 20% in that period.

Other ASX 200 bank shares have also performed well, with the Commonwealth Bank of Australia (ASX: CBA) share price up 14%, the National Australia Bank Ltd (ASX: NAB) share price rising 9% and the ANZ Group Holdings Ltd (ASX: ANZ) share price 13% higher.

Westpac stands above the rest over the past six months. But can this continue?

What’s driving Westpac shares?

The ASX banks are all expected to see improving profitability thanks to the higher official central bank interest rate.

Banks like Westpac are able to quickly pass on the interest rate rises to borrowers but give savers less of an interest rate rise. According to various media reporting, Treasurer Jim Chalmers has asked the Australian Competition and Consumer Commission (ACCC) to look at the rates offered on deposit accounts.

Being able to make more profit from the same loan book is a good help for Westpac.

Another aspect is that the business is looking to significantly reduce its cost base. In FY21, it spent $10.1 billion on underlying expenses, which were reduced to $9.4 billion in FY22. The target is $8.6 billion by FY24, Lower costs can improve the bank’s net profit position.

Are Westpac shares worth buying?

The ASX bank share could still be called cheap based on the conventional measure of looking at its price/earnings (p/e) ratio.

According to Commsec, the business is valued at under 12x FY23’s estimated earnings. Due to its low valuation, it could also pay a large dividend yield.

Commsec estimates suggest it could pay an annual dividend per share of $1.38. If paid, this would equate to a grossed-up dividend yield of 8.2%.

So, investors can still gain Westpac shares for a relatively low earnings multiple and a good dividend yield.

Of the analysts that Commsec cover, nine of them rate it as a buy, while four consider it a hold and four rate it as a sell.

The investment bank Goldman Sachs is among the brokers that rate the ASX bank share as a buy, with a price target of $27.68, according to Commsec. That suggests it could rise another 15% over the next year.

Foolish takeaway

Share prices often follow earnings over time. In other words, if Westpac shares are able to generate more profit, then this could drive shareholder returns for investors.

However, on the horizon, there is a concern about how much the higher interest rates will lead to higher arrears. I’m inclined to think that bad debts are going to rise by the end of 2023.

The post Up 20% in 6 months, is the Westpac share price now fully valued? appeared first on The Motley Fool Australia.

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More reading

• Broker forecasts CBA share price to slide 15%
• 5 things to watch on the ASX 200 on Monday
• The ASX 200 shares with a multi-billion-dollar tailwind
• Buy ANZ shares now for 19% upside AND generous dividend income: broker
• 3 ASX 200 shares I own for big dividends in 2023

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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 S&P/ASX 200 Index (ASX: XJO) kicked off the week strong, leaping 0.82% on Monday to close at 7,388.2 points.

That was despite a lacklustre performance from mining shares. The S&P/ASX 200 Materials Index (ASX: XMJ) lifted just 0.2% today as lithium stocks and iron ore giants weighed on the sector.

The S&P/ASX 200 Information Technology Index (ASX: XIJ), on the other hand, led the market’s gains, lifting 1.8%.

It was also a good day to be invested in ASX 200 bank shares. Shares in the big four banks rose between 0.7% and 1.6% on Monday after many of their New York-listed peers leapt on quarterly earnings on Friday.

Finally, the S&P/ASX 200 Energy Index (ASX: XEJ) rose 1.5% on Monday following a strong Friday session for oil prices.

So, with all that in mind, let’s take a look at the 10 shares taking out today’s top spots on the ASX 200.

Top 10 ASX 200 shares countdown

Today’s top-performing ASX 200 share was none other than Super Retail Group Ltd (ASX: SUL). Shares in the retailer jumped 7.7% to close at 12.34.

The company provided a glimpse into its record first half this morning, with revenue for the period expected to come in at close to $2 billion.

These shares made today’s biggest gains:

ASX-listed company	Share price	Price change
Super Retail Group Ltd (ASX: SUL)	$12.34	7.68%
Megaport Ltd (ASX: MP1)	$7.35	7.46%
Imugene Limited (ASX: IMU)	$0.17	6.25%
New Hope Corporation Limited (ASX: NHC)	$6.52	4.82%
Xero Limited (ASX: XRO)	$74.31	4.56%
Netwealth Group Ltd (ASX: NWL)	$13.73	4.17%
WiseTech Global Ltd (ASX: WTC)	$53.99	4.01%
Domain Holdings Australia Ltd (ASX: DHG)	$3.12	4%
Novonix Ltd (ASX: NVX)	$1.82	4%
Seek Ltd (ASX: SEK)	$24.08	3.79%

Our top 10 shares countdown is a recurring end-of-day summary to let you know which companies were making big moves on the day. Check in at Fool.com.au after the weekday market closes to see which stocks make the countdown.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Monday
• BHP share price hits milestone $50 mark on Monday
• This ASX 200 retail share is booming 10% on an ‘outstanding first-half result’
• Guess which ASX All Ords tech share is soaring 8% on boosted forecast earnings
• Attention income investors! These 7 ASX 200 dividend shares are projecting yields of 7%+ in FY24

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 Megaport, Netwealth Group, Super Retail Group, WiseTech Global, and Xero. The Motley Fool Australia has positions in and has recommended Netwealth Group, Super Retail Group, WiseTech Global, and Xero. The Motley Fool Australia has recommended Megaport and Seek. 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 back in the green on Monday, helped along by shares in these four companies.

They’re each starting the week off on the right foot, soaring more than 10% today.

Meanwhile, the All Ordinaries Index is up 0.77%, trading at 7,598.3 points.

So, what’s driving the All Ords stocks higher today? Let’s take a look.

4 ASX All Ordinaries shares leaping more than 10% today

Leading the All Ordinaries today is lithium share Ioneer Ltd (ASX: INR). It’s launching 20.22% right now to trade at 54.7 cents a share.

The stock’s gains come amid news the company has been offered a US$700 million loan from the United States Department of Energy to help fund the development of its Rhyolite Ridge lithium-boron project in the US state of Nevada.

The project is expected to strengthen the United States’ critical mineral supply chain.

Joining the All Ordinaries lithium share in the green today is stock in Kogan.com Ltd (ASX: KGN). Shares in Kogan are up 12.9% right now, swapping hands for $4.55 apiece.

That’s despite no news having been released by the online retailer. In fact, there’s been no word from the company since CEO Ruslan Kogan said it’s on track to return to its “historic growth trajectory and profitability” in November.

The Bigtincan Holdings Ltd (ASX: BTH) share price is also bolstering the All Ordinaries Index today. It’s rising 13.59% to trade at 58.5 cents a share.

The artificial intelligence-powered software provider revealed its annual recurring revenue (ARR) surpassed $130 million in the first half of financial year 2023.

And with that, the tech stock remains on track to reach its full-year guidance of $137 million to $143 million of ARR, between $123 million and $128 million of revenue, and positive cash flow and adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA).

The final All Ordinaries share soaring more than 10% today is former market favourite Zip Co Ltd (ASX: ZIP). Shares in the buy now, pay later (BNPL) provider are gaining 10.25% right now to trade at 67.25 cents apiece.

Like Kogan before it, there’s been no word from the company to explain today’s gains. Though, it’s been on a roll so far this year. The stock has jumped 33% since the final close of 2022.

The post 4 ASX All Ordinaries shares surging over 10% on Monday appeared first on The Motley Fool Australia.

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More reading

• 3 ASX mining shares going gangbusters on Monday
• Here are the 10 most shorted ASX shares
• Guess which ASX lithium share just rocketed 27% on a $1 billion US Government loan
• Why has the Zip share price already bolted 21% higher in 2023?
• Here are the 10 most shorted ASX shares

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 Bigtincan, Kogan.com, and Zip Co. The Motley Fool Australia has positions in and has recommended Bigtincan and Kogan.com. 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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Ths S&P/ASX 200 Index (ASX: XJO)’s recent run of good form looks like it is set to continue this week. So far this Monday, the ASX 200 has gained another 0.86%, putting it within reach of 7,400 points. But the BHP Group Ltd (ASX: BHP) share price had an even better morning.

The use of the past tense is deliberate. BHP shares soared upon market open this morning, climbing to the psychologically significant $50 mark for the first time in the miner’s very long history:

It seems investors want to take this new high slowly though, with BHP only just touching the $50.00 mark, which is now the company’s rather neat new all-time record high.

But the good times didn’t end up rolling for long. At present, BHP shares have retreated from those highs and have slipped into red territory, with the miner now well under $50 at $49.54 a share.

So why did investors push BHP shares to a new record high today?

Why did the BHP share price hit a $50 new record high?

Well, it’s probably due to a couple of factors. The first is the reopening of China. The Chinese Communist Party has spent the past few months pulling off a stunning about-face on its previous and strict ‘zero-COVID’ policies.

The country now seems to be embracing a new ‘living with COVID’ policy of opening up after years of strict lockdowns and shutdowns designed to stop the spread of COVID infections.

Investors are betting that a reopened China will see the country’s economy boom. BHP is a major exporter to China. As such, this is probably partly behind the renewed optimism we have seen with BHP shares of late.

Secondly, the iron ore price itself has been on a tear lately. The base metal is currently comfortably back over US$120 a tonne after dipping as low as US$80 last year. Iron ore is BHP’s largest source of revenue, so higher prices are obviously good news for the miner.

So it’s likely that the new highs we have seen for the BHP share price today can be put down to a combination of these factors. No doubt BHP’s investors will be delighted with what the ASX brought them today.

The post BHP share price hits milestone $50 mark on Monday appeared first on The Motley Fool Australia.

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More reading

• Guess which ASX All Ords tech share is soaring 8% on boosted forecast earnings
• Attention income investors! These 7 ASX 200 dividend shares are projecting yields of 7%+ in FY24
• Broker forecasts CBA share price to slide 15%
• Bought $1,000 of IAG shares 10 years ago? Here’s how much dividend income you’ve pocketed
• Are ASX 200 retail shares on sale in 2023?

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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ASX 200 lithium shares are having a tough run on the market today.

Lithium shares in the red today include:

• Core Lithium Ltd (ASX: CXO), plunging 5%
• Sayona Mining Limited (ASX: SYA), sliding 1.3%
• Liontown Resources Ltd (ASX: LTR), down 4%
• Allkem Ltd (ASX: AKE), falling 0.2%

However, the Pilbara Minerals Ltd (ASX: PLS) share price is bucking the trend today, up 1.25% after falling 1% into the red in earlier trade. For perspective, the S&P/ASX 200 (ASX: XJO) is climbing 0.76% today.

What’s going on?

Lithium demand sentiment could be weighing on ASX 200 lithium shares. Lithium is an essential component of Electric vehicle (EV) batteries.

The lithium hydroxide price has fallen 0.73% to US$81,300 on the London Metal Exchange. Meanwhile, lithium carbonate has slid 0.44% to CNY 447,500.

Meanwhile, news emerged on Friday that Tesla Inc (NASDAQ: TSLA) had cut the prices on the majority of its electric cars. As my Foolish colleague Mitch reported, the major price changes could signal EV demand may be less than previously forecast.

However, this move will mean more of Tesla’s vehicles will be eligible for a US federal tax credit, The New York Times reported. Tesla also slashed EV prices by up to 13% in China last week, the Verge reported.

Lithium giant Sociedad Quimica y Minera de Chile (NYSE: SQM) fell 1.58% on the New York Stock Exchange on Friday, while Albermarle Corporation (NYSE: ALB) shares slid 0.4%. Meanwhile, a recent broker downgrade could be continuing to weigh on Core Lithium shares today. Goldman Sachs placed a “sell” rating on the Core Lithium share price with a 95 cent price target. Analysts are concerned Core Lithium “looks relatively expensive” versus peers and raised concerns about the company’s Finniss project. Goldman said:

We see production risk as the Finniss project moves through ramp up on project complexity (moving between different open pits and underground configurations), and the required exploration/resource upside to support capacity expansion/life extension currently priced into the stock looks significant.

Share price snapshot

The Core Lithium share price climbed 19% in the last year.

The Allkem share price has risen nearly 9% in the past 52 weeks.

Liontown Resources shares have slid 13% in the past year.

Pilbara Minerals shares have jumped 8% in the last year.

Sayona Mining shares have soared 50% in the last year.

The post Why are ASX 200 lithium shares struggling on Monday? appeared first on The Motley Fool Australia.

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More reading

• Why is the Core Lithium share price tumbling 6% on Monday?
• Here are the 10 most shorted ASX shares
• Which ASX lithium shares are forecasting to pay dividends in 2023?
• 2 ASX 200 mining shares to buy as China reopens: analysts
• Own ASX lithium shares? Here’s the latest lithium price forecast

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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Just days after the Fortescue Metals Group Limited (ASX: FMG) share price cracked a new 52-week high, the stock is plummeting to come in as one of the S&P/ASX 200 Index (ASX: XJO)’s worst performers.

The Fortescue share price is down 2.68% at the time of writing, trading at $22.19 – 4% lower than the 12-month high it reached in Friday’s session.

For comparison, the ASX 200 is enjoying a day in the green. It’s up 0.77% right now while the S&P/ASX 200 Materials Index (ASX: XMJ) is nearly flat, rising 0.06%.

So, what’s going so wrong for the iron ore giant on Monday? Let’s take a look.

Fortescue share price tumbles on Monday

The Fortescue share price is tumbling into the week amid news China has vowed to crack down on illegal activity capable of driving up iron ore prices, the Sydney Morning Herald reports.

Such activities include “fabricating and disseminating information on price increases, hoarding and price gouging”, the nation’s National Development and Reform Commission said, via the publication.

It comes as the price of the steel-making ingredient hit a seven-month high of more than US$122 a tonne on Friday – a 4.9% week-on-week increase.

The material’s rising value was likely partially driven by China’s reopening and moves to bolster the nation’s real estate sector.

The Fortescue share price is far from alone in the red on Monday. Here’s how some of the market’s other iron ore favourites are performing:

• The BHP Group Ltd (ASX: BHP) share price is down 0.18% right now, trading at $49.55
• The Rio Tinto Limited (ASX: RIO) share price is also down 0.44% at $121.75

Shareholders reportedly concerned about Fortescue governance

Meanwhile, Fortescue founder and executive chair Dr Andrew Forrest is back in the headlines this week, with the Australian Financial Review reporting some of the company’s major shareholders are concerned about its governance amid an exodus trend among its executives.

Chief financial officer Ian Wells was the latest leader to announce his departure from the company, resigning last week.

Its rotating door of leaders has reportedly left shareholders uneasy about Forrest’s control over the company. As well as serving as executive chair, the billionaire has a 30% stake in the ASX 200 iron ore giant.

The publication also alleges that non-executive director and former Olympian Lord Sebastian Coe, who indirectly bought $98,621 worth of the company’s stock last month, did so amid pressure from investors. Shareholders were quoted as pushing Forrest to ensure Coe had “skin in the game”.

The post Why is the Fortescue share price being hammered on Monday? appeared first on The Motley Fool Australia.

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More reading

• Why did Fortescue shares just crack a new, 52-week high?
• Goldman tips Fortescue share price to crash 42%
• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today
• Fortescue’s Twiggy Forrest is in the wars this week. Here’s why

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

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As an ASX 200 blue chip, many ASX dividend investors own Wesfarmers Ltd (ASX: WES) shares for income. Over the past few years, this would have proven rather successful.  

After a big hit to its shareholder payouts in 2020 (thanks to the pandemic), Wesfarmers has been steadily bringing back its dividends since. In 2021, the company doled out payments worth $1.78 per share, up from $1.70 in 2020. And last year, the company upped them to $1.80 per share.

But is Wesfarmers really a safe ASX share to buy for income?

What makes an ASX 200 share ‘safe’?

Well, let’s clear this up right away. No ASX share is truly ‘safe’ from an income perspective. Regardless of its history, no company is under any sort of obligation to pay out dividends. And if a company doesn’t have enough cash to comfortably afford a dividend, paying out one could even inflict long-term damage.

Saying that, we usually find that top-quality companies can consistently afford to pay out rising dividends to investors over time. So is Wesfarmers one of those gems?

Well, it certainly has been. Wesfarmers has paid out fairly consistent dividends for decades. Despite the ravages of the pandemic, the company still forked out a decent, if trimmed dividend in 2020.

Wesfarmers is a company with fingers in many pies. It owns the dominant retailers Kmart, OfficeWorks and Bunnings, as well as dozens of other businesses outside the retail sector. These include mines, clothing, chemicals and fertilisers, amongst others.

However, Bunnings is still Wesfarmers’ primary breadwinner, contributing more than 60% of the company’s total earnings before tax in FY2022.   

Although its many businesses give the company a somewhat diversified earnings base from which to draw dividends, the lion’s share still comes from Bunnings alone. If Bunnings’ profits hit the skids, it’s likely that Wesfarmers’ dividends would too.

Are Wesfarmers’ dividends maxed out?

Additionally, Wesfarmers’ finances are starting to look a little stretched by its current dividend policy. The company reported a total of $2.08 in earnings per share (EPS) over FY2022. Of that $2.08, the company paid out $1.80 in dividends per share, which is a payout ratio of 86.54%.

That doesn’t leave a lot of wiggle room to keep its dividends at the current levels if the company does experience a future drop in earnings.

So all in all, Wesfarmers can be described as a solid dividend payer on the ASX 200 today. However, I would not describe it as safe, or even approaching safe. If we see a recession this year, there’s a real chance Wesfarmers could be forced to trim its dividends.

But that doesn’t mean Wesfarmers is a bad investment. Many companies cut back on dividends when their profits go through a downturn, which is arguably the prudent thing to do. And Wesfarmers has delivered some pretty impressive returns over its long history as an ASX share:

If you want truly safe income, a savings account or term deposit is the right place to look, not the share market.

At the current Wesfarmers share price, this ASX 200 blue chip has a trailing dividend yield of 3.69%.

The post Is Wesfarmers a ‘safe’ ASX 200 share to buy for dividends? appeared first on The Motley Fool Australia.

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• Why have ASX investors been buying Wesfarmers shares to hold?

Motley Fool contributor Sebastian Bowen has positions in Wesfarmers. 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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I think there are a number of All Ordinaries (ASX: XAO), or All Ords, shares that have fallen heavily over the past year that now seem very interesting.

In my opinion, there are some names that could see a good turnaround this year after a tough time in 2022.

When something drops, it only needs to recover some of its lost ground to make a big return. For example, if something drops 50% from $100 to $50. Just rising to $75 would be a capital growth of 50%.

With the growth outlook for the below three ASX All Ords shares looking promising, I’m watching these three closely.

Adore Beauty Group Ltd (ASX: ABY)

Adore Beauty is a leading online retailer of beauty products. The business saw a big bump in demand during the COVID-19 period. But, I think there is a longer-term trend of shopping going digital, with younger generations more confident about e-commerce.

Over the past year, the Adore Beauty share price has fallen more than 70% as the company has found it difficult to outperform its recent success. However, I believe that the ASX All Ords share may have been oversold considering its long-term growth outlook.

I like some of the things I’m seeing from the business – growth of returning customers, slow-but-steady gross profit margin improvement, and the launch of owned brands.

The first month of Viviology, Adore Beauty’s first skincare brand, saw sales “well exceed” internal expectations.

Over the next 12 months and five years, I think the Adore Beauty share price can outperform the market, particularly if the annual revenue per active customer keeps rising and profit margins improve thanks to scale benefits.

Australian Ethical Investment Ltd (ASX: AEF)

Australian Ethical is a growing fund manager that focuses on providing investment options – both managed funds and superannuation – for investors seeking much more focus on the ethics and sustainability of the businesses being invested in on their behalf.

This is proving to be popular because the company is seeing healthy inflows every quarter. In the two months to November 2022, the company saw $120 million of net inflows.

The All Ords ASX share also recently saw Christian Super funds join Australian Ethical, which added another $1.93 billion and 28,000 members to the business. Australian Ethical has reduced its fees so that new and existing members benefit from increased competitiveness of its super options.

The net inflows and Christian Super addition combined saw the company’s funds under management (FUM) rise 39% from 30 September 2022. But, the Australian Ethical share price is down almost 60% over the past year.

I think a rebound of the share market could be very useful for the company’s FUM and profitability.

Healthia Ltd (ASX: HLA)

Healthia is described as an integrated allied healthcare organisation that includes networks of optometry, podiatry, and physiotherapy clinics.

The Healthia share price has fallen around 40% over the past year.

It’s working on a number of goals. The company has been making acquisitions to grow its scale. It currently has a market share of around 3%, but it wants to be able to easily reach 50% of Australian and New Zealanders.

Research and development, and improving quality, are two other areas of focus. For example, it wants to co-locate complementary allied health services inside its existing footprint, as well as offering new services in existing clinics, such as retinal scanners in its optical stores.

The ASX All Ords share is expecting same clinic revenue growth of between 3% to 6% year over year. I think this will be a good tailwind for earnings, combined with increasing scale.

According to Commsec, it’s valued at just 11 times FY23’s estimated earnings.

The post 3 ASX All Ords shares I’m watching like a hawk in January 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

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 positions in and has recommended Australian Ethical Investment and Healthia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group. The Motley Fool Australia has recommended Adore Beauty Group, Australian Ethical Investment, and Healthia. 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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