Tag: Motley Fool

CSL Limited (ASX: CSL) shares have been having a rough time in recent weeks.

Despite pushing higher today, the biotherapeutics giant’s shares are still down 5% since this time last month.

As a comparison, the S&P/ASX 200 Index (ASX: XJO) has risen approximately 1.5% over the same period.

Should you buy CSL shares?

The team at Citi appear to believe that CSL shares are trading at an attractive level.

According to a recent note, the broker has a buy rating and $340.00 price target on the company’s shares.

Based on where its shares are trading at today, this implies potential upside of over 22% for investors over the next 12 months.

Citi is also expecting a modest 1.4% dividend yield in FY 2023, stretching the total potential return to almost 24%.

Why buy shares?

Citi is positive on CSL due to the improved trading conditions in the plasma industry. The broker explained this in a note last year following the release of updates from its rivals. It said:

Results from Grifols (June HY) and Takeda (June Q) show continued improvement overall in the operating environment for the plasma industry – this is as we anticipated and supportive of our CSL forecasts. The key points from the results were: 1) Demand is very strong, and prices are up mid-single digit, showcasing the pricing power of plasma companies; 2) Plasma collections are now well above pre-covid levels; 3) Plasma donor fees are coming down, helping margins.

The broker has since commented on the acquisition of Vifor Pharma, which completed last year. It commented:

The inaugural Vifor investor day was largely as anticipated. CSL gave investors a better appreciation for the rationale behind the deal: Vifor has the most extensive suite of products available in a large underpenetrated market, with a limited number of competitors, and unique industry partnerships.

All in all, its analysts are expecting the company to grow its earnings per share by 20% in FY 2023, then 23% in FY 2024, and 15.9% in FY 2025. This means CSL shares are changing hands at just 24x FY 2025 earnings, which Citi appears to believe makes them great value today.

The post Want 20% upside in 2023? Citi says buy CSL shares appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Bought $1,000 of CSL shares 10 years ago? Here’s how much dividend income you’ve received
• How different is the Vanguard Australian Shares Index ETF (VAS) now compared to a year ago?
• Are healthy returns on the horizon for ASX 200 healthcare shares in 2023?
• I’d listen to Warren Buffett and invest in ASX shares with wide economic moats
• Build a strong portfolio in 2023 with these ASX 200 blue chip shares: experts

Motley Fool contributor James Mickleboro has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. 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.

from The Motley Fool Australia https://ift.tt/nlIZJse

The Woodside Energy Group Ltd (ASX: WDS) share price was one of the best-performing ASX 200 blue chip shares in 2022. Over the year just passed, Woodside shares went from $21.93 to $35.44. That’s a rise worth an extraordinary 61.61%.

Throw in Woodside’s record dividend payments worth $4.66 per share, and we have one heck of a lucrative investment.

That’s even more impressive considering the S&P/ASX 200 Index (ASX: XJO) went backwards by 5.5% last year.

But those returns are now in the past and are of little use to investors today. So what might 2023 bring for Woodside shares?

Well, 2022’s stellar returns had a lot to do with fortunate timing. Last year, Woodside finalised a mega-merger with the energy division of BHP Group Ltd (ASX: BHP). This saw BHP investors issued additional Woodside shares when the company took over BHP’s old energy assets.

The timing turned out to be excellent for investors, with this merger coinciding with rocketing energy prices. These were primarily caused by the war in Ukraine and high global inflation last year. Just take a look at the Woodside share price below for a visual representation of this:

So the most important factor for Woodside shares in 2023 will continue to be the price of crude oil.

But time now to see what some ASX experts reckon about all of this.

ASX experts rate Woodside shares

As my Fool colleague shared earlier this month, one expert who remains bullish on oil is hedge fund trader Pierre Andurand of Bloomberg.

Andurand predicts that global oil demand could rise by 4 million barrels in 2023 if the world fully emerges from COVID restrictions, possibly leading to an oil price as high as US$140 per barrel. That would be almost double the current price of US$75 per barrel for WTI crude.

But Bloomberg isn’t the only expert bullish on oil. As we covered earlier this month, ASX broker AllianceBernstein lifted its 12-month share price target for Woodside shares to $46. If that occurs, it will result in a potential upside of more than 27% from where the shares are today.

This is due to a belief that Woodside can benefit from “a potential spike in gas prices on lower Russian gas exports to Europe and a recovery of oil prices on a China reopening“.

So more than one ASX expert reckons there are more good things to come for Woodside shares and their investors. But let’s wait and see what 2023 has in store for this ASX 200 energy giant.

The post Can Woodside shares keep delivering stellar gains in 2023? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 5 ASX 200 shares smashing new, 52-week highs on Thursday
• Oil best China reopening play: Goldman Sachs
• Here’s why 2023 will be a huge year for passive income
• 2022 was brutal for Lynas shares. What will this year bring?
• Forget gold! I’d invest in ASX 200 shares to build a retirement portfolio

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.

from The Motley Fool Australia https://ift.tt/9eahGkU

Michael O’Neill of Investors Mutual reckons it’s “time to double down” on ASX dividend shares because lower capital growth is likely not just this year but over the next decade.

Amid global recession forecasts for 2023, it’s best for investors to look for income opportunities with good quality stocks that are worth holding over the long term, he says.

This is a better strategy than trying to buy shares at their bottom in the hope of capital gains.

In an article published on the Investors Mutual website, O’Neill says:

…it’s incredibly difficult to time the market – so you’re usually better off not trying.

Dividends are always important, right now they’re critical. … in times like these … it’s best to minimise your risks and invest your money where you have the best chance of healthy returns.

For us that means buying and holding shares in quality industrial companies, at attractive valuations, that pay strong dividend yields.

Why will ASX 300 share price gains be lower?

O’Neill explains:

Capital growth in the next decade is likely to be lower than the last decade.

Ultra-low interest rates and readily available, cheap, money drove a very long bull market. With high inflation and rising rates, that time has passed.

While markets may, or may not, perform well in 2023, what is very unlikely is that we’ll enter another long bull market with a similar amount of capital growth.

Dividends ‘remarkably reliable’

O’Neill says dividends are particularly important now because they provide more reliable returns than capital gains [and] can act as a safety net during a volatile market.

O’Neill says data from 1998 to 2021 inclusive shows ASX dividend shares provided 51% of overall returns from the S&P/ASX 300 Index (ASX: XKO).

While outperforming capital growth only slightly, annual dividend returns were vastly more stable.

He said:

… the return on capital fluctuates significantly, but dividend returns are remarkably reliable…

[Dividends are] generally a reflection of the company’s overall profitability – its financial performance.

So, in periods where the overall sharemarket goes down, an investor’s dividends should stay much the same if they have a diversified portfolio made up of quality companies.

Which ASX dividend shares are the best buys?

The upside of a volatile market is “a great chance to pick up high-quality companies at bargain prices”.

In a high-inflation environment, O’Neill says stocks with pricing power and rational, low-risk strategic management are good options.

His ASX 300 dividend shares picks include Suncorp Group Ltd (ASX: SUN). The insurance giant is trading on a forward price-to-earnings (P/E) ratio of 12.1 times FY24 earnings (as at 14 December 2022). Its forecast dividend yield for FY24 is 6.8%.

He also likes explosives company Orica Ltd (ASX: ORI) on an FY24 P/E of 16.1 times and a dividend yield of 3.4%.

Businesses that sell essential products and services are also good inflation hedges. O’Neill tips IGA shopping chain owner, Metcash Limited (ASX: MTS) at an FY24 P/E of 11.9 times and a dividend yield of 5.9%.

Companies that can put well-structured contracts in place, ideally with adjustments for inflation, are also good options. Examples include railway owner, Aurizon Holdings Ltd (ASX: AZJ). It has an FY24 P/E of 12.3 times and a dividend yield of 7.3%.

He recommends avoiding overweight positions in commercial property, resources, and other cyclicals.

The post Why ASX dividend shares are so ‘critical’ right now: fundie appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• When it comes to ASX 200 dividend shares, is boring better?
• How to minimise risk using ASX 300 dividend shares: fundie
• The 3 ASX 200 bank shares that outperformed all others in 2022
• Top ASX shares to buy in January 2023
• ASX financial shares lifted the ASX 200 today

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

from The Motley Fool Australia https://ift.tt/hznOc4i

S&P/ASX 200 Index (ASX: XJO) oil shares could be worth watching amid China’s reopening, according to Goldman Sachs global head of commodities research Jeff Currie.

The expert tipped the black liquid to climb to trade at US$110 a barrel by the third quarter of 2023 if international travel takes off in the nation, as per Bloomberg TV.

Of course, that would likely be good news for ASX 200 oil shares such as Woodside Energy Ltd (ASX: WDS), Beach Energy Ltd (ASX: BPT), and Santos Ltd (ASX: STO).

Their bottom lines typically hinge on the energy commodity’s value, with surges in the oil price pushing earnings sky-high in 2022.

Let’s take a closer look at why Currie dubbed oil “the true reopening play”.

Tailwinds for oil price as China reopens

The oil price could rebound to near-2022 highs this year as China relaxes COVID-19 restrictions and reopens its borders, as announced late last year.

In fact, Currie expects oil’s value to leap more than 30% from around US$82.67 as of Wednesday’s close.

Jeff Currie, global head of commodities at Goldman Sachs, discusses the impact of the the return of demand from China on oil and copper prices. He speaks on “Bloomberg Markets” https://t.co/91sJ6MxsE4 pic.twitter.com/npMuowcYMN

— Bloomberg TV (@BloombergTV) January 11, 2023

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

The expert believes oil could reach U$90 a barrel this quarter. It could then increase to US$95 in the June quarter as “the reopening gains momentum”.

Throw a premium due to the reopening’s speed and international air travel returning to China on top, and “you’re up to U$110 by [the] third quarter”, Currie said.

And he’s not alone in his bullishness. Indeed, it’s surpassed by that of hedge fund trader Pierre Andurand, my Fool colleague James reported earlier this week.

Andurand is said to believe the price of oil could surpass US$140 a barrel this year. Similarly to Currie, Andurand’s forecast relies on Asia’s reopening and is conditional on no new lockdowns.

That could lead demand to increase by 4 million barrels this year, according to the trader.

No doubt, all eyes will be on ASX 200 oil shares if such forecasts come to fruition.

The post Oil best China reopening play: Goldman Sachs appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 5 ASX 200 shares smashing new, 52-week highs on Thursday
• Here’s why 2023 will be a huge year for passive income
• 2022 was brutal for Lynas shares. What will this year bring?
• Forget gold! I’d invest in ASX 200 shares to build a retirement portfolio
• Expert reveals best time to buy shares in 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 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.

from The Motley Fool Australia https://ift.tt/IlbZa3L

It’s looking like yet another positive day for ASX shares and the S&P/ASX 200 Index (ASX: XJO) so far this Thursday. At present, the ASX 200 is up another 1.16%, putting the index at just under 7,280 points.

But it’s been an even more exciting day for more than a few ASX 200 shares. So let’s discuss five such shares that have just hit new 52-week highs this session.

BHP amongst ASX 200 shares smashing new highs today

First up is BHP Group Ltd (ASX: BHP). BHP shares hit a new record high just yesterday. But clearly, investors weren’t done with showering the ASX 200’s largest company with glory.

BHP has again climbed to fresh new highs today, hitting $49.50 just after midday. Investors probably have soaring iron ore prices to thank for this optimism.

Another ASX 200 resources share in Northern Star Resources Ltd (ASX: NST). This gold miner has been on fire lately, thanks largely to rising precious metal prices, and is up an extraordinary 70% or so since late September.

Today, Northern Star shares hit a new 52-week high of $12.13 just before midday.

A change of pace now, let’s look at Lifestyle Communities Ltd (ASX: LIC). This residential property company has also had a fantastic couple of months, increasing its value by a third since September. That trend continues this Thursday, with Lifestyle Communities shares hitting a new 52-week high of $20.19 a share.

ASX travel shares soar

ASX 200 travel shares are having a dream run today as well. And one of the obvious winners is the Webjet Limited (ASX: WEB) share price. Webjet shares are booming today and hit a new 52-week high of $6.59 each this afternoon.

The company still has a long way to go before it reaches its pre-COVID highs in the $9 to $10 range. But today’s new high is still a big moment for Webjet, which is now more than 160% above its 2020 lows of around $2.50 a share.

Another ASX 200 travel share flying high today is Qantas Airways Limited (ASX: QAN). Qantas shares soared to a new high watermark of $6.45 each this morning – a new post-COVID high for the national carrier.

Again, Qantas isn’t quite back to its pre-COVID levels of over $7 a share, but this is still a big win for investors. Perhaps investor optimism over the reopening of China is at play with both Qantas and Webjet right now.

The post 5 ASX 200 shares smashing new, 52-week highs on Thursday appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Here’s why 2023 will be a huge year for passive income
• 2022 was brutal for Lynas shares. What will this year bring?
• Forget gold! I’d invest in ASX 200 shares to build a retirement portfolio
• Expert reveals best time to buy shares in 2023
• 5 things to watch on the ASX 200 on Thursday

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.

from The Motley Fool Australia https://ift.tt/YlkyRVu

Arafura Rare Earths Ltd (ASX: ARU) shares more than doubled in 2022, but can this top run continue?

The Arafura share price soared 121% from 21 cents to 46 cents apiece between the market close on 31 December 2021 and the end of trading on 30 December 2022.

Today, Arafura shares are trading 0.48% higher at 52.8 cents at the time of writing.

Let’s take a closer look at how 2022 played out for the mineral exploration company and the outlook for 2023.

What happened in 2022?

The company’s upward trajectory last year had a few bumpy patches along the way, as the graph below shows.

Arafura shares soared a hefty 153% between late February and early June, then lost 42% of those gains in the following months to mid-October.

In another big bounce, Arafura shares then surged 68% between market close on 14 October and 30 December.

Arafura is developing the rare earths Nolans Project in the Northern Territory.

Highlights in 2022 included the company signing a non-binding MOU with Hyundai in May for the sale of NdPr oxide from the Nolans Project.

In August, Arafura received firm commitments from investors for a $41.5 million capital raise for the project.

On 7 November, Arafura signed a binding offtake agreement with Hyundai and Kia to supply NdPr from the Nolans Project for a seven-year term. Also in November, the company received mining authorisation from the Northern Territory Government for the project.

Arafura managing director Gavin Lockyer said:

This approval, following the recent Hyundai/Kia Offtake Agreement and Project Update, adds to the momentum that should allow Arafura to commence procurement and construction, with FID expected to occur in early 2023

In December, Arafura received more firm commitments from investors for a $121 million capital raise to fast-track development at the Nolans Project. This included $6o million from Gina Rinehart’s Hancock Prospecting.

What’s ahead?

The demand for rare earths and news out of the company’s Nolans Project may be the major influences on Arafura’s performance in 2023.

Analysts at Bell Potter have placed a speculative buy rating on the Arafura share price with a 64-cent price target. The broker said it was anticipated the project would “feed potentially 8% of global supply directly into the permanent magnet market servicing expansion of electric vehicles and wind turbines”.

Meanwhile, Future Market Insights is tipping the rare earths market to grow to 10.1% compound annual growth rate between 2022 and 2033. Analysts said:

The surging demand for rare earth metals can be ascribed to the increase in the sales of consumer electronics.

Furthermore, growth in the sales of electric vehicles is also expected to surge the demand for rare earth metals during the forecast period.

Arafura share price snapshot

The Arafura share price has raced ahead, surging more than 136% in the last 52 weeks. In the last month alone, Arafura shares have soared 21%.

Arafura has a market capitalisation of around $1.06 billion based on the current share price.

The post The Arafura share price exploded 120% in 2022. What now? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Arafura share price hits 10-year high then crashes 10%! What’s going on?
• 23 ASX shares to buy in 2023 – brokers
• Arafura Rare Earths share price rebounds strongly after dumping 17% in 5 days
• Why Argosy Minerals, Arafura, Deep Yellow, and Pro Medicus shares are charging higher
• Why did the Arafura Rare Earths share price dive 9% on Tuesday?

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.

from The Motley Fool Australia https://ift.tt/6KHys3g

In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is charging higher again. At the time of writing, the benchmark index is up 1.15% to 7,278.8 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are dropping:

Gold Road Resources Ltd (ASX: GOR)

The Gold Road share price is down over 3% to $1.78. This follows the release of the gold miner’s production update this morning. Gold Road revealed that its Gruyere operation delivered annual production of 314,647 ounces. This means the company only achieved the low end of its annual guidance range of 300,000 ounces to 340,000 ounces.

MA Financial Group Ltd (ASX: MAF)

The MA Financial share price is down almost 9% to $4.52. Investors have been selling this diversified financial services company’s shares following the release of a profit update. The company, formerly known as Moelis, advised that it expects to report underlying earnings per share growth of 28% to 30% in FY 2022. While this is strong, it has fallen short of its prior guidance of 30% to 40% growth. Management blamed this on delays in completing multiple corporate advisory transactions.

Mayne Pharma Group Ltd (ASX: MYX)

The Mayne Pharma share price is down 5.5% to 21.7 cents. This morning, the specialty pharmaceuticals company announced that it would be delaying its impending $65.5 million capital return by at least two months. It also warned that it reserves the right to further defer, reduce, or cancel the capital return.

Westgold Resources Ltd (ASX: WGX)

The Westgold share price is down over 4% to $1.09. This morning, Macquarie downgraded this gold miner’s shares to a neutral rating with a $1.10 price target. The broker made the move largely on valuation grounds after some strong gains in recent weeks.

The post Why Gold Road, MA Financial, Mayne Pharma, and Westgold shares are dropping today appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why Allkem, Pilbara Minerals, Talga, and Westgold shares are storming higher today
• The gold price is trading at 8-month highs. What’s next in 2023?
• Mineral mania: 5 ASX 200 mining shares smashing new highs on Monday
• Here are the top 10 ASX 200 shares today
• Here are the top 10 ASX 200 shares today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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.

from The Motley Fool Australia https://ift.tt/HAT5e9P

2022 ended up being a pretty decent year for ASX share investors seeking passive income. Dividends from shares are a great way to start an alternative income stream.

Dividends are passive income in the truest sense of the word. The cash keeps flowing as long as you own shares, regardless of almost anything else, apart from the size of the dividends paid out, of course.

Last year, ASX investors were blessed with an almost perfect storm when it comes to dividends. After a rough couple of years, the ASX banks all returned to fine dividend form in 2022.

Big dividends from banks and miners

All four of the bank majors upped their dividends in 2022, with National Australia Bank Ltd (ASX: NAB) the star of the show. In 2022, NAB shares doled out $1.51 per share in fully franked dividends, a good 18.9% above the $1.27 per share investors received in 2021.

The other major dividend payers on the market – ASX resources shares – also had a stellar year. High commodity prices enabled the likes of BHP Group Ltd (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG) to keep their dividends at record highs.

And ASX energy shares like Woodside Energy Group Ltd (ASX: WDS) and Whitehaven Coal Ltd (ASX: WHC) really stepped up their dividend game in 2022 as well, as soaring energy prices enabled them to fund record dividends.

So, all in all, it was a very pleasing year for ASX dividend investors last year. As a case in point, the Vanguard Australian Shares Index ETF (ASX: VAS), which is the most popular exchange-traded fund (ETF) on the ASX, paid out a dividend distribution of $6.36 per unit, its highest raw annual payout ever.

Today, that gives this ASX-wide ETF a rather impressive trailing yield of 7.07%.

But 2023 could be an even better year for passive income than 2022. This is for a few reasons.

Why 2023 might be ASX investors’ best year yet for passive income

Firstly, the rising interest rates the economy is now experiencing are good news for ASX bank shares. Rising rates enable banks to increase their net interest margins – the difference between what the banks receive for their loans (mortgages and the like) and what they pay out for deposits.

Depending on the health of the overall economy, we could see another bump in the dividends ASX banks will pay out this year.

My Fool colleague James recently discussed ASX broker Goldman Sachs’ view on NAB shares. The broker reckons NAB will be able to raise its dividends to $1.66 per share over FY2023 and up again to $1.73 per share over FY2024.

Commodity prices also look strong as we start the new year, with BHP shares recently touching an all-time record share price high after another boost in iron ore. Brokers are also expecting big dividends from BHP in 2023.

So all is looking promising for ASX dividend investors this year.

Don’t forget about cash

But there’s another new source of passive income available for investors in 2023, which wasn’t in 2022:  interest. With the Reserve Bank of Australia (RBA) raising the cash rate from 0.1% to the current 3.1% over 2022 (the steepest rise ever), investors can now return to receiving decent passive income just by having cash in the bank.

For years, cash was a non-starter, with interest rates at record lows. But the RBA’s new course has changed the game. We can now all receive real income from both our cash and our shares, which hasn’t been an option for a very long time.

Thus, 2023 might just be ASX investors’ best year yet to get a passive income stream going from our investments. So let’s see what happens.

The post Here’s why 2023 will be a huge year for passive income appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 3 ASX 200 dividend shares with HUGE passive-income potential for FY24
• 5 things to watch on the ASX 200 on Thursday
• Buy these strong blue chip ASX 200 shares now: analysts
• Why did the BHP share price just hit a new, all-time high?
• Will 2023 be a golden year for ASX 200 mining shares?

Motley Fool contributor Sebastian Bowen has positions in National Australia Bank and Vanguard Australian Shares Index ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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.

from The Motley Fool Australia https://ift.tt/PWdqSYj

When it comes to analysing ASX shares, one important aspect to dig into is financial strength.

A snapshot of a company’s financial position is found on its balance sheet. 

A quick way to get a pulse check on a company’s financial health is by looking at its net debt position. In other words, its cash reserves against how much debt it has (if any).

I like to invest in companies with cash reserves that comfortably exceed their debts. Avoiding excessive debt helps a company weather economic downturns. And those with big cash balances are rewarded with optionality, having the ability to pounce on acquisition opportunities that may arise in the market or reinvest those funds back into the business for future growth.

What’s more, balance sheets also provide insight into a company’s business model and efficiency. 

The absence of debt often points to a capital-light and self-sufficient business. In other words, the company generates enough money on its own, without needing to rely on external funding.

There are some exceptions to this. For example, ASX 200 shares like Liontown Resources Ltd (ASX: LTR), Chalice Mining Ltd (ASX: CHN), and Core Lithium (ASX: CXO) all currently boast debt-free balance sheets. 

However, these companies are pre-revenue, capital-intensive, and far from being self-sufficient. Instead of debt, they’ve been relying on equity to fund the future growth story, turning to investors to raise capital.

Debt-free ASX 200 shares

Excluding those types of companies, let’s take a look at three ASX 200 shares from different industries that don’t have any borrowings on their balance sheet.

I’ve recently profiled ASX 200 shares with enormous insider ownership, founders steering the ship, juicy gross profit margins, and mission-critical products.

So even though WiseTech Global Ltd (ASX: WTC), Altium Limited (ASX: ALU), Pro Medicus Limited (ASX: PME), and Netwealth Group Ltd (ASX: NWL) all boast debt-free balance sheets, I’ll be looking past them in favour of some new names.

Nanosonics Ltd (ASX: NAN)

First up, Nanosonics is an ASX 200 growth share involved in the business of infection prevention. Its flagship Trophon device disinfects ultrasound probes, replacing what’s primarily been a manual process in the past.

The company operates a razor and blade business model, selling hospitals its Trophon device which requires Nanosonics’ proprietary disinfectant liquid to operate.

Customers pay a bigger upfront price for the Trophon device. But Nanosonics actually makes the bulk of its revenue from the higher-margin consumables sales.

With respect to its balance sheet, Nanosonics ended FY22 with $95 million in cash and no debt. This provides the company with a strong foundation for continued investment in growth initiatives, such as global expansion and product innovation.

Nanosonics has been consistently profitable and operating cash flow positive for several years. 

ARB Corporation Limited (ASX: ARB)

Next up is ARB, the ASX 200 share behind Australia’s favourite 4×4 accessories. 

With origins dating back to 1975, ARB has grown to become the nation’s largest manufacturer and distributor of 4×4 accessories. Its strong local presence is complemented by an export network that extends through more than 100 countries across the globe.

ARB has a long track record of strong cash flow generation and profitability, going back decades. It’s reinvested this cash at high rates of return, expanding its distributor network, product offering, manufacturing facilities, and original equipment manufacturer (OEM) relationships to great effect.

ARB has been debt-free for many years. It finished FY22 with cash reserves of $53 million, ensuring the company continues to be well-placed to take advantage of investment opportunities.

ASX Ltd (ASX: ASX)

Finally, let’s take a closer look at the company that operates the Australian Securities Exchange. 

ASX Ltd is a vertically-integrated, multi-asset exchange group. It’s best known for collecting annual listing fees from companies on the ASX. But it also operates futures and options markets, and offers a range of services including trading, clearing, settlement, and market data.

The company has a debt-free balance sheet, which currently boasts $5 billion in cash. However, a lot of this money doesn’t belong to ASX. Instead, it is collateral put up by clearing participants to cover their margin obligations in the futures markets.

As a result, the company’s balance sheet isn’t as clean as a typical ASX share. This muddies the company’s other financial statements as well. But its lack of reliance on external funding is a positive sign. 

ASX Ltd last raised capital in 2013 when it launched a $550 million entitlement offer. Around half of the proceeds were used to pay down debt, and the company has been debt-free ever since.

The post 3 ASX 200 shares boasting debt-free balance sheets appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Here are the top 10 ASX 200 shares today
• 3 ASX 200 automotive shares worth buying despite headwinds: Citi
• Here are the 10 most shorted ASX shares
• 3 ASX shares I’d buy after each fell by over 30% this year
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Cathryn Goh 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 ARB Corporation, Altium, Nanosonics, Netwealth Group, Pro Medicus, and WiseTech Global. The Motley Fool Australia has positions in and has recommended Nanosonics, Netwealth Group, Pro Medicus, and WiseTech Global. The Motley Fool Australia has recommended ARB Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/z1LjMHE

In recent years, the lithium industry has been one of the most popular parts of the market in 2023.

And it isn’t hard to see why. Thanks to the electric vehicle boom, lithium prices surged to record levels last year. This has led to many ASX lithium shares generating mouth-watering returns for investors.

And while there are fears that prices could be on the way back down now, producers of the battery making ingredient are still well-placed to benefit greatly this year.

Given the sheer number of ASX lithium shares on the local market, it can be hard to keep tabs on which companies are mining the white metal and which aren’t.

Below is a summary of many of the companies already mining and some that are almost there.

Which lithium shares are already producing?

At present, there are only a small number of ASX lithium shares that are actually mining the metal.

During the first quarter, Allkem Ltd (ASX: AKE) produced 17,606 dmt of spodumene concentrate from Mt Cattlin and 3,289 tonnes of lithium carbonate from Olaroz. Management is now aiming to triple its annual production by 2026 and maintain at least a 10% market share.

IGO Ltd (ASX: IGO) recently reported quarterly spodumene production of 361,000 tonnes and lithium hydroxide production of 195,000 tonnes.

Mineral Resources Limited (ASX: MIN) produced 101,000 dry metric tonnes (dmt) of spodumene concentrate from the Mt Marion operation and 64,000 dmt from Wodgina during the first quarter.

Finally, Pilbara Minerals Ltd (ASX: PLS) produced 147,105 dmt of spodumene concentrate in the first quarter. It also recently approved the expansion of the Pilgan Plant to ultimately deliver 1Mtpa of spodumene concentrate from the combined Pilgangoora operations.

Not quite there

A special mention goes to Argosy Minerals Limited (ASX: AGY) and Core Lithium Ltd (ASX: CXO), which are on the cusp of being lithium miners.

Argosy Minerals has completed 98% of the total works required for the 2,000tpa Rincon Lithium Project, located in Salta Province, Argentina. It recently produced 1 tonne of battery quality lithium carbonate during the commissioning period.

Core Lithium’s Finniss operation in the Northern Territory is expected to be up and running later this year. Though, that didn’t stop the lithium developer from making its first shipment of 15,000 dmt of 1.4% Li2O spodumene direct shipping ore last week.

The company sold the lithium to a lithium-ion battery supply chain participant in Fangcheng, China, for a price of $US951/dmt. This valued the shipment at approximately US$14.25 million.

Coming soon

Finally, this is when some other popular ASX lithium shares are due to commence production:

Liontown Resources Limited (ASX: LTR) is targeting first lithium concentrate production in 2024 from its Western Australian operations.

US-based lithium developer Piedmont Lithium Inc (ASX: PLL) is aiming for the first half of 2023.

Sayona Mining Ltd (ASX: SYA) is targeting production during the first quarter of 2023 from its North American operations.

Germany-based Vulcan Energy Resources Ltd (ASX: VUL) is planning to construct its first commercial plant in 2024.

The post Which ASX lithium shares are producing and which are not in 2023? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why has the Core Lithium share price already surged 18% this year?
• If I buy $2,000 in Pilbara Minerals shares right now, what could my returns be in 2023?
• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Wednesday

Motley Fool contributor James Mickleboro has positions in Allkem. 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.

from The Motley Fool Australia https://ift.tt/30ot2LN