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GQG Partners Inc (ASX: GQG) shares are quickly building a reputation as a high-yielding ASX dividend share. Indeed, it could be paying a very large dividend yield by 2024.

For investors who haven’t heard of this business before, it’s a recently-listed funds management business, though it was growing for a number of years when it was unlisted.

It offers four main share investment strategies – global equity, international equity, emerging markets, and US equity.

With the GQG share price down around 25% over the past year, I think this is a great time to be looking at the company.

Dividend prediction

With a market capitalisation of more than $4 billion, it’s a large funds management business and is benefiting from increasing scale.

The ASX dividend share currently has a dividend payout ratio policy of 90% of distributable earnings. That means most of the profit that it generates is turning into passive income for shareholders.

According to the estimate on Commsec, the business could pay an annual dividend per share of 13.2 cents per share in 2024. This translates into a forward dividend yield of 9.3%.

While it’s harder to predict things further ahead, Commsec currently has a projection of 16 cents for 2025. That would be a future dividend yield of 11.3%.

Remember, GQG pays out its dividend quarterly, so investors can receive their income in pleasing regular amounts.

Why can earnings keep growing?

At 30 June 2022, the fund manager was able to report that each of its main investment strategies had outperformed over the prior 12 months, at five years, and since inception. Achieving outperformance is certainly a good way to attract more funds under management (FUM).

Indeed, the ASX dividend share continues to see pleasing fund inflows, despite the volatility in the share market. For the three months to 30 September 2022, the business saw net inflows of US$0.8 billion. It’s seeing these fund inflows across multiple geographies and major channels.

With the vast majority of the company’s revenue and earnings coming from management fees, not performance fees, GQG’s profit (and dividend) can be more resilient and consistent.

The US-based business is expanding geographically, such as its presence in both Canada and Australia. Last year, it opened offices in Brisbane and Melbourne.

GQG notes that its management is (still) the largest shareholder in GQG, meaning its team is “highly aligned with shareholders, and acutely focused on and committed to GQG’s future”.

Foolish takeaway

Dividends are not guaranteed so we can’t say for sure how much dividend income is going to be paid in the coming years. There’s a chance that it could end up paying even more than the estimates.

I think the fund manager’s investment strategy can continue to produce good returns for investors. This can be good for FUM and, therefore, good for earnings and its dividend.

The post This ASX dividend share is projected to pay a 9% yield by 2024 appeared first on The Motley Fool Australia.

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More reading

• 10 ASX shares I think are buys for 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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BHP Group Ltd (ASX: BHP) shares are among the most followed by ASX investors. BHP is the biggest business in Australia with a market capitalisation of $233 billion.

It’s significantly higher than the second largest company, Commonwealth Bank of Australia (ASX: CBA), which has a market capitalisation of $174 billion.

The last 12 months have been very volatile for the ASX mining share as commodity prices bounce around, as seen below.

How much profit could the miner make in FY23?

I’m going to focus on the profit in per share terms so that it’s in context with the BHP share price.

As a reminder, in FY22, the company’s continuing operations generated US$21.3 billion of underlying attributable profit (up 26%) and net operating cash flow of US$29.3 billion (up 13%).

The earnings per share (EPS) of continuing operations was US$4.21, up 25%.

According to Commsec, Goldman Sachs has suggested that BHP could generate EPS of US$2.48 for FY23. At the current exchange rate, that puts the BHP share price at 13 times FY23’s estimated earnings.

The business has a number of moving parts that combine for its overall profit, such as iron ore, copper, coal, and nickel.

While BHP can’t control the resource price, it decides how much resource it produces.

In the first quarter of FY23, copper production increased 9% year over year to 410.1 kt, iron ore production went up 3% year over year to 65.1 mt, metallurgical coal production declined 1% year over year to 6.7 mt, energy coal production sank 38% year over year (due to wet weather and labour shortages) to 2.6 mt, and nickel production jumped 16% year over year to 20.7 kt.

Remember, of the US$34.4 billion underlying earnings before interest and tax (EBIT) BHP made in FY22, US$6.3 billion came from copper, US$19.5 billion was from iron ore and US$8.7 billion was from coal (with US$5.7 billion of that generated by the BHP Mitsubishi Alliance, which produces metallurgical coal).

In summary, production increased in the FY23 first quarter for the divisions that generated most of the underlying profit in FY22.

Is it time to buy BHP shares?

Goldman Sachs has a neutral rating on the resources giant, with a price target of $42.90, according to Commsec. That suggests a possible fall of around 10% over the next year.

I think that investors are looking increasingly confident about the COVID situation in China. With lockdowns seemingly over and the Chinese government looking to support the property sector, it seems some of the confidence about resources is justified.

But I think it could be worthwhile for investors to wait until confidence about resources is lower, which could also lower the BHP share price.

The post How much profit are BHP shares going to make in 2023? appeared first on The Motley Fool Australia.

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More reading

• Will 2023 get better for ASX 200 shares?
• Why BHP, Core Lithium, Santos, and Winsome shares are charging higher
• 5 things to watch on the ASX 200 on Thursday
• These are the highest-yielding ASX 200 dividend shares right now
• Can the BHP share price deliver 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 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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2022 was tough on the S&P/ASX 200 Index (ASX: XJO), but ASX energy stocks – and coal shares in particular – bucked the trend.

The S&P/ASX 200 Energy Index (ASX: XEJ) soared nearly 40% between the final close of 2021 and the end of 2022. That’s compared to the ASX 200’s 5.5% tumble.

The sector’s strong performance came on the back of surging energy commodities – a result of Russia’s invasion of Ukraine.

Indeed, Newcastle coal futures lifted above US$450 a tonne to reach a new record in 2022, bolstering producers’ bottom lines.

But which ASX 200 coal shares posted the biggest gains last year? Let’s take a look.

3 ASX 200 coal shares that outperformed all others in 2022

The Whitehaven Coal Ltd (ASX: WHC) share price outperformed not only all fellow ASX 200 coal stocks in 2022, but every other ASX 200 share as well.

After closing 2021 trading at $2.61, the stock rocketed to end 2022 at $9.42 — an incredible 261% rise.

That was despite floods impacting production at the company’s New South Wales open-cut mines.

in August, Whitehaven posted a record $1.95 billion profit for the 2022 financial year and a 1,396% year-on-year increase in earnings before interest, tax, depreciation, and amortisation (EBITDA).

The New Hope Corporation Limited (ASX: NHC) share price also took off in 2022, rising from $2.23 on 31 December 2021 to $6.36 12 months later – a 185% gain.

In September, it also posted a whopping profit for the last financial year. Its profit rose nearly 1,140% to $983 million year-on-year, while its underlying EBITDA came in around 330% higher at $1.58 billion.

Finally, coal mining stock Coronado Global Resources Inc (ASX: CRN) takes out the bronze spot, coming in as 2022’s third best-performing ASX 200 coal share.

After ending 2021 at $1.24, the company’s share price shot up to close last year at $1.99 – a 60.5% improvement.

The ears of dividend fans were likely pricked by this stock last year. It posted two ordinary dividends and three special dividends over the period, totalling approximately 59.75 cents per share.

Some of those payouts related to the whopping US$849 million of EBITDA it posted for the six months ended 30 June – a 3,200% year-on-year improvement.

The post These 3 ASX 200 coal shares posted the biggest gains of 2022 appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Brokers name 3 ASX shares to buy now
• The 3 best performing ASX 200 dividend shares of 2022
• Is China about to reignite ASX 200 coal shares?
• These are the highest-yielding ASX 200 dividend shares right now

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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On Friday, the S&P/ASX 200 Index (ASX: XJO) finished the week with a solid gain. The benchmark index rose 0.65% to 7,109.6 points.

Will the market be able to build on this on Monday? Here are five things to watch:

ASX 200 expected to jump

The Australian share market looks set to continue its rise on Monday following a strong finish to the week on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 70 points or 1% higher this morning. On Wall Street, the Dow Jones was up 2.1%, the S&P 500 rose 2.3%, and the NASDAQ jumped 2.55%. Investors were piling back into shares after signs that inflation is easing sparked hopes that interest rates may not rise as much as feared.

Oil prices mixed

ASX 200 energy shares Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) could have a subdued start to the week after a mixed finish to the week for oil prices. According to Bloomberg, the WTI crude oil price was up 0.15% to US$73.77 a barrel and the Brent crude oil price fell 0.15% to US$78.57 a barrel. Oil prices were down over 8% for the week amid global recession concerns.

Tech shares on watch

It could be a great session for tech shares such as Altium Limited (ASX: ALU) and Xero Limited (ASX: XRO) on Monday after their US counterparts stormed higher on Friday. Investors were scrambling to buy tech shares amid signs that inflation is easing. The NYSE listed Block Inc (ASX: SQ2) share price jumped almost 7%.

PEXA added to ASX 200

The PEXA Group Ltd IASX: PXA) share price will be one to watch on Monday after S&P Dow Jones Indices announced that the property settlements company would be added to the ASX 200 index. PEXA will replace Pendal Group Ltd (ASX: PDL), which is merging with Perpetual Limited (ASX: PPT).

Gold price jumps

Gold miners Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) could have a solid start to the week after the gold price stormed higher on Friday. According to CNBC, the spot gold price was up 1.6% to US$1,869.7 an ounce during the session. The precious metal climbed to a six-month high thanks to signs that inflation is easing.

The post 5 things to watch on the ASX 200 on Monday appeared first on The Motley Fool Australia.

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More reading

• What’s the outlook for ASX 200 lithium shares in 2023?
• How are ASX 200 energy shares tracking in the first week of trade?
• Can ASX tech shares rise from the ashes in 2023?
• Top brokers name 3 ASX shares to buy next week
• The 3 ASX 200 bank shares that outperformed all others in 2022

Motley Fool contributor James Mickleboro has positions in Altium and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium, Block, and Xero. The Motley Fool Australia has positions in and has recommended Block and Xero. 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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S&P/ASX 200 Index (ASX: XJO) energy shares counted amongst the top performers in 2022.

But the first week of trading in 2023 proved to be a difficult one for the big energy stocks.

In fact, none of the pure play ASX 200 energy shares finished the first week of 2023 trading in the green, while the benchmark index managed to notch up a 1.27% gain.

What headwinds did ASX 200 energy shares face in the first week of 2023?

Did someone say headwinds?

Yes, there’ve been a few.

First, investors in ASX 200 energy shares may be feeling a bit skittish over the Federal Government’s price gaps on domestic coal and gas sales. That legislation is due to last for 12 months. But there are no guarantees it might not be rolled over for an additional year. And analysts are still debating the potential impacts on the profitability of the big producers.

Second, windy conditions to drive wind turbines combined with unseasonably warm weather saw gas prices in Europe fall to levels not seen since before Russia’s invasion of Ukraine.

And the big oil and gas producers didn’t get any relief on the oil side either, with Brent crude oil finishing the week at US$80 per barrel. That’s more than 7% below the price where Brent crude was trading at the end of 2022.

So, which ASX 200 energy shares fared the best?

The best of the pack

The third-best performer in the first week of trading in 2023 was oil and gas giant Woodside Energy Group Ltd (ASX: WDS).

Woodside has a market cap of $64 billion and, at the current share price, pays a partly franked trailing dividend yield of 8.7%.

After gaining a stellar 62% in 2022 on the back of surging oil and gas prices, this ASX 200 energy share is down 2.1% in these early days of 2023, finishing the week at $34.61 per share.

Up next, we have oil and gas producer Santos Ltd (ASX: STO).

Santos has a market cap of $23.1 billion and, as of Friday’s closing price, pays an unfranked trailing dividend yield of 3.2%.

Having gained 13% in 2022, the Santos share price is down 1.3% in the new year, closing Friday at $7.02 per share.

Which brings us to the best of the pack over this first week, Origin Energy Ltd (ASX: ORG).

The diversified energy provider and producer has a market cap of $13.2 billion and pays a partly franked, trailing dividend yield of 3.8%.

Origin Energy shares gained 47% in 2022. In the first week of 2023, the ASX 200 energy share edged 0.1% lower, closing at $7.69 per share.

The post How are ASX 200 energy shares tracking in the first week of trade? appeared first on The Motley Fool Australia.

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More reading

• Why BHP, Core Lithium, Santos, and Winsome shares are charging higher
• 3 key factors that helped propel the Woodside share price 60% higher in 2022
• 5 things to watch on the ASX 200 on Friday
• Is the party over for these ASX 200 energy shares in 2023?
• Bigger profits risk bigger target: The Woodside share price conundrum

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

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S&P/ASX 200 Index (ASX: XJO) shares had a rocky time last year. Will the ASX share market deliver positive returns this year?

A number of factors ravaged the ASX share market in 2022, including inflation, interest rates, conflict between Russia and Ukraine, and uncertainty in China.

We can see how the volatility hit the ASX with the exchange-traded fund (ETF) iShares Core S&P/ASX 200 ETF (ASX: IOZ).

But after the market has been jostled around, what might be in store for the ASX 200 this year?

Economic changes to start showing in results and trading updates

I think that a number of sectors are going to start showing changes in economic conditions.

For example, many bricks and mortar ASX retail shares may show strong year-over-year sales growth for the six months to 31 December 2022. That’s because the six months to 31 December 2021 saw lockdowns in a number of cities, with many stores shut or trading with restrictions. But, the trading update for the start of 2023 could start showing the impacts of inflation and higher interest rates.

Another area of change could be for ASX 200 bank shares like Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB) and ANZ Group Holdings Ltd (ASX: ANZ).

With interest rates rising, the banks are passing on the hikes to borrowers more quickly than savers. I expect that banks are going to report higher lending margins and profits in 2023. This could be a boost for share prices. But, FY24 and even the second half of FY23 could show bank arrears starting to increase with how rapidly interest rates have risen.

Because the banking sector is significant within the ASX 200, it will have a key influence on whether the ASX 200 climbs or not.

Unpredictable resources sector

Another important factor for ASX 200 shares is the large resources industry.

Numerous companies on the ASX are digging stuff out of the ground, such as BHP Group Ltd (ASX: BHP), Forrtescue Metals Group Limited (ASX: FMG), Rio Tinto Limited (ASX: RIO), Mineral Resources Ltd (ASX: MIN) and so on.

If everyone knew what would happen next with resource prices, then it would be much easier to know what profits resource companies are going to report each year.

I think that Chinese demand for iron ore will grow in 2023 compared to the last few months as the Asian superpower exits COVID-19 restrictions. This could mean that the iron ore price could rise even further. But, with the commodity’s price above US$110 per tonne, it’s possible it has rallied ahead of itself. Time will tell.

One area that I am optimistic about is profit-producing miners that are exposed to electrification commodities such as copper, nickel and lithium. I think that the trend towards decarbonisation is going to continue regardless of a dip in the global economy.

My thoughts on ASX 200 share opportunities

Overall, I think the ASX 200 can produce a small capital gain by the end of the year, plus dividends. There will probably be more uncertainty, but I don’t think things will always look this negative.

For me, I think ASX tech shares could be a good place to look for long-term opportunities, as they’re now at much cheaper prices after the heavy declines in 2022.

The post Will 2023 get better for ASX 200 shares? appeared first on The Motley Fool Australia.

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More reading

• The 3 ASX 200 bank shares that outperformed all others in 2022
• Guess how much a $20k investment in these ASX 200 shares in 2013 is worth now
• 2 ASX dividend shares to buy with 5%+ yields – analysts
• Here are the top 10 ASX 200 shares today
• Why BHP, Core Lithium, Santos, and Winsome shares are charging higher

Motley Fool contributor Tristan Harrison has positions in Fortescue Metals Group. 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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ASX tech shares had a terrible time in 2022 amid numerous interest rate rises. After such a bad run, can the sector regain investor confidence in 2023?

As an example of the heavy decline, the BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC) fell by around 32% last year. This is an exchange-traded fund (ETF) that is invested in around 50 ASX tech shares, ranging from large players like Xero Limited (ASX: XRO), WiseTech Global Ltd (ASX: WTC) and REA Group Limited (ASX: REA), down to small technology companies like Frontier Digital Ventures Ltd (ASX: FDV) and FINEOS Corporation Holdings PLC (ASX: FCL).

Could 2023 go much better?

According to reporting by the Australian Financial Review, a survey of 11 of the country’s leading technology CEOs by the newspaper showed that most of them believe the sales cycle slowdown which is currently hurting Europe and the US could also hurt Australian companies as well, though the ‘business to business’ (B2B) market could do better than ones that focus on consumers.

WiseTech CEO and founder Richard White said:

Regardless of geography, tight economies force business leaders to focus on efficiency in order to be resilient and maintain margins.

The top performing ASX tech companies are mostly B2B players, so they are in a better position compared with other markets in which many of the top tech companies are consumer-facing businesses and so more vulnerable to consumer spending trends.

[This year] has reminded the tech sector we should all have an ongoing focus on efficiency and profitability as part of good financial discipline. We implemented an organisation-wide efficiency program a couple of years ago … it’s given us an annualised cost reduction of approximately $50 million, which was important for driving further operational leverage as our revenue continues to grow.

I suspect investors will be unlikely to quickly return to the days when growth was the chief metric of business health for a tech company. Growth at any cost is pretty much dead, and I expect a focus on growth and profitability is here to stay.

My take on ASX tech shares

The technology sector is a diverse group and, while they have largely been sold off indiscriminately, I think there could be a good rebound for some names.

Remember, a share price is meant to reflect the entire future value of a business, discounted back to a valuation for today.

I do not think that the underlying value of some businesses are worth 40% less, 50% less or an even bigger discount, compared to 12 months ago. However, I’d also say that some businesses were not worth as much as how high the market had pushed them.

If the market sees that some ASX tech shares’ financials are holding up better than others, this could lead to a boost for names like that. Remember, if something drops by 50% from $100 to $50, it only needs to go to $75 to make a 50% return.

I can see names like Megaport Ltd (ASX: MP1), Xero Limited (ASX: XRO) and Life360 Inc (ASX: 360) being candidates that could rebound because of how hard they’ve been hit, yet revenue has continued to grow.

Over the long term, some of the names in this sector could be the ones that develop the most, with strong operating margins. So, being able to buy these ASX tech shares at much cheaper prices seems like a great opportunity to me.

Even if technology businesses don’t rebound in 2023, over the next three to five years, I think they could be among the better performers.

The post Can ASX tech shares rise from the ashes in 2023? appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy next week
• 3 ASX growth shares to buy with huge upside potential – analysts
• 5 things to watch on the ASX 200 on Friday
• ASX 200 tech shares are leading the market higher today
• Here’s how I’ll be investing my money in ASX shares 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 positions in and has recommended Frontier Digital Ventures, Life360, Megaport, WiseTech Global, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended FINEOS Corporation. The Motley Fool Australia has positions in and has recommended WiseTech Global and Xero. The Motley Fool Australia has recommended FINEOS Corporation, Frontier Digital Ventures, Megaport, and REA 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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With most brokers taking a break over the holiday period, there haven’t been many notes hitting the wires.

But never fear! Summarised below are three recent recommendations that remain very relevant today. Here’s what brokers are saying about these ASX shares:

Allkem Ltd (ASX: AKE)

According to a note out of Citi, its analysts have a buy rating and $17.80 price target on this lithium miner’s shares. While the broker suspects that lithium prices may have peaked amid slowing electric vehicle demand in China, it doesn’t appear too concerned. This is due to Allkem locking in strong contracted prices. Combined with production growth, Citi remains positive on the company’s outlook. The Allkem share price ended the week at $11.91.

Corporate Travel Management Ltd (ASX: CTD)

A note out of Macquarie reveals that its analysts have an outperform rating and $19.95 price target on this corporate travel specialist’s shares. The broker acknowledges that industry data shows that corporate travel activity softened in the United States in November, putting Corporate Travel Management at risk of falling short of first half expectations. However, with its shares down heavily over the last 12 months and trading at an attractive level, the broker appears to believe this is more than priced in. The Corporate Travel Management share price was fetching $15.62 at Friday’s close.

Xero Limited (ASX: XRO)

Analysts at Bell Potter have a buy rating and $97.90 price target on this cloud accounting platform provider’s shares. According to the note, the broker has taken positives from the recent release of the first quarter update from rival Intuit (the owner of Quickbooks). Bell Potter notes that the update revealed softness in the Australian market for QuickBooks, which could bode well for Xero. In addition, it notes that Intuit commented that it believes that digitisation rather than macro remains the key driver for cloud accounting. This is likely to be a positive for Xero in the current economic environment. The Xero share price ended the week at $71.62.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
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Motley Fool contributor James Mickleboro has positions in Allkem and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Corporate Travel Management. 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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Last year was a rough one for many S&P/ASX 200 Index (ASX: XJO) shares, and those of banking giants were no exception.

While rising interest rates potentially buoyed market sentiment for banks due to the potential for higher net interest margins (NIMs), most ASX 200 banks ultimately ended the year lower than they started.

Indeed, the home sector of ASX 200 banking shares, the S&P/ASX 200 Financials Index (ASX: XFJ), fell almost 3% over the 12 months ended 31 December 2022. Simultaneously, the ASX 200 tumbled around 5%.

But it wasn’t all bad for ASX 200 bank shares. Here are three that defied the downturn to post the biggest share price gains out of their peers in 2022.

2022’s best performing ASX 200 bank shares

Taking out the gold is one many might overlook when hunting for ASX 200 bank shares.

The Challenger Ltd (ASX: CGF) share price gained 16.7% between its final close of 2021 – $6.53 – and the end of 2022, which saw it trading at $7.62.

The company operates three core businesses – an investment management division, an annuities business, and an APRA-regulated bank. However, it likely won’t be a contender for 2023’s top spot.

Challenger Bank is currently in the process of being acquired by Heartland Group Holdings Ltd (ASX: HGH).

Coming in second best is the Westpac Banking Corp (ASX: WBC) share price, having gained 9.4% over the 12 months to 31 December 2022.

After ending 2021 trading at $21.35, the Westpac share price rose to $23.35 as of the final close of 2022 – a 9.4% improvement.

Looking forward, Goldman Sachs is tipping further gains from the ASX 200 bank in the coming years.

Finally, the Suncorp Group Ltd (ASX: SUN) share price also outperformed most other ASX 200 bank operators in 2022.

The stock rose from $11.07 to $12.04 – or 8.8% – over the 12 months ended 31 December 2022.

However, like Challenger, the company’s days operating a bank appear limited.

Suncorp Bank is being lined up to be acquired by ANZ Group Holdings Ltd (ASX: ANZ) in a near-$5 billion deal announced last year.

The post The 3 ASX 200 bank shares that outperformed all others in 2022 appeared first on The Motley Fool Australia.

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

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One of the most famous investors in the world is Warren Buffett.

The Oracle of Omaha has earned this reputation by delivering incredible returns over multiple decades.

Between 1965 and 2021, the market value of Buffett’s Berkshire Hathaway has increased by an average of 20.1% per annum. This means that Berkshire Hathaway has returned a massive 3,641,613% over the 56 years.

To put that into context, a single investment of just 27.5 cents would have turned into $1 million.

Investing in moats

One of the key reasons for Buffett’s success could be down to his focus on buying companies with wide economic moats.

In his 2007 letter, he explained why moats are important for investments:

A truly great business must have an enduring ‘moat’ that protects excellent returns on invested capital. The dynamics of capitalism guarantee that competitors will repeatedly assault any business ‘castle’ that is earning high returns.

Therefore a formidable barrier such as a company’s being the low-cost producer (GEICO, Costco) or possessing a powerful world-wide brand (Coca-Cola, Gillette, American Express) is essential for sustained success. Business history is filled with ‘roman candles’, companies whose moats proved illusory and were soon crossed.

But which ASX shares have moats?

There are a number of defensive ASX shares with moats that I think would be great long-term options for investors.

These include lottery operator Lottery Corporation Ltd (ASX: TLC), toll road company Transurban Group (ASX: TCL), realestate.com.au owner REA Group Limited (ASX: REA), and biotech giant CSL Limited (ASX: CSL).

But investors don’t necessarily need to pick individual ASX shares to buy. That’s because of the VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT).

This exchange-traded fund (ETF) has been designed to replicate Warren Buffett’s investment style. It gives investors access to a diversified portfolio of companies with sustainable competitive advantages and fair valuations.

Over the last 10 years, the index that the fund tracks has generated a return of 18.1% per annum. This would have turned a $10,000 investment into more than $50,000 today.

All in all, I believe this demonstrates why following Warren Buffett’s advice could help you grow your wealth with ASX shares over the long term.

The post I’d listen to Warren Buffett and invest in ASX shares with wide economic moats appeared first on The Motley Fool Australia.

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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 recommended REA Group and VanEck Morningstar Wide Moat 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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