Tag: Motley Fool

At the start of each week, I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Flight Centre Travel Group Ltd (ASX: FLT) continues as the most shorted ASX share with short interest of 14.7%, which is up slightly week on week again. Short sellers appear to believe that the market is too optimistic on the travel industry recovery.
• Betmakers Technology Group Ltd (ASX: BET) has seen its short interest remain flat at 13%. This betting technology company’s shares have been crushed this year and short sellers don’t appear to believe the pain is over.
• Perpetual Limited (ASX: PPT) now has 12.7% of its shares held short, which is up week on week again. Short sellers have been increasing their positions after it was pressured into completing the acquisition of fellow fund manager Pendal Group Ltd (ASX: PDL). This effectively rules out a takeover of its own.
• Megaport Ltd (ASX: MP1) has seen its short interest rise to 11.4%. Short sellers may be targeting this network as a service operator’s shares due to the sky high multiples they trade on.
• Sayona Mining Ltd (ASX: SYA) has 10.1% of its shares held short, which is up slightly week on week. This may be due to fears that lithium prices could have peaked.
• Zip Co Ltd (ASX: ZIP) has seen its short interest ease to 8.1%. There may be concerns over Zip’s high debt and quest to become profitable.
• Core Lithium Ltd (ASX: CXO) has jumped into the top ten with short interest of 8%. Concerns over production delays and falling lithium prices have been weighing on this lithium developer’s shares.
• Lake Resources N.L. (ASX: LKE) has short interest of 8%, which is down week on week. This lithium developer is allegedly having issues producing battery grade lithium at scale from its Kachi operation.
• Breville Group Ltd (ASX: BRG) has seen its short interest edge higher to 7.9%. This may have been driven by concerns that spending on household goods could suffer in 2023.
• Nanosonics Ltd (ASX: NAN) has short interest of 6.8%, which is down sharply week on week. Investors have concerns over this medical device company’s sales model change in the key United States market.

The post Here are the 10 most shorted ASX shares appeared first on The Motley Fool Australia.

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More reading

• 5 ASX lithium stocks to buy in 2023: brokers
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Is Core Lithium the next Pilbara Minerals?
• Here are the top 10 ASX 200 shares today
• 3 ASX All Ordinaries shares up by more than 60% in 2022

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Betmakers Technology Group, Megaport, Nanosonics, and Zip Co. The Motley Fool Australia has positions in and has recommended Nanosonics. The Motley Fool Australia has recommended Betmakers Technology Group, Flight Centre Travel Group, and Megaport. 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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Now is a good time to buy these S&P/ASX 200 Index (ASX: XJO) shares, or so the companies’ directors seem to believe. Three ASX 200 companies have revealed five notable insider buys this month.

Insider buying is often seen as a sign those in the know expect big things from a share. Thus, it can put a stock on the map for other investors.

So, which ASX 200 shares have been snapped up by their directors in December? Let’s look at six trades made by five directors across three companies.

5 ASX 200 directors snapping up their company shares

Powering higher

An interesting year for AGL Energy Limited (ASX: AGL) culminated with four new directors in November, two of whom bought into the company this month.

Kerry Schott bought 12,000 shares in the ASX 200 utilities company for around $8.16 apiece on 9 December – forking out a total of $97,918.80.

That same day, fellow AGL board newbie Christine Holman bought 13,000 shares for $8.09 each – totalling $105,170.

Both buys have proven to be good ones so far. The AGL share price has taken off in 2022, as the chart below shows.

Building market confidence

Sadly, this year hasn’t been nearly as good to shares in ASX 200 property and infrastructure group Lendlease Group (ASX: LLC). Its stock has been walloped this year.

But the tumble might have created a buying opportunity for its CEO and managing director Tony Lombardo.

He bought 10,000 shares in the company on 1 December, paying around $7.69 apiece – a total of $76,890.

He backed that up again just six days later, forking out another $40,755 for 5,500 more shares, each priced at $7.41.

ASX 200 directors take a bite of Collins Food shares

Another embattled ASX 200 share that’s been the subject of insider buying this month is Collins Food Ltd (ASX: CKF). The company operates various fast-food franchises around Australia and the world.

The first insider buys going down at Collins Food this month was made by director Kevin Perkins. The insider bought 20,000 shares in the ASX 200 company on 2 December, paying $160,141.32 for the parcel, or around $8.01 per share.

The final insider purchase I’ll mention was conducted on 21 December.

Then, Bella Kaye – spouse of chair Robert Kaye – forked out $50,181.42 for 7,000 more shares in the company. That represents a purchase price of around $7.17 apiece.

The post 5 ASX 200 directors who have been buying up their company shares this month appeared first on The Motley Fool Australia.

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More reading

• Why AGL, Retail Food Group, Starpharma, and TPG shares are rising today
• Buy Westpac and this ASX 200 dividend share: brokers
• Here are the top 10 ASX 200 shares today
• Here are the top 10 ASX 200 shares today
• Why AGL, Invictus Energy, Maas, and Mach7 shares are pushing higher today

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 Collins Foods. The Motley Fool Australia has recommended Collins Foods. 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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No doubt many Aussies are feeling the financial pinch this time of the year. Fortunately, now is a good a time as any to begin building a second income by investing in ASX dividend shares.

And one needn’t have a substantial amount of cash tucked away to do so. I would invest for my future even if I could only spare $5 a day.

Here’s how I would go about it.

How I would choose ASX shares for my portfolio

Of course, there’s a bit more to investing than that. I would need to identify the ASX shares I felt capable of providing consistently strong returns.

Personally, I would look for companies with decent cash flows, manageable debt levels, and competitive advantages. Above all, however, I would look to invest in a diverse set of companies I understand and believe in.

One such share could, in my personal opinion, be supermarket operator Woolworths Group Ltd (ASX: WOW) – and Goldman Sachs agrees.

Though, even then the most considered investment isn’t guaranteed to offer share price appreciation or dividends in the future.

I would also consider my $5 a day investment the baseline and never waver from it. Ideally, I would grow my daily or monthly contribution over the year to grow my second income stream faster.

How much income could a daily $5 investment create?

A fiver a day invested in ASX dividend shares might not sound like much, but it can add up over the long term. Particularly if we consider the benefits of compounding. Let’s do the math.

Saving $5 a day will see an investor with around $152 set aside each month, or $1,825 a year.

But I wouldn’t use that extra cash as spending money. I would reinvest my dividends for years before I begin to take them as passive income.

The S&P/ASX 200 Index (ASX: XJO) returned an average of around 9.3%, including dividends, over the last 10 years.

If I managed to realise such a return and compounded my dividends by reinvesting them in ASX shares, my portfolio would be worth $37,401 in 12 years’ time.

At that point, it would be capable of paying $155 a month in passive income if I achieved a 5% dividend yield.

However, by investing $5 a day consistently for 25 years, my portfolio could grow to $161,540 and be capable of offering approximately $8,000 of annual passive income – all for $5 a day.

The post My $5 a day plan to build a second income with ASX dividend shares appeared first on The Motley Fool Australia.

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More reading

• I’d aim for a $1 million by buying just a handful of ASX shares
• How I’d target passive income by investing $75 a month in ASX dividend shares
• I’m listening to Warren Buffett and buying cheap ASX shares
• Will the BHP dividend in 2023 be bigger than last year?
• 5 ASX lithium stocks to buy in 2023: brokers

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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When you first start investing, the prospect of eventually building a million-dollar portfolio might seem impossible. However, history shows that it is possible to do so by investing in ASX shares.

How many shares? Many experts suggest a portfolio of 20 to 30 shares spread out across various industries is optimal for diversification. That’s because having this number decreases company or industry-specific risk by ensuring that no single company or industry has too much influence over the value of your holdings.

However, investors could get away by buying only a handful of ASX shares if they take advantage of the diversification offered by exchange traded funds (ETFs). For example, the Vanguard MSCI Index International Shares ETF (ASX: VGS) gives investors exposure to 1,467 of the world’s largest listed companies from major developed countries. That’s about as diverse as it gets.

If you owned an ETF like this, you could potentially snap up just a few high quality ASX shares to make a really strong portfolio.

But how do you make a million?

If you’re just starting out and have time on your side, then investing with a long-term view could be the key to making a million.

If you’re able to invest $5,000 into ASX shares each year and earn a 9.6% per annum return, then you would turn those investments into $1 million after just over 30 years. If you can afford to add more as you get older and your wage (hopefully) increases, you’ll get there even earlier.

Why 9.6%? Well, that’s the return that Australian shares have provided investors with over the last 30 years according to Fidelity. And while there’s no guarantee that the market will do the same over the next 30 years, this level of return is largely in line with historical averages.

If you’re starting when older, you’ll just need to begin with a greater amount of capital and make slightly larger annual contributions to reach your goal.

Starting with $150,000 and making $10,000 annual investments will take a little over 15 years to reach $1 million if you’re earning a 9.6% per annum return.

All in all, being a share market millionaire is not impossible, particularly if you have a plan and stick to it.

The post I’d aim for a $1 million by buying just a handful of ASX shares appeared first on The Motley Fool Australia.

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More reading

• Stock market correction: How I’m using this opportunity to build wealth with ASX shares
• 3 reasons to buy the Vanguard MSCI Index International Shares ETF (VGS) before 2023
• If I was 40 and had never invested, here’s how I’d aim to build a $500,000 ASX share portfolio
• This simple investing plan could save the retirement plans of millions of retail investors
• One ASX ETF that could make you a stock market millionaire with little to no effort

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

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If you’re anything like me, your back pocket will be feeling a little lighter after yesterday’s festivities. Fortunately, I have a way to lessen the load a little next year without breaking the bank. If my New Year’s resolution was to build a passive income, but I only had $75 a month to spare, here’s how I would work to achieve it with ASX dividend shares.

Key considerations

Consistency is key when it comes to building an income stream. Just like most of us receive an income by attending jobs most days, an investor building a passive income should turn up for their investments.

That might mean setting a monthly reminder to invest a set amount or creating an automatic transfer into an investing account.

Speaking of investing accounts, if I was only adding $75 a month to my portfolio, I would be extra cautious of associated fees so to make the most of my money. Thus, I would shop around to find the best brokerage for my needs.

Finding ASX dividend shares to invest in

With those simple tasks ticked off my to-do list, I would turn my attention to finding ASX dividend shares to invest in.

Buying dividend shares is generally the same as buying any other stock. I would still consider a company’s growth prospects, its competitive advantages and disadvantages, and its balance sheet to assess its strengths and weaknesses.

However, I would likely pay closer attention to an ASX dividend shares’ profits, and where those profits are coming from. The ideal dividend stock would have consistent notable cash flow and a good debt position, in my opinion, giving them a strong base from which to pay dividends.

I would also consider a company’s dividend history. A green flag might be one that has previously prioritised payments to shareholders during hard times. Though, whether that was a smart financial move might also need to be analysed.

Finally, I would look at an ASX share’s dividend yield. That measures the amount a company pays out compared to its share price.

How to manage risks with ASX dividend shares

One might think investing in a company with a massive dividend yield is the best use of $75 each month. However, I always prefer sustainable yields over high ones.

Such sustainability is probably particularly important if I were investing just $75 a month, as my risk tolerance would likely be modest.

Speaking of risks, I would also aim to build a diverse portfolio, thereby reducing some of the risks investing can bring.

Though, it’s important to note no investment is guaranteed to provide either returns, dividends, or even downside protection, no matter how considered it is.

Looking to the future

Investing $75 a month likely won’t build a million-dollar a year passive income by next Christmas.

Indeed, that monthly contribution would equal a $900 annual investment – which would be capable of paying out $45 a year on a 5% dividend yield.

But I believe $75 a month is still a good place to start. The market has historically always gone up. Therefore, building a portfolio over time is, in my opinion, far better than not building one at all.

The post How I’d target passive income by investing $75 a month in ASX dividend shares appeared first on The Motley Fool Australia.

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More reading

• I’d aim for a $1 million by buying just a handful of ASX shares
• I’m listening to Warren Buffett and buying cheap ASX shares
• Will the BHP dividend in 2023 be bigger than last year?
• 5 ASX lithium stocks to buy in 2023: brokers
• Here’s my verdict on the CBA share price 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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One of the world’s most famous investors is Warren Buffett.

The Oracle of Omaha has earned his legendary reputation after generating consistently strong returns for Berkshire Hathaway over multiples decades.

For example, according to Buffett’s most recent annual letter, Berkshire Hathaway’s market value per share has increased by an average of 20.1% per annum from 1965 to 2021. This is almost double the return of the S&P 500 index, including dividends, which has returned an average of 10.5% per annum over the same period.

Impressively, this means that Berkshire Hathaway has returned a whopping 3,641,613% over the 56 years. This would have turned a single dollar investment into over $3.5 million today.

In light of this, when Buffett speaks, it certainly can pay (almost literally) to listen.

Buy quality cheap ASX shares

Buffett is well known to take advantage of the type of market volatility we have experienced this year. He famously quipped:

Be fearful when others are greedy and be greedy when others are fearful.

The good news is that because of inflation and recession fears, there are a good number of cheap-looking shares on the ASX.

However, Buffett doesn’t buy shares just because they look cheap, he buys them when he feels they are trading at a discount to their underlying value.

This means don’t just buy a share because it has dropped 80% this year and you think it will rebound. There could be a reason why that decline has happened and there could be more to come. You could ultimately end up trying to catch a falling knife.

Instead, investors should look for ASX shares that have been sold off but still have strong business models and equally strong outlooks. Buffett explained in his 2014 letter:

[T]hough marginal businesses purchased at cheap prices may be attractive as short-term investments, they are the wrong foundation on which to build a large and enduring enterprise. Selecting a marriage partner clearly requires more demanding criteria than does dating.

This statement echoes something Buffett said in his 1994 letter that could be particularly apt for investors looking for cheap ASX shares. He said:

In my early days as a manager I, too, dated a few toads. They were cheap dates – I’ve never been much of a sport – but my results matched those of acquirers who courted higher-priced toads.  I kissed and they croaked. After several failures of this type, I finally remembered some useful advice I once got from a golf pro (who, like all pros who have had anything to do with my game, wishes to remain anonymous).  Said the pro:  “Practice doesn’t make perfect; practice makes permanent.”  And thereafter I revised my strategy and tried to buy good businesses at fair prices rather than fair businesses at good prices.

The post I’m listening to Warren Buffett and buying cheap ASX shares appeared first on The Motley Fool Australia.

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More reading

• A recession could be coming in 2023. Here’s Warren Buffett’s investing advice
• Is it safe to invest in ASX shares now? Take advice from Warren Buffett
• Almost ready to retire? I’d follow Warren Buffett’s tips to enjoy a growing passive income from ASX dividend shares
• One Warren Buffett-style stock I’m ‘never’ selling
• I’d aim for a million by buying just a few ASX shares

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Berkshire Hathaway. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway, short January 2023 $200 puts on Berkshire Hathaway, and short January 2023 $265 calls on Berkshire Hathaway. The Motley Fool Australia has recommended Berkshire Hathaway. 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 BHP Group Ltd (ASX: BHP) share price has seen plenty of volatility during 2023. But, will the company’s dividend payout be volatile as well?

Shares in the ASX 200 diversified miner have climbed around 9% this year, despite the craziness that has hit the broader ASX share market amid higher interest rates and strong inflation.

Profits and dividends don’t typically change as much or as rapidly as share prices do. It can also take some time for economic effects to flow through.

BHP intends to pay at least 50% of its net profit each year to shareholders, so positive or negative impacts on profit will affect the BHP dividend.

Dividend expectations

Commsec projections suggest that BHP could generate A$4.39 of earnings per share (EPS) and then pay an annual dividend per share of A$3.16.

In FY22, it paid total cash dividends of US$3.25 per share, which was a dividend payout ratio of 77%. In Australian dollar terms, it paid A$4.63 per share, according to the ASX.

What this suggests is that the BHP annual dividend could be cut by around 32% in FY23.

What’s going on with BHP shares?

BHP has a number of operating commodities, including iron ore, copper, nickel and coal.

The price of each commodity moves up and down, but what happens with iron ore is particularly important because, over the last few years, it has been that division that has generated the lion’s share of the earnings before interest and tax (EBIT).

In the first quarter of FY23, iron ore production increased 3% year over year to 65.1 mt.

However, the problem is that some commodities had been seeing deteriorating prices in the first half of FY23.

But, there is a chance that estimates could be revised higher if the current iron ore price is maintained or even increases over the rest of FY23. According to Commsec, the iron ore futures price was US$110 per tonne on 23 December 2022.

Another factor that could influence the BHP dividend in FY23 is the company’s acquisition of OZ Minerals Limited (ASX: OZL). This could boost the company’s copper earnings, but it also comes at an enterprise value of $9.6 billion, which will be funded by BHP’s balance sheet, with both cash and debt.

It will be interesting to see what BHP’s dividend payout ratio is for FY23 after using A$9.6 billion of its financial capacity.

However, BHP will no doubt be hoping that the expected synergies can boost future profits and dividends.

The post Will the BHP dividend in 2023 be bigger than last year? appeared first on The Motley Fool Australia.

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More reading

• Yields of up to 7%… 3 ASX dividend shares I’d buy to hold for 10 years
• 2 reasons to buy BHP shares before 2023 (and 2 reasons to sell)
• BHP share price higher on OZ Minerals $9.6b takeover agreement
• BHP shares ‘look expensive’: broker
• Could copper become ‘the lithium’ of 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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The last 12 months have been positive for the lithium industry, despite a bit of a hiccup late in the year. During this time, a number of ASX lithium stocks have risen strongly, generating wonderful returns for investors in a tough share market.

Will 2023 be just as good or even better? While that is impossible to say, brokers certainly believe there’s potential for this based on their recommendations summarised below.

Here are five ASX lithium stocks that have recently been rated as buys and tipped to climb meaningfully higher:

Allkem Ltd (ASX: AKE)

The first ASX lithium share to look at is Allkem. It is a speciality lithium chemicals company with a global portfolio of diverse and high-quality lithium operations. From these operations, Allkem is aiming to grow its production in a manner that allows it to command a 10% share of global lithium demand. A recent note out of Goldman Sachs reveals that its analysts have a buy rating and $15.20 price target on its shares.

Core Lithium Ltd (ASX: CXO)

Core Lithium is the lithium developer behind the Finniss Lithium Project in the Northern Territory. It is aiming to commence production in 2023, which means it shouldn’t be long until the company is generating free cash flow. Macquarie expects the company to be printing cash in both FY 2024 and FY 2025. As a result, the broker has put an outperform rating and $1.30 price target on its shares.

Liontown Resources Limited (ASX: LTR)

Another ASX lithium stock that isn’t too far from being a producer is Liontown Resources. It is the owner of two promising projects – the 100%-owned Kathleen Valley and Buldania projects in Western Australia. The former recently received approval for a 4Mtpa operation, which will supply tier-1 offtake customers including LG Energy Solution, Tesla, and Ford. Bell Potter is a fan and currently has a speculative buy rating and $2.87 price target on Liontown’s shares.

Mineral Resources Limited (ASX: MIN)

Morgans is a big fan of this mining and mining services company due largely to its exposure to lithium. In addition, the broker highlights that Mineral Resources has transformed from being primarily leveraged to high-cost/short-life iron ore operations to low-cost/long-life iron ore and lithium assets. It currently has an add rating and $94.00 price target on its shares.

Pilbara Minerals Ltd (ASX: PLS)

A final ASX lithium share that has been tipped as a buy recently is Pilbara Minerals. It is the owner of the Pilgangoora Project, which is one of the largest hard rock lithium deposits in the world and considered strategically important within the global lithium supply chain. Macquarie is a big fan of Pilbara Minerals and has an outperform rating and $7.50 price target on its shares.

The post 5 ASX lithium stocks to buy in 2023: brokers appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy next week
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Brokers name 3 ASX shares to buy for Christmas
• Should I buy Allkem shares this Christmas?
• Is Core Lithium the next Pilbara Minerals?

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.

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The Commonwealth Bank of Australia (ASX: CBA) share price is up a mighty 20% from its 52-week low in June. Many investors might now be wondering whether the largest Aussie bank is still worth investing in following the recent resurgence.

Could the 111-year-old banking giant still have some youthful exuberance left in it? More importantly, does the potential value creation stack up against the current valuation?

Here are my thoughts.

The good, the bad, and the ugly for the CBA share price

As with most investments, the story isn’t exactly black and white for the CBA share price. There are solid reasons to like this banking titan of Australia. However, there are also valid grounds for not being a fan of the $177 billion financial facilitator.

Good side on display

The appealing aspect of CBA is its firm financial positioning compared to the other big four constituents. Based on the latest data, CBA leads the pack in terms of capital buffers, meaning the bank should be more resilient during difficult times.

Keeping it simple, the data points that are worth noting include:

• Common equity tier 1 (CET1) ratio of 11.5%
• Net stable funding ratio (NSFR) of 130%

Another enticing characteristic of CBA is its net interest margin (NIM). This is the difference between the interest paid for deposits and the interest received on loans. Basically, this is the key revenue source for banks — so the bigger the NIM, the better.

At last check, CBA held a NIM of 1.9%, beating out its competition. The next closest is Westpac Banking Corp (ASX: WBC) with a NIM of 1.85%.

Not so good

Where banks get their funding for loans can make a big impact on profitability. Money directly from customer deposits is usually the cheapest form of funding. That’s why investors usually like a high deposit funding rate.

Yet, CBA has the lowest deposit funding rate of the big four at 75%. Given CBA’s best-in-class NIM, I’m guessing the bank is making use of debt agreed upon at a low-interest rate from some time ago. My concern for the CBA share price is whether its lower deposit funding rate could hurt earnings in the future.

The ugly side of the CBA share price

Unfortunately, there is an ugly side to the CBA share price… At a price-to-earnings (P/E) ratio of around 19 times, the company is certainly not ‘cheap’. For context, the industry average hovers around 10 times earnings.

The premium would possibly be justified if CBA profits were growing at a much faster pace than its peers, but they’re not. In FY22, the bank’s profits grew by approximately 9% — faster than Westpac’s, but slower than Australia and New Zealand Banking Group Ltd (ASX: ANZ).

Would I buy CBA shares right now?

Personally, I believe there are more attractive investment prospects elsewhere in the market right now. I still hold a position in CBA due to its exceptional brand and long-term shareholder returns.

However, at the closing price of nearly $105 on Friday afternoon, it’s not a buy for my portfolio for the time being.

The post Here’s my verdict on the CBA share price right now appeared first on The Motley Fool Australia.

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More reading

• Yields of up to 7%… 3 ASX dividend shares I’d buy to hold for 10 years
• Better buy for 2023: CBA vs. NAB shares
• 2 reasons to buy CBA shares before 2023 (and 2 reasons to sell)
• Little downside protection for popular ASX 200 shares as 2023 looms a much tougher year for blue chip stocks
• Is the CBA share price heading higher or lower from here?

Motley Fool contributor Mitchell Lawler has positions in Commonwealth Bank Of Australia. 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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If you’re looking for a passive income boost from dividend shares, then you may want to look at the two listed below.

Here’s why analysts at Morgans rates these ASX 200 dividend shares highly:

Santos Ltd (ASX: STO)

The first ASX 200 dividend share that could be a buy is Santos.

It is one of the region’s largest energy producers and, thanks to its recent merger with Oil Search, the owner of a collection of high quality operations aiming to deliver production of 103-106 million barrels of oil equivalent (mmboe) this calendar year.

The team at Morgans is positive on the company due to its growth prospects and diversified earnings base. The broker commented:

The resilience of STO’s growth profile and diversified earnings base see it well placed to outperform against a backdrop of a broader sector recovery. While pre-FEED, we see Dorado as likely to provide attractive growth for STO, while its recent acquisition increasing its stake in Darwin LNG has increased our confidence in Barossa’s development.

In respect to dividends, Morgans is expecting dividends per share of 23 cents in FY 2022 and 24.4 cents in FY 2023. Based on the current Santos share price of $7.20, this will mean yields of 3.2% and 3.4%, respectively.

Morgans also sees plenty of upside for its shares. It has an add rating and $9.00 price target on them.

Wesfarmers Ltd (ASX: WES)

Another ASX 200 dividend share that could be at top option for income investors is this conglomerate.

Wesfarmers is the company behind a range of businesses such as Bunnings, Catch, Covalent Lithium, Kmart, Officeworks, and Priceline.

Morgans thinks Wesfarmers could be a good option in the current environment. In fact, its analysts are optimistic the company’s retail operations will perform relatively positively due to its value offering. The broker thinks “Kmart is well-placed to benefit with the average price of an item at around $6-7.”

As for dividends, the broker is forecasting fully franked dividends per share of $1.82 in FY 2023 and $1.89 in FY 2023. Based on the current Wesfarmers share price of $46.06, this will mean yields of 4% and 4.1%, respectively.

Morgans has an add rating and $55.60 price target on its shares.

The post Seeking passive income in 2023? These ASX 200 dividend shares could help – analysts appeared first on The Motley Fool Australia.

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More reading

• What can ASX 200 investors learn from Warren Buffett’s big moves in 2022?
• 3 reasons to buy Wesfarmers shares before 2023
• 10 ASX shares I think are buys for 2023
• Stock market correction: How I’m using this opportunity to build wealth with ASX shares
• Don’t try to predict where ASX shares go in 2023, do this instead: Scott Phillips

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