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If you own Australia and New Zealand Banking Group Ltd (ASX: ANZ) shares or are planning to buy them, you may be wondering why they are showing up on brokerage platforms as ANZDA shares right now.

As I explained here yesterday, the bank’s shareholders recently approved the scheme of arrangement that will see the banking giant establish ANZ Group Holdings Limited as its non-operating holding company (NOHC).

Management notes that traditional banking is facing significant disruption from new non-bank competitors, mainly global technology companies launching financial services products. However, these businesses are not regulated in the same way as banks like ANZ.

By making the change to a NOHC setup, ANZ is able to partner with technology companies on a level playing field.

Ultimately, management expects the restructure to make its banking business more efficient by creating a better structure for investing in non-bank partners. It will also provide greater strategic and operational flexibility.

So, what are ANZDA shares?

As part of the process, ANZ needs to issue new NOHC shares to shareholders on a one for one basis.

The old ANZ shares have been suspended from trade and the new NOHC shares are trading under the ANZDA ticker code temporarily. Once the process completes, the new NOHC shares will trade under the original ANZ ticker code.

Right now, ANZDA is trading on a deferred settlement basis. This means that instead of settling your investment on the normal T+2 basis (two days after purchase), investors won’t settle their purchases until the deferred settlement date.

ANZ NOHC shares are due to start trading as normal on 4 January, which means that 6 January is the first settlement date for all on-market trades conducted during the deferred settlement period.

The post What is ANZDA and why has it just hit my ASX portfolio? appeared first on The Motley Fool Australia.

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More reading

• 2 reasons to buy CBA shares before 2023 (and 2 reasons to sell)
• Is there something strange going on with ANZ shares today?
• Here are the top 10 ASX 200 shares today
• Little downside protection for popular ASX 200 shares as 2023 looms a much tougher year for blue chip stocks
• Buy ANZ Bank and this ASX 200 dividend share: brokers

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

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Dividend income is always welcome, but over time inflation can chip away at the purchasing power it generates for you.

This is why it can be very important to invest in ASX dividend shares that also increase their payouts over time.

And while the current economic environment is challenging for many companies, not all are struggling. In fact, some appear well-placed for big dividend increases in 2023.

Here’s are two ASX dividend shares tipped to grow their dividends strongly next year:

Mineral Resources Ltd (ASX: MIN)

Thanks to booming iron ore and lithium prices, this mining and mining services company has been tipped to increase its dividend materially in 2023.

As a reminder, in FY 2022, Mineral Resources paid a $1.00 per share dividend to its shareholders.

According to a note out of Goldman Sachs, its analysts expect Mineral Resources’ EBITDA to more than triple in FY 2023 and for its dividend to follow suit.

Goldman has pencilled in a fully franked dividend of $4.37 per share next year. Based on the current Mineral Resources share price of $81.85, this will mean a 5.3% dividend yield for investors.

The broker has a buy rating and $94.00 price target on its shares.

QBE Insurance Group Ltd (ASX: QBE)

Another ASX share that could be poised to make a big increase to its dividend next year is insurance giant QBE.

Thanks to a winning combination of premium rate increases, cost outs, and rising bond yields, QBE is expected to be in a position to almost double its dividend, according to analysts at Morgans.

A recent note reveals that its analysts are expecting a 42 cents per share dividend for the 12 months ending 31 December 2022. After which, it is forecasting an 83% increase in QBE’s dividend to 77 cents for FY 2023. Based on the current QBE share price of $13.24, this will mean yields of 3.2% and 5.8%, respectively.

Morgans also sees decent upside potential for its shares with its add rating and $14.89 price target.

The post 2 ASX dividend shares that could see big payout increases next year appeared first on The Motley Fool Australia.

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More reading

• Mineral Resources is a ‘formidable player in the lithium market’: Broker tips major share price gains
• 5 things to watch on the ASX 200 on Thursday
• While the ASX 200 struggled in 2022, investors doubled down on lithium shares. Here’s why
• Why is the Norwest Energy share price rocketing 31% on Friday?
• Mineral Resources share price lower despite Norwest Energy takeover offer

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

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Recent volatility has likely seen investors flock to gold in a bid for stability. But bigger gains might be found among embattled S&P/ASX 200 Index (ASX: XJO) shares.

That’s despite the new year potentially bringing continuing interest rate hikes and inflation, as well as potential recessions in major economies. Not to mention the ongoing Ukraine war.

Here’s why I would turn to buying ASX 200 shares over gold in a bid to retire early despite potential volatility in 2023.

Why I would turn to shares over gold to retire earlier

The ASX 200 plummeted in early 2020 amid the onset of the COVID-19 pandemic before rocketing to an all-time high in mid-2021.

The rollercoaster continued in 2022, with the index dropping 6% year to date amid soaring inflation and resulting interest rate hikes. The index is now back where it was in early 2020.

Meanwhile, the yellow metal’s ‘safe haven‘ position as one of the best hedges against inflation has likely driven demand for it. Indeed, the price of gold has risen around 16% since early 2020 to trade at near six-month highs of approximately US$1,815 at last close.

However, if we zoom out to consider, say, the last 10 years, we see a totally different picture.

The price of gold has lifted around 7% over the last decade. While the ASX 200 has posted a near-55% gain in that time. And that’s before considering dividends.

That’s why I believe shares – while representing greater risk – provide better wealth-building opportunities over the long term. That’s particularly important for investors hoping to build a big enough nest egg to retire early.

Why ASX 200 shares in particular?

There are, no doubt, plenty of ASX shares capable of posting returns greater than those of most ASX 200 stocks over the long term.

However, I would be tempted to stick to ASX 200 shares if I were building a diverse portfolio capable of allowing me to retire early.

The ASX 200 aims to measure Australia’s 200 largest listed companies.

Because they are generally blue-chip or large-cap stocks, they often have access to greater capital and more concrete competitive advantages. Thus, the market’s larger participants can generally weather storms better than their smaller peers.

And 2022’s downturn has likely left many trading for bargain prices.

Meaning, I could get on board a quality company for less than I otherwise would have. Thus, hopefully allowing me to sit back and enjoy long-term returns.

Though, no share – ASX 200 or not – is guaranteed to provide returns or downside protection. Additionally, the index’s past performance doesn’t guarantee its future performance.

The post Forget gold! Start hunting fallen ASX 200 shares to buy for an earlier retirement appeared first on The Motley Fool Australia.

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More reading

• Guess which ASX 200 share turned a $10,000 investment into $40,000 in 2022
• 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
• 5 things to watch on the ASX 200 on Wednesday

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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The ASX share market is offering a wide range of opportunities in my opinion. With the current low starting point for a lot of valuations, this could be a very opportunistic time to buy.

Interest rates and inflation have thrown up plenty of uncertainty, but I believe that when there is fear, it’s the best time to buy.

Which ASX shares could be excellent investments from now to the end of 2023? I think these names could provide returns good enough to put under the Christmas tree.

Adairs Ltd (ASX: ADH)

Adairs is a leading homewares and furniture business. It has plans to grow its number of stores across the Adairs and Focus on Furniture brands, increase the size of some Adairs stores, grow its membership base, become more efficient, and provide a strong online shopping experience. I also like the plan to start selling Mocka furniture in stores.

I’m particularly attracted to the low valuation and high dividend yield. According to CommSec, the Adairs share price of $2.20 is valued at under 8x FY23’s estimated earnings with a projected grossed-up dividend yield of 12.1%.

Airtasker Ltd (ASX: ART)

Airtasker operates a leading platform that enables people to advertise for and pay for tasks that need doing such as furniture assembly, photography, delivery, accounting, and a very wide range of other services. Individuals and businesses can offer to do that work.

The ASX share is growing its organic revenue at a good double-digit growth rate overall. But, I’m incredibly optimistic about what the business can achieve in both the United States and the United Kingdom. They are both very large markets.

With a gross profit margin of above 90%, it can reinvest a high percentage of its new revenue for growth.

At the Airtasker share price of 33 cents, I think the company has plenty of upside potential.

Brickworks Limited (ASX: BKW)

I think it’s worth looking at this diversified ASX share amid the heightened uncertainty about the real estate sector. The fact that it’s going to start exporting bricks to the UK market is also promising.

In my opinion, the asset backing of the business is particularly compelling. I like the prospects for the industrial property trust joint venture as it completes more of its large property projects.

At the current Brickworks share price of $22.42, I think there is a big discount to its underlying inferred asset backing.

GQG Partners Inc (ASX: GQG)

GQG Partners is a US-based fund manager, though it is looking to expand geographically into places like Australia.

The ASX share has faced headwinds in 2022 with share markets going down, hurting its funds under management (FUM) and ability to generate profit. However, FUM continues to perform well, with ongoing FUM inflows. A share market recovery could be a useful tailwind next year for the FUM.

At the current GQG share price of $1.37, it could pay a dividend yield of 8.6% in FY23 according to CommSec.

VanEck Morningstar Wide Moat ETF (ASX: MOAT)

This exchange-traded fund (ETF) is about investing in US shares that are expected to see their strong competitive advantages endure for at least a decade and perhaps more than two decades.

The quality share is only added to this portfolio if it is deemed to be trading at an attractive value compared to Morningstar’s estimate of fair value.

I think this combination of factors could help the ETF perform well in 2023 and beyond.

Pinnacle Investment Management Group Ltd (ASX: PNI)

This is another ASX share that is linked to funds management. It is invested in an array of quality fund managers – they have also seen some difficulties during this period of volatility. However, I think a turnaround for share markets could be a good tailwind for FUM and earnings.

I like that the business is looking to continue to expand its portfolio. It has expanded into Canada, which is a compelling market and similar to Australia.

After a 45% drop in the Pinnacle share price to $8.73, I think it now looks much better value.

Temple & Webster Group Ltd (ASX: TPW)

Temple & Webster is the leading online-only retailer of furniture and homewares in Australia. It sells products by third-party suppliers as well as a growing range of private label products.

After a period of tough comparable periods due to COVID-19 lockdowns (and strong online demand from customers), the business is expecting to get back to double-digit revenue growth by the end of FY23. I like the company’s plans to invest in various initiatives, like AI (artificial intelligence) and augmented reality (AR), which can help it offer customers a better service and achieve better profitability.

However, after a 60% fall in the Temple & Webster share price in 2022 to $4.30, I think it looks excellent value for the long term.

Volpara Health Technologies Ltd (ASX: VHT)

Volpara is a small but growing ASX healthcare share that specialises in providing breast screening technology and risk analysis for patients, as well as software for medical professionals. It’s also involved in screening for lung cancer.

The business is growing its market share and aims to keep increasing its average revenue per user (ARPU). It’s aiming to rapidly reach breakeven, and I think it can do well with this goal because it has a very high gross profit margin of over 90%.

I think the ASX share looks much better value after dropping 49% in the year to date to 54 cents.

Wesfarmers Ltd (ASX: WES)

Wesfarmers is one of the best blue chips in my opinion. Its crown jewel business, Bunnings, has a very strong market position and earns a high return on capital. The company’s moves to expand into new areas including healthcare and lithium seem smart, considering the long-term growth potential of those two sectors thanks to ageing demographics and demand for electric vehicles, respectively.

I believe the retail outlook won’t always look this uncertain, so I think the 23% drop in the Wesfarmers share price to $46.24 looks very compelling for the long term.

Xero Limited (ASX: XRO)

This ASX tech share offers high-quality software for accountants, bookkeepers, financial advisors and business owners. It can be used anywhere in the world because its platform is cloud-based.

It’s growing its total number of subscribers and ARPU. Xero also recently increased its prices for New Zealand, the UK and Australia, which could boost the business’ economics further.

With a gross profit margin approaching 90% and ongoing strong revenue growth, I think the business can achieve strong profit growth in the coming years. With the Xero share price down over 50% in 2022 to $71.08, I think it looks very compelling for the rest of this decade.

The post 10 ASX shares I think are buys for 2023 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
• Don’t try to predict where ASX shares go in 2023, do this instead: Scott Phillips
• Top ASX growth shares to buy for a stock market rebound
• The cheap ASX shares to buy for dividends: Goldman Sachs
• 2 of the best ETFs for ASX investors to own in 2023

Motley Fool contributor Tristan Harrison has positions in Brickworks. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Adairs, Brickworks, Pinnacle Investment Management Group, Temple & Webster Group, Volpara Health Technologies, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Airtasker. The Motley Fool Australia has positions in and has recommended Adairs, Brickworks, Pinnacle Investment Management Group, Volpara Health Technologies, Wesfarmers, and Xero. The Motley Fool Australia has recommended Temple & Webster 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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The Kogan.com Ltd (ASX: KGN) share price is pushing higher on Thursday morning.

At the time of writing, the struggling ecommerce company’s shares are up 2% to $3.34.

Despite this, as you can see below, the Kogan share price is still down approximately 60% in 2022.

Why is the Kogan share price rising?

There have been a couple of catalysts for the rise in the Kogan share price on Thursday.

The first has been a strong showing in the tech sector this morning following a very positive session on the NASDAQ index overnight.

Also potentially giving its shares a lift is news that Kogan has made a new acquisition.

According to the release, the company has snapped up online luxury furniture retailer Brosa just over a week after it fell into administration. The deal will see the furniture brand stay alive and relaunched with the backing of Kogan.

Kogan has paid $1.5 million from its cash reserves. It will also provide logistics support for thousands of customers with undelivered orders.

The release explains that Kogan has purchased intellectual property, goodwill, and stock. However, the deal excludes all leases and other liabilities.

What is Brosa?

Founded in 2014, Brosa is an online luxury furniture retailer with almost 500,000 subscribers that delivers practical design-led furniture without the price tag.

In FY 2022, the business generated revenue of $75 million, largely from its online operations that were boosted by COVID tailwinds. But when these tailwinds eased and consumers returned to bricks and mortar stores, it quickly ran out of cash and was put into administration.

And despite recently being valued at over $60 million and being backed by venture capital investors such as Bailador Technology Investments Ltd (ASX: BTI), as mentioned above, Kogan was able to snap up Brosa for just $1.5 million.

While this low price tag sounds like a bargain on paper, the lack of venture capital interest is something to ponder. As is the prospect of one struggling ecommerce retailer buying another struggling ecommerce retailer. Whether this is a recipe for disaster or a masterstroke, time will tell.

Nevertheless, Kogan’s COO and CFO, David Shafer, is positive on the acquisition. He said:

The acquisition of Brosa by Kogan will broaden the online furniture offering of the Kogan Group, providing unprecedented range and value to Brosa customers, while also expanding the range of furniture and homewares available to Kogan customers. We are pleased to be able to offer a lifeline to Brosa customers, to be able to save the Brosa brand, and to relaunch Brosa.com.au very shortly. Following years of investment in brand-building and marketing, Brosa is a well known online furniture brand in Australia, and we are delighted to be able to bring the brand within the Kogan Group.

The post Why is the Kogan share price charging higher today? appeared first on The Motley Fool Australia.

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More reading

• Why this one top fund manager is optimistic about 2023, and one little-known IPO that has hit it out of the park
• This Kogan director (and Boost founder) just tripled her holding of Kogan shares
• 5 of the craziest things making news on the ASX this week
• Why Kogan, Nick Scali, PointsBet, and Sayona Mining shares are pushing higher
• Kogan share price jumps 13% as boss touts ‘return to historic growth trajectory’

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 Kogan.com. The Motley Fool Australia has positions in and has recommended Kogan.com. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The BHP Group Ltd (ASX: BHP) share price is pushing higher on Thursday morning.

In morning trade, the mining giant’s shares are up 1% to $46.77.

Why is the BHP share price rising?

Investors have been buying the Big Australian’s shares this morning after it announced an agreement to acquire copper miner OZ Minerals Limited (ASX: OZL).

According to the release, after a four-week exclusive due diligence period, the two parties have entered into a scheme implementation deed that will see BHP acquire 100% of OZL by way of a scheme of arrangement for a cash price of $28.25 per share.

This agreement is on the same terms as BHP’s non-binding indicative proposal that was revealed on 18 November 2022.

The cash price of $28.25 per share equates to an enterprise value of $9.6 billion and represents a 49.3% premium to where OZ Minerals shares were trading prior to its initial proposal back on 5 August.

The scheme comes with a break fee of $95 million and allows for a dividend of up to $1.75 per share to be paid by OZ Minerals. However, the offer price will reduce in line with this dividend.

Unanimous support

The OZ Minerals board has unanimously recommended that its shareholders vote in favour of the scheme, in the absence of a superior proposal and subject to the independent expert’s report.

Each OZ Minerals director intends to vote their shares in favour of the scheme, subject to the same conditions.

BHP’s CEO, Mike Henry, was pleased with the news and believes the combination of the two miners will unlock opportunities that wouldn’t be possible separately. He said:

The combination of BHP and OZL’s assets, skills and technical expertise provides a unique opportunity not available under separate ownership, with complementary resources including the Oak Dam exploration prospect and existing facilities within close proximity, backed by BHP’s strong balance sheet, capital discipline and commitment to sustainable development. We thank the OZL Board and management for their engagement through the due diligence process and look forward to working together to continue to take steps forward to complete the transaction.

The post BHP share price higher on OZ Minerals $9.6b takeover agreement appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Goldman tips record copper prices in 2023. Which ASX shares have exposure?
• Up 20% in a month, can the BHP share price continue it’s run in December?
• ‘Long & bullish’: Expert picks 2 ASX shares to buy as investors flock back to market
• Climate and energy: Analyst tips 2 ASX shares perfectly placed for global crises

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

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A share market expert is predicting a Santa rally could still be on the way this year.

CNBC TV personality and expert stock picker Jim Cramer believes “Christmas is not going to be cancelled for Wall Street” this year.

So could this impact the S&P/ASX 200 Index (ASX: XJO) too? Let’s take a look.

What is a Santa rally?

Firstly, a Santa rally is a trend of the stock markets to outperform in the lead-up to Christmas, or just after Christmas.

A Santa rally generally is meant to take place in either the five days leading up to Christmas. Or, the last five trading days of the year.

When to buy?

A Santa rally in the United States could still be on the way, according to CNBC’s Jim Cramer. As a stock market devotee, Cramer delivered average annual returns of 24% over 14 years between 1988 to 2000.

Cramer said the best time to buy could be this Thursday, citing charts from 60-year trading veteran Larry Williams. Williams is known for trading his own money live at seminars around the world.

The charts suggest the market “may have just entered a seasonal sweet spot,” Cramer said. He added:

The charts, as interpreted by Larry Williams, suggest that Christmas is not going to be cancelled for Wall Street – he thinks we still have a Santa Claus rally coming, and the ideal time to buy is sometime around this Thursday.

I know it’s hard to believe that the market’s ready to run, but that’s how it always is with Larry’s calls. Although it’s possible this year will be different, historically, betting against him has been a real bad strategy.

Could the Santa rally impact the ASX 200?

The ASX 200 could follow in the footsteps of Wall Street with a Santa rally, according to City Index senior market analyst Matt Simpson.

Simpson highlighted that the ASX 200 has returned an average of 1.7% in December over the last 30 years. In comments provided to The Motley Fool, he said:

If Wall Street can muster up a rally into the back of the year, so can the ASX 200.

December usually generates excitement of a ‘Santa’s rally’, which can be justified with an average return of 1.7% in December over the past 30-years. Yet in recent years this positive expectancy has diminished, with an average return of 0.9% over the past 10 years and -2.6% over the past 5 years.

In a nutshell, I think we can see a bounce on the ASX from here but remain sceptical of it breaking to new highs. We’ll take it if it does, but it would be a bonus at this point.

The post Not too late for a Santa rally: expert appeared first on The Motley Fool Australia.

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More reading

• Buy Westpac and this ASX 200 dividend share: brokers
• Here’s what Goldman Sachs is now saying about the Pilbara Minerals share price
• Stock market correction: How I’m using this opportunity to build wealth with ASX shares
• Guess which ASX 200 share turned a $10,000 investment into $40,000 in 2022
• Mineral Resources is a ‘formidable player in the lithium market’: Broker tips major share price gains

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

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If you’re looking for ASX 200 dividend shares to buy, then the two listed below could be worth considering. Both have been named as buys by top brokers and tipped to provide investors with attractive yields.

Here’s what you need to know about these ASX 200 dividend shares:

Collins Foods Ltd (ASX: CKF)

The first ASX 200 dividend share that could be worth considering is Collins Foods.

Collins Foods is one of the largest operators of KFC restaurants in Australia and has a growing presence in Europe.

While its performance in 2022 has been disappointing due to inflationary pressures and the significant underperformance of the Taco Bell brand, Morgans believes that investors should be patient and remains positive on the company’s long term outlook.

As a result, it appears to see recent share price weakness as a buying opportunity. The broker has an add rating and $9.50 price target on its shares.

In respect to dividends, Morgans is expecting fully franked dividends of 24 cents per share in FY 2023 and 26 cents per share in FY 2024. Based on the current Collins Foods share price of $7.04, this will mean attractive dividend yields of 3.4% and 3.7%, respectively.

Westpac Banking Corp (ASX: WBC)

Another ASX 200 dividend share that could be a buy is Westpac.

Goldman Sachs is positive on Australia’s oldest bank and has named it as its top option in the banking sector right now. The broker has a conviction buy rating and $27.60 price target on Westpac’s shares.

Goldman is a fan of Westpac due to its positive net interest margin (NIM) trajectory, its cost reduction target, and attractive valuation.

In respect to its NIM, Goldman highlights that “management’s guidance on its FY23 NIM trajectory was better than we had previously anticipated.” This could bode well for its earnings and dividends in the near term.

Speaking of which, the broker is forecasting fully franked dividends of 148.4 cents per share in FY 2023 and 160 cents per share in FY 2024. Based on the current Westpac share price of $23.55, this will mean yields of 6.3% and 6.8%, respectively.

The post Buy Westpac and this ASX 200 dividend share: brokers appeared first on The Motley Fool Australia.

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More reading

• 2 reasons to buy CBA shares before 2023 (and 2 reasons to sell)
• I’d buy these 3 ASX 200 shares in 2023 and hold them for a decade
• Little downside protection for popular ASX 200 shares as 2023 looms a much tougher year for blue chip stocks
• Are Westpac shares worth buying now for dividend income in 2023?
• Start generating extra income by investing $5 a day in ASX shares. Here’s how

Motley Fool contributor James Mickleboro has positions in Collins Foods and Westpac Banking. 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 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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The Pilbara Minerals Ltd (ASX: PLS) share price has been having a tough time lately.

As you can see below, after rising strongly between July and November, the lithium miner’s shares have pulled back materially.

Investors may now be wondering if this has created a buying opportunity for investors. Let’s take a look.

Is the Pilbara Minerals share price now in the buy zone?

According to a note out of Goldman Sachs, its analysts continue to sit on the fence with this one despite the recent weakness.

This morning’s note reveals that Goldman has retained its neutral rating on the company’s shares. Though, it is worth highlighting that the broker’s improved price target of $4.70 implies meaningful upside potential.

Based on the latest Pilbara Minerals share price of $3.84, it suggests upside of 22% for investors over the next 12 months.

Goldman is also expecting a fully franked 21.4 cents per share dividend in FY 2023, which represents a 6% yield. This stretches the total potential return to 28%. Not bad for a neutral rating!

What did the broker say?

The broker’s main qualm is the valuation of the Pilbara Minerals share price, which it feels is about fair based on its long term spodumene price forecasts. It said:

While near-term prices support a strong c.10-20% FCF yield over and above planned incremental capex spend, we see this as priced in trading at ~1x NAV on GSe LT US$1,000/t spodumene (peer average ~1x)

Lithium price and cost blow outs

Goldman also commented on yesterday’s news relating to lithium pricing and its increased capital expenditure for the P680 project. It believes the former more than offsets the latter. The broker explained:

PLS has revised the P680 project capex to ~A$404mn, largely on material/equip, acceleration to maintain delivery schedule, and labour costs, with commissioning still on track for 2H CY23. FID for the P1000 project is now scheduled 1Q CY23, though ~A$38mn pre-FID funding was approved to procure long-lead items. However completed price reviews with major offtake customers drives stronger FY23E realised pricing and more than offsets the higher capex in our view.

The post Here’s what Goldman Sachs is now saying about the Pilbara Minerals share price appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Thursday
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Pilbara Minerals share price leaps on positive lithium price update
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• While the ASX 200 struggled in 2022, investors doubled down on lithium shares. Here’s why

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

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I’ve been taking advantage of this ASX stock market correction to invest in a number of compelling ideas. I think this period can help me grow wealth at a quicker pace.

It’s not often that the ASX share market goes through this level of volatility. Yet, this was the second time in three years that the share market has gone through a major decline. The other plunge was the COVID-19 crash, but that was a fairly short-lived drop.

Hamburger shopping

For me, while some people pull back from investing during times of weakness, I think that’s a good time to go hunting for opportunities.

One of my favourite quotes from Warren Buffett could provide wise advice during this uncertain time. In 2001, the sage of Omaha said:

To refer to a personal taste of mine, I’m going to buy hamburgers the rest of my life. When hamburgers go down in price, we sing the ‘Hallelujah Chorus’ in the Buffett household. When hamburgers go up in price, we weep. For most people, it’s the same with everything in life they will be buying – except stocks. When stocks go down and you can get more for your money, people don’t like them anymore.

To me, it makes total sense to invest when the ASX shares we want are at a discount, rather than expensively priced.

I see some very solid businesses that are down substantially, such as the Xero Limited (ASX: XRO) share price and the Wesfarmers Ltd (ASX: WES) share price.

Higher interest rates may justify some of the decline in valuation terms, but they are down heavily regardless of what the central banks are doing.

Why I’m taking advantage of this ASX stock market correction

Time will tell what this tricky period does to the earnings of businesses. But I do know that many share prices are now lower than they were last year.

For many names, we have seen a significant decline in the price-to-earnings (p/e) ratio.

If a business is currently at a p/e ratio of 20 after a share price decline due to the uncertainty, but if the p/e ratio then rises to 22 simply because some investor confidence returns, that’s a potential 10% capital return.

Another example of how this correction can help grow wealth is through higher dividend yields, improving the annual cash returns.

For example, if a company had a dividend yield of 5% before the decline and then the share price dropped 20%, the dividend yield would be 6% for prospective investors. An extra 1% per annum could make a noticeable difference to wealth-building over a decade.

Even if investors don’t want to invest in any specific names, they can use the volatility to buy a piece of the whole global share market with an exchange-traded fund (ETF) like the Vanguard MSCI Index International Shares ETF (ASX: VGS).

I don’t know when the next crash will be, but I don’t think we’ll see this level of uncertainty very often, which is why I view this period as a limited-time offer to buy discounted ASX shares.

The post Stock market correction: How I’m using this opportunity to build wealth with ASX shares appeared first on The Motley Fool Australia.

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More reading

• Don’t try to predict where ASX shares go in 2023, do this instead: Scott Phillips
• Top ASX growth shares to buy for a stock market rebound
• 3 reasons to buy the Vanguard MSCI Index International Shares ETF (VGS) before 2023
• Why this blue-chip stock is a no-brainer buy for dividend growth investors
• Would you be rich if you’d invested in these ASX shares 10 years ago?

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 Xero and Vanguard MSCI Index International Shares ETF.. The Motley Fool Australia has positions in and has recommended Wesfarmers and Xero. 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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