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It’s been a rough year for S&P/ASX 200 Index (ASX: XJO) investors, as many of the market’s favourite shares suffered amid a downturn.

As of this morning, the ASX 200 is 6.25% lower than it was at the start of 2022. But not all has been dire on the Aussie bourse.

If an investor were to have bought $10,000 of one ASX 200 share at the start of 2022, they would have quadrupled their money by now.

So, which stock has managed to post a return on investment above 300% this year? It was Whitehaven Coal Ltd (ASX: WHC).

The ASX 200 share that returned more than 300% in 2022

The coal producer’s stock has had a ripper run this year as the conflict in Ukraine drove the black rock’s value through the roof. That pushed the company’s bottom line sky high.

Whitehaven posted a near-1,400% jump in earnings for financial year 2022 and returned to profit, ending the fiscal year $1.9 billion in the green.

The company has also vowed to buy back 35% of its outstanding stock. It snapped up 10% of its shares between March and October before announcing its plan to buy back another 240 million over the following 12 months.  

All that likely helped drive the Whitehaven share price upwards. It’s gained 290.58% year to date to trade at $10.78 today.

However, looking back at its first close of 2022, the stock was swapping hands for just $2.76.

That means a $10,000 investment on 4 January would probably have seen one buy 3,623 shares in the ASX 200 coal giant. Today, that parcel would be worth $39,055.94.

Whitehaven also returned to dividend this year. It paid investors 8 cents per share in March and 40 cents per share in September.

Thus, our imagined investment would have also yielded $1,739.04 of passive income in 2022.

Our figurative investor could have realised even greater returns if they compounded their dividends by reinvesting them in the stock.

All up, a $10,000 investment in the ASX 200 share would have returned 308% amid 2022’s downturn.

Perhaps Whitehaven’s incredible year-to-date performance proves there will nearly always be wealth-building opportunities among ASX shares, no matter how dire the market may appear.

The post Guess which ASX 200 share turned a $10,000 investment into $40,000 in 2022 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 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
• Here are the top 10 ASX 200 shares 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 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 Mineral Resources Ltd (ASX: MIN) share price has been a very strong performer in 2022.

Since the start of the year, the mining and mining services company’s shares have risen an impressive 38%, as you can see below.

This compares very favourably to the performance of the S&P/ASX 200 Index (ASX: XJO), which is down 6.25% year to date.

Can the Mineral Resources share price keep rising?

The good news is that one leading broker believes the Mineral Resources share price can keep climbing from here.

According to a note out of Morgans, its analysts have initiated coverage on the company with an add rating and $94.00 target price.

Based on its current share price of $80.70, this implies potential upside of 16.4% for investors over the next 12 months.

But it gets better! Morgans is expecting the company to pay a fully franked $4.81 per share dividend in FY 2023. This represents a 6% dividend yield, stretching the total potential return beyond 22%.

‘Formidable’

Morgans has been impressed with the company’s transformation and notes that it is now a “formidable resource player with lithium clout.” It commented:

MIN is a business that is transforming from being primarily leveraged to high-cost / shortlife iron ore operations to low-cost / long-life iron ore and lithium assets. […] MIN is the world’s largest crushing contractor, a top five global lithium producer, a top five Australian iron ore producer, and the largest landholder in the Perth Basin (gas/condensate). It is a formidable founder-led business.

MIN has developed into a formidable player in the lithium market with lithium spodumene and lithium hydroxide production across its Mt Marion and Wodgina operations. Using the current lithium market strength to its advantage, MIN is working hard to expand all parts of its lithium business.

Very strong result expected in FY 2023

Morgans is expecting a very strong result in FY 2023 thanks to favourable iron ore and lithium prices. It said:

Riding the current upcycle in lithium and iron ore prices, we expect EBITDA to triple in FY23 to ~A$3.3bn. This would see the dividend yield jump to 6.1%, a significant increase on FY22 when MIN did not pay an interim dividend.

In light of this and thanks to its strong growth outlook, the broker sees value in the Mineral Resources share price at the current level. It adds:

Unlike the vast majority of its ASX-listed peer group, MIN is a growth story. This growth, from projects such as Onslow (iron ore), hydroxide growth, and Wodgina ramp up, will help to unlock value for MIN (or help offset any broader volatility).

The post Mineral Resources is a ‘formidable player in the lithium market’: Broker tips major share price gains appeared first on The Motley Fool Australia.

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More reading

• 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
• 5 things to watch on the ASX 200 on Thursday

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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One of the leading S&P/ASX 200 Index (ASX: XJO) dividend shares could be a top pick for passive investment income for years to come. I’m talking about APA Group (ASX: APA) shares.

With so much uncertainty and volatility amid high inflation and rising interest rates, it’s difficult to predict how resilient some dividends are going to be in 2023 and beyond.

There are plenty of retailers that could see lower profits and dividends in FY23. Some ASX resources shares could also see a dividend drop.

While dividends are not guaranteed, I think there are a few names that could pay a larger dividend next year and in future years.

I think the ASX 200 dividend share APA could be a robust pick. Interestingly, the APA share price has gone up 8% in 2022 to date, despite many other ASX shares feeling some pain.

What it does

APA says that it has around 30,000 km (and growing) of natural gas mains and pipelines, connecting sources of supply to markets across mainland Australia.

It operates and maintains gas networks that connect 1.4 million Australian homes and businesses to natural gas.

The business owns, or has interests in, gas storage facilities, gas-fired power stations, and renewable energy generation (wind and solar).

Dividend credentials

APA is one of the few ASX 200 dividend shares that grew its shareholder payout during COVID-19.

The gas infrastructure business funds its distributions from the cash flow that is generated. APA is looking to generate more cash flow as it builds more pipelines. It invested over $500 million in growth projects in FY22.

Two key projects include the $270 million spend on stage 1 and stage 2 expansion of the east coast grid, which the company says “will help address forecast winter gas shortfalls as well as facilitate the firming on renewables” and the $460 million Northern Goldfields Interconnect.

APA has grown its distribution every year for the past decade and a half. It’s expecting to grow its payout by another 3.8% to 55 cents per security. APA recently grew its interim distribution by 4% to 25 cents per security.

This works out to be a forward distribution yield of 5% from the ASX 200 dividend share.

Increasing investment in non-gas assets

Looking ahead beyond 2023, I think APA is doing the right thing by investing in things like renewable energy, such as the Mica Creek solar farm. Another example is the Gruyere solar farm and battery storage.

APA said that greater policy certainty is now providing opportunities for APA to invest in electrification, renewables, and new energy technologies.

The business also recently announced it was going to acquire Basslink for $773 million. Basslink owns and operates the 370km high voltage direct current electricity connector between Victoria and Tasmania.

The acquisition will include contracts in place with Hydro Tasmania and the State of Tasmania to provide “predictable revenues whilst APA works to convert Basslink to a regulated asset”.

Potential for hydrogen

APA is looking to future-proof its business by investigating whether its pipelines can be used to transport hydrogen, particularly a blend of hydrogen and gas.

The ASX 200 dividend share is working on a number of hydrogen-related projects including phase 2 of the Parmelia gas pipeline hydrogen project. It’s also working on feasibility studies for the Central Queensland hydrogen project and the mid-West blue H2 and carbon capture and storage (CCS) project.

If it’s successful in making its gas pipelines suitable for hydrogen, then it can extend the life of its assets for longer.

The post One ASX 200 dividend share to buy for passive income in 2023 and beyond appeared first on The Motley Fool Australia.

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More reading

• Can a high-yield ASX dividend stock still be safe?
• 2 ASX dividend shares that have raised their payouts by 20% in 5 years
• 3 ASX 200 dividend shares that could provide a lifetime of passive income
• Could our dividends now be too reliant on ASX 200 oil shares?
• 5 ASX 200 dividend shares to build your portfolio around

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 positions in and has recommended APA 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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The Telstra Group Ltd (ASX: TLS) share price has risen slightly in the last month, but is it a buy or sell?

Telstra shares have climbed 2% in the last month and are currently fetching $4.02. On Wednesday, Telstra shares closed 0.5% lower for the day.

Let’s take a look at the outlook for the Telstra share price.

Is Telstra a buy or sell

Telstra is the largest telecommunications company in Australia by market share. However, broker coverage on the Telstra share price is mixed.

Seneca investment adviser Tony Langford is recommending investors look elsewhere for more attractive share price growth. Yet, he highlighted Telstra’s “defensive qualities” and dividend yield. Commenting on The Bull, he said:

Telstra appeals for its defensive qualities and dividend yield in volatile markets. At its full year results, Telstra forecast total income to range between $23 billion and $25 billion in fiscal year 2023.

But we believe investors can find more attractive share price growth elsewhere. The shares were priced at $4.26 on January 18. The shares were trading at $4.04 on December 15.

On the flip side, Morgans recommended shareholders buy Telstra in December. The broker placed a $4.60 price target on the company’s shares.

As my Foolish colleague James reported, Morgans is positive on the telco’s earnings momentum and balance sheet. The broker also believes Telstra’s InfraCo business can generate more value for shareholders. Morgans is also tipping Telstra to pay fully franked dividends of 16.5 cents per share in FY 2023 and FY 2024. Analysts said:

After a major turnaround, TLS has emerged in good shape with strong earnings momentum and a strong balance sheet. In late CY22 shareholders vote[d] on Telstra’s legal restructure, which opens the door for value to be released. […] TLS currently trades on ~7x EV/EBITDA.

However some of TLS’s high quality long life assets like InfraCo are worth substantially more, in our view. We don’t think this is in the price so see it as value generating for TLS shareholders.

In news on Wednesday, the Australian and Competition and Consumer Commission (ACCC) has blocked Telstra’s proposed regional mobile network deal with TPG Telecom Ltd (ASX: TPG) due to competition concerns.

The agreement would have provided TPG with access to 3,700 of Telstra’s mobile network assets. Telstra would also have gained access to TPG’s spectrum on the 4G and 5G network, delivering between $1.6 billion and $1.8 billion over 10 years.

Share price snapshot

The Telstra share price has descended 2.66% in the last year.

Telstra has a market capitalisation of about $46.6 billion based on the current share price.

The post Should you buy Telstra shares for their ‘defensive qualities’? appeared first on The Motley Fool Australia.

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More reading

• Why BWX, Novonix, Symbio, and TPG shares are dropping today
• Telstra share price lower after ACCC blocks TPG deal
• 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
• Building a passive income for retirement? Check out these ASX 200 dividend shares – analysts

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 positions in and has recommended Telstra Group. The Motley Fool Australia has recommended TPG Telecom. 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 building a retirement portfolio, then you may be on the lookout for quality ASX dividend shares to buy. Two unstoppable ASX dividend shares that could act as the foundation of a portfolio are named below.

Both of these ASX dividend shares have bright long term growth prospects and provide investors with attractive yields. Another positive is that analysts believe they are trading at levels that offer meaningful upside potential for investors.

Here’s what analysts are saying about them:

Transurban Group (ASX: TCL)

The first ASX dividend share that could be a top option for an retirement portfolio is Transurban.

Transurban is one of the world’s leading toll road operators. It owns a portfolio of integral roads such as CityLink in Melbourne, the Cross City Tunnel in Sydney, and AirportlinkM7 in Brisbane. It also has a lucrative pipeline of development projects that look likely to be supportive of growth over the next decade and beyond.

Analysts at JP Morgan are positive on the company and have a buy rating and $15.00 price target on its shares. The broker has been pleased with improving traffic trends and highlights the company’s positive exposure to inflation.

As for dividends, JP Morgan expects dividends per share of 60 cents in FY 2023 and then 63 cents in FY 2024. Based on the current Transurban share price of $13.69, this implies yields of 4.4% and 4.6%, respectively.

Woolworths Limited (ASX: WOW)

Another ASX 200 dividend share for investors to consider for a retirement portfolio is retail giant Woolworths.

It is the company behind the eponymous supermarket chain, Countdown supermarkets in New Zealand, and Big W. In addition, the company has been boosting its exposure to the pet accessories and food market through recent acquisitions.

Goldman Sachs is a fan of the company and appears to see it as a great option for a portfolio. So much so, it has a conviction buy rating and $41.70 price target on the company’s shares.

The broker likes Woolworths due to its belief that it is on a “pathway to deliver ~3% sales and ~9% NPAT FY22-25e CAGR.” It also feels that share price weakness this year is “providing a value entry point to a quality player.”

As for dividends, the broker is forecasting fully franked dividend yields of 3% in FY 2023, 3.3% in FY 2024, and 3.5% in FY 2025.

The post Building a retirement income portfolio? Buy these unstoppable ASX dividend shares – analysts appeared first on The Motley Fool Australia.

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More reading

• Little downside protection for popular ASX 200 shares as 2023 looms a much tougher year for blue chip stocks
• Bought $1,000 of Woolworths shares 10 years ago? Here’s how much dividend income you’ve received
• Brokers name 2 ASX dividend shares to buy next week
• Shopping spree: What happened to the Woolworths share price today?
• Brokers name 3 ASX shares to buy today

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

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The ASX share market has seen plenty of volatility this year. After such a rocky year, investors are now turning attention. How are things going to go?

‘Invest for the long term’ is an often-advised suggestion when it comes to ASX shares. But, it can be easy to get wrapped up in what’s going to happen next month or even next year.

I’d guess that many people aren’t investing with a one-year timeline in mind, so why do people focus so much on the short-term forecast?

Investors that can see through the noise of short-term thoughts and volatility may be able to identify long-term opportunities.

Don’t predict, but 2023 could be bumpy

The Motley Fool’s Scott Phillips was recently asked about what might happen in 2023. His response was full of wise words. Phillips’ initial response was:

Let me start with a quote from JP Morgan himself, not JP Morgan, the investment bank, JP Morgan, John Pierpont Morgan himself. When asked what the market will do, he gave the very best answer. He said it will fluctuate. So that’s my prediction for 2023.

My prediction is, people are going to keep predicting. But my advice is, don’t try to predict what’s going to happen next.

But what I would say about 2023, is a bit like I talked about in 2022, prepare for what’s likely to be a bumpy ride. I say bumpy ride economically, but also on the market because we simply don’t know what’s coming next.

But, he did point out that national savings is declining, which could mean there’s “less money going to be spent”.

Phillips also suggested that the RBA rate rises to reduce inflation could put pressure on discretionary spending and on the economy in general.

He suggested that the combination of headwinds that are happening right now raises “the rise of a potential recession in Australia over the next six months”. However, for now, the RBA is not predicting an official recession – it thinks the economy could grow 1.5% in 2023 and 2024.

We have seen the fall of the share prices of some ASX retail shares in anticipation of a downturn, such as Wesfarmers Ltd (ASX: WES).

Think about ASX shares for the long term

Phillips also said that investors are trying to focus on the little things, rather than being largely correct about the big picture.

He pointed out that it’s not the short term, but the long term that counts with ASX shares. Look at the great businesses that can keep getting stronger:

People are so desperately trying to get the little things right. And maybe missing the opportunities. Just get the big thing, right.

My broad point is, businesses that are going to be meaningfully bigger and better in five or 10, 15 years time, it doesn’t matter what happens to the next year, it’s just completely irrelevant. As long as they make it through without going broke. You need to make sure they’re not going to go broke — so careful of debt — and be a business that’s going to be able to maintain a lead in front of their competitors. Whether it’s product or price or brand or cost or something, whatever separates them from the rest. The best businesses tend to keep getting better.

The post Don’t try to predict where ASX shares go in 2023, do this instead: Scott Phillips appeared first on The Motley Fool Australia.

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More reading

• Why this blue-chip stock is a no-brainer buy for dividend growth investors
• Bought $1,000 of Wesfarmers shares 10 years ago? Here’s how much dividend income you’ve received
• If I was 40 and had never invested, here’s how I’d aim to build a $500,000 ASX share portfolio
• Should you buy Wesfarmers stock before it pops?
• Morgans names 2 of the best ASX 200 dividend shares to buy in December

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 positions in and has recommended Wesfarmers Limited. 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 Wednesday, the S&P/ASX 200 Index (ASX: XJO) was back on form and charged notably higher. The benchmark index rose 1.3 % to 7,115.1 points.

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

ASX 200 expected to rise

The Australian share market looks set to rise again on Thursday following a strong night of trade on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 52 points or 0.75% higher this morning. In late trade in the United States, the Dow Jones is up 1.6%, the S&P 500 has risen 1.55%, and the NASDAQ has climbed 1.7%.

Oil prices charge higher

Energy shares Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a solid day after oil prices charged higher on Wednesday night. According to Bloomberg, the WTI crude oil price is up 2.75% to US$78.33 a barrel and the Brent crude oil price is up 2.85% to US$82.26 a barrel. Oil prices climbed after data showed a larger-than-expected draw in U.S. crude stockpiles.

Goldman retains its neutral rating on Pilbara Minerals

Despite recent weakness in the Pilbara Minerals Ltd (ASX: PLS) share price, Goldman Sachs has retained its neutral rating with an improved price target of $4.70. The broker 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).”

MinRes rated as a buy

The Mineral Resources Ltd (ASX: MIN) share price could be good value according to analysts at Morgans. This morning, the broker initiated coverage on the miner and mining services company with an add rating and $94.00 target price. It said: “MIN is a business that is transforming from being primarily leveraged to high-cost / shortlife iron ore operations to low-cost / long-life iron ore and lithium assets.”

Gold price edges higher

Gold miners Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) could have a mildly positive day after the gold price edged higher overnight. According to CNBC, the spot gold price is up 0.1% to US$1,826.5 an ounce. A firmer US dollar stopped the precious metal from rising further.

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

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More reading

• Could ASX 200 gold shares be ‘at another pivot point’?
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Why are ASX 200 gold shares having such a stellar run today?
• Why European Lithium, Evolution, Medadvisor, and REA shares are charging higher

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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ASX 200 gold shares soared on Wednesday, but could a ‘pivot point’ for the gold price be on the way?

Gold producers on the ASX 200 include Evolution Mining Ltd (ASX: EVN), Newcrest Mining Ltd (ASX: NCM), and Northern Star Resources Ltd (ASX: NST).

Evolution shares surged 8.1% yesterday, while Newcrest Mining shares leapt 6.49%. The Northern Star Resources share price gained 3.99%.

It follows a rise in the spot price of gold which is hovering around its highest level in six months.

Let’s check the outlook for the gold price.

What’s ahead for gold?

Evolution Mining, Newcrest Mining, and Northern Star Resources are all major gold producers. Certainly, the price of gold can impact their cash inflows from gold sales.

Now ANZ commodity strategists Daniel Hynes and Soni Kumari contend gold appears to be at another “pivot point” amid easing inflation.

Hynes and Kumari noted lower-than-expected inflation in the US is putting downward pressure on the US dollar. In an ANZ research report, analysts commented:

This, along with lower real yields, is allowing gold to retest USD1,800/oz. Tactical positioning is largely driving investment demand, but strategic buying of gold ETFs hasn’t emerged. Central bank purchases are robust.

The strategists also noted gold performs predictably around recessions “with some exceptions”. Hynes and Kumari said:

We expect the US to enter a recession in 2023, with GDP falling to 0.2% y/y and contracting by 0.8% q/q in Q3. The economic growth outlook is compounded by weakness in Europe as it faces ongoing geopolitical risks and energy shortages.

This backdrop is typically positive for gold. Gold prices tend to come under pressure ahead of recessions, with returns over the six months before a recession averaging 2%. It then tends to outperform equities during recessions, with average returns of 16%. For the six months after a recession, gold continues to deliver decent gain.

Meanwhile, City Index senior market analyst Matt Simpson has estimated a gold price in 2023 of between US$1600 and US$1900. In comments to the Motley Fool, he noted central banks in China and India are forecast to “continue providing support” for gold in 2023. However, he added:

Yet with the Fed likely to go above 5% interest rates and hold them there, it should cap upside potential for gold.

We therefore expect a ‘below average’ high-to-low range next year. Cycles suggest gold may have printed an important low in September, and enjoy buying pressure in the first half of 2023.

Our estimate range for gold in 2023 is $1600-$1900.

The post Could ASX 200 gold shares be ‘at another pivot point’? appeared first on The Motley Fool Australia.

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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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Are we heading for a global recession in 2023 or is the worst already behind us? With so many conflicting expert opinions floating around, it’s impossible to know with any certainty.

But what we do know for sure is that the stock market has never NOT bounced back to reach new record highs following its down periods.

Whilst a rebound might not happen next week or next month, if history is anything to go by, it will definitely happen.

So, we asked our Foolish contributors which ASX growth shares they think are worth jumping on now to make the most of the coming bounce back.

Here is what the team came up with:

7 ASX growth shares for a bounce back (smallest to largest)

• Temple & Webster Group Ltd (ASX: TPW), $516.22 million
• Jumbo Interactive Ltd (ASX: JIN), $887.81 million
• Life360 Inc (ASX: 360), $1.02 billion
• Webjet Limited (ASX: WEB), $2.34 billion
• Altium Limited (ASX: ALU), $4.61 billion
• Domino’s Pizza Enterprises Ltd (ASX: DMP), $5.67 billion
• Xero Limited (ASX: XRO), $10.3 billion

(Market capitalisations as of 21 December 2022)

Why our Foolish writers love these ASX shares

Temple & Webster Group Ltd

What it does: Temple & Webster is Australia’s largest pure-play online retailer of furniture and homewares. It sells over 200,000 products from hundreds of suppliers, and it also has a drop-ship model, where products are sent directly to customers by suppliers. This enables “faster delivery times, reduces the need to hold inventory, and allows for a larger product range”.

The company also has a private label range and a website called The Build that is focused on home improvement products like flooring, cabinets, plumbing, lighting, curtains, and so on.

By Tristan Harrison: The Temple & Webster share price has sunk by over 60% in 2022 which, in my opinion, makes it look like pretty great value.

While lockdowns 12 months ago make it difficult for the company to beat its year-over-year numbers, it is expecting to return to “double-digit growth during this financial year”.

Temple & Webster is also focused on unit economics and profitability. It’s expecting an earnings before interest, tax, depreciation and amortisation (EBITDA) profit margin of between 3% and 5%. Longer term, margins could improve thanks to more private label sales, marketing and variable cost efficiencies, and scale benefits for key costs like freight and cost of goods.

Adoption of digital shopping for home items in Australia is predicted to rise from its current level of 17% of the whole market. In the United Kingdom, online shopping for furniture and homewares was around 30% of the entire market in 2021. This suggests considerable potential upside for online retailers like Temple and Webster over time.

Motley Fool contributor Tristan Harrison does not own shares of Temple & Webster Group Ltd.

Jumbo Interactive Ltd

What it does: Jumbo Interactive operates an online platform for the sale of lottery tickets and fundraising activities. The company’s platforms are now active across Australiasia, the United Kingdom, and Canada – reaching 4 million active players.

By Mitchell Lawler: This year has not been kind to the Jumbo Interactive share price, despite rather solid results. Since the beginning of 2022, shares in the online lottery operator have tumbled by around 26%.

But, in my mind, Jumbo is in the strongest position it has ever been. The company completed its acquisition of StarVale in November, further strengthening its position in the UK. The deal marks another display of management’s ability to deploy its profits to make earnings-accretive acquisitions globally.

This is a company that generates post-tax profits at a 30% margin and holds nil debt. If the Jumbo management team can continue to efficiently use capital to expand operations, today’s share price could look cheap in the event of a market rebound.

Motley Fool contributor Mitchell Lawler owns shares of Jumbo Interactive Ltd.

Life360 Inc

What it does: Life360 is the technology company behind the eponymous Life360 freemium mobile app, which boasts 47 million monthly active users. It offers users features that range from communications to driving safety and location sharing.

By James Mickleboro: It has been a tough year for the Life360 share price. The market’s sudden aversion to loss-making tech companies means that the company’s shares are down almost 50% year to date. This is despite Life360 expecting to more than double its revenue to between US$225 million and US$240 million this calendar year.

The good news is that its loss-making days are almost over, with management expecting the company to be cash flow positive next year. In the meantime, Life360’s cash balance of approximately US$85 million is materially more than needed to get it through to breakeven.

In light of this, I think now is the time to focus on the company’s very strong, long-term growth potential in a huge US$12 billion total addressable market, globally. I also suspect a re-rating of Life360 shares could happen when the market rebounds and the company achieves positive cash flow.

Motley Fool contributor James Mickleboro owns shares of Life360 Inc.

Webjet Limited

What it does: Most Australians likely know Webjet as an online travel agency, but the company’s business covers much more ground than that. Perhaps its most notable additional foray is its WebBeds business-to-business offering – a provider of accommodation services to the travel industry.

By Brooke Cooper: The Webjet share price has outperformed in 2022, rising almost 20% year to date to trade at $6.18 at the time of writing. However, that’s still around 37% lower than it was prior to the onset of the COVID-19 pandemic.

Fortunately, Goldman Sachs has tipped the stock to regain notable ground. The broker believes Webjet is a conviction buy, recently slapping it with a $6.90 price target.

Such confidence comes as the company exits the pandemic far larger than it entered. And that growth might just be the start.

As my Fool colleague reported last week, Goldman Sachs expects Webjet’s earnings to boast a six-year compound annual growth rate (CAGR) of 15.3%.

Motley Fool contributor Brooke Cooper does not own shares of Webjet Limited.

Altium Limited

What it does: Altium is a multinational software company that focuses on electronics design systems for 3D printed circuit board (PCB) design and embedded system development.

By James Mickleboro: Another ASX growth share I think could be a buy right now is Altium. Although its shares have fared a lot better than some other tech stocks in 2022, they are still down meaningfully compared to the benchmark S&P/ASX 200 Index (ASX: XJO).

And when the market rebounds, I think Altium could rebound along with it. Particularly given the company’s very bright long-term growth prospects.

Thanks to Altium’s leadership position in the industry, and favourable tailwinds such as growth in demand for the Internet of Things and artificial intelligence, management is aiming to grow revenue to US$500 million by 2026 with an EBITDA margin of 38% to 40%.

This will be more than double FY2022’s revenue of US$220.8 million and an improvement on FY2023’s EBITDA margin guidance of 35% to 37%. I expect this to underpin strong profit growth over the coming years, which could help drive Altium shares higher.

Motley Fool contributor James Mickleboro owns shares of Altium Limited.

Domino’s Pizza Enterprises Ltd

What it does: Domino’s is Australia’s largest pizza chain, offering delivery, takeaway, and dine-in restaurant services nationally. It also operates internationally, with a total of over 2,800 stores across 10 markets.

By Matthew Farley: The Domino’s Pizza share price has dropped almost 45% year to date, but some experts believe this lower price now offers great value for investors.

This includes one broker from Morgans who slapped Domino’s shares with a price target of $90 earlier this month. That makes for a potential 38% upside from the current share price, at the time of writing.

The broker went on to say that Domino’s has been battling with the headwinds of lower sales and a higher cost basis for its products. However, these issues were described as being “transitory in nature”. If this proves to be correct, the company’s revenues and margins could be poised to improve significantly, moving forward.

Motley Fool contributor Matthew Farley does not own shares of Domino’s Pizza Enterprises Ltd.

Xero Limited

What it does: Xero is a provider of cloud-based accounting software. The platform helps small-business users efficiently manage the financial and regulatory requirements of running their companies.

By Sebastian Bowen: Xero shares have had a very rough year or so. This was an ASX 200 stock that was trading at more than $150 a share back in November 2021, more than double the current price. So, you’d think that Xero’s business has been facing some kind of calamity.

Well, not quite. Back in May, Xero reported that it had grown subscribers by 19%, revenues by 29% and earnings by 11% over the 12 months to 31 March 2022.

More recently, Xero reported a 30% rise again in revenues covering the six months to 30 September 2022, with earnings up 11% and subscribers growing by 16%.

If there is a stock market rebound next year, I think it’s likely that investors will find a new appreciation for this ASX growth share.

Motley Fool contributor Sebastian Bowen does not own shares of Xero Limited.

The post Top ASX growth shares to buy for a stock market rebound appeared first on The Motley Fool Australia.

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More reading

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• Here’s how I’d invest $10,000 in ASX shares for 2023
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• Would you be rich if you’d invested in these ASX shares 10 years ago?
• Why are ASX 200 tech shares being fried on Friday?

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium, Jumbo Interactive, Life360, Temple & Webster Group, and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Domino’s Pizza Enterprises, Jumbo Interactive, and Temple & Webster 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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If you’re looking to boost your passive income with some dividend shares, then you might want to look at the two listed below.

Both dividend shares are rated as buys and expected to provide investors with attractive yields in the near term. Here’s what you need to know about them:

Healthco Healthcare and Wellness REIT (ASX: HCW)

The first ASX dividend share to look at is the Healthco Healthcare and Wellness REIT.

Goldman Sachs is a fan of this health and wellness focused real estate investment trust. This is due to its strong balance sheet, positive tenant mix, and the resilient valuations in the healthcare sector. It commented:

[T]he REIT remains one of our top picks in the sector given 1) its net cash position with over $450mn of liquidity, providing flexibility for near term opportunities, 2) its diversified mix of strong tenant covenants in sub-sectors that are majority government-backed across the care spectrum, mitigating potential tenant credit risks, 3) Healthcare and childcare assets valuations have remained resilient, 4) the expansive forecast future demand for assets across the care spectrum, underpinning development opportunities, and 5) inexpensive valuation.

Goldman has a conviction buy rating and $2.05 price target on its shares.

In addition, the broker is forecasting dividends per share of 7.5 cents in both FY 2023 and FY 2024. Based on the current Healthco Healthcare and Wellness REIT unit price of $1.69, this will mean yields of 4.4% for income investors.

Rural Funds Group (ASX: RFF)

Another ASX dividend share that could be a buy is Rural Funds.

It is an agricultural focused real estate investment trust (REIT) that owns a portfolio of assets across a number of agricultural industries. These include orchards, vineyards, water entitlements, cropping, and cattle farms.

Bell Potter is positive on the company and believes its shares are trading at a very inviting level. It recently commented:

Discounts of this magnitude to adjusted NVA have only been seen in the period after its compliance listing (2014-15) and following the issue of the Bonitas short report (in Aug-Sep’19). To this end the current discount to adjusted NAV reflects what historically would be considered an attractive entry point and we upgrade our rating from Hold to Buy.

The broker currently has a buy rating and $2.75 price target on Rural Funds shares.

As for dividends, it is forecasting an 11.7 cents per share dividend in FY 2023 and then a 12.7 cents per share dividend in FY 2024. Based on the current Rural Funds share price of $2.46, this represents yields of 4.75% and 5.15%, respectively.

The post Buy these ASX dividend shares for a passive income boost: analysts appeared first on The Motley Fool Australia.

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More reading

• Brokers name 2 ASX dividend shares to buy next week
• Near a 52-week low, this enticing ASX dividend share could be bottoming out
• Boost your passive income with these ASX dividend shares: analysts
• 2 ASX dividend shares that have raised their payouts by 20% in 5 years
• 40% sale! 2 cheap ASX shares to buy for a better 2023: fundie

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 Rural Funds 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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