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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record small decline. At the time of writing, the benchmark index is down 0.1% to 7,662.4 points.

Four ASX shares that are not letting that hold them back today are listed below. Here’s why they are rising:

Bannerman Energy Ltd (ASX: BMN)

The Bannerman Energy share price is up 6% to $3.18. This has been driven by the release of scoping study results for the uranium developer’s Etango operation in Namibia. The company revealed that two future phase options have been evaluated. These are a post ramp-up expansion in throughput capacity to 16 Mtpa (Etango-XP) or an extension of operating life to 27 years (Etango-XT). Its Executive Chair said: “I am delighted that we have more formally demonstrated the longer-term optionality delivered by our large-scale Etango uranium resource. While the XP and XT cases are readily viable at our base case Etango-8 DFS price assumption of US$65/lb, their economics are clearly supercharged in higher price scenarios.”

Cettire Ltd (ASX: CTT)

The Cettire share price is up 3.5% to $4.16. This morning, the team at Bell Potter reaffirmed their buy rating and $4.80 price target on this luxury products ecommerce company’s shares. It commented: “We think CTT’s ability to outperform their peer group far outweighs others given the ~0.9% market share and further supported by the ongoing consolidation in the luxury e-commerce market.”

TechnologyOne Ltd (ASX: TNE)

The TechnologyOne share price is up almost 3% to $16.95. This has also been driven by a broker note out of Bell Potter this morning. According to the note, its analysts have upgraded the enterprise software provider’s shares to a buy rating with an $18.50 price target. Bell Potter expects a strong half-year result from TechnologyOne in May. It said: “We see the 1HFY24 result as a potential catalyst with an expected strong result and an NRR [net revenue retention] around 115%.”

Zip Co Ltd (ASX: ZIP)

The Zip share price has continued its positive run and is up a further 4.5% to $1.35. This buy now pay later provider’s shares have been on fire this year thanks to its strong first-half performance and takeover rumours. In addition, last week Citi upgraded the company’s shares to a buy rating with an improved price target of $1.40. Citi has been impressed with the company’s performance and particularly its balance sheet improvements.

The post Why Bannerman Energy, Cettire, TechnologyOne, and Zip shares are charging higher appeared first on The Motley Fool Australia.

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More reading

• Ignore the noise and buy this hot ASX growth stock
• This ASX uranium stock is racing 8% higher on big news
• Guess which ASX 200 tech stock has just been upgraded
• 5 things to watch on the ASX 200 on Monday
• If I’d put $5,000 into Zip shares on 9 October, here’s what I’d have now!

Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 Technology One and Zip Co. The Motley Fool Australia has recommended Cettire and Technology One. 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 S&P/ASX 200 Index (ASX: XJO) is having a subdued session on Monday. In afternoon trade, the benchmark index is down slightly to 7,666.3 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

Arafura Rare Earths Ltd (ASX: ARU)

The Arafura Rare Earths share price is down over 10% to 21 cents. This is despite there being no news out of the rare earths developer. However, it is worth noting that its shares were on fire last week thanks to some huge news. This could mean that some investors are taking profit off the table on Monday. The announcement that got them excited was that the Commonwealth Government has conditionally approved a US$533 million debt finance package to support its Nolans Project in the Northern Territory.

Core Lithium Ltd (ASX: CXO)

The Core Lithium share price is down 10% to 16.2 cents. This appears to have been driven by the release of a broker note out of Macquarie this morning. According to the note, the broker has reaffirmed its neutral rating but slashed its price target on the lithium miner’s shares by 25% to 15 cents (from 20 cents). Macquarie has downgraded its lithium price assumptions for the coming years.

Goodman Group (ASX: GMG)

The Goodman share price is down 3.5% to $29.77. This decline seems to have been driven by rising bond yields, which have reduced the appeal of property shares with investors. It isn’t just Goodman shares that are falling today. At the time of writing, the S&P/ASX Real Estate index is down 1.9% on Monday afternoon. This makes it the worst performing area of the market.

Superloop Ltd (ASX: SLC)

The Superloop share price is down over 6% to $1.17. This has been driven by news that the telco has instructed its rival Aussie Broadband Ltd (ASX: ABB) to sell down its stake in the company. Superloop issued a notice under its constitution directing Aussie Broadband to dispose of approximately 37.6 million ordinary shares to reduce Aussie Broadband’s voting power in Superloop to less than 12%. This is from 19.9% currently. Superloop advised: “The acquisition was made without the prior approval of the Info-communications Media Development Authority (IMDA) in Singapore, as required by Superloop’s constitution.” It is possible the selling has now commenced.

The post Why Arafura Rare Earths, Core Lithium, Goodman, and Superloop shares are falling today appeared first on The Motley Fool Australia.

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More reading

• Why bond yields are bruising ASX property shares on Monday
• These are the 10 most shorted ASX shares
• Aussie Broadband share price tumbles after telco told to sell $47 million stake in a competitor
• Top brokers name 3 ASX shares to buy next week
• $20,000 invested in these ASX 200 shares 10 years ago is worth how much?

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 Aussie Broadband and Goodman Group. The Motley Fool Australia has recommended Aussie Broadband and Goodman 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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Buying S&P/ASX 200 Index (ASX: XJO) shares and hoping for Reserve Bank of Australia (RBA) interest rate cuts in 2024?

You’re not alone!

It’s hard to believe that less than two years ago, in early May 2022, the official RBA interest rate stood at a rock bottom 0.10%. And over the prior months, some analysts were even forecasting that Australia’s central bank could join its European counterparts and delve into negative interest rates.

How that would have turned out, we’ll never know.

What we do know is that the massive fiscal and monetary stimulus measures pushed through during the COVID pandemic scare stoked what had been labelled ‘stubbornly low’ inflation levels. Inflation down under topped out at a blistering 7.8% in December 2022.

To combat that suddenly resurgent inflation, commencing in May 2022, the RBA hiked interest rates at 10 consecutive monthly meetings.

With three more rate increases over the next eight months, Australia’s official cash rate reached the current 4.35% on 8 November.

The question ASX 200 investors are asking now is, when can the market expect the central bank to begin easing?

Might the next RBA interest rate cut not come until 2025?

Under the new reporting schedule, RBA governor Michele Bullock will announce the bank’s next interest rate decision tomorrow at 2:30pm AEST.

Now only a few optimistic investors are expecting the central bank to cut rates this month.

According to the ASX interest rate indicator, 95% of investors expect the bank to hold rates at 4.35%.

But the market continues to expect one or more RBA interest rate cuts in 2024.

Expectations are high for a 0.25% cut in September, with many investors also pricing in a second reduction in December bringing the official cash rate to 3.85% heading into 2025.

But not everyone is looking through the same rose-coloured glasses.

HSBC chief economist Paul Bloxham believes ASX 200 investors awaiting interest rate relief will need to be patient and await 2025.

According to Bloxham (quoted by The Australian Financial Review):

Although the RBA is patiently seeking to bring inflation down gradually, so as to maintain as close to full employment as possible, fiscal policymakers may not be so patient given the electoral cycle.

Personal income tax cuts are already locked in for July 1, but more spending is a risk in the May budget, with both likely to support inflation, at a time when it is already above target.

Then there’s the blistering Aussie housing market.

“We see the RBA as unlikely to want to cut rates when the housing market is so tight and housing prices are rising solidly, for fear of pump-priming and driving a further housing price boom,” Bloxham said.

Keep your eyes on the horizon

We may see the first RBA interest rate cut in September, and perhaps a second cut in December.

Or we may need to await 2025 for some rate relief.

Either way, ASX 200 investors will do well to keep one eye on the horizon and the other eye peeled for quality companies operating in growing markets that may have been unduly oversold due to market angst over sticky inflation.

As legendary investor Warren Buffett famously advised, “Embrace what’s boring, think long-term, and ignore the ups-and-downs.”

The post Why ASX 200 investors hoping for an RBA interest rate cut may be waiting until 2025 appeared first on The Motley Fool Australia.

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More reading

• 2 ASX growth stocks I’d buy for rapidly rising profit
• Why bond yields are bruising ASX property shares on Monday
• Guess which ASX All Ords share is surging 16% after announcing a new finance chief
• ‘Cheapest’ lithium miner: Broker says Sayona Mining shares could rise 200%+
• ASX 200 investors, have you grabbed your share of the coming $34 billion dividend windfall?

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

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ASX growth stocks can be a really attractive place to hunt for opportunities because of how quickly their profit is compounding. A bigger profit can justify a higher share price, over time.

Businesses that are demonstrating strong growth may give us a greater chance of delivering outperformance of the S&P/ASX 200 Index (ASX: XJO).

Many promising names on the ASX have soared higher, but I think the two I’m going to talk about still have a promising future at the current prices.

Lovisa Holdings Ltd (ASX: LOV)

The Lovisa share price has risen an impressive 63% in the past six months.

But, I think it can keep rising over the long term – even if there is some volatility along the journey.

Lovisa sells affordable jewellery in numerous countries around the world. At the end of the FY24 first-half result, it had 854 stores globally, with its largest markets by store count being the USA (207 stores), Australia (175 stores), France (80 stores), South Africa (77 stores), Germany (51 stores) and the UK (47 stores).

I think its store count can fairly easily double thanks to its presence in countries with much bigger populations than Australia. For example, the US population is more than ten times bigger than Australia.

The ASX growth stock has only just entered a number of markets including Italy, Spain, Hong Kong, mainland China, Vietnam, Canada and Mexico. I believe each of these markets can host a sizeable Lovisa store network.

Lovisa’s HY24 result saw revenue growth of 18.2% to $373 million and earnings before interest and tax (EBIT) growth of 16.3% to $81.6 million.

It’s investing a lot to grow, and I believe its profit can grow significantly in the coming years.

If the Lovisa share price were to see a pullback, I’d want to add some more shares to my portfolio.

GQG Partners Inc (ASX: GQG)

GQG is a large fund manager which is rapidly growing. It now has a market capitalisation of $6.1 billion, with funds under management (FUM) of US$137.5 billion as at 29 February 2024.

It had ending FUM of US$91.2 billion for 2021 and US$120.6 billion for 2023. We can see the business has already made strong progress in 2024 with its FUM of US$137.5 billion.

The 12 months to 31 December 2023 saw the business receive US$10 billion of net flows, with net revenue growth of 18.5% to US$517.6 million and diluted earnings per share (EPS) growth of 19% to US 9.55 cents.

The ASX growth stock also announced the launch of its private capital business and the acquisition of minority interests in Avante Capital Partners, Proterra Investment Partners and Cordillera Investment Partners.  

GQG’s main funds have outperformed their respective benchmarks over the long term. Outperformance isn’t guaranteed, but GQG has shown it has a good investment team.  

The post 2 ASX growth stocks I’d buy for rapidly rising profit appeared first on The Motley Fool Australia.

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More reading

• I think they can! 3 ASX shares that can keep chugging higher
• 3 high-yield ASX dividend shares that pay cash every quarter
• Broker says these ASX growth shares with very bright futures are top buys
• The most profound lesson from Lovisa’s results. What could it mean?
• Top brokers name 3 ASX shares to buy next week

Motley Fool contributor Tristan Harrison has positions in Lovisa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Lovisa. The Motley Fool Australia has recommended Lovisa. 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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It’s shaping up to be yet another rough day for most ASX shares so far this Monday. At present, the S&P/ASX 200 Index (ASX: XJO) has dropped by 0.22% today, leaving the index at just over 7,650 points. But let’s talk about what’s going on with ASX property shares.

Property shares and ASX real estate investment trusts (REITs) are, on the whole, having an even worse day than the broader market. Just take what’s happened to the S&P/ASX 200 A-REIT Index (ASX: XPJ) so far today. This index is currently the worst-performing sector on the entire market, down a hefty 1.61% so far.

Some ASX property shares are faring even worse than their index. Goodman Group (ASX: GMG) units, for instance, are presently nursing a 2.74% loss down to $30.01.

Charter Hall Group (ASX: CHC) has lost 1.86% to $13.20, while HomeCo Daily Needs REIT (ASX: HDN) units have tanked 2.9% down to $1.28.

Scentre Group (ASX: SCG) has retreated by 1.35% down to $3.30 a unit, while Stockland Corporation Ltd (ASX: SGP) is faring better than most with a loss of 0.62% to $4.82.

So why are ASX property shares having such a dire start to the week? It’s likely that rising bond yields are at least playing some role here.

Last week, we covered the latest American inflation numbers, which didn’t exactly delight anyone. US wholesale inflation over the month of February ran at a hot 0.6%, which was double what most economists were expecting to see.

Has American inflation just tanked ASX property shares?

This has resulted in some significant losses on the US markets in recent days and was arguably at least partially responsible for the ASX rout we saw on Friday.

Investors have been spending most of 2024 hoping that inflation will continue to cool, leading to lower interest rates sooner rather than later. Those hot inflation figures poured cold water on this notion.

US government bond yields have been rising ever since this inflation data was released. According to CNBC, a week ago the US Five-Year Treasury note was trading on a yield of 4.08%. Today, that yield is sitting at 4.33% – a massive increase over just one week.

This indicates that investors are sharply revising their expectations of interest rate cuts in the immediate future. And that’s bad news for most ASX shares, but particularly ASX property shares.

Property shares and REITs tend to use relatively high levels of borrowing and gearing, thanks to their ownership of real estate. As such, these investments are more sensitive to interest rate moves than other ASX shares. If a property share like Goodman Group or Scentre has a large debt facility, its interest costs would also be high.

If investors are expecting central banks to lower interest rates in the immediate future, this might not bother investors too much. But if, as seems to be the case this week, investors pivot to expecting higher rates for longer, it arguably makes ASX property shares immediately less desirable by extension.

This could be what is giving this ASX sector a whack today.

The post Why bond yields are bruising ASX property shares on Monday appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy next week
• Here’s how the ASX 200 market sectors stacked up last week
• $20,000 invested in these ASX 200 shares 10 years ago is worth how much?
• Here are the top 10 ASX 200 shares today
• How are ASX REITs smashing 52-week highs despite today’s market meltdown?

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goodman Group. The Motley Fool Australia has recommended Goodman Group and HomeCo Daily Needs REIT. 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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Race Oncology Ltd (ASX: RAC) shares are on form and racing higher on Monday.

In afternoon trade, the ASX All Ords share is up over 16% to $1.81.

This means that the oncology company’s shares are now up an impressive 130% since this time last month.

Why is this ASX All Ords share surging on Monday?

Investors have been buying the company’s shares today following the announcement of the appointment of its new chief financial officer (CFO).

According to the release, the company has named Brendan Brown as its new CFO, effective from Monday 1 April 2024, succeeding Ms Christina Manfre.

The release notes that Brown is a partner and director of Prime Accounting & Business Advisory, which is part of the Prime Financial Group (ASX: PFG).

Race Oncology highlights that he brings significant practical experience to the company, having worked with numerous life science clients through the past 20 years. In addition, Brown is a chartered accountant, and registered tax agent with a Bachelor of Commerce in Accounting from La Trobe University.

The company’s CEO, Dr Daniel Tillett, was pleased with the appointment. He commented:

We thank Christina for her time with Race and welcome Brendan to his new role as Race CFO. Race has had a productive working relationship with Prime over the last two years being responsible for Race’s successful R&D Tax Incentive claims. We are pleased to be expanding our engagement with both Brendan and Prime as we advance our new formulation of bisantrene in the clinic in 2024.

Why such a jump?

While I’m sure the appointment has gone down well with shareholders, it’s unlikely to be the real reason for the ASX All Ords share’s strong rise today.

As I mentioned at the top, Race Oncology’s shares have been on fire this month. This has been driven by excitement around the potential of its bisantrene product.

Earlier this month, the ASX All Ords share revealed that bisantrene has shown potent activity in a range of patient-derived primary acute myeloid leukemia (AML) cells and in mouse models of AML.

The combination of bisantrene and decitabine was found to exhibit robust anticancer synergy in both cell and mouse AML models. In addition, key cellular pathways targeted by bisantrene were identified, further supporting the use of bisantrene in combination with decitabine as a low intensity treatment for AML patients.

Overall, management believes preclinical data is “highly supportive of clinical trials of the new bisantrene formulation (RC220) combined with oral decitabine, as a low intensity treatment approach, for AML patients.”

The post Guess which ASX All Ords share is surging 16% after announcing a new finance chief appeared first on The Motley Fool Australia.

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More reading

• Why bond yields are bruising ASX property shares on Monday
• ‘Cheapest’ lithium miner: Broker says Sayona Mining shares could rise 200%+
• ASX 200 investors, have you grabbed your share of the coming $34 billion dividend windfall?
• Why I think these 2 ASX shares are steals
• Ignore the noise and buy this hot ASX growth stock

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 Prime Financial Group. The Motley Fool Australia has recommended Prime Financial 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 S&P/ASX 200 Index (ASX: XJO) is in the red on Monday.

After closing down 0.2% on Thursday and slipping another 0.6% on Friday, the benchmark Aussie index is down 0.3% at time of writing today at 7,643.0 points.

This comes after the ASX 200 thrilled investors, though perhaps not short sellers, when it notched a number of new record highs earlier this month.

The sharemarket has been buoyed by relatively strong earnings results from many of the top companies as well as investor hopes of pending interest rate cuts from the Reserve Bank of Australia and the US Federal Reserve.

The most recent closing high was reached on Friday, 8 March. The ASX 200 closed the day trading for 7,847.0 points. That saw it up a whopping 15.7% from the recent 31 October lows.

So, why is the index retreating from record highs?

Why is the ASX 200 down from all-time highs?

The answer has very little do with the individual companies listed on the ASX 200.

Instead, it involves growing investor fears that sticky inflation will lead to higher interest rates for longer than the markets have been pricing in.

Indeed, the stubbornly absent and persistently low inflation ‘problems’ of yesteryear are well and truly behind us.

Ah, nostalgia.

Last week’s US inflation readings surprised most economists to the upside.

February’s US producer price index (PPI) increased by 0.6% from January, double consensus expectations. And the consumer price index (CPI) in the US increased by 0.4% after a 0.3% month on month increase in January.

And with energy costs on the way back up, markets are beginning to wake up to the fact that inflation may well remain elevated longer than hoped.

Fears that this could delay interest rate cuts from the US Fed also have seen the S&P 500 Index (SP: .INX) and Nasdaq Composite Index (NASDAQ: .IXIC) retrace from their own record highs posted in March.

The S&P 500 closed down 0.7% on Friday, while the tech-heavy Nasdaq dropped by 1.0%.

Commenting on the inflation data throwing up headwinds for US markets and the ASX 200, Stephen Miller, a markets strategist at GSFM said (quoted by The Australian Financial Review):

Markets have begun to scratch their heads on just how Goldilocks the scenario ahead is going to be. When the Fed meets next week, I won’t be surprised to see cuts in the dot plot tempered a bit, and I still don’t think the equity markets have got their head around that.

Barrenjoey chief economist Jo Masters added:

It’s clear inflation looks like it’s a bit of sticking point, and the market was already so aggressively priced. Turning points in economies are never smooth, and we always expect the data to be a little bumpy.

The RBA announces its next interest rate decision tomorrow at 2:30pm AEST.

ASX 200 investors have widely priced in a hold from the central bank, with 95% of investors expecting no change from the current 4.35% rate.

But investors continue to expect one or more rate cuts from the RBA (and as many as three from the Fed) in 2024.

Which could make the past few days retrace a prime time to go shopping for bargain ASX 200 shares.

The post Why is the ASX 200 retreating from this month’s all-time highs? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Monday
• Here’s how the ASX 200 market sectors stacked up last week
• Here are the top 10 ASX 200 shares today
• 6 ASX 200 shares with ex-dividend dates next week
• What’s going so wrong for ASX 200 shares on Friday?

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

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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:

• Pilbara Minerals Ltd (ASX: PLS) continues to be the most shorted ASX shares even though its short interest eased to 20.7%. Short sellers continue to believe that lithium prices aren’t going to rebound any time soon.
• Syrah Resources Ltd (ASX: SYR) has short interest of 16.1%, which is down week on week again. Short sellers will have been pleased to see this graphite producer’s shares crash last week after raising funds for the umpteenth time.
• IDP Education Ltd (ASX: IEL) has 11.8% of its shares held short, which is up week on week again. Regulatory changes to student visas have been weighing on this language testing and student placement company’s shares.
• Deep Yellow Limited (ASX: DYL) has seen its short interest increase to 10.7%. It seems that short sellers aren’t confident that uranium prices will be as strong as the market is predicting.
• Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest remain flat at 9.8%. Short sellers loaded up on the travel agent’s shares following the release of its half-year results. They don’t appear to believe the second half will be strong.
• Genesis Minerals Ltd (ASX: GMD) has seen its short interest ease to 9%. This gold miner has been on an acquisition spree recently. Short sellers may believe there are significant integration risks on the cards.
• Liontown Resources Ltd (ASX: LTR) has seen its short interest jump to 9%. This is despite the company announcing debt funding for the Kathleen Valley Lithium Project last week.
• Core Lithium Ltd (ASX: CXO) has short interest of 8.5%, which is up week on week. This lithium miner’s shares crashed deep into the red last week after posting a huge half-year loss.
• Weebit Nano Ltd (ASX: WBT) has short interest of 7.8%, which is flat week on week. Valuation and revenue generation concerns are likely to be why short sellers are targeting the semiconductor company.
• Australian Clinical Labs Ltd (ASX: ACL) has short interest of 7.8%, which is down week on week. Tough trading conditions and a poor start to FY 2024 appear to have attracted short sellers.

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

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More reading

• 5 oversold ASX shares to buy in March 2024
• Why are ASX lithium shares being annihilated on Friday?
• Why Pilbara Minerals, Syrah Resources, Tabcorp, and Westpac shares are sinking today
• Why Beach, Clinuvel, Deep Yellow, and EML shares are charging higher today
• Why is this ASX 300 uranium stock avoiding the market selloff and racing 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 positions in and has recommended Idp Education. The Motley Fool Australia has recommended Flight Centre Travel Group and Idp Education. 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 dividend stock APA Group (ASX: APA) has suffered a large sell-off. It’s down 19% in the past year, and down 30% from August 2022, as we can see on the chart below.

For readers who haven’t heard of this large infrastructure business, it’s the owner of a very large gas pipeline network around Australia. APA transports half of the country’s natural gas usage.

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

Attractive dividend yield

Large swathes of the ASX share market have gone up in recent months, pushing plenty of names to near all-time highs. This has the unfortunate effect of pushing down the dividend yield.

However, with the lower APA share price, it has seen its distribution yield increase.

A falling share price of a normal ASX dividend stock can be a warning sign of a potential falling profit and dividend cut. But, APA has increased its distribution every year since 2004, and I think this streak can continue.

The business is expecting to pay a distribution per security of 56 cents in FY24, which would be an increase of 1.8% compared to FY23. This payout would translate into a distribution yield of 6.8%.

Ongoing income growth

APA’s distribution is paid for by the ASX dividend stock’s cash flow, with revenue being a key driver.

A large majority of its revenue is linked to inflation, the last couple of years has been beneficial for its revenue.

In the FY24 first-half result, revenue increased 3.4% to $1.27 billion, but the ‘segment revenue’ increased 8.2% to $1.27 billion. This helped underlying earnings before interest, tax, depreciation and amortisation (EBITDA) grow 5.8% to $930 million and free cash flow increased 12.8% to $546 million.

APA is also working hard on growing its pipeline, with bolt-on projects. Each new project can grow its cash flow once it’s completed.

The business is also steadily growing its portfolio of renewable energy and electricity transmission assets.

Foolish takeaway

I don’t think this business is going to deliver huge capital growth, but I believe it is very capable of delivering ongoing rising annual distributions, which would be a very useful characteristic in an uncertain world, particularly if interest rates start being cut in the next 12 months.

With a large starting yield and a growing payout, I think the business is an appealing ASX dividend stock, along with others.

The post 1 ASX dividend stock down 30% to buy right now appeared first on The Motley Fool Australia.

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More reading

• Here’s how the ASX 200 market sectors stacked up last week

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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Some ASX dividend shares are predicted to pay very large dividend yields within the next few years. In an era of higher interest rates, I think it’s fair that investors want to receive higher yields than a few years ago.

However, not every high yield is appealing. Some businesses cannot sustain a high payout, while others have cyclical payouts.

Sometimes buying a cyclical ASX share during the weak part of a cycle can be a smart idea, as the dividend can bounce (back) strongly. With that in mind, these two ASX shares look appealing to me after their declines.

Accent Group Ltd (ASX: AX1)

This ASX retail share is the distributor of a number of global shoe brands including CAT, Dr Martens, Henleys, Herschel, Hoka, Kappa, Merrell, Skechers, Timberland, Ugg and Vans. This company also has its own businesses like Glue Store, The Athlete’s Foot, Stylerunner, Trybe and Nude Lucy.

The Accent share price is down around 15% since 14 February 2024 and it has dropped 22% from April 2023.

It’s understandable why the company has fallen — sales are currently challenged in this higher cost-of-living situation. But I don’t think we’re going to see tricky conditions forever, meaning this lower share price is appealing.

According to Commsec, the ASX dividend share is projected to pay an annual dividend per share of 14.3 cents in FY26, which translates into a grossed-up dividend yield of 10.2%.

I think a key part of the company’s growth outlook is its growing store count – that’s helping grow its scale. The business also has an impressive e-commerce offering, it has grown its online sales significantly over the past four years – I think being a leader with online shopping is important as more people choose to shop online over time.

Centuria Office REIT (ASX: COF)

This is a real estate investment trust (REIT) which owns a portfolio of office buildings across Australia.

A much smaller percentage of its properties are in the Melbourne and Sydney CBDs than some investors may expect. The Sydney and Melbourne CBDs are where the vacancy rates are highest in Australia, and therefore are the danger areas for potential big valuation cuts and much lower rent.

Despite that, the Centuria Office REIT share price is down more than 50% from September 2021. I don’t know how much the ASX dividend share’s properties are going to fall in value during this cycle, but I think the 50% fall more than makes up for it.

In the first half of FY24, the portfolio occupancy rate was 96.2%, and the weighted average lease expiry (WALE) was 4.4 years.

Almost 80% of its rental income is derived from government, multinational businesses and listed companies. To me, that means high-quality tenants.

It’s expected to pay a distribution per unit of 12.1 cents in FY26, which is a distribution yield of around 10%.

The post 2 ASX dividend shares predicted to pay yields of 10% appeared first on The Motley Fool Australia.

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More reading

• Buy Rio Tinto and these ASX dividend shares now
• Top brokers name 3 ASX shares to buy today
• Why the Accent share price has jumped 5% and more gains are predicted
• Why Accent, Liontown, PSC Insurance, and Zip shares are charging higher today
• I think these ASX stocks are bargain buys after reporting season

Motley Fool contributor Tristan Harrison has positions in Accent Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Accent 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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