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Two ASX mining shares are a buy at the moment according to an analyst at a Sydney financial firm.

Sandfire Resources Ltd (ASX: SFR) and Renascor Resources Ltd (ASX: RNU) share prices have been recommended to investors.

Let’s take a look at these two ASX mining shares in more detail.

Sandfire Resources

Sandfire Resources is a buy according to Jean-Claude Perrottet from Medallion Financial Group. Sandfire is a copper explorer. Commenting on The Bull, Perrottet highlighted the miner’s record sales revenue of $922.7 million in FY2022. He also noted the company’s MATSA copper operations in Spain delivered a “positive operational performance”. Perrottet said:

We remain optimistic about the longer term outlook for copper producers given the shift towards cleaner energy.

The Sandfire Resources share price has fallen 11.97% in the last year. However, it has climbed 12.94% in the last month.

Renascor Resources

Renascor Resources is also a buy according to Perrottet. Renascor is developing the Siviour Graphite Project on the Eyre Peninsula in South Australia. Perrottet highlighted Renascor has “the world’s second biggest graphite reserve”. He added:

RNU aims to become a supplier of purified spherical graphite (PSG) for lithium-ion battery anode makers across the world. RNU will reach a final investment decision in 2023. Keep an eye on the news flow.

The Renascor Resources share price has soared 100% in a year. However, it has declined nearly 21% in the last month.

The post ‘Optimistic’: Broker names 2 ASX mining shares to buy right now appeared first on The Motley Fool Australia.

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More reading

• 3 ASX 200 shares that have ‘significant share price upside’: fund manager
• Here are the top 10 ASX 200 shares today
• Goldman tips record copper prices in 2023. Which ASX shares have exposure?
• Which ASX mining shares have had their dividend yields slashed the most in 2022?
• Here are the top 10 ASX 200 shares today

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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The BWX Ltd (ASX: BWX) share price will be returning to trade tomorrow after a four-month hiatus.

This follows the release of the embattled personal care products company’s long-awaited results for FY 2022.

In case you’re not aware, BWX shares were suspended in August after the company requested additional time to prepare its results due to certain revenue recognition issues and the likely impairment of its intangible assets to a level significantly below their carrying value.

BWX shares on watch following long-awaited update

The BWX share price will be on watch following the release of its results for the 12 months ended 30 June. Here’s a summary of how it performed against restated figures from a year earlier:

• Underlying revenue up 11.5% to $204.5 million
• Underlying EBITDA down from $24.9 million to negative $0.2 million
• Statutory loss of $335.6 million, down from a profit of $17.5 million

All metrics are short of the guidance it provided at the end of June to support its capital raising.

What were the drivers of this result?

Management advised that the decline in EBITDA was predominantly driven by the end of investment buys in June, as well as a 34% increase operating expenses to $112.2 million.

Investment buys is an incredibly vague term that BWX uses in place of “channel stuffing.” This is a deceptive practice that involves selling large volumes of products to distributors just before the end of the financial year to inflate sales and earnings figures for the period.

On the bottom line, the company behind the Sukin skincare range reported a statutory loss of $335.6 million, which is almost three times as large as its market capitalisation. This was driven largely by a $322.6 million non-cash impairment related to a reduction in the carrying value of intangible assets.

For the 12 months, the company recorded an operating cash outflow of $22.2 million. This left BWX with net debt of $64.3 million.

The company is also sitting on $65.3 million of inventory following a $19.1 million increase in FY 2022. This reflects the end of channel stuffing activities and the flow-on effect of retail partners unwinding their own inventory levels.

Management commentary

BWX’s CEO and managing director, Rory Gration, apologised for the disastrous turn of events. He said:

I apologise to all shareholders for the delay in releasing our Financial Year 2022 accounts and thank them for their patience as the Board and leadership team, with the assistance of our strategic advisors, continue to implement a comprehensive financial and operational re-set. FY22 was a disappointing year for financial performance.

As a business we are facing into the challenges, by stopping historical unsustainable sale practices, recalibrating our cost base, and committing BWX to return to a stronger, more focused and disciplined organisation with a consistent revenue and earnings profile.

Business update

BWX has announced a number of changes in the board room. This includes Ian Campbell stepping down as chairman with immediate effect. However, despite overseeing this disastrous period for the company, he will stay on as an independent non-executive director.

Replacing Campbell as chair will be Steven Fisher, who currently serves as the chair of Reject Shop Ltd (ASX: TRS) and Laybuy Holdings Ltd (ASX: LBY).

Guidance downgrade

Finally, although BWX is experiencing good “in-market demand” in Australia and the United States and expects a stronger second half, it has downgraded its full year guidance.

Management now expects revenue in the range of $205 million to $230 million and EBITDA in a range of $25 million to $30 million excluding one-offs.

This compares to the $260 million to $270 million and $45 million to $49 million guidance that it provided in June to support its capital raising. Ouch to anyone taking part in that raise!

BWX also revealed that it expects net debt to peak at $95 million as it completes its debt restructuring program.

The post BWX share price on watch amid $335m loss and guidance downgrade appeared first on The Motley Fool Australia.

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More reading

• What on earth is going on with BWX shares?
• 5 of the craziest things making news on the ASX this week
• ASX All Ords share BWX tipped to start trading next week after 3-month trading halt

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 recommended BWX. 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 that time of year again when everyone loves to make a prediction. And with the S&P/ASX 200 Index (ASX: XJO) down nearly 6% this year, many are painting even bloodier scenes for what may come for ASX shares in 2023.

Last month, banking giant Deutsche Bank pulled back the curtain on its forecast — expecting a 25% plunge sometime next year. Last week, Blackrock — one of the world’s largest asset managers — suggested investors should avoid investing in shares altogether next year and go after bonds instead. Now, an independent Australian sovereign wealth fund is casting its own doubts on equities.

The Future Fund — home to more than $200 billion dollars of assets — is moving away from investing in companies. In a paper, the fund lamented the end of the ‘traditional portfolio construction’, pointing to a ‘new investment world’.

Same siren, different decade

Can you hear the alarm bells ringing? Are you overwhelmed with fear? Are you convinced that investing is a worthless endeavour for your future wealth?

The world is in a terribly unpredictable state right now, without a doubt. However, I would caution against taking ‘smart money’s’ word for what will come during our next trip around the sun. It may not pan out as they proclaim.

Here’s an example…

Ray Dalio is an incredibly successful investor, making billions through his hedge fund Bridgewater Associates. In his career, Dalio was accustomed to building robust models for making investment decisions with a high degree of confidence.

After executing many successful trades and investments, Dalio was faced with the high inflation and interest rate environment of the late 1970s and early 80s.

As explained in his book Principles: Life and Work, Dalio was convinced that the US would be forced into a depression as bad, if not worse, than that of the 1930s. As such, the investor went heavy into gold and bonds, believing it would outperform investing in shares.

To Dalio’s dismay, he was dead wrong…

The United States economy began to grow again while inflation fell. As shown above, the S&P 500 produced returns in excess of 1,000%, basking in nearly two decades of noninflationary growth.

How did Dalio get it so wrong?

Instead of letting the entire global financial system collapse, debts were restructured and bad debts were written off over a long time span. This helped mitigate the concentration of financial impact on economies.

Why I’d keep investing in ASX shares

There is no shortage of doom and gloom for 2023. However, I’m of the mind that the pessimists have it wrong again, just like Dalio had it wrong in 1982.

Sure, we might see ASX shares move lower again next year. But do I think the value of investing will fundamentally change for the next 10, 20, or 30 years ahead? My answer is no.

I’m of the belief that humans will continue to solve the problems we are faced with. In turn, unbelievable value and wealth will be created in doing so.

Why do I think this?

Because there are still plenty of problems to be solved. It may not be the most elegant explanation, but sometimes simplicity is all that is needed.

The post Invest, or not to invest in ASX shares: Why I think the pessimists are wrong again appeared first on The Motley Fool Australia.

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More reading

• Is the Pinnacle share price the ASX 200’s biggest bargain right now?
• Why this blue-chip stock is a no-brainer buy for dividend growth investors
• 2 reasons I think the Fortescue share price can keep rising (and 2 why it can’t)
• 5 things to watch on the ASX 200 on Monday
• Shopping spree: What happened to the Woolworths share price today?

Motley Fool contributor Mitchell Lawler 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 silly season is upon us, complete with Christmas parties, perhaps too much food and drink, and of course, public holidays. Alas, that means the ASX won’t be trading as usual during the holiday period.

If you’re wondering which days a market watcher can relax and spend time with friends and family over the coming weeks without fear of missing out, you’ve come to the right place.

When will the ASX be open over the holiday period?

This year has truly flown by, if I do say so myself. We’re now just days away from Christmas. That means the ASX will be shutting shop for a few upcoming sessions.

Fortunately, there’s still plenty of time to complete any final ASX trades of the year. The market will be trading as normal for all of this week.

It will close at 4pm AEDT this Friday as many Aussie families prepare to herald Santa’s arrival on Sunday morning. Here’s a breakdown of ASX’s operating hours over the upcoming holiday period:

Upcoming events	Date	Is the ASX open?	Operating hours (AEDT)
Last business day before Christmas	Friday 22 December	Yes	10am to 4pm
Boxing Day	Monday 26 December	No	–
Christmas Day public holiday	Tuesday 27 December	No	–
ASX reopens after Christmas	Wednesday 28 December	Yes	10am to 4pm
Last business day of the year	Friday 30 December	Yes	10am to 4pm
New Year’s Day public holiday	Monday 2 January	No	–
First trading day of 2023	Tuesday 3 January	Yes	10am to 4pm

As the above chart shows, the Boxing Day public holiday will follow Sunday’s festivities. It falls on Monday 26 December.

The following day –Tuesday 27 December – the ASX will recognise the Christmas Day public holiday

Thus, the ASX won’t reopen until Wednesday 28 December at 10am AEDT. It will then trade as normal for the remainder of next week before the official end of 2022.

New Year’s Eve and New Year’s Day will be celebrated next weekend. The ASX will close for the official New Year’s Day public holiday on Monday 2 January.

The first ASX trade of 2023 will occur on Tuesday 3 January and the market will operate as normal once more.

The post Wondering when the ASX is open and trading over the Christmas holidays? Here’s the lowdown appeared first on The Motley Fool Australia.

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More reading

• Why is BHP’s dividend yield so high?
• Why is the Core Lithium share price having such a stellar start to the week?
• Own Rio Tinto shares? Here are the key dates to watch in 2023
• Guess which ASX BNPL company just achieved profitability for the first time (hint: not Zip)
• Is the Pinnacle share price the ASX 200’s biggest bargain right now?

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

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BHP Group Ltd (ASX: BHP) shares pay a very large dividend to shareholders. I’m not referring to the total amount, which runs into the billions of dollars. The BHP dividend yield is high compared to many other S&P/ASX 200 Index (ASX: XJO) shares.

With a market capitalisation of $231 billion according to the ASX, it’s the biggest Australian business and one of the largest in the world.

Firstly, let’s look at how large the payout might be in 2023.

BHP projected dividend yield

With how volatile and cyclical resource shares can be, I think it’s worthwhile considering what the payout could be over the next two financial years. But remember, forecasts are just educated guesses.

According to projections that are on Commsec, BHP could pay an annual dividend per share of around $3.10 per share in FY23. At the current BHP share price, this would represent a grossed-up dividend yield of 9.7%.

A fall in the annual dividend per share is then predicted for FY24. Commsec numbers imply a fall of around 15% of the shareholder payout to $2.63 per share. This would represent a grossed-up dividend yield of 8.25%.

The share price movement of a business is very important, perhaps more important than the dividend. But, with a dividend that large, a lot of the returns are coming in the form of cash payments to BHP shareholders.

How does this happen?

There are two elements to consider when it comes to the BHP dividend yield.

The first part is the dividend payout ratio. If BHP pays out more of its annual net profit after tax (NPAT), then shareholders are getting more cash. So naturally, the dividend yield will be higher.

BHP says that its dividend policy:

Provides a minimum 50% payout of underlying attributable profit at every reporting period. The board will assess, every reporting period, the ability to pay amounts additional to the minimum payment, in accordance with the capital allocation framework.

When taking into account the projected earnings per share (EPS) on Commsec for BHP, the calculated dividend payout ratios are 72% in FY23 and 69.4% in FY24. Those are quite high, but only explain part of the story.

Low earnings multiple

BHP typically trades on a low price/earnings (P/E) ratio. This means that the share price is at a low multiple to its EPS. The higher the P/E, the lower this pushes the dividend yield.

When the P/E is low, it means the dividend yield can be quite high.

Using the Commsec numbers, the BHP share price is valued at under 11 times FY23’s estimated earnings.

If the BHP share price were double the price, the dividend yield would be half as high.

Foolish takeaway

Owning BHP shares can be very rewarding when it comes to the dividend. But, investors should also consider whether the resource share price is closer to a cyclical high or cyclical low, as it’s important not to overpay with resources shares.

The post Why is BHP’s dividend yield so high? appeared first on The Motley Fool Australia.

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More reading

• Why did the iron ore price just hit a 6-month high?
• 3 ASX 200 dividend shares with payouts that jumped more than 10% this year
• Here’s why BHP shares are this fund manager’s favourite ASX iron ore pick
• Lithium, miners, and tech shares, oh my! Here’s where Aussies put their ASX money in 2022
• BHP shares: 2 reasons to buy, and 2 to sell

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

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Much to the relief of its shareholders, the Core Lithium Ltd (ASX: CXO) share price has started the week positively.

In morning trade, the lithium developer’s shares are up 3% to $1.09.

Though, this is little consolation for shareholders that snapped up shares just over a month ago.

Since then, the Core Lithium share price had lost a whopping 43% of its value prior to today’s gain.

Why is the Core Lithium share price rising today?

The catalyst for its strong gain today has been the release of a broker note out Macquarie this morning.

In response to the aforementioned share price weakness, the broker has upgraded its shares to an outperform rating from neutral with a steady price target of $1.30.

Based on the current Core Lithium share price, this implies potential upside of almost 20% for investors over the next 12 months.

As well as the share price weakness, the broker believes recent exploration activity has the potential to deliver a big boost to the company’s resource base. This follows promising results announced last week from the drilling of the Hang Gong and Bilatos prospects close to the existing Finniss operations.

Macquarie commented:

We believe the regional exploration potential of the Finniss project is strong and will become more recognized once spodumene production commences in 2023.

Raining cash

Looking ahead, the broker also highlights that Core Lithium is expected to start producing lithium before the end of FY 2023. Based on this, it is expecting the Finniss project to be printing cash in the near future.

So much so, it estimates that the Core Lithium share price currently trades on free cash flow yields of 14% and 37% for FY 2024 and FY 2025, respectively. This could support dividend payments in both years according to Macquarie.

The post Why is the Core Lithium share price having such a stellar start to the week? appeared first on The Motley Fool Australia.

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More reading

• Can Core Lithium shares really live up to the hype surrounding them?
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Why is the Core Lithium share price gaining on Friday?
• Why did the Sayona Mining share price dive 7% on Thursday?
• Here are the 3 most heavily traded ASX 200 shares 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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If you have Rio Tinto Limited (ASX: RIO) shares in your portfolio, you may be curious about what lies ahead in 2023.

Rather helpfully, the mining giant has just released a summary of its key dates for the year ahead.

The dates to watch for in 2023

Arguably, the most important date to circle in your diary is 22 February. On this day, Rio Tinto will be releasing its full year results for FY 2022.

According to consensus estimates, on that day, the market is expecting Rio Tinto to report underlying EBITDA of US$26,874 million and underlying earnings of US$14,104 million. This is expected to lead to a final dividend of US$2.57 per share, which takes its full year dividend to US$5.24 per share.

This brings us nicely onto the next key date to put in your diary. On 9 March, the Rio Tinto shares will trade ex-dividend for its final dividend of FY 2022.

After which, if you’re eligible to receive this dividend, you will be paid it on 20 April.

What else could impact Rio Tinto shares next year?

Moving on, another couple of dates to add to your diary are the company’s annual general meetings, which are scheduled to be held on 6 April for UK shareholders and 4 May for Australian shareholders.

In between those events, Rio Tinto will be releasing its first quarter operational update for FY 2023 on 21 April.

After which, it won’t be long until the mining giant is scheduled to release its next set of results. On 26 July, Rio Tinto’s half year results will be announced.

No consensus data is available for the half year period, but the market is expecting a 14% decline in underlying EBITDA to US$23,289 million for the 12 months. So, a result tracking in line with this estimate at the halfway point will largely be expected.

Rio Tinto shares will then trade ex-dividend for its interim dividend of FY 2023 on 10 August. Payment will follow almost six weeks later on 21 September.

The post Own Rio Tinto shares? Here are the key dates to watch in 2023 appeared first on The Motley Fool Australia.

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More reading

• Why did the iron ore price just hit a 6-month high?
• Why Aurizon, Norwest, Rio Tinto, and Strike Energy shares are rising today
• Why is the Rio Tinto share price wallowing on Wednesday?
• Why is the Fortescue share price tanking on Tuesday?
• 5 things to watch on the ASX 200 on Tuesday

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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Move over Zip Co Ltd (ASX: ZIP), another ASX buy now, pay later (BNPL) share has beat the former market darling to the profit pie.

All Ordinaries Index (ASX: XAO) constituent Sezzle Inc (ASX: SZL) has officially posted what could be the sector’s first monthly profit.

Here’s how the smaller ASX BNPL share has performed compared to Zip as of late. As the chart below shows, Sezzle stock has dumped a whopping 82% over the last 12 months.

While that might appear disastrous, it’s a better performance than that posted by Zip shares. They’ve plunged 85% in that time.

For comparison, the All Ordinaries Index has slipped 4% since this time last year.

Let’s take a look at today’s news from the smaller ASX BNPL company.

Another ASX BNPL share beats Zip to profitability

It’s been a big year for ASX BNPL shares. Former favourite Afterpay was taken off the market, all but one member of Humm Group Ltd (ASX: HUM)’s board stormed out, and Zip proposed then cancelled a plan to acquire Sezzle.  

And with just eight trading days left on the year, the former takeover target has dropped another bombshell – its maiden monthly profit.

Sezzle posted US$200,000 of net income and US$1.5 million of adjusted earnings before tax, depreciation, and amortisation (EBTDA) for the month of November. That’s up from respective average monthly losses of US$8.6 million and US$8.2 million in the fourth quarter of 2021.

“To say we are excited is an understatement,” said Sezzle chair and CEO Charlie Youakim, continuing:

[T]his puts us in a strong position entering 2023.

We believe we are the first in our segment to reach profitability, but one month does not make a trend. Our goal for 2023 is to achieve positive net income and Adjusted EBTDA.

The smaller BNPL provider’s total income came to $19.9 million in November – leaving its total income as a percentage of underlying merchant sales at a record 8.1%.

The Zip share price lifted 1.6% in late October on the back of the larger BNPL company’s latest earnings. Its revenue reached $163.2 million over the three months ended 30 September – up 19% quarter-on-quarter.

Zip CEO Larry Diamond also recently told investors the company is expecting to operate in the EBTDA cash flow green by the first half of financial year 2024.

The post Guess which ASX BNPL company just achieved profitability for the first time (hint: not Zip) appeared first on The Motley Fool Australia.

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More reading

• Here are the 10 most shorted ASX shares
• Why Bendigo Bank, Endeavour, TPG, and Zip shares are dropping today
• Why Chalice Mining, Fortescue, Mincor, and Zip shares are dropping today
• Why is the Zip share price sinking 8% today?
• Why this one top fund manager is optimistic about 2023, and one little-known IPO that has hit it out of the park

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Zip Co. The Motley Fool Australia has recommended Humm 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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One of the worst-hit S&P/ASX 200 Index (ASX: XJO) names in 2023 has been the Pinnacle Investment Management Group Ltd (ASX: PNI) share price, which is down 45% in the year to date.

There has been a lot of pain for some sectors on the ASX, while others have been spared. For example, ASX bank shares have done quite well this year, as they’re seen to benefit from higher interest rates. But fund managers have taken a hit.

A lot of fund management companies’ earnings come from the amount of funds under management (FUM). If the FUM falls, the levels of revenue and earnings are likely to drop. Remember, investors often like to judge a business by its profitability.

What are Pinnacle shares known for?

The business is invested in a growing number of leading fund managers such as Coolabah, Firetrail, Hyperion, Spheria, Plato, and several more.

It takes a stake in the fund managers’ businesses and can also help them in a number of areas. These include seed FUM and working capital, distribution and client services, middle office and fund administration, compliance, finance, legal and so on.

While it started by looking at ASX share-focused fund managers, it’s now looking at expansion opportunities. It’s planning to take advantage of the “significant offshore opportunity to evolve into a global multi-affiliate” by exporting its business model.

Why it could be an opportunity

Any ASX 200 share that has been growing for a long time and then goes through a rough patch is worth looking at. The Pinnacle share price’s performance was strong after the COVID crash up to the end of 2021.

With some share market valuations down heavily, the underlying FUM growth of Pinnacle has also stuttered. At 30 September 2022, it had $80.5 billion of FUM, down 4% from June 2022.

I think that when share markets stop declining, long-term asset price growth will be a natural boost for Pinnacle’s underlying earnings. The end of declines could also lead to better fund flows for the respective fund managers in Pinnacle’s portfolio as well.

Pinnacle says it’s working with affiliates to “actively pursue growth initiatives, recognising that these will moderate profits in the short-term but provide extremely lucrative growth opportunities over the medium term”.

The ASX 200 share is also looking for incubations, which are a “highly attractive investment proposition”. It’s looking to incubate more outside of Australia and leverage the operational infrastructure that it has developed in the UK, Europe, and Canada. Australia has a large capital market, but the rest of the world is a much bigger opportunity.

Pinnacle share price valuation

According to Commsec, the business is valued at 18 times FY24’s estimated earnings with a potential FY24 grossed-up dividend yield of 6.1%. Whilst the share price could go even cheaper, I think it’s now priced at very attractive value for the long term.

The post Is the Pinnacle share price the ASX 200’s biggest bargain right now? 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
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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 Pinnacle Investment Management Group. The Motley Fool Australia has positions in and has recommended Pinnacle Investment Management 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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There are plenty of ASX shares that pay dividends to investors. The great thing about investing in businesses is that we can start building wealth with a small amount of money.

Think about how much money is needed to invest in a property. The deposit alone can be tens of thousands of dollars, or even over a hundred thousand dollars. It can take a long time to save up that amount of money.

We still need to do a bit of saving to invest in ASX shares. Most brokers require a minimum of $500 to invest. Saving $5 a day, which is hopefully achievable for nearly everyone, would take 100 days to reach that minimum number. However, it may be better to wait to invest until the amount is closer to $1,000.

These days, we can earn a decent return on savings in the banks, so we’re not missing out too much by building towards a goal.

Building a second income with ASX dividend shares

The key wealth-building tool for most people is their job, or business if they run a business.

But, it’s also possible to build another source of income from ASX shares with dividends.

Dividends are simply the portion of the profits companies pay out each year to the owners of the business (shareholders).

By saving $5 a day, someone can save $1,825 a year. I think that number, or even $1,000, would be a great starting point for a beginner investor.

A $1,825 investment with a 6% dividend yield would turn into around $110 of income. So, a few years of investing could turn into a sizeable amount of annual dividend income – hundreds of dollars a year, or even thousands.

Which ASX shares pay sizeable dividends?

Australia’s largest telco Telstra Group Ltd (ASX: TLS), is starting to grow its dividend again. It’s expected to pay a grossed-up yield of 6% in FY23, according to Commsec.

Another business, Coles Group Ltd (ASX: COL), is expected to pay a grossed-up dividend yield of 5.4% in FY23, according to Commsec.

Westpac Banking Corp (ASX: WBC) is projected to pay a grossed-up dividend yield of 8.5% in FY23, according to Commsec.

JB Hi-Fi Limited (ASX: JBH) shares are forecast to pay a grossed-up dividend yield of 8.75% in FY23, according to Commsec.

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More reading

• Why all eyes will be on Telstra shares this week
• I’m racing to buy dirt-cheap ASX dividend shares before it’s too late
• 3 ASX 200 shares in the spotlight for 2023 as consumer sentiment ‘bounces’
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Why is the Telstra share price lagging the ASX 200 today?

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 Coles Group and Telstra Group. The Motley Fool Australia has recommended Jb Hi-Fi 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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