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S&P/ASX 200 Index (ASX: XJO) shares have seen much volatility in 2022. The index hit low points in both June and September as investors came to terms with the level of inflation and feared how high interest rates might go.

But, the ASX 200 has been recovering since those lows, which we can see with the return of the exchange-traded fund (ETF) iShares Core S&P/ASX 200 ETF (ASX: IOZ).

With the ASX 200 only down by 5% in the year to date, does it make sense to buy now?

ETF investing

If investors are just buying the ASX 200 as a whole, with an ETF like the iShares Core S&P/ASX 200 ETF, BetaShares Australia 200 ETF (ASX: A200), or even the Vanguard Australian Shares Index ETF (ASX: VAS) which tracks the S&P/ASX 300 Index (ASX: XKO), then I think investors could just use a regular investment plan.

An index doesn’t usually change in price as much as individual shares, and it’s very hard to say how an index is going to perform in the short term, or if it’s good value (unless it’s down heavily). Plus, with the ASX relatively highly weighted to ASX resource shares, it’s even more unpredictable.

If I were investing in an ETF, I’d just put a regular amount – say $1,000 a month or $3,000 a quarter – into the ETF and not worry about ‘timing’ the market.

Buying individual ASX 200 shares

I think it’s easier to evaluate an individual business than the whole market, so we can be a bit pickier if looking at specific names like BHP Group Ltd (ASX: BHP), Wesfarmers Ltd (ASX: WES), or Woodside Energy Group Ltd (ASX: WDS).

I’d be happier to buy resource shares when sentiment about the commodity is low.

For example, the iron ore price and BHP share price were substantially lower a few months ago, so the resource giant was more compelling compared to now.

I’m not going to run through my thoughts on 200 different businesses, but I will say that I generally think the market has been too pessimistic about retailers on a three-year view.

I have just written an article outlining my positive views on Brickworks Limited (ASX: BKW) and also pointed out that some ASX tech shares could be beaten-up opportunities because they are still growing at a solid pace. Accordingly, I named the ASX 200 tech share Xero Limited (ASX: XRO) as an idea.

Foolish takeaway

Volatility can be a great time to pick up some long-term growth businesses at cheaper prices, which can go a long way to help us outperform the market over time. But, there may well be some more dips in the coming months, particularly if inflation stays elevated for longer than expected.

The post Is now really the time to buy ASX 200 shares? appeared first on The Motley Fool Australia.

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More reading

• Why I think this ASX 200 dividend share is a screaming buy right now
• 3 incredible ASX tech stocks down over 50% to buy before the next bull market
• Top ASX dividend shares to buy in December 2022
• 5 things to watch on the ASX 200 on Tuesday
• Is Xero a ‘safe’ ASX share?

Motley Fool contributor Tristan Harrison has positions in Brickworks. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks and Xero. The Motley Fool Australia has positions in and has recommended Brickworks, Wesfarmers, and Xero. 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 Zip Co Ltd (ASX: ZIP) share price is under pressure on Tuesday morning.

At the time of writing, the buy now pay later (BNPL) provider’s shares are down 8% to 65.5 cents.

This latest decline means the Zip share price is now 85% in 2022.

Why is the Zip share price falling?

Investors have been selling down the Zip share price today after the company announced a surprise capital raising.

According to the release, Zip has raised $13.6 million from institutional investors at a 13.2% discount of 62 cents per new share. The proceeds will be used to fund the conversion of some of its notes earlier than planned.

Zip’s co-founder and COO, Peter Gray, explained:

In recent months, Existing Noteholders have contacted the Company interested in selling back a portion of their holdings at prices that may be attractive for Zip. As a result, we are pleased to launch this liability management exercise. This initiative will proactively manage our debt maturities by retiring a portion of our liabilities at a fraction of face value, as well as offering Existing Noteholders a liquidity opportunity. If completed, the transaction is expected to be cash neutral for the Company and accretive to Zip shareholders.

Trading update

Failing to stop the Zip share price from falling today was the release of a trading update.

According to the update, the company is performing in line with expectations in the current financial year and continues to expect to deliver positive cash EBTDA during the first half of FY 2024. It also doesn’t expect to need to raise capital before then.

Management commented:

Zip reaffirms the comments provided to the market at its Annual General Meeting on 3 November 2022. The Company is on track to deliver positive cash EBTDA as a group in the first half of FY24. The Company continues to make progress with its rest of world strategic review, which it expects to deliver cash inflows or a neutralising of cash burn in each of its non core markets during the second half of FY23. T

he quarter to date has delivered business performance and cashflows in line with seasonal trends and expectations. Zip remains confident it has sufficient cash and liquidity to support the Company through to positive cash EBTDA in the first half of FY24.

The post Why is the Zip share price sinking 8% today? appeared first on The Motley Fool Australia.

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More reading

• Why this one top fund manager is optimistic about 2023, and one little-known IPO that has hit it out of the park
• Here are the 10 most shorted ASX shares
• The Zip share price has halved since late July. What went so wrong?
• Why did the Zip share price surge 21% in November?
• Could increased BNPL regulation be a positive for Zip shares?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Zip Co. 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 S&P/ASX 200 Index (ASX: XJO) dividend share section of the market has plenty of potential names to choose from. But there’s one particular ASX 200 dividend share that I think looks like an exceptional long-term buy at the moment: Brickworks Limited (ASX: BKW).

From the surface, it may seem like a building products business that works in a fairly cyclical industry with relatively low-profit margins.

On that side of things, Brickworks is fairly impressive. It’s the leading brickmaker in Australia and the north east of the US. Brickworks also has a number of other building products like roofing, masonry and stone, specialised building systems, timber battens and cement.

But, I don’t think it’s just an interesting cyclical construction play at this uncertain moment in time. There are a number of growth areas within the business that makes me think Brickworks shares are a top pick.

UK expansion

The existing Brickworks Australian building products business is quality but doesn’t seem to have exciting growth potential.

I like the potential for the US segment – it’s a huge market and Brickworks has plenty of room to expand there.

For me, a new, compelling side to the business is that it recently announced a supply agreement with Brickability, a leading building products company in the UK, for the sale of bricks into the UK market. It called this a “significant” milestone.

Management called this an “attractive expansion opportunity” with bricks having an 85% share in external walling in housing. Around 10% to 20% of the UK supply is sourced from imports. Brickworks plans to initially supply this market from its plants in the US. It’s investigating the feasibility of additional supply from Australian plants.

The 10-year supply agreement includes a minimum purchase quantity of 10 million bricks per year and it hopes to “build on this over time”.

Industrial trust

Brickworks has been selling excess land into a joint venture industrial trust that it owns along with Goodman Group (ASX: GMG). It has blue-chip tenants for the buildings including Amazon.com, Woolworths Group Ltd (ASX: WOW), Coles Group Ltd (ASX: COL), DHL and Telstra Group Ltd (ASX: TLS).

The ASX 200 dividend share notes there is strong demand for increasingly sophisticated developments, with features at the properties like robotics, automation and multi-storey warehousing. This is helping rental growth and improving the value of the properties.

Completing buildings increases the value of the industrial trust. Brickworks continues to identify land to sell into the trust in the coming years, to support “continued long-term growth.”

At the end of FY22, Brickworks had a total of around $1.8 billion across two joint venture property trusts.

Manufacturing trust and other land

It recently announced the launch of a new property trust with Goodman Group, which has a portfolio of 15 of its Australian manufacturing plants. Some of Brickworks’ land isn’t shown at the true market value on its balance sheet, but the land sales into the property trusts enable the company to demonstrate the true value to investors (and receive a lot of cash).

Brickworks owns 50.1% of this trust.

More of Brickworks’ manufacturing plants could be sold into the manufacturing trust over time.

The company also has a 100% interest in over 5,000 hectares of operational and surplus land across Australia and North America. For example, four specific land zones (which don’t account for all of the 5,000 hectares) are worth $0.8 billion ‘as is’ and have a “rezoned” value of $1.3 billion.

It’s exploring with Goodman the idea of developing the industrial-zoned 76 hectares of land around its mid-Atlantic brick plant in Pennsylvania.

Investments

The biggest contributor to the underlying value of Brickworks shares is the 26.1% holding of investment conglomerate Washington H. Soul Pattinson and Co. Ltd (ASX: SOL).

Soul Pattinson has a diversified portfolio across a range of industries including resources, telecommunications, financial services, agriculture and so on.

This investment, which is itself an ASX 200 dividend share, has been providing Brickworks with a growing dividend and stability.

The 94.3 million Soul Pattinson shares that Brickworks currently owns are currently worth around $2.6 billion.

Brickworks is also a substantial shareholder of robot bricklaying business FBR Ltd (ASX: FBR). It will be interesting to see how that investment plays out over time.

Strong Brickworks dividend record

Brickworks hasn’t cut its dividend since 1976 and it has grown its dividend in consecutive years for almost a decade.

In FY22 it grew its final dividend by 3% to 63 cents per share. After a 10% fall in the Brickworks share price since the end of March 2022, it now has a grossed-up dividend yield of 4.1%.

Brickworks can essentially fund its dividend from the dividend income from Soul Pattinson and the rental profit from the two trusts. Considering the Brickworks share price is at a substantial discount to the underlying value of its assets, I think that the ASX 200 dividend share is an attractive long-term buy for income.

The post Why I think this ASX 200 dividend share is a screaming buy right now appeared first on The Motley Fool Australia.

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More reading

• One ASX 200 share I’m buying for passive income before 2022 is over
• Beat the All Ordinaries with this unstoppable ASX dividend share
• 3 passive income ASX 200 dividend shares that can help make you richer
• Why I’m buying ASX shares in this once-in-a-lifetime market to try and retire early
• 5 ASX 200 dividend shares to build your portfolio around

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Tristan Harrison has positions in Brickworks and Washington H. Soul Pattinson And. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon.com, Brickworks, and Washington H. Soul Pattinson And. The Motley Fool Australia has positions in and has recommended Brickworks, Coles Group, Telstra Group, and Washington H. Soul Pattinson And. The Motley Fool Australia has recommended Amazon.com. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Research analysts at Ord Minnett are tipping one ASX mining share to have a potential 75% upside.

The AIC Mines Ltd (ASX: A1M) share price has been highlighted in a broker report, published on the ASX equity research website. The AIC Mines share price rose 1.11% on Monday to close at 45.5 cents.

Let’s take a look at this ASX mining share in more detail

Target price of 80 cents

Ord Minnett has placed a speculative buy rating on the AIC Mines share price with an 80 cent price target. This implies an upside of 75.8% on Monday’s closing price.

Analysts highlighted AIC Mines’ takeover of Demetallica Pty Ltd (ASX: DRM). In November, AIC Mines and Demetallica advised the market they had agreed to combine. This would see AIC’s Eloise mine and processing facility combine with Demetallica’s Jericho copper deposit.

AIC Mines advised in December it has now acquired an interest in more than 90% of Demetallica shares and is now at the compulsory acquisition stage.

Commenting on the outlook for AIC Mines, Ord Minnett analysts said they have now included the DRM acquisition in their base case model. Analysts said:

Whilst there is dilution to our near-term earnings (FY23/24 ~20%), our NAV increases ~A$59m (+A$0.05/sh – diluted) improved FY25+ metrics (production / opex) and a higher exploration figure.

Furthermore, the acquisition increases A1M’s prominence in terms of scale, liquidity, mine life and risk profile – which should place it on the radar for more investors.

We increase our Target Price to A$0.80/sh (+7%) and retain our positive view.

Ord Minnett is tipping AIC Mines to achieve earnings before interest, tax, depreciation and amortisation (EBITDA) of $50.4 million in FY23, up from $37.6 million in FY22.

AIC Mines share price snapshot

AIC Mines shares have fallen 3% in the last year and 13% year to date.

This ASX mining share has a market capitalisation of about $175 million based on the current share price.

The post Buy this ASX mining share with 75% upside: broker appeared first on The Motley Fool Australia.

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More reading

• 3 small-cap ASX shares with over 30% upside: brokers

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

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If you’re an income investor on the lookout for big dividends, then take a look at the two ASX shares listed.

Both of these ASX dividend shares have been tipped to provide investors with generous yields in the near term. Here’s what they are saying about them:

Deterra Royalties Ltd (ASX: DRR)

The first high yield ASX dividend share for investors to consider is Deterra Royalties.

It is the owner of a portfolio of royalty assets across a range of commodities, primarily focused on bulks, base and battery metals.

One of the key royalty assets in its portfolio is the Mining Area C (MAC) iron ore operation which is operated by mining giant BHP Group Ltd (ASX: BHP). Another for the future is the Eneabba Project owned by Iluka Resources Limited (ASX: ILU). This project has the potential to be a major rare earths producer in the coming years.

Citi is a fan of the company and has a buy rating and $4.70 price target on its shares.

As for dividends, it is expecting fully franked dividends per share of 26 cents in FY 2023 and 28 cents in FY 2024. Based on the current Deterra Royalties share price of $4.69, this will mean yields of 5.5% and 6%, respectively.

Stockland Corporation Ltd (ASX: SGP)

Another high yield ASX dividend share that has been named as a buy is Stockland.

It is a residential and land lease developer and retail, logistics and office real estate property manager.

While trading conditions are not easy at present, analysts at Goldman Sachs “believe the potential headwinds are factored into the share price and see SGP as attractively valued.” The broker feels this is particularly the case given its recently refreshed corporate strategy and the sale of its low returning Retirement division.

Goldman has a buy rating and $4.40 price target on its shares.

In respect to dividends, its analysts are forecasting dividends per share of 27.6 cents in FY 2023 and 28.3 cents in FY 2024. Based on the current Stockland share price of $3.87, this will mean yields of 7.1% and 7.3%, respectively.

The post Brokers expect very big dividends from these ASX shares in 2023 appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• The ASX 200 mining shares to buy for big dividends in 2023: analysts
• Dividends! Goldman Sachs says these ASX 200 shares are buys for income investors
• These are the ASX dividend shares income investors should buy now: brokers
• Time to buy? Which ASX 200 shares are trading on single-digit P/E ratios?

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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Are you looking to add some growth shares to your portfolio for 2023?

If you are, two ASX shares that could be worth considering are listed below. Here’s why Goldman Sachs rates them as buys:

Allkem Ltd (ASX: AKE)

The first ASX growth share to consider is Allkem. It is one of the world’s largest lithium miners with projects in Argentina, Australia, and North America.

From these projects, Allkem is aiming to grow its production in a way that allows it to maintain a 10% share of global lithium supply over the long term.

Goldman Sachs is bearish on the lithium industry right now due to its belief that lithium prices will tumble in the coming years. However, it is positive on Allkem due to the aforementioned production growth and exposure to several lithium types. This includes moving downstream from spodumene into lithium chemicals, which it sees as a margin accretive opportunity. It commented:

Of our covered Australian lithium companies, Allkem has the best LCE growth outlook with production growing >4x to FY27E with further downstream optionality on carbonate production

Goldman has a buy rating and $15.20 price target on Allkem’s shares.

Webjet Limited (ASX: WEB)

Another ASX growth share that Goldman rates as a buy is online travel booking company Webjet.

The broker is a fan of Webjet due to its belief that it has exited the pandemic as a significantly stronger company. It is expecting this to underpin a six-year compound annual growth rate of 15.3% for its earnings. It added:

Our near term earnings changes remain modest given that we already price in a strong recovery for WEB in FY24/25. What these results have given us greater confidence is in the group’s longer term outlook for both the Bedbanks and OTA businesses. WEB also continues to report strong cash generation.

Goldman has a conviction buy rating and price target of $6.90 on its shares.

The post Lithium and travel: Goldman Sachs names the ASX growth shares to buy now appeared first on The Motley Fool Australia.

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More reading

• Brokers name 3 ASX shares to buy today
• Why are ASX 200 lithium shares taking another beating on Friday?
• I’d aim for $1 million, buying just 10 cheap ASX shares
• Goldman Sachs names the only ASX lithium share to buy today
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor James Mickleboro has positions in Allkem Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Temple & Webster Group Ltd. The Motley Fool Australia has recommended Temple & Webster Group Ltd. 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 tech stock sector has taken a real whacking in 2022. Despite plenty of names displaying solid revenue growth over the last couple of years, they have been among the worst performers this year.

However, when a bull market eventually comes back, we could see some of these fallen former darlings be the ones that outperform as they recover.

The below three businesses may be contenders to consider for a medium-term to long-term investment after they all fell more than 50% this year.

Xero Limited (ASX: XRO)

Xero has seen one of the biggest declines in the S&P/ASX 200 Index (ASX: XJO) in 2022 to date. The cloud accounting software company has dropped 52%, closing on Monday at $70.63 a share.

While Xero may be suffering from the higher interest rates, investors may also be somewhat concerned about its subscribers, which are small and medium enterprises, in a downturn. However, I think Xero’s subscription fee is relatively small, but integral for business operations, so I believe customers will keep paying it.

Plus, subscriber numbers and average revenue per user (ARPU) continue to grow for the ASX tech stock. In the FY23 half-year result, subscribers grew 16% to 3.5 million, while ARPU went up 13% to $35.30. This helped operating revenue jump 30%. With the company having such a high gross profit margin, I think ongoing revenue growth could change people’s minds about the business when investor confidence returns.

Megaport Ltd (ASX: MP1)

The company says it’s a global ASX tech stock that is at the “leading edge of cloud connectivity”. It helps customers adopt cloud infrastructure, and enables them to quickly increase their usage, if needed.

The Megaport share price has declined by around 65% in 2022 to date to its current price of $6.72.

In the first quarter of FY23, Megaport saw monthly recurring revenue (MRR) rise by 9% quarter on quarter to $11.6 million. Excluding foreign currency changes, underlying MRR increased 6% to $11.3 million. The ASX tech stock achieved a profit at the earnings before interest, tax, depreciation and amortisation (EBITDA) level, which is a positive sign for FY23.

At the recent annual general meeting, Megaport CEO Vincent English said:

Our network infrastructure expertise allowed us to build and operate one-of-a-kind highly efficient global network with healthy operating leverage built-in. With the continued rapid growth in the cloud connectivity space, we have the scale and capital position necessary to drive our business to profitability. This will be a key focus in fiscal year 2023 as we leverage our channel programmes and operational efficiency.

Frontier Digital Ventures Ltd (ASX: FDV)

This is the smallest ASX tech stock of the three in this article, with a market capitalisation of $270 million, according to the ASX.

Frontier Digital Ventures is a company that owns and operates online marketplace businesses in fast-growing emerging markets. Its portfolio consists of 16 “market-leading companies operating across 20 markets” in Latin America, Asia, and the Middle East and North Africa.

While there will sometimes be a mixed performance with that many different businesses, collectively, the company is seeing growth. The third quarter of 2022 saw record quarterly EBITDA on the company’s ownership share basis, doubling the previous quarterly portfolio EBITDA. All three operating regions saw positive EBITDA for the first time.

It’s focused on keeping a lid on costs, improving the financial profile and profitability of the overall business during this uncertain period.

Despite the improving profit, the Frontier Digital Ventures share price is down 55% in 2022.

The broker Morgans thinks it’s a buy, with a price target of $1.28. That suggests a possible rise of around 80% over the next year from its current price of 71 cents.

The post 3 incredible ASX tech stocks down over 50% to buy before the next bull market appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Why Arafura, Megaport, Nitro, and Sayona Mining shares are storming higher today
• Why this one top fund manager is optimistic about 2023, and one little-known IPO that has hit it out of the park
• Is Xero a ‘safe’ ASX share?
• Is it safe to invest in ASX shares now? Take advice from Warren Buffett

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Xero. 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 CSL Limited (ASX: CSL) share price is in focus amid news the company’s long-term CEO and managing director will step down from the role.

Paul Perreault has been with the biotechnology icon for more than 25 years, 10 of which have been in the top job. He will be succeeded by Dr Paul McKenzie.

The CSL share price closed Monday’s session trading at $298.20.

Let’s take a closer look at the latest news from the S&P/ASX 200 Index (ASX: XJO) healthcare giant.

CSL announces Perreault’s retirement and new CEO

The CSL share price could be one to watch on Tuesday after the company’s CEO announced he plans to retire from the role and its board in March.

Perreault will continue to work as a strategic advisor for six months after handing over the reins, retiring in September next year.

Successor McKenzie currently serves as CSL’s chief operating officer and will join the company’s board immediately.

McKenzie has held leadership positions in the global biotechnology industry for more than 30 years. He has been with CSL since 2019, working to optimise the company’s operations and grow the Seqirus, Plasma, and Vifor businesses.

Prior to joining the ASX 200 giant, McKenzie was executive vice president of pharmaceutical operations and technology at Biogen. He also previously held progressively senior-level roles at Johnson & Johnson, Bristol-Myers Squibb, and Merck.

Perreault commented on his retirement from the CEO position, saying:

Leading CSL during the last decade has been a privilege as we grew, innovated, and globalised to new levels – all while fostering a values-based culture focused on our promise to patients and public health around the world.

In working closely with Dr McKenzie for more than three years, I am confident he will continue to innovate and build on CSL’s track record of growth for years to come.

Speaking on his appointment to the top job, McKenzie said:

I am excited, honoured and humbled for the opportunity to continue building CSL’s legacy following the strong foundation established by Paul Perreault over the last decade.

We will continue focusing on executing our 2030 strategy, investing in innovation, and continue achieving sustainable and profitable growth.

CSL share price snapshot

The CSL share price has gone next to nowhere this year, gaining just 0.75% since the start of 2022. It’s also 0.3% higher than it was this time last year.

Though, that’s a better performance than the broader market.

The ASX 200 has fallen 5.4% year to date and 2.7% over the last 12 months.

The post CSL share price on watch as CEO announces retirement appeared first on The Motley Fool Australia.

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• Why is the CSL share price in the spotlight on Wednesday?
• If you bought 100 shares of CSL 10 years ago, this is how much you would have today
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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 Bristol-Myers Squibb, CSL, and Merck. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Biogen and Johnson & Johnson. 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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With a new year on the horizon, what better time to look at making some new additions to your portfolio.

The good news is that analysts at Bell Potter have been busy picking out their “favoured” picks for 2023.

Three that have made the cut are named below. Here’s what the broker is saying about them:

Aristocrat Leisure Limited (ASX: ALL)

Bell Potter’s analysts are bullish on this gaming technology company and believe it well-placed for growth in 2023 and beyond. They commented:

The group has a dominant position in the North American gaming industry and the land-based operations should underpin medium term growth while the digital business offers opportunities in a rapidly growing market.

Goodman Group (ASX: GMG)

It has been a difficult year for the Goodman share price, as you can see on the chart below.

The good news is that Bell Potter appears to believe that 2023 could be much better for the integrated industrial property company and its shareholders. It explained:

The long term outlook for industrial and logistics properties is favourable given the continuing growth in ecommerce (or on-line retail sales) and data storage requirements as well as supply chain optimisation and the growing middle class in developing countries.

Suncorp Group Ltd (ASX: SUN)

Finally, the broker is feeling positive about this insurance and banking giant. This is thanks partly to company offloading its banking operations to Australia and New Zealand Banking Group Ltd (ASX: ANZ).

Its analysts commented:

The cash sale of Suncorp Bank to ANZ is expected to yield net proceeds of $4.1 billion and the group’s intention is to return the majority of these proceeds to shareholders through a combination of a fully franked special dividend and a pro-rata capital return after completion of the transaction, which is targeted for the second half of calendar 2023.

The post Bell Potter names 3 ‘favoured’ ASX shares to buy in 2023 appeared first on The Motley Fool Australia.

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More reading

• Leading brokers name 3 ASX shares to buy today
• These are the explosive ASX growth shares to buy for 2023 according to experts
• Down but not out: Expert names 2 slaughtered ASX shares to buy right now
• To retire early, I’d invest $100 each week in ASX 200 shares
• 10 ASX shares to buy in 2023

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 dreaded ‘i’ words — inflation and interest rates — have monopolised financial headlines for most of the year. As such, whilst the S&P/ASX 200 Index (ASX: XJO) has delivered average capital growth of around 8% per annum over the past 20 years, it has fallen painfully short of this in 2022.

But, even during years when the stock market is struggling and share price gains are more difficult to lock in, it’s still possible for investors to build wealth. One way of doing this is by owning dividend shares.

We asked our Foolish contributors which ASX dividend shares they reckon are ‘cracker’ buys in December for some new-year passive income. Here’s what the team came up with

7 best ASX dividend shares for December 2022 (smallest to largest)

Universal Store Holdings Ltd (ASX: UNI), $387.44 million

Adairs Ltd (ASX: ADH), $380.32 million

Codan Limited (ASX: CDA), $681.19 million

TechnologyOne Ltd (ASX: TNE), $4.51 billion

Medibank Private Ltd (ASX: MPL), $8.15 billion

Westpac Banking Corp (ASX: WBC), $81.79 billion

BHP Group Ltd (ASX: BHP), $236.87 billion

(Market capitalisations as at market close on 12 December 2022)

Why our Foolish writers love these ASX dividend shares

Universal Store Holdings Ltd

What it does: Universal Store is an omnichannel retailer focused predominately on the youth apparel industry through its Universal Store and Thrills brands. The company is also trialling the Perfect Stranger brand as a standalone retail concept.

By James Mickleboro: Although the retail sector is facing some tough times due to the cost of living crisis, I believe Universal Store is well-placed for further solid sales growth, thanks to its focus on younger consumers. That’s because the company’s target demographic will be less impacted by rising interest rates and also stands to benefit from an increase in the minimum wage.

Combined with its store expansion plans, I believe Universal Store can deliver robust earnings and dividend growth for the foreseeable future. Goldman Sachs expects this to be the case and is forecasting fully-franked dividends per share of 26.1 cents in FY 2023, 29.9 cents in FY 2024, and 33.2 cents in FY 2025. Based on the latest Universal Store share price of $4.71, this equates to yields of 5.5%, 6.3%, and 7%, respectively.

Motley Fool contributor James Mickleboro does not own shares in Universal Store Holdings Ltd.

Adairs Ltd

What it does: Adairs is a retailer of homewares and furniture with three different businesses – Adairs, Mocka, and Focus on Furniture.

By Tristan Harrison: Adairs has major plans to grow its product range and increase its market share. The company says there is a strong link between retail floor space and sales and, in turn, between sales and membership numbers.

Adairs is looking to grow its floor area by 5% per annum over five years and thinks it can increase its total members from around one million (as at the end of FY22) to 1.5 million over this time.

Furthermore, the company has plans to add 30 new Focus on Furniture stores nationwide and grow online sales across each of its businesses. It’s also planning to sell online-only business Mocka’s furniture in its bricks and mortar stores in future, creating further synergies.

Adairs wants to increase its sales from $564.6 million in FY22 to more than $1 billion over five years.
After a 45% fall of the Adairs share price in 2022, Commsec numbers imply an 11.6% grossed-up dividend yield in FY23.

Motley Fool contributor Tristan Harrison does not own shares in Adairs Ltd.

Codan Limited

What it does: Codan may not be a household name, but the products it manufactures and supplies span broadly. After acquiring Zetron and Demo Tactical Communications (DTC), the Adelaide-based company is now heavily involved in communications technology used in defence, emergency response, and sporting sectors.

In addition, Codan makes and sells advanced metal-detecting devices under its popular Minelab brand.

By Mitchell Lawler: I originally highlighted Codan back in our August instalment of top ASX dividend shares. Unfortunately, six days later in its FY 2022 results, Codan pointed to a weak outlook for its metal detector segment. Since then, the Codan share price has tumbled 57% – not my finest display!

However, I believe the sell-off is overdone, and investors lack appreciation for the value in Codan’s communications business.

DTC received its largest-ever order for supplying software-defined mesh radios to the military in FY22, and Zetron is one of only two full-suite integrated emergency response technology providers globally. All of this for a price-to-earnings (P/E) ratio of 6.7.

Given the critical nature of its products, Codan might be able to lift prices with inflation. I believe the company’s 20% bottom-line margin suggests a reasonable level of pricing power exists. Codan currently offers a dividend yield of 7.5%.

Motley Fool contributor Mitchell Lawler does not own shares in Codan Limited.

TechnologyOne Ltd

What it does: TechnologyOne develops and provides enterprise software to clients across industries, including government, education, utilities, and financial services.

By Brooke Cooper: I often highlight strong balance sheets and competitive advantages as some ‘green flags’ I look for in a stock, and I think TechnologyOne has both in spades.

The company boasted $175.9 million of cash and no debt at the end of financial year 2022 while its customer retention sat at industry-leading levels – more than 99% for the period.

The company also posted record full-year profits and currently offers a dividend yield of around 1%. Whilst this yield may not sound overly enticing right now, I believe the company has the potential for significant growth and, thereby, higher payouts in the future.

Looking to the future, TechnologyOne is targeting $500 million of annual recurring revenue by financial year 2026 and expects to continue doubling in size every five years.

Motley Fool contributor Brooke Cooper does not own shares in TechnologyOne Ltd.

Medibank Private Ltd

What it does: Medibank is an Australian health insurance company that provides services to around 3.9 million Australians via its Medibank and AHM brands.

By Matthew Farley: The Medibank share price currently trades near the bottom of its 52-week range, which I believe makes it potentially undervalued. As at Monday’s close, the company’s shares were trading hands for $2.96, with a dividend yield of 4.53%.

One expert from global fund manager Schroders believes the sell-off in Medibank shares after the company’s data breach in November is partially irrational. The investing team at QV Equities appears to agree, having recently used the opportunity to scoop up additional shares for its portfolios.

I believe Medibank is a defensive stock worth considering for today’s volatile market conditions and uncertain economic outlook.

Motley Fool contributor Matthew Farley does not own shares in Medibank Private Ltd.

Westpac Banking Corp

What it does: Westpac is an ASX 200 blue chip that needs little introduction. It is one of the largest retail banks in the country and is also one of the oldest companies in Australia.

By Sebastian Bowen: Most ASX bank shares have a well-earned reputation as generous dividend payers, and Westpac is no different. After COVID crippled Westpac’s shareholder payments, the bank has spent the past two years finding its dividend feet. In 2022, Westpac will dole out $1.25 in dividends per share, a nice increase over 2021’s total of $1.18.

ASX broker Morgans has recently come out with an add rating on Westpac. It’s expecting Westpac shares to rise to $25.80 apiece over the coming 12 months and pay out attractive dividends going forward.

At Monday’s closing price of $23.36, Westpac shares offer a fully-franked dividend yield of more than 5%.

Motley Fool contributor Sebastian Bowen does not own shares in Westpac Banking Corp.

BHP Group Ltd

What it does: BHP is among the world’s largest producers of iron ore with a growing footprint in the copper sector. The S&P/ASX 20 Index (ASX: XTL) miner is the largest company, by market cap, on the ASX.

By Bernd Struben: BHP is a long-term reliable dividend stock, traditionally paying two fully-franked dividends each year. The miner also offers a dividend reinvestment plan (DRP).

With iron ore and copper prices soaring in early 2022, BHP paid some outsized dividends. Shares currently trade on a trailing yield of 10.1%. Whilst that’s unlikely to be sustainable long term, Citi does forecast a resilient iron ore price for 2023, potentially retesting US$150 per tonne.

And Goldman Sachs forecasts that the copper price could hit new record highs next year. Should that eventuate, it could mean another year of outsized dividends.

The BHP share price is up 10% year to date.

Motley Fool contributor Bernd Struben does not own shares in BHP Group Ltd.

The post Top ASX dividend shares to buy in December 2022 appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Tuesday
• Leading brokers name 3 ASX shares to buy today
• 3 ‘strong’ ASX 200 dividend shares for 2023 revealed: expert
• Westpac share price slumps as Tyro takeover scrapped
• Tyro share price crashes 22% after ending takeover talks with Westpac and Potentia

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Adairs. The Motley Fool Australia has positions in and has recommended Adairs. The Motley Fool Australia has recommended Technology One 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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