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The Insurance Australia Group Ltd (ASX: IAG) dividend should be landing in your bank accounts today.

Despite the ASX being closed due to the Queen of England’s memorial public holiday, the insurance giant went ahead with the dividend payment.

At yesterday’s market close, IAG shares finished at $4.44, down 1.11%.

For context, the S&P/ASX 200 Index (ASX: XJO) was deep in the red ahead of the US Fed Reserve meeting today.

The benchmark index fell 1.56% to 6,700.2 points.

Let’s take a look at what shareholders will be getting from the IAG dividend.

IAG pays out final dividend

On 12 August, IAG reported a relatively mixed performance in its full-year results for the 2022 financial year.

This led the board to declare the smallest dividend for more than a decade, not inducing during COVID-19.

As such, a partially franked final dividend of 5 cents per share will be paid on today to eligible shareholders.

This brings the full-year dividend to 11 cents apiece, which equates to a payout of 78.1% on reported NPAT.

IAG’s dividend policy is to distribute between 60% to 80% of NPAT excluding any after-tax earnings impact.

When calculating against the current share price, IAG is trailing on a dividend yield of 2.47%.

Investors who elected for the dividend reinvestment plan (DRP) will see a number of shares added to their portfolio. This was based on the volume weighted average price from 29 August to 2 September which resulted in $4.64 per share.

No DRP discount rate was offered to shareholders.

IAG share price summary

Whilst moving in circles during recent times, the IAG share price has gained more than 4% in 2022.

When looking at the last 12 months, its shares have travelled the other way to post a loss of 12%.

IAG has a price-to-earnings (P/E) ratio of 33.67 and commands a market capitalisation of roughly $10.95 billion.

The post The IAG dividend is hitting bank accounts today. What you need to know appeared first on The Motley Fool Australia.

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More reading

• IAG shares ‘highest quality’ in the sector: fundie
• Here’s how many IAG shares the company’s executives have been buying in the past 2 weeks
• Why is the next IAG dividend not fully franked?
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Aaron Teboneras 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 Insurance Australia Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Amazon (NASDAQ: AMZN) is no stranger to antitrust lawsuits. Just the other day, California filed a suit against Amazon alleging anticompetitive pricing policies. This filing isn’t the first time these allegations have come up, and it likely won’t be the last.

Because of the current environment, it’s not a far-fetched idea that Amazon could be split up voluntarily or by the government. It’s a worthwhile exercise to value each business segment of the company separately for two reasons. First, it could prepare investors for a split. Second, it also serves as a method to value the company and determine if it’s worth an investment today.

Let’s see how each segment is valued and if Amazon is worth your investment dollars.

A large business with multiple segments

Amazon’s business can be split into two main segments: commerce and cloud computing. Commerce is much broader than the website you order items from. It also includes advertising, third-party seller services, and subscription products. Cloud computing, better known as Amazon Web Services (AWS), provides the infrastructure to process workloads through the cloud.

The commerce segment also generates the bulk of Amazon’s revenue. Over the past 12 months, the company brought in $485.9 billion in sales overall, and 85% of that came from commerce. However, that segment hasn’t made any money over the past year. It lost $7.1 billion; whereas, AWS made $22.4 billion in operating income.

Those figures group all of the many commerce segments together. Amazon doesn’t break out its expenses for each segment, but it does break out its sales.

Segment	Q2 Net Sales	Q2 YOY Growth	Share of   Total Revenue
Online stores	$50.9 Billion	0%	42%
Physical stores	$4.7 Billion	13%	4%
Third-party seller services	$27.4 Billion	13%	23%
Subscription services	$8.7 Billion	14%	7%
Advertising services	$8.8 Billion	21%	7%
Amazon Web Services (AWS)	$19.7 Billion	33%	16%
Other	$1.1 Billion	135%	1%

Source: Amazon. YOY = year over year.

This table provides valuable insights. First, its online-store segment didn’t grow its sales but is still the largest. Second, AWS is the fastest-growing segment (the “other” segment is volatile, so growth likely isn’t sustainable) and the second largest. Lastly, advertising services still grew 21% year over year during a difficult ad environment.

Overall, Amazon’s quarter was strong; it was just dragged down by its largest segment having difficult comparisons, because 2021’s second quarter was still during the height of COVID-19. But should the company need to be split, it’s challenging to determine which segments would go where.

AWS would likely need to be its own entity because it is unrelated to commerce. Advertising could be seen as a conflict of interest, as it should theoretically be a neutral marketplace. One seller could pay Amazon to place its product above other similar ones, even if it is lower rated or more expensive. The rest of the divisions — online stores, physical stores, third-party services, and subscriptions — could remain a separate company.

That leaves three separate businesses: cloud computing, advertising, and commerce. Now it’s time to determine what each business is worth.

Valuation by parts

To determine what each entity is worth, I’ll apply a valuation comparable to companies that perform services similar to the newly formed Amazon businesses. While this approach has flaws, it’s a good way to estimate a valuation for each business.

First, investors could compare the commerce business to retail giants like Target Corporation (NYSE: TGT) or Wal-mart Stores, Inc.(NYSE: WMT). These two trade for 0.7 and 0.6 times sales, respectively. While these two companies have a more expensive physical footprint, Amazon has to pay for delivery. However, unlike Amazon’s commerce business, Walmart and Target are consistently profitable. Because of this, I will apply a valuation of 0.5 times sales to Amazon’s commerce business.

For advertising, The Trade Desk (NASDAQ: TTD) is a similar business. Its ad-tech platform connects buyers to sellers to ensure advertisers get the best results. Amazon’s platform has similar capabilities but also deals directly with ads, unlike The Trade Desk. Because of this, I’m going to discount this business significantly. The Trade Desk is valued at 22 times sales, but I’m going to cut that in half for Amazon’s ad business to 11 times sales.

Lastly, AWS is likely the most valuable. It’s growing quickly and is highly profitable. Its two main competitors, Microsoft’s (NASDAQ: MSFT)Azure and Alphabet’s (NASDAQ: GOOGL)(NASDAQ: GOOG)Google Cloud, aren’t stand-alone companies, so a valuation can’t be deduced from them.

There aren’t many businesses like it, but Adobe Inc.(NASDAQ: ADBE) comes close. The product isn’t close to AWS, but its subscription revenue stream and high operating margins (35%) are similar to AWS. Adobe trades at 8.5 times sales, which is influenced by recent acquisition news. Before then, it traded at 11 times sales. I’ll apply a valuation of 13 times sales to AWS to adjust for this drop and account for AWS’ faster sales growth.

Now, let’s see the value of all three businesses.

Business	TTM Revenue	P/S Valuation	Business   Valuation
Commerce	$379.9 Billion	0.5	$189.9 Billion
Advertising	$33.9 Billion	11	$372.9 Billion
AWS	$72.0 Billion	13	$936.0 Billion

Source: Amazon. P/S = price to sales. TTM = trailing 12 months.

Now, let’s add up those three segments. Using this method, Amazon’s entire business is worth $1.5 trillion. However, its current market cap is $1.26 trillion. That means, according to my valuation method, the company’s stock is currently undervalued by 19%. 

So, if Amazon gets broken up by regulators or through its own decision, investors will likely make a quick profit through a split. But that action might not happen.

One thing that is certain is that investors can purchase Amazon’s stock today. With its recent price movement, it looks undervalued, and investors should consider establishing a position and holding it for an extended period, even if it gets broken up.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Here’s why splitting up Amazon could mean huge returns for shareholders appeared first on The Motley Fool Australia.

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• Is Tesla stock recession-proof?
• Why Amazon and these other leading tech stocks fell today
• Move over, cryptocurrencies: a digital euro could be coming with help from Amazon
• Which of these Warren Buffett stocks is the better buy?

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Keithen Drury has positions in Adobe Inc., Alphabet (C shares), and The Trade Desk. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Adobe Inc., Alphabet (A shares), Alphabet (C shares), Amazon, Microsoft, Target, The Trade Desk, and Walmart Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2024 $420 calls on Adobe Inc. and short January 2024 $430 calls on Adobe Inc. The Motley Fool Australia has recommended Adobe Inc., Alphabet (A shares), Alphabet (C shares), Amazon, and The Trade Desk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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There’s no denying that the lithium industry is hot right now.

In fact, some of the returns that have been generated in the industry this year are staggering when you consider that the ASX 200 index has dropped almost 12% year to date.

The good news is that you’re not too late to the party. Listed below are two ASX lithium shares that have been tipped as buys:

Allkem Ltd (ASX: AKE)

The first ASX lithium share to look at is Allkem. It is a top five global lithium miner with a collection of world class operations.

From these operations, the company recently revealed plans to increase its production three times over by 2026. This is expected to allow Allkem to maintain a 10% share of the global lithium market over the next decade.

Macquarie is very bullish on Allkem. Earlier this month, the broker put an outperform rating and lofty $21.00 price target on its shares. Its analysts like the company due to its plan to triple production by 2026 and even see potential increases beyond this.

Pilbara Minerals Ltd (ASX: PLS)

Another ASX lithium share that has been tipped as a buy is Pilbara Minerals.

This lithium giant is the company behind the Pilgangoora Lithium-Tantalum Project, which is located approximately 120kms from Port Hedland in the Pilbara region of Western Australia.

In FY 2022, Pilbara Minerals produced 377,902 dmt of spodumene concentrate. This and sky high lithium prices underpinned stellar sales and profit growth.

The good news is that management isn’t resting on its laurels. Like Allkem, it is aiming to capitalise on strong lithium prices with material production growth. Management is aiming to grow its production to 1 million dmt per annum in the coming years.

The team at Macquarie is also very positive on Pilbara Minerals. Earlier this week, the broker reiterated its outperform rating and $5.60 price target on the company’s shares. Macquarie was impressed with Pilbara Minerals’ latest lithium auction and believe the strong pricing reflects tight market conditions.

The post Is it too late to invest in ASX lithium shares? Apparently not… appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• These three ASX lithium shares defied Wednesday’s selloff
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Top brokers name 3 ASX shares to buy today
• Pilbara Minerals share price hits record high following lithium auction

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

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I believe that investing in ASX shares is one of the best things that people can do to grow their long-term wealth. But how much does a beginner investor need to start?

The length of time people spend growing their fortune can make just as much difference as how much money people invest and what they invest in. The power of compound returns is very strong.

Albert Einstein once supposedly said about compounding:

Compound interest is the eighth wonder of the world. He who understands it earns it, he who doesn’t pays it.

Compound interest in action

The Moneysmart website has a number of useful calculators, including a compound interest one. I’m going to show how putting small amounts of money to work over long periods of time can lead to good results.

If someone starts investing when they’re 25 and invests $250 a month for 40 years, and the share market returned an average of 10% per year, that person would contribute $120,000 themselves but finish with a total of $1.33 million.

What if that person started 10 years later? What if they invested $250 a month in ASX shares for 30 years? They would contribute $90,000 — $30,000 less – and their portfolio would finish at $493,500. A reduction of more than $800,000 largely because those extra years of compounding were missed.

There’s a phrase used to describe this effect in action: “Time in the market beats timing the market”. In other words, the biggest boost comes from staying invested for a long period of time, rather than trying to choose the best time to invest.

How much money is needed to start investing in ASX shares?

Some types of investing, such as property, may need tens of thousands of dollars to get started as an investor. Think how long it could take to save up that initial deposit, and how many years of compounding someone is likely to miss out on.

Another advantage of share investing is that it doesn’t require a large amount of debt hanging over one’s head to invest either.

With ASX shares, once someone is 18, they can get started with a broker like Commsec, CMC Markets, NABTrade, and so on (there are plenty to choose from – do some comparisons).

The initial investment for an ASX share is usually a minimum of $500. However, once an investor owns shares of that investment, they can sometimes (depending on the broker) top up their holding with smaller investments.

Some brokers may have a very low brokerage fee rate for a trade worth up to $1,000, which is a solid investment size in my view.

Investors may want to ensure they are spending as little on brokerage as possible – both at the purchasing stage and the frequency of trades. It’s better for the dollars to be used for compounding the portfolio rather than boosting the broker’s profit and paying for their next boat.

What ASX shares can produce compound returns

Investing doesn’t have to be complicated. Just picking a quality exchange-traded fund (ETF) that invests in a number of businesses can work well.

ETFs don’t require much investment work and can do the compounding for investors, such as Vanguard MSCI Index International Shares ETF (ASX: VGS), VanEck Morningstar Wide Moat ETF (ASX: MOAT), VanEck MSCI International Quality ETF (ASX: QUAL), and iShares S&P 500 ETF (ASX: IVV).

But, there are plenty of individual companies that could deliver long-term growth as well.

The post How much is too little to start investing in ASX shares? appeared first on The Motley Fool Australia.

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• 3 quality ETFs for ASX investors to buy now
• What does Warren Buffett think about investing in ETFs?
• Could right now be the perfect time to buy the Vanguard Index International Shares ETF?
• Here are 2 high quality ETFs for ASX investors to buy right now
• Don’t miss out on these high quality ASX ETFs

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 Vanguard MSCI Index International Shares ETF. The Motley Fool Australia has recommended VanEck Vectors Morningstar Wide Moat ETF, Vanguard MSCI Index International Shares ETF, and iShares Trust – iShares Core S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Cryptocurrencies were first developed as a way to circumvent traditional banking institutions and decentralise the perceived power they had over financial transactions.

As an anti-authority movement, it may not surprise you that crypto enthusiasts have a language all of their own.

“There undeniably exists a very real and powerful subculture bred from within the crypto community,” reported market research provider WARC.

“[It has] the potential to drive a shift in future urban lifestyles and consumption patterns – not unlike the emergence of streetwear and urban culture rooted in the countercultures of the 1980s and 1990s.”

Perhaps you have seen some of this crypto jargon and wondered what they’re talking about?

Fortunately, British financial services platform Uphold recently published a glossary of crypto slang, which it calls the ‘cryptionary’.

Here are some selected words and their definitions:

HODL

This is “one of the longest-serving” cryptocurrency jargon, which stands for ‘hold on for dear life’. It is also a misspelling of ‘hold’ and refers to the act of not selling cryptocurrency for a long time.

Diamond hands

Similar to HODL, diamond hands refers to an investor who will hold onto their crypto assets regardless of volatility. The opposite of this is “paper hands”, which describes a person who will sell at the first hint of trouble.

Soy boy

This is a pejorative term for an investor who can’t tolerate dips in the crypto market.

Ape In

This is a verb that describes buying into a digital asset hastily without doing much research.

The Flippening

A topic that has been persistent for many years now, the flippening refers to the potential point when Ethereum (CRYPTO: ETH) overtakes Bitcoin (CRYPTO: BTC) as the crypto with the largest market capitalisation.

Bitshaming

This is the act of mocking a Bitcoin investor for holding it for years but not becoming rich out of it yet.

Whale

These creatures are investors who hold massive proportions of a particular cryptocurrency on issue. Due to the size of their holdings, any buying or selling activity by whales can influence the market pricing.

Rekt

This is a misspelling of ‘wrecked’, which describes an investment that has absolutely collapsed and has lost the holder a significant amount of money.

Floor sweeping

This refers to a trading activity when one individual, or a small group, buys up a large number of a particular cryptocurrency.

Shill

This is a verb describing the act of publicly endorsing a specific crypto in order to drum up hype and demand. Some celebrities and social media influencers have been accused of such acts.

Bag holder

While this term describes a person who holds their digital asset for a long time, it has a decidedly negative slant compared to ‘diamond hands’. Bag holders hold onto their crypto for too long and are left with useless tokens.

The post Soy boy and bitshaming: Here’s your guide to crypto slang appeared first on The Motley Fool Australia.

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• How will the Ethereum merge impact the Bitcoin price?
• Why Bitcoin, Dogecoin, and Shiba Inu fell this morning
• Spinoff token EthereumPOW price crashes 86% post merge. Here’s why
• 3 cryptocurrencies to buy and hold forever
• Ethereum’s merge is done: now what?

Motley Fool contributor Tony Yoo has positions in Bitcoin and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin and Ethereum. The Motley Fool Australia owns and has recommended Bitcoin and Ethereum. 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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Watch out! BHP Group Ltd (ASX: BHP) is paying out the ASX’s biggest dividend today, spending a mammoth $12.5 billion in cash.

This means that BHP has taken the mantle of paying out the biggest amount in ASX corporate history.

With the ASX closed due to the National Day of Mourning for the Queen of England, BHP shares closed at $37.96 yesterday.

For context, the S&P/ASX 200 Index (ASX: XJO) also finished lower on Wednesday, down 1.56%.

BHP pays out history-making dividend

BHP reported record numbers across key metrics in its full-year results for the 2022 financial year.

In summary, underlying EBITDA from continuing operations jumped 16% to a record US$40,634 million driven by BHP’s coal operations.

Subsequently, this flowed through to a stronger free cash flow of US$29,285 million, up 13%.

Underlying attributable profit grew by 26% to US$21,319 million.

This led the board to declare a fully franked dividend of US$1.75 per share to be paid on 22 September (today). This is around A$2.55 per share based on the payment currency equivalent.

For those who elected in the dividend reinvestment plan (DRP), there was no discount rate offered by the company. 

This brings the total FY22 dividend to US$3.25 per share, an increase of 8% compared to FY21’s full-year dividend.

The company has a 50% minimum payout policy. The cash dividend announced today is equivalent to a 77% payout ratio.

BHP share price summary

Despite tumbling 9% in the past month, the BHP share price has lifted 3% in 2022.

When looking at the last 12 months, its shares have posted a gain of 13%.

BHP has a price-to-earnings (P/E) ratio of 6.35 and commands a market capitalisation of roughly $192.1 billion.

The post The history-making BHP dividend is being paid out today. Here’s the lowdown appeared first on The Motley Fool Australia.

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• Why is the BHP share price lagging the ASX 200 today?
• This is how I found a 15-bagger ASX share: fund manager
• $18 billion of ASX dividends are being paid out this week. Here’s the lowdown
• Here’s what this top broker is saying about the BHP share price
• Why China’s slowdown isn’t as bad as it looks for ASX 200 mining shares

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

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The ASX is closed today but that shouldn’t stop Santos Ltd (ASX: STO) shareholders from receiving a payday.

It’s raining dividends for Santos shareholders today

Last month, Santos handed in its first-half 2022 results. In doing so, the ASX 200 oil and gas business declared an unfranked interim dividend of 7.6 US cents. This is equivalent to ~10.93 cents in Aussie dollars.

Santos shares went ex-dividend for this payment back on 22 August. So, any Santos shares bought on or after this date won’t be eligible for today’s payout.

Due to the absence of a dividend reinvestment plan (DRP), every investor will be receiving this dividend in cash.

Today’s 7.6 US cents per share payment represents a pleasing 38% increase from the 5.5 US cent interim dividend Santos declared in 2021.

This dividend hike was supported by record first-half free cash flow and underlying earnings.

In 1H22, Santos’ free cash flow rocketed by 199% to US$1.7 billion while underlying profit catapulted 300% to US$1.3 billion. 

These results were underpinned by significantly higher oil and LNG prices due to strong global energy demand. Not to mention the contribution from the recent Oil Search merger.

Adding in the unfranked final dividend Santos declared back in February of 8.5 US cents, Santos shares are trading on a trailing dividend yield of 2.9%.

Looking ahead, broker Macquarie is forecasting Santos to declare a bumper final dividend of 18 US cents. This would take total FY22 dividends to 25.6 US cents, representing a dividend yield of around 4.9%.

Santos share price snapshot

On the back of strong commodity prices, Santos shares have bucked the broader market weakness to push higher this year. 

The Santos share price has jumped 22% in the year to date. It’s well and truly outperformed the S&P/ASX 200 Index (ASX: XJO), which has backpedalled 10%.

Through its merger with formerly ASX-listed Oil Search at the end of last year, Santos is comfortably the ASX’s second-largest energy business.

It currently commands a market capitalisation of $26 billion.

Despite Santos’ formidable size, it’s dwarfed by Woodside Energy Group Ltd (ASX: WDS) which has a market cap of around $62 billion.

Woodside’s market cap has been boosted by M&A activity of its own, acquiring the oil and gas portfolio from BHP Group Ltd (ASX: BHP) earlier this year.

The post Own Santos shares? Get ready to receive your dividends appeared first on The Motley Fool Australia.

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More reading

• Is the Santos share price ‘starting to resume its uptrend’?
• $18 billion of ASX dividends are being paid out this week. Here’s the lowdown
• ‘Bullish sign’: Expert names 2 rising ASX shares to buy right now
• 5 things to watch on the ASX 200 on Tuesday
• Broker names 2 of the best ASX shares to buy now

Motley Fool contributor Cathryn Goh 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 Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Income investors that are looking for dividend options this week might want to check out the two ASX shares listed below.

Both of these ASX dividend shares have recently been tipped as buys by brokers. Here’s why they are bullish:

New Hope Corporation Limited (ASX: NHC)

According to a note out of Credit Suisse, its analysts have retained their outperform rating with a slightly trimmed price target of $7.80 on this coal miner’s shares. This follows the release of a strong full year result for FY 2022, which saw New Hope declaring dividends that were ahead of expectations.

Looking ahead, the broker believes the company is well-placed to pay even bigger dividends in the coming years thanks to sky high coal prices. In light of this, it sees significant value in the New Hope share price at the current level.

Credit Suisse is forecasting a fully franked $1.67 per share dividend in FY 2023 and then a fully franked $1.39 per share dividend in FY 2024. Based on the current New Hope share price of $6.16, this will mean stunning yields of 27.1% and 22.5%, respectively.

Origin Energy Ltd (ASX: ORG)

A note out of Macquarie reveals that its analysts have retained their outperform rating and $7.42 price target on this energy company’s shares. This follows news that the company is selling its Beetaloo Basin interests to Tamboran Resources for $60 million plus royalties.

The broker is pleased with the decision and expects it to boost Origin’s ESG credentials. In addition, it believes the cost savings could support higher dividends. Outside this, Macquarie highlights that higher than expected oil prices are supportive of strong free cash flow generation.

Macquarie is expecting this to lead to dividends per share of 35 cents per share in FY 2023 and 30 cents per share in FY 2024. Based on the current Origin share price of $5.74, this will mean yields of 6.1% and 5.2%, respectively, for investors.

The post Brokers name 2 ASX dividend shares to buy appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• 3 ASX 200 shares paying out ‘special’ dividends in 2022
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• Macquarie tips even more upside for New Hope share price
• Here are the top 10 ASX 200 shares today

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

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It has been a tough week so far for the Fortescue Metals Group Limited (ASX: FMG) share price.

Since announcing its decarbonisation strategy on Tuesday, the mining giant’s shares have tumbled over 5% to $16.54.

Why is the Fortescue share price falling?

Investors appear to have been selling down the Fortescue share price amid concerns that the company’s dividends could be under threat.

While this may not be news to many readers, as I have previously warned about the impact the company’s decarbonisation plans could have on its dividends, the market finally seems to be waking up to this threat now.

This is because Fortescue has announced that it intends to spend US$6.2 billion or A$9.2 million to decarbonise its Pilbara operations.

While the company has not advised whether it will use its free cash flow or take on debt to fund these plans, the general consensus is that it will use the former and cut back its dividend payments.

This means the generous dividend yields that Fortescue’s shares have been offering in recent years could be coming to an end.

What are analysts saying?

According to a note out of Goldman Sachs, its analysts continue to believe that Fortescue’s dividend payout ratio will be impacted by this strategy. It commented:

Today’s announcement and commitment underpins our view that FMG is at an inflection point on capital allocation, and to fund the ambitious decarb strategy, we assume the dividend payout ratio falls from the current 75% to 50% from FY24 onwards.

Goldman added:

The capital estimate of US$6.2bn represents the incremental spend over and above existing planned sustaining and mining fleet replacement capex and excludes Iron Bridge mining fleet replacement, implying the overall decarbonisation spend is above our previous US$7-8bn estimate (not in our numbers) which included the Pilbara Energy Connect (PEC) project. While FMG expect the investment to generate a positive NPV largely on the displacement of diesel costs, the target opex saving of ~US$0.8bn pa was below our prior estimate of ~US$1bn, but this will depend on oil and WA domestic gas price assumptions.

Fortescue dividend forecast

In light of the above, the broker is forecasting fully franked dividends per share of 81 US cents in FY 2023, 37 US cents in FY 2024, and then 31 US cents in FY 2025.

Based on the current Fortescue share price at exchange rates, this will mean yields of 7.3%, 3.3%, and 2.8%, respectively.

Goldman has a sell rating and $12.10 price target on the company’s shares.

The post Is the Fortescue dividend at risk from the miner’s $9b decarbonisation strategy? appeared first on The Motley Fool Australia.

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More reading

• Why has the Fortescue share price been having such a rough trot lately?
• This is how I found a 15-bagger ASX share: fund manager
• Are ASX hydrogen shares worth buying right now?
• Fortescue share price edges higher amid $9b ‘industry-leading decarbonisation strategy’
• Why China’s slowdown isn’t as bad as it looks for ASX 200 mining 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 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 wanting to add some ASX 200 shares to your portfolio, then you may want to check out the two listed below.

Here’s why these ASX 200 shares come highly rated:

Goodman Group (ASX: GMG)

The first ASX 200 share to look at is Goodman Group. It is an integrated commercial and industrial property group which has generated consistently strong returns for investors over the last decade.

This has been underpinned by the diversity of Goodman’s portfolio and its exposure to quick growing markets such as ecommerce.

Pleasingly, the ecommerce market has resulted in strong demand from blue chip customers such as Amazon, Showpo, and Walmart. And given how the shift to online shopping is only really getting started, these properties look set to be in strong demand for a long time to come.

One broker that is very positive on Goodman is Goldman Sachs. It has a buy rating and $25.40 price target on its shares.

ResMed Inc. (ASX: RMD)

Another ASX 200 share that has been rated as a buy is ResMed. It is a medical device company aiming to change lives by developing, manufacturing, and distributing innovative medical devices and cloud-based software solutions. These solutions help to better diagnose, treat, and manage sleep-disordered breathing, chronic obstructive pulmonary disease (COPD), and other key chronic diseases.

Demand has been strong for its innovative products in recent years, leading to stellar sales and earnings growth.

The good news is that ResMed appears well-placed to continue this positive form in the future. This is thanks to its world-class products, the massive number of undiagnosed sleep apnoea sufferers globally, and its rapidly growing digital health ecosystem.

Credit Suisse is positive on the company and has an outperform rating and $40.00 price target on its shares.

The post Experts name 2 outstanding ASX 200 shares to buy right now appeared first on The Motley Fool Australia.

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More reading

• Looking to buy ASX shares? Expert reveals ‘one metric to assess the quality of a business’
• I regret not buying 2 ASX shares that became 10-baggers: fundie
• One ‘safe’ and one ‘exciting’ ASX share to own for years like Warren Buffett: fund manager
• 2 blue chip ASX 200 shares to boost your portfolio: experts
• Analysts name 2 excellent blue chip ASX 200 shares to buy now

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