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The ex-dividend date is an important day for companies in the S&P/ASX 200 Index (ASX: XJO). 

When an ASX 200 share goes ex-dividend, buyers won’t be eligible to receive the company’s upcoming dividend payment. 

Plus, companies often see their shares drop when they turn ex-dividend as the value of the dividend payment leaves the share price.

With the ASX share market closed on Thursday as the nation commemorates Queen Elizabeth II, ASX 200 shares have been shuffling around their ex-dividend dates.

Here are three ASX 200 shares that will be calling time tomorrow on their upcoming dividend payments.

Cochlear Limited (ASX: COH)

First up, ASX 200 healthcare share Cochlear will be turning ex-dividend tomorrow.

This means that today is the last day to snap up the company’s partially-franked final dividend of $1.45.

If you’re on Cochlear’s share registry by the closing bell today, you can pencil in a payment date of 17 October.

Cochlear continued its recovery from COVID in FY22. Cochlear implant unit volumes grew by 5%, contributing to $935 million in cochlear implant sales revenue, up 3% from the prior year.

Meanwhile, underlying net profit after tax (NPAT) jumped 18% to $277 million.

The company returned 71% of these profits to shareholders through annual dividends of $3 per share, up 18% from FY21.

This puts Cochlear shares on a trailing dividend yield of 1.4%.

Cleanaway Waste Management Ltd (ASX: CWY)

The next cab off the rank is Cleanaway, which will be trading tomorrow without an unfranked final dividend of 2.45 cents per share.

The ASX 200 waste management company has a dividend reinvestment plan (DRP) available for shareholders. Those who don’t elect to participate should see this dividend payment come through on 7 October.

Cleanaway delivered double-digit sales growth in FY22 as revenue leapt 18% to $2.6 billion. This growth was driven by the acquisition of the Sydney Resource Network, new municipal contracts, and strong commodity prices.

However, operational challenges led to a 5% fall in underlying NPAT, which came in at $145 million.

Across the financial year, the company hiked its dividends by 7% to 4.9 cents per share. This means that Cleanaway shares are currently throwing out a trailing dividend yield of 1.8%.

In other news, last month, Cleanaway launched a $400 million capital raising to fund its ‘BluePrint 2030’ strategy. As part of this strategy, the company has acquired licensed composting business Global Renewables for $168.5 million.

Adbri Ltd (ASX: ABC)

Last but not least, Adbri will also be closing the curtain tomorrow on its upcoming dividend payment.

The ASX 200 construction materials company recently handed in its first-half 2022 results, trimming its interim dividend by 9% to 5 cents.

Shareholders should see this fully franked dividend land in their accounts on 5 October. 

Adbri shares have drudged up a 24% fall in the last month after the company’s HY22 results disappointed investors. 

The company grew its topline by 8% to $812 million on the back of strong construction and mining sector demand and improved pricing across most of its products.

However, Adbri’s profits didn’t hold up so well. Underlying NPAT dropped 1% to $54 million, weighed down by a series of operational challenges.

This included extreme wet weather events on the east coast of Australia, higher input costs, and anticipated lower lime volumes. 

Looking ahead, the company is expecting to grow its underlying earnings in the second half, driven by increased contributions from cement, concrete, aggregates, masonry, joint ventures, and recent acquisitions.

Adbri shares are currently trading on a trailing 12-month dividend yield of 5.9%, which grosses up to 8.4% with the benefit of franking credits.

The post Here are 3 ASX 200 shares turning ex-dividend tomorrow appeared first on The Motley Fool Australia.

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More reading

• ASX 200 better buy: Cochlear or CSL shares?
• Goldman Sachs says these ASX shares are flying under the radar post-results
• How do CSL shares stack up against Cochlear following earnings season?
• Here are the top 10 ASX 200 shares today
• ASX 200 reporting season weekly wrap: Top risers and fallers

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 positions in and has recommended Cochlear Ltd. The Motley Fool Australia has recommended Cochlear 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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Exchange traded funds (ETFs) continue to grow in popularity with investors and it isn’t hard to see why.

They give investors easy and low cost access to a large number of different shares that they wouldn’t ordinarily have access to. This can be a great way to build a diverse portfolio on a limited budget.

But which ETFs could be in the buy zone now? Two high quality options for investors to consider are listed below. Here’s what you need to know about them:

Betashares Global Sustainability Leaders ETF (ASX: ETHI)

The first ETF for investors to consider is the increasingly popular Betashares Global Sustainability Leaders ETF. As you might have guessed from its name, this ETF gives investors exposure to large global stocks that have been identified as “Climate Leaders.”

To be included in the fund, a company needs to be of a high quality and, importantly, pass strict ESG screens and be identified as climate leaders.

Among the companies that have been given the tick of approval are the likes of Adobe, Apple, Home Depot, Nvidia, Toyota, and Visa.

Shaw and Partners’ analyst Felicity Thomas is a fan of this ETF. She told Livewire earlier this year: “This is one of my favourites, so it’s definitely a buy for me. I really like that they do positive carbon screening.”

Vanguard MSCI Index International Shares ETF (ASX: VGS)

Another ETF for investors to look at is the Vanguard MSCI Index International Shares ETF.

This is one of the most popular ETFs on the Australian share market with over $4 billion of funds under management.

But that’s not overly surprising given that the Vanguard MSCI Index International Shares ETF provides investors with exposure to ~1,500 of the world’s largest listed companies. This makes it a great way for investors to instantly diversify their portfolio.

Among the companies you’ll be owning a slice of with this ETF are global giants such as Apple, Johnson & Johnson, Nestle, Procter & Gamble, and Visa.

The post Here are 2 high quality ETFs for ASX investors to buy right now appeared first on The Motley Fool Australia.

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More reading

• How I’d invest $10,000 in ASX shares when starting a family
• Why making your first purchase of ASX shares can be scary
• Here’s why the Vanguard International Shares ETF isn’t what it seems
• With most investors thinking the next big move in the stock market is down, Warren Buffett says times like these are your friend
• How I’d invest my very first $1,000 in ASX shares right 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 Vanguard MSCI Index International Shares ETF. The Motley Fool Australia has recommended Vanguard MSCI Index International Shares 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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The S&P/ASX 200 Index (ASX: XJO) has had a difficult run so far this year, tumbling 11% against a backdrop of rising interest rates and soaring inflation.

There are two key ways investors can make money from the share market: capital growth (i.e., share price rises), and dividends.

So, with capital growth taking a back seat amidst the volatility, ASX dividend shares are well and truly in the spotlight.

We know Aussies love their dividends, especially when they are fully franked.

With this in mind, I’ve rounded up the five highest-yielding ASX retail shares right now with a market capitalisation above $250 million.

Let’s check them out.

Peter Warren Automotive Holdings Ltd (ASX: PWR)

To kick things off, ASX car dealership group Peter Warren is currently sitting in fifth place.

After hitting the ASX boards last year, Peter Warren declared maiden dividends in FY22.

The group declared total dividends of 22 cents across the financial year, fully franked, with the final dividend of 13 cents set to be paid on 7 October.

Based on these dividends, Peter Warren shares are flashing a trailing dividend yield of 7.7%. Including franking credits, this yield jacks up to 11%.

JB Hi-Fi Limited (ASX: JBH)

Just edging out Peter Warren for fourth place is the nation’s largest entertainment retailer, JB Hi-Fi.

JB Hi-Fi grew its net profit after tax (NPAT) by 8% in FY22, which helped the ASX 200 retail share hike its annual dividends by 10% to $3.16, fully franked.

As a result, JB Hi-Fi shares are currently printing a trailing dividend yield of 7.7%. Throwing in franking credits dials up this yield to 11.1%.

Harvey Norman Holdings Limited (ASX: HVN)

JB Hi-Fi’s biggest rival Harvey Norman has pipped it at the post, starting off our podium finishers.

Harvey Norman delivered a marginal dip in profits in FY22. However, this didn’t stop the ASX 200 retail share from raising its annual dividends by 7% to 37.5 cents, fully franked.

At current levels, this puts Harvey Norman shares on a chunky trailing dividend yield of 8.9%, which grosses up to 12.7%.

Harvey Norman is the only ASX retailer on this list that is yet to trade ex-dividend. Its fully franked final dividend of 17.5 cents will be on offer until 13 October, before shares turn ex-dividend the following day.

This final dividend alone equates to a dividend yield of 4.1%.

Adairs Ltd (ASX: ADH)

Taking out the silver medal is homewares and furnishings retailer, Adairs.

In FY22, the company struggled to match its record results from the prior year. Cycling strong comparisons, NPAT slid by 30% to $45 million.

While Adairs kept its final dividend steady, it slashed total FY22 dividends by 22% to 18 cents, fully franked.

Nonetheless, Adairs shares are spinning up an eye-catching trailing dividend yield of 9.9%, which is boosted to 14.1% with the addition of franking credits.

Best & Less Group Holdings Ltd (ASX: BST)

Topping this list as the highest-yielding ASX retail share right now is value apparel business Best & Less.

It was a tale of two halves for Best & Less in FY22, battling COVID-19 restrictions and reduced foot traffic in the first half.

Overall, the company’s sales backtracked by 6% to $622 million, while NPAT dropped by 13% to $41 million.

In its first year as a listed company, Best & Less declared annual dividends of 23 cents, fully franked.

This means that Best & Less shares are currently trading on a meaty trailing dividend yield of 10.3%. Including franking credits, this yield cranks up to an even meatier 14.8%.

A word of caution

It’s important to note these are trailing dividend yields. As such, they reflect what’s happened in the past. 

And as we’re often reminded, past performance is not a reliable indicator of future performance. 

This can be especially true in industries such as retail, which are often overly susceptible to the peaks and troughs of the economic cycle.

ASX shares can cut their dividend payments with little to no warning.

So, heed caution on taking trailing dividend yields at face value. It’s also important to assess the sustainability of these yields into the future.

The post 5 ASX retail shares spruiking the highest dividend yields right now appeared first on The Motley Fool Australia.

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More reading

• Goldman Sachs names 3 mid cap ASX shares to buy
• 2 ASX dividend shares with yields over 6% right now
• Why Leo Lithium, Myer, Neuren, and Peter Warren shares are rising today
• 3 ASX All Ordinaries shares defying today’s rout to surge higher
• In a sea of red, guess which ASX All Ords share is booming 12% today

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 positions in and has recommended ADAIRS FPO and Harvey Norman Holdings Ltd. The Motley Fool Australia has positions in and has recommended ADAIRS FPO and Harvey Norman Holdings Ltd. The Motley Fool Australia has recommended JB Hi-Fi 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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Ask a Fund Manager

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In part one of this edition, we’re joined by Jesse Curtis, fund manager of the $4.1 billion Centuria Industrial REIT (ASX: CIP), Australia’s largest domestic pure-play industrial real estate investment trust. Today, Curtis explains how the REIT achieved revenue and dividend growth in FY22 and the impact of rising inflation and interest rates on the industrial and logistics sector moving forward.

The Motley Fool: CIP reported some solid FY22 results. The REIT increased total revenue by $44 million and bumped its dividend payout by 0.3 cents to 17.3 cents per share. How did you achieve that? 

Jesse Curtis: The REIT produced a strong set of results in FY22. It comes down to the composition of this portfolio being only industrial assets that sit in urban infill markets that are land constrained and have access to a large population within a short drive time.

What that means is we own assets that are in high demand from tenants with limited competition in the market, leading to the ability to achieve strong rental growth. In owning these assets, we’ve been able to execute some great leasing across the portfolio. As well as our value add strategies.

The strong FY22 results are really a credit to our in-house management team. We’ve got a large team who focus on the industrial business, right across development, leasing and asset management. They’re out there every day, understanding our customers’ needs to get the best results for our investors.

MF: Data centres and cold storage facilities were among the big acquisitions for the REIT the last time we spoke in February 2021. What’s the outlook for data centres today?

JC: With the continuing digitalisation of the world, we’re also continuing to see significant demand from users of data centre space. Think about your mobile, your computer, or even your smart TV. Everything is now stored in the cloud. That’s created a large amount of tenant demand in the data centre market to store this data.

More specifically, on our Telstra Corporation Ltd (ASX: TLS) data centre, that asset has been linked to CPI rent review. So we’ve been able to benefit from higher indexations as a result of a higher inflationary environment. Which, in turn, delivers more revenue to the REIT.

About 20% of our total portfolio is linked to CPI rent reviews. And the balance are fixed indexations within our contract leases.

MF: And what’s the outlook for cold storage facilities?

JC: On the cold storage side, since the beginning of the pandemic we have seen the percentage of total retail sales made online in Australia increase by 50%. It’s gone from about 9% of total retail sales made online to about 15% today.

One of the biggest drivers of that has been groceries. And in particular, fresh food. Think back to the lockdowns, a lot of people adopted e-commerce to get their groceries delivered to their front door. This has resulted in needing much more storage space in order to store those fresh products. So, we’ve seen a continued uptick in the amount of space required. Again, from the increased tenant demand, resulting in higher rents and higher revenues.

MF: The CIP share price reached all-time highs on 31 December. And it was still close to those highs shortly before the RBA announced its first interest rate hike in 11 years on 4 May. Following that announcement shares fell sharply. What do you think spooked investors? 

JC: Rising interest rates and prevailing inflation have resulted in stock price adjustments right across global equity markets. So, it’s not just an industrial theme, a REIT theme, or even an Australia theme. This has been an impact globally.

MF: How do you see this developing moving forward?

JC: I think our investors understand that property is a long-term play. A lot of people view property as an inflation hedge. So, when you get a higher inflation environment, you have more chance of keeping up with inflation or potentially even outperforming inflation with property backed assets.

If you think about where CIP is trading at its current price, we’re delivering a dividend yield of over 5%. And we think that’s very attractive given the strong fundamentals we’re seeing in the industrial market.

MF: What impact has the new inflationary environment had on your short-term outlook for the logistics space? 

JC: In the short term, the outlook is increasing revenue from our inflation-linked leases. As I mentioned earlier, 20% of our portfolio is linked to CPI rent reviews.

What’s also going to happen in the short-term as inflation rises, is that it creates an environment where rents are also rising, at varying levels, across different markets. That provides really strong fundamentals for our re-leasing spreads as well.

We’ve been able to achieve 11% re-leasing spreads. What I mean by that is the difference between what the tenant was paying before their lease expired and what they’re now paying on a new lease. As a result of that, we’re seeing really strong rental growth in the market, and this is flowing through to the CIP portfolio.

MF: And have fast-rising inflation and interest rates changed your long-term outlook for industrial and logistics markets?

JC: In the longer term, the view on industrial and logistics markets is strong. Long-standing tailwinds such as the growth of e-commerce and occupiers increasing their inventory levels for supply chain resilience are providing a resilient stream of tenant demand. Couple this with limited land supply and near-zero vacancy in national industrial markets, and the outlook remains strong.

We take a very long-term view when we’re buying industrial real estate and have focused on infill markets which are set to perform the strongest from these trends. As such we’ve built a great portfolio that we believe will continue to drive very good value for our investors.

What’s also worth noting is that in a higher inflationary and interest rate environment, economic rents to build new industrial space become higher. And with the amount of demand we’re seeing coming into the logistics market, that provides further upward pressure on rents.

As an existing asset owner, CIP has a portfolio of assets valued at over $4 billion. For existing asset owners, like CIP, we’ll see the benefit of those rising rents because people are developing less space and when they do develop it is more expensive.

***

Tune in tomorrow for part two of our interview, where Centuria’s Jesse Curtis looks at the threats and opportunities for investors in listed industrial and logistics space in the year ahead.

(You can find out more about the Centuria Industrial REIT here.)

The post How this ASX 200 REIT is delivering 5% plus dividend yields: fund manager appeared first on The Motley Fool Australia.

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More reading

• Experts name 2 ASX dividend shares for your retirement portfolio
• Why the Telstra share price could actually be a growth opportunity: fundie
• Why this top broker is tipping 17% upside for the Telstra share price
• Experts name 2 excellent ASX dividend shares to buy next week
• Telstra share price is caught in no man’s land as Optus feud continues

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Corporation 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.

What happened

Shares of Tesla, Inc. (NASDAQ: TSLA) jumped as much as 2.1% Monday after some news out of Germany this weekend. The stock gave up some of that gain, but remained up by 1.2% as of 12:50 p.m. ET today.

So what

A report from German automotive news outlet Automobilwoche this weekend said Tesla is focused on doubling its sales in Germany this year compared to 2021. If the electric-vehicle (EV) leader achieves that goal, it would surpass Toyota for market share in Europe’s largest economy.

Now what

Plans to grow sales in Germany don’t come as a surprise since Tesla continues to ramp up production at its new Gigafactory near Berlin. But the goal to double sales this year, moving it ahead of Toyota in overall German car sales, is aggressive. Through August, Tesla held an overall market share of only 1.5% in Germany. 

That compares to an approximate market share of 6% for overall passenger vehicles in the U.S. this year. In its home market, Tesla sells about two-thirds of all battery EVs, according to Barron’s. 

Tesla had been supplying German customers from its Shanghai factory prior to the opening of the German plant earlier this year. The company sold approximately 40,000 EVs in Germany last year. To hit 80,000 this year, Tesla would need to sell another 55,000 over the final four months of 2022. That volume would edge out Toyota’s estimated 75,000 vehicle sales in Germany this year. 

Investors are pushing the stock higher today partly because that achievement would be great news for the progress in ramping up the German Gigafactory. Earlier this year, CEO Elon Musk said that factory, along with its new Texas plant, were burning cash and having to throttle back production due to supply chain constraints. Tesla investors would like nothing more than to find out the two new facilities are cranking out vehicles and contributing to higher profitability. 

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

The post Why Tesla shares moved higher Monday appeared first on The Motley Fool Australia.

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More reading

• Should you invest in Tesla shares right now?
• Tesla is exploring building a lithium refining plant in Texas
• Why Tesla thumped the market today
• Why Tesla shares popped today
• Why Tesla stock dropped today

Howard Smith 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 Tesla. 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.

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

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The A2 Milk Company Ltd (ASX: A2M) share price is having a good month, gaining 13.5% over the past 30 days. But looking further back, the company has had a shocking few years.

A2 Milk shares have fallen 1% over five years despite hitting a record high of $20.05 in 2020. That’s compared to an 18% gain posted by the S&P/ASX 200 Index (ASX: XJO) over the last half-decade.

The A2 Milk share price last traded at $5.46.

But one top broker has tipped it to lift to as high as $6.60 – representing a potential 21% upside.

So, what’s got some experts bullish, and others not so much, about the milk and baby formula favourite? Keep reading to find out.

Is now the time to snap up A2 Milk shares?

Experts’ opinions are mixed regarding the future of the A2 Milk share price.

Some, like Goldman Sachs, are bearish. The broker has slapped the stock with a sell rating. Though, its $5.65 price target alludes to a potential 3.5% upside.

Others, including Wilsons investment advisor Peter Moran, aren’t so sceptical, tipping the company as a hold.

Moran labelled the company’s latest earnings “strong” but warned of “challenging” market conditions brought about by rising competition and China’s falling birth rate, The Bull reports.

A2 Milk’s revenue lifted close to 20% year-over-year in financial year 2022, reaching NZ$1.4 billion. Its after-tax profits also rose 42% to around NZ$115 million. The company also announced a NZ$150 million on-market share buyback.

Capital Wealth portfolio manager Tim Haselum has also branded A2 Milk a hold, according to the publication. He says the company’s share price already has notable upside factored in.

However, plenty of experts are bullish on the A2 Milk share price.

Perpetual Equity Investment Company believes A2 Milk has a strong brand and likes its balance sheet, which comprises more than NZ$800 million in cash and no debt, as The Motley Fool Australia’s Bruce Jackson reports.

And finally, top broker Bell Potter has slapped A2 Milk shares with a buy rating and a $6.60 price target, representing a potential 21% upside, as my Fool colleague James reports.

The company’s growing exports to China were behind much of the broker’s positive outlook.

The post A2 Milk shares: Buy, hold, or fold? appeared first on The Motley Fool Australia.

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• Could the A2 Milk share price be ready to leave the ‘doghouse’?
• Leading fund manager sees “material upside” to the a2 Milk share price
• Broker says the A2 Milk share price can charge even higher
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• Why is the A2 Milk share price storming 6% higher on Monday?

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 Goldman Sachs. The Motley Fool Australia has recommended A2 Milk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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ASX tech shares have been on a rollercoaster in 2022. Volatility has picked up this year as inflation increases and interest rates rise to try to calm down economic demand. But, with the share prices falling, it’s having an interesting effect on dividend yields.

Not only does a lower share price mean that the investment is cheaper, it also boosts the potential dividend yield for investors.

REA Group is invested in a number of local and international property sites. In Australia, it operates portals like realestate.com.au and realcommercial.com.au.

For example, if a business with a 4% dividend yield sees a 10% drop in the share price, then the dividend yield would become 4.4%.

So, with that in mind, let’s look at some of the ASX tech shares that do pay dividends but have seen a sell-off.

REA Group Limited (ASX: REA)

With both economic volatility and increased uncertainty about the property market, the REA Group share price has dropped almost 30% this year.

In FY22, the full-year dividend increased by 25% to $1.64 per share. At the current REA Group share price, it offers a trailing grossed-up dividend yield of 1.9%.

By FY24, the business could be paying a full-year dividend of 208.8 cents per share, according to CMC Markets. That would translate into a grossed-up dividend yield of 2.4%.

TechnologyOne Ltd (ASX: TNE)

TechnologyOne is a large ASX tech company that develops and provides a global enterprise resource planning (ERP) solution. It’s working hard on changing clients onto software-as-a-service (SaaS) contracts and services.

Since the beginning of 2022, the TechnologyOne share price has dropped by more than 12%.

In the FY22 half-year result, the business decided to grow its interim dividend by 10% to 4.2 cents per share. The trailing 12 months of dividends come to a grossed-up dividend yield of 1.6%.

By FY24, TechnologyOne could pay an annual dividend per share of 22 cents per share. That could equate to a grossed-up dividend yield of 2.5%.

Carsales.Com Ltd (ASX: CAR)

Carsales claims to be the largest online automotive, motorcycle, and marine classifieds business in Australia. It has operations across the Asia Pacific region and interests in leading online automotive classifieds businesses in Brazil, South Korea, Malaysia, Indonesia, Thailand, and Mexico.

Since the start of 2022, the Carsales share price has dropped by more than 17%. That’s despite the ASX tech company seeing a lot of purchasing demand for vehicles.

In the FY22 result, Carsales announced that its final dividend per share would increase by 9% to 24.5 cents. That brought the full-year dividend to 50 cents per share, which was a rise of 5.25%.

By FY24, the business could be paying an annual dividend of 67.3 cents per share. This could translate into a grossed-up dividend yield of 4.7%.

The post 3 beaten-up ASX tech shares that pay dividends appeared first on The Motley Fool Australia.

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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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended REA Group Limited, TechnologyOne Limited, and carsales.com 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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It’s 3.45am on Tuesday morning.

And, because I’m awake, I thought I’d do some writing.

As I contemplated what I’d write about, I wondered what many people may assume about me being up at this time.

Maybe that I couldn’t sleep, for worrying about recent stock market volatility.

Maybe that I was up watching US markets during their daytime.

It’s nothing quite so… exciting.

I’m awake early because my young bloke has been crook for the past few days, and he slept in our bed last night. The phrase ‘human windmill’ comes to mind and, well, it can be hard to sleep when there’s so much tossing and turning!

Plus, he’s also going to be off school again today, so I might as well get some work done while I can…

But it was those thoughts – that I might have markets on my mind – that prompted this piece.

See, neither of those things – worrying about volatility or ‘watching’ the markets – is something I do.

Surprised?

If you’re a regular reader, I hope not. If you’re newer here, you might wonder.

Aren’t investors supposed to have three or four computer screens on their trading terminals?

And ‘money never sleeps’, right?

Now, you’re smart people.

You know that by asking those rhetorical questions, the answer is clearly ‘no’.

But I want to explain why.

The truth is that I can’t remember ever being kept awake by the stock market.

And I invested during the dot.com boom and bust.

I invested during the GFC

And I invested during the COVID crash.

Don’t get me wrong, these were very unpleasant periods, where portfolios were often deeply in the red.

They were painful, ugly times.

But I didn’t lose any sleep.

No, I’m not boasting.

Nor am I super-human (or super-Vulcan, for the Star Trek fans).

I was just lucky enough to have learned, early, about the historical truth of investing.

More importantly, I was lucky enough that I was able to internalise that truth, and make it the centre of gravity for my investing.

And I can’t overstate how important that has been for me – or how important it could be for you.

See, the saying ‘those who fail to learn from history are doomed to repeat it’ might be true in many aspects of life.

But I think it’s the opposite for investors.

The lesson of history on the stock market is that compound gains of around 9% per annum have been the norm.

And that patiently investing – saving, adding, and waiting – has been an extraordinary way to build seriously impressive long-term wealth.

9%, compounded over the 30 years to June 30, 2022, would have turned a hypothetical $10,000 investment in the ASX into $130,000.

(And, happily for my narrative, that includes all three crashes – dot.com, GFC and COVID – that I mentioned earlier.)

If we’re ‘doomed’ to repeat those gains, bring it on!

Oh, in case you’re tempted to think ‘ah, but the dot.com crash was worse in the US’, you’re right. But $10,000 invested in US shares actually compounded at a faster rate than on the ASX over the past three decades, despite that!

But back to me.

When I started investing, I was able to learn and internalise that long-term history.

And to come to a place where I believe, as Mark Twain is quoted to have said, ‘history may not repeat, but it does rhyme’.

Now, for those who are wringing their hands about what we’re facing, economically, let me be clear: no, I don’t think it’s different this time.

I mean, we face different challenges, for sure.

Kinda.

This episode of high inflation might be new if you’re young, or haven’t studied history.

But it’s a pretty good echo of the early 1980s.

This global instability?

We’ve had more episodes of it than you could count on two hands, over the past century, and yet the ASX has gained around 9% per annum over that time.

(Remember: two world wars, numerous regional wars and conflicts, a cold war, high oil prices, high inflation, terrorism and much more.)

Now, I’m NOT saying we won’t have market volatility.

I’m saying precisely the opposite.

We’ll have volatility – just as we’ve had in the past.

But I’m saying I think the world’s stock markets will continue to deliver strong, long-term compound gains, despite that.

Why?

Because I don’t think humanity has peaked.

I don’t think we’ll look back and say “Yeah, 2021 was the best that democratic capitalism ever got… It was all downhill from there.”

I think our best days are ahead of us.

And I think that means history is likely to repeat… or at least rhyme.

And it’s why I don’t get stressed – or lose sleep – about market volatility (or, less euphemistically, share price falls).

Because I have been taught to – and I’ve internalised the process of – zooming out.

In 1992 – the start year for the 30-year numbers I mentioned earlier – we’d just got out of recession.

Though we didn’t know it at the time, five years later, we’d have the Asian Financial Crisis. Then three years after that, the dot.com crash, where the NASDAQ would lose some 85-odd percent of its value.

Who in their right mind would have invested in 1992?

Especially when you layer in a future that included terrorist attacks, wars in the Middle East and Afghanistan, a US housing collapse, the freezing of global credit markets and the worst pandemic in a century.

And they’re just the big ones. Every week, someone was telling you what was about to go wrong. ‘It’s the big one’, they’d say.

Sounds like a recipe for terrible returns.

And here’s the thing.

Even if those doom-and-gloomers had been able to accurately predict every single one of those terrible social and economic issues…

… you still could have turned $10,000 into $130,000!

And that is the lesson I’ve internalised.

(By the way, I’m not cherry-picking data – that average return holds pretty true over more than a century, with even more economic, social and geopolitical ructions during that time!)

The beauty of internalising that lesson?

Being able to zoom out means you don’t sweat the small movements.

Or even the big ones.

The ASX lost 38% in a touch over a month in early 2020.

Thirty. Eight. Per. Cent.

It sucked.

But I didn’t lose any sleep.

Why?

Because of the lessons of history, and my confidence in the long-term value creation of democratic capitalism.

In a world where people want to tell you, at every turn, how complex and difficult investing can be, I humbly disagree.

It is that simple.

I think the future is bright, not because there are no obstacles for us to climb, but despite the fact there are obstacles to climb.

It has always been thus.

And that’s the lesson of economic and stock market history.

And that’s why I don’t lose any sleep.

It’s also why I don’t have four monitors with squiggly lines on them: because I’m playing a different game.

Embracing the power of democratic capitalism means taking a big-picture view, not a minute-by-minute, heart-attack-inducing roller coaster ride of trying to guess short-term share price movements.

One last (related) thing: the shorter your chosen time horizon, the more stressful investing can be. But also, the less likely it is that those long-term forces will play out.

If you’re hoping for gains in a day, a week, a month or even a year, you’re taking a punt.

But also, I think you’re lowering your odds, perhaps meaningfully.

Because history also tells us that the longer your timeframe, the more likely you are to achieve results closer to that long-term average.

And don’t forget: with lifespans continuing to lengthen, even a retiree has likely got decades of investing potential left, let alone someone in their 30s, 40s or 50s.

(If you’re 50, you’ve been an adult for 32 years. And you’ll probably live, on average, another 35 or 40 years. You have more investing time ahead of you than behind you!)

Me?

I’m continuing to add money to my portfolio every month.

And I’m investing that money with a multi-decade time horizon.

Which means that whatever happens today, tomorrow, this year or next year is all but irrelevant.

But which also means I expect that in 2052, we’ll look back at 2022 and wish we’d all invested more money, today.

And that perspective is why I don’t lose sleep thinking about my portfolio.

Now, if only I could find a way to stop a 9yo tossing and turning, I could go back to bed…

(By the way, if you haven’t seen it, I recorded this video last week, when the US market fell. Different circumstances, but same theme. Have a look, if you haven’t already.)

[youtube https://www.youtube.com/watch?v=cfoGmKu8Qq8?feature=oembed&w=500&h=281]

Fool on!

The post Why I was awake at 3.45am this morning… appeared first on The Motley Fool Australia.

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More reading

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Motley Fool contributor Scott Phillips 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 Woodside Energy Group Ltd (ASX: WDS) shares an opportunity or have they run too far for S&P/ASX 200 Index (ASX: XJO) energy share investors to buy?

Since the beginning of 2022, Woodside shares have risen by more than 40%. But, since 26 August 2022, they have fallen by around 10%.

It’s a bit of a mixed bag in terms of the share price, but it’s pretty clear that the company is firing on all cylinders in terms of its profitability.

Result recap

For investors that didn’t see it, the company recently reported its 2022 half-year result. It showed that operating revenue increased by 132% to $5.8 billion.

Earnings before interest and tax (EBIT) increased 380% to $2.98 billion, underlying net profit after tax (NPAT) went up 414% to $1.82 billion and NPAT increased 417% to $1.64 billion. Free cash flow surged 688% to $2.57 billion.

The interim dividend per share was increased by 263% to US$1.09 per share.

Woodside benefited from a doubling of the price of oil to $96.4 per barrel of oil equivalent. It chose a fortunate time to merge with the oil and gas division of BHP Group Ltd (ASX: BHP), allowing it to substantially increase in size, adding to scale benefits, diversification and improving its financial stability.

What’s going on with energy prices?

Discussing the impact on energy markets around the world, such as the Russian invasion on Ukraine, Woodside CEO Meg O’Neill said:

The upheavals in global and Australian energy markets witnessed over the course of the past six months have shone a spotlight on the importance of gas in the world’s energy mix and underscores our confidence in the longer-term demand outlook for gas, which makes up 70% of Woodside’s portfolio.

Safe and reliable supplies of gas are not only critical to global energy security but will play a key role as our customers seek to decarbonise, alongside new energy sources such as hydrogen and ammonia that Woodside is investing in.

Is the Woodside share price an opportunity?

Despite the strong performance of energy prices this year, Plato Investment Management’s Dr Don Hamson picked the ASX 200 energy share as an opportunity and that it could pay attractive dividends in the coming years. Speaking to Livewire’s Ally Selby, he said:

I know it’s a bad thing, but it’s benefiting from the war in Ukraine because there’s a gas shortage and that’s going to continue. But even if you look out through those dynamics, we do think decarbonisation is going to be a big thing for the next 30 years, and gas is the interim step. And they’re very well placed with that.

I think after they pay their dividend, it’s going to be 13% geared. So, it’s actually very, very low. And it has a great yield – it’s on a yield of 9% gross dividends. So that’s one of our favourites.

Woodside has said that its strategy is to be a low-cost, lower-carbon energy provider. It is working on a number of initiatives including “hydrogen refuelling, carbon capture and storage and carbon to products technologies.”

The post Have ASX 200 energy buyers missed the boat on Woodside shares? appeared first on The Motley Fool Australia.

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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 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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Rising interest rates mean an uncertain time for ASX finance shares.

Yes, for many banks it’s an opportunity to increase their net interest margin. But it can also mean higher delinquencies as customers find it more difficult to make their repayments.

The big four banks are always popular but have limited growth opportunities, which is why many professionals stay away from them.

Instead, here’s a pair of finance stocks that experts are recommending as buy right now:

‘Undemanding’ PE ratio equals buying opportunity

Catapult Wealth portfolio manager Tim Haselum told The Bull that he likes the look of Bank of Queensland Limited (ASX: BOQ), despite some headwinds.

“We believe the banks are facing reducing loan volumes, but we aren’t concerned about impairments, as households appear to be in sound financial shape.”

Last year, the Bank of Queensland fully acquired ME Bank, which Haselum feels is a positive move.

“We like the ME Bank recovery story and see further synergies ahead,” he said.

“Potential net interest margin improvements amid the company’s undemanding price/earnings multiple presents a buying opportunity.”

BoQ shares have risen 6% since its 20 June trough. The stock is paying out a juicy 6.4% dividend yield.

The Motley Fool reported last week that the team at Citi also recommended BoQ shares as a buy, for much the same reasons as Haselum.

“Although its analysts suspect that the bank’s revenue growth could slow if rising rates impact lending volumes, it expects cost synergies from the ME Bank acquisition to support earnings and dividend growth.”

This ASX share has been oversold for its risks

Pepper Money Ltd (ASX: PPM) specialises in lending to consumers with non-standard credit history.

With an economic downturn looming, perhaps this has scared off investors. The share price is down more than 28% for the year so far, while paying a 6.45% dividend yield.

Wilsons investment advisor Peter Moran reckons the risk has been overstated.

“While a general slowdown in the economy is a potential risk for lenders, we see this as being excessively priced in with the shares recently trading on 4.5 times earnings,” he said.

“We retain an overweight rating.”

Reporting season impressed Moran, despite the headwinds buffeting Pepper Money.

“This non-bank lender reported a pro-forma net profit after tax of $73.1 million in the 2022 first half, an 11% increase on the prior corresponding period,” he said.

“This was despite a 30 basis points fall in the net interest margin.”

The situation is expected to improve for the current period.

“We expect increasing interest rates should contribute to a partial recovery in margins during the second half.”

The post 2 bargain finance ASX shares to buy (not big banks): experts appeared first on The Motley Fool Australia.

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More reading

• Down 7% in a month, are Bank of Queensland shares a bargain buy?
• Do Bank of Queensland shares pay better dividends than the ASX 200 big four?
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• 5 ASX All Ords shares going ex-dividend on Wednesday
• Here’s what a top broker is saying about the Bank of Queensland share price

Motley Fool contributor Tony Yoo 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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