Tag: Motley Fool

At face value, the Flight Centre Travel Group Ltd (ASX: FLT) share price is languishing well below its pre-COVID levels.

Right before the S&P/ASX 200 Index (ASX: XJO) descended into the COVID crash of 2020, Flight Centre shares were trading at around $35 each.

Fast forward to today and the Flight Centre share price is currently sitting at $16.36.

So, you can pick up Flight Centre shares at a 50% discount compared to pre-COVID levels, right?

Well, not so fast.

While the Flight Centre share price is certainly down more than 50%, the overall market value of the company isn’t.

This is because Flight Centre tipped its hat to investors during the pandemic, raising capital to keep the company afloat.

So, when it comes to ASX travel shares such as Flight Centre, Webjet Limited (ASX: WEB), and Qantas Airways Limited (ASX: QAN), it’s important to dig a little deeper.

Share price charts fail to account for the dilution that happens when a company issues new shares.

As a shareholder, you’re a part owner of a company. But as more shares are issued, your ownership stake diminishes.

To use a food analogy, the pizza (i.e. company) has been cut up into more slices (shares). So each individual slice is smaller.

The impact of this is best reflected when calculating per-share metrics, such as earnings per share (EPS). As more shares are issued, a company’s profits are spread more thinly across its shareholder base.

So while the Flight Centre share price may historically look very cheap, you’re getting a lot less bang for your buck. Let’s take a closer look.

Flying under the radar

The overall size of a company is measured by its market capitalisation. 

To calculate a company’s market cap, you simply multiply its share price by the number of shares it has on issue.

In Flight Centre’s case, it has a much larger share count than it did before COVID. This is because it issued new shares to investors in return for cold hard cash.

In April 2020, the company launched a $700 million capital raising, issuing roughly 97 million new Flight Centre shares (at a steeply discounted price compared to their former glory, I should add).

But before this, the company had approximately 100 million shares on issue.

Multiplying this with Flight Centre’s pre-pandemic share price in February 2020 gives us a market cap of around $3.6 billion.

Fast forward to today and the company’s most recent ASX notice details roughly 200 million ordinary Flight Centre shares on issue.

So, the company currently commands a market cap of around $3.3 billion.

This means that in actual fact, Flight Centre is down just 9% from its pre-pandemic valuation.

Plus, it has up to 45 million new shares waiting in the wings in the form of convertible notes to further dilute shareholders. This isn’t reflected in the market cap.

While Flight Centre’s market valuation has nearly recovered, its financials certainly haven’t. 

The company recently handed in its FY22 results, revealing a 154% surge in revenue to $1 billion while delivering a net loss of $287 million.

In contrast, Flight Centre booked a $264 million profit in FY19 from revenue of $3 billion.

Can the Flight Centre share price gain altitude?

Looking at the lay of the land, it seems brokers are neither bullish nor bearish on the Flight Centre share price.

Analysts at Citi recently upgraded their rating on Flight Centre shares from sell to neutral. The broker has a 12-month price target of $16.60.

Meanwhile, analysts at Goldman Sachs have maintained a neutral rating on Flight Centre shares. On the back of the recent results, Goldman trimmed its price target to $19.60.

Analysts at Macquarie have also retained their neutral rating, with a 12-month price target of $18.20.

The post Here’s why the Flight Centre share price isn’t all that it seems appeared first on The Motley Fool Australia.

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More reading

• Why have Flight Centre shares been the most shorted on the ASX every week so far in 2022?
• Here are the 10 most shorted ASX shares
• Is now a good time to buy Flight Centre shares?
• Broker gives its verdict on the Flight Centre share price
• These are the 10 most shorted ASX shares

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 Flight Centre Travel Group Limited and Webjet 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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When a baby enters the picture, it can be an event that changes a family’s thoughts about its financial situation. Sometimes parents may want to invest in ASX shares on behalf of their baby for the long term – or, perhaps, some family members may have even given them some money.

People invest with all sorts of different timelines in mind. But, if a family invests for the baby’s benefit then it could be done with an investment horizon of 18 or 20 years, or even longer,  in mind.

Certainly, it could be a very different world in two decades. Think how much has changed over the past 20 years! However, it gives us plenty of time to invest and benefit from compounding.

I have a few ideas that could be good long-term investments.

Australian Ethical Investment Ltd (ASX: AEF)

Australian Ethical is a business that families can be proud to own for the long term. It’s a fund manager that prides itself on the fact that its entire range of funds is “rigorously screened in ethical and investment merits. Going beyond environmental, social and governance criteria (ESG), the team proactively seeks out companies that “do good”.

This ASX share is growing its number of customers and funds under management (FUM). In FY22, the number of funded customers increased by 17%. Despite the volatility at the end of FY22, FUM rose by 2% over the year to $6.2 billion at 30 June 2022. FUM was $6.45 billion at 31 July 2022.

It’s benefiting from ongoing mandatory superannuation contributions. FY22 super net flows rose 22% to $0.8 billion. Growth of net flows is also expected in FY23.

BetaShares Global Sustainability Leaders ETF (ASX: ETHI)

This is an exchange-traded fund (ETF) based on getting exposure to a portfolio of large global companies that meet strict sustainability and ethical standards.

The ASX share starts with a selection of companies from global developed markets, and they must be of a certain size.

As well, companies must be in the top one-third of performers in terms of carbon efficiency for their industries or be engaged in activities that can help reduce carbon use by other industries.

A number of screens are then applied to exclude fossil fuel producers. There are also no companies significantly engaged in armaments, gambling, alcohol, or junk food. Companies with human rights or supply chain issues are excluded as well as companies that lack gender diversity on their boards, and so on.

Some of the 200 names in the current portfolio include Apple, Visa, Home Depot, Mastercard, Nvidia, Adobe, ASML, and PayPal. Its holdings can come from across the world.

Coincidentally, or perhaps not, the BetaShares Global Sustainability Leaders ETF has performed well. Since it started in January 2017, the ETF has returned an average of 16% per annum. But past performance is not a reliable indicator of future results.

I like that this investment provides diversification, it has compelling holdings, and it seems capable of producing good returns over time.

REA Group Limited (ASX: REA)

REA Group is the owner of Australia’s largest property portal – realestate.com.au. It takes a small ‘toll’ on almost every residential property that is sold in Australia. It has a strong market position, which allows it to regularly raise prices.

I think the 28% fall of the REA Group share price makes the ASX share a more attractive opportunity for the long term at the current level.

What would make this business an attractive option for the long term? It has investments in property sites in the US, India, and Southeast Asia. While each of these regions may not generate as much revenue per property as in Australia, the huge populations of these regions compared to Australia are certainly compelling. Each region could turn into a profit centre for REA Group.

The post How I’d invest $10,000 in ASX shares when starting a family appeared first on The Motley Fool Australia.

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More reading

• One very famous and one very obscure ASX share to buy: fund manager
• Why making your first purchase of ASX shares can be scary
• 2 under-appreciated ASX shares that Goldman Sachs rates as buys
• How I’d invest my very first $1,000 in ASX shares right now
• 2 popular ETFs that could be buys for ASX investors

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 ASML Holding, Adobe Inc., Apple, Australian Ethical Investment Ltd., Mastercard, Nvidia, PayPal Holdings, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2024 $420 calls on Adobe Inc., long March 2023 $120 calls on Apple, short January 2024 $430 calls on Adobe Inc., and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended ASML Holding, Adobe Inc., Apple, Australian Ethical Investment Ltd., Mastercard, Nvidia, PayPal Holdings, and REA 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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Fortescue Metals Group Limited (ASX: FMG) shares are an important part of my portfolio. I have previously outlined why I decided to buy the company’s shares and how long I plan to hold them.

Currently, I’m receiving a large dividend from the S&P/ASX 200 Index (ASX: XJO) mining share. This is because Fortescue is generating significant net profit after tax (NPAT) and cash flow, enabling it to pay a juicy dividend to shareholders and continue to invest in its green division, Fortescue Future Industries (FFI).

Over the long term, I’m hoping that Fortescue can generate sizeable profits from the production and sale of products such as green hydrogen, green ammonia, green iron, and advanced batteries.

However, there are a few situations where I could see myself selling my Fortescue shares — or at least thinking about it.

Demerger

It was recently in the news that Fortescue chair Andrew Forrest revealed that Fortescue Future Industries may already be worth US$20 billion. This is “if solicitations from investment banks for an initial public offering (IPO) of the division were any guide to its valuation”, as reported by the Australian Financial Review.

Shareholders would probably realise significant value from a Fortescue demerger because it would mean that investors could properly value FFI and the company’s mining segments separately. It wouldn’t surprise me if some investors who just wanted the mining segment were unenthusiastic about getting FFI as part of the deal, so the combined value of the two businesses could rise on a demerger.

However, if I were left with Fortescue shares and FFI shares, I would very likely sell shares of the mining business.

There would also be a major question of how Fortescue Future Industries would fund its green endeavours. At the moment it gets 10% of Fortescue’s NPAT each year, plus access to the sizeable balance sheet.

I think Fortescue is better off staying a combined business for the long term.

Stopped paying dividends

Dividends aren’t everything with investing, but I like the investment income because of the additional cash flow it provides into my bank account for whatever purpose I decide, including re-investment into other opportunities.

Every single one of my holdings pays dividends, though I’m searching for total returns from my portfolio, not just dividends.

If Fortescue did stop paying dividends then I would need to evaluate how long the dividends were going to be halted and why. Would it have stopped because its financial position is in danger and it’s overloaded with debt? Or is it investing all available dollars into the green FFI opportunity, which could pay off in the long run?

It wouldn’t be a definite thing I’d sell in this situation, but I’d certainly think about it.

China stops buying Australian iron ore

For me, this is the biggest risk facing Aussie miners. If China stopped buying Australian iron ore, it would make me evaluate my holding of Fortescue shares.

China reportedly buys a sizeable majority of the global iron ore production each year. What would happen if China stopped buying Aussie iron? We have seen how it was willing to put tariffs on a number of other Australian exports, such as wine.

China has continued to buy Australian iron ore. It has been dependable during the COVID-19 pandemic, it’s geographically closer to China than Brazil is, and there isn’t really a replacement option (at this stage).

However, China is reportedly working on a plan to reduce its dependency on iron ore, according to reporting by the Australian Financial Review. African iron ore could become a competing force as well. Fortescue itself is looking to start an African iron ore project which could mitigate some future issues for Fortescue.

Finally, what would happen if China decided to invade Taiwan? That is definitely not a certain event — and I hope it never happens — but it has crossed my mind what the geopolitical and economic consequences of that could mean for Fortescue’s biggest customer.

Foolish takeaway

I’m planning to hold my Fortescue shares for years, perhaps decades, but I think it’s a good idea to assess some situations before they happen, where it’s possible I may want to sell.

The post I would only sell my Fortescue shares if this happened appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Monday
• Could the latest news out of China bode well for ASX 200 iron ore shares?
• How big will the Fortescue dividend be in 2023?
• Reinvesting your Fortescue dividends? Here’s what you need to know
• ASX 200 mining shares stage significant rebound in afternoon trading

Motley Fool contributor Tristan Harrison has positions in Fortescue Metals Group 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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ASX tech shares look like a good sector to be focused on, in my opinion.

Sometimes the sector that has been hurt the most could be the place to go hunting because sentiment is so low.

While not every tech business is guaranteed to be a good choice, I think there are a number of interesting choices worth considering due to their growth potential and impressive margins.

Betashares Nasdaq 100 ETF (ASX: NDQ)

This isn’t a single business. It’s an exchange-traded fund (ETF) that is invested in a range of different tech stocks.

Many of the largest holdings will probably be familiar to readers. We’re talking about names like Apple, Microsoft, Amazon.com, Tesla, Alphabet, Meta Platforms, and Nvidia.

There are plenty of others in the portfolio such as Broadcom, Cisco Systems, Texas Instruments, Adobe, Qualcomm, Advanced Micro Devices, and Intel.

It has been a solid performer in the last few years, despite the plunge seen this year. At 31 August 2022, the Betashares Nasdaq 100 ETF had returned an average of 16.4% per annum over the prior three years. But, that doesn’t mean that the next three years will be as strong.

Since the start of 2022, the ASX tech share has dropped by 25%. I like the diversification and tech exposure offered by this investment option.

Pushpay Holdings Ltd (ASX: PPH)

The Pushpay share price recently suffered a 10% plunge on news that a takeover was no longer likely to go ahead for the donation and church management software company.

However, I think this now represents a compelling opportunity for investors to look at the business.

This is despite investor worries that the normalisation of COVID-19 conditions would lead to the business suffering.

Revenue rose 13% in FY22 and it’s expecting between 10% to 15% revenue growth in FY23. Operating profit may be a bit lower in FY23 as the business invests for future growth.

It’s expecting “strong growth” in FY24 onwards with “significant revenue growth and increasing profitability”.

In FY22, total processing volume increased by 10% to US$7.6 billion. By FY25, it’s expecting its total processing volume to grow to more than US$10 billion, which suggests a rise of more than 30% between now and then.

I think the entry into the Catholic segment is a smart move by the ASX tech share because it diversifies and expands the potential Pushpay customer base.

If it can keep growing revenue in the coming years, while growing profit faster than revenue, I believe that the Pushpay share price represents compelling value at this lower level.

The post Here’s why I think these ASX tech shares are buys in September appeared first on The Motley Fool Australia.

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More reading

• 2 outstanding ETFs for ASX investors to buy next week
• Pushpay share price dives 10% as takeover validity questioned
• Why Lake, Pushpay, South32, and Tyro shares are dropping
• Here’s why the BetaShares NASDAQ 100 ETF has tanked 4% today
• 3 excellent ETFs for beginner investors to buy

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, 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. 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 Alphabet (A shares), Alphabet (C shares), Amazon, Apple, BETANASDAQ ETF UNITS, Meta Platforms, Inc., Microsoft, Nvidia, PUSHPAY FPO NZX, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has positions in and has recommended BETANASDAQ ETF UNITS and PUSHPAY FPO NZX. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Meta Platforms, Inc., and Nvidia. 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 the best in the industry so that you can get an insight into how the professionals think. In this edition, Elvest Co portfolio manager Adrian Ezquerro nominates two ASX shares that he’d be happy to hold for years to come.

The ASX share for a comfortable night’s sleep

The Motley Fool: If the market closed tomorrow for four years, which stock would you want to hold?

Adrian Ezquerro: This is a really good question. I must admit it’s something I’ve thought about. Being an analyst, you think about these sorts of things and having been well read in Warren Buffett, it’s something I’ve considered for a long period of time. 

I actually tend to think about this in two different ways and maybe that might be a bit strange. But anyway, without being too crass, firstly I think about a scenario where I’m asked about what would happen if, say, I was hit by a bus and I had to nominate one stock to leave to my wife and kids. This is the first way that I would frame it.

With that in mind, this would obviously need to be a stock that’s got a great long-term track record. It’s a strong, well-diversified business, it still has some long term growth potential, but has significant downside protection and preferably pays a regular dividend income. 

It’s in this context I’ll nominate Brickworks Limited (ASX: BKW). Brickworks has three core divisions. That’s investments, industrial property and building materials, as the name suggests. 

The investment division is basically a 26% shareholding in Washington H Soul Pattinson and Co Ltd (ASX: SOL), and that’s got a market cap in excess of $9 billion. And that provides exposure to high-quality assets across telco, energy, financial services and basically the industrial sector of the Australian economy. That’s the investment division. 

The industrial property division largely sits within a 50-50 joint venture Goodman Group (ASX: GMG). Brickworks is a massive landholder and over time they vend industrial property into that JV and that then becomes a trust. That’s developed into industrial assets and it’s leased on long-term deals to the likes of Amazon.com Inc (NASDAQ: AMZN), Coles Group Ltd (ASX: COL), Woolworths Group (ASX: WOW), et cetera. That’s highly valuable itself. 

For context, the current market cap of Brickworks is about $3 billion. If you were to have $3 billion and you were to buy the whole company, you would get that shareholding in Soul Patts, and that’s worth about $2.4 billion at current prices. The net assets of the industrial property and Brickworks’ share of that’s about $1.5 billion. Then you’d get the net tangible asset base of Brickworks building materials business, which minus group net debt is worth a few hundred million.

In total, you get asset backing of about $4.2 billion, which is close to $28 a share on a pre-tax basis. The current market price is between $20 and $21, and for that you get exposed to a really high-quality diversified portfolio at what we feel is a substantial discount to fair value. 

And that’s for a business that has consistently grown its ordinary dividend for, I think it’s something like 45, 46 years consecutively. That’s a remarkable achievement. It’s quite rare in the Australian market. 

I’d say, on a relative basis to my second stock that I’ll mention, it’s a lower-risk option and certainly more stable with downside protection.

Now, the second way that I tend to think about this type of question is what’s a stock that’s highly likely to substantially grow its earnings in the coming years? And, of course, the extension of that is, what stock might have multi-bag potential?

In this context I’d probably highlight the stock RPMGlobal Holdings Ltd (ASX: RUL). RPM is a leading provider of mine planning and operations software and that’s mainly to global tier one and tier two miners, many of which you’d know. The likes of BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO), Glencore PLC (LON: GLEN), et cetera. 

Their products basically improve the efficiency of mining operations. In many cases, it replaces more manual legacy processes with more efficient software solutions. 

For context, its market cap is about $350 million. It’s got close to $40 million in cash, so it’s a well-funded business and the CEO has got a pretty good track record. He’s invested quite heavily over the past decade in evolving this business and its software solutions so that it’s now really well positioned as a vendor-of-choice for major mines. 

One of the most significant developments, though, in RPM’s recent history is that it successfully transitioned its revenue model from a perpetual licence model to a subscription revenue model.

This is really powerful and it’s important to understand in the context of its recent results because as you take out the value of the more lumpy perpetual sales, which have a higher one-off dollar value, and you transition that to a subscription revenue model, that has implications for your year-on-year cash flow. What it does [is] it clearly embeds longer-term value in the business. 

They’re now about to see the fruits of all that labour. If you look ahead, its revenue base now from a software division is largely recurring and it’s now pretty well established in the operations of BHP, Rio, Glencore, and many, many others. We actually see scope for substantial further contracts in the next 12 to 24 months. And for the first time in many years, management has actually provided guidance for the year ahead and I think that reflects their confidence in this pivot towards subscription revenue.

They guided to EBITDA of $14.2 million in the coming year, and that’s up from about $4 million achieved in FY22. And we actually think that that might, firstly, prove conservative and we’re also expecting even more growth in FY24 given the timing of new contract awards. 

You’ve got a scenario where you’ve got pretty explosive earnings growth, cash generation we expect to be really strong and… backed by growing recurring revenue profile. That’s pretty exciting. Again, it’s not without risk, but if it’s executed to plan, we expect that the stock may do pretty well over the next four or five years.

MF: The company was founded in 1968, which is quite old for a software company, isn’t it?

AE: Actually it started as an advisory business and RPM itself, the initials of some of the founders, it evolved out of an advisory business and that advisory business still exists today. 

I know I’ve talked about the software division, but that in itself has done pretty well in recent times and they’ve now got an ESG division, which as you can imagine, is seeing a lot of growth in demand. 

MF: That’s great. One safe one and one exciting one to hold onto for the next four years.

The post One ‘safe’ and one ‘exciting’ ASX share to own for years like Warren Buffett: fund manager appeared first on The Motley Fool Australia.

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More reading

• 2 blue chip ASX 200 shares to boost your portfolio: experts
• If I had to own only one ASX 200 share forever, this would be it
• Goodman share price crumbles 5% amid Wall St woes
• Why I’m seriously considering buying these ASX shares following today’s market crash
• Steady compounders: 3 ASX 200 shares that have delivered over a decade

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Tony Yoo has positions in Amazon, RPMGlobal Holdings, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, Brickworks, RPMGlobal Holdings, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks, COLESGROUP DEF SET, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Amazon and RPMGlobal Holdings. 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 looking for dividend shares to buy, then the two listed below could be worth checking out.

Both have been named as buys by analysts recently and tipped to provide very attractive yields. Here’s what you need to know about them:

Accent Group Ltd (ASX: AX1)

The first ASX dividend share that has been tipped as a buy is footwear retailer Accent.

This is due to its attractive valuation and expectations that the company is well-placed to bounce back from a very difficult 12 months.

The team at Morgans recently commented:

AX1’s renewed focus on selling at full price will, in our view, support a recovery in the gross profit margin in FY23 back towards historical averages. We welcome AX1’s moderation of the pace of its store rollout in favour of a more selective expansion strategy focused on return on investment. We see AX1 as undervalued at the current share price.

Morgans is also expecting some attractive dividend yields from the company’s shares. It is forecasting fully franked dividends of 9 cents per share in FY 2023 and 11 cents per share in FY 2024. Based on the current Accent share price of $1.36, this will mean yields of 6.6% and 8.1%, respectively.

The broker also sees plenty of upside for its shares with its add rating with a $2.00 price target.

HomeCo Daily Needs REIT (ASX: HDN)

Another ASX dividend share that has been named as a buy for income investors is HomeCo Daily Needs.

HomeCo Daily Needs is a property investment company with a focus on metro-located, convenience-based assets across neighbourhood retail, large format retail, and health and services.

Goldman Sachs is a big fan of the company and believes its shares are cheap at the current levels. Particularly given its positive outlook due to the shift to omni channel retailing.

The broker commented:

We continue to believe HDN is undervalued at its current valuation given its diversified tenant base, and see it as well positioned to benefit from the shift to omni channel retailing, with additional external growth opportunities to drive earnings growth over the medium-term.

Its analysts also see potential for some big dividend yields in the coming years. The broker is forecasting dividends of 8.3 cents per share in FY 2023 and 8.5 cents per share in FY 2024. Based on the current HomeCo Daily Needs REIT unit price of $1.26, this will mean big yields of 6.6% and 6.75%, respectively.

Goldman currently has a buy rating and $1.63 price target on HomeCo Daily Needs’ shares.

The post Experts say these top ASX dividend shares are buys appeared first on The Motley Fool Australia.

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• 2 ASX dividend shares with yields over 6% right now
• Experts say these high yield ASX dividend shares are buys
• Analysts say these ASX dividend shares are buys
• Analysts are tipping 6%+ yields from these ASX dividend shares
• Boost your income with these ASX dividend shares: analysts

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

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On Friday, the S&P/ASX 200 Index (ASX: XJO) finished a very difficult week with another day in the red. The benchmark index fell 1.5% to 6,739.1 points.

Will the market be able to bounce back from this on Monday? Here are five things to watch:

ASX 200 expected to edge lower

The Australian share market looks set to start the week in a subdued fashion. This follows a poor finish to the week on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 2 points lower this morning. On Wall Street, the Dow Jones was down 0.45%, the S&P 500 dropped 0.7%, and the NASDAQ tumbled 0.9%.

Oil prices rise

Energy producers Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) could have a better start to the week after oil prices pushed higher on Friday. According to Bloomberg, the WTI crude oil price was up slightly to US$85.11 a barrel and the Brent crude oil price rose 0.55% to US$91.35 a barrel. This wasn’t enough to prevent a small weekly decline due to demand concerns.

ASX 200 rebalance

Today is quarterly rebalance day. This means a number of shares such as Life360 Inc (ASX: 360) and Zip Co Ltd (ASX: ZIP) will be kicked out of the ASX 200 index this morning. This could put a bit of pressure on their shares if index funds have not yet sold down their holdings. Lovisa Holdings Ltd (ASX: LOV) is one of the shares replacing them and joining the benchmark index today following the rebalance.

Gold price rises

Gold miners including Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) could have a decent start to the week on Monday after the gold price rose on Friday night. According to CNBC, the spot gold price was up 0.4% to US$1,683.5 an ounce. However, this wasn’t enough to stop the precious metal from recording a sizeable weekly decline amid rate hike concerns.

Iron ore price falls

It could be a tough start to the week for BHP Group Ltd (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG) shares after the iron ore price dropped on Friday night. According to Metal Bulletin, the spot iron ore price has fallen 2.6% to US$98.45 a tonne.

The post 5 things to watch on the ASX 200 on Monday appeared first on The Motley Fool Australia.

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More reading

• Analysts name 2 ASX 200 mining shares to buy
• Could the latest news out of China bode well for ASX 200 iron ore shares?
• Broker names 2 top ASX shares to buy
• Why did ASX 200 gold shares have such a rough day?
• Why Atlas Arteria, Liontown, St Barbara, and Zip shares are dropping today

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If you’re looking for an easy way to invest your hard-earned money, then exchange traded funds (ETFs) could be worth considering.

Rather than deciding on which individual shares you should put your funds into, ETFs allow you to invest in a large group of shares through just a single investment.

With that in mind, here are two ETFs that are highly rated:

BetaShares Global Energy Companies ETF (ASX: FUEL)

The first ETF that investors might want to look at is the BetaShares Global Energy Companies ETF.

As you might have guessed from its name, this ETF provides investors with an easy way to gain exposure to the booming energy sector.

And while oil prices have recently softened, they look unlikely to fall much lower. Particularly given how oil cartel OPEC has threatened to cut production to boost prices.

This would be good news for the companies held by the fund. These include BP, Chevron, ConocoPhillips, ExxonMobil, Halliburton, Kinder Morgan, Phillips 66, Royal Dutch Shell, and Total. BetaShares notes that these companies are larger, more geographically diversified, and more vertically integrated than Australian-listed energy companies.

VanEck Vectors Video Gaming and eSports ETF (ASX: ESPO)

Another ETF for investors to consider is the VanEck Vectors Video Gaming and eSports ETF.

This ETF gives investors access to a portfolio of the largest companies involved in video game development, hardware, and esports. This is an industry benefiting from an estimated 2.7 billion+ gamers globally, which is more than active Apple phones and Netflix subscriptions combined.

According to Statista, revenue in the video games segment is projected to reach US$208.60 billion in 2022 and then grow almost 8% per annum through to US$304.70 billion by 2027.

This bodes well for the companies included in the fund such as graphics processing unit developer Nvidia and gaming giants Electronic Arts, Nintendo, Roblox, Take-Two, and Tencent.

The post 2 high quality ETFs for ASX investors in September appeared first on The Motley Fool Australia.

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More reading

• 2 tech ETFs I think are smart buys in September
• 3 wonderful ETFs for ASX investors to buy today
• Why I’d buy these 2 ASX ETFs right now
• 3 fantastic ETFs for ASX investors to buy today
• 3 quality ETFs for ASX investors in September

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 BetaShares Global Energy Companies ETF – Currency Hedged. The Motley Fool Australia has recommended VanEck Vectors ETF Trust – VanEck Vectors Video Gaming and eSports 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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Investors that are wanting to diversify their portfolio with some mining sector exposure might want to check out the two ASX 200 shares listed below.

Both have been tipped as top options for investors in the sector with meaningful upside potential. Here’s what you need to know about these mining shares:

BHP Group Ltd (ASX: BHP)

The first ASX 200 mining share that has been named as a buy is BHP.

The Big Australian is of course one of the world’s largest miners with a collection of high quality operations across a range of commodities. This includes coal, copper, iron ore, and nickel.

The team at Morgans are bullish on the mining giant. This is thanks to the company’s diverse operations, which they feel make it a lower risk option for investors. The broker commented:

We view BHP as relatively low risk given its superior diversification relative to its major global mining peers. The spread of BHP’s operations also supplies some defence against direct COVID-19 impact on earnings contributors. While there are more leveraged plays sensitive to a global recovery scenario, we see BHP as holding an attractive combination of upside sensitivity, balance sheet strength and resilient dividend profile.

Morgans has a buy rating and $48.00 price target on BHP’s shares.

Iluka Resources Limited (ASX: ILU)

Another ASX 200 mining share for investors to consider is Iluka.

It is a mineral sands and rare earths company that owns a number of quality projects across South Australia and Western Australia. One of these is the exciting Eneabba project, where the company is developing a fully integrated rare earths refinery.

Goldman Sachs is very positive on Iluka. This is due to its strong production growth outlook and exposure to in-demand rare earths. The broker commented:

We are positive on ILU’s project pipeline and forecast >40% production growth in mineral sands volumes, c.18ktpa of Rare Earths (~3.5-4ktpa of high value NdPr). We think ILU’s Eneabba RE refinery is a strategic asset considering it will be only the third western world RE refinery

Goldman Sachs currently has a conviction buy rating and $13.30 price target on Iluka’s shares.

The post Analysts name 2 ASX 200 mining shares to buy appeared first on The Motley Fool Australia.

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More reading

• Could the latest news out of China bode well for ASX 200 iron ore shares?
• BHP shares: Buy, hold, or fold?
• 3 blue-chip ASX 200 shares touting the highest dividend yield in September
• What’s with ASX copper shares on Thursday?
• ASX 200 shares dump $60 billion in horror session. Here’s how Wednesday unfolded

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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People will often refer to ‘recession-proof’ investments. Companies that can weather tough economic environments. Consumer staples, such as your supermarket giants and agricultural commodity providers, are often put into this category.

However, the following ASX All Ords share operates in an industry that is as dependable as it gets.

No matter the state of the economy, people will continue to pass away. It is a sad, but inevitable, fact of life. However, for an investor, a funeral service provider could offer a stable and consistent holding to their portfolio.

Personally, I believe Propel Funeral Partners Ltd (ASX: PFP) has huge growth potential in a timeless industry… and here’s why.

Fragmented market ripe for consolidation

The funeral services industry is probably not discussed much due to the nature of the business. Let’s be honest, it doesn’t exactly make for the most cheerful of topics. Though, I tend to think — because of this — it is often overlooked as a worthwhile investment.

There are quite a few compelling tailwinds for the sector. Most notably, the industry is highly fractured — with the majority of funerals in Australia handled by small family-owned and operated service providers. Propel Funeral Partners estimates that around 71.3% of the market consists of these smaller businesses.

This provides a large opportunity for a fast-growing ASX All Ords share, such as Propel, to consolidate the industry. Its main competition is fellow ASX-listed funeral operator Invocare Limited (ASX: IVC), with a market share of 21.7%.

Given the sizeable domestic market opportunity, I believe Propel could continue to win market share and consolidate the industry. Already, the company has demonstrated a successful acquisition strategy. In six years, Propel has grown its revenue from $22.4 million to $145.2 million.

During FY22, the ASX All Ords constituent tallied up six acquisitions for a total of $21 million. Based on the company’s available funding capacity of $136 million, it appears positioned to continue to grow its market share.

In my eyes, it seems the market is unwilling to expect the same level of growth from Propel as it has demonstrated in the past. I’m of the opinion that the management team will continue to execute its strategy.

How has this ASX All Ords share fared?

Over the last 12 months, this ASX All Ords share has far exceeded the market average return. Propel shares are up an impressive 17.9% during this time. Meanwhile, the S&P/ASX All Ordinaries Index (ASX: XAO) has tumbled 10%.

In my opinion, that’s a pretty good example of how reliable this company can be. After all, it operates in a market where every single person uses its service — even if it’s only once.

The post They say there are only 2 guarantees in life, and this ASX All Ords share is focused on 1 of them appeared first on The Motley Fool Australia.

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More reading

• Propel Funeral Partners share price dips despite ‘another record year’

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Propel Funeral Partners 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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