Following their dominant performance over the past 2 years, the consensus view is that they have become fully valued or overvalued. 

The most extreme example is Commonwealth Bank of Australia (ASX: CBA).

A 21 July Australian Financial Review article revealed that Hedge Fund Sage Capital had recently doubled down on its short position in CBA shares. This comes despite the ASX 200 bank's dramatic surge over the past few months hindering the fund's returns. 

In his latest note to investors, Sage Capital portfolio manager Sean Fenton told investors that he was sticking with his position on CBA, noting that the bank had become the most expensive banking stock in the world. 

While CBA shares have declined around 8% from their June peak of $192, many experts believe they have further to fall. 

Broker Macquarie has a price target of $105 on CBA shares. Its price targets for the other three big 4 banks are also below current share prices. 

So, investors appear to be left with no attractive options in the big 4 banking space.

An alternative: non-bank lenders

Those looking for exposure to the financial services sector may wish to consider non-bank lenders. 

According to a 15 July report, Australian Non-bank Lenders by Macquarie Group, rate cuts and funding costs continue to support the non-bank sector. 

Macquarie said data had revealed that non-banks (as a whole) have increased their market share of new mortgage flows. The broker also expects conditions to continue to improve for non-bank lenders.

With market pricing in further rate cuts, mortgage competition may ease from the banks as deposit profitability becomes impacted, giving non-bank lenders room to compete and grow volumes or expand margin.

However, the broker also acknowledged that the competition dynamics had changed:

As our Lendi Mortgage Pricing Index shows, bank mortgage spreads are largely unchanged in the past 18 months. However, competition has moved from banks to non-banks. Discussions with management and brokers suggest some non-bank lenders are taking advantage of the improved funding environment and competing aggressively on mortgages. In addition, there are newer entrants into the market as well who focus on prime mortgages given easier credit decisioning. We expect the growth-oriented strategies of non-banks to put some pressure on margins and/or volumes.

Therefore, while investment opportunities exist within the non-bank sector, investors must be selective. 

Investors should keep this in mind when considering alternatives to the big 4 banks.

Where does the broker see value?

In its research note, Macquarie also named two non-bank lenders it expected to outperform and two on which it held a neutral view. 

The broker said non-banks had performed very strongly in 2025, rallying ~10-45%. 

At the beginning of 2025, Macquarie preferred Liberty Financial Group Ltd (ASX: LFG) and Pepper Money Ltd (ASX: PPM) due to tailwinds and on valuation grounds. 

However, after rallying 34% for the year to date, Macquarie has downgraded Pepper Money from outperform to neutral with a price target of $1.77. 

The broker has retained an outperform rating on Liberty Financial Group and price target of $4.30.

The broker also has an outperform rating on Australian Finance Group Ltd (ASX: AFG) and a price target of $2.20. Meanwhile, Resmiac Group Ltd (ASX: RMC) has been assigned a neutral rating and a price target of $0.95.

The post Are non-bank lenders a lucrative alternative to the big 4 banks? appeared first on The Motley Fool Australia.

Below we look at two quality ASX dividend stocks offering market beating yields that I think will continue to deliver the goods in FY 2026 and beyond.

Before we dive into those, though, a few important reminders.

First, the dividend yields that you generally see quoted are trailing yields. Future yields may be higher or lower depending on a range of company specific and macroeconomic factors.

Though with that in mind, I expect all three of the below ASX dividend stocks should continue to deliver reliable passive income for years to come. And likely some share price gains as well.

Also, bear in mind that a properly diversified income portfolio will contain more than just two ASX dividend stocks. There's no magic number. But 10 is a reasonable ballpark figure, ideally operating in various sectors and locations.

This will reduce the risk that your entire portfolio takes an outsized hit if any single company or sector runs into a rough patch.

With that said…

Two ASX passive income stocks to buy with $5,000

The first ASX stock I'd invest $5,000 in today for market beating passive income is Liberty Financial Group Ltd (ASX: LFG).

Shares in the financial services company are down 8.5% over 12 months but have gained 4.6% so far in 2025, closing on Wednesday at $3.43 a share.

On the passive income front, Liberty Financial paid a partly franked interim dividend of 17 cents a share on 13 December. And the company will pay a final unfranked dividend of 20 cents per share on 29 August. (It's a bit too late to grab that one, as the stock traded ex-dividend on 27 June.)

All told then, Liberty Financial paid (or shortly will have) 37 cents a share over the past year. This sees the ASX dividend stock trading on a partly franked trailing yield of 10.8%.

Meaning you might expect to receive $539 a year in passive income from a $5,000 investment today.

The second ASX dividend stock I'd buy today is New Hope Corp Ltd (ASX: NHC).

Shares in the S&P/ASX 200 Index (ASX: XJO) coal miner have slumped almost 26% over the past year amid declining coal prices. But I believe the year ahead should see some share price recovery along with more stable coal prices.

As for those dividends, New Hope paid out two fully franked dividends totalling 41 cents per share over the past 12 months. At Wednesday's closing price of $3.81, New Hope shares trade on a fully franked trailing yield of 10.8%.

So, with a $5,000 investment today, you might expect to earn $538 a year in passive income from New Hope shares.

The post 2 top ASX passive income stocks to buy with $5,000 today appeared first on The Motley Fool Australia.

We highlight some of the broker's top picks from each of the 11 market sectors.

Macquarie is tipping particularly strong capital growth over the next year for these stocks.

Top ASX 200 share picks in every sector

Macquarie has given an outperform rating to all these ASX shares and predicts strong capital growth over the next 12 months.

Materials

In the materials sector, Northern Star Resources Ltd (ASX: NST) is among Macquarie's top picks for strong capital growth.

The broker has a 12-month share price target of $26 on the ASX gold mining share, implying a potential 41% gain over the next year.

Macquarie also likes Capstone Copper Corp CDI (ASX: CSC) shares.

It has a 12-month price target of $11.60 on the ASX 200 copper share, implying a potential 52% upside from here.  

Among ASX 200 lithium shares, Macquarie likes Pilbara Minerals Ltd (ASX: PLS).

It expects a potential 54% gain over the next year based on its target price of $2.40.

Healthcare

The broker forecasts strong share price growth for healthcare sector heavyweight CSL Ltd (ASX: CSL).

Macquarie has a price target of $360.30 on CSL shares. This implies a potential 49% upside over the next year.

Technology

Macquarie is positive on Nextdc Ltd (ASX: NXT) shares with a 12-month price target of $21.20.

This suggests a potential 55% gain for investors who buy the ASX 200 tech share today.

Industrials

Macquarie has a 12-month share price target of $6.75 on IPH Ltd (ASX: IPH), implying a potential 37% gain from here.

Energy

Macquarie likes ASX 200 oil and gas share Santos Ltd (ASX: STO) and expects about 31% growth over the next year.

The broker's share price target is $8.50.

Financials

Macquarie is backing Liberty Group (ASX: LFG) shares for strong price growth over the next year.

The broker has a 12-month price target of $4.40 on the ASX 200 financial share, implying a potential 40% upside from here.

Utilities

Macquarie likes AGL Energy Limited (ASX: AGL) shares and expects about 18% growth over the next year, given its $12.29 price target.

Consumer discretionary

Macquarie also names Breville Group Ltd (ASX: BRG) as a top ASX 200 share pick.

The broker expects about 32% capital growth over the next year based on its price target of $41.10.

Macquarie says Breville is one of 17 stocks set to benefit from the US-China tariff deal announced this week.

Consumer Staples

Macquarie is backing Treasury Wine Estates Ltd (ASX: TWE) shares, tipping a 37% annual gain based on its price target of $11.70.

Real estate & REITs

The ASX 200's No. 1 property share Goodman Group (ASX: GMG) has won Macquarie's favour.

The broker has a 12-month share price target of $36.31, indicating a potential 14% gain ahead.

Communications

Among ASX 200 communications shares, Macquarie likes News Corporation CDI (ASX: NWS) with a price target of $58.

This suggests a potential 14% upside for investors from here.

The post Macquarie's best ASX 200 share picks in each of the 11 market sectors appeared first on The Motley Fool Australia.

But broker Macquarie is forecasting ho-hum dividend yields from the big four banks this year.

Specifically, 2.8% for Commonwealth Bank of Australia (ASX: CBA) shares, 4.6% for National Australia Bank Ltd (ASX: NAB) shares, 4.8% for Westpac Banking Corporation (ASX: WBC) shares, and 5.7% for Australia and New Zealand Banking Group Ltd (ASX: ANZ) shares, based on stock prices at the time of writing.

Macquarie also has uninspiring ratings on these ASX bank stocks — namely a neutral rating on ANZ and NAB shares and an underperform rating on CBA and Westpac shares.

The broker also expects the share prices of all four big bank stocks to fall over the next 12 months.

If you want to heed Macquarie's advice and avoid the bank stocks for now, what should you buy instead?

Investing in the ASX financial sector is still a sound option, given it's the market's second biggest sector and is known for good dividends.

Lots of ASX financial shares also offer appealing potential upside over the next 12 months, according to the broker.

14 ASX financial shares set to outperform: broker

According to a new note, Macquarie has given an outperform rating to 14 of the ASX financial shares under its coverage.

Some of them are offering more potential share price growth than others.

Here are some examples.

Liberty Group (ASX: LFG)

The broker has a 12-month price target of $4.40 on this ASX financial share.

The Liberty share price finished yesterday's session at $3.12.

The broker's forecast implies a potential 41% upside from here.

QBE Insurance Group Ltd (ASX: QBE) 

Macquarie has a share price target of $23 on this insurance giant.

QBE shares closed at $22.37 on Thursday, implying an almost 3% upside on offer to investors from here.

GQG Partners Inc (ASX: GQG) 

Macquarie has a share price target of $2.90 on GQG.

The GQG share price at the market close yesterday was $2.24.

The broker's forecast implies a potential 29% upside ahead.

Pinnacle Investment Management Group Ltd (ASX: PNI)

Macquarie has a 12-month target of $27.37 on Pinnacle Investment shares.

Pinnacle Investment shares closed at $19.92 yesterday, suggesting a possible 37% upside from here.

Navigator Global Investments Ltd (ASX: NGI)

The broker has a 12-month target of $2.37 on this ASX financial share.

Navigator shares closed at $1.75 on Thursday, indicating a potential 36% capital gain ahead.

Fleetpartners Group Ltd (ASX: FPR)

Macquarie has a 12-month target of $3.77 on the stock of this car fleet management company.

Fleetpartners shares closed at $2.99 on Thursday, implying 26% potential growth over the next year.

Qualitas Ltd (ASX: QAL)

The broker has a target price of $3.10 on this alternative real estate investment manager.

Qualitas shares closed at $2.74 yesterday, suggesting a potential 13% capital gain ahead.

AMP Ltd (ASX: AMP)

The broker has a 12-month target of $1.34 on this ASX financial share.

The AMP share price closed at $1.31 yesterday.

The broker's forecast implies AMP shares are almost fully valued, with just 2% potential growth ahead.

The post 8 alternative ASX financial shares to buy instead of bank stocks: broker appeared first on The Motley Fool Australia.

Franking credits are the tax already paid by a company on its profits. When a company distributes dividends to shareholders, it can attach franking credits to show that tax has already been paid at the corporate level (usually 30%).

They're attractive for investors looking to take advantage of Australia's dividend imputation system because they offer the benefit of boosted total return, higher effective yields, and potential for special dividends or buybacks.

Here's a breakdown of the 7 companies that Macquarie believes may act on their large franking credits balance and boost dividend yields, according to the broker's latest research report.

Downer EDI Ltd (ASX: DOW)

Macquarie analysts note there is a potential likelihood of capital return for Downer EDI in the form of Special DPS or Buyback.

The company currently has a 1% franking credit balance as a percentage of market cap and holds 19% excess cash. 

Analysts also believe the company may retire its high-cost Downer EDI ROADS security division.

At time of writing, Downer EDI shares were trading at $6.12.

Flight Centre Travel Group Ltd (ASX: FLT)

Macquarie analysts note there is a potential likelihood of capital return for Flight Centre in the form of Special DPS or Buyback.

The report shows the company currently has a 3% franking credit balance as a percentage of market cap and holds 66% excess cash. 

Analysts also flag the company "just announced a $200m buyback so a special could also be considered".

At time of writing, Flight Centre shares were trading at $13.67.

G8 Education Ltd (ASX: GEM)

Analysts have flagged G8 Education as having potential likelihood of capital return in the form of a Buyback.

The company currently has a 5% franking credit balance and holds 9% in excess cash as a % of market capital.

But Macquarie notes, "[A] potential buyback [is] currently in-progress. If GEM announced growth plans for its centre network a new buyback will be less likely."

At time of writing, G8 Education shares were trading at $1.28.

JB HI-FI Ltd (ASX: JBH)

JB HI-FI has a franking balance of 4% and excess cash of 1% of market capital, according to the report.

This puts the company in a position of potential for capital return in the form of Special DPS or Buyback, according to report data.

At time of writing, JB HI-FI shares were trading at $103.37.

Jumbo Interactive Ltd (ASX: JIN)

The report notes that Jumbo Interactive currently holds a 4% franking balance and 17% in excess cash.

Analysts predict this puts the company in a position of a potential for capital return in the form of a Buyback.

Analysts note that the current buyback program is ongoing, and the share price has fallen substantially in the last couple of months.

On 15 May shares were trading at $9.85, down 31.63% from January this year.

Liberty Financial Group Ltd (ASX: LFG) 

Analysts list Liberty Financial as having potential for Special DPS capital return.

The company currently holds a 6% franking balance and 89% in excess cash.

Company shares, at time of writing, were trading at $3.15.

Monash IVF Group (ASX: MVF)

Monash IVF currently holds a 4% franking balance and 14% in excess cash, according to the report.

This saw analysts list the company as having potential for capital return in the form of Special DPS or Buyback.

The company commenced ordinary dividends at last result, noted scope for further capital return post supply chain investments. 

Analysts see "a level of cash retained on balance sheet as prudent and will spend a portion on supply chain investment short-med term before making capital return decisions."

Monash IVF shares were trading at $0.87 on 15 May.

The post 7 companies with excess franking credit balances that may boost their dividend yields, according to Macquarie appeared first on The Motley Fool Australia.

Meantime, some brokers changed their ratings on various ASX stocks before heading off on holidays.

Here are six ASX All Ords shares that market analysts on the CommSec trading platform upgraded to a consensus 'strong buy' rating last month.

6 ASX All Ords shares lifted to 'strong buy' status

Telstra Group Ltd (ASX: TLS)

Analysts upgraded their consensus rating on Telstra shares to a strong buy on 23 December.

The Telstra share price is $4.02, up 0.25%.

Goldman Sachs has a buy rating on Telstra with a 12-month share price target of $4.50. This implies a potential 12% upside for investors in 2025.

In a new note, analysts Kate Hannan and Annabel Li discussed the recent sale of Foxtel to global sports streaming platform, DAZN for $3.4 billion.

Under the deal, Telstra will also sell its minority stake in Foxtel. It will receive $128 million in cash to repay a loan, as well as an approximate 3% shareholding in DAZN.

Hannan and Li explained their buy rating on Telstra shares:

We believe the low risk earnings (and dividend) growth that Telstra is delivering across FY22-25, underpinned through its mobile business, is attractive.

We also believe that Telstra has a meaningful medium term opportunity to crystallise value through commencing the process to monetize its InfraCo Fixed assets — which we estimate could be worth between A$22-33bn.

The ASX All All Ords telecommunications share is up 1.01% over the past 12 months.

Liberty Group (ASX: LFG)

Analysts upgraded their consensus rating on Liberty Group shares to a strong buy on 13 December.

The Liberty share price is currently steady at $3.32.

The ASX All Ords financial share is down 19.2% over the past 12 months.

Integral Diagnostics Ltd (ASX: IDX)

Analysts upgraded their consensus rating on Integral Diagnostics shares on 27 December.

The Integral Diagnostics share price is trading at $2.91 on Thursday.

Bell Potter is among the analysts with a buy rating on this ASX All Ords healthcare stock.

The broker has a 12-month price target of $3.87, implying a potential upside of 33% for the medical imaging company in 2025.

The ASX All Ords healthcare share is up 50.7% over the past 12 months.

Helloworld Travel Ltd (ASX: HLO)

Analysts on CommSec upgraded their consensus rating on Helloworld shares on 13 December.

The Helloworld Travel share price is currently $1.97, up 0.87%.

The ASX All All Ords travel share is down 19.2% over the past 12 months.

Paradigm Biopharmaceuticals Ltd (ASX: PAR)

Analysts upgraded their consensus rating on Paradigm shares to a strong buy on 13 December.

The Paradigm Biopharmaceuticals share price is 39 cents, up 2.67% on Thursday.

Bell Potter has a speculative buy rating on the biotech, which is focused on repurposing Pentosan Polysulfate Sodium (PPS) for the treatment of knee osteoarthritis.

The broker is encouraged by trial data and the possibility of phase 3 studies starting in the new year. Its 12-month price target is 80 cents per share, suggesting a potential upside of 105% in 2025.

The ASX All Ords healthcare share is down 14.4% over the past 12 months.

Cobram Estate Olives Ltd (ASX: CBO)

Analysts upgraded their consensus rating on Cobram shares to a strong buy on 16 December.

The Cobram Estate share price is $2.13, down 0.93% on Thursday.

This ASX All Ords consumer staples share is up 21.7% over the past 12 months.

The post 6 ASX All Ords shares lifted to 'strong buy' consensus ratings for the new year appeared first on The Motley Fool Australia.

Four ASX shares that are rising more than most today are listed below. Here's why they are storming higher:

Liberty Group (ASX: LFG)

The Liberty Group share price is up 4% to $3.41. Investors have been buying this diversified finance company's shares following the announcement of interim and special dividends. Liberty advised that it will be paying a 12 cent per share unfranked interim dividend for the five-month period 1 July 2024 to 30 November 2024 and a 5 cent per share fully franked special dividend. The release notes that the record date for both dividends is 29 November 2024. After which, they will be paid to eligible shareholders next month on 13 December 2024.

Lovisa Holdings Ltd (ASX: LOV)

The Lovisa share price is up 3.5% to $28.14. This morning, Morgans reiterated its add (buy) rating on this fashion jewellery retailer's shares with a slightly trimmed price target of $36.00 (from $36.50). Elsewhere, analysts at Ord Minnett have upgraded the company's shares to a hold rating with a $29.20 price target. The latter made the move on valuation grounds following a recent pullback.

Novonix Ltd (ASX: NVX)

The Novonix share price is up almost 17% to 86.5 cents. Investors have been buying this battery materials technology company after it announced its second offtake agreement of the month. Novonix has signed a binding offtake agreement for a minimum of 32,000 tonnes of high-performance synthetic graphite material with Volkswagen's PowerCo. This material will be supplied to PowerCo over a five-year term starting in 2027. PowerCo was established by auto giant Volkswagen in 2022 and is committed to ramp-up global battery cell production. Earlier this month, Novonix signed a similar deal with fellow car giant Stellantis.

SG Fleet Group Ltd (ASX: SGF)

The SG Fleet share price is up 22% to $3.25. This has been driven by the receipt of a non-binding takeover offer from Pacific Equity Partners (PEP) and affiliates. The private equity firm has tabled a $3.50 per share indicative offer for the fleet management and salary packaging company. The SG Fleet board has "determined that it is in the interests of all SG Fleet Shareholders to engage with PEP on the Indicative Proposal and has granted PEP a period of exclusivity to facilitate PEP's due diligence and enable it to put forward a binding offer and for the parties to concurrently negotiate a scheme implementation deed."

The post Why Liberty, Lovisa, Novonix, and SG Fleet shares are storming higher today appeared first on The Motley Fool Australia.

That question was asked of me this morning by an investor friend on the hunt for some extra passive income.

The company in question is All Ordinaries Index (ASX: XAO) listed Liberty Financial Group Ltd (ASX: LFG).

Liberty Financial, if you're unfamiliar, is a diversified finance company operating in Australia and New Zealand. It offers a full array of home, personal, and business loans, as well as broking services, general insurance, and its investments business.

Liberty Financial began trading on the ASX on 15 December 2020.

While the early post-IPO months went well, the stock trended steadily lower from there through to late 2022, losing more than 57% of its value.

But the last 12 months have looked up for the ASX All Ords dividend stock, with the share price gaining 3.5% over the full year.

And, yes, the company is sought after for its dividends.

But does it really pay a yield north of 11%?

Let's find out.

Hunting for high-yielding ASX All Ords dividend stocks

Liberty Financial has paid two annual, unfranked dividends since listing on the ASX.

The company paid an interim dividend of 21 cents per share on 15 December. The final dividend of 24 cents per share landed in eligible investors' bank accounts on 31 August.

The final dividend was declared when the ASX All Ords stock reported its FY 2023 results, which included a $181 million statutory net profit after tax (NPAT).

And while down from FY 2022, the company's return on equity (ROE) of 15.3% remained high by industry standards.

"LFG again delivered the highest ROE to leverage ratio compared to its bank and non-bank peers," chief financial officer Peter Riedel said at the time of the results release.

All told then, the ASX All Ords dividend stock paid out a total of 45 cents per share over the past 12 months.

At the current share price of $3.90, that equates to a trailing yield of 11.5%.

Which, the last I checked, is indeed more than 11%!

The post Does this ASX All Ords dividend stock really yield more than 11%? appeared first on The Motley Fool Australia.

The basic theory is that the amount of output from each person must increase for the economy, wages and standard of living to also climb upwards.

So if productivity is that important, which are the best ASX companies by that measure?

For stock investors, surely it would be useful to find out which publicly listed businesses are the most efficient on a per-employee basis?

Top 10 most productive ASX companies 

To gauge productivity, The Motley Fool turned to S&P Market Intelligence.

That service helpfully provides a listing of every ASX company's revenue per employee for the last 12 months.

The top 10 best ASX companies for productivity looks like this:

The top three are all investment companies, which are arguably not a fair comparison to other businesses.

That's because the employees don't themselves directly make the goods and services, but rather the revenue reflects the performance of the company's investments.

So for any given year, a two-staff entity like Carlton Investments could rake in tens of millions in revenue. On the flip side, they could have lost money during the year for performing the same investment work.

Therefore, if you exclude the top three from analysis, this is where it gets really interesting.

Mortgage broking seems to be a very productive venture, with $3.6 million of revenue figuratively passing through the hands of each Australian Finance Group employee.

Pointedly, with interest rates rising, the AFG share price over the past year has declined 8.4% notwithstanding this efficiency.

Industrial real estate manager Goodman Group also rakes in more than $3 million per staff member.

Perhaps the market appreciates this more, sending its shares up 31.8% over the past 12 months.

Service providers holding their own

The next two are fascinating to me personally.

Data#3 Limited (ASX: DTL) is a provider of information and communications technology services to business clients.

The stereotype is that services do not scale very well.

That is, if you have a factory making lollies, it could take the same number of employees to create 10 or 100,000.

But if you're providing a service, you can't scale it to multiple clients. Each client needs to be looked after by a particular human.

Regardless, the services that Data#3 offers its customers must be of tremendous value, seeing that a whopping $1.77 million of revenue is generated per employee.

Data#3 shares have risen 13% over the past year.

As a contrast, Suncorp is a large financial institution, which has been trying to offload its banking arm to ANZ Group Holdings Ltd (ASX: ANZ).

But even with this deal facing stumbling blocks from the competition watchdog, the business seems to be doing fine, at least by the revenue per employee productivity metric.

Suncorp shares have admittedly risen 39.2% over the past year, while each staff member has been generating $1.41 million of business.

The post REVEALED: Which ASX companies are the most productive in 2023? appeared first on The Motley Fool Australia.

The relationship between the dividends per share that a company pays and the price that a company's shares trade at produces the metric we know as the dividend yield.

Most ASX shares offer investors dividends yields of between 3 and 6%. But some go higher than that. In fact, the ASX houses many shares that currently have a trailing yield of above 10%. Here are a dozen such shares:

So are these ASX dividend shares all screaming buys? Can investors really expect to get at least 10 cents on every dollar invested back every year by investing in these companies?

When is a 10% yielding ASX divided share a trap?

Well, not so fast. As a rule, income investors should be very careful when dealing with an ASX dividend share offering a yield of 10% or higher. As we went through earlier, the dividend yield is a function of a company's share price, as well as its raw dividends per share. Thus, if the market is pricing a dividend share with a high yield, it is usually for a reason.

Looking at this list, we can see it is dominated by ASX energy shares. Terracom, Yancoal, Whitehaven, and New Hope are all ASX coal miners, and Woodside is an oil share. These companies' earnings (and thus dividends) are notoriously cyclical and depend almost entirely on the coal and oil prices at the time.

Recently, high energy prices have turbocharged these companies' profitability. But investors know that energy pricing booms don't last forever, and neither do the dividends that are funded by them. So that's probably why these companies are seemingly offering such large dividend yields right now.

It's not just ASX energy shares either

The other ASX dividend shares listed here also have their own problems. Magellan is a fund manager that has dramatically fallen from grace over the past few years. I would wager that it would be hard to find any serious investor who expects this company to pay out the same $1.16 in dividends per share over the next year as it did the last.

As such, you should always take an ASX dividend share offering a yield of 10% or higher as nothing more than an invitation to dig a little deeper.

It is entirely possible to find a 10%-er that will indeed prove to be a solid and reliable income stock to invest in. But more often than not, these types of income shares turn out to be dreaded dividend traps — luring investors in with a seemingly high yield, only to cut it down the road.

So choose your high-yielding dividends wisely. This is a dangerous field to be digging in for income.

The post 12 ASX dividend shares with yields over 10%. Are they too good to be true? appeared first on The Motley Fool Australia.

Shares of the lending company are currently trading for $4.45 each, a drop of 0.67% on Friday's closing price.

Let's go over the highlights of the company's report.

What did Liberty Financial Group Report?

• Statutory net profit after tax (NPAT) up 18% year over year (yoy) to $219.3 million
• Underlying net profit after tax and amortisation (NPATA) up 2% yoy to $231.1 million
• Average financial assets up 6% yoy to $12.9 billion
• Return on financial assets stable at 1.7% yoy
• Final unfranked dividend of 28.2 cents per share

Liberty Financial posted record earnings, originations (approved loans), and growth across its portfolio.

Eating into the company's profits was its increased cost-to-income figure. It increased to 23.4% in 2H22 from 21.9% in 2H21. The company cited one reason for the increase was the hiring of additional staff, with employee numbers growing to 524 from 500 during the period.

The unfranked dividend of 28.2 cents per share had a record date of 30 June and will be paid 31 August.

What else happened in FY22?

Liberty Financial added $50 million in cash to its balance sheet in FY22. This helped boost its net assets to $1.11 billion, up 8.34% during the reporting period. The company describes its balance sheet as "stable" and notes that its debt is investment grade BBB- rated.

When breaking down the firm's operating segments, its residential and secured loans broke origination records, with their totals growing 28% and 66% respectively. These figures led the company to post record high originations as a group, with 36% total growth yoy.

On the risk front, the company states that COVID-19 is no longer impacting customers, with the projected risk from the virus falling to 0.3% in FY22 from 9.7% in FY20.

What did management say?

Liberty Financial Group chief financial officer Peter Ridel said:

LFG's capital and liquidity position remain in a strong position to continue supporting our customers and business partners. LFG established seven new funding vehicles in FY22 raising $5 billion in new liquidity.

Liberty Financial Group chief executive officer James Boyle also commented:

We continued progress on our mission of providing solutions for free thinkers in need of finance. Generating asset growth while also maintaining ROA and ROE is further evidence of LFG's increasing and durable business value.

What's next?

Liberty Financial Group reported a mixed outlook for the future. On the negative side, it stated economic indicators suggest slower credit growth. It also expects a contraction in its net interest margin (NIM) and will need to outlay greater customer support expenses as higher interest rates bite.

For the positives, its top line will be supported by ongoing refinancing activity as its fixed-rate loans expire. The company will also fast-track growth for its automotive finance products and continue to invest in improving customer service.

Liberty Financial Group share price snapshot

The Liberty Financial Group share price is currently down 20% year to date. By comparison, the S&P/ASX 200 Index (ASX: XJO) is down 7% over the same period.

The company's market capitalisation is around $1.35 billion, including today's price action.

The post Liberty Financial share price slips despite $219 million profit appeared first on The Motley Fool Australia.

We've already discussed Transurban Group (ASX: TCL)'s upcoming dividend, as well as Rural Funds Group (ASX: RFF)'s ex-dividend gyrations this Wednesday. But here are three more ASX 200 shares that are going ex-div this week.

3 ASX 200 shares trading ex-dividend this week

Magellan Global Fund (ASX: MGF)

Magellan Global Fund is the flagship investment fund of Magellan Financial Group Ltd (ASX: MFG). It aims to achieve a net return of 9% per annum by investing in "20 to 40 of the world's best global stocks". Magellan Global Fund pays out a dividend distribution twice a year.

Its latest payment will be worth 3.66 cents per share, unfranked, and will be doled out on 21 July. The fund will trade ex-dividend for this payment on Friday, 1 July. So don't be surprised if we see a drop in the Magellan Global Fund's share price at week's end. At current pricing, Magellan Global units have a dividend yield of 5.55%

Regal Investment Fund (ASX: RF1)

Another ASX investment fund in Regal Investment Fund is next up. Regal focuses on alternative investments with little correlation to the broader markets. It uses techniques such as short selling and hedge fund investing to achieve outperformance. Regal also pays a dividend twice annually.

Its latest payment will be the final and unfranked dividend of 24.5 cents per share that investors will receive on 22 August. Regal shares will trade ex-dividend for this payment tomorrow (30 June). That will give Regal Investment Fund units a yield of 10.61% on current prices.

Liberty Financial Group Ltd (ASX: LFG)

Liberty Financial Group is our final share to check out. This ASX financial share is a provider of home loans, business loans and other financial products. Liberty Financial shares have gone ex-dividend today for the company's upcoming final dividend payment.

This will be worth 28 cents per share, unfranked, and will be paid out on 31 August. As one would expect with an ex-dividend date, Liberty shares have dropped by a hefty 6.51% today to $4.02 a share at the time of writing. This gives Liberty Finacial shares a dividend yield of 12.19% right now.

The post Here are 3 ASX financial shares going ex-dividend this week appeared first on The Motley Fool Australia.

The Australian share market was pulled in two different directions today, with the laggards winning out. While ASX-listed tech shares largely followed in the footsteps of their US-listed counterparts, other sectors struggled. The worst offending was the health care sector. Shares in CSL Limited (ASX: CSL) brought down the market with its 8.1% fall.

However, the question is: which shares delivered the biggest returns to investors on the ASX today? Here are the top ten stocks that came through for investors:

Top 10 ASX shares countdown today

Looking at the top 200 listed companies, Liberty Financial Group (ASX: LFG) was the biggest gainer today. Shares in the financial services company surged 8.41% despite there being no news out from the company. Find out more about Liberty Financial here.

The next biggest gaining ASX share today was WiseTech Global Ltd (ASX: WTC). The logistics software company jumped 6.90% backed by a more positive sentiment towards tech shares. Uncover the latest WiseTech Global details here.

Today's top 10 biggest gains were made in these ASX shares:

Our top 10 ASX shares today countdown is a recurring end-of-day summary to ensure you know which companies were making big moves on the day. Check-in at Fool.com.au after the market has closed during weekdays to see which stocks make the countdown.

The post Here are the top 10 ASX shares today appeared first on The Motley Fool Australia.

Right now, the Liberty share price is $7.16, 2.14% higher than its previous close.

Liberty share price jumps on 37.6% boost to profit

Here's how the ASX newbie performed during FY21:

• $853.1 million of revenue, 0.1% more than that of FY20
• Profit after tax of $185.4 million, 37.6% higher than the previous financial year
• 24 cent unfranked final dividend

Liberty's income benefited from a 4.5% increase in average financial assets which was more than offset by a reduction in interest income yield from 5.6% to 5.1%. Its profit after tax included $32.5 million of IPO-related expenses.

Over FY21, the company's portfolio of financial assets increased to $12.3 billion following $4.1 billion of originations.

Liberty's fee, commission, and other income increased 13.5% to $231 million.

The company's expenses fell 8% to $640.7 million in FY21.

Impairment of financial assets decreased from $32.5 million in FY20 to $400,000 in FY21.

The company ended the period with $603 million of cash.

What happened in FY21 for Liberty?

Perhaps the most exciting news from Liberty in FY21 was its ASX debut.

The company's prospectus' offered potential investors the opportunity to buy into Liberty for $6 per share. That left Liberty with an expected market capitalisation of $1.82 billion.

Liberty's Initial Public Offering (IPO) occurred around midday on 15 December 2020. The Liberty share price finished its first session trading at $7. That represents a 16% gain on the offer price.

The company's share price was also boosted when Liberty reported its half year results in February.

What did management say?

Liberty's CEO, James Boyle, commented on the results boosting the company's share price today, saying:

We achieved our objective of continuing to help more people get and stay financial with Liberty.

Liberty's business partners and customers have shown tremendous resilience during the pandemic.  

The current Australia wide lockdown and speed of vaccination rollout is causing continued short-term economic uncertainty impacting customer sentiment. However, all things equal, we remain confident of generating further value for Security holders in FY22.

Liberty's chief financial officer, Peter Riedel, added:

LFG's capital and liquidity position remains in a strong position to continue supporting our customers and business partners. LFG established eight new funding vehicles in FY21 raising $4.9 billion in the new liquidity.

What's next for Liberty?

Here's what market watchers interested in the Liberty share price might want to keep an eye on in FY22:

Liberty plans to increase its profitability through improving its customers' experiences, choices, and its risk adjusted returns.

It will do so by speeding up its approvals process using its proprietary technology, focusing on quickly and helpfully answering customers' queries, and providing customers and business partners with access to their information online.

To improve its customer's choices, the lender will be increasing the ways it can fulfil its financial needs and creating options for those who are normally excluded from its offerings.

Finally, Liberty will improve its risk adjusted returns by simplifying, speeding up, and reducing the effort involved in its applications, working proactively in cooperation with customers if things don't go to plan, and being responsible with costs, and fair with customers.

Liberty share price snapshot

The Liberty share price has remained relatively steady since it listed on the ASX. Its highest price so far was $8.35, while its lowest was $6.60.

Right now, the company's share price is 2.2% higher than its first close but 5.1% lower than it was at the start of 2021.

The company has a market capitalisation of around $2.17 billion, with approximately 303 million shares outstanding.

The post Liberty (ASX:LFG) share price gains on FY21 earnings appeared first on The Motley Fool Australia.

This is because ASX big bank shares aren't as leveraged to the housing market as non-bank financial institutions (NBFIs).

That's grim news for ASX banks as the sector has outperformed on the housing rebound.

ASX banks' outperformance is coming back to bite them

The Commonwealth Bank of Australia (ASX: CBA) share price, Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price, National Australia Bank Ltd. (ASX: NAB) share price and Westpac Banking Corp (ASX: WBC) share price have beaten the S&P/ASX 200 Index (Index:^AXJO) over the past year.

Their big rally leaves them more vulnerable to bad news even though their operating environment appears bullish.

Rising house prices are usually a tailwind for the sector. But this time is different as the rebound is driven by record low mortgage rates, noted Citigroup.

Why emerging lenders are better buys than ASX banks

"Despite recent investor fears, lenders have plentiful cheap funding to maintain these record low rates, but housing affordability is set to slow house prices," said the broker.

"Loan demand is broadening. However, this spells trouble for Major Bank revenue growth, which is expected to be lower than previous cycles.

"NBFIs, fuelled by rising borrower demand and falling funding costs, can drive ~7% revenue growth, to lead the sector."

In contrast, Citi is forecasting around a 5% increase in revenue for ASX bank shares, which is lower than previous cycles.

ASX NBFIs trading at an unwarranted discount

Despite the superior revenue growth profile for NBFIs, these ASX shares trade at a discount to ASX banks. Citi believes this presents a unique opportunity for investors.

"The NBFIs are expected to be the ultimate beneficiaries of the recent up-cycle in house prices," said the broker.

"At an average ~12x PE [price-earnings], below the Major Banks (~16x) and Regional Banks (~14x), the NBFIs are not currently reflecting their mortgage revenue growth prospects."

Shares to buy over ASX banks

Citi's two favourite NBFIs are the Liberty Financial Group Ltd (ASX: LFG) share price and Australian Finance Group Ltd (ASX: AFG) share price.

The broker upgraded its FY22 and FY23 cash earnings estimate for both ASX shares by 5% to 8%, each.

This isn't to say that the outlook for ASX bank lenders is grim. If anything, the Macquarie Group Ltd (ASX: MQG) share price is a standout due to its strong deposit base.

However, Citi pointed out that the Macquarie share price is looking fully valued at current levels.

The post Broker warns that small lenders are set to beat ASX bank shares appeared first on The Motley Fool Australia.

Liberty Group is a diversified finance company that held its initial public offering (IPO) debut on the ASX in December 2020. Its businesses include residential and commercial mortgages, motor vehicle finance, personal loans, business loans, broking services, general insurance and investments.

Here's what we learned from the company's financial results for the period ended 31 December 2020 (HY21).

Liberty Financial share price pops after strong results

Liberty Financial reported an HY21 statutory net profit after tax (NPAT) of $83 million compared to its HY20 NPAT of $74 million.

As at 31 December 2020, the group had financial assets under management totalling $12.0 billion. This is slightly higher than the $11.7 billion reported for 30 June 2020.

Liberty Financial held $672.4 million in cash at the end of the period, which compares to $484.9 million at the end of HY20.

Executive commentary 

Liberty Financial reported a reduction in customers impacted by the coronavirus pandemic to 2% of the portfolio as at 31 December 2020. This compares to 10% at 30 June 2020. 

Commenting on the current business environment, chief executive officer James Boyle said:

Liberty's customers have shown tremendous resilience during the pandemic. Notwithstanding the improved financial position of our customers, economic and social uncertainty continues which means we remain cautious about our FY21 results.

Liberty's chief financial officer Peter Riedel added:

LFG's capital and liquidity position remains in a strong position to support our existing customers and continuing to grow with only a modest increase in overall leverage ratio to 13.4x. Standard and Poor's also affirmed Liberty's investment grade corporate rating as BBB- (stable) and LFG issued three securitisations 2020 totalling $2.3b in the second half of 2020.

Since its IPO in December, the Liberty Group share price is up 17% and is trading 8.6% higher year to date.

The post Liberty Financial (ASX:LFG) share price closes higher. Here's why appeared first on The Motley Fool Australia.

Brokers have initiated research coverage on two new ASX stocks that have recently hit the bourse.

The Ansarada Group Ltd (ASX: AND) share price is the latest "buy" rated stock from Moelis Australia. The investment bank started covering the governance platform provider following its reverse takeover of The Doc Yard Ltd (ASX: TDY).

The latest high-growth ASX IT stock to buy

The cloud-based platform allows companies to securely share sensitive documents, such as for board meetings, takeovers and audits.

This means the AND share price should benefit from the expected rebound in mergers and acquisitions (M&As) in 2021.

If you believe that high-growth tech stocks will keep delivering this year, then Ansarada might be a good one for your watchlist.

Multiple catalysts to drive the Ansarada share price

There are other reasons why Moelis likes the stock. This includes good subscription growth potential and expected positive earnings before interest, tax, depreciation and amortisation (EBITDA) this financial year.

"Overall, we expect AND to benefit from the global trend of increased regulation on security and data management and exhibit strong growth over CY21 as M&A markets recover and revenue diversifies across new & enhanced platform use cases," said Moelis.

Moelis' 12-month price target on the stock is $1.83 a share.

Better than forecasts growth

Another new entry to the ASX that is worth watching is the Liberty Financial Group Pty Ltd (ASX: LFG) share price.

The analysts at Macquarie Group Ltd (ASX: MQG) initiated coverage on the recently listed financial services group with an "outperform" recommendation.

"Better-than-expected margins, book growth and asset quality vs Prospectus assumptions should support earnings ~15% above Prospectus NPATA, in our view," said the broker.

"Liberty is benefiting from wider-than-anticipated net interest margins, with BBSW (1mth) ~9bps below the RBA cash rate vs a long-term ~20bps premium."

Winning by a big margin

A modest 10 basis point (0.1 percentage point) change in margins will have a 6.3 percentage point impact on net profit before amortisation of acquired intangible assets (NPATA).

"Liberty should remain a leader in the non-bank sector, with its industry position supported by well-developed capital management capability, high level of funding stability and cost efficiency," added Macquarie.

"Interestingly, Liberty is the only Australian non-bank finance company with a public investment-grade issuer rating."

The broker's 12-month price target on the LFG share price is $8.27 a share.

The post Brokers are urging you to buy these 2 newly listed ASX stocks today appeared first on The Motley Fool Australia.

But when every dog and his master are getting on the bandwagon, you're bound to see a wide variety in substance.

"There was very high variability in the quality of new listings this year," Prime Value portfolio manager Richard Ivers told The Motley Fool.

Some companies were clearly taking advantage of "a short-term boost" to the bottom line from the COVID-19 pandemic, he said.

"With the market placing high valuation multiples on some of these sectors, they got the double benefit of high valuation multiples on cyclically high profits.

"Others were high quality businesses with a solid long term outlook."

So what was the best out of a motley crew?

The best of the good ones

Pengana Capital portfolio manager Chris Tan told The Motley Fool that Liberty Financial Group Pty Ltd (ASX: LFG) was the best new ASX listing in 2020.

The loan provider's long track record as a private company gives Tan much confidence that it knows what it's doing.

"LFG is a well-established company with a consistent history of profitability, unlike a lot of the latest IPOs. It was established in 1997 and has become a top 10 home lender in Australia," he said.

"Surviving the GFC of 2008 is testament to its credentials in credit risk management. Its proprietary, tech-driven risk-based pricing model allows it to profitably write new business that larger players (eg the big 4 commercial banks) are often not able to."

The Liberty IPO share price was not excessive, making it even more attractive.

"The IPO pricing was favourable at a P/E [ratio] of 11 times financial year 2021 earnings and a forecast 4% dividend yield."

Liberty shares sold for $6 during the IPO and have bumped up to $7.90 in just two weeks since listing.

Aside from its already-strong residential loan business, Liberty still has plenty of untapped potential in other areas.

"It has growth opportunities in large addressable markets such as commercial, personal and motor loans," said Tan.

To round out the case for Liberty shares, insider shareholdings have remained very high after the listing.

"The size of the IPO was limited with the founder group maintaining almost 80% of the shares on listing," Tan said. 

"The main founder and shareholder [and executive director], Sherman Ma, is keeping his entire shareholding. As the most knowledgeable of insiders, when founders maintain large stakes a new investor can justifiably derive more confidence in a company's future prospects than with a normal IPO."

The post This ASX share was the best IPO of 2020: fundie appeared first on The Motley Fool Australia.