Four ASX shares that are missing out on the good times today are listed below. Here's why they are falling:

Cettire Ltd (ASX: CTT)

The Cettire share price is down 3% to $3.89. This ecommerce company's shares have come under pressure this week amid heavy insider selling and a scathing media report. While the company refuted some of the latter's claims, the negative shopping experiences reported by some users may concern investors.

GQG Partners Inc (ASX: GQG)

The GQG share price is down 1.5% to $2.20. This follows news that Pacific Current Group Ltd (ASX: PAC) has offloaded its stake in the company. PAC has sold almost 120 million shares at a 3.6% discount of $2.16 per share. This equates to a total consideration of $257.3 million.

Mesoblast Ltd (ASX: MSB)

The Mesoblast share price is down 5% to 32.2 cents. This is despite there being no news out of the biotechnology company today. However, with its shares rising strongly in recent weeks, it's possible that some investors are taking profit today. Mesoblast shares remain up over 17% since this time last month despite today's weakness.

Nine Entertainment Co Holdings Ltd (ASX: NEC)

The Nine Entertainment share price is down almost 2% to $1.63. This has been driven by the media company's shares going ex-dividend this morning for its latest dividend. Last month, Nine Entertainment released its half-year results and declared a fully franked interim dividend of 4 cents per share. This will now be paid to eligible shareholders next month on 18 April.

The post Why Cettire, GQG, Mesoblast, and Nine Entertainment shares are falling today appeared first on The Motley Fool Australia.

ASX 300 tech stock Audinate Group Ltd (ASX: AD8) also delivered good news for investors, with its share price rocketing more than 20% on Monday this week following a record half.

On the dividend front, there have been some healthy boosts to shareholder payouts from the industrial sector, with Transurban Group (ASX: TCL) and Computershare Ltd (ASX: CPU) upping their interim dividends by 13% and 33%, respectively.

ASX blue-chip stocks and investor favourites CSL Ltd (ASX: CSL), Wesfarmers Ltd (ASX: WES), and Telstra Group Ltd (ASX: TLS) also rewarded investors with dividend hikes, although the resulting impact on their share prices was mixed.

Elsewhere in the big end of town, Commonwealth Bank of Australia (ASX: CBA) shares took a tumble on Wednesday this week after the ASX big four bank reported a 3% profit dip.

Despite plenty of reporting action still to come, including from the big ASX miners, there has been a great deal for investors to chew on so far.

On that note, we asked our Foolish writers which ASX stock they'd buy if they could choose only one so far this earnings season. Here is what they told us:

6 ASX shares to run the ruler over right now (smallest to largest)

• Camplify Holdings Ltd (ASX: CHL), $169.46 million
• Pacific Current Group Ltd (ASX: PAC), $545.13 million
• Temple & Webster Group Ltd (ASX: TPW), $1.43 billion
• Sonic Healthcare Ltd (ASX: SHL), $15.25 billion
• Wesfarmers Ltd (ASX: WES), $71.40 billion
• CSL Ltd (ASX: CSL), $137.20 billion

(Market capitalisations as at 16 February 2024).

Why our Foolish writers rate these ASX companies

Camplify Holdings Ltd

What it does: Camplify is an online platform for owners of recreational vehicles to hire them out to other users.

By Tony Yoo: Camplify is best described as an AirBnb-type app for caravans and motorhomes. It allows owners to hire their recreational vehicles out on a peer-to-peer platform, to provide an income when they're not in use.

From humble beginnings in Australia, the company has now expanded — via acquisitions and organic growth — to New Zealand, the United Kingdom, Spain, Germany, Netherlands and Austria.

While analyst coverage is sparse for the $175 million small cap, the stock has rewarded investors in recent times with a 35% climb since last April. It's no wonder, with 2023 financial year revenue 133% up from the prior period.

Camplify is due to release its interim financial report on 21 February.

Motley Fool contributor Tony Yoo owns shares of Camplify Holdings Ltd.

Pacific Current Group Ltd

What it does: Pacific Current invests in fund managers and helps them grow their businesses with its capital and expertise.

By Tristan Harrison: This ASX company's biggest asset is a position in fund manager GQG Partners Inc (ASX: GQG). The GQG share price and funds under management (FUM) have soared in the last few months, but the market hasn't been as excited about Pacific Current.

We've heard that many of Pacific's other fund managers are also performing well — experiencing inflows and winning new commitments for more investment. Plus, markets and asset prices have soared in the last few months, providing a strong tailwind for further FUM growth and perhaps encouraging more potential new clients.

I think Pacific's outlook is stronger than the market is giving it credit for, and the company's dividend outlook also looks promising.

Pacific Current is due to release its FY24 first-half result on Friday, 23 February.

Motley Fool contributor Tristan Harrison does not own shares of Pacific Current Group Ltd.

Temple & Webster Group Ltd

What it does: Temple & Webster is Australia's top online-only furniture and homewares retailer. The company offers more than 200,000 products that customers can buy 24 hours a day, seven days a week. 

By Bernd Struben: Temple & Webster's online platform has delivered sales growth throughout the year despite the high inflationary and interest rate environment.

For the half year to 31 December, the company reported record revenue of $254 million, up 23% year on year. And I like the balance sheet, with cash holdings of $114 million and no debt.

As of Friday's close, the Temple & Webster share price is up 221% in 12 months at $11.63 cents. And I'm in agreement with Citi's analysts who believe there's more outperformance ahead. The broker has a target price of $13 a share on the stock, representing a potential upside of 12% from current levels.

Motley Fool contributor Bernd Struben does not own shares of Temple & Webster Group Ltd.

Sonic Healthcare Ltd

What it does: Sonic Healthcare is a private pathology and laboratory service provider with operations worldwide, including in Australia, the United States, Germany, the United Kingdom, and Switzerland. Sonic and its subsidiaries are often involved when a test or scan needs to be carried out and analysed.

By Mitchell Lawler: I believe Sonic Healthcare is among the highest-quality businesses on the Australian Securities Exchange due to its services' non-discretionary nature and defendable moat. 

It requires an incredible amount of money to reach an efficient scale in pathology services. As a result, competitors are unlikely to risk billions of dollars to carve off a slither of market share. Sonic has used this to its advantage over the years by acquiring its way into market dominance across multiple geographies. 

Additionally, I suspect Sonic might surprise the market on Tuesday, 20 February, when it releases its half-year results. 

The company's last two reports have cycled large contributions from COVID-19 testing. However, having only constituted 6% of total revenue in FY23, the stage might now be set for a solid result unobstructed by the dwindling segment.

Motley Fool contributor Mitchell Lawler owns shares of Sonic Healthcare Ltd.

Wesfarmers Ltd

What it does: Wesfarmers is one of the most dominant companies on the ASX. It owns a huge array of different retail and industrial businesses under its name, the most prominent of which include Bunnings, Kmart, Officeworks, and Target.

By Sebastian Bowen: Wesfarmers is a holding that I've been hoping to add to for a while now and just might after the company's latest earnings. I was very happy to see Wesfarmers report higher revenues, earnings, profits and dividends for the six months ending 31 December.

Given the rising cost of living and stubborn interest rates, I think this is a great result for a company that would traditionally be described as cyclical and discretionary.

As such, I would be happy to buy Wesfarmers shares if I had to choose just one company this earnings season. It's quality is on display for all to see.

Motley Fool contributor Sebastian Bowen owns shares of Wesfarmers Ltd.

CSL Ltd

What it does: CSL is one of the world's leading biotechnology companies and the name behind the CSL Behring, Seqirus, and CSL Vifor businesses.

By James Mickleboro: I think CSL delivered a strong half-year result this week. And were it not for the failure of the CS112 product key trial a day earlier, I think the market would have reacted very positively.

As a reminder, CSL reported an 11% increase in revenue to US$8.05 billion and a 13% jump in net profit after tax before amortisation (NPATA) to $2.06 billion. The latter was ahead of the market's expectations.

In addition, management reiterated its guidance for NPATA growth of 13% to 17% for the full year and its belief that CSL "is in a strong position to deliver annualised double-digit earnings growth over the medium term."

I'm confident that management will deliver on this even without CSL112, making CSL shares a very attractive proposition for investors, especially following this week's pullback.

Motley Fool contributor James Mickleboro owns shares of CSL Ltd.

The post If I could buy only one ASX stock this February earnings season, it would be… appeared first on The Motley Fool Australia.

This means that even finance journalists like me occasionally come across tickers that I'd never before.

It also means that, at any given time, there are plenty of good buys that you don't even realise they exist.

So with an open mind, take a look at the two stocks below that Glenmore Asset Management portfolio manager Robert Gregory is keen on.

They are both investment management companies, which is perhaps why they're not discussed much by experts from rival financial firms.

It's all a bit "meta":

The small-cap ASX shares 'ahead of our expectations'

Pacific Current Group Ltd (ASX: PAC) is reportedly a small team but has a pretty decent market capitalisation of $507 million.

The share price has risen 35% over the past 12 months, with a 7.4% boost in January alone.

Gregory attributed this to a business update late in the month.

"PAC released its quarterly funds under management (FUM) update, which was ahead of our expectations," he said in a memo to clients.

"PAC reported group FUM of $227 billion at 31 December 2023, up +6% over the December 2023 quarter."

The company's boutique private capital brands Pennybacker, Victory Park, and ROC Partners all performed strongly.

"PAC's guidance for FY24 is for total new commitments of $2 to $5 billion. Given $2.6 billion was delivered in the first half, the company is well placed for a strong FY24."

Despite the rocketing share price, the stock remains great value for those willing to buy now.

"PAC trades on an FY24 PE multiple of ~13x, which is very attractive in our view given the robust earnings outlook."

All six analysts agree on this one

Pacific Current owns a 4% piece of fellow investment house GQG Partners Inc (ASX: GQG), which Gregory and the Glenmore team is also bullish on.

The GQG share price also impressively rocketed 10.3% last month.

"GQG released a strong December 2023 funds under management (FUM) update, showing FUM increased from US$113 billion, end of November, to US$121 billion.

Again, notwithstanding a 37% lift in the stock price over the past 12 months, Gregory reckons GQG shares are still cheap.

"GQG continues to trade on a very attractive valuation and has a strong outlook for new inflows in 2024 given its outstanding track record across its various global equity funds."

Pleasingly, Gregory's peers unanimously agree.

According to CMC Invest, all six analysts covering GQG rate the stock as a buy right now.

The post 2 cheap and 'attractive' ASX shares to buy now that you've not thought of appeared first on The Motley Fool Australia.

As a general rule, we don't want to invest when a particular company is trading at a euphoric price. However, it's also worth keeping in mind that solid businesses that are growing have a good chance of delivering appealing capital returns over time – don't give up on a good business just because its share price is higher today than in October 2023.

Shares in the two ASX stocks below have already enjoyed significant lifts, and I think they can keep rising over the long term.  

Pacific Current Group Ltd (ASX: PAC)

Pacific Current describes itself as a "global multi-boutique asset management business committed to partnering with exceptional investment managers". The ASX share combines capital, offering uniquely-tailored economic structures, with strategic business development to help businesses grow.

Since 1 December 2023, the Pacific Current share price is up 21%. But I don't think this is going to be the all-time peak.

Its biggest investment is in the fund manager GQG Partners Ltd (ASX: GQG), which is growing funds under management (FUM) strongly and paying large dividends to Pacific Current.

Other fund managers include Astarte, Avante, Banner Oak, Carlisle, Cordillera, Pennybacker, Proterra and Victory Park.

Growth of Pacific Current's FUM can lead to rising management fees. The improving investment environment is good news for natural FUM growth, and I think investors are more likely to want to put new money into fund managers' hands.

In the three months to December 2023, Pacific advised that its aggregate FUM rose 5.6% in Australian dollar terms. Excluding GQG, FUM increased 4.5% for US dollar-denominated fund managers.

Pacific Current's ownership-adjusted FUM – adjusted for how much it owns of each business – rose from US$14.3 billion to US$15.3 billion.

In that quarterly update, the ASX share said its boutiques had made "strong progress" towards its projection of between A$2 billion to A$5 billion of gross new commitments, excluding GQG, in FY24, with A$2.6 billion of commitments already secured in the first half.

Xero Ltd (ASX: XRO)

I think Xero is one of the strongest ASX tech shares and an exciting ASX growth share.

It's already a very large ASX share, but the accounting software company has a lot more profit growth to come, in my opinion.

Over the last decade, it has been investing heavily for long-term growth. It's now letting its profit margins improve while still investing a very healthy amount for more growth.

Xero's underlying profitability could come shining through in the next few results, I'm expecting big increases in percentage terms of the net profit after tax (NPAT) and cash flow.

The HY24 result showed operating revenue growth of 21% to NZ$800 million, and the adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) grew a lot quicker – it increased 65% to NZ$204.5 million.

With the ASX share's gross profit margin now sitting at 87.5%, ongoing subscriber growth and an increasing average revenue per user (ARPU), I think there's a great chance of further longer-term price growth and potential Xero share price gains, despite the 39% rise over the last 12 months.

The post 2 soaring ASX shares I'd buy now with no hesitation appeared first on The Motley Fool Australia.

Higher interest rates have thrown up a lot of uncertainty for some sectors, like ASX retail shares. Lower share prices boost the dividend yield on offer, though the FY24 profit and payout could see declines. That's why I'm looking ahead to 2025 (meaning FY25), when economic conditions may be improving.

As an example, when a business has a 5% dividend yield and the share price falls 10%, the dividend yield becomes 5.5% and a 30% fall leads to a 6.5% dividend yield.

Adairs Ltd (ASX: ADH)

Adairs is a retailer of furniture and homewares through its Adairs, Focus on Furniture and Mocka businesses. Understandably, some shoppers are spending a bit less at these stores at the moment.

In the first 21 weeks of FY24, Adairs group sales fell by 9% year over year. But, the Adairs share price is down over 60% from June 2021. Teething issues at its new distribution centre has caused the dividend to be paused. But, at the current low Adairs share price, it could be a large dividend yield when dividends return.

The estimate on Commsec suggests Adairs could pay an annual dividend per share of 14.5 cents in FY25, which would be a grossed-up dividend yield of 11.5%. The ASX share is valued at 8 times FY25's estimated earnings.

The dividend is projected to jump again in FY26, but let's not get too ahead of ourselves.

Pacific Current Group Ltd (ASX: PAC)

Pacific Current is a business that invests in other funds management businesses and helps them grow. These fund management businesses are from around the world, so there's good diversification across Pacific Current.

The ASX share helps fund managers grow with its expertise and capital. The biggest fund manager in the portfolio is GQG Partners Inc (ASX: GQG), a long-term investment. But, there are several other growing businesses.

This ASX share trades on a low price/earnings (P/E) ratio, which is a natural boost for the dividend yield. 

In FY24, the business is expecting "substantial growth" in revenue and profit, with between $2 billion to $5 billion of new commitments, excluding GQG.

According to Commsec, the company could grow its annual dividend per share to 52.2 cents in FY25. This would be a dividend yield of 6%.

Reject Shop Ltd (ASX: TRS)

Reject Shop is a discount retailer that aims to provide "great value on everyday items" and wants to help "all Australians save money every day". It has a range of its own brands, including Cadbury, Tresemmé, Tontine, Nivea, Pepsi, Finish, Omo and Uncle Tobys.

The business reported good growth in FY23 (on a 52-week basis), with sales growth of 5.8%, earnings before interest and tax (EBIT) growth of 35.7% and net profit after tax (NPAT) growth of 63.4%. At the end of FY23, the ASX share had 380 stores, up from 369 at the end of FY22.

Reject Shop is seeing strong customer demand in FY24, so this could help revenue grow further and it also wants to grow its profit margins.

Commsec numbers suggest Reject Shop's earnings per share (EPS) could soar to 40.5 cents and fund an annual dividend per share of 24 cents. That puts the current Reject Shop share price at 13 times FY25's estimated earnings with a grossed-up dividend yield of 6.4%.

The post 3 ASX shares I'd buy today for big dividend income in 2025 appeared first on The Motley Fool Australia.

Ultimately, long-term investing is the way to go, and I think the below names are at such good value they're worth grabbing now for both the next two to three years and the long term.

Universal Store Holdings Ltd (ASX: UNI)

Universal Store is a retailer with premium youth fashion apparel brands for shoppers between the ages of 16 to 35.

The Universal Store share price is down 52% from November 2021, so today's price is much lower and cheaper. I think it can bounce back once the economy and the outlook improve.

The ASX share recently gave a trading update for the first 20 weeks of FY24 which said sales were up 14.7% year over year and underlying earnings before interest and tax (EBIT) was up $2 million year over year.

Ongoing store expansion makes me believe it can scale effectively and generate more profit in the future.

According to the estimates on Commsec, the Universal Store share price is trading at around 10 times FY25's estimated earnings with a projected grossed-up dividend yield of 9.1%. Those are attractive numbers in my eyes.

Pacific Current Group Ltd (ASX: PAC)

The main purpose of Pacific Current is investing in fund managers. It's invested in 16 boutique asset managers globally. It applies its strategic resources, including capital, institutional distribution capabilities and operational expertise, to help its partners excel.

Growth of funds under management (FUM) is a big help for underlying earnings and dividends. In FY23, management fees grew by 13%, or 22% in Australian dollar terms and ownership adjusted FUM increased by 9% (or 13% in Australian dollar terms).

In FY24, the ASX share is expecting "substantial growth in revenue and profit" and annualization of new investments. It's also expecting between A$2 billion to A$5 billion in new commitments.

According to Commsec, the Pacific Current share price is valued at 11 times FY25's estimated earnings with a projected unfranked dividend yield of 6%.

IGO Ltd (ASX: IGO)

IGO is a green-focused mining business, it owns and operates the Nova nickel-copper-cobalt operation, the Forrestania nickel operation and the Cosmos nickel operation.

It's also invested in a lithium-focused joint venture with partner Tianqi Lithium Corporation, which comprises a 51% stake in the Greenbushes lithium mine and a 100% interest in a downstream processing refinery at Kwinana producing battery-grade lithium hydroxide.

The IGO share price has sunk 44% since mid-July, which I think fully reflects the difficulties faced by both nickel and lithium at the moment.

I don't know when, or if, commodity prices can recover. But, I believe the long-term decarbonisation efforts will lead to greater demand. I think the best time to invest in cyclical names like this ASX share is when resource prices have sunk and there is no end in sight to the negativity.

The post 3 ASX shares I'd buy with $6,000 right now appeared first on The Motley Fool Australia.

Remember, though, that the future is unpredictable. And I wouldn't suggest deciding on investments based on a relatively short time period, like 12 months.

Looking at the bigger picture, 2023 has clearly been a strong year for ASX tech shares. Will 2024 be another good year for tech? Perhaps. But the market already appears to have returned to an optimistic outlook amid potential US Fed interest rate cuts in 2024. I'm not betting on tech being a strong performer in 2024 like I did 12 months ago.

February 2024 might be a very interesting reporting season for the ASX, and the 2024 US election will likely spark some fireworks. But, if we just focus on the companies and valuations today, I like the look of these ASX sectors.

Fund managers

The last couple of months have seen a strong rally in the share prices of some fund managers and I think most of 2024 will be positive as well. The outlook is improving, with interest rate cuts hopefully on the horizon and household confidence boosted as a result. This could lead to people investing more money with good investment managers.

The quality fund managers may be able to achieve net inflows from clients, and any growth of asset prices would also help funds under management (FUM).

In the ASX financial sector, I'm thinking that companies including GQG Partners Inc (ASX: GQG), Pinnacle Investment Management Group Ltd (ASX: PNI) and Pacific Current Group Ltd (ASX: PAC) look good to me.

I'm a little less certain about property fund managers from here because the impacts of higher interest rates are yet to fully flow through, particularly with debt costs. But, I think over two or three years, some property fund managers may be able to generate very good returns if interest rate cuts start happening.

ASX small-cap shares

I think the market hasn't fully appreciated the attractive opportunities on offer with smaller businesses. Maybe it's because smaller companies are seen as riskier. Maybe it's because some investors are still fearful of what might happen. Perhaps some small businesses aren't reporting good trading updates.

If I look at many of the valuations of S&P/ASX 200 Index (ASX: XJO) shares, I'd say many of them have recovered strongly from lows in 2022 or 2023 and don't look as good value as they did before. But, there are many more ASX small-cap shares that look attractive for the long-term, so this is an ASX sector I'd search for ideas.

Some of the ASX small-cap shares I like the look of include Close The Loop Ltd (ASX: CLG), Frontier Digital Ventures Ltd (ASX: FDV), Universal Store Holdings Ltd (ASX: UNI) and Airtasker Ltd (ASX: ART).

Online retailers

The impact of COVID-19 on retail is long gone – e-commerce ASX shares are no longer reporting results that compare against strong sales in 2021 or 2022.

Prior to COVID-19, online retailers were benefiting from the slow but steady adoption of online shopping, and those businesses were generally seeing improving scale and operating leverage.

I think companies that do a lot (or all) of their retailing online can perform strongly in 2024 – we're already seeing online sales perform well. For example, in the first few months of FY24, Coles Group Ltd (ASX: COL) and Temple & Webster Group Ltd (ASX: TPW) saw impressive growth in online sales.

I don't know if the Temple & Webster share price can keep growing in the short term, but sales could continue to do well. It could also be a good year for names like Accent Group Ltd (ASX: AX1) and Premier Investments Limited (ASX: PMV).

The post My prediction for the best-performing ASX sectors in 2024 appeared first on The Motley Fool Australia.

It's really useful when the share price of a dividend-paying business falls. Not only is the share price cheaper but it boosts the prospective dividend yield. For example, if a company with a dividend yield of 5% falls by 10%, the dividend yield becomes 5.5%. A company with a 7% yield that falls 10% has a 7.7% dividend yield.

Is this a once-in-a-decade chance to get rich?

A lot of share prices have bounced from lows seen in 2022, the middle of 2023 and the end of October. Just look at the Premier Investments Limited (ASX: PMV) share price graph below:

Not every company's chart looks like this, but it's a good demonstration.

While it is higher than what it was, the Premier Investments share price is still around 20% lower than where it was in November 2021.

I would say this period over the last 18 months has been a great time to invest and get a better valuation and yield, though it's not the lowest price of the past two years. But, there's no need to try to buy at the lowest price – only people with a functioning crystal ball know when share prices are going to move in the short term.  

This isn't necessarily the best time to buy ASX income shares, but it could still be a good time to invest for the long term in opportunities, which offer dividend yields higher than what we can get from a savings account.

I think it's always a good time to invest as long as we choose solid businesses with long-term futures at a good price.

Some ASX income shares I'd buy right now

There are some really good businesses that aren't trading close to 52-week highs which could offer really good dividend income over the long term, particularly from FY25 onwards.

Metcash Ltd (ASX: MTS) supplies various businesses around the country including IGA, Cellarbrations, The Bottle-O, IGA Liquor, Porters Liquor, Thirsty Camel and Duncans. It also owns the brands of Mitre 10, Total Tools and Home Timber & Hardware. According to Commsec, the ASX income share could pay a grossed-up dividend yield of around 8%.

Pacific Current Group Ltd (ASX: PAC) has invested in a portfolio of fund managers around the world who invest across various assets and could grow funds under management (FUM). Commsec numbers suggest it could pay an unfranked dividend yield of around 6% in FY25.

Duxton Water Ltd (ASX: D2O) owns a large amount of water entitlements which can be leased to agricultural operators on short-term or long-term contracts. I think it's a good way to invest indirectly in farming and the long-term growth of the water price. The next two guided dividends could amount to a grossed-up dividend yield of around 6.5%.

Accent Group Ltd (ASX: AX1) is an ASX income share I recently added to my own portfolio. It owns some shoe retail brands including The Athlete's Foot, Nude Lucy, Stylerunner and Glue Store. It also acts as the distributor for many other brands like Skechers, Ugg, Dr Martens, CAT, Kappa, Hoka and more. It's projected to pay a grossed-up dividend yield of around 10% in FY25.

Rural Funds Group (ASX: RFF) is a real estate investment trust (REIT) that owns various types of farmland including cattle, almonds, macadamias and vineyards. In FY24 it's guided to pay a distribution yield of around 6%.

The post ASX income shares: A once-in-a-decade chance to get rich? appeared first on The Motley Fool Australia.

ASX small-cap shares could still be an ideal hunting ground after various parts of the share market have rallied this year, or even in the last few weeks. Small businesses haven't seen that recovery in sentiment, for whatever reason.

But, just because a company hasn't performed well this year doesn't mean it's not going to in the future, whether that's regarding the share price and/or the financials. Here are two undervalued ASX shares I think are primed to perform in 2024.

Pacific Current Group Ltd (ASX: PAC)

Pacific Current is a business that takes stakes in investment managers from around the world, and helps them grow with expertise and some capital.

Some of its portfolio includes GQG Partners Inc (ASX: GQG), Victory Park, ROC Partners, Astarte and Pennybacker.

Fund managers are the types of businesses that can be very volatile – they can fall more than the market when the market goes down and rise more when the market goes up. That's because their funds under management (FUM) – a key input for earnings generation – will usually be impacted by whether share markets are going up or down in value.

Pacific Current's aggregate ownership-adjusted FUM has steadily grown over the last five years thanks to investment performance and FUM inflows.

With interest rates now (almost) at the peak, I think 2024 could see a recovery of investors contributing more money to the Pacific Current fund managers.

The estimate on Commsec suggests Pacific Current could generate earnings per share (EPS) of 70.2 cents and pay a dividend per share of 47.4 cents. This suggests the Pacific Current share price is valued at 12 times FY24's estimated earnings with an unfranked forward dividend yield of 5.6%. I think it's an attractive undervalued ASX share.

Reject Shop Ltd (ASX: TRS)

Reject Shop is a discount retailer that sells "high-quality private brands and sells products from Australia's most trusted brands including Cadbury, Tresemmé, Tontine, Nivea, Pepsi, Finish, Omo, Uncle Tobys" with a "single purpose in mind…to help all Australians save money." The company says it has around 380 locations.

I think the business is in a good position to help struggling households save money in the current environment – who doesn't like a bargain?

Reject Shop said at its annual general meeting that comparable store sales growth in the first 15 weeks "continues to be up on the prior corresponding period and is tracking" to the company's expectations. It's also working on growing its profit margin in FY24, despite inflationary pressures.

It's also expecting total sales growth in FY24 to be supported by new store openings – it's expecting to open 15 and close between eight to ten.

I think this is an undervalued ASX share – businesses with a low valuation that grow earnings can be attractive.

According to Commsec, it could generate 40.6 cents of EPS and pay a dividend per share of 22 cents in FY25. That puts the Reject Shop share price at 13 times FY25's estimated earnings with a potential grossed-up dividend yield of 6.1%.

The post 2 undervalued ASX shares I think are set for a bull run appeared first on The Motley Fool Australia.

The last few weeks have seen a strong recovery in a number of share prices. But, if there were to be another bear market, then there are a few names I'd definitely want to look at.

I'd guess the names below could see more share price pain than the S&P/ASX 200 Index (ASX: XJO) next time there's a crash because of the nature of the industries they are in. But I like their long-term outlooks.

Temple & Webster Group Ltd (ASX: TPW)

This is one of my favourite ASX retail shares. I like that it sells a vast number of furniture, homewares, and home improvement products. It's targeting very large addressable markets in Australia and aims to be number one in the online homewares and furniture space.

The ASX share is investing heavily in growth initiatives including AI customer service and interior design offerings, marketing, new product ranges, and so on.

Temple & Webster is expecting its profit margins to significantly rise as it scales. I think the market will send the Temple & Webster share price much higher as it proves its profit potential in the long term.

I like the tailwinds of the long-term adoption of online shopping and that Australia's growing population could help the company drive revenue growth.

If the Temple & Webster share price were to fall to around $5, I'd love to buy some more for my portfolio. It opened the trading week this morning at $6.55 a share.

Nick Scali Limited (ASX: NCK)

Nick Scali is another ASX retail share that I really like. It sells quality furniture from a national network of stores and it's aiming for growth in New Zealand as well. It also has an avenue of possible growth with the Plush business it recently bought.

It'd be understandable the average household is less likely to buy a Nick Scali sofa in 2024 than in FY22, given the run of interest rate rises and the increase in the cost of living.

However, weaker consumer demand and a lower Nick Scali share price could be a good time to invest because, in my view, it's the area of the economy that acts cyclically.

This is the type of business I'd like to buy in a stock market crash. It has great, long-term focused management, an excellent return on equity (ROE), a beneficial commitment to shareholder returns (including good dividends), and international store expansion (including the possibility of a UK move).

Commsec forecasts the ASX share could pay a dividend per share of 59 cents, which is a grossed-up dividend yield of around 7% at the current Nick Scali share price. It would be more if the valuation declined.

Pacific Current Group Ltd (ASX: PAC)

This is a business that invests in fund managers such as GQG Partners Inc (ASX: GQG), ROC Partners, Victory Park, Banner Oak, Astarte, Avante, and Aether.

It recently went through a strategic process that almost saw the business taken over, but there now seems to be no takeover happening. The Pacific Current share price has fallen 25% since 27 September 2023.

I think the company is invested in a strong group of managers that can collectively deliver growth over the longer term. The share prices of fund managers tend to be quite volatile because of how changes in the share market can affect funds under management (FUM), which then impacts earnings. However, I believe market declines can be an opportunity to look at good fund managers.

The post 3 ASX shares I want to buy if the stock market crashes again appeared first on The Motley Fool Australia.

Pacific Current owns stakes in fund managers from around the world and helps them grow through capital and expertise. GQG is one of its biggest investments, but now GQG is getting closer to acquiring the ASX All Ords stock.

GQG — a global fund manager headquartered in the United States — manages active equity portfolios. At 30 September 2023, it had US$105.8 billion of funds under management (FUM), with clients including large pension funds, sovereign funds, wealth management outfits and other financial institutions around the world.

Pacific Current shares in the spotlight

GQG advised the market today that it started participating in Pacific Current's strategic transaction process on 8 September 2023, submitting a non-binding indicative proposal to the company's independent board committee.

Meanwhile, rival fund manager Regal Partners Ltd (ASX: RPL) withdrew its takeover offer to buy Pacific Current a few weeks ago.

GQG confirmed that its proposal provided for a Pacific share price of A$11 cash offer per share through a scheme of arrangement — after the completion of due diligence.

GQG saw "significant strategic merit in a combination with PAC", adding it believed its bid for the ASX All Ords stock was an attractive outcome for Pacific Current shareholders.

Is the takeover a done deal?

Pacific Current updated the market yesterday, saying said the GQG offer represented "attractive value" for shareholders considering there was an implied premium of 56% to Pacific Current's undisturbed three-month average share price of $7.05.  

Pacific Current also revealed that GQG has engaged with Pacific Current's largest shareholder, River Capital, about securing its support for the deal in the absence of a superior proposal for the ASX All Ords stock. However, GQG hasn't yet been able to secure River Capital's support.

Share price snapshots

Since the start of 2023, the Pacific Current share price has risen by 33%, while the GQG share price has fallen by around 3%. Pacific shares closed 8.6% higher today at $9.95. GQG shares were up 1.9% at the close, trading at $1.34.

The post Guess which ASX All Ords stock has surged 8% on takeover news appeared first on The Motley Fool Australia.

The Pacific Current Group Ltd (ASX: PAC) share price is on fire today. Pacific Current shares closed at $7.80 each yesterday. But today, the company opened at $10.30 a share before climbing more than 36.5% to $10.65 – a new 52-week high for Pacific Current.

That's also the highest this All Ords share has traded at since 2015:

Right now, the shares have cooled off slightly, but are still up 32.56% at $10.34 a share.

Pacific Current is an ASX financials share that provides various services, including distribution and financing, to funds management companies and private equity firms.

So what's going on today that could have prompted such a dramatic revaluation of this All Ords share by the markets? 

Well, we don't have to look too far.

All Ords bidding war erupts for Pacific Current shares

This morning, Pacific Current confirmed that it has received an indicative takeover proposal. This proposal comes from GQG Partners Inc (ASX: GQG). GQG is a US-based asset manager that provides investment advisory and portfolio management services to pension funds, other fund managers, sovereign wealth funds and individual investors.

But that's not all. Yesterday, Pacific Current also informed investors that it has received a prior takeover proposal from another ASX All Ords share and investment management services company, Regal Partners Ltd (ASX: RPL). So this company is truly hot property right now, it seems.

We don't yet know what kind of offer GQG has put on the table for Pacific Current. But we do know that Regal's proposal valued Pacific Current at $10.77 a share, or $555 million all up.

Here's some of what GQG's CEO Tim Carver had to say on his company's offer:

We believe that we can put forward a compelling proposal to PAC shareholders, and that we will be viewe as strategically compelling to both PAC's underlying portfolio companies and management team.  We have a long history with PAC, both as executives and by virtue of our corporate relationship.

We have evaluated the PAC portfolio and have a strategic vision for unlocking value for PAC's shareholders and portfolio companies. We are confident in our transaction approach and will look forward to participating in the PAC transaction process.

Not to be outdone, here's some of what Regal CEO Brendan O'Connor told investors:

This proposal represents a transformational growth opportunity for both Regal and Pacific Current and one that we believe would create meaningful long-term value for both shareholders and clients.

A transaction would combine the scale, operational expertise and fundraising networks of Regal with Pacific Current's highly attractive and globally diverse portfolio of 'GP stakes' in leading alternative asset managers.

It represents another exciting step in our pursuit to be the leading provider of alternative investment strategies in Australia and Asia, and would capitalise on the continued growth in demand for high-performing, uncorrelated alternative investment strategies.

We believe this is a highly compelling proposal and look forward to engaging with the Board of Pacific Current to the benefit of both companies' shareholders, boutiques, clients and staff.

So All Ords investors seem to be gearing up for a potential takeover war here. This could result in an even higher takeover price being put on the table from either prospective buyer. If that were to happen, we could see the Pacific Current share price climb even higher from here. But let's wait and see what happens.

The post This ASX All Ords share just surged 30% on a takeover bid from GQG appeared first on The Motley Fool Australia.

Pacific Current is a company invested in a number of fund managers including GQG Partners Inc (ASX: GQG), Banner Oak, Victory Park, Astarte, Pennybacker, and ROC.

It has a different economic relationship with each fund manager, so the growth rate of funds under management (FUM) doesn't necessarily translate into the exact same growth rate for revenue or profit.

I'm going to look at three of the main reasons why I think Pacific Current is a better ASX dividend share than Commonwealth Bank.

Projected dividend yield

For starters, it has a much larger potential dividend yield.

According to Commsec estimates, in FY24, Pacific Current could pay a grossed-up dividend yield of 9.3%.

This compares to the current projected grossed-up dividend yield of just under 6% for CBA. Certainly, Pacific Current could pay a lot more passive income to shareholders for FY24.

The difference could be even more pronounced by the time we get to FY25. In FY25, the estimated numbers on Commsec imply that CBA's annual dividend could grow by 1.1% to a grossed-up dividend yield of just over 6%.

Pacific Current's FY25 annual payout could rise by 7.6% to a grossed-up dividend yield of 10%. Not only is its short-term yield stronger, but it could also grow faster than CBA shares.

Better valuation for the ASX dividend share

There are many different ways to value the businesses, but I think Pacific Current is a much better value ASX dividend share.

Pacific Current shares have a significantly lower price/earnings (p/e) ratio than CBA shares. Projected numbers on Commsec imply the CBA share price is valued at 18x FY24's estimated earnings, while Pacific Current is valued at under 11x FY24's estimated earnings.

Not only is the ASX dividend share at a much lower earnings multiple, but it also has the balance sheet to back it up.

All of its stakes in the fund managers have a value, as well as its other assets such as cash. It had a net asset value (NAV) of $9.93 per share at the end of the FY23 first half. That means the latest Pacific Current share price of $7.58 (at the time of writing) is trading at a discount of more than 20% to that NAV.

More growth potential

When it comes to ASX bank shares, I don't think there's significant growth potential in the lending space. Certainly, there is a lot of competition between lenders which is lowering profit margins. Plus, Commonwealth Bank is so big that it's hard to keep growing at a meaningful pace.

The global funds management space is a large industry and Pacific Current only needs to be invested in a few promising managers to do well. Fund managers are very scalable businesses – they don't require much extra capital to manage another $100 million, so any growth is helpful.

I think the ASX dividend share can continue to deliver attractive growth of its earnings as it expands its own portfolio of fund managers, and the underlying fund managers deliver aggregate FUM growth themselves.

The post I'd buy this ASX dividend share over CBA shares for its 9% yield appeared first on The Motley Fool Australia.

Australian companies that pay income tax generate refundable franking credits, which can be attached to dividends paid to shareholders. Australian tax residents can then benefit from the payments because franking credits boost shareholders' tax positions by lowering the taxes owed or creating a tax refund.

For Australians looking to boost their passive income, ASX shares that pay dividends with franking credits could be attractive.

How much can franking credits help?

Franking credits also give Aussie tax residents a boost to their dividend yields, although the after-tax benefit will depend on the individual's tax rate.

For example, if a $70 fully franked dividend is the only taxable income that someone received in the year, they would be in the 0% tax bracket. The $70 dividend is a cash payment, and there would be $30 of franking credits, resulting in $100 of total taxable income.

That person would get the $70 cash dividend and a full $30 tax refund when they do their tax return. That's extra money that investors in other countries simply don't receive. Lucky us!

For people in the 19% tax bracket, only some of the franking credits would be refunded, because a portion would be used to pay the taxes charged on the dividend and franking credits. Franking credits count as taxable income as well.

For taxpayers in a high tax bracket, the franking credits are useful because they reduce the amount of taxes owed. For high-income earners, I'd suggest that high-yield ASX dividend shares are less effective because a significant portion of the annual return is lost to tax.

How to maximise the passive income

To get more ASX franking credits, we need to look at businesses that have higher dividend yields. Assuming the dividends are fully franked, then the higher the cash yield, the more franking credits Aussies will get.

I'll stress that it's important not just to buy a business for its dividend yield. Dividends can be reduced, or cut entirely. The business valuation and earnings outlook need to make sense for any share we're buying.

For example, New Hope Corporation Limited (ASX: NHC) shares are projected to pay an annual dividend per share of 73 cents in FY23 according to Commsec. This translates to a cash yield of 15% and a grossed-up dividend yield of 21.9%, including the franking credits.

However, the coal miner's annual dividend per share could then fall to 36.5 cents per share. This would represent a grossed-up dividend yield of 11% — essentially a halving of the dividend. I'm not sure about the long-term outlook for coal miners as the world decarbonises, though they are making strong profits now.

ASX dividend shares that could pay sustainable passive income

No dividend (or ASX franking credit) is guaranteed, and the current economic situation is increasing uncertainty.

If I were to look at some names that have relatively high yields today and could keep maintaining the payment or even growing the dividend, according to Commsec, here are some examples:

ASX retail share Shaver Shop Group Ltd (ASX: SSG) has a plan to grow its dividend and could pay a grossed-up dividend yield of 15% in FY24.

Private health insurer Medibank Private Ltd (ASX: MPL) could pay a grossed-up dividend yield of 6.6% in FY24.

Bunnings and Kmart owner Wesfarmers Ltd (ASX: WES) could pay a grossed-up dividend yield of 5.7% in FY24.

Supermarket business Coles Group Ltd (ASX: COL) might pay a grossed-up dividend yield of 5.4% in FY24.

Fund manager investor Pacific Current Group Ltd (ASX: PAC) could pay a grossed-up dividend yield of 10% in FY24.

The post How can I maximise my ASX franking credits in FY24? appeared first on The Motley Fool Australia.

There aren't any ASX shares that pay dividends weekly to investors, so we're aiming for an annual target of $10,400. While this isn't a quick project, over time I think it's certainly possible.

For starters, Aussies need to be able to achieve enough spare cash flow in their personal finances to invest regularly. Here are the next steps:

Buy into quality ASX shares

If I'm building towards a long-term passive income goal, I'm not going to go for weak businesses.

I'd like to buy a small slice of ASX shares that have demonstrated a good dividend record, want to continue rewarding shareholders with growing dividends, and operate in attractive industries where they have good long-term growth potential.

It doesn't mean that the companies have to shoot the lights out, just deliver solid long-term compounding growth.

Dividend growth

I only like to look at businesses that seem like they're going to grow dividends for the foreseeable future.

Whether inflation is high or low, it still eats into the value of a dollar, so protecting and growing our income stream is important.

I also think it's important to find businesses that are growing their dividends because it's a sign the company's board is confident about the future. When economic times are tough, I'd want a high degree of confidence that my income is going to keep coming. Certainly, a cut during that time could be difficult.

Dividend yield

Shares can provide capital growth and passive income. I think a mix of both is a good idea for total returns, although it depends on what investors are looking for.

Aussies who generate taxable income of more than $45,000 are taxed at a rate of 32.5% (plus the 2% Medicare levy), so receiving huge dividend yields may not make the most sense if a third (or more) of passive income is being lost to tax.

For Aussies in a lower tax bracket — or no tax bracket — higher dividend yields make more sense.

Which ASX dividend shares I'd pick for passive income

For lower dividend yields, I'd go for names like investment conglomerate Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), diversified property and investment business Brickworks Limited (ASX: BKW), global pathology company Sonic Healthcare Ltd (ASX: SHL), and energy infrastructure business APA Group (ASX: APA).

Each of the above businesses has grown their passive income payments for at least a decade, and have dividend yields ranging between 3.4% to 5%. But, of course, dividend growth is not guaranteed.

In terms of higher-yielding ASX dividend shares, there are some names that have the intention to pay investors a high level of dividends, though they may not increase every single year.

In this category, I like Bunnings owner Wesfarmers Ltd (ASX: WES), IGA supplier Metcash Ltd (ASX: MTS), Rural Funds Group (ASX: RFF), fund manager GQG Partners Inc (ASX: GQG), fund manager investor Pacific Current Group Ltd (ASX: PAC), and retailer Shaver Shop Group Ltd (ASX: SSG).

For example, Wesfarmers could pay a grossed-up dividend yield of around 5.5% in FY24, while Shaver Shop might pay a grossed-up dividend yield of more than 14% in FY24. Others in this group might pay a yield of between 7% to 10% in FY24, according to Commsec estimates.

Foolish takeaway

The yield of businesses we're looking at will determine the size of the portfolio we need to generate $200 of weekly passive income, or $10,400 of annual income.

A dividend yield of 4% would require a portfolio worth $260,000. But, if the portfolio had a grossed-up dividend yield of 8%, then we'd only need $130,000. A mixture of regular investment, dividend re-investment, and benefiting from compounding can help achieve the passive income goal.

The post My $200 weekly passive income plan using ASX shares appeared first on The Motley Fool Australia.

With interest rates now so much higher, savers can now get a very good return from term deposits and online savings accounts. So, income investors should aim for a good yield considering they can get risk-free returns of around 5%.

With that in mind, if I were trying to build a high-yield portfolio for passive income, the below four are the ASX shares I'd choose.

Shaver Shop Group Ltd (ASX: SSG)

Shaver Shop is a seller of a variety of hair removal products across more than 120 stores. It also sells products across a growing variety of other areas including oral care, hair care, massage, air treatment and beauty categories.

The company has grown its annual dividend per share each year since 2017. Commsec numbers suggest that the ASX dividend share could pay a grossed-up dividend yield of 15.75% in FY24, and it's trading at 8 times FY24's projected earnings.

I think that hair removal is a fairly defensive retail category, so Shaver Shop's earnings can hold up better than most retailers over the next 12 months. It has no debt and had cash of $34 million at December 2022. It's in a strong position to keep paying passive income.

It can retain and grow profit through store network expansion across ANZ, grow its brand awareness and sell more products exclusive to Shaver Shop.

GQG Partners Inc (ASX: GQG)

GQG is one of the largest fund managers on the ASX, with US$98.5 billion of funds under management (FUM) as at 31 May 2023.

Its main investment strategies have displayed outperformance against its benchmarks. That's likely one of the reasons why GQG has been able to achieve net inflows of US$5.9 billion in the first five months of 2023.

This combination of good performance by the existing FUM, plus inflows of new FUM, should be a natural boost for earnings and the dividend over time.

GQG has committed to pay 90% of its distributable earnings as a dividend to shareholders. Commsec numbers suggest it could pay a dividend yield of 9.5%.

Pacific Current Group Ltd (ASX: PAC)

Pacific Current is a fund manager that invests in other fund managers around the world. It actually owns a stake in GQG, but it is also invested in others including Aether, Banner Oak, Carlisle, Proterra and Astarte.

The ASX dividend share helps the fund manager grow, with capital, "institutional distribution capabilities and operational expertise."

The company is seeing a steady rise in its aggregate FUM. Excluding GQG, its 'boutiques' have received A$9.4 billion of new capital commitments since 1 July 2021 and A$4.5 billion from 1 July 2022.

Pacific Current has grown its dividend each year since 2018. Growth of FUM should help the business continue to grow its passive income.

Commsec numbers suggest that the company could pay a grossed-up dividend yield of 10.2% in FY24.

Metcash Ltd (ASX: MTS)

Metcash is a business that supplies a number of businesses including IGA, IGA Liquor, Bottle-O, Cellarbrations, Thirsty Camel and Porters Liquor. It's also the owner of the brands Mitre 10, Home Timber & Hardware and Total Tools.

I believe that food and liquor are defensive retailing categories that can provide Metcash with resilient earnings over the 12 months and beyond. The hardware category may face a little more uncertainty, but I think it can continue to do well and enable Metcash to keep paying large dividends.

The ASX dividend share has a dividend payout ratio policy of around 70% of underlying net profit. Commsec numbers suggest it's going to pay a grossed-up dividend yield of 7.9% in FY24.

I believe that Australia's growing population will be a useful tailwind in the coming years for Metcash's earnings and passive income.

Foolish takeaway

If I invested $5,000 into each of these businesses, I'd get an average dividend yield of 10.8%, which would be a total gross passive income of $2,160 in FY24, based on the dividend estimates.

The post How I'd invest $20,000 to generate $2,000 yearly passive income appeared first on The Motley Fool Australia.

It hasn't been a great year for many of the ASX's biggest blue chips.

The largest ASX miners have seen difficulties – the BHP Group Ltd (ASX: BHP) share price has dropped 2.7% in 2023 to date, while the Fortescue Metals Group Ltd (ASX: FMG) share price is only up 0.6%.

Some of the largest ASX banks are down as well.  The Westpac Banking Corp (ASX: WBC) share price is down 10.7% in 2023 so far, while the National Australia Bank Ltd (ASX: NAB) share price is 12.75% lower.

How have other share markets performed?

The benchmark S&P/ASX 200 Index (ASX: XJO) is only up 2.8% in 2023 to date. Conversely, it has been a strong year for the US share market with the iShares S&P 500 ETF (ASX: IVV) up by 14%.

The UK share market has also done much better. The Betashares FTSE 100 ETF (ASX: F100) is up 9.5% in 2023 so far. Over the same period, the Vanguard FTSE Asia Ex-Japan Shares Index ETF (ASX: VAE) is up 5%, the Vanguard FTSE Europe Shares ETF (ASX: VEQ) is up 12%, and the Betashares Japan ETF-Currency Hedged (ASX: HJPN) is up 30%.

Part of the explanation may be that the ASX 200 simply fell less during 2022 and these markets are recovering more strongly. But it raises the question of whether ASX stocks are actually cheap.

The financial outfit Goldman Sachs has suggested the underperformance isn't justified because the Australian government policy is "pro-growth", which will support higher wages and spending, according to reporting by the Australian Financial Review.

Head of Australian equity research at Goldman Sachs Matthew Ross (quoted by the AFR) said:

We find this soft relative performance somewhat surprising. On top of a macro backdrop that we view as being more supportive than many other developed economies, the bottom-up picture remains robust.

My view on cheap ASX shares

I'd put the underperformance down to global share markets recovering from last year, and weakness for the ASX 200's two biggest areas – iron ore mining and banking.

The mining decline makes sense because the iron ore price has dropped, while the banking drop has occurred amid strong competition for mortgages and deposits.

I wouldn't say those names are cheap, although they're probably at a fair price now because of the current circumstances.

There are also other areas I think could be cheap on a long-term outlook.

On the resources side of things, I think copper is going to see higher demand in the future due to decarbonisation, so there are ASX copper shares I'd look at.

Retail, particularly discretionary, strikes me as cyclical, so I think that sector is a good hunting ground to find shares that have dropped, such as Wesfarmers Ltd (ASX: WES) and Adairs Ltd (ASX: ADH). These shares could recover on a three-year horizon once this period passes.

I also believe some fund managers are being undervalued and could bounce back if asset prices start rising, such as GQG Partners Inc (ASX: GQG), Pinnacle Investment Management Group Ltd (ASX: PNI), Pacific Current Group Ltd (ASX: PAC), and Australian Ethical Investment Ltd (ASX: AEF).

Finally, there are some unloved smaller businesses that I think are demonstrating strong revenue growth, such as Volpara Health Technologies Ltd (ASX: VHT), Siteminder Ltd (ASX: SDR), and Frontier Digital Ventures Ltd (ASX: FDV).

The post Are we in the middle of a once-in-a-lifetime chance to buy cheap ASX shares? appeared first on The Motley Fool Australia.

Businesses that have a low price/earnings (P/E) ratio and/or have a particularly high dividend payout ratio can have a large dividend yield.

Investors should ensure that if they're going for a dividend yield, the underlying business has a good future and the valuation makes sense. The following two names could pay large yields in FY23 and beyond.

Adairs Ltd (ASX: ADH)

Adairs is a business that sells furniture and homewares through three different brands – Adairs, Mocka and Focus on Furniture.

The business is expected to pay a very large dividend yield in FY23. Estimates on Commsec suggest that the ASX dividend share could pay an annual dividend per share of 16.8 cents in FY23 and 19 cents per share in FY24. This could mean the grossed-up dividend yield for FY23 may be 10.6% and the FY24 grossed-up dividend yield might be 12%.

This business has seen plenty of volatility over the past two years. But, after dropping around 50% since June 2021, the business is now on a very low valuation in terms of its P/E ratio.

It might generate 27.2 cents of earnings per share (EPS) in FY23 and then 30 cents of EPS in FY24, according to Commsec. These forecasts put the Adairs share price at 8 times FY23's estimated earnings and under 8 times FY24's estimated earnings.

The ASX dividend share is aiming to grow its profit through opening new stores, upsizing some stores to bigger locations (which are more profitable), growing its loyalty member base and increasing its online sales.

Pacific Current Group Ltd (ASX: PAC)

Pacific Current describes itself as a multi-boutique asset management business. It uses its strategic resources, including capital, institutional distribution capabilities and operational expertise to help its partners excel.

In other words, it invests in fund managers around the world to help them grow. One success story has been GQG Partners Inc (ASX: GQG) which grew into one of the biggest fund managers on the ASX. Some of the fund managers that it's invested in include Aether, Banner Oak, Carlisle, Proterra and Victory Park.

Pacific Current has grown its dividend each year since 2018 and dividends are expected to keep rising for the years to come, according to Commsec. The FY23 dividends per share could be 41 cents and 46.5 cents per share in FY24.

These estimates suggest that the ASX dividend share could pay a grossed-up dividend yield of 8.1% in FY23 and 9.2% in FY24.

The underlying fund managers are seeing growth of funds under management (FUM), which can then help revenue, earnings and the dividend. In the three months to 31 March 2023, aggregate FUM grew 6.9% in Australian dollar terms. It continues to make the occasional investment into another fund manager, opening up another avenue of growth for the business.

Assuming asset markets keep growing over the long term, as they have in the past, this is a useful organic boost for the ASX dividend share's ability to make a profit and pay dividends.

The post 2 ASX dividend shares with seriously huge payouts appeared first on The Motley Fool Australia.

For investors who haven't heard of this business before, it describes itself as a multi-boutique asset management firm. It applies resources, including "capital, institutional distribution capabilities and operational expertise", to help its partners grow. In other words, it invests in compelling fund management businesses and aims to help them expand.

It's invested in a number of different managers, including GQG Partners Inc (ASX: GQG), Astarte Capital Partners, Banner Oak, Aether, Roc Partners, Victory Park, and Cordillera.

The company has been building a track record of paying dividends to investors. It grew its dividend each year between FY18 to FY22. Time will tell whether FY23 includes an increase, but the projections on Commsec are currently promising for growth.

Potential for $1,000 of passive income a month

Pacific Current could pay an annual dividend per share of 41 cents in FY23, representing a potential increase of almost 8% compared to the FY22 annual payment. At the current Pacific Current share price, that potential payment represents a grossed-up dividend yield of 8%.

The All Ords ASX stock doesn't pay a monthly dividend. But we can take the annual dividends and divide that amount into 12 equal parts.

Just using the cash element of the dividend, and ignoring the franking credits, to get $12,000 of annual dividends with the 2023 annual payout, we'd need to own 29,269 Pacific Current shares. The Pacific Current share price at the time of publishing is $7.11, so that would represent a hefty investment of $208,000.

However, the dividend payout is expected to rise in FY24 to 46 cents per share. This would make the forward grossed-up dividend yield around 9%. Thinking about that passive income payment, it would mean an investor would only need to own 26,087 Pacific Current shares. That equates to a slightly more modest investment of $185,500.

Can the ASX All Ords stock deliver dividend growth?

I think that Pacific Current is demonstrating some of the right attributes to deliver growth.

In its FY23 half-year result, it reported that the funds under management (FUM) of its investment partners grew by 3.5% to A$175 billion, while underlying earnings before interest, tax, depreciation and amortisation (EBITDA) grew 35% in Australian dollar terms.

The business is expecting growth in both management fees and performance fees, thanks to fund managers raising capital from investors, or having already recently deployed capital. Also, a number of funds or strategies are nearing the point of generating performance fees that will benefit Pacific Current.

On top of that, new commitments and inflows are expected to continue, while additional investments are also expected. Pacific Current recently announced its investment in the fund manager Cordillera.

Once interest rates stop increasing, this could be a natural boost for the ASX All Ords stock, the passive income it can generate, and the underlying fund managers.

The post Want $1,000 in monthly passive income? Buy 29,270 shares of this ASX All Ords stock appeared first on The Motley Fool Australia.

But, investors shouldn't chase a high dividend yield just for the sake of it. If a business isn't able to maintain (or even grow) earnings, then I think that the dividend is in danger of being cut.

So, with that in mind, I'd only want to choose businesses that look like they can achieve earnings per share (EPS) growth. This would achieve both good dividend income and hopefully some share price growth over the long term as well.

I think businesses that are in a good industry, with consistent demand, and are re-investing for growth, can lead to attractive dividend returns.

ASX dividend shares that could make $1,600 of dividend income from a $20,000 ASX share portfolio

To get that sort of income level, we're talking about an average yield of 8%. So, let's split the money across four investments.

I'd start with the ASX share Shaver Shop Group Ltd (ASX: SSG), one of the largest retailers of all things related to hair removal. Even in a downturn, I think the company will still see decent demand – our hair doesn't stop growing just because the economy is faltering. An ongoing store rollout can help earnings grow.

The ASX share's EPS and dividend are expected to rise in FY24 and FY25, while the FY23 grossed-up dividend yield is predicted to be 14.3%, according to Commsec.

Pacific Current Group Ltd (ASX: PAC) is an investment manager that invests in other fund manager businesses and helps them grow. Its portfolio of managers around the world is diverse, and it includes a stake in GQG Partners Inc (ASX: GQG). Pacific Current is expecting to make more investments, while its current fund managers could see further funds under management (FUM) growth.

According to Commsec, the ASX dividend share could pay a grossed-up dividend yield of 8.7%.

Next, it's hard to miss Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) as a dividend-focused investment. It has grown its ordinary dividend every year since 2000, thanks to its defensively-positioned investment portfolio. But, that portfolio keeps growing as the business re-invests some cash flow into more opportunities.

Its last two ordinary dividends amount to a grossed-up dividend yield of 3.8%.

Wesfarmers Ltd (ASX: WES) is the parent business of a number of Australia's leading businesses including Bunnings, Kmart, Officeworks and Wesfarmers chemicals, energy and fertilisers (WesCEF). It is building platforms of growth, and it's opening new growth avenues including in lithium, and beauty and health.

It aims to grow the dividend over time for shareholders, and Commsec numbers suggest it's going to pay a dividend yield of 5.3%.

Foolish takeaway

Between these four ASX share names, the average yield is just over 8%, generating the required $1,600 of passive dividend income from a $20,000 investment.

I think these names can produce growing dividend income, growing earnings and hopefully some long-term share price growth as well.

But, they're not the only ones that could deliver good dividends.

The post $1,600 annual dividend income from a $20,000 ASX share portfolio? Here's how appeared first on The Motley Fool Australia.