But a warning, you will have to move fast!

These four shares will all be going ex-dividend this week. Once that happens, the rights to these dividends are locked in and new buyers won't be eligible to receive the payout when pay day comes around.

Let's see which shares are going ex-dividend and what they are offering income investors:

Amcor (ASX: AMC)

Packaging giant Amcor released its first quarter update earlier this month and declared an unfranked dividend of 19.19 cents per share. This is the equivalent of a 1.2% dividend yield based on where the ASX All Ords share trades today.

Amcor's shares will be going ex-dividend for this on Wednesday, which means that investors have until the end of today's session to snap up its shares. Pay day will then be coming next month on 11 December.

Analysts are largely sitting on the fence with the company. Citi is the most optimistic of the major brokers with its neutral rating and $17.00 price target. This compares to its current share price of $15.65.

Infratil Ltd (ASX: IFT)

This New Zealand–based infrastructure investment company's shares are scheduled to go ex-dividend on Wednesday as well.

The company recently released its half year results and declared an interim unfranked dividend of 5.6 cents per share. This will be paid to shareholders on 10 December.

Earlier today, Jarden put an overweight rating and NZ$12.70 (A$11.49) price target on its shares. This implies modest upside from its current share price of A$11.16.

Orica Ltd (ASX: ORI)

Investors have until Thursday to buy this ASX All Ords share before it goes ex-dividend on Friday.

Last week, this commercial explosives company released its full year results and declared an unfranked final dividend of 28 cents per share. This represents a 1.5% dividend yield at current levels. It will be paid to eligible shareholders just before Christmas on 23 December.

Analysts at Morgan Stanley think buying Orica's shares could be a good idea. Last week, the broker put an overweight rating and $22.50 price target on them. This implies potential upside of over 20%.

Terracom Ltd (ASX: TER)

A fourth ASX All Ords share that is due to go ex-dividend soon is Terracom.

The coal mining company recently released its quarterly update and declared a fully franked 1 cent per share quarterly dividend. This represents a generous 4.5% dividend yield at current prices.

Terracom's shares will go ex-dividend for this on Thursday. After which, it plans to pay it to eligible shareholders on 6 December.

None of the major brokers cover Terracom.

The post 4 ASX All Ords shares with ex-dividend dates this week appeared first on The Motley Fool Australia.

In fact, some ASX All Ords shares are offering yields more than triple that. But that doesn't mean they will turn out to be screaming buys today though.

If you think a 6% yield is attractive, then no doubt the Horizon Oil Ltd (ASX: HZN) share price will draw your eye. Right now, this small ASX All Ords oil share offers a trailing dividend yield of 14.4%. And that's after the 6% or so jump we have seen with this company's shares this Monday.

But that's just the start.

What are the highest-yielding ASX All Ords shares offering today?

We also have Abacus Group (ASX: ABG) to look at. Abacus shares offer investors a dividend yield of 16.88% right now.

There's the BSP Financial Group Ltd (ASX: BFL) share price to consider as well. At present, BSP shares have a dividend yield of 18.1% on the table.

That's topped by coal share Yancoal Australia Ltd (ASX: YAL). Today, Yancoal shares are displaying a dividend yield of 21.62%. That's almost mirrored by the Base Resources Ltd (ASX: BSE) share price, with its yield of 22.7%.

It gets even better.

Sunland Group Ltd (ASX: SDG) shares are exhibiting a dividend yield of 32.98% at present. And not to be outdone, Terracom Ltd (ASX: TER) shares are at the top of the ASX All Ords pile right now when it comes to dividend yield, displaying a frankly ridiculous yield of 44.49% today.

I'm sure that was a lot to take in. The prospect of receiving a cash yield of 44.49% on your money every year is a salivating prospect to be sure.

But, as I'm sure you're sensing, there are a lot of caveats here to discuss.

When is a dividend too good to be true?

A company's dividend yield reflects the past, not the future. No ASX All Ords share is under any kind of obligation to continue one year's dividend the next. It could double it, halve it or eliminate it altogether. A company's dividends from year to year are entirely at the discretion of its management.

Let's look at Terracom's dividend as an example. The first thing to note is that Terracom's monstrous 44.49% dividend yield is no mistake. Over the past 12 months, the ASX coal share has paid out two dividends, worth 3 cents and 7.5 cents per share respectively. That total of 10.5 cents per share gives Terracom a trailing dividend yield of 44.49% at the current share price of 47 cents.

However, a company's dividend yield is just as dependent on its share price as its raw dividends per share. And a large contributor to this massive dividend yield is the Terracom share price's near 55% loss over the past 12 months. The lower an ASX All Ord's share price, the higher its trailing dividend yield will be.

ASX resources and energy shares in particular have nororiously volatile dividends. That's because their ability to fund their dividends is entirely dependent on external factors – namely the prices of the commodities they sell.

It's clear that investors are expecting coal prices to come down significantly from the record highs we have seen over the past two years. That's why Terracom joins Yancoal in having both high trailing dividend yields, and huge share price losses over the past 12 months.

Foolish takeaway

If you sift through the shares listed above, you'll probably find the good reason why the markets are pricing these companies at low levels right now, which is helping to push their dividend yields to the rather implausible levels we are seeing. It's a good indication that most investors aren't expecting the recent dividends we have seen with these companies to continue for much longer.

Now, it's entirely possible that the markets are getting at least one of these companies' prospects wrong, and that investors will continue to enjoy huge income from any of these shares.

But investors have to ask themselves what they know that the market doesn't. There's a high chance that buying into these shares right now is nothing more than a dividend trap.

The post Where can investors find the highest dividend yields among ASX All Ords shares? appeared first on The Motley Fool Australia.

When an ASX share trades ex-dividend, it separates those investors who are eligible for a dividend payment from those who won't be. Put simply, if you own the shares before the ex-dividend date, you will get the dividend. If you buy the shares on or after the ex-dividend date, you miss out.

That's why we tend to see a company that trades ex-dividend take a share price tumble when this eligibility is closed – reflecting that loss of value.

So without further ado, let's talk about the two ASX 300 shares that will go through this process this week.

2 ASX 300 income shares trading ex-dividend this week

Terracom Ltd (ASX: TER)

First up is ASX 300 coal miner Terracom. Terracom is scheduled to pay out its latest dividend on 27 June. The payment will be worth 3 cents per share, fully franked. But investors have until the end of trading tomorrow to buy shares if they wish to receive this dividend, with Terracom set to go ex-dividend on Thursday 8 June.

This latest dividend represents a significant cut in shareholder income for Terracom investors. The company is a rare ASX share that pays dividends quarterly. This latest payment is a 60% drop from the 7.5 cents per share payout shareholders enjoyed back in March. Terracom shares currently have a stupendous trailing dividend yield of 44.66%.

ALS Ltd (ASX: ALQ)

Next up, we have ASX 300 testing and inspection services company ALS. ALS only announced its latest dividend payment at the end of last month. Investors can expect to receive a 19.4 cents per share final dividend payment on 6 July. This payment will only come partially franked at 10%. The ex-dividend date is set for this Friday, 9 June.

This dividend is a small drop from the interim payment of 20.3 cents per share that investors enjoyed back in December. However, it is a big improvement over last year's final dividend, which came in at just 5.1 cents per share.

ALS shares currently have a trailing dividend yield of 2.89%.

The post 2 ASX 300 shares trading ex-dividend this week appeared first on The Motley Fool Australia.

Four ASX shares that are falling more than most today are listed below. Here's why they are dropping:

Aroa Biosurgery Ltd (ASX: ARX)

The Aroa Biosurgery share price is down 7% to 94 cents. This morning this medical device company released its full-year results. Aroa Biosurgery reported a 55% increase in product revenue to NZ$60.5 million but a loss before tax of NZ$0.9 million. Management is guiding to product revenue of NZ$72 million to NZ$75 million in FY 2024.

Bank of Queensland Ltd (ASX: BOQ)

The Bank of Queensland share price is down 5% to $5.49. This follows news that the regional bank has entered into a voluntary enforceable undertaking with APRA. This will address remediation of weaknesses in the bank's risk management practices, controls, systems, governance and risk culture.

Champion Iron Ltd (ASX: CIA)

The Champion Iron share price is down 2% to $5.98. Investors have been selling this iron ore miner's shares following the release of its full-year results. Champion Iron reported revenue of C$1,395.1 million and EBITDA of C$493.2 million. Goldman Sachs was expecting EBITDA of C$496 million.

Terracom Ltd (ASX: TER)

The Terracom share price is down 6% to 48.5 cents. This morning, this coal miner announced plans to pay a 3 cents per share fully franked dividend for the three months ended 31 March. Investors may have been hoping for a larger dividend given that it has already paid 17.5 cents per share for the first half of FY 2023.

The post Why Aroa Biosurgery, Bank of Queensland, Champion Iron, and Terracom shares are falling 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.

Queensland coal producer Terracom Ltd (ASX: TER), managing director Daniel McCarthy, chief commercial officer Nathan Boom, former chair Wallace King, and former director Craig Ransley are all facing civil action in the federal court for allegedly breaching whistleblower laws.

The Terracom share price is currently down 1.32% in early afternoon trading on Wednesday after dropping more than 5% in the morning.

Terracom allegedly trashed whistleblower's reputation, psychological state

The allegations concern the company's treatment of a whistleblower back in 2020.

"ASIC alleges that TerraCom and its senior company employees engaged in conduct that harmed a whistleblower who revealed the alleged falsification of coal quality certificates," stated the corporate regulator.

Terracom posted two announcements to the ASX on 14 February 2020 and 3 April 2020 and published an open letter to shareholders in major newspapers on 12 March 2020. 

Those memos refuted the whistleblower's claims and stated the company had an independent enquiry completed.

"ASIC alleges that Mr McCarthy, Mr Boom (who was chief financial officer at the relevant time), Mr King and Mr Ransley, who were all members of TerraCom's disclosure committee, failed to take reasonable steps to ensure statements to the ASX were not false or misleading," stated ASIC.

"ASIC also alleges that, by allowing the false or misleading statements to be published, TerraCom, Mr McCarthy, Mr Boom and Mr Ransley engaged in conduct that caused detriment to the whistleblower's reputation, earning capacity and psychological and emotional state."

ASIC will be suing for declarations of contravention, financial penalties, disqualification orders, and recovery of legal costs.

Terracom, through an announcement to the ASX on Wednesday, acknowledged the court case.

"The company has lawyers engaged and will vigorously defend the proceedings."

First time ASIC sues for whistleblower law breaches

ASIC deputy chair Sarah Court called the legal action against Terracom historically "significant".

"It is the first time ASIC has taken action for alleged breaches of the whistleblower provisions," she said.

"Whistleblowers perform a vital role in identifying and calling out corporate misconduct. We take any indication that companies are engaging in conduct that harms or deters whistleblowers very seriously."

Back in August 2021, Terracom started legal action in the federal court to stop ASIC from reviewing the independent report compiled by PricewaterhouseCoopers more than a year earlier. The document had been seized during a search warrant executed at Terracom's offices in March that year.

Last September, the full federal court ordered the company to release the report with court-approved redactions.

The post ASIC is suing this ASX company and execs. Why? appeared first on The Motley Fool Australia.

Four ASX shares that have failed to follow the market higher are listed below. Here's why they are dropping:

Fisher & Paykel Healthcare Corp Ltd (ASX: FPH)

The Fisher & Paykel Healthcare share price is down almost 3% to $23.68. This appears to have been driven by a broker note out of Citi this morning. Its analysts have downgraded the medical device company's shares to a neutral rating on valuation grounds following a strong run over the last three months.

Netwealth Group Ltd (ASX: NWL)

The Netwealth share price is down a further 1.5% to $12.20. Investors have been selling the wealth management platform provider's shares since the release of a trading update last week. Netwealth reported a significant slowdown in its net inflows. They came in at $2,087 million during the second quarter, which was down 42% on the prior corresponding period and 29% from the first quarter.

Stanmore Resources Ltd (ASX: SMR)

The Stanmore Resources share price is down 6.5% to $3.42. This follows the release of the coal miner's fourth quarter update. Investors have been selling the company's shares despite it achieving its second half guidance. Stanmore delivered production of 6.4Mt, compared to its guidance of 6Mt to 6.6Mt.

Terracom Ltd (ASX: TER)

The Terracom share price is down over 3% to $1.00. This coal miner's shares are also dropping following the release of a quarterly update. Terracom reported operating EBITDA of $150 million from coal sales of 2.05Mt. Management also revealed that the company's Blair Athol operation remains on track to achieve its full year guidance despite significant rainfall during the quarter. Investors appear to have been expecting an even stronger quarter.

The post Why Fisher & Paykel, Netwealth, Stanmore, and Terracom shares are dropping appeared first on The Motley Fool Australia.

With that level of rise, past performance is definitely not a reliable indicator of future performance.

However, we have also seen in the past that some winners have kept on winning. Over the past decade, CSL Limited (ASX: CSL), Altium Limited (ASX: ALU) and Pro Medicus Limited (ASX: PME). But, that level of long-term growth is rare, requiring consistent strong growth over many years.

Let's have a look at some of the strongest performers and consider whether they could keep rising.

Terracom Ltd (ASX: TER)

One of the strongest performers on the ASX over the past year has been Terracom Ltd (ASX: TER). It has risen by more than 340%.

Terracom is a coal miner with a presence in both Australia and South Africa. It says that it's a low-cost producer focusing on delivering "exceptional outcomes".

The ASX share recently recommenced paying dividends, and its intention is to pay quarterly dividends. At the moment it's paying a quarterly dividend of 10 cents per share, which is an annualised grossed-up dividend yield of 67%. Its policy is to pay between 60% to 90% of net profit after tax (NPAT) on a quarterly basis.

It has benefited enormously from the higher coal price and the board is now considering a share buyback. The company is also considering future projects and acquisitions which the company comes across.

However, will the coal price keep rising? I'm not sure about that, but it seems that a lot of dividend income is headed investors' way.

MMA Offshore Ltd (ASX: MRM)

This ASX share describes itself as a primary contractor to oil and gas operators, providing autonomous underwater vehicle solutions to collect seafloor and sub-seafloor data to assist in the engineering design of subsea infrastructure.

Over the last year, the MMA Offshore share price has gone up by around 115%.

The company is working on capitalising on "momentum" in both traditional and new energy markets while working to maximise operating leverage through increased utilisation and rates. It continues to seek growth opportunities for acquisitions.

Its outlook for the ASX share is "positive", with significant activity forecast for oil and gas, as well as offshore wind, over the next five years. Vessel and subsea services markets are "continuing to improve".

The MMA Offshore share price is still down 30% from the pre-COVID level. But, I'm not sure if it can double again from here in a short amount of time. But, over time, it may be able to achieve more for shareholders.

Warrego Energy Ltd (ASX: WGO)

Warrego Energy describes itself as a UK and Australian-based petroleum exploration, development and production company with assets in Australia and Spain.

The Warrego Energy share price has soared this year, rising by around 145% over the last 12 months.

The ASX share is benefiting from a bidding war for the business.

It was recently announced that the Warrego board has unanimously recommended Gina Rinehart's Hancock offer of 28 cents of cash per Warrego share.

I think it's highly unlikely that the Warrego Energy share price will double again from here. Beach Energy Ltd (ASX: BPT) has already announced that it's not going to match Hancock's offer. Time will tell if there are any other bidders.

The post These 3 ASX shares have doubled, can they do it again? appeared first on The Motley Fool Australia.

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

Altium Limited (ASX: ALU)

The Altium share price is up 4% to $38.02. This follows the release of the electronic design software company's annual general meeting update. At the event, Altium reaffirmed its guidance for FY 2023. Management said: "We expect total revenue to be between $255 and $265 million USD, with both our PCB software business and cloud platform business growing nicely. And, we expect underlying EBITDA margin to be between 35 and 37% for the full year in FY23."

Pendal Group Ltd (ASX: PDL)

The Pendal share price is up 10% to $4.91. This follows news that the courts are pressuring Perpetual Limited (ASX: PPT) to complete its acquisition of the rival fund manager. Perpetual's shares have sunk on the news. This is because this action is likely to scupper its own potential takeover by a consortium comprising BPEA Private Equity Fund VIII and Regal Partners.

Terracom Ltd (ASX: TER)

The Terracom share price is up 8% to 90.5 cents. This morning this coal miner announced that its board has declared a fully franked dividend of 10 cents per fully paid ordinary share for the quarter ended 30 September. This comprises an ordinary dividend of 7.5 cents per share and a special dividend of 2.5 cents per share.

Webjet Limited (ASX: WEB)

The Webjet share price is up 11% to $6.24. Investors have been buying this online travel agent's shares following the release of a strong first half update. Webjet reported a 223% increase in TTV to $2,143 million and a 217% jump in revenue to $175.7 million. On the bottom line, the company delivered an underlying net profit after tax of $32 million, up from a loss of $29.2 million a year earlier.

The post Why Altium, Pendal, Terracom, and Webjet shares are pushing higher appeared first on The Motley Fool Australia.

While the S&P/ASX 200 Index (ASX: XJO) has edged 0.1% lower at the time of writing, the TerraCom share price has been crunched by 10.3% to sit at 91 cents.

Why the TerraCom share price is being smoked

Instead of ASX announcements or sector news driving this fall, the ASX energy share's tumble today likely comes down to one primary driver.

TerraCom shares are trading ex-dividend today. And the dividend in question is a juicy one.

When a company declares a dividend, it sets a cut-off date to determine which shareholders are eligible for the payment. This is known as the ex-dividend date.

If you purchase shares on or after this cut-off date, you don't receive the payment.

So, investors buying the ASX energy shares today won't be getting their hands on TerraCom's 10-cent FY22 final dividend.

The emerging resources explorer recently announced a bumper set of FY22 results. Revenue jumped 47% to $805 million while losses on the bottom line reversed to a $216 million profit.

What's more, TerraCom updated its dividend payout ratio. It's now intending to return between 60% and 90% of profits to shareholders in the form of quarterly dividends.  

The last time TerraCom paid a dividend was in 2019. 

Why do shares drop on the ex-dividend date?

When a company's shares turn ex-dividend, its share price typically drops. 

This is because the company is paying dividends out of its cash reserves. So, with its war chest of cash reduced, the value of the company is diminished.

What's more, some investors will look to offload shares once they've locked in the upcoming dividend. 

The extent of the share price fall usually mimics the size of the dividend. But it varies depending on sentiment and how the broader market is faring that day.

In the case of TerraCom, the dividend in question is 10 cents. At the time of writing, the TerraCom share price has fallen by 10.5 cents, slightly more than the dividend.

Which other shares are trading ex-dividend today?

You can see similar price action in Ampol Ltd (ASX: ALD) shares today. It's the first day that Ampol shares are trading without the company's 2022 interim dividend of $1.20. And at the time of writing, Ampol shares have tumbled by 5.2% or $1.75 to $31.91.

Base Resources Ltd (ASX: BSE) is another company coming under fire today. The Base Resources share price has slid 13.4% or 4.5 cents to 29 cents apiece as shares trade without a 2022 final dividend of 3 cents.

The post Why is this ASX energy share diving 10% on Friday? appeared first on The Motley Fool Australia.

The company declared a final dividend of 10 cents per share for the 12 months to 30 June 2022 today.

This comprises an ordinary dividend of 7.5 cents per share and a special dividend of 2.5 cents per share. The payment will be unfranked.

The last time TerraCom paid a dividend was in 2019. That was an interim dividend of 1 cent per share unfranked.

Why has the TerraCom dividend gone up so much?

The company has decided to update its dividend policy and distribute more of its profit to shareholders.

TerraCom will adopt a new dividend payout ratio of 60% to 90% of net profit after tax (NPAT).

The company will pay dividends on a quarterly basis and those dividends will be franked.

The ASX mining share will go ex-dividend on 2 September. Shareholders will receive the dividend on 19 September.

TerraCom is reviewing its overall capital management program "with the intention to further improve working capital in the business and tax effective ways to make returns to shareholders".

The miner said the review "will contemplate numerous value accretive initiatives".

What did management say?

Non-executive TerraCom chair, Graeme Campbell, said:

On behalf of the Board and Management, I am extremely pleased with the ongoing consistent performance of the Company which has enabled this dividend to be declared and an update to our distribution policy.

We have a strong forward outlook on the coal market and look forward to providing income and capital to our shareholders on a regular basis.

TerraCom is an emerging resources explorer with a large portfolio of operating assets in Australia and South Africa.

The post TerraCom share price rockets on 900% dividend upgrade appeared first on The Motley Fool Australia.

Four ASX shares that have avoided the market selloff today are listed below. Here's why they are rising:

Breville Group Ltd (ASX: BRG)

The Breville share price is up 1% to $18.22. This morning the appliance manufacturer reiterated that its FY 2022 earnings before interest and tax (EBIT) should be in line with its previous guidance and the market consensus. Breville is expecting to report EBIT of ~$156 million for the 12 months. This will be a year on year increase of 14.4% from $136.4 million in FY 2021.

Bubs Australia Ltd (ASX: BUB)

The Bubs share price is up over 8% to 64.5 cents. Investors have been buying this infant formula company's shares after it revealed that some of its recently shipped products to the US will go on sale at Kroger supermarkets and Albertsons Companies. Investors appear to be betting on these retailers continuing to range Bubs' products when supply issues are resolved.

Terracom Ltd (ASX: TER)

The Terracom share price is up 3% to 81 cents. This morning the coal miner advised that it is on track to deliver 640,000 tonnes from the Blair Athol coal mine in Queensland for the June quarter. This will support 2.3 million tonnes of annual coal sales. Quarterly operating EBITDA for Blair Athol is expected to be $180 million. This strong performance is expected to lead to the resumption of dividend payments again.

Xero Limited (ASX: XRO)

The Xero share price is up over 2% to $81.62. Investors have been buying this cloud accounting platform provider's shares after analysts responded positively to price increases. The team at Citi commented: "We see Xero's decision to increase prices in ANZ and UK as an indication of the company's confidence in its position in its core markets."

The post Why Breville, Bubs, Terracom, and Xero shares are pushing higher today appeared first on The Motley Fool Australia.

At the time of writing, the resource company's shares are swapping hands at 80.5 cents, up 2.55%, having earlier risen 10.83% to 87 cents. This means its shares have now gained around 37% in the past month.

For context, the All Ordinaries Index (ASX: XAO) is today in the red by 1.2% to 7,153.8 points.

TerraCom on track to hit sales targets

The TerraCom share price is climbing on Friday following a couple of positive announcements made by the company.

According to its release, TerraCom is on track to meet its June 2022 quarterly forecast.

As such, 640,000 tonnes of coal from the company's wholly-owned Blair Athol (BA) coal mine in Central Queensland will be delivered. This represents 27% of the 2.3 million tonnes of coal sales to be achieved in FY22.

Furthermore, management is forecasting an operating earnings before interest, taxes, depreciation, and amortisation (EBITDA) for BA of approximately $180 million in the June quarter. Combined with the prior nine months, TerraCom is hoping to achieve an operating EBITDA of $360 million for FY22.

At its South Africa operations, operating EBITDA is expected to be around $44 million for the June quarter. This will total roughly $128 million for FY22 when including the previous $84 million attained from July 2021 to March 2022.

On a separate note, TerraCom issued a convertible bond to Madison Pacific Trust Limited for US$20 million. The conversion price stood at A$0.696, with the bonds expiring on 24 December 2022.

However, OCP Asia informed TerraCom that it wishes to convert the full amount of the bonds into fully-paid ordinary shares.

Based on the conversion rate, this will equate to around 39.91 million TerraCom shares to OCP Asia. This represents approximately 5% of the entire company's issued capital.

Lastly, management stated that it will be looking to restart its dividend policy in the coming weeks.

Management commentary

In regards to the dividends, TerraCom executive chair Craig Ransley said:

The Company's balance sheet has significantly improved following the repayment of the US$167 million Euroclear Bond.

The Board looks forward to being able to recommence dividends to shareholders following strong financial performance continuing to be achieved.

Based on forecast, the first dividend to be returned to shareholders is expected to be declared for the period ending 30 June 2022 and estimated to be paid during September 2022. The dividend is forecast to be an initial unfranked dividend of 10 cents per share.

TerraCom share price summary

Strong investor sentiment has led the TerraCom share price to accelerate over the past 12 months, reaching gains of 600%.

Year-to-date, the company's shares have also performed admirably, up 345%.

TerraCom presides a market capitalisation of around $591.58 million.

The post TerraCom share price rallies as dividends return appeared first on The Motley Fool Australia.

Ask A Fund Manager

The Motley Fool chats with the best in the industry so that you can get an insight into how the professionals think. In this edition, Shaw and Partners senior investment advisor Adam Dawes gives us a trio of hot buy tips.

Investment style

The Motley Fool: How would you describe your services to a potential client?

Adam Dawes: I work for Shaw and Partners, but I'm a stockbroker dealing with clients to talk about their financial wealth, increase their financial wealth, and look after their investment needs. It's pretty simple.

MF: Do you have a particular investment philosophy?

AD: Our investment philosophy is always looking at the best companies that sit inside the ASX or the S&P/ASX 300 (ASX: XKO). But then having a little bit more alpha to try and find some of those smaller companies that are really going to excite clients' portfolios. 

But generally sticking to that main portfolio side of things, then just trying to find some of those smaller stocks that'll outperform over the longer period.

MF: The horizon sounds more longer term than short?

AD: Well, it is longer term. I think you have to be, in investing. 

People, they want to be rich in a year's time. And I say, "Well, I'm not that kind of advisor." 

Hottest ASX shares

MF: What are the three best stock buys right now?

AD: Okay. So for one, we really like Wesfarmers Ltd (ASX: WES) at the moment. There's a lot of talk obviously about not just the consumers' discretionary side of the business, but the other businesses that they do hold, which is lithium battery technology and those kinds of things. So I think that's going to definitely do that well. 

We've seen the market upgrade numbers on Wesfarmers the other day. So I think [it's a] good quality blue-chip stock. I think that one is a good buy at the moment.

MF: The share price has come down a bit, hasn't it?

AD: Yeah, it certainly has. So that's why I think there's some definite value there at the moment. 

Talking about prices that have come down, so there's [also] Xero Limited (ASX: XRO). Looks really, really good. Down here, it's $87, $88 wherever it is today. 

I think that's certainly one of those ones, those technology stocks that have been belted over 40% and look pretty good going forward. 

My third one is a small speculative stock, which is one I hold myself. It's a company called Terracom Ltd (ASX: TER), and it's a coal stock.

This one, obviously coal's a little bit on the nose at the moment, but it's certainly a very interesting business.

MF: The share price has gone spectacularly well this year.

AD: Yeah, it has. We got a lot of clients in at 50 cents and will continue to do well because, basically, they've just paid down all of their debt that they've had over the last two to three years. That's all been paid off now. 

And they've talked about coming back out to the market about being a dividend-paying stock going forward. 

Now you never buy a resource stock for dividends, but Terracom is looking to pay some fairly hefty dividends going closer to the end of the financial year and to the end of the calendar year. And they own a mine called Blair Athol, which is an ex Rio Tinto Limited (ASX: RIO) mine. And, certainly, with coal prices where they are at the moment, it's a good little business to own, going forward.

MF: How are you feeling about the coal price though? The higher it is, could you argue that there's more scope to fall?

AD: Well, if you take out Russia and Ukraine. I don't know about you, but I don't think that's going to get resolved anytime soon. That's certainly something that will keep the coal price higher. 

Obviously, the world is moving towards a coal-free or moving towards a greener energy stance. But in that interim, coal is definitely needed to power India, to power a lot of countries around the world. 

People like having cheap energy and we're not seeing that at the moment. That's certainly something that I think overall is going to be pretty tough. So I think that will definitely mean that things will continue to support the coal price, going forward.

The post 3 ASX shares I'm telling my clients to buy: advisor appeared first on The Motley Fool Australia.

While environmentally-conscious investors have shunned the polluting sector, at least one fund manager believes there is significant upside to some ASX coal miners.

The portfolio manager of the Atlantic Pacific Australian Equity Fund, Nicolas Bryon, is a big believer. He reckons the financial results to be reported by coal companies will be "bigger than Ben-Hur", as reported by the Australian Financial Review.

ASX coal shares are on fire

ASX coal shares are already on fire over the past year. The share prices of Whitehaven Coal Ltd (ASX: WHC) and Yancoal Australia Ltd (ASX: YAN) have tripled in value over the period.

The New Hope Corporation Limited (ASX: NHC) share price isn't far behind with a 160% advance. In contrast, the S&P/ASX 200 Index (ASX: XJO) is barely in the black over the last 12 months.

Overflowing coffers

It seems ASX coal shares have not finished outperforming either. Bryon believes the market remains slow to appreciate the fundamental upside that is yet to come. Some coal shares could even outpace their iron ore brethren.

Bryon commented to the AFR:

As we saw with the rally in iron ore over the past couple of years post-COVID-19, the extreme cashflow generation led to dramatically increased dividends and buyback potential of more than 10 per cent of equity.

In the case of thermal coal companies over the coming year, this increases by at least a factor of two. I have never seen anything like this in my entire career which spans 25 years.

Mega share buybacks and capital returns

What has gotten him so excited is his belief that the cash ASX coal miners will produce over the next few quarters will be so large that they could buy back all their shares on market – "and then some".

ASX iron ore shares like BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO) have won favour thanks to their outsized dividends and capital management programs.

They have funded their generous handouts through the high prices they are getting for their iron ore.

Top buy picks among ASX coal shares

Coal is also in hot demand, particularly since the outbreak of the Russian-Ukraine war. The large cap ASX coal miner that Bryon is backing is Whitehaven.

At the smaller end of the market, the fundie likes the Terracom Ltd (ASX: TER) share price.

However, there is such a thing as too much of a good thing. Bryon acknowledges that he is worried that extreme coal and energy prices could trigger a recession.

The post Why these ASX coal shares could be 'bigger than Ben-Hur': fundie appeared first on The Motley Fool Australia.

At the time of writing, TerraCom shares are swapping hands for 22.5 cents, up 7.14%. Just last week, its shares reached a new 52-week high of 25.5 cents before some profit-taking occurred.

TerraCom hits sales targets

The TerraCom share price is rocketing today with investors clearly happy about the way the company is performing.

According to its announcement, TerraCom is continuing to deliver a robust performance at its Blair Athol coal mine in Australia.

All cargoes containing coal from the company's Blair Athol mine have now been fully sold until the end of January 2022.

The primary markets TerraCom services are the Japanese and South Korean energy markets and the Indian sponge iron market. The latter is made by directly reducing iron ore through the use of thermal coal in an electric arc furnace.

Coal sold from Blair Athol for the December 2021 quarter came to 575,000 tonnes. This represents an annualised run rate of 2.3 million tonnes per annum.

TerraCom is forecasting revenue of $224 per tonne in the December quarter. Should this be achieved, the operating cash margin is anticipated to be approximately $134 per tonne. Based on the 575,000 tonnes sold, the company will have operating earnings before interest, tax, depreciation and amortisation (EBITDA) of $77 million.

About the TerraCom share price

TerraCom is a resource company with a large portfolio of assets in Queensland as well as South Africa. The business is currently undergoing a growth strategy to become a mid-tier player in the coal industry.

The TerraCom share price has continued its upwards trajectory, reflecting positive investor sentiment in the company. Over the past 12 months, its shares have risen by more than 66% with year-to-date up 32%.

On valuation grounds, TerraCom has a market capitalisation of around $169.5 million and roughly 753.6 million shares on issue.

The post The TerraCom (ASX:TER) share price is up 7% on Monday. Here's why appeared first on The Motley Fool Australia.

Let's take a look at how the coal miner has been performing. 

What's pushing the Terracom share price lower?

The Terracom share price is in negative territory this morning after the company posted a 1H21 loss after tax of $60.4 million, compared to a 1H20 loss of $9.4 million.

Annualised coal sales for 1H21 were down 0.2 million tonnes, a 7% drop compared to the prior corresponding period (pcp).

Earnings before interest, tax, depreciation and amortisation (EBITDA) came in at a loss of $27.5 million. This compares to a $27.8 million EBITDA profit in HY20.

Terracom's earnings per share (EPS) for 1H21 was negative 6.94 cents compared to EPS of negative 1.96 cents in 1H20.

In other news putting pressure on the Terracom share price, the business reported $350.7 million of total assets at the end of the period as opposed to $630.3 million of total assets in the pcp.

CEO commentary and outlook

Commenting on the financial results for 1H21, Terracom chief executive officer Danny McCarthy said:

The current economic environment has been very uncertain and as a consequence the financial result from 1H FY2021 is somewhat disappointing. Strategic actions undertaken throughout the first half of 2020 saw the Company transform via the acquisition of Universal Coal plc and also the consolidation and restructure of our Australian operation…

From an operational perspective, the Company is in very good shape and will be able to overcome the uncertainties associated with the ongoing economic challenges. Underpinning this is the sustained reduced cost base at Blair Athol, a newly established export strategy in South Africa and improved export coal pricing, the Company is set to deliver stronger EBITDA results for the remainder of the financial year.

Terracom share price snapshot

Terracom is a resource explorer with a large portfolio of assets in Australia and South Africa. Over the past year, the Terracom share price has fallen by 35%. Year to date, Terracom shares have also dropped by around 24%.

Based on the current share price, the company has a market capitalisation of approximately $105.5 million with 753.6 million shares outstanding.

The post Terracom (ASX:TER) share price slumps 7% on deepening loss appeared first on The Motley Fool Australia.

TerraCom is a resource company with a large portfolio of assets in Queensland as well as in South Africa. The business is currently undergoing a growth strategy to become a mid-tier player in the coal industry.

What's driving the TerraCom share price?

The TerraCom share price is rocketing higher today, with investors clearly happy about the way the company is operating.

According to its release, TerraCom is continuing to deliver a robust performance at its Blair Athol coal mine in Australia.

Following the transition in July to become owner-operator of the mine, TerraCom highlighted that free on board (FOB) costs have significantly reduced. Original forecasts estimated that FOB costs would decrease by 17% to $59 per tonne. The company revealed that these savings have been achieved and maintained over the last four months. In perspective, this places the Blair Athol mine within the first quartile of seaborne export FOB operating costs per tonne.

TerraCom noted that the thermal coal market has experienced some challenges in recent times. In light of this, the company said its hard work to deliver cost savings has paid off as the demand and price for coal recovers. Since 1 July, the Newcastle thermal coal index has advanced by more than 45% to register at US$76 on Wednesday.

As a result of the improving conditions, TerraCom anticipates recording strong earnings before interest, tax, depreciation and amortisation (EBITDA) margins for Blair Athol.

Across the Pacific in South Africa, the company discussed its strategic acquisition of Universal Coal in June. TerraCom highlighted that the takeover allowed it to diversify its coal sales mix from the domestic market to international exports.

Furthermore, TerraCom is projecting its first full shipment of thermal coal from South Africa to an overseas buyer next month. The milestone achievement is expected to mark the beginning of increased export sales for the company.

What did the CEO say?

TerraCom CEO Mr Danny McCarthy commented on the company's coal sales. He said:

The coal sales achieved year to date continue to be positive regardless of the ongoing market challenges. Based on an annualised assessment the Company is well positioned to achieve annual coal sales of approximately 9.9 Mt, consistent with FY2020.

With low-cost mining already implemented at Blair Athol, the Company is well positioned to deliver stronger EBITDA results as coal pricing continues to improve.

TerraCom share price summary

The TerraCom share price reached a 6-month high today, hitting the 20-cent mark in earlier trade. Despite this positive milestone, TerraCom shares remain almost 50% lower in year-to-date trading. 

Based on the current TerraCom share price, the company has a market capitalisation of around $124 million.

The post Why the TerraCom (ASX:TER) share price is soaring 19% today appeared first on The Motley Fool Australia.