Category: Business

Owners of shares in S&P/ASX 200 Index (ASX: XJO) online real estate advertising company REA Group Limited (ASX: REA), rejoice!

Your investment just announced its largest dividend ever, increasing its full year payout by 25%.

Sadly, the stock is in the red today after surging 7% on the back of its full year results, released yesterday.

The REA share price is $127.44 right now, 3.69% lower than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is also down, falling 0.12% at the time of writing.

But a day in the red likely won’t be enough to wipe the smile off shareholders’ faces. Let’s take a look at the record dividend announced by the ASX 200 share this week.

When will shareholders receive the ASX 200 share dividend?

Financial year 2022 was good to ASX 200 share REA, and now the company is passing a chunk of its takings to shareholders.

The company’s revenue lifted 26% last financial year compared to that of financial year 2021.

Its earnings before interest, tax, depreciation, and amortization (EBITDA) also rose 19% while its net profit jumped 25%.

And much of that profit is now up for grabs.

REA announced a record 89 cent per share fully franked final dividend, bringing its full year dividends to $1.64 – up 25% year-on-year.

That means the stock is currently trading with a dividend yield of 1.28%.

And would be investors have a few weeks to decide whether they’ll pursue the payout. The ASX 200 share doesn’t trade ex-dividend until 25 August.

The dividend is then expected to begin landing in shareholders’ accounts in mid-September.

REA share price snapshot

Despite posting strong earnings, the REA share price has been underperforming in 2022.

The company’s shares have slumped 26% since the start of the year while the ASX 200 has dumped around 8%.

It’s also been underperforming over the longer term, falling 18% in the last 12 months. Meanwhile, the index has slipped 7%.

The Ioniq 5 electric crossover has sold out again, with the latest drop of units from Hyundai’s Australian division gone in a matter of minutes.

Hyundai announced last week that it would make an additional 135 vehicles available on Wednesday, continuing the “drip feed” release of the popular EV, which has won multiple car of the year awards around the world.

The latest tranche included, for the first time, the newly named AWD Techniq with optional sunroof, which was originally a standard feature but was then removed amid rising costs and differentiation of the pricing from the RWD Dynamiq.

Interest in the Ioniq 5 is clearly not slowing down.

In addition to being awarded the title for its superior stability when towing, the vehicle’s telematics system also allows drivers to set tow weights before driving off to get a highly accurate range estimate.

Add to that the addition of internal as well as external vehicle-to-load capabilities, and the Ioniq 5 does in deed shape up to be a vehicle that probably won’t “ruin your weekend.”

However, it may have ruined some people’s mid-week.

This time, readers tell The Driven than the latest tranche may have sold out almost almost immediately.

“Put my postcode in for the Ioniq 5 raffle at one second past Zero hour and got a message saying the cars were sold out. This is crazy!” one reader said in a note to the Driven.

Similar messages were shared on social media: “I just missed out on an Ioniq 5. I was in there on the dot at 1pm and got kicked out multiple times. I had just entered my credit card and hit the pay button and then it told me it had sold out,” said one hopeful buyer on Facebook.

A spokesperson for Hyundai Australia tells The Driven that each tranche is divided into pre-allocations by capital city (no cars are yet available for regional areas,) and that the latest tranche sold out by 1:16pm, with the first payment being taken at 1:06 p.m.

There is one faint light at the end of the tunnel for drivers wanting to get their hands on an Ioniq 5 though: as reported by Riz Akhtar, secondhand prices are starting to come down as more new cars are made available to customers.

Mind you, the “near new” asking price for an Ioniq 5 still sits well above the price of a new one.

Bridie Schmidt is associate editor for The Driven, sister site of Renew Economy. She has been writing about electric vehicles since 2018, and has a keen interest in the role that zero-emissions transport has to play in sustainability. She has participated in podcasts such as Download This Show with Marc Fennell and Shirtloads of Science with Karl Kruszelnicki and is co-organizer of the Northern Rivers Electric Vehicle Forum. Bridie also owns a Tesla Model 3 and has it available for hire on evee.com.au.

As the transition towards renewable energy continues to inch forward day by day, perhaps the most abundant thematic – electric vehicles (EVs) – is leading the charge.

Lithium (and arguably, nickel and cobalt) is typically considered the darling child(ren) of the battery metals segment. However, one often-overlooked segment has opened up a compelling value proposition.

Rare earths, which, coincidentally, aren’t all that rare (in the ground anyway), have garnered attraction lately.

The group is comprised of 17 metals that are essential to technological functions in society.

Rare earths ASX mining shares open a compelling proposition

According to Dr Kingsley Jones, analyst at Jevons Global Investment Advisory, “[t]he EV market thematic is driving higher demand for rare earth metals”.

In a recent note, Jones covers the market for rare earths. In it he builds a core basket of portfolio companies to gain exposure to the space.

He said that demand has accelerated for the basket of rare earths within ASX mining shares. This is due to their use in high-performance magnets used in electric motors and generators.

In particular, the “rapid uptake of EVs and the very large generators used in wind turbines to provide renewable energy” has underpinned the demand.

Aside from that, China refines and produces more than 60% of the world’s unprocessed rare earth oxides.

Not to mention, rare earths are notoriously hard to extract anyway. The reason? “Host minerals are difficult to process and the rare earths are hard to separate,” Jones says.

With that, the analyst and his employer suggest five companies for investors to hone in on for exposure to rare earths from mine to metal, all the way downstream.

These include Arafura Resources Limited (ASX: ARU), Hastings Technology Metals Ltd (ASX: HAS) and Australian Strategic Materials Ltd (ASX: ASM). I’ve covered the other two here.

This basket of stocks provides a diversified offering of names with exposure to rare earths at different points along the value chain, Jones says.

Take a look at the returns for each of these shares for the past 12 months on the chart below.

Buying ASX shares can be very fruitful in the long run, but it’s demonstrably difficult to do better than average (“the market”).

If it was easy, everyone would be doing it.

So if you’re not happy with the performance of your portfolio, especially in a turbulent year like 2022, you may need to pause and assess.

After all, “Am I doing this right?” is a wise question one can ask oneself in any endeavor in life.

To help answer this self-critique, the team at Marcus Today put forward two types of amateur portfolios that should ring alarm bells:

Just buy ETFs rather than own a ‘moron portfolio’

The first red flag is if your portfolio consists entirely of well-known S&P/ASX100 (ASX: XTO) companies.

“A lot of you probably do this by default. This is where most of you get trapped. Holding around 20, mostly big, mostly obvious stocks,” the Marcus Today blog post read.

“You trust them by virtue of their size and brand but don’t know them in detail.”

One might think holding such massive companies is “safe” but this is deceptive because it can provide a false sense of security and encourage laziness.

“This is often a more risky approach than it looks because of your lack of research and engagement.”

Many people who possess this mix of ASX shares are voluntarily “stuck” because they are too afraid of the potential tax bill after years of holding.

“You can get trapped into this approach by capital gains (‘I can’t sell’), which is understandable but not ideal,” read the blog post.

“It may seem normal and sensible, but the truth is that if you’re going to do this ‘moron portfolio’ thing, you’d be better saving yourself from a lot of admin, activity and lost evenings and weekends by just buying market ETFs.”

The Marcus Today team admits people who ended up with such a portfolio from an inheritance — or from shares provided at an initial public offering, such as Commonwealth Bank of Australia (ASX: CBA) or Insurance Australia Group Ltd (ASX: IAG) in the 1990s and 2000s — are not at fault.

But even they might want to consider mixing up the investments.

“Just don’t pretend it’s ‘clever’. It’s lazy.”

Trading anything and everything

Perhaps the opposite of just holding a bunch of ASX 100 names is stock picking anything and everything.

For the Marcus Today team, this should also ring alarm bells.

“Now we get to a place [that] a lot of beginners get trapped without knowing it’s not normal,” read the blog post.

“It involves tips and it invites a lot of volatility, risk and reward. It is for people who don’t have a heart condition.”

The amount of volatility and risk involved in such a portfolio means a lot of time and energy required to keep one’s head above water.

“This is riding the stormy seas. It’s about timing fads, finding diamonds in the rough, spotting change.

“It’s for those of you with the time and energy and risk profile to attempt transformation.”

The trouble with this approach, other than the heightened risk, is that it only really works during bull markets. Years like 2022 would have slaughtered such a portfolio.

Stocks with no earnings die in the cold. Trading loses money when it goes cold. Trading is an activity to do when the sun comes out.”