Over the past fortnight, investors have braced for financial reports from CSL Limited (ASX: CSL), BHP Group Ltd (ASX: BHP), Redbubble Group Ltd (ASX: RBL), Carsales.com Ltd (ASX: CAR) and Seek Limited (ASX: SEK).

Here's what I think of each report...

CSL - okay, but steady 

Starting with the biggest healthcare company on the ASX. CSL's year was hampered by Covid and a lack of blood plasma collections (which it needs to make its products). Collections in the USA in particular were harder, against a backdrop of lockdowns and physical distancing.

CSL's revenue was up 2% but profit was down 5%. According to Selfwealth data, over the 5 years to 2021 CSL's revenue compounded at 11% per year. So it was below the recent average. A bounce-back in blood plasma donations in the USA will help CSL's top line return to strong growth in 2023, but I think it's important all investors remember CSL is now a $140 billion-plus company, so high-single-digit revenue growth is probably acceptable. 

With dividends of $US2.22, in line with last year, CSL's dividend yield is around 1.1%.

Meaning that for new buyers of CSL stock it's going to require many years of growth before it can be considered an "income play". CSL shares rarely trade at "cheap" levels. Still, I'd rather wait for a better entry point. That said, I wouldn't sell if I'd held shares for a long time.

BHP - big dividends, expected to plateau 

BHP's result was all about dividends.

As many Selfwealth Live viewers told me on Wednesday night, a lot of investors bought shares of BHP over the past three years at lower prices. For example, one Selfwealth Live viewer bought BHP around $27. With trailing full year dividend payments of $US3.25 -- equivalent to $4.74 fully franked! -- the dividend payments alone will account for a 17.5% return, plus franking credits (takes it to ~25%), plus the split of capital from the sale of BHP's oil and gas assets to Woodside Group (ASX: WDS).

In short, it's been a fantastic 2 years for loyal BHP shareholders.

The mining company reported revenue up 14%, despite so-so production volumes, thanks to higher commodity prices. Expenses weren't up nearly as much, just $US1.5 billion, so the company's profit exploded higher.

The outlook for BHP is a little more uncertain than CSL, given the unknown of commodity prices and what happens in China. At the right price, I can see why many investors are happy to back up the truck on this high dividend yield company.

Note: inside Selfwealth you can see that analysts are forecasting a decline in dividends from BHP over the next two years. I cited historical/trailing dividend payments, above, which I'm betting will be quite different to what happens in the next 24 months! In short, dividends are not guaranteed.

Redbubble - weaker than expected 

Redbubble, the global e-commerce platform for independent artists, reported weaker-than-expected results. The thing is, investors were already expecting quite weak results. So this was worse than... worse.

Having previously recommended Redbubble shares to Rask members (and owned the stock myself), I think the management of Redbubble is first class. The problem is Covid has rolled off quicker than many of us expected, and competition for e-commerce is fierce. On the one hand we have competition from the likes of Etsy (which also reported slightly weaker results) and on the other, being the supply side, we have higher inflation and supply chain bottlenecks hurting profit margins for manufacturing and deliveries.

Redbubble reported a 13% decline in marketplace revenue and, given its narrow profit margins, a very sharp reversal in operating profit (EBIT) -- from positive $39 million to negative $21.9 million. The outlook for Redbubble is uncertain, with competition unlikely to go away anytime soon. However, if the management team can get a handle on costs and re-engage its existing audience through mobile or email, it could return to cash flow profitability. As it stands, the range outcome is too wide, so I'm happy to watch Redbubble from the sidelines.

Carsales.com - strong report, US provides optionality 

Carsales is the gift that keeps on giving --  both dividends and profit growth.

Carsales reported a really strong result and is about to integrate Trader Interactive into its brand stable. 'TI' is a leading RV & powersports brand from the USA. Carsales first took a 49% stake around ~18 months ago but it is now going for the rest as it sees huge synergies and a pathway to doing what it did to cars here in Australia -- in the USA's RV segment. The TI deal should close in the first quarter of this financial year and gives Carsales yet another bit of optionality and growth, alongside its Korean and Latin American assets.

In Australia, Carsales' "instant offer" (when Carsales buys your car for a discount and resells it) is progressing well, and the company is benefitting massively from increased sales and prices of second-hand cars.

As the economy weakens, I suspect Carsales will be more resilient than, say, Seek, because it has some counter-cyclical features (e.g. people don't buy new cars in a recession, they look on Carsales for a cheap second-hand vehicle -- or they sell their existing car privately for more money than going directly through a dealer, which is also good for Carsales). However, it won't be immune if the local economy hits the skids -- which may provide a better entry point.

With great dividends over the years, plus growth, a solid management team and growing assets in South Korea, Mexico, Brazil and the USA, I think better years lay ahead of Carsales. Overall I think it was a strong result in near-perfect conditions, but it is guiding for more strength in the period ahead, subject to market conditions of course.

In Australia, the only genuine competitors I can think of are Facebook Marketplace and Gumtree (both of which are free and as such cater to the cheaper end of vehicle sales). So far, Carsales has done a good job managing them and staying the leader in its only major vertical (cars). I'd be happy to find a small place for Carsales in a diversified portfolio.

Seek - strong, but outlook uncertain 

Seek reported a very strong result on first glance, but the market is clearly worried about the future outlook. Seek's Managed Investment Scheme (MIS), called the "Seek Growth Fund", is muddying the company's financials because of accounting standards. For example, the cash flow from its operating business (HR classifieds) are a little harder to follow with the investment fund in the mix. 

From continuing operations, Seek's revenue was up 47% and its net profit after tax (NPAT) was up 81% to $245 million, excluding significant items. This enabled it to pay dividends of 44 cents per share for the full year (a 21 cents per share final dividend).

Seek's outlook is where investors were spooked by management. Management produced a pretty 'upbeat' outlook -- subject to "largely positive conditions" and assuming "low risk of job market volatility", conducive monetary policy and supportive Covid implications.

In other words, 'the outlook is good, provided everything is good' was basically the guidance. The company didn't like that.

Seek shares are down 13% in 2022 so far, but still trade at 31x profit, which is a little high for me unless its growth fund (and Core business) keep firing. I'd rather wait and hope for more pessimism to hit the shares before making an entry at discounted prices.

Summary

Every week on Selfwealth Live during Reporting Season I take a look at five of the most popular companies reporting their results. You can subscribe to my weekly takes on the market, and join me live for a chat about investing, by visiting the Selfwealth YouTube channel and clicking "subscribe".

It's free, and we go live every Wednesday at 6 pm.