Starting your investing journey can feel nerve-racking.

With thousands of ASX shares and ETFs to choose from, many beginners worry about picking the wrong investment or getting the timing wrong.

The good news is that smart investing doesn’t require complicated strategies, insider knowledge, or luck. It simply requires discipline, diversification, and time.

If you have your first $1,000 ready to invest, here is a smart, simple roadmap to get started.

Forget about timing the market

New investors often sit on the sidelines waiting for the perfect moment to begin. But history shows that time in the market beats timing the market. Even investing at less-than-ideal moments generally works out when you stay invested for years rather than months.

That means the smartest move with your first $1,000 is simply to start. You are building habits and unlocking compounding, not trying to pick the market’s next move.

Diversify

With only $1,000, buying individual ASX shares means you risk putting too much money into too few companies. That’s where exchange-traded funds (ETFs) shine. They allow you to own dozens or even thousands of shares instantly.

Three ETFs worth considering as a starter mix are:

Vanguard Australian Shares Index ETF (ASX: VAS)

This fund gives you exposure to the top 300 ASX shares, including BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), and Wesfarmers Ltd (ASX: WES). It is a simple, low-cost way to own the broader Australian market.

iShares S&P 500 ETF (ASX: IVV)

For US exposure, the iShares S&P 500 ETF is worth considering. It tracks the high-performing U.S. S&P 500 Index. Inside are companies like Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), and Nvidia (NASDAQ: NVDA). These are some of the most profitable and innovative businesses in the world.

Betashares Nasdaq 100 ETF (ASX: NDQ)

If you want a tilt toward technology and long-term growth, the Betashares Nasdaq 100 ETF is worth a look. It is packed with digital, cloud, and AI leaders. Over long stretches, the Nasdaq has delivered some of the strongest returns of any global index.

You don’t need all three to begin, but any one of them gives you instant diversification and long-term potential.

Add small amounts regularly

Your first $1,000 is just the beginning. The real power comes from adding $100, $250, or $500 at a time. Regular contributions help smooth out volatility and accelerate compounding.

For example, starting with $1,000 and then adding $250 a month would turn into over $50,000 in 10 years if you were able to generate a 10% per annum average return.

Foolish takeaway

The smartest way to invest your first $1,000 is to keep it simple. Remember to start early, choose diversified ETFs, invest consistently, and stay patient.

With those foundations in place, you will build better investing habits than most people manage in a lifetime.

The post How to invest your first $1,000 in the share market the smart way appeared first on The Motley Fool Australia.

More reading

• 5 ASX ETFs for beginner investors in 2026 and beyond
• ASX 200 mining shares outperform as iron ore and copper prices strengthen
• Prediction: This AI stock will be the most surprising winner of 2026
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• 3 ASX ETFs I’d buy right now to build wealth

Motley Fool contributor James Mickleboro has positions in BetaShares Nasdaq 100 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple, BetaShares Nasdaq 100 ETF, Microsoft, Nvidia, Wesfarmers, and iShares S&P 500 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Apple, BHP Group, Microsoft, Nvidia, Wesfarmers, and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Looking to buy a promising S&P/ASX 300 Index (ASX: XKO) energy share tipped to deliver outsized near-term gains?

Then you may want to have a look into Amplitude Energy Ltd (ASX: AEL), formerly Cooper Energy.

That’s according to Wik Farwerck, portfolio manager of the Balmoral Investors micro-cap fund (courtesy of The Australian Financial Review).

Asked which stock his fund owns that he believes has the most near-term upside, Farwerck said, “ASX-listed Amplitude Energy has a good chance, given the catalyst-rich environment it has in front of it.”

Noting two reasons the ASX 300 energy share could surge in the coming months, he said, “As an east coast gas producer, it has exposure to rising gas prices, exploration in the Otway and improving volumes from its Orbost gas plant.

Amplitude Energy shares have already enjoyed a strong run over the past 12 months, gaining 44%.

And Farwerck believes the stock can deliver more outperformance ahead.

Why this ASX 300 energy share is a buy

Among the reasons Farwerck is bullish on Amplitude Energy is the increasing realisation that the world will need gas for a very long time yet to keep the lights on.

He noted:

Increasingly, it is dawning on regulators and even politicians that gas is not a transition fuel; it’s simply a fuel, and a crucial one at that. It is vital to the economy for heating, industrial processes and electricity.

As existing gas fields deplete in Bass Strait and from a lack of investment, primarily due to regulatory and government policy settings, we face the potential of much higher gas prices.

And the ASX 300 energy shares is well-positioned to take advantage.

“Amplitude has strategic value in its existing gas plants in Victoria, as the ability to get approvals for new infrastructure appears impossible,” Farwerck said.

He added:

The current Otway drill program by ConocoPhillips (NYSE: COP) is looking promising, but the proponents have limited processing options, hence the value of the Athena gas plant owned by Amplitude.

In his bullish appraisal, Farwerck also echoed legendary investor Warren Buffett, who famously said, “A great manager is as important as a great business.”

Farwerck noted, “Amplitude has a strong management team that has turned the business around, reset the cash generating base for earnings and set the company up for growth.”

Then there’s Amplitude’s recently completed $150 million equity raising, which will help to support its East Coast Supply Project (ECSP) expansion.

“The recent capital raising has placed the company in a great position,” Farwerck said.

Rounding off with the fourth reason to buy this ASX 300 share today, he concluded, “The stock looks attractively priced for a business with contracted volumes and with upside to gas prices.”

The post 4 reasons to buy this surging ASX 300 energy share today appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

It was another busy week for Australia’s top brokers. This has led to the release of a number of broker notes.

Three broker buy ratings that you might want to know more about are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Breville Group Ltd (ASX: BRG)

According to a note out of Macquarie, its analysts have retained their outperform rating and $39.20 price target on this appliance manufacturer’s shares. The broker highlights that its Macquarie Kitchen Benchmark and the De’Longhi Revenue Index are showing strong growth in the last quarter. And given Breville’s track record of outperforming the benchmark by 11% per annum between 2018 and 2024, it believes this supports its forecast for an average of 10%+ per annum revenue growth between FY 2025 and FY 2028. This is expected to be underpinned by Breville’s coffee segment, new market development, and its investment in new product development. The Breville share price ended the week at $29.42.

CSL Ltd (ASX: CSL)

A note out of Morgan Stanley reveals that its analysts have retained their overweight rating and $256.00 price target on this biotechnology company’s shares. The broker remains very positive on CSL due to the favourable long term demand outlook for immunoglobulins and plasma yield improvements from its Horizon 1 and 2 programs. It expects the latter programs to be supportive of a margin recovery in the key CSL Behring business, which should offset weakness in the Albumin franchise. In light of this and recent share price weakness, Morgan Stanley sees a favourable risk/reward profile here for investors. The CSL share price was fetching $184.10 at Friday’s close.

Hub24 Ltd (ASX: HUB)

Analysts at Bell Potter have retained their buy rating on this investment platform provider’s shares with a slightly reduced price target of $125.00. According to the note, the broker felt that Hub24’s investor day update had both positives and negatives. The main positive was that it sees upside risk to the company’s funds under administration (FUA) guidance as it continues to broaden its offering and lift volumes. The negative was that management has increased its expense growth guidance to 18% to 20%. Though, Bell Potter notes that this reflects a deliberate move by management to outpace peers and bring forward investment. Overall, the broker left the investor event feeling confident in Hub24’s growth outlook and cadence over peers. The Hub24 share price ended last week at $99.95.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, Hub24, and Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended CSL and Hub24. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Starting your investing journey can feel overwhelming, especially when markets are bouncing around and headlines are full of predictions about recessions, bubbles, and interest rate cuts.

The good news is that beginner investors don’t need to pick individual stocks or try to outsmart the market. A handful of high-quality exchange traded funds (ETFs) can provide instant diversification, global exposure, and strong long-term growth potential. All without the stress of stock picking.

With 2026 approaching, here are five ASX ETFs that could be excellent options for new investors.

Betashares Asia Technology Tigers ETF (ASX: ASIA)

The Betashares Asia Technology Tigers ETF offers exposure to some of the biggest and fastest-growing technology companies across China, Taiwan, and South Korea. Its holdings include Tencent Holdings (SEHK: 700), Alibaba Group (NYSE: BABA), Taiwan Semiconductor Manufacturing Co. (NYSE: TSM), and Baidu (NASDAQ: BIDU).

These companies power global megatrends such as social media, semiconductors, cloud computing, and artificial intelligence.

Betashares Australian Momentum ETF (ASX: MTUM)

The Betashares Australian Momentum ETF follows a simple but powerful principle. That is that in markets, strength often follows strength.

This ASX ETF selects Australian shares with the strongest price momentum, meaning it continually rotates into shares that are outperforming.

Current holdings include names such as Qantas Airways Ltd (ASX: QAN), Coles Group Ltd (ASX: COL), and Wesfarmers Ltd (ASX: WES). The Betashares Australian Momentum ETF is designed to adapt quickly to shifting conditions, making it an appealing option for beginners who want an evidence-based strategy without manually stock-picking.

It was recently recommended by analysts at Betashares.

Betashares Nasdaq 100 ETF (ASX: NDQ)

The Betashares Nasdaq 100 ETF provides exposure to the top 100 non-financial stocks listed on the Nasdaq exchange.

This includes household names Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), Nvidia (NASDAQ: NVDA), and Amazon (NASDAQ: AMZN).

These companies dominate cloud computing, AI infrastructure, software, ecommerce, and advanced hardware. Over the long term, the Nasdaq has delivered some of the strongest returns of any global index. And given the quality of its holdings, it wouldn’t be surprising if this trend continues over the next decade.

Betashares Global Shares Ex-US ETF (ASX: EXUS)

The Betashares Global Shares Ex-US ETF is a new ETF. It provides exposure to more than 900 large and mid-cap stocks across developed markets, excluding the United States and Australia. That means instant diversification across Europe, Canada, and Asia-Pacific.

Top holdings include Nestlé (SWX: NESN), Roche (SWX: ROG), ASML Holding (NASDAQ: ASML), AstraZeneca (NASDAQ: AZN), and SAP (NYSE: SAP).

It was also recently named as one to consider by analysts at Betashares.

Vanguard U.S. Total Market Shares Index ETF (ASX: VTS)

Finally, if you want broad exposure to the entire U.S. share market, the Vanguard U.S. Total Market Shares Index ETF could be a top pick. It tracks more than 3,000 American stocks, from mega-caps like Alphabet (NASDAQ: GOOGL) and Meta Platforms (NASDAQ: META) to mid-caps and smaller innovators. This could make it a powerful and diverse core holding for beginners.

The post 5 ASX ETFs for beginner investors in 2026 and beyond appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in BetaShares Nasdaq 100 ETF and Betashares Capital – Asia Technology Tigers Etf. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ASML, Alphabet, Amazon, Apple, AstraZeneca Plc, Baidu, BetaShares Nasdaq 100 ETF, Meta Platforms, Microsoft, Nvidia, Taiwan Semiconductor Manufacturing, Tencent, and Wesfarmers. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Alibaba Group, Nestlé, Roche Holding AG, and SAP and has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended ASML, Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX 200 materials shares lead the market sectors last week, lifting 3.04% primarily due to a surge in big mining stocks.

The major miners, led by BHP Group Ltd (ASX: BHP), set new 52-week highs, as did the market’s biggest pure-play copper share.

Several ASX mining ETFs also hit new 52-week highs, including the SPDR S&P/ASX 200 Resources ETF (ASX: OZR).

Meanwhile, the S&P/ASX 200 Index (ASX: XJO) lifted 0.24% to finish the week at 8,634.6 points.

The benchmark index is now 5.3% down on its October record of 9,115.2 points.

Strong commodity prices lifted ASX 200 mining shares last week.

Iron ore and copper prices rose while the gold price hovered not far off its record high set in October.

Let’s review.

ASX 200 mining shares rip amid higher commodity prices

The BHP share price rose 7.61% over the week to finish at a new 52-week high of $44.84 on Friday.

The Fortescue Ltd (ASX: FMG) share price ascended 3.27% to close at a 52-week high of $22.11.

Rio Tinto Ltd (ASX: RIO) set a new 52-week high at $140.58 on Thursday and finished 4.68% higher over the week at $138.47.

Pure-play ASX 200 copper share, Sandfire Resources Ltd (ASX: SFR) set an all-time record at $17.20 on Thursday.

Sandfire Resources shares rose 7.3% over the week to finish at $16.88 apiece on Friday.

Capstone Copper Corp (ASX: CSC) shares rose 9% to close out the week at $14.38.

Stronger iron ore and copper prices supported these ASX 200 mining shares last week.

Iron ore rose 2.9% to US$107.88 per tonne, which may not seem like a big bump, but it makes up the bulk of the 4.1% year-to-date (YTD) gain.

One of the tailwinds for the iron ore price is China’s announcement of new supports for its troubled property sector.

According to Trading Economics, these include lower taxes on home purchases and additional mortgage subsidies.

Copper futures rose 4% last week to US$5.40 per pound on Friday. That’s a YTD gain of 35.5%.

The strong copper price is a tailwind for BHP and Rio Tinto shares given both companies have greatly expanded their copper operations.

BHP is now the world’s largest copper producer, and copper formed 45% of its total underlying EBITDA in FY25, up from 29% in FY24.

What about gold?

The gold price moved sideways last week and remains high at about US$4,200 per ounce.

That’s not far off its historical peak of US$4,381.58 per ounce reached in October.

A Goldman Sachs poll found almost 70% of institutional investors expect the gold price to keep rising in 2026.

Last week, the market’s largest ASX 200 gold share, Northern Star Resources Ltd (ASX: NST), fell 3.06% to $26.33.

The Evolution Mining Ltd (ASX: EVN) share price lifted 1.01% to $12.

Newmont Corporation CDI (ASX: NEM) shares fell 0.9% to $138.20.

Gold and copper miner, Greatland Resources Ltd (ASX: GGP) streaked 11% higher to $8.38 per share.

ASX 200 market sector snapshot

Here’s how the 11 market sectors stacked up last week, according to CommSec data.

Over the five trading days:

The post ASX 200 mining shares outperform as iron ore and copper prices strengthen appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen has positions in BHP Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

When you’re new to investing, choosing your first few Australian stocks can feel intimidating.

Should you chase growth? Stick with defensive plays? Pick companies you know? The truth is, the best starting point is often a simple one.

It is to buy high-quality businesses with positive growth outlooks, strong competitive advantages, and share prices that have temporarily fallen out of favour.

Right now, three of Australia’s best companies, which are all leaders in their industries, have experienced sizeable share price weakness in 2025. For long-term investors, that combination of quality and discounted prices doesn’t come along often.

If I were guiding a brand-new investor today, these are the three Australian stocks I’d point them toward.

CSL Ltd (ASX: CSL)

CSL is one of Australia’s most successful global healthcare companies, yet its share price has fallen sharply this year due to concerns about tariff impacts, a slower-than-hoped Behring margin recovery, and uncertainty surrounding the upcoming Seqirus spin-off.

At one point, CSL shares were trading nearly 40% below their 52-week high, which is rare for a business of this calibre.

But the long-term story hasn’t changed. CSL remains a world leader in plasma therapies, vaccines, and specialty medicines, supported by a demand profile that tends to grow steadily regardless of economic conditions. The company continues to expand its U.S. manufacturing footprint, invest heavily in R&D, and progress a strong pipeline of next-generation treatments.

Goodman Group (ASX: GMG)

Goodman is the quiet engine behind global e-commerce, logistics, and cloud infrastructure. Its industrial property portfolio includes high-tech warehouses, fulfilment centres, and increasingly, data centres. These are all essential to companies like Amazon (NASDAQ: AMZN), Tesla (NASDAQ: TSLA), and major cloud providers.

Despite its exceptional long-term record, Goodman shares have softened this year. Yet demand for logistics real estate, AI computing capacity, and data-centre infrastructure continues to surge.

For investors, it could be an attractive way to gain exposure to the digital economy’s infrastructure backbone.

WiseTech Global Ltd (ASX: WTC)

Finally, WiseTech is a logistics software provider used by the world’s biggest freight forwarders and supply-chain operators. After a steep share price correction in 2025, the company shares are trading at far more attractive levels than in recent years.

Demand for digital supply-chain solutions continues to grow, and WiseTech’s CargoWise platform remains deeply embedded in the operations of global logistics giants. Its pricing power, high margins, and recurring revenue model give it a long runway for compounding growth.

In addition, a recent transformational acquisition looks to have cemented its leadership position for many years to come. This could make 2025’s weakness an incredible opportunity for long-term focused investors.

The post Here are the 3 Australian stocks I’d tell a new investor to buy asap appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in CSL, Goodman Group, and WiseTech Global. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, CSL, Goodman Group, Tesla, and WiseTech Global. The Motley Fool Australia has positions in and has recommended WiseTech Global. The Motley Fool Australia has recommended Amazon, CSL, and Goodman Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Amazon (NASDAQ: AMZN) didn’t exactly knock it out of the park in 2025. As I write this on Dec. 2, the e-commerce giant’s stock has gained just 6.8% since the last round of fireworks and “Auld Lang Syne.” Meanwhile, the S&P 500 (SNPINDEX: ^GSPC) index gained 16.1%, and the Nasdaq-100 portfolio raced ahead with a 21.6% jump. 

Can Amazon turn it around next year, or will 2026 be another disappointing period for its investors?

The good, the bad, and the pricey

First, let’s check out the market footprint. By the end of 2024, Amazon carried a $2.32 trillion market cap and lofty valuation ratios. Those figures have changed dramatically in 2025 and not all for the better:

Data collected from YCharts on Dec. 2, 2025. TTM = trailing twelve months.

Amazon’s stock price rose about as quickly as its total sales, so the P/S ratio didn’t change much. But the P/E ratio inched lower, and the cash-flow-based ratio skyrocketed. That’s an unfortunate side effect of Amazon’s plunging cash flows.

The AI spending spree behind Amazon’s cash crunch

The business itself is humming right along. Amazon’s overall sales rose 11.9% year-over-year in the third quarter of 2025. Amazon Web Services (AWS) led the charge with an 18.2% sales jump. But AWS also raised its operating expenses by 21%, while the two e-commerce divisions hovered near the 10% level. And Amazon is investing a ton of money in the AWS segment.

You see, large AWS clients are ready to pay a premium for as much artificial intelligence (AI) processing power as possible. Over the last four quarters, Amazon spent $120 billion on purchases of property and equipment, also known as capital expenses (capex). That’s up from $69.8 billion in the comparable year-ago period.

And it’s no secret where the cash is going. On the Q3 2025 earnings call, Amazon CFO Brian Olsavsky explained that the heavy cash investment supported AWS’ AI computing capacity and basic infrastructure. Capex is expected to hit $125 billion in fiscal year 2025, followed by further increases in 2026 and beyond.

The trillion-dollar question: Is AI worth it?

No surprises, right? Like most of its peers in the Magnificent Seven group of tech giants, Amazon is leaning into the AI boom with verve and enthusiasm. Cash expenses are way up, but so are Amazon’s AWS revenues. The empire that Jeff Bezos built is setting up the computing infrastructure of a long-term winner in the cloud-based AI computing space.

The company might be overspending on AI hardware today, but will it be worth the effort by 2030 or perhaps 2035? Only time will tell, and it will certainly take years to make up for the beefy cash expenses with AI-driven profit gains. Again, Amazon can’t win the AI game if it doesn’t play.

It’s not cheap, but those are the table stakes to stay competitive in this AI-hungry economy.

Your Amazon investing playbook for 2026

The same trends will probably remain relevant in 2026. Amazon will spend more than $125 billion on capex with a heavy focus on AI number-crunching capacity. Investors will watch this effort closely, basing the stock’s daily market price on Amazon’s success in the AI business.

Amazon’s valuation multiples will vary as Wall Street adjusts to the latest twists and turns of the American economy. On a good day, when Federal interest rates are going down and consumer spending is up, Amazon will add to its lofty P/E and P/FCF ratios. In a more bearish market mood, Amazon investors are likely to lower the share price as they go looking for low-risk safe havens instead.

Your move: Making sense of Amazon’s volatility

There are too many variables in this equation to figure out a likely price target or shareholder return for Amazon across 2026. But I can promise that the stock will be volatile again. Shrewd investors should keep an eye out for sudden price drops before buying Amazon stock next year.

The rest of us can simply keep adding to our existing positions as usual, trusting that Amazon’s stock chart should match its financial success in the long run. That’s how it got to this multitrillion-dollar plateau in the first place. Dollar-cost averaging is often the right move when your favorite stock is jumping around like a cat on a hot tin roof.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Is Amazon (AMZN) a Buy, Sell, or Hold in 2026? appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Anders Bylund has positions in Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

I think APA Group (ASX: APA) is one of the unsung high-yield dividend heroes of the S&P/ASX 200 Index (ASX: XJO). It certainly counts as a high-yield stock in my opinion.

APA doesn’t get the same level of attention as large ASX dividend shares like Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP) or Woodside Energy Group Ltd (ASX: WDS). I think APA is a much stronger passive income option than those names.

For investors that haven’t heard of APA, it’s an energy infrastructure giant that’s invested in a number of different assets.

The key earnings generator is a huge gas pipeline network across Australia, but it also owns gas processing facilities, gas storage assets, a gas power station, electricity transmission, wind farms and solar farms.

I like APA’s diversification strategy across a number of areas. Impressively, it transports half of the nation’s gas usage – it’s an important part of the Australian energy system. Let’s look at how much passive dividend income a $20,000 investment could deliver.

$20,000 investment into this high-yield ASX 200 share

This business has one of the best records on the ASX – it has hiked its annual payout every year for the last 20 years in a row. That’s the second-longest growth streak on the ASX!

Payout growth isn’t guaranteed to continue forever, but increases do look likely for FY26 and beyond.  

APA has provided guidance that it intends to increase its payout to 58 cents per security in FY26, translating into a forward distribution yield of 6.2%.

If someone was to invest $20,000 into the high-yield ASX 200 share, it would unlock approximately $1,240 of annual income in FY26. Of course, that would just be the payout in the first year. I believe APA is likely to increase its payout to at least 59 cents per security in FY27 and 60 cents per security in FY28.

Why I expect further dividend income growth

I like the steady approach to its payout growth because it ensures the business has enough cash to continue investing in new assets.

For example, it announced at the start of December that it’s going to work with CS Energy to develop and own 80% of the proposed Brigalow Peaking Power Plant in Queensland. APA now has a $2.1 billion organic growth pipeline, which will add to cash flow generation once it has been completed, enabling larger payouts.

Gas could become an increasingly important part of baseload power as coal power plants turn off in Australia over the coming decade, so APA’s gas assets could become even more important than they already are. I’m optimistic that the business can continue to grow its distribution over the coming years.

The post Investors can target $1,240 a year in dividend income from $20,000 in this ultra-high-yielding ASX 200 gem – here’s how appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Apa Group. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.