Dividend investing has long been a favourite strategy for Australian investors. And while market trends come and go, the appeal of generating regular income from a portfolio of shares like BHP Group Ltd (ASX: BHP) and Telstra Group Ltd (ASX: TLS) remains as strong as ever.

But dividend investing is not just about income. When done well, it can also be a powerful way to build wealth over time.

More than just passive income

At its simplest, dividend investing involves buying shares in companies that return a portion of their profits to shareholders.

This income can be used to fund lifestyle expenses or, importantly, reinvested to accelerate portfolio growth.

That reinvestment is where things get interesting. By using dividends to buy more ASX shares, investors can benefit from compounding. Over time, this can lead to a snowball effect, where both capital and income grow together.

The power of reliability

One of the key advantages of dividend investing is the focus on established, profitable businesses.

Companies that consistently pay dividends are often those with strong cash flows, resilient business models, and disciplined management teams. These characteristics can make them more stable during periods of market volatility.

In Australia, sectors such as banking, supermarkets, infrastructure, and telecommunications have traditionally been strong dividend payers. These businesses provide essential services, which helps support earnings even when economic conditions are challenging.

Franking credits

A unique feature of dividend investing in Australia is the benefit of franking credits.

Fully franked dividends come with a tax credit for the corporate tax already paid by the company. For many investors, particularly retirees, this can significantly increase the effective yield of their investments.

This system makes Australian dividend shares especially attractive compared to international markets, where similar tax advantages may not exist.

Not all dividends are created equal

While high dividend yields can be tempting, they are not always a sign of quality.

In some cases, an unusually high dividend yield may reflect underlying problems within a company. If earnings are under pressure, dividends may be cut, which can also lead to share price declines.

That is why it is important to look beyond the headline yield. Factors such as payout ratios, earnings growth, and balance sheet strength can provide a better indication of whether a dividend is sustainable.

Balancing income and growth

A common misconception is that dividend investing means sacrificing growth. In reality, many of the best dividend-paying companies also deliver steady earnings expansion over time.

This creates a powerful combination. Investors receive regular income while also benefiting from capital appreciation.

By blending reliable dividend payers with companies that have the potential to grow their distributions over time, it is possible to build a portfolio that supports both current income and future wealth.

A long-term strategy

Like any investment approach, dividend investing requires patience.

Markets will fluctuate, and dividend payments may vary from year to year. But over the long run, owning high-quality businesses that generate consistent cash flow can provide both stability and growth.

For investors seeking a straightforward and proven way to build wealth, dividend investing remains a strategy well worth considering.

The post Why ASX dividend investing still works for building long-term wealth appeared first on The Motley Fool Australia.

More reading

• How to build a $10,000 annual income with ASX shares
• Buying BHP shares? Here’s how AI is boosting the mining giant’s revenue
• Monadelphous wins $145m of new and renewed resources sector contracts
• Buy, hold, or sell? South32, Capstone Copper, and BHP shares
• 3 top ASX dividend shares for income investors to buy

Motley Fool contributor James Mickleboro 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 Telstra 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.

Do you have a high tolerance for risk? If you do, then it could be worth considering an investment in the small-cap ASX share in this article.

That’s because Morgans believes the exciting company could be a small-cap ASX share to buy now.

Which small-cap ASX share?

The small cap that Morgans is bullish on is 6K Additive Inc (ASX: 6KA).

It describes itself as a US-based manufacturer and trusted supplier of premium metal powders for additive manufacturing and alloy additions for the aluminium melt industry. Importantly, it notes that all its products are made from sustainable sources.

The company highlights that its manufacturing process produces the highest quality metal powders that are truly spherical, void of porosity and satellites with better unit economics than competing technologies.

What is the broker saying?

Morgans is positive on the company’s outlook, highlighting that it has a growing customer base filled with some very large names. It said:

6K Additive (6KA) is a US-based advanced materials company that upcycles metal waste into engineered feedstock, producing high-value powders and alloys for aerospace, defence, medical, energy, and industrial applications. The company delivered 4Q25 revenue of US$5.6m (representing a run-rate of ~US$22.4m pa) with over 100 active customers including ABB, Boeing and Ford.

6KA has a potential sales pipeline of ~US$250m pa and plans to use proceeds from its recent IPO (Dec-25) to consolidate and scale its operations in the US. This will result in a 5x increase in powder production capacity (from 200mt to 1,000mt) and deliver significant margin improvement and production efficiency.

In light of this, the broker has initiated coverage on the small-cap ASX share with a speculative buy rating and $1.30 price target.

Based on its current share price of 88 cents, this implies potential upside of almost 50% for investors over the next 12 months.

Commenting on its speculative buy recommendation, the broker said:

We initiate coverage on 6KA with a SPECULATIVE BUY rating and a target price of $1.30. Backed by proven technology, a closed-loop model, and broad customer validation, we believe the company is well-positioned to benefit from strong demand in metal additive manufacturing and US government initiatives to reshore the sourcing and processing of critical minerals.

Trading on 3.7x FY27F (Jun Y/E equivalent) EV/Revenue versus a domestic peer median of 9.5x, we view 6KA’s valuation as relatively attractive – though suited to more assertive investors.

The post Morgans says this exciting small-cap ASX share could rise almost 50% appeared first on The Motley Fool Australia.

More reading

• These ASX blue chips now look too cheap to ignore
• Brokers name 3 ASX shares to buy right now
• Why this ASX mining stock could be a strong buy after major milestone
• Broker sees 26% upside in ASX healthcare share behind Chemist Warehouse
• Why Beetaloo, Fortescue, Orora, and Whitehaven Coal shares are dropping today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Boeing. 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 is not often that high-quality blue chip shares trade at discounted valuations. These are typically businesses with strong competitive advantages, global earnings, and long track records of performance.

But from time to time, even the best companies fall out of favour.

Right now, a handful of ASX blue chips appear to be in that position. Here are three that could be worth a closer look.

CSL Ltd (ASX: CSL)

CSL is widely regarded as one of Australia’s highest-quality companies, but the biotech giant’s shares have come under pressure in recent times.

This has been driven by earnings misses, margin pressures, a tough operating environment, and leadership changes.

However, these are largely transitional issues rather than structural ones.

CSL still operates a global leader in plasma therapies and vaccines, with strong demand drivers linked to ageing populations and rising healthcare needs. As plasma collection normalises and efficiencies improve, there is potential for margins to recover.

For long-term investors, this could be one of those rare opportunities to buy a premium healthcare business at a more reasonable price.

Cochlear Ltd (ASX: COH)

Another ASX blue chip that could be looking attractive is Cochlear.

Short-term concerns around softer demand have weighed on sentiment. But this does not change the underlying demand for hearing solutions.

Cochlear benefits from a powerful structural tailwind. Hearing loss is a growing global issue, and access to treatment is still underpenetrated in many regions.

The company also enjoys a strong competitive position, supported by technology leadership and a global distribution network.

For investors willing to look beyond near-term noise, Cochlear’s long-term growth story appears firmly intact.

Treasury Wine Estates Ltd (ASX: TWE)

A third ASX blue chip that may be undervalued is Treasury Wine Estates.

The company has faced a number of challenges in recent years, including shifting consumer preferences and disruptions to key export markets. These issues have weighed on its share price and created uncertainty around its outlook.

However, Treasury Wine is in the process of reshaping its portfolio.

The focus is increasingly on premium and luxury brands, where margins are higher and demand tends to be more resilient. This shift is helping the company reduce reliance on lower-margin products and improve the quality of its earnings.

In addition, improving trade dynamics and stabilising conditions in key markets could provide a tailwind over time.

While not without risks, Treasury Wine Estates could offer a compelling turnaround opportunity for patient investors.

The post These ASX blue chips now look too cheap to ignore appeared first on The Motley Fool Australia.

More reading

• Down 53%, are Treasury Wine shares a true gem or a value trap?
• CSL shares: 3 reasons to buy and 3 reasons to sell
• Buy, hold, sell: CSL, Magellan, and Woodside shares
• What’s Bell Potter’s updated view on CSL shares?
• Why are CSL shares struggling to regain momentum?

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

It has been another busy week for many of 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 right now:

Genesis Minerals Ltd (ASX: GMD)

According to a note out of Bell Potter, its analysts have retained their buy rating and $9.90 price target on this gold miner’s shares. The broker has been looking ahead to the release of its third-quarter update this month. While it is expecting a small decline in production compared to the last quarter, it is forecasting production ahead of consensus estimates. Outside this, the broker remains very positive on gold and believes Genesis Minerals would be a good way to gain exposure to it. This is especially the case given the discount its shares trade on compared to peers. The Genesis Minerals share price is trading at $6.54 this afternoon.

Goodman Group (ASX: GMG)

A note out of UBS reveals that its analysts have retained their buy rating and $33.92 price target on this industrial property company’s shares. This follows news that Goodman has formed a joint venture with DataBank for its Los Angeles data centre. This will enable the launch of a new 32MW facility in the city, which is one of the most supply-constrained data centre markets in the United States. UBS is positive on the deal and believes it could generate strong profits. Overall, the broker highlights that this deal demonstrates Goodman’s ability to secure partners and execute on its data centre strategy. The Goodman share price is fetching $27.89 at the time of writing.

Sigma Healthcare Ltd (ASX: SIG)

Analysts at Morgans have upgraded this pharmacy chain operator and wholesale distributor’s shares to a buy rating with a $3.36 price target. According to the note, the broker believes Sigma is well-placed to deliver strong earnings growth over the medium term. This is expected to be underpinned by same store sales growth, store rollouts, and synergies from the Chemist Warehouse merger. And given recent share price weakness, it sees now as an opportune to invest. The Sigma Healthcare share price is trading at $2.72 today.

The post Brokers name 3 ASX shares to buy right now appeared first on The Motley Fool Australia.

More reading

• Broker sees 26% upside in ASX healthcare share behind Chemist Warehouse
• Which cheap ASX 200 gold stock could rise over 50%?
• 7 ASX 200 shares just upgraded to strong buy ratings
• How to invest $1,000 per month in ASX shares and build long-term wealth
• How to invest $300 a month in Australian shares to target a $50,000 annual second income

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

If you are hunting for exposure to the mining sector, then it could be worth considering the ASX mining stock in this article.

That’s because the team at Bell Potter believes it could be a strong buy following the achievement of a major milestone.

Which ASX mining stock?

The stock that has caught the eye of Bell Potter is Develop Global Ltd (ASX: DVP).

It notes that the company operates under a hybrid model as an underground mining contractor and owner of three mining assets. These are the Woodlawn Zinc-Copper Mine, the Sulphur Springs Zinc-Copper Project, and Pioneer Dome. The latter is a hard rock lithium deposit.

Bell Potter highlights that the ASX mining stock has achieved steady-state production ahead of its nameplate processing capacity rate. It said:

DVP announced steady-state production exceeded the nameplate processing capacity rate of 850ktpa during the March 2026 quarter. Mined tonnes grew 46% QoQ to 181,973t, with stoping tonnes rising 53% QoQ and processed tonnes lifted 25% QoQ to 176,550t (BPe 185,000t). During March, mined ore was 80,510t (966ktpa annualised) and processed ore was 77,741t (933ktpa annualised).

Metal concentrate tonnes rose 50% QoQ to 14,219t and metal concentrate value rose 66% QoQ. We are expecting to see historically low zinc TC/RC and negative copper TCs translate into an expansion in Net Smelter Returns and net revenue.

The good news is that this comes at a time when commodity prices are looking favourable for Develop Global.

But the positives may not end there. Bell Potter highlights that there are a number of upcoming catalysts that could be a boost to its share price. It adds:

Upcoming catalysts: 1) Demonstration of Woodlawn earnings and FCF growth (at least consistent with BPe); 2) updates on Woodlawn exploration; 3) Sulphur Springs FID and financing package finalisation; 4) a third Mining Services contract award; and 5) Pioneer Dome offtake and financing.

Strong potential returns

According to the note, Bell Potter has retained its buy rating on the ASX mining stock with an improved price target of $6.50.

Based on its current share price of $5.51, this implies potential upside of 18% for investors over the next 12 months.

Commenting on its buy recommendation, the broker said:

Woodlawn steady-state production is coinciding with favourable copper, zinc and silver market fundamentals, bolstering the case for consensus outperformance. The strong operational track-record at Woodlawn should give investors comfort in DVP’s ability to deliver similar timely outcomes at Sulphur Springs and Pioneer Dome.

The post Why this ASX mining stock could be a strong buy after major milestone appeared first on The Motley Fool Australia.

More reading

• Brokers name 3 ASX shares to buy right now
• Broker sees 26% upside in ASX healthcare share behind Chemist Warehouse
• Why Beetaloo, Fortescue, Orora, and Whitehaven Coal shares are dropping today
• This ASX critical minerals company could more than double in value: Broker
• Could this ASX-listed gold mine developer really increase six-fold?

Motley Fool contributor James Mickleboro 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.

Morgans has just upgraded its rating on ASX healthcare share Sigma Healthcare Ltd (ASX: SIG) due to ongoing share price weakness.

The Sigma Healthcare share price is $2.73 on Friday, up 0.9% today but down 7.3% in the year to date (YTD).

Sigma Healthcare merged with Chemist Warehouse last year, and also owns other pharmacy chains, Amcal and Discount Drug Stores.

The blockbuster merger, completed in February 2025, sent the Sigma Healthcare share price to a multi-decade high of $3.28 by June.

The merged group now supports more than 880 franchised pharmacies and supplies more than 3,500 chemists across Australia. 

It has operations in New Zealand, Ireland, and the United Arab Emirates (UAE) as well.

Market exuberance around the deal began to wear off in the second half of last year.

The Sigma share price has fallen 17% since its peak as the broader healthcare sector also encountered multiple headwinds.

Sigma Healthcare shares touched a 15-month low of $2.58 apiece last month.

Morgans ‘prescribing long term growth’

In a new note released yesterday, Morgans said ongoing share price weakness had prompted it to upgrade the ASX healthcare share.

Morgans titled its note ‘prescribing long term growth’ and moved its rating up from accumulate to buy.

The broker kept its 12-month share price target at $3.36.

Morgans said it is forecasting about 20% growth in earnings before interest and taxes (EBIT) over the next few years.

The broker said it expects strong like-for-like sales growth and new stores to be rolled out domestically and internationally.

It also anticipates operating efficiencies and about $100 million per annum in synergies by FY29.

The broker commented:

Given the share price weakness, we have upgraded our recommendation to BUY (from ACCUMULATE) with an unchanged target price of $3.36 and 26% upside.

Morgans previously described Sigma Healthcare’s 1H FY26 report as “solid” and in line with consensus expectations.

What do other experts think?

Ord Minnett and Jefferies also upgraded Sigma Healthcare shares to a buy rating over the past few weeks.

Ord Minnett lowered its 12-month target from $3.40 to $3.30, while Jefferies has a target of $3.05.

Meanwhile, RBC Capital recently initiated coverage on the ASX healthcare share with a hold rating and a $2.50 target.

Macquarie also has a hold rating and lifted its share price target from $3 to $3.20 early last month.

Jarden also upgraded Sigma Healthcare shares to a buy rating in late February, with a $3.60 price target.

The post Broker sees 26% upside in ASX healthcare share behind Chemist Warehouse appeared first on The Motley Fool Australia.

More reading

• 5 ASX 200 shares including WiseTech and Xero plumbing new 52-week-plus lows on Monday
• 2 ASX shares highly recommended to buy: Experts
• Does this ASX 200 stock’s fall make it a no-brainer buy?
• ASX 200 healthcare shares down 33% in a year as heavyweights hit multi-year lows
• 3 ASX shares to buy for magnificent long-term growth!

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

The S&P/ASX 200 Index (ASX: XJO) is on course to end the week in the red. In afternoon trade, the benchmark index is down 0.3% to 8,947.4 points.

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

Beetaloo Energy Australia Ltd (ASX: BTL)

The Beetaloo Energy share price is down 13% to 30 cents. This has been driven by the energy company completing a $66.3 million placement this morning. These funds were raised at 28 cents per new share, which represents an 18.8% discount to its last close price. The company’s managing director, Alex Underwood, commented: “This Placement marks a pivotal moment for Beetaloo Energy. The participation by existing and new investors reflects genuine conviction in the potential scale of our Beetaloo Basin acreage and projects in the Northern Territory. […] we are now fully funded through to first pilot gas sales expected in Q4 2026, a milestone that we believe will be transformational for Beetaloo Energy and for Australia’s domestic gas supply.”

Fortescue Ltd (ASX: FMG)

The Fortescue share price is down 2% to $20.09. This is despite the mining giant announcing that it is accelerating the delivery of the world’s first industrial and fully integrated green energy grid. This grid is dedicated to eliminating fossil fuels from large-scale industry, at a scale comparable to a city. It expects implementation to ramp up within two years. It also confirmed that it expects to save US$100 million in fossil fuel costs by next year, and at the completion of its decarbonisation program, expects to see a further reduction in C1 unit costs of at least US$2 to US$4 per wet metric tonne. It believes this demonstrates that eliminating fossil fuels is not only achievable, but economically superior.

Orora Ltd (ASX: ORA)

The Orora share price is down a further 7% to $1.50. This packaging company’s shares have been sold off this week following the release of a trading update. Partly due to the war in the Middle East, Orora’s Saverglass has been underperforming expectations. Management now expects FY 2026 underlying EBIT for Saverglass to be in the range of 63 million euros to 68 million euros. This is down from its previous guidance of broadly in line with FY 2025 EBIT of 79.2 million euros. The company notes that shipping routes and overland access have been disrupted in the Middle East, forcing Orora to transition its facility into a closed-loop hot operation.

Whitehaven Coal Ltd (ASX: WHC)

The Whitehaven Coal share price is down 5.5% to $7.93. This morning, this coal miner announced a new US$600 million senior secured syndicated facility. It comes with a tenor of 4.5 years consisting of a US$475 million term loan and a US$125 million revolving credit facility. Whitehaven’s CEO, Paul Flynn, said: “With Whitehaven’s strengthened credit profile and successful integration – and initial improvements – of the Daunia and Blackwater metallurgical coal operations, we are focused on refinancing our acquisition credit facility and establishing a capital structure with more diverse, longer tenor and lower cost debt facilities.”

The post Why Beetaloo, Fortescue, Orora, and Whitehaven Coal shares are dropping today appeared first on The Motley Fool Australia.

More reading

• Buying Whitehaven Coal shares? Here’s how the miner just locked in $853 million in funding
• Why Magellan, Telix and Fortescue shares are grabbing headlines on Friday
• Fortescue shares ease, but this major update could keep momentum building
• Fortescue accelerates world’s first large-scale industrial green energy grid
• Why Orora, Select Harvests, Tamboran, and WiseTech shares are sinking today

Metallium Ltd (ASX: MTM) this week hit a major milestone, fulfilling a US government contract that shows its technology can recover gallium from waste streams, including semiconductor scrap and electronic waste.

The company has ticked off its to-do list under its Phase I Small Business Innovation Research (SBIR) contract with the US Department of War, it said this week, and delivered the program in six months – about half the time for a usual SBIR contract.

The analyst team at Canaccord Genuity has had a look at the company’s progress and has a speculative buy recommendation on the shares, along with a bullish share price target, which we’ll get to shortly.

Firstly, let’s have a closer look at what was announced this week.

Gallium in short supply

The company said regarding its progress:

The program, titled ‘Domestic Recovery of Gallium from Waste through Flash Electrothermal Chlorination’, applied Metallium’s proprietary FJH metal recovery technology to recover gallium from gallium-rich waste streams including semiconductor scrap and electronic waste materials. These feedstocks commonly contain germanium and other valuable strategic metals, expanding the potential impact of the technology across multiple critical material supply chains.

Metallium said the successful completion of the contract also set it up for further engagement with the Department of War, and noted that the US is 100% reliant on imports for its supplies of gallium, which is used in the manufacture of radar systems, semiconductors, and advanced communications systems.

The company noted that currently, China accounts for almost all primary gallium production globally.

Metallium’s president of US operations, Steve Ragiel, said regarding the contract:

More than the contract value itself, the program validates the capability of our Flash Joule Heating technology to address a key national security challenge for the United States. “Gallium is a critical material used in advanced semiconductors, radar systems, satellite electronics and next-generation defence technologies. Demonstrating a pathway to recover gallium domestically from waste streams aligns directly with U.S. strategic objectives to build resilient supply chains for defence-critical minerals. Completing the program in half the typical timeframe also highlights the maturity of our technology platform and the strength of our team. We look forward to pursuing further opportunities with the DoW and other U.S. federal agencies as we move toward commercial deployment.

Shares looking cheap

The Canaccord team said while the funding associated with the contract was not overly material, they believed it derisked a pathway to further Department of War contracts, and integration of Metallium’s technology into the US supply chain.

They added:

While waste volume data is limited, de-risking of Gallium/Germanium waste at scale could present a material revenue opportunity given the high in-situ value of Gallium/Germainum waste (up to US$600k/t) and MTM’s reported recoveries of over 90%.

Canaccord has a price target of $1.60 on Metallium shares compared with the current price of 65 cents. The company is valued at $482.6 million.

The post This ASX critical minerals company could more than double in value: Broker appeared first on The Motley Fool Australia.

More reading

• Another US milestone, another share price drop: What’s going on with this ASX stock?
• This ASX stock just landed a 10-year US deal and investors are buying in
• Why this ASX stock just dropped 7% after today’s announcement
• This innovative ASX metals company could deliver more than 100% upside: broker

Motley Fool contributor Cameron England 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.

Canaccord Genuity has recently run the ruler over Brightstar Resources Ltd (ASX: BTR).The analyst team thinks this company is extremely undervalued at the current share price.

We’ll get to their exact share price target shortly, but firstly let’s look at the company’s recent announcements.

Funds locked in

Brightstar is working on bringing its Sandstone and Goldfields projects in Western Australia into production, and to that end, recently locked in $193 million in new capital from an equity raise and another US$120 million from a new debt facility.

The good news for the company is that this means they will be fully-funded right through to production at Goldfields and up to a final investment decision for Sandstone.

At the Goldfields project the company is expecting to pour its first gold in the June quarter of 2027.

The company said it expected that project to deliver 75,000 ounces of gold per year and generate $1 billion in free cash flow over six years.

At the Sandstone project the company is expecting make a final investment decision in late calendar 2027 or early 2028.

Regarding the capital raise, Brightstar Managing Director Alex Rovira said:

We are delighted to have successfully executed on this funding package, particularly in the context of the challenging market conditions over the past weeks. With both the equity and debt components now settled, Brightstar is in an exceptionally strong position to deliver major gold production growth from the Goldfields Project while in parallel unlocking the value of our Sandstone Gold Project through drilling and feasibility work streams. A strong balance sheet positions Brightstar favourably against the backdrop of difficult capital markets and ensures a material capital buffer and contingency for our development requirements and funding for Sandstone.

Shares looking cheap

The Canaccord analysts said the capital raise meant the company should be “comfortably funded” through to first gold production.

They have modelled the Sandstone project to generate an average 150,000 ounces per year at an all in sustaining cost of $3013 per ounce, over a 10 year mine life.

They added:

We model pre-production capex of $400m (prev. $250m) with spend commencing in JunQ’28. Brightsar has flagged it plans to utilise free cash flow generated from the Goldfields Hub, as well as refinanced debt, to fund development of Sandstone. We forecast Brightstar to have cash of about $258m at end MarQ’28 and forecast the Goldfields Hub to generate about $200m in pre-tax free cash flow from JunQ’28-JunQ’29.

Canaccord reduced their price target on Brightstar from $2.80 to $2.40, still multiples of the current share price of 40.5 cents. The company is valued at $444.6 million.

The post Could this ASX-listed gold mine developer really increase six-fold? appeared first on The Motley Fool Australia.

More reading

• Why Ampol, Atlantic Lithium, Brightstar, and Premier Investments shares are rising today
• After a major capital raise this ASX gold company is fully-funded through to production
• Why Brightstar, EQ Resources, Novonix, and Pro Medicus shares are falling today
• ASX All Ords gold stock lifts off on exploration success

Motley Fool contributor Cameron England 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.

The Avita Medical Inc (ASX: AVH) share price is pushing higher again on Friday, extending its strong short-term rebound.

In afternoon trade, the Avita share price has shot up 8.33% to $1.30, taking its 1 week gain to almost 20%.

That surge is standing out against a weaker backdrop, with the S&P/ASX All Ordinaries Index (ASX: XAO) down 0.3% to 9,138 points. This comes as investors react to the latest developments in the Middle East between the US, Israel and Iran.

Fortunately for Avita, the rebound has been building for several sessions this week. The stock rose 6.31% on Wednesday and added another 1.69% on Thursday, despite widespread selling across the ASX.

Let’s take a look at what’s driving the shares higher.

Major US government deal supports sentiment

Avita’s update this week appears to be the key catalyst, centred on a 10-year agreement with the US Biomedical Advanced Research and Development Authority (BARDA).

Worth up to US$25.5 million, the deal is aimed at strengthening US emergency preparedness for large-scale burn casualty events.

BARDA will have access to 3,000 units of Avita’s RECELL treatment platform at any point during the contract period. Avita will also manage inventory, logistics support, and deployment readiness.

The full contract value includes procurement options that may not all be exercised. Avita said about US$3.97 million is expected to flow through as revenue over the 10-year term via annual access and readiness support fees.

The market is repricing execution risk

Friday’s rally is also notable because it comes after a prolonged period of heavy selling in the stock.

Even with this week’s rebound, Avita shares remain down more than 50% over the past 12 months. This shows how aggressively the market had already marked down execution risk and earnings uncertainty.

Foolish takeaway

Avita’s sharp rebound this week shows how quickly sentiment can turn when a beaten-down small-cap healthcare stock lands a credible long-term government contract.

The BARDA update clearly improves revenue visibility and gives the market a stronger reason to revisit the recovery outlook.

That said, it is still a small-cap healthcare stock with elevated execution risk, and this week’s rally does not change the fact that the shares remain down over the past year.

Personally, this is not the type of stock I would be chasing after a sharp short-term move. I would rather put my money into larger, more established businesses with steadier earnings and less share price volatility.

The post Why this ASX healthcare stock is surging while the market sinks on Middle East fears appeared first on The Motley Fool Australia.

More reading

• Broker sees 26% upside in ASX healthcare share behind Chemist Warehouse
• Why Beetaloo, Fortescue, Orora, and Whitehaven Coal shares are dropping today
• This ASX critical minerals company could more than double in value: Broker
• Could this ASX-listed gold mine developer really increase six-fold?
• 3 BetaShares ETFs I think can beat the market over 5 years

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