APA Group (ASX: APA) shares could be one of the best options for passive income on the ASX. Given that status, I think it’s one of the leading options for retirees to consider.

If I were a retiree, I’d want to focus on ASX shares I’m highly confident would keep paying, even during rough times. When a business already has a track record of delivering rising payments through lean economic times, I think that could be a useful indicator of what could happen in the next downturn.

APA is a large energy infrastructure business with a number of assets including a huge national network of gas pipelines, gas processing, gas storage, gas power stations, solar farms, wind farms, batteries and electricity transmission.

With that in mind, let’s look at what makes it so appealing for retirees.

Growing distributions

In my view, APA has the second-best record on the ASX for consecutive years in a row of passive income growth. It has increased its payout 22 times in a row.

In other words, the business has been hiking its distribution going back to before the GFC in the late 2000s. If a company can grow its payout during the GFC and every year since, I think it’s a very compelling ASX option for reliable dividends.

The business has guided that it will grow its FY27 distribution by another 1.7% to 59 cents per security. That’ll be the 23^rd year in a row that the business has grown its payout, which retirees can love.

Good dividend yield

There are some S&P/ASX 200 Index (ASX: XJO) shares that regularly grow their dividend, but the dividend yield is quite low. APA shares provide investors with a significant distribution yield.

If we look at the projected payout for FY27, the potential dividend yield is likely to be pleasingly high.

At the time of writing, the forecast payout translates into a distribution yield of 5.1%. That’s competitive with what term deposits are currently offering.

Growth of cash flow

APA funds its distributions from the cash flow that its portfolio of assets generates.

There are two elements that are supporting larger increases.

First, nearly all of its revenue is linked to inflation, so there’s a steady increase for APA.

Second, it’s regularly expanding its portfolio of assets with extended pipelines, building new assets and the occasional acquisition.

In FY26, it noted $546 million of capital investment in growth projects, including the Brigalow peaking power plant and pipeline, the East Coast gas grid expansion and the Sturt Plateau Pipeline. It now has an organic growth development pipeline of around $3.5 billion. It has longer-term opportunities beyond that current pipeline, too.

Overall, there’s a lot to like with ASX shares for retirees.

The post Why APA shares are a retiree's dream for FY27 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 has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Demand for rare earths is expected to grow steadily in the coming years, as sectors including electric vehicles, robotics, drones and data centres drive more use of the minerals.

One of the issues with the sector has been the dominance of China in the market, which has driven Western governments to support more project development in their own countries.

Broker Canaccord Genuity says this is one of the driving forces behind a strong outlook for ASX-listed companies which are either producing rare earths or intend to.

Industry demand for rare earths to remain strong

The broker has issued a new research note which forecasts demand for key magnet rare earths to grow at a compound annual rate of 7% to 2035.

CG added that government support was making more projects viable.

They said:

Government-backed financing/floor pricing has firmed up new ex-China mine developments, with our revised forecasts now calling for more balanced market conditions in the global NdPr market from 2028-30. This is mirrored in heavy rare earths (DyTb, Y, Gd, etc.) where Chinese export controls/Western pricing premiums have incentivised plans for new Western separation capacity. Longer-term, we continue to forecast deficits in both markets given demand growth from existing and emerging segments (i.e. humanoid robotics) and challenges facing Western supply.

CG said there were “numerous challenges” facing the West’s objective of achieving independence from China, “including mismatches between planned mine supply and oxide separation, and significant shortfalls in metallisation/alloying”.

They added:

In summary, our research points to China maintaining market dominance, with shortfalls in Western supply (and the likelihood of ongoing Chinese export controls) supporting bifurcated markets and pricing premiums (most evident in heavy rare earths).

CG said 2028 would be a key inflection point for supply with a number of ex-China projects coming online.

Plenty of buying opportunities in ASX rare earths companies

Regarding specific companies, CG has rated six ASX-listed rare earths companies as speculative buys.

These are: Arafura Resources Ltd (ASX: ARU) with a price target of 40 cents; Brazilian Rare Earths Ltd (ASX: BRE) with a price target of $7.35; Hastings Technology Metals Ltd (ASX: HAS) with a price target of 30 cents; Ionic Rare Earths Ltd (ASX: IXR) with a price target of $1.25; St George Mining Ltd (ASX: SGQ) with a price target of 26 cents; and Viridis Mining Ltd (ASX: VMM) with a price target of $6.50.

CG has a buy rating on Iluka Resources Ltd (ASX: ILU) with a price target of $7.25 and Lynas Rare Earths Ltd (ASX: LYC) with a price target of $23.

The post Why are these 8 ASX rare earths companies rated a buy? appeared first on The Motley Fool Australia.

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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.

Pro Medicus Ltd (ASX: PME) shares closed the day up around 3% on Wednesday afternoon, at $184.83.

The increase means the shares have now jumped 13% over the past week alone. The latest rally has helped recoup some of the losses shed by the company over the past 12 months. But they’re still down 17% for the year-to-date and 36% lower than 12 months ago.

Why is everyone rushing to buy Pro Medicus shares this week?

The ASX healthcare company has come into focus this week after it announced two new seven-year contract wins.

On Monday, Pro Medicus announced its wholly owned US subsidiary, Visage Imaging, had signed a A$24 million contract with Billings Clinic – Logan Health in the US. The implementation will see Visage 7’s entire platform integrated, including image distribution within the client’s electronic health record system. Rollout planning is underway, aiming for a go-live date in early 2027.

The announcement was followed by news of a second contract deal on Wednesday. Pro Medicus announced a A$43 million contract with Virtua Health, also in the United States, for a unified imaging platform comprising Visage 7 Viewer, Workflow, Open Archive, and Cardiology products. Planning is underway and with a go-live date in around the second or third quarter of the 2027 calendar year. 

The announcements have clearly been well received by investors. 

The new contract wins continue a strong run of major client acquisitions and contract renewals this year.

They also come at a time when the broader healthcare sector is continuing to rebound after a difficult first-half to the calendar year.

Are the shares a buy, sell, or hold after the latest rally?

Most experts are still very optimistic about the outlook for Pro Medicus shares over the next 12 months.

TradingView data shows that the majority (nine out of 15) have a buy/strong buy rating on the shares. Another five rate the stock a hold, and one has a strong sell rating.

The average $212.74 target price sits around 15% above the trading price at the time of writing, implying a decent upside ahead over the next 12 months.

Some are even more optimistic and forecast the shares to jump up to 35% higher to $250 each within the next year, at the time of writing.

Citi recently renewed its buy rating on the shares with a $225 target.

The team at Morgans also think Pro Medicus shares are in the buy zone. They upgraded their rating to a buy with a $230 price target following its contract wins. The team commented that while the individual contracts in FY27 are modest, they’re consistent in size, term, and scope. This helps to broaden the company’s pipeline beyond large integrated delivery networks.

The post Up 13%: Why is everyone buying Pro Medicus shares this week? appeared first on The Motley Fool Australia.

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