It’s been a spectacular year for investors in Australia’s biggest ASX lithium stocks.

Over the past 12 months, shares in Mineral Resources Ltd (ASX: MIN) have surged around 213%, while PLS Group Ltd (ASX: PLS) has done even better, rocketing approximately 301%.

The rally has been driven by a powerful recovery in the lithium sector after several difficult years.

Momentum has cooled in recent weeks, however. Both stocks have retreated over the past month as lithium prices eased.

That’s hardly surprising. Lithium carbonate prices climbed roughly 155% over the past year, providing a major tailwind for producers. But after falling around 14% over the past month, investors are once again questioning how much upside remains.

Even so, anyone who invested $5,000 in either stock a year ago would still be sitting on an eye-catching gain.

Here’s what that investment would be worth today.

$5,000 invested in Mineral Resources

A $5,000 investment in Mineral Resources 12 months ago would now be worth approximately $15,650.

While the company has benefited from the rebound in lithium, it’s not a pure-play producer.

Unlike many ASX lithium stocks, Mineral Resources also has sizeable mining services and iron ore operations, giving investors broader commodity exposure.

That diversification has proven to be valuable. The company recently delivered its strongest half-year result on record, reporting revenue of $3.1 billion and EBITDA of $1.2 billion.

A standout contributor was the rapidly expanding Onslow Iron project, which has emerged as a major earnings driver alongside improving lithium market conditions. The growing iron ore business helps reduce Mineral Resources’ dependence on lithium alone, making earnings less sensitive to swings in a single commodity.

That doesn’t eliminate risk, however. Both iron ore and lithium prices remain important profit drivers, and weakness in either market could weigh on earnings and investor sentiment.

$5,000 invested in PLS Group

The returns have been even more remarkable for PLS Group shareholders.

A $5,000 investment made 12 months ago would now be worth approximately $20,050, effectively quadrupling an investor’s original capital.

Unlike some of its peers, PLS’ rally hasn’t been driven solely by rising lithium prices. The $18 billion mining giant has also delivered impressive operational growth.

In its latest half-year result, the ASX lithium stock reported revenue of $624 million, up 47% from the previous corresponding period as both realised lithium prices and sales volumes increased.

Underlying EBITDA surged 241% to $253 million, while EBITDA margins expanded dramatically to 41%, compared with just 17% a year earlier.

Its flagship Pilgangoora operation remains one of the world’s largest hard-rock lithium mines, providing significant scale and cost advantages as global demand for battery materials continues to grow.

Like every lithium producer, though, PLS remains exposed to commodity prices. If lithium continues to weaken, profitability could come under pressure despite strong production growth.

Foolish takeaway

The recent pullback is a timely reminder that ASX lithium stocks remain highly leveraged to commodity prices. That said, the underlying businesses continue to strengthen. Production is rising, earnings have rebounded sharply, and major growth projects are progressing.

If lithium prices stabilise – or resume their upward trend – both Mineral Resources and PLS Group could find fresh momentum.

The post $5,000 invested in these ASX lithium stocks a year ago is now worth… appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther 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.

National Australia Bank Ltd (ASX: NAB) shares have pulled back from their highs, and I think the lower price has made the bank a more attractive investment.

The NAB share price is currently around $37.51. At that level, I think investors are getting a reasonable valuation, a good dividend yield, and exposure to one of Australia’s strongest banking franchises.

Here are three reasons I would buy NAB shares now.

The valuation looks reasonable

The first reason is valuation. According to CommSec, consensus estimates suggest NAB could generate earnings per share of $2.43 in FY26 and $2.53 in FY27.

Based on the current share price, that puts the bank on a price-to-earnings ratio of around 15.4 times FY26 earnings and 14.8 times FY27 earnings.

I would not call that incredibly cheap, but it does look like reasonable value for one of Australia’s major banks.

Bank shares have faced pressure as investors weigh higher interest rates, housing market uncertainty, credit quality, and competition. Those risks are worth taking seriously. But NAB remains a large, profitable business with a major role in Australian banking.

At this price, I think the valuation is much easier to justify than it was when the share price was closer to its highs.

The dividend yield is attractive

The second reason is income. CommSec consensus estimates point to dividends per share of $1.70 in FY26 and $1.72 in FY27.

At the current share price, that implies forward dividend yields of roughly 4.5% and 4.6%.

That is a solid starting yield, in my view, particularly for investors looking for passive income from ASX shares.

A $10,000 investment at around $37.51 per share would buy about 267 shares. Based on the forecast FY26 dividend of $1.70 per share, that investment could generate roughly $453 in annual dividends. Based on the FY27 forecast dividend of $1.72 per share, the income would be around $459.

That is before tax and any franking credits.

Dividends are never guaranteed, and banks can adjust payouts if conditions change. But I think NAB’s forecast income looks attractive, especially when combined with the possibility of capital growth over time.

The business banking exposure is useful

The third reason is NAB’s position in business banking.

Australia’s major banks all have large mortgage books, but NAB has long had a strong reputation in business banking. I think that gives it a key point of difference.

Businesses need loans, deposits, transaction accounts, payment services, working capital support, and relationships with bankers who understand their operations. That creates a large pool of customers that can be valuable over many years.

This does not make NAB immune from an economic slowdown. If business confidence weakens or bad debts rise, earnings could come under pressure.

But over the long term, I like banks that are deeply connected to the real economy. NAB has scale, brand strength, customer relationships, and a large deposit base. Those qualities can help it keep generating profits and supporting dividends through different parts of the cycle.

Foolish takeaway

I think NAB shares look attractive at current levels.

The valuation appears reasonable on consensus earnings forecasts, the forward dividend yield is in the mid-4% range, and the bank has a strong position in Australian business banking.

There are still risks from the economy, competition, bad debts, and regulation. But at around $37.51, I think the balance of income, value, and long-term business quality makes NAB shares worth buying now.

The post 3 reasons to buy NAB shares now appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino 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.

Coles Group Ltd (ASX: COL) shares are not exactly flying under the radar.

The supermarket giant closed Friday’s session at a record high of $24.41, which means investors are not being offered a bargain-basement price.

Even so, I think Coles shares could be worth buying with $10,000.

In an uncertain economic environment, I like the idea of owning businesses that sell products people keep buying. Coles has that defensive quality, and I think that can be valuable even when the valuation is not obviously cheap.

Why Coles appeals to me

Coles is one of the most important retailers in Australia.

Its supermarkets sell food, household essentials, fresh produce, pantry staples, and everyday items that customers need in good times and bad. That does not make the business immune from pressure, but it does give Coles a more reliable demand profile than many discretionary retailers.

The company’s recent third-quarter update showed that momentum is still solid. Supermarket sales revenue increased 4% to $9.8 billion, while comparable sales growth was 3.6%. Excluding tobacco, supermarket sales growth was 5.7%.

I think that is a useful sign. Customers are still shopping at Coles, and the company continues to focus on value, availability, loyalty, and online convenience.

The ecommerce side also looks encouraging, with sales increasing 24.8% and penetration rising to 13.6%. Grocery shopping is still a store-led category, but online ordering and delivery can add another driver of growth if Coles keeps improving the customer experience.

What about the valuation?

The challenge is price. According to CommSec, consensus estimates suggest Coles could generate earnings per share of 90 cents in FY26, 96.6 cents in FY27, and $1.12 in FY28.

At $24.41, that puts the shares on a price-to-earnings ratio of around 27 times FY26 earnings, 25 times FY27 earnings, and 22 times FY28 earnings.

That is not cheap. But I do not think every good investment needs to start with a low multiple. A defensive business with reliable demand, a strong brand, scale, and the ability to keep growing earnings can deserve a higher rating.

The important point is being realistic. Coles may not offer the same upside as a beaten-down growth share. But it can add stability, income, and exposure to essential household spending.

The passive income angle

Coles also offers a useful dividend profile. CommSec consensus estimates point to dividends per share of 75.5 cents in FY26, 82 cents in FY27, and 95.3 cents in FY28.

At the current share price, that implies forward dividend yields of around 3.1%, 3.4%, and 3.9%.

A $10,000 investment at $24.41 would buy about 410 shares. Based on those dividend forecasts, that holding could generate roughly $310 in FY26, $336 in FY27, and $391 in FY28, before tax and any franking credits.

That is not the highest yield on the ASX, but I think it is attractive when paired with Coles’ defensive qualities.

Foolish takeaway

I think Coles shares are worth buying with $10,000, even at a record high.

The valuation means I would not expect explosive returns, and investors need to accept that they are paying up for quality. But I like the defensive nature of the business, the steady demand for groceries, the improving online channel, and the forecast dividend growth.

In a market where the economic outlook still feels uncertain, Coles is the type of ASX share I would be happy to own for the long term.

The post Should I invest $10,000 in Coles shares? appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino 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.