Fortescue Ltd vs Coles Group Ltd shares: Which ASX blue chip could set you up for life?

If you’re searching for ASX blue chips to potentially “set you up for life”, you’re likely tossing up between companies with meaty dividends and strong market positions. Fortescue Ltd (ASX: FMG) and Coles Group Ltd (ASX: COL) are two giants, but they could hardly be more different: one’s a mining powerhouse riding the iron ore waves, the other a supermarket stalwart feeding Aussie families. Here’s how they compare if you’re weighing up Fortescue vs Coles shares right now.

The case for Fortescue

Fortescue is a global player in iron ore, operating extensive mines and infrastructure across Western Australia’s Pilbara. It’s established itself as one of the world’s largest iron ore producers, running everything from mines to ports and rail in-house. This scale delivers enviable efficiency and keeps Fortescue near the top of the cost curve.

A couple of fundamentals stand out for Fortescue:

• It offers a fully franked dividend yield of 7.11%, eye-catching even among ASX income stocks.
• Its price-to-earnings (P/E) ratio sits at 11.39, which looks reasonable for a major miner, especially compared to some industrial sectors.
• Market capitalisation is $46.77 billion, putting it among the ASX’s largest companies.

Fortescue has a track record of generous, reliable dividends — every payout shown is 100% franked. That could be compelling if you’re after income, especially when paired with ongoing global demand for iron ore.

The case for Coles

Coles is one of Australia’s best-known food and grocery retailers. With a vast store network and established online offering, Coles is many households’ primary destination for groceries and essentials. The company has been through significant change, spinning out from Wesfarmers in 2018, and now stands alone as a defensive mainstay on the ASX.

Coles’ key stats include:

• A current dividend yield of 3.26%, also fully franked for those who value tax-effective income streams.
• Its P/E ratio comes in at 29.43 — much higher than Fortescue’s. That’s not unusual for supermarkets, given their stable earnings and relative insulation from economic swings, but it is a significant gap.
• Market cap is $32.12 billion — smaller than Fortescue but still a blue chip heavyweight.

Coles has delivered consistent, fully franked dividends since rejoining the ASX. The latest annual payout is $0.74 per share, and the company’s reputation for steadiness might reassure investors wary of volatile sectors.

Valuation comparison

Here’s how Fortescue and Coles line up on some vital numbers:

	Fortescue	Coles
Market Cap	$46.77 billion	$32.12 billion
P/E Ratio	11.39	29.43
Dividend Yield	7.11% (100% franked)	3.26% (100% franked)
Earnings per Share (EPS)	0.931	0.812
Dividend per Share	1.08	0.74

Note: The P/E ratio and EPS for both companies may be based on different earnings definitions (historical, underlying, or forward), so the numbers won’t necessarily line up neatly for direct calculation.

The gap in dividend yield and P/E is stark. Fortescue trades at a much lower multiple and pays more than double Coles’ yield. However, Coles’ higher P/E likely reflects its lower risk profile and steady cash flows, while Fortescue’s earnings are more tightly linked to volatile iron ore prices.

Recent share price momentum

Comparing recent share price performance up to 16 October 2026:

• Fortescue closed at $15.19, up 1.13% for the day. However, its year-to-date return is down sharply at -26.1%.
• Coles Group closed at $23.90, down 1.52% that day, but boasts a year-to-date return of +15.1%.

Which is the better buy?

Both Fortescue and Coles are classic ASX blue chips, but each comes with a distinct risk-reward trade-off. On the numbers, Fortescue wows with its fat, fully franked dividend and lower P/E ratio. If I were hunting for passive income and the chance of cyclical upside, I’d have to give Fortescue the nod. However, that juicy dividend comes hand-in-hand with much more volatile earnings, as the past year’s negative 26% return reminds us. Coles, by contrast, is steady as she goes, with lower yield but consistent price gains and defensiveness — albeit at a steeper price-to-earnings multiple.

For building wealth over the long haul, my pick would be Fortescue. The sizeable, reliable income and current valuation look too tempting to ignore if you’re prepared for the iron ore rollercoaster. For those prioritising lower risk and steady defensiveness, I wouldn’t blame anyone leaning Coles — but for “set you up for life” potential, Fortescue edges it for me.

The post Fortescue vs Coles shares: Which ASX blue chip wins this month? appeared first on The Motley Fool Australia.

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• I’d buy 2,516 shares of Coles stock to aim for $250 a month of passive income
• Which ASX retailer is a better buy, Coles or Woolworths?
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Motley Fool contributor Laura Stewart 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. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial draft. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

I firmly believe that exchange traded funds (ETFs) can be an excellent way to build wealth over the long term.

They allow investors to access opportunities that might otherwise be difficult to reach, while spreading their money across a collection of companies rather than relying on individual shares.

But with so many ETFs available on the ASX, it can be hard to decide which ones to buy.

To narrow things down, here are three funds I think could be worth considering.

Betashares Asia Technology Tigers ETF (ASX: ASIA)

The first ASX ETF to look at is the Betashares Asia Technology Tigers ETF.

When people think about investing in technology, their attention often turns to Silicon Valley in the United States. But some of the world’s most important technology companies are based in Asia.

For example, Taiwan Semiconductor Manufacturing Company (NYSE: TSM), Samsung Electronics, and SK Hynix (NASDAQ: SKHY) play crucial roles in producing the chips and memory that power modern computing.

And with artificial intelligence (AI) driving demand for increasingly sophisticated hardware, these businesses could have significant growth opportunities ahead of them.

The fund also owns major Chinese technology companies, including Tencent and Alibaba (NYSE: BABA), providing exposure to digital services and online commerce.

Of course, technology spending can be cyclical, and Asian markets carry geopolitical risks. Nevertheless, this ETF could be an attractive way to invest in Asia’s growing importance to the global technology industry.

VanEck Morningstar Wide Moat ETF (ASX: MOAT)

Another ASX ETF worth considering is the VanEck Morningstar Wide Moat ETF.

This popular fund invests in US businesses that have sustainable competitive advantages, allowing them to defend their profitability against rivals.

These advantages might come from powerful brands, high customer switching costs, or business models that competitors would struggle to replicate.

But even a wonderful company can be a disappointing investment if investors pay too much for its shares. That’s why the fund also considers estimates of fair value when selecting its holdings.

Combining business quality with valuation discipline is arguably a sensible approach for investors planning to hold their investments for many years.

Vanguard All-World ex-US Shares Index ETF (ASX: VEU)

A final ETF to consider is the Vanguard FTSE All-World ex-US Shares Index ETF.

US shares have dominated global markets in recent years, but there are plenty of successful companies operating elsewhere.

This fund makes it easy to invest in them. It holds thousands of shares across developed and emerging markets outside the United States, including businesses in Europe, Japan, China, Taiwan, and Australia.

Its holdings range from established financial institutions and consumer businesses to global technology and industrial leaders. This means investors aren’t relying entirely on the US market to deliver their international returns.

For investors wanting greater international diversification, this ETF could be an excellent long-term option.

The post Why VEU and these ASX ETFs could be top buys appeared first on The Motley Fool Australia.

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• 3 fantastic ASX ETFs for buy and hold investors
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Motley Fool contributor James Mickleboro has positions in Betashares Capital – Asia Technology Tigers Etf and VanEck Morningstar Wide Moat ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Taiwan Semiconductor Manufacturing and Vanguard International Equity Index Funds – Vanguard Ftse All-World ex-US ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Alibaba Group. The Motley Fool Australia has recommended VanEck Morningstar Wide Moat ETF. 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) stock is one of the leading large ASX businesses for passive income, in my view.

Think about it, food is one of the most fundamental things that we need to live. Coles is one of the biggest food retailers in the country. Only Woolworths Group Ltd (ASX: WOW) has a larger market share in Australia.

Coles has a powerful business model which is hard to challenge with its advanced distribution centres, customer fulfilment centres, e-commerce offering and the convenience of a national supermarket network.

The company has delivered regular revenue, profit and dividend growth since it split from Wesfarmers Ltd (ASX: WES) several years ago, as it benefited from population growth, inflation and business expansion.

While its profit is not shooting higher like a tech stock, it has proven it can deliver regular financial progress, including rising dividends.

Coles is a contender for regular passive income of $250 per month or more.

How Coles stock can deliver $250 per month of passive income

The business doesn’t pay dividends every month, it pays every six months. So I think it’s better to treat the goal as an annual target. $250 per month translates into $3,000 per year of passive income.

In FY26, Coles’ board of directors hiked the annual dividend per share by 13% to 78 cents per share following a 13.7% rise in the underlying net profit to $1.26 billion and a 2.8% rise in revenue to $45.6 billion.

But the 2026 financial year dividend has already happened, so I think it’s more useful to look at what the next annual dividend could be.

The projection on Commsec suggests the company could hike its annual dividend by 7% year-over-year to 83.5 cents per share in FY27.

At the time of writing, that works out to be a forward dividend yield of 3.5% excluding franking credits and 5% including franking credits. I think that’s a solid starting point for investors looking to buy Coles shares today.                  

To generate an average of $250 per month, or $3,000 per year of dividend cash, it would require 3,593 Coles shares excluding franking credits.

If we include the franking credits as part of the income goal, it would require 2,516 Coles shares for the dividend cash.

If I were focused on resilient dividend income, I’d be happy to make that investment, given that its dividend has increased every year over the past decade.

Is this a good time to invest?

According to CMC Invest, there have been 11 broker ratings within the last three months, with six of those analyst ratings being a buy and five being a hold.

The average price target of those 11 ratings is $24.67, implying the Coles stock price could rise by just 3% over the next 12 months, from where it is at the time of writing. It’s a solid business for passive income, but expert analysts suggest it’s better to look at other ASX shares with stronger return potential.

The post I'd buy 2,516 shares of Coles stock to aim for $250 a month of passive income appeared first on The Motley Fool Australia.

More reading

• Which ASX retailer is a better buy, Coles or Woolworths?
• NAB vs Coles: Which is the better ASX blue-chip buy for SMSF investors?
• I look for 3 things in a retirement stock. These 5 shares have them all
• 3 ASX shares I think could still be thriving in 2040
• 3 reasons I would invest $10,000 in Coles shares

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 positions in and has recommended Wesfarmers. The Motley Fool Australia has recommended Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.