One of the big pieces of news to kick off the ASX trading week this Monday has been the announcement that waste management stock Cleanaway Waste Management Ltd (ASX: CWY) has entered into a Scheme Implementation Deed. This will see Cleanaway shares acquired in full by EQT Infrastructure.

As my Fool colleague Laura covered this morning, the deal proposes that EQT will acquire Cleanaway shares for a price of $3.095 in cash per share, representing a 34.5% premium to the three-month value-weighted average price of the company.

Although this news is still fresh, it seems that Cleanaway and the markets are treating it as a done deal. Cleanaway’s board has given the proposal the green light, stating “the Board is unanimous in its view that the Scheme delivers strong and certain cash value to shareholders, at a significant premium to Cleanaway’s undisturbed share price”. The board is unequivocally recommending that shareholders vote for the scheme.

The market has also seized the news with gusto, with Cleanaway shares currently up a stinking 20.05% at $2.96 each. Of course, that is not quite at the $3.095 that is on the table. But it is still a long way from the $2.47 Cleanaway shares closed at last Friday.

Those market watchers looking at this 20% jump in the Cleanaway share price today might understandably assume it is a windfall for shareholders. It certainly is for investors who picked up Cleanaway shares at recent prices. Anytime in the past 12 months, really, given the company hit a new 52-week high of $2.99 today. However, it’s not really enough to save longer-term investors who have been holding on to this stock.

A 20% jump can’t save Cleanaway shares

One might assume that a stock like Cleanaway has been a sure bet. After all, this is the largest waste management service provider in the country. Waste management is an essential service that is almost entirely immune from the economic cycle. As a functioning society, it goes without saying that we need to collect, process, and remove our rubbish, garbage, and waste regularly. That’s regardless of whether inflation is high or low, or whether the economy is booming or busting.

That should, at least in theory, give Cleanaway a permanent tailwind. That, unfortunately, has not been the lived experience of Cleanaway’s investors. This is an ASX 200 stock that just never seems to go anywhere. To illustrate, today’s 20% jump merely raises Cleanaway shares back up to where they were all the way back in April of 2022. Any investors who bought back then have simply traded water eer since. Even the company’s dividends (today yielding about 2.3%) wouldn’t have made a huge dent in that miserly performance.

Looking through this lens may explain why EQT Infrastructure is happy to pay $3.095 per Cleanaway share. This company’s long-term shareholders may not be delighted with the price that is on offer from the takeover. However, they may just relish the opportunity to get out of this stock anyway.

The post Up 20%: Has the EQT deal saved Cleanaway shares? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen 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.

Having $750,000 invested in exchange-traded funds (ETFs) would put you in a strong financial position heading into retirement.

But would it be enough to stop working and enjoy a comfortable lifestyle?

I think it could be, particularly with the right investment strategy.

Let’s look at what the numbers suggest.

How much would you need?

According to the Association of Superannuation Funds of Australia (ASFA), a single person who owns their home outright needs approximately $56,166 a year for a comfortable retirement.

That includes everyday expenses alongside holidays, private health insurance, leisure activities, and other things that make retirement enjoyable.

ASFA also estimates that a single homeowner needs around $630,000 in superannuation at age 67 to fund this lifestyle, assuming some assistance from the Age Pension.

So, with $750,000 available, our hypothetical retiree is starting from a promising position.

But the next question is how to turn that money into an income that can last for decades.

How I’d approach an ETF portfolio

One of the things I like about ETFs is that they make it relatively straightforward to spread investments across different markets.

For example, the Vanguard Australian Shares Index ETF (ASX: VAS) provides exposure to hundreds of Australian shares, many of which pay regular dividends.

Meanwhile, the Vanguard MSCI Index International Shares ETF (ASX: VGS) offers access to major businesses around the world.

I think combining Australian and international shares could provide a reasonable balance between income and long-term capital growth.

I would also consider including some defensive investments. The Vanguard Australian Fixed Interest Index ETF (ASX: VAF), for example, provides exposure to a diversified portfolio of bonds.

Having some money in these less volatile investments could help reduce the need to sell shares during a market downturn.

For me, that would be important in retirement, when regular withdrawals become part of everyday life.

Could the income cover expenses?

Let’s imagine our $750,000 portfolio generates an average annual dividend yield of 4%. That would provide approximately $30,000 a year in investment income.

It is important to remember that this is an illustrative assumption. Actual dividends would depend on the ETFs selected and could vary considerably.

Nevertheless, it gives us a starting point.

Against ASFA’s comfortable retirement estimate of $56,166, there would be an annual shortfall of approximately $26,166. That means our retiree would need additional income or to sell some investments to cover their spending.

But I don’t see this as a problem. After all, our ETF portfolio would ideally be generating capital growth alongside its distributions.

Let’s imagine the portfolio achieves an average annual total return of 7.5%, comprising 4% in dividends and 3.5% in capital growth.

On a $750,000 portfolio, that additional 3.5% would represent approximately $26,250 in capital appreciation.

That is almost exactly what our retiree needs to make up the shortfall.

In a year when those returns are achieved, selling some ETF units could cover the remaining living expenses while leaving the overall portfolio value broadly unchanged.

Of course, returns won’t arrive so neatly every year. Markets can fall, dividends can be reduced, and some years will require larger withdrawals from capital.

Inflation will also increase living costs over time, so maintaining the portfolio’s value in dollar terms would not fully protect its purchasing power.

But I think a diversified portfolio targeting a reasonable mix of income and growth could be a workable retirement strategy, particularly if Age Pension payments eventually provide additional support.

Foolish takeaway

For a single person who owns their home outright, I think $750,000 in ASX ETFs could be enough to fund a comfortable retirement.

An average annual return of 7.5% would theoretically cover today’s estimated living expenses without steadily depleting the original investment.

That return is not guaranteed, and I would want some flexibility to handle weaker years. But I think the numbers show that a comfortable retirement with $750,000 is certainly achievable.

The post Could $750,000 in ASX ETFs fund a comfortable retirement? appeared first on The Motley Fool Australia.

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• VGS vs V500: Which Vanguard ETF would I buy?

Motley Fool contributor Grace Alvino has positions in Vanguard Australian Shares Index ETF. 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 recommended Vanguard Msci Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Guzman Y Gomez Ltd (ASX: GYG) shares have seen a lot of volatility since listing in June 2024. Considering the Guzman Y Gomez share price is still down 39% from its December 2024 high, it could be a rare opportunity to invest in one of Australia’s top shares.

The Mexican restaurant business hit a low earlier this year, but since then it has announced impressive numbers that could help continue the trend of a recovering GYG share price and eventually reach new heights.

Guzman Y Gomez is currently focused on three markets: Australia, Singapore, and Japan.

In Australia, the business has a mixture of corporate-owned and franchise restaurants. In Japan and Singapore, it has master franchise agreements.

GYG sells a variety of food items, including burritos, tacos, burrito bowls (without the tortilla), nachos, nacho fries, quesadillas, enchiladas, churros, and plenty more. Its offering seems to be resonating with Australians, given how much it’s growing each year.

There are a few factors key to its success, including ‘clean’ healthy food, a drive-through option at many locations, and speed of service. It’s proud to boast that it’s one of the fastest quick-service restaurants (QSRs) to serve customers.

Ultimately, the company has a goal to be the “best and biggest restaurant company in the world”. Time will tell if it ever reaches that goal, and it doesn’t need to reach that scale to be a very successful investment for Australians, in my view.

I think there are four excellent factors that make it one of Australia’s top shares to buy today, aside from the food.

Strong performance by its existing network

At the end of September 2026, the company said that it had 258 Australian restaurants, 23 Singapore restaurants, and five restaurants in Japan.

The company regularly reports to investors how its existing stores perform on sales growth, using the ‘comparable sales growth’ metric.

For the FY27 first quarter, comparable sales growth for Australia, Singapore, and Japan combined was 7.1%. That’s an impressive growth rate considering Guzman Y Gomez is now over 20 years old, and it’s one of the factors that make me call it one of Australia’s top shares.

The company is driving comparable sales momentum in several ways.

It has invested in a new order management system (OMS), which is driving operational efficiencies in restaurants.

GYG is expanding its opening hours, with dozens of locations now operating on a 24/7 basis.

The company is regularly adding to its range of menu items, including a new Caesar range using mostly existing ingredients, new tacos, and the new meat BBQ beef rib.

It continues to invest in and expand its delivery and digital offering for customers.

The final area that’s driving comparable sales is marketing through various forms of media.

Expanding restaurant network

The existing restaurants are clearly doing well, and it’s expanding its restaurant network.

Shareholders learned how much the network had grown with the FY27 first-quarter update.

It said that its Australian restaurant count had increased to 258. That represented a year-over-year rise of 31 locations, equating to an increase of 13.7%. Within that Australian total, corporate restaurants grew by 10 to 94, and the number of franchise restaurants increased by 21 to 164.

In Asia, Singapore saw an additional restaurant, taking that national total to 23 (a rise of 4.5%). The Japanese total remained at five.

Guzman Y Gomez expects both the Singapore and Japan totals to increase during FY27.

The company expects to open 35 new restaurants in Australia during FY27, with approximately 12 restaurants expected to open in the second quarter.

The long-term potential growth of the global network is exciting to me, and it’s one of the main reasons why it could be one of Australia’s top shares to buy.

Eventually, the business would like to reach 1,000 Australian restaurants within the next 20 years, which is an impressive long-term tailwind. I think it’s a very achievable goal, given that some of its major rivals already have that many outlets and Australia is likely to see significant population growth in the next two decades.

The potential for further international expansion to other countries is also exciting to me.

Rising profit margins

In the third quarter of FY27, the company reported network sales growth of 18.8% to $387.5 million, but the rising profit margins are just as exciting to me. I like seeing a company’s margins increase as scale grows because that shows compelling operating leverage.

Guzman y Gomez is seeing its various profit lines grow faster than revenue.

From its continuing operations in FY26, network sales rose 17.9%, underlying operating profit (EBITDA) grew 28.7% to $85 million, and underlying NPAT grew 29.7% to $53.4 million.

Pleasingly, the underlying EBITDA margin as a percentage of network sales improved by 50 basis points from 5.7% to 6.2%. The company expects this margin to rise in the coming years.

In FY27, the underlying EBITDA margin as a percentage of network sales is expected to rise to between 6.7% and 6.9%.

The actual economics of the restaurants are also growing. According to GYG, the average drive-through restaurant achieved $6.9 million in sales in FY26 (up from $6.7 million in FY25 and $6.2 million in FY24), while the network restaurant margin improved to 21.6% in FY26 (up from 21.5% in FY25).

Both Guzman Y Gomez and its Australian franchisees are becoming increasingly profitable, which is a great sign for the long-term health of the company.

The median franchisee return on investment (ROI) is currently 47%, which is pleasingly high.

Attractive investor metrics

As I mentioned at the start of the article, the Guzman Y Gomez share price is down close to 40% from its former all-time high a couple of years ago.

The valuation looks much more reasonable now that the business is cheaper and is much more profitable on an underlying net profit basis.

According to the projection on CommSec, the company is forecast to generate earnings per share (EPS) of 51.9 cents in FY27, 65.9 cents in FY28, and 94.5 cents in FY29. In other words, EPS could rise by 82% between FY27 and FY29. With that sort of growth rate, I think it could be one of Australia’s top shares to buy.

Using that estimate, the Guzman Y Gomez share price is now valued at 28 times FY29’s estimated earnings.

I also like how the business is willing to enact share buybacks and pay dividends to shareholders, which shows a keen focus on shareholder returns. I think dividends and earnings can climb over the coming years.

The post A rare buying opportunity in 1 of Australia's top shares? appeared first on The Motley Fool Australia.

More reading

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Motley Fool contributor Tristan Harrison has positions in Guzman Y Gomez. 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.