It is fair to say that Megaport Ltd (ASX: MP1) shares have been on fire this year.

Since the start of the year, the cloud infrastructure provider’s shares have risen a massive 70%.

As a comparison, the S&P/ASX 200 Index (ASX: XJO) is down around 1.1% over the same period.

But if you thought the gains were over, think again. That’s because Bell Potter has just initiated coverage on Megaport and believes there’s plenty more upside on offer here for investors.

What is the broker saying?

Bell Potter notes that Megaport provides investors with exposure to the strong growth in inference compute demand. It explains:

Megaport provides one of the few direct exposures on the ASX to a neocloud provider and, in particular, the strong growth in inference compute demand. Even if and when other neocloud providers like Firmus and/or Sharon AI list on the ASX, Megaport provides differentiated exposure as it is building a globally distributed AI inference cloud – which is less capital intensive – rather than building the physical AI factories or data centres themselves.

The broker was also pleased to see that the company is collaborating with Nvidia (NASDAQ: NVDA), which provides better access to in-demand GPUs. It adds:

Last month NVIDIA announced it was “collaborating with a growing ecosystem of Australian NVIDIA Cloud Partners (NCPs) and AI infrastructure partners to expand land, power and shell capacity” and Megaport was named as one of the partners. This collaboration provides numerous advantages – including better access to GPUs and improved ability to sell to AI native companies – and also validates Megaport’s model and its differentiated approach to providing inference compute.

Strong growth

Bell Potter believes the above leaves Megaport well-placed to deliver very strong growth over the coming years.

In fact, it expects EBITDA to grow from $77 million in FY 2026 to $726 million in FY 2028. It explains:

We forecast underlying EBITDA to grow from $77m in FY26 to $329m in FY27 and $726m in FY28. This forecast strong growth is largely underpinned by strategic contracts which are being rolled out this year. Our forecasts are also supported by Megaport saying the annualised EBITDA run-rate will be >$650m once all the strategic contracts are billing. Importantly, all the capex required for the roll out of the strategic contracts is fully funded.

Should you buy Megaport shares?

According to the note, Bell Potter has initiated coverage on Megaport shares with a buy rating and $27.00 price target.

Based on its current share price of $20.25, this implies potential upside of 33% for investors over the next 12 months.

Commenting on its recommendation, Bell Potter said:

We initiate coverage of Megaport with a BUY recommendation and $27.00 target price. The TP is generated through a blend of an EV/EBITDA and DCF valuation where we apply a 10.0x multiple to our underlying FY28 forecast in the former and a 10.1% WACC and 3.5% terminal growth rate in the latter. In our view Megaport looks value trading on an FY28 EV/EBITDA multiple of c.7x when the median multiple of the domestic comps is c.15x (based on FY28 forecasts) and international comps is c.11x (based on 2027 forecasts).

The post Bell Potter just put a buy rating on Megaport shares with 33% upside appeared first on The Motley Fool Australia.

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• Which were the best-performing ASX 200 shares in September?
• How high does Macquarie think Megaport shares will go?
• Megaport shares fly 204% in just 6 months. Can they keep climbing?
• Here are the top 10 ASX 200 shares today

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

ANZ Group Holdings Ltd (ASX: ANZ) shares have climbed higher over the past month, despite headwinds from inflation figures and higher interest rates.

At the time of writing, the ASX bank shares are trading at $38.45. That’s around 3% higher than a month ago, and 6% higher for the year-to-date.

For context, the S&P/ASX 200 Index (ASX: XJO) has fallen 4% over the past month, and is around 0.2% lower for the year-to-date.

ANZ is Australia’s fourth-largest bank by market capitalisation. Its shares have outperformed the other three major banks over the past month and so far in 2026.

It’s also the big-four bank of choice among brokers.

Market Index data shows the experts are split between a buy and hold rating on ANZ shares. But the $36.05 average target price implies a downside of around 6%, after the latest rally.

Brokers have a hold rating on National Australia Bank Ltd (ASX: NAB) shares, but rate Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corporation Ltd (ASX: WBC) as a sell or strong sell.

It’s also one of the strongest passive income players.

What passive income does ANZ pay its shareholders?

As one of Australia’s big four major banks, ANZ is generally considered to have stable earnings and predictable cash flow. 

While bank stocks are usually considered cyclical, ANZ’s strong deposit base and diversified portfolio mean it is also relatively defensive in nature.

In mid-August, the bank reported cash profit of $1.9 billion, up 1% compared to the first-half quarterly average. While revenue was flat for the quarter, its net interest margin (NIM) edged up to 1.54% from 1.53%.

As of August, ANZ has achieved 73% of its gross cost-savings target of $800 million for FY26.

The bank’s strong performance enables it to make reliable, regular dividend payments to shareholders. It does this every six months, in July and December. 

It also offers both a dividend reinvestment plan (DRP) and a bonus option plan (BOP) as alternatives to receiving cash dividends on ANZ ordinary shares.

ANZ’s most recent dividend payment was an 83-cent per share interim dividend, franked at 75%, in July. 

The 83-cent dividend is the same payout that investors have received every six months since July 2024. However, the latest payout included an additional 5% franking credit (previously 70% or 65%).

Forecasts show that ANZ is expected to pay an annual dividend of $1.66 in FY26, and the same again in FY27. At the time of writing, that translates to a forward dividend yield of 4.3% for each year.

How many ANZ shares can I get with $10,000?

Using the $38.45 trading price at the time of writing, a $10,000 investment in ANZ shares would buy around 260 shares.

How much passive income can I earn from those shares in FY26 and FY27?

Assuming the bank pays the forecasted $1.66 dividend in FY26 and FY27, those 260 shares could earn around $431.60 in passive income each year.

The post If I invest $10,000 in ANZ shares, what passive income could I receive in FY27? appeared first on The Motley Fool Australia.

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• 5 leading ASX shares I’d buy and hold until 2040
• Commonwealth Bank vs ANZ: Which is better for passive income?
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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 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.

AGL Energy vs Wesfarmers shares: Which is the better passive income pick?

Everyday investors looking to earn regular passive income from the sharemarket often find themselves tossing up between established dividend payers like AGL Energy Ltd (ASX: AGL) and Wesfarmers Ltd (ASX: WES). Both have long track records, significant positions in the Australian economy, and the kind of brand recognition that brings a feeling of reliability. But when it comes to dividend income, not all blue chips are equal. Here’s how I see the choice between AGL Energy and Wesfarmers shares stacking up now.

The case for AGL Energy

AGL Energy is one of Australia’s oldest energy companies, tracing its history back to Sydney’s first gas lamps. Today it’s a key player in both the wholesale and retail gas and electricity markets, with operations spanning coal and gas generation as well as renewables like wind and hydro. According to its most recent company profile, AGL scrapped a planned demerger in 2022 after strong investor pushback—keeping its business unified at a time of big change for Australian energy.

Looking at the numbers, a few things stand out:

• Dividend yield is a chunky 6.16%, fully franked, which is among the highest for large ASX shares.
• The price-to-earnings (P/E) ratio sits at just 7.24, making it look relatively undemanding compared to many other blue chips.
• Market cap is $5.42 billion—small relative to Wesfarmers, but still substantial.

Recent dividends have returned to being fully franked after a run of unfranked payouts in 2023 and 2024, which is good news for investors seeking the full tax-effective benefits. However, the company’s year-to-date (YTD) return is down -7.4%, showing share price headwinds—possibly reflecting market caution around energy sector risks and transition costs.

The case for Wesfarmers

Wesfarmers is a true ASX giant, with an $84.37 billion market cap. It’s best known for owning everyday retail brands like Bunnings, Kmart, Officeworks, and Priceline, but also has interests in chemicals, fertilisers, and energy. After picking up Australian Pharmaceutical Industries, Wesfarmers now has a presence in the pharmacy sector too. Its scale and diversity make it a bedrock of many Aussie portfolios.

A few key fundamentals catch the eye:

• Dividend yield is 3.02%, fully franked, with a long history of consistent payouts (including occasional specials).
• The P/E ratio is 29.04—much higher than AGL’s.
• Earnings per share (EPS) is 2.534, significantly ahead of AGL’s 1.122.

What stands out is the stability and reliability of Wesfarmers’ dividends, as seen in its lengthy dividend record, and its presence in several consumer and industrial sectors. But with shares down -6.5% YTD, it’s faced its own share of market volatility lately.

Valuation comparison

With both companies offering fully franked dividends and a long-listed history, the core differences come down to yield, valuation, and market cap.

Notably, AGL Energy sports a much lower P/E ratio than Wesfarmers. But sector differences matter—energy utility shares usually trade on lower multiples than diversified industrials like Wesfarmers. The dividend yield is double at AGL compared to Wesfarmers, which could appeal more to pure income seekers.

Recent share price performance

Comparing share price action up to 29 September:

• AGL Energy closed at $8.06, slightly down for the day and negative over the year with a -7.4% YTD return.
• Wesfarmers ended at $74.35, up 1.03% on the day, but still down -6.5% YTD.

So both shares are underwater year to date as of this date, reflecting broader weakness in their sectors or the market. Neither has displayed obvious positive momentum in 2026 to date.

Which is the better buy?

If my primary aim is regular passive income, I’m leaning toward AGL Energy at current prices. Its 6.16% fully franked yield is over double Wesfarmers’, and the low P/E suggests the market isn’t pricing in much optimism—which can sometimes mean upside if conditions improve. The recent return to fully franked dividends is a nice bonus for Australian income investors, especially given the substantial payout in relation to its share price.

Wesfarmers is a higher quality, more diversified business, no question—it’s likely more resilient, with a much larger market cap and exposure to essential consumer sectors. But with its share price still carrying a high P/E and a yield around 3%, in strict income terms, I’d pick AGL for now.

Of course, both have risk factors: AGL operates in a volatile, transitioning energy sector, while Wesfarmers’ premium multiples mean less margin for error if earnings disappoint. But for investors chasing the biggest stream of franked dividends right now, my pick would be AGL Energy.

The post AGL Energy vs Wesfarmers: Which share delivers better passive income? appeared first on The Motley Fool Australia.

More reading

• How much could the Wesfarmers share price rise in the next year?
• How many Wesfarmers shares do I need to buy for $8,000 of passive income?
• Where I’d invest in ASX shares after the recent RBA rate rise
• How much is needed in superannuation to target a $10,000 monthly passive income?
• 2 strong Australian stocks to buy now with $9,000

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 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. 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.