I’m backing ASX dividend stock WCM Global Growth Ltd (ASX: WQG) as one of the best picks for passive income on the ASX.

In my own portfolio, I’m building positions in businesses that pay strong dividends and have a track record of returns. I’m utilising dividend income to pay for certain discretionary expenses in life, and that’s helping boost my household’s finances.

Thankfully, WCM Global Growth is also delivering dividend growth and long-term capital growth, which means it’s giving me a trifecta of what I’m looking for financially – dividend yield, payout growth, and capital growth.

Let’s run through why the listed investment company (LIC) is a strong pick with a $3,000 investment for passive income.

Compelling investment strategy

WCM Global Growth is a California-based investment manager that specialises in global and emerging market shares. WCM specialises in global shares and emerging market shares.

The fund manager looks for two key criteria to be considered for inclusion in the WCM Global Growth portfolio.

First, it wants to see a rising competitive advantage (or expanding economic moat).

Second, WCM wants to see that the company has a corporate culture that supports the expansion of this moat.

The WCM investment team believe that the ‘direction’ of a company’s economic moat is of more importance than its absolute size. The research focuses on identifying companies with a positive moat trajectory, as measured by rising return on invested capital, rather than those with a large but static or declining economic moat.

Since its inception in June 2017, the LIC has delivered net returns of 15.6% per year, after fees, and is more than 2% per year stronger than the global share market benchmark return.

Those good returns allow the business to pay a rewarding dividend.

Large dividend yield

The ASX dividend stock has provided guidance that it will pay an annual dividend per share of 10.1 cents over the next 12 months.

At the time of writing, that means it’s going to deliver a dividend yield of 4.9% excluding franking credits and 7% including franking credits.

In my view, there are few businesses that are going to pay a dividend yield as good as that over the next 12 months and deliver growth.

Passive income growth

The LIC has a “progressive quarterly dividend policy”. In other words, it delivers a payout every quarter, and that dividend is growing every three months.  

Its latest quarterly dividend payment was 2.35 cents per share, paid on 30 September 2026. The LIC has shown how the dividend will progress over the next 12 months.

It plans to pay a quarterly dividend of 2.45 cents per share in December 2026 – that’s 4.25% higher than the September payment.

WCM Global Growth expects to pay a quarterly dividend of 2.5 cents per share in March 2027 – that’s 6.4% more than the September payment.

The LIC has guided that it will pay 2.55 cents per share in June 2027 – that’s an 8.5% increase compared to the September payout.

The ASX dividend stock plans to pay a quarterly dividend of 2.6 cents per share in September 2027 – that’s a year-over-year increase of 10.6%.

Its dividend has regularly grown over the last several years. I expect the business will be able to continue hiking its dividend at an inflation-beating rate in the coming years.

Capital growth

When LICs generate investment profits, they can decide to pay some of it as a dividend and smooth out the passive income returns for shareholders.

How much of the profit they pay will decide how much is retained to generate more returns. Retained profits help deliver capital growth as the LIC’s net tangible assets (NTA) grow.

The bigger the dividend yield LICs deliver, the less that’s retained for future growth. So, LICs need to strike the right balance between short-term dividends and retaining some profits for long-term performance.

Thankfully, WCM Global Growth’s investment returns have been sufficient to deliver a good dividend and add to its NTA over time. Over the past three years, the WCM Global Growth share price has risen by around 70%. Past performance is not a reliable indicator of future performance, of course.

$3,000 investment

By investing $3,000 at the time of writing, an investor can buy 1,463 shares of this ASX dividend stock, which I think would be a smart choice for passive income investors.

But, it’s not the only business I’d be willing to put $3,000 (or more) into to generate returns.

The post $3,000 buys 1,463 shares in an impressively reliable ASX dividend stock appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Wcm Global Growth. 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.

It’s been an important week for the Australian economy.

Usually, in this space, I pick one issue and try to do it justice.

But today, I’m going to do something different.

Because three things happened that are worth talking about: the Reserve Bank raised interest rates again; we got another uncomfortable inflation number; and Trade Minister Don Farrell made some interesting comments about the role of our Superannuation savings.

They’re different issues.

But there are some threads running through all three.

So, let’s take them in turn.

First, interest rates.

Unless you’ve been living under a rock, you’ll know that on Tuesday, the RBA lifted the cash rate by another 0.25 percentage points, to 4.60%.

It was the fourth increase this year, taking the cumulative increase in 2026 to a full percentage point.

That hurts. 

For someone with a $500,000 mortgage, the four increases together mean roughly an extra $300 a month in repayments. On a $1 million mortgage, it’s more than $600.

Now, it’s tempting to blame the RBA.

But I think that risks missing the bigger issue.

The RBA has a job to do. Inflation is too high, and its mandate requires it to do something about that.

The problem is that we’ve effectively decided that the Reserve Bank should do almost all or just ‘all’?) of the heavy lifting.

And its primary tool – the official cash rate – is incredibly blunt.

It disproportionately hits people with mortgages. Renters can get caught in the crossfire. Savers can actually benefit.

Meanwhile, plenty of other Australians barely notice.

That’s why I keep coming back to fiscal policy.

A structurally-balanced Budget – where deficits in some years and offset by surpluses in other years – should act as what the boffins call an ‘automatic stabiliser’.

When the economy is weak, tax receipts fall and welfare spending rises, supporting demand.

When the economy is running hot, the reverse should happen: tax receipts rise, spending growth moderates and the Budget takes some heat out of the economy.

If that second half was working more effectively today, monetary policy wouldn’t have to do quite as much.

Which brings me to inflation.

On Wednesday we learned that annual headline inflation had risen from 3.5% to 4.0% in August. Trimmed-mean inflation – which removes some of the more volatile price movements – remained at 3.6%.

Some of that is coming from things largely outside Australia’s control.

Energy prices have risen sharply. The RBA itself pointed this week to global oil disruptions and the Middle East conflict.

But that’s not the whole story. The central bank also says there are still domestic capacity pressures, and businesses are reporting higher costs and raising prices.

There’s a temptation, whenever inflation comes from something we don’t particularly like or can’t easily control, to say: “Well, the RBA can’t fix that.”

And strictly speaking, that’s true.

Higher interest rates won’t produce another barrel of oil.

But that doesn’t mean we can simply ignore inflation.

Because higher rates can reduce demand, and hence price pressures.

Why does that matter?

Well, one of the nasty things about inflation is that the price rises tend to stick.

If inflation falls from 4% to 2%, prices don’t go back to where they were. They simply increase more slowly from the new, higher level.

That’s why getting inflation under control matters. The longer it remains too high, the more permanent damage it does.

But it also reinforces the earlier point: if inflation is important enough to fight – and it is! – surely we should be making sure we’re using all of the available tools rather than repeatedly reaching for the same, imperfect, inexact and blunt, one.

And that brings me, slightly unexpectedly, to superannuation.

Trade Minister Don Farrell reportedly suggested this week that Australian Super funds could invest in the US lamb industry as part of Australia’s efforts to head off additional American tariffs on our lamb exports.

In doing so, he said Australian superannuation funds had an obligation to the “national interest”.

There’s an important distinction worth making here.

Governments clearly have a responsibility to act in the national interest. That’s why they have powers over taxation, spending, regulation and trade policy.

Superannuation trustees operate under a different set of responsibilities. Among them is a legal obligation to act in members’ best financial interests. APRA has repeatedly reinforced the importance of that duty.

That doesn’t mean super funds shouldn’t invest in Australian infrastructure, housing, businesses – or, for that matter, American agriculture.

They should assess whatever opportunities are available.

And sometimes an investment that is attractive for members will also produce a desirable public-policy outcome.

Wonderful.

The important question is which way around the decision is made.

Does an investment stack up on its merits for members, with a national benefit as a welcome consequence?

Or does government first identify a national objective and then expect trustees to use members’ retirement savings to help achieve it?

Because that’s a very different thing.

And maybe that’s the thread running through all three issues this week.

Institutions have jobs.

The RBA has a job. Government fiscal policy has a job. Superannuation trustees have a job.

Those responsibilities sometimes overlap, and sensible policymakers should absolutely understand how they interact.

But accountability becomes harder when we blur them. Throw in a chunk of politics and self-interest and that blurring gets much worse.

We shouldn’t expect one mob to carry an unfair share of a problem simply because it has a convenient lever to pull.

Nor should we casually ask another group to take responsibility for an objective it wasn’t created to pursue.

Sometimes good economic policy isn’t about finding a clever new tool.

It’s about making sure the tools – and institutions – we already have are doing the jobs they are supposed to do. And not those they weren’t.

More bluntly?

I was pretty blunt in a TV interview this week. We can waste time trying to work out who is to ‘blame’ for inflation and higher interest rates. Or we can turn our minds to the best tools to use to get us out of the mess we find ourselves in.

Yes, the war in Iran has made inflation worse. But there are things that can be done, locally, to make it better.

Yes, interest rates are part of that. So is government taxation and spending policy. 

Yes, the national interest is important, but so are retirement savings. Government shouldn’t be leaning on private savings to replace their own responsibilities and actions.

(And that’s before we consider yet another smelter bailout, this time the Bell Bay smelter in Tasmania. Apparently it’s taxpayers’ money for smelters, but Super for trade disputes…)

And lest you think I’m being partisan, we’ve had leaders from both sides of politics throwing money at bailouts, calling for subsidies and, yes, trying to use Super for their own ends.

What we need, is respect for institutions, and commitment to use the tools at our disposal for the purposes they were intended – that includes interest rates, fiscal policy and Superannuation.

Have a great weekend!

Fool on!

The post A big week: Rates, Inflation and Super appeared first on The Motley Fool Australia.

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Zip vs Megaport Ltd shares: Which should you buy in October?

Are you tossing up between Zip Co Ltd (ASX: ZIP) and Megaport Ltd (ASX: MP1) shares this month? Both have made plenty of headlines, but they’re cut from very different cloths. With one riding the buy-now, pay-later wave, and the other connecting the digital world as a network heavyweight, I’m digging into the numbers and stories behind both to help decide which might be the smarter October buy.

The case for Zip

Zip is a homegrown fintech player best known for providing interest-free buy-now, pay-later (BNPL) services like Zip Pay and Zip Money. From its Aussie origins in 2013, Zip has spread its wings to 12 countries, aiming to shake up the credit card game with digital, flexible payment smarts for both shoppers and merchants. While its ambitions are big, Zip’s focus remains on providing simple alternative finance products at the point of sale.

What stands out from the current figures? First up, Zip’s market cap sits at $2.53 billion. It’s trading on a price-to-earnings (P/E) ratio of 22.30, which suggests the market’s factoring in some earnings growth but not getting carried away like with the more speculative tech darlings. The past year hasn’t been kind, with a hefty year-to-date (YTD) return of -38.6% — that’s a bruising ride for investors. Despite finally posting positive earnings per share (EPS) of $0.091, Zip doesn’t pay a dividend, so no direct income for holders here.

The case for Megaport

Megaport is all about helping businesses connect seamlessly to the global cloud. It operates a network-as-a-service (NaaS) platform, linking more than 1,100 data centres across 31 countries, and plugging customers in with major cloud providers like AWS, Azure, and Google Cloud. Megaport’s rapid, flexible connectivity model lets clients spin up virtual networks on the fly — no long-term contracts needed. Late in 2025, Megaport expanded into AI compute infrastructure with its acquisition of Latitude.sh, adding on-demand GPU cloud services into its growing toolbox. Its business spans the Americas, Asia-Pacific, and EMEA regions, plus an emerging Compute division.

On the numbers, Megaport’s market cap is a much chunkier $4.91 billion. Its P/E ratio is sky-high at 370.00, reflecting its negative EPS of -$0.218 (so the “E” here isn’t positive yet). This suggests the current P/E is calculated on some forecast or underlying basis — which may not line up exactly with the standard historical measure. Worth noting: Megaport’s YTD return is glowing at 75.5%, showing the market’s excitement about its recent momentum and expansion moves. Like Zip, there’s no dividend attached.

Valuation comparison

With both companies firmly in the tech camp but playing very different games, here’s how they stack up on key numbers:

Metric	Zip	Megaport
Market Cap	$2.53 billion	$4.91 billion
P/E Ratio	22.30	370.00
Earnings per Share	0.091	-0.218
Dividend Yield	0.00%	0.00%
YTD Return	-38.6%	75.5%

A couple of important notes: Megaport’s P/E ratio is 370.00, but with negative EPS of -0.218. This suggests the P/E is based on a different earnings measure (perhaps forecast or underlying), so the headline figure isn’t quite apples-to-apples with Zip’s standard P/E calculation.

Neither company is paying a dividend, so yields won’t swing your decision.

Recent share price performance

Comparing recent share price activity up to 30 September 2026:

• As of 30 September 2026, Zip closed at $2.03, nudging up just 0.5% for the day.
• Megaport finished at $20.65, rising 0.1% from the previous session.
• Looking at the bigger picture, Zip is down an eye-catching 38.6% year-to-date, while Megaport has surged 75.5% YTD.

So, in terms of share price movement over 2026 so far, Megaport has delivered a major rally, while Zip’s investors have endured a punishing decline.

Which is the better buy?

If I had to pick between the two for October, I’d lean toward Megaport. Megaport has a clear growth runway, building essential infrastructure for cloud and AI adoption worldwide. Yes, its P/E ratio looks steep, especially with reported negative EPS, but its 75.5% YTD share price gain and expansion into AI compute show serious momentum. Zip has finally turned an earnings profit but is still licking its wounds after a harsh share price fall. Neither name pays a dividend, so income isn’t a factor here.

For me, the stronger recent performance, global presence, and future-facing business model tip the scales in Megaport’s favour — even if its valuation looks a touch spicy. If you’re after growth exposure in tech, Megaport would be my pick for October.

The post Zip vs Megaport: Which ASX tech share is the better buy? appeared first on The Motley Fool Australia.

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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 positions in and has recommended Alphabet, Amazon, Megaport, and Microsoft. The Motley Fool Australia has recommended Alphabet, Amazon, and Microsoft. 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.