Argo Investments Ltd (ASX: ARG) has announced it will pay dividends every three months from the start of next year, while also flagging its dividend payments for the year ahead.

Dividend payouts to increase

The listed investment company said it intended to pay four, 10-cent, fully-franked dividends next year, increasing its dividend payments from this year’s 38.5 cents.

Argo’s Managing Director Jason Beddow said the move to quarterly dividends “will provide our shareholders with more regular income to help meet the evolving cash flow needs of many households, while also making Argo more attractive to prospective shareholders”.

Mr Beddow added that the 40-cent dividend payout next year would be another record high for the company.

Argo in FY26 posted a profit of $260.2 million, up from $259.8 million the previous year.

The company said its final dividend “includes a listed investment company (LIC) capital gain component of 5 cents per share, reflecting crystallised gains in the portfolio”.

Argo added:

When Argo realises a capital gain on the sale of a long-term holding in our portfolio, a capital gains tax discount can be passed on to shareholders as though they made the gain themselves. This allows most individuals and self-managed superannuation funds to claim a tax deduction, in addition to the benefit of franking credits. Please note, the LIC capital gain component of this dividend is unaffected by the recent changes to Australia’s capital gains tax (CGT) regime. Argo is engaging with government through our industry association to ensure we maintain our special status as a genuine long-term investor, rather than a trader, so we can continue to provide this benefit to our shareholders.

Trading gains locked in

Major additions to the Argo portfolio over the year included CSL Ltd (ASX: CSL), Amcor Ltd (ASX: AMC), and Megaport Ltd (ASX: MP1).

Sales included Rio Tinto Ltd (ASX: RIO), Reece Ltd (ASX: REH), and Macquarie Group Ltd (ASX: MQG).

Argo said it outperformed the S&P/ASX 200 Index (ASX: XJO) during the year.

The company said:

Argo delivered a full-year return of +8.7% based on net tangible assets (NTA) return after all costs and adjusted for company tax paid, outperforming the Index, which rose +6.1%, without allowing for any costs. The outperformance generated approximately $200 million in additional value for the portfolio. The biggest positive contributors to performance during the financial year were our positions in Rio Tinto, Macquarie Group and Lynas Rare Earths. Our underweight exposure to Commonwealth Bank relative to the Index also boosted returns as the bank’s share price retreated from its lofty valuations, following a sharp sell-off after the May Federal Budget.

Argo said it had outperformed the index over the past five years. The company is valued at $6.91 billion.

The post This outperforming ASX dividend stock will now pay out on a quarterly basis appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has positions in CSL and Megaport. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, Macquarie Group, and Megaport. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Lynas Rare Earths Ltd. The Motley Fool Australia has positions in and has recommended Amcor Plc. The Motley Fool Australia has recommended CSL and Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Vanguard Australian Shares High Yield ETF (ASX: VHY) is a very appealing option for a high dividend yield and it could be a strong option for passive income.

The purpose of the VHY ETF is to provide low-cost exposure to ASX shares that have higher forecast dividends relative to other ASX shares.

It achieves diversification by restricting the proportion of the portfolio invested in any one industry to 40% of the total ETF and 10% in any one company. Australian real estate investment trusts (A-REITs) are excluded from the portfolio entirely.

Given that many of the ASX’s largest blue-chip shares also offer sizeable dividend yields, it’s not surprising that many of its biggest holdings are also the largest in Australia.

Major holdings

At the end of August 2026, its biggest holdings were:

• BHP Group Ltd (ASX: BHP)
• Commonwealth Bank of Australia (ASX: CBA)
• National Australia Bank Ltd (ASX: NAB)
• Westpac Banking Corp (ASX: WBC)
• ANZ Group Holdings Ltd (ASX: ANZ)
• Rio Tinto Ltd (ASX: RIO)
• Woodside Energy Group Ltd (ASX: WDS)
• Macquarie Group Ltd (ASX: MQG)
• Telstra Group Ltd (ASX: TLS)
• Transurban Group (ASX: TCL)

Perhaps unsurprisingly, more than 70% of the portfolio is invested ASX financial shares, ASX mining shares and ASX energy shares, which are known for paying large passive income most years.

The portfolio has 92 holdings, though the biggest names carry the largest weightings. The ten names I highlighted above accounted for 61.6% of the total ETF portfolio.

VHY ETF dividend yield

Because the portfolio focuses on passive income and the attractive franking credits that can come with dividends paid by Australian companies, Vanguard reports its dividend yield both excluding and including franking credits.

According to the forecast dividends from FactSet – which Vanguard uses as a dividend data provider – the VHY ETF dividend yield excluding franking credits is forecast to be 4.2%.

Including franking credits (sometimes referred to as a ‘grossed-up dividend yield’), the forecast dividend yield is 5.6%.

What would it take to generate $1,000 of passive income?

The number of VHY ETF shares (called ‘units’) needed to generate $1,000 in dividends depends on whether we include franking credits in the total.

If we exclude franking credits, an investor would likely need about 282 VHY ETF units to generate $1,000 in passive income, assuming the dividend projection is close to reality.

If franking credits are included, then an investor would likely need an estimated 212 VHY ETF units.

It’s a solid option, with the dividends coming from a somewhat diversified portfolio. However, I’d want to add other ASX shares in there too for additional dividend diversification because it is quite heavily focused on a limited number of industries and a tilt towards a few large names.

The post How much must I invest in VHY ETF shares to earn a $1,000 passive income in 2027? appeared first on The Motley Fool Australia.

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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 Macquarie Group and Transurban Group. The Motley Fool Australia has positions in and has recommended Telstra Group and Transurban Group. The Motley Fool Australia has recommended BHP Group, Macquarie Group, and Vanguard Australian Shares High Yield ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Broking house Morgans has released new research reports on two companies, which it says will increase in value by almost a third over the next 12 months.

Let’s see who they like.

Nufarm Ltd (ASX: NUF)

Morgans writes in its research note on the food sector that conditions are ripening for soft commodities to perform well, with two “genuine supply shocks” hitting the sector.

The broker said world food prices rose for a third straight month in August, heading close to a four-year high, but still 17% below the March 2022 peak.

Part of the reason includes Russia and Ukraine attacking each other’s Black Sea ports, with Russian exports at their lowest since 2016, and Ukraine’s at a 16-year low, Morgans said.

Also impacting prices were drought conditions which had affected wheat output globally, “and there appears near-certain odds on El Niño running through to February 2027”.

Morgans said Nufarm was their top pick in the agricultural sector.

They added:

The new management team continues to turn the business around and are ungearing the balance sheet, with the focus on quality of earnings. 1H26 came in at the upper end of guidance, setting up strong FY26 EBITDA growth on normal seasonal conditions. Investor Days on 28-29 September are the next catalyst.

Morgans has a $4.15 price target on Nufarm shares compared to $3.16 at the time of writing.

If achieved, this would be a 31.3% return. Nufarm is valued at $1.25 billion.

SGH Ltd (ASX: SGH)

Morgans has actually downgraded its price target for SGH shares, but is still predicting a 31.3% return.

The downgrade has come about as a result of SGH’s 30% shareholding in Beach Energy Ltd (ASX: BPT) and negative earnings revisions from Beach in a report in early August.

Morgans said:

SGH is an industrial compounder with a decade-long record of EBIT growth, underpinned by three market-leading businesses exposed to durable Australian thematics: 1) mining production (WesTrac), 2) infrastructure/construction (Boral, Coates), and 3) Transitional Energy. The key investment thesis rests on continued margin improvement at Boral, operating leverage across a largely fixed-cost industrial asset base, and disciplined capital recycling at a 15% return on capital employed hurdle.

Morgans said that with the balance sheet deleveraging, debt capacity was rebuilding for another potential acquisition.

Morgans has a buy rating on SGH shares with a price target of $48, down from $50.

SGH is valued at $14.9 billion. Beach Energy shares are currently 25.2% lower over a 12-month period.

The post Morgans tips both of these ASX shares to rise 31% appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England 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.