Insurance Australia Group vs Coles Group shares: which is better for income investors?

Investors looking for reliable income from their ASX portfolios might have their eyes on Insurance Australia Group Ltd (ASX: IAG) and Coles Group Ltd (ASX: COL). Both are heavyweights in their respective sectors and regular dividend payers, but offer very different business models, dividend profiles, and outlooks. Here’s my take on how these two stack up for income-focused investors.

The case for Insurance Australia Group

Insurance Australia Group is the leading general insurer in Australia and New Zealand, underwriting a wide range of policies—including motor vehicle and home insurance—for individuals and businesses. With top brands under its umbrella and a sizeable presence across both countries, IAG is a go-to name for everyday insurance needs.

The key fundamentals from the latest snapshot are:

• Dividend yield of 4.02%, ahead of Coles
• A P/E ratio of 18.59, which is well below Coles’ figure
• Market cap of $18.57 billion, making it a substantial player but smaller than Coles
• Earnings per share shown as -0.901, which doesn’t line up with the positive P/E (more on that in a moment)

When it comes to dividends, IAG’s payout has fluctuated over recent years. IAG’s businesses have long underwritten substantial premium volumes, but recent dividends have come with lower franking levels—only 25% for the most recent payment. Franking levels have shifted over time, often below full 100% franking in recent years, which could impact after-tax returns for those relying on franking credits.

The case for Coles

Coles is one of Australia’s leading supermarket and retail operators, serving millions of Aussies with groceries, liquor, and everyday essentials through its national store network and growing digital footprint. Coles is seen as a defensive, staples-oriented business, benefiting from the ongoing need for food and essentials regardless of the economic cycle.

Highlight fundamentals for Coles include:

• Dividend yield of 3.35%, slightly lower than IAG’s but very consistent
• A notably higher P/E ratio of 28.71
• Market cap of $31.40 billion—substantially larger than IAG, reflecting its consumer-facing scale and lower perceived risk
• Strong reported earnings per share of 0.812
• Full 100% franking on its dividends, boosting the loyalty of income investors who value franking credits

Coles has a solid record of regular, fully franked dividends, with recent payments showing both frequency and predictability. According to its most recent public description, Coles offers a comprehensive store network and has continued to innovate with its online shopping and loyalty programs, helping underpin its resilient earnings and reliable payouts.

Valuation comparison

There are a few clear divergences between IAG and Coles in terms of valuation and dividend attractiveness. Here’s how they compare on core metrics:

Metric	Insurance Australia Group	Coles Group
Market Cap	$18.57 billion	$31.40 billion
P/E Ratio	18.59	28.71
Dividend Yield	4.02%	3.35%
Dividend per Share	$0.32	$0.74
Franking	25%	100%
Earnings per Share	-0.901	0.812

Note: IAG’s reported P/E ratio appears inconsistent with its negative EPS figure. This may be because the P/E is based on normalised or forecast earnings, rather than the statutory EPS shown above.

The main takeaway here for income investors is that IAG offers a higher dividend yield, but with lower franking and some inconsistency in earnings figures. Coles provides lower yield, but its dividends are fully franked and supported by positive reported earnings.

Recent share price performance

Comparing recent share price activity as of 30 September 2026:

• Insurance Australia Group: Closed at $7.94 as of 30 September 2026, slightly down -0.25% on the day. Its year-to-date (YTD) return is 3.8%.
• Coles Group: Closed at $23.36 as of 30 September 2026, up 0.21% on the day. Its YTD return stands at 12.4%.

Coles has outperformed IAG in recent months, delivering a much higher YTD return for shareholders.

Which is the better buy?

For income investors—with one eye on yield and the other on dividend predictability—my pick would be Coles Group over Insurance Australia Group.

Coles delivers fully franked dividends, which can boost after-tax returns for many Aussies, especially those investing via super funds or directly. While IAG’s yield is a touch higher on headline numbers, its payouts carry much lower franking, reducing their appeal for income seekers chasing franked income. There’s also some concern on the consistency front: IAG’s negative EPS versus a stated positive P/E ratio makes me pause, as it might flag earnings volatility or reliance on one-off adjustments.

Coles’ more expensive P/E might make value hunters wary, but as an income investor, I think the reliability, fully franked dividends, and solid recent performance tip the scales. You may give up a fraction of yield, but in exchange you get consistency, reliability, and maximum franking credits. That’s why, if I had to pick just one for an income-focused portfolio, my vote would go to Coles Group.

The post Insurance Australia Group vs Coles: Which ASX dividend comes out on top? appeared first on The Motley Fool Australia.

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• Why I’d buy CBA and Coles shares in October
• BHP vs Coles: Which ASX share is better for passive income?
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• Here are the top 10 ASX 200 shares today
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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.

Woodside Energy Group Ltd (ASX: WDS) shares can be a great source of passive income in the year ahead.

The company is seeing higher earnings due to stronger energy prices, which can lead to larger distributions.

Woodside has operations across the world, with projects in Australia, Africa and North America.

Let’s take a look at what the business is projected to deliver in passive income in the coming year.

2027 financial year projection

The company’s payout depends heavily on energy prices, which is why it has fluctuated so much over the years. Production costs usually don’t change much in the short term, so a rise in revenue can largely boost net profit too.

But the opposite can also be true. When energy prices and revenue decline, net profit can drop significantly, likely reducing passive income for owners of Woodside shares, too.

The FY26 half-year result showed what the company is capable of when energy prices rise.

Operating revenue grew 13% to US$7.4 billion, underlying net profit after tax (NPAT) rose 7% to US$1.3 billion and free cash flow soared 159% to US$352 million. The financial improvement was helped by a 20% rise in the average realised price to US$74 per barrel of oil equivalent (BOE).

As the company noted, total production volume fell only 13% to 86.5 million barrels of oil equivalent (MMboe), while production costs rose 12% to US$749 million. I think those figures explain why the financials didn’t grow even more during the first six months to June 2026.

There was an improvement in net profit, which allowed the company to hike its interim dividend per share by 8% to US 57 cents in its HY26 result. But I’m going to look at the 2027 financial year prediction by analysts.

Based on the projection on CMC Invest, Woodside could pay an annual dividend per share of $1.94, which translates into a potential grossed-up dividend yield of 8.7%, including franking credits, at the time of writing.

What passive income would a $15,000 investment in Woodside shares create?

If an investor wanted to put $15,000 into Woodside shares, they would be able to buy 470 Woodside shares, at the time of writing.

With that investment and the projection for FY27, an investor could receive $911.8 of dividend cash and $1,302.6 of overall dividend income, including the franking credits.

Should investors actually do that? According to CMC Invest, analysts have issued 10 ratings on the business in the last three months: two buys, seven holds, and one sell.

The average price target of those 10 analyst ratings was $32.11, implying little positive movement (at the time of writing) over the next year. Therefore, it appears fully valued and it could be better to look at other ASX share opportunities today.

The post If I invest $15,000 in Woodside shares, how much passive income will I receive 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 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.

BHP vs Codan shares: Which strong performer is the better buy today?

When two ASX 200 shares have both delivered impressive returns lately, it can be tough to choose between them. BHP Group Ltd (ASX: BHP) and Codan Ltd (ASX: CDA) are both strong performers in 2026, but offer totally different business profiles for Aussie investors. Today, I’m comparing BHP vs Codan shares to see which stands out better right now, looking at their fundamentals, dividend potential, momentum, and more.

The case for BHP

BHP Group is a global resources titan, mining everything from iron ore to copper and nickel. It’s one of the largest companies on the ASX. BHP is also famous for its fully franked dividends and its ability to ride the boom-bust cycles of global commodities. According to its most recent public description, the business consolidated its listing recently and operates worldwide.

BHP’s standout fundamentals:

• Market cap: $306.37 billion – BHP dwarfs most other ASX names, highlighting its defensive size and industry standing.
• Dividend yield: 3.98%, fully franked – reliable income, with 100% franking making it especially attractive for many Aussie investors.
• YTD return: 39.0% – a big jump for a miner of this size, showing investors’ confidence in the current commodity cycle.

BHP’s dividend track record is impressive, regularly rewarding shareholders with fully franked income and the occasional special dividend. However, the miner’s profits and share price can swing sharply depending on iron ore and metals prices.

The case for Codan

Codan is an Australian electronics designer and manufacturer, specialising in communications, metal detection, and mining technology. Its products find customers across government, military, and commercial sectors globally, with particular strength in North America. According to its company profile, Codan has a diversified international footprint with manufacturing in Australia and Malaysia, and support operations spanning several countries.

Codan’s most interesting fundamentals:

• Market cap: $12.00 billion – that’s small compared to BHP, but not for a tech-focused midcap.
• P/E ratio: 67.18 – suggests investors are paying up for perceived growth, but this is high even for tech stocks.
• YTD return: 128.3% – a stunning run, more than tripling BHP’s YTD gain in 2026.

Codan pays fully franked dividends, though at a much lower running yield than BHP (0.75%). Its growth profile and global market presence stand out, but income seekers may shrug at the low dividend yield.

Valuation comparison

BHP and Codan sit in different sectors, so direct valuation comparisons need context. That said, there are some stark differences:

Metric	BHP	Codan
Market Cap	$306.37 billion	$12.00 billion
P/E Ratio	22.09	67.18
Dividend Yield	3.98% (100% franked)	0.75% (100% franked)
Earnings Per Share	1.932	0.959
Dividend Per Share	2.42	0.49

Note: Codan’s P/E ratio is unusually high – even for a growth stock – while BHP’s valuation is more moderate for a major miner. Dividend hunters will see a clear win for BHP on current yield.

Recent share price momentum

Comparing recent share price performance up to 30 September 2026:

• BHP Group: closed at $60.82, up 39.0% YTD. The last week saw BHP stay fairly steady, with mild day-to-day moves, and no big volatility spikes.
• Codan: closed at $65.83, up a massive 128.3% YTD. Notably, Codan gained 23.9% in a single day (29 September), showing some serious momentum – but with that often comes higher risk and price swings.

Which is the better buy?

Looking at BHP vs Codan shares, I’m genuinely impressed by both. BHP brings scale, reliability, fully franked income and a more accessible P/E ratio in a highly cyclical sector. Codan, meanwhile, is a clear market darling among growth hunters after more than doubling in 2026 and boasting a diversified, global high-tech business.

But, at current prices, my pick would be BHP. Here’s why: Codan’s massive P/E and wafer-thin dividend make me nervous about how much good news is already factored in. While Codan could continue to outperform if it delivers on growth, that sort of valuation demands everything (and more) goes right.

BHP isn’t cheap compared to its own history, but pays close to four percent yield, fully franked, on a much larger and more resilient resource base. For my money, the combo of income, scale, and a reasonable P/E makes BHP the more balanced opportunity between these two strong performers today.

The post BHP vs Codan: Which ASX 200 share is the stronger buy today? 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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended BHP Group. 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.