West African Resources Ltd (ASX: WAF) released its quarterly gold production figures this week, prompting the analyst team at Macquarie to run the ruler over the numbers.

The broker has maintained its outperform rating on West African shares and is predicting more share price upside, along with a healthy dividend yield.

I’ll get to the specifics of those later. First, let’s look at the company’s September quarter production.

Record quarter of gold production

West African Resources said in a statement to the ASX that it had produced 127,950 ounces of gold from its Sanbrado and Kiaka gold mines in Burkina Faso during the quarter, and had sold 135,245 ounces at US$4240 per ounce.

The company also confirmed it was on track to achieve its annual guidance of 430,000 to 490,000 ounces of gold.

West African Resources said it had received approval from the Burkina Faso Government for the M5 South underground extension at Sanbrado.

The company added:

M5 South underground development activities have commenced, and stoping activities are now scheduled to start in early H2 2027. There is flexibility within the overall Sanbrado mine plan and this delayed start is therefore expected to have minimal impact on 2027 gold production.

West African Executive Chair Richard Hyde said the record quarter maintained the company’s production run rate at more than 500,000 ounces per year.

Shares still looking like good value

Macquarie said in its new research note on the company that the third-quarter production was 11% higher than consensus estimates.

This was driven by a 15% lift in tonnage processed at Kiaka, with mined material also up 13% quarter on quarter.

Sanbrado, on the other hand, missed production expectations by a small amount, Macquarie said.

The broker added:

Barring any material disruptions, WAF should comfortably meet its production targets, particularly if improved access to explosives continues. We are likely to see improved all-in sustaining costs this quarter, given stronger sales (135koz, +22% quarter on quarter) offsetting the increase in mined and milled tonnage.

Macquarie increased its earnings per share estimates for West African Resources by 7% for this year, and upgraded its forecasts from CY27 to CY30 by 1%.

The broker added:

We maintain our Outperform recommendation for WAF, with lowered risk to CY27 production from receipt of the Sanbrado underground mine plan.

Macquarie maintained its $4 price target for West African Resources shares, compared with $3.61 at the time of writing.

If achieved, this would constitute a 10.8% return.

Macquarie is forecasting a 7.4% dividend yield this calendar year, falling to 4.9% next year, then rising to 5.4%.

West African Resources is valued at $4.01 billion.

The post Up nearly 20% over a year, can West African Resources shares go even higher? 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 positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

BHP Group Ltd (ASX: BHP) has long been a favourite among Australian dividend investors.

And with its enormous mining operations, strong cash generation, and history of returning billions of dollars to shareholders, it isn’t difficult to see why.

But how much would you need invested in the mining giant to generate $10,000 in annual passive income? Let’s take a look.

Why BHP remains popular

One of the main reasons BHP is so popular is the scale and quality of its mining operations.

The company owns some of the world’s most important mineral resources, including operations that have been producing for decades and still have substantial reserves remaining.

This gives BHP opportunities to keep generating cash and investing in production for many years.

Its financial strength is another reason. BHP has generally been able to maintain a strong balance sheet while funding major projects and returning substantial amounts of money to shareholders.

Of course, mining is a cyclical business, and even BHP cannot escape fluctuations in commodity prices.

When prices are high, profits and dividends can be enormous. When they weaken, shareholder returns can fall significantly.

However, BHP’s size, asset quality, and financial resources arguably make it one of the better options for investors seeking dividend income from the resources sector.

So, what could its shares deliver over the coming years?

How many BHP shares would you need?

According to CommSec, BHP is forecast to pay fully franked dividends of $2.07 per share in FY 2027.

Based on its current share price of $60.94, this represents a forecast dividend yield of approximately 3.4%.

To generate $10,000 in annual passive income at that rate, an investor would need to own approximately 4,831 BHP shares.

Buying that many shares today would require an investment of around $294,400.

That’s certainly a substantial amount of money to have invested in one company, which is why I would generally favour building a diversified income portfolio rather than relying entirely on BHP.

However, eligible Australian investors could also benefit from franking credits attached to those dividends.

What about future passive income?

The good news for investors is that CommSec expects BHP’s dividends to increase over the following two years.

Despite an expected earnings dip in FY 2028, dividends are forecast to edge higher to $2.10 per share.

For someone holding 4,831 shares, that would mean approximately $10,145 in annual passive income.

By FY 2029, CommSec expects dividends to increase to $2.38 per share, potentially lifting annual passive income from the same holding to almost $11,500.

It is worth remembering that these are only forecasts and actual dividends will depend heavily on commodity prices and BHP’s earnings.

Nevertheless, they demonstrate why the mining giant remains a popular option for Australian income investors.

The post How many BHP shares do I need to buy for $10,000 of passive income? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro 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.

Xero Ltd (ASX: XRO) shares have fallen a staggering 62% over the past 12 months.

That is a remarkable decline for a technology company that has spent years building one of the world’s leading small business accounting platforms.

Could this make Xero shares a must-buy for patient investors?

An enormous market opportunity

The first thing that stands out to me is just how much room Xero still has to grow.

The company finished FY26 with 4.92 million customers globally, having added another 506,000 during the year. By July, it had reached the 5 million customer milestone.

That is an impressive achievement, but it is still a relatively small share of its potential market.

Xero estimates that its total addressable market includes around 100 million small and medium-sized businesses globally.

Of course, I would not expect the company to capture anything close to that entire market. Competition is fierce, and small businesses have different accounting requirements. But it gives investors a sense of the opportunity.

Overall, I think there is plenty of scope for Xero to keep adding customers for many years.

Getting more value from existing customers

Xero has been steadily increasing the amount of revenue it generates from each customer.

In FY26, average monthly revenue per customer increased 23% to NZ$55.44, although the addition of payments business Melio contributed to that growth.

Even excluding Melio, average revenue per customer increased, demonstrating that Xero is finding ways to generate more revenue from its existing platform.

I think that trend can continue. Xero is increasingly offering services beyond traditional bookkeeping, including payroll, payments, cash flow management, and other financial tools.

The acquisition of Melio gives it a stronger position in business payments, particularly in the United States.

As customers adopt more of these services, Xero can potentially generate additional revenue without needing to win a completely new subscriber.

That combination of customer growth and higher average revenue per customer could be powerful over time.

What about the AI threat?

This is probably the biggest question I have about Xero’s future.

Artificial intelligence (AI) is developing quickly, and it is not difficult to imagine a future where somebody asks ChatGPT to help prepare their tax return or manage parts of their business finances.

Could that eventually reduce the need for traditional accounting software? I certainly would not dismiss the possibility.

But I think Xero has some important advantages. Accounting involves much more than answering financial questions. Businesses need accurate records, bank reconciliations, payroll compliance, tax reporting, and reliable information that can be shared with accountants and regulators.

Xero brings those processes together, with years of financial information often embedded in the platform.

That makes switching software a significant undertaking, particularly for businesses that rely on Xero every day.

The company is also developing its own AI capabilities through JAX, which aims to automate bookkeeping tasks and help customers manage their finances more efficiently.

I think that gives Xero an opportunity to benefit from AI rather than simply defend itself against it.

The challenge will be making sure its software continues providing enough value as AI tools become more capable.

Foolish takeaway

I think Xero is still one of the ASX shares I would most want to own for the long term.

The 62% share price fall is certainly concerning, and AI could change the accounting software industry considerably.

But with millions of potential customers still to reach and opportunities to generate more revenue from those already using its platform, I believe Xero has plenty of growth ahead.

For me, that makes the shares a buy today.

The post Are Xero shares a must-buy for investors? appeared first on The Motley Fool Australia.

More reading

• 6 ASX shares to buy in today’s weak market: experts
• Here are the top 10 ASX 200 shares today
• Xero shares crash 63% in a year: Is there any upside left?
• Down 60%, is this ASX growth share now too cheap to ignore?
• 2 ASX shares tipped to grow 62% or more in the next 12 months

Motley Fool contributor Grace Alvino 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 Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.