Droneshield vs Pro Medicus shares: Which ASX growth stock comes out on top?

Weighing up Droneshield Ltd (ASX: DRO) and Pro Medicus Ltd (ASX: PME) as growth shares? Both are well-known names in their own fields, but they couldn’t be more different. Whether you’re into defence tech or backed by healthcare innovation, choosing between Droneshield and Pro Medicus means thinking about more than just which one’s made headlines lately. Let’s take a closer look at what sets them apart for ASX growth investors.

The case for Droneshield

Droneshield rides the wave in anti-drone and counter-drone technology. The company’s artificial-intelligence-driven hardware and software help protect critical infrastructure, venues, and government operations from drone threats – a niche but increasingly important sector. Its products, such as DroneGun and DroneSentry, are in use by militaries, airports, and commercial operators across Australia, the US, and the UK.

From a fundamentals angle, a few things really stand out:

• Market cap: $1.45 billion — Droneshield is a chunky player in Australian defence tech, but much smaller than Pro Medicus.
• P/E ratio: 433.75, which is extremely high on face value. Note, though, Droneshield’s earnings per share is negative (-$0.033), so this P/E may be based on adjusted or forward figures rather than traditional trailing earnings.
• Dividend yield: 0.00%. This is a pure growth story — you’re not investing here for income today.

Droneshield’s share price has had a wild ride recently and is well down for the year, but its underlying business taps into a field where new geographies and customers could drive future bursts of growth.

The case for Pro Medicus

Pro Medicus is no stranger to growth investors. It’s a leading Australian medical imaging software company, providing radiology systems and cloud-based solutions for hospitals and health networks, with a particularly strong foothold among US clients. If healthcare digital transformation continues, Pro Medicus is clearly positioned to benefit.

Looking at the key metrics:

• Market cap: $17.31 billion — more than ten times Droneshield’s, putting Pro Medicus up with the ASX big hitters.
• P/E ratio: 65.35, reflecting very high growth expectations, but nowhere near the triple-digit figure we see at Droneshield.
• Dividend yield: 0.42%. While modest, Pro Medicus does pay regular, fully franked dividends, which can be appealing for some growth-minded income seekers.
• Earnings per share: 2.536, well into positive territory and supporting sustainable growth alongside dividends.

Pro Medicus has a proven track record of scaling up from Australia to dominate radiology tech for major hospitals worldwide, and its fundamentals show the company is profitable, pays dividends, and holds a healthy valuation compared to its own sector.

Valuation comparison

Here’s how the two stack up on key numbers:

Metric	Droneshield	Pro Medicus
Market Cap	$1.45 billion	$17.31 billion
P/E Ratio	433.75	65.35
Earnings per Share	-0.033	2.536
Dividend Yield	0.00%	0.42%
Franking	–	100%

Note: Droneshield’s P/E ratio appears mathematically inconsistent with its negative earnings per share. This suggests the P/E may be forward-looking or based on adjusted earnings rather than trailing net profit.

Pro Medicus trades on a much lower P/E than Droneshield, though both are considered highly valued, especially when compared to classical “value” names. Pro Medicus also provides a small fully franked dividend, absent from Droneshield.

Recent share price momentum

Comparing recent share price performance up to 9 October 2026:

• Droneshield: Closed at $1.57 on 9 Oct 2026. Its year-to-date return is a rough -49.2%, with the past few weeks also showing persistent declines after a small spike in late September.
• Pro Medicus: Closed at $165.73 on 9 Oct 2026. Its year-to-date return is also in the red at -24.7%, but well ahead of Droneshield. The recent movement was positive, gaining 4.5% on the day, and showing several up days in the past fortnight.

Both have struggled year-to-date, but Pro Medicus has been the less volatile and better performing of the two over the period measured.

Which is the better buy?

If I need to pick just one as the stronger ASX growth stock, my lean is towards Pro Medicus. While Droneshield is tackling an exciting and rapidly evolving sector, its negative earnings, lack of dividends, and extreme valuation make it a riskier bet for now. Pro Medicus is far from cheap, but its profitability, fully franked dividends (even if small), positive earnings, and less severe drawdown this year all make it the stand-out for me between these two. There’s also proven history in scaling complex software, with stickier revenue and wide adoption in the US. I reckon Pro Medicus offers the higher-quality growth profile on the data at hand — which is what I want in my portfolio, even at a premium price tag.

The post Droneshield vs Pro Medicus: Which is the better ASX growth stock right now? 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 DroneShield. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Pro Medicus. The Motley Fool Australia has recommended Pro Medicus. 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.

Analysts are just getting back into the swing of things after reporting season and the research reports are starting to flow.

I’ve picked out three companies that brokers have tipped for differing fortunes.

Let’s have a look.

Mesoblast Ltd (ASX: MSB)

Bell Potter published a research report last week which said that the outlook for Mesoblast’s short term revenue growth “remains highly attractive”.

There are also some pivotal events in the wings next year, including the interim readout on the clinical study for Mesoblast’s drug Ryoncil to be used in adults to treat graft versus host disease, and the headline data for a study of another compound in treating chronic lower back pain.

Bell Potter said:

Both are substantially larger markets than paediatric GvHD, nevertheless the market remains cautious. Australian biotech has had a difficult 12 months with several randomised clinical trials failing to meet clinical endpoints and we expect this has undermined investor confidence in the sector and is a contributing factor to the recent MSB share price.

The broker said the lower back pain drug could be a blockbuster in its own right, but the bar for approval was high.

They added:

Randomised controlled trials in pain management are difficult, however, the first Phase 3 in this indication achieved highly statistically significant reductions in pain from baseline. Since then patient selection criteria has been tightened and clinical endpoints refined in moves which we believe enhance the prospects for meeting the clinical endpoints in next year’s headline data readout.

Bell Potter has a $4.45 price target on Mesoblast shares compared to $1.98 currently.

Dicker Data Ltd (ASX: DDR)

Computer hardware company Dicker Data has just announced a deal to buy Sektor Group in New Zealand for $111.8 million.

Broker UBS said the motivation for the deal was to drive more growth in the southeast Asian region, “and further bolster its dominant Trans-Tasman offering within high margin technology”.

UBS said it was a positive incremental step for Dicker Data with the deal transacted at an attractive multiple.

The broker added:

Given the transaction consideration is entirely cash and no explicit management retention arrangements have been disclosed, retention of key personnel and vendor/ reseller relationships will be important to successful integration.

UBS has a neutral recommendation on Dicker Data shares and a $15.40 price target compared to $16.08 currently.

ASX Ltd (ASX: ASX)

Macquarie released a new research report into ASX, saying they were cautious on the company due to leadership transition and downside earnings risk from potential higher than expected capital expenditure.

The broker increased their price target from $52 to $53. However, it remains well below the current price of $61.10.

They also have an underperform rating on the company. At the time of writing, ASX is valued at $11.96 billion.

The post Buy, hold, sell: Mesoblast, Dicker Data, ASX shares appeared first on The Motley Fool Australia.

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• Buy, hold, sell: Mesoblast, Transurban, NextDC shares
• Top brokers name 3 ASX shares to buy next week
• 2 ASX 200 shares tipped to rise 39% to 130%
• 5 things to watch on the ASX 200 on Friday

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 positions in and has recommended Dicker Data. 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.

There are plenty of ASX shares offering attractive dividend yields right now.

But when it comes to building passive income, I think it pays to look beyond the size of the next dividend.

After all, a company that can maintain and gradually grow its dividends could be far more rewarding over the long term than one offering a high yield that proves unsustainable.

With that in mind, here are three ASX dividend shares that could be worth considering for passive income.

APA Group (ASX: APA)

The first ASX dividend share to look at is APA Group. 

It owns and operates a vast network of energy infrastructure across Australia, including gas pipelines, processing facilities, storage assets, and electricity transmission infrastructure.

One of the best things about APA is that much of its revenue comes from long-term agreements with customers that need access to its infrastructure. This provides a degree of predictability to its cash flows, which is particularly important for a company paying regular distributions to shareholders.

Speaking of which, for FY 2027, APA is forecast to offer a dividend yield of approximately 5.3%.

Transurban Group (ASX: TCL)

Another ASX dividend share that could be a strong option for income investors is Transurban.

It owns and operates major toll roads in Australia and North America, generating revenue whenever motorists use its networks.

One of Transurban’s strengths is that its roads are already an established part of how people travel around major cities.

Whether motorists are commuting to work, making deliveries, or travelling for other reasons, there is an ongoing need for roads that help them avoid congestion.

And as populations grow, traffic volumes could increase over time, driving its dividend higher.

For FY 2027, Transurban is guiding to a 72 cents per share dividend, which represents a yield of around 5.4% at current prices.

Woolworths Group Ltd (ASX: WOW)

A final ASX dividend share that could be worth considering is Woolworths.

Woolworths is one of Australia’s largest retailers, with millions of customers shopping at its supermarkets every week.

This gives it a substantial and recurring source of revenue, even when households are cutting back on discretionary purchases.

The opportunity now is for management to improve the company’s operating performance and rebuild earnings after a tough period.

If Woolworths can regain momentum while keeping costs under control, there is potential for profits and dividends to grow over the coming years.

In the meantime, the market is expecting a dividend yield of around 2.9% in FY 2027.

The post Why these excellent ASX dividend shares could be strong buys for passive income appeared first on The Motley Fool Australia.

More reading

• How much is needed in superannuation to target $2,000 a week in passive income
• Buy, hold, sell: Mesoblast, Transurban, NextDC shares
• Woolworths vs JB Hi-Fi: Which ASX shares to buy now?
• ASX 200 defensive sectors outperform amid volatile trading
• How much superannuation do I need to generate $100,000 per year in passive income?

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