Two ASX shares enjoyed a strong rise yesterday following the release of earnings results and study results. 

Cuscal Ltd (ASX: CCL) shares rose almost 8% yesterday, while AVITA Medical Inc (ASX: AVH) rose 4%. 

This prompted fresh buy ratings from the team at Bell Potter, as well as upgraded price targets. 

What did the companies announce?

Cuscal shares rose strongly yesterday following the release of full-year results. The company reported a 49% jump in statutory NPAT to $42.7 million for FY26, boosted by acquisitions of Indue and Paymark.

Underlying NPAT was up 20% to $46.2 million, while underlying net operating income rose 20% to $347.7 million. Aggregate transaction volumes grew 12% over the year and the final dividend of 7 cents takes the full-year dividend to 11.5 cents per share. 

Following yesterday’s rise, Cuscal shares are now up 93% over the last year. 

Meanwhile, investors were gobbling up AVITA Medical shares after the announcement of its study results. 

According to the release, it has produced evidence that its PermeaDerm treatment may replace expensive cadaveric skin grafts with a product that works similarly, costs ~70% less, and is far easier to prepare.

The full releases from both companies can be found here: 

• Cuscal full-year results 
• AVITA clinical study announcement.

Upgraded outlook for Cuscal following earnings results 

Following the full-year results, the team at Bell Potter provided upgraded guidance for Cuscal shares. 

The broker said the underlying FY26 NPAT came in at $46.2 million, ahead of expectations. 

Bell Potter also said the balance sheet remains healthy, and noted the final dividend was increased to 7 cents per share fully franked. 

For FY27, management is guiding to mid-20% volume and underlying NPAT growth. Although acquiring growth is expected to be weaker, Bell Potter sees this as implying organic earnings growth of more than 10%, with volumes having picked up since June.

Based on this guidance, the broker retained its buy recommendation and raised its price target to $6.50 (previously $5.80). 

From yesterday’s closing price, this indicates an upside potential of almost 16%. 

Big upside for AVITA Medical

Bell Potter has also raised its outlook for AVITA Medical shares following its study results. 

Bell Potter is more bullish on the company because its products are showing strong cost and clinical benefits. 

PermeaDerm significantly reduced treatment costs and preparation time while achieving similar healing results to cadaver skin, although it is still a small part of AVH’s revenue.

The bigger story is RECELL (AVITA’s main product), where revenue growth is picking up, reimbursement uncertainty is improving, and cash burn is moderating. 

Bell Potter believes the broader product range could also help it sell more products into existing hospitals.

Based on this guidance, the broker retained its buy recommendation on the company and raised its price target to $3.70 (previously $2.10). 

This indicates a 36% upside from current levels. 

The post Broker puts fresh buy ratings and tips 36% upside for these earnings results winners  appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Bell 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 Avita Medical. The Motley Fool Australia has recommended Avita Medical. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Inghams Group Ltd (ASX: ING) share price is in focus after the company reported FY26 earnings in line with guidance, including a return to core poultry volume growth and strong cash generation.

What did Inghams Group report?

• Revenue rose 2.4% to $3,227.4 million
• Underlying EBITDA pre AASB 16 was $186.4 million, down 21.2% on the prior year
• Net profit after tax (NPAT) dropped 61.5% to $34.6 million
• Core poultry volumes grew 1.9%
• Final fully franked dividend of 6.1 cents per share declared
• Net debt reduced by $27.1 million to $403.3 million

What else do investors need to know?

Inghams delivered $82.3 million in cost savings during the year, hitting the upper end of its target, despite facing $13.2 million in additional costs linked to ongoing Middle East conflict. The company continued to diversify its customer base, particularly in Australia, where retail volumes excluding Woolworths rose 17.2%.

Production inefficiencies earlier in the year and cost pressures from ingredients, freight, and labour weighed on full-year profitability. However, the second half saw operational improvements with inventories and supply chains returning to normal levels.

What did Inghams Group management say?

CEO and Managing Director Ed Alexander said:

We made significant progress strengthening the underlying business during FY26. Encouragingly, our earnings in the second half were materially above the first half, reflecting the improved underlying operating metrics… While the operating environment remains challenging, we enter FY27 with a more balanced network, a stronger and more diversified customer portfolio, a refreshed senior management team, and clear visibility of the opportunities still to unlock.

What’s next for Inghams Group?

Looking ahead, Inghams expects its primary earnings measure to shift to underlying EBIT, with FY27 guidance set at $155–180 million. The company forecasts further core poultry volume growth of 2.5–4.0% but anticipates continued cost pressures—including higher transport, packaging, and feed costs—due to both inflation and ongoing geopolitical disruptions.

Management is focused on ongoing cost control, leveraging procurement and continuous improvement initiatives to offset rising expenses. Capital expenditure for FY27 is expected around $80 million, as the group aims to strengthen its network and support future growth.

Inghams Group share price snapshot

Over the past 12 months, the Inghams Group share price has been among the worst performers on the S&P/ASX 200 index (ASX: XJO) with a decline of around 37%.

View Original Announcement

The post Inghams Group FY26 earnings: volume growth, headwinds, and FY27 outlook 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 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 summary of the company announcement. 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.

Australian investors have spent more than two decades operating under the same capital gains tax rules. Hold an eligible asset for at least 12 months, sell it, and the taxable capital gain is generally reduced by 50%.

That arrangement is changing.

From 1 July 2027, the 50% capital gains tax discount for individuals, partnerships, and trusts will be replaced by inflation-based cost-base indexation. A minimum 30% tax rate will also apply to real capital gains.

The reforms apply to shares and exchange-traded funds, not only investment property. However, they are prospective: gains accruing before 1 July 2027 retain the existing treatment, even if the investment is sold later.

Importantly, the new system will not automatically leave every investor paying more tax. The outcome will depend on the return earned, inflation, and the investor’s marginal tax rate. Treasury modelling suggests indexation could have produced a slightly larger effective discount than the current system for average ASX share returns over some historical periods.

Nevertheless, the changing rules provide a timely reason to examine how investment returns are delivered. That brings a much older strategy back into focus.

Income that gives itself a pay rise

Dividend growth investing focuses on businesses capable of growing their earnings, cash flow, and shareholder distributions over time.

The objective is not simply to find the highest yield available today. It is to own companies that can increase their dividends without weakening their balance sheets or starving the business of necessary investment.

Consider a $10,000 investment yielding 4%. That produces $400 of income in the first year, before tax. If the dividend grows by 5% annually, the payment reaches approximately $620 in year 10 without the investor contributing another dollar.

Reinvesting those dividends could increase the income further by adding more shares, although taxes and changing share prices will affect the eventual result.

Unlike an unrealised capital gain, a dividend delivers part of the shareholder’s return in cash without requiring the shares to be sold. However, dividends are generally taxable in the year they are received, while capital gains remain deferred until an investment is sold.

That means neither approach is automatically more tax-efficient. The better outcome depends on the business, the price paid, and the investor’s circumstances.

Separating a payer from a grower

Not every generous yield is sustainable. A yield approaching 9% may reflect a falling share price and expectations that the dividend will be cut.

Four characteristics can help separate a genuine dividend grower from a potential yield trap.

The first is earnings and free cash flow growth. A dividend cannot keep rising indefinitely unless the business produces more cash to support it.

The second is the payout ratio, which measures how much profit is being distributed. A company paying out almost everything it earns has little room for weaker conditions or further investment.

The third is balance-sheet strength. Heavy debt repayments compete directly with shareholders for the same cash.

Finally, investors can examine capital-allocation discipline and dividend history. A company that has increased its payout through different economic conditions has demonstrated something a forecast cannot.

How Wesfarmers has grown its dividend

Wesfarmers Ltd (ASX: WES) provides a useful recent example.

The conglomerate increased its total dividends from $1.80 per share in FY22 to $1.91 in FY23, $1.98 in FY24 and $2.06 in FY25. Its FY26 interim dividend rose to $1.02 per share, up from 95 cents a year earlier. These dividends were fully franked. That record does not guarantee future increases. Wesfarmers must continue growing its earnings while balancing dividends against investment in businesses such as Bunnings, Kmart and WesCEF.

Washington H. Soul Pattinson and Co. Limited (ASX: SOL) offers a longer example, with FY26 marking its 28th consecutive year of dividend growth. Its record shows why investors may accept a lower starting yield when they believe the payout can compound over decades.

The franking factor

Australia adds another element through dividend imputation.

A 4% fully-franked cash yield equates to approximately 5.7% on a grossed-up basis when the company tax rate is 30%. This accounts for the company tax already paid and attached to the dividend as franking credits.

The investor’s final benefit depends on their tax rate, eligibility for refunds, and compliance with the relevant holding-period rules. Some investors may receive excess franking credits as a refund, while those on higher marginal rates may owe additional tax.

Foolish takeaway

Dividend growth investing is not risk-free. Dividends can be reduced, and an excessive focus on income can leave a portfolio concentrated in mature sectors or cause investors to overlook businesses capable of reinvesting capital at attractive returns.

The CGT reforms do not make dividend growth investing universally superior. Some investors may pay more tax under the new rules, while others could pay less.

However, the calculation is changing. For investors thinking in decades rather than quarters, companies capable of growing both their underlying value and their cash distributions may deserve a closer look.

The post How ASX dividend growth shares can build lasting income appeared first on The Motley Fool Australia.

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• Here’s what brokers tip for Wesfarmers shares over the next 12 months

Motley Fool contributor Leigh Gant 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 Washington H. Soul Pattinson and Company Limited and Wesfarmers. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.