A new report from the team at Bell Potter has tipped big upside for ASX financials stock COG Financial Services Ltd (ASX: COG). 

COG Financial Services is a collection of distribution businesses focused in Australia.

It provides access to credit (and related insurance) for commercial assets through a broker network and maintains the balance sheet capacity to fund direct originations, capturing some overflow on non-prime chattel mortgages. 

The acquisition of Paywise in 2023 marked a shift in the expansion and capital recycling approach, with greater strategic focus on novated leasing.

Year to date, its share price has fallen 30%, however Bell Potter is tipping a strong rebound in the next 12 months. 

Novated leasing 

Bell Potter highlighted that June was a record month for novated lease vehicle sales. 

Private buyers were up 11%, and business buyers were up 6%, even despite interest rates staying high. 

Some of this comes from normal seasonal price cuts, but carmakers also ran extra discounts through specific sales channels. 

Bell Potter expects this ASX financials company to sound upbeat about this part of the business, since electric vehicles’ share of sales jumped from 10% to 24%, marketing campaigns are working well, and BYD is running fresh cashback deals for specific orders placed in July and delivered by August.

In short, the company’s car-leasing business (novated) looks strong going into the results, driven by EV demand and discounts.

Broking 

The report from Bell Potter said ABS data on business investment won’t be released before COG reports its results. 

Therefore Bell Potter is basing its view on the broader weak economy and high interest rates, which are expected to weigh on the broking side of the business. 

Small business confidence is poor, having dropped sharply in March with little recovery since. Business investment plans hit a record low in April. 

On top of that, profit margins on loans keep shrinking, while loan volumes are actually rising. This pushes up the cost of running this part of the business.

Big upside in tact for this ASX financials stock 

Despite the mixed outlook, recent share price weakness makes this ASX financials stock an attractive proposition. 

Bell Potter has retained its buy recommendation and has an updated price target of $2.10. 

From yesterday’s closing price of $1.425, this indicates an upside potential of 47%. 

Recent commitment from government has extended the adjustment on electric vehicles and made this measure permanent. We see this as a multi-year-outcome, enhanced through successful tendering.

The post Top broker tips 47% upside for this ASX financials stock  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 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.

Investing money into your superannuation is for many Australians a great, tax-effective way to build wealth.

The downside is that the funds are locked away until we hit at least 60 years of age, but for those who start early, the magic of compound interest can build a substantial nest egg.

Superannuation calculations can help achieve your goal

So, how much superannuation do you need? That’s obviously a very subjective question, but the Association of Superannuation Funds of Australia (ASFA) has pegged the number at $55,923 per year for singles and $78,566 per year for couples for what they have determined to be a comfortable retirement.

ASFA’s numbers also assume the retiree owns their own home.

Today, I’m looking at how much superannuation is needed to support $6000 per month in passive income, which equates to $72,000 per year, well above the comfortable benchmark.

How much money you’ll need in your superannuation to generate this amount depends on the income stream you can depend on from your portfolio – assuming you don’t sell down any shares to generate income.

If you can generate a 7.2% return, you’d need $1 million worth of investments.

While this might sound like a high return, remember that superannuation funds benefit from franking credits – in lay terms, they are paid back the tax already paid by a company on its earnings.

If you generate just a 5% return on your investments, you’d need $1.44 million in superannuation savings, while if you were able to generate 10% returns, the figure drops to just $720,000.

How much can be generated from superannuation savings?

I would argue that it is possible to put together a diversified portfolio that can consistently generate returns of about 7%.

In terms of stocks to buy, there are some income-focused funds and exchange-traded funds that might be worth a look.

For example, WAM Active Ltd (ASX: WAA) just this week announced it had a stellar year, and declared a special dividend on top of its final dividend, which the fund said in a statement to the ASX would bring its fully-franked dividend yield to 8.6% and its grossed-up dividend yield to 12.3%.

On the ETF front, there are products such as the Betashares Global High Dividend Aristocrats ETF (ASX: INCM), which pays a quarterly dividend and, for the July quarter, paid out 5.74%.

There is also the S&P/ASX 200 Covered Call Complex ETF (ASX: AYLD), which uses a more complex strategy to deliver high yields, paying 9.64% over the past 12 months, albeit only franked at 15.3%.

There are also traditional stocks which pay strong dividends, including Fortescue Ltd (ASX: FMG) at 6.49%, Woodside Energy Group Ltd (ASX: WDS) at 5.63%, and on the lower but dependable end, Telstra Group Ltd (ASX: TLS) at 4.01%.

The post How much do I need in superannuation to receive $6000 per month in passive income? 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 positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

A new report from VanEck has highlighted the impressive resilience of the Australian market in recent years. 

It has weathered the pandemic, inflation and the fastest interest-rate tightening cycle in decades without falling into recession.

However VanEck believes this resilience should not be mistaken for strength. 

While inflation has eased from its peak, underlying price pressures remain among the highest in the developed world, business hiring intentions are softening and consumer confidence remains subdued. Together, they point to an economy that is slowing rather than stalling.

This combination of factors reinforces that investors’ portfolios should not be overexposed to the big banks and miners that dominate the ASX 200. 

VanEck contends that there are several reasons investors should look beyond simply tracking the S&P/ASX 200 Index (ASX: XJO). 

Trailing global equities

VanEck argues that simply buying the index is not always the most effective way to build wealth. 

The past financial year has brought this case to the fore more than ever.

Since the start of 2010, the S&P/ASX 200 has trailed the MSCI World, which tracks developed markets globally, in 11 of the past 17 financial years.

But the bigger concern is that the underperformance is getting worse. FY26 saw the underperformance run extend to four consecutive years, and the second biggest performance gap since 1996.

If Australia’s economy is entering a period of more subdued growth, investors should not be surprised if earnings growth becomes harder to find domestically. That strengthens the case for looking beyond a standard S&P/ASX 200 index fund.

The case for mid-caps 

According to the report, one option for investors looking to avoid overconcentration is to target mid-caps. 

One way to do this is through the VanEck S&P/ASX MidCap ETF (ASX: MVE). 

The fund focuses on Australia’s mid-cap companies, a part of the market that has historically offered an attractive balance between earnings growth and business maturity.

VanEck believes this could be a “sweet spot” of the market. 

They are typically more established than emerging small companies but still have meaningful scope to grow earnings. Analysts expect company profits in this part of the market to grow much faster than Australia’s largest companies, while valuations are still around their long-term averages.

MVE provides exposure to this often-overlooked part of the market through the S&P/ASX MidCap 50 Index. For investors looking to complement a large-cap Australian allocation, it offers access to businesses with greater growth potential, without moving too far down the risk spectrum.

The post The growing case for ASX mid-caps: Expert 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 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.