Insurance Australia Group vs Medibank shares: Which is the more reliable passive income stock?

Looking to steady your income with ASX dividend shares? Insurance Australia Group Ltd (ASX: IAG) and Medibank Private Ltd (ASX: MPL) are two prominent insurers – but with different focuses, histories, and fundamentals. If you’re torn between these giants for your portfolio’s next source of passive income, here’s what stands out about IAG and Medibank shares right now.

The case for Insurance Australia Group

Insurance Australia Group is the largest general insurer in Australia and New Zealand, with roots going back to NRMA Insurance. Through well-known consumer brands, IAG offers policies across motor, home, and business insurance, and underwrites billions in premiums each year. It operates in a highly regulated space and is known for scale and brand strength.

Three points make IAG noteworthy for income hunters:

• Dividend yield: 3.8% – solid, though not spectacular, especially among defensive stocks.
• Dividend history: IAG has a long dividend track record, but dividend per share and franking have fluctuated in recent years, with a 0.32 dividend per share and partial franking (recent dividends as low as 25–60% franked).
• YTD return: Up an impressive 9.5%, signalling positive momentum.

That said, IAG’s reported recent earnings per share is negative at -1.921, which does warrant some caution – negative earnings can put future dividend sustainability under pressure.

The case for Medibank Private

Medibank Private is Australia’s largest private health insurer, operating under both Medibank and ahm brands. Its core is health cover, but it’s diversified into pet, life, and travel insurance, plus corporate health. Medibank is often seen as a defensive, reliable dividend share thanks to its stable customer base and highly cash-generative business.

Key features for dividend investors include:

• Dividend yield: 4.1%, just topping IAG and attractive for a major ASX stock.
• Dividend history: Medibank’s dividends have been consistent and are fully franked, giving income investors a tax edge and a sign of strong underlying earnings quality.
• Earnings per share: Positive at 0.232, providing support for ongoing dividends.

While its year-to-date return is only 1.7% (much lower than IAG’s), Medibank’s steady performance and 100% franking may appeal more to income-focused investors.

Valuation comparison

Here’s how the headline numbers stack up:

	Insurance Australia Group	Medibank Private
Market Cap	$19.42bn	$12.83bn
P/E Ratio	18.99	20.17
Dividend Yield	3.80%	4.10%
Dividend Franking	Recent: 25%–60%	100%
Earnings per share	-1.921	0.232

Note: IAG’s negative EPS seems inconsistent with its positive P/E ratio. This may mean the reported P/E uses an adjusted or forecast earnings number.

Both valuations are within the normal range for major ASX insurers, though Medibank’s P/E is a touch higher – understandable given its 100% dividend franking and consistent profits.

Recent share price momentum

Comparing recent share price performance up to14 October 2026:

• IAG: Closed at $8.30, down 1.43% on the day. Its YTD return, however, is a strong 9.5%.
• Medibank: Closed at $4.66, down 0.43% on the day. Its YTD return is 1.7%.

Both have had small down days but, over 2026, IAG has delivered stronger share price gains.

Which is the better buy?

If reliable, consistent passive income is the goal, I’d lean toward Medibank Private. Its fully franked dividends provide better after-tax returns, and its dividend record is both steady and fully supported by current earnings. Medibank’s 4.1% yield edges out IAG, and the consistency of 100% franking is a major plus for Australian tax residents, especially with partial franking now the norm for IAG.

IAG has delivered better share price growth this year, but its negative earnings and lower franking raise some questions on dividend sustainability. While its insurance business is huge and diversified, I think income investors want clarity and reliability.

So, for pure passive income reliability, my pick would be Medibank Private shares.

The post Insurance Australia Group vs Medibank: Which is the more reliable passive income stock? appeared first on The Motley Fool Australia.

More reading

• 9 ASX 200 shares experts are backing for growth amid market weakness
• How much passive income can I earn off a $700,000 superannuation balance?
• Insurance Australia Group updates on RAC alliance and ACCC review
• Here are the top 10 ASX 200 shares today
• UBS’ top nine ASX large-cap stock picks

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.

National Australia Bank vs Coles Group shares: Which blue chip should I buy next for my SMSF?

If you’re looking at National Australia Bank Ltd (ASX: NAB) shares versus Coles Group Ltd (ASX: COL) shares for your SMSF, you’re not alone. Both are household-name blue chips on the ASX, known for reliable dividends, defensive business models, and roles as core holdings in many Australian portfolios. But which deserves a spot in your next SMSF purchase? Let’s break down the fundamentals, dividend outlook, recent momentum, and relative value to help you decide.

The case for National Australia Bank

National Australia Bank, or NAB, is one of the ‘big four’ banks dominating Australian and New Zealand banking. Its mainstays are retail and business banking, plus some operations overseas. NAB’s size and scale, with a strong local focus, give it a distinct position as a pillar of the Australian financial system.

Notable fundamentals jumping out include:

• Market cap: $120.18 billion, one of the biggest companies on the ASX
• P/E ratio: 19.63, on the lower side for a blue-chip, partly reflecting the lower-growth, higher-stability banking sector
• Dividend yield: 4.33%, fully franked at 100%, meaning those dividends can be particularly attractive for SMSFs seeking income with franking credits

NAB’s earnings per share comes in at $2.00, with a dividend per share of $1.70, showing it’s distributing a healthy portion of its profits. Year-to-date return is -5.22%, meaning the share price has drifted lower this year, but the dividend cushion gives some comfort. According to its most recent public description, NAB has built a dominant presence in local banking, serving millions of Australians and New Zealanders.

The case for Coles

Coles is Australia’s second-largest supermarket operator, with a nationwide footprint spanning Coles Supermarkets, Coles Liquor, and an online offering. Famous for its weekly specials and focus on essential products, Coles is a true consumer staple — the sort of retailer that hums along no matter what the economy is doing.

A few highlights from the numbers:

• Market cap: $31.76 billion (significantly smaller than NAB, but still a titan in listed retail)
• P/E ratio: 29.19, higher than NAB’s, reflecting different growth expectations for supermarket retail versus banking
• Dividend yield: 3.29%, also fully franked, making Coles appealing to income-seeking SMSFs

Coles delivers earnings per share of $0.812 and a dividend per share of $0.74 — again, a decent portion of profits returned to shareholders. Year-to-date, Coles shares are up 14.18%, outpacing much of the market. According to its latest company profile, Coles operates across groceries, liquor, and household goods, maintaining a huge retail presence and brand recognition.

Valuation comparison

Here’s how NAB and Coles stack up on the key valuation and income stats:

	National Australia Bank	Coles
Market Cap	$120.18b	$31.76b
P/E Ratio	19.63	29.19
Dividend Yield	4.33% (100% franked)	3.29% (100% franked)
Dividend per Share	$1.70	$0.74
Earnings per Share	$2.000	$0.812
Year to Date Return	-5.2%	14.2%

NAB currently offers a materially higher dividend yield than Coles and does so with full franking. The P/E ratio for NAB is noticeably lower — but keep in mind: banks and retailers tend to trade at different benchmarks, so comparing their P/E ratios should be done in context. Coles’ higher P/E may price in its perceived stability and growth outlook in groceries, while NAB’s lower multiple can reflect sector trends or short-term headwinds.

Recent share price momentum

Comparing recent share price performance up to 14 October 2026:

• National Australia Bank: Closed at $38.55, down 1.78% for the day, and -5.2% year-to-date. NAB’s shares have seen some bouts of volatility lately, with a short-term downward drift this year.
• Coles Group: Closed at $23.63, down 0.30% for the day, but is up 14.2% year-to-date. Coles shares have been far more resilient in 2026, delivering strong positive momentum versus the banking giant.

Which is the better buy?

If I could only add one of these blue chips to my SMSF right now, my pick would be Coles. Here’s why: Coles may be on a higher P/E multiple, but its share price has delivered stronger momentum all year. The retail staple is churning out reliable profits and still providing a solid, fully franked dividend — albeit at a slightly lower yield than NAB. The steady consumer staples business has shown real resilience, especially through periods of economic uncertainty.

Meanwhile, NAB’s dividend yield edges out Coles and may appeal to income-focused SMSFs, particularly with those juicy franking credits. But the negative share price performance year-to-date — and sensitivity to interest rate cycles and regulatory shifts — gives me pause. Until NAB can demonstrate steadier share growth or less sector risk, I’d lean toward the proven strength and momentum of Coles as a solid core holding for a long-term SMSF strategy.

The post NAB vs Coles: Which is the better ASX blue-chip buy for SMSF investors? appeared first on The Motley Fool Australia.

More reading

• I look for 3 things in a retirement stock. These 5 shares have them all
• How much do I need in my superannuation to generate a $108,000 annual passive income?
• 3 ASX shares I think could still be thriving in 2040
• 3 reasons I would invest $10,000 in Coles shares
• How much passive income can I earn off a $700,000 superannuation balance?

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.

Commonwealth Bank of Australia (ASX: CBA) shares usually provide shareholders with a solid dividend yield. This decade, it has regularly hiked the passive income payout following the COVID-19 pandemic.

Investors may be looking at the CBA share price as a potential opportunity. At the time of writing, it’s down around 16% in the past six months. Lower prices typically mean a better valuation.

Part of the consideration when thinking about an investment for dividends should be the profitability and operational performance.

The ASX bank share‘s latest report contained solid numbers. Cash net profit grew 7% to $11 billion.

Looking at some of the core drivers of its profit over 12 months, retail transaction accounts grew by 6% to 12.3 million, the home lending balance rose by 7% to $636 billion, business transaction accounts grew 7% to 1.4 million and business lending rose 13% to $180 billion.

However, credit demand has diminished in the last few months following interest rate rises and taxation changes to capital gains and negative gearing.

With all of the above in mind, let’s take a look at what dividends owning CBA shares could generate in 2027.

Commonwealth Bank passive dividend income projection for 2027

We’re already a few months into CBA’s 2027 financial year, so it won’t be too long until we hear about the half-year numbers.

In terms of the potential passive income, analysts are expecting an improvement of the ASX bank share’s bottom line in FY27. This could help the business deliver a bigger dividend.

Based on the estimate on CMC Invest, Commonwealth Bank is projected to pay an annual dividend per share of $5.20 in FY27. That would represent a year-over-year increase of 3%.

At the time of writing, that forecast payout translates into a dividend yield of 3.4% excluding franking credits and 4.8% including franking credits.

Is this a good time to invest in CBA shares?

According to CMC Invest, there have been eight analyst ratings in the last three months. All of those ratings from experts were a sell. So, there’s a universal view from investment professionals that the Commonwealth Bank share price is overvalued.

How overvalued do those analysts think the ASX bank share is?

A price target tells us where analysts think the share price will go over the next 12 months.

The average price target of those eight analysts is currently $123.08. Therefore, that group of analysts are collectively suggesting the CBA share price could fall by close to 20% over the next year (at the time of writing).

Therefore, it could be wise to look at other ASX share opportunities for returns.

The post If I invest $20,000 in CBA shares, how much passive income will I receive in 2027? appeared first on The Motley Fool Australia.

More reading

• I look for 3 things in a retirement stock. These 5 shares have them all
• CBA shares jump 3% today: Is this the start of a rebound?
• I compared 5 of the ASX’s best shares. Here’s which one I’d buy today
• How much passive income can I earn off a $700,000 superannuation balance?
• 5 things to watch on the ASX 200 on Wednesday

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.