Author: openjargon

Woolworths vs JB Hi-Fi : Which should you pick in today’s economic environment?

With plenty of uncertainty in Australia’s economic outlook, many investors are weighing up defensive consumer staples like Woolworths Group Ltd (ASX: WOW) against more cyclical consumer discretionary options like JB Hi-Fi Ltd (ASX: JBH). If you’re wondering where your next investment dollar is better placed—staples or discretionary—let’s dive into the numbers, business strengths, and recent performance data to help you decide between Woolworths shares and JB Hi-Fi shares.

The case for Woolworths Group

Woolworths is one of Australia’s retail heavyweights, mainly known for its vast network of supermarkets across Australia and New Zealand. It also owns Big W, giving it a strong presence in both everyday groceries and discount department stores. While Woolworths previously had significant interests in liquor and hospitality, it split these off in 2021 to form Endeavour Group.

Woolworths’ main drawcard is its defensive profile. No matter how the economy is tracking, people still need to buy food and essentials, making Woolworths a classic ‘consumer staples’ play. Its massive market capitalisation of $46.69 billion reflects the size and reach of the group. With a current P/E ratio of 41.21, it’s trading at a premium—likely a nod to its stability in uncertain times. The stock offers a fully franked dividend yield of 2.54%, and dividends have been consistent over the years, as shown by its steady payout history. Woolworths’ shares have returned an impressive 33.1% so far this year.

The case for JB Hi-Fi

JB Hi-Fi sits firmly in the consumer discretionary camp, focusing on electronics, appliances, and home entertainment through its JB Hi-Fi, The Good Guys, and e&s stores. While the business has shown the ability to ride waves of demand for gadgets and household gear, its sales are more sensitive to consumer confidence and economic cycles compared to the staples sector.

JB Hi-Fi has a market capitalisation of $7.69 billion—much smaller than Woolworths, but still a major player on the ASX. Its most striking feature is value: a P/E ratio of just 15.74, noticeably lower than Woolworths’, and a hefty 4.79% fully franked dividend yield. Its earnings per share stands at 4.467—substantially above Woolworths’ 0.925 EPS figure. JB Hi-Fi’s dividend payments have also grown over recent years, reflecting its cash-generative business. However, the share price has fallen 23.5% year to date, a reminder of the higher risk and volatility faced by discretionary retailers when economic conditions sour.

Valuation comparison

Here’s how the core valuation numbers stack up for both companies:

Metric	Woolworths Group	JB Hi-Fi
Market Cap	$46.69 billion	$7.69 billion
P/E Ratio	41.21	15.74
Dividend Yield	2.54% (fully franked)	4.79% (fully franked)
Earnings per Share (EPS)	0.925	4.467
Dividend per Share	0.97	3.37
Year to Date Return	33.05%	-23.45%
Franking	100%	100%

Note: Woolworths Group Ltd’s reported P/E and EPS figures may be based on different earnings measures, which can cause apparent mismatches between the calculated and reported ratios.

Woolworths’ much higher P/E ratio indicates investors are paying up for perceived safety and stability, while JB Hi-Fi trades on a lower earnings multiple but offers a higher dividend yield and much stronger earnings per share.

Recent share price momentum

Comparing recent share price performance up to 7 October 2026:

• Woolworths Group closed at $38.22, with a modest 0.26% gain on the day. Its shares have shown positive momentum year to date, up 33.1%.
• JB Hi-Fi closed at $70.36, rising just 0.10% for the day, but with a sharp -23.5% return year to date—reflecting tough consumer conditions.

Which is the better buy?

If I had to pick between Woolworths and JB Hi-Fi in today’s economic climate, my choice would be Woolworths. Here’s why: defensive consumer staples like groceries and everyday essentials tend to hold up better when interest rates are high and households tighten the purse strings. Woolworths’ high P/E ratio clearly shows investors are paying a premium for perceived safety, but the company’s consistent, fully franked dividends and solid price performance this year back up that defensive reputation.

On the other hand, while JB Hi-Fi offers much stronger earnings per share and a very appealing dividend yield, its hefty share price drop year to date points to real challenges in the discretionary retail space. That doesn’t mean JB Hi-Fi isn’t a good business—far from it—but in a choppy economy, I think defensive shares like Woolworths look more attractive, even at a higher valuation.

For those who crave stability and steady income, I’d lean toward Woolworths shares right now. But if the economic outlook brightens and consumer spending bounces back, JB Hi-Fi might look much more appealing given its valuation and yield.

The post Woolworths vs JB Hi-Fi: Which ASX shares to buy now? appeared first on The Motley Fool Australia.

More reading

• Super Retail Group vs JB Hi-Fi: Which retail stock is better for beginners?
• Woolworths Group vs Telstra Group: Which ASX blue chip pays better passive income?
• Here’s the dividend forecast out to 2029 for Woolworths shares
• 2 ASX blue-chip shares offering big dividend yields
• 3 defensive ASX shares I’d buy in a market sell-off

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.

Wesfarmers Ltd (ASX: WES) shares are an excellent option for Australians seeking passive income. It’s such a solid business that I’d rather invest in it than receive the Age Pension.

Wesfarmers is the company that owns various businesses such as Bunnings, Kmart, Officeworks, Priceline, Target, a chemicals, energy and fertiliser business called WesCEF and other healthcare businesses (such as InstantScripts).

Australia’s Age Pension is one of the most generous in the world. The maximum per fortnight that a single person can receive was recently hiked to $1,237.70 per person.

For me, there are two key reasons why I’d prefer Wesfarmers shares to the Age Pension.

The payout is growing faster than inflation

The Age Pension is regularly growing over time, with inflation playing a key role in how fast it increases.

However, the Wesfarmers dividend is growing faster. Therefore, my cash flow could steadily improve beyond the Age Pension if I started with the same income.

In FY26 – the financial year that finished in June 2026 – Wesfarmers’ board decided to hike its annual dividend per share by 7.8% to $2.22. That payout growth rate was significantly more than the inflation rate.

Its dividend is projected to increase again in FY27. According to Commsec’s forecast, the business is expected to grow its payout by 5.5% in FY27, 6.5% in FY28, and 8.8% in FY29.

Of course, projections are not guaranteed future payments.

Potential for a rising Wesfarmers share price

Another reason I prefer this ASX dividend share is its potential for capital growth. I think it’s a good thing to have a strong asset base.

In the past four years, it has risen by 70%, at the time of writing. Past performance is not a guarantee of future returns.

The business has proven that its main businesses are excellent at growing their earnings. In FY26 alone, Bunnings Group (which includes Beaumont Tiles) grew earnings by 5.1%, and Kmart Group grew earnings by 6%. WesCEF grew earnings by 18.5%, but it’s significantly smaller than Bunnings and Kmart.

In my view, for two retailers to deliver solid growth in a difficult retail environment is really impressive.

Both Bunnings and Kmart achieve returns on equity (ROC) of close to 70%, while Wesfarmers’ overall return on equity (ROE) was 35.5%. The company achieves enormous returns on money invested in certain areas of the business, which, to me, is a stronger indicator that future internal investments can help profit grow.

Over the long-term, profit growth is the best driver for the Wesfarmers share price, so I’d say this business is a solid ‘compounder‘ option.

How many shares it’d take to match the Age Pension

I’m going to focus on the FY27 payout, given that investors have already received the FY26 dividend.

The business is projected to pay an annual dividend per share of $2.34 in FY27. The maximum Age Pension currently annualises to an approximate total of $32,180.

If we exclude franking credits from the income goal, it’d take 13,753 Wesfarmers shares. Including franking credits, it would take 9,627 Wesfarmers shares to match the Age Pension.

But, I wouldn’t suggest putting someone’s entire investment portfolio into one business. I’d include other quality ASX shares as well.

The post 9,627 shares of Wesfarmers pay an income equal to the Age Pension appeared first on The Motley Fool Australia.

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• Wesfarmers vs Coles: Which dividend share is better for retirees?
• Why this top broker is buying Charter Hall, Soul Patts, and Wesfarmers shares
• Down 20%: Is the Wesfarmers share price a top buy?
• How much passive income can I earn from a $950,000 superannuation balance?

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 positions in and has recommended Wesfarmers. 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.

Commonwealth Bank of Australia vs Coles Group shares

Thinking about putting a decent sum of money to work at age 50? You might be weighing up blue-chip mainstays like Commonwealth Bank of Australia (ASX: CBA) and Coles Group Ltd (ASX: COL). Both are household names, offer steady dividends, and can anchor a portfolio for long-term wealth – but which really stacks up as the better buy now?

The case for Commonwealth Bank of Australia

Commonwealth Bank of Australia is the country’s largest bank by market value, with a history dating back over a century. It’s truly a financial powerhouse, serving millions of Aussies and Kiwi customers across banking, funds management, insurance, and broking. CBA’s brand is instantly recognisable and its digital banking platform is widely regarded as an industry leader.

Looking at the fundamentals:

• P/E Ratio: 23.38 – a not-uncommon range for the big banks in recent years.
• Dividend yield: 3.31%, fully franked, with a long record of consistent, rising payouts (recent years showing annual increases).
• Market Cap: $251.64 billion – it absolutely dominates the ASX banking sector by size.
• CBA’s earnings per share is 6.517, supporting its substantial dividends.
• Importantly for many retirees or near-retirees, it franks all its dividends at 100%.

The case for Coles

Coles is a giant of the Australian supermarket scene, serving everyday groceries to millions of households each week. The company includes Coles Supermarkets, Coles Liquor, and significant online channels, making it a true consumer staple. Once part of the old Coles Myer empire, it found new independence after spinning off from Wesfarmers in 2018.

Some standout numbers:

• P/E Ratio: 28.18 – that’s above CBA’s, but supermarkets can warrant higher multiples due to their stable, recurring demand.
• Dividend yield: 3.41% (fully franked), a touch higher than CBA’s, and the dividend per share has shown steady growth since relisting.
• Market Cap: $30.75 billion – much smaller than CBA, but still a top-20 ASX company and a true blue-chip by any measure.
• Earnings per share: 0.812, in line with its sector and size.

Valuation comparison

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

Metric	Commonwealth Bank	Coles Group
P/E Ratio	23.38	28.18
Dividend Yield	3.31% (100% franked)	3.41% (100% franked)
Market Cap	$251.64 billion	$30.75 billion
Dividend per Share	$5.05	$0.74
EPS	6.517	0.812

Both companies pay fully franked dividends, nice for after-tax income in retirement. Coles edges out CBA for current yield (3.41% vs 3.31%) but trades at a noticeably higher P/E ratio. Just note, as banking and supermarket stocks belong to very different sectors, their typical P/E ranges don’t always line up apples-for-apples – supermarkets are often seen as more consistent defensive earners.

Recent share price momentum

Comparing recent share price momentum up to 7 October 2026:

• CBA: Closed at $150.37, down 1.32% on the day. Year to date, the return sits at -2.0%, showing modest underperformance in 2026 so far.
• Coles: Closed at $22.88, flat on the day. Year to date, the return is 10.4% – Coles has delivered a solid positive run in 2026 to date.

So if you’re after recent price momentum, Coles has the edge.

Which is the better buy?

If I was making a large investment at 50 and wanted a reliable, lower-volatility cornerstone holding, I’d personally lean toward Commonwealth Bank of Australia. Its size gives it economic moat, its payout history oozes consistency (with strong franking), and its banking model has longer-term pricing power. While its dividend yield is slightly lower than Coles’, the payout per share is much higher and has grown considerably over decades.

Coles is no slouch – I really like the company for its dependable earnings, and its share price has outperformed CBA over the past year. But at a noticeably higher P/E ratio and with much slower historical dividend growth, I see CBA as a more attractive blend of yield, scale, and proven resilience, especially if income and peace of mind are top priorities in the run-up to retirement.

That said, if steady capital growth and lower bank sector exposure appeal more, Coles is by no means a bad alternative. But for a large, set-and-forget holding at age 50, my pick would be Commonwealth Bank.

The post CBA vs Coles shares: Which is the better buy at age 50? appeared first on The Motley Fool Australia.

More reading

• How many CBA shares do I need to buy for $10,000 of passive income?
• CSL vs CBA: Which ASX share is best for SMSFs?
• How much is needed in superannuation to target a $100,000 annual passive income?
• Wesfarmers vs Coles: Which dividend share is better for retirees?
• If I invest $8,000 in CBA shares, what passive income could I earn in FY27 and FY28?

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 Ltd (ASX: NAB) shares may be one of the most popular choices for passive income on the ASX.

As one of Australia’s largest banks, the business has strong economic power that many other companies don’t have. The size of the business and the strength of its balance sheet give the bank pleasing advantages.

Of course, generating strong profits means the bank can pay a good dividend to investors. But, after multiple RBA rate rises, what do experts think could happen with the NAB dividend in the year ahead?

Projection for owners of NAB shares

The bank’s 2026 financial year has just ended, with it being the financial period ending 30 September 2026. Although we haven’t seen the result yet, we can now look ahead to what may happen in the 2027 financial year.

According to the projection on CMC Invest, the ASX bank share is projected to pay an annual dividend per share of $1.70 in FY26 – that’s the year that has just gone.

But we want to look at the dividend payment that could happen for the financial year ahead.

Based on CMC Invest’s projection, the business is forecast to slightly increase its shareholder payout to $1.705 per share. That would represent a year-over-year increase of 0.3%, not much, but better than nothing.

At the time of writing and the current NAB share price, that works out to be a cash dividend yield of 4.4% excluding franking credits. If we include the franking credits as part of the potential passive income, then the grossed-up dividend yield becomes 6.3%.

What would a $15,000 investment in the ASX bank share do?

At the time of writing, if someone were to invest $15,000 into NAB shares, they’d be able to buy 390 shares.

With that investment in the ASX bank share, those shares could unlock $664.95 of dividend cash and $949.93 of grossed-up dividend income, including franking credits.

In my view, that’s a solid passive income payout to start with.

Is this a good time to invest in NAB shares?

Time will tell how the company performs in the 2026 financial year, but given expectations and the current economic environment, analysts are divided on the business.

According to CMC Invest, 10 analysts have rated the business in the last three months. Three of those rating calls were a buy, four were a hold, and three were a sell.

The average price target for those 10 ratings was $39.13, suggesting a slight rise over the coming year at the time of writing.

However, the most pessimistic price target is $29.08, implying (at the time of writing), a decline of 24% over the year ahead. Meanwhile, the most optimistic price target is $48.64, suggesting a possible rise of 26% over the next 12 months.

Time will tell whether analysts are right to be pessimistic or optimistic about the ASX bank share. But with NAB’s slow growth in mind, there are other ASX shares I’d concentrate on first.

The post If I invest $15,000 in NAB shares, how much passive income will I receive in 2027? appeared first on The Motley Fool Australia.

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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.

Xero vs Megaport shares: Which tech stock is right for a 20-year-old investor?

If you’re a young Aussie investor looking to pick up your next tech stock, Xero Ltd (ASX: XRO) and Megaport Ltd (ASX: MP1) are two homegrown names you might have your eye on. Both have built innovative platforms and attracted plenty of attention — but they couldn’t be more different under the hood. Here’s how their investment cases stack up.

The case for Xero

Xero is a New Zealand-based software company specialising in cloud-based accounting software for small to medium-sized businesses. Since launching in 2006, Xero has helped transform the way businesses manage their finances, jumping onto the software-as-a-service wave early and expanding its market presence globally. As of its company profile, Xero is recognised as a leader in cloud accounting, offering flexible, subscription-based plans designed for business owners.

When I look at Xero’s key numbers, a few things stand out. It sports a sizeable market cap of $9.57 billion, making it a heavyweight in the Aussie tech scene. The company’s P/E ratio sits at 49.87 — definitely on the higher end, but not unheard of for high-growth tech firms. It has reported earnings per share (EPS) of -0.158, which is in the red. Xero does not currently pay a dividend, which means all profits and cash flow are being reinvested back into the business.

Lastly, Xero’s share price has taken a solid step back this year, with a Year To Date (YTD) return of -51.1%. That’s a big fall and could make it look like a bargain to some, but it’s also a reminder that tech investing can be volatile, especially if growth expectations reset.

The case for Megaport

Megaport operates in a different corner of the tech world, focusing on network-as-a-service infrastructure. It provides a global platform that lets customers connect to more than 1,100 data centres in 31 countries, mostly to link into major cloud providers like AWS, Azure, and Google Cloud. Customers can spin up connections across continents in minutes, and Megaport has been hustling into new frontiers, such as the AI compute infrastructure space (according to its most recent public description, via its 2025 acquisition of Latitude.sh).

Fundamentally, Megaport’s market cap is $5.01 billion, so while it’s no minnow, it’s notably smaller than Xero. Its reported P/E ratio is a whopping 370.00, which would normally make my eyes water — but its EPS is also negative (-0.218), so there’s a clear disconnect here. Megaport hasn’t paid a dividend either, and for a company still likely prioritising market growth and new ventures, that’s no surprise. However, what really jumps out is its YTD return: up 78.7%. That’s the kind of meteoric rise that puts a lot of eyes (and speculation) on a stock.

Valuation comparison

There are a handful of metrics we can line up directly:

Metric	Xero	Megaport
Market Cap	$9.57 billion	$5.01 billion
P/E Ratio	49.87	370.00
Dividend Yield	0.00%	0.00%
EPS	-0.158	-0.218
YTD Return	-51.1%	78.7%

Both companies are unprofitable on a trailing basis (negative EPS), yet Xero’s P/E is at least tied to rapid revenue growth expectations, while Megaport’s eye-watering P/E suggests enthusiasm around its growth story — or perhaps a stretch in valuation. Note: Megaport’s reported P/E ratio may be based on a different earnings measure (e.g. underlying or forward earnings) than the EPS figure shown, which is why they may appear inconsistent.

No dividends are currently offered by either stock, so this is firmly a growth play either way.

Recent share price momentum

Comparing recent share price performance up to 7 October:

• Xero closed at $56.10 on 7 Oct 2026, posting a small gain of 0.7% for the day, but its YTD return sits at -51.1% — a big comedown.
• Megaport finished at $21.07 on the same date, up 0.29% for the session, and boasts a 78.7% YTD gain — a rocket year-to-date.

Which is the better buy?

If I were 20 and weighing up where to invest next, my pick would be Megaport. Here’s why: the company is delivering massive price momentum, has tapped into surging demand for cloud connectivity, and its recent move into AI infrastructure is the sort of “future-facing” pivot that could pay off over time. Yes, the P/E ratio appears sky high and the company still runs at a loss (as does Xero), but the market clearly has faith in Megaport’s growth runway right now.

Xero is a quality business with a strong competitive position and larger scale, but its negative YTD return and lack of short-term momentum make it less exciting for a young investor looking for the next wave. Both stocks carry the risks typical for high-growth, unprofitable tech names, and neither pays a dividend — but for me, Megaport’s innovation and year-to-date surge give it the edge for those keen on growth and disruption. Just don’t bet more than you’re prepared to see fluctuate — the excitement factor cuts both ways.

The post Xero vs Megaport: Which ASX tech stock suits young investors better? appeared first on The Motley Fool Australia.

More reading

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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 Megaport and 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. 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) has long been one of the most popular dividend shares on the ASX.

And with its enormous customer base, strong profitability, and history of returning billions of dollars to shareholders, it isn’t hard to see why.

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

Why CBA remains popular

When Australians think about dividend shares, CBA is usually one of the first names that comes to mind.

And for good reason. The banking giant has a long history of paying shareholders twice a year, with fully franked dividends that can provide a valuable source of passive income.

But a good dividend history is only part of the story.

What investors like about CBA is its ability to generate billions of dollars in annual profits, giving management plenty of capacity to reward shareholders while retaining enough capital to support the business.

And if those profits continue growing over time, there should be opportunities for dividends to increase as well.

Of course, there are no guarantees. A weaker economy, rising bad debts, or pressure on lending margins could weigh on earnings and dividends.

Nevertheless, CBA arguably has a lot going for it as a long-term income investment, even if its dividend yield isn’t among the highest on the ASX.

So, how much passive income could its shares generate over the next 12 months?

How many CBA shares would you need?

There’s no getting away from the fact that generating $10,000 in annual passive income from CBA shares would require a sizeable investment.

After all, while CBA has a strong dividend history, its shares aren’t offering a particularly high yield at current prices.

Based on its current share price of $149.29 and the consensus FY 2027 fully franked dividend forecast of $5.15 per share, investors are looking at a forward yield of approximately 3.45%.

That means an investor would need to own around 1,942 CBA shares to generate $10,000 in annual passive income, before considering any additional benefits from franking credits.

Buying that many shares today would cost approximately $289,921.

Could the passive income grow?

Looking further ahead, consensus estimates forecast CBA’s earnings and dividends to increase in FY 2028.

The market is forecasting earnings per share of $6.86, which will be up from $6.67 in FY 2027.

This is expected to support an increase in annual dividends to $5.30 per share.

For someone holding 1,942 shares, that would lift annual passive income to approximately $10,293 in FY 2028.

These are only forecasts and actual dividends will depend on CBA’s financial performance and economic conditions. But with its strong market position and history of returning profits to shareholders, CBA arguably remains one of the first ASX shares worth looking at when building a passive income portfolio.

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

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• How much passive income can I earn from a $950,000 superannuation balance?

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.

Once again, it was a busy week for Australia’s top brokers. This has led to a number of broker notes being released. 

Three broker buy ratings that you might want to know more about are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Deterra Royalties Ltd (ASX: DRR)

According to a note out of Morgans, its analysts have retained their buy rating on this mining royalties company’s shares with a trimmed price target of $4.75. This follows news that Deterra has announced the acquisition of a royalty on ~84% of Ivanhoe Electric’s Santa Cruz copper project for US$74.15 million in cash. Morgans values the Santa Cruz royalty at A$110 million or A$0.21 per share and expects it to be around 7% earnings accretive. Outside this, the broker sees Deterra Royalties as a formidable inflation hedge with upside leverage to metal prices. The Deterra Royalties share price ended the week at $3.92.

Megaport Ltd (ASX: MP1)

Another note out of Morgans reveals that its analysts have retained their buy rating on this cloud infrastructure company’s shares with an improved price target of $27.00. The broker made the move in response to Megaport lifting its FY 2027 EBITDA guidance by 25% following further contract wins. Morgans highlights that Megaport’s compute and network businesses continue to deliver above expectations, with three new AI infrastructure contracts boasting a total contract value of around $1 billion. Collectively, it believes these set a path for annualised EBITDA in excess of $850 million, which has led to a material increase in Morgans’ earnings per share forecasts. The Megaport share price was fetching $18.78 at Friday’s close.

Mesoblast Ltd (ASX: MSB)

Analysts at Bell Potter have retained their buy rating and $4.45 price target on this biotechnology company’s shares. According to the note, the broker has described Mesoblast as an enigma for most Australian long only institutions. This is despite having achieved multiple clinical trial successes, product approvals, and having revenues likely to exceed US$200 million in FY 2027. However, Bell Potter expects this information gap to close over the coming year as the company delivers on additional wins in the clinic. As a result, the broker sees now as a great time to snap up the company’s shares. The Mesoblast share price ended the week at $2.00.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

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• 3 ASX 200 shares I’d buy and hold for the next decade

Motley Fool contributor James Mickleboro has positions in Megaport. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Megaport. 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.

ASX 200 utilities shares led the market sectors with a 3.64% gain last week.

Meanwhile, the benchmark S&P/ASX 200 Index (ASX: XJO) rose 0.4% to close at 8,716.6 points.

Defensive market sectors represent industries that sell essential goods and services.

They offer stability to investors during tough economic times because consumers continue to buy those goods and services.

Utilities is one example, healthcare and consumer staples are others.

ASX 200 healthcare shares also performed well last week, rising 3.53%.

Consumer staples shares, which incorporate Australia’s supermarkets and food producers, rose 2.31%.

ASX 200 REITs, which are considered somewhat defensive due to their relatively reliable property income, rose 3.58%.

Seven of the 11 market sectors finished the week in the green.

Let’s review.

Utilities shares led the ASX sectors last week

There are only 21 companies in the ASX 200 utilities sector.

Let’s review the performance of individual stocks in order of market capitalisation last week.

The Origin Energy Ltd (ASX: ORG) share price increased 4.31% to $11.37 last week.

The APA Group (ASX: APA) share price rose 2.81% to close at $10.97 on Friday.

Mercury NZ Ltd (ASX: MCY) shares lifted 0.72% to $5.60 per share.

The Meridian Energy Ltd (ASX: MEZ) share price fell 1.14% to $4.34 over the week.

The AGL Energy Limited (ASX: AGL) share price ascended 3.44% to close the week at $8.43.

New Zealand electricity supplier Contact Energy Ltd (ASX: CEN) rose 1.91% to $6.93 per share.

Genesis Energy Ltd (ASX: GNE) shares fell 3.45% to $1.96 per share.

The LGI Ltd (ASX: LGI) share price ripped 23.16% to $2.34 on news of a $22 million acquisition of solar power assets.

Frontier Energy Ltd (ASX: FHE) shares tumbled 13.04% to 20 cents despite no company announcements last week.

The Rivco Australia Ltd (ASX: RIV) share price increased 0.83% to $1.21 per share.

ASX 200 market sector snapshot

Here’s how the 11 market sectors stacked up last week, according to CommSec data.

Over the five trading days:

S&P/ASX 200 market sector	Change last week
Utilities (ASX: XUJ)	3.64%
A-REIT (ASX: XPJ)	3.58%
Healthcare (ASX: XHJ)	3.53%
Consumer Discretionary (ASX: XDJ)	2.4%
Consumer Staples (ASX: XSJ)	2.31%
Energy (ASX: XEJ)	2%
Industrials (ASX: XNJ)	0.02%
Communication (ASX: XTJ)	(0.19%)
Financials (ASX: XFJ)	(0.31%)
Materials (ASX: XMJ)	(1%)
Information Technology (ASX: XIJ)	(1.97%)

Check out the 17 ASX shares going ex-dividend next week.

The post ASX 200 defensive sectors outperform amid volatile trading appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• 17 ASX shares going ex-dividend next week
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• How much superannuation do I need to generate $100,000 per year in passive income?
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Bronwyn Allen 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 Apa Group. The Motley Fool Australia has recommended LGI Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

PLS vs Zip shares: Which could be a future multibagger?

When hunting for the next 10-bagger on the ASX, investors often find themselves weighing up established resource plays like PLS Group Ltd (ASX: PLS) and high-growth tech disruptors such as Zip Co Ltd (ASX: ZIP). Both companies have made a splash in their sectors: PLS Group powering Australia’s lithium ambitions, Zip shaking up the way we shop and pay. But which has the better shot at exponential returns? Here’s my breakdown of PLS Group vs Zip shares.

The case for PLS Group

PLS Group, formerly Pilbara Minerals, is a leader in Australia’s booming lithium sector. Its main asset, the Pilgangoora Lithium-Tantalum Project in WA, is one of the world’s biggest hard-rock lithium deposits. The company’s recent move into Brazil with the Colina lithium project expands its international footprint and resource base.

Turning to the key numbers:

• Market cap stands at $12.52 billion, making PLS a heavyweight in the critical minerals space.
• P/E ratio is 23.61, putting it in the “growth at a reasonable price” zone – at least vs. some resource names.
• Dividend yield, though modest at 1.31%, is fully franked – a rarity amongst lithium producers. This means shareholders may enjoy tax benefits on dividends.

Notably, the company posted an earnings per share (EPS) of $0.161 and returned $0.05 per share in dividends over the past year. However, the share price has slid 8.5% year to date, reflecting the volatility often seen in battery minerals.

The case for Zip

Zip is an ambitious fintech, best known for its digital “buy now, pay later” (BNPL) platform that operates across 12 countries. Zip aims to replace old-fashioned credit card debt with flexible, interest-free alternatives. Its two main products, Zip Pay and Zip Money, help customers spread out payments, making it popular among younger consumers and those wary of traditional credit.

Looking at the fundamentals:

• Market cap sits at $2.64 billion – about one fifth the size of PLS Group, but still a major player among local fintechs.
• P/E ratio is 22.85, almost matching PLS Group’s, showing a growth tilt even after a major short-term price pullback.
• Zip has not paid any dividend, choosing instead to reinvest back into international expansion and product development.

EPS for the last period was $0.091. What stands out sharply is its year to date return: down 37.1%, reflecting huge volatility and the ongoing challenges facing the BNPL sector.

Valuation comparison

Here’s how the two companies stack up on core metrics:

Metric	PLS Group	Zip
Market Cap	$12.52 billion	$2.64 billion
P/E Ratio	23.61	22.85
Dividend Yield	1.31% (100% franked)	0.00%
EPS	$0.161	$0.091
YTD Return	-8.53%	-37.08%

Note: Both companies’ P/E ratios are closely matched, but given they sit in very different sectors (resources vs. fintech), direct read-across can be misleading. Also, the EPS and P/E for each seems internally consistent, no red flags on calculation.

PLS Group stands out for actually paying a dividend and offering full franking. Zip, like most growth fintechs, is holding back on payouts to fund further expansion.

Recent share price momentum

Comparins recent share price performance up to 7 October:

• PLS Group closed at $3.88, up 1.8% on the day, but the 2026 year-to-date result is still a decline of 8.5%.
• Zip closed at $2.12, up 2.4% for the session, though still a brutal 37.1% loss year to date.

These readings show both are well off their 52-week highs. PLS Group’s pullback looks mild compared to Zip’s sharp slide, but both have seen some recent short-term positivity.

Which is the better buy?

If I’m searching for a potential ASX 10-bagger, I want explosive upside – but also a business that can deliver sustainable growth, not just hype. Zip, with its bruising share price and no dividend, certainly offers high risk and (in theory) high reward if it can crack profitability at scale and beat competitors. It’s a genuine disruptor but up against tough headwinds and rapidly shifting regulatory sands.

PLS Group, on the other hand, is already profitable, spinning off modest fully franked dividends, and positioned right in the thick of the global energy transition. The lithium market is volatile, but the underlying demand should keep growing as EV adoption increases. PLS Group isn’t without risk – lithium prices can swing wildly, and it is much harder for a $12 billion company to multiply tenfold than it is for a $2 billion upstart.

All things considered, if I had to back a future 10-bagger from these two, I’d lean — albeit cautiously — toward Zip. Its beaten-down share price and scalable business model give it more sheer mathematical upside, despite the clear risks. But this is not a low-risk play: only for those comfortable with volatility and the possibility of further steep losses. PLS Group feels more of a “steady compounder” right now – less likely to lose your shirt, but also less likely to shoot the lights out.

The post PLS Group vs Zip: Which ASX share could be a 10-bagger? appeared first on The Motley Fool Australia.

More reading

• Buy, hold, sell: BHP, Westpac, and Zip shares
• 6 ASX shares to buy in today’s weak market: experts
• Brokers tip these 3 ASX shares to jump 72% to 162%
• Zip vs Block: Which ASX payments share is better?
• Fortescue vs PLS Group: Which ASX mining share is the better buy?

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.

Not every well-known ASX share looks equally attractive to me right now.

Some have a clear path to stronger earnings over the coming years, while others face a more challenging environment.

With that in mind, here is how I would rate three popular ASX shares today.

BHP Group Ltd (ASX: BHP)

BHP is a buy for me, largely because of how I expect its business to develop over the next decade.

The mining giant already has an enormous copper business, and I think that commodity could become an increasingly important source of earnings.

Demand for copper is expected to grow as countries invest in electricity networks, renewable energy, electric vehicles, and the infrastructure needed to support artificial intelligence (AI).

BHP is positioning itself for that demand through its existing operations and a pipeline of projects across several countries.

I also like that its iron ore business provides substantial cash flow to help fund those ambitions.

Iron ore prices will inevitably fluctuate, particularly given China’s importance to the global steel market. But BHP’s scale and low-cost operations put it in a strong position to navigate those cycles.

The development of its Jansen potash project in Canada should also provide another earnings stream as production ramps up.

For me, BHP offers an attractive combination of established operations, long-term growth opportunities, and the potential for healthy dividends.

Westpac Banking Corp (ASX: WBC)

Westpac is a hold in my view.

There is plenty to like about the bank. It has an established position in Australian mortgages and deposits, a large customer base, and the ability to generate substantial profits through different economic conditions.

It also remains an important dividend payer, which makes it a reasonable option for investors seeking income.

My hesitation comes from the outlook for growth. Higher interest rates can support banking margins, but they also place greater pressure on borrowers and reduce demand for new loans.

With Australia’s housing market facing a more difficult period, I think Westpac could find it challenging to deliver particularly strong earnings growth.

There is also competition to consider. Banks are constantly competing for mortgage customers and deposits, which can limit how much benefit they receive from higher rates.

None of this makes Westpac a poor business. If I already owned the shares, I would be comfortable continuing to collect the dividends and giving management time to deliver.

But for fresh investment, I think there are more compelling opportunities elsewhere on the ASX.

Zip Co Ltd (ASX: ZIP)

Zip is my second buy, although it comes with considerably more risk than BHP shares.

The buy now, pay later company has spent recent years improving its financial position and building a platform for more profitable growth.

I think the opportunity in the United States is particularly exciting. There is still room for Zip to expand its merchant relationships, attract more customers, and capture a larger share of consumer spending.

As transaction volumes increase, the company has an opportunity to spread its operating costs across a larger business. I think that could translate into strong earnings growth over the coming years.

But I would be watching credit quality closely. Zip needs to demonstrate that it can continue to grow without taking on excessive lending risk, particularly as higher interest rates put pressure on household finances.

If management continues balancing growth with disciplined lending, I think the company could become substantially more profitable by the end of the decade.

And with the shares still trading well below their previous highs, I believe there could be significant upside if that happens.

Foolish takeaway

BHP and Zip would both be on my buy list today, although for quite different reasons.

BHP offers exposure to long-term commodity demand, while Zip has the potential to deliver much faster earnings growth.

Westpac remains a solid business, but I would be happy holding rather than buying at this stage.

The post Buy, hold, sell: BHP, Westpac, and Zip shares appeared first on The Motley Fool Australia.

More reading

• PLS Group vs Zip: Which ASX share could be a 10-bagger?
• How many BHP shares do I need to buy for $10,000 of passive income?
• Fortescue vs BHP: Which ASX miner is better for passive income in October?
• Brokers tip these 3 ASX shares to jump 72% to 162%
• Zip vs Block: Which ASX payments share is better?

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 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.