Author: openjargon

The S&P/ASX 200 Index (ASX: XJO) contains plenty of shares I would be comfortable owning for years.

For a 10-year investment, I would look for companies with strong positions today and plenty of room to keep growing.

With that said, these three ASX 200 shares would be high on my list.

Xero Ltd (ASX: XRO)

Xero is already a major player in cloud accounting, but I still think the business has a long way to run.

Its software helps small businesses manage areas such as invoicing, payroll, payments, reporting, and everyday financial administration.

Once a business has moved its accounts onto Xero and connected its accountant and other applications, the software can become deeply embedded in how it operates.

That can make its platform very sticky and help Xero retain customers while also giving it opportunities to offer them more services over time.

I particularly like the size of the market still available. Xero had around 4.9 million customers in FY26, compared with a global addressable market of roughly 100 million small businesses.

Payments, payroll, artificial intelligence (AI), and its expansion into areas such as accounts payable could all help Xero become a larger part of how those businesses manage their finances.

Over the next decade, I think both customer growth and deeper use of the platform could drive the company much higher.

ResMed Inc. (ASX: RMD)

ResMed would give me exposure to a completely different long-term opportunity.

The healthcare company develops devices, masks, and software for sleep apnoea and respiratory care.

ResMed has been growing for decades but is still only scratching the surface of its overall opportunity. More than one billion people globally are estimated to have sleep apnoea, while diagnosis and treatment rates remain relatively low. That leaves ResMed with a huge population still to reach.

Over a decade, I think the combination of an underserved healthcare need, recurring sales, and continued product development gives ResMed plenty of room to expand.

Goodman Group (ASX: GMG)

Goodman would be my third ASX 200 share pick.

The property group owns and develops industrial assets in major cities around the world, including warehouses, logistics facilities, and increasingly data centres.

I like the locations Goodman has accumulated. Large sites with access to power, transport links, and major population centres can become increasingly difficult to secure as cities grow.

That puts Goodman in a strong position as demand increases for logistics facilities and digital infrastructure.

Data centres could become particularly important as cloud computing and artificial intelligence require more computing capacity and electricity.

Projects of this scale take time and capital to develop, but Goodman already has the land, relationships, and development expertise needed to participate.

Foolish takeaway

10 years gives these businesses plenty of time to build on the positions they already have.

Xero can reach more small businesses, ResMed can treat more patients, and Goodman can continue developing scarce infrastructure in major global markets.

I think those opportunities make all three ASX 200 shares worth considering for a long-term portfolio.

The post 3 ASX 200 shares I’d buy and hold for a decade appeared first on The Motley Fool Australia.

More reading

• How much passive income could I make by investing $500 a month in ASX shares?
• 7 ASX 200 shares with reaffirmed buy ratings this week
• Forget Xero shares! Broker tips this top ASX tech stock for 24% gains
• 5 ASX shares I’d recommend to beginners
• CSL, Resmed, and more. See which ASX health stocks RBC Capital Markets has upgraded

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 positions in and has recommended Goodman Group, ResMed, and Xero. The Motley Fool Australia has positions in and has recommended ResMed and Xero. The Motley Fool Australia has recommended Goodman Group. 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 (ASX: CBA) shares are paying more dividends than ever before.

And with shares in the S&P/ASX 200 Index (ASX: XJO) bank stock recently trading for $152.75 apiece, down 15.1% from their 6 August close, is CommBank stock now a good buy for passive income?

Let’s have a look.

Should I buy CBA shares for passive income?

While we could look at the forward dividend yields for CBA, those are simply based on analysts’ current best forecasts. Or guesses, if you will.

With the future inherently uncertain, we’ll instead base our investment case on the FY 2026 dividends. Or trailing yields. Just keep in mind that future yields may be higher or lower depending on a number of company specific and macroeconomic factors.

As for FY 2026, CBA paid a fully franked interim dividend of $2.35 a share on 30 March.

When the bank released its FY 2026 results on 12 August, it reported a 7% increase in cash net profit after tax (NPAT) to $11 billion.

This saw management declare a fully franked dividend of $2.70 per share.

That brings the total FY 2026 dividends to $5.05 a share, up 4.1% from FY 2025 and representing a new all-time high passive income payout.

And at the recent CBA share price, it sees Australia’s biggest bank trading at a fully franked trailing dividend yield of 3.3%.

So, how does the dividend yield from the other big four ASX 200 bank stocks compare?

How do the other ASX 200 bank stocks stack up?

While investors buying CBA shares today will receive materially higher future dividend yields than those who bought the stock in the first weeks of August, CBA’s dividend yield still trails its three biggest rivals.

For example, at recent share prices, National Australia Bank Ltd (ASX: NAB) and ANZ Group Holdings Ltd (ASX: ANZ) shares both trade at dividend yields of 4.4%.

And Westpac Banking Corp (ASX: WBC) shares trade on a 4.5% fully franked trailing dividend yield.

What are analysts saying about CBA shares?

Despite the reliable passive income on offer, most analysts recommend steering away from CommBank stock at the moment. Many remain concerned the ASX 200 bank remains overvalued despite the past month’s share price retrace.

Earlier this week, Shaw and Partners’ James Bills issued a sell recommendation on CBA shares (courtesy of The Bull).

According to Bills:

In our view, the stock trades at a significant premium to domestic peers and on historical valuations.

While the bank maintains a high-quality franchise and strong market position, earnings growth is expected to remain modest amid competitive lending conditions and regulatory pressures.

Recent Federal government initiatives aimed at increasing housing supply and improving affordability is likely to lead to intensifying competition across the mortgage market and place pressure on lending margins.

Current valuations leave limited scope for further earnings driven upside. Investors may wish to take profits and re-deploy capital into opportunities offering stronger risk-adjusted return potential.

The post Down 15% and paying record dividends: Are CBA shares now a good buy for passive income? appeared first on The Motley Fool Australia.

More reading

• Are BHP, CBA, and CSL shares top buys?
• 7 ASX 200 shares with reaffirmed buy ratings this week
• Starting with $20,000, how to build a portfolio generating $5,000 a year in passive income
• Telstra vs NAB: Which ASX blue chip is the better buy?
• 6 ASX 200 shares boosted by brokers this week

Motley Fool contributor Bernd Struben 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.

The S&P/ASX 200 Index (ASX: XJO) has underperformed in 2026 compared to international markets. 

At the time of writing, Australia’s benchmark index is essentially flat year to date. 

But Aussie investors aren’t sitting around waiting for the tide to turn. 

Instead, they are looking towards international equities for stronger returns. 

A recent report from Betashares identified how this is playing out in the ASX ETF market. 

According to the report, international equities broke another monthly record in August at $3.8 billion in net inflows, surpassing July’s previous high of $3.56 billion. 

As a result of recent weakness in Australian equities, investors are rethinking their long-term investment plans with international equity ETFs emerging as a clear beneficiary. The category has now set a new all-time monthly record in consecutive months, while Emerging Market ETFs also saw record inflows this month.

For investors looking for global diversification with ASX ETFs, here are three that have performed well in 2026. 

Betashares Capital – Asia Technology Tigers ETF (ASX: ASIA)

One of the best performing ASX ETFs this year from Betashares has been this Asian technology-focused fund. 

Up 32% year to date, it tracks the performance of an index (before fees and expenses) comprising the 50 largest technology and online retail stocks in Asia (ex-Japan). 

The big driver has been AI and semiconductor exposure.

It essentially offers another way of playing the AI boom, through the companies manufacturing the hardware rather than primarily through the US companies selling the software/services.

Betashares MSCI Emerging Markets Complex ETF (ASX: BEMG)

Another theme in 2026 has been emerging markets.

Emerging markets generally refer to countries or regions undergoing fast economic growth. 

Usually, countries that are undergoing growth and industrialisation.

In the case of this fund from Betashares, it offers exposure to large and mid-cap stocks across 24 emerging market countries.

Almost 80% of the fund is made up by companies from Taiwan, South Korea, China, and India. 

By sector, it has a strong weighting towards tech and financials. 

In 2026, it has risen over 14%. 

Vaneck MSCI International Value (AUD Hedged) ETF (ASX: HVLU)

Another internationally focused fund that has outperformed the Australian market this year has been this fund from VanEck. 

It provides a diversified portfolio of 250 international developed market large and mid-cap companies, with high value scores as calculated by MSCI at each rebalance, with returns hedged into Australian dollars.

The value rating is based on: price to book value, price to forward earnings, and enterprise value to cash flow from operations.

It has risen by over 22% year to date. 

The post Aussie investors are pushing their chips into international ASX ETFs – Here are three great options appeared first on The Motley Fool Australia.

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• 5 ASX ETFs to buy and hold forever
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Motley Fool contributor Aaron Bell has positions in Betashares Capital – Asia Technology Tigers Etf. 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.

A new report from Betashares has reinforced the continued push from Aussie investors into ASX ETFs. 

The Australian ETF industry set new records in August, attracting $7 billion in net inflows and taking total assets to $382 billion. 

International equities led the way, while fixed income remained in focus as yields rose and CGT changes reshaped the investment landscape.

August overview

According to the Betashares Australian ETF Review: August 2026, The Australian ETF industry received an unprecedented $7 billion in net inflows. 

This was amid an ongoing decline in property values and conversation about reforms to CGT arrangements. 

This was above July’s then record of $6.83 billion, marking back-to-back months above $6.5 billion for the first time in the industry’s history. 

The number of ASX ETFs also passed 500 for the first time.

International Equities broke another monthly record in August at $3.8 billion, surpassing July’s previous high of $3.56 billion. 

As a result of recent weakness in Australian equities, investors are rethinking their long-term investment plans with international equity ETFs emerging as a clear beneficiary. 

The category has now set a new all-time monthly record in consecutive months, while Emerging Market ETFs also saw record inflows this month.

Earnings season takeaways

August saw the majority of US and Australian listed companies report in the Q2 and H2 seasons, respectively. 

In the US 86% of companies exceeded EPS estimates, the highest % since Q2 2021, with the broader market achieving an astonishing 50% year-over-year earnings growth rate. 

This outsized growth was attributable in part to unrealised investment gains reported in earnings from big tech’s unlisted AI investments, such as in Anthropic and OpenAI. 

Even excluding these windfalls operating EPS grew at 26%. 

The brightest sign of AI driven profitability gains came through reported 17% profit margins, the highest in more than 15 years. 

These developments continue to support the growth of large cap US technology companies. 

Within Australia there was also reason to rejoice with the ASX 200 achieving its first year of earnings growth since FY22. 

According to Tom Wickenden, Investment Strategist at Betashares, a majority of this was driven by outsized materials sector earnings which reported 36% growth. 

Alarmingly the weight of recent budget changes, rate hikes, and related poor consumer confidence saw next years earnings expectations being cut even as companies met expectations this season.

August winners 

In the month of August, the best performing ASX ETFs were: 

• BetaShares Global Gold Miners ETF – Currency Hedged (ASX: MNRS) – rose 31%
• Betashares Ethereum ETF (ASX: QETH) – rose 30%
• Global X Silver Miners ETF (ASX: SLVM) – rose 30%. 

In terms of top inflows: 

• Vanguard MSCI Index International Shares ETF (ASX: VGS)
• BetaShares Australia 200 ETF (ASX: A200)
• Betashares Funds – Betashares Global Shares ETF (ASX: BGBL). 

Another interesting note from the report was that copper has now overtaken iron ore in Australian mining earnings.

Copper is one of the most important materials in building global AI infrastructure and for the green energy transition. 

Data centres, power distribution, wiring. All of it uses copper at an extraordinary scale. So, while Australian investors cannot buy AI companies directly through a local index, Australia’s mining sector is now one way to benefit from these buildouts.

The post ASX ETF market just surpassed $7 billion in net inflows – Here’s where the money is going appeared first on The Motley Fool Australia.

More reading

• 4 most popular ASX ETFs revealed: survey
• How to make $26,000 of passive income from ASX shares
• 3 reasons to buy the Vanguard MSCI Index International Shares (VGS) ETF
• Vanguard ETFs vs. Betashares ETFs: Who’s coming out on top?
• Why I’d buy this ETF instead of picking 20 ASX shares

Motley Fool contributor Aaron Bell has positions in Vanguard Msci Index International Shares ETF. 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 Vanguard Msci Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

REA Group Ltd (ASX: REA) shares have been hotly covered over the past year. 

It is an online real estate advertising company that provides property and property-related services on websites and mobile apps across Australia, Asia, and North America.

Threats of AI, elevated property prices, and changing consumer behaviour have all raised questions about the company’s long-term growth prospects. 

In the last 12 months, REA Group shares have experienced volatility and ultimately remain down 30% in that span. 

Valuations from experts have fluctuated over this period, as the company’s strong market position and exposure to Australia’s property market continue to attract investor attention.

However, a new report from Bell Potter has suggested there may be better opportunities elsewhere for investors. 

Sell recommendation for REA Group shares

In Thursday’s report, the team at Bell Potter reiterated its sell recommendation. 

The broker said ongoing low clearance rates and lengthening days on market for properties suggest an ongoing mismatch in price expectations between buyers and sellers. 

Additionally, further declines in house prices are expected over the coming months. 

Days on market has increased by 8 days versus this time last year, while national auction data from SQM suggests that cumulative auctions are down -24% for the FY-to-date versus the comparable period last year; the cumulative number of houses sold via auction is significantly worse at -50% YoY.

Little to no upside over the next 12 months 

Along with the sell rating, Bell Potter has a price target of $148 on REA Group shares. 

From current levels, this indicates a downside of 7%. 

We retain our Sell recommendation. Despite REA’s ability to generate strong results in challenged operating environments, we continue to see significant downside risk to listings volumes/earnings vs. company guidance and consensus and await further data points via lending volumes and market listings before re-considering our thesis.

What are other experts saying?

Valuations appear mixed on REA Group shares. 

Last month, Tom Fairchild from Lazarus Capital Partners had a buy rating on this ASX 200 communications share. 

At the time, REA Group shares were trading at almost $180. 

15 analyst ratings via TradingView have an average 12-month price target of almost $200 on REA Group shares. 

This indicates a 40% upside from current levels. 

However, it is worth noting that individual targets range from highs of $253 per share to lows of $147, underscoring the wide gap in opinions on this ASX 200 stock. 

The post Why this expert believes it’s time to exit positions in REA Group shares 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.

How much you can own in assets while remaining eligible for the age pension will increase tomorrow, 20 September.

The changes reflect indexation adjustments, which are made twice per year, to account for inflation.

Let’s find out what’s changing tomorrow.

How much can you own and still get the age pension?

If you were born on or after 1 January 1957, you can apply for the pension from age 67.

You do not have to be in retirement to qualify for the pension. It’s an entitlement based on age, but it’s subject to a few rules.

Among the most important are the assets and income tests.

The pension is means-tested because it is social security designed to support senior Australians who need it most.

Tomorrow, the rules for both tests change. In this article, we’re focusing on the assets test changes.

Assessable assets under the test include superannuation, ASX shares, bonds, investment properties, cash, and home contents.

Your primary place of residence is excluded from the assets test.

If you rent, the rules allow you to own more in assets while still qualifying for the pension.

Under this next round of indexation changes, the upper thresholds for the assets test are increasing.

Here are the details.

Do you own your home?

Single homeowners whose assets are worth less than $333,000 qualify for the full age pension.

Single homeowners whose assets are worth between $333,001 and $745,750 (up from $733,500) will be eligible for a part-payment.

Couple homeowners whose assets are worth less than $499,000 are eligible for the full age pension.

Couple homeowners who have between $499,001 and $1,121,000 (up from $1,102,500) in assets will be eligible for a part-payment.

Do you rent your home?

Single renters whose assets are worth less than $600,000 qualify for the full age pension.

Single renters who have between $600,001 and $1,012,750 (up from $1,000,500) in assets will be eligible for a part-payment.

Couple renters whose assets are worth less than $766,000 qualify for the full age pension.

Couple renters who have between $766,001 and $1,388,000 (up from $1,369,500) in assets will be eligible for a part-payment.

Age pension to increase by $37 per fortnight

Pension payments are also increasing from tomorrow.

Singles will get an extra $36.80 per fortnight, raising the total age pension payment to $1,237.70 per fortnight.

Couples will get an extra $27.80 per partner, per fortnight, increasing the total payment to $933 per partner, per fortnight.

If you’re curious about how much income you can earn while still getting the age pension under the new rules, read our article here.

The post How much in assets can you own and still get the age pension under new rules starting tomorrow? appeared first on The Motley Fool Australia.

More reading

• Why this expert believes it’s time to exit positions in REA Group shares
• How much passive income could I make by investing $500 a month in ASX shares?
• Light & Wonder vs Aristocrat Leisure: Which gaming share wins?
• These 2 ASX fast food companies could jump 23% to 33%
• Are BHP, CBA, and CSL shares top buys?

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 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 $500 a month may not sound like enough to change your life.

But give it enough time and the numbers can become surprisingly large.

That is the power of combining regular investing with compounding.

But what about income? Could it help build a major source of passive income? Let’s run the numbers.

Why $500 a month can go a long way

One of the best things about investing regularly is that you do not need to worry too much about finding the perfect time to buy.

By putting $500 into ASX shares like CSL Ltd (ASX: CSL), Goodman Group (ASX: GMG), or Wesfarmers Ltd (ASX: WES) every month, you will inevitably buy during strong markets, weak markets, corrections, and everything in between.

This is called dollar-cost averaging or DCA.

It takes some of the emotion out of investing and turns wealth building into a habit, allowing compounding to start doing more of the work.

What could the passive income look like?

After 10 years of investing $500 a month, the portfolio would be worth approximately $100,000 based on a 10% average annual return. That return is not guaranteed, but it is achievable and largely in line with historical share market returns.

If an investor then moved that money into a portfolio producing a 5% dividend yield, it could generate around $5,000 of passive income each year.

But why stop there? If you keep going for another decade then things start becoming much more substantial.

For example, after 20 years, the portfolio could be worth roughly $360,000. At a 5% dividend yield, that could produce almost $18,000 a year in passive income.

By year 30, compounding has had even more time to work its magic. All else equal, the portfolio would be worth approximately $1 million, capable of generating around $50,000 a year at a 5% yield.

And after 40 years, the same $500 monthly investment could potentially grow to approximately $2.8 million.

A portfolio of that size yielding 5% could produce almost $140,000 a year in passive income. Not bad!

Key takeaway  

Investing for passive income is something that takes time. But as the examples above demonstrate, it certainly can be worth the patience.

The main thing is getting started. Investing $500 a month into ASX shares may not look meaningful today. But repeated hundreds of times and given decades to compound, it can become something very material.

The post How much passive income could I make by investing $500 a month in ASX shares? appeared first on The Motley Fool Australia.

More reading

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

Light & Wonder vs Aristocrat Leisure shares: which gaming giant is better?

When it comes to the world of gaming technology, both Light & Wonder (ASX: LNW) and Aristocrat Leisure Ltd (ASX: ALL) are heavyweights that regularly come up in discussions among keen Aussie investors. If you’re tossing up between these two innovative consumer discretionary companies, this side-by-side look at their fundamentals, performance, and outlook should help you decide which could be the smarter buy today.

The case for Light & Wonder

Light & Wonder, based in Las Vegas, develops and supplies technology-based gaming products and services to casinos and digital platforms. The company operates through three key segments: Gaming (physical machines and platforms for casinos), SciPlay (digital games for mobile and web), and iGaming (real-money online gaming and sports wagering solutions). According to its most recent public description, Light & Wonder draws on decades of experience to deliver content and platforms across both land-based and digital gaming.

Looking at the latest numbers, Light & Wonder currently has a market cap of $9.53 billion, making it a significant player but still notably smaller than Aristocrat. Its price-to-earnings (P/E) ratio stands at 25.88, and its earnings per share (EPS) is $3.40. Interestingly, the company doesn’t currently pay a dividend, so it’s more a growth-focused pick. Its year-to-date (YTD) return sits at –21.93%, so 2026 has been tough for LNW holders so far.

The case for Aristocrat Leisure

Aristocrat Leisure is one of Australia’s best-known global gaming companies, with operations in around 100 countries and licences in more than 340 gaming jurisdictions. The group divides its business into three arms: its core gaming technology (slot machines and casino systems), Aristocrat Interactive (real-money digital gaming), and Product Madness, which creates highly popular free-to-play mobile games. Though its roots are in land-based pokies, Aristocrat has pushed hard into the digital and US markets, and according to its most recent company profile, is now a true global player.

On the numbers, Aristocrat is a giant with a market cap of $36.72 billion. Its P/E ratio is virtually identical to Light & Wonder at 25.90. Notably, Aristocrat does pay a dividend, with a yield of 1.61% and a current dividend per share of $0.99. Unlike Light & Wonder, it’s delivered a positive YTD return of 6.57%, showing resilience in the recent market.

Valuation comparison

Here’s how the key numbers stack up:

Metric	Light & Wonder	Aristocrat Leisure
Market Cap	$9.53 billion	$36.72 billion
P/E Ratio	25.88	25.90
Dividend Yield	0.00%	1.61%
Earnings per share	$3.400	$2.374
YTD Return	-21.93%	6.57%

While both trade on almost identical P/E ratios, Aristocrat is much larger, is paying a dividend, and has delivered a positive YTD return.

Recent share price performance

Let’s look at the recent share price trends, comparing share price performance from 18 August 2026 to 16 September 2026.

• Light & Wonder closed at $133.25 on 18 August 2026 and finished at $123.68 on 16 September 2026, representing a decline of around 7.2% over the period.
• Aristocrat Leisure closed at $63.41 on 18 August 2026 and at $61.50 on 16 September 2026, a fall of approximately 3% over the same stretch.

In other words, both shares have slipped over this four-week snapshot, but Light & Wonder’s decline has been noticeably steeper.

Which is the better buy?

Based on the most recent data, my pick between these two is clear: I’d lean toward Aristocrat Leisure. Here’s why. Both companies are tech-savvy gaming leaders, but Aristocrat is steadier and offers shareholders a dividend stream. The company’s positive YTD return of 6.57% versus Light & Wonder’s –21.93% signals underlying strength. Both trade on similar P/E multiples, so Aristocrat doesn’t look overpriced versus its smaller rival. Light & Wonder may still offer growth potential down the track, but based on current momentum and yield, Aristocrat looks the more compelling buy today.

The post Light & Wonder vs Aristocrat Leisure: Which gaming share wins? 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 Light & Wonder Inc. The Motley Fool Australia has recommended Light & Wonder Inc. 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.

Fast-food operators are likely to face some headwinds over the coming year, broking house Morgans says, but there is still room for savvy operators to grow.

Share price gains still on the table

Morgans has named two companies as their top picks in the sector, with share price targets that imply solid gains for investors.

But the broking house warns that the consumer outlook is continuing to weaken, with interest rate rises at the centre of that theme.

Morgans said:

The RBA is back at 4.35% after three rises this year and looks set to hike again in late September. Consumer sentiment has dropped to 84.4, below neutral and weaker than a year ago, with real incomes still going backwards. We expect FY27 to be a tougher year for the consumer than FY26.

The broker said that for fast-food operators, growth has to come from increased sales, not price, “because a household absorbing a fourth rate rise will likely trade down or out if prices rise further again”.

They added:

Operators that lift revenue without leaning on price can hold margins as the cost base inflates, while those still taking price to cover soft comps risk losing volume. The sustainable way to hold margin is to grow the top line on traffic, attach and mix behind a value proposition strong enough that customers keep coming without price cuts.

Broker names its two picks

Morgans’ top pick in the sector is Guzman Y Gomez Ltd (ASX: GYG), with a price target of $31 against $25.04 at the time of writing.

They said:

It is the highest-quality operator in our coverage, with strong unit economics and ambitious but achievable FY30 targets. It took the least price and still grew same store sales 5.3%, almost all on traffic, and its fresh, protein-led menu aligns best with consumer trends. Management has commenced the buy back and, given its strict capital allocation and ROI hurdles, we view this as a clear demonstration of where it sees value. The next catalyst is the quarterly trading update in October.

Second in line is Collins Foods Ltd (ASX: CKF), with Morgans having a price target of $10.60 against $7.93 at the time of writing.

Morgans said re Collins Foods:

In our view, CKF screens cheap and holds a strong value proposition, given KFC’s well placed value menu in a tough consumer environment. Kwench and daypart expansion into late-night and breakfast add further opportunity to attach and increase traffic. The growth opportunity in Germany is not priced in by the market, and we see the midpoint of its store opening target (45-90 by FY30, without acquisitions) as achievable.

Morgans has a hold rating on Domino’s Pizza Enterprises Ltd (ASX: DMP) with a price target of $20 compared to $19.45 at the time of writing.

The post These 2 ASX fast food companies could jump 23% to 33% 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 positions in and has recommended Domino’s Pizza Enterprises. The Motley Fool Australia has recommended Collins Foods and Domino’s Pizza Enterprises. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), and CSL Ltd (ASX: CSL) are three of the biggest shares on the ASX.

I think all three have strong long-term investment cases, although for quite different reasons.

Here is why I would be happy to buy each of them today.

BHP shares

BHP would be my pick for long-term exposure to the resources sector.

The company already owns some of the world’s largest mining operations, giving it a strong base from which to keep investing.

Iron ore remains an important source of cash flow, but I am particularly interested in where BHP’s copper business could be heading.

Copper will be needed for electricity networks, renewable energy infrastructure, electric vehicles, data centres, and many other areas likely to attract significant investment over the coming decade.

Bringing new copper supply online can also take many years. BHP already owns major assets and has the financial strength to continue investing, while weaker competitors may struggle.

Commodity prices can be volatile, so earnings will never be perfectly smooth. But I think BHP’s scale and portfolio of long-life assets make it one of the ASX miners I would be most comfortable owning for years.

CBA shares

CBA is my preferred major Australian bank.

The company has built extremely strong customer relationships across home lending, deposits, business banking, and everyday financial services.

I also think its technology gives it an important advantage. The CommBank app has become central to how many customers manage their finances, making it easier for CBA to deepen those relationships and offer additional products.

That does not mean the bank will suddenly become a rapid-growth company. Australian banking is highly competitive, and CBA regularly trades at a premium valuation.

But I think the quality of the business can justify paying more than I would for some of its rivals.

Add in the potential for fully-franked dividends, and I think CBA can offer investors a strong combination of income and capital growth.

CSL shares

CSL gives me a completely different opportunity.

The healthcare giant has been through a difficult period, but I think the earnings outlook is improving.

CSL has major positions in plasma therapies, vaccines, and specialist medicines, backed by a global collection network and operations that would be extremely difficult to replicate.

The business also has opportunities to improve margins as productivity increases and some of the pressures that weighed on recent results ease.

CSL shares have already recovered substantially from their lows, so the bargain available earlier this year has been missed. Even so, I still think the valuation leaves room for worthwhile returns if earnings continue growing over the next few years.

Foolish takeaway

Yes, I think BHP, CBA, and CSL shares are all top buys today.

BHP gives me exposure to resources that should remain important for decades, CBA is the Australian bank I would most want to own, and CSL still has room to rebuild earnings after a difficult period.

I would be comfortable buying any of the three and giving the investment plenty of time to develop.

The post Are BHP, CBA, and CSL shares top buys? appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has positions in CSL and Commonwealth Bank Of Australia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia has recommended BHP Group and CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.