Author: openjargon

Building a passive income stream doesn’t require a huge amount of capital to get started.

In fact, a $5,000 investment can be enough to build a diversified foundation of dividend-paying ASX shares that generate income today and have the potential to grow payouts over time.

The key is focusing on businesses with resilient cash flows, established market positions, and a track record of rewarding shareholders.

With that in mind, here are five ASX dividend shares that I think could be worth considering for an income-focused portfolio.

APA Group (ASX: APA)

APA is one of Australia’s leading energy infrastructure companies, owning and operating gas pipelines and energy assets across the country. Its revenues are largely regulated or contracted, which provides strong visibility over future cash flows.

This stability has allowed APA to steadily grow its distributions over time, making it an attractive option for investors seeking long-term income rather than short-term gains. It trades with a trailing 6.2% dividend yield.

BHP Group Ltd (ASX: BHP)

BHP is one of the most popular dividend shares on the ASX, and it is easy to see why. As one of the world’s largest diversified miners, it generates enormous cash flows through its iron ore, copper, and metallurgical coal operations.

While commodity prices can fluctuate, BHP’s low-cost assets and strong balance sheet have enabled it to pay substantial dividends across cycles. For income investors, it offers exposure to global resources with the added benefit of fully franked dividends. It offers a trailing 3.6% dividend yield at present.

Telstra Group Ltd (ASX: TLS)

Telstra remains a favourite among income-focused investors. As Australia’s largest telecommunications provider, it generates steady cash flows from its mobile and network businesses.

The rollout of 5G and ongoing demand for data services has supported Telstra’s earnings base, while management’s focus on cost control and capital discipline has helped stabilise dividends. For a $5,000 portfolio, Telstra could provide dependable income with relatively low volatility.

It currently trades with a trailing dividend yield of approximately 4%.

Transurban Group (ASX: TCL)

Transurban owns and operates toll roads across Australia and North America. These assets generate recurring revenue supported by long-term concessions and inflation-linked toll increases.

For dividend investors, Transurban offers relatively predictable cash flows and the potential for gradual distribution growth over time, particularly as new projects are completed and traffic volumes recover.

It offers a trailing unfranked dividend yield of 4.6%.

Woolworths Group Ltd (ASX: WOW)

Finally, Woolworths is a classic defensive income stock. As Australia’s largest supermarket operator, it benefits from consistent demand for everyday essentials regardless of what is happening in the broader economy.

That stability underpins reliable earnings and steady dividends, which makes Woolworths a popular choice for long-term income investors. At present, it offers a trailing dividend yield of 3.1%.

The post 5 top ASX dividend shares I would buy with $5,000 appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Woolworths Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Transurban Group. The Motley Fool Australia has positions in and has recommended Apa Group, Telstra Group, Transurban Group, and Woolworths Group. 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.

The Netwealth Group Ltd (ASX: NWL) share price attracted attention after the company announced a $101 million compensation package for members impacted by the First Guardian Master Fund collapse, resulting in an expected $71 million hit to net profit after tax in 1H26.

What did Netwealth Group report?

• Agreed to pay $101 million in compensation to impacted Netwealth Superannuation Master Fund members
• One-off extraordinary expense to reduce 1H26 NPAT by approximately $71 million
• Compensation to be paid into affected members’ super accounts by 30 January 2026
• Compensation will be funded through a mixture of cash and debt
• FY26 dividend to be based on underlying earnings, excluding this one-off payment
• Recurring revenue, strong EBITDA margin, and positive cash generation maintained

What else do investors need to know?

Netwealth reached this compensation agreement following discussions with ASIC and has also resolved related proceedings, with ASIC not seeking any court penalties. The company and its trustee have provided enforceable undertakings to ASIC to complete payments as agreed.

Netwealth is also working closely with APRA, agreeing to uplift investment governance processes under the guidance of an independent expert. The company has already implemented several enhancements, such as a new executive role focusing on investment governance and greater transparency in monitoring investment options.

Broader industry and regulatory efforts are ongoing, and Netwealth continues to cooperate with stakeholders to ensure strengthened member protections going forward.

What did Netwealth Group management say?

Chief Executive Officer and Managing Director, Matt Heine, said:

The agreed outcome allows us to move forward and continue our work in supporting our members, our clients and our business. We have been in regular dialogue with impacted members. We know the level of distress the collapse of First Guardian has caused and it was critical to us to provide members with assurance by the end of the year that compensation would be forthcoming. We believe this is the right course of action for Netwealth and impacted members and is in line with our culture and values.

What’s next for Netwealth Group?

Looking ahead, Netwealth has reaffirmed previous FY26 guidance for net flows not materially different from FY25, and expects costs associated with First Guardian and related activities to be immaterial for the year ahead.

The business remains focused on continuous improvements in its governance, investing in people, technology, and compliance frameworks, supporting its long-term vision for a robust and innovative wealth management platform.

Netwealth Group share price snapshot

Over the past 12 months, Netwealth shares have declined 9%, trailing the S&P/ASX 200 Index (ASX: XJO) which have risen 3% over the same period.

View Original Announcement

The post Netwealth Group announces $101 million compensation after First Guardian collapse appeared first on The Motley Fool Australia.

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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 Netwealth Group. The Motley Fool Australia has positions in and has recommended Netwealth Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

Wealth and investment services firm Ord Minnett has provided fresh guidance on two ASX 200 stocks. 

The broker has reinforced its buy ratings on both, while slightly adjusting its price targets. 

Here’s what’s behind the ratings. 

Metcash Ltd (ASX: MTS)

This ASX 200 stock operates in the consumer staples sector.

It is a wholesale distribution and marketing company specialising in food, liquor, and hardware. The company supplies and supports independent retailers in Australia.

According to Ord Minnett, Metcash posted first-half FY26 earnings short of market expectations, driven partly by the earlier recognition of restructuring costs than consensus had forecast. 

The key food business met forecasts, but the hardware and liquor divisions fell short of expectations.

It also noted that as with Endeavour Group Ltd (ASX: EDV) and Coles Group Ltd (ASX: COL), the liquor market continues to struggle, as the industry faces headwinds from changing consumer attitudes to health and cost of living pressures. 

Liquor EBIT fell 8.4% excluding reconstruction costs, and we highlight the risk of greater promotional intensity from rivals as suppliers battle for market share.

Post the result, Ord Minnett cut EPS estimates by 8.0%, 9.2% and 8.3% for FY26, FY27 and FY28, respectively, primarily due to the challenges facing the liquor and hardware operations. 

This leads us to cut our target price on Metcash to $4.00 from $4.60, but we maintain our Buy recommendation on valuation grounds.

Based on the updated price target of $4.00, this indicates an upside of 23.46% for this ASX 200 stock from its current price. 

BlueScope Steel Ltd (ASX: BSL)

The ASX 200 company is an Australian-based steel manufacturer supplying global markets. 

Spun out of BHP Billiton in 2002, BlueScope produces a range of steel products, systems, and technologies and is one of the world’s leading producers of painted and coated steel products.

Ord Minnett said the company recently hosted an investor day, where the company showcased its new electric arc furnace (EAF). 

It seems Ord Minnett has a positive view on this development. 

Ord Minnett views the EAF project as positive, with a boost at the earnings before interest and tax (EBIT) line of $80 million annually targeted for the New Zealand division. Against the $160 million investment from BlueScope, this looks to be an optimal use of funds if the targets can be achieved.

Post the investor day, it left FY26 EPS forecast unchanged. 

However, Ord Minnett raised FY27 and FY28 estimates by 2.4% to incorporate increased earnings from the New Zealand assets.

Our target price on BlueScope increases to $27.50 from $27.00, and we maintain Buy recommendation.

The updated price target of $27.50 indicates an upside of 13.36% from yesterday’s closing price. 

The post Two ASX 200 stocks with buy recommendations from Ord Minnett 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.

ASX dividend shares that offer defensive and reliable earnings could be a smart call at a time when the outlook is uncertain in relation to inflation, AI outcomes and so on.

If an ASX dividend share can provide investors with a pleasing and rising payout, as well as long-term earnings growth, then it could generate pleasing total shareholder returns.

At the current valuations, I think the two names below can outperform the S&P/ASX 200 Index (ASX: XJO) over the medium term.

Sonic Healthcare Ltd (ASX: SHL)

Sonic Healthcare has an impressive market share in the pathology sector with a presence in countries like Australia, Germany, the US, the UK, Switzerland and other markets.

It provides a very valuable service to the population of those countries, which I’d describe as very defensive because there’s a certain level of demand each year – everyone gets sick sometimes.

Sonic Healthcare is investing in technology to help provide the next level of pathology services, with AI potentially assisting the company to be more efficient (in terms of costs) and also deliver a better outcome for patients.

Not only is the company naturally benefiting from ageing and growing populations, but it also occasionally makes acquisitions to boost its scale and geographic exposure.

The ASX dividend share has increased its payout in most years over the past three decades and the company’s leadership wants to continue the progressive dividend policy.

Excluding franking credits, its FY25 payout translates into a dividend yield of around 4.75%. I think the FY26 payout will be larger and the business looks a lot cheaper after falling close to 20% over the past year.

Charter Hall Long WALE REIT (ASX: CLW)

Commercial rental properties can provide investors with defensive operating earnings thanks to the resilient tenants that are utilising those buildings.

One of the most pleasing things about this real estate investment trust (REIT) is that it has a long weighted average lease expiry (WALE) of around nine years – the tenants are signed on to pay rental income for the long-term.

Not only is the rental income reliable, but it’s also growing, with the contracts having annual rental income growth linked to inflation or they have fixed increases.

The portfolio of properties is diversified across a number of sectors including hotels, service stations, industrial and logistics, office, data centres and social infrastructure. This helps protect against sector risk and allows the business to search for the best opportunities.

Charter Hall Long WALE REIT expects to hike its FY26 payout to 25.5 cents per security, translating into a forward distribution yield of 6.25%. The ASX dividend share has dropped 12% since September, shown above, providing a sizeable boost to the yield on offer and making the valuation more appealing.

The post These 2 ASX dividend shares are great buys right now 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 recommended Sonic Healthcare. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If you are looking to bolster your portfolio with some growing ASX 200 shares, then it could be worth taking a look at the two in this article.

That’s because analysts rate them as top buys and are expecting them to generate big returns for investors over the next 12 months.

Here’s what they are recommending to clients:

ResMed Inc. (ASX: RMD)

The first ASX 200 growth share that could be a strong buy is ResMed. It is a world leader in sleep apnoea treatment and respiratory care, serving a patient base that continues to grow as awareness improves and diagnosis rates increase.

More than one billion people globally are estimated to suffer from sleep apnoea, yet the vast majority remain undiagnosed. As testing becomes easier and healthcare systems catch up, that number represents a massive multi-decade growth runway for ResMed.

The company’s device ecosystem, software solutions, and cloud-connected monitoring tools create high switching costs and drive recurring revenue. This has seen ResMed continue to expand its margins, improve operating leverage, and grow its earnings at a solid rate.

With ageing populations, rising obesity rates, and increased global focus on respiratory care, ResMed is well placed to remain a dominant global medical technology company for many decades.

The team at Macquarie is bullish on this name. It recently put an outperform rating and $49.20 price target on its shares. This implies potential upside of 30% for investors over the next 12 months.

Web Travel Group Ltd (ASX: WEB)

Web Travel could be another ASX 200 growth share to buy. Following the spin-off of its online travel business into a separate listing, the company’s focus is now on WebBeds.

It is a platform that connects hotels and other travel service suppliers to a distribution network of travel buyers all over the world.

Travel demand continues to normalise globally, and wholesale accommodation platforms are benefiting from strong cross-border migration, rising mobility, and the shift toward digital booking ecosystems.

WebBeds’ business model offers high scalability and attractive operating leverage. And after a mixed few years, the company’s simplified structure, improving market conditions, and clearer strategic direction have positioned it well for a meaningful rebound.

Many analysts believe earnings could accelerate from here. One of those is Ord Minnett, which recently put a buy rating and $7.00 price target on the company’s shares. Based on its current share price, this implies potential upside of over 40% for investors from current levels.

The post Analysts say these ASX 200 shares could rise 30% to 40% appeared first on The Motley Fool Australia.

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

Broker Bell Potter released new reports yesterday initiating coverage on two ASX small-cap stocks. 

Small-cap stocks may appeal to investors as they can have significant growth potential compared to more established, blue-chip shares.

However it’s important to understand they can have significant volatility, as many of these small companies can be pre-profit, relying on funding, clinical trials etc. 

With that being said, here are two that have buy recommendations from the team at Bell Potter. 

Saluda Medical (ASX: SLD)

Saluda Medical is a commercial-stage medical device company commercialising spinal cord stimulation (SCS) therapy globally.

According to yesterday’s report, Saluda Medical is currently a single-product company, centred around its differentiated SCS product called the ‘Evoke System’. 

The company has been commercialising the Evoke System for ~3 years in the US, and ~5 years in Europe and Australia, for the treatment of patients with chronic pain of the trunk and/or limbs.

Bell Potter has initiated coverage on this small-cap stock with a buy recommendation (speculative) for several key reasons: 

• Saluda’s patented closed-loop system delivers more consistent and durable pain relief than conventional devices. In its Phase 3 trial, no patients had devices removed due to lack of efficacy over three years.
• IPO funds will expand the US sales force to >150 reps by FY26, supporting broader geographic coverage, deeper physician adoption, and a paddle lead launch in FY27 targeting neurosurgeons.
• US revenue exceeded US$50m in under three years (~2% of the US$2.2b SCS market). Bell Potter forecasts revenue approaching US$290m by FY29, with US market share rising to ~9%.
• It has an attractive valuation trading at ~1.7x FY26 EV/Revenue (3.0x P/S), a discount to peers (~5x). Successful execution and EBITDA breakeven by FY29 could support meaningful re-rating.

Based on this guidance, Bell Potter has a price target of $2.80 on this ASX small-cap stock. 

That indicates an upside of more than 88% from yesterday’s closing price of $1.485. 

American Rare Earths Ltd (ASX: ARR)

American Rare Earths is an Australian exploration company targeting the discovery and development of strategic technology mineral resources in the USA and Australia.

The team at Bell Potter have initiated a buy recommendation (speculative) on this ASX small-cap stock. 

In yesterday’s report, the broker said the company is uniquely positioned to capitalise on the US’ Strategic focus to reduce reliance on a China dominated rare earth supply chain. 

The Cowboy State Mine offers a long-term solution within the US to decouple from external sources of rare earths, particularly heavy rare earths DyTb.

Essentially, Cowboy State Mine could help the US secure domestic supply of dysprosium and terbium, reducing reliance on China for these critical minerals.

Bell Potter initiated its coverage with a price target of $0.65. 

This indicates an upside of more than 94% from yesterday’s closing price of $0.335.

The post Top broker just initiated coverage on two ASX small-cap stocks with a buy recommendation 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.

2025 could be the year investors learned patience the hard way, with these 2 bruised ASX 200 stocks proving stern teachers.

CSL Ltd (ASX: CSL) and James Hardie Industries Plc (ASX: JHX) have been belted in the past 12 months. The healthcare giant lost 37% in market value and the world’s leading producer of fibre cement building products scored even worse at 43%.

For investors with patience — and a strong stomach — these 2 heavyweight ASX 200 stocks may be setting up for redemption in 2026.

CSL Ltd (ASX: CSL)

Let’s start with CSL. The $87 billion healthcare company has endured a bruising year, with its share price sliding sharply as investors fretted over plasma collection costs, slower margin recovery and uneven vaccine demand.

For a company long treated as a “buy it and forget it” stock, the fall from grace has been jarring. But the ASX 200 stock hasn’t forgotten how to grow. Plasma volumes are improving, cost pressures are easing and management remains confident margins can normalise over time.

CSL still dominates global plasma therapies, owns enviable intellectual property and generates rivers of cash. If execution improves even modestly, 2026 doesn’t need to be heroic. It just needs things to be less bad for sentiment to turn.

Of course, risks remain. CSL must prove margin recovery isn’t just a slide deck promise. However, most analysts are bullish on the healthcare share. The average 12-month price target is $235, which implies a 35% upside.

James Hardie Industries Plc (ASX: JHX)

Then there’s James Hardie, the poster child for cyclical pain. Shares have been smashed as higher interest rates  slowed US housing activity, earnings forecasts were trimmed and the recent acquisition of the Us business Azek was viewed as an expensive one.

Investors hate uncertainty, and the $18 billion building materials business has had plenty of it.

Yet writing off James Hardie has rarely been a winning long-term strategy. The ASX 200 stock remains deeply leveraged to the US housing cycle, and history suggests that cycle eventually turns.

Add in James Hardie’s dominant market position in fibre cement, strong pricing power and long-term structural growth from renovation and rebuilding, and the 2026 outlook starts to look a lot less bleak.

TradingView data shows that most analysts recommend a hold or (strong) buy on James Hardie. Some expect the ASX 200 stock to climb as high as $45.11, which implies a 48% upside at the time of writing.

However, the average share price target for the next 12 months is $36.28. That still suggests a possible gain of almost 36%.   

The post Why these 2 battered ASX 200 stocks could shine in 2026 appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther 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 CSL. The Motley Fool Australia has recommended CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.