Author: openjargon

Looking for big returns? If you are, then it could be worth checking out the two ASX shares in this article.

That’s because analysts have just put buy ratings on them and are expecting upside of at least 20% from current levels.

Here’s what they are recommending:

Netwealth Group Ltd (ASX: NWL)

Bell Potter thinks this ASX share could be being undervalued by the market, especially after a strong quarterly update this week.

In response to its update, the broker has retained its buy rating and $30.00 price target on Netwealth’s shares. Based on its current share price of $24.43, this implies potential upside of over 20% for investors over the next 12 months.

Commenting on its recommendation, Bell Potter said:

NWL has provided an update across multiple fronts, highlights being the first material endorsement of its new private wealth and stockbroking solution, as well as long-term ambitions for the group. This includes more advanced net flow guardrails. We expect the conversation to move towards growth (and away from dissecting margins). The update sees net flows revised up, after delivering periods of $15B. We expect this will release doubts around governance, market volatility and proposed tax changes.

Our Buy rating is unchanged, and we upgrade our net flow estimates +8% FY27-29. Building in margin guidance prompts us to downgrade EPS -7%/-4% and we leave headroom on the FUA target. NWL is looking to replicate EPS growth. The mandate win is the first example of a catalyst, independent of any potential vendor attrition.

ResMed Inc. (ASX: RMD)

Morgans highlights that this sleep disorder treatment company’s shares have de-rated to their lowest PE ratio since the GFC.

As a result, the broker believes a buying opportunity has opened up and has put a buy rating and $41.72 price target on its shares. Based on its current share price of $31.44, this implies potential upside of approximately 33%.

Commenting on ResMed shares and its buy thesis, Morgans said:

RMD has de-rated to ~16x forward earnings, its lowest valuation since the post-GFC period, despite consensus continuing to forecast double-digit EPS growth. GLP-1 therapies, positive Phase III data from Apnimed’s oral OSA therapy, the prospect of Philips re-entering the US PAP market from 2027 and broader healthcare sector de-rating, have driven recent share price weakness.

While these risks are real, current industry data and RMD’s operating performance provide limited evidence of a material deterioration in underlying demand. We make no changes to FY26-28 forecasts or our A$41.72 target price. BUY.

The post Why these ASX shares could rise 20% to 30% appeared first on The Motley Fool Australia.

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• Broker tips 20% and 23% upside for these 2 ASX stocks
• New parents are now earning superannuation on parental leave. Here’s how to make the most of it
• Why I want to own these ASX shares brokers rate as buys
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today

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

If I had $2,000 to invest in ASX growth shares this July, I would be looking for businesses where the long-term opportunity looks strong and the valuation is attractive.

Here are two ASX growth shares I think tick those boxes and would consider buying today.

Catapult Sports Ltd (ASX: CAT)

Catapult Sports is a growth share I think is much more interesting than the current share price suggests.

The company provides wearable technology, video analysis, and performance software used by professional sporting teams around the world. Its technology helps coaches and performance staff understand player workload, improve training programs, analyse tactics, and make better decisions around athlete management.

What I like about Catapult is that it solves a very specific problem. Elite sports teams are constantly looking for small advantages. A better understanding of player fatigue, a more effective training session, or improved tactical analysis can influence results.

That means the technology is not just a nice addition. It can become part of how teams operate.

I also think the long-term opportunity is larger than many investors realise. Professional sport is becoming increasingly data-driven across football, rugby, basketball, American football, cricket, and many other competitions. The best teams are looking for more information, not less. This could result in growing demand for Catapult’s products over the next decade.

The shares are down around 55% from their highs, which has clearly damaged investor confidence. But I think that creates an opportunity to look beyond the short-term sentiment and focus on the underlying business.

SiteMinder Ltd (ASX: SDR)

SiteMinder is another ASX growth share I think has an interesting long-term story.

The company provides technology that helps hotels manage their online presence, connect with booking channels, improve direct bookings, and manage their rooms more effectively.

I think this is a fascinating part of the travel industry because it focuses on the behind-the-scenes technology that makes bookings possible.

Hotels compete for customers every day. They need to manage pricing, availability, online channels, and customer relationships across an increasingly digital environment. SiteMinder helps simplify that process.

What I like about the company is that it sits in the middle of a major industry shift. Travel has become more technology-driven, and accommodation providers need better tools to compete.

The artificial intelligence opportunity is also interesting. As hotels look for more automation and smarter ways to manage demand, software platforms that can provide better insights and efficiency could become increasingly valuable.

The shares are down around 50% from their 52-week high, and the business still needs to prove it can deliver sustainable profitable growth. But I think the long-term opportunity remains attractive. The hotel industry is huge, and the technology behind every booking is becoming more important.

Foolish takeaway

I think Catapult and SiteMinder are two examples of growth companies where the market may be focused more on the present than the future.

Both businesses are still building their stories, and execution will remain important.

But I like companies that solve real problems in growing industries. Catapult is helping professional teams make better decisions, while SiteMinder is helping accommodation providers compete in a more digital world.

Those are the types of growth opportunities I would be happy to own for the long term.

The post 2 ASX growth shares down 50%+ that I’d buy with $2,000 in July appeared first on The Motley Fool Australia.

More reading

• These ASX tech shares crashed hard. Could they double from here?
• How should I invest my money in FY27?
• This beaten-down ASX tech share could rise almost 50%
• 5 things to watch on the ASX 200 on Thursday
• Buy, hold, sell: Catapult Sports, Amcor, Transurban shares

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 Catapult Sports and SiteMinder. The Motley Fool Australia has positions in and has recommended Catapult Sports and SiteMinder. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Universal Store Holdings Ltd (ASX: UNI) share price has seen plenty of volatility over the past year, as the chart below shows. I think it has already demonstrated it’s one of Australia’s top retail shares, and it still has significant growth potential.

Universal Store is not one of the most famous retailers on the ASX, but it’s quickly growing into an impressive force in the space.

It owns a portfolio of premium youth fashion brands, including Universal Store and Perfect Stranger and CTC (trading under THRILLS and Worship). The company operates 121 physical stores across Australia.

There are a few reasons why it looks like one of Australia’s top shares to consider for the next few years.

Solid revenue growth with great outlook

The last few years have been a tough retail environment for many operators, but Universal Store has managed to deliver strong top-line growth over the past five years.

FY26 looks like another year of strong growth for the business, particularly for its two core brands.

Its latest trading update showed group retail sales in the first 43 weeks of FY26 grew 14%, with Universal Store sales growth of 11.8% and Perfect Stranger sales growth of 39.8%. Universal Store’s like-for-like sales growth was 8.5%, and Perfect Stranger’s LFL sales growth was 12.9%.

The LFL sales growth shows the existing store network is performing strongly, while new stores are also adding significant growth for the brands. For example, Perfect Stranger currently has a store network of 26 locations and has opened seven new stores in FY26.

To be counted as one of Australia’s top shares, I think a business needs to demonstrate solid revenue growth. It ticks this box.

Rising profit margins

The business has a strong track record of growing profit margins, meaning its bottom line is rising faster than the top line. Net profit growth is essential because it’s what investors usually value a business on, and profit generation funds dividends.

For example, in the FY26 half-year results, group sales grew 14.2%, the gross profit margin increased by 150 basis points (1.50%) to 62.1%, and the underlying net profit grew by 22%.

Profit margins are expected to rise again in FY26, according to the company’s guidance. Based on the midpoint of its guidance, FY26 sales are projected to rise 11.5%, and underlying operating profit (EBITA) could grow by 15.4%.

I think rising profit margins are a key factor that helps an ASX share deliver strong shareholder returns.

Compelling shareholder metrics

The investor metrics the company trades at remain very attractive, in my opinion.

According to the projections on CMC Invest, the Universal Store is trading at less than 15x FY26’s estimated earnings, with a potential grossed-up dividend yield of 7.8%, including franking credits.

In my view, the business is undervalued and it could be a very good buy after dropping 18% since March 2026, making it one of Australia’s top shares.

The post A rare buying opportunity in 1 of Australia’s top shares? 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 Universal Store. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Owning Westpac Banking Corp (ASX: WBC) shares has been a typical ASX blue-chip share pick for investors seeking passive income.

The ASX bank share typically trades on a relatively low price/earnings (P/E) ratio valuation and has a fairly generous dividend payout ratio.

Westpac has a lot of competition in the banking space. There are numerous ASX-listed competitors, and plenty more not listed on the ASX. Some of the largest ASX-listed banking competitors are Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB), ANZ Group Holdings Ltd (ASX: ANZ), Macquarie Group Ltd (ASX: MQG), Bank of Queensland Ltd (ASX: BOQ), MyState Ltd (ASX: MYS), Bendigo and Adelaide Bank Ltd (ASX: BEN) and Pepper Money Ltd (ASX: PPM).

Even though there is all of that competition, the bank still makes billions of net profit each year, which helps fund the company’s solid dividend.

For an investor who wants $10,000 of annual passive income, let’s take a look at what level of passive income Westpac is projected to pay in FY26.

ASX bank share dividend forecast

Westpac’s financial year ends in September, so we have just passed the three-quarters mark of the 2026 financial year. It will be a few months until the annual report is revealed and show what the profit figures are.

Until we know for sure what the numbers are, we can refer to what analysts have forecast the ASX bank share may be able to deliver.

According to the projection on Commsec, the ASX bank share could pay an annual dividend per Westpac share of $1.54 in FY26.

At the time of writing, that translates into a dividend yield of 4.3%, excluding franking credits.

That means, to generate $10,000 of annual passive income from Westpac in FY26, an investor would need 6,494 Westpac shares to receive that much in dividends.

Excitingly for shareholders, the bank is projected to see a 0.6% rise in its dividend per share to $1.55 in FY27.

If we focus on the forecast amount, an investor would only need 6,452 Westpac shares for $10,000 of annual passive income, excluding franking credits.

Is this a good time to invest in Westpac shares?

There are a lot of competitors that want to take market share from Westpac. It’s normal to see margins under pressure when there are challengers wanting to grow, such as Macquarie. It’s possible that Westpac’s margins could decrease in the coming years, as well as its market share, given how rapidly Macquarie is growing.

According to Commsec’s collation of analyst opinions on the business, there are currently no buy ratings, seven hold ratings and nine sell ratings.

It seems analysts are pessimistic about the ASX bank share’s future prospects right now, but I think there are opportunities out there today that could grow earnings over the the long-term.

The post How many Westpac shares do I need to buy for $10,000 of passive income? 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 positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Bendigo And Adelaide Bank. The Motley Fool Australia has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

History is on the side of ASX shares right now.

July ranks as the second-best month for ASX shares, rising approximately 72% of the time since 1980. Both July and August historically form the strongest two-month period of the entire calendar year.

The first week of FY27 has already reflected that pattern.

ASX shares are marginally up as gold stocks surged and new financial year institutional flows rotated into beaten-down FY26 laggards. Healthcare, discretionary, and materials all led the charge.

The question for investors is whether that momentum can continue, and which specific stocks are best positioned to carry it.

Why July tends to deliver for ASX shares

The July seasonality effect has a few drivers.

Tax-loss selling in May and June pushes weaker stocks lower ahead of the financial year-end, as investors crystallise capital losses to offset gains made elsewhere.

Once the new financial year begins, that selling pressure on ASX shares evaporates and often reverses, as institutional investors rebalance their portfolios and rotate into undervalued names.

AMP chief economist Dr Shane Oliver has confirmed that the typical pattern is for ASX shares to strengthen from October through to July, followed by weakness through September.

That seasonal pattern has been borne out in the first week of FY27. Healthcare and materials are already rebounding sharply from their FY26 lows.

BHP: the materials recovery story

BHP Group Ltd (ASX: BHP) was one of the ASX’s great FY26 performers, skyrocketing 62% to close FY26 at $59.40 and hitting a record high of $65.98 in June.

Morgan Stanley renewed its buy rating on BHP this week with a 12-month price target of $67.50, implying more than 10% upside from current levels into FY27.

The copper supercycle thesis that drove BHP’s FY26 outperformance has not changed heading into FY27.

AI data centre construction, electric vehicle adoption, and grid infrastructure investment continue to drive copper demand at a pace that supply cannot easily match.

CSL: the FY26 dog becoming FY27’s darling

CSL Ltd (ASX: CSL) was one of FY26’s most painful stories, falling 52% to finish the year at $114.74.

However, the first weeks of July have been more positive.

CSL has rallied more than 30% off its 3 June low. The stock has recovered the entirety of its May selloff in this reversal.

The buying looks increasingly like institutional reallocation at the start of FY27, with investors rotating into so-called FY26 “dog” names in the expectation they become FY27’s darlings.

CSL’s FY26 full-year result, due 19 August 2026, will be the real test of whether the recovery has genuine earnings support or is purely sentiment-driven.

Morgans retains a buy rating with a price target of $147.59, implying significant further upside even after the recent bounce.

Goodman Group: the AI infrastructure compounder

Goodman Group (ASX: GMG) offers a different angle on the July thesis.

While BHP captures the materials recovery and CSL captures the healthcare rotation, Goodman captures the structural, multi-year AI infrastructure buildout.

Data centres now make up 73% of Goodman’s development pipeline. This development pipeline is on track to reach $18 billion by June 2026, with a 6.4 gigawatt global power bank that competitors cannot easily replicate.

Both Morgans and UBS carry price targets around $36, implying meaningful upside from current levels.

The risk: seasonality is a guide, not a guarantee

AMP’s Dr Shane Oliver has cautioned that seasonal patterns can be overwhelmed by contrary fundamental forces when they are strong enough.

The RBA’s signalling of further rate hikes remains a potential headwind for rate-sensitive names including Goodman.

CSL’s recovery depends on the August result delivering earnings support, not just sentiment reversal.

And BHP’s copper thesis could be tested if Chinese industrial demand data disappoints through the month.

Foolish takeaway for ASX shares

July is historically the ASX’s second-best month, rising 72% of the time since 1980.

The first week of FY27 has already reflected that seasonal pattern, with healthcare, materials, and discretionary all surging.

BHP, CSL, and Goodman each offer a different and complementary way to participate in what the seasonal data, the early FY27 evidence, suggests could be a strong month for Australian shares.

The post July is historically one of the best months for ASX shares. Can July FY27 deliver? appeared first on The Motley Fool Australia.

More reading

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• How to tell if an ASX share is cheap or a value trap
• How should I invest my money in FY27?

Motley Fool contributor Mark Verhoeven 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 and Goodman Group. The Motley Fool Australia has recommended BHP Group, CSL, and Goodman Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

For investors looking for ASX 200 stocks with solid upside, Develop Global Ltd (ASX: DVP) and Netwealth Group Ltd (ASX: NWL) are two options to consider.

While these ASX shares have performed very differently in 2026, Bell Potter sees similar upside moving forward. 

Here’s what the broker is tipping over the next 12 months. 

Develop Global Ltd (ASX: DVP)

Develop Global is an Australia-based resources company that operates a unique hybrid business model centred on decarbonisation and energy transition.

In 2026, its share price has risen over 32% on the back of strong sector wide tailwinds. 

A new report from Bell Potter suggests this rise can continue in the next year. 

Bell Potter raised its outlook for Develop Global because copper and zinc prices are stronger than expected, although silver prices are a little weaker.

It expects the Woodlawn project to have its first full quarter operating at commercial production levels, with a chance of producing even more than planned as the mine continues to improve. 

Higher-grade ore is also expected to be mined over the next year, which should increase copper production.

The broker also expects DVP to benefit from unusually low treatment and refining charges, meaning the company keeps more of the value from the copper it produces. Overall, these factors should support stronger earnings.

The broker has reiterated its buy recommendation and increased its price target to $7.20. 

From yesterday’s closing price, this indicates 20% upside for Develop Global shares. 

FY27 marks a transformational year for DVP as ramping Woodlaw and Pioneer Dome production, and copper, zinc, and spodumene DSO price leverage demonstrate an inflection in FCF and rapid earnings growth.

Netwealth Group Ltd (ASX: NWL)

Netwealth shares have also attracted a buy recommendation from Bell Potter this week. 

Its share price jumped 6% yesterday on a key announcement, and the broker expects this rise can continue after a tough start to 2026. 

In yesterday’s report, Bell Potter said the company has announced an agreement with Morgan Stanley Wealth, seen as a multiyear outcome, and flagged further (smaller) wins to come from the segment. 

We expect this will unravel over the next year or so, comments suggesting there are maybe two more wins on the cards. NWL has an existing relationship with the firm, and this this extends the integration. The deal will add flexible execution and build in sponsored ASX listed and domestic investments.

Bell Potter has retained its $30 price target on Netwealth shares, which indicates a 23% upside from current levels. 

The post Broker tips 20% and 23% upside for these 2 ASX stocks appeared first on The Motley Fool Australia.

More reading

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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 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.

Looking for investment ideas in July?

Well, listed below are seven ASX 200 shares that brokers currently rate as buys.

Life360 Inc (ASX: 360)

Citi remains positive on Life360 and has retained its buy rating on the location-sharing technology company.

The broker has also lifted its price target to $31.95 from $28.25, which compares with the latest share price of $27.01.

Citi expects growth to accelerate as the year progresses, suggesting there could be more upside if Life360 continues converting its large user base into stronger revenue and earnings.

The broker’s price target implies potential upside of around 18%.

Domino’s Pizza Enterprises Ltd (ASX: DMP)

Ord Minnett has retained its buy rating on Domino’s Pizza Enterprises, although it has trimmed its price target to $21.00 from $22.00.

Even after the reduction, the broker still sees potential upside of approximately 29%. This suggests Ord Minnett believes the market may be too negative on the pizza chain’s recovery prospects.

Flight Centre Travel Group Ltd (ASX: FLT)

UBS remains positive on Flight Centre Travel Group.

The broker has retained its buy rating and $14.70 price target on the travel company’s shares, which are currently trading at $12.60.

That suggests potential upside of around 17%.

UBS is also forecasting a dividend of 43 cents per share in FY 2027, which represents a dividend yield of 3.4%.

Genesis Minerals Ltd (ASX: GMD)

Bell Potter has retained its buy rating on Genesis Minerals shares following the announcement of plans to merge with fellow gold miner Vault Minerals Ltd (ASX: VAU).

The broker has trimmed its price target slightly to $9.75 from $9.90.

That still sits well above the latest Genesis share price of $5.78, implying potential upside of close to 70%.

Goodman Group (ASX: GMG)

Citi continues to back Goodman Group.

The broker has retained its buy rating and $40.00 price target on the industrial property giant’s shares.

With Goodman shares trading at $30.68, that points to potential upside of around 30%.

Citi expects the company to upgrade its earnings per share growth guidance ahead of its results in August.

Lynas Rare Earths Ltd (ASX: LYC)

Macquarie has retained its outperform rating and $22.00 price target on Lynas Rare Earths.

This follows the rare earths company’s announcement of a long-term partnership with JS Link to develop a 3ktpa NdFeB permanent magnet facility in Malaysia.

Based on the latest share price of $16.91, Macquarie’s price target implies potential upside of around 30%.

REA Group Ltd (ASX: REA)

Finally, Morgans remains positive on REA Group and has retained its buy rating on the property listings company.

And while it has reduced its price target to $199 from $219, this still implies potential upside of approximately 35% from where its shares currently trade..

Morgans believes management has levers it can pull to help offset softer listing volumes.

The post 7 ASX 200 shares given buy ratings this week appeared first on The Motley Fool Australia.

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Citigroup is an advertising partner of Motley Fool Money. Motley Fool contributor James Mickleboro has positions in Domino’s Pizza Enterprises, Goodman Group, Life360, and REA Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Domino’s Pizza Enterprises, Goodman Group, Life360, and Macquarie Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Lynas Rare Earths Ltd. The Motley Fool Australia has positions in and has recommended Life360. The Motley Fool Australia has recommended Domino’s Pizza Enterprises, Flight Centre Travel Group, Goodman Group, and Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The team at Bell Potter have just released updated guidance for Amplitude Energy Ltd (ASX: AEL) shares. 

It has been a tough year for Amplitude Energy shares ,which have crashed over 50% year to date. 

For comparison, the S&P/ASX 200 Energy Index (ASX: XEJ) is up 10% in the same period.

However, despite the struggling performances thus far, Bell Potter sees big upside over the next 12 months. 

Here’s what the broker had to say. 

Quarter impacted by seasonality and sentiment

Bell Potter expects Amplitude Energy’s June 2026 quarter to be softer, with production broadly flat but lower realised gas prices due to mild seasonal demand, stronger supply from Longford, and weaker sentiment across the energy sector. 

Despite this, the broker believes the company remains on track to meet FY26 guidance and expects market conditions to improve. 

Bell Potter is increasingly positive on the East Coast Supply Project, noting it has been substantially de-risked following the Artisan acquisition, with a positive Final Investment Decision anticipated this quarter. 

Supported by a solid balance sheet and existing assets generating around $150 million in annual free cash flow, Bell Potter believes Amplitude Energy is well positioned to fund the project’s remaining development toward first production in 2028.

AEL is a pure-play leverage to the southern east coast Australia gas market with the majority of its gas sales under stable contracted prices. The company’s flagship 100%-owned Gippsland Basin asset is now consistently operating near nameplate capacity (68TJ/day); debottlenecking could see incremental improvements.

Big upside in tact 

Based on this guidance, the team at Bell Potter has slightly lowered its price target to $2.50 (previously $2.90). 

However from yesterday’s closing price of approximately $1.295, this indicates an upside potential of 93%. 

It has retained its buy recommendation. 

AEL is in a strong position to meet FY26 guidance despite the weaker June 2026 quarter and we expect energy markets and sentiment to normalise. 

The East Coast Supply Project has been de-risked through the Artisan acquisition, and we expect a positive Final Investment Decision in the current quarter.

Encouragingly, Bell Potter isn’t the only expert tipping a big rebound for Amplitude Energy shares. 

Morgans recently said there had been some sizable, albeit short-term catalysts, that recently pushed the share price lower. 

However, the broker now sees it as a rebound candidate. 

Morgans has a buy rating on Amplitude shares with a price target of $3. 

This indicates 130% upside from current levels. 

The post Amplitude Energy shares could be set to soar 90%: Expert appeared first on The Motley Fool Australia.

More reading

• Broker tips 20% and 23% upside for these 2 ASX stocks
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• Are these oversold ASX shares too good to pass up?
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• This ASX gas company could more than double in value: Broker

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.

Retirees may be on the hunt for ASX dividend shares that can provide a solid base of passive income. I think Rural Funds Group (ASX: RFF) is one of the top options in retirement.

Rural Funds is a real estate investment trust (REIT) that owns farmland across Australia, in different states and climate conditions. It also has a large holding of water entitlements for its tenants to use.

For a few different reasons, I think the business fits what retiree investors may be looking for.

Stable payout

Retirees may be looking for businesses that can provide resilient payouts through all economic conditions. If I’m relying on investment income, I want to know it can continue flowing even if there’s a downturn.

Of course, there is no absolute guarantee that every business will pay dividends.

Rural Funds has a number of high-quality tenants that are either high-quality international, listed or national entities. That helps ensure it continues to generate good rental profits.

Additionally, the ASX dividend share has a weighted average lease expiry (WALE) of more than a decade, giving investors significant income security and visibility with how long tenants are signed up.

The business increased its distribution each year between 2014 to 2022 and has maintained it since then despite the headwinds of higher interest rates. While I’d prefer growth, it’s still a good sign that the payout hasn’t been reduced despite the higher interest costs.

Plus, Rural Funds’ rental contracts have indexation built into the leases, giving the business organic rental growth potential and a tailwind to increase its payout for retirees (and other investors) in the future.

Good dividend yield

The business has regularly paid an annual distribution per unit of 11.73 cents over the last few financial years, and I wouldn’t be surprised if the ASX dividend share pays the same passive income again in FY27.

If Rural Funds does pay that level of distribution again in the 2027 financial year, it would translate into a distribution yield of 5.8%. In my view, that’s extremely competitive with any term deposit rate out there that’s available to Australians right now.

Compelling farm ownership at a discount

I like the diversification that Rural Funds can provide for retiree investors, with a focus on residential property, banks, and miners. Farmland is an integral part of the Australian economy, and this investment gives us exposure to cattle, vineyards, almonds, macadamias and cropping.

I believe the business is significantly undervalued based on its adjusted net asset value (NAV). It’s ‘adjusted’ to include the market value of the water entitlements.

At 31 December 2025, it had an adjusted NAV of $3.10. That means it’s trading at a discount of 35%, at the time of writing. There are very few REITs or ASX dividend shares that are trading as cheaply as that.

I think it’s a great business to pick up right now, though it’s not the only ASX dividend share I’d buy today.

The post Why this ASX dividend share is a retiree’s dream for FY27 appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Rural Funds Group. 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 Rural Funds Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The ASX blue-chip share space is a great place to look for ideas that can deliver strong passive income with good dividend yields.

Mature Australian businesses have usually built a strong reputation for generating profit, they have a big accounting profit reserve and a history of paying resilient dividends to investors.

When I look at ASX shares with market capitalisations of more than $6 billion, the two businesses below are ones that stick out as good providers of passive income.

Argo Investments Ltd (ASX: ARG)

Argo is a listed investment company (LIC) that provides investors with exposure to a portfolio of ASX blue-chip shares. LICs can give Aussies both diversification and a good dividend yield.

The biggest positions in the portfolio includes BHP Group Ltd (ASX: BHP), Macquarie Group Ltd (ASX: MQG), Rio Tinto Ltd (ASX: RIO), Commonwealth Bank of Australia (ASX: CBA), Wesfarmers Ltd (ASX: WES), Westpac Banking Corp (ASX: WBC), ANZ Group Holdings Ltd (ASX: ANZ) and Telstra Group Ltd (ASX: TLS).

As you can see, Argo gives investors a significant level of allocation to ASX blue-chip shares.

It has a pleasingly low cost, with a management expense ratio of just 0.14%, which is one of the cheapest in the LIC sector. Plenty of exchange-traded funds (ETFs) have a higher cost than that.

Since the GFC, the ASX blue-chip share has reduced the annual dividend a couple of times. In most other years, the annual dividend has been hiked. Its current grossed-up dividend yield is 6%, including franking credits.

It’s currently trading at a mid-teen double-digit discount to its net tangible assets (NTA).

Coles Group Ltd (ASX: COL)

Coles is another quality ASX blue-chip share Aussies can buy.

As Australia’s second-largest supermarket business, it has a strong market position to continue generating a pleasing level of passive income for shareholders.

Coles has increased its annual dividend each year since 2019, which is a pleasing level of dividend consistency compared to many other large businesses. The steady growth of revenue and net profit has allowed the business to be a consistent dividend provider for investors.

At the time of writing, Coles’ last two half-year dividends come to 73 cents per share. That’s a grossed-up dividend yield of 4.5%, including franking credits.

The business is steadily building its market position thanks to an expanding store network, rising e-commerce sales and improving profit margins.

In my view, Coles has a promising long-term future – it’s a very important business for the Australian economy and could expand into pet retail and vets if the possible Greencross transaction goes ahead.

Overall, there’s a lot to like about these ASX blue-chip shares, though they’re not the only great businesses to consider.

The post 2 ASX blue-chip shares offering big dividend yields appeared first on The Motley Fool Australia.

More reading

• How much passive income can I earn off a $100,000 portfolio?
• Coles shares dive on ACCC competition blow
• These ASX shares could generate $5,000 per year in passive income
• Should I invest $10,000 in Coles shares?
• Where should I invest inside SMSFs instead of property?

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 Macquarie Group and Wesfarmers. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended BHP Group, Macquarie Group, and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.