Author: openjargon

Superannuation is a great tool to help Australians build wealth and financial security for their retirement years. 

But it’s very easy to make the wrong decisions. 

Even small mistakes can end up costing you a fortune, and a lot of regret, down the line. 

And some of them could compound over time too.

Here are three superannuation decisions which you’ll regret making when you reach retirement.

1. Leaving your super in the wrong investment option or an underperforming fund

Default superannuation investment options are generally designed to benefit a range of investors, from those starting their first job to those nearing retirement. 

But the problem is that what is considered an appropriate risk for one person doesn’t apply to the next. And, by putting (or leaving) your money into the wrong type of fund, it can quickly chip away at your balance. 

By being too conservative too early you’ll lose out on the potential for more growth. Younger Australians, with time to ride out any market fluctuations would benefit from growth assets, such as good momentum stocks like Droneshield Ltd (ASX: DRO) or Electro Optic Systems Holdings Ltd (ASX: EOS).

But for those closer to retirement, it makes sense to be more conservative. This pool of Australians  might be more suited to stable assets that can weather a share market crash. Dividend-paying shares, such as ANZ Group (ASX: ANZ) and Wesfarmers Ltd (ASX: WES), are also a great option for retirees who want to benefit from additional passive income.

Even worse than the wrong investment option, is leaving your superannuation in an underperforming fund.

The difference between an average superannuation fund and a top-performing one can be the difference between scraping by in retirement and living comfortably.

2. Not taking advantage of concessional contributions before retirement

Relying only on employer contributions is unlikely to be enough for a comfortable retirement. 

Even a small additional contribution can make a big difference when it comes to retirement. 

After all, the power of compounding returns means that the more money you can invest when you’re younger, the more impact it will have on your final balance.

Failing to take advantage of concessional contributions before retirement could cost you dearly when the time comes and you don’t have enough money to live off comfortably. 

Take advantage of additional concessional or non-concessional contributions, whether this is salary sacrificing or after-tax payments (within your annual limits) while you can.

If you don’t have the funds to add more money yourself, you can also look into government initiatives. There’s the downsizer contributions rule, the bring-forward rule, the government co-contribution rule, and many others. 

These can help boost your balance just a little bit further while you still can.

3. Withdrawing too much superannuation, or too early

Many retirees treat their super balance like a large savings account once they reach preservation age. They withdraw too much cash or too early because they want immediate income.

Whether the funds are used for renovations, a holiday, to help family or to more entirely to cash after retirement, drawing far more than the minimum requirement can leave you short further down the road. 

Accessing your superannuation too aggressively, or even relying too heavily on the Age Pension without preserving investment growth, means you could easily outlive your savings. 

Inflation can quietly make the situation worse too as retirees sometimes find that their remaining superannuation is no longer enough to fund their retirement.

Ideally you want to draw up a plan of how many retirement years you expect to have, and how much you expect to spend during that timeframe. Then withdraw money from your superannuation only when you need it and let the rest continue to grow. 

The post 3 superannuation decisions you’ll regret in retirement appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies 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 DroneShield, Electro Optic Systems, and Wesfarmers. The Motley Fool Australia has recommended Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Xero Ltd (ASX: XRO) share price is in focus today after reporting its FY26 result, with revenue up 31% to $2.8 billion and adjusted EBITDA growing 18% to $757.4 million.

What did Xero report?

• Operating revenue of $2.75 billion, up 31% on FY25
• Adjusted EBITDA of $757.4 million, up 18%
• Net profit after tax of $167.4 million, down 27% due to Melio acquisition costs
• Free cash flow of $554.0 million, up 9%
• Net customers grew by 506,000, reaching a total of 4.92 million globally
• Annualised monthly recurring revenue (AMRR) lifted 37% to $3.27 billion

What else do investors need to know?

Xero’s international segment delivered strong revenue growth, with the US standing out—core revenue jumped 240%, boosted by the integration of Melio, a US bill pay platform acquired during the period. The business added 110,000 US customers, and ARPC (average revenue per customer) rose 23% to $55.44 across the group.

AI remains a key strategic focus. Xero extended its partnership with Anthropic to integrate Claude’s AI, ramped up GenAI-powered features like Just Ask Xero and smart document capture, and launched XeroForce, a natural language AI agent builder currently in early testing.

To offset staff share-based compensation dilution, the board authorised a $550 million share buyback for FY27.

What did Xero management say?

CEO Sukhinder Singh Cassidy said:

Our strong full year results demonstrate Xero’s disciplined execution and macro-resilience. Our 3×3 strategy is hitting its stride, demonstrated by accelerating US growth with 110,000 new customers, including new Melio direct payments customers, and pro-forma revenue growth of 50%. We have powerful momentum across our markets, and delivered strong EBITDA growth while absorbing Melio. This has moved us beyond single-job workflows in the US by integrating Melio to unite accounting and payments on one platform. Globally, we are providing a small business financial operating system for the AI era, driving value for customers while deepening our technology foundations, compliance capability and data advantages, and driving stronger unit economics.

What’s next for Xero?

Looking to FY27, Xero expects operating revenue between $3.62 billion and $3.73 billion and adjusted EBITDA of $860 million to $920 million, including extra brand investment in the US market. The business plans to roll out its Ultra plan for larger businesses, expand AI-powered product features, and build on its strategy to unify accounting, payroll, and payments.

Longer term, Xero is aiming to double group revenue by FY28 (compared to FY25) and achieve Rule of 40 outcomes, driven by ongoing US momentum and wider adoption of its financial operating system.

Xero share price snapshot

Over the past year, the Xero shares have declined 53%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 4% over the same period.

View Original Announcement

The post Xero FY26 result: Revenue surges 31% but profit dips due to Melio acquisition costs 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 Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial 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.

The ASX dividend share WAM Microcap Ltd (ASX: WMI) is a leading listed investment company (LIC) that I think is one of the leading options for a high level of passive income.

WAM Microcap is certainly not as high profile as names like Commonwealth Bank of Australia (ASX: CBA) and BHP Group Ltd (ASX: BHP), but I think it could better for dividend income in the years ahead.

The job of a LIC is to invest in other shares/assets that the investment team believes can deliver pleasing returns. WAM Microcap specifically aims to invest in the most exciting undervalued growth opportunities in the Australian microcap market.

Let’s look at three reasons why I think this ASX dividend share is a good, long-term buy.

Good performance

With LICs, I think it’s important to look at the capability of that LIC to deliver good returns. Only good ones are worth investing in.

A LIC pays for its dividends from the net investment returns that it generates. For a dividend to be sustainable, a LIC needs to generate strong enough returns to pay those payments (and hopefully more for capital growth).

I believe the WAM Microcap investment team are very skilled at finding investment opportunities at the small-cap end of the market to help outperform the broader ASX share market.

In its April 2026 update, WAM Microcap said that its portfolio had generated an average return per year of 14.2% since inception in June 2017, twice as good as the small-cap market return.

This great performance over the long-term has allowed WAM Microcap to grow its profit reserve to 55.4 cents per share.

Great dividend yield

One of the main reasons why the business is a compelling passive income idea is that it pays a very large dividend yield.

The ASX dividend share expects to pay an annual dividend per share of 10.7 cents in FY26.

That means, at the timing of writing and the current WAM Microcap share price, it offers a FY26 grossed-up dividend yield of around 9.5%, including franking credits.

There are not many ASX dividend shares with a dividend yield that high that I expect can continue growing the payout.

Track record of payout growth

The LIC has grown its annual dividend almost every year since FY18, with the only year it didn’t grow the payout being FY24.

It started paying a dividend in FY18 and then increased its payout in FY19, FY20, FY21, FY22, FY23, FY25 and FY26.

If I invest in an ASX dividend share, I want to have a high level of confidence the business is likely to increase the payout again in the following financial year. With the large profit reserve, I think WAM Microcap is capable of ongoing dividend growth.

Even a slight increase each year is very welcome to help offset inflation impacts.

But, WAM Microcap isn’t the only ASX share I’d consider for long-term passive income.

The post Why I think this ASX dividend share with a 9.5% dividend yield is a buy appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Wam Microcap. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If you are hunting for some big returns, EBR Systems Inc (ASX: EBR) shares could be worth considering.

That’s the view of analysts at Bell Potter, who believe this ASX biotech stock could rocket from current levels.

What is this ASX biotech stock?

EBR Systems is a clinical-stage company that has developed a patented Wireless Stimulation Endocardially (WiSE) technology.

This is for the treatment of cardiac rhythm disease and to eliminate the need for cardiac pacing leads when delivering cardiac resynchronisation therapy.

Bell Potter was pleased with the company’s performance in the first quarter. And while its cash burn increased, it notes that this relates to large one-off items, so isn’t concerned. It said:

The headline data had been pre-released which showed that sales doubled qoq, while unit volumes, ASP, hospital contracts signed and physicians trained, all heading in the right direction. All hospital contracts are continuing to be priced at the maximum rate of c.US$63k. Reported gross margins were at a relatively low c.7.8% given the early commercialisation phase, use of old inventory and use of the old manufacturing facility. If current inventory prices were used, the gross margin would have been c.- 25.4%. EBR expect to be in the new facility by the end of 3Q26, from which time gross margins should begin to increase through the combination of new automated machinery to drive efficiency in manufacturing, and scale.

The Adj. EBITDA loss of c.- US$15.1m v c.-US$9.2m pcp reflects the scale up of commercial operations. Operating Cash Outflow of c.-US$20.2m reflected one-off items including bonuses, payroll tax, demo and design units, as well as front loading of leasehold improvements (c.US$2.6m), which will be reimbursed by the landlord in the June quarter. Even allowing for the one-off items, EBR is still hovering at around two quarters of cash / cash equivalents remaining.

Big potential returns

According to the note, in response to the update, Bell Potter has retained its buy rating and $2.00 price target on the ASX biotech stock.

Based on its current share price of 57.5 cents, this implies potential upside of approximately 250% over the next 12 months.

Bell Potter believes it is just its funding question that is holding back its shares. Once resolved, the broker believes its shares could rally. It explains:

No change to earnings / valuation. Given the expectation of a further c.US$15m in revenue over the balance of CY26, we expect 1Q26 to be the peak in operating losses. Once the funding question is resolved, which has been impeding investor sentiment, we would expect the share price to rally.

The post Broker says this ASX biotech stock could rocket 250% appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Aristocrat Leisure Ltd (ASX: ALL) shares were in fine form on Wednesday.

The gaming technology company’s shares ended the day 13% higher at $51.94 after investors responded positively to its half-year results.

Is it too late to invest? Let’s see what Bell Potter is saying about the ASX 200 stock.

A strong result

Bell Potter was pleased with its performance. Although Aristocrat’s revenue was a touch softer than expected, its profits were ahead of estimates thanks to lower than anticipated corporate costs. It said:

ALL reported flat revenue growth (+6% constant currency (CC)) to $3,028m below BPe of $3,040m and consensus of $3,056m, driven by +5% YoY growth (+12% CC) in Gaming (BPe +4% growth), a -11% YoY decline (-4% CC) in Product Madness (BPe -10%) and a -1% YoY decline (-9% CC) in Interactive (BPe – 14%). EBIT(A) was A$1,117m, up +6% YoY (+14% CC). Normalised NPATA of $794m was up +8% YoY (+1% beat vs. BPe). The gaming ops install base grew by 2.0k units to 77.2k, slightly ahead of BPe and consensus with the Premium growing by a pleasing +2.3k.

The beat to consensus was driven by a $33m better than expected Corporate costs print which masked a weaker than expected result in Product Madness with the broader social slots market declining 11% YoY. Fee per day (FPD) of $53.1/d was down HoH and 1% below BPe, however, the outlook for this metric appears optimistic with earnings call commentary suggesting upward pressure due to higher performing games entering the install base.

The broker was also pleased with the company’s outlook commentary. It adds:

ALL reiterated most outlook comments including NPATA grow over FY26e on a constant currency basis. ALL expects to deliver Gaming ops net adds towards the upper end of its 4-5k target and did not rule out growth higher than this range.

Aristocrat shares tipped to rise further

According to the note, Bell Potter has retained its buy rating and $61.00 price target on Aristocrat shares.

Based on its current share price of $51.94, this implies potential upside of more than 17% for investors over the next 12 months.

Commenting on its buy recommendation, the broker said:

We retain Buy. We expect ALL’s leading R&D investment will drive market share gains. Top 2 game performance observed in both the core sales and premium gaming ops markets leaves us confident that ALL can grow the install base >4.0k per year and grow global shipments. Further, with leverage expected to reach 0.4x despite significant buybacks, ALL has substantial capacity to boost growth inorganically.

The post Up 13%: Why this ASX 200 stock is a buy with even more upside appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

S&P/ASX 200 Index (ASX: XJO) shares closed 0.46% lower on Wednesday at 8,630.4 points.

Within the 11 market sectors, consumer discretionary shares rose the most, up 2.9% yesterday.

Materials shares also had a strong day after BHP Group Ltd (ASX: BHP) set a new record and resumed the top spot on the ASX 200.

ASX 200 materials shares rose 2%, and BHP shares finished 2.9% higher at $61.52 after resetting their historical high at $62.30.

The financial sector was the laggard, dropping 4%, largely due to Commonwealth Bank of Australia (ASX: CBA) shares diving 10.4%.

Amid this volatility, brokers have indicated continuing confidence in several ASX 200 shares this week.

Let’s take a look at which stocks have attracted reiterated buy ratings.

Insurance Australia Group Ltd (ASX: IAG)

The IAG share price closed at $7.60, up 1.9% on Wednesday.

Over the past month, this ASX 200 insurance share has risen 4.8%.

UBS renewed its buy rating on IAG shares on Wednesday.

The broker raised its 12-month price target from $8.55 to $8.80.

The target suggests a possible 16% capital gain ahead. 

National Australia Bank Ltd (ASX: NAB)

The NAB share price finished at $36.86, down 1.5% yesterday.

Over the past month, this ASX 200 bank share has fallen 18%.

UBS renewed its buy rating on NAB shares with a $48.50 target this week.

This implies 31% potential growth ahead. 

CSL Ltd (ASX: CSL)

The CSL share price closed at $98.79, up 0.2% on Wednesday.

This ASX 200 healthcare giant has fallen 28% in a month and 59% over 12 months.

Morgans renewed its buy rating on CSL shares this week.

However, the broker slashed its price target from $241.34 to $147.59.

This still suggests very healthy upside of 49% over the next year.

ANZ Group Holdings Ltd (ASX: ANZ)

The ANZ share price closed the session yesterday at $34.57, down 1.6%.

Over the past month, this ASX 200 bank share has fallen 11%.

Citi renewed its buy rating on ANZ shares on Tuesday.

The broker trimmed its 12-month price target from $40.30 to $40.

The target suggests a possible 16% capital gain ahead. 

Pro Medicus Ltd (ASX: PME)

The Pro Medicus share price closed at $125.50, down 0.3% on Wednesday.

This ASX 200 healthcare share has fallen 53% over the past 12 months.

The Pro Medicus share price has been in correction mode after hitting a historical peak of $336 in July 2025.

Canaccord Genuity renewed its buy rating on Pro Medicus shares this week.

The broker lowered its target from $180.82 to $168.62, suggesting a possible 34% upside ahead. 

Aristocrat Leisure Ltd (ASX: ALL)

The Aristocrat share price closed the session yesterday at $51.94, up 13.3%.

This ASX 200 consumer discretionary share has tumbled 12.9% over six months.

Citi renewed its buy rating on Aristocrat shares with a 12-month target of $65 on Wednesday.

This implies a potential 25% upside ahead.

Temple & Webster Ltd (ASX: TPW)

The Temple & Webster share price closed at $4.98, down 6.4% on Wednesday.

The ASX 200 retail share has fallen 29% in a month and hit a 3-year low of $4.54 yesterday.

Macquarie renewed its buy rating on Temple & Webster shares with a $13.70 target this week.

This implies a potential 173% upside ahead.

Nick Scali Ltd (ASX: NCK)

The Nick Scali share price closed the session yesterday at $14.08, down 2.5%.

Over the past month, this ASX 200 furniture retailer has lost 11% of its valuation.

Macquarie renewed its buy rating on Nick Scali shares with a $21.60 target this week.

This indicates a potential 54% upside ahead.

Metcash Ltd (ASX: MTS)

The Metcash share price closed at $2.97, down 1% on Wednesday.

Over the past six months, this ASX 200 supermarket share has fallen 23%.

UBS renewed its buy rating on Metcash shares with a $3.50 target this week.

This indicates a potential 18% upside ahead.

The post 9 ASX 200 shares with renewed buy calls from the experts 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 Bronwyn Allen has positions in BHP Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, Macquarie Group, and Temple & Webster Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Pro Medicus. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended BHP Group, CSL, Nick Scali, Pro Medicus, and Temple & Webster Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Air New Zealand Ltd (ASX: AIZ) shares are in focus today after the airline warned that surging jet fuel prices have created a material external shock for the global aviation industry.

The airline released a market update on Thursday morning, cutting its FY 2026 outlook and outlining a range of actions to protect earnings and preserve liquidity.

While this is an Air New Zealand update, it could have implications for Qantas Airways Ltd (ASX: QAN) shares.

What did Air New Zealand say?

Air New Zealand advised that elevated and volatile global jet fuel prices have had a significant impact on its FY 2026 outlook.

The airline said jet fuel prices were around US$85 to US$90 per barrel before the escalation of conflict in the Middle East. Since then, they have traded between approximately US$160 and US$230 per barrel over the past 10 weeks.

This has created a major cost headwind. Air New Zealand now expects its second-half FY 2026 fuel cost to be approximately NZ$980 million, compared with the NZ$740 million assumption used at its interim result. That implies a NZ$240 million headwind to its expected FY 2026 result, including hedging.

The company said it is around 85% hedged against its second-half FY 2026 Brent crude exposure, but remains exposed to the crack spread, which is the difference between crude oil and refined jet fuel prices. That spread has also been highly volatile.

Capacity, fares, and demand

Air New Zealand has already responded by reducing capacity.

It said it has made three targeted capacity consolidations, cutting overall group capacity by around 3% to 5% across its networks since the conflict began. If fuel prices remain elevated, further capacity updates could be announced in coming weeks.

The airline has also increased fares across its network. However, it noted that fuel cost recovery will take time because earlier bookings need to be flown before newer, higher-priced bookings flow through.

Demand has also started to soften. Booking momentum has moderated in recent weeks, with domestic and trans-Tasman demand weakening. Outbound demand to some long-haul markets has also softened, while Asia inbound and cargo have been more resilient.

The overall impact has been significant. Air New Zealand now expects an FY 2026 loss before tax of between NZ$340 million and NZ$390 million. This assumes an average jet fuel price of approximately US$145 per barrel for the second half.

What does this mean for Qantas shares?

The read-through for Qantas shares is not hard to see.

Fuel is one of the biggest costs for any airline. If jet fuel prices and refining margins remain elevated, Qantas is likely to face the same broad industry pressure as Air New Zealand.

That does not mean Qantas will be hit in exactly the same way. Its route network, hedging position, fare structure, loyalty business, balance sheet, and domestic market position are different. Qantas also has a larger and more diversified business, which could help cushion some of the impact.

But Air New Zealand’s update highlights three risks investors may now be watching closely.

The first is margin pressure. Higher fuel costs can quickly eat into airline earnings if they are not fully recovered through fares.

The second is demand. Air New Zealand’s warning that fare increases need to be managed carefully is relevant for Qantas as well. Push fares too hard, and some passengers may delay or cancel travel.

The third is capacity. If airlines reduce seats to protect profitability, it can support pricing, but it can also limit revenue growth.

For Qantas shareholders, this update is a reminder that airline earnings can change quickly when fuel prices move sharply.

The post Air NZ warns of ‘fuel shock’, what this means for Qantas shares appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX stocks can be a great source of investment returns to grow our wealth. Some investments could be a great choice for capital growth, while others are compelling for passive income.

There’s only so much we can earn from our day job. After that, other forms of income are needed to boost the amount of money coming through the door.

When I think about which investment asset classes don’t take much of our time as the portfolio grows in size, and can provide good passive income, I believe ASX stocks are the best option.

Great passive income

Online share brokerage has made it incredibly easy to invest in ASX-listed investments.

Once someone has invested in an ASX share, they don’t need to do anything to run it or make decisions about whether to fix something or pay for a new item. The company’s management does that for shareholders. We can just let the investment do its thing.

Assuming we’ve chosen an investment that pays passive income, the dividends will roll into the bank account with zero effort on our part.

Another great positive to ASX stocks for passive income is the dividend yields on offer.

Term deposits are offering a (temporary?) high interest rate right now, but there’s no organic growth. Certain ASX dividend stocks can provide a better dividend yield than a term deposit rate and/or very good dividend growth.

A river of dividends

If creating passive income is the goal, I’d suggest investing in businesses that have a track record of growing the payout for investors, while also having a pleasing dividend yield to start with. As time goes by, the river flow of payments will become stronger.

That’s why I’m attracted to names like Washington H. Soul Pattinson and Co Ltd (ASX: SOL), L1 Long Short Fund Ltd (ASX: LSF), Wesfarmers Ltd (ASX: WES), Telstra Group Ltd (ASX: TLS), Future Generation Australia Ltd (ASX: FGX), Future Generation Global Ltd (ASX: FGG) and Hearts and Minds Investments Ltd (ASX: HM1).

If someone invests $1,000 in an ASX dividend stock, such as L1 Long Short Fund, with a grossed-up 5% dividend yield (including franking credits), it would unlock $50 of annual income.

Imagine it then hikes the dividend by 10% in the following year. That’s $55 of annual passive income.

Then another 10% increase would make it $60.50 of income.

And so on.

No dividend growth is guaranteed of course, but some businesses are more likely to deliver good dividend growth than others.

Imagine investing $1,000 multiple times. That would create hundreds of dollars of income that an Australian could use to boost their financial picture.

I know this is an effective method because I’m already utilising it and benefiting from it.

My household is getting the benefit of annual dividends that can now, after plenty of years of saving and investing, be measured in thousands rather than hundreds of dollars. Plus, they’re delivering a pleasing mixture of long-term dividend growth and capital growth – exactly what I’m after!

The post Create a river of dividends for passive income alongside work earnings with ASX stocks appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Future Generation Australia, Future Generation Global, Hearts And Minds Investments, L1 Long Short Fund, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited and Wesfarmers. The Motley Fool Australia has positions in and has recommended Telstra Group and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Sleep health giant Resmed Inc (ASX: RMD) rarely makes headlines, but the numbers it keeps delivering are hard to ignore.

Investors love companies that never seem to be the most exciting in the room, yet year after year they keep getting bigger, more profitable, and more entrenched in their markets.

Resmed is one of those companies.

A business built on a massive, underserved market

Sleep apnea affects an estimated one billion people worldwide, yet the vast majority remain undiagnosed.

Resmed sits at the centre of the global effort to change that, manufacturing CPAP devices, masks, and cloud-connected software platforms that help patients manage their condition from home.

The company holds a dominant position in a market with extraordinarily high switching costs: once a patient finds a device and mask combination that works, they rarely change.

This generates a reliable and recurring revenue stream for years, providing a significant competitive advantage.

The numbers back up the story

Resmed delivered another strong quarterly update in early 2026, with revenue growing 11% year-on-year to US$1.29 billion. Operating income also increased 22%.

Device sales continue to accelerate as competitor Philips works through ongoing product recall issues.

Resmed will be looking to take advantage of this situation to further entrench its market position.

The company’s software and services segment, which includes its cloud-connected patient management platforms, now generates over US$200 million per quarter and continues to grow at a double-digit rate.

Resmed carries a strong balance sheet with modest debt and generates consistent free cash flow, which it returns to shareholders through a growing dividend.

The AI angle the market is underappreciating

One of the most compelling aspects of the Resmed story is the role artificial intelligence now plays across its platform.

The company processes over 23 billion nights of sleep data, giving it a proprietary data moat that competitors cannot replicate.

Resmed uses this data to improve patient adherence, reduce hospital readmissions, and identify patients at risk of deterioration before they reach the emergency department.

This positions Resmed not only as a device manufacturer, but as a healthcare technology platform, and the market has not yet fully priced in that distinction.

Foolish Takeaway

So why are Resmed shares lagging?

The latest earnings came in as softer than expected, reflecting high expectations baked into the share price.

Investors also worry about the acquisition costs related to the VirtuOx acqusition.

But investors may also see Resmed as a business that is growing revenue and earnings at a steady double-digit pace while deepening its competitive moat.

For Fools who value compounding returns over excitement, Resmed deserves serious consideration.

The post Why are Resmed shares lagging if the business keeps compounding? appeared first on The Motley Fool Australia.

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• Top brokers name 3 ASX shares to buy next week
• Money to invest? I’d follow Warren Buffett to get rich
• 3 of the best Aussie ASX growth shares to buy and hold until 2036

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

Some ASX healthcare shares are going through a brutal period as competition, weaker demand and broader market pressures hammer investor confidence.

CSL Ltd (ASX: CSL) has dominated headlines recently for all the wrong reasons, but other ASX healthcare shares are also suffering heavy losses.

Shares in Cochlear Ltd (ASX: COH) are down roughly 63% over the past 12 months, while Telix Pharmaceuticals Ltd (ASX: TLX) has fallen around 44%.

So, have these ASX healthcare shares become too cheap to ignore?

Cochlear

Cochlear’s collapse accelerated after a disappointing trading update released on 22 April.

The ASX healthcare share plunged from around $168 to near $90 within days. That’s an extraordinary 46% wipeout for a blue-chip healthcare company.

Although the share price has since stabilised somewhat, the damage remains severe. The company, which controls roughly 50% of the global cochlear implant market, sharply downgraded FY26 underlying net profit guidance to between $290 million and $330 million. That was a major cut from its previous guidance range of $435 million to $460 million.

Management blamed weaker hearing implant demand across developed markets, slower referrals, postponed surgeries and disruptions in the Middle East that caused cancelled orders and delivery delays.

For a company long viewed as one of the ASX’s most reliable healthcare performers, the downgrade badly rattled investor confidence.

Still, the long-term investment case may not be broken. Cochlear remains the global leader in implantable hearing technology and continues reinvesting heavily into research and development, allocating around 13% of revenue toward innovation.

The company also benefits from ageing populations and a growing pool of patients with hearing loss worldwide. That suggests current weakness may prove more cyclical than structural.

Analyst opinion remains sharply divided. Jarden currently has a $169 price target on the ASX healthcare share, implying upside of almost 70%.

However, Macquarie recently slashed its target from $239 to $115, while Morgans maintains a hold rating and a $107.17 target.

Telix Pharmaceuticals

Telix shares have also experienced wild volatility. The ASX healthcare stock is down around 8% over the past month, remains up roughly 30% year to date, but has still slumped approximately 43% over 12 months.

Unlike many biotech companies, Telix already generates commercial revenue. Its lead product, Illuccix, is producing growing sales in the US market and provides a genuine commercial foundation for the business.

Telix operates in the rapidly expanding radiopharmaceuticals sector, developing imaging and therapeutic products for cancer treatment.

The company also has a growing development pipeline targeting kidney cancer, brain cancer and other oncology opportunities.

That helps explain the extreme share price swings. Positive announcements often trigger sharp rallies, while broader biotech weakness or slower news flow can spark aggressive pullbacks.

Despite the volatility, analysts remain overwhelmingly bullish on the ASX healthcare share. According to TradingView data, all 16 brokers covering Telix shares currently rate the ASX healthcare stock as either a buy or strong buy.

The average price target sits at $24.22, implying roughly 65% upside from current levels. The most bullish analyst target stands near $31. That points to a potential upside of approximately 110% if Telix continues delivering operational growth.

The post Are these 2 battered ASX healthcare shares too cheap to ignore? appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy now
• Down 59%: Will CSL shares ever regain momentum?
• Is CSL now an ASX dividend stock to buy?
• Buy, hold, sell: CSL, Macquarie, and REA Group shares
• 2 big-name ASX 200 shares at 52-week lows that I’d buy and hold

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, Cochlear, and Telix Pharmaceuticals. The Motley Fool Australia has recommended CSL, Cochlear, and Telix Pharmaceuticals. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.