Author: openjargon

It has been a brutal period for ASX retail stocks.

Consumer confidence has slumped toward historic lows as higher interest rates and cost-of-living pressures squeeze household spending. Unsurprisingly, retail share prices have taken a heavy hit.

Shares in Temple & Webster Group Ltd (ASX: TPW) fell another 6% on Wednesday to $4.98 after briefly touching a fresh 52-week low of $4.54 earlier in the session. Meanwhile, Lovisa Holdings Ltd (ASX: LOV) dropped 1.3% for the day and continues hovering near yearly lows.

Zooming out, the damage looks even more severe. Temple & Webster shares are down around 64% year to date, while Lovisa has fallen approximately 27%.

So, are these ASX retail stocks becoming bargain buys?

Temple & Webster: runway for expansion

Investors aggressively sold Temple & Webster shares on Wednesday after the online furniture retailer released FY26 guidance that appears to have disappointed the market.

The company expects FY26 revenue between $665 million and $675 million, representing growth of roughly 11% to 12% compared to the prior corresponding period. EBITDA guidance sits between $20 million and $22 million, implying growth of around 6% to 17%.

While those figures still point to expansion, investors likely hoped for stronger earnings momentum given the company’s historical growth profile.

The broader retail environment also remains difficult. Consumer spending continues facing pressure from elevated interest rates, while housing activity has remained uneven across Australia. At the same time, investors have become far less willing to pay premium valuations for online retail growth businesses.

Still, Temple & Webster may retain a compelling long-term opportunity. Furniture, homewares and home improvement remain enormous retail categories, and the company still controls only a relatively small share of the overall market. That leaves significant runway for future expansion if spending continues shifting online over time.

Importantly, after collapsing roughly 82% from its all-time-high, a large amount of bad news may already be reflected in the share price.

For patient long-term investors, the ASX retail stock could become increasingly interesting at these lower levels.

Lovisa Holdings: global fast-fashion footprint

Lovisa tells a different but equally volatile retail story. The $2.5 billion ASX retail stock has built a global fast-fashion jewellery empire through rapid product turnover and quick responses to changing consumer trends. Its ability to adapt quickly has been one of the company’s greatest strengths.

But the bigger attraction remains international expansion. Lovisa has aggressively rolled out stores across Europe, the US and Asia, creating a substantial long-term growth runway if execution remains strong. That global footprint continues separating Lovisa from many smaller domestic retail competitors.

However, investors have become increasingly cautious. Cost inflation, weaker consumer spending and concerns around profit margins have all weighed heavily on sentiment. Retail businesses remain highly sensitive to economic conditions, and Lovisa is not immune to those pressures.

Still, if consumer confidence eventually improves and global store expansion continues delivering results, the recent weakness in Lovisa shares may start looking far more attractive in hindsight.

According to TradingView 8 out of 15 the analysts covering the ASX retail stock rate it a buy or strong buy. The average 12-month price target is set at roughly $30, which points to a 38% upside.

The post These ASX retail stocks are near 52-week lows, are they bargain buys? appeared first on The Motley Fool Australia.

More reading

• Why CBA, Healius, Paladin Energy, and Temple & Webster shares are sinking today
• Why did this ASX 300 stock just crash 15% to a 52-week low?
• Temple & Webster posts record April profit and FY26 upgrade
• How much is needed in superannuation to target a $5,000 monthly passive income?
• 2 amazing ASX shares I’d buy amid rising interest rates

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 Lovisa and Temple & Webster Group. The Motley Fool Australia has recommended Lovisa 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.

If you are seeking some new additions to an income portfolio, then it could be worth considering the ASX dividend stock in this article.

That’s because not only could it be destined to rise materially, but it is being tipped to provide investors with above-average dividend yields according to Bell Potter.

Which ASX dividend stock?

The stock that Bell Potter is bullish on is Universal Store Holdings Ltd (ASX: UNI).

It is the youth fashion retailer behind the eponymous Universal Store brand, as well as the Thrills and Perfect Stranger brands.

Bell Potter has been pleased with the company’s performance this year in a difficult economic environment. It said:

Universal Store Holdings (UNI) provided a trading update for the first 43 weeks of FY26: group retail sales of +14% on pcp broadly in line with BPe, like-for-like (LFL) sales on pcp of +8.5% and +12.9% for key banners, Universal Store (US) and Perfect Stranger (PS) respectively. The improved growth rate from the last update at UNI’s key banner, US (+8.1% at end of Apr vs +7.1% at mid-Feb) was supported by some benefit in comps in the pcp through Apr.

FY26 guidance of revenue at $368-375m (+11.5% at mid-point) and EBITA of $61.5-64.5m was provided, in line with Consensus implying gross margins remaining in line. FY26 new store openings were also tracking to the previous guidance of 11-17 across the three banners.

Major upside and big income

According to the note, the broker has a buy rating and $9.30 price target on the ASX dividend stock.

Based on its current share price of $6.46, this implies potential upside of 44% for investors over the next 12 months.

As for income, Bell Potter is forecasting fully franked dividends of 36.9 cents per share in FY 2026, 39.3 cents per share in FY 2027, and then 44.6 cents per share in FY 2028.

This equates to fully franked dividend yields of 5.7%, 6.1%, and 6.9%, respectively.

Commenting on its buy recommendation, Bell Potter said:

At 13x FY27e P/E (BPe), we see an entry opportunity to a high-quality retailer as we remain optimistic on UNI’s performance in 4Q26 given supportive comps and look forward to FY27e in delivering continued execution driven market share expansion across retail banners.

In line with selective consumption trends across the broader sector, we retain our views of the youth customer prioritising ontrend streetwear and expect UNI to benefit with their leading position. Maintain BUY.

The post Why this could be one of the best ASX dividend stocks to buy now appeared first on The Motley Fool Australia.

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• Bell Potter says this ASX dividend share offers a 5% yield and 30% upside
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• Want passive income? These ASX dividend shares offer 5%+ yields

Motley Fool contributor James Mickleboro has positions in Universal Store. 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.

BWP Trust (ASX: BWP) shares closed on Wednesday trading for $3.77 apiece.

This sees shares in the S&P/ASX 200 Index (ASX: XJO) real estate investment trust (REIT) – whose major tenants include Bunnings – up 3.9% over the past 12 months.

That’s roughly in line with the 4.4% one-year gains posted by the ASX 200.

Though we shouldn’t forget the 19.1 cents a share in unfranked dividends BWP paid to eligible stockholders over this period.

The ASX 200 REIT currently trades on a 5.1% unfranked trailing dividend yield.

And looking ahead, Sanlam Private Wealth’s Remo Greco believes BWP shares represent an appealing investment in today’s uncertain times (courtesy of The Bull).

Should you buy BWP shares today?

“BWP is a real estate investment trust,” Greco said. “It’s the biggest owner of Bunnings Warehouse sites in Australia, with a portfolio of 66 stores.”

As for the first reason you might want to buy BWP shares, Greco said:

The group’s income profile is characterised by high occupancy, long lease terms and strong tenant quality. Long-dated leases provide income visibility and steady rental growth.

Then there’s the passive income on offer.

“BWP presents as a defensive property investment entering a more proactive phase and recently trading on an annual yield of almost 5%,” Greco noted.

And summing up the third reason he has a buy recommendation on the ASX 200 stock, Greco concluded, “BWP appeals to investors in uncertain times as it offers low tenant risk and reliable cash flow.”

What’s the latest from the ASX 200 REIT?

Last Thursday, 7 May, BWP announced it had successfully raised $122 million via an Institutional Entitlement Offer, issuing new BWP shares for $3.77 each.

Wesfarmers Ltd (ASX: WES) reportedly took up its full $53 million entitlement.

The fully underwritten offer forms part of the company’s total $228 million capital raising goal.

BWP’s retail entitlement offer aims to raise another $106 million. That opened for eligible retail investors on 12 May and is scheduled to close on 22 May.

As for the company’s recent financial results, for the six months to 31 December (H1 FY 2026) the ASX 200 REIT reported revenue of $103.6 million, up 3.0% year-on-year.

And on the bottom line, BWP’s statutory profit after fair value adjustments and tax was up 41.2% from H1 FY 2025 to $221.8 million.

This saw management boost the interim dividend by 4.3% to 9.6 cents a share.

BWP expects to make full year FY 2026 dividend payments of 19.41 cents a share, up 4.1% from the passive income it paid out in FY 2025.

The post 3 compelling reasons to buy BWP shares today appeared first on The Motley Fool Australia.

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• Why JB Hi-Fi shares can turn things around despite a tough retail environment
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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Wesfarmers. The Motley Fool Australia has recommended Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX materials stock Develop Global Ltd (ASX: DVP) has been charging higher in 2026. 

Develop Global is a mineral exploration and development company.

Year to date, its share price has risen more than 36%. 

The company is in focus today after it announced it was not successful in renewing its Bellevue Gold Mine (BGM) contract through a competitive tender process. 

What happened?

In simple terms, Develop Global lost a big mining contract at the Bellevue Gold Mine because another company won the tender.

That contract would have been worth about $850 million over 4 years (around $213 million revenue each year).

The work there ends in July 2026.

However at the same time, it won a new contract at the Finniss Lithium project with Core Lithium.

That deal is worth at least $274 million over 3 years, with possible extensions. Once fully running, it should bring in about $120 million revenue per year. Work starts mid-2026, but it will likely  take 6-9 months to fully ramp up.

This news prompted the team at Bell Potter to bump up its price target on this ASX materials stock. 

Here’s what the broker had to say. 

Bellevue lost – Finniss gained

Bell Potter noted that it had assumed Develop Global would remain on-site for the next 4 years:

DVP announced a $274m minimum 3-year contract (with a 2-year extension option) with Core Lithium (CXO; not rated) for capital development and production activities at its Finniss Lithium project in the Northern Territory. 

We do not see the unsuccessful BGM contract renewal as a major set-back. The unsuccessful renewal highlights DVP’s disciplined approach to competitive contract tendering, ensuring achievement of internal return hurdles. DVP can re-deploy underground mining teams to Sulphur Springs to expedite capital decline works and to the upcoming Pioneer Dome development. We estimate DVP is positioning for $1.4b of tender opportunities to replace lost BGM contract revenue.

Target price increases for this ASX materials stock

Based on this guidance, the team at Bell Potter increased its target price on this ASX materials stock to $7.10 (previously $6.60). 

It has maintained its buy recommendation. 

From yesterday’s closing price of $6.21, this indicates an upside potential of just over 14%. 

We are confident DVP can replace BGM contract revenue through conversion of an outstanding ~$1.4b tender pipeline. In the meantime, DVP are targeting to deliver several Pioner Dome and Sulphur Springs related catalysts this quarter that could support its share price.

The post After surging 36% in 2026, why did this ASX materials stock just get upgraded? 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.

BHP Group (ASX: BHP) and Rio Tinto Group (ASX: RIO) made headlines yesterday as both companies hit all-time highs. However they weren’t the only ASX shares rocketing to record highs. 

On Wednesday: 

• BMC Minerals Ltd (ASX: BMC) rose 12% to a new all-time high
• SKS Technologies Group Ltd (ASX: SKS) jumped 5% to a new record high
• APA Group Ltd (ASX: APA) hit a record high. 

Lets see what sparked investor interest, and if there is any further upside in store. 

BMC Minerals continues hot start

BMC Minerals engages in the exploration and development of mineral properties. It operates the Kudz Ze Kayah Project located in the Finlayson Lake District of south-eastern Yukon, Canada.

It debuted on the ASX back in December last year, and has climbed more than 50% since its initial listing. 

Most of this increase has come following its quarterly report in late April. 

Investors have seemingly been scooping up shares in this exploration company after it announced a positive Decision Document for development of the ABM Mine issued by the Government of Yukon, Natural Resources Canada and the Department of Fisheries and Oceans Canada. 

This was a major de-risking milestone for the Company, allowing the continuation of the permitting process for all remaining permits and licences for the project.

Once in production, the ABM Mine is expected to be Canada’s largest silver and zinc producer and a top 15 Canadian copper producer.

A recent report from Morgans suggested a price target of $5.70 for these ASX shares. 

This would indicate a further 48% upside from current levels. 

SKS nearing peak

SKS Technologies engages in the development and distribution of technology products. It provides audiovisual products & solutions and electrical and communications cabling for the commercial, retail, health, defence and education market.

In 2026, it has already risen 122%, and it is now up 438% in the last year after yesterday’s rise. 

This has been spurred on by continued contract wins for the company. 

However targets from brokers indicate the stock could be close to fully valued. 

Morgans recently placed a revised price target of $8.95 on these ASX shares, which is only slightly above the current share price of $8.78. 

APA benefits from federal budget

APA is Australia’s largest energy infrastructure company, owning and/or operating an extensive portfolio of gas, electricity, solar, and wind assets.

It hit new record highs during trading on Wednesday, and could be set to benefit from changes in the federal budget. 

As reported by Bernd Struben on Tuesday, UBS equities strategist Richard Schellbach said the proposed CGT changes will favour the likes of quality ASX 200 dividend shares such as APA.

According to Schellenbach, ASX stocks with strong capital gain potential are likely to become less attractive following the CGT changes. 

ASX 200 dividend shares in the banking and real estate sectors could be set to benefit over high-growth stocks.

The post Can these ASX shares hitting record highs keep climbing? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Bell has positions in BHP 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 Apa Group. The Motley Fool Australia has recommended BHP Group and Sks Technologies Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

On Wednesday, the S&P/ASX 200 Index (ASX: XJO) was out of form and dropped into the red. The benchmark index fell 0.45% to 8,630.4 points.

Will the market be able to bounce back from this on Thursday? Here are five things to watch:

ASX 200 expected to fall again

The Australian share market looks set for another soft session on Thursday following a mixed night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 24 points or 0.3% lower this morning. In the United States, the Dow Jones was down 0.15%, but the S&P 500 rose 0.6% and the Nasdaq jumped 1.2%.

Xero results

All eyes will be on Xero Ltd (ASX: XRO) shares on Thursday when the cloud accounting platform provider releases its FY 2026 results. According to CommSec, the consensus estimate is for earnings per share of $1.22. Outside this, investors will be looking for strong subscriber growth in the US and signs that AI is a tailwind for Xero (boosting ARPU) and not a headwind as some fear.

Oil prices fall

ASX 200 energy shares Woodside Energy Group Ltd (ASX: WDS) and Santos Ltd (ASX: STO) could have a subdued session on Thursday after oil prices fell overnight. According to Bloomberg, the WTI crude oil price is down 0.85% to US$101.32 a barrel and the Brent crude oil price is down 1.8% to US$105.81 a barrel. Traders may believe Donald Trump’s visit to China could lead to the US seeking help from Beijing to end the war with Iran.

Buy Aristocrat shares

Aristocrat Leisure Ltd (ASX: ALL) shares jumped 13% on Wednesday following the release of a strong half-year result. Bell Potter believes there’s still plenty more room for the gaming technology company’s shares to rise further. It has retained its buy rating and $61.00 price target on its shares. It 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.”

Gold price rises

ASX 200 gold shares Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) could have a good session on Thursday after the gold price pushed higher overnight. According to CNBC, the gold futures price is up 0.25% to US$4,698.2 an ounce. This was despite fears that interest rates could be heading higher in the US.

The post 5 things to watch on the ASX 200 on Thursday appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Woodside Energy Group Ltd and Xero. 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.

DroneShield Ltd (ASX: DRO) shares have given investors quite a ride in the last twelve months.

The stock hit an all-time high of $6.71 back in October 2025, only to pull back sharply in the months that followed. 

After announcing the Australian Securities and Investments Commission (ASIC) announced an investigation into announcements and share trading by directors in November 2025, the stock has sunk to around $3 at the time of writing.

So what has been going on, and does the business still justify investor attention?

What drove the pullback?

Several factors have weighed on sentiment in 2026. 

DroneShield shares fell 7.1% in April alone, trailing the S&P/ASX 200 Index (ASX: XJO)’s 2.2% gain over the same month. 

Earlier in the year, a number of company directors sold shares, which rattled confidence among retail investors. 

April also brought a significant leadership change, with long-serving CEO Oleg Vornik stepping down and Chief Technology Officer Angus Bean stepping up to take the top job.

The ASIC investigation hasn’t helped either.

At such high valuations, any sign of uncertainty in management conviction tends to have a significant impact on stock valuations. 

But the numbers tell a different story

Outside of these issues, DroneShield’s operational performance looks as strong as it has ever been. 

The company delivered record customer cash receipts of $77.4 million in Q1 2026, up 360% on the same period last year. 

Revenue came in at $74.1 million for the quarter, up 121% year on year and the second-highest quarterly result in the company’s history. 

DroneShield recorded its fourth consecutive quarter of positive net operating cash flow, ending the period with $222.8 million in cash and zero debt. 

Committed revenues for FY 2026 already stand at $154.8 million as of April, giving the business meaningful earnings visibility for the year ahead.

The pipeline remains massive

Beyond the near-term numbers, DroneShield’s sales pipeline sits at $2.2 billion, spanning 312 projects across more than 60 countries, the largest in the company’s history. 

Droneshield is likely to continue benefiting from rising global defence budgets and growing interest in AI-enabled defence solutions. 

Bell Potter maintains a buy rating on the stock with a price target of $4.80, stating:

We believe DRO has a market leading RF detect/defeat C-UAS offering and a strengthening competitive advantage owing to its years of battlefield experience and large and focused R&D team. We expect 2026 will be an inflection point for the global C-UAS industry with countries poised to unleash a wave of spending on RF detect and defeat solutions.

Foolish Takeaway

DroneShield remains a high-risk but high-reward proposition. 

With such uncertainty around future earnings, investors need to be wary of any earnings disappointments Droneshield may announce. 

The share price will likely stay volatile as long-term contracts convert unevenly and investor sentiment swings with news flow. 

But for Fools with a stomach for volatility and high conviction, the global tailwinds for Droneshield are undeniable. 

The post After a rollercoaster start to the year, are Droneshield shares headed up? appeared first on The Motley Fool Australia.

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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 DroneShield. 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.

Medical imaging software company Pro Medicus Ltd (ASX: PME) has fallen sharply from its highs.

On the surface, it looks like a stock in trouble.

Dig into the numbers, however, and a very different picture emerges.

This is a business that is still growing revenue at nearly 30% per year, winning major new contracts, and generating margins many technology companies can only dream of.

The market has punished the share price but the business itself has barely missed a beat.

What actually happened

Pro Medicus shares sat at $230 per share earlier in 2026 before a brutal sell-off took hold.

Two forces drove the decline.

First, a broader rotation away from expensive technology and growth stocks hit high-multiple names hardest across the ASX.

Second, the company’s first half FY2026 result. While strong, the numbers came in slightly below elevated market expectations due to higher staff costs and a smaller-than-anticipated contribution from its landmark Trinity contract.

With high expectations already baked into the share price, that was enough to send the stock sharply lower.

The fundamentals remain exceptional

But the underlying results also showed some very promising signs.

Revenue grew 28.4% to $124.8 million for the half, with underlying profit before tax rising 29.7% to $90.7 million.

Pro Medicus maintained an EBIT margin of 73%, one of the highest of any listed technology company in Australia.

The company signed more than $280 million in new contracts during the half, including a $170 million ten-year deal with the University of Colorado and a $37 million five-year renewal with Northwestern Medicine that came with higher fees per transaction.

Five-year contracted revenue now sits at approximately $1.1 billion, giving the business extraordinary earnings visibility.

Brokers see significant upside

The broker community has stayed firmly behind the stock through the sell-off.

Morgan Stanley carries a price target of $210, while Bell Potter sits at $226. Both imply meaningful upside from current levels.

Morgans reaffirmed its buy rating after the half-year result with a price target of $275, noting that the longer-term growth outlook had actually strengthened from the wave of significant contract wins.

Foolish Takeaway

Pro Medicus is not a cheap stock, and there are high expectations for future growth already baked into its share price.  

What investors get when buying Pro Medicus shares is a world-class software business with a sticky customer base, extraordinary margins, and a growing contracted revenue backlog.

What’s more, Pro Medicus’ dominant position in a market will only get larger as healthcare digitisation accelerates globally.

For Fools who can handle volatility and think in years rather than months, the current price could be a genuinely interesting entry point.

The post Why Pro Medicus shares could still have their best years ahead appeared first on The Motley Fool Australia.

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• Down 40% but not out: Is Pro Medicus the buy of the decade right now?

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

A high dividend yield can look tempting.

It suggests more passive income today, which is exactly what many investors want.

But the highest yield on the market is not always the best opportunity. Sometimes, it is a warning sign that the market expects the dividend to fall.

That is why income investing should start with sustainability, not size.

Look for the source of the dividend

A dividend is only as strong as the cash flow behind it.

This means investors should look at how the company actually earns its money. Is revenue recurring? Are earnings stable? Does the business have pricing power? Is debt manageable?

A company with a lower dividend yield but more dependable earnings can sometimes be a better income share than one offering a much higher yield from a weaker position.

An example of this might be Woolworths Group Ltd (ASX: WOW), which offers a forecast 3.4% dividend yield backed by defensive earnings from everyday essentials.

Avoid dividend traps

A dividend trap occurs when a share looks attractive because its yield is high, but the payout is not sustainable.

This can happen when the share price has fallen sharply. The historical dividend yield may look impressive, but the next dividend could be much lower if earnings are under pressure.

That does not mean every high-yield share should be avoided. But it does mean investors need to ask why the yield is high.

If the market is pricing in a dividend cut, there may be a good reason.

Focus on consistency

Some of the best passive income shares are not the ones with the highest dividend yield in any given year.

They are the companies that can keep paying dividends through different market conditions and grow those payments over time.

That may include businesses providing essential services, such as Telstra Group Ltd (ASX: TLS), or infrastructure assets, such as APA Group Ltd (ASX: APA).

Consistency can matter more than headline yield because income investing is usually a long-term exercise. A reliable 4% yield that grows steadily can be more useful than a 9% yield that disappears.

Reinvest when passive income is not needed

Income investing is not only for retirees.

For investors who do not need the cash today, reinvesting dividends can help accelerate portfolio growth.

Each dividend payment can buy more shares, which then generate more dividends in the future. Over time, this creates a compounding effect.

This approach can be particularly powerful during weaker markets, when reinvested dividends buy more units or shares at lower prices.

Foolish takeaway

The best income strategy is not always the one that pays the most today.

It is the one that can keep paying over time.

By focusing on cash flow, balance sheet strength, payout sustainability, and diversification, investors can build a passive income stream with a much better chance of lasting through market cycles.

The post How to build passive income on the ASX without chasing the highest yield appeared first on The Motley Fool Australia.

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• How much is needed in superannuation to target a $5,000 monthly passive income?
• How much do I need to invest in ASX shares for $500 a month of passive income?
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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 no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Apa Group, Telstra Group, and Woolworths Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX industrials stock Mader Group Ltd (ASX: MAD) rose an impressive 4% yesterday. 

Over the long term, Mader Group has been one of the best ASX industrials stocks to own. It has risen more than 700% in the last 5 years. 

While Mader Group has experienced significant volatility so far in 2026, a new report from Bell Potter suggests there could be brighter days ahead. 

Mader Group is a maintenance services company contracting to the resources sector. The company specifically provides specialised labour to maintain and repair heavy mobile and plant equipment.

Here is the latest guidance from Bell Potter.

Entering FY27 with tailwinds

In a report released yesterday, the broker said this ASX industrials stock is benefiting from strong growth in Western Australia’s iron ore sector. 

This is driving demand for its heavy mobile equipment (HME) maintenance services.

Key points from the Bell Potter report:

• WA iron ore production increased 6% year-on-year in the March 2026 quarter, signalling higher mining activity.
• WA diesel consumption (a proxy for mining activity) rose 7% YoY in February 2026.
• The Australian Government forecasts iron ore production growth of 2.8% annually across FY26-27, compared with flat growth over FY23-25.
• This is positive for Mader Group because its core business services mining equipment fleets used in iron ore operations.

We believe upside to consensus revenue growth rates in FY27-28 is dependent on MAD’s ability to diversify into new adjacent markets while expanding existing verticals.

Looking at the US market, the broker said market conditions across the region appear robust. 

MAD’s initiatives to accelerate labour deployment will be key to delivering higher revenue growth rates in the short-term (vs consensus expectations).

The broker noted it anticipates the ASX industrials stock will announce its next five-year growth strategy before its FY26 result update, representing a potential re-rate catalyst.

Buy rating unchanged 

Bell Potter has retained its buy recommendation on this ASX industrials stock. 

It also has a price target of $9.70, which indicates an upside potential of approximately 25%. 

MAD is screening relatively undervalued compared with its historical multiples. We see MAD’s risk-reward as attractive considering: 1) favourable market conditions are conducive of upgrades (the FY27 NPAT guidance is a forthcoming upgrade catalyst); and 2) announcement of the 5-year growth strategy may bolster short-to-medium term earnings expectations.

Bell Potter isn’t the only broker tipping upside for this ASX industrials stock. 

5 analyst forecasts via TradingView have an average price target of $9.27 on the company, indicating roughly 20% upside. 

The post This ASX industrials stock just jumped 4% in a single day and is tipped to keep climbing 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 positions in and has recommended Mader Group. The Motley Fool Australia has positions in and has recommended Mader Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.