Author: openjargon

Telix Pharmaceuticals Ltd (ASX: TLX) shares were dominating headlines yesterday after the biopharmaceutical company’s shares crashed almost 12% in a single session. 

Investors were exiting their positions in Telix after the company announced a $3.3 billion merger with German company ITM. 

What is the merger?

Telix announced a merger with ITM Isotope Technologies Munich SE, a global leader in therapeutic radioisotopes. 

As reported by Laura Stewart yesterday, the deal could create a radiopharmaceutical powerhouse, with combined estimated 2026 revenue over US$1.3 billion and deeper supply chain security for Telix’s growing pipeline.

Telix said regarding the deal:

The merger will further strengthen Telix’s leadership as a vertically integrated radiopharmaceutical company with the capabilities required to develop, manufacture and deliver innovative treatments to patients globally. The combined organisation will be uniquely positioned as a radiopharmaceutical industry leader, differentiated by a world-class scaled isotope manufacturing business with a validated global distribution network, a market-leading commercial precision medicine platform and the industry’s most extensive therapeutic radiopharmaceutical pipeline.

However investors seemingly were unimpressed by the announcement, as Telix shares fell over 11%. 

Telix shares remain up 38% year to date. 

What is Bell Potter’s view?

Following the announcement, Bell Potter provided updated guidance on Telix shares. 

The broker’s view on Telix’s proposed merger with ITM is broadly positive from a strategic perspective, with the transaction providing Telix with significant exposure to the rapidly growing lutetium-177 (Lu-177) market and creating a vertically integrated radiopharmaceutical company spanning isotope production, drug development and manufacturing. 

However, Bell Potter also recognises the near-term risks, including approximately 24% ownership dilution to existing Telix shareholders, around US$302m of additional net debt, potential FY27 earnings dilution, and regulatory and execution risks associated with ITM-11 following the FDA’s recent Complete Response Letter. 

Overall, the merger strengthens Telix’s long-term strategic position and provides exposure to a potentially much larger radiopharmaceutical market. 

However the benefits are likely to take time to flow through to earnings, explaining the muted initial market reaction.

Once in a lifetime opportunity

Bell Potter retained its buy recommendation following the announcement and has an unchanged price target of $19 on Telix shares. 

The broker said they are yet to include the earnings impact from the transaction in our forecast,

Nevertheless, it represents a once in a lifetime opportunity to acquire a dominant share in the supply of Lu-177 that is very difficult to replicate. While earnings may take a year or two to realise, the underlying value is obvious. Maintain Buy rating.

The price target from Bell Potter indicates an upside potential of 20% for Telix shares. 

The post What is this broker’s view on Telix shares after yesterday’s crash? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• Telix shares just crashed 12% on merger news. Time to buy the dip?
• Neuren Pharmaceuticals vs Telix Pharmaceuticals: Which healthcare stock is best?
• Why are Telix Pharmaceuticals shares on the slide today?
• Telix Pharmaceuticals: ITM merger builds a sector leader

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

Australia’s artificial intelligence landscape has been in focus the past week after AI giant Anthropic signed an agreement to use part of a $32 billion data centre proposed for a site on Queensland’s Western Downs.

According to The ABC, the data centre is set to be the largest in Australia and will draw as much power as about 1.5 million average Australian households.

Anthropic aims to start using the centre in 2027 to power its artificial intelligence program Claude to answer user questions, rather than for training AI models.

What does it mean for ASX AI shares?

Anthropic’s agreement to anchor a proposed $32 billion data-centre development in Queensland is more than another major artificial intelligence announcement. 

It is a sign that the next phase of the AI boom is increasingly becoming a story about data centres, electricity, connectivity and physical infrastructure.

Importantly, the companies positioned to benefit may not necessarily be the businesses developing AI models themselves. 

Instead, they could include data centre operators, property developers, telecommunications and connectivity providers, electricity generators and infrastructure companies.

Here are three ASX AI shares to keep an eye on. 

Nextdc Ltd (ASX: NXT)

This ASX stock is one of the most obvious Australian-listed beneficiaries of increasing demand for data-centre capacity.

The company has been aggressively expanding its data-centre footprint as demand from cloud computing and AI increases.

The Queensland announcement doesn’t directly add revenue to NextDC, as the Western Downs project is not a NextDC development.

However, it provides another piece of evidence that AI companies are prepared to make substantial, long-term commitments to computing infrastructure.

Goodman Group (ASX: GMG)

Goodman Group (ASX: GMG) offers another way to gain exposure to the theme.

It is traditionally known for logistics and industrial property. 

However Goodman Group has increasingly positioned itself around data-centre development.

A significant proportion of the group’s development pipeline is now associated with data centres.

This is an important development because the AI boom is creating demand for a very different type of real estate.

A hyperscale AI data centre needs enormous amounts of electricity, fibre connectivity, cooling capacity and grid access.

That scarcity can potentially make suitable sites extremely valuable.

Dexus (ASX: DXS)

Dexus (ASX: DXS) is particularly interesting because it has an actual connection to the proposed Queensland development.

Dexus’s Australian Data Centres business will be working with partners on the Western Downs project.

That doesn’t mean Dexus will receive anything approaching $32 billion in revenue.

But it does give the company direct exposure to the development of Australia’s rapidly expanding data-centre infrastructure.

For investors, the distinction between project value and corporate earnings remains critical.

The post What does Anthropic’s $32b Queensland data centre mean for ASX AI shares? appeared first on The Motley Fool Australia.

More reading

• 2 ASX shares tipped to surge 70% or more in the next 12 months
• Goodman Group vs Nextdc: Which stock is the better buy today?
• 3 ASX 200 shares I’d buy and hold for a decade
• How much passive income could I make by investing $500 a month in ASX shares?
• Nextdc vs Megaport: Which ASX tech growth share comes out on top?

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

Right now, investors are heavily researching and gaining exposure to artificial intelligence shares. However, there are many layers to the artificial intelligence buildout. 

• Pure-play artificial intelligence companies – Companies whose main business is building AI models and software. A direct bet on AI.
• Hyperscalers – Big tech companies like Microsoft and Amazon that spend heavily on AI and make money through their cloud and AI products.
• Picks and shovels – Companies that provide the infrastructure AI needs, such as data centres, chips, memory, power, and cooling.

There are pros and cons to each part of this chain. The choice comes down to each investor’s individual goals and beliefs on the AI buildout. 

What are the pros and cons?

Firstly, looking at the pure-play companies, the positive to targeting these stocks is you have the highest direct exposure to AI growth. This gives you potential for exposure to rapid revenue growth if a company’s AI product takes off.

On the flip side, there may be a higher risk and volatility. 

Competition is intense, valuations can be high, and companies may struggle to turn AI demand into profits.

Looking at the hyperscalers, these huge existing businesses provide diversification. 

Strong cash flows allow them to spend billions on AI infrastructure, which can generate revenue through cloud, software and advertising. 

However the negative side is that AI is only part of the overall business, so upside is less concentrated. 

Additionally, massive AI spending also creates high capital requirements and potential pressure on returns. 

Finally, the picks and shovels stocks. 

The argument for these companies is that you can benefit from many AI companies spending on infrastructure, rather than needing one AI model to win. 

The main drawback is that these companies are often capital-intensive and cyclical, making them vulnerable to oversupply, falling prices and shifts in AI infrastructure spending.

How to target each layer

For investors looking for options at each level of this buildout, there are several ASX ETFs to consider. 

For investors looking to target pure-play AI, one option is the Global X Artificial Intelligence ETF (ASX: GXAI). 

It offers exposure to companies directly involved in AI, including AI software, services and supporting hardware.

For investors looking for exposure to hyperscalers, an option to consider is BetaShares Nasdaq 100 ETF (ASX: NDQ). 

It provides exposure to major US tech companies investing heavily in cloud and AI products. 

Finally, for investors seeking a picks and shovels approach, Global X Ai Infrastructure ETF (ASX: AINF) and Global X Semiconductor ETF (ASX: SEMI) are worth considering. 

They focus on the physical backbone of AI, including power, data centres, semiconductors, connectivity and raw materials.

The post How to target the different layers of the artificial intelligence buildout appeared first on The Motley Fool Australia.

More reading

• 3 amazing ASX ETFs to buy and hold for 10 years
• 4 most popular ASX ETFs revealed: survey
• 3 ASX ETFs for easy artificial intelligence (AI) exposure
• Vanguard ETFs vs. Betashares ETFs: Who’s coming out on top?
• Should I buy the iShares Global 100 ETF (IOO) now?

Motley Fool contributor Aaron Bell has positions in BetaShares Nasdaq 100 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, BetaShares Nasdaq 100 ETF, and Microsoft. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Amazon and Microsoft. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX banking giants, such as National Australia Bank Ltd (ASX: NAB), are popular shares for passive-income investors seeking regular, reliable income.

What sets NAB apart from the other big four banks is its exposure to business lending and SME banking.

NAB also stands out because it earns a huge portion of its revenue directly from its core lending activities, including loans and deposits. This makes it less exposed to the volatility in Australia’s residential mortgage market.

These attributes, combined with its exposure to business banking, allow it to generate a steady, diverse income stream. This is great news for investors seeking reliable passive income.

But what exactly could that passive income look like?

Lets investigate, using a $5,000 investment as an example.

What’s the latest out of NAB shares?

NAB shares have faced a few headwinds this year, including overall lower investor sentiment, policy changes, and affordability concerns.

Higher-than-expected inflation data and renewed interest rate hike forecasts haven’t helped matters either. A potentially weaker housing market means some investors are turning away from ASX bank shares.

NAB shares have managed to rebound from an annual low in early June, but they’re still down around 9% year-to-date and are 11% lower than 12 months ago.

At the time of writing, NAB shares are $38.72 each.

But brokers are divided about the outlook for NAB shares over the next 12 months. TradingView data shows that half of analysts rate NAB shares a hold. The other half are split evenly between buy/strong buy and sell/strong sell ratings. But the $38.29 average target price now implies a potential 1% downside ahead.

How many NAB shares can I buy with $5,000?

At the time of writing, the $38.72 trading price means a $5,000 investment buys about 129 shares.

What annual dividend is the bank forecast to pay its shareholders in FY26?

NAB has been paying regular fully-franked dividends every six months to shareholders dating back to 2003.

NAB most recently paid its shareholders a fully franked interim dividend of 85 cents per share in July and is forecast to pay a final 85-cent dividend in December, bringing the total to $1.70 per share for FY26.

At the time of writing, that translates to a forward dividend yield of around 4.4% for the year.

What is NAB forecast to pay in FY27?

Going forward to FY27, the bank is expected to increase its dividend slightly to $1.72 per share. Based on the current share price of $38.72, that translates to a forward dividend yield of closer to 4.5% for FY27.

Ok, so what could I earn off a $5,000 investment in FY27?

If the banking giant pays the forecasted $1.72 dividend to shareholders in FY27, then a $5,000 investment (or 129 shares) will generate $221.88 in passive income, at the time of writing.

The post If I invest $5,000 in NAB shares, what passive income will I receive in FY27? appeared first on The Motley Fool Australia.

More reading

• Which big 4 bank stock will rise the most before the end of 2026?
• Sell alert! Why this expert is calling time on Tabcorp and NAB shares
• Buy, hold, sell: Coles, NAB, CSL shares
• 2 ASX 200 shares to buy and 1 to sell now
• Down 15% and paying record dividends: Are CBA shares now a good buy for passive income?

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 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.

There are a number of large ASX shares that offer investors sizeable dividend yields. In my view, Telstra Group Ltd (ASX: TLS) shares could be the best ASX blue-chip stock for dividend income if someone wanted to invest $6,000.

It may not have the biggest dividend yield, but I think it offers a pleasing mix of a growing dividend and a solid dividend yield.

In FY26, the ASX telco share grew its annual dividend income by 10.5% to 21 cents per share. It has increased its dividend five years in a row and analysts predict the dividend can continue rising at a solid rate.

Let’s take a look at what’s projected for FY27 and what that would mean for a $6,000 investment in Telstra shares.

Projected dividend income for the 2027 financial year

The business offers very defensive earnings – being connected to the internet seems important for a lot of households, businesses and so on.

As Australia’s digitalisation increases, more devices require subscriptions, helping boost Telstra’s subscriber numbers each year (including its wholesale division, which supports other smaller telcos). Therefore, it looks defensive with growth attributes, in my view.

In FY26, the company managed earnings per share (EPS) growth of 5.3%, cash EBIT growth of 8%, cash net profit growth of 11.6% and cash EPS growth of 13.8%.

Management think that cash EBIT could grow between 1.9% and 6.2% in FY27, which I believe bodes well for cash EPS (and the dividend).

Using the projection on Commsec, the business is projected to grow its annual dividend income per Telstra share by 4.75% in FY27 to 22 cents per share.

Excluding franking credits, that’s a potential dividend yield of 4.5%. Assuming the same level of franking as FY26, it’d be a grossed-up dividend yield of 6.3% including franking credits.

What would a $6,000 investment in Telstra shares create?

At the time of writing, a $6,000 purchase of Telstra stock would buy 1,234 shares.

With those shares, for FY27, the shareholder is therefore projected to receive $271.48 of dividend cash and approximately $376.19 overall dividend income, including the franking credits.

Collectively, analysts seem quite positive about the company’s valuation right now. According to Commsec, 16 analyst ratings currently cover the business: nine are buys, six are holds, and one is a sell.

While Telstra isn’t trading near 52-week lows, it looks attractive to me. Of course, there could be even better ASX share opportunities out there to buy.

The post If I buy $6,000 of Telstra shares, how much dividend income will I receive? appeared first on The Motley Fool Australia.

More reading

• Should I buy Telstra shares for passive income?
• I’m planning to retire with $1 million in superannuation. How much passive income can I earn? 
• Telstra vs NAB: Which ASX blue chip is the better buy?
• How many Telstra shares do I need to buy to earn $500 of passive income every month?
• 5 ASX shares I’d recommend to beginners

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

The big four bank stocks make up a foundational piece of many investors’ portfolios. 

They also dominate the S&P/ASX 200 Index (ASX: XJO) in terms of market share. 

Combined, they make up almost a quarter of Australia’s benchmark index. 

This means when the big four bank stocks underperform, they have a huge impact on many ASX ETFs that track the domestic market. 

This is exactly what has happened so far in 2026. 

Why have bank stocks underperformed this year?

At the time of writing, in 2026: 

• Commonwealth Bank of Australia (ASX: CBA) shares are down 5% 
• National Australia Bank Ltd (ASX: NAB) shares have fallen almost 9%
• Westpac Banking Corp (ASX: WBC) is down more than 10%
• ANZ Group Holdings Ltd (ASX: ANZ) have risen 4%. 

These disappointing results have heavily contributed to the underperformance of the broader ASX 200, which is essentially flat year to date. 

Several factors have contributed to these poor returns. 

Firstly, the big four bank stocks came into 2026 with stretched valuations after strong growth in the prior year. 

Additionally, sentiment has shifted to viewing high interest rates as poor for the housing market as mortgage growth deteriorates. 

The big four control more than 70% of Australia’s mortgage market, so weaker housing activity hits the sector disproportionately. 

Home-loan applications have fallen roughly 12–20% across the majors, according to Reuters.

In short, the market is no longer paying the same premium for reliable bank earnings when it sees slower mortgage growth, intense lending competition and rising credit-risk provisions ahead.

Can they rise before 2027?

With three of the big four bank stocks losing ground in 2026, investors might be looking to buy the dip. 

The latest outlook from experts paints a mixed picture for the next 6-12 months. 

On the positive side, UBS recently reaffirmed its buy rating on Westpac shares with a 12-month target of $45.

With Westpac shares currently trading for just under $35 per share, this indicates almost 30% upside. 

It also offers a competitive yield across the big four. 

On ANZ shares, Citi has a buy rating with a $39.25 target. 

This indicates limited upside from its current price hovering around $38. 

CBA shares still appear overpriced according to Shaw and Partners’ James Bills, who recently had a sell rating on Australia’s largest bank. 

Finally, NAB is also receiving poor outlooks from brokers, with Catapult Wealth’s Dylan Evans recently issuing a sell recommendation on the big four bank stock. 

The post Which big 4 bank stock will rise the most before the end of 2026? appeared first on The Motley Fool Australia.

More reading

• If I invest $5,000 in NAB shares, what passive income will I receive in FY27?
• Macquarie Group vs Commonwealth Bank: Which ASX bank is the better buy?
• Sell alert! Why this expert is calling time on Tabcorp and NAB shares
• Could CBA shares reach $180 in 2027?
• Buy, hold, sell: Coles, NAB, CSL shares

Motley Fool contributor Aaron Bell has positions in National Australia Bank. 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.

If you are hunting for big potential returns, then it could be a good idea to check out the S&P/ASX 200 index (ASX: XJO) share in this article.

That’s because the team at Bell Potter believes that it could smash the market over the next 12 months.

Which ASX 200 share?

The share that Bell Potter is urging investors to buy is Nickel Industries Ltd (ASX: NIC).

It is an Indonesia-focused vertically integrated nickel producer with production assets across nickel ore mining, Nickel Pig Iron (NPI) production, and nickel Mixed Hydroxide Precipitate (MHP) production. 

Bell Potter notes that low rainfall is impacting its operations. It said:

NIC reported that low rainfall is impacting water supply in Central Sulawesi and interrupting the ramp-up of the 46%-owned Excelsior Nickel Cobalt (ENC) HPAL project. […] Should water supply constraints persist, ENC is expected to run at ~30% of nameplate until water availability normalises. The wet season is late and inherently hard to predict, but normalisation is anticipated by December 2026.

On a positive note, the low rainfall has supported mining and haulage productivity. The broker adds:

Conversely, the dry conditions have supported mining and haulage productivity at the Hengjaya Mine, which achieved 3.1Mwmt of nickel ore sales in July and August, including a record 1.6Mwmt in August 2026. This is tracking ahead of our prior forecast, which we incrementally increase from here, noting the current 14.3Mt RKAB sales permit cap. NIC’s RKEF operations continue unaffected by the water shortage.

Should you invest today?

According to the note, the broker has retained its buy rating and $1.45 price target on the ASX 200 share.

Based on its current share price of 80 cents, this implies potential upside of 81% for investors over the next 12 months.

In addition, a very generous 7.7% dividend yield is forecast in FY 2027, followed by a massive 15.5% dividend yield in FY 2028.

Commenting on its buy recommendation, Bell Potter said:

EPS changes in this report are: CY26: -10%; CY27: 0%; CY28: 0% as we update for a revised production outlook and higher price realisations. NIC is one of the world’s largest listed nickel producers and offers exposure across a range of nickel products and markets. It has a track record of maintaining margins through low nickel prices, benefitting from its diversified product suite and margin exposure across an integrated value chain. We retain our Buy recommendation and TP$1.45/sh.

The post Why this ASX 200 share could rise 80% appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• 5 things to watch on the ASX 200 on Monday
• This ASX nickel miner could jump 57%, Macquarie says
• 3 ASX mining shares Bell Potter rates a buy
• Strong profit growth shines in Nickel Industries half-year 2026 earnings

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.

If you are lucky enough to have $20,000 to invest in the share market, then it could be a good idea to consider some exchange traded funds (ETFs).

But which ones could be worth a closer look? Let’s dig deeper into three ASX ETFs that could be top picks. Here’s what they offer:

iShares S&P 500 ETF (ASX: IVV)

The first ASX ETF to consider is the iShares S&P 500 ETF.

This fund tracks the famous S&P 500 Index, which includes 500 of the largest listed companies in the United States.

That gives investors access to some of the world’s most successful businesses across technology, healthcare, financial services, consumer products, industrials, and other industries.

Among its holdings are the likes of Nvidia (NASDAQ: NVDA), Walmart (NASDAQ: WMT), McDonald’s (NYSE: MCD), and Apple (NASDAQ: AAPL).

This could make it a great way to invest across the US market.

Betashares Global Quality Leaders ETF (ASX: QLTY)

Another ASX ETF that could be worth a closer look is the Betashares Global Quality Leaders ETF.

This fund invests in global companies that demonstrate strong quality characteristics.

That includes businesses with high profitability, healthy balance sheets, and relatively stable earnings.

This could be a sensible approach to long-term investing, particularly in the current environment.

Companies with strong financial positions can often keep investing for growth during difficult economic conditions. They may also be better placed to take advantage of opportunities when weaker competitors are struggling.

The Betashares Global Quality Leaders ETF offers exposure to a portfolio of companies selected for these characteristics across developed markets.

It was recently recommended by the team at Betashares.

Betashares Global Cash Flow Kings ETF (ASX: CFLO)

A final ASX ETF to consider for the $20,000 is the Betashares Global Cash Flow Kings ETF.

This fund focuses on global companies that generate strong free cash flow.

Free cash flow is the money a business has left after paying its operating expenses and capital expenditure.

It can be an important indicator of financial strength. Companies generating significant free cash flow have more flexibility to invest in growth, pay dividends, buy back shares, reduce debt, or make acquisitions.

That can be particularly valuable during periods when economic conditions are challenging.

For investors looking to build wealth over the next decade, it could be an attractive way to back companies with strong underlying financial characteristics. It was also recently recommended by analysts at Betashares.

The post Where to invest $20,000 in ASX ETFs today appeared first on The Motley Fool Australia.

More reading

• Do you invest in ASX managed funds? Here’s something I wish I knew 10 years ago
• 4 most popular ASX ETFs revealed: survey
• How to make $26,000 of passive income from ASX shares
• 5 ASX ETFs to buy and hold forever
• What Warren Buffett can teach Australians about superannuation

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 positions in and has recommended Apple, Nvidia, Walmart, and iShares S&P 500 ETF. The Motley Fool Australia has recommended Apple, Nvidia, and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Argo Investments Ltd (ASX: ARG) has announced it will pay dividends every three months from the start of next year, while also flagging its dividend payments for the year ahead.

Dividend payouts to increase

The listed investment company said it intended to pay four, 10-cent, fully-franked dividends next year, increasing its dividend payments from this year’s 38.5 cents.

Argo’s Managing Director Jason Beddow said the move to quarterly dividends “will provide our shareholders with more regular income to help meet the evolving cash flow needs of many households, while also making Argo more attractive to prospective shareholders”.

Mr Beddow added that the 40-cent dividend payout next year would be another record high for the company.

Argo in FY26 posted a profit of $260.2 million, up from $259.8 million the previous year.

The company said its final dividend “includes a listed investment company (LIC) capital gain component of 5 cents per share, reflecting crystallised gains in the portfolio”.

Argo added:

When Argo realises a capital gain on the sale of a long-term holding in our portfolio, a capital gains tax discount can be passed on to shareholders as though they made the gain themselves. This allows most individuals and self-managed superannuation funds to claim a tax deduction, in addition to the benefit of franking credits. Please note, the LIC capital gain component of this dividend is unaffected by the recent changes to Australia’s capital gains tax (CGT) regime. Argo is engaging with government through our industry association to ensure we maintain our special status as a genuine long-term investor, rather than a trader, so we can continue to provide this benefit to our shareholders.

Trading gains locked in

Major additions to the Argo portfolio over the year included CSL Ltd (ASX: CSL), Amcor Ltd (ASX: AMC), and Megaport Ltd (ASX: MP1).

Sales included Rio Tinto Ltd (ASX: RIO), Reece Ltd (ASX: REH), and Macquarie Group Ltd (ASX: MQG).

Argo said it outperformed the S&P/ASX 200 Index (ASX: XJO) during the year.

The company said:

Argo delivered a full-year return of +8.7% based on net tangible assets (NTA) return after all costs and adjusted for company tax paid, outperforming the Index, which rose +6.1%, without allowing for any costs. The outperformance generated approximately $200 million in additional value for the portfolio. The biggest positive contributors to performance during the financial year were our positions in Rio Tinto, Macquarie Group and Lynas Rare Earths. Our underweight exposure to Commonwealth Bank relative to the Index also boosted returns as the bank’s share price retreated from its lofty valuations, following a sharp sell-off after the May Federal Budget.

Argo said it had outperformed the index over the past five years. The company is valued at $6.91 billion.

The post This outperforming ASX dividend stock will now pay out on a quarterly basis appeared first on The Motley Fool Australia.

More reading

• Starting with $20,000, how to build a portfolio generating $5,000 a year in passive income

Motley Fool contributor Cameron England has positions in CSL and Megaport. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, Macquarie Group, and Megaport. 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 Amcor Plc. The Motley Fool Australia has recommended CSL 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 Vanguard Australian Shares High Yield ETF (ASX: VHY) is a very appealing option for a high dividend yield and it could be a strong option for passive income.

The purpose of the VHY ETF is to provide low-cost exposure to ASX shares that have higher forecast dividends relative to other ASX shares.

It achieves diversification by restricting the proportion of the portfolio invested in any one industry to 40% of the total ETF and 10% in any one company. Australian real estate investment trusts (A-REITs) are excluded from the portfolio entirely.

Given that many of the ASX’s largest blue-chip shares also offer sizeable dividend yields, it’s not surprising that many of its biggest holdings are also the largest in Australia.

Major holdings

At the end of August 2026, its biggest holdings were:

• BHP Group Ltd (ASX: BHP)
• Commonwealth Bank of Australia (ASX: CBA)
• National Australia Bank Ltd (ASX: NAB)
• Westpac Banking Corp (ASX: WBC)
• ANZ Group Holdings Ltd (ASX: ANZ)
• Rio Tinto Ltd (ASX: RIO)
• Woodside Energy Group Ltd (ASX: WDS)
• Macquarie Group Ltd (ASX: MQG)
• Telstra Group Ltd (ASX: TLS)
• Transurban Group (ASX: TCL)

Perhaps unsurprisingly, more than 70% of the portfolio is invested ASX financial shares, ASX mining shares and ASX energy shares, which are known for paying large passive income most years.

The portfolio has 92 holdings, though the biggest names carry the largest weightings. The ten names I highlighted above accounted for 61.6% of the total ETF portfolio.

VHY ETF dividend yield

Because the portfolio focuses on passive income and the attractive franking credits that can come with dividends paid by Australian companies, Vanguard reports its dividend yield both excluding and including franking credits.

According to the forecast dividends from FactSet – which Vanguard uses as a dividend data provider – the VHY ETF dividend yield excluding franking credits is forecast to be 4.2%.

Including franking credits (sometimes referred to as a ‘grossed-up dividend yield’), the forecast dividend yield is 5.6%.

What would it take to generate $1,000 of passive income?

The number of VHY ETF shares (called ‘units’) needed to generate $1,000 in dividends depends on whether we include franking credits in the total.

If we exclude franking credits, an investor would likely need about 282 VHY ETF units to generate $1,000 in passive income, assuming the dividend projection is close to reality.

If franking credits are included, then an investor would likely need an estimated 212 VHY ETF units.

It’s a solid option, with the dividends coming from a somewhat diversified portfolio. However, I’d want to add other ASX shares in there too for additional dividend diversification because it is quite heavily focused on a limited number of industries and a tilt towards a few large names.

The post How much must I invest in VHY ETF shares to earn a $1,000 passive income in 2027? appeared first on The Motley Fool Australia.

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• 3 ASX ETFs that are a perfect compliment to your superannuation
• How to earn $10,000 in passive income a month with these ASX dividend shares
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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 and Transurban Group. The Motley Fool Australia has positions in and has recommended Telstra Group and Transurban Group. The Motley Fool Australia has recommended BHP Group, Macquarie Group, and Vanguard Australian Shares High Yield ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.