Author: openjargon

The team at Morgans has been busy looking at several ASX shares this week.

Is it bullish, bearish, or lukewarm on these shares? Let’s find out:

Amcor PLC (ASX: AMC)

Morgans is positive on this packaging giant but not quite enough for a buy rating.

It has put an accumulate rating and $65.40 price target on the ASX share. Based on its current share price of $58.58, this implies potential upside of approximately 12% for investors. It commented:

Following its merger with Berry Global in April 2025, AMC identified a non-core portfolio of ~US$2.5bn in revenue. These lower-growth or lower-margin businesses where AMC lacks scale or leadership positions are expected to be divested over time via cash sales or joint ventures/partnerships.

While there is a range of scenarios that can play out, using conservative assumptions, we estimate the combined non-core portfolio could be worth ~US$1.8bn. To date, AMC has reached agreements to sell six businesses for a combined value of ~US$500m. AMC plans to use proceeds from non-core asset sales to reduce leverage, which stood at 3.8x at the end of 3Q26. While management expects leverage to end FY26 at 3.4-3.5x, the stretched balance sheet remains a key investor concern. Our analysis indicates a strong negative relationship (correlation coefficient -0.76) between AMC’s leverage and its 1-year forward PE multiple. We therefore expect a reduction in leverage to support an improvement in AMC’s PE multiple over time.

Beach Energy Ltd (ASX: BPT)

This ASX energy share has been given a sell rating by Morgans this week with a reduced price target of 81 cents. This compares to its current share price of 86 cents.

The broker is bearish due to its belief that the company could fall short of expectations. It said:

We mark-to-market our second half estimates for weaker spot gas prices, while also trimming our Waitsia output forecasts for FY26-28 on continuing struggles. After downgrading our Q4 estimates for daily production rates, we see potential for BPT to fall just short of its FY27 group production guidance. While BPT’s share price has already been under pressure, its earnings outlook has declined at a faster rate, with its forward EV/EBITDA actually rising. We downgrade our recommendation to Sell (from Hold) with a revised target price of A$0.81 (was A$1.10).

Reliance Worldwide Corporation Ltd (ASX: RWC)

Although this plumbing parts company’s shares trade on undemanding multiples, it isn’t quite enough for anything more than a hold rating at present with a price target of $3.60. This is a touch lower than its current share price of $3.72.

The broker was positive on its decision to close its Australian brass operations. It said:

RWC has announced plans to close its Australian brass casting, forging and machining operations, along with several smaller sites, as part of its ongoing global footprint rationalisation program. We think the decision makes sense given RWC’s reduced reliance on Australian-sourced brass in recent years. Annualised net savings are expected to be ~US$9m by the end of FY27, with benefits in the Americas more than offsetting an adverse impact on APAC earnings. One-off costs of US$100-110m (including ~US$5m cash) are expected to be incurred in FY26.

We make no changes to underlying assumptions, with changes to earnings forecasts reflecting the one-off costs in FY26 and net benefits expected across FY27 and FY28. RWC’s valuation remains undemanding (12.8x FY27F PE) and recent developments related to the Middle East conflict should be positive for the global macroeconomic outlook. However, US housing demand remains subdued with 30-year fixed mortgage rates still around 6.5%. The timing of a recovery in housing activity remains uncertain and we therefore maintain our HOLD rating.

The post 1 ASX share to accumulate, one to hold, and one to sell appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Wednesday
• Buy, hold, sell: How does Morgans rate these ASX shares?

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

Building a portfolio does not need to be difficult.

With the right mix of ASX exchange traded funds (ETFs), investors can get broad exposure to Australian shares, global markets, and selected quality companies.

Here is one simple way to do it with just three investments.

iShares S&P 500 ETF (ASX: IVV)

The first ASX ETF to consider as part of this portfolio is the iShares S&P 500 ETF.

This fund can act as the global growth engine of the portfolio. It gives investors exposure to 500 large companies listed in the United States, which remains the deepest and most influential share market in the world.

That means the fund is connected to many of the businesses setting the pace in technology, healthcare, consumer products, financial services, industrials, and communication services. This includes Apple (NASDAQ: AAPL) and NVIDIA (NASDAQ: NVDA).

A key attraction of this fund is that it does not require investors to decide which US giant will win next. It spreads capital across a large group of market leaders and allows the portfolio to participate as corporate America keeps adapting, innovating, and expanding.

Vanguard Australian Shares Index ETF (ASX: VAS)

The Vanguard Australian Shares Index ETF could be another good addition to this portfolio.

It brings the portfolio back home. The fund provides exposure to a large basket of Australian shares, including banking giants, mining behemoths, healthcare companies, retailers, property groups, infrastructure businesses, and industrial names.

The Vanguard Australian Shares Index ETF also provides a source of income, as many Australian companies have a long history of paying dividends.

This gives the portfolio a different shape from a purely global strategy. It adds exposure to Australian profits, Australian dividends, and the domestic economy, while still spreading risk across a broad group of local companies.

VanEck Morningstar International Wide Moat ETF (ASX: GOAT)

The final component of this portfolio could be the VanEck Morningstar International Wide Moat ETF.

This ASX ETF can add a more selective layer to the portfolio. It looks beyond Australia and focuses on international companies that are judged to have strong competitive positions and attractive valuations.

That makes it different from a standard index fund. Instead of simply following the biggest companies by market value, it tries to find businesses with advantages that may help protect profits over time. Those advantages can come from strong brands, valuable intellectual property, cost benefits, customer loyalty, or products that are difficult to replace.

This can give the portfolio exposure to companies that may be able to defend their market positions through changing conditions. It also helps broaden the portfolio beyond the Australian market and the US-heavy exposure investors may already get through IVV.

Foolish takeaway

It might be simple, but combining the IVV, VAS, and GOAT ETFs could give investors a winning three-ETF portfolio with global scale, local exposure, dividend potential, and a selective quality tilt.

The post How to build a winning ASX portfolio with just 3 investments 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 positions in and has recommended iShares S&P 500 ETF. The Motley Fool Australia has recommended VanEck Morningstar International Wide Moat ETF 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.

Last week was a tough week for BHP shares.

BHP Group Ltd (ASX: BHP) has spent two decades trying to prove it can be more than an iron ore and copper company.

Jansen, its giant potash project in Saskatchewan, Canada, is the clearest test of that ambition.

This week, that test got harder.

BHP shares fell 3.20% on Friday to $62.96 after the company revealed another cost blowout at Jansen. The stock has now fallen approximately 8% from its 52-week and record high.

What actually happened at Jansen

BHP completed a detailed review of the cost and schedule estimates for Jansen Stage 2, and the news was not good.

The company now expects Stage 2 to cost between US$4.9 billion and US$5.4 billion more than previously estimated. This is on top of an original sanctioned budget of US$4.9 billion approved back in October 2023.

BHP will recognise an impairment charge of about US$2.3 billion against Jansen Stage 2 as part of its FY26 results.

First production from Stage 2 is now targeted for FY2031, a delay from the originally planned 2029 start.

Stage 1, separately, remains on track for first production in FY2027, though its cost estimate has also crept higher since being sanctioned.

BHP has confirmed it will provide a further update on Stage 1 timing and spending before 31 December 2026.

Why the market reacted so sharply

An impairment charge of this size is, by definition, a non-cash accounting adjustment rather than an immediate cash outflow.

But it is also a credibility issue.

This is not the first time Jansen’s costs have risen beyond what was originally promised. Each successive upward revision makes the market more sceptical of management’s next set of project projections.

BHP shares had already gained around 35% since the start of 2026. This has left little margin for disappointment once the news landed.

Does this change the long-term investment case for BHP shares?

Jansen represents BHP’s attempt to diversify beyond iron ore and copper into a third major commodity pillar tied to global food security and agricultural productivity.

Management still sees potash as an important long-term growth area despite the cost overrun. The company has explicitly framed this week’s update as a matter of timing and cost rather than an abandonment of the underlying strategy.

That framing matters for how investors should weigh the news. The setback is real, but BHP is not signalling that it is walking away from potash altogether.

Why BHP shares could still be a buy

The case for BHP shares has never rested primarily on Jansen.

BHP’s growing copper exposure, combined with rising global demand for electricity-intensive infrastructure, including data centres, electric vehicles, and renewable energy, remains the stronger near-term driver of the company’s earnings and dividend.

The current pullback to approximately 9% below the record high gives investors a more reasonable entry point into a business whose iron ore cash generation and copper growth trajectory have not been altered by this week’s news.

Jansen still adds a longer-term potash option, even with a delayed timeline, rather than removing a pillar of the investment case entirely.

Foolish takeaway

BHP’s bet beyond iron ore just got more expensive and will take longer to pay off than originally promised.

That is a setback, and the market’s sharp reaction reflects real concern about capital discipline at BHP.

But the core reasons to own BHP shares: scale, a strong iron ore cash engine, and growing copper exposure tied to the AI and electrification megatrend, remain firmly in place.

For investors who can accept that mega-projects rarely run exactly to plan, the post-Jansen pullback may offer a reasonable entry point rather than a reason to walk away.

The post BHP’s bet beyond iron ore just hit a snag. Are BHP shares still a buy? 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 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.

When it comes to investing in the lithium industry, PLS Group Ltd (ASX: PLS) shares are the go-to for many investors.

And while it is undoubtedly one of the highest-quality lithium miners in the world, a strong gain over the past 12 months could mean that upside is limited from here.

That certainly isn’t the case for the ASX lithium share in this article according to the team at Bell Potter, with the broker suggesting that it could more than double in value.

Which ASX lithium share?

The share that Bell Potter is bullish on is lithium developer Ioneer Ltd (ASX: INR).

It is the owner of the Rhyolite Ridge lithium-boron project in Nevada, USA.

Bell Potter notes that the project is designed to produce +24ktpa lithium carbonate equivalent and +135ktpa boric acid over the first 25 years.

However, it points out that ore reserves suggest that it could support an 82-year project life at this initial production rate.

Bell Potter was pleased to see that the South Korean government and Hyundai Engineering have taken a shine to the project and has signed non-binding letters of intent this week. It said:

While non-binding, the calibre and commentary from these counterparties provides strong endorsement of INR’s project development pathway. INR is currently running a Strategic Partnering Process to introduce new project-level equity funding in support of a Final Investment Decision at Rhyolite Ridge. It is reasonable to assume that the KIND, MOLIT and Hyundai LOIs are part of this process.

The Rhyolite Ridge project is fully permitted; an October 2025 project economic update outlined potential production of 27.8ktpa lithium hydroxide and 135.5ktpa boric acid at a capital cost of US$1.7b and with a lithium AISC of US$4,628/t LCE (net of boron co-product credits). The project is also backed by a US$996m US Department of Energy concessional loan. With cash of US$62m and no debt (31 March 2026), INR is fully funded to FID.

Should you invest?

According to the note, the broker has retained its speculative buy rating on the ASX lithium share with a slightly improved price target of 40 cents (from 39 cents).

Based on its current share price of 15.5 cents, this implies potential upside of approximately 160% for investors over the next 12 months.

Commenting on its buy recommendation, Bell Potter said:

Rhyolite Ridge is strategically important as a fully permitted, near-term and US-located source of lithium and boron supply. Both lithium and boron are USGS-designated critical minerals. Rhyolite Ridge received development approval in October 2024 and engineering design is 70% complete. Lithium markets have recently strengthened, and we expect continued growth in underlying demand and limited new sources of supply will support lithium chemicals prices over the medium to long term. Our INR valuation is $0.40/sh.

Key INR value catalysts are the outcomes of the Strategic Partnering Process in the lead-up to a Final Investment Decision and commencement of development, all expected in 2H 2026.

The post Forget PLS shares, this US-focused ASX lithium share could rise 100%+ appeared first on The Motley Fool Australia.

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• PLS shares drop 5%: What’s driving the move?

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.

The ASX dividend share end of the market is a great place to hunt for opportunities that offer compelling passive income. The recent Federal budget changes make capital gains a little less appealing than they were before, compared to dividends. Large dividend yields could be a solution.

Businesses with extremely high dividend yields aren’t necessarily the best choices because they could be less reliable or not grow the payout as much as a business with a lower payout, simply because they’re keeping more money to invest for growth.

I’m not expecting significant growth of the following two names, but they have demonstrated a track record of dividend stability and long-term payout growth.

WAM Leaders Ltd (ASX: WLE)

WAM Leaders is a listed investment company (LIC) operated by Wilson Asset Management.

The portfolio is focused towards S&P/ASX 200 Index (ASX: XJO) shares, which are the biggest, strongest and most resilient businesses that have strong market positions and good margins. It’s important to note that this is not a passive, index-following portfolio but an active one that buys and sells shares as valuation appeal changes.

Between its inception in May 2016 to May 2026, the WAM Leaders portfolio has returned an average of 12% (before fees, expenses and taxes), outperforming the 9.1% average annual return of the S&P/ASX 200 Accumulation Index (ASX: XJOA).

That level of investment return – which is not guaranteed to continue – has helped the business increase its annual payout every year since FY17. The increases have been small in the last few years because the yield is already so large.

The guided dividend amount for FY26 is 9.6 cents per share, which translates into a grossed-up dividend yield of 10.4%, including franking credits, at the time of writing.

I think the business has a good profit reserve to continue paying the current dividend for the foreseeable future.

Hearts and Minds Investments Ltd (ASX: HM1)

Hearts and Minds is another ASX share with a large dividend yield.

It’s a LIC that aims to provide a concentrated portfolio of between 25 and 35 global shares based on the highest-conviction ideas from well-regarded fund managers. There are no management fees, and instead, money is donated to leading Australian medical research organisations.

Close to a third of the portfolio is decided by picks from investment professionals from an annual investment conference. Core, ongoing, portfolio managers decide a greater share of the portfolio.

Since its inception in November 2018, the LIC’s portfolio has returned an average of 10.25% after expenses and before Australian taxes.

Its dividend has steadily increased since FY23, and it plans to continue to increase its half-year payout by 0.5 cents every six months.

It plans to pay an annual dividend per share of 19.5 cents in FY26, which translates into a grossed-up dividend yield of 9.8%, though the next 12 months of payments are likely to be a yield of 10.4%, including franking credits.

The business is trading at a discount of around 20% to its pre-tax net tangible assets (NTA), so it looks like great value to me right now.

The post 2 ASX shares with dividend yields above 9% appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Hearts And Minds Investments. 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.

It has been a remarkable 12 months for some of the big ASX mining stocks.

PLS Group Ltd (ASX: PLS), Liontown Resources Ltd (ASX: LTR), and Mineral Resources Ltd (ASX: MIN) have all delivered triple-digit gains over the past year, making them among the strongest-performing ASX mining stocks.

However, momentum has cooled recently. All three lithium stocks have retreated over the past month as lithium prices pulled back.

That’s hardly surprising. The lithium carbonate price surged approximately 155% over the past year, helping fuel the sector’s rally. But with prices falling around 14% over the past month, investors are reassessing how much upside remains.

So, what comes next for these ASX mining stocks?

PLS Group

PLS Group shares have surged 356% over the past 12 months but have slipped 10% to $5.66 in the past four weeks.

The rally wasn’t driven solely by higher lithium prices. The $18 billion ASX mining stock also delivered strong operational growth.

During its first-half result, PLS reported a 47% increase in revenue to $624 million, supported by higher realised lithium prices and increased sales volumes.

Underlying EBITDA jumped 241% to $253 million, while EBITDA margins expanded to 41%, up from 17% a year earlier.

The company’s flagship Pilgangoora operation remains one of the world’s largest hard-rock lithium assets and provides significant scale advantages.

The key risk remains lithium prices. If the recent weakness continues, earnings could come under pressure despite strong operational performance.

Liontown Resources

Liontown Resources has gained 185% over the past year but has fallen 18% over the past month to $1.90.

Investors have been attracted to the company’s rapidly growing Kathleen Valley project, which is emerging as one of Australia’s most significant lithium operations.

In its half-year results, Liontown reported a 70% increase in lithium production to 192,514 dry metric tonnes and revenue more than doubled. It rose 107% to $207.5 million.

The company’s growth profile remains compelling as production ramps up and operational efficiencies improve.

However, Liontown remains highly exposed to lithium market conditions. Any prolonged decline in lithium prices could weigh on profitability and the price of the ASX mining stock.

Mineral Resources

Mineral Resources shares have climbed 213% over the past 12 months despite falling 7% in the past month to $65.86.

Unlike PLS Group and Liontown, Mineral Resources offers greater diversification through its mining services, iron ore, and lithium operations.

The company recently delivered its strongest half-year result on record. Supported by stronger lithium demand and a standout performance from its Onslow Iron project, Mineral Resources reported EBITDA of $1.2 billion and record revenue of $3.1 billion.

The Onslow Iron operation has become a major growth driver and reduces the company’s reliance on lithium alone.

That said, commodity prices remain a key risk. Weakness in either lithium or iron ore markets could affect earnings and investor confidence in this ASX mining stock.

What now for the ASX mining stocks?

The recent pullback highlights how closely lithium stocks remain tied to commodity prices.

Yet the fundamentals behind these businesses remain strong. Production is growing, revenues are increasing, and key projects continue to ramp up.

If lithium prices stabilise or resume their upward trend, these ASX mining stocks could regain momentum. But investors should expect continued volatility as the market weighs strong company performance against an uncertain commodity outlook.

The post These ASX mining stocks soared 185%+, then tumbled. What now? appeared first on The Motley Fool Australia.

More reading

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Motley Fool contributor Marc Van Dinther has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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.

I think some of the best ASX 200 growth shares are businesses that solve important problems for customers.

They may not always have the loudest stories on the market, but they can become more valuable by building better products, winning larger customers, and becoming harder to replace over time.

These are two ASX 200 shares I would consider buying for powerful long-term growth.

TechnologyOne Ltd (ASX: TNE)

TechnologyOne is one of the ASX 200’s best tech shares, in my opinion.

The company provides enterprise software to councils, government departments, universities, and other large organisations. Its products help customers manage things such as finance, payroll, property and rating, student systems, and other core operations.

This is not glamorous software, and that is what I like about it.

Large organisations need systems that work. They need reliability, security, compliance, reporting, and support. Once software is built into daily operations, changing providers can be disruptive and costly.

That gives TechnologyOne a strong position with customers.

I also like the company’s long-running shift to software-as-a-service. Recurring revenue can make the business more predictable, and cloud-based products can support ongoing upgrades and stronger customer relationships.

The valuation is often demanding, so investors need to be sensible about price. But I think TechnologyOne has the rare combination of a focused market, strong execution, and a long runway beyond Australia.

Pro Medicus Ltd (ASX: PME)

Pro Medicus is another ASX 200 share where highly specialised work can be the powerful part.

The company provides medical imaging software through its Visage platform. Hospitals and radiology networks need technology that can handle huge imaging files, support fast workflows, and help doctors access the information they need.

This is a serious job.

Medical imaging is central to diagnosis and treatment. As scans become more detailed and healthcare systems become more digital, software quality becomes increasingly important.

Pro Medicus has built a strong reputation in this specialist area. Its contracts can be large, long term, and strategically important to customers.

What I like is that the company is selling into a market where performance is important. Hospitals and healthcare groups are not buying software because it sounds fashionable. They need tools that improve speed, usability, and reliability in clinical settings.

The risk, again, is valuation. Pro Medicus often trades at a premium because the market already recognises its quality. But I think exceptional software businesses can keep surprising investors if they continue winning important customers and expanding their role inside large markets.

Foolish takeaway

What I like about TechnologyOne and Pro Medicus is that both companies sell software into areas where reliability, speed, and product quality really count.

That gives them a useful kind of growth profile. Their customers are not buying a passing trend, they are using systems that help run important operations, whether that is a council, a university, a hospital, or a radiology network.

If these companies keep improving their products and winning larger customers, I think they can become even more valuable over time. That is why both ASX 200 shares would be on my buy list for long-term growth.

The post 2 ASX 200 shares I’d buy for powerful growth appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Technology One. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Pro Medicus. The Motley Fool Australia has recommended Pro Medicus and Technology One. 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) fought hard and finished the day with a decent gain. The benchmark index rose 0.25% to 8,808.4 points.

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

ASX 200 expected to edge higher

It looks set to be a mildly positive session for Australian investors on Thursday after a mixed night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 9 points or 0.1% higher this morning. In the United States, the Dow Jones was up 0.35%, but the S&P 500 fell 0.1% and the Nasdaq tumbled 0.45%.

Buy Ioneer shares

Ioneer Ltd (ASX: INR) shares could be undervalued according to Bell Potter. In response to news of non-binding letters of intent with South Korean entities, the broker has retained its speculative buy rating on the ASX lithium stock with an improved price target of 40 cents. This is more than double its current share price. It said: “Rhyolite Ridge is strategically important as a fully permitted, near-term and US-located source of lithium and boron supply. Both lithium and boron are USGS-designated critical minerals. […]  Lithium markets have recently strengthened, and we expect continued growth in underlying demand and limited new sources of supply will support lithium chemicals prices over the medium to long term.”

Oil prices sink

It could be a poor session for ASX 200 energy shares Woodside Energy Group Ltd (ASX: WDS) and Santos Ltd (ASX: STO) after oil prices sank again overnight. According to Bloomberg, the WTI crude oil price is down 4.6% to US$69.82 a barrel and the Brent crude oil price is down 5.15% to US$73.11 a barrel. This was driven by reports that tankers are successfully transiting through the Strait of Hormuz.

BHP and Rio Tinto shares on watch

BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO) shares could have a poor session on Thursday after their NYSE-listed shares dropped on Wall Street overnight. BHP shares were down almost 2% and Rio Tinto shares were down over 1.5%. This may have been driven by a pullback in commodity prices. This includes a 2.6% decline in the copper price to US$5.99 per pound.

Gold price tumbles

It could be a difficult session for ASX 200 gold shares Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) on Thursday after the gold price tumbled overnight. According to CNBC, the gold futures price is down 3.35% to US$4,010.3 an ounce. The gold price hit a seven-month low on rising US interest rate hike bets.

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

More reading

• New to ASX shares? Avoid these 3 beginner mistakes
• Are Fortescue shares a strong buy or a value trap?
• Here are the top 10 ASX 200 shares today
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• Why Aurelia Metals, Beach Energy, IAG, and Rio Tinto shares are falling today

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

ASX dividend stocks remain a favourite for income-focused investors looking to generate steady passive income while still participating in long-term capital growth.

That income stream can also act as a useful buffer during periods of share market volatility, which remains a key theme right now as markets continue to fluctuate.

With that in mind, two of the ASX’s most established defensive dividend payers stand out today. They offer reliable cash flows, essential infrastructure exposure, and long track records of shareholder returns.

Let’s take a closer look.

APA Group (ASX: APA)

APA Group is one of Australia’s most important energy infrastructure businesses.

It owns and operates a vast portfolio of gas, electricity, solar, and wind assets across the country, including pipelines, storage facilities, and gas-fired power stations. In fact, APA transports more than half of Australia’s natural gas through its network.

That scale and essential service exposure make APA a classic defensive ASX dividend stock. Demand for energy infrastructure remains relatively stable through economic cycles, and much of APA’s revenue is underpinned by long-term, often inflation-linked contracts.

This structure helps smooth earnings and supports consistent income for shareholders.

APA has paid regular distributions for close to two decades, reflecting the reliability of its infrastructure-based earnings model.

The company typically pays two distributions per year and most recently paid an interim distribution of 27.5 cents per security. It is guiding to a full-year FY26 distribution of 58 cents per security.

At current levels, this equates to a forward yield of around 5.6%, making it an attractive option for income investors seeking stability and yield.

Transurban Group (ASX: TCL)

Transurban Group is another high-quality defensive dividend stock that operates one of the largest urban toll road networks in the world.

The company owns and operates 22 toll road assets across Australia, the US, and Canada, including major motorways, tunnels, and bridges.

Its appeal lies in the essential nature of its assets. Even during economic downturns, people still need to travel for work, freight needs to move, and cities continue to function. That helps ensure relatively stable traffic volumes and resilient cash flow.

The ASX dividend stock also benefits from inflation-linked pricing mechanisms on many of its roads, allowing it to increase tolls annually in line with inflation. That provides a natural hedge in higher price environments.

The company paid an interim distribution of 34 cents per share in February and has guided to a full-year FY26 distribution of 69 cents per share.

At current levels, that represents a forward yield of approximately 4.6%, reinforcing its appeal as a dependable income generator.

Foolish takeaway

Together, APA Group and Transurban offer investors exposure to essential infrastructure assets with long-term contracted or regulated revenue streams.

They may not be the most exciting growth stories on the ASX, but for investors seeking steady income and defensive characteristics, these ASX dividend stocks remain two of the market’s most reliable dividend payers.

The post $5,000 buys 194 shares in these 2 top ASX dividend stocks appeared first on The Motley Fool Australia.

More reading

• How much do I need in my superannuation to get $1000 per week in passive income?
• Want passive income? These 3 ASX dividend stocks could deliver
• Transurban Group declares FY26 distribution; announces AGM date
• How I’d build $50,000 of ASX passive income
• 3 ASX dividend shares to buy and hold for years of income

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

Some ASX shares spend long periods in the market’s bad books.

That can be frustrating for existing shareholders, but it can also create opportunities for patient investors. When expectations are already low, a business does not need perfection to improve the investment case. It may only need steadier execution, better confidence, or a clearer path to growth.

Here are two ASX shares I would consider buying before sentiment improves.

CSL Ltd (ASX: CSL)

CSL is one share I think investors may come back to over time.

The healthcare giant has been through a difficult period, and confidence is lower than it once was. But I still think the core business has plenty of value.

CSL operates in markets that are difficult to enter and require deep expertise, global scale, regulatory experience, and long relationships with healthcare providers. Plasma therapies, vaccines, and other specialist healthcare products are not areas where new competitors can simply arrive and quickly take market share.

What interests me now is the reset in expectations. CSL no longer needs to be viewed as a perfect compounder to be a worthwhile investment. A period of steadier margins, better execution, and clearer earnings growth could be enough to change the conversation.

The business still needs to deliver, of course. But I think the market may be underestimating how valuable CSL’s global healthcare infrastructure remains.

Zip Co Ltd (ASX: ZIP)

Zip is a very different idea. This is a higher-risk growth share, but I think it has become more interesting as the business has matured.

The old buy now, pay later excitement has faded. That may be a good thing. Zip is now being judged more on earnings, credit quality, operating discipline, and whether it can build a sustainable payments business.

I like that shift. A company that can grow while controlling risk has a much better chance of creating long-term value than one chasing volume at any cost. Zip still needs to prove that its model can keep scaling profitably, especially in large markets such as the United States.

But if management keeps improving credit settings, customer quality, and operating leverage, I think the upside could be meaningful.

Zip remains speculative compared with a blue-chip share. Still, I think it is the kind of stock that can move quickly if the market starts to believe the earnings story has changed.

Foolish takeaway

Buying before sentiment improves is uncomfortable by nature.

The easier moment usually comes later, after the share price has already started to recover and the story sounds cleaner. That is why I think shares like CSL and Zip are worth watching closely now.

Both businesses have something to prove, but both also have a credible path to becoming more valuable if execution improves. That is the kind of setup I like when looking for opportunities.

The post Why I’d buy CSL and Zip shares before they recover appeared first on The Motley Fool Australia.

More reading

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• Down 54%: What should I do with my CSL shares now?
• Is this broker right about CSL shares?
• 3 cheap ASX shares that could be hiding in plain sight
• Why A2 Milk, Calix, CSL, and Ioneer shares are charging higher today

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