Category: Stock Market

Experts are always on the lookout for ASX shares that could produce strong returns. We’re going to look at two names that could outperform the S&P/ASX 200 Index (ASX: XJO).

It’s interesting when one analyst likes a business, it’s very intriguing when multiple analysts think an ASX share is a buy.

Below are two of the most potentially exciting stocks with multiple buy ratings.

Goodman Group (ASX: GMG)

Goodman is the largest property business on the ASX – it develops, owns and manages a global portfolio of industrial properties.

According to the Commsec collation of analyst opinions, there are currently 12 buy ratings, two hold ratings and no sell ratings on the business. There are very few ASX shares that have as much analyst backing as Goodman right now.

Goodman is working on a very impressive development pipeline that could significantly add to its underlying value.

In the quarterly update for the three months to 31 March 2026, Goodman said that its work in progress (WIP) was $14.5 billion, with an annualised production rate of around $6 billion. The yield on cost on the current WIP is 8%.

Data centres under construction represent around 73% of WIP, so the business is looking to benefit from that high demand for new data centre facilities.

The rental performance of its property portfolio continues to perform solidly. Its third-quarter update revealed 4.1% like-for-like net property income (NPI) growth.

Guzman Y Gomez Ltd (ASX: GYG)

Another ASX share with strong backing is Guzman Y Gomez, one of Australia’s largest Mexican food businesses.

At 31 March 2026, the business had 242 locations in Australia (of which 155 were franchise restaurants), 23 locations in Singapore and five in Japan – this represented an increase of at least 14% year over year for each market.

The Commsec collation of analyst opinions shows there are currently 10 buy ratings on the business, with two hold ratings and two sell ratings.

The Guzman Y Gomez share price is much cheaper than it was a year ago – it’s 25% lower. Yet, the company continues to grow strongly. In the third quarter of FY26, Australian network sales grew by 19.7% to $320.4 million, and Asian network sales increased 15% to $21.5 million, with those markets delivering combined comparable sales growth of 6.6%.

The ASX share expects the Australian and Asian divisions to deliver year-over-year growth in underlying operating profit (EBITDA) of approximately 29%.

Over time, the company expects to reach 1,000 Australian restaurants and segment underlying EBITDA as a percentage of network sales of 10%. This could increase the value of the business significantly in the coming years.

The post 2 ASX shares highly recommended to buy: Experts appeared first on The Motley Fool Australia.

More reading

• 7 ASX 200 shares given buy ratings this week
• The best AI stocks on the ASX right now
• 10 of the best ASX shares to buy in FY 2027
• Should you buy property or stocks? Here’s what you need to consider
• 2 ASX shares highly recommended to buy: Experts

Motley Fool contributor Tristan Harrison has positions in Guzman Y Gomez. 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.

Something changed in every Australian worker’s pay packet this week.

From 1 July 2026, the tax rate on income between $18,201 and $45,000 dropped from 16% to 15%. This delivered a tax cut to almost every Australian taxpayer regardless of income level.

The cut is applied automatically through your employer’s payroll. You do not need to do anything to receive it.

The actual dollar amount

The size of the benefit depends on how much of your income falls in the $18,201 to $45,000 bracket.

For someone earning exactly $45,000, the benefit from this round of cuts alone is approximately $268 per year, or around $5.15 per week.

For someone earning above $45,000, the benefit is also $268, since the portion of income taxed at the lower rate also receives this benefit.

However, the government’s total tax cuts since 2024 are larger than this single round.

An average earner on $81,245 will receive $1,978 in total tax cuts in FY27 compared to 2023-24 settings, when all three rounds of legislated tax cuts are combined.

That is $38 per week more in take-home pay than two years ago.

From 1 July 2027, the same bracket rate drops again to 14%, adding an additional maximum of $268 per year in tax savings.

The $1,000 instant tax deduction

Alongside the rate cut, a new $1,000 instant tax deduction for work-related expenses starts this financial year.

Previously, workers could only claim up to $300 in work-related expenses without providing receipts.

From FY27, that cap rises to $1,000, meaning workers can reduce their taxable income by up to $1,000 from the first dollar of work expenses without keeping a single receipt.

For a worker paying the 32.5% marginal rate, claiming the full $1,000 deduction is worth approximately $325 in tax savings when they lodge their FY27 tax return.

The deduction does not apply to FY26 returns lodged from 1 July 2026. But it does apply to FY27.

What to do with the extra money

A tax cut of $268 per year is not life-changing.

But small, consistent amounts invested over time compound into meaningful outcomes.

An extra $268 per year invested into the share market, earning the historical ASX 200 average of approximately 8.5% per annum, grows to approximately $13,400 over 20 years.

For investors who want to put their tax saving to work immediately, Commonwealth Bank of Australia (ASX: CBA) remains one of the most widely held ASX shares among Australian retail investors. CBA shares offer a fully franked dividend yield and long-term earnings track record that suits a small, consistent investment approach.

Foolish takeaway for your tax bill

Your tax rate dropped on 1 July 2026.

The cut is small, worth up to $268 this year and $536 from 2027. But combined with the new $1,000 instant tax deduction, FY27 is meaningfully less taxing than FY26 was.

The smartest move is to direct that saving somewhere productive rather than letting it disappear into the household budget unnoticed.

The post Your tax rate just dropped. Here is exactly how much more you will take home from 1 July appeared first on The Motley Fool Australia.

More reading

• Forget CBA shares, I’d buy these ASX bank stocks instead
• ASX financials went from the best sector in FY25 to negative growth in FY26. Here’s what changed
• Owned CBA shares for 10 years? Here’s how much money you’ve made
• 2 world-class ASX 200 shares I want in my portfolio
• How much do I need in superannuation to receive $5,500 per month in passive income?

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 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.

Sometimes the market focuses heavily on short-term problems and misses the long-term potential of a business. That is where broker research can uncover interesting ASX opportunities.

While analysts can be wrong, their work can highlight businesses where the market may be underestimating future growth.

Three ASX shares that have recently caught my attention are named below.

ResMed Inc. (ASX: RMD)

The first ASX share I would consider buying is one where the market appears to have become much more cautious.

ResMed shares are trading around $31.44, and Morgans believes the recent weakness has created an attractive opportunity.

The concerns are understandable. Investors have been weighing the potential impact of GLP-1 therapies, the possibility of Philips returning to the US PAP market, and broader weakness across healthcare shares.

However, I think the bigger picture remains compelling. ResMed operates in a healthcare market with a huge long-term opportunity. Sleep apnoea and related breathing disorders affect a large number of people globally, and many remain undiagnosed or untreated. That creates a significant runway for growth.

I also like the direction of the business beyond traditional devices. Connected technology, digital health solutions, and software can help improve patient outcomes while making treatment more accessible.

Morgans highlighted that ResMed has de-rated to around 16 times forward earnings, close to its lowest valuation since the post-GFC period, while consensus still expects double-digit earnings growth. For this reason, it has a buy recommendation and $41.72 target price on its shares.

The risks are real, but I think the market may be underestimating the quality of the underlying business.

Flight Centre Travel Group Ltd (ASX: FLT)

The second opportunity comes from a business that has been caught up in broader travel uncertainty.

Flight Centre shares have struggled as investors assess the impact of geopolitical issues and weaker operating conditions.

But I think the long-term travel story remains attractive. People continue to value experiences, holidays, and international travel. When confidence improves, travel demand can recover quickly.

What interests me about Flight Centre is the strength of its position. The company has built a global travel network, strong brand recognition, and a valuable customer base. It also has a strong balance sheet.

Morgans believes the recent weakness creates an opportunity, highlighting the company’s financial strength and the potential for a stronger recovery in the second half of FY27. It has a buy recommendation and $14.80 target price on the shares.

I think the key is patience. The recovery may take time, but if travel conditions normalise, earnings and the share price could respond positively.

Sigma Healthcare Ltd (ASX: SIG)

The final ASX share I would look at is Chemist Warehouse owner Sigma Healthcare.

Ord Minnett believes the company’s UK expansion opportunity could become significant over time. The initial rollout is still small, but the market itself is large and fragmented, creating an opportunity for a proven retail model to expand.

What I find interesting is the possibility of taking existing capabilities into a new market. Sigma has access to pharmacy infrastructure, retail experience, and the backing of one of Australia’s strongest consumer brands through Chemist Warehouse.

There is execution risk, as with any international expansion. But I think the potential upside comes from the ability to replicate a successful model in a much larger market.

Ord Minnett recently placed a buy recommendation and $3.40 target price on the shares. I think this is a fair valuation and shows potential for good returns from its current share price of around $2.82.

Foolish takeaway

I think these three ASX shares are interesting because investors are currently looking beyond the headlines and asking whether the long-term opportunity has changed.

In my view, the businesses themselves still have attractive qualities. The challenge for investors is having the patience to wait for those strengths to become more visible.

The post Why I want to own these ASX shares brokers rate as buys appeared first on The Motley Fool Australia.

More reading

• How to tell if an ASX share is cheap or a value trap
• How should I invest my money in FY27?
• 2 ASX healthcare shares crashing, now bouncing: buy, hold or sell?
• Buy, hold, sell: Dexus, Resmed, BHP shares
• These are the 10 most shorted ASX shares

Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ResMed. The Motley Fool Australia has positions in and has recommended ResMed. The Motley Fool Australia has recommended Flight Centre Travel Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Yesterday, a2 Milk Co Ltd (ASX: A2M) released its FY26 results.

As Laura Stewart reported yesterday, the company reported preliminary FY26 results, featuring revenue up more than 12% to about $1.97 billion. 

This was despite China infant milk formula (IMF) sales declining due to supply chain disruptions.

Key results included: 

• FY26 revenue of approximately $1.97 billion, up over 12% year-over-year
• China label IMF sales down around 14% on FY25 after supply chain issues in 4Q26
• EBITDA margin expected at the high end of 14.0% to 14.5% guidance
• NPAT anticipated to be slightly up on FY25, with underlying NPAT also rising

Following the results, A2 Milk shares fell over 4%. 

What is Bell Potter’s updated outlook on A2 Milk shares?

Following the results, the team at Bell Potter provided updated guidance on A2 Milk shares. 

Bell Potter views the update as broadly positive, with revenue expected to land within guidance at $1.97 billion and EBITDA margins at the top end of the guided range, resulting in EBITDA of around $285 million, broadly in line with expectations. 

Profit guidance has improved, with NPAT now expected to be slightly higher year-on-year and operating cash conversion upgraded to around 70%, reflecting stronger cash generation than previously guided.

The key disappointment was the weaker-than-expected performance of China label infant formula, with revenue expected to decline 14% year-on-year and second-half sales falling more than 40% after adjusting for foreign exchange, significantly below Bell Potter’s forecasts. 

While product supply issues have largely been resolved and management is now focused on marketing initiatives to win back former customers and attract new users, Bell Potter believes the weakness suggests the company may need to rebalance its China sales mix in FY27.

As a result, Bell Potter has modestly increased its FY26 earnings forecast but reduced FY27 and FY28 estimates to reflect higher expected brand investment and a slower recovery in China. 

NPAT forecasts have been revised up 3% for FY26, but down 6% for FY27 and down 5% for FY28.

Hold recommendation maintained 

A2 Milk shares have experienced volatility in 2026, and are currently down nearly 20% year to date. 

Yesterday, A2 Milk shares closed at $7.37 per share. 

Bell Potter has maintained its hold recommendation and share price target of $6.90 on the company. 

This indicates a 6% downside from current levels. 

The post What is Bell Potter saying about A2 Milk shares after its results? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• A2 Milk shares jump again as China worries start to ease
• a2 Milk Company posts double digit FY26 revenue growth despite China supply setback
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• What is Bell Potter’s updated view on Telstra shares?

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.

It has been a tough 2026 so far for ASX 300 stock Elders Ltd (ASX: ELD). 

Elders is a leading supplier of fertiliser, agricultural chemicals and animal health products to rural and regional Australia. It has strong agency positions in livestock, wool and real estate.

Year to date, its share price has fallen 21%.

For comparison, the S&P/ASX 300 (ASX:XKO) index is up 0.5% in the same period. 

However after falling in 2026, the team at Bell Potter is optimistic it can recover in the next 12 months. 

Here is what’s behind the bullish view. 

Mixed conditions

Bell Potter notes that conditions for Elders have been mixed since the last reporting period. 

Strong livestock activity and significantly improved soil moisture across much of Australia’s cropping regions have been partly offset by lower crop input prices, particularly urea.

Livestock markets remained supportive during the third quarter, with higher cattle slaughter and yardings, stronger prices for cattle, lamb, mutton, and wool, and increased wool volumes, providing a positive backdrop for Elders’ agency business.

Cropping conditions have improved considerably after above-average rainfall across most of the Australian wheat belt, especially in southeastern Australia. 

Soil moisture and crop health indicators have strengthened to their highest positive deviation in the past 14 years, although drier conditions are still expected in the second half of 2026.

On the downside, crop input prices have continued to soften. 

Urea prices have fallen 47% from their peak and are now below pre-conflict levels, while glyphosate prices are down around 18%, which may reduce the value of Elders’ crop input sales despite benefiting farmers through lower costs.

Buy recommendation for ASX 300 stock 

Following share price weakness, the team at Bell Potter now views this ASX 300 stock as a buy-low candidate. 

Bell Potter has a buy recommendation along with a price target of $6.45 on the company. 

From yesterday’s closing price of $5.38, this indicates an upside potential of 20%. 

Our Buy rating unchanged. The market is pricing ELD for the effects of an El Nino, with the stock down -27% since the BOM announced the El Nino watch and the short interest >9%. 

While the intensity of El Nino is not anticipated until 2HCY26e, patterns over the major winter cropping selling window appear to have been broadly positive and livestock agency trends have remained favourable, to a degree derisking the FY26e outlook.

The post Is this ASX 300 stock a buy-low candidate after crashing 20% this year? appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• Elders confirms Killara Feedlot sale completion for June 2026
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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 recommended Elders. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

I think the best exchange-traded funds (ETFs) are those that can give investors access to powerful long-term trends.

They provide exposure to areas of the global economy that can keep evolving over many years.

With that in mind, here are two Vanguard ETFs that I think are worth considering.

Vanguard FTSE Asia Ex-Japan Shares Index ETF (ASX: VAE)

The first ETF I would consider is one that gives investors exposure to a region undergoing enormous change.

It provides access to large and mid-sized companies across Asian markets outside Japan.

What interests me about Asia is the scale of its economic development. Millions (even billions) of people across the region are entering higher levels of consumption, adopting new technologies, and accessing services that have become common in developed markets.

That creates opportunities for businesses involved in areas such as financial services, consumer products, technology, and infrastructure.

I think the VAE ETF offers a different type of growth exposure compared with many other global ETFs. It gives investors access to companies benefiting from changing lifestyles and rising economic participation across some of the world’s most populous markets.

Of course, Asian markets can experience periods of uncertainty. Different countries have different economic conditions, currencies, and regulatory environments.

But for long-term investors, I think the VAE ETF provides exposure to a region with significant room to continue developing.

Vanguard Global Technology Index ETF (ASX: VTEK)

The second Vanguard ETF I would look at is focused on one of the biggest forces reshaping the global economy.

It provides exposure to companies involved in the technology sector, including businesses developing the software, hardware, and digital infrastructure used around the world.

I think the interesting part of technology investing is how many industries now depend on it. Technology is influencing healthcare, finance, manufacturing, education, transport, and everyday communication. The companies that create these tools can become deeply embedded into how other businesses operate.

Artificial intelligence is accelerating demand for chips, cloud infrastructure, software platforms, and the digital tools businesses use to automate work. While it is still early and individual winners are difficult to predict, I think owning a basket of global technology companies provides a way to participate in that long-term opportunity.

The VTEK ETF can experience larger price movements than broader market ETFs, particularly when investors change their expectations around technology companies. But for investors with patience, I think exposure to businesses driving innovation can be a powerful addition.

Foolish takeaway

I think these Vanguard ETFs appeal for different reasons.

One provides exposure to Asia’s ongoing development and the other captures the companies shaping technological change.

The common thread is that both funds give investors a way to own businesses benefiting from long-term economic progress.

That is why I think these ETFs could be valuable long-term holdings for investors who want simplicity without sacrificing exposure to global opportunities.

The post Why I think these Vanguard ETFs are strong buys appeared first on The Motley Fool Australia.

More reading

• 3 Vanguard ETFs to build long-term wealth
• Why I’d put $2,500 into these top Vanguard ETFs
• 3 ASX ETFs I’d buy if I wanted easy global investing

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 no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX dividend shares are a straightforward way for Australian investors to earn an easy passive income.

The trickiest part is working out what ASX shares pay what, and the best ones to buy.

Here are two of my top high-yield ASX dividend shares. And they all pay a yield of 9% or more.

IPH Ltd (ASX: IPH)

IPH is an intellectual property (IP) service provider that operates through a network of brands and across ten jurisdictions in 25 countries. Its services cover everything from patent filing and trademarks to prosecution, portfolio management, and enforcement. Its huge scale makes it the largest IP services provider in the Asia-Pacific region.

The ASX dividend company consistently generates a strong cash flow from its operations. In fact, IPH reported cash conversion of 101% in its first-half FY26 results.

It is this strong cash flow that has enabled the company to pay a reliable and constantly growing dividend payment to its shareholders.

IPH’s most recent interim dividend payment was 10 cents per share in March, up 11.8% on the prior period. 

The ASX share is expected to pay a fully-franked dividend of 38 cents in FY26. This translates to a forward dividend yield of around 9.6% at IPH’s $3.95 share price, at the time of writing.

Metrics Income Opportunities Trust (ASX: MOT)

The MOT is a listed investment trust (LIT) with a portfolio of private credit and related opportunities, which can give investors direct exposure to private credit investments. This is an increasingly popular asset class for income-focused investors.

The Trust said its investment objective is to provide monthly cash income, preserve investor capital, and manage investment risks. It also seeks to provide upside potential through investments in private credit and other assets. These “other assets” include warrants, options, preference shares, and equity.

The Trust targets a cash yield of 7% per year. It has a total target return of 8% to 10% per year, net of fees and expenses. 

MOT pays its dividend distributions on a monthly basis. The Trust also has a distribution reinvestment plan (DRP), which allows its unitholders to reinvest monthly income distributions.

The ASX dividend share’s most recent payout to shareholders is a 2.65 cent dividend, with 3.02% franking, paid today (8th July). The Trust paid out 1.16 cents in June, 1.22 cents in May, and 1.09 cents in April. 

Over the past 12 months, Metrics Income Opportunities Trust has paid out 12 dividends totalling 15.39 cents per share either unfranked or with partial franking credits. This gives the LIT a dividend yield of around 9.5% using its $1.65 trading price, at the time of writing.

The post 2 ASX dividend shares that yield 9% (or even higher) appeared first on The Motley Fool Australia.

More reading

• How much do I need in my superannuation to get $6,000 per month in passive income?
• How much do I need in superannuation to receive $5,500 per month in passive income?
• These ASX shares could generate $5,000 per year in passive income
• 2 ASX dividend shares with 10% yields and 25% upside potential
• 3 ASX dividend shares yielding 9% (or even more)

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

The team at Morgans have updated their outlook on three well known ASX listed companies this week. 

Two have received hold recommendations while one has drawn a clear positive outlook. 

Here is the latest from the broker. 

ASX Ltd (ASX: ASX)

Morgans said that ASX has recently released its monthly trading activity report for June 2026. 

It was a mixed trading month overall for ASX, in our view, with higher cash markets activity (+54% volume on pcp), a downturn in raisings and stronger average daily futures/options contracts in June. Our FY27-FY28 EPS forecasts increased by ~+2% factoring in the recent trading activity. Our price target is increased to A$53.90 (from A$51.50). HOLD maintained.

ASX shares closed trading at $53.49 yesterday. 

PEXA Group Ltd (ASX: PXA)

PEXA Group has been drawing positive ratings from experts recently. 

However Morgans appears less optimistic. 

PEXA recently responded to a draft decision by the NSW pricing regulator (The Independent Pricing and Regulatory Tribunal) that would cut the fees it can charge for its dominant electronic property settlement platform by about 20% from July 2027. 

This would potentially reduce annual revenue by around $70 million.

Commenting on the release, Morgans said: 

The headline read-through from IPART’s draft report on proposed pricing changes for PXA is an anticipated reduction in revenue of A$70m (~20%) in year 1. We think a 20% hit to exchange revenue was much more punitive than consensus market expectations. Applying the cut in one year, rather than phasing it in over multiple years, adds to the disappointment. Our price target is reduced to A$9.35 (from A$14.23).

We Move PXA to HOLD. Proposed outcomes here are worse than expected, and this creates significant uncertainty around PXA’s future profit profile and its overall operating environment.

PEXA shares closed trading yesterday at $8.44 per share. 

Qantas Airways Ltd (ASX: QAN)

After struggling earlier this year due to global conflict and soaring oil prices, Morgans now sees a rebound in store for Qantas shares. 

The broker said Qantas’s post-COVID balance sheet strengthening and cost discipline have positioned it to absorb the current fuel cost shock and consumer softness with genuine resilience. 

We forecast 2H26 PBT to be down on pcp as fuel and economic conditions bite, with FY27 forecast to deliver a moderate uplift. We view FY27 as a transition year for Qantas with higher growth expected from FY28 onwards as oil prices, refining margins and demand normalise. Structural growth drivers (fleet renewal, Project Sunrise, Loyalty scaling toward FY30 target) remain intact.

Morgans has initiated coverage on Qantas shares with an accumulate rating and $11.50 price target. 

Qantas shares closed at $10.60 yesterday. 

The post Buy, hold or sell, PEXA, ASX and Qantas shares appeared first on The Motley Fool Australia.

More reading

• How much do I need in my superannuation to get $6,000 per month in passive income?
• 2 ASX 200 stocks that could rise 31% and 121%
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX 200 shares today
• Three ASX 200 companies Macquarie says are a buy right now

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

Telstra Group Ltd (ASX: TLS) is one of those ASX dividend shares that many investors already know well.

But for investors thinking about passive income, does Telstra still have the right mix of cash flow, reliability, and yield to deserve a place in a long-term income portfolio?

In my view, the answer is yes.

A business people keep using

The reason I like Telstra for income is not just that it pays dividends. It is that the business sits behind a huge amount of daily activity.

Every time people use mobile data, stream content, run a business from a phone, process digital payments, work remotely, check maps, use apps, or stay connected while travelling, telecommunications infrastructure is doing part of the work.

That gives Telstra a useful role in the economy. It is not selling a product customers buy once and forget. It is providing connectivity that people and businesses keep using every day.

That does not make Telstra immune from competition. Mobile plans, customer churn, network investment, satellite internet, and regulation are all worth keeping an eye on. But I think the underlying demand for reliable connectivity is about as durable as it gets.

The yield looks attractive

Telstra shares are currently trading around $5.07.

According to CommSec consensus estimates, the company is expected to pay dividends per share of 21 cents in FY26 and 21.5 cents in FY27.

At the current share price, that implies forward dividend yields of around 4.1% and 4.2%.

It may not offer the highest yield available on the ASX, but I think income investors should be careful about chasing a bigger number. A slightly lower yield from a more dependable business can be far more useful than a larger yield that later gets cut.

A $10,000 investment at $5.07 per share would buy about 1,972 shares. Based on the FY26 forecast dividend, that holding could generate roughly $414 in annual dividend income. Based on the FY27 forecast, the income would be around $424.

That is before tax and any franking credits. That looks attractive to me, especially for a business with defensive characteristics.

Why I’d buy

I think Telstra’s appeal comes from the combination of everyday demand and improving focus.

The company has spent years simplifying itself, investing in its networks, and leaning into its strongest asset: connectivity. That may not sound exciting, but I think it can be valuable for passive income investors.

Telstra’s mobile network remains a major competitive advantage. Customers may look for value, but reliability, coverage, and speed still count. For households and businesses, losing connection is more than an inconvenience.

That gives Telstra pricing power that many companies would like to have.

There are risks. Capital expenditure is ongoing, competition remains active, and dividend growth is unlikely to be dramatic every year.

But I think Telstra offers something useful in an uncertain economic environment: a business built around a service that remains essential even when consumers are watching their budgets.

Foolish takeaway

I think Telstra shares are a buy for passive income.

The forecast yield is attractive, but the bigger appeal is the nature of the business behind it. Connectivity is now woven into work, payments, entertainment, travel, security, and everyday communication.

That gives Telstra a defensive quality I value.

The shares may not deliver explosive growth, and investors should still watch competition and network spending. But for those wanting ASX passive income from a business with steady demand, I think Telstra looks like a strong option to buy today.

The post Are Telstra shares a buy for passive income? appeared first on The Motley Fool Australia.

More reading

• How much do I need in my superannuation to get $6,000 per month in passive income?
• How much is needed in superannuation to target a $70,000 annual passive income?
• 5 of the best investments on the ASX right now to complement your superannuation
• If I invest $8,000 in Telstra shares, how much passive income will I receive in 2027?
• How much do I need in superannuation to receive $5,500 per month in passive income?

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 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.

On Tuesday, the S&P/ASX 200 Index (ASX: XJO) was out of form and dropped into the red. The benchmark index fell 0.3% to 8,803.9 points.

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

ASX 200 to open slightly lower

The Australian share market looks set for subdued session on Wednesday following a poor night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 3 points lower. In late trade in the United States, the Dow Jones is down 0.25%, the S&P 500 is down 0.3%, and the Nasdaq has dropped 0.75%.

Oil prices race higher

ASX 200 energy shares Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a good day of trade on Wednesday after oil prices charged higher overnight. According to Bloomberg, the WTI crude oil price is up 2.9% to US$70.53 a barrel and the Brent crude oil price is up 3.1% to US$74.22 a barrel. This followed reports of attacks on tankers in the Strait of Hormuz.

Buy Netwealth shares

The team at Bell Potter continues to see value in Netwealth Group Ltd (ASX: NWL) shares. This morning, in response to a quarterly update, the broker has retained its buy rating and $30.00 price target on the investment platform provider’s shares. It said: “Our Buy rating is unchanged, and we upgrade our net flow estimates +8% FY27-29. Building in margin guidance prompts us to downgrade EPS -7%/-4% and we leave headroom on the FUA target. NWL is looking to replicate EPS growth. The mandate win is the first example of a catalyst, independent of any potential vendor attrition.”

Gold price softens

ASX 200 gold shares including Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) could have a soft session on Wednesday after the gold price softened overnight. According to CNBC, the gold futures price is down 0.35% to US$4,153 an ounce. Rising oil prices have sparked fears of rising inflation and interest rate hikes.

A2 Milk shares go ex-dividend

A2 Milk Company Ltd (ASX: A2M) shares are going ex-dividend this morning and could trade lower. Last month, the infant formula company declared a fully franked special dividend of 28.8 cents per share. Based on its last close price of $7.37, this represents an attractive 3.9% dividend yield. Eligible shareholders can look forward to receiving this dividend later this month on 24 July.

The post 5 things to watch on the ASX 200 on Wednesday 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 Netwealth Group. The Motley Fool Australia has positions in and has recommended Netwealth Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.