Category: Stock Market

The Mineral Resources Ltd (ASX: MIN) share price is in focus today after the company upgraded FY26 volume guidance across several key mining operations and reported a strong 92% jump in average lithium prices for the quarter.

What did Mineral Resources report?

• Onslow Iron shipped 7.2Mt in Q3 FY26, with volume guidance upgraded for FY26 to 17.7–19.4M wmt.
• Mining Services FY26 production guidance lifted to 320–330Mt (from 305–325Mt).
• Quarterly attributable spodumene concentrate production (Wodgina & Mt Marion) was 127k dmt SC6, with sales of 115k dmt SC6 at an average price of US$2,105/dmt (up 92% quarter-on-quarter).
• Liquidity increased to $1.8 billion, while net debt was lowered to circa $4.5 billion (from $4.9 billion).
• FY26 lithium volume guidance lifted at Wodgina (270–290k dmt SC6) and Mt Marion (210–230k dmt SC6).
• No disruption to fuel supply or operations amid geopolitical tensions; cost guidance maintained across divisions.

What else do investors need to know?

The March quarter saw some interruptions due to tropical cyclones, but key infrastructure across Onslow Iron remained undamaged, with production quickly returning to normal. Mining Services renewed two contracts and completed another, while the Lamb Creek iron ore project achieved its first ore on ship and continues to ramp up as planned.

The company strengthened its capital structure by issuing US$1.3 billion in new Senior Unsecured Notes post quarter-end, primarily to refinance higher-interest notes and further lower existing debt. MinRes’ liquidity position is healthy, with nearly $1 billion in cash and an unused $800 million revolving credit facility at quarter’s end.

What’s next for Mineral Resources?

Mineral Resources is sticking to its strategy of expanding production across both iron ore and lithium, with upgraded FY26 targets reflecting strong operational momentum. Despite higher fuel costs expected in the June quarter, cost guidance has been maintained, and the company continues to pass increased fuel expenses through to customers for its Mining Services division.

The group is progressing project developments, including exploration at Onslow Iron and lithium growth options like the potential restart at Bald Hill and a possible flotation plant at Mt Marion to improve recoveries. Preparations are also underway for further energy exploration drilling in the Perth and Carnarvon Basins.

Mineral Resources share price snapshot

Over the past 12 months, Mineral Resources shares have risen 201%, outperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 7% over the same period.

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The post Mineral Resources upgrades FY26 volume guidance and posts robust lithium prices appeared first on The Motley Fool Australia.

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Motley Fool contributor Laura Stewart has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

The Champion Iron Ltd (ASX: CIA) share price is in focus after the company reported Q4 FY26 production of 3.4 million wet metric tonnes, up 8% year-on-year, and a strong cash position of $296.8 million.

What did Champion Iron report?

• Quarterly production of 3.4 million wet metric tonnes (wmt) of 66.2% Fe concentrate, up 8% from Q4 FY25
• Sales of 3.5 million dry metric tonnes (dmt), stable year-on-year despite rail and weather disruptions
• C1 cash cost at $82.7/dmt, up 12% quarter-over-quarter and 3% year-on-year
• Cash balance of $296.8 million as at 31 March 2026, up $51.7 million since December
• Available liquidity of $812.4 million, supporting growth initiatives

What else do investors need to know?

Champion Iron advanced commissioning of its DRPF (Direct Reduction Pellet Feed) project during the quarter, with initial production tests completed in March. The first commercially sellable DRPF product is expected by the end of calendar Q2 2026. The company also successfully closed the acquisition of Norwegian iron ore producer Rana Gruber in April, adding 1.8 million dmt of high-grade iron ore to its annual output.

Despite disruptions caused by a third-party train derailment and harsh winter conditions, Champion kept production and sales broadly stable. Inventory at Bloom Lake and the port reduced from 1.5 million wmt to 1.3 million wmt, supporting ongoing sales and logistics. Mining performance at Bloom Lake also improved, with 20.9 million wmt of material mined in the quarter, up 3% on last year.

What did Champion Iron management say?

CEO David Cataford said:

Our team remains focused on efficiency and disciplined execution as we advance initiatives to optimise operations, strengthen sales performance and progress our growth projects. Concurrently, our DRPF project remains on schedule, with first sellable commercial production expected in the second quarter of the calendar year. In parallel, the recent closing of the Rana Gruber ASA transaction marks a significant milestone for Champion. It reinforces our leadership as a low carbon producer of high-purity iron ore while expanding our cash flows, positioning us to capitalise on opportunities to maximise long-term value for our shareholders and the communities in which we operate.

What’s next for Champion Iron?

Investors can look forward to the commencement of commercial DRPF production by the end of calendar Q2 2026, expanding the company’s product range and access to higher-value markets. With the full integration of Rana Gruber and continued investment in growth, Champion is aiming to boost cash flows and further cement its leadership in high-purity, low-carbon iron ore.

The company is also advancing feasibility work at the Kami Project, with a definitive study expected in the second half of 2026. Champion’s strong cash and liquidity positions support these ongoing strategic projects and provide flexibility in a volatile iron ore market.

Champion Iron share price snapshot

Over the past 12 months, Champion Iron shares have risen 8%, slightly outperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 7% over the same period.

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The post Champion Iron announces production gains and new growth projects appeared first on The Motley Fool Australia.

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Motley Fool contributor Laura Stewart has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

The South32 Ltd (ASX: S32) share price is in focus today after the company delivered an update on its flagship Hermosa project. Key outcomes include a 52% boost to the Taylor deposit’s Ore Reserve and an increased project operating life of around 33 years.

What did South32 report?

• Taylor Ore Reserve increased 52% to 99 million tonnes, driven by successful infill drilling
• Initial operating life for Taylor extended by 5 years to approximately 33 years
• Expected steady-state annual EBITDA of ~US$650 million, with potential to rise to ~US$800 million at spot prices
• Growth capital expenditure for Taylor revised up to ~US$3.3 billion, reflecting scope changes and inflation
• Peake copper resource estimate up 32% to 33Mt, supporting longer mine life and future copper production potential
• First production from Taylor now expected in the second half of FY28, with nameplate capacity by FY31

What else do investors need to know?

Recent work confirms Taylor remains a high-quality, long-life zinc-lead-silver asset, with the deposit open for further growth. Operational flexibility will improve, as first ore is expected via the Clark decline before shaft commissioning, increasing ore handling capacity by 25%.

The nearby Peake deposit is shaping up as a future copper development, underpinned by a significant uplift in its Mineral Resource. South32’s battery-grade manganese Clark deposit has also attained US government support, with federal permitting for Hermosa’s components progressing as planned.

What did South32 management say?

Chief Executive Officer Graham Kerr said:

Our investment in Hermosa has established a regional-scale project with the potential to produce critical minerals over several decades, with Taylor as the first stage. Our updated assessment of project execution has reaffirmed Taylor’s potential to deliver our shareholders attractive returns from its long-life, low-cost production of zinc, silver and lead.

What’s next for South32?

Looking ahead, South32 expects construction of the Hermosa project’s key infrastructure, including Taylor’s shafts and processing plant, to be complete between FY27 and FY28. The path to nameplate production is set for FY31, slightly later than previously planned, due largely to contractor challenges and higher input costs.

The company is also focusing on integrating Peake’s copper with Taylor’s mine plan and advancing the Clark manganese project, aiming to support US critical minerals supply for decades. Ongoing drilling and exploration at Hermosa’s wider tenement could unlock further value in future updates.

South32 share price snapshot

Over the past 12 months, South32 shares have risen 55%, outperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 7% over the same period.

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The post South32 Hermosa project boosts reserves and mine life in FY26 update appeared first on The Motley Fool Australia.

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• Champion Iron announces production gains and new growth projects
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Motley Fool contributor Laura Stewart has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

Karoon Energy Ltd (ASX: KAR) and Santos Ltd (ASX: STO) shares have been standout performers in 2026.

Closing at $2.14 apiece on Wednesday, Karoon Energy shares are now up 39% year to date.

And after ending yesterday at $7.77 each, Santos shares have gained 26% so far in 2026.

To put that performance into some better context, the S&P/ASX 200 Index (ASX: XJO) is down 0.3% this calendar year.

Atop those capital gains, Santos also paid out a 14.5-cent per share unfranked interim dividend on 25 March. Santos stock trades on a partly franked trailing dividend yield of 4.5%.

And Karoon Energy paid its fully-franked 3.1 cent per share final dividend on 31 March. Karoon Energy shares trade on a partly franked 2.6% trailing dividend yield.

But after this strong outperformance, Medallion Financial Group’s Stuart Bromley believes investors would do well to take profits on these two ASX 200 energy stocks (courtesy of The Bull).

Here’s why.

Time to sell Santos shares?

“Santos is a global energy company,” Bromley said. “It has operations across Australia, Papua New Guinea, Timor-Leste and the United States.”

Looking at the company’s calendar year 2025 results, he noted:

Total revenue from ordinary activities fell by 8% in full year 2025 when compared to the prior corresponding period. The fall in revenue was due to lower realised prices. Net profit after tax was down 33%.

As for 2026, Bromley said, “The share price has risen from $5.92 on January 7 to trade at $7.61 on April 23.”

Which leads to his sell recommendation on Santos shares.

“We would be inclined to lock in gains given volatile and uncertain energy prices emanating from the conflict in the Middle East,” Bromley concluded.

Time to lock in profits on Karoon Energy shares?

Atop from recommending taking profits on Santos shares, Bromley also has a sell recommendation on Karoon Energy shares.

“Karoon is an oil and gas explorer and producer,” he said. “It has assets in Australia, the United States and Brazil.”

As for Karoon Energy’s 2025 results, Bromley noted, “Revenue from ordinary activities was down 19% in full year 2025 when compared to the prior corresponding period. Net profit after tax was down 2%.”

Bromley’s sell recommendation is based on similar logic to his concerns over Santos’ rapid year-to-date share price gains.

Commenting on Karoon Energy, he concluded:

The shares have risen from $1.54 on February 27 to trade at $2.16 on April 23. In our view, Karoon has benefited from increasing crude oil prices since the conflict in the Middle East started on February 28.

We believe these sorts of opportunities should be taken and we have locked in profits on Karoon.

Trading at US$111 per barrel on Wednesday, the Brent crude oil price has surged more than 53% since the start of the Iran war at the end of February.

The post Sell alert! Why this expert is calling time on Karoon Energy and Santos shares appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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 have $5,000 available to invest in May, the ASX 200 still offers plenty of quality to choose from.

The key is not trying to find the cheapest share on the market. It is finding businesses with durable advantages, long-term growth drivers, and the ability to keep compounding earnings over time.

Here are three ASX 200 shares that analysts think investors should consider buying with $5,000:

Aristocrat Leisure Ltd (ASX: ALL)

The first ASX 200 share that could be a strong option is Aristocrat Leisure.

Aristocrat is a global gaming technology company with exposure to land-based gaming machines, digital games, and online real-money gaming.

The business has a strong track record of developing successful gaming content. In this industry, high-quality content matters because it drives player engagement and supports recurring demand from venue operators.

Aristocrat’s digital operations also give it another growth channel. While the land-based business remains important, digital gaming and real money gaming expands the company’s addressable market and gives it exposure to changing entertainment habits.

With a strong content engine and multiple growth avenues, Aristocrat arguably remains one of the more compelling growth shares in the ASX 200.

Morgans recently put a buy rating and $63.00 price target on its shares.

CAR Group Ltd (ASX: CAR)

Another ASX 200 share worth looking at in May is CAR Group.

CAR Group owns digital vehicle marketplaces across Australia and international markets, including carsales in Australia. These platforms connect buyers, sellers, dealers, and advertisers.

Its strength comes from network effects. Buyers go where the listings are, while sellers and dealers want to be where the buyers are. That creates a strong competitive position that is difficult to replicate.

The company also has opportunities beyond Australia. Its international businesses give it exposure to larger markets and provide additional growth avenues over time.

With its platform model, pricing power, and global expansion opportunities, CAR Group offers exposure to a high-quality digital marketplace with room to keep compounding.

Morgans currently has a buy rating and $33.50 price target on its shares.

ResMed Inc (ASX: RMD)

A third ASX 200 share that could be a top pick is ResMed.

ResMed is a global leader in sleep apnoea treatment and respiratory care. Its devices, masks, and connected software help patients manage sleep-related breathing disorders.

The long-term opportunity remains attractive. Sleep apnoea is still underdiagnosed globally, and awareness continues to improve as more people understand the health risks linked to poor sleep.

ResMed also benefits from its connected-care platform. Devices linked to software can improve patient monitoring and support better adherence, making the company more than just a hardware manufacturer.

With a large market opportunity and a strong position in respiratory health, ResMed remains well placed to keep growing over the long term.

Morgans recently upgraded ResMed’s shares to a buy rating with a $47.73 price target.

The post 3 amazing ASX 200 shares to buy with $5,000 in May appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in ResMed. 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 CAR Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX dividend shares that regularly increase their passive income payments are very attractive because of how they can make us increasingly cash-rich and help offset any inflation effects.

While dividend growth is not guaranteed, I like looking at businesses with a good track record of delivering regular growth because it seems like they’re committed to dividend increases.

Let’s look at two of the most compelling ideas for consistent payout growth.

APA Group (ASX: APA)

APA has the second-longest payout growth streak on the ASX. It has increased its distribution every year for the last 20 years.

It funds its impressive distribution from the cash flow of its portfolio of energy assets across Australia. The most important asset is a network of gas pipelines – the business transports half of the country’s usage.

APA has numerous other assets including gas-powered energy generation, electricity transmission, wind farms, solar farms and gas processing and storage.

Some of the ASX dividend share’s latest announced assets that it’s working on include a new power station in Queensland to help provide firming capacity and more pipelines to supply the southern market.

Energy is a very important element of the Australian economy, so I’d describe APA as having defensive earnings. It’s particularly helpful that a vast majority of APA’s revenue is linked to inflation, giving it earnings protection during times like this.

It’s expecting to increase its distribution to 58 cents per security in FY26, which translates into a distribution yield of 5.7%.

Medibank Private Ltd (ASX: MPL)

Medibank is the leading private health insurer in Australia, with its Medibank and ahm brands, as well as a growing non-insurance division.

That non-insurance segment is becoming a larger contributor to the business – in the FY26 first-half, health insurance operating profit rose 3.5% to $361.5 million and Medibank Health operating profit jumped 28.5% to $48.3 million.

A core driver of the company’s financials is its growing subscriber base, giving it more scale each year.

In the HY26 period, net resident policyholder growth was 38,300 (or 1.9%) and net non-resident policy unit growth was 1,500 (or 0.4%). While that’s not huge growth, it represents ongoing progress for the ASX dividend share and helps justify a dividend increase.

Pleasingly, HY26 group operating profit rose 6% to $381.7 million, though cybercrime impacts continues to be an overhang on the bottom line.

In terms of the dividend, Medibank was able to hike its interim dividend per share by 6.4% to 8.3 cents, representing a dividend payout ratio of 76.8%. Aside from 2020, the business has increased its dividend per share every year since it listed more than a decade ago.

Its latest two dividends equate to a grossed-up dividend yield of 5.7%, including franking credits, at the time of writing.

The post These ASX dividend shares keep giving investors a pay rise appeared first on The Motley Fool Australia.

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

The S&P/ASX 200 Index (ASX: XJO) is a wonderful place to find passive income opportunities. There’s a great ASX 200 dividend stock I want to highlight for incredibly reliable and consistent dividends. That name is Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), an investment house.

The business is one of the oldest on the ASX, it has been listed for more than 120 years.

It has a great history – the business started as a pharmacy business, but this has expanded into numerous sectors and asset classes through numerous investments.

Incredibly reliable ASX 200 dividend stock

The business pays for its dividend from the net cash flow from its investments (NCFI), after paying for its own operating expenses.

Therefore, growth of the net cash flow is the key metric to look at when judging how well this company can fund its growing dividend.

Dividend growth has been wonderfully consistent. The business has hiked its annual regular dividend every year since FY98 – 28 years of payout growth!

In terms of the consecutive years of dividend growth, that’s the best record on the ASX!

The FY26 half-year result saw the business report 15.4% growth of NCFI to $334 million. On a per-share basis, NCFI rose to 89 cents.

In the HY26 period, it hiked its interim dividend by 9.1% to 48 cents per share.

Pleasingly, the dividend has grown at a compound annual growth rate (CAGR) of 11.9% over the last five years.

The payout is growing at a great pace, it’s not just a slow-moving dividend.

On top of all of the above, the ASX 200 dividend stock has paid a dividend for 123 consecutive years. That’s a great reliability record too.

But, its dividend yield isn’t that high because it has a relatively low (and sustainable) dividend payout ratio. However, that helps future dividend growth. Its last two dividends equate to a grossed-up dividend yield of 3.6%, including franking credits.

But, if it were to grow its next two dividends by another 9%, for example, then its upcoming grossed-up dividend yield would be around 4%, including franking credits, at the time of writing.

If someone were to invest $1,000 into Soul Patts shares today, they could buy 23 shares with a little bit of change left over.

Great portfolio

Of course, we shouldn’t invest in an ASX 200 dividend stock just for the passive income or without knowing what it does.

Soul Patts is invested in a number of sectors such as resources, energy, telecommunications, building products, industrial properties, financial services, retirement living, swimming schools, agriculture, credit and plenty more.

I love that the business generates its returns from a variety of sources. That means its cash flow is diversified, and it can hunt across a wide spectrum of industries for ideas.

I’ve made this company my largest holding because of everything it has to offer investors wanting a mixture of passive income and capital growth.

The post $1,000 buys 23 shares in an incredibly reliable ASX 200 dividend stock appeared first on The Motley Fool Australia.

More reading

• Champion Iron announces production gains and new growth projects
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Motley Fool contributor Tristan Harrison has positions in Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If I were building a portfolio in retirement, my focus would shift slightly.

It would be less about chasing growth and more about reliability. I would want income that I can reasonably count on, backed by businesses that have proven they can hold up across different conditions.

These three ASX dividend stocks stand out to me from that perspective.

Transurban Group (ASX: TCL)

Transurban is one of those businesses where the appeal becomes clearer the longer you look at it.

It owns and operates toll roads across major cities, which might not sound exciting, but I think that is part of the point. These are long-life infrastructure assets that people use every day.

Traffic can move around in the short term, but over time, population growth and urban expansion tend to push volumes higher. That creates a steady and predictable revenue base.

Another factor I think is important is how its pricing works. Many of its toll roads have agreements that allow for regular price increases, sometimes linked to inflation. That can help support income even when costs are rising.

For a retiree, I think that combination of essential infrastructure and relatively visible cash flows is hard to ignore.

APA Group (ASX: APA)

APA Group operates energy infrastructure, including gas pipelines and related assets.

What I like here is the contractual nature of the business. A large portion of APA’s revenue is backed by long-term agreements, often with built-in escalators. That provides a level of income visibility that I think is valuable when you are relying on dividends.

It is also a business that sits in the background of the economy. Energy still needs to move from where it is produced to where it is used. That does not change quickly, even as the energy mix evolves over time.

I think APA’s role in that system gives it a degree of stability, even if growth is not particularly fast.

For income-focused investors, that trade-off can make sense.

Coles Group Ltd (ASX: COL)

Coles brings a different type of defensiveness.

It operates in supermarkets, which I think is one of the most consistent areas of demand. People still need to buy food and everyday essentials regardless of what is happening in the economy.

That does not mean earnings never come under pressure. Margins can move, and competition can be intense at times.

But over longer periods, the underlying demand tends to hold up.

What I find interesting about Coles is how it combines that demand with ongoing investment in efficiency, supply chain, and digital capabilities. These can help support steady earnings over time.

For a retiree, I think that steady base can be valuable, particularly when combined with a consistent dividend stream.

Foolish takeaway

If I were investing for income in retirement, I would be looking for businesses that can keep paying, and ideally growing, their dividends over time.

Transurban, APA Group, and Coles each offer a different type of stability. Infrastructure, energy networks, and essential retail all play a role in the economy, and I think that gives these businesses a solid foundation for long-term income.

The post 3 ASX dividend stocks I’d buy if I were a retiree appeared first on The Motley Fool Australia.

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• $250,000 to invest for passive income? Here’s how I would build a portfolio
• Are APA shares a buy after reaching a three-year high?
• Is it time for investors to turn back to defensive ASX shares?
• I think this simple ASX investing habit can build wealth over time
• 3 reasons why the Coles share price is a buy

Motley Fool contributor Grace Alvino has positions in Transurban Group. 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.

NextDC Ltd (ASX: NXT) is not an unfamiliar name, and it is one I have written about before.

But I think the setup looks a little different today.

With the ASX 200 growth stock still down around 20% from its 52-week high despite a recent rebound, I think it could be worth revisiting.

A business positioned at the centre of a structural shift

NextDC operates data centres, which are effectively the physical backbone of the digital economy.

As more businesses rely on cloud computing, artificial intelligence (AI), and data-heavy applications, the need for secure, high-performance infrastructure continues to grow.

I think what is important here is not just that demand is increasing, but how quickly it appears to be accelerating.

Recent updates point to a meaningful step-up in activity, with a sharp increase in contracted capacity and a growing pipeline of future demand.

To me, that suggests this is not a slow, steady trend. It is something that could build momentum over time.

The gap between demand and earnings

One of the challenges with NextDC is that the financials do not always reflect the underlying demand straight away.

The company signs contracts and builds capacity well ahead of when that capacity starts generating revenue. That creates a lag between investment and earnings.

For example, the business now has a large forward order book of contracted capacity that is expected to convert into revenue over the coming years.

If that contracted demand converts as expected, it could drive a step-change in revenue and earnings over time. But in the near term, the heavy investment required to build that capacity can weigh on reported results.

That mismatch can create periods where the market loses patience.

Record demand is changing the outlook

What jumps out to me from the latest update is just how strong demand appears to be right now.

Contracted utilisation has increased significantly in a short period, with a large increase driven by new customer wins.

That kind of move is not something you see every day. It points to a structural shift in how customers are using data infrastructure, particularly with the rise of AI and large-scale cloud deployments.

I think this is important because it changes the conversation. Instead of asking whether demand will show up, the question becomes whether NextDC can build fast enough to meet it.

Investment today, potential payoff later

There is no getting around the fact that this is a capital-intensive business.

NextDC is investing heavily in new capacity, and that can put pressure on cash flow and earnings in the short term. The ASX 200 growth stock has even increased its capital expenditure plans to keep up with demand.

That is the trade-off. Higher investment now in exchange for potential growth later.

I think investors need to be comfortable with that dynamic. This is not a story that plays out over a few quarters.

But if the demand trends continue, those investments could underpin a much larger business in the years ahead.

That said, this is not without risk. Execution matters. And there is always the possibility that demand does not materialise as expected or that returns take longer to come through.

Foolish takeaway

NextDC is not an ASX 200 growth stock I would buy expecting quick results.

But looking at where the business sits, and the demand trends it is exposed to, I think it has the potential to grow into something much larger over time.

So, with the share price down from its highs and demand showing signs of accelerating, this could be one of those situations where patience is rewarded.

The post This beaten-down ASX 200 growth stock could be one to watch 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 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.

Charter Hall Long WALE REIT (ASX: CLW) is an ASX dividend stalwart that every passive income investor should consider, in my view.

I believe it offers virtually everything a dividend-focused investor could want: a good yield, stability, diversification, good value and the potential for a bit of growth.

Let’s run through each of those positives.

Diversification

As its name suggests, the business is a real estate investment trust (REIT). It’s perhaps the most diversified REIT that’s listed on the ASX.

The ASX dividend stalwart is invested across numerous sectors including government properties (including Geoscience Australia), pubs, grocery and distribution, data centres, telecommunication exchanges, Bunnings properties, service stations, food manufacturing, waste and recycling, and more.

I like this strategy because this reduces the risk of being too overexposed to one particular sector. Plus, it means the REIT can look across the entire property landscape for opportunities.

Stability

I think of the most important aspects of being an ASX dividend stalwart is that it can provide stability for investors during economic uncertainty.

Charter Hall Long WALE REIT offers stability in a few different ways.

Firstly, as the name suggests, it has a long WALE. That’s not a giant sea creature, but the weighted average lease expiry. In other words, how long are its rental contracts for (and including the fact that some rental contracts generate more rental income than others).

Currently, it has a WALE of around nine years, which is one of the largest in the industry.

The business also has a portfolio occupancy of near 100%, with 99% leased to tenants that are either government, or leading ASX-listed, multinational or national businesses.

Some of the ASX tenants include Telstra Group Ltd (ASX: TLS), Coles Group Ltd (ASX: COL), Woolworths Group Ltd (ASX: WOW) and Endeavour Group Ltd (ASX: EDV).

A good yield

The ASX dividend stalwart pays out a distribution every three months, which is pleasingly regular for investors wanting passive income.

It’s expecting to pay an annual distribution per unit of 25.5 cents in the 2026 financial year, which represents a distribution yield of 7.3%. It hasn’t offered a distribution yield better than during most of the last six years.

Growth potential of the ASX dividend stalwart

I like saving cash in a bank account, but I’m not looking for a term deposit-style investment that offers fixed income and no growth.

Instead, I want to own things that can deliver earnings growth and distribution growth in the long-term, even if there’s a bit of disruption in the short-term.

Charter Hall Long WALE expects to grow its FY26 annual distribution by 2% to 25.5 cents amid the interest rate volatility.

I think longer-term growth looks likely thanks to rental growth – there are some properties with fixed annual increases and others with rental growth linked to inflation.

Overall, I think this business looks undervalued considering its latest stated net tangible assets (NTA) was $4.68 – much higher than the current unit price.

The post An ASX dividend stalwart every Australian should consider buying appeared first on The Motley Fool Australia.

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