Category: Stock Market

The BHP Group Ltd (ASX: BHP) share price has been an incredible performer compared to the S&P/ASX 200 Index (ASX: XJO) in the past year.

In the last 12 months, the ASX mining share has gone up by 55%, as the chart below shows, while the ASX 200 is only up by 5%. That means $10,000 is now worth around $15,500.

BHP has been one of the best-performing blue-chips on the ASX in that time. I think there are a few reasons why the business has performed so strongly for shareholders.

US tariffs in 2025

When we’re looking at how much a share has risen over a certain time period, it’s important to consider where the share price started and where it ended.

A year ago, the BHP share price was suffering amid investor concerns surrounding US tariffs and what impact that may have on the Chinese economy and demand for iron ore.

Understandably, as the months went by and China continued buying iron ore, investor concerns faded away amid ongoing strength for the iron ore price.

Resource prices

A key input of BHP’s profitability is the resource price. Its costs per tonne don’t change much month to month, so any extra revenue for that production is a great boost for its earnings.

The iron ore price has remained strong enough for the ASX mining share to deliver significant profits.

According to Trading Economics, the iron ore price is currently sitting at US$111 per tonne. That’s a lot stronger than I was expecting it would be by now. The iron ore price is up by 11% over the past year, with that extra revenue largely adding to net profit, aside from paying more to the government.

The copper price has also performed strongly – in the FY26 third-quarter, the company reported that its average realised price was US$5.47 per pound, up 31%. Again, a lot of this additional copper revenue is a strong boost for profitability.

Strong production

Resource prices are just part of the picture, the business is also capitalising on the higher resource prices by delivering high levels of production.

In the third quarter of FY26, the company reported that it produced 62.8kt of iron ore, representing 2% growth year-over-year.

Copper production of 476.8kt was 7% lower year-over-year, but that was still a strong output for the business.

With the company working on increasing its production at existing projections and building new ones, it can increase its output in the coming years.

The post $10,000 invested in BHP shares 12 months ago is now worth… appeared first on The Motley Fool Australia.

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• Why BHP, GQG, Inghams, and Symal shares are pushing higher today
• Copper is going ballistic. Which ASX shares are riding the boom?
• Forget gold, BHP shares could be the better long-term buy

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

Temple & Webster Group Ltd (ASX: TPW) shares are under pressure again on Wednesday.

In morning trade, the ASX 300 stock sank 15% to a 52-week low of $4.54 before recovering slightly.

At the time of writing, the online furniture retailer’s shares are down 6% to $5.01.

Why is this ASX 300 stock sinking?

Investors have been selling Temple & Webster’s shares following the release of an update on its guidance for FY 2026.

According to the release, since its last trading update, consumer confidence has reached historic lows.

In response, the ASX 300 stock has rebalanced profit and growth in the short-term, successfully implementing a margin optimisation program.

It notes that following this, its EBITDA in April increased to ~$2.5 million. This is the most profitable April in the company’s history.

As a result of this rebalance, Temple & Webster’s FY 2026 revenue is expected to be in the range of $665 million to $675 million. This will be an increase of 11% to 12% on the prior corresponding period.

The company’s EBITDA is expected to be in the range of $20 million to $22 million. This will be an increase of 6% to 17% over the prior corresponding period.

Management also highlights that the current margin run-rates would lead to EBITDA almost doubling to ~$40 million in FY 2027, even in a low growth scenario.

It believes this significant uplift in profitability, combined with a strong balance sheet, positions the ASX 300 stock well for both organic and inorganic growth, and broader capital management initiatives.

However, judging from its share price performance today, the market isn’t as convinced.

Commenting on the change, Temple & Webster’s outgoing founder and CEO, Mark Coulter, said:

We remain firmly focused on growing our market share and reaching $1 billion in revenue by FY28, and becoming a larger, more profitable business. However right now, given the uncertainty in the Australian economy, we have prudently chosen to rebalance between profit and growth in our core business. Over the last two months, we have implemented a new promotional cadence, repriced the entire catalogue, obtained more support from our suppliers, restructured our marketing campaigns, and slowed our fixed cost growth.

These initiatives have led to a new profit record for the month of April by quite a long way, and a clear path to a doubling of EBITDA in FY27 to ~$40 million, despite the economic headwinds. This shows the incredible agility of our business model and the speed of which we can adjust our levers in response to external changes.

Coulter then concludes:

A more profitable core business allows us to keep investing in our consumer offering and platform – including a larger and more diversified private label and exclusive business, better and faster delivery options, and personalisation across all our customer touchpoints. It also allows us to take advantage of a more attractive M&A environment, particularly in our emerging growth areas such as home improvement, B2B and international, which all continue to perform well.

The post Why did this ASX 300 stock just crash 15% to a 52-week low? appeared first on The Motley Fool Australia.

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Shares in Perenti Ltd (ASX: PRN) are trading higher after the company announced that its underground mining subsidiary Barminco had won an $850 million contract with Bellevue Gold Ltd (ASX: BGL).

Long-term body of work

The company said in a statement to the ASX that the contract would run for four years with the option to extend for another year.

The company said further:

The award follows a competitive tender process and marks the commencement of a new operating relationship between Barminco and Bellevue. The Bellevue Gold Project is a long-life, high-quality underground gold operation in a well-established mining jurisdiction and represents an important addition to Barminco’s Australian portfolio. Under the agreed scope of works Barminco will provide all underground mining services to support the ongoing development and production activities.

Perenti said the contract would require about $75 million of growth capital to be spent.

Perenti Managing Director Mark Norwell said:

We are excited to partner with Bellevue as we focus on delivering enduring value four our clioents, our people, the communities in which we work and ultimately our shareholders. This contract award reinforces Barminco as a global leader in underground mining, further strengthening Barminco’s underground mining portfolio and earnings in Australia. This award supports our strategy to deliver sustainable cash generation and future earnings growth.

Barminco also operates other mines in Western Australia, including the nearby Gold Fields-owned Agnew Mine, Regis Resources Ltd (ASX: RRL)’s Duketon underground mines, Ramelius Resources Ltd (ASX: RMS)’s Dalgaranga mine, and AngloGold Ashanti‘s Sunrise Dam Mine.

Bellevue Managing Director Darren Stralow said:

This was a highly competitive process, as shown by the strength of the tenders and the final result. Barminco presented an extremely attractive proposal across safety, operational capability, and technical expertise, positioning Bellevue strongly for the next phase of operational delivery and growth. Their depth of underground mining experience and global scale will further support Bellevue as the operation continues to mature and optimise.  

Building on a solid base

Perenti has solidly grown its revenue over the past four years, from $2.43 billion in FY22 to $3.48 billion in FY25.

Guidance for the current year is revenue of $3.45 to $3.55 billion, EBIT of $335 to $350 million, and free cash flow of more than $170 million.

In a recent investor presentation, the company said that in addition to its Australian operations, it was expanding in the US, growing from zero projects in FY19 to eight currently.

The company also recently announced that Dr Vanessa Torres will commence as the new Managing Director on June 1, having previously worked at South32 Ltd (ASX: S32).

Perenti shares were 3.5% higher at $2.10 in early trade. The company is valued at $1.89 billion.

The post Which ASX 200 mining services provider is charging higher on a big contract win? appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX 200 shares today

Motley Fool contributor Cameron England 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.

Life360 Inc (ASX: 360) shares had a difficult session on Tuesday.

The family safety and location technology company’s shares crashed deep into the red following the release of its first-quarter update and a tech sector selloff.

Does this make the tech stock a bargain buy now? Let’s find out what Bell Potter is saying.

What is the broker saying about Life360 shares?

Bell Potter highlights that Life360’s first-quarter update revealed beats across everything but monthly active users (MAUs). However, the latter was impacted by a technical issue on Android devices, which has since been resolved. It said:

1Q2026 revenue and adjusted EBITDA of US$143.1m and US$17.1m were 4% and 18% ahead of our forecasts and 4% and 14% ahead of VA consensus. The key positive of the result was the strong paying circle growth of 201k q-o-q which was more than double our forecast of 99k and well ahead of VA consensus of 109k. The key negative was the MAU growth of only 2.0m q-o-q which was well below our forecast of 2.6m and further below VA consensus of 3.1m.

On the conference call, CEO Lauren Antonoff said the MAU growth in Q1 was negatively impacted by “technical issues” and these have now been largely resolved though there will still be some impact in Q2. The company also disclosed advertising revenue for the first time which was US$19.7m in Q1 and ahead of our forecast of US$18.2m.

It was also pleased to see management upgrade its revenue and earnings guidance. It adds:

Life360 upgraded its 2026 revenue and adjusted EBITDA guidance from US$640- 680m and US$128-138m to US$650-685m and US$130-140m. The company did, however, reduce the MAU growth guidance from 20% to 17-20%. The bottom end of that range requires average growth of 4.8m in each of the next three quarters – versus 2.0m in Q1 – while the top end requires 5.7m.

Big potential returns

According to the note, the broker has retained its buy rating on Life360 shares with a slightly trimmed price target of $32.50 (from $35.50).

Based on its current share price of $17.92, this implies potential upside of 81% for investors over the next 12 months.

Commenting on its buy recommendation, Bell Potter concludes:

We have reduced the multiple we apply in the EV/EBITDA valuation from 35x to 30x and also increased the WACC we apply in the DCF from 9.5% to 9.6% for conservatism and the continued general weakness in the tech sector. The net result is an 8% decrease in our TP to $32.50 and we maintain our BUY recommendation. There is perhaps a lack of short term catalysts but we do see sequential improvement each quarter in revenue and EBITDA for the remainder of the year.

The post Does Bell Potter think the Life360 share price is dirt cheap? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Life360. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360. The Motley Fool Australia has positions in and has recommended Life360. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

S&P/ASX 300 Index (ASX: XKO) rare earths stock Arafura Rare Earths Ltd (ASX: ARU) is charging higher today.

Arafura shares closed yesterday trading for 33 cents. In early morning trade on Wednesday, shares are swapping hands for 35 cents apiece, up 6.1%.

For some context, the ASX 300 is down 0.6% at this same time.

With today’s intraday gains factored in, Arafura Rare Earths shares are now up 105.9% in 12 months, smashing the 4.1% one-year gains delivered by the benchmark index.

Here’s what’s catching investor interest today.

ASX 300 rare earths stock leaps on offtake agreement

Arafura Rare Earths shares are in the green today after the company announced that it had signed a binding offtake term sheet with Traxys North America.

Traxys is a global physical trader and merchant in the metals and natural resources sectors.

Under the agreement, Arafura Nolans Project (a wholly owned subsidiary of the ASX 300 rare earths stock) will supply Traxys with 500 tonnes a year of neodymium-praseodymium (NdPr) oxide.

The supply agreement is for five years, with the companies having the option to extend this by two years if they both agree to do so.

The price Arafura Rare Earths receives for its NdPr oxide will be linked to an independent and transparent global seaborne index. Traxys will make payment in US dollars, leaving total revenue in Aussie dollars subject to foreign exchange moves.

What did Arafura management say?

Commenting on the offtake agreement helping boost the ASX 300 rare earths stock today, Arafura managing director Darryl Cuzzubbo said, “We have long believed that the right partners would define the quality and durability of Arafura.”

Cuzzubbo added:

The offtake relationships we have established are not just transactional arrangements. They reflect growing alignment between industry participants and government-supported initiatives aimed at establishing resilient critical minerals ecosystems as an imperative, not merely an opportunity.

As we advance this strategic agreement, we achieve another milestone in delivering the company’s broader long-term offtake objectives and financing strategy in support of a future investment decision.

The ASX 300 rare earths stock said it expects to finalise and execute a long form offtake agreement prior to the sunset date, which is six months from the execution of the term sheet.

The agreement remains subject to customary conditions, which include Arafura undertaking a Final Investment Decision (FID) for the Nolans Project.

Nolans is planned to be among Australia’s first ore-to-oxide rare earths processing facilities. Located in the Northern Territory, Nolans would provide a critical source of rare earths outside of China.

The post Up 106% in a year, why is this ASX 300 rare earths stock leaping higher again today? appeared first on The Motley Fool Australia.

More reading

• Why did this ASX 300 stock just crash 15% to a 52-week low?
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• Why are CBA shares crashing 8% today?
• Fortescue shares push higher despite order to pay Yindjibarndi $150m damages

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.

Commonwealth Bank of Australia (ASX: CBA) shares are under pressure on Wednesday.

In morning trade, the banking giant’s shares are down over 8% to $157.16.

Why are CBA shares crashing?

Investors have been selling the big four bank’s shares today following the release of a quarterly update.

For the three months ended 31 March, CBA revealed that operating income was flat on the first-half quarterly average, with higher net interest income offset by lower other operating income.

Net interest income rose 1%, supported by lending and deposit volume growth, earnings on the replicating portfolio, and higher deposit margins. This was partly offset by cash rate lag, competition in home and business lending, the weaker New Zealand dollar, and two fewer days in the quarter.

Operating expenses rose 1%, excluding restructuring and notable items. This was due largely to higher cloud computing volumes, software licensing, and investment in artificial intelligence capabilities.

On the bottom line, the bank reported unaudited statutory net profit after tax of approximately $2.6 billion and unaudited cash net profit after tax of approximately $2.7 billion.

Cash profit was down 1% on the first-half quarterly average but up 4% on the prior corresponding quarter.

Lending and deposits grow

CBA revealed that it continued to grow across key lending and deposit categories.

For the 12 months to March 2026, home loan balances increased by $41 billion, household deposits rose by $38 billion, and business lending grew by $21.6 billion.

The bank noted that business lending grew at 1.2 times system, household deposits at 1.1 times system, and home lending broadly in line with system.

Retail transaction accounts also increased by more than 170,000 during the quarter, mainly driven by new-to-bank account openings.

Provisions increased

One area the market has been watching carefully in this tough economic environment is provisioning.

CBA’s loan impairment expense was $316 million for the quarter. The bank increased the forward-looking component of collective provisions by $200 million to reflect heightened geopolitical and macroeconomic risks.

However, management said underlying portfolio credit quality remains sound, with actual losses still low.

Consumer arrears increased modestly, while corporate troublesome and non-performing exposures also moved higher during the quarter.

Management commentary

Commenting on the quarter, CBA’s CEO, Matt Comyn, said:

Many Australian households and businesses are navigating cost-of-living pressures from higher energy prices and interest rates. Conflict in the Middle East is disrupting critical supply chains and contributing to global uncertainty. As Australia’s largest bank, we are well placed to support our customers through this uncertain environment. Our balance sheet settings remain resilient with strong levels of capital, liquidity, deposit funding and provisioning in the context of economic and geopolitical uncertainty.

Our capital and liquidity ratios remain well above minimum regulatory requirements. Deposit funding represents 79% of total funding, and we are well progressed on our FY26 funding task, having raised A$32 billion in long-term wholesale funding to date. Notwithstanding an already strong level of provisioning, we have chosen to further top up our collective provisions in the quarter to reflect heightened macroeconomic risks. Our deliberate and long-term approach to balance sheet settings enables us to support our customers and the economy.

Speaking about the uncertain outlook, Comyn adds:

We are closely monitoring the impacts of the Middle East conflict and the broader macroeconomic environment. The Australian economy continues to demonstrate resilience, but supply chain disruptions, higher prices and interest rates are expected to weigh on household spending and business activity. We will continue to adjust our settings as appropriate and remain focused on executing our strategy to build a brighter future for all.

The post Why are CBA shares crashing 8% today? appeared first on The Motley Fool Australia.

More reading

• Why the big four banks could keep delivering for income investors
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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 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.

Fortescue Ltd (ASX: FMG) shares are rising on Wednesday morning.

At the time of writing, the mining giant’s shares are up 1.5% to $22.20.

Fortescue shares rise despite court loss

The miner’s shares are rising on Wednesday despite the release of an announcement after the market close yesterday relating to a court loss.

According to the release, the Federal Court has delivered its decision in relation to the Native Title Compensation Claim that was commenced by the Yindjibarndi Ngurra Aboriginal Corporation RNTBC back in 2022 relating to the Solomon Hub.

The Federal Court determined that Fortescue is liable to pay compensation to the Yindjibarndi Ngurra Aboriginal Corporation RNTBC.

It notes that the total amount for economic loss is anticipated to be in the vicinity of $100,000 plus interest and the total amount for cultural loss is $150 million. The latter is significantly more than the “figure of no more than $8 million” that Fortescue suggested was appropriate.

The Federal Court has advised that it will publish the reasons for its decision at a later date. Fortescue intends to review those reasons when available.

How does this compare to expectations?

The $150 million that the Federal Court has awarded is a lot less than the Yindjibarndi Ngurra Aboriginal Corporation RNTBC was seeking.

It contended that mining companies in the Pilbara typically agree to pay a 0.5% royalty to traditional owners for use of their land.

Based on this, it calculated its economic loss on the basis of a percentage of royalties until the end of the operational life of the project, which is expected to be in 2045, to be in excess of $800 million.

It also separately sought compensation of $1 billion for cultural loss that it has suffered from the grant of the mining tenements.

In response to the news, a Fortescue spokesperson stated:

Dr Andrew Forrest and Fortescue care deeply about all First Nations people, including the Yindjibarndi community. Fortescue accepts that the Yindjibarndi People are entitled to compensation. The Company has agreed to and pays financial compensation under all of its other seven native title agreements. Fortescue has strong relationships with the First Nations people of the Pilbara region of Western Australia, with dedicated Heritage, Native Title and Community teams working hand in hand with Traditional Custodians to ensure cultural heritage is managed sustainably and responsibly.

The post Fortescue shares push higher despite order to pay Yindjibarndi $150m damages 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 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.

Aristocrat Leisure Ltd (ASX: ALL) shares are on the move on Wednesday morning.

At the time of writing, the ASX 200 gaming technology stock is up 5% to $48.40.

ASX 200 stock charges higher on results day

Investors have been buying the company’s shares today following the release of its half-year results.

For the six months ended 31 March, Aristocrat reported normalised revenue of $3.03 billion. This was broadly flat on a reported currency basis but up 6.4% in constant currency.

The company’s largest division, Aristocrat Gaming, delivered revenue of $1.96 billion, which is up 4.9% on the prior corresponding period.

This was supported by strong outright sales growth and market share gains in North America and Australia and New Zealand. Its Gaming Operations installed base also expanded, with market share increasing to 43%.

Product Madness revenue fell 4.1% to US$546.2 million. However, this reflected the sale of the Social Casual business early in the half. Its Social Casino revenue increased 4.7% to US$541.7 million, with the division maintaining a 23% market share in the Social Casino Slots market.

Aristocrat Interactive revenue increased 6.5% to US$230.3 million, driven by iLottery and the continued scaling of content, particularly in North America. Management notes that this was partially offset by Platforms following the strategic decision to exit White Label.

Normalised EBITA increased 6.2% to $1.12 billion, or 14% in constant currency. Normalised net profit after tax rose 9.1% to $725.4 million, while normalised NPATA increased 8.4% to $794.0 million. On a constant currency basis, normalised NPATA was up a sizeable 16.3%.

The ASX 200 stock’s board declared an unfranked interim dividend of 50 cents per share. This is up 13.6% on the prior corresponding period.

In addition, the company revealed that it is increasing its on-market share buy-back program by $1 billion (up to $2.5 billion in aggregate) and extending it through to 12 May 2027.

Management commentary

Aristocrat’s CEO and managing director, Trevor Croker, said the result reflected disciplined execution and continued momentum across the business. He commented:

Aristocrat delivered a strong first half, with clear progress across the business and market share gains in key segments. Our earnings growth reflects disciplined execution, strong revenue momentum throughout our portfolio, and a continued focus on efficiency and extracting operating leverage.

This result once again highlights our market leadership and scale as fundamental strengths of the business. At the same time, we have maintained a balanced approach to capital allocation, returning capital to shareholders while investing strategically to strengthen our long-term growth and resilience.

Outlook

Looking ahead, no firm guidance has been given for FY 2026.

However, management advised that it “expects to deliver NPATA growth over the full year to 30 September 2026 on a constant currency basis.”

This reflects expectations for continued revenue and market share growth from Aristocrat Gaming, continued market share growth from Product Madness, and “accelerating performance at Aristocrat Interactive toward [its] FY29 US$1 billion Revenue Target.”

The post Aristocrat shares charge higher on strong result and $1b buy-back appeared first on The Motley Fool Australia.

More reading

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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 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.

Develop Global Ltd (ASX: DVP) shares are falling on Wednesday morning.

In early trade, the ASX mining stock is down 2% to $6.05.

This follows the release of an announcement before the market open.

What did the ASX mining stock announce?

This morning, the mining and mining services company announced a major contract win.

The first contract is a $274 million contract from Core Lithium Ltd (ASX: CXO) to undertake all underground development and production activities at the Finniss Lithium Project in the Northern Territory.

The ASX mining stock notes that the contract has a minimum three-year term, with a two-year extension option, and is expected to generate steady-state annual revenue of $120 million.

The scope of work includes surface infrastructure and portal establishment at the BP33 mine and associated underground mining activities.

The company’s managing director, Bill Beament, said:

We are delighted to secure the Core Lithium contract, which again reflects the skills and depth of our first-class mining services team. We are also very pleased to add a lithium project of this quality and scale to our mining services portfolio, given its long mine life and strong fundamentals. We are currently preparing tenders for mining services opportunities and receiving extremely positive feedback from potential clients about the strength of our team and our approach to mining and contracting.

What else was announced?

The ASX mining stock separately announced that its contract with Bellevue Gold Ltd (ASX: BGL) will come to an end shortly.

It notes that completion of this contract will coincide with the scheduled start of underground mining at Core Lithium’s Finniss Lithium Project.

Management highlights that the demobilisation of the electrical infrastructure, fixed plant and mobile mining fleet at Bellevue Gold will release ~$50 million worth of capital that is scheduled to be redeployed throughout the Develop business.

As part of the demobilisation, Develop intends to retain the personnel it employed at Bellevue. It points out that this team includes some of the most skilled and experienced underground miners in Australia.

Beament commented:

We are operating in a very favourable contracting market and therefore it is important that we strike the right balance between delivering value for our clients and returns for our shareholders. We have built a world-class underground mining team and it is imperative that we protect margins, not only for our shareholders but also to ensure that we can continue to invest in the best people and the latest equipment for the benefit of our clients.

This means being selective in the contracts we take on and the terms on which we deliver our services. Our new contract with Core Lithium is ideally suited to our key strengths and will see us relocate highly experienced people from our Bellevue site to the Finniss project.

The post ASX mining stock drops despite big lithium news appeared first on The Motley Fool Australia.

More reading

• Which ASX 200 mining services provider is charging higher on a big contract win?
• Here are the top 10 ASX 200 shares today
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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 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.

Australia’s major banks have long been the backbone of income portfolios, and the case for owning them remains compelling.

For decades, Australian income investors have turned to the big four banks as a reliable source of fully-franked dividends.

Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB), Westpac Banking Corp (ASX: WBC), and ANZ Group Holdings Ltd (ASX: ANZ) collectively pay out billions of dollars in dividends each year.

With a more supportive interest rate environment, this is unlikely to change anytime soon. 

The dividend picture today

Each of the big four currently offers a different yield proposition, giving investors a range of options depending on their priorities.

ANZ currently leads the pack on yield, offering investors a trailing dividend yield of around 4.5%, though it is worth noting that recent ANZ dividends have carried only partial franking credits. 

NAB and Westpac sit not far behind, trading on fully-franked yields of approximately 4.5% and 4.2%, respectively. 

CBA offers the lowest headline yield of around 3%, reflecting the premium valuation the market places on Australia’s largest bank.

But with the strongest growth profile of all big four banks, CBA is likely to grow its dividend meaningfully through to 2027. 

All banks have roughly similar payout ratios. 

When grossed up to include the value of franking credits, the effective yield on each of these banks rises materially, making them even more attractive for Australian taxpayers in higher tax brackets.

Why the outlook remains positive

The big four banks operate in one of the most stable and concentrated banking markets in the world.

Their oligopoly position, defined by deep customer relationships and a highly regulated environment, gives them a durable competitive advantage that few industries can match. 

Rate rises from the Reserve Bank of Australia should support near-term net interest margins, further boosting bank returns. 

A more stable economic environment could also encourage stronger credit growth, which would feed directly into bank revenues.

Franking credits remain a powerful advantage

One of the most compelling reasons Australian investors hold bank shares is the franking credit benefit.

For retirees in the zero tax bracket, franking credits effectively boost the cash return well above the headline dividend yield. 

This structural advantage is unique to Australian equities and makes the big four particularly attractive relative to international income alternatives.

Foolish Takeaway

The big four banks may not deliver explosive capital growth. 

But for investors seeking reliable, tax-effective income backed by some of the most profitable and resilient businesses, Commonwealth Bank, NAB, Westpac, and ANZ continue to deserve a place in any income-focused portfolio. 

The post Why the big four banks could keep delivering for income investors appeared first on The Motley Fool Australia.

More reading

• Commonwealth Bank of Australia posts Q3 2026 capital update
• Are these ASX ETF giants still worth buying today?
• How much do I need to invest in ASX shares for $500 a month of passive income?
• 3 ASX ETFs that could be top picks for beginners
• How Chalmers’ budget tips the scales for ASX 200 dividend shares like Stockland and NAB

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.