Out of the major ASX blue-chip shares, Telstra Group Ltd (ASX: TLS) shares could be one of the best pick for passive income.

Telstra owns Australia’s leading telecommunications network, and benefits from ongoing user growth and subscription price increases.

One of the most appealing things about Telstra as an ASX dividend share is its dividend payout ratio is close to 100% of its earnings. That unlocks a good dividend yield.

It’s advantageous to have a diversified portfolio of businesses for a dividend-focused investor. But, if someone were aiming for $1,000 of annual passive income, it’d be good to know how many Telstra shares you’d need.

$1,000 passive income goal

Investing in ASX companies usually comes with the benefit of franking credits, so I’m going to include that in the calculation of how many Telstra shares I’d need.

If someone invested in the ASX telco share today, it’d be too late to receive the FY25 dividend payout. The next dividends someone would be eligible to receive are the FY26 payments.

I think it’s highly likely that the business will be able to grow its dividend in the 2026 financial year.

The forecast on Commsec suggests the business could pay an annual dividend per share of 20 cents, representing a year-over-year increase of 5.25%, or 1 cent per share, if that’s what happens.

Including the franking credits, this would mean investors would need 3,500 Telstra shares to generate $1,000 of annual passive income.

At the time of writing, that would require an investment of $16,590.

Is the dividend expected to continue increasing?

The further into the future we look, the more challenging it is to forecast what’ll happen next. Just look at how much unpredictability US President Trump has added to the picture over the last 12 months.

Telstra’s profit is a bit more consistent than the share market, thanks to its defensive utilities offering, so its future is easier to forecast.

The projection on Commsec suggests the dividend could increase by another 1 cent per share – a 5% year-over-year rise – in FY27 to 21 cents per share.

Therefore, at the current Telstra share price, it offers a potential grossed-up dividend yield of 6% (including franking credits) in FY26 and 6.3% in FY27.

A defensive business offering a dividend yield of more than 5% and growing at 5% per year seems like a very promising investment idea to me for passive income.

The post How many Telstra shares do I need to buy for $1,000 of annual passive income? appeared first on The Motley Fool Australia.

More reading

• Forget Telstra shares, I’d buy this ASX telco stock instead
• How to build an ASX share portfolio for income and growth
• Would Warren Buffett buy Telstra shares?
• 2 ASX income stocks I would buy with $2,500 in January
• My simple 5-share ASX retirement portfolio

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

WiseTech Global Ltd (ASX: WTC) shares have been under intense pressure over the past year. On Wednesday, the stock fell to a 52-week low of $61.48 before retracing slightly to finish at $62.02.

That is a long way from its 52-week high of $130.50, and it leaves investors facing a familiar but uncomfortable question. Has the market finally gone too far to the downside, or is there more pain still to come?

In my view, this pullback could represent a once-in-a-decade opportunity for long-term investors willing to look beyond near-term uncertainty.

A high-quality business trading at a much lower price

WiseTech remains a dominant global player in logistics software, with its CargoWise platform deeply embedded in the operations of freight forwarders and supply chain operators worldwide. The business benefits from very high levels of annual recurring revenue and extremely low customer churn, which underpins predictable cash flows even during periods of disruption.

While governance concerns and execution issues have weighed heavily on sentiment, the underlying business has not disappeared. Instead, the market has applied a significant discount while waiting for confidence to return.

Earnings growth still matters

Consensus forecasts point to earnings per share of 76.5 cents in FY26, rising to 108.1 cents in FY27. That implies strong profitability over the next two years if management delivers on its plans.

At the current share price, WiseTech is trading on 81 times estimated FY26 earnings and 57 times estimated FY27 earnings. This is well below the valuation levels investors have historically been willing to pay for that growth profile.

Valuation looks reasonable

WiseTech has never been a cheap stock in traditional terms. Over the past nine years, its average price-to-earnings ratios have ranged from 52.79 to as high as 160.87. Even in more recent years, multiples have commonly sat between 80 and 100 times earnings.

Against that backdrop, today’s valuation looks compressed to me. While a lower multiple may be justified given recent challenges, the current pricing suggests the market is assuming a permanently impaired business rather than a temporarily disrupted one.

If WiseTech simply returns to delivering consistent earnings growth, it would not need to regain its historical peak multiples for shareholders to do well from here.

Why this could be a rare opportunity

This is not a risk-free situation. Execution still matters, and trust will take time to rebuild. However, the combination of a high-quality global business, strong long-term growth drivers, and a share price that has already fallen a long way creates an unusually asymmetric setup.

For long-term investors who can tolerate volatility, this looks like one of those rare periods where a premium business is available at a price that assumes very little goes right.

That does not guarantee success, but it does suggest that the risk-reward balance may be far more attractive than it has been at almost any point in WiseTech’s listed history.

The post A once-in-a-decade chance to buy WiseTech Global shares? appeared first on The Motley Fool Australia.

More reading

• 2 ASX growth stocks set to skyrocket in the next 12 months
• Where to invest $5,000 in ASX 200 shares to try and beat the market
• 5 of the best ASX growth shares to buy and hold
• The 3 best undervalued ASX shares I’d pick up in January
• Top brokers name 3 ASX shares to buy next week

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

ASX All Ords share IPD Group Ltd (ASX: IPG) has amply rewarded investors who bought the stock at multi-year lows in June.

On Wednesday, shares in the electrical equipment and industrial digital technologies provider closed up 0.2% at $4.54 apiece. For some context, the All Ordinaries Index (ASX: XAO) closed down 0.5% on Wednesday.

This now sees the IPD share price up a healthy 22.0% over the past 12 months.

But if you’d followed Warren Buffett’s advice to be greedy when others are fearful and bought the ASX All Ords share at its multi-year lows on 23 June, you could have picked it up for just $2.80.

That would see you sitting on a gain of 62.1% as of Wednesday’s close.

While those gains have come and gone, the analysts at Taylor Collison expect more outperformance from IPD shares in the year ahead.

Here’s why.

Should you buy the ASX All Ords share today?

IPD shares grabbed plenty of investor attention, and closed up 4.3%, on 30 December after the company announced it was acquiring Platinum Cables. Platinum Cables provides cable solutions for the Australian mining and resources sector.

As we reported on the day, the ASX All Ords share will pay $37.5 million to acquire Platinum Cables. IPD said this equates to 5.2 times Platinum Cables’ FY 2025 earnings before interest and tax (EBIT).

“The acquisition of Platinum Cables is a continuation of our growth strategy that reinforces our leadership in the mining sector and delivers immediate earnings accretion for shareholders,” IPD CEO Michael Sainsbury said on the day.

And the team at Taylor Collison agree.

According to the broker:

We really like this deal. We think IPD are paying a fair price for a growing, niche operation with a reputation and record that insulates it from the price-based competition. Platinum extends the product portfolio, diversifies end markets, and offers a leg-up into emerging growth segments.

Taylor Collison also highlighted the ongoing revenue potential from repair and maintenance.

“Platinum’s cables must withstand harsh environments, are essential to production and require replacement due to wear and tear,” the broker said. “Maintenance and repair can approach two-thirds of revenue in years without major project supply.”

And Taylor Collison expects the ASX All Ords share will benefit from plenty of sales synergies.

The broker noted:

Platinum’s cables connect to plugs, switchgear, VSDs and control systems in IPD’s catalogue. Engineering capabilities can potentially engage IPD earlier in the specification phase for projects, increasing the potential for other IPD products to be specified into tenders.

With this picture in mind, Taylor Collison increased it FY 2026 earnings per share (EPS) estimate for IPD by 6%, while lifting its FY 2027 EPS estimate by 12.5%.

“We are also modelling accelerating sales growth in FY 2028 as sales synergies start to translate into project wins,” the broker said.

Connecting the dots, Taylor Collison maintained its buy rating on the ASX All Ords share with an increased price target of $5.40.

That represents a potential upside of 18.9% from Wednesday’s closing price.

The post Up 63% since June, why this ASX All Ords share is tipped to keep outperforming in 2026 appeared first on The Motley Fool Australia.

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• 2 under-the-radar ASX small caps engineering Australia’s electrification push
• 3 ASX shares for beginners to buy with $1,000 in 2026
• Why DroneShield, IPD, Mesoblast, and Woodside shares are charging higher today
• Guess which ASX All Ords share is leaping higher today on acquisition news

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

As we head into 2026, and with the reporting season just around the corner, the key questions is, has the market run out of puff, or are there still gains to be made?

The team at Wilsons Advisory has run the figures, and the good news is that they believe the market will push higher, particularly in certain sectors.

Miners dominated in 2025

Firstly, looking back on last year, the S&P/ASX 200 Index (ASX: XJO) delivered a “solid” total return of 10%, with the strongest contributor being the materials sector, up 36% “as sentiment towards the commodity complex improved in the second half of the year”.

As the Wilsons team said in its note to clients:

The biggest contributor to the strength of the materials sector was the gold miners, as the precious metal surged +65% during the year amidst a prevalence of macro and geopolitical risks. There was also impressive strength among miners exposed to base metals, such as Copper and Aluminium, driven by tightening supply/demand dynamics, as well as critical minerals such as Rare Earths and Lithium, as their prices staged a recovery from their respective slumps.

Other sectors which performed well included industrials, up 14%, utilities up 13% and financials up 12%.

Notably, within financials, after demonstrating market leadership throughout 2024 and for much of 2025, the bank sector began to give back its outperformance towards the end of the year. This was driven by the partial unwinding of CommBank’s extreme valuation premium as the bank failed to deliver against high market expectations of continuing earnings upgrades.

Rates outlook cause for concern

Looking forward to this year, the Wilsons team said the outlook is “somewhat constrained” by the risk of official interest rate increases, and high valuations.

That said, the market now offers a relatively supportive earnings growth backdrop, with consensus pointing to 10% earnings per share growth for the calendar year, which would represent the strongest rate of earnings growth in four years.

Wilsons’ key recommendations are to stay overweight in resources, stay underweight in banks, to retain exposure to “AI winners”, to remain underweight in retail, and overweight in supermarkets.

On the resources front, “We see scope for a continued metal pricing upgrade cycle and a sustained rotation into the resources sector in 2026, supported by several key factors”.

These included a healthy global economy, a weakening US dollar, structural demand tailwinds driven by factors including the energy transition and re-armament, and supply tightness.

On the banks, the Wilsons team believes, “valuations remain prohibitively expensive for a sector offering below market, low- to mid-single-digit consensus earnings per share growth”.

AI growth to continue 

In the AI sector Wilsons says the AI revolution is, “a genuine megatrend that is closer to early than late cycle and is supported by continued upgrades in hyperscaler capex forecasts”.

The first wave of AI winners comprises the ‘picks and shovels’ businesses that provide the digital infrastructure required for AI deployment, and are therefore directly leveraged to the ongoing investment cycle.

They singled out NextDC Ltd (ASX: NXT) and Goodman Group Ltd (ASX: GMG) as data centre companies to watch.  

Meanwhile in retail, the rates outlook, “‘presents an incrementally more challenging environment for the cyclical retail sector in 2026”.

While an ‘on-hold’ RBA (Reserve Bank of Australia) remains a plausible outcome for 2026, the balance of risks over the next six months appears skewed towards a rate rise rather than a cut. This environment presents risks to retailer earnings and valuations, with our analysis showing that the sector typically underperforms in the lead-up to rate hikes as the market anticipates softer macro conditions for consumers.

The post As reporting season looms, where will the market head next and what should you be buying? appeared first on The Motley Fool Australia.

More reading

• Where to invest $5,000 in ASX 200 shares to try and beat the market
• 5 of the best ASX growth shares to buy and hold
• These ASX 200 shares could rise 20% to 55%
• Why these ASX 200 shares could still have major upside in 2026
• How I’d look for ASX growth shares today that could double my money

Motley Fool contributor Cameron England has positions in Nextdc. 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.

Dividends are often thought of as money you take and spend.

But for long-term investors, dividends can be far more powerful when they are treated as a tool for compounding rather than income.

Used the right way, ASX dividends can quietly accelerate portfolio growth and play a major role in building wealth over time.

Here is how I would approach turning ASX dividends into long-term wealth.

Start with dividends that are sustainable

The most important thing to look for in dividend investing is not yield, but sustainability.

High dividend yields can look attractive on paper, but they are often a warning sign if they are not backed by strong earnings and cash flow. Businesses that consistently generate surplus cash, maintain sensible payout ratios, and reinvest wisely are far more likely to keep paying dividends through different market conditions.

Australian shares with resilient business models and long operating histories tend to form a strong foundation for dividend-led investing, even if their yields are not the highest in the market. This could mean shares such as Woolworths Group Ltd (ASX: WOW), Universal Store Holdings Ltd (ASX: UNI), and Dicker Data Ltd (ASX: DDR).

Reinvest dividends early on

The real power of dividends shows up when they are reinvested.

When dividends are used to buy more shares, those extra shares generate their own dividends, which can then be reinvested again. Over time, this compounding effect can become significant, even if the initial income feels modest.

In the early and middle stages of investing, reinvesting dividends is often more effective than taking the cash. It allows the portfolio to grow without needing additional savings and removes the temptation to time new investments.

Focus on dividend growth

Some of the best dividend outcomes come from companies that start with modest payouts but grow them over time.

As earnings rise, dividends can increase, lifting the income generated by the portfolio each year. This is particularly valuable over long periods, as it helps income keep pace with inflation and supports total returns.

Companies such as CAR Group Limited (ASX: CAR) or Lovisa Holdings Ltd (ASX: LOV) show how steady earnings growth can underpin rising shareholder returns without needing aggressive payout ratios.

Use dividends to strengthen the portfolio

Dividends do not always need to be reinvested into the same stock.

As a portfolio grows, dividend income can be redirected toward areas offering better value or diversification at the time. This allows investors to rebalance gradually without selling existing holdings or adding fresh capital.

Over long periods, this approach can improve portfolio resilience and reduce the impact of market cycles, while still benefiting from compounding.

Foolish takeaway

Dividends are not just about income today.

When reinvested consistently and supported by sustainable businesses, ASX dividends can become a powerful engine for long-term wealth creation. By focusing on quality, reinvesting early, and giving compounding time to work, investors can turn regular dividend payments into meaningful long-term outcomes.

The post How to turn ASX dividends into long-term wealth appeared first on The Motley Fool Australia.

More reading

• Here are the 3 ASX ETFs I use for my super fund
• 3 of the best ASX dividend stocks to buy now
• Here are the top 10 ASX 200 shares today
• Are Woolworths shares a blue-chip buy?
• How to build an ASX share portfolio for income and growth

Motley Fool contributor James Mickleboro has positions in Lovisa, Universal Store, and Woolworths Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Lovisa. The Motley Fool Australia has positions in and has recommended Dicker Data and Woolworths Group. The Motley Fool Australia has recommended CAR Group Ltd, Lovisa, and Universal Store. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If I were lucky enough to have $10,000 to put to work today, below are three ASX shares I would seriously consider. 

They may not suit everyone. But each offers a different way to gain exposure to quality businesses with clear drivers that I think are worth backing from here.

BHP Group Ltd (ASX: BHP)

BHP is one of the world’s largest diversified miners, with exposure to iron ore, copper, metallurgical coal, and other commodities that remain critical to global economic activity. While commodity prices can fluctuate, I think BHP’s scale, asset quality, and balance sheet strength give it a level of resilience that few miners can match.

Another thing I like about BHP is its capital discipline. The company has been clear about prioritising balance sheet strength and shareholder returns rather than chasing growth at any cost. That makes its dividend stream more attractive than that of many other cyclical businesses, even though payouts can vary with commodity prices.

For me, BHP offers a way to gain exposure to global demand and long-term themes such as electrification and infrastructure spending, while still owning a business that can generate significant cash flow today.

Xero Ltd (ASX: XRO)

Xero sits at the opposite end of the spectrum to BHP, and that is exactly why I find it appealing.

This is a business built around recurring revenue, high customer retention, and a product that is deeply embedded in the day-to-day operations of small businesses and accountants. Once a customer adopts Xero’s platform, it is hard to switch to a rival platform.

What interests me most about Xero is its growth potential. The company has been investing heavily in product development and international expansion, particularly in markets like the United States. If that investment continues to translate into operating leverage over time, earnings growth could accelerate.

And with Xero shares down materially from their highs amid tech sector weakness, I think they are the best value they have been in a long time and their current valuation does not reflect the company’s quality and growth potential.

Flight Centre Travel Group Ltd (ASX: FLT)

Flight Centre is a stock that I think is often misunderstood.

Many investors still view it purely as a cyclical travel business that rises and falls with consumer confidence. While that is partly true, I think it underestimates how diversified Flight Centre has become, particularly in corporate and business travel.

The company has spent recent years restructuring its operations, investing in technology, and focusing on margins rather than just volume. As travel demand normalises, I think that leaner cost base gives it the potential to deliver stronger profitability than in past cycles.

Flight Centre also offers something different from many growth stocks. It has the ability to generate meaningful cash flow and, over time, return capital to shareholders. That combination of recovery potential and income appeal is why it earns a place on my buy list today.

Foolish takeaway

There are plenty of quality shares on the ASX, and no single portfolio will ever be perfect. 

But if I had $10,000 to invest today, I think these three offer an appealing mix of resilience, growth potential, and long-term relevance. 

They would not be buys for a quick win, but businesses I would feel comfortable owning and holding as the next phase of the market unfolds.

The post Why I would buy BHP, Xero, and Flight Centre shares today appeared first on The Motley Fool Australia.

More reading

• 3 ASX shares tipped to climb over 100% in 2026
• 2 ASX growth stocks set to skyrocket in the next 12 months
• 5 things to watch on the ASX 200 on Thursday
• 4 reasons why I think BHP shares are a must-buy for 2026
• Top brokers name 3 ASX shares to buy today

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 Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended BHP Group and 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.

On Wednesday, the S&P/ASX 200 Index (ASX: XJO) had another poor session and tumbled into the red. The benchmark index fell 0.35% to 8,782.9 points.

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

ASX 200 to rebound

The Australian share market looks set to rebound on Thursday following a strong night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 24 points or 0.27% higher this morning. In late trade in the United States, the Dow Jones is up 1.6%, the S&P 500 is up 1.5%, and the Nasdaq is pushing 1.6% higher.

Oil prices rise

ASX 200 energy shares such as Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a good session on Thursday after oil prices rose overnight. According to Bloomberg, the WTI crude oil price is up 0.4% to US$60.61 a barrel and the Brent crude oil price is up 0.5% to US$65.22 a barrel. This was driven news of a force majeure at the Tengiz oilfield.

Buy DroneShield shares

DroneShield Ltd (ASX: DRO) shares could be heading higher according to analysts at Bell Potter. This morning, the broker has retained its buy rating on the counter-drone technology company’s shares with an improved price target of $5.00. It said: “We believe the key catalyst for DRO in CY26 is the potential awards stemming from the US Public Safety market, notably from the US$250m funds allocated to states hosting the FIFA World Cup and the America 250 events for C-UAS protection. We would be disappointed if DRO did not receive material awards from these events.”

Gold price rises again

ASX 200 gold shares including Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) could have a good session on Thursday after the gold price continued its rise overnight. According to CNBC, the gold futures price is up 1.1% to US$4,818.5 an ounce. Strong safe haven demand has given the precious metal a lift.

BHP given hold rating

The team at Morgans thinks that BHP Group Ltd (ASX: BHP) shares are fairly value right now. In response to its quarterly update, the broker has retained its hold rating with an improved price target of $47.90. It said: “We have applied upgraded metal price forecasts, driving the upgrade in our target price but not transforming the value proposition, with BHP still appearing fair value. In our sector investment strategy we view BHP as a core holding on earnings and portfolio quality grounds as well as dividend profile, we maintain our Hold rating.”

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

More reading

• 2 ASX shares to buy for growth and dividends
• When do you sell an ASX 200 share that’s tripled in value?
• Here are the top 10 ASX 200 shares today
• Buy, hold, sell: Northern Star, Pro Medicus, and Web Travel shares
• Why 4DMedical and these ASX shares are up 200%+ in just a year

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 DroneShield. 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.

These 2 ASX shares both have lost some serious ground over 6 months. The share price of Santos Ltd (ASX: STO) and Sonic Healthcare Ltd (ASX: SHL) respectively tumbled 22% and 18%.

Here are two very different ASX shares that tick both the potential growth and income boxes — one cyclical, one defensive. Let’s check them out.

Santos Ltd (ASX: STO)

Let’s start with the larger ASX 200 share, Santos – market capitalisation $20 billion – has had a bumpy run. But beneath the volatility sits a business entering a crucial growth phase.

The oil and gas producer has spent years pouring capital into major projects, and those investments are now close to paying off. The ASX 200 share’s biggest strength is scale and asset quality.

Santos controls long-life LNG and gas assets across Australia and Papua New Guinea, with new developments such as Barossa and Pikka set to materially lift production over the next few years.

As these projects move from build to cash-generation mode, free cash flow is expected to improve sharply. That opens the door to both higher shareholder returns and balance-sheet repair.

The flip side is commodity exposure. Santos’ earnings and share price remain tightly linked to oil and gas prices, which can turn quickly. Project execution risk also lingers, especially given regulatory scrutiny and cost pressures across the energy sector.

On dividends, Santos operates a flexible, cash-flow-linked policy. Management has committed to returning a large portion of free cash flow to shareholders as conditions allow, rather than locking in a fixed payout.

That approach can lead to uneven dividends year to year, but at current prices the yield of 5.96% remains attractive. If energy prices hold and new projects deliver as planned, there’s scope for both rising dividends and a share price recovery.

Brokers are backing Santos’ income and growth outlook. Most analysts rate the ASX energy share a buy, with an average 12-month price target of $7.33. That is 21% upside from the current $6.06 share price.

Sonic Healthcare Ltd (ASX: SHL)

Sonic Healthcare offers a very different proposition: steady earnings, defensive characteristics, and dependable dividends. The ASX diagnostics share operates pathology and imaging businesses across Australia, Europe, the US and the UK, giving it geographic and revenue diversification few ASX healthcare peers can match.

Its core strength is resilience. Demand for medical testing doesn’t disappear in economic downturns, and long-term drivers such as ageing populations and preventative healthcare support steady volume growth. Sonic has also grown through disciplined acquisitions, adding scale while protecting margins.

However, this is not a fast-growth stock. Cost inflation, labour shortages and periodic integration issues can weigh on earnings momentum. The market also tends to lose patience when growth slows, which can cap near-term share price performance.

Sonic’s dividend policy is shareholder-friendly and predictable. It pays dividends twice a year and has a long track record of maintaining or gradually increasing payouts. The dividend yield is solid for a healthcare stock, 5.05% at current levels. It’s supported by recurring cash flows rather than one-off windfalls.

For investors, the ASX 200 share offers modest growth potential alongside income stability.  Bell Potter has initiated coverage with a buy rating and a $33.30 price target, implying 30% upside from the current $23.33 share price.

This is more bullish than the market consensus target of $26.04, almost 12% upside. Including a forecast 5% dividend yield, total returns could be well over 15%.

The post 2 ASX shares to buy for growth and dividends appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• Down 22% with 6% yield: Are Santos shares a serious buy?
• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday
• Is the Santos share price too cheap to ignore?

Motley Fool contributor Marc Van Dinther has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Sonic Healthcare. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Vanguard will pay dividends to investors in the Vanguard US Total Market Shares Index ETF (ASX: VTS) today.

The official dividend amount is 95.08 US cents per unit.

Vanguard did the currency conversion last Friday, and the AUD payment today will be $1.4155 per unit.

What is the VTS ETF?

The Vanguard US Total Market Shares Index ETF provides exposure to the full US stock market, or about 3,500 companies.

VTS seeks to mirror the performance of the CRSP US Total Market Index (NASDAQ: CRSPTM1) before fees.

An investment in the VTS ETF includes some of the world’s biggest companies.

They include the Mag 7 stocks — Nvidia Corp (NASDAQ: NVDA), Apple Inc (NASDAQ: AAPL), Microsoft Corp (NASDAQ: MSFT), Amazon.com, Inc. (NASDAQ: AMZN), Alphabet Inc Class A (NASDAQ: GOOGL), Alphabet Inc Class C (NASDAQ: GOOG), Meta Platforms Inc (NASDAQ: META), and Tesla Inc (NASDAQ: TSLA).

There’s also two new favourites among Aussie investors, AI and defence software company Palantir Technologies Inc (NASDAQ: PLTR) and semiconductor stock Advanced Micro Devices Inc (NASDAQ: AMD).

There’s also Warren Buffett’s Berkshire Hathaway Inc Class A (NYSE: BRK.A) and Berkshire Hathaway Inc Class B (NYSE: BRK.B).

How did VTS perform in 2025?

US stocks outperformed ASX 200 shares for a third consecutive year in 2025.

At the time of writing, the Center for Research in Security Prices (CRSP) has not yet released total return data for the CRSPTM1 index.

However, we can use other US stock indices to get an idea of how the total US market, which is what VTS captures, performed.

The US benchmark index, the S&P 500 Index (SP: INX), soared 16.39% and delivered total returns of 17.88%.

The Nasdaq Composite Index (NASDAQ: .IXIC) did even better, rising 20.36% with total returns of 21.33%.

The Dow Jones Industrial Average Index (DJX: .DJI), which tracks 30 S&P 500 stocks, rose 12.97% and gave a total return of 14.92%.

By comparison, S&P/ASX 200 Index (ASX: XJO) shares rose 6.8% and produced total returns of 10.32%.

So, there was a clear outperformance of US stocks vs. ASX shares.

However, those stronger returns did not translate directly to VTS holders because the stronger AUD against the USD diluted them.

After conversion into AUD, the VTS returned 8.79% to Aussie investors last year, or 8.76% after the 0.03% management fee.

That’s less than the ASX 200’s total return of 10.32%.

This highlights the role of the currency exchange in ASX ETF returns.

For the past few years, the currency exchange magnified the returns for VTS investors, but things have now changed.

In 2025, the Aussie dollar rose from about 62 US cents in January to about 67 US cents by December.

Investors may wish to consider hedged ETF options if they believe the AUD is likely to remain stronger than the USD for a prolonged period.

Vanguard does not offer a hedged version of the VTS ETF.

The post Own VTS ETF? It’s a great day for you! appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen 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 Advanced Micro Devices, Alphabet, Amazon, Apple, Berkshire Hathaway, Meta Platforms, Microsoft, Nvidia, Palantir Technologies, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Advanced Micro Devices, Alphabet, Amazon, Apple, Berkshire Hathaway, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Reaching the big 4-0 is a milestone for several reasons. It’s often when individuals reflect on the achievements they’ve made in their lives so far, and also when they set goals for the future.

Essentially, it’s the milestone between childhood and retirement. And when you think about retirement, you think about superannuation.

Reaching retirement age might sound exciting, but what if you don’t have enough money in your superannuation to fund your lifestyle when the time finally comes? 

Here’s a rundown of exactly what you need at the age of 40, and how to catch up if you’re already behind.

What is the average superannuation balance at age 40?

There isn’t an exact figure for age 40, but according to Rest Super, the average superannuation balance for Australians aged 40-44 is $140,680 for men and $109,209 for women. 

Although at the age of 40, it would be safe to assume that something between the figure of the average for the bracket below (35-39) and the figure for 40-44 year olds would be acceptable. For men aged 35-39 the average super balance is $96,112, and for women it’s $76,020.

How does yours compare?

What do you need for a comfortable retirement?

According to the latest ASFA Retirement Standard, the benchmark for a comfortable retirement, is just over $54,000 per year for a single person and $76,000 per year for a couple.

To support that level of spending, ASFA estimates you’ll need a super balance of roughly $595,000 as a single and $690,000 as a couple by the age of 67.

The figures also assume that you own your own home outright and assume you’re receiving the age pension.

For a modest retirement, you’ll need around $100,000 more. But if you don’t own your own property and will be renting privately in retirement, for that same modest lifestyle you’ll need a much higher superannuation balance.

For a renter with a modest lifestyle, which translates to $49,676 a year for singles and $67,125 a year for couples, their superannuation balance should be $340,000 to $385,000 by age 67.

However, unfortunately, the gap between the average Australian superannuation balance, and what is needed to fund retirement, is significant.

How to catch up if your superannuation is behind

The good news is, there are things Australians can do to boost your superannuation balance before it’s too late.

You can make extra concessional or non-concessional contributions, whether this is salary sacrificing or after-tax (within your annual limits). 

You can take advantage of any government initiatives to match contributions and propel your balance just that little further.

It’s important to make sure your super fund is performing well. Even slightly underperforming a benchmark such as the S&P/ASX 200 Index (ASX: XJO) over a long period of time can greatly impact the end balance.

And of course, review your investment strategy to ensure it actually aligns with your retirement goals and risk appetite.

The post Here’s the average Australian superannuation balance at 40. How does yours compare? appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.