With emerging headwinds for consumer discretionary shares, analysts at Bell Potter have provided updated guidance on where to look within a choppy sector. 

Despite economists now tipping an increase for the cash rate at this month’s RBA meeting, Bell Potter still sees opportunity for a few consumer discretionary shares. 

Sector overview

In the broker’s Monthly Bell report, the analyst team said they have seen varying performance recently between discretionary categories with technology/electronics, wellness & sports and services such as cafes & recreation leading the way.

Meanwhile others such as mass apparel & lifestyle footwear and furniture & household goods are lagging.

While the pause in interest rate cuts in Australia limits catalysts for the Consumer Discretionary sector, we continue to prefer key beneficiaries from the rate cuts seen so far and category outperformers. We continue to look for retailers with differentiating customer value propositions & balance sheet strength and support names who may grow via market share expansion with more diverse customer demographics.

The report said to expect another year of growth in the promotional period around Black Friday. Beneficiaries are expected to be technology products, household appliances and gifting driven purchases. 

The 2025 projections for the Black Friday seasonal period in Australia (as per Roy Morgan and Australian Retailers Association) sees a further 4% increase in the 4-day weekend retail spend compared to a 3% increase in 2024.

The broker listed three high conviction consumer discretionary with buy recommendations. 

Adore Beauty Group Ltd (ASX: ABY)

Bell Potter said key drivers for business growth are its continued store-rollout targeting a network of 25+ stores, along with its private label brands and high-margin retail media arm contributing to margin expansion and thus a strong earnings trajectory. 

It views this consumer discretionary stock as well positioned to take advantage of the high performing beauty category within the Australian market.

Target price: $1.25. 

Harvey Norman Holdings Ltd (ASX: HVN)

As a leading household goods retailer in Australia and growing presence globally, Bell Potter said Harvey Norman has seen modest growth in its independent franchisee base in Australia and expanded its company operated global store print over the last 5 years. 

It sees Harvey Norman as one of the most diversified retailers in terms of both categories and regions, while benefitting from both as a quasi-retailer/landlord and channel mix via company operated stores and franchising.

Target price: $8.30. 

Universal Store Holdings Ltd (ASX: UNI)

The company has ~85 stores under its flagship ‘Universal Store’ brand and is expanding private label brands by growing the stand-alone format of ‘Perfect Stranger’ and ‘Thrills’ with more than 100 stores in total.

Bell Potter said at ~18x FY26e P/E (BPe), it sees Universal Store shares as trading at a discount to the ASX300 peer group. Its optimism is justified by the distinctive growth traits supporting consistent outperformance in a challenging category, longer term opportunity with three brands, organic gross margin expansion via private label product penetration (currently ~55%) and management execution.

Target price: $10.50.

The post 3 top consumer discretionary shares from Bell Potter appeared first on The Motley Fool Australia.

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

Brokers are always looking for buy ideas; the ever-changing share prices (and updates) give investors the opportunities to buy appealing ASX shares that are undervalued.

When a broker thinks a stock is a buy, that’s an interesting signal. When numerous analysts are excited about an ASX share, it could indicate an appealing investment opportunity.

We’re going to look at three of the most buy-rated businesses on the ASX right now.

Orica Ltd (ASX: ORI)

According to CommSec’s collation of analyst opinions, there are currently 14 buy ratings on the business.

Broker UBS describes Orica as the world’s largest supplier of commercial explosives and blasting systems, servicing both the mining and infrastructure sectors. Its customers are from numerous markets, including Australia, Asia, the Pacific, North America, Latin America, Europe, the Middle East, and Africa.

UBS is one of the brokers that rates Orica as a buy, with a price target of $27. That suggests a possible rise of 11% over the next year from where it is at the time of writing.

The broker noted that the ASX share’s recent FY25 result saw operating profit (EBIT) growth across all segments, reflecting improvements in the mix of products and the margin.

Pleasingly, FY26 guidance suggests EBIT growth across all segments. UBS wrote:

Orica is positively leveraged to resilient global mine production activity, and supportive AN prices given relatively balanced global supply. We expect mix and margin improvements from the uptake of premium blasting solutions and technology services, and the integration of recent acquisitions, to drive a 3yr EPS CAGR of +8% (FY25-28E). We see ongoing P/E re-rate potential…

Coles Group Ltd (ASX: COL)

According to CommSec’s collation of analyst opinions, there are currently 10 buy ratings on one of Australia’s largest supermarket businesses and a large player in the liquor space.

UBS is one of the brokers that rates Coles shares as a buy, with a price target of $25. That implies a possible rise of more than 12% within the next year.

The broker likes the business following the company’s FY26 first-quarter update. Coles’ total sales grew 3.9% to $10.96 billion, which is more than what UBS was expecting.

UBS highlighted in a note how Coles is outperforming rival Woolworths Group Ltd (ASX: WOW), along with the benefit of automated distribution centres (ADCs) and customer fulfillment centres (CFCs):

We remain confident superior execution continues as COL leverages recent investments (eg, Witron ADCs – improved availability in NSW & QLD; Ocado CFCs – drove 28% 1Q26 online growth [WOW +13%], with all missions performing well), plus ongoing promotional effectiveness (fewer, better) & sound ranging (increasingly store-led), with these both supply chain enabled.

UBS forecasts $1.25 billion of net profit in FY26 for Coles.

QBE Insurance Group Ltd (ASX: QBE)

According to CommSec’s collation of analyst opinions, there are currently nine buy ratings on the business.

QBE is an insurance business with a presence in North America, Australia and the Pacific, and international.

UBS has a buy rating on the ASX share, with a price target of $24.15. That implies a possible rise of 26% over the next year, at the time of writing.

The broker noted that the 2025 third-quarter update showed FY25’s earnings and the outlook for FY26 “continue to track in-line with expectations” despite a softening in the premium rate cycle.

UBS noted:            

With FY26E COR [combined operating ratio] guidance of ~92.5%… supporting a ~16% ROE outlook, mid-single digit volume growth ambitions retained, investment yields stabilising and A$450m buyback announced (~1.5% shares), its FY26E earnings outlook remains well underpinned. At a 10x FY26E PE (0.54x ASX200, 18% disc to 5yr avg) we continue to see compelling value and retain a Buy rating.

The post Brokers rate these 3 top ASX shares as buys in December 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 Woolworths Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Most investors who come to the ASX seeking passive income from dividends end up buying stocks like National Australia Bank Ltd (ASX: NAB) or Telstra Group Ltd (ASX: TLS).

Whilst there’s nothing wrong with buying blue chip stocks like NAB or Telstra, these shares are currently trading on rather low dividend yields, at least compared to what has, on average, been on offer in years gone by.

That’s why I think passive income seekers might want to consider an exchange-traded fund (ETF) instead.

The BetaShares Dividend Harvester Active ETF (ASX: HVST) is currently trading on a trailing dividend yield of 5.86%.

What’s more, this passive income stock pays out a dividend 12 times a year. Yep, HVST owners get a passive income paycheque every single month. Our 5.86% yield figure includes the 6.52 cents per share dividend distribution due in the middle of this month, for an annual 2025 total of 77.96 cents per unit.

However, whilst this ETF might suit investors looking to get a high yield, it might not be suitable for everyone. Let’s check out how the Dividend Harvester ETF manages to bring in such a sizeable yield.

How does this ASX passive income stock provide its 5.86% yield?

This ASX ETF is not your ordinary, index-hugging passive investment. Instead of holding a relatively consistent portfolio, HVST follows a ‘dividend harvesting’ strategy, as its name implies. This involves buying a passive income stock like Telstra or NAB after it announces a dividend but before it trades ex-dividend. The fund then collects the payout, and later sells the stock, using proceeds to buy its next income payer.

In this way, HVST can provide a relatively large dividend yield to its investors. However, there is a catch.

Buying and selling stocks just to collect dividends doesn’t usually leave any room for capital growth or compounding. As a result, HVST’s overall returns tend to underperform the broader market. In other words, the higher dividends don’t make up for the lost share price appreciation.

To illustrate, HVST units returned a total of 8.82% over the 12 months to 31 October 2025. In contrast,  a simple ASX index fund, the Vanguard Australian Shares Index ETF (ASX: VAS), has returned 12.63% over the same period.

There’s also the cost to consider. HVST’s passive income strategy doesn’t come cheap. Whilst VAS charges a management fee of 0.07% per annum, HVST will set an investor back 0.72% per annum.

As such, the Betashares Dividend Harvester Active ETF might be a good fit for those investors prioritising dividend income. But perhaps not for investors looking for the best overall returns for their portfolios.

The post This ASX passive income share offers a 5.86% yield. Here’s how! appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in Vanguard Australian Shares Index ETF. 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.

Recent share market volatility has led to multiple ASX growth shares dropping significantly in value, giving investors an opportunity to pick them up for a much lower price.

Buying at a lower price doesn’t mean it’s going to recover in the next week (or month) of course, but focusing on growing businesses means we’re more likely to focus on a company that could see its share price rebound at some point.

I believe both of the companies I’m about to highlight are two of the most compelling non-tech ASX growth shares with international growth intentions.

Breville Group Ltd (ASX: BRG)

Breville sells an array of small kitchen appliances and it’s best known for its coffee machines. It owns a few different brands including Breville, Sage, Lelit and Baratza. It also sells coffee beans through its Beanz business.

As the chart below shows, it’s down more than 20% since January 2025 following the developments with US tariffs, so the company has been working hard to move its manufacturing of US products away from China, with a focus on Mexican production.

The ASX growth share delivered revenue and net profit growth of more than 10% in FY25. I’m expecting attractive growth rates to continue in FY27 and onwards.

I believe there could be more adoption of coffee-at-home consumption globally in the coming years, particularly if expansion markets (for Breville) like China, the Middle East and South Korea help materially.

According to the forecast on Commsec, the business could grow earnings per share (EPS) by 13% in FY27, putting it at 28x FY27’s estimated earnings.

Guzman Y Gomez Ltd (ASX: GYG)

GYG is a Mexican food restaurant business with more than 225 locations in Australia and more than 260 globally.

At the end of the FY26 first quarter, it had 227 Australian locations, 22 Singapore restaurants, five Japan locations and seven US restaurants. I’m expecting those numbers to rise in the medium-term.

The ASX growth share has a long-term goal of 1,000 restaurants in Australia over the next two decades, which would be more than a quadrupling over the period. Economies of scale could mean the ASX growth share achieves stronger profit margins over time, significantly boosting the bottom line.  

I think restaurant growth alone could be a stronger driver of the company’s success in the coming years. In the FY26 first quarter, it reported network sales growth of 18.6%, with mid-single digit comparable sales growth across the business.

If Asian network sales can continue growing at a strong double-digit pace over the long-term, GYG could surprise the market and become significantly larger overall.  

With the company willing to provide shareholders with both dividends and a share buyback, I think the ASX growth share looks attractive after falling more than 40% since the start of the year, as the above chart shows.

The post 2 ASX growth shares to buy now while they’re on sale appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Breville Group and Guzman Y Gomez. 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’re a fan of dividend investing as a share market strategy, you might have heard of the term ‘snowball’ to describe the process of building up a stream of passive income from ASX dividend shares.

It refers to the obvious reputation of a snowball rolling down the hill, growing exponentially larger as it collects ever more snow. It’s an apt metaphor for how successful dividend investing can work.

The process is simple. First, an investor buys an ASX dividend share that consistently pays out income every six months (or every quarter or every month in some cases).

The investor then adds to the position when they can. But they also reinvest any dividends they receive back into buying more shares. Now that the investor has more shares to their name, the next time a dividend is paid out, they receive even more dividend income. The process is repeated, and the snowball grows ever larger. Eventually, it will be so large that it can help make our investor fabulously wealthy, and perhaps even fund an early retirement.

That’s the idea, anyway.

But today, I thought it would be worthwhile to go through how this might actually look in action.

How to get your ASX dividend snowball rolling

We’ll use a hypothetical company for this exercise, just to keep things simple. We’ll assume that our company starts at $1 per share, and pays out a 4 cents per share dividend in its first year, which we will dutifully reinvest to buy more shares.  Every year, its dividend will increase by 4%, and its share price by 5%, which is roughly in line with what the S&P/ASX 200 Index (ASX: XJO) has historically delivered.

After investing a hypothetical ‘life savings’ of $15,000 in our first year, we committed to buying an additional 3,000 shares every year. Our rising salary from our day jobs will hopefully help in this regard, given that the cost of buying 3,000 shares will go up 5% annually.

Here’s what it looks like if an investor follows this pattern for 35 years:

Passive income compounding in action

As you can see, the effects of compounding start slowly, but become more and more powerful as time goes on. To illustrate, between our first and second year, our investor only got a $172.57 passive income pay rise. But between years 34 and 35, the increase was worth almost $4,000 alone.

Another thing to note is that our investor laid down just over $285,000 in capital over this 35-year period. Yet by the end of it, they had a portfolio worth $1.76 million, spitting out more than $50,000 in passive income annually. That’s your snowball in action.

Finally, it is worth noting that this model assumes many things for the benefits of simplification, which aren’t accurate to real-life investing. For one, share prices do not go up like clockwork every year. Nor do dividend payments in most cases. One year might see a share rise 12%, only to fall by 8% the next. But for quality companies, and every ASX index fund, the long-term trajectory has always been up. As you can see above, the sooner you start investing in quality stocks or index funds, the wealthier you will be, and the more passive income you will bring in.

The post ASX dividend shares: How to snowball your passive income appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen 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.

After multiple rate cuts by the RBA in 2025, I think this could be a good time to look at high-yield ASX dividend stocks for income.

Term deposit interest rates have reduced, making the yields on offer from some businesses much more appealing.

Some businesses with higher yields can be a risk if those payouts are cut. What’s the appeal of an ‘income stock’ if the income suddenly drops significantly or disappears entirely? I think the three stocks below have large and consistent dividends.

GQG Partners Inc (ASX: GQG)

GQG is one of the largest fund managers on the ASX, which provides investors with four main strategies: US shares, global shares, international shares (excluding the US) and emerging market shares.

In recent times, GQG has been defensively positioned with its funds’ portfolios because of worries about AI-related valuations. It has recently been vindicated by that decision with plenty of tech/growth stocks falling back. Prior to that, GQG’s funds had a long-term track record of outperforming its benchmarks.

I think the ASX dividend stock is still significantly undervalued after rising more than 20% in less than a month. It currently has an annualised dividend yield of 12.7% based on the latest announced quarterly dividend and it’s trading at 7x its annualised distributable profit, which I think is very cheap if its funds under management (FUM) grows over the long-term.

Shaver Shop Group Ltd (ASX: SSG)

Shaver Shop sells a wide variety of male and female premium shaving items from its store network of more than 120 stores.

The company’s position in the market means that it has been able to secure a number of exclusive agreements with certain shaving brands, giving customers more of a reason to shop at the stores.

Excitingly, the high-yield ASX dividend stock is rolling out products for its own brand called Transform-U to fill gaps in Shaver Shop’s item “range of quality, performance and/or price point driven”. Transform-U is steadily adding new products to its range, which generates a higher gross profit margin.

On the dividend side of things, it increased its dividend every year since 2017, aside from FY24 when it maintained the dividend. It grew the annual dividend per share to 10.3 cents in FY25, translating into a grossed-up dividend yield of 9.9%, including franking credits.

Rivco Australia Ltd (ASX: RIV)

Rivco Australia (formerly know as Duxton Water Ltd) is a company that owns water entitlements which are leased to irrigators on short or long-term leases.

I like this high-yield ASX dividend stock as a way to indirectly invest in the Australian agricultural sector, which is an important part of the economy.

It can benefit from both the leasing income and a potential rise in the value of water entitlements over time.

Pleasingly, the business has increased its half-year payout every six months since 2017. Its latest paid dividends equate to a grossed-up dividend yield of 7.25%, including franking credits.

The post 3 high-yield ASX dividend stocks that are screaming buys right now appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Rivco Australia. 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 Gqg Partners and Shaver Shop Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Meta Platforms (NASDAQ: META) is a company many of us have close contact with daily. That’s because it’s the owner of some of the world’s most commonly used apps: Facebook, Messenger, Instagram, and WhatsApp. About 3.5 billion people around the globe use at least one of these daily. 

The tech giant doesn’t consider itself just a social media company, though. In recent years, it’s made major steps in the world of artificial intelligence (AI) — for example, it’s developed its own large language model, and this tool powers certain Meta products, like the company’s AI assistant.

So, owning Meta stock offers you access to a social media titan as well as a potential winner in the exciting field of AI. But should you wait to get in on this player? No — Here’s one compelling reason to buy Meta shares hand over fist right now.

A solid earnings track record

It’s important to note that Meta’s well-established social media business has helped it produce a long history of earnings growth. Advertisement across Meta’s apps drives revenue, as many sorts of businesses sign up for ads to reach us where they know they’ll find us — on these social media platforms. In the recent quarter, advertising revenue climbed about 25% to $50 billion.

In fact, Meta’s financial picture is so strong that the company is able to expand and invest in AI as well as pay shareholders a dividend.

While AI represents a considerable investment for Meta today, this effort could deliver big down the road. Meta is using AI to improve the overall advertising experience and boost the capabilities of its apps to keep users on them longer — all of this should encourage advertisers to keep coming back to Meta and even increase their ad spending. Finally, the investment in AI could lead to additional products and services that may expand revenue streams in the coming years.

Why buy now?

All of this makes Meta a fantastic stock to own well into the future. But why buy now? Right now, Meta is the cheapest of the Magnificent Seven tech stocks that have driven the S&P 500 to record highs in recent years.

Meta trades for 24x forward earnings estimates, which looks cheap relative to peers and also seems very reasonable considering the complete Meta package.

META PE Ratio (Forward) data by YCharts

This is particularly noteworthy today as investors worry about the formation of an AI bubble, as valuations of many AI stocks have exploded higher. Meta, trading at these levels, looks much less vulnerable than players that are trading at lofty valuations.

This, along with Meta’s strengths in social media and AI ambitions, makes it a stock to buy hand over fist right now.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post 1 compelling reason to buy Meta hand over fist right now appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Adria Cimino has positions in Amazon and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, 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 Alphabet, Amazon, Apple, 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.