ASX dividend shares that offer defensive and reliable earnings could be a smart call at a time when the outlook is uncertain in relation to inflation, AI outcomes and so on.

If an ASX dividend share can provide investors with a pleasing and rising payout, as well as long-term earnings growth, then it could generate pleasing total shareholder returns.

At the current valuations, I think the two names below can outperform the S&P/ASX 200 Index (ASX: XJO) over the medium term.

Sonic Healthcare Ltd (ASX: SHL)

Sonic Healthcare has an impressive market share in the pathology sector with a presence in countries like Australia, Germany, the US, the UK, Switzerland and other markets.

It provides a very valuable service to the population of those countries, which I’d describe as very defensive because there’s a certain level of demand each year – everyone gets sick sometimes.

Sonic Healthcare is investing in technology to help provide the next level of pathology services, with AI potentially assisting the company to be more efficient (in terms of costs) and also deliver a better outcome for patients.

Not only is the company naturally benefiting from ageing and growing populations, but it also occasionally makes acquisitions to boost its scale and geographic exposure.

The ASX dividend share has increased its payout in most years over the past three decades and the company’s leadership wants to continue the progressive dividend policy.

Excluding franking credits, its FY25 payout translates into a dividend yield of around 4.75%. I think the FY26 payout will be larger and the business looks a lot cheaper after falling close to 20% over the past year.

Charter Hall Long WALE REIT (ASX: CLW)

Commercial rental properties can provide investors with defensive operating earnings thanks to the resilient tenants that are utilising those buildings.

One of the most pleasing things about this real estate investment trust (REIT) is that it has a long weighted average lease expiry (WALE) of around nine years – the tenants are signed on to pay rental income for the long-term.

Not only is the rental income reliable, but it’s also growing, with the contracts having annual rental income growth linked to inflation or they have fixed increases.

The portfolio of properties is diversified across a number of sectors including hotels, service stations, industrial and logistics, office, data centres and social infrastructure. This helps protect against sector risk and allows the business to search for the best opportunities.

Charter Hall Long WALE REIT expects to hike its FY26 payout to 25.5 cents per security, translating into a forward distribution yield of 6.25%. The ASX dividend share has dropped 12% since September, shown above, providing a sizeable boost to the yield on offer and making the valuation more appealing.

The post These 2 ASX dividend shares are great buys right now 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 recommended Sonic Healthcare. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If you are looking to bolster your portfolio with some growing ASX 200 shares, then it could be worth taking a look at the two in this article.

That’s because analysts rate them as top buys and are expecting them to generate big returns for investors over the next 12 months.

Here’s what they are recommending to clients:

ResMed Inc. (ASX: RMD)

The first ASX 200 growth share that could be a strong buy is ResMed. It is a world leader in sleep apnoea treatment and respiratory care, serving a patient base that continues to grow as awareness improves and diagnosis rates increase.

More than one billion people globally are estimated to suffer from sleep apnoea, yet the vast majority remain undiagnosed. As testing becomes easier and healthcare systems catch up, that number represents a massive multi-decade growth runway for ResMed.

The company’s device ecosystem, software solutions, and cloud-connected monitoring tools create high switching costs and drive recurring revenue. This has seen ResMed continue to expand its margins, improve operating leverage, and grow its earnings at a solid rate.

With ageing populations, rising obesity rates, and increased global focus on respiratory care, ResMed is well placed to remain a dominant global medical technology company for many decades.

The team at Macquarie is bullish on this name. It recently put an outperform rating and $49.20 price target on its shares. This implies potential upside of 30% for investors over the next 12 months.

Web Travel Group Ltd (ASX: WEB)

Web Travel could be another ASX 200 growth share to buy. Following the spin-off of its online travel business into a separate listing, the company’s focus is now on WebBeds.

It is a platform that connects hotels and other travel service suppliers to a distribution network of travel buyers all over the world.

Travel demand continues to normalise globally, and wholesale accommodation platforms are benefiting from strong cross-border migration, rising mobility, and the shift toward digital booking ecosystems.

WebBeds’ business model offers high scalability and attractive operating leverage. And after a mixed few years, the company’s simplified structure, improving market conditions, and clearer strategic direction have positioned it well for a meaningful rebound.

Many analysts believe earnings could accelerate from here. One of those is Ord Minnett, which recently put a buy rating and $7.00 price target on the company’s shares. Based on its current share price, this implies potential upside of over 40% for investors from current levels.

The post Analysts say these ASX 200 shares could rise 30% to 40% appeared first on The Motley Fool Australia.

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

Broker Bell Potter released new reports yesterday initiating coverage on two ASX small-cap stocks. 

Small-cap stocks may appeal to investors as they can have significant growth potential compared to more established, blue-chip shares.

However it’s important to understand they can have significant volatility, as many of these small companies can be pre-profit, relying on funding, clinical trials etc. 

With that being said, here are two that have buy recommendations from the team at Bell Potter. 

Saluda Medical (ASX: SLD)

Saluda Medical is a commercial-stage medical device company commercialising spinal cord stimulation (SCS) therapy globally.

According to yesterday’s report, Saluda Medical is currently a single-product company, centred around its differentiated SCS product called the ‘Evoke System’. 

The company has been commercialising the Evoke System for ~3 years in the US, and ~5 years in Europe and Australia, for the treatment of patients with chronic pain of the trunk and/or limbs.

Bell Potter has initiated coverage on this small-cap stock with a buy recommendation (speculative) for several key reasons: 

• Saluda’s patented closed-loop system delivers more consistent and durable pain relief than conventional devices. In its Phase 3 trial, no patients had devices removed due to lack of efficacy over three years.
• IPO funds will expand the US sales force to >150 reps by FY26, supporting broader geographic coverage, deeper physician adoption, and a paddle lead launch in FY27 targeting neurosurgeons.
• US revenue exceeded US$50m in under three years (~2% of the US$2.2b SCS market). Bell Potter forecasts revenue approaching US$290m by FY29, with US market share rising to ~9%.
• It has an attractive valuation trading at ~1.7x FY26 EV/Revenue (3.0x P/S), a discount to peers (~5x). Successful execution and EBITDA breakeven by FY29 could support meaningful re-rating.

Based on this guidance, Bell Potter has a price target of $2.80 on this ASX small-cap stock. 

That indicates an upside of more than 88% from yesterday’s closing price of $1.485. 

American Rare Earths Ltd (ASX: ARR)

American Rare Earths is an Australian exploration company targeting the discovery and development of strategic technology mineral resources in the USA and Australia.

The team at Bell Potter have initiated a buy recommendation (speculative) on this ASX small-cap stock. 

In yesterday’s report, the broker said the company is uniquely positioned to capitalise on the US’ Strategic focus to reduce reliance on a China dominated rare earth supply chain. 

The Cowboy State Mine offers a long-term solution within the US to decouple from external sources of rare earths, particularly heavy rare earths DyTb.

Essentially, Cowboy State Mine could help the US secure domestic supply of dysprosium and terbium, reducing reliance on China for these critical minerals.

Bell Potter initiated its coverage with a price target of $0.65. 

This indicates an upside of more than 94% from yesterday’s closing price of $0.335.

The post Top broker just initiated coverage on two ASX small-cap stocks with a buy recommendation 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 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.

2025 could be the year investors learned patience the hard way, with these 2 bruised ASX 200 stocks proving stern teachers.

CSL Ltd (ASX: CSL) and James Hardie Industries Plc (ASX: JHX) have been belted in the past 12 months. The healthcare giant lost 37% in market value and the world’s leading producer of fibre cement building products scored even worse at 43%.

For investors with patience — and a strong stomach — these 2 heavyweight ASX 200 stocks may be setting up for redemption in 2026.

CSL Ltd (ASX: CSL)

Let’s start with CSL. The $87 billion healthcare company has endured a bruising year, with its share price sliding sharply as investors fretted over plasma collection costs, slower margin recovery and uneven vaccine demand.

For a company long treated as a “buy it and forget it” stock, the fall from grace has been jarring. But the ASX 200 stock hasn’t forgotten how to grow. Plasma volumes are improving, cost pressures are easing and management remains confident margins can normalise over time.

CSL still dominates global plasma therapies, owns enviable intellectual property and generates rivers of cash. If execution improves even modestly, 2026 doesn’t need to be heroic. It just needs things to be less bad for sentiment to turn.

Of course, risks remain. CSL must prove margin recovery isn’t just a slide deck promise. However, most analysts are bullish on the healthcare share. The average 12-month price target is $235, which implies a 35% upside.

James Hardie Industries Plc (ASX: JHX)

Then there’s James Hardie, the poster child for cyclical pain. Shares have been smashed as higher interest rates  slowed US housing activity, earnings forecasts were trimmed and the recent acquisition of the Us business Azek was viewed as an expensive one.

Investors hate uncertainty, and the $18 billion building materials business has had plenty of it.

Yet writing off James Hardie has rarely been a winning long-term strategy. The ASX 200 stock remains deeply leveraged to the US housing cycle, and history suggests that cycle eventually turns.

Add in James Hardie’s dominant market position in fibre cement, strong pricing power and long-term structural growth from renovation and rebuilding, and the 2026 outlook starts to look a lot less bleak.

TradingView data shows that most analysts recommend a hold or (strong) buy on James Hardie. Some expect the ASX 200 stock to climb as high as $45.11, which implies a 48% upside at the time of writing.

However, the average share price target for the next 12 months is $36.28. That still suggests a possible gain of almost 36%.   

The post Why these 2 battered ASX 200 stocks could shine in 2026 appeared first on The Motley Fool Australia.

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

Treasury Wine Estates Ltd (ASX: TWE) shares crashed 9.29% to end the day at $4.98 per share on Wednesday afternoon. 

The drop means the shares have now fallen 12.87% over the past month and are a whopping 55.85% lower than this time last year. It’s been a relatively steady and consistent decline over the past 12 months too. It’s currently the worst performer on the ASX 200 Index.

What has happened to Treasury Wine Estates shares?

The company released an investor update and outlook for the first half of FY26 on Wednesday morning.

The struggling wine giant said that trading conditions have weakened in recent months, particularly in the US and China. And as a result, near term improvement is now considered unlikely. Its expectations for sales volume growth have also moderated.

The company also said that customer inventory levels in both markets are currently above optimal levels. In China, parallel import activity has also been disrupting pricing for its flagship Penfolds brand, prompting management to take decisive action.

Treasury Wine Estates now expects its earnings before interest and tax (EBIT) to be between $225 million and $235 million in the first half of FY26. Although it still anticipates better performance in the second half of the year. 

Clearly investors were unimpressed with the result and have sold off the stock ahead of any potential further downside.

Is there any upside ahead or is it time to sell the shares?

Despite the consistently dwindling share price, analysts are still remarkably optimistic about Treasury Wine Estates shares. Although this might change after yesterday’s announcement. I’d sit tight for now until the dust has settled but I’m quietly optimistic that the latest result is mostly priced-in by the market already.

Data shows that 8 out of 17 analysts have a buy or strong buy rating on the stock. Another 8 have a hold rating and 1 analyst has a strong sell rating. 

As it stands, some analysts still expect the share price to storm higher over the next 12 months too. The average target price is $7.37, which implies a potential 48.08% upside at the time of writing. Although this could be as high as $9.90, which implies a whopping 98.8% upside from the current trading price.

The team at Morgans recently confirmed its hold rating for the wine stock and set a $6.10 price target for the next 12 months. The broker noted earlier this month that it expected that the 1H FY26 result will be particularly weak and therefore the broker has made “large revisions to our forecasts and stress that earnings uncertainty remains high”.

The post Treasury Wine Estates shares slump 56% this year. Buying opportunity or time to sell up? 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 positions in and has recommended Treasury Wine Estates. The Motley Fool Australia has positions in and has recommended Treasury Wine Estates. 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) lithium share Vulcan Energy Resources Ltd (ASX: VUL) enjoyed a strong run on Wednesday.

Amid a broader rally among global lithium miners, Vulcan Energy shares closed up 7.05% yesterday, trading for $3.95 apiece. The ASX 300, meanwhile, ended the day down 0.12%.

Longer term, Vulcan Energy shares remain down 18% since this time last year, underperforming the 3.67% 12-month gains posted by the benchmark index.

Looking to the year ahead, however, EnviroInvest’s Elio D’Amato believes Vulcan Energy will be much more rewarding for its shareholders (courtesy of The Bull).

Here’s why.

ASX 300 lithium share well-funded

“Vulcan recently secured a €2.2 billion ($A3.929 billion) financing package to fully fund phase one of its Lionheart project,” said D’Amato, who has a buy recommendation on the ASX 300 lithium share.

Lionheart, he explained, is “Europe’s first fully integrated, zero carbon lithium and renewable energy project”. Which is the second reason you may want to add Vulcan Energy shares to your buy list.

According to D’Amato:

Funding enables immediate construction. The package includes €1.185 billion in senior debt, €204 million in German government grants, €150 million from KfW, plus strategic equity from HOCHTIEF, Siemens and Demeter.

As for the third reason Vulcan Energy shares could outperform in the months ahead, D’Amato said, “Phase one targets 24,000 tonnes of lithium hydroxide per year. With funding risk removed and execution underway, VUL’s strategic positioning is materially stronger.”

A word from Vulcan Energy’s CEO

Vulcan Energy shares crashed 33.1% on 4 December, the day the ASX 300 lithium share emerged from the trading halt following its funding announcement.

However, investors weren’t selling the company because of the new funding secured via European government grants and senior debt.

Rather, Vulcan Energy separately announced that it had raised around $710 million via an institutional placement. Investors were favouring their sell buttons on the day, as the new shares were issued for $4 apiece, 34.7% below the last closing price.

But Vulcan Energy CEO Cris Moreno was unapologetic about the discounted capital raise.

“The placement will enable Vulcan to transition from development phase into execution phase with project execution of Project Lionheart due to commence in the coming days,” he said.

Moreno added that the ASX 300 lithium share is producing “a lighthouse project for Europe”.

According to Moreno:

Lionheart is set to redefine lithium production, delivering Europe’s first fully domestic and sustainable lithium value chain. It will also provide a clean and reliable source of renewable energy for local communities and industries in Germany’s Upper Rhine Valley.

The post 3 reasons to buy this ASX 300 lithium share today appeared first on The Motley Fool Australia.

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

ASX real estate stock Cedar Woods Properties Ltd (ASX: CWP) drew significant investor attention yesterday. 

The Australian property development company saw its share price rise by an impressive 10% on Wednesday. 

This came on the back of positive guidance out of the company. 

Upgraded guidance 

Cedar Woods Properties upgraded its guidance for FY 2026 again, which marks the second time it has done so this year. 

In October, it upgraded the guidance for its FY26 profits to be 15% better than last year’s net profit, up from the previous guidance of 10%.

Yesterday, the company upgraded this once again, saying FY26 full-year profit is likely to come in “at least” 20% higher than the full-year result for FY25.

The real estate stock has seen its share price grow by more than 60% year to date. 

Bell Potter upgrades

Following the announcement, broker Bell Potter released a new report on this ASX real estate stock. 

The broker said the primary driver of this early upgrade is the acceleration of momentum across the portfolio nationally, with several projects delivering a full years’ worth of price growth within the first half, particularly across WA and QLD land projects. 

It also highlighted improved enquiry and sales volumes in Victoria. 

We believe the 1H skew (BPe 55%/45% 1H/2H) from the timing of settlements provided CWP with clarity and confidence to add a further +5% to earnings growth guidance. In our view, the 1Q upgrade was driven by strong conditions, and this further upgrade was driven by timing and visibility.

The broker also noted a positive outlook for the medium term. 

It said medium-term growth confidence has improved as Cedar Woods Properties’ expanding pipeline (around 30 projects contributing to FY27 earnings versus ~20 in FY25) and another six months of strong price growth are likely to drive better-than-expected revenues and margins. 

Management’s conservative guidance and focus on sustained, repeatable growth further supports confidence that the company can meet earnings growth expectations through FY27–FY28.

Upgraded price target 

Based on this guidance, Bell Potter maintained its buy recommendation on this ASX real estate stock. 

It also increased its price target to $10.00 (previously $9.70). 

From yesterday’s closing price of $8.80, this indicates a further upside of 13.64%. 

We increase our FY26-FY28 EPS estimates by +3% to +5%. We maintain our Buy recommendation on CWP and increase our price target by +3.1% to $10.00. In our view CWP is still undervalued by the market (SP -2.5% QTD despite +10% today), trading on 12.5x despite clear visibility for strong growth over the medium term (+13% 3yr EPS CAGR). 

The broker said there is potential for ASX 300 inclusion in March 2026. 

The post How does Bell Potter view this real estate stock after yesterday’s 10% rise? 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 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.