If you’re approaching retirement and worried about the prospect of living on the Age Pension, you’re not alone. Although the Pension is one of Australia’s most important social safety nets, it can be difficult to lead a comfortable retirement on $813 a week (couple rate), particularly if you rent or haven’t paid off the mortgage on your home. That’s where ASX dividend income stocks can help.

Unlike cash investments, such as term deposits, dividend-paying stocks can offer meaningful returns that exceed inflation and can increase over time without requiring additional investment.

Investing in any stock carries risks, of course. However, with the right stocks, I believe any Australian can enjoy a more comfortable retirement compared to if they were to rely solely on their cash savings and the Pension.

So today, let’s talk about seven ASX income stocks that I think would serve a retiree, or pre-retiree, for decades to come.

Seven ASX dividend income stocks to supplement the pension

Coles Group Ltd (ASX: COL)

First up, we have a familiar name in Coles. What makes Coles a prudent long-term income investment for someone at or approaching retirement age is its defensive nature. We all need to eat and stock our households with life’s essentials. As long as Coles offers these goods at convenient locations and affordable prices, its business should do well in all economic circumstances. Coles also pays a decent dividend, which has always come with full franking credits attached.

Telstra Group Ltd (ASX: TLS)

Telstra offers many of the attributes that make Coles a compelling retirement stock. Consider how indispensable internet connections and mobile phones are to our modern world. When we also consider that Telstra is the clear market leader in providing both of these services in Australia, its value becomes apparent. Telstra also offers stable dividend income that has always come fully franked.

Commonwealth Bank of Australia (ASX: CBA)

ASX banks are famous for their fat, and mostly fully franked, dividends, and CBA is no exception. CBA has been very expensive for a long time, but has recently come off the boil a little. Although still expensive, the current pricing on this income stock may provide a potentially decent entry point for long-term investors.

Transurban Group (ASX: TCL)

You may be familiar with Transurban as the large company that operates most of the major toll roads in the country. Whilst these tolls might be the bane of motorists, they are a highly reliable source of revenue for Transurban, which makes it a good candidate as an income stock for retirement. Although this stock’s dividends don’t offer much in the way of franking credits, it does usually have a high and stable yield on the table.

Wesfarmers Ltd (ASX: WES)

Wesfarmers is next up. This retail and industrial conglomerate has numerous underlying businesses, making it one of the most diversified ASX blue-chip companies. Its crown jewels are the retailers like Bunnings, OfficeWorks and Kmart, though. Wesfarmers has demonstrated itself to be a conservative and prudent manager of capital for decades. Given the ongoing dominance of this income stock’s underlying businesses, Wesfarmers arguably seems primed to continue its track record.

Lottery Corp Ltd (ASX: TLC)

Lottery Corp is the company behind most lotteries and Keno games across Australia. The temptation to win a jackpot is a universal one, and grips Australians regardless of the state of the broader economy. Given that Lottery Corp has exclusive licenses to run these services in most states and territories for years to come, this makes Lottery Corp a reliable income stock to consider for a retirement portfolio. The company pays a decent, and fully franked, dividend.

Australian Foundation Investment Co Ltd (ASX: AFI)

AFIC is a listed investment company (LIC) that invests in a broad portfolio of underlying shares itself. It has been following the same set of rules for decades and has consistently delivered decent returns for its investors, with a focus on capital protection. The beauty of stocks like AFIC is that the company’s management makes the tough investment decisions for you, making it a true ‘bottom-drawer’ investment. AFIC pays a highly stable dividend income, which is also fully franked.

The post Age Pension worries? 7 income stocks to consider for retirement appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in Wesfarmers. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended The Lottery Corporation, Transurban Group, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Telstra Group and Transurban Group. The Motley Fool Australia has recommended The Lottery Corporation and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Australian share market has delivered a return of approximately 10% per annum over the long term.

While that is a great return, investors don’t necessarily have to settle for that.

Not when there are ASX 200 shares out there that analysts believe could deliver returns that are far greater than this.

With that in mind, let’s take a look at two shares that could be dirt cheap right now:

James Hardie Industries plc (ASX: JHX)

The first ASX 200 share that could offer material upside over the next 12 months is James Hardie.

This building products giant has been dealing with a tough demand environment in North America, as higher interest rates and softer housing activity weighed on volumes. Despite that, the company’s most recent quarterly update signalled that conditions may be stabilising faster than expected.

This caught the eye of analysts at Morgans. They noted that while organic volumes are still declining, the performance was better than feared and could mark a bottoming in the cycle.

Morgans also estimates that James Hardie is now trading on a forward PE ratio of 17x, which it sees as undemanding given the company’s strong market position and the potential for earnings to rebound as the US housing cycle improves.

In response to the update, the broker upgraded James Hardie shares to a buy rating with a $35.50 price target. Based on its current share price of $27.60, this implies potential upside of over 25% for investors.

ResMed Inc (ASX: RMD)

Another ASX 200 share that could rise strongly from current levels is ResMed.

The sleep and respiratory care giant helps millions of people manage sleep apnoea and related conditions. Its technology not only improves quality of life but also reduces healthcare costs, which is a powerful combination that has helped ResMed become a global leader in its field.

The company continues to grow thanks to its recurring revenue model, driven by the sale of masks, accessories, and cloud-connected devices. Its digital health platform, which monitors patient adherence, also provides valuable data that strengthens relationships with healthcare providers and insurers.

And after a period of share price weakness, the stock now looks very attractively priced. Macquarie, for example, has an outperform rating and $49.20 price target on its shares. Based on its current share price of $37.81, this implies potential upside of 30% for investors over the next 12 months.

But it isn’t just about the next 12 months. Given its strong cash flow, robust balance sheet, and expanding pipeline of digital health innovations, ResMed could be a business to own for decades.

The post These ASX 200 shares could rise 25% to 30% appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in ResMed. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended 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.

The ASX stock Shaver Shop Group Ltd (ASX: SSG) has built a reputation as an impressive ASX dividend share, in my view.

The business currently operates 125 Shaver Shop stores across Australia and New Zealand, in addition to its websites.

It says it offers customers a wide range of quality brands, at competitive prices, supported by “excellent staff product knowledge”. The business sources products from major manufacturers. Its specialist knowledge and strong track record in the personal grooming segment enable it to negotiate exclusive products with suppliers.

The company’s core product range includes male and female hair removal products, such as electric shavers, clippers, trimmers, and wet shave items. It also sells items in the categories of oral care, hair care, massage, air treatment, and beauty.

ASX dividend stock credentials

Shaver Shop has delivered investors a very reliable dividend over the last several years.

It increased its dividend each year between FY17 and FY23. The business then maintained its annual dividend per share at 10.2 cents in FY24. It hiked its payout to 10.3 cents per share in FY25.

There are plenty of ASX stocks that have cut their dividend in recent years, including retailers. Shaver Shop, on the other hand, has managed to provide investors with resilience.

According to the forecast on CMC Markets, Shaver Shop is projected to pay an annual dividend of 10.5 cents per share in FY26. That translates into a cash dividend yield of 7.4% and a grossed-up dividend yield of 10.6%, including franking credits.

The business doesn’t pay a monthly dividend, so I think it’s better to consider it an annual goal and then divide it by 12.

For an investor to generate $100 of monthly income, we’re talking about an annual goal of $1,200 cash. This means investors would need to own 11,429 Shaver Shop shares.  

But, if we were to include the franking credits as part of the passive income goal, an investor would need only 8,000 Shaver Shop shares.

Why the outlook is positive

With a dividend yield that large, it doesn’t need to deliver huge capital growth to deliver pleasing overall returns.

The forecast on CMC Markets suggests that the business could increase its dividend per share to 11.6 cents again in FY27. It’s also projected to deliver earnings per share (EPS) growth of 11.7 cents in FY26 (a slight increase) and then deliver 12.8 cents of EPS in FY27.

That means it’s only trading at 12x FY26’s estimated earnings and 11x FY27’s estimated earnings.

The ASX stock can grow earnings through several strategies, including opening more stores, collaborating with additional brands, expanding its own private brand (Transform-U), and increasing online sales.

Overall, I think it has a promising future for both earnings growth and good dividends.

The post I’d buy 11,429 shares of this ASX stock to aim for $100 a month of passive income 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 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.

There are currently 11 public companies that boast market capitalizations of at least $1 trillion. In order from largest to smallest, they are:

1. Nvidia: $4.6 trillion
2. Apple: $4 trillion
3. Microsoft: $3.8 trillion
4. Alphabet: $3.3 trillion
5. Amazon: $2.5 trillion
6. Saudi Aramco: $1.7 trillion
7. Broadcom: $1.6 trillion
8. Meta Platforms: $1.5 trillion
9. Taiwan Semiconductor Manufacturing (NYSE: TSM): $1.5 trillion
10. Tesla: $1.3 trillion
11. Berkshire Hathaway: $1.1 trillion

You might notice that with the exceptions of conglomerate Berkshire Hathaway and the Saudi oil powerhouse, all of the market’s trillion-dollar stocks share a common thread: artificial intelligence (AI).

Prior to the dawn of the AI revolution, Apple, Microsoft, and Alphabet were the only companies that featured trillion-dollar valuations consistently. This is important to point out, as Nvidia — which is now the world’s most valuable company — witnessed historic levels of market-cap expansion over the last three years thanks entirely to the AI boom.

While Nvidia remains king of the parallel processing chip realm, the technology behemoth has to give a lot of credit to its manufacturing partners — particularly Taiwan Semi.

TSM Market Cap data by YCharts.

While TSMC’s market value has already risen nearly fourfold during the AI revolution, I think its rally could continue as investment in AI infrastructure begins to kick into a new gear.

Let’s explore what makes Taiwan Semi such an important variable within the broader AI equation, and assess what supports my view that the stock could double over the next couple of years, lifting the company into the $3 trillion club.

TSMC: The unsung hero of AI development

When new mega-deals get announced in the AI industry, chances are, the headlines of the stories relate to which hyperscaler has decided to procure billions of dollars’ worth of Nvidia’s graphics processing units (GPUs). Big tech’s capital expenditures continue to accelerate, and I think it’s reasonable to say that demand for data center chips won’t diminish anytime soon. While this is good news for Nvidia investors, it’s even better for Taiwan Semiconductor.

The reason is simple: TSMC is already the world’s largest third-party chip foundry by revenue — holding an estimated 68% market share. In essence, chip designers like Nvidia, Advanced Micro Devices, Apple, Broadcom, Qualcomm, and many others outsource much of their manufacturing to Taiwan Semi’s best-in-class fabrication facilities.

These dynamics are what make Taiwan Semi such a lucrative opportunity. Given the company’s broad customer base, in combination with the tailwinds of rising chip demand, TSMC represents the ultimate pick-and-shovel semiconductor stock in the AI infrastructure era. 

Fuel for Taiwan Semi’s next growth phase

The chart below shows Taiwan Semi’s revenue and gross margin trends over the last three years. The combination of accelerating sales and improving margins speaks volumes about the level of pricing power TSMC is able to command for its foundry services.

TSM Revenue (TTM) data by YCharts.

With this type of momentum, smart investors are asking how TSMC can keep its growth train chugging along.

From a macro standpoint, AI infrastructure is expected to be a $7 trillion opportunity over the next five years — according to a forecast from McKinsey & Company.

In addition, AI workloads continue to become more sophisticated. As applications across robotics and autonomous systems move closer to commercialization, more advanced chipsets will be required. Anecdotally, TSMC is already working closely with Tesla to bring its custom AI5 chip to life.

Furthermore, Nvidia CEO Jensen Huang recently told investors that demand is so high for the company’s various data center hardware — particularly its new Blackwell and Blackwell Ultra chips and its next-generation Vera Rubin architecture — that an estimated $300 billion in incremental revenue could be recognized over the next year alone.

With trillions of dollars expected to be poured into additional data center capacity, and with new chip designs coming to market, demand for Taiwan Semi’s robust manufacturing expertise appears likely to be sustained for the foreseeable future.

Is Taiwan Semi stock a good buy right now?

At the moment, Taiwan Semi trades at a forward price-to-earnings (P/E) ratio of 27. While this is close to its peak levels during the AI revolution, I think it deserves that premium.

TSM PE Ratio (Forward) data by YCharts.

Over the last several months, sentiment appears to have shifted more positively toward TSMC. I think the reason is twofold. First, the geographic expansion of its foundry footprint beyond Taiwan is helping mitigate investors’ fears related to geopolitical tensions with China.

Moreover, I think growth investors are beginning to better understand TSMC’s critical role in the AI narrative and are bullish on the company’s prospects as big tech doubles down on AI infrastructure.

While the stock isn’t cheap, TSMC’s upside potential is compelling. Against this backdrop, I see TSMC stock as a no-brainer pick to buy and hold over the next several years. 

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

The post Meet the supercharged artificial intelligence (AI) growth stock that could join Apple, Nvidia, Alphabet, and Microsoft in the $3 trillion club by 2027 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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Adam Spatacco has positions in Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. 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, Qualcomm, Taiwan Semiconductor Manufacturing, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Broadcom and 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.

It has been a tough period for Commonwealth Bank of Australia (ASX: CBA) shares.

Since hitting a record high of $192.00 in June, the banking giant’s shares have lost 20% of their value.

Unfortunately for shareholders, analysts believe that this could just be the start of even greater declines.

But just how low could CBA shares go in 2026? Let’s take a look at what brokers are predicting for Australia’s largest bank.

Where are CBA shares heading?

Firstly, it is worth highlighting that brokers have been calling CBA shares overvalued and predicting sharp declines for years.

Despite this, the bank’s shares have managed to outperform the market and even some popular ASX growth shares with strong returns.

But it is also worth remembering that trading conditions in the banking sector aren’t as easy as they were several years ago and growth is getting hard to come by. This makes it hard to justify the premium valuations that the banks are trading on.

It is partly for this reason that analysts at UBS have put a sell rating and $125.00 price target on CBA’s shares. This implies potential downside of approximately 18% from current levels.

While that decline would be disappointing, it certainly is not the worst-case scenario.

For example, the team at Macquarie has put an underperform rating and $106.00 price target on its shares. This suggests that there is potential downside of approximately 31% over the next 12 months. It commented:

While CBA remains the leading banking franchise, with cracks appearing in its deposit ‘moat’, and further downside risk to consensus, we believe valuation of ~26x FY26E P/E and ~3.5x P/B remains detached from fundamentals. Maintain Underperform.

But that’s not even the furthest that analysts think CBA shares could fall in 2026. The most bearish broker at present is Morgans, which has a sell rating and $96.07 price target on them. Based on its current share price, this implies potential downside of over 37% for investors between now and this time next year. Morgans recently said:

We remain SELL rated on CBA, recommending clients aggressively reduce overweight positions given the risk of poor future investment returns arising from the even-now overvalued share price and low-to-mid single digit EPS/DPS growth outlook.

Overall, the broker community appears convinced that next year could be a bad one for the big four bank’s shares and that investors should be taking profit before it is too late.

The post How low could CBA shares go in 2026? 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 positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.