Medibank Private Ltd (ASX: MPL) stock may not receive a lot of investor attention for passive income, but today I’m going to outline why it looks like a solid and compelling choice.

The business is Australia’s largest private health insurer with its Medibank and AHM brands. It also has a growing portfolio of bolt-on healthcare businesses.

Healthcare is one of those categories that has typically defensive earnings – I’d imagine plenty of policyholders would want to hold onto their insurance even if Australia’s GDP was slightly declining rather than rising in a particular year.

With resilient earnings, the business can provide a consistently-growing dividend.

Is the dividend yield attractive?

Since it listed a decade ago, the business has increased its annual dividend per share every aside from the COVID-impacted year of 2020.

In FY25 it decided to hike the annual dividend per share by 8.4% to 18 cents. That translates into a trailing grossed-up dividend yield of 5.5% (which includes the franking credits).

But, last year’s dividends are history. Let’s take a look at how large analysts think the next payments could be.

The forecast on CMC Markets suggests the business could decide to hike its annual dividend per share to 19 cents per share, which would represent a year-over-year hike of 5.5%.

If owners of Medibank stock do receive that projected payout, it would represent a grossed-up dividend yield of 5.8% (which includes franking credits).

The projection on CMC Markets is another hike in FY27 to 20 cents per share.

Is this a good time to buy Medibank stock?

The company is working hard to diversify its earnings streams. It recently announced its FY30 aspirations for its Medibank health segment, with a goal to deliver segment earnings of at least $200 million by FY30.

Medibank also wants to grow its policyholder market share each year in a disciplined way to at least 26.8% by FY30.

The ASX healthcare share is regularly achieving growth in both Australian policyholders and international policyholders. In FY25, Medibank grew net resident policyholders by 27,900 (or 1.4%) and increased net non-resident policy units by 10,500 (or 3.1%).

That’s exactly the numbers I want to see – I think policyholder growth is the key for ongoing success as it boosts both revenue and operating leverage for the business.

According to CMC Markets, of the five analyst ratings it has information on, the average price target of $5.22. That implies a possible rise of more than 10% over the next year from where it is at the time of writing.

A double-digit rise of the Medibank share price combined with the dividend return would be a very pleasing result over the next 12 months, if those forecasts come true.

The post Is Medibank stock a buy for its 5.5% dividend yield? appeared first on The Motley Fool Australia.

More reading

• 2 ASX financial shares to sell and 1 to buy: experts
• Here are the top 10 ASX 200 shares today
• Buy, hold, sell: Medibank, Qantas, and Xero shares

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 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.

Owning Telstra Group Ltd (ASX: TLS) shares for dividends could be one of the smarter moves by income-focused investors looking at blue-chip shares.

There are plenty of businesses within the S&P/ASX 200 Index (ASX: XJO), but few offer as large a dividend as Telstra while also delivering payout growth.

The last few years have seen a regular, rising payout by the business and I expect this to continue in the coming years.

$30,000 investment in Telstra shares

I wouldn’t recommend that investors put all of their money into one business – having a diversified approach is a good idea.

But, I’d be more comfortable putting $30,000 into Telstra than ASX bank shares and ASX mining shares.

In terms of the passive income, in FY25, Telstra decided to pay an annual dividend per share of 19 cents. That represented a 5.6% year-over-year increase. At the current Telstra share price, that represents a dividend yield of 3.9% and a grossed-up dividend yield of 5.6%, including franking credits.

If someone owned $30,000 of Telstra shares, that would translate into an annual cash of $1,170, or $1,671 including the bonus of franking credits, based on the FY25 payout.

However, the payments from the 2025 financial year are history. The future dividends could be even bigger.

The forecast on CMC Markets suggests the business could deliver an annual dividend per share of 20 cents in FY26, implying a possible rise of more than 5% year over year in the current financial year.

If that’s what happens over the next 12 months, the investor with $30,000 in Telstra shares would receive $1,231 of a cash dividend and $1,759 of grossed-up dividend income, including the franking credits.

Why is the telco likely to grow its payout?

Telstra is the leading telecommunications business in Australia and it has built a reputation for having the best network.

This has given the business the ability to raise prices without much detrimental effect, helping boost the mobile division’s average revenue per user (ARPU) each year in recent years.

The attractiveness of the mobile network has also meant the business has been able to attract additional customers every year (including the wholesale customers that use the Telstra network through different brands).

I’m also hopeful that the business can win more wireless broadband customers because this should mean the company can deliver a higher profit margin on that customer, rather than losing a significant portion of it to the NBN.

At the current Telstra share price, it’s trading at 24x FY26’s estimated earnings, according to the forecast on Commsec. I think that’s a reasonable price to pay for a business with a good earnings outlook, given how Australia is becoming more technological.

The post $30,000 of Telstra shares can net me $1,671 of passive income! appeared first on The Motley Fool Australia.

More reading

• 3 excellent Australian dividend shares to buy with $1,000
• 2 Australian dividend giants that belong in any portfolio
• Up 24% in a year! The red-hot Telstra share price is smashing BHP, Westpac and Coles
• 2 ASX blue-chip shares offering big dividend yields
• The smart way to make a $25,000 passive income from ASX shares

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.

ASX small-cap stock Biome Australia Ltd (ASX: BIO) has drawn attention from analysts at Bell Potter after a big announcement. 

The company develops and commercialises clinically backed innovative live biotherapeutics (probiotics), marketing 18 products under the ‘Activated Probiotics’ brand.

Activated Probiotics is a range of live biotherapeutic products aimed to help prevent and support the management of various health concerns. 

Yesterday, the company announced the launch of its first human clinical trial. 

What is the trial?

The company is embarking on its first human clinical trial for its proprietary probiotic strain, Lactobacillus plantarum BMB18 (BMB18).

According to Biome Australia, the human clinical trial will investigate the efficacy of BMB18 in patients experiencing digestive symptoms (e.g. bloating, discomfort) and/or occasional sleep or mood disturbances, and examine its impact on digestive function, mood, sleep and quality of life.

According to the company, the strain demonstrated an ability to effectively modulate immune responses and inflammation. It also can reduce oxidative stress, and maintain intestinal barrier integrity. 

The trial follows positive outcomes with in vitro studies conducted by a BIO research partner, where the strain was shown to effectively modulate immune responses and inflammation, reduce oxidative stress, and maintain intestinal barrier integrity. 

The trial is expected to commence in February 2026, lasting 12 months, with the trial conducted by La Trobe University. 

Speaking on the trial, Biome Managing Director and Founder Blair Norfolk said:

The registration of our first human clinical trial on L.P. BMB18 represents years of dedicated research and development work by the Biome team. The strong positive outcomes from our in vitro studies provided the foundation for this next critical phase of clinical validation.

Why is this significant for Biome?

Following the announcement, Bell Potter released a new report on the ASX small-cap stock. 

It said Biome Australia is aiming to further differentiate itself in the gut health market through product innovation across its existing products and enabling new product launches.

According to the report, by owning its own strain, this ASX small-cap can enhance product yield and as strains form a substantial part of a products formulation, lower its costs of goods sold, thereby improving its gross margins. 

This drives improvement in BIO’s intrinsic value and qualitative elements. 

Bell Potter said this also provides future licensing opportunities to other operators.

Significant upside 

In yesterday’s report, Bell Potter maintained its buy recommendation on this ASX small-cap stock. 

It also maintained its price target of $1.00. 

From yesterday’s closing price of $0.395, this indicates an upside of more than 150%. 

BIO’s operating leverage is starting to come through, and we would expect to see EBITDA improve further through FY26. Building its own IP should enhance gross margins over time. Maintaining quality in its growth performance should eventually see BIO recognised by the market resulting in a re-rate.

The post The ASX small-cap stock that could double in value in 2026 appeared first on The Motley Fool Australia.

More reading

• 3 ASX ETFs that can generate more cash than your savings account
• Why Flight Centre shares could return 22% in just one year
• Want to know how much CBA is expected to grow profit in FY26?
• What can investors expect from Treasury Wines’ update tomorrow?
• Is Medibank stock a buy for its 5.5% dividend yield?

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.

The Lynas Rare Earths Ltd (ASX: LYC) share price has seen massive volatility over the last year. In the past 12 months, it’s up by almost 90%, as the chart below shows. That compares to a rise of less than 5% for the S&P/ASX 200 Index (ASX: XJO).

But the chart also shows that it has fallen 40% from that peak in mid-October.

After such a significant change in the Lynas share price, it’s definitely worthwhile asking whether it’s a beaten-up opportunity or if it’s overvalued at this level.

Let’s take a look at what experts from UBS are expecting from Lynas.

Buy rating on Lynas shares

The rare earth miner has been in the spotlight this year as China and the US tussle over access to rare earths, which are key materials for devices and other advanced technology.

The fact that Lynas is a producer of rare earths makes it a strategic player in the global economy.

UBS has a buy rating on Lynas shares. The broker says that it’s positive on Lynas based on both its position in the country and the broader value chain. The broker is positive on the business because UBS believes the business has strong IP and an economic moat when it comes to heavy rare earth separation, as well as supply scarcity within the global heavy rare earth sector.

The broker also notes that Lynas’ workforce is skilled and has a low level of turnover, with more than 70% employees having been at the Lynas LAMP facility in Malaysia for at least ten years. UBS suggests this is an understated advantage in a particularly complex field.

UBS also noted that the rare earth miner has reinvested back into Malaysia, which is an advantage considering the “delicate geopolitical backdrop”. The broker suggests the efforts to expand its heavy refining facility over the next couple of years will help earnings in the longer-term.

However, recent power disruptions at the Kalgoorlie facility has impacted production, with a loss of around 1 month in the second quarter of FY26.

UBS noted:

…inherent challenges faced by the grid (single transmission line, aging infrastructure, tough inland conditions) have impacted the entire region and in particular LYC where even a relatively small outage can have outsized impacts and has compelled LYC to look for other off-grid options even while it is still working with the government and electricity supplier Western Power in improving current availability.  

…From a broader market perspective, we remain alert to the still tenuous macro relationship between China and the USA, with recent U.S. policy expert feedback informing us that the move to decouple rare earths (and magnet) supply chains remains a priority despite the one-year hold on China rare earths controls.

Price target and earnings estimate

UBS forecasts that Lynas could deliver net profit of $288 million in FY26, $528 million in FY27 and $1.05 billion in FY28.

With that exciting forecast of earnings growth in the years ahead, the broker has a price target of $17.70 on the Lynas share price, suggesting it could rise by close to 40% over the next year.

The post Lynas shares: After a year of outperformance, is it still a buy? appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• Westgold unveils spin-out of non-core Reedy and Comet gold assets
• IperionX secures US Navy deal with Carver Pump order
• Neuren Pharmaceuticals wins DAYBUE STIX FDA approval
• Fortescue to acquire Alta Copper: What it means for investors

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 recommended Lynas Rare Earths Ltd. 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.

Harvey Norman Holdings (ASX: HVN) had a blistering run in 2025, with its share price zooming more than 50 per cent higher to $7.06 at the time of writing.  

Harvey Norman shares smashed expectations and delivered results that even surprised the most sceptical investor.

To put it in context, the S&P/ASX 200 Index (ASX: XJO) only gained 4% in value in the past 12 months.

What’s behind this dusty old Aussie retail heavyweight doing a sprint, and can it keep it up in 2026?

Stability through property

Harvey Norman is a multi-sided retailer that relies on three pillars: Australian franchise operations, 120 overseas stores, and a retail property portfolio comprising over 100 retail complexes.

The ASX retailer sets itself apart from the competition with its $4.4 billion property portfolio. This adds value but also provides the company and its shareholders with stability.

Harvey Norman’s results in 2025 have genuinely impressed. In August, the company reported a substantial increase in net income and earnings per share compared to the previous year, highlighting improved performance and stronger shareholder returns. The results exceeded analysts’ expectations.

More recently, aggregated sales in early FY26 are running hot, with figures showing around 9 per cent growth year-on-year. That’s not bad in a retail environment where consumers can be fickle.

Share buybacks and capital discipline

Harvey Norman hasn’t just sat back and watched its stock rally. The company actively puts its money where its mouth is. It extended a massive on-market share buyback program, aiming to repurchase up to 10% of its shares.

That’s the kind of move that gets investors going. Reducing float can help support the share price while signalling management’s confidence that Harvey Norman shares are undervalued or poised for more growth.

What next for Harvey Norman shares?

No retail stock is bulletproof, and Harvey Norman will face headwinds if consumer sentiment cools.

However, with solid sales momentum, shareholder-friendly capital moves, and ongoing supportive analyst views, the ingredients are on the table for Harvey Norman shares to keep climbing into 2026.

Analysts are positive on the outlook for the retailer. It looks like even after this year’s share price rally, any stock purchased right now can still benefit from a profit. 

TradingView data shows that most analysts recommend a hold or (strong) buy. Some expect the ASX 200 stock to climb as high as $8.40, which implies a 19% upside at the time of writing.

However, the average share price target for the next 12 months is $7.51. That still suggests a possible gain of almost 6.6%.   

Bell Potter believes Harvey Norman shares are undervalued based on its positive growth-outlook. It currently has a buy rating and $8.30 price target on its shares.

The post What could keep Harvey Norman shares climbing in 2026? appeared first on The Motley Fool Australia.

More reading

• What a rising Aussie dollar means for your ASX shares
• Want passive income? These ASX dividend stocks could help
• 5 things to watch on the ASX 200 on Monday
• Bell Potter names the best ASX retail stocks to buy
• Up 50% in 2025, should you buy Harvey Norman shares before Christmas?

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

Defensive ASX dividend shares can be a great option for passive income because of their ability to deliver consistent profits and reliable payouts.

That doesn’t necessarily mean they’re going to increase their payouts every single year, but I think each of the names I’m going to highlight can grow their payout in FY26 and the longer-term.

If I had $3,000 to invest, I’d happily put $1,000 into each of the following names.

Centuria Industrial REIT (ASX: CIP)

This business is a real estate investment trust (REIT) which owns a portfolio of appealing industrial properties across Australia. These buildings are located in compelling metropolitan areas where the vacancy rate is very low.

There are strong tailwinds for industrial property demand including ongoing e-commerce adoption and data centres, as well as population growth.

The REIT’s fund manager Grant Nichols recently said:

CIP continues to achieve strong outcomes across its portfolio relating to leasing, capital transactions and value add initiatives. The ability to deliver these results is credited to CIP’s portfolio being concentrated in Australia’s urban infill markets where tenant demand is strongest, vacancy is low and supply is constrained. These urban infill assets provides multiple future opportunities for alternative, higher-use developments such as data centres and residential schemes.

I think this bodes well for future rental income growth in the coming years.

The ASX dividend share expects to pay a distribution per unit of 16.8 cents in FY26, which translates into a distribution yield of 5% at the time of writing.

Coles Group Ltd (ASX: COL)

The supermarket business offers a defensive set of earnings considering the essential nature of what it sells. Currently, the company is delivering strong sales growth in the mid-single-digits (and higher single digit sales growth excluding tobacco sales), outperforming Woolworths Group Ltd (ASX: WOW).

Pleasingly for income-focused investors, the business has increased its payout each year in the last six months.

According to the projection on Commsec, Coles is forecast to pay an annual dividend per share of 78.8 in FY26. That’s a potential grossed-up dividend yield of 5.2%, including franking credits.

With a rising population, an expanding network of supermarkets, new advanced warehouses and an expanding range of own brand products, Coles shares look like a good long-term investment.

Australian Foundation Investment Co Ltd (ASX: AFI)

AFIC is a listed investment company (LIC). It’s the biggest and one of the oldest around.

I like the diversification that this LIC can provide because of the dozens of businesses that it owns in the portfolio.

Some of its largest holdings include BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), CSL Ltd (ASX: CSL), Macquarie Group Ltd (ASX: MQG), Wesfarmers Ltd (ASX: WES) and Transurban Group (ASX: TCL).

Shareholders of this business haven’t seen any ordinary dividend cuts this century – it has provided significant stability for income-focused investors.

The ASX dividend share is currently trading at a discount of around 10%, making it look to me like an appealing time to buy.

It has a trailing ordinary grossed-up dividend yield of 5.3%, including franking credits, at the time of writing.

The post 3 wonderful ASX dividend shares I’d buy with $3,000 right now appeared first on The Motley Fool Australia.

More reading

• Buying Coles and Woolworths shares? Here’s why the supermarkets are fuming over Chalmers’ new law
• 2 premier ASX shares for your retirement fund
• Why Coles shares are a retiree’s dream
• 3 of the best ASX 200 stocks to buy in December
• Top brokers name 3 ASX shares to buy today

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