There are some exceptionally attractive Australian stocks that I’m betting can deliver market-beating returns over the coming years.

I’ve already invested in the names I’m going to talk about, and I’d happily invest another $10,000 across the two of them if I were given that amount to invest in ASX growth shares.

Both businesses below are achieving strong revenue growth and expanding overseas. I’m also expecting good profit margin increases in the coming years.

Breville Group Ltd (ASX: BRG)

Breville is best known as a coffee machine maker under its own name. But, it also sells coffee machines under the Sage, Lelit, and Baratza brands. It also sells coffee beans through the Beanz business. Additionally, the company sells other small kitchen appliances, aside from just coffee machines.

Pleasingly, the company has achieved a global presence, with operations in the Americas, Asia Pacific, and EMEA (Europe, the Middle East and Asia). What could be more of an Australian stock than a business that makes coffee?

The company continues to grow at a solid double-digit pace. In the first six months of FY26, the company reported revenue growth of 10.1% to $1.1 billion. Despite the headwinds of US tariffs, it was still able to deliver net profit growth of 0.7% to $98.2 million.

Breville is working hard at shifting its manufacturing to other countries – away from China – where US tariffs are much lower, such as Mexico. This could make a significant difference to how much profit it generates from the key US market in the foreseeable future.

I’m also excited to see how much profit growth the company can generate from relatively new markets such as China and South Korea.

In the long term, I’m expecting Breville’s net profit to compound at a double-digit rate over the rest of the decade. It looks a lot cheaper after falling 16% since the high it reached in February 2026.  

Temple & Webster Group Ltd (ASX: TPW)

Temple & Webster is another Australian stock that I’m very optimistic about.

It’s a significant online retailer of furniture and homewares, as well as a growing home improvement segment.

The company is rapidly working towards $1 billion of annual sales, spread across both its two segments of home improvement and homewares and furniture. The company recently announced that its latest sales figures (in HY26) had grown by approximately 20% year over compared to the previous period. That’s an excellent rate of compounding.

One of the biggest drivers of the business is that households are increasingly adopting online shopping.

According to Temple & Webster, online shopping accounts for only around 20% of homewares and furniture in Australia, whereas in the UK it’s approximately 10% higher, and even higher in the US. I think Australia is likely to follow that growth trend towards 30% in the next few years.   

Seeing as the company is a leading online retailer, I think the company can capitalise on that growth trend.

As the business grows, I expect its margins to increase over time due to scale benefits.

I believe the business is significantly undervalued given where it may be in three to five years, particularly if its home improvement division continues to grow at an incredibly fast rate.

I think it’s a great time to buy this Australian stock, considering it’s down more than 70% in the past six months.

The post 2 strong Australian stocks to buy now with $10,000 appeared first on The Motley Fool Australia.

More reading

• CSL and Wesfarmers among scores of ASX shares hitting fresh 52-week lows
• Why I’d buy DroneShield and this ASX share in May
• The worst 4 ASX 200 stocks to buy and hold in April unmasked
• Why these top ASX shares sank 10%+ in April
• 2 ASX shares tipped to grow 90% or more in the next 12 months!

Motley Fool contributor Tristan Harrison has positions in Breville Group and Temple & Webster Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Temple & Webster Group. The Motley Fool Australia has recommended Temple & Webster Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The DigiCo Infrastructure REIT Staples Securities (ASX: DGT) share price is in focus after the company announced the binding sale of its Chicago (CHI1) asset for US$750 million, representing a ~5% premium to its original purchase price, and detailed a significant reduction in gearing and debt levels.

What did DigiCo Infrastructure REIT report?

• Binding sale agreement for the Chicago (CHI1) facility at US$750 million (~A$1.06 billion), about 5% above purchase price
• Pro forma net debt reduced from A$1.5 billion to around A$0.5 billion
• Gearing reduced from 36% to 17%; available liquidity to rise to approximately A$0.9 billion
• Funds From Operations (FFO) expected to materially increase from FY27 due to US asset sales
• Reaffirmed FY26 underlying EBITDA guidance of $125 million
• Intention to consider enhanced distributions and additional capital management initiatives

What else do investors need to know?

DigiCo Infrastructure REIT is executing a strategic capital recycling plan by selling US assets—most notably the CHI1 facility—to free up cash and further fund its core Australian data centre development, SYD1. The company also plans to monetise its LAX1 and LAX2 sites, with ongoing value management of other US data centres.

Completion of the first 15MW upgrade at SYD1 is now achieved, and the final 5MW section remains on track for delivery by 30 June 2026. The company’s strong pipeline and upgraded capacity at SYD1 highlight its focus on supporting high customer demand for premium colocation services.

What did DigiCo Infrastructure REIT management say?

Interim CEO Chris Maher said:

The release of capital from CHI1 provides additional financial flexibility and capacity to accelerate the delivery of the SYD1 development program. The 88MW project has progressed further, with design and tender documentation for the expansion continuing to advance, the 70% design milestone now achieved and a head contractor to be appointed in Q3 CY2026. The remaining capacity is planned to be delivered progressively over the next three years, with 10MW of capacity targeting delivery in Q2 CY2027. The demand pipeline for the remaining capacity is strong and expected to generate attractive returns.

What’s next for DigiCo Infrastructure REIT?

Looking ahead, DigiCo expects the US asset sales—and the resulting balance sheet strength—to support its major SYD1 data centre expansion and boost funds from operations from FY27 onwards. Management signalled a possible increase in distributions to shareholders in the short term, alongside a long-term strategy to pay out 90–100% of FFO.

The firm plans to progressively deliver the remaining SYD1 capacity by 2029, backed by strong customer demand and a focus on sustainable, growing distributions for investors.

DigiCo Infrastructure REIT share price snapshot

Over the past 12 months, DigiCo shares have declined 17%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 6% over the same period.

View Original Announcement

The post DigiCo Infrastructure REIT slashes debt after Chicago asset sale appeared first on The Motley Fool Australia.

More reading

• Atlas Arteria directors urge investors to reject IFM’s takeover offer
• AGL Energy narrows FY26 guidance as project pipeline grows
• JB Hi-Fi Q3 FY26 sales update: Australia & NZ drive growth
• I’m worried about the ASX 200 falling further. Here’s why
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Laura Stewart 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. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

The AGL Energy Ltd (ASX: AGL) share price is in focus as the company narrows its FY26 guidance, now expecting underlying EBITDA between $2,060 million and $2,180 million, and underlying NPAT between $610 million and $680 million.

What did AGL Energy report?

• FY26 underlying EBITDA guidance of $2,060m–$2,180m (previously $2,020m–$2,180m)
• FY26 underlying NPAT guidance of $610m–$680m (previously $580m–$680m)
• Continued strong operational performance with generation fleet availability at 83.2% for the nine months to 31 March 2026
• Approximately $750 million in proceeds expected from the sale of Tilt Renewables stake
• AGL intends to continue paying fully franked dividends in FY26, subject to Board approval

What else do investors need to know?

AGL is progressing several strategic growth projects, including commissioning the first 250MW of the Liddell Battery, with the full 500MW set for completion this financial year. Construction of the Tomago Battery is advancing, and AGL has made a final investment decision on the 220MW K2 gas peaker project in Western Australia, expanding its flexible generation portfolio.

The company reports positive market dynamics, highlighting strong and rising electricity demand driven by data centre expansion, electrification, and increased EV load. AGL’s flexible asset strategy aims to capture these demand tailwinds and deliver more resilient earnings over time.

What did AGL Energy management say?

Managing Director & Chief Executive Officer Damien Nicks said:

Our updated guidance ranges reflect the continued strong operational and financial performance of the business since the half year results, driven by improved plant availability and flexibility, improved Customer Markets performance and disciplined cost management.

What’s next for AGL Energy?

AGL plans to capitalise on the energy transition by investing in new batteries, renewable partnerships, and flexible gas generation. The company will provide formal FY27 earnings guidance at its full-year results in August, with a focus on cost optimisation and continued portfolio reshaping. AGL is targeting strong, risk-adjusted returns and high cash conversion as it shifts from thermal to lower carbon assets.

The company’s Perth Energy business is a key growth driver, with expanded generation capacity and strong demand from large industrial customers expected to underpin future earnings diversification beyond the East Coast.

AGL Energy share price snapshot

Over the past 12 months, AGL shares have declined 14%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 6% over the same period.

View Original Announcement

The post AGL Energy narrows FY26 guidance as project pipeline grows appeared first on The Motley Fool Australia.

More reading

• Atlas Arteria directors urge investors to reject IFM’s takeover offer
• DigiCo Infrastructure REIT slashes debt after Chicago asset sale
• JB Hi-Fi Q3 FY26 sales update: Australia & NZ drive growth
• I’m worried about the ASX 200 falling further. Here’s why
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Laura Stewart 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. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

Investing and holding for the long term is the best way to go, in my view, because it means giving the ASX shares a long time to compound, while also reducing tax payments.

I’m going to look at two ASX shares that could be excellent investments to own for the years ahead because of their strong underlying growth and the fact the share prices are cheaper than they used to be.

Below are two of my favourite ideas for long-term returns.

Sigma Healthcare Ltd (ASX: SIG)

Sigma is a business that’s heavily involved in the pharmacy industry as both a chemist brand owner and product distributor. Its key business is Chemist Warehouse, which I’d describe as the leading operator in the sector.

The business recently announced an update that included a number of positives that I think makes it an even stronger buy.

Firstly, Chemist Warehouse’s sales remain incredibly strong.

Australian Chemist Warehouse-branded stores saw network sales growth of 16.7%, powered by 14.4% like-for-like (LFL) sales growth. The international division, which includes Ireland, New Zealand, Dubai, and China saw overall sales growth of 24.7%, with LFL growth of 11.8%.

The fact the core business continues to perform so strongly is very positive for the foreseeable future, in my opinion. I believe investors should never lose sight of the performance of the key element of a company’s earnings, even if it has exciting growth plans for new products or services.

Second, the ASX share announced that Chemist Warehouse is entering the UK by acquiring 75% of a number of Greenlight stores which are based in London. Chemist Warehouse will licence the Chemist Warehouse brand and intellectual property and provide retail support, including ranging, store layout, inventory management, and marketing support.

Some of the Greenlight locations will be developed or relocated, becoming Chemist Warehouse stores. The first phase will focus on rebranding and developing up to five stores initially. If this proves successful, more stores could be developed.

Finally, the company is investing in a new distribution centre in New Zealand, which will help it continue growth in that market. It’s aiming for more than 100 Chemist Warehouse stores in New Zealand in the long term, where there’s currently approximately 70.

All of the above bodes well for the ASX share’s long-term future. The UK is a big market and could be a great growth driver in the years ahead.

L1 Global Long Short Fund Ltd (ASX: GLS)

I believe every Australian would benefit from having a good allocation to international shares, though the international/US share market is increasingly becoming a bet on a few large US tech names and the theme of AI in general.

There are plenty of appealing investments in the international market, which could deliver strong returns.

Instead of trying to search across the entire global share market for great ideas, I’m very willing to have high-performing fund managers provide the diversification and returns I’m after.

L1 Global Long Short Fund is a listed investment company (LIC) that utilises both long-term investing and short-selling to find opportunities. Some of the sectors it’s invested in recently includes copper, gold, construction materials, and banking.

According to the fund manager, the ASX share’s median ‘long’ position trades at around 8x FY27’s estimated earnings, with double-digit earnings growth and modest debt levels.

Past performance is not a reliable indicator of future returns, but since the strategy’s inception in January 2025, it has returned an average of 53.9% per year. I think this ASX share is one worth watching.

The post 2 top ASX shares to buy and hold for the next decade appeared first on The Motley Fool Australia.

More reading

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• Why Flight Centre, Sigma Healthcare, Vault Minerals, and WiseTech shares are storming higher today
• Sigma shares race higher on update and Chemist Warehouse UK expansion
• Sigma Healthcare delivers double digit Chemist Warehouse sales growth in 2026
• What’s making healthcare the worst sector on the ASX 200, down 39% in a year?

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.

The JB Hi-Fi Ltd (ASX: JBH) share price is in focus today after the company reported group sales growth across key brands in the third quarter of FY26, with JB Hi-Fi Australia sales up 4.0% and NZ sales up 23.2%.

What did JB Hi-Fi report?

• JB Hi-Fi Australia total sales rose 4.0% for Q3 FY26
• JB Hi-Fi New Zealand total sales jumped 23.2% for the quarter
• The Good Guys total sales increased 2.5% for Q3
• e&s total sales slipped 1.4% in Q3
• Year-to-date, JB Hi-Fi New Zealand total store sales climbed 29.7%

What else do investors need to know?

JB Hi-Fi delivered positive sales growth in both Australian and New Zealand operations despite a challenging and uncertain retail environment. The Good Guys business also saw continued sales momentum, adding to the group’s overall performance.

Management flagged supplier component cost increases and stock availability shortages, particularly in technology categories. Heightened competition is putting further pressure on margins as the group heads into the crucial end of financial year period.

What did JB Hi-Fi management say?

CEO Nick Wells said:

We are pleased to see sales growth in JB Hi-Fi and The Good Guys in what is an increasingly uncertain retail environment. As we enter the important end of financial year trading period, in the technology categories we are seeing significant supplier component related cost increases and stock availability shortages, along with heightened competitive activity. As always, we will remain focused on what we can control and seek to maximise demand through driving great value for our customers, leveraging our strong supplier relationships, and delivering exceptional customer service.

What’s next for JB Hi-Fi?

JB Hi-Fi is focusing on controlling what it can—maximising demand, supporting supplier partnerships, and delivering value for customers. Management will be aiming to maintain momentum through the end-of-financial-year period, despite increased costs and supply challenges.

The group’s results suggest ongoing resilience in a tough retail market, but management remains alert to industry-wide pressures as it navigates these operational headwinds.

JB Hi-Fi share price snapshot

Over the past 12 months, JB Hi-Fi shares have declined 25%, trailing the S&P/ASX 200 Index (ASX: XJO) which ha risen 6% over the same period.

View Original Announcement

The post JB Hi-Fi Q3 FY26 sales update: Australia & NZ drive growth appeared first on The Motley Fool Australia.

More reading

• Atlas Arteria directors urge investors to reject IFM’s takeover offer
• DigiCo Infrastructure REIT slashes debt after Chicago asset sale
• AGL Energy narrows FY26 guidance as project pipeline grows
• I’m worried about the ASX 200 falling further. Here’s why
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Laura Stewart 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. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

It was a day to forget for Gentrack Group Ltd (ASX: GTK) shares on Tuesday.

The ASX tech stock finished the day 38% lower at $2.99 following the release of a trading update.

This means that the utilities software provider’s shares are now down 75% from their high.

Has this created a buying opportunity or should you avoid this one? Let’s see what Bell Potter is saying.

What is the broker saying about this ASX tech stock?

Bell Potter notes that Gentrack has “materially” downgraded its earnings guidance for FY 2026. It is now expected to be significantly lower than Bell Potter and consensus estimates.

Bell Potter suspects that the cause of the ASX tech stock’s revenue decline has been a failure to execute on its near-term pipeline. It explains:

NRR (project) revenues were guided to decline YoY, which suggests GTK has been unable to execute on its near-term pipeline outlined at its Strategic Day in Nov ’25 comprising of 3 tenders as preferred, 3 short-listed, and well-placed at 4 others for CY26 counterparty decisions, noting some of these would have been pushed into FY27/CY27 regardless. Project revenues are an ‘at-risk’ bucket, requiring an on-going pipeline to replace rolled-off projects to prevent segment revenue going backwards and dragging at Group level against ARR [annual recurring revenue], which will naturally occur as the business matures.

The broker also highlights that converting its non-recurring project revenues into ARR is now a concern and could make medium-term targets harder to achieve. It adds:

Expected recurring revenue growth of 10% for FY26 is at least positive, however conversion of NRR into growth in future periods for provisioning of billing/CRM stack is now a concern despite management commentary. Maintaining medium-term growth targets on lower bases implies lowered expectations in future periods in our view and potentially indicates lost tenders in the pipeline, rather than pushed into future periods.

Should you invest?

Despite the many negatives, Bell Potter remains positive on this ASX tech share.

In response to its update, the broker has retained its buy rating with a heavily reduced price target of $5.60 (from $8.80).

Based on its current share price of $2.99, this implies potential upside of 87% for investors over the next 12 months.

Commenting on its recommendation, Bell Potter said:

Our Target Price is reduced to A$5.60sh and we maintain a Buy rec on the broader macro trends supporting utility billing stack/digital transformations. However, the current difficulty in converting pipeline into projects negatively impacts GTK’s ability to convert into ARR in future periods which would imply an ex-growth multiple.

The post Down 75%: Is this ASX tech stock a bargain buy? appeared first on The Motley Fool Australia.

More reading

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• Why Capstone Copper, Gentrack, Mineral Resources, and WiseTech shares are racing higher today

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

ASX healthcare share ResMed Inc (ASX: RMD) edged 2% higher on Tuesday to $29.57, offering a modest lift after recent weakness. The stock remains down around 10% over the past month and about 18% year to date.

Some investors might question whether the pullback is an opportunity in disguise. Here are three more reasons why this high-quality ASX healthcare share might be worth a closer look.

Powerful, long-term growth

ResMed develops devices and software to treat sleep apnoea and other breathing disorders, including masks, CPAP machines, and digital health platforms used in both clinical and home settings. This positions the ASX healthcare share within several powerful long-term trends, including ageing populations, growing awareness of sleep health, and the shift toward home-based care rather than hospital treatment.

Importantly, ResMed is not dependent on a single product line. It operates across devices, consumables, software, and data platforms, creating a broader ecosystem that connects patients, clinicians, and healthcare providers. This integrated model helps improve customer retention and supports recurring revenue streams over time.

Growth momentum, improving earnings

Recent results suggest the business continues to deliver solid momentum. Revenue rose 11% to US$1.4 billion in the latest quarter, while earnings per share increased 21% to US$2.86. That combination of growth and expanding profitability highlights the strength of its operating model even in a more uncertain macro environment.

Morgans Financial was encouraged by the update, noting continued double-digit growth and margin expansion. The broker has retained its buy rating on the ASX healthcare share, although it trimmed its price target slightly to $41.72. This points to a 41% upside from current price levels.

Massive global opportunity

Another key attraction is the size of the opportunity ahead. Sleep apnoea remains significantly underdiagnosed and undertreated globally. ResMed estimates there are more than 1 billion people with the condition. Yet fewer than 20% of patients in the US are diagnosed or treated, and fewer than 10% in the rest of the world.

That level of underpenetration creates a long runway for growth without the need for new markets or disruptive product shifts. Instead, ResMed can continue expanding diagnosis rates, increasing awareness, and helping more patients access treatment.

The ASX healthcare share is also building a strong digital advantage. Its ecosystem now includes more than 36 million patients on its AirView platform, and more than 34 million cloud-connectable devices globally. This data network strengthens its ability to improve clinical outcomes and enhance product development over time.

On the innovation front, ResMed continues to invest in new products and adjacent opportunities. Recent initiatives include the rollout of AirSense 11 into additional markets, new mask designs such as AirTouch N30i and F30i, and expansion into related sleep health areas.

Foolish Takeaway

Overall, ResMed remains a high-quality healthcare business with durable growth drivers, a large underpenetrated market, and a strengthening digital ecosystem.

While the price of the ASX healthcare share has softened recently, the long-term investment case remains firmly intact for patient investors.

The post 3 reasons to buy this $42 billion ASX healthcare share appeared first on The Motley Fool Australia.

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• 3 high-quality ASX growth shares for smart investors to buy and hold for 10 years
• Buy, hold, sell: Coles, Liontown, and ResMed shares
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• Leading brokers name 3 ASX shares to buy today

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 ResMed. The Motley Fool Australia has positions in and has recommended ResMed. 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 for new investment ideas this month, then it could pay to listen to what Bell Potter is saying.

That’s because the broker has just released its latest top Australian picks from the small-cap side of the market. These are its panel of favoured ASX shares that it believes offer attractive returns over the long term.

Two that make the list in May are named below. Here’s why it is bullish on them:

Aeris Resources Ltd (ASX: AIS)

Bell Potter has added this copper miner to its list this month. The broker highlights its substantial cash balance and strong production growth outlook as reasons to buy.

Commenting on the new addition, it said:

We add Aeris Resources (AIS) to the Small Cap Panel as a high-conviction copper-led growth and re-rating story. AIS is a copper-dominant producer whose near-term outlook is highly leveraged to copper prices and increasing production at its 100%-owned Tritton operation in central west NSW.

The market capitalisation is ~30% backed by net cash ($149.8m at the end of the March quarter, no drawn bank debt), with the last gold hedges to roll off this quarter, leaving the company completely unhedged from start of FY27. AIS’ March quarter delivered a $43m lift in cash with operating cash flow of $76m, and management is guiding to the low end of FY26 production guidance, implying a material step-up in copper output through the June quarter as production ramps.

Bell Potter also highlights that Aeris is now in a catalyst-rich window for this ASX share. It adds:

The setup into CY26 is the cleanest catalyst-rich window this stock has had. The first full quarter of open-pit production at Tritton should drive a step-change in operating cash flow, while early works at the higher-grade Constellation open-pit are set to commence this quarter, with first ore by end of CY26 a major positive catalyst for the copper production growth profile.

Praemium Ltd (ASX: PPS)

Another ASX share that is on the list in May is investment platform provider Praemium.

The broker is a big fan of the company and believes it is being significantly undervalued by the market compared to its larger rivals. Another positive is that Bell Potter estimates that its shares offer a 4.5% dividend yield at current levels.

As a result, the broker believes this has created a buying opportunity for investors. It said:

While Praemium has demonstrated commercial momentum, strong growth capacity, and a leading technology offering, its valuation continues to lag key peers. This stock looks very attractive at a 12MF PE of ~14x, and we expect the market to catch on as the company executes on further market share gains and FUA growth.

The post Bell Potter names the best ASX shares to buy in May appeared first on The Motley Fool Australia.

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• 4 ASX copper shares to buy now: experts
• Forget Rio Tinto shares and buy this ASX copper miner
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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 Praemium. 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 dividend share Sonic Healthcare Ltd (ASX: SHL) could be a dream holding for retirees due to its defensive earnings and impressive dividend profile.

Sonic Healthcare is a large global pathology business with operations across Germany, Australia, the USA, Switzerland, the UK, Belgium, Poland and New Zealand.

There are not many ASX shares that are as globally successful as Sonic Healthcare, and there’s a lot to like about the business.

Excellent dividend credentials

The Sonic Healthcare board of directors has a progressive dividend policy, and the payout has increased every year since 2013. Indeed, the annual dividend has increased almost every year since the mid-1990s.

Very few businesses on the ASX have a long-term dividend record like that. Only Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) and APA Group (ASX: APA) have a similar sort of payout record.

In the FY26 half-year result, the ASX dividend share decided to increase its interim dividend by 2.3% to 45 cents per share.

The last two dividends declared came to $1.08 per share. Excluding franking credits, that equals a dividend yield of 5.4%. If it repeats that level of dividend over the next 12 months, it’d be a grossed-up dividend yield of 7%. I think any retiree would be happy with that level of passive income.

Earnings growth

Sonic Healthcare is not a business that’s stuck with no growth – it’s actively grown through both organic growth and acquisitions. The growing and ageing populations of its core markets give the business a promising tailwind of demand.

In the FY26 half-year result, the company reported revenue grew by 17% to $5.45 billion, with organic growth of 5%.

For me, earnings growth is the most important thing to drive the share price (and dividend) higher.

The ASX dividend share’s HY26 operating profit (EBITDA) rose 10% to $907 million. Meanwhile, net profit increased 11% to $262 million and operating cash flow grew 10% to $682 million.

Given the company’s focus on improving its operating leverage, acquisition synergy realisation, and ongoing cost control across the business, I think its earnings outlook is very positive.

According to the projection on Commsec, the business is forecast to generate earnings per share (EPS) of $1.18 in FY26. That means it’s valued at 17x FY26’s estimated earnings.

The company’s EPS is expected to increase to $1.36 in FY27 and then $1.57 in FY28, suggesting there’s a good chance of capital growth and dividend growth in the years ahead.

The post Why this ASX dividend share is a retiree’s dream appeared first on The Motley Fool Australia.

More reading

• What’s making healthcare the worst sector on the ASX 200, down 39% in a year?
• 3 ASX dividend shares to build a passive income
• 1 ASX dividend stock down 30% I’d buy right now
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• 6 ASX shares hitting 52-week lows amid today’s market rally

Motley Fool contributor Tristan Harrison has positions in Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Apa Group and Washington H. Soul Pattinson and Company Limited. 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 for the winning combination of major upside potential and an above-average dividend yield, then read on.

That’s because Bell Potter thinks the ASX dividend share in this article offers both.

Which ASX dividend share?

The share in question is Universal Store Holdings Ltd (ASX: UNI).

It is the youth fashion retailer behind the Universal Store, Perfect Stranger, and Thrills brands.

Bell Potter highlights that Universal Store has released a solid trading update for the first 43 weeks of the financial year. It said:

Universal Store Holdings (UNI) provided a trading update for the first 43 weeks of FY26: group retail sales of +14% on pcp broadly in line with BPe, like-for-like (LFL) sales on pcp of +8.5% and +12.9% for key banners, Universal Store (US) and Perfect Stranger (PS) respectively. The improved growth rate from the last update at UNI’s key banner, US (+8.1% at end of Apr vs +7.1% at mid-Feb) was supported by some benefit in comps in the pcp through Apr.

However, the wholesale business saw a pronounced decline YTD to book in another impairment charge (last in 1H25) given structural challenges with a longer dated recovery flagged. FY26 guidance of revenue at $368-375m (+11.5% at mid-point) and EBITA of $61.5-64.5m was provided, in line with Consensus implying gross margins remaining in line. FY26 new store openings were also tracking to the previous guidance of 11-17 across the three banners.

Big potential returns

According to the note, the broker has retained its buy rating on the ASX dividend share with a trimmed price target of $9.30 (from $10.50).

Based on its current share price of $7.11, this implies potential upside of 30% for investors over the next 12 months.

In addition, the broker is forecasting fully franked dividend yields of 5.2% in FY 2026, 5.5% in FY 2027, and then 6.3% in FY 2028.

Commenting on its buy recommendation, Bell Potter said:

At 13x FY27e P/E (BPe), we see an entry opportunity to a high-quality retailer as we remain optimistic on UNI’s performance in 4Q26 given supportive comps and look forward to FY27e in delivering continued execution driven market share expansion across retail banners. In line with selective consumption trends across the broader sector, we retain our views of the youth customer prioritising ontrend streetwear and expect UNI to benefit with their leading position. Maintain BUY.

The post Bell Potter says this ASX dividend share offers a 5% yield and 30% upside appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Universal Store. 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 Universal Store. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.