The Pro Medicus Ltd (ASX: PME) share price has pulled back sharply in recent weeks.

Shares in the medical imaging software leader are down 13%, despite no change in the company’s underlying fundamentals.

At Friday’s close, Pro Medicus shares finished the session at $217.37.

For a stock that has delivered consistently over the long run, the recent weakness raises the question of whether the market has become too cautious.

A rare pullback in a premium business

Pro Medicus has built a reputation as one of the highest-quality software companies on the ASX. Its Visage Imaging platform is deeply embedded in large hospital networks, particularly across the US, where long contract durations and high switching costs create a powerful moat.

The recent share price weakness appears more about valuation concerns and broader market volatility than company-specific issues. There have been no profit warnings, no loss of major customers, and no slowdown in contract momentum.

Contract wins continue to stack up

Just weeks ago, Pro Medicus announced another significant long-term contract with a large US healthcare group. The agreement covers a multi-year rollout across the customer’s network, with room to expand over time.

That lines up with what management outlined at the latest AGM. Demand from US hospital systems remains strong, sales pipelines are deep, and existing customers continue to expand the platform’s footprint.

Brokers remain firmly bullish

Despite the recent pullback, broker views on Pro Medicus haven’t really changed.

Most major brokers continue to rate the stock as a buy, pointing to its long-term growth profile and ability to scale earnings as contracts roll through. Price targets remain comfortably above current levels, with many sitting in the $250 to $280 range.

Bell Potter has again highlighted Pro Medicus as a preferred healthcare name heading into 2026, citing its strong competitive position and clear revenue visibility. Similar themes are coming through across other broker updates, with analysts still seeing upside as new contracts ramp up and margins continue to expand.

Foolish takeaway

Rather than focusing on whether Pro Medicus is cheap, the real question is whether anything has changed. Right now, it’s business as usual.

Contract momentum remains solid, broker confidence hasn’t wavered, and management continues to point to a deep pipeline of US opportunities. In that context, the recent pullback looks more like a shift in sentiment than any change in the underlying story.

For investors watching the stock, this phase may be less about picking the exact bottom and more about gradually building exposure to a high-quality ASX 200 company.

The post Is now the time to buy Pro Medicus shares? appeared first on The Motley Fool Australia.

More reading

• 3 of the best Australian shares to buy and hold until 2035
• 3 unstoppable ASX shares to buy with $3,000
• Bell Potter names the best ASX healthcare shares to buy in 2026
• The ASX stocks I think could define the next decade of growth
• These ASX 200 shares could rise 30% to 40% in 2026

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

Fortescue Ltd (ASX: FMG) shares ended 3.23% lower at the close of the ASX on Friday afternoon, at $21.88 a piece. The latest decline has done little to dent the stock’s strong gains over the past 6 months though. At the time of writing the shares are 50.48% higher than 6 months ago, while year-on-year the shares are 18.91% higher.

What happened to Fortescue and its shares in 2025?

Over the past 6 months, the iron ore mining giant’s shares have been boosted by resilience of global iron ore prices. Iron Ore rose to 106.92 USD/T on December 19, 2025, up 0.02% from the previous day. Over the past month, Iron Ore’s price has risen 2.57%, and is up 2.97% compared to the same time last year, according to trading on a contract for difference (CFD) that tracks the benchmark market for this commodity.

The company’s shares were also boosted by its impressive September quarter results. In late October, the miner reported that it had increased its total iron ore shipments to 49.7Mt in Q1 FY26, up 4% year-on-year to a new record level. 

Fortescue also said that for FY26, it is sticking to its guidance of 195–205Mt in total shipments, and plans to keep costs tight. The company is also investing in metals and energy projects, with capex guidance of up to US$4 billion for metals and around US$300 million for energy.

On Monday last week, investors started snapping up the shares again after the company announced it had entered into a binding agreement to acquire Alta Copper Corp (TSX: ATCU).

Fortescue said it has agreed to acquire the remaining 64% of Alta Copper’s issued and outstanding common shares that it does not already own through a Canadian Plan of Arrangement. Alta Copper shareholders will receive cash consideration of C$1.40 per share, which represents a significant premium of 50% to the 30-day volume weighted average price (VWAP). It implies a total equity value for Alta Copper of C$139 million (A$152 million).

Directors of Alta Copper who are entitled to vote have unanimously recommended to shareholders that they vote in favour of the transaction.

What’s next for the mining stock?

I’m concerned that as a miner which is so reliant on the iron ore industry, any pull-pack in iron ore prices over the next 12 months could be devastating for the business. This is particularly relevant against the backdrop of Fortescue’s latest iron ore price forecast for 2026.

The bank’s analysts have cautioned that a large forecast increase in global iron ore supplies in 2026, coupled with material reductions in Chinese steel production, could trigger a 20% fall in the iron ore price to around US$83 per tonne.

TradingView data shows the majority have a hold rating (9 out of 15) on Fortescue shares. Another 5 have a sell or strong sell rating. The average target price for the shares is $19.64, although some think it could fall as low as $16.37 over the next 12 months. This implies a potential downside as large as 25.16%, at the time of writing.

The post Fortescue shares jumped 50% in 6 months. Is there any upside left? appeared first on The Motley Fool Australia.

More reading

• Buying Rio Tinto, Fortescue and BHP shares? Here’s Westpac’s sobering 2026 iron ore price forecast
• What a rising Aussie dollar means for your ASX shares
• Why is everyone talking about Fortescue shares today?
• Fortescue to acquire Alta Copper: What it means for investors
• ASX 200 mining shares lead the market for a second week

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 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 Spark New Zealand Ltd (ASX: SPK) share price is in focus after the company announced a new partnership with Challenger Ltd (ASX: CGF), which is set to reduce Spark’s net debt by around $240 million in the first half of FY26.

What did Spark New Zealand report?

• Entered a new receivables financing partnership with Challenger
• Sale of existing interest free payment (IFP) receivables to reduce net debt by ~$240 million in H1 26
• Ongoing sale of future IFP receivables to Challenger will support growth in mobile handset payment plans
• The new structure improves Spark’s capital efficiency and return on invested capital
• No material impact on Spark’s net debt to EBITDAI ratio under S&P’s methodology

What else do investors need to know?

Spark will use proceeds from the sale of its IFP receivables to reduce net debt, but this won’t significantly change the company’s net debt to EBITDAI ratio according to S&P’s calculation. The funds from the receivables sale will not be included in Spark’s free cashflow for the upcoming dividend calculation.

Spark will retain control of the overall customer experience, including how customers enter into IFP plans, carry out payments, and manage credit checks or collections. The company will continue collecting repayments directly from customers and transferring eligible receivables to Challenger at market value.

What did Spark New Zealand management say?

Spark CEO Jolie Hodson said:

Our mobile customers highly value interest free payment options as a convenient way to purchase the latest devices and manage costs over time. The value of IFP as a highly effective acquisition and retention tool only continues to grow, particularly as mobile device prices increase.

Mobile is our number one priority as a business, and this new partnership with Challenger will enable us to support the ongoing growth of IFP while improving capital efficiency – allowing us to reinvest in areas that deliver the most value for our customers and shareholders.

What’s next for Spark New Zealand?

Looking forward, Spark will regularly sell future IFP receivables to Challenger, supporting further growth in its interest free device payment offerings. This approach will help Spark expand its mobile business, manage working capital more efficiently, and target investments in areas that deliver value for both customers and shareholders.

Spark’s strategy remains focused on growing its mobile segment as its top priority, using innovative funding partnerships to support sustainable long-term growth.

Spark New Zealand share price snapshot

Over the past 12 months, Speak New Zealand shares have declined 26%, underperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 5% over the same period.

View Original Announcement

The post Spark New Zealand cuts debt by $240m via Challenger financing deal appeared first on The Motley Fool Australia.

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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.

Term deposits are an effective tool for Aussies to protect their capital and still generate pleasing interest income. But, I think certain ASX shares could be a more appealing option for passive income.

ASX shares do come with higher risk than a term deposit because share prices can drop. But, share prices can rise too – they can deliver potential gains.

Today, I want to focus on why both of the following businesses could be better options than term deposits.

Shaver Shop Group Ltd (ASX: SSG)

Shaver Shop is a leading retailer of male and female grooming products such as electric shavers, clippers, trimmers and wet shave items.

On the dividend side of things, the business increased its payout each year between 2017 (when it started paying cash to shareholders) and 2023. The company maintained its dividend in 2024 and then increased its payout in 2025. Dividends aren’t guaranteed, of course.

Term deposits provide consistent payouts without cuts or growth, while Shaver Shop has delivered payments with growth in all but one year (with no cuts along the way).

The business paid an annual dividend per share of 10.3 cents per share. At the current Shaver Shop share price, that translates into a grossed-up dividend yield of 10.2%, including franking credits.

I’m optimistic the business can continue growing its profit, and therefore the payouts, by expanding its store count (beyond the current 125), growing its own brand called Transform-U, gaining more exclusive products from top shaving brands and benefiting from the ASX share’s scale.

Rural Funds Group (ASX: RFF)

Rural Funds is another pleasing option for passive income compared to term deposits, in my view. It’s a real estate investment (REIT) that owns farmland across Australia in different states and climatic conditions.

It owns cattle, almonds, macadamias, vineyards and cropping, giving the business pleasing diversification and reducing risks. This strategy also means it can search across a wide array of assets to find the best opportunity in terms of the combination of income and long-term growth.

The business increased its distribution each year between 2014 to 2022. It has maintained its payout each year since then, despite the headwinds of higher interest rates. It has guided that it’s going to pay the same amount in FY26, which translates into a future distribution yield of 5.75%.

I think its payout can grow in the coming years as its rental income grows – its farms have rental growth built-in, with either fixed annual increase or the growth is linked to inflation.

It’s trading at attractive value, in my opinion, and I think it’s a good, defensive option to own for the long-term.

The post Forget term deposits! I’d buy these two ASX shares instead appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Rural Funds Group. 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 Rural Funds Group. 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.

Are you on the hunt for some ASX dividend shares to buy in December?

If you are, analysts think the two named below could be worth considering. Here’s what they are saying about them:

Amcor (ASX: AMC)

Amcor could be an ASX dividend share to buy now according to analysts at Bell Potter.

It is a global packaging company that produces a wide variety of flexible and rigid packaging solutions for consumer, healthcare, and other markets.

The broker is feeling bullish on the company’s outlook thanks to its transformative merger with Berry Global. As well as making the business less cyclical, Bell Potter believes this merger leaves it well-positioned for a period of significant growth. It said:

The investment thesis for Amcor is based on its transformative merger with Berry Global, which positions the company for a period of significant growth and quality improvement. The merger is expected to drive two years of double-digit EPS growth, fuelled by an estimated $590 million in synergies, with 80% anticipated to be realised within the first 24 months.

Beyond the near-term earnings growth, the merger also creates a more resilient and less cyclical business by increasing its exposure to the defensive home & personal care and pharmaceutical sectors.

In respect to income, the consensus estimate is for dividends of 78 cents per share in FY 2026 and then 80 cents per share in FY 2027. Based on its current share price of $12.73, this would mean dividend yields of 6.1% and 6.3%, respectively.

Bell Potter has the company in its core portfolio with a key overweight rating “due to its valuation discount and post-merger growth prospects.”

Flight Centre Travel Group Ltd (ASX: FLT)

Over at Morgans, its analysts are bullish on travel agent giant Flight Centre and think that it could be an ASX dividend share to buy in December.

The broker believes it is worth sticking with the company through tough trading conditions because when the tide finally turns, it thinks the upside could be material for investors. Commenting on the company, Morgans said:

FLT’s FY25 result was broadly in line with its recent update. Corporate was weaker than expected while Leisure and Other were stronger. FLT’s guidance for a flat 1H26 was stronger than we expected however it was weaker than consensus. Earnings growth is expected to accelerate in the 2H26 from an improvement in macro-economic conditions and internal business improvement initiatives. We have made minor upgrades to our forecasts.

We are buyers of FLT during this period of short-term uncertainty and share price weakness because when operating conditions ultimately improve, both its earnings and share price leverage to the upside will be material.

With respect to dividends, Morgans is forecasting fully franked dividends of 52 cents per share in FY 2026 and then 61 cents per share in FY 2027. Based on the current Flight Centre share price of $15.41, this would mean dividend yields of 3.4% and 4%, respectively.

Morgans currently has a buy rating and $18.38 price target on its shares.

The post Why experts say these growing ASX dividend shares are top buys for income 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 no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Amcor Plc. The Motley Fool Australia has recommended Flight Centre Travel Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Owning Flight Centre Travel Group Ltd (ASX: FLT) shares has been an incredibly volatile time over the past decade, as the chart below shows.

Flight Centre is a major travel agent business for both consumers and corporates. It has a global presence including Australia, New Zealand, the UK, Canada, South Africa, the US, Hong Kong, China, Singapore and UAE.

COVID-19 significantly disrupted Flight Centre’s earnings and now the company’s earnings has returned following a recovery in travel as well as a few targeted acquisitions. Let’s take a look at analyst forecasts for the business. Could profit growth help send the Flight Centre share price higher?

FY26

The business recently acquired a cruise leisure business called Iglu, increasing its exposure to that growing segment – it now represents around $2 billion of total transaction value (TTV) for the company. Iglu is the leading cruise agency in the UK, according to UBS.

UBS said its preliminary analysis suggests “5%-6% EPS [earnings per share] accretion in FY27/FY28, assuming cruise grows at 7%” per annum.

This should help the ASX share’s margins as Iglu comes with an operating profit (EBITDA) to total transaction value (TTV) margin of 3.1% compared to 2.2% for the Flight Centre leisure segment, with another £12.1 million of expected synergies within two years.

If Flight Centre manages to achieve its cruise ‘stretch target’ of $3 billion in FY28, UBS predicts this would increase the forecast FY28 net profit after tax (NPAT) by another 6%.

However, a shift in the outlook for Australian interest rates since the AGM, creates a “more challenging outlook for the leisure business.” But, the outlook for additional new business wins within the corporate segment has “arguably increased” and ongoing productivity initiatives “should continue to drive efficiency improvements”.

UBS predicts EPS could rise at a compound annual growth rate (CAGR) of 18% between FY26 to FY29.

The broker notes that Flight Centre increased its underlying profit before tax (PBT) guidance by $10 million to $315 million to $350 million for FY26.

Owners of Flight Centre shares could see their business generate $230 million of net profit in FY26, according to UBS, putting the valuation at 14x FY26’s estimated earnings.

FY27

UBS projects that the business could generate $281 million of net profit in the 2027 financial year as the situation plays out as the broker expects, which I covered above.

FY28

In the 2028 financial year, Flight Centre’s net profit is projected to increase to $330 million, representing another double-digit increase in percentage terms.

FY29

Profit growth could start slowing down in the 2029 financial year, according to the forecast from UBS.

In FY29, Flight Centre’s earnings could rise to $361 million.

FY30

In the 2030 financial year, owners of Flight Centre shares could see the net profit improve to $385 million.

If that happens, it would mean a possible rise of net profit of 67% between FY26 and FY30.

The post Here’s the earnings forecast out to 2030 for Flight Centre shares appeared first on The Motley Fool Australia.

More reading

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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 Flight Centre Travel Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX 200 stocks are sometimes perceived as offering more modest returns (and risk) to their blue-chip status.

However, at the time of writing, there are roughly 17 companies inside the ASX 200 that doubled in value so far in 2025. 

Many of these have enjoyed tailwinds from global commodity prices. 

This goes to show that even large-cap companies can deliver significant upside.

While there is still a couple of weeks left in 2025, here are two that are on track to double this calendar year. 

Perenti Global (ASX: PRN)

Perenti Global is a mining services company offering surface and underground mining solutions. It provides exploration drilling, production drilling, blasting, and geotechnical services.

In January of this year its shares were trading at $1.44 each. 

Last week, this ASX 200 stock closed at $2.94. 

That represents a rise of more than 104%. 

For context, the S&P/ASX 200 Materials (ASX: XMJ) is up roughly 27% in the same period. 

Key wins this year included a $300M Dalgaranga contract with Ramelius Resources Ltd (ASX:RMS) in September. 

The contract awarded Parenti Limited’s underground mining business, Barminco, a four-year contract for underground mining services at the Dalgaranga Gold Project. 

Financially, the company posted solid growth, which included for FY25: 

• Revenue of $3.5 billion jumped by 4% from previous year, with operating earnings (EBITDA) of $668 million rising by the same amount.
• Its EBIT margin strengthened to 9.6% (up from 9.4% in FY24).
• Underlying net profit after tax (NPAT) of $178.4 million also grew by 8%.
• Final dividend of 4.25c/share declared, taking total FY25 dividends to 7.25c/share (up from 6c/share in FY24). 

Monadelphous Group Ltd (ASX: MND)

Monadelphous Group is an engineering company that provides construction, maintenance, and industrial services to the mining, energy, and infrastructure sectors. 

At the start of 2025, shares were trading for approximately $14. 

Last week, shares closed at $26.40, which represents a rise of almost 90%. 

This ASX 200 stock is up approximately 97% in the last 12 months, so while it hasn’t quite doubled this year, it could pass this benchmark by new years. 

At last month’s AGM, management attributed this year’s success to multiple factors, including the record $2.3 billion of secured new work, with $570 million secured post year end major wins in energy, iron ore and renewables. 

Do these soaring ASX 200 stocks still have upside?

After almost doubling in such a short span, investors may be interested if there is further upside for these stocks. 

In a recent note out of Morgans, the broker placed a $29.00 price target on Monadelphous Group shares. 

This indicates a further upside of 9.85%. 

For Perenti Global, it appears it is trading close to fair value. 

TradingView has an analyst price target of $2.93, while an older report from Bell Potter had a 12 month price target of $2.80. 

The post Investors likely doubled their returns with these ASX 200 stocks in 2025 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.

Guzman y Gomez Ltd (ASX: GYG) shares ended the week 5.96% higher at the close of the ASX on Friday afternoon, at $22.06 a piece.

The jump has helped to recover some of the fast food retailers’ recent share price losses, albeit there is a long way to go before the stock returns to peak levels. Over the past 6 months, GYG shares have tumbled 24.5%. They’re now trading 46% below the share price this time last year.

What’s happened to Guzman y Gomez shares?

There was no price-sensitive news out of the company last week. Friday’s uptick could imply that investor sentiment about the stock is shifting, although it could be investors shorting the stock in anticipation of more declines.

Investors have gradually lost confidence in Guzman y Gomez shares this year following its two disappointing earnings updates.

In August, the restaurant operator reported its FY25 results. It revealed a 23% year-on-year increase in global reported sales. It also recorded a 45.5% increase in EBITDA, and a 151.8% surge in net profits after tax (NPAT). 

But investor optimism was dented by news of the comparable sales growth numbers in Australia. The company’s Australian business, which includes operations in Singapore and Japan, achieved 9.6% comparable sales growth, $1,168 million in network sales, and $66 million in segment underlying EBITDA. 

The company also revealed that its sales had risen just 3.7% in the seven weeks since 30 June, which was sharply below the 7.6% growth expected by the market. 

Earlier in the year, the Mexican fast-food service operator also posted disappointing H1 FY25 results. Whilst overall network sales rose 22.8% to $577.9 million, sales in the United States fell 12.7% to $4.9 million. Sales in the Australia segment rose 9.4% to $573 million. 

Guzman y Gomez was also recently listed as one of the most shorted stocks on the ASX, approximately 13.2%, of its shares loaned out to hedge funds that are betting on the price to fall, according to data from the Australian Securities and Investments Commission. This is another week-on-week increase. Valuation concerns are likely to be behind this. Especially given the disappointing performance of its US business, which was seen as a key driver of long term growth. It is now the third most shorted stock in the market.

Is there any chance of an upside ahead?

Analyst sentiment about Guzman y Gomez shares appears to be shifting to be more positive. TradingView data shows that out of 10 analysts, 4 have a buy or strong buy rating on the stock and 4 have a hold rating. The remaining 2 have a sell or strong sell rating.

Interestingly, analysts think the share price has the potential to storm higher over the next 12 months. The average target price is $27.95, which implies a potential 26.7% upside ahead, at the time of writing. However, some expect the share price could climb as high as $36, which would translate to an impressive 63.19% increase from the current trading price.

Earlier this month, the team at Morgans reiterated a buy rating and $32.30 price target, believing the fast casual Mexican chain can bounce back. The broker said that GYG launched a new limited-time offer (LTO): the BBQ Chicken Double Crunch (BBQ CDC). Early feedback suggests the item is one of Guzman y Gomez’ more indulgent menu items and taste tests have been overwhelmingly positive.

Analysts at Macquarie initiated coverage on the stock in October with a price target of $31.10. The broker said Guzman y Gomez’s current share price weakness is an attractive entry point for investors. Combined with bold expansion plans, Macquarie thinks the business can deliver strong earnings growth through to FY30. 

It looks like the latest share price spike could be the sign of things to come. Therefore, today could be a great opportunity to buy shares on sale before it takes off.

The post 6% spike on Friday: Are Guzman y Gomez shares getting ready to soar? 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 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 ASX dividend stock GQG Partners Inc (ASX: GQG) has fallen close to 30% since its February 2025 peak, as the chart below shows. Despite its strong rise since November 2025, I think it could still be undervalued at this level.

GQG is a fund manager that’s headquartered in the US, but it also has a geographic presence in a number of other markets including Australia, the UK and Europe.

The ASX dividend stock offers four main strategies for investors – US shares, global shares, international shares (excluding US shares) and emerging market shares.

There are a couple of reasons why I think the ASX dividend stock could still be a solid, underrated buy.

Low earnings multiple

Fund managers normally trade on a lower price/earnings (P/E) ratio compared to other sectors, but I think GQG’s P/E ratio is particularly depressed.

The business regularly reports to investors about its funds under management (FUM), which is the key factor for generating profit because nearly all of its earnings are based on management fees rather than performance fees.

GQG regularly pays a large dividend to investors each quarter. In October, it declared a quarterly dividend of 5.6775 Australian cents, which was 90% of the company’s estimated third-quarter distributable earnings. That implies the GQG share price is only trading at 7x annualised earnings.

If the business can grow its earnings, it could be undervalued at this level.

Additionally, with such a low earnings multiple and such a high dividend payout ratio (of 90%), it can provide investors with a strong return through cash payments. Based on the latest quarterly dividend, it has an annualised dividend yield of 12.6%, at the time of writing.

If the business is able to maintain its dividend over the next 12 months, that level of passive income alone could outperform the S&P/ASX 200 Index (ASX: XJO).

Performance turnaround?

For a fund manager, the performance of its funds is key. GQG’s funds have recently underperformed due to taking a defensive position in an expensive market.

But, recently some of those high-flyers have gone backwards, and if GQG can own the right stocks going forwards it could lead to regaining client confidence and hopefully a slowing of FUM outflows (or even inflows).

In November 2025, the ASX dividend stock reported that its FUM grew by $2.4 billion to $166.1 billion, despite experiencing net outflows of $2.4 billion.

Prior to 2025, GQG had a long-term record of outperformance across its main strategies and I think the investment team have the skills to rediscover that track record.

The post 1 ASX dividend stock down 30% I’d buy 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 Gqg Partners. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Sometimes, boring is beautiful. This ASX dividend share doesn’t sell flashy tech, mine lithium or promise AI-fuelled riches.

What Metcash Ltd (ASX: MTS) does offer is something many investors are craving right now: a chunky dividend yield, a modest share price and a business model built to grind on, even when times are tough.

The price of the ASX dividend share took a tumble in the past month with 14% to $3.28 at the time of writing. This year it has lost 5.5%, compared to a 5.7% gain for the S&P/ASX 200 Index (ASX: XJO).

At current levels, Metcash shares look more appealing than exciting — and that’s precisely the point.

Dividend drawcard

Metcash sits behind some of Australia’s most familiar retail brands. It’s the wholesaler powering independent supermarkets under the IGA banner, as well as foodservice businesses, liquor retailers and hardware chains such as Mitre 10 and Home Timber & Hardware.

The biggest drawcard is the dividend. Metcash has built a reputation as a reliable payer, and its dividend yield looks attractive compared with many larger ASX names that have either trimmed payouts or failed to grow them meaningfully.

With the share price sitting at relatively low levels, that yield looks even more compelling at 5.5%. Investors aren’t paying up for blue-sky growth — they’re being paid to wait. In a market still jittery about interest rates and consumer spending, that steady income stream matters.

Squeezing suppliers, cautious shoppers

Let’s be clear, Metcash is not a growth rocket. It operates in fiercely competitive markets, with supermarket giants constantly squeezing suppliers and shoppers watching every dollar. If consumer spending weakens sharply, volumes can come under pressure.

Metcash won’t make you rich overnight. But at a low share price, with an appealing dividend yield and solid long-term prospects, it’s doing exactly what many ASX investors want right now. The ASX dividend share is paying them reliably while keeping risk in check.

Increasing dividend payouts

UBS projects the ASX dividend share to increase its payout every year between FY25 to FY29. That could be great news for investors focused on passive income.

Early December, the company highlighted that its latest dividend will be worth 8.5 cents per share. It will come fully franked, as the payouts from Metcash tend to do.

This dividend matches last year’s interim payout, but it is lower than the 9.5 cents per share final dividend investors enjoyed back in August.

What next for the ASX dividend share?

Most analysts also predict moderate to strong upside from Metcash’s current share price with the maximum potential upside at 43%.

The average 12-months price target has been set at $3.93, which suggests a share price gain of almost 20%. That could lift total Metcash earnings, including dividends, past the 25% mark.  

The post Time to buy this ASX dividend share now it’s down 14% appeared first on The Motley Fool Australia.

More reading

• Two ASX 200 stocks with buy recommendations from Ord Minnett
• Why Austal, Fenix Resources, Metcash, and Polynovo shares are falling today
• This retail stock could deliver healthy double-digit returns after a steep fall this week
• Macquarie slashes price target on Metcash shares as price plunge continues
• Here’s how much the new Metcash dividend is worth

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 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.