For many working-age Aussies, a wage is the main (and only) source of income. That’s better than having no income at all, but wouldn’t it be great to create a second income from ASX shares?

There are only so many hours in a week, so wage earnings are limited by how much we work. Creating a portfolio of ASX shares that are making passive income would significantly improve our financial stability.

What amount of a second income does someone need?

I don’t know about you, but when I’m in my 70s, I don’t want to be in a position where I have to work. I have a goal of generating enough annual dividends which can cover my core life expenditure. At that point, I’d be financially independent!

That’s a large, long-term goal which is a long time away.

When I first started investing in ASX dividend shares, I thought of the second income it produced as just budget-boosting dollars that unlocked additional spending in discretionary categories. Passive income returns don’t necessarily need to be locked away for decades like superannuation.

A $1,000 investment could create enough annual income to pay for a couple of takeaways or a restaurant meal with friends.

Building an ASX dividend share portfolio of $10,000 could mean making enough annual passive income to pay for an overnight stay (and associated spending) somewhere.

Or, the money could just be used to give more breathing room in someone’s budget that year.

If we regularly invest spare money into ASX shares, we could quickly find that plenty of money is hitting our bank accounts each year.

The power of a dividend yield

I really like ASX dividend shares for creating a second income because you don’t need to take on debt to do it (unlike buying a property). It can be done with small, regular investments.

Most importantly, businesses can pay passive income without necessarily hurting the ability to increase the dividend next year. That’s why I prefer ASX dividend shares to term deposits – there is growth potential for the income and capital value.

If I were investing with income in mind, I’d only want to buy stocks I have good confidence would deliver a similar (or larger) payout each year. I’ll run through a few examples of compelling names for a second income.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) is a diversified investment house that has increased its annual dividend every year for the past 27 years in a row. At the time of writing, it has a grossed-up dividend yield of 3.8%, including franking credits.

Wesfarmers Ltd (ASX: WES) is a major blue-chip that owns Bunnings, Kmart, Officeworks and Priceline. It has a focus on shareholder returns, with a goal of regularly growing the dividend. At the time of writing, it has a grossed-up dividend yield of 3.6%, including franking credits.

Future Generation Australia Ltd (ASX: FGX) is a listed investment company (LIC) that doesn’t have any management fees, instead donating 1% of net assets each year to youth charities. The fund-of-funds portfolio strategy gives significant diversification. It has a grossed-up dividend yield of 7.7%, including franking credits, at the time of writing. The ASX dividend share has increased its annual payout each year over the past decade.

Telstra Group Ltd (ASX: TLS) is Australia’s leading telecommunications business with a market-leading network that attracts more customers each year. Its growing mobile earnings are helping fund a growing dividend and it has a grossed-up dividend yield of 5.6%, including franking credits, at the time of writing.

Of course, these aren’t the only ASX shares worth investing in for a second income.

The post Don’t want to rely on your wage? Build a second income with these ASX shares appeared first on The Motley Fool Australia.

More reading

• Here are my top 10 ASX stocks for 2026
• 2 ASX dividend stocks thst should be in every income portfolio
• 10 ASX shares I’d buy with $10,000 in 2026 to beat the market
• 5 reasons to hold Telstra shares until 2030
• Where to invest $7,000 in Janaury

Motley Fool contributor Tristan Harrison has positions in Future Generation Australia and 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 and Wesfarmers. The Motley Fool Australia has positions in and has recommended Telstra Group and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Many S&P/ASX 200 Index (ASX: XJO) investors on the hunt for passive income in 2025 were attracted to the likes of Santos Ltd (ASX: STO), Beach Energy Ltd (ASX: BPT), and Woodside Energy Group Ltd (ASX: WDS) shares.

And for good reason.

All three ASX 200 energy stocks offer market-beating dividend yields. And both BHP and Beach Energy paid out fully franked dividends in 2025. Meaning investors may be able to hold onto more of that passive income when the ATO comes knocking.

But which stock offered the best payouts? Santos, Beach Energy, or Woodside?

Let’s drill in.

Tapping into Beach Energy, Santos, and Woodside shares for passive income

Kicking off with Woodside, the ASX 200 energy stock paid a final fully franked dividend of 84.9 cents per share on 2 April. Eligible stockholders will then have received the interim Woodside dividend of 81.8 cents per share on 24 September.

That equates to a full 2025 calendar year passive income payout of $1.667 per share.

Woodside shares closed on Friday changing hands for $23.59 apiece. This sees Woodside shares trading on a fully-franked trailing dividend yield of 7.1%.

Moving on to Santos shares, the oil and gas company paid its final unfranked dividend of 16.3 cents per share on 26 March. Santos paid out its interim dividend of 20.3 cents per share, franked at 10%, on 1 October.

This works out to a full year, dividend payout of 36.6 cents per share.

At Friday’s closing price of $6.15, Santos shares trade on a partly franked trailing dividend yield of 6%.

Which brings us to the passive income on tap from Beach Energy shares in 2025.

If you owned Beach Energy stock throughout 2025, you’d have received the company’s fully-franked interim dividend of 3 cents per share on 31 March. Beach Energy then paid an all-time high final dividend of 6 cents per share on 30 September.

That totals 9 cents per share in dividend payouts in 2025.

At Friday’s closing price of $1.10 a share, this sees Beach Energy trading on a fully-franked trailing dividend yield of 8.2%.

Which ASX 200 energy shares paid the most passive income in 2025?

On a per-share basis, the $1.667 in passive income delivered by Woodside in 2025 is the clear leader.

But Woodside shares are also by far the most expensive.

The award for best dividend yield goes to Beach Energy, at 8.2%, fully franked.

How have these ASX 200 energy shares been tracking?

Over the 12 months through to market close on Friday, the ASX 200 has gained 4.67%.

Not including the passive income they’ve paid out, here’s how these three ASX 200 energy stocks have performed over this same period:

• Santos shares are down 12%
• Woodside shares are down 7%
• Beach Energy shares are down 23%

The post Santos, Beach Energy, or Woodside shares. Which ASX energy share paid the most passive income in 2025? appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• Why Codan, DroneShield, Mesoblast, and Woodside shares are storming higher today
• 5 things to watch on the ASX 200 on Friday
• Oil prices bounce after sharp sell off. Is the worst finally over?
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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.

In 2026, I’m focused on owning businesses with clear competitive advantages, sensible balance sheets, and management teams that have proven they can execute.

They are ASX stocks I would be comfortable holding through market volatility, with the expectation that time and fundamentals do most of the work.

With that in mind, here are my top 10 ASX stocks for 2026.

CSL Ltd (ASX: CSL)

For me, CSL remains one of the highest-quality healthcare companies on the ASX. While 2025 was a difficult year, expectations have now reset. I believe the core plasma business remains structurally strong, with scale and barriers to entry that few competitors can match. As margins recover and efficiency initiatives flow through, CSL could quietly reassert itself.

SiteMinder Ltd (ASX: SDR)

SiteMinder provides mission-critical software to the global hotel industry. Its platform is deeply embedded in hotel operations, which creates strong switching costs. While profitability is still developing, the long-term opportunity remains compelling if management continues to execute.

Lovisa Holdings Ltd (ASX: LOV)

Lovisa is a globally scaled specialty retailer focused on fashion jewellery with an impressive store rollout model. I like its focus on return on capital and its ability to adapt pricing and ranges quickly. If consumer conditions stabilise in 2026, Lovisa has the potential to benefit from both operating leverage and continued international expansion.

Wesfarmers Ltd (ASX: WES)

Another ASX stock I rate highly for 2026 is Wesfarmers. It is one of the most reliable blue chips on the ASX. Its Bunnings, Kmart, Officeworks, industrial, and healthcare businesses provide diversification and resilience. I continue to rate management’s capital allocation discipline highly, which I think is a critical ingredient for long-term value creation.

Flight Centre Travel Group Ltd (ASX: FLT)

Flight Centre has reinvented itself multiple times over its four-decade history. I like its exposure to both leisure and corporate travel, as well as its growing presence in higher-margin segments like cruises. As global travel normalises further, this ASX stock could deliver solid earnings growth in 2026.

Temple & Webster Group Ltd (ASX: TPW)

Temple & Webster provides a platform to access Australian e-commerce. Its asset-light model and strong brand position it well as online penetration in furniture continues to increase. While housing-related demand can be cyclical, I think the long-term opportunity remains significant.

DroneShield Ltd (ASX: DRO)

DroneShield operates in counter-drone technology, a market that is becoming increasingly important for defence and critical infrastructure. While revenue can be lumpy, the long-term demand drivers are structural. I’m comfortable holding through volatility given the size of the opportunity.

Xero Ltd (ASX: XRO)

Xero could be one of the highest-quality software businesses on the ASX. Its platform is deeply entrenched in small business operations, with high retention and recurring revenue. After a significant share price pullback, I think the risk-reward looks more balanced for long-term investors.

Sigma Healthcare Ltd (ASX: SIG)

Sigma Healthcare has been transformed by its merger with Chemist Warehouse. The combined business now sits at the centre of Australia’s pharmacy network, with scale across wholesale, franchising, and retail. As integration benefits flow through, I see a credible path to earnings growth.

TechnologyOne Ltd (ASX: TNE)

TechnologyOne rounds out the list as a high-quality, lower-risk growth stock. Its enterprise software is embedded in government and large organisations, with long contracts and high switching costs. The shift to SaaS has improved its earnings quality, while its international expansion adds a long growth runway.

Foolish Takeaway

My top 10 ASX stocks for 2026 reflect how I prefer to invest. I want exposure to quality, structural growth, and businesses that can compound through different market conditions.

No stock is without risk, and not all of these will perform equally in any single year. But taken together, I believe this group offers a well-balanced mix of resilience, growth, and long-term relevance as we head through 2026.

The post Here are my top 10 ASX stocks for 2026 appeared first on The Motley Fool Australia.

More reading

• Buy, hold, sell: CBA, CSL, and DroneShield shares
• This is a great place to invest $1,000 into ASX shares right now
• 10 ASX shares I’d buy with $10,000 in 2026 to beat the market
• How to build a $250,000 ASX share portfolio starting at zero
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Grace Alvino has positions in CSL, DroneShield, Lovisa, and Wesfarmers. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, DroneShield, Lovisa, SiteMinder, Technology One, Temple & Webster Group, Wesfarmers, and Xero. The Motley Fool Australia has positions in and has recommended SiteMinder and Xero. The Motley Fool Australia has recommended CSL, Flight Centre Travel Group, Lovisa, Technology One, Temple & Webster Group, and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Building an ETF portfolio shouldn’t feel like assembling IKEA furniture without instructions. Done right, it’s simple, boring and – most importantly – effective.

Done wrong, it’s a monster of overlapping funds and hot themes that fizzle out. Here’s how to build a sound ETF portfolio that works hard while you get on with life.

Start with the big, boring stuff

The backbone of any ETF portfolio is broad market exposure. Think global equities, not ‘AI blockchain space robotics ETF of the week’. A total world or developed markets ETF, gives you instant access to thousands of companies across countries and sectors.

Here’s an example balanced DIY ETF portfolio tailored for an Australian investor with a moderate risk/return profile. A balanced portfolio typically aims for roughly 50–60 % equities (growth) and 40–50 % bonds (defensive). It’s a classic mix that aims to grow your wealth over time without the wild swings of an all-equity portfolio.

It’s diversification in one click and diversification is the only free lunch in investing.

Home bias: helpful, not obsessive

It’s fine to tilt towards your home market for familiarity, dividends and tax efficiency. But don’t go all in, and allocate say 25% of the equities to homegrown stocks.

Vanguard Australian Shares Index ETF (ASX: VAS) and BetaShares Australia 200 ETF (ASX: A200) for instance both offer a broad coverage of Australia’s largest stocks.

A healthy slice of international equities, about 30%, reduces your dependence on one economy, one currency and one political mood swing. Balance is the name of the game.

An ETF such as Vanguard MSCI Index International Shares ETF (ASX: VGS) gives you broad exposure to large and mid-cap companies in developed markets outside Australia like the US, Europe, Japan.

Add bonds for ballast

Equities are the engine; bonds are the shock absorbers. They won’t make headlines at dinner parties, but they reduce risk and help smooth the ride when markets wobble.

iShares Core Composite Bond ETF (ASX: IAF) does just that. It’s a broad fixed-income ETF covering Australian government and corporate bonds.

A broad bond ETF can reduce volatility and give you dry powder when stocks are on sale. The closer you are to needing the money, the more bonds deserve a seat at the table.

Keep costs on a tight leash

Fees matter. A lot. ETFs shine because they’re cheap, but “cheap” isn’t automatic. Check management fees and avoid paying extra for fancy packaging.

Over decades, even small fee differences can mean thousands of dollars more in your pocket—not the fund manager’s.

Resist the siren song of themes

Thematic ETFs are exciting. They’re also often late to the party. By the time a trend has an ETF, expectations are sky-high and valuations stretched.

If you must dabble, keep it small. Your core portfolio should be sturdy, not trendy.

Rebalance, don’t react

Markets move. Your portfolio drifts. Rebalancing – once or twice a year – forces you to trim what’s run hot and top up what’s lagging.

It’s disciplined, slightly boring and surprisingly powerful. Reacting to headlines, on the other hand, is a fast track to regret.

The golden rule: keep it simple

You don’t need 15 ETFs to look sophisticated. Three to five well-chosen funds can cover global shares, home market exposure and bonds. Simple portfolios are easier to stick with and sticking with a strategy beats constantly chasing the next shiny thing.

The post This is how I would build a sound ETF portfolio from scratch appeared first on The Motley Fool Australia.

More reading

• 5 excellent ASX ETFs to buy and hold for 10 years
• What is the Russell 2000 Index and why has it been booming over the past 6 months?
• Where to invest $7,000 in Janaury
• New to Investing? Here’s a 3-ETF ASX portfolio
• 4 pros and cons of buying the Vanguard Australian Shares ETF (VAS) in 2026!

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 recommended Vanguard Msci Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Both Guzman Y Gomez (ASX: GYG) and Domino’s Pizza Enterprises Ltd (ASX: DMP) shares experienced plenty of volatility in 2025. 

But which is a better buy in 2026?

Here’s what experts are saying. 

Guzman Y Gomez

Guzman Y Gomez shares first listed on the ASX back in mid-2024 opening at approximately $29 per share. 

Following its arrival, the Mexican restaurant chain saw a steady stock price rise as the general sentiment around the company was positive thanks to its growth prospects. 

However after hitting more than $43 per share in December 2024, it’s been pretty much a steady decline for Guzman Y Gomez shares. 

The share price is now down more than 50% since that time, which included a fall of 45% in 2025. 

Why the fall?

Although Guzman Y Gomez reported record sales and profit growth in FY2025, the results still came in below what investors and analysts had expected.

Underlying earnings surged 152% to $14 million in fiscal 2025, driven by a 23% increase in global network sales and an expansion in operating margins. 

However, investor sentiment was dampened by rising losses in the early-stage US business and a slowdown in Australian sales momentum, which overshadowed the otherwise strong performance.

Where to from here?

Experts are seemingly tipping a rebound based on its current share price. 

Guzman Y Gomez shares are hovering around $21.50 at the time of writing.

Last month, Morgans placed a buy rating and $32.30 price target on the Mexican restaurant chain’s shares. 

From yesterday’s stock price, that indicates more than a 50% upside. 

Domino’s Pizza Enterprises

Dominos Pizza shares were down 50% from yearly highs at one point last year. 

After bottoming out around $13 per share, they have now somewhat recovered and are currently trading at around $22.45. 

Dominos shares remain down more than 20% over the last 12 months. 

The sell off largely came following the company’s FY25 financial results. 

This included: 

• Network sales down 0.9% to $4.15 billion
• Revenue down 3.1% to $2,303.7 million
• EBIT down 4.6% to $198.1 million

In 2025 Dominos also changed CEO.

So after a turbulent year, is there any upside for Dominos shares?

Estimates from analysts are mixed. 

On the positive side, Morgans currently has a buy rating and $25.00 price target on Dominos shares. 

This indicates an upside of around 11%. 

Meanwhile, the average analyst rating on TradingView shows Dominos shares are now overvalued by approximately 11%. 

Similarly, online brokerage platform Selfwealth lists Dominos shares as 10% above fair value. 

The post Are Guzman Y Gomez or Dominos shares a better buy in 2026? appeared first on The Motley Fool Australia.

More reading

• 10 ASX shares I’d buy with $10,000 in 2026 to beat the market
• Down 45%: Are Guzman Y Gomez shares a buy yet?
• Here are the top 10 ASX 200 shares today
• These are the 10 most shorted ASX shares
• The top ASX growth stocks that could rebound in 2026 after a brutal year

Motley Fool contributor Aaron Bell has positions in Domino’s Pizza Enterprises. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Domino’s Pizza Enterprises. The Motley Fool Australia has recommended Domino’s Pizza Enterprises. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If you are wanting to make some buy and hold investments, then exchange traded funds (ETFs) could be worth considering.

They allow investors to buy large numbers of shares with a single click of the button. This essentially means you can build a diversified portfolio with relative ease.

With that in mind, here are five ASX ETFs that could suit a buy-and-hold approach over the next 10 years.

Vanguard Australian Shares ETF (ASX: VAS)

The Vanguard Australian Shares ETF is a natural starting point for long-term investors.

This popular fund provides investors with broad exposure to the Australian share market, covering the largest listed 300 companies across banking, resources, healthcare, and consumer sectors. This gives investors diversification, regular dividend income, and exposure to the local economy in a single investment.

Vanguard MSCI International Shares ETF (ASX: VGS)

While Australia offers quality stocks, it represents only a small slice of the global market.

The Vanguard MSCI International Shares ETF helps solve that problem by providing exposure to over 1,200 stocks from across the United States, Europe, and other developed markets. This includes many of the world’s most influential businesses in technology, healthcare, and consumer goods.

VanEck Morningstar Wide Moat AUD ETF (ASX: MOAT)

A third ASX ETF to look at is the VanEck Morningstar Wide Moat ETF. It allows investors to buy a slice of companies with sustainable competitive advantages and fair valuations.

The fund holds a concentrated portfolio of US-listed businesses that have sustainable wide economic moats. This approach has similarities to the long-term philosophy often associated with Warren Buffett, focusing on quality, pricing power, and defensible market positions. And given his success over multiple decades, it is hard to argue against this strategy.

Betashares Global Quality Leaders ETF (ASX: QLTY)

The Betashares Global Quality Leaders ETF is another ASX ETF that could be worth considering. It takes a rules-based approach to identifying high-quality global stocks.

The ETF focuses on businesses with strong balance sheets, high returns on equity, and consistent earnings. These traits tend to matter more over longer periods than short-term growth spurts.

It was recently recommended by analysts at Betashares.

Global X Battery Tech & Lithium ETF (ASX: ACDC)

Finally, the Global X Battery Tech & Lithium ETF adds a thematic growth element to a long-term portfolio.

This ASX ETF provides investors with exposure to stocks involved in battery technology and lithium supply chains. These are areas that are expected to benefit from electric vehicle adoption, energy storage, and electrification trends over many years.

It was recommended by the team at VanEck.

The post 5 excellent ASX ETFs to buy and hold for 10 years appeared first on The Motley Fool Australia.

More reading

• 10 ASX shares I’d buy with $10,000 in 2026 to beat the market
• 3 top ASX ETFs for beginners to buy with $1,000
• 2 ETFs that are good bets to beat the ASX 200 in 2026
• Where to invest $7,000 in Janaury
• Where to invest $20,000 in ASX ETFs this month

Motley Fool contributor James Mickleboro has positions in VanEck Morningstar Wide Moat ETF. 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 VanEck Morningstar Wide Moat ETF and Vanguard Msci Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Finding stocks that can deliver strong returns over several years is not about chasing short-term hype. Instead, it is about owning quality businesses with clear long-term tailwinds, solid balance sheets, and proven execution.

With that in mind, here are 3 ASX shares that could be worth holding for the next 3 years. They come from different sectors, which helps spread risk without sacrificing upside potential.

Let’s unpack.

PLS Group Ltd (ASX: PLS)

PLS Group, previously known as Pilbara Minerals, is one of Australia’s leading lithium producers and a key supplier to the global electric vehicle supply chain.

At the time of writing, PLS shares are trading at around $4.69, giving the company a market capitalisation of roughly $15 billion. Over the past 12 months, the share price has surged by more than 100%, reflecting a sharp recovery in lithium sentiment.

After a difficult period during the lithium downturn, sentiment has improved sharply. Lithium prices have rebounded from their lows, and investors are once again focusing on long-term EV demand rather than short-term price swings.

The company’s Pilgangoora operation in Western Australia is a globally significant asset, and production volumes continue to underpin PLS’ position as a major player in battery materials.

Some brokers remain cautious on valuation after the strong rally, but most agree that lithium demand growth over the next decade remains compelling. For investors with a long-time horizon, PLS offers direct exposure to one of the most important commodities of the energy transition.

Eagers Automotive Ltd (ASX: APE)

Eagers Automotive is Australia and New Zealand’s largest automotive retail group, operating hundreds of dealerships across multiple brands.

Eagers shares are currently trading at around $26.85, valuing the business at approximately $7.6 billion. The stock has delivered a one-year return of more than 120%, driven by strong earnings and improved investor confidence.

While car sales can be cyclical, Eagers has built a diversified earnings base that includes used vehicles, servicing, parts, and finance. This provides some resilience during softer economic conditions.

The company has also benefited from disciplined capital management and strong cash generation. Brokers are mixed on near-term upside following the share price recovery, but many see Eagers as a high-quality operator with scale advantages that smaller competitors struggle to match.

For long-term investors, Eagers offers exposure to consumer spending with a proven management team and a strong market position.

Evolution Mining Ltd (ASX: EVN)

Evolution Mining is one of Australia’s largest gold producers, with operations across Australia and Canada.

At present, Evolution shares are trading near $12.85, giving the company a market capitalisation of about $26 billion. Over the past year, the share price has climbed by more than 150%, supported by higher gold prices and improved operational performance.

Gold plays a unique role in portfolios, often performing well during periods of economic uncertainty or market volatility. Evolution’s diversified asset base helps smooth production risks, while its balance sheet remains relatively robust compared to smaller peers.

Broker sentiment toward Evolution is generally neutral, reflecting higher operating costs and fluctuating gold prices. However, many analysts still view the stock as a reliable way to gain gold exposure within a diversified portfolio.

For investors seeking defensive characteristics alongside growth potential, Evolution stands out.

The post 3 monster stocks to hold for the next 3 years appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• 5 things to watch on the ASX 200 on Friday
• 12 ASX lithium shares rip to 52-week highs
• Buy, hold, sell: AGL, Coles, and PLS shares
• 10 best ASX 200 large-cap shares of 2025

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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Eagers Automotive Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If you are hunting for ASX 200 stocks that could supercharge your portfolio, then read on.

That’s because listed below are two buy-rated stocks that analysts believe could rise at least 20% from current levels.

Here’s what they are recommending to clients:

Netwealth Group Ltd (ASX: NWL)

Bell Potter has named investment platform provider Netwealth as an ASX 200 stock to buy.

The broker believes recent share price weakness has created a buying opportunity for investors. It said:

Upgrade to Buy. First Guardian is an overhang, but if net flows are maintained then the company is on-track to beating guidance and maybe consensus. Against this backdrop there continues to be noise – KKR is looking to exit CFS and Macquarie has disrupted its flows – so we view FY26 as a good setup and upgrade based on valuation, where NWL has averaged an EV/

multiple of 33x.

The last traded price implies 29x our blended FY26-27 estimates. NWL has continued to build platform functionality with additional managed account options, a new individual HIN offering and expanded bond access through the trading desk. This should increase revenue share, and we can see a pathway to the usual +20% revenue growth story that historically has attracted value investors around these levels.

Bell Potter currently has a buy rating and $31.50 price target on the ASX 200 stock. Based on its current share price of $25.76, this implies potential upside of 22% for investors over the next 12 months.

Zip Co Ltd (ASX: ZIP)

The team at Macquarie Group Ltd (ASX: MQG) believes that buy now pay later (BNPL) provider Zip could be an ASX 200 stock to buy.

While the broker acknowledges that loss rates are increasing due to its explosive total transaction value (TTV) growth, it still expects the company to achieve its net transaction margin guidance.

In light of this, the broker sees a lot of value in its shares at current levels. Macquarie said:

Outperform. We forecast Zip to continue to deliver rapid growth supported by increased product adoption, expansion of merchant network, increased customer engagement and digital product innovation.

Catalysts: We expect ZIP to deliver attractive TTV growth and NTM in the guidance range, with potential upside risk to earnings.

Macquarie has an outperform rating and $4.85 price target on Zip’s shares. Based on its current share price of $3.56, this suggests that upside of 36% is possible between now and this time next year.

The post These ASX 200 stocks could rise 20% to 35% appeared first on The Motley Fool Australia.

More reading

• How to build a $250,000 ASX share portfolio starting at zero
• Here are the top 10 ASX 200 shares today
• Here are the top 10 ASX 200 shares today
• 3 ASX 200 blue-chip shares I would buy with $100,000
• Top brokers name 3 ASX shares to buy 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 Macquarie Group and Netwealth Group. The Motley Fool Australia has positions in and has recommended Macquarie Group and Netwealth Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The three ASX shares in this article are among the most popular on the local market.

But are they buys according to analysts? Let’s find out if they rates them as buys, holds, or sells in January. Here’s what they are saying:

Commonwealth Bank of Australia (ASX: CBA)

Banking giant Commonwealth Bank of Australia is one of the most widely held shares on the local market. But unfortunately for its many shareholders, the team at Morgans believes its shares could fall heavily from current levels.

The broker recently put a sell rating and $96.07 price target on CBA’s shares. This is significantly lower than its current share price of $153.22.

Morgans suspects that tougher trading conditions and its current valuation mean there is a risk of poor future investment returns. It recently said:

The market’s response to a mild earnings miss for a stock priced for perpetual perfection was today’s sharp share price decline. WBC seemed to be a beneficiary. We’ve downgraded FY26-28F EPS and DPS by c.3%. Lower earnings also reduces terminal ROTE and sustainable growth in our DCF valuation. DCF-based target price declines to $96.07/sh. We remain SELL rated on CBA, recommending clients aggressively reduce overweight positions given the risk of poor future investment returns arising from the even-now overvalued share price and low-to-mid single digit EPS/DPS growth outlook.

CSL Ltd (ASX: CSL)

Morgans believes that CSL’s shares have been sold down to levels that are unjustified and is urging investors to snap them up while they can.

The broker has a buy rating and $249.51 price target on this biotechnology company’s shares. It said:

Despite the majority of the business “tracking to plan”, FY26 cc guidance had been downgraded (2-3% at revenue and NPATA mid-points), mainly reflecting continued declines in US influenza vaccination rates, although Chinese government cost containment affecting albumin demand was also flagged. While management is confident it can limit the impact of the latter to 1HFY26 via mitigation measures, ongoing uncertainty in the US influenza vaccine market has seen FY27-28 NPATA growth expectations moderate (to HSD from DD) and delay the demerger of Seqirus (prior FY26).

Although it remains challenging to know when US influenza vaccination rates will stabilise, we believe the risk of a permanently lower base is being over-priced, with Seqirus and Vifor marked down, with even Behring trading below peers and well under its long-term average, which we see as unjustified. We lower FY26-28 net profit forecasts by up to 14.3%, with our PT decreasing to A$249.51 (from A$293.83). BUY.

DroneShield Ltd (ASX: DRO)

Finally, the team at Bell Potter thinks that DroneShield is well-positioned in a rapidly growing market.

As a result, it has a buy rating and $4.50 price target on the counter drone technology company’s shares. Commenting on its outlook, the broker said:

We believe DRO has a market leading RF detect/defeat C-UAS offering and a strengthening competitive advantage owing to its years of battlefield experience and large and focused R&D team. We expect 2026 will be an inflection point for the global counter-drone industry with countries poised to unleash a wave of spending on RF detect and defeat solutions. Consequently, we believe DRO should see material contracts flowing from its $2.5b potential sales pipeline over the next 3-6 months as defence budgets roll over to FY26e.

The post Buy, hold, sell: CBA, CSL, and DroneShield shares appeared first on The Motley Fool Australia.

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• Top Australian stocks to buy with $5,000 in 2026
• Why Codan, DroneShield, Mesoblast, and Woodside shares are storming higher today
• Aussie defence stocks tick higher on bullish Trump comments

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

Income investors, particularly those reliant on the passive income from ASX dividend stocks to fund their retirements or lifestyles, tend to be a discerning lot. The dividend shares that tend to make it into their income portfolios usually share some key characteristics. Strong and stable dividend yields are one, of course. But you can probably add defensive earnings bases, mature business models, and the ability to attach full franking credits to their dividends, too.

Today, let’s discuss two ASX dividend stocks that I think tick all of these boxes and are thus worthy of being in any income-focused Australian share portfolio.

2 ASX dividend stocks that should be in every income investor’s portfolio

Telstra Group Ltd (ASX: TLS)

First up, we have the ASX telco, Telstra, which has been a favourite amongst the ASX’s dividend investors for decades. This is no accident. Telstra has made an art out of leveraging its status as Australia’s dominant telecommunications provider for the benefit of its shareholders.

The telco commands a comfortable lead in market share of both mobile services and fixed-line internet in Australia. Many customers, particularly in rural and regional areas, have no choice but to use Telstra’s mobile network. That gives this ASX dividend stock a wide economic moat.

We can see this play out in Telstra’s dividends. The telco has been raising its shareholder payouts like clockwork in recent years, thanks to a defensive and resilient earnings base. Today, you can get this passive income payer on a trailing dividend yield of about 4%, which comes with full franking credits attached too.

Coles Group Ltd (ASX: COL)

Next up, we have another reliable dividend payer in Coles. Just like Telstra, I like Coles as an income stock thanks to its inherent defensiveness. Coles sells food, drinks, household essentials, and alcoholic beverages – all staple products that tend to be in high demand regardless of the health of the broader economy. After all, we all need to eat and stock our households with life’s essentials, regardless of whether the economy is booming or in recession.

Over the past seven years, the Australian economy has endured a pandemic, a recession, and a period of historically high inflation. Despite this, Coles has managed to increase its annual dividend every single year. That proves its nature as a reliable ASX dividend stock in my view.

Last week, Coles was trading on a dividend yield of approximately 3.3%. That has always come with full franking credits attached too.

The post 2 ASX dividend stocks thst should be in every income portfolio appeared first on The Motley Fool Australia.

More reading

• 5 reasons to hold Telstra shares until 2030
• Buy, hold, sell: AGL, Coles, and PLS shares
• How I’d build a $1,000-a-month passive income from ASX shares
• Analysts are urging investors to buy these ASX dividend shares
• Top retirement shares for Australian investors to buy now

Motley Fool contributor Sebastian Bowen 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.