The ASX dividend share space has seen a lot of volatility in the last year, amid significant changes surrounding tariffs, inflation and interest rates.

A higher interest rate is a significant headwind for the valuations and profitability of certain businesses due to how it could impact demand for their products and services, and/or increase the cost of debt.

Let’s look at two businesses I believe are significantly undervalued on a long-term basis, while their current dividend yields are very attractive.

Dexus Industria REIT (ASX: DXI)

This business is a real estate investment trust (REIT) that is largely invested in high-quality industrial warehouses across major Australian cities, providing sustainable income and capital growth.

Rental income is incredibly consistent and enables reliable distributions. In FY26, it expects to generate funds from operations (FFO) – net rental profit – of 17.4 cents per security. This is expected to fund an annual distribution per unit of 16.6 cents, which translates into a distribution yield of around 7%.

The business notes that underlying supply-demand fundamentals are solid, with low vacancy rates across core industrial markets, with high land and construction costs putting pressure on pipelines. In the medium-to-long-term, the sector is expected to be supported by a growing population and limited available supply.

In terms of the valuation, the ASX dividend share reported a net tangible asset (NTA) per security of $3.39 as at 31 December 2025. At the time of writing, it’s trading at a discount of around 30% to this figure.

Nick Scali Ltd (ASX: NCK)

The other ASX dividend share I want to highlight is Nick Scali, a furniture retailer.

The business operates Nick Scali in both Australia and the UK. It also sells furniture through the Plush brand in Australia after recently acquiring it.

Time will tell how much the recent changes to the economic environment impact the furniture retailer, but I’m optimistic the company can perform once conditions improve again.

But, the current Nick Scali share price looks too good (and low) to ignore because the economic backdrop won’t always be like this.

For starters, the company’s FY26 half-year result was very pleasing – ANZ revenue grew 13.1% to $251.7 million and ANZ net profit rose 29.4% to $46 million. Overall revenue (including the UK) rose 7.2% to $269.3 million and net profit grew 23.1% to $41 million. This allowed the business to hike its interim dividend per share by 30% to 39 cents.

One of the most exciting parts of the result was that the UK’s gross profit margin improved by 14.1 percentage points, going from 45.1% to 59.2%. I think this bodes well for future profitability in the UK as it opens more stores there. The projection on CMC Invest suggests the business could pay an annual dividend per share of 72 cents in FY26, which translates into a grossed-up dividend yield of 7.1%, including franking credits, at the time of writing. The forecast currently also suggests the business could increase its annual dividend per share in FY27 and FY28.

The post These 2 ASX dividend shares are great buys right now appeared first on The Motley Fool Australia.

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• 5 ASX retail shares whose 12-month price targets just got slashed
• 5 ASX 200 shares downgraded by the experts this week
• 5 ASX shares with 50% to 60% upside ahead: Experts
• Down 40%: Why this ASX 200 stock could be a top buy at a 52-week low
• 9 ASX 200 shares with renewed buy calls from the experts this week

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

The Reserve Bank of Australia has already raised the cash rate three times in 2026.

The official cash rate now sits at 4.35%, matching the highest level since December 2011.

On 16 June, the RBA board will meet again. And while markets are currently pricing in a hold at near-certainty, the language that accompanies that decision could move ASX shares as much as the decision itself.

Here is why this meeting matters so much, and what it means for three of the most widely held stocks on the ASX.

Why the June meeting is so consequential

The RBA will announce its next interest rate decision on 16 June.

Futures markets moved decisively after the April CPI release. Swap pricing is now assigning a probability exceeding 95% to the RBA holding the official cash rate at 4.35% when the board convenes in mid-June.

That represents a sharp reversal from earlier in May, when markets had assigned meaningful odds to a fourth consecutive hike following the surprising jump in March CPI to 4.6%.

However, the pause may be fragile. The focal point for the RBA will be the trimmed mean inflation print. This indicator would need to break decisively below the top of the 2% to 3% target band.

Unfortunately for investors, this has not yet happened. Trimmed mean inflation rose to 3.4% in April, its highest reading since late 2024.

Markets are pricing in at least one further 25 basis point increase later in the year, likely during the September or October meeting. This would take the cash rate to 4.60%.

What the RBA says on 16 June about the outlook for further hikes will therefore be just as important as the decision itself.

What it means for CBA shares

Commonwealth Bank of Australia (ASX: CBA) sits in an unusual position relative to the RBA’s hiking cycle.

Higher rates support net interest margins, which is good for earnings.

But elevated rates also increase mortgage stress across CBA’s enormous home loan book, which is the most important credit risk variable the bank manages.

CBA has in recent times traded at a very significant premium to its historical valuation.

A RBA hold on 16 June, accompanied by dovish language suggesting the hiking cycle is complete, would likely sustain CBA’s momentum.

A hold with hawkish language, or worse a surprise hike, could trigger a sharp reversal.

What it means for Westpac shares

Westpac Banking Corp (ASX: WBC) is a simpler story than CBA on rates.

Westpac has approximately 69% of its loan book in residential mortgages, making it the most mortgage-exposed of the big four banks.

That means Westpac shareholders want the RBA to stop hiking more urgently than almost any other group of investors in Australia.

Each additional rate rise puts further pressure on the households servicing the $500-odd billion in mortgages on Westpac’s books, raising the risk of arrears and credit losses.

A clean hold on 16 June, with language signalling the RBA is comfortable waiting for inflation data to improve, would be the best possible outcome for Westpac shares.

Westpac declared a fully-franked interim dividend of 77 cents per share, payable 26 June.

This implies a forward grossed-up yield of approximately 6.2% at the current share price of $35.59.

That income floor remains attractive regardless of what the RBA does, but the capital outlook depends heavily on credit quality holding up.

What it means for Mirvac shares

For Mirvac Group (ASX: MGR), the RBA’s 16 June decision could be the single most important short-term catalyst the stock has faced all year.

Property trusts are acutely sensitive to interest rates because higher rates simultaneously increase borrowing costs and compress asset valuations through the discount rate applied to future cash flows.

Mirvac shares have fallen 30% over the past twelve months as the RBA’s hiking cycle has weighed on REIT valuations across the sector.

A definitive signal on 16 June that the RBA is done hiking would remove the single biggest overhang on the stock.

In the first half of FY 2026, Mirvac posted a 38% year-on-year lift in residential sales, confirming the underlying residential business is growing strongly regardless of the rate backdrop.

The federal budget’s new-build negative gearing exemption adds a further demand tailwind.

A dovish RBA signal on 16 June could significantly accelerate a re-rating for Mirvac shares.

Foolish Takeaway

Three rate hikes have already done significant damage to rate-sensitive ASX shares in 2026.

The 16 June meeting will not necessarily resolve the uncertainty, but the language accompanying the decision will tell investors a great deal about whether the worst is behind them.

For CBA, Westpac, and Mirvac shareholders, it is the most important date in the calendar right now.

The post Why the RBA’s next move could be the most important event for ASX shares in 2026 appeared first on The Motley Fool Australia.

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• Is this ASX financials stock a better buy than CBA shares?
• Should you buy CBA and NAB shares this week?
• Brokers rate these 5 ASX 200 shares as a sell!
• Buy, hold, sell: Wesfarmers, Saluda Medical, CBA shares
• Top 10 ASX shares bought and sold by investors in May

Motley Fool contributor Mark Verhoeven 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 S&P/ASX 200 Index (ASX: XJO) share Centuria Industrial REIT (ASX: CIP) would be my pick of the index because of its underlying value and the earnings growth prospects.

Recent tax changes announced by the Australian government appear to have made residential property less attractive. Commercial property still looks like a great buy to me and they’re usually positively geared.

It looks like a great time to invest in this real estate investment trust (REIT) for a few key reasons.

Strong rental outlook

Over the long term, I believe rising earnings (supported by income growth) will drive share prices higher.

Not many REITs have a strong rental outlook, but I believe this ASX 200 share (one of the country’s leading industrial property owners) does.

In the FY26 half-year result, the business reported that its portfolio was on average 20% under-rented, providing future earnings growth potential. That’s because the market rent of its properties has increased significantly since the previous rental contract was first signed.

In the FY26 third-quarter update, the REIT reported that re-leasing spreads averaged 36%, reflecting the “significant under-renting that exists within CIP’s portfolio and the ongoing comparatively strong market conditions that are prevalent across Australian industrial markets.” In other words, the new rental contracts are generating 36% more income than the old ones – that’s a huge increase!

The HY26 result also saw the business report an overall 5.1% increase in like-for-like (LFL) net operating income (NOI). I expect the ASX 200 share can continue to benefit from strong demand for facilities focused on e-commerce (distribution and logistics), data centres and refrigerated space (for food and medicine).

The manager of the REIT, Grant Nichols, said in February:

CIP maintains significant earnings upside due to its strong, anticipated medium-term income growth resulting from material under-renting across the portfolio, expected improved portfolio occupancy, prudent completed capital management and the expected market rental growth stemming from Australia’s favourable industrial market conditions. Improving tenant demand and constrained supply is expected to drive the national vacancy to less than 2.0% by 2030, providing a pathway to continued strong market rental growth.

Compelling valuation

Despite this strong outlook for the business, it’s trading at a sizeable discount to its net asset value (NAV).

I love investing in assets for less than they’re worth and this REIT is definitely trading at a cheap price.

It reported in the HY26 result that the net tangible assets (NTA) came to $3.95, so it’s trading at a discount of 25% at the time of writing.

There is a large discount despite the REIT’s track record of selling assets at a significant premium to the book value. Since FY23, it has sold almost $460 million of assets at an average premium to book value of 12%. This gives me confidence the NTA could actually be conservative, or at the very least fair.

As a bonus, it offers a distribution yield of 5.7%, at the time of writing.

The post If I could buy just 1 ASX stock in June, it’d be this cheap ASX 200 share appeared first on The Motley Fool Australia.

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• Megaport secures 4 new AI contracts, announces capital raise
• How much is needed in superannuation to target a $9,000 monthly passive income?
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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 Superloop Ltd (ASX: SLC) share price is in focus as the company upgrades its FY26 underlying EBITDA guidance to $118–122 million, a 28–32% lift on FY25, following its Lightning Broadband acquisition.

What did Superloop report?

• FY26 underlying EBITDA now expected at $118 million to $122 million, up from prior $112–$120 million guidance
• This represents 28% to 32% growth on FY25
• Lightning Broadband acquisition adds approximately $700,000 to FY26 earnings
• Capex guidance raised by $2 million to $34–$37 million (excludes IRU renewal)

What else do investors need to know?

Superloop is holding its Investor Day today, where management will outline a new three-year growth strategy, called Supercharge29, targeting the period FY27 to FY29. The strategy aims to build shareholder value through ongoing organic growth, expanding Smart Communities, accretive acquisitions, and disciplined capital management.

The company continues to provide connectivity to consumers, businesses, and wholesale partners using its infrastructure assets, including fibre, subsea cables, and fixed wireless. Superloop’s Infrastructure-on-Demand platform enables challenger retail brands to compete for a greater share of the Australian internet market.

What’s next for Superloop?

Investors can look forward to detailed updates on the company’s Supercharge29 strategy, aimed at driving sustained growth from FY27 onwards. Management emphasises continued investment in both organic initiatives and targeted M&A.

The enhanced capex guidance signals a commitment to strengthening Superloop’s infrastructure and supporting expanding Smart Communities, all while balancing returns with disciplined capital management.

Superloop share price snapshot

Over the past 12 months, Superloop shares have risen 31%, outperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 3% over the same period.

View Original Announcement

The post Superloop upgrades FY26 earnings guidance and unveils new strategy appeared first on The Motley Fool Australia.

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• If I could buy just 1 ASX stock in June, it’d be this cheap ASX 200 share
• Megaport secures 4 new AI contracts, announces capital raise
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today
• Why’s the ASX 200 falling today despite another tech rally?

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 Megaport Ltd (ASX: MP1) share price is in focus today after the company secured four new AI infrastructure contracts worth A$458.9 million and announced an on-demand GPU Pool to support enterprise AI demand.

What did Megaport report?

• Four new AI infrastructure contracts with combined Total Contract Value (TCV) of about A$458.9 million
• Contracts require around A$369.5 million in capital expenditure, mainly for NVIDIA GPUs, network, and storage infrastructure
• Pro forma Compute division ARR jumped to A$385.2 million, with total Group ARR at A$662.9 million
• Network ARR increased 25% year-on-year to A$277.7 million, with Net Revenue Retention at 113%
• Fully underwritten entitlement offer to raise A$827.3 million for funding these contracts and future growth opportunities
• FY26 revenue guidance range tightened to between A$307 million and A$315 million; EBITDA margin and Capex guidance unchanged

What else do investors need to know?

Megaport is investing A$350 million in the creation of a new global GPU Pool, aiming to give enterprise customers flexible, on-demand access to AI infrastructure. This approach is designed to address surging demand as workloads shift to latency-sensitive AI inference needs.

The entitlement offer, priced at A$14.30 per new share, is fully underwritten and will help fund both contracted demand and infrastructure expansion. Eligible shareholders can participate according to their June 5 allocation, and both institutional and retail components are included.

What did Megaport management say?

Chief Executive Officer Michael Reid said:

AI inference represents one of the biggest infrastructure opportunities of the next decade…The contracts announced today reflect the accelerating demand for globally-distributed AI inference infrastructure. Megaport’s software-provisioned compute, network, and storage platform positions us strongly to meet that demand. The proceeds from the Entitlement Offer will enable us to fulfil contracted customer demand while building an on-demand GPU Pool that creates new opportunities across enterprise and sovereign AI markets globally. As AI adoption accelerates, organisations need seamless access to GPUs, CPUs, storage, and the connectivity that powers them. Megaport is built to deliver it all.

What’s next for Megaport?

Megaport plans to roll out its Globally-Distributed AI Inference Cloud, leveraging more than 1,100 connected data centres in 31 countries. The new GPU Pool is expected to be deployed over the next 6–9 months, with servers achieving optimal utilisation within 3–6 months thereafter.

Looking ahead, Megaport expects ongoing investment into storage, network, and compute resources to meet growing AI and cloud demand. The company will update investors on progress at its full-year results announcement in August 2026.

Megaport share price snapshot

Over the past 12 months, Megaport shares have risen 23%, outperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 3% over the same period.

View Original Announcemen

The post Megaport secures 4 new AI contracts, announces capital raise appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today
• Why’s the ASX 200 falling today despite another tech rally?
• Buy, hold, sell: Origin Energy, Megaport, NAB shares
• Megaport shares halted after 86% surge. Is another major deal coming?

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 positions in and has recommended Megaport. 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.

There is a paradox at the heart of Pro Medicus Ltd (ASX: PME) right now.

Pro Medicus shares are down approximately 50% from their all-time high of $336.

The reason most investors give for that decline is artificial intelligence: the fear that AI will commoditise radiology software and make Visage, Pro Medicus’s core platform, obsolete.

However, this week, Pro Medicus signed a $28 million five-year contract renewal with Allegheny Health Network, an existing client, at higher fees than the prior contract.

Pro Medicus shares jumped 12% on the news. The contract renewal, at richer terms than before, is a rebuttal possible to the AI disruption narrative. If AI were genuinely threatening the Visage platform, clients would be hesitating.

Instead, they are recommitting at higher prices.

The AI disruption fear explained

The selloff in Pro Medicus shares began in earnest when the broader market started selling high-multiple software stocks on concerns that large language models and generative AI would displace enterprise software platforms.

The theory, applied to Pro Medicus, goes like this: if AI can interpret radiology images directly, perhaps hospitals will not need expensive dedicated radiology software like Visage at all.

This theory, based on the evidence, almost certainly wrong.

James Gerrish from Shaw and Partners addressed this directly, stating:

We think Pro Medicus is one of the few names where AI is more likely to enhance the moat than erode it. Rather than replacing Visage, AI can make the platform more valuable by improving radiology workflows, accelerating image analysis, supporting detection tools and automating parts of the reporting process.

Pro Medicus CEO Dr Sam Hupert has been even more direct.

He said:

Many have tried to replicate our tech stack over the last 17 years, but no one has succeeded, with or without AI.

Management has been actively embedding AI capabilities into Visage, including advanced breast cancer screening applications and its RadPath Hub. This tool integrates radiology and pathology data to support more sophisticated clinical decision-making.

This has made the product stronger, and clients are taking notice.

The numbers that matter

Ignore the share price noise and the underlying business continues to perform at an extraordinary level.

In the first half of FY2026, Pro Medicus delivered revenue growth of 28.4% to $124.8 million, with underlying profit before tax rising 29.7% to $90.7 million.

The company maintained an EBIT margin of 73%, one of the highest of any listed technology company in Australia.

Five-year contracted revenue now sits at approximately $1.1 billion, giving the business extraordinary earnings visibility.

Pro Medicus continues to maintain an exceptional customer retention record, while also winning major contracts against much larger competitors, a strong endorsement of the quality of its technology and the value it delivers to customers.

Yesterday’s Allegheny Health Network renewal is the latest in a string of contract wins and renewals that include a $330 million ten-year contract with Trinity Health and a $37 million five-year renewal with Northwestern Medicine.

Every renewal at higher fees confirms the competitive moat is intact.

What brokers think about Pro Medicus shares

The broker community has stayed firmly behind Pro Medicus shares through the selloff.

Gerrish from Shaw and Partners told investors his team was buying Pro Medicus shares for their Active Growth Portfolio, naming it the most defensively positioned software business on the ASX.

Morgans maintains a buy rating on Pro Medicus shares, noting that the longer-term growth outlook has actually strengthened through the recent wave of significant contract wins.

Catapult Wealth has also named Pro Medicus as a buy, pointing to growing market share in the United States and strengthening pricing power as evidence the AI disruption narrative is overdone.

The valuation question

Pro Medicus shares are not cheap even after the significant decline.

The stock trades at a meaningful premium to the broader market on earnings-based measures, reflecting the extraordinary quality of the business.

For investors who require a margin of safety in traditional valuation terms, Pro Medicus may not be the right stock.

However, for investors who believe the quality of a competitive moat, the strength of recurring revenue, and the trajectory of earnings growth are the right frameworks for valuing a business, the current entry point looks more attractive than at any point since 2022.

Foolish takeaway

Pro Medicus shares fell on fears that AI would destroy the business.

Yesterday’s contract renewal at higher fees than before is the clearest possible evidence those fears are wrong. AI is not the enemy of Pro Medicus. It may, in actual fact, be a friend.

According to Shaw and Partners, Morgans, and the company’s own management, AI is making the Visage platform more valuable, not less.

For patient investors willing to hold through ongoing volatility, this could indeed prove to be a once-in-a-generation entry point into one of the finest software businesses on the ASX.

The post Why AI is making Pro Medicus shares a once-in-a-generation buy appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• Which tech share is the ‘most defensively positioned software business’ on the ASX?
• Why DroneShield, Pro Medicus, SRG Global, and Woodside shares are charging higher today
• Is June set to be the month of the ASX healthcare rebound?
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Mark Verhoeven 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.

Commonwealth Bank of Australia (ASX: CBA) shares are one of the most popular options in the financial sector.

However, due to its premium valuation, many investors aren’t comfortable buying its shares at current levels.

So, what other options are there? Let’s look at one that Bell Potter rates as a buy.

Which ASX financials stock?

Bell Potter is bullish on COG Financial Services Ltd (ASX: COG) and is recommending it to clients this week.

It operates a group of distribution businesses that provide access to credit (and related insurance) for yellow commercial goods.

In addition, the ASX financials stock has balance sheet capacity to fund direct originations, with a focus on capturing some of the overflow for non-prime chattel mortgages.

Bell Potter highlights that trading conditions have been mixed for COG Financial Services. It said:

ABS data showed equipment, plant and machinery capital expenditure grew +18%, driven by data centre investment. Excluding this, core spending demonstrated +8% growth for the three months to 31 March compared with the pcp. Looking forwards, the investment pipeline is accelerating, with consecutive +8% upgrades.

While June quarter expectations have been forced upwards, we turn more conservative, given the significant contribution from data centres, and downgrade our volume growth forecast to the current run rate (broking & aggregation). Victorian business credit demand was down -2%. This is the main exposure for the business. Although national confidence is strengthening, with overall spending targets upgraded +11% for FY27E.

In addition, the broker highlights that there is meaningful potential for a re-rating in novated leasing. It adds:

Automotive suppliers and dealers have seen large increases in order backlogs, and trading updates indicate customers have continued to favour efficient vehicles through June. However, profit expectations are down on discounting and supply constraints. We view this reinforcing the case for re-rating novated leasing.

The channel stands to gain from new market entrants and increased electric vehicle uptake (lower priced Chinese brands). We view VFACTS data, due to be released tomorrow, as a catalyst. So far, novated leasing companies have seen their revenue growth trace settlements.

Should you invest?

According to the note, Bell Potter has retained its buy rating and $2.30 price target on this ASX financials stock.

Based on its current share price of $1.51, this implies potential upside of 52% for investors over the next 12 months.

In addition, the broker is expecting an attractive fully franked 4.6% dividend yield over the period, which lifts the total potential return beyond 56%.

Commenting on its investment thesis, Bell Potter highlights the discount that the ASX 300 share trades on compared to peers. It concludes:

Our Buy rating is unchanged. COG is delivering broad growth and continues to screen at a discount to broking and fleet peers, complemented by a string of acquisitions.

The post Is this ASX financials stock a better buy than CBA shares? appeared first on The Motley Fool Australia.

More reading

• Should you buy CBA and NAB shares this week?
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• Buy, hold, sell: Wesfarmers, Saluda Medical, CBA shares
• Top 10 ASX shares bought and sold by investors in May
• Are ASX 200 bank shares a buy in June?

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 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.

I’m sure every investor wants to make good returns from their portfolio. Some ASX shares could be more undervalued than others and deliver stronger returns in a relatively short amount of time.

Some analysts think certain stocks can rise by more than 50% in the next year, though those returns are not guaranteed.

Below could be two of the most promising ideas on the ASX today.

Bubs Australia Ltd (ASX: BUB)

Bubs describes itself as a leading infant nutrition company that’s “committed to providing premium-quality products that support the health and well-being of babies worldwide”.

In other words, it’s known for infant formula, including goat milk and grass-fed options. It has a presence in Australia, the US and growing international markets, including China.

The ASX share generated net revenue of $102.5 million in FY25 and it expects to reach FY26 revenue of between $105 million to $115 million, despite headwinds from challenging external market conditions.

It also expects to generate underlying operating profit (underlying EBITDA) of between $4 million to $8 million, despite evolving regulatory requirements, product availability constraints, geopolitical disruption in the Middle East, increased use of air freight to support re-stocking, and competitive pressures.

Bubs is focused on expanding distribution and marketing to potential customers. The US remains its strongest growth market and a key part of its strategy. It’s concluding the use of air freight to restock the US. It says it’s on track to achieve ranging in more than 10,000 stores in July 2026.

According to CMC Invest, of three analyst ratings within the last three months, the average price target is 15 cents. At the time of writing, that implies a possible rise of 63%. It’s valued at 15x FY28’s estimated earnings.

Objective Corporation Ltd (ASX: OCL)

The other ASX share I’ll highlight today is Objective Corporation, a software business that has enabled thousands of public sector organisations to shift to digital operations.

While the ASX share is not growing at a rapid speed, it’s expanding at a pleasing rate for compounding. In the FY26 half-year result, it revealed revenue growth of 9% to $66.7 million, with annualised recurring revenue (ARR) growth of 12% to $120 million.

Profit is increasing at a faster pace than revenue – I love seeing rising profit margins. Adjusted operating profit (EBITDA) grew 11% to $25.9 million and net profit rose 10% to $18.7 million.

According to CMC Invest, there have been three recent ratings on the business, with an average price target of $16.93, suggesting a possible rise of 62%. It’s valued at 21x FY28’s estimated earnings, according to the forecast on CMC Invest.

The post 2 ASX shares tipped to grow 50% or more in the next 12 months appeared first on The Motley Fool Australia.

More reading

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• Here’s 3 ASX technology companies Shaw and Partners has flagged as a buy

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

Bell Potter believes the ASX 300 share in this article may be close to being fully valued.

As a result, the broker has slapped it with a downgrade today, citing concerns about softening sector fundamentals.

Which ASX 300 share?

The stock that Bell Potter has become less positive on this week is Abacus Storage King (ASX: ASK).

The broker has reviewed the self-storage operator’s internalisation plans and current trading conditions. Unfortunately, it thinks both are softer than the market expects.

Speaking about the internalisation, it said:

Earnings uplift on internalisation – Management guided to ~6% pro-forma FFO accretion in FY26 from internalisation cost savings alone. We are more conservative at +4.8% net accretion in FY27, as management fee savings are partially offset by higher interest costs from a larger debt base, the $300m facility upsize, and a rising yield curve.

Internalisation may drive a re-rate, with internally managed REITs trading at a narrower NTA discount (-24.8% vs -31.3% for externally managed). However, recent sector internalisations (BWP, GNZ) have not produced a material step-change in price-to-NTA. While market conditions may explain this, ASK’s free float (40.5%) could limit the extent of a re-rate.

As for current trading conditions, Bell Potter isn’t confident. It adds:

Management have highlighted rental rate pressure from discounting and competition, consistent with data suggesting street rents have remained broadly flat to slightly negative CYTD. While not expecting near-term yield expansion, channel checks suggest transaction flows have been muted in recent months in response to higher funding costs.

Shares downgraded

According to the note, the broker has downgraded the ASX 300 share to a hold rating (from buy) with a reduced price target of $1.50 (from $1.70).

Based on its current share price of $1.39, this implies potential upside of approximately 8%.

However, it is worth noting that a dividend yield of 4.4% is expected over the period. So, this boosts the total potential return beyond 12%, which isn’t bad for a hold recommendation.

Commenting on the downgrade, Bell Potter said:

We downgrade to a HOLD recommendation on ASK with earnings uplift from internalisation cost savings offset by rising funding costs, and a more cautious outlook on rental rate growth driven by increased competition and discounting. We believe earnings growth (BPe +4.8% FY27) is priced in, with ASK trading on 21.5x P/FFO (vs 13.6x passive REIT avg).

The post Why a top broker just downgraded this ASX 300 share 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 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 superannuation system may be the best way for Australians to generate passive income because of how dividend payments are taxed at much lower rates compared to normal individual tax rates.

Passive income received in superannuation in the retirement portion of life could be tax-free. Isn’t that appealing?

Readers may be wondering how much an investor would need to receive a large amount of dividends each year. Let’s take a look at the required amount for that goal.

$9,000 of passive income each month from superannuation

Getting $9,000 per month would be $108,000 each year. That’d be a very satisfactory amount for most Australians and could fund a comfortable lifestyle.

How large the nest egg needs to be to receive $108,000 per year essentially boils down to what the portfolio yield is.

For example, if someone’s portfolio had an average dividend yield of 5%, they’d need a $2.16 million portfolio.

But, if the average dividend yield was 7.5%, an investor would need a $1.44 million portfolio.

If the average dividend yield were 3%, then an investor would require a portfolio size of $3.6 million.

There are plenty of options when it comes to aiming for these sorts of yields. I’ll point to a few ASX shares below. I have invested in a number of the names below to create a diversified, strong portfolio with a good yield and still have compelling growth prospects.  

Which ASX dividend shares I’d buy

There isn’t one right answer when it comes to investing for passive income in superannuation.

But it’s true that a business with a lower dividend yield may be investing more of its earnings back into itself to drive more growth for shareholders.

Some of the impressive businesses with a lower dividend yield include Lovisa Holdings Ltd (ASX: LOV), Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) and Wesfarmers Ltd (ASX: WES). I expect pleasing compounding of the dividend payout over the next three to five years.

Some of the compelling ASX dividend shares with a dividend yield of around 5% are names like exchange-traded fund (ETF) WCM Quality Global Growth Fund (ASX: WCMQ), listed investment company (LIC) Long Short Fund Ltd (ASX: LSF) and industrial real estate investment trust (REIT) Centuria Industrial REIT (ASX: CIP).

Turning to the higher-yield options I’d consider, names that spring to mind include WCM Global Growth Ltd (ASX: WQG), Future Generation Australia Ltd (ASX: FGX), Future Generation Global Ltd (ASX: FGG) and WAM Microcap Ltd (ASX: WMI).

The post How much is needed in superannuation to target a $9,000 monthly passive income? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Future Generation Australia, Future Generation Global, L1 Long Short Fund, Wam Microcap, Washington H. Soul Pattinson and Company Limited, Wcm Global Growth, and Wcm Quality Global Growth Fund. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Lovisa, Washington H. Soul Pattinson and Company Limited, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Lovisa and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.