ASX dividend shares have spent a decade winning the argument that they could yield more than cash. But that is no longer quite true.

Commonwealth Bank (ASX: CBA) is advertising a 12-month term deposit special of 5.15%, whilst Australia’s 10-year government bond yield reached around 5.19% on Tuesday, its highest level in 15 years.

The Reserve Bank has held the cash rate at 4.35% since May.

Suddenly, doing nothing pays something.

What cash actually pays right now

CommBank’s standard 12-month rate is 4.75%, with a 5.15% special offer available for a limited time.

Shorter terms pay considerably less, at 3.30% for three months and 3.45% for six.

In contrast, Betashares Australian High Interest Cash ETF (ASX: AAA) is the listed alternative.

The ETF holds nothing but deposits with banks, including National Australia Bank (ASX: NAB), Bank of Queensland (ASX: BOQ) and Rabobank, charges 0.18% a year, and currently offers a cash yield net of fees of 4.43%.

Income is paid monthly, and the fund holds roughly $4.9 billion.

The trade-off is a slightly lower rate in exchange for never locking your money away.

What ASX dividend shares pay after tax

This is where the comparison gets interesting.

Vanguard Australian Shares High Yield ETF (ASX: VHY) holds 92 companies led by the major banks and BHP.

Vanguard forecasts a yield of 4.2%, rising to 5.5% once franking credits are counted.

Units closed Monday at $85.61.

On the headline number, the term deposit wins comfortably.

A rate of 5.15% beats 4.2%, and it does so without any chance of losing your capital.

Franking is the thing that changes the maths.

Consider an investor on a 39% marginal rate including the Medicare levy.

The term deposit returns roughly 3.14% after tax.

VHY delivers about 3.36%, because franking credits offset most of the tax on the grossed-up income.

In pension phase, where those credits are fully refundable, VHY returns 5.5% against the term deposit’s 5.15%.

Why the margin is thinner than it looks

Two or three tenths of a percentage point is not much reward for taking equity risk.

A term deposit cannot fall in value, but VHY certainly can.

The fund is also heavily concentrated in banks and resources, which are the sectors most exposed to a rate rise.

ANZ Group Holdings Ltd (ASX: ANZ) now expects the Reserve Bank to lift the cash rate to 4.60% in November, and a higher cash rate would push term deposit offers higher again.

The real case for ASX dividend shares

Yield is the wrong reason to own ASX dividend shares at these rates.

Instead, growth is the right reason.

A term deposit pays 5.15% this year and an unknown number next year, but it will never pay you more than the rate you agreed to on the day you signed.

A dividend from a growing business rises over time, and the capital behind it can rise with it.

APA Group (ASX: APA) has now raised its distribution for 22 consecutive years, which no deposit product on earth can match.

Foolish takeaway

If you need the money within two years, take the term deposit.

The certainty is worth more than two tenths of a percentage point.

If you are investing for a decade or more, ASX dividend shares still make more sense, though for reasons that have nothing to do with beating cash this year.

The underlying truth is that cash has become a genuine competitor again.

The post Term deposits are paying more than ever. Are ASX dividend shares still worth it? appeared first on The Motley Fool Australia.

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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 positions in and has recommended Apa Group. The Motley Fool Australia has recommended Vanguard Australian Shares High Yield ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Finding ASX shares capable of producing market-beating returns isn’t easy, particularly when valuations remain elevated. But some brokers see significant upside in these two growth companies over the next year.

Both Mesoblast Ltd (ASX: MSB) and Zip Co Ltd (ASX: ZIP) have faced different challenges, but analysts believe their growth prospects could translate into substantial share price gains.

Mesoblast: strong sales growth and a well-funded outlook

The clinical-stage biotech has had a sluggish start to 2026. Mesoblast shares currently trade at $2.34, down 14% year to date but still 10% higher than they were 12 months ago.

The weakness appears to reflect greater investor caution around clinical timelines, alongside some profit-taking following last year’s strong rally.

Mesoblast develops and commercialises allogeneic cellular medicines for complex diseases. Some of its products are already in use, while other cell therapies are progressing through late-stage clinical trials.

Its Ryoncil product is gaining traction, while the company remains well funded. Brokers are also optimistic that sales can continue growing strongly in FY27.

TradingView data shows all five analysts covering the ASX shares rate them a strong buy. Their average price target of $4.08 implies potential upside of approximately 75%.

Bell Potter recently said Mesoblast’s latest results were broadly in line with expectations. The broker sees continued double-digit growth from Ryoncil, alongside major potential catalysts from Rexlemestrocel in heart failure and chronic lower back pain.

Bell Potter has a buy rating and a $4.45 price target, implying around 90% potential upside.

Zip: US as main attraction

Zip is a fintech providing buy now, pay later and digital payment services to consumers and merchants. Its rapidly expanding US business is the key attraction.

The US accounted for around two-thirds of Zip’s revenue in FY26, with total revenue increasing 24.7%. US revenue surged 37.3% in Australian dollar terms and 44.3% in US dollar terms, compared with just 4.6% growth in ANZ.

The US is also driving customer growth. Active US customers rose 9.3% to 4.65 million, while ANZ customers fell 8% to 1.88 million. For FY27, Zip expects US total transaction value to increase by more than 30%.

Importantly, profitability is growing faster than revenue. Cash gross profit increased 26.2% to $642.3 million, while cash operating profit jumped 57.9% to $268.9 million.

Analysts are particularly bullish. TradingView data shows all 13 analysts rate Zip a buy or strong buy. The average $4.52 price target suggests around 72% upside, while the most bullish target of $6.03 implies potential gains of roughly 130%.

UBS recently maintained its buy rating and $4.70 target, implying around 79% upside. Macquarie also has a buy rating, although its $3.50 target is considerably more conservative.

For investors hunting for ASX growth shares, both companies have significant potential, but that potential comes with materially higher risk than established blue-chip stocks.

The post Experts tip these $3 billion ASX shares to deliver over 75% returns appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther has positions in Mesoblast. 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.

Home values have now fallen for five months in a row, and the ASX is already feeling the impact.

Cotality’s national index dropped 0.9% in August, which leaves values 3.6% below their March peak.

REA Group Ltd (ASX: REA) shares fell 4.21% on Monday as the data landed, whereas Stockland Corp Ltd (ASX: SGP) climbed 2.29% on the same day.

Understanding that divergence will be key in determining how ASX investors should position themselves.

Why falling home values matter for ASX investors

The downturn has stopped being a Sydney story.

Ninety-three per cent of capital city suburbs recorded a decline over winter, and every capital except Darwin went backwards across the three months.

Sydney led the falls with a 1.4% drop in August and now lies 7.1% below its February peak.

Melbourne and Canberra each fell 1.1%, while Adelaide and Perth were down 0.8%.

Sales volumes are tracking 15.5% below the same period last year.

Cotality research director Tim Lawless summed up the change:

What started as a more concentrated easing across higher-value segments has now become a much more generalised softening, with the vast majority of capital city suburbs recording some level of decline.

For investors, the core question is whether a company earns its money from prices, from volumes, or from the loans behind them.

REA Group has the most direct exposure

REA Group is paid by agents to list properties.

When sales volumes fall 15.5%, that quickly becomes a revenue problems.

REA shares closed Monday at $169.78 and are down 30.19% over the past twelve months.

FY26 was still a strong year for the business.

Revenue rose 7% to $1,793 million and net profit after tax climbed 15% to $650 million, with the operating EBITDA margin expanding three percentage points to 61%.

The company lifted its dividend 20% to $2.97 per share.

The catch is the outlook, where management expects national buy listings to be flat to down low single digits in FY27.

Stockland is building into weaker home values

Stockland sells new houses and land, which is a different business entirely.

The company’s FY26 result delivered funds from operations of $892 million, up 10.4%, with FFO per security rising 9.1% to 36.9 cents.

Masterplanned community settlements jumped 30% to 8,902 lots and land lease settlements rose 48% to 777 homes.

Gearing improved to 22.7% from 25.2%.

FY27 guidance is for FFO per security of 38.0 to 39.0 cents.

At around $4.46 the shares trade on a price-to-earnings ratio of 10.51 and yield 5.85%, having fallen 28.64% across the year.

Affordability improves as prices fall, which is precisely why a residential developer can rally on a weak housing print.

Commonwealth Bank owns the mortgages

Commonwealth Bank of Australia (ASX: CBA) is the largest mortgage lender in the country.

The company’s FY26 result produced cash net profit after tax of $10,982 million, up 7%, on a net interest margin of 2.05%.

Home loan arrears at 90 days or more were at 0.73%, and the loan impairment expense rose 9% to $788 million.

Chief executive Matt Comyn noted that housing activity had softened from a high base while application volumes appeared to have stabilised in recent weeks.

Falling home values do not create losses on their own. But they matter when borrowers cannot pay and the security is worth less than the loan.

Arrears of 0.73% are elevated and alarming, yet CBA still managed to return $5.05 per share fully franked to shareholders.

Foolish takeaway

The three companies are at very different points of the same cycle.

REA Group looks the most exposed, because listing volumes are already falling and the multiple still assumes growth.

Stockland arguably benefits, since cheaper land and better affordability feed straight into its development pipeline.

CBA sits somewhere in between, with a slower loan book but no real credit problem yet.

If home values keep sliding through spring, I would expect the gap between the three stocks to widen.

The post Home values just fell for a fifth straight month. Which ASX shares are most exposed? appeared first on The Motley Fool Australia.

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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.