Fortunately for income investors, the Australian share market is filled to the brim with dividend shares.

But which ones could be buys today?

Let’s take a look at three that analysts at Bell Potter are currently recommending as buys to their clients. They are as follows:

Centuria Industrial REIT (ASX: CIP)

The team at Bell Potter thinks that Centuria Industrial REIT could be a top ASX dividend share to buy right now.

It is an industrial property company that owns a portfolio of high-quality industrial assets that is situated in urban infill locations throughout Australia and is underpinned by a quality and diverse tenant base.

Bell Potter believes the company is positioned to pay dividends per share of 16.8 cents in FY 2026 and then 17.3 cents in FY 2027. Based on its current share price of $3.24, this would mean dividend yields of 5.2% and 5.3%, respectively.

The broker has a buy rating and $3.75 price target on its shares.

Sonic Healthcare Ltd (ASX: SHL)

Another ASX dividend share that Bell Potter is tipping as a buy is Sonic Healthcare.

It is a leading pathology and diagnostic imaging provider with operations across Australia, Europe, and the United States.

Bell Potter thinks it could be a great option given its belief that the company’s performance is about to improve meaningfully. It highlights that this is expected to be “driven by right sizing the business, the impact of acquisitions in FY24 and normalising organic operations post COVID.”

As for income, Bell Potter is forecasting Sonic Healthcare to pay dividends per share of $1.09 in FY 2026 and then $1.11 in FY 2027. Based on its current share price of $22.73, this represents dividend yields of 4.8% and 4.9%, respectively.

Bell Potter currently has a buy rating and $33.30 price target on its shares.

Universal Store Holdings Ltd (ASX: UNI)

A third ASX dividend share that could be a top option for income investors is Universal Store.

It is the youth fashion retailer behind the eponymous Universal Store brand, as well as Thrills and Perfect Stranger.

Bell Potter has been pleased with the company’s performance in a tough consumer environment and believes the positive form can continue.

It expects this to underpin fully franked dividends of 37.3 cents per share in FY 2026 and 41.4 cents per share in FY 2027. Based on its current share price of $8.17, this equates to dividend yields of 4.55% and 5.1%, respectively.

Bell Potter has a buy rating and $10.50 price target on its shares.

The post 3 high-yield ASX dividend shares that smash term deposits appeared first on The Motley Fool Australia.

More reading

• Why analysts are recommending these ASX dividend stocks to their clients
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Motley Fool contributor James Mickleboro has positions in Universal Store. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Sonic Healthcare and Universal Store. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Catapult Group International Ltd (ASX: CAT), Audinate Group Ltd (ASX: AD8), and Electro Optics Systems Holdings Ltd (ASX: EOS) all operate in different industries. But they share some very investible traits. They all service global markets in growing sectors, play in technically complex spaces with high barriers to entry, and stand to benefit from long-term trends. Here’s why they should be on your radar.

Why add Catapult to your watchlist?

• Leader in a high-growth industry
• Strong results year on year
• Profitability on the horizon

Since listing on the ASX in 2014, Catapult has steadily grown to become a global leader in elite sports performance and analytics. Across the world, sports are dominated by data, from coaching tactics and player health decisions to fan engagement. And Catapult’s wearable devices and analytics platform are at the heart of the trend, used by more than 3,200 professional teams globally.

While it is not yet posting a net profit after tax, all signs are pointing in the right direction. Its H1 FY26 update reported an Annualised Contract Value of $175 million (up 19% year on year) and an increased Contribution Margin, now sitting at 51.4%. This, combined with the expectations of continued growth in free cash flow, speak to a disciplined and scalable approach.

For me, Catapult has huge potential. And with recent share price falls, potentially driven by weak sentiment in the broader tech sector and investor impatience, it’s one to consider.  

Why add Audinate to your watchlist?

• Network effect advantage
• Long-term runway for growth
• Transition phase may create opportunity

Audinate is a breakout player in audiovisual networking, with its flagship Dante platform setting new industry benchmarks in audio and video distribution. The digitised platform replaces traditional analogue cabling with fast digital delivery. And it’s embedded in devices from over 700 manufacturers globally, giving Audinate a distinct network effect advantage.

2025 was a transitional year for Audinate, leading to an increase in costs and a revenue decline, with the company reporting a 32.2% revenue decrease year on year in FY25.

But for me, there may still be a significantly longer-term opportunity here, particularly at current prices. Given its deep sector penetration, it is well placed to build recurring, high-margin software revenue streams across its existing device ecosystem.

For me, it’s one to keep a close eye on.

Why add Electro Optics Systems to your watchlist?

• Defence spending tailwinds
• Strong contract momentum
• Explosive recent growth

EOS is an Australian leader in the design and manufacture of advanced defence and space technology systems.

The company reported losses in FY 2024. However, it has a strong balance sheet, reporting cash holdings of $106.9 million and no borrowings in its Q4 2025 activity report. In addition, it reported strong order book activity, with a deal pipeline of $459 million, representing a 238% increase since 31 December 2024.

In addition, it recently entered into an agreement to acquire European-based defence and technology company MARSS. Once approved, the acquisition will add further weight to its remote weapon systems, with advanced command and control capability.

As global tensions rise and governments look to modernise defence capabilities, EOS is well-positioned to continue its strong growth trajectory. So it’s no surprise that the share price is up over 700% in the last 12 months. Whether value remains for investors is yet to be seen. But with Bell Potter upgrading EPS last week, it’s definitely one to watch.

The post Buy local: 3 Australian innovations to add to your watch list appeared first on The Motley Fool Australia.

More reading

• 3 ASX stocks every Aussie investor should consider in 2026
• 3 ASX tech shares I would buy with $5,000
• Broker says these ASX defence stocks are investment weapons
• This ASX defence stock is down 10% in a week. Is the next leg higher already lining up?
• Top Australian shares to buy right now with $2,000

Motley Fool contributor Melissa Maddison 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 Audinate Group, Catapult Sports, and Electro Optic Systems. The Motley Fool Australia has positions in and has recommended Audinate Group and Catapult Sports. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

When ASX growth shares fall 40% to 50% from their highs, it’s natural to assume something has gone wrong. Sometimes that’s justified. But in other cases, the sell-off reflects changing market sentiment rather than a deterioration in the business itself.

Right now, I think the market has thrown the baby out with the bathwater on a few high-quality ASX growth names. 

These are not early-stage stories with unproven models. They are established businesses that are now trading at levels that look far more reasonable than they did at their peaks.

These are three sold-off ASX growth shares I think are worth a serious look.

Zip Co Ltd (ASX: ZIP)

What’s happened to Zip’s share price has far more to do with the market than the business.

Zip hasn’t stumbled operationally. It continues to grow, expand merchant relationships, and increase customer engagement. The problem is that investor appetite for fintech and payments stocks has cooled dramatically, regardless of execution. Valuations have compressed across the sector, and Zip has been caught up in that broader reset.

What I find appealing now is that Zip is still growing, but it’s doing so with a much clearer focus on sustainable economics. Losses have ended, costs are under control, and the business no longer needs constant external funding to survive. In other words, Zip looks healthier today than it did when its share price was far higher.

To me, that disconnect between operational progress and share price performance is exactly what creates opportunity. If sentiment toward tech and fintech stabilises, Zip doesn’t need to do anything heroic to justify a higher valuation. It just needs to keep doing what it’s already doing.

Xero Ltd (ASX: XRO)

Xero’s sell-off has been more about uncertainty than underperformance.

The business itself continues to grow strongly. Subscriber numbers are rising, churn remains low, and Xero keeps generating solid cash flows. The concern isn’t demand for cloud accounting software. It’s whether the next phase of growth looks as clean as the last one.

Two issues have weighed on sentiment. The first is artificial intelligence (AI). Investors are still working out whether AI becomes a threat, a tool, or both for accounting platforms. Xero has been clear that it sees AI as an enabler, but until that strategy is fully visible, some doubt will linger.

The second is the $4 billion acquisition of Melio, which completed in October. It’s a bold move and one that introduces execution risk. Integrating a large US payments platform into Xero’s ecosystem won’t be trivial, and the market is understandably cautious about paying upfront for benefits that will take time to materialise.

That said, I think the sell-off assumes too much goes wrong and too little goes right. Xero doesn’t need Melio to transform the business overnight. Even modest success in cross-selling and monetisation could significantly expand Xero’s addressable market over time.

With the shares down more than 50% from their highs, I think the market is pricing in a worst-case outcome. For a business that continues to grow, generate cash, and invest for the long term, that feels overly pessimistic to me.

WiseTech Global Ltd (ASX: WTC)

WiseTech’s share price decline has been driven by a mix of company-specific issues and broader growth stock de-rating.

What’s different this time is that expectations have been thoroughly reset. Growth is no longer assumed. It needs to be delivered. That’s uncomfortable in the short term, but healthy over the long run.

WiseTech remains deeply embedded in global logistics workflows, with a platform that becomes more valuable as complexity increases. The shift toward a new commercial model and the integration of large acquisitions have introduced uncertainty, but they also create the potential for a more scalable and predictable earnings base if executed well.

At 55% below its highs, I think the market is pricing in a lot of things going wrong and very little going right. For patient investors, that imbalance is where opportunity often emerges.

Foolish takeaway

Not every sold-off ASX growth share deserves a second look. But Zip, Xero, and WiseTech are not broken businesses. They are businesses that were priced for perfection and then re-rated when reality intervened.

With expectations lower and valuations more grounded, I think these shares now offer something they didn’t at their peaks: a margin of safety.

The post Down 40% to 50%! Why I think these ASX growth shares are strong buys appeared first on The Motley Fool Australia.

More reading

• This ASX 200 tech stock just hit a 2-year low. Is it worth a closer look?
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• 3 Australian stocks tipped to grow 100% (or more) in 2026

Motley Fool contributor Grace Alvino 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 WiseTech Global and Xero. The Motley Fool Australia has positions in and has recommended WiseTech Global and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

On Thursday, the S&P/ASX 200 Index (ASX: XJO) fought hard but failed to get into positive territory. The benchmark index fell slightly to 8,927.5 points.

Will the market be able to bounce back from this on Friday and end the week on a high? Here are five things to watch:

ASX 200 expected to rise

The Australian share market looks set to rise on Friday despite a poor night in the United States. According to the latest SPI futures, the ASX 200 is expected to open 22 points or 0.25% higher this morning. In late trade on Wall Street, the Dow Jones is down 0.05%, the S&P 500 is down 0.55%, and the Nasdaq is down 1.4%. The latter was impacted by a 12% decline by Microsoft (NASDAQ: MSFT) shares.

Oil prices charge higher

It could be a good finish to the week for ASX 200 energy shares Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) after oil prices charged higher overnight. According to Bloomberg, the WTI crude oil price is up 3.3% to US$65.34 a barrel and the Brent crude oil price is up 3.25% to US$70.62 a barrel. This was driven by news that Donald Trump is considering strikes on Iran.

ResMed results

ResMed Inc. (ASX: RMD) shares will be on watch on the ASX 200 on Friday when the sleep disorder treatment company releases its second quarter update. The consensus estimate is for ResMed to report second quarter revenue growth of 9% along with a gross margin of 62.1%.

Gold price edges higher

ASX 200 gold shares Evolution Mining Ltd (ASX: EVN) and Newmont Corporation (ASX: NEM) could have a relatively good finish to the week after the gold price edged higher overnight. According to CNBC, the gold futures price is up 0.1% to US$5,308.5 an ounce. Safe haven demand has been driving gold higher this week.

Buy Liontown shares

Liontown Ltd (ASX: LTR) shares could be heading higher according to Bell Potter. This morning, the broker has retained its buy rating on the lithium miner’s shares with a trimmed price target of $2.42 (from $2.48). The broker said: “With current lithium price strength, LTR can rapidly generate cash to support incremental production expansions and shareholder returns. Kathleen Valley is highly strategic in terms of scale, long project life and location in a tier-one mining jurisdiction. LTR has offtake contracts with top-tier EV and battery OEMs. The company has a strong balance sheet with long tenor debt finance.”

The post 5 things to watch on the ASX 200 on Friday appeared first on The Motley Fool Australia.

More reading

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• This ASX lithium stock is being sold off today. Here’s why

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

It is fair to say that Liontown Ltd (ASX: LTR) shares have been roaring over the past 12 months.

During this time, the lithium miner’s shares have risen by a massive 200%.

While this is great news for shareholders, does it mean that the rest of us have missed the boat?

Let’s see what Bell Potter is saying about the miner following its second quarter update this week.

What is the broker saying?

Bell Potter highlights that Liontown’s quarterly update was a touch on the mixed side with positives and negatives.

The negatives were that its production and revenue were softer than it expected. However, this was offset with better than expected costs and improvements with its cash flow.

Commenting on the update, the broker said:

LTR reported December 2025 quarterly spodumene concentrate production of 105kt (BP est. 109kt), sales of 112kt (BP est. 120kt) and revenues of $130m (BP est. $150m). While sales and realised prices were marginally weaker than we had expected, unit costs were also lower. LTR maintained a strong cash position of $390m (prior quarter end $420m), with operating cash flow break even and capex of $27m.

Separately, LTR announced that LG Energy Solution has elected to convert its entire US$250m convertible note holding into equity, representing approximately 239m LTR shares at a conversion price of $1.62/sh (including accrued interest). Upon completion, LGES will hold around 8% of LTR’s issued shares and debt will reduce to $315m (excluding leases, Ford Facility $300m and WA Government’s loan $15m).

Production growth opportunity

Bell Potter also notes that Liontown has spoken about looking into expanding its production capacity. However, this would ultimately depend on the strength of lithium prices. It said:

The recent strength in lithium markets has motivated the company to revisit Kathleen Valley expansion options, potentially taking mining and plant throughput to 4Mtpa (from 2.8Mtpa) through de-bottlenecking and incremental capacity additions. This study is expected to be completed in mid-2026 and FID is subject to sustained lithium market strength and Board approvals.

Should you buy Liontown shares?

Despite the mixed quarter, Bell Potter remains positive on Liontown shares.

This morning, the broker has reaffirmed its buy rating with a trimmed price target of $2.42 (from $2.48). Based on its current share price of $2.05, this implies potential upside of 18% over the next 12 months.

The broker’s buy rating is supported by current lithium strength and Liontown’s highly strategic asset. It concludes:

Following the LGES note conversion, LTR will be in a net cash position. Over FY26- 27, LTR will continue to ramp up and de-risk Kathleen Valley. With current lithium price strength, LTR can rapidly generate cash to support incremental production expansions and shareholder returns. Kathleen Valley is highly strategic in terms of scale, long project life and location in a tier-one mining jurisdiction. LTR has offtake contracts with top-tier EV and battery OEMs. The company has a strong balance sheet with long tenor debt finance.

The post Why Liontown shares could continue to roar higher appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Friday
• This ASX lithium stock is being sold off today. Here’s why
• Liontown earnings: Revenue surges and underground transition completed in Q2 FY26
• Liontown shares in focus as LG Energy Solution swaps $250m debt for equity
• 5 things to watch on the ASX 200 on Thursday

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.

Myer Holdings Ltd (ASX: MYR) shares ended Thursday well in the red.

Shares in the S&P/ASX 300 Index (ASX: XKO) department store owner closed the day down 3.3%, trading for 44.7 cents apiece.

For some context, the ASX 300 slipped 0.5% yesterday.

Taking a step back, Myer shares are down 51.1% over the past 12 months. And though the company paid an interim dividend of 0.5 cents a share on 20 March, management opted to suspend the final dividend payout amid slumping full year earnings and a 30% year on year decline in underlying net profits.

Yet, despite the share price halving in a year, Medallion Financial Group’s Stuart Bromley is still steering clear of the ASX 300 stock (courtesy of The Bull).

Time to sell Myer shares?

“The department store giant delivered disappointing results in full year 2025, in our view,” said Bromley, who has a sell recommendation on Myer shares.

According to Bromley:

Sales were weaker than expected. Earnings before interest and tax of $140.3 million, excluding significant items, were down 13.8% on the prior corresponding period. MYR didn’t declare a final dividend.

Ongoing cost challenges and pressures on discretionary spending have continued to weigh on investor sentiment.

Citing concerns about those ongoing potential headwinds, Bromley concluded:

The shares have fallen from 96 cents on January 23, 2025 to trade at 48 cents on January 22, 2026. We see risk/reward skewed towards further downside rather than a stabilised rebound in the current cycle.

What’s the latest from the ASX 200 retail stock?

The last price-sensitive news out from the company was released on 11 December.

Myer shares closed up 9.8% on the day, spurred by a trading update delivered during the company’s annual general meeting (AGM).

Investors responded positively after Myer reported a 3% year on year increase in sales over the first 19 weeks of FY 2026.

“We’ve had a very encouraging start to FY 2026,” Myer executive chair Olivia Wirth said on the day. “We are particularly pleased with the performance of our Myer Exclusive Brands in the Homeware and Womenswear categories, supporting the delivery of the increased sales.”

The company’s Homewares and Womenswear segments both achieved double-digit sales growth over the first 19 weeks of the new financial year.

On the cost front, Wirth also said that Myer was continuing to target its Cost of Doing Business (CODB) as a percentage of sales target of around 29%. Wirth noted that the company was on track to meet that target for the full FY 2026 year.

The post Sell alert! Why this expert is calling time on Myer shares appeared first on The Motley Fool Australia.

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

If you’ve got $1,000 to invest in ASX dividend shares, sometimes the smartest move is simply putting that money to work in businesses that generate reliable cash flow and return it to shareholders over time.

With that in mind, these are three ASX dividend shares I’d seriously consider right now if income was the priority.

Transurban Group Ltd (ASX: TCL)

If I’m buying dividends, I want predictability. That’s exactly what Transurban offers.

It owns and operates toll roads in major cities where traffic demand is driven by population growth, commuting patterns, and congestion. These aren’t discretionary assets. People use them because they have to, not because conditions are perfect.

The cash flows it generates are long-dated, inflation-linked in many cases, and supported by contractual toll escalation. This has underpinned a growing stream of distributions for well over a decade.

In FY26, Transurban has guided to a distribution of 69 cents per share, up from 65 cents previously. At current prices, that translates into a dividend yield of around 5%.

HomeCo Daily Needs REIT (ASX: HDN)

HomeCo is one of the more interesting income plays on the ASX, in my view, because of what it owns.

Its portfolio is focused on large-format retail assets anchored by tenants that provide everyday necessities. Think supermarkets, hardware, childcare, and essential services. These are not malls dependent on discretionary spending.

The REIT is guiding to distributions of 8.6 cents per share in FY26. Based on the current share price, that implies a dividend yield north of 6.5%. Importantly, those distributions are underpinned by long lease terms and a high-quality tenant mix that tends to hold up well even when consumer conditions soften. Its three largest tenants are Woolworths Group Ltd (ASX: WOW), Wesfarmers Ltd (ASX: WES), and Coles Group Ltd (ASX: COL).

For investors with $1,000, I think HomeCo offers an attractive income stream without taking on excessive risk.

Lottery Corporation Ltd (ASX: TLC)

Lottery Corporation is another smart choice, in my opinion.

This ASX dividend share operates Australia’s major lottery brands, and demand for lottery tickets has historically been remarkably resilient. Sales don’t rely on economic growth, interest rates, or consumer confidence in the same way most retail businesses do.

What I like most is the quality of the cash flow. The business is capital-light, highly profitable, and converts a large portion of earnings into free cash flow. That gives it plenty of capacity to pay and grow dividends over time.

While the yield isn’t the highest on the ASX, currently 3.4% based on CommSec forecasts, the consistency and defensiveness of the earnings make it a strong long-term income holding.

Foolish takeaway

With $1,000, you don’t need complexity. You need businesses that can reliably generate cash and share it with investors.

Transurban, HomeCo Daily Needs REIT, and Lottery Corporation each approach that goal differently, through infrastructure, property, and regulated consumer demand. Together, they offer a mix of yield, stability, and resilience that I think makes sense for income-focused investors right now.

The post The smartest ASX dividend shares to buy with $1,000 right now appeared first on The Motley Fool Australia.

More reading

• Got $5,000? 5 ASX income shares to buy and hold forever
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• 5 ASX dividend shares paying 4% a year on average in 2026!
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• My 3 best ASX dividend-focused stocks to buy in February

Motley Fool contributor Grace Alvino has positions in Transurban Group and Wesfarmers. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended The Lottery Corporation, Transurban Group, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Transurban Group and Woolworths Group. The Motley Fool Australia has recommended HomeCo Daily Needs REIT, The Lottery Corporation, and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX small-cap BetMakers Technology Group (ASX: BET) has been a strong performer over the past year, with its share price up around 64% over the last 12 months.

However, the stock traded modestly lower on Thursday, down 2.5% at the close, following its latest quarterly update.

So after the update, is there more upside ahead, or is the rally starting to run out of steam?

What did BetMakers report?

In its December quarter update (Q2 FY26), BetMakers reported revenue growth of 14.1% year on year, reflecting continued momentum across its digital wagering, content, and technology businesses.

The company also delivered adjusted EBITDA of $2.7 million, representing a meaningful turnaround from a loss in the prior corresponding period and marking the fourth consecutive quarter of positive adjusted EBITDA.

Margins continued to move in the right direction, with gross margin expanding to 66.4%, up from 61.6% a year earlier. Management attributed this improvement to the business’s ongoing transition toward higher-margin, technology-led revenue streams. Operating cash flow was slightly positive in the quarter, and BetMakers finished December with approximately $30 million in cash, maintaining a solid liquidity position.

What else should investors know?

Operationally, the quarter was also notable for a series of high-profile commercial wins. BetMakers secured new or expanded agreements with major wagering operators, including Stake, PENN Entertainment, and CrownBet. While these deals reinforce the company’s position as a global racing technology provider, they have not yet made a meaningful contribution to reported revenue. Management expects its financial impact to begin flowing through in the second half of FY26.

That timing likely explains Thursday’s muted share price reaction. After a strong 12-month rally, some investors appear to be taking profits, while others are waiting for clearer evidence that recent contract wins will translate into sustained revenue and earnings growth.

Looking ahead, investors will be focused on whether growth can accelerate from here.

Foolish bottom line

The broader takeaway is that BetMakers looks like a stronger, more resilient business than it did a year ago. Revenue is growing, margins are improving, and profitability has returned on an adjusted basis. At the same time, expectations have risen alongside the share price.

Whether the rally continues will likely depend on execution over the next few quarters, particularly how quickly new customer agreements convert into recurring revenue and cash flow.

The post Up 64% in a year, can ASX small cap BetMakers keep rallying? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Friday
• Why Liontown shares could continue to roar higher
• Sell alert! Why this expert is calling time on Myer shares
• The smartest ASX dividend shares to buy with $1,000 right now
• How I’m targeting $3,000 a month in passive income with just $50 a week

Motley Fool contributor Kevin Gandiya has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Betmakers Technology Group. 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.

Most ASX investors buy shares to build wealth as quickly as possible and, hopefully, one day, to establish a stream of passive income large enough to help fund a comfortable retirement.

Receiving $3,000 a month (that’s $36,000 annually) in passive income from dividend shares is obviously a nice end goal. Unfortunately, my own portfolio is not yet at the stage where it can check that box. But, all going well, it will be one day. I’m certainly planning on getting there. Using the 4% rule, a passive income of $3,000 a month would require a portfolio worth $900,000. That’s obviously a tall ask for any Australian.

However, I’m planning on getting there. Remember, the wonders of investing and compound interest mean we don’t actually need to save up $900,000 to build a portfolio worth $900,000. We invest in ASX shares, and keep investing (including reinvesting those dividends). If we do this diligently and relentlessly, the capital will do the hard work for us.

Let’s dive a little deeper into that process.

Let’s say we have found an ASX share or index fund that returns 8% per annum on average (pretty close to the long-term returns of ASX shares). If we invested $10,000 in this share and an additional $1,000 each year for a further 4 years, we would have invested $15,000 of our own capital by year 5. Yet we would have a portfolio worth $20,560.

The magic of compound interest and passive income

That additional $5,560 of ‘free money’ is our return on investment, and, assuming the performance remains the same, will grow exponentially, year in, year out. After 20 years of doing the same investing strategy, our investor would have a portfolio worth $92,372, of which only $30,000 would be invested capital.

Fortunately, I am able to put more than $1,000 each year into my ASX stock portfolio. Let’s assume an investor with $10,000 can afford to part with $50 each week. In this scenario, they would end up with a portfolio worth $432,269 after 30 years, assuming that 8% return. That’s decent, of course, especially considering we’ve only contributed $88,000 of our own money. But not enough to reach $3,000 per month in passive income using the 4% rule. That’s why I try to pick individual stocks with the potential for market-beating returns.

At a minimum, I aim for an annualised return of 12% in my own portfolio. If I do indeed achieve that over 30 years, instead of 8%, my portfolio would be worth $1.12 million by the end of it. That’s well above what we would need to hit that $3,000 per month in passive income. In many cases, the rate of return is even more important than the amount of money we can invest.

The post How I’m targeting $3,000 a month in passive income with just $50 a week appeared first on The Motley Fool Australia.

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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 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 Qantas Airways Ltd (ASX: QAN) share price has outperformed the market in recent years.

Since this time in 2024, the airline has soared by around 85%.

After a strong run like this, the question for investors is whether there’s still upside left, or whether the easy money has already been made.

Based on current broker expectations, I think the answer is yes, there could still be meaningful upside over the next 12 months.

Macquarie has an outperform recommendation and a $12.29 target price on the shares. That implies around 21% upside from current levels. On a $10,000 investment, that alone would lift the value to roughly $12,100.

But that’s only part of the picture.

Dividends could add another $500

In addition to share price upside, Macquarie expects Qantas to deliver a dividend yield of around 5% in FY26.

On a $10,000 investment, that equates to roughly $500 in dividend income over the next year. Combined with the potential share price appreciation, the total value of an investment could approach $12,600 in 12 months if things play out as expected.

That combination of capital growth and income is one of the reasons I still find the stock appealing at current prices.

Jetstar is doing the heavy lifting

A key part of the bullish case is the role Jetstar (JQ) continues to play within the group.

Macquarie points out that “JQ continues to be the growth driver, both domestically and internationally,” helped by capacity redeployment and strong positioning in value-focused travel markets. That matters because Jetstar gives Qantas exposure to growth without relying entirely on premium travel demand.

Even where international load factors (LF) have softened, Macquarie notes that the impact has been manageable. For Qantas’ international operations, “the deployment of the A380 has improved the yield mix, resulting in a likely neutral net outcome.” In other words, weaker volumes are being offset by better aircraft utilisation and pricing.

Costs and fleet renewal

Another reason I’m comfortable with the outlook is cost control.

Macquarie acknowledges that “LF may have peaked and RASK is softening,” but also argues that this is being “more than offset by softer oil prices, strong cost discipline, and the benefits of a newer fleet.”

That’s an important point. Airlines don’t need perfect demand conditions to perform well if costs are moving in the right direction. A younger, more efficient fleet combined with disciplined execution can protect margins even when growth moderates.

Looking ahead, Macquarie expects FY26 earnings per share growth of 11%, which it describes as attractive in the context of the current valuation.

Long-term productivity upside is underappreciated

One of the more interesting longer-term drivers is Project Sunrise.

Macquarie says it is “excited about the significant productivity benefits expected on the London route,” noting that the new service will require only two aircraft instead of three to operate daily flights. That kind of efficiency gain can have a meaningful impact on returns over time.

It’s not something that will show up overnight, but it reinforces the idea that Qantas is still finding ways to improve productivity rather than relying solely on cyclical tailwinds.

Foolish takeaway

At $10.15, the Qantas share price is no longer cheap. But it doesn’t need to be.

If Macquarie’s $12.29 target is reached and the expected FY26 dividend is delivered, a $10,000 investment could realistically grow to around $12,600 over the next 12 months. That’s a compelling outcome for a stock with a strong market position, improving cost structure, and clear earnings momentum.

Nothing is guaranteed, especially in aviation. But based on the current setup, I think Qantas still offers a reasonable risk-reward balance for investors.

The post Prediction: In 12 months the Qantas share price and dividend could turn $10,000 into… appeared first on The Motley Fool Australia.

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