Tag: Stock pick

Investors looking for dependable passive income don’t need to look far on the ASX.

While plenty of shares offer attractive yields, only a handful combine income reliability with strong underlying businesses and long-term stability.

Two standouts right now are the blue-chip names listed below that continue to deliver consistent dividends through almost every economic cycle.

Here’s why analysts think they could be among the best dividend shares to buy today.

Woolworths Group Ltd (ASX: WOW)

Woolworths has long been one of the safest income stocks on the ASX, and it isn’t hard to understand why. As Australia’s dominant supermarket operator, it benefits from steady, recurring demand for essential household items.

Whether the economy is booming or busting, customers continue to buy groceries, baby products, cleaning supplies, and everyday necessities. That dependable spending base translates into predictable earnings and, in turn, reliable dividends.

Woolworths continues to invest heavily in digital upgrades, online ordering, logistics, automation, and data-driven retail innovations. These investments are helping the company defend its market share and improve long-term profitability, even as customers become more price conscious. Its scale, brand strength, and supply-chain capabilities give it enduring competitive advantages that smaller competitors simply can’t match.

Bell Potter thinks a buying opportunity has opened up following sustained share price weakness. It has put a buy rating and $30.70 price target on its shares.

As for income, it is forecasting fully franked dividends of 91 cents per share in FY 2026 and then 100 cents per share in FY 2027. Based on its current share price of $28.08, this would mean dividend yields of 3.25% and 3.55%, respectively.

Transurban Group (ASX: TCL)

Transurban is another ASX dividend share that income investors should keep on their radar. As the operator of major toll roads across Sydney, Melbourne, Brisbane, and North America, the company enjoys one of the most predictable revenue streams on the market.

Traffic volumes tend to grow steadily over time as populations increase and cities expand, giving Transurban strong long-term cashflow visibility.

The company’s assets are supported by long-term concession agreements, often stretching decades into the future, which provide a high degree of certainty around future toll revenue. This stability allows Transurban to return meaningful distributions to shareholders year after year.

And as inflation rises, toll escalators built into many of its contracts help naturally lift revenue. Combined with development projects, its long-term dividend outlook looks very rosy.

Citi currently has a buy rating and $16.10 price target on its shares.

With respect to income, it is forecasting dividends per share of 69.5 cents in FY 2026 and then 73.7 cents in FY 2027. Based on its current share price of $14.82, this would mean dividend yields of 4.7% and 5%, respectively.

The post 2 of the best ASX dividend shares to buy for dependable passive income appeared first on The Motley Fool Australia.

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• Age Pension worries? 7 income stocks to consider for retirement
• How to make $50,000 of passive income a year from ASX shares
• Top Australian stocks to buy right now with $5,000
• Buy these ASX dividend shares for 4% to 7% yields
• Thank goodness I didn’t invest $5,000 in Woolworths shares 4 years ago

Citigroup is an advertising partner of Motley Fool Money. Motley Fool contributor James Mickleboro has positions in Woolworths Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Transurban Group. The Motley Fool Australia has positions in and has recommended Transurban Group and Woolworths Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If you’re approaching retirement and worried about the prospect of living on the Age Pension, you’re not alone. Although the Pension is one of Australia’s most important social safety nets, it can be difficult to lead a comfortable retirement on $813 a week (couple rate), particularly if you rent or haven’t paid off the mortgage on your home. That’s where ASX dividend income stocks can help.

Unlike cash investments, such as term deposits, dividend-paying stocks can offer meaningful returns that exceed inflation and can increase over time without requiring additional investment.

Investing in any stock carries risks, of course. However, with the right stocks, I believe any Australian can enjoy a more comfortable retirement compared to if they were to rely solely on their cash savings and the Pension.

So today, let’s talk about seven ASX income stocks that I think would serve a retiree, or pre-retiree, for decades to come.

Seven ASX dividend income stocks to supplement the pension

Coles Group Ltd (ASX: COL)

First up, we have a familiar name in Coles. What makes Coles a prudent long-term income investment for someone at or approaching retirement age is its defensive nature. We all need to eat and stock our households with life’s essentials. As long as Coles offers these goods at convenient locations and affordable prices, its business should do well in all economic circumstances. Coles also pays a decent dividend, which has always come with full franking credits attached.

Telstra Group Ltd (ASX: TLS)

Telstra offers many of the attributes that make Coles a compelling retirement stock. Consider how indispensable internet connections and mobile phones are to our modern world. When we also consider that Telstra is the clear market leader in providing both of these services in Australia, its value becomes apparent. Telstra also offers stable dividend income that has always come fully franked.

Commonwealth Bank of Australia (ASX: CBA)

ASX banks are famous for their fat, and mostly fully franked, dividends, and CBA is no exception. CBA has been very expensive for a long time, but has recently come off the boil a little. Although still expensive, the current pricing on this income stock may provide a potentially decent entry point for long-term investors.

Transurban Group (ASX: TCL)

You may be familiar with Transurban as the large company that operates most of the major toll roads in the country. Whilst these tolls might be the bane of motorists, they are a highly reliable source of revenue for Transurban, which makes it a good candidate as an income stock for retirement. Although this stock’s dividends don’t offer much in the way of franking credits, it does usually have a high and stable yield on the table.

Wesfarmers Ltd (ASX: WES)

Wesfarmers is next up. This retail and industrial conglomerate has numerous underlying businesses, making it one of the most diversified ASX blue-chip companies. Its crown jewels are the retailers like Bunnings, OfficeWorks and Kmart, though. Wesfarmers has demonstrated itself to be a conservative and prudent manager of capital for decades. Given the ongoing dominance of this income stock’s underlying businesses, Wesfarmers arguably seems primed to continue its track record.

Lottery Corp Ltd (ASX: TLC)

Lottery Corp is the company behind most lotteries and Keno games across Australia. The temptation to win a jackpot is a universal one, and grips Australians regardless of the state of the broader economy. Given that Lottery Corp has exclusive licenses to run these services in most states and territories for years to come, this makes Lottery Corp a reliable income stock to consider for a retirement portfolio. The company pays a decent, and fully franked, dividend.

Australian Foundation Investment Co Ltd (ASX: AFI)

AFIC is a listed investment company (LIC) that invests in a broad portfolio of underlying shares itself. It has been following the same set of rules for decades and has consistently delivered decent returns for its investors, with a focus on capital protection. The beauty of stocks like AFIC is that the company’s management makes the tough investment decisions for you, making it a true ‘bottom-drawer’ investment. AFIC pays a highly stable dividend income, which is also fully franked.

The post Age Pension worries? 7 income stocks to consider for retirement appeared first on The Motley Fool Australia.

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• Buy BHP and this blue chip ASX dividend share

Motley Fool contributor Sebastian Bowen has positions in 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 Telstra Group and Transurban Group. The Motley Fool Australia has recommended 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.

The Australian share market has delivered a return of approximately 10% per annum over the long term.

While that is a great return, investors don’t necessarily have to settle for that.

Not when there are ASX 200 shares out there that analysts believe could deliver returns that are far greater than this.

With that in mind, let’s take a look at two shares that could be dirt cheap right now:

James Hardie Industries plc (ASX: JHX)

The first ASX 200 share that could offer material upside over the next 12 months is James Hardie.

This building products giant has been dealing with a tough demand environment in North America, as higher interest rates and softer housing activity weighed on volumes. Despite that, the company’s most recent quarterly update signalled that conditions may be stabilising faster than expected.

This caught the eye of analysts at Morgans. They noted that while organic volumes are still declining, the performance was better than feared and could mark a bottoming in the cycle.

Morgans also estimates that James Hardie is now trading on a forward PE ratio of 17x, which it sees as undemanding given the company’s strong market position and the potential for earnings to rebound as the US housing cycle improves.

In response to the update, the broker upgraded James Hardie shares to a buy rating with a $35.50 price target. Based on its current share price of $27.60, this implies potential upside of over 25% for investors.

ResMed Inc (ASX: RMD)

Another ASX 200 share that could rise strongly from current levels is ResMed.

The sleep and respiratory care giant helps millions of people manage sleep apnoea and related conditions. Its technology not only improves quality of life but also reduces healthcare costs, which is a powerful combination that has helped ResMed become a global leader in its field.

The company continues to grow thanks to its recurring revenue model, driven by the sale of masks, accessories, and cloud-connected devices. Its digital health platform, which monitors patient adherence, also provides valuable data that strengthens relationships with healthcare providers and insurers.

And after a period of share price weakness, the stock now looks very attractively priced. Macquarie, for example, has an outperform rating and $49.20 price target on its shares. Based on its current share price of $37.81, this implies potential upside of 30% for investors over the next 12 months.

But it isn’t just about the next 12 months. Given its strong cash flow, robust balance sheet, and expanding pipeline of digital health innovations, ResMed could be a business to own for decades.

The post These ASX 200 shares could rise 25% to 30% appeared first on The Motley Fool Australia.

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

The ASX stock Shaver Shop Group Ltd (ASX: SSG) has built a reputation as an impressive ASX dividend share, in my view.

The business currently operates 125 Shaver Shop stores across Australia and New Zealand, in addition to its websites.

It says it offers customers a wide range of quality brands, at competitive prices, supported by “excellent staff product knowledge”. The business sources products from major manufacturers. Its specialist knowledge and strong track record in the personal grooming segment enable it to negotiate exclusive products with suppliers.

The company’s core product range includes male and female hair removal products, such as electric shavers, clippers, trimmers, and wet shave items. It also sells items in the categories of oral care, hair care, massage, air treatment, and beauty.

ASX dividend stock credentials

Shaver Shop has delivered investors a very reliable dividend over the last several years.

It increased its dividend each year between FY17 and FY23. The business then maintained its annual dividend per share at 10.2 cents in FY24. It hiked its payout to 10.3 cents per share in FY25.

There are plenty of ASX stocks that have cut their dividend in recent years, including retailers. Shaver Shop, on the other hand, has managed to provide investors with resilience.

According to the forecast on CMC Markets, Shaver Shop is projected to pay an annual dividend of 10.5 cents per share in FY26. That translates into a cash dividend yield of 7.4% and a grossed-up dividend yield of 10.6%, including franking credits.

The business doesn’t pay a monthly dividend, so I think it’s better to consider it an annual goal and then divide it by 12.

For an investor to generate $100 of monthly income, we’re talking about an annual goal of $1,200 cash. This means investors would need to own 11,429 Shaver Shop shares.  

But, if we were to include the franking credits as part of the passive income goal, an investor would need only 8,000 Shaver Shop shares.

Why the outlook is positive

With a dividend yield that large, it doesn’t need to deliver huge capital growth to deliver pleasing overall returns.

The forecast on CMC Markets suggests that the business could increase its dividend per share to 11.6 cents again in FY27. It’s also projected to deliver earnings per share (EPS) growth of 11.7 cents in FY26 (a slight increase) and then deliver 12.8 cents of EPS in FY27.

That means it’s only trading at 12x FY26’s estimated earnings and 11x FY27’s estimated earnings.

The ASX stock can grow earnings through several strategies, including opening more stores, collaborating with additional brands, expanding its own private brand (Transform-U), and increasing online sales.

Overall, I think it has a promising future for both earnings growth and good dividends.

The post I’d buy 11,429 shares of this ASX stock to aim for $100 a month of passive income appeared first on The Motley Fool Australia.

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

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

There are currently 11 public companies that boast market capitalizations of at least $1 trillion. In order from largest to smallest, they are:

1. Nvidia: $4.6 trillion
2. Apple: $4 trillion
3. Microsoft: $3.8 trillion
4. Alphabet: $3.3 trillion
5. Amazon: $2.5 trillion
6. Saudi Aramco: $1.7 trillion
7. Broadcom: $1.6 trillion
8. Meta Platforms: $1.5 trillion
9. Taiwan Semiconductor Manufacturing (NYSE: TSM): $1.5 trillion
10. Tesla: $1.3 trillion
11. Berkshire Hathaway: $1.1 trillion

You might notice that with the exceptions of conglomerate Berkshire Hathaway and the Saudi oil powerhouse, all of the market’s trillion-dollar stocks share a common thread: artificial intelligence (AI).

Prior to the dawn of the AI revolution, Apple, Microsoft, and Alphabet were the only companies that featured trillion-dollar valuations consistently. This is important to point out, as Nvidia — which is now the world’s most valuable company — witnessed historic levels of market-cap expansion over the last three years thanks entirely to the AI boom.

While Nvidia remains king of the parallel processing chip realm, the technology behemoth has to give a lot of credit to its manufacturing partners — particularly Taiwan Semi.

TSM Market Cap data by YCharts.

While TSMC’s market value has already risen nearly fourfold during the AI revolution, I think its rally could continue as investment in AI infrastructure begins to kick into a new gear.

Let’s explore what makes Taiwan Semi such an important variable within the broader AI equation, and assess what supports my view that the stock could double over the next couple of years, lifting the company into the $3 trillion club.

TSMC: The unsung hero of AI development

When new mega-deals get announced in the AI industry, chances are, the headlines of the stories relate to which hyperscaler has decided to procure billions of dollars’ worth of Nvidia’s graphics processing units (GPUs). Big tech’s capital expenditures continue to accelerate, and I think it’s reasonable to say that demand for data center chips won’t diminish anytime soon. While this is good news for Nvidia investors, it’s even better for Taiwan Semiconductor.

The reason is simple: TSMC is already the world’s largest third-party chip foundry by revenue — holding an estimated 68% market share. In essence, chip designers like Nvidia, Advanced Micro Devices, Apple, Broadcom, Qualcomm, and many others outsource much of their manufacturing to Taiwan Semi’s best-in-class fabrication facilities.

These dynamics are what make Taiwan Semi such a lucrative opportunity. Given the company’s broad customer base, in combination with the tailwinds of rising chip demand, TSMC represents the ultimate pick-and-shovel semiconductor stock in the AI infrastructure era. 

Fuel for Taiwan Semi’s next growth phase

The chart below shows Taiwan Semi’s revenue and gross margin trends over the last three years. The combination of accelerating sales and improving margins speaks volumes about the level of pricing power TSMC is able to command for its foundry services.

TSM Revenue (TTM) data by YCharts.

With this type of momentum, smart investors are asking how TSMC can keep its growth train chugging along.

From a macro standpoint, AI infrastructure is expected to be a $7 trillion opportunity over the next five years — according to a forecast from McKinsey & Company.

In addition, AI workloads continue to become more sophisticated. As applications across robotics and autonomous systems move closer to commercialization, more advanced chipsets will be required. Anecdotally, TSMC is already working closely with Tesla to bring its custom AI5 chip to life.

Furthermore, Nvidia CEO Jensen Huang recently told investors that demand is so high for the company’s various data center hardware — particularly its new Blackwell and Blackwell Ultra chips and its next-generation Vera Rubin architecture — that an estimated $300 billion in incremental revenue could be recognized over the next year alone.

With trillions of dollars expected to be poured into additional data center capacity, and with new chip designs coming to market, demand for Taiwan Semi’s robust manufacturing expertise appears likely to be sustained for the foreseeable future.

Is Taiwan Semi stock a good buy right now?

At the moment, Taiwan Semi trades at a forward price-to-earnings (P/E) ratio of 27. While this is close to its peak levels during the AI revolution, I think it deserves that premium.

TSM PE Ratio (Forward) data by YCharts.

Over the last several months, sentiment appears to have shifted more positively toward TSMC. I think the reason is twofold. First, the geographic expansion of its foundry footprint beyond Taiwan is helping mitigate investors’ fears related to geopolitical tensions with China.

Moreover, I think growth investors are beginning to better understand TSMC’s critical role in the AI narrative and are bullish on the company’s prospects as big tech doubles down on AI infrastructure.

While the stock isn’t cheap, TSMC’s upside potential is compelling. Against this backdrop, I see TSMC stock as a no-brainer pick to buy and hold over the next several years. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Meet the supercharged artificial intelligence (AI) growth stock that could join Apple, Nvidia, Alphabet, and Microsoft in the $3 trillion club by 2027 appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Adam Spatacco has positions in Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Advanced Micro Devices, Alphabet, Amazon, Apple, Berkshire Hathaway, Meta Platforms, Microsoft, Nvidia, Qualcomm, Taiwan Semiconductor Manufacturing, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Broadcom and has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Advanced Micro Devices, Alphabet, Amazon, Apple, Berkshire Hathaway, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

It has been a tough period for Commonwealth Bank of Australia (ASX: CBA) shares.

Since hitting a record high of $192.00 in June, the banking giant’s shares have lost 20% of their value.

Unfortunately for shareholders, analysts believe that this could just be the start of even greater declines.

But just how low could CBA shares go in 2026? Let’s take a look at what brokers are predicting for Australia’s largest bank.

Where are CBA shares heading?

Firstly, it is worth highlighting that brokers have been calling CBA shares overvalued and predicting sharp declines for years.

Despite this, the bank’s shares have managed to outperform the market and even some popular ASX growth shares with strong returns.

But it is also worth remembering that trading conditions in the banking sector aren’t as easy as they were several years ago and growth is getting hard to come by. This makes it hard to justify the premium valuations that the banks are trading on.

It is partly for this reason that analysts at UBS have put a sell rating and $125.00 price target on CBA’s shares. This implies potential downside of approximately 18% from current levels.

While that decline would be disappointing, it certainly is not the worst-case scenario.

For example, the team at Macquarie has put an underperform rating and $106.00 price target on its shares. This suggests that there is potential downside of approximately 31% over the next 12 months. It commented:

While CBA remains the leading banking franchise, with cracks appearing in its deposit ‘moat’, and further downside risk to consensus, we believe valuation of ~26x FY26E P/E and ~3.5x P/B remains detached from fundamentals. Maintain Underperform.

But that’s not even the furthest that analysts think CBA shares could fall in 2026. The most bearish broker at present is Morgans, which has a sell rating and $96.07 price target on them. Based on its current share price, this implies potential downside of over 37% for investors between now and this time next year. Morgans recently said:

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.

Overall, the broker community appears convinced that next year could be a bad one for the big four bank’s shares and that investors should be taking profit before it is too late.

The post How low could CBA shares go in 2026? 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 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.

If you want to build serious long-term wealth, one of the smartest strategies is to buy a handful of high-quality ASX ETFs and simply hold them for decades.

A 20-year investing horizon gives compounding the freedom to work its magic, smoothing out the bumps and capturing the long-run performance of global markets.

The good news for Australian investors is that the ASX offers world-class ETFs that provide instant diversification across many of the most innovative stocks and strongest economies on the planet.

If you’re looking to set up a portfolio you won’t need to tinker with for a very long time, the following three ASX ETFs are hard to beat.

iShares S&P 500 ETF (ASX: IVV)

When it comes to long-term wealth creation, it is hard to look beyond the US market.

The iShares S&P 500 ETF tracks the S&P 500 index, giving investors a slice of America’s 500 largest stocks. These are the businesses driving innovation in technology, healthcare, consumer spending, and industrials.

This includes giants such as Microsoft (NASDAQ: MSFT), Nvidia (NASDAQ: NVDA), Amazon (NASDAQ: AMZN), Alphabet (NASDAQ: GOOGL), Tesla (NASDAQ: TSLA), and Walmart (NYSE: WMT). These companies have shaped global consumer behaviour, created new industries, and consistently reinvested into product development and growth. For a 20-year investment horizon, it is arguably a must-have building block.

Betashares India Quality ETF (ASX: IIND)

India is increasingly being viewed as one of the world’s most exciting long-term economic growth stories. With a young population, a rapidly expanding middle class, modernising infrastructure, and booming digital adoption, the country is expected to be one of the fastest-growing major economies for decades.

The Betashares India Quality ETF focuses specifically on high-quality Indian companies with strong fundamentals. Its portfolio includes leading names such as Infosys (NYSE: INFY), Tata Consultancy Services (NSEI: TCS), and HDFC Bank (NSEI: HDFCBANK). These are businesses benefitting from both domestic expansion and the global outsourcing boom.

India is still early in its economic development cycle compared to Western markets, meaning its long-term runway could be significantly larger. For Australian investors wanting emerging-market growth without taking on excessive risk, this fund offers a blend of quality, diversification, and future upside. It was recently named as one to consider buying by analysts at Betashares.

Betashares Global Shares Ex-US ETF (ASX: EXUS)

If you have your US exposure sorted, then it could be worth looking at the new Betashares Global Shares Ex-US ETF.

This ASX ETF gives investors exposure to more than 900 large and mid-cap stocks across 22 developed markets outside the US and Australia.

Its top holdings include ASML (NASDAQ: ASML), Roche (SWX: ROG), AstraZeneca (LSE: AZN), Nestlé (SWX: NESN), and SAP (ETR: SAP). These are global leaders in semiconductors, pharmaceuticals, consumer goods, and enterprise software.

This fund balances a long-term portfolio by reducing concentration in American technology stocks and increasing exposure to financials, industrials, healthcare, and consumer defensives. It was also recently named as one to consider buying by the fund manager.

The post The best ASX ETFs to buy and hold for 20 years 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 positions in and has recommended ASML, Alphabet, Amazon, Microsoft, Nvidia, Tesla, Walmart, and iShares S&P 500 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended AstraZeneca Plc, HDFC Bank, Nestlé, and Roche Holding AG and has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended ASML, Alphabet, Amazon, Microsoft, Nvidia, and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Sonic Healthcare Ltd (ASX: SHL) shares were among the best performers on the S&P/ASX 200 Index (ASX: XJO) this past week.

Shares in the ASX 200 global pathology provider closed up 0.6% on Friday, trading for $22.98 apiece. This put the share price up 7.8% in a week that saw the benchmark Aussie index close down 2.5%.

Longer-term, Sonic Healthcare shares remain down 16.6% over 12 months, trailing the 1.1% one-year gains delivered by the ASX 200.

Though that’s not including the $1.07 a share in partly franked dividends the healthcare stock has paid out over this time. At Friday’s closing price, Sonic Healthcare stock trades on a partly franked trailing dividend yield of 4.7%.

Which brings us back to our headline question.

Following on this past week’s gains, what target does Macquarie Group Ltd (ASX: MQG) have on the stock?

What’s the outlook for Sonic Healthcare shares?

Much of the ASX 200 healthcare stock’s outperformance this past week came on the heels of the company’s annual general meeting (AGM) on Thursday, where management also provided an FY 2026 trading update through to October.

Sonic Healthcare shares closed up 6.3% on the day, with the company reaffirming that it’s on track to meet its FY 2026 earnings before interest, taxes, depreciation and amortisation (EBITDA) guidance. Management is forecasting full-year EBITDA will come in between $1.87 billion and $1.95 billion (on a constant currency basis).

If Sonic Healthcare achieves the higher end of that range, that would represent a 12.7% EBITDA increase from FY 2025.

Taking a closer look at Sonic’s FY 2026 guidance, Macquarie noted:

SHL expects a 2H26 weighting to their EBITDA at ~54-55%, which is “consistent with historical weighting due to seasonality”. We expect pathology margin dilution in FY26E vs FY25 due to SHL’s recent margin-dilutive acquisitions (LADR, Swiss businesses, UK contract).

The broker added:

SHL expects the US Protecting Access to Medicare Act (PAMA) to be deferred or cancelled, with guidance excluding the potential ~A$15m impact of fee reductions in US from January 2026 (in line with previous guidance commentary).

Following Thursday’s update, Macquarie maintained a neutral rating on Sonic Healthcare shares.

Still, the broker has a 12-month price target of $25.20 a share for the ASX 200 healthcare stock. That represents a potential upside of almost 10% from Friday’s closing price. And it doesn’t include those two upcoming dividends.

Macquarie concluded:

While acknowledging potential synergy benefits from recent acquisitions, we note margin headwinds and elevated leverage in the near term. Further, risks remain around PAMA, Fair Work decision and full impacts from fee cuts.

The post How much upside does Macquarie predict for Sonic Healthcare 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 positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Sonic Healthcare. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Many passive income articles start with the same formula: work out the yield you need, divide your income target by that number, and you are done.

But building a real $50,000 annual income stream from the share market isn’t a neat spreadsheet exercise, it is a journey.

It rarely happens in a straight line, and the smartest investors don’t aim for income first. They build their portfolio up before they take from it.

Here’s a more practical and realistic approach to creating a $50,000-a-year passive income stream from ASX shares.

Forget income at the beginning

It may sound counterintuitive, but the biggest mistake income investors make is chasing high dividend yields too early. High-yield portfolios often grow slowly, and that slows down the overall process.

If you want $50,000 a year in the future, you first need a large, fast-growing portfolio now. That might mean investing heavily in a blend of blue-chip compounders and broad-market ETFs. Think of businesses like TechnologyOne Ltd (ASX: TNE), NextDC Ltd (ASX: NXT), ResMed Inc (ASX: RMD), and global ETFs like the Betashares Nasdaq 100 ETF (ASX: NDQ) and the Vanguard MSCI Index International Shares ETF (ASX: VGS).

These shares won’t throw off big income today, but they will grow your capital far faster than traditional high-yield stocks.

Importantly, the bigger your compounding base, the less you need to rely on chasing ultra-high yields later.

Let’s imagine you build your portfolio to around $700,000 to $1 million, the income problem becomes dramatically easier.

At a 5% dividend yield, which is achievable through a diversified mix of dividend shares such as banks, infrastructure, supermarkets, REITs, and LICs, a $1 million portfolio generates $50,000 a year.

Starting at zero, with a 10% average annual return, it would take approximately 23 years to grow a portfolio to $1 million if you could invest $1,000 a month into ASX shares.

You could get there sooner if you can afford to put more into the share market each month, or deliver even greater returns.

Passive income

Once your portfolio is large enough, you can begin shifting toward dependable dividend payers.

This is where high-quality income shares come in. Companies like Woolworths Group Ltd (ASX: WOW), Transurban Group (ASX: TCL), APA Group (ASX: APA), Coles Group Ltd (ASX: COL), and Telstra Group Ltd (ASX: TLS) typically offer stable, predictable payouts.

You might also incorporate dividend-focused ETFs such as Vanguard Australian Shares High Yield ETF (ASX: VHY) or income LICs.

At this stage, reinvesting dividends is no longer essential. income becomes the goal. But the portfolio you built from years of growth means you don’t need unrealistic yields or risky stocks to hit your $50,000 target.

Foolish takeaway

Making $50,000 a year in passive income from ASX shares isn’t about finding the highest-yielding stock or building the perfect dividend portfolio straight away. It is a multi-stage strategy.

You grow the capital first, you build the income second, and then you sit back and watch the money roll in year after year.

The post How to make $50,000 of passive income a year from ASX shares appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in BetaShares Nasdaq 100 ETF, Nextdc, ResMed, Technology One, and Woolworths Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended BetaShares Nasdaq 100 ETF, ResMed, Technology One, and Transurban Group. The Motley Fool Australia has positions in and has recommended Apa Group, BetaShares Nasdaq 100 ETF, ResMed, Telstra Group, Transurban Group, and Woolworths Group. The Motley Fool Australia has recommended Technology One, Vanguard Australian Shares High Yield 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.

Investing for the long term (such as a decade) makes a lot of sense for wealth building, thanks to the power of compounding and the strong financial performance of good ASX shares.

Some of the best companies on the ASX (and globally) have delivered significant returns thanks to their ability to grow their revenue at a strong pace and typically deliver rising profit margins.

Investors typically value a business based on its profitability. So, if it’s able to deliver exceptional profit growth in the coming years, it could deliver really exciting returns for investors.

I’m going to talk about two ASX share investments I believe could be top performers over the next decade.

Tuas Ltd (ASX: TUA)

This ASX share is one of the most promising S&P/ASX 300 Index (ASX: XKO) shares, in my view. It’s a Singaporean telecommunications business with significant growth potential.

I like businesses that are growing quickly and have the potential to become significantly larger. Tuas recently reported its FY25 result, which revealed 29% revenue growth to $151.3 million, with mobile subscribers jumping by around 200,000 to 1.25 million.

Pleasingly, the company continues to demonstrate increasing profitability as it grows. Operating profit (EBITDA) grew by 38% in FY25, with the EBITDA margin rising to FY25, up from 42% in FY24. I’m expecting the company’s profit margins to continue climbing as it adds more subscribers.

Tuas points to sustained growth, with market-leading inclusions at each price point. It also expanded its sales channels to include Changi Airport terminals and 7-Eleven stores. The ASX share also has a small but growing broadband division, which could grow into something meaningful in the coming years.

The business said it continues to invest capital expenditure to support subscriber growth and expand 5G coverage.

Finally, the ASX share’s acquisition of a Singaporean competitor, M1, also adds significant profitability to the business.

VanEck Morningstar Wide Moat ETF (ASX: MOAT)

Exchange-traded funds (ETFs) can be just as good a growth option as an individual business.

The MOAT ETF is one of my favourite ideas because of the types of businesses it invests in.

It focuses on quality US companies that Morningstar believes possess sustainable competitive advantages or have wide economic moats.

An economic moat is the sort of advantage(s) that a company has to fight off competitors. That could be brand power, network effects, cost advantages, intellectual property, licenses and so on.

A ‘wide’ economic moat means the analysts think the business is more likely than not to generate excess profits for at least the next 20 years.

The other element of the investment strategy is to target companies trading at attractive prices relative to Morningstar’s estimate of the fair value of the business.

This results in the entire portfolio consisting of high-quality businesses that are trading at a good value and may be undervalued. I’m calling this an ASX share because it’s about investing in shares, and we can buy it on the ASX.

I like how the portfolio is diversified across various sectors such as healthcare, industrials, IT and consumer staples.

Past performance is not a guarantee of future returns, but having said that, it has delivered an average return per year of 16.6% over the last five years.

The post 2 ASX shares to buy and hold for the next decade appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Tuas. 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. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.